Exhibit 10.1

 

EMPLOYMENT RETENTION AGREEMENT

 

This Employment Retention Agreement (this “Agreement”) is made by and between
Waddell & Reed Financial, Inc. (“Company” or “WDR”) and Michael L. Avery
(“Employee”) (collectively, the “parties”).

 

WHEREAS, the parties to this Agreement recognize that Company and/or a Company
Affiliate, as defined herein, currently employs Employee as its President,
Executive Vice President and Portfolio Manager;

 

WHEREAS, Employee has indicated his intent to retire from employment with
Company and all Company Affiliates;

 

WHEREAS, Employer wishes to retain Employee’s services in various roles,
including as the President of WDR and Executive Vice President and Portfolio
Manager of Waddell & Reed Investment Management Company (“WRIMCO”) and Ivy
Investment Management Company (“IICO”) for a specified period of time and to
employ Employee under the terms and conditions set forth in this Agreement;

 

WHEREAS, Company desires to make payments and offer incentives to Employee that
Employee is not otherwise entitled to receive under Company or Company Affiliate
policy or practice to incent Employee’s retention during the period specified
herein;

 

WHEREAS, Employee is willing to render services to Company pursuant to the terms
and conditions set forth in this Agreement with respect to such employment; and

 

WHEREAS, the parties desire to resolve all claims Employee has, or may have had,
against Company,  Waddell & Reed, Inc., Waddell & Reed Investment Management
Company, Ivy Investment Management Company, and each of these entities’ parent,
subsidiaries, affiliates, and affiliated mutual funds, as well as all of these
entities’ current or former insurers, directors, officers, fiduciaries,
attorneys, employees (in their representative and/or individual capacities),
agents, successors, assigns, employee benefit plans, related corporations, and
any and all other entities affiliated with or related to them (collectively, the
“Company Affiliates”).

 

NOW, THEREFORE, in exchange for the consideration provided by the parties to
this Agreement, Company and Employee hereby agree as follows, subject to this
Agreement becoming effective as provided below:

 

1.                                      Continued Employment. Company agrees to
continue to employ Employee as President of WDR and Executive Vice President and
Portfolio Manager of WRIMCO and IICO from February 1, 2016 until June 30, 2016
(the “Term”) under the terms outlined herein, unless Employee’s employment with
Company is terminated earlier pursuant to the termination provisions of this
Agreement.

 

2.                                      Scope of Engagement. During the Term,
Employee shall be engaged as a full-time employee as the President of WDR and as
the Executive Vice President and Portfolio Manager of WRIMCO and IICO.

 

3.                                      Existing Employment Agreement. With
respect to his employment during the Term as the Executive Vice President and
Portfolio Manager of WRIMCO and IICO, Employee shall continue to operate under
the terms of the March 3, 1998 Amended and Restated Employment Agreement entered
into between Employee and WRIMCO (the “Employment Agreement”), as modified
herein, and which agreement, unless terminated earlier under paragraph 13, shall
terminate by mutual consent effective June

 

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30, 2016.  The parties hereby agree to modify the Employment Agreement to
reflect that termination of Employee’s employment under paragraphs 13(b) or
(c) herein shall operate as an effective and immediate termination of the
Employment Agreement.  Employee’s post termination promises and obligations in
the Employment Agreement shall remain in full force and effect following the
termination of the Employment Agreement.  Notwithstanding the above and anything
to the contrary contained in this Agreement, Company agrees and acknowledges
that post-termination non-competition obligations contained in Section 6(a) of
the Employment Agreement shall be reduced to a six month period to run
concurrent with the six month period immediately following the termination of
the Employment Agreement (the “Non-Compete Period”), and shall be null and void
and not apply to Employee after the close of the Non-Compete Period. All other
restrictive covenants contained in the Employment Agreement, including the
nonsolicitation of business and personnel in paragraphs 6(a) and (b) shall be
unaffected by this modification.

 

4.                                      Confidentiality Agreement Continuation.
With respect to his employment during the Term, Employee shall continue to
operate under the terms of the Confidentiality Agreement Employee entered into
with WDR on March 22, 1998 (the “Confidentiality Agreement”).  Except as
otherwise provided for within this Agreement, Employee’s post termination
promises and obligations in the Confidentiality Agreement shall remain in full
force and effect following his separation from employment with Company and any
Company Affiliate.

 

5.                                      Employment Compensation. During
Employee’s engagement as a full-time employee during the Term, Company shall
cause Employee to be paid, less applicable deductions and withholdings, both a
bi-weekly salary of $26,153.85 and any revenue sharing compensation earned under
applicable Company or Company Affiliate policies, all payable on Company’s
regularly designated payroll schedules.

 

6.                                      Employee Benefits.  Employee shall be
eligible for retirement, welfare and fringe benefits customarily available to
full-time employees at Grade 40, commensurate with his status of full-time
employment during the Term, as outlined under the general policies, plans and/or
practices of Company and Company Affiliates in effect during the Term.

 

7.                                      Reimbursement of Business Expenses.
Subject to such written rules and procedures as Company from time to time
specifies, Company shall cause employee to be reimbursed for reasonable business
expenses necessarily incurred during the Term in the performance of his duties
under this Agreement.

 

8.                                      Separation Pay.  In exchange for
Employee’s agreement to delay his retirement date and remain employed until
June 30, 2016 (the “Retirement Date”) under the terms outlined herein, Company
shall continue Employee’s regular bi-weekly salary of $26,153.85, less
applicable deductions and withholdings (“Separation Pay”), from July 1, 2016
through December 31, 2016 (the “Separation Period”).  Employee shall receive
Separation Pay on regularly designated Company paydays during the Separation
Period.  Separation Pay is not eligible for consideration in connection with any
management bonus or other salary related compensation program and is not
eligible compensation under the Waddell & Reed Financial, Inc. 401(k) and Thrift
Plan or under the Waddell & Reed Financial, Inc. Retirement Income Plan.

 

9.                                      Continued Subsidized Group Coverage. In
exchange for Employee’s agreement to delay his retirement date and remain
employed until June 30, 2016 under the terms outlined herein, during the
Separation Period, Employee shall be eligible to continue subsidized
participation in the Company’s group health, dental and vision plans at the
subsidy level in effect as of June 30, 2016.  Following the Separation Period,
Employee shall have the right to continue to participate in these plans on an
unsubsidized basis until he and any applicable dependents each attain Medicare
eligibility.

 

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10.                               Restricted Stock Award Vesting. Where Employee
has fulfilled all Obligations during the Term, as outlined in paragraph 12, and
upon approval by the Waddell & Reed Financial, Inc.  Compensation Committee,
103,332 unvested shares of restricted stock awarded to Employee pursuant to
provisions of the Waddell & Reed Financial, Inc. Restricted Stock Award
Agreements (the “Restricted Stock Agreements”) Employee entered into with
Waddell & Reed Financial, Inc. under the Waddell & Reed Financial, Inc. 1998
Stock Incentive Plan, as amended and restated, (the “Restricted Stock Awards”)
shall be vested and all transfer restrictions thereon shall lapse upon the
Retirement Date (the “Restricted Stock Award Vesting”). Compensation associated
with this vesting shall be treated as ordinary income, subject to applicable
deductions and withholdings, and is not eligible compensation under the
Waddell & Reed Financial, Inc. 401(k) and Thrift Plan or under the Waddell &
Reed Financial, Inc. Retirement Income Plan.

