-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MnPzPVxNf0nh1OB6lJqQL2f740F7L56bPCUmbvQmhJH2Qv/zrN4JTgRCkJkGwFtl 0PkKdHxds/ygH1vSfYJnMw== 0000950137-96-000839.txt : 19960603 0000950137-96-000839.hdr.sgml : 19960603 ACCESSION NUMBER: 0000950137-96-000839 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960531 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN JOHN COMPANY CENTRAL INDEX KEY: 0000885708 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 363817266 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43420 FILM NUMBER: 96575277 BUSINESS ADDRESS: STREET 1: 333 W WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129177700 MAIL ADDRESS: STREET 1: 333 WEST WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCHWERTFEGER TIMOTHY R CENTRAL INDEX KEY: 0001015680 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DRIVBE CITY: CHICAGO STATE: IL ZIP: 60606 SC 13D 1 SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 OMB APPROVAL OMB Number: 3235-0145 Expires: October 31, 1997 Estimated average burden hours per response....14.90 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )* The John Nuveen Company - -------------------------------------------------------------------------------- (Name of Issuer) Class A Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 478035 10 8 ----------------------- (CUSIP Number) James J. Wesolowski, Esq. 333 West Wacker Drive Chicago, Illinois 60606 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 20, 1996 -------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [x]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP No. 478035 10 8 Page 2 of Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Timothy R. Schwertfeger ###-##-#### 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* SC & PF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States 7 SOLE VOTING POWER 449,700 8 SHARED VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY OWNED BY EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 449,700 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 449,700 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.6% 14 TYPE OF REPORTING PERSON* IN
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 3 Item 1. Security and Issuer This statement on Schedule 13D relates to shares of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), of The John Nuveen Company, a Delaware corporation (the "Company"). The Company's principal executive office is located at 333 West Wacker Drive, Chicago, Illinois 60606. ITEM 2. IDENTITY AND BACKGROUND (a) Timothy R. Schwertfeger (b) 333 West Wacker Drive, Chicago, Illinois 60606. (c) Mr. Schwertfeger is an Executive Vice President and Director of the Company (and chairman and CEO-elect). The Company's principal executive office is located at 333 West Wacker Drive, Chicago, Illinois 60606. (d) Mr. Schwertfeger has not been convicted in any criminal proceeding during the last five years (excluding traffic violations or other similar misdemeanors). (e) During the last five years, Mr. Schwertfeger has not been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction which, as a result of such proceeding, subjected Mr. Schwertfeger to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or found any violation with respect to such laws. (f) Mr. Schwertfeger is a citizen of the United States. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION All of the 449,700 shares of Class A Common Stock beneficially owned by Mr. Schwertfeger have been acquired by him through grants of restricted stock and non-qualified stock options under the Nuveen 1992 Special Incentive Plan (the "Incentive Plan") and 19,100 shares of Class A Common Stock through different market transactions. On May 27, 1992, the date of the closing of the initial public offering of Class A Common Stock (the "Offering"), the Compensation Committee of the Board of Directors (the "Compensation Committee") awarded initial grants ("Initial Grants") under the Incentive Plan to key executive officers of the Company. Mr. Schwertfeger's Initial Grant included 210,600 restricted shares of Class A Common Stock and non-qualified stock options for 220,000 shares of Class A Common Stock, of which all options have become exercisable or will become exercisable within the next sixty days. See Item 5(c) and Item 6. 4 ITEM 4. PURPOSE OF TRANSACTION The purpose of the Incentive Plan is to enable the Company to attract and retain exceptionally qualified officers and other key employees upon whom the profitability of the Company will depend in large part, to provide incentive for such individuals to enhance the value of the Company for the benefit of the stockholders, and to strengthen the mutuality of interests between participants and the Company's stockholders by providing equity-based incentive awards. Depending on market conditions and applicable legal restrictions existing at the time, Mr. Schwertfeger may from time to time increase his beneficial ownership of shares of Class A Common Stock through open market transactions (including brokerage transactions on the New York Stock Exchange) or by other types of transactions. Mr. Schwertfeger may also from time to time dispose of shares of Class A Common Stock beneficially owned by him in open market transactions, in conjunction with a registration statement filed by the Company or otherwise. Except as described in this Item 4, Mr. Schwertfeger does not have any present plans or proposals which relate to or would result in any action or event described in subparagraphs (a) through (j) of Item 4 of Schedule 13D; however, Mr. Schwertfeger reserves the right to change his plans or intentions at any time and to take all actions he may deem appropriate in the circumstances. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Mr. Schwertfeger is the beneficial owner of 449,700 Class A Common Shares, including 220,000 shares issuable upon the exercise of stock options which are exercisable either currently or within sixty days. Based on the number of shares of Class A Common Stock outstanding as of May 20, 1996 and such 220,000 shares subject to Mr. Schwertfeger's stock options, such 449,700 shares represent approximately 5.6% of the Class A Common Stock. (b) Mr. Schwertfeger has sole power to vote or direct the vote (or will acquire such power within sixty days) with respect to 449,700 shares of Class A Common Stock beneficially owned by him. Mr. Schwertfeger has sole power to dispose or direct the disposition (or will acquire such power within sixty days) with respect to 449,700 shares of Class A Common Stock, of which 198,900 are outstanding shares that are no longer subject to restrictions on transferability or a risk of forfeiture under the Incentive Plan, 207,778 are unissued shares subject to currently exercisable stock options, 11,700 are outstanding restricted shares that will vest within sixty days and 12,222 are unissued shares subject to stock options that will become exercisable within sixty days. Additionally, Mr. Schwertfeger holds 1,000 shares of Class A Common Stock in which he is the custodian for his son, Andrew Schwertfeger, under the Illinois Uniform Transfer to Minors Act. 5 (c) Since May 27, 1992, the date of Mr. Schwertfeger's Initial Grant, the following restricted shares have become vested or will vest within sixty days and the following shares have become subject to exercisable stock options or will become exercisable stock options within sixty days, pursuant to the vesting schedules described in Item 6, on the dates indicated:
Number of Number of Option Restricted Shares Shares Becoming Date Becoming Vested Exercisable --------------- ----------------- ---------------- May 27, 1992 11,700 12,222.222 July 1, 1992 11,700 12,222.222 October 1, 1992 11,700 12,222.222 January 1, 1993 11,700 12,222.222 April 1, 1993 11,700 12,222.222 July 1, 1993 11,700 12,222.222 October 1, 1993 11,700 12,222.222 January 1 1994 11,700 12,222.222 April 1, 1994 11,700 12,222.222 July 1, 1994 11,700 12,222.222 October 1, 1994 11,700 12,222.222 January 1 1995 11,700 12,222.222 April 1, 1995 11,700 12,222.222 July 1, 1995 11,700 12,222.222 October 1, 1995 11,700 12,222.222 January 1 1996 11,700 12,222.222 April 1, 1996 11,700 12,222.222 July 1, 1996 11,700 12,222.222
Mr. Schwertfeger purchased an additional 6,600 shares of Class A Common Stock through the Initial Public Offering of the Company's stock, of which 1,000 shares are held by Mr. Schwertfeger as custodian for his son Andrew Schwertfeger under the Illinois Uniform Transfer to Minors Act. Mr. Schwertfeger has also made two open market transactions in which he acquired 7,500 shares on October 26, 1994 and 5,000 shares on November 2, 1994 of the Company's Class A Common Stock. EXCEPT AS SET FORTH IN THIS ITEM 5(C), MR. SCHWERTFEGER HAS NOT EFFECTED ANY TRANSACTIONS IN SHARES OF CLASS A COMMON STOCK DURING THE PERIOD FROM MAY 27, 1992 TO THE DATE OF THIS STATEMENT. (d) See Item 6. (e) Not applicable. 6 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The following summary of contracts, arrangements, understandings or relationships of Mr. Schwertfeger with respect to securities of the Company does not purport to be complete and is qualified in its entirety by reference to the documents filed as Exhibits to this statement. Mr. Schwertfeger's Initial Grant under the Incentive Plan consisted of 210,600 restricted shares of Class A Common Stock and a non-qualified stock option for 220,000 shares of Class A Common Stock. The shares included in Mr. Schwertfeger's restricted stock award are subject to restrictions on transferability, a risk of forfeiture and certain other terms and conditions specified in the Incentive Plan or by the Compensation Committee, which restrictions and risk of forfeiture lapse on a specified date or upon the occurrence of a specified event. Each share of restricted stock awarded to Mr. Schwertfeger was valued at $18.00, equal to the initial public offering price per share of Class A Common Stock in the Offering. The exercise price per share under Mr. Schwertfeger's stock option is also $18.00, and the term of his stock option expires on May 26, 2002. The shares of restricted stock awarded to Mr. Schwertfeger vest, and the stock option awarded to him becomes exercisable, in 18 equal quarterly installments, commencing on May 27, 1992 (the closing date of the Offering), and thereafter on the first day of each successive fiscal quarter. Mr. Schwertfeger's restricted stock and stock option are subject to accelerated vesting in the event of his death, disability or retirement upon reaching age 65 (or at an earlier date with the approval of the Compensation Committee), or in the event of a change in control of the Company (as defined in the Incentive Plan). In the event Mr. Schwertfeger's employment is terminated by the Company other than for cause or by Mr. Schwertfeger on account of constructive termination, Mr. Schwertfeger's Employment Agreement provides that his restricted stock and stock option will not be forfeited but rather will fully vest or become payable. In addition, if the St. Paul Companies, Inc. ("St. Paul"), or any subsidiary or affiliate of St. Paul, sells shares of Class A Common Stock or Class B Common Stock (collectively, the "Common Stock") of the Company after the Offering, the Incentive Plan provides that a ratable portion (equal to the ratio that the shares so sold bear to the total shares of Common Stock held by St. Paul and its subsidiaries prior to the Offering) of the shares of restricted stock included in Mr. Schwertfeger's Initial Grant will immediately vest. During the period in which shares of restricted stock awarded to Mr. Schwertfeger remain unvested, Mr. Schwertfeger is entitled to vote such shares and receive dividends or dividend equivalents with respect to such shares. A dividend equivalent entitles Mr. Schwertfeger to receive an amount of cash equal in value to the dividend that would have been paid on the number of shares of Class A Common Stock specified in the dividend equivalent award if such shares had been fully vested on the record date for payment of the dividend. 7 Except as described in Item 4 and in this Item 6, Mr. Schwertfeger is not a party to any contracts, arrangements, understandings or relationships (legal or otherwise) with respect to any shares of Class A Common Stock of the Company, including but not limited to transfer or voting of any shares of Class A Common Stock, finder's fees, joint ventures, loan or option arrangements, put or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Except as provided in the Incentive Plan, Mr. Schwertfeger has not pledged or otherwise subjected any shares of Class A Common Stock held by him to a contingency the occurrence of which would give another person voting power or investment power over such securities. As disclosed in the Company's Proxy Statment, filed with the Securities and Exchange Commission on May 23, 1996 and incorporated herein by reference, the Board of Directors of the Company have approved the 1996 Equity Incentive Plan and the Executive Officer Performance Plan (collectively the "Plans"). Although both of the Plans are subject to shareholder approval at the Company's annual meeting on July 9, 1996, Mr. Schwertfeger has been awarded both stock options and restricted stock under such Plans subject to approval by the Company's shareholders. ITEM 7.MATERIAL FILED AS EXHIBITS Exhibit 1. The Nuveen 1992 Special Incentive Plan. Exhibit 2. Stock Option Agreement between the Company and Mr. Schwertfeger. Exhibit 3. Employment Agreement between the Company and Mr. Schwertfeger. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. May 31, 1996 /S/ Timothy R. Schwertfeger - ------------- --------------------------- Date Timothy R. Schwertfeger 8 EXHIBIT INDEX
