Exhibit 10.1

 

CONSULTING AGREEMENT

 

This Consulting Agreement (this “Agreement”) is made to be effective as of
May 25, 2005 (the “Effective Date”) by and between Waddell & Reed
Financial, Inc., a Delaware corporation (the “Company”), and Keith A. Tucker
(“Consultant”).

 

WHEREAS, Consultant has served as a Chief Executive Officer and as Chairman of
the Board of Directors of the Company and has substantial knowledge and
expertise concerning the business and affairs of the Company;

 

WHEREAS, Consultant’s employment with the Company terminated effective May 25,
2005;

 

WHEREAS, the Company desires to engage Consultant as an independent consultant
to assist with the daily business and affairs of the Company and Consultant
desires to provide such consulting services to the Company and its Affiliates;

 

NOW, THEREFORE, in consideration of the agreements set forth below and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the Company and the Consultant agree as follows:

 

1.                                       CONSULTING SERVICES.

 

(A)                                  THE COMPANY HEREBY ENGAGES CONSULTANT, AND
CONSULTANT HEREBY AGREES TO BE ENGAGED BY THE COMPANY, AS AN INDEPENDENT
BUSINESS CONSULTANT ON THE TERMS SET FORTH HEREIN.  CONSULTANT WILL PROVIDE THE
COMPANY AND ITS AFFILIATES (AS DEFINED BELOW) WITH MANAGERIAL AND ADVISORY
SERVICES, INCLUDING, WITHOUT LIMITATION, MANAGERIAL AND ADVISORY SERVICES IN THE
MUTUAL FUND, MUTUAL FUND UNDERWRITING AND DISTRIBUTION AND INVESTMENT ADVISOR
FINANCIAL PLANNING AREAS (COLLECTIVELY, THE “SERVICES”).  CONSULTANT SHALL
PROVIDE SERVICES ONLY AT THE REQUEST AND UNDER THE DIRECTION OF THE COMPANY’S
BOARD OF DIRECTORS.  CONSULTANT WILL PROVIDE THE SERVICES AT MUTUALLY AGREEABLE
TIMES AND AT MUTUALLY AGREED LOCATIONS; PROVIDED, HOWEVER, THAT IN NO EVENT
SHALL CONSULTANT BE REQUIRED TO PROVIDE SERVICES IN EXCESS OF (I) AN AGGREGATE
OF 325 HOURS DURING THE FIRST YEAR OF THE TERM OF THIS AGREEMENT, (II) AN
AGGREGATE OF 250 HOURS DURING THE SECOND YEAR OF THE TERM OF THIS AGREEMENT, AND
(III) AN AGGREGATE OF 200 HOURS DURING EACH FOLLOWING YEAR DURING THE TERM OF
THIS AGREEMENT.  IN THE EVENT THAT THE CONSULTANT’S COOPERATION IS REQUESTED
PURSUANT TO SECTION 8 OF THIS AGREEMENT, THEN EACH HOUR THAT THE CONSULTANT
SPENDS COOPERATING PURSUANT TO SECTION 8 SHALL REDUCE THE AGGREGATE NUMBER OF
HOURS THAT CONSULTANT IS REQUIRED TO PROVIDE SERVICES FOR THE YEAR IN WHICH THE
COOPERATION IS REQUESTED;  PROVIDED, HOWEVER, THAT CONSULTANT’S OBLIGATIONS
UNDER SECTION 8 OF THIS AGREEMENT ARE NOT LIMITED BY THE AGGREGATE LIMITS ON
HOURS FOR THE SERVICES SET FORTH IN THIS SECTION 1, NOR SHALL THERE BE ANY
ADDITIONAL PAYMENTS FOR COOPERATION PURSUANT TO SECTION 8 OF THIS AGREEMENT. AS
USED HEREIN, “AFFILIATES” MEANS ANY OTHER PERSON OR ENTITY CONTROLLING,
CONTROLLED BY OR UNDER COMMON CONTROL WITH THE COMPANY.

 

(B)                                 CONSULTANT MAY ACCEPT ENGAGEMENTS BY OR
EMPLOYMENT WITH A THIRD PARTY DURING THE TERM OF THIS AGREEMENT AS LONG AS
CONSULTANT CONTINUES TO PROVIDE

 

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THE SERVICES AS REQUESTED BY THE COMPANY AND OTHERWISE COMPLIES WITH THE TERMS
AND CONDITIONS OF THIS AGREEMENT.

 

2.                                       TERM.  THE TERM OF THIS AGREEMENT IS
EIGHT (8) SUCCESSIVE YEARS BEGINNING ON THE EFFECTIVE DATE, UNLESS TERMINATED
EARLIER AS SET FORTH IN THIS SECTION 2.  CONSULTANT MAY TERMINATE THIS AGREEMENT
VOLUNTARILY AT ANY TIME UPON NO LESS THAN THIRTY (30) DAYS PRIOR WRITTEN NOTICE
TO THE COMPANY.  THIS AGREEMENT SHALL TERMINATE AUTOMATICALLY WITH NO ACTION ON
THE PART OF EITHER PARTY UPON THE OCCURRENCE OF ANY OF THE FOLLOWING:

 

(A)                                  CONSULTANT DIES;

 

(B)                                 CONSULTANT BECOMES DISABLED AND UNABLE TO
PERFORM HIS DUTIES UNDER THIS AGREEMENT FOR AN AGGREGATE OF ONE HUNDRED FIFTY
(150) DAYS WITHIN ANY ONE HUNDRED EIGHTY (180) DAY PERIOD (EXCLUSIVE OF THE
PERIOD REFERRED TO IN THE FIRST SENTENCE OF THE FOLLOWING PARAGRAPH);

 

(C)                                  THE COMPANY’S BOARD OF DIRECTORS TERMINATES
THIS AGREEMENT FOR CAUSE;  OR

 

(D)                                 CONSULTANT TERMINATES THIS AGREEMENT DUE TO
THE COMPANY’S MATERIAL BREACH OF THIS AGREEMENT THAT IS NOT CURED WITHIN 15 DAYS
OF RECEIPT OF WRITTEN NOTICE THEREOF FROM THE CONSULTANT.

