AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 23, 2004
                                                     REGISTRATION NO. 333-109130
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              --------------------

                               AMENDMENT NO. 1 TO
                                    FORM S-3
                        REGISTRATION STATEMENT UNDER THE
                             SECURITIES ACT OF 1933

                              --------------------

                                DST SYSTEMS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

DELAWARE                                                          43-1581814
(State or Other Jurisdiction of                                 (IRS Employer
Incorporation or Organization)                               Identification No.)

                         333 WEST 11TH STREET, 5TH FLOOR
                        KANSAS CITY, MISSOURI 64105-1594
                                 (816) 435-1000
    (Address, Including Zip Code, and Telephone Number, Including Area Code,
                  of Registrant's Principal Executive Offices)

                             RANDALL D. YOUNG, ESQ.
                              333 WEST 11TH STREET
                           KANSAS CITY, MISSOURI 64105
                                 (816) 435-8651
  (Name, Address, Including Zip Code, and Telephone Number, Including Area Code
                              of Agent for Service)
                              --------------------

                                    COPY TO:
                                 JOHN F. MARVIN
                                  DIANE M. BONO
                        SONNENSCHEIN NATH & ROSENTHAL LLP
                          4520 MAIN STREET, SUITE 1100
                           KANSAS CITY, MISSOURI 64111
                                 (816) 460-2400

     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  From time
to time after this registration statement becomes effective.

     If the only  securities  being  registered  on this form are being  offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. [  ]
      --
     If any of the securities being registered on this form are to be offered on
a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

     If this form is filed to  register  additional  securities  for an offering
pursuant to Rule 462(b) under the  Securities  Act,  check the following box and
list the  Securities  Act  registration  statement  number of earlier  effective
registration statement for the same offering. [  ]
                                               --  -----------------------------


     If this form is a  post-effective  amendment  filed pursuant to Rule 462(c)
under the  Securities  Act,  check the following box and list the Securities Act
registration  statement number of the earlier effective  registration  statement
for the same offering. [  ]
                        --    --------------------------------------------------
     If delivery of the  prospectus is expected to be made pursuant to Rule 434,
please check the following box. [  ]
                                 --

                              --------------------

     THE REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT SHALL  THEREAFTER  BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE  SECURITIES  ACT OF 1933 OR UNTIL THE  REGISTRATION  STATEMENT  SHALL BECOME
EFFECTIVE  ON SUCH  DATE  AS THE  SECURITIES  AND  EXCHANGE  COMMISSION,  ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

================================================================================



The  information  in this  prospectus  is not complete  and may be changed.  The
selling  security  holders may not sell these  securities until the registration
statement filed with the Securities and Exchange  Commission is effective.  This
prospectus  is not an offer to sell these  securities  and is not  soliciting an
offer to buy  these  securities  in any  state  where  the  offer or sale is not
permitted.

                  Subject to Completion dated January 23, 2004

PRELIMINARY PROSPECTUS


                                  $840,000,000

                                DST SYSTEMS, INC.
             4.125% SERIES A CONVERTIBLE SENIOR DEBENTURES DUE 2023
             3.625% SERIES B CONVERTIBLE SENIOR DEBENTURES DUE 2023
                                       AND
             COMMON STOCK ISSUABLE UPON CONVERSION OF THE DEBENTURES

     This prospectus relates to $540,000,000  aggregate  principal amount of our
4.125%  Series  A  Convertible  Senior  Debentures  due  2023  and  $300,000,000
aggregate  principal amount of our 3.625% Series B Convertible Senior Debentures
due 2023.  We  originally  issued and sold the  debentures  to Citigroup  Global
Markets  Inc.,   Banc  of  America   Securities,   LLC,  Morgan  Stanley  &  Co.
Incorporated,  Merrill  Lynch,  Pierce,  Fenner & Smith  Incorporated,  Wachovia
Capital Markets,  LLC, Fleet Securities,  Inc., U.S. Bancorp Piper Jaffray Inc.,
Deutsche Bank Securities Inc., Bear, Stearns & Co. Inc., Legg Mason Walker Wood,
Incorporated,  and Wells Fargo Securities, LLC, in a private placement in August
2003. This prospectus will be used by selling  security  holders to resell their
debentures and the common stock issuable upon conversion of the debentures.

     The Series A debentures  and the Series B debentures,  which we refer to as
the debentures, will bear regular cash interest on the original principal amount
of each  debenture at a rate of 4.125% per year on the Series A  debentures  and
3.625%  per year on the  Series B  debentures.  Regular  cash  interest  will be
payable  semiannually  in  arrears  on  February  15 and  August 15 of each year
beginning  February 15, 2004,  until August 15, 2010 in the case of the Series A
debentures and August 15, 2008 in the case of the Series B debentures. Beginning
on August 15, 2010, in the case of the Series A debentures, and August 15, 2008,
in the case of the Series B debentures, we will not pay regular cash interest on
the debentures prior to maturity. Instead, the original principal amount of each
debenture  will increase at a rate of 4.125% per year on the Series A debentures
and 3.625% per year on the Series B  debentures,  computed from August 15, 2010,
in the case of the Series A debentures,  and August 15, 2008, in the case of the
Series B debentures,  on a semiannual bond equivalent basis using a 360-day year
composed of twelve  30-day  months.  On the maturity date of the  debentures,  a
holder will receive,  for each $1,000 original  principal  amount of debentures,
$1,700.28 for the Series A debentures and $1,714.09 for the Series B debentures.
Beginning on August 20, 2015, in the case of the Series A debentures, and August
20,  2008,  in the case of the  Series  B  debentures,  we will  pay  additional
contingent interest on each series of debentures if the average trading price of
that series of debentures is above a specified level during a specified  period,
as described in this prospectus.  The debentures will be unsecured and will rank
equally with all of our other existing and future  unsecured and  unsubordinated
indebtedness.

     The debentures are convertible under certain  circumstances by holders into
shares of our common stock per $1,000 original principal amount of debentures at
an initial  conversion  rate of 20.3732  shares for the Series A debentures  and
20.3732 shares of our common stock for the Series B debentures  (each subject to
adjustment in certain events). This is equivalent to an initial conversion price
of $49.08  per share for the  Series A  debentures  and $49.08 per share for the
Series B debentures.  Each series of debentures are convertible under any of the
following  circumstances:  (1) the closing  price of our common stock  reaches a
specified threshold, (2) the trading price per debenture falls below a specified
threshold,  (3) if we  call  the  debentures  for  redemption  or (4)  upon  the
occurrence  of  specified  corporate  transactions,  each as  described  in this
prospectus.  Upon  conversion,  we will  have the right to  deliver,  in lieu of
common stock, cash or any combination of cash and common stock.

     The Series A debentures  will mature on August 15, 2023. We may redeem some
or all of the Series A debentures at any time on or after August 20, 2010 at the
redemption  price  set  forth  herein  in cash.  Holders  will have the right to
require us to purchase  the Series A  debentures  at a purchase  price set forth
herein on August 15,  2010,  August 15,  2015 and  August  15,  2020,  or upon a
fundamental change, as described in this prospectus. For purchases on August 15,
2010,  we will  pay the  purchase  price  in  cash.  Thereafter,  and  upon  any
fundamental  change, we can pay the purchase price at our option in cash, common
stock or any combination of cash and common stock.

     The Series B debentures  will mature on August 15, 2023. We may redeem some
or all of the Series B debentures at any time on or after August 20, 2008 at the
redemption  price  set  forth  herein  in cash.  Holders  will have the right to
require us to purchase  the Series A  debentures  at a purchase  price set forth
herein on August 15,  2008,  August 15,  2013 and  August  15,  2018,  or upon a
fundamental change,



as described in this  prospectus.  For purchases on August 15, 2008, we will pay
the purchase price in cash. Thereafter,  and upon any fundamental change, we can
pay the purchase price at our option in cash, common stock or any combination of
cash and common stock.

     The  debentures  are  unsecured  and rank  equally  with  all of our  other
unsecured and unsubordinated indebtedness from time to time outstanding.

     The debentures will be treated as contingent  payment debt instruments that
will be  subject  to  special  United  States  federal  income  tax  rules.  For
discussion  of  the  special  tax  rules  governing   contingent   payment  debt
instruments, see "Material U.S. Federal Income Tax Considerations."

     Our common stock is listed on the New York Stock  Exchange under the symbol
"DST." The last  reported  sales price of our common stock on the New York Stock
Exchange on January 22, 2004 was $42.74 per share.

         INVESTING IN THE DEBENTURES INVOLVES RISKS. SEE "RISK FACTORS"
                             BEGINNING ON PAGE 13.

     NEITHER THE  SECURITIES AND EXCHANGE  COMMISSION  NOR ANY STATE  SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                              --------------------


                 The date of this prospectus is           , 2004




     YOU  SHOULD  RELY ONLY ON THE  INFORMATION  CONTAINED  OR  INCORPORATED  BY
REFERENCE  IN  THIS  PROSPECTUS  OR  ANY  PROSPECTUS  SUPPLEMENT.  WE  HAVE  NOT
AUTHORIZED  ANYONE TO PROVIDE  YOU WITH  DIFFERENT  INFORMATION.  YOU SHOULD NOT
ASSUME THAT THE  INFORMATION  CONTAINED  IN THIS  PROSPECTUS  OR ANY  PROSPECTUS
SUPPLEMENT  IS  ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THAT
DOCUMENT AND THAT ANY INFORMATION WE HAVE  INCORPORATED BY REFERENCE IS ACCURATE
ONLY AS OF THE DATE OF THE DOCUMENT INCORPORATED BY REFERENCE.

                                TABLE OF CONTENTS



                                                                            PAGE
Where You Can Find More Information.....................................       i
Special Note Regarding Forward-Looking Statements.......................     iii
Summary.................................................................       1
Risk Factors............................................................      13
Use of Proceeds.........................................................      22
Description of the Series A Debentures..................................      23
Description of the Series B Debentures..................................      49
Description of Capital Stock............................................      75
Material U.S. Federal Income Tax Considerations.........................      81
Selling Security Holders................................................      88
Plan of Distribution....................................................      94
Validity of Securities..................................................      96
Experts.................................................................      96



                       WHERE YOU CAN FIND MORE INFORMATION

     We file annual,  quarterly and special reports,  proxy statements and other
information  with the Securities and Exchange  Commission,  which we refer to as
the SEC.  You may read and copy any  document  that we file at the SEC's  public
reference  room  at  Room  1024,   Judiciary  Plaza,  450  Fifth  Street,  N.W.,
Washington,  D.C.  20549.  Please  call the SEC at  1-800-SEC-0330  for  further
information  on the public  reference  room.  Our SEC filings are also available
from the SEC's web site at  http://www.sec.gov,  and at the  offices  of the New
York Stock Exchange,  which we refer to as the NYSE. For further  information on
obtaining  copies of our  public  filings  at the NYSE,  you  should  call (212)
656-5060.

     This prospectus  "incorporates by reference" information that we have filed
with the SEC under the  Securities  Exchange Act of 1934,  as amended,  which we
refer to as the  Exchange  Act.  This  means  that we are  disclosing  important
information to you by referring you to those documents.  Any statement contained
in this prospectus or in any document  incorporated or deemed to be incorporated
by reference in this  prospectus will be deemed to be modified or superseded for
purposes of this  prospectus  to the extent that a statement  contained  in this
prospectus or any subsequently filed document which also is, or is deemed to be,
incorporated  by  reference  in this  prospectus  modifies  or  supersedes  that
statement. Any statement so modified or superseded will not be deemed, except as
to  modified  or  superseded,  to  constitute  a part  of  this  prospectus.  We
incorporate  by reference  the following  documents  listed below and any future
filings  made  with the SEC under  Sections  13(a),  13(c),  14, or 15(d) of the
Exchange Act (other than Current  Reports  furnished  under Item 9 of Form 8-K),
until the initial purchasers sell all the debentures:

     o    Our Annual Report on Form 10-K for the year ended December 31, 2002;

     o    Our  Quarterly  Reports on Form 10-Q for the quarters  ended March 31,
          2003, June 30, 2003 and September 30, 2003;

     o    Our  Current  Reports  on Form 8-K or 8-K/A  filed on March 17,  2003,
          April 29, 2003, August 13, 2003, November 10, 2003, November 18, 2003,
          November 25, 2003,  December 1, 2003,  December 2, 2003,  December 15,
          2003 and December 16, 2003;



     o    Our Proxy Statement(1), filed on March 28, 2003;

     o    Appendix A (Share  Exchange  Agreement)  and Appendix E (OMS  Combined
          Financial  Statements,  December  31,  2002 and  2001) to our  special
          meeting proxy statement filed November 13, 2003;

     o    The  description  of our common  stock and related  rights to purchase
          preferred  stock contained in our  Registration  Statement on Form 8-A
          filed with the SEC on November 17, 1995,  including  any  amendment or
          report filed for the purpose of updating such description.


     All documents  subsequently filed by us pursuant to Sections 13(a),  13(c),
14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to
Item 9 or Item 12 on any current report on Form 8-K),  prior to the  termination
of the  offering,  shall be deemed to be  incorporated  by  reference  into this
prospectus and to be a part hereof from the date of the filing of such document.
In addition,  all documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act (excluding any information  furnished pursuant to Item
9 or Item 12 on any  current  report on Form 8-K) after the date of the  initial
registration  statement and prior to effectiveness of the registration statement
shall be deemed to be incorporated by reference into this prospectus and to be a
part  hereof  from  the  date of the  filing  of such  document.  Any  statement
contained in a document  incorporated by reference  herein shall be deemed to be
modified or superseded for all purposes to the extent that a statement contained
in this prospectus,  or in any other  subsequently  filed document which is also
incorporated or deemed to be  incorporated by reference,  modifies or supersedes
such  statement.  Any statement so modified or  superseded  shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.

     You may  also  request  a copy of  these  filings  and a copy of any or all
documents incorporated by reference in this prospectus at no cost, by writing or
telephoning us at the following address:

                                DST Systems, Inc.
                              333 West 11th Street
                           Kansas City, Missouri 64105
                          Attn: DST Corporate Secretary
                                 (816) 435-4636

     Our annual reports on Form 10-K,  quarterly  reports on Form 10-Q,  current
reports on Form 8-K and  definitive  proxy  statements are also available to the
public as soon as reasonably practicable after filing with the SEC on or through
our website at  www.dstsystems.com.  (We have included our website address as an
inactive  textural  reference  and do not intend it to be an active  link to our
website. Information on our website is not part of this prospectus.)

-----------------------
(1)  The  information  referred  to in  Item  402(a)(8)  of  Regulation  S-K and
     paragraph (d)(3) of Item 7 of Schedule 14A promulgated by the SEC shall not
     be  deemed  to  be   specifically   incorporated  by  reference  into  this
     prospectus.



                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This prospectus and the documents incorporated or deemed to be incorporated
by reference  herein contain  forward-looking  statements  within the meaning of
Section 27A of the Securities Act of 1933, as amended,  which we refer to as the
Securities Act, and Section 21E of the Exchange Act. Statements in this document
and the documents  incorporated or deemed to be incorporated by reference herein
that are not  historical  facts,  including  statements  about our  beliefs  and
expectations,  particularly  regarding recent business and economic trends,  the
share  exchange with Janus Capital Group Inc.,  which we refer to as Janus,  the
impact of  litigation,  dispositions,  impairment  charges,  the  integration of
acquisitions and restructuring costs, constitute forward-looking  statements. In
some cases you can identify  forward-looking  statements by terms such as "may,"
"will,"  "should,"   "intend,"   "expect,"  "plan,"   "anticipate,"   "believe,"
"estimate,"  "predict," "potential" or "continue," or the negative of such terms
or other  comparable  terms.  These statements are based on assumptions by DST's
management at the time the statements are made including assumptions about risks
and  uncertainties  faced  by  us.  If  any of  management's  assumptions  prove
incorrect or unanticipated  circumstances arise, the actual results could differ
materially   from  those   anticipated  by  such   forward-looking   statements.
Forward-looking  statements  speak  only as of the date  they are  made,  and we
undertake  no  obligation  to  update  publicly  any of  them  in  light  of new
information or future events.

     Differences  could be caused  by a number  of  factors  or  combination  of
factors. Such factors include, but are not limited to, those associated with our
ability to attract  new  clients  and retain  existing  clients;  the  financial
success of our clients; the impact of technological developments; the successful
completion  of  joint  ventures   which   complement  and  expand  our  business
capabilities;  accounting  or other  fraud  that may occur  with  respect to the
financial statements or business of financial service providers or other clients
of ours;  changes in  management  strategies;  changes in lines of  business  or
markets;  failure of anticipated  opportunities  to materialize;  changes in the
cost of necessary supplies; and changes in the economic, political or regulatory
environments  in the  United  States  and/or  the other  countries  where we now
compete or may compete in the future.

     Our  liquidity  could be  adversely  affected  if we are  unable  to access
capital or to raise  proceeds  from asset sales.  Our  financial  condition  and
future  results of operations  could also be adversely  affected if we recognize
additional  impairment  charges  due to  future  events or in the event of other
adverse accounting-related developments.

     At any given time we may be engaged in a number of preliminary  discussions
that may result in one or more joint  ventures,  acquisitions  or  dispositions.
These opportunities  require  confidentiality and from time to time give rise to
bidding  scenarios  that  require  quick  responses  by us.  Although  there  is
uncertainty that any of these  discussions will result in definitive  agreements
or the completion of any transactions,  the announcement of any such transaction
may lead to increased volatility in the trading price of our securities.

     Investors  should  evaluate  any  statements  made by us in  light of these
important factors and the factors contained in the "Risk Factors" section.



                                     SUMMARY

     THIS SUMMARY CONTAINS BASIC INFORMATION ABOUT US AND THIS OFFERING. BECAUSE
IT IS A SUMMARY,  IT DOES NOT  CONTAIN  ALL OF THE  INFORMATION  THAT YOU SHOULD
CONSIDER  BEFORE  INVESTING.  YOU SHOULD  CAREFULLY READ THIS ENTIRE  PROSPECTUS
INCLUDING THE SECTION  ENTITLED  "RISK FACTORS" AND THE DOCUMENTS WE INCORPORATE
BY REFERENCE TO FULLY  UNDERSTAND THE TERMS OF THE DEBENTURES AS WELL AS THE TAX
AND OTHER  CONSIDERATIONS THAT ARE IMPORTANT TO YOU IN MAKING A DECISION WHETHER
TO INVEST IN THE DEBENTURES AND THE COMMON STOCK ISSUABLE UPON THEIR CONVERSION.

                                   OUR COMPANY

     DST  has  several  operating   business  units  that  offer   sophisticated
information processing and software services and products.  These business units
are reported as three operating segments:

     o    Financial Services;

     o    Output Solutions; and

     o    Customer Management.

In addition,  investments in equity securities and certain  financial  interests
and our real estate  subsidiaries  and affiliates  have been  aggregated into an
Investments and Other segment. A summary of each of these segments follows:

FINANCIAL SERVICES

     Our  Financial   Services   segment  provides   sophisticated   information
processing  and computer  software  services  and  products  primarily to mutual
funds, investment managers,  corporations,  insurance companies,  banks, brokers
and financial planners. Our proprietary software systems include:

     o    mutual fund shareowner and unit trust  recordkeeping  systems for U.S.
          and international mutual fund companies;

     o    a defined-contribution  participant  recordkeeping system for the U.S.
          retirement plan market;

     o    securities   transfer  systems  offered  to  corporations,   corporate
          trustees and transfer agents;

     o    investment  management  systems offered to U.S. and international fund
          accountants and investment managers;

     o    a workflow  management  and customer  contact system offered to mutual
          funds,  insurance companies,  brokerage firms, banks, cable television
          operators and health care providers; and

     o    record-keeping   systems  to  support  "managed  account"   investment
          products.

We also provide  design,  management  and  transaction  processing  services for
customized consumer equipment maintenance and debt protection programs.

     The segment  distributes  its  services  and products on a direct basis and
through  subsidiaries and joint venture affiliates in the United States,  United
Kingdom,  Canada,  Europe,  Australia,  South Africa and Asia-Pacific  and, to a
lesser degree,  distributes such services and products through various strategic
alliances.



OUTPUT SOLUTIONS

     Our Output Solutions  segment provides single source,  integrated print and
electronic  communications solutions. In the United States, DST Output, LLC, our
wholly owned subsidiary, provides customized and personalized bill and statement
processing  services,  electronic  bill payment and  presentment  solutions  and
computer  output  archival  solutions  which  establish  DST  Output,  LLC  as a
preferred  service provider to customers of the Financial  Services and Customer
Management segments and other industries that value customer  communications and
require high quality, accurate and timely bill and statement processing.

     The segment also offers its services to the Canadian and U.K. markets.  DST
Output Canada Inc., our wholly owned subsidiary,  offers customer communications
and document  automation  solutions to the Canadian  market.  DST  International
Output  Limited,  which was acquired in 2002,  provides  personalized  paper and
electronic communications, principally in the United Kingdom.

     The  segment  distributes  its  products  directly in  connection  with the
provision of certain Financial Services and Customer  Management products and in
connection with other providers of data processing services.

     DST Output Marketing Services, Inc., referred to in this prospectus as OMS,
was included in this segment  until the time of the share  exchange  transaction
described  below  under  "--Recent  Developments--Share  Exchange  Transaction."

CUSTOMER MANAGEMENT

     Our Customer Management segment provides customer  management,  billing and
marketing  solutions  to  the   video/broadband,   direct  broadcast  satellite,
wire-line and Internet  Protocol  telephony,  Internet and utility markets.  The
segment  offers a  comprehensive  customer  management  and billing  solution by
providing  core customer care products that are  supplemented  with the products
and services offered from our other operating segments.

     The segment  distributes  its  services  and  products  on a direct  basis,
through  subsidiaries  in North America,  the United Kingdom and parts of Europe
and with international alliance partners in other regions of the world.

INVESTMENTS AND OTHER

     The  Investments and Other segment holds  investments in equity  securities
and certain financial interests and our real estate subsidiaries and affiliates.
We hold  investments in equity  securities with a market value of  approximately
$1,024.9  million at September 30, 2003,  including 12.8 million shares of State
Street  Corporation with a market value of approximately  $575.6 million and 8.6
million  shares  of  Computer  Sciences  Corporation  with  a  market  value  of
approximately $324.3 million.  Additionally,  the segment owns and operates real
estate  mostly  in the  United  States  and the  United  Kingdom,  which is held
primarily for lease to our other business segments.

COMPANY INFORMATION

     DST was originally  established in 1969. Through a reorganization in August
1995, DST is now a corporation organized in the State of Delaware. Our principal
executive  offices are located at 333 West 11th Street,  Kansas  City,  Missouri
64105. Our telephone number is (816) 435-1000.



                               RECENT DEVELOPMENTS

SHARE EXCHANGE TRANSACTION

     On August 25,  2003,  DST,  OMS, a New York  corporation  and  wholly-owned
subsidiary  of DST,  and Janus  Capital  Group  Inc.,  a  Delaware  corporation,
referred  to in  this  prospectus  as  Janus,  entered  into  a  Share  Exchange
Agreement,  referred  to as the  Share  Exchange  Agreement.  Upon the terms and
subject to the conditions set forth in the Share Exchange Agreement, on December
1, 2003,  referred to as the Closing Date,  DST  transferred to Janus all of the
issued and  outstanding  shares of OMS common stock,  par value $0.01 per share,
referred to in this prospectus as the OMS Shares,  and Janus  transferred to DST
32.3  million  shares of DST common  stock  owned by Janus,  referred to in this
prospectus  as the  Janus DST  Shares,  in  exchange  for the OMS  Shares  (such
transfers  collectively  referred to as the  Exchange).  Upon  completion of the
Exchange,  Janus owned  approximately 7.4 million shares of DST common stock (or
approximately 9% of the outstanding shares), but DST holds a proxy to vote these
shares.

     At the time of the Exchange on December 1, 2003,  OMS held graphics  design
and sheet-fed  offset  commercial  printing  operations,  the laser printing and
fulfillment  operations  of the  Marketing  Services  Division  of DST's  Output
Solutions  segment,  and additional cash to approximately  equalize the value of
the OMS Shares to the Janus DST Shares  exchanged.  Based on the average closing
price of the Company's  common stock and exchange  agreement terms, the exchange
value used for the DST shares  received  in  connection  with the  Exchange  was
$34.50  per  share.  Under the terms of the Share  Exchange  Agreement,  the OMS
operations  business  was  valued at $115  million  and its  assets  at  closing
included additional cash of $999.4 million.

     The Share Exchange  Agreement  subjects DST to non-compete  provisions with
respect to certain  business  products  and services of OMS for a period of five
years from the Closing Date.

NEW CREDIT FACILITY

     In November  2003, DST entered into a $650 million  syndicated  bank credit
facility,  which  replaces its  existing  $315  million  syndicated  bank credit
facility.  The credit facility consists of a $400 million  three-year  revolving
line of credit  and a $250  million  three-year  term  note.  This  facility  is
guaranteed by a wholly owned subsidiary of DST and secured by certain marketable
securities  held by that  subsidiary.  DST used a portion  of this  facility  to
assist in financing the Exchange and intends to use the facility to fund working
capital needs.



                             SUMMARY OF THE OFFERING

     For a more  complete  description  of the terms of the  debentures  and the
common stock issuable upon conversion of the debentures, see "Description of the
Series A Debentures,"  "Description of the Series B Debentures" and "Description
of Capital Stock."

4.125% SERIES A CONVERTIBLE SENIOR DEBENTURES


Issuer..............DST Systems, Inc.

Debentures
Offered.............$540,000,000  aggregate  original principal amount of 4.125%
                    Series A Convertible Senior Debentures due 2023.

Maturity............August 15,  2023,  unless  earlier  redeemed,  purchased  or
                    converted.

Interest............The Series A debentures initially bear regular cash interest
                    at an annual rate equal to 4.125% on the original  principal
                    amount.  Regular cash interest will be payable  semiannually
                    in arrears on February  15 and August 15 of each year,  each
                    an interest payment date, beginning February 15, 2004, until
                    August 15, 2010.

                    Beginning  August 15,  2010,  we will not pay  regular  cash
                    interest  on the  Series A  debentures  prior  to  maturity.
                    Instead,  the  original  principal  amount of each  Series A
                    debenture  will increase  daily at a rate of 4.125% per year
                    to $1,700.28,  which is the full accreted  principal  amount
                    payable  at  maturity  for each  $1,000  original  principal
                    amount of Series A debentures. The accreted principal amount
                    of a debenture  will be  computed  from August 15, 2010 on a
                    semiannual  bond  equivalent  basis  using  a  360-day  year
                    composed of twelve 30-day months.

                    We will also pay contingent  interest and liquidated damages
                    on the Series A debentures under the circumstances described
                    in this prospectus.

Ranking.............The Series A debentures  are  unsecured  and rank equally in
                    right of payment  with all of our other  existing and future
                    unsecured  and  unsubordinated  indebtedness.  The  Series A
                    debentures  are  effectively  subordinated  to existing  and
                    future   indebtedness   and   other   liabilities   of   our
                    subsidiaries and to any of our secured  indebtedness.  As of
                    September 30, 2003, we had outstanding  approximately  $26.0
                    million  of  unsecured,   unsubordinated  indebtedness,  and
                    approximately $132.3 million of secured indebtedness.

Contingent
Interest............Under  certain   circumstances,   we  will  make  additional
                    payments  of  interest,  referred to in this  prospectus  as
                    "contingent interest."

                    For the period from August 20,  2010 to February  14,  2011,
                    and  thereafter  for  any  six-month  interest  period  from
                    February  15 to August 14 or  August 15 to  February  14, we
                    will pay contingent  interest for such period if the average
                    trading price of the Series A debentures  for the applicable
                    five trading-day  reference period equals or exceeds 120% of
                    the accreted principal amount of the Series A debentures. We
                    will pay  contingent  interest on the interest  payment date
                    immediately  following  the  applicable  six-month  interest
                    period. The amount of contingent interest payable per Series
                    A debenture in respect of any six-month interest period will
                    be equal to 0.19% of the average trading price of a Series A
                    debenture  for the  applicable  five  trading-day  reference



                    period.  The "five  trading-day  reference period" means the
                    five  trading   days  ending  on  the  second   trading  day
                    immediately   preceding  the  relevant   six-month  interest
                    period. For more information about contingent interest,  see
                    "Description  of  the  Series  A  Debentures  --  Contingent
                    Interest."

Conversion Rights...Holders may convert their Series A debentures into shares of
                    our common stock under any of the following circumstances:

                    o    during any calendar  quarter  after  September 30, 2003
                         (and only  during  such  calendar  quarter) if the last
                         reported sale price of our common stock for at least 20
                         trading  days  during  the  period  of  30  consecutive
                         trading  days  ending  on the last  trading  day of the
                         previous calendar quarter,  is greater than or equal to
                         120% of the applicable conversion price, or

                    o    subject to certain exceptions, during the five business
                         day  period  after  any  five  consecutive  trading-day
                         period in which the trading  price per $1,000  original
                         principal amount of Series A debentures for each day of
                         that  period  was less than 95% of the  product  of the
                         last  reported  sale price of our common  stock and the
                         conversion rate on each such day, or

                    o    if  the  Series  A  debentures  have  been  called  for
                         redemption, or

                    o    upon the occurrence of specified corporate transactions
                         described under "Description of the Series A Debentures
                         --  Conversion  Rights  --  Conversion  UpoN  Specified
                         Corporate Transactions."

                    For  each  $1,000  original  principal  amount  of  Series A
                    debentures surrendered for conversion,  you may convert your
                    Series A debentures into 20.3732 shares of our common stock.
                    This  represents an initial  conversion  price of $49.08 per
                    share of common stock. As described in this prospectus,  the
                    conversion  rate  may  be  adjusted  for  certain   reasons,
                    including for any cash dividend or distribution in excess of
                    $0.0025 per quarter, but it will not be adjusted for accrued
                    and unpaid cash interest,  including contingent interest and
                    liquidated   damages,  if  any,  or  for  accretion  of  the
                    principal  amount  of the  Series A  debentures  (except  as
                    otherwise described in this prospectus). Except as otherwise
                    described  in this  prospectus,  you  will not  receive  any
                    payment  representing  accrued  and  unpaid  cash  interest,
                    including contingent  interest,  if any, or accretion of the
                    principal  amount upon  conversion  of a Series A debenture;
                    however,  we will pay accrued and unpaid liquidated damages,
                    if any,  to the  conversion  date  in  accordance  with  the
                    registration rights agreement.

                    Upon conversion,  we will have the right to deliver, in lieu
                    of shares of our common stock, cash or a combination of cash
                    and shares of our common stock. See "Description of Series A
                    Debentures -- Conversion Rights -- Payment Upon Conversion."

                    Series A debentures called for redemption may be surrendered
                    for  conversion  prior  to  the  close  of  business  on the
                    business day immediately preceding the redemption date.

Optional
Redemption..........Prior to August 20, 2010,  the Series A debentures  will not
                    be  redeemable  by us. On or after August 20,  2010,  we may
                    redeem  for cash all or part of the Series A  debentures  at
                    any  time,  upon not less than 30 days nor more than 60 days
                    notice before the  redemption  date, by mail to the trustee,
                    the paying



                    agent and each  holder of Series A  debentures,  for a price
                    equal  to the  accreted  principal  amount  of the  Series A
                    debentures  to be redeemed  plus any accrued and unpaid cash
                    interest,   including  contingent  interest  and  liquidated
                    damages, if any, to the redemption date. See "Description of
                    the Series A Debentures-- Optional Redemption."

Purchase of Series
A Debentures by Us
at the Option of
the Holder..........Holders  have the right to require us to purchase all or any
                    portion of their  Series A  debentures  on August 15,  2010,
                    August  15,  2015 and  August 15,  2020.  In each case,  the
                    purchase  price  will be  equal  to the  accreted  principal
                    amount of the Series A debentures  to be purchased  plus any
                    accrued  and  unpaid  cash  interest,  including  contingent
                    interest and  liquidated  damages,  if any, to such purchase
                    date. See "Description of the Series A Debentures-- Purchase
                    of Series A Debentures by Us at the Option of the Holder."

                    We will pay cash for all Series A debentures so purchased on
                    August 15, 2010. For purchases on August 15, 2015 and August
                    15,  2020,  we may pay the  purchase  price for any Series A
                    debentures that we are required to purchase in cash,  common
                    stock, or any combination  thereof.  If we choose to pay all
                    or part of the purchase price in shares of common stock, the
                    shares  will be  valued  at 97.5% of the  market  price  (as
                    defined) of our common  stock as of the third  business  day
                    prior to the purchase date.

Fundamental
Change..............If  we  undergo  a  Fundamental  Change  (as  defined  under
                    "Description of the Series A Debentures-- Fundamental Change
                    Requires Purchase of Series A Debentures by Us at the Option
                    of the  Holder"),  holders  will  have the  right,  at their
                    option,  to require  us to  purchase  all or any  portion of
                    their Series A debentures.  The price we are required to pay
                    is equal to the  accreted  principal  amount of the Series A
                    debentures  to be  purchased  plus  accrued  and unpaid cash
                    interest,   including  contingent  interest  and  liquidated
                    damages, if any, to the Fundamental Change purchase date. We
                    may  choose  to pay the  purchase  price  for any  Series  A
                    debentures   that  you  require  us  to   purchase   upon  a
                    Fundamental  Change in cash,  shares of our common  stock or
                    any combination of cash and shares.  If we choose to pay all
                    or part of the purchase price in shares of common stock, the
                    shares  will be  valued  at 97.5% of the  market  price  (as
                    defined) of our common  stock as of the third  business  day
                    prior to the purchase date. See "Description of the Series A
                    Debentures--  Fundamental Change Requires Purchase of Series
                    A Debentures by Us at the Option of the Holder."

Use of Proceeds.....We will  not  receive  any  proceeds  from  the  sale by the
                    selling  security  holders of the  debentures  or the common
                    stock  issuable  upon  conversion   thereof.   See  "Use  of
                    Proceeds."

Material U.S.
Federal Income Tax
Considerations......Each holder  agrees in the  indenture  to treat the Series A
                    debentures as contingent  payment debt  instruments for U.S.
                    federal  income  tax  purposes.  As a  holder  of  Series  A
                    debentures, you will agree to accrue original issue discount
                    on a constant yield to maturity  basis at a rate  comparable
                    to the rate at which we  would  borrow  in a  noncontingent,
                    nonconvertible borrowing, 8.4% compounded semi-annually.  As
                    a result,  you will  generally  recognize  taxable income in
                    each year in excess of interest  payments  actually received
                    that year.  Additionally,  you will generally be required to
                    recognize ordinary income on



                    the gain, if any, realized on a sale,  exchange,  conversion
                    or redemption of the Series A debentures.  This gain will be
                    measured  by the sum of the  amount of any cash and the fair
                    market  value of any  shares  of our  common  stock or other
                    property received.  A summary of the U.S. federal income tax
                    consequences  of  ownership  and  disposition  of  Series  A
                    debentures  and  our  common  stock  is  described  in  this
                    prospectus  under the heading  "Material U.S. Federal Income
                    Tax  Considerations."  Owners  of the  Series  A  debentures
                    should  consult  their tax advisors as to the U.S.  federal,
                    state, local, or other tax consequences of acquiring, owning
                    and  disposing  of the  Series A  debentures  and our common
                    stock.

Trading.............The Series A debentures will not be listed on any securities
                    exchange or included in any automated  quotation  system. No
                    assurance can be given as to the development or liquidity of
                    any trading  market for the Series A debentures.  Our common
                    stock is listed  on the NYSE  under the  symbol  "DST."  The
                    Series A debentures  have been approved for  designation  in
                    the  PORTALsm   Market  of  the  National   Association   of
                    Securities Dealers, Inc.





3.625% SERIES B CONVERTIBLE SENIOR DEBENTURES


Issuer..............DST Systems, Inc.

Debentures
Offered.............$300,000,000  aggregate  original principal amount of 3.625%
                    Series B Convertible Senior Debentures due 2023.

Maturity............August 15,  2023,  unless  earlier  redeemed,  purchased  or
                    converted.

Interest............The Series B debentures initially bear regular cash interest
                    at an annual rate equal to 3.625% on the original  principal
                    amount.  Regular cash interest will be payable  semiannually
                    in arrears on February  15 and August 15 of each year,  each
                    an interest payment date, beginning February 15, 2004, until
                    August 15, 2008.

                    Beginning  August 15,  2008,  we will not pay  regular  cash
                    interest  on the  Series B  debentures  prior  to  maturity.
                    Instead,  the  original  principal  amount of each  Series B
                    debenture  will increase  daily at a rate of 3.625% per year
                    to $1,714.09,  which is the full accreted  principal  amount
                    payable  at  maturity  for each  $1,000  original  principal
                    amount of Series B debentures. The accreted principal amount
                    of a debenture  will be  computed  from August 15, 2008 on a
                    semiannual  bond  equivalent  basis  using  a  360-day  year
                    composed of twelve 30-day months.

                    We will also pay contingent  interest and liquidated damages
                    on the Series B debentures under the circumstances described
                    in this prospectus.

Ranking.............The Series B debentures  are  unsecured  and rank equally in
                    right of payment  with all of our other  existing and future
                    unsecured  and  unsubordinated  indebtedness.  The  Series B
                    debentures  are  effectively  subordinated  to existing  and
                    future   indebtedness   and   other   liabilities   of   our
                    subsidiaries and to any of our secured  indebtedness.  As of
                    September 30, 2003, we had outstanding  approximately  $26.0
                    million  of  unsecured,   unsubordinated  indebtedness,  and
                    approximately $132.3 million of secured indebtedness.

Contingent
Interest............Under  certain   circumstances,   we  will  make  additional
                    payments  of  interest,  referred to in this  prospectus  as
                    "contingent  interest."  For the period from August 20, 2008
                    to February  14,  2009,  and  thereafter  for any  six-month
                    interest  period from  February 15 to August 14 or August 15
                    to February  14, we will pay  contingent  interest  for such
                    period  if  the  average  trading  price  of  the  Series  B
                    debentures for the  applicable  five  trading-day  reference
                    period  equals or  exceeds  120% of the  accreted  principal
                    amount of the Series B  debentures.  We will pay  contingent
                    interest on the interest payment date immediately  following
                    the  applicable  six-month  interest  period.  The amount of
                    contingent  interest  payable  per  Series  B  debenture  in
                    respect of any  six-month  interest  period will be equal to
                    0.19% of the average  trading  price of a Series B debenture
                    for the applicable five trading-day  reference  period.  The
                    "five  trading-day  reference period" means the five trading
                    days ending on the second trading day immediately  preceding
                    the relevant six-month interest period. For more information
                    about contingent interest,  see "Description of the Series B
                    Debentures-- Contingent Interest."



Conversion Rights...Holders may convert their Series B debentures into shares of
                    our common stock under any of the following circumstances:

                    o    during any calendar  quarter  after  September 30, 2003
                         (and only  during  such  calendar  quarter) if the last
                         reported sale price of our common stock for at least 20
                         trading  days  during  the  period  of  30  consecutive
                         trading  days  ending  on the last  trading  day of the
                         previous calendar quarter,  is greater than or equal to
                         120% of the applicable conversion price, or

                    o    subject to certain exceptions, during the five business
                         day  period  after  any  five  consecutive  trading-day
                         period in which the trading  price per $1,000  original
                         principal amount of Series B debentures for each day of
                         that  period  was less than 95% of the  product  of the
                         last  reported  sale price of our common  stock and the
                         conversion rate on each such day; or

                    o    if  the  Series  B  debentures  have  been  called  for
                         redemption, or

                    o    upon the occurrence of specified corporate transactions
                         described under "Description of the Series B Debentures
                         --  Conversion  Rights  --  Conversion  Upon  Specified
                         Corporate Transactions."

                    For  each  $1,000  original  principal  amount  of  Series B
                    debentures surrendered for conversion,  you may convert your
                    Series B debentures into 20.3732 shares of our common stock.
                    This  represents an initial  conversion  price of $49.08 per
                    share of common stock. As described in this prospectus,  the
                    conversion  rate  may  be  adjusted  for  certain   reasons,
                    including for any cash dividend or distribution in excess of
                    $0.0025 per quarter, but it will not be adjusted for accrued
                    and  unpaid  interest,  including  contingent  interest  and
                    liquidated   damages,  if  any,  or  for  accretion  of  the
                    principal  amount  of the  Series B  debentures  (except  as
                    otherwise described in this prospectus). Except as otherwise
                    described  in this  prospectus,  you  will not  receive  any
                    payment  representing  accrued  and  unpaid  cash  interest,
                    including contingent  interest,  if any, or accretion of the
                    principal  amount upon  conversion  of a Series B debenture;
                    however,  we will pay accrued and unpaid liquidated damages,
                    if any,  to the  conversion  date  in  accordance  with  the
                    registration rights agreement.

                    Upon conversion,  we will have the right to deliver, in lieu
                    of shares of our common stock, cash or a combination of cash
                    and shares of our common stock. See "Description of Series B
                    Debentures -- Conversion Rights -- Payment Upon Conversion."

                    Series B debentures called for redemption may be surrendered
                    for  conversion  prior  to  the  close  of  business  on the
                    business day immediately preceding the redemption date.

