Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.9    
  

FIRST AMENDMENT TO THE

WADDELL & REED FINANCIAL, INC.

1998 EXECUTIVE DEFERRED COMPENSATION STOCK OPTION PLAN  

        Waddell &
Reed Financial, Inc., a Delaware corporation (the "Company") previously established the Waddell & Reed Financial, Inc. 1998 Executive Deferred
Compensation Stock Option Plan (the "Plan"). Pursuant to Article 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 hereby amended effective December 12, 2002 (the "Effective Date"). 

1.    The
Plan shall be renamed the "Waddell & Reed Financial, Inc. 1998 Executive Deferred Compensation Stock Award Plan" and all references in the Plan to the
"Waddell & Reed Financial, Inc. 1998 Executive Deferred Compensation Stock Option Plan" should be amended to read the "Waddell & Reed Financial, Inc. 1998 Executive
Deferred Compensation Stock Award Plan." 

2.    The
following definitions are hereby added to Section 2.1 of the Plan to read as follows: 

        "Award"
means the grant of an Option or Restricted Stock to an Awardee pursuant to the terms, conditions and limitations that the Committee may establish in order to fulfill the
objectives of the Plan. 

        "Awardee"
means an Eligible Executive to whom an outstanding Award has been granted or, in the event of such Eligible Executive's death prior to the expiration of an Option or the lapse
of restrictions encumbering Restricted Stock, such Eligible Executive's Beneficiary. 

        "Award
Notice" means a written award notice to an Eligible Executive from the Company evidencing an Option or a Restricted Stock Award, as applicable. 

        "Restricted
Stock" means Shares granted to a Participant under Article 6 hereof, that are subject to certain restrictions and/or to a risk of forfeiture. 

3.    Except
as provided in this First Amendment, the occurrences within the Plan of the defined term "Option" or "Options" shall be replaced with the defined term "Award" or "Awards," the
occurrences within the Plan of the defined term "Stock Option Award Notice" shall be replaced with the defined term "Award Notice," and the occurrences within the Plan of the defined term "Optionee"
shall be replaced with the defined term "Awardee;" provided, however, that the definitions of "Option" and "Optionee" in Section 2.1 of the Plan shall remain unchanged; and further provided
that Section 4.3 of the Plan shall remain unchanged. 

4.    Article 6
of the Plan is amended in its entirety to read as follows: 

        ARTICLE
6.    Awards.    Each Eligible Executive shall be granted Awards subject to the following terms and conditions: 

Section 6.1    Election to Receive Awards.

                (a)    Awards Converted from Deferred Salary.    During the same calendar quarter with respect to which
a Participant deferred Salary into the Plan, the Participant shall have the right to convert some or all of his or her Interest Account for Salary for such quarter or the previous quarter(s) of that
same calendar year into Awards pursuant to this Article 6. To make such election, the Participant must file with the Plan Administrator a written irrevocable Secondary Election Form for Salary
to receive Awards as of the date of the filing of such Secondary Election Form (the "Award Grant Date"). 

        Effective
January 1, 2003, a Participant shall have the right to convert some or all of his or her Interest Account for Salary for the first quarter of calendar year 2003 into
either Options or Restricted Stock. Notwithstanding the foregoing provisions of this Section 6.1(a), effective April 1, 

 

2003, a Participant will only be entitled to convert some or all of his or her Interest Account for Salary for such quarter or the previous quarter(s) of that same calendar year into Restricted
Stock. 

        (b)  Awards Converted from Deferred Bonus. At any time, but only one time, during the twelve-month period following the end of
a calendar year with respect to which a Participant deferred the Annual Bonus into the Plan, the Participant shall have the right to convert some or all of his or her Interest Account for Bonus for
such previous year into Awards pursuant to this Article 6. To make such election, the Participant must file with the Plan Administrator a written irrevocable Secondary Election Form for Bonus
to receive Awards as of the date of the filing of such Secondary Election Form (the "Award Grant Date"). 

