<PAGE>
As filed with the Securities and Exchange Commission on March 9, 1998
Registration No.33-________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
WADDELL & REED FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0261715
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6300 Lamar Avenue
Shawnee Mission, Kansas 66202
(913) 236-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
WADDELL & REED FINANCIAL, INC. SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
Sharon Pappas
Senior Vice President-General Counsel
Waddell & Reed, Inc.
6300 Lamar Avenue
Shawnee Mission, Kansas 66202
(913) 236-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================
Title of each class of Amount Proposed Proposed Amount of
securities to be to be Maximum Maximum Registration
registered Registered Offering Price Aggregate Fee
Per Share/1/ Offering Price
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Waddell & Reed 2,000,000 shares $26.50 $53,000,000 $15,635
Financial, Inc. Class A
Common Stock
=============================================================================================
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
________________
/1/ Calculated pursuant to Rule 457(c) and (h)(1) based upon the average
of the high and low prices reported for Waddell & Reed Financial, Inc. Class A
common stock in the consolidated reporting system on March 5, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Waddell & Reed Financial, Inc. (the "Registrant" or the "Company") and the
Waddell & Reed Financial, Inc. Savings and Investment Plan (the "Plan") hereby
incorporate by reference into this Registration Statement the following
documents:
(a)(1) The Plan's latest annual report on Form 11-K filed pursuant to
Section 15(d) of the Securities Exchange Act of 1934 for the most recent fiscal
year
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the
Registrant document referenced to in (a) above
(c) The description of Registrant's common stock contained in the Form
10 Registration Statement filed under the Securities and Exchange Act of 1934,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in the
Registration Statement and to be a part thereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The class of securities to be offered is registered under Section 12 of the
Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation provides that a director will not be
personally liable for monetary damages to the Company or its stockholders for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Company or its stockholders; (ii) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law; (iii) for paying a dividend or approving a stock
repurchase in violation of (S) 174 of the DGCL; or (iv) for any transaction from
which the director derived an improper personal benefit. Any amendment or
repeal of such provision will not adversely affect any right or protection of a
director existing under such provision for any act or omission occurring prior
to such amendment or repeal.
The Bylaws provide that the Company will indemnify any person who was or is
a party to any threatened, pending, or completed action, suit, or proceeding
because he or she is or was a director or officer of the Company, or is or was
serving at the request of the Company as a director or officer of another
corporation, partnership, or other enterprise. The Bylaws provide that this
indemnification will be from and against expenses, judgments, fines, and amounts
paid in settlement by the indemnitee. However, this indemnification will only
be provided if the indemnitee acted in good faith and in a manner he or she
reasonable believed to be in, or not opposed to, the best interests of the
Company.
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
(4)(a) Waddell & Reed Financial, Inc. Savings and Investment Plan
(23) Consent of KPMG Peat Marwick LLP to incorporation by reference of
their audit report of May 2, 1997 into the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and
Investment Plan
(24) Powers of attorney
The Registrant will submit the Plan and any amendments thereto to the
Internal Revenue Service ("IRS") in a timely manner and has made or will make
all changes required by the IRS in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
<PAGE>
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Overland Park, State of Kansas, on March 9, 1998.
WADDELL & REED FINANCIAL, INC.
By: /s/ Keith A. Tucker
------------------------------------
Keith A. Tucker
Chairman of the Board
/s/ Henry L. Herrmann
------------------------------------
Henry L. Herrmann
President, Chief Executive Officer, and
Director
(Principal Financial Officer)
/s/ Michael D. Strohm
------------------------------------
Michael D. Strohm
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
* *
__________________________________ _______________________________
David L. Boren, Director Joseph M. Farley, Director
* *
__________________________________ _______________________________
Louis T. Hagopian, Director Robert L. Hechler, Director
* *
__________________________________ _______________________________
Keith A. Tucker, Director Henry J. Herrmann, Director
<PAGE>
* *
__________________________________ _______________________________
Joseph L. Lanier, Jr. Harold T. McCormick, Director
* *
__________________________________ _______________________________
George J. Records, Director R. K. Richey, Director
By:/s/ Carol A. McCoy Date: March 9, 1998
--------------------------
Carol A. McCoy
Attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, the trustee has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Birmingham, State of
Alabama, on March 9, 1998.
WADDELL & REED FINANCIAL, INC. SAVINGS AND INVESTMENT PLAN
By: COMPASS BANK, as Trustee
By: /s/ Wayne M. Langevin
---------------------------
Wayne M. Langevin
Vice President
EXHIBIT 4(A)
<PAGE>
EXHIBIT 4(a)
THE
WADDELL & REED FINANCIAL, INC.
SAVINGS AND INVESTMENT PLAN
(AMENDED AND RESTATED AS OF MARCH 1, 1998)
<PAGE>
BACKGROUND
----------
Effective as of January 1, 1980, Torchmark Financial Services, Inc.,
which was a predecessor of United Investors Management Company, established a
defined contribution profit sharing plan (the "Plan"), which is intended to be
qualified pursuant to the provisions of the Internal Revenue Code of 1986, as
amended. The Plan is intended to provide eligible employees of the Company, and
those of any affiliate which adopts the Plan, with a supplemental source of
retirement income.
Effective as of January 1, 1989, the Plan was amended and restated to
comply with the Tax Reform Act of 1986. The Plan was further amended effective
January 1, 1993.
Effective as of March 1, 1998, WADDELL & REED FINANCIAL, INC. (the
"Company") and its affiliates assumed sole sponsorship of the Plan and made
certain amendments to the Plan as set forth herein.
The benefit under the Plan of any participant who terminates
employment shall be determined in accordance with the provisions of the Plan as
in effect on the date of such termination of employment.
i
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
BACKGROUND.............................................. i
TABLE OF CONTENTS....................................... ii
ARTICLE I - DEFINITIONS................................. I-1
Account..................................... I-1
Account Balance............................. I-1
ACP Compensation............................ I-1
Adjustment Factor........................... I-1
Administrative Committee.................... I-1
Administrator............................... I-2
Affiliate................................... I-2
Annual Addition............................. I-2
Annuity Contract............................ I-2
Average Contribution Percentage............. I-2
Basic Participant Contributions............. I-3
Beneficiary................................. I-3
Benefit Commencement Date................... I-3
Board of Directors.......................... I-3
Code........................................ I-3
Company..................................... I-3
Company Shares or Company Stock............. I-3
Company Stock Account....................... I-3
Compensation................................ I-4
Contribution Percentage..................... I-4
Defined Benefit Plan........................ I-4
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Defined Contribution Plan.................... I-5
Disability................................... I-5
Effective Date............................... I-5
Eligible Employee............................ I-5
Eligible Participant......................... I-5
Employee..................................... I-5
Employer..................................... I-5
Employer Contributions....................... I-6
Employer Contributions Subaccount............ I-6
Employment................................... I-6
Entry Date................................... I-6
ERISA........................................ I-6
Excess Aggregate Contributions............... I-6
Five-percent Owner........................... I-6
401(m) Contributions......................... I-6
Fully Vested Separation...................... I-6
HCE Compensation............................. I-7
Highly Compensated Employee.................. I-7
Hour of Service.............................. I-7
Investment................................... I-9
Investment Company........................... I-9
Investment Company Shares.................... I-9
Limitation Year.............................. I-9
Net Profits.................................. I-9
Non-Highly Compensated Employee.............. I-9
Non-Vested Separation........................ I-10
Normal Retirement Age........................ I-10
One Year Break in Service.................... I-10
Partially Vested Separation.................. I-10
Participant.................................. I-10
Participant Contributions.................... I-10
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Participant Contributions Subaccount.......... I-10
Participating Affiliate....................... I-11
Plan.......................................... I-11
Plan Year..................................... I-11
Qualified Joint and Survivor Annuity.......... I-11
Qualified Plan................................ I-11
Rollover Contribution......................... I-11
Spousal Consent............................... I-11
Spouse........................................ I-12
Supplementary Participant Contributions....... I-12
Surviving Spouse.............................. I-12
Torchmark Shares or Torchmark Stock........... I-12
Torchmark Stock Account....................... I-12
Trust or Trust Fund........................... I-12
Trust Agreement............................... I-12
Trustee....................................... I-12
Valuation Date................................ I-13
Valuation Period.............................. I-13
Vesting Service............................... I-13
Years of Service.............................. I-13
ARTICLE II - PARTICIPATION.............................. II-1
2.1 Admission as a Participant.............. II-1
2.2 Crediting of Service for Eligibility
Purposes................................ II-2
2.3 Termination of Participation............ II-2
2.4 Rollover Membership..................... II-2
ARTICLE III - CONTRIBUTIONS AND ACCOUNT ALLOCATIONS..... III-1
3.1 Employer Contributions.................. III-1
3.2 Participant Contributions............... III-1
3.3 Limits on 401(m) Contributions-ACP Test. III-2
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
3.4 Distribution of Excess Aggregate Contributions......... III-4
3.5 Rollover Contributions and Trust to Trust Transfers.... III-5
3.6 Establishing of Accounts............................... III-6
3.7 Allocation of Contributions and Forfeitures............ III-6
3.8 Limitation on Allocations.............................. III-7
3.9 Return of Employer Contributions under Special
Circumstances.......................................... III-7
ARTICLE IV - VESTING................................................... IV-1
4.1 Determination of Vesting............................... IV-1
4.2 Rules for Crediting Vesting Service.................... IV-1
4.3 Account Forfeitures.................................... IV-2
ARTICLE V - AMOUNT AND PAYMENT OF BENEFITS TO PARTICIPANTS............. V-1
5.1 Fully Vested Separation................................ V-1
5.2 Partially Vested Separation............................ V-1
5.3 Non-Vested Separation.................................. V-1
5.4 Participants Who Have Received Prior Distributions..... V-1
5.5 Benefit Commencement Date.............................. V-2
5.6 Participant Account Withdrawals........................ V-3
ARTICLE VI - FORMS OF PAYMENT OF ACCOUNTS.............................. VI-1
6.1 Methods of Distribution................................ VI-1
6.2 Election of Optional Forms............................. VI-3
6.3 Change in Form or Timing of Benefit Payments........... VI-4
6.4 Direct Rollovers....................................... VI-4
ARTICLE VII - DEATH BENEFITS........................................... VII-1
7.1 Payment of Account Balances............................ VII-1
7.2 Beneficiaries.......................................... VII-2
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII - FIDUCIARIES............................................. VIII-1
8.1 Named Fiduciaries...................................... VIII-1
8.2 Employment of Advisers................................. VIII-1
8.3 Multiple Fiduciary Capacities.......................... VIII-1
8.4 Reliance............................................... VIII-2
8.5 Scope of Authority and Responsibility.................. VIII-2
ARTICLE IX - TRUSTEE................................................... IX-1
9.1 Trust Agreement........................................ IX-1
9.2 Assets in Trust........................................ IX-1
ARTICLE X - ADMINISTRATIVE COMMITTEE................................... X-1
10.1 Appointment and Removal of Administrative Committee.... X-1
10.2 Officers of Administrative Committee................... X-1
10.3 Action by Administrative Committee..................... X-1
10.4 Rules and Regulations.................................. X-1
10.5 Powers................................................. X-2
10.6 Information from Participants.......................... X-2
10.7 Reports................................................ X-3
10.8 Authority to Act....................................... X-3
10.9 Liability for Acts..................................... X-3
10.10 Compensation and Expenses.............................. X-3
10.11 Indemnity.............................................. X-3
10.12 Denied Claims.......................................... X-4
ARTICLE XI - INVESTMENT OF CONTRIBUTIONS; MANAGEMENT OF ACCOUNTS....... XI-1
11.1 Initial Investment Election............................ XI-1
11.2 Change in Investment Election for Contributions........ XI-2
11.3 Transfer of Investment Accounts........................ XI-2
11.4 Reinvestment........................................... XI-3
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
11.5 Voting of Shares of Investments.................... XI-4
11.6 Valuation of Accounts.............................. XI-4
11.7 Distributions or Withdrawals....................... XI-5
ARTICLE XII - PLAN AMENDMENT OR TERMINATION........................ XII-1
12.1 Plan Amendment or Termination...................... XII-1
12.2 Limitations on Plan Amendment...................... XII-1
12.3 Right of Company to Terminate Plan or Discontinue
Contributions...................................... XII-2
12.4 Effect of Partial or Complete Termination or
Complete Discontinuance of Contributions........... XII-2
ARTICLE XIII - MISCELLANEOUS PROVISIONS............................ XIII-1
13.1 Exclusive Benefit of Participants.................. XIII-1
13.2 Plan Not a Contract of Employment.................. XIII-1
13.3 Source of Benefits................................. XIII-1
13.4 Benefits Not Assignable............................ XIII-1
13.5 Domestic Relations Orders.......................... XIII-2
13.6 Benefits Payable to Minors, Incompetents and Others XIII-2
13.7 Merger or Transfer of Assets....................... XIII-2
13.8 Participation in the Plan by an Affiliate.......... XIII-3
13.9 Action by Employer................................. XIII-3
13.10 Provision of Information........................... XIII-3
13.11 Controlling Law.................................... XIII-3
13.12 Conditional Restatement............................ XIII-4
13.13 Rules of Construction.............................. XIII-4
APPENDIX A - TOP-HEAVY PROVISIONS..................................Appendix-1
</TABLE>
vii
<PAGE>
ARTICLE I - DEFINITIONS
Each of the following terms shall have the meaning set forth in this
Article I for purposes of this Plan and any amendments thereto:
ACCOUNT: A separate account for each Participant consisting of an
Employer Contributions Subaccount and a Participant Contributions Subaccount, as
the case may be.
ACCOUNT BALANCE: The value of an Account or Subaccount determined as
of the applicable Valuation Date.
