DEFM14A 1 a07-20091_1defm14a.htm DEFM14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant  x

Filed by a Party other than the Registrant  o

Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material Pursuant to §240.14a-12

 

 

NUVEEN INVESTMENTS, INC.

(Name of Registrant as Specified In Its Charter)

 

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

 

Payment of Filing Fee (Check the appropriate box):

 

o

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:

 

 

 

x

Fee paid previously with preliminary materials.

o

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:

 




NUVEEN INVESTMENTS, INC.

333 West Wacker Drive

Chicago, Illinois 60606

MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT

Dear Stockholder:

We cordially invite you to attend a special meeting of stockholders of Nuveen Investments, Inc. (“Nuveen Investments”) to be held on September 18, 2007, at 2:00 p.m., Central Daylight Savings Time, in the Indiana Room, Aon Center, 200 East Randolph Drive, Chicago, Illinois 60601.

On June 19, 2007, we entered into a merger agreement providing for the acquisition of Nuveen Investments by Windy City Investments, Inc., a corporation formed by a group of equity investors led by Madison Dearborn Partners, LLC. At the special meeting, we will ask you to consider and vote upon (1) a proposal to adopt the merger agreement by and among our company, Windy City Investments, Inc. and a wholly owned subsidiary of Windy City Investments, thereby approving the merger of this subsidiary with and into us and (2) a proposal to approve the adjournment of the special meeting, if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement. If the merger is completed, Nuveen Investments will become a wholly owned subsidiary of Windy City Investments and you will be entitled to receive $65.00 in cash, without interest, for each share of Nuveen Investments common stock you own.

An affirmative vote of the holders of a majority of the shares of our common stock outstanding on the record date is required to adopt the merger agreement, thereby approving the merger. Our board of directors, after considering various factors, including the unanimous recommendation of a special committee of disinterested directors formed to evaluate and make recommendations to the board of directors regarding the merger and the merger agreement, unanimously determined that the merger agreement and the merger are advisable, fair to and in the best interests of our stockholders, and approved the merger agreement and the merger. Our board of directors unanimously recommends that you vote “FOR” the adoption of the merger agreement, thereby approving the merger.

The accompanying proxy statement provides you with detailed information about the merger agreement and the merger. You can also obtain other information about Nuveen Investments from documents that we have filed with the Securities and Exchange Commission. The proxy statement also describes the actions and determinations of the special committee of our board of directors in connection with its evaluation of the merger agreement and the merger. We urge you to read the entire proxy statement carefully.

Your vote is important to us regardless of the number of shares you own. We greatly appreciate your cooperation in voting your shares. The enclosed proxy card contains instructions regarding voting. Whether or not you plan to attend the special meeting, we request that you authorize your proxy by either completing and returning the enclosed proxy card or submitting your proxy by telephone or over the Internet. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote “FOR” the adoption of the merger agreement, thereby approving the merger, and “FOR” any proposal to adjourn the special meeting to a later date. If you do not vote or instruct your broker, bank or other nominee how to vote, it will have the same effect as voting “AGAINST” the adoption of the merger agreement.

If you have any questions about the special meeting or the merger after reading the proxy statement, you may contact MacKenzie Partners, Inc., our proxy solicitor, toll free at (800) 322-2885.

On behalf of the board of directors, we thank you for your support of Nuveen Investments and appreciate your consideration of this matter.

GRAPHIC

 

GRAPHIC

Timothy R. Schwertfeger

 

John P. Amboian

Chairman of the Board of Directors

 

Chief Executive Officer

This transaction has not been approved or disapproved by the Securities and Exchange Commission or any state securities commission. Neither the Securities and Exchange Commission nor any state securities commission has passed upon the merits or fairness of this transaction or upon the adequacy or accuracy of the information contained in this proxy statement. Any representation to the contrary is a criminal offense.

The proxy statement dated August 14, 2007 and the enclosed proxy card are first being mailed to stockholders on or about August 15, 2007.




NUVEEN INVESTMENTS, INC.

333 West Wacker Drive

Chicago, Illinois 60606


Notice of Special Meeting of Stockholders

To Be Held On September 18, 2007


To the Stockholders of Nuveen Investments, Inc.:

Notice is hereby given that a special meeting of the stockholders of Nuveen Investments, Inc., a Delaware corporation (“Nuveen Investments”), will be held in the Indiana Room, Aon Center, 200 East Randolph Drive, Chicago, Illinois 60601, on September 18, 2007 at 2:00 p.m., Central Daylight Savings Time, for the following purposes:

1.                To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of June 19, 2007, among Nuveen Investments, Windy City Investments, Inc. (“Parent”) and Windy City Acquisition Corp. (“Merger Sub”), as may be amended from time to time, which provides for the merger of Merger Sub, a wholly owned subsidiary of Parent, with and into Nuveen Investments, with Nuveen Investments continuing as the surviving corporation, and the conversion of each outstanding share of common stock of Nuveen Investments (other than shares owned by Nuveen Investments, Parent or Merger Sub and dissenting shares under Delaware law) into the right to receive $65.00 in cash, without interest.

2.                To consider and vote upon a proposal to approve the adjournment of the special meeting, if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

3.                To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

Only stockholders of record at the close of business on August 13, 2007 are entitled to notice of, and to vote at, the special meeting or any adjournments thereof.

The merger agreement and the merger are described in the accompanying proxy statement and a copy of the merger agreement is attached to the proxy statement as Appendix A. We urge you to read the entire proxy statement and the merger agreement carefully.

We are pleased to invite you to the special meeting. Whether or not you plan to attend the special meeting, please vote your shares by proxy as soon as possible. Even if you have returned your proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name. If you fail to return your proxy or to vote in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting, and will have the same effect as voting against the adoption of the merger agreement and will have no effect on the proposal to approve the adjournment of the special meeting, if necessary to permit further solicitation of proxies.

Your vote is important to us regardless of the number of shares you own.   An affirmative vote of the holders of a majority of the shares of our common stock outstanding on the record date and entitled to vote is required to adopt the merger agreement, thereby approving the merger. You can vote your shares prior to the special meeting (1) by mailing the enclosed proxy card, in accordance with the instructions on the proxy card, (2) by calling the toll free number that appears on the enclosed proxy card and following the instructions given, (3) by following the Internet voting instructions provided on the enclosed proxy card or (4) if you hold your shares in “street name,” which means your shares of common stock are held of




record on the record date by a broker, bank or other nominee, by providing the record holder of your shares of common stock with instructions on how to vote your shares of common stock in accordance with the voting directions provided by your broker, bank or other nominee. Executed proxy cards with no instructions indicated thereon will be voted “FOR” the adoption of the merger agreement and “FOR” the proposal to adjourn the special meeting, if necessary to permit further solicitation of proxies, provided that no proxy that is specifically marked “AGAINST” the proposal to adopt the merger agreement will be voted in favor of the adjournment proposal, unless it is specifically marked “FOR” the adjournment proposal.

Stockholders of Nuveen Investments who do note vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares of our common stock if the merger is completed, but only if they submit a written demand for appraisal to us before the vote is taken on the adoption of merger agreement and comply with all applicable requirements of Delaware law, which are summarized in the accompanying proxy statement under the section entitled “Appraisal Rights” beginning on page 68.

PLEASE DO NOT SEND YOUR NUVEEN INVESTMENTS COMMON STOCK CERTIFICATES TO US AT THIS TIME. IF THE MERGER IS COMPLETED, YOU WILL BE SENT INSTRUCTIONS REGARDING SURRENDER OF YOUR CERTIFICATES.

By Order of the Board of Directors,

 

 

 

GRAPHIC

 

John L. MacCarthy

 

Secretary

 

Chicago, Illinois

August 14, 2007




SUMMARY VOTING INSTRUCTIONS

YOUR VOTE IS IMPORTANT

Ensure that your shares of Nuveen Investments common stock can be voted at the special meeting by submitting your proxy or contacting your broker, bank or other nominee. If you do not vote or do not instruct your broker, bank or other nominee how to vote, it will have the same effect as voting “AGAINST” the adoption of the merger agreement.

If your shares of Nuveen Investments common stock are registered in the name of a broker, bank or other nominee: check the voting instruction card forwarded by your broker, bank or other nominee to see which voting options are available or contact your broker, bank or other nominee in order to obtain directions as to how to ensure that your shares of common stock are voted in favor of the proposals at the special meeting.

If your shares of Nuveen Investments common stock are registered in your name: submit your proxy as soon as possible by telephone, via the Internet or by signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope, so that your shares of common stock can be voted in favor of the proposals at the special meeting.

Instructions regarding telephone and Internet voting are included on the proxy card.

If you need assistance in completing your proxy card or have questions regarding the special meeting, please contact our proxy solicitor:

MacKenzie Partners, Inc.

105 Madison Avenue, New York, New York 10016

Call Toll Free: (800) 322-2885 or  (212) 929-5500 (call collect)




TABLE OF CONTENTS

 

Page

SUMMARY TERM SHEET

 

1

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

 

12

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

 

17

PARTIES INVOLVED IN THE PROPOSED TRANSACTION

 

18

THE SPECIAL MEETING

 

20

General

 

20

Record Date and Voting Information

 

20

Voting by Proxy; Revocation of Proxies

 

21

Expenses of Proxy Solicitation

 

22

Householding

 

23

Adjournments and Postponements

 

23

Attending the Special Meeting

 

23

PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

 

24

Background of the Merger

 

24

Reasons for the Merger; Recommendations of the Special Committee and Board of Directors

 

33

Opinion of Goldman, Sachs & Co.

 

38

Opinion of Sandler O’Neill & Partners, L.P.

 

45

Financial Projections

 

52

Delisting and Deregistration of Our Common Stock

 

53

Considerations Relating to the Merger

 

54

Financing

 

54

Interests of Our Directors and Executive Officers in the Merger

 

58

Regulatory Matters

 

65

Litigation Relating to the Merger

 

66

Material U.S. Federal Income Tax Consequences

 

67

Appraisal Rights

 

68

TERMS OF THE MERGER AGREEMENT

 

73

The Merger

 

73

Merger Consideration

 

73

Treatment of Restricted Shares, Options and Restricted Stock Units

 

73

Payment for the Shares

 

74

Certificate of Incorporation; Bylaws; Directors and Officers of the Surviving Corporation

 

75

Representations and Warranties

 

75

Conduct of Business Pending the Merger

 

78

Efforts to Consummate the Merger

 

80

Financing

 

80

Marketing Period

 

81

Conditions to the Merger

 

81

Restrictions on Solicitations of Other Offers; Change in Recommendation and Termination of
the Merger Agreement

 

83

Termination of the Merger Agreement

 

86

Reimbursement of Expenses; Termination Fees

 

87

Limitation on Liability

 

88

Limited Guarantees

 

88

Employee Benefits

 

88

Indemnification and Insurance

 

89

Investment Advisory Arrangement Consents

 

89

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GRAPHIC


PROXY STATEMENT


This proxy statement contains information related to our special meeting of stockholders to be held in the Indiana Room, Aon Center, 200 East Randolph Drive, Chicago, Illinois 60601, on September 18, 2007 at 2:00 p.m., Central Daylight Savings Time, and at any adjournments or postponements thereof. We are furnishing this proxy statement to the stockholders of Nuveen Investments, Inc. as part of the solicitation of proxies by Nuveen Investments’ board of directors for use at the special meeting.

SUMMARY TERM SHEET

This summary term sheet briefly summarizes the most material terms of the transaction detailed in this proxy statement. While this summary describes the principal terms of the merger, the proxy statement contains a more detailed description of these terms. You are urged to read this proxy statement carefully, including the appendices and the documents referred to or incorporated by reference in this proxy statement. We have included page references in parentheses to direct you to the appropriate place in this proxy statement for a more complete description of the topics presented in this summary term sheet. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where Stockholders Can Find More Information” beginning on page 95 of this proxy statement.

In this proxy statement, the terms “we,” “us,” “our,” “Nuveen Investments” and the “company” refer to Nuveen Investments, Inc. and, where appropriate, its subsidiaries. We refer to Windy City Investments, Inc. as “Parent,” Windy City Acquisition Corp. as “Merger Sub,” Windy City Investments Holdings, LLC, as “Holdings,” and Madison Dearborn Partners, LLC as “Madison Dearborn.”

