As filed with the Securities and Exchange Commission on January 8, 2001
Registration No. 333-43862
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
WADDELL & REED FINANCIAL, INC. WADDELL & REED CAPITAL TRUST I
(EXACT NAME OF EACH REGISTRANT AS (EXACT NAME OF EACH REGISTRANT AS
SPECIFIED IN ITS CHARTER) SPECIFIED IN ITS CERTIFICATE OF TRUST)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION (STATE OR OTHER JURISDICTION OF
OF INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION OF
OF EACH REGISTRANT)
51-0261715
(I.R.S. EMPLOYER IDENTIFICATION NO.) TO BE APPLIED FOR (I.R.S. EMPLOYER
IDENTIFICATION NO.)
-------------------------------
6300 LAMAR AVENUE
OVERLAND PARK, KANSAS 66202
(913) 236-2000
(Address, including zip code, and telephone
number, including area code, of each
registrant's principal executive offices)
------------------------------------
JOHN E. SUNDEEN, JR.
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
WADDELL & REED FINANCIAL, INC.
6300 LAMAR AVENUE
OVERLAND PARK, KANSAS 66202
(913) 236-2000
------------------------------------
(Name, address, including zip code, and telephone number, including
area code, of agent for service of each registrant)
With copies to:
DANIEL C. SCHULTE, ESQ. VINCENT J. PISANO, ESQ.
WADDELL & REED FINANCIAL, INC. SKADDEN, ARPS, SLATE,
6300 LAMAR AVENUE MEAGHER & FLOM LLP
OVERLAND PARK, KANSAS 66202 FOUR TIMES SQUARE
(913) 236-2000 NEW YORK, NEW YORK 10036
(212) 735-3000
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [__]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [__]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. [__]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act Registration of the earlier effective registration statement
for the same offering. [ X ] 333-43862
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [__]
The Registrants hereby amend this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrants shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WADDELL & REED FINANCIAL, INC. OR WADDELL & REED CAPITAL TRUST I, AS
APPLICABLE, MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED January 8, 2001
PROSPECTUS
$400,000,000.00
WADDELL & REED FINANCIAL, INC.
SENIOR DEBT SECURITIES
JUNIOR SUBORDINATED DEBT SECURITIES
WARRANTS AND WARRANT SPREADS
COMMON STOCK
WADDELL & REED CAPITAL TRUST I
TRUST PREFERRED SECURITIES
(FULLY AND UNCONDITIONALLY GUARANTEED ON A
SUBORDINATED BASIS, AS DESCRIBED
HEREIN, BY WADDELL & REED FINANCIAL, INC.)
This prospectus contains a general description of the securities which
WADDELL & REED FINANCIAL, INC. and/or WADDELL & REED Capital Trust I may
offer for sale. The specific terms of the securities will be contained in
one or more supplements to this prospectus. Read the prospectus and any
supplement carefully before you invest.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This prospectus may not be used to sell securities unless accompanied
by a prospectus supplement.
The date of this prospectus is January 8, 2001.
TABLE OF CONTENTS
PAGE
SUMMARY....................................................................1
WHERE YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY
AND WADDELL & REED CAPITAL TRUST I.........................................2
FORWARD-LOOKING STATEMENTS.................................................3
THE COMPANY................................................................5
RATIO OF EARNINGS TO FIXED CHARGES.........................................6
USE OF PROCEEDS............................................................6
WADDELL & REED CAPITAL TRUST I.............................................6
DESCRIPTION OF SENIOR DEBT SECURITIES......................................9
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES........................15
DESCRIPTION OF WARRANTS...................................................20
DESCRIPTION OF CAPITAL STOCK..............................................23
DESCRIPTION OF THE TRUST PREFERRED SECURITIES.............................30
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES........................33
EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES
AND THE PREFERRED SECURITIES GUARANTEE....................................36
PLAN OF DISTRIBUTION......................................................38
LEGAL MATTERS.............................................................39
EXPERTS...................................................................39
SUMMARY
This document is called a prospectus. This summary highlights selected
information from this prospectus and may not contain all of the information
that is important to you. To understand the terms of the securities, you
should carefully read this prospectus with the attached prospectus
supplement. This prospectus and the prospectus supplement together give the
specific terms of the securities being offered. You should also read the
documents referred to under the heading, "Where You Can Find More
Information About the Company and WADDELL & REED Capital Trust I" for
information on WADDELL & REED FINANCIAL, INC. and its financial statements.
The Company has its principal offices at 6300 Lamar Avenue, Overland Park,
Kansas 66202 (telephone: 913-236-2000). Certain capitalized terms used in
this summary are defined elsewhere in this prospectus.
WADDELL & REED FINANCIAL, INC., a Delaware corporation (also referred
to as the "Company", "WADDELL & REED", "us" or "we"), and WADDELL & REED
Capital Trust I, a statutory business trust formed under the laws of the
State of Delaware (also referred to as "WADDELL & REED Capital Trust I")
has filed a registration statement with the Securities and Exchange
Commission under a "shelf" registration procedure. Under this procedure the
Company may offer and sell from time to time, in one or more series, up to
$400,000,000.00, or the equivalent in one or more foreign currencies,
including composite currencies such as the Euro, of any of the following
securities:
o senior debt securities,
o junior subordinated debt securities,
o warrants, including warrant spreads,
o common stock,
o trust preferred securities of WADDELL & REED Capital Trust I,
and
o guarantees, described below, relating to the trust preferred
securities of WADDELL & REED Capital Trust I.
The securities may be sold for U.S. dollars, foreign-denominated
currency or currency units; amounts payable with respect to any such
securities may be payable in U.S. dollars or foreign-denominated currency
or currency units.
This prospectus provides you with a general description of the
securities we may offer. Each time we offer securities, we will provide you
with a prospectus supplement that will describe the specific amounts,
prices and terms of the securities being offered. The prospectus supplement
may also add, update or change information contained in this prospectus.
The prospectus supplement will also contain information about certain
United States federal income tax considerations relating to the securities
covered by the prospectus supplement.
The Company and WADDELL & REED Capital Trust I may sell securities to
underwriters who will sell the securities to the public on terms fixed at
the time of sale. In addition, the securities may be sold by the Company
and WADDELL & REED Capital Trust I directly or through dealers or agents
designated from time to time, which agents may be affiliates of the Company
and WADDELL & REED Capital Trust I. If the Company, directly or through
agents, solicits offers to purchase the securities, the Company reserves
the sole right to accept and, together with its agents, to reject, in whole
or in part, any such offer.
The prospectus supplement will also contain, with respect to the
securities being sold, the names of the underwriters, dealers or agents, if
any, together with the terms of offering, the compensation of such
underwriters and the net proceeds to the Company and WADDELL & REED Capital
Trust I.
Any underwriters, dealers or agents participating in the offering may
be deemed "underwriters" within the meaning of the Securities Act of 1933.
WHERE YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY
AND WADDELL & REED CAPITAL TRUST I
The Company and WADDELL & REED Capital Trust I have filed a
registration statement with the SEC. This prospectus is part of the
registration statement but the registration statement also contains
additional information and exhibits. The Company also files proxy
statements, annual, quarterly and special reports, and other information
with the SEC. You may read and copy the registration statement and any
reports, proxy statements and other information at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549 and the SEC's Regional Offices in New York, New York and
Chicago, Illinois.
You can call the SEC for further information about its public
reference rooms at 1-800-732-0330. Such material is also available at the
SEC's website at "http://www.sec.gov."
You can also inspect reports, proxy statements and other information
about the Company at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York.
The SEC allows the Company to incorporate documents by reference in
this prospectus. This means that by listing or referring to a document
which the Company has filed with the SEC in this prospectus, that document
is considered to be a part of this prospectus and should be read with the
same care. When the Company updates the information contained in documents
which have been incorporated by reference, by making future filings with
the SEC, the information incorporated by reference in this prospectus is
considered to be automatically updated.
The documents listed below are incorporated by reference into this
prospectus:
COMPANY SEC FILINGS PERIOD
------------------- ------
Annual Report on Form 10-K.................. Year ended December 31, 1999
Quarterly Reports on Form 10-Q.............. Quarter ended June 30, 2000
Current Reports on Form 8-K................. Dated:
o February 28, 2000
o March 7, 2000
o March 31, 2000
Current Report on Form 8-K/A................ Dated March 31, 2000
The Company also incorporates by reference additional documents that
it may file with the SEC between the date of this prospectus and the
termination of the offering of the securities. These documents include
periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us, or from the SEC through the SEC's web site at the
address described above. Documents incorporated by reference are available
from us without charge, excluding any exhibits to those documents unless
the exhibit is specifically incorporated by reference as an exhibit in this
prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address and telephone number:
Investor Relations
WADDELL & REED FINANCIAL, INC.
6300 Lamar Avenue
Overland Park, Kansas 66202
(913) 236-2000
If you request any incorporated documents from us, we will mail them
to you by first class mail, or another equally prompt means, after we
receive your request.
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS
OR ANY PROSPECTUS SUPPLEMENT OR INCORPORATED BY REFERENCE. THE COMPANY HAS
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.
No separate financial statements of WADDELL & REED Capital Trust I are
included in this prospectus. The Company and WADDELL & REED Capital Trust I
do not consider that such financial statements would be material to holders
of the trust preferred securities because WADDELL & REED Capital Trust I is
a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage
in any activity other than holding as trust assets the Corresponding Junior
Subordinated Debt Securities (as defined below under the heading "WADDELL &
REED Capital Trust I") of the Company and issuing the trust securities.
Furthermore, taken together, the Company's obligations under each
series of Corresponding Junior Subordinated Debt Securities, the Junior
Indenture under which the Corresponding Junior Subordinated Debt Securities
will be issued, the related Declaration and the related Preferred
Securities Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of distributions and other amounts due
on the related preferred securities of WADDELL & REED Capital Trust. For a
more detailed discussion see "WADDELL & REED Capital Trust I," "Description
of the Trust Preferred Securities," "Description of Junior Subordinated
Debt Securities," "Description of the Preferred Securities Guarantees" and
"Effect of Obligations under the Junior Subordinated Debt Securities and
Preferred Securities Guarantee." In addition, the Company does not expect
that WADDELL & REED Capital Trust I will be filing reports with the SEC
under the Securities Exchange Act of 1934.
The Company is not making an offer of its securities in any state or
country where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as
of a later date than the date of this prospectus or any prospectus
supplement.
FORWARD-LOOKING STATEMENTS
This prospectus, including information included or incorporated by
reference in this prospectus, contains certain forward-looking statements
with respect to the financial condition, results of operations, plans,
objectives, future performance and business of the Company and its
predecessors, including without limitation, statements preceded by followed
by or that include the words "believes," "expects," "anticipates,"
"estimates," or similar expressions. These forward-looking statements
involve certain risks and uncertainties. Actual results may differ
materially from those contemplated by such forward-looking statements due
to, among others, the following factors:
o changes in the interest rate environment may reduce margins;
o general economic or business conditions, either nationally or
in the states in which the Company is doing business, may be
less favorable than expected resulting in, among other
things, a deterioration in credit quality or a reduced demand
for credit;
o legislative or regulatory changes may adversely affect the
business in which the Company is engaged;
o technological changes may be more difficult or expensive than
anticipated;
o changes may occur in the securities and capital markets;
o the impact of changes in financial services laws and
regulations;
o unanticipated regulatory or judicial proceedings;
o the impact of the Company's completed acquisitions; and
o possible adverse effect on the value of our Class A Common
Stock due to the different voting rights of our Class A
Common Stock and our Class B Common Stock.
If one or more of these risks or uncertainties occurs or if the
underlying assumptions prove incorrect, then the Company's actual results,
performance or achievements in 2000 and beyond could differ materially from
those expressed in, or implied by, the forward-looking statements.
The Registrants caution that the foregoing list of important factors
is not exclusive, and neither such list nor any such forward-looking
statement takes into account the impact that any future acquisition may
have on us and any such forward-looking statement. The Registrants do not
undertake to update any forward-looking statement, whether written or oral,
that may be made from time to time by or on behalf of the Registrants.