Optional
Redemption..........Prior to August 20, 2008,  the Series B debentures  will not
                    be  redeemable  by us. On or after August 20,  2008,  we may
                    redeem  for cash all or part of the Series B  debentures  at
                    any  time,  upon not less than 30 days nor more than 60 days
                    notice before the  redemption  date, by mail to the trustee,
                    the paying agent and each holder of Series B debentures, for
                    a price equal to the accreted principal amount of the Series
                    B debentures to be redeemed plus any accrued and unpaid cash
                    interest,   including  contingent  interest  and  liquidated



                    damages, if any, to the redemption date. See "Description of
                    the Series B Debentures-- Optional Redemption."

Purchase of Series
B Debentures by Us
at the Option of
the Holder..........Holders  have the right to require us to purchase all or any
                    portion of their  Series B  debentures  on August 15,  2008,
                    August  15,  2013 and  August 15,  2018.  In each case,  the
                    purchase  price  will be  equal  to the  accreted  principal
                    amount of the Series B debentures  to be purchased  plus any
                    accrued  and  unpaid  cash  interest,  including  contingent
                    interest and  liquidated  damages,  if any, to such purchase
                    date. See "Description of the Series B Debentures-- Purchase
                    of Series B Debentures by Us at the Option of the Holder."

                    We will pay cash for all Series B debentures so purchased on
                    August 15, 2008. For purchases on August 15, 2013 and August
                    15,  2018,  we may pay the  purchase  price for any Series B
                    debentures that we are required to purchase in cash,  common
                    stock, or any combination  thereof.  If we choose to pay all
                    or part of the purchase price in shares of common stock, the
                    shares  will be  valued  at 97.5% of the  market  price  (as
                    defined) of our common  stock as of the third  business  day
                    prior to the purchase date.

Fundamental
Change..............If  we  undergo  a  Fundamental  Change  (as  defined  under
                    "Description of the Series B Debentures-- Fundamental Change
                    Requires Purchase of Series B Debentures by Us at the Option
                    of the  Holder"),  holders  will  have the  right,  at their
                    option,  to require  us to  purchase  all or any  portion of
                    their Series B debentures.  The price we are required to pay
                    is equal to the  accreted  principal  amount of the Series B
                    debentures  to be  purchased  plus  accrued  and unpaid cash
                    interest,   including  contingent  interest  and  liquidated
                    damages, if any, to the Fundamental Change purchase date. We
                    may  choose  to pay the  purchase  price  for any  Series  B
                    debentures   that  you  require  us  to   purchase   upon  a
                    Fundamental  Change in cash,  shares of our common  stock or
                    any combination of cash and shares.  If we choose to pay all
                    or part of the purchase price in shares of common stock, the
                    shares  will be  valued  at 97.5% of the  market  price  (as
                    defined) of our common  stock as of the third  business  day
                    prior to the purchase date. See "Description of the Series B
                    Debentures--  Fundamental Change Requires Purchase of Series
                    B Debentures by Us at the Option of the Holder."

Use of Proceeds.....We will  not  receive  any  proceeds  from  the  sale by the
                    selling  security  holders of the  debentures  or the common
                    stock  issuable  upon  conversion   thereof.   See  "Use  of
                    Proceeds."



Material U.S.
Federal Income Tax
Considerations......Each holder  agrees in the  indenture  to treat the Series B
                    debentures as contingent  payment debt  instruments for U.S.
                    federal  income  tax  purposes.  As a  holder  of  Series  B
                    debentures, you will agree to accrue original issue discount
                    on a constant yield to maturity  basis at a rate  comparable
                    to the rate at which we  would  borrow  in a  noncontingent,
                    nonconvertible borrowing, 8.4% compounded semi-annually.  As
                    a result,  you will  generally  recognize  taxable income in
                    each year in excess of interest  payments  actually received
                    that year.  Additionally,  you will generally be required to
                    recognize ordinary income on the gain, if any, realized on a
                    sale,  exchange,  conversion  or  redemption of the Series B
                    debentures.  This  gain will be  measured  by the sum of the
                    amount of any cash and the fair  market  value of any shares
                    of our common stock or other property received. A summary of
                    the U.S.  federal income tax  consequences  of ownership and
                    disposition  of Series B debentures  and our common stock is
                    described  in this  prospectus  under the heading  "Material
                    U.S.  Federal  Income  Tax  Considerations."  Owners  of the
                    Series B debentures  should consult their tax advisors as to
                    the U.S. federal, state, local, or other tax consequences of
                    acquiring,  owning and  disposing of the Series B debentures
                    and our common stock.

Trading.............The Series B debentures will not be listed on any securities
                    exchange or included in any automated  quotation  system. No
                    assurance can be given as to the development or liquidity of
                    any trading  market for the Series B debentures.  Our common
                    stock is listed  on the NYSE  under the  symbol  "DST."  The
                    Series B debentures  have been approved for  designation  in
                    the  PORTALsm   Market  of  the  National   Association   of
                    Securities Dealers, Inc.




                       RATIO OF EARNINGS TO FIXED CHARGES

     The following table shows the ratio of earnings to fixed charges for us and
our consolidated subsidiaries for each of the periods indicated.



                                                                                            
                                                                                                               NINE MONTHS
                                                                         YEARS ENDED DECEMBER 31,                 ENDED
                                                                         ------------------------             SEPTEMBER 30
                                                                 2002     2001      2000     1999     1998        2003
                                                                 ----     ----      ----     ----     ----    ------------
Ratio of earnings to fixed charges............................   9.0(3)   12.1(2)   12.1     11.6     7.5(1)      8.4(3)




     In calculating the earnings to fixed charges ratio, earnings are the sum of
earnings  before  income  taxes  and  equity  in  earnings  (losses)  of  equity
investees,  plus  fixed  charges.  Fixed  charges  are  the sum of  interest  on
indebtedness,  amortization of debt discount and expense and that portion of net
rental expense deemed representative of the interest component.

(1) In 1998, we recognized  $33.1 million in merger and integrated costs related
to the merger  with USCS  International,  Inc.  and the  acquisition  of Custima
International.

(2) In 2001,  we  recognized  a $32.8  million  pre-tax  gain on the sale of our
Portfolio Accounting Systems, which we refer to as PAS, business to State Street
Corporation, which we refer to as State Street.

(3) In 2002 and 2003, we recorded costs associated with facility  consolidations
in our Output Solutions segment of $12.0 million and $2.4 million, respectively.



                                  RISK FACTORS

     YOU SHOULD  CAREFULLY  CONSIDER THE RISKS  DESCRIBED BELOW BEFORE MAKING AN
INVESTMENT DECISION.  THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES FACING US.
ADDITIONAL  RISKS NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL
MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.

     OUR  BUSINESS,  FINANCIAL  CONDITION  OR  RESULTS  OF  OPERATIONS  COULD BE
MATERIALLY  ADVERSELY  AFFECTED BY ANY OF THESE RISKS.  THE TRADING PRICE OF THE
DEBENTURES AND OUR COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU
MAY LOSE ALL OR PART OF YOUR INVESTMENT.

     THIS PROSPECTUS ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND  UNCERTAINTIES.  OUR  ACTUAL  RESULTS  COULD  DIFFER  MATERIALLY  FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING  STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING  THE  RISKS  FACED  BY  US  DESCRIBED  BELOW  AND  ELSEWHERE  IN  THIS
PROSPECTUS.

                              RISKS RELATED TO DST

OUR BUSINESS  DEPENDS  LARGELY ON CERTAIN  INDUSTRIES.  EVENTS THAT IMPACT THESE
INDUSTRIES COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.

     We derive a substantial  proportion of our  consolidated  revenues from the
financial   services,   video/broadband   and   telecommunications   industries.
Consolidations  which would  decrease  the number of  potential  clients in such
businesses, events which would reduce the rate of growth in or negatively impact
such  businesses,   or  significant  declines  in  the  number  of  accounts  or
subscribers serviced by clients in such businesses could have a material adverse
effect on our results of operations.  In particular,  recent  consolidations and
business conditions in the telecommunications  industry have negatively affected
the results of our Output Solutions segment.

     Nearly 70% of our operating  revenues in fiscal year 2002 were derived from
mutual  fund/investment  management,  corporate securities  processing and other
financial  services  industries.  Approximately 43% of our operating revenues in
fiscal year 2002 were derived from the mutual fund industry  alone. As a result,
our results of operations have been adversely  affected by slower general market
activity,  reduced  trading  and  reduced  mutual  fund  investing.  A continued
deterioration  in consumer  confidence  and  resulting  protracted  slow down in
mutual fund investing and general market activity would have a material  adverse
effect on our results of operations.

IF WE ARE NOT SUCCESSFUL IN DEVELOPING TECHNOLOGY FOR USE BY EQUISERVE, INC., IT
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.

     On March 30, 2001, we acquired a controlling  interest in EquiServe Limited
Partnership, a corporate stock transfer agent that provides services principally
to publicly  held  corporations.  On August 1, 2001,  we purchased the remaining
interest in the business,  and EquiServe,  Inc., which we refer to as EquiServe,
is now our wholly owned  subsidiary.  We are in the process of implementing  and
enhancing a new stock transfer system,  which we refer to as Fairway,  that will
replace the existing systems used to maintain  corporate stock transfer records.
Success of the  acquisition  is dependent in part on  successful  completion  of
Fairway, successful conversion of all accounts from existing systems to Fairway,
and integration of our other technology and  infrastructure to support EquiServe
operations.   The  failure  to  successfully   complete   Fairway   development,
successfully  convert  the  existing  client base to  Fairway,  or  successfully
integrate our technology and  infrastructure  to support  EquiServe could have a
material adverse effect on our business and results of operations.



FAILURE OF OUR CLIENTS TO RENEW CONTRACTS,  CANCELLATION OF CONTRACTS OR REDUCED
UTILIZATION  BY OUR CLIENTS COULD HAVE A MATERIAL  ADVERSE EFFECT ON OUR RESULTS
OF OPERATIONS.

     Substantially  all of our  revenue is derived  from the sale of services or
products  under  long-term  contracts  with  our  clients.  We do not  have  the
unilateral  option to extend the terms of such contracts upon their  expiration.
In  addition,  certain  of  our  service  agreements  contain  "termination  for
convenience"  clauses that enable  clients to cancel the agreements by providing
written notice to us a specified number of days prior to the desired termination
date.  Such clauses are sometimes  coupled with a requirement for payment by the
client of a fee in the event of termination for convenience.  In addition, under
certain of our  agreements,  the fees we receive are  dependent  on  utilization
rates  for our  services.  The  failure  of  clients  to  renew  contracts,  the
cancellation of contracts or a reduction in usage by clients under any contracts
could  have  a  material  adverse  effect  on  our  results  of  operations.  In
particular,  our Output Solutions and Customer Management segments have suffered
recent  customer  losses as a result of industry  consolidation  and competitive
pressures.

OUR INDUSTRY IS VERY COMPETITIVE.  IF WE ARE UNABLE TO COMPETE  EFFECTIVELY,  IT
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.

     We,  our  subsidiaries  and  our  joint  ventures   encounter   significant
competition  for our services and products from other  third-party  providers of
similar  services  and  products  and from  potential  clients  who chose not to
outsource certain services we provide. We also compete for shareowner accounting
services with  brokerage  firms that perform  sub-accounting  services for their
customers  who  purchase  or sell  shares of mutual  funds for which we  provide
shareowner  recordkeeping  services.  Such  brokerage  firms  maintain  only  an
"omnibus"  account  with us  representing  the  aggregate  number of shares of a
mutual fund owned by the brokerage  firms'  customers,  thus  resulting in fewer
mutual fund shareowner accounts being maintained by us. In particular,  in light
of current  market  conditions,  a  significant  portion of our recent  revenues
growth is  attributable  to the  acquisition  of new clients.  As a result,  our
ability to  continue  to  increase  revenues  is  dependent  upon our ability to
maintain  and leverage our  competitive  advantages  and continue to attract new
clients. In addition,  our ability to compete  effectively  depends, in part, on
the availability of capital and other resources, and some of our competitors may
have greater  resources  and greater  access to capital than we do. Any of these
events could have a material  adverse  effect on our results of  operations.  In
addition,  competitive  factors could influence or alter our overall revenue mix
among our  various  business  segments,  which  would  affect  our gross  profit
margins.

WE MAY EXPERIENCE FLUCTUATIONS IN OUR QUARTERLY AND ANNUAL OPERATING RESULTS.

     Our quarterly and annual  operating  results may fluctuate  from quarter to
quarter and year to year depending on various factors, including but not limited
to the  unpredictable  nature of the markets in which our  products and services
are sold, general economic conditions,  acquisitions,  the impact of significant
start-up costs associated with initiating the delivery of contracted services to
new clients,  the hiring of additional staff, new product  development and other
expenses, introduction of new products by competitors and pricing pressures.

OUR FUTURE  SUCCESS  DEPENDS IN PART ON ADAPTING  OUR  PRODUCTS  AND SERVICES TO
CHANGES IN TECHNOLOGY AND IN THE MARKETS IN WHICH OUR CLIENTS OPERATE.  IF WE DO
NOT UPDATE OUR PRODUCTS  AND SERVICES OR DEVELOP NEW PRODUCTS AND SERVICES  THAT
ARE TIMELY DELIVERED TO AND WELL RECEIVED BY CLIENTS,  THERE COULD BE A MATERIAL
ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.

     Our clients use  computer  technology-based  products  and  services in the
complex and  rapidly  changing  markets in which they  operate.  The  technology
available to our clients,  such as methods for the electronic  dissemination  of
documents,  is expanding.  Our future success  depends in part on our ability to



continue to develop  and adapt our  technology,  on a timely and cost  effective
basis, to meet clients' needs and demands for the latest  technology.  There can
be no assurance that we will be able to respond adequately and in advance of our
competitors  to these  technological  demands or that more advanced  technology,
including  technology for the electronic  dissemination  of documents,  will not
reduce or replace the need for certain of our products and services.

     Similarly,   certain   of  our   clients   provide   services   related  to
communications  devices and/or the communications  industry.  The communications
industry,  and  wireless  communication  devices  in  particular,   are  rapidly
evolving.  The  future  success  of our  business  of  providing  administrative
services  to  clients  in the  communications  industry  depends  in part on our
ability to  continue  to develop  and adapt our  services,  on a timely and cost
effective basis, to meet clients' needs and demands for administrative  services
appropriate to the latest communications technology.

     We have expended  considerable  funds to develop  products to serve new and
rapidly changing  markets.  If such markets grow more slowly than anticipated or
our products and services fail to achieve market  acceptance,  this could have a
material adverse effect on our results of operations.

WE HAVE SIGNIFICANT EQUITY INVESTMENTS.  ANY SIGNIFICANT DECLINE IN THE VALUE OF
OUR EQUITY  INVESTMENTS  COULD HAVE A MATERIAL  ADVERSE EFFECT ON OUR RESULTS OF
OPERATIONS.

     We have a significant investment in available-for-sale equity securities of
other  companies.  The value of such  securities  depends on the market for such
securities and on changes in the markets in which such other companies  operate.
Any  significant  decline  in the value of our equity  investments  could have a
material adverse effect on our results of operations.  As of September 30, 2003,
the market value of such investments was $1,024.9 million.

WE OWN, LEASE AND MANAGE REAL ESTATE, AND RELY ON OUR PROCESSING FACILITIES. ANY
EVENT THAT CAUSES  LONG-TERM  DAMAGE TO THESE  FACILITIES  COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.

     Our  processing  services are  primarily  dependent on  facilities  housing
central computer operations or in which information, image or bill and statement
processing  occur.  Our mutual fund full service,  corporate  stock transfer and
insurance,  warranty and debt protection  administrative  service businesses are
dependent on call centers in various locations. In addition, we lease and manage
real estate.  A natural  disaster,  terrorist act, or other calamity that causes
long-term  damage to our facilities,  or economic or other events  impacting the
real estate markets in which we own,  lease or manage real estate,  could have a
material adverse effect on our results of operations.

WE RELY ON  INSURERS  IN  CONNECTION  WITH  THE  INSURANCE,  WARRANTY  AND  DEBT
PROTECTION  SERVICES  WE PROVIDE TO CERTAIN  CLIENTS.  OUR  FAILURE TO  MAINTAIN
RELATIONSHIPS  WITH THESE INSURERS  COULD HAVE A MATERIAL  ADVERSE EFFECT ON OUR
RESULTS OF OPERATIONS.

     Currently,  our business of providing administrative services in connection
with  the  insurance,  warranty  and debt  protection  services  of our  clients
significantly depends upon our business relationships with one or more insurance
companies  that  provide  coverage  necessary  for  the  clients'  products  and
services.  Termination  of these  business  relationships  could have a material
adverse  effect on our  results  of  operations  if we were  unable  to  arrange
alternative sources of coverage.



OUR  BUSINESS  IS  DEPENDENT  ON  SKILLED  TECHNICAL  PERSONNEL  AND OUR  SENIOR
MANAGEMENT.  IF WE ARE  UNABLE TO  RETAIN OR  ATTRACT  QUALIFIED  TECHNICAL  AND
MANAGEMENT PERSONNEL,  IT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF
OPERATIONS.

     Our operations and the continuing  implementation  of our business strategy
depend  upon the  efforts of our  technical  personnel  and  senior  management.
Recruiting and retaining capable personnel, particularly those with expertise in
the types of computer  hardware  and  software  utilized by us, are vital to our
success. There is substantial competition for qualified technical and management
personnel, and there can be no assurance that we will be able to attract or keep
the qualified personnel we require.  The loss of key personnel or the failure to
hire qualified  personnel could have a material  adverse effect on our financial
condition and results of operations.

OUR BUSINESS  STRATEGY  INCLUDES A RELIANCE ON JOINT  VENTURES.  WE ARE NOT IN A
POSITION TO EXERCISE  CONTROL OVER THESE JOINT VENTURES  WITHOUT THE CONCURRENCE
OF OUR JOINT VENTURE PARTNERS.

     Our business  strategy for growth and expansion  includes reliance on joint
ventures.  We  derive  part of our net  income  from our pro  rata  share in the
earnings of these unconsolidated  companies.  Although we own significant equity
interests in such companies and have representation on their boards of directors
or  governance  structures,  we are not in a position to exercise  control  over
their operations,  strategies or financial  decisions without the concurrence of
our equity  partners.  Our equity  interests in Boston  Financial Data Services,
Inc., which we refer to as BFDS, Argus Health Systems,  Inc., and  International
Financial Data Services  Limited  Partnership and  International  Financial Data
Services  Limited,  which we refer to  collectively  as  IFDS,  are  subject  to
contractual buy/sell arrangements that may restrict our ability to fully dispose
of our  interest in these joint  ventures and that under  certain  circumstances
permit such joint venture partners to purchase our interest.

WE AND CERTAIN OF OUR  SUBSIDIARIES,  JOINT  VENTURES AND CLIENTS ARE SUBJECT TO
REGULATION  BY  VARIOUS   REGULATORY   AGENCIES.   IF  ANY  OF  OUR   REGULATORY
AUTHORIZATIONS  OR THOSE OF OUR SUBSIDIARIES AND JOINT VENTURES ARE SUSPENDED OR
REVOKED,  IT COULD  HAVE AN ADVERSE  EFFECT ON OUR  RESULTS  OF  OPERATIONS.  IN
ADDITION,  REGULATORY  CHANGES THAT ADVERSELY  AFFECT OUR CLIENTS,  COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.

     As registered transfer agents, DST, our subsidiary, EquiServe, our indirect
subsidiary, EquiServe Trust Company, N.A., which we refer to as EquiServe Trust,
our joint venture, BFDS, and BFDS' subsidiary, National Financial Data Services,
Inc., which we refer to collectively as our domestic  transfer agent businesses,
are  subject to the  Exchange  Act and to the rules and  regulations  of the SEC
under the  Exchange Act which  require  them to register  with the SEC and which
impose  on  them  recordkeeping  and  reporting  requirements.  Certain  of  the
operations and records of our domestic  transfer agent businesses are subject to
examination by the SEC and, as providers of services to financial  institutions,
to examination by bank and thrift  regulatory  agencies.  In connection with its
transfer  agency  business,  EquiServe  Trust serves as a limited  purpose trust
company  subject to regulation of the Office of the Comptroller of the Currency.
In addition,  companies wholly owned by IFDS, which we refer to as IFDS transfer
agent businesses,  are subject to regulation of similar  regulatory  agencies in
other countries.  Any of the domestic transfer agent businesses or IFDS transfer
agent businesses could have its regulatory  authorizations  suspended or revoked
if it were to  materially  violate  applicable  regulations,  which could have a
material adverse effect on our results of operations.

     Similarly,  certain  of  our  subsidiaries  involved  in  the  business  of
providing  administrative  services in  connection  with  insurance and warranty
products  are  licensed  insurance  agencies or licensed or  registered  service
warranty  providers and, as such, are subject to applicable  state insurance and
service  warranty  laws and to  related  rules and  regulations.  These laws and
regulations  impose  on  them  recordkeeping,  reporting,



financial and other  requirements  and  generally  regulate the conduct of their
business operations. In the event any of the subsidiaries materially violate any
of these applicable laws or regulations,  their regulatory  authorizations could
be  suspended  or  revoked,  which could have a material  adverse  effect on our
results of operations.

     Our existing and potential clients are subject to extensive regulation, and
certain of our revenue opportunities may depend on continued deregulation in the
world-wide  communications  industry.  Certain  of our  clients  are  subject to
regulations  governing  the  privacy  and use of  customer  information  that is
collected  and managed by our products  and  services.  Regulatory  changes that
adversely  affect  our  existing  and  potential  clients  could have a material
adverse effect on our results of operations.

OUR FAILURE TO  ADEQUATELY  PROTECT OUR  PROPRIETARY  RIGHTS OR ANY  SIGNIFICANT
THIRD PARTY INTELLECTUAL  PROPERTY  INFRINGEMENT  CLAIMS AGAINST US COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.

     We rely on a  combination  of  copyright,  trade  secret and  patent  laws,
nondisclosure  agreements,   and  other  contractual  measures  to  protect  our
proprietary  technology.  There can be no assurance  that these measures will be
adequate to protect our proprietary rights. There can be no assurance that third
parties will not assert  infringement  claims  against us or our clients or that
such  claims,  if  brought,  would  not have a  material  adverse  effect on our
business and results of operations.

IF WE FAIL TO PROTECT THE SECURITY OF PROPRIETARY CUSTOMER INFORMATION, IT COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.

     Our  business   involves  the  electronic   recordkeeping   of  proprietary
information of our customers,  and of the clients of such customers. We maintain
systems  and  procedures  to  protect  against   unauthorized   access  to  such
information and against computer viruses, which we refer to as security systems.
However,  there is no  guarantee  that these  security  systems are  adequate to
protect  against all security  breaches.  Rapid  advances in technology  make it
impossible  to  anticipate  or be  prepared to address  all  potential  security
threats.  A material breach of our security systems could cause our customers to
reconsider use of our services and products, affect our reputation, or otherwise
have a material adverse effect on our business and results of operations.

CERTAIN  PROVISIONS OF OUR CERTIFICATE OF  INCORPORATION  AND OUR  STOCKHOLDERS'
RIGHTS PLAN COULD DELAY, DETER OR PREVENT A CHANGE OF CONTROL OF DST, EVEN IF IT
WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.  IN ADDITION, CERTAIN CLIENT AGREEMENTS
AND JOINT VENTURE  AGREEMENTS HAVE PROVISIONS  TRIGGERING  CERTAIN RIGHTS OF THE
OTHER PARTY IN THE EVENT OF A CHANGE IN CONTROL OF DST.

     Some  provisions of our  certificate  of  incorporation  could make it more
difficult  for a third  party to acquire  control  of us,  even if the change of
control  would be  beneficial  to certain  stockholders.  We have also adopted a
stockholders'  rights  plan  which  could  delay,  deter or  prevent a change in
control of DST. A few of our client agreements allow the client to terminate its
agreement  or to  obtain  rights  to use our  software  used in  processing  the
client's data in the event of an acquisition or change of control of DST. In the
event of a change  in  control  of DST (as  defined  in the  applicable  plan or
agreement),  vesting of awards  (including stock options) under our stock option
and performance  award plan will be automatically  accelerated,  certain limited
rights  related  to  such  options  will  become  exercisable,   and  employment
continuation  provisions  will apply under the employment  agreements of certain
executive officers.  Certain of our joint venture agreements allow other parties
to the joint venture to buy our joint venture interests in the event of a change
of control of DST.



                         RISKS RELATED TO THE DEBENTURES



WE HAVE A  SUBSTANTIAL  AMOUNT  OF  INDEBTEDNESS  AND OUR  INDEBTEDNESS  FURTHER
INCREASED UPON  CONSUMMATION OF THE EXCHANGE.  THIS COULD  ADVERSELY  AFFECT OUR
FINANCIAL PERFORMANCE AND IMPACT OUR ABILITY TO MAKE PAYMENTS ON THE DEBENTURES.

     Since  completion  of the  private  offering of the  debentures,  we have a
substantial  amount of  indebtedness.  In  addition,  our  indebtedness  further
increased upon  consummation of the Exchange.  Our level of  indebtedness  could
have important consequences to the holders of the debentures. For example, it:

     o    may limit our  ability  to obtain  additional  financing  for  working
          capital, capital expenditures or general corporate purposes;

     o    will  require us to  dedicate a  substantial  portion of our cash flow
          from  operations  to the  payment of  principal  and  interest  on our
          indebtedness,  reducing the funds  available to us for other  purposes
          including  expansion through  acquisitions,  capital  expenditures and
          expansion of our product offerings; and

     o    may limit our  flexibility  to adjust to changing  business and market
          conditions  and  make us more  vulnerable  to a  downturn  in  general
          economic conditions as compared to our competitors.

     Our ability to make scheduled payments or to refinance our obligations with
respect  to  our  indebtedness  will  depend  on  our  financial  and  operating
performance which, in turn, is subject to prevailing  economic conditions and to
financial, business and other factors beyond our control.


OUR STOCK PRICE HAS BEEN VOLATILE  HISTORICALLY AND MAY CONTINUE TO BE VOLATILE.
THE PRICE OF OUR COMMON STOCK,  AND THEREFORE THE PRICE OF THE  DEBENTURES,  MAY
FLUCTUATE  SIGNIFICANTLY,  WHICH MAY MAKE IT DIFFICULT FOR HOLDERS TO RESELL THE
DEBENTURES  OR THE SHARES OF OUR COMMON STOCK  ISSUABLE  UPON  CONVERSION OF THE
DEBENTURES WHEN DESIRED OR AT ATTRACTIVE PRICES.

     The  market  price for our  common  stock has been and may  continue  to be
volatile. We expect our stock price to be subject to fluctuations as a result of
a variety of  factors,  including  factors  beyond our  control.  These  factors
include:

     o    quarterly fluctuations in our operating and financial results;

     o    changes  in  financial  estimates  and  recommendations  by  financial
          analysts;

     o    fluctuations  in  the  stock  price  and  operating   results  of  our
          competitors;

     o    consolidations, dispositions, acquisitions and financings; and

     o    general conditions in the industries in which we operate.

     In addition,  the stock markets in general,  including  the NYSE,  recently
have experienced significant price and trading fluctuations.  These fluctuations
have resulted in  volatility  in the market prices of securities  that often has
been unrelated or  disproportionate to changes in operating  performance.  These
broad market  fluctuations  may affect adversely the market prices of our common
stock.  In addition,  sales of substantial  amounts of common stock by us in the
market, or the perception that such sales may occur, could also affect the price
of our common stock.  Because the debentures are convertible  into shares of our
common stock,  volatility or depressed  prices for our common stock could have a
similar  effect  on the  trading  price of the




debentures.  This may result in greater  volatility in the trading prices of the
debentures than would be expected for nonconvertible debt securities.

     The price of our common  stock could also be affected by possible  sales of
our common stock by investors who view the debentures as a more attractive means
of equity participation in DST and by hedging or arbitrage trading activity that
we expect to develop involving our common stock. The hedging or arbitrage could,
in turn, affect the trading prices of the debentures.

THE  CONDITIONAL  CONVERSION  FEATURE  OF THE  DEBENTURES  COULD  RESULT  IN YOU
RECEIVING  LESS THAN THE VALUE OF THE COMMON STOCK INTO WHICH A DEBENTURE  WOULD
OTHERWISE BE CONVERTIBLE.

     The  debentures  are  convertible  into shares of our common  stock only if
specified  conditions are met. If the specific conditions for conversion are not
met, you will not be able to convert your debentures, and you may not be able to
receive the value of the common stock into which the debentures  would otherwise
be convertible.

CONVERSION  OF THE  DEBENTURES  WILL DILUTE THE  OWNERSHIP  INTEREST OF EXISTING
STOCKHOLDERS, INCLUDING HOLDERS WHO HAVE PREVIOUSLY CONVERTED THEIR DEBENTURES.

     The conversion of some or all of the  debentures  will dilute the ownership
interests of existing stockholders. Any sales in the public market of the common
stock issuable upon such conversion  could adversely  affect  prevailing  market
prices of our common stock.  In addition,  the existence of the  debentures  may
encourage  short selling by market  participants  because the  conversion of the
debentures could depress the price of our common stock.


AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THE DEBENTURES.

     The  debentures are a new issue of securities  with no established  trading
market and will not be listed on any securities exchange. Certain of the initial
purchasers have informed us that they intend to make a market in the debentures.
However,  they are not  obligated  to do so and may  cease  their  market-making
activities at any time. In addition, such market-making activity will be subject
to limits  imposed by the  Securities Act and the Exchange Act. We cannot assure
you that an active trading  market for the debentures  will develop or as to the
liquidity or  sustainability  of any such  market,  or the ability of holders to
sell their  debentures  or the price at which holders of the  debentures  may be
able to sell their  debentures.  If an active market for the debentures fails to
develop or be sustained, the trading prices of the debentures could be adversely
affected. Future trading prices of the debentures will also depend on many other
factors,  including,  among other things,  prevailing interest rates, the market
for similar securities, the price of our common stock, our performance and other
factors.

WE MAY NOT HAVE THE  ABILITY  TO RAISE  THE  FUNDS  NECESSARY  TO  PURCHASE  THE
DEBENTURES UPON A FUNDAMENTAL  CHANGE OR OTHER PURCHASE DATE, AS REQUIRED BY THE
INDENTURE GOVERNING THE DEBENTURES.

     Holders  of the  Series A  debentures  may  require  us to  purchase  their
debentures on August 15, 2010, August 15, 2015 and August 15, 2020,  although we
may pay the purchase  price in shares of our common stock after August 15, 2010.
Holders of the Series B debentures may require us to purchase  their  debentures
on August 15, 2008, August 15, 2013 and August 15, 2018, although we may pay the
purchase price in shares of our common stock after August 15, 2008. In addition,
holders of the debentures may also require us to purchase their  debentures upon
a Fundamental  Change as described under "Description of the Series A Debentures
--  Fundamental  Change  Requires  Purchase of Series A Debentures  by Us at the
Option of the Holder" and "Description of the Series B Debentures -- Fundamental
Change  Requires  Purchase  of Series B  Debentures  by Us at the  Option of the
Holder." A Fundamental Change also may constitute an event of default under, and
result in the  acceleration of the maturity of, our other  indebtedness or other



indebtedness that we may incur in the future. In addition,  our revolving credit
facility  restricts  the  repurchase of the  debentures  for cash or stock if an
event of default has occurred or would occur under our revolving credit facility
as a result of such repurchase.  In addition, we cannot assure you that we would
have sufficient financial resources,  or would be able to arrange financing,  to
pay the purchase price for the debentures tendered by holders.  Failure by us to
purchase the  debentures  when  required will result in an event of default with
respect to the debentures.

YOU SHOULD  EVALUATE  THE U.S.  FEDERAL  INCOME TAX  CONSEQUENCES  OF OWNING THE
DEBENTURES.

     Each holder agrees in the  indenture to treat the  debentures as contingent
payment debt  instruments for U.S.  federal income tax purposes,  subject to the
Treasury  regulations  governing  contingent payment debt instruments,  which we
refer to as the CPDI  regulations,  and to be bound by our  application of these
regulations to the debentures,  including our  determinations  of the comparable
yield and projected  payment schedule (as described under "Material U.S. Federal
Income Tax Considerations"). Under the CPDI regulations, you will be required to
accrue  interest on a constant yield to maturity  basis at a rate  comparable to
the rate at which we would  borrow in a  non-contingent,  non-convertible  fixed
rate borrowing (subject to certain adjustments). As a result, you will generally
recognize  taxable income in excess of cash received  while your  debentures are
outstanding.  In  addition,  you will  recognize  ordinary  income  upon a sale,
exchange,  conversion or  redemption of your  debentures at a gain. In computing
such gain,  the amount  realized by you will  include the amount of any cash and
the fair  market  value of any  shares  of our  common  stock or other  property
received.  The  proper  application  of the  CPDI  regulations  to a  holder  of
debentures  is uncertain in a number of respects,  and no assurance can be given
that the Internal Revenue Service, which we refer to as the IRS, will not assert
that the  debentures  should  be  treated  differently  or that the IRS will not
prevail. A different treatment could affect the amount,  timing and character of
income,  gain  or  loss  in  respect  of an  investment  in the  debentures.  In
particular,  it might be determined  that a holder should have accrued  interest
income at a higher or lower rate, should not have recognized income or gain upon
conversion, or should have recognized capital gain upon a taxable disposition of
the  debentures.  To understand  how this may affect you, you should seek advice
from your own tax advisor prior to purchasing the debentures. See "Material U.S.
Federal Income Tax Considerations."

THE DEBENTURES ARE EFFECTIVELY  SUBORDINATED TO EXISTING AND FUTURE INDEBTEDNESS
AND OTHER LIABILITIES OF OUR SUBSIDIARIES.

     We derive some of our revenues from,  and hold some of our assets  through,
our  subsidiaries.  As a result,  we will  depend in part on  distributions  and
advances from our  subsidiaries in order to meet our payment  obligations  under
the debentures and our other  obligations.  In general,  these  subsidiaries are
separate and distinct  legal  entities  and will have no  obligation  to pay any
amounts due on our debt securities,  including the debentures,  or to provide us
with funds for our payment  obligations,  whether by  dividends,  distributions,
loans or  otherwise.  Our right to receive any assets of any  subsidiary  in the
event of a bankruptcy or liquidation of the subsidiary,  and therefore the right
of  our  creditors  to  participate   in  those  assets,   will  be  effectively
subordinated  to the  claims of that  subsidiary's  creditors,  including  trade
creditors. In addition, even if we were a creditor of any subsidiary, our rights
as a creditor  would be  subordinated  to any  indebtedness  of that  subsidiary
senior to that held by us, including  secured  indebtedness to the extent of the
assets securing such indebtedness.

IF YOU HOLD  DEBENTURES,  YOU WILL NOT BE ENTITLED TO ANY RIGHTS WITH RESPECT TO
OUR COMMON  STOCK,  BUT YOU WILL BE SUBJECT TO ALL CHANGES  MADE WITH RESPECT TO
OUR COMMON STOCK.

     If you hold debentures, you will not be entitled to any rights with respect
to our common stock (including,  without limitation, voting rights and rights to
receive any dividends or other  distributions on our common stock), but you will
be subject to all changes  affecting the common stock. You will only be entitled
to rights on our common  stock if and when we deliver  shares of common stock to
you upon conversion or




purchase of your  debentures.  For  example,  in the event that an  amendment is
proposed to our certificate of  incorporation  or bylaws  requiring  stockholder
approval and the record date for determining the stockholders of record entitled
to vote on the amendment occurs prior to your conversion, or our repurchase with
stock,  of  debentures,  you  will  not be  entitled  to vote on the  amendment,
although  you  will  nevertheless  be  subject  to any  changes  in the  powers,
preferences or special rights of our common stock.

WE MAY ISSUE  ADDITIONAL  SHARES OF COMMON  STOCK  AND  THEREBY  MATERIALLY  AND
ADVERSELY AFFECT THE PRICE OF OUR COMMON STOCK.

     We are not restricted from issuing  additional common stock during the life
of the  debentures  and have no obligation  to consider  your  interests for any
reason.  If we issue  additional  shares of common stock,  it may materially and
adversely  affect the price of our common  stock and, in turn,  the price of the
debentures.

THE  CONVERSION  RATE OF THE  DEBENTURES  MAY NOT BE ADJUSTED  FOR ALL  DILUTIVE
EVENTS.

     The conversion  rate of the debentures is subject to adjustment for certain
events  including,  but not limited to, the  issuance of stock  dividends on our
common  stock,  the  issuance of certain  rights or  warrants,  subdivisions  or
combinations  of  our  common  stock,  certain  distributions  of  assets,  debt
securities,  capital  stock or cash to holders of our common  stock and  certain
issuer tender or exchange  offers as described  under  "Description  of Series A
Debentures -- Conversion Rights -- Conversion Rate Adjustments" and "Description
of Series B Debentures -- Conversion Rights -- Conversion Rate Adjustments." The
conversion  rate will not be adjusted  for other  events,  such as a third party
tender or  exchange  offer or an  issuance  of common  stock for cash,  that may
adversely affect the trading price of the debentures or the common stock.  There
can be no  assurance  that an event  that  adversely  affects  the  value of the
debentures,  but does not result in an adjustment to the conversion  rate,  will
not occur.

THE DEBENTURES DO NOT RESTRICT OUR ABILITY TO INCUR  ADDITIONAL  INDEBTEDNESS OR
TO TAKE OTHER ACTIONS THAT COULD NEGATIVELY IMPACT HOLDERS OF THE DEBENTURES.

     We are not  restricted  under the terms of the indenture and the debentures
from incurring additional indebtedness, including secured debt. In addition, the
limited  covenants  applicable to the debentures do not require us to achieve or
maintain any minimum  financial  results  relating to our financial  position or
results  of  operations.   Our  ability  to   recapitalize,   incur   additional
indebtedness  and take a number of other  actions  that are not  limited  by the
terms of the indenture and the  debentures  could have the effect of diminishing
our ability to make payments on the debentures when due. In addition, we are not
restricted from  repurchasing  subordinated  indebtedness or common stock by the
terms of the indenture and the debentures.  If we issue other debt securities in
the future, our debt service obligations will increase.



                                 USE OF PROCEEDS

     We will not receive  any  proceeds  from the sale by the  selling  security
holders of the  debentures or the common stock  issuable upon  conversion of the
debentures.  Please read  "Selling  Security  Holders" for a list of the persons
receiving  proceeds  from the sale of the  debentures or the  underlying  common
stock.



                     DESCRIPTION OF THE SERIES A DEBENTURES

     We issued $540,000,000 aggregate principal amount of Series A debentures in
a private  placement  on August 12, 2003.  The Series A  debentures  were issued
under an indenture between us and JPMorgan Chase Bank, as trustee. Copies of the
indenture are available from us upon request.  The following  description of the
Series A debentures  is only a summary and is not intended to be  comprehensive.
For purposes of this  "Description of the Series A Debentures," the terms "DST,"
"we," "our,"  "ours" and "us" refer only to DST Systems,  Inc. and not to any of
our subsidiaries.

GENERAL

     The Series A debentures  are limited to $540 million in aggregate  original
principal amount.  The Series A debentures are issued in registered form without
coupons only in denominations  of $1,000 original  principal amount and integral
multiples  of $1,000.  We use the term  "Series A  debenture"  in this  offering
memorandum  to  refer to each  $1,000  original  principal  amount  of  Series A
debentures.

     The Series A  debentures  will mature on August 15,  2023.  On the maturity
date of the Series A debentures,  a holder will receive $1,700.28,  the accreted
principal  amount at maturity of a Series A  debenture.  The Series A debentures
will bear regular  cash  interest at an annual rate equal to 4.125% per annum on
the original principal amount from August 12, 2003, or from the most recent date
to which interest has been paid or provided for,  until August 15, 2010.  During
such period, interest will be payable semiannually in arrears on February 15 and
August 15 of each year, each an interest  payment date,  beginning  February 15,
2004,  to the person in whose name a Series A  debenture  is  registered  at the
close of business on the February 1 or August 1, as the case may be, immediately
preceding the relevant  interest  payment  date,  each of which we refer to as a
"record date."

     Beginning  August 15, 2010, we will not pay regular cash interest  prior to
maturity. Instead, the original principal amount of each Series A debenture will
increase  daily at a rate of 4.125% per year, to produce the accreted  principal
amount at maturity. Prior to August 15, 2010, the accreted principal amount of a
Series A debenture  will be the  original  principal  amount,  and  beginning on
August 15, 2010, the accreted  principal amount will be computed on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months.

     If any date on which regular cash interest is payable,  the maturity  date,
or any  redemption  date or purchase date  (including  upon the  occurrence of a
Fundamental  Change,  as  described  below) is not a business  day,  we will pay
interest on the next  business day (without any interest or other payment due on
the delay).  Regular cash interest on the Series A debentures will be calculated
on the basis of a 360-day year  consisting  of twelve  30-day  months.  The term
"business  day," when used with respect to any place of payment for the Series A
debentures,  means a day other than a Saturday or a Sunday, a legal holiday or a
day on which banking  institutions  or trust  companies in that place of payment
are authorized or obligated by law to close.

