Back to GetFilings.com
1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission file number 1-11123
THE JOHN NUVEEN COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 36-3817266
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 WEST WACKER DRIVE 60606
CHICAGO, ILLINOIS (Zip Code)
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 312-917-7700
Securities registered pursuant to Section 12(b) of the Act:
Class A Common Stock, $.01 par value New York Stock Exchange
(Title of Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. _______
The aggregate market value of the outstanding Common Stock held by
non-affiliates of the Registrant on March 22, 2000 was $238,766,000
The number of shares of the Registrant's Common Stock outstanding at
March 22, 2000, was 31,224,156 consisting of 6,782,418 shares of Class A Common
Stock, $.01 par value, and 24,441,738 shares of Class B Common Stock, $.01 par
value.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1999 are incorporated by reference into Parts II and IV of
this report. Portions of Registrant's Proxy Statement relating to the annual
meeting of stockholders to be held May 4, 2000 are incorporated by reference
into Parts I and III of this report.
2
PART I
ITEM 1. BUSINESS
GENERAL
The principal businesses of The John Nuveen Company (the Company) are asset
management and related research, as well as the development, marketing and
distribution of investment products and services through financial advisors who
serve the affluent and high-net-worth market segments. The Company distributes
its investment products, including mutual funds (open-end funds),
exchange-traded funds (closed-end funds), defined portfolios (unit investment
trusts), and individually managed accounts through registered representatives
associated with unaffiliated broker-dealers, commercial banks, affiliates of
insurance providers, financial planners, accountants, consultants and investment
advisers.
The Company's operations are organized around six subsidiaries including John
Nuveen & Co. Incorporated (Nuveen Investments or John Nuveen & Co.), a
registered broker and dealer in securities under the Securities Exchange Act of
1934, and five investment advisory subsidiaries registered under the Investment
Advisers Act of 1940. These include Nuveen Advisory Corp. (NAC), Nuveen
Institutional Advisory Corp. (NIAC), Nuveen Asset Management Inc. (NAM), Nuveen
Senior Loan Asset Management, Inc. (NSLAM) and Rittenhouse Financial Services,
Inc. (Rittenhouse). Nuveen Investments provides investment product distribution
and related services for the Company's managed funds and defined portfolios.
NAC, NIAC and NSLAM provide investment management for, and administer the
business affairs of, the Nuveen managed funds. NAM and Rittenhouse provide
investment management services for individual and institutional managed
accounts; Rittenhouse also acts as sub-adviser and portfolio manager for a
mutual fund managed by NIAC.
The Company is headquartered in Chicago, has offices in New York, NY, Irvine,
CA, Oakbrook, IL, Dayton, OH and Radnor, PA, and has sales representatives
located nationally. The Company is the successor to a business formed in 1898 by
Mr. John Nuveen which served as an underwriter and trader of municipal bonds.
This core business was augmented in 1961 when the Company developed and
introduced its first municipal defined portfolio, which is a fixed portfolio of
municipal securities selected and purchased by the Company and deposited in a
trust. The Company introduced its first municipal mutual fund in 1976, its first
municipal money market fund in 1981, and its first municipal exchange-traded
fund in 1987. The Company began providing individual managed account services to
investors in early 1995 and sponsored its first equity mutual fund in 1996. The
Company expanded its defined portfolio product line in mid-1997 to include
portfolios with underlying assets comprised of equity and taxable fixed-income
securities.
On January 2, 1997, the Company completed the acquisition of Flagship Resources
Inc. (Flagship) and its wholly-owned subsidiaries, Flagship Financial Inc., a
registered investment adviser under the Investment Advisers Act of 1940, and
Flagship Funds Inc., a registered broker-dealer under the Securities Exchange
Act of 1934. At December 31, 1996, Flagship managed over $4.2 billion in
predominantly municipal mutual funds and approximately $400 million in managed
accounts for individual investors. Upon the completion of the acquisition,
Flagship Financial Inc. became a wholly-owned subsidiary of the Company and
changed its name to Nuveen Asset Management Inc. NAM now is primarily
responsible for providing private investment management services primarily
through advisors to individuals and institutions with portfolios invested
exclusively in municipal securities and balanced portfolios of equity and
municipal securities. Flagship Funds Inc. was combined into Nuveen Investments,
the Company's broker-dealer subsidiary.
1
3
On August 31, 1997, the Company completed the acquisition of all of the
outstanding stock of Rittenhouse Financial Services, Inc., which specializes in
managing individual equity and balanced portfolios primarily for high-net-worth
individuals served by financial advisors. Rittenhouse managed approximately $9.1
billion in predominantly growth equity assets at the acquisition date.
During 1999, the Company again expanded its product line by introducing products
comprised of senior secured corporate floating rate loans. On September 17,
1999, the Company completed the sale of its investment banking business to US
Bancorp Piper Jaffray. In conjunction with the sale, the Company no longer
underwrites and distributes municipal and corporate bonds, trades bonds in the
secondary market or serves as remarketing agent for variable rate bonds.
The Company was incorporated in the State of Delaware on March 23, 1992, as a
wholly-owned subsidiary of The St. Paul Companies, Inc. (St. Paul). John Nuveen
& Co., the predecessor of the Company, had been a wholly-owned subsidiary of St.
Paul since 1974. During 1992, St. Paul sold a portion of its ownership interest
in the Company through a public offering. As of the date of this report, St.
Paul owns approximately 78% of the outstanding voting securities of the Company.
The following series of tables, including Gross Sales of Investment Products,
Net Flows, and Net Assets Under Management provide data which should be helpful
in understanding the Company's investment products and should be referred to
while reading the separate product discussions which follow the tables.
2
4
GROSS SALES OF INVESTMENT PRODUCTS
The following table summarizes gross sales for the Company's products for the
past three years, including managed assets and defined portfolios:
GROSS SALES OF INVESTMENT PRODUCTS
(IN THOUSANDS)
Year Ended December 31,
---------------------------------------
1999 1998 1997
---------------------------------------
Managed Accounts:
Municipal $ 1,245,633 $ 878,768 $ 488,349
Equity and Balanced(1) 5,855,418 4,513,960 704,555
---------------------------------------
Total 7,101,051 5,392,728 1,192,904
Mutual Funds:
Municipal 1,081,513 1,005,800 600,240
Equity and Income 453,141 547,430 350,377
---------------------------------------
Total 1,534,654 1,553,230 950,617
Exchange-Traded Funds 2,770,328 -- 125,000
---------------------------------------
Total Managed Assets 11,406,033 6,945,958 2,268,521
Defined Portfolios (par value):
Primary - Municipal 512,198 399,596 555,743
Primary - Equity and Taxable Fixed-Income 2,027,702 315,960 82,352
Secondary 119,928 93,408 118,944
---------------------------------------
Total Defined Portfolio Sales 2,659,828 808,964 757,039
---------------------------------------
Total Sales $14,065,861 $ 7,754,922 $ 3,025,560
=======================================
(1) The 1997 period includes sales of Rittenhouse accounts for only the last
four months of the year.