 

For purposes of this Agreement, Consultant will be “disabled and unable to
perform his duties under this Agreement” only if the events described in clause
(b) of Section 2 have occurred and the Company’s Board of Directors determines,
in good faith, based on medical evidence reasonably acceptable to it, that
Consultant has become physically or mentally disabled for an additional period
of one hundred twenty (120) days in the subsequent one hundred eighty (180) day
period.

 

For purposes of this Agreement, “Cause”‘ is defined to mean any of:  (1) an act
of fraud, dishonesty or embezzlement by Consultant against the Company; (2) the
Consultant’s willful commission of an act intending to cause, and causing,
material damage to the Company; (3) Consultant’s willful refusal to perform his
duties under this Agreement which continues for a period of ten days after
written notice thereof;  (4) the conviction of the Consultant for a felony crime
involving moral turpitude; or (5) Consultant’s material violation of Sections 5,
6, 7 or 8 hereof that is not cured within 15 days of receipt of written notice
thereof from the Company.

 

3.                                       PAYMENTS, FEES AND EXPENSES.

 

(A)                                  ON THE BUSINESS DAY IMMEDIATELY AFTER THE
EXPIRATION OF THE CONSULTANT’S UNEXERCISED RIGHT TO REVOKE THE GENERAL RELEASE
(THE “REVOCATION EXPIRATION DATE”), CONSULTANT SHALL BE PAID A LUMP SUM CASH
AMOUNT OF (I) $3,000,000 PLUS (II) HIS BASE SALARY AS AN EMPLOYEE OF THE COMPANY
THROUGH THE DATE HEREOF, ACCRUED VACATION PAY AND $470,137, REPRESENTING HIS PRO
RATA TARGET BONUS FOR 2005.

 

(B)                                 FROM THE EFFECTIVE DATE UNTIL THIS AGREEMENT
TERMINATES, CONSULTANT WILL BE PAID FEES FOR THE SERVICES (COLLECTIVELY, THE
“CONSULTING FEES”) OF

 

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$375,000 PER YEAR, PAYABLE MONTHLY IN ARREARS.   IN THE EVENT OF A TERMINATION
PURSUANT TO CLAUSE (D) OF SECTION 2, ALL AMOUNTS THAT WOULD THEREAFTER HAVE BEEN
PAID DURING THE FULL TERM OF THIS AGREEMENT SHALL BE IMMEDIATELY PAID IN CASH
LUMP SUM, AND HEALTH INSURANCE BENEFITS SHALL CONTINUE PER SECTION 4(A) HEREOF
(BUT OFFICE/SUPPORT STAFF BENEFITS PER SECTION 4(B) SHALL BE TERMINATED).

 

(C)                                  IF THE COMPANY REQUESTS CONSULTANT TO INCUR
ANY OUT-OF-POCKET BUSINESS EXPENSES IN CONNECTION WITH PROVIDING THE SERVICES,
THE COMPANY SHALL REIMBURSE CONSULTANT FOR SUCH DOCUMENTED EXPENSES.  UPON THE
TERMINATION OF THIS AGREEMENT, AND EXCEPT FOR THE OBLIGATION TO PAY CONSULTING
FEES AND HEALTH INSURANCE BENEFITS IN THE EVENT OF A TERMINATION PURSUANT TO
CLAUSE (D) OF SECTION 2 AS PROVIDED IN SECTION 3(B), THE COMPANY SHALL HAVE NO
OBLIGATION TO PAY CONSULTANT FOR ANY SERVICES OR REIMBURSE ANY EXPENSES OF
CONSULTANT HEREUNDER, EXCEPT FOR THE PAYMENT OF CONSULTING FEES FOR SERVICES
RENDERED OR REASONABLE OUT-OF-POCKET EXPENSES INCURRED THROUGH THE EFFECTIVE
DATE OF SUCH TERMINATION.

 

(D)                                 THE PAYMENTS AND CONSULTING FEES PAID
PURSUANT TO THIS AGREEMENT SHALL BE MADE WITHOUT ANY WITHHOLDINGS OR DEDUCTIONS,
INCLUDING WITHOUT LIMITATION, DEDUCTIONS OR WITHHOLDINGS FOR SOCIAL SECURITY,
MEDICARE OR INCOME TAXES, UNLESS OTHERWISE REQUIRED BY LAW.  CONSULTANT WILL BE
RESPONSIBLE FOR AND WILL PAY ANY AND ALL TAXES OWING IN RESPECT OF THE PAYMENTS
AND CONSULTING FEES PAID HEREUNDER AND WILL INDEMNIFY, DEFEND AND HOLD HARMLESS
THE COMPANY AGAINST ALL SUCH TAXES AND WILL COMPLY WITH ALL GOVERNMENTAL
REGULATIONS WITH RESPECT THERETO, INCLUDING THE FILING OF ALL NECESSARY RETURNS
AND REPORTS:

 

4.                                       OTHER RIGHTS.

 

(A)                                  BEGINNING ON THE EFFECTIVE DATE, COMPANY
AGREES TO PROVIDE HEALTH INSURANCE COVERAGE, ON TERMS NO LESS FAVORABLE THAN ARE
IN EFFECT FOR SENIOR EXECUTIVES OF THE COMPANY, FOR CONSULTANT AND HIS SPOUSE,
IF ANY, DURING THE TERM OF THIS AGREEMENT AND, UNLESS THIS AGREEMENT IS
TERMINATED FOR CAUSE, THEREAFTER UNTIL THE DEATH OF CONSULTANT AND HIS SPOUSE,
IF ANY; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE COMPANY BE RESPONSIBLE FOR
HEALTH INSURANCE COVERAGE IN EXCESS OF WHAT IT PAYS FOR SENIOR EXECUTIVES OF THE
COMPANY GENERALLY PER YEAR.