 

11.                               Incentive Payment.  Where Employee has
fulfilled all Obligations during the Term, as outlined in paragraph 12, Employee
shall receive an additional lump sum of Two Million Dollars and No Cents
($2,000,000.00) (the “Lump Sum Payment”), subject to applicable deductions and
withholdings, in exchange for Employee’s execution of an effective separate
Release of Claims agreement following the Retirement Date, substantially in the
form attached hereto as Exhibit A. The Lump Sum Payment shall be paid to
Employee within thirty (30) days of the effective date of the Release of Claims
agreement and will not be eligible compensation under the Waddell & Reed
Financial, Inc. 401(k) and Thrift Plan or under the Waddell & Reed
Financial, Inc. Retirement Income Plan.

 

12.                               Obligations During Term.  In connection with
Employee’s ongoing employment during the Term, as outlined herein, Employee
shall continue to hold the titles of President of WDR and Executive Vice
President and Portfolio Manager of WRIMCO and IICO, and is required to perform
the following obligations to the satisfaction of Company (collectively, the
“Obligations”):

 

(a)                                 Employee shall perform all duties and
responsibilities assigned to him as Executive Vice President and Portfolio
Manager of WRIMCO and IICO as outlined in the Employment Agreement.  Exhibit A
of the Employment Agreement is hereby modified to include only the following
investment vehicles, Ivy Asset Strategy Fund, Waddell & Reed Advisors Asset
Strategy Fund, Ivy Funds VIP Asset Strategy, Ivy Managed International
Opportunities Fund, InvestEd Portfolios, Ivy Funds VIP Pathfinder Portfolios,
and Ivy Funds VIP Pathfinder Managed Volatility Portfolios. In performing these
duties Employee shall report to the Chief Executive Officer of Company.  In
addition, Employee shall perform only those duties as President of Company that
are specifically directed to Employee by Company’s Chief Executive Officer.

 

(b)                                 Employee shall use his best efforts to
complete the duties and responsibilities as referenced herein and agrees to act
in the best interest of Company and Company Affiliates during the Term. 
Employee further agrees to expend all reasonable efforts necessary to accomplish
the assigned duties in a timely manner.  Employee further agrees during the Term
not to be employed by or work in any capacity for any enterprise or business
whose activities are in conflict with Company or any Company Affiliate without
the express written consent of Company.

 

(c)                                  Employee shall comply with all Company and
Company Affiliates’ practices and procedures in providing services during the
Term, including, but not limited to, the Waddell & Reed Financial, Inc.
Corporate Code of Business Conduct and Ethics for Directors and Employees.

 

(d)                                 Employee shall assist in transition of
duties and knowledge Employee has in connection with his positions as President,
Executive Vice President and Portfolio Manager to

 

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                                                designated personnel, as
requested by Company prior to the Retirement Date. In addition, Employee shall
follow the direction of Company’s Chief Executive Officer in assisting Company
and Company Affiliates in the transition of client and any other designated
relationships to personnel specifically designated by Company.

 

(e)                                  Employee shall perform other duties as
assigned by Company’s Chief Executive Officer, consistent with the duties and
responsibilities of Employee’s position as President of Company and Executive
Vice President and Portfolio Manager of WRIMCO and IICO.

 

13.                               Termination of Employment.  Employee’s
employment may be terminated as follows:

 

(a)                                 If not earlier terminated, Employee’s
employment under this Agreement shall automatically end on the Retirement Date,
upon which date Employee shall retire from all positions with Company and any
Company Affiliate.

 

(b)                                 Immediately upon the death or disability of
Employee.  Disability shall mean Employee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than six months. Upon termination of
employment under this subparagraph, Employee and/or Employee’s heirs shall be
entitled to receive, i) any remaining unpaid Separation Pay referenced in
paragraph 8 in a single lump sum, subject to applicable deductions and
withholdings, payable within thirty (30) days of the date of termination of the
Agreement, and ii) the Lump Sum Payment referenced in paragraph 11 contingent
upon Company’s receipt of an effective Release of Claims agreement in the form
referenced in paragraph 11, payable per the terms of the separate agreement. 
Upon termination of employment under this subparagraph, and pursuant to the
terms of the Restricted Stock Agreements, the restrictions and risk of
forfeiture with respect to the Restricted Stock Awards referenced in paragraph
10 shall immediately lapse and all shares of the Restricted Stock Awards shall
be deemed fully vested and nonforfeitable.

 

(c)                                  Company may terminate this Agreement
immediately for “Cause.” For purposes of this Agreement, “Cause” exists when
Employee, in Company’s good faith belief, does any of the following:  (1) is
convicted or pleads guilty or nolo contendere to a criminal act under federal,
state or local law, whether such act would be a felony or a misdemeanor;
(2) materially breaches any provision of this Agreement, including, but not
limited to, by acting materially dishonestly or grossly negligently regarding
his performance hereunder; (3) materially fails to perform his Obligations as
set forth in paragraph 12 herein, other than for reasons related to illness,
injury or disability; (4) violates any applicable local, state or federal law
relating to discrimination or harassment where an independent investigation
concludes that Employee has violated any such applicable laws; (5) materially
violates Company’s written policies and/or practices applicable to Employee,
including, but not limited to, employment policies and practices and the
Waddell & Reed Financial, Inc. Corporate Code of Business Conduct and Ethics for
Directors and Employees; (6) knowingly takes any action,  or fails to act, where
such action/inaction has the effect of undermining or harming Company, its
business, its reputation, or its customers, clients or employees; and/or
(7) materially fails to comply with any oral or written reasonable request or
directive of Company related to Employee’s Obligations under this Agreement, as
set forth in paragraph 12. No Cause shall exist under subsections 2, 3, 4, 5, or
6 above unless Company provides Employee with written notice describing the
particular circumstances giving rise to Cause, and Employee fails to cure the
conduct in question within thirty (30) days following such notice from Company.
In

 

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                                                the event of termination for
Cause, Employee shall not be entitled to receive any remaining unpaid Separation
Pay or receive the benefits referenced in paragraphs 8, 9, 10, and 11 herein.

 

14.                               General Release. In exchange for Company’s
agreement with respect to the Restricted Stock Award Vesting referenced in
paragraph 10 herein, Employee agrees as follows:

 

(a)                                 The Restricted Stock Award Vesting offered
by Company under this Agreement is adequate consideration for Employee’s
execution of this Agreement and the General Release contained herein, and is in
excess of anything to which Employee is or may otherwise be entitled under
existing policies or practices of Company.

