8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

February 13, 2013

WADDELL & REED FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13913	51-0261715
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6300 Lamar Avenue

Overland Park, Kansas 66202

(Address of Principal Executive Offices) (Zip Code)

(913) 236-2000

(Registrant’s Telephone Number, including Area Code)

(Registrant’s Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

(e)           On February 13, 2013, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Waddell & Reed Financial, Inc. (the “Company”) adopted performance goals under the Company’s 2003 Executive Incentive Plan, as amended and restated (the “EIP”), for the Company’s 2013 fiscal year.  Pursuant to the EIP, eligible participants may receive incentive awards of cash and restricted stock upon the achievement of these goals.  The 2013 performance goals are attached hereto as Exhibit 10.1 and incorporated herein by reference.  The cash awards for each participant will be calculated as a designated percentage (ranging from 10% to 25%) of the aggregate cash award amount available for grant to all participants, which amount is equal to six percent of the Company’s 2013 adjusted operating income.  The restricted stock award for each participant will be calculated as a designated percentage (ranging from 10% to 25%) of the aggregate restricted stock award amount available for grant to all participants, the amount of which is based upon the attainment of a targeted 2013 adjusted return on equity.  The Committee, in its discretion, designates the Company’s executive officers that are eligible to receive incentive awards under the EIP, as well as sets the designated percentage of the incentive award each participant is entitled to earn upon achievement of the financial performance goals.  Under the terms of the EIP, the Committee has the right, in its discretion, to reduce or eliminate entirely the amount of any incentive award payable to any participant, but any such reduction may not increase the award of another participant.  For the 2013 fiscal year, the Committee designated the following named executive officers of the Company eligible for the following maximum percentages of the aggregate cash and restricted stock awards granted under the EIP:

Named Executive Officers	Maximum Percentage of Cash Awards		Maximum Percentage of Restricted Stock Awards
Henry J. Herrmann, Chief Executive Officer	25	%	25	%
Daniel P. Connealy, Senior Vice President and Chief Financial Officer	10	%	10	%
Michael L. Avery, President	25	%	25	%
Thomas W. Butch, Executive Vice President and Chief Marketing Officer	20	%	20	%
Philip J. Sanders, Senior Vice President and Chief Investment Officer	20	%	20	%

Item 9.01              FINANCIAL STATEMENTS AND EXHIBITS.

(d)Exhibits.

10.1 2013 Performance Goals established pursuant to the Waddell & Reed Financial, Inc. Executive Incentive Plan, as amended and restated.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WADDELL & REED FINANCIAL, INC.
Date: February 19, 2013	By:	/s/ Daniel P. Connealy
		Daniel P. Connealy
		Senior Vice President and
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	2013 Performance Goals established pursuant to the Waddell & Reed Financial, Inc. 2003 Executive Incentive Plan, as amended and restated.

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EX-10.1

Exhibit 10.1

A.Performance Criteria for Incentive Plan Awards for Year 2013 Pursuant to the 2003 Executive Incentive Plan

1.Awardees:

a.Henry J. Herrmann

b.Michael L. Avery

c.Thomas W. Butch

d.Daniel P. Connealy

e.Philip J. Sanders

2.Performance Goal:

a.The aggregate Incentive Plan Award to the Awardees shall equal six percent of the Adjusted 2013 Operating Income (defined below).  The aggregate Incentive Plan Award shall be allocated among the Awardees as follows:

Awardee	Portion of Aggregate Incentive Plan Award
Henry J. Herrmann	25	%
Michael L. Avery	25	%
Thomas W. Butch	20	%
Daniel P. Connealy	10	%
Philip J. Sanders	20	%

Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, elect to award each Awardee less of the Incentive Plan Award for the 2013 Year than is set forth above, provided that any such decrease in the Incentive Plan Award for any one Awardee shall not increase the award for any other Awardee.

b.The term “Adjusted 2013 Operating Income” means the operating income of the Company for its fiscal year ending December 31, 2013 (the “2013 Year”), determined pursuant to generally accepted accounting principles, adjusted as follows:  (i) such amount shall be increased by the Company’s interest expense for the 2013 Year; (ii) such amount shall be increased by the Company’s federal, state and local income taxes for the 2013 Year; (iii) such amount shall be increased by bonuses paid under Company executive compensation and deferred compensation plans for the 2013 Year; (iv) such amount shall be increased by losses from publicly-disclosed transactions entered into during the 2013 Year that the Compensation Committee considers to be extraordinary or non-recurring; (v) such amount shall be decreased by gains from publicly-disclosed transactions entered into during the 2013 Year that the Compensation Committee considers to be extraordinary or non-recurring; (vi) such

amount shall be increased by any net losses during the 2013 Year from entities, trades or businesses and lines of businesses acquired from unrelated parties (“2013 Acquisitions”); and (vii) such amount shall be decreased by any net profits during the 2013 Year from entities, trades or businesses and lines of businesses acquired pursuant to 2013 Acquisitions.

B.Performance Criteria for Restricted Stock Awards for Year 2013 Pursuant to the 1998 Stock Incentive Plan

1.Awardees:

a.Henry J. Herrmann

b.Michael L. Avery

c.Thomas W. Butch

d.Daniel P. Connealy

e.Philip J. Sanders

2.Performance Goal:

a.The aggregate Restricted Stock Award to the Awardees shall equal 420,000 shares of Company common stock, provided that no such award shall be made unless the Threshold Condition (defined below) is met.  The aggregate Restricted Stock Plan Award shall be allocated among the Awardees as follows:

Awardee	Portion of Aggregate Incentive Plan Award
Henry J. Herrmann	25	%
Michael L. Avery	25	%
Thomas W. Butch	20	%
Daniel P. Connealy	10	%
Philip J. Sanders	20	%

Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, elect to award each Awardee less of a Restricted Stock Plan Award for the 2013 Year than is set forth above, provided that any such decrease in the Restricted Stock Plan Award for any one Awardee shall not increase the award for any other Awardee.  These awards, if any, are to be granted in December 2013.

b.The term “Threshold Condition” means that the quotient of (i) Adjusted 2013 Operating Income (defined in Section A), divided by (ii) Adjusted 2013 Equity (defined below), equals or exceeds 0.40.

c.The term “Adjusted 2013 Equity” means the quotient of (i) the sum of Beginning 2013 Equity (defined below) plus Adjusted Ending 2013 Equity (defined below), divided by (ii) 2.0.

d.The term “Beginning 2013 Equity” means the shareholders equity of the Company as of January 1, 2013, determined pursuant to generally accepted accounting principles.

e.The term “Adjusted Ending 2013 Equity” means the shareholders equity of the Company as of December 31, 2013, determined pursuant to generally accepted accounting principles, adjusted as follows:  (i) such amount shall be increased by bonuses paid under Company executive compensation and deferred compensation plans for the 2013 Year; (ii) such amount shall be increased by losses from publicly-disclosed transactions entered into during the 2013 Year that the Compensation Committee considers extraordinary or non-recurring; (iii) such amount shall be decreased by gains from publicly-disclosed transactions entered into during the 2013 Year that the Compensation Committee considers to be extraordinary or non-recurring; (iv) such amount shall be increased by any net losses during the 2013 Year from entities, trades or businesses and lines of businesses acquired pursuant to 2013 Acquisitions; and (v) such amount shall be decreased by any net profits during the 2013 Year from entities, trades or businesses and lines of businesses acquired pursuant to 2013 Acquisitions.