Exhibit No. Exhibit ----------- -------------------------------------- Exhibit 1 The Nuveen 1992 Special Incentive Plan Exhibit 2 Stock Option Agreement between the Company and Mr. Schwertfeger Exhibit 3 Employment Agreement between the Company and Mr. Schwertfeger
EX-1 2 SPECIAL INCENTIVE PLAN 1 AMENDMENT TO THE NUVEEN 1992 SPECIAL INCENTIVE PLAN RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS ON NOVEMBER 9, 1995 WHEREAS, the Nuveen Employees' Retirement Plan permits long-term employees to retire, without penalty, when their age, plus the number of their years of service as defined in the Plan, equals or exceeds 90; and WHEREAS, the 1992 Special Incentive Plan provides for vesting of any unvested options and permits exercise of options for a period of two years after an employee's retirement, but only upon retirement at age 65 or, if earlier, with the express consent of the Compensation Committee; and WHEREAS, the Compensation Committee has concluded that it is appropriate to permit employees who are eligible to retire without penalty under the Retirement Plan because they have satisfied the "rule of 90" also to retire without adverse treatment under the 1992 Special Incentive Plan; and has recommended that the Board of Directors amend the definition of the term "Retirement" in Section I (dd) of the Nuveen 1992 Special Incentive Plan accordingly: RESOLVED, that Section I (dd) of the Nuveen 1992 Special Incentive Plan be and it hereby is amended to provide as follows: (dd) "Retirement" shall mean the retirement of a Participant from the employment of the Company or a Nuveen Subsidiary at (l) such Participant's normal retirement date upon reaching age 65, or (2) such Participant's early retirement either (a) upon having reached that age, which, when added to his or her years of continuous service (as such term is defined under the Nuveen Employees' Retirement Plan) is equal to or greater than 90, or (b) with the approval of the Committee; provided, however, that in the case of Messrs. Franke and Sveen, such approval shall be deemed to have been given in the event that such Participant retires on or after June 30, 1996. (Additional language in italics.) 2 NUVEEN 1992 SPECIAL INCENTIVE PLAN The John Nuveen Company hereby establishes the Nuveen 1992 Special Incentive Plan for the benefit of its eligible Participants (as hereinafter defined) for the purposes hereinafter set forth. I . DEFINITIONS (a) "Award" shall mean the grant of Non-Qualified Stock Options, Restricted Stock, Deferred Units (and interest thereon), Dividend Equivalents, or any combination of the foregoing. (b) "Beneficial Owner," with respect to any securities, shall mean any person who, directly or indirectly, has or shares the right to vote or dispose of such securities or otherwise has "beneficial ownership" of such securities within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act (as such Rules are in effect on the effective date of this Plan), including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any securities acquired through such person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition. (c) "Beneficiary" shall mean (i) in the event of the disability or incompetence of a Participant, the person or persons who shall have acquired on behalf of such Participant by legal proceeding or otherwise the right to receive the benefits specified under this Plan, or (ii) in the event of a Participant's death, the person, persons, trust or trusts which have been designated by such Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under this Plan, or, if there is no designated Beneficiary or surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits. (d) "Board of Directors" shall mean the Board of Directors of the Company. (e) "Change in Controls" shall mean and shall be deemed to have occurred if: (i) any person (as defined under the Exchange Act or group of persons acting together, other than a 3 St. Paul Entity or a Nuveen Entity, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 20 percent or more of the combined voting power of the Company's then-outstanding securities; and (ii) following an event specified in (i), individuals who were members of the Board of Directors of the Company on the closing date of the Public Offering (the "Incumbent Board"), together with those individuals who first became Directors after such date and whose election or nomination for election to the Board of Directors was approved by the vote of at least three-quarters (3/4) of the members of the Incumbent Board (collectively, the "Continuing Directors"), cease for any reason to constitute a majority of the Board of Directors of the Company. Notwithstanding the foregoing, unless a majority of the Continuing Directors determines otherwise, no Change in Control shall be deemed to have occurred with respect to a particular Participant if the Change in Control results from actions or events in which such Participant is a participant in a capacity other than solely as an officer, employee or director of the Company. (f) "Class A Common Stock" shall mean the Class A Common Stock of the Company, par value S.01 per share. (g) "Class B Common Stock" shall mean the Class B Common Stock of the Company, par value $.01 per share. (h) "Committee" shall mean the Compensation Committee of the Board of Directors, the members of which are selected by and serve at the pleasure of the Board of Directors; provided, however, that the Committee shall at all times consist of at least two directors who are not employees of the Company or any Nuveen Subsidiary, and provided further that each member of the Committee shall be a "disinterested person" within the meaning of Rule 16b-3 under the Exchange Act, or any successor rule, as any such rule may be amended from time to time. (i) "Common Stock" shall mean the Class A Common Stock and the Class B Common Stock. (j) "Company" shall mean The John Nuveen Company, a Delaware corporation, and its successors. (k) "Class B Directors" shall mean those members of the Board of Directors of the Company that have been -2- 4 nominated and elected by the holders of the Class B Common Stock in accordance with the provisions of the Company's certificate of incorporation. (l) "Deferred Unit" shall mean a right, awarded to a Participant by the Committee, or elected by a Participant in connection with an Award of Restricted Stock, to receive a cash payment equal to the Fair Market Value of a share of Class A Common Stock on the Effective Date of the Award plus interest at the Prime Rate, subject to certain restrictions and a risk of forfeiture and certain other terms and conditions under the Plan or specified by the Committee, payable at the time such restrictions lapse or on a specified date or on an accelerated basis under circumstances specified in the Plan or agreement evidencing the Deferred Unit. (m) "Disability" shall mean the inability of a Participant to perform the services normally rendered to his or her Employer due to a physical or mental impairment that can be expected to be of either permanent or indefinite duration, as determined by the Committee, and which results in the Participant's inability to perform his normal duties to the Employer. (n) "Dividend Equivalent" shall mean a right, awarded to a Participant by the Committee, to receive, on the payment date for a dividend on the Class A Common Stock, an amount equal in value to the dividend that would have been paid on the number of shares of Class A Common Stock specified under such Dividend Equivalent Award if such shares had been fully vested on the record date for payment of such dividend. (o) "Effective Date" of an Award shall mean (i) in the case of an Initial Grant, the closing date of the Public Offering (without regard to the exercise of any overallotment option by the underwriters in connection therewith), and (ii) in the case of all other Awards, the actual date of the grant as specified by the Committee. (p) "Employer" shall mean the Company with respect to its employees and each Nuveen Subsidiary with respect to its employees. (q) "Employment Agreements" shall mean the employment agreements, dated as of the closing date of the Public Offering, between the Company and each of Messrs. Franke, Sveen, Dean, Schwertfeger, Noonan, Wesolowski and Williams. -3- 5 (r) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (s) "Exercise Price" shall mean the price at which each share of Class A Common Stock covered by a Non-Qualified Stock Option may be purchased. (t) "Fair Market Value" of a share of Class A Common Stock shall mean (i) on the closing date of the Public Offering, the initial offering price to the public at which a substantial amount Of The Class A Common Stock offered thereby is sold, and (ii) at all other times, the closing price of the Class A Common Stock on the New York Stock Exchange as reported on tne Composite Tape and published in the Wall Street Journal, or, if there is no trading of the Class A Common Stock on the date in question, then the closing price of the Class A Common Stock, as so reported and published, on the next preceding date on which there was trading in the Class A Common Stock. (u) "Initial Grant" shall mean an Award of Non-Qualified Stock Options and/or Restricted Stock or Deferred Units to a Participant proposed by resolution of the Board of Directors on March 23, 1992 and approved by resolution of the Committee. (v) "Non-Qualified Stock Option" or "Option" shall mean a right to purchase a specified number of shares of Class A Common Stock at a specified price, which is not intended to comply with the terms and conditions for a tax-qualified stock option as set forth in Section 422 of the Internal Revenue Code of 1986, as amended, as such section may be in effect from time to time. (w) "Nuveen Entity" shall mean the Company, any Nuveen Subsidiary or any employee benefit plan of the Company or any Nuveen Subsidiary. (x) "Nuveen Subsidiary" shall mean any corporation more than 50% of whose voting power is owned, directly or indirectly, by the Company. (y) "Participant" shall mean an officer or other key employee of the Company or a Nuveen Subsidiary who has been granted an Award under the Plan. (z) "Plan" shall mean this Nuveen 1992 Special Incentive Plan. -4- 6 (aa) "Prime Rate" shall mean the prime rate of interest as reported by The First National Bank of Chicago or a comparable bank selected by the Committee. (bb) "Public Offering" shall mean the sale to the public by St. Paul, on or about May 21, 1992, of up to 9,200,000 shares of Class A Common Stock. (cc) "Restricted Stock" shall mean an award of shares of Class A Common Stock subject to restrictions on transferability, a risk of forfeiture, and certain other terms and conditions under the Plan or specified by the Committee (which may include limitations on the right to vote Restricted Stock or the right to receive Dividend Equivalents thereon). The restrictions on and risk of forfeiture of Restricted Stock generally will expire on a specified date, upon the occurrence of an event or on an accelerated basis under certain circumstances specified in the Plan or an agreement relating to the Restricted Stock. (dd) "Retirement" shall mean the retirement of a Participant from the employment of the Company or a Nuveen Subsidiary at such Participant's normal retirement date upon reaching age 65, or such Participant's early retirement with the approval of the Committee; provided, however, that in the case of Messrs. Franke and Sveen, such approval shall be deemed to have been given in the event that such Participant retires on or after June 30, 1996. (ee) "St. Paul" shall mean The St. Paul Companies, Inc., a Minnesota corporation. (ff) "St. Paul Disposition" shall mean the sale by a St. Paul Entity, at any time after the date of the Public Offering, of additional shares of Common Stock of the Company. (gg) "St. Paul Entity" shall mean St. Paul, any St. Paul Subsidiary or any employee benefit plan of St. Paul or any St. Paul Subsidiary. (hh) "St. Paul Subsidiary" shall mean any corporation, more than 50% of whose voting power is owned directly or indirectly by St. Paul. (ii) "Termination of Employment" shall mean a cessation of the employee-employer relationship between a Participant and an Employer other than by reason of transfer of the employee to another Employer. The employment of a Participant who is on an approved leave of absence in excess -5- 7 of two years shall be considered terminated as of the commencement of such leave for all purposes of the Plan. II. THE PLAN 2.1 Purposes. The purposes of the Plan are to enable the Company and Nuveen Subsidiaries to attract and retain exceptionally qualified officers and other key employees upon whom the sustained growth and profitability of the Company and Nuveen Subsidiaries will depend in large measure, to provide added incentive for such individuals to enhance the value of the Company for the benefit of its stockholders, and to strengthen the mutuality of interests between Participants and the Company's stockholders by providing equity-based incentive awards. The Plan is intended to achieve these purposes through the award of Non-Qualified Stock Options, Restricted Stock, Deferred Units (and interest thereon), and Dividend Equivalents. 