 

(b)                                 To the maximum extent permitted by law, and
except as provided in paragraph 24 herein, as of the Effective Date (as defined
herein), Employee hereby RELEASES AND FOREVER DISCHARGES Company, the Company
Affiliates, and all other parties mentioned in the sixth Whereas Clause of this
Agreement (collectively, “Released Parties”), from any and all causes of action,
claims, actions, rights, judgments, obligations, damages, demands, accountings,
or liabilities of any kind or nature (collectively, “Claims”), whether known or
unknown, suspected or unsuspected, that Employee now holds or owns or has at any
time held or owned against the Released Parties through the date Employee
executes this Agreement. Employee acknowledges and agrees that the Claims
released under this Agreement include any and all Claims Employee now holds or
owns or has at any time held or owned against the Released Parties related to
any and all contract or other Claims arising from or related to Employee’s
Employment Agreement, as referenced herein, and any other employment-related
agreements entered into by Employee and any of the Released Parties. Employee
further acknowledges and agrees that this release of Claims specifically
includes, but is not limited to, any and all contract claims; any and all claims
for race, sex, national origin, religious, disability, or age discrimination,
harassment, and/or retaliation under Title VII of the Civil Rights Act of 1964
(as amended), the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Americans with
Disabilities Act (as amended), the Rehabilitation Act, the Genetic Information
Nondiscrimination Act, the Kansas Act Against Discrimination, the Kansas Age
Discrimination in Employment Act, any and all applicable Missouri state civil
rights laws (including, but not limited to, Mo. Rev. Stat. §213.010 et seq.,
§290.145, §191.665, and §375.1306), any unlawful employment practices and
anti-discrimination and anti-harassment laws, and any and all other statutes,
regulations, and/or ordinances that address equal employment opportunity; any
and all other statutory claims, including, but not limited to, claims under the
Family Medical Leave Act, the Occupational Safety and Health Act, the Employment
Retirement Income Security Act (as amended) (“ERISA”), the Consolidated Omnibus
Budget Reconciliation Act, 42 U.S.C. § 1983, 42 U.S.C. § 1988, the Kansas Wage
Payment Act, the Kansas Minimum Wage and Maximum Hours Law, any and all
applicable Missouri state wage payment and conditions of employment law
(including, but not limited to, Mo. Rev. Stat. §290.010 et seq.); any and all
common law claims; any and all whistleblowing claims; any and all tort claims,
including, but not limited to, any and all claims for tortious interference with
business expectancy, outrage, negligent infliction of emotional distress,
defamation, retaliation, and/or wrongful discharge in violation of public
policy; any and all public policy claims; any and all claims under any federal
and/or state Constitution, any and all claims under any federal, state and/or
local common law, and any and all claims under any Company and/or Company
Affiliate policy or practice, including, but not limited to, any claims
regarding bonus, health, stock incentive, retirement, and/or benefit plans of
Company and/or any Company Affiliate.

 

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(c)                                  The foregoing Release does not include any
claims that cannot be released or waived by law, including, but not limited to,
the right to file a charge with or participate in an investigation conducted by
certain government agencies; provided, however, that Employee is releasing and
waiving the right to any monetary recovery should any government agency pursue
any claims on Employee’s behalf.

 

(d)                                 The foregoing Release does not affect the
Employee’s right to enforce the terms of this Agreement. Additionally, the
foregoing Release does not affect Employee’s right to receive any vested
benefits under an employee benefit plan subject to ERISA or to any other vested
benefit Employee may be entitled to receive under any applicable Company or
Company Affiliate benefit plan, including but not limited to the Waddell & Reed
Financial, Inc. 401(k) and Thrift Plan or the Waddell & Reed Financial, Inc.
Retirement Income Plan, although Employee’s eligibility to make contributions to
and/or accrue service and benefit credit under these benefit plans shall cease
as of the Retirement Date.

 

(e)                                  In exchange for and in consideration of the
promises of Company contained in this Agreement, Employee agrees not to initiate
any legal, administrative, or other proceeding relating to any of the matters
released herein, to the fullest extent permitted by law.

 

15.          No Interference. Employee agrees, following the end of his
employment with Company, to take no action to interfere knowingly with Company’s
operation of business or management of personnel, specifically including, but
not limited to, Company’s operation of its Investment Management Division.

 

16.          Post-Employment Cooperation. Upon reasonable request by Company,
Employee will participate in the investigation, prosecution, or defense of any
matter involving Company, any matter involving any of the Company Affiliates, or
any other matter that arose or will arise during Employee’s employment, provided
Company shall reimburse Employee for any reasonable travel and out-of-pocket
expenses incurred in providing such participation at its request, the purpose of
which reimbursement is to avoid cost to Employee and not to influence Employee’s
participation. Company’s request for reasonable cooperation shall take into
consideration Employee’s personal and business commitments and the amount of
notice provided to Employee by Company.

 

17.          Compensation and Benefits Received. Employee expressly agrees that,
except for payments and benefits offered to Employee as provided for in this
Agreement and any vested benefits under an employee benefit plan subject to
ERISA, no additional payments or other consideration are appropriate or due to
Employee for any reason, and that Employee has received all compensation and
leave due and owing to Employee relating to any employment or other relationship
with Company, or any express or implied contract, including without limitation,
all wages, commissions, bonuses, incentive pay, retention bonus, sick pay and
vacation pay, and any form of leave from Company and/or any Company Affiliate in
connection with Employee’s employment up to the Effective Date of this
Agreement.

 

18.          Effective Date.  This Agreement shall be effective and enforceable
as of the date of the last signature reflected below (the “Effective Date”).

 

19.          Advice of Counsel. Company advised/hereby advises Employee to
consult with an attorney before executing this Agreement, particularly regarding
the RELEASE AND WAIVER OF CLAIMS in paragraph 14.

 

20.          Obligation to Protect Confidential Information. Employee
acknowledges that as a result of Employee’s employment relationship with Company
and/or any Company Affiliate, Employee acquired confidential information of a
special and unique nature and value relating to Company and

 

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Company Affiliate matters.  Except as otherwise provided for within this
Agreement, Employee will not remove from Company or any Company Affiliate, or
directly or indirectly communicate, divulge, or use, whether for Employee’s
benefit or for the benefit of any third party, any confidential and/or
proprietary information concerning the Company business and/or the Company
Affiliates’ business, including, but not limited to, any and all proprietary
information, information regarding the nature of Company and Company Affiliates’
investment management systems, proprietary investment management practices,
investment holdings, returns, allocations, private equity investments,
transactions, communications, operating agreements, amendments, consents,
investment strategies and dispositions, location of proprietary electronic data,
strategic plans of Company and any Company Affiliate, passwords, passcodes or
similar mechanisms for gaining access to any computer, computer system, computer
network, computer data, or any other electronic data storage device or any data
contained therein, information regarding Company or Company Affiliates’
personnel matters, information related to any internal investigation or auditing
process, client lists, client account and contact information, proprietary
products, proprietary commission information, proprietary supervisory
information, Company or Company Affiliates’ research, agreements, systems,
procedures, manuals, operations, services, materials, policies, and the manner
in which they are developed, marketed, and/or provided, Company legal matters,
attorney-client privileged information, attorney work product-privileged
information, and any and all such other information regarded as trade secrets
and/or confidential and/or proprietary information by Company, by Company
Affiliates, and/or under any applicable law, regulation, rule, and/or ethical
guideline (collectively, “Confidential Information”). Employee understands that
Confidential Information includes, but is not limited to, trade secrets and
information relating thereto. Employee further acknowledges and agrees that
Confidential Information referenced this paragraph includes Confidential
Information, as defined in the Employment Agreement and the Confidentiality
Agreement referenced herein.  Notwithstanding the above, Confidential
Information shall not include any contact information located in Employee’s
rolodex (whether paper or electronic), which Employee shall be able to
download/transfer after the Retirement Date, and any information that is
generally known in the industry or in the public domain or becomes generally
known in the industry or in the public domain through no wrongful act on
Employee’s part.

