<PAGE>
As filed with the Securities and Exchange Commission on October 16, 1998.
Registration No. 333-
- --------------------------------------------------------------------------------
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
OVERLAND PARK, KANSAS
66202
(913) 236-2000
(Address of Principal Executive Offices, including Zip Code)
--------------------
1998 EXECUTIVE DEFERRED COMPENSATION STOCK OPTION PLAN,
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN AND
1998 STOCK INCENTIVE PLAN
(Full Title of the Plans)
--------------------
SHARON K. PAPPAS COPY TO:
GENERAL COUNSEL AND SECRETARY ALAN J. BOGDANOW
WADDELL & REED FINANCIAL, INC. HUGHES & LUCE, L.L.P.
6300 LAMAR AVENUE 1717 MAIN STREET, SUITE 2800
OVERLAND PARK, KANSAS 66202 DALLAS, TEXAS 75201
(913) 236-2000 (214) 939-5500
(Name, Address, and Telephone Number,
including Area Code, of Agent for Service)
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED/1/ PER SHARE/2/ OFFERING PRICE/2/ FEE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common
Stock, $.01 par 16,300,000 $17.16 $279,708,000 $82,514
value
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) This registration statement also covers an indeterminate additional amount
of shares of the Registrant's Class A Common Stock to be offered or sold
pursuant to the antidilution provisions of the 1998 Executive Deferred
Compensation Stock Option Plan, 1998 Non-Employee Director Stock Option
Plan and 1998 Stock Incentive Plan.
(2) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the high and low price paid per share of the Class
A Common Stock, as reported on the New York Stock Exchange on October 9,
1998, in accordance with Rules 457(c) and (h)(1) promulgated under the
Securities Act of 1933, as amended.
<PAGE>
WADDELL & REED FINANCIAL, INC.
297,174 SHARES
CLASS A COMMON STOCK
Our stockholders identified below under the caption "Selling
Stockholders" may offer to sell up to 297,174 shares of our Class A common
stock.
We have already issued to the selling stockholders the shares being
offered by the selling stockholders, or we will issue the shares being offered
by the selling stockholders prior to the sale of the shares. This offering is
not part of the original issuance of the shares of Class A common stock. We
will not receive any of the proceeds from the selling stockholder's sale of
their shares. The selling stockholders may offer the shares in transactions on
the New York Stock Exchange, in negotiated transactions, or through a
combination of these methods. The selling stockholders may offer the shares at
prices relating to the prevailing market prices or at negotiated prices.
The Class A common stock is quoted on the NYSE under the symbol "WDR."
On October 14, 1998 the last sale price of the Class A common stock, as reported
on the NYSE, was
$18.38 per share.
------------------------------------
Investing in the Class A common stock involves a high degree of risk. You
should purchase only if you can afford a complete loss. See "Risk Factors"
beginning on page 4.
------------------------------------
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if the prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
------------------------------------
You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone to provide you with
information that is different from that contained in this Prospectus. The
selling stockholders may offer to sell, and seek offers to buy, shares of Class
A common stock only in jurisdictions where offers and sales are permitted. The
information contained in this Prospectus is accurate only as of the date of this
Prospectus, regardless of the time of delivery of this Prospectus or of any sale
of the Class A common stock.
This Prospectus is dated October 16, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements,
information statements, and other information may be inspected without charge at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004
and at the following regional offices of the Commission: New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048; and
Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60606. Copies of such material may be obtained
from the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Information on the operation of
the Public Reference Section is available by calling the Commission at
1-800-SEC-0330. Reports, proxy statements, information statements and other
information can also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005. The Commission maintains a Web site that contains
information filed with the Commission. The Commission's Web site address is
http://www.sec.gov.
The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as it
may determine to furnish or as may be required by law.
The Company has filed with the Commission a Registration Statement on
Form S-8, (together with all exhibits thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Class A common stock offered hereby. This Prospectus
does not contain all information set forth in the Registration Statement.
Certain parts of the Registration Statement have been omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement which can be inspected at the public
reference rooms at the offices of the Commission.
2
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates). Requests should be directed to:
Waddell & Reed Financial, Inc.
6300 Lamar Avenue
Overland Park, Kansas 66202
Attn: Secretary
(913) 236-2000
The following documents previously filed with the Commission pursuant
to the Securities Act and the Exchange Act are incorporated herein by reference
and shall be deemed a part hereof:
(a) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998;
(c) The description of the Registrant's Class A common stock contained
in the Registrant's Registration Statement on Form 8-A, (the "Form 8-A") filed
with the Commission on February 27, 1998, including any amendment or report
filed for the purpose of updating such description; and
(d) All reports filed by the Registrant pursuant to Sections 13(a) or
15(d) of the Exchange Act, since the filing of the Form 8-A.
All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering relating to this
Prospectus will be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents. Any
statement incorporated or deemed to be incorporated by reference herein will be
deemed to be modified, replaced or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies, replaces or supersedes such statement. Any such statement so
modified, replaced or superseded will be deemed, except as so modified, replaced
or superseded, to constitute a part of this Prospectus.