ACP COMPENSATION: All remuneration paid by an Employer to an Eligible
Participant during the Plan Year, which is required to be reported as wages on
such Eligible Participant's Form W-2, including amounts which were previously
deferred pursuant to an unfunded non-qualified plan and which are currently
includable in the Employee's gross income; or such other compensation as
determined by the Administrator in accordance with applicable law. For each
Plan Year the Administrator shall determine whether or not ACP Compensation
shall include amounts which are not currently includable in the Eligible
Participant's gross income by reason of the application of Code (S) 125, 401(k),
402(h)(1)(B), or 403(b). Notwithstanding any other provision of this
definition, the ACP Compensation of an Eligible Participant for any Plan Year
beginning after December 31, 1988 shall not exceed $200,000 multiplied by the
Adjustment Factor in effect for the Plan Year pursuant to Code (S) 401(a)(17),
or such other limit as may be established from time to time pursuant to the
provisions of Code (S) 401(a)(17).
ADJUSTMENT FACTOR: The cost of living adjustment factor prescribed by
the Secretary of the Treasury under Code (S) 415(d) for years beginning after
December 31, 1987, as applied to such items and in such manner as the Secretary
shall provide.
ADMINISTRATIVE COMMITTEE: The committee appointed by the Board
pursuant to, and having the responsibilities specified in, Article X of the
Plan.
I-1
<PAGE>
ADMINISTRATOR: The Company or committee appointed by the Board of
Directors pursuant to, and having the responsibilities specified in, Article X
of the Plan.
AFFILIATE: Any corporation or unincorporated trade or business (other
than the Company) while it is:
(a) a member of a "controlled group of corporations" (within the
meaning of Code (S) 414(b)) of which the Company is a member;
(b) a trade or business under "common control" (within the meaning of
Code (S) 414(c)) with the Company;
(c) a member of an "affiliated service group" (within the meaning of
Code (S) 414(m)) which includes the Company; or
(d) any other entity required to be aggregated with the Company under
Code (S) 414(o).
ANNUAL ADDITION: For each Participant, the sum of the following
amounts credited to the Participant's Account for the Limitation Year:
(i) Company or Affiliate contributions;
(ii) Employee contributions;
(iii) forfeitures; and
(iv) amounts described in Code (S) 415(l)(1) and 419A(d)(2).
Notwithstanding the foregoing, Annual Addition shall not include amounts
attributable to Rollover Contributions or trust to trust transfers.
ANNUITY CONTRACT: An individual or group annuity contract, issued by
an insurance company, providing periodic benefits, whether fixed, variable or
both, the benefits or value of which a Participant or Beneficiary cannot
transfer, sell, assign, discount, or pledge as collateral for a loan or as
security for the performance of an obligation, or for any other purpose to any
person other than the issuer thereof.
AVERAGE CONTRIBUTION PERCENTAGE: The average (expressed as a
percentage) of the Contribution Percentages of the Eligible Participants in a
group, including those Eligible
I-2
<PAGE>
Participants whose Contribution Percentage is zero.
BASIC PARTICIPANT CONTRIBUTIONS: The contributions made to the Plan
by a Participant pursuant to Section 3.2.1.
BENEFICIARY: A person other than a Participant entitled to receive
any payment of benefits pursuant to Article VII.
BENEFIT COMMENCEMENT DATE: The date, determined under Section 5.5, as
of which a Participant or a Beneficiary receives or begins to receive, as the
case may be, payment of his benefits under the Plan.
BOARD OF DIRECTORS: The Board of Directors of the Company.
CODE: The Internal Revenue Code of 1986, as now in effect or as
amended from time to time. A reference to a specific provision of the Code
shall include such provision and any applicable regulation pertaining thereto.
COMPANY: Waddell & Reed Financial, Inc., or any successor thereto by
consolidation, merger, transfer of assets or otherwise.
COMPANY SHARES OR COMPANY STOCK: Effective as of the date of
conclusion of the initial public offering for shares of Class A common stock of
Waddell & Reed Financial, Inc., the phrases "Company Shares" or "Company Stock"
shall mean the common stock of Waddell & Reed Financial, Inc. Prior to this
date, the phrases "Company Shares" or "Company Stock" shall mean shares of
common stock of Torchmark Corporation.
COMPANY STOCK ACCOUNT: An account maintained by the Trustee with
respect to a part of the Trust Fund consisting of amounts which Participants
have elected to be invested in Company Stock.
I-3
<PAGE>
COMPENSATION: The total compensation to be reported on Form W-2 and
paid with respect to a Participant by his Employer during a calendar year,
including salary, wages, overtime payments, holiday and shift differential,
bonuses and commission payments, and any amounts not paid directly and currently
in cash to a Participant but paid for the benefit of a Participant through a
"salary reduction" agreement in conjunction with one or more welfare plans of a
participating company, the total amount deferred pursuant to a Participant's
election under a "cash or deferred arrangement" in conjunction with one or more
qualified retirement plans of a participating company, but excluding the
following items:
(a) Annual service awards and other non-cash prizes and awards;
(b) Deferred compensation accrued under any deferred compensation
agreement or contract or any amendment or replacement thereof;
(c) Director's fees;
(d) Employer contributions to the Plan or any other public or private
employee benefit plan or deferred compensation arrangement;
(e) Any reimbursement of or allowances for expenses; and
(f) Payments, contributions, or benefits under such other plans,
programs or forms of compensation as the Board of Directors may exclude
under this definition.
Notwithstanding any other provision of this definition, the Annual
Compensation of a Participant (or, with respect to a Participant who is a
Primary Family member of the Participant, his or her Spouse, and his or her
lineal descendants under age 19) for any Plan Year beginning after December 31,
1993 shall not exceed $150,000 (or such adjusted amount as may be prescribed for
such Plan Year pursuant to Code (S) 401(a)(17)).
The determination of Compensation will be in accordance with records
maintained by the Employer and shall be conclusive.
CONTRIBUTION PERCENTAGE: The ratio (expressed as a percentage) of the
401(m) Contributions (including 401(m) Contributions distributed or forfeited)
on behalf of an Eligible Participant for the Plan Year to such Eligible
Participant's ACP Compensation for the Plan Year.
DEFINED BENEFIT PLAN: A plan of the type defined in Code (S) 414(j)
maintained by the Company or an Affiliate, as applicable.
I-4
<PAGE>
DEFINED CONTRIBUTION PLAN: A plan of the type defined in Code (S)
414(i) maintained by the Company or an Affiliate, as applicable.
DISABILITY: Total and permanent disability for a period of at least
six months as defined by the group disability benefit plan maintained by the
Participant's Employer.
EFFECTIVE DATE: The effective date of this amended and restated Plan
which shall be March 1, 1998. The original effective date of the Plan was
January 1, 1980.
ELIGIBLE EMPLOYEE: All Employees of an Employer other than:
(a) Employees included in a unit of employees covered by a collective
bargaining agreement between the Employer and the employee representatives
in the negotiation of which retirement benefits were the subject of good
faith bargaining, unless such bargaining agreement provides for
participation in the Plan; and
(b) leased employees within the meaning of Code (S) 414(n)(2).
ELIGIBLE PARTICIPANT: Any Eligible Employee who has met the service
requirements of Section 2.1.
EMPLOYEE: Any individual who is classified by the Company as an
employee of the Company or an Affiliate (regardless of whether such individual
is classified as an employee according to the usual common law or employment tax
rules applicable in determining the employer-employee relationship). The term
"Employee" shall also include leased employees within the meaning of Code (S)
414(n)(2). Notwithstanding the foregoing, if such leased employees do not
constitute more than twenty percent of the Employer's non-highly compensated
work force within the meaning of Code (S) 414(n)(5)(C)(ii), the term "Employee"
shall not include those leased employees covered by a plan described in Code (S)
414(n)(5), unless otherwise provided by the terms of this Plan.
EMPLOYER: The Company and each Affiliate participating in the Plan
pursuant to Section 13.8.
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EMPLOYER CONTRIBUTIONS: The contributions made to the Plan by the
Company or Participating Affiliate pursuant to Section 3.1.
EMPLOYER CONTRIBUTIONS SUBACCOUNT: The subaccount established for a
Participant pursuant to Section 3.6.1.
EMPLOYMENT: An Employee's employment with the Company or an Affiliate
or, to the extent determined by the Administrator, any predecessor of any of
them.
ENTRY DATE: The first day of the payroll period coinciding with or
next following the date the Eligible Employee has satisfied the requirements of
Section 2.1.1
ERISA: The Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA shall
include such provision and any applicable regulation pertaining thereto.
EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan Year, the
aggregate amount of 401(m) Contributions actually paid over to the Trustee for
the Plan Year on behalf of Highly Compensated Employees over the maximum amount
of such contributions permitted under the ACP test set forth in Section 3.3.
FIVE-PERCENT OWNER: Any person who owns (or is considered as owning
within the meaning of Code (S) 318) more than 5% of the outstanding stock of the
Employer, or stock possessing more than 5% of the total voting power of the
Employer.
401(M) CONTRIBUTIONS: With respect to any Participant for any Plan
Year, the Participant Contributions and any Employer Contributions made on
behalf of such Participant.
FULLY VESTED SEPARATION: Termination of Employment of a Participant
whose vested percentage in his Account is 100%.
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HCE COMPENSATION: An Employee's compensation, from an Employer,
within the meaning of Code (S) 415(c)(3), but including amounts which were
previously deferred pursuant to an unfunded non-qualified plan and which are
currently includable in the Employee's gross income.
HIGHLY COMPENSATED EMPLOYEE:
An Employee who:
(1) during the preceding Plan Year:
(i) was at any time a Five-percent Owner; or
(ii) received HCE Compensation in excess of $80,000 (multiplied by the
applicable Adjustment Factor) and, if the Employer so elects, was
in the group consisting of the top 20% of all Employees when
ranked by HCE Compensation; or who
(2) during the current Plan Year:
(i) was at any time a Five-percent Owner.
Notwithstanding the forgoing, the Employer may elect, without further
need of amending this section of the Plan, to use any simplified or alternative
definition of Highly Compensated Employee permitted by the Internal Revenue
Service. By way of illustration, and not limitation, the Plan permits the
Employer to make any or all of the elections permitted under Internal Revenue
Service Notice 97-45.
HOUR OF SERVICE:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for an Employer (or an Affiliate in the case
of an Employee who has transferred his Employment to the Employer from such
Affiliate) during the applicable computation period.
(b) Each hour for which an Employee is paid, or entitled to payment,
by an Employer (or an Affiliate in the case of an Employee who has
transferred his Employment to the Employer from such Affiliate) on account
of a period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including Disability), lay-off, jury
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duty, military duty or leave of absence. An hour for which an Employee is
directly or indirectly paid or entitled to payment on account of a period
during which no duties are performed is not credited to the Employee if
such payment is made or due under a plan maintained solely for the purpose
of providing severance benefits or complying with the applicable
unemployment compensation laws. Hours of Service are not credited for a
payment which solely reimburses an Employee for medical or medically
related expenses incurred by the Employee.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer (or an Affiliate in
the case of an Employee who has transferred his Employment to the Employer
from such Affiliate). The same Hours of Service shall not be credited both
under paragraph (a) or paragraph (b), as the case may be, and under this
paragraph (c).
(d) If, in accordance with standard personnel policies applied in a
non-discriminatory manner to all Employees similarly situated, an Employer
determines in writing that an Employee's approved, unpaid leave of absence
furthers the interest of the Employer, each hour for which the Employee on
the approved unpaid leave of absence would normally have received credit
under this Plan if he had been working in his regular employment for the
Employer (or an Affiliate in the case of an Employee who has transferred
his Employment to the Employer from such Affiliate).
(e) An Employee of the Employer (or an Affiliate in the case of an
Employee who has transferred his Employment to the Employer from such
Affiliate) who is regularly employed by such Employer (or Affiliate) for at
least 37 1/2 hours a week shall be credited with forty-five Hours of
Service if under this Plan he would be credited with at least one Hour of
Service during the week.
(f) An Employee of the Employer (or an Affiliate in the case of an
Employee who has transferred his Employment to the Employer from such
Affiliate) who is not regularly employed by such Employer (or Affiliate)
for at least 37 1/2 hours a week shall be credited with forty-five Hours of
Service if under the Plan he will be credited with at least one Hour of
Service during the week.
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(g) Hours of Service shall be calculated and credited pursuant to
section 2530-200b-2 of the Department of Labor Regulations which are
incorporated herein by this reference.
(h) In the case of an Employee who is paid on a commission basis, he
will be deemed to perform his first Hour of Service on the date on which he
is first designated an Employee by the Employer.
INVESTMENT: Investment Company Shares or, if designated by the
Company for investment of contributions under the Plan, an interest in the
Company Stock Account or the Torchmark Stock Account.
INVESTMENT COMPANY: An investment company or companies for which the
Company is the principal underwriter or investment advisor and designated by the
Company for investment of contributions under the Plan. In the case of an
Investment Company which has more than one class of shares, each class of shares
will be considered a separate Investment Company for the purposes of this Plan.
INVESTMENT COMPANY SHARES: Shares issued by an Investment Company.
LIMITATION YEAR: Each twelve consecutive month period ending on the
same last day as the Plan Year.
NET PROFITS: The profits of the Company or a Participating Affiliate,
as the case may be, for any Plan Year after all expenses or charges other than
(i) the contributions to the Plan, and (ii) federal and state taxes based on or
measured by income as shown on the books of the Company or Participating
Affiliate and computed in accordance with generally accepted accounting
practice. When the amount of Net Profits for any Plan Year has been determined
by the Company or Participating Affiliate, such amount will be final for
purposes of the Plan and will not be subject to change by reason of any
adjustments in income required by the Internal Revenue Service or otherwise.
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NON-HIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is
not a Highly Compensated Employee.
NON-VESTED SEPARATION: Termination of Employment of a Participant
whose vested percentage in his Employer Contributions Subaccount is zero
percent.
NORMAL RETIREMENT AGE: Age 65.
ONE YEAR BREAK IN SERVICE: Any period of twelve consecutive months,
beginning with the date of an Employee's Employment or any anniversary of the
date of such Employment, during which the Employee has not completed more than
500 Hours of Service; except that a Participant who is absent from work due to
such Participant's pregnancy, the birth of the Participant's child or by reason
of the adoption of a minor child by the Participant for the purpose of caring
for such child immediately following its birth or adoption and who provides
timely information establishing to the satisfaction of the Administrator the
reasons for the absence and the number of days of such absence will be treated
as performing a normal schedule (or eight hours per day) up to a maximum of 501
Hours of Service in either the year in which the absence begins or the year
immediately following the year in which the absence begins as necessary to
prevent such Participant from incurring a One Year Break in Service in either
(but not both) the year in which the absence begins or the year immediately
following the year in which the absence begins.
