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Section 1: DEFM14A (DEFINITIVE PROXY STATEMENT)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
DST SYSTEMS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
   
(2)
Aggregate number of securities to which transaction applies:
   
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
   
(4)
Proposed maximum aggregate value of transaction:
   
(5)
Total fee paid:
   

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:

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MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT
February 27, 2018
To the Stockholders of DST Systems, Inc.:
You are cordially invited to attend a Special Meeting of Stockholders (the “Special Meeting”) of DST Systems, Inc. (“DST”) to be held at DST’s Broadway Conference Center, 1055 Broadway Street, Third Floor, Kansas City, MO 64105 on March 28, 2018, at 10:00 a.m. Central Time.
At the special meeting, you will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time), dated as of January 11, 2018 (the “Merger Agreement”) by and among DST, SS&C Technologies Holdings, Inc. (“SS&C”), and Diamond Merger Sub, Inc. (“Merger Sub”), a wholly owned indirect subsidiary of SS&C. Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into DST, with DST surviving the merger as a wholly owned indirect subsidiary of SS&C (the “Merger”). You also will be asked to consider and vote on (i) a non-binding advisory proposal to approve compensation that will or may become payable by DST to its named executive officers in connection with the merger and (ii) a proposal to approve one or more adjournments of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting.
If the Merger is completed, you will be entitled to receive $84.00 in cash, without interest, for each share of our common stock, par value $0.01, which we refer to as DST common stock, you own (unless you have properly exercised your appraisal rights with respect to such shares), which represents a premium of (i) approximately 29% to DST’s closing stock price on January 9, 2018, the last trading day prior to market rumors regarding the merger, (ii) approximately 35% to the volume weighted average stock price of DST common stock during the thirty (30) days ended January 9, 2018 and (iii) approximately 29% to the highest stock price of DST common stock during the fifty-two (52) week period ended January 9, 2018.
The receipt of cash in exchange for shares of DST common stock pursuant to the Merger will generally be a taxable transaction to “U.S. Holders” (as defined in “Proposal 1: Adoption of the Merger Agreement — The Merger — U.S. Federal Income Tax Consequences of the Merger”) for United States federal income tax purposes. See “Proposal 1: Adoption of the Merger Agreement — The Merger — U.S. Federal Income Tax Consequences of the Merger” beginning on page 63 of the accompanying proxy statement.
DST’s Board of Directors, after considering the reasons more fully described in this proxy statement and after consultation with independent legal and financial advisors, unanimously determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of DST and its stockholders, and adopted, approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement. The Board of Directors recommends that you vote:
(i)
“FOR” the proposal to adopt the Merger Agreement, thereby approving the transactions contemplated by the Merger Agreement, including the Merger;
(ii)
“FOR” the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by DST to its named executive officers in connection with the Merger; and
(iii)
“FOR” the proposal to approve one or more adjournments of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting.

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The enclosed proxy statement provides detailed information about the Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. The proxy statement also describes the actions and determinations of our Board of Directors in connection with its evaluation of the Merger Agreement and the Merger. We encourage you to read the proxy statement and its annexes, including the Merger Agreement, carefully and in their entirety. You may also obtain more information about DST from documents we file with the Securities and Exchange Commission from time to time.
Whether or not you plan to attend the Special Meeting in person, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the Special Meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted. If you hold your shares in “street name,” you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee.
Your vote is very important, regardless of the number of shares that you own. We cannot complete the Merger unless the proposal to adopt the Merger Agreement is approved by the affirmative vote of the holders of a majority of the outstanding shares of DST common stock. The failure of any stockholder to vote in person by ballot at the Special Meeting, to submit a signed proxy card or to grant a proxy electronically over the Internet or by telephone will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. If you hold your shares in “street name,” the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.
If you have any questions or need assistance voting your shares of DST common stock, please contact Innisfree M&A Incorporated, our proxy solicitor, by calling (888) 750-5834 toll-free.
On behalf of our Board of Directors, I thank you for your support and appreciate your consideration of this matter.
Sincerely,
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Stephen C. Hooley
President, Chief Executive Officer and Chairman of the Board
DST Systems, Inc.
Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the Merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.
The accompanying proxy statement is dated February 27, 2018 and, together with the enclosed form of proxy card, is first being mailed to stockholders of DST on or about February 28, 2018.

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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 28, 2018
Notice is hereby given that a special meeting of stockholders of DST Systems, Inc. (the “Special Meeting”), a Delaware corporation (“DST”), will be held at DST’s Broadway Conference Center, 1055 Broadway Street, Third Floor, Kansas City, MO 64105 on March 28, 2018, at 10:00 a.m. Central Time for the following purposes:
1.
To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated as of January 11, 2018 (the “Merger Agreement”), among DST, SS&C Technologies Holdings, Inc., a Delaware corporation (“SS&C”), and Diamond Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of SS&C (“Merger Sub”), as it may be amended from time to time, a copy of which is attached as Annex A to the proxy statement accompanying this notice, (the “Merger proposal”);
2.
To consider and vote on the proposal to approve, by means of a non-binding, advisory vote, compensation that will or may become payable by DST to its named executive officers in connection with the Merger contemplated by the Merger Agreement (the “merger-related compensation proposal”); and
3.
To consider and vote on the proposal to approve one or more adjournments of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting (the “DST Adjournment proposal”).
Your vote is very important to us. The merger is conditioned on the receipt of, and we cannot consummate the merger unless the Merger proposal receives, the affirmative vote of a majority of the outstanding shares of DST common stock entitled to vote.
DST will transact no other business at the Special Meeting.
The affirmative vote of a majority of the shares of DST common stock outstanding and entitled to vote thereon is required to approve the Merger proposal, provided a quorum is present. The affirmative vote of a majority of the votes cast at the Special Meeting is required to approve the merger-related compensation proposal, provided a quorum is present. The affirmative vote of a majority of the votes cast at the Special Meeting, whether or not a quorum is present, is required to approve the DST Adjournment proposal.
The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the Special Meeting will have the same effect as a vote “AGAINST” the Merger proposal, but will not have any effect on the DST Adjournment proposal or the merger-related compensation proposal. If you hold your shares in “street name,” the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote “AGAINST” the Merger proposal, but will not have any effect on the DST Adjournment proposal or the merger-related compensation proposal. Abstentions will have the same effect as a vote “AGAINST” the Merger proposal, the DST Adjournment proposal and the merger-related compensation proposal.
Only stockholders of record as of the close of business on February 22, 2018 are entitled to notice of the Special Meeting and to vote at the Special Meeting or at any adjournment or postponement thereof. A list of stockholders entitled to vote at the Special Meeting will be available in our offices located at 333 W. 11th, 5th Floor Kansas City, MO 64105 during regular business hours for a period of at least ten (10) days before the Special Meeting and at the place of the Special Meeting during the meeting.

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Stockholders who do not vote in favor of the proposal to adopt the Merger Agreement will have the right to seek appraisal of the fair value of their shares of DST common stock if they deliver a demand for appraisal before the vote is taken on the Merger Agreement and comply with all applicable requirements under Delaware law, which are summarized herein and reproduced in their entirety in Annex C to the accompanying proxy statement.
The Board of Directors recommends that you vote (i) “FOR” the Merger proposal, (ii) “FOR” the merger-related compensation proposal and (iii) “FOR” the DST Adjournment proposal.
By Order of the Board of Directors,
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Randall D. Young
Senior Vice President, General Counsel and Secretary
Dated: February 27, 2018

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YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) THROUGH THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the special meeting. If your shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished to you by such broker, bank or other nominee, which is considered the stockholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares in your account. Your broker, bank or other nominee cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.
If you fail to return your proxy card, to grant your proxy electronically over the Internet or by telephone, or to vote by ballot in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If you are a stockholder of record, voting in person by ballot at the special meeting will revoke any proxy that you previously submitted. If you hold your shares through a broker, bank or other nominee, you must obtain from the record holder a valid proxy issued in your name in order to vote in person at the special meeting.
We encourage you to read the accompanying proxy statement, including all documents incorporated by reference into the accompanying proxy statement, and annexes to the accompanying proxy statement, carefully and in their entirety. If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Toll-free: (888) 750-5835
Banks & Brokers may call collect: (212) 750-5833

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SUMMARY
This summary highlights selected information from this proxy statement related to the merger. This summary may not contain all of the information that is important to you. To understand the merger more fully and for a more complete description of the legal terms of the merger, you should read carefully this entire proxy statement, the annexes to this proxy statement, including the merger agreement, and the documents incorporated by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under the section entitled “Where You Can Find More Information” beginning on page 102. The merger agreement is attached as Annex A to this proxy statement.
Except as otherwise specifically noted in this proxy statement or as the context otherwise requires, “DST,” or “we,” “our,” “us” and similar words in this proxy statement refer to DST Systems, Inc. including, in certain cases, its subsidiaries. Throughout this proxy statement we refer to SS&C Technologies Holdings, Inc. as “SS&C” and to Diamond Merger Sub, Inc. as “Merger Sub”. In addition, throughout this proxy statement we refer to the Agreement and Plan of Merger, dated as of January 11, 2018, as it may be amended from time to time, among DST, SS&C and Merger Sub, as the “merger agreement”. All references to the “merger” refer to the merger of Merger Sub with and into DST with DST surviving as a wholly owned indirect subsidiary of SS&C. DST, following completion of the merger, is sometimes referred to in this proxy statement as the “surviving corporation”.
Parties Involved in the Merger (page 29)
DST Systems, Inc.
DST Systems, Inc. is a leading provider of specialized technology, strategic advisory, and business operations outsourcing to the financial and healthcare industries. Combining unmatched industry knowledge, critical infrastructure and service excellence, DST helps companies master complexity in the world’s most demanding industries to ensure they continually stay ahead of and capitalize on ever-changing customer, business and regulatory requirements.
DST’s principal executive offices are located at 333 W. 11th, 5th Floor Kansas City, MO 64105.
DST was formed in 1969. Through reorganization in August 1995, DST is a corporation organized in the State of Delaware. DST’s common stock, par value $0.01 per share, which we refer to as DST common stock, is currently listed on the New York Stock Exchange, which we refer to as the NYSE, under the symbol “DST.”
Additional information about DST and its subsidiaries is included in documents incorporated by reference in this proxy statement (see “Where You Can Find More Information” beginning on page 102) and on its website: www.dstsystems.com. The information provided or accessible through DST’s website is not part of, or incorporated by reference in, this proxy statement.
SS&C Technologies Holdings, Inc.
SS&C is a leading provider of mission-critical, sophisticated software products and software-enabled services that allow financial services providers to automate complex business processes and effectively manage their information processing requirements. SS&C’s portfolio of software products and rapidly deployable software-enabled services allows SS&C’s clients to automate and integrate front-office functions such as trading and modeling, middle-office functions such as portfolio management and reporting, and back-office functions such as accounting, performance measurement, reconciliation, reporting, processing and clearing. SS&C’s solutions enable their clients to focus on core operations, better monitor and manage investment performance and risk, improve operating efficiency and reduce operating costs.
SS&C’s principal executive offices are located at 80 Lamberton Road, Windsor, CT 06095.
SS&C was incorporated in Delaware in July 2005, as the successor to a corporation originally formed in Connecticut in March 1986. SS&C’s common stock trades on The NASDAQ Global Select Market, which we refer to as NASDAQ, under the symbol “SSNC.”
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Additional information about SS&C and its subsidiaries is included on its website: http://www.ssctech.com. The information provided or accessible through SS&C’s website is not part of, or incorporated by reference in, this proxy statement.
Diamond Merger Sub, Inc.
Merger Sub is a Delaware corporation and an indirect wholly owned subsidiary of SS&C, formed on January 5, 2018 for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will cease to exist.
Certain Effects of the Merger on DST (page 30)
Upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into DST, with DST continuing as the surviving corporation and a wholly owned indirect subsidiary of SS&C.
Effect on DST if the Merger is Not Completed (page 30)
If the merger agreement is not adopted by DST stockholders or if the merger is not completed for any other reason, DST stockholders will not receive any payment for their shares of DST common stock. Instead, DST will remain a public company, DST’s common stock will continue to be listed and traded on the NYSE and registered under the Securities Exchange Act of 1934, which we refer to as the Exchange Act, and DST will continue to file periodic reports with the U.S. Securities and Exchange Commission, which we refer to as the SEC.
Under certain specified circumstances, DST will be required to pay SS&C a termination fee upon the termination of the merger agreement, as described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination of the Merger Agreement — Termination Fees” beginning on page 88.
Merger Consideration (page 69)
If the merger is completed, at the time at which the merger will become effective, which we refer to as the effective time of the merger, and without any action on the part of the holder, each share of DST common stock issued and outstanding immediately prior to the effective time of the merger (other than (A) shares owned by (i) SS&C, Merger Sub or DST (which will be cancelled), (ii) any direct or indirect wholly owned subsidiary of DST or SS&C or (iii) stockholders who have properly demanded appraisal under the General Corporation Law of the State of Delaware, which refer to as the DGCL, and have not failed to perfect, nor effectively withdrawn or lost rights to appraisal under the DGCL, and (B) certain equity awards, the treatment of which is described under the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Interests of the Directors and Executive Officers of DST in the Merger — Treatment of Company Awards,” beginning on page 55, which, in the case of clauses (A) and (B) we refer to collectively as excluded shares), will be converted into the right to receive $84.00 per share in cash, which we refer to as the Merger Consideration, without interest and less any applicable withholding taxes. All shares, when so converted into the right to receive the Merger Consideration, will automatically be cancelled and will cease to exist.
As described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Merger Consideration — Exchange Procedures” beginning on page 71, on the date of the closing of the merger, SS&C shall deposit, or cause to be deposited, with a designated paying agent, as needed, cash to pay the Merger Consideration.
After the merger is completed, under the terms of the merger agreement, you will have the right to receive the Merger Consideration, but you no longer will have any rights as a DST stockholder as a result of the merger (except for the right to receive the Merger Consideration and except that stockholders who properly exercise and perfect their demand for appraisal will instead have such rights as granted by Section 262 of the DGCL, as described under the section entitled “Appraisal Rights” beginning on page 95).
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The Special Meeting (page 25)
Date, Time and Place
The special meeting of our stockholders will be held at DST’s Broadway Conference Center, 1055 Broadway Street, Third Floor, Kansas City, MO 64105 on March 28, 2018, at 10:00 a.m. Central Time.
Purpose
At the special meeting, we will ask our stockholders of record as of the close of business on February 22, 2018 which we refer to as the record date, to vote on proposals (i) to adopt the merger agreement, thereby approving the transactions contemplated by the merger agreement, including the merger, which we refer to as the merger proposal, (ii) in accordance with Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, to approve, by means of a non-binding, advisory vote, certain compensation that will or may become payable by DST to its named executive officers in connection with the completion of the merger, which we refer to as the merger-related compensation proposal, and (iii) to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting, which we refer to as the adjournment proposal.
Record Date; Shares Entitled to Vote
You are entitled to vote at the special meeting if you owned shares of our common stock on the record date. You will have one vote at the special meeting for each share of our common stock you owned at the close of business on the record date.
Quorum
As of the record date, there were approximately 59,319,166 shares of DST common stock outstanding and entitled to be voted at the special meeting. A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting, either present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, 29,659,584 shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum.
Required Vote
The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the merger proposal. Approval of the merger-related compensation proposal requires the affirmative vote of a majority of the votes cast at the special meeting. Approval of the adjournment proposal, whether or not a quorum is present, requires the affirmative vote of a majority of the votes cast at the special meeting.
Share Ownership of DST Directors and Executive Officers
At the close of business on February 22, 2018 the record date, DST directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 793,907 shares of DST common stock (excluding any shares of DST common stock that would be delivered upon exercise or conversion of stock options or other equity-based awards), which represented approximately 1.33% of the outstanding shares of DST common stock on that date. It is expected that DST’s directors and executive officers will vote their shares “FOR” the adoption of the merger agreement, although none of them has entered into any agreement requiring them to do so.
Voting of Proxies
Any DST stockholder of record entitled to vote at the special meeting may submit a proxy by returning a signed proxy card by mail or voting electronically over the Internet or by telephone, or may vote in person by appearing at the special meeting. If your shares are held in a brokerage account at a brokerage firm, bank, broker-dealer, or similar organization, then you are the “beneficial owner” of shares held in “street
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name,” and you should instruct your broker, bank or other nominee on how you wish to vote your shares of DST common stock using the instructions provided by your broker, bank or other nominee. Under applicable stock exchange rules, if you fail to instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee only has discretion to vote your shares on routine matters. Proposals 1, 2 and 3 in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. Therefore, it is important that you cast your vote or instruct your broker, bank or other nominee on how you wish to vote your shares.
If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy, signing another proxy card with a later date and returning it to us prior to the special meeting or attending the special meeting and voting in person. If you hold your shares of DST common stock in “street name,” you should contact your broker, bank or other nominee for instructions regarding how to change your vote.
Recommendation of Our Board of Directors and Reasons for the Merger (page 27)
The Board of Directors, after considering various factors described herein and after consultation with independent legal and financial advisors, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of DST and its stockholders, and adopted, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement.
The Board of Directors unanimously recommends that you vote (i) “FOR” the merger proposal, (ii) “FOR” the merger-related compensation proposal and (iii) “FOR” the adjournment proposal.
Opinion of DST’s Financial Advisor (page 43)
In connection with the merger, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which we refer to as BofA Merrill Lynch, DST’s financial advisor, delivered to the Board of Directors a written opinion, dated January 10, 2018, as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of DST common stock of the merger consideration to be received by such holders. The full text of the written opinion, dated January 10, 2018, of BofA Merrill Lynch, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this document and is incorporated by reference herein in its entirety. BofA Merrill Lynch provided its opinion to the Board of Directors (in its capacity as such) for the benefit and use of the Board of Directors in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to DST or in which DST might engage or as to the underlying business decision of DST to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger or any other matter.
For a more complete description, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Opinion of DST’s Financial Advisor” beginning on page 43.
Financing of the Merger (page 62)
The merger is not conditioned on SS&C’s ability to obtain financing. SS&C and Merger Sub have represented to DST that they will have sufficient funds at the closing of the merger, which we refer to as the closing, to pay all cash amounts required to be paid by SS&C and Merger Sub pursuant to the terms of the merger agreement, to pay any indebtedness of DST required to be repaid, redeemed, cancelled, terminated or otherwise satisfied or discharged in connection with the merger, and any premiums and fees in connection therewith, and to pay all fees, costs and expenses required to be paid by SS&C related to the transactions contemplated by the merger agreement. SS&C expects to finance the merger through proceeds from debt financing and/or equity financing. SS&C will use reasonable best efforts, to take, or cause to be
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taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange and to obtain the proceeds of the debt financing on the terms and conditions described in the commitment documents. DST must use its reasonable best efforts to cooperate with SS&C prior to closing, as reasonably requested by SS&C and at SS&C’s sole expense, in its efforts to consummate the financing of the transactions contemplated by the merger agreement.
Concurrently with the signing of the merger agreement, SS&C Technologies, Inc., a wholly-owned subsidiary of SS&C, entered into a commitment letter, dated January 11, 2018, as amended and restated on January 23, 2018 and as further amended and restated on February 15, 2018, which we refer to as the Commitment Letter, with Credit Suisse AG, Cayman Islands Branch, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Citigroup Global Markets Inc., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Deutsche Bank AG Cayman Islands Branch, JPMorgan Chase Bank N.A. and Royal Bank of Canada, which we collectively refer to as the Commitment Parties, in connection with the merger. Pursuant to the Commitment Letter, the Commitment Parties have committed to provide to SS&C Technologies, Inc. (a) senior secured credit facilities comprised of  (i) a senior secured term loan B facility to be made available to SS&C Technologies, Inc., in an aggregate principal amount equal to $6.873 billion less the aggregate principal amount of the Term B-2 Facility described below, which we refer to as the Term B-1 Facility, (ii) a senior secured term loan B facility to be made available to SS&C Technologies Holdings Europe S.a r.L and SS&C European Holdings S.a r.L, each a wholly owned subsidiary of SS&C, in an aggregate principal amount between $1.300 billion and $1.700 billion as determined by SS&C Technologies, Inc., which we refer to as the Term Loan B-2 Facility, and together with the Term B-1 Facility, the Term Loan Facilities; and (iii) a senior secured revolving credit facility to be made available to SS&C Technologies, Inc. in an aggregate principal amount of  $250 million, which we refer to as the Revolving Facility and, together with the Term Loan Facilities, the Senior Secured Credit Facilities; and (b) a senior unsecured bridge loan facility up to an aggregate principal amount of $1.250 billion, which we refer to as the Bridge Facility, and together with the Senior Secured Credit Facilities, the Debt Facilities to the extent the aggregate gross proceeds from the issuance of senior unsecured notes, which we refer to as the Notes, in a public offering or private placement and/or the issuance of shares of SS&C’s common stock, which we refer to as the Equity Securities, in a public offering is less than $1.250 billion.
The aggregate amounts of the Senior Secured Credit Facilities are subject to reduction on a dollar-for-dollar basis to the extent SS&C is able to enter into an amendment to its credit agreement, dated as of July 8, 2015, as amended, restated, supplemented or otherwise modified from time to time, by and among SS&C, SS&C Technologies, Inc., SS&C Technologies Holdings Europe S.a r.L and SS&C European Holdings S.a r.L, the lenders from time to time party thereto and Deutsche Bank AG New York Branch, as administrative agent, as described in the Commitment Letter.
The aggregate amounts of the Term B-1 Facility and the Bridge Facility are subject to reduction on a dollar-for-dollar basis to the extent SS&C is able to enter into a successful consent solicitation to its Indenture, dated as of July 8, 2015, by and among SS&C, certain of its subsidiaries and Wilmington Trust, National Association, that governs its existing senior notes, as described in the Commitment Letter.
The Commitments Parties’ obligations to provide the Debt Facilities are subject to a number of customary conditions precedent, including entry into customary documentation and completion of a customary marketing period.
The Commitment Parties’ commitments with respect to the Debt Facilities will terminate on the earliest of  (a) 5:00 p.m., New York City time, on July 11, 2018, which we refer to as the Outside Date, (provided, that if the end date has been extended under the merger agreement, the Outside Date shall be November 11, 2018), unless on or prior to such time the transactions have been consummated, (ii) the Commitment Parties’ commitments with respect to the Bridge Facility only, on a dollar-for-dollar basis on the date of the issuance of the Notes (including into escrow) and/or Equity Securities in lieu of a borrowing thereunder, (iii) the date of termination of the merger agreement or (iv) the consummation of the acquisition without the use of the Senior Secured Credit Facilities or the Bridge Facility.
SS&C currently intends to finance (a) the payment of the merger consideration and associated fees and expenses, (b) the refinancing of the indebtedness outstanding under SS&C’s and DST’s existing credit
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agreements, indentures and note purchase agreements and (c) the payment of fees and expenses with respect to the merger and the financing with (i) cash on hand and (ii) proceeds from the Debt Facilities and/or the issuance of Notes and/or Equity Securities, as applicable.
Treatment of Company Awards (page 55)
The merger agreement provides that DST’s equity awards that are outstanding immediately prior to the effective time of the merger will be subject to the following treatment at the effective time of the merger:
Treatment of Options
Upon completion of the merger, each option with respect to shares of DST common stock, which we refer to as an Option, that is outstanding, vested and unexercised as of immediately prior to the closing will be cancelled and the holder will be entitled to receive a cash payment payable as soon as reasonably practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the excess, if any, of the Merger Consideration (without interest) over the exercise price per share of DST common stock of such vested option, multiplied by (y) the number of shares of DST common stock subject to such vested option less applicable withholding taxes. Each vested Option with an exercise price equal to or greater than the Merger Consideration will be cancelled immediately prior to the effective time of the merger without payment of any consideration.
Upon completion of the merger, each unvested Option that is outstanding as of immediately prior to the closing will be converted automatically into an option to purchase the number of shares of SS&C common stock, which we refer to as a Rollover Option, equal to the product obtained by multiplying (x) the total number of shares of DST common stock subject to such unvested Option immediately prior to the closing by (y) the Equity Award Exchange Ratio, which is the quotient obtained by dividing (a) the Merger Consideration by (b) the average, rounded to the nearest one ten thousandth, of the closing-sale prices of SS&C common stock on NASDAQ as reported by The Wall Street Journal for the ten full trading days ending on (and including) the trading day preceding the closing, rounded to the nearest one ten thousandth, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover Option will have an exercise price per share of SS&C common stock (rounded up to the nearest whole cent) equal to (1) the per share exercise price for the shares of DST common stock subject to such unvested Option divided by (2) the Equity Award Exchange Ratio. Each Rollover Option will otherwise be subject to the same terms and conditions applicable to the unvested Option under the applicable DST stock plan and award agreement.
Treatment of Performance Stock Units
Upon completion of the merger, each vested performance stock unit that is outstanding immediately prior to the closing will be cancelled and the holder will be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the Merger Consideration and (y) the number of shares of DST common stock that would be delivered in respect of such vested performance stock unit based on actual performance through to the effective date of the merger, subject to any required tax withholding); provided, that to the extent that any such vested performance stock unit constitutes nonqualified deferred compensation under Section 409A of the Internal Revenue Code, which we refer to as Section 409A, the cash payment will be paid in accordance with the applicable award’s terms and at the earliest time permitted under the terms of the award that will not result in the application of a tax or penalty under Section 409A.
Upon completion of the merger, each unvested performance stock unit that is outstanding immediately prior to the closing will be converted automatically into a restricted stock unit with respect to a number of shares of SS&C common stock, which we refer to as a Rollover PSU, equal to the product obtained by multiplying (x) the number of shares of DST common stock that would be delivered in respect of such unvested performance stock unit based on actual projected performance through to the effective date of the merger (equal to 124% of target for performance stock units granted in 2016, and 200% of target for performance stock units granted in 2017) by (y) the Equity Award Exchange Ratio, with any fractional
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shares rounded down to the next lower whole number of shares. Each Rollover PSU will otherwise be subject to the same terms and conditions applicable to the unvested performance stock unit under the applicable DST stock plan and award agreement, including time-vesting requirements, but excluding any performance-vesting requirements.
Treatment of Restricted Stock Units
Upon completion of the merger, each vested restricted stock unit outstanding immediately prior to the closing will be canceled and the holder will be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the Merger Consideration and (y) the number of shares of DST common stock subject to the vested restricted stock unit (subject to any required tax withholding); provided, that to the extent that any such vested restricted stock unit constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid in accordance with the applicable award’s terms and at the earliest time permitted under the terms of the award that will not result in the application of a tax or penalty under Section 409A.
Upon completion of the merger, each unvested restricted stock unit that is outstanding immediately prior to the closing (including restricted stock units that will comprise the annual equity awards to be granted by DST in February 2018) will be converted automatically into a restricted stock unit with respect to a number of shares of SS&C common stock, which we refer to as a Rollover RSU, equal to the product obtained by multiplying (x) the total number of shares of DST common stock subject to the unvested restricted stock unit immediately prior to the closing by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover RSU will otherwise be subject to the same terms and conditions applicable to the unvested restricted stock unit under the applicable DST stock plan and award agreement.
Treatment of Cash Awards
Each vested long-term cash award that is outstanding as of immediately prior to the closing will be cancelled at the closing and the holder thereof shall be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) in the amount set forth in the applicable notice of grant and award agreement; provided, that to the extent that any such vested long-term cash award constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid in accordance with the applicable award’s terms and at the earliest time permitted under the terms of the award that will not result in the application of a tax or penalty under Section 409A. Each unvested long-term cash award that is outstanding as of immediately prior to the closing will remain outstanding and subject to the same terms and conditions as in effect immediately prior to the closing.
Treatment of Rollover Equity Under DST Stock Plans
Pursuant to the terms of DST’s stock plans, which include the DST Systems, Inc. 2015 Equity and Incentive Plan, which we refer to as the 2015 Plan, and the DST Systems, Inc. 2005 Equity and Incentive Plan, which we refer to as the 2005 Plan, the vesting of each Rollover Option, Rollover RSU and Rollover PSU outstanding as of the date of the merger agreement, including Rollover Options, Rollover RSUs, and Rollover PSUs held by any executive officer, will accelerate and vest in the event of a qualifying termination of employment that occurs during the three-year period following the change in control.
Interests of the Directors and Executive Officers of DST in the Merger (page 54)
When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that may be different from, or in addition to, your interests as a stockholder. The Board of Directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of DST. These interests may include the following:
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Continued indemnification and directors’ and officers’ liability insurance to be provided by the surviving corporation for a period of six years from the effective time of the merger.

The treatment of outstanding equity awards described above under the section entitled “Summary — Treatment of Company Awards” beginning on page 6.

The entitlement of Stephen C. Hooley and Randall D. Young to receive payments and benefits upon certain terminations of employment under their respective employment agreements with DST, as follows:

Triggering Events following a Change in Control: Under each employment agreement, during the three years after a change in control, which we refer to as the Severance Period, if the executive’s employment is terminated by DST without cause or if the executive resigns for good reason, then the executive is entitled to receive the following amounts:

Cash Severance: The executive is entitled to receive a lump sum payment equal to the salary the executive would have received for the remainder of the Severance Period (but in no event less than one year salary).

Benefit Continuation and Annual Incentives: Mr. Hooley and Mr. Young are entitled to continued participation in DST’s benefit plans for the Severance Period on the basis of the executive’s participation on the date of the change in control, or if any plan would not permit continued participation, a lump sum cash payment equal to the amount of the benefits the executive would have received if he was fully vested and a continuing participant in such plan through the Severance Period. With respect to annual incentives, the lump sum would equal the aggregate amount of the annual incentives the executive would have received during the Severance Period, assuming target achievement (prorated for the final performance year if the period ends partially through a performance year).

Certain 280G Gross-ups and Best-Net Cutback Provisions: Messrs. Hooley and Young’s employment agreements provide that they are eligible for a gross-up payment relating to the golden parachute payment tax imposed by Section 4999 of the Internal Revenue Code, which we refer to as the Code. Any gross-up payment is intended to put the executive in the same after-tax position as if he had not been subject to the parachute tax. For Mr. Hooley, the potential parachute payment is generally subject to a scaleback equal to the largest amount that can be paid without triggering the parachute tax. If the payment is scaled back, there would be no parachute tax and no gross-up payment. However, if Mr. Hooley would retain, after tax, more than 120% of the amount he would retain if the potential parachute payments were scaled back, the cap does not apply and he is entitled to a gross-up payment, not to exceed five times the parachute tax.