3
<PAGE>
THE COMPANY
We were founded in 1937 and are the third oldest mutual fund complex
in the United States, having introduced the United family of funds in 1940. We
focus on selling investment products to middle income Americans through our
sales force. We are the exclusive underwriter and distributor of 36 mutual fund
portfolios. 17 of these funds make up the United Group of Mutual Funds, 8 make
up the Waddell & Reed Funds, Inc., and 11 make up the Target/United Funds, Inc.
We also distribute underwritten variable annuities and life insurance products
of Torchmark Corporation to our customers. We sell front-end loaded and
contingent deferred sales charge mutual fund products.
We are a Delaware corporation with our principal offices located at
6300 Lamar Avenue, Overland Park, Kansas 66202 (telephone number 913-236-2000).
RISK FACTORS
You should carefully consider the following risk factors and warnings
before making an investment decision. The risks described below are not the
only ones that we face. Additional risks that we do not yet know of or that we
currently think are immaterial may also impair our business operations. If any
of the following risks actually occur, our business, financial condition or
results of operations could be materially adversely affected. In such case, the
trading price of our Class A common stock could decline, and you may lose all or
part of your investment. You should also refer to the other information set
forth in this Prospectus.
This Prospectus contains forward-looking statements. These statements
refer to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "anticipates," "plans," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms and other
comparable terminology. These statements are only predictions. Actual events
or results may differ materially. In evaluating these statements, you should
specifically consider various factors, including the risks outlined below.
These factors may cause our actual results to differ materially from any
forward-looking statement.
POTENTIAL ADVERSE EFFECTS ON OUR BUSINESS FROM A DECLINE IN SECURITIES MARKETS
Our results of operations are affected by certain economic factors,
including the level of the securities markets. The United States securities
markets performed well for the last five years and the first half of 1998. This
performance attracted a substantial increase in the investments in these
markets, which benefited us and the funds. The United States securities markets
have, however, been highly volatile. Most equity market indices have declined
significantly since July 1998. In recent months the United States mutual fund
industry experienced net redemptions for the first time in several years. If
there is (1) a further decline in the securities markets (2) a failure of the
securities markets to return to prior levels or to sustain the levels of growth
achieved prior to July 1998 or (3) continued or additional short-term volatility
in the securities markets,
4
<PAGE>
there could be an adverse effect on our business. This could adversely and
materially affect the market price of the Class A common stock.
Because our revenues are largely based on the value of the assets that
we manage, a decline in the value of these assets would adversely affect our
revenues. Our growth is dependent to a significant degree upon the ability of
the funds to attract and retain mutual fund assets. This may be difficult if
there is an adverse economic environment. Our growth rate has varied from year
to year, and we cannot assure you that our recent growth rates will continue.
POTENTIAL ADVERSE EFFECTS ON OUR BUSINESS IF THE FUNDS' PERFORMANCE DECLINES
In order for us to succeed, the funds must have good investment
performance. Good performance generally leads to (1) selling more shares in our
funds, which results in higher revenues; (2) fewer owners of shares in the funds
redeeming those shares and (3) us obtaining additional private institutional
accounts, for which we may act as a subadvisor. If the funds have poor
investment performance, this generally leads to (1) selling less shares in our
funds; (2) more owners of shares in the funds redeeming those shares and (3)
private institutional accounts being withdrawn from us, with corresponding
decreases in our revenues. If the funds do not perform well, this could
adversely and materially affect the market price of the Class A common stock.
OUR CONTRACTS CONTAIN TERMINATION PROVISIONS AND RENEWALS RISKS
A substantial majority of our revenues are derived from investment
management agreements with the funds that are terminable on 60 days' notice. In
addition, the disinterested members of each fund's board or its shareholders
must annually approve and renew each investment management agreement. If the
board or shareholders of a significant number of the funds vote to terminate or
not renew the agreements, this could have a material adverse effect on our
business, financial condition and results of operations.
DIFFICULTIES IF WE CANNOT RECRUIT AND RETAIN KEY PERSONNEL AND SALES FORCE
Our future success depends to a substantial degree on our ability to
attract and retain qualified personnel to conduct our business. There is a
great deal of competition for qualified fund managers, investment analysts and
financial advisers, and this competition has increased in recent periods due to
the growth of the mutual fund management industry. We anticipate that it will
be necessary for us to add fund managers and investment analysts, and we have
adopted a strategy intended to attract and retain fund managers and investment
analysts. We cannot assure you, however, that we will be successful in our
efforts to recruit and retain the required personnel.
We are currently dependent on our sales force to sell our mutual fund
and other investment products. Our future growth will be directly affected by
the quality and quantity of financial advisers we are able to successfully
recruit and retain.
5
<PAGE>
WE HAVE COMPETITORS WITH GREATER RESOURCES
The mutual fund distribution and service and investment management
industries are very competitive and are undergoing substantial consolidations.
Many organizations in these industries are attempting to market to and service
the same clients as we are. These organizations offer mutual fund investments
and services and a wide range of other financial products and services. Many of
our competitors have more products and product lines, services and may also have
substantially greater assets under management and financial resources. Many
larger mutual fund complexes have developed relationships with brokerage houses
with large distribution networks, which may enable these fund complexes to reach
broader client bases.