2.2 Administration. The Plan shall be administered by the Committee. Any action of the Committee with respect to the administration of the Plan shall be taken pursuant to a majority vote or the written consent of a majority of its members. Subject to the express provisions of the Plan, the Committee shall have the authority to construe and interpret the Plan, to define the terms used herein, to prescribe, amend and rescind rules and regulations relating to the administration of the Plan and to make all other determinations necessary or advisable for the administration of the Plan. The determinations of the Committee on the foregoing matters shall be conclusive. The duties of the Committee shall include, but shall not be limited to, selecting individuals for participation in the Plan, determining the types, sizes, terms and provisions of Awards (which need not be identical), making disbursements and settlements of Awards, determining whether to grant disbursements and settlements of Awards in shares, the cash equivalent value of such shares or other Awards or property, or a combination thereof, creating trusts, determining whether to defer or accelerate the vesting of, or the lapsing of restrictions or risk of forfeiture with respect to, Non-Qualified Stock Options, Restricted Stock or Deferred Units, construing the provisions of the Plan, modifying the terms of any Award, and authorizing the exchange or substitution of Awards; provided, however, that -6- 8 no such modification, change or substitution shall be to the detriment of a Participant with respect to any Award previously granted. Subject only to compliance with the express provisions of the Plan, the Committee may act in its sole and absolute discretion in performing the duties specifically set forth in the preceding sentence and other duties under the Plan. The Committee shall have the power and authority to appoint and authorize such of the Company's officers or other persons to perform such functions in the execution and administration of the Plan(other than the interpretation of the Plan and the adoption of rules governing its execution and administration) as the Committee shall determine from time to time. No member of the Committee shall be liable for any action, failure to act, determination or interpretation made in good faith with respect to the Plan or any transaction hereunder. 2.3 Participation. Officers and other full-time salaried employees of the Company or a Nuveen Subsidiary, including those who also serve as a director of the Company or a Nuveen Subsidiary, shall be eligible to participate in the Plan upon selection and approval by the Committee. The Committee may, in its discretion, delegate to officers of the Company the authority to select individuals for participation in the Plan provided that such individuals are not subject to section 16(b) of the Exchange Act. Participants shall be selected because they are in a position to have a significant impact on achieving the long term profit and growth objectives of the Company and/or a Nuveen Subsidiary. No member of the Committee on or after the date of the Public Offering shall be a Participant, shall be eligible to receive an Award, or shall have received an award at any time within one year prior to appointment to the Committee. Directors who are not officers or employees of the Company or a Nuveen Subsidiary are not eligible to participate in the Plan. An individual who has received Awards may, if otherwise eligible, be granted additional Awards if the Committee shall so determine. Awards granted under the Plan may be terminated or forfeited upon the occurrence of such events or in such circumstances, including at or following a Participant's Termination of Employment, as the Committee shall specify. 2.4 Shares Reserved for Plan. The total number of shares of Common Stock reserved and available for issuance in connection with Awards under the Plan shall be 5,980,000, all of which shall be Class A Common Stock; provided, however, that the total -7- 9 number of shares of Class A Common Stock that may be issued in connection with Awards of Non-Qualified Stock Options shall not exceed [3,640,000], and the total number of shares of Class A Common Stock that may be issued in connection with Awards of Restricted Stock and Deferred Units shall not exceed [2,340,000]. The number of shares of Class A Common Stock available for issuance under the Plan shall be reduced by one share for each Deferred Unit awarded under the Plan. Except as contemplated by the provisions of Section 4.1(a) hereof, the Committee shall not increase the number of shares available for issuance in connection with Awards under the Plan. In no event shall Awards be outstanding at any one time that have resulted or could result in the issuance of a number of shares of Class A Common Stock in excess of the number then remaining reserved and available for issuance under the Plan. In addition, in no event shall Dividend Equivalents be outstanding at any one time that relate to more than the number of shares then subject to outstanding Awards of Restricted Stock. If any shares of Class A Common Stock subject to an Award are forfeited or such Award (other than a Deferred Unit) is settled in cash or otherwise terminates without a distribution of shares to the Participant, any shares counted against the number of shares reserved and available under the Plan, with respect to such Award shall, to the extent of any such forfeiture, settlement or termination, again be available for Awards under the Plan, provided tnat the counting of shares of Class A Common Stock against the number reserved and available for issuance under the Plan shall in all respects comply with applicable requirements of Rule 16b-3 under the Exchange Act. Any shares of Class A Common Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued shares or treasury shares. III. AWARDS UNDER THE PLAN 3.1 In General. Non-Qualified Stock Options, Restricted Stock, Deferred Units (and interest thereon) and Dividend Equivalents may be awarded in accordance with the provisions of the Plan and on such other terms and conditions as are not inconsistent with the purposes and provisions of the Plan. Awards granted under the Plan may be granted either alone or in addition to, in tandem with, or in substitution for, any other Award granted under the Plan or any Award granted under any other plan of the Company or any Nuveen Subsidiary -8- 10 or any other right of a Participant to receive payment from the Company or any Nuveen Subsidiary. After the Committee has approved the grant of an Award to a Participant and established the applicable terms and conditions of the Award applicable to such Participant, such Participant shall be given written confirmation of such Award. 3.2 Non-Qualified Stock Options. All Non-Qualified Stock Options granted pursuant to the Plan shall be in such form as the Committee shall from time to time determine and shall be subject to such terms, conditions, restrictions and limitations as deemed appropriate by the Committee and, in addition, to the following terms and conditions: (a) All Non-Qualified Stock Options awarded under the Plan shall represent the right to purchase shares of Class A Common Stock. (b) The Exercise Price for each share of Class A Common Stock covered by a Non-Qualified Stock Option shall be determined and fixed by the Committee and shall be set forth in such Option; provided, however, that the Exercise Price shall in no event be less than the Fair Market Value of the Class A Common Stock on the Effective Date of the Award, and provided further, that in no event shall the Exercise Price be less than the par value of the Class A Common Stock. The proceeds of sale of all shares of Class A Common Stock issued or sold upon the exercise of Non-Qualified Stock Options under the Plan shall be added to the general funds of the Company and used from time to time for such corporate purposes as the Board of Directors may determine. (c) Each Non-Qualified Stock Option awarded under the Plan shall be evidenced by a Stock Option Agreement in a form approved by the Committee, to be executed between the Company and the person to whom such Option is granted. (d) The term of each Non-Qualified Stock Option shall be not more than ten years from the date of grant, as the Committee shall determine, subject to earlier termination as provided in paragraph (i) of this Section 3.2. (e) Except as otherwise provided in paragraph (i) of this Section 3.2 or paragraph (c) of Section 4.1 hereof, Non-Qualified Stock Options awarded to a Participant may not be exercised prior to the date of the Public Offering and -9- 11 shall become exercisable on and after such date only as follows: (i) options awarded to Messrs. Franke and Sveen shall become exercisable (A) in the case of Options awarded as an Initial Grant, in fourteen (14) equal quarterly installments commencing on the closing date of the Public Offering, with each subsequent installment becoming exercisable on the first day of each successive fiscal quarter thereafter, and (B) in the case of all other grants, in equal quarterly installments commencing on the Effective Date of the grant, and thereafter on the first day of each successive fiscal quarter, and ending on the date that the final quarterly installment of Options awarded as an Initial Grant become exercisable; and (ii) Options awarded to all other Participants shall become exercisable in eighteen (18) equal quarterly installments commencing (A) in the case of Options awarded as an Initial Grant, on the closing date of the Public Offering, with each subsequent installment becoming exercisable on the first day of each successive fiscal quarter thereafter, and (B) in the case of all other grants, on the Effective Date of the grant, and thereafter on the first day of each successive fiscal quarter. Any shares covered by an exercisable Option that are not purchased on an applicable installment date may be purchased at any time thereafter prior to the final expiration of the Option. Except as expressly contemplated by the provisions of this Plan or the Employment Agreements, the Committee shall not have discretion to shorten the vesting schedule for Initial Grants set forth in this paragraph (e). (f) Subject to the terms and conditions of the Option, during its term an option may be exercised only by the optionee, by a legal representative upon the incapacity of the optionee or by the Beneficiary upon the death of the optionee, by giving written notice of exercise to the Company prior to expiration of the Option, specifying the number of shares to be purchased and accompanied by the payment of the aggregate Exercise Price therefor. (g) No partial exercise of any Option may be for less than 1000 shares or the number of shares remaining subject to such option, whichever is less. (h) The aggregate Exercise Price for all shares purchased pursuant to exercise of an Option shall be paid -10- 12 for at the time of such purchase and prior to the delivery of said shares either (i) in cash or by check, bank draft or money order payable to the order of the Company, or (ii) subject to the discretion of the Committee, and in respect of the exercise price only and not any tax withholding, through the delivery of previously acquired shares of Class A Common Stock owned by the optionee, to the extent that such payment does not require the delivery of a fractional share of such previously acquired Class A Common Stock, and provided that, in the case of an optionee that is subject to Section 16(b) of the Exchange Act, such previously acquired shares have been held by the optionee for at least six months, or (iii) a combination of (i) and (ii). For purposes of the immediately preceding sentence, previously acquired shares of Class A Common Stock shall be valued at the average of the high and low sales prices of the Class A Common Stock on the New York Stock Exchange Composite Tape as of the date of exercise. The Company shall not lend money or in any manner finance the purchase of shares under an Option. (i) Except as otherwise expressly contemplated by the Employment Agreements, in the event of Termination