The Proposed Transaction (Page 73)

The proposed transaction is the acquisition of Nuveen Investments by Parent pursuant to the Agreement and Plan of Merger, dated as of June 19, 2007, among Nuveen Investments, Parent and Merger Sub. We refer to that Agreement and Plan of Merger as the “merger agreement.” The acquisition will be effected by the merger of Merger Sub, a wholly owned subsidiary of Parent, with and into Nuveen Investments, with Nuveen Investments being the surviving corporation and a wholly owned subsidiary of Parent. We refer to that merger as the “merger.” The parties currently expect to complete the merger in the fourth quarter of 2007 subject to satisfaction of the conditions described under “Terms of the Merger Agreement—Conditions to the Merger” beginning on page 81 of this proxy statement.

We Will Hold a Special Meeting of Our Stockholders to Consider Adoption of the Merger Agreement and the Meeting Adjournment Proposal (Page 20)

Date, Time and Place (Page 20).   The special meeting will be held in the Indiana Room, Aon Center, 200 East Randolph Drive, Chicago, Illinois 60601, on September 18, 2007 at 2:00 p.m., Central Daylight Savings Time, or CDT.

Purpose (Page 20).   At the special meeting, you will be asked to consider and vote upon proposals to (1) adopt the merger agreement, thereby approving the merger (this proposal being referred to in this proxy statement as the “merger agreement proposal”); (2) approve the adjournment of the special

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meeting, if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement (this proposal being referred to in this proxy statement as the “meeting adjournment proposal”); and (3) transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

Record Date and Voting (Page 20).   Only stockholders who hold shares of our common stock at the close of business on August 13, 2007, the record date for the special meeting, will be entitled to vote at the special meeting. Each share of our common stock outstanding on the record date will be entitled to one vote on each matter submitted to stockholders for approval at the special meeting. As of the record date, there were 80,016,643 shares of our common stock outstanding.

Quorum (Page 20).   The holders of a majority of the outstanding shares of our common stock as of the close of business on the record date, present in person or by proxy, will constitute a quorum for the transaction of business at the special meeting.

Vote Required (Page 21).   Adoption of the merger agreement requires the affirmative vote of the holders of 40,008,322 shares of our common stock, being a majority of the voting power of the shares of our common stock outstanding and entitled to vote on the record date. Approval of the meeting adjournment proposal requires the affirmative vote of a majority of the shares of our common stock present in person or by proxy and entitled to vote on such proposal.

Share Ownership of Our Directors and Executive Officers.   As of August 13, 2007, the record date, our directors and executive officers beneficially owned and are entitled to vote, in the aggregate, 1,052,460 shares of our common stock, representing approximately 1.3% of the outstanding shares of our common stock. Our directors and executive officers have informed us that they intend to vote all of their shares of our common stock “FOR” the merger agreement proposal and “FOR” the meeting adjournment proposal.

Voting and Proxies (Page 21).   Any Nuveen Investments stockholder of record entitled to vote may submit a proxy by returning a signed proxy card by mail or by telephone or over the Internet, or may vote in person by appearing at the special meeting. If your shares are held in “street name” by your broker, bank or other nominee, you should instruct your broker, bank or other nominee on how to vote your shares using the instructions provided by your broker, bank or other nominee. If you do not provide your broker, bank or other nominee with instructions, your shares will not be voted and that will have the same effect as voting against adoption of the merger agreement.

If the Merger is Completed, Our Stockholders Will Receive $65.00 in Cash for Each Share of Nuveen Investments Common Stock They Own (Page 73)

If the merger is completed, each issued and outstanding share of our common stock (other than shares owned by us, Parent or Merger Sub and dissenting shares under Delaware law) will be converted into the right to receive $65.00 in cash without interest, which we refer to as the “merger consideration,” and, without any action by the holders of such shares, will cease to be outstanding, be cancelled and cease to exist, and each certificate formerly representing any of the shares of common stock will thereafter represent only the right to receive the per share merger consideration. Upon completion of the merger, we will remove our common stock from listing on The New York Stock Exchange and price quotations in the public market will no longer be available for our common stock. The total merger consideration expected to be paid to our stockholders in the merger in respect of shares of our common stock is approximately $5.2 billion. Once the merger is completed, Parent will deposit sufficient funds to pay the aggregate per share merger consideration with The Bank of New York (or an affiliate thereof), the paying agent in the merger. Once a stockholder has provided the paying agent with his or her stock certificates and the other items specified by the paying agent, the paying agent will promptly pay the stockholder the per share merger consideration.

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How Outstanding Options, Restricted Stock and Restricted Stock Units Will Be Treated (Page 73)

Pursuant to the merger agreement, the following will occur:

·       Except as otherwise may be agreed to by Parent and any holder of outstanding restricted shares of our common stock after the date of this proxy statement, each unvested restricted share of our common stock outstanding immediately prior to the merger will become vested and free of restrictions, and each restricted share of our common stock will be cancelled and converted into the right to receive from the surviving corporation $65.00 in cash, without interest and less any applicable withholding taxes.

·       Each option to acquire shares of our common stock outstanding immediately prior to the merger will become vested with respect to the number of shares of our common stock covered by such option, and each option will be cancelled in exchange for the right to receive from the surviving corporation a cash payment equal to the number of shares of our common stock underlying such option multiplied by the amount by which $65.00 exceeds the exercise price for each share of our common stock underlying the option, without interest and less any applicable withholding taxes.

·       Each restricted stock unit (and each deferred share of restricted stock) outstanding immediately prior to the merger will be cancelled and converted into the right to receive from the surviving corporation a cash payment equal to the number of shares of our common stock subject to such restricted stock unit (and deferred restricted stock) multiplied by $65.00, plus any dividend equivalents accrued with respect to such restricted stock unit (and deferred restricted stock) but not yet distributed as of the effective time (other than any such dividend equivalents that are held in the form of restricted stock units (and deferred restricted stock) as of the effective time), without interest and less any applicable withholding taxes.

The options to acquire shares of our common stock and restricted shares of our common stock granted under our 1996 Equity Incentive Award Plan will become fully vested, and outstanding restricted stock units (and deferred restricted stock) granted under our 1996 Equity Incentive Award Plan that vested before January 1, 2005 will be settled through the issuance of common stock, upon the adoption of the merger agreement by our stockholders. The options to acquire shares of our common stock, restricted shares of our common stock and restricted stock units granted under our 2005 Equity Incentive Plan, and restricted stock units (and deferred restricted stock) granted under our 1996 Equity Incentive Award Plan that were unvested as of January 1, 2005 will become fully vested or settled in cash, as applicable, upon the completion of the merger.

The total amount expected to be paid to current and former Nuveen Investments employees and directors in respect of restricted stock, options and restricted stock units is approximately $725 million. While, as of the date of this proxy statement, no arrangements have been agreed upon, and it is not certain whether any such arrangements will be agreed upon, certain members of our management may contribute a portion of their restricted stock to Parent in exchange for equity in Parent or the surviving corporation after the merger.

Determination and Recommendation of the Special Committee (Page 33)

Because of the potential for conflicts of interest in evaluating the merger and any alternative transactions, a special committee of our board of directors, consisting of Duane R. Kullberg, Willard L. Boyd, Connie K. Duckworth and Roderick A. Palmore (which we refer to as the “special committee”), none of whom is either affiliated with Parent or Merger Sub or with any members of our management, was formed for the purpose of, among other things, evaluating, and making a recommendation to our full board of directors with respect to, the merger agreement and the transactions contemplated thereby, including the merger. The special committee, with the assistance of independent legal and financial

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advisors, also directed the negotiation of the terms of the transaction. The special committee unanimously determined that the merger is advisable, fair to and in the best interests of Nuveen Investments and the holders of our common stock, and recommended to our full board of directors that the board of directors approve the merger and the merger agreement.

Determination, Approval and Recommendation of Our Board of Directors (Page 37)

Our board of directors has unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Nuveen Investments and the holders of our common stock and has approved the merger agreement and the transactions contemplated thereby, including the merger. Our board of directors recommends that you vote “FOR” the adoption of the merger agreement, thereby approving the merger.

Our Reasons for the Merger (Page 33)

In the course of reaching its decision that the merger is advisable, fair to and in the best interests of Nuveen Investments and the holders of our common stock, the special committee and our board of directors each considered a number of factors described on pages 33 through 38, including, among others, the following:

·       the offered merger consideration of $65.00 per share in cash represented a premium of approximately 20% over the closing price of our common stock on June 19, 2007, the trading day immediately preceding the announcement of the execution of the merger agreement, a premium of approximately 26% over the average closing price of our common stock for the ninety-day period ended on June 19, 2007 and a premium of approximately 16% over the all-time, intra-day high price of our common stock;

·       the opinions of Goldman, Sachs & Co., which we refer to as “Goldman Sachs,” and Sandler O’Neill & Partners, L.P., which we refer to as “Sandler O’Neill,” which are attached as Appendices B and C, respectively, to this proxy statement, that the $65.00 per share cash merger consideration to be received by our stockholders pursuant to the merger agreement was fair, from a financial point of view, to such stockholders;

·       the analyses supporting the fairness opinions of Goldman Sachs and Sandler O’Neill, which were based in part on the financial projections of our management, which led us to believe that a stock price with a net present value greater than Madison Dearborn’s offer of $65.00 per share was unlikely to be achieved within the next several years if we remained independent; and

·       our historical and current financial performance and results of operations, our prospects and long-term strategy, our competitive position in the asset management industry and the outlook for the asset management industry, including (1) uncertainties associated with our ability to continue to grow our closed-end fund business; (2) evolving competitive pressures in our retail separately managed accounts (SMA) business; (3) capacity constraints on certain of our value and international strategies that may limit our ability to grow assets under management; (4) the continuing need to invest back in our business resulting in lower margins than we have experienced historically; and (5) existing limitations on our overall scale and platform in the mutual fund business, which may impair our ability to compete and generate substantial growth in our mutual funds.

You should read “Reasons for the Merger—Recommendation of the Special Committee and Board of Directors” beginning on page 33 of this proxy statement for a more complete discussion of the factors that the special committee and our board of directors considered in deciding to recommend the adoption of the merger agreement and approval of the merger.

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Opinion of Goldman, Sachs & Co. (Page 38)

Goldman Sachs rendered its opinion to the special committee and our board of directors that, as of June 19, 2007, based upon and subject to the factors and assumptions set forth in its opinion, the $65.00 per share of our common stock in cash to be received by the holders of shares of our common stock (other than shares held by our affiliates who have an understanding, arrangement or other agreement with Parent or its affiliates) pursuant to the merger agreement was fair from a financial point of view to holders of our common stock.

The full text of the written opinion of Goldman Sachs, dated June 19, 2007, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix B to this proxy statement. We urge you to read the opinion carefully and in its entirety. The opinion of Goldman Sachs was provided for the information and assistance of the special committee and our board of directors in connection with their consideration of the merger and does not constitute a recommendation to any stockholder as to how that stockholder should vote at the special meeting with respect to the merger agreement proposal.

Pursuant to a letter agreement between Goldman Sachs and the special committee on May 15, 2007, we have agreed to pay Goldman Sachs a transaction fee of approximately $29 million in connection with the transaction, $28 million of which is contingent upon the consummation of the transactions contemplated by the merger agreement. Half of the remaining $1 million was payable to Goldman Sachs within five business days of execution of the letter agreement and the other half was payable on July 1, 2007.

Opinion of Sandler O’Neill & Partners, L.P. (Page 45)

The special committee and our board of directors also received a written opinion from Sandler O’Neill that, as of June 19, 2007, and based upon and subject to the assumptions and qualifications stated in its opinion, the merger consideration of $65.00 per share of our common stock in cash provided for in the merger agreement was fair from a financial point of view to holders of our common stock. The full text of the written opinion of Sandler O’Neill, dated June 19, 2007, is attached to this proxy statement as Appendix C. Sandler O’Neill has been paid a fee of $1 million in connection with the proposed transaction. Sandler O’Neill’s compensation was not contingent upon the closing of the transaction. The opinion of Sandler O’Neill was provided for the information and assistance of the special committee and our board of directors in connection with their consideration of the merger and does not constitute a recommendation to any stockholder as to how that stockholder should vote at the special meeting with respect to the merger agreement proposal. We encourage you to read this opinion carefully and in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken.

Financing (Page 54)

We currently estimate the total amount of funds necessary to complete the merger and the related transactions to be approximately $6.5 billion, which includes approximately $5.8 billion to be paid to our stockholders and holders of other equity-based interests in Nuveen Investments and the assumption of approximately $550 million of our existing indebtedness, with the remainder to be applied to pay related fees and expenses in connection with the merger, the financing arrangements and the related transactions. These payments are expected to be funded by a combination of equity contributions to Parent and debt financing, which we refer to collectively in this proxy statement as the “financing,” as well as our available cash.