THE COMPANY
Waddell & Reed Financial, Inc. (the "Company"), a Delaware holding
company founded in 1981, is the parent company of one of the oldest mutual
fund complexes in the United States, having introduced the United family of
funds in 1940. Through its subsidiaries, the Company sells its investment
products primarily to middle income Americans through a virtually exclusive
sales force. As of June 30, 2000, the Company, through its subsidiaries,
had $39.8 billion of assets under management, of which $33.8 billion were
mutual fund assets and $6.0 billion were managed institutional and private
accounts. The Company, through its subsidiaries, has over 633,700 mutual
fund customers having an average investment of $65,800 and 63,000 variable
account customers having an average investment of $60,500. The Company,
through its subsidiaries, is the exclusive underwriter and distributor of
41 mutual fund portfolios, including 19 comprising the Waddell & Reed
Advisors Funds (the "Advisors Funds"), 11 comprising the W & R Funds (the
"W&R Funds"), and 11 comprising the Target/United Funds (the "Target/United
Funds" and together with the Advisors Funds and the W&R Funds, the
"Funds"). The Company and its subsidiaries derive their revenues primarily
from investment management, investment product distribution, and
shareholder services administration provided to the Funds and managed
institutional accounts. As part of its financial planning services, the
Company, through its subsidiaries, also distributes variable annuities and
life insurance products, underwritten primarily by an unaffiliated third
party, to its customers.
The Company is a legal entity separate and distinct from its
subsidiaries (collectively, the "affiliates"). Accordingly, the right of
the Company, and thus the right of the Company's creditors and
shareholders, to participate in any distribution of the assets or earnings
of any affiliate is necessarily subject to the prior claims of creditors of
the affiliate, except to the extent that claims of the Company in its
capacity as a creditor may be recognized. Accordingly, the Senior Debt
Securities and Junior Subordinated Debt Securities will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and holders of Senior Debt Securities and Junior Subordinated
Debt Securities should look only to the assets of the Company for payments
on the Senior Debt Securities and Junior Subordinated Debt Securities.
The Company's executive offices are located at 6300 Lamar Avenue,
Overland Park, Kansas 66202, and the telephone number is (913) 236-2000.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for the Company, which are
computed on the basis of the total enterprise (as defined by the SEC) by
dividing earnings before fixed charges and income taxes by fixed charges,
are set forth below for the periods indicated. Fixed charges consist
principally of interest expense on all long-and short-term borrowings.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------ ---------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges 17.8x 37.0x 21.2x 202.9x N/A (1) N/A (1) N/A (1)
</TABLE>
The schedule above excludes the impact of interest relating to notes
with Torchmark Corporation existing prior to the initial public offering in
the first quarter of 1998. Concurrent with the offering, all notes were
prepaid.
----------------------
(1) During these periods, the Company had no long-or short-term
borrowings outstanding.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the
securities described in a prospectus supplement, for general corporate
purposes. These corporate purposes may include the funding of investments
in, or extensions of credit to, the Company's subsidiaries. Except as
described in the applicable prospectus supplement, specific allocations of
the proceeds to such purposes have not been made. Pending the uses
described above, the Company may temporarily invest the net proceeds in
various short-term securities or apply the net proceeds to reduce
short-term indebtedness. Based upon the historic and anticipated future
growth of the Company and the financial needs of its subsidiaries, the
Company anticipates that it will, on an ongoing basis, engage in additional
financings in character and amount to be determined.
WADDELL & REED CAPITAL TRUST I
WADDELL & REED Capital Trust I is a statutory business trust created
under Delaware law pursuant to:
o a declaration of trust executed by the Company, as sponsor
(the "Sponsor") of WADDELL & REED Capital Trust I, and
o a certificate of trust filed with the Delaware Secretary of
State.
The declaration of trust will be amended and restated in its entirety
(as so amended and restated, the "Declaration") substantially in the form
filed as an exhibit to the registration statement of which this prospectus
forms a part.
The Declaration will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
WADDELL & REED Capital Trust I may offer to the public, from time to
time, trust preferred securities (the "Trust Preferred Securities")
representing preferred beneficial interests in WADDELL & REED Capital Trust
I.
WADDELL & REED Capital Trust I exists for the exclusive purposes of:
o issuing and selling its Trust Securities (as defined below),
o using the proceeds from the sale of such Trust Securities to
acquire a series of Corresponding Junior Subordinated Debt
Securities (as defined below) issued by the Company, and
o engaging in only those other activities necessary or
incidental to the above activities (such as registering the
transfer of the Trust Securities).
WADDELL & REED Capital Trust I will sell common securities
representing undivided beneficial ownership interests in WADDELL & REED
Capital Trust I to the Company (the "Common Securities") and Trust
Preferred Securities representing undivided beneficial ownership interests
in such trust to the public. The Common Securities and the Trust Preferred
Securities together are also referred to as the "Trust Securities."
When WADDELL & REED Capital Trust I sells its Trust Preferred
Securities to the public it will use the money it receives together with
the money it receives from the sale of its Common Securities to buy a
series of the Company's Junior Subordinated Debt Securities (the
"Corresponding Junior Subordinated Debt Securities"). The payment terms of
the Corresponding Junior Subordinated Debt Securities will be virtually the
same as the terms of the WADDELL & REED Capital Trust I's Trust Preferred
Securities (the "Related Trust Preferred Securities").
WADDELL & REED Capital Trust I will own only the applicable series of
Corresponding Junior Subordinated Debt Securities. The only source of funds
for WADDELL & REED Capital Trust I will be the payments it receives from
the Company on the Corresponding Junior Subordinated Debt Securities.
WADDELL & REED Capital Trust I will use such funds to make cash payments to
holders of the Trust Preferred Securities.
WADDELL & REED Capital Trust I will also have the right to be
reimbursed by the Company for certain expenses.
All of the Common Securities of WADDELL & REED Capital Trust I will be
owned by the Company. The Common Securities of WADDELL & REED Capital Trust
will rank equally, and payments will be made on such securities pro rata,
with the Trust Preferred Securities of WADDELL & REED Capital Trust I,
except that upon the occurrence and continuance of an event of default
under a Declaration resulting from an event of default under the Junior
Indenture, the rights of the Company, as holder of the Common Securities,
to payment in respect of distributions and payments upon liquidation or
redemption will be subordinated to the rights of the holders of the Trust
Preferred Securities of WADDELL & REED Capital Trust I. See "Description of
the Trust Preferred Securities." The Company will acquire Common Securities
in an aggregate liquidation amount equal to not less than 3% of the total
capital of WADDELL & REED Capital Trust I.
The prospectus supplement relating to any Trust Preferred Securities
will contain the details of the cash distributions to be made periodically
to the holders of the Trust Preferred Securities.
Under certain circumstances, the Company may redeem the Corresponding
Junior Subordinated Debt Securities which it sold to WADDELL & REED Capital
Trust I. If it does this, WADDELL & REED Capital Trust I will redeem a like
amount of the Trust Preferred Securities which it sold to the public and
the Common Securities which it sold to the Company.
Under certain circumstances the Company may terminate WADDELL & REED
Capital Trust I and cause the Corresponding Junior Subordinated Debt
Securities to be distributed to the holders of the Related Trust Preferred
Securities. If this happens, owners of the Related Trust Preferred
Securities will no longer have any interest in such WADDELL & REED Capital
Trust I and will only own the Corresponding Junior Subordinated Debt
Securities.
Unless otherwise specified in the applicable prospectus supplement:
o WADDELL & REED Capital Trust I will have a term of
approximately 55 years from the date it issues its Trust
Securities, but may terminate earlier as provided in the
Declaration.
o WADDELL & REED Capital Trust I's business and affairs will be
conducted by its trustees (collectively, the "WADDELL & REED
Capital Trust I Trustees").
o The trustees will be appointed by the Company as holder of
the WADDELL & REED Capital Trust I's Common Securities.
o The duties and obligations of the trustees are governed by
the Declaration for WADDELL & REED Capital Trust I.
o The trustees will be Chase Manhattan Trust Company National
Association, as the institutional Trustee (the "Institutional
Trustee"), The Chase Manhattan Bank U.S.A., N.A., as the
Delaware Trustee (the "Delaware Trustee"), and one or more
individual trustees (the "Regular Trustees") who are
employees or officers of or affiliated with the Company.
Chase Manhattan Trust Company National Association, as
Institutional Trustee, will act as sole indenture trustee
under the Declaration for purposes of compliance with the
Trust Indenture Act. Chase Manhattan Trust Company National
Association will also act as trustee under the Guarantees and
the Junior Indenture. See "Description of the Preferred
Securities Guarantees", "Description of Senior Debt
Securities" and "Description of Junior Subordinated Debt
Securities."
o The Company will pay all fees and expenses related to each
WADDELL & REED Capital Trust I and the offering of the Trust
Preferred Securities and will pay, directly or indirectly,
all ongoing costs, expenses and liabilities of each WADDELL &
REED Capital Trust I.
o No amendment or modification may be made to the Declaration
which would adversely affect the rights or preferences of the
Trust Securities without the approval of the majority in
liquidation amount of the Trust Securities (which may be only
the Trust Preferred Securities or Common Securities of such
trust if only that class is affected).
The principal executive office of WADDELL & REED Capital Trust I is
6300 Lamar Avenue, Overland Park, Kansas 66202, and its telephone number is
(913) 236-2000.
DESCRIPTION OF SENIOR DEBT SECURITIES
GENERAL
The following description applies to the senior debt securities
offered by this prospectus (the "Senior Debt Securities"). The Senior Debt
Securities will be direct, unsecured obligations of the Company and will
rank on a parity with all outstanding unsecured senior indebtedness of the
Company. The Senior Debt Securities may be issued in one or more series.
The Senior Debt Securities will be issued under a Senior Indenture (the
"Senior Indenture") the Company and the trustee specified in the applicable
Prospectus Supplement (the "Trustee").
The statements under this caption are brief summaries of certain
provisions contained in the Senior Indenture, do not claim to be complete
and are qualified in their entirety by reference to the Senior Indenture,
copy of which is exhibit to, or incorporated by reference in, the
registration statement of which this prospectus forms a part. Whenever
defined terms are used but not defined in this prospectus, those terms have
the meanings given to them in the Senior Indenture.
The following material describes certain general terms and provisions
of the Senior Debt Securities to which any prospectus supplement may
relate. The particular terms of any Senior Security and the extent, if any,
to which these general provisions may apply to such Senior Debt Securities
will be described in the prospectus supplement relating to the Senior Debt
Securities.
The Senior Indenture does not limit the aggregate principal amount of
Senior Debt Securities which may be issued under it. Rather, the Senior
Indenture provides that Senior Debt Securities of any series may be issued
under it up to the aggregate principal amount which may be authorized from
time to time by the Company. Senior Debt Securities may be denominated in
any currency or currency unit designated by the Company. Neither the Senior
Indenture nor the Senior Debt Securities will limit or otherwise restrict
the amount of other debt which may be incurred or the other securities
which may be issued by the Company or any of its subsidiaries.
Senior Debt Securities of a series may be issuable in registered form
without coupons ("Registered Securities"), in bearer form with or without
coupons attached ("Bearer Securities") or in the form of one or more global
securities in registered or bearer form (each a "Global Security"). Bearer
Securities, if any, will be offered only to non-United States persons and
to offices located outside the United States of certain United States
financial institutions.
You must review the prospectus supplement for a description of the
following terms, where applicable, of each series of Senior Debt Securities
for which this prospectus is being delivered:
o the title of the Senior Debt Securities;
o the limit, if any, on the aggregate principal amount or
aggregate initial public offering price of the Senior Debt
Securities;
o the priority of payment of the Senior Debt Securities;
o the price or prices, which may be expressed as a percentage
of the aggregate principal amount, at which the Senior Debt
Securities will be issued;
o the date or dates on which the principal of the Senior Debt
Securities will be payable;
o the interest rate or rates, which may be fixed or variable,
for the Senior Debt Securities, if any, or the method of
determining the same;
o the date or dates from which interest, if any, on the Senior
Debt Securities will accrue, the date or dates on which
interest, if any, will be payable, the date or dates on which
payment of interest, if any, will commence and the regular
record dates for the interest payment dates;
o the extent to which any of the Senior Debt Securities will be
issuable in temporary or permanent global form, or the manner
in which any interest payable on a temporary or permanent
global Senior Security will be paid;
o each office or agency where the Senior Debt Securities may be
presented for registration of transfer or exchange;
o the place or places where the principal of, premium, if any,
and interest, if any, on the Senior Debt Securities will be
payable;
o the date or dates, if any, after which the Senior Debt
Securities may be redeemed or purchased in whole or in part,
(i) at the option of the Company or (ii) mandatorily pursuant
to any sinking, purchase or similar fund or (iii) at the
option of the holder, and the redemption or repayment price
or prices;
o the terms, if any, upon which the Senior Debt Securities may
be convertible into or exchanged for securities or
indebtedness of any kind of the Company or of any other
issuer or obligor and the terms and conditions upon which the
conversion or exchange would be made, including the initial
conversion or exchange price or rate, the conversion period
and any other additional provisions;
o the authorized denomination or denominations for the Senior
Debt Securities;
o the currency, currencies or units based on or related to
currencies for which the Senior Debt Securities may be
purchased and the currency, currencies or currency units in
which the principal of, premium, if any, and any interest, if
any, on the Senior Debt Securities may be payable;
o any index used to determine the amount of payments of
principal of, premium, if any, and interest, if any, on the
Senior Debt Securities;
o whether any of the Senior Debt Securities are to be issuable
as Bearer Securities and/or Registered Securities, and if
issuable as Bearer Securities, any limitations on issuance of
the Bearer Securities and any provisions regarding the
transfer or exchange of the Bearer Securities, including
exchange for registered Senior Debt Securities of the same
series;
o the payment of any additional amounts with respect to the
Senior Debt Securities;
o whether any of the Senior Debt Securities will be issued as
Original Issue Discount Securities (as defined below);
o information with respect to book-entry procedures, if any;
o any additional covenants or Events of Default not currently
included in the Senior Indenture; and
o any other terms of the Senior Debt Securities not
inconsistent with the provisions of the Senior Indenture.