3
5
NET FLOWS OF INVESTMENT PRODUCTS
The following table summarizes net flows (equal to sales, reinvestments and
exchanges less redemptions) for the Company's products for the past three years:
NET FLOWS
(IN THOUSANDS)
Year Ended December 31,
------------------------------------------
1999 1998 1997
------------------------------------------
Managed Accounts:
Municipal $ 736,067 $ 666,443 $ 361,524
Equity and Balanced(1) 3,129,308 3,151,304 359,803
------------------------------------------
Total 3,865,375 3,817,747 721,327
Mutual Funds:
Municipal 12,107 581,893 13,991
Equity and Income 265,895 458,126 340,789
------------------------------------------
Total 278,002 1,040,019 354,780
Exchange-Traded Funds 2,841,907 86,456 191,064
------------------------------------------
Total Managed Assets 6,985,284 4,944,222 1,267,171
Defined Portfolios 2,659,828 808,964 757,039
------------------------------------------
Total $9,645,112 $5,753,186 $2,024,210
==========================================
(1) The 1997 period includes net flows for Rittenhouse accounts for only the
last four months of the year.
4
6
NET ASSETS UNDER MANAGEMENT
The following table shows net assets managed by the Company at December 31 for
each of the past three years. Defined portfolio assets under surveillance are
not included in net assets under management since the portfolios are not
actively managed and generally generate upfront distribution revenues rather
than ongoing advisory fees.
NET ASSETS UNDER MANAGEMENT
(IN MILLIONS)
December 31,
---------------------------------
1999 1998 1997
---------------------------------
Managed Accounts $20,895 $16,337 $11,622
Mutual Funds - Municipal 9,493 10,385 9,753
Mutual Funds - Equity and Income 1,913 1,498 1,132
Money Market Funds 637 824 970
Exchange-Traded Funds 26,846 26,223 26,117
---------------------------------
Total Managed Assets $59,784 $55,267 $49,594
=================================
5
7
PRODUCT DISCUSSIONS
MANAGED ASSETS
OVERVIEW
As of December 31, 1999, the Company offered 41 equity, balanced, taxable
fixed-income, senior loan and municipal mutual funds. These funds are actively
managed and continuously offer to sell their shares at prices based on the daily
net asset values of their portfolios. Daily redemption at net asset value is
offered by 40 of the funds, with one (organized as a closed-end "interval" fund)
offering quarterly redemption. The investment objectives and asset mixes of the
mutual funds vary; however, most are managed with a view towards tax efficient
results for the investor.
The Company offers 31 national and state-specific municipal mutual funds that
invest substantially all of their assets in diversified portfolios of
limited-term, intermediate-term or long-term municipal bonds. The Company
introduced one new municipal mutual fund in 1999, the High Yield Municipal Bond
Fund.
The Company offers 9 mutual funds that invest exclusively in U.S. equities,
international equities, or taxable fixed-income securities, or in portfolios
combining equity, taxable fixed-income and/or municipal securities. During 1999,
the Company seeded two new equity funds, the Nuveen Innovation Fund, which
invests predominately in stocks of companies that utilize innovative
technologies to gain a strategic competitive advantage in their industries, and
the Nuveen International Growth Fund, which invests in growth stocks of
companies domiciled in countries other than the United States. These two new
equity funds are sub-advised by Columbus Circle Investors (CCI).
During 1999, the Company also launched the Nuveen Floating Rate Fund, an
interval fund that invests in senior secured floating and adjustable rate loans
made by commercial banks, investment banks, finance companies and other lenders
to commercial and industrial borrowers.
The Company sponsors 60 exchange-traded funds that are actively managed, 59 of
these funds invest exclusively in municipal securities while the remaining fund
invests in senior loans. These funds do not continually offer to sell and redeem
their shares. Rather, daily liquidity is provided by the ability to trade the
shares of these funds on the New York or American Stock Exchanges, at prices
that may be above or below the shares' net asset values. The municipal
exchange-traded funds include insured and uninsured national and single-state
funds. Most of the exchange-traded funds have a "leveraged" capital structure;
these funds raised assets through the issuance of both common and preferred
stock offerings. The dividends paid to preferred shareholders are based on
short-term tax-free interest rates, while the proceeds from the issuance of
preferred shares are invested by the funds in longer-term municipal securities.
If the preferred stock dividend rate were to exceed the net rate of return
earned by a fund's investment portfolio for an extended period, the
exchange-traded fund's Board of Directors may consider redeeming the outstanding
preferred stock. In addition, the Fund Board may consider converting a fund from
its exchange-traded status into an open-end fund if the fund persistently trades
on the stock exchange at deep discounts to its net asset value per share. Either
of these situations may negatively affect total assets under management.
While most of the exchange-traded funds have perpetual lives, five funds
(referred to as portfolios) representing approximately $836 million in assets
have a finite life and provide for a liquidating distribution of assets to
investors upon reaching fixed termination dates, beginning in the year 2017.
The relative attractiveness of the Company's mutual funds and exchange-traded
funds to investors depends upon many factors, including current and expected
market conditions, the performance histories of the funds, their current yields
and the availability of viable alternatives.
6
8
The Company, through its Rittenhouse and NAM subsidiaries, also provides private
account investment management services for individuals and institutions. The
Company refers to these products as managed accounts. At December 31, 1999, 89%
of these assets under management were managed by Rittenhouse.
Rittenhouse follows a growth stock strategy that centers generally on
identifying large capitalization companies that are financially strong, are
global leaders in their industries and generally have demonstrated consistent
and predictable above-average growth in earnings and, if applicable, in
dividends. NAM concentrates on the research, selection, and management of
municipal bond and a small number of equity portfolios. Rittenhouse manages
accounts on both a discretionary and non-discretionary basis, while NAM accounts
are managed on a discretionary basis.
The assets under management of mutual funds, exchange-traded funds and managed
accounts are affected by changes in the market values of these assets. Changing
market conditions may cause positive or negative shifts in valuation, and
subsequently in the advisory fees earned from these assets.
The Company also sponsors five money market funds. These funds seek to maintain
a stable net asset value of $1.00 per share. In the past some money market fund
managers, including the Company, have voluntarily, and at their own expense,
taken action to protect the value of fund assets when portfolio bond credit or
related financial guarantees have deteriorated. These actions may include
purchasing securities from the fund portfolio at par and arranging for
supplemental credit and liquidity enhancements in order to preserve the value of
the fund's investment. Although the Company is under no obligation to do so,
circumstances may arise in the future in which the Company may decide to take
similar action; such action could involve substantial expense to the Company.
ADVISORY FEES
NAC, NIAC, NSLAM and Rittenhouse provide investment management services to the
funds, accounts and portfolios pursuant to investment management agreements.
