Exhibit 10.3


 


THIRD AMENDMENT TO THE


WADDELL & REED FINANCIAL, INC.


1998 NON-EMPLOYEE DIRECTOR STOCK AWARD PLAN


 


 


Waddell
& Reed Financial, Inc., a Delaware corporation (the “Company”), previously
established the Waddell & Reed Financial, Inc. 1998 Non-Employee Director
Stock Award Plan, as amended (the “Plan”). 
Pursuant to Section 8 of the Plan, the Board of Directors of the Company
reserves the right to amend the Plan. 
Pursuant to the powers reserved in the Plan, the Plan is amended
effective as of October 14, 2004 as follows.


 


1.             Article 9 of the Plan is amended in
its entirety to read as follows:


 


“ARTICLE
9

Adjustment Provisions


 


Section 9.1  Change
in Corporate Structure Affecting Shares. 
If the Company shall at any time change the number of issued Shares
without new consideration to the Company (such as by stock dividend, stock
split, recapitalization, reorganization, exchange of shares, liquidation,
combination or other change in corporate structure affecting the Shares) or
make a distribution of cash or property which has a substantial impact on the
value of issued Shares, the total number of Shares reserved for issuance under
the Plan shall be appropriately adjusted and the number of Shares covered by
each outstanding Award and the exercise price per Share under each outstanding
Award and the number of Shares underlying Awards shall be adjusted so that the
aggregate consideration payable to the Company and the value of each such Award
shall not be changed.  In addition, the
aggregate number of Shares available for issuance to any Participant pursuant
to Section 6.2 shall be adjusted to take into account any change in corporate
structure affecting Shares.  Adjustments
pursuant to this Section 9.1 shall not be made to the extent the Plan has been
amended to reflect any adjustment contemplated in this Section 9.1.


 


Section 9.2  Certain
Reorganizations.  Notwithstanding any other
provision of the Plan, and without affecting the number of Shares reserved or
available hereunder, the Committee shall authorize the issuance, continuation
or assumption of outstanding Awards or provide for other equitable adjustments
after changes in the Shares resulting from any merger, consolidation, sale of
assets, acquisition of property or stock, recapitalization, reorganization or
similar occurrence in which the Company is the continuing or surviving
corporation, upon such terms and conditions as it may deem necessary to
preserve Awardees’ rights under the Plan.


 


Section 9.3  Acquisitions. 
In the case of any sale of assets, merger, consolidation or combination
of the Company with or into another corporation other than a transaction in
which the Company is the continuing or surviving 


 





















 


corporation
and which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property, or any combination
thereof (an ‘Acquisition’), any Awardee who holds an outstanding Award shall
have the right (subject to the provisions of the Plan and any limitation
applicable to the Award) thereafter and during the term of the Award, to
receive upon exercise or vesting, in the case of Restricted Stock, thereof the
Acquisition Consideration (as defined below) receivable upon the Acquisition by
an Awardee of the number of Shares which would have been obtained upon exercise
of the Option or portion thereof or vesting of all or a portion of the
Restricted Stock Award in question, as the case may be, immediately prior to
the Acquisition; provided, however, the Committee, in its sole discretion, may
settle the value of any Award on the basis of the Acquisition Consideration as
of the date the Acquisition occurs, or such other date as the Committee may
determine prior to the Acquisition, in cash, stock or other property, or any
combination thereof.  To the extent any
such settlement made in the sole discretion of the Committee is made in stock,
such shares of stock will be deemed to have been distributed under the Plan.
The term ‘Acquisition Consideration’ shall mean the kind and amount of shares
of the surviving or new corporation, cash, securities, evidence of
indebtedness, other property or any combination thereof receivable in respect
of one Share of the Company upon consummation of an Acquisition.”


 


2.
            Except as hereby amended, the Plan shall remain
in full force and effect.