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Holdings has given a commitment to Parent, and the Equity Sponsors (as defined in “Adoption of the Merger Agreement—Financing”) have given commitments to Holdings, to provide up to an aggregate of approximately $2.7 billion in equity financing.

In addition, Parent and Merger Sub have obtained commitments from the Debt Providers (as defined in “Adoption of the Merger Agreement—Financing”) to provide up to an aggregate of $2.69 billion in senior secured credit facilities and $660 million in a senior unsecured bridge facility (to be borrowed as of the closing to the extent that the surviving corporation does not complete the contemplated public or private offering of debt securities at or prior to such time).

The closing of the merger is not conditioned on the receipt of the debt or equity financing. Parent and Merger Sub, however, are not required to consummate the merger until after the marketing period has elapsed, as described under the section entitled “Terms of the Merger Agreement—Marketing Period” beginning on page 81 of this proxy statement. The marketing period is a 25-day period that begins once all of the closing conditions have been met, during which time Parent and Merger Sub may market and place the permanent debt financing contemplated by the debt financing commitments for purposes of financing the merger.

Our Directors and Executive Officers Have Interests in the Transaction that are Different From, or in Addition to, Interests of Our Stockholders Generally (Page 58)

In considering the recommendations of the special committee and our board of directors, you should be aware that our directors and executive officers have interests in the merger that are different from your interests as a stockholder and that may present actual or potential conflicts of interest. The special committee and our board of directors were aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated thereby, including the merger, and in determining to recommend that stockholders vote “FOR” the adoption of the merger agreement. You should consider these and other interests of our directors and executive officers that are described in this proxy statement.

For example:

·       as of the record date, our executive officers and directors held 1,624,299 shares of common stock (of which 1,052,460 are entitled to vote), options to purchase an aggregate of 7,135,682 shares of common stock and restricted stock units representing 19,961 shares of common stock;

·       stock options held by certain of our executive officers and members of our board of directors, whether vested or unvested, will be cancelled and entitle such holders (as is the case with all other holders of stock options) to receive the excess, if any, of $65.00 per share over the option exercise price for each share of our common stock subject to the stock option, less any applicable withholding taxes and without interest;

·       certain of our executive officers may be entitled to severance benefits if, following the merger, any such executive’s employment is terminated by the company other than for cause or is terminated by the executive with good reason;

·       our current and former directors and officers will continue to be indemnified following completion of the merger and will have the benefit of liability insurance for six years following completion of the merger;

·       although no agreements have been entered into as of the date of this proxy statement, Parent informed us of its intention to cause the surviving corporation to enter into agreements with members of our existing management team (which agreements will not become effective until after the merger is completed), and we believe that these persons are likely to enter into such

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agreements, although such matters are subject to further negotiation and discussion and no terms or conditions have been finalized;

·       although no agreements have been entered into as of the date of this proxy statement, Parent has informed us that it may offer members of management the opportunity to invest in equity of Parent (and/or a parent/subsidiary thereof) on terms that are no more favorable than other investors in Parent; and

·       if the merger is consummated, any shareholder derivative claims that are currently pending or that could be brought against the directors and officers of Nuveen Investments by current stockholders would likely be extinguished.

Solicitation of Transactions (Page 83)

The merger agreement contains a “go-shop” provision pursuant to which we were entitled to solicit, discuss and negotiate takeover proposals (as such term is defined in the merger agreement) for 30 days following the execution of the merger agreement. The 30-day go-shop period ended on July 19, 2007. We did not receive any takeover proposals during the go-shop period. For the period following the go-shop period, the merger agreement restricts our ability to solicit or engage in discussions or negotiations with third parties regarding specified transactions involving us and our subsidiaries. Notwithstanding the restrictions following the go-shop period, under certain circumstances and subject to certain conditions, including payment by us of a termination fee, our board of directors may respond to written takeover proposals and terminate the merger agreement in order to enter into an agreement with respect to a superior proposal (as such term is defined in the merger agreement).

How the Merger Agreement May Be Terminated (Page 86)

We and Parent may mutually agree to terminate the merger agreement at any time upon the mutual written consent of the parties. Other circumstances under which we or Parent may terminate the merger agreement are described under “Terms of the Merger Agreement—Termination of the Merger Agreement” beginning on page 86 of this proxy statement. We may terminate the merger agreement if we receive a takeover proposal that our board of directors determines in good faith constitutes a superior proposal and that failure to terminate would be inconsistent with its fiduciary duties so long as the receipt of that takeover proposal is not a result of our breach of the limitations on solicitation of takeover proposals in the merger agreement. In connection with such a termination, we will be required to pay Parent a termination fee of $200 million. We may also be obligated to pay a $200 million fee under certain other circumstances described under “Terms of the Merger Agreement—Reimbursement of Expenses; Termination Fees” beginning on page 87 of this proxy statement. Additionally, we have agreed to reimburse Parent’s and Merger Sub’s actual and reasonably documented out-of-pocket fees and expenses, up to a limit of $20 million, if either we, Parent or Merger Sub terminates the merger agreement because of the failure to receive the requisite stockholder vote for adoption of the merger agreement at the special meeting (or any adjournment thereof) called for such purpose. If the merger is not completed due to a failure to obtain the debt financing necessary to pay the aggregate merger consideration and otherwise consummate the transactions contemplated by the merger agreement, we may terminate the merger agreement and Parent will be required to pay us a termination fee of $200 million.

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Conditions to the Merger (Page 81)

A number of different conditions must be satisfied before the merger can be completed. We cannot give any assurance that all of the conditions to the merger will be satisfied or waived or that the merger will occur.

Conditions to Each Party’s Obligations

Each party’s obligation to complete the merger is subject to the satisfaction or waiver of the following conditions:

·        adoption of the merger agreement by our stockholders;

·                      the absence of any order having been issued by any governmental entity that would, or any proceeding having been commenced by any governmental entity seeking to, prevent, restrain or enjoin the consummation of the merger; and

·                      the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the “HSR Act,” and clearance under other applicable antitrust laws.

Conditions to Our Obligations

Our obligation to complete the merger is subject to the satisfaction or waiver of the following additional conditions:

·                      Parent’s and Merger Sub’s representations and warranties being true and correct as of the closing date as if made at and as of such time, except to the extent the facts or matters causing the failure of such representations and warranties to be so true and correct (without giving effect to any qualification as to “materiality” or “material adverse effect” set forth in such representations and warranties), individually or in the aggregate, would not reasonably be expected to materially adversely affect Parent’s or Merger Sub’s ability to consummate the merger by March 19, 2008; and

·                      Parent and Merger Sub having performed in all material respects all obligations and complied in all material respects with all agreements and covenants required to be performed or complied with by them under the merger agreement.

Conditions to Parent’s and Merger Sub’s Obligations

Parent’s and Merger Sub’s obligations to complete the merger are subject to the satisfaction or waiver of the following additional conditions:

·                      our representation and warranty with respect to the absence of a material adverse effect on us being true and correct as of the date of the merger agreement and the closing date as if made at and as of such time;

·                      our representations and warranties with respect to organization, capital structure, corporate authority, enforceability, takeover statutes, brokers and indebtedness being true and correct in all material respects (without giving effect to any qualification as to materiality or material adverse effect) as of the date of the merger agreement and the closing date as if made at and as of such time;

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·                      our other representations and warranties made by us in the merger agreement being true and correct as of the date of the merger agreement and the closing date as if made at and as of such time, except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or material adverse effect) would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on us;

·                      our having performed in all material respects all obligations and complied in all material respects with all agreements and covenants required to be performed or complied with by us under the merger agreement; and

·                      the revenue run rate of the company and our subsidiaries as of the closing date being at least 80% of the revenue run rate of the company and our subsidiaries as of the base date (as defined in the merger agreement). In order to satisfy this condition, we will need to obtain consents to the merger from our non-public fund clients, our public fund clients and the shareholders of our public fund clients. If any of our clients or, in the case of our public fund clients, their shareholders, do not consent to the merger on or prior to the closing date, our revenue run rate as of the closing date will exclude the revenues we generate from such clients for purposes of determining whether this condition is satisfied.

The “revenue run rate” of the company and our subsidiaries means the aggregate annualized investment advisory and sub-advisory fees computed primarily by reference to assets under management that are payable to us or our affiliates (including our subsidiaries) in respect of all client accounts as to which we provide investment advisory or subadvisory services, and is determined by multiplying the adjusted assets under management of the company and our subsidiaries for each such account by the applicable annual fee rate for such account. The “adjusted assets under management” of the company and our subsidiaries means the amount of assets under management as of May 31, 2007 (or, in the case of specified funds, the last date prior to the date of the merger agreement for which the amount of assets under management was calculated), which we refer to as the “base date,” adjusted:

·                      to reflect net cash flows (additions and withdrawals and, with respect to public funds, exclusive of dividends or distributions or reinvestment of dividends or distributions), new accounts and terminated accounts or accounts for which we or any of our subsidiaries have received a notification of termination that has not been withdrawn, from and after the base date through the last business day of the most recently completed month (or, in the case of specified funds, the last business day of either the next to last most recently completed month or the most recently completed fiscal quarter) prior to that date;

·                      to exclude any increase or decrease in assets under management due to market appreciation or depreciation or currency fluctuations from and after the base date; and

·                      to exclude any client accounts that require a public fund consent or a non-public fund consent and with respect to which we or our applicable subsidiary shall not have obtained a public fund consent or non-public fund consent, as the case may be.

Financing

There is no financing condition to Parent’s and Merger Sub’s obligations to complete the merger. However, the parties are not required to complete the merger until the completion of a period of twenty-five (25) calendar days, during which certain financing contemplated by the debt financing commitments may be marketed, which we refer to in this proxy statement as the “marketing period.” There are certain requirements for the marketing period to commence.

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Limited Guarantees by the Guarantors (Page 88)

In connection with the merger agreement, the Guarantors (as defined in “Adoption of the Merger Agreement—Financing”) have irrevocably and unconditionally guaranteed a portion of the payment obligations of Parent and Merger Sub under certain provisions of the merger agreement, including the $200 million termination fee that Parent or Merger Sub may be required to pay us under the merger agreement under certain circumstances. The maximum aggregate amount for which the Guarantors may be liable under the guarantees is $400 million.

U.S. Tax Considerations for Our Stockholders (Page 66)

Generally, the merger consideration paid to our stockholders will be taxable to our stockholders for U.S. federal income tax purposes. A holder of our common stock receiving cash in the merger generally will recognize a gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash received and the holder’s adjusted tax basis in our common stock surrendered. We advise you to consult your own personal tax advisors concerning the applicable tax consequences of the merger.

Regulatory Matters (Page 65)

The merger is subject to the mandatory notification and waiting period requirements of the HSR Act, which requires that we and Parent furnish certain information and materials relating to the merger to the Antitrust Division of the United States Department of Justice, which we refer to as the “Antitrust Division,” and the Federal Trade Commission, which we refer to as the “FTC”. Under the HSR Act, the merger may not be consummated until the applicable waiting period has expired or been terminated by the Antitrust Division and the FTC. We and Parent filed notification and report forms under the HSR Act with the Antitrust Division and the FTC on July 3, 2007. On July 17, 2007, we received notice from the FTC of early termination of the HSR waiting period.

Other than the filings described above, we are not aware of any mandatory regulatory filings to be made, approvals to be obtained or waiting periods to expire, in order to complete the merger.

Stock Prices and Dividends (Page 91)

Our common stock is listed on The New York Stock Exchange, which we refer to as the “NYSE,” under the trading symbol “JNC”. The closing sale price of our common stock on the NYSE on June 19, 2007, which was the last trading day before we announced the merger, was $54.16. On August 13, 2007, the last trading day before the date of this proxy statement, the closing price of our common stock on the NYSE was $61.50.

Under the terms of the merger agreement, we may continue to declare or pay quarterly dividends to our common stockholders not in excess of $0.24 per share during the third and fourth quarters of 2007 and the first quarter of 2008 (with record dates no earlier than September 4, 2007, December 3, 2007 and March 3, 2008, respectively) without the prior written consent of Parent.