With respect to mutual funds, the Company receives fees based either on each
fund's average daily net assets or on a combination of the average daily net
assets and gross interest income. With respect to managed accounts, Rittenhouse
and NAM generally receive fees, on a quarterly basis, based on the value of the
assets managed on a particular date, such as the last calendar day of a quarter,
or on the average asset value for the period.
Institutional Capital Corporation (ICAP) and CCI perform portfolio management
services on behalf of six of the equity mutual funds pursuant to sub-advisory
agreements with NIAC. Rittenhouse, a subsidiary of the Company, performs
portfolio management services for one of the equity mutual funds pursuant to a
sub-advisory agreement with NIAC.
7
9
Advisory fees earned on managed assets for each of the past three years are
shown in the following table:
MANAGED ASSETS -INVESTMENT ADVISORY FEES
(IN THOUSANDS)
Year Ended December 31,
-----------------------------------
1999 1998 1997
-----------------------------------
Managed Accounts advisory fees (1) $ 81,627 57,939 $ 15,634
Mutual fund advisory fees 59,768 56,919 51,562
Less: reimbursed expenses (2,658) (5,068) (5,753)
-----------------------------------
Net advisory fees 57,110 51,851 45,809
Money market fund advisory fees 3,091 3,804 4,317
Less: reimbursed expenses (740) (373) (516)
-----------------------------------
Net advisory fees 2,351 3,431 3,801
Exchange-traded fund advisory fees 161,112 159,638 156,392
-----------------------------------
Total $ 302,200 $ 272,859 $ 221,636
===================================
(1) The 1997 period includes fees on Rittenhouse accounts for only the last four
months of the year
The Company's advisory fee schedules currently provide for maximum annual fees
ranging from .45% to .60% in the case of the municipal mutual funds and .50% to
1.05% in the case of the equity and taxable income mutual funds. Maximum fees in
the case of the exchange-traded funds currently range from .50% to .65% of total
net assets, except with respect to the five finite-life portfolios. The
investment management agreements for the finite-life portfolios provide for
annual advisory fees ranging from .25% to .30%. Additionally, for the three
Dividend Advantage Municipal funds offered in 1999, the investment management
agreement specifies that for the first five years the Company will waive
management fees or reimburse other expenses in an amount equal to .30% so that
the total net management fees do not exceed .35% of total fund net assets
(including preferred share assets). The advisory fees for the money market funds
range from .40% to .50% of net asset value annually. In each case, the
management fee schedules provide for reductions in the fee rate at increased
asset levels. For the individually managed accounts, fees are negotiated and are
based primarily on asset size, portfolio complexity and individual needs. These
fees can range from .20% to 1.00% of net asset value annually.
The Company pays both ICAP and CCI a portfolio advisory fee for sub-advisory
services. The ICAP sub-advisory fee is based on the aggregate amount of average
daily net assets in the four funds they sub-advise plus a supplemental fee for
the assets they manage in the Nuveen European Value Fund. The CCI sub-advisory
fee is based on the aggregate amount of average daily net assets in the two
funds they sub-advise. Both fee schedules provide for rate declines when
specified asset levels are reached.
8
10
INVESTMENT MANAGEMENT AGREEMENTS
Each managed fund has entered into an investment management agreement with NAC,
NIAC or NSLAM (each, an Adviser). Although the specific terms of each agreement
vary, the basic terms are similar. Pursuant to the agreements, the Adviser
provides overall management services to each of the funds, subject to the
supervision of each fund's Board of Directors and in accordance with each fund's
investment objectives and policies. The investment management agreements are
approved initially by fund shareholders and their continuance must be approved
annually by the directors of the respective funds, including a majority of the
directors who are not "interested persons" of the Adviser, as defined in the
Investment Company Act. Amendments to such agreements typically must be approved
by fund shareholders. Each agreement may be terminated without penalty by either
party upon 60 days written notice, and terminates automatically upon its
assignment (as defined in the Investment Company Act). Such an "assignment" will
take place in the event of a change in control of the Adviser. Under the
Investment Company Act, a change in control of the Adviser would be deemed to
occur in the event of certain changes in the ownership of the Company's voting
stock. The termination of all or a portion of the investment management
agreements, for any reason, could have a material adverse effect on the
Company's business and results of operations.
Each fund bears all expenses associated with its operations, including the costs
associated with the issuance and redemption of securities, where applicable. The
fund does not bear compensation expenses of directors and officers of the fund
who are employed by the Company or its subsidiaries. Some investment management
agreements provide that, to the extent certain enumerated expenses exceed a
specified percentage of a fund's or a portfolio's average net assets for a given
year, the Adviser will absorb such excess through a reduction in the management
fee and, if necessary, pay such expenses so that the year-to-date net expense
will not exceed the specified percentage. In addition, the Company may
voluntarily waive all or a portion of its advisory fee from a fund, and/or
reimburse expenses, for competitive reasons. Reimbursed expenses for mutual
funds and money market funds, including voluntary waivers, totaled $3.4 million
during the year ended December 31, 1999. The Company expects to continue
voluntary waivers in order to keep their products competitive. The amount of
such waivers may be more or less than historical amounts.
Services provided by Rittenhouse and NAM to each of the individual accounts are
also governed by management contracts, which are customized to suit a particular
account. A majority of these contracts and of Rittenhouse and NAM's assets under
management involve investment management services provided to clients who are
participants in "wrap fee" programs sponsored by unaffiliated investment
advisers or broker dealers. Such agreements, and the other investment agreements
to which Rittenhouse and NAM are parties, generally provide that they are
terminable without penalty upon written notice by either party within any
specified period. Under the provisions of the Investment Advisers Act of 1940
such investment management agreements may not be assigned to another manager
without the client's consent. The term "assignment" is broadly defined under
this Act to include any direct or indirect transfer of the contract or of a
controlling block of the adviser's stock by a security holder.
PORTFOLIO MANAGEMENT AND RESEARCH
Each Adviser is responsible for the execution of the investment policies of the
various funds or managed accounts it advises. Investment decisions for each fund
or account are made by the portfolio manager responsible for the fund or managed
account. The Company has traditionally had a very low employment turnover rate
for its portfolio managers. The majority of the Company's portfolio managers, as
well as those employed by the sub-advisers, have devoted most of their
professional careers to the analysis, selection and surveillance of the types of
securities held in the funds or accounts they manage.
9
11
OVERVIEW OF DISTRIBUTION AND RELATIONSHIPS WITH DISTRIBUTORS
Comments in this distribution overview section apply not only to managed assets
but also to defined portfolios. This information will not be repeated and should
be kept in mind while reading the defined portfolio discussion.
