<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE JOHN NUVEEN COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[NUVEEN LOGO]
May 22, 1996
Dear Shareholder:
We are pleased to invite you to attend the 1996 Annual Meeting of Shareholders
of The John Nuveen Company. This year's meeting has a special significance for
the two of us: it will mark the completion of the transition in your Company's
senior management as we retire after a combined tenure of nearly 70 years with
the Company. We will be succeeded by Timothy R. Schwertfeger, who will become
Chairman and Chief Executive Officer, and Anthony T. Dean, who will be President
and Chief Operating Officer. We have been working closely with Tim and Tony for
a number of years to plan for this orderly and smooth succession; we are proud
of this new team and have every confidence in their abilities to lead your
Company in the future.
As part of this management transition and to reinforce and strengthen the
alignment of interests between shareholders and key management personnel, your
board has approved and recommended to you for your approval some important
revisions to the Company's executive incentive compensation plans. These revised
plans are described in more detail in the attached proxy statement, but we want
you to understand that senior management will be exchanging a significant
portion of annual cash compensation for equity awards whose ultimate value will
be a function of your Company's stock price performance. This new compensation
structure will provide important additional incentive to achieve superior
performance.
Further information about the meeting, the proposed incentive compensation
plans, and other matters to be considered is contained in the formal notice of
annual meeting and proxy statement that follow. It is important that your shares
be represented at this meeting. Whether or not you plan to attend, we hope that
you will sign, date and return your Proxy promptly in the enclosed envelope. If
you later decide to attend the meeting and wish to vote your shares personally,
you may revoke your Proxy at any time before it is exercised.
Very truly yours,
Richard J. Franke Donald E. Sveen
Richard J. Franke Donald E. Sveen
Chairman President
<PAGE> 3
THE JOHN NUVEEN COMPANY
333 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60606
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, JULY 9, 1996
TO THE SHAREHOLDERS OF THE JOHN NUVEEN COMPANY:
Notice is hereby given that the annual meeting of the shareholders of The
John Nuveen Company, a Delaware corporation (the "Company"), will be held in the
6th Floor auditorium of The Northern Trust Company, 50 South LaSalle Street,
Chicago, Illinois, on Tuesday, July 9, 1996, at 10:30 a.m. for the following
purposes:
1. To elect four directors by vote of the holders of the Company's
Class A Common Stock and Class B Common Stock, voting together as a single
class, and four directors by vote of the holders of the Company's Class B
Common Stock, voting as a separate class, to serve until the next annual
meeting and until their successors shall have been duly elected and
qualified.
2. To consider and vote upon the Company's revised incentive
compensation plans:
A. The 1996 Equity Incentive Award Plan; and
B. The Executive Officer Performance Plan.
3. To ratify the selection of KPMG Peat Marwick LLP as independent
auditors for the Company.
4. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on May 20, 1996 are
entitled to notice of and to vote at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE POSTAGE PAID ENVELOPE ENCLOSED
FOR THAT PURPOSE. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED, AND
SHAREHOLDERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE
IN PERSON.
JAMES J. WESOLOWSKI
Secretary
May 22, 1996
<PAGE> 4
THE JOHN NUVEEN COMPANY
333 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60606
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of The John Nuveen Company (the "Company") of proxies to
be voted at the annual meeting of the shareholders of the Company to be held on
July 9, 1996, and at any and all adjournments of such meeting. This Proxy
Statement was initially mailed to shareholders on or about May 23, 1996. The
cost of preparing, printing and mailing this Proxy Statement, the accompanying
notice and the enclosed proxy, and all other costs in connection with the
solicitation of proxies, will be paid by the Company. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to furnish proxy material to the beneficial
owners of the Company's Class A Common Stock of whom they have knowledge and
will reimburse them for their expenses for so doing. Additional solicitation may
be made by letter, telephone or telecopier by officers and employees of the
Company and its affiliates.
At the annual meeting, shareholders will vote on the election of directors,
ratification of the Company's 1996 Equity Incentive Award Plan and its Executive
Officer Performance Plan, and the ratification of the selection of KPMG Peat
Marwick LLP as independent auditors for the Company. All duly executed proxies
received by management prior to the meeting will be voted in accordance with the
choices specified by shareholders on their proxies. If no choice is specified by
a shareholder, the shares of such shareholder will be voted FOR the election of
the four nominees for directors listed in this Proxy Statement that are to be
elected by the holders of the Company's Class A Common Stock and Class B Common
Stock, voting together as a single class, FOR approval of the Company's 1996
Equity Incentive Award Plan and FOR approval of its Executive Officer
Performance Plan, and FOR ratification of the selection of the independent
auditors of the Company. Holders of the Company's Class B Common Stock are
entitled to nominate and elect at the meeting four additional directors as
described in the section entitled "Election of Directors" below. Shareholders
who execute proxies may revoke them at any time before they are voted by filing
with the Company a written notice of revocation, by delivering a duly executed
proxy bearing a later date or by attending the meeting and voting in person.
Proxies submitted by brokers for shares beneficially owned by other persons
may indicate that all or a portion of the shares represented by the proxies are
not being voted with respect to a particular matter. Applicable broker rules may
not permit a broker to vote shares held in street name with respect to such
matter in the absence of instructions from the beneficial owner of the shares.
The shares represented by broker proxies which are not voted with respect to
such matter will not be considered present and entitled to vote with respect to
such matter, although such shares may be considered present and entitled to vote
for other purposes and will count for purposes of determining the presence of a
quorum. If a quorum is present, these shares will not affect the determination
of whether such matter is approved.
As of May 20, 1996, there were issued and outstanding 8,009,827 shares of
Class A Common Stock and 28,560,000 shares of Class B Common Stock. The Class A
Common Stock and the Class B Common Stock are sometimes referred to collectively
herein as the "Common Stock" of the Company. Those persons who were shareholders
of record of each class of Common Stock at the close of business on May 20, 1996
will be entitled to one vote for each share held.
<PAGE> 5
Under the Company's By-laws, a majority of the outstanding shares of the
class or classes entitled to vote on a particular matter and represented in
person or by proxy will constitute a quorum for consideration of such matter at
the annual meeting. Under the Company's Certificate of Incorporation, in the
event that any person or group becomes the beneficial owner (as defined in the
Certificate of Incorporation) of more than 20% of the outstanding shares of
Class A Common Stock, the shares of Class A Common Stock beneficially owned by
such person or group in excess of 20% of the outstanding shares of such class
shall have no voting rights and shall be deducted from the total number of
shares of Class A Common Stock for purposes of determining the number of shares
of Class A Common Stock, or Common Stock, as the case may be, necessary to
constitute a quorum or required to approve a matter submitted for shareholder
approval. To the knowledge of the Company, on May 10, 1996 no person or group
was the beneficial owner of more than 20% of the outstanding shares of Class A
Common Stock.
BENEFICIAL OWNERSHIP OF COMMON STOCK
PRINCIPAL HOLDERS
The following table sets forth the beneficial ownership as of May 20, 1996,
unless otherwise indicated, of the Company's Class A and Class B Common Stock of
each person known by the Company to own beneficially more than 5% of each such
class:
<TABLE>
<CAPTION>
NUMBER
OF SHARES PERCENT OF PERCENT OF TOTAL
BENEFICIALLY CLASS OF CLASS COMMON STOCK
NAME AND ADDRESS OWNED COMMON STOCK OUTSTANDING(1) OUTSTANDING(1)
- ------------------------------- --------------- ------------ -------------- ----------------
<S> <C> <C> <C> <C>
The St. Paul Companies, Inc.
385 Washington Street
St. Paul, MN 55102........... 28,560,000(2) B 100% 77.9%
Ryback Management, Inc.
7711 Carondelet Ave.
Suite 700
St. Louis, MO 63105.......... 1,333,200(3) A 16.6 3.4
John A. Levin
One Rockefeller Plaza
New York, NY 10020........... 891,585(4) A 10.7 2.4
Donald E. Sveen
333 W. Wacker Drive
Chicago, IL 60606............ 832,144(5) A 10.4 2.3
Richard J. Franke
333 W. Wacker Drive
Chicago, IL 60606............ 804,130(6) A 10.0 2.2
Peter Hochfelder
Robert J. Sobel
Mitchell A. Kuflik
277 Park Ave.
26th Floor
New York, NY 10017........... 553,200(7) A 6.9 1.5
Timothy R. Schwertfeger
333 W. Wacker Drive
Chicago, Illinois 60606...... 449,700(8) A 5.6 1.2
Anthony T. Dean
333 W. Wacker Drive
Chicago, Illinois 60606...... 430,600(8) A 5.4 1.2
</TABLE>
(Footnotes continued on following page)
2
<PAGE> 6
(Footnotes continued from previous page)
(1) For the directors and executive officers of the Company, the percentage
of outstanding stock is determined by dividing the total number of shares
beneficially owned, which includes the shares that would be issued upon exercise
of their vested options, by the total number of outstanding shares plus the
additional number of shares that would be outstanding if the options were
exercised.
(2) As reported in a Schedule 13G dated February 11, 1993 filed with the
Securities and Exchange Commission, The St. Paul Companies, Inc. has sole voting
and investment power with respect to 14,880,000 of the shares of Class A Common
Stock listed as beneficially owned and shared voting and investment power (with
St. Paul Fire and Marine Insurance Company, a wholly owned subsidiary of The St.
Paul Companies, Inc.) with respect to 13,680,000 of the shares of Class A Common
Stock, in both cases by virtue of their ownership of Class B Common Stock
convertible into an equal number of shares of Class A Common Stock.
(3) According to a report received on May 20, 1996 for the Lindner Funds,
advised by Ryback Management Corporation, Lindner Growth Fund owned 662,900
shares of Class A Common Stock and Lindner Dividend Fund owned 670,300 shares of
Class A Common Stock of the Company.
(4) John Levin individually, and as President, sole Director and sole
shareholder of John Levin & Co., Inc., has reported that, pursuant to his
personal holdings and those of his investment advisory clients, he has sole
power to vote and dispose of 22,500 shares of the Company's Class A Common
Stock, shared voting power as to 408,100 shares, no voting power as to 460,985
shares, shared dispositive power as to 869,085 shares and beneficially owns
891,585 shares of the Company's Class A Common Stock. The foregoing is based on
the content of an amended Schedule 13G, dated February 10, 1995, as filed with
the Securities and Exchange Commission.
(5) Mr. Sveen has sole voting and investment power with respect to all
shares beneficially owned, other than 321,070 shares of Class A Common Stock
held in a charitable trust of which Mr. Sveen is a trustee with shared voting
and investment power.
(6) Mr. Franke has sole voting and investment power with respect to all
shares beneficially owned, other than 266,556 shares of Class A Common Stock
held in a charitable trust of which Mr. Franke is a trustee with shared voting
and investment power.
(7) Peter A. Hochfelder ("Hochfelder"), Robert J. Sobel ("Sobel"), Mitchell
A. Kuflik ("Kuflik"), Brahman Partners II, L.P. ("Brahman II"), B-Y Partners,
L.P. ("B-Y"), Brahman Capital Corp. ("Capital") and Brahman Partners, L.P.
("BP") reported that:
1. Brahman II has shared voting and dispositive power over and
beneficially owns 210,000 shares of the Company's Class A Common Stock;
2. B-Y has shared voting and dispositive power over and beneficially
owns 114,900 shares of the Company's Class A Common Stock;
3. BP as the General Partner of B-Y and Brahman II has shared voting
and dispositive power over and beneficially owns 324,900 shares of the
Company's Class A Common Stock;
4. Capital has shared voting and dispositive power over and
beneficially owns 343,200 shares of the Company's Class A Common Stock; and
5. Hochfelder, Sobel and Kuflik, respectively, have shared voting and
dispositive power over and beneficially own 553,200 shares of the Company's
Class A Common Stock.
3
<PAGE> 7
BP is the general partner of B-Y and Brahman II. Capital is the investment
manager for B-Y, Offshore Fund Ltd. ("Offshore"), Genesis Capital Fund
("Genesis") and Quota Fund N.V. ("Quota"). Hochfelder, Sobel and Kuflik are the
sole General Partners of BP, the sole stockholders of Capital and are in a
position to directly and indirectly determine the investment and voting
decisions made by BP and Capital, and consequently B-Y, Brahman II, Offshore,
and Genesis. The foregoing is based on the content of a Schedule 13D, dated May
16, 1995, as filed with the Securities and Exchange Commission.