Separation Agreements. Messrs. Hooley and Young have each entered into a separation agreement, which we refer to collectively as the separation agreements. Under the separation agreements, upon the effective time of the merger, Messrs. Hooley and Young’s employment with DST will be terminated for “good reason” (pursuant to their employment agreements as described above). In satisfaction of all obligations of DST under their employment agreements (as described above), Messrs. Hooley and Young will receive the cash severance and benefits described above on the closing date. In addition, in lieu of conversion of any of Messrs. Hooley and Young’s outstanding RSUs and PSUs into SS&C equity awards, such awards shall be converted into cash (based upon a cash price of  $84.00 per share) and paid in a cash lump sum on the closing date, provided, that to the extent that any such cash award constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid subject to any six month delay required by Section 409A.

The entitlement of certain executive officers, including Gregg Wm. Givens, Jonathan J. Boehm, Vercie L. Lark, Edmund J. Burke, Maria Mann and Mary E. Sweetman, to receive payments and benefits upon qualifying terminations of employment under the DST Systems, Inc. Executive Severance Plan, which we refer to as the Executive Severance Plan, as follows:
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Triggering Events following a Change in Control: During the two years following a change in control, an executive who is involuntarily terminated by DST without cause and other than as a result of the executive’s death or disability, or who is terminated as a result of a constructive termination will be entitled to receive the following amounts:

Cash Payment: DST will pay the executive within sixty days of the qualifying termination, a single lump sum cash payment equal to: (1) two times the executive’s annual base salary as of the date of termination; (2) two times the executive’s target annual bonus amount; (3) two times the DST-paid portion of the COBRA continuation premium costs to cover the executive and the executive’s dependents for twelve months; plus (4) a pro rata portion of the annual incentive bonus that the executive would have received for the performance year during which the executive’s termination occurred, assuming target level achievement of performance goals.

Outplacement Services: DST will reimburse the executive for all reasonable outplacement counseling services during the eighteen month period following the qualifying termination, up to $25,000.

Reimbursement of Certain Taxes: DST will cut back the executive’s parachute payment if such cutback is more favorable to the executive than application of the excise taxes.
If the proposal to adopt the merger agreement is approved by our stockholders and the merger closes, under the terms of the merger agreement, any shares of DST common stock held by our directors and executive officers, including such shares held following the vesting or settlement of equity and equity-based awards, will be treated in the same manner as outstanding shares of DST common stock held by all other stockholders of DST entitled to receive the per share merger consideration.
Appraisal Rights (page 95)
Any shares of DST common stock that are issued and outstanding immediately prior to the effective time of the merger and as to which the holders thereof have not voted in favor of the merger and are entitled to demand and properly demand appraisal of such shares of DST common stock pursuant to Section 262 of the DGCL and, as of the effective time of the merger, have neither failed to perfect, nor effectively withdrawn or lost rights to appraisal under the DGCL, which we refer to as dissenting shares, will not be converted into the right to receive the per share merger consideration, unless and until such holder will have effectively withdrawn or lost such holder’s right to appraisal under the DGCL, at which time such shares of DST common stock will be treated as if they had been converted into and become exchangeable for the right to receive, as of the effective time of the merger, the per share merger consideration, without interest and after giving effect to any required tax withholdings, and such DST shares will not be deemed dissenting shares, and such holder thereof will cease to have any other rights with respect to such DST shares. Each holder of dissenting shares will only be entitled to such consideration as may be due with respect to such dissenting shares pursuant to Section 262 of the DGCL.
To exercise your appraisal rights, you must submit a written demand for appraisal to DST before the vote is taken on the proposal to adopt the merger agreement, you must not submit a blank proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold the shares of DST common stock of record through the effective time of the merger. Your failure to follow the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement. If you hold your shares of DST common stock through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such broker, bank or other nominee. Stockholders should refer to the discussion under the section entitled “Appraisal Rights” beginning on page 95 and the DGCL requirements for exercising appraisal rights reproduced and attached as Annex C to this proxy statement.
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U.S. Federal Income Tax Consequences of the Merger (page 63)
The exchange of DST common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined in “Proposal 1: Adoption of the Merger Agreement — The Merger — U.S. Federal Income Tax Consequences of the Merger” beginning on page 63) of DST common stock who exchanges shares of DST common stock for cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares. If you are a non-U.S. holder, the merger generally will not result in tax to you under U.S. federal income tax laws unless you have certain connections with the United States.
This proxy statement contains a general discussion of U.S. federal income tax consequences of the merger. This description does not address any non-U.S. tax consequences, nor does it pertain to state, local or other tax consequences. Consequently, you are urged to contact your own tax advisor to determine the particular tax consequences to you of the merger.
Regulatory Approvals (page 65)
DST and SS&C have agreed to use their reasonable best efforts to cooperate with each other party in taking any and all actions, and to do all things reasonably necessary, appropriate or desirable, to consummate and make effective the merger and the other transactions contemplated by the merger agreement, including obtaining any requisite approvals. These approvals include approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the HSR Act, the competition law of Ireland, the Financial Industry Regulatory Authority, which we refer to as FINRA, the United Kingdom’s Financial Conduct Authority, which we refer to as the FCA, the Central Bank of Ireland and Luxembourg’s Commission de Surveillance du Secteur Financier. Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained or obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, or require changes to the terms of the merger agreement. These conditions or changes could result in the conditions to the closing of the merger not being satisfied.
Transaction Litigation (page 83)
Subject to entry into a customary joint defense agreement, DST will give prompt notice to SS&C of litigation relating to the merger and the other transactions contemplated by the merger agreement, keep SS&C reasonably informed and give SS&C the opportunity to consult with DST and participate in the defense or settlement of any stockholder litigation against DST or any of its subsidiaries and/or any of their respective directors or officers. DST will not compromise, settle, offer to compromise or settle or come to an arrangement regarding any such stockholder litigation without SS&C’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
No Solicitation (page 77)
As of the date of the merger agreement, DST agreed to immediately cease any existing solicitations, discussions or negotiations with any parties that may have been ongoing with respect to an alternative proposal (as described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — No Solicitation” beginning on page 77) or any proposal that would be reasonably expected to result in an alternative proposal.
Under the merger agreement, DST is generally not permitted to solicit or discuss alternative proposals with third parties, subject to certain exceptions.
Except as otherwise provided in the merger agreement, DST may not, and has agreed to cause its subsidiaries and its and its subsidiaries’ directors, officers, managers and employees not to, and has agreed to instruct, and use reasonable best efforts to cause, its and its subsidiaries’ representatives not to, directly or indirectly:
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solicit, initiate or knowingly facilitate or knowingly encourage any inquiry, discussion, offer or request that constitutes, or would reasonably be expected to lead to, an alternative proposal (it being understood and agreed that ministerial acts that are not otherwise prohibited (such as answering unsolicited phone calls, but not proceeding to engage in a substantive conversation) shall not be deemed to “facilitate”);

furnish non-public information regarding DST or any of its subsidiaries or afford access to the business, properties, assets, books or records of DST or any of its subsidiaries to any person in connection with an alternative proposal;

enter into or participate in any discussions or negotiations with any person with respect to an alternative proposal;

approve, agree to, accept, endorse or recommend any alternative proposal;

effect any adverse recommendation change (as defined under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Change of Recommendation” beginning on page 79);

enter into any agreement, letter of intent, term sheet or other similar instrument providing for any alternative proposal (except for confidentiality agreements that meet certain conditions);

fail to enforce or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of DST or any of its subsidiaries; or

approve any transaction under, or any person becoming an “interested stockholder” under, Section 203 of the DGCL.
At any time before the special meeting, in the event that DST receives a bona fide alternative proposal from any third party that was not solicited in violation of the merger agreement by DST and that the Board of Directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that such alternative proposal constitutes or could reasonably be expected to lead to a superior proposal and that the failure to take such action would reasonably be expected to be inconsistent with the Board of Directors’ exercise of their fiduciary duties under applicable law, DST may:

furnish non-public information to and afford access to the business, employees, officers, contracts, properties, assets, books and records of DST and its subsidiaries to any person in response to such alternative proposal, pursuant to the prior execution of a confidentiality agreement that meets certain conditions; and

enter into and maintain discussions or negotiations with any person with respect to such alternative proposal.
Change of Recommendation (page 79)
The Board of Directors has made the recommendation that the holders of shares of DST common stock vote “FOR” the merger proposal.
The merger agreement provides that the Board of Directors may generally not effect a change of recommendation. However, prior to the special meeting, the Board of Directors, in certain circumstances and subject to certain limitations set forth in the merger agreement may (i) make an adverse recommendation (as defined in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Change of Recommendation”) in connection with an alternative proposal (as defined in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — No Solicitation”) that constitutes a superior proposal (as defined in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — No Solicitation”) or in connection with an intervening event that was not known to or reasonably foreseeable to DST as of prior to the date of the merger agreement, or (ii) cause DST to terminate the merger agreement in order to enter into a definitive agreement relating to an alternative proposal that constitutes a superior proposal, in each case, as more fully described in the section entitled “Proposal 1: Adoption of the Merger Agreement — 
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Terms of the Merger Agreement — Additional Agreements — Change of Recommendation” and in each case, subject to specified obligations to SS&C to negotiate and consider in good faith any revisions to the merger agreement proposed by SS&C as more fully described in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Change of Recommendations.”
If the Board of Directors makes an adverse recommendation change under the merger agreement, SS&C may terminate the merger agreement and receive a termination fee from DST as further described under “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination of the Merger Agreement — Termination Fees” beginning on page 88.
The merger agreement provides that the Board of Directors may generally not effect a change of recommendation. However, prior to obtaining stockholder approval, the Board of Directors, in certain circumstances and subject to certain limitations set forth in the merger agreement may make an adverse recommendation in connection with an alternative proposal that constitutes a superior proposal or in connection with an intervening event that was not known to or reasonably expected by the Board of Directors as of prior to the date of the merger agreement. If the Board of Directors makes an adverse recommendation change under the merger agreement, SS&C may terminate the merger agreement and receive a termination fee from DST as further described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination of the Merger Agreement — Termination Fees” beginning on page 88.
Prior to obtaining stockholder approval, the Board of Directors may also, in certain circumstances and subject to certain limitations set forth in the merger agreement, cause DST to terminate the merger agreement in order to enter into a definitive agreement relating to an alternative proposal that constitutes a superior proposal, in each case, subject to specified obligations to SS&C to negotiate and consider in good faith any revisions to the merger agreement proposed by SS&C.
For a more complete description, please see the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Change of Recommendations” beginning on page 79.
Conditions to the Closing of the Merger (page 85)
The following are some of the conditions that must be satisfied or waived before the merger may be consummated:

receipt of DST stockholder approval of the merger agreement and the transactions contemplated thereby;

no applicable law or judgment, preliminary, temporary or permanent, or other legal restraint or prohibition and no action, proceeding, binding order or determination by any governmental entity shall be in effect or pending that prevents or seeks to prevent, enjoins, makes illegal or prohibits the consummation of the merger and the other transactions contemplated by the merger agreement;

the waiting period (and any extension thereof) applicable to the merger under the HSR Act has been terminated or has expired and any required filings, consents, approvals, authorizations, clearances or other actions under the antitrust laws applicable to the merger in Ireland shall have been made, obtained or taken, and any applicable waiting periods thereunder shall have expired or been terminated;

all of the required financial regulatory approvals (described under the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Regulatory Approvals” beginning on page 65) shall have been obtained and be in full force and effect;

FINRA shall have approved each application filed by a broker-dealer pursuant to the terms of the merger agreement (described under the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Regulatory Approvals” beginning on page 65);
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the accuracy of the representations and warranties of DST, SS&C and Merger Sub in the merger agreement, subject in some instances to materiality or “material adverse effect” qualifiers, as of the closing date of the merger;

the performance in all material respects by DST, on the one hand, and SS&C and Merger Sub, on the other hand, of their respective obligations under the merger agreement at or prior to the closing; and

the receipt by DST and SS&C of a certificate of an executive officer of the other party, certifying that the respective conditions relating to such party set forth in the preceding bullet points have been satisfied.
Termination of the Merger Agreement (page 86)
The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger:

by the mutual written consent of SS&C and DST;

by either SS&C or DST:

if the merger is not consummated on or before July 11, 2018, which we refer to as the end date, unless all conditions are satisfied other than regulatory approvals, in which case, either DST or SS&C may extend the end date to November 11, 2018;

upon the issuance by any governmental entity of a final and non-appealable legal restraint making the transactions illegal; or

if the requisite affirmative vote of DST’s stockholders is not obtained at the meeting of the stockholders or any adjournment or postponement thereof.

by DST:

prior to receipt of the requisite affirmative vote of DST’s stockholders, in order to enter into a definitive written agreement providing for a superior proposal, provided that DST pays a termination fee of  $165 million to SS&C prior to or simultaneously with such termination; or

if SS&C or Merger Sub has breached any representation, warranty or covenant, such that the conditions relating to the accuracy of SS&C and Merger Sub’s representations and warranties or performance of covenants would fail to be satisfied (subject to a 30 day cure period).

by SS&C:

prior to the meeting of DST’s stockholders in the event that the Board of Directors makes an adverse recommendation change; or

if DST has breached any representation, warranty or covenant, such that the conditions relating to the accuracy of DST’s representations and warranties or performance of covenants would fail to be satisfied (subject to a 30 day cure period).
Termination Fee (page 88)
Under the merger agreement, DST will be required to pay a termination fee of  $165 million in connection with a termination of the merger agreement under specified circumstances. In no event will DST be required to pay the termination fees described above on more than one occasion.
Expenses Reimbursement (page 88)
If DST fails promptly to pay any amount due to SS&C in connection with a termination described above, it shall also pay any costs and expenses incurred by SS&C or Merger Sub in connection with a legal action to enforce the merger agreement that results in a judgment against DST for such amount, together with interest on the amount of any unpaid fee, cost or expense at the publicly announced prime rate of Citibank, N.A. from the date that such fee, cost or expense was required to be paid to (but excluding) the payment date.
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Expenses (page 88)
Except for the provisions described above under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Expense Reimbursement” beginning on page 88 and as specifically provided in the merger agreement, each party will bear its own expenses in connection with the merger agreement and the transactions contemplated thereby.
Specific Performance (page 89)
The parties are entitled to injunctions to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the performance of the terms and provisions of the merger agreement in addition to any other remedy to which they are entitled at law or equity.
Market Prices and Dividend Data (page 92)
On January 9, 2018, the last trading day prior to the market rumors of a potential transaction, the closing price of our common stock was $65.15 per share. On February 22, 2018 the latest practicable trading day before the printing of this proxy statement, the closing price of our common stock on the NYSE was $83.04 per share.
Under the terms of the merger agreement, from January 11, 2018 until the effective time of the merger, DST may not declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other equity interests or voting securities without SS&C’s prior written consent.
Neither the SEC nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.
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QUESTIONS AND ANSWERS
The following questions and answers are intended to address some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a DST stockholder. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, including the merger agreement, and the documents we incorporate by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under the section entitled “Where You Can Find More Information” beginning on page 102. The merger agreement is attached as Annex A to this proxy statement.
Q:
Why am I receiving these materials?
A:
On January 11, 2018, DST entered into the merger agreement providing for the merger of Merger Sub, with and into DST, with DST surviving the merger as an indirect wholly owned subsidiary of SS&C. The Board of Directors is furnishing this proxy statement and form of proxy card to the holders of DST common stock in connection with the solicitation of proxies in favor of the proposal to adopt the merger agreement and to approve the other proposals to be voted on at the special meeting.
Q:
What is the proposed merger and what effects will it have on DST?
A:
The proposed merger is the acquisition of DST by SS&C through the merger of Merger Sub with and into DST pursuant to the merger agreement. If the proposal to adopt the merger agreement is approved by the requisite number of holders of DST common stock and the other closing conditions under the merger agreement have been satisfied or waived, Merger Sub will merge with and into DST, with DST continuing as the surviving corporation. As a result of the merger, DST will become a wholly owned indirect subsidiary of SS&C and you will no longer own shares of DST common stock. DST expects to de-list its common stock from the NYSE and de-register its common stock under the Exchange Act. Thereafter, DST would no longer be a publicly traded company.
Q:
What will I receive if the merger is completed?
A:
Upon completion of the merger, you will be entitled to receive the per share merger consideration of $84.00 in cash, without interest, for each share of DST common stock that you own, unless you have properly exercised and perfected and not withdrawn your demand for appraisal rights under the DGCL with respect to such shares. For example, if you own 100 shares of DST common stock, you will receive $8,400.00 in cash in exchange for your shares of DST common stock, less any applicable withholding taxes. In no case will you own shares in the surviving corporation.
Q:
When and where is the special meeting?
A:
The special meeting will take place on March 28, 2018, at 10:00 a.m. Central Time at DST’s Broadway Conference Center, 1055 Broadway Street, Third Floor, Kansas City, MO 64105.
Q:
Who is entitled to vote at the special meeting?
A:
Only DST stockholders of record as of the close of business on February 22, 2018 or their duly appointed proxies, and “street name” holders (whose shares are held through a broker, bank or other nominee) are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. Each holder of DST common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of DST common stock that such holder owned as of the record date.
Q:
May I attend the special meeting and vote in person?
A:
Yes. All stockholders as of the record date may attend the special meeting and vote in person. Seating will be limited. Stockholders will need to present proof of ownership of DST common stock, such as a recent bank or brokerage account statement, and a form of personal identification to be admitted to the special meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the special meeting. Even if you plan to attend the special meeting in person, we encourage you to complete, sign, date and return the enclosed proxy card or vote
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electronically over the Internet or via telephone to ensure that your shares will be represented at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you hold your shares in “street name,” because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker, bank or other nominee.
Q:
What matters am I being asked to vote on at the special meeting?
A:
You are being asked to consider and vote on the following proposals:

To adopt the merger agreement, pursuant to which Merger Sub will merge with and into DST, and DST will become a wholly owned indirect subsidiary of SS&C;

To approve, by a non-binding, advisory vote, compensation that will or may become payable by DST to its named executive officers in connection with the merger; and

To approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.
Q:
How does DST’s Board of Directors recommend that I vote?
A:
The Board of Directors, after considering various factors described under the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Recommendation of Our Board of Directors and Reasons for the Merger” beginning on page 39 and after consultation with independent legal and financial advisors, determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of DST and its stockholders, and adopted, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement. The Board of Directors’ determination was unanimous.
The Board of Directors recommend that you vote

“FOR” the merger proposal;

“FOR” the merger-related compensation proposal; and

“FOR” the adjournment proposal.
Q:
How does the per share merger consideration compare to the market price of DST common stock prior to the date on which market rumors of a potential transaction occurred?
A:
The per share merger consideration represents a premium of  (i) approximately 29% to DST’s closing stock price on January 9, 2018, the last trading day prior to the market rumors of a potential transaction, (ii) approximately 35% to the volume weighted average stock price of our common stock during the thirty (30) days ended January 9, 2018 and (iii) approximately 29% to the highest stock price of our common stock during the fifty-two (52) week period ended January 9, 2018.
Q:
Will DST continue to pay a quarterly dividend until the completion of the merger?
A:
Under the terms of the merger agreement, from January 11, 2018 until the effective time of the merger, DST may not declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other equity interests or voting securities without SS&C’s prior written consent.
Q:
Does SS&C have the financial resources to complete the merger?
A:
Yes. SS&C and Merger Sub have represented to DST that they will have sufficient funds at the closing to pay all cash amounts required to be paid by SS&C and Merger Sub pursuant to the terms of the merger agreement, to pay any indebtedness of DST required to be repaid, redeemed, cancelled, terminated or otherwise satisfied or discharged in connection with the merger and any premiums and fees in connection therewith and to pay all fees, costs and expenses required to be paid by SS&C related to the transactions contemplated by the merger. In connection with the execution of the merger
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agreement, SS&C has delivered to DST a copy of the executed debt commitment letter, dated as of January 11, 2018 and amended and restated as of January 23, 2018 and as further amended and restated on February 15, 2018, providing for debt financing in an aggregate principal amount equal to $7.123 billion. In addition SS&C intends to finance the acquisition with $1.250 billion in aggregate gross proceeds from the issuance of senior unsecured senior notes in a public offering or private placement and/or the issuance of shares of SS&C’s common stock in a public offering, and to the extent that the aggregate gross proceeds from the issuance of such notes and/or equity securities is less than $1.250 billion, a senior unsecured bridge loan facility up to an aggregate principal amount of $1.250 billion is available to SS&C pursuant to the terms of the debt commitment letter.
Q:
What do I need to do now?
A:
We encourage you to read this proxy statement, the annexes to this proxy statement, including the merger agreement, and the documents we refer to in this proxy statement carefully and consider how the merger affects you. Then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the special meeting. If you hold your shares in “street name,” please refer to the voting instruction forms provided by your broker, bank or other nominee to vote your shares.
Q:
Should I send in my stock certificates now?
A:
No. After the merger is completed, under the terms of the merger agreement, you will receive shortly thereafter the letter of transmittal instructing you to send your stock certificates to the paying agent in order to receive the cash payment of the per share merger consideration for each share of your common stock represented by the stock certificates. You should use the letter of transmittal to exchange your stock certificates for the cash payment to which you are entitled upon completion of the merger. Please do not send in your stock certificates now.
Q:
I do not know where my stock certificates are, how will I get the merger consideration for my shares of DST common stock?
A:
If the merger is completed, the transmittal materials you will receive after the completion of the merger will include the procedures that you must follow if you cannot locate your stock certificates. This will include an affidavit that you will need to sign attesting the loss of your stock certificates. You may also be required to post a bond as indemnity against any potential loss.
Q:
What happens if I sell or otherwise transfer my shares of DST common stock after the record date but before the special meeting?
A:
The record date for the special meeting is earlier than the date of the special meeting and the date the merger is expected to be completed. If you sell or transfer your shares of your DST common stock after the record date but before the special meeting, unless special arrangements (such as the provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares and each of you notifies DST in writing of such special arrangements, you will transfer the right to receive the per share merger consideration if the merger is completed to the person to whom you sell or transfer your shares of DST common stock, but you will retain your right to vote these shares at the special meeting. Even if you sell or otherwise transfer your shares of DST common stock after the record date, we encourage you to complete, date, sign and return the enclosed proxy card or vote via the Internet or telephone.
Q:
When do you expect the merger to be completed?
A:
We are working toward completing the merger as quickly as possible and currently expect to complete the merger before the end of the second quarter of calendar year 2018. However, the exact timing of completion of the merger cannot be predicted because the completion of the merger is subject to conditions, including the adoption of the merger agreement by our stockholders and the receipt of regulatory approvals.
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Q:
What happens if the merger is not completed?
A:
If the merger agreement is not adopted by DST stockholders or if the merger is not completed for any other reason, DST stockholders will not receive any payment for their shares of DST common stock. Instead, DST will remain an independent public company, your shares of DST common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and DST will continue to file periodic reports with the SEC.
Under specified circumstances, DST will be required to pay SS&C a termination fee upon the termination of the merger agreement, as described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination of the Merger Agreement — Termination Fees” beginning on page 88.
Q:
Are there any other risks to me from the merger that I should consider?
A:
Yes. There are risks associated with all business combinations, including the merger. See the section entitled “Forward-Looking Statements” beginning on page 23.
Q:
Do any of DST’s directors or officers have interests in the merger that may differ from those of DST stockholders generally?
A:
Yes. For a description of the interests of our directors and executive officers in the merger, see “Proposal 1: Adoption of the Merger Agreement — The Merger — Interests of the Directors and Executive Officers of DST in the Merger” beginning on page 54.
Q: What vote is required to adopt the merger agreement?
A:
The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the merger proposal. As of the record date, there were approximately 59,319,166 shares of DST common stock issued and outstanding. Each holder of DST common stock is entitled to one vote per share of stock owned by such holder as of the record date.
The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. If you hold your shares in “street name,” the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. An abstention will also have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.
Q:
What vote is required to approve the merger-related compensation proposal and the adjournment proposal?
A:
Approval of the merger-related compensation proposal requires the affirmative vote of a majority of the votes cast at the special meeting.
Approval of the adjournment proposal, whether or not a quorum is present, requires the affirmative vote of a majority of the votes cast at the special meeting.
The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will not have any effect on the merger-related compensation proposal or the adjournment proposal. If you hold your shares in “street name,” the failure to instruct your broker, bank or other nominee on how to vote your shares will not have any effect on the merger-related compensation proposal or the adjournment proposal. An abstention will have the same effect as a vote “AGAINST” the merger-related compensation proposal and the adjournment proposal.
Q:
What happens if the merger-related compensation proposal is not approved?
A:
Approval of the merger-related compensation proposal is not a condition to completion of the merger. The vote is an advisory vote and is not binding. Accordingly, regardless of the outcome of the advisory vote, if the merger is completed, DST may still pay such compensation to its named executive officers in accordance with the terms and conditions applicable to such compensation.
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Q:
What constitutes a quorum?
A:
As of the record date, there were 59,319,166 shares of DST common stock outstanding and entitled to vote at the special meeting. The presence, either in person or represented by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting will constitute a quorum at the special meeting. As a result, in order to have a quorum at the special meeting, at least 29,659,584 shares of our common stock must be represented by stockholders present in person or by proxy at the special meeting. Abstentions (which are described below) will count for the purpose of determining the presence of a quorum for the transaction of business at the special meeting.
Broker non-votes are shares held by a broker, bank or other nominee that are present in person or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares on how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal. Because brokers, banks and other nominee holders of record do not have discretionary voting authority with respect to any of the three proposals, if a beneficial owner of shares of DST common stock held in “street name” does not give voting instructions to the broker, bank or other nominee with respect to any of the proposals, then those shares will not be present in person or represented by proxy at the special meeting. If there are any broker non-votes, then such broker non-votes will count for the purpose of determining the presence of a quorum for the transaction of business at the special meeting.
Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:
If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, to be the “stockholder of record.” In this case, this proxy statement and your proxy card have been sent directly to you by DST.
If your shares are held through a broker, bank or other nominee, you are considered the “beneficial owner” of the shares of DST common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares by following their instructions for voting. You are also invited to attend the special meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker, bank or other nominee.
Q:
How may I vote?
A:
If you are a stockholder of record, there are four ways to vote:

By attending the special meeting and voting in person by ballot;

By visiting the Internet at the address on your proxy card;

By calling toll-free (within the U.S. or Canada) at the phone number on your proxy card; or

By completing, dating, signing and returning the enclosed proxy card in the accompanying prepaid reply envelope.
A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of DST common stock, and to confirm that your voting instructions have been properly recorded when voting electronically over the Internet or by telephone. Please be aware that, although there is no charge for voting your shares, if you vote electronically over the Internet or by telephone, you may incur costs such as telephone and Internet access charges for which you will be responsible.
Even if you plan to attend the special meeting in person, you are strongly encouraged to vote your shares of DST common stock by proxy. If you are a stockholder of record or if you obtain a valid proxy to vote shares which you beneficially own, you may still vote your shares of DST common stock in person at the special meeting even if you have previously voted by proxy. If you are present at the special meeting and vote in person, your previous vote by proxy will not be counted.
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If your shares are held in “street name” through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or electronically over the Internet or by telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or via telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee.
Q:
If my broker holds my shares in “street name,” will my broker vote my shares for me? What are broker non-votes?
A:
Not without your direction. Your broker, bank or other nominee will only be permitted to vote your shares on any proposal only if you instruct your broker, bank or other nominee on how to vote. Broker non-votes are shares held by a broker, bank or other nominee that are present in person or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares on how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal. Because brokers, banks and other nominee holders of record do not have discretionary voting authority with respect to any of the three proposals, if a beneficial owner of shares of DST common stock held in “street name” does not give voting instructions to the broker, bank or other nominee with respect to any of the proposals, then those shares will not be present in person or represented by proxy at the special meeting. If there are any broker non-votes, then such broker non-votes will be counted as a vote “AGAINST” the merger proposal, but will have no effect on the adjournment or merger-related compensation proposals. Therefore, it is important that you instruct your broker, bank or other nominee on how you wish to vote your shares.
Q:
May I change my vote after I have mailed my signed proxy card or otherwise submitted my vote by proxy?
A:
Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

Submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;

Delivering a written notice of revocation to our Secretary;

Signing another proxy card with a later date and returning it to us prior to the special meeting; or