     In  addition,  we will pay  contingent  interest on the Series A debentures
under the  circumstances  described  below under " --  Contingent  Interest" and
liquidated damages as set forth in the registration rights agreement.

     Regular cash interest on Series A debentures will accrue from and including
the date of  issue or from and  including  the  last  date in  respect  of which
interest has been paid,  as the case may be, to, but  excluding,  the earlier of
(i) August 15, 2010 and (ii) the interest payment date or a purchase date upon a
Fundamental Change, as the case may be.



     Holders may present Series A debentures for conversion at the office of the
conversion  agent  and may  present  Series A  debentures  for  exchange  or for
registration  of  transfer  at the  office or agency  maintained  by us for that
purpose in the Borough of Manhattan,  The City of New York. We will not charge a
service  charge  for any  exchange  or  registration  of  transfer  of  Series A
debentures. However, we may require payment of a sum sufficient to cover any tax
or other  governmental  charge  payable  for the  registration  of  transfer  or
exchange.  The trustee will serve as the initial conversion agent, paying agent,
registrar and transfer  agent for the Series A  debentures.  At any time, we may
designate additional paying agents and transfer agents. However, at all times we
will be required to maintain a paying agent and transfer  agent for the Series A
debentures in the Borough of Manhattan, The City of New York.

     Any monies  deposited  with the trustee or any paying agent or then held by
us in trust for the payment of  principal  and  interest  (including  contingent
interest and liquidated  damages, if any) on the Series A debentures that remain
unclaimed  for two years  after the date the  payments  became due and  payable,
shall,  at our request,  be repaid to us or released from trust,  as applicable,
and the holder of the Series A debenture  shall  thereafter  look,  as a general
unsecured creditor, only to us for payment thereof.

RANKING

     The  Series A  debentures  are our  direct,  unsecured  and  unsubordinated
obligations.  The Series A debentures  rank equally in right of payment with all
of our other existing and future unsecured and unsubordinated  indebtedness.  In
addition,  the  Series A  debentures  effectively  rank  junior  to any  secured
indebtedness  that we may  incur  to the  extent  of the  assets  securing  such
indebtedness.   We  currently  conduct  part  of  our  operations   through  our
subsidiaries.  Claims  of  creditors  of  those  subsidiaries,  including  trade
creditors and secured  creditors,  will  generally have a claim to the assets of
our  subsidiaries  that is  superior to the claims of our  creditors,  including
holders of the Series A debentures.

     As of September 30, 2003, we had outstanding approximately $26.0 million of
unsecured,  unsubordinated indebtedness ranking equally in right of payment with
the  Series A  debentures,  and  approximately  $13.4 of  secured  indebtedness,
excluding   indebtedness  of  subsidiaries.   As  of  September  30,  2003,  our
subsidiaries had approximately $127.4 million of indebtedness  outstanding,  all
of which ranks  structurally  senior to the Series A  debentures.  The indenture
does not limit the amount of indebtedness we or our subsidiaries may incur.

CONTINGENT INTEREST

     For the period from August 20, 2010 to February  14, 2011,  and  thereafter
for any  six-month  interest  period  measured  from February 15 to August 14 or
August 15 to February 14, we will pay contingent interest if the average trading
price per Series A  debenture  for the  applicable  five  trading-day  reference
period  equals or exceeds  120% of the accreted  principal  amount of a Series A
debenture.  The "five trading-day  reference period" means the five trading days
ending on the second trading day  immediately  preceding the relevant  six-month
interest period.

     The amount of contingent interest payable per Series A debenture in respect
of the period from August 20, 2010 to February 14, 2011,  and thereafter for any
six-month  interest  period will be equal to 0.19% of the average  trading price
per Series A debenture for the applicable five trading-day reference period.

     The record date and payment date for contingent  interest,  if any, will be
the same as the  regular  record date and payment  date,  respectively,  for the
semi-annual interest payments on the Series A debentures.



     The "trading price" is as defined under "-- Conversion Rights -- Conversion
Upon  Satisfaction  of Trading Price  Condition,"  provided that if at least one
required bid for the Series A debentures  is not obtained by the trustee,  or in
our  reasonable  judgment the bid quotations are not indicative of the secondary
market value of the Series A debentures,  then the trading price of the Series A
debentures  will equal (a) the then  applicable  conversion rate of the Series A
debentures multiplied by (b) the average of the last reported sale prices of our
common stock for the applicable five trading-day reference period.

     The "last  reported  sale price" of our common  stock on any date means the
closing  sale price per share (or,  if no closing  sale price is  reported,  the
average  of the bid and asked  prices or, if more than one in either  case,  the
average  of the  average  bid and the  average  asked  prices)  on that  date as
reported in composite transactions for the principal U.S. securities exchange on
which our common stock is traded or, if our common stock is not listed on a U.S.
national or regional  securities  exchange,  as reported by the Nasdaq  National
Market.  The last reported sale price will be  determined  without  reference to
after-hours or extended  market  trading.  If our common stock is not listed for
trading on a U.S. national or regional  securities  exchange and not reported by
the Nasdaq  National Market on the relevant date, the "last reported sale price"
will be the last quoted bid for our common stock in the over-the-counter  market
on the  relevant  date as reported by the National  Quotation  Bureau or similar
organization.  If our common  stock is not so quoted,  the "last  reported  sale
price"  will be the  average of the  midpoint of the last bid and ask prices for
our common  stock on the  relevant  date from each of at least three  nationally
recognized independent investment banking firms selected by us for this purpose.

     "Trading  day" means a day during  which  trading in  securities  generally
occurs on the NYSE or, if our  common  stock is not  listed on the NYSE,  on the
principal  other U.S.  national  or  regional  securities  exchange on which our
common  stock is then  listed  or, if our  common  stock is not listed on a U.S.
national or regional securities  exchange,  on the Nasdaq National Market or, if
our common stock is not reported by the Nasdaq National Market, on the principal
other market on which our common stock is then traded.

     We will notify the holders of the Series A debentures  upon a determination
that they will be  entitled to receive  contingent  interest  with  respect to a
semi-annual  interest period.  In connection with providing such notice, we will
issue a press release and publish a notice containing  information regarding the
contingent  interest  determination in a newspaper of general circulation in The
City of New York or publish  the  information  on our web site or  through  such
other public medium as we may use at that time.

CONVERSION RIGHTS

     Subject to the conditions and during the periods  described below,  holders
may convert their Series A debentures  into shares of our common stock initially
at a conversion  rate of 20.3732  shares of common stock per Series A debenture.
The  conversion  price  as of any  date  of  determination  is a  dollar  amount
(initially  $49.08 per share of common  stock)  derived by dividing the accreted
principal  amount of a Series A debenture (which will be $1,000 until August 15,
2010) by the conversion rate in effect on such date. The conversion rate and the
corresponding  conversion  price in effect at any given time are  referred to as
the  "applicable   conversion  rate"  and  the  "applicable  conversion  price,"
respectively, and will be subject to adjustment as described below. A holder may
convert  fewer  than all of such  holder's  Series A  debentures  so long as the
Series A  debentures  converted  are an  integral  multiple  of $1,000  original
principal amount.

     Upon conversion,  we may choose to deliver, in lieu of shares of our common
stock,  cash or a  combination  of cash  and  shares  of our  common  stock,  as
described below. For a discussion of the U.S. federal income tax consequences of
conversion to a holder, see "Material U.S. Federal Income Tax Considerations."

     Except as otherwise  described below, you will not receive any cash payment
representing  accrued and unpaid cash  interest,  if any  (including  contingent
interest,  if any) or increases on the accreted principal



amount of the Series A debentures upon conversion of a Series A debenture and we
will not adjust the  conversion  rate to account for the accrued and unpaid cash
interest,  if any (including contingent interest and liquidated damages, if any)
or increases on the accreted  principal amount of the Series A debentures.  Upon
conversion  we will  deliver  to you cash or  shares  of our  common  stock,  as
described  below.  Delivery of cash or shares of common  stock will be deemed to
satisfy our  obligation  to pay the  accreted  principal  amount of the Series A
debentures,  including  accrued  and unpaid  cash  interest,  if any  (including
contingent  interest,  if any).  Increases on the accreted  principal amount and
accrued and unpaid cash interest, if any (including contingent interest, if any)
will be deemed paid in full rather than  canceled,  extinguished  or  forfeited.
Notwithstanding  conversion  of any  Series A  debentures  by a holder  thereof,
accrued and unpaid  liquidated  damages,  if any, to the conversion date will be
paid to such holder on the settlement date for such conversion.

     If a holder  converts  Series A  debentures,  we will pay any  documentary,
stamp or similar  issue or  transfer  tax due on the  issuance  of shares of our
common  stock  upon the  conversion,  unless the tax is due  because  the holder
requests the shares to be issued or delivered to a person other than the holder,
in which case the holder will pay that tax.

     To  convert  your  Series A  debenture  into  common  stock you must do the
following:

     o    complete and manually sign the notice of conversion on the back of the
          Series A  debenture  or  facsimile  of the  notice of  conversion  and
          deliver this notice to the conversion agent;

     o    surrender the Series A debenture to the conversion agent;

     o    if required, furnish appropriate endorsements and transfer documents;

     o    if required, pay all transfer or similar taxes; and

     o    if  required,   pay  funds  equal  to  interest,  if  any,  (including
          contingent  interest,  if any)  payable on the next  interest  payment
          date.

     If your  interest is a beneficial  interest in a global Series A debenture,
to convert  you must comply with the last three  requirements  listed  above and
comply with the DTC's  procedures  for  converting  a  beneficial  interest in a
global Series A debenture.  The conversion date will be the date on which all of
the foregoing requirements have been satisfied.  Settlement of our obligation to
deliver  shares or cash with  respect  to a  conversion  will occur on the dates
described below under "-- Payment Upon Conversion." A certificate for the number
of full  shares of our  common  stock into  which any  Series A  debentures  are
converted,  or cash  in  lieu  thereof,  together  with  any  cash  payment  for
fractional shares, will be delivered through the conversion agent, other than in
the case of holders of Series A debentures in book-entry  form,  which shares or
cash will be delivered in accordance with DTC customary practices.

     If a holder has already  delivered  a purchase  notice as  described  under
either "-- Purchase of Series A Debentures by Us at the Option of the Holder" or
"--  Fundamental  Change  Requires  Purchase of Series A Debentures by Us at the
Option of the Holder" with respect to a Series A debenture,  however, the holder
may not surrender  that Series A debenture for  conversion  until the holder has
withdrawn the purchase notice in accordance with the indenture.

     Holders of Series A debentures at the close of business on a regular record
date will receive payment of interest, if any, including contingent interest and
liquidated damages, if any, payable on the corresponding  interest payment date,
notwithstanding the conversion of such Series A debentures at any time after the
close of business on such regular record date.  Series A Debentures  surrendered
for  conversion  by a holder during the period from the close of business on any
regular  record date to the opening of



business on the immediately  following interest payment date must be accompanied
by payment of an amount  equal to the  interest,  if any,  including  contingent
interest,  if any,  that the holder is to  receive  on the Series A  debentures;
provided,  however, that no such payment need be made if (1) we have specified a
redemption  date that is after a record date and on or prior to the  immediately
following interest payment date, (2) we have specified a purchase date following
a  Fundamental  Change that is during  such  period or (3) any overdue  interest
(including overdue contingent interest, if any) exists at the time of conversion
with  respect  to such  Series  A  debentures,  to the  extent  of such  overdue
interest.

     PAYMENT UPON CONVERSION

     CONVERSION  ON OR PRIOR TO THE FINAL  NOTICE  DATE.  In the  event  that we
receive your notice of  conversion  on or prior to the day that is 20 days prior
to stated maturity or, with respect to Series A debentures  being redeemed,  the
applicable  redemption date (the "final notice date"), the following  procedures
will apply:

     If we choose to satisfy  all or any  portion of our  obligation  to deliver
common stock upon  conversion  (the  "conversion  obligation")  in cash, we will
notify you  through  the trustee of the dollar  amount to be  satisfied  in cash
(which must be expressed  either as 100% of the  conversion  obligation  or as a
fixed dollar amount) at any time on or before the date that is two business days
following  receipt  of  your  notice  of  conversion  ("cash  settlement  notice
period"). If we timely elect to pay cash for any portion of the shares otherwise
issuable to you,  you may retract the  conversion  notice at any time during the
two business day period immediately  following the cash settlement notice period
("conversion  retraction  period").  If  no  such  election  is  made,  no  such
retraction can be made (and a conversion notice shall be irrevocable).

     Settlement amounts will be computed as follows:

     o    If we elect to satisfy the entire conversion  obligation in shares, we
          will  deliver  to you a number of  shares,  for each  $1,000  original
          principal  amount  of  Series A  debentures,  equal to the  applicable
          conversion rate. In addition, if on the date you submit your notice of
          conversion  there  exists a  registration  default  as  defined in the
          registration rights agreement, and the shares of common stock you will
          receive on conversion are neither  registered under the Securities Act
          nor  immediately  freely  saleable  pursuant to Rule 144(k)  under the
          Securities Act, we will deliver to you additional shares as liquidated
          damages  (the  "liquidated   damages  shares")  equal  to  3%  of  the
          applicable  conversion rate for each $1,000 original  principal amount
          of Series A debentures.  We will pay cash for all fractional shares of
          common stock. The cash payment for fractional  shares will be based on
          the last  reported  sale price of our common  stock on the trading day
          immediately prior to the conversion date.

     o    If we elect to satisfy the entire  conversion  obligation  in cash, we
          will  deliver to you,  for each $1,000  original  principal  amount of
          Series A  debentures,  cash in an amount  equal to the  product of the
          applicable conversion rate and the average last reported sale price of
          our common stock for the 10 trading-day period beginning the day after
          the  conversion  retraction  period  (the "cash  settlement  averaging
          period").

     o    If we  elect to  satisfy  a fixed  portion  (other  than  100%) of the
          conversion obligation in cash, we will deliver to you such cash amount
          ("cash  amount")  and a number of  shares,  for each  $1,000  original
          principal  amount  of  Series A  debentures,  equal to the  applicable
          conversion  rate,  plus liquidated  damages shares,  if any, minus the
          number of shares equal to the sum, for each day of the cash settlement
          averaging  period,  of (x) 10% of the cash amount,  divided by (y) the
          last reported price of our common stock;  provided,  however, that the
          number of shares will not be less than zero.  We will pay cash for all
          fractional  shares of



          common stock. The cash payment for fractional  shares will be based on
          the last  reported  sale price of our common  stock on the trading day
          immediately prior to the conversion date.

     If we choose to satisfy all or any portion of the conversion  obligation in
cash and the conversion notice has not been retracted,  then settlement (in cash
and/or  shares)  will occur on the business day  following  the cash  settlement
averaging period.  If we choose to satisfy the entire  conversion  obligation in
shares of our common stock then  settlement will occur on the third business day
following the conversion date.

     CONVERSION  AFTER THE FINAL NOTICE DATE.  In the event that we receive your
notice of conversion  after the final notice date,  we will not send  individual
notices  of  our  election  to  satisfy  all or any  portion  of the  conversion
obligation in cash.  Instead,  if we choose to satisfy all or any portion of the
conversion  obligation  in cash after the final notice date, we will send, on or
prior to final notice date, a single  notice to the trustee of the dollar amount
to be  satisfied  in  cash  (which  must  be  expressed  either  as  100% of the
conversion  obligation or as a fixed dollar amount).  Settlement amounts will be
computed and settlement dates will be determined in the same manner as set forth
above under "-- Conversion on or Prior to the Final Notice Date" except that the
"cash settlement  averaging period" shall be the 10 trading-day period beginning
on the day after  receipt of your  notice of  conversion.  If we do not elect to
satisfy all or any portion of the conversion obligation in cash, then settlement
will occur on the first business day following the conversion date.

     CONDITIONS TO CONVERSION

     Holders may surrender  their Series A debentures for conversion into shares
of our  common  stock  prior to stated  maturity  only  under the  circumstances
described  below.  For a discussion of the federal income tax  consequences of a
conversion of the Series A debentures into our common stock,  see "Material U.S.
Federal Income Tax Considerations."

     CONVERSION  UPON  SATISFACTION  OF  SALE  PRICE  CONDITION.  A  holder  may
surrender  any of its Series A  debentures  for  conversion  into  shares of our
common stock  during any calendar  quarter  after  September  30, 2003 (and only
during  such  calendar  quarter) if the last  reported  sale price of our common
stock for at least 20 trading days during the period of 30  consecutive  trading
days ending on the last trading day of the previous  calendar quarter is greater
than or equal to 120% of the  applicable  conversion  price  (initially  120% of
$49.08, or $58.90), which we refer to as the "conversion trigger price."

     The  applicable  conversion  price of a Series A  debenture  at any time is
dependent  upon the  accreted  principal  amount of a Series A debenture at that
time and  therefore  both the  applicable  conversion  price and the  conversion
trigger price will increase  following August 15, 2010 as the accreted principal
amount of a Series A debenture  increases.  The  following  table sets forth the
conversion trigger prices at August 15 of each year beginning 2010.



                           CONVERSION TRIGGER PRICES*


                                           APPLICABLE              CONVERSION
AUGUST 15,                                 CONVERSION PRICE        TRIGGER PRICE
----------------------------------------   ----------------        -------------
2010....................................   $49.08                  $58.90
2011....................................   $51.13                  $61.36
2012....................................   $53.26                  $63.91
2013....................................   $55.48                  $66.58
2014....................................   $57.79                  $69.35
2015....................................   $60.20                  $72.24
2016....................................   $62.71                  $75.25
2017....................................   $65.32                  $78.39
2018....................................   $68.05                  $81.65
2019....................................   $70.88                  $85.06
2020....................................   $73.84                  $88.60
2021....................................   $76.91                  $92.30
2022....................................   $80.12                  $96.14
2023....................................   $83.46                  $100.15


-------------------
*    This table assumes no events have occurred that would require an adjustment
     to the conversion rate.

     CONVERSION  UPON  SATISFACTION  OF TRADING  PRICE  CONDITION.  A holder may
surrender any of its Series A debentures  for  conversion  into our common stock
prior to the stated maturity during the five business days immediately following
any five  consecutive  trading-day  period in which the trading price per $1,000
original  principal  amount of Series A debentures  (as  determined  following a
request by a holder of the Series A debentures in accordance with the procedures
described below) for each day of that period was less than 95% of the product of
the last reported sale price of our common stock and the  applicable  conversion
rate of such Series A debentures  on each such day;  provided,  however,  that a
holder may not convert Series A debentures in reliance on this  provision  after
August 15, 2018 if on any trading day during such five  consecutive  trading-day
period  the last  reported  sale  price of our  common  stock  was  between  the
applicable  conversion  price  of  the  Series  A  debentures  and  120%  of the
applicable conversion price of the Series A debentures.

     The "trading price" of the Series A debentures on any date of determination
means the average of the secondary  market bid  quotations  per $1,000  original
principal  amount  of the  Series  A  debentures  obtained  by the  trustee  for
$10,000,000   original   principal   amount  of  the  Series  A  debentures   at
approximately  3:30 p.m.,  New York City time, on such  determination  date from
three independent  nationally recognized securities dealers we select;  provided
that if three such bids cannot  reasonably  be obtained by the trustee,  but two
such bids are obtained,  then the average of the two bids shall be used,  and if
only one such bid can reasonably be obtained by the trustee,  that one bid shall
be  used.  If the  trustee  cannot  reasonably  obtain  at  least  one  bid  for
$10,000,000  original  principal  amount  of  the  Series  A  debentures  from a
nationally recognized securities dealer, or in our reasonable judgment,  the bid
quotations are not indicative of the secondary  market value of $1,000  original
principal  amount of the Series A debentures,  then the trading price per $1,000
original  principal  amount of the Series A debentures will be deemed to be less
than 95% of the product of the last  reported sale price of our common stock and
the applicable conversion rate.

     In connection  with any conversion  upon  satisfaction of the above trading
pricing condition, the trustee shall have no obligation to determine the trading
price of the Series A debentures  unless we have requested  such  determination;
and we shall have no obligation to make such request unless a holder provides us
with reasonable  evidence that the trading price per $1,000  original  principal
amount of the



Series A debentures  would be less than 95% of the product of the last  reported
sale price of our common stock and the applicable conversion rate. At such time,
we shall  instruct  the trustee to determine  the trading  price of the Series A
debentures  beginning on the next trading day and on each successive trading day
until the trading  price per $1,000  original  principal  amount of the Series A
debentures  is greater than or equal to 95% of the product of the last  reported
sale price of our common stock and the applicable conversion rate.

     CONVERSION UPON REDEMPTION.  If we elect to redeem the Series A debentures,
holders may convert Series A debentures  into our common stock at any time prior
to the  close  of  business  on  the  business  day  immediately  preceding  the
redemption  date, even if the Series A debentures are not otherwise  convertible
at such time.

     CONVERSION UPON SPECIFIED CORPORATE TRANSACTIONS. If we elect to:

     o    distribute  to all  holders  of our  common  stock  certain  rights or
          warrants  entitling them to purchase,  for a period expiring within 60
          days after the date of the distribution, shares of our common stock at
          a price  per  share of less  than the  market  price of a share of our
          common stock on the record date for the distribution, or

     o    distribute  to all  holders  of our  common  stock  our  assets,  debt
          securities  or  certain  rights  to  purchase  our  securities,  which
          distribution  has a per  share  value as  determined  by our  board of
          directors  exceeding 10% of the last reported sale price of a share of
          our  common  stock  on  the  trading  day  immediately  preceding  the
          declaration date for such distribution,  we must notify the holders of
          the  Series  A  debentures  at  least 20  business  days  prior to the
          ex-dividend  date  for  such  distribution.  Once we have  given  such
          notice, holders may surrender their Series A debentures for conversion
          at any time until the earlier of the close of business on the business
          day immediately prior to the ex-dividend date or our announcement that
          such distribution will not take place, even if the Series A debentures
          are not otherwise convertible at such time; provided,  however, that a
          holder  may not  exercise  this  right to  convert  if the  holder may
          participate in the distribution  without conversion.  The "ex-dividend
          date" is the first date upon which a sale of the common stock, regular
          way on the relevant  exchange or in the relevant market for our common
          stock,  does not  automatically  transfer  the  right to  receive  the
          relevant  dividend or distribution from the seller of the common stock
          to its buyer.

     In addition,  if we are party to a  consolidation,  merger or binding share
exchange  pursuant  to which our  common  stock  would be  converted  into cash,
securities or other  property,  a holder may surrender  Series A debentures  for
conversion  at any time from and after  the date  which is 15 days  prior to the
anticipated  effective  date of the  transaction  until 15 days after the actual
effective  date  of  such  transaction  (or if such  transaction  constitutes  a
Fundamental Change, until the business day immediately  preceding the applicable
Fundamental Change purchase date). If we engage in certain  reclassifications of
our  common  stock  or are a party to a  consolidation,  merger,  binding  share
exchange or transfer of all or substantially all of our assets pursuant to which
our common stock is converted into cash,  securities or other property,  then at
the effective time of the transaction, the right to convert a Series A debenture
into  our  common  stock  will be  changed  into a right to  convert  a Series A
debenture  into the kind and amount of cash,  securities or other  property that
the  holder  would  have  received  if the  holder  had  converted  its Series A
debentures  immediately  prior  to  the  transaction.  If the  transaction  also
constitutes a Fundamental  Change,  as defined below, a holder can require us to
purchase  all or a portion of its Series A debentures  as described  below under
"--  Fundamental  Change  Requires  Purchase of Series A Debentures by Us at the
Option of the Holder."

     The  Exchange  (described  in   "Summary--Recent   Developments"  does  not
constitute a specified corporate transaction permitting conversion.




     CONVERSION RATE ADJUSTMENTS

     The  applicable  conversion  rate will be  subject to  adjustment,  without
duplication, upon the occurrence of any of the following events:

          (1) the payment of  dividends  and other  distributions  on our common
     stock payable exclusively in shares of our common stock,

          (2) the  distribution  to all holders of our common stock of rights or
     warrants that allow the holders to purchase  shares of our common stock for
     a period expiring within 60 days from the date of issuance of the rights or
     warrants  at  less  than  the  market  price  on the  record  date  for the
     determination of shareholders entitled to receive the rights or warrants,

          (3) subdivisions or combinations of our common stock,

          (4)  distributions  to all holders of our common  stock of our assets,
     debt  securities,  shares of our  capital  stock or rights or  warrants  to
     purchase our securities  (excluding any dividend,  distribution or issuance
     covered by clause (1) or (2) above and any  dividend or  distribution  paid
     exclusively in cash) the  conversion  rate will be increased by multiplying
     the conversion rate by a fraction,

               (a)  the  numerator  of which is the current  market price of our
                    common stock plus the fair market  value,  as  determined by
                    our board of directors, of the portion of those assets, debt
                    securities, shares of capital stock or rights or warrants so
                    distributed applicable to one share of common stock, and

               (b)  the  denominator of which is the current market price of our
                    common stock.

          The  "current  market  price" of our common stock means the average of
     the last  reported  sale  prices  for the first 10 trading  days from,  and
     including,  the  ex-dividend  date (as defined  above in "--  Conditions to
     Conversion -- Conversion Upon Specified  Corporate  Transactions") for such
     dividend or distribution.

          In the event that we make a distribution  to all holders of our common
     stock  consisting  of capital stock of, or similar  equity  interests in, a
     subsidiary  or other  business  unit of ours,  the fair market value of the
     securities so distributed will be based on the average of the closing sales
     prices of those  securities  for each of the 10 trading days  commencing on
     and including the fifth trading day after the ex-dividend  date (as defined
     above  in  "--  Conditions  to  Conversion  --  Conversion  Upon  Specified
     Corporate  Transactions")  for such dividend or distribution on the NYSE or
     such other national or regional  exchange or market on which the securities
     are then listed or quoted.

          (5) we  make  distributions  consisting  exclusively  of  cash  to all
     holders of our common  stock,  excluding  any cash  dividend  on our common
     stock to the  extent  that the  aggregate  cash  dividend  per share of our
     common  stock  in any  quarter  does  not  exceed  $0.0025  (the  "dividend
     threshold  amount") (the dividend threshold amount is subject to adjustment
     on the same basis as the conversion rate,  provided that no adjustment will
     be made to the dividend  threshold  amount for any  adjustment  made to the
     conversion rate pursuant to this clause (5)), in which event the conversion
     rate will be adjusted by multiplying the conversion rate by a fraction,

               (a)  the  numerator of which will be the current  market price of
                    our common stock plus the amount per share of such  dividend
                    or distribution and



               (b)  the denominator of which will be the current market price of
                    our common stock.

          If an  adjustment  is  required  to be made under this clause (5) as a
     result of a distribution that is a dividend,  the adjustment would be based
     upon the amount by which the  distribution  exceeds the dividend  threshold
     amount.  If an adjustment is required to be made under this clause (5) as a
     result of a distribution  that is not a dividend,  the adjustment  would be
     based upon the full amount of the distribution.

          (6) we or one of our  subsidiaries  makes a payment  in  respect  of a
     tender offer or exchange  offer for our common stock to the extent that the
     cash and value of any other consideration included in the payment per share
     of our common  stock  exceeds  the last  reported  sale price of our common
     stock on the trading day next  succeeding the last date on which tenders or
     exchanges  may be made  pursuant  to such  tender or  exchange  offer,  the
     conversion  rate will be adjusted by multiplying  the conversion  rate by a
     fraction,

               (a)  the  numerator  of  which  will be the  sum of (x) the  fair
                    market value,  as  determined by our board of directors,  of
                    the  aggregate  consideration  payable for all shares of our
                    common  stock we purchase  in such tender or exchange  offer
                    and (y) the  product  of the  number of shares of our common
                    stock  outstanding  less any such  purchased  shares and the
                    last  reported sale price of our common stock on the trading
                    day next succeeding the expiration of the tender or exchange
                    offer and

               (b)  the  denominator  of which will be the product of the number
                    of shares of our common  stock  outstanding,  including  any
                    such purchased  shares,  and the last reported sale price of
                    our common  stock on the  trading  day next  succeeding  the
                    expiration of the tender or exchange offer.

     Notwithstanding  the foregoing,  in the event of an adjustment  pursuant to
clauses  (4),  (5) or (6) above,  in no event will the  conversion  rate  exceed
28.5225, subject to adjustment pursuant to clauses (1), (2) and (3) above.

     To the extent that we have a rights plan in effect upon  conversion  of the
Series A debentures  into common stock  (including  the rights plan described in
"Description of Capital  Stock--Rights Plan" below), the holder will receive, in
addition to the common stock, the rights under the rights plan unless the rights
have separated  from the common stock prior to the time of conversion,  in which
case the  conversion  rate will be adjusted at the time of  separation  as if we
distributed  to all holders of our common stock,  our assets,  debt  securities,
shares of our capital stock or rights or warrants to purchase our  securities as
described in clause (4) above.

     In addition to these  adjustments,  we may increase the conversion  rate as
our board of directors  considers  advisable to avoid or diminish any income tax
to holders of our common stock or rights to purchase our common stock  resulting
from any dividend or  distribution of stock (or rights to acquire stock) or from
any event  treated as such for income tax  purposes.  We may also,  from time to
time, to the extent permitted by applicable law, increase the conversion rate by
any amount for any period of at least 20 business days if our board of directors
has determined that such increase would be in our best  interests.  If our board
of directors  makes such a  determination,  it will be conclusive.  We will give
holders of Series A  debentures  at least 15 days' notice of such an increase in
the conversion rate.



     "Market price" means the average of the last reported sale prices per share
of our common stock for the 10 trading-day  period ending on the applicable date
of  determination  (if the applicable date of determination is a trading day or,
if  not,  then  on the  last  trading  day  prior  to  the  applicable  date  of
determination),  appropriately  adjusted to take into  account  the  occurrence,
during the period  commencing  on the first of the  trading  days  during the 10
trading-day  period and ending on the applicable date of  determination,  of any
event  that  would  result in an  adjustment  of the  conversion  rate under the
indenture.

     The applicable conversion rate will not be adjusted:

     o    upon the  issuance of any shares of our common  stock  pursuant to any
          present or future plan providing for the  reinvestment of dividends or
          interest  payable on our  securities  and the investment of additional
          optional amounts in shares of our common stock under any plan,

     o    upon the  issuance  of any  shares of our  common  stock or options or
          rights to  purchase  those  shares  pursuant  to any present or future
          employee, director or consultant benefit plan or program of or assumed
          by us or any of our subsidiaries,

     o    upon the  issuance of any shares of our common  stock  pursuant to any
          option,  warrant,  right or  exercisable,  exchangeable or convertible
          security not described in the preceding  bullet and  outstanding as of
          the date the Series A debentures were first issued (no adjustment will
          be made for the issuance of common stock pursuant to conversion of the
          Series B debentures),

     o    for a change in the par value of the common stock, or

     o    for accrued and unpaid cash interest, including contingent interest or
          liquidated  damages,  if any, or accretion of the principal  amount of
          the Series A debentures.

     No adjustment in the applicable conversion rate will be required unless the
adjustment  would  require  an  increase  or  decrease  of at  least  1% of  the
applicable conversion rate. If the adjustment is not made because the adjustment
does not  change  the  applicable  conversion  rate by more  than  1%,  then the
adjustment  that is not made will be carried  forward and taken into  account in
any future adjustment.

     In the event of:

     o    a taxable  distribution  to  holders of shares of common  stock  which
          results in an adjustment of the conversion rate; or

     o    an increase in the conversion rate at our discretion,

the holders of the Series A debentures may, in certain circumstances,  be deemed
to have  received  a  distribution  subject  to  U.S.  federal  income  tax as a
dividend. In addition, for Non-U.S. Holders of Series A debentures,  this deemed
distribution may be subject to U.S. federal  withholding tax  requirements.  See
"Material U.S. Federal Income Tax Considerations."



OPTIONAL REDEMPTION

     No sinking  fund is provided for the Series A  debentures.  Prior to August
20, 2010, the Series A debentures will not be redeemable. On or after August 20,
2010, we may redeem for cash all or part of the Series A debentures at any time,
upon not less than 30 days nor more than 60 days  notice  before the  redemption
date by mail to the  trustee,  the  paying  agent  and each  holder  of Series A
debentures.

     If redeemed at our option,  the Series A  debentures  will be redeemed at a
redemption price equal to the accreted  principal  amount,  plus any accrued and
unpaid cash interest,  including  contingent interest and liquidated damages, if
any, to the redemption  date.  The table below shows the redemption  prices of a
Series A debenture on August 15,  2010,  on each August 15  thereafter  prior to
maturity  and at maturity on August 15, 2023  (assuming  there is no accrued and
unpaid cash interest,  contingent interest or liquidated damages).  In addition,
the redemption  price of a Series A debenture that is redeemed between the dates
listed  below would  include an  additional  amount  reflecting  the  additional
principal  amount  that has  accreted  on such  Series  A  debenture  since  the
immediately preceding date in the table below.



                                                                                
                                      SERIES A
                                      DEBENTURE ISSUE
REDEMPTION DATE: AUGUST 15,           PRICE (1)              ACCRETION AMOUNT (2)        REDEMPTION PRICE (1) + (2)
-----------------------------------   ---------------        --------------------        --------------------------
2010...............................   $1,000.00              $0.00                       $1,000.00
2011...............................   $1,000.00              $41.68                      $1,041.68
2012...............................   $1,000.00              $85.09                      $1,085.09
2013...............................   $1,000.00              $130.31                     $1,130.31
2014...............................   $1,000.00              $177.42                     $1,177.42
2015...............................   $1,000.00              $226.48                     $1,226.48
2016...............................   $1,000.00              $277.60                     $1,277.60
2017...............................   $1,000.00              $330.84                     $1,330.84
2018...............................   $1,000.00              $386.31                     $1,386.31
2019...............................   $1,000.00              $444.08                     $1,444.08
2020...............................   $1,000.00              $504.26                     $1,504.26
2021...............................   $1,000.00              $566.95                     $1,566.95
2022...............................   $1,000.00              $632.26                     $1,632.26
2023...............................   $1,000.00              $700.28                     $1,700.28


     If we  decide  to  redeem  fewer  than  all of  the  outstanding  Series  A
debentures,  the trustee will select the Series A debentures  to be redeemed (in
original principal amounts of $1,000 or integral multiples thereof) by lot, on a
pro rata basis or by another method the trustee considers fair and appropriate.

     If the trustee  selects a portion of your  Series A  debenture  for partial
redemption  and you  convert  a  portion  of the same  Series A  debenture,  the
converted portion will be deemed to be from the portion selected for redemption.

     In the event of any  redemption  in part, we will not be required to issue,
register the  transfer of or exchange any Series A debenture  during a period of
15 days before the mailing of the redemption notice.

     For a discussion of the U.S. federal income tax consequences to a holder of
our redemption of the Series A debentures, see "Material U.S. Federal Income Tax
Considerations."



PURCHASE OF SERIES A DEBENTURES BY US AT THE OPTION OF THE HOLDER

     Holders have the right to require us to purchase the Series A debentures on
August 15, 2010,  August 15, 2015 and August 15, 2020 (each, a "purchase date").
We will pay cash for all Series A debentures purchased by us on August 15, 2010.
For purchases on August 15, 2015 and August 15, 2020 we may, at our option,  pay
the  purchase  price in cash,  shares of our common  stock,  or any  combination
thereof.  We may pay all or a  portion  of the  purchase  price in shares of our
common stock as long as our common stock is then listed on a national securities
exchange or traded on the Nasdaq National Market and if certain other conditions
specified  below are satisfied.  For purchases on August 15, 2015 and August 15,
2020, if we elect to pay the purchase  price,  in whole or in part, in shares of
our common  stock,  the number of shares of common  stock to be  delivered by us
will be equal to the portion of the  purchase  price to be paid in common  stock
divided  by 97.5% of the  market  price  (as  defined  under "--  Conditions  to
Conversion -- Conversion Rate  Adjustments"  above) as of the third business day
prior to the purchase date.

     We will be required to purchase any  outstanding  Series A  debentures  for
which a holder  delivers a written  purchase  notice to the paying  agent.  This
notice  must be  delivered  during  the  period  beginning  at any time from the
opening of business on the date that is 20 business  days prior to the  relevant
purchase  date and ending on the close of business on the  business day prior to
the purchase  date. If the purchase  notice is given and  withdrawn  during such
period,  we will not be obligated to purchase the related  Series A  debentures.
Our  purchase  obligation  will be  subject  to some  additional  conditions  as
described in the indenture.  Also, as described in the "Risk Factors" section of
this offering  memorandum  under the caption "Risks Related to the Debentures --
We may not have the  ability  to raise  the  funds  necessary  to  purchase  the
debentures upon a Fundamental  Change or other purchase date, as required by the
indenture  governing  the  debentures,"  we may not  have  funds  sufficient  to
purchase  the  Series  A  debentures  when  we are  required  to do so or may be
prohibited from doing so under the terms of other  indebtedness.  Our failure to
purchase the Series A debentures  when we are required to do so will  constitute
an event of default under the indenture with respect to the Series A debentures.

     The purchase price payable will be equal to 100% of the accreted  principal
amount of the Series A debentures  to be  purchased  plus any accrued and unpaid
cash interest,  including contingent interest and liquidated damages, if any, to
such  purchase  date.  The table below shows the  purchase  prices of a Series A
debenture  on each of the  purchase  dates.  The  purchase  prices  below do not
include any additional  amounts  reflecting any accrued and unpaid cash interest
(including  contingent  interest,  if any) and  accrued  and  unpaid  liquidated
damages, if any.



                                                                                
                                      SERIES A
                                      DEBENTURE ISSUE
PURCHASE DATE: AUGUST 15,             PRICE (1)              ACCRETION AMOUNT (2)        PURCHASE PRICE (1) + (2)
-----------------------------------   ---------------        --------------------        ------------------------
2010...............................   $1,000.00              $0.00                       $1,000.00
2015...............................   $1,000.00              $226.48                     $1,226.48
2020...............................   $1,000.00              $504.26                     $1,504.26



     For a discussion  of the United  States  federal  income tax treatment of a
holder receiving cash, see "Material U.S. Federal Income Tax Considerations."

     On or before the 20th  business day prior to each  purchase  date,  we will
provide  to the  trustee,  the paying  agent and to all  holders of the Series A
debentures at their  addresses  shown in the register of the  registrar,  and to
beneficial  owners as required by applicable law, a notice stating,  among other
things:



     o    for  purchases on or after  August 15,  2015,  whether we will pay the
          purchase  price of the  Series A  debentures  in cash,  shares  of our
          common stock or a combination  thereof,  specifying the percentages of
          each;

     o    for  purchases  on or after  August  15,  2015,  if we elect to pay in
          shares of our common stock, the method of calculating the market price
          of the shares of common stock;

     o    the purchase price;

     o    the name and address of the paying agent and the conversion agent;

     o    the conversion rate and any adjustments to the conversion rate;

     o    that the Series A debentures  with respect to which a purchase  notice
          has been  given by the  holder  may be  converted  only if the  holder
          withdraws  the  purchase  notice in  accordance  with the terms of the
          indenture; and

     o    the  procedures  that  holders  must  follow to require us to purchase
          their Series A debentures.

     In connection with providing such notice, we will issue a press release and
publish  a  notice  containing  this  information  in  a  newspaper  of  general
circulation  in The City of New York or publish the  information on our web site
or through such other public medium as we may use at that time.

     To exercise your  purchase  right,  you must  deliver,  before the close of
business on the business day immediately preceding the purchase date, the Series
A debentures to be purchased, duly endorsed for transfer, together with the form
attached to the Series A debentures  entitled  "Purchase Notice" duly completed,
to the paying agent.  A notice  electing to require us to purchase your Series A
debentures must state:

     o    if certificated  Series A debentures have been issued, the certificate
          numbers of the Series A debentures,

     o    the portion of the original principal amount of Series A debentures to
          be purchased, in integral multiples of $1,000,

     o    for  purchases  on or after  August 15,  2015,  in the event we elect,
          pursuant  to the  notice  that we are  required  to  give,  to pay the
          purchase price in shares of our common stock, in whole or in part, but
          the purchase price is ultimately to be paid to the holder  entirely in
          cash because any condition to payment of the purchase price or portion
          of the purchase  price in common stock is not  satisfied  prior to the
          close of business on the purchase  date, as described  below,  whether
          the holder elects:  (a) to withdraw the purchase  notice as to some or
          all of the Series A debentures to which it relates,  or (b) to receive
          cash  in  respect  of the  entire  purchase  price  for all  Series  A
          debentures or portions of Series A debentures subject to such purchase
          notice,  provided,  however,  that if the holder fails to indicate its
          choice  with  respect to such  election,  the holder will be deemed to
          have elected to receive cash in respect of the entire  purchase  price
          for all Series A debentures  subject to the  purchase  notice in these
          circumstances, and

     o    that the Series A debentures are to be purchased by us pursuant to the
          applicable provisions of the Series A debentures and the indenture.



     If the Series A debentures are not in  certificated  form, your notice must
comply with appropriate DTC procedures.

     We may not purchase any Series A debentures at the option of holders if the
accreted  principal amount of the Series A debentures has been accelerated,  and
such acceleration has not been rescinded.