of Employment of an optionee other than by reason of the optionee's death, Disability or Retirement, any Options previously awarded to such optionee which are restricted as to exercise on the date of Termination of Employment shall be forfeited, and all other Options which are not so restricted but have not been exercised as of the date of Termination of Employment shall be exercisable for a period of 60 days following the date of Termination of Employment (but not after the expiration date of the Option) and shall, if not theretofore exercised, terminate upon the expiration of such 60-day period. If Termination of Employment is by reason of the death, Disability or Retirement of the optionee, except as otherwise provided in the next sentence, any Options not exercised as of the date of Termination of Employment (including Options which are otherwise not yet exercisable) may be exercised by the optionee or the optionee's Beneficiary at any time within two (2) years of the date of Termination of Employment (but not after the expiration date of the Option) to the extent of the total number of shares subject to Option. In the case of Options awarded to Messrs. Franke and Sveen, if Termination of Employment is by reason of Disability or Retirement, any Options not exercised as of the date of Termination of Employment (including Options which are otherwise not yet exercisable) may be exercised by the optionee or the optionee's Beneficiary at any time prior to the expiration of the Option to the extent of the total number of shares subject to the Option; provided, however, that in the event -11- 13 of the optionee's death after Termination of Employment by reason of Disability or Retirement and prior to the expiration of such Options, such Options must be exercised within one (1) year of the date of the optionee's death (but not after the expiration date of the Option). (j) The grant and exercise of Options hereunder shall be subject to all applicable rules and regulations of governmental authorities. Each Option shall be subject to the requirement that, if at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of the shares covered thereby upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such Option or the purchase of shares thereunder, the Company's obligation to deliver shares upon exercise shall be conditioned upon such listing, registration, qualification, consent or approval, which shall have been effected or obtained free of any conditions not acceptable to the Committee. (k) The holder of an Option granted under this Plan shall have no rights as a stockholder with respect to any shares of Class A Common Stock covered by such Option until the date of issuance of a stock certificate for such shares. (l) Unless an optionee could otherwise transfer shares issued upon exercise of an Option without incurring liability under Section 16(b) of the Exchange Act, at least six months must elapse from the date of grant of an Option to the date of disposition of shares issued upon exercise of the Option. 3.3 Restricted Stock and Deferred Units. (a) The Committee may grant Awards of Restricted Stock to Participants, subject to such restrictions on transferability and such other restrictions as the Committee may impose in its discretion. Participants who are granted an Award of Restricted Stock may elect, at the time of the grant, to receive Deferred Units in lieu of shares of Restricted Stock up to a maximum of 40% of the shares of Restricted Stock covered by the Award; provided, that, in the case of an Initial Grant of Restricted Stock, such election shall be made at least thirty (30) days prior to the Effective Date of the grant and in no event later than April 20, 1992. Any such election to receive Deferred Units in lieu of shares of Restricted Stock shall be irrevocable. -12- 14 (b) Restricted Stock granted under the Plan shall be evidenced by certificates registered in the name of the Participant and bearing an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. The Company shall retain physical possession of any such certificate, and each Participant awarded Restricted Stock shall deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock for so long as the Restricted Stock is subject to a risk of forfeiture. (c) The Committee shall grant Deferred Units upon the election of a Participant to receive Deferred Units in lieu of Restricted Stock as provided in paragraph (a) of this Section 3.3. Interest on Deferred Units shall be calculated daily and credited monthly. Deferred Units shall be subject to such restrictions as the Committee may impose in its discretion. (d) Except as otherwise provided in paragraph (g) of this Section 3.3 or paragraph (b) or (c) of Section 4.1 hereof, Restricted Stock and Deferred Units awarded to a Participant under the Plan shall vest as follows: (i) Restricted Stock and Deferred Units awarded to Messrs. Franke and Sveen shall vest (A) in the case of Restricted Stock and Deferred Units awarded as an Initial Grant, in fourteen (14) equal quarterly installments commencing on the date of the Public Offering, and thereafter on the first day of each successive fiscal quarter, and (B) in the case of all other grants, in equal quarterly installments commencing on the Effective Date of the grant, and thereafter on the first day of each successive fiscal quarter, and ending on the date that the final quarterly installment of Restricted Stock and Deferred Units under the Initial Grant vest; and (ii) Restricted Stock and Deferred Units awarded to all other Participants shall vest in eighteen (18) equal quarterly installments commencing (A) in the case of Restricted Stock and Deferred Units awarded as an Initial Grant, on the date of the Public Offering, and thereafter on the first day of each successive fiscal quarter, and (B) in the case of all other grants, on the Effective Date of the grant, and thereafter on the first day of each successive fiscal quarter. Except as expressly contemplated by the provisions of this Plan or the Employment Agreements, the Committee shall not -13- 15 have discretion to shorten the vesting schedule for Initial Grants set forth in this paragraph (d). (e) Commencing on the Effective Date of an Award of Restricted Stock, and, unless forfeited pursuant to paragraph (g) of this Section 3.3, during the period in which such shares remain unvested, a Participant who has been awarded shares of Restricted Stock shall be entitled to receive Dividend Equivalents with respect to unvested shares of Restricted Stock, and shall have all other rights of a stockholder with respect to such shares, including, but not limited to, the right to vote (in person or by proxy) such shares at any meeting of the stockholders of the Company. (f) Awards of Restricted Stock under the Plan which have not fully vested under the vesting provisions applicable thereto, and the right to vote such stock and receive Dividends Equivalents thereon, may not be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered, and no such sale, assignment, transfer, exchange, pledge, hypothecation or encumbrance, whether made or created by voluntary act of the Participant or of any agent of such Participant or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Company or any of its subsidiaries, or any agent or any custodian holding certificates for such stock pursuant to the provisions of the Plan. (g) Except as otherwise expressly contemplated by the Employment Agreements, in the event of Termination of Employment of a Participant other than by reason of the Participant's death, Disability or Retirement, all shares of Restricted Stock and all Deferred Units, Dividend Equivalents and accrued interest on Deferred Units awarded to such Participant that have not fully vested on the date of Termination of Employment shall be forfeited by such Participant and neither the Participant nor any successors, heirs, assigns or personal representatives of such Participant shall have any rights or interest in such shares, Deferred Units, Dividend Equivalents or accrued interest on Deferred Units, and the Participant's name shall be deleted from the list of the Company's stockholders with respect to such shares. If Termination of Employment is by reason of the death, Disability or Retirement of the Participant, all restrictions and risk of forfeiture with respect to Restricted Stock and Deferred Units that have not fully vested on the date of Termination of Employment shall lapse and all such shares of Restricted Stock and all Deferred Units, and all Dividend Equivalents and accrued interest on Deferred Units, shall become fully and irrevocably vested. -14- 16 IV. OTHER PROVISIONS 4.1 Adjustments Upon Corporate Changes. (a) Without limiting the provisions of subsection (b) or (c) of this Section 4.1, in the event that (i) the outstanding shares of Common Stock are increased or decreased as a result of a transaction (other than a transaction with an employee benefit plan of the Company or any Nuveen Subsidiary) in which shares of Common Stock are issued by the Company for less than their Fair Market Value or are reacquired by the Company for more than their Fair Market Value, (ii) the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or securities of the Company upon a reorganization, merger, recapitalization, reclassification, stock split, reverse stock split, stock dividend, stock consolidation or otherwise, or (iii) the Company makes any extraordinary distribution of cash or property on the Common Stock, the Committee shall make an appropriate and proportionate adjustment in the number and kind of shares reserved and available for issuance under the Plan, the Non-Qualified Stock Options, Deferred Units and Dividend Equivalents theretofore awarded, and the Restricted Stock theretofore awarded (if holders of Restricted Stock would not otherwise be treated substantially the same as other shareholders). (b) Notwithstanding any other provision of this Plan, in the event of a St. Paul Disposition, a portion of the shares of Restricted Stock and Deferred Units awarded as Initial Grants which remain unvested as of the date of the St. Paul Disposition shall fully and immediately vest. The number of shares of Restricted Stock and Deferred Units that will vest immediately upon the St. Paul Disposition (the "Accelerated Portion") shall equal the product of (i) the total number of shares of Restricted Stock and Deferred Units awarded to the Participant in the Initial Grant, multiplied by (ii) a fraction, the numerator of which shall equal the number of shares of Common Stock sold by the St. Paul Entity in the St. Paul Disposition, and the denominator of which shall equal the total number of shares of Common Stock owned by St. Paul, directly or indirectly, immediately prior to the Public Offering (before giving effect to any Initial Grants hereunder). The Accelerated Portion shall be deducted ratably from each unvested installment remaining under the regular vesting schedule for such Restricted Stock and Deferred Units on the date of the St. Paul Disposition. (c) Notwithstanding any other provision of the Plan, in the event of a Change in Control, unless the right -15- 17 to accelerated vesting, the lapse of restrictions or risk of forfeiture, or accelerated delivery or receipt of cash provided for herein is waived or deferred by a Participant by written notice to the Company delivered prior to the Change in Control, all restrictions and risks of forfeiture on Awards (other than those imposed by law or regulation) shall lapse, all deferral or vesting periods relating to Awards shall immediately expire, and (i) all unexercised Options shall become immediately and fully exercisable; (ii) all shares of Restricted Stock not previously vested shall vest immediately; and (iii) all Deferred Units not previously vested or paid out shall immediately vest and be paid over to the Participant entitled thereto. (d) The Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards, restriction periods and deferral periods in recognition of unusual or nonrecurring events affecting the Company or any Nuveen Subsidiary or the financial statements of the Company or any Nuveen Subsidiary, or in response to changes in applicable laws, regulations, or accounting principles; provided, however, that no such modification shall be made to the detriment of a Participant with respect to any Award previously granted. 