(8) Includes, for each of Mr. Dean and Mr. Schwertfeger, 12,222 shares with
respect to which each such person has the right to acquire beneficial ownership
within 60 days through the exercise of options received under the Company's 1992
Special Incentive Plan. Also includes, in each case, 11,700 shares of restricted
stock granted to each such person under the 1992 Incentive Plan, with respect to
which shares each such person has voting power but does not have investment
power because the restrictions thereon have not yet lapsed (although they are
scheduled to lapse within 60 days). Does not include the Initial Equity
Incentive Awards made subject to shareholder approval of the 1996 Equity
Incentive Plan described below.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership, as of May 10,
1996, of the Company's Class A Common Stock by each of the directors and
nominees, each of the executive officers named in the Summary Compensation Table
on page 10, and all directors and executive officers as a group (16 persons).
The percentage of outstanding Class A Common Stock owned by each such person and
such group is based on the outstanding shares of Class A Common Stock as of May
10, 1996, and the percentage of the outstanding total Common Stock owned by each
such person and such group is based on the outstanding shares of Class A and
Class B Common Stock as of such date, plus, in each case, shares subject to
stock options held by each such person and such group that are currently
exercisable or exercisable within 60 days after such date. No shares of Class B
Common Stock are owned by any director, nominee for director or executive
officer of the Company.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF
SHARES CLASS A TOTAL COMMON
BENEFICIALLY COMMON STOCK STOCK
NAME OWNED OUTSTANDING(1) OUTSTANDING(1)
- ------------------------------------------------------ ------------ ------------ ------------
<S> <C> <C> <C>
Richard J. Franke..................................... 804,130(2) 10.0% 2.2%
Donald E. Sveen....................................... 832,144(3) 10.4 2.3
Anthony T. Dean....................................... 430,600(4) 5.4 1.2
Timothy R. Schwertfeger............................... 449,700(4) 5.6 1.2
Duane R. Kullberg..................................... 1,000 * *
Willard L. Boyd....................................... 1,000 * *
Douglas W. Leatherdale................................ 1,000 * *
Patrick A. Thiele..................................... 500 * *
Andrew I. Douglass.................................... 500 * *
W. John Driscoll...................................... 1,000 * *
John P. Amboian....................................... 44,000(5) * *
Directors and executive
officers as a group (16 persons).................... 3,248,574(6) 40.6 8.9
</TABLE>
- -------------------------
* Less than 1%.
(1) For the directors and executive officers of the Company, the percentage of
outstanding stock is determined by dividing the total number of shares
beneficially owned, which includes the shares that
4
<PAGE> 8
would be issued upon exercise of their vested options, by the total number
of outstanding shares plus the additional number of shares that would be
outstanding if the options were exercised.
(2) See footnote (6) to the preceding table.
(3) See footnote (5) to the preceding table.
(4) See footnote (8) to the preceding table.
(5) Includes 2,800 shares with respect to which Mr. Amboian has the right to
acquire beneficial ownership within 60 days through the exercise of options
received under the Company's 1992 Special Incentive Plan. This also includes
17,600 shares of restricted stock granted to Mr. Amboian under the 1992
Incentive Plan, with respect to which shares such person has voting power
but does not have investment power because the restrictions thereon have not
lapsed and are not scheduled to lapse within the next 60 days. Does not
include the Initial Equity Incentive Awards made subject to shareholder
approval of the 1996 Equity Incentive Plan, described below.
(6) Includes 1,505,000 shares which may be acquired pursuant to options
currently exercisable or exercisable within 60 days received under the
Company's 1992 Special Incentive Plan. Also includes 17,600 shares of
restricted stock granted under the 1992 Incentive Plan, with respect to
which shares the executive officers have voting power but do not have
investment power because the restrictions thereon have not lapsed and are
not scheduled to lapse within 60 days. Does not include the Initial Equity
Incentive Awards made subject to shareholder approval of the 1996 Equity
Plan described below.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities to file forms reporting their
affiliation with the Company and reports of ownership and changes in ownership
of the Company's equity securities with the Securities and Exchange Commission
and the New York Stock Exchange. These persons and entities are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based on a review of these forms furnished to the Company, the Company
believes that all Section 16(a) filing requirements applicable to the Company's
officers, directors and The St. Paul Companies, Inc., were complied with for the
1995 fiscal year.
ELECTION OF DIRECTORS
Under the provisions of the Company's Certificate of Incorporation, (i) so
long as any shares of Class B Common Stock are outstanding, the number of
directors shall be ten or more and may not be changed without the unanimous
consent of either the Class B directors or the holders of the Class B Common
Stock, and (ii) so long as the holders of the Class B Common Stock hold at least
20% of all outstanding shares of Common Stock, as is currently the case, such
holders shall be entitled to nominate and elect four directors. In light of the
impending retirement of Messrs. Franke and Sveen, the Nominating Committee of
the Company's Board of Directors has nominated and the Board of Directors has
recommended to shareholders for election, a total of eight persons to the office
of director of the Company. This will leave two vacancies on the Board, which
may be filled by action of the Board of Directors prior to the next meeting of
shareholders or by action of shareholders at that time. Of these nominees, four
directors are to be elected by the holders of the Class A Common Stock and the
holders of the Class B Common Stock, voting together as a single class, and four
directors are to be elected by the holders of the Class B Common Stock, voting
as a separate class.
5
<PAGE> 9
A holder of Class A Common Stock may, with respect to the election of the
four directors to be elected by the Common Stock, (i) vote for the election of
all of such nominees named herein, (ii) withhold authority to vote for all such
nominees or (iii) vote for the election of all such nominees, other than any
nominee with respect to whom the shareholder withholds authority to vote, by so
indicating in the appropriate space on the enclosed proxy. No holder of Class A
Common Stock may vote for more than four directors. The election of such
directors requires the affirmative vote of a plurality of the shares of the
Common Stock present in person or by proxy at the meeting and entitled to vote
in such election. The election of the four Class B directors requires the
affirmative vote of a plurality of the shares of the Class B Common Stock
present in person or by proxy at the meeting and entitled to vote in such
election. Withholding authority to vote for a director nominee will not prevent
such director nominee from being elected.
The directors to be elected at the annual meeting will hold office until
the annual meeting in 1997 or until their successors are duly elected and
qualified. Unless otherwise instructed by the shareholders, it is the intention
of the persons named in the accompanying proxy to vote the proxies held by them
for the election of the nominees named in the "Nominees for Directors" table.
However, if any of the nominees shall not be a candidate for election at the
time of the meeting (a contingency which the Board of Directors does not expect
to happen), it is intended that such shares will be voted for such substitute
nominee as may be selected by the Board of Directors in the case of any of the
four directors to be elected by the Common Stock, and as may be selected by the
holders of Class B Common Stock in the case of a Class B director.
All of the nominees are currently directors of the Company. Messrs. Dean,
Schwertfeger, Leatherdale and Thiele were first elected on March 23, 1992, the
date of the Company's incorporation; Messrs. Boyd, Driscoll and Kullberg were
initially elected directors by the Board of Directors on April 13, 1992, and Mr.
Douglass was first elected to the Board of Directors by the stockholders on May
9, 1994. All nominees have heretofore been elected directors of the Company by
the shareholders.
In the table below and throughout this Proxy Statement "Nuveen & Co."
refers to John Nuveen & Co. Incorporated, predecessor to the Company and now a
wholly-owned subsidiary. "Nuveen Funds" refers to the tax-free mutual funds and
exchange-traded funds sponsored by Nuveen & Co.
NOMINEES FOR DIRECTORS
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATIONS
- ------------------------- ---- ------------------------------------------------------------
<S> <C> <C>
Timothy R.
Schwertfeger........... 47 Executive Vice President of the Company since inception;
Executive Vice President and Director of Nuveen & Co. since
1989; prior thereto, Vice President of Nuveen & Co. since
1980; Director of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp. since 1992; President and
Director of the Nuveen Funds advised by Nuveen Advisory
Corp. since July 1994; Director of Institutional Capital
Corporation since May 1996.
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATIONS
- ------------------------- ---- ------------------------------------------------------------
<S> <C> <C>
Anthony T. Dean.......... 51 Executive Vice President of the Company since inception;
Executive Vice President and Director of Nuveen & Co. since
1989; prior thereto, Vice President of Nuveen & Co. since
1980; Director of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp. since 1992; Director and
President of the Nuveen Funds advised by Nuveen
Institutional Advisory Corp. since July 1994.
Willard L. Boyd.......... 69 President, Field Museum of Natural History since 1981.
Duane R. Kullberg........ 63 Retired since 1989; prior thereto, Managing Partner-Chief
Executive Officer of Arthur Andersen & Co., S.C. since 1980.
Director of the Chicago Board Options Exchange, Inc. and
Carlson Companies, Inc.
NOMINEES FOR CLASS B DIRECTORS
Douglas W. Leatherdale... 59 Chairman of the Board of Directors, President and Chief
Executive Officer of The St. Paul Companies, Inc. since
1990; prior thereto, President and Chief Operating Officer
from 1989 to 1990, and Executive Vice President from 1982 to
1989, of The St. Paul Companies, Inc. Director of Nuveen &
Co. from 1981 to 1992 and Nuveen Advisory Corp. from 1988 to
1989. Director of United HealthCare Corporation and Northern
States Power Company.
Patrick A. Thiele........ 45 Executive Vice President since 1991, Chief Financial Officer
since 1989 and Director since 1993, of The St. Paul
Companies, Inc.; prior thereto, Senior Vice President from
1989 to 1991, and Vice President--Finance from 1988 to 1989,
of The St. Paul Companies, Inc. Director of Nuveen & Co.
from 1988 to 1992, and Nuveen Advisory Corp. from 1989 to
1992. Director of The Wenger Corporation.
Andrew I. Douglass....... 52 Senior Vice President and General Counsel of The St. Paul
Companies, Inc. since 1993; prior thereto, Executive Vice
President, General Counsel and Secretary of Heller
International Corporation from 1985 to 1993.
W. John Driscoll......... 67 Chairman from May 1993 until his retirement in June 1994,
formerly President, of Rock Island Company, a private
investment company. Director of The St. Paul Companies,
Inc., Comshare Incorporated, Northern States Power Company,
Weyerhaeuser Company.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has six board committees--the Executive Committee, the Audit
Committee, the Compensation Committee, the Nominating Committee, the Personnel
Committee and the Bonus Committee.
7
<PAGE> 11
The membership of these committees as of July 1, 1996, following the retirement
of Messrs. Franke and Sveen, will be as follows, with the chairman of each
committee indicated with an asterisk.
<TABLE>
<S> <C>
EXECUTIVE COMMITTEE NOMINATING COMMITTEE
Anthony T. Dean Willard L. Boyd*
Timothy R. Schwertfeger* W. John Driscoll
Douglas W. Leatherdale Duane R. Kullberg
Timothy R. Schwertfeger
AUDIT COMMITTEE PERSONNEL COMMITTEE
Willard L. Boyd Willard L. Boyd
W. John Driscoll Anthony T. Dean
Duane R. Kullberg* W. John Driscoll*
Duane R. Kullberg
COMPENSATION COMMITTEE BONUS COMMITTEE
Willard L. Boyd Anthony T. Dean
W. John Driscoll* Timothy R. Schwertfeger*
Duane R. Kullberg
</TABLE>
The current membership of each such committee is the same as that indicated
above, except that Mr. Franke currently holds each position to be held by Mr.
Schwertfeger; Mr. Sveen currently holds each position to be held by Mr. Dean and
Mr. Thiele currently holds the position on the Executive Committee that will be
held by Mr. Leatherdale.
The EXECUTIVE COMMITTEE is charged with exercising the authority of the
Board of Directors in the management of the business of the Company in the
interval between meetings of the Board, except that it may not amend the
Certificate of Incorporation or By-laws of the Company, adopt an agreement of
merger, consolidation, or sale, lease or exchange of substantially all of the
Company's property and assets, or take action with respect to the dissolution of
the Company or the removal or indemnification of directors.
The AUDIT COMMITTEE is charged with exercising the power and authority of
the Board of Directors in the administration and review of the Company's
internal accounting policies and controls.