 

(B)                                 DURING THE TERM OF THE AGREEMENT, COMPANY
AGREES TO PROVIDE AN OFFICE AND SUPPORT STAFF IN A MUTUALLY AGREEABLE LOCATION;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE COMPANY BE RESPONSIBLE FOR OFFICE,
EQUIPMENT, SUPPLIES, COMPUTER, CELL PHONE AND SUPPORT STAFF COSTS IN EXCESS OF
$100,000 PER YEAR.  IN THE EVENT THAT CONSULTANT’S ASSISTANT PRIOR TO THE DATE
OF THIS AGREEMENT IS STILL EMPLOYED BY THE COMPANY AT SUCH TIME AND IS WILLING
TO ACT IN SUCH CAPACITY, SUCH ASSISTANT SHALL BE AVAILABLE TO CONSULTANT ON A
PRIORITY BASIS FOR THE THREE MONTH PERIOD BEGINNING THE EFFECTIVE DATE, WITH THE
COMPENSATION AND OUT OF POCKET COSTS OF SUCH ASSISTANT DURING SUCH TIME BEING
DEDUCTED FROM THE $100,000 ALLOWANCE PROVIDED IN THE FIRST YEAR OF THIS
AGREEMENT.

 

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(C)                                  THE PARTIES ACKNOWLEDGE THAT IN CONNECTION
WITH THE TERMINATION OF CONSULTANT’S EMPLOYMENT AND IN CONSIDERATION OF
CONSULTANT’S AGREEMENTS HEREUNDER AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
COMPANY HAS AGREED TO, AND HAS PREVIOUSLY APPROVED, EFFECTIVE ON THE REVOCATION
EXPIRATION DATE, (I) THE RETENTION BY CONSULTANT OF 198,189 SHARES OF UNVESTED
RESTRICTED COMPANY CLASS A COMMON STOCK GRANTED TO CONSULTANT PURSUANT TO THE
COMPANY 1998 STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED OR THE COMPANY 1998
EXECUTIVE DEFERRED COMPENSATION STOCK AWARD PLAN, AS AMENDED AND RESTATED (WHICH
REPRESENTS ALL SHARES OF OUTSTANDING UNVESTED RESTRICTED COMPANY CLASS A COMMON
STOCK GRANTED TO CONSULTANT IN CONNECTION WITH HIS EMPLOYMENT BY THE COMPANY),
THE VESTING OF WHICH SHALL BE ON THE SAME SCHEDULE AS CONSULTANT HAD PRIOR TO
TERMINATION OF EMPLOYMENT BUT SUBJECT TO THE CONTINUING PERFORMANCE BY
CONSULTANT OF SERVICES TO THE COMPANY AS SET FORTH IN THIS AGREEMENT DURING SUCH
VESTING SCHEDULE, (II) THE PARTICIPATION BY CONSULTANT IN THE COMPANY’S STOCK
OPTION RESTORATION PROGRAM FOR 2005, AND (III) THAT CONSULTANT’S TERMINATION OF
EMPLOYMENT SHALL BE CONSIDERED TO BE AN “EARLY RETIREMENT” (FOR SUCH OPTIONS AS
SUCH CONCEPT IS RELEVANT)  FOR PURPOSES OF ALL OUTSTANDING OPTIONS HELD BY HIM
PRIOR TO HIS TERMINATION.  THE PARTIES ACKNOWLEDGE THAT, UPON THE EFFECTIVE
DATE, CONSULTANT IS FULLY VESTED IN HIS ACCOUNT COMPANY’S SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN (THE “SERP”) AND IS ENTITLED TO RECEIVE THE DISTRIBUTION OF THE
ACCRUED BALANCE OF $2,595,239.66 IN SUCH ACCOUNT IN ACCORDANCE WITH ALL
AVAILABLE ELECTIONS, AS PROVIDED IN THE SERP.

 

5.                                       CONFIDENTIAL INFORMATION.

 

(A)                                  AS USED HEREIN, “CONFIDENTIAL INFORMATION”
MEANS ALL CONFIDENTIAL OR PROPRIETARY INFORMATION, WHETHER ORAL OR WRITTEN, NOW
OR HEREAFTER DEVELOPED, ACQUIRED OR USED BY THE COMPANY AND RELATING TO THE
COMPANY’S BUSINESS, OR THAT OF ITS AFFILIATES, THAT IS NOT GENERALLY KNOWN TO
OTHERS IN THE COMPANY’S AREA OF BUSINESS, INCLUDING, WITHOUT LIMITATION (TO THE
EXTENT CONFIDENTIAL): (1) ANY TRADE SECRETS, WORK PRODUCT, PROCESSES, ANALYSES,
KNOW-HOW OR OTHER INTELLECTUAL PROPERTY OF THE COMPANY; (2) THE COMPANY’S
ADVERTISING, PRODUCT DEVELOPMENT, STRATEGIC AND BUSINESS PLANS AND INFORMATION;
(3) THE PRICES AT WHICH THE COMPANY HAS SOLD OR OFFERED TO SELL ITS PRODUCTS OR
SERVICES; AND (4) THE COMPANY’S FINANCIAL STATEMENTS AND OTHER FINANCIAL
INFORMATION.