PARTIALLY VESTED SEPARATION: Termination of Employment of a
Participant whose vested percentage in his Employer Contributions Subaccount is
less than 100% but greater than zero percent.
PARTICIPANT: An Employee who has commenced, but not terminated,
participation in the Plan as provided in Article II.
PARTICIPANT CONTRIBUTIONS: The Participant's Basic Participant
Contributions and Supplementary Participant Contributions.
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PARTICIPANT CONTRIBUTIONS SUBACCOUNT: The subaccount established for
a Participant pursuant to Section 3.6.2.
PARTICIPATING AFFILIATE: Any Affiliate which in accordance with
Section 13.8, by duly authorized action has adopted the Plan and not withdrawn
therefrom.
PLAN: The Waddell & Reed Financial, Inc. Savings and Investment Plan.
The Plan is an eligible individual account plan within the meaning of ERISA
Section 407(d)(3).
PLAN YEAR: Each twelve consecutive month period ending on December
31, during any part of which the Plan is in effect.
QUALIFIED JOINT AND SURVIVOR ANNUITY: An annuity for the life of the
Participant with a survivor annuity continuing after the Participant's death to
the Participant's Surviving Spouse for the Surviving Spouse's life in an amount
equal to fifty percent of the amount payable during the joint lives of the
Participant and such Surviving Spouse.
QUALIFIED PLAN: A Defined Contribution Plan or a Defined Benefit Plan
which is qualified under Code (S) 401(a).
ROLLOVER CONTRIBUTION: A contribution attributable to:
(a) a "qualified total distribution" (as defined in Code (S)
402(a)(5)), made to an Eligible Employee from a Qualified Plan or made to
the Eligible Employee under Code (S) 403(a)(4) from an "employee annuity"
as referred to in that section, or
(b) a payout or distribution to an Eligible Employee referred to in
Code (S) 408(d)(3) from an "individual retirement account" or an
"individual retirement annuity" described, respectively, in Code (S) 408(a)
or (S) 408(b) consisting exclusively of amounts attributable to "qualifying
rollover distributions" (as defined in Code (S) 402(a)(5)) from a Qualified
Plan. Notwithstanding the foregoing, a Rollover Contribution shall in no
event include amounts attributable to a distribution from a Qualified Plan
under which the Eligible Employee was at any time a self-employed
individual deemed to be an
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"employee" under Code (S) 401(c)(1).
SPOUSAL CONSENT: Written consent by a Participant's Spouse waiving
the benefit otherwise payable to the Spouse, where such waiver is witnessed by a
Plan representative or a notary public and includes acknowledgment by the Spouse
of the effect of such waiver.
SPOUSE: The person lawfully married to a Participant.
SUPPLEMENTARY PARTICIPANT CONTRIBUTIONS: The contributions made to
the Plan by a Participant pursuant to Section 3.2.2.
SURVIVING SPOUSE: The Spouse of a Participant on the earlier of:
(a) the date of the Participant's death; or
(b) the Participant's Benefit Commencement Date.
TORCHMARK SHARES OR TORCHMARK STOCK: Effective as of the date of
conclusion of the initial public offering for shares of Class A common stock of
Waddell & Reed Financial, Inc., the phrases "Torchmark Shares" and "Torchmark
Stock" shall mean the common stock of Torchmark Corporation. Prior to this
date, shares of common stock of Torchmark Corporation were considered Company
Shares or Company Stock under the Plan.
TORCHMARK STOCK ACCOUNT: An account maintained by the Trustee with
respect to a part of the Trust Fund consisting of amounts which Participants
have elected to be invested in Torchmark Stock. This definition will take
effect as of the date of conclusion of the initial public offering of the Class
A common stock of Waddell & Reed Financial, Inc.
TRUST OR TRUST FUND: The trust established under the Plan in which
Plan assets are held.
TRUST AGREEMENT: The agreement between the Company and the Trustee
with respect to the Trust.
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TRUSTEE: The person appointed as trustee pursuant to Article IX, and
any successor trustee.
VALUATION DATE: The semi-monthly date as of which all Plan Accounts
are valued. Such dates shall be determined each month by the Administrator.
The first Valuation Date in any month shall be within the first 10 business days
of the month and the second Valuation Date shall be within the first 10 business
days following the fifteenth day of the month.
VALUATION PERIOD: The twenty-four semi-monthly periods commencing on
the first day and ending on the fifteenth day of each month and commencing on
the sixteenth day and ending on the last day of each month; provided that if a
commencement date for any Valuation Period falls on a Saturday, Sunday or
holiday, the commencement date for that Valuation Period shall be the
immediately following business day and the immediately preceding Valuation
Period shall end on the day before such day.
VESTING SERVICE: The Years of Service credited to a Participant under
Section 4.2 for purposes of determining the Participant's vested percentage in
the Account Balance of the Employer Contributions Subaccount established for the
Participant.
YEARS OF SERVICE: For purposes of determining eligibility to
participate under Article II and for purposes of determining Vesting Service, a
period of twelve consecutive months beginning with the date of Employment or
return to Employment during which an Employee has not less than 1000 Hours of
Service for an Employer (or an Affiliate in the case of an Employee who has
transferred his Employment to the Employer from such Affiliate).
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ARTICLE II - PARTICIPATION
2.1 ADMISSION AS A PARTICIPANT
2.1.1 An Eligible Employee shall become a Participant on the Entry Date
coincident with or next following the date on which he completes one Year of
Service and timely files an application form with the Administrator. Anything
in this Section 2.1.1 to the contrary notwithstanding, any Eligible Employee who
was a Participant on the Effective Date shall remain a Participant as of that
date.
2.1.2 At least 30 days prior to the date on which an Eligible Employee is
first eligible to become a Participant under Section 2.1.1, the Administrator
will notify each Eligible Employee of his eligibility to participate.
2.1.3 To become a Participant, an Eligible Employee who is eligible to
participate under Section 2.1.1 or who is eligible to resume participation under
Section 2.1.4 must execute and file with the Administrator, on a form prescribed
or approved by the Administrator, a written application for participation prior
to the first day of the payroll period in which he wishes to become a
Participant. On such application form, the Participant:
(a) Shall elect a rate of Basic Participant Contributions as
provided in Section 3.2.1;
(b) Shall authorize the Employer to make deductions from his pay
of his Basic Participant Contributions;
(c) Shall make investment elections as provided in Section 11.1;
(d) Shall designate a Beneficiary as provided in Section 7.2.1;
and
(e) If eligible in accordance with Section 3.2.2, may elect a
rate of Supplementary Participant Contributions.
2.1.4 An individual who has ceased to be a Participant, or met the
requirements of Section 2.1.1 but did not become a Participant, and who again
becomes an Eligible Employee with credit for at least one Year of Service shall
become a Participant as of the first date on which he again becomes an Eligible
Employee and timely files an application form with the Administrator.
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2.2 CREDITING OF SERVICE FOR ELIGIBILITY PURPOSES
2.2.1 An Employee who terminates Employment without any vested rights to a
benefit under the Plan derived from contributions by the Employer shall lose
credit for his Years of Service prior to such termination of Employment if: (a)
for years prior to January 1, 1985, the total of his consecutive One Year Breaks
in Service immediately preceding his reemployment equals or exceeds his Years of
Service prior to such termination (whether or not consecutive but excluding any
Years of Service previously disregarded under this rule); or (b) for years on or
after January 1, 1985, the total of his consecutive One Year Breaks in Service
immediately preceding his reemployment equals or exceeds the greater of five
years or his Years of Service prior to such termination (whether or not
consecutive but excluding any Years of Service previously disregarded under this
rule).
2.2.2 A former Employee who was not a Participant and who again becomes an
Employee with no Years of Service to his credit shall be treated as a new
Employee.
2.3 TERMINATION OF PARTICIPATION
A Participant shall cease to be such:
(a) upon the payment to him of all nonforfeitable benefits due to
him under the Plan at a time when he is no longer eligible for any future
contributions;
(b) upon his Non-Vested Separation;
(c) upon his death; or
(d) upon the transfer of his Accounts to another Qualified Plan.
2.4 ROLLOVER MEMBERSHIP
An Eligible Employee who makes a Rollover Contribution shall become a
Participant as of the date of such contribution even if he has not previously
become a Participant. Such an Eligible Employee shall be a Participant only
with respect to his Rollover Contributions.
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ARTICLE III - CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 EMPLOYER CONTRIBUTIONS
Subject to the provisions set forth in this Article III, for each Plan Year
the Employer will contribute semi-monthly to the Trust Fund on behalf of each
Participant who makes Participant Contributions, an amount of its Net Profits
for such Plan Year, or its accumulated earnings and profits, equal to 50% (or
such other percentage as the Board of Directors may from time to time designate)
of the Basic Participant Contributions made by each such Participant for that
semi-monthly period.
If for any Plan Year the contributions required to be made by an Employer
are reduced or omitted because of insufficient Net Profits or accumulated
earnings and profits, the other Employers who file a consolidated return with
such Employer will increase their total payments by an equivalent amount.
Notwithstanding anything contained herein to the contrary, the aggregate
Employer contributions to the Plan and any other profit sharing or stock bonus
plans maintained by an Employer with respect to a taxable year of the Employer
shall not exceed fifteen percent (15%) of the compensation (as defined in Code
(S) 404(a)(3)) paid or accrued to all participants of such plans who are
Employees of any Employer in respect of said taxable year plus allowable credit
and contribution carryovers, as provided in Code (S) 404(a)(3)(A).
3.2 PARTICIPANT CONTRIBUTIONS
3.2.1 Basic Participant Contributions. Subject to the provisions set
-------------------------------
forth in this Article III, each Participant may elect to make Basic
Contributions hereunder while he is an Eligible Employee through regular payroll
deductions authorized by him in a whole percentage of not less than 1% and not
more than 6% of his Compensation.
3.2.2 Supplementary Participant Contributions. Subject to the provisions
---------------------------------------
set forth in this Article III, for each Plan Year, each Participant who has
elected to make Basic Participant Contributions at the maximum permissible rate
under Section 3.2.1 may elect to make Supplementary Participant Contributions
while he is an Eligible Employee in an amount which does not cause the total
amount of his Supplementary Participant Contributions made during the then
current Plan Year and all prior years under this Plan and all other Qualified
Plans maintained
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by the Employer or an Affiliate to exceed 10% of the Participant's aggregate
Compensation for such Plan Year and prior years during which he has either been
a Participant or participating in any such other Qualified Plan. Supplementary
Participant Contributions shall be made in accordance with rules and procedures
adopted by the Administrator either through regular payroll deductions
authorized by the Participant or through lump sum payments by the Participant.
Only one lump sum payment may be made by a Participant in any calendar quarter.
3.2.3 Change in Rate of Participant Contributions. A Participant may
-------------------------------------------
elect to change his rate of Participant Contributions while he is an Eligible
Employee as of the first day of any payroll period but not more frequently than
eight times in any Plan Year (or such other limit as established by the Company
from time to time). The change will be limited to the rates described in 3.2.1
or 3.2.2, as the case may be. A Participant who is making Supplementary
Participant Contributions under 3.2.2, however, may not elect to decrease his
rate of Basic Participant Contributions unless he simultaneously revokes his
election to make Supplementary Participant Contributions. The Participant's
election to change his rate of Participant Contributions must be made in writing
to the Administrator prior to the first day of the payroll period in which the
Participant wishes the change to be made effective.
3.2.4 Suspension of Participant Contributions. A Participant may elect to
---------------------------------------
suspend all his Participant Contributions by means of written notice to the
Administrator made prior to the first day of the payroll period in which the
Participant wishes the suspension to be made effective. The Participant may
elect to resume Participant Contributions as of the first day of any payroll
period which succeeds the date of the suspension by at least one pay period.
Such election to resume Participant Contributions must be made in writing to the
Administrator prior to the first day of the payroll period in which the
Participant wishes the resumption to be made effective. The Administrator may
establish such rules and procedures with respect to the making, changing and
resumption of Participant Contributions (including suspension of contributions)
as it shall determine.
3.3 LIMITS ON 401(M) CONTRIBUTIONS-ACP TEST
(a) Average Contribution Percentage Test. The 401(m)
------------------------------------
Contributions for each Plan Year must satisfy one of the following tests:
(i) The Average Contribution Percentage for Eligible
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Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the prior Plan Year's Average Contribution Percentage
for Eligible Participants who as of such prior Plan Year were Non-
Highly Compensated Employees multiplied by 1.25; or
(ii) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the prior Plan Year's Average Contribution Percentage
for Eligible Participants who as of such prior Plan Year were Non-
Highly Compensated Employees multiplied by 2.0, provided that the
Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees does not exceed the prior Plan Year's
Average Contribution Percentage for Eligible Participants who as of
such prior Plan Year were Non-Highly Compensated Employees by more
than two (2) percentage points.
Nothing in this Section 3.3 shall preclude the Employer from
making any and all elections permitted by the Internal Revenue Service with
respect to substitution of the current Plan Year's data for the prior Plan
Year's data, as permitted -- for example -- in Internal Revenue Service
Notice 97-2.
(b) For purposes of determining the Contribution Percentage of
an Eligible Participant for a Plan Year, the Eligible Participant's
Employer Contributions shall be taken into account only if such Employer
Contributions (i) are based on the Eligible Participant's Participant
Contribution for such Plan Year, (ii) are attributed to the Eligible
Participant's Account as of a date within such Plan Year, and (iii) are
paid to the Trust by the end of the twelfth month following the close of
such Plan Year. Any Employer Contribution that fails to satisfy the
foregoing requirements shall be treated as a contribution which is not
subject to Code (S) 401(m).
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(c) Aggregation of Employer Contributions.
-------------------------------------
(i) For purposes of this Section 3.3, the Contribution
Percentage for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to receive Employer
contributions or to make Employee after-tax contributions under one or
more other plans described in Code (S) 401(a) that are maintained by
the Company or an Affiliate shall be determined as if all such
contributions were made under a single plan.