        Effective
January 1, 2003, a Participant shall have the right to convert some or all of his or her Interest Account for Bonus for the previous year into either Options or
Restricted Stock. Notwithstanding the foregoing provisions of this Section 6.1(b), effective January 1, 2004, a Participant will only be entitled to convert some or all of his or her
Interest Account for Bonus for the previous year into Restricted Stock. 

        (c)  Award Converted from Bonus at Committee Direction. The Committee, in its sole discretion, may direct that all or any
portion of the Annual Bonus that would otherwise be payable in cash to a Participant, be converted to Awards pursuant to this Article 6. 

        (d)  Exercise Price of Awards. The exercise price per Share, if any, under each Award granted pursuant to this
Article 6 shall be indicated in the Award Notice. The exercise price per Share under each Option granted pursuant to this Article 6 shall, at the election of the Optionee as indicated on
the Secondary Election Form, be either 100% of the Fair Market Value per Share on the Award Grant Date, or a lesser percentage (but not less than 75%) of the Fair Market Value per Share on the Award
Grant Date, such lesser percentage to be determined by the Committee from time to time. Such Secondary Election Form shall indicate the percentage of such Options to be granted at each Exercise Price,
which choice may affect the number of Options to be received pursuant to Section 6.2. Notwithstanding the foregoing, the exercise price under any Option granted to a Covered Employee shall be
100% of the Fair Market Value per share on the Award Grant Date. 

Section 6.2    Number of Shares Subject to Awards. 

        (a)    Number of Options.    The number of Shares subject to an Option granted pursuant to this Article 6 shall
be the number of whole Shares equal to A divided by B, where: 

	A=	the dollar amount which the Eligible Executive has elected to convert to Options pursuant to Section 6.1; and
	

B=	

the per share value of an Option on the Award Grant Date, as determined by the Committee using an option valuation model selected by the Committee in its discretion (such value to be expressed as a percentage of the Fair Market Value per Share on the
Award Grant Date).

2

 

                In
determining the number of Shares subject to an Option, (i) the Committee may designate the assumptions to be used in the selected option valuation model, and
(ii) any fraction of a Share will be rounded down to the next whole number of Shares. The maximum number of shares with respect to which Options may be granted to a Covered Employee in any
calendar year is 750,000. 

        (b)  Number of Shares of Restricted Stock.    The number of Shares subject to an Award of Restricted Stock granted
pursuant to this Article 6 shall be the number of whole Shares equal to A divided by B, where: 

	A=	the dollar amount which the Eligible Executive has elected to convert to Restricted Stock pursuant to Section 6.1; and
	B=	the Fair Market Value of a Share on the Award Grant Date.

                In
determining the number of Shares subject to an Award of Restricted Stock, any fraction of a Share will be rounded down to the next whole number of Shares. 

Section 6.3 Term of Awards. 

        (a)  Exercise of Options.    Each Option shall be first exercisable, cumulatively, as to 10% commencing on each of
the first through tenth anniversaries of the Award Grant Date. Notwithstanding the foregoing, the exercisability of any Option held by a Covered Employee shall be deferred to the extent that the
Committee, in its discretion, determines that current exercise of the Option would cause loss of the Company's tax deduction pursuant to Section 162(m) of the Internal Revenue Code. In no event
shall such deferral continue beyond the first day of the calendar year after the Optionee ceases to be a Covered Employee. An Optionee's death, Disability, retirement or other termination of
employment shall not shorten the term of any outstanding Option. In no event shall the period of time over which the Option may be exercised exceed the longer of (i) eleven years from the Award
Grant Date, or (ii) the thirtieth (30th) day of the calendar year immediately following the year in which an Optionee ceased to be a Covered Employee. An Option, or portion thereof, may be
exercised in whole or in part only with respect to whole Shares. Options may be exercised in whole or in part at any time during the option period, by giving written notice of exercise to the Company
specifying the number of shares to be purchased, accompanied by payment in full of the purchase price, in cash, by check or such other instrument as may be acceptable to the Committee (including
instruments providing for "cashless exercise"). Payment in full or in part may also be made in the form of unrestricted Shares already owned by the Optionee or restricted stock or deferred stock
subject to an award under the Waddell & Reed Financial, Inc. 1998 Stock Incentive Plan (based, in each case, on the Fair Market Value of the Shares on the date the Option is exercised,
as determined by the Committee). If payment of the option exercise price of an Option is made in whole or in part in the form of restricted stock or deferred stock, the Shares received upon the
exercise of such Option shall be restricted or deferred, as the case may be, in accordance with the original term of the restricted stock award or deferred stock award in question, except that such
restrictions or deferral provisions shall apply to only the number of such Shares equal to the number of shares of restricted stock or deferred stock surrendered upon the exercise of such Option. No
Shares shall be issued until full payment therefor has been made. An Optionee shall have rights to dividends or other rights of a stockholder with respect to Shares subject to the Option when the
Optionee has given written notice of exercise and has paid in full for such Shares. 

