WADDELL & REED FINANCIAL INC
EXHIBIT 10.11
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<TYPE>EX-10.11
<SEQUENCE>6
<FILENAME>a2072953zex-10_11.txt
<DESCRIPTION>EXHIBIT 10.11
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                                                                   Exhibit 10.11

                         WADDELL & REED FINANCIAL, INC.
                         1999 MANAGEMENT INCENTIVE PLAN
                        (EFFECTIVE AS OF JANUARY 1, 1999)

1.   PURPOSE

     The purposes of the Plan are to advance the interests of stockholders of
the Company by providing performance-based incentives to eligible Participants
and to enable the Company and its Subsidiaries to attract, retain, motivate and
reward the best qualified executive officers and key employees by providing them
with the opportunity to earn competitive compensation directly linked to the
Company's performance. The Plan is designed to assure that amounts paid to
certain executive officers of the Company will not fail to be deductible by the
Company for Federal income tax purposes because of the limitations imposed by
Section 162(m). With respect to individuals who are Covered Employees, the Plan
is intended to provide "qualified performance-based compensation," as such term
is defined in Treas. Reg. 1.162-27(e), to the extent deemed appropriate by the
Committee at the time Performance Goals are established for a Fiscal Year.
Nothing herein shall be construed as preventing the Plan from providing both
"qualified performance-based compensation" and nonqualified compensation for the
same Fiscal Year in the manner permitted under Code Section 162(m). The Plan
shall be administered and construed in a manner consistent with Code Section
162(m) and regulations thereunder for any Fiscal Year in which the Plan is
intended to provide "qualified performance-based compensation."

2.   DEFINITIONS

     Unless the context requires otherwise, the following words as used in the
Plan shall have the meanings ascribed to each below, it being understood that
masculine, feminine, and neuter pronouns are interchangeable and that each
comprehends the others.

          (a)  "Board" shall mean the Board of Directors of the Company.

          (b)  "Committee" shall mean the Compensation Committee of the Board
               (or such other committee of the Board that the Board shall
               designate from time to time) or any subcommittee thereof
               comprised of two or more directors each of whom is an "outside
               director" within the meaning of Section 162(m).

          (c)  "Company" shall mean Waddell & Reed Financial, Inc.

          (d)  "Covered Employee" shall have the meaning set forth in Section
               162(m)(3).

          (e)  "Fiscal Year" means the twelve month period beginning on each
               January 1 and ending on the following December 31.

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          (f)  "Incentive Percentage" means the pre-established award formula
               established by the Committee for each Fiscal Year which specifies
               a percentage of a Participant's rate of salary in effect for the
               last full payroll period of the Fiscal Year to be paid as an
               Incentive Plan Award. The Committee may establish different
               Incentive Percentages for individual Participants or different
               classes of Participants, and/or the achievement levels of the
               Performance Goals. Solely with respect to Covered Employees, for
               any Fiscal Year for which the Plan is intended to provide
               "qualified performance-based compensation," the Incentive
               Percentages applicable to the Covered Employees must be
               established by the Committee no later than 90 days after the
               beginning of the Fiscal Year for which the Incentive Plan Award
               pertains.

          (g)  "Incentive Plan Award" means the annual incentive compensation
               award granted under the Plan which is contingent and based upon
               the attainment of the Performance Goals with respect to a Fiscal
               Year.

          (h)  "Participant" shall mean (i) each executive officer of the
               Company and (ii) each other key employee of the Company or a
               Subsidiary who the Committee designates as a participant under
               the Plan. For each Fiscal Year, the Committee shall determine
               which of such executive officers and other key employees shall
               participate in the Plan. For any Fiscal Year for which "qualified
               performance-based compensation" is to be provided, the Committee
               shall designate the individual or classes of Covered Employees
               for such compensation no later than the 90th day of such Fiscal
               Year.