If any of the Senior Debt Securities are sold for one or more foreign
currencies or foreign currency units or if the principal of, premium, if
any, or interest, if any, on any series of Senior Debt Securities is
payable in one or more foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other
information with respect to that issue of Senior Debt Securities and those
currencies or currency units will be described in the applicable prospectus
supplement.
A judgment for money damages by courts in the United States, including
a money judgment based on an obligation expressed in a foreign currency,
will ordinarily be rendered only in U.S. dollars. New York statutory law
provides that a court shall render a judgment or decree in the foreign
currency of the underlying obligation and that the judgment or decree shall
be converted into U.S. dollars at the exchange rate prevailing on the date
of entry of the judgment or decree.
Senior Debt Securities may be issued as original issue discount Senior
Debt Securities which bear no interest or interest at a rate which at the
time of issuance is below market rates ("Original Issue Discount
Securities"), to be sold at a substantial discount below the stated
principal amount thereof due at the stated maturity of such Senior Debt
Securities, There may be no periodic payments of interest on Original Issue
Discount Securities. In the event of an acceleration of the maturity of any
Original Issue Discount Security, the amount payable to the holder of the
Original Issue Discount Security upon acceleration will be determined in
accordance with the prospectus supplement, the terms of the security and
the Senior Indenture, but will be an amount less than the amount payable at
the maturity of the principal of the Original Issue Discount Security.
Federal income tax considerations with respect to Original Issue Discount
Securities will be described in the applicable prospectus supplement.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable prospectus supplement,
Senior Debt Securities will be issued only as Registered Securities. If
Bearer Securities are issued, the United States federal income tax
consequences and other special considerations, procedures and limitations
relating to the Bearer Securities will be described in the applicable
prospectus supplement.
Senior Debt Securities issued as Registered Securities will not have
interest coupons. Senior Debt Securities issued as Bearer Securities will
have interest coupons attached, unless issued as zero coupon securities.
Registered Securities (other than a Global Security) may be presented
for transfer, with the form of transfer endorsed thereon duly executed, or
exchanged for other Senior Debt Securities of the same series at the office
of the security registrar specified in the Senior Indenture. The Company
has agreed in the Senior Indenture that, with respect to Registered
Securities having The City of New York as a place of payment, the Company
will appoint a security registrar or co-security registrar located in The
City of New York for such transfer or exchange. Transfer or exchange will
be made without service charge, but the Company may require payment of any
taxes or other governmental charges. Provisions relating to the exchange of
Bearer Securities for other Senior Debt Securities of the same series,
including, if applicable, Registered Securities, will be described in the
applicable prospectus supplement. In no event, however, will Registered
Securities be exchangeable for Bearer Securities.
BOOK-ENTRY SENIOR DEBT SECURITIES
Senior Debt Securities of a series may be issued in whole or in part
in the form of one or more Global Securities. Each Global Security will be
deposited with, or on behalf of, a depositary (the "Depositary") identified
in the applicable prospectus supplement. Global Securities may be issued in
either registered or bearer form and in either temporary or permanent form.
Until exchanged in whole or in part for the individual securities which it
represents, a Global Security may not be transferred except as a whole by
the Depositary for the Global Security to a nominee of the Depositary or by
a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any nominee to a successor Depositary or
any nominee of the successor.
The specific terms of the depositary arrangement for a series of
Senior Debt Securities and certain limitations and restrictions relating to
a series of Bearer Securities in the form of one or more Global Securities
will be described in the applicable prospectus supplement.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable prospectus supplement,
payment of principal of, premium, if any, and any interest on Registered
Securities will be made at the office of such paying agent or paying agents
as the Company may designate from time to time. In addition, at the option
of the Company, payment of any interest may be made (i) by check mailed to
the address of the person entitled to the payment at the address in the
applicable security register or (ii) by wire transfer to an account
maintained by the person entitled to the payment as specified in the
applicable security register. Unless otherwise indicated in an applicable
prospectus supplement, payment of any installment of interest on Registered
Securities will be made to the person in whose name such Senior Security is
registered at the close of business on the regular record date for such
payment.
Unless otherwise indicated in an applicable prospectus supplement,
payment of principal of, premium, if any, and any interest on Bearer
Securities will be payable, subject to any applicable laws and regulations,
at the offices of such paying agents outside the United States as the
Company may designate from time to time, at the option of the holder, by
check or by transfer to an account maintained by the holder with a bank
located outside the United States. Unless otherwise indicated in an
applicable prospectus supplement, payment of interest on Bearer Securities
will be made only against surrender of the coupon for such interest payment
date. Payment on any Bearer Security will not be made at any office or
agency of the Company in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a
bank located in the United States.
CONSOLIDATION, MERGER OR SALE OF ASSETS
The Senior Indenture provides that the Company may, without the
consent of the holders of any of the Senior Debt Securities outstanding
under the Senior Indenture, consolidate with, merge into or transfer its
assets substantially as an entirety to any person, provided that:
o any successor assumes the Company's obligations on the Senior
Debt Securities and under the Senior Indenture, and
o after giving effect to the consolidation, merger or transfer,
no Event of Default (as defined in the Senior Indenture) will
have happened and be continuing.
Any consolidation, merger or transfer of assets substantially as an
entirety, which meets the conditions described above, would not create any
Event of Default which would entitle holders of the Senior Debt Securities,
or the Trustee acting on their behalf, to take any of the actions described
below under "Senior Debt Securities--Events of Default, Waivers, Etc."
LEVERAGED AND OTHER TRANSACTIONS
The Senior Indenture and the Senior Debt Securities do not contain
provisions which would protect holders of the Senior Debt Securities in the
event of a highly leveraged or other transaction involving the Company
which could adversely affect the holders of Senior Debt Securities.
MODIFICATION OF THE SENIOR INDENTURE; WAIVER OF COVENANTS
The Senior Indenture provides that, with the consent of the holders of
not less than a majority in aggregate principal amount of the outstanding
Senior Debt Securities of each affected series, modifications and
alterations of the Senior Indenture may be made which affect the rights of
the holders of the Senior Debt Securities. However, no such modification or
alteration may be made without the consent of the holder of each Senior
Security affected which would, among other things,
o modify the terms of payment of principal, premium, if any, or
interest on the Senior Debt Securities; or
o reduce the percentage in principal amount of outstanding
Senior Debt Securities required to modify or alter the Senior
Indenture.
EVENTS OF DEFAULT, WAIVERS, ETC.
An Event of Default with respect to Senior Debt Securities of any
series is defined in the Senior Indenture as
o default in the payment of principal of or premium, if any, on
any of the outstanding Senior Debt Securities of that series
when due;
o default in the payment of interest on any of the outstanding
Senior Debt Securities of that series when due and
continuance of such default for 30 days;
o default in the performance of any other covenant of the
Company in the Senior Indenture with respect to Senior Debt
Securities of such series and continuance of such default for
90 days after written notice;
o certain events of bankruptcy, insolvency or reorganization of
the Company; and
o any other event that may be specified in a prospectus
supplement with respect to any series of Senior Debt
Securities.
If an Event of Default with respect to any series of outstanding
Senior Debt Securities occurs and is continuing, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the
outstanding Senior Debt Securities of such series may declare the principal
amount (or if such Senior Debt Securities are Original Issue Discount
Securities, the portion of the principal amount as may be specified in the
terms of that series) of all Senior Debt Securities of that series to be
immediately due and payable. The holders of a majority in aggregate
principal amount of the outstanding Senior Debt Securities of any series
may waive an Event of Default resulting in acceleration of such Senior Debt
Securities, but only if all Events of Default with respect to Senior Debt
Securities of such series have been remedied and all payments due, other
than those due as a result of acceleration, have been made.
If an Event of Default occurs and is continuing, the Trustee may, in
its discretion, and at the written request of holders of not less than a
majority in aggregate principal amount of the outstanding Senior Debt
Securities of any series and upon reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request and
subject to certain other conditions set forth in the Senior Indenture will,
proceed to protect the rights of the holders of all the Senior Debt
Securities of such series. Prior to acceleration of maturity of the
outstanding Senior Debt Securities of any series, the holders of a majority
in aggregate principal amount of the Senior Debt Securities may waive any
past default under the Senior Indenture except a default in the payment of
principal of, premium, if any, or interest on the Senior Debt Securities of
that series.
The Senior Indenture provides that upon the occurrence of an Event of
Default specified in clauses (1) or (2) of the first paragraph in this
subsection, the Company will, upon demand of the Trustee, pay to it, for
the benefit of the holder of any such Senior Security, the whole amount
then due and payable on the affected Senior Debt Securities for principal,
premium, if any, and interest. The Senior Indenture further provides that
if the Company fails to pay such amount upon such demand, the Trustee may,
among other things, institute a judicial proceeding for the collection of
such amounts.
The Senior Indenture also provides that notwithstanding any of its
other provisions, the holder of any Senior Security of any series will have
the right to institute suit for the enforcement of any payment of principal
of, premium, if any, and interest on the Senior Debt Securities when due
and that such right will not be impaired without the consent of such
holder.
The Company is required to file annually with the Trustee a written
statement of officers as to the existence or non-existence of defaults
under the Senior Indenture or the Senior Debt Securities.
REGARDING THE TRUSTEE
Information concerning the Trustee for a series of Senior Debt
Securities will be set forth in the Prospectus Supplement relating to such
series of Senior Debt Securities.
The Company and its affiliates have normal banking relationships with
the Trustee in the ordinary course of business.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
Junior subordinated debt securities (the "Junior Subordinated Debt
Securities") may be issued from time to time in one or more series under an
Indenture (the "Junior Indenture"), between the Company and the trustee
specified in the applicable Prospectus Supplement (the "Trustee"). The
terms of the Junior Subordinated Debt Securities will include those stated
in the Junior Indenture and those made part of the Junior Indenture by
reference to the Trust Indenture Act. The following summary of certain
provisions contained in the Junior Indenture is not complete and is subject
to the provisions of, and is qualified in its entirety by, the Junior
Indenture, which is filed or incorporated by reference as an exhibit to the
registration statement of which this prospectus forms a part, and the Trust
Indenture Act. Whenever particular provisions or defined terms in the
Junior Indenture are referred to herein, such provisions or defined terms
are incorporated by reference herein.
GENERAL
The Junior Subordinated Debt Securities will be unsecured,
subordinated obligations of the Company. The Junior Indenture does not
limit the aggregate principal amount of Junior Subordinated Debt Securities
which may be issued under it. The Junior Subordinated Debt Securities are
issuable in one or more series pursuant to an indenture supplemental to the
Junior Indenture or a resolution of the Company's Board of Directors or a
committee appointed by the Board.
In the event Junior Subordinated Debt Securities are issued to WADDELL
& REED Capital Trust I or a trustee of such trust in connection with the
issuance of Trust Securities by WADDELL & REED Capital Trust I, such
Corresponding Junior Subordinated Debt Securities subsequently may be
distributed pro rata to the holders of the Trust Securities in connection
with the dissolution of WADDELL & REED Capital Trust I, as described in the
prospectus supplement relating to the Trust Securities. Only one series of
Corresponding Junior Subordinated Debt Securities will be issued to WADDELL
& REED Capital Trust I or a trustee of such trust in connection with the
issuance of Trust Securities by WADDELL & REED Capital Trust I.