(ii) If two or more plans are aggregated for purposes of
Code (S) 410(b) or 401(a)(4), such plans shall be aggregated for
purposes of the Average Contribution Percentage test.
3.4 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) In General. Notwithstanding any other provision of the
----------
Plan, Excess Aggregate Contributions plus any income or minus any loss
allocable thereto shall be distributed to the extent vested, or forfeited
to the extent not vested, from the Employer Contributions Subaccounts no
later than the last day of each Plan Year, to Participants on whose behalf
such Excess Aggregate Contributions were made for the preceding Plan Year.
The Excess Aggregate Contributions with respect to a Highly Compensated
Employee shall be determined by reducing 401(m) Contributions made on
behalf of such Highly Compensated Employees in order of the amount of
401(m) Contributions, as provided for in Internal Revenue Service Notice
97-2 or such other guidance published by the Internal Revenue Service
dealing with distributions of Excess Aggregate Contributions after the
effective date of the Small Business Job Protection Act of 1996.
(b) Determination of Income. The Excess Aggregate
-----------------------
Contributions distributed to a Participant for a Plan Year shall be
adjusted for income or loss, including income or loss for the period
between the end of the Plan Year and the date of distribution of the Excess
Aggregate Contributions, as follows. The income attributable to a
Participant's Excess Aggregate Contributions for the Plan Year shall be
determined by multiplying the income attributable to the Participant's
Account for the Plan Year by a fraction, (i) whose numerator is the
Participant's Excess Aggregate Contributions for the
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Plan Year, and (ii) whose denominator is the Account Balance of the
Participant's Account as of the end of the Plan Year, reduced by the gain
attributable to such Account Balance for the Plan Year or increased by the
loss attributable to such Account Balance for the Plan Year. The income
attributable to a Participant's Excess Aggregate Contributions for the
period from the end of the Plan Year to the date of distribution shall be
determined by multiplying 10% of the income attributable to the
Participant's Account for the Plan Year by the number of calendar months,
if any, which have elapsed since the end of the Plan Year.
3.5 ROLLOVER CONTRIBUTIONS AND TRUST TO TRUST TRANSFERS
3.5.1 With the approval of the Administrator, any Eligible Employee who is
a Participant, or who would be a Participant but for a failure to satisfy the
eligibility requirements of Article II, may make a Rollover Contribution to the
Plan. A Rollover Contribution shall be in cash or in other property acceptable
to the Trustee. The Administrator may condition acceptance of a contribution
intended to be a Rollover Contribution, including receipt of (i) such documents
as it may require to demonstrate that it is a Rollover Contribution and (ii)
assurance and certification that such contribution does not derive from a top
heavy plan under which the Eligible Employee was a key employee, within the
meaning of Code (S) 416, and will not thereby or otherwise affect adversely the
qualification of the Plan under Code (S) 401(a). In the event that an Eligible
Employee makes a contribution pursuant to this Section 3.5.1 intended to be a
Rollover Contribution but which the Administrator later concludes did not
qualify as a Rollover Contribution, the Trustee shall distribute to the Eligible
Employee as soon as practicable after that conclusion is reached the amount of
such contribution together with any earnings thereon.
3.5.2 The Administrator may cause to be transferred to the Plan directly
by the trustees of any qualified plan maintained by an Employer or Affiliate
cash and/or other assets acceptable to the Trustee and allocable to the Employee
under such plan, provided that any such transfer shall not reduce the vested
percentage or the rate of vesting of such transferred assets. Subject to the
approval of the Administrator, an Employee may cause to be transferred directly
by the trustees of any other pension or profit-sharing plan qualified under Code
(S) 401(a) in which such Employee participates to the Trustee of the Plan the
vested interest of the Employee in such other plan in cash and/or other assets
acceptable to the Trustee. The Administrator may establish rules
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and procedures governing the transfer of qualified plan assets. Funds directly
transferred to the Plan from any other pension or profit-sharing plan qualified
under Code (S) 401(a) shall not be considered either a voluntary contribution or
Employer contribution for purposes of calculating the Annual Additions of such
Employee under Section 3.8.
3.6 ESTABLISHING OF ACCOUNTS
3.6.1 An Employer Contributions Subaccount shall be established for each
Participant for whom Employer Contributions are made, and the Administrator
shall credit, or cause to be credited to such account, all amounts allocable to
each such Participant pursuant to such contributions, plus gains or losses
thereon.
3.6.2 A Participant Contributions Subaccount shall be established for each
Participant who contributes to the Plan pursuant to Section 3.2, or who makes a
Rollover Contribution to the Plan, or on whose behalf a trust to trust transfer
is made, pursuant to Section 3.5, to which the Administrator shall credit, or
cause to be credited, such contributions made by the Participant pursuant to
Section 3.2, or amounts attributable to such Rollover Contribution or trust to
trust transfer, as the case may be, plus gains or losses thereon.
3.7 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES
3.7.1 Allocation of Contributions. Subject to the limitation imposed by
---------------------------
Code (S) 415, the contributions made by each Participant pursuant to Section 3.2
will be invested and credited to his Participant Contributions Subaccount in
accordance with the provisions of Section 11.1. Employer Contributions will be
credited on the same date to the Employer Contributions Subaccounts of those
Participants for whose benefit such contributions are made as provided in
Section 3.1.
3.7.2 Allocation of Forfeitures. Except as otherwise provided in Section
-------------------------
12.4.2, forfeitures in Employer Contributions Subaccounts for a Plan Year shall
be applied to reduce the amount of the Employer Contributions to Employer
Contributions Subaccounts for that Plan Year, with the entire amount of such
contributions and forfeitures allocated in accordance with the preceding Section
3.7.1.
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3.8 LIMITATION ON ALLOCATIONS
Notwithstanding any other provisions of the Plan, a Participant's Annual
Addition shall not exceed the limitations of Code (S) 415 which are hereby
incorporated by reference. In the event that the limitations of Code (S) 415(e)
would otherwise be violated, a Participant's benefits and/or annual additions
under plans of the Company or an Affiliate will be reduced as necessary in the
following order: (i) the accrued benefit under any defined benefit plan (pro
rata with respect to two or more such plans); (ii) unmatched employee
contributions under any defined contribution plan; (iii) matched employee
contributions under any defined contribution plan; and (iv) matching Employer
contributions under any defined contribution plan. If after the application of
(i)-(iv) above an excess amount still exists and the Participant is covered by
the Plan at the end of the Limitation Year, the excess amount in the
Participant's account will be used to reduce Employer Contributions including
any allocation of forfeitures for such Participant in the next Limitation Year
and each succeeding Limitation Year, if necessary. If after the application of
(i)-(iv) above an excess still exists and the Participant is not covered by the
Plan at the end of the Limitation Year, the excess amount will be held
unallocated in a suspense account and the suspense account will be applied to
reduce future Employer Contributions including allocations of any forfeitures
for all remaining Participants in the next Limitation Year and each succeeding
Limitation Year, if necessary. If a suspense account is in existence at any
time during the Limitation Year pursuant to this section, it will not
participate in the allocation of the trust's investment gains and losses.
3.9 RETURN OF EMPLOYER CONTRIBUTIONS UNDER SPECIAL CIRCUMSTANCES
Notwithstanding any provision of this Plan to the contrary, upon timely
written demand by the Employer to the Trustee:
(a) Any contribution by an Employer to the Plan under a mistake
of fact shall be returned to such Employer by the Trustee within one year
after the payment of the contribution;
(b) Any contribution made by an Employer to the Plan conditioned
on the determination by the Commissioner of Internal Revenue that the Plan
is initially a Qualified Plan shall be returned to such Employer by the
Trustee within one year after notification from the Internal Revenue
Service that the Plan is not initially a Qualified
III-7
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Plan; and
(c) Any contribution made by an Employer to the Plan conditioned
upon the deductibility of the contribution under Code (S) 404 shall be
returned to such Employer within one year after a deduction for the
contribution under Code (S) 404 is disallowed by the Internal Revenue
Service, but only to the extent disallowed. Each contribution by an
Employer shall be conditioned upon the deductibility of the contribution
under Code (S) 404 unless the Employer elects otherwise.
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<PAGE>
ARTICLE IV - VESTING
4.1 DETERMINATION OF VESTING
4.1.1 A Participant shall at all times have a vested percentage of 100% in
the Account Balance of his Participant Contributions Subaccount.
4.1.2 A Participant whose Employment terminates either because of his
death or Disability or upon or after attaining Normal Retirement Age shall have
a vested percentage of 100% in the Account Balance of his Employer Contributions
Subaccount.
4.1.3 The vested percentage of a Participant in the Account Balance of his
Employer Contributions Subaccount not vested pursuant to Section 4.1.2 shall be
determined in accordance with the following schedule:
Completed Years of Vested
Vesting Service Percentage
--------------------- ----------
less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
4.2 RULES FOR CREDITING VESTING SERVICE
4.2.1 A Participant's Vesting Service shall mean the sum of (i) a
Participant's years of Vesting Service prior to the Effective Date under the
terms of the Plan as in effect on December 31, 1988; plus (ii) subject to
Sections 4.2.2 through 4.2.5 below, a Participant's Years of Service after the
Effective Date.
4.2.2 If an Employee is on an authorized unpaid leave of absence granted
by his Employer in accordance with standard personnel policies of such Employer
applied in a non-discriminatory manner to all Employees similarly situated, his
period of absence shall not be considered a Break in Service and shall be
counted as Vesting Service upon his return to active
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<PAGE>
Employment.
4.2.3 If an Employee is on an authorized military leave while his
reemployment rights are protected by law and provided that he directly entered
military service from his Employer's service and shall not have voluntarily
reenlisted after the date of first entering active military service, his period
of absence shall not be considered a Break in Service and shall be counted as
Vesting Service upon his return to active Employment.
4.2.4 An Employee who terminates Employment with no vested percentage in
the Account Balance of his Employer Contributions Subaccount shall, if he
returns to Employment, have no credit for Vesting Service prior to such
termination of Employment if the total of his consecutive One Year Breaks in
Service immediately preceding his reemployment exceeds the greater of 5 years or
his aggregate years of Vesting Service prior to such termination (whether or not
consecutive, but excluding Vesting Service previously disregarded under this
rule). A Participant who had a Partially Vested Separation and returns to
Employment will retain credit for his prior years of Vesting Service.
4.2.5 Vesting Service of an Employee reemployed following 5 or more One
Year Breaks in Service (or one or more One Year Breaks in Service for years
prior to January 1, 1985) shall not be counted for the purpose of computing his
vested percentage in his Employer Contributions Subaccount derived from
contributions accrued prior to his termination of Employment. Separate records
shall be maintained reflecting the Participant's vested percentage in such
Subaccount attributable to service prior to terminating Employment and
reflecting the Participant's vested percentage in that Subaccount attributable
to service after reemployment.
4.3 ACCOUNT FORFEITURES
4.3.1 Upon the Non-Vested Separation or Partially Vested Separation of a
Participant the non-vested portion of his Employer Contributions Subaccount will
be treated as a forfeiture as of the earlier of: (i) the date on which the
Participant completes 5 One Year Breaks in Service, (ii) the date of the
Participant's death, or (iii) the date of distribution of the vested portion of
the Participant's Employer Contributions Subaccount. Such forfeitures shall be
applied toward the reduction of the Employer Contributions in accordance with
Section 3.7.2. A Participant who is zero percent vested in his Employer
Contributions Subaccount shall be treated as having received a distribution of
the vested portion of his Employer Contributions Subaccount as of his
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<PAGE>
date of termination of employment.
4.3.2 Amounts forfeited pursuant to Section 4.3.1 (unadjusted by any
subsequent gains or losses) shall be restored for a Participant who had a Non-
Vested or Partially Vested Separation, forfeited any portion of his Employer
Contributions Subaccount and then resumes Employment and repays to the Plan the
full amount of his distribution before incurring 5 consecutive One Year Breaks
in Service. The restored amount shall be derived from amounts forfeited and, if
such forfeitures are not sufficient, from a contribution by the Employer, as
appropriate, made as of that date.
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<PAGE>
ARTICLE V - AMOUNT AND PAYMENT OF BENEFITS TO PARTICIPANTS
5.1 FULLY VESTED SEPARATION
A Participant's benefits upon his Fully Vested Separation shall be the
Account Balance of his Account determined on the fourth Valuation Date following
the Participant's termination of Employment (or such other Valuation Date as may
apply pursuant to Section 11.7).
5.2 PARTIALLY VESTED SEPARATION
A Participant's benefits upon his Partially Vested Separation shall be (a)
the Account Balance of his Employer Contributions Subaccount determined on the
fourth Valuation Date following the date the Participant terminates Employment
(or such other Valuation Date as may apply pursuant to Section 11.7), multiplied
by his vested percentage, determined pursuant to Section 4.1.3, plus (b) the
Account Balance of his Participant Contributions Subaccount as of the Valuation
Date applicable for purposes of clause (a) of this Section 5.2.
5.3 NON-VESTED SEPARATION
A Participant's benefits upon his Non-Vested Separation shall be the
Account Balance of his Participant Contributions Subaccount determined on the
fourth Valuation Date following the date he terminates Employment (or such other
Valuation Date as may apply pursuant to Section 11.7).
5.4 PARTICIPANTS WHO HAVE RECEIVED PRIOR DISTRIBUTIONS
If a distribution of a Participant's Employer Contributions Subaccount has
been made under Section 5.2 to a Participant at a time when he has a
nonforfeitable right to less than 100 percent of his Employer Contributions
Subaccount, his nonforfeitable interest in his Employer Contributions Subaccount
at any time thereafter will be equal to P (AB + D) - D, where P is the
nonforfeitable percentage at the relevant time determined under Section 4.1.3;
AB is the balance of his Employer Contributions Subaccount at the relevant time;
and D is the amount of the distribution. However, if any part of his Employer
Contributions Subaccount is forfeited under Section 4.3, the Participant's
interest in the remaining balance, if any, of his Employer Contributions
Subaccount will thereafter be fully vested and nonforfeitable (subject to
adjustments
V-1
<PAGE>
in the value of his account). If, after such a forfeiture under Section 4.3,
the Participant resumes participation in the Plan, a separate, new Employer
Contributions Subaccount will be established for him under Section 3.6.1 and all
subsequent contributions will be credited to such new Subaccount. The vesting
schedule in Section 4.1.3. will thereafter apply only to such new Subaccount;
his interest in the original Subaccount will remain fully vested and
nonforfeitable.