The COMPENSATION COMMITTEE is responsible for determining the compensation
of the Chairman of the Board and the other executive officers of the Company,
including the determination of awards to such officers under the Company's
Annual Cash Bonus Plan (and will be responsible for determination of awards to
such officers under the proposed Executive Officer Performance Plan). The
Committee is also charged with the administration and interpretation of the
Company's 1992 Special Incentive Plan (and of the proposed 1996 Equity Incentive
Award Plan) and any other plan designed to meet the requirements of Rule 16b-3
under the Securities Exchange Act of 1934, including the selection of
individuals for participation in the plan, the determination, grant,
disbursement and settlement of awards thereunder, and the modification or
acceleration of awards thereunder.
The NOMINATING COMMITTEE is charged with exercising the power and authority
of the Board of Directors to consider and nominate candidates for director of
the Company, except Class B directors.
The PERSONNEL COMMITTEE is charged with making recommendations to the Board
of Directors with regard to the recruitment, management and compensation of the
Company's personnel, other than the
8
<PAGE> 12
executive officers of the Company, including the establishment, administration
and interpretation of the various compensation and incentive programs and
benefit, pension and profit-sharing plans of the Company, and has the
responsibility and authority to administer and interpret such programs and
plans, except for matters delegated by the Board of Directors to the Bonus
Committee, the Compensation Committee or expressly reserved to the Board of
Directors.
The BONUS COMMITTEE is charged with administering and interpreting the
Company's Annual Cash Bonus Plan and its successor, the Annual Incentive Award
Plan, including determination of the awards to be made under those Plans, except
as such matters have been delegated by the Board of Directors to the
Compensation Committee or expressly reserved to the Board of Directors.
During the last fiscal year, the Company's Board of Directors held four
meetings, the Compensation Committee held five meetings, the Audit Committee
held four meetings, and the Personnel and the Nominating Committees each held
one meeting. The Executive Committee and the Bonus Committee did not hold any
formal meetings during the last fiscal year.
COMPENSATION OF DIRECTORS
Except for directors employed either by the Company or The St. Paul
Companies, Inc., directors receive an annual fee of $20,000, a fee of $1,000 for
every board meeting attended in person, and a fee of $500 for each telephone
meeting of the Board. The chairmen of the Audit, Nominating and Personnel
Committees each receive an additional annual fee of $2,000.
9
<PAGE> 13
EXECUTIVE COMPENSATION
The following table shows information concerning the annual compensation
for services to the Company in all capacities of the chief executive officer and
the other four most highly compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------
NAME AND ANNUAL COMPENSATION RESTRICTED OPTIONS
PRINCIPAL ------------------------------- STOCK (NUMBER OF ALL OTHER
POSITION YEAR SALARY BONUS AWARD(S) SHARES) COMPENSATION(1)
- ----------------------------- ----- --------- ----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Franke 1995 $ 500,000 $ 3,160,525 -- -- $ 21,053
Chairman & Chief Executive 1994 500,000 2,783,400 -- -- 14,340
Officer 1993 500,000 3,514,000 -- -- 28,363
Donald E. Sveen 1995 500,000 3,160,525 -- -- 21,053
President & Chief Operating 1994 500,000 2,783,400 -- -- 14,340
Officer 1993 500,000 3,514,000 -- -- 28,363
Anthony T. Dean 1995 250,000 3,160,525 -- -- 21,053
Executive Vice President 1994 250,000 2,783,400 -- -- 14,340
1993 250,000 3,514,000 -- -- 28,363
Timothy R. Schwertfeger 1995 250,000 3,160,525 -- -- 21,053
Executive Vice President 1994 250,000 2,783,400 -- -- 14,340
1993 250,000 3,514,000 -- -- 28,363
John P. Amboian(2) 1995 144,071 500,000 $ 720,000(3) 50,000 250,000
Executive Vice President
and
Chief Financial Officer
</TABLE>
- -------------------------
(1) Represents contributions to the named executive officer's account under the
Company's tax-qualified Employees' Profit Sharing Plan and reallocations of
forfeitures under that Plan except for Mr. Amboian who was paid $250,000 in
cash as a relocation allowance.
(2) Mr. Amboian commenced his employment with the Company on June 5, 1995.
(3) Represents the value of 30,000 shares of restricted stock awarded under the
Company's 1992 Special Incentive Plan with a market value of $24.00 per
share on the Award Date of June 5, 1995. These shares vest as follows: (a)
20,000 shares will vest in 18 quarterly installments commencing on July 1,
1995 and thereafter on the first day of each successive fiscal quarter, the
first installment equal to 1,300 shares, and each subsequent installment
equal to 1,100 shares; and (b) 10,000 shares will vest in two installments:
6,700 shares on July 1, 1996 and 3,300 shares on July 1, 1997. The
participant receives dividends with respect to all restricted shares. As of
December 31, 1995, 2,400 shares had vested; the remaining 27,600 shares of
restricted stock had a market value of $683,100 based on the New York Stock
Exchange--Composite Transaction closing of $24.75 on December 29, 1995.
The Company has entered into consulting and non-compete agreements with
Messrs. Franke and Sveen for a period of ten years following their retirement on
June 30, 1996. Under these contracts the Company will pay each of Messrs. Franke
and Sveen $25,000 per year, and Messrs. Franke and Sveen will provide consulting
services and agree not to engage in any business activity that competes with the
Company. The Company will also provide Messrs. Franke and Sveen off-site office
space and administrative support following their retirements.
10
<PAGE> 14
OPTION GRANTS
The following table shows information with respect to grants of stock
options pursuant to the Company's 1992 Special Incentive Plan (the "Incentive
Plan") during the fiscal year ended December 31, 1995 to the named individual.
<TABLE>
<CAPTION>
% OF TOTAL
OPTION OPTIONS EXERCISE OR GRANT
(NUMBER GRANTED TO BASE PRICE DATE
OF EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME SHARES) FISCAL YEAR ($/SH) DATE VALUE(1)
- ---------------------------------------- --------- ------------ ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
John P. Amboian......................... 50,000(2) 100% $ 24.00 5/27/02 $277,000
</TABLE>
- -------------------------
(1) Based on a variation of the Black-Scholes option pricing model modified
specifically for the valuation of long-term employee incentive stock awards. The
actual value, if any, an individual may realize will depend on the excess of the
market price of the stock over the exercise or base price on the date the option
is exercised. There is no assurance that the value realized by an executive will
be at or near the value estimated under the Black-Scholes model. The estimated
values under that model are based on subjective assumptions as to interest
rates, stock price volatility and future dividend yield.
(2) This option becomes exercisable with respect to the shares of Class A
Common Stock covered thereby in eighteen (18) quarterly installments, the first
seventeen (17) installments of 2,800 shares each, and the last installment of
2,400 shares. The first such installment became exercisable on July 1, 1995, and
subsequent installments become exercisable on the first day of each successive
quarter thereafter.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows information regarding the unexercised options to
purchase shares of the Company's Class A Common Stock granted under the 1992
Incentive Plan to the named individuals, and held by them at December 31, 1995.
None of the named individuals exercised any stock options during fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT 12/31/95 IN-THE-MONEY OPTIONS
(NUMBER OF SHARES) AT 12/31/95(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Richard J. Franke............................. 220,000 0 $ 1,485,000 $ 0
Donald E. Sveen............................... 220,000 0 1,485,000 0
Anthony T. Dean............................... 183,333 36,667 1,237,498 247,502
Timothy R. Schwertfeger....................... 183,333 36,667 1,237,498 247,502
John P. Amboian............................... 5,600 44,400 4,200 33,300
</TABLE>
- -------------------------
(1) Based on the New York Stock Exchange-Composite Transaction closing
price of $24 3/4 on December 29, 1995, the next preceding business day, the $18
exercise price for Messrs. Franke, Sveen, Dean and Schwertfeger and the $24
exercise price for Mr. Amboian.
11
<PAGE> 15
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report:
The Company has long had compensation and incentive programs that maintain
a direct relationship between employee compensation and Company results and
provide incentives throughout the Company by sharing profits with all employees.
This longstanding philosophy continued into 1995, and the alignment of employee
interests, especially those of key executives, with the interests of
shareholders will continue into the future and be strengthened under the
proposed Executive Officer Performance Plan and the proposed 1996 Equity
Incentive Award Plan. These new Plans, which have been approved by this
Committee and the Board subject to shareholder approval, are designed to
capitalize on the demonstrated strengths of the Company's incentive systems and
also to provide for increasing employee ownership of Company stock, reinforcing
to an even greater extent the commonality of interests between management and
shareholders.
There are several key elements to the Company's longstanding compensation
philosophy:
- Base salaries are set at levels sufficient to attract new employees,
but the Company emphasizes profit-sharing cash awards under the Annual Cash
Bonus Plan (and its proposed successors, the Executive Officer Performance
Plan and the Annual Incentive Award Plan) to provide total compensation
sufficient to retain talented and productive employees and to reward
employees at every level of the organization for their contributions to the
Company's operations.
- Profit-sharing bonus awards are based on the overall profitability
of the Company and not on the year-to-year profitability of a particular
department or line of business. This fosters an atmosphere in which
teamwork is rewarded and the Company retains the greatest amount of
flexibility in developing its most important resources -- its employees.
- The total amount available for profit-sharing bonus awards is a
fixed percentage of the Company's pre-tax net operating income. This
provides a strong incentive for performance, growth, and control of costs
as the compensation of officers and employees is directly related to
Company earnings.
- Employee profit-sharing bonus awards are based on individual
performance. They recognize each employee's contribution to the Company's
success, both during the current year and during prior years; they also
take into account management's expectations for each professional
employee's future development. This process permits management to
compensate employees for their longer-term performance, to encourage and
reward employee growth and productivity, and to develop strong
relationships between the Company and its employees at all levels.
- Profit-sharing bonus awards for the Company's officer/directors are
directly related to the Company's performance. If the Company's operating
earnings exceed a predetermined threshold annual return on beginning
equity, each officer/director earns an award equal to a percentage of the
amount by which the Company's operating earnings have exceeded the
threshold. This direct linkage between profitability above a threshold
return and officer/director profit-sharing bonus awards reinforces the
mutuality of interests between these key executive officers and those of
the Company's shareholders. It also gives top management special incentive
to focus the Company's growth in those areas in which the longer-term rates
of return are the most attractive. Further, a policy of equal profit
sharing bonus awards for the officer/directors encourages teamwork and
partnership among these key executive officers. This
12
<PAGE> 16
structure has worked well for the Company and has been carried forward into
the proposed Executive Officer Performance Plan.
- The introduction of a continuing program of equity-based incentive
awards under the proposed Equity Incentive Award Plan will further advance
the alignment of employee and shareholder interests by progressing toward
substantial and broad-based employee ownership of Company stock.
This Committee believes that Nuveen's compensation programs, with their clear
and direct relationship between profit sharing bonus awards and Company
profitability, have served the Company well and that the revised programs will
do so into the future. The Committee is aware that the Omnibus Budget
Reconciliation Act of 1993 established a $1 million limit on the federal tax law
deductibility of the compensation paid to key executives, subject to certain
exceptions, including an exception for compensation paid under a plan, like the
Company's Annual Cash Bonus Award Plan, in effect prior to the initial public
offering of a company's common stock. Pursuant to this exception, which expires
for compensation paid in 1996, the Company plans to deduct all compensation paid
to its officer/directors for 1995. The proposed new Plans are intended to permit
the continued full deductibility of compensation paid to executive officers. The
Committee intends to continue to pursue compensation strategies designed to
permit the Company to retain maximum federal tax advantage while providing
strong performance incentives.
The executive officer 1995 salaries and profit sharing bonus awards
reflected in the table on page 10 are the product of these longstanding
incentive programs. The base salaries are approximately the median salaries for
executives of securities firms in comparable positions, according to a yearly
independent survey of executive compensation in the industry. The profit sharing
bonus awards for each of the officer/directors, which as described above are
based on the Company's operating earnings, increased nearly 14% from 1994,
reflecting the 21% increase in the Company's earnings for the year.
We believe that the caliber and motivation of our employees and the quality
of their leadership are two of the most important factors affecting the
Company's long-term performance. We further believe that the direct relationship
between executive pay and Company performance served the Company well in 1995
and will continue to do so under the proposed new incentive plans in the future.