     You may  withdraw  any  purchase  notice (in whole or in part) by a written
notice  of  withdrawal  delivered  to the  paying  agent  prior to the  close of
business  on the  business  day  prior  to the  purchase  date.  The  notice  of
withdrawal must state:

     o    the original principal amount of the withdrawn Series A debentures,

     o    if certificated  Series A debentures have been issued, the certificate
          numbers of the withdrawn Series A debentures, and

     o    the original  principal  amount,  if any, that remains  subject to the
          purchase notice.

     If the Series A debentures are not in  certificated  form,  your withdrawal
notice must comply with appropriate DTC procedures.

     You  must  either  effect  book-entry  transfer  or  deliver  the  Series A
debentures,  together with necessary  endorsements,  to the office of the paying
agent after delivery of the purchase  notice to receive  payment of the purchase
price.  You will receive  payment  promptly  following the later of the purchase
date  and the  time of  book-entry  transfer  or the  delivery  of the  Series A
debentures.  If the paying agent holds money or securities sufficient to pay the
purchase  price of the Series A  debentures  on the purchase  date,  then on the
business day following the purchase date:

     o    the  Series  A  debentures  will  cease  to be  outstanding  and  cash
          interest,  including  contingent  interest and liquidated  damages, if
          any,  will  cease to accrue  and the  principal  amount  will cease to
          accrete (whether or not book-entry  transfer of the debentures is made
          or whether or not the Series A debentures  are delivered to the paying
          agent), and

     o    all other rights of the holder will terminate (other than the right to
          receive the purchase  price upon  delivery or transfer of the Series A
          debentures).

     In connection with any purchase offer pursuant to these provisions,  to the
extent applicable and required by law, we will:

     o    comply with the  provisions  of Rule  13e-4,  Rule 14e-1 and any other
          tender   offer  rules  under  the  Exchange  Act  which  may  then  be
          applicable; and

     o    file  Schedule TO or any other  required  schedule  under the Exchange
          Act.

     Because the market  price of our common  stock is  determined  prior to the
applicable  purchase date,  holders of Series A debentures  bear the market risk
with  respect  to the value of  common  stock to be  received  from the date the
market price is determined to such purchase date.

     Our right to purchase Series A debentures, in whole or in part, with shares
of our common stock for  purchases  on or after  August 15, 2015,  is subject to
various conditions, including:

     o    the  registration of the common stock under the Securities Act and the
          Exchange Act, if required;



     o    any necessary  qualification  or registration  under  applicable state
          securities  law  or  the   availability  of  an  exemption  from  such
          qualification and registration;

     o    the  information  necessary to calculate the market price is published
          in a daily newspaper of national circulation; and

     o    our common stock is then listed on a national  securities  exchange or
          traded on the Nasdaq National Market.

If such  conditions  are not  satisfied  prior to the close of  business  on the
purchase  date,  we will  pay the  purchase  price of the  Series  A  debentures
entirely  in cash.  We may not change the form,  components  or  percentages  of
components of  consideration to be paid for the Series A debentures once we have
given the notice that we are required to give to holders of Series A debentures,
except as described in the preceding sentence.

FUNDAMENTAL  CHANGE REQUIRES PURCHASE OF SERIES A DEBENTURES BY US AT THE OPTION
OF THE HOLDER

     If a Fundamental  Change (as defined  below in this section)  occurs at any
time prior to maturity, holders will have the right, at their option, to require
us to purchase  any or all of their Series A  debentures,  or any portion of the
original  principal  amount  thereof,  that is equal to  $1,000  or an  integral
multiple of $1,000.  The price we are required to pay (the  "Fundamental  Change
purchase  price")  is equal to the  accreted  principal  amount of the  Series A
debentures  to be  purchased  plus accrued and unpaid cash  interest,  including
contingent  interest and liquidated  damages,  if any, to the Fundamental Change
purchase date, unless such Fundamental Change purchase date falls after a record
date and on or prior to the  corresponding  interest payment date, in which case
we will pay the full amount of accrued and unpaid cash interest  payable on such
interest  payment  date to the holder of record at the close of  business on the
corresponding  record date.  For a  discussion  of the U.S.  federal  income tax
consequences  to a  holder  of our  purchase  of the  Series A  debentures,  see
"Material U.S. Federal Income Tax Considerations."

     If we elect to pay the  Fundamental  Change  purchase price, in whole or in
part, in shares of our common stock,  the number of shares of common stock to be
delivered by us will be equal to the portion of the Fundamental  Change purchase
price to be paid in  common  stock  divided  by 97.5% of the  market  price  (as
defined under "-- Conditions to Conversion --  Adjustments  to Conversion  Rate"
above) of one share of our common  stock as of the third  business  day prior to
the Fundamental Change purchase date.

     Because the market  price of the common  stock is  determined  prior to the
applicable Fundamental Change purchase date, holders of Series A debentures bear
the market  risk with  respect to the value of the common  stock to be  received
from  the date  such  market  price is  determined  to such  Fundamental  Change
purchase date.

     A  "Fundamental  Change" will be deemed to have  occurred at any time after
the Series A debentures are originally issued that any of the following occurs:

          (1) our  common  stock or other  common  stock into which the Series A
     debentures are convertible is neither listed for trading on a U.S. national
     securities  exchange nor approved for trading on the Nasdaq National Market
     or another  established  automated  over-the-counter  trading market in the
     United States,

          (2) a "person" or "group"  (within the meaning of Section 13(d) of the
     Exchange  Act)  other than us, our  subsidiaries  or our or their  employee
     benefit  plans,  files a Schedule TO or any schedule,  form or report under
     the Exchange Act disclosing that such person or group has become



     the  direct or  indirect  ultimate  "beneficial  owner," as defined in Rule
     13d-3 under the Exchange Act, of our common equity  representing  more than
     50% of the voting power of our common equity  entitled to vote generally in
     the election of directors,

          (3) consummation of any share exchange,  consolidation or merger of us
     pursuant to which our common stock will be converted into cash,  securities
     or other property or any sale,  lease or other transfer in one  transaction
     or a series of transactions of all or substantially all of the consolidated
     assets of us and our  subsidiaries,  taken as a whole,  to any person other
     than us or one or  more  of our  subsidiaries;  provided,  however,  that a
     transaction  where the holders of our common  equity  immediately  prior to
     such  transaction  have  directly  or  indirectly,  more  than  50%  of the
     aggregate voting power of all classes of common equity of the continuing or
     surviving  corporation  or  transferee  entitled to vote  generally  in the
     election  of  directors  immediately  after  such  event  shall  not  be  a
     Fundamental Change, or

          (4)  continuing  directors (as defined below in this section) cease to
     constitute at least a majority of our board of directors.

     The  Exchange  (described  in  "Summary--Recent   Developments")  does  not
constitute a fundamental change.

     A Fundamental  Change will not be deemed to have occurred in respect of any
of the foregoing, however, if either:

          (1) the last  reported  sale  price of our  common  stock for any five
     trading  days within the 10  consecutive  trading  days ending  immediately
     before  the  later of the  Fundamental  Change or the  public  announcement
     thereof,  equals or exceeds 105% of the applicable  conversion price of the
     Series A debentures in effect  immediately before the Fundamental Change or
     the public announcement thereof, or

          (2) all or  substantially  all of the  consideration,  excluding  cash
     payments  for  fractional   shares,  in  the  transaction  or  transactions
     constituting  the  Fundamental  Change  consists of shares of capital stock
     traded on a national  securities  exchange or quoted on the Nasdaq National
     Market or which will be so traded or quoted  when  issued or  exchanged  in
     connection with a Fundamental Change (these securities being referred to as
     "publicly  traded  securities")  and as a  result  of this  transaction  or
     transactions the Series A debentures become  convertible into such publicly
     traded securities, excluding cash payments for fractional shares.

     For purposes of the above  paragraph the term "capital stock" of any person
means any and all shares, interests, participations or other equivalents however
designated  of  corporate  stock  or  other  equity  participations,   including
partnership interests, whether general or limited, of such person and any rights
(other  than  debt  securities   convertible  or  exchangeable  into  an  equity
interest), warrants or options to acquire an equity interest in such person.

     "Continuing director" means a director who either was a member of our board
of directors on the date of this offering  memorandum or who becomes a member of
our board of directors  subsequent to that date and whose appointment,  election
or nomination for election by our stockholders is duly approved by a majority of
the continuing directors on our board of directors at the time of such approval,
either by a specific vote or by approval of the proxy statement  issued by us on
behalf of the board of  directors in which such  individual  is named as nominee
for director.



     On or before the 30th day after the occurrence of a Fundamental  Change, we
will  provide to all  holders of the Series A  debentures  and the  trustee  and
paying agent a notice of the  occurrence  of the  Fundamental  Change and of the
resulting purchase right. Such notice shall state, among other things:

     o    whether  we will  pay the  Fundamental  Change  purchase  price of the
          Series A debentures  in cash,  shares of common stock or a combination
          thereof, specifying the percentages of each,

     o    if we  elect  to  pay  in  shares  of  common  stock,  the  method  of
          calculating the market price of the common stock,

     o    the events causing a Fundamental Change,

     o    the date of the Fundamental Change,

     o    the last date on which a holder may exercise the purchase right,

     o    the Fundamental Change purchase price,

     o    the Fundamental Change purchase date,

     o    the name and address of the paying agent and the conversion agent,

     o    the conversion rate and any adjustments to the conversion rate,

     o    that the  Series A  debentures  with  respect  to which a  Fundamental
          Change  purchase  notice has been given by the holder may be converted
          only if the holder withdraws the Fundamental Change purchase notice in
          accordance with the terms of the indenture, and

     o    the  procedures  that  holders  must  follow to require us to purchase
          their Series A debentures.

     Simultaneously  with providing  such notice,  we will issue a press release
and publish a notice  containing  this  information  in a  newspaper  of general
circulation  in The City of New York or publish the  information on our web site
or through such other public medium as we may use at that time.

     To exercise your  purchase  right,  you must  deliver,  before the close of
business on the  business  day  immediately  preceding  the  Fundamental  Change
purchase  date,  the Series A  debentures  to be  purchased,  duly  endorsed for
transfer,  together with the form  attached to the Series A debentures  entitled
"Form of  Fundamental  Change  Purchase  Notice" duly  completed,  to the paying
agent. Your purchase notice must state:

     o    if certificated,  the certificate numbers of their Series A debentures
          to be delivered for purchase,

     o    the portion of the original principal amount of Series A debentures to
          be purchased, which must be $1,000 or an integral multiple thereof,

     o    in the event we elect,  pursuant to the notice that we are required to
          give,  to pay the  Fundamental  Change  purchase  price in our  common
          stock, in whole or in part, but the Fundamental  Change purchase price
          is  ultimately  to be paid to the holder  entirely in cash because any
          condition  to  payment of the  Fundamental  Change  purchase  price or
          portion of the  Fundamental  Change  purchase price in common stock is
          not satisfied prior to the close of business on the Fundamental Change
          purchase date, as described below,  whether



          the holder elects:  (a) to withdraw the  Fundamental  Change  purchase
          notice  as to some or all of the  Series  A  debentures  to  which  it
          relates,  or (b) to receive cash in respect of the entire  Fundamental
          Change  purchase  price for all Series A  debentures  or  portions  of
          Series  A  debentures  subject  to such  Fundamental  Change  purchase
          notice;  provided,  however,  that if the holder fails to indicate the
          holder's choice with respect to the election  described in this bullet
          point,  the holder will be deemed to have  elected to receive  cash in
          respect of the entire Fundamental Change purchase price for all Series
          A debentures  subject to the  Fundamental  Change  purchase  notice in
          these circumstances, and

     o    that the Series A debentures are to be purchased by us pursuant to the
          applicable provisions of the Series A debentures and the indenture.

     If the Series A debentures are not in certificated  form, their Fundamental
Change purchase notice must comply with appropriate DTC procedures.

     Holders may withdraw any Fundamental Change purchase notice (in whole or in
part) by a written  notice of withdrawal  delivered to the paying agent prior to
the  close of  business  on the  business  day prior to the  Fundamental  Change
purchase date. The notice of withdrawal shall state:

     o    the original principal amount of the withdrawn Series A debentures,

     o    if certificated  Series A debentures have been issued, the certificate
          numbers of the withdrawn Series A debentures, and

     o    the original  principal  amount,  if any, that remains  subject to the
          Fundamental Change purchase notice.

     If the Series A debentures are not in certificated  form,  their withdrawal
notice must comply with appropriate DTC procedures.

     We will be required to purchase the Series A debentures no less than 20 and
no more than 35 business days after the date of our notice of the  occurrence of
the relevant Fundamental Change,  subject to extension to comply with applicable
law.  You may  either  effect  book-entry  transfer  or  deliver  the  Series  A
debentures,  together with necessary  endorsements,  to the office of the paying
agent  after  delivery  of the  Fundamental  Change  purchase  notice to receive
payment of the Fundamental  Change purchase price.  Holders will receive payment
of the  Fundamental  Change  purchase price promptly  following the later of the
Fundamental  Change  purchase  date or the time of  book-entry  transfer  or the
delivery  of the  Series  A  debentures.  If the  paying  agent  holds  money or
securities sufficient to pay the Fundamental Change purchase price of the Series
A debentures on the  Fundamental  Change purchase date, then on the business day
following the Fundamental Change purchase date:

     o    the  Series  A  debentures  will  cease  to be  outstanding  and  cash
          interest,  including  contingent  interest and liquidated  damages, if
          any, will cease to accrue and principal will cease to accrete (whether
          or not  book-entry  transfer  of the  Series A  debentures  is made or
          whether  or not the  Series A  debenture  is  delivered  to the paying
          agent), and

     o    all other rights of the holder will terminate (other than the right to
          receive  the  Fundamental  Change  purchase  price  upon  delivery  or
          transfer of the Series A debentures).

     In connection with any purchase offer pursuant to these provisions,  and to
the extent applicable and required by law, we will:



     o    comply with the  provisions  of Rule  13e-4,  Rule 14e-1 and any other
          tender   offer  rules  under  the  Exchange  Act  which  may  then  be
          applicable; and

     o    file  Schedule TO or any other  required  schedule  under the Exchange
          Act.

     The  rights  of the  holders  to  require  us to  purchase  their  Series A
debentures upon a Fundamental  Change could  discourage a potential  acquirer of
us. The  Fundamental  Change  purchase  feature,  however,  is not the result of
management's knowledge of any specific effort to accumulate shares of our common
stock,  to obtain  control of us by any means or part of a plan by management to
adopt a series of  anti-takeover  provisions.  Instead,  the Fundamental  Change
purchase  feature  is a  standard  term  contained  in other  offerings  of debt
securities similar to the Series A debentures that have been marketed by certain
of the initial purchasers.  The terms of the Fundamental Change purchase feature
resulted from negotiations between the initial purchasers and us.

     The term  Fundamental  Change is limited to specified  transactions and may
not include other events that might adversely affect our financial condition. In
addition, the requirement that we offer to purchase the Series A debentures upon
a Fundamental  Change may not protect holders in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving us.

     No Series A  debentures  may be  purchased  at the option of holders upon a
Fundamental  Change if the accreted  principal amount of the Series A debentures
has been accelerated, and such acceleration has not been rescinded.

     The  definition of  Fundamental  Change  includes a phrase  relating to the
conveyance,  transfer,  sale, lease or disposition of "all or substantially all"
of our consolidated assets. There is no precise,  established  definition of the
phrase "substantially all" under applicable law.  Accordingly,  the ability of a
holder of the  Series A  debentures  to  require  us to  purchase  its  Series A
debentures  as a  result  of the  conveyance,  transfer,  sale,  lease  or other
disposition of less than all of our assets may be uncertain.

     If a Fundamental  Change were to occur, we may not have enough funds to pay
the  Fundamental  Change  purchase  price or we may be prohibited  from doing so
under the terms of other  indebtedness.  See "Risk  Factors"  under the  caption
"Risks  Related to the  Debentures  -- We may not have the  ability to raise the
funds  necessary to purchase the debentures  upon a Fundamental  Change or other
purchase  date, as required by the  indenture  governing  the  debentures."  Our
failure  to  purchase  the  Series  A  debentures  when  required   following  a
Fundamental  Change will constitute an event of default under the indenture with
respect to the Series A debentures.  In addition, we have, and may in the future
incur, other  indebtedness with similar change in control provisions  permitting
holders to  accelerate  or to require us to purchase our  indebtedness  upon the
occurrence of similar events or on some specific  dates,  including the Series B
debentures.

     Our right to purchase Series A debentures, in whole or in part, with common
stock is subject to our satisfying various conditions, including:

     o    the  registration of the common stock under the Securities Act and the
          Exchange Act, if required;

     o    any necessary  qualification  or registration  under  applicable state
          securities  law  or  the   availability  of  an  exemption  from  such
          qualification and registration;

     o    the  information  necessary to calculate the market price is published
          in a daily newspaper of national circulation; and



     o    our common stock is then listed on a national  securities  exchange or
          traded on the Nasdaq National Market.

If such  conditions  are not  satisfied  prior to the close of  business  on the
Fundamental  Change purchase date, we will pay the  Fundamental  Change purchase
price of the Series A debentures  entirely in cash.  We may not change the form,
components or  percentages  of components  of  consideration  to be paid for the
Series A  debentures  once we have given the notice that we are required to give
to  holders  of  Series A  debentures,  except  as  described  in the  preceding
sentence.

CONSOLIDATION, MERGER AND SALE OF ASSETS

     The indenture  prohibits us from consolidating with or merging into another
business entity, or conveying,  transferring or leasing substantially all of our
assets, unless:

     o    either (1) we are the  continuing  entity in the case of a merger,  or
          (2) the resulting,  surviving or acquiring  entity, if other than DST,
          is a U.S.  corporation and it expressly  assumes our obligations  with
          respect  to the  Series A  debentures,  by  executing  a  supplemental
          indenture;

     o    immediately  after  giving  effect  to the  transaction,  no  event of
          default and no circumstances  which,  after notice or lapse of time or
          both,  would  become an event of default,  shall have  happened and be
          continuing; and

     o    we have delivered to the trustee an officers'  certificate and a legal
          opinion confirming that we have complied with the indenture.

     However,  certain of these  transactions  could  constitute  a  Fundamental
Change (as defined above)  permitting  each holder to require us to purchase the
Series A debentures of such holder as described above.

EVENTS OF DEFAULT

     Any of the  following  events  constitute  an event of  default  under  the
indenture with respect to the Series A debentures:

     o    failure to pay interest,  including contingent interest and liquidated
          damages,  if any, on the Series A debentures  for thirty days past the
          applicable due date,

     o    failure  to  pay  the  accreted  principal  amount  of  the  Series  A
          debentures when due (whether at maturity, upon redemption, purchase or
          otherwise),

     o    failure to deliver our common  stock,  or cash in lieu  thereof,  upon
          conversion  of any Series A debenture  and such failure  continues for
          five days following the date such delivery is required,

     o    failure to perform any other  covenant or agreement in the  indenture,
          which  continues for 90 days after written  notice from the trustee or
          holders of 25% of the  outstanding  original  principal  amount of the
          Series A debentures as provided in the indenture,

     o    acceleration of more than $25,000,000 of our indebtedness by its terms
          (including  the  Series  B  debentures)  if  the  acceleration  is not
          rescinded  or such  indebtedness  is not  paid  within  10 days  after
          written  notice from the trustee or holders of 25% of the  outstanding
          original  principal  amount of the Series A debentures  as provided in
          the indenture,



     o    failure to give  timely  notice of a  Fundamental  Change as set forth
          under "-- Fundamental  Change Requires Purchase of Series A Debentures
          by Us at the Option of the Holder" above,  and such failure  continues
          for five days following the date such notice is required, and

     o    specified   events   relating  to  our   bankruptcy,   insolvency   or
          reorganization.

     If there is an event of default  with  respect to the Series A  debentures,
which continues for the requisite amount of time,  either the trustee or holders
of at least 25% of the  aggregate  original  principal  amount  of the  Series A
debentures may declare the accreted principal amount of and interest  (including
contingent  interest  and  liquidated  damages,  if any) on all of the  Series A
debentures to be due and payable immediately, except that if an event of default
occurs due to  bankruptcy,  insolvency  or  reorganization  as  provided  in the
indenture,  then  the  accreted  principal  amount  of and  interest  (including
contingent  interest and liquidated  damages, if any) on the Series A debentures
shall become due and payable  immediately  without any act by the trustee or any
holder of Series A debentures.

     Before the  acceleration  of the maturity of the Series A  debentures,  the
holders of a majority in  aggregate  original  principal  amount of the Series A
debentures  may, on behalf of the holders of all Series A debentures,  waive any
past  default  or  event  of  default  and its  consequences  for the  Series  A
debentures,  except (1) a default in the payment of the  accreted  principal  or
interest  (including  contingent  interest and liquidated  damages, if any) with
respect to the Series A debentures  or (2) a default with respect to a provision
of the  indenture  that  cannot be amended  without  the  consent of each holder
affected by the amendment.  In case of a waiver of a default, that default shall
cease to exist,  any event of default  arising from that default shall be deemed
to have been cured for all  purposes,  and DST, the trustee,  and the holders of
the Series A debentures  will be restored to their former  positions  and rights
under the indenture.

     A holder may institute a suit against us for  enforcement  of such holder's
rights under the indenture, for the appointment of a receiver or trustee, or for
any other remedy only if the following conditions are satisfied:

     o    the holder gives the trustee  written notice of a continuing  event of
          default with respect to the Series A debentures held by that holder,

     o    holders of at least 25% of the aggregate  original principal amount of
          the  Series  A  debentures  make a  request,  in  writing,  and  offer
          reasonable indemnity,  to the trustee for the trustee to institute the
          requested proceeding,

     o    the  trustee  does not  receive  direction  contrary  to the  holder's
          request from  holder's of a majority in original  principal  amount of
          the Series A debentures within 60 days following such notice,  request
          and offer of indemnity under the terms of the indenture, and

     o    the trustee does not institute the requested proceeding within 60 days
          following such notice.

     The indenture  requires us every year to deliver to the trustee a statement
as to any defaults under the indenture.

     A default  in the  payment of the Series A  debentures,  or a default  with
respect to the Series A debentures that causes them to be accelerated,  may give
rise to a  cross-default  under our  credit  facilities  or other  indebtedness,
including the Series B debentures.



SATISFACTION AND DISCHARGE OF THE INDENTURE

     The indenture will generally cease to be of any further effect with respect
to the Series A debentures, if:

     o    we have  delivered  to the trustee for  cancellation  all  outstanding
          Series A debentures (with certain limited exceptions), or

     o    all Series A debentures  not  previously  delivered to the trustee for
          cancellation  have become due and payable,  whether at stated maturity
          or any  redemption  date or any  purchase  date  (including  upon  the
          occurrence of a Fundamental  Change), or upon conversion or otherwise,
          and we have  deposited  with the  trustee  as trust  funds the  entire
          amount  (including our common stock, as applicable)  sufficient to pay
          all of the outstanding Series A debentures,

     o    and if, in either case, we also pay or cause to be paid all other sums
          payable under the indenture by us.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     The Series A debentures are not subject to any defeasance  provisions under
the indenture.

MODIFICATION AND WAIVER

     We may enter into  supplemental  indentures for the purpose of modifying or
amending  the  indenture  with the  consent of holders of at least a majority in
aggregate  original  principal amount of the Series A debentures.  However,  the
consent of all of the holders of the Series A debentures  is required for any of
the following:

     o    to reduce the  percentage  in  original  principal  amount of Series A
          debentures whose holders must consent to an amendment,

     o    to reduce the rate of or extend the time for  payment of regular  cash
          interest,  contingent  interest or liquidated  damages on any Series A
          debenture  or reduce the  amount of any  interest  payment  (including
          contingent  interest or liquidated damages) for accretion of principal
          to be made with  respect  to any  Series A  debenture  or to alter the
          manner of  calculation  of  regular  cash  interest  or  accretion  of
          principal,  contingent  interest or liquidated  damages payable on any
          Series A debenture,

     o    to reduce the original  principal amount or accreted  principal amount
          or change the stated  maturity of principal of, or any  installment of
          principal of or interest on, any Series A debenture,

     o    to reduce the redemption  price or purchase price  (including upon the
          occurrence  of a  Fundamental  Change) or change the time at which any
          Series A debenture may or shall be redeemed or purchased,

     o    to make any Series A debenture payable in a different currency,

     o    to make any change in the  provisions  of the  indenture  relating  to
          waivers of defaults or amendments that require unanimous consent,



     o    to  change  any place of  payment  where the  Series A  debentures  or
          interest thereon is payable,

     o    to make any change  that  adversely  affects  the right to convert the
          Series A debentures or reduces the amount payable on conversion,

     o    to  impair  the right to bring a lawsuit  for the  enforcement  of any
          payment on or after the stated  maturity of any Series A debenture (or
          in the case of redemption or purchase,  on or after the date fixed for
          redemption or purchase), or

     o    to modify  any of the above  provisions  of the  indenture,  except to
          increase  the  percentage  in  original  principal  amount of Series A
          debentures  whose  holders  must consent to an amendment or to provide
          that certain other  provisions of the indenture  cannot be modified or
          waived without the consent of the holder of each outstanding  Series A
          debenture affected by the modification or waiver.

     In addition,  we and the trustee with  respect to the  indenture  may enter
into supplemental  indentures without the consent of the holders of the Series A
debentures for one or more of the following purposes:

     o    to evidence  that another  person has become our  successor  under the
          provisions of the indenture relating to consolidations,  mergers,  and
          sales  of  assets  and  that  the  successor  assumes  our  covenants,
          agreements,  and  obligations  in the  indenture  and in the  Series A
          debentures,

     o    to surrender any of our rights or powers under the  indenture,  to add
          to our  covenants  further  covenants,  restrictions,  conditions,  or
          provisions  for  the  protection  of  the  holders  of  the  Series  A
          debentures,  and  to  make  a  default  in  any  of  these  additional
          covenants,  restrictions,  conditions,  or  provisions a default or an
          event of default under the indenture,

     o    to cure any  ambiguity or to make  corrections  to the indenture or to
          make such other  provisions in regard to matters or questions  arising
          under the indenture that do not adversely  affect the interests of any
          holders of Series A debentures,

     o    to modify or amend the  indenture to permit the  qualification  of the
          indenture or any supplemental  indenture under the Trust Indenture Act
          of 1939 as then in effect,

     o    to add guarantees with respect to the Series A debentures or to secure
          the Series A debentures,

     o    to make any change  that does not  adversely  affect the rights of any
          holder of Series A debentures, and

     o    to  evidence  and  provide  for the  acceptance  of  appointment  by a
          successor or separate trustee with respect to the Series A debentures.

BOOK-ENTRY SYSTEM

     We issued the Series A  debentures  in the form of global  securities.  The
global  securities  were deposited  with, or on behalf of, DTC and registered in
the name of a nominee of DTC.  The Series A  debentures  sold  pursuant  to this
prospectus  will  be  represented  by  one  or  more  new  unrestricted   global



securities.  Except under circumstances described below, the Series A debentures
will not be issued in definitive form.

     Ownership of beneficial  interests in a global  security will be limited to
persons that have accounts with DTC or its nominee  ("participants")  or persons
that may hold interests through participants.  Ownership of beneficial interests
in a global  security will be shown on, and the transfer of that  ownership will
be effected only through, records maintained by DTC or its nominee (with respect
to  interests  of persons  other  than  participants).  The laws of some  states
require  that some  purchasers  of  securities  take  physical  delivery  of the
securities in definitive  form. Such limits and such laws may impair the ability
to transfer beneficial interests in a global security.

     So long as DTC or its nominee is the registered owner of a global security,
DTC or its  nominee,  as the case may be, will be  considered  the sole owner or
holder of the Series A debentures  represented  by that global  security for all
purposes under the  indenture.  Except as provided  below,  owners of beneficial
interests in a global  security will not be entitled to have Series A debentures
represented by that global security  registered in their names, will not receive
or be entitled to receive physical delivery of Series A debentures in definitive
form and will  not be  considered  the  owners  or  holders  thereof  under  the
indenture.  Principal  and  interest  payments,  if any, on Series A  debentures
registered in the name of DTC or its nominee will be made to DTC or its nominee,
as the case may be, as the  registered  owner of the relevant  global  security.
Neither we, the  trustee,  any paying agent or the  security  registrar  for the
Series A debentures will have any  responsibility or liability for any aspect of
the records relating to nor payments made on account of beneficial  interests in
a global  security or for  maintaining,  supervising  or  reviewing  any records
relating to such beneficial interests.

     We expect that DTC or its nominee, upon receipt of any payment of principal
or interest  will credit  immediately  participants'  accounts  with payments in
amounts  proportionate to their respective beneficial interests in the principal
amount of the  relevant  global  security  as shown on the records of DTC or its
nominee.  We also expect that payments by  participants  to owners of beneficial
interests in a global security held through these  participants will be governed
by standing instructions and customary practices, as is the case with securities
held for the  accounts  of  customers  in bearer form or  registered  in "street
name," and will be the responsibility of the participants.

     Beneficial  owners of interests in global  securities who desire to convert
their  interests  into  common  stock  should  contact  their  brokers  or other
participants  or indirect  participants  through whom they hold such  beneficial
interests  to obtain  information  on  procedures,  including  proper  forms and
cut-off times, for submitting requests for conversion.

     Unless  and  until  they are  exchanged  in  whole or in part for  Series A
debentures in definitive  form,  the global  securities  may not be  transferred
except  as a whole by DTC to a nominee  of DTC or by a nominee  of DTC to DTC or
another nominee of DTC.  Transfers between  participants in DTC will be effected
in the ordinary way in accordance with DTC rules and will be settled in same-day
funds.

     If DTC at any time is  unwilling  or unable to  continue  as a  depositary,
defaults  in the  performance  of its  duties  as  depositary  or ceases to be a
clearing agency registered under the Exchange Act or other applicable statute or
regulation, and a successor depositary is not appointed by us within 90 days, we
will issue Series A  debentures  in  definitive  form in exchange for the global
securities relating to the Series A debentures.  In addition, we may at any time
and in our sole  discretion  determine  not to have the Series A  debentures  or
portions of the Series A debentures represented by one or more global securities
and, in that event,  we will  notify the trustee and issue  individual  Series A
debentures in exchange for the global  security or securities  representing  the
Series A debentures.  Series A debentures  so issued in definitive  form will be
issued as registered  Series A debentures in  denominations  of $1,000  original
principal amount and integral multiples thereof,  unless otherwise  specified by
us.



THE TRUSTEE

     JPMorgan Chase Bank is the initial trustee, conversion agent, paying agent,
transfer agent and registrar with respect to the Series A debentures. We perform
mutual fund,  transfer agent and related services for certain funds sponsored by
JPMorgan Chase Bank.

GOVERNING LAW

     The indenture and the Series A debentures are governed by, and construed in
accordance with, the laws of the State of New York.




                     DESCRIPTION OF THE SERIES B DEBENTURES

     We issued $300,000,000 aggregate principal amount of Series B debentures in
a private  placement  on August 12, 2003.  The Series B  debentures  were issued
under an indenture  dated as of August 12, 2003,  between us and JPMorgan  Chase
Bank, as trustee.  Copies of the  indenture are available  from us upon request.
The  following  description  of the Series B debentures is only a summary and is
not  intended to be  comprehensive.  For  purposes of this  "Description  of the
Series B  Debentures,"  the terms "DST," "we," "our," "ours" and "us" refer only
to DST Systems, Inc. and not to any of our subsidiaries.

GENERAL

     The Series B debentures  are limited to $300 million in aggregate  original
principal amount.  The Series B debentures are issued in registered form without
coupons only in denominations  of $1,000 original  principal amount and integral
multiples of $1,000.  We use the term "Series B debenture" in this prospectus to
refer to each $1,000 original principal amount of Series B debentures.

     The Series B  debentures  will mature on August 15,  2023.  On the maturity
date of the Series B debentures,  a holder will receive $1,714.09,  the accreted
principal  amount at maturity of a Series B  debenture.  The Series B debentures
will bear regular  cash  interest at an annual rate equal to 3.625% per annum on
the original principal amount from August 12, 2003, or from the most recent date
to which interest has been paid or provided for,  until August 15, 2008.  During
such period, interest will be payable semiannually in arrears on February 15 and
August 15 of each year, each an interest  payment date,  beginning  February 15,
2004,  to the person in whose name a Series B  debenture  is  registered  at the
close of business on the February 1 or August 1, as the case may be, immediately
preceding the relevant  interest  payment  date,  each of which we refer to as a
"record date".

     Beginning  August 15, 2008, we will not pay regular cash interest  prior to
maturity. Instead, the original principal amount of each Series B debenture will
increase  daily at a rate of 3.625% per year, to produce the accreted  principal
amount at maturity. Prior to August 15, 2008, the accreted principal amount of a
Series B debenture  will be the  original  principal  amount,  and  beginning on
August 15, 2008, the accreted  principal amount will be computed on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months.

     If any date on which regular cash interest is payable,  the maturity  date,
or any  redemption  date or purchase date  (including  upon the  occurrence of a
Fundamental  Change,  as  described  below) is not a business  day,  we will pay
interest on the next  business day (without any interest or other payment due on
the delay).  Regular cash interest on the Series B debentures will be calculated
on the basis of a 360-day year  consisting  of twelve  30-day  months.  The term
"business  day," when used with respect to any place of payment for the Series B
debentures,  means a day other than a Saturday or a Sunday, a legal holiday or a
day on which banking  institutions  or trust  companies in that place of payment
are authorized or obligated by law to close.

     In  addition,  we will pay  contingent  interest on the Series B debentures
under the  circumstances  described  below under " --  Contingent  Interest" and
liquidated damages as set forth in the registration rights agreement.

     Regular  cash  interest  for the Series B  debentures  will accrue from and
including  the date of issue or from and  including  the last date in respect of
which interest has been paid, as the case may be, to, but excluding, the earlier
of (i) August 15, 2008 and (ii) the  interest  payment  date or a purchase  date
upon a Fundamental Change, as the case may be.



     Holders may present Series B debentures for conversion at the office of the
conversion  agent  and may  present  Series B  debentures  for  exchange  or for
registration  of  transfer  at the  office or agency  maintained  by us for that
purpose in the Borough of Manhattan,  The City of New York. We will not charge a
service  charge  for any  exchange  or  registration  of  transfer  of  Series B
debentures. However, we may require payment of a sum sufficient to cover any tax
or other  governmental  charge  payable  for the  registration  of  transfer  or
exchange.  The trustee will serve as the initial conversion agent, paying agent,
registrar and transfer  agent for the Series B  debentures.  At any time, we may
designate additional paying agents and transfer agents. However, at all times we
will be required to maintain a paying agent and transfer  agent for the Series B
debentures in the Borough of Manhattan, The City of New York.

     Any monies  deposited  with the trustee or any paying agent or then held by
us in trust for the payment of  principal  and  interest  (including  contingent
interest and liquidated  damages, if any) on the Series B debentures that remain
unclaimed  for two years  after the date the  payments  became due and  payable,
shall,  at our request,  be repaid to us or released from trust,  as applicable,
and the holder of the Series B debenture  shall  thereafter  look,  as a general
unsecured creditor, only to us for payment thereof.

RANKING

     The  Series B  debentures  are our  direct,  unsecured  and  unsubordinated
obligations.  The Series B debentures  rank equally in right of payment with all
of our other existing and future unsecured and unsubordinated  indebtedness.  In
addition,  the  Series B  debentures  effectively  rank  junior  to any  secured
indebtedness  that we may  incur  to the  extent  of the  assets  securing  such
indebtedness.   We  currently  conduct  part  of  our  operations   through  our
subsidiaries.  Claims  of  creditors  of  those  subsidiaries,  including  trade
creditors and secured  creditors,  will  generally have a claim to the assets of
our  subsidiaries  that is  superior to the claims of our  creditors,  including
holders of the Series B debentures.

     As of September 30, 2003, we had outstanding approximately $26.0 million of
unsecured,  unsubordinated indebtedness ranking equally in right of payment with
the  Series  B   debentures,   and   approximately   $13.4  million  of  secured
indebtedness,  excluding indebtedness of subsidiaries. As of September 30, 2003,
our subsidiaries had approximately  $127.4 million of indebtedness  outstanding,
all of which ranks structurally senior to the Series B debentures. The indenture
does not limit the amount of indebtedness we or our subsidiaries may incur.

CONTINGENT INTEREST

     For the period from August 20, 2008 to February  14, 2009,  and  thereafter
for any  six-month  interest  period  measured  from February 15 to August 14 or
August 15 to February 14, we will pay contingent interest if the average trading
price per Series B  debenture  for the  applicable  five  trading-day  reference
period  equals or exceeds  120% of the accreted  principal  amount of a Series B
debenture.  The "five trading-day  reference period" means the five trading days
ending on the second trading day  immediately  preceding the relevant  six-month
interest period.

     The amount of contingent interest payable per Series B debenture in respect
of the period from August 20, 2008 to February 14, 2009,  and thereafter for any
six-month  interest  period will be equal to 0.19% of the average  trading price
per Series B debenture for the applicable five trading-day reference period.

     The record date and payment date for contingent  interest,  if any, will be
the same as the  regular  record date and payment  date,  respectively,  for the
semi-annual interest payments on the Series B debentures.



     The "trading price" is as defined under "-- Conversion Rights -- Conversion
Upon  Satisfaction  of Trading Price  Condition,"  provided that if at least one
required bid for the Series B debentures  is not obtained by the trustee,  or in
our  reasonable  judgment the bid quotations are not indicative of the secondary
market value of the Series B debentures,  then the trading price of the Series B
debentures  will  equal  (a) the  applicable  conversion  rate of the  Series  B
debentures multiplied by (b) the average of the last reported sale prices of our
common stock for the applicable five trading-day reference period.

     The "last  reported  sale price" of our common  stock on any date means the
closing  sale price per share (or,  if no closing  sale price is  reported,  the
average  of the bid and asked  prices or, if more than one in either  case,  the
average  of the  average  bid and the  average  asked  prices)  on that  date as
reported in composite transactions for the principal U.S. securities exchange on
which our common stock is traded or, if our common stock is not listed on a U.S.
national or regional  securities  exchange,  as reported by the Nasdaq  National
Market.  The last reported sale price will be  determined  without  reference to
after-hours or extended  market  trading.  If our common stock is not listed for
trading on a U.S. national or regional  securities  exchange and not reported by
the Nasdaq  National Market on the relevant date, the "last reported sale price"
will be the last quoted bid for our common stock in the over-the-counter  market
on the  relevant  date as reported by the National  Quotation  Bureau or similar
organization.  If our common  stock is not so quoted,  the "last  reported  sale
price"  will be the  average of the  midpoint of the last bid and ask prices for
our common  stock on the  relevant  date from each of at least three  nationally
recognized independent investment banking firms selected by us for this purpose.

     "Trading  day" means a day during  which  trading in  securities  generally
occurs on the NYSE or, if our  common  stock is not  listed on the NYSE,  on the
principal  other U.S.  national  or  regional  securities  exchange on which our
common  stock is then  listed  or, if our  common  stock is not listed on a U.S.
national or regional securities  exchange,  on the Nasdaq National Market or, if
our common stock is not reported by the Nasdaq National Market, on the principal
other market on which our common stock is then traded.

     We will notify the holders of the Series B debentures  upon a determination
that they will be  entitled to receive  contingent  interest  with  respect to a
semi-annual  interest period.  In connection with providing such notice, we will
issue a press release and publish a notice containing  information regarding the
contingent  interest  determination in a newspaper of general circulation in The
City of New York or publish  the  information  on our web site or  through  such
other public medium as we may use at that time.

CONVERSION RIGHTS

     Subject to the conditions and during the periods  described below,  holders
may convert their Series B debentures  into shares of our common stock initially
at a conversion  rate of 20.3732  shares of common stock per Series B debenture.
The  conversion  price  as of any  date  of  determination  is a  dollar  amount
(initially  $49.08 per share of common  stock)  derived by dividing the accreted
principal  amount of a Series B debenture (which will be $1,000 until August 15,
2008) by the conversion rate in effect on such date. The conversion rate and the
corresponding  conversion  price in effect at any given time are  referred to as
the  "applicable   conversion  rate"  and  the  "applicable  conversion  price,"
respectively, and will be subject to adjustment as described below. A holder may
convert  fewer  than all of such  holder's  Series B  debentures  so long as the
Series B  debentures  converted  are an  integral  multiple  of $1,000  original
principal amount.

     Upon conversion,  we may choose to deliver, in lieu of shares of our common
stock,  cash or a  combination  of cash  and  shares  of our  common  stock,  as
described below. For a discussion of the U.S. federal income tax consequences of
conversion to a holder, see "Material U.S. Federal Income Tax Considerations."