5.5 BENEFIT COMMENCEMENT DATE
5.5.1 Except as provided in or by operation of this Article V, a
Participant's Benefit Commencement Date shall be as soon as practicable after
the first to occur of:
(a) the date the Participant properly requests such distribution
to commence after termination of the Participant's Employment with the
Employer and all Affiliates provided, however, any such request by a
Participant shall not be valid unless the Participant is furnished with a
written explanation of his right to defer the commencement of the benefit
payment; or
(b) the date the Participant properly requests such distribution
to commence following the incurrence of a Disability; or
(c) the 60th day after the close of the Plan Year in which the
Participant attains Normal Retirement Age or, if later, when he terminates
Employment with the Employer and all Affiliates, unless the Participant has
requested to defer the distribution to a later date; or
(d) the April 1 following the calendar year in which the
Participant attains age 70-1/2; provided, however, that:
(i) In the case of a Participant who was born prior to July
1, 1917 and at no time during a Plan Year ending in or after the
calendar year in which he attains age 66-1/2 was a Five-percent Owner
of the Employer within the meaning of Code (S) 416(i)(1), such date
shall be the April 1 following the later of (i) the calendar year
during which he attains age 70-1/2, or (ii) the calendar year in which
the Participant retires; and
(ii) In the case of a Participant who was born prior to July
1, 1917 and at any time during a Plan Year ending in or after the
calendar year in which he attains age 66-1/2, was a Five-percent Owner
of the Employer within the
V-2
<PAGE>
meaning of Code (S) 416, such date shall be the April 1 following the
later of (i) the calendar year during which he attained age 70-1/2, or
(ii) the earlier of (1) the calendar year ending in the Plan Year
during which he first became a Five-percent Owner, or (2) the calendar
year in which the Participant retires; and
(iii) In the case of a Participant who is not a Five-
percent Owner with respect to the Plan Year ending in the calendar
year in which the Participant attains age 70-1/2, such date shall be
April 1 following the later of (i) the calendar year during which the
Participant attained age 70-1/2, or (ii), the calendar year in which
the Participant retired.
5.5.2 If the value of a Participant's Account exceeds $5,000 at the time
of any distribution, the Participant (and, if applicable, his Spouse) must
consent in a written election filed with the Administrator, to any distribution
before the Participant's attainment of Normal Retirement Age. Notwithstanding
anything in this Article to the contrary, the Administrator may direct the
Trustee to distribute to the Participant the distributable balance of the
Participant's Account as soon as practicable without such Participant's written
consent if, at the time of distribution, the value of the Participant's Account
does not exceed $5,000.
5.5.3 In no event shall the amount distributable in any year be less than
the amount determined in accordance with the minimum distribution incidental
benefit requirements of Treasury Regulation Section 1.401(a)(9)-2.
5.6 PARTICIPANT ACCOUNT WITHDRAWALS
5.6.1 Participant Contributions Subaccount Withdrawals. In accordance
------------------------------------------------
with such rules and procedures as the Administrator may prescribe, a Participant
may withdraw his Participant Contributions, in the order set forth in paragraphs
(a), (b) and (c) below by giving written notice to the Administrator of
intention to so withdraw on a form prescribed or approved by the Administrator.
All such withdrawals will be made in accordance with Section 11.7.
Notwithstanding the foregoing, a Married Participant shall not withdraw any
amount of Participant Contributions without obtaining the Spousal Consent of his
Spouse within the 90 day period ending on the date the withdrawal is made.
(a) Withdrawal of Pre-1987 Participant Contributions. A
------------------------------------------------
Participant may withdraw from his Participant Contributions Subaccount
under this paragraph (a) an
V-3
<PAGE>
amount up to the total amount of his Supplementary Participant
Contributions and Basic Participant Contributions made prior to January 1,
1987 less any previous withdrawals; provided, however, the amount of such
withdrawal under this paragraph (a) cannot be less than $200 (or, if less,
the amount of his pre-1987 Supplementary Participant Contributions and
Basic Participant Contributions);
(b) Withdrawal of Post-1986 Supplementary Participant
-------------------------------------------------
Contributions. A Participant who is withdrawing the maximum amount
-------------
permitted under (a) above may also withdraw from his Participant
Contributions Subaccount under this paragraph (b) an amount up to the total
amount of his post-1986 Supplementary Participant Contributions plus
earnings on his Supplementary Participant Contributions less any previous
withdrawals; provided, however, the amount of such withdrawal under this
paragraph (b) cannot be less than $200 (or, if less, the amount of his
post-1986 Supplementary Participant Contributions and earnings on his
Supplementary Participant Contributions);
(c) Withdrawal of Post-1986 Basic Participant Contributions. A
-------------------------------------------------------
Participant who is withdrawing the maximum amount permitted under (b) above
may also withdraw from his Participant Contributions Subaccount an amount
up to the total amount of his post-1986 Basic Participant Contributions
plus earnings on his Basic Participant Contributions less any previous
withdrawals; provided, however, the amount of such withdrawal under this
paragraph (c) cannot be less than $200 (or, if less, the amount of his
post-1986 Basic Participant Contributions and earnings on his Basic
Participant Contributions). A Participant may not make more than two
withdrawals under paragraphs (a), (b) and (c) in any one calendar year. If
at any time a Participant withdraws on a cumulative basis more than 80
percent of the total amount of his Basic Participant Contributions, his
right to make further Participant Contributions under the Plan will be
suspended for a period of six months from the date of his last withdrawal.
5.6.2 Employer Contributions Subaccount Withdrawal. A Participant who (i)
--------------------------------------------
is 100% vested in his Employer Contributions Subaccount and (ii) is withdrawing
the entire balance of his Participant Contributions Subaccount in accordance
with Section 5.6.1 may, at the same time as the withdrawal under Section 5.6.1,
withdraw an amount which is no greater than 50% of the value of his Employer
Contributions Subaccount by giving prior written notice to the Administrator of
intention to so withdraw on a form prescribed or approved by the Administrator.
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<PAGE>
Such written notice will specify the particular portions of the withdrawal which
are to be withdrawn from each investment in which the Participant's Account is
invested. The remaining portion of the Employer Contributions will not be
available for withdrawal until retirement or termination. The right of a
Participant withdrawing Employer Contributions under this Section 5.6.2 to make
further Participant Contributions under the Plan will be suspended for a period
of twelve months from the date of his last withdrawal. All such withdrawals
will be made in accordance with Section 11.7. Notwithstanding the foregoing, a
Married Participant shall not withdraw any amount of Employer Contributions
without obtaining the written, notarized consent of his Spouse within the 90 day
period ending on the date the withdrawal is made.
5.6.3 Resumption of Participation after a Withdrawal. A Participant who
----------------------------------------------
makes a withdrawal in accordance with Sections 5.6.1(c) or 5.6.2 may elect to
resume making Participant Contributions as of the first day of the payroll
period following the last day of the applicable suspension period. Such
election must be made in writing and filed with the Administrator prior to the
first day of the payroll period in which the Participant wishes the resumption
to be made effective. Amounts withdrawn by a Participant may not be returned to
the Plan.
V-5
<PAGE>
ARTICLE VI - FORMS OF PAYMENT OF ACCOUNTS
6.1 METHODS OF DISTRIBUTION
6.1.1 A Participant's benefits shall be payable in the normal form of a
Qualified Joint and Survivor Annuity (under an Annuity Contract purchased with
the aggregate Account Balance of the Participant's Account at the Benefit
Commencement Date) if the Participant is married on his Benefit Commencement
Date and in the normal form of a life annuity with payments guaranteed for 120
months (under an Annuity Contract purchased with the aggregate Account Balance
of the Participant's Account at the Benefit Commencement Date) if the
Participant is not married on that date, provided that a Participant may at any
time prior to the Benefit Commencement Date elect, in accordance with Section
6.2, any of the following optional forms of benefit payment instead of the
normal form:
(i) A lump sum in cash or in kind; or
(ii) An annuity (under an Annuity Contract purchased with the
aggregate Account Balance of the Participant's Account at the Benefit
Commencement Date) of the type described in Section 6.1.2.
Anything in this Section 6.1.1 to the contrary notwithstanding, if the
nonforfeitable Account Balance of a terminated Participant shall be equal to or
less than $5,000 when the amount thereof is first determined, the entire amount
shall be distributed in a lump sum as promptly as possible.
6.1.2 For purposes of Section 6.1.1(ii), the optional annuity form may be
any one of the following:
(i) A single life annuity, under which equal or substantially
equal monthly installments are paid to the Participant during his lifetime,
with no further payments to anyone after his death.
(ii) An annuity under which equal or substantially equal
monthly installments are paid to the Participant during his lifetime, with
payment of monthly installments guaranteed for a period selected by the
Participant which may be either 60, 120, 180, 240 or 300 months.
(iii) An annuity under which equal or substantially equal
annual, semi-annual, quarterly or monthly installments are paid in an
amount specified in the election until the net sum payable with interest
thereon at the rate of 3% per annum and such
VI-1
<PAGE>
additional interest, if any, as may be declared under the Annuity Contract
is exhausted. Any balance remaining at the end of twenty-five years shall
be paid in a lump sum.
(iv) An annuity under which equal or substantially equal
annual, semi-annual, quarterly or monthly installments, except for any
excess interest, are paid for a fixed period not exceeding twenty-five
years. Such amounts shall include interest on the unpaid balance at a rate
(not less than 3% per annum) declared annually under the Annuity Contract.
(v) An annuity under which equal or substantially equal
monthly installments are paid to the Participant during his lifetime with
such payments continuing during the lifetime of a contingent annuitant if
the contingent annuitant survives the Participant.
(vi) An annuity under which equal or substantially equal
monthly installments are paid for the longer of the lifetime of the
Participant, the lifetime of a contingent annuitant or a guaranteed period
selected by the Participant. The period may be either 60, 120, 180, 240 or
300 months.
(vii) An annuity under which equal or substantially equal
monthly installments are paid for the Participant so long as both the
Participant and a contingent annuitant shall live. Upon the death of the
first of them to die the amount of each installment shall be reduced to
two-thirds of the amount previously paid, and such reduced installments
shall be paid to the survivor for his lifetime.
(viii) An annuity under which equal or substantially equal
monthly installments are paid for the longer of the period during which
both the Participant and a contingent annuitant shall live or a guaranteed
period selected by the Participant. The guaranteed period may be either 60,
120, 180, 240 or 300 months. Upon the later of (A) the death of the first
to die of the Participant or the contingent annuitant or (B) the expiration
of the guaranteed period, if one of them is then living the amount of each
installment shall be reduced to two-thirds of the amount previously paid
and such reduced installments shall be paid to the survivor for his
lifetime.
6.1.3 Notwithstanding Section 6.1.1, the normal form of benefits of a
Participant shall be a lump sum and Sections 6.2.2 and 6.2.4 shall not apply
unless the Participant (a) is credited with at least one Hour of Service on or
after August 23, 1984, or (b) his interest under this Plan,
VI-2
<PAGE>
or under a plan of which this Plan is a continuation, had not been distributed,
or distribution thereof had not commenced, prior to August 23, 1984.
6.2 ELECTION OF OPTIONAL FORMS
6.2.1 By notice to the Administrator within the 90-day period prior to a
Participant's Benefit Commencement Date, the Participant may elect, in writing,
not to receive the normal form of benefit payment otherwise applicable and to
receive instead an optional form of benefit payment provided for in Section
6.1.1.
6.2.2 Within a reasonable period, but in no event later than a married
Participant's Benefit Commencement Date, the Administrator shall provide to each
married Participant a written explanation of:
(a) the terms and conditions of the Participant's normal form of
benefit payment;
(b) the Participant's right to make, and the effect of, an
election to waive the normal form of benefit payment;
(c) the rights of the Participant's Spouse under Section 6.2.4;
and
(d) the right to make, and the effect of, a revocation of a
previous election to waive the normal form of benefit payment.
The Administrator may, on a uniform and nondiscriminatory basis, provide for
such other notices, information or election periods or take such other action as
the Administrator considers necessary or appropriate so that this Section 6.2 is
implemented in such a manner as to comply with Code (S)(S) 401(a)(11) and 417.
6.2.3 A Participant may revoke his election to take an optional form of
benefit, and elect a different form of benefit, at any time prior to the
Participant's Benefit Commencement Date.
6.2.4 The election of an optional benefit by a married Participant must
also be a waiver of a Qualified Joint and Survivor Annuity by the Participant.
A waiver of a Qualified Joint and Survivor Annuity shall not be effective
unless: (i) the Participant's Spouse consents in writing; (ii) the Spouse's
consent to the waiver is witnessed by a plan representative or notary public;
and (iii) the Spouse's consent acknowledges the effect of the election.
Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity
will not be effective unless the election designates a form of benefit payment
which, if the Participant is married, may not be changed
VI-3
<PAGE>
without spousal consent. Notwithstanding this consent requirement, if the
Participant establishes to the satisfaction of a Plan representative that such
written consent may not be obtained because there is no Spouse or the Spouse
cannot be located, the election will be deemed effective. Any consent necessary
under this provision will not be valid with respect to any other Spouse.
6.2.5 The election of an optional form of benefit which contemplates the
payment of an annuity shall not be given effect if any person who would receive
benefits under the annuity dies before the annuity starting date.
6.3 CHANGE IN FORM OR TIMING OF BENEFIT PAYMENTS
Subject to the Administrator's consent, any former Employee whose payments
are being deferred or who is receiving installment payments may request
acceleration or other modification of the form of benefit distribution, provided
that any necessary consent to such change required pursuant to Section 6.2.4 is
obtained from the former Employee's Spouse.