WE MAY HAVE DIFFICULTIES IN EXECUTING OUR ACQUISITION STRATEGY
We have no history of finding, acquiring or integrating other
companies. We cannot assure you that we will (1) find suitable acquisition
candidates at acceptable prices, (2) have sufficient capital resources to
realize our acquisition strategy, (3) be successful in entering into definitive
agreements for desired acquisitions or (4) successfully integrate acquired
companies. We also cannot assure you that any such acquisitions, if
consummated, will be advantageous to us.
WE MAY NOT SUCCESSFULLY IMPLEMENT OUR NEW INFORMATION SYSTEMS
Some of our key information technology systems were developed solely
to handle our particular information technology infrastructure. We are in the
process of implementing new information technology and systems. We are
implementing these new systems both internally and through outsourcing the data
processing portion of our shareholder service functions. We believe that these
new systems could facilitate the acquisition and integration of other mutual
fund companies. We cannot, however, assure you that we will be successful in
implementing the new information technology and systems or that the
implementation of these systems will be completed in a timely manner or within
our budget.
RISKS RELATING TO YEAR 2000 PROBLEMS MAY ADVERSELY AFFECT OUR BUSINESS
Some computers, software, and other equipment include computer code in
which calendar year data is abbreviated to only two digits. As a result, some of
these systems will not operate correctly after 1999 because they may interpret
"00" to mean 1900, rather than 2000 - widely known as the "Year 2000 Problem."
These problems are likely to increase in frequency and severity as the year 2000
approaches. The Year 2000 Problem affects some of our computers, software and
other equipment. If we fail to properly recognize and address the Year 2000
Problem in our systems, our business, financial condition and results of
operations could be materially and adversely affected.
We believe that we have identified most of the major computers,
software and other equipment used in connection with our internal operations
that must be modified, upgraded or replaced to minimize the possibility of a
material disruption to our business. We have commenced
6
<PAGE>
the process of modifying, upgrading and replacing major systems that have been
assessed as adversely affected, and we expect to complete this process before
the occurrence of any material disruption of our business. We have commenced the
process of identifying other computers, software and other equipment that may be
affected by the Year 2000 Problem, and determining whether remedial action is
needed. We expect to complete this process by the second quarter of 1999, and we
estimate that the total costs of this effort will be $4.2 million for the four
year period ending December 31, 1999.
The Year 2000 Problem also affects some of our customers and major
suppliers of computers, software, and other equipment. We have discussed the
Year 2000 Problem with some of these customers and suppliers, but we cannot
guarantee that they will resolve any or all Year 2000 Problems. If our customers
and suppliers fail to resolve Year 2000 Problems, our business could be
materially disrupted.
OUR FINANCIAL ADVISERS COULD MISUSE MONEY AND INFORMATION
Our financial advisers handle a significant amount of money and
financial and personal information for people that invest in the funds and for
people that purchase other investment and insurance products from us. Although
we have implemented a system of controls to minimize the risk of misuse of such
money and information, we cannot assure you that these controls will be
adequate. We also cannot assure you that we can prevent taking or misuse of
money or information. In the event of any taking or misuse, we could have
liability and could also be subject to regulatory sanctions. Although we believe
that we are adequately insured against such risks, we cannot assure you that
such insurance will be maintained or that it will be adequate to meet any future
liability.
POTENTIAL ADVERSE EFFECT ON CLASS A COMMON STOCK SHARE VALUE FROM DISPARATE
VOTING RIGHTS OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK
The holders of our Class A common stock and the Class B common stock
have identical rights except that:
. holders of Class A common stock have one vote per share while
holders of Class B common stock have five votes per share;
. holders of Class A common stock cannot vote on any alteration of
the powers, preferences or special rights of the Class B common
stock that would not adversely affect the Class A common stock; and
. holders of Class B common stock cannot vote on any alteration of
the powers, preferences or special rights of the Class A common
stock that would not adversely affect the Class B common stock.
For example, holders of one class of common stock could not vote on
proposals to:
. decrease the voting power of the other class of common stock;
. decrease the right of the other class of common stock to receive
dividends; or
7
<PAGE>
. diminish the rights of the other class of common stock in
liquidation.
Investors or any potential future purchaser of our shares could view the
superior voting rights of the Class B common stock to have value, which could
adversely affect the value of the Class A common stock. The existence of two
separate classes of common stock could result in less liquidity for either class
of common stock than if there were only one class of common stock.
WE MAY NOT PAY DIVIDENDS; OUR HOLDING COMPANY STRUCTURE MAY LIMIT OUR AVAILABLE
CASH FOR DISTRIBUTION
Our Board of Directors currently intends to declare quarterly
dividends on both the Class A common stock and the Class B common stock. Our
Board of Directors has discretion over declaring and paying dividends. Whether
or not the Board of Directors decides to pay dividends, and the amount of such
dividends, will depend on many factors, including:
. general economic and business conditions;
. our strategic plans;
. our financial results and condition;
. contractual, legal, and regulatory restrictions on the payment of
dividends by us or our subsidiaries; and
. such other factors as the Board of Directors may consider to be
relevant.
