Exhibit 10.26

 

FIRST AMENDMENT TO THE CHANGE IN CONTROL

EMPLOYMENT AGREEMENT

 

This Amendment to the Change in Control Employment Agreement (the "Amendment")
is made and entered into this 17th day of December, 2008 by and between
Waddell & Reed Financial, Inc., a Delaware corporation (the "Company"), and
Henry J. Herrmann (the "Executive").

 

WITNESSETH:

 

WHEREAS, the Company and the Executive are parties to a certain Change in
Control Employment Agreement dated as of December 14, 2001, (the "Agreement");
and

 

WHEREAS, the Company and the Executive have agreed to make certain modifications
to the Agreement to comply with the provisions of section 409A of the Internal
Revenue Code of 1986, as amended (the "Code").

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth below, to avoid adverse tax consequences under section 409A of the Code
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

 

1.               Section 6(f) of the Agreement is hereby amended in its entirety
to read as follows:

 

(f)            the Company shall, at its sole expense as incurred, provide you
with outplacement services, the scope and provider of which shall be selected by
you in your sole discretion, provided that such outplacement services shall not
be provided beyond the last day of the second year following the year that
includes your Date of Termination.

 

2.               A new sentence is hereby added to the end of Section 13 to read
as follows:

 

The terms "terminate," "termination," "termination of employment," and similar
terms used herein are intended to mean a termination of employment that
constitutes the Executive's "Separation from Service" as such term is defined in
Treasury Regulation Section 1.409A-1(h).

 

3.               A new Section 17 is hereby added to the Agreement to read as
follows:

 

17.  SECTION 409A.  The terms of this Agreement shall be construed in accordance
with Section 409A of the Code.

 

(a)           If the Company is publicly traded on an established securities
market or otherwise on the Executive's Date of Termination, any payments payable
pursuant to Sections 6(b), (c), and (e) shall not be distributed prior to the
day following the six month anniversary of the Executive's Date of Termination
if Executive is deemed a "specified employee" as defined in Treasury Regulation
Section 1.409A-1(i).  Any payments delayed pursuant to this provision will be
paid in a lump sum on the day following the six

 

 

month anniversary of the Executive's Date of Termination (or, if earlier, the
date of death of the "specified employee").

 

(b)           Anything herein to the contrary notwithstanding, any payments,
reimbursements or tax gross-up payments payable pursuant to this Agreement shall
be paid in accordance with the requirements of Treasury Regulation Sections
1.409A-3(i)(1)(iv) and (v).

 

IN WITNESS WHEREOF, the Company and the Executive have executed this Amendment
as of the date first written above.

 

 

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

By:

/s/ Daniel P. Connealy

 

 

Daniel P. Connealy

 

 

Senior Vice President and Chief
Financial Officer

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Henry J. Herrmann

 

Henry J. Herrmann

 

 

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