6.4 DIRECT ROLLOVERS
6.4.1 Effective with respect to distributions made on or after January 1,
1993, a Participant or Spouse may elect to have all or a portion of any amount
payable to him or her from the Plan which is an "eligible rollover distribution"
(as defined in Section 6.4.2 below) transferred directly to an "eligible
retirement plan" (as defined in Section 6.4.2 below). Any such election shall
be made in accordance with such uniform rules and procedures as the
Administrative Committee may prescribe from time to time as to the timing and
manner of the election in accordance with Code (S) 401(a)(31).
6.4.2 For purposes of this Section and Section 7.1.4:
(a) "Eligible rollover distribution" shall mean any distribution
of all or any portion of the balance to the credit of the distributee other
than: (1) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary; (2) any distribution for a specified period of ten (10) years
or more; (3) any distribution to the extent such distribution is required
under Code (S) 401(a)(9); or (4) the portion of any distribution that is
not includable in gross income.
VI-4
<PAGE>
(b) "Eligible retirement plan" shall mean, with respect to a
Participant, an individual retirement account or annuity described in Code
(S) 408(a) or 408(b) ("IRA"); an annuity plan described in Code (S) 403(a);
or a qualified plan described in Code (S) 401(a), that accepts the
distributee's eligible rollover distribution and, with respect to a Spouse,
shall mean an IRA.
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<PAGE>
ARTICLE VII - DEATH BENEFITS
7.1 PAYMENT OF ACCOUNT BALANCES
7.1.1 If a Participant dies before distribution of his interest in the
Plan, if any, has commenced, the Participant's non-forfeitable Account Balance
shall, subject to Section 7.1.2 be distributed to the Participant's Beneficiary
in the form, at the time and from among the methods specified in Section 6.1.1
as elected by the Beneficiary within 60 days following the Participant's death.
If an election is not received by the Administrator, the distribution shall be
made, if to a Surviving Spouse, in accordance with Section 7.1.2(a), and, if to
some other Beneficiary, to the Beneficiary in a lump sum. Notwithstanding the
foregoing, if the total amount distributable to the Beneficiary is $5,000 or
less, the distribution shall be made in a lump sum.
7.1.2. Notwithstanding any other provision of the Plan to the contrary:
(a) If the Participant dies leaving a Surviving Spouse before
distribution of his interest in the Plan has commenced, and unless the
Participant's Surviving Spouse has elected, by written notice to the
Administrator within sixty days after the Participant's death, any other
form of benefit payment specified in Section 6.1.1, or the Participant's
Surviving Spouse has already consented in a manner described in Section
6.2.4 to a distribution to some other Beneficiary designated by the
Participant, the Participant's Account Balance shall be distributed to the
Participant's Surviving Spouse in the form of an annuity for the life of
the Surviving Spouse (under an Annuity Contract purchased with the
aggregate Account Balance of the Participant's Account) or in lump sum
form if the total amount distributable is $5,000 or less.
(b) If the Participant dies before distribution of his or her
interest in the Plan has commenced, the Participant's entire interest must
be distributed within five years after the Participant's death; provided,
however, that if any portion of the Participant's interest is payable to
his Beneficiary, distributions may be made in substantially equal
installments over the life or life expectancy of the Beneficiary,
commencing (i) in the case of a Beneficiary other than a Surviving Spouse,
no later than one year after the Participant's death; and (ii) in the case
of a Surviving Spouse, no later than the later of one year after the
Participant's death or the date on which the Participant would have
attained age 70 1/2. If the Surviving Spouse dies before payments to such
Spouse begin,
VII-1
<PAGE>
subsequent distributions shall be made as if the Surviving Spouse had been
the Participant.
7.1.3 The Valuation Date for purposes of determining the benefits
payable to the Beneficiary of a Participant shall be as of the fourth Valuation
Date following the Participant's death (or such other Valuation Date as may
apply pursuant to Section 11.7).
7.1.4 Any lump sum payment payable to a Spouse pursuant to this Section
7.1 shall be eligible for a direct rollover in accordance with Section 6.4.
7.2 BENEFICIARIES
7.2.1 Subject to the spousal consent requirements of Section 7.1.2(a), a
Participant may designate a Beneficiary for his Account.
7.2.2 If a Participant who is unmarried as of the date of his death has
designated a Beneficiary and such Beneficiary predeceases the Participant, or if
no Beneficiary has been designated by such Participant, the Participant's
interest remaining in the Plan shall be paid to the estate of the Participant.
If a Participant who is married as of the date of his death designates a
Beneficiary pursuant to Section 7.1.2(a) and such Beneficiary predeceases the
Participant, the Participant's interest remaining in the Plan shall be paid to
the Participant's Surviving Spouse, or to the Participant's estate if such
Spouse is no longer living. If two or more Beneficiaries are named, the interest
of any Beneficiary, who does not survive the Participant, shall pass to the
surviving Beneficiary or Beneficiaries in accordance with their respective
interests unless otherwise agreed in writing between the Administrator and the
Participant.
7.2.3 Subject to the consent requirements applicable with respect to a
Spouse, any designation of a Beneficiary to whom amounts due after the
Participant's death shall be paid must be filed with the Administrator, in a
time and manner designated by the Administrator, in order to be effective. Any
such designation of a Beneficiary may be revoked by filing a later designation
or an instrument of revocation with the Administrator, in a time and manner
designated by the Administrator. If a Beneficiary fails to survive a Participant
for at least 30 days, it shall be presumed that the Participant survived the
Beneficiary.
VII-2
<PAGE>
ARTICLE VIII - FIDUCIARIES
8.1 NAMED FIDUCIARIES
The Named Fiduciaries, who shall have authority to control and manage the
operation and administration of the Plan, are as follows:
(a) the Company, which shall have the sole right to (i) appoint
and remove from office the members of the Administrative Committee, the
Trustee and any investment manager; (ii) designate the Investment
Companies for investment of contributions under the Plan; and (iii) amend
or terminate the Plan;
(b) the Administrative Committee, which shall have the authority
and duties specified in Article X hereof;
(c) the Trustee, which shall have the authority and duties
specified in Article IX hereof and the Trust Agreement; and, in addition,
the authority and duties of the Administrative Committee in the event that
no such Committee shall be appointed or constituted by the Company; and
(d) any investment manager or managers selected by the Company,
who renders investment advice with respect to Plan assets.
8.2 EMPLOYMENT OF ADVISERS
A "named fiduciary" with respect to the Plan (as defined in ERISA (S)
402(a)(2)) and any "fiduciary" (as defined in ERISA (S) 3(21)) appointed by such
a "named fiduciary", may employ one or more persons to render advice with regard
to any responsibility of such "named fiduciary" or "fiduciary" under the Plan.
8.3 MULTIPLE FIDUCIARY CAPACITIES
Any "named fiduciary" with respect to the Plan (as defined in ERISA (S)
402(a)(2)) and any other "fiduciary" (as defined in ERISA (S) 3(21)) with
respect to the Plan may serve in more than one fiduciary capacity.
VIII-1
<PAGE>
8.4 RELIANCE
Any fiduciary with respect to the Plan may rely upon any direction,
information or action of any other fiduciary, acting within the scope of its
responsibilities under the Plan, as being proper under the Plan.
8.5 SCOPE OF AUTHORITY AND RESPONSIBILITY
The responsibilities of the Administrative Committee and the Trustee for
the operation and administration of the Plan are allocated between them in
accordance with the provisions of the Plan and the Trust Agreement wherein their
respective duties are specified. Each fiduciary shall have only the authority
and duties as are specifically given to it under this Plan, shall be responsible
for the proper exercise of its own authorities and duties, and shall not be
responsible for any act or failure to act of any other fiduciary.
VIII-2
<PAGE>
ARTICLE IX - TRUSTEE
9.1 TRUST AGREEMENT
The Company shall enter into one or more Trust Agreements with the Trustee
or Trustees selected by it in its sole discretion, and the Trustee shall receive
the contributions to the Trust Fund made by the Employer pursuant to the Plan
and shall hold, invest, reinvest, and distribute such fund, as applicable, in
accordance with the terms and provisions of the Trust Agreement. The Company
will determine the form and terms of such Trust Agreement and may modify such
Trust Agreement from time to time to accomplish the purposes of this Plan and
may, in its sole discretion, remove any Trustee and select any successor
Trustee.
9.2 ASSETS IN TRUST
Except as otherwise permitted under the Plan, all assets of the Plan shall
be held in trust by the Trustee who upon acceptance of such office shall have
such authority as is set forth in the Trust Agreement.
IX-1
<PAGE>
ARTICLE X - ADMINISTRATIVE COMMITTEE
10.1 APPOINTMENT AND REMOVAL OF ADMINISTRATIVE COMMITTEE
The administration of the Plan shall be vested in an Administrative
Committee of at least three (3) persons who shall be appointed by the Board, and
may include persons who are not Participants in the Plan. A person appointed a
member of the Committee shall signify his acceptance in writing. The Board may
remove or replace any member of the Committee at any time in its sole
discretion, and any Committee member may resign by delivering his written
resignation to the Board, which resignation shall become effective upon its
delivery or at any later date specified therein. If at any time there shall be a
vacancy in the membership of the Committee, the remaining member or members of
the Committee shall continue to act until such vacancy is filled by action of
the Board.
10.2 OFFICERS OF ADMINISTRATIVE COMMITTEE
The Committee shall appoint from among its members a chairman, and shall
appoint as secretary a person who may be, but need not be, a member of the
Committee or a Participant in the Plan.
10.3 ACTION BY ADMINISTRATIVE COMMITTEE
The Committee shall hold meetings upon such notice, at such place or
places, and at such times as its members may from time to time determine. A
majority of its members at the time in office shall constitute a quorum for the
transaction of business. All action taken by the Committee at any meeting shall
be by vote of the majority of its members present at such meeting, except that
the Committee also may act without a meeting by a consent signed by a majority
of its members. Any member of the Committee who is a Participant in the Plan
shall not vote on any question relating exclusively to himself.
10.4 RULES AND REGULATIONS
Subject to the terms of the Plan, the Committee may from time to time
adopt such rules and regulations as it shall deem appropriate for the
administration of the Plan and for the conduct and transaction of its business
and affairs.
X-1
<PAGE>
10.5 POWERS
The Committee shall have such powers as may be necessary to discharge its
duties under the Plan, including the power:
(a) to interpret and construe the Plan in its discretion, to
determine all questions with regard to employment, eligibility, Years of
Service, Compensation, benefits, and such factual matters as date of birth
and marital status, and similarly related matters for the purpose of the
Plan. The Committee's determination of all questions arising under the
Plan shall be conclusive upon all Participants, the Board, the Company,
Employers, the Trustee, and other interested parties;
(b) to prescribe procedures to be followed by Participants and
Beneficiaries filing application for benefits;
(c) to prepare and distribute to Participants information
explaining the Plan;
(d) to appoint or employ individuals to assist in the
administration of the Plan and any other agents it deems advisable,
including legal, accounting and actuarial counsel;
(e) to instruct the Trustee to make benefit payments pursuant to
the Plan;
(f) to appoint an enrolled actuary and to receive and review the
periodic valuation of the Plan made by such actuary;
(g) to receive and review reports of disbursements from the Trust
Fund made by the Trustees; and
(h) to receive and review the periodic audit of the Plan made by
a certified public accountant appointed by the Company.
10.6 INFORMATION FROM PARTICIPANTS
Each Participant shall be required to furnish to the Committee, in the
form prescribed by it, such personal data, affidavits, authorizations to obtain
information, and other information as the Committee may deem appropriate for the
proper administration of the Plan.
X-2
<PAGE>
10.7 REPORTS
The Committee shall prepare, or cause to be prepared, such periodic
reports to the U.S. Labor Department, the Internal Revenue Service and the
Pension Benefit Guaranty Corporation as may be required pursuant to the Code or
ERISA.
10.8 AUTHORITY TO ACT
The Committee may authorize one or more of its members, officers, or
agents to sign on its behalf any of its instructions, directions, notifications,
or communications to the Trustee, and the Trustee may conclusively rely thereon
and on the information contained therein.
10.9 LIABILITY FOR ACTS
The members of the Committee shall be entitled to rely upon all
valuations, certificates and reports furnished by the Plan actuary or accountant
and upon all opinions given by any legal counsel selected by the Committee, and
the members of the Committee shall be fully protected with respect to any action
taken or suffered by their having relied in good faith upon such actuary,
accountant or counsel and all action so taken or suffered shall be conclusive
upon each of them and upon all Participants and their Beneficiaries. No member
of the Committee shall incur any liability for anything done or omitted by him
except only liability for his own gross negligence or willful misconduct.
10.10 COMPENSATION AND EXPENSES
Unless authorized by the Board, a member or officer of the Committee shall
not be compensated for his service in such capacity, but shall be reimbursed for
reasonable expenses incident to the performance of such duty.
10.11 INDEMNITY
The Company shall indemnify the members of the Committee and any of their
agents acting in behalf of the Plan against any and all liabilities or expenses,
including all legal fees related thereto, to which they may be subjected as
members of the Committee by reason of any act or failure to act which
constitutes a breach or an alleged breach of fiduciary responsibility under
ERISA or otherwise, except that due to a person's own willful misconduct.
X-3
<PAGE>
10.12 DENIED CLAIMS
If any application for payment of a benefit under the Plan shall be
denied, the Committee shall with the denial write the claimant setting forth the
specific reasons for the denial and explaining the Plan's claim review
procedure. If a claimant whose claim has been denied wishes further
consideration of his claim, he may request the Committee to review his claim in
a written statement of the claimant's position filed with the Committee no later
than 60 days after the claimant receives such denial. The Committee shall make a
full review of the claim and the denial, giving the claimant written notice of
its decision within the next 60 days. Due to special circumstances, if no
decision has been made within the first 60 days and notice of the need for
additional time has been furnished within such period, the decision may be made
within the following 60 days. A claimant shall be required to exhaust the
administrative remedies provided by this Section 10.12 prior to seeking any
other form of relief.