Attending the special meeting and voting in person.
Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by our Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m., Eastern time on March 27, 2018. If you have submitted a proxy, your appearance at the special meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.
If you hold your shares of DST common stock in “street name,” you should contact your broker, bank or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a valid proxy from your broker, bank or other nominee.
Q:
What is a proxy?
A:
A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of DST common stock. The written document describing the matters to be considered and voted on at the special meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of DST common stock is called a “proxy card.” The Board of Directors has designated the Proxy Committee, and each of them with full power of substitution, as proxies for the special meeting. The Proxy Committee members are Gregg Wm. Givens, Senior Vice President, Chief Financial Officer and Treasurer; Randall D. Young, Senior Vice President, General Counsel, and Secretary, and Aisha Reynolds, Managing Counsel and Assistant Secretary.
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Q:
If a stockholder gives a proxy, how are the shares voted?
A:
Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted “FOR” or “AGAINST” or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.
If you properly sign and return your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted as recommended by the Board of Directors with respect to each proposal.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return (or vote via the Internet or telephone with respect to) each proxy card and voting instruction card that you receive.
Q:
Who will count the votes?
A:
All votes will be counted by a representative of Broadridge Financial Solutions, Inc., who will act as the inspector of election appointed for the special meeting and will separately count affirmative and negative votes, abstentions and broker non-votes.
Q:
Where can I find the voting results of the special meeting?
A:
DST intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC within four (4) business days following the special meeting. All reports that DST files with the SEC are publicly available when filed. See “Where You Can Find More Information” beginning on page 102.
Q:
Will I be subject to U.S. federal income tax upon the exchange of DST common stock for cash pursuant to the merger?
A:
The exchange of DST common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined in “Proposal 1: Adoption of the Merger Agreement — The Merger — U.S. Federal Income Tax Consequences of the Merger” beginning on page 63) of DST common stock who exchanges shares of DST common stock for cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares. If you are a non-U.S. holder (as defined in “Proposal 1: Adoption of the Merger Agreement — The Merger — U.S. Federal Income Tax Consequences of the Merger”), the merger generally will not result in tax to you under U.S. federal income tax laws unless you have certain connections with the United States.
For a more complete description of the U.S. federal income tax consequences of the merger, see “Proposal 1: Adoption of the Merger Agreement — The Merger — U.S. Federal Income Tax Consequences of the Merger” beginning on page 63.
This proxy statement contains a general discussion of United States federal income tax consequences of the merger. This description does not address any non-U.S. tax consequences, nor does it pertain to state, local or other tax consequences. Consequently, you are urged to contact your own tax advisor to determine the particular tax consequences to you of the merger.
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Q:
What will the holders of outstanding DST equity awards receive in the merger?
A:
For information regarding the treatment of DST’s outstanding equity awards, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Merger Consideration — Treatment of Company Awards” beginning on page 69.
Q:
Am I entitled to appraisal rights under the DGCL?
A:
If the merger is adopted by DST’s stockholders, stockholders who do not vote (whether in person or by proxy) in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of DST common stock are entitled to have their shares appraised by the Court of Chancery of the State of Delaware and to receive payment in cash of the “fair value” of the shares of DST common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement.
Q:
Who can help answer my questions?
A:
If you have any questions concerning the merger, the special meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of DST common stock, please contact our proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Toll-free: (888) 750-5835
Banks & Brokers may call collect: (212) 750-5833
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FORWARD-LOOKING STATEMENTS
This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us or on our behalf, contain “forward-looking statements” that do not directly or exclusively relate to historical facts. You can typically identify forward-looking statements by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan,” “providing guidance” and similar expressions that are intended to identify information that is not historical in nature. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed merger and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements, including the failure to consummate the proposed merger or to make any filing or take other action required to consummate such merger in a timely matter or at all. The inclusion of such statements should not be regarded as a representation that any plans, estimates or expectations will be achieved.
These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filing on Form 10-K and subsequent periodic and interim reports, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

DST may be unable to obtain stockholder approval as required for the merger;

conditions to the closing of the merger, including obtaining required regulatory approvals, may not be satisfied or waived on a timely basis or otherwise;

a governmental entity or a regulatory body may prohibit, delay or refuse to grant approval for the consummation of the merger and may require conditions, limitations or restrictions in connection with such approvals that can adversely affect the anticipated benefits of the proposed merger or cause the parties to abandon the proposed merger;

the merger may involve unexpected costs, liabilities or delays;

the business of DST may suffer as a result of uncertainty surrounding the merger or the potential adverse changes to business relationships resulting from the proposed merger;

legal proceedings may be initiated related to the merger and the outcome of any legal proceedings related to the merger may be adverse to DST;

DST may be adversely affected by other general industry, economic, business, and/or competitive factors;

there may be unforeseen events, changes or other circumstances that could give rise to the termination of the merger agreement or affect the ability to recognize benefits of the merger;

the risk that the merger agreement may be terminated in certain circumstances that require us to pay SS&C a termination fee of  $165 million;

risks that the proposed merger may disrupt current plans and operations and present potential difficulties in employee retention as a result of the merger;

the risk that our stock price may decline significantly if the merger is not completed;

risks associated with the financing of the transaction;

the fact that DST’s stockholders would forgo the opportunity to realize the potential long-term value of the successful execution of DST’s current strategy as an independent company; and

there may be other risks to consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all.
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Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on DST’s financial condition, results of operations, credit rating or liquidity.
There can be no assurance that the merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the merger will be realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which such statements were made.
All of the forward-looking statements we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including, but not limited to, (a) the information contained under this heading and (b) the information in our consolidated financial statements and notes thereto included in our most recent filing on Form 10-K and subsequent periodic and interim report filings (see “Where You Can Find More Information” beginning on page 102).
Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. DST stockholders are advised, however, to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.
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THE SPECIAL MEETING
The enclosed proxy is solicited on behalf of the Board of Directors for use at the special meeting of stockholders or at any adjournments or postponements thereof.
Date, Time and Place
We will hold the special meeting on March 28, 2018, at 10:00 a.m. Central Time, at DST’s Broadway Conference Center, 1055 Broadway Street, Third Floor, Kansas City, MO 64105.
Purpose of the Special Meeting
At the special meeting, we will ask our stockholders of record as of the record date to vote on the following proposals:
Proposal 1 — Adoption of the Merger Agreement. To consider and vote on the merger proposal;
Proposal 2  —  Approval, on an Advisory (Non-Binding Basis), of Certain Compensatory Arrangements with Named Executive Officers. To consider and vote on the merger-related compensation proposal; and
Proposal 3  —  Adjournment of the Special Meeting. To consider and vote on the adjournment proposal.
Record Date; Shares Entitled to Vote; Quorum
Only stockholders of record as of the close of business on February 22, 2018 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 333 W. 11th, 5th Floor Kansas City, MO 64105, during regular business hours for a period of at least ten (10) days before the special meeting and at the place of the special meeting during the special meeting.
As of the record date, there were approximately 59,319,166 shares of DST common stock outstanding and entitled to be voted at the special meeting.
A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting, either present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, 29,659,584 shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum.
In the event that a quorum is not present at the special meeting, it is expected that the meeting would be adjourned or postponed to a later date to solicit additional proxies.
Vote Required; Abstentions and Broker Non-Votes
The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the merger proposal. Adoption of the merger agreement by our stockholders is a condition to the closing of the merger.
Approval of the merger-related compensation proposal requires the affirmative vote of a majority of the votes cast at the special meeting. Approval of the adjournment proposal, whether or not a quorum is present, requires the affirmative vote of a majority of the votes cast at the special meeting.
If you abstain from voting, the abstention will have the same effect as if you voted “AGAINST” the merger proposal, the merger-related compensation proposal and the adjournment proposal.
If you hold your shares in “street name,” the failure to instruct your broker, bank or other nominee on how to vote your shares will count as a vote “AGAINST” the merger proposal, but will have no effect on the merger-related compensation proposal and the adjournment proposal.
Broker non-votes are shares held by a broker, bank or other nominee that are present in person or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares on how to vote on a particular proposal and the
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broker does not have discretionary voting power on such proposal. Because brokers, banks and other nominee holders of record do not have discretionary voting authority with respect to any of the three proposals, if a beneficial owner of shares of DST common stock held in “street name” does not give voting instructions to the broker, bank or other nominee with respect to any of the proposals, then those shares will not be present in person or represented by proxy at the special meeting. However, if there are any broker non-votes, then such broker non-votes will count for the purpose of determining the presence of a quorum for the transaction of business at the special meeting. If there are any broker non-votes, then such broker non-votes will be counted as a vote “AGAINST” the merger proposal, but will have no effect on the merger-related compensation proposal and the adjournment proposal.
Shares Held by DST’s Directors and Executive Officers
As of the record date, DST directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 793,907 shares of DST common stock (excluding any shares of DST common stock that would be delivered upon exercise or conversion of stock options or other equity-based awards), which represented approximately 1.33% of the outstanding shares of DST common stock on that date. It is expected that DST’s directors and executive officers will vote their shares “FOR” the adoption of the merger agreement, although none of them has entered into any agreement requiring them to do so.
Voting of Proxies
If your shares are registered in your name with our transfer agent, Computershare Trust Company, N.A., you may cause your shares to be voted by returning a signed proxy card, or you may vote in person at the special meeting. Additionally, you may submit electronically over the Internet or by phone a proxy authorizing the voting of your shares by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.
If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting in person. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.
Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted (i) “FOR” the merger proposal, (ii) “FOR” the merger-related compensation proposal and (iii) “FOR” the adjournment proposal. No proxy that is specifically marked against the merger proposal will be voted in favor of the merger-related compensation, unless it is specifically marked “FOR” the approval of such proposal.
If your shares are held in “street name” through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or by the Internet or telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee. Under applicable stock exchange rules, brokers, banks or other nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or other nominee on how to vote your shares with respect to such matters. Proposals 1, 2 and 3 in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. If you do not return your broker’s, bank’s or other nominee’s voting form, do not vote via the Internet or telephone through your broker, bank or other nominee, if applicable, or do not attend the special meeting and vote in person with a proxy from your broker, bank or other nominee, such actions will have the same effect as if you voted “AGAINST” the merger proposal but will not have any effect on the adjournment proposal or the merger-related compensation proposal.
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Revocability of Proxies
If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

Submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;

Delivering a written notice of revocation to our Secretary;

Signing another proxy card with a later date and returning it to us prior to the special meeting; or

Attending the special meeting and voting in person.
Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by our Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m., Eastern time on March 27, 2018. If you have submitted a proxy, your appearance at the special meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.
If you hold your shares of DST common stock in “street name,” you should contact your broker, bank or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a valid proxy from your broker, bank or other nominee. Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow DST stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting, as adjourned.
Board of Directors’ Recommendation
The Board of Directors, after considering various factors described under the section entitled “Proposal 1: Adoption of the Merger Agreement—The Merger—Recommendation of Our Board of Directors and Reasons for the Merger” beginning on page 39, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of DST and its stockholders, and adopted, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement.
The Board of Directors unanimously recommends that you vote (i) “FOR” the merger proposal, (ii) “FOR” the merger-related compensation proposal and (iii) “FOR” the adjournment proposal.
Tabulation of Votes
All votes will be tabulated by a representative of Broadridge Financial Solutions, Inc., who will act as the inspector of election appointed for the special meeting and will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
Solicitation of Proxies
The expense of soliciting proxies in the enclosed form will be borne by DST. We have retained Innisfree M&A Incorporated, a proxy solicitation firm, to solicit proxies in connection with the special meeting at a cost of approximately $25,000 plus expenses. In addition, we may reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by some of our directors, officers and employees, personally or by telephone, facsimile or other means of communication. No additional compensation will be paid for such services.
Anticipated Date of Completion of the Merger
Assuming timely satisfaction of necessary closing conditions, including the approval by our stockholders of the proposal to adopt the merger agreement, we anticipate that the merger will be consummated before the end of the second quarter of calendar year 2018.
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Attending the Special Meeting
Only DST stockholders of record on the record date, or their duly appointed proxies, and “street name” holders (whose shares are held through a broker, bank or other nominee) who provide evidence of their beneficial ownership on the record date for the special meeting, such as a copy of your most recent account statement or similar evidence of ownership of DST common stock as of the record date for the special meeting, may attend the special meeting in person.
All DST stockholders should also bring photo identification, such as a driver’s license or passport. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the special meeting.
Even if you plan to attend the special meeting in person, we encourage you to complete, sign, date and return the enclosed proxy card or vote electronically over the Internet or via telephone to ensure that your shares will be represented at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you hold your shares in “street name,” because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker, bank or other nominee.
Assistance
If you need assistance in completing your proxy card or have questions regarding DST’s special meeting, please contact Innisfree M&A Incorporated by mail at 501 Madison Avenue, 20th Floor New York, New York 10022 or by telephone. Stockholders may call toll-free at (888) 750-5834 and banks and brokers may call collect: (212) 750-5833.
Rights of Stockholders Who Seek Appraisal
If the merger is adopted by DST stockholders, stockholders who do not vote in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of DST common stock are entitled to have their shares appraised by the Court of Chancery of the State of Delaware and to receive payment in cash of the “fair value” of the shares of DST common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process.
Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares.
To exercise your appraisal rights, you must submit a written demand for appraisal to DST before the vote is taken on the adoption of the merger agreement, you must not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold the shares of DST common stock of record through the effective time of the merger. Your failure to follow the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement. If you hold your shares of DST common stock through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such broker, bank or other nominee.
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PARTIES INVOLVED IN THE MERGER
DST Systems, Inc.
DST Systems, Inc. is a leading provider of specialized technology, strategic advisory, and business operations outsourcing to the financial and healthcare industries. Combining unmatched industry knowledge, critical infrastructure and service excellence, DST helps companies master complexity in the world’s most demanding industries to ensure they continually stay ahead of and capitalize on ever-changing customer, business and regulatory requirements.
DST’s principal executive offices are located at 333 W. 11th, 5th Floor Kansas City, MO 64105.
DST was formed in 1969. Through a reorganization in August 1995, DST is a corporation organized in the State of Delaware. DST’s common stock is currently listed on the NYSE under the symbol “DST.”
Additional information about DST and its subsidiaries is included in documents incorporated by reference in this proxy statement (see “Where You Can Find More Information” beginning on page 102) and on its website: www.dstsystems.com. The information provided or accessible through DST’s website is not part of, or incorporated by reference, in this proxy statement.
SS&C Technologies Holdings, Inc.
SS&C is a leading provider of mission-critical, sophisticated software products and software-enabled services that allow financial services providers to automate complex business processes and effectively manage their information processing requirements. SS&C’s portfolio of software products and rapidly deployable software-enabled services allows SS&C’s clients to automate and integrate front-office functions such as trading and modeling, middle-office functions such as portfolio management and reporting, and back-office functions such as accounting, performance measurement, reconciliation, reporting, processing and clearing. SS&C’s solutions enable their clients to focus on core operations, better monitor and manage investment performance and risk, improve operating efficiency and reduce operating costs.
SS&C’s principal executive offices are located at 80 Lamberton Road, Windsor, CT 06095.
SS&C was incorporated in Delaware in July 2005, as the successor to a corporation originally formed in Connecticut in March 1986. SS&C’s common stock trades on the NASDAQ under the symbol “SSNC.”
Additional information about SS&C and its subsidiaries is included on its website: http://www.ssctech.com. The information provided or accessible through SS&C’s website is not part of, of incorporated by reference, in this proxy statement.
Diamond Merger Sub, Inc.
Merger Sub is a Delaware corporation and an indirect wholly owned subsidiary of SS&C, formed on January 5, 2018 for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will cease to exist.
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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT
THE MERGER
This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire merger agreement carefully as it is the legal document that governs the merger.
Certain Effects of the Merger on DST
Upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into DST, with DST continuing as the surviving corporation and a wholly owned indirect subsidiary of SS&C. DST expects to de-list its common stock from the NYSE and de-register its common stock under the Exchange Act as promptly as practicable following the effective time of the merger. Thereafter, DST would no longer be a publicly traded company. If the merger is completed, you will not own any shares of the capital stock of the surviving corporation, and instead will only be entitled to receive the merger consideration, as described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Merger Consideration” beginning on page 69.
The effective time of the merger will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as DST and SS&C may agree and specify in the certificate of merger).
Effect on DST if the Merger is Not Completed
If the merger agreement is not adopted by DST stockholders or if the merger is not completed for any other reason, DST stockholders will not receive any payment for their shares of DST common stock. Instead, DST will remain a public company, DST’s common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and DST will continue to file periodic reports with the SEC.
Furthermore, if the merger is not consummated, and depending on the circumstances that would have caused the merger not to be consummated, it is likely that the price of DST’s common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of DST’s common stock would return to the price at which it trades as of the date of this proxy statement.
Accordingly, if the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of DST common stock. If the merger is not consummated, the Board of Directors will continue to evaluate and review DST’s business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to enhance stockholder value. If the merger agreement is not adopted by DST’s stockholders or if the merger is not consummated for any other reason, there can be no assurance that any other transaction acceptable to DST will be offered or that DST’s business, prospects or results of operation will not be adversely impacted.
In addition, under certain specified circumstances, DST will be required to pay SS&C a termination fee upon the termination of the merger agreement, as described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination of the Merger Agreement — Termination Fees” beginning on page 88.
Background of the Merger
As part of DST’s ongoing strategic planning process, the Board of Directors regularly reviews and assesses DST’s long-term strategic goals and opportunities, industry trends, competitive environment, and short- and long-term performance in light of DST’s strategic plan, with the goal of maximizing stockholder value. In connection with these activities, the Board of Directors met from time to time in the ordinary course of business to consider and evaluate potential strategic alternatives, including business combinations, acquisitions, dispositions, spinoffs and other transactions. The Board of Directors also discussed DST’s
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stock price and stockholder returns, both on an absolute basis and relative to DST’s peers, and potential risks that DST faced in executing its strategic plan as a stand-alone entity, including challenging global economic conditions and other factors, including its ability to achieve long-term growth.
The Board of Directors also continued to evaluate alternatives and implemented actions to enhance stockholder value, including the issuance of dividends, share repurchases, the sale of DST’s customer communications business to Broadridge Financial Solutions, Inc. and the acquisitions of Red Rocks Capital, LLC, Kaufman Rossin Fund Services, LLC and Wealth Management Systems, Inc. In connection with DST’s ongoing assessment of strategic alternatives, DST management periodically met with representatives of BofA Merrill Lynch to discuss developments in the healthcare and financial services industries and BofA Merrill Lynch’s views as to opportunities available to DST.
On November 14, 2016, Mr. William C. Stone, Chief Executive Officer of SS&C, contacted Mr. Stephen C. Hooley, Chief Executive Officer of DST, to express interest in conducting high-level due diligence with the goal of executing a letter of intent with respect to a strategic acquisition. Mr. Stone and Mr. Hooley did not discuss the terms of such a transaction.
On December 13, 2016, the Board of Directors at a regularly scheduled meeting discussed in an executive session SS&C’s interest in a potential strategic transaction. Mr. Hooley gave an overview of SS&C’s inquiry and reviewed potential next steps to be considered by DST. After discussion regarding a potential strategic transaction with SS&C, the Board of Directors decided to continue executing DST’s long-range plan, particularly given that DST had recently completed the sale of its customer communications business to Broadridge Financial Solutions, Inc. in July 2016, was in the process of negotiating the acquisition of State Street Corporation’s ownership in both Boston Financial Data Services, Inc. and International Financial Data Services Limited and was pursuing the divestiture of its United Kingdom Customer Communications business.
On February 23, 2017, the Board of Directors held a regularly scheduled meeting. Members of senior management and representatives of BofA Merrill Lynch were present during a portion of the meeting to discuss, among other things, strategic alternatives. As part of DST’s ongoing strategic planning process, representatives of BofA Merrill Lynch reviewed the mergers and acquisition environment generally and in the healthcare and financial services industries in particular, provided financial perspective regarding DST and its stock performance, provided perspectives regarding potential strategic alternatives available to DST, including a spin-off of DST’s healthcare business and a potential sale of the company, and reviewed third parties that might have interest in exploring a potential transaction with DST. The Board of Directors discussed whether to explore strategic alternatives, including the timing of any potential process for a strategic alternative and considered DST’s strategy as an independent company, including the acquisition of State Street Corporation’s ownership of both Boston Financial Data Services, Inc. and International Financial Data Services Limited, and its growth initiatives, as well as the possible disruption and risks to DST’s business that could result from the public disclosure of any exploratory process, including the resulting distraction of the attention of DST’s management and employees. Over the following months, the Board of Directors and senior management continued to evaluate DST’s long-range plan and the potential strategic alternatives available to DST.
On August 1, 2017, the Board of Directors at a regularly scheduled meeting discussed in a private session DST’s announcement of financial results for the quarter ended June 30, 2017 and the market’s reaction to the announcement. The price of DST common stock opened trading at $59.00 per share on July 27, 2017, the day on which financial results were announced, and closed trading at $54.54 per share on July 27, 2017. Mr. Hooley discussed with the Board of Directors the challenges and competition that DST was experiencing, including its ability to achieve long-term growth. The Board of Directors also considered the risks associated with consolidation in the healthcare industry. In connection therewith, the Board of Directors reviewed DST’s performance as compared to the performance of SS&C. Thereafter, in light of the substantial challenges identified to achieving long-term growth, the Board of Directors discussed potential strategic alternatives, including a potential sale of DST. The Board of Directors concluded that strategic alternatives should be considered further in subsequent meetings and directed management to review DST’s long-range plan and coordinate with DST’s advisors to prepare related analyses and potential alternatives for discussion at the next regularly scheduled meeting of the Board of Directors.
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On October 26, 2017, the Board of Directors held a regularly scheduled meeting. Members of senior management and representatives of BofA Merrill Lynch and Skadden, Arps, Slate, Meagher & Flom LLP, DST’s legal counsel, which we refer to as Skadden, were present during a portion of the meeting to discuss, among other things, strategic alternatives. Representatives of Skadden discussed with the Board of Directors their fiduciary duties in considering strategic alternatives. Representatives of BofA Merrill Lynch reviewed the mergers and acquisition environment generally, discussed public market perspectives of DST, provided observations on DST’s updated long-range plan and certain preliminary financial analyses based on certain valuation metrics and DST’s long-range plan, provided perspectives regarding a potential sale of the company, reviewed third parties that might have interest in exploring a potential transaction with DST, including SS&C, and provided an overview of process considerations if the Board of Directors were to determine to pursue a sale of DST.
On October 27, 2017, the Board of Directors reconvened its regularly scheduled meeting. During the course of that meeting, the Board of Directors discussed SS&C’s potential interest, and authorized senior management to engage in preliminary discussions with SS&C to ascertain if SS&C was interested in making a proposal for a transaction with DST. The Board of Directors considered various alternative processes for pursuing a change in control of DST, including whether to contact additional parties, and determined not to do so at that time in light of confidentiality and other considerations, including uncertainty regarding whether SS&C or any other party would be interested in an acquisition of DST that the Board of Directors would find sufficiently attractive and the fact that SS&C was the only party that had previously stated interest in an acquisition of DST. The Board of Directors determined that it would consider the matter further after receiving additional feedback from SS&C.
On October 31, 2017, Mr. Hooley met with Mr. Stone for lunch. During the meeting, Mr. Hooley inquired whether SS&C had an interest in discussing potential opportunities between SS&C and DST and indicated, if SS&C was interested, given the timeline of certain other strategic alternatives that DST was considering, SS&C must make a timely proposal. Mr. Stone expressed an interest in a potential strategic acquisition of DST, including the potential for an all cash offer. In addition, Mr. Hooley and Mr. Stone discussed a potential process of engagement involving entry into a non-disclosure agreement and the subsequent provision of limited confidential information by DST to SS&C in order to allow SS&C to make a preliminary proposal.
On November 1, 2017, BofA Merrill Lynch, on behalf of DST, contacted Mr. Stone and discussed the timing for a potential preliminary proposal, with the request that SS&C submit a preliminary proposal by November 15, 2017, which was in advance of DST’s next regularly scheduled board meeting and coincided with the overall transaction timing of a strategic acquisition process in which DST was engaged to acquire Party A, a provider of risk management and technology solutions, including ongoing due diligence efforts with respect to Party A and the timing of DST’s final bid and receipt of feedback from Party A.
On November 3, 2017, the Board of Directors held a telephonic special meeting with certain members of senior management, BofA Merrill Lynch and Skadden in attendance. During that meeting, Mr. Hooley updated the Board of Directors on the status of preliminary discussions with SS&C and the strategic acquisition process to acquire Party A. The Board of Directors discussed SS&C’s potential interest and authorized DST’s management to engage in further discussions with SS&C and to continue engaging with Party A.
During the period from November 3, 2017 until the signing of a definitive agreement with SS&C, in addition to meetings of the Board of Directors, certain members of DST’s senior management, including Gregg Wm. Givens, DST’s Chief Financial Officer, and Randall D. Young, DST’s General Counsel and Secretary, conferred internally and Mr. Hooley answered inquiries and provided frequent informal updates to members of the Board of Directors with respect to the progress of discussions with SS&C. In addition, senior management took direction from, and acted in consultation with, the lead independent director and, with respect to compensation matters also consulted with the Chairman of the Compensation Committee.
On November 6, 2017, representatives of BofA Merrill Lynch, at the request of DST, sent SS&C a draft non-disclosure agreement that included a standstill and employee non-solicitation provisions.
On November 9, 2017, DST and SS&C executed the non-disclosure agreement.
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On November 10, 2017, following execution of the non-disclosure agreement, representatives of BofA Merrill Lynch, on behalf of DST, provided certain non-public information about DST to SS&C in response to selected questions posed by SS&C.
On November 15, 2017, Mr. Stone contacted Mr. Hooley to express SS&C’s continued interest in pursuing a potential strategic acquisition of DST and indicated a preliminary per share range in the high $70’s to mid-$80’s. Mr. Stone indicated that SS&C expected to be able to make an offer at the high end of the range if diligence went well. The closing stock price of DST common stock on November 15, 2017 was $58.96.
Later on November 15, 2017, Mr. Hooley contacted Mr. Stone to confirm that SS&C’s preliminary per share range was based on an all cash deal. Mr. Stone confirmed that was the case, but indicated SS&C may issue equity to finance the transaction.
On November 17, 2017, the Board of Directors met to discuss updates since the November 3rd meeting. At the Board of Directors meeting on November 17, 2017, members of senior management and representatives of BofA Merrill Lynch and Skadden were present. Representatives of Skadden discussed with the directors their fiduciary duties in considering strategic alternatives. Representatives of BofA Merrill Lynch provided a preliminary review of the financial aspects of SS&C’s proposal, SS&C’s recent transaction history, preliminary financial analyses with respect to DST and reviewed third parties that might have interest in exploring a potential transaction with DST, including both strategic and financial sponsors. The Board of Directors discussed alternative approaches to the transaction process, including whether to conduct a broad auction process or a targeted pre-market check. BofA Merrill Lynch advised the Board of Directors of the risks inherent in a broad auction process, including the risk of market rumors and speculation, noted to the Board that, in its view, financial sponsors were unlikely to be willing to offer a price at the high end of the preliminary per share range proposed by SS&C, and recommended that the Board undertake a targeted pre-market check with selected strategic parties. Thereafter, representatives of Skadden advised the Board of Directors on customary deal terms, including with respect to DST’s right to engage with third parties after entering into the merger agreement. The Board of Directors discussed SS&C’s proposed value range and authorized DST’s management to engage in further discussions with SS&C, including with respect to obtaining a specific proposal with respect to price per share. The Board of Directors, after considering the advice of DST’s advisors and the fact that DST would be permitted, under circumstances to be described in a definitive merger agreement, to provide information to and engage in discussions or negotiation with a third party who makes an unsolicited proposal, also authorized BofA Merrill Lynch to contact three potential strategic acquirors, Party B, a financial services company, Party C, a financial services company, and Party D, a diversified health company, to ascertain their interest in a possible strategic acquisition of DST on a confidential basis. Thereafter, the Board of Directors discussed the significance of the proposed sale of DST to SS&C or another potential acquiror and its potential interplay with the potential strategic acquisition of Party A, which the Board of Directors was continuing to consider, including whether SS&C or another potential acquiror would find DST less attractive if DST completed the acquisition of Party A. The Board of Directors also considered management’s recent concerns regarding due diligence and the valuation of Party A and considered the substantial time and effort of management required to consummate both a potential acquisition of Party A and the sale of DST, which could divert employees’ attention away from DST’s day-to-day operations. The Board of Directors concluded, after discussions with representatives of BofA Merrill Lynch and management, to terminate discussions with Party A.
On November 17, 2017, BofA Merrill Lynch, on behalf of DST, contacted Mr. Stone to discuss the potential strategic acquisition. BofA Merrill Lynch shared DST’s belief that SS&C would need to provide a compelling price in order for the Board of Directors to consider the transaction and offered access to senior management to allow SS&C to submit a specific price per share offer prior to a Board of Directors meeting scheduled for December 12, 2017. Mr. Stone reiterated SS&C’s interest in pursuing a potential strategic acquisition of DST as promptly as possible.
On November 20, 2017, Mr. Hooley and Mr. Stone discussed the potential strategic acquisition. Mr. Hooley reiterated that SS&C would need to provide a compelling price in order for the Board of Directors to consider the transaction. Mr. Stone reiterated SS&C’s interest in pursuing a potential strategic acquisition of DST as promptly as possible.
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During the week of November 20, 2017, at the request of the Board of Directors, representatives of BofA Merrill Lynch contacted Party B, Party C and Party D. Party B indicated that it would initially review the opportunity based on public information and requested a non-disclosure agreement. That same day, a non-disclosure agreement, which contained a standstill, was provided to Party B. Party C indicated that it would review the opportunity based on public information. Party D indicated that it would speak to its internal teams.
On November 28, 2017, Party D requested a non-disclosure agreement and that same day, a draft non-disclosure agreement, which contained a standstill, was provided to Party D.
On November 29, 2017, Party B indicated to BofA Merrill Lynch that it did not intend to pursue a potential strategic transaction with DST.
On December 1, 2017, certain members of DST’s senior management made a management presentation to key members of SS&C management in New York, during which DST provided an overview of its business to SS&C, including certain non-public unaudited prospective financial information (see “Proposal 1: Adoption of the Merger Agreement — The Merger Financial Forecast” for additional detail) and an overview of each operating segment and commercial relationships. Representatives of BofA Merrill Lynch and Credit Suisse Securities (USA) LLC, SS&C’s financial advisor, which we refer to as Credit Suisse, also attended the management presentation. Additionally, on December 1, 2017, Party C communicated to BofA Merrill Lynch that it did not intend to pursue a potential strategic transaction with DST.
On December 4, 2017, representatives of DST, SS&C, BofA Merrill Lynch and Credit Suisse had a telephone call to discuss certain financial questions.
On December 5, 2017, representatives of Credit Suisse submitted a high priority list of questions focused on organic revenue growth, cost structure and the value of non-core assets. Later that day, Party D delivered a revised draft of the non-disclosure agreement, in which Party D deleted the standstill provision and other provisions relating to the use of DST’s confidential information.
Between December 6, 2017 and December 8, 2017, BofA Merrill Lynch, on behalf of DST, contacted Party D on several occasions to discuss the non-disclosure agreement.
Between December 7, 2017 and December 8, 2017, DST provided responses to the majority of SS&C’s high priority questions.
On December 8, 2017, Mr. Stone and Mr. Hooley discussed the information DST had provided in response to SS&C’s requests. Mr. Stone indicated that SS&C intended to provide an offer on December 11 or December 12, 2017.
On December 11, 2017, Mr. Hooley and Mr. Stone met in Kansas City to discuss the potential transaction. During the meeting, Mr. Stone submitted an offer to acquire DST at $81.00 per share, which represented a premium of approximately 32% over the closing stock price on December 11, 2017, and indicated that Credit Suisse was prepared to finance the transaction. Mr. Hooley indicated to Mr. Stone his belief that the Board of Directors would not be willing to consider an offer of  $81.00 per share, but that he would inform the Board of Directors of SS&C’s offer. The closing stock price of DST common stock on December 11, 2017 was $61.23.
Additionally, on December 11, 2017, four business days after BofA Merrill Lynch initially contacted Party D to discuss the non-disclosure agreement, Party D made itself available to discuss the non-disclosure agreement. During that phone call, BofA Merrill Lynch, at DST’s request, discussed the revised draft of the non-disclosure agreement with Party D. It was DST’s belief, after consultation with its advisors, that providing a third party with confidential information without a standstill agreement in place was inappropriate in light of the fact that the standstill provision, as proposed in the draft non-disclosure agreement provided by DST to Party D, would automatically terminate upon DST announcing that it had entered into an agreement in respect of a change of control of DST or upon any third party commencing a tender offer for control of DST and other terms proposed by Party D, which did not adequately protect
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DST’s confidential information. BofA Merrill Lynch conveyed to Party D DST’s concerns regarding the deletion of the standstill provision in the draft delivered by Party D and during the call, Party D requested that DST provide a revised draft of the non-disclosure agreement reflecting DST’s position.
On December 12, 2017, the Board of Directors held a regularly scheduled meeting with certain members of DST’s senior management, with BofA Merrill Lynch and Skadden in attendance, to discuss SS&C’s proposal. During the Board of Directors meeting, Mr. Hooley informed the Board of Directors that on December 11, 2017, SS&C made an offer to acquire DST for $81.00 per share of DST common stock, which represented a premium of approximately 33% over the closing stock price on December 12, 2017. Representatives of BofA Merrill Lynch provided preliminary financial analyses, including an illustrative discounted cash flow analysis of DST to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that DST was forecasted to generate during DST’s fiscal years 2018 through 2020 based on the DST management forecasts, reflecting the intrinsic values at both the current effective tax rate and the illustrative effective tax rate assuming certain then-proposed elements of the Tax Cuts and Jobs Act. The Board of Directors discussed the preliminary financial analysis, including the impact of certain then-proposed elements of the Tax Cuts and Jobs Act. Representatives of BofA Merrill Lynch also reviewed potential responses to SS&C and discussed with the directors the status of discussions with Party B, Party C and Party D. Thereafter, the Board of Directors discussed the results of the targeted pre-market check and again considered whether to contact additional potential interested parties or conduct a broad auction process. BofA Merrill Lynch advised the Board of Directors that based on their professional judgment and knowledge of the financial services and healthcare industries, regulatory landscape and financing capabilities of potential acquirors that there was unlikely to be credible potential interest from third parties (other than the parties that had been contacted) at a price higher than the range indicated by SS&C. The Board of Directors also considered that the timing of the merger would provide ample opportunity for a third party to submit proposals and the fact that DST would be permitted, under circumstances to be described in a definitive merger agreement, to provide information to and engage in discussions or negotiation with such a third party. Following the presentations made during the December 12, 2017 meeting, the Board of Directors concluded that the price of  $81.00 per share then proposed by SS&C was inadequate and that SS&C should be informed of this conclusion, but that DST was willing to continue discussions with SS&C in order to determine whether a transaction with SS&C was available on terms that maximized stockholder value for DST stockholders. The Board of Directors then authorized senior management to continue discussion with SS&C. The closing stock price of DST common stock on December 12, 2017 was $60.87.
Additionally, on December 12, 2017, Skadden and BofA Merrill Lynch, at the request of DST, provided Party D with a revised draft of the non-disclosure agreement.
On December 13, 2017, Mr. Hooley contacted Mr. Stone to discuss SS&C’s offer of  $81.00 per share. Mr. Hooley indicated to Mr. Stone that the Board of Directors was not willing to accept an offer of  $81.00 per share, but would be willing to consider an offer at the high end of the range SS&C provided on November 15, 2017. During the course of the discussions, Mr. Stone increased SS&C’s offer to $84.00 per share of DST common stock, which represented a premium of approximately 39% over the closing stock price on December 13, 2017. The closing stock price of DST common stock on December 13, 2017 was $60.53.
On December 14, 2017, the Board of Directors held a telephonic special meeting with certain members of DST’s senior management, BofA Merrill Lynch and Skadden in attendance. During the meeting, Mr. Hooley informed the Board of Directors that on December 13, 2017, SS&C increased its offer to $84.00 per share of DST common stock, which represented a premium of approximately 40% over the closing stock price on December 14, 2017. Following the discussion, the Board of Directors authorized management to progress discussions with SS&C at a price of  $84.00 per share, including working towards a public announcement of a transaction in mid- to late- January. The closing stock price of DST common stock on December 14, 2017 was $59.79.
Additionally, on December 14, 2017, Party D provided a revised draft of the non-disclosure agreement, which again deleted the standstill provision and included other provisions previously objected to by DST.
Finally, on December 14, 2017, Mr. Hooley contacted Mr. Stone to indicate DST’s willingness to proceed on the basis of SS&C’s offer of  $84.00 per share, with a target announcement date of late January.
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Mr. Stone indicated that he would like to announce the transaction earlier in January. Mr. Hooley and Mr. Stone discussed the level of diligence required to be completed prior to the announcement and Mr. Hooley indicated that representatives of BofA Merrill Lynch would contact Credit Suisse to discuss next steps.
On December 15, 2017, Mr. Hooley had a regularly scheduled telephone meeting with the Chief Executive Officer of Party D where a potential transaction was not raised.
On December 15, 2017, representatives of Skadden, on behalf of DST, spoke with Party D regarding the non-disclosure agreement. Party D indicated to representatives of Skadden that it has a policy not to enter into any standstill agreements.
In mid-December, Mr. Hooley contacted a senior executive of Party D regarding the difficulties surrounding the non-disclosure agreement.
On December 16, 2017, Davis Polk & Wardwell LLP, which we refer to as Davis Polk, SS&C’s legal counsel, acting on behalf of SS&C, delivered to Skadden a written legal due diligence request list.
On December 17, 2017, Credit Suisse, on behalf of SS&C, delivered to BofA Merrill Lynch a written business due diligence request list including any update to the non-public unaudited prospective financial information to reflect updates for the fourth quarter.
On December 21, 2017, DST provided SS&C and its representatives with access to an electronic data room established by DST. Beginning on such date and continuing through execution of the merger agreement on January 11, 2018, DST continued to upload diligence materials to the electronic data room for review by SS&C and its representatives and SS&C, its representatives and its financing sources engaged in business, financial and legal diligence of DST.
Additionally, on December 21, 2017, BofA Merrill Lynch, at the direction of DST, informed Party D that DST would not sign a non-disclosure agreement without a standstill agreement. It was DST’s belief, after consultation with its advisors and based on both the pace at which discussions regarding the non-disclosure agreement had progressed with Party D and Party D’s statements during the course of such discussions, that Party D was unlikely to be interested in acquiring all of DST, and therefore, there was limited benefit to executing a non-disclosure agreement on Party D’s terms, particularly given that if Party D was interested it could submit an offer following the announcement of a transaction and that the Board of Directors would be permitted, under circumstances to be described in a definitive merger agreement, to provide information to and engage in discussions or negotiation with Party D at that time. Party D confirmed that it would need to initiate the next contact should it have any interest in entering into a non-disclosure agreement with DST for the purposes of exploring a potential strategic transaction.
On December 22, 2017, the Board of Directors held a telephonic special meeting with certain members of DST’s senior management, BofA Merrill Lynch, Skadden and Deloitte Consulting LLP, DST’s executive compensation consultant, in attendance. During the meeting, representatives of Skadden discussed with the directors their fiduciary duties in considering strategic alternatives. Skadden then provided the Board of Directors with an update regarding certain regulatory matters, including with respect to the approval by the FCA. Thereafter, representatives of Skadden and Deloitte Consulting LLP discussed certain compensation matters, including treatment of equity awards in connection with the proposed transaction and certain other benefit matters, including the desired approach with respect to retention and severance.
During the period from December 27, 2017 through January 11, 2018, DST and SS&C’s management and advisors worked to finalize the definitive transaction documents and SS&C’s due diligence review of DST.
On December 27, 2017, Skadden, on behalf of DST, provided Davis Polk with a draft merger agreement.
On January 1, 2018, Davis Polk, on behalf of SS&C, provided Skadden with a revised draft of the merger agreement.
During the last week of December and the first week of January, certain members of DST’s senior management and its representatives had a series of diligence calls with SS&C and its representatives relating to various aspects of DST’s business including accounting matters, tax matters, litigation matters, healthcare regulatory matters, data privacy and cybersecurity matters.
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On January 2, 2018, representatives of DST and Skadden had a conference call to discuss certain key issues in SS&C’s revised draft of the merger agreement. Key issues discussed included, among others, financing certainty, including the length of the marketing period and the obligations of DST to cooperate with SS&C to obtain the financing, compensation matters, including the treatment of unvested equity awards, the requested termination fee (3.5% of enterprise value or approximately 3.9% of equity value) and efforts required to be taken by the parties to obtain applicable regulatory approvals. Later that day, representatives of Skadden and Davis Polk discussed the key issues identified in the preceding sentence. Additionally on January 2, 2018, Mr. Hooley and Mr. Stone met for dinner to discuss the status of the transaction, including the status of the merger agreement, key customer updates, the treatment of equity awards and post-continuation benefits of employees and the overall transaction timeline.
On January 3, 2018, Mr. Hooley was to have a regularly scheduled meeting with a senior executive of Party D with whom Mr. Hooley had previously discussed the process with respect to a potential transaction. The meeting was canceled by Party D.
On January 4, 2018, DST senior management and business unit leaders met with representatives of SS&C in Naples, Florida for additional presentations and business due diligence.
On January 5, 2018, the Board of Directors held a special meeting with certain members of DST’s senior management, BofA Merrill Lynch and Skadden in attendance. During the meeting, Mr. Hooley provided an update regarding the status of discussions with SS&C. Thereafter, Skadden again discussed with the Board of Directors the fiduciary duties of directors in connection with evaluating DST’s strategic alternatives. Representatives of BofA Merrill Lynch then discussed with the directors matters relating to, among other things, a preliminary review of the financial aspects of SS&C’s proposal, including the price per share offered by SS&C compared to certain precedent transactions based upon certain valuation metrics and preliminary financial analyses with respect to DST based on the DST management forecasts. The Board of Directors considered the financial advice and perspectives reviewed and discussed by representatives of BofA Merrill Lynch, including the valuation metrics utilized by BofA Merrill Lynch. Skadden then discussed the terms of the merger agreement, including key terms regarding financing and the allocation of risk between the parties if SS&C was unable to obtain such financing, regulatory matters, the scope of DST’s right to engage with third parties after entering into the merger agreement, and compensation matters, including the treatment of equity awards and post-continuation benefits for employees. Thereafter, the Board of Directors met in an executive session to discuss the transaction generally, including key compensation matters.
Additionally, on January 5, 2018, Skadden, on behalf of DST, provided Davis Polk with a revised draft of the merger agreement.
On January 6, 2018, Davis Polk, on behalf of SS&C, provided Skadden with a revised draft of the merger agreement.
On January 7, 2018, representatives of Skadden and Davis Polk discussed and negotiated the terms of the merger agreement.
Additionally, on January 7, 2018, Davis Polk, on behalf of SS&C, provided Skadden with a draft of the debt commitment letter from certain lenders, and negotiations on such debt commitment letter continued between SS&C, its lenders and their respective advisors from January 7, 2018 to January 11, 2018. During this time, SS&C conveyed certain comments of DST and its advisors on the debt commitment letter.
Later that same day, the Board of Directors held a telephonic special meeting with certain members of DST’s senior management, BofA Merrill Lynch and Skadden in attendance. During the meeting, Mr. Hooley provided an update regarding the status of discussions with SS&C and provided an overview of the communications plans in the event the parties were to announce a transaction. Skadden then provided an update on the status of the merger agreement based on negotiations with Davis Polk earlier in the day. Following that discussion, representatives of both Skadden and BofA Merrill Lynch discussed with the Board of Directors the appropriate range of termination fees for a deal of this nature, including the potential preclusive effect of a high termination fee and the market practice with respect to such fees. Following this discussion, the Board of Directors authorized the representatives of Skadden to propose a
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termination fee of  $150 million (equivalent to approximately 3.0% of equity value) and further authorized senior management to agree to a fee of up to 3.2% of equity value. Thereafter, representatives of BofA Merrill Lynch reviewed SS&C’s financing plans, including the proposed terms of SS&C’s debt commitment letter.
On January 8, 2018, Skadden, on behalf of DST, provided Davis Polk with a revised draft of the merger agreement. The revised draft included a termination fee of  $150 million.
On January 9, 2018, Mr. Hooley and Mr. Stone discussed key open issues in the merger agreement, including the amount of the termination fee and compensation issues, including the treatment of equity awards and other benefits (e.g., retention and severance). Following negotiation, Mr. Hooley and Mr. Stone agreed to a termination fee equal to 3.2% of equity value and reached agreement on treatment of equity awards.
Additionally, on January 9, 2018, the Board of Directors met telephonically to discuss the results of the meeting between Mr. Hooley and Mr. Stone.
Finally, on January 9, 2018, Davis Polk, on behalf of SS&C, provided Skadden with a revised draft of the merger agreement.
On January 10, 2018, representatives of Skadden and Davis Polk discussed the merger agreement. Later that afternoon, an unauthorized media report speculated that DST and SS&C were in advanced negotiations with respect to a sale of DST at a price of approximately $84.00 per share. Shares of DST common stock rose to $80.68 per share after the media report on January 10, 2018, having opened trading that day at $65.15 per share. The NYSE briefly halted trading of DST’s common stock. The closing stock price of DST common stock on January 10, 2018 was $79.89.
Additionally, late in the day on January 10, 2018, after representatives of Skadden advised representatives of Davis Polk that SS&C was permitted to contact Mr. Hooley and provide a draft of the transitional employment letter, representatives of SS&C provided Mr. Hooley with a transitional employment letter providing for a transition period of ongoing employment at SS&C following the anticipated closing of the merger and Mr. Hooley’s legal counsel contacted Davis Polk to discuss the terms of the transitional employment letter.
Late in the day on January 10, 2018 and into January 11, 2018, representatives of the parties further negotiated, and reached resolution on, the remaining open points of the merger agreement, which included issues with respect to treatment of equity awards and post-closing benefits for DST employees, the parties’ required efforts to obtain applicable regulatory approvals and obligations under the interim operating covenants.
During the evening of January 10, 2018, the Board of Directors met telephonically to consider SS&C’s offer and the terms of the merger agreement. Members of senior management and representatives of BofA Merrill Lynch and Skadden also were in attendance. Mr. Hooley provided the Board of Directors with an update regarding the status of discussions with SS&C, including that SS&C had presented him with a post-closing transitional employment opportunity. Thereafter, representatives of Skadden discussed with the Board of Directors the fiduciary duties of directors in connection with evaluating DST’s strategic alternatives and the terms of the merger agreement, including, among other things, the parties’ respective termination rights (including DST’s right to terminate the merger agreement if the Board of Directors, in the exercise of its fiduciary duties, changes its recommendation under the proposed merger agreement to enter into an agreement with respect to a superior proposal), the termination fee, the obligations of the parties to obtain applicable regulatory approvals, the definition of a “material adverse effect” and the applicable closing conditions. Additionally, the Board of Directors considered and discussed its reasons for approving the merger and the adoption of the merger agreement, which are set forth in detail in “Proposal 1: Adoption of the Merger Agreement — The Merger — Recommendation of Our Board of Directors and Reasons for the Merger” beginning on page 39. Also at this meeting, BofA Merrill Lynch reviewed with the Board of Directors its financial analysis of the merger consideration and delivered to the Board of Directors an oral opinion, which was confirmed by delivery of a written opinion, dated January 10, 2018, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received in the merger by holders of DST common stock was
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fair, from a financial point of view, to such holders. During the meeting, the independent, non-executive members of the Board of Directors met separately with representatives from Skadden to discuss the proposed transaction and Mr. Hooley’s post-closing employment. After discussing the proposed transaction, the Board of Directors authorized Mr. Hooley to finalize certain open deal points relating to the treatment of employee equity awards and other compensation matters with Mr. Stone. It also authorized Mr. Hooley to indicate to Mr. Stone that it was the Board of Directors’ view that the terms of Mr. Hooley’s post-closing employment should be discussed following announcement of a transaction, and negotiated in due course between SS&C and Mr. Hooley’s counsel. The Board of Directors determined to reconvene the meeting during the morning of January 11, 2018.
During the evening of January 10, 2018, Mr. Hooley contacted Mr. Stone and they finalized the remaining issues relating to employee equity awards and other compensation matters and agreed that the terms of Mr. Hooley’s post-closing employment would be discussed following the commencement of the proposed transaction.
During the morning of January 11, 2018, the Board of Directors reconvened telephonically to consider the final material terms of the merger agreement. After discussing the proposed transaction and considering the presentations by Skadden and BofA Merrill Lynch, the Board of Directors unanimously determined the transactions with SS&C to be advisable, fair to, and in the best interests of DST’s stockholders, determined to adopt the merger agreement and resolved to recommend adoption of the merger agreement by DST’s stockholders. Following the meeting, the merger agreement was executed by the parties later in the morning of January 11, 2018.
On January 11, 2018, prior to the opening of trading of DST’s common stock on NYSE, DST and SS&C issued a joint press release announcing the execution of the merger agreement.
Recommendation of Our Board of Directors and Reasons for the Merger
Recommendation of Our Board of Directors to Adopt the Merger Agreement, thereby Approving the Transactions Contemplated by the Merger Agreement
On January 11, 2018, the Board of Directors, after considering various factors described below, unanimously (i) approved the merger agreement and the transactions contemplated by the merger agreement, (ii) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to, and in the best interests of DST and its stockholders; (iii) approved and authorized the execution, delivery and performance by DST of the merger agreement and the consummation of the transactions contemplated thereby, including the merger; (iv) resolved to recommend that DST’s stockholders vote in favor of the adoption and approval of the merger agreement; and (v) directed that the adoption of the merger agreement and the approval of the merger be submitted to DST’s stockholders.
The Board of Directors recommends that you vote “FOR” the proposal to adopt the merger agreement, thereby approving the transactions contemplated by the merger agreement, including the merger.
Reasons for the Merger
In recommending that DST’s stockholders vote in favor of the merger proposal, the Board of Directors considered a number of potentially positive factors, including, but not limited to, the following (not necessarily in order of relative importance):