W. John Driscoll, Chairman
Willard L. Boyd
Duane R. Kullberg
13
<PAGE> 17
RETIREMENT PLANS
Each of the five named executive officers participates in the Company's
non-contributory Retirement Plan, in which all employees who have completed one
year of service and attained age 21 are eligible to participate. The table below
sets forth with respect to the Retirement Plan the estimated annual straight
life annuity benefits calculated upon retirement at normal retirement age for
employees with the remuneration and years of service indicated.
<TABLE>
<CAPTION>
AVERAGE ESTIMATED ANNUAL BENEFITS
FINAL YEARS OF SERVICE
BASE ------------------------------------------------------------
SALARY 15 20 25 30 35
- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
$150,000 $ 33,750 $ 45,000 $ 56,250 $ 67,500 $ 78,750
$175,000 $ 39,375 $ 52,500 $ 65,625 $ 78,750 $ 91,875
$200,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000 $105,000
$300,000 $ 67,500 $ 90,000 $112,500 $135,000 $157,500
$400,000 $ 90,000 $120,000 $150,000 $180,000 $210,000
$500,000 $112,500 $150,000 $187,500 $225,000 $262,500
$600,000 $135,000 $180,000 $225,000 $270,000 $315,000
</TABLE>
Each participant's benefits are determined under a formula which takes into
account years of credited service and the participant's average monthly
compensation during the five consecutive calendar years of highest annual
compensation in the ten consecutive calendar years prior to retirement, less a
portion of primary Social Security benefits. The maximum annual benefit payable
under the plan is not to exceed the lesser of $120,000 (subject to future
adjustments for inflation) and 100% of a participant's average aggregate
compensation for the three consecutive years in which he received the highest
aggregate compensation from the Company or such lower limit as may be imposed by
the Internal Revenue Code. Participants vest after five years of service to the
Company and its subsidiaries. The plan generally provides for payments to or on
behalf of each vested employee upon such employee's retirement at the normal
retirement age provided under the plan or later, although provision is made for
payment of early retirement benefits on a graduated reduced basis according to
provisions of the plan. Normal retirement age under the plan is 65. An employee
whose age and years of service add up to 90 is entitled to an unreduced pension
despite not having attained normal retirement age.
The Company has adopted an Excess Benefit Retirement Plan, which provides
certain highly compensated employees who participate in the Retirement Plan,
including Messrs. Franke and Sveen, with additional retirement income in an
amount equal to the difference between (i) the benefits any such employee would
have received under the Retirement Plan but for limitations imposed by the
Internal Revenue Code on the amount of annual benefits payable pursuant to a
tax-qualified retirement plan and (ii) the benefits actually payable to such
employee under the Retirement Plan.
The credited years of service under the Retirement Plan for Messrs. Franke,
Sveen, Dean, Schwertfeger and Amboian as of December 31, 1995 were 35, 35, 18,
17 1/2 and 1/2, respectively. Compensation on which plan benefits are based
includes only base salary and not bonuses, incentive compensation, or
profit-sharing plan contributions. Such compensation for these five individuals
therefore is currently $500,000, $500,000, $250,000, $250,000 and (when Mr.
Amboian becomes eligible after a full year of service) $250,000 respectively.
14
<PAGE> 18
EMPLOYMENT AGREEMENTS
At the time of the initial public offering of its Common Stock in 1992, the
Company entered into employment agreements with Messrs. Franke, Sveen, Dean and
Schwertfeger and other key members of the Company's management. The agreements
with Messrs. Franke and Sveen provide for an employment term commencing on May
27, 1992 and ending on June 30, 1996. The agreements with the other executives,
including Messrs. Dean and Schwertfeger, provide for a five-year employment
term, which commenced on May 27, 1992 and will end on May 27, 1997.
Additionally, on June 5, 1995, the Company entered into an employment agreement
with Mr. Amboian. This agreement provides for an employment term which commenced
on June 5, 1995 and will end on May 27, 1997. The Company had not, prior to its
initial public offering, entered into employment agreements, and it does not
currently expect to extend the present contracts as they expire in 1997 or enter
into new ones with its management. The current agreements provide for
compensation for each executive in the form of (i) an annual base salary (which
may be increased, but not reduced, during the employment period), (ii) the
opportunity to earn an annual bonus award in accordance with the terms and
conditions of the Company's Annual Bonus Plan, (iii) the right to participate in
the Company's executive compensation plans and programs, as such plans and
programs may be in effect from time to time, and (iv) such medical, dental and
disability benefits, accident and life insurance, and other employee benefits as
are provided in accordance with the Company's plans and programs for executives
in effect from time to time.
Under the terms of each employment agreement, the Company and the executive
have the right to terminate the executive's employment at any time, provided
that in the event that the executive's employment is terminated by the Company
without cause (as defined in each agreement) or by the executive on account of
constructive termination (as defined in each agreement), the Company will be
required to pay to the executive termination compensation, in addition to any
accrued and unpaid amounts, including pro-rated bonus, owed to the executive
under the agreement as of the date of termination, consisting of (i) one year's
base salary at the rate in effect on the date of termination, (ii) an amount
equal to the average of the annual bonuses paid to the executive in the last
three full fiscal years of the Company preceding the date of termination, (iii)
subject to the terms of certain benefit plans and programs, continuation of
medical and certain other employee benefits until the date on which the
employment term otherwise would have ended under the agreement, and (iv)
immediate vesting of all outstanding and previously unvested awards granted to
the executive under the 1992 Incentive Plan as of the date of termination. If
termination of employment were to take place within one year of the end of the
employment period, these payments would be reduced to an amount reflecting that
percentage of a year remaining in the employment period. In addition, the
Company will be obligated to pay the executive additional amounts to compensate
the executive for any excise taxes that may be imposed under federal or other
tax laws as a result of payments made to the executive, including an accelerated
vesting of awards under the 1992 Incentive Plan, in connection with a
termination of the executive's employment by the Company without cause or by the
executive for constructive termination, or on account of a change in control of
the Company (as defined in the 1992 Incentive Plan).
15
<PAGE> 19
STOCKHOLDER RETURN INFORMATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Class A Common Stock to
the cumulative total return of the S&P Composite-500 Stock Index and the S&P
Composite-Brokerage Firm Index for the period commencing May 31, 1992 and ending
December 31, 1995. In each case the graph assumes a $100 investment in the
Company's Class A Common Stock and each index on May 31, 1992 and that all
dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P BROKER-
(FISCAL YEAR COVERED) NUVEEN S&P 500 AGE
<S> <C> <C> <C>
MAY-92 100.00 100.00 100.00
DEC-92 149.00 107.00 116.00
DEC-93 146.00 118.00 156.00
DEC-94 137.00 119.00 131.00
DEC-95 153.00 164.00 186.00
</TABLE>
16
<PAGE> 20
THE NUVEEN INCENTIVE COMPENSATION PLANS
BACKGROUND.
The Company has long had compensation and incentive programs that have
maintained a direct relationship between employee compensation and Company
results and that have provided incentives throughout the Company by sharing
profits with all employees.
As discussed in greater detail in the Report of the Compensation Committee
on page 12, there are several key elements to the Company's long-standing
compensation philosophy. Base salaries and annual cash bonuses have been set at
levels sufficient to attract new employees, to provide total compensation
sufficient to retain talented and productive employees, and to reward employees
at every level of the organization for their contributions to the Company's
operations.
Annual cash bonus awards have been paid to employees under the Annual Cash
Bonus Plan (the "Cash Bonus Plan"). Since the Company's initial public offering
in 1992 the total amount available for annual cash bonus awards, together with
contributions to the Company's qualified profit sharing plan (the "Award Pool"),
has been 25 percent of the Company's adjusted pre-tax consolidated net operating
income, prior to accrual for payment of incentive compensation awards
("Operating Income"). The portion of the Award Pool that has been awarded to
each officer who is also a director (an "officer/director") has been 2.5
percentage points of the amount by which Operating Income for the year has
exceeded a 12% return on equity capital as of the beginning of the year
("Beginning Equity").
The Cash Bonus Plan, based as it is on Company net operating income, and
the awards to officer/ directors, based as they are on operating income over a
threshold return on equity, have created a strong alignment of interests between
Company management and stockholders. Further, because the Cash Bonus Plan has
been based on the overall profitability of the Company and not on the
profitability of a particular department or line of business, the Cash Bonus
Plan has fostered an atmosphere in which teamwork is rewarded and has provided a
strong incentive for performance, growth, and control of costs. Additionally,
the policy of equal profit-sharing bonus awards to the officer/directors based
on earnings in excess of a threshold return on equity has encouraged teamwork
and partnership among these key executive officers and focused senior management
on effective use of the Company's capital.
The Internal Revenue Code of 1986, as amended (the "Code"), was amended in
1993, adding Section 162(m), which establishes limits on the extent to which
compensation of a corporation's chief executive officer and the four other
"named executives" whose compensation is disclosed in annual proxy materials may
be deducted by the employer corporation. Compensation that is
"performance-based," as that term is defined in Section 162(m) and the
regulations thereunder, is not subject to these deductibility limits. The
provisions of Section 162(m) first become applicable to the Company for
compensation paid in 1996. The Compensation Committee and the Board have
concluded that the principal objectives of the Company's compensation plans must
be to continue to attract and to retain talented and productive employees, and
to provide appropriate incentives for superior performance; they have also
concluded, however, that unlimited income tax deductibility of executive
compensation should be secured so long as this can be accomplished without
sacrificing the overriding objectives of the Company's compensation plans.
17
<PAGE> 21
PLAN CHANGES AND EQUITY INCENTIVE AWARDS.
The Board has reviewed the Company's longstanding incentive programs, and
has approved the changes to such programs and made the Equity Incentive Awards
discussed herein with two principal objectives: first, to provide for the
continued and even stronger alignment of management's interests with those of
shareholders by establishing a continuing program of equity-based incentives for
employees with the goal of substantial and broad-based employee ownership of
Company stock; and, second, to permit awards under the plans described below to
continue to qualify for unlimited federal income tax deductibility.
Under the proposed revised incentive plans, the total amount available for
cash bonus awards to all employees, together with the "fair value" of equity
awards made 'in lieu' of cash bonus awards, all as discussed below, together
with contributions to the Company's qualified profit sharing plan, will remain
equal to 25% of the Company's Operating Income.
A. APPROVAL OF THE 1996 EQUITY INCENTIVE AWARD PLAN
The Compensation Committee has recommended, and the Board of Directors has
approved, subject to shareholder approval, the 1996 Equity Incentive Award Plan
(the "Equity Plan").
The following summary of the Equity Plan is qualified by reference to the
copy of the Plan attached as Exhibit A hereto.
PRINCIPAL TERMS OF THE PLAN.
Certain employees of the Company and its subsidiaries (expected eventually
to comprise approximately 100 persons) are eligible to participate in the Equity
Plan upon recommendation of the Bonus Committee and approval by the Compensation
Committee. Subject to the terms of the Equity Plan, the Compensation Committee
has authority to determine the nature, size, terms and conditions of, and all
other matters relating to awards, to prescribe award agreements, and to
interpret the Equity Plan. Awards under the Equity Plan may be in the form of
grants of restricted Class A Common Stock and options to purchase Class A Common
Stock.
Over the expected five-year plan period, an aggregate of 3.8 million shares
of Class A Common Stock (subject to adjustments for stock dividends, stock
splits, extraordinary distributions of cash or property, and certain changes in
capitalization) are reserved for Awards under the Equity Plan. Up to 950,000
shares of Class A Common Stock may be issued in connection with awards of
restricted stock under the Equity Plan.
Performance Goals. The Committee may make Awards in lieu of a specified
cash award under the Executive Officer Performance Plan (which is described in
detail below) or the Company's Annual Incentive Award Plan. Such Awards are
designated "In Lieu Awards," and the Initial Equity Awards described below
include In Lieu Awards. The recipient of an In Lieu Award will receive for one
or more plan years a cash incentive award under the Executive Officer
Performance Plan or the Annual Incentive Award Plan that is reduced from the
amount that would otherwise have been paid by an amount equal to the "Fair
Value" of the In Lieu Award, as determined by the Committee at the time of
grant. Vesting of an In Lieu Award may be contingent upon the recipient earning
a cash incentive award at least equal to such Fair Value. In addition, if the
Committee so determines at the time of grant, Awards may be made subject to the
achievement of one or more performance goals based upon attainment of one or any
combination of the following: specified levels of
18
<PAGE> 22
earnings per share from continuing operations, operating income, revenues,
return on operating assets, return on equity, shareholder return (measured in
terms of stock price appreciation) and/or total shareholder return (measured in
terms of stock price appreciation and/or dividends), achievement of cost
control, or stock price, in each case of the Company or such subsidiary,
division or department of the Company or subsidiary for or within which the
participant is primarily employed. The performance goals also may be based upon
attaining specified levels of Company performance under one or more of the
measures described above relative to the performance of other corporations. In
approving the Equity Plan, the shareholders will be approving the foregoing
terms of In Lieu Awards and other performance goals, among other things.