          (i)  "Performance Goals" means the pre-established objective
               performance goals established by the Committee for each Fiscal
               Year. Solely with respect to Covered Employees, for any Fiscal
               Year for which the Plan is intended to provide "qualified
               performance-based compensation," Performance Goals applicable to
               the Covered Employees must be established by the Committee no
               later than 90 days after the beginning of the Fiscal Year to
               which the Performance Goals pertain. The Performance Goals may be
               based upon the performance of the Company or any Subsidiary, or
               division thereof, using one or more of the following operating
               performance measures selected by the Committee: (a) earnings; (b)
               revenue; (c) operating or net cash flows; (d) financial return
               ratios; (e) total stockholder return; (f) market share; (g)
               pre-tax profits; (h) earnings per share; or (i) net income.
               Separate Performance Goals may be established by the Committee
               for the Company or a Subsidiary, or division thereof. With
               respect to Participants who are not Covered Employees, the
               Committee may establish such other subjective or objective goals,
               including individual Performance Goals, which it deems
               appropriate. The preceding sentence shall also apply to Covered
               Employees with respect to any Incentive Plan Award not intended
               at time of grant to be "qualified performance-based
               compensation." Performance Goals may be set at a specific level,
               or may be

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               expressed as a relative percentage to the comparable measure at
               comparison companies or a defined index.

          (j)  "Plan" shall mean the Waddell & Reed Financial, Inc. 1999
               Management Incentive Plan, as set forth herein and as may be
               amended from time to time.

          (k)  "Section 162(m)" shall mean Section 162(m) of the Internal
               Revenue Code of 1986, as amended, and any regulations promulgated
               thereunder (including any proposed regulations).

          (l)  "Subsidiary" shall mean any corporation in which the Company
               owns, directly or indirectly, stock representing more than 50% of
               the voting power of all classes of stock entitled to vote.

3.   ADMINISTRATION

     The Committee shall administer and interpret the Plan, PROVIDED THAT, in no
event, shall the Plan be interpreted in a manner which would cause any amount
payable under the Plan to any Covered Employee to fail to qualify as
performance-based compensation under Section 162(m) to the extent the Committee
intends compensation to so qualify. The Committee shall establish the
performance objectives for any calendar year in accordance with Section 4 and
certify whether such performance objectives have been obtained. Any
determination made by the Committee under the Plan shall be final and conclusive
on all parties, but shall be based on such objective information or financial
data as is relevant to the Performance Goal. Subject to the provisions of the
Plan, the Committee shall have full discretionary authority to administer and
interpret the Plan, to exercise all powers either specifically granted to it
under the Plan or as are necessary or advisable in the administration of the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan, all of which shall be binding on all persons,
including the Company, the Participants (or any person claiming any rights under
the Plan from or through any Participant), and any stockholder of the Company. A
majority of the Committee shall constitute a quorum, and the Committee shall act
pursuant to a majority vote or by unanimous written consent. The Committee may
employ such legal counsel, consultants, and agents (including counsel or agents
who are employees of the Company or a Subsidiary) as it may deem desirable for
the administration of the Plan and may rely upon any opinion received from any
such counsel or consultant or agent and any computation received from such
consultant or agent. All expenses incurred in the administration of the Plan,
including, without limitation, for the engagement of any counsel, consultant, or
agent, shall be paid by the Company. No member or former member of the Board or
the Committee shall be liable for any act, omission, interpretation,
construction, or determination made in connection with the Plan other than as a
result of such individual's willful misconduct.

     The Committee may delegate its responsibilities for administering the Plan
to one or more persons as the Committee deems necessary. However, the Committee
may not delegate its

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responsibilities under the Plan relating to any Covered Employee where such
delegation is prohibited under Code Section 162(m) pertaining to "qualified
performance-based compensation."

4.   INCENTIVE PLAN AWARDS

          (a)  PERFORMANCE GOALS. On or before April 1 of each year (or such
               other date as may be required or permitted under Section 162(m)),
               the Committee shall establish the Performance Goals that must be
               satisfied in order for a Participant to receive an Incentive Plan
               Award for such year.