You must review the prospectus supplement relating to the particular
Junior Subordinated Debt Securities for the following terms:
o the specific designation of the Junior Subordinated Debt
Securities;
o the aggregate principal amount of the Junior Subordinated
Debt Securities;
o the percentage of their principal amount at which the Junior
Subordinated Debt Securities will be issued;
o the date or dates on which the principal of and premium, if
any, on the Junior Subordinated Debt Securities will be
payable and the right, if any, to extend such date or dates;
o the interest rate or rates, which may be fixed or variable,
if any, of the Junior Subordinated Debt Securities, or the
method of determination of such rate or rates;
o the date or dates from which such interest will accrue, the
interest payment dates on which such interest will be payable
or the manner of determination of such interest payment dates
and the record dates for the determination of holders to whom
interest is payable on such interest payment dates;
o the right, if any, to extend the interest payment periods and
the duration of an extension;
o the period or periods, if any, within which, the price or
prices of which, and the terms and conditions upon which the
Junior Subordinated Debt Securities may be redeemed, in whole
or in part;
o the right and/or obligation, if any, of the Company to redeem
or purchase the Junior Subordinated Debt Securities pursuant
to any sinking fund or similar provisions or at the option of
the holder of the security and the period or periods for
which, the price or prices at which, and the terms and
conditions upon which, the Junior Subordinated Debt
Securities will be redeemed or repurchased, in whole or in
part, pursuant to such right and/or obligation;
o the terms and conditions, if any, upon which the Junior
Subordinated Debt Securities may be converted into shares of
the common stock of the Company, including the conversion
price and the circumstances, if any, under which such
conversion right will expire;
o the terms of subordination;
o the form of the Junior Subordinated Debt Securities; and
o any other specific terms of the Junior Subordinated Debt
Securities.
If a prospectus supplement specifies that a series of Junior
Subordinated Debt Securities is denominated in a currency or currency unit
other than United States dollars, the prospectus supplement will also
specify the denomination in which the Junior Subordinated Debt Securities
will be issued and the coin or currency in which the principal, premium, if
any, and interest, if any, on the Junior Subordinated Debt Securities will
be payable.
The Junior Indenture does not contain provisions that protect holders
of the Junior Subordinated Debt Securities in the event of a highly
leveraged transaction or other similar transaction involving the Company
that may adversely affect such holders.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable prospectus supplement,
the Junior Subordinated Debt Securities will be issued in fully registered
form without coupons and in denominations of $1,000 and multiples of
$1,000. No service charge will be made for any transfer or exchange of the
Junior Subordinated Debt Securities, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax or other government
charge payable in connection with such transfer or exchange.
Unless otherwise provided in the applicable prospectus supplement,
principal and premium, if any, or interest, if any, will be payable and the
Junior Subordinated Debt Securities may be surrendered for payment or
transferred at the offices of the Trustee as paying and authenticating
agent, provided that payment of interest, if any, may be made at the option
of the Company (i) by check mailed to the address of the person entitled to
such payment as it appears in the security register or (ii) by wire
transfer to an account maintained by the person entitled to such payment as
specified in the applicable security register.
BOOK-ENTRY JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities of a series may be issued in
whole or in part in the form of one or more Global Securities that will be
deposited with, or on behalf of, a Depositary, or its nominee, which will
be identified in the prospectus supplement relating to such series. In such
a case, one or more Global Securities will be issued in a denomination or
aggregate denomination equal to the portion of the aggregate principal
amount of outstanding Junior Subordinated Debt Securities of the series to
be represented by such Global Security or Securities. Until it is exchanged
in whole or in part for Junior Subordinated Debt Securities in definitive
registered form, a Global Security may not be registered for transfer or
exchange except as a whole by the Depositary for the Global Security to a
nominee for the Depositary and except in the circumstances described in the
applicable prospectus supplement.
The specific terms of the depositary arrangement for any portion of a
series of Junior Subordinated Debt Securities to be represented by a Global
Security and a description of the Depositary will be provided in the
applicable prospectus supplement.
SUBORDINATION
The Junior Subordinated Debt Securities will be subordinated and
junior in right of payment to certain other indebtedness of the Company
(which may include senior indebtedness for money borrowed) to the extent
described in the applicable prospectus supplement.
CERTAIN COVENANTS OF THE COMPANY
In the event Corresponding Junior Subordinated Debt Securities are
issued to WADDELL & REED Capital Trust I or its trustee in connection with
the issuance of Trust Securities of WADDELL & REED Capital Trust I, for so
long as the Trust Securities remain outstanding, the Company will covenant:
o to maintain directly or indirectly 100% ownership of the
Common Securities of WADDELL & REED Capital Trust I, provided
that certain successors which are permitted under the Junior
Indenture may succeed to the Company's ownership of the
Common Securities;
o as holder of the Common Securities, not to voluntarily
terminate, wind-up or liquidate WADDELL & REED Capital Trust
I, except (a) in connection with a distribution of
Corresponding Junior Subordinated Debt Securities to the
holders of the Trust Securities in liquidation of WADDELL &
REED Capital Trust I or (b) in connection with certain
mergers, consolidations or amalgamations permitted by the
Declaration of WADDELL & REED Capital Trust I; and
o to use its reasonable efforts, consistent with the terms and
provisions of the Declaration of WADDELL & REED Capital Trust
I, to cause WADDELL & REED Capital Trust I to remain
classified as a grantor trust and not as an association
taxable as a corporation for United States federal income tax
purposes.
LIMITATION ON MERGERS AND SALES OF ASSETS
The Company will not consolidate with, or merge into, any corporation
or convey or transfer its properties and assets substantially as an
entirety to any person unless:
o the successor entity expressly assumes the obligations of the
Company under the Junior Indenture, and
o after giving effect thereto, no Event of Default, and no
event which, after notice or lapse of time, or both, would
become an Event of Default, will have occurred and be
continuing under the Junior Indenture.
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Junior Indenture provides that any one or more of the following
events which has occurred and is continuing constitutes an "Event of
Default" with respect to each series of Junior Subordinated Debt
Securities:
o default for 30 days in payment of any interest on the Junior
Subordinated Debt Securities of that series, when due;
provided, however, that a valid extension of the interest
payment period by the Company will not constitute a default
in the payment of interest for this purpose; or
o default in payment of principal and premium, if any, on the
Junior Subordinated Debt Securities of that series when due
either at maturity, upon redemption, by declaration or
otherwise; provided, however, that a valid extension of the
maturity of such Junior Subordinated Debt Securities will not
constitute a default for this purpose; or
o default by the Company in the performance, or breach, in any
material respect of any other of the covenants or agreements
in the Junior Indenture which will not have been remedied for
a period of 90 days after notice; or
o certain events of bankruptcy, insolvency or reorganization of
the Company; or
o any other Event of Default provided with respect to a
particular series of Junior Subordinated Debt Securities as
described in the related prospectus supplement.
The Junior Indenture provides that the Trustee may withhold notice to
the holders of a series of Junior Subordinated Debt Securities, except in
payment of principal or of interest or premium on the Junior Subordinated
Debt Securities, if the Trustee considers it in the interest of such
holders to do so.
The Junior Indenture provides that if an Event of Default with respect
to any series of Junior Subordinated Debt Securities has occurred and is
continuing, either the Trustee or the holders of 25 percent in principal
amount of the outstanding Junior Subordinated Debt Securities of such
affected series may declare the principal of all Junior Subordinated Debt
Securities of the series to be due and payable immediately, but upon
certain conditions such declaration may be annulled and past defaults may
be waived, except defaults in payment of principal of or interest or
premium, if any, on the Junior Subordinated Debt Securities, by the holders
of a majority in principal amount of the outstanding Junior Subordinated
Debt Securities of the series.
The holders of a majority in principal amount of the outstanding
Junior Subordinated Debt Securities of any affected series will have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee under the Junior Indenture with respect
to the series, provided that the holders of the Junior Subordinated Debt
Securities will have offered to the Trustee reasonable indemnity against
expenses and liabilities.
The Junior Indenture also provides that notwithstanding any of its
other provisions, the holder of any Junior Subordinated Debt Security of
any series, will have the right to institute suit for the enforcement of
any payment of principal of, premium, if any, and interest on the Junior
Subordinated Debt Security on the stated maturity or upon repayment or
redemption of such Junior Subordinated Debt Security and that this right
will not be impaired without the consent of such holder.
The Junior Indenture requires the annual filing by the Company with
the Trustee of a certificate as to the absence of certain defaults under
the Junior Indenture.
MODIFICATION OF THE JUNIOR INDENTURE
The Junior Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debt Securities of all series
affected by the modification at the time outstanding, to modify the Junior
Indenture or the rights of the holders of the Junior Subordinated Debt
Securities. However, no such modification will:
o modify the terms of payment of principal, premium, if any, or
interest on any Junior Subordinated Senior Debt Securities,
or impair or affect the right of any holder of Junior
Subordinated Debt Securities to institute suit for the
payment of the security or the right of prepayment, if any,
at the option of the holder, without the consent of the
holder of each Junior Subordinated Debt Security so affected,
or
o reduce the percentage of holders of Junior Subordinated Debt
Securities whose consent is required for any such
modification, unless the consent of the holders of each
Junior Subordinated Debt Security affected is obtained.
If Junior Subordinated Debt Securities of a series are held by WADDELL
& REED Capital Trust I or a trustee of such trust, a supplemental indenture
requiring such consent will not be effective until the holders of a
majority in liquidation amount of the Trust Securities of WADDELL & REED
Capital Trust I consent to such supplemental indenture. If the consent of
the holders of each outstanding Junior Subordinated Debt Security of a
series is required, such supplemental indenture will not be effective until
each holder of the Trust Securities of WADDELL & REED Capital Trust I
consents to such supplemental indenture.
As a result of these pass through voting rights with respect to
modifications to the Junior Indenture, no modification to such indenture
will be effective until the holders of a majority in liquidation amount of
the Trust Securities consent to such modification and no modification
described in clauses (1) and (2) above will be effective without the
consent of each holder of Trust Preferred Securities and each holder of
Common Securities of WADDELL & REED Capital Trust I.
SATISFACTION AND DISCHARGE
The Junior Indenture provides, among other things, that when all
Junior Subordinated Debt Securities not previously delivered to the Trustee
for cancellation (i) have become due and payable or (ii) will become due
and payable at their stated maturity within one year, the Company may
deposit or cause to be deposited with the Trustee funds, in trust, for the
purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debt Securities not previously
delivered to the Trustee for cancellation, for the principal, premium, if
any, and interest to the date of the deposit or to the stated maturity, as
the case may be. Upon such deposit, the Junior Indenture will cease to be
of further effect except as to the Company's obligations to pay all other
sums due pursuant to the Junior Indenture and to provide the officers'
certificates and opinions of counsel required under the Junior Indenture,
and the Company will be deemed to have satisfied and discharged the Junior
Indenture.
GOVERNING LAW
The Junior Indenture and the Junior Subordinated Debt Securities will
be governed by, and construed in accordance with, the laws of the State of
New York.
REGARDING THE TRUSTEE
Information concerning the Trustee for a series of Junior Subordinated
Debt Securities will be set forth in the Prospectus Supplement relating to
such series of Junior Subordinated Debt Securities.
DESCRIPTION OF WARRANTS
OFFERED WARRANTS
We may issue warrants that are debt warrants or equity warrants. We
may offer warrants separately or together with one or more additional
warrants or debt securities or any combination of those securities in the
form of units, as described in the applicable prospectus supplement. If we
issue warrants as part of a unit, the accompanying prospectus supplement
will specify whether those warrants may be separated from the other
securities in the unit prior to the warrants' expiration date.
DEBT WARRANTS
We may issue, together with debt securities or separately, warrants
for the purchase of debt securities on terms to be determined at the time
of sale. We refer to this type of warrant as a "Debt Warrant."
EQUITY WARRANTS
We may also issue warrants to purchase, including warrant spreads, on
terms to be determined at the time of sale, shares of our Class A Common Stock.
GENERAL TERMS OF WARRANTS
The applicable prospectus supplement will contain, where applicable,
the following terms of and other information relating to the warrants and
warrant spreads:
o the specific designation and aggregate number of, and the
price at which we will issue, the warrants;
o the currency with which the warrants may be purchased;
o the date on which the right to exercise the warrants will
begin and the date on which that right will expire or, if you
may not continuously exercise the warrants throughout that
period, the specific date or dates on which you may exercise
the warrants;
o whether the warrants will be issued in fully registered form
or bearer form, in definitive or global form or in any
combination of these forms, although, in any case, the form
of a warrant included in a unit will correspond to the form
of the unit and of any debt security included in that unit;
o any applicable material United States federal income tax
consequences;
o the identity of the warrant agent for the warrants and of any
other depositaries, execution or paying agents, transfer
agents, registrars, determination, or other agents;
o the proposed listing, if any, of the warrants or any
securities purchasable upon exercise of the warrants on any
securities exchange;
o if applicable, the minimum or maximum amount of the warrants
that may be exercised at any one time;
o information with respect to book-entry procedures, if any;
o the terms of the securities issuable upon exercise of the
warrants;
o the antidilution provisions of the warrants, if any;
o any redemption or call provisions;
o the exercise price and procedures for exercise of the
warrants;
o the terms of any warrant spread and the market price of the
Company's Common Stock which will trigger the Company's
obligation to issue shares of its common stock in settlement
of a warrant spread;
o whether the warrants are to be sold separately or with other
securities as part of units; and
o any other terms of the warrants.