     Except as otherwise  described below, you will not receive any cash payment
representing accrued and unpaid interest, if any (including contingent interest,
if any) or increases on the accreted principal



amount of the Series B debentures upon conversion of a Series B debenture and we
will not  adjust  the  conversion  rate to account  for the  accrued  and unpaid
interest,  if any (including contingent interest and liquidated damages, if any)
or increases on the accreted  principal amount of the Series B debentures.  Upon
conversion  we will  deliver  to you cash or  shares  of our  common  stock,  as
described  below.  Delivery of cash or shares of common  stock will be deemed to
satisfy our  obligation  to pay the  accreted  principal  amount of the Series B
debentures,  including  accrued  and unpaid  cash  interest,  if any  (including
contingent  interest,  if any).  Increases on the accreted  principal amount and
accrued and unpaid cash interest, if any (including contingent interest, if any)
will be deemed paid in full rather than  canceled,  extinguished  or  forfeited.
Notwithstanding  conversion  of any  Series B  debentures  by a holder  thereof,
accrued and unpaid  liquidated  damages,  if any, to the conversion date will be
paid to such holder on the settlement date for such conversion.

     If a holder  converts  Series B  debentures,  we will pay any  documentary,
stamp or similar  issue or  transfer  tax due on the  issuance  of shares of our
common  stock  upon the  conversion,  unless the tax is due  because  the holder
requests the shares to be issued or delivered to a person other than the holder,
in which case the holder will pay that tax.

     To  convert  your  Series B  debenture  into  common  stock you must do the
following:

     o    complete and manually sign the notice of conversion on the back of the
          Series B  debenture  or  facsimile  of the  notice of  conversion  and
          deliver this notice to the conversion agent;

     o    surrender the Series B debenture to the conversion agent;

     o    if required, furnish appropriate endorsements and transfer documents;

     o    if required, pay all transfer or similar taxes; and

     o    if  required,   pay  funds  equal  to  interest,  if  any,  (including
          contingent  interest,  if any)  payable on the next  interest  payment
          date.

     If your  interest is a beneficial  interest in a global Series B debenture,
to convert  you must comply with the last three  requirements  listed  above and
comply with the DTC's  procedures  for  converting  a  beneficial  interest in a
global Series B debenture.  The conversion date will be the date on which all of
the foregoing requirements have been satisfied.  Settlement of our obligation to
deliver  shares or cash with  respect  to a  conversion  will occur on the dates
described below under "-- Payment Upon Conversion." A certificate for the number
of full  shares of our  common  stock into  which any  Series B  debentures  are
converted,  or cash  in  lieu  thereof,  together  with  any  cash  payment  for
fractional shares, will be delivered through the conversion agent, other than in
the case of holders of Series B debentures in book-entry  form,  which shares or
cash will be delivered in accordance with DTC customary practices.

     If a holder has already  delivered  a purchase  notice as  described  under
either "-- Purchase of Series B Debentures by Us at the Option of the Holder" or
"--  Fundamental  Change  Requires  Purchase of Series B Debentures by Us at the
Option of the Holder" with respect to a Series B debenture,  however, the holder
may not surrender  that Series B debenture for  conversion  until the holder has
withdrawn the purchase notice in accordance with the indenture.

     Holders of Series B debentures at the close of business on a regular record
date will receive payment of interest, if any, including contingent interest and
liquidated damages, if any, payable on the corresponding  interest payment date,
notwithstanding the conversion of such Series B debentures at any time after the
close of business on such regular record date.  Series B Debentures  surrendered
for  conversion  by a holder during the period from the close of business on any
regular  record date to the opening of



business on the immediately  following interest payment date must be accompanied
by payment of an amount  equal to the  interest,  if any,  including  contingent
interest,  if any,  that the holder is to  receive  on the Series B  debentures;
provided,  however, that no such payment need be made if (1) we have specified a
redemption  date that is after a record date and on or prior to the  immediately
following interest payment date, (2) we have specified a purchase date following
a  Fundamental  Change that is during  such  period or (3) any overdue  interest
(including overdue contingent interest, if any) exists at the time of conversion
with  respect  to such  Series  B  debentures,  to the  extent  of such  overdue
interest.

     PAYMENT UPON CONVERSION

     CONVERSION  ON OR PRIOR TO THE FINAL  NOTICE  DATE.  In the  event  that we
receive your notice of  conversion  on or prior to the day that is 20 days prior
to stated maturity or, with respect to Series B debentures  being redeemed,  the
applicable  redemption date (the "final notice date"), the following  procedures
will apply:

     If we choose to satisfy  all or any  portion of our  obligation  to deliver
common stock upon  conversion  (the  "conversion  obligation")  in cash, we will
notify you  through  the trustee of the dollar  amount to be  satisfied  in cash
(which must be expressed  either as 100% of the  conversion  obligation  or as a
fixed dollar amount) at any time on or before the date that is two business days
following  receipt  of  your  notice  of  conversion  ("cash  settlement  notice
period"). If we timely elect to pay cash for any portion of the shares otherwise
issuable to you,  you may retract the  conversion  notice at any time during the
two business day period immediately  following the cash settlement notice period
("conversion  retraction  period").  If  no  such  election  is  made,  no  such
retraction can be made (and a conversion notice shall be irrevocable).

     Settlement amounts will be computed as follows:

     o    If we elect to satisfy the entire conversion  obligation in shares, we
          will  deliver  to you a number of  shares,  for each  $1,000  original
          principal  amount  of  Series B  debentures,  equal to the  applicable
          conversion rate. In addition, if on the date you submit your notice of
          conversion there exists a registration  default under the registration
          rights  agreement,  and the shares of common stock you will receive on
          conversion  are  neither  registered  under  the  Securities  Act  nor
          immediately   freely  saleable  pursuant  to  Rule  144(k)  under  the
          Securities Act, we will deliver to you additional shares as liquidated
          damages  (the  "liquidated   damages  shares")  equal  to  3%  of  the
          applicable  conversion rate for each $1,000 original  principal amount
          of Series B debentures.  We will pay cash for all fractional shares of
          common stock. The cash payment for fractional  shares will be based on
          the last  reported  sale price of our common  stock on the trading day
          immediately prior to the conversion date.

     o    If we elect to satisfy the entire  conversion  obligation  in cash, we
          will  deliver to you,  for each $1,000  original  principal  amount of
          Series B  debentures,  cash in an amount  equal to the  product of the
          applicable conversion rate and the average last reported sale price of
          our common stock for the 10 trading-day period beginning the day after
          the  conversion  retraction  period  (the "cash  settlement  averaging
          period").

     o    If we  elect to  satisfy  a fixed  portion  (other  than  100%) of the
          conversion obligation in cash, we will deliver to you such cash amount
          ("cash  amount")  and a number of  shares,  for each  $1,000  original
          principal  amount  of  Series B  debentures,  equal to the  applicable
          conversion  rate,  plus liquidated  damages shares,  if any, minus the
          number of shares equal to the sum, for each day of the cash settlement
          averaging  period,  of (x) 10% of the cash amount,  divided by (y) the
          last reported price of our common stock;  provided,  however, that the
          number of shares will not be less than zero.  We will pay cash for all
          fractional  shares of



          common stock. The cash payment for fractional  shares will be based on
          the last  reported  sale price of our common  stock on the trading day
          immediately prior to the conversion date.

     If we choose to satisfy all or any portion of the conversion  obligation in
cash and the conversion notice has not been retracted,  then settlement (in cash
and/or  shares)  will occur on the business day  following  the cash  settlement
averaging period.  If we choose to satisfy the entire  conversion  obligation in
shares of our common stock then  settlement will occur on the third business day
following the conversion date.

     CONVERSION  AFTER THE FINAL NOTICE DATE.  In the event that we receive your
notice of conversion  after the final notice date,  we will not send  individual
notices  of  our  election  to  satisfy  all or any  portion  of the  conversion
obligation in cash.  Instead,  if we choose to satisfy all or any portion of the
conversion  obligation  in cash after the final notice date, we will send, on or
prior to final notice date, a single  notice to the trustee of the dollar amount
to be  satisfied  in  cash  (which  must  be  expressed  either  as  100% of the
conversion  obligation or as a fixed dollar amount).  Settlement amounts will be
computed and settlement dates will be determined in the same manner as set forth
above under "-- Conversion on or Prior to the Final Notice Date" except that the
"cash settlement  averaging period" shall be the 10 trading-day period beginning
on the day after  receipt of your  notice of  conversion.  If we do not elect to
satisfy all or any portion of the conversion obligation in cash, then settlement
will occur on the first business day following the conversion date.

     CONDITIONS TO CONVERSION

     Holders may surrender  their Series B debentures for conversion into shares
of our  common  stock  prior to stated  maturity  only  under the  circumstances
described  below.  For a discussion of the federal income tax  consequences of a
conversion of the Series B debentures into our common stock,  see "Material U.S.
Federal Income Tax Considerations."

     CONVERSION  UPON  SATISFACTION  OF  SALE  PRICE  CONDITION.  A  holder  may
surrender  any of its Series B  debentures  for  conversion  into  shares of our
common stock  during any calendar  quarter  after  September  30, 2003 (and only
during  such  calendar  quarter) if the last  reported  sale price of our common
stock for at least 20 trading days during the period of 30  consecutive  trading
days ending on the last trading day of the previous  calendar quarter is greater
than or equal to 120% of the  applicable  conversion  price  (initially  120% of
$49.08, or $58.90), which we refer to as the "conversion trigger price".

     The  applicable  conversion  price of a Series B  debenture  at any time is
dependent  upon the  accreted  principal  amount of a Series B debenture at that
time and  therefore  both the  applicable  conversion  price and the  conversion
trigger price will increase  following August 15, 2008 as the accreted principal
amount of a Series B debenture  increases.  The  following  table sets forth the
conversion trigger prices at August 15 of each year beginning 2008.



                           CONVERSION TRIGGER PRICES*

                                      APPLICABLE                  CONVERSION
AUGUST 15,                            CONVERSION PRICE            TRIGGER PRICE
----------------------------------    ----------------            -------------
2008..............................    $49.08                      $58.90
2009..............................    $50.88                      $61.06
2010..............................    $52.74                      $63.29
2011..............................    $54.67                      $65.60
2012..............................    $56.67                      $68.00
2013..............................    $58.74                      $70.49
2014..............................    $60.89                      $73.07
2015..............................    $63.12                      $75.74
2016..............................    $65.43                      $78.51
2017..............................    $67.82                      $81.38
2018..............................    $70.30                      $84.36
2019..............................    $72.87                      $87.45
2020..............................    $75.54                      $90.65
2021..............................    $78.30                      $93.96
2022..............................    $81.17                      $97.40
2023..............................    $84.13                      $100.96

-------------------
*    This table assumes no events have occurred that would require an adjustment
     to the conversion rate.

     CONVERSION  UPON  SATISFACTION  OF TRADING  PRICE  CONDITION.  A holder may
surrender any of its Series B debentures  for  conversion  into our common stock
prior to the stated maturity during the five business days immediately following
any five  consecutive  trading-day  period in which the trading price per $1,000
original  principal  amount of Series B debentures  (as  determined  following a
request by a holder of the Series B debentures in accordance with the procedures
described below) for each day of that period was less than 95% of the product of
the last reported sale price of our common stock and the  applicable  conversion
rate of such Series B debentures  on each such day;  provided,  however,  that a
holder may not convert Series B debentures in reliance on this  provision  after
August 15, 2018 if on any trading day during such five  consecutive  trading-day
period  the last  reported  sale  price of our  common  stock  was  between  the
applicable  conversion  price  of  the  Series  B  debentures  and  120%  of the
applicable conversion price of the Series B debentures.

     The "trading price" of the Series B debentures on any date of determination
means the average of the secondary  market bid  quotations  per $1,000  original
principal  amount  of the  Series  B  debentures  obtained  by the  trustee  for
$10,000,000   original   principal   amount  of  the  Series  B  debentures   at
approximately  3:30 p.m.,  New York City time, on such  determination  date from
three independent  nationally recognized securities dealers we select;  provided
that if three such bids cannot  reasonably  be obtained by the trustee,  but two
such bids are obtained,  then the average of the two bids shall be used,  and if
only one such bid can reasonably be obtained by the trustee,  that one bid shall
be  used.  If the  trustee  cannot  reasonably  obtain  at  least  one  bid  for
$10,000,000  original  principal  amount  of  the  Series  B  debentures  from a
nationally recognized securities dealer, or in our reasonable judgment,  the bid
quotations are not indicative of the secondary  market value of $1,000  original
principal  amount of the Series B debentures,  then the trading price per $1,000
original  principal  amount of the Series B debentures will be deemed to be less
than 95% of the product of the last  reported sale price of our common stock and
the applicable conversion rate.



     In connection  with any conversion  upon  satisfaction of the above trading
pricing condition, the trustee shall have no obligation to determine the trading
price of the Series B debentures  unless we have requested  such  determination;
and we shall have no obligation to make such request unless a holder provides us
with reasonable  evidence that the trading price per $1,000  original  principal
amount of the Series B  debentures  would be less than 95% of the product of the
last reported sale price of our common stock and the applicable conversion rate.
At such time,  we shall  instruct the trustee to determine  the trading price of
the Series B debentures beginning on the next trading day and on each successive
trading day until the trading price per $1,000 original  principal amount of the
Series B  debentures  is greater than or equal to 95% of the product of the last
reported sale price of our common stock and the applicable conversion rate.

     CONVERSION UPON REDEMPTION.  If we elect to redeem the Series B debentures,
holders may convert Series B debentures  into our common stock at any time prior
to the  close  of  business  on  the  business  day  immediately  preceding  the
redemption  date, even if the Series B debentures are not otherwise  convertible
at such time.

     CONVERSION UPON SPECIFIED CORPORATE TRANSACTIONS. If we elect to:

     o    distribute  to all  holders  of our  common  stock  certain  rights or
          warrants  entitling them to purchase,  for a period expiring within 60
          days after the date of the distribution, shares of our common stock at
          a price  per  share of less  than the  market  price of a share of our
          common stock on the record date for the distribution, or

     o    distribute  to all  holders  of our  common  stock  our  assets,  debt
          securities  or  certain  rights  to  purchase  our  securities,  which
          distribution  has a per  share  value as  determined  by our  board of
          directors  exceeding 10% of the last reported sale price of a share of
          our  common  stock  on  the  trading  day  immediately  preceding  the
          declaration date for such distribution,

we must notify the holders of the Series B debentures  at least 20 business days
prior to the  ex-dividend  date for such  distribution.  Once we have given such
notice,  holders may surrender  their Series B debentures  for conversion at any
time until the earlier of the close of business on the business day  immediately
prior to the ex-dividend date or our announcement  that such  distribution  will
not take place, even if the Series B debentures are not otherwise convertible at
such  time;  provided,  however,  that a holder may not  exercise  this right to
convert if the holder may participate in the  distribution  without  conversion.
The "ex-dividend  date" is the first date upon which a sale of the common stock,
regular way on the relevant  exchange or in the  relevant  market for our common
stock,  does not  automatically  transfer  the  right to  receive  the  relevant
dividend or distribution from the seller of the common stock to its buyer.

     In addition,  if we are party to a  consolidation,  merger or binding share
exchange  pursuant  to which our  common  stock  would be  converted  into cash,
securities or other  property,  a holder may surrender  Series B debentures  for
conversion  at any time from and after  the date  which is 15 days  prior to the
anticipated  effective  date of the  transaction  until 15 days after the actual
effective  date  of  such  transaction  (or if such  transaction  constitutes  a
Fundamental Change, until the business day immediately  preceding the applicable
Fundamental Change purchase date). If we engage in certain  reclassifications of
our  common  stock  or are a party to a  consolidation,  merger,  binding  share
exchange or transfer of all or substantially all of our assets pursuant to which
our common stock is converted into cash,  securities or other property,  then at
the effective time of the transaction, the right to convert a Series B debenture
into  our  common  stock  will be  changed  into a right to  convert  a Series B
debenture  into the kind and amount of cash,  securities or other  property that
the  holder  would  have  received  if the  holder  had  converted  its Series B
debentures  immediately  prior  to  the  transaction.  If the  transaction  also
constitutes a Fundamental  Change,  as defined below, a holder can require us to
purchase  all or a portion of its Series B debentures  as described  below under
"--  Fundamental  Change  Requires  Purchase of Series B Debentures by Us at the
Option of the Holder."



     The  Exchange   (described  in  Summary--Recent   Developments")  does  not
constitute a specified corporate transaction permitting conversion.

     CONVERSION RATE ADJUSTMENTS

     The  applicable  conversion  rate will be  subject to  adjustment,  without
duplication, upon the occurrence of any of the following events:

          (1) the payment of  dividends  and other  distributions  on our common
     stock payable exclusively in shares of our common stock,

          (2) the  distribution  to all holders of our common stock of rights or
     warrants that allow the holders to purchase  shares of our common stock for
     a period expiring within 60 days from the date of issuance of the rights or
     warrants  at  less  than  the  market  price  on the  record  date  for the
     determination of shareholders entitled to receive the rights or warrants,

          (3) subdivisions or combinations of our common stock,

          (4)  distributions  to all holders of our common  stock of our assets,
     debt  securities,  shares of our  capital  stock or rights or  warrants  to
     purchase our securities  (excluding any dividend,  distribution or issuance
     covered by clause (1) or (2) above and any  dividend or  distribution  paid
     exclusively in cash),  the conversion rate will be increased by multiplying
     the conversion rate by a fraction,

               (a) the  numerator  of which is the current  market  price of our
          common stock plus the fair market value, as determined by our board of
          directors, of the portion of those assets, debt securities,  shares of
          capital stock or rights or warrants so  distributed  applicable to one
          share of common stock, and

               (b) the  denominator  of which is the current market price of our
          common stock.

          The  "current  market  price" of our common stock means the average of
     the last  reported  sale  prices  for the first 10 trading  days from,  and
     including,  the  ex-dividend  date (as defined  above in  "--Conditions  to
     Conversion--Conversion  Upon Specified  Corporate  Transactions")  for such
     dividend or distribution.

          In the event that we make a distribution  to all holders of our common
     stock  consisting  of capital stock of, or similar  equity  interests in, a
     subsidiary  or other  business  unit of ours,  the fair market value of the
     securities so distributed will be based on the average of the closing sales
     prices of those  securities  for each of the 10 trading days  commencing on
     and including the fifth trading day after the ex-dividend  date (as defined
     above in "--Conditions to  Conversion--Conversion  Upon Specified Corporate
     Transactions")  for such dividend or distribution on the NYSE or such other
     national or regional  exchange or market on which the  securities  are then
     listed or quoted.

          (5) we  make  distributions  consisting  exclusively  of  cash  to all
     holders of our common  stock,  excluding  any cash  dividend  on our common
     stock to the  extent  that the  aggregate  cash  dividend  per share of our
     common  stock  in any  quarter  does  not  exceed  $0.0025  (the  "dividend
     threshold  amount") (the dividend threshold amount is subject to adjustment
     on the same basis as the conversion rate,  provided that no adjustment will
     be made to the dividend  threshold  amount for any  adjustment  made to the
     conversion rate pursuant to this clause (5)), in which event the conversion
     rate will be adjusted by multiplying the conversion rate by a fraction,



               (a) the  numerator  of which will be the current  market price of
          our  common  stock  plus the  amount  per  share of such  dividend  or
          distribution and

               (b) the  denominator of which will be the current market price of
          our common stock.

          If an  adjustment  is  required  to be made under this clause (5) as a
     result of a distribution that is a dividend,  the adjustment would be based
     upon the amount by which the  distribution  exceeds the dividend  threshold
     amount.  If an adjustment is required to be made under this clause (5) as a
     result of a distribution  that is not a dividend,  the adjustment  would be
     based upon the full amount of the distribution.

          (6) we or one of our  subsidiaries  makes a payment  in  respect  of a
     tender offer or exchange  offer for our common stock to the extent that the
     cash and value of any other consideration included in the payment per share
     of our common  stock  exceeds  the last  reported  sale price of our common
     stock on the trading day next  succeeding the last date on which tenders or
     exchanges  may be made  pursuant  to such  tender or  exchange  offer,  the
     conversion  rate will be adjusted by multiplying  the conversion  rate by a
     fraction,

               (a) the numerator of which will be the sum of (x) the fair market
          value,  as  determined  by our board of  directors,  of the  aggregate
          consideration  payable for all shares of our common  stock we purchase
          in such tender or exchange  offer and (y) the product of the number of
          shares of our common stock  outstanding less any such purchased shares
          and the last  reported  sale price of our common  stock on the trading
          day next succeeding the expiration of the tender or exchange offer and

               (b) the denominator of which will be the product of the number of
          shares of our common stock  outstanding,  including any such purchased
          shares,  and the last  reported  sale price of our common stock on the
          trading day next  succeeding  the expiration of the tender or exchange
          offer.

     Notwithstanding  the foregoing,  in the event of an adjustment  pursuant to
clauses  (4),  (5) or (6) above,  in no event will the  conversion  rate  exceed
28.5225, subject to adjustment pursuant to clauses (1), (2) and (3) above.

     To the extent that we have a rights plan in effect upon  conversion  of the
Series B debentures  into common stock  (including  the rights plan described in
"Description of Capital  Stock--Rights Plan" below), the holder will receive, in
addition to the common stock, the rights under the rights plan unless the rights
have separated  from the common stock prior to the time of conversion,  in which
case the  conversion  rate will be adjusted at the time of  separation  as if we
distributed  to all holders of our common stock,  our assets,  debt  securities,
shares of our capital stock or rights or warrants to purchase our  securities as
described in clause (4) above.

     In addition to these  adjustments,  we may increase the conversion  rate as
our board of directors  considers  advisable to avoid or diminish any income tax
to holders of our common stock or rights to purchase our common stock  resulting
from any dividend or  distribution of stock (or rights to acquire stock) or from
any event  treated as such for income tax  purposes.  We may also,  from time to
time, to the extent permitted by applicable law, increase the conversion rate by
any amount for any period of at least 20 business days if our board of directors
has determined that such increase would be in our best  interests.  If



our board of directors  makes such a  determination,  it will be conclusive.  We
will give  holders of Series B  debentures  at least 15 days'  notice of such an
increase in the conversion rate.

     "Market price" means the average of the last reported sale prices per share
of our common stock for the 10 trading-day  period ending on the applicable date
of  determination  (if the applicable date of determination is a trading day or,
if  not,  then  on the  last  trading  day  prior  to  the  applicable  date  of
determination),  appropriately  adjusted to take into  account  the  occurrence,
during the period  commencing  on the first of the  trading  days  during the 10
trading-day  period and ending on the applicable date of  determination,  of any
event  that  would  result in an  adjustment  of the  conversion  rate under the
indenture.

     The applicable conversion rate will not be adjusted:

     o    upon the  issuance of any shares of our common  stock  pursuant to any
          present or future plan providing for the  reinvestment of dividends or
          interest  payable on our  securities  and the investment of additional
          optional amounts in shares of our common stock under any plan,

     o    upon the  issuance  of any  shares of our  common  stock or options or
          rights to  purchase  those  shares  pursuant  to any present or future
          employee, director or consultant benefit plan or program of or assumed
          by us or any of our subsidiaries,

     o    upon the  issuance of any shares of our common  stock  pursuant to any
          option,  warrant,  right or  exercisable,  exchangeable or convertible
          security not described in the preceding  bullet and  outstanding as of
          the date the Series B debentures were first issued (no adjustment will
          be made for the issuance of common  stock  pursuant to  conversion  of
          Series A debentures),

     o    for a change in the par value of the common stock, or

     o    for accrued and unpaid cash interest, including contingent interest or
          liquidated  damages,  if any, or accretion of the principal  amount of
          Series B debentures.

     No adjustment in the applicable conversion rate will be required unless the
adjustment  would  require  an  increase  or  decrease  of at  least  1% of  the
applicable conversion rate. If the adjustment is not made because the adjustment
does not  change  the  applicable  conversion  rate by more  than  1%,  then the
adjustment  that is not made will be carried  forward and taken into  account in
any future adjustment.

     In the event of:

     o    a taxable  distribution  to  holders of shares of common  stock  which
          results in an adjustment of the conversion rate; or

     o    an increase in the conversion rate at our discretion,

the holders of the Series B debentures may, in certain circumstances,  be deemed
to have  received  a  distribution  subject  to  U.S.  federal  income  tax as a
dividend. In addition, for Non-U.S. Holders of Series B debentures,  this deemed
distribution  may be  subject  to U.S.  federal  withholding  requirements.  See
"Material U.S. Federal Income Tax Considerations."

OPTIONAL REDEMPTION

     No sinking  fund is provided for the Series B  debentures.  Prior to August
20, 2008, the Series B debentures will not be redeemable. On or after August 20,
2008, we may redeem for cash all or part of the



Series B  debentures  at any  time,  upon not less than 30 days nor more than 60
days notice before the redemption date by mail to the trustee,  the paying agent
and each holder of Series B debentures.

     If redeemed at our option,  the Series B  debentures  will be redeemed at a
redemption price equal to the accreted  principal  amount,  plus any accrued and
unpaid cash interest,  including  contingent interest and liquidated damages, if
any, to the redemption  date.  The table below shows the redemption  prices of a
Series B debenture on August 15,  2008,  on each August 15  thereafter  prior to
maturity  and at maturity on August 15, 2023  (assuming  there is no accrued and
unpaid cash interest,  contingent interest or liquidated damages).  In addition,
the redemption  price of a Series B debenture that is redeemed between the dates
listed  below would  include an  additional  amount  reflecting  the  additional
principal  amount  that has  accreted  on such  Series  B  debenture  since  the
immediately preceding date in the table below.



                                                                                             
                                                 SERIES B
                                                 DEBENTURE ISSUE
REDEMPTION DATE: AUGUST 15,                      PRICE(1)                 ACCRETION AMOUNT(2)         REDEMPTION PRICE(1) + (2)
----------------------------------------------   ---------------          -------------------         -------------------------
2008..........................................   $1,000.00                $0.00                       $1,000.00
2009..........................................   $1,000.00                $36.58                      $1,036.58
2010..........................................   $1,000.00                $74.50                      $1,074.50
2011..........................................   $1,000.00                $113.80                     $1,113.80
2012..........................................   $1,000.00                $154.54                     $1,154.54
2013..........................................   $1,000.00                $196.77                     $1,196.77
2014..........................................   $1,000.00                $240.55                     $1,240.55
2015..........................................   $1,000.00                $285.92                     $1,285.92
2016..........................................   $1,000.00                $332.96                     $1,332.96
2017..........................................   $1,000.00                $381.72                     $1,381.72
2018..........................................   $1,000.00                $432.26                     $1,432.26
2019..........................................   $1,000.00                $484.65                     $1,484.65
2020..........................................   $1,000.00                $538.96                     $1,538.96
2021..........................................   $1,000.00                $595.25                     $1,595.25
2022..........................................   $1,000.00                $653.60                     $1,653.60
2023..........................................   $1,000.00                $714.09                     $1,714.09



     If we  decide  to  redeem  fewer  than  all of  the  outstanding  Series  B
debentures,  the trustee will select the Series B debentures  to be redeemed (in
original principal amounts of $1,000 or integral multiples thereof) by lot, on a
pro rata basis or by another method the trustee considers fair and appropriate.

     If the trustee  selects a portion of your  Series B  debenture  for partial
redemption  and you  convert  a  portion  of the same  Series B  debenture,  the
converted portion will be deemed to be from the portion selected for redemption.

     In the event of any  redemption  in part, we will not be required to issue,
register the  transfer of or exchange any Series B debenture  during a period of
15 days before the mailing of the redemption notice.

     For a discussion of the U.S. federal income tax consequences to a holder of
our redemption of the Series B debentures, see "Material U.S. Federal Income Tax
Considerations."



PURCHASE OF SERIES B DEBENTURES BY US AT THE OPTION OF THE HOLDER

     Holders have the right to require us to purchase the Series B debentures on
August 15, 2008,  August 15, 2013 and August 15, 2018 (each, a "purchase date").
We will pay cash for all Series B debentures purchased by us on August 15, 2008.
For purchases on August 15, 2013 and August 15, 2018 we may, at our option,  pay
the  purchase  price in cash,  shares of our common  stock,  or any  combination
thereof.  We may pay all or a  portion  of the  purchase  price in shares of our
common stock as long as our common stock is then listed on a national securities
exchange or traded on the Nasdaq National Market and if certain other conditions
specified  below are satisfied.  For purchases on August 15, 2013 and August 15,
2018, if we elect to pay the purchase  price,  in whole or in part, in shares of
our common  stock,  the number of shares of common  stock to be  delivered by us
will be equal to the portion of the  purchase  price to be paid in common  stock
divided  by 97.5% of the  market  price  (as  defined  under "--  Conditions  to
Conversion -- Conversion Rate  Adjustments"  above) as of the third business day
prior to the purchase date.

     We will be required to purchase any  outstanding  Series B  debentures  for
which a holder  delivers a written  purchase  notice to the paying  agent.  This
notice  must be  delivered  during  the  period  beginning  at any time from the
opening of business on the date that is 20 business  days prior to the  relevant
purchase  date and ending on the close of business on the  business day prior to
the purchase  date. If the purchase  notice is given and  withdrawn  during such
period,  we will not be obligated to purchase the related  Series B  debentures.
Our  purchase  obligation  will be  subject  to some  additional  conditions  as
described in the indenture.  Also, as described in the "Risk Factors" section of
this offering  memorandum  under the caption "Risks Related to the Debentures --
We may not have the  ability  to raise  the  funds  necessary  to  purchase  the
debentures upon a Fundamental  Change or other purchase date, as required by the
indenture  governing  the  debentures,"  we may not  have  funds  sufficient  to
purchase  the  Series  B  debentures  when  we are  required  to do so or may be
prohibited from doing so under the terms of other  indebtedness.  Our failure to
purchase the Series B debentures  when we are required to do so will  constitute
an event of default under the indenture with respect to the Series B debentures.

     The purchase price payable will be equal to 100% of the accreted  principal
amount of the Series B debentures  to be  purchased  plus any accrued and unpaid
cash interest,  including contingent interest and liquidated damages, if any, to
such purchase  date.  The table below shows the  purchases  prices of a Series B
debenture  on each of the  purchase  dates.  The  purchases  prices below do not
include any additional  amounts  reflecting any accrued and unpaid cash interest
(including  contingent  interest,  if any) and  accrued  and  unpaid  liquidated
damages, if any.



                                                                                               
                                                        SERIES B
                                                        DEBENTURE ISSUE
PURCHASE DATE: AUGUST 15,                               PRICE(1)             ACCRETION AMOUNT(2)        REDEMPTION PRICE(1) + (2)
----------------------------------------------------    ---------------      -------------------        -------------------------
2008................................................    $1,000.00            $0.00                      $1,000.00
2013................................................    $1,000.00            $196.77                    $1,196.77
2018................................................    $1,000.00            $432.26                    $1,432.26



     For a discussion of the U.S. federal income tax consequences to a holder of
our purchase of the Series B debentures,  see "Material U.S.  Federal Income Tax
Considerations."

     On or before the 20th  business day prior to each  purchase  date,  we will
provide  to the  trustee,  the paying  agent and to all  holders of the Series B
debentures at their  addresses  shown in the register of the  registrar,  and to
beneficial  owners as required by applicable law, a notice stating,  among other
things:



     o    for  purchases on or after  August 15,  2013,  whether we will pay the
          purchase  price of the  Series B  debentures  in cash,  shares  of our
          common stock or a combination  thereof,  specifying the percentages of
          each;

     o    for  purchases  on or after  August  15,  2013,  if we elect to pay in
          shares of our common stock, the method of calculating the market price
          of the shares of common stock;

     o    the purchase price;

     o    the name and address of the paying agent and the conversion agent;

     o    the conversion rate and any adjustments to the conversion rate;

     o    that the Series B debentures  with respect to which a purchase  notice
          has been  given by the  holder  may be  converted  only if the  holder
          withdraws  the  purchase  notice in  accordance  with the terms of the
          indenture; and

     o    the  procedures  that  holders  must  follow to require us to purchase
          their Series B debentures.

     In connection with providing such notice, we will issue a press release and
publish  a  notice  containing  this  information  in  a  newspaper  of  general
circulation  in The City of New York or publish the  information on our web site
or through such other public medium as we may use at that time.

     To exercise your  purchase  right,  you must  deliver,  before the close of
business on the business day immediately preceding the purchase date, the Series
B debentures to be purchased, duly endorsed for transfer, together with the form
attached to the Series B debentures  entitled  "Purchase Notice" duly completed,
to the paying agent.  A notice  electing to require us to purchase your Series B
debentures must state:

     o    if certificated  Series B debentures have been issued, the certificate
          numbers of the Series B debentures,

     o    the portion of the original principal amount of Series B debentures to
          be purchased, in integral multiples of $1,000,

     o    for  purchases  on or after  August 15,  2013,  in the event we elect,
          pursuant  to the  notice  that we are  required  to  give,  to pay the
          purchase price in shares of our common stock, in whole or in part, but
          the purchase price is ultimately to be paid to the holder  entirely in
          cash because any condition to payment of the purchase price or portion
          of the purchase  price in common stock is not  satisfied  prior to the
          close of business on the purchase  date, as described  below,  whether
          the holder elects:  (a) to withdraw the purchase  notice as to some or
          all of the Series B debentures to which it relates,  or (b) to receive
          cash  in  respect  of the  entire  purchase  price  for all  Series  B
          debentures or portions of Series B debentures subject to such purchase
          notice,  provided,  however,  that if the holder fails to indicate its
          choice  with  respect to such  election,  the holder will be deemed to
          have elected to receive cash in respect of the entire  purchase  price
          for all Series B debentures  subject to the  purchase  notice in these
          circumstances, and

     o    that the Series B debentures are to be purchased by us pursuant to the
          applicable provisions of the Series B debentures and the indenture.



If the Series B debentures are not in certificated form, your notice must comply
with appropriate DTC procedures.

     We may not purchase any Series B debentures at the option of holders if the
accreted  principal amount of the Series B debentures has been accelerated,  and
such acceleration has not been rescinded.

     You may  withdraw  any  purchase  notice (in whole or in part) by a written
notice  of  withdrawal  delivered  to the  paying  agent  prior to the  close of
business  on the  business  day  prior  to the  purchase  date.  The  notice  of
withdrawal must state:

     o    the original principal amount of the withdrawn Series B debentures,

     o    if certificated  Series B debentures have been issued, the certificate
          numbers of the withdrawn Series B debentures, and

     o    the original  principal  amount,  if any, that remains  subject to the
          purchase notice.

If the Series B debentures are not in certificated  form, your withdrawal notice
must comply with appropriate DTC procedures.

     You  must  either  effect  book-entry  transfer  or  deliver  the  Series B
debentures,  together with necessary  endorsements,  to the office of the paying
agent after delivery of the purchase  notice to receive  payment of the purchase
price.  You will receive  payment  promptly  following the later of the purchase
date  and the  time of  book-entry  transfer  or the  delivery  of the  Series B
debentures.  If the paying agent holds money or securities sufficient to pay the
purchase  price of the Series B  debentures  on the purchase  date,  then on the
business day following the purchase date:

     o    the  Series  B  debentures  will  cease  to be  outstanding  and  cash
          interest,  including  contingent  interest and liquidated  damages, if
          any,  will  cease to accrue  and the  principal  amount  will cease to
          accrete (whether or not book-entry  transfer of the debentures is made
          or whether or not the Series B debentures  are delivered to the paying
          agent), and

     o    all other rights of the holder will terminate (other than the right to
          receive the purchase  price upon  delivery or transfer of the Series B
          debentures).

     In connection with any purchase offer pursuant to these provisions,  to the
extent applicable and required by law, we will:

     o    comply with the  provisions  of Rule  13e-4,  Rule 14e-1 and any other
          tender   offer  rules  under  the  Exchange  Act  which  may  then  be
          applicable; and

     o    file  Schedule TO or any other  required  schedule  under the Exchange
          Act.

     Because the market  price of our common  stock is  determined  prior to the
applicable  purchase date,  holders of Series B debentures  bear the market risk
with  respect  to the value of  common  stock to be  received  from the date the
market price is determined to such purchase date.

     Our right to purchase Series B debentures, in whole or in part, with shares
of our common stock for  purchases  on or after  August 15, 2013,  is subject to
various conditions, including:

     o    the  registration of the common stock under the Securities Act and the
          Exchange Act, if required;



     o    any necessary  qualification  or registration  under  applicable state
          securities  law  or  the   availability  of  an  exemption  from  such
          qualification and registration;

     o    the  information  necessary to calculate the market price is published
          in a daily newspaper of national circulation; and

     o    our common stock is then listed on a national  securities  exchange or
          traded on the Nasdaq National Market.

If such  conditions  are not  satisfied  prior to the close of  business  on the
purchase  date,  we will  pay the  purchase  price of the  Series  B  debentures
entirely  in cash.  We may not change the form,  components  or  percentages  of
components of  consideration to be paid for the Series B debentures once we have
given the notice that we are required to give to holders of Series B debentures,
except as described in the preceding sentence.

FUNDAMENTAL  CHANGE REQUIRES PURCHASE OF SERIES B DEBENTURES BY US AT THE OPTION
OF THE HOLDER

     If a Fundamental  Change (as defined  below in this section)  occurs at any
time prior to maturity, holders will have the right, at their option, to require
us to purchase  any or all of their Series B  debentures,  or any portion of the
original  principal  amount  thereof,  that is equal to  $1,000  or an  integral
multiple of $1,000.  The price we are required to pay (the  "Fundamental  Change
purchase  price")  is equal to the  accreted  principal  amount of the  Series B
debentures  to be  purchased  plus  accrued  and unpaid cash  interest,  if any,
including contingent interest and liquidated damages, if any, to the Fundamental
Change purchase date, unless such Fundamental Change purchase date falls after a
record date and on or prior to the corresponding interest payment date, in which
case we will pay the full amount of accrued and unpaid  cash  interest,  if any,
payable on such  interest  payment  date to the holder of record at the close of
business on the corresponding  record date. For a discussion of the U.S. federal
income tax  consequences to a holder of our purchase of the Series B debentures,
see "Material U.S. Federal Income Tax Considerations."

     If we elect to pay the  Fundamental  Change  purchase price, in whole or in
part, in shares of our common stock,  the number of shares of common stock to be
delivered by us will be equal to the portion of the Fundamental  Change purchase
price to be paid in  common  stock  divided  by 97.5% of the  market  price  (as
defined under "-- Conditions to Conversion --  Adjustments  to Conversion  Rate"
above) of one share of our common  stock as of the third  business  day prior to
the Fundamental Change purchase date.

     Because the market  price of the common  stock is  determined  prior to the
applicable Fundamental Change purchase date, holders of Series B debentures bear
the market  risk with  respect to the value of the common  stock to be  received
from  the date  such  market  price is  determined  to such  Fundamental  Change
purchase date.

     A  "Fundamental  Change" will be deemed to have  occurred at any time after
the Series B debentures are originally issued that any of the following occurs:

          (1) our  common  stock or other  common  stock into which the Series B
     debentures are convertible is neither listed for trading on a U.S. national
     securities  exchange nor approved for trading on the Nasdaq National Market
     or another  established  automated  over-the-counter  trading market in the
     United States,

          (2) a "person" or "group"  (within the meaning of Section 13(d) of the
     Exchange  Act)  other than us, our  subsidiaries  or our or their  employee
     benefit  plans,  files a Schedule TO or any schedule,  form or report under
     the Exchange Act disclosing that such person or group has become



     the  direct or  indirect  ultimate  "beneficial  owner," as defined in Rule
     13d-3 under the Exchange Act, of our common equity  representing  more than
     50% of the voting power of our common equity  entitled to vote generally in
     the election of directors,

          (3) consummation of any share exchange,  consolidation or merger of us
     pursuant to which our common stock will be converted into cash,  securities
     or other property or any sale,  lease or other transfer in one  transaction
     or a series of transactions of all or substantially all of the consolidated
     assets of us and our  subsidiaries,  taken as a whole,  to any person other
     than us or one or  more  of our  subsidiaries;  provided,  however,  that a
     transaction  where the holders of our common  equity  immediately  prior to
     such  transaction  have  directly  or  indirectly,  more  than  50%  of the
     aggregate voting power of all classes of common equity of the continuing or
     surviving  corporation  or  transferee  entitled to vote  generally  in the
     election  of  directors  immediately  after  such  event  shall  not  be  a
     Fundamental Change, or

          (4)  continuing  directors (as defined below in this section) cease to
     constitute at least a majority of our board of directors.

     The  Exchange  (described  in  "Summary--Recent   Developments")  does  not
constitute a fundamental change.

     A Fundamental  Change will not be deemed to have occurred in respect of any
of the foregoing, however, if either:

          (1) the last  reported  sale  price of our  common  stock for any five
     trading  days within the 10  consecutive  trading  days ending  immediately
     before  the  later of the  Fundamental  Change or the  public  announcement
     thereof,  equals or exceeds 105% of the applicable  conversion price of the
     Series B debentures in effect  immediately before the Fundamental Change or
     the public announcement thereof, or

          (2) all or  substantially  all of the  consideration,  excluding  cash
     payments  for  fractional   shares,  in  the  transaction  or  transactions
     constituting  the  Fundamental  Change  consists of shares of capital stock
     traded on a national  securities  exchange or quoted on the Nasdaq National
     Market or which will be so traded or quoted  when  issued or  exchanged  in
     connection with a Fundamental Change (these securities being referred to as
     "publicly  traded  securities")  and as a  result  of this  transaction  or
     transactions the Series B debentures become  convertible into such publicly
     traded securities, excluding cash payments for fractional shares.