 

(B)                                 IN THE COURSE OF PERFORMING SERVICES FOR THE
COMPANY PRIOR TO THE DATE HEREOF AS AN EMPLOYEE OF THE COMPANY AND SUBSEQUENT TO
THE DATE HEREOF UNDER THIS AGREEMENT, CONSULTANT HAS RECEIVED OR MAY RECEIVE OR
HAVE ACCESS TO COMMERCIALLY VALUABLE CONFIDENTIAL INFORMATION.  CONSULTANT
ACKNOWLEDGES AND AGREES THAT THE CONFIDENTIAL INFORMATION (TO THE EXTENT IT CAN
BE OWNED) IS AND WILL BE THE COMPANY’S SOLE AND EXCLUSIVE PROPERTY.  CONSULTANT
WILL NOT USE ANY CONFIDENTIAL INFORMATION FOR HIS OWN BENEFIT OR DISCLOSE ANY
CONFIDENTIAL INFORMATION TO ANY THIRD PARTY (EXCEPT IN THE COURSE OF PERFORMING
THE SERVICES UNDER THIS AGREEMENT), EITHER DURING OR SUBSEQUENT TO THE TERM OF
THIS AGREEMENT.  AT THE EARLIER OF THE TERMINATION OF THIS AGREEMENT OR THE
COMPANY’S REQUEST, CONSULTANT WILL PROMPTLY DELIVER TO THE COMPANY ALL
DOCUMENTS, COMPUTER DISKS AND OTHER COMPUTER STORAGE DEVICES, AND OTHER PAPERS
AND MATERIALS (INCLUDING ALL COPIES THEREOF IN WHATEVER FORM) CONTAINING OR
INCORPORATING ANY CONFIDENTIAL INFORMATION OR OTHERWISE RELATING TO IN ANY WAY
TO THE COMPANY’S BUSINESS, OR THAT OF ITS AFFILIATES, THAT ARE IN HIS POSSESSION
OR UNDER HIS CONTROL.  IT IS UNDERSTOOD

 

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AND AGREED THAT THE CONFIDENTIALITY AGREEMENT DATED MARCH 2, 1998 WILL CONTINUE
TO BE BINDING UPON THE CONSULTANT IN ACCORDANCE WITH ITS TERMS, AND THAT THE
CHANGE OF CONTROL AGREEMENT DATED DECEMBER 14, 2001 BY AND BETWEEN THE COMPANY
AND CONSULTANT IS TERMINATED; PROVIDED, HOWEVER, THAT IN ACCORDANCE WITH THE
TERMS OF THE CHANGE OF CONTROL AGREEMENT, ANY AND ALL CONFIDENTIALITY PROVISIONS
THEREOF SHALL SURVIVE SUCH TERMINATION.

 

6.                                       COVENANT NOT TO COMPETE.

 

(A)                                  IN CONSIDERATION OF THE COMPANY’S PAYMENTS
PURSUANT TO SECTION 3 OF THIS AGREEMENT, DURING THE TERM OF THIS AGREEMENT AND
CONSULTANT’S RECEIPT OF CONFIDENTIAL INFORMATION, CONSULTANT HEREBY AGREES THAT,
DURING THE PERIOD BEGINNING ON THE EFFECTIVE DATE AND ENDING ONE YEAR AFTER
TERMINATION OF THIS AGREEMENT, HE WILL NOT (EXCEPT IN THE COURSE OF PERFORMING
HIS AUTHORIZED DUTIES FOR THE COMPANY UNDER THIS AGREEMENT), DIRECTLY OR
INDIRECTLY, ON HIS OWN BEHALF OR AS AN OFFICER, DIRECTOR, EMPLOYEE, CONSULTANT
OR OTHER AGENT OF, OR AS A STOCKHOLDER, PARTNER OR OTHER INVESTOR IN, ANY PERSON
OR ENTITY (OTHER THAN THE COMPANY OR ITS AFFILIATES):

 

(1)                                  ENGAGE IN THE MUTUAL FUND INDUSTRY TO THE
EXTENT IT MATERIALLY OVERLAPS WITH THE PREDOMINANT MARKETS OF THE COMPANY (A
“COMPETING BUSINESS”) WITHIN THE UNITED STATES OF AMERICA (THE “TERRITORY”);

 

(2)                                  DIRECTLY OR INDIRECTLY INFLUENCE OR ATTEMPT
TO INFLUENCE ANY CUSTOMER OR POTENTIAL CUSTOMER (WHICH FOR PURPOSES OF THIS
AGREEMENT, SHALL MEAN ANY PERSON OR ENTITY TO WHICH THE COMPANY OR ANY OF ITS
AFFILIATES MARKETED (OUTSIDE OF GENERAL ADVERTISING) ITS PRODUCTS OR SERVICES
DURING THE SIX MONTH PERIOD PRIOR TO ANY DATE OF DETERMINATION) LOCATED WITHIN
THE TERRITORY TO PURCHASE GOODS, SERVICES OR PRODUCTS RELATED TO A COMPETING
BUSINESS FROM ANY INDIVIDUAL, CORPORATION, PARTNERSHIP, OR OTHER ENTITY OTHER
THAN THE COMPANY OR ITS AFFILIATES; OR

 

(3)                                  EMPLOY, ATTEMPT TO EMPLOY OR SOLICIT FOR
EMPLOYMENT IN ANY POSITION RELATED TO THE CONDUCT OF A COMPETING BUSINESS IN THE
TERRITORY ANY INDIVIDUAL WHO IS AN EMPLOYEE OF THE COMPANY OR ANY OF ITS
AFFILIATES AT SUCH TIME OR WAS AN EMPLOYEE OF THE COMPANY OR ANY OF ITS
AFFILIATES DURING THE SIX MONTHS PRIOR TO ANY DATE OF DETERMINATION;

 

provided that the foregoing will not apply to any investment in publicly traded
securities constituting less than ten percent (10%) of the outstanding
securities in such class.