SIGNIFICANT PROVISIONS OF THE WARRANT AGREEMENTS
We will issue the warrants under one or more warrant agreements to be
entered into between us and a bank or trust company, as warrant agent, in
one or more series, which will be described in the prospectus supplement
for the warrants. The forms of warrant agreements are filed as exhibits to
the registration statement. The following summaries of significant
provisions of the warrant agreements and the warrants are not intended to
be comprehensive and holders of warrants should review the detailed
provisions of the relevant warrant agreement for a full description and for
other information regarding the warrants.
MODIFICATIONS WITHOUT CONSENT OF WARRANTHOLDERS
We and the warrant agent may amend the terms of the warrants and the
warrant certificates without the consent of the holders to:
o cure any ambiguity;
o cure, correct or supplement any defective or inconsistent
provision; or
o amend the terms in any other manner which we may deem
necessary or desirable and which will not adversely affect
the interests of the affected holders in any material
respect.
ENFORCEABILITY OF RIGHTS OF WARRANTHOLDERS
The warrant agents will act solely as our agents in connection with
the warrant certificates and will not assume any obligation or relationship
of agency or trust for or with any holders of warrant certificates or
beneficial owners of warrants. Any holder of warrant certificates and any
beneficial owner of warrants may, without the consent of any other person,
enforce by appropriate legal action, on its own behalf, its right to
exercise the warrants evidenced by the warrant certificates in the manner
provided for in that series of warrants or pursuant to the applicable
warrant agreement. No holder of any warrant certificate or beneficial owner
of any warrants will be entitled to any of the rights of a holder of the
debt securities or any other warrant property, if any, purchasable upon
exercise of the warrants, including, without limitation, the right to
receive the payments on those debt securities or other warrant property or
to enforce any of the covenants or rights in the relevant indenture or any
other similar agreement.
REGISTRATION AND TRANSFER OF WARRANTS
Subject to the terms of the applicable warrant agreement, warrants in
registered, definitive form may be presented for exchange and for
registration of transfer at the corporate trust office of the warrant agent
for that series of warrants, or at any other office indicated in the
prospectus supplement relating to that series of warrants, without service
charge. However, the holder will be required to pay any taxes and other
governmental charges as described in the warrant agreement. The transfer or
exchange will be effected only if the warrant agent for the series of
warrants is satisfied with the documents of title and identity of the
person making the request.
NEW YORK LAW TO GOVERN
The warrants and each warrant agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 150,000,000
shares of Class A Common Stock, 100,000,000 shares of Class B Common Stock,
and 5,000,000 shares of Preferred Stock. No Preferred Stock is outstanding
as of the date of this Prospectus. The following summary description of the
capital stock of the Company is qualified by reference to the Certificate
of Incorporation and Bylaws of the Company, copies of which are filed as
exhibits to the Registration Statement.
COMMON STOCK
VOTING RIGHTS
The holders of Class A Common Stock and Class B Common Stock have
identical rights except that:
o holders of Class A Common Stock are entitled to one vote per
share while holders of Class B Common Stock are entitled to
five votes per share on all matters to be voted on by
stockholders and
o holders of Class A Common Stock are not eligible to vote on
any alteration or change in the powers, preferences, or
special rights of the Class B Common Stock or vice versa.
Holders of shares of Class A Common Stock and Class B Common Stock are
not entitled to cumulate their votes in the election of directors.
Generally, all matters to be voted on by stockholders must be approved by a
majority (or, in the case of election of directors, by a plurality) of the
votes entitled to be cast by all shares of Class A Common Stock and Class B
Common Stock present in person or represented by proxy, voting together as
a single class, subject to any voting rights granted to holders of any
Preferred Stock. Except as otherwise provided by law, and subject to any
voting rights granted to holders of any outstanding Preferred Stock,
amendments to the Company's Certificate of Incorporation generally must be
approved by a majority of the combined voting power of all Class A Common
Stock and Class B Common Stock voting together as a single class.
Amendments to the Company's Certificate of Incorporation that would alter
or change the powers, preferences, or special rights of the Class A Common
Stock or the Class B Common Stock so as to affect them adversely also must
be approved by a majority of the votes entitled to be cast by the holders
of the shares affected by the amendment, voting as a separate class.
Notwithstanding the foregoing, any amendment to the Company's Certificate
of Incorporation to increase the authorized shares of any class or classes
of stock will be deemed not to affect adversely the powers, preferences, or
special rights of the Class A Common Stock or Class B Common Stock.
DIVIDENDS
Holders of Class A Common Stock and Class B Common Stock will receive
an equal amount per share in any dividend declared by the Board of
Directors, subject to any preferential rights of any outstanding Preferred
Stock. Dividends consisting of shares of Class A Common Stock and Class B
Common Stock may be paid only as follows:
o shares of Class A Common Stock may be paid only to holders of
Class A Common Stock and shares of Class B Common Stock may
be paid only to holders of Class B Common Stock and
o shares will be paid proportionally with respect to each
outstanding share of Class A Common Stock and Class B Common
Stock.
OTHER RIGHTS
On liquidation, dissolution, or winding up of the Company, after
payment in full of the amounts required to be paid to holders of Preferred
Stock, if any, all holders of Common Stock, regardless of class, are
entitled to share ratably in any assets available for distribution to
holders of shares of Common Stock. No shares of Common Stock are subject to
redemption or have preemptive rights to purchase additional shares of
Common Stock. Upon consummation of the Offering, all the outstanding shares
of Class A Common Stock and Class B Common Stock will be validly issued,
fully paid, and nonassessable.
PREFERRED STOCK
As of the date of this Prospectus, no shares of Preferred Stock are
outstanding. The Board of Directors may authorize the issuance of Preferred
Stock in one or more series and may determine, with respect to any such
series, the designations, powers, preferences, and rights of such series,
and its qualifications, limitations, and restrictions, including, without
limitation,
o the designation of the series;
o the number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in
the designations for such series) increase or decrease (but
not below the number of shares of such series then
outstanding);
o whether dividends, if any, will be cumulative or
noncumulative and the dividend rate of the series;
o the conditions upon which and the dates at which dividends,
if any, will be payable, and the relation that such
dividends, if any, will bear to the dividends payable on any
other class or classes of stock;
o the redemption rights and price or prices, if any, for shares
of the series;
o the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the series;
o the amounts payable on and the preferences, if any, of shares
of the series, in the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the affairs of the
Company;
o whether the shares of the series will be convertible into
shares of any other class or series, or any other security,
of the Company or any other corporation, and, if so, the
specification of such other class or series or such other
security, the conversion price or prices or rate or rates,
any adjustments thereof, the date or dates as of which such
shares will be convertible and all other terms and conditions
upon which such conversion may be made; and
o the voting rights, if any, of the holders of shares of such
series.
The Company believes that the ability of the Board of Directors to
issue one or more series of Preferred Stock will provide the Company with
flexibility in structuring possible future financings and acquisitions and
in meeting other corporate needs that might arise. The authorized shares of
Preferred Stock will be available for issuance without further action by
the Company's stockholders, unless such action is required by applicable
law or the rules of any stock exchange or automated quotation system on
which the Company's securities may be listed or traded. The New York Stock
Exchange, Inc. (the "NYSE") currently requires stockholder approval as a
prerequisite to listing shares in several instances, including where the
present or potential issuance of shares could result in an increase in the
number of shares of common stock outstanding, or in the amount of voting
securities outstanding, of at least 20%.
Although the Board of Directors has no current intention of doing so,
it could issue a series of Preferred Stock that could, depending on the
terms of such series, impede the completion of a merger, tender offer, or
other takeover attempt. The Board of Directors will make any determination
to issue such shares based on its judgment as to the best interests of the
Company and its stockholders. The Board of Directors, in so acting, could
issue Preferred Stock having terms that could discourage a potential
acquirer from making, without first negotiating with the Board of
Directors, an acquisition attempt through which such acquirer may be able
to change the composition of the Board of Directors, including a tender
offer or other transaction that some, or a majority, of the Company's
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then current
market price of such stock.
RIGHTS PLAN
On April 28, 1999, the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of Class A
Common Stock, $.01 par value, and Class B Common Stock, $.01 par value, of
the Company (collectively, the "Common Stock"). The distribution was
payable to the stockholders of record at the close of business on May 12,
1999. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of a series of the Company's
preferred stock designated as Series A Junior Participating Preferred Stock
("Preferred Stock") at a price of $85.00 per one one-hundredth of a share
(the "Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and First Chicago Trust Company of New York, as Rights
Agent (the "Rights Agent").
Initially, the Rights were attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates
were distributed. Subject to certain exceptions specified in the Rights
Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the Voting Power as represented by the
outstanding shares of Common Stock (the "Stock Acquisition Date"), other
than as a result of repurchases of stock by the Company or certain
inadvertent actions by institutional or certain other stockholders, or (ii)
10 business days (or such later date as the Board shall determine prior to
any person becoming an Acquiring Person) following the commencement of a
tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person. Voting Power is defined as the total number
of votes entitled to be cast in the general election of the directors of
the Company. Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates issued
after the Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate. Pursuant to the Rights Agreement, the Company reserves the
right to require prior to the occurrence of a Triggering Event (as defined
below) that, upon any exercise of Rights, a number of Rights be exercised
so that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and will
expire at 5:00 P.M. (New York City time) on April 28, 2009 (the "Expiration
Date"), unless such date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding shares of Common Stock which the
independent directors determine to be fair and not inadequate and to
otherwise be in the best interests of the Company and its stockholders,
after receiving advice from one or more investment banking firms (a
"Qualified Offer"), each holder of a Right will thereafter have the right
to receive, upon exercise, Class A Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a
value equal to two times the exercise price of the Right. Notwithstanding
any of the foregoing, following the occurrence of the event set forth in
this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as
the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $85.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to
purchase $170.00 worth of Class A Common Stock (or other consideration, as
noted above) for $85.00. Assuming that the Class A Common Stock had a per
share value of $17.00 at such time, the holder of each valid Right would be
entitled to purchase 10 shares of Class A Common Stock for $85.00.
In the event that, on or at any time after a Stock Acquisition Date,
the Company (i) engages in a merger or other business combination
transaction in which the Company is not the surviving corporation (other
than with an entity which acquired the shares pursuant to a Qualified
Offer), (ii) the Company engages in a merger or other business combination
transaction in which the Company is the surviving corporation and any
shares of the Company's Common Stock are changed into or exchanged for
other securities or assets or (iii) 50% or more of the assets, cash flow or
earning power of the Company and its subsidiaries (taken as a whole) are
sold or transferred so that each holder of a Right (except as noted below)
shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of
common stock of the acquiring Company which at the time of such transaction
would have a market value (determined as provided in the Rights Agreement)
of two times the exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time until the tenth business day after a Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right, (payable in cash, Class A Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately
upon the action of the Board of Directors of the Company electing to redeem
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price.
At any time after a person becomes an Acquiring Person and prior to
the acquisition by such person or group of fifty percent (50%) or more of
the Voting Power as represented by the outstanding Common Stock, the Board
may exchange the Rights (other than Rights owned by such person or group
which have become void), in whole or in part, for Class A Common Stock at
an exchange ratio of one share of Class A Common Stock, or one
one-hundredth of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Class A Common Stock (or other
consideration) of the Company or for common stock of the acquiring company
or in the event of the redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or
lengthen any time period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as the Rights are
not redeemable.
BUSINESS COMBINATION STATUTE
As a corporation organized under the laws of the State of Delaware,
the Company will be subject to (S) 203 of the Delaware General Corporation
Law ( the "DGCL"), which restricts certain business combinations between
the Company and an "interested stockholder" (in general, a stockholder
owning 15% or more of the Company's outstanding voting stock) or its
affiliates or associates for a period of three years following the time
that the stockholder becomes an "interested stockholder." The restrictions
do not apply if
o prior to an interested stockholder becoming such, the Board
of Directors approved either the business combination or the
transaction that resulted in the stockholder becoming an
interested stockholder;
o upon consummation of the transaction that resulted in any
person becoming an interested stockholder, such interested
stockholder owns at least 85% of the voting stock of the
Company outstanding at the time the transaction commenced
(excluding shares owned by certain employee stock ownership
plans and persons who are both directors and officers of the
Company); or
o at or subsequent to the time an interested stockholder
becomes such, the business combination is both approved by
the Board of Directors and authorized at an annual or special
meeting of the Company's stockholders, not by written
consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock not owned by the interested
stockholder.