 

21.          Unauthorized Access.        Employee agrees that following the end
of his employment under this Agreement, he will no longer be authorized to
access any of Company or Company Affiliates’ systems, including, but not limited
to, Company or Company Affiliates’ computers, systems, applications, servers,
workstations, operating systems, databases, accounting systems, network
infrastructure, software, programs, and any documentation, data or property
contained within or in connection with any network infrastructure or systems
listed herein.  Employee agrees that any unauthorized attempt to access or any
actual access of the network infrastructure, systems or data described herein
following the termination of employment would be damaging to Company and/or
Company Affiliates.

 

22.          Employee Representations.  As of the date Employee signed this
Agreement, and except as otherwise provided for within this Agreement, Employee
(1) has not suffered a work-related injury not properly disclosed to Company;
(2) has not exercised any actual or apparent authority by or on behalf of
Company and/or any Company Affiliates that Employee has not specifically
disclosed to Company; (3) has not entered into any agreements, whether written
or otherwise, with any of Company or Company Affiliates’ employees (current and
former) and/or third parties that could legally bind Company and/or any Company
Affiliate that Employee has not specifically disclosed to Company; (4) is not
aware of any Company or Company Affiliates’ noncompliance with regulatory,
administrative or other legal obligation, including by any Company or Company
Affiliates’ personnel, that has not already been reported; and (5) has not
engaged in any conduct that could be deemed counter to the Waddell & Reed
Financial, Inc. Corporate Code of Business Conduct and Ethics for Directors and
Employees.

 

23.          Non Disparagement. Employee agrees not in any way to disparage
Company, Company Affiliates (as defined herein and specifically including
Company and Company Affiliate employees and

 

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agents in their representative and individual capacities), or any Released
Parties, and agrees not to make or solicit any comments, statements, or the like
to the media or to others, including claims against the entities, their agents,
or representatives that may be considered derogatory or detrimental to the good
name or business reputation of the above-mentioned parties. Likewise, Company
agrees that it shall direct in writing Officers of Company as of the Effective
Date of this Agreement, that while they are employed or affiliated with Company
or Company Affiliates and while they are acting in an official capacity on
behalf of Company or Company Affiliates, they shall not disparage Employee in
any way and not to make or solicit any comments, statements, or like to the
media or to others, that may be considered derogatory or detrimental to
Employee’s good name or reputation. Notwithstanding, Employee and Company
recognize and agree that nothing herein restricts Company’s or Employee’s his
ability to engage in protected activity.

 

24.          References. Company and Employee agree that any inquiries for
employment references on behalf of Employee submitted to the Company’s Human
Resource Department shall be directed to Henry J. Herrmann, who will provide
information consistent with the sum and substance of the press release
announcing Employee’s retirement dated February 2, 2016 (attached in substantive
form and incorporated into this Agreement as Exhibit B). If Mr. Herrmann is no
longer with Company, such employment reference requests will be managed as
outlined herein by the Company’s Vice President of Human Resources.

 

25.          Protected Activity. Nothing in this Agreement is intended to limit,
restrict or interfere with Employee’s right to engage in any protected activity,
including, but not limited to, testifying before, communicating with and/or
participating in any investigation conducted by or proceeding held before any
regulatory agency, including, but not limited to, the U.S. Securities and
Exchange Commission, the Financial Industry Regulatory Authority, Inc., and/or
the Equal Employment Opportunity Commission (and/or similar state or federal
agency), and nothing herein is intended to restrict Employee’s ability to
participate in concerted activity under the National Labor Relations Act.

 

26.          Additional Terms.  The parties further agree as follows:

 

(a)                                 Unless referenced specifically herein, this
Agreement constitutes the entire agreement between Employee and Company with
respect to the matters contemplated hereby and supersedes and is in full
substitution for any and all prior understanding or agreements with respect to
Employee’s employment.  No modification or waiver of any provision of this
Agreement will be valid unless in writing and signed by Employee and Company. 
Further, in entering into this Agreement, they did not rely on any promise or
agreement not included in this Agreement.

 

(b)                                 Nothing herein shall impact Employee,
Company and/or Company Affiliates’ rights under the Indemnification Agreement
entered into between Employee and Waddell & Reed Financial, Inc. as of
November 13, 2009 and any coverage Employee continues to have under Company’s or
Company Affiliates’ Directors and Officers insurance policies.

 

(c)                                  This Agreement is severable. If any
provision of this Agreement is declared unenforceable, void, invalid, or
voidable, then the parties intend that the validity, legality, and
enforceability of the remaining provision of this Agreement shall in no way be
affected or impaired, and the remaining provision of this Agreement shall remain
valid and enforceable as written, to the fullest extent permitted by law.

 

(d)                                 This Agreement shall be construed in
accordance with the laws of the State of Kansas, regardless of any conflict of
laws provision.  Further, any action to interpret or enforce

 

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this Agreement shall be brought in the federal or state courts situated in
Kansas, regardless of the state of residence of any party to such action.

 

(e)                                  In the event either party to this Agreement
breaches its obligations under this Agreement the injured party may pursue all
legal remedies available to it as a result of the breach, including, but not
limited to, an action in a competent court for actual damages for the injury
caused by the breaching party, as well as reasonable attorneys’ fees and costs.

 

(f)                                   The parties expressly agree and understand
that neither the existence of this Agreement nor anything contained in this
Agreement shall constitute an admission of any liability on the part of Company
or any Company Affiliate.  Any and all such liability is expressly denied.
Neither the existence of this Agreement nor anything contained in this Agreement
shall be construed as rendering Employee a “prevailing party” for purposes of
awarding attorneys’ fees or costs under any applicable local, state or federal
law.