 

(B)                                 CONSULTANT REPRESENTS TO THE COMPANY THAT HE
IS WILLING AND ABLE TO ENGAGE IN BUSINESSES OTHER THAN A COMPETING BUSINESS
WITHIN THE TERRITORY AND THAT ENFORCEMENT OF THE RESTRICTIONS SET FORTH IN THIS
SECTION 6 ARE NOT UNDULY BURDENSOME TO CONSULTANT.  CONSULTANT ACKNOWLEDGES AND
AGREES THAT THE RESTRICTIONS SET FORTH IN THIS SECTION 6 ARE REASONABLE AS TO
TIME, GEOGRAPHIC AREA AND SCOPE OF ACTIVITY AND DO NOT IMPOSE A GREATER
RESTRAINT THAN IS NECESSARY TO PROTECT THE GOODWILL, TRADE SECRETS,

 

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INFORMATION AND OTHER BUSINESS INTERESTS OF THE COMPANY, AND CONSULTANT AGREES
THAT THE COMPANY IS JUSTIFIED IN BELIEVING THE FOREGOING.

 

(C)                                  IF THE PROVISIONS OF THIS SECTION 6 ARE
FOUND BY A COURT OF COMPETENT JURISDICTION TO CONTAIN UNREASONABLE OR
UNNECESSARY LIMITATIONS OR RESTRICTIONS, THEN SUCH COURT IS HEREBY DIRECTED TO
REFORM SUCH PROVISIONS TO THE MINIMUM EXTENT NECESSARY TO CAUSE THE LIMITATIONS
OR RESTRICTIONS CONTAINED THEREIN AS TO TIME, GEOGRAPHICAL AREA AND SCOPE OF
ACTIVITY TO BE REASONABLE AND ENFORCEABLE.

 

7.                                       MUTUAL COVENANT OF NONDISPARAGEMENT. 
IN CONSIDERATION OF THE COMPANY’S PAYMENTS PURSUANT TO SECTION 3 OF THIS
AGREEMENT AND CONSULTANT’S RECEIPT OF CONFIDENTIAL INFORMATION, CONSULTANT
AGREES AND PROMISES THAT, DURING THE TERM OF AND AFTER THE TERMINATION OF THIS
AGREEMENT (REGARDLESS OF WHETHER THE AGREEMENT IS TERMINATED FOR CAUSE,
VOLUNTARILY BY CONSULTANT OR OTHERWISE), NOT TO MAKE ANY LIBELOUS, DISPARAGING
OR OTHERWISE INJURIOUS STATEMENTS ABOUT OR CONCERNING THE COMPANY OR ANY OF ITS
AFFILIATES, THEIR OFFICERS, EMPLOYEES OR REPRESENTATIVES. IN CONSIDERATION OF
THE CONSULTANT’S SERVICES PURSUANT TO THIS AGREEMENT, COMPANY AGREES AND
PROMISES THAT, DURING THE TERM OF AND AFTER THE TERMINATION OF THIS AGREEMENT
(REGARDLESS OF WHETHER THE AGREEMENT IS TERMINATED FOR CAUSE, VOLUNTARILY BY
CONSULTANT OR OTHERWISE), NEITHER THE COMPANY, ITS AFFILIATES NOR ANY OF THEIR
DIRECTORS, OFFICERS OR PERSONNEL AUTHORIZED TO SPEAK ON THEIR BEHALF SHALL MAKE
ANY LIBELOUS, DISPARAGING OR OTHERWISE INJURIOUS STATEMENTS ABOUT OR CONCERNING
THE CONSULTANT.  PROHIBITED STATEMENTS INCLUDE ANY STATEMENT THAT IS INJURIOUS
TO THE BUSINESS OR BUSINESS REPUTATION OF ANY OF THE COMPANY, ITS AFFILIATES OR
THEIR EMPLOYEES OR REPRESENTATIVES OR TO CONSULTANT, BUT DOES NOT INCLUDE
REASONABLE STATEMENTS OF DISAGREEMENT THAT THE COMPANY OR THE CONSULTANT MAKES
FOR THE PURPOSE OF (I) PROTECTING OR ENFORCING ANY OF ITS OR HIS RIGHTS OR
INTERESTS HEREUNDER, (II) COMPLIANCE WITH LEGAL REQUIREMENTS, (III) CORRECTING
INCORRECT STATEMENTS MADE BY THE OTHER PARTY OR (IV) DEFENDING AGAINST ANY CLAIM
OR CLAIMS OF THE COMPANY OR ITS AFFILIATES, OR THE CONSULTANT, AS THE CASE MAY
BE, SO LONG AS SUCH STATEMENTS ARE NOT SLANDEROUS OR LIBELOUS AND ARE DELIVERED
IN TERMS AS WOULD ORDINARILY BE CONSIDERED CUSTOMARY AND APPROPRIATE.