Under certain circumstances, (S) 203 of the DGCL makes it more
difficult for a person who would be an "interested stockholder" to effect
various business combinations with a corporation for a three-year period,
although the stockholders may elect to exclude a corporation from the
restrictions imposed under (S) 203. The Certificate of Incorporation of the
Company does not exclude the Company from the restrictions imposed under
(S) 203 of the DGCL. It is anticipated that the provisions of (S) 203 of
the DGCL may encourage companies interested in acquiring the Company to
negotiate in advance with the Board of Directors, since the stockholder
approval requirement would be avoided if a majority of the directors then
in office approves, prior to the date on which a stockholder becomes an
interested stockholder, either the business combination or the transaction
that results in the stockholder becoming an interested stockholder.
CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS
Certain of the provisions of the Certificate of Incorporation and
Bylaws discussed below may have the effect, either alone or in combination
with the provisions of (S) 203 discussed above, of making more difficult or
discouraging a tender offer, proxy contest, or other takeover attempt that
is opposed by the Board of Directors but that a stockholder might consider
to be in such stockholder's best interest. Those provisions include
o the classification of the Company's Board of Directors;
o restrictions on the rights of stockholders to remove or elect
directors; and
o prohibitions against stockholders calling a special meeting
of stockholders or acting by unanimous written consent in
lieu of a meeting.
CLASSIFIED BOARD; NUMBER OF DIRECTORS; REMOVAL; FILLING VACANCIES
The Certificate of Incorporation and Bylaws of the Company provide
that the Board of Directors--except for directors who may be elected by the
holders of Preferred Stock--will be divided into three classes of
directors, initially with four directors in two of the classes and two
directors in the third class. One class is to be originally elected for a
term expiring at the annual meeting of stockholders to be held in 1999,
another class is to be originally elected for a term expiring at the annual
meeting of stockholders to be held in 2000, and another class is to be
originally elected for a term expiring at the annual meeting of
stockholders to be held in 2001. Each director is to hold office until his
or her successor is duly elected and qualified. Commencing with the 1999
annual meeting of stockholders, directors elected to succeed directors
whose terms then expire will be elected for a term of office to expire at
the third succeeding annual meeting of stockholders after their election,
with each director to hold office until such person's successor is duly
elected and qualified.
The Certificate of Incorporation provides that, subject to any rights
of holders of Preferred Stock to elect directors under specified
circumstances, the number of directors will be fixed from time to time
exclusively pursuant to a resolution adopted by directors constituting a
majority of the total number of directors that the Company would have if
there were no vacancies on the Board of Directors (the "Whole Board"), with
the Whole Board consisting of not more than 15 nor less than seven
directors. The Certificate of Incorporation also provides that, subject to
any rights of holders of Preferred Stock or any other series or class of
stock, and unless the Board of Directors otherwise determines, any
vacancies will be filled only by the affirmative vote of a majority of the
remaining directors, even if less than a quorum. Accordingly, absent an
amendment to the Certificate of Incorporation, the Board of Directors could
prevent any stockholder from enlarging the Board of Directors and filling
the new directorships with such stockholder's own nominees.
The Certificate of Incorporation and Bylaws of the Company provide
that, subject to the rights of holders of Preferred Stock to elect
directors under specified circumstances, directors may be removed only for
cause and only upon the affirmative vote of holders of at least 80% of the
voting power of all the then outstanding shares of stock entitled to vote
generally in the election of directors ("Voting Stock"), voting together as
a single class.
The classification of directors will have the effect of making it more
difficult for stockholders to change the composition of the Board of
Directors. At least two annual meetings of stockholders, instead of one,
will generally be required to effect a change in a majority of the Board of
Directors. Such a delay may help ensure that the Company's directors, if
confronted by a holder attempting to force a proxy contest, a tender or
exchange offer, or an extraordinary corporate transaction, would have
sufficient time to review the proposal as well as any available
alternatives to the proposal and to act in what they believe to be the best
interest of the stockholders. The classification provisions will apply to
every election of directors, however, regardless of whether a change in the
composition of the Board of Directors would be beneficial to the Company
and its stockholders and whether or not a majority of the Company's
stockholders believe that such a change would be desirable. The
classification provisions could also have the effect of discouraging a
third party from initiating a proxy contest, making a tender offer or
otherwise attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its stockholders. The
classification of the Board of Directors could thus increase the likelihood
that incumbent directors will retain their positions. In addition, because
the classification provisions may discourage accumulations of large blocks
of the Company's stock by purchasers whose objective is to take control of
the Company and remove a majority of the Board of Directors, the
classification of the Board of Directors could tend to reduce the
likelihood of fluctuations in the market price of the common stock that
might result from accumulations of large blocks. Accordingly, stockholders
could be deprived of certain opportunities to sell their shares of common
stock at a higher market price than might otherwise be the case.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS
The Certificate of Incorporation and Bylaws provide that, and subject
to the rights of any holders of Preferred Stock to elect additional
directors under specified circumstances, stockholder action can be taken
only at an annual or special meeting of stockholders and stockholder action
may not be taken by written consent in lieu of a meeting. The Bylaws
provide that, subject to the rights of holders of any series of Preferred
Stock to elect additional directors under specified circumstances, special
meetings of stockholders can be called only by the Board of Directors
pursuant to a resolution adopted by a majority of the Whole Board or the
Chairman of the Board. Moreover, the business permitted to be conducted at
any special meeting of stockholders is limited to the business brought
before the meeting pursuant to the notice of meeting given by the Company.
The provisions of the Certificate of Incorporation and Bylaws of the
Company prohibiting stockholder action by written consent and permitting
special meetings to be called only by the Chairman or at the request of a
majority of the Whole Board may have the effect of delaying consideration
of a stockholder proposal until the next annual meeting. The provisions
would also prevent the holders of a majority of the voting power of the
Voting Stock from unilaterally using the written consent procedure to take
stockholder action. Moreover, a stockholder could not force stockholder
consideration of a proposal over the opposition of the Chairman or a
majority of the Whole Board by calling a special meeting of stockholders
prior to the time such parties believe such consideration to be
appropriate.
LIABILITY OF DIRECTORS; INDEMNIFICATION
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
o for any breach of the director's duty of loyalty to the
Company or its stockholders;
o for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
o for paying a dividend or approving a stock repurchase in
violation of (S) 174 of the DGCL; or
o 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 Certificate of Incorporation provides 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 Certificate of Incorporation provides 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 reasonably believed to be in, or not opposed to, the best
interests of the Company.
LISTING
The Class A Common Stock is listed on the NYSE under the trading
symbol "WDR." The Class B Common Stock is listed on the NYSE under the
trading symbol "WDR.B."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is EquiServe.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
WADDELL & REED Capital Trust I may issue only one series of Trust
Preferred Securities and such series will have the terms described in the
applicable prospectus supplement. The Declaration of WADDELL & REED Capital
Trust I authorizes the Regular Trustees of WADDELL & REED Capital Trust I
to issue on behalf of WADDELL & REED Capital Trust I one series of Trust
Preferred Securities. The Declaration will be qualified as an indenture
under the Trust Indenture Act. The Trust Preferred Securities will have
terms, including with respect to distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special
rights or such restrictions as described in the Declaration or made part of
the Declaration by the Trust Indenture Act and which will mirror the terms
of the Corresponding Junior Subordinated Debt Securities held by WADDELL &
REED Capital Trust I and described in the applicable prospectus supplement.
You must review the prospectus supplement relating to the Trust
Preferred Securities of WADDELL & REED Capital Trust I for specific terms,
including:
o the distinctive designation of the Trust Preferred
Securities;
o the number and the initial public offering price of Trust
Preferred Securities issued by WADDELL & REED Capital Trust
I;
o the annual distribution rate (or method of determining such
rate) for the Trust Preferred Securities, the date or dates
upon which the distributions will be payable and the date or
dates from which distributions will accrue;
o whether distributions on the Trust Preferred Securities will
be cumulative, and, in the case of Trust Preferred Securities
having cumulative distribution rights, the date or dates or
method of determining the date or dates from which the
distributions on the Trust Preferred Securities will be
cumulative;
o the amount or amounts which will be paid out of the assets of
WADDELL & REED Capital Trust I to the holders of Trust
Preferred Securities of WADDELL & REED Capital Trust I upon
voluntary or involuntary dissolution, winding-up or
termination of WADDELL & REED Capital Trust I;
o the obligation, if any, of WADDELL & REED Capital Trust I to
purchase or redeem Trust Preferred Securities issued by
WADDELL & REED Capital Trust I and the price or prices at
which, the period or periods within which, and the terms and
conditions upon which, the Trust Preferred Securities will be
purchased or redeemed, in whole or in part, pursuant to such
obligation;
o the voting rights, if any, of the Trust Preferred Securities
in addition to those required by law, including the number of
votes per Trust Preferred Security and any requirement for
the approval by the holders of Trust Preferred Securities as
a condition to specified action or amendments to the
Declaration of WADDELL & REED Capital Trust I;
o the terms and conditions, if any, upon which the
Corresponding Junior Subordinated Debt Securities may be
distributed to holders of Trust Preferred Securities;
o the right and/or obligation, if any, of the Company to redeem
or purchase the Trust Preferred Securities pursuant to any
sinking fund or similar provisions or at the option of the
holder of the Trust Preferred Securities and the period or
periods for which, the price or prices at which, and the
terms and conditions upon which, the Trust Preferred
Securities will be redeemed or repurchased, in whole or in
part, pursuant to such right and/or obligation;
o the terms and conditions, if any, upon which the Trust
Preferred Securities may be converted into shares of the
common stock of the Company, including the conversion price
and the circumstances, if any, under which the conversion
right will expire;
o if applicable, any securities exchange upon which the Trust
Preferred Securities will be listed; and
o any other relevant rights, preferences, privileges,
limitations or restrictions of Trust Preferred Securities
issued by WADDELL & REED Capital Trust I not inconsistent
with the Declaration of WADDELL & REED Capital Trust I or
with applicable law.
All Trust Preferred Securities will be guaranteed by the Company to
the extent described below under "Description of the Preferred Securities
Guarantees."
Certain United States federal income tax considerations applicable to
any offering of Trust Preferred Securities will be described in the
applicable prospectus supplement.
In connection with the issuance of Trust Preferred Securities, WADDELL
& REED Capital Trust I will issue one series of Common Securities. The
Declaration of WADDELL & REED Capital Trust I authorizes the Regular
Trustees of the trust to issue on behalf of WADDELL & REED Capital Trust I
one series of Common Securities. The Common Securities will have the terms
relating to distributions, redemption, voting, liquidation rights or such
restrictions as are described in the Declaration. Except for voting rights,
the terms of the Common Securities issued by WADDELL & REED Capital Trust I
will be substantially identical to the terms of the Trust Preferred
Securities issued by the trust. The Common Securities will rank on a
parity, and payments will be made on the Common Securities pro rata, with
the Trust Preferred Securities except that, upon an Event of Default under
the Declaration, the rights of the holders of the Common Securities to
payment for distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace
any of the WADDELL & REED Capital Trustees of WADDELL & REED Capital Trust
I. All of the Common Securities of WADDELL & REED Capital Trust I will be
directly or indirectly owned by the Company.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an Event of Default under the Declaration of WADDELL & REED Capital
Trust I occurs and is continuing, then the holders of Trust Preferred
Securities of WADDELL & REED Capital Trust I will rely on the enforcement
by the Institutional Trustee of its rights as a holder of the applicable
series of Junior Subordinated Debt Securities against the Company. In
addition, the holders of a majority in liquidation amount of the Trust
Preferred Securities of WADDELL & REED Capital Trust I will have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Institutional Trustee or to direct the exercise of
any trust or power conferred upon the Institutional Trustee under the
applicable Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a holder of the Junior
Subordinated Debt Securities.