     For purposes of the above  paragraph the term "capital stock" of any person
means any and all shares, interests, participations or other equivalents however
designated  of  corporate  stock  or  other  equity  participations,   including
partnership interests, whether general or limited, of such person and any rights
(other  than  debt  securities   convertible  or  exchangeable  into  an  equity
interest), warrants or options to acquire an equity interest in such person.

     "Continuing director" means a director who either was a member of our board
of directors on the date of this offering  memorandum or who becomes a member of
our board of directors  subsequent to that date and whose appointment,  election
or nomination for election by our stockholders is duly approved by a majority of
the continuing directors on our board of directors at the time of such approval,
either by a specific vote or by approval of the proxy statement  issued by us on
behalf of the board of  directors in which such  individual  is named as nominee
for director.



     On or before the 30th day after the occurrence of a Fundamental  Change, we
will  provide to all  holders of the Series B  debentures  and the  trustee  and
paying agent a notice of the  occurrence  of the  Fundamental  Change and of the
resulting purchase right. Such notice shall state, among other things:

     o    whether  we will  pay the  Fundamental  Change  purchase  price of the
          Series B debentures  in cash,  shares of common stock or a combination
          thereof, specifying the percentages of each,

     o    if we  elect  to  pay  in  shares  of  common  stock,  the  method  of
          calculating the market price of the common stock,

     o    the events causing a Fundamental Change,

     o    the date of the Fundamental Change,

     o    the last date on which a holder may exercise the purchase right,

     o    the Fundamental Change purchase price,

     o    the Fundamental Change purchase date,

     o    the name and address of the paying agent and the conversion agent,

     o    the conversion rate and any adjustments to the conversion rate,

     o    that the  Series B  debentures  with  respect  to which a  Fundamental
          Change  purchase  notice has been given by the holder may be converted
          only if the holder withdraws the Fundamental Change purchase notice in
          accordance with the terms of the indenture, and

     o    the  procedures  that  holders  must  follow to require us to purchase
          their Series B debentures.

     Simultaneously  with providing  such notice,  we will issue a press release
and publish a notice  containing  this  information  in a  newspaper  of general
circulation  in The City of New York or publish the  information on our web site
or through such other public medium as we may use at that time.

     To exercise your  purchase  right,  you must  deliver,  before the close of
business on the  business  day  immediately  preceding  the  Fundamental  Change
purchase  date,  the Series B  debentures  to be  purchased,  duly  endorsed for
transfer,  together with the form  attached to the Series B debentures  entitled
"Form of  Fundamental  Change  Purchase  Notice" duly  completed,  to the paying
agent. Your purchase notice must state:

     o    if certificated,  the certificate numbers of their Series B debentures
          to be delivered for purchase,

     o    the portion of the original principal amount of Series B debentures to
          be purchased, which must be $1,000 or an integral multiple thereof,

     o    in the event we elect,  pursuant to the notice that we are required to
          give,  to pay the  Fundamental  Change  purchase  price in our  common
          stock, in whole or in part, but the Fundamental  Change purchase price
          is  ultimately  to be paid to the holder  entirely in cash because any
          condition  to  payment of the  Fundamental  Change  purchase  price or
          portion of the  Fundamental  Change  purchase price in common stock is
          not satisfied prior to the close of business on the Fundamental Change
          purchase date, as described below,  whether the



          holder elects:  (a) to withdraw the Fundamental Change purchase notice
          as to some or all of the Series B debentures  to which it relates,  or
          (b) to  receive  cash in  respect  of the  entire  Fundamental  Change
          purchase  price for all Series B  debentures  or  portions of Series B
          debentures   subject  to  such  Fundamental  Change  purchase  notice;
          provided,  however,  that if the holder fails to indicate the holder's
          choice with  respect to the election  described in this bullet  point,
          the holder will be deemed to have  elected to receive  cash in respect
          of the  entire  Fundamental  Change  purchase  price for all  Series B
          debentures  subject to the Fundamental Change purchase notice in these
          circumstances, and

     o    that the Series B debentures are to be purchased by us pursuant to the
          applicable provisions of the Series B debentures and the indenture.

If the Series B  debentures  are not in  certificated  form,  their  Fundamental
Change purchase notice must comply with appropriate DTC procedures.

     Holders may withdraw any Fundamental Change purchase notice (in whole or in
part) by a written  notice of withdrawal  delivered to the paying agent prior to
the  close of  business  on the  business  day prior to the  Fundamental  Change
purchase date. The notice of withdrawal shall state:

     o    the original principal amount of the withdrawn Series B debentures,

     o    if certificated  Series B debentures have been issued, the certificate
          numbers of the withdrawn Series B debentures, and

     o    the original  principal  amount,  if any, that remains  subject to the
          Fundamental Change purchase notice.

If the Series B debentures are not in certificated form, their withdrawal notice
must comply with appropriate DTC procedures.

     We will be required to purchase the Series B debentures no less than 20 and
no more than 35 business days after the date of our notice of the  occurrence of
the relevant Fundamental Change,  subject to extension to comply with applicable
law.  You may  either  effect  book-entry  transfer  or  deliver  the  Series  B
debentures,  together with necessary  endorsements,  to the office of the paying
agent  after  delivery  of the  Fundamental  Change  purchase  notice to receive
payment of the Fundamental  Change purchase price.  Holders will receive payment
of the  Fundamental  Change  purchase price promptly  following the later of the
Fundamental  Change  purchase  date or the time of  book-entry  transfer  or the
delivery  of the  Series  B  debentures.  If the  paying  agent  holds  money or
securities sufficient to pay the Fundamental Change purchase price of the Series
B debentures on the  Fundamental  Change purchase date, then on the business day
following the Fundamental Change purchase date:

     o    the  Series  B  debentures  will  cease  to be  outstanding  and  cash
          interest,  including  contingent  interest and liquidated  damages, if
          any, will cease to accrue and principal will cease to accrete (whether
          or not  book-entry  transfer  of the  Series B  debentures  is made or
          whether  or not the  Series B  debenture  is  delivered  to the paying
          agent), and

     o    all other rights of the holder will terminate (other than the right to
          receive  the  Fundamental  Change  purchase  price  upon  delivery  or
          transfer of the Series B debentures).

     In connection with any purchase offer pursuant to these provisions,  and to
the extent applicable and required by law, we will:



     o    comply with the  provisions  of Rule  13e-4,  Rule 14e-1 and any other
          tender   offer  rules  under  the  Exchange  Act  which  may  then  be
          applicable; and

     o    file  Schedule TO or any other  required  schedule  under the Exchange
          Act.

     The  rights  of the  holders  to  require  us to  purchase  their  Series B
debentures upon a Fundamental  Change could  discourage a potential  acquirer of
us. The  Fundamental  Change  purchase  feature,  however,  is not the result of
management's knowledge of any specific effort to accumulate shares of our common
stock,  to obtain  control of us by any means or part of a plan by management to
adopt a series of  anti-takeover  provisions.  Instead,  the Fundamental  Change
purchase  feature  is a  standard  term  contained  in other  offerings  of debt
securities similar to the Series B debentures that have been marketed by certain
of the initial purchasers.  The terms of the Fundamental Change purchase feature
resulted from negotiations between the initial purchasers and us.

     The term  Fundamental  Change is limited to specified  transactions and may
not include other events that might adversely affect our financial condition. In
addition, the requirement that we offer to purchase the Series B debentures upon
a Fundamental  Change may not protect holders in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving us.

     No Series B  debentures  may be  purchased  at the option of holders upon a
Fundamental  Change if the accreted  principal amount of the Series B debentures
has been accelerated, and such acceleration has not been rescinded.

     The  definition of  Fundamental  Change  includes a phrase  relating to the
conveyance,  transfer,  sale, lease or disposition of "all or substantially all"
of our consolidated assets. There is no precise,  established  definition of the
phrase "substantially all" under applicable law.  Accordingly,  the ability of a
holder of the  Series B  debentures  to  require  us to  purchase  its  Series B
debentures  as a  result  of the  conveyance,  transfer,  sale,  lease  or other
disposition of less than all of our assets may be uncertain.

     If a Fundamental  Change were to occur, we may not have enough funds to pay
the  Fundamental  Change  purchase  price or we may be prohibited  from doing so
under the terms of other  indebtedness.  See "Risk  Factors"  under the  caption
"Risks  Related to the  Debentures  -- We may not have the  ability to raise the
funds  necessary to purchase the debentures  upon a Fundamental  Change or other
purchase  date, as required by the  indenture  governing  the  debentures."  Our
failure  to  purchase  the  Series  B  debentures  when  required   following  a
Fundamental  Change will constitute an event of default under the indenture with
respect to the Series B debentures.  In addition, we have, and may in the future
incur, other  indebtedness with similar change in control provisions  permitting
holders to  accelerate  or to require us to purchase our  indebtedness  upon the
occurrence of similar events or on some specific  dates,  including the Series A
debentures.

     Our right to purchase Series B debentures, in whole or in part, with common
stock is subject to our satisfying various conditions, including:

     o    the  registration of the common stock under the Securities Act and the
          Exchange Act, if required;

     o    any necessary  qualification  or registration  under  applicable state
          securities  law  or  the   availability  of  an  exemption  from  such
          qualification and registration;



     o    the  information  necessary to calculate the market price is published
          in a daily newspaper of national circulation; and

     o    our common stock is then listed on a national  securities  exchange or
          traded on the Nasdaq National Market.

If such  conditions  are not  satisfied  prior to the close of  business  on the
Fundamental  Change purchase date, we will pay the  Fundamental  Change purchase
price of the Series B debentures  entirely in cash.  We may not change the form,
components or  percentages  of components  of  consideration  to be paid for the
Series B  debentures  once we have given the notice that we are required to give
to  holders  of  Series B  debentures,  except  as  described  in the  preceding
sentence.

CONSOLIDATION, MERGER AND SALE OF ASSETS

     The indenture  prohibits us from consolidating with or merging into another
business entity, or conveying,  transferring or leasing substantially all of our
assets, unless:

     o    either (1) we are the  continuing  entity in the case of a merger;  or
          (2) the resulting,  surviving or acquiring  entity, if other than DST,
          is a U.S.  corporation and it expressly  assumes our obligations  with
          respect  to the  Series B  debentures,  by  executing  a  supplemental
          indenture,

     o    immediately  after  giving  effect  to the  transaction,  no  event of
          default and no circumstances  which,  after notice or lapse of time or
          both,  would  become an event of default,  shall have  happened and be
          continuing; and

     o    we have delivered to the trustee an officers'  certificate and a legal
          opinion confirming that we have complied with the indenture.

     However,  certain of these  transactions  could  constitute  a  Fundamental
Change (as defined above)  permitting  each holder to require us to purchase the
Series B debentures of such holder as described above.

EVENTS OF DEFAULT

     Any of the  following  events  constitute  an event of  default  under  the
indenture with respect to the Series B debentures:

     o    failure to pay interest,  including contingent interest and liquidated
          damages,  if any, on the Series B debentures  for thirty days past the
          applicable due date,

     o    failure  to  pay  the  accreted  principal  amount  of  the  Series  B
          debentures when due (whether at maturity, upon redemption, purchase or
          otherwise),

     o    failure to deliver our common  stock,  or cash in lieu  thereof,  upon
          conversion  of any Series B debenture  and such failure  continues for
          five days following the date such delivery is required,

     o    failure to perform any other  covenant or agreement in the  indenture,
          which  continues for 90 days after written  notice from the trustee or
          holders of 25% of the  outstanding  original  principal  amount of the
          Series B debentures as provided in the indenture,



     o    acceleration of more than $25,000,000 of our indebtedness by its terms
          (including  the  Series  A  debentures)  if  the  acceleration  is not
          rescinded  or such  indebtedness  is not  paid  within  10 days  after
          written  notice from the trustee or holders of 25% of the  outstanding
          original  principal  amount of the Series B debentures  as provided in
          the indenture,

     o    failure to give  timely  notice of a  Fundamental  Change as set forth
          under "-- Fundamental  Change Requires Purchase of Series B Debentures
          by Us at the Option of the Holder" above,  and such failure  continues
          for five days following the date such notice is required, and

     o    specified   events   relating  to  our   bankruptcy,   insolvency   or
          reorganization.

     If there is an event of default  with  respect to the Series B  debentures,
which continues for the requisite amount of time,  either the trustee or holders
of at least 25% of the  aggregate  original  principal  amount  of the  Series B
debentures may declare the accreted principal amount of and interest  (including
contingent  interest  and  liquidated  damages,  if any) on all of the  Series B
debentures to be due and payable immediately, except that if an event of default
occurs due to  bankruptcy,  insolvency  or  reorganization  as  provided  in the
indenture,  then  the  accreted  principal  amount  of and  interest  (including
contingent  interest and liquidated  damages, if any) on the Series B debentures
shall become due and payable  immediately  without any act by the trustee or any
holder of Series B debentures.

     Before the  acceleration  of the maturity of the Series B  debentures,  the
holders of a majority in  aggregate  original  principal  amount of the Series B
debentures  may, on behalf of the holders of all Series B debentures,  waive any
past  default  or  event  of  default  and its  consequences  for the  Series  B
debentures,  except (1) a default in the payment of the  accreted  principal  or
interest  (including  contingent  interest and liquidated  damages, if any) with
respect to the Series B debentures  or (2) a default with respect to a provision
of the  indenture  that  cannot be amended  without  the  consent of each holder
affected by the amendment.  In case of a waiver of a default, that default shall
cease to exist,  any event of default  arising from that default shall be deemed
to have been cured for all  purposes,  and DST, the trustee,  and the holders of
the Series B debentures  will be restored to their former  positions  and rights
under the indenture.

     A holder may institute a suit against us for  enforcement  of such holder's
rights under the indenture, for the appointment of a receiver or trustee, or for
any other remedy only if the following conditions are satisfied:

     o    the holder gives the trustee  written notice of a continuing  event of
          default with respect to the Series B debentures held by that holder,

     o    holders of at least 25% of the aggregate  original principal amount of
          the  Series  B  debentures  make a  request,  in  writing,  and  offer
          reasonable indemnity,  to the trustee for the trustee to institute the
          requested proceeding,

     o    the  trustee  does not  receive  direction  contrary  to the  holder's
          request from  holder's of a majority in original  principal  amount of
          the Series B debentures within 60 days following such notice,  request
          and offer of indemnity under the terms of the indenture, and

     o    the trustee does not institute the requested proceeding within 60 days
          following such notice.

     The indenture  requires us every year to deliver to the trustee a statement
as to any defaults under the indenture.



     A default  in the  payment of the Series B  debentures,  or a default  with
respect to the Series B debentures that causes them to be accelerated,  may give
rise to a  cross-default  under our  credit  facilities  or other  indebtedness,
including the Series A debentures.

SATISFACTION AND DISCHARGE OF THE INDENTURE

     The indenture will generally cease to be of any further effect with respect
to the Series B debentures, if:

     o    we have  delivered  to the trustee for  cancellation  all  outstanding
          Series B debentures (with certain limited exceptions), or

     o    all Series B debentures  not  previously  delivered to the trustee for
          cancellation  have become due and payable,  whether at stated maturity
          or any  redemption  date or any  purchase  date  (including  upon  the
          occurrence of a Fundamental  Change), or upon conversion or otherwise,
          and we have  deposited  with the  trustee  as trust  funds the  entire
          amount  (including our common stock, as applicable)  sufficient to pay
          all of the outstanding Series B debentures,

     o    and if, in either case, we also pay or cause to be paid all other sums
          payable under the indenture by us.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     The Series B debentures are not subject to any defeasance  provisions under
the indenture.

MODIFICATION AND WAIVER

     We may enter into  supplemental  indentures for the purpose of modifying or
amending  the  indenture  with the  consent of holders of at least a majority in
aggregate  original  principal amount of the Series B debentures.  However,  the
consent of all of the holders of the Series B debentures  is required for any of
the following:

     o    to reduce the  percentage  in  original  principal  amount of Series B
          debentures whose holders must consent to an amendment,

     o    to reduce the rate of or extend the time for  payment of regular  cash
          interest,  contingent  interest or liquidated  damages on any Series B
          debenture  or reduce the  amount of any  interest  payment  (including
          contingent  interest or liquidated  damages) or accretion of principal
          to be made with  respect  to any  Series B  debenture  or to alter the
          manner of  calculation  of  regular  cash  interest  or  accretion  of
          principal,  contingent  interest or liquidated  damages payable on any
          Series B debenture,

     o    to reduce the original  principal amount or accreted  principal amount
          or change the stated  maturity of principal of, or any  installment of
          principal of or interest on, any Series B debenture,

     o    to reduce the redemption  price or purchase price  (including upon the
          occurrence  of a  Fundamental  Change) or change the time at which any
          Series B debenture may or shall be redeemed or purchased,

     o    to make any Series B debenture payable in a different currency,



     o    to make any change in the  provisions  of the  indenture  relating  to
          waivers of defaults or amendments that require unanimous consent,

     o    to  change  any place of  payment  where the  Series B  debentures  or
          interest thereon is payable,

     o    to make any change  that  adversely  affects  the right to convert the
          Series B debentures or reduces the amount payable on conversion,

     o    to  impair  the right to bring a lawsuit  for the  enforcement  of any
          payment on or after the stated  maturity of any Series B debenture (or
          in the case of redemption or purchase,  on or after the date fixed for
          redemption or purchase), or

     o    to modify  any of the above  provisions  of the  indenture,  except to
          increase  the  percentage  in  original  principal  amount of Series B
          debentures  whose  holders  must consent to an amendment or to provide
          that certain other  provisions of the indenture  cannot be modified or
          waived without the consent of the holder of each outstanding  Series B
          debenture affected by the modification or waiver.

     In addition,  we and the trustee with  respect to the  indenture  may enter
into supplemental  indentures without the consent of the holders of the Series B
debentures for one or more of the following purposes:

     o    to evidence  that another  person has become our  successor  under the
          provisions of the indenture relating to consolidations,  mergers,  and
          sales  of  assets  and  that  the  successor  assumes  our  covenants,
          agreements,  and  obligations  in the  indenture  and in the  Series B
          debentures,

     o    to surrender any of our rights or powers under the  indenture,  to add
          to our  covenants  further  covenants,  restrictions,  conditions,  or
          provisions  for  the  protection  of  the  holders  of  the  Series  B
          debentures,  and  to  make  a  default  in  any  of  these  additional
          covenants,  restrictions,  conditions,  or  provisions a default or an
          event of default under the indenture,

     o    to cure any  ambiguity or to make  corrections  to the indenture or to
          make such other  provisions in regard to matters or questions  arising
          under the indenture that do not adversely  affect the interests of any
          holders of Series B debentures,

     o    to modify or amend the  indenture to permit the  qualification  of the
          indenture or any supplemental  indenture under the Trust Indenture Act
          of 1939 as then in effect,

     o    to add guarantees with respect to the Series B debentures or to secure
          the Series B debentures,

     o    to make any change  that does not  adversely  affect the rights of any
          holder of Series B debentures, and

     o    to  evidence  and  provide  for the  acceptance  of  appointment  by a
          successor or separate trustee with respect to the Series B debentures.



BOOK-ENTRY SYSTEM

     We issued the Series B  debentures  in the form of global  securities.  The
global  securities  were deposited  with, or on behalf of, DTC and registered in
the name of a nominee of DTC.  The Series B  debentures  sold  pursuant  to this
prospectus  will  be  represented  by  one  or  more  new  unrestricted   global
securities.  Except under circumstances described below, the Series B debentures
will not be issued in definitive form.

     Ownership of beneficial  interests in a global  security will be limited to
persons that have accounts with DTC or its nominee  ("participants")  or persons
that may hold interests through participants.  Ownership of beneficial interests
in a global  security will be shown on, and the transfer of that  ownership will
be effected only through, records maintained by DTC or its nominee (with respect
to  interests  of persons  other  than  participants).  The laws of some  states
require  that some  purchasers  of  securities  take  physical  delivery  of the
securities in definitive  form. Such limits and such laws may impair the ability
to transfer beneficial interests in a global security.

     So long as DTC or its nominee is the registered owner of a global security,
DTC or its  nominee,  as the case may be, will be  considered  the sole owner or
holder of the Series B debentures  represented  by that global  security for all
purposes under the  indenture.  Except as provided  below,  owners of beneficial
interests in a global  security will not be entitled to have Series B debentures
represented by that global security  registered in their names, will not receive
or be entitled to receive physical delivery of Series B debentures in definitive
form and will  not be  considered  the  owners  or  holders  thereof  under  the
indenture.  Principal  and  interest  payments,  if any, on Series B  debentures
registered in the name of DTC or its nominee will be made to DTC or its nominee,
as the case may be, as the  registered  owner of the relevant  global  security.
Neither we, the  trustee,  any paying agent or the  security  registrar  for the
Series B debentures will have any  responsibility or liability for any aspect of
the records relating to nor payments made on account of beneficial  interests in
a global  security or for  maintaining,  supervising  or  reviewing  any records
relating to such beneficial interests.

     We expect that DTC or its nominee, upon receipt of any payment of principal
or interest  will credit  immediately  participants'  accounts  with payments in
amounts  proportionate to their respective beneficial interests in the principal
amount of the  relevant  global  security  as shown on the records of DTC or its
nominee.  We also expect that payments by  participants  to owners of beneficial
interests in a global security held through these  participants will be governed
by standing instructions and customary practices, as is the case with securities
held for the  accounts  of  customers  in bearer form or  registered  in "street
name," and will be the responsibility of the participants.

     Beneficial  owners of interests in global  securities who desire to convert
their  interests  into  common  stock  should  contact  their  brokers  or other
participants  or indirect  participants  through whom they hold such  beneficial
interests  to obtain  information  on  procedures,  including  proper  forms and
cut-off times, for submitting requests for conversion.

     Unless  and  until  they are  exchanged  in  whole or in part for  Series B
debentures in definitive  form,  the global  securities  may not be  transferred
except  as a whole by DTC to a nominee  of DTC or by a nominee  of DTC to DTC or
another nominee of DTC.  Transfers between  participants in DTC will be effected
in the ordinary way in accordance with DTC rules and will be settled in same-day
funds.

     If DTC at any time is  unwilling  or unable to  continue  as a  depositary,
defaults  in the  performance  of its  duties  as  depositary  or ceases to be a
clearing agency registered under the Exchange Act or other applicable statute or
regulation, and a successor depositary is not appointed by us within 90 days, we
will issue Series B  debentures  in  definitive  form in exchange for the global
securities relating to the Series B debentures.  In addition, we may at any time
and in our sole  discretion  determine  not to have the Series B



debentures  or portions of the Series B  debentures  represented  by one or more
global  securities  and,  in that  event,  we will  notify the trustee and issue
individual Series B debentures in exchange for the global security or securities
representing  the  Series  B  debentures.  Series  B  debentures  so  issued  in
definitive   form  will  be  issued  as   registered   Series  B  debentures  in
denominations  of  $1,000  original  principal  amount  and  integral  multiples
thereof, unless otherwise specified by us.

THE TRUSTEE

     JPMorgan Chase Bank is the initial trustee, conversion agent, paying agent,
transfer agent and registrar with respect to the Series B debentures. We perform
mutual fund,  transfer agent and related services for certain funds sponsored by
JPMorgan Chase Bank.

GOVERNING LAW

     The indenture and the Series B debentures are governed by, and construed in
accordance with, the laws of the State of New York.



                          DESCRIPTION OF CAPITAL STOCK

     The  following  descriptions  are  summaries of the  material  terms of our
common stock,  preferred stock,  certificate of incorporation  and bylaws.  This
summary is  qualified  by  reference to our  certificate  of  incorporation,  as
amended,  and amended and restated  bylaws,  copies of which we have  previously
filed with the SEC, and by provisions of applicable law,  including the Delaware
General  Corporation  Law,  which we refer to as the DGCL,  and the  common  and
constitutional  law of the  state of  Delaware.  Our  authorized  capital  stock
consists of 310,000,000 shares of stock, including:

     o    300,000,000  shares of common  stock,  $0.01 par value per  share,  of
          which  115,777,046  shares were issued and  outstanding as of November
          30, 2003; and

     o    10,000,000  shares of  preferred  stock,  $0.01  par value per  share,
          including  60,000  shares  that  have  been  designated  as  Series  A
          Preferred  Stock,  $1.00 par value per share,  in connection  with our
          rights  agreement,   of  which  no  shares  are  currently  issued  or
          outstanding.

COMMON STOCK

     Holders of our common stock are entitled to one vote per share with respect
to each matter submitted to a vote of our stockholders, subject to voting rights
that may be established for shares of our preferred stock, if any. A majority of
the votes cast with respect to a matter will be sufficient  to authorize  action
upon that  matter  except  as  described  below in  "Special  Provisions  of Our
Certification of Incorporation  and Bylaws." The holders of our common stock may
vote by proxy.  Except as may be provided in connection with our preferred stock
or as otherwise may be required by law or our certificate of incorporation,  our
common  stock is the only  capital  stock  entitled  to vote in the  election of
directors. Directors are elected by a majority of the votes cast. In an election
for  directors,  each  stockholder  has the  right to cast as many  votes in the
aggregate  as  shall  equal  the  number  of  shares  held by such  stockholder,
multiplied  by the number of  directors  to be elected  at such  election.  Each
stockholder  may cast the whole  number of votes that such  stockholder  has the
right to cast either in person or by proxy, for one candidate or distribute them
among two or more candidates.

     Subject to the rights of holders of our preferred stock, if any, holders of
our common stock are entitled to receive  dividends and  distributions  lawfully
declared  by our board of  directors.  Any  payment  of  distributions  by us is
subject to the  restrictions  of Delaware law  applicable to the  declaration of
distributions  by a  corporation.  If we  liquidate,  dissolve  or  wind  up our
business, whether voluntarily or involuntarily, holders of our common stock will
be entitled to receive any assets available for distribution to our stockholders
after we have paid or set apart for payment the amounts necessary to satisfy any
preferential or  participating  rights to which the holders of each  outstanding
series of preferred  stock are  entitled by the express  terms of such series of
preferred stock.

     Our common stock does not have any preemptive, redemption,  subscription or
conversion rights. We may issue additional shares of our authorized common stock
as authorized by our board of directors from time to time,  without  stockholder
approval, except as may be required by applicable stock exchange requirements.

PREFERRED STOCK

     Our board of directors  has been  authorized to provide for the issuance of
shares of our  preferred  stock in  multiple  series  without  the  approval  of
stockholders.  With respect to each series of our preferred  stock, our board of
directors has the authority to fix the following terms:



     o    the designation of the series;

     o    the number of shares within the series;

     o    whether  dividends are cumulative  and, if cumulative,  the dates from
          which dividends are cumulative;

     o    the rate of any  dividends,  any conditions  upon which  dividends are
          payable, and the dates of payment of dividends;

     o    whether the shares are redeemable,  the redemption price and the terms
          of redemption;

     o    whether the shares are convertible or exchangeable,  the price or rate
          of conversion or exchange, and the applicable terms and conditions;

     o    voting rights applicable to the series of preferred stock; and

     o    any other  powers,  preferences  and  rights  and any  qualifications,
          limitations or restrictions of the shares of each such series.

     The number of authorized  shares of our preferred stock may be increased or
decreased (but not below the number of shares of our preferred stock outstanding
at such  time)  by an  affirmative  vote of the  holders  of a  majority  of our
outstanding  common  stock,  without a vote of the  holders  of any  outstanding
preferred  stock,  unless  a vote of such  preferred  stockholders  is  required
pursuant to the terms of any certificate of designation.

     Our ability to issue  preferred  stock,  or rights to purchase such shares,
could  discourage an unsolicited  acquisition  proposal.  For example,  we could
impede a business  combination by issuing a series of preferred stock containing
class  voting  rights that would enable the holders of such  preferred  stock to
block a business combination transaction.  Alternatively,  we could facilitate a
business  combination  transaction by issuing a series of preferred stock having
sufficient  voting  rights  to  provide  a  required   percentage  vote  of  the
stockholders.   Additionally,  under  certain  circumstances,  our  issuance  of
preferred  stock could  adversely  affect the voting power of the holders of our
common  stock.  Although  our  board  of  directors  is  required  to  make  any
determination  to issue any preferred stock based on its judgment as to the best
interests of our stockholders, our board of directors could act in a manner that
would  discourage an acquisition  attempt or other  transaction  that some, or a
majority,  of our stockholders might believe to be in their best interests or in
which  stockholders  might  receive a premium  for their  stock over  prevailing
market prices of such stock.  Our board of directors  does not at present intend
to seek  stockholder  approval  prior to any  issuance of  currently  authorized
stock,   unless   otherwise   required  by  law  or  applicable  stock  exchange
requirements.

RIGHTS PLAN

     We are party to a stockholders' rights agreement,  which we refer to as the
rights  plan,  dated as of  October  6,  1995,  and  amended as of July 9, 1998,
September 10, 1999 and  September 25, 2001.  Each share of our common stock held
of record on October 18, 1995 (when Kansas City  Southern  Industries,  Inc. was
the sole  stockholder  of DST) and all  shares  of  common  stock  issued in and
subsequent  to our initial  public  offering has received one right.  Each right
entitles its holder to purchase  1/1000th  share of our preferred  stock,  or in
some circumstances,  our other securities. In certain circumstances,  the rights
entitle their holders to purchase shares in a surviving entity or its affiliates
resulting from transactions in which we are not the surviving entity or in which
we dispose of more than 50% of our assets or earnings power.



     The rights,  which are automatically  attached to our common stock, are not
exercisable or transferable separately from shares of our common stock until ten
days following the earlier of (1) an announcement that a person or group,  which
we refer to as an  acquiring  person,  has  acquired,  or obtained  the right to
acquire, beneficial ownership of 15% or more of our outstanding shares of common
stock or (2) ten days following the commencement or announcement of any person's
intention  to make a  tender  offer or  exchange  offer  that  would  result  in
ownership of 15% or more of our  outstanding  common stock,  unless our board of
directors sets a later date in either event.  The rights  attached to the common
stock of an acquiring person become void. Janus, which holds approximately 9% of
our outstanding  shares of common stock,  and certain  entities  affiliated with
Janus  are,  in  certain  circumstances,  excluded  from  the  definition  of an
"acquiring person" under the rights plan.

     The rights  plan has  certain  anti-takeover  effects.  The rights plan may
cause  substantial  dilution to a person or group that attempts to acquire us on
terms not approved by our board of directors. The rights plan may therefore have
the effect of delaying,  deterring or preventing a change in control of DST. The
rights should not interfere with any merger or other business  combination  that
our board of directors approves.

     The  description of the rights  contained in this section does not describe
every aspect of the rights.  The rights plan contains the full legal text of the
matters described in this section. See "Where You Can Find More Information" for
information on how to obtain a copy.

LIMITATION ON DIRECTORS' LIABILITY

     Our  certificate  of  incorporation  provides,  as  authorized  by  Section
102(b)(7) of the DGCL, that our directors will not be personally liable to us or
our  stockholders  for  monetary  damages  for  breach  of  fiduciary  duty as a
director, except for liability:

     o    for  any  breach  of  the  director's  duty  of  loyalty  to us or our
          stockholders;

     o    for acts or omission  not in good faith or which  involve  intentional
          misconduct or a knowing violation of law;

     o    for unlawful  payments of dividends or unlawful  stock  repurchases or
          redemptions as provided in Section 174 of the DGCL; or

     o    for any  transaction  from  which the  director  derived  an  improper
          personal benefit.

     The inclusion of this  provision in our  certificate of  incorporation  may
have the effect of reducing the  likelihood  of  derivative  litigation  against
directors,  and may discourage or deter stockholders or management from bringing
a lawsuit  against  directors for breach of their duty of care, even though such
an  action,   if  successful,   might   otherwise  have  benefited  us  and  our
stockholders.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

     Section 203 of the DGCL prohibits a defined set of  transactions  between a
Delaware corporation,  such as DST, and an "interested stockholder." Pursuant to
the DGCL, an interested  stockholder  is defined as a person who,  together with
any  affiliates  or associates of such person,  beneficially  owns,  directly or
indirectly,  15%  or  more  of  the  outstanding  voting  shares  of a  Delaware
corporation.  This  provision  may  prohibit  business  combinations  between an
interested  stockholder  and a corporation for a period of three years after the
date the  interested  stockholder  becomes an interested  stockholder.  The term
"business  combination" is broadly defined to include  mergers,  consolidations,
sales or other  dispositions  of assets having a total value in excess of 10% of
the consolidated  assets of the corporation,  and some other



transactions  that would  increase the  interested  stockholder's  proportionate
share ownership in the corporation.

     This prohibition is effective unless:

     o    the business  combination  is approved by the  corporation's  board of
          directors  prior to the time the  interested  stockholder  becomes  an
          interested stockholder;

     o    the interested  stockholder  acquired at least 85% of the voting stock
          of the  corporation,  other than stock held by directors  who are also
          officers or by qualified  employee stock plans,  in the transaction in
          which it becomes an interested stockholder; or

     o    the  business  combination  is  approved by a majority of the board of
          directors and by the  affirmative  vote of 66 2/3% of the  outstanding
          voting stock that is not owned by the interested stockholder.

SPECIAL PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS

     Meetings of our  stockholders  are held at least  annually.  Written notice
must be mailed to each  stockholder  entitled to vote not less than ten nor more
than 60 days  before  the date of the  meeting.  The  presence,  in person or by
proxy, of stockholders  holding a majority of our issued and outstanding  shares
entitled to vote at such meeting  constitutes  a quorum for the  transaction  of
business at meetings of our  stockholders.  Special meetings of the stockholders
may be called for any purpose by our board of directors pursuant to a resolution
approved by a majority of the entire board upon not less than ten days' nor more
than 60 days' written notice. Our certificate of incorporation provides that our
stockholders may not act by written consent in lieu of a meeting.

     Our amended and restated bylaws contain  provisions  requiring that advance
notice be delivered to us of any business to be brought by a stockholder  before
an annual meeting of  stockholders.  Generally,  such advance notice  provisions
provide that a stockholder  must give written notice to our corporate  secretary
not less than 90 days nor more than 120 days  before the  scheduled  date of the
annual  meeting  of  our  stockholders.  The  notice  must  set  forth  specific
information  regarding such stockholder or business, as described in our bylaws.
Our  amended and  restated  bylaws also  provide  for certain  procedures  to be
followed by  stockholders  in  nominating  persons for  election to our board of
directors.  Generally,  a stockholder  must give written notice to our corporate
secretary not less than 60 days nor more than 90 days before the scheduled  date
of any  stockholders'  meeting at which directors are to be elected.  The notice
must set forth specific information  regarding such stockholder and the director
nominee,  as described in our bylaws. Our certificate of incorporation  provides
that the number of directors  shall not be fewer than three nor more than eleven
and provides for a classified board of directors, consisting of three classes as
nearly equal in size as reasonably  possible.  Each class holds office until the
third annual stockholders'  meeting for election of directors following the most
recent  election of such class.  Our  directors may be removed only for cause by
the  affirmative  vote of the  holders of at least 70% of the  aggregate  voting
power of our  outstanding  capital stock entitled to vote in the election of our
directors, which we refer to as the voting stock.

     Special meetings of our board of directors may be called by the chairman of
our board of directors,  the executive committee of our board of directors,  our
president  or by any three  members of our board of  directors.  Our amended and
restated  bylaws may be amended by our board of directors  or by an  affirmative
vote of the holders of at least 70% of the voting stock.

     Pursuant to our certificate of  incorporation,  an affirmative  vote of the
holders of at least 70% of the voting stock,  voting  together as a single class
is required for the following transactions:



     o    any merger or consolidation of DST or any of our subsidiaries with any
          interested  stockholder,  or with any other  corporation  which is or,
          after  such  merger  or  consolidation,  would be an  affiliate  of an
          interested stockholder;

     o    any  sale,  lease,  exchange,  mortgage,  pledge,  transfer  or  other
          disposition to or with any interested stockholder, or any affiliate of
          an  interested  stockholder,  of  any  assets  of  DST  or  any of our
          subsidiaries  having  an  aggregate  fair  market  value  equaling  or
          exceeding 25% or more of the assets of DST and our subsidiaries;

     o    the  issuance  or transfer  by DST or any of our  subsidiaries  of any
          securities  of  DST  or any  of  our  subsidiaries  to any  interested
          stockholder,  or  any  affiliate  of  an  interested  stockholder,  in
          exchange for cash,  securities or other  property  having an aggregate
          fair market value  equaling or exceeding  25% of the assets of DST and
          our  subsidiaries  (except pursuant to an employee benefit plan of DST
          or our subsidiaries);

     o    the  adoption  of  any  plan  or  proposal  for  the   liquidation  or
          dissolution  of  DST  proposed  by  or on  behalf  of  any  interested
          stockholder, or any affiliate of an interested stockholder; or

     o    any  reclassification of securities or recapitalization of DST, or any
          merger or  consolidation  of DST with any of its  subsidiaries  or any
          other transaction which has the effect of increasing the proportionate
          share of the outstanding  shares of any class of equity or convertible
          securities of DST or any  subsidiary,  which is directly or indirectly
          owned by any interested  stockholder or any affiliate of an interested
          stockholder,  unless the  increase in  proportionate  ownership of the
          interested stockholder or any affiliate of an interested  stockholder,
          resulting  from  such  transaction  is no  greater  than the  increase
          experienced by the other stockholders generally.

     Notwithstanding the above, if any of the transactions  specified above have
been approved by a majority of our  disinterested  directors,  such  transaction
shall require only an affirmative vote of the majority of our outstanding shares
of capital stock, unless otherwise required by law.

     Pursuant to our certificate of incorporation,  an interested stockholder is
defined as any person that:

     o    is the beneficial owner,  directly or indirectly,  of more than 10% of
          the voting power of the voting stock;

     o    is  our  affiliate  and  at  any  time  within  the  two-year   period
          immediately  prior to the date in question was the  beneficial  owner,
          directly or indirectly, of 10% or more of the voting power of the then
          outstanding voting stock; or

     o    is an assignee of, or has otherwise succeeded to, any shares of voting
          stock which were at any time within the  two-year  period  immediately
          prior to the date in  question  beneficially  owned by any  interested
          stockholder,  if such assignment or succession  shall have occurred in
          the course of a transaction or series of transactions  not involving a
          public offering within the meaning of the Securities Act.

     Pursuant  to our  certificate  of  incorporation,  the  term  disinterested
director is defined as any member of our board of directors who is  unaffiliated
with any interested  stockholder  and who was a member of our board of directors
prior  to  the  time  that  any  interested  stockholder  became  an  interested
stockholder,  and any director who is  thereafter  chosen to fill any vacancy on
our  board  of  directors  or who is  elected  and  who,  in  either  event,  is
unaffiliated  with any  interested  stockholder,  and in  connection  with  such
director's  initial



assumption of office is recommended for appointment or election by a majority of
disinterested directors on our board of directors.

     The  provisions  of  our  certificate  of  incorporation  relating  to  the
following may be amended or repealed only by the affirmative vote of the holders
of at least 70% of the voting stock, voting together as a single class:

     o    our board of directors;

     o    the amendment of our amended and restated bylaws or our certificate of
          incorporation;

     o    the certain business transactions set forth above;

     o    the manner for considering tender offers, mergers or consolidations or
          purchases of our assets;

     o    the indemnification of our directors and officers;

     o    the personal liability of our directors; and

     o    the prohibition of stockholder consents.

     The  foregoing  provisions  of our  certificate  of  incorporation  and our
amended  and  restated  bylaws,  together  with  the  rights  agreement  and the
provisions  of  Section  203 of the DGCL,  could  have the  effect of  delaying,
deferring  or  preventing  a  change  in  control  or the  removal  of  existing
management,  of  deterring  potential  acquirors  from  making  an  offer to our
stockholders and of limiting any opportunity to realize premiums over prevailing
market  prices for our common stock in connection  therewith.  This could be the
case notwithstanding that a majority of our stockholders might benefit from such
a change in control or offer.

TRANSFER AGENT AND REGISTRAR

     EquiServe  Trust Company serves as the registrar and transfer agent for our
common stock.

STOCK EXCHANGE LISTING

     Our common stock is listed on the NYSE.  The trading  symbol for our common
stock on this exchange is "DST."