We are a holding company, and, as such, our ability to pay dividends
is subject to the ability of the our subsidiaries to provide us with cash. We
cannot assure you that our initial quarterly dividend level will be maintained
or that we will pay any dividends in any future period.
We Could Be Adversely Affected By Changes in Regulation
Our investment management business is subject to extensive regulation
in the United States, primarily at the Federal level, including regulation by
the Commission. Changes in laws or regulations, or in governmental policies,
could materially and adversely affect our business and operations.
PROVISIONS IN OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW COULD
DETER TAKEOVER ATTEMPTS
Our Board of Directors may issue shares of preferred stock and may
determine the price, rights, preferences, privileges and restrictions, including
voting and conversion rights, of these shares of preferred stock. These
determinations may be made without any further vote our action by our
stockholders. The rights of the holders of Class A common stock will be subject
to, and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future. The issuance of preferred stock may make
it more difficult for a third party to acquire a majority of our outstanding
voting stock.
8
<PAGE>
Some provisions in our Certificate of Incorporation and Bylaws and of
Delaware law could also delay, prevent, or make more difficult a merger, tender
offer, or proxy contest involving our Company, including:
. With certain exceptions, Section 203 of the Delaware General
Corporation Law restricts certain mergers and other business
combinations between us and any holder of 15% or more of our voting
stock;
. the prohibition of actions by stockholders without a meeting,
unless our Board of Directors otherwise approves;
. our Board of Directors is divided into three classes, each of which
serves for a staggered three-year term; and
. after Torchmark Corporation ceases to beneficially own at least a
majority of the voting power, incumbent directors may not be
removed without cause.
9
<PAGE>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Prospectus contains or incorporates by reference certain forward-
looking statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, those listed under "Risk Factors" and elsewhere
in this Prospectus.
In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "anticipates," "plans,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology.
Although we believe that the expectations reflected in the forward-
looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility for
the accuracy and completeness of any such forward-looking statements. We are
under no duty to update any of the forward-looking statements after the date of
this Prospectus to conform such statements to actual results.
10
<PAGE>
SELLING STOCKHOLDERS
The table below sets forth information with respect to the beneficial
ownership of the Class A common stock of Waddell & Reed Financial, Inc. (the
"Company") by the selling stockholders immediately prior to this offering and as
adjusted to reflect the sale of shares of Class A common stock pursuant to the
offering. None of the selling stockholders own in excess of one percent (1%) of
the outstanding Class A common stock of the Company. All information with
respect to the beneficial ownership has been furnished by the selling
stockholders:
Class A common stock
Relationship with Owned as of Shares to
Name Company September 30, 1998 Be Sold(1)
---- ----------------- ------------------- ----------
Keith A. Tucker Chairman of the 248,697 97,174
Board, Chief
Executive Officer &
Director
Henry J. Herrmann President, Chief 185,000 110,000
Investment Officer,
Treasurer & Director
Robert L. Hechler Executive Vice 130,000 90,000
President, Chief
Operating Officer &
Director ----------
297,174
- -------------
(1) Shares to be sold pursuant to this Prospectus consist of restricted stock
which, in the case of Mr. Tucker, vests in four increments of 25% each
commencing on May 1, 1998, and on each of the three anniversaries
thereafter, and, in the case of Messrs. Herrmann and Hechler, vests in
three equal installments commencing on March 4, 2000 and on each of the two
anniversaries thereafter.
PLAN OF DISTRIBUTION
The Class A common stock being offered by the selling stockholders
pursuant to this Prospectus may be sold from time to time by the selling
stockholders, or by pledgees, donees, transferees or other successors in
interest, regardless of whether such successors in interest are successors in
interest with respect to the shares. Such sales may be made on one or more
exchanges or in the over-the-counter market, or otherwise at prices and on terms
then prevailing or at prices related to the then-current market price of the
Class A common stock, or in negotiated transactions. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 under the
Act may be sold under either of such rules rather than pursuant to this
Prospectus.
In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from selling stockholders in
amounts to be negotiated immediately prior to the sale. The selling stockholders
and agents who execute orders on their behalf may be deemed to be underwriters
as that term is defined in Section 2(11) of the Act and a portion of any
proceeds or sales discounts, commissions or other compensation may be deemed to
be underwriting compensation for purposes of the Act.
11
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from this offering.
LEGAL MATTERS
The validity of the shares of Class A common stock offered hereby will
be passed upon for us by Hughes & Luce, L.L.P., Dallas, Texas.
EXPERTS
The Consolidated Financial Statements of the Company as of December
31, 1996 and 1997, and for each of the years in the three-year period ended
December 31, 1997 incorporated by reference into this Prospectus have been so
included in reliance on the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.
INDEMNIFICATION
The Company's Certificate of Incorporation provides that each person
who was or is threatened to be made a party to or is involved in any action,
suit or proceeding by reason of the fact that he or she, or a person of whom he
or she is the legal representative, 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 company, partnership, joint venture, trust or other
enterprise, will be indemnified and held harmless by the Company to the fullest
extent authorized by the Delaware General Corporation Law as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators.