Premium to Market Price.   The fact that the merger consideration of  $84.00 per share to be received by the holders of shares of DST common stock in the merger represents a significant premium over the market price at which shares of DST common stock traded prior to the announcement of the execution of the merger agreement, including the fact that the merger consideration of  $84.00 per share represents an approximate premium of:

approximately 40% over the closing stock price on December 14, 2017, the date on which the Board of Directors authorized management to progress discussions with the SS&C at a price of  $84.00 per share;
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approximately 29% over the highest stock price of shares of DST common stock during the 52-week period ended January 9, 2018, the last trading day prior to market rumors regarding the merger;

approximately 40% over the volume weighted average stock price of shares of DST common stock during the 90 days ended January 9, 2018;

approximately 35% over the volume weighted average stock price of shares of DST common stock during the 30 days ended January 9, 2018; and

approximately 29% over the closing stock price on January 9, 2018.

Form of Consideration.   The fact that the proposed merger consideration is all cash, which provides stockholders certainty of value and liquidity for their shares of DST common stock.

Opinion of DSTs Financial Advisor.   The opinion of BofA Merrill Lynch, dated January 10, 2018, to the Board of Directors as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of DST common stock of the merger consideration to be received by such holders, as more fully described below in the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Opinion of DST’s Financial Advisor” beginning on page 43.

Ability to Reach Deal Price.   The Board of Directors considered the possibility, that if DST did not enter into the merger agreement and remained an independent public company, it could take a considerable amount of time and involve a substantial amount of risk before the trading price of the shares of DST common stock would reach and sustain the $84.00 per share value of the merger consideration, as adjusted for present value.

Fair Value.   The Board of Directors believed that the merger represents fair value for the shares of DST common stock, taking into account the Board of Directors’ familiarity with DST’s current and historical financial condition, results of operations, business, competitive position and prospects, as well as DST’s future business plan and potential long-term value.

Loss of Opportunity.   The Board of Directors considered the possibility that, if it declined to adopt the merger agreement, there may not be another opportunity for DST’s stockholders to receive a comparably priced transaction and that the short-term market price for the shares of DST common stock could fall below the value of the merger consideration, and possibly substantially below the value of the merger consideration.

Market Check.   The Board of Directors, with the assistance of BofA Merrill Lynch, considered other parties that would be most likely to have an interest in acquiring DST, taking into consideration, in particular, the likelihood of such other parties being willing to acquire DST at a price that would be competitive with SS&C’s proposed price range, synergies that may be available to strategic buyers, and the financial ability of any party to complete a business combination with DST. Based on prior discussions between representatives of DST and financial sponsors, and after considering BofA Merrill Lynch’s advice that financial sponsors were unlikely to be willing to acquire DST at a price at the high end of the preliminary per share range proposed by SS&C and that Party B, Party C and Party D were most likely of the strategic buyers considered to have a strategic interest in, and be willing to pay a competitive price for, DST, the Board of Directors solicited the interest of Party B, Party C and Party D, and the Board of Directors considered the fact that none of the parties contacted indicated an interest in discussing a strategic transaction with DST.

Arms-Length Negotiations. The fact that the Board of Directors and DST’s senior management, in coordination with DST’s outside legal and financial advisors, vigorously negotiated on an arms-length basis with SS&C with respect to price and other terms and conditions of the merger agreement, including obtaining price increases by SS&C from its initial indicative price range of high-$70’s to mid-$80’s to a price of  $84.00 per share. In particular, the Board of Directors noted that on all matters senior management acted in consultation with the lead independent director, who engaged with the Board of Directors, and on compensation matters also consulted with the
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Chairman of the Compensation Committee. As to matters related to potential transitional services to be provided by the Chief Executive Officer, arrangements were not discussed with SS&C at all until substantially all terms of the merger agreement were agreed.

Review of Strategic Alternatives.   The Board of Directors considered, after a thorough review of DST’s long-term strategic goals and opportunities, competitive environment and short- and long-term performance in light of DST’s strategic plan, and discussions with DST’s senior management and DST’s outside legal and financial advisors, the challenges and risks of continuing as a stand-alone public company and the potential strategic alternatives available to DST. The Board of Directors determined that the value offered to DST’s stockholders pursuant to the merger agreement is more favorable to DST’s stockholders than the alternative of remaining an independent public company and pursuing DST’s long-term plan (taking into account the potential risks, rewards and uncertainties associated therewith).

Risks Inherent in DST’s Business Plan.   The Board of Directors considered DST’s short-term and long-term financial projections and the perceived challenges and risks associated with DST’s ability to meet such projections, including the risks and uncertainties described in the “risk factors” and “forward looking statements” sections of DST’s disclosures filed with the SEC.

Opportunity for Long-Term Revenue Growth.   The fact that DST has carefully reviewed and considered its opportunities with respect to its ability to achieve long-term growth and has identified substantial challenges to achieving such growth.

Board Carefully Studied the Transaction.   The fact that the Board of Directors met, along with DST’s financial and legal advisors, to evaluate and discuss the material terms and conditions of, and other matters related to, the merger, in person and telephonically nine times between October 31, 2017, the date that representatives of SS&C first proposed a business transaction to representatives of DST, and January 11, 2018, the date the merger agreement was signed.

Terms of the Merger Agreement.   The Board of Directors considered that the provisions of the merger agreement, including the respective representations, warranties and covenants and termination rights of the parties and termination fees payable by DST, are reasonable and customary. The Board of Directors also believed that the terms of the merger agreement include the most favorable terms reasonably attainable from SS&C.

Conditions to the Consummation of the Merger; Likelihood of Closing.   The Board of Directors considered the reasonable likelihood of the consummation of the transactions contemplated by the merger agreement in light of the conditions in the merger agreement to the obligations of SS&C, as well as DST’s ability to seek specific performance to prevent breaches or threatened breaches of the merger agreement, including to cause the merger to be consummated if all of the conditions to SS&C’s obligations to effect the merger closing have been satisfied or waived.

Regulatory Approvals.   The Board of Directors considered the fact that the merger agreement requires that SS&C use its reasonable best efforts to take actions necessary to satisfy the regulatory conditions and provides an appropriate “end date” by which time it is reasonable to expect that the regulatory conditions are likely to be satisfied.

No Financing Condition.   The Board of Directors considered SS&C’s representations and covenants contained in the merger agreement relating to SS&C’s financing commitments and the fact that the merger is not subject to a financing condition. The Board of Directors also considered the delivery by SS&C of a debt commitment letter by banks of international reputation and reviewed the terms and conditions thereof.

Creditworthiness.   The Board of Directors considered the fact that SS&C is a creditworthy entity with substantial assets, and the merger agreement does not limit DST’s rights to pursue damages or specific performance in the event of a financing failure.

Ability to Respond to Certain Unsolicited Takeover Proposals.   The Board of Directors considered the fact that, while the merger agreement restricts DST’s ability to actively solicit competing bids to acquire it, the Board of Directors has rights, under certain circumstances, to engage in
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discussions with, and provide information to, third parties submitting unsolicited acquisition proposals and to terminate the merger agreement in order to enter into an alternative acquisition agreement that the Board of Directors determines to be a superior proposal, provided that DST concurrently pays a $165,000,000 termination fee. The Board further considered that the timing of the merger would provide ample opportunity for such third parties to submit proposals.

Buyer Experience.   The Board of Directors considered the proven track record and ability of SS&C to complete transactions on agreed upon terms.

Appraisal Rights.   The Board of Directors considered the availability of appraisal rights with respect to the merger for DST stockholders who properly exercise their rights under the DGCL, which would give these stockholders the ability to seek and be paid a judicially determined appraisal of the “fair value” of their shares at the completion of the merger.

Retention of Key Employees.   The Board of Directors’ belief that a retention plan for management and certain employees of DST that DST would be permitted to implement in connection with the merger would help assure the continuity of management, and increase the likelihood of the successful operation of DST during the period prior to closing.
The Board of Directors also considered and balanced against the potentially positive factors a number of uncertainties, risks and other potentially negative factors in its deliberations concerning the merger and the other transactions contemplated by the merger agreement, including, but not limited to, the following (not necessarily in order of relative importance):

No Stockholder Participation in Future Growth or Earnings.   The fact that DST’s stockholders will lose the opportunity to realize the potential long-term value of the successful execution of DST’s current strategy as an independent public company.

Impact of Announcement on DST.   The fact that the announcement and pendency of the merger, or the failure to complete the merger, may result in significant costs to DST and cause substantial harm to DST’s relationships with its employees (including making it more difficult to attract and retain key personnel and the possible loss of key management and other personnel) and its customers, providers, suppliers and regulators.

Diversion of Management Attention.   The Board of Directors considered the substantial time and effort of management required to consummate the merger, which could disrupt DST’s business operations and may divert employees’ attention away from DST’s day-to-day operations.

Tax Treatment.   The fact that the merger would be a transaction in which gain or loss is recognized by DST’s stockholders for U.S. federal income tax purposes.

Closing Certainty.   The fact that there can be no assurance that all conditions to the parties’ obligations to consummate the merger will be satisfied, including approval by DST’s stockholders and the approval of certain regulatory authorities, including the FCA.

Financing Risk.   The Board of Directors considered the risk that the debt financing contemplated by the debt commitment letter will not be obtained, resulting in SS&C having insufficient funds to consummate the merger, and the risk that the duration of SS&C’s marketing period exposes DST to additional risk following the satisfaction of all conditions.

No Auction Process.   The fact that DST decided not to engage in a wide-spread competitive bid process or other broad solicitation of interest (and instead undertook a pre-market check with Party B, Party C and Party D) and had only engaged in negotiations with SS&C regarding a potential transaction prior to the execution of the merger agreement on January 11, 2018.

Pre-Closing Covenants.   The Board of Directors considered the restrictions on DST’s conduct of business prior to completion of the merger, which could delay or prevent DST from undertaking business opportunities that may arise or taking other actions with respect to its operations during the pendency of the merger without SS&C’s consent.
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No Solicitation.   The Board of Directors considered the restrictions in the merger agreement on DST’s ability to actively solicit competing bids to acquire it.