        (b)  Terms of Restricted Stock Awards.

                (i)    Grant and Restrictions.    Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances 

3

 

(including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the Award Grant Date or thereafter.
Except to the extent restricted under the terms of the Plan and any Award Notice relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder,
including the right to vote the Restricted Stock and the right to receive dividends thereon. During the restricted period applicable to the Restricted Stock, subject to Section 6.6 below, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant. 

                (ii)    Forfeiture.    Except as otherwise determined by the Committee, upon termination of employment
during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company. 

                (iii)    Book-Entry Accounts; Certificates for Stock.    An account for each Participant who
is awarded Restricted Stock shall be opened with the Company's transfer agent or such other administrator designated by the Committee for the deposit of the shares of Restricted Stock subject to the
Award, or, in the sole discretion of the Committee, each Participant may be issued a stock certificate registered in the name of the Participant with respect to such shares of Restricted Stock. The
Committee shall specify that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company or a transfer agent
retain physical possession of the certificates, and that the Participant deliver a stock power to the Company or transfer agent, as applicable, endorsed in blank, relating to the Restricted Stock.
Such legend shall be substantially in the following form: 

"The
transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Waddell & Reed Financial, Inc.
1998 Executive Deferred Compensation Stock Award Plan and a Restricted Stock Award Agreement entered into between the registered owner and Waddell & Reed Financial, Inc. Copies of the
Plan and Agreement are on file in the offices of Waddell & Reed Financial, Inc., 6300 Lamar Avenue, Overland Park, Kansas 66202." 

                (iv)    Dividends and Splits.    Unless otherwise determined by the Committee, Shares distributed in
connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with
respect to which such Shares or other property has been distributed. 

        Section 6.4    Accelerated Exercisability and Lapse of Restrictions.    Notwithstanding the normal exercisability
schedule and
forfeiture provisions set forth in Sections 6.3(a) and 6.3(b)(ii) hereof, any and all outstanding Options shall become immediately exercisable and restrictions on any Award of Restricted Stock
shall lapse and the shares subject to such Award shall become nonforfeitable upon the first to occur of (a) the death of the Awardee, (b) the Disability of the Awardee, (c) the
occurrence of a Change in Control, (d) the unanimous determination by the Committee that a particular Option, Options, or Restricted Stock Award, in whole or in part, shall become fully
exercisable and nonforfeitable, or (e) as otherwise provided by the Committee by rule or regulation or in any Award agreement, or as determined in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole
or in part the forfeiture of Restricted Stock. Upon acceleration, an Option will remain exercisable for the remainder of its original term. 