The Delaware General Corporation Law permits Delaware corporations to
include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty. The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an
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<PAGE>
improper personal benefit. In addition, directors and officers are insured, at
the Registrant's expense, against certain liabilities which might arise out of
their employment.
Under Section 145 of the Delaware General Corporation Law, a
corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation against expenses (including attorneys' fees) actually
and reasonably incurred by him or her if he or she acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless a court finds that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
13
<PAGE>
297,174 SHARES
WADDELL & REED FINANCIAL, INC.
CLASS A COMMON STOCK
------------
PROSPECTUS
------------
TABLE OF CONTENTS
Page
----
Available Information 2
Documents Incorporated by Reference 3
The Company 4
Risk Factors 4
Cautionary Statement Concerning 10
Forward-Looking Statements
Selling Stockholders 11
Plan of Distribution 11
Use of Proceeds 12
Legal Matters 12
Experts 12
Indemnification 12
October 16, 1998
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and Exchange
Commission (the "Commission") by Waddell & Reed Financial, Inc. (the
"Registrant" or the "Company") are incorporated by reference in this
Registration Statement:
(a) The Registrant's Rule 424(b) Prospectus, as filed under the Securities
Exchange Act of 1933, as amended (the "Securities Act"), Registration Statement
No. 333-43687;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, as filed under Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(c) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, as filed under Section 13(a) of the Exchange Act;
(d) The description of the Registrant's Class A common stock, par value
$.01 per share (the "Common Stock"), contained in the Registrant's Registration
Statement on Form 8-A, (the "Form 8-A") filed with the Commission on February
27, 1998, including any amendment or report filed for the purpose of updating
such description; and
(e) All reports filed by the Registrant pursuant to Sections 13(a) or 15(d)
of the Exchange Act, since the filing of the Form 8-A.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of the filing of
the initial Registration Statement and any amendments thereto and prior to the
filing of a post-effective amendment to this Registration Statement which
indicates that all of the shares of Common Stock offered have been sold or which
deregisters all of such shares then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified, replaced or superseded for purposes of this Registration Statement to
the extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies, replaces or supersedes such statement. Any
statement so modified, replaced or superseded shall not be deemed, except as so
modified, replaced or superseded, to constitute a part of this Registration
Statement.
II-1
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation provides that each person who
was or is threatened to be made a party to or is involved in any action, suit or
proceeding by reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director or officer of the Registrant
or is or was serving at the request of the Registrant as a director or officer
of another company, partnership, joint venture, trust or other enterprise, will
be indemnified and held harmless by the Registrant to the fullest extent
authorized by the Delaware General Corporation Law as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Registrant to provide broader indemnification
rights than said law permitted the Registrant to provide prior to such
amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators.
The Delaware General Corporation Law permits Delaware corporations to
include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty. The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an improper personal benefit. In addition, directors and officers are
insured, at the Registrant's expense, against certain liabilities which might
arise out of their employment.
Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify a director, officer, employee or agent of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. In the case of an action brought by or in the right of a corporation,
the corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him or her if he or she acted in good faith and in a manner he or
she reasonably believed to be in the best interests of the corporation, except
that no indemnification
II-2
<PAGE>
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless a court finds
that, in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Specimen of Stock Certificate (filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-1 (Commission File
No. 333-43687) and incorporated herein by reference).
4.2 1998 Executive Deferred Compensation Stock Option Plan (filed
as Exhibit 10.10 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1998 and incorporated
herein by reference).
4.3 1998 Non-Employee Director Stock Option Plan (filed as
Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998 and incorporated herein
by reference).
4.4 1998 Stock Incentive Plan (filed as Exhibit 10.8 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 and incorporated herein by reference).
4.5* Form of Option Exchange Mailing Documents
5.1* Opinion of Hughes & Luce, L.L.P.
23.1* Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5.1
hereto)
23.2* Consent of KPMG Peat Marwick LLP
24.1* Powers of Attorney
----------------------
* Filed herewith
ITEM 9. UNDERTAKINGS.
(a) The 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;
II-3
<PAGE>
(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;
(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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement 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.
(c) Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 6, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
(d) 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
II-4
<PAGE>
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; 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.
II-5
<PAGE>
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 October 16, 1998.
WADDELL & REED FINANCIAL, INC.
By: /s/ KEITH A. TUCKER
-----------------------------
Keith A. Tucker,
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ KEITH A. TUCKER Chairman of the Board, Chief October 16, 1998
- ----------------------------------- Executive Officer and Director
Keith A. Tucker (Principal Financial Officer)
/s/ HENRY J. HERRMANN President, Chief Investment October 16, 1998
- ----------------------------------- Officer, Treasurer and Director
Henry J. Herrmann
/s/ ROBERT L. HECHLER Chief Operating Officer, Executive October 16, 1998
- ----------------------------------- Vice President and Director
Robert L. Hechler
/s/ MICHAEL D. STROHM Principal Accounting Officer October 16, 1998
- -----------------------------------
Michael D. Strohm
* Director October 16, 1998
- -----------------------------------
Harold T. McCormick
* Director October 16, 1998
- -----------------------------------
Louis T. Hagopian
* Director October 16, 1998
- -----------------------------------
R. K. Richey
* Director October 16, 1998
- -----------------------------------
Joseph L. Lanier, Jr.