The Company markets its investment products, including mutual funds,
exchange-traded funds, managed accounts and defined portfolios, through
registered representatives associated with unaffiliated national and regional
broker-dealers, commercial banks and thrifts, broker-dealer affiliates of
insurance agencies and independent insurance dealers, financial planners,
accountants, and tax consultants (retail distribution firms). The Company's
distribution strategy is to maximize the liquidity and distribution potential of
its investment products by maintaining strong relationships with a broad array
of registered representatives. The Company has well-established relationships
with registered representatives in retail distribution firms throughout the
country. These registered representatives participate to varying degrees in the
Company's marketing programs, depending upon: their interests in distributing
investments provided by the Company; their perceptions of the relative
attractiveness of the Company's managed funds, managed accounts and defined
portfolios; the profiles of their customers and their clients' needs; and the
conditions prevalent in financial markets. Registered representatives may reduce
or eliminate their involvement in marketing the Company's products at any time,
or may elect to emphasize the investment products of competing sponsors, or the
proprietary products of their own firms. Registered representatives may receive
compensation incentives to sell their firm's investment products or may choose
to recommend to their customers investment products sponsored by firms other
than the Company. This decision may be based on such considerations as
investment performance, types and amount of distribution compensation, sales
assistance and administrative service payments and level and quality of customer
service. In addition, a registered representative's ability to distribute the
Company's mutual funds is subject to the continuation of a selling agreement
between the firm with which the representative is affiliated and the Company. A
selling agreement does not obligate the retail distribution firm to sell any
specific amount of products and is typically terminable by either party upon 60
days notice. Redeemable managed assets held in accounts at Merrill Lynch
produced 14% of consolidated revenue in 1999.
The Company employs a force of sales professionals and internal sales assistants
who work closely with individual registered representatives to help them develop
their businesses. The Company's sales professionals regularly visit the firms
who distribute the Company's products to provide product information, explain
new products, services and programs as well as discuss ideas in response to
particular investor needs.
DISTRIBUTION REVENUE
All of the Company's mutual funds have adopted a Flexible Sales Charge Program
which provides investors with alternative ways of purchasing fund shares based
upon their individual needs and preferences.
Class A shares may be purchased at a price equal to the fund's net asset value
plus an up-front sales charge ranging from 2.5% of the public offering price for
limited-term municipal funds to 5.75% for equity. At the maximum sales charge
level, approximately 90% to 95% of the sales charge is typically reallowed as
concessions to retail distribution firms. From time to time, the Company may
reallow all of the sales charge to retail distribution firms or waive the sales
charge and advance a sales commission to such firms in connection with marketing
programs or special promotions. Additionally, purchases of Class A shares which
equal or exceed $1 million may be made without an up-front sales charge, but are
subject to a Contingent Deferred Sales Charge (CDSC) ranging from .75% to 1% for
shares redeemed within 18 months. In order to compensate retail distribution
firms for Class A share sales which are $1 million or greater, the Company
advances a sales commission ranging from .50% to 1% at the time of sale. Class A
shares are also subject to an annual Rule 12b-1 service fee of between .20% and
.25% of assets, which is
10
12
used to compensate securities dealers for providing ongoing financial advice and
other services to investors.
Class B shares may be purchased at a price equal to the fund's net asset value
without an up-front sales charge. Class B shares are subject to an annual Rule
12b-1 distribution fee of .75% of assets to compensate the Company for costs
incurred in connection with the sale of such shares, an annual Rule 12b-1
service fee of between .20% and .25% of assets for the ongoing services of
securities dealers and a CDSC, which declines from 5% to 1%, for shares redeemed
within a period of 5 or 6 years. The Company compensates retail distribution
firms for sales of Class B shares at the time of sale at the rate of 4% of the
amount of Class B shares sold, which represents a sales commission plus an
advance of the first year's annual Rule 12b-1 service fee. Class B shares
convert to Class A shares after they are held for eight years.
Class C shares may be purchased without an up-front sales charge at a price
equal to the fund's net asset value. However, these shares are subject to an
annual Rule 12b-1 distribution fee of .75% of assets designed to compensate
securities dealers over time for the sale of the fund shares, an annual Rule
12b-1 service fee of between .20% and .25% of assets used to compensate
securities dealers for providing continuing financial advice and other services
and a 1% CDSC for shares redeemed within 12 months of purchase. In addition, the
Company advances a 1% sales commission to retail distribution firms at the time
of sale and in return, receives the first year's Rule 12b-1 distribution fee and
Rule 12b-1 service fee.
Class R shares are available for purchase at a price equal to the fund's net
asset value with no ongoing fees or CDSCs. These shares are available primarily
to clients of fee-based advisers, wrap programs and others under certain limited
circumstances.
Shares of the money market funds are sold to the public without sales charges
(except for the Nuveen Money Market Fund, a taxable fund that issues class A, B,
C, and R shares as described above). However, each money market fund (except the
Nuveen Institutional Tax-Exempt Money Market Fund, which is marketed primarily
to institutions) pays a Rule 12b-1 fee to distributors of the fund's shares to
compensate for costs associated with the administrative services they perform.
The markets for mutual funds (including money market funds) are highly
competitive, with many participating sponsors. Based upon the information
available, the Company believes that it had less than a 5% share of the market
with respect to net sales of mutual funds and money market funds in each of the
last three years.
Common shares of the exchange-traded funds are initially sold to the public in
offerings that are underwritten by a syndication group. During the year ended
December 31, 1999, there were four new offerings issued.
Sales of managed accounts do not impact the Company's distribution revenue since
there are no transaction-based revenues associated with these products.
DEFINED PORTFOLIOS
OVERVIEW
The Company is a major sponsor of defined portfolios. Each defined portfolio
consists of a fixed portfolio of securities selected and purchased by the
Company and deposited in a trust. The trustee of the portfolio is not affiliated
with the Company. Units of undivided beneficial interest in the portfolio are
sold to investors at a price equal to the per unit market price of the
securities deposited in the trust plus a sales charge. Defined portfolios are
not actively managed after the initial deposit. However, certain equity and
taxable fixed-income portfolios may add securities in proportionate amounts of
the same securities already held in order to accommodate additional inflows. New
securities are not added to municipal defined portfolios after the date of
deposit, and may be exchanged or substituted only under extremely limited
circumstances.
11
13
Securities from the portfolios can only be sold pursuant to the Company's
monitoring program or for the purpose of raising cash to pay for units that have
been redeemed. The proceeds of any security sales must be distributed to unit
holders.
The Company created and introduced its first municipal bond defined portfolio in
1961, and now sponsors nationally diversified and single-state portfolios,
uninsured portfolios, portfolios whose bonds are insured by a third party, and
portfolios of varying average maturities. At December 31, 1999, the Company had
2,911 municipal trusts outstanding with an aggregate market value of $8.3
billion.