X-4
<PAGE>
ARTICLE XI - INVESTMENT OF CONTRIBUTIONS; MANAGEMENT OF ACCOUNTS
11.1 INITIAL INVESTMENT ELECTION
Prior to the date an Eligible Employee is first eligible to become a
Participant under Section 2.1.1, the Administrator will inform him of the
Investments available under the Plan for investment of Accounts and will make
available to him a prospectus for each Investment. At least ten days prior to
the date an Eligible Employee becomes a Participant hereunder, he must make an
initial investment election which will apply to the investment of his
Participant Contributions and Employer Contributions made with respect to him.
Separate investment elections with respect to his Participant Contributions and
Employer Contributions may not be made. A Participant's initial investment
election will be made in accordance with Section 2.1.3 and will be limited to
the following:
(a) Option One:
(1) 100% in a single Investment,
(2) 75% in one Investment and 25% in another, or
(3) 50% in each of two Investments.
Within Option One, all Participant and Employer Contributions
will be directed in the percentage(s) chosen.
(b) Option Two: 100% of Basic Participant Contributions and Employer
Contributions in one Investment, and 100% of Supplementary Participant
Contributions in another Investment.
The election of Investments is the sole responsibility of each Participant and
no Employer or representative of the Employer including the Administrator is
authorized to make any recommendation to the Participant with respect thereto.
Contributions to be invested in Investment Company Shares will be so
invested and credited to the Accounts of a Participant on the Valuation Date
that falls within the next Valuation Period commencing after the date on which
the contributions are made, at the closing price for such Shares determined in
accordance with the current prospectus of the Investment Company. Contributions
to be invested in Company Stock or Torchmark Stock will be so invested during
the next Valuation Period commencing after the date on which the contributions
XI-1
<PAGE>
are made, and credited to the accounts of a Participant on the Valuation Date
that falls within the Valuation Period following the Valuation Period during
which purchases are made, at the average price per share paid or received by the
Trustee for shares purchased or sold during such Valuation Period, including the
cost of brokerage commissions, transfer taxes and any other transaction costs.
11.2 CHANGE IN INVESTMENT ELECTION FOR CONTRIBUTIONS
A Participant may elect to change his investment election with respect to
investment of Participant Contributions and Employer Contributions to be made
during any Valuation Period and thereafter by giving notice in writing to the
Administrator before the first day of the Valuation Period for which the
Participant wishes such change to be made. Only one such change may be made in a
single Valuation Period; such change may not be made more frequently than eight
times in a calendar year (or such other limits as may be established from time
to time by the Company), except as otherwise provided in this section. Such
change will be limited to the investment choices described in Section 11.1. In
addition, the total number of Investments selected by a Participant under the
Plan at any time cannot exceed four, or such other number as determined from
time to time by the Administrator and communicated to Participants. Separate
changes of investment elections with respect to Participant Contributions and
Employer Contributions may not be made. Such change will become effective for
the Valuation Period commencing on or after the date of receipt of the election.
11.3 TRANSFER OF INVESTMENT ACCOUNTS
A Participant may, not more than eight times in a calendar year (or such
other limits as may be established from time to time by the Company), elect to
transfer any whole percentage of the value of an investment in his Participant
Contributions Subaccount and Employer Contributions Subaccount from one
Investment to one other Investment. Only one such change may be made in any
Valuation Period. Separate elections to transfer amounts in the Participant
Contributions Subaccount and Employer Contributions Subaccount may not be made.
In addition, the total number of Investments selected by the Participant under
the Plan at any time cannot exceed four (or such other limits as may be
established from time to time by the Company). The Participant's election to
transfer must be made in writing to the Administrator.
XI-2
<PAGE>
If the Administrator receives an election to transfer an Investment out of
Investment Company Shares, or from Shares of one Investment Company to shares of
another Investment Company, the transfer will be effected by redeeming, or
redeeming and purchasing, the requested amount from the Investment Company on
the Valuation Date that falls within the next Valuation Period commencing after
the date of receipt of the election.
If the Administrator receives an election to transfer an Investment out of
or into the Company Stock Account or out of the Torchmark Stock Account the
transfer will be effected by selling or purchasing the required number of shares
of Company Stock or Torchmark Stock (or netting sales or purchases against other
required purchases or sales) during the first Valuation Period commencing after
the date of receipt of the election. All transfers out of or into the Company
Stock Account or out of the Torchmark Stock Account will be settled on the
Valuation Date that falls within the Valuation Period following the Valuation
Period during which the shares are sold, purchased, or netted, using the average
price paid or received by the Trustee in purchases or sales of Company Stock or
Torchmark Stock during the Valuation Period in which the shares are sold,
purchased, or netted.
11.4 REINVESTMENT
11.4.1 All dividends and capital gains or other distributions received
on the Investment Company Shares held for each Participant's Account will
(unless received in additional Investment Company Shares) be reinvested in full
and fractional Shares of the same Investment Company at a price determined in
accordance with the then current prospectus of the Investment Company.
11.4.2 All dividends, interest and other distributions received on
assets of the Company Stock Account held for each Participant's Account will
(unless received in additional Company Shares or in the shares of an Affiliate)
be reinvested in full and fractional shares of the same investment in the
Company Stock Account.
The shares so received or purchased upon such reinvestment will be credited
to such Account. If any dividends or capital gain or other distributions may be
received at the election of the shareholder in additional shares or in cash or
other property, the Trustee will elect to receive such dividends or
distributions in additional shares.
11.4.3 All dividends, interest and other distributions received on
assets of the Torchmark
XI-3
<PAGE>
Stock Account held for each Participant's Account will (unless received in
additional Torchmark Shares or in the shares of an Affiliate) be reinvested in
full and fractional Investment Company Shares according to the Participant's
current investment election.
Effective as of the date of conclusion of the initial public offering for
the Class A common stock of Waddell & Reed Financial, Inc., a Participant may
not elect to further invest any portion of his Account in the Torchmark Stock
Account and may not elect to have further Participant Contributions or Employer
Contributions invested in the Torchmark Stock Account. Effective as of the date
of conclusion of the initial public offering of Waddell & Reed Financial, Inc.
Class A common stock, a Participant may elect to transfer funds out of the
Torchmark Stock Account according to the procedures set forth in Section 11.2,
but may not elect to transfer funds into that account.
11.5 VOTING OF SHARES OF INVESTMENTS
Subject to any requirements of applicable law, the Administrator will
deliver to each Participant copies of any notices of shareholders' meetings,
proxies and proxy-soliciting materials, prospectuses and the annual and other
reports to shareholders which have been received with respect to Investments
held by the Trustee for the account of the Participant.
Each Participant may direct the Administrator to direct the Trustee to vote
the Investment Company Shares (including fractional shares) held by the Trustee
under the Plan for his Account and the Company Shares or Torchmark Shares held
by the Trustee under the Plan for his Account with respect to matters to be
voted upon by the shareholders of such Investment. The Participant's directions
must be in writing, on a form approved by the Administrator, and delivered to
the Administrator within the time prescribed by it. With respect to Shares of
Investments for which the Administrator receives no written directions from the
Participants, the Administrator will direct the Trustee to vote such Shares in
the same proportion as the shares instructed by the Participants.
11.6 VALUATION OF ACCOUNTS
A Participant's Accounts shall be revalued at fair market value on the last
business day of each Plan Year and at such other times as the Administrator
determines. On such date, the Administrator will determine the current value of
the Investments held for each Participant's
XI-4
<PAGE>
Employer Contributions Subaccount and Participant Contributions Subaccount and
report the same in writing to the Participant.
11.7 DISTRIBUTIONS OR WITHDRAWALS
If the Administrator receives a request for withdrawal or distribution of
an Investment out of Investment Company Shares, the withdrawal or distribution
will be effected by redeeming the requested amount, or transferring the required
number of Investment Company Shares if a distribution in kind is requested, from
the Investment Company on the Valuation Date that falls within the next
Valuation Period commencing after the date of receipt of the request.
If the Administrator receives a request for withdrawal or distribution of
an Investment out of the Company Stock Account, the withdrawal or distribution
will be effected by selling, or transferring if a withdrawal or distribution in
kind is requested, the required number of shares of Company Stock (or netting
sales against other required purchases) during the next Valuation Period
commencing after the date of receipt of the request. All withdrawals or
distributions out of the Company Stock Account will be settled on the Valuation
Date that falls within the Valuation Period following the Valuation Period
during which the shares are sold, netted or transferred, using the average price
paid or received by the Trustee in purchases or sales or Company Stock during
the Valuation Period in which the shares are sold, netted, or transferred.
XI-5
<PAGE>
ARTICLE XII - PLAN AMENDMENT OR TERMINATION
12.1 PLAN AMENDMENT OR TERMINATION
The Company shall have the right at any time to amend the Plan, which
amendment shall be evidenced by an instrument in writing signed by an authorized
officer of the Company, effective retroactively or otherwise. No such amendment
shall have any of the effects specified in Section 12.2.
12.2 LIMITATIONS ON PLAN AMENDMENT
No Plan amendment shall:
(a) authorize any part of the Trust Fund to be used for, or
diverted to, purposes other than for the exclusive benefit of Participants
or their Beneficiaries;
(b) decrease the accrued benefits of any Participant or his
Beneficiary under the Plan (except to the extent permitted under Code (S)
412(c)(8)); or
(c) change the vesting schedule, either directly or indirectly,
unless each Participant having not less than three years of Vesting Service
is permitted to elect, within a reasonable period specified by the
Administrator after the adoption of such amendment, to have his vested
percentage computed without regard to such amendment.
The period during which the election may be made shall commence with the date
the amendment is adopted and shall end as the later of:
(i) sixty days after the amendment is adopted;
(ii) sixty days after the amendment becomes effective; or
(iii) sixty days after the Participant is issued written notice
by the Administrator.
XII-1
<PAGE>
12.3 RIGHT OF COMPANY TO TERMINATE PLAN OR DISCONTINUE CONTRIBUTIONS
The Company intends and expects that from year to year it will be able to
and will deem it advisable to continue this Plan in effect and to make
contributions as herein provided. The Company reserves the right, however, to
terminate the Plan at any time or to completely discontinue its contributions
thereto at any time, which termination or discontinuance shall be evidenced by
an instrument in writing signed by an authorized officer of the Company
delivered to the Administrator and the Trustee.
12.4 EFFECT OF PARTIAL OR COMPLETE TERMINATION OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS
12.4.1 As of the date of a "partial termination" of the Plan:
(a) if not then fully vested, each affected Participant who is
then an Employee shall become 100% vested in his or her Employer
Contributions Subaccount; and
(b) no further contributions or allocations of forfeitures shall
be made after such date with respect to each affected Participant.
12.4.2 As of the date of the "complete termination" of the Plan, or the
"complete discontinuance of contributions" under the Plan:
(a) if not then fully vested, each affected Participant who is
then an Employee shall become 100% vested in his Employer Contributions
Subaccount;
(b) any forfeitures which may have occurred in accordance with
Section 4.3 prior to the termination of the Plan but which have not been
applied to reduce Employer Contributions under Section 3.7.2 shall be
allocated pro-rata to those Participants who were Eligible Employees on the
effective date of the termination of the Plan;
(c) no further contributions shall be made after such date; and
(d) no Eligible Employee shall become a Participant after such
date. 12.4.3 All other provisions of the Plan shall remain in effect unless
otherwise amended.
XII-2
<PAGE>
ARTICLE XIII - MISCELLANEOUS PROVISIONS
13.1 EXCLUSIVE BENEFIT OF PARTICIPANTS
The Trust Fund shall be held for the benefit of all persons who shall be
entitled to receive payments under the Plan. It shall be prohibited at any time
for any part of the Trust Fund (other than such part as is required to pay
expenses) to be used for, or diverted to, purposes other than for the exclusive
benefit of Participants or their Beneficiaries.
13.2 PLAN NOT A CONTRACT OF EMPLOYMENT
The Plan is not a contract of Employment, and the terms of Employment of
any Employee shall not be affected in any way by the Plan or related instruments
except as specifically provided therein.
13.3 SOURCE OF BENEFITS
Benefits under the Plan shall be paid or provided for solely from the
Trust, and neither the Company, an Employer, the Administrator, Trustee or
Investment Manager shall assume any liability therefor.
13.4 BENEFITS NOT ASSIGNABLE
Benefits provided under the Plan may not be assigned or alienated, either
voluntarily or involuntarily. The preceding sentence shall also apply to the
creation, assignment or recognition of a right to any benefit payable with
respect to a Participant pursuant to a "domestic relations order" (as defined in
Code (S) 414(p)) unless such order is determined by the Administrator to be a
"qualified domestic relations order" (as defined in Code (S) 414(p)) or, in the
case of a "domestic relations order" entered before January 1, 1985, if either
payment of benefits pursuant to the order has commenced as of that date or the
Administrator decides to treat such order as a "qualified domestic relations
order" within the meaning of Code (S) 414(p) even if it does not otherwise
qualify as such.
XIII-1
<PAGE>
13.5 DOMESTIC RELATIONS ORDERS
Any other provision of the Plan to the contrary notwithstanding, the
Administrator shall have all powers necessary with respect to the Plan for the
proper operation of Code (S) 414(p) with respect to "qualified domestic
relations orders" (or "domestic relations orders" treated as such) referred to
in Section 13.4, including, but not limited to, the power to establish all
necessary or appropriate procedures, to authorize the establishment of new
accounts with such assets and subject to such restrictions as the Administrator
may deem appropriate, and the Administrator may decide upon and direct
appropriate distributions therefrom.
13.6 BENEFITS PAYABLE TO MINORS, INCOMPETENTS AND OTHERS
In the event any benefit is payable to a minor or an incompetent or to a
person otherwise under a legal disability, or who, in the sole discretion of the
Administrator, is by reason of advanced age, illness or other physical or mental
incapacity incapable of handling and disposing of his property, or otherwise is
in such position or condition that the Administrator believes that he could not
utilize the benefit for his support or welfare, the Administrator shall have
discretion to apply the whole or any part of such benefit directly to the care,
comfort, maintenance, support, education or use of such person, or pay the whole
or any part of such benefit to the parent of such person, the guardian,
committee, conservator or other legal representative, wherever appointed, of
such person, the person with whom such person is residing, or to any other
person having the care and control of such person. The receipt by any such
person to whom any such payment on behalf of any Participant or Beneficiary is
made shall be a sufficient discharge therefor.