* Director October 16, 1998
- -----------------------------------
William L. Rogers
</TABLE>
II-6
<PAGE>
<TABLE>
<S> <C> <C>
* Director October 16, 1998
- -----------------------------------
James M. Raines
* Director October 16, 1998
- -----------------------------------
George J. Records
* Director October 16, 1998
- -----------------------------------
David L. Boren
* Director October 16, 1998
- -----------------------------------
Joseph M. Farley
*By: /s/ DANIEL C. SCHULTE October 16, 1998
-------------------------------
Daniel C. Schulte
Attorney-in-fact
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
4.1 Specimen of Stock Certificate (filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-1 (Commission File No.
333-43687) and incorporated herein by reference).
4.2 1998 Executive Deferred Compensation Stock Option Plan (filed as
Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998 and incorporated herein by
reference).
4.3 1998 Non-Employee Director Stock Option Plan (filed as Exhibit 10.9
to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference).
4.4 1998 Stock Incentive Plan (filed as Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
and incorporated herein by reference).
4.5* Form of Option Exchange Mailing Documents
5.1* Opinion of Hughes & Luce, L.L.P.
23.1* Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5.1 hereto)
23.2* Consent of KPMG Peat Marwick LLP
24.1* Powers of Attorney
-------------------
*Filed herewith
<PAGE>
EXHIBIT 4.5
FORM OF
WADDELL & REED OPTIONHOLDERS
ELECTION FORM
Optionee Name:
---------------------------
GRANT DATE NO. OF SHARES EXERCISE PRICE
[Employee's Actual Torchmark Options to be Inserted]
With respect to the amendment and adjustment of my outstanding
Torchmark Corporation stock options listed above for the spin-off of Waddell &
Reed Financial, Inc., I hereby elect:
[_] To receive WDR Conversion Options only, calculated pursuant to the
adjustment procedures adopted by the Compensation Committee of the
Board of Directors of Waddell & Reed Financial, Inc. on September 29,
1998.
[_] To receive WDR Conversion Options and Adjusted TMK Options, calculated
pursuant to the adjustment procedures adopted by the Compensation
Committee of the Board of Directors of Waddell & Reed Financial, Inc.
on September 29, 1998.
[_] To retain my existing Torchmark Options with the understanding that
they will be adjusted for exercise price and number of shares but that
they will expire, in accordance with their terms, three months from
the date of the completion of the spin-off.
Date:
--------------------------------- ---------------------------------------
Optionee
<PAGE>
FORM OF
TORCHMARK OPTIONHOLDERS
ELECTION FORM
Optionee Name:
------------------------------
Outstanding Stock Options Subject to Election
---------------------------------------------
GRANT DATE NO. OF SHARES EXERCISE PRICE
[Employee's Actual Torchmark Options to be Inserted]
With respect to the amendment and adjustment of my outstanding
Torchmark Corporation stock options listed above for the spin-off of Waddell &
Reed Financial, Inc., I hereby elect to receive:
[_] Adjusted TMK Options only, calculated pursuant to the adjustment
procedures adopted by the Compensation Committee of the Board of
Directors of Torchmark Corportion on ____________, 1998.
[_] Adjusted TMK Options and WDR Conversion Options, calculated pursuant
to the adjustment procedures adopted by the Compensation Committee of
the Board of Directors of Torchmark Corporation on _____________,
1998.
Date:
--------------------------------- ------------------------------------
<PAGE>
FORM OF
TORCHMARK AND
WADDELL & REED DIRECTORS
ELECTION FORM
Optionee Name:
------------------------------
Outstanding Stock Options Subject to Election
---------------------------------------------
GRANT DATE NO. OF SHARES EXERCISE PRICE
[Employee's Actual Torchmark Options to be Inserted]
With respect to the amendment and adjustment of my outstanding
Torchmark Corporation stock options listed above for the spin-off of Waddell &
Reed Financial, Inc., I hereby elect to receive:
[_] Adjusted TMK Options only, calculated pursuant to the adjustment
procedures adopted by the Compensation Committee of the Board of
Directors of Torchmark Corporation on ___________, 1998.
[_] WDR Conversion Options only, calculated pursuant to the adjustment
procedures adopted by the Compensation Committee of the Board of
Directors of Torchmark Corporation on ____________, 1998.
[_] Adjusted TMK and WDR Conversion Options, calculated pursuant to the
adjustment procedures adopted by the Compensation Committee of the
Board of Directors of Torchmark Corporation on ___________, 1998.