In May of 1997, the Company expanded its defined portfolio product line to
include equity and taxable fixed-income defined portfolios. The Company
presently offers portfolios that invest in a wide range of equity sector, index
and thematic portfolios as well as corporate debt and treasury securities. The
equity sector portfolios contributed substantially to the Company's sales in
1999, with particularly strong sales in sectors such as communications,
semi-conductors, bandwidth and other "new economy" sectors. The corporate debt
trusts invest in a portfolio consisting primarily of investment grade corporate
debt obligations and zero coupon U.S. Treasury Obligations. The treasury trusts
invest in a laddered portfolio of short and intermediate-term U.S. Treasury
Obligations. At December 31, 1999, the Company had approximately 130 equity and
taxable fixed-income trusts outstanding with an aggregate market value of $2.6
billion.
DISTRIBUTION REVENUE
Units of the Company's defined portfolios are sold to the public through
financial advisers. For these sales, the Company earns a sales charge based on
the public offering price of the units sold. The Company's distribution revenues
include the sales charge, less an applicable concession to the distributor firm
through which the units were placed. For certain equity trusts, the Company
receives a deferred sales charge over a period of months following the initial
sale date.
The typical sales charge for defined portfolios ranges from 1.75% to 4.9% of the
public offering price (1.78% to 5.15% of the net amount invested), with reduced
sales charges at various sales breakpoints. At the maximum sales charge level,
the dealer concession ranges from 1.0% to 3.5% of the amount invested.
The Company maintains a secondary market for some of the defined portfolios it
sponsors. For transactions in the secondary market, the Company earns a sales
charge less a concession reallowed to dealers. The Company, like any other
unitholder, can also tender units it holds to the defined portfolio trustee for
redemption at their redemption value. The sales charges for fixed income defined
portfolios in the secondary market are established based on the number of years
remaining to maturity for each bond in the defined portfolio.
12
14
The following table shows the Company's defined portfolio distribution revenues
during each of the last three years:
DEFINED PORTFOLIO DISTRIBUTION REVENUES
(IN THOUSANDS)
Year Ended December 31,
---------------------------
1999 1998 1997
---------------------------
Distribution Revenues:
Primary - Municipal $ 6,800 $ 5,073 $ 7,192
Primary - Equity and Taxable Fixed-Income 14,491 1,682 496
Secondary 1,554 1,294 1,701
---------------------------
Total $22,845 $ 8,049 $ 9,389
===========================
The Company also realizes profits or incurs losses when the market price of
securities deposited in a trust exceeds or is less than the original cost of the
securities. After the date of deposit, the Company is the holder of all units of
the particular trust series and will realize profit or incur loss depending on
whether the public offering price increases or decreases before the units are
sold. The Company attempts to manage its exposure to interest rate fluctuations
on the securities held for deposit and on defined portfolio inventory by, among
other practices, coordinating inventory levels to the rate of sale of various
types of trusts and hedging through the use of futures contracts.
The market for the sale of defined portfolios is relatively concentrated, with
only a few sponsors accounting for a majority of total sales. Based upon the
information available, the Company believes it has been one of the market share
leaders in municipal defined portfolio sales in each of the last three years.
The Company entered the equity and taxable fixed-income defined portfolio market
in 1997 and believes that its sales of these products accounted for less than a
5% share of this market in the last three years based on the information
available.
INVESTMENT BANKING
Prior to the sale of the investment banking business, John Nuveen & Co.
underwrote and distributed municipal and corporate bonds, traded bonds in the
secondary market and served as remarketing agent for variable rate bonds. The
majority of the underwritings were for government and not-for-profit entities
and substantially all of its sales were to institutional investors including
casualty insurance companies, managed municipal bond funds, sponsors of defined
portfolios (including the Company), bank portfolios, trust departments and other
dealers. In addition, the investment banking business did, on occasion, act as
financial adviser and/or broker to municipal or other not-for-profit issuers
with respect to transactions in interest rate swaps, forward transactions or
other investment agreements.
The principal sources of revenue for the investment banking business included
underwriting revenues and management fees derived from negotiated and
competitive bond underwritings, financial advisory fees, remarketing agent fees,
and profits from other principal transactions including secondary market trading
and furnishing investment securities to investment banking clients incidental to
their bond financing transactions.
13
15
The following table shows net underwriting revenues, financial advisory fees and
remarketing fees for each of the last three years:
INVESTMENT BANKING REVENUES
(IN THOUSANDS)
Year Ended December 31,
---------------------------------
1999 1998 1997
---------------------------------
Net Underwriting Revenues $ 3,563 $ 7,704 $ 7,229
Merger and Acquisition and Other
Financial Advisory Fees 1,632 3,378 4,206
Remarketing Fees 1,018 1,885 1,974
---------------------------------
Total $ 6,213 $12,967 $13,409
=================================
Note: Investment banking business was sold September 17, 1999
GENERAL BUSINESS DISCUSSIONS
ADVERTISING AND PROMOTION
The Company provides individual registered representatives with daily prices,
weekly, monthly and quarterly sales bulletins, monthly product statistical and
performance updates, product education programs, product training seminars, and
promotional programs coordinated with its advertising campaigns. In addition,
the Company regularly coordinates its marketing and promotional efforts with
individual registered representatives. The Company also augments its marketing
efforts through magazine, newspaper and television advertising, targeted direct
mail and telemarketing sales programs and sponsorship of certain sports and
civic activities.
INVENTORY POSITIONS
The Company regularly purchases and holds for resale municipal securities and
defined portfolio units. Inventory positions are recorded at market value and
unrealized gains and losses are reported in the Company's operating results. The
level of inventory maintained by the Company will fluctuate daily and is
dependent upon the need to maintain municipal inventory for future defined
portfolios, and the need to maintain defined portfolio inventory to support
ongoing sales.
14
16
The market value of the Company's inventory at December 31 for each of the last
three years and the average daily inventory balances outstanding during each
year are set forth below:
INVENTORY
(IN THOUSANDS)
Average Daily Inventory,
Inventory, at market value at par value
on December 31 for year ended December 31,
--------------------------- ---------------------------
1999 1998 1997 1999 1998 1997
--------------------------- ---------------------------
Defined Portfolios $44,263 $37,447 $31,926 $23,616 $27,127 $35,253
=========================== ===========================
Securities Held for:
Deposit in Defined
Portfolios $ 579 $ 210 $ 30 $ 3,086 $ 2,691 $ 2,776
Resale -- 2,420 542 3,774 4,491 2,086
--------------------------- ---------------------------
Total Securities Held $ 579 $ 2,630 $ 572 $ 6,860 $ 7,182 $ 4,862
=========================== ===========================
EMPLOYEES
At December 31, 1999, the Company had 640 full-time employees. Employees are
compensated with a combination of salary, cash bonus and fringe benefits. In
addition, the Company has sought to retain its key and senior employees through
competitive compensation arrangements which include equity-based incentive
awards.
COMPETITION
The Company is subject to substantial competition in all aspects of its
business. The registered representatives that distribute the Company's
investment products also distribute numerous competing products, often including
products sponsored by the retail distribution firms where they are employed.
There are relatively few barriers to entry for new investment management firms.