 

(g)                                  To the extent applicable, it is intended
that this Agreement comply with the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) to the extent that this Agreement
constitutes a “nonqualified deferred compensation plan” as such term is defined
in Code Section 409A, and this Agreement shall be construed and applied in a
manner consistent with this intent. In this regard, each payment made under this
Agreement shall be treated as a separate payment and the right to a series of
installment payments under this Agreement is to be treated as a right to a
series of separate payments. Any reimbursements under this Agreement that would
constitute nonqualified deferred compensation subject to Section 409A of the
Code shall be subject to the following additional rules: (i) no reimbursement of
any such expense shall affect Employee’s right to reimbursement of any such
expense in any other taxable year; (ii) reimbursement of the expense shall be
made, if at all, promptly but not later than the end of the calendar year
following the calendar year in which the expense was incurred; and (iii) the
right to reimbursement shall not be subject to liquidation or exchange for any
other benefit. The payments and benefits payable to Employee under this
Agreement shall be construed as exempt from Section 409A to the maximum possible
extent. Except as described above, Company makes no representations regarding
the taxation of the payments and benefits provided under this Agreement (and the
manner in which such payments and benefits are reported to Employee or an
appropriate taxing jurisdiction by Company is not intended to be such a
representation) and in no event shall Company or any Company Affiliate be liable
for all or any portion of any taxes, penalties, interest or other expenses that
may be incurred by Employee on account of the payments and benefits provided
under this Agreement (including taxes, penalties, interest or other expenses
resulting from non-compliance with Section 409A of the Internal Revenue Code or
excise taxes imposed by Section 4999 of the Internal Revenue Code).

 

(h)                                 Company’s or Employee’s failure to exercise
any of its rights under this Agreement with regard to a breach of this Agreement
shall not be construed as a waiver of such breach, nor shall it prevent Company
or Employee from later enforcing strict compliance with any and all promises in
this Agreement.

 

(i)                                     This Agreement will be binding on and
inure to the benefit of Employee and Employee’s heirs, administrators,
representatives, executors, successors, and assigns, and will be binding on and
inure to the benefit of Company, Company Affiliates, and those entities’
successors and assigns.

 

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(j)                                    This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which shall constitute together one and the same Agreement.  Any party to
this Agreement may execute this Agreement by signing any such counterpart.

 

(k)                                 The headings in this Agreement are for
convenience and are not intended to affect construction or interpretation.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
indicated below.

 

For Employee:

 

BY SIGNING BELOW, I SPECIFICALLY AGREE THAT I HAVE READ THE FOREGOING EMPLOYMENT
RETENTION AGREEMENT, THAT I RECOGNIZE IT CONTAINS A GENERAL RELEASE, THAT I
FULLY UNDERSTAND EACH AND EVERY PROVISION OF THIS AGREEMENT, THAT I HAVE HAD AN
OPPORTUNITY TO CONSULT WITH AN ATTORNEY ABOUT THIS AGREEMENT, AND THAT I AM
VOLUNTARILY, FREELY AND KNOWINGLY EXECUTING IT.

 

 

Date:

2/1/16

 

/s/ Michael L. Avery

 

 

 

Michael L. Avery

 

 

For Company:

 

 

Date:

2/1/16

 

/s/ Henry J. Herrmann

 

Waddell & Reed Financial, Inc.

 

 

For Waddell & Reed Investment Management Company

with respect to Paragraph 3:

 

 

Date:

2/1/16

 

/s/ Henry J. Herrmann

 

Waddell & Reed Investment Management Company

 

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EXHIBIT A TO EMPLOYMENT RETENTION AGREEMENT

 

FORM OF — RELEASE OF ALL CLAIMS

 

This Release of All Claims (“Agreement”) is made by and between Waddell & Reed
Financial, Inc. (“Company”) and Michael L. Avery (“Employee”) (collectively, the
“parties”).

 

WHEREAS, the parties to this Agreement recognize that Company and/or a Company
Affiliate, as defined herein, has employed Employee in various positions; that
Employee has elected to retire from his employment with Company and all Company
Affiliates; that Employee, on the one hand, and Company and all Company
Affiliates on the other, hereby mutually agree to end employment of Employee by
this written Agreement and wish to end all employment and other relationships in
an amicable and cooperative manner; that Employee agreed to enter into this
Agreement in exchange for good and valuable consideration that is in addition to
any benefits Employee may otherwise be entitled to receive by operation of law
or by Company or Company Affiliate policy or practice; that Company has agreed
to enter into this Agreement in exchange for certain releases and promises of
Employee; and that the parties desire through this Agreement to resolve any and
all claims, demands, or causes of action (“claims”) Employee has, or may have,
against Company and any Company Affiliates.

 

NOW, THEREFORE, in consideration of the mutual promises, agreements, and
releases contained in this Agreement, Employee and Company agree to resolve all
issues and controversies that exist between them, including any future effects
of the alleged acts, omissions, and events, as follows:

 

1.              The parties desire to resolve all claims Employee has, or may
have had, against Company,  Waddell & Reed, Inc., Waddell & Reed Investment
Management Company, Ivy Investment Management Company, and each of these
entities’ parent, subsidiaries, affiliates, and affiliated mutual funds, as well
as all of these entities’ current or former insurers, directors, officers,
fiduciaries, attorneys, employees (in their representative and/or individual
capacities), agents, successors, assigns, employee benefit plans, related
corporations, and any and all other entities affiliated with or related to them
(collectively, the “Company Affiliates”).

 

2.              In consideration of the release referenced in Paragraph 3 of
this Agreement, and all other promises made by Employee within this Agreement,
Company agrees as follows, subject to the other terms of this Agreement,
including but not limited to this Agreement becoming effective as provided
below:

 

(a)                                 Employee’s employment and all associations
with Company and Company Affiliates ended               , 2016 (“Termination
Date”).  Employee has no power or authority to act on behalf of Company or any
Company Affiliate following the Termination Date.

 

(b)                                 If this Agreement is not revoked and becomes
effective, Company shall pay to Employee, within thirty (30) days of the
Effective Date, as defined herein, the gross amount of Two Million Dollars and
No Cents ($2,000,000.00) (the “Lump Sum Payment”), subject to applicable
deductions and withholdings. The Lump Sum Payment is not eligible compensation
under the Waddell & Reed Financial, Inc. 401(k) and Thrift Plan or under the
Waddell & Reed Financial, Inc. Retirement Income Plan.

 

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(c)                                  In connection with Employee’s separation
from Company and all Company Affiliates, and following the Separation Period
referenced in the Employment Retention Agreement entered into between the
parties, effective                 (the “Retention Agreement”), Employee and any
eligible dependents may elect to continue to participate in the Company and/or
Company Affiliates’ group health, dental and vision plans on an unsubsidized
basis until he and any applicable dependents each attain Medicare eligibility.

 

(d)                                 Unless specified otherwise in this
Agreement, or as provided for in the Retention Agreement, nothing in this
Agreement shall interfere with Employee’s ability to receive all compensation
earned as of the Termination Date pursuant to Company or Company Affiliates’
revenue sharing compensation plans in accordance with the relevant plan
documents or to receive benefits provided for under the terms of the Waddell &
Reed Financial, Inc. 401(k) and Thrift Plan or the Waddell & Reed
Financial, Inc. Retirement Income Plan, although Employee’s eligibility to make
contributions to and/or accrue service and benefit credit under these benefit
plans shall cease as of the Termination Date.