Restricted Stock and Dividend Equivalents. Restricted stock awards consist
of shares of Class A Common Stock that are awarded to a participant, subject to
forfeiture if the conditions established by the Committee are not met. Such
conditions may include, but are not limited to, continued employment for a
specified period and/or the achievement of performance goals as described below.
A participant may also elect to defer receipt of restricted stock until a time
later than when the awards vest and would otherwise be deliverable.
Before the vesting of shares of restricted stock that are not deferred, a
participant has voting and dividend rights with respect to his or her restricted
shares, but cannot sell, transfer (other than by will or by the laws of descent
and distribution), exchange or encumber the restricted shares. Before delivery
of shares of restricted stock that are deferred, a participant has no rights of
a shareholder with respect thereto, but will receive payment of compensation
equal to the dividends that would otherwise be paid thereon ("dividend
equivalents") on a current or deferred basis as elected by the participant. Any
unvested restricted shares will vest if a participant's employment with the
Company is terminated because of death, disability or retirement, by the Company
for any reason other than Cause, by the participant for Constructive
Termination, or as a result of a Disaffiliation Transaction, as all those terms
are defined in the Equity Plan. Notwithstanding any other provision of the
Equity Plan, in the event of a Change in Control of the Company (as defined in
the Equity Plan), all shares of restricted stock that have not yet vested shall
become immediately and fully vested and any remaining restrictions on
transferability shall immediately lapse. The maximum number of shares of
restricted stock that may be awarded to any one individual annually under the
Equity Plan is 120,000 shares, subject to adjustment as described above.
Stock Options. Options awarded under the Equity Plan will be granted in the
form of "non-qualified stock options." Options entitle a participant to purchase
shares of Class A Common Stock at a price per share established at the award
date, which may not be less than the fair market value of such stock on the
award date, and may be exercised not later than ten (10) years from the award
date. Stock options, whether or not currently exercisable, may not be sold,
transferred, exchanged or encumbered except in limited circumstances specified
in the Equity Plan. Upon the termination of employment of a participant because
of death, disability or retirement, by the Company without Cause, by the
participant for Constructive Termination or as a result of a Disaffiliation
Transaction, except as otherwise specified by the Committee at the time of
grant, any outstanding stock options that have not yet become exercisable will
become exercisable, and all outstanding options will, in the case of options
that are In Lieu Awards, remain exercisable for the remainder of their term; in
the case of options that are not In Lieu Awards, such options will remain
exercisable for not more than three years after termination of employment
because of death, disability or retirement and not more than 60 days after the
other types of termination. Except as otherwise specified by the Committee at
the time of grant, in the event of termination of employment for any other
reason, stock options that have not yet become
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<PAGE> 23
exercisable shall be forfeited, and all other outstanding stock options shall
remain exercisable for a period of 60 days following the date of termination
(but not after the expiration date of the option). Notwithstanding any other
provision of the Equity Plan, in the event of a Change in Control of the
Company, (as defined in the Equity Plan), all unexercised options granted
thereunder shall become immediately and fully exercisable and any remaining
restrictions on transferability of shares acquired pursuant to option exercise
shall immediately lapse. The maximum number of shares that may be subject to an
option grant to any one individual annually under the Equity Plan is 600,000
shares, subject to adjustment as described above. Once granted, options may not
be repriced or replaced by new options with lower exercise prices.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.
The Company has been advised that, based on the present provisions of the
Code and regulations promulgated thereunder, the federal income tax consequences
of the grant, vesting and exercise of Awards under the Equity Plan and the
subsequent disposition of stock acquired thereby will be as described below. The
following discussion addresses only the general federal income tax consequences
of Awards. Participants in the Equity Plan are urged to consult their own tax
advisers regarding the impact of federal, state and local taxes, the federal
alternative minimum tax, and securities laws restrictions, given their
individual situations.
Non-qualified Stock Options. Only non-qualified stock options may be
granted under the Equity Plan. Generally, an optionee will not recognize any
taxable income, and the Company will not be allowed a tax deduction, upon the
granting of a non-qualified stock option. Upon the exercise of a non-qualified
stock option, the optionee realizes ordinary income in an amount equal to the
excess, if any, of the fair market value of the shares acquired at the time the
option is exercised over the exercise price for such shares. At that time, the
Company will be allowed a tax deduction equal to the amount of ordinary taxable
income recognized by the optionee, subject to the limitations described below.
When an optionee exercises a non-qualified stock option by paying the
exercise price solely in cash, the basis in the shares acquired is equal to the
fair market value of the shares on the date ordinary income is recognized, and
the holding period for such shares begins on the day after the shares are
received. When an optionee exercises a non-qualified stock option by exchanging
previously acquired shares of Class A Common Stock of the Company held as
capital assets in partial or full payment of the exercise price, shares of Class
A Common Stock of the Company received by the optionee equal in number to the
previously acquired shares exchanged therefor will be received free of tax and
will have the same basis and holding period as such previously acquired shares.
The optionee will recognize ordinary taxable income equal to the fair market
value of any additional shares received by the optionee, less the amount of any
cash paid by the optionee. The optionee will have a basis in such additional
shares equal to their fair market value on the date ordinary income is
recognized and the holding period of such shares will commence on the day after
they are transferred to the optionee.
Upon subsequent disposition of shares acquired upon exercise of a
non-qualified stock option, the difference between the amount realized on the
sale and the basis in the shares is treated as long-term or short-term capital
gain or loss, depending on the holding period for the shares. Long-term capital
gain treatment is applicable if the shares are held for more than one year. The
subsequent disposition of shares acquired by exercise of a non-qualified stock
option will not result in any additional tax consequences to the Company.
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<PAGE> 24
Restricted Stock. Generally, a participant will not recognize any taxable
income, and the Company will not be allowed a tax deduction, upon the grant of
restricted stock. Upon the lapsing of restrictions on restricted stock, or, if
the restricted stock is deferred pursuant to the provisions of the Equity Plan,
upon the delivery of the restricted stock at the expiration of the deferral
period, the holder will recognize ordinary income equal to the fair market value
of the shares on the date of such lapse or delivery. Alternatively, if the
restricted stock is not deferred, the participant may elect, within 30 days
after the grant of restricted stock, to recognize ordinary income at the time of
the grant, in which event the amount of such ordinary income will be equal to
the fair market value of the shares on the date of grant without giving effect
to the restrictions on transfer. In any event, at the time the participant
recognizes income with respect to the restricted stock, the Company is entitled
to a deduction in an equal amount, subject to the limitations described below.
Limitations on Company's Ability to Take Deductions. The Company must
satisfy applicable federal tax reporting requirements with respect to stock
awards under the Equity Plan in order to be entitled to the deductions described
above. In addition, Section 162(m) of the Code provides that compensation of any
individual who is the Chief Executive Officer or any of the four other most
highly-paid officers of the Company may not be deducted to the extent such
compensation exceeds $1 million in any taxable year, unless such compensation
qualifies as "performance-based" under Section 162(m). Awards granted under the
Equity Plan should be able to qualify as performance-based for purposes of
Section 162(m) if they are either options granted with an exercise price not
less than fair market value on the date of grant, or restricted stock vesting of
which is contingent upon the achievement of objective performance goals; it is
expected that the Initial Equity Incentive Awards described below will so
qualify. However, the Equity Plan permits the making of awards that would not
qualify as performance-based compensation.
If Awards under the Equity Plan are accelerated in connection with a Change
in Control of the Company, all or a portion of the value of such Awards may
constitute "excess parachute payments." The Company would not be permitted to
deduct excess parachute payments, and the recipient of such a payment would be
subject to a 20 percent federal excise tax. Furthermore, excess parachute
payments to individuals covered by Section 162(m) of the Code would reduce the
$1 million limitation on deduction of their compensation by an equal amount, and
thus could result in other compensation to such individuals being nondeductible.
INITIAL EQUITY INCENTIVE AWARDS AND ANTICIPATED ANNUAL AWARDS.
The Board and its Compensation Committee on February 23, 1996 (the "Award
Date") awarded certain key executives, subject to shareholder approval of the
Equity Plan, the options to purchase Class A Common Stock and the restricted
Class A Common Stock described below (the "Initial Equity Incentive Awards").
There are two categories of Initial Equity Incentive Awards: first, as part of
the transition in senior management that will follow the retirement of Messrs.
Franke and Sveen, awards of Special Options were made to certain key management
personnel. The exercise price of the Special Options is 120% of the market price
of shares of the Class A Common Stock at the close of business on the Award
Date. Second, awards of restricted stock and options (the "In Lieu Awards") were
made in exchange for reductions in cash incentive awards that would otherwise be
payable for 1996 and 1997. The exercise price of the options included in the In
Lieu Awards (the "In Lieu Options") is, for a portion of the options, 120%, and
for the remainder 100%, of the market price of shares of the Class A Common
Stock at the close of business on the Award Date. The Initial Equity Incentive
Awards, included in the table below, are subject to shareholder approval of the
Equity Plan.
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<PAGE> 25
The Committee does not expect to make additional Awards under the Equity
Plan in 1996 or 1997 to the executive officers (the members of the Company's
management committee) who have received Initial Equity Incentive Awards. It
does, however, anticipate making additional Awards under the Equity Plan to a
broader group of employees as part of the Company's annual incentive
compensation program. These anticipated awards are included in the amounts shown
as awards to the "non-executive officer employee group" shown in the table
described below.
The following table shows the Initial Equity Incentive Awards that have
been made subject to shareholder approval of the Equity Plan and the Awards that
the Company anticipates making to non-executive officer employees during 1996
and 1997:
<TABLE>
<CAPTION>
AWARDS IN LIEU OF
1996-97 CASH BONUS AWARDS
-------------------------------------
SPECIAL OPTIONS OPTIONS
---------------------- ----------------------
NUMBER OF EXERCISE RESTRICTED NUMBER OF EXERCISE
NAME SHARES PRICE STOCK SHARES PRICE
- ---------------------------------------- --------- -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
Richard J. Franke
Chairman and CEO...................... -- -- -- -- --
Donald E. Sveen
President and COO..................... -- -- -- -- --
Timothy R. Schwertfeger
Executive Vice President
(Chairman- and CEO-elect)............. 125,000 $30 44,000 220,000 $30
Anthony T. Dean
Executive Vice President
(President- and COO-elect)............ 125,000 $30 44,000 220,000 $30
John P. Amboian
Executive Vice President.............. 65,000 $30 18,000 44,620 $25
and CFO 24,000 $30
All executive officers.................. 475,000 $30 162,000 202,540 $25
as a group 507,000 $30
Non-executive officer................... 275,000 (1) 183,000 820,460 (1)
employee group(1)
</TABLE>
- -------------------------
(1) Included in these Awards are the following Initial Equity Incentive Awards:
(a) Special Options on 125,000 shares, with an exercise price of $30; and
(b) "In Lieu" awards of 28,000 shares of restricted stock and awards of
options on 133,460 shares, with an exercise price of $25, and of options on
21,000 shares, with an exercise price of $30.
Cash incentive awards for 1996 and 1997 to recipients of the In Lieu Awards
that were included in the Initial Equity Incentive Awards will be reduced from
the amounts otherwise payable under the Executive Officer Performance Plan by an
amount equal to the "fair value" of the In Lieu Awards, as determined by the
Compensation Committee as of the Award Date. Specifically for the
officer/directors, the cash bonus awards
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<PAGE> 26
that will be payable to Messrs. Schwertfeger and Dean will be reduced by $1
million each for 1996 and by an additional $1 million each for 1997, reflecting
the "fair value" of their Initial In Lieu Awards.