 

8.                                       CONSULTANT’S COOPERATION.

 

(A)                                  IN CONSIDERATION OF THE COMPANY’S AGREEMENT
TO ENGAGE CONSULTANT PURSUANT TO THIS AGREEMENT AND CONSULTANT’S RECEIPT OF
CONFIDENTIAL INFORMATION, CONSULTANT AGREES AND PROMISES THAT, DURING THE TERM
OF AND AFTER THE TERMINATION OF THIS AGREEMENT (REGARDLESS OF WHETHER THE
AGREEMENT IS TERMINATED FOR CAUSE, VOLUNTARILY BY CONSULTANT OR OTHERWISE),
CONSULTANT SHALL COOPERATE IN GOOD FAITH WITH THE COMPANY AT REASONABLE TIMES
AND REASONABLE LOCATIONS FROM TIME TO TIME AS REASONABLY REQUESTED BY THE
COMPANY CONCERNING CONSULTANT’S INFORMATION AND KNOWLEDGE WITH RESPECT TO THE
COMPANY’S BUSINESS AND WITH RESPECT TO LEGAL PROCEEDINGS OR LEGAL ISSUES
INVOLVING THE COMPANY OR ITS AFFILIATES, INCLUDING, WITHOUT LIMITATION, MAKING
HIMSELF AVAILABLE FOR DEPOSITIONS AND TRIAL AS NECESSARY IN THE OPINION OF THE
COMPANY COUNSEL.  THE COMPANY WILL REIMBURSE ALL REASONABLE TRAVEL OR OTHER
EXPENSES AS MAY BE INCURRED BY CONSULTANT IN ASSISTING THE COMPANY WITH RESPECT
TO LEGAL PROCEEDINGS OR LEGAL ISSUES INVOLVING THE COMPANY OR ITS AFFILIATES. 
FOR PURPOSES OF THIS PARAGRAPH, CONSULTANT AGREES TO USE GOOD FAITH REASONABLE
EFFORTS TO MAKE HIMSELF AVAILABLE TO THE COMPANY ON AT LEAST FIFTEEN (15)  DAYS’
PRIOR WRITTEN NOTICE.

 

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(B)                                 CONSULTANT FURTHER AGREES THAT IN THE EVENT
HE IS SUBPOENAED OR SERVED WITH ANY LEGAL PROCESS TO PRODUCE OR DIVULGE,
DIRECTLY OR INDIRECTLY, ANY TESTIMONY, DOCUMENTS OR OTHER INFORMATION REGARDING
THE COMPANY OR ANY OF ITS AFFILIATES IN ANY FORMAL OR INFORMAL JUDICIAL,
ADMINISTRATIVE, OR ARBITRATION PROCEEDING (INCLUDING ANY INTERVIEW, DEPOSITION,
HEARING AND/OR TRIAL), CONSULTANT WILL PROMPTLY NOTIFY THE COMPANY IN WRITING AT
THE ADDRESS PROVIDED IN SECTION 15 BELOW, AND DELIVER A COPY OF THE SUBPOENA OR
PROCESS TO THAT ADDRESS.

 

9.                                       RELATIONSHIP OF PARTIES.  CONSULTANT
WILL PERFORM THE SERVICES AS AN INDEPENDENT CONTRACTOR.  CONSULTANT WILL NOT ACT
OR ATTEMPT TO ACT OR REPRESENT HIMSELF DIRECTLY OR BY IMPLICATION AS AN AGENT OF
THE COMPANY OR ANY OF ITS AFFILIATES OR IN ANY MANNER ASSUME OR CREATE, OR
ATTEMPT TO CREATE, ANY OBLIGATION ON BEHALF OF, OR IN THE NAME OF THE COMPANY OR
ITS AFFILIATES.  CONSULTANT ACKNOWLEDGES AND AGREES THAT NO EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTS OR IS INTENDED TO BE CREATED BETWEEN CONSULTANT AND THE
COMPANY.  CONSULTANT WILL INDEMNIFY, DEFEND AND HOLD HARMLESS THE COMPANY AND
ITS AFFILIATES AND ITS EMPLOYEES AND AGENTS, FROM AND AGAINST ANY AND ALL
LIABILITIES, CLAIMS, COSTS OR EXPENSES ARISING OUT OF OR IN CONNECTION WITH ANY
PERSONAL INJURY, DEATH OR PROPERTY DAMAGE CAUSED BY OR ARISING FROM ANY ACTS OR
OMISSIONS OF CONSULTANT OR HIS AGENTS WHILE PERFORMING THE SERVICES.  CONSULTANT
HEREBY EXPRESSLY WAIVES FOR HIMSELF, HIS DEPENDENTS, HEIRS AND LEGAL
REPRESENTATIVES, ANY AND ALL CLAIMS TO RECEIVE ANY BENEFIT UNDER ANY EMPLOYEE
BENEFIT PLAN OR PROGRAM OF THE COMPANY OR ITS AFFILIATES, EXCEPT FOR SUCH
BENEFITS THAT CONSULTANT OR ANY SUCH PERSON IS ENTITLED TO RECEIVE IN CONNECTION
WITH CONSULTANT’S FORMER EMPLOYMENT RELATIONSHIP OR CURRENT DIRECTORSHIP WITH
THE COMPANY OR ITS AFFILIATES.