Investment products are sold to the public by broker-dealers, banks, insurance
companies and others, and many competing investment product sponsors offer a
broader array of investment products. Many of these institutions have
substantially greater resources than the Company. In addition, rapid growth in
internet-based investing and trading activity and financial advisory services
offered through electronic means is significantly altering the landscape in
which the Company's distributors compete and the economics of many of the
products and services they offer. The effect that these continuing changes in
the brokerage and investment management industries will have on the Company and
its competitors cannot be predicted. The Company competes with other providers
of products primarily on the basis of the range of products offered, the
investment performance of such products, quality of service, fees charged, the
level and type of broker compensation, the manner in which such products are
marketed and distributed, and the services provided to registered
representatives and investors.
15
17
REGULATORY
John Nuveen & Co. is registered as a broker-dealer under the Securities Exchange
Act of 1934 and is subject to regulation by the Securities and Exchange
Commission (the Commission), the NASD Regulation, Inc. and other federal and
state agencies and self-regulatory organizations. John Nuveen & Co. is subject
to the Commission's Uniform Net Capital Rule, designed to enforce minimum
standards regarding the general financial condition and liquidity of a
broker-dealer. Under certain circumstances, this rule may limit the ability of
the Company to make withdrawals of capital and receive dividends from John
Nuveen & Co. John Nuveen & Co.'s. regulatory net capital has consistently
exceeded such minimum net capital requirements. At December 31, 1999, John
Nuveen & Co. had aggregate net capital, as defined, of approximately $17.0
million, which exceeded the regulatory minimum by approximately $10.9 million.
The securities industry is one of the most highly regulated in the United
States, and failure to comply with related laws and regulations can result in
the revocation of broker-dealer licenses, the imposition of censures or fines,
and the suspension or expulsion of a firm and/or its employees from the
securities business.
Each Adviser is registered with the Commission under the Investment Advisers
Act. Each fund and defined portfolio is registered with the Commission under the
Investment Company Act. Each national fund is qualified for sale (or not
required to be so qualified) in all states in the United States and the District
of Columbia. Each single-state fund is qualified for sale (or not required to be
so qualified) in the state for which it is named and other designated states.
Virtually all aspects of the Company's investment management business are
subject to various federal and state laws and regulations. These laws and
regulations are primarily intended to benefit the investment product holder and
generally grant supervisory agencies and bodies broad administrative powers,
including the power to limit or restrict the Company from carrying on its
investment management business in the event that it fails to comply with such
laws and regulations. In such event, the possible sanctions which may be imposed
include the suspension of individual employees, limitations on the Company's
engaging in the investment management business for specified periods of time,
the revocation of the Advisers' registrations as investment advisers or other
censures and fines.
The Company's officers, directors, and employees may, from time to time, own
securities which are also held by one or more of the funds. The Company's
internal policies with respect to individual investments require prior clearance
of all transactions in exchange-traded fund securities and securities of the
Company. The Company also requires employees to report all securities
transactions, and restrict certain transactions so as to avoid the possibility
of conflicts of interest. Additionally, employees of Rittenhouse are subject to
their own internal policies with respect to the pre-clearance of the purchase or
sale of securities held in investor accounts.
ITEM 2. PROPERTIES
The Company conducts its principal operations through leased offices located at
its Chicago headquarters and in other United States cities. The Company leases
approximately 255,000 square feet of office space across the country. Management
believes that the Company's facilities are adequate to serve its currently
anticipated business needs.
16
18
ITEM 3. LEGAL PROCEEDINGS
As previously reported most recently in the Form 10-Q for the quarter ending
March 31, 1999, a lawsuit brought in June, 1996 by certain shareholders is
currently pending in federal district court for the Northern District of
Illinois against John Nuveen & Co., Nuveen Advisory, six Nuveen investment
companies and two of the Funds' former directors seeking unspecified damages, an
injunction and other relief. The suit also seeks certification of a defendant
class consisting of all Nuveen-managed leveraged funds. The complaint is filed
on behalf of a purported class of present and former shareholders of all Nuveen
leveraged investment companies, including the Funds, which allegedly engaged in
certain practices which plaintiffs allege violated various provisions of the
Investment Company Act of 1940 and common law. Plaintiffs allege among other
things, breaches of fiduciary duty and various misrepresentations and omissions
in disclosures in connection with the use and maintenance of leverage through
the issuance and periodic auctioning of preferred stock and the payment of
management and brokerage fees to Nuveen Advisory and John Nuveen & Co. A similar
complaint was filed by the Plaintiffs against another major leveraged-fund
sponsor and adviser. The Plaintiffs filed a motion to certify a plaintiff class
(which would include current and former shareholders of all Nuveen leveraged
closed-end funds). On March 30, 1999, the court entered a memorandum opinion and
order granting the Defendants' motion to dismiss four of the Plaintiffs' counts;
denying the Defendants' motion to dismiss the remaining count (breach of
fiduciary duty under Sections 36(b) of the Investment Company Act of 1940) as to
Nuveen Advisory, and granting the same motion as to the remaining Defendants;
and denying the Plaintiffs' motion to certify a plaintiff class and a defendant
class. The remaining Defendant will continue to vigorously contest this action.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the quarter ended
December 31, 1999.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of the executive officers of the Company as of
December 31, 1999, are set forth below. Executive officers of the Company serve
at the discretion of the Board of Directors. Unless otherwise indicated in the
following descriptions, each of the following executive officers and other key
officers have held his or her current position with the Company or its
predecessor for more than the past five years.
Executive Officers Age Principal Position
- - ------------------ --- ------------------
Timothy R. Schwertfeger 50 Chairman, Chief Executive Officer and Director
John P. Amboian 38 President and Director
Richard D. Hughes 42 President of Rittenhouse Financial Services, Inc.
William Adams IV 44 Executive Vice President, Structured Investments
Mark T. McGannon 40 Executive Vice President, Mutual Funds
Alan G. Berkshire 39 Senior Vice President and General Counsel
Margaret E. Wilson 44 Senior Vice President, Finance
All executive officers of the Company are elected for a one-year term. There are
no family relationships between any of the Registrant's executive officers, key
officers and directors, and there are no arrangements
17
19
or understandings between any of these executive officers and any other persons
pursuant to which the executive officer was selected.
Descriptions of the business experience for the past five years of Messrs.
Schwertfeger and Amboian appear on page 6 of the Registrant's Proxy Statement
relating to the annual meeting of shareholders to be held on May 4, 2000 (the
"2000 Proxy Statement") and are incorporated herein by reference.
Mr. Hughes has been Vice President of the Company since May 1999. He joined John
Nuveen & Co. Incorporated in September 1997. In May 1998, Mr. Hughes was elected
Vice President, Branch Manager and Principal for John Nuveen & Co. Incorporated
and Chief Operating Officer, President and Director of Nuveen Asset Management
Inc. Mr. Hughes has served as President and Director of Rittenhouse Financial
Services, Inc. since December 1989 and has continued in such position since the
acquisition of Rittenhouse in September 1997.