4.2 Rights of Participants and Beneficiaries. (a) Nothing contained in the Plan (or in any documents evidencing an Award) shall confer upon any Participant any right to continue in the employ of his or her Employer or constitute any contract or agreement of employment or interfere in any way with the right of such Employer to reduce such Participant's compensation from the rate in effect at the time of an Award or to terminate such Participant's employment with or without cause, but nothing contained herein or in any document evidencing an Award shall affect any other contractual rights of a Participant. No Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. (b) All settlements of Awards shall be made hereunder only to the Participant or his or her Beneficiary entitled thereto pursuant to the Plan. Neither the Company nor any Nuveen Subsidiary shall be liable for the debts, contracts, or engagements of any Participant or his or her Beneficiary, and rights relating to Awards under this Plan may not be taken in execution by attachment or garnishment, or by any other legal or equitable proceeding while in the hands of an Employer; nor shall any Participant or his or -16- 18 her Beneficiary have any right to assign, pledge or hypothecate any benefits or rights hereunder. (c) Except as provided in Section 3.3(e), no Award shall confer on any Participant any of the rights of a shareholder of the Company (including any right to receive dividends) unless and until shares of Common Stock are registered in the name of such person in connection with such Award. (d) No fractional shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. 4.3 Governing Law. This Plan and documents evidencing Awards or rights relating to Awards shall be construed, administered and governed in all respects under and by the laws of the State of Delaware. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective. 4.4 Withholding. The Company shall have the right to deduct any sums that federal, state, local or foreign tax laws may require to be withheld with respect to Awards, or settlement of Awards. Subject to the rules and regulations of the Committee, this authority shall permit (but shall not obligate) the Company to withhold and to make cash payments in respect thereof in satisfaction of a Participant's tax obligations, including tax obligations in excess of mandatory withholding requirements (but not in excess of the maximum marginal tax rate). The Company may require, as a condition to issuing or delivering shares of Class A Stock or cash in settlement of Awards, that the Participant pay to the Company any sums that may be required to satisfy any withholding tax applicable to the settlement of such Awards. Except as contemplated by the preceding sentence, the Company shall have no obligation to advise any Participant of the existence of any tax or the amount which the Company will be required to withhold. -17- 19 4.5 Amendment and Termination of Plan and Awards. Notwithstanding anything herein to the contrary, the Board of Directors may, with the consent of a majority of the Class B Directors, at any time and from time to time, terminate or suspend the Plan or amend or modify any of its provisions and the terms and provisions of any Awards theretofore made to Participants which have not been settled; provided, however, that any such termination, suspension, amendment, or modification of the Plan shall be subject to the approval of the Company's stockholders within one year after such Board action if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Common Stock may be listed or quoted, and provided, further, that, without the consent of an affected Participant, no termination, suspension, amendment, or modification of the Plan or any outstanding Award may impair the rights of such Participant under any Award theretofore granted. Notwithstanding the foregoing, the provisions of Section 4.1(c) of the Plan shall not be amended in any respect following a Change in Control. No Awards may be granted during any suspension of the Plan or after termination of the Plan. 4.6 Unfunded Status of Awards. The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Company's obligations under the Plan to deliver cash, shares of Common Stock, other Awards, or other property pursuant to any Award or to provide other benefits, which trusts or other arrangements shall be consistent with the "unfunded" status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of any trust established under the Plan may be authorized to dispose of trust assets and reinvest proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law. 4.7 Restrictions Under Rule 16b-3 under the Exchange Act. (a) Unless a Participant could otherwise transfer an equity security, derivative security, or shares issued upon exercise of a derivative security granted under the -18- 20 Plan without incurring liability under Section 16(b) of the Exchange Act, (i) an equity security issued under the Plan shall be held for at least six months from the date of acquisition, and (ii) with respect to a derivative security issued under the Plan, at least six months shall elapse from the date of acquisition of the derivative security to the date of disposition of the derivative security (other than upon exercise or conversion) or its underlying equity security. (b) Awards which constitute derivative securities shall not be transferable by a Participant except by will or the laws of descent and distribution (or to a Beneficiary in the event of a Participant's death) or, if then permitted under Rule 16b-3, pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder, and, if then required by Rule 16b-3, shall be exercisable during the lifetime of a Participant only by such Participant or his or her guardian or legal representative. (c) It is the intent of the Company that this Plan comply in all respects with Rule 16b-3 under the Exchange Act in connection with any Award granted to a person who is subject to Section 16 of the Exchange Act. Accordingly, if any provision of this Plan or any agreement relating to an Award does not comply with the requirements of Rule 16b-3 as then applicable to any such person, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements in order to prevent such person from incurring liability under Section 16(b) of the Exchange Act. 4.8 Effective Date. This Plan shall be effective as of April 13, 1992 and will remain in effect until such time as action may be taken to terminate or suspend the Plan pursuant to Section 4.5, or until such time as no shares remain reserved and available for issuance and the Company has no further obligation with respect to any Award granted under the Plan. -19- EX-2 3 STOCK OPTION AGREEMENT 1 STOCK OPTION AGREEMENT (NON-QUALIFIED STOCK OPTION) THIS AGREEMENT, made as of the 27th day of May, 1992, between The John Nuveen Company, a Delaware corporation having offices at 333 West Wacker Drive, Chicago, Illinois 60606 (hereinafter, the "Company"), and Timothy R. Schwertfeger an employee of the Company or one of its subsidiaries (hereinafter, the "Employee"). W I T N E S S E T H : WHEREAS, the Board of Directors of the Company is of the opinion that the interest of the Company and its subsidiaries will be advanced by providing an incentive to officers and key employees, upon whom the sustained growth of the Company and its subsidiaries will depend in large measure, to enhance the value of the Company for the benefit of its stockholders, and thereby strengthen the mutuality of interests between such employees and the Company's stockholders; and WHEREAS, the Board of Directors believes that the grant of non-qualified stock options to such employees to enable them to acquire stock ownership in the Company will stimulate the efforts of such employees and strengthen their desire to remain with the Company and its subsidiaries; and WHEREAS, pursuant to stockholder approval, the Company has established its 1992 Special Incentive Plan (the "Plan"); and WHEREAS, pursuant to the Plan, the Board of Directors has appointed a committee (the "Committee") to administer the Plan; and WHEREAS, the Committee has determined to grant the Employee the stock option provided for herein; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth and other good and valuable consideration, the parties hereto hereby enter into a Stock Option Agreement (hereinafter, this "Agreement") which constitutes a non-qualified stock option granted to the Employee upon the following terms and conditions: 1. The Company hereby grants to the Employee the right and option to purchase all or any part of an aggregate of 220,000 shares of the Company's Class A Common Stock, par value $.01 per share (hereinafter, the "Class A Common Stock"), at a purchase price of $18 per share, subject to the terms and conditions of this Agreement and the Plan, a copy of which is included as Exhibit A hereto and the terms of which are incorporated herein by reference. The number of shares subject to this option are subject to adjustment as set forth in Paragraph 10 of this Agreement. 2. This option shall have a ten (10) year term commencing on the date of this Agreement, and expiring at the end of such ten-year period, subject, however, to earlier termination as provided in Paragraph 5 of this Agreement. 2 3. This option shall become exercisable with respect to the shares of Class A Common Stock covered thereby in eighteen (18) equal quarterly installments, with the first such installment becoming exercisable on the date of this Agreement, and subsequent installments becoming exercisable on the first day of each successive fiscal quarter thereafter. Any shares that are not purchased on an applicable installment date may be purchased at any time thereafter prior to the final expiration of this option. No partial exercise of this option may be for less than 1000 shares or the number of shares still remaining subject to the option, whichever is less. 4. Notwithstanding the provisions of paragraph 3 of this Agreement, in the event of a change in Control of the Company (as defined in the Plan), this option shall be fully and immediately exercisable with respect to the shares of Class A Common Stock covered thereby. 5. This option shall be exercisable after the termination of the employment of the Employee with the Company and its subsidiaries only to the extent provided in the Plan or in the Employment Agreement, dated as of the closing date of the Public Offering, between the Company and the Employee. 6. This option may be exercised only by the Employee, by a legal representative upon the incapacity of the Employee, and after the Employee's death, by his Beneficiary, and not otherwise. 7. This option (or any portion thereof) may be exercised only by giving written notice thereof to the secretary of the Company, specifying the number of shares of Class A Common Stock to be purchased and accompanied by payment of the aggregate exercise price for the number of shares purchased. Such payment may be made either (i) in cash or by check, bank draft or money order payable to the order of the Company, or (ii) through the delivery of previously acquired shares of Class A Common Stock owned by the Employee, to the extent that such payment does not require the delivery of a fractional share of such previously acquired Class A Common Stock, and provided that, if the Employee is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, such previously acquired shares have been held by the Employee for at least six (6) months, or (iii) a combination of (i) or (ii). For purposes of the preceding sentence, previously acquired shares of Class A Common Stock shall be valued at the average of the high and low sales prices of the Class A Common Stock on the New York Stock Exchange Composite Tape as of the date of exercise. Such exercise shall be effective upon receipt by the Secretary of such written notice and payment. Neither the Employee nor his legal representative shall be, or have any of the rights or privileges of, a shareholder of the Company in respect of any of the shares to be purchased on the exercise of any part of this option unless and until certificates representing such shares shall have been delivered. 8. The difference between the purchase price of the shares of Class A Common Stock acquired pursuant to exercise of this option and the fair market value of such shares on the date of exercise shall be treated as compensation for services rendered by the Employee for purposes of income tax withholding. The Employee shall pay to the Company for retransmittal to federal and, if applicable, state tax authorities, an amount equal to the amount required to be withheld; if the Employee does not do so, the Company shall withhold from amounts due to the Employee an amount of money equal to the withholding applicable to such compensation. 3 9. This option and the rights and privileges conferred by this Agreement shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) except by will or the laws of descent and distribution and shall not be subject to execution, attachment or similar process. 10. In the event that (i) the outstanding shares of Common Stock of the Company are increased or decreased as a result of a transaction (other than a transaction with an employee benefit plan of the Company or any of its subsidiaries) in which shares of Common Stock are issued by the Company for less than their Fair Market Value (as defined in the Plan) or are reacquired by the Company for more than their Fair Market Value, (ii) the outstanding shares of Common Stock of the Company are changed into or exchanged for a different number or kind of shares or securities for the Company upon a reorganization, merger, recapitalization, reclassification, stock split, reverse stock split, stock dividend, stock consolidation or otherwise, or (iii) the Company makes any extraordinary distribution of cash or property on the Common stock, the Committee shall make an appropriate and proportionate adjustment in the number and kind of shares reserved and available for issuance under this option in order to preserve the Employee's proportionate interest. 