Termination Fee.   The Board of Directors considered the termination fee of  $165,000,000 that could become payable to SS&C under specified circumstances, including upon the termination of the merger agreement in order to enter into an agreement with respect to a superior proposal and concluded that the termination fee is reasonable in amount and will not unduly deter any other party that might be interested in acquiring DST.
After taking into account all of the factors set forth above, as well as others, the Board of Directors concluded that the risks, uncertainties, restrictions and potentially negative factors associated with the merger were outweighed by the potential benefits of the merger to DST’s stockholders.
The foregoing discussion of factors considered by the Board of Directors is not intended to be exhaustive, but summarizes the material factors considered by the Board of Directors. In light of the variety of factors considered in connection with their evaluation of the merger agreement and the merger, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching their determinations and recommendations. Moreover, each member of the Board of Directors applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board of Directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support their ultimate determinations. The Board of Directors based their recommendations on the totality of the information presented, including thorough discussions with, and questioning of, DST’s senior management and the Board of Directors’ financial advisor and outside legal counsel. It should be noted that this explanation of the reasoning of the Board of Directors and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in “Forward-Looking Statements” beginning on page 23.
Opinion of DST’s Financial Advisor
DST has retained BofA Merrill Lynch to act as DST’s financial advisor in connection with the merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. DST selected BofA Merrill Lynch to act as DST’s financial advisor in connection with the merger on the basis of BofA Merrill Lynch’s experience in transactions similar to the merger, its reputation in the investment community and its familiarity with DST and its business.
On January 10, 2018, at a meeting of the Board of Directors held to evaluate the merger, BofA Merrill Lynch delivered to the Board of Directors an oral opinion, which was confirmed by delivery of a written opinion dated January 10, 2018, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of shares of DST common stock was fair, from a financial point of view, to such holders.
The full text of BofA Merrill Lynch’s written opinion to the Board of Directors, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken by BofA Merrill Lynch in rendering its opinion, is attached as Annex B to this document and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to the Board of Directors for the benefit and use of the Board of Directors (in its capacity as such) in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to DST or in which DST might engage or as to the underlying business decision of DST to proceed with or effect the merger. BofA Merrill Lynch’s opinion also does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger or any other matter.
In connection with rendering its opinion, BofA Merrill Lynch has, among other things:
(1)
reviewed certain publicly available business and financial information relating to DST;
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(2)
reviewed certain internal financial and operating information with respect to the business, operations and prospects of DST furnished to or discussed with BofA Merrill Lynch by the management of DST, including certain financial forecasts relating to DST prepared by the management of DST, referred to herein as DST management forecasts;
(3)
reviewed certain analyses relating to the value of certain non-core assets of DST, including holdings of certain liquid and illiquid securities as well as non-operating and joint venture real estate assets, furnished to or discussed with BofA Merrill Lynch by the management of DST, referred to herein as the DST non-core asset valuations;
(4)
discussed the past and current business, operations, financial condition and prospects of DST with members of senior management of DST;
(5)
reviewed the trading history for DST common stock and a comparison of that trading history with the trading histories of other companies BofA Merrill Lynch deemed relevant;
(6)
compared certain financial and stock market information of DST with similar information of other companies BofA Merrill Lynch deemed relevant;
(7)
compared certain financial terms of the merger to financial terms, to the extent publicly available, of other transactions BofA Merrill Lynch deemed relevant;
(8)
considered the results of BofA Merrill Lynch’s efforts on behalf of DST to solicit, at the direction of DST, indications of interest from third parties with respect to a possible acquisition of DST;
(9)
reviewed the draft, dated January 9, 2018, of the merger agreement, which we refer to as the Draft Agreement; and
(10)
performed such other analyses and studies and considered such other information and factors as BofA Merrill Lynch deemed appropriate.
In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with BofA Merrill Lynch and relied upon the assurances of the management of DST that it was not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the DST management forecasts, BofA Merrill Lynch was advised by DST, and assumed, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of DST as to the future financial performance of DST, including the expected impact thereon of the Tax Cuts and Jobs Act, which we refer to as the TCJA. BofA Merrill Lynch did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of DST (other than the DST non-core asset valuations, which BofA Merrill Lynch relied upon without independent verification), nor did it make any physical inspection of the properties or assets of DST. BofA Merrill Lynch did not evaluate the solvency or fair value of DST or SS&C under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of DST, that the merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on DST. BofA Merrill Lynch also assumed, at the direction of DST, that the final executed merger agreement would not differ in any material respect from the Draft Agreement reviewed by it.
BofA Merrill Lynch expressed no opinion or view as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the merger or otherwise BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by the holders of shares of DST common stock and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any
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other class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to DST or in which DST might engage or as to the underlying business decision of DST to proceed with or effect the merger. BofA Merrill Lynch also did not express any opinion or view with respect to, and BofA Merrill Lynch relied, at the direction of DST, upon the assessments of representatives of DST regarding, legal, regulatory, accounting, tax and similar matters relating to DST or the merger, as to which matters BofA Merrill Lynch understood that DST obtained such advice as it deemed necessary from qualified professionals. In particular, BofA Merrill Lynch noted that numerous details with respect to the implementation of the TCJA remain to be developed through the promulgation of related regulations and interpretations and possible technical corrections legislation. The precise effects of the TCJA on DST and the merger cannot be ascertained with certainty, and BofA Merrill Lynch expressed no opinion or view with respect to such effects. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any stockholder should vote or act in connection with the merger or any other matter.
BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by a fairness opinion review committee of BofA Merrill Lynch. Except as described in this summary, DST imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.
The discussion set forth below in the following section entitled “Summary of Material DST Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to the Board of Directors in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.
Summary of Material DST Financial Analyses
Selected Publicly Traded Companies Analysis.   BofA Merrill Lynch reviewed publicly available financial and stock market information for DST and the following publicly traded companies: (i) three companies engaged in the financial services industry with calendar year 2018 estimated revenue growth of 3.5% or lower, which we refer to as the Primary Financial Services Companies, (ii) four companies engaged in the financial services industry with calendar year 2018 estimated revenue growth of greater than 3.5%, which we refer to as the Other Financial Services Companies, and (iii) six companies engaged in the healthcare industry, which we refer to as the Healthcare Services Companies, each of which BofA Merrill Lynch considered to have operations or to participate in end markets so as to be relevant to BofA Merrill Lynch’s analysis.
The three Primary Financial Services Companies were as follows:

Broadridge Financial Solutions, Inc.

Computershare Limited

Fidelity National Information Services, Inc.
The four Other Financial Services Companies were as follows:

Fiserv, Inc.

Jack Henry & Associates, Inc.
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SEI Investments Company

SS&C Technologies Holdings, Inc.
The six Healthcare Services Companies were as follows:

Cotiviti Holdings, Inc.

CVS Health Corporation

Express Scripts Holding Company

HMS Holdings Corp.

Allscripts Healthcare Solutions, Inc.

Premier, Inc.
BofA Merrill Lynch reviewed, among other things, per share equity values, based on closing stock prices on January 9, 2018, of the selected publicly traded companies as a multiple of calendar year 2018 estimated earnings per share, commonly referred to as EPS, adjusted to exclude amortization of intangibles and one-time non-recurring items, which we refer to as adjusted EPS. The overall low to high calendar year 2018 estimated adjusted EPS multiples observed for the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies ranged from 17.2x to 23.8x (with a median of 19.8x), 20.1x to 30.7x (with a median of 25.4x) and 10.3x to 27.5x (with a median of 19.8x), respectively. BofA Merrill Lynch then applied calendar year 2018 adjusted EPS multiples of 17.5x to 21.5x derived from the selected publicly traded companies, based on BofA Merrill Lynch’s professional judgment and experience, to DST’s calendar year 2018 estimated adjusted EPS. In applying the calendar year 2018 adjusted EPS multiples, BofA Merrill Lynch took into consideration, among other things, the observed data for the selected publicly traded companies and for DST, the historical trading prices of DST common stock and the common stocks of the selected publicly traded companies and the differences in the financial profiles of DST and the selected publicly traded companies, including that DST had: a next twelve months’(commonly referred to as NTM) adjusted EPS multiple and an NTM adjusted EPS multiple, further adjusted to exclude the value of certain non-core assets of DST, which we refer to as the Adjusted DST NTM EPS Multiple, that were 1.7x, 7.3x and 1.7x lower and 3.6x, 9.2x and 3.6x lower than the median NTM adjusted EPS multiple for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, based on closing stock prices on January 9, 2018; an average NTM adjusted EPS multiple and an average Adjusted DST NTM EPS Multiple that were 1.9x, 5.4x and 1.7x lower and 5.7x, 9.2x and 5.5x lower than the average of the median NTM adjusted EPS multiples for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, for the twelve months ended January 9, 2018; an average NTM adjusted EPS multiple and an average Adjusted DST NTM EPS Multiple that were 1.0x, 5.0x and 3.5x lower and 7.3x, 11.4x and 9.9x lower than the average of the median NTM adjusted EPS multiples for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, for the three-year period ended January 9, 2018; and an average NTM adjusted EPS multiple and an average Adjusted DST NTM EPS Multiple that were 0.5x, 4.1x and 4.3x lower and 7.0x, 10.6x and 10.8x lower than the average of the median NTM adjusted EPS multiples for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, for the five-year period ended January 9, 2018. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of DST were based on the DST management forecasts. In addition, the estimated adjusted EPS of the selected publicly traded companies (which were published prior to the enactment of the TCJA) were not revised to reflect the impact of the TCJA, and the estimated adjusted EPS of DST was adjusted on a pro forma basis as if the TCJA had not been enacted. This analysis indicated the following approximate implied per share equity value reference ranges for DST, as compared to the merger consideration:
Implied Per Share Equity Value Reference Ranges for DST
Merger Consideration
2018E Adj. EPS
$59.75 – $73.50
$84.00
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Sum of the Parts — Selected Publicly Traded Companies Analysis.   BofA Merrill Lynch performed a separate selected publicly traded company analysis for DST’s domestic and international financial services segments and DST’s healthcare services segment, and compared the sum of the values so obtained with the merger consideration. The selected publicly traded companies that were deemed relevant to DST’s domestic and international financial services segments were the Primary Financial Services Companies and the Other Financial Services Companies, and the selected publicly traded companies that were deemed relevant to DST’s healthcare services segment were the Healthcare Services Companies. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates and estimated financial data of DST’s domestic and international financial services and health services segments were based on the DST management forecasts.
BofA Merrill Lynch reviewed enterprise values of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, calculated as equity values based on closing stock prices on January 9, 2018, plus debt and minority interests, less cash, as a multiple of calendar year 2018 estimated earnings before interest, taxes, depreciations and amortization, commonly referred to as EBITDA, adjusted to exclude one-time non-recurring items, which we refer to as adjusted EBITDA. Because EBITDA measures earnings before taxes, no adjustment to the estimated EBITDA multiples for the selected publicly traded companies or for DST was deemed necessary in respect of the TCJA. The overall low to high calendar year 2018 adjusted EBITDA multiples observed for Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies ranged from 12.8x to 14.4x (with a median of 12.9x), 15.5x to 16.9x (with a median of 15.9x) and 7.5x to 14.3x (with a median of 11.1x), respectively. BofA Merrill Lynch then applied calendar year 2018 adjusted EBITDA multiples of 9.0x to 12.0x derived from Primary Financial Services Companies and Other Financial Services Companies, based on BofA Merrill Lynch’s professional judgment and experience, to DST’s calendar year 2018 estimated adjusted EBITDA for its domestic and international financial services segments and applied calendar year 2018 adjusted EBITDA multiples of 9.0x to 13.0x derived from Healthcare Services Companies, based on BofA Merrill Lynch’s professional judgment and experience, to DST’s calendar year 2018 estimated adjusted EBITDA for its healthcare services segment. In applying the calendar year 2018 adjusted EBITDA multiples, BofA Merrill Lynch took into consideration, among other things, the observed data for the selected publicly traded companies and for DST, the historical trading prices of DST common stock and the common stocks of the selected publicly traded companies and the differences in the financial profiles of DST and the selected publicly traded companies, including that DST had: an NTM adjusted EBITDA multiple and an NTM adjusted EBITDA multiple, further adjusted to exclude the value of certain non-core assets of DST, which we refer to as the Adjusted DST NTM EBITDA Multiple, that were 3.4x, 6.4x and 1.6x lower and 4.3x, 7.3x and 2.5x lower than the median NTM adjusted EBITDA multiple for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, based on closing stock prices on January 9, 2018; an average NTM adjusted EBITDA multiple and an average Adjusted DST NTM EBITDA Multiple that were 2.7x, 4.8x and 1.0x lower and 4.1x, 6.1x and 2.4x lower than the average of the median NTM adjusted EBITDA multiples for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, for the twelve months ended January 9, 2018; an average NTM adjusted EBITDA multiple and an average Adjusted DST NTM EBITDA Multiple that were 1.5x, 3.6x and 0.9x lower and 3.6x, 5.7x and 3.0x lower than the average of the median NTM adjusted EBITDA multiples for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, for the three-year period ended January 9, 2018; and an average NTM adjusted EBITDA multiple and an average Adjusted DST NTM EBITDA Multiple that were 1.1x, 2.8x and 1.3x lower and 3.3x, 5.0x and 3.5x lower than the average of the median NTM adjusted EBITDA multiples for each of the Primary Financial Services Companies, Other Financial Services Companies and Healthcare Services Companies, respectively, for the five-year period ended January 9, 2018. This analysis indicated the following approximate implied equity value reference ranges for DST’s domestic and international financial services and healthcare services segments:
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DST Segment
Implied Equity
Value Reference
Ranges (millions)
Domestic and International Financial Services
$ 3,138 – $4,184
Healthcare Services
$ 899 – $1,298
BofA Merrill Lynch then subtracted from the combined implied equity value reference ranges of DST’s segments net debt (defined as total debt minus cash) of DST as of December 31, 2017, divided the resulting equity values by the fully diluted number of shares of DST common stock and adjusted the resulting per share equity value reference ranges to include the value of certain interests in joint ventures and certain non-core assets of DST, including holdings of certain liquid and illiquid securities as well as non-operating and joint venture real estate assets. This analysis indicated the following approximate implied per share equity value reference ranges for DST, as compared to the merger consideration:
Implied Per Share Equity Value Reference Ranges for DST
Merger Consideration
2018E Adj. EBITDA
$64 – $88
$84.00
Selected Precedent Transactions Analysis.   BofA Merrill Lynch reviewed certain financial information relating to the following selected transactions, for which such information was publicly available: (i) ten transactions involving companies in the financial services industry, which we refer to as the Precedent Financial Services Transactions, and (ii) five transactions involving companies in the healthcare services industry, which we refer to as the Precedent Healthcare Services Transactions.
The ten Precedent Financial Services Transactions were as follows:
Date Announced
Acquiror(s)
Target
3/13/2017

Vista Equity Partners Management, LLC

DH Corporation
12/9/2015

Computer Sciences Corporation

Xchanging Plc
8/12/2015

Fidelity National Information Services Inc.

SunGard
7/23/2013

DH Corporation

Harland Financial Solutions, Inc.
5/28/2013

Fidelity National Financial, Inc.

Lender Processing Services, Inc.
1/14/2013

Fiserv, Inc.

Open Solutions Inc.
3/19/2012

Vista Equity Partners Management, LLC

Misys Ltd.
3/14/2012

SS&C Technologies Holdings, Inc.

GlobeOp Financial Services S.A.
3/24/2011

DH Corporation

Mortgagebot LLC.
1/12/2011

CoreLogic, Inc.

RP Data Limited
The five Precedent Healthcare Services Transactions were as follows:
Date Announced
Acquiror
Target
11/15/2017

Diplomat Pharmacy, Inc.

Leehar Distributors, LLC
4/25/2016

Veritas Capital Fund Management, LLC

Verisk Health, Inc.
3/30/2015

UnitedHealth Group Inc.

Catamaran Corporation
2/11/2015

Rite Aid Corporation

Envision Pharmaceutical Services, LLC
8/4/2011

The Blackstone Group LP

Emdeon Inc.
BofA Merrill Lynch reviewed transaction values of the selected precedent transactions, calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s estimated NTM adjusted EBITDA. The overall low to high multiples of the target companies’ estimated NTM adjusted EBITDA for the Precedent Financial Services Transactions and Precedent Healthcare Services Transactions ranged from 7.1x to 11.5x (with an
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average of 9.6x and a median of 9.9x) and 10.4x to 14.8x (with an average of 12.4x and a median of 12.9x), respectively. BofA Merrill Lynch then applied NTM adjusted EBITDA multiples of 9.5x to 13.0x derived from the selected transactions to DST’s calendar year 2018 estimated adjusted EBITDA. Estimated financial data of the selected transactions were based on publicly available information and estimated financial data of DST were based on the DST management forecasts. Because EBITDA measures earnings before taxes, no adjustment to the estimated EBITDA multiples for the selected precedent transactions or for DST was deemed necessary in respect of the TCJA. This analysis indicated the following approximate implied per share equity value reference ranges for DST, as compared to the merger consideration:
Implied Per Share Equity Value Reference Ranges for DST
Merger Consideration
2018E Adj. EBITDA
$61.00 – $86.50
$84.00
Sum of the Parts — Selected Precedent Transactions Analysis.   BofA Merrill Lynch performed a separate selected precedent transactions analysis for DST’s domestic and international financial services segments and DST’s healthcare services segment, as if each were to be individually sold and compared the sum of the values so obtained with the merger consideration. The selected precedent transactions that were deemed relevant to a potential sale of DST’s domestic and international financial services segments were the Precedent Financial Services Transactions, and the selected precedent transactions that were deemed relevant to a potential sale of DST’s healthcare services segment were the Precedent Healthcare Services Transactions. Estimated financial data of the selected precedent transactions were based on publicly available research analysts’ estimates and estimated financial data of DST’s domestic and international financial services and health services segments were based on the DST management forecasts.
BofA Merrill Lynch reviewed transaction values of the Precedent Financial Services Transactions and Precedent Healthcare Services Transactions, calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s estimated NTM adjusted EBITDA. Because EBITDA measures earnings before taxes, no adjustment to the estimated EBITDA multiples for the selected precedent transactions or for DST was deemed necessary in respect of the TCJA. The overall low to high NTM adjusted EBITDA multiples observed for Precedent Financial Services Transactions and Precedent Healthcare Services Transactions ranged from 7.1x to 11.5x (with an average of 9.6x and a median of 9.9x) and 10.4x to 14.8x (with an average of 12.4x and a median of 12.9x), respectively. BofA Merrill Lynch then applied NTM adjusted EBITDA multiples of 9.5x to 12.5x derived from Precedent Financial Services Transactions to DST’s calendar year 2018 estimated adjusted EBITDA for its domestic and international financial services segments and applied NTM adjusted EBITDA multiples of 10.0x to 14.0x derived from Precedent Healthcare Services Transactions to DST’s calendar year 2018 estimated adjusted EBITDA for its healthcare services segment. This analysis indicated the following approximate implied equity value reference ranges for DST’s domestic and international financial services and healthcare services segments, adjusted in the case of the healthcare services segment for certain tax consequences resulting from a sale of such segment:
DST Segment
Implied Equity
Value Reference
Ranges (millions)
Domestic and International Financial Services
$ 3,312 – $4,358
Healthcare Services
$ 749 – $1,040
BofA Merrill Lynch then subtracted from the combined implied equity value reference ranges of DST’s segments net debt (defined as total debt minus cash) of DST as of December 31, 2017, divided the resulting equity values by the fully diluted number of shares of DST common stock and adjusted the resulting per share equity value reference ranges to include the value of certain interests in joint ventures and certain non-core assets of DST, including holdings of certain liquid and illiquid securities as well as non-operating and joint venture real estate assets. This analysis indicated the following approximate implied per share equity value reference ranges for DST, as compared to the merger consideration:
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Implied Per Share Equity Value Reference Ranges for DST
Merger Consideration
2018E Adj. EBITDA
$64.50 – $86.75
$84.00
No company, business or transaction used in the preceding “Selected Publicly Traded Companies Analysis,” “Sum of the Parts — Selected Publicly Traded Companies Analysis,” “Selected Precedent Transactions Analysis” and “Sum of the Parts — Selected Precedent Transactions Analysis” sections is identical or directly comparable to DST or the merger. Accordingly, an evaluation of the results of each analysis is not entirely mathematical. Rather, each analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition, the public trading or other values of the companies, business segments or transactions to which DST and the merger were compared.
Discounted Cash Flow Analysis.   BofA Merrill Lynch performed a discounted cash flow analysis of DST to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that DST was forecasted to generate during DST’s fiscal years 2018 through 2020 based on the DST management forecasts. BofA Merrill Lynch calculated terminal values for DST by applying terminal multiples of 9.0x to 11.5x, which range was selected based on BofA Merrill Lynch’s professional judgment and experience, to DST’s fiscal year 2020 estimated EBITDA and perpetuity growth rates of 3.25% to 3.50%, which range was selected based on BofA Merrill Lynch’s professional judgment and experience. The cash flows and terminal values in each case were then discounted to present value as of December 31, 2017 using discount rates ranging from 9.00% to 11.25%, which were based on an estimate of DST’s weighted average cost of capital, and adjusted to exclude DST’s net debt as of December 31, 2017 and to include the value of certain interests in joint ventures and certain non-core assets of DST. This analysis indicated the following approximate implied per share equity value reference ranges for DST as compared to the merger consideration:
Implied Per Share Equity Value Reference Range for DST
Merger Consideration
Terminal Multiple
Perpetuity Growth Rate
$67.75 – $89.00
$62.75 – $91.50
$84.00
Other Factors
BofA Merrill Lynch also noted certain additional factors that were not considered part of BofA Merrill Lynch’s material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

historical trading prices of DST common stock during the five-year period ended January 9, 2018, noting, as a reference point, an all-time high of  $67.08 on July 16, 2015; and