Mr. Adams has been Executive Vice President, Structured Investments since
December of 1999. Prior thereto, Mr. Adams was Vice President and Manager of
Nuveen Exchange Traded Funds and Defined Portfolio Manager effective September
1997 and Vice President and Manager, Corporate Marketing and Financial
Institution Group effective August 1994.
Mr. McGannon has been Executive Vice President, Mutual Funds since December of
1999. He joined John Nuveen & Co. Incorporated as Vice President, Mutual Funds
in January of 1999. Prior thereto, Mr. McGannon served as Senior Vice President
and Director of Marketing at Van Kampen Investments and was previously Van
Kampen's National Sales Manager.
Mr. Berkshire has been Secretary of the Company since May 1998; Senior Vice
President, Investment Company Administration and General Counsel of the Company
since April 1999. He joined John Nuveen & Co. Incorporated in September 1997 as
Vice President and General Counsel. Prior thereto he was a Partner at the law
firm of Kirkland & Ellis since October 1992.
Mrs. Wilson has been Senior Vice President, Finance since April of 1999. She
joined John Nuveen & Co. Incorporated as Vice President and Controller in
February 1998. Prior thereto, Mrs. Wilson was Chief Financial Officer at Sara
Lee Bakery, a division of Sara Lee Corporation, from November 1996 until
February 1998 and a Controller with Kraft Foods from September 1991 until
November 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At December 31, 1999, there were approximately 4,300 shareholders of record of
the Company's Class A common stock. Other information required by this item is
contained in footnote 11 on page 34 of the Registrant's 1999 Annual Report to
Shareholders (the 1999 Annual Report) and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The "Five Year Financial Summary" section on page 36 of the 1999 Annual Report
is incorporated herein by reference.
18
20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The "Management's Discussion and Analysis of Financial Condition and Results of
Operations" section on pages 16 through 21 of the 1999 Annual Report is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The "Market Risk" section on page 21 of the 1999 Annual Report is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data on pages 22 through 34 of the
1999 Annual Report are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The "Nominees for Directors" subsection and the "Nominees for Class B Directors"
subsection in the "Election of Directors" section on pages 6 through 8 of the
2000 Proxy Statement and the "Compliance with section 16(a) of the Securities
Exchange Act of 1934" subsection of the Beneficial Ownership of Common Stock"
section on pages 2, 3 and 6 of the 2000 Proxy Statement, are incorporated herein
by reference. Information regarding the Registrant's executive officers is
included in this Part I of this report.
ITEM 11. EXECUTIVE COMPENSATION
The "Executive Compensation", "Retirement Plans" and "Employment Agreements"
sections on pages 10 through 14, and the "Compensation of Directors" subsection
in the "Election of Directors" section on page 9 of the Proxy Statement are
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The "Beneficial Ownership of the Company's Stock" section on pages 2 through 5
of the 2000 Proxy Statement is incorporated herein by reference.
19
21
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The "Certain Relationships" section on pages 15 through 18 of the 2000 Proxy
Statement is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) FILED DOCUMENTS. The following documents are filed as part of this
report:
Page
1. Financial Statements: Number
-------------------- ------
Consolidated Balance Sheets - December 31, 1999 and 1998 *
Consolidated Statements of Income - Years ended
December 31, 1999, 1998 and 1997 *
Consolidated Statements of Changes in Common Stockholders' Equity -
December 31, 1999, 1998 and 1997 *
Consolidated Statements of Cash Flows - Years ended
December 31, 1999, 1998 and 1997 *
Notes to Consolidated Financial Statements *
----------------------
* Incorporated by reference to the 1999 Annual Report, which,
except as specifically incorporated by reference in this Form
10-K, shall not be deemed to be filed with the Commission.
2. Financial Statement Schedules: None
All schedules are omitted because they are not required, are
not applicable or the information is otherwise shown in the
financial statements or notes thereto.
20
22
3. Exhibits:
--------
See Exhibit Index on pages E-1 through E-4 hereof.
The following management contracts and compensatory plans and
arrangements have been filed as Exhibits are as follows:
Exhibit
Designation Exhibit
----------- -------
10.1 Nuveen 1992 Special Incentive Plan
10.1(b) Amended and Restated Nuveen 1996
Equity Incentive Award Plan
10.2(a) Form of Employment Agreement with
Bruce P. Bedford
10.2(b) Form of Employment Agreement with
Richard D. Hughes
10.2(c) Form of Employment Agreement with
George W. Connell
10.2(c)(i) Amendment No. 1 to Employment Agreement
with George W. Connell
10.2(d) Description of terms of Employment with
Mark T. McGannon
10.2(e) Form of Employment Agreement
and Exhibit A, Consulting Arrangement
with Richard P. Davis
10.3(b) Nuveen 1999 Executive Officer Performance
Plan
10.4 Amended and Restated Profit Sharing
Plan
21
23
Exhibit
Designation Exhibit
----------- -------
10.4(a) Amended and Restated Rittenhouse
Financial Services, Inc. 1997 Equity
Incentive Award Plan
10.5 Amended and Restated Retirement Plan
10.6 Excess Benefit Retirement Plan
10.7(a) The John Nuveen Company Deferred Bonus Plan
(b) REPORTS ON FORM 8-K.
None
22
24
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 26, 2000.
THE JOHN NUVEEN COMPANY
By /s/ Margaret E. Wilson
-----------------------------
Margaret E. Wilson
Senior Vice President, Finance
Principal Financial and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on March 26, 2000.
Signature Title
--------- -----
Chairman, Chief Executive Officer and
* Director (Principal Executive Officer)
- - ----------------------------------
Timothy R. Schwertfeger
President, and
* Director
- - ----------------------------------
John P. Amboian
* Director
- - ----------------------------------
Willard L. Boyd
* Director
- - ----------------------------------
W. John Driscoll
23
25
* Director
- - ----------------------------------
Duane R. Kullberg
* Director
- - ----------------------------------
Douglas W. Leatherdale
* Director
- - ----------------------------------
Paul J. Liska
- - ----------------------------------
Margaret E. Wilson Senior Vice President, Finance
(Principal Financial and Accounting Officer)
*By
-------------------------------
Alan G. Berkshire
As Attorney-in-Fact for each
of the persons indicated
24
26
26 EXHIBIT INDEX
to
ANNUAL REPORT ON FORM 10-K
for the
FISCAL YEAR ENDED DECEMBER 31, 1999
Copies of the documents listed below which are identified with an asterisk (*)
have heretofore been filed with the Commission as exhibits to registration
statements or reports filed with the Commission and are incorporated herein by
reference and made a part hereof; the exhibit number and location of each
document so filed and incorporated herein by reference are set forth opposite
each such exhibit. Exhibits not so identified are filed herewith.