11. If at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of the shares covered by this option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of this option or the purchase of shares hereunder, this option shall not be exercised in whole or in part unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Company shall make reasonable efforts to take all such steps as may be required by law and applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Class A Common Stock may then be listed, in connection with shares subject to this option. 12. The Employee agrees that he will not dispose of any securities acquired by him upon the exercise of this option otherwise than (i) on a national securities exchange at the then prevailing market price without the payment of underwriting commissions or discounts other than normal brokerage commissions, or (ii) in such other manner that he will not be deemed an "underwriter" of such securities for purposes of the Securities Act of 1933, as amended. 13. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 333 West Wacker Drive, Chicago, IL 60606, and any notice to be given to the Employee shall be addressed to him at his residence stated above or as it may hereafter appear on the employment records of the Company or its subsidiaries, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given if and when enclosed in a properly sealed envelope addressed as aforesaid, registered and deposited, postage and registry fee prepaid, in a post office or branch post office regularly maintained by the United States Government. 14. Nothing herein contained shall affect the right of the Employee to participate in and receive benefits under and in accordance with the then current provisions of any pension, profit-sharing, incentive compensation, insurance or other employee benefit plan or program of the Company or any of its subsidiaries. 4 15. Nothing herein contained shall affect the right of the employing company to retire the Employee at any time pursuant to its retirement rules or otherwise to terminate the Employee's services, responsibilities, duties and authority to represent such company at any time for any reason whatsoever. 16. This Agreement shall be binding upon and inure to the benefit of the parties hereto and any successors to the business of the Company, but this Agreement shall not be assignable by the Employee. 17. The Committee may, in its sole and absolute discretion, upon the written request of the Employee, grant an option in substitution for, or upon the cancellation or surrender of, this option upon such terms and conditions as may be specified by the Committee at the time such substitute option is granted without regard to the price, period of exercise or any other terms or conditions set forth in this Agreement, the grant of such substitute option, this Agreement and all of the Employee's and all of the Company's obligations hereunder shall terminate. 18. The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decisions shall be binding and conclusive upon the Employee and his legal representative in respect of any questions arising from the Plan or this Agreement. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date and year first above written. THE JOHN NUVEEN COMPANY By /S/ Richard J. Franke ------------------------- Chairman By /S/ James J. Wesolowski ------------------------- Secretary /S/ Timothy R. Schwertfeger --------------------------- Employee Social Security Number ###-##-#### --------------------------- EX-3 4 EMPLOYMENT AGREEMENT 1 Execution Copy EMPLOYMENT AGREEMENT AGREEMENT dated as of May 27, 1992, by and between The John Nuveen Company, a Delaware corporation (the "Corporation"), and Timothy R. Schwertfeger (the "Executive"). IN CONSIDERATION OF the premises and mutual covenants herein contained, and other good and valuable consideration, the Corporation and the Executive agree as follows: 1. Employment. The Corporation shall employ the Executive, and the Executive agrees to serve as an executive of the Corporation, during the Employment Period (as hereinafter defined), in such capacities and upon such conditions as are hereinafter set forth. 2. Definitions. (a) "Nuveen Incentive Plan" shall mean the Nuveen 1992 Special Incentive Plan, effective as of April 13, 1992. (b) "Bonus Plan" shall mean the Nuveen Annual Cash Bonus Plan, effective as of April l, 1992. (c) "Cause" shall mean (i) the willful engaging by the Executive in conduct which the Executive knows, or has substantial reason to believe, is illegal to the extent of a felony violation (or the equivalent seriousness under laws other than those of the United States) and which has effects on the Corporation or the Executive materially injurious to the Corporation; (ii) any act or acts of serious dishonesty or gross misconduct which result in material damage to the Corporation or its business or reputation or which the Board of Directors of the Corporation reasonably determines do materially and adversely affect the value, reliability or performance of the Executive to the Corporation; (iii) the willful and continued failure by the Executive to perform his obligations under this Agreement (which may include any 2 sustained and unexcused absence of the Executive from the performance of his duties under this Agreement, which absence has not been certified in writing as due to physical or mental illness or Disability), after a written demand for performance has been delivered to the Executive by the Board of Directors identifying the manner in which the Executive has failed to substantially perform his duties. For purpose of this paragraph, no act or failure to act on the Executive's part shall be considered "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that such action or omission was in, or not opposed to, the best interests of the Corporation. Any act or failure to act by the Executive based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Corporation or based upon the advice of counsel for the Corporation shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Corporation. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated with Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of a majority of the entire Board of Directors of the Corporation at a meeting of the Board called and held after reasonable notice to the Executive and at which the Executive has had an opportunity, together with his counsel, to be heard before such Board, finding that in the good faith opinion of such Board, the Executive was guilty of the conduct set forth above and specifying the particulars thereof in detail. (d) "Code" shall mean the Internal Revenue Code of 1986, as amended. (e) "Constructive Termination" shall mean: (i) without the written consent of the Executive, (A) the assignment to the Executive of any duties materially inconsistent with the Executive's position, authority or responsibilities as contemplated by Section 4 of this Agreement, (B) any other substantial adverse change in such position, including titles, authority or responsibilities, (C) requiring the Executive to be based at any office or location other than that at which the Executive is based on the date of this Agreement, or (D) requiring the Executive to retire before reaching age 65; (ii) any failure by the Corporation to comply with the provisions of this Agreement, other than an immaterial or inadvertent failure which is remedied by -2- 3 the Corporation promptly after receipt of notice thereof given by the Executive; or (iii) the failure by the Corporation to obtain the agreement of a successor to perform this Agreement as contemplated by Section 13(b), provided that the successor has been given written notice of the existence of this Agreement and its terms and an opportunity to assume the Corporation's responsibilities under this Agreement during a period of 10 business days after receipt of such notice. (f) "Deferred Bonus Plan" shall mean the Nuveen Deferred Bonus Plan. (g) "Disability" shall mean the absence (other than an approved leave of absence) of the Executive from the full-time performance of the services required by this Agreement due to a physical or mental impairment, as certified in writing by a physician selected by the Executive and reasonably acceptable to the Corporation, which absence continues for one hundred twenty (120) consecutive days or for one hundred eighty (180) days (whether or not consecutive) during any period of three hundred sixty-five (365) consecutive days. (h) "Public Offering" shall mean the sale to the public by St. Paul on or about May _, 1992 of up to 9,200,000 shares of Class A Common Stock of the Corporation. (i) "Retirement" shall mean the retirement of the Executive from employment with the Corporation upon reaching age 65 or at an earlier date with the approval of the Board of Directors. (j) "St. Paul" shall mean The St. Paul Companies, Inc., a Minnesota corporation. 3. Employment Period. The "Employment Period" shall be the period commencing May 27, 1992, and ending on May 27, 1997. 4. Position and Duties. (a) No Reduction in Position. During the Employment Period, the Executive's position (including titles), authority and responsibilities (including, without limita -3- 4 tion, reporting authority and responsibility) shall be at least commensurate with the position of Executive Vice President. The duties of the Executive shall be as assigned by the Chief Executive Officer of the Corporation from time to time. It is understood that, for purposes of this Agreement, such position, authority and responsibilities shall not be regarded as not commensurate merely by virtue of the fact that the Executive is transferred to a position with an affiliated company or a successor shall have acquired all or substantially all of the business and/or assets of the Corporation as contemplated by Section 13(b) of this Agreement, provided that, in either case, the Executive shall continue to have a position and authority and responsibilities and compensation opportunity with respect to such affiliated company or successor substantially corresponding to that of the Executive with respect to the Corporation prior to such transfer or acquisition. As used in this Agreement, the term "affiliated company means any company controlling, controlled by, or under common control with the Corporation. (b) Business Time. The Executive agrees to devote his full business time during normal business hours to the business and affairs of the Corporation and to use his best efforts to perform faithfully and efficiently the responsibilities assigned to him hereunder, except for -4- 5 (i) time spent in managing the Executive's personal, financial and legal affairs and serving on corporate, civic or charitable boards or committees, in each case if and to the extent such activities do not conflict in any material manner with the performance of such responsibilities, and (ii) periods of vacation and sick leave to which the Executive is entitled in accordance with the Corporation's standard policies for its senior executive officers. It is expressly understood and agreed that the Executive's continuing to serve on any boards or committees on which he was serving or with which he was otherwise associated immediately preceding the date of this Agreement shall be deemed not to interfere with the performance of the Executive's services to the Corporation. (c) Location of Employment. Except in connection with travel reasonably required of the Executive in the performance of his duties and responsibilities, the Corporation shall not, without the Executive's consent, require the Executive to be based at any office or location other than that at which the Executive is based on the date of this Agreement. -5- 6 5. Compensation. (a) Base Salary. During the Employment Period, the Executive shall receive a base salary (the "Base Salary"), payable in equal installments on the 15th day and the last day of each month, at an annual rate of $250,000. The Corporation shall review the Base Salary annually and in light of such review may, in the discretion of the Board of Directors of the Corporation (but shall not be obligated to) increase (but not decrease) the Base Salary taking into account any change in the Executive's responsibilities, increases in compensation of other executives with comparable responsibilities, the performance of the Executive and other pertinent factors, including any other forms of compensation to which the Executive is then entitled under the executive compensation plans and programs of the Corporation, and such adjusted Base Salary shall then constitute the "Base Salary" for purposes of this Agreement. (b) Annual Bonus. In addition to