Our Stockholders Will Have Appraisal Rights (Page 68)

Under Delaware law, stockholders who do not wish to accept the cash consideration payable for their shares of our common stock pursuant to the merger may seek, under Section 262 of the General Corporation Law of the State of Delaware, judicial appraisal by the Delaware Court of Chancery of the fair value of their shares of our common stock. This value could be more than, less than or equal to the

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$65.00 per share merger consideration. This right of holders of our common stock to appraisal is subject to a number of restrictions and technical requirements. Generally, in order to properly demand an appraisal, among other things:

·                      you must not vote in favor of the proposal to adopt the merger agreement;

·                      you must deliver a written demand to us for appraisal in compliance with the General Corporation Law of the State of Delaware before the vote on the proposal to adopt the merger agreement occurs at the special meeting; and

·                      you must hold your shares of record continuously from the time of making a written demand for appraisal through the effective time of the merger; a stockholder who is the record holder of shares of our common stock on the date the written demand for appraisal is made, but who thereafter transfers those shares prior to the effective time of the merger, will lose any right to appraisal in respect of those shares.

Merely voting against, or failing to vote in favor of, adoption of the merger agreement will not preserve your right to appraisal under Delaware law. Also, because a submitted proxy not marked “against” or “abstain” will be voted “for” the proposal to adopt the merger agreement, the submission of a proxy not marked “against” or “abstain” will result in the waiver of appraisal rights. If you hold shares in the name of a broker, bank or other nominee, you must instruct your nominee to take the steps necessary to enable you to assert your appraisal rights. If you or your nominee fail to follow all of the steps required by Section 262 of the General Corporation Law of the State of Delaware, you will lose your right to appraisal. See “Adoption of the Merger Agreement—Appraisal Rights” beginning on page 68 of this proxy statement for a description of the procedures that you must follow in order to exercise your appraisal rights.

Stockholders who properly perfect their appraisal rights will receive only the judicially determined fair value of their shares if one or more stockholders files suit in the Delaware Court of Chancery and litigates the resulting appraisal case to a decision.

Appendix D to this proxy statement contains the full text of Section 262 of the General Corporation Law of the State of Delaware, which relates to your right to appraisal. We encourage you to read these provisions carefully and in their entirety.

Help in Answering Questions

If you have questions about the special meeting or the merger after reading this document, you may contact MacKenzie Partners, Inc., which is assisting us in the solicitation of proxies, toll free at (800) 322-2885 or (212) 929-5500 (call collect).

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to address some commonly asked questions regarding the special meeting and the merger. These questions and answers may not address all questions that may be important to you as a stockholder of our common stock. Please refer to the more detailed information contained elsewhere in this proxy statement, the appendices to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Q:   Why am I receiving these materials?

A:    You are receiving this proxy statement and the accompanying proxy card because you owned shares of our common stock at the close of business on August 13, 2007, the record date for the special meeting of stockholders. Our board of directors is providing these proxy materials to give you information for use in determining how to vote in connection with the matters to be considered at the special meeting.

Q:   When and where is the special meeting?

A:    The special meeting will take place in the Indiana Room, Aon Center, 200 East Randolph Drive, Chicago, Illinois 60601, on September 18, 2007 at 2:00 p.m., CDT.

Q:   What matters will be voted on at the special meeting?

A:    We will ask you to consider and vote upon (1) a proposal to adopt the merger agreement by and among our company, Windy City Investments, Inc. and a wholly owned subsidiary of Windy City Investments, thereby approving the merger of this subsidiary with and into us and (2) a proposal to approve the adjournment of the special meeting, if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

Q:   What is the proposed transaction?

A:    Under the terms of the merger agreement, upon completion of the merger, Merger Sub will be merged with and into Nuveen Investments, with Nuveen Investments being the surviving corporation and a wholly owned subsidiary of Parent. After the merger is completed, our common stock will cease to be traded on The New York Stock Exchange.

Q:   What will I receive if the merger is completed?

A:    You will have the right to receive $65.00 in cash, without interest, for each share of our common stock you own, unless you are a dissenting stockholder and you validly exercise your appraisal rights under Delaware law. In either case, as a result of the merger, your shares will be cancelled and you will not own shares in the surviving corporation.

Q:   What happens if I sell or transfer my shares of common stock after the record date but before the special meeting?

A:    If you sell or transfer your shares of our common stock after the record date but before the special meeting, you will transfer the right to receive the merger consideration, if the merger is completed, to the person to whom you sell or transfer your shares of our common stock, but you will retain your right to vote these shares at the special meeting.

Q:   What vote is required to adopt the merger agreement, thereby approving the merger?

A:    Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the voting power of the shares of our common stock outstanding and entitled to vote on the record date. As of

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the record date, there were 80,016,643 shares outstanding, of which our directors and executive officers beneficially owned and are entitled to vote, in the aggregate, 1,052,460 shares, representing 1.3% of the outstanding shares. Our directors and executive officers have informed us that they intend to vote all of their shares of our common stock “FOR” the adoption of the merger agreement.

Q:   What vote is required for Nuveen stockholders to approve an adjournment of the special meeting?

A:    The meeting adjournment proposal will be approved if the holders of a majority of the voting power of shares of our common stock, present in person or represented by proxy and entitled to vote on the subject matter, vote in favor of the proposal.

Q:   How does the Nuveen Investments board of directors recommend that I vote?

A:    Our board of directors, after careful consideration of a variety of factors, including the unanimous recommendation of the special committee, recommends that our stockholders vote “FOR” the adoption of the merger agreement, thereby approving the merger, and “FOR” the meeting adjournment proposal. You should read “Reasons for the Merger—Recommendation of the Special Committee and Board of Directors” beginning on page 33 of this proxy statement for a discussion of the factors that the special committee and our board of directors considered in deciding to recommend the adoption of the merger agreement.

Q:   How do I vote my shares of Nuveen Investments common stock?

A:    Before you vote, you should carefully read and consider the information contained in or incorporated by reference in this proxy statement, including the appendices. You should also determine whether you hold your shares of our common stock directly in your name as a registered stockholder (which would mean that you are a “stockholder of record”) or through a broker, bank or other nominee, because this will determine the procedure that you must follow in order to vote. You are a registered holder of our common stock if you hold your Nuveen Investments common stock as a stockholder of record in certificate form or if you hold your Nuveen Investments common stock in your name directly with our transfer agent, The Bank of New York, which includes shares acquired and held through our equity incentive plans. If you are a registered holder of our common stock, you may vote in any of the following ways:

·       in person at the special meeting—complete, date and sign the enclosed proxy card and bring it to the special meeting;

·       by mail—complete, date and sign the enclosed proxy card and return it to Broadridge Financial Solutions, Inc. in the enclosed postage paid return envelope as soon as possible; or

·       by telephone or over the Internet—follow the instructions included with the enclosed proxy card.

If you are a non-registered holder of shares of our common stock (which for purposes of this proxy statement means that your shares are held in “street name”), you should instruct your broker, bank or other nominee to vote your shares by following the instructions provided by your broker, bank or other nominee in the enclosed proxy card or voting form. You may vote in person at the special meeting if you obtain a proxy from your broker, bank or other nominee. Please contact your broker, bank or other nominee to determine how to vote by mail and whether you will be able to vote by telephone or over the Internet. If you do not provide your broker, bank or other nominee with instructions on how to vote your shares of common stock, your shares will not be voted, which will have the same effect as voting “AGAINST” the adoption of the merger agreement.

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Q:   What happens if I return my proxy card but I do not indicate how to vote?

A:    If you properly return your proxy card, but do not include instructions on how to vote, your shares of our common stock will be voted “FOR” the adoption of the merger agreement, thereby approving the merger, and “FOR” the approval of the meeting adjournment proposal. We do not currently intend to present any other proposals for consideration at the special meeting. If other proposals requiring a vote of stockholders are brought before the special meeting in a proper manner, the persons named in the enclosed proxy card, if properly authorized, will have discretion to vote the shares they represent in accordance with their best judgment.

Q:   What happens if I abstain from voting on a proposal?

A:    If you abstain from voting, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement and it will be treated as a vote “AGAINST” the meeting adjournment proposal.

Q:   What happens if I do not return a proxy card or otherwise do not vote?

A:    If you fail to return a proxy card or otherwise vote in person or electronically via the Internet or by telephone, or fail to give voting instructions to your broker, bank or other nominee, your shares will not be counted toward determining whether a quorum is present at the special meeting and will have the legal effect of a vote “AGAINST” the proposal to adopt the merger agreement. Such failure will have no legal effect with respect to the vote on the meeting adjournment proposal.

Q:   If my broker, bank or other nominee holds my shares in street name, will my broker, bank or other nominee vote my shares for me?

A:    Your broker, bank or other nominee will not be able to vote your shares of our common stock unless you have properly instructed your broker, bank or other nominee on how to vote. If you do not provide your broker, bank or other nominee with voting instructions, your shares may be considered present at the special meeting for purposes of determining a quorum, but will have the legal effect of a vote “AGAINST” the proposal to adopt the merger agreement and will have no effect on the meeting adjournment proposal.

Q:   May I change my vote after I have mailed my signed proxy card or otherwise submitted my vote?

A:    Yes. You can change your vote at any time before your shares are voted at the special meeting. If you are a registered holder of our common stock, you can do this in any of the following ways:

·       by sending a written notice of revocation to Broadridge Financial Solutions, Inc. at the address specified below stating that you would like to revoke your proxy;

·       by completing and delivering a later-dated proxy card by mail to Broadridge Financial Solutions, Inc. at the address specified below;

·       by providing subsequent telephone or Internet voting instructions; or

·       by attending the special meeting and voting in person. Your attendance at the special meeting alone will not revoke your proxy. You must also vote at the special meeting in order to revoke your previously submitted proxy.

You should send any notice of revocation or your completed new, later-dated proxy card, as the case may be, to Nuveen Investments, Inc. in care of Broadridge Financial Solutions, Inc. at P.O. Box 9111, Farmingdale, New York 11735.

If your shares are held in street name, you must contact your broker, bank or other nominee and follow the directions provided to you in order to change your vote.

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Q:   What does it mean if I receive more than one set of materials?

A:    This means you own shares of our common stock that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must complete, sign, date and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards that you receive in order to have all of the shares you own voted at the meeting. Each proxy card you receive comes with its own prepaid return envelope; if you submit your proxy by mail, make sure you return each proxy card in the return envelope that accompanies that proxy card.

Q:   How do I vote my Nuveen Investments 401(k) Plan shares?

A:    If you participate in the Nuveen common stock fund under the Nuveen Investments, LLC Employees’ 401(k)/Profit-Sharing Plan, which we refer to as the “401(k) Plan,” you may give voting instructions to the trustee of the 401(k) Plan by completing and returning the 401(k) Plan instruction card accompanying this proxy statement. Your instructions will tell the trustee how to vote the number of shares of our common stock representing your proportionate interest in the Nuveen common stock fund which you are entitled to vote under the 401(k) Plan and any such instruction will be kept confidential. The trustee will vote your shares in accordance with your duly executed 401(k) Plan instruction card received by September 16, 2007. If you do not give the trustee of the 401(k) Plan voting instructions, the 401(k) Plan trustee will vote your shares of common stock in the same proportion as the shares for which the 401(k) Plan trustee receives voting instructions from other 401(k) Plan participants, unless doing so would not be consistent with certain federal employee benefit laws.

You may also revoke previously given voting instructions by September 14, 2007 by filing with the trustee of the 401(k) Plan either a written notice of revocation or a properly completed and signed 401(k) Plan instruction card bearing a later date. Your voting instructions will be kept confidential by the trustee.

Q:   When do you expect the merger to be completed?

A:    The parties to the merger agreement are working toward completing the merger as promptly as possible. The parties currently expect to complete the merger in the fourth quarter of 2007, although there can be no assurance that the parties will be able to do so. Completion of the merger is subject to a number of conditions specified in the merger agreement. In addition, the merger cannot be completed until the marketing period has expired. The marketing period is a 25-day period that begins after all of the closing conditions have been met, during which time Parent may seek alternative sources of debt financing for the merger.

Q:   If the merger is completed, how will I receive the cash for my shares?

A:    If the merger is completed, if you are a stockholder of record, you will receive a letter of transmittal with instructions on how to send your shares of our common stock to the paying agent in connection with the merger. You will receive cash for your shares from the paying agent after you comply with these instructions. If your shares are held in book-entry form on the records of Nuveen Investments or its transfer agent, promptly after the effective time of the merger the paying agent will mail you a check in the amount of $65.00 per share for each share so held without any further action on your part. If your shares of our common stock are held for you in street name by your broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your street name shares and receive cash for such shares.

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Q:   Is the merger taxable to me?

A:    Generally, yes. The receipt of cash in exchange for shares of our common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes, and may also be a taxable transaction under applicable state, local or foreign income tax laws. In general, for U.S. federal income tax purposes, a stockholder who receives cash in exchange for shares of our common stock pursuant to the merger will recognize capital gain or loss equal to the difference, if any, between the amount of cash per share received by the stockholder in the merger and the stockholder’s adjusted tax basis in the share of our common stock converted into cash in the merger. Any such gain or loss would be long-term capital gain or loss if the holding period for the shares of our common stock exceeded one year. In addition, under certain circumstances, a portion of the merger consideration received may be subject to withholding under applicable tax laws. Any withheld amounts will be treated for all purposes as having been paid to the holder in respect of whose shares the withholding was made.