In determining "fair value," the Compensation Committee valued restricted
Class A Common Stock at a discount to the closing market price of the Class A
Common Stock on the Award Date, with the discount equal to 3% of the market
price for each year of restriction. Options were valued at a 1:4 ratio to the
fair value of each share of restricted Class A Common Stock for the options with
a strike price established at 100% of the market price at the Award Date and at
a 1:5 ratio for options with a strike price established at 120% of the market
price at the Award Date. These option value ratios were derived by application
of a modified Black-Scholes option pricing model.
Restricted Class A Common Stock included as part of the Initial Equity
Incentive Awards will vest in a single installment on January 1, 1999. Vesting
will be subject to the recipient's having earned in 1996 and 1997 incentive
awards at least equal in the aggregate to the fair value of such restricted
shares.
In Lieu Option Awards become exercisable in a single installment on January
1, 1999 and Special Options included as part of the Initial Equity Incentive
Awards become exercisable in a single installment on January 1, 2000.
OTHER PLAN TERMS.
Amendment. The Equity Plan may be terminated, suspended, amended or
modified by the Board of Directors with the consent of a majority of the Class B
Directors, provided that no termination, suspension, amendment or modification
(i) may be made without shareholder approval to the extent such approval is
required by federal or state law, regulation or rule of any stock exchange or
automated quotation system on which the Class A Common Stock is listed or
quoted, or (ii) may, without the consent of the participant affected, impair the
rights of a participant under the Equity Plan.
Vote Required. Approval of the Equity Plan requires the affirmative vote of
the holders of a majority of the shares of Common Stock present in person or by
proxy at the Annual Meeting and entitled to vote on the Equity Plan. A holder of
Class A Common Stock may, with respect to the approval of the Equity Plan, (i)
vote "FOR" such approval, (ii) vote "AGAINST" such approval or (iii) "ABSTAIN"
from voting on the Equity Plan. A vote to abstain on this matter will have the
effect of a vote against approval of the Equity Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1996 EQUITY
INCENTIVE AWARD PLAN. UNLESS OTHERWISE INSTRUCTED, THE PROXY HOLDERS WILL VOTE
THE PROXIES RECEIVED BY THEM FOR APPROVAL OF THE EQUITY PLAN.
B. APPROVAL OF THE EXECUTIVE OFFICER PERFORMANCE PLAN
The Compensation Committee has also recommended, and the Board has also
approved, subject to shareholder approval, a restatement of the Cash Bonus Plan
into the following two plans: (i) the "Executive Officer Performance Plan" (the
"Performance Plan") covering not less than five executive officers (a group that
currently numbers 9) selected annually by the Compensation Committee; and (ii)
the "Annual Incentive Award Plan" (the "Incentive Plan") covering all other
officers and employees who are selected by the Bonus Committee. The principal
purpose of the restatement is to ensure that the compensation of key executives
is
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<PAGE> 27
"performance-based," and fully deductible for federal income tax purposes. In
this connection, the Board proposes for approval by shareholders the Performance
Plan, which is summarized below.
The portion of the Award Pool which is available for payment of annual
incentive awards to executives under the Performance Plan (the "Performance Plan
Pool") is equal to the total number of executive officers participating in the
Performance Plan for the year times 2.5 percent of the amount, if any, by which
the Company's pre-bonus, pre-tax net operating income ("Net Operating Income")
for the year exceeds an amount that represents a 12 percent return on beginning
equity capital ("Incentive Earnings"), but not to exceed 25% of Net Operating
Income. Shortly after the close of each fiscal year, the Compensation Committee
will certify whether the preestablished threshold return on equity has been
satisfied and, if so, determine the awards payable under the Performance Plan.
The cash incentive awards payable to each of the Chief Executive Officer
and the Chief Operating Officer will continue to be equal to 2.5 percentage
points of Incentive Earnings (the "Maximum Percentage"), but for 1996 and 1997
will be reduced by the fair value of such officer's Initial Equity Incentive In
Lieu Award (as determined by the Compensation Committee as of the Award Date)
and in future years will be similarly reduced by the fair value of any future In
Lieu Awards. The cash incentive award payable to each participant other than the
Chief Executive Officer and the Chief Operating Officer may not be greater than
the Maximum Percentage, but it is expected that such awards will be reduced to
lesser amounts, as determined by the Compensation Committee based upon the
recommendation of the Bonus Committee and other factors considered relevant by
the Compensation Committee, and will be further reduced for 1996 and 1997 by the
fair value of such participant's Initial Equity Incentive In Lieu Award (as
determined by the Compensation Committee as of the Award Date) and in future
years will be similarly reduced by the fair value of any future equity awards
made in exchange for reductions in cash compensation. To the extent an award is
reduced below the Maximum Percentage, the excess will not be available to the
other executives participating in the Performance Plan but will be available for
distribution to participants in the firm-wide Incentive Plan. Generally, a
participant must be employed by the Company or a subsidiary of the Company on
the last day of the applicable plan year to be entitled to receive a cash
incentive award for the year. However, if a participant's employment is
terminated as a result of death, disability or retirement, by the Company or a
subsidiary without Cause, by the Participant for Constructive Termination or as
a result of a Disaffiliation Transaction (as those terms are defined in the
Performance Plan), a pro rata award will be payable for the year of termination.
Under the Performance Plan, each participant has the right to defer receipt
of all or a part of any cash payment due with respect to an award, in accordance
with the terms of the Deferred Bonus Plan. The Deferred Bonus Plan provides the
opportunity to defer payment of all or a portion of awards under the Performance
Plan pursuant to a participation agreement setting forth the portion of the
bonus that is to be deferred, the period for which payment is to be deferred,
the date on which payment is to begin (not before age 55 while employed), and
the period over which payment is to be made. Deferred amounts accrue interest at
the prime rate.
Awards under the Performance Plan for services to be rendered in 1996 are
not determinable since they will be dependent on 1996 operating results. If the
Performance Plan had been in effect in 1995, and if the Initial Equity Incentive
Awards had been made in 1995, but had had value equal to their value as of the
Award Date, the cash incentive awards that would have been paid to Messrs.
Franke and Sveen, who received no Initial Equity Incentive Awards in light of
their impending retirements, would have been unchanged from
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<PAGE> 28
that which each received as shown in the Summary Compensation Table on page 10
of this Proxy Statement. The Initial Equity Incentive Awards that would have
been paid to Messrs. Schwertfeger and Dean would have been equal to the 1995
bonus each received as shown in the Summary Compensation Table on page 10 of
this Proxy Statement, less approximately $1,000,000, an amount equal to one-half
of the fair value of such officer's In Lieu Award (as determined by the
Compensation Committee as of the Award Date), and Messrs. Schwertfeger and Dean
would have received the Initial Equity Incentive Awards. The awards that would
have been made in 1995 to the other executive officers who would have
participated in the Performance Plan are not determinable because the amounts of
such awards are at the discretion of the Compensation Committee, subject to the
limit of the Maximum Percentage, and subject to reduction in exchange for any In
Lieu Awards. Similarly, because of the Compensation Committee's authority to
reduce bonus amounts payable to such other executive officers, the amount which
would have been paid to all executive officers as a group under the Performance
Plan is not determinable.
Amendment. The Performance Plan may be amended or terminated by a majority
vote of the Board of Directors, provided that no amendment or termination may
have the effect of increasing the award that would otherwise be payable to a
participant for any plan year that begins before such amendment or termination
is adopted by the Board of Directors.
Vote Required. Approval of the Performance Plan requires the affirmative
vote of the holders of a majority of the shares of Common Stock present in
person or by proxy at the Annual Meeting and entitled to vote on the Performance
Plan. A holder of Class A Common Stock may, with respect to the approval of the
Performance Plan, (i) vote "FOR" such approval, (ii) vote "AGAINST" such
approval or (iii) "ABSTAIN" from voting on the Performance Plan. A vote to
abstain on this matter will have the effect of a vote against approval of the
Performance Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE EXECUTIVE
OFFICER PERFORMANCE PLAN. UNLESS OTHERWISE INSTRUCTED, THE PROXY HOLDERS WILL
VOTE THE PROXIES RECEIVED BY THEM FOR APPROVAL OF THE EXECUTIVE OFFICER
PERFORMANCE PLAN.
PLAN ADMINISTRATION.
The Performance Plan and the Equity Plan will be administered by the
Compensation Committee. Each member of the Compensation Committee is, and must
be, a "disinterested person," within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 and an "outside director" within the meaning of
Section 162(m) of the Code and the regulations thereunder. The Compensation
Committee is authorized to establish rules and regulations for administration of
the Performance Plan and the Equity Plan, to make awards under those Plans, and
to make determinations and interpretations under those Plans. The Incentive Plan
will be administered by the Bonus Committee, a committee consisting of the
Company's Chief Executive and Chief Operating Officers.
SELECTION OF AUDITORS
The independent certified public accounting firm of KPMG Peat Marwick LLP,
a member of the international accounting firm Klynveld Peat Marwick Goerdeler,
has been selected by the Board of Directors upon recommendation of its Audit
Committee to act as the auditors for the Company and its subsidiaries for
25
<PAGE> 29
the current fiscal year. At the annual meeting, the shareholders will be asked
to ratify the Board of Directors' selection. A holder of Class A Common Stock
may, with respect to the selection of independent auditors, (i) vote "FOR" such
selection, (ii) vote "AGAINST" such selection or (iii) "ABSTAIN" from voting on
the selection. A vote to abstain from voting on this matter will have the effect
of a vote against such selection.
KPMG Peat Marwick LLP, which has served as independent auditors of the
Company and its subsidiaries since the Company's inception in March 1992, is
expected to have a representative present at the annual meeting to respond to
appropriate questions of shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION
OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS FOR THE COMPANY. UNLESS
OTHERWISE INSTRUCTED, THE PROXY HOLDERS WILL VOTE THE PROXIES RECEIVED BY THEM
FOR SUCH RATIFICATION.
SHAREHOLDER PROPOSALS -- 1997 ANNUAL MEETING
Proposals of shareholders intended to be presented at the Company's 1997
annual meeting of shareholders must be received by the Company by December 1,
1996 in order to be considered for inclusion in the Company's 1997 Annual
Meeting Proxy Statement and form of proxy to be mailed in March 1997.
The Nominating Committee will consider persons recommended by shareholders
as candidates for election to the Board of Directors at the annual meeting of
shareholders. The By-laws of the Company provide that a shareholder wishing to
nominate a candidate for election to the Board is required to give notice to the
Secretary of the Company of such nomination. The notice of nomination must be
received by the Company not less than 60 days nor more than 90 days prior to the
shareholders' meeting, or if less than 70 days' notice or prior disclosure of
the meeting date is given or made, the notice of nomination must be received
within ten days after the meeting date is announced. The notice of nomination is
required to contain certain information as set forth in the By-laws about both
the nominee and the shareholder making the nomination. The Company may require
that the proposed nominee furnish other information to determine that person's
eligibility to serve as director. A nomination which does not comply with the
above requirements will not be considered.
Such proposals or nominations should be addressed to James J. Wesolowski,
Secretary, The John Nuveen Company, 333 West Wacker Drive, Chicago, Illinois
60606.
GENERAL
Management does not intend to present and does not have reason to believe
that others will present any other items of business at the meeting. However, if
other matters are properly presented at the meeting for a vote, the proxies will
be voted upon such matters in accordance with the judgment of the persons acting
under the proxies.
A list of shareholders entitled to be present and to vote at the meeting
will be available at the offices of the Company, 333 West Wacker Drive, Chicago,
Illinois, for inspection by any shareholder during regular business hours for
ten days prior to the date of the meeting.
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<PAGE> 30
Failure of a quorum to be present at the meeting will necessitate
adjournment. The persons named in the enclosed proxy may also move for an
adjournment of the meeting to permit further solicitation of proxies with
respect to any of the proposals if they determine that adjournment and further
solicitation is reasonable and in the best interests of the shareholders. Under
the Company's By-laws, an adjournment of a meeting requires the affirmative vote
of a majority of the shares present in person or represented by proxy at the
meeting.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
JAMES J. WESOLOWSKI
Secretary
27
<PAGE> 31
EXHIBIT A
NUVEEN 1996 EQUITY INCENTIVE AWARD PLAN
The John Nuveen Company hereby establishes the Nuveen 1996 Equity Incentive
Award Plan for the benefit of its eligible Participants (as hereinafter defined)
for the purposes hereinafter set forth.