the present value of analyst one-year forward price targets, discounted by one year at DST’s estimated midpoint cost of equity of 11.2%, noting, as reference points, that such price targets ranged between $54.75 and $68.25.
Miscellaneous
As noted above, the discussion set forth above in the section entitled “Summary of Material DST Financial Analyses” is a summary of the material financial analyses presented by BofA Merrill Lynch to the Board of Directors in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and
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factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.
In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of DST and SS&C. The estimates of the future performance of DST and SS&C in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, to the holders of DST common stock of the merger consideration to be received by such holders and were provided to the Board of Directors in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of DST or SS&C.
The type and amount of consideration payable in the merger was determined through negotiations between DST and SS&C, rather than by any financial advisor, and was approved by the Board of Directors. The decision to enter into the merger agreement was solely that of DST’s Board of Directors. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by the Board of Directors in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Board of Directors or management with respect to the merger or the merger consideration.
DST has agreed to pay BofA Merrill Lynch for its services in connection with the merger an aggregate fee currently estimated to be approximately $34 million, of which $1.5 million was payable upon delivery of its opinion and the remaining portion of which is contingent upon consummation of the merger. DST also has agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any affiliate of BofA Merrill Lynch and each of its and their respective directors, officers, employees and agents and each other person controlling BofA Merrill Lynch or any of its affiliates against specified liabilities, including liabilities under the federal securities laws.
BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of DST, SS&C and certain of their respective affiliates.
BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to DST and have received or in the future may receive compensation for the rendering of these services, including (i) having acted as financial advisor to DST on the sale of a business in 2016, (ii) having acted or acting as administrative agent, lead arranger and bookrunner for, and as a lender (including swing line lender and letter of credit lender) under, DST’s revolving credit facility, (iii) having provided or providing various foreign exchange, corporate derivatives and fixed income trading services and products to DST, and (iv) having provided or providing various treasury and trade management services and products to DST. From December 1, 2015 through November 30, 2017, BofA Merrill Lynch and its affiliates derived aggregate revenues from DST of approximately $9 million for investment and corporate banking services.
In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to SS&C and have received or in the future may receive compensation for the rendering of these services,
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including (i) having acted or acting as co-manager for, and as a lender under, SS&C’s credit facility and (ii) having provided or providing various treasury and trade management services and products to SS&C. From December 1, 2015 through November 30, 2017, BofA Merrill Lynch and its affiliates derived aggregate revenues from SS&C of approximately $5 million for investment and corporate banking services.
Financial Forecast
As part of its annual strategic planning process, DST management prepares a long range financial plan containing certain non-public unaudited prospective financial information, which it updates from time to time during the relevant fiscal year and which we refer to as the Forecast. DST provided the Board of Directors, and its advisors, including BofA Merrill Lynch, with the Forecast in connection with DST’s evaluation and provided SS&C with certain portions of the Forecast in connection with SS&C’s due diligence review of a possible transaction.
DST does not normally publicly disclose long-term projections as to future revenue, earnings or other results due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates, including the difficulty of predicting economic and market conditions. The Forecast was not prepared with a view to public disclosure and is included in this proxy statement only because such information was made available as described above. The Forecast was not prepared with a view to compliance with generally accepted accounting principles as applied in the United States, which we refer to as GAAP, the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The prospective financial information included in this proxy statement has been prepared by, and is the responsibility of, DST’s management. PricewaterhouseCoopers LLP has neither audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the accompanying prospective financial information and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report included in this proxy statement relates to DST’s historical financial information. It does not extend to the prospective financial information and should not be read to do so.
Although a summary of the Forecast is presented with numerical specificity, it reflects numerous assumptions and estimates as to future events made by our management, including with respect to indebtedness and capital expenditure levels for the applicable periods as well as the expected impact of the TCJA on DST’s financial results, that our management believed were reasonable at the time the Forecast was prepared, taking into account the relevant information available to management at the time. However, this information is not fact and should not be relied upon as necessarily indicative of actual future results. Important factors that may affect actual results and cause the Forecast not to be achieved include general economic conditions, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, changes in tax laws and other factors described or referenced under the section entitled “Forward-Looking Statements” beginning on page 23. In addition, the Forecast does not take into account any circumstances or events occurring after the date that it was prepared and does not give effect to the merger. As a result, there can be no assurance that the Forecast will or would be realized, and actual results may be materially better or worse than those contained in the Forecast.
The Forecast is not a reliable indication of future results, and DST and its management team and advisors do not endorse the Forecast as such, and they do not make any representation to readers of this document concerning the ultimate performance of DST or the combined company compared to the Forecast. DST is only including these projections in this document solely because it was among the financial information made available to the Board of Directors, BofA Merrill Lynch, and SS&C and its advisors in connection with their evaluation of the merger, and not to influence your decision on how to vote on any proposal.
The Forecast should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding DST contained in our public filings with the SEC. Our management reviewed the Forecast with the Board of Directors, which considered the Forecast in connection with its evaluation and approval of the merger agreement and the merger. In preparing its financial analyses and opinion summarized under the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — 
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Opinion of DST’s Financial Advisor” beginning on page 43, BofA Merrill Lynch relied on the accuracy and completeness of the information provided with respect to the Forecast and the assurances of our management that it was not aware of any facts or circumstances that would make such information inaccurate or misleading in any material respect.
The Forecast constitutes a forward-looking statement. For information on factors that may cause DST’s future results to materially vary, see “Forward-Looking Statements” beginning on page 23.
Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Forecast to reflect circumstances existing after the date when DST prepared the Forecast or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the Forecast are shown to be in error.
In light of the foregoing factors and the uncertainties inherent in the Forecast, stockholders are cautioned not to rely on the Forecast.
Certain of the measures included in the Forecast may be considered non-GAAP financial measures, as noted below. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by DST may not be comparable to similarly titled amounts used by other companies.
The following table reflects selected metrics reflected in, or generated from, the Forecast:
Fiscal Year Ending December 31,
2017E(5)
2018E
2019E
2020E
Domestic Financial Services
$ 1,129(6) $ 1,153 $ 1,149 $ 1,168
International Financial Services
$ 441 $ 562 $ 526 $ 518
Healthcare Services
$ 418 $ 449 $ 492 $ 564
Total Operating Revenue(1)
$ 1,988 $ 2,164 $ 2,168 $ 2,250
Domestic Financial Services
$ $ 274 $ 280 $ 308
International Financial Services
$ $ 75 $ 83 $ 82
Healthcare Services
$ $ 100 $ 122 $ 154
Total EBITDA(2)
$ 402 $ 448 $ 485 $ 544
Equity in Earnings of Affiliates
$ 20 $ 14 $ 16 $ 16
Adj. EPS Reflective of TCJA(3)
$ 3.98
Adj. EPS (Not Reflective of TCJA)(4)
$ 3.21 $ 3.42 $ 3.79 $ 4.31
Cash Flow Items:
Depreciation & Amortization
$ 92 $ 103 $ 101 $ 105
Capital Expenditures
$ (78) $ (84) $ (81) $ (81)
Note: Dollars in millions.
(1)
Total Operating Revenue includes intersegment eliminations allocated to Financial Services per DST management.
(2)
EBITDA is calculated based on net income, plus interest, taxes, depreciation and amortization, but is burdened for stock-based compensation and is not burdened for one-time, non recurring items.
(3)
Adj. EPS Reflective of TCJA is earnings per share reflective of TCJA and burdened for stock-based compensation, but is not burdened for amortization of intangibles and one-time, non-recurring items. 2018E Adj. EPS Reflective of TCJA per DST management calculated using DST management’s projected 2018E income tax payment under TCJA of  $89mm, resulting in an Adj. Net Income of $244mm. Adj. Net Income is net income burdened for stock-based compensation but is not burdened for amortization of intangibles and one-time, non-recurring items.
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(4)
Adj. EPS (Not Reflective of TCJA) is earnings per share burdened for stock-based compensation, but is not burdened for amortization of intangibles and one-time, non-recurring items. Adj. EPS (Not Reflective of TCJA) reflects tax rate of  ~37% (i.e. does not reflect TCJA). 2018E Adj. EPS (Not Reflective of TCJA) per DST management calculated using DST management’s projected 2018E income tax payment (Not Reflective of TCJA) of  $123mm, resulting in an Adj. Net Income of $210mm. Adj. Net Income is net income burdened for stock-based compensation but is not burdened for amortization of intangibles and one-time, non-recurring items.
(5)
Reflects as reported (i.e., not pro forma for the acquisition of State Street’s interest in Boston Financial Data Services, Inc. and International Financial Data Services Ltd., which closed at the end of Q1 2017).
The Forecast reflects the 2017E selected metrics provided to SS&C, at SS&C’s request, and the Board of Directors, prior to the execution of the merger agreement and prepared on the basis of DST’s unaudited actual results for January 1, 2017 through November 30, 2017 and the unaudited prospective financial information for December 1, 2017 through December 31, 2017. Prior to preparing the 2017E selected metrics set forth in the Forecast, DST management provided SS&C and the Board of Directors with 2017E metrics prepared on the basis of DST’s unaudited actual results for January 1, 2017 through October 31, 2017 and the unaudited prospective financial information for November 1, 2017 through December 31, 2017 (the “Preliminary 2017E Forecast’’). The Preliminary 2017E Forecast is set forth below.
Fiscal Year Ending
December 31,
2017E
Domestic Financial Services
$ 1,130
International Financial Services
$ 433
Healthcare Services
$ 417
Total Operating Revenue(A)
$ 1,980
Domestic Financial Services
$ 270
International Financial Services
$ 37
Healthcare Services
$ 87
Total EBITDA(B)
$ 394
Equity in Earnings of Affiliates
$ 19
Adj. EPS (Not Reflective of TCJA)
$ 3.11
Cash Flow Items:
Depreciation & Amortization
$ 91
Capital Expenditures
$ (78)
(A)
Total Operating Revenue includes intersegment eliminations allocated to Domestic Financial Services per DST management.
(B)
EBITDA is calculated based on net income, plus interest, taxes, depreciation and amortization, but is burdened for stock-based compensation and is not burdened for one-time, non-recurring items.
(6)
Reflects $(58mm) of elimination adjustments.
Interests of the Directors and Executive Officers of DST in the Merger
When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that may be different from, or in addition to, your interests as a stockholder. The Board of Directors was aware of and considered these interests to the extent such interests existed at
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the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of DST. For the purpose of each of the DST plans and agreements described below, the consummation of the merger will constitute a “change in control,” “change of control” or term of similar meaning with respect to DST.
Arrangements with SS&C
As of the date of this proxy statement, none of our executive officers has entered into any agreement with SS&C or any of its affiliates regarding employment with the surviving corporation or one or more of its affiliates, other than Messrs. Hooley and Young’s separation agreements, discussed in “Executive Officer Separation Agreements.”
Treatment of Company Awards
Options. Upon completion of the merger, each vested Option that is outstanding immediately prior to the closing will be cancelled and the holder will be entitled to receive a cash payment payable as soon as reasonably practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the excess, if any, of the Merger Consideration (without interest) over the exercise price per share of DST common stock of such vested Option, multiplied by (y) the number of shares of DST common stock subject to such vested option less applicable withholding taxes. Each vested Option with an exercise price equal to or greater than the Merger Consideration will be cancelled immediately prior to the effective time of the merger without payment of any consideration. Each unvested Option that is outstanding as of immediately prior to the closing will be converted automatically into a Rollover Option to purchase the number of shares of SS&C equal to the product obtained by multiplying (x) the total number of shares of DST common stock subject to such unvested Option immediately prior to the closing by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover Option will have an exercise price per share of SS&C common stock (rounded up to the nearest whole cent) equal to (1) the per share exercise price for the shares of DST common stock subject to such unvested Option divided by (2) the Equity Award Exchange Ratio. Each Rollover Option will otherwise be subject to the same terms and conditions applicable to the unvested Option under the applicable DST stock plan and award agreement.
Restricted Stock Units.   Upon completion of the merger, each vested restricted stock unit outstanding immediately prior to the closing will be canceled and the holder will be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the Merger Consideration and (y) the number of shares of DST common stock subject to the vested restricted stock unit (subject to any required tax withholding). Each unvested restricted stock unit that is outstanding immediately prior to the closing (including restricted stock units that will comprise the annual equity awards to be granted by DST in February 2018) will be converted into a Rollover RSU equal to the product obtained by multiplying (x) the total number of shares of DST common stock subject to the unvested restricted stock unit immediately prior to the closing by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover RSU will otherwise be subject to the same terms and conditions applicable to the unvested restricted stock unit under the applicable DST stock plan and award agreement.
Performance Stock Units.   Upon completion of the merger, each vested performance stock unit that is outstanding immediately prior to the closing will be cancelled and the holder will be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the Merger Consideration and (y) the number of shares of DST common stock that would be delivered in respect of such vested performance stock unit based on actual performance through to the effective date of the merger, subject to any required tax withholding. Each unvested performance stock unit that is outstanding immediately prior to the closing will be converted into a Rollover PSU equal to the product obtained by multiplying (x) the number of shares of DST common stock that would be delivered in respect of such unvested performance stock unit based on projected actual performance through to the effective date of the merger (equal to 124% of target for performance stock units granted in 2016, and 200% of target for performance stock units granted in 2017)
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by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover PSU will vest, subject to continued employment, in one-third increments over the immediately following three anniversary dates of the change in control (subject to earlier vesting upon a qualifying termination), and will otherwise be subject to the same terms and conditions applicable to the unvested performance stock unit under the applicable DST stock plan and award agreement (excluding any performance-vesting requirements).
Cash Awards.   Each vested long-term cash award that is outstanding as of immediately prior to the closing shall be cancelled at the closing and the holder thereof shall be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) in the amount set forth in the applicable notice of grant and award agreement. Each unvested long-term cash award that is outstanding as of immediately prior to the closing will remain outstanding and subject to the same terms and conditions as in effect immediately prior to the closing.
Director Equity.   Any shares of DST common stock held by our directors will be treated in the same manner as outstanding shares of DST common stock held by all other stockholders of DST entitled to receive the Merger Consideration. Directors who have deferred their annual cash fees and annual equity awards under the DST Systems, Inc. 2015 Directors’ Deferred Fee Plan will receive a distribution of their accounts as soon as administratively practicable following the earlier of the director’s separation from service or the completion of the merger (at which point, DST will terminate the DST Systems, Inc. 2015 Directors’ Deferred Fee Plan). Any amounts deferred under the DST Systems Inc. 2005 Non-Employee Directors’ Award Plan will be distributed as soon as administratively practicable following the earlier of the director’s separation from service or the completion of the merger (at which point, DST will terminate the DST Systems, Inc. 2005 Directors’ Deferred Fee Plan).
Accelerated Vesting of Equity and Equity-Based Awards Upon Certain Terminations
Pursuant to the terms of DST’s stock plans (which include the 2015 Plan and the 2005 Plan) the vesting of each Rollover Option, Rollover RSU, Rollover PSU, and any unvested cash award outstanding as of the date of the merger agreement, including any such awards held by executive officers, will accelerate and vest in the event of a qualifying termination (as described below).
A qualifying termination will occur upon the occurrence of one of the following events during the three-year period following completion of the merger: a termination other than for cause (as defined in the award agreement), a termination due to death or disability, a reduction in force, a business unit divestiture, retirement (as defined in the award agreement), or a resignation for good reason (as defined in the award agreement).
Merger-Related Payments
The table below sets forth the estimated amounts that each director, named executive officer, and other executive officer of DST would be eligible to receive (without subtraction of applicable withholding taxes) with regard to shares of DST common stock, Options, restricted stock units, and performance share units as of promptly following the completion of the merger or, in the case of the Rollover Options, Rollover RSUs and Rollover PSUs, assuming continued employment or service through the completion of the merger and a qualifying termination of employment or service immediately following the completion of the merger. Depending on when the merger is completed, certain outstanding equity shown in the table below may become vested in accordance with their terms without regard to the merger or, in the case of Options, may be exercised by the director or executive officer.
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Merger Proxy Beneficial Ownership Table
(as of 2/21/18)
Shares
(#)
Value of
Shares
($84)
Options
(#)(3)
Value of
Options
($84)
Performance
Stock Units
(#)(4)
Value of
Performance
Units
($84)
Restricted
Stock Units
(#)(5)
Value of
Restricted
Stock Units
($84)(6)
Total
Value
($84)
Board of Directors(1)
Joseph C. Antonellis
7,054.5002 $ 592,578.02 $ 592,578.02
Jerome H. Bailey
6,992.0000 $ 587,328.00 $ 587,328.00
Lynn Dorsey Bleil
15,987.8483 $ 1,342,979.26 $ 1,342,979.26
Lowell L. Bryan
49,154.0000 $ 4,128,936.00 $ 4,128,936.00
Gary D. Forsee
12,606.2307 $ 1,058,923.38 $ 1,058,923.38
Charles E. Haldeman, Jr.
33,191.4035 $ 2,788,077.89 $ 2,788,077.89
Samuel G. Liss
18,492.0000 $ 1,553,328.00 $ 1,553,328.00
Named Executive Officers(2)
Stephen C. Hooley
78,455 $ 6,590,220.00 157,280 $ 9,622,733.60 170,116 $ 14,289,744.00 51,169 $ 4,298,196.00 $ 34,800,893.60
Gregg Wm. Givens
43,348 $ 3,641,232.00 8,098 $ 487,864.01 39,148 $ 3,288,432.00 11,613 $ 975,492.00 $ 8,393,020.01
Jonathan J. Boehm
61,215 $ 5,142,060.00 14,174 $ 853,912.63 45,386 $ 3,812,424.00 14,341 $ 1,204,644.00 $ 11,013,040.63
Vercie L. Lark
44,390 $ 3,728,760.00 45,400 $ 2,926,711.00 40,485 $ 3,400,740.00 11,817 $ 992,628.00 $ 11,048,839.00
Randall D. Young
41,214 $ 3,461,976.00 $ 26,607 $ 2,234,988.00 8,109 $ 681,156.00 $ 6,378,120.00
Manoochehr Abbaei(7)
$ $ $ $
Other Executive Officers(2)
Edmund J. Burke
23,409 $ 1,966,356.00 $ 29,362 $ 2,466,408.00 8,710 $ 731,640.00 $ 5,164,404.00
Maria Mann
1,369 $ 114,996.00 $ 21,730 $ 1,825,320.00 7,098 $ 596,232.00 $ 2,536,548.00
William Slattery
4 $ 336.00 $ 14,035 $ 1,178,940.00 3,456 $ 290,304.00 $ 1,469,580.00
Mary E. Sweetman
9,669 $ 812,196.00 $ 20,734 $ 1,741,656.00 6,091 $ 511,644.00 $ 3,065,496.00
(1)
For directors, reflects annual stock awards in connection with Board of Directors service and open market purchases. Ms. Bleil and Messrs. Antonellis, Haldeman, and Forsee deferred their shares under the 2015 Directors’ Deferred Fee Plan and the 2005 Directors’ Deferred Fee Plan, and will receive a distribution of their accounts as soon as administratively practicable following the completion of the merger.
(2)
For named executive officers and other executive officers, reflects shares acquired in settlement of vested restricted stock units and performance stock units. The amount listed for Mr. Young also includes 41,194 shares indirectly held.
(3)
Reflects fully vested, unexercised stock options, which will be canceled in exchange for merger consideration in the merger.
(4)
Reflects (i) unvested outstanding performance stock units, which will become Rollover PSUs in the merger, calculated based on projected actual performance through the effective date of the merger, in accordance with the merger agreement (equal to 0% of target for the performance stock units granted in 2015, 124% of target for the performance stock units granted in 2016, and 200% of target for the performance stock units granted in 2017), and (ii) dividend equivalents thereon, assuming projected actual achievement in accordance with the foregoing clause. For Messrs. Hooley and Young, in lieu of conversion of their PSUs into Rollover PSUs, their PSUs will be converted into cash (based upon a cash price of  $84.00 per share) and paid in a cash lump sum on the closing date, provided, that to the extent that any such cash award constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid subject to any six month delay required by Section 409A.
(5)
Reflects unvested outstanding restricted stock units, which will become Rollover RSUs in the merger, and dividend equivalents thereon. Does not reflect the time-based restricted stock units (RSUs) approved for grant by the compensation committee on February 23, 2018 described further in footnote 6 below, in the following amounts: Mr. Hooley, 53,571 RSUs; Mr. Givens, 15,107 RSUs; Mr. Boehm, 17,881 RSUs; Mr. Lark, 16,095 RSUs; Mr. Young, 10,929 RSUs; Mr. Burke, 11,321 RSUs; Ms. Mann, 9,524 RSUs; Mr. Slattery, 7,393 RSUs; and Ms. Sweetman, 8,143 RSUs. The number of shares underlying such restricted stock units was based on a per-share price of  $84. For Messrs. Hooley and Young, in lieu of conversion of their RSUs into Rollover RSUs, their RSUs will be converted into cash
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(based upon a cash price of  $84.00 per share) and paid in a cash lump sum on the closing date, provided, that to the extent that any such cash award constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid subject to any six month delay required by Section 409A.
(6)
In addition to the values set forth in the table above, on February 23, 2018, in connection with its annual equity program in the ordinary course of business consistent with past practice (as permitted under the merger agreement), the compensation committee approved grants of time-based restricted stock units to the executive officers, which will vest ratably over three years and be subjected to standard terms and conditions, in the following amounts: Mr. Hooley, $4,500,000; Mr. Givens, $1,269,000; Mr. Boehm, $1,502,000; Mr. Lark, $1,352,000; Mr. Young, $918,000; Mr. Burke, $951,000; Ms. Mann, $800,000; Mr. Slattery, $621,000; and Ms. Sweetman, $684,000.
(7)
Mr. Abbaei left DST as a part of a divestiture on July 1, 2016.
Payments to Executives upon Termination Following Change-in-Control
Executive Officer Employment Agreements
Stephen C. Hooley and Randall D. Young are each party to an employment agreement governed by the laws of Missouri, which we refer to collectively as the employment agreements. The employment agreements contain a three-year post-change in control protection period, which we refer to as the Three-Year Period.
Benefits:   The employment agreements each contemplate continued employment during the Three-Year Period and continued participation in DST’s benefit plans, which we refer to as the Specified Benefits, on the basis of the executive’s participation on the date of the change in control; or, in the alternative, other plans which are at least equivalent to those in effect on the change in control.
Termination following Change in Control:   Under each employment agreement, after a change in control, if the executive’s employment is terminated by DST without cause or if the executive resigns for Good Reason (as defined below), then the executive is entitled to receive a lump sum payment (payable within five days following the termination date) equal to the salary he would have received for the remainder of the Three-Year Period (but in no event less than one year) and continued benefits for such length of time; provided that: (a) if any plan pursuant to which Specified Benefits are provided immediately prior to termination would not permit continued participation, then DST will pay a lump sum equal (within five days following the termination date) to the amount of Specified Benefits the executive would have received if he was fully vested and a continuing participant in such plan until the end of the severance period; (b) if the executive obtains new employment following termination, then after any waiting period applicable to participation in any plan of the new employer, he will continue to be entitled to receive benefits only to the extent such benefits would exceed those available under comparable plans of the new employer; and (c) the executive is entitled a lump sum equal to the aggregate amount of the annual incentives he would have received if target goals had been met for each year of the Three-Year Period (prorated for the final performance year if the Three-Year Period ends partially through a performance year).
280G — Gross Ups:   The employment agreements provide for payment of a gross-up relating to the parachute tax imposed by Internal Revenue Code Section 4999. For Mr. Hooley, the parachute payment is generally subject to a scaleback equal to the largest amount that can be paid without triggering the parachute tax. If the payment is scaled back, there would be no parachute tax and no gross-up payment. However, if Mr. Hooley would retain, after tax, more than 120% of the amount he would retain if the potential parachute payments were scaled back, the cap does not apply and he is entitled to a gross-up payment, not to exceed five times the parachute tax.
Good Reason:   “Good Reason” will exist if Mr. Hooley or Mr. Young resign after a change in control and following: (i) a material reduction in duties or in level of work responsibility or conditions; (ii) a material reduction in base salary; (iii) the material relocation of the executive offices of DST or its successor to a location outside the metropolitan area of Kansas City, Missouri or requiring Mr. Hooley or Mr. Young to be based anywhere other than DST’s executive office, except for required business travel to an extent substantially consistent with the executive’s obligations immediately prior to the change in control date; or (iv) a material breach by DST in providing the Specified Benefits during the Three-Year Period, except for
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removal of benefits that are immaterial or reduction in benefits by 10% or less in the aggregate. To terminate with good reason following a change in control, (i) the executive must provide written notice to the secretary of DST within ninety (90) days after the initial occurrence of a good reason event describing in detail the event and stating that the executive’s employment will terminate upon a specified date in such notice (which may be no earlier than 30 days and no later than 90 days after the date such notice is provided), and (ii) DST does not remedy the event prior to the specified termination date in such notice.
Restrictive Covenants:   Mr. Hooley is bound under his employment agreement by restrictive covenants against competition and against solicitation of employees, customers and vendors during his employment and for a minimum of three years following termination of his employment (and also including any period following termination of employment during which any unvested equity continues to vest), as well as a standard confidentiality provision. Mr. Young’s employment agreement contains a standard confidentiality provision.
William Slattery is not entitled to severance payments or benefits in connection with a change in control. Mr. Slattery is party to a terms and conditions employment agreement that requires DST to provide Mr. Slattery with six months’ notice of termination to end his contract. DST may put Mr. Slattery on garden leave for the notice period, during which time he is entitled to his pay and benefits.
Executive Officer Separation Agreements.
Messrs. Hooley and Young have each entered into a separation agreement, which we refer to collectively as the separation agreements. Under the separation agreements, upon the effective time of the merger, Messrs. Hooley and Young’s employment with DST will be terminated for “good reason” (pursuant to their employment agreements as described above). In satisfaction of all obligations of DST under their employment agreements (as described above), Messrs. Hooley and Young will receive the cash severance and benefits described above on the closing date. In addition, in lieu of conversion of any of Messrs. Hooley and Young’s outstanding RSUs and PSUs into SS&C equity awards, such awards shall be converted into cash (based upon a cash price of  $84.00 per share) and paid in a cash lump sum on the closing date, provided, that to the extent that any such cash award constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid subject to any six month delay required by Section 409A.
Executive Severance Plan
The following executive officers participate in the Executive Severance Plan: Mr. Givens, Mr. Lark, Mr. Burke, Ms. Mann, Mr. Boehm and Ms. Sweetman. During the two years following a change in control, an executive who is involuntarily terminated by DST or its successor without cause and other than as a result of the executive’s death or disability, or who is terminated as a result of Constructive Termination (as defined below) will be entitled to receive the following amounts:
Severance Payment: DST or its successor will pay the executive within sixty days of the qualifying termination, a single lump sum cash payment equal to: (1) two times the executive’s annual base salary as of the date of termination; (2) two times the executive’s target annual bonus amount; (3) two times the DST-paid (or its successor’s paid) portion of the COBRA continuation premium costs to cover the executive and the executive’s dependents for twelve months; plus (4) a pro rata portion of the annual incentive bonus that the executive would have received for the performance year during which the executive’s termination occurred, assuming target level achievement of performance goals.
Outplacement Services:   DST or its successor will reimburse the executive for all reasonable outplacement counseling services during the eighteen month period following the qualifying termination, up to $25,000.
280G Cutback:   In addition, the Executive Severance Plan specifies that DST or its successor will cut back the executive’s parachute payment if such cutback is more favorable to the executive than application of the excise taxes.
Constructive Termination:   Pursuant to the Executive Severance Plan, “Constructive Termination” is defined as the executive’s voluntary resignation as a result of: (1) a material diminution in the executive’s authority, duties or responsibilities, or a change in the executive’s supervisory reporting relationship within
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DST or its successor that materially and negatively alters the 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); (2) a change, caused by DST or its successor, in geographic location of greater than fifty miles of the location at which the executive primarily performs services for DST or its successor; or (3) a material reduction in the executive’s base compensation (which includes annual base salary, annual incentives and long-term incentives), unless such reduction is an across-the-board reduction similarly affecting all or substantially all similarly-situated employees.
Restrictive Covenants:   Executives participating in the Executive Severance Plan are subject to post-termination restrictive covenants against competition and against solicitation of employees, customers and vendors for 12 months following termination of employment (24 months following a termination occurring after a change in control), as well as a standard confidentiality provision.
Executive officers with individual employments are not eligible to participate in the Executive Severance Plan.
Potential Change-in-Control Payments to Executive Officers Other than Named Executive Officers
The following table shows the estimated amounts that each executive officer other than the named executive officers would receive upon a qualifying termination of employment assuming that such event occurred on the end date of the merger agreement, July 11, 2018. The following table does not replicate information already disclosed in the “Merger-Related Payments” table above.
Cash Severance
Salary ($)
Target Bonus
Amount ($)
Pro Rata
Bonus ($)
Health
Insurance
Premiums ($)
Outplacement
Services
Total ($)
Other Executive Officers
Edmund J. Burke
$ 830,000 $ 1,525,162(1) $ 401,139 $ 43,100 $ 25,000 $ 2,824,401
Maria Mann
$ 880,000 $ 880,000 $ 231,452 $ 14,967 $ 25,000 $ 2,031,419
William Slattery
$ 248,497(2) N/A N/A $ 32,634(2) N/A $ 281,131(2)
Mary E. Sweetman
$ 800,000 $ 800,000 $ 210,411 $ 43,100 $ 25,000 $ 1,878,511
(1)
Mr. Burke’s bonus amount is based on his two-year average bonus.
(2)
The amounts contained in the table for Mr. Slattery reflect pay and benefits in respect of a six month notice period.
2018 Equity Grants
DST may grant equity awards in 2018 in the ordinary course of business consistent with past practice (including to executive officers), in the form of restricted stock units, up to an aggregate grant date value (based on a price per share of DST common stock of  $84.00) of  $35.5 million. Such restricted stock units shall be subject to standard terms and conditions, including ratable vesting over three years and terms relating to a change in control. For anticipated grants of equity in 2018 to executive officers, see the “Merger Proxy Beneficial Ownership Table.”
Potential Change-in-Control Payments to Named Executive Officers
The following tables show the estimated amounts of payments and benefits that each named executive officer of DST would receive in connection with the merger, assuming consummation of the merger occurred on the “End Date” set forth in the merger agreement, July 11, 2018, and the employment of the named executive officer was terminated without cause or the named executive officer resigned for Good Reason (as defined in the applicable employment agreement) or due to Constructive Termination (as defined in the Executive Severance Plan) on such date.
The first table below, entitled “Golden Parachutes Compensation,” along with its footnotes, sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation payable to DST’s chief executive officer, chief financial officer, any executive officer who served as DST’s chief executive
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officer during the prior fiscal year, any executive officer who served as DST’s chief executive officer during the prior fiscal year and the three other most highly compensated executive officers, as determined for purposes of its most recent annual proxy statement, each of whom we refer to as a named executive officer. This compensation is subject to an advisory vote of DST’s stockholders, as described below under the section entitled “Proposal 2: Advisory Vote on Merger-Related Executive Compensation Arrangements” beginning on page 90. We have not included in the Golden Parachutes Compensation table and related disclosure and discussion required by Item 402(t) of Regulation S-K information relating to Mr. Manoochehr Abbaei, who was a named executive officer in our most recent annual proxy but terminated employment with DST as a part of a divestiture on July 1, 2016.
The calculations in the tables below do not include (i) amounts that the named executive officers were already entitled to receive that were or would be vested as of July 11, 2018, (ii) annual equity grants to the named executive officers approved by the compensation committee on February 23, 2018, or (iii) amounts under contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of executive officers and that are available generally to all of the salaried employees of DST. In addition to the assumptions regarding the consummation date of the merger and termination of the employment of the named executive officers, these estimates are based on certain other assumptions that are described in the footnotes accompanying the tables below. Accordingly, the ultimate values to be received by a named executive officer in connection with the merger may differ from the amounts set forth below.
Golden Parachutes Compensation
Officer
Cash(1)
($)(b)
Equity(2)
($)(c)
Perquisites/​
Benefits(3)
($)(e)
Tax
Reimbursement(4)
($)(f)
Total
($)(g)
Stephen C. Hooley
$ 7,045,685 $ 16,459,899.00 $ 148,687 $ 0 $ 23,654,271.00
Gregg Wm. Givens
$ 2,149,863 $ 4,055,533.00 $ 68,100 $ 0 $ 6,273,496.00
Jonathan J. Boehm
$ 2,217,753 $ 4,694,364.00 $ 71,265 $ 0 $ 6,983,382.00
Vercie L. Lark
$ 2,081,973 $ 4,187,431.00 $ 71,265 $ 0 $ 6,340,669.00
Randall D. Young
$ 3,034,603 $ 2,792,901.00 $ 139,593 $ 0 $ 5,967,097.00
(1)
Cash.   Column (b) represents the value of the cash severance payments payable to each named executive officer. For Messrs. Hooley and Young, this is equal to (a) base salary for the remainder of the three-year period, (b) an incentive award equal to the aggregate of the annual incentive awards for the three-year period at a target level of performance, and (c) a lump sum payment of a prorated annual incentive based on target performance for the year of termination. For the remaining NEOs, this is equal to (a) a lump sum severance payment equal to two times the sum of the executive’s (i) annual base salary as of immediately prior to his or her termination of employment and (ii) target incentive opportunity for the year in which the termination of employment occurred and (b) a lump sum payment of a prorated annual incentive based on target performance for the year of termination. The individual components of column (b) are quantified in the table below.
Name
Severance Payment ($)
Prorated Incentive
Stephen C. Hooley
$ 6,375,000 $ 670,685
Gregg Wm. Givens
$ 1,900,000 $ 249,863
Jonathan J. Boehm
$ 1,960,000 $ 257,753
Vercie L. Lark
$ 1,840,000 $ 241,973
Randall D. Young
$ 2,790,000 $ 244,603
The severance amounts under this column are all “double trigger” in nature, which means that payment of these amounts is conditioned upon a qualifying termination of employment on or after the completion of the merger.
(2)
Equity.   Column (c) represents the aggregate payments to be made in respect of Rollover RSUs and Rollover PSUs (or, for Messrs. Hooley and Young, under their separation agreements) based on the
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Merger Consideration, not including (as noted above), the time-based restricted stock units approved for grant by the compensation committee on February 23, 2018, in the following amounts: Mr. Hooley, $4,500,000; Mr. Givens, $1,269,000; Mr. Boehm, $1,502,000; Mr. Lark, $1,352,000; and Mr. Young, $918,000. The amounts in this column are “double trigger” in nature, which means that payment of these amounts is conditioned upon a qualifying termination of employment on or after the completion of the merger. See the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Interests of the Directors and Executive Officers of DST in the Merger — Treatment of Company Awards” for a description of the treatment of DST equity awards in connection with the business combination.
Name
RSUs ($)
PSUs ($)
Stephen C. Hooley
$ 2,170,168.00 $ 14,289,731
Gregg Wm. Givens
$ 767,088.00 $ 3,288,445
Jonathan J. Boehm
$ 881,972.00 $ 3,812,392
Vercie L. Lark
$ 786,674.00 $ 3,400,757
Randall D. Young
$ 557,942.00 $ 2,234,959
(3)
Perquisites/Benefits.   Column (e) reflects three years of health insurance premiums for Messrs. Hooley and Young (calculated using 2018 COBRA continuation rates) plus three years of life insurance and disability premiums (using 2018 rates) and plus estimated 401(k) profit sharing contribution amounts for a three-year period (based on contributions made for 2017). The table reflects two years of health insurance premiums for Messrs. Givens, Boehm and Lark plus reimbursement for outplacement consulting fees equal to $25,000. The individual components of column (e) are quantified in the table below.
Officer
Health
Insurance
Premiums
Disability
Insurance
Premiums
Life
Insurance
Premiums
401K
Contribution
Outplacement
Benefits
Stephen C. Hooley
$ 45,173 $ 40,841 $ 14,073 $ 48,600 N/A
Gregg Wm. Givens
$ 43,100 N/A N/A N/A $ 25,000
Jonathan J. Boehm
$ 46,265 N/A N/A N/A $ 25,000
Vercie L. Lark
$ 46,265 N/A N/A N/A $ 25,000
Randall D. Young
$ 45,173 $ 24,904 $ 20,916 $ 48,600 N/A
(4)
Tax Reimbursements.   The employment agreements for each of Messrs. Hooley and Young provide that they are eligible for a gross-up payment relating to the parachute tax. For Mr. Hooley, the potential parachute payment is generally subject to a scaleback equal to the largest amount that can be paid without triggering the parachute tax. If the payment is scaled back, there would be no parachute tax and no gross-up payment. However, if Mr. Hooley would retain, after tax, more than 120% of the amount he would retain if the potential parachute payments were scaled back, the cap does not apply and he is entitled to a gross-up payment, not to exceed five times the parachute tax. Messrs. Hooley’s and Young’s estimated parachute payments do not trigger the excise tax; therefore, neither is entitled to an excise tax gross-up. For the remaining NEOs, the Executive Severance Plan contains a “best-net cutback” provision such that if the payment of any of these amounts would subject the executive to the excise tax provisions of Section 280G of the Code, the payments would be reduced to an amount below the threshold at which such penalty tax provisions apply if such a reduction (and the avoidance of such penalty taxes) would be more favorable to the executive on an after-tax basis. The amounts shown in the tables above have not been reduced to reflect any potential cutback amounts.
Financing of the Merger
The merger is not conditioned upon receipt of financing by SS&C. In connection with the execution of the merger agreement, SS&C has delivered to DST a copy of the executed Commitment Letter, providing for debt financing as described by such debt commitment letter, pursuant to which, upon the terms and subject to the conditions set forth therein, the financing sources party thereto have agreed to lend the amounts set forth therein, in an aggregate principal amount of senior secured loans equal to $7.123 billion. In addition, SS&C intends to finance the acquisition with $1.250 billion in aggregate gross proceeds from
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the issuance of senior unsecured senior notes in a public offering or private placement and/or the issuance of shares of SS&C’s common stock in a public offering, and to the extent that the aggregate gross proceeds from the issuance of such notes and/or equity securities is less than $1.250 billion, a senior unsecured bridge loan facility up to an aggregate principal amount of  $1.250 billion is available to SS&C pursuant to the terms of the debt commitment letter. SS&C and Merger Sub have represented to DST that they will have sufficient funds at the closing to pay all cash amounts required to be paid by SS&C and Merger Sub pursuant to the terms of the merger agreement.
Concurrently with the signing of the merger agreement, SS&C Technologies, Inc., a wholly-owned subsidiary of SS&C, entered into the Commitment Letter with the Commitment Parties in connection with the merger. Pursuant to the Commitment Letter, the Commitment Parties have committed to provide to SS&C Technologies, Inc. (a) senior secured credit facilities comprised of  (i) the Term B-1 Facility, (ii) the Term Loan B-2 Facility, and (iii) the Senior Secured Credit Facilities; and (b) the Bridge Facility, and together with the Senior Secured Credit Facilities, the Debt Facilities to the extent the aggregate gross proceeds from the issuance of the Notes in a public offering or private placement and/or the issuance of the Equity Securities in a public offering is less than $1.250 billion.
The aggregate amounts of the Senior Secured Credit Facilities are subject to reduction on a dollar-for-dollar basis to the extent SS&C is able to enter into an amendment to its credit agreement, dated as of July 8, 2015, as amended, restated, supplemented or otherwise modified from time to time, by and among SS&C, SS&C Technologies, Inc., SS&C Technologies Holdings Europe S.a r.L and SS&C European Holdings S.a r.L, the lenders from time to time party thereto and Deutsche Bank AG New York Branch, as administrative agent, as described in the Commitment Letter.
The aggregate amounts of the Term B-1 Facility and the Bridge Facility are subject to reduction on a dollar-for-dollar basis to the extent SS&C is able to enter into a successful consent solicitation to its Indenture, dated as of July 8, 2015, by and among SS&C, certain of its subsidiaries and Wilmington Trust, National Association, that governs its existing senior notes, as described in the Commitment Letter.
The Commitments Parties’ obligations to provide the Debt Facilities are subject to a number of customary conditions precedent, including entry into customary documentation and completion of a customary marketing period.
The Commitment Parties’ commitments with respect to the Debt Facilities will terminate on the earliest of  (a) 5:00 p.m., New York City time, on July 11, 2018, which we refer to as the Outside Date, (provided, that if the end date has been extended under the merger agreement, the Outside Date shall be November 11, 2018), unless on or prior to such time the transactions have been consummated, (ii) the Commitment Parties’ commitments with respect to the Bridge Facility only, on a dollar-for-dollar basis on the date of the issuance of the Notes (including into escrow) and/or Equity Securities in lieu of a borrowing thereunder, (iii) the date of termination of the merger agreement or (iv) the consummation of the acquisition without the use of the Senior Secured Credit Facilities or the Bridge Facility.
SS&C currently intends to finance (a) the payment of the Merger Consideration and associated fees and expenses, (b) the refinancing of the indebtedness outstanding under SS&C’s and DST’s existing credit agreements, indentures and note purchase agreements and (c) the payment of fees and expenses with respect to the merger and the financing with (i) cash on hand and (ii) proceeds from the Debt Facilities and/or the issuance of Notes and/or Equity Securities, as applicable.
U.S. Federal Income Tax Consequences of the Merger
The following is a summary of the U.S. federal income tax consequences of the merger to U.S. holders and non-U.S. holders (each as defined below) of DST common stock who hold their stock as a capital asset within the meaning of Section 1221 of the Code. This summary is based on the Code, the U.S. Treasury Department regulations issued under the Code, which we refer to as the Treasury Regulations, and administrative rulings and court decisions in effect as of the date of this proxy statement, all of which are subject to change at any time, possibly with retroactive effect. This summary is not binding on the Internal Revenue Service, which we refer to as the IRS, or a court and there can be no assurance that the tax
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consequences described in this summary will not be challenged by the IRS or that they would be sustained by a court if so challenged. No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the merger.
For purposes of this discussion, the term “U.S. holder” means a beneficial owner of DST common stock that is for U.S. federal income tax purposes (1) an individual who is a citizen or resident of the United States, (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source or (4) a trust if  (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. A “non-U.S. holder” means a beneficial owner of DST common stock that is neither a U.S. holder nor a partnership for U.S. federal income tax purposes.
The tax consequences of the merger to stockholders who hold their shares of DST common stock through a partnership or other flow-through entity will generally depend on the status of the stockholder and the activities of the partnership or other flow-through entity. Partners in a partnership (or other flow-through entity) holding shares of DST common stock should consult their tax advisors regarding the tax consequences of the merger to them.
This summary is not a complete description of all the U.S. federal income tax consequences of the merger and, in particular, may not address U.S. federal income tax considerations applicable to holders of DST common stock who are subject to special treatment under U.S. federal income tax law including, for example, partnerships (or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) and partners therein, financial institutions, dealers in securities, insurance companies, tax-exempt entities, mutual funds, real estate investment trusts, personal holding companies, regulated investment companies, securities or currency dealers, traders in securities who elect to use the mark-to-market method of accounting, tax-exempt investors, S corporations, holders whose functional currency is not the U.S. dollar, tax-deferred or other retirement accounts, U.S. expatriates, former long-term residents of the United States, holders who acquired DST common stock pursuant to the exercise of an employee stock option or right or otherwise as compensation, and holders who hold DST common stock as part of a hedge, straddle, constructive sale, conversion transaction, or other integrated investment. Also, this summary does not address U.S. federal income tax considerations applicable to holders of DST common stock who exercise appraisal rights under Delaware law. Further, this summary does not address any tax consequences of the merger to U.S. holders of options, shares of restricted stock, restricted share units, performance stock units or warrants to acquire shares of DST common stock whose options, shares of restricted stock, restricted share units, performance stock units or warrants are canceled in exchange for cash or other consideration pursuant to the merger. Holders of such options, shares of restricted stock, restricted share units, performance units or warrants should consult their tax advisors regarding the tax consequences of the merger to them. In addition, no information is provided with respect to the tax consequences of the merger under any U.S. federal law other than income tax laws (including, for example the U.S. federal estate, gift, Medicare, and alternative minimum tax laws), or any applicable state, local, or foreign tax laws. This summary does not address the tax consequences of any transaction other than the merger.
The tax consequences of the merger will depend on your specific situation. You should consult your own tax advisor as to the tax consequences of the merger in your particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, non-U.S. or other tax laws and of changes in those laws.
Tax Consequences to U.S. Holders
The receipt of cash by U.S. holders in exchange for shares of DST common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of DST common stock pursuant to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received in the merger and (2) the U.S. holder’s adjusted tax basis in its DST common stock
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exchanged therefor. A U.S. holder’s adjusted tax basis will generally equal the price the U.S. holder paid for such shares. If a U.S. holder’s holding period in the shares of DST common stock surrendered in the merger is greater than one year as of the date of the merger, the gain or loss will be long-term capital gain or loss. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of a capital loss recognized on the exchange is subject to limitations. If a U.S. holder acquired different blocks of DST common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of DST common stock.
Tax Consequences to Non-U.S. Holders
Payments made to a non-U.S. holder in exchange for shares of DST common stock pursuant to the merger generally will not be subject to U.S. federal income tax unless:

the gain, if any, on such shares of DST common stock is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to the non-U.S. holder’s permanent establishment in the United States);

the non-U.S. holder is an individual who is present in the U.S. for 183 days or more in the taxable year of the exchange of shares of DST common stock for the Merger Consideration pursuant to the merger and certain other conditions are met; or

the non-U.S. holder owned, directly or under certain constructive ownership rules of the Code, more than 5% of DST common stock at any time during the five-year period preceding the merger, and DST is or has been a “U.S. real property holding corporation” within the meaning of Section 897(c)(2) of the Code for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding the merger or the period that the non-U.S. holder held DST common stock.
Gain described in the first bullet point above will be subject to tax on net gain at generally applicable U.S. federal income tax rates. Any gain described in the first bullet point above of a non-U.S. holder that is a corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower applicable treaty rate). A non-U.S. holder described in the second bullet point immediately above will be subject to tax at a rate of 30% (or a lower applicable treaty rate) on any gain realized, which may be offset by U.S.-source capital losses recognized in the same taxable year. If the third bullet point above applies to a non-U.S. holder, gain recognized by such holder will be subject to tax at generally applicable U.S. federal income tax rates. DST believes that it has not been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the five-year period preceding the merger.
Information Reporting and Backup Withholding
Payments made in exchange for shares of DST common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding. To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return an IRS Form W-9, certifying under penalties of perjury that such U.S. holder is a “United States person” (within the meaning of the Code), that the taxpayer identification number provided is correct and that such U.S. holder is not subject to backup withholding.
A non-U.S. holder may be subject to information reporting and backup withholding on the cash received in exchange for DST common stock unless the non-U.S. holder establishes an exemption, for example, by properly certifying its non-U.S. status on an appropriate version of IRS Form W-8.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.
Holders of DST common stock are urged to consult their own tax advisors with respect to the tax consequences of the merger in their particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, non-U.S. or other tax laws and of changes in those laws.
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Regulatory Approvals
General
DST and SS&C have agreed to use their reasonable best efforts to cooperate with each other party in taking any and all actions, and to do all things reasonably necessary, appropriate or desirable, to consummate and make effective the merger and the other transactions contemplated by the merger agreement, including obtaining any requisite approvals. These approvals include approval of, or under, the HSR Act, the competition law of Ireland, FINRA, the FCA, the Central Bank of Ireland and Luxembourg’s Commission de Surveillance du Secteur Financier. Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained or obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, or require changes to the terms of the merger agreement. These conditions or changes could result in the conditions to the closing of the merger not being satisfied.
Other than the approvals and notifications described below, neither DST or SS&C is aware of any material regulatory approvals required to be obtained, or waiting periods required to expire, after the making of a filing. If the parties discover that other approvals or filings and waiting periods are necessary, they will seek to obtain or comply with them, although, as is the case with the regulatory approvals described above, there can be no assurance that they will be obtained on a timely basis, if at all.
HSR Act and Other Antitrust Matters
Under the HSR Act and the rules promulgated thereunder by the Federal Trade Commission, the merger cannot be completed until DST and SS&C each file a notification and report form with the Federal Trade Commission and the Antitrust Division of the Department of Justice and the applicable waiting period thereunder has expired or been terminated. DST and SS&C filed their respective HSR Act notifications on February 1, 2018.
At any time before or after consummation of the merger, notwithstanding the expiration or termination of the applicable waiting period under the HSR Act, the Antitrust Division of the Department of Justice or the Federal Trade Commission could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the merger, and notwithstanding the expiration or termination of the applicable waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the parties. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.
Additionally, both DST and SS&C operate in Ireland. The approval of the Competition and Consumer Protection Commission or the expiration of the review period is a required condition to the consummation of the merger.
Financial Conduct Authority
Section 178 of the U.K. Financial Services and Markets Act 2000, which we refer to as the FSMA, requires SS&C (or any other potential controllers in SS&C’s group, to the extent required) to give notice to the FCA of their intention to acquire control of DST Financial Services Europe Limited, a wholly owned subsidiary of DST that is authorized by the FCA. Any failure to give the FCA required notice under section 178 of the FSMA and any acquisition of control by a proposed controller during the FCA assessment period without FCA prior approval are both criminal offenses under section 191F of the FSMA. Completion of the merger is, therefore, subject to the receipt of FCA approval. Finally, a failure by DST Financial Services Europe Limited to make the relevant notification to the FCA under the FCA’s rules could result in FCA action being taken against it. SS&C filed its application on January 29, 2018.
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Other Regulatory Approvals
Applications for approval or notification to regulators have been filed, or will be filed, with certain other non-U.S. regulatory authorities, including, the Central Bank of Ireland, which we refer to as CBI, under the Investment Intermediaries Act 1995 and Commission de Surveillance du Secteur Financier, which we refer to as CSSF, pursuant to Article 18 of the 1993 Law of Luxembourg. Although DST and SS&C do not expect these regulatory authorities to raise any significant concerns in connection with the merger, there is no assurance that DST and SS&C will obtain all required regulatory approvals on a timely basis, if at all.
DST and SS&C filed their respective CBI notifications on January 12, 2018 and January 29, 2018 respectively. DST filed its CSSF notification on January 12, 2018. SS&C filed its CSSF notification on February 7, 2018.
FINRA Notices and Filings
DST also must file applications and notices to FINRA in connection with the indirect change in control, as a result of the merger, of DST’s SEC registered broker-dealer subsidiaries. DST’s SEC registered broker-dealer subsidiaries filed their respective applications on February 16, 2018.
Legal Proceedings Regarding the Merger
On February 20, 2018, a putative class action complaint was filed against DST and the members of its board of directors in the United States District Court for the District of Delaware under the caption Scott v. DST Sys., Inc., et al., Case No. 1:18-cv-00286-UNA (D. Del.). The complaint alleges that the preliminary proxy statement issued in connection with the merger omitted material information in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. Specifically, the complaint alleges that the preliminary proxy statement does not disclose the line items used to calculate certain measures that do not comply with Generally Accepted Accounting Principles (“non-GAAP”) or a reconciliation of such non-GAAP metrics to their most comparable GAAP measures, and also does not disclose actual projected values of unlevered free cash flow (“UFCF”) or the values of the line items utilized to calculate UFCF, rendering the preliminary proxy statement false and misleading. The complaint seeks an order (1) declaring that the action is properly maintainable as a class action and certifying the plaintiff as class representative and his counsel as class counsel; (2) enjoining DST from proceeding with the shareholder vote on the merger or consummating the merger, unless and until DST issues additional disclosures; (3) awarding damages; (4) awarding costs and disbursements of this action, including reasonable attorneys’ and expert fees and expenses; and (5) granting such other and further relief as the Court may deem just and proper. The defendants believe the lawsuit is without merit and intend to defend vigorously against these allegations.
On February 21, 2018, a putative class action complaint was filed against DST and the members of its board of directors in the United States District Court for the Western District of Missouri under the caption Pratt v. DST Sys., Inc., et al., Case No. 4:18-cv-00133-DGK (W.D. Mo.). The complaint alleges that the preliminary proxy statement issued in connection with the merger omitted material information in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. Specifically, the complaint alleges that the preliminary proxy statement does not disclose the line items used to calculate certain non-GAAP measures or a reconciliation of such non-GAAP metrics to their most comparable GAAP measures; does not disclose actual projected values of UFCF or the values of the line items utilized to calculate UFCF; does not disclose the multiples and metrics for the Publicly Traded Companies Analyses; and does not disclose the multiples and metrics for the Selected Precedent Transactions Analyses, rendering the preliminary proxy statement false and misleading. The complaint seeks an order (1) declaring that the action is properly maintainable as a class action and certifying the plaintiff as class representative and his counsel as class counsel; (2) enjoining DST from proceeding with the shareholder vote on the merger or consummating the merger; (3) directing DST to disseminate a materially complete and accurate Proxy Statement; (4) awarding damages; (5) awarding costs and disbursements of this action, including reasonable attorneys’ and expert fees and expenses; (6) declaring that the defendants violated Sections 14(a) and/or 20(a) of the 1934 Act, as well as Rule 14a-9; and (7) granting such other and further relief as the Court may deem just and proper. The defendants believe the lawsuit is without merit and intend to defend vigorously against these allegations.
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TERMS OF THE MERGER AGREEMENT
The following summary describes certain material provisions of the merger agreement. This summary is not complete and is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. We encourage you to read the merger agreement carefully in its entirety because this summary may not contain all the information about the merger agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.
The representations, warranties, covenants and agreements described below and included in the merger agreement were made for purposes of the merger agreement and as of specific dates, were for the benefit of the parties to the merger agreement except as expressly stated therein and may be subject to important qualifications, limitations and supplemental information agreed to by DST, SS&C and Merger Sub in connection with negotiating the terms of the merger agreement, including certain qualifications, limitations and supplemental information disclosed in the confidential disclosure schedules to the merger agreement. In addition, the representations and warranties were included in the merger agreement for the purpose of allocating contractual risk between DST, SS&C and Merger Sub, and may be subject to standards of materiality applicable to such parties that differ from those generally applicable to investors. In reviewing the representations, warranties and covenants contained in the merger agreement or any description thereof in this summary, it is important to bear in mind that such representations, warranties, covenants and agreements or any descriptions were not intended by the parties to the merger agreement to be characterizations of the actual state of facts or condition of DST, SS&C and Merger Sub or any of their respective affiliates or businesses except as expressly stated in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the merger agreement. In addition, you should not rely on the covenants in the merger agreement as actual limitations on the respective businesses of DST, SS&C and Merger Sub because the parties to the merger agreement may take certain actions that are either expressly permitted in the confidential disclosure schedules to the merger agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The merger agreement is described below, and attached as Annex A hereto, with the intention of providing you with information regarding the terms of the merger. Accordingly, the representations, warranties, covenants and other agreements in the merger agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding DST and our business. Please see “Where You Can Find More Information” beginning on page 102.
Structure of the Merger
On the terms and subject to the conditions of the merger agreement and in accordance with the applicable provisions of the DGCL, on the closing date and at the effective time of the merger, Merger Sub will merge with and into DST, the separate corporate existence of Merger Sub will cease and DST will continue as the surviving corporation in the merger and as a wholly owned indirect subsidiary of SS&C. The merger will have the effects set forth in the merger agreement and the applicable provisions of the DGCL.
Closing and the Effective Time of the Merger
The closing for the merger will take place (a) on the later of  (i) the second (2nd) business day following the day on which all conditions to closing (described below under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Conditions to the Closing of the Merger” beginning on page 85) (other than those conditions that by their nature are to be satisfied at the closing) are satisfied or, to the extent permitted by law, waived and (ii) on the date following the satisfaction or, to the extent permissible, waiver of such conditions that is the earliest to occur of  (A) a date during the marketing period to be specified by SS&C on no less than two (2) business days’ notice to DST and (B) the final day of the marketing period, or (b) at such other place, at such other time or on such other date as SS&C and DST may mutually agree.
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At the closing, the parties will file a certificate of merger with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL. The merger will become effective upon the filing of the certificate of merger, or at such later time as is agreed by DST and SS&C and specified in the certificate of merger.
Directors and Officers; Certificate of Incorporation; Bylaws
The directors of Merger Sub immediately prior to the effective time of the merger will, from and after the effective time of the merger, be the directors of the surviving corporation until their successors have been duly elected and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and the bylaws of the surviving corporation. The officers of DST immediately prior to the effective time of the merger will, from and after the effective time of the merger, be the officers of the surviving corporation until their successors will have been duly elected or appointed and qualified or until the earlier of their death, resignation or removal in accordance with the certificate of incorporation and bylaws of the surviving corporation.
At the effective time of the merger, the certificate of incorporation and bylaws of Merger Sub will become the certificate of incorporation and bylaws of the surviving corporation until thereafter changed or amended as provided therein or by applicable law, except that the certificate of incorporation and bylaws will be amended by SS&C as of the effective time of the merger to change the name of Merger Sub to the name of the surviving corporation and to contain such provisions as are necessary to give full effect to the provisions described under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Directors’ and Officers’ Indemnification and Insurance” beginning on page 83.
Merger Consideration
Common Stock
At the effective time of the merger and without any action on the part of the holder, each share of DST common stock issued and outstanding immediately prior to the effective time of the merger (other than excluded shares), will be converted into the right to receive the Merger Consideration. All shares, when so converted into the right to receive the per share Merger Consideration, will automatically be cancelled and will cease to exist.
If between the date of the merger agreement and the effective time of the merger, the outstanding shares of DST common stock shall have been changed into a different number of shares or a different class, including by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination, readjustment or exchange of shares, or any similar event shall have occurred, then any number or amount contained in the merger agreement which is based upon the number of shares of DST common stock will be appropriately adjusted to provide to the holders of DST common stock the same economic effect as contemplated by the merger agreement prior to such event.
Treatment of Company Awards
Options.   Upon completion of the merger, each vested Option that is outstanding immediately prior to the closing will be cancelled and the holder will be entitled to receive a cash payment payable as soon as reasonably practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the excess, if any, of the Merger Consideration (without interest) over the exercise price per share of DST common stock of such vested Option, multiplied by (y) the number of shares of DST common stock subject to such vested Option less applicable withholding taxes. Each vested Option with an exercise price equal to or greater than the merger consideration will be cancelled immediately prior to the effective time of the merger without payment of any consideration. Each unvested Option that is outstanding as of immediately prior to the closing will be converted automatically into a Rollover Option to purchase the number of shares of SS&C common stock equal to the product obtained by multiplying (x) the total number of shares of DST common stock subject to such unvested Option immediately prior to the closing by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover Option will have an exercise price
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per share of SS&C common stock (rounded up to the nearest whole cent) equal to (1) the per share exercise price for the shares of DST common stock subject to such unvested Option divided by (2) the Equity Award Exchange Ratio. Each Rollover Option will otherwise be subject to the same terms and conditions applicable to the unvested option under the applicable DST stock plan and award agreement.
Restricted Stock Units.   Upon completion of the merger, each vested restricted stock unit outstanding immediately prior to the closing will be canceled and the holder will be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the Merger Consideration and (y) the number of shares of DST common stock subject to the vested restricted stock unit, subject to any required tax withholding; provided, that to the extent that any such vested restricted stock unit constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid in accordance with the applicable award’s terms and at the earliest time permitted under the terms of the award that will not result in the application of a tax or penalty under Section 409A. Each unvested restricted stock unit that is outstanding immediately prior to the closing (including restricted stock units that will comprise the annual equity awards to be granted by DST in February 2018) will be converted into a Rollover RSU equal to the product obtained by multiplying (x) the total number of shares of DST common stock subject to the unvested restricted stock unit immediately prior to the closing by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover RSU will otherwise be subject to the same terms and conditions applicable to the unvested restricted stock unit under the applicable DST stock plan and award agreement.
Performance Stock Units.   Upon completion of the merger, each vested performance stock unit that is outstanding immediately prior to the closing will be cancelled and the holder will be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) equal to the product of  (x) the Merger Consideration and (y) the number of shares of DST common stock that would be delivered in respect of such vested performance stock unit based on actual performance through to the effective date of the merger, subject to any required tax withholding; provided, that to the extent that any such vested performance stock unit constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid in accordance with the applicable award’s terms and at the earliest time permitted under the terms of the award that will not result in the application of a tax or penalty under Section 409A. Each unvested performance stock unit that is outstanding immediately prior to the closing will be converted into a Rollover PSU equal to the product obtained by multiplying (x) the number of shares of DST common stock that would be delivered in respect of such unvested performance stock unit based on actual projected performance through to the effective date of the merger (equal to 124% of target for performance stock units granted in 2016, and 200% of target for performance stock units granted in 2017) by (y) the Equity Award Exchange Ratio, with any fractional shares rounded down to the next lower whole number of shares. Each Rollover PSU will otherwise be subject to the same terms and conditions applicable to the unvested performance stock unit under the applicable DST stock plan and award agreement, including time-vesting requirements, but excluding any performance-vesting requirements.
Cash Awards.   Each vested long-term cash award that is outstanding as of immediately prior to the closing shall be cancelled at the closing and the holder thereof shall be entitled to receive a cash payment payable as soon as practicable following the closing (but in any event no later than three (3) business days after the closing) in the amount set forth in the applicable notice of grant and award agreement; provided, that to the extent that any such vested long-term cash award constitutes nonqualified deferred compensation under Section 409A, the cash payment will be paid in accordance with the applicable award’s terms and at the earliest time permitted under the terms of the award that will not result in the application of a tax or penalty under Section 409A. Each unvested long-term cash award that is outstanding as of immediately prior to the closing will remain outstanding and subject to the same terms and conditions as in effect immediately prior to the closing.
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Exchange Procedures
No later than ten (10) days prior to the effective time of the merger, SS&C shall appoint a bank or trust company reasonably acceptable to DST to act as paying agent for the payment and delivery of the merger consideration. On the closing date, SS&C shall deposit, or cause to be deposited, with the designated paying agent, as needed, cash to pay the merger consideration.
As reasonably promptly as practicable after the effective time of the merger (and in any event within five (5) business days after the effective time of the merger), SS&C shall cause the paying agent to mail, or otherwise provide in the case of book-entry shares, to each holder of record of shares of DST common stock:

a form of letter of transmittal; and

instructions for effecting the surrender of book-entry shares or certificates in exchange for the applicable merger consideration.
Upon the surrender of, in the case of shares of DST common stock represented by a certificate, a certificate for cancellation to the paying agent together with the letter of transmittal, duly, completely and validly executed in accordance with the instructions thereto (or affidavits in lieu thereof) or, in the case of shares of DST common stock held as book-entry shares, the receipt of an “agent’s message” by the paying agent, in each case together with such other documents as may reasonably be required by the paying agent, the holder of shares of DST common stock shall be entitled to receive in exchange therefor the merger consideration into which such shares of DST common stock have been converted.
Until such shares of DST common stock are surrendered as described above, each share of DST common stock, and any certificate with respect thereto, shall be deemed at any time from and after the effective time of the merger to represent only the right to receive upon such surrender the merger consideration that the holders of shares of DST common stock are entitled to receive in respect of such shares.
In the event of a transfer of ownership of DST common stock that is not registered in the transfer records of DST, the merger consideration may be paid to a transferee if the certificate or book-entry share representing such DST common stock is presented to the paying agent (or, in the case of book-entry shares, proper evidence of such transfer) accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid.
Any portion of the payment fund (including any interest received with respect thereto) that remains undistributed to the holders of DST common stock nine (9) months after the effective time of the merger shall be delivered to SS&C (or its designee) upon demand, and any holder of DST common stock who has not complied with the exchange procedures in the merger agreement shall thereafter look only to SS&C for payment of its claim for merger consideration without any interest thereon (subject to abandoned property, escheat or similar laws).
Withholding Rights
Each of DST, SS&C, Merger Sub, the surviving corporation and the paying agent (without duplication) shall be entitled to deduct and withhold from the consideration payable pursuant to the merger agreement to any holder of DST common stock, Rollover Options, Rollover RSUs and Rollover PSUs such amounts as are required to be withheld under U.S. federal tax law or any applicable provision of state, local or foreign tax law.
Appraisal Rights
Any dissenting shares will not be converted into the right to receive the per share merger consideration. Instead the holders of such dissenting shares will be entitled to such rights as are granted by Section 262 of the DGCL, unless and until such stockholder has failed to timely perfect, or has effectively withdrawn or lost, such stockholder’s right to dissent from the merger under the DGCL, in which case such stockholder shall be entitled to receive the merger consideration, without interest thereon, in exchange for such shares of DST common stock, and such shares of DST common stock shall no longer be deemed to be dissenting shares.
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Representations and Warranties
The merger agreement contains a number of representations and warranties made by the parties thereto that are subject in some cases to exceptions and qualifications, including “material adverse effect” qualifications. Please see the definition of  “Company material adverse effect” in this section beginning on page 73. The representations and warranties of DST in the merger agreement relate to, among other things:

due organization, valid existence, good standing and qualification to do business;

capitalization, including the number of shares of DST common stock, options and other stock-based awards outstanding and ownership of subsidiaries;

the absence of restrictions or encumbrances with respect to the capital stock of DST and its subsidiaries;

corporate authorization of the merger agreement and the transactions contemplated by the merger agreement and the valid and binding nature of the merger agreement;

the approval and recommendation by the Board of Directors of the merger agreement and the transactions contemplated by the merger agreement;

the absence of any conflicts with or violations of organizational documents and other agreements or laws;

required filings with, and consents from, governmental entities in connection with the transactions contemplated by the merger agreement;

compliance with applicable laws, including the Investment Advisers Act of 1940, the possession of required permits necessary for the conduct of DST’s business and absence of governmental investigations;

broker-dealer and transfer agent registration matters;

compliance with SEC filing requirements, including the accuracy of the information contained in such documents and compliance with GAAP, and the rules and regulations of the SEC with respect to consolidated financial statements contained therein;

absence of undisclosed liabilities;

internal controls and disclosure controls and procedures relating to financial reporting;

material contracts;

the absence of certain material changes or events in the business of DST, including that there has not been a Company material adverse effect (as defined below);

absence of litigation;

employee benefit plans;

labor and employment matters;

insurance policies;

real properties;

tax matters;

intellectual property;

environmental matters;

the receipt by the Board of Directors of an opinion of DST’s financial advisor as to the fairness, from a financial point of view, of the consideration to be received by holders of shares of DST common stock, upon consummation of the merger;

the absence of any undisclosed brokers’ fee;
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compliance with the Foreign Corrupt Practices Act of 1977; and

inapplicability of anti-takeover statutes.
The representations and warranties of SS&C and Merger Sub in the merger agreement relate to, among other things:

due organization, valid existence, good standing and qualification to do business;

corporate authorization of the merger agreement and the transactions contemplated by the merger agreement and the valid and binding nature of the merger agreement;

the absence of any conflicts with or violations of organizational documents and other agreements or laws;

required filings with, and consents from, governmental entities in connection with the transactions contemplated by the merger agreement;

absence of litigation;

operations of Merger Sub;

the absence of any undisclosed brokers’ fee;

financing and the validity of the debt commitment letter;

ownership of DST common stock; and

solvency.
Certain of the representations and warranties made by the parties are qualified as to “knowledge,” “materiality” or a “Company material adverse effect” or “SS&C material adverse effect”, as applicable. For purposes of the merger agreement, a “Company material adverse effect,” means any circumstance, effect or change that, individually or in the aggregate, (i) materially adversely affects the business, financial condition or results of operations of DST and its subsidiaries, taken as a whole; or (ii) is or would be reasonably expected to prevent or materially impair, interfere with, hinder or delay the consummation of the merger or the other transactions contemplated by the merger agreement by DST. However, in the case of clause (i), any circumstance, effect or change arising from or related to the following shall not be taken into account in determining whether a DST material adverse effect has occurred or would reasonably be expected to occur:

(a) conditions affecting the United States economy, or any other national or regional economy or the global economy generally;

(b) political conditions (or changes in such conditions) in the United States or any other country or region in the world, declared or undeclared acts of war, sabotage or terrorism, epidemics or pandemics (including any escalation or general worsening of any of the foregoing) or national or international emergency in the United States or any other country or region of the world occurring after the date of the merger agreement;

(c) changes in the financial, credit, banking or securities markets in the United States or any other country or region in the world (including any disruption thereof and any decline in the price of any security or any market index) and including changes or developments in or relating to currency exchange or interest rates;

(d) changes required by GAAP, or other accounting standards (or interpretations thereof);

(e) changes in any laws or other binding directives issued by any governmental entity (or interpretations thereof), including, to the extent relevant to the business of DST and its subsidiaries, in any legal or regulatory requirement or condition or the regulatory enforcement environment and not specifically relating to DST or its subsidiaries;

(f) changes that are generally applicable to the industries in which DST and its subsidiaries operate and not specifically relating to DST or its subsidiaries;
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(g) any failure by DST to meet any internal or published projections, forecasts or revenue or earnings predictions for any period ending on or after the date of the merger agreement or any decline in the market price or trading volume of DST common stock;

(h) the negotiation, execution or delivery of the merger agreement, the performance by any party thereto of its obligations under the merger agreement or the public announcement (including as to the identity of the parties thereto) of the merger or any of the other transactions contemplated by the merger agreement including the impact thereof on relationships, contractual or otherwise (including the cessation of any such relationship) with customers, suppliers, landlords, tenants, lenders, investors, joint venture partners, partners or employees of DST and its subsidiaries;

(i) changes in DST’s credit rating;

(j) the occurrence of natural disasters, force majeure events or weather conditions adverse to the business being carried on by DST and its subsidiaries;

(k) stockholder litigation arising from or relating to the merger agreement or the merger;

(l) any action taken that is required by the terms of the merger agreement, or with the prior written consent or at the written direction of SS&C;

(m) any damage or destruction of any real property owned by DST or any of its subsidiaries that is substantially paid for by insurance;