 

(e)                                  Unless specified otherwise herein, or as
provided for in the Retention Agreement, Employee’s ability to receive and/or
participate in any Company or Company Affiliate provided compensation or benefit
plan ceases as of the Termination Date.

 

3.                                      In connection with consideration
provided by Company under this Agreement, Employee agrees as follows:

 

(a)                                 The benefits provided by Company under this
Agreement are adequate consideration for Employee’s execution of this Agreement
and are in excess of anything to which Employee is or may otherwise be entitled
under existing policies or practices of Company and/or any Company Affiliate.

 

(b)                                 To the maximum extent permitted by law, and
except as provided in Paragraph 4 herein, as of the Effective Date, Employee
hereby RELEASES AND FOREVER DISCHARGES Company, the Company Affiliates, and all
other parties mentioned in Paragraph 1 of this Agreement (collectively,
“Released Parties”), from any and all causes of action, claims, actions, rights,
judgments, obligations, damages, demands, accountings, or liabilities of any
kind or nature (collectively, “Claims”), whether known or unknown, suspected or
unsuspected, that Employee now holds or owns or has at any time held or owned
against the Released Parties through the date Employee executes this Agreement.
Employee acknowledges and agrees that the Claims released under this Agreement
include any and all Claims Employee now holds or owns or has at any time held or
owned against the Released Parties related to any and all contract or other
Claims arising from or related to Employee’s Employment Agreement, as referenced
herein, and any other employment-related agreements entered into by Employee and
any of the Released Parties. Employee further acknowledges and agrees that this
release of Claims specifically includes, but is not limited to, any and all
contract claims; any and all claims for race, sex, national origin, religious,
disability, or age discrimination, harassment, and/or retaliation under Title
VII of the Civil Rights Act of 1964 (as amended), the Civil Rights Act of 1991,
42 U.S.C. § 1981, the Age Discrimination in Employment Act (“ADEA”), the
Americans with Disabilities Act (as amended), the Rehabilitation Act, the
Genetic Information Nondiscrimination Act, the Kansas Act Against
Discrimination, the Kansas Age Discrimination in Employment Act, any and all
applicable Missouri state civil rights laws (including but not limited to Mo.
Rev. Stat. §213.010 et seq., §290.145,

 

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                                                §191.665, and §375.1306), any
unlawful employment practices and anti-discrimination and anti-harassment laws,
and any and all other statutes, regulations, and/or ordinances that address
equal employment opportunity; any and all other statutory claims, including but
not limited to claims under the Family Medical Leave Act, the Occupational
Safety and Health Act, the Employment Retirement Income Security Act (as
amended) (“ERISA”), the Consolidated Omnibus Budget Reconciliation Act, 42
U.S.C. § 1983, 42 U.S.C. § 1988, the Kansas Wage Payment Act, the Kansas Minimum
Wage and Maximum Hours Law, any and all applicable Missouri state wage payment
and conditions of employment law (including but not limited to Mo. Rev. Stat.
§290.010 et seq.); any and all common law claims; any and all whistleblowing
claims; any and all tort claims, including but not limited to any and all claims
for tortious interference with business expectancy, outrage, negligent
infliction of emotional distress, defamation, retaliation, and/or wrongful
discharge in violation of public policy; any and all public policy claims; any
and all claims under any federal and/or state Constitution, any and all claims
under any federal, state and/or local common law, and any and all claims under
any Company and/or Company Affiliate policy or practice, including but not
limited to any claims regarding bonus, health, stock incentive, retirement,
and/or benefit plans of Company and/or any Company Affiliate.

 

(c)                                  The foregoing Release does not include any
claims that cannot be released or waived by law, including but not limited to
the right to file a charge with or participate in an investigation conducted by
certain government agencies; provided, however, that Employee is releasing and
waiving the right to any monetary recovery should any government agency pursue
any claims on Employee’s behalf.

 

(d)                                 The foregoing Release does not affect
Employee’s right to enforce the terms of this Agreement and/or the Retention
Agreement.  Additionally, the foregoing Release does not affect Employee’s right
to receive any vested benefits under an employee benefit plan subject to ERISA
or to any other vested benefit Employee may be entitled to receive under any
applicable Company or Company Affiliate benefit plan.

 

(e)                                  In exchange for and in consideration of the
promises of Company contained in this Agreement, Employee agrees not to initiate
any legal, administrative, or other proceeding relating to any of the matters
released herein, to the fullest extent permitted by law.

 

(f)                                   Employee acknowledges that by executing
this Agreement, he is waiving and releasing any and all legal rights and claims
he may have under the ADEA and all other federal, state and local laws regarding
age discrimination, whether those claims are presently known to Employee or
hereafter discovered.  However, nothing in the foregoing is intended to limit or
restrict Employee’s right to challenge the validity of this Agreement as to
claims and rights asserted under the ADEA or Employee’s right to enforce this
Agreement.

 

(g)                                  Employee agrees, following the Termination
Date, to take no action to interfere knowingly with Company or any Company
Affiliate’s operation of business or management of personnel.

 

(h)                                 In connection with Employee’s retirement,
Employee voluntarily ended his employment with Company and/or with any Company
Affiliates upon mutual consent of Company, effective June 30, 2016.

 

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(i)                                     Upon reasonable request by the Company,
Employee will participate in the investigation, prosecution, or defense of any
matter involving Company, any matter involving any of the Company Affiliates, or
any other matter that arose or will arise during Employee’s employment, provided
Company shall reimburse Employee for any reasonable travel and out-of-pocket
expenses incurred in providing such participation at its request, the purpose of
which reimbursement is to avoid cost to Employee and not to influence Employee’s
participation. Company’s request for reasonable cooperation shall take into
consideration Employee’s personal and business commitments and the amount of
notice provided to Employee by Company.

 

(j)                                    Employee acknowledges that the Company
and Company Affiliates’ relationships with its employees, contractors and
business associates are among their most important assets.  Employee agrees that
for a period of one (1) year after the termination of his employment with
Company, Employee will not, as examined from an objective viewpoint, directly or
indirectly, individually or in any capacity whatsoever, (i) participate in the
solicitation, recruitment, hiring, or contracting as an employee or engaging as
an independent contractor any employee, contractor, sales assistant or agent of
Company and/or any Company Affiliate, or (ii) induce or attempt to induce any
such persons to terminate, or in any way interfere knowingly with, the
contractual or other relationship between Company and/or any Company Affiliate
and any such persons.

 

(k)                                 Employee expressly agrees that, except as
otherwise provided in this Agreement and the Retention Agreement, no additional
payments or other consideration are appropriate or due to Employee for any
reason, and that Employee has received all compensation and leave due and owing
to Employee relating to any employment or other relationship with Company and/or
any Company Affiliate, or any express or implied contract, including without
limitation, all wages, commissions, bonuses, incentive pay, retention bonus,
sick pay and vacation pay, and any form of leave from Company and/or any Company
Affiliate.