                 MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

     The  following  is a  summary  of the  material  U.S.  federal  income  tax
considerations  relevant to the ownership and  disposition of the debentures and
the shares of common  stock into which the  debentures  may be  converted.  This
summary  deals only with the  debentures  and the shares of common stock held as
capital  assets for U.S.  federal  income tax purposes and applies only to those
initial  holders  that  purchase  debentures  at the "issue  price" (as  defined
below). As used in this offering  memorandum,  "U.S. Holders" are any beneficial
owners  of the  debentures  or the  shares of common  stock  that are,  for U.S.
federal income tax purposes: (1) citizens or residents of the United States, (2)
corporations  (or  entities  treated  as  corporations  for  federal  income tax
purposes)  created or organized in or under the laws of the United  States,  any
state thereof or the District of Columbia,  (3) estates,  the income of which is
subject to U.S.  federal  income  taxation  regardless  of its  source,  and (4)
trusts,  if 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. As used in
this offering  memorandum,  "Non-U.S.  Holders" are holders of the debentures or
the shares of common stock that are, for U.S.  federal income tax purposes,  (1)
nonresident alien individuals,  (2) foreign corporations and (3) foreign estates
or trusts. If a partnership  (including for this purpose any entity treated as a
partnership for U.S.  federal income tax purposes) is a beneficial  owner of the
debentures  or the shares of common  stock,  the  treatment  of a partner in the
partnership  will  generally  depend upon the status of the partner and upon the
activities  of the  partnership.  A holder of the  debentures  or the  shares of
common  stock that is a  partnership  and  partners in such  partnership  should
consult their tax advisors  about the U.S.  federal income tax  consequences  of
holding and disposing of the  debentures  or the shares of common stock,  as the
case may be. Unless  otherwise  stated,  this summary does not deal with special
classes  of holders  such as banks,  thrifts,  real  estate  investment  trusts,
regulated investment  companies,  insurance companies,  dealers in securities or
currencies,  tax-exempt investors, holders that hold the debentures as part of a
hedge,  straddle,  "synthetic security" or other integrated transaction for U.S.
federal income tax purposes and certain holders whose functional currency is not
the U.S. dollar.  Further,  this summary does not include any description of any
alternative  minimum tax  consequences,  U.S. federal estate or gift tax laws or
the tax laws of any state, local or foreign government that may be applicable to
the debentures or the shares of common stock.

     This summary is based on the Internal Revenue Code of 1986, as amended, the
Treasury  regulations  promulgated  thereunder and  administrative  and judicial
interpretations  thereof,  all as of the date  hereof,  which we refer to as the
Current Law, and all of which are subject to change,  possibly on a  retroactive
basis.  The proper  application  of Current Law to a holder of the debentures is
uncertain  in a number of respects,  and no assurance  can be given that the IRS
will not assert that the  debentures  should be treated  differently or that the
IRS will not prevail.

     This  summary  is  for  general  information  only.  Accordingly,  we  urge
prospective  investors  to consult  their tax  advisors  with respect to the tax
consequences  to  them  of  the  purchase,  ownership  and  disposition  of  the
debentures  and the  shares  of common  stock in light of their  own  particular
circumstances,  including the tax considerations under state, local, foreign and
other tax laws and the possible effects of changes in U.S. federal and other tax
laws.

CLASSIFICATION OF THE DEBENTURES

     Pursuant  to the  terms of the  applicable  indenture,  each  holder of the
debentures  will  agree,  for U.S.  federal  income tax  purposes,  to treat the
debentures as indebtedness  for U.S.  federal income tax purposes subject to the
Treasury  regulations  governing  contingent payment debt instruments,  which we
refer to as the CPDI  regulations,  and to be bound by our  application of these
regulations to the debentures,  including our determination of the rate at which
interest will be deemed to accrue on the debentures for U.S.  federal income tax
purposes and the projected payment schedule (described below).



The remainder of this discussion  assumes that the debentures will be treated in
accordance with the CPDI regulations and our determinations thereunder. However,
the proper  application  of the CPDI  regulations  to a holder of a debenture is
uncertain  in a number of respects,  and no assurance  can be given that the IRS
will not assert that the  debentures  should be treated  differently or that the
IRS will not prevail. A different treatment could affect the amount,  timing and
character of income, gain or loss in respect of an investment in the debentures.
In particular, it might be determined that a holder should have accrued interest
income at a higher or lower rate, should not have recognized income or gain upon
the  conversion,   or  should  have  recognized  capital  gain  upon  a  taxable
disposition of its debentures.

TAX CONSIDERATIONS FOR U.S. HOLDERS

     Under the rules  governing  contingent  payment  debt  instruments,  a U.S.
Holder will be  required to accrue  interest  income on the  debentures,  in the
amounts described below,  regardless of whether the U.S. Holder uses the cash or
accrual method of tax accounting.  Accordingly,  U.S.  Holders will generally be
required  to include  interest  in taxable  income in each year in excess of the
interest  payments  actually received in that year. A U.S. Holder must accrue on
its debentures an amount of original issue discount as ordinary  interest income
for U.S.  federal  income tax  purposes  for each  accrual  period  prior to and
including the maturity date of the debentures that equals:

     o    the product of (i) the adjusted  issue price (as defined below) of the
          debentures  as of the  beginning of the accrual  period;  and (ii) the
          comparable  yield (as defined below) of the  debentures,  adjusted for
          the length of the accrual period;

     o    divided by the number of days in the accrual period; and

     o    multiplied  by the number of days during the  accrual  period that the
          U.S. Holder held the debentures.

     The "issue  price" of a debenture is the first price at which a substantial
amount of the debentures is sold to the public,  excluding bond houses,  brokers
or similar  persons or  organizations  acting in the  capacity of  underwriters,
placement  agents or  wholesalers.  The "adjusted issue price" of a debenture is
its issue price increased by any interest income previously accrued,  determined
without regard to any  adjustments to interest  accruals  described  below,  and
decreased by the projected  amounts of any previous payments with respect to the
debenture.

     Under the rules  governing  contingent  payment  debt  instruments,  we are
required to establish the "comparable yield" for the debentures.  The comparable
yield for the  debentures is the annual yield we would incur,  as of the initial
issue date,  on a fixed rate  nonconvertible  debt  security  with no contingent
payments,  but with terms and  conditions  otherwise  comparable to those of the
debentures  including the level of  subordination,  term, timing of payments and
general market  conditions,  but excluding any  adjustments for liquidity or the
riskiness of the  contingencies  with respect to the  debentures.  Based on this
definition,  we have  determined  the  comparable  yield  to be 8.4%  compounded
semiannually.

     We are required to provide to holders,  solely for U.S.  federal income tax
purposes,  a schedule of the  projected  amounts of payments on the  debentures,
which  we refer to as the  "projected  payment  schedule."  This  schedule  must
produce  the  comparable  yield.  Our  determination  of the  projected  payment
schedule  for the  debentures  includes  estimates  for  payments of  contingent
interest  and an  estimate  for a payment at maturity  taking  into  account the
conversion  feature.  Holders  may  obtain the  projected  payment  schedule  by
submitting a written request for it to us at the address set forth in "Where You
Can Find More Information."

THE COMPARABLE  YIELD AND THE SCHEDULE OF PROJECTED  PAYMENTS ARE NOT DETERMINED
FOR ANY  PURPOSE  OTHER THAN FOR THE  DETERMINATION  OF  INTEREST





ACCRUALS AND ADJUSTMENTS  THEREOF IN RESPECT OF THE DEBENTURES FOR U.S.  FEDERAL
INCOME  TAX  PURPOSES  AND DO NOT  CONSTITUTE  A  PROJECTION  OR  REPRESENTATION
REGARDING THE ACTUAL AMOUNTS PAYABLE TO U.S. HOLDERS OF THE DEBENTURES.

     ADJUSTMENTS TO INTEREST ACCRUALS ON THE DEBENTURES

     If a U.S. Holder receives actual payments with respect to the debentures in
a taxable  year that in the  aggregate  exceed  the  total  amount of  projected
payments  for that  taxable  year,  the U.S.  Holder will incur a "net  positive
adjustment"  equal to the amount of such excess.  The U.S. Holder will treat the
"net positive  adjustment" as additional  interest  income for the taxable year.
For this  purpose,  the payments in a taxable year include the fair market value
of property (including our common stock) received in that year.

     If a U.S. Holder receives actual payments with respect to the debentures in
a taxable year that in the  aggregate  are less than the amount of the projected
payments  for that  taxable  year,  the U.S.  Holder will incur a "net  negative
adjustment" equal to the amount of such deficit. This adjustment will (a) reduce
the U.S.  Holder's  interest  income on the debentures  that would  otherwise be
included  for that taxable  year,  and (b) to the extent of any excess after the
application  of (a),  give rise to an  ordinary  loss to the  extent of the U.S.
Holder's interest income on the debentures  during prior taxable years,  reduced
to the extent such interest was offset by prior net negative adjustments treated
as ordinary loss on the debentures in prior taxable years, and (c) to the extent
of any further  excess,  reduce  interest income in respect of the debentures in
subsequent  taxable years,  and to the extent not so applied,  reduce the amount
realized on a sale, exchange or retirement of the debentures.

     SALE, EXCHANGE, CONVERSION OR REDEMPTION OF THE DEBENTURES

     Generally, the sale or exchange of a debenture, a conversion of a debenture
or the  redemption of a debenture for cash,  will result in taxable gain or loss
to a U.S.  Holder.  In addition,  as described  above, the schedule of projected
payments for the debentures includes the receipt of common stock upon conversion
of a debenture  into shares of our common  stock as a  contingent  payment  with
respect to the  debenture.  Accordingly,  we intend to treat the transfer of our
common stock to a U.S. Holder upon the conversion of a debenture as a contingent
payment. Under this treatment,  such a conversion or redemption also will result
in  taxable  gain or loss to the U.S.  Holder.  The  amount of gain or loss on a
taxable sale,  exchange,  conversion or redemption of a debenture will equal the
difference  between (a) the amount of cash plus the fair market  value of any of
our common stock or other property  received by the U.S. Holder and (b) the U.S.
Holder's adjusted tax basis in the debenture. A U.S. Holder's adjusted tax basis
in a  debenture  on any date  generally  will equal the U.S.  Holder's  original
purchase price for the debenture,  increased by any interest  income  previously
accrued  by the U.S.  Holder  (determined  without  regard  to any  positive  or
negative adjustments to interest accruals described above), and decreased by the
amount of any projected  payments on the debentures  projected to have been made
through  that  date.  Gain  recognized  upon a  sale,  exchange,  conversion  or
redemption of a debenture generally will be treated as interest income; any loss
will be  ordinary  loss to the  extent  of the  excess  of  interest  previously
included in income over the total  negative  adjustments  previously  taken into
account as ordinary  loss, and  thereafter,  will be capital loss (which will be
long-term if the debenture is held for more than one year). The deductibility of
net capital losses is subject to limitations.  A U.S. Holder who sells the notes
at a loss that meets  certain  thresholds  may be required to file a  disclosure
statement with the IRS.

     A U.S.  Holder's  tax basis in shares of our common stock  received  upon a
conversion of a debenture or upon a holder's exercise of a redemption right that
we elect to pay in shares of our common  stock will equal the then  current fair
market value of such common  stock.  The U.S.  Holder's  holding  period for the
shares of our  common  stock  received  will  commence  on the date  immediately
following conversion or redemption.





     CONSTRUCTIVE DIVIDENDS

     An  increase  in the  conversion  rate  of the  debentures,  either  at our
discretion or pursuant to the  conversion  rate  adjustment  provisions,  may in
certain  circumstances  be  treated  as a taxable  dividend  to  holders  of the
debentures.  For example,  if at any time we make a distribution  of property to
our  stockholders  that would be taxable to the  stockholders  as a dividend for
U.S.  federal  income tax purposes  and, in  accordance  with the  anti-dilution
provisions  of  the  debentures,  the  conversion  rate  of  the  debentures  is
increased,  such increase may be deemed to be the payment of a taxable  dividend
to holders of the debentures. An increase in the conversion rate in the event of
distribution  of our evidences of  indebtedness  or our assets or an increase in
the event of the  payment  by us of a cash  dividend  will  generally  result in
deemed  dividend  treatment  to  holders  of the  debentures,  but a  reasonable
increase  in the  event of stock  dividends  or the  distribution  of  rights to
subscribe  for our common  stock  generally  will not.  If an event  occurs that
dilutes the interests of the holders of the debentures and the conversion  price
is not adjusted,  the resulting  increase in the  proportionate  interest of our
holders  of  common  stock  could  be  treated  as a  taxable  dividend  to such
stockholders.

     DISTRIBUTIONS ON COMMON STOCK

     Distributions  paid on our  common  stock  received  upon  conversion  of a
debenture,  other than certain pro rata distributions of common shares,  will be
treated as a dividend to the extent paid out of current or accumulated  earnings
and profits (as determined under U.S. federal income tax principles) and will be
includible in income by the U.S. Holder.  If a distribution  exceeds our current
and  accumulated  earnings  and profits,  the excess will be first  treated as a
tax-free return of the U.S.  Holder's  investment,  up to the U.S.  Holder's tax
basis in the common  stock.  Any  remaining  excess will be treated as a capital
gain. Under recently  enacted  legislation,  dividends  received by noncorporate
U.S.  Holders on common stock may be subject to U.S. federal income tax at lower
rates than other types of ordinary  income if certain  conditions  are met. U.S.
Holders should consult their own tax advisors regarding the implications of this
new legislation in their particular circumstances.

     SALE OR OTHER DISPOSITION OF COMMON STOCK

     Gain or loss realized by a U.S. Holder on the sale or other  disposition of
our common stock received upon conversion of a debenture will be capital gain or
loss for U.S. federal income tax purposes, and will be long-term capital gain or
loss if the U.S. Holder held the common stock for more than one year. The amount
of the U.S.  Holder's gain or loss will be equal to the  difference  between the
U.S.  Holder's tax basis in the common stock disposed of the amount  realized on
the disposition.  A U.S. holder who sells the stock at a loss that meets certain
thresholds may be required to file a disclosure statement with the IRS.

TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

     The rules governing U.S.  federal income  taxation of Non-U.S.  Holders are
complex  and this  offering  memorandum  provides  only a summary of such rules.
Non-U.S.  Holders should consult with their tax advisors to determine the effect
of U.S. federal,  state, local and foreign income tax laws, as well as treaties,
with regard to an investment in the  debentures  and shares of our common stock,
including any reporting requirements.

     PAYMENTS MADE WITH RESPECT TO THE DEBENTURES

     The 30% U.S.  federal  withholding  tax will not apply to any  payment to a
Non-U.S. Holder of principal or interest (including amounts taken into income as
interest under the accrual rules described above under "Tax  Considerations  for
of U.S. Holders" and amounts attributable to the receipt of shares of





our  common  stock  upon  a  conversion  or  redemption  of the  debentures)  on
debentures,  provided  that: (i) the Non-U.S.  Holder does not own,  actually or
constructively, 10% or more of the total combined voting power of all classes of
our stock entitled to vote, (ii) the Non-U.S. Holder is not a controlled foreign
corporation related,  directly or indirectly, to us through stock ownership; and
(iii)  either (A) the  beneficial  owner of  debentures  certifies  to us or our
paying  agent  on IRS Form  W-8BEN  or an  appropriate  substitute  form,  under
penalties  of  perjury,  that it is not a U.S.  person  and  provides  its name,
address and certain  other  information  or (B) the  beneficial  owner holds its
debentures   through   certain   foreign   intermediaries   or  certain  foreign
partnerships and such holder satisfies certain certification requirements.

     If the Non-U.S.  Holder cannot satisfy the  requirements  described  above,
payments  of interest  (including  amounts  taken into income  under the accrual
rules described above under "Tax  Considerations  for U.S.  Holders" and amounts
attributable  to the  receipt  of our  common  stock  upon a  conversion  of the
debentures)  may be subject to the 30% U.S.  federal  withholding tax unless the
Non-U.S.  Holder  provides us with a properly  executed  (1) IRS Form W-8BEN (or
successor form) claiming an exemption from or reduction in withholding  under an
applicable  tax treaty or (2) IRS Form W-8ECI (or  successor  form) stating that
interest paid on the debentures is not subject to withholding  tax because it is
effectively connected with the Non-U.S.  Holder's conduct of a trade or business
in the United States.

     If a Non-U.S. Holder of the debentures is engaged in a trade or business in
the United States,  and if interest on the  debentures is effectively  connected
with the conduct of such trade or business, the Non-U.S. Holder, although exempt
from the withholding tax discussed in the preceding  paragraphs,  will generally
be subject to U.S.  federal  income tax on  interest  on a net basis in the same
manner as if it were a U.S. Holder (see "Tax  Considerations  for U.S.  Holders"
above),  except that the Non-U.S.  Holder will be required to provide a properly
executed IRS From W-8ECI in order to claim an exemption  from  withholding  tax.
These  Non-U.S.  Holders  should  consult their own tax advisors with respect to
other tax  consequences  of the  ownership of the notes,  including the possible
imposition  of a branch  profits  tax at 30% (or at a reduced  rate set under an
applicable tax treaty) for corporate Non-U.S. Holders.

     SALE OR EXCHANGE OF DEBENTURES OR COMMON STOCK

     A Non-U.S.  Holder will not generally be subject to U.S.  federal income or
withholding  tax  with  respect  to  gain  upon  the  sale,  exchange  or  other
disposition  of the  debentures or shares of our common stock,  unless:  (1) the
income or gain is "U.S.  trade or business  income,"  which means income or gain
that is effectively connected with the conduct by the Non-U.S. Holder of a trade
or business,  or, in the case of a treaty resident,  attributable to a permanent
establishment or a fixed base in the United States; (2) such Non-U.S.  Holder is
an  individual  who is present in the United  States for 183 days or more in the
taxable  year of  disposition  and certain  other  conditions  are met; (3) such
Non-U.S.  Holder is subject to tax  pursuant to the  provisions  of the Internal
Revenue Code  applicable  to certain U.S.  expatriates;  (4) with respect to the
debentures,  the Non-U.S. Holder does not meet the conditions for exemption from
U.S.  federal  withholding  tax  described  above;  or (5) in the  case  of gain
realized on the sale, exchange,  conversion or redemption of the debentures,  we
are not and have not been within the shorter of the five-year  period  preceding
such sale,  exchange,  conversion or redemption  and the period during which the
Non-U.S.  Holder held the debentures,  a U.S. real property holding corporation.
We believe that we are currently not a U.S.  real property  holding  corporation
for U.S. federal income tax purposes and will not become one in the future.

     U.S.  trade or  business  income of a Non-U.S.  Holder  will  generally  be
subject to U.S.  federal  income tax on a net basis in the same  manner as if it
were realized by a U.S.  Holder.  A Non-U.S.  Holder that realizes U.S. trade or
business  income with respect to the  debentures or common stock should  consult
its tax  advisors  as to the  treatment  of such income or gain,  including  the
possible  imposition  of a branch  profits tax of 30% (or at a reduced  rate set
under an applicable tax treaty) for corporate Non-U.S. Holders.





     CONSTRUCTIVE DIVIDENDS

     If a Non-U.S.  Holder were deemed to have received a constructive  dividend
(see "Tax Considerations for U.S. Holders -- Constructive Dividends" above), the
Non-U.S.  Holder  generally  will be subject to  withholding  tax at a 30% rate,
subject to reduction by an applicable  tax treaty,  on the taxable amount of the
dividend.  To claim the benefit of a tax treaty,  a Non-U.S.  Holder must comply
with all certification requirements necessary to qualify for treaty benefits. It
is possible that U.S. federal tax on the constructive dividend would be withheld
from the interest  paid to the Non-U.S.  Holders of the  debentures.  A Non-U.S.
Holder who is subject to withholding tax under such circumstances should consult
its own tax advisor as to whether it can obtain a refund for all or a portion of
the withholding tax.

     DISTRIBUTIONS ON COMMON STOCK

     Dividends paid to a Non-U.S.  Holder of our common stock  generally will be
subject to U.S.  withholding  tax at a 30% rate,  subject to reduction  under an
applicable treaty. In order to obtain a reduced rate of withholding,  a Non-U.S.
Holder  will be  required  to  provide  a  properly  executed  IRS  Form  W-8BEN
certifying its entitlement to benefits under a treaty. A Non-U.S.  Holder who is
subject to withholding tax under such  circumstances  should consult its own tax
advisor  as to  whether  it can  obtain a  refund  for all or a  portion  of the
withholding tax.

     If a Non-U.S.  Holder of our common stock is engaged in a trade or business
in the United  States,  and if the dividends  (or  constructive  dividends)  are
effectively  connected with the conduct of this trade or business,  the Non-U.S.
Holder,  although exempt from U.S.  withholding  tax, will generally be taxed in
the same manner as a U.S.  Holder  (see "Tax  Considerations  for U.S.  Holders"
above),  except that the Non-U.S.  Holder will be required to provide a properly
executed IRS Form W-8ECI in order to claim an exemption  from  withholding  tax.
These  Non-U.S.  Holders  should  consult their own tax advisors with respect to
other tax  consequences  of the  ownership of our common  stock,  including  the
possible  imposition of a branch  profits tax at 30% (or at a reduced rate under
an applicable tax treaty) for corporate Non-U.S. Holders.

BACKUP WITHHOLDING AND INFORMATION REPORTING

     U.S. HOLDERS

     Payments  of interest or  dividends  made by us on, or the  proceeds of the
sale or other  disposition  of, the debentures or shares of our common stock may
be subject to information  reporting and U.S. federal backup  withholding tax if
the   recipient   of  such  payment   fails  to  supply  an  accurate   taxpayer
identification  number  or  otherwise  fails  to  comply  with  applicable  U.S.
information reporting or certification requirements.  Any amount withheld from a
payment to a U.S.  Holder under the backup  withholding  rules is allowable as a
credit against the holder's U.S.  federal income tax liability,  and may entitle
such U.S.  Holder to a tax refund,  provided  that the required  information  is
furnished to the IRS.

     NON-U.S. HOLDERS

     A Non-U.S.  Holder may be required to comply with certification  procedures
to  establish  that the  holder is not a U.S.  person  in order to avoid  backup
withholding  tax with respect to our  payments of principal  and interest on the
debentures,  or  dividends on our common  stock,  or the proceeds of the sale or
other  disposition of the debentures or common stock.  In addition,  information
returns may be filed with the IRS in connection  with payments on the debentures
and our common stock and the proceeds from a sale or other  disposition  of such
debentures or common stock. Copies of these information returns may also be made
available  under the  provisions  of a specific  treaty or  agreement to the tax
authorities  of the country in which the  Non-U.S.  Holder  resides.  Any amount
withhold from a payment to a Non-U.S.  Holder under backup  withholding rules is
allowable as a credit against the Non-U.S. Holder's federal income tax liability





and may entitle such  Non-U.S.  Holder to a refund,  provided  that the required
information is furnished to the IRS.

THE PROPER TAX TREATMENT OF A HOLDER OF THE  DEBENTURES IS UNCERTAIN IN A NUMBER
OF  RESPECTS.  HOLDERS  SHOULD  CONSULT  THEIR TAX ADVISORS  REGARDING  THE U.S.
FEDERAL,  STATE,  LOCAL AND FOREIGN TAX  CONSEQUENCES  OF AN  INVESTMENT  IN THE
DEBENTURES  AND WHETHER AN INVESTMENT IN THE DEBENTURES IS ADVISABLE IN LIGHT OF
THE AGREED UPON TAX TREATMENT AND THE HOLDER'S PARTICULAR TAX SITUATION.





                            SELLING SECURITY HOLDERS

     We  originally  issued the  debentures in  transactions  exempt from or not
subject to registration under the Securities Act of 1933. The debentures and the
common stock  issuable  upon  conversion  thereof that may be offered under this
prospectus will be offered by the selling security holders, which includes their
donees,  pledgees,  transferees  and other  successors-in-interest.  Only  those
debentures  and shares of common stock issuable upon  conversion  thereof listed
below  may be  offered  for  resale  by the  selling  holders  pursuant  to this
prospectus.

     The following table sets forth certain information, as of January 22, 2004,
about the  principal  amount of  debentures  beneficially  owned by each selling
security  holder  and the  number  of  shares  of  common  stock  issuable  upon
conversion of these debentures that may be offered from time to time pursuant to
this prospectus.

     The percentage of debentures outstanding beneficially owned by each selling
security holder is based on $540,000,000  aggregate principal amount of Series A
debentures  outstanding and $300,000,000  aggregate principal amount of Series B
debentures outstanding.  The number of shares of common stock owned prior to the
offering does not include shares of common stock issuable upon conversion of the
debentures.  The  number  of shares of  common  stock  shown in the table  below
assumes  conversion of the full amount of debentures  held by such holder at the
initial  conversion  rate of  20.3732  shares  per  $1,000  principal  amount of
debentures.  This  conversion  rate is subject to adjustment as described  under
"Description of the Series A Debentures--Conversion  Rights" and "Description of
the Series B Debentures--Conversion  Rights." Accordingly,  the number of shares
of common stock  issuable  upon  conversion  of the  debentures  may increase or
decrease from time to time. Under the terms of the indenture,  fractional shares
will not be issued upon conversion of the debentures.  Cash will be paid instead
of fractional shares, if any.



                                                                                           
                                                                                       NUMBER OF
                                                                                       SHARES OF
                                                                                       COMMON       NUMBER OF
                                                                                       STOCK        SHARES OF
                                               PRINCIPAL AMOUNT                        OWNED         COMMON      PERCENTAGE OF
                                                 OF DEBENTURES        PERCENTAGE OF    PRIOR TO    STOCK THAT        COMMON
                                              BENEFICIALLY OWNED        DEBENTURES     THE           MAY BE          STOCK
NAME OF SELLING SECURITY HOLDER                THAT MAY BE SOLD        OUTSTANDING     OFFERING(1)  SOLD (2)    OUTSTANDING(3)
                                             ----------------------------------------- ----------- ----------   --------------
                                             SERIES A     SERIES B   SERIES A SERIES B
                                             --------     --------   -------- --------
1976 Distribution Trust FBO A.R. Lauder /
   Zinterhofer                                    9,000        3,000        *        *           0          244              *
2000 Revocable Trust FBO A.R. Lauder /
   Zinterhofer                                    9,000        3,000        *        *           0          244              *
Advent Convertible Master (Cayman) L.P.      19,949,000    4,130,000    3.69%    1.38%           0      490,565              *
Aftra Health Fund                                75,000            0        *      N/A           0        1,527              *
AG Domestic Convertibles, L.P.                4,375,000    1,750,000        *        *           0      124,785              *
AG Offshore Convetibles, LTD                  8,125,000    3,250,000    1.50%    1.08%           0      231,744              *
AIG DKR SoundShore Oasis Holding Fund
   Ltd.                                               0    7,500,000      N/A     2.5%           0      152,799              *
AIG DSK SoundShore Strategic Holding Fund
   Ltd.                                               0    7,500,000      N/A     2.5%           0      152,799              *
Akela Capital Master Fund, Ltd.                       0    9,500,000      N/A    3.17%           0      193,545              *
Alcon Laboratories                              464,000            0        *      N/A           0        9,453              *
Allentown City Firefighters Pension Plan         17,000        6,000        *        *           0          468              *
Allentown City Officers & Employees
   Pension Fund                                  18,000        7,000        *        *           0          508              *






                                                                                       NUMBER OF
                                                                                       SHARES OF
                                                                                       COMMON       NUMBER OF
                                                                                       STOCK        SHARES OF
                                               PRINCIPAL AMOUNT                        OWNED         COMMON      PERCENTAGE OF
                                                 OF DEBENTURES        PERCENTAGE OF    PRIOR TO    STOCK THAT        COMMON
                                              BENEFICIALLY OWNED        DEBENTURES     THE           MAY BE          STOCK
NAME OF SELLING SECURITY HOLDER                THAT MAY BE SOLD        OUTSTANDING     OFFERING(1)  SOLD (2)    OUTSTANDING(3)
                                             ----------------------------------------- ----------- ----------   --------------
                                             SERIES A     SERIES B   SERIES A SERIES B
                                             --------     --------   -------- --------
Allentown City Police Pension Plan               28,000       10,000        *        *           0          773              *
Allstate Insurance Company                    1,000,000            0        *      N/A      34,900       20,373              *
Allstate Life Insurance Company               1,500,000            0        *      N/A           0       30,559              *
Alpha US Sub Fund 4 LLC                         894,000            0        *      N/A           0       18,213              *
Alta Partners Holdings LDC                   10,000,000            0    1.85%      N/A           0      203,732              *
American Investors Life Insurance Co.           800,000            0        *      N/A           0       16,298              *
Arapahoe County Colorado                         58,000       21,000        *        *           0        1,608              *
Argent Classic Convertible Arbitrage Fund
   L.P.                                       3,700,000    1,100,000        *        *           0       97,790              *
Argent Classic Convertible Arbitrage Fund
   II, L.P.                                     900,000      400,000        *        *           0       26,484              *
Argent Classic Convertible Arbitrage Fund
   (Bermuda) Ltd.                            12,300,000    4,100,000    2.28%    1.37%           0      334,120              *
Argent LowLev Convertible Arbitrage Fund
   LLC                                        2,254,000    2,774,000        *        *           0      102,436              *
Argent LowLev Convertible Arbitrage Fund
   II, LLC                                      346,000      426,000        *        *           0       15,727              *
Argent LowLev Convertible Arbitrage Fund
   Ltd.                                       9,600,000    8,800,000    1.78%    2.93%           0      374,866              *
Argent Silver Convertible Arbitrage Fund,
   LDC                                        1,000,000    1,200,000        *        *           0       44,820              *
Arlington County Employees Retirement
   System                                       802,000      290,000        *        *           0       22,247              *
Asante Health Systems                           120,000       43,000        *        *           0        3,320              *
Banc of America Securities LLC(4)             2,600,000    3,723,000        *    1.24%           0      128,819              *
Bank of America Pension Plan                  3,000,000            0        *      N/A           0       61,119              *
Barclays Global Investors Ltd                 1,000,000            0        *      N/A           0       20,373              *
Bay County PERS                                 100,000            0        *      N/A           0        2,037              *
B.C. McCabe Foundation                          125,000            0        *      N/A           0        2,546              *
Bear Stearns & Co., Inc.                              0    8,000,000      N/A    2.67%           0      162,985              *
Black Diamond Convertible Offshore LDC        1,089,000            0        *      N/A           0       22,186              *
Black Diamond Offshore Ltd.                     607,000            0        *      N/A           0       12,366              *
BMO Nesbitt Burns Inc.                        5,500,000            0    1.02%      N/A           0      112,052              *
BNP Paribas Arbitrage                         2,970,000      830,000        *        *           0       77,417              *
British Virgin Islands Social Security
   Board                                        105,000       38,000        *        *           0        2,913              *
Canadian Imperial Holding, Inc.               5,000,000            0        *      N/A           0      101,866              *
Century Park Trust                            2,000,000            0        *      N/A           0       40,746              *
Citadel Equity Fund Ltd.                     15,930,000            0    2.95%      N/A     202,800      324,545              *
Citadel Jackson Investment Fund Ltd.          2,070,000            0        *      N/A           0       42,172
Citigroup Global Markets Inc.(5)              4,000,000            0        *      N/A           0       81,492              *
City and County of San Francisco
   Retirement System                          1,773,000      641,000        *        *           0       49,180              *
City of New Orleans                             244,000       88,000        *        *           0        6,763              *
City University of New York                     180,000       65,000        *        *           0        4,991              *
Class C Trading Company, Ltd.                 1,200,000    1,400,000        *        *           0       52,969              *
CNH CA Master Account, L.P.                   1,000,000    1,000,000        *        *           0       40,746              *
Consulting Group Capital Market Funds         1,000,000            0        *      N/A           0       20,373              *





                                                                                       NUMBER OF
                                                                                       SHARES OF
                                                                                       COMMON       NUMBER OF
                                                                                       STOCK        SHARES OF
                                               PRINCIPAL AMOUNT                        OWNED         COMMON      PERCENTAGE OF
                                                 OF DEBENTURES        PERCENTAGE OF    PRIOR TO    STOCK THAT        COMMON
                                              BENEFICIALLY OWNED        DEBENTURES     THE           MAY BE          STOCK
NAME OF SELLING SECURITY HOLDER                THAT MAY BE SOLD        OUTSTANDING     OFFERING(1)  SOLD (2)    OUTSTANDING(3)
                                             ----------------------------------------- ----------- ----------   --------------
                                             SERIES A     SERIES B   SERIES A SERIES B
                                             --------     --------   -------- --------
Continental Assurance Company on behalf of
   its separate account (E)                   4,500,000    1,000,000        *        *           0      112,052              *
Continental Casualty Company                    500,000    9,000,000        *    3.00%           0      193,544              *
Convertible Securities Fund                      90,000            0        *      N/A           0        1,833              *
CooperNeff Convertible Strategies (Cayman)
   Master Fund, L.P.                          3,135,000      854,000        *        *           0       81,267              *
CQS Convertible & Quantitative Strategies
   Master Fund Limited                                0    2,500,000      N/A        *           0       50,933              *
Credit Lyonnais Securities (USA) Inc.                 0    6,000,000      N/A    2.00%           0      122,239              *
DB Equity Opportunities Master Portfolio
   LTD                                        4,900,000            0        *      N/A           0       99,828              *
DBAG London                                  30,500,000            0    5.65%      N/A           0      621,382              *
DEAM Convertible Arbitrage                    2,400,000            0        *      N/A           0       48,895              *
DeepRock & Co.                                2,500,000            0        *      N/A           0       50,933              *
Delaware Public Employees Retirement System   1,857,000      671,000        *        *           0       51,503              *
DKR Saturn Event Driven Holding Fund Ltd.     1,250,000    3,250,000        *    1.08%           0       91,678              *
DKR Saturn Special Situations Holding Fund
   Ltd.                                       1,250,000    3,250,000        *    1.08%           0       91,678              *
Dodeca Fund, L.P.                             2,150,000            0        *      N/A           0       43,802              *
Double Black Diamond Offshore LDC             3,188,000            0        *      N/A           0       64,949              *
DuckBill & Co.                                1,000,000            0        *      N/A           0       20,373              *
Fidelity Financial Trust: Fidelity
   Convertible Securities Fund                2,000,000            0        *      N/A           0       40,746              *
Fore Convertible Master Fund LTD             17,000,000            0    3.15%      N/A           0      346,344              *
Gaia Offshore Master Fund Ltd.               11,300,000    4,400,000    2.09%    1.47%           0      319,859              *
Geode U.S. Convertible Arbitrage Fund, a
   series of Geode Investors, LLC             5,250,000            0        *      N/A           0      106,959              *
General Motors Welfare Benefit Trust          2,000,000            0        *      N/A           0       40,746              *
Global Bermuda Limited Partnership                    0    6,000,000      N/A    2.00%           0      122,239              *
GMAM Group Pension Trust                      1,250,000            0        *      N/A           0       25,466              *
Goldman Sachs & Co.                          11,500,000            0    2.13%      N/A     203,279      234,291              *
Goldman Sachs & Co. Profit Sharing Master
   Trust                                              0       73,000      N/A        *           0        1,487              *
Grady Hospital Foundation                       160,000       58,000        *        *           0        4,440              *
Guggenheim Portfolio Company VIII, LLC        3,352,000            0        *      N/A           0       68,290              *
HFR Arbitrage Fund                            1,015,000            0        *      N/A           0       20,678              *
HFR CA Global Select Master Trust Account       200,000      300,000        *        *           0       10,185              *
Highbridge International LLC                 15,000,000   10,000,000    2.78%    3.33%           0      509,330              *
Independence Blue Cross                         498,000      180,000        *        *           0       13,812              *
Inflective Convertible Opportunity Fund I,
   L.P.                                          50,000            0        *      N/A           0        1,018              *
Intl. Truck & Engine Corp. Non
   Contributory Retirement Plan Trust           525,000            0        *      N/A           0       10,695              *
Intl. Truck & Engine Corp. Retirement Plan
   for Salaried Employee's Trust                800,000            0        *      N/A           0       16,298              *
John Deere Pension Trust                      1,000,000            0        *      N/A           0       20,373              *
JMG Capital Partners, LP                      9,750,000    5,000,000    1.81%    1.67%           0      300,504              *
JMG Triton Offshore Fund, Ltd.               16,000,000   10,000,000    2.96%    3.33%           0      529,703              *





                                                                                       NUMBER OF
                                                                                       SHARES OF
                                                                                       COMMON       NUMBER OF
                                                                                       STOCK        SHARES OF
                                               PRINCIPAL AMOUNT                        OWNED         COMMON      PERCENTAGE OF
                                                 OF DEBENTURES        PERCENTAGE OF    PRIOR TO    STOCK THAT        COMMON
                                              BENEFICIALLY OWNED        DEBENTURES     THE           MAY BE          STOCK
NAME OF SELLING SECURITY HOLDER                THAT MAY BE SOLD        OUTSTANDING     OFFERING(1)  SOLD (2)    OUTSTANDING(3)
                                             ----------------------------------------- ----------- ----------   --------------
                                             SERIES A     SERIES B   SERIES A SERIES B
                                             --------     --------   -------- --------
KBC Financial Products USA Inc.               3,343,300    1,717,000        *        *           0      103,093              *
KeySpan Foundation                               50,000            0        *      N/A           0        1,018              *
Lakeshore International Limited                       0   24,000,000      N/A    8.00%           0      488,956              *
LDG Limited                                   1,534,000            0        *      N/A           0       31,252              *
LLT Limited                                      34,000       34,000        *        *           0        1,384              *
Lord Abbett Investment Trust - LA
   Convertible Fund                             900,000            0        *      N/A           0       18,335              *
Lyxor                                         1,500,000    1,500,000        *        *           0       61,118              *
Lyxor/Convertible Arbitrage Fund Limited        233,000       50,000        *        *           0        5,764              *
Lyxor/Gaia II Fund Ltd.                       2,700,000    1,000,000        *        *           0       75,380              *
Lyxor Master Fund                             1,500,000    1,600,000        *        *           0       63,156              *
McMahon Securities Co. L.P.                     750,000            0        *      N/A           0       15,279              *
Mainstay Convertible Fund                     1,605,000            0        *      N/A           0       32,698              *
Mainstay VP Convertible Fund                    985,000            0        *      N/A           0       20,067              *
Man Convertible Bond Master Fund, Ltd.                0   10,731,000      N/A    3.58%           0      218,624              *
Man Mac 1 Limited                             5,267,000            0        *      N/A           0      107,305              *
Maystone Continuum Master Fund, LTD.                  0    1,500,000      N/A        *           0       30,559              *
Merrill Lynch Insurance Corporation             395,000      143,000        *        *           0       10,960              *
MLQA Convertible Securities Arbitrage, LTD    5,000,000    5,000,000        *    1.67%           0      203,732              *
Morgan Stanley Convertible Securities Trust   1,500,000            0        *      N/A           0       30,559              *
Municipal Employees                             287,000      104,000        *        *           0        7,965              *
National Bank of Canada c/o Putnam Lovell
   NBF Securities Inc.                        8,500,000            0    1.57%      N/A           0      173,172              *
National Fuel & Gas Company Retirement Plan     150,000            0        *      N/A           0        3,055              *
Nations Convertible Securities Fund          11,910,000            0    2.21%      N/A           0      242,644              *
New Orleans Firefighters Pension / Relief
   Fund                                         163,000       59,000        *        *           0        4,522              *
New York Life Insurance Company (Post 82)     1,750,000            0        *      N/A           0       35,653              *
New York Life Insurance Company (Pre 82)        805,000            0        *      N/A           0       16,400              *
New York Life Separate A/C #7                    40,000            0        *      N/A           0          814              *
Newport Alternative Income Fund                 400,000            0        *      N/A           0        8,149              *
Nomura Securities International, Inc.        25,000,000            0    4.63%      N/A       7,800      509,330              *
NMS Services (Cayman) Inc.                   10,000,000            0    1.85%      N/A           0      203,732              *
Occidental Petroleum Corporation                323,000      117,000        *        *           0        8,963              *
Ohio Bureau of Workers Compensation             214,000       77,000        *        *           0        5,927              *
OIP Limited                                     570,000            0        *      N/A           0       11,612              *
Oppenheimer Convertible Securities Fund       4,000,000            0        *      N/A           0       81,492              *
Oxford, Lord Abbett & Co.                     1,500,000            0        *      N/A           0       30,559              *
OZ Convertible Master Fund, Ltd.                      0      459,000      N/A        *           0        9,351              *
OZ MAC 13 Ltd.                                        0       85,000      N/A        *           0        1,731              *
OZ Master Fund, Ltd.                                  0    5,883,000      N/A    1.96%           0      119,855              *
Peoples Benefit Life Insurance Company
   Teamsters                                  8,000,000            0    1.48%      N/A           0      162,985              *
Policeman and Fireman Retirement System of
   the City of Detroit                          670,000      242,000        *        *           0       18,580              *
Polygon Global Opportunities Master Fund     22,000,000            0    4.07%      N/A           0      448,210              *
President & Fellows of Harvard College                0   10,000,000      N/A    3.33%       8,507      203,732              *