Date:
--------------------------------- ------------------------------------
<PAGE>
FORM OF MAILING TO WADDELL & REED FINANCIAL, INC. EMPLOYEES
Date: October ____, 1998
To: Waddell & Reed Employees who are Holders of Torchmark Stock Options
From: Keith A. Tucker
Re: Conversion of Torchmark Stock Options
As you know, upon receipt of a tax ruling from the Internal Revenue Service,
Torchmark Corporation ("Torchmark") will shortly be distributing the remaining
shares of Waddell & Reed Financial, Inc. ("WDR") it holds to its common
shareholders in a tax-free spin-off. Pursuant to the terms of the plans under
which Torchmark stock options have been granted to you, the Torchmark
Compensation Committee and WDR Compensation Committee have approved procedures
to adjust outstanding stock options for the spin-off. This adjustment process
is designed to maintain the equity you have in and maintain the market value of,
your Torchmark stock options while allowing you to convert some or all of these
Torchmark options into options of WDR.
Attached is an illustration of how the adjustment process works in the case of
your unexercised options. This is only an example and is based on assumed
prices for Torchmark and WDR stock. Actual adjusted numbers of shares and
adjusted option prices cannot be determined until the measurement period prior
to the spin-off distribution date.
You should complete the attached election form indicating whether you wish to
receive only WDR Conversion options, a combination of WDR Conversion options and
Adjusted TMK options, or retain your existing TMK options and return it on or
before October ___, 1998 to Daniel C. Schulte at Waddell & Reed Financial, Inc.,
6300 Lamar, Overland Park, Kansas 66202 (facsimile number -- 913-236-1930).
If you have any questions regarding the adjustment process, feel free to contact
Daniel C. Schulte at 913-236-2012 or Spencer Stone at 205-325-4249.
<PAGE>
FORM OF MAILING TO TORCHMARK CORPORATION EMPLOYEES
DATE:
MEMORANDUM TO: HOLDERS OF TORCHMARK STOCK OPTIONS
As you know, upon receipt of a tax ruling from the IRS, Torchmark will
shortly be distributing the remaining shares of Waddell & Reed Financial ("WDR")
it holds to its common shareholders in a tax-free spin-off. Pursuant to the
terms of the plans under which Torchmark stock options have been granted to you,
the Torchmark Compensation Committee has approved procedures to adjust
outstanding stock options for the spin-off. This adjustment process is designed
to: (1) maintain the equity you have in Torchmark stock options, and (2)
maintain the market value of your Torchmark stock options.
Attached is an ILLUSTRATION of how the adjustment process works in the
case of your unexercised options. THIS IS ONLY AN EXAMPLE AND IS BASED ON
ASSUMED PRICES FOR TORCHMARK AND WDR STOCK. ACTUAL ADJUSTED NUMBERS OF SHARES
AND ADJUSTED OPTION PRICES CANNOT BE DETERMINED UNTIL THE MEASUREMENT PERIOD
PRIOR TO THE SPIN-OFF DISTRIBUTION DATE.
You should complete the attached election indicating whether you wish
to receive only Adjusted TMK options or a combination of Adjusted TMK options
and WDR Conversion options and return it to Carol McCoy at Torchmark on or
before October __, 1998. We will make every effort to obtain your election but
if we do not receive it by the deadline, your options will automatically be
converted into Adjusted TMK Options only.
If you have any questions regarding the adjustment process, feel free
to contact Spencer Stone at 205-325-4249, Danny Almond at 972-569-3713, or Carol
McCoy at 205-325-4243.
<PAGE>
FORM OF MAILING TO OUTSIDE DIRECTORS OF TORCHMARK CORPORATION AND WADDELL & REED
FINANCIAL, INC.
DATE:
MEMORANDUM TO: HOLDERS OF TORCHMARK STOCK OPTIONS
As you know, upon receipt of a tax ruling from the IRS, Torchmark will
shortly be distributing the remaining shares of Waddell & Reed Financial ("WDR")
it holds to its common shareholders in a tax-free spin-off. Pursuant to the
terms of the plans under which Torchmark stock options have been granted to you,
the Torchmark Compensation Committee has approved procedures to adjust
outstanding stock options for the spin-off. This adjustment process is designed
to: (1) maintain the equity you have in Torchmark stock options, and (2)
maintain the market value of your Torchmark stock options.
Attached is an ILLUSTRATION of how the adjustment process works in the
case of your unexercised options. THIS IS ONLY AN EXAMPLE AND IS BASED ON
ASSUMED PRICES FOR TORCHMARK AND WDR STOCK. ACTUAL ADJUSTED NUMBERS OF SHARES
AND ADJUSTED OPTION PRICES CANNOT BE DETERMINED UNTIL THE MEASUREMENT PERIOD
PRIOR TO THE SPIN-OFF DISTRIBUTION DATE.
You should complete the attached election indicating whether you wish
to receive only WDR Conversion options, a combination of Adjusted TMK options
and WDR Conversion options, or retain your existing TMK options and return it to
Carol McCoy at Torchmark on or before October __, 1998.
If you have any questions regarding the adjustment process, feel free
to contact Spencer Stone at 205-325-4249, Danny Almond at 972-569-3713, or Carol
McCoy at 205-325-4243.