You should read “Adoption of the Merger Agreement—Material U.S. Federal Income Tax Consequences” on page 66 for a more complete discussion of the United States federal income tax consequences of the merger to you. Tax matters can be complicated, and the tax consequences of the merger to you will depend on your particular tax situation. We urge you to consult your tax advisors on the tax consequences of the merger to you.

Q:   What happens if the merger is not completed?

A:    If the merger agreement is not adopted by the stockholders or if the merger is not completed for any other reason, stockholders will not receive any payment for their shares of our common stock in connection with the merger. Instead, our common stock will continue to be listed and traded on The New York Stock Exchange. We may be required to pay a termination fee or reimburse certain out-of-pocket expenses as described under “Terms of the Merger Agreement—Reimbursement of Expenses; Termination Fees” beginning on page 87 of this proxy statement.

Q:   Should I send in my stock certificates now?

A:    No. Please do not send your stock certificates now. If the merger is completed, you will receive shortly thereafter the letter of transmittal instructing you to send your stock certificates to the paying agent in order to receive the cash payment of the merger consideration for each share of our common stock represented by the stock certificates. You should use the letter of transmittal to exchange your stock certificates for the cash payment to which you are entitled upon completion of the merger. Please do not send in your stock certificates with your proxy card.

Q:   Am I entitled to exercise appraisal rights instead of receiving the merger consideration for my shares?

A:    Yes. As a holder of shares of our common stock, you are entitled to appraisal rights under Delaware law in connection with the merger if you meet certain conditions, which conditions are described in this proxy statement under the section entitled “Adoption of the Merger Agreement—Appraisal Rights” beginning on page 68 of this proxy statement.

Q:   Who can help answer my questions?

A:    If you would like additional copies, without charge, of this proxy statement or if you have questions about the merger agreement or the merger, including the procedures for voting your shares, you should contact MacKenzie Partners, Inc., our proxy solicitation firm, toll free at (800) 322-2885 or (212) 929-5500 (call collect), or write to the following address: 105 Madison Avenue, New York, New York 10016.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

Any statements in this proxy statement about our future results of operations, expectations, plans and prospects, including statements regarding the completion of the proposed merger, constitute forward-looking statements. Forward-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” “plans,” “targets” and/or similar expressions. These forward-looking statements are based on our current estimates and assumptions and, as such, involve uncertainty and risk. For each of these statements, we claim the protection contained in Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act.”

The forward-looking statements are not guarantees of future performance, and our actual results may differ materially from those contemplated by these forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement, or, in the case of documents incorporated by reference or attached to this proxy statement, as of the respective dates of such documents. These and other factors are discussed in the documents that are incorporated by reference in this proxy statement, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 filed with the Securities and Exchange Commission, which we refer to as the “SEC.” In addition to other factors and matters contained or incorporated in this document, we believe the following factors could cause our actual results to differ materially from those discussed in the forward-looking statements:

·       failure to obtain stockholder approval of the merger or the failure to satisfy other closing conditions, including the satisfaction of the revenue run-rate requirement and the receipt of regulatory approvals, with respect to the merger;

·       failure of Parent to obtain the necessary financing arrangements to pay the aggregate merger consideration;

·       the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

·       failure of the merger to close for any other reason;

·       failure to meet expectations regarding the timing, completion and accounting and tax treatments of the merger;

·       the amount of the costs, fees, expenses and charges relating to the merger and the actual terms of the financings that will need to be obtained for the merger;

·       risk that announcement of the proposed merger may negatively affect our relationship with our clients, investment teams and employees;

·       the impact of substantial indebtedness that will need to be incurred to finance the consummation of the merger;

·       changes in the economic environment and other factors that could affect our revenues and profitability;

·       substantial competition that could affect our market share; and

·       exposure to litigation risks, including the impact or outcome of existing or potential litigation relating to the merger.

Except to the extent required under the federal securities laws, we do not intend to update or revise the forward-looking statements. If there is any material change in any of the information previously disclosed, we will, where relevant and to the extent required under applicable law, update such information through a supplement to this proxy statement.

All information contained in this proxy statement concerning Parent, Merger Sub and their affiliates has been supplied by Parent and has not been independently verified by us.

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PARTIES INVOLVED IN THE PROPOSED TRANSACTION

Nuveen Investments, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
Telephone: (312) 917-7700

Nuveen Investments, Inc., a Delaware corporation, is a leading provider of diversified investment services to institutional and high-net-worth investors. The company’s principal businesses are asset management and related research, as well as the development, marketing and distribution of investment products and services for the institutional, affluent and high-net-worth market segments. Nuveen Investments distributes its investment products and services, which include individually managed accounts, closed-end exchange-traded funds and open-end mutual funds, to the affluent and high-net-worth market segments through third party intermediary firms including broker-dealers, commercial banks, private banks, affiliates of insurance providers, financial planners, accountants, consultants and investment advisors. Nuveen Investments also provides institutional managed accounts and partnerships to several institutional market segments.

Nuveen Investments and its subsidiaries offer high-quality investment capabilities through six branded investment teams: NWQ, specializing in value-style equities; Nuveen Investments, focusing on fixed-income investments; Santa Barbara, specializing in growth equities; Tradewinds, specializing in global equities; Rittenhouse, dedicated to “blue-chip” growth equities; and Symphony, with expertise in alternative investments as well as equity and credit strategies. In addition, on April 30, 2007, the company acquired Hyde Park Investment Strategies, which specializes in enhanced equity index strategies.

Nuveen Investments’ common stock is currently listed on The New York Stock Exchange under the symbol “JNC”. Detailed descriptions about Nuveen Investments’ business and financial results are contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which is incorporated in this proxy statement by reference. See “Where Stockholders Can Find More Information” beginning on page 95 of this proxy statement.

Windy City Investments, Inc.
c/o Madison Dearborn Partners, LLC
Three First National Plaza, Suite 3800
Chicago, Illinois 60602
Telephone: (312) 895-1000

Windy City Investments, Inc., which we refer to as Parent, is a Delaware corporation that was formed solely for the purpose of acquiring Nuveen Investments and has not engaged in any business except for activities incidental to its formation, in connection with the financing of the merger consideration and as otherwise contemplated by the merger agreement. Parent is controlled by a consortium of private equity funds led by Madison Dearborn Partners, LLC.

Madison Dearborn is a leading private equity investment firm based in Chicago, Illinois with more than $14.0 billion of equity capital under management. Madison Dearborn makes new investments through its most recent fund, Madison Dearborn Capital Partners V, a $6.5 billion investment fund raised in 2006. Since its inception in 1992, Madison Dearborn has invested in more than 100 companies across a broad spectrum of industries, including basic industries, communications, consumer, financial services and health care.

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Windy City Acquisition Corp.
c/o Madison Dearborn Partners, LLC
Three First National Plaza, Suite 3800
Chicago, Illinois 60602
Telephone:
(312) 895-1000

Windy City Acquisition Corp., which we refer to as Merger Sub, is a Delaware corporation and wholly owned subsidiary of Parent formed for the purpose of effecting the merger. Merger Sub has not engaged in any business except activities incidental to its formation and in connection with the transactions contemplated by the merger agreement. Merger Sub has de minimis assets.

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THE SPECIAL MEETING

General

The enclosed proxy is solicited on behalf of our board of directors for use at a special meeting of stockholders to be held on September 18, 2007, at 2:00 p.m., CDT, or at any adjournments or postponements of the special meeting, for the purposes set forth in this proxy statement and in the accompanying notice of special meeting. The special meeting will be held in the Indiana Room, Aon Center, 200 East Randolph Drive, Chicago, Illinois 60601. We intend to mail this proxy statement and the accompanying proxy card on or about August 15, 2007 to all stockholders entitled to vote at the special meeting.

At the special meeting, stockholders will be asked to consider and vote upon proposals to:

·       adopt the merger agreement, as it may be amended from time to time, which provides for the merger of Merger Sub with and into Nuveen Investments, with Nuveen Investments continuing as the surviving corporation, and the conversion of each outstanding share of Nuveen Investments common stock (other than shares owned by Nuveen Investments, Parent or Merger Sub and dissenting shares under Delaware law) into the right to receive $65.00 in cash, without interest;

·       approve the adjournment of the special meeting, if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement; and

·       transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

We do not expect a vote to be taken on any other matters at the special meeting. If any other matters are properly presented at the special meeting for consideration, however, the holders of the proxies, if properly authorized, will have discretion to vote on these matters in accordance with their best judgment.

Record Date and Voting Information

Holders of record of our common stock at the close of business on August 13, 2007, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting and any adjournments thereof. At the close of business on the record date, 80,016,643 shares of our common stock were outstanding and entitled to vote. A list of stockholders will be available for review at our executive offices located at 333 West Wacker Drive, Chicago, Illinois 60606 during ordinary business hours from September 8, 2007 through and including the date of the special meeting and will be available for review at the special meeting or any adjournment or postponement thereof. Each holder of record of our common stock on the record date will be entitled to one vote on each matter submitted to stockholders for approval at the special meeting for each share held as of the record date.

All votes will be tabulated by the inspector of election appointed for the special meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Brokers, banks or other nominees who hold shares in “street name” for clients typically have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. Absent specific instructions from the beneficial owner of the shares, however, brokers, banks or other nominees are not allowed to exercise their voting discretion with respect to the approval of non-routine matters, such as adoption of the merger agreement. Proxies submitted without a vote by brokers, banks or other nominees on these matters are referred to as “broker non-votes.”

Quorum

Holders of shares of our common stock entitled to vote at the special meeting may take action on a matter at the special meeting only if a quorum of those shares exists with respect to that matter. The presence, in person or by proxy, of the holders of a majority of the voting power of the outstanding shares

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of our common stock as of the close of business on the record date will constitute a quorum for the transaction of business at the special meeting.

Any shares of our common stock held in treasury by us are not considered to be outstanding on the record date or otherwise entitled to vote at the special meeting for purposes of determining a quorum.

Shares represented by proxies reflecting abstentions and properly executed broker non-votes are counted for purposes of determining whether a quorum exists at the special meeting.

Required Vote; Effect of Abstentions and Broker Non-Votes

The affirmative vote of the holders of 40,008,322 shares of our common stock, being a majority of the shares of our common stock outstanding on the record date, is required to adopt the merger agreement, thereby approving the transactions contemplated thereby, including the merger. Approval of the meeting adjournment proposal requires the affirmative vote of the holders of a majority of the shares of our common stock represented at the special meeting, in person or by proxy, and entitled to vote on the proposal.

As of August 13, 2007, the record date, our directors and executive officers beneficially owned and are entitled to vote, in the aggregate, 1,052,460 shares of our common stock, representing approximately 1.3% of the outstanding shares of our common stock. Our directors and executive officers have informed us that they intend to vote all of their shares of our common stock “FOR” the adoption of the merger agreement, thereby approving the merger, and “FOR” the meeting adjournment proposal.

Failure to vote your shares and broker non-votes will have the same effect as a vote “AGAINST” adoption of the merger agreement. Abstentions will be treated as votes “AGAINST” the meeting adjournment proposal and broker non-votes will have no effect on the meeting adjournment proposal.

If the special meeting is adjourned or postponed for any reason, and the record date remains unchanged, at any subsequent reconvening of the special meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the meeting, except for any proxies that have been revoked or withdrawn.

Voting by Proxy; Revocation of Proxies

After carefully reading and considering the information contained in this proxy statement, each stockholder of record of our common stock should either complete, date and sign the enclosed proxy card and mail the proxy card in the enclosed postage pre-paid return envelope, or submit a proxy by telephone or over the Internet by following the instructions included with the enclosed proxy card, in each case, as soon as possible so that those shares of our common stock may be voted at the special meeting, even if such holder plans to attend the special meeting in person. Submitting a proxy now will not limit your right to vote at the special meeting if you decide to attend in person. If your shares are held of record in “street name” by a broker, bank or other nominee and you wish to vote in person at the special meeting, you must obtain from the record holder a proxy issued in your name. Your broker, bank or other nominee may also permit proxy submission by telephone or over the Internet. Please contact your broker, bank or other nominee to determine how to vote your proxy.