         Section 6.5    Award Notice.    Each Award granted under the Plan shall be evidenced by an Award Notice which
shall be executed by an
authorized officer of the Company. Such Award Notice shall contain provisions regarding (a) the number of Shares subject to the Award, (b) the exercise price per Share, if any, of the
Award and the means of payment therefor, (c) the term of 

4

 

the Award, and (d) such other terms and conditions not inconsistent with the Plan as may be determined from time to time by the Committee. The Committee, in its discretion, may include in the
grant of any Option under the Plan, a "stock option restoration program" ("SORP") provision. Such provision shall provide, without limitation, that, if payment on exercise of an Option is made in the
form of Shares, and the exercise occurs on the Annual SORP Exercise Date, an additional Option ("SORP Option") will automatically be granted to the Optionee as of the date of exercise, having an
exercise price equal to 100% of the Fair Market Value of the Shares on the date of exercise of the prior Option, having a term of no more than the later of either (i) the original option period
for the exercised Option giving rise to the grant of the SORP option, not to exceed a maximum term of 10 years and two days from such date of exercise (subject to any forfeiture provision or
shorter limitation on exercise required under the Plan) or (ii) the thirtieth 30th day of the calendar year immediately following the year in which the Optionee ceases to be a Covered Employee,
having an initial exercise date no earlier than six months after the date of such exercise, and covering a number of shares equal to the number of Shares used to pay the exercise price of the Stock
Option, plus the number of shares (if any) withheld to cover income taxes and employment taxes (plus any selling commissions) on the exercise. "Annual SORP Exercise Date" shall mean August 1,
or if August 1 is not a trading day on the New York Stock Exchange, "Annual SORP Exercise Date" shall mean the next succeeding trading date. Notwithstanding the foregoing, the Committee may
delay the Annual SORP Exercise Date to the extent it determines necessary to comply with regulatory or administrative requirements. 

         Section 6.6    Transferability of Awards.    No Award shall be assignable or transferable by the Awardee;
provided, however, that an
Award Notice may provide that Options are transferable by will or the laws of descent and distribution; and provided, further, that the Committee may (but need not) permit other transfers of Awards
where the Committee concludes that such transferability (a) does not result in accelerated taxation, and (b) is otherwise appropriate and desirable, taking into account any state or
federal securities laws applicable to transferable Awards and the purposes of the Plan. 

	5.
	Article 7
of the Plan is amended in its entirety to read as follows: 

        ARTICLE
7.    Shares Subject to the Plan. 

        Section 7.1    Shares Subject to the Plan.    Subject to adjustment as provided in Article 9, the total
number of Shares
reserved and available for delivery in connection with Awards under the Plan shall not exceed 3,750,000 Shares. Shares delivered under the Plan may be newly issued Shares or previously issued and
reacquired Shares, and there are hereby reserved for issuance under the Plan 3,750,000 Shares. To the extent that Shares subject to an outstanding Award are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such Award or by reason of the delivery of Shares to pay all or a portion of the exercise price of an Award, then such Shares shall again be
available under the Plan, except that if such Shares could not again be available for Awards to a particular Participant under any applicable law or regulation, such shares shall be available
exclusively for Awards to Participants who are not subject to such limitation. 

        In
the case of Options exercised with payment in Shares under the "stock option restoration program" the number of Shares transferred by the Optionee in payment of the exercise price
plus the number of Shares withheld to cover income and employment taxes (plus any selling commissions) on such exercise will be netted against the number of Shares issued to the Optionee in the
exercise, and only the net number shall be charged against the 3,750,000 limitation set forth above. 

	6.
	Article 9
of the Plan is amended in its entirety to read as follows: 

5

 

        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 employee 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 by 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 a holder 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. 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. 

	7.
	Except
as hereby amended, the Plan shall remain in full force and effect. 

6

QuickLinks

Exhibit 10.9QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.11
  EXECUTION COPY    
  

TERMINATION AND REPLACEMENT

AGREEMENT  

        TERMINATION AND REPLACEMENT AGREEMENT (this "TR Agreement") dated as of October 11, 2002, among
Waddell & Reed Financial, Inc. (the "Borrower"), the financial institutions listed in Annex I hereto under the captions "Continuing
Lenders" (the "Continuing Lenders") and "Additional Lenders "(the "Additional Lenders", and together
with the Continuing Lenders, the "Lenders"), and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Administrative Agent (the
"Administrative Agent"). Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the New Credit Agreement (as
defined below). 