I. DEFINITIONS
(a) "Award" shall mean an award of Non-Qualified Stock Options, Restricted
Stock, or any combination thereof.
(b) "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.
(c) "Board of Directors" shall mean the Board of Directors of the Company.
(d) "Bonus Committee" shall mean the senior executive officers of the
Company selected by the Board of Directors to administer the Company's Annual
Incentive Award Plan.
(e) "Cause" shall have the meaning specified by the Committee in connection
with the grant of any Award; provided, that if the Committee does not so
specify, "Cause" shall mean (i) the willful engaging by the Participant in
conduct which the Participant 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 Company
or the Participant materially injurious to the Company; (ii) any act or acts of
serious dishonesty or gross misconduct which result in material damage to the
Company or its business or reputation or which the Board of Directors reasonably
determines do materially and adversely affect the value, reliability or
performance of the Participant to the Company; (iii) the willful and continued
failure by the Participant to perform his or her duties to the Company (which
may include any sustained and unexcused absence of the Participant from the
performance of such duties, 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 Participant by the Board of Directors
identifying the manner in which the Participant has failed to substantially
perform his or her duties. For purposes of the proviso of the preceding
sentence: (i) no act or failure to act on the Participant'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 Company; (ii) any act or failure to act by the
Participant based upon authority given pursuant to a resolution duly adopted by
the Board of Directors of the Company or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, in
good faith and in the best interests of the Company; and (iii) notwithstanding
the foregoing, the Participant shall not be deemed to have been terminated with
Cause unless and until there shall have been delivered to the Participant a copy
of a resolution duly adopted by the affirmative vote of a majority of the entire
Board of Directors of the Company
A-1
<PAGE> 32
at a meeting of the Board called and held after such reasonable notice to the
Participant and at which the Participant has had an opportunity, together with
his or her other counsel, to be heard before such Board, finding that in the
good faith opinion of such Board, the Participant was guilty of the conduct set
forth above and specifying the particulars thereof in detail.
(f) "Change in Control" shall mean any of the following:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
voting securities of the Company where such acquisition causes such Person
to own 20% or more of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not be deemed to result in a Change in Control: (A) any
acquisition directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (D) any acquisition by any corporation pursuant to a transaction
that complies with clauses (A), (B) and (C) of subsection (iii) below; and
provided, further, that if any Person's beneficial ownership of the
Outstanding Company Voting Securities reaches or exceeds 20% as a result of
a transaction described in clause (A) or (B) above, and such Person
subsequently acquires beneficial ownership of additional voting securities
of the Company, such subsequent acquisition shall be treated as an
acquisition that causes such Person to own 20% or more of the Outstanding
Company Voting Securities; or
(ii) individuals who, as of the effective date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) The approval by the shareholders of the Company of (x) a
reorganization, merger or consolidation or sale, or other disposition of
all or substantially all of the assets of the Company or (y) the
acquisition of assets or stock of another corporation in exchange for
voting securities of the Company (each of (x) and (y), a "Business
Combination") or, if consummation of such Business Combination is subject,
at the time of such approval by shareholders, to the consent of any
government or governmental agency, the obtaining of such consent (either
explicitly or implicitly by consummation); excluding, however, such a
Business Combination pursuant to which (A) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a
corporation
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that as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Voting Securities, (B) no Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, (except to the extent that such ownership existed prior to the
Business Combination) an amount of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation representing the greater of (1) 20% thereof
or (2) a percentage thereof equal to or greater than the percentage thereof
held after such transaction by the persons who were the owners of the
Company's Class B stock prior to such transaction; and (C) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, unless a majority of the Incumbent Board
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.
(g) "Class A Common Stock" shall mean the Class A Common Stock of the
Company, par value $.01 per share.
(h) "Class B Common Stock" shall mean the Class B Common Stock of the
Company, par value $.01 per share.
(i) "Class B Directors" shall mean those members of the Board of Directors
of the Company that have been nominated and elected by the holders of the Class
B Common Stock in accordance with the provisions of the Company's certificate of
incorporation.
(j) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(k) "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, each of whom (i) is not an employee of the
Company or any Nuveen Subsidiary, (ii) is 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, and (iii) is an "outside director" within
the meaning of Section 162(m) of the Internal Revenue Code.
(l) "Common Stock" shall mean the Class A Common Stock and the Class B
Common Stock.
(m) "Company" shall mean The John Nuveen Company, a Delaware corporation,
and its successors.
(n) "Constructive Termination" shall have the meaning specified by the
Committee in connection with the grant of any Award; provided, that if the
Committee does not so specify, "Constructive Termination" shall mean any of the
following, without the written consent of the Participant: (i) a substantial
adverse change in
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the Participant's position, authority, responsibilities or titles; (ii) a
requirement that the Participant retire before reaching age 65; or (iii) a
material reduction in the Participant's base salary, incentive compensation
opportunities, or other employee benefits; or (iv) in the case of an
officer/director, a requirement that the Participant relocate to an office or
location other than that at which he is based at the grant date of an Award. For
purposes of the proviso of the preceding sentence, a Participant shall not be
deemed to have terminated his or her employment as a result of Constructive
Termination unless he or she gives notice within 90 days after an event
described in such proviso and the Company has not cured the condition within 60
days of its receipt of such notice.
(o) "Deferred Dividend Equivalents" means Dividend Equivalents, the
delivery of which is deferred pursuant to Section 3.3(a), together with the
interest thereon specified in Section 3.3(c).
(p) "Deferred Restricted Stock" means Restricted Stock, the delivery of
which is deferred pursuant to Section 3.3(a).
(q) "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 or her normal duties to the Employer.
(r) "Dividend Equivalent" shall mean a right, provided automatically in
connection with an Award of Deferred Restricted Stock, to receive on the payment
date for any dividend on the Class A Common Stock cash compensation from the
Company equal to the dividend that would have been paid on such shares of
Restricted Stock (or the Fair Market Value of such dividend, if such dividend
would not have been paid in cash), if such shares had been issued and
outstanding, fully vested and held by the Participant on the record date for
payment of such dividend; provided, that if such dividend would not have been
paid in cash, the Dividend Equivalent with respect thereto shall not be paid
unless and until certificates evidencing the Deferred Restricted Stock with
respect to which it is paid are issued to the Participant (at which time such
Dividend Equivalent shall be paid together with interest thereon at the Prime
Rate from the date such dividend would have been payable until the payment date
for such Dividend Equivalent); and provided, further, that such payment of all
Dividend Equivalents may also be deferred pursuant to the deferral election with
respect to such Restricted Stock. Unless specifically provided otherwise, the
term "Dividend Equivalents" includes (but is not limited to) Deferred Dividend
Equivalents.
(s) "Effective Date" of an Award shall mean the date of the grant as
specified by the Committee.
(t) "Employer" shall mean the Company with respect to its employees and
each Nuveen Subsidiary with respect to its employees.
(u) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(v) "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.
(w) "Fair Market Value" of a share of Class A Common Stock shall mean the
closing price of the Class A Stock on the New York Stock Exchange as reported on
the 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
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which there was trading in the Class A Common Stock. "Fair Market Value" of
other property shall be determined by the Committee.
(x) "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 Code, as such section may be in
effect from time to time.
(y) "Nuveen Subsidiary" shall mean any corporation 50% or more of the
voting power of which is owned, directly or indirectly, by the Company.
(z) "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.
(aa) "Performance Goals" shall mean performance goals established by the
Committee prior to the grant of an Award based on the attainment of one or any
combination of the following: specified levels of earnings per share from
continuing operations, operating income, revenues, return on operating assets,
return on equity, shareholder return (measured in terms of stock price
appreciation) and/or total shareholder return (measured in terms of stock price
appreciation and dividends), achievement of cost control, or stock price, in
each case of the Company or a Nuveen Subsidiary, or a division or department of
the Company or a Nuveen Subsidiary for or within which the Participant is
primarily employed, and that are intended to qualify under Section 162(m) of the
Internal Revenue Code. Such Performance Goals also may be based upon attaining
specified levels of Company performance under one or more of the measures
described above relative to the performance of other corporations. Such
Performance Goals shall be set by the Committee within the time period
prescribed by Section 162(m).
(bb) "Plan" shall mean this Nuveen 1996 Equity Incentive Award Plan.
(cc) "Prime Rate" shall mean the prime rate of interest as reported by The
First National Bank of Chicago or any successor thereto, or a comparable bank
selected by the Committee.
(dd) "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.
The restrictions on and risk of forfeiture of Restricted Stock generally will
expire on a specified date, upon the occurrence of an event and/or on an
accelerated basis under certain circumstances specified in the Plan or an
agreement relating to the Restricted Stock. Unless specifically provided
otherwise, the term "Restricted Stock" includes (but is not limited to) Deferred
Restricted Stock.
(ee) "Retirement" shall mean the retirement of a Participant from the
employment of the Company or a Nuveen Subsidiary at (i) such Participant's
normal retirement date upon reaching age 65, or (ii) 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 or any successor thereto) is equal to or greater than
90, or (B) with the approval of the Committee.
(ff) "Section 162(m)" shall mean Section 162(m) of the Code and the
Treasury Regulations thereunder.
(gg) "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
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Employer), or the consummation of a transaction whereby a Participant's Employer
(other than the Company) ceases to be a Nuveen Subsidiary (such consummation, a
"Disaffiliation Transaction"). The employment of a Participant who is on an
approved leave of absence in excess 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 and Deferred Units.
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. The
Committee may (i) delegate to any one or more of the members thereof or to an
officer of the Company any of its authority with respect to the Plan, other than
any such delegation that would cause Awards or other transactions under the Plan
to cease to be exempt from Section 16(b) of the Exchange Act or to cease to
quality as "performance-based compensation" under Section 162(m) of the Code,
and (ii) authorize any one or more of the members thereof or any officer of the
Company to execute and deliver documents on behalf of the Committee.
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 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, 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 replacement of
Awards; provided, however, that no such modification, exchange or substitution
shall be to the detriment of a Participant with respect to any Award previously
granted, and provided, further, that in no event shall the Committee be
permitted to reduce the Exercise Price of any outstanding Option to exchange or
replace an outstanding Option with a new Option with a lower Exercise Price,
except pursuant to Section 4.1. 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
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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. Notwithstanding any other provision of
the Plan, if the Committee designates an Award of Restricted Stock or Deferred
Units as being intended to qualify as "performance-based compensation" under
Section 162(m), neither the Committee nor the Board of Directors shall have any
power to take any action with respect to such Award, if the result would be to
cause it to cease to qualify as "performance-based compensation" under Section
162(m).
2.3 Participation.
Officers and other full-time salaried employees of the Company or a Nuveen
Subsidiary, including those who also serve as directors 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
the Bonus Committee the authority to select individuals for participation in the
Plan and to whom Awards may be granted, 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 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.
(a) The total number of shares of Common Stock reserved and available for
issuance in connection with Awards under the Plan shall be 3,800,000, all of
which shall be Class A Common Stock; provided, however, that the total number of
shares of Class A Common Stock that may be issued in connection with Awards of
Restricted Stock shall not exceed 950,000. 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. The maximum number of shares of
Class A Common Stock with respect to which any one Participant may be granted
Awards in any one calendar year shall be 600,000 for Options and 120,000 for
Restricted Stock . 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 or to any one individual as
set forth above. 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. If any shares of Class A Common Stock subject to an
Award are forfeited or such Award otherwise terminates without a distribution of
shares to the Participant, or if shares of Class A Common Stock are tendered to
the Company in satisfaction of the exercise price of an option awarded
hereunder, 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, termination or tender, again be available for Awards under the
Plan, provided that 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.
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(b) Notwithstanding the foregoing, Awards granted through the assumption
of, or in substitution or exchange for, similar awards in connection with the
acquisition of another corporation or business entity shall not be counted for
purposes of applying the above limitations on numbers of shares available for
Awards generally or any particular kind of Award under the Plan.
(c) 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; "In Lieu Awards".
(a) Non-Qualified Stock Options and Restricted Stock 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
or any other right of a Participant to receive payment from the Company or any
Nuveen Subsidiary.