Proxies received at any time before the special meeting and not revoked or superseded before being voted will be voted at the special meeting. If the proxy indicates a specification, it will be voted in accordance with the specification. If no specification is indicated, the proxy will be voted “FOR” adoption of the merger agreement and “FOR” the meeting adjournment proposal. A properly executed proxy gives the persons named as proxies on the proxy card authority to vote in their discretion with respect to any other business that may properly come before the meeting or any adjournment or postponement of the meeting.

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Any person giving a proxy pursuant to this solicitation has the power to revoke and change it at any time before it is voted. If you have not voted through a broker, bank or other nominee, you may revoke your proxy before it is voted by:

·       sending a written notice of revocation to Broadridge Financial Solutions, Inc. at the address specified below stating that you would like to revoke your proxy;

·       completing and delivering a later dated proxy card by mail to Broadridge Financial Solutions, Inc.  at the address specified below;

·       providing subsequent telephone or Internet voting instructions; or

·       attending the special meeting and voting in person. Your attendance at the special meeting alone will not revoke a proxy. You must also vote at the special meeting in order to revoke your previously submitted proxy.

You should send any notice of revocation or your completed, later-dated proxy card, as the case may be, to Nuveen Investments, Inc. in care of Broadridge Financial Solutions, Inc. at P.O. Box 9111, Farmingdale, New York 11735.

If you have given voting instructions to a broker, bank or other nominee that holds your shares in “street name,” you may revoke those instructions by following the directions given by the broker, bank or other nominee. If your broker, bank or other nominee allows you to submit a proxy by telephone or over the Internet, you may be able to change your vote by submitting a proxy again by telephone or over the Internet.

If you participate in the Nuveen common stock fund under the 401(k) Plan, you may give voting instructions to the trustee of the 401(k) Plan by completing and returning the 401(k) Plan instruction card accompanying this proxy statement. Your instructions will tell the trustee how to vote the number of shares of our common stock representing your proportionate interest in the Nuveen common stock fund which you are entitled to vote under the 401(k) Plan and any such instruction will be kept confidential. The trustee will vote your shares in accordance with your duly executed 401(k) Plan instruction card received by September 16, 2007. If you do not give the trustee of the 401(k) Plan voting instructions, the 401(k) Plan trustee will vote your shares of common stock in the same proportion as the shares for which the 401(k) Plan trustee receives voting instructions from other 401(k) Plan participants, unless doing so would not be consistent with certain federal employee benefit laws.

You may also revoke previously given voting instructions by September 14, 2007 by filing with the trustee of the 401(k) Plan either a written notice of revocation or a properly completed and signed 401(k) Plan instruction card bearing a later date. Your voting instructions will be kept confidential by the trustee.

Please do not send in stock certificates at this time. If the merger is completed, you will receive instructions regarding the procedures for exchanging your existing Nuveen Investments stock certificates for the payment of the merger consideration.

Expenses of Proxy Solicitation

This proxy statement is being furnished in connection with the solicitation of proxies by our board of directors. We will bear the entire expense of soliciting proxies, including the cost of preparing, printing and mailing this proxy statement, the notice of the special meeting of stockholders, the enclosed proxy card and any additional information furnished to stockholders. We have engaged the services of MacKenzie Partners, Inc. to solicit proxies and to assist in the distribution of proxy materials. In connection with its retention by us, MacKenzie Partners, Inc. has agreed to provide consulting and analytic services and to assist in the solicitation of proxies, primarily from banks, brokers, institutional investors and individual stockholders. We have agreed to pay MacKenzie Partners, Inc. a fee of $25,000 plus reasonable out-of-pocket expenses for its services. Copies of solicitation materials will also be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our common stock beneficially owned by others to forward to these beneficial owners. We may reimburse persons representing beneficial owners

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of our common stock for their costs of forwarding solicitation materials to the beneficial owners. In addition to the solicitation of proxies by mail, solicitation may be made personally, by telephone and by fax, and we may pay persons holding shares for others their expenses for sending proxy materials to their principals. In addition to solicitation by the use of the mails, proxies may be solicited by our directors, officers and employees in person or by telephone, e-mail or other means of communication. No additional compensation will be paid to our directors, officers or employees for their services.

Householding

Some banks, brokerages and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of this proxy statement may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of this proxy statement, including the attached appendices, to you if you call or write our transfer agent, The Bank of New York, at the following address or telephone number: Stockholder Relations, Church Street Station, P.O. Box 11258, New York, New York 10286-1258 or (800) 524-4458. If you want to receive separate copies of our proxy statements or annual reports in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact The Bank of New York at the above address and telephone number.

Adjournments and Postponements

Although an adjournment of the special meeting is not expected to be required, if the meeting adjournment proposal is approved, the special meeting may be adjourned for the purpose of soliciting additional proxies to approve the proposal to adopt the merger agreement. The Chairman or a vote by a majority of the voting power of the shares of our common stock present in person or by proxy and entitled to vote on the meeting adjournment proposal may adjourn the meeting.

Any adjournment may be made without notice, other than by an announcement made at the special meeting, unless the adjournment is for more than thirty days or a new record date is fixed for the adjourned meeting. Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow our stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned.

At any time prior to convening the special meeting, our board of directors may postpone the special meeting for any reason without the approval of our stockholders. If postponed, we will provide at least 20 days’ notice of the new meeting date. Although it is not currently expected, our board of directors may postpone the special meeting for the purposes of soliciting additional proxies if it concludes that by the meeting date it is reasonably likely that we will not have received sufficient proxies to constitute a quorum or sufficient votes to approve the proposal to adopt the merger agreement. Similar to adjournments, any postponement of the special meeting for the purpose of soliciting additional proxies will allow stockholders who have already sent in their proxies to revoke them at any time prior to their use. If the special meeting is adjourned or postponed and the record date remains unchanged, unrevoked proxies will continue to be effective for purposes of voting on the new meeting date.

Attending the Special Meeting

In order to attend the special meeting in person, you must be a stockholder of record on the record date, hold a valid proxy from a record holder or be an invited guest of Nuveen Investments. You will be asked to provide proper identification at the registration desk on the day of the meeting or any adjournment or postponement of the meeting.

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PROPOSAL 1:  ADOPTION OF THE MERGER AGREEMENT

Background of the Merger

Nuveen Investments was a wholly owned subsidiary of The St. Paul Travelers Companies, Inc. until 1992 when approximately 25% of our common stock was sold in a public offering. In early 2005, St. Paul Travelers decided to examine strategic alternatives with respect to divesting its approximately 79% equity interest in us. As part of their process, St. Paul Travelers considered indications of interest from various parties, including Madison Dearborn. At that time, Madison Dearborn entered into a confidentiality agreement with us, conducted due diligence, engaged in discussions with our management, and ultimately proposed a variety of transaction structures to monetize St. Paul Travelers’ interest or otherwise purchase us at a value of up to $37.00 per share. In each of Madison Dearborn’s proposed transaction structures, our status as a controlled or privately-held company would have been maintained. St. Paul Travelers, however, determined to divest all of its shares of our common stock through a public offering process from April through August 2005 instead of pursuing a transaction with Madison Dearborn or any other party.

Subsequent to the divestiture by St. Paul Travelers, we have been approached from time to time by various other third parties interested in discussing possible strategic transactions, including the following: (a) in the fall of 2006, representatives of a large private equity firm (not affiliated with Madison Dearborn) contacted and met with us to express interest in exploring a variety of different strategic transactions, including development of co-branded products and, in subsequent discussions, a leveraged buy-out of our company, (b) in late 2006 and early 2007, representatives of a large life insurance and pension company contacted us several times to discuss a potentially substantial long-term equity investment in us and (c) in early 2007, representatives of an asset management company with a significant institutional presence approached us to discuss potential partnership opportunities between our two companies. None of these preliminary discussions progressed into meaningful consideration of, or resulted in an offer to pursue, a strategic transaction.

In addition, following the 2005 discussions with Madison Dearborn, Madison Dearborn representatives and our senior management remained in contact with each other and periodically discussed our business and the asset management industry in general.

At Madison Dearborn’s request, on December 1, 2006, senior representatives of Madison Dearborn met with our Chairman and our President. At this meeting, Madison Dearborn presented its views on accelerating our business’ growth and structuring transactions in the asset management industry. Madison Dearborn described an illustrative strategic transaction based upon a hypothetical acquisition of our company for $55.00 per share. Madison Dearborn also described, in general terms and without addressing any specific arrangements or proposals, management incentive structures that it had developed in connection with potential investments in the asset management and other service industries. Our management did not provide any specific reaction to Madison Dearborn’s presentation or the illustrative transaction.

Subsequent to the December 1, 2006 meeting, representatives of Madison Dearborn followed up with us on an intermittent basis, commenting favorably on our company and our recent performance, and sharing Madison Dearborn’s perspectives on the asset management industry and the capital markets.

In March 2007, Madison Dearborn requested another meeting. After informing our lead independent director of this request, our senior management met with Madison Dearborn on March 22, 2007. At this meeting, Madison Dearborn expressed its continuing interest in our company and desire to make an investment in the asset management industry. Our management did not provide any specific reaction to Madison Dearborn’s expression of interest in our company.

On March 29, 2007, Madison Dearborn sent a letter to our board of directors, proposing that a company to be formed by Madison Dearborn purchase 100% of the outstanding shares of our common

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stock at a purchase price of between $58.00 and $59.00 per share (the “Initial Offer”). The letter described Madison Dearborn’s longstanding interest in us, discussed the opportunities that Madison Dearborn saw for us as a private company and described the partnership approach that Madison Dearborn would implement to incentivize our key employees if the proposed transaction were to occur. Upon receipt, we informed our lead director, who informed our other non-management directors, of the letter.

On April 2, 2007, our board of directors met and discussed the Initial Offer and determined that we should gather additional information with respect to the Initial Offer to assist our board of directors in evaluating the business case for us to engage in a strategic transaction, including the Initial Offer. Our board of directors authorized management to meet with representatives of Madison Dearborn for this purpose and, subject to execution of an acceptable confidentiality agreement, to provide confidential information to Madison Dearborn. Our board of directors did not authorize management to engage in negotiations with Madison Dearborn concerning a possible transaction, and decided to withhold further consideration of the merits of the Initial Offer pending receipt of additional information.

On April 4, 2007, our senior management met with senior representatives of Madison Dearborn at Madison Dearborn’s offices. At the meeting, we advised Madison Dearborn that our board of directors had authorized management to gather additional information for the purpose of evaluating the business case for the company to engage in a strategic transaction, but that management had not been authorized by our board of directors to negotiate such a transaction. At the conclusion of this meeting, the parties agreed to meet again on April 6, 2007 so that we could provide information to Madison Dearborn following execution of a confidentiality agreement. On April 5, 2007, we and Madison Dearborn entered into a confidentiality agreement.

On April 6, 2007, our senior management met with senior representatives of Madison Dearborn at Madison Dearborn’s offices. At this meeting, we sought information about the assumptions underlying the Initial Offer and provided information in response to Madison Dearborn’s information requests. At the meeting, Madison Dearborn presented us with an overview of Madison Dearborn and its approach to private equity investments, and also outlined its interest in the asset management industry and our company. In addition, without discussing specific compensation or equity arrangements, Madison Dearborn outlined its general approach to key employee compensation and equity incentives and expressed a belief that its approach would enable us to retain key employees.

On April 10, 2007, our senior management again met with representatives of Madison Dearborn. The primary purpose of the meeting was to continue the discussions from the April 6th meeting, to obtain further information about the assumptions underlying the Initial Offer and to respond to additional information requests. We did not provide our forecasts or projections of our financial results at this time.

On April 20, 2007, Madison Dearborn provided us with a request for additional information. We determined not to respond to this request, or have further substantive conversations with Madison Dearborn, until our management had an opportunity to report back to, and receive further direction from, our board of directors. From April 20th until May 22nd, Madison Dearborn periodically sought to engage us in substantive discussions concerning the Initial Offer; however, we declined to engage in substantive discussions during this period of time.

On April 24, 2007, a special meeting of our board of directors was convened. At the beginning of this meeting, the non-management disinterested members of our board of directors (the “Disinterested Directors”) met in executive session. Our outside legal counsel briefed the Disinterested Directors on their fiduciary duties. After the executive session, members of our senior management were invited to join the meeting. Management then briefed our board on their meetings with Madison Dearborn since the last board meeting. Management then advised our board that they believed the Initial Offer presented an interesting business opportunity and represented a meaningful, but not compelling, premium to the then current price of our common stock, and further stated that they would support engaging in further

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discussions with Madison Dearborn to consider Madison Dearborn’s best proposal and to determine its attractiveness. The Disinterested Directors then met in executive session to discuss management’s assessment of the Initial Offer and next steps.