 
 

W I T N E S S E T H:    

        WHEREAS,
the Borrowers, the Continuing Lenders, certain other lenders (the "Exiting Lenders"), and the Administrative Agent are parties to
Credit Agreement, dated as of October 12, 2001 (as amended on February 28, 2002 and as otherwise amended, supplemented or otherwise modified from time to time, the
"Original Credit Agreement"); 

        WHEREAS,
the Original Credit Agreement is to be terminated as provided herein; and 

        WHEREAS,
the Continuing Lenders and the Additional Lenders are willing, subject to the terms and conditions of this TR Agreement, to replace the Original Credit Agreement with a new
credit agreement as provided herein. 

        NOW
THEREFORE, in consideration of the mutual agreements contained in this TR Agreement and other good and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows: 

        SECTION
1.    Termination and Replacement.    Subject to the conditions set forth in Section 2 hereof: 

        (i)    the
Original Credit Agreement, including all schedules and exhibits thereto, is hereby terminated, subject to the applicable provisions set forth therein as to the
survival of certain rights and obligations, and simultaneously replaced by a new credit agreement (the "New Credit Agreement") identical in form and
substance to the Original Credit Agreement, except as expressly set forth below. 

        (ii)  the
heading of the New Credit Agreement shall read as follows: 

        "THIS
CREDIT AGREEMENT is entered into as of October 11, 2002, among Waddell & Reed Financial, Inc. (the "Borrower"),
the several financial institutions from time to time party to this Agreement (collectively, the "Lenders" and each individually, a
"Lender"), and JPMORGAN CHASE BANK ("JPMorgan"), as administrative agent for the Lenders (herein in such
capacity, together with any successors thereto in such capacity, the "Administrative Agent")." 

        (iii)  Deleting
all references to the term "The Chase Manhattan Bank" and by substituting in lieu thereof the term "JPMorgan Chase Bank". 

        (iv)  Deleting
all references to the date "October 12, 2001" and by substituting in lieu thereof the date "October 11, 2002". 

        (v)  Section 1.01
of the New Credit Agreement is hereby amended by deleting therefrom the definitions of the following defined terms in their entirety and substituting
in lieu thereof the following definitions: 

        "Applicable Rate" means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the facility fees payable
hereunder, as the case may be, the applicable rate per 

annum determined pursuant to the Pricing Grid attached hereto as Annex A; provided that, in the case of the Term Loans, each of such rates payable
shall be increased by the rate of 0.25% per annum. 

        "Commitment" means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and Term Loans hereunder, expressed
as an amount representing the maximum aggregate outstanding principal amount of such Lender's Revolving Loans and Term Loans hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09, (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04 and (c) increased from time to
time pursuant to Section 2.20. The initial amount of each Lender's
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable, and the initial aggregate amount of
the Commitments of the Lenders (as set forth on Schedule 2.01) is $200,000,000. 

        "Revolving Credit Termination Date" means October 10, 2003 or such earlier date as the Commitments shall terminate pursuant to the
terms hereof (or, if such day is not a Business Day, the next preceding Business Day). 

        (vi)  Section 2.12(b)
of the New Credit Agreement is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following language: 

        (b)  Prior
to conversion of Revolving Loans into Term Loans pursuant to Section 2.04, the Borrower agrees to pay to the Administrative Agent for the account of each
Lender a utilization fee equal to (i) 0.125% per annum for each day on which the Commitment Utilization Percentage exceeds 25%, which fee shall accrue on the daily amount of such Lender's
outstanding Loans for each Excess Utilization Day during the period from and including the day on which the Commitment Utilization Percentage exceeds 25% to but excluding the day on which the
Commitment Utilization Percentage no longer exceeds 25% and (ii) 0.250% per annum for each day on which the Commitment Utilization Percentage exceeds 50%, which fee shall accrue on the daily
amount of such Lender's outstanding Loans for each Excess Utilization Day during the period from and including the day on which the Commitment Utilization Percentage exceeds 50% to but excluding the
day on which the Commitment Utilization Percentage no longer exceeds 50%. Accrued utilization fees shall be payable in arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof; provided that any utilization fees accruing after the date on which the Commitments
terminate shall be payable on demand. All utilization fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). 