 

(l)                                     Employee received this Agreement on
             , 2016 (the “Date of Receipt”).  Employee is hereby advised and
acknowledges that Employee has twenty-one (21) calendar days to consider this
Agreement and sign it, although Employee may sign and return it sooner if
Employee so chooses. However, in no event may Employee sign the Agreement before
the calendar day following the Termination Date or after twenty-one days
following the Date of Receipt.  Any signature before the calendar day following
the Termination Date or after the Date of Receipt shall be deemed ineffective
and not a valid execution of this Agreement. Employee may return this signed
Agreement to Company’s General Counsel, at 6300 Lamar Avenue, Overland Park,
Kansas 66202.  Company hereby advises Employee that Employee may revoke this
Agreement by delivering a written notice of revocation via certified mail to
Company’s General Counsel, at the address referenced within this paragraph
within seven (7) calendar days after Employee signs this Agreement.  Where no
revocation is made, this Agreement will become effective and enforceable on the
8th calendar day following the date Employee signs this Agreement (the
“Effective Date”).

 

(m)                             Company advised/hereby advises Employee to
consult with an attorney before executing this Agreement, particularly regarding
the RELEASE AND WAIVER OF CLAIMS in Paragraph 3(b) — 3(d).

 

(n)                                 Employee acknowledges that as a result of
Employee’s employment relationship with Company and/or any Company Affiliate,
Employee acquired confidential information of

 

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                                                a special and unique nature and
value relating to Company and Company Affiliate matters.  Except as otherwise
provided for within this Agreement, Employee will not remove from Company or any
Company Affiliate, or directly or indirectly communicate, divulge, or use,
whether for Employee’s benefit or for the benefit of any third party, any
confidential and/or proprietary information concerning the Company business
and/or the Company Affiliates’ business, including but not limited to any and
all proprietary information, information regarding the nature of Company and
Company Affiliates’ investment management systems, proprietary investment
management practices, investment holdings, returns, allocations, private equity
investments, transactions, communications, operating agreements, amendments,
consents, investment strategies and dispositions, location of proprietary
electronic data, strategic plans of Company and any Company Affiliate,
passwords, passcodes or similar mechanisms for gaining access to any computer,
computer system, computer network, computer data, or any other electronic data
storage device or any data contained therein, information regarding Company or
Company Affiliates’ personnel matters, information related to any internal
investigation or auditing process, client lists, client account and contact
information, proprietary products, proprietary commission information,
proprietary supervisory information, Company or Company Affiliates’ research,
agreements, systems, procedures, manuals, operations, services, materials,
policies, and the manner in which they are developed, marketed, and/or provided,
Company legal matters, attorney-client privileged information, attorney work
product-privileged information, and any and all such other information regarded
as trade secrets and/or confidential and/or proprietary information by Company,
by Company Affiliates, and/or under any applicable law, regulation, rule, and/or
ethical guideline (collectively, “Confidential Information”). Employee
understands that Confidential Information includes, but is not limited to, trade
secrets and information relating thereto. Employee further acknowledges and
agrees that Confidential Information referenced this Paragraph includes
Confidential Information, as defined in the Amended and Restated Employment
Agreement Employee entered into with Waddell & Reed Investment Management
Company on March 3, 1998 (“Employment Agreement”) and the Confidentiality
Agreement Employee entered into with Waddell & Reed Financial, Inc. on March 22,
1998 (“Confidentiality Agreement”). Notwithstanding the above, Confidential
Information shall not include any contact information located in Employee’s
rolodex (whether paper or electronic), which Employee shall be able to
download/transfer after the Termination Date, and any information that is
generally known in the industry or in the public domain or becomes generally
known in the industry or in the public domain through no wrongful act on
Employee’s part.

 

(o)                                 Employee certifies that, as of the date
Employee signed this Agreement, and except as otherwise provided for in this
Agreement and in the Retention Agreement, Employee has returned to Company all
Company or Company Affiliate property in Employee’s possession or control,
including but not limited to any Confidential Information, as defined in this
Agreement, Company or Company Affiliate issued credit card, access devices,
office equipment, training and supervisory manuals, board materials, documents,
records, notebooks, computers, printers, scanners, computer disks, mobile
devices, tapes, zip drives, thumb drives, and similar repositories of or
documents containing any Confidential Information, including all existing
copies, abstracts, and summaries thereof.

 

(p)                                 To the extent Employee has not already done
so, Employee agrees within thirty (30) days of the Termination Date, to submit
any and all expense reimbursement requests, including supporting documentation. 
Employee shall be reimbursed for any reasonable, legitimate outstanding business
expenses in accordance with Company and/or Company Affiliates’

 

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

 

                                                policies.  Employee acknowledges
and agrees that expenses not timely and properly submitted in accordance with
this paragraph shall not be subject to reimbursement by Company.

 

(q)                                 Employee represents and warrants there are
no existing or outstanding attorneys’ liens or other liens that are not
extinguished or satisfied by the execution of this Agreement.  Employee agrees
to indemnify and hold harmless Company and/or any Company Affiliates, for any
liability in connection with such liens.

 

(r)                                    Employee agrees that following the
Termination Date he will no longer be authorized to access any of Company or
Company Affiliates’ systems or subscription services, Company or Company
Affiliates’ computers, systems, applications, servers, workstations, operating
systems, databases, accounting systems, network infrastructure, software,
programs, and any documentation, data or property contained within or in
connection with any network infrastructure or systems listed herein. Employee
agrees that any unauthorized attempt to access or any actual access of the
network infrastructure, systems or data described herein following the
termination of employment would be damaging to Company and/or Company
Affiliates.

 

(s)                                   As of the date Employee signed this
Agreement, and except as otherwise provided for within this Agreement, Employee
(1) has not suffered a work-related injury not properly disclosed to Company;
(2) has not exercised any actual or apparent authority by or on behalf of
Company and/or any Company Affiliates that Employee has not specifically
disclosed to Company; (3) has not entered into any agreements, whether written
or otherwise, with any of Company or Company Affiliates’ employees (current and
former) and/or third parties that could legally bind Company and/or any Company
Affiliate that Employee has not specifically disclosed to Company; (4) is not
aware of any Company or Company Affiliates’ noncompliance with regulatory,
administrative or other legal obligation, including by any Company or Company
Affiliates’ personnel, that has not already been reported; and (5) has not
engaged in any conduct that could be deemed counter to the Waddell & Reed
Financial, Inc. Corporate Code of Business Conduct and Ethics for Directors and
Employees.

 

(t)                                    Employee agrees not to participate
voluntarily in or aid in or encourage any person or entity in connection with
any lawsuit or other adversarial proceeding against Company or any Company
Affiliate, to the maximum extent permitted by law.