the Base Salary, the Executive shall be granted for each fiscal year of the Corporation ending during the Employment Period the opportunity to earn an annual bonus ("Annual Bonus") in accordance with the terms and conditions of the Corporation's Bonus Plan. If the Executive is eligible to do so under the Deferred Bonus Plan, the Executive may defer all or any portion of the Annual Bonus in accordance with the terms and conditions of the Deferred Bonus Plan. -6- 7 (c) Executive Compensation Plans. In addition to the Base Salary and Annual Bonus payable as hereinabove provided, during the Employment Period, the Executive shall (subject to the terms and conditions of such plans and programs as they may be in effect from time to time) be eligible to participate in all executive compensation plans and programs of the Corporation, including, without limitation, the Nuveen Incentive Plan and any other incentive compensation or equity based compensation plan or program. (d) Benefit Plans. During the Employment Period, the Executive, the Executive's spouse and their eligible dependents (as defined in, and to the extent permitted by, the applicable plan), as the case may be, shall be entitled to participate in or be covered under all medical, dental, disability, group life, accidental death and travel accident insurance plans and programs made available to executives of the Corporation and its affiliated companies (at the most favorable level of participation and providing highest levels of benefits available to the Executive) as in effect (i) on the date hereof, or (ii) if more favorable to the Executive, as in effect at any time thereafter with respect to the Executive or other executives with comparable responsibilities. (e) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement -7- 8 for all reasonable expenses incurred by the Executive in connection with the Corporation's business (including, without limitation, all travel expenses incurred in connection with the Corporation's business and monthly fees for approved club memberships) in accordance with the policies and procedures of the Corporation as in effect (i) on the date hereof, or (ii) if more favorable to the Executive, as in effect at any time thereafter with respect to the Executive or other executives with comparable responsibilities. (f) Vacation and Fringe Benefits. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the Corporation's standard policy for its senior executive officers and fringe benefits in accordance with the policies of the Corporation as in effect (i) on the date hereof, or (ii) if more favorable to the Executive, as in effect at any time thereafter with respect to Executive or other executives with comparable responsibilities. (g) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and location and with furnishings and other appointments, and to secretarial and other assistance, at least as favorable as that provided to the Executive (i) on the date hereof, or (ii) if more favorable to the Executive, as provided at any time thereafter with respect -8- 9 to the Executive or other executives with comparable responsibilities. 6. Termination. (a) Death, Disability or Retirement. This Agreement shall terminate automatically upon the Executive's death or Retirement. In the event of the Executive's Disability, the Corporation may terminate this Agreement by giving the Executive written notice of its intention to terminate his employment, whereupon this Agreement shall terminate on the 3Oth day after the Executive's receipt of such notice unless, within 30 days after receipt of such notice, the Executive shall have returned to the full-time performance of his duties. (b) Voluntary Termination. Notwithstanding anything in this Agreement to the contrary, the Executive may, upon not less than 30 days' written notice to the Corporation, voluntarily terminate his employment for any reason, provided that any termination by the Executive pursuant to Section 6(d) on account of Constructive Termination or on account of Retirement under Section 6(a) shall not be treated as a voluntary termination for purposes of this Agreement. (c) Cause. The Corporation may terminate the Executive's employment for Cause. (d) Constructive Termination. The Executive may terminate his employment for Constructive Termination. -9- 10 (e) Notice of Termination. Any termination by the Company for Cause or by the Executive for Constructive Termination shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 14(f). For purposes of this Agreement, a "Notice of Termination" means a written notice given, in the case of a termination for Cause, within ninety (90) days of the Corporation's having actual knowledge of the events giving rise to such termination, and in the case of a termination for Constructive Termination, within ninety (90) days of the Executive's having actual knowledge of the events giving rise to such termination, and which in either case (i) indicates the specific termination provision of this Agreement relied upon, and (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. The failure by the Executive to set forth in the Notice of Termination all facts and circumstances which contribute to a showing of Constructive Termination shall not waive or prejudice any right of the Executive hereunder or preclude the Executive from asserting any such fact or circumstance in enforcing his rights hereunder. (f) Date of Termination. For the purpose of this Agreement, the term "Date of Termination" means (i) in the case of a termination on account of Disability, the 30th day -10- 11 after the Executive receives the Corporation's notice of termination, (ii) in the case of the Executive's death, Retirement or voluntary termination, the actual date on which the Executive's employment terminates during the Employment Period, and (iii) in the case of a termination by the Corporation for Cause or by the Executive for Constructive Termination, the date of receipt of the Notice of Termination by the other party. 7. Obligations of the Corporation upon Termination. Upon termination of this Agreement the Corporation shall have the following obligations (including, where applicable, the obligation to pay the cost of all benefits provided to the Executive and the Executive's family under this Section 7, and under any then-existing employee benefit plan of the Corporation in which the Executive was participating, except for contractual employee contributions required under any such plan in which the Executive participates). (a) Death, Disability or Retirement. If this Agreement is terminated during the Employment Period by reason of the Executive's death, Disability or Retirement, the Corporation shall pay or provide to the Executive or his legal representatives the following and (except as provided in Sections 10, 11 and 13 hereof) shall have no further -11- 12 obligations to the Executive or his legal representatives under this Agreement: (i) the Base Salary otherwise payable under Section 5(a) through the Date of Termination; (ii) a prorated portion of the Annual Bonus for the current fiscal year (taking into account the nature of the Executive's responsibility and the level of the Executive's bonus participation in the preceding fiscal year), based on the number of days in the current fiscal year of the Corporation preceding the Date of Termination (the "Pro-rated Bonus Obligation"); (iii) any Annual Bonus owed by the Corporation to the Executive for the previous fiscal year but not yet paid and any compensation previously deferred by the Executive under the Deferred Bonus Plan or otherwise (together with any accrued earnings thereon) and not yet paid by the Corporation to the Executive; (iv) any accrued vacation pay for the current year not yet paid by the Corporation to the Executive; and (v) any other amounts or benefits owing to the Executive or to the Executive's beneficiaries in the event of the Executive's death, Disability or Retirement, as the case may be, under the then -12- 13 applicable employee benefit and executive compensation plans and policies of the Corporation, including, without limitation, the full and immediate vesting of all outstanding and previously unvested awards made to the Executive under the Nuveen Incentive Plan as of the Date of Termination. The Pro-rated Bonus Obligation shall be paid to the Executive or his legal representatives as soon as practicable after the close of the fiscal year in which the Date of Termination occurs. Notwithstanding anything in this Agreement to the contrary, (A) in the event of the termination of the Executive's employment because of his death, the Executive's family shall be entitled to receive the most favorable level of benefits available to surviving families of executives of the Corporation and its affiliates with comparable responsibilities under the Corporation's plans, programs and policies relating to family death benefits, if any, in effect on the date hereof, or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death; and (B) in the event of the termination of the Executive's employment because of his Disability, the Executive and the Executive's family shall be entitled to receive the most favorable level of disability and other benefits available to executives with comparable responsibilities and their families in -13- 14 accordance with the plans, programs and policies maintained by the Corporation or its affiliates relating to disability (i) on the date hereof, or (ii) if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter. In addition, in the event of the termination of the Executive's employment because of his Disability, the Executive, the Executive's spouse and their eligible dependents (as defined in, and to the extent permitted by, the applicable plan) shall be entitled, after the Date of Termination until the date the Employment Period otherwise would have terminated, to continue to participate in or be covered under the benefit plans and programs referred to in Section 5(d) or, at the Corporation's option, to receive equivalent benefits by alternate means, at least equal to those provided in accordance with Section 5(d). (b) Cause and Voluntary Termination. If, during the Employment Period, the Executive's employment shall be terminated for Cause as provided in Section 6(c) or voluntarily terminated by Executive as provided in Section 6(b), the Corporation shall pay the Executive the following and (except as provided under Section 11 hereof) shall have no further obligations to the Executive under this Agreement: (i) the Base Salary otherwise payable under Section 5(a) through the Date of Termination; -14- 15 (ii) any Annual Bonus owed by the Corporation to the Executive for the previous fiscal year but not yet paid and any compensation previously deferred by the Executive under the Deferred Bonus Plan or otherwise (together with any accrued earnings thereon) and not yet paid by the Corporation to the Executive; and (iii) any accrued vacation pay for the current year not yet paid by the Corporation. Notwithstanding anything herein or in any other plan or agreement of the Corporation to the contrary, in the event of a termination by the Corporation for Cause or a voluntary termination by the Executive, the Executive shall forfeit the Annual Bonus for the fiscal year in which the Executive's termination of employment occurs and any and all interest in any outstanding awards made to the Executive under the Nuveen Incentive Plan which, as of the Date of Termination, have not otherwise fully vested. (c) Termination by the Corporation other than for Cause or disability (and other than by reason of the Executive's death or Retirement); Termination by the Executive for Constructive Termination. If, during the Employment Period, the Corporation terminates the Executive's employment other than for Cause or Disability (and other than by reason of the Executive's death or -15- 16 Retirement), or the Executive terminates his employment for Constructive Termination, the Corporation shall pay or provide to the Executive the following: (i) Cash Payment. The Corporation shall pay to the Executive in a lump sum in cash within l5 days after the Date of Termination the aggregate of the following amounts: (A) the Base Salary otherwise payable under Section 5(a) through the Date of Termination; (B) an amount equal to the product of (x) the average Annual Bonus paid to the Executive in the last three (3) full fiscal years of the Corporation preceding the Date of Termination (including fiscal years prior to the effective date of this Agreement), multiplied by (y) a fraction, the numerator of which equals the number of days in the current fiscal year of the Corporation preceding the Date of Termination, and the denominator of which is 365; (C) a lump-sum severance payment equal to (1) one-year's Base Salary at the rate in effect under Section 5(a) on the Date of Termination, plus (2) an amount equal to the average of the Annual Bonuses paid to the Executive in the last three full fiscal years of -16- 17 the Corporation preceding the Date of