Executive Employment Terms

Summary of Compensation Arrangements With Executive Officers of the Company





I. Named Executive Officer Compensation . On December 8, 2005, the Compensation Committee (the "Committee") of the Board of Directors of Waddell & Reed Financial, Inc. (the "Company") approved the annual base salaries (effective as of January 1, 2006) of the Company92s executive officers. The following table sets forth the annual base salaries of the Company92s Chief Executive Officer and the next four most highly compensated officers (collectively, the "Named Executive Officers") for 2006:



Named Executive Officer Salary

Henry J. Herrmann
Chief Executive Officer $ 800,000

Michael L. Avery
Senior Vice President and Chief Investment Officer $ 425,000

Thomas W. Butch
Senior Vice President and Chief Marketing Officer $ 400,000

Michael D. Strohm
Senior Vice President and Chief Operations Officer $ 350,000

John E. Sundeen, Jr.
Senior Vice President and Chief Administrative Officer 96 Investments $ 350,000




The Company has adopted a supplemental executive retirement plan (the "SERP") pursuant to which participants92 accounts are credits with (1) an amount equal to 4% of his or her base salary, less the amount of the maximum employer matching contribution allowable that can be made on the participant92s behalf under the Company92s 401(k) plan, and (2) a non-formula award, as determined by the Committee in its discretion. For 2005, the Committee designated Mr. Herrmann as a participant of the SERP and awarded him a non-formula award of $300,000 on December 8, 2005. None of the other Named Executive Officers were eligible to participate in the SERP for 2005.





II. 2005 Executive Incentive Awards . Pursuant to the Company92s 2003 Executive Incentive Plan, as amended and restated (the "EIP"), eligible participants may receive (1) an annual incentive award of cash, and (2) an annual incentive ...