<PAGE> 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).
<PAGE> 2
SCHEDULE 13D
CUSIP No. 478035 10 8 Page 2 of Pages
<TABLE>
<S><C>
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
</TABLE>
*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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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:
<TABLE>
<CAPTION>
Number of Number of Option
Restricted Shares Shares Becoming
Date Becoming Vested Exercisable
--------------- ----------------- ----------------
<S> <C> <C>
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
</TABLE>
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.
<PAGE> 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.
<PAGE> 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
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit
----------- --------------------------------------
<S> <C>
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
</TABLE>
<PAGE> 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.)
<PAGE> 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
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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
###-##-####
---------------------------
<PAGE> 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
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