On May 3, 2007, a special meeting of the Disinterested Directors was convened to further discuss the Initial Offer. At this meeting, the Disinterested Directors discussed and considered the appropriate manner in which to evaluate the Initial Offer, and concluded that they should engage in a more thorough evaluation of the Initial Offer. However, no decision was made to engage in a sale or any other strategic alternative that might result from the evaluation process. Instead, the Disinterested Directors concluded that the Initial Offer should be evaluated in light of both our current strategic plan and outlook and other possible strategic alternatives available to us to determine if the Initial Offer might provide superior value for our stockholders. The Disinterested Directors also discussed the formation of a special committee to evaluate the Initial Offer. Finally, the Disinterested Directors concluded that they should retain independent legal and financial advisors to assist in the evaluation process. Prior to the meeting, a representative of Goldman Sachs had been contacted regarding Goldman Sachs’ potential engagement and had been invited to join the special meeting. A representative of Katten Muchin Rosenman LLP (“Katten Muchin Rosenman”) was also contacted prior to the meeting to discuss the Initial Offer and Katten Muchin Rosenman’s possible retention as legal advisor to the Disinterested Directors. After consideration of their qualifications and independence, the Disinterested Directors decided to retain Katten Muchin Rosenman as their legal advisor and Goldman Sachs as their financial advisor.

A representative of Goldman Sachs then joined the meeting and discussed the manner in which Goldman Sachs would prepare a financial and strategic analysis of our company and the asset management industry to assist the Disinterested Directors in their evaluation of the Initial Offer and other strategic alternatives. Members of our senior management then joined the meeting and were instructed by the Disinterested Directors to provide Goldman Sachs with the information it requested to enable Goldman Sachs to provide a financial and strategic analysis of our company.

On May 8, 2007, a special meeting of the Disinterested Directors was held at our offices. At the meeting, representatives of Katten Muchin Rosenman led a discussion among the Disinterested Directors regarding their fiduciary duties in connection with the evaluation of the Initial Offer and any other viable alternatives, as well as the role of management and outside advisors in the evaluation process. The Disinterested Directors concluded that they would continue to direct and monitor the evaluation process and that they and their advisors would conduct any negotiations with Madison Dearborn with input from management. Representatives of Katten Muchin Rosenman also discussed with the Disinterested Directors the benefits of forming a special committee comprised of disinterested directors to conduct the evaluation process. The Disinterested Directors then determined that it would be appropriate to recommend to our board of directors that a special committee be appointed, comprised of all of the Disinterested Directors (which we refer to in this proxy statement as the “special committee”), with authority to manage and direct an evaluation process on behalf of our stockholders.

On May 11, 2007, a meeting of the Disinterested Directors was convened for the purpose of having Goldman Sachs provide the Disinterested Directors with a status report of Goldman Sachs’ due diligence review and ongoing financial and strategic analysis of our company. Representatives of Katten Muchin Rosenman and Goldman Sachs attended the meeting. At the meeting, the Disinterested Directors requested that Goldman Sachs provide them at the next meeting with Goldman Sachs’ observations on (1) the outlook for the asset management industry generally and our position within the industry and (2) the Initial Offer and other possible strategic alternatives available to us. It was further agreed that our senior management should be asked to consider and provide feedback on Goldman Sachs’ analysis.

On May 15, 2007, a meeting of the Disinterested Directors was convened at the offices of Katten Muchin Rosenman, followed by a meeting of our board of directors. Representatives of Katten Muchin Rosenman and Goldman Sachs attended the meetings. At the meeting of the Disinterested Directors, the

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Disinterested Directors reviewed and considered proposed resolutions that, among other things, provided for the formation of the special committee with the authority to review and evaluate the Initial Offer and any other viable alternative strategic transactions; to negotiate the price and terms of any potential strategic transaction and to evaluate other strategic alternatives; to discontinue the evaluation of strategic alternatives at any time; and to recommend action to our board of directors with respect to potential strategic transactions, including the authority to recommend the rejection of any and all potential strategic transactions.

At this May 15, 2007 meeting of the Disinterested Directors, Goldman Sachs delivered a presentation on the asset management industry, including a review of historical trends, challenges and current market dynamics associated with certain segments in which our company operates, and reviewed recent significant strategic transactions in the industry. Goldman Sachs then reviewed with the special committee our specific position within the asset management industry and discussed some of the benefits and challenges with our “multi-boutique” business model. While noting our favorable market position in the closed-end mutual fund and retail separately managed accounts segments, among other things, Goldman Sachs also identified possible challenges in our ability to expand into new asset classes or marketplaces without further acquisitions and potential costs involved in sustaining effective incentive structures. Goldman Sachs also provided the special committee with an overview of how our common stock had performed historically and reviewed our operating performance relative to our competitors. After discussion of these items, Goldman Sachs reviewed on a comparative basis estimated strategic transaction values in private acquisitions compared to public trading prices. Goldman Sachs also discussed with the Disinterested Directors the execution risks inherent in mergers and acquisitions in the asset management business given the importance of key personnel and third-party relationships and the risks of potential business loss.

Subject to certain qualifications and assumptions, Goldman Sachs advised the Disinterested Directors that, based upon the analyses it had conducted, the Initial Offer was in the range of potential values implied by its financial analyses of selected other strategic alternatives available to us, including continuing to operate according to our management’s current strategic plan. In addition, based upon the analyses it had conducted, as well as its experience and knowledge of the industry, Goldman Sachs indicated that an offer in the range of $64.00 to $65.00 per share would represent a transaction value that was at the highest end of the range of potential values implied by its financial analyses of selected other potential strategic alternatives available to us.

The Disinterested Directors and Goldman Sachs then discussed whether, if Madison Dearborn was prepared to offer a price in that range and our board of directors determined that a sale of our company was in the best interest of our stockholders, a post-signing market check would be adequate to confirm that such a price would be attractive relative to other potential strategic alternatives. The Disinterested Directors and Goldman Sachs further discussed whether the attractiveness of a price in the range of $64.00 to $65.00 per share, given the valuation multiples and significant premium to stockholders, was sufficiently high such that the benefit that might be gained by conducting a pre-signing market check would not outweigh the potentially adverse consequences to our operations that might arise as a result of undertaking such a process. Among other things, the Disinterested Directors considered the uncertainty that could result from a pre-signing market check, which could cause financial advisors and consultants to suspend recommending our products and services to their clients, affect the stability of our relationships with members of our investment teams and impair our ability to retain key employees should any of these individuals become aware of a market check. The Disinterested Directors also discussed whether a pre-signing market check process could adversely affect our relationship with the board of directors of our registered investment companies (the “Fund Board”), and the potential erosion to our assets under management that might result from all of the foregoing factors. After further discussion regarding Goldman Sachs’ initial presentation, the Disinterested Directors invited management to join the meeting.

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Once the management members of our board of directors and other senior management joined the meeting, a special meeting of our board of directors was convened. After discussion and consideration of the scope of authority to be granted to the special committee and certain other key terms of the special committee’s authorization, our board of directors unanimously approved the resolutions authorizing the formation of the special committee. Following this action, the board meeting was adjourned.

The Disinterested Directors then reconvened as the special committee. The special committee appointed our lead director as the chair of the special committee and ratified and approved the retention of Katten Muchin Rosenman and Goldman Sachs as the advisors to the committee. With members of senior management remaining present for the special committee meeting, Goldman Sachs reviewed its analyses of the asset management industry, its financial analyses and management’s current strategic plan and our prospects. Goldman Sachs also reviewed various possible strategic alternatives with the special committee, including a recapitalization transaction, a transformational acquisition or merger and a sale of our company. The special committee considered whether each of the non-sale transaction alternatives would likely result in a higher premium to our stockholders than if the special committee were to negotiate a sale transaction at the higher range of per share prices discussed earlier in the meeting. After a discussion of Goldman Sachs’ report and feedback from our management, the special committee determined that, prior to responding to the Initial Offer, it would be appropriate to obtain management’s assessment of potential strategic transactions with financial sponsors generally, and with certain industry participants and other strategic parties.

Following the meeting, the special committee, in consultation with Katten Muchin Rosenman, advised our senior management of the initiation of the special committee evaluation process, and informed them that the special committee, with the assistance of its advisors, would direct all due diligence processes and strategic discussions and negotiations that may occur with third parties in connection with the process. The special committee also instructed our management to continue to refrain from any discussions with Madison Dearborn or any other potentially interested party regarding the specific terms and conditions of any potential employment arrangements or potential equity investments by management in connection with a possible strategic transaction, without the prior consent of the special committee.

On May 16, 2007, a meeting of the special committee was convened, with representatives of Katten Muchin Rosenman and Goldman Sachs in attendance. During the meeting, the special committee engaged in further discussion regarding Goldman Sachs’ strategic and financial analysis of our company and its analysis of the Initial Offer. Based upon the foregoing, the special committee determined that the Initial Offer was insufficient. The special committee discussed with its advisors the range of per share prices at which it might consider pursuing a sale to Madison Dearborn while concurrently undertaking a market check to assess interest in the company at that price level, as well as the higher range of per share prices discussed during the May 15th meeting at which the company might agree to a brief period of exclusive due diligence and negotiation with Madison Dearborn subject to a post-signing market check during a “go-shop” period.

On May 17, 2007, our senior management provided the special committee with additional information on the prospects of, and challenges associated with, pursuing a strategic transaction with financial sponsors generally, certain industry participants and other strategic candidates that management and Goldman Sachs had identified. Among other things, this information identified a number of benefits, limitations and risks associated with each of these alternatives, including potential synergies, conflicting business objectives, cultural differences and the potential for loss of key employees. Pursuant to the special committee’s request, management also provided the special committee with a review of communications with third parties, including Madison Dearborn, that had expressed an interest in pursuing a strategic transaction with us.

From May 17, 2007 through May 21, 2007, members of the special committee, Goldman Sachs and Katten Muchin Rosenman engaged in a number of telephonic discussions regarding the information

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presented by Goldman Sachs and our management during and after the May 15th meeting. After considering this information and all of the factors described above, the special committee reaffirmed its prior decision that the Initial Offer was insufficient and determined to advise Madison Dearborn of that decision. The special committee further decided to advise Madison Dearborn that the special committee would be willing to consider a transaction at a price over $62.00 per share and would be willing to grant a brief period of exclusivity at a price of at least $65.00 per share.

On May 21, 2007, at the direction of the special committee, we signed a revised confidentiality agreement with Madison Dearborn that provided us with further protection with respect to Madison Dearborn’s transmission of confidential information about our company to potential financing sources. Among other things, the revised confidentiality agreement required Madison Dearborn to obtain our prior consent before sharing information with any potential financing source. Furthermore, any such financing source would be required to sign a confidentiality agreement with Madison Dearborn in a form approved by the special committee’s advisors and would be required to agree not to enter into any exclusivity arrangement with Madison Dearborn or any other interested party with respect to us.

On May 22, 2007, at the direction of the special committee, the chairman of the special committee and a representative of Goldman Sachs informed Madison Dearborn that the special committee did not believe that Madison Dearborn’s proposed purchase price of between $58.00 and $59.00 per share was sufficient consideration for our stockholders. However, they informed Madison Dearborn that the special committee might be willing to consider an offer in the range of $62.00 to $65.00 per share subject to a concurrent market check, but if Madison Dearborn wished to negotiate a transaction on an exclusive basis for a limited period of time, Madison Dearborn would have to increase its proposed purchase price to at least $65.00 per share.

On May 24, 2007, Madison Dearborn delivered a revised indication of interest to the special committee that included a proposed purchase price of $65.00 per share (the “Second Offer”). The Second Offer was contingent upon Madison Dearborn’s right to engage in exclusive negotiations with the special committee for a period of 30 days, and included a timetable for completion of due diligence and negotiation of a definitive merger agreement. That same day, Madison Dearborn advised a representative of Goldman Sachs that Madison Dearborn had arranged for the required debt and equity financing to complete a transaction at the proposed purchase price of $65.00 per share.