Page No. of
Exhibit in
Sequential
Exhibit Exhibit No. Numbering
Designation Exhibit and Location System
- - ----------- ------- ------------ -----------
* 3.1 Restated Certificate of Exhibit 3.1 to Registration
Incorporation of The John Nuveen Statement on Form S-1 filed on
Company April 2, 1992, File No.
33-46922 (the "S-1 Registration
Statement")
* 3.2 Amended and Restated By-Laws of The Exhibit 3.2 to the Company's
John Nuveen Company Form 10-K for year ended
December 31, 1993 filed on
March 29, 1994 (the "1993 Form
10-K")
*+10.1 Nuveen 1992 Special Incentive Plan Exhibit 10.1 to Company's Form
10-K for the year ended
December 31, 1992 filed on
March 30, 1993 (the "1992 Form
10-K")
*+10.1(b) Amended and Restated Nuveen 1996 Exhibit A to Company's Schedule
Equity Incentive Award Plan 14A, Definitive Proxy Statement
filed on March 31, 1999
*+10.2(a) Form of Employment Agreement with Exhibit 10.2(a) to Company's
Bruce P. Bedford Form 10-K for the year ended
December 31, 1997 and filed on
March 30, 1998 (the "1997 Form
10-K")
*+10.2(b) Form of Employment Agreement with Exhibit 10.2(b) to Company's
Richard D. Hughes Form 10-K for year ended
December 31, 1998 filed on
March 31, 1999 (the "1998
Form 10-K")
E-1
27
*+10.2(c) Form of Employment Agreement with Exhibit 10.2(c) to Company's
George W. Connell 1998 Form 10-K
+10.2(c)(i) Amendment No. 1 to Employment --
Agreement with George W. Connell
+10.2(d) Description of terms of Letter --
of Employment with Mark T. McGannon
+10.2(e) Form of Employment Agreement and --
Exhibit A, Consulting Arrangement
with Richard P. Davis
+10.3(b) Nuveen 1999 Executive Officer --
Performance Plan
*+10.4 Amended and Restated Profit Sharing Exhibit 10.4 to Company's 1996
Plan Form 10-K
*+10.4(a) Amended and Restated Rittenhouse Exhibit 10.4(a) to Company's
Financial Services, Inc. 1997 Equity 1998 Form 10-K
Incentive Award Plan
*+10.5 Amended and Restated Retirement Plan Exhibit 10.5 to 1994 Form 10-K
*+10.6 Excess Benefit Retirement Plan Exhibit 10.6 to the S-1
Registration Statement
+10.7(a) The John Nuveen Company Deferred Bonus --
Plan
*10.8(c) Lease dated January 22, 1998 between Exhibit 10.8(c) to Company's
Overseas Partners (333), Inc. and 1998 Form 10-K
John Nuveen & Co. Incorporated
**10.9 Investment Management Agreements Exhibit 10.9 to Pre-effective
between Nuveen Advisory Corp. and Amendment No. 1 and Exhibits
each Nuveen Fund 10.9 to both the 1992 and 1993
Forms 10-K
E-2
28
**10.10 Investment Management Agreement Exhibit 10.10 to Pre-effective
between Nuveen Institutional Amendment No. 1 and Exhibits
Advisory Corp. and each Nuveen 10.10 to both the 1992 and 1993
Select Tax-Free Income Portfolio Forms 10-K
**10.10(a) Management Agreement between Nuveen Exhibit 10.10(a) to the
Investment Trust and Nuveen Form 10-K for the year ended
Institutional Advisory Corp. December 31, 1996 filed on March 31,
1997 (the "1996 Form 10-K")
*10.10(b) Investment Sub-Advisory Agreement Exhibit 10.10(b) to the 1996
between Nuveen Institutional Advisory Form 10-K
Corp. and Institutional Capital
Corporation
*10.10(b)(i) Addendum to Investment Sub-Advisory Exhibit 10.10(b)(I) to
Agreement between Nuveen Company's 1998 Form 10-K
Institutional Advisory Corp. and
Institutional Capital Corp.
**10.10(c) Management Agreement between Nuveen Exhibit 10.10(c) to
Investment Trust II and Nuveen the 1997
Institutional Advisory Corp. Form 10-K
*10.10(d) Investment Sub-Advisory Agreement Exhibit 10.10(d) to
between Nuveen Institutional Advisory the 1997
Corp. and Rittenhouse Financial Form 10-K
Services, Inc.
10.10(d)(i) Investment Sub-Advisory Agreement --
between Columbus Circle Investors LLC
and Nuveen Institutional Advisory
Corp.
*10.10(e) Management Agreement between Nuveen Exhibit 10.10(e) to Company's
Investment Trust III and Nuveen 1998 Form 10-K
Institutional Advisory Corp.
10.10(f) Investment Management Agreement --
between each Nuveen Money Market
Trust and Nuveen Advisory Corp.
E-3
29
10.10(g) Investment Management Agreement --
between Nuveen Senior Loan Fund and
Nuveen Floating Rate Fund, and Nuveen
Senior Loan Asset Management Inc.,
respectively
*10.12 Tax Sharing Agreement between The St. Exhibit 10.13 to S-1
Paul Companies, Inc. and John Nuveen Registration Statement
& Co. Incorporated
*10.13 Registration Rights Agreement between Exhibit 10.13 to 1992 Form 10-K
The John Nuveen Company and The St.
Paul Companies, Inc.
*10.14 Indemnity Agreement between The St. Exhibit 10.14 to 1992 Form 10-K
Paul Companies, Inc. and The John
Nuveen Company
*10.15 Credit Agreement between The John Exhibit 10.15 to the 1997 Form
Nuveen Company and The First National 10-K
Bank of Chicago
*10.17 Support Services Agreement between Exhibit 10.17 to Company's
Rittenhouse Financial Services, Inc. 1998 Form 10-K
and Rittenhouse Trust Company
*10.18 Sublease between Rittenhouse Exhibit 10.18 to Company's
Financial Services, Inc. and 1998 Form 10-K
Rittenhouse Trust Company
10.18(a) Amendment No. 1 to the Sublease and --
Support Services Agreement between
Rittenhouse Financial Services, Inc.
and Rittenhouse Trust Company
*10.19 Trademark License Agreement between Exhibit 10.19 to Company's
Rittenhouse Financial Services, Inc., 1998 Form 10-K
The John Nuveen Company and
Rittenhouse Trust Company
13 Annual Report to Shareholders for the --
fiscal year ended December 31, 1999
21 List of Subsidiaries of The John --
Nuveen Company
E-4
30
23 Consent of Independent Auditor --
24.1 Powers of Attorney --
24.2 Certified Copy of Resolutions of --
Board of Directors Authorizing
Signatures
27 Financial Data Schedule --
* Previously filed; incorporated herein by reference.
** Previously filed, other than Form of Renewal of Investment Management
Agreement, which are filed herewith.
+ Management contracts and compensatory plans and arrangements.
E-5