          (b)  CERTIFICATION AND MAXIMUM AMOUNT PAYABLE. The Committee shall,
               promptly after the date on which the necessary financial,
               individual or other information for a particular Fiscal Year
               becomes available, certify: (i) the degree to which each of the
               Performance Goals have been attained; and (ii) with respect to
               each qualifying Participant who is a Covered Employee, the amount
               of the Incentive Plan Award, if any, payable to such Participant.
               The Committee or its designee shall likewise certify the amount
               of the Incentive Plan Award, if any, payable with respect to a
               qualifying Participant who is not a Covered Employee. If the
               Committee certifies in writing that any of the performance
               objectives established for the relevant year under Section 4(a)
               have been satisfied, each Participant who is employed by the
               Company or one of its Subsidiaries on the last day of the
               calendar year for which the Incentive Plan Award is payable shall
               receive the Incentive Plan Award. The Incentive Plan Award shall
               be determined by multiplying the Incentive Percentage applicable
               to the Participant by the Participant's rate of base salary in
               effect for the last full payroll period of the Fiscal Year to
               which the Incentive Plan Award pertains. In no event, however,
               will an Incentive Plan Award for a Covered Employee exceed
               $5,000,000. To be eligible for payment of any Incentive Plan
               Award, the Participant must: (i) have performed the Participant's
               duties to the satisfaction of the Committee; (ii) have not
               engaged in any act deemed by the Committee to be contrary to the
               best interests of the Company; and (iii) otherwise complied with
               Company policies at all times prior to the date the Incentive
               Plan Award is actually paid. No Incentive Plan Award shall be
               paid to any Participant who does not satisfy each of the above.
               If a Participant's employment terminates for any reason
               (including, without limitation, his death, disability, or
               retirement under the terms of any retirement plan maintained by
               the Company or a Subsidiary) prior to the last day of the Fiscal
               Year for which the Incentive Plan Award is payable, such
               Participant shall receive an Incentive Plan Award equal to the
               maximum Incentive Plan Award payable to such Participant under
               the preceding sentence multiplied by a fraction, the numerator of
               which is the number of days that have elapsed during the calendar
               year in which the termination occurs prior to and including the
               date of the Participant's termination of employment and the
               denominator of which is 365.

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          (c)  NEGATIVE DISCRETION. Notwithstanding anything else contained in
               Section 4(b) to the contrary, the Committee shall have the right,
               in its absolute discretion, (i) to reduce or eliminate the amount
               otherwise payable to any Participant under Section 4(b) based on
               individual performance or any other factors that the Committee,
               in its discretion, shall deem appropriate and (ii) to establish
               rules or procedures that have the effect of limiting the amount
               payable to each Participant to an amount that is less than the
               maximum amount otherwise authorized under Section 4(b).

          (d)  AFFIRMATIVE DISCRETION. Notwithstanding any other provision in
               the Plan to the contrary, (i) the Committee shall have the right,
               in its discretion, to pay to any Participant who is not a Covered
               Employee an annual Incentive Plan Award for such year in an
               amount up to the maximum bonus payable under Section 4(b), based
               on individual performance or any other criteria that the
               Committee deems appropriate and (ii) in connection with the
               hiring any person who is or becomes a Covered Employee, the
               Committee may provide for a minimum Incentive Plan Award amount
               in any calendar year, regardless of whether performance
               objectives are attained.

5.   PAYMENT

     Except as otherwise provided hereunder, payment of any Incentive Plan Award
amount determined under Section 4 shall be made to each Participant as soon as
practicable after the Committee certifies that one or more of the applicable
Performance Goals have been attained (or, in the case of any Incentive Plan
Award payable under the provisions of Section 4(d), after the Committee
determines the amount of any such Incentive Plan Award). The Incentive Plan
Award may be paid in whole or in part, in the discretion of the Committee, in
Company stock options, with the remainder, if any, to be paid in cash.

6.   GENERAL PROVISIONS

          (a)  EFFECTIVENESS OF THE PLAN. The Plan shall be effective with
               respect to calendar years beginning on or after January 1, 1999,
               subject to the approval of the Company's stockholders, and ending
               on or before December 31, 2003, unless the term hereof is
               extended by action of the Board.

          (b)  AMENDMENT AND TERMINATION. Notwithstanding Section 6(a), the
               Board or the Committee may at any time amend, suspend,
               discontinue, or terminate the Plan; provided, however, that no
               such amendment, suspension, discontinuance, or termination shall
               adversely affect the rights of any Participant in respect of any
               Fiscal Year which has already commenced and no such action shall
               be effective without approval by the stockholders of the Company
               to the extent necessary to continue to qualify the amounts
               payable hereunder to Covered Employees as "qualified
               performance-based compensation" under Section 162(m).