      (vii)  Section 3.04
of the New Credit Agreement is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following language: 

        SECTION
3.04.    Financial Condition; No Material Adverse Effect.    (a) The Borrower has heretofore furnished
to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended 2000 and 2001, reported on by KPMG LLP,
independent public accountants, and (ii) as of and for the fiscal quarters and the portion of the fiscal year ended March 31, 2002 and June 30, 2002, certified by its principal
financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries
as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in
clause (ii) above. The Borrower and its Subsidiaries do not have any material Guarantees, contingent liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other 

obligation in respect of derivatives, that are not reflected or disclosed in the most recent financial statements referred to in this paragraph. 

        (b)  Since
December 31, 2001, there has been no event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect. 

      (viii)  Annex
A of the New Credit Agreement is hereby amended by replacing such annex in its entirety with Annex I-A attached hereto. 

        (ix)  Schedule 2.01
of the New Credit Agreement is hereby amended by replacing such schedule in its entirety with Schedule 2.01 attached hereto. 

        (x)  Schedule 3.06
of the New Credit Agreement is hereby amended by replacing such schedule in its entirety with Schedule 3.06 attached hereto. 

        (xi)  Schedule 3.13
of the New Credit Agreement is hereby amended by replacing such schedule in its entirety with Schedule 3.13 attached hereto. 

        SECTION
2.    Conditions to Effectiveness.    This Amendment shall be effective on the date on which all of the
following conditions precedent have been satisfied (or waived in accordance with Section 9.02) (the "Effective Date"): 

          (i)  The
Administrative Agent (or its counsel) shall have received from each party hereto either (a) a counterpart of this TR Agreement signed on behalf of such party
or (b) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart
of this Agreement. 

        (ii)  The
Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of the
General Counsel of the Borrower, substantially in the form of Exhibit B, and covering such other matters relating to the Borrower, this Agreement or the Transactions as the Required Lenders
shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion. 

        (iii)  The
Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the authorization of the Transactions and any other legal matters relating to the Borrower, this Agreement or the Transactions, all in form
and substance satisfactory to the Administrative Agent and its counsel. 

        (iv)  The
Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02 without giving effect to the parenthetical set forth in
paragraph (a) of Section 4.02. 

        (v)  The
Administrative Agent shall have received evidence satisfactory to it that simultaneously with the making of the initial Loans on the Closing Date, the Borrower will
have repaid in full all amounts outstanding under the Original Credit Agreement and the commitments of the lenders under the Original Credit Agreement will have been terminated, and the Administrative
Agent shall have received the promissory notes issued under the Original Credit Agreement marked "cancelled". 

        (vi)  The
Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. 

      (vii)  All
governmental and third party approvals necessary in connection with the continuing operations of the Borrower and its Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have 

expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the financing contemplated hereby. 

      (viii)  The
Lenders shall have received (a) audited consolidated financial statements of the Borrower for the 2000 and 2001 fiscal years and (b) unaudited
interim consolidated financial statements of the Borrower for each quarterly period ended subsequent to the date of the latest applicable financial statements delivered pursuant to clause (a)
of this paragraph as to which such financial statements are available, and such financial statements shall not, in the reasonable judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower, as reflected in the financial statements or projections contained in the Confidential Information Memorandum. 

The
Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders
to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time,
on October 11, 2002
(and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time). 

        SECTION
3.    GOVERNING LAW.    THIS TR AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

        SECTION
4.    Execution in Counterparts.    This TR Agreement may be executed by one or more of the parties to this TR
Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this TR Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative Agent. 

        IN
WITNESS WHEREOF, the parties hereto have caused this TR Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year
first above written. 

