Exhibit 10.21
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ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made, executed and entered into this 3rd day of March, 1998,
by and between Torchmark Corporation, a Delaware corporation having its
principal offices in Birmingham, Alabama ("Torchmark") and Waddell & Reed
Financial, Inc., a Delaware corporation having its principal offices in Overland
Park, Kansas ("W&R"), for the purpose of rendering administrative and investment
services for the Torchmark Corporation Savings and Investment Plan and the
Liberty National Life Insurance Company 401(k) Plan (collectively, the "Plans").
1. Services to be Provided
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W&R or one of its affiliates shall perform applicable recordkeeping and
investment services, in accordance with all applicable federal, state and local
laws and regulations and the provisions of the latest executed Plan document, as
specified below:
(a) allocate earnings, including dividends, if any, and losses for (1)
various mutual funds in the United Group of mutual funds (the "Funds")
offered as investments under the Plan, (2) Torchmark Common Stock, and
(3) W&R Class A Common Stock;
(b) issue buy and sell orders, as appropriate, to the purchasing agent for
W&R Class A Common Stock according to the participants' direction and
dividend allocation;
(c) issue buy and sell orders, as appropriate, to the purchasing agent for
Torchmark Common Stock according to the participants' directions and
dividend allocation,
(d) purchase shares of the Funds for participants' accounts according to
the participants' direction;
(e) determine asset values for the Funds held by the Plan;
(f) calculate participant account balances on a periodic basis;
(g) transfer plan assets among the various Funds as directed by Plan
participants;
(h) perform periodic valuations no less frequently than semi-monthly;
(i) invest and credit participant and employer contributions to the
appropriate investment fund, including Torchmark Common Stock, under
the Plan.
(j) provide investment numbers to the trustees of the Plans and to
Torchmark for wiring of contributions;
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(k) balance the recordkeeping system used in the administration of the
Plans, as needed, to the shareholder recordkeeping system after each
investment;
(l) prepare a monthly mutual fund confirmation for the trustees of the
Plans;
(m) prepare letters for the trustees of the Plans to use, as needed and as
requested, regarding mutual fund redemptions, stock redemptions,
forfeitures, and stock buys and sells;
(n) prepare spreadsheets for stock pricing calculation each investment for
input of net asset values based on information provided by Torchmark
related to the current periods stock transactions;
(o) calculate and input dividend rates on Torchmark stock and W&R stock,
as necessary; and,
(p) check all test results when changes are made to the Plans' systems.
2. Information to be Provided
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(a) W&R shall provide the services described in paragraph 1 above based on
information furnished by Torchmark.
(b) Torchmark shall provide W&R with all information relative to employee
data which is necessary for performance of the services agreed upon
herein.
3. Compensation
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In consideration of the performance of services described herein, Torchmark
shall pay a quarterly fee, payable within 30 days after the end of each calendar
quarter, in the amount of two dollars and fifty cents ($2.50) per participant
per quarter (which is the equivalent of ten dollars ($10.00) per participant per
year) to W&R for the services described herein. Any additional services which
are requested by Torchmark and agreed to by W&R shall be provided for a
separately agreed upon fee. The foregoing shall not preclude W&R from
receiving, in addition to the compensation specified herein, management fees and
other expense fees listed in the prospectuses for the Funds.
4. Board of Directors
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The Torchmark Board of Directors may include officers and directors of W&R.
W&R may, nevertheless, deal freely with Torchmark, and no contract or
transaction shall be invalidated or in any way affected by reason of those
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facts, even though the vote of the directors(s) or the action of the officer(s)
who are officers or directors of W&R shall have been necessary to obligate
Torchmark in such contract or transaction. Neither W&R nor any officer or
director thereof shall be liable to Torchmark or to any shareholder or creditor
thereof or to any other person by reason of such contract or transaction or for
any loss resulting therefrom or for any profit derived therefrom, provided that
it was reasonable to believe that such contract or transaction was, at the time
at which it was entered into, a reasonable one to have been entered into and on
terms that, at such time, were fair. Nothing contained in this paragraph 5,
however, shall validate, authorize or apply to any act prohibited by applicable
law or shall protect any director or officer of Torchmark or any director or
officer of W&R against any liability to Torchmark or its shareholders to which
he would otherwise be subject by reason of bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office or under
this Agreement.
5. General
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(a) Either W&R or Torchmark may elect to terminate this Agreement on 30
days' written notice. Unless terminated by such notice, this
Agreement shall continue from month to month and year to year.
(b) Each provision of this Agreement is severable from all other
provisions of this Agreement and, if one or more of the provisions of
this Agreement shall be declared invalid, the remaining provisions of
this, Agreement, nevertheless, remain in full force and effect.
(c) All written notices provided for in this Agreement shall be deemed
given when mailed postage prepaid to the address of the respective
party as listed above, unless otherwise provided in an Amendment to
this Agreement.
(d) This Agreement will be governed by and construed in accordance with
the laws of the State of Kansas.
(e) Torchmark shall not assign or otherwise transfer this Agreement or any
rights hereunder without the prior written permission of W&R.
(f) This Agreement constitutes the entire agreement between the parties
with respect to the subject matter. This Agreement may be executed in
one or more counterparts, each of which shall constitute but a single
document. No modification or waiver of or to any provision of this
Agreement shall be valid unless in writing and signed by all the
parties hereto.
(g) This Agreement will become effective as of the Effective Date when
signed by duly authorized representatives of both parties and will
continue in effect until terminated.
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have caused this Agreement to be executed by their respective
signatures.
TORCHMARK CORPORATION
By: /s/ Michael K. Fagin
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Michael K. Fagin
Vice President and Treasurer
ATTEST:
/s/ Carol McCoy
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WADDELL & REED FINANCIAL, INC.
By: /s/ Keith A. Tucker
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Keith A. Tucker
Chief Executive Officer
ATTEST:
/s/ Sharon K. Pappas
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