 

10.                                 INJUNCTIVE RELIEF.  NOTWITHSTANDING THE
PROVISIONS OF SECTION 18, CONSULTANT ACKNOWLEDGES AND AGREES THAT THE COMPANY
WOULD BE IRREPARABLY HARMED BY ANY VIOLATION OF CONSULTANT’S OBLIGATIONS UNDER
SECTION 5, 6, 7 OR 8 AND THAT, IN ADDITION TO ALL OTHER RIGHTS OR REMEDIES
AVAILABLE AT LAW OR IN EQUITY, THE COMPANY WILL BE ENTITLED TO SEEK INJUNCTIVE
AND OTHER EQUITABLE RELIEF TO PREVENT OR ENJOIN ANY SUCH VIOLATION, IN AID OF
ARBITRATION.  IN CONNECTION THEREWITH, CONSULTANT AGREES TO SUBMIT TO THE
EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF KANSAS FOR ANY
INJUNCTION PROCEEDING INITIATED BY THE COMPANY.  EMPLOYEE FURTHER ACKNOWLEDGES
THAT VENUE IS PROPER IN COURTS SITTING IN JOHNSON COUNTY, KANSAS FOR THIS
PURPOSE.

 

11.                                 SEVERABILITY.  IN ADDITION TO
SECTION 6(C) HEREOF, ANY PROVISION OR PORTION OF A PROVISION OF THIS AGREEMENT
THAT IS HELD TO BE INVALID OR UNENFORCEABLE WILL BE SEVERABLE, AND THIS
AGREEMENT WILL BE CONSTRUED AND ENFORCED AS IF SUCH PROVISION, OR PORTION
THEREOF, DID NOT COMPRISE A PART HEREOF, AND THE REMAINING PROVISIONS OR
PORTIONS OF PROVISIONS WILL REMAIN IN FULL FORCE AND EFFECT.  IN LIEU OF EACH
INVALID OR UNENFORCEABLE PROVISION THERE WILL BE ADDED AUTOMATICALLY AS PART OF
THIS AGREEMENT A PROVISION AS SIMILAR IN TERMS TO SUCH INVALID OR UNENFORCEABLE
PROVISION AS MAY BE POSSIBLE AND BE LEGAL, VALID, AND ENFORCEABLE.

 

12.                                 GOVERNING LAW.  THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF KANSAS, WITHOUT GIVING EFFECT TO ANY CONFLICT-OF-LAWS,
RULE OR PRINCIPLE THAT MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

 

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13.                                 NOTICE.  ANY NOTICE REQUIRED OR PERMITTED
UNDER THIS AGREEMENT MUST BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN GIVEN
WHEN DELIVERED PERSONALLY, BY FACSIMILE, BY OVERNIGHT COURIER SERVICE, OR THREE
(3) BUSINESS DAYS AFTER BEING SENT BY MAIL, POSTAGE PREPAID, TO THE PARTIES AT
THE FOLLOWING ADDRESSES (OR TO THE ATTENTION OF ANOTHER PERSON OR ADDRESS AS A
PARTY MAY PROVIDE BY NOTICE IN ACCORDANCE WITH THIS SECTION 13).

 

If to the Company:

 

Waddell & Reed Financial, Inc.

6300 Lamar Avenue

Overland Park, KS 66202

Facsimile:  (913) 236-2379

Attn:  General Counsel

 

If to Consultant:

 

Keith A. Tucker

3831 Turtle Creek Blvd. Unit 6H

Dallas, TX 75219

 

With a copy to:

 

Scott Price

Milbank

1 Chase Manhattan Plaza

New York, NY 10005

 

14.                                 ASSIGNMENT.  THE SERVICES TO BE PERFORMED
HEREUNDER ARE PERSONAL TO CONSULTANT AND MAY NOT BE ASSIGNED BY ANY ACT OR
OMISSION BY CONSULTANT, BY OPERATION OF LAW OR OTHERWISE.  WITHOUT THE CONSENT
OR PRIOR KNOWLEDGE OF CONSULTANT, THE COMPANY MAY ASSIGN THIS AGREEMENT TO ANY
AFFILIATE OR TO ANY PERSON OR ENTITY ACQUIRING ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S ASSETS, ITS AFFILIATES’ ASSETS, ITS BUSINESS OR ANY OF ITS AFFILIATES’
BUSINESS, WHETHER BY MERGER, ACQUISITION OR OTHERWISE, PROVIDED, HOWEVER, THAT
THE COMPANY SHALL REMAIN SECONDARILY LIABLE FOR ANY PAYMENTS DUE TO CONSULTANT
HEREUNDER.

 

15.                                 MULTIPLE ORIGINALS.  THIS AGREEMENT MAY BE
EXECUTED BY THE PARTIES IN SEPARATE COUNTERPARTS, EACH OF WHICH WHEN EXECUTED
AND DELIVERED IS AN ORIGINAL.  ALL COUNTERPARTS TOGETHER CONSTITUTE ONE
INSTRUMENT.

 

16.                                 HEADINGS.  THE HEADINGS OF THIS AGREEMENT
ARE FOR REFERENCE ONLY, AND DO NOT AFFECT THE INTERPRETATION OF THIS AGREEMENT.

 

17.                                 ATTORNEYS’ FEES.  IF ANY PARTY BRINGS AN
ACTION TO ENFORCE THIS AGREEMENT, THE PREVAILING PARTY WILL BE ENTITLED TO
RECOVER, IN ADDITION TO OTHER DAMAGES IT MAY BE ENTITLED TO, ITS REASONABLE
ATTORNEYS’ FEES, COSTS, AND NECESSARY DISBURSEMENTS IN ADDITION TO ANY OTHER
RELIEF TO WHICH THAT PARTY MAY BE ENTITLED.  A PARTY SHALL BE CONSIDERED THE
PREVAILING PARTY IF (A) IT INITIATED THE ACTION AND SUBSTANTIALLY OBTAINS THE
RELIEF IT SOUGHT, EITHER THROUGH A JUDGMENT OR

 

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ARBITRATION AWARD OR THE LOSING PARTY’S VOLUNTARY ACTION BEFORE ARBITRATION,
TRIAL OR JUDGMENT, (B) THE OTHER PARTY WITHDRAWS ITS ACTION WITHOUT
SUBSTANTIALLY OBTAINING THE RELIEF IT SOUGHT, OR (C) SUCH PARTY DID NOT INITIATE
THE ACTION AND JUDGMENT IS ENTERED INTO FOR ANY PARTY, BUT WITHOUT SUBSTANTIALLY
GRANTING THE RELIEF SOUGHT BY THE INITIATING PARTY OR GRANTING MORE SUBSTANTIAL
RELIEF TO THE NON-INITIATING PARTY WITH RESPECT TO ANY COUNTERCLAIM ASSERTED BY
THE NON-INITIATING PARTY IN CONNECTION WITH SUCH ACTION.