<PAGE>
FORM OF EXAMPLE
Optionee: Waddell & Reed Employee (Waddell & Reed example)
Assumptions: Pre-spin TMK price: $37.5000
Post-spin TMK price: $32.0000
Post-spin WDR price: $18.2500
Spin ratio: 30.16%
Existing options: Converted Waddell & Reed
- --------------------------------------- ------------------------------
Number Number New
Grant of Exercise Intrinsic of exercise Intrinsic
Date Options Price Value options price value
- -------------------------- ------------ ----------------- -----------
12/20/95 6,000 $21.6875 $ 94,875.00 12,329 $10.5548 $ 94,874.12
12/16/96 6,000 24.8750 75,750.00 12,329 12.1060 75,749.38
09/25/97 32,000 39.1250 (52,000.00) 65,754 19.0409 (52,004.84)
------ ----------- ------ -----------
44,000 $118,625.00 90,412 $118,618.66
====== =========== ====== ===========
<TABLE>
<CAPTION>
Combination
Adjusted Torchmark: Converted Waddell & Reed Combined
- ----------------------------------------- --------------------------------- -----------
New
number New Number
Grant of exercise Intrinsic of Exercise Intrinsic Intrinsic
Date options price value options price value value
- ---------------------------- ------------ -------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
12/20/95 6,000 $18.50895 $ 80,946.30 1,810 $10.5546 $ 13,928.67 $ 94,874.97
12/16/96 6,000 21.22847 64,629.18 1,810 12.1059 11,120.82 75,750.00
09/25/97 32,000 33.38667 (44,373.44) 9,651 19.0409 (7,632.98) (52,006.42)
------ ----------- ------ ---------- -----------
44,000 $101,202.04 13,271 $17,416.51 $118,618.55
====== =========== ====== ========== ===========
</TABLE>
Adjusted Existing Torchmark
- -----------------------------------------
Number This is an example based upon
Grant of Exercise Intrinsic certain assumptions. Actual
Date Options Price Value adjustments to your options may
- ---------------------------- ------------ differ from the example because of
differences between the assumptions
12/20/95 7,032 $18.50811 $ 94,874.97 and measurement period prices.
12/16/96 7,032 21.22782 75,749.97
09/25/97 37,500 33.38667 (52,000.13)
------ -----------
51,564 $118,624.81
====== ===========
<PAGE>
EXHIBIT 5.1
OPINION OF HUGHES & LUCE, L.L.P.
October 16, 1998
Waddell & Reed Financial, Inc.
6300 Lamar Avenue
Overland Park, Kansas 66202
Re: Registration Statement on Form S-8 for the 1998 Executive
Deferred Compensation Stock Option Plan, 1998 Non-Employee
Director Stock Option Plan and 1998 Stock Incentive Plan
Ladies and Gentlemen:
We have acted as counsel to Waddell & Reed Financial, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 16,300,000 shares (the "Shares") of the
Company's Class A common stock, $.01 par value per share (the "Common Stock"),
issuable under the 1998 Executive Deferred Compensation Stock Option Plan, 1998
Non-Employee Director Stock Option Plan and 1998 Stock Incentive Plan
(collectively, the "Plans"). The Shares are being registered pursuant to a
registration statement on Form S-8 to be filed with the Securities and Exchange
Commission on or about October 16, 1998 (the "Registration Statement").
In rendering this opinion, we have examined and relied upon executed
originals, counterparts or copies of such documents, records and certificates
(including certificates of public officials and officers of the Company) as we
considered necessary or appropriate for enabling us to express the opinions set
forth herein. In all such examinations, we have assumed the authenticity and
completeness of all documents submitted to us as originals and the conformity to
originals and completeness of all documents submitted to us as photostatic,
conformed, notarized or certified copies.
Based on the foregoing, we are of the opinion that the Shares will be,
if and when issued in accordance with the terms of the Plans, validly issued,
fully paid and nonassessable, assuming the Company maintains an adequate number
of authorized but unissued shares of Common Stock available for such issuance,
and further assuming that the consideration actually received by the Company for
the Shares exceeds the par value thereof.
This opinion may be filed as an exhibit to the Registration Statement.
We also consent to the reference to this firm as having passed on the validity
of the Common Stock under the caption "Legal Matters" in the Prospectus. In
giving this consent, we do not admit that we are included in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ HUGHES & LUCE, L.L.P.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Waddell & Reed Financial, Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Registration Statement
on Form S-8.
/s/ KMPG PEAT MARWICK LLP
Kansas City, Missouri
October 14, 1998
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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: September 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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: September 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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: September 28, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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
-------------------------
Joseph L. Lanier
Director
Date: September 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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/ William L. Rogers
---------------------------
William L. Rogers
Director
Date: September 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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: September 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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/ James M. Raines
--------------------------
James M. Raines
Director
Date: September 28, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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: September 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Waddell & Reed Financial, Inc. (the "Company")
hereby constitutes and appoints Sharon K. Pappas and Daniel C. Schulte, and each
of them severally, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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. 1998 Stock Incentive Plan, 1998 Executive
Deferred Compensation Stock Option Plan and 1998 Non-Employee Director Stock
Option Plan, and any other Registration Statement relating to the same offering,
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: September 25, 1998