(b) Without limiting the generality of the foregoing, the Committee may
from time to time make an Award hereunder in lieu of (and the vesting of which
may be contingent upon the recipient's having earned at some future period) a
specified cash award under the Nuveen Executive Officer Performance Plan or the
Nuveen Annual Incentive Award Plan (the "Incentive Plans"). In this event, the
Committee shall establish at the time of the grant of such an "In Lieu Award"
the "Fair Value" of such award, which shall be the amount by which the cash
award otherwise payable to the recipient under the Incentive Plans for one or
more specified Plan Years will be reduced (and the vesting of the In Lieu Award
may be dependent upon having earned an award under the Incentive Plans at least
equal to the Fair Value of the In Lieu Award). In determining "Fair Value," the
Committee may take into account such factors as it deems appropriate, including
but not limited to the Fair Market Value of the shares represented by any award,
any restrictions on vesting and transferability of an award, and values
calculated by option pricing models.
(c) 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
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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.
(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 Section 3.2(i).
(e) Except as otherwise provided in Section 3.2(i) or Section 4.1(b),
Non-Qualified Stock Options awarded to a Participant shall become exercisable on
such date or dates, and subject to such conditions, as specified by the
Committee in connection with the grant thereof. 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.
(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 100 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 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, through the delivery (actual or constructive) 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 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.
(i) (1) Except as otherwise specified by the Committee at the time of
grant, in the case of Options that are not In Lieu Awards, in the event of
Termination of Employment of an optionee other than by reason of the optionee's
death, Disability or Retirement, by the Employer without Cause, by the optionee
as a result of Constructive Termination or as a result of a Disaffiliation
Transaction, any Options previously awarded to such optionee that have not
become exercisable as of the date of Termination of Employment shall be
forfeited, and all other Options that are exercisable 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,
any Options not exercised as of the date of Termination of Employment (including
Options that are otherwise not yet exercisable) may be exercised by the optionee
or the optionee's
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Beneficiary at any time within three (3) years after 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. If Termination of Employment is by
the Employer without Cause, by the optionee as a result of Constructive
Termination or as a result of a Disaffiliation Transaction, any Options not
exercised as of the date of Termination of Employment (including Options that
are otherwise not yet exercisable) may be exercised by the optionee or the
optionee's Beneficiary at any time within sixty (60) days after 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.
(2) Except as otherwise specified by the Committee at the time of grant, in
the case of Options that are In Lieu Awards, in the event of Termination of
Employment of an optionee other than by reason of the optionee's death,
Disability or Retirement, by the Employer without Cause, by the optionee as a
result of Constructive Termination or as a result of a Disaffiliation
Transaction, any Options previously awarded to such optionee that have not
become exercisable as of the date of Termination of Employment shall be
forfeited, and all other Options that are exercisable 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,
any Options not exercised as of the date of Termination of Employment (including
Options that are otherwise not yet exercisable) may be exercised by the optionee
or the optionee's Beneficiary at any time until the expiration date of the
Option) to the extent of the total number of shares subject to Option. If
Termination of Employment is by the Employer without Cause, by the optionee as a
result of Constructive Termination or as a result of a Disaffiliation
Transaction, any Options not exercised as of the date of Termination of
Employment (including Options that are otherwise not yet exercisable) may be
exercised by the optionee or the optionee's Beneficiary at any time until the
expiration date of the Option to the extent of the total number of shares
subject to 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.
(m) The Committee may, in its discretion, from time to time establish
procedures whereby optionees may elect to defer receipt of shares of Class A
Common Stock purchased by exercise of Options.
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3.3 Restricted Stock.
(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, including without limitation the
achievement of Performance Goals. If a Participant so elects in accordance with
such procedures as the Committee may from time to time specify, the delivery of
such Restricted Stock and, if the deferral election so specifies, of the
Dividend Equivalents with respect thereto, shall be deferred until the date or
dates specified in such election.
(b) Restricted Stock other than Deferred Restricted Stock granted under the
Plan shall be evidenced by one or more 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 such certificate, and each Participant
awarded such Restricted Stock shall deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock, during the period when the
Restricted Stock is nontransferable and/or subject to a risk of forfeiture, at
the end of which period certificates evidencing such Restricted Stock shall be
delivered to the Participant (unless such Restricted Stock has previously been
forfeited pursuant to Section 3.3(e)). From the Effective Date of the Award of
such Restricted Stock through the earlier of (i) the date such Restricted Stock
is forfeited pursuant to Section 3.3(e) and (ii) the date certificates
evidencing such Restricted Stock are delivered to the Participant, the
Participant shall have all rights of a stockholder with respect to such shares,
including but not limited to the right to receive all dividends and other
distributions paid with respect thereto and to vote (in person or by proxy) such
shares at any meeting of the stockholders of the Company; provided, that any
dividend or distribution that is not payable in cash shall be subject to the
same restrictions on transferability and other restrictions as the Restricted
Stock with respect to which it is paid and shall be treated for all purposes of
the Plan as if it were part of the Award of such Restricted Stock.
(c) Deferred Restricted Stock shall not be issued until the date or dates
that it is to be delivered to the Participant in accordance with his or her
deferral election pursuant to Section 3.3(a), at which time certificates
evidencing such Deferred Restricted Stock shall be delivered to the Participant
(unless such Deferred Restricted Stock has previously been forfeited pursuant to
Section 3.3(e)). From the Effective Date of an Award of Deferred Restricted
Stock through the earlier of (A) the date such Deferred Restricted Stock is
forfeited pursuant to Section 3.3(e) and (B) the date certificates evidencing
such Deferred Restricted Stock are delivered to the Participant, the Participant
shall be entitled to receive as compensation from the Company Dividend
Equivalents with respect thereto, but shall have none of the rights of a
stockholder with respect to such shares; provided, that if the deferral election
made with respect to such Deferred Restricted Stock specifies that the Dividend
Equivalents will be deferred, the Dividend Equivalents shall not be paid until
the date or dates specified in such deferral election, at which time they shall
be paid together with interest thereon at the Prime Rate from the date such
Dividend Equivalents would otherwise have been paid until the actual payment
date.
(d) Neither Awards of Restricted Stock under the Plan which have not fully
vested under the vesting provisions applicable thereto, nor the right to vote
and receive dividends on unvested Restricted Stock which is not Deferred
Restricted Stock, nor the right to receive Dividend Equivalents on Deferred
Restricted Stock, may 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
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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.
(e) In the event of Termination of Employment of a Participant other than
by reason of the Participant's death, Disability or Retirement, by the Employer
without Cause, by the Participant as a result of Constructive Termination, or as
a result of a Disaffiliation Transaction, all shares of Restricted Stock 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, 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, by the Employer without
Cause, by the Participant as a result of Constructive Termination, or as a
result of a Disaffiliation Transaction, all restrictions and risk of forfeiture
with respect to Restricted Stock that have not fully vested on the date of
Termination of Employment shall lapse and all such shares of Restricted Stock
shall become fully and irrevocably vested, all Deferred Restricted Stock shall
be immediately delivered and all Deferred Dividend Equivalents shall be
immediately paid in full to the Participant.
IV. OTHER PROVISIONS
4.1 Adjustments Upon Corporate Changes.
(a) Without limiting the provisions of subsection (b) of this Section 4.1,
in the event that (i) the outstanding shares of Common Stock are increased,
decreased, 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 (ii) 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, in the Restricted Stock
theretofore awarded (if necessary to avoid an adverse effect on the value of
such Restricted Stock), and in the number and kind of shares subject to
outstanding Non-Qualified Stock Options and the exercise price thereof.
(b) Notwithstanding any other provision of the Plan, in the event of a
Change in Control, unless the right 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 be delivered to the Participant entitled thereto; (iii) all
Deferred Restricted Stock shall be immediately delivered to the Participant
entitled thereto; and (iv) all Deferred Dividend Equivalents not previously paid
shall be immediately paid over to the Participant entitled thereto.
(c) 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;
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provided, however, that no such modification shall be made to the detriment of a
Participant with respect to any Award previously granted; and provided, further,
that no such modification may be made if the result would be to cause an Award
that was previously qualified as "performance-based compensation" under Section
162(m) of the Code to cease to so qualify.
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 her Beneficiary
have any right to assign, pledge or hypothecate any benefits or rights
hereunder.
(c) Except as provided in Section 3.3(d) with respect to Restricted Stock
that is not Deferred Restricted Stock, 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 and delivered to 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,
settlement of Awards, and the payment of dividends, Dividend Equivalents and
interest with respect to 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 Common Stock or cash in settlement of Awards or as
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payment of dividends, Dividend Equivalents or interest with respect to Awards,
that the Participant pay to the Company any sums that may be required to satisfy
any applicable withholding tax, and unless otherwise determined by the
Committee, withholding obligations may be settled with shares of Class A Common
Stock, including Class A Common Stock that is part of the Award that gives rise
to the withholding requirement, in accordance with procedures established by the
Committee. 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.
4.5 Amendment and Termination of Plan and Awards.
Notwithstanding anything herein to the contrary other than the last
sentence of Section 2.2, 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; and provided, further, that no such
modification may be made if the result would be to cause an Award that was
previously qualified as "performance-based compensation" under Section 162(m) of
the Code to cease to so qualify; and provided, further, that the provisions of
Section 4.1(b) of the Plan shall not be amended in any respect following a
Change in Control.
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 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
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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 (i) by will or the laws of descent and distribution (or
to a Beneficiary in the event of a Participant's death), (ii) 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, or (iii) in the case of Options,
pursuant to a gift to such optionee's children, whether directly or indirectly
or by means of a trust or partnership or otherwise, if expressly permitted under
the applicable option agreement. If then required by Rule 16b-3, Options shall
be exercisable during the lifetime of a Participant only by such Participant or
his or her guardian or legal representative or the recipient of a transfer of
such Options permitted pursuant to the preceding sentence.
(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 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 February 23, 1996, subject to approval
by the Company's stockholders, and shall 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.
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1. Election of four directors - to be elected for a one-year term:
FOR all nominees listed below /x/
WITHHOLD AUTHORITY to vote
for all nominees listed below /x/
*EXCEPTIONS /x/
Nominees: Anthony T. Dean, Timothy R. Schwertfeger, Duane R.Kullberg and
Williard L. Boyd.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEES NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ____________________________________________________________________
2. Ratification of the 1996 Equity Incentive Award Plan.
FOR /x/ AGAINST /x/ ABSTAIN /x/
3. Ratification of the Executive Officer Performance Plan.
FOR /x/ AGAINST /x/ ABSTAIN /x/
4. Ratification of the selection of KPMG Peat Marwick as independent auditors
for 1996.
FOR /x/ AGAINST /x/ ABSTAIN /x/
5. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT.
Change of Address and
or Comments Mark Here /x/
Note: Please sign exactly as your
name appears on this proxy. If
signing for estates, trusts or
corporations, title or capacity
should be stated. If shares are
held jointly, each holder should
sign.
Dated:__________________ , 1996
________________________________
Signature
________________________________
Signature
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
PLEASE INDICATE YOUR CHOICE BY MARKING
AN "X" IN EITHER BLACK OR BLUE INK. / /
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THE JOHN NUVEEN COMPANY
PROXY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, JULY 9, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Timothy R. Schwertfeger, Anthony T. Dean
and James J. Wesolowski, and any of them, with full power of substitution,
proxies for the undersigned to represent and vote as specified in this Proxy
all shares of Class A Common Stock which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of The John Nuveen Company to be held on
July 9, 1996, and at any adjournment or adjournments thereof, including
authority to vote on (1) the election of directors; (2) ratification of the
1996 Equity Incentive Award Plan; (3) ratification of the Executive Officer
Performance Plan; and (4) for the selection of independent auditors in the
manner specified on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS. UNLESS
OTHERWISE INSTRUCTED ON THE REVERSE SIDE, ALL SHARES WILL BE VOTED (1) FOR THE
ELECTION OF DIRECTORS; (2) FOR THE 1996 EQUITY INCENTIVE AWARD PLAN; (3) FOR
THE EXECUTIVE OFFICER PERFORMANCE PLAN; AND (4) FOR THE SELECTION OF KPMG PEAT
MARWICK AS INDEPENDENT AUDITORS.
(THIS PROXY CONTINUES AND MUST BE VOTED AND SIGNED ON THE REVERSE SIDE)
THE JOHN NUVEEN COMPANY
P.O. BOX 11116
NEW YORK, N.Y. 10203-0116
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