13.7 MERGER OR TRANSFER OF ASSETS
13.7.1 The merger or consolidation of the Company with any other person,
or the transfer of the assets of the Company to any other person, shall not
constitute a termination of the Plan, if provision is made for the continuation
of the Plan.
13.7.2 The Plan may not merge or consolidate with, or transfer any assets
or liabilities to, any other plan, unless each Participant would (if the Plan
then terminated) receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or
XIII-2
<PAGE>
transfer (if the Plan had then terminated).
13.8 PARTICIPATION IN THE PLAN BY AN AFFILIATE
13.8.1 By duly authorized action, an Affiliate may adopt the Plan. Such
Affiliate by duly authorized action also may determine the classes of its
Employees who shall be Eligible Employees. Such Affiliate shall make such
contributions to the Plan on behalf of such Employees as is determined by the
Company. If no such action is taken, the Eligible Employees and the amount of
contribution shall be determined in accordance with the Plan provisions
applicable to an Employer.
13.8.2 By duly authorized action, any other Employer may terminate its
participation in the Plan or withdraw from the Plan and the Trust.
13.8.3 An Employer other than the Company shall have no power with
respect to the Plan except as specifically provided by this Section 13.8.
13.9 ACTION BY EMPLOYER
Any action required to be taken by an Employer pursuant to the terms of
the Plan shall be taken by the board of directors of the Employer or any person
or persons duly empowered to exercise the powers of the Employer with respect to
the Plan.
13.10 PROVISION OF INFORMATION
For purposes of the Plan, each Employee shall execute such forms as may be
reasonably required by the Administrator and the Employee shall make available
to the Administrator and the Trustee any information they may reasonably request
in this regard.
13.11 CONTROLLING LAW
The Plan is intended to qualify under Code (S) 401(a) and to comply with
ERISA, and its terms shall be interpreted accordingly. Otherwise, to the extent
not preempted by ERISA, the laws of the State of Kansas shall control the
interpretation and performance of the terms of the Plan.
XIII-3
<PAGE>
13.12 CONDITIONAL RESTATEMENT
Anything in the foregoing to the contrary notwithstanding, the Plan has
been restated on the express condition that it will be considered by the
Internal Revenue Service as qualifying under the provisions of Code (S) 401(a)
and the Trust qualifying for exemption from taxation under Code (S) 501(a). If
the Internal Revenue Service determines that the Plan or Trust does not so
qualify, the Plan shall be amended or terminated as decided by the Company.
13.13 RULES OF CONSTRUCTION
Masculine pronouns used herein shall refer to men or women or both and
nouns and pronouns when stated in the singular shall include the plural and when
stated in the plural shall include the singular, unless qualified by the
context. Titles of Articles and Sections of the Plan are for convenience of
reference only and are to be disregarded in applying the provisions of the Plan.
Any reference in this Plan to an Article or Section is to the Article or Section
so specified of the Plan.
IN WITNESS WHEREOF, Waddell & Reed Financial, Inc. has caused this Plan to
be restated, effective as of March 1, 1998.
WADDELL & REED FINANCIAL, INC.
By: /s/ William D. Howey, Jr.
--------------------------------------
ATTEST:
/s/ Sharon Pappas
- ----------------------------
XIII-4
<PAGE>
APPENDIX A - TOP-HEAVY PROVISIONS
A. As used in this Appendix A, each of the following terms shall have the
meanings for that term set forth below:
(a) Defined Benefit Plan means, a plan of the type defined in Code
--------------------
(S) 414(j) maintained by the Company or an Affiliate, as applicable.
(b) Defined Contribution Plan means, a plan of the type defined in
-------------------------
Code (S) 414(i) maintained by the Company or an Affiliate, as applicable.
(c) Determination Date means, for any Plan Year subsequent to the
------------------
first Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, Determination Date means the last day of that year.
(d) Determination Period means the Plan Year containing the
--------------------
Determination Date and the four preceding Plan Years.
(e) Key Employee means any Employee or former Employee (and the
------------
Beneficiaries of such Employee) who at any time during the Determination Period
was:
(i) an officer of an Employer having Limitation Compensation
greater than 50% of the dollar limitation under Code (S) 415(b)(1)(A) for
any Plan Year within the Determination Period,
(ii) an owner (or individual considered an owner under Code (S)
318) of one of the ten largest interests in an Employer if such
individual's Limitation Compensation exceeds 100% of the dollar limitation
in effect under Code (S) 415(c)(1)(A),
(iii) a "5-percent owner" (as defined in Code (S) 416(i)) of an
Employer, or
(iv) a "1-percent owner" (as defined in Code (S) 416(i)) of an
Employer who has Limitation Compensation of more than $150,000.
(f) Limitation Compensation means, for an Employee, the Employee's
-----------------------
earned income, wages, salaries, fees for professional services and other amounts
received for personal services actually rendered in the course of Employment
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses); amounts described in Code (S)(S) 104(a)(3), 105(a)
and 105(h) to the extent includable in the Employee's gross income; amounts
described
Appendix-1
<PAGE>
in Code (S) 105(d) whether or not excludable from the Employee's gross income;
reimbursed non-deductible moving expenses; the value of nonqualified stock
options to the extent includable in the Employee's gross income in the year of
grant; the amount includable in the Employee's gross income pursuant to an
election under Code (S) 83(b); distributions from an unfunded, non-qualified
plan of deferred compensation; and excluding the following:
(i) contributions to a plan of deferred compensation which are
not includible in the Employee's gross income for the taxable year in which
contributed, or contributions under a "simplified employee pension" (within
the meaning of Code (S) 408(k)) to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation (other than an unfunded non-qualified plan);
(ii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or other property) held by the Employee
either becomes freely "transferable" or is no longer subject to a
"substantial risk of forfeiture" (both quoted terms within the meaning of
Code (S) 83(a));
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) other amounts which received special tax benefits, or
contributions made (whether or not under a salary reduction agreement)
towards the purchase of an annuity described in Code (S) 403(b) (whether or
not the amounts are actually excludable from the gross income of the
Employee).
(g) Non-Key Employee means any Employee who is not a Key Employee.
----------------
(h) Permissive Aggregation Group means the Required Aggregation Group
----------------------------
of plans plus any other plan or plans of the Company or an Affiliate which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of Code (S)(S) 401(a)(4) and 410.
(i) Required Aggregation Group means (i) each Qualified Plan of an
--------------------------
Employer in which at least one Key Employee participates, and (ii) any other
Qualified Plan of an Employer which enables a plan described in (i) to meet the
requirements of Code (S)(S) 401(a)(4) and 410.
(j) Super Top-Heavy Plan means, for any Plan Year beginning after
--------------------
December
Appendix-2
<PAGE>
31, 1983, the Plan if any Top-Heavy Ratio as determined under the definition of
Top-Heavy Plan exceeds 90%.
(k) Top-Heavy Plan means, for any Plan Year beginning after December
--------------
31, 1983, the Plan if any of the following conditions exists:
(i) If the Top-Heavy Ratio for the Plan exceeds sixty percent
and the Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(ii) If the Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the Required Aggregation Group of plans exceeds sixty percent.
(iii) If the Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds sixty percent.
(l) Top-Heavy Ratio means,
---------------
(i) If the Company or an Affiliate maintains one or more Defined
Benefit Plans and the Company or an Affiliate has never maintained any
Defined Contribution Plan (including any "simplified employee pension"
within the meaning of Code (S) 408(k)) which during the five-year period
ending on the Determination Date has or has had account balances, the Top-
Heavy Ratio for the Plan alone or for the Required or Permissive
Aggregation Group, as appropriate, is a fraction, the numerator of which is
the sum of the present values of accrued benefits under the aggregated
Defined Benefit Plans of all Key Employees as of the respective
Determination Date for each plan (including any part of any accrued benefit
distributed in the five-year period ending on the Determination Date), and
the denominator of which is the sum of the present values of all accrued
benefits under the aggregated Defined Benefit Plans as of the respective
Determination Date for each plan (including any part of any accrued benefit
distributed in the five-year period ending on the Determination Date)
determined in accordance with Code (S) 416.
(ii) If the Company or an Affiliate maintains one or more Defined
Benefit Plans and the Company or an Affiliate maintains or has maintained
one or more Defined Contribution Plans (including any "simplified employee
pension" within the
Appendix-3
<PAGE>
meaning of Code (S) 408(k)) which during the five-year period ending on the
Determination Date has or has had any account balances, the Top-Heavy Ratio
for any Required or Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the present value of accrued
benefits under the aggregated Defined Benefit Plans for all Key Employees,
determined in accordance with (i) above, plus the sum of account balances
under the aggregated Defined Contribution Plans for all Key Employees as of
the respective Determination Date for each plan, and the denominator of
which is the sum of the present value of all accrued benefits under the
aggregated Defined Benefit Plans, determined in accordance with (i) above,
plus the sum of all account balances under the aggregated Defined
Contribution Plans for all Participants as of the respective Determination
Date for each plan, all determined in accordance with Code (S) 416. The
account balances under a Defined Contribution Plan in both the numerator
and denominator of the Top-Heavy Ratio are adjusted for any distribution of
any account balance made in the five-year period ending on the
Determination Date.
(iii) For purposes of (i) and (ii) above, the value of account
balances and the present value of accrued benefits will be determined as of
the most recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Code (S) 416
for the first and second plan year of a Defined Benefit Plan. The account
balances and accrued benefits of a Participant (A) who is a Non-Key
Employee but who was a Key Employee in a prior year, or (B) who has not
been credited with at least one Hour of Service with any Employer at any
time during the five-year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are taken into account will
be made in accordance with Code (S) 416. Deductible employee contributions
will not be taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the respective Determination
Dates for the aggregated plans that fall within the same calendar year.
(iv) Solely for the purpose of determining if the Plan, or any
other plan included in a Required Aggregation Group of which this Plan is a
part, is Top-Heavy (within the meaning of Code (S) 416(g)) such
determination shall be made under (A) the
Appendix-4
<PAGE>
method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Employer, or (B) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Code (S) 411(b)(l)(C).
(m) Valuation Date means, the date as of which account balances, or
--------------
accrued benefits are valued for purposes of calculating the Top-Heavy Ratio.
B. If the Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy
Plan as of any Determination Date, then it shall be subject to the rules set
forth in this Appendix A, beginning with the first Plan Year commencing after
such Determination Date.
C. For each Plan Year beginning before January 1, 1989 in which the Plan
is a Top-Heavy Plan or Super Top-Heavy Plan, Compensation for the purpose of
this Plan shall be limited to the first $200,000 (or such larger amount as may
be prescribed for the Plan Year involved pursuant to Code (S) 416(d)(2)) of the
amount that would otherwise have been Compensation.
D. (a) Except as provided in subparagraph (b) below and except if any
other Defined Contribution Plan or Defined Benefit Plan provides such minimum
benefit to the Participant, for any Plan Year in which the Plan is a Top-Heavy
Plan, contributions and forfeitures allocated to the Employer Contributions
Account of any Participant who is not a Key Employee, whether or not such
Participant has completed 1,000 Hours of Service in that Plan Year and whether
or not such Participant has elected to participate in the Plan, in respect of
that Plan Year shall not be less than the smaller of:
(i) three percent of such Participant's Limitation Compensation
as defined in this Appendix A or,
(ii) the largest percentage of contributions and forfeitures, as
a percentage of the Key Employee's compensation, allocated in the aggregate
to the Employer Contributions Account of any Key Employee for that year.
(b) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer or an Affiliate on the last day of the Plan
Year.
E. If the Plan is a Top-Heavy Plan for any Plan Year, then the maximum
benefit which can be provided under Code (S) 415 shall be determined by
substituting "1.00" for "1.25" in Code (S) 415(e)(2)(B) and (3)(B), unless the
Plan meets the requirements of Code (S) 416(h)(2)(B) and the Administrator
increases the minimum rate of benefit accrual provided in
Appendix-5
<PAGE>
Section D by one percent.
F. Beginning with the Plan Year in which this Plan is Top-Heavy, the
following vesting schedule will apply:
Completed Years of Vested
Vesting Service Percentage
------------------ ----------
2 20%
3 40%
4 60%
5 100%
G. In the event that any provision of this Appendix A is no longer
required to qualify the Plan under the Code, then such provision shall thereupon
be void without the necessity of further amendment of the Plan.
Appendix-6
<PAGE>
Appendix-7
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Waddell & Reed Financial, Inc.
We consent to incorporation by reference in the Registration Statement on Form
S-8 for the Waddell & Reed Financial, Inc. Savings and Investment Plan (formerly
known as United Investors Management Company Savings and Investment Plan) of our
report dated May 2, 1997, relating to the statements of net assets available for
benefits of Waddell & Reed Financial, Inc. Savings and Investment Plan as of
December 31, 1996 and 1995, and the related statements of changes in net assets
available for benefits and schedules for each of the years in the three-year
period ended December 31, 1996.
KPMG Peat Marwick LLP
Kansas City, Missouri
March 5, 1998
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ David L. Boren
------------------------------------
David L. Boren
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Joseph M. Farley
------------------------------------
Joseph M. Farley
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Louis T. Hagopian
------------------------------------
Louis T. Hagopian
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Robert L. Hechler
------------------------------------
Robert L. Hechler
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Henry J. Herrmann
------------------------------------
Henry J. Herrmann
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Joseph L. Lanier, Jr.
------------------------------------
Joseph L. Lanier, Jr.
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Harold T. McCormick
------------------------------------
Harold T. McCormick
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ George J. Records
------------------------------------
George J. Records
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ R. K. Richey
------------------------------------
R. K. Richey
Director
Date: March 9, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
constitutes and appoints E. Duncan Hamilton and Carol A. McCoy, and each of them
severally, his true and lawful attorneys-in-fact for him and in his name, place
and stead, in any and all capacities, to sign the Form S-8 Registration
Statement for the Waddell & Reed Financial, Inc. Savings and Investment Plan and
any and all amendments and post-effective amendments thereto, and to file the
same with all exhibits thereto and other documents required in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Keith A. Tucker
------------------------------------
Keith A. Tucker
Director
Date: March 9, 1998