 

(u)                                 Employee agrees not in any way to disparage
Company, Company Affiliates (as defined herein and specifically including
Company and Company Affiliate employees and agents in their representative and
individual capacities), or any Released Parties, and agrees not to make or
solicit any comments, statements, or the like to the media or to others,
including claims against the entities, their agents, or representatives that may
be considered derogatory or detrimental to the good name or business reputation
of the above-mentioned parties. Likewise, Company agrees that it shall direct in
writing Officers of Company as of the Effective Date of this Agreement, that
while they are employed or affiliated with Company or Company Affiliates and
while they are acting in an official capacity on behalf of Company or Company
Affiliates, they shall not disparage Employee in any way and not to make or
solicit any comments, statements, or like to the media or to others, that may be
considered derogatory or detrimental to Employee’s good name or reputation.
Notwithstanding, Employee and Company recognize and agree that nothing herein
restricts Company’s or Employee’s ability to engage in protected activity.

 

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(v)                                 In addition to any other remedies or relief
that may be available, the prevailing party in any dispute arising as a result
of any misrepresentation made by the other party in this Agreement agrees to pay
any attorneys’ fees the prevailing party may incur as a result of any such
misrepresentation.

 

4.                                      Nothing in this Agreement is intended to
limit, restrict or interfere with Employee’s right to engage in any protected
activity, including but not limited to testifying before, communicating with
and/or participating in any investigation conducted by or proceeding held before
any regulatory agency, including but not limited to the U.S. Securities and
Exchange Commission, the Financial Industry Regulatory Authority, Inc., and/or
the Equal Employment Opportunity Commission (and/or similar state or federal
agency), and nothing herein is intended to restrict Employee’s ability to
participate in concerted activity under the National Labor Relations Act.

 

5.                                      The parties further agree as follows:

 

(a)                                 Unless specified herein, or as provided for
in the Retention Agreement, this Agreement constitutes the entire agreement
between Employee and Company with respect to the matters contemplated hereby and
supersedes and is in full substitution for any and all prior understanding or
agreements with respect to Employee’s employment. No modification or waiver of
any provision of this Agreement will be valid unless in writing and signed by
Employee and Company.  Further, in entering into this Agreement, they did not
rely on any promise or agreement not included in this Agreement.

 

(b)                                 Nothing herein shall impact Employee,
Company and/or Company Affiliates’ rights under the Indemnification Agreement
entered into between Employee and Waddell & Reed Financial, Inc. as of
November 13, 2009 and any coverage Employee continues to have under Company’s or
Company Affiliates’ Directors and Officers insurance policies.

 

(c)                                  Except as reflected in the Retention
Agreement, Employee’s post termination promises and obligations in the
Employment Agreement and Confidentiality Agreement, as referenced herein, shall
remain in full force and effect.

 

(d)                                 This Agreement is severable. If any
provision of this Agreement is declared unenforceable, void, invalid, or
voidable, then the parties intend that the validity, legality, and
enforceability of the remaining provisions of this Agreement shall in no way be
affected or impaired, and the remaining provisions of this Agreement shall
remain valid and enforceable as written, to the fullest extent permitted by law.

 

(e)                                  This Agreement shall be construed in
accordance with the laws of the State of Kansas, regardless of any conflict of
laws provision.  Further, any action to interpret or enforce this Agreement
shall be brought in the federal or state courts situated in Kansas, regardless
of the state of residence of any party to such action.

 

(f)                                   In the event either party to this
Agreement breaches its obligations under this Agreement the injured party may
pursue all legal remedies available to it as a result of the breach, including,
but not limited to, an action in a competent court for actual damages for the
injury caused by the breaching party, as well as reasonable attorneys’ fees and
costs. The parties agree that Company and/or any Company Affiliate may be
entitled to seek injunctive and other equitable relief to prevent a breach of
this Agreement, in addition to any other remedy to which Company and/or Company
Affiliate might be entitled.  Company and/or Company Affiliates’ remedies for
breach as referenced herein shall be

 

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                                                cumulative and the pursuit of
one remedy shall not be deemed to exclude any and all other remedies.

 

(g)                                  The parties expressly agree and understand
that neither the existence of this Agreement nor anything contained in this
Agreement shall constitute an admission of any liability on the part of Company
or any Company Affiliate.  Any and all such liability is expressly denied.
Neither the existence of this Agreement nor anything contained in this Agreement
shall be construed as rendering Employee a “prevailing party” for purposes of
awarding attorneys’ fees or costs under any applicable local, state or federal
law.

 

(h)                                 To the extent applicable, it is intended
that this Agreement comply with the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) to the extent that this Agreement
constitutes a “nonqualified deferred compensation plan” as such term is defined
in Code Section 409A, and this Agreement shall be construed and applied in a
manner consistent with this intent. In this regard, each payment made under this
Agreement shall be treated as a separate payment and the right to a series of
installment payments under this Agreement is to be treated as a right to a
series of separate payments. Any reimbursements under this Agreement that would
constitute nonqualified deferred compensation subject to Section 409A of the
Code shall be subject to the following additional rules: (i) no reimbursement of
any such expense shall affect Employee’s right to reimbursement of any such
expense in any other taxable year; (ii) reimbursement of the expense shall be
made, if at all, promptly but not later than the end of the calendar year
following the calendar year in which the expense was incurred; and (iii) the
right to reimbursement shall not be subject to liquidation or exchange for any
other benefit. The payments and benefits payable to Employee under this
Agreement shall be construed as exempt from Section 409A to the maximum possible
extent. Except as described above, the Company makes no
representations regarding the taxation of the payments and benefits provided
under this Agreement (and the manner in which such payments and benefits are
reported to Employee or an appropriate taxing jurisdiction by the Company is not
intended to be such a representation) and in no event shall the Company or any
Company Affiliate be liable for all or any portion of any taxes, penalties,
interest or other expenses that may be incurred by Employee on account of the
payments and benefits provided under this Agreement (including taxes, penalties,
interest or other expenses resulting from non-compliance with Section 409A of
the Internal Revenue Code or excise taxes imposed by Section 4999 of the
Internal Revenue Code).

 

(i)                                     Company’s or Employee’s failure to
exercise any of its rights under this Agreement with regard to a breach of this
Agreement shall not be construed as a waiver of such breach, nor shall it
prevent Company or Employee from later enforcing strict compliance with any and
all promises in this Agreement.

 

(j)                                    This Agreement will be binding on and
inure to the benefit of Employee and Employee’s heirs, administrators,
representatives, executors, successors, and assigns, and will be binding on and
inure to the benefit of Company, Company Affiliates, and those entities’
successors and assigns.

 

(k)                                 This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which shall constitute together one and the same Agreement.  Any party to this
Agreement may execute this Agreement by signing any such counterpart.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
indicated below.

 

For Employee:

 

BY SIGNING BELOW, I SPECIFICALLY AGREE THAT I HAVE READ THE FOREGOING AGREEMENT,
THAT I FULLY UNDERSTAND EACH AND EVERY PROVISION OF THIS AGREEMENT, THAT I HAVE
HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY ABOUT THIS AGREEMENT, AND THAT I
AM VOLUNTARILY, FREELY, AND KNOWINGLY EXECUTING IT.

 

 

Date:

 

 

 

 

 

Michael L. Avery

 

 

For Company:

 

 

Date:

 

 

 

 

 

Waddell & Reed Financial, Inc.

 

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