                                                                                       NUMBER OF
                                                                                       SHARES OF
                                                                                       COMMON       NUMBER OF
                                                                                       STOCK        SHARES OF
                                               PRINCIPAL AMOUNT                        OWNED         COMMON      PERCENTAGE OF
                                                 OF DEBENTURES        PERCENTAGE OF    PRIOR TO    STOCK THAT        COMMON
                                              BENEFICIALLY OWNED        DEBENTURES     THE           MAY BE          STOCK
NAME OF SELLING SECURITY HOLDER                THAT MAY BE SOLD        OUTSTANDING     OFFERING(1)  SOLD (2)    OUTSTANDING(3)
                                             ----------------------------------------- ----------- ----------   --------------
                                             SERIES A     SERIES B   SERIES A SERIES B
                                             --------     --------   -------- --------
Pro-mutual                                      901,000      326,000        *        *           0       24,997              *
Putnam Convertible Income - Growth Fund       7,300,000            0    1.35%      N/A           0      148,724              *
Pyramid Equity Strategies Fund                1,200,000            0        *      N/A           0       24,447              *
Radian Asset Assurance, Inc.                    200,000            0        *      N/A           0        4,074              *
Radian Group Convertible Securities           1,175,000            0        *      N/A           0       23,938              *
Radian Guaranty                               4,175,000            0        *      N/A           0       85,058              *
RBC Alternative Assets L.P.                     100,000            0        *      N/A      11,590        2,037              *
Retail Clerks Pension Trust                   2,000,000            0        *      N/A           0       40,746              *
Retail Clerks Pension Trust #2                1,000,000            0        *      N/A           0       20,373              *
Royal Bank of Canada                          4,000,000            0        *      N/A       5,320       81,492              *
S.A.C. Capital Associates, LLC                        0    2,500,000      N/A        *     131,000       50,933              *
Sage Capital                                  2,400,000            0        *      N/A           0       48,895              *
Silverback Master, LTD                                0    5,250,000      N/A    1.75%           0      106,959              *
Silvercreek II Limited                          985,000            0        *      N/A           0       20,067              *
Silvercreek Limited Partnership               2,045,000            0        *      N/A           0       41,663              *
Singlehedge U.S. Convertible Arbitrage Fund     735,000      138,000        *        *           0       17,785              *
St. Albans Partners Ltd.                      5,000,000            0        *      N/A           0      101,866              *
St. Thomas Trading, Ltd.                              0   16,769,000      N/A    5.59%           0      341,638              *
State of Maryland Retirement Agency           3,843,000    1,398,000        *        *           0      106,775              *
Sturgeon Limited                                427,000      118,000        *        *           0       11,103              *
Sunrise Partners Limited Partnership         21,000,000    9,000,000    3.89%    3.00%       2,600      611,195              *
Susquehanna Capital Group                             0    8,750,000      N/A    2.92%           0      178,265              *
Tag Associates                                  192,000            0        *      N/A           0        3,911              *
TD Securities (USA) Inc.                     30,500,000            0    5.65%      N/A           0      621,382              *
Teacher's Insurance & Annuity Association
   of America                                         0   14,000,000      N/A    4.67%           0      285,224              *
The Coast Fund, L.P.                          5,500,000    5,000,000    1.02%    1.67%           0      213,918              *
The Grable Foundation                            96,000       35,000        *        *           0        2,668              *
Topanga XI                                    3,500,000    1,600,000        *        *           0      103,903              *
Total Fina Elf Finance USA, Inc.                250,000            0        *        *           0        5,093              *
Tredia Performance Fund Ltd.                    200,000      200,000        *        *           0        8,148              *
Tribeca Investments L.T.D.                            0   18,000,000      N/A    6.00%           0      366,717              *
Triborough Partners International Ltd.        1,050,000            0        *      N/A           0       21,391              *
Triborough Partners LLC                         450,000            0        *      N/A           0        9,167              *
Trustmark Insurance                             405,000      146,000        *        *           0       11,225              *
United Overseas Bank Convertible Bond (SGD)     240,000            0        *      N/A           0        4,889              *
United Overseas Bank Convertible Bond (USD)     100,000            0        *      N/A           0        2,037              *
White River Securities, L.L.C.                        0    8,000,000      N/A    2.67%           0      162,985              *
Windmill Master Fund, LP                              0    1,000,000      N/A        *           0       20,373              *
Worldwide Transactions Ltd.                     116,000            0        *      N/A           0        2,363              *
Xavex Convertible Arbitrage 2 Fund              700,000      800,000        *        *           0       30,559              *
Xavex Convertible Arbitrage 10 Fund           1,100,000      200,000        *        *           0       26,484              *
Yield Strategies Fund I, L.P.                 3,250,000            0        *      N/A           0       66,212              *
Yield Strategies Fund II, L.P.                3,500,000            0        *      N/A           0       71,306              *






                                                                                       NUMBER OF
                                                                                       SHARES OF
                                                                                       COMMON       NUMBER OF
                                                                                       STOCK        SHARES OF
                                               PRINCIPAL AMOUNT                        OWNED         COMMON      PERCENTAGE OF
                                                 OF DEBENTURES        PERCENTAGE OF    PRIOR TO    STOCK THAT        COMMON
                                              BENEFICIALLY OWNED        DEBENTURES     THE           MAY BE          STOCK
NAME OF SELLING SECURITY HOLDER                THAT MAY BE SOLD        OUTSTANDING     OFFERING(1)  SOLD (2)    OUTSTANDING(3)
                                             ----------------------------------------- ----------- ----------   --------------
                                             SERIES A     SERIES B   SERIES A SERIES B
                                             --------     --------   -------- --------
All other holders of debentures or future
   transferees, pledgees or donees of such
   holders(6)(7)                             19,080,700   11,335,000    3.53%    3.78%                  619,776              *

     TOTAL                                  540,000,000  300,000,000  100.00%  100.00%     607,796   17,113,488         17.50%



---------------
*    Less than one percent
N/A  Not applicable

(1)  Does not include  shares of common stock  issuable  upon  conversion of the
     debentures.
(2)  Consists  of  shares  of  common  stock  issuable  upon  conversion  of the
     debentures,  assuming  a  conversion  rate of  20.3732  shares  per  $1,000
     principal  amount  of the  debentures  and a cash  payment  in  lieu of any
     fractional share interest.  The conversion rate is subject to adjustment as
     described under "Description of the Series A Debentures--Conversion Rights"
     and   "Description   of  the  Series  B   Debentures--Conversion   Rights."
     Accordingly,  the number of shares of common stock issuable upon conversion
     of the debentures may increase or decrease from time to time.
(3)  Calculated based on Rule 13d-3(d)(1)  under the Securities  Exchange Act of
     1934, as amended,  using 83,541,840  shares of common stock  outstanding on
     December 23, 2003. In  calculating  this amount,  we treated as outstanding
     the  number of  shares of common  stock  issuable  upon  conversion  of the
     debentures  by the  applicable  holder.  However,  we did  not  assume  the
     conversion of any other holder's debentures.
(4)  Banc of America  Securities LLC was an initial purchaser of each of the 25%
     of the Series A debentures and Series B debentures in the private placement
     of these securities.
(5)  Citigroup  Global Markets Inc. was an initial  purchaser of each of the 25%
     of the Series A debentures and Series B debentures in the private placement
     of these securities.
(6)  We will identify additional selling security holders, if any, by prospectus
     supplement  or  post-effective  amendment  before  they offer or sell their
     securities.
(7)  Assumes that the unnamed  holders of debentures or any future  transferees,
     pledgees or donees of or from any such unnamed  holder do not  beneficially
     own any common stock other than the common stock  issuable upon  conversion
     of the debentures at the initial conversion rate.

     The preceding table has been prepared based upon the information  furnished
to us by the selling security holders.  The selling security holders  identified
above may have sold,  transferred or otherwise  disposed of some or all of their
debentures  since the date on which the  information  in the preceding  table is
presented  in  transactions  exempt  from  or not  subject  to the  registration
requirements of the Securities Act of 1933.  Information  concerning the selling
security  holders  may  change  from time to time  and,  if  necessary,  we will
supplement  this  prospectus  accordingly.  We cannot give an estimate as to the
amount of the debentures or common stock issuable upon  conversion  thereof that
will be held by the  selling  security  holders  upon  the  termination  of this
offering  because  the selling  security  holders may offer some or all of their
debentures  or  common  stock  pursuant  to the  offering  contemplated  by this
prospectus. See "Plan of Distribution."

     To our knowledge,  other than their  ownership of the securities  described
above,  none of the  selling  security  holders  has, or has had within the past
three years, any position,  office or other material relationship with us or any
of our predecessors or affiliates.




                              PLAN OF DISTRIBUTION

     We will not receive any of the proceeds of the sale of the  debentures  and
the common  stock  offered by this  prospectus.  The  aggregate  proceeds to the
selling security holders from the sale of the debentures or common stock will be
the purchase  price of the  debentures  or common stock less any  discounts  and
commissions.  A selling  security  holder  reserves  the  right to  accept  and,
together with their agents,  to reject,  any proposed  purchase of debentures or
common stock to be made directly or through agents.

     The debentures and the common stock offered by this  prospectus may be sold
from time to time to purchasers:

     o    directly by the selling security holders and their  successors,  which
          includes   their   donees,    pledgees   or   transferees   or   their
          successors-in-interest; or

     o    through  underwriters,  broker-dealers  or  agents,  who  may  receive
          compensation  in  the  form  of  discounts,   commissions  or  agent's
          commissions from the selling security holders or the purchasers of the
          debentures  and the common  stock.  These  discounts,  concessions  or
          commissions  may be in  excess  of  those  customary  in the  types of
          transactions involved.

     The selling security holders and any underwriters, broker-dealers or agents
who  participate in the  distribution of the debentures and the common stock may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933.
As a result,  any profits on the sale of the  debentures and the common stock by
selling security holders and any discounts,  commissions or agent's  commissions
received by any such  broker-dealers  or agents may be deemed to be underwriting
discounts and  commissions  under the Securities Act of 1933.  Selling  security
holders who are "underwriters"  within the meaning of the Securities Act of 1933
will be subject to prospectus  delivery  requirements  of the  Securities Act of
1933.  If the  selling  security  holders  were deemed to be  underwriters,  the
selling security holders may be subject to certain statutory  liabilities of the
Securities  Act  of  1933  and  the  Securities  Exchange  Act of  1934.  If the
debentures and the common stock are sold through underwriters, broker-dealers or
agents,  the selling  security  holders  will be  responsible  for  underwriting
discounts or commissions or agent's commissions.

     The debentures and the common stock may be sold in one or more transactions
at:

     o    fixed prices;

     o    prevailing market prices at the time of sale;

     o    prices related to such prevailing market prices;

     o    varying prices determined at the time of sale; or

     o    negotiated prices.

     These sales may be effected in one or more transactions:

     o    on any national  securities exchange or quotation service on which the
          notes  and  common  stock  may be  listed or quoted at the time of the
          sale;

     o    in the over-the-counter market;

     o    in transactions otherwise than on such exchanges or services or in the
          over-the-counter market;





     o    through the writing of options  (including the issuance by the selling
          security  holders of  derivative  securities),  whether the options or
          such other derivative  securities are listed on an options exchange or
          otherwise;

     o    through the settlement of short sales; or

     o    through any combination of the foregoing.

     These transactions may include block  transactions or crosses.  Crosses are
transactions  in which  the same  broker  acts as an agent on both  sides of the
trade.

     In  connection  with  the  sales of the  debentures  and the  common  stock
issuable upon conversion thereof or otherwise,  the selling security holders may
enter  into  hedging   transactions  with   broker-dealers  or  other  financial
institutions  that in turn may engage in short  sales of the  debentures  or the
common stock in the course of hedging their  positions,  sell the debentures and
common  stock  short and deliver the  debentures  and common  stock to close out
short positions, loan or pledge debentures or the common stock to broker-dealers
or other  financial  institutions  that in turn may sell the  debentures and the
common stock,  enter into option or other  transactions  with  broker-dealers or
other financial  institutions  that require the delivery to the broker-dealer or
other  financial  institution of the  debentures or the common stock,  which the
broker-dealer  or  other  financial  institution  may  resell  pursuant  to  the
prospectus,  or enter into transactions in which a broker-dealer makes purchases
as a  principal  for  resale  for its own  account  or  through  other  types of
transactions.

     To  our  knowledge,   there  are  currently  no  plans,   arrangements   or
understandings  between  any  selling  security  holders  and  any  underwriter,
broker-dealer or agent regarding the sale of the debentures and the common stock
by the selling security holders.

     Our common  stock  trades on the New York Stock  Exchange  under the symbol
"DST." We do not intend to apply for listing of the debentures on any securities
exchange or for inclusion of the debentures in any automated  quotation  system.
Accordingly, no assurance can be given as to the development of liquidity or any
trading market for the debentures.  See "Risk Factors--An  active trading market
may not develop for the debentures."

     There can be no assurance that any selling security holder will sell any or
all of the debentures or the common stock pursuant to this prospectus.  Further,
we cannot  assure you that any such selling  security  holder will not transfer,
devise or gift the  debentures and the common stock by other means not described
in this prospectus.  In addition, any debentures or common stock covered by this
prospectus  that  qualify  for sale  pursuant  to Rule  144 or Rule  144A of the
Securities Act of 1933 may be sold under Rule 144 or Rule 144A rather than under
this prospectus.  The debentures and the common stock may be sold in some states
only through  registered or licensed  brokers or dealers.  In addition,  in some
states the  debentures  and common  stock may not be sold  unless they have been
registered  or  qualified  for  sale  or  an  exemption  from   registration  or
qualification is available and complied with.

     The selling security holders and any other person participating in the sale
of debentures or the common stock will be subject to the Securities Exchange Act
of 1934. The Securities Exchange Act of 1934 rules include,  without limitation,
Regulation  M, which may limit the timing of  purchases  and sales of any of the
debentures  and the common stock by the selling  security  holders and any other
such person.  In  addition,  Regulation M may restrict the ability of any person
engaged in the  distribution of the debentures and the common stock to engage in
market-making  activities  with  respect to the  particular  debentures  and the
common  stock  being  distributed.  This may  affect  the  marketability  of the
debentures  and the  common  stock and the  ability  of any  person or entity to
engage in market-making activities with respect to the debentures and the common
stock.





     We have agreed to indemnify the selling  security  holders  against certain
liabilities, including liabilities under the Securities Act of 1933.

     We have agreed to pay substantially  all of the expenses  incidental to the
registration, offering and sale of the debentures and common stock to the public
other than commissions, fees and discounts of underwriters, brokers, dealers and
agents.


                             VALIDITY OF SECURITIES

     The  validity  of  the  debentures  and  the  common  stock  issuable  upon
conversion  thereof will be passed upon for us by Sonnenschein  Nath & Rosenthal
LLP, Kansas City, Missouri.

                                     EXPERTS

     The consolidated  financial  statements  incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31, 2002
have been so  incorporated  in reliance on the report of  PricewaterhouseCoopers
LLP, independent accountants,  given on the authority of said firm as experts in
auditing and accounting.

     The combined financial statements of OMS incorporated in this prospectus by
reference to the definitive  special  meeting proxy statement filed November 13,
2003 for the year ended December 31, 2002 have been so  incorporated in reliance
on the report of PricewaterhouseCoopers  LLP, independent accountants,  given on
the authority of said firm as experts in auditing and accounting.





                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

     The  following  table sets forth the expenses  payable by DST in connection
with the offering described in this Registration Statement.  All of the expenses
are estimated, except for the SEC registration fee.

           SEC registration fee                              $         67,956
           Printing expense                                            60,000
           Accounting fees and expenses                                50,000
           Legal fees and expenses                                    100,000
           Trustee fees and expenses                                   25,000
           Miscellaneous                                               47,044
                                                             -------------------

                 Total                                       $        350,000
                                                             ===================




ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

     DST is incorporated under the laws of the State of Delaware. Section 145 of
the General  Corporation  Law of the State of Delaware (the "Delaware  Statute")
provides that a Delaware  corporation  may indemnify any persons who are, or are
threatened to be made,  parties to any threatened,  pending or completed action,
suit or proceeding, whether civil, criminal,  administrative or investigative (a
"proceeding"),  other than an action by or in the right of such corporation,  by
reason of the fact that such person is or was an officer, director,  employee or
agent  of  such  corporation,  or is or was  serving  at  the  request  of  such
corporation as a director,  officer, employee or agent of another corporation or
enterprise  (an  "indemnified  capacity").  The indemnity may include  expenses,
including  attorneys'  fees,  judgments,  fines and amounts  paid in  settlement
actually and reasonably  incurred by such person in connection with such action,
suit or proceeding,  provided such person acted in good faith and in a manner he
reasonably  believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding,  had no reasonable cause
to believe that his conduct was  illegal.  Similar  provisions  apply to actions
brought by or in the right of the  corporation,  except that no  indemnification
shall be made without  judicial  approval if the officer or director is adjudged
to be liable to the  corporation.  Where an officer or director is successful on
the merits or  otherwise  in the defense of any action  referred  to above,  the
corporation  must  indemnify  him against  the  expenses  which such  officer or
director  has  actually  and  reasonably  incurred.  Section 145 of the Delaware
Statute further  authorizes a corporation to purchase and maintain  insurance on
behalf of any indemnified  person against any liability asserted against him and
incurred  by him in any  indemnified  capacity,  or arising out of his status as
such,  regardless of whether the  corporation  would otherwise have the power to
indemnify him under the Delaware Statute.

     Section 102(b)(7) of the DGCL provides,  generally, that the certificate of
incorporation  may contain a provision  eliminating  or  limiting  the  personal
liability  of a director to the  corporation  or its  stockholders  for monetary
damages for breach of fiduciary duty as a director, provided that such provision
may not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions  not in good faith or which  involve  intentional  misconduct  or a
knowing  violation of law,  (iii) under  section 174 of Title 8 of the DGCL,  or
(iv) for any transaction  from which the director  derived an improper  personal
benefit.  No such  provision  may eliminate or limit the liability of a director
for any act or omission  occurring prior to the date when such provision becomes
effective.





     DST's  Certificate of  Incorporation,  as amended (the "DST  Certificate of
Incorporation")  provides that the directors and officers of DST, or persons who
are or were  serving at the request of DST as  directors  or officers of another
corporation,  partnership,  joint venture, trust or other enterprise,  including
service with respect to an employee benefit plan, (collectively,  "indemnitees")
shall be indemnified to the maximum extent permitted by law against all expense,
liability and loss reasonably  incurred by such individuals in defending a civil
or criminal action, suit or proceeding,  whether the basis of such proceeding is
alleged action in an official  capacity as a director or officer or in any other
capacity while serving as a director or officer,  brought  against such officers
and directors in any such capacities.  The right to indemnification includes the
right to have DST pay the expenses in advance of the final  disposition  of such
action, suit or proceeding. As to directors and officers, the DST Certificate of
Incorporation  requires  receipt by DST of an undertaking by or on behalf of the
director or officer to repay such amount if it is ultimately determined that the
director or officer is not entitled to be  indemnified  by DST as  authorized by
the DGCL.  Except as  discussed  below with  respect to  proceedings  to enforce
rights to indemnification,  DST will indemnify any such indemnitee in connection
with a  proceeding  initiated by such  indemnitee  only if such  proceeding  was
authorized by the DST Board of Directors.

     If a claim for indemnification,  or advancement of expenses, is not paid in
full  by DST  within  the  time  periods  specified  in the DST  Certificate  of
Incorporation,  the  indemnitee may bring suit against DST to recover the unpaid
amount of the claim.  If the indemnitee is successful in whole or in part in any
such suit,  or in a suit  brought by DST to recover an  advancement  of expenses
pursuant to the terms of an undertaking, the indemnitee will also be entitled to
be paid the expenses of  prosecuting  or defending such suit. In any suit by DST
to recover an advancement of expenses  pursuant to the terms of an  undertaking,
DST is entitled to recover  such  expenses  upon a final  adjudication  that the
indemnitee has not met any applicable  standard for indemnification set forth in
the  DGCL.  In any  suit  brought  by the  indemnitee  to  enforce  a  right  to
indemnification  or to an  advancement  of  expenses,  or by DST to  recover  an
advancement of expenses  pursuant to the terms of an undertaking,  the burden of
proving  that the  indemnitee  is not  entitled  to be  indemnified,  or to such
advancement of expenses,  under the DST Certificate of Incorporation  will be on
DST.

     The foregoing right of  indemnification  and advancement of expenses is not
exclusive of any other rights of indemnification  and advancement of expenses to
which  any  such  individual  may be  entitled  by  by-law,  agreement,  vote of
stockholders or disinterested directors or otherwise.

     DST's Certificate of Incorporation provides that a director of DST will not
be personally  liable to DST or its stockholders for monetary damages for breach
of fiduciary  duty as a director,  except for the  prohibition on elimination or
limitation set forth in Section  102(b)(7) of the DGCL.  The DST  Certificate of
Incorporation  further provides that if the DGCL is amended to further eliminate
or limit the  personal  liability  of  directors,  then the  liability  of a DST
director will be eliminated  or limited to the fullest  extent  permitted by the
DGCL as so amended.

     DST's  Amended and  Restated  Bylaws  provides  that  directors,  officers,
employees or agents shall be indemnified only as provided in the DST Certificate
of Incorporation.

ITEM 16. EXHIBITS

     EXHIBIT
      NUMBER                                                     EXHIBIT

     4.1       The Registration Rights Agreement dated October 24, 1995, between
               Kansas  City  Southern  ("KCS";  formerly  Kansas  City  Southern
               Industries,  Inc.) and DST ("KCS Registration Rights Agreement"),
               which is attached as Exhibit 4.1 to DST's Registration  Statement
               on Form S-1 filed on September 1, 1995, as amended  (Registration
               No.  33-96526)  (the  "IPO  Registration  Statement")  is  hereby
               incorporated by reference as Exhibit 4.1.

     4.1.1     The First Amendment  dated June 30, 1999 to the KCS  Registration
               Rights  Agreement,  which amendment is attached as Exhibit 4.15.1
               to  DST's  Form  10-Q  for  the  quarter   ended  June  30,  1999
               (Commission  File  No.  1-14036),   is  hereby   incorporated  by
               reference as Exhibit 4.1.1.

     4.1.2     The  Assignment,  Consent and  Acceptance  dated  August 11, 1999
               pertaining  to the KCS  Registration  Rights  Agreement and among
               DST, KCS and Stilwell  Financial,  Inc.  (now Janus Capital Group
               Inc.), which is attached as Exhibit 4.15.2 to DST's Form 10-Q for
               the quarter ended June 30, 1999 (Commission File No. 1-14036), is
               hereby incorporated by reference as Exhibit 4.1.2.

     4.2       The   Certificate  of   Designations   dated  October  16,  1995,
               establishing  the  Series  A  Preferred  Stock  of DST,  which is
               attached as Exhibit 4.3 to DST's IPO Registration  Statement,  is
               hereby incorporated by reference as Exhibit 4.2.

     4.3       The summary of the preferred  stock purchase  rights set forth in
               DST's Registration  Statement on Form 8-A dated November 15, 1995
               in connection  with the listing of the preferred  stock  purchase
               rights  on  the  New  York  Stock   Exchange   (the  "Form  8-A")
               (Commission File No.  1-14036),  and the related Rights Agreement
               dated as of October 6, 1995,  between  DST and State  Street Bank
               and Trust Company, as rights agent ("Rights Agreement"), which is
               attached as Exhibit 4.4 to DST's IPO Registration Statement,  are
               hereby incorporated by reference as Exhibit 4.3.

     4.3.1     The  First  Amendment  dated  as of  July 9,  1998 to the  Rights
               Agreement,  which  amendment  is  attached  as Exhibit 99 to Form
               8-A12B/A,  Amendment No. 1, dated July 30, 1998  (Commission File
               No.  1-14036),  to  the  Form  8-A,  is  hereby  incorporated  by
               reference as Exhibit 4.3.1.

     4.3.2     The Second Amendment dated as of September 10, 1999 to the Rights
               Agreement,  which  amendment  is  attached  as Exhibit 99 to Form
               8-A12B/A,  Amendment No. 2, dated September 27, 1999  (Commission
               File No.  1-14036),  to the Form 8-A, is hereby  incorporated  by
               reference as Exhibit 4.3.2.

     4.3.3     The Third  Amendment dated as of September 25, 2001 to the Rights
               Agreement,  which  amendment  is  attached  as Exhibit 99 to Form
               8-A12B/A,  Amendment No. 3, dated  November 26, 2001  (Commission
               File No.  1-14036),  to the Form 8-A, is hereby  incorporated  by
               reference as Exhibit 4.3.3.

     4.3.4     The  Assignment,  Acceptance  and Consent dated as of November 7,
               2001 and among DST,  State  Street  Bank and Trust  Company,  and
               EquiServe  Trust  Company,  N.A.,  and  pertaining  to the Rights
               Agreement,  which is  attached as Exhibit  4.3.4 to DST's  Annual
               Report  on Form  10-K  for  the  year  ended  December  31,  2001
               (Commission  File  No.  1-14036),   is  hereby   incorporated  by
               reference as Exhibit 4.3.4.

     4.4       The Registration Rights Agreement dated October 31, 1995, between
               DST and UMB Bank,  N.A.  ("UMB") as trustee of The Employee Stock
               Ownership Plan of DST Systems, Inc., which is attached as Exhibit
               4.4 to DST's  Annual  Report  on Form  10-K  for the  year  ended
               December  31,  1995  (Commission  File No.  1-14036),  is  hereby
               incorporated by reference as Exhibit 4.4.

     4.5       The description of DST's common stock, par value $0.01 per share,
               set  forth  in DST's  Registration  Statement  on Form 8-A  dated
               October 30, 1995  (Commission  File No.  1-14036),  as amended by
               Amendment No. 1 on Form 8-A12B/A dated March 14, 2003 (Commission
               File No. 1-14036), is hereby incorporated by reference as Exhibit
               4.5.

     4.6       Paragraphs fourth, fifth, sixth, seventh,  tenth,  eleventh,  and
               twelfth of DST's Amended Delaware  Certificate of  Incorporation,
               as  restated,  which  is  attached  as  Exhibit  3.1 to  the  IPO
               Registration  Statement,  as  amended  by  DST's  Certificate  of
               Amendment of Certificate of Incorporation dated May 9, 2000 which
               is  attached  as Exhibit  3.1 to DST's Form 10-Q for the  quarter
               ended March 31, 2000 (Commission  File No.  1-14036),  are hereby
               incorporated by reference as Exhibit 4.6.

     4.7       Article  I,  Sections  1, 2, 3 and 11 of Article  II,  Article V,
               Article VIII, Article IX of DST's Amended and Restated By-laws as
               amended  and  restated  on May 13,  2003,  which is  attached  as
               Exhibit  3.2 to DST's Form 10-Q for the  quarter  ended March 31,
               2003 (Commission File No.  1-14036),  are hereby  incorporated by
               reference as Exhibit 4.7.

     4.8       The Affiliate  Agreement with James C. Castle,  dated October 28,
               1998, which is attached as Exhibit 4.10 to DST's Annual Report on
               Form 10-K for the year ended December 31, 1998  (Commission  File
               No. 1-14036), is hereby incorporated by reference as Exhibit 4.8.

     4.9       The  Indenture,  dated as of August  12,  2003,  between  DST and
               JPMorgan Chase Bank, as Trustee,  under which the debentures were
               issued,  which is attached as Exhibit 4.1 to DST's Form 8-K filed
               on August  13,  2003  (Commission  File No.  1-14036),  is hereby
               incorporated by reference as Exhibit 4.9.

     4.10      The Registration  Rights Agreement,  dated as of August 12, 2003,
               between DST and Citigroup Global Markets Inc. and Banc of America
               Securities  LLC,  as   representatives  of  the  several  initial
               purchasers  in  connection  with  the  private  offering  of  the
               debentures,  which is  attached  as Exhibit 4.5 to DST's Form 8-K
               filed on August 13, 2003 (Commission File No. 1-14036), is hereby
               incorporated by reference as Exhibit 4.10.

     4.11      The  global  securities  for DST's  4.125%  Series A  Convertible
               Senior  Debentures  due 2023 in the amounts of  $500,000,000  and
               $40,000,000, respectively, which are attached as Exhibits 4.2 and
               4.3,  respectively,  to DST's Form 8-K filed on August  13,  2003
               (Commission  File  No.  1-14036),   are  hereby  incorporated  by
               reference as Exhibit 4.11.

     4.12      The global security for DST's 3.625% Series B Convertible  Senior
               Debentures  due  2023 in the  amount  of  $300,000,000,  which is
               attached  as  Exhibit  4.4 to DST's  Form 8-K filed on August 13,
               2003  (Commission File No.  1-14036),  is hereby  incorporated by
               reference as Exhibit 4.12.

     5.1*      Opinion of Sonnenschein Nath & Rosenthal LLP.

     8.1*      Opinion of  Sonnenschein  Nath &  Rosenthal  LLP  relating to tax
               matters.

    12.1       Computation of ratio of earnings to fixed charges.

    23.1       Consent of PricewaterhouseCoopers LLP.

    23.2*      Consent  of  Sonnenschein  Nath &  Rosenthal  LLP  (contained  in
               Exhibits 5.1 and 8.1).

    24.1*      Power  of  Attorney  (included  on  the  signature  page  of  the
               Registration Statement).

    25.1*      Statement  of  Eligibility  and  Qualification  under  the  Trust
               Indenture  Act of 1939,  as amended,  of JPMorgan  Chase Bank, as
               trustee under the Indenture on Form T-1.

* Previously filed

ITEM 17. UNDERTAKINGS

     The undersigned registrant hereby undertakes:

     (1) To file,  during any period in which  offers or sales are being made, a
post-effective amendment to this registration statement:

          (i) To include  any  prospectus  required  by Section  10(a)(3) of the
     Securities Act of 1933;

          (ii) To reflect in the  prospectus  any facts or events  arising after
     the  effective  date of the  registration  statement  (or the  most  recent
     post-effective amendment thereof) which,  individually or in the aggregate,
     represent  a  fundamental  change  in  the  information  set  forth  in the
     registration  statement.  Notwithstanding  the  foregoing,  any increase or
     decrease  in volume of  securities  offered (if the total  dollar  value of
     securities  offered  would not exceed  that which was  registered)  and any
     deviation from the low or high end of the estimated  maximum offering range
     may be  reflected  in the form of  prospectus  filed  with  the  Commission
     pursuant  to Rule  424(b) if, in the  aggregate,  the changes in volume and
     price  represent no more than a 20 percent change in the maximum  aggregate
     offering price set forth in the "Calculation of Registration  Fee" table in
     the effective registration statement;

          (iii) To include any material  information with respect to the plan of
     distribution not previously disclosed in the registration  statement or any
     material change to such information in the registration statement;

PROVIDED,  HOWEVER,  that  paragraphs  (1)(i)  and  (1)(ii)  do not apply if the
information  required  to be  included in a  post-effective  amendment  by those
paragraphs  is  contained  in periodic  reports  filed with or  furnished to the
Commission by the  registrant  pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are  incorporated  by  reference  in the  registration
statement.

     (2)  That,  for  the  purposes  of  determining  any  liability  under  the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such  securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.

     (3) To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

     (4) That,  for purposes of determining  any liability  under the Securities
Act of 1933, each filing of the  registrant's  annual report pursuant to Section
13(a) or 15(d) of the Securities  Exchange Act of 1934 (and,  where  applicable,
each filing of an employee  benefit  plan's  annual  report  pursuant to Section
15(d) of the Securities  Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.

     (5) That,  for purposes of determining  any liability  under the Securities
Act of 1933, the information  omitted from the form of prospectus  filed as part
of this  registration  statement in reliance  upon Rule 430A and  contained in a
form of prospectus filed by the registrant  pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this  registration
statement as of the time it was declared effective.

     (6) That, for the purpose of determining any liability under the Securities
Act of 1933,  each  post-effective  amendment that contains a form of prospectus
shall be deemed to be a new  registration





statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  BONA FIDE  offering
thereof.


     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and controlling  persons of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.





                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for filing on Form S-3 and has duly caused this Amendment No. 1 to
the  registration  statement  to be  signed on its  behalf  by the  undersigned,
thereunto duly  authorized,  in the city of Kansas City,  state of Missouri,  on
January 23, 2004.

                            DST SYSTEMS, INC.



                            By:  /S/ Kenneth V. Hager
                                 -----------------------------------------------
                                 Kenneth V. Hager
                                 Vice President, Chief Financial Officer and
                                        Treasurer


     Pursuant to the  requirements of the Securities Act of 1933, this Amendment
No. 1 to the registration  statement has been signed by the following persons in
the capacities indicated on January 23, 2004.




                                         
                   SIGNATURE                                                         TITLE
----------------------------------------    -----------------------------------------------------------------------------

Thomas A. McDonnell*                        President, Chief Executive Officer and Director
----------------------------------------                   (Principal Executive Officer)
Thomas A. McDonnell

Thomas A. McCullough*                       Executive Vice President, Chief Operating Officer and Director
----------------------------------------
Thomas A. McCullough

/s/ Kenneth V. Hager                        Vice President, Chief Financial Officer and Treasurer
----------------------------------------                   (Principal Financial Officer)
Kenneth V. Hager

Gregg Wm. Givens*                           Vice President and Chief Accounting Officer
----------------------------------------                   (Principal Accounting Officer)
Gregg Wm. Givens

A. Edward Allinson*                         Director
----------------------------------------
A. Edward Allinson

Michael G. Fitt*                            Director
----------------------------------------
Michael G. Fitt

William C. Nelson*                          Director
----------------------------------------
William C. Nelson

Travis E. Reed*                             Director
----------------------------------------
Travis E. Reed

M. Jeannine Strandjord*                     Director
----------------------------------------
M. Jeannine Strandjord

*By:  /S/ Kenneth V. Hager
      --------------------
      Kenneth V. Hager
      Attorney-in-fact







                                INDEX TO EXHIBITS

     EXHIBIT
      NUMBER                                                     EXHIBIT

     4.1       The Registration Rights Agreement dated October 24, 1995, between
               Kansas  City  Southern  ("KCS";  formerly  Kansas  City  Southern
               Industries,  Inc.) and DST ("KCS Registration Rights Agreement"),
               which is attached as Exhibit 4.1 to DST's Registration  Statement
               on Form S-1 filed on September 1, 1995, as amended  (Registration
               No.  33-96526)  (the  "IPO  Registration  Statement")  is  hereby
               incorporated by reference as Exhibit 4.1.

     4.1.1     The First Amendment  dated June 30, 1999 to the KCS  Registration
               Rights  Agreement,  which amendment is attached as Exhibit 4.15.1
               to  DST's  Form  10-Q  for  the  quarter   ended  June  30,  1999
               (Commission  File  No.  1-14036),   is  hereby   incorporated  by
               reference as Exhibit 4.1.1.

     4.1.2     The  Assignment,  Consent and  Acceptance  dated  August 11, 1999
               pertaining  to the KCS  Registration  Rights  Agreement and among
               DST, KCS and Stilwell  Financial,  Inc.  (now Janus Capital Group
               Inc.), which is attached as Exhibit 4.15.2 to DST's Form 10-Q for
               the quarter ended June 30, 1999 (Commission File No. 1-14036), is
               hereby incorporated by reference as Exhibit 4.1.2.

     4.2       The   Certificate  of   Designations   dated  October  16,  1995,
               establishing  the  Series  A  Preferred  Stock  of DST,  which is
               attached as Exhibit 4.3 to DST's IPO Registration  Statement,  is
               hereby incorporated by reference as Exhibit 4.2.

     4.3       The summary of the preferred  stock purchase  rights set forth in
               DST's Registration  Statement on Form 8-A dated November 15, 1995
               in connection  with the listing of the preferred  stock  purchase
               rights  on  the  New  York  Stock   Exchange   (the  "Form  8-A")
               (Commission File No.  1-14036),  and the related Rights Agreement
               dated as of October 6, 1995,  between  DST and State  Street Bank
               and Trust Company, as rights agent ("Rights Agreement"), which is
               attached as Exhibit 4.4 to DST's IPO Registration Statement,  are
               hereby incorporated by reference as Exhibit 4.3.

     4.3.1     The  First  Amendment  dated  as of  July 9,  1998 to the  Rights
               Agreement,  which  amendment  is  attached  as Exhibit 99 to Form
               8-A12B/A,  Amendment No. 1, dated July 30, 1998  (Commission File
               No.  1-14036),  to  the  Form  8-A,  is  hereby  incorporated  by
               reference as Exhibit 4.3.1.

     4.3.2     The Second Amendment dated as of September 10, 1999 to the Rights
               Agreement,  which  amendment  is  attached  as Exhibit 99 to Form
               8-A12B/A,  Amendment No. 2, dated September 27, 1999  (Commission
               File No.  1-14036),  to the Form 8-A, is hereby  incorporated  by
               reference as Exhibit 4.3.2.

     4.3.3     The Third  Amendment dated as of September 25, 2001 to the Rights
               Agreement,  which  amendment  is  attached  as Exhibit 99 to Form
               8-A12B/A,  Amendment No. 3, dated  November 26, 2001  (Commission
               File No.  1-14036),  to the Form 8-A, is hereby  incorporated  by
               reference as Exhibit 4.3.3.

     4.3.4     The  Assignment,  Acceptance  and Consent dated as of November 7,
               2001 and among DST,  State  Street  Bank and Trust  Company,  and
               EquiServe  Trust  Company,  N.A.,  and  pertaining  to the Rights
               Agreement,  which is  attached as Exhibit  4.3.4 to DST's  Annual
               Report  on Form  10-K  for  the  year  ended  December  31,  2001
               (Commission  File  No.  1-14036),   is  hereby   incorporated  by
               reference as Exhibit 4.3.4.

     4.4       The Registration Rights Agreement dated October 31, 1995, between
               DST and UMB Bank,  N.A.  ("UMB") as trustee of The Employee Stock
               Ownership Plan of DST Systems, Inc., which is attached as Exhibit
               4.4 to DST's  Annual  Report  on Form  10-K  for the  year  ended
               December  31,  1995  (Commission  File No.  1-14036),  is  hereby
               incorporated by reference as Exhibit 4.4.

     4.5       The description of DST's common stock, par value $0.01 per share,
               set  forth  in DST's  Registration  Statement  on Form 8-A  dated
               October 30, 1995  (Commission  File No.  1-14036),  as amended by
               Amendment No. 1 on Form 8-A12B/A dated March 14, 2003 (Commission
               File No. 1-14036), is hereby incorporated by reference as Exhibit
               4.5.

     4.6       Paragraphs fourth, fifth, sixth, seventh,  tenth,  eleventh,  and
               twelfth of DST's Amended Delaware  Certificate of  Incorporation,
               as  restated,  which  is  attached  as  Exhibit  3.1 to  the  IPO
               Registration  Statement,  as  amended  by  DST's  Certificate  of
               Amendment of Certificate of Incorporation dated May 9, 2000 which
               is  attached  as Exhibit  3.1 to DST's Form 10-Q for the  quarter
               ended March 31, 2000 (Commission  File No.  1-14036),  are hereby
               incorporated by reference as Exhibit 4.6.

     4.7       Article  I,  Sections  1, 2, 3 and 11 of Article  II,  Article V,
               Article VIII, Article IX of DST's Amended and Restated By-laws as
               amended  and  restated  on May 13,  2003,  which is  attached  as
               Exhibit  3.2 to DST's Form 10-Q for the  quarter  ended March 31,
               2003 (Commission File No.  1-14036),  are hereby  incorporated by
               reference as Exhibit 4.7.

     4.8       The Affiliate  Agreement with James C. Castle,  dated October 28,
               1998, which is attached as Exhibit 4.10 to DST's Annual Report on
               Form 10-K for the year ended December 31, 1998  (Commission  File
               No. 1-14036), is hereby incorporated by reference as Exhibit 4.8.

     4.9       The  Indenture,  dated as of August  12,  2003,  between  DST and
               JPMorgan Chase Bank, as Trustee,  under which the debentures were
               issued,  which is attached as Exhibit 4.1 to DST's Form 8-K filed
               on August  13,  2003  (Commission  File No.  1-14036),  is hereby
               incorporated by reference as Exhibit 4.9.

     4.10      The Registration  Rights Agreement,  dated as of August 12, 2003,
               between DST and Citigroup Global Markets Inc. and Banc of America
               Securities  LLC,  as   representatives  of  the  several  initial
               purchasers  in  connection  with  the  private  offering  of  the
               debentures,  which is  attached  as Exhibit 4.5 to DST's Form 8-K
               filed on August 13, 2003 (Commission File No. 1-14036), is hereby
               incorporated by reference as Exhibit 4.10.

     4.11      The  global  securities  for DST's  4.125%  Series A  Convertible
               Senior  Debentures  due 2023 in the amounts of  $500,000,000  and
               $40,000,000, respectively, which are attached as Exhibits 4.2 and
               4.3,  respectively,  to DST's Form 8-K filed on August  13,  2003
               (Commission  File  No.  1-14036),   are  hereby  incorporated  by
               reference as Exhibit 4.11.

     4.12      The global security for DST's 3.625% Series B Convertible  Senior
               Debentures  due  2023 in the  amount  of  $300,000,000,  which is
               attached  as  Exhibit  4.4 to DST's  Form 8-K filed on August 13,
               2003  (Commission File No.  1-14036),  is hereby  incorporated by
               reference as Exhibit 4.12.

     5.1*      Opinion of Sonnenschein Nath & Rosenthal LLP.

     8.1*      Opinion of  Sonnenschein  Nath &  Rosenthal  LLP  relating to tax
               matters.

    12.1       Computation of ratio of earnings to fixed charges.

    23.1       Consent of PricewaterhouseCoopers LLP.

    23.2*      Consent  of  Sonnenschein  Nath &  Rosenthal  LLP  (contained  in
               Exhibits 5.1 and 8.1).

    24.1*      Power  of  Attorney  (included  on  the  signature  page  of  the
               Registration Statement).

    25.1*      Statement  of  Eligibility  and  Qualification  under  the  Trust
               Indenture  Act of 1939,  as amended,  of JPMorgan  Chase Bank, as
               trustee under the Indenture on Form T-1.

*  Previously filed.