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          (c)  DESIGNATION OF BENEFICIARY. Each Participant may designate a
               beneficiary or beneficiaries (which beneficiary may be an entity
               other than a natural person) to receive any payments which may be
               made following the Participant's death. Such designation may be
               changed or canceled at any time without the consent of any such
               beneficiary. Any such designation, change or cancellation must be
               made in a form approved by the Committee and shall not be
               effective until received by the Committee. If no beneficiary has
               been named, or the designated beneficiary or beneficiaries shall
               have predeceased the Participant, the beneficiary shall be the
               Participant's spouse or, if no spouse survives the Participant,
               the Participant's estate. If a Participant designates more than
               one beneficiary, the rights of such beneficiaries shall be
               payable in equal shares, unless the Participant has designated
               otherwise.

          (d)  NO RIGHT OF CONTINUED EMPLOYMENT. Nothing in this Plan shall be
               construed as conferring upon any Participant any right to
               continue in the employment of the Company or any of its
               Subsidiaries.

          (e)  NO LIMITATION ON CORPORATE ACTIONS. Nothing contained in the Plan
               shall be construed to prevent the Company or any Subsidiary from
               taking any corporate action which is deemed by it to be
               appropriate or in its best interest, whether or not such action
               would have an adverse effect on any awards made under the Plan.
               No employee, beneficiary or other person shall have any claim
               against the Company or any Subsidiary as a result of any such
               action.

          (f)  NONALIENATION OF BENEFITS. Except as expressly provided herein,
               no Participant or beneficiary shall have the power or right to
               transfer, anticipate, or otherwise encumber the Participant's
               interest under the Plan. The Company's obligations under this
               Plan are not assignable or transferable except to (i) a
               corporation which acquires all or substantially all of the
               Company's assets, or (ii) any corporation into which the Company
               may be merged or consolidated. The provisions of the Plan shall
               inure to the benefit of each Participant and the Participant's
               beneficiaries, heirs, executors, administrators, or successors in
               interest.

          (g)  WITHHOLDING. Any amount payable to a Participant or a beneficiary
               under this Plan shall be subject to any applicable Federal,
               state, and local income and employment taxes and any other
               amounts that the Company or a Subsidiary is required at law to
               deduct and withhold from such payment.

          (h)  SEVERABILITY. If any provision of this Plan is held
               unenforceable, the remainder of the Plan shall continue in full
               force and effect without regard to such unenforceable provision
               and shall be applied as though the unenforceable provision were
               not contained in the Plan.

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          (i)  GOVERNING LAW. The Plan shall be construed in accordance with and
               governed by the laws of the State of Kansas, without reference to
               the principles of conflict of laws except that any matters
               relating to the internal governance of the Company shall be
               governed by the general corporate laws of the state of Delaware.

          (j)  HEADINGS. Headings are inserted in this Plan for convenience of
               reference only and are to be ignored in a construction of the
               provisions of the Plan.

          (k)  PLAN NOT FUNDED. Plan awards shall be made solely from the
               general assets of the Company. To the extent any person acquires
               a right to receive payments from the Company under the Plan, the
               right is no greater than the right of any other unsecured general
               creditor.

          (l)  NO GUARANTEE. While a discretionary Incentive Plan Award may have
               been paid in the past, whether such payments will be made in the
               future will depend upon various factors, such as the Company's
               financial condition and performance. There is no guarantee that
               the Company will pay any such incentive. The Committee may, in
               its sole discretion, reduce, eliminate or increase, any Incentive
               Plan Award, except that the amount of any Incentive Plan Award
               intended to be "qualified performance-based compensation" may not
               be increased above the amount established for the Performance
               Goal and Incentive Percentage. The Company may withhold an
               Incentive Plan Award, or portions thereof, for any reason
               including gross misconduct (e.g., theft, dishonesty/compromised
               integrity, fraud, harassment, etc.) or any actions deemed to be
               contrary to the best interests of the Company by the Committee.

          (m)  RIGHTS TO PAYMENTS. No absolute right to any Incentive Plan Award
               shall be considered as having accrued to any Participant prior to
               the close of the Fiscal Year with respect to which the award is
               made. No Participant shall have any enforceable right to receive
               any Incentive Plan Award made with respect to a Fiscal Year or to
               retain any payment made with respect thereto if for any reason
               the requirements of Section 4 are not satisfied.

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