If the Institutional Trustee fails to enforce its rights under the
applicable series of Junior Subordinated Debt Securities, a holder of Trust
Preferred Securities of WADDELL & REED Capital Trust I may institute a
legal proceeding directly against the Company to enforce the Institutional
Trustee's rights without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. However, if an Event
of Default under the applicable Declaration has occurred and is continuing
and such event is attributable to the failure of the Company to pay
interest or principal on the applicable series of Junior Subordinated Debt
Securities on the date such interest or principal is otherwise payable (or
in the case of redemption, on the redemption date), then a holder of Trust
Preferred Securities of WADDELL & REED Capital Trust I may directly
institute a proceeding for enforcement of payment to the holder of the
principal of or interest on the applicable series of Junior Subordinated
Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder (a
"Direct Action") on or after the respective due date. In connection with a
Direct Action, the Company will be subrogated to the rights of such holder
of Trust Preferred Securities under the applicable Declaration to the
extent of any payment made by the Company to a holder of Trust Preferred
Securities in a Direct Action. This means that the Company will be entitled
to payment of amounts that a holder of Trust Preferred Securities receives
in respect of an unpaid distribution that resulted in the bringing of the
Direct Action to the extent that such holder receives or has already
received full payment relating to such unpaid distribution from WADDELL &
REED Capital Trust I.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
For information concerning the relationship between the Institutional
Trustee and the Company, see "Description of Junior Subordinated Debt
Securities--Regarding the Trustee" and "Description of Senior Debt
Securities--Regarding the Trustee" in this prospectus.
INFORMATION CONCERNING THE DELAWARE TRUSTEE
For information concerning the relationship between the Delaware
Trustee, and the Company, see "Description of Senior Debt
Securities--Regarding the Trustee" in this prospectus.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
The guarantees with respect to the Trust Preferred Securities (the
"Preferred Securities Guarantees") will be executed and delivered by the
Company for the benefit of the holders from time to time of Trust Preferred
Securities. Each Preferred Securities Guarantee will be qualified as an
indenture under the Trust Indenture Act. An institutional trustee will act
as indenture trustee under each Preferred Securities Guarantee for purposes
of the Trust Indenture Act (the "Preferred Guarantee Trustee"). The terms
of each Preferred Securities Guarantee will be those in such Preferred
Securities Guarantee and those made part of such Preferred Securities
Guarantee by the Trust Indenture Act. The summary of the terms and
provisions of the Preferred Securities Guarantees in this section does not
claim to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the form of Preferred
Securities Guarantee, which is filed as an exhibit to the registration
statement of which this prospectus forms a part, and the Trust Indenture
Act. Each Preferred Securities Guarantee will be held by the Preferred
Guarantee Trustee for the benefit of the holders of the Trust Preferred
Securities of WADDELL & REED Capital Trust I.
GENERAL
Under each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth in the
guarantee, to pay in full, to the holders of the Trust Preferred Securities
issued by WADDELL & REED Capital Trust I, the Guarantee Payments (as
defined below), except to the extent paid by WADDELL & REED Capital Trust
I, as and when due, regardless of any defense, right of set-off or
counterclaim which WADDELL & REED Capital Trust I may have or claim to
have.
The following payments with respect to Trust Preferred Securities
issued by WADDELL & REED Capital Trust I, to the extent not paid by WADDELL
& REED Capital Trust I (the "Guarantee Payments"), will be subject to the
applicable Preferred Securities Guarantee (without duplication):
o any accrued and unpaid distributions which are required to be
paid on the Trust Preferred Securities, to the extent WADDELL
& REED Capital Trust I has funds available for such payments;
o the redemption price, including all accrued and unpaid
distributions to the date of payment (the "Redemption
Price"), to the extent WADDELL & REED Capital Trust I has
funds available for such payments with respect to any Trust
Preferred Securities called for redemption by WADDELL & REED
Capital Trust I; and
o upon a voluntary or involuntary dissolution, winding-up or
termination of WADDELL & REED Capital Trust I, other than in
connection with the distribution of Corresponding Junior
Subordinated Debt Securities to the holders of Trust Preferred
Securities or the redemption of all of the Trust Preferred
Securities, the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions
on the Trust Preferred Securities to the date of payment to
the extent WADDELL & REED Capital Trust I has funds available
for the payment and (b) the amount of assets of WADDELL &
REED Capital Trust I remaining available for distribution to
holders of the Trust Preferred Securities in liquidation of
WADDELL & REED Capital Trust I.
The redemption price and liquidation amount will be fixed at the time the
Trust Preferred Securities are issued.
The Company's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Company to the holders of
Trust Preferred Securities or by causing WADDELL & REED Capital Trust I to
pay such amounts to the holders.
Each Preferred Securities Guarantee will not apply to any payment of
distributions except to the extent WADDELL & REED Capital Trust I has funds
available for the payments. If the Company does not make interest payments
on the Junior Subordinated Debt Securities purchased by WADDELL & REED
Capital Trust I, WADDELL & REED Capital Trust I will not pay distributions
on the Trust Preferred Securities issued by WADDELL & REED Capital Trust I
and will not have funds available for such a payment. See "Description of
Junior Subordinated Debt Securities--Certain Covenants of the Company." The
Preferred Securities Guarantee, when taken together with the Company's
obligations under the Junior Subordinated Debt Securities, the Junior
Indenture and the Declaration, including its obligations to pay costs,
expenses, debts and liabilities of WADDELL & REED Capital Trust I, other
than with respect to the Trust Securities, will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments
due on the Trust Preferred Securities.
The Company has also agreed separately to irrevocably and
unconditionally guarantee the obligations of WADDELL & REED Capital Trust I
with respect to the Common Securities (the "Common Securities Guarantees")
to the same extent as the Preferred Securities Guarantees, except that upon
an Event of Default under the Junior Indenture, holders of Trust Preferred
Securities will have priority over holders of Common Securities with
respect to distributions and payments on liquidation, redemption or
otherwise.
MODIFICATION OF THE PREFERRED SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the
rights of holders of Trust Preferred Securities (in which case no vote will
be required), each Preferred Securities Guarantee may be amended only with
the prior approval of the holders of not less than a majority in
liquidation amount of the outstanding Trust Preferred Securities issued by
WADDELL & REED Capital Trust I. The manner of obtaining the approval of
holders of the Trust Preferred Securities will be described in the
applicable prospectus supplement. All guarantees and agreements contained
in a Preferred Securities Guarantee will bind the successors, assigns,
receivers, trustees and representatives of the Company and will benefit the
holders of the outstanding Trust Preferred Securities of WADDELL & REED
Capital Trust I.
TERMINATION
Each Preferred Securities Guarantee will terminate as to the Trust
Preferred Securities issued by WADDELL & REED Capital Trust I:
o upon full payment of the Redemption Price of all Trust
Preferred Securities of WADDELL & REED Capital Trust I;
o upon distribution of the Corresponding Junior Subordinated
Debt Securities held by WADDELL & REED Capital Trust I to the
holders of the Trust Preferred Securities of that WADDELL &
REED Capital Trust I; or
o upon full payment of the amounts payable under the
Declaration of WADDELL & REED Capital Trust I upon
liquidation of WADDELL & REED Capital Trust I.
Each Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Trust
Preferred Securities issued by WADDELL & REED Capital Trust I must restore
payment of any sums paid under the Trust Preferred Securities or the
Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur
upon the failure of the Company to perform any of its payment or other
obligations under the guarantee.
The holders of a majority in liquidation amount of the Trust Preferred
Securities relating to a Preferred Securities Guarantee have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Preferred Guarantee Trustee in respect of the
Preferred Securities Guarantee or to direct the exercise of any trust or
power conferred upon the Preferred Guarantee Trustee under such Trust
Preferred Securities. If the Preferred Guarantee Trustee fails to enforce
the Preferred Securities Guarantee, any holder of Trust Preferred
Securities relating to the Preferred Securities Guarantee may institute a
legal proceeding directly against the Company to enforce the Preferred
Guarantee Trustee's rights under the Preferred Securities Guarantee,
without first instituting a legal proceeding against WADDELL & REED Capital
Trust I, the Preferred Guarantee Trustee or any other person or entity.
However, if the Company has failed to make a Guarantee Payment, a holder of
Trust Preferred Securities may directly institute a proceeding against the
Company for enforcement of the Preferred Securities Guarantee for the
payment. The Company waives any right or remedy to require that any action
be brought first against WADDELL & REED Capital Trust I or any other person
or entity before proceeding directly against the Company.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
Unless otherwise provided in the applicable prospectus supplement, the
Preferred Securities Guarantees with respect to the Trust Preferred
Securities of WADDELL & REED Capital Trust I will constitute unsecured
obligations of the Company and will rank (i) subordinate and junior in
right of payment to certain other liabilities of the Company, as described
in the prospectus supplement and (ii) on a parity with any guarantee now or
hereafter entered into by the Company in respect of WADDELL & REED Capital
Trust I or any other similar financing vehicle sponsored by the Company.
The terms of the Trust Preferred Securities provide that each holder
of Trust Preferred Securities issued by WADDELL & REED Capital Trust I by
acceptance of the Trust Preferred Securities agrees to the subordination
provisions and other terms of the Preferred Securities Guarantee as
described in the applicable prospectus supplement.
The Preferred Securities Guarantees will constitute a guarantee of
payment and not of collection, meaning that the guaranteed party may
institute a legal proceeding directly against the guarantor to enforce its
rights under the Preferred Securities Guarantee without instituting a legal
proceeding against any other person or entity.
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
Prior to the occurrence of a default with respect to a Preferred
Securities Guarantee, the Preferred Guarantee Trustee will undertake to
perform only the duties that are specifically described in the Preferred
Securities Guarantee and, after default, will exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her
own affairs. Subject to such provisions, the Preferred Guarantee Trustee
will be under no obligation to exercise any of the powers given it by a
Preferred Securities Guarantee at the request of any holder of Trust
Preferred Securities, unless the Preferred Guarantee Trustee is offered
reasonable indemnity against the costs, expenses and liabilities which it
might incur in exercising the powers.
For information concerning the relationship between the Preferred
Guarantee Trustee and the Company, see "Description of Junior Subordinated
Debt Securities--Regarding Trustee" and "Description of Senior Debt
Securities--Regarding the Trustee" in this prospectus.
GOVERNING LAW
The Preferred Securities Guarantees will be governed by and construed
in accordance with the laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES
AND THE PREFERRED SECURITIES GUARANTEE
The sole purpose of WADDELL & REED Capital Trust I is to issue the
Trust Securities evidencing undivided beneficial ownership interests in the
assets of WADDELL & REED Capital Trust I, and to invest the proceeds from
the issuance and sale in the Corresponding Junior Subordinated Debt
Securities.
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debt Securities, the payments will be sufficient
to cover distributions and payments due on the Trust Securities because of
the following factors:
o the aggregate principal amount of Junior Subordinated Debt
Securities will be equal to the sum of the aggregate stated
liquidation amount of the Trust Securities;
o the interest rate and the interest and other payment dates on
the Junior Subordinated Debt Securities will match the
distribution rate and distribution and other payment dates
for the Trust Preferred Securities;
o the Company will pay, and WADDELL & REED Capital Trust I will
not be obligated to pay, directly or indirectly, all costs,
expenses, debt, and obligations of WADDELL & REED Capital
Trust I, other than with respect to the Trust Securities; and
o the Declaration provides that WADDELL & REED Capital Trust I
Trustees will not take or cause or permit WADDELL & REED
Capital Trust I to, among other things, engage in any
activity that is not consistent with the purposes of WADDELL
& REED Capital Trust I.
Payments of distributions, to the extent funds are available, and
other payments due on the Trust Preferred Securities, to the extent funds
are available, are guaranteed by the Company as and to the extent described
under "Description of the Preferred Securities Guarantees". If the Company
does not make interest payments on the Corresponding Junior Subordinated
Debt Securities purchased by WADDELL & REED Capital Trust I, it is expected
that WADDELL & REED Capital Trust I will not have sufficient funds to pay
distributions on the Trust Preferred Securities. The Preferred Securities
Guarantee does not apply to any payment of distributions unless and until
WADDELL & REED Capital Trust I has sufficient funds for the payment of such
distributions.
The Preferred Securities Guarantee covers the payment of distributions
and other payments on the Trust Preferred Securities only if and to the
extent that the Company has made a payment of interest or principal on the
Junior Subordinated Debt Securities held by WADDELL & REED Capital Trust I
as its sole asset. The Preferred Securities Guarantee, when taken together
with the Company's obligations under the Junior Subordinated Debt
Securities and the Junior Indenture and its obligations under the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of WADDELL & REED Capital Trust I (other than with respect to
the Trust Securities), provide a full and unconditional guarantee on a
subordinated basis of amounts due on the Trust Preferred Securities.
If the Company fails to make interest or other payments on the Junior
Subordinated Debt Securities when due, taking account of any extension
period, the Declaration provides a mechanism whereby the holders of the
Trust Preferred Securities may direct the Institutional Trustee to enforce
its rights under the Junior Subordinated Debt Securities. If the
Institutional Trustee fails to enforce its rights under the Junior
Subordinated Debt Securities, a holder of Preferred Securities may
institute a legal proceeding against the Company to enforce the
Institutional Trustee's rights under the Junior Subordinated Debt
Securities without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. However, if an Event
of Default under the Declaration has occurred and is continuing and such
event is due to the failure of the Company to pay interest or principal on
the Junior Subordinated Debt Securities on the date such interest or
principal is otherwise payable (or in the case of redemption on the
redemption date), then a holder of Trust Preferred Securities may institute
a Direct Action for payment on or after the respective due date.