 

18.                               ARBITRATION.  SUBJECT TO SECTION 10, TO THE
EXTENT THAT THE PARTIES HERETO ARE UNABLE TO RESOLVE THEIR DISPUTES OR
CONTROVERSIES ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE PERFORMANCE,
BREACH, VALIDITY, INTERPRETATION OR ENFORCEMENT OF THIS AGREEMENT, CONSULTANT’S
SERVICES AND/OR TERMINATION, INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS
OR CAUSES OF ACTION WHICH MAY ARISE OR BE ASSERTED UNDER FEDERAL, STATE OR LOCAL
REGULATORY, STATUTORY OR COMMON LAW, WRONGFUL DISCHARGE, AND TORT (SUCH AS
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS, LIBEL, SLANDER, INVASION OF
PRIVACY OR PERSONAL INJURY), THROUGH DISCUSSION AND NEGOTIATION, ALL SUCH
DISPUTES AND CONTROVERSIES WILL BE RESOLVED BY BINDING ARBITRATION IN ACCORDANCE
WITH TITLE 9 OF THE U.S. CODE (UNITED STATES ARBITRATION ACT) AND THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION (THE “AAA”), AND
JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION THEREOF.  A PARTY HERETO MAY INITIATE ARBITRATION BY SENDING
WRITTEN NOTICE OF ITS INTENTION TO ARBITRATE TO THE OTHER PARTIES HERETO AND TO
THE AAA OFFICE LOCATED IN CHICAGO, ILLINOIS.  SUCH WRITTEN NOTICE WILL CONTAIN A
DESCRIPTION OF THE DISPUTE AND THE REMEDY SOUGHT.  THE ARBITRATION WILL BE
CONDUCTED AT THE OFFICES OF THE AAA IN CHICAGO, ILLINOIS BEFORE AN INDEPENDENT
AND IMPARTIAL ARBITRATOR ACCEPTABLE TO THE PARTIES HERETO.  IN THE EVENT THAT
THE PARTIES HAVE NOT MUTUALLY AGREED ON AN ACCEPTABLE ARBITRATOR WITHIN THIRTY
(30) DAYS AFTER THE DEMAND FOR ARBITRATION IS FILED, THE ARBITRATOR SHALL BE
APPOINTED IN THE MANNER PROVIDED BY SECTION 13 OF THE COMMERCIAL ARBITRATION
RULES OF THE AAA.  THE DECISION OF THE ARBITRATOR WILL BE FINAL AND BINDING ON
THE PARTIES HERETO AND THEIR SUCCESSORS’ AND ASSIGNEES.  THE PARTIES HERETO
INTEND THAT THIS AGREEMENT TO ARBITRATE BE IRREVOCABLE.

 

IN PROVIDING A REMEDY UNDER THIS SECTION 18, THE PARTIES AGREE THAT THE
ARBITRATOR SHALL NOT AWARD PUNITIVE DAMAGES AGAINST ANY PARTY, AND THE PARTIES
HEREBY MUTUALLY WAIVE ANY CLAIM FOR PUNITIVE DAMAGES, WHICH MAY BE AWARDED IN
CONNECTION WITH ANY DISPUTE SUBJECT TO ARBITRATION UNDER THIS AGREEMENT.

 

19.                                 GENERAL RELEASE.   IN CONSIDERATION OF THIS
AGREEMENT, THE SERVICES TO BE PROVIDED AND THE PAYMENTS TO BE MADE HEREUNDER,
CONSULTANT AND THE COMPANY EACH SHALL EXECUTE AND DELIVER TO EACH OTHER A MUTUAL
RELEASE, IN THE FORM ATTACHED HERETO.  IN THE EVENT THAT CONSULTANT REVOKES THE
MUTUAL RELEASE BEFORE THE REVOCATION EXPIRATION DATE, AS PERMITTED THEREIN, THIS
AGREEMENT SHALL BECOME NULL AND VOID.

 

20.                                 ENTIRE AGREEMENT.  THIS AGREEMENT, TOGETHER
WITH THE GENERAL RELEASE EXECUTED BY CONSULTANT, EMBODIES THE COMPLETE AGREEMENT
OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY
PRIOR WRITTEN, OR PRIOR AND CONTEMPORANEOUS ORAL UNDERSTANDINGS OR AGREEMENTS
BETWEEN THE PARTIES THAT ARE RELATED IN ANY WAY TO THE SUBJECT MATTER HEREOF. 
THIS AGREEMENT MAY BE AMENDED ONLY IN WRITING EXECUTED BY THE COMPANY AND
CONSULTANT.

 

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IN WITNESS WHEREOF, Consultant and the Company have each placed their signatures
as of May 25, 2005.

 

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

By:

/s/ Henry J. Herrmann

 

 

Name:  Henry J. Herrmann

 

Title:  President

 

 

 

 

 

CONSULTANT

 

 

 

 

 

/s/ Keith A. Tucker

 

 

Keith A. Tucker

 

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