	 	 	WADDELL & REED FINANCIAL, INC.
	

 	
 	

By:	
 	

/s/  KEITH A. TUCKER      
 Name: Keith A. Tucker

Title: Chairman of the Board and Chief

Executive Officer
	

 	
 	

JPMORGAN CHASE BANK (formerly known as

The Chase Manhattan Bank), individually and

as Administrative Agent
	

 	
 	

By:	
 	

/s/  ELISABETH H. SCHWABE      
 Name:

Title:
	

 	
 	

BANK OF AMERICA, N.A.
	

 	
 	

By:	
 	

/s/  ELIZABETH W. F. BISHOP      
 Name: Elizabeth W. F. Bishop

Title: Managing Director
	

 	
 	

FLEET NATIONAL BANK
	

 	
 	

By:	
 	

/s/  DAVID A. BOSSELAIT      
 Name: David A. Bosselait

Title: Director
	

 	
 	

THE BANK OF NEW YORK
	

 	
 	

By:	
 	

/s/  TIMOTHY J. SOMERS      
 Name: Timothy J. Somers

Title: Vice President
	

 	
 	

UMB BANK, N.A.
	

 	
 	

By:	
 	

/s/  DAVID A. PROFFITT      
 Name: David A. Proffitt

Title: Senior Vice President
	

 	
 	

ROYAL BANK OF SCOTLAND
	

 	
 	

By:	
 	

/s/  DIANE FERGUSON      
 Name: Diane Ferguson

Title: Senior Vice President

	

 	
 	

U.S. BANK, NATIONAL ASSOCIATION
	

 	
 	

By:	
 	

/s/  WOODY JOHNSON      
 Name: Woody Johnson

Title: Vice President
	

 	
 	

STATE STREET BANK AND TRUST COMPANY
	

 	
 	

By:	
 	

/s/  CHARLES A. GARRITY      
 Name: Charles A. Garrity

Title: Vice President

 
 

Annex I    
  

Continuing Lenders  

J.P.
Morgan Chase & Co.

Bank of America, N.A.

Fleet National Bank

The Bank of New York

UMB Bank, N.A.

Royal Bank of Scotland

State Street Bank and Trust Company 

New Lenders  

U.S.
Bank, National Association 

 
 

Annex I-A    
  

PRICING GRID  

	 
	 	Level 1
	 	Level 2
	 	Level 3
	 	Level 4
	 	Level 5

	S&P Rating:	 	A- or better	 	BBB+	 	BBB	 	BBB-	 	Less than BBB-
	

Moody's Rating:	
 	

A3 or better	
 	

Baa1	
 	

Baa2	
 	

Baa3	
 	

Less than Baa3
	

ABR Loans'

Applicable Margin	
 	

0%	
 	

0%	
 	

0%	
 	

0%	
 	

0%
	

Eurodollar Loans'

Applicable Margin	
 	

0.295%	
 	

0.400%	
 	

0.625%	
 	

0.850%	
 	

1.325%
	

Facility Fee Rate	
 	

0.080%	
 	

0.100%	
 	

0.125%	
 	

0.150%	
 	

0.175%

        For
purposes of determining the Applicable Margins or the Facility Fee Rates, (i) in the event of a "split rating" (i.e., if the
Moody's Rating applicable to the Borrower at any time appears in the chart above in a different column from that in which the S&P Rating then applicable to the Borrower appears), the Applicable
Margins and the Facility Fee Rates will be based on the column which includes the higher rating (unless the higher rating is more than one rating level higher than the lower rating, in which case the
pricing shall be that applicable to the rating level which is one rating level lower than the higher rating level), (ii) if Moody's or S&P shall not have in effect a rating (other than because
such rating agency shall no longer be in the business of rating corporate debt obligations), then such rating agency will be deemed to have established a rating one rating level lower than the rating
of either Moody's or S&P, as the case may be, that remains in effect and (iii) the Applicable Margins and the Facility Fee Rates shall be subject to adjustment (upwards or downwards, as
appropriate), effective as of the date on which S&P or Moody's announces a rating change which results in a change in the Applicable Margins and the Facility Fee Rates. 