In connection with a Direct Action, the Company will be subrogated to
the rights of such holder of Trust Preferred Securities under the
Declaration to the extent of any payment made by the Company to such holder
of Trust Preferred Securities in a Direct Action. The Company, under the
Preferred Securities Guarantee, acknowledges that the Guarantee Trustee
will enforce the Preferred Securities Guarantee on behalf of the holders of
the Trust Preferred Securities. If the Company fails to make payments under
the Preferred Securities Guarantee, the Preferred Securities Guarantee
provides a mechanism whereby the holders of the Trust Preferred Securities
may direct the Guarantee Trustee to enforce its rights under the guarantee.
Any holder of Trust Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Preferred Guarantee Trustee's
rights under the Preferred Securities Guarantee without first instituting a
legal proceeding against WADDELL & REED Capital Trust I, the Guarantee
Trustee, or any other person or entity.
The Company and WADDELL & REED Capital Trust I believe that the
mechanisms and obligations described above, taken together, provide a full
and unconditional guarantee by the Company on a subordinated basis of
payments due on the Trust Preferred Securities. See "Description of the
Preferred Securities Guarantees--General."
PLAN OF DISTRIBUTION
The securities offered under this prospectus may be sold in a public
offering to or through agents, underwriters or dealers designated from time
to time or directly to purchasers. The Company and WADDELL & REED Capital
Trust I may sell their securities as soon as practicable after
effectiveness of the registration statement of which this prospectus forms
a part. The names of any underwriters or dealers involved in the sale of
the securities in respect of which this prospectus is delivered, the amount
or number of securities to be purchased by any such underwriters and any
applicable commissions or discounts will be described in the applicable
prospectus supplement.
Underwriters may offer and sell securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of the securities,
underwriters may be deemed to have received compensation from the Company
and/or WADDELL & REED Capital Trust I in the form of underwriting discounts
or commissions and may also receive commissions. Underwriters may sell
securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters.
Any underwriters may engage in stabilizing transactions and syndicate
covering transactions in accordance with Rule 104 under the Exchange Act.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the securities in the open
market after the distribution has been completed in order to cover
syndicate short positions. Such stabilizing transactions and syndicate
covering transactions may cause the price of the securities to be higher
than it would otherwise be in the absence of such transactions.
Any underwriting compensation paid by the Company and/or WADDELL &
REED Capital Trust I to underwriters in connection with the offering of
securities, and any discounts, concessions or commissions allowed by such
underwriters to participating dealers, will be described in an accompanying
prospectus supplement. Underwriters and dealers participating in the
distribution of securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them
on resale of such securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters and dealers may be
entitled under agreements with the Company and WADDELL & REED Capital Trust
I, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
In connection with the offering of the securities of the Company or
WADDELL & REED Capital Trust I, the Company or WADDELL & REED Capital Trust
I may grant to the underwriters an option to purchase additional securities
to cover over-allotments, if any, at the initial public offering price
(with an additional underwriting commission), as may be described in the
accompanying prospectus supplement. If the Company or WADDELL & REED
Capital Trust I grants any over-allotment option, the terms of such
over-allotment option will be described in the prospectus supplement for
such securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Company and/or WADDELL & REED Capital Trust I and/or any
of their affiliates in the ordinary course of business. Certain of the
underwriters and their associates may be customers of, including borrowers
from, engage in transactions with, and perform services for, the Company,
the Banks and other subsidiaries of the Company in the ordinary course of
business.
Securities will be new issues of securities and will have no
established trading market. Any underwriters to whom such securities are
sold for public offering and sale may make a market in such securities, but
such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. Such securities may or may not be
listed on a national securities exchange or the Nasdaq National Market. No
assurance can be given as to the liquidity of or the existence of trading
markets for any securities.
One or more direct or indirect subsidiaries of the Company may from
time to time act as an agent or underwriter in connection with the sale of
the securities to the extent permitted by law. The participation of any
such subsidiary will comply with Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD"). The offer
and sale of the securities will comply with Rule 2810 of the Rules of
Conduct of the NASD. In addition, no NASD member participating in offers
and sales of securities will execute a transaction in the securities in a
discretionary account without the prior specific written approval of the
member's customer.
This prospectus and the related prospectus supplement may be used by
direct or indirect subsidiaries of the Company in connection with offers
and sales related to secondary market transactions. Such subsidiaries may
act as principal or agent in such transactions. Such sales may be made at
prices related to prevailing market prices at the time of sale.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement,
certain matters of Delaware law relating to the validity of the Trust
Preferred Securities will be passed upon on behalf of WADDELL & REED
Capital Trust I by Skadden, Arps, Slate, Meagher & Flom LLP, special
Delaware counsel to the Company and WADDELL & REED Capital Trust I. Unless
otherwise indicated in the applicable prospectus supplement, the validity
of the Senior Debt Securities, the Junior Subordinated Debt Securities and
the Preferred Securities Guarantee and certain matters relating thereto
will be passed upon for the Company by Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel to the Company. Unless otherwise indicated in the
applicable prospectus supplement, certain United States federal income
taxation matters will be passed upon for the Company and WADDELL & REED
Capital Trust I by Skadden, Arps, Slate, Meagher & Flom LLP, special tax
counsel to the Company and WADDELL & REED Capital Trust I.
EXPERTS
The consolidated financial statements of the Company included in the
Annual Report on Form 10-K for the year ended December 31, 1999,
incorporated herein by reference have been audited by KPMG LLP, independent
public accountants, as indicated in their report with respect thereto, and
are incorporated herein by reference in reliance upon the authority of said
firm as experts in accounting and auditing in giving said report.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Filing Fee................................... $105,600.00
Rating Agency Fees............................... *
Legal Fees and Expenses.......................... *
Trustees' Fees and Expenses...................... *
Printing and Engraving Expenses.................. *
Accounting Fees and Expenses..................... *
Miscellaneous Expenses........................... *
Total
----------------------------------------------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
WADDELL & REED FINANCIAL, INC. ("WADDELL & REED") is a Delaware
corporation. Section 145 of the General Corporation Law of the State of
Delaware contains detailed provisions on indemnification of directors and
officers of a Delaware corporation against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection
with certain litigation.
WADDELL & REED's Amended and Restated Certificate of Incorporation
(the "Certificate"), provides for indemnification of directors and
officers. WADDELL & REED's Certificate provides that WADDELL & REED will
indemnify each director, officer, employee or agent of WADDELL & REED or
any individual serving in such a capacity with another business entity at
WADDELL & REED's request (an "Indemnitee") to the full extent permitted by
the General Corporation Law of the State of Delaware ("Delaware Law") or
any other applicable laws as presently or hereinafter in effect against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such Indemnitee in
connection therewith. WADDELL & REED's Certificate also authorizes WADDELL
& REED to enter into agreements with any person providing for
indemnification greater or different than that provided therein. WADDELL &
REED's Certificate provides that expenses incurred by a director, officer
or employee in defending an action, suit or proceeding shall be paid by
WADDELL & REED in advance of the final disposition of such action upon
receipt of an undertaking by or on behalf of such person that he will repay
such amount if it is ultimately determined that he is not entitled to be
indemnified by WADDELL & REED. WADDELL & REED's Certificate and Delaware
Law also provide that the indemnification provisions of WADDELL & REED's
Certificate and the statute are not exclusive of any other right to which a
person seeking indemnification and advancement of expenses may be entitled
under any statute, by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
The directors and officers of WADDELL & REED are covered by an
insurance policy indemnifying them against certain civil liabilities,
including liabilities under the federal securities laws, which might be
incurred by them in such capacity.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling WADDELL & REED pursuant to the foregoing provisions, WADDELL &
REED has been informed 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.
The Declaration of Trust of WADDELL & REED Capital Trust I limits the
liability to the trust and certain persons, and provides for the
indemnification by the trust or WADDELL & REED, of trustees, their
officers, directors and employees and certain other persons.
ITEM 16. EXHIBITS
EXHIBIT
NO. DESCRIPTION
------------------------------------------------------------------------------
1.1 Form of Debt Securities Underwriting Agreement.*
1.2 Form of Warrant Underwriting Agreement.*
1.3 Form of Common Stock Underwriting Agreement.*
1.4 Form of Trust Preferred Securities Underwriting Agreement.*
3.1 Amended and Restated Certificate of Incorporation, of
WADDELL & REED FINANCIAL, INC. (incorporated by reference to
Exhibit 3.1 to WADDELL & REED FINANCIAL, INC.'s Form S-1
Registration Statement Number 333-43687 (the "Registration
Statement")).
3.2 Amended and Restated By-laws of WADDELL & REED FINANCIAL, INC.
(incorporated by reference to Exhibit 3.2 to the Registration
Statement).
4.1 Form of Senior Indenture relating to senior securities.**
4.2 Form of Senior Note (set forth as part of Exhibit 4.1).**
4.3 Form of Warrant Agreement.*
4.4 Certificate of Trust of WADDELL & REED Capital Trust I.**
4.5 Declaration of Trust of WADDELL & REED Capital Trust I.**
4.6 Form of Amended and Restated Declaration of Trust to be used
in connection with the issuance of the Trust Preferred
Securities.*
4.7 Form of Junior Indenture to be used in connection with the
issuance of the Junior Subordinated Debt Securities.**
4.8 Form of Trust Preferred Security (included in Exhibit 4.6).*
4.9 Form of Junior Subordinated Debt Security (included in Exhibit
4.7).**
4.10 Form of Guarantee with respect to Trust Preferred Securities.*
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, as to
the legality of the securities to be issued by WADDELL &
REED FINANCIAL, INC.*
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the Trust Preferred Securities to be issued
by WADDELL & REED Capital Trust I.*
8 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
certain federal tax matters.*
12 Computation of Ratio of Earnings to Fixed Charges.**
23.1 Consent of KPMG LLP.**
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).*
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.2).*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 8).*
24 Power of Attorney (included on signature page).**
25.1 Form T-1 of Chase Manhattan Bank, National Association, as
Trustee under the Senior Indenture.
25.2 Form T-1 of Chase Manhattan Bank, National Association, as
Trustee under the Junior Indenture.*
25.3 Form T-1 of Chase Manhattan Bank, National Association, as
Trustee under the Amended and Restated Declaration of Trust.*
---------------------
* To be filed by amendment or incorporated herein by reference.
** Previously filed.
ITEM 17. UNDERTAKINGS
Each of the undersigned Registrants 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 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and (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 (1) (i)
and (1) (II) do not apply if the information required to be included in a
post-effective amendment by those items is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference to this
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.
(4) 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 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 that
time shall be deemed to be the initial bona fide offering thereof.
(5) 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 provisions described
under Item 15 above 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
against the Registrant 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.
(6) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b) (2) of the Trust
Indenture Act.
(7) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(8) That for purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus 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.
SIGNATURES
Pursuant to the requirements of the securities act, the registrant
has duly caused this Post-effective Amendment No. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Overland Park, State of Kansas, on January 8,
2001.
WADDELL & REED FINANCIAL, INC.
By: /s/ John E. Sundeen, Jr.
-------------------------------
John E. Sundeen, Jr.
Senior Vice President, Chief
Financial Officer and Treasurer
Pursuant to the requirements of the securities act, this Amendment
No. 2 to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board, January 8, 2001
--------------------------- Chief Executive Officer
Keith A. Tucker and Director (Principal
Executive Officer)
* President, Chief Investment January 8, 2001
--------------------------- Officer and Director
Henry J. Herrman
* Chief Operating Officer, January 8, 2001
--------------------------- Executive Vice President
Robert L. Hechler and Director
/s/ John E. Sundeen, Jr. Senior Vice President, January 8, 2001
--------------------------- Chief Financial Officer
John E. Sundeen, Jr. and Treasurer (Principal
Financial Officer)
* Vice President and January 8, 2001
--------------------------- Controller (Principal
D. Tyler Towery Accounting Officer)
* Director January 8, 2001
---------------------------
Joseph L. Lanier, Jr.
* Director January 8, 2001
---------------------------
William L. Rogers
* Director January 8, 2001
---------------------------
James M. Raines
* Director January 8, 2001
---------------------------
George J. Records, Sr.
* Director January 8, 2001
---------------------------
David L. Boren
* Director January 8, 2001
---------------------------
Joseph M. Farley
* Director January 8, 2001
---------------------------
Jerry W. Walton
* By:/s/John E. Sundeen, Jr.
----------------------------
Attorney-in-fact