Termination (including fiscal years prior to the effective date of this Agreement); provided, however, that if the number of months otherwise remaining in the Employment Period (as defined in Section 3 hereof) on the Date of Termination is less than twelve, such lump-sum severance payment shall not exceed (x) the sum of the amounts specified in clauses (1) and (2) above, multiplied by (y) a fraction, the numerator of which is the number of months otherwise remaining in the Employment Period and the denominator of which is twelve; and (D) any Annual Bonus owed by the Corporation to the Executive for the previous fiscal year but not yet paid and any compensation previously deferred by the Executive under the Deferred Bonus Plan or otherwise (together with any accrued earnings thereon) and not yet paid by the Corporation to the Executive. (ii) Benefits Continuation. For the period from the Date of Termination to the date the Employment Period otherwise would have ended under Section 3 hereof, the Corporation shall provide for the Executive, the Executive's spouse and their eligible dependents (as defined in the applicable plan), as the case may be, the benefits -17- 18 under the plans and programs referred to in Section 5(d) on the same terms as described in Section 5(d) or, at the Corporation's option, equivalent benefits by alternate means at least equal to those described in Section 5(d); provided, however, that all rights under this Section 7(d)(ii) shall cease immediately upon Executive's violation of his obligations under Section 12(b). (iii) Vesting of Outstanding Awards. Notwithstanding any other provision herein or in any other plan or agreement of the Corporation to the contrary, all outstanding awards made to the Executive under the Nuveen Incentive Plan as of the Date of Termination (including, without limitation, awards of Restricted Stock, Deferred Units, Non-Qualified Stock Options and Dividend Equivalents, as such terms are defined in the Nuveen Incentive Plan) which, as of the Date of Termination, have not fully vested or are otherwise subject to any restriction or risk of forfeiture shall immediately and irrevocably vest and all restrictions on such awards shall lapse; and, in the case of Deferred Units or any other award payable in cash, shall forthwith be paid -18- 19 over to the Executive, with interest accrued to the Date of Termination. Subject to the performance of its obligations under this Section 7(c), the Corporation shall have no further obligations to the Executive under this Agreement in respect of any termination by the Executive for Constructive Termination or by the Corporation other than for Cause or Disability, except to the extent expressly provided under Sections 10, 11 and 13 hereof or under any of the plans referred to in Section 5(c) or 5(d) hereof. (d) Time and Manner of Payment. Except as otherwise expressly provided in this Agreement, all cash amounts owed by the Corporation in accordance with the provisions of this Section 7 shall be paid in a lump-sum payment within 30 days of the Date of Termination, and all other amounts and benefits owed by the Corporation shall be paid or distributed to the Executive in the manner specified under the applicable compensation plan or benefit plan or policy. 8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies for which the Executive may qualify. All amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or -19- 20 program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program. 9. Full Settlement. Except as contemplated by Section 7(d)(ii) and Section 12(b), the Corporation's obligation to make the payments provided for under this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against the Executive or others whether by reason of the subsequent employment of the Executive or otherwise. In no event shall the Executive be obligated to seek other employment in mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. In the event that the Executive shall in good faith give a Notice of Termination for Constructive Termination and it shall thereafter be determined that Constructive Termination did not take place, the employment of the Executive shall be deemed to continue in good standing as if the Notice of Termination had not been given. 10. Gross-Up Payment. (a) In the event that (i) the Executive's employment is terminated by the Corporation other than for Cause or Disability or by the Executive for Constructive Termination, or (ii) a Change in Control (as defined in the Nuveen Incentive Plan) occurs, and, in -20- 21 connection with either event, any payment or other benefit (including, without limitation, the vesting of an option or other non-cash benefit or property) paid or provided to the Executive by the Corporation (whether pursuant to the terms of this Agreement (other than this Section 10) or any other plan, arrangement or agreement with the Corporation or any affiliated company) (a "Payment") is subject to the tax (the "Excise Tax") imposed by section 4999 of the Code (or any similar tax that may be imposed, including any similar state or local tax), the Corporation shall pay to the Executive no later than 10 days after receiving notice from the Executive and at least 30 days before the due date (without regard to any extensions thereof) for payment of the Excise Tax, an additional amount (a "Gross-Up Payment") which, when added to the Payment and reduced by the sum of (x) the amount of the Excise Tax imposed on both the Payment and the Gross-Up Payment and (y) the amount of all federal, state and local income taxes imposed on the Gross-Up Payment at the maximum marginal rates then in effect, results in the receipt by the Executive of an amount equal to the amount of the Payment. (b) In the event that the Executive's actual Excise Tax liability in connection with any Payment or Gross-Up Payment is subsequently determined to be less than the amount of Excise Tax for which the Corporation has made a Gross-Up Payment pursuant to paragraph (a), the Executive shall repay to the Corporation, at the time the amount of -21- 22 the Executive's actual Excise Tax liability is finally determined, the amount of the Gross-Up Payment attributable to such overpayment, plus interest on the amount of such overpayment at the prime rate of interest as reported by The First National Bank of Chicago or a comparable bank. In the event that the Executive's actual Excise Tax liability in connection with any Payment or Gross-Up Payment is subsequently determined to be greater than the amount of Excise Tax for which the Corporation has made a Gross-Up Payment pursuant to paragraph (a), the Corporation shall make an additional Gross-Up Payment in respect of such underpayment (and in respect of any interest and penalties payable by the Executive with respect to such underpayment) at the time the amount of the Executive's actual Excise Tax liability is finally determined and paid. 11. Legal Fees and Expenses. In the event that a claim for payment or benefits under this Agreement is disputed, the Corporation shall pay all reasonable attorney's fees and expenses incurred by the Executive in pursuing such claim, provided that Executive is successful as to at least part of the disputed claim by reason of litigation, arbitration or settlement. 12. Special Obligations of the Executive. (a) Proprietary Information. Except while employed by the Corporation or its affiliates and in accordance with the performance of his duties as such employee, -22- 23 at no time shall the Executive, directly or indirectly, make use of or disclose or divulge to any third party any information or data of a proprietary, confidential or secret nature concerning the Corporation and its affiliates, or their business or affairs or the business or affairs of their clients or customers or others with whom the Corporation or its affiliates have business relationships. (b) Noncompetition. During the Employment Period and for a period of two (2) years following the date of termination of the Executive's employment with the Corporation, the Executive (i) shall not engage or aid others to engage, directly or indirectly, in any activities with respect to, or have an interest exceeding 1% of the total equity interest in, a business similar to or competitive with any business of the Corporation or any of its subsidiaries or controlled affiliates within the geographical area in which they conduct business, and (ii) shall not directly or indirectly solicit any employees of the Corporation or an affiliated company to leave their employment; provided, however, that the prohibition specified in clause (i) shall not apply if the Executive's employment is terminated by the Executive on account of Constructive Termination or by the Corporation other than for Cause or Disability. In the event that this Section 12(b) is determined to be unenforceable in part, it shall be construed to be enforceable as permitted by law. -23- 24 (c) The Executive acknowledges that any breach of either Section 12(a) or 12(b) of this Agreement will cause the Corporation irreparable harm for which there is no adequate remedy at law, and, as a result, the Corporation shall be entitled to the issuance by a court of competent jurisdiction of an injunction, restraining order or other equitable relief restraining the Executive from committing or continuing any such violation. Any right to obtain an injunction, restraining order or other equitable relief hereunder shall not be deemed a waiver of any right to assert any other remedy the Corporation may have at law or in equity. (d) Resignation of Offices. Upon termination of employment for any reason, the Executive shall immediately resign from all directorships and officerships held in the Corporation and any company affiliated with the Corporation, including, without limitation, investment companies for which the Corporation or any of its affiliates acts as an investment advisor. 13. Successors. (a) This Agreement is personal to the Executive and, without the prior written consent of the Corporation, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's heirs and legal representatives. -24- 25 (b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors. The Corporation shall require any successor to all or substantially all of the business and/or assets of the Corporation, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Corporation would be required to perform if no such succession had taken place. 14. Miscellaneous. (a) Except to the extent that the terms of this Agreement confer benefits that are more favorable to the Executive than are available under any other employee benefit or executive compensation plan of the Corporation in which the Executive is a participant, the Executive's rights under any such employee (including executive) benefit plan or executive compensation plan shall be determined in accordance with the terms of such plan (as it may be modified or added to by the Corporation from time to time). (b) In the event of any inconsistency between the terms of this Agreement and the terms of any other employee benefit or executive compensation plan or program of the Corporation in which the Executive is a participant, the terms of this Agreement shall govern, except to the extent -25- 26 that the terms of such other plan or program are more favorable to the Executive. (c) This Agreement constitutes the entire understanding between the Executive and the Corporation relating to employment of the Executive by the Corporation and its subsidiaries and supersedes and cancels all prior agreements and understandings with respect to the subject matter of this Agreement and such other written agreements. The Executive shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by the Executive under such prior agreements and understandings. (d) Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, applied without reference to principles of conflict of laws. (e) Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (f) Notices. All notices and other communications hereunder shall be in writing and shall be given by -26- 27 hand-delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: at the address listed on the last page hereof If to the Corporation: its general counsel at the corporate headquarters address of the Corporation or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (g) Tax Withholding. The Corporation may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (h) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (i) Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. -27- 28 IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Corporation has caused this Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed and attested by its Secretary, all as of the day and year first above written. ATTEST THE JOHN NUVEEN COMPANY BY - ------------------------------ --------------------- Secretary Title: President (Seal) EXECUTIVE: ----------------------- Address: 175 E. Delaware ------------------------ Chicago, Illinois 60611 ------------------------ -28- -----END PRIVACY-ENHANCED MESSAGE-----