SCHEDULE 2.01  

COMMITMENTS  

	Lender
	 	Commitment

	J.P. Morgan Chase & Co.	 	$	32,000,000.00
	Bank of America, N.A.	 	$	32,000,000.00
	Fleet National Bank	 	$	32,000,000.00
	The Bank of New York	 	$	24,500,000.00
	UMB Bank, N.A.	 	$	24,500,000.00
	Royal Bank of Scotland	 	$	20,000,000.00
	U.S. Bank, National Association	 	$	20,000,000.00
	State Street Bank and Trust Company	 	$	15,000,000.00
	 	 	

	 	Total	 	$	200,000,000.00
	 	 	

SCHEDULE 3.06  

DISCLOSED MATTERS  

        In conjunction with previous public disclosure, management does not believe that any proceeding listed below, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect. 

	1.
	United
Investors Life Insurance Company v. Waddell & Reed Financial, Inc., et al., Circuit Court of Jefferson County, Alabama (CV 00-2720)

	2.
	NASD
Arbitration Number 97-03642, S. Sawtelle v. Waddell & Reed, Inc., et al. (MASTER, Consol. With 99-5327)

	3.
	United
Investors Life Insurance Company v. Waddell & Reed Financial, Inc. et. al., California Superior Court, Los Angeles County (BC25943), removed to United States
District Court of the Central District of California (CV 01-09684 TJH). 

SCHEDULE 3.13  

SUBSIDIARIES  

	Name
 
	 	Jurisdiction

of Incorporation

or Formation
	 	% of Capital Stock

Owned by Borrower(1)

	Waddell & Reed Financial Services, Inc.	 	Missouri	 	100%
	Waddell & Reed, Inc.	 	Delaware	 	100%
	Waddell & Reed Investment Management Company	 	Kansas	 	100%
	Waddell & Reed Services Company	 	Missouri	 	100%
	Waddell & Reed Development, Inc.	 	Delaware	 	100%
	Waddell & Reed Distributors, Inc.	 	Missouri	 	100%
	Waddell & Reed Leasing, Inc.	 	Missouri	 	100%
	W & R Insurance Agency, Inc.	 	Missouri	 	100%
	W & R Insurance Agency of Alabama, Inc.	 	Alabama	 	100%
	W & R Insurance Agency of Arkansas, Inc.	 	Arkansas	 	100%
	W & R Insurance Agency of Montana, Inc.	 	Montana	 	100%
	W & R Insurance Agency of Nevada, Inc.	 	Nevada	 	100%
	W & R Insurance Agency of Texas, Inc.	 	Texas	 	100%
	W & R Insurance Agency of Utah, Inc.	 	Utah	 	100%
	W & R Insurance Agency of Wyoming, Inc.	 	Wyoming	 	100%
	Unicon Agency, Inc.	 	New York	 	100%
	Unicon Insurance Agency of Massachusetts, Inc.	 	Massachusetts	 	100%
	Fiduciary Trust Company of New Hampshire	 	New Hampshire	 	100%
	Austin, Calvert & Flavin, Inc.	 	Texas	 	100%
	Encino GP Investment Partners LLC	 	Texas	 	100%
	Encino Partners L.P.	 	Texas	 	General Partner/4.10%
	Legend Group Holdings, LLC	 	Delaware	 	100%
	Legend Advisory Corporation	 	New York	 	100%
	Legend Equities Corporation	 	Delaware	 	100%
	Advisory Services Corporation	 	Nevada	 	100%
	The Legend Group, Inc.	 	Delaware	 	100%
	LEC Insurance Agency, Inc.	 	Texas	 	100%

	1
	Owned
directly or indirectly through one or more wholly-owned subsidiaries 

QuickLinks

Exhibit 10.11 EXECUTION COPY

W I T N E S S E T H

Annex I

Annex I-A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]