(n) any cyber-attacks, data breaches, ransomware attacks or similar events affecting DST, excluding any such breaches, attacks or events to the extent attributable to the negligence of DST or any of its subsidiaries or to the failure of DST or any of its subsidiaries to follow the best practices of the industries in which DST and its subsidiaries operate;

or (p) the failure to obtain any approval by the governing board and stockholders of each DST-advised registered fund of a new investment advisory agreement as described in “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Client Consents”).
The circumstances, effects or changes described in sub-sections (a), (b), (c), (d), (e), or (f) above will be taken into account in determining whether a Company material adverse effect has occurred to the extent such circumstances, effects or changes disproportionately affect DST and its subsidiaries relative to other companies in the industries in which DST and its subsidiaries operate, in which case only the incremental disproportionate effect shall be taken into account). In addition, the failures and declines described in sub-sections (g) and (i) above will not prevent the underlying cause of any such failure or decline from being considered in determining whether a Company material adverse effect has occurred to the extent not otherwise excluded by another exception.
Furthermore, the exception described in sub-section (h) above does not apply to any representation, warranty, covenant or agreement of DST in the merger agreement that is intended to address the consequences of the execution, delivery or performance of the merger agreement or the consummation of the transactions contemplated thereby).
For purposes of the merger agreement, “SS&C material adverse effect” means any circumstance, effect or change that, individually or in the aggregate, is or would be reasonably expected to prevent or materially impair, interfere with, hinder or delay the consummation of the merger or the other transactions contemplated by the merger agreement by SS&C or Merger Sub.
None of the representations and warranties contained in the merger agreement survive the consummation of the merger.
Conduct of Business Pending the Merger
From the date of the merger agreement until the earlier of the effective time of the merger and the termination of the merger agreement, except (i) as expressly set forth in DST’s disclosure letter; (2) as expressly contemplated or required by the merger agreement or as expressly required by the terms of any benefit plan in effect as of the date of the merger agreement; (3) with the prior written consent of SS&C
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(not to be unreasonably withheld, conditioned or delayed); or (4) as required by applicable laws, DST shall, and shall cause each DST subsidiary to, conduct the business of DST and each DST subsidiary in all material respects in the ordinary course of business consistent with past practice, and use its reasonable best efforts to (A) preserve intact its present business organization, (B) maintain in effect all of its permits and (C) maintain satisfactory relationships with its customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with it; and (D) not to, subject to certain exceptions:

amend the charter, bylaws or organizational documents of any of DST or its subsidiaries (whether by merger, consolidation or otherwise);

adopt a plan of, or otherwise effect a, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, other than (A) dividends and distributions by a direct or indirect wholly owned subsidiary to its parent and (B) dividends or distributions made by any subsidiary that is not wholly owned, directly or indirectly, by DST or by any joint venture of DST or any of its subsidiaries, as required by the organizational documents of such subsidiary or such joint venture;

split, combine, subdivide or reclassify any of DST’s or any of its subsidiaries’ securities, or issue any other securities;

repurchase or redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire any of DST’s or any of its subsidiaries’ securities;

issue, deliver, sell, grant, pledge or otherwise encumber or subject to any lien (i) any of DST’s or any of its subsidiaries’ securities or (ii) any of DST’s voting debt;

amend any term of any of DST’s securities;

incur any capital expenditure or any obligations or liabilities in respect thereof in excess of $2,000,000 in the aggregate, other than certain capital expenditure obligations set forth in DST’s capital expenditure budget;

create, incur, assume, suffer to exist or otherwise be liable with respect to any additional indebtedness for borrowed money or guarantees;

make any loans, advances or capital contributions to, or investments in, any other person;

acquire or agree to acquire, whether by merger, consolidation, acquisition of stock or assets or otherwise, in any transaction any equity interest in or the business of any person or division thereof or any properties or assets;

sell, lease, license, mortgage, sell and leaseback or otherwise subject to any lien (other than permitted liens) or otherwise dispose of any properties or assets or any interests therein;

settle or compromise, or offer to settle or compromise any material litigation, investigation, proceeding or other claim or dispute;

release, dismiss or otherwise dispose of any claim, liability, obligation or arbitration;

enter into, terminate or materially amend any material contracts or material real property leases;

enter into, terminate or materially amend any contracts that, if in effect on January 11, 2018, would have been a material contract or material real property lease;

waive in any material respect any term or material default under, or release, settle or compromise any material claim by or against DST or any of its subsidiaries or material liability or obligation owing to DST or any of its subsidiaries under, any material contract or material real property lease;
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sell, license or sublicense or dispose of, abandon or permit to lapse, or incur any lien (other than permitted liens) on any DST owned intellectual property or material DST licensed intellectual property;

fail to maintain existing material insurance policies or comparable replacement policies with respect to the material assets, operations and activities of DST and its subsidiaries as is currently in effect;

make or adopt any change in the accounting methods, principles or practices except insofar as may be required by a change in GAAP or law (or interpretations thereof);

make, change or revoke any tax election, change any annual tax accounting period, adopt or change any method of tax accounting, file any amended income tax return or other material tax return or claim for a tax refund, settle or compromise any material tax liability or material tax refund, enter into any material closing agreement or surrender any right to claim a material tax refund or other reduction in tax liability;

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, increase the compensation or benefits payable or to become payable to any current or former employees, directors, officers or individual independent contractors of DST or any of its subsidiaries (except, with respect to any employee who is not a director or key employee (as set out in the schedules to the merger agreement), an increase in base compensation in the ordinary course of business consistent with past practice in connection with annual compensation reviews or ordinary course promotions, which increases in the aggregate shall not exceed $18 million);

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, accelerate the time of payment or vesting of any compensation, award or benefits or the funding of any payment, award or benefit payable or to become payable to any current or former director, officer, employee or individual independent contractor of DST or any DST subsidiary;

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, materially amend any employee benefit plan or adopt or enter into any employee benefit plan;

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, grant or increase any severance, retention (other than pursuant to a retention program in the aggregate amount of  $7.5 million with respect to up to approximately 100 employees) or termination pay to, or enter into or amend any retention, termination, employment, consulting, bonus, change in control or severance agreement with, any current or former employee, director, officer, or individual independent contractor of DST or any DST subsidiary;

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, grant any equity, equity-based or other incentive award to (other than the 2018 grant of DST restricted stock units up to an aggregate of  $35.5 million in the ordinary course of business consistent with past practice), or discretionarily accelerate the vesting or payment of any such award held by, any current or former employee, director, officer or individual independent contractor of DST or any DST subsidiary;

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, establish, adopt, enter into or amend any collective bargaining agreement;

other than as required by the terms of any employee benefit plan in effect as of the date of the merger agreement, hire any (a) key employees or (b) any employee who is not a key employee other than in the ordinary course of business consistent with past practice; or (viii) terminate the employment of any key employees other than for cause; or

agree to take any of the foregoing actions.
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Additional Agreements
No Solicitation
As of the date of the merger agreement, DST agreed to immediately cease any existing solicitations, discussions or negotiations with any parties that may have been ongoing with respect to an alternative proposal (as described below) or any proposal that would be reasonably expected to result in an alternative proposal.
Under the merger agreement, DST is generally not permitted to solicit or discuss alternative proposals with third parties, subject to certain exceptions.
Except as otherwise provided in the merger agreement, DST may not, and has agreed to cause its subsidiaries and its and its subsidiaries’ directors, officers, managers and employees not to, and has agreed to instruct, and use reasonable best efforts to cause, its and its subsidiaries’ representatives not to, directly or indirectly:

solicit, initiate or knowingly facilitate or knowingly encourage any inquiry, discussion, offer or request that constitutes, or would reasonably be expected to lead to, an alternative proposal (provided that ministerial acts that are not otherwise prohibited (such as answering unsolicited phone calls, but not proceeding to engage in a substantive conversation) shall not be deemed to “facilitate”);

furnish non-public information regarding DST or any of its subsidiaries or afford access to the business, properties, assets, books or records of DST or any of its subsidiaries to any person in connection with an alternative proposal;

enter into or participate in any discussions or negotiations with any person with respect to an alternative proposal;

approve, agree to, accept, endorse or recommend any alternative proposal;

effect any adverse recommendation change (as defined below);

enter into any agreement, letter of intent, term sheet or other similar instrument providing for any alternative proposal (except for acceptable confidentiality agreements) (as defined herein);

fail to enforce or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of DST or any of its subsidiaries; or

approve any transaction under, or any person becoming an “interested stockholder” under, Section 203 of the DGCL.
Notwithstanding the foregoing, prior to the special meeting, DST is permitted to, in response to the receipt of a bona fide alternative proposal under circumstances not otherwise involving a breach of the non-solicitation provisions of the merger agreement by DST and the Board of Directors determines in its good faith judgment, after consultation with its outside legal counsel and financial advisor, that such alternative proposal constitutes or would reasonably be expected to lead to a superior proposal and the failure to take such action would reasonably be expected to be inconsistent with the directors’ exercise of their fiduciary duties under applicable law:

furnish non-public information to and afford access to the business, employees, officers, contracts, properties, assets, books and records of DST and its subsidiaries to any person in response to such alternative proposal, pursuant to a confidentiality agreement that contains terms no less favorable (other than in any immaterial respect) to DST than the terms set forth in the confidentiality agreement entered into by DST and SS&C, dated November 9, 2017, provided that such confidentiality agreement need not contain a standstill or similar provision that prohibits the counterparty thereto or any of its affiliates or representatives from making any alternative proposal, acquiring DST or taking any other similar action, which we refer to as an acceptable confidentiality agreement; or
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enter into and maintain discussions or negotiations with such party regarding such alternative proposal.
In addition, following the receipt of a bona fide alternative proposal under circumstances not otherwise involving a breach of the non-solicitation provisions of the merger agreement by DST, DST may contact the person who had made such alternative proposal for the purpose of clarifying the terms and conditions of any such proposal to determine whether such alternative proposal constitutes or would reasonably be expected to lead to a superior proposal.
However, DST may not take any of the actions set forth in the preceding two bullets, unless (x) DST delivers to SS&C a prior written notice advising SS&C that it intends to take such action, and, after taking such action, DST must continue to advise SS&C on a reasonably current basis of the status and material terms of any discussions and negotiations, and (y) promptly (but in no event more than 24 hours) following receipt by DST or any of its subsidiaries or any of their respective representatives of any alternative proposal or any request for information relating to DST or any of its subsidiaries or for access to the business, properties, assets, books or records of DST or any of its subsidiaries by any third party that DST has reason to believe may be considering making, or has made, an alternative proposal, DST shall advise SS&C in writing of the receipt of such alternative proposal or request, and subject to the existing terms of confidentiality obligations of DST as in place as of the date of the merger agreement, the terms and conditions of any such alternative proposal (including, in each case, the identity of the person or group making any such alternative proposal), and DST shall as reasonably promptly as practicable provide to SS&C (i) a copy of any such alternative proposal, if in writing; or (ii) a summary of the material terms of any such alternative proposal if oral.
For purposes of the merger agreement, alternative proposal means any proposal or offer (whether or not in writing), with respect to any

merger, consolidation, share exchange, other business combination or similar transaction involving DST that would result in any person or group beneficially owning twenty percent (20%) or more of the outstanding equity interests of DST or any successor or parent company thereto or any subsidiary whose assets constitute 20% or more of the consolidated revenues, net income or assets of DST and its subsidiaries, taken as a whole;

sale, contribution or other disposition, directly or indirectly (including by way of merger, consolidation, share exchange, other business combination, partnership, joint venture, sale of capital stock of or other equity interests in a subsidiary or otherwise) of any business or assets of DST or its subsidiaries representing 20% or more of the consolidated revenues, net income or assets of DST and its subsidiaries, taken as a whole;

issuance, sale or other disposition, directly or indirectly, to any person (or the stockholders of any person) or group of securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing 20% or more of the voting power of DST or any subsidiary whose assets constitute 20% or more of the consolidated revenues, net income or assets of DST and its subsidiaries, taken as a whole;

transaction in which any person (or the stockholders of any person) shall acquire, directly or indirectly, beneficial ownership, or the right to acquire beneficial ownership, or formation of any group which beneficially owns or has the right to acquire beneficial ownership of, 20% or more of DST common stock or securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing 20% or more of the voting power of DST or any subsidiary whose assets constitute 20% or more of the consolidated revenues, net income or assets of DST and its subsidiaries, taken as a whole; or

any combination of the foregoing.
For purposes of the merger agreement, superior proposal means any bona fide, unsolicited, written proposal or offer made by a third party or group pursuant to which such third party (or, in a parent-to-parent merger involving such third party, the stockholders of such third party) or group would acquire, directly or indirectly, more than 50% of DST common stock or consolidated assets of DST and its
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subsidiaries, taken as a whole; on terms which the Board of Directors determines in good faith, after considering the advice of a financial advisor of nationally recognized reputation and outside legal counsel, to be more favorable to the holders of DST common stock than the merger, taking into account all the terms and conditions of such proposal (including any break-up fees, expense reimbursement provisions and conditions and timing to consummation) and the merger agreement (including any changes proposed by SS&C pursuant to the terms of the merger agreement) and all financial, regulatory, legal and other aspects of such proposal, and for which financing, if a cash transaction (whether in whole or in part), is then fully committed or reasonably determined to be available by the Board of Directors.
Change of Recommendation
As described under the section entitled “The Special Meeting — Board of Directors’ Recommendation” beginning on page 27, and subject to the provisions described below, the Board of Directors has made the recommendation that the holders of shares of DST common stock vote “FOR” the merger proposal. The merger agreement provides that the Board of Directors may not fail to make, withdraw, qualify or modify, or propose publicly to fail to make, withdraw, qualify or modify, in a manner adverse to SS&C, the recommendation of the Board of Directors to DST’s stockholders that they vote “FOR” the merger and the adoption of the merger agreement, or take any action, or make any public statement, filing or release inconsistent with the recommendation of the Board of Directors to DST’s stockholders that they vote “FOR” the merger proposal, which we refer to as an “adverse recommendation change”, except as described below.
The merger agreement provides that prior to the special meeting, the Board of Directors may, in response to a bona fide, unsolicited alternative proposal in circumstances not otherwise involving a breach of the merger agreement by DST, make an adverse recommendation change and terminate the agreement to enter into a definitive written agreement with respect to a superior proposal if:

the Board of Directors determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with the directors’ exercise of their fiduciary duties under applicable law;

the Board of Directors provides SS&C three (3) business days prior written notice of its intention to make an adverse recommendation change, which notice must include a copy of the alternative proposal and the identity of the person making the superior proposal;

during the three (3) business days following such written notice, or such shorter period as described below, if desired by SS&C, DST and its representatives negotiate in good faith with SS&C regarding any revisions to the terms of the merger agreement proposed by SS&C in response to the superior proposal; and

after the three (3) business day period described above (as extended, if applicable, as described below) the Board of Directors determines in good faith, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications made or agreed to by SS&C, if any, and after consultation with DST’s financial advisor and outside legal counsel, that such superior proposal remains a superior proposal.
Under the merger agreement, any amendment to the financial terms or other material terms of any superior proposal will require a new written notice from DST, including a binding agreement reflecting such amendment, and the period during which DST and its representatives are required, if requested by SS&C, to negotiate with SS&C regarding any revisions to the terms of the merger agreement proposed by SS&C in response to such amended alternative proposal will be for the longer of  (x) 48 hours or (y) one (1) business day.
In addition to the foregoing, the Board of Directors is permitted to make an adverse recommendation change based on any fact, circumstance, occurrence, event, development, change or condition, or combination thereof, that was not known or reasonably foreseeable to DST as of or prior to the date of the merger agreement, if:
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the Board of Directors determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with the directors’ exercise of their fiduciary duties under applicable law;

the Board of Directors provides SS&C three (3) business days prior written notice of its intention to take such action, which notice must include a reasonably detailed description of the reasons for the adverse recommendation change;

during the three (3) business days following such written notice, if desired by SS&C, DST and its representatives negotiate in good faith with SS&C regarding any revisions to the terms of the merger agreement proposed by SS&C so that the failure to make such adverse recommendation change (in the judgment of the Board of Directors after consultation with DST’s financial advisors and outside legal counsel) would no longer be inconsistent with the directors’ exercise of their fiduciary duties under applicable law; and

after the three (3) business day period described above (as extended, if applicable, as described below) the Board of Directors determines in good faith, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications made or agreed to by SS&C, if any, and after consultation with DST’s financial advisor and outside legal counsel, that the failure to make an adverse recommendation change would reasonably be expected to be inconsistent with the director’s exercise of their fiduciary duties under applicable law.
Notwithstanding any adverse recommendation change, until the termination of the merger agreement in accordance with its terms (x) in no event may DST (A) enter into any agreement, letter of intent, term sheet or other similar instrument relating to an alternative proposal (other than with respect to any advancement of DST’s termination fee), (B) other than as required by applicable law, make, facilitate or provide information in connection with any SEC or other regulatory filings in connection with the transactions contemplated by any an alternative proposal or (C) seek any third party consents in connection with the transactions contemplated by any alternative proposal, and (y) DST shall otherwise remain subject to all of its obligations under the merger agreement.
As described in further detail in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination of the Merger Agreement — Termination Fees” beginning on page 88, DST will be required to pay to SS&C a $165 million termination fee if:

the merger agreement is terminated by DST to enter into a definitive agreement in connection with a superior proposal; or

the merger agreement is terminated by SS&C due to an adverse recommendation change.
Efforts to Obtain Required Stockholder Approvals
Unless the merger agreement has been earlier terminated, including pursuant to DST’s right to terminate the merger agreement to enter into an agreement with respect to a superior proposal (see “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Additional Agreements — Change of Recommendation”), DST has agreed to hold a special meeting and to use its reasonable best efforts to secure the requisite approval of the DST stockholders for the merger proposal and the board of directors of DST will include its recommendation in this proxy statement.
Efforts to Complete the Merger
SS&C and DST have each agreed to use their reasonable best efforts to take, or cause to be taken, any and all actions, and to do, or cause to be done, all things reasonably necessary, appropriate or desirable to consummate and make effective, in the most expeditious manner practicable, the merger and the other transactions contemplated by the merger agreement on the terms and subject to the conditions thereof.
To the extent necessary in order to obtain the requisite consents of governmental entities and subject to the limitations described below, SS&C has agreed to, and has agreed to cause its subsidiaries to:

defend through litigation on the merits any claim asserted in any court with respect to the transactions contemplated by the merger agreement by the Federal Trade Commission, which we
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refer to as the FTC, the United States Department of Justice, which we refer to as the DOJ, the FCA, or any other applicable governmental entity under any regulatory law if any civil, criminal or administrative action, suit, litigation, arbitration, proceeding or investigation is instituted (or threatened to be instituted) challenging the consummation of the merger or any other transaction contemplated by the merger agreement as violative of any regulatory law; and

with respect to obtaining FCA approval, make any capital contribution.
Notwithstanding SS&C’s obligations summarized in the immediately foregoing paragraph, with respect to obtaining FCA approval, SS&C is not required to contribute capital or take any other actions if such action would (i) have a material adverse effect on DST and its subsidiaries, taken as a whole, or SS&C and its subsidiaries, taken as a whole or (ii) involve a shutdown or divestiture of a material portion of SS&C’s United Kingdom business.
In addition, SS&C and DST each agreed to:

no later than February 2, 2018, make appropriate filings pursuant to the HSR Act, which the parties filed on February 1, 2018;

no later than February 9, 2018, make any required initial notifications to the FCA pursuant to section 178(1) of the FSMA (which the parties filed on January 29, 2018), to the CBI pursuant to section 39 of the Investment Intermediaries Act 1995 and the requirements of the CBI (which DST and SS&C filed on January 12, 2018 and January 29, 2018 respectively) and to the CSSF pursuant to Article 18 of the 1993 Law (which DST filed on January 12, 2018);

as reasonably promptly as practicable, make all other required filings to governmental entities required by the merger agreement.
DST has agreed that DST will cause (i) each broker-dealer to file with FINRA as soon as practicable a substantially complete application seeking FINRA’s approval of the indirect change of ownership of such broker dealer, use its reasonable best efforts to obtain such approval and provide SS&C and its counsel with an opportunity to review any related filings and keep SS&C and its counsel reasonably informed of any developments and (ii) each broker dealer that is a member of the National Securities Clearing Corporation to file with the National Securities Clearing Corporation at least 90 days prior to closing, a written notification regarding the indirect change of ownership of such broker dealer.
SS&C has agreed that neither SS&C nor Merger Sub shall, nor shall they permit their respective subsidiaries to, acquire or agree to acquire any rights, assets, business, person or division thereof  (through acquisition, license, joint venture, collaboration or otherwise), with the actual intent of increasing the risk of not obtaining or the actual intent of increasing the risk of materially impeding or delaying the obtaining of, any governmental approvals with respect to the merger or the other transactions contemplated by the merger agreement.
In connection with the reasonable best efforts referenced above, the parties are obligated to, as applicable:

promptly notify the others of, and if in writing, furnish the others with copies of  (or, in the case of oral communications, advise the others of the contents of) any communication to such person from a governmental entity (including any non-action, action, clearance, consent, approval or waiver, the commencement or proposed or threatened commencement of any investigation, litigation or administrative or judicial action or proceeding under any regulatory law);

consult with each other in advance of any meeting or conference with the FTC, DOJ, the FCA or any other governmental entity or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by the FTC, the DOJ, the FCA or such other governmental entity or other person, give the other party and/or its counsel the opportunity to attend and participate in such meetings and conferences and permit the others to review and discuss in advance (and to consider in good faith any comments made by the others in relation to) any proposed written communication to a governmental entity (except with respect to taxes);
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keep the others reasonably informed of any developments, requests for meetings or discussions with any governmental entity in respect of any filings, investigation or inquiry concerning the merger (including the nature and status of any objections raised or proposed or threatened to be raised under any regulatory law with respect to the merger agreement, the merger or the other transactions contemplated thereby); and

permit the other party and/or its counsel to review in advance, with reasonable time and opportunity to comment, give reasonable consideration to the other party’s comments thereon, and consult with each other in advance of any proposed submission, filing or communication (and documents submitted therewith) intended to be given by it to the FTC, the DOJ, the FCA or any other governmental entity.
SS&C has the right to direct all matters with any governmental entity consistent with its obligations under the merger agreement and has the right to make all strategic decisions and lead all discussions, negotiations and other proceedings, and coordinate all activities with respect to any requests that may be made by, or any actions, consents, undertakings, approvals, or waivers that may be sought by or from, any governmental entity, including determining the strategy for contesting, litigating or otherwise responding to objections to, or proceedings challenging, the consummation of the merger and the other transactions contemplated by the merger agreement, in each case subject to good faith consultations with DST reasonably in advance and in consideration of DST’s views.
Employees and Employee Benefits
For the twelve (12) month period following completion of the merger, SS&C has agreed to provide, or cause the surviving corporation to provide, to the employees of DST and its subsidiaries who continue to be so employed following the completion of the merger, which we refer to as the continuing employees:

compensation and benefits that are substantially comparable in the aggregate to the compensation and benefits (other than equity compensation and other long-term incentives, change in control, retention, transition, stay or similar arrangements) provided to such employees immediately prior to the completion of the merger; and

employee benefits which are substantially comparable in the aggregate to the employee benefits provided to such employees immediately prior to the completion of the merger.
Except to the extent necessary to avoid duplication of benefits, service with DST and its subsidiaries will be treated as service with SS&C and its subsidiaries for the purposes of determining eligibility to participate, vesting, accrual of and entitlement to benefits (except for pension benefits, post-employment or retiree welfare benefits, special or early retirement programs or window separation programs) for continuing non-union employees and continuing union employees, which we refer to collectively as the continuing employees, under benefit plans maintained by SS&C and its subsidiaries. If any covered employee becomes eligible to participate in any benefit plan, program, practice, policy, or arrangement of SS&C or the surviving corporation, which we refer to as a SS&C Plan, following the effective time of the merger, SS&C will or will cause the surviving corporation to (i) waive any pre-existing condition exclusions and waiting periods with respect to participation and coverage requirements applicable to any covered employee under any SS&C plan to the same extent such limitation would have been waived or satisfied under the corresponding DST plan; and (ii) use commercially reasonable efforts to provide each covered employee with credit for any deductibles, copayments and out-of-pocket maximums paid prior to the covered employee’s coverage under any SS&C plan during the calendar year in which such amount was paid, to the same extent such credit was given under a corresponding DST plan, in satisfying any applicable deductible, copayment or out-of-pocket requirements under the SS&C plan.
Effective as of immediately prior to the closing, unless otherwise directed in writing by SS&C at least ten (10) business days prior to the closing, DST shall take all actions reasonably necessary to terminate the DST 401(k) Profit Sharing Plan, which we refer to as the Savings Plan, or any other plan that is a qualified defined contribution plan and designated by SS&C at least ten (10) business days prior to the closing. In the event the Savings Plan is terminated, SS&C shall designate a tax-qualified defined contribution retirement
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plan with a cash or deferred arrangement that is sponsored by SS&C or one of its subsidiaries, which we refer to as the SS&C 401(k) Plan, that will cover continuing employees effective as of the closing, and shall count service with DST as service with SS&C for purposes of eligibility and vesting under the SS&C 401(k) Plan.
For annual bonuses in respect of calendar year 2018, incentive plan participants will be eligible to receive a cash bonus based on the actual level of achievement of the applicable performance criteria for the fiscal year, as determined by DST’s Compensation Committee of the Board of Directors. The bonus will be prorated based on the number of completed days in the performance year through the closing date, and will be payable on or about the date DST would normally pay annual bonuses (or, if earlier, upon a qualifying termination of employment).
Directors’ and Officers’ Indemnification and Insurance
For six (6) years after the effective time of the merger, the surviving corporation will indemnify and hold harmless each individual who was prior to or is as of the date of the merger agreement, or who becomes prior to the effective time of the merger, a director or officer of DST or any of its subsidiaries or, at the request of DST, of any joint venture, which we collectively refer to as the DST Indemnified Parties, against all claims, losses, liabilities, damages, judgments, inquiries, fines and fees, costs and expenses, including reasonable attorneys’ fees and disbursements, incurred in connection with any claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, (i) with respect to matters existing or occurring at or prior to the effective time of the merger (including the merger agreement and the transactions and actions contemplated by the merger agreement) or (ii) arising out of or pertaining to the fact that the DST Indemnified Party is or was a director or officer of DST or any of its subsidiaries or is or was serving at the request of DST or any of its subsidiaries as a director or officer of another person prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger, to the fullest extent permitted under applicable law; provided, that such indemnification shall be subject to any limitation imposed from time to time under applicable law.
For a period of six years from and after the effective time of the merger, the surviving corporation shall either cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by DST or provide substitute policies for DST and its current and former directors and officers of DST and its subsidiaries who are currently covered by the directors’ and officers’ liability insurance coverage currently maintained by DST, in either case, with limits not less than the existing coverage and having other terms not less favorable in the aggregate to the insured persons than the directors’ and officers’ liability insurance coverage currently maintained by DST with respect to claims arising from facts or events that occurred on or before the effective time of the merger (with insurance carriers having at least the same or better rating as DST’s current insurance carrier for such insurance policies), except that in no event shall the surviving corporation be required to pay with respect to such insurance policies an aggregate amount for such six year period that is more than 300% of the annual premium most recently paid by DST prior to the date of the merger agreement, which we refer to as the maximum amount, and if the surviving corporation is unable to obtain such insurance it shall obtain as much comparable insurance as possible within such six-year period for an aggregate amount equal to the maximum amount. However, in lieu of such insurance, prior to the closing date DST may, at its option (following reasonable consultation with SS&C), purchase a fully prepaid “tail” directors’ and officers’ liability insurance for DST and its current and former directors and officers who are currently covered by the directors’ and officers’ liability insurance coverage currently maintained by DST, such tail insurance to provide limits not less than the existing coverage and to have other terms not less favorable to the insured persons than the directors’ and officers’ liability insurance coverage currently maintained by DST with respect to claims arising from facts or events that occurred on or before the effective time of the merger; provided that in no event shall the aggregate cost of any such tail insurance exceed the maximum amount; provided, further, that DST’s procurement of such fully prepaid “tail” policy shall be deemed to satisfy in full the surviving corporation’s obligations.
Transaction Litigation
Subject to entry into a customary joint defense agreement, DST will give prompt notice to SS&C of litigation relating to the merger and the other transactions contemplated by the merger agreement, keep SS&C reasonably informed and give SS&C the opportunity to consult with DST and participate in the
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defense or settlement of any stockholder litigation against DST or any of its subsidiaries and/or any of their respective directors or officers. DST will not compromise, settle, offer to compromise or settle or come to an arrangement regarding any such stockholder litigation without SS&C’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
Financing
In connection with the execution of the merger agreement, SS&C has delivered to DST a copy of the executed debt commitment letter, dated as of January 11, 2018, and as amended and restated as of January 23, 2018, providing for debt financing as described by such debt commitment letter, pursuant to which, upon the terms and subject to the conditions set forth therein, the financing sources party thereto have agreed to lend the amounts set forth therein, in an aggregate principal amount of senior secured loans equal to $7.123 billion. In addition, SS&C intends to finance the acquisition with $1.250 billion in aggregate gross proceeds from the issuance of senior unsecured senior notes in a public offering or private placement and/or the issuance of shares of SS&C’s common stock in a public offering, and to the extent that the aggregate gross proceeds from the issuance of such notes and/or equity securities is less than $1.250 billion, a senior unsecured bridge loan facility up to an aggregate principal amount of  $1.250 billion is available to SS&C pursuant to the terms of the debt commitment letter. SS&C will use reasonable best efforts, to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange and to obtain the proceeds of the debt financing on the terms and conditions described in the commitment documents. DST must use its reasonable best efforts to cooperate with SS&C, as reasonably requested by SS&C and at SS&C’s sole expense, in its efforts to consummate the financing of the transactions contemplated by the merger agreement.
Client Consents
DST has agreed to use reasonable best efforts to obtain as promptly as practicable following the date of the merger agreement, the approval by the governing board and stockholders of each DST-advised registered fund of a new investment advisory agreement to take effect immediately following the closing of the merger, including by preparing and filing proxy materials with the SEC, and containing material terms that are, taken as a whole, substantially similar to (and fee terms that are no less favorable to DST or its subsidiaries than) the terms of the applicable existing investment advisory agreement. The receipt of such approvals is not a condition to closing of the merger and any failure to obtain such approvals will not give rise to any failure of the conditions set forth under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Conditions to the Closing of the Merger” beginning on page 85.
Other Covenants and Agreements
The merger agreement contains certain other covenants and agreements, including covenants relating to, among other things:

preparation by DST of this proxy statement;

confidentiality and access by SS&C of certain information about DST;

consultation between SS&C and DST in connection with public statements with respect to the transactions contemplated by the merger agreement;

causing any dispositions of DST equity securities or acquisitions of SS&C equity securities pursuant to, or resulting from, the transactions contemplated by the merger agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to DST (or will become subject to the reporting requirements with respect to SS&C) to be exempt under Rule 16b-3 promulgated under the Exchange Act; and

DST cooperating with SS&C and using its reasonable best efforts to cause DST’s common stock to be delisted from the NYSE and deregistered under the Exchange Act as soon as reasonably practicable following the effective time of the merger, and in any event no more than 10 days after the closing date.
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Conditions to the Closing of the Merger