In the evening of May 24, 2007, a meeting of the special committee was convened to consider the Second Offer, with representatives of Katten Muchin Rosenman and Goldman Sachs in attendance. During the meeting, the special committee and its advisors discussed the terms of the Second Offer, including the proposed purchase price being contingent upon a limited period of exclusive negotiations. Goldman Sachs stated that the proposed purchase price of $65.00 per share represented valuation multiples in excess of those typically paid in acquisitions of asset management businesses over the last several years, and that Madison Dearborn’s proposed price per share represented a significant premium for our stockholders. The special committee and Goldman Sachs discussed whether an auction process would likely yield a price in excess of $65.00 per share from another bidder, whether an auction could adversely affect our business and the risk that an auction would not be successful. Consideration was also given to whether an auction process was likely to jeopardize the ability of the special committee to secure a $65.00 per share price from Madison Dearborn. After further discussion, the special committee, with input from its advisors, determined that it would be appropriate to agree to a shorter, twenty-day period of exclusive due diligence review and negotiations with Madison Dearborn, subject to Madison Dearborn maintaining its proposed purchase price of $65.00 per share. The special committee then discussed with Goldman Sachs and Katten Muchin Rosenman the appropriate manner in which to convey this position to Madison Dearborn, and subject to acceptance, coordinate the due diligence and negotiation process with Madison Dearborn.

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On May 29, 2007, Madison Dearborn and the special committee agreed to a twenty-day  exclusivity period, subject to Madison Dearborn maintaining a proposed purchase price of $65.00 per share, and executed a letter agreement to that effect.

On May 29, 2007, representatives of Madison Dearborn met with members of our senior management and representatives of Goldman Sachs and Katten Muchin Rosenman at the offices of Katten Muchin Rosenman to conduct further due diligence discussions and coordinate the schedule of management presentations, due diligence meetings and the provision of information over the course of the exclusivity period.

On May 31, 2007, a management presentation and due diligence session was held, which included members of our senior management, representatives of Madison Dearborn and its potential equity and debt financing sources that had entered into confidentiality agreements with us. Prior to this meeting, we provided to Madison Dearborn the projections described in “—Financial Projections” below. Representatives of Goldman Sachs and Katten Muchin Rosenman also were in attendance.

On June 1, 2007, a meeting of the special committee was convened with representatives of Katten Muchin Rosenman and Goldman Sachs in attendance. During the meeting, the special committee requested and received an update from Katten Muchin Rosenman and Goldman Sachs concerning the ongoing due diligence process and the proposed terms of the initial draft of the merger agreement. The special committee also reviewed with its advisors the remaining schedule of due diligence meetings and discussions, and engaged in a thorough discussion concerning the appropriate manner in which the Fund Board should be advised of the potential strategic transaction with Madison Dearborn. Because key employee retention is a significant issue for all asset management firms, including our company, on June 1, 2007, with the approval of the special committee, representatives of Madison Dearborn met with members of our senior management and discussed in general terms Madison Dearborn’s contemplated equity incentive structure for key employees. Representatives of Goldman Sachs and Katten Muchin Rosenman were present for the meeting.

In the evening of June 1, 2007, Katten Muchin Rosenman delivered an initial draft of the merger agreement to Parent and its outside counsel.

From June 4 through June 8, 2007, numerous due diligence meetings and discussions were held with members of senior management, senior members of our product line, distribution and municipal investment teams, Madison Dearborn and certain of Madison Dearborn’s potential equity and debt financing sources. Representatives of Goldman Sachs were present for each of these meetings and discussions. During this time period, the chairman of the special committee also engaged in numerous other discussions with the special committee’s advisors, representatives of Madison Dearborn, senior management, and certain members of the Fund Board regarding the proposed transaction, and briefed the other members of the special committee on the substance of those communications. In addition, on June 6, 2007, Parent’s counsel provided comments on the draft merger agreement to our counsel and counsel for the special committee.

On June 8, 2007, a meeting of the special committee was convened with representatives of Katten Muchin Rosenman and Goldman Sachs in attendance. During the meeting, the special committee requested and received an update concerning the due diligence process, and the chairman of the special committee provided an update concerning his most recent discussion with certain members of the Fund Board concerning the potential transaction with Madison Dearborn, which discussion included a review of regulatory considerations relating to the transaction. After further discussion concerning the need for the Fund Board to have sufficient time and access to information to evaluate the potential transaction, the special committee determined that it would be appropriate to extend Madison Dearborn’s exclusivity period from June 17, 2007 to June 20, 2007.

Katten Muchin Rosenman then discussed with the special committee certain non-price related issues that Katten Muchin Rosenman, Goldman Sachs and our counsel had identified in the comments received

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from Madison Dearborn’s counsel on the draft merger agreement. Such issues related to closing conditions; our ability to solicit competing proposals during the go-shop period; the break-up fees payable by us and Parent and the circumstances in which such fees and/or Parent’s expenses would be payable; the Guarantors’ guarantees of the damages payable by Parent if it breached the merger agreement; the definition of a material adverse effect; and restrictions on our ability to continue to pay ordinary course dividends and take other actions prior to closing. The special committee then discussed with its advisors the approach to be taken in negotiating the issues raised in the comments on the draft merger agreement received from Parent’s counsel and the timetable for such negotiations.

On June 8, 2007, Madison Dearborn provided copies of the debt financing commitment letters issued to Parent in connection with the transaction.

During the week of June 10, 2007, representatives of Madison Dearborn, Goldman Sachs and our senior management participated in due diligence meetings with senior members of our equity investment teams in California. In addition, representatives of the special committee and its advisors, Madison Dearborn and the company continued to engage in discussions and negotiations with respect to the merger agreement and drafts of the other transaction documents. During this time period, the chairman of the special committee also continued discussions with senior management and the special committee’s legal and financial advisors concerning the negotiation of the draft merger agreement and the drafts of other transaction documents.

After discussion among the special committee members and representatives of Katten Muchin Rosenman, the special committee members concluded that it would be prudent to retain a second financial advisor to obtain a separate, independent opinion to assess the fairness, from a financial point of view, of the consideration to be received by our stockholders in the transaction. On June 16, 2007, the special committee members decided that it would be appropriate to engage Sandler O’Neill for that purpose. Sandler O’Neill’s engagement letter, which was formally presented and ratified at the next committee meeting, provided that Sandler O’Neill’s fee would not be contingent upon the consummation of a transaction with Madison Dearborn. Upon its engagement, Sandler O’Neill immediately began conducting a due diligence review and financial analysis of our company and an evaluation of the terms of the proposed merger agreement.

From June 16, 2007 through June 19, 2007, the parties continued to negotiate the terms of the transaction documents, including the merger agreement. On June 17, 2007, as previously contemplated, the special committee agreed to extend Madison Dearborn’s exclusivity period until 11:59 p.m. on June 20, 2007.

In the afternoon of June 18, 2007, a meeting of the Fund Board was convened at our offices for the purpose of considering the proposed transaction with Madison Dearborn. Representatives of Madison Dearborn discussed the transaction with the Fund Board. Following that discussion, representatives of Goldman Sachs gave an overview of the terms of the merger, after which a further discussion ensued. Although the Fund Board indicated that it would need additional information before formally considering new advisory agreements to take effect upon completion of the merger and recommending that fund shareholders approve those advisory agreements, the Fund Board indicated that, based on the information that had been presented to the Fund Board at and prior to the June 18th meeting, it had no material concerns with the transaction that it anticipated would ultimately prevent the Fund Board from approving new advisory and sub-advisory agreements.

In the evening of June 18, 2007, a meeting of the special committee was convened with representatives of Katten Muchin Rosenman, Goldman Sachs and Sandler O’Neill in attendance. During the meeting, the special committee ratified the appointment of Sandler O’Neill to provide a second fairness opinion in connection with the transaction, and discussed with its advisors the status of the ongoing negotiations with Madison Dearborn. The special committee then considered the then current draft of the merger agreement, which had been substantially negotiated, was in nearly final form and had been circulated to

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the special committee for its review prior to the meeting. Representatives of Katten Muchin Rosenman reviewed the merger agreement with the special committee, including the status of the parties’ ongoing negotiations with respect to the few remaining open issues in the agreement. Representatives of Katten Muchin Rosenman also reviewed with the special committee a draft of the limited guaranty to be provided by Madison Dearborn and certain other equity investors in connection with the transaction and Madison Dearborn’s financing representations and covenants in the merger agreement. Representatives of Goldman Sachs then outlined for the special committee the post-execution transaction timeline, including how Goldman Sachs would conduct the solicitation process during the 30 day go-shop period. On June 19, 2007, the parties completed their negotiation of the few remaining open items in the draft merger agreement.

Also on June 19, 2007, meetings of the special committee and our full board of directors were convened at the offices of Katten Muchin Rosenman to consider the proposed transaction and related matters. The special committee meeting was attended by representatives of Katten Muchin Rosenman, Goldman Sachs, Sandler O’Neill and, for a portion of the meeting, Cravath, Swaine & Moore LLP, special counsel to the company. Representatives of Katten Muchin Rosenman reviewed the fiduciary duties of the special committee members in considering whether to recommend approval of the transaction to our board of directors and the process that had been undertaken by the special committee to ensure that they had fulfilled those duties. The special committee then received a briefing on the Fund Board meeting and an update concerning the final negotiations with Madison Dearborn. In respect of the merger agreement, the briefing highlighted certain provisions of the merger agreement, including the closing conditions; our ability to solicit competing proposals during the go-shop period; the break-up fees payable by us and Parent and the circumstances in which such fees and/or Parent’s expenses would be payable; the Equity Sponsors’ guarantees of the damages payable by Parent if it breached the merger agreement; the definition of a material adverse effect; and our ability to continue to pay ordinary course dividends. These provisions were then compared to the initial draft of the merger agreement submitted by Parent’s counsel. Representatives of Goldman Sachs and Sandler O’Neill then provided presentations to the special committee in which they reviewed and provided their respective financial analyses concerning our company and the Second Offer and the process and methodologies employed in connection with such analyses. At the conclusion of their presentations, each of Goldman Sachs and Sandler O’Neill rendered to the special committee its oral opinion, to be subsequently confirmed in writing, to the effect that, as of that date and based upon and subject to the assumptions, limitations and qualifications described in its opinion, the consideration of $65.00 per share of common stock to be received by our stockholders pursuant to the merger agreement was fair, from a financial point of view, to such stockholders.

After further discussions and consideration of the proposed terms of the merger agreement and the advice of its legal and financial advisors, the special committee unanimously resolved to recommend that our board of directors approve the merger agreement and recommend that our stockholders vote in favor of its adoption.

Following the special committee meeting, our board of directors meeting commenced, with representatives of our senior management, Cravath, Swaine & Moore, Katten Muchin Rosenman, Goldman Sachs, and Sandler O’Neill present. At the meeting, Cravath, Swaine & Moore reviewed the fiduciary duties of our directors in considering whether to approve the transaction and provided the directors with an overview of the principal terms of the merger agreement. At the request of the special committee, each of Goldman Sachs and Sandler O’Neill then provided a report of their financial analyses concerning our company and the Second Offer, and conveyed verbally to our board of directors its opinion previously provided to the special committee concerning the fairness, from a financial point of view, to our stockholders of the consideration of $65.00 per share of common stock to be received by our stockholders pursuant to the merger agreement. Each such oral opinion was subsequently confirmed by delivery of a written opinion following the meeting. The special committee then delivered to our board of directors its recommendation in favor of the merger agreement. After considering, among other things, the factors

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described below under “—Reasons for the Merger; Recommendations of the Special Committee and Board of Directors,” the financial analyses and fairness opinions of Goldman Sachs and Sandler O’Neill, and the unanimous recommendation of the special committee, our board of directors unanimously approved the merger agreement and the transactions contemplated thereby and recommended that our stockholders adopt the merger agreement.

After the board meeting, the merger agreement was executed along with the related financing commitments and guarantees. Prior to the opening of trading on the New York Stock Exchange on June 20, 2007, we issued a press release announcing the signing of the merger agreement and later that same day filed a Current Report on Form 8-K with the SEC disclosing the merger and attaching a copy of the definitive merger agreement as an exhibit.

Beginning on June 20, 2007, pursuant to the solicitation provisions set forth in the merger agreement, Goldman Sachs began contacting parties that it had identified to the special committee as potentially having an interest in making a competing proposal to acquire us. As part of the go-shop process, the special committee established a protocol by which it retained active oversight of the solicitation process and the activities of senior management and the special committee’s financial advisors in connection therewith. Contacts with potential purchasers were coordinated through the special committee’s financial advisors, with the assistance of management to the extent requested by the special committee and its financial advisors.

During the thirty-day go-shop period, Goldman Sachs contacted parties that it believed, based on size and business interests, would be capable of, and might be interested in, consummating an acquisition of our company. During this period, Goldman Sachs contacted or was contacted by 29 parties, which included financial and strategic potential buyers. Among these 29 parties were each of the parties that, since 2005, had expressed an interest in exploring a strategic transaction with us. Of these parties, three expressed a willingness to receive and evaluate information about our company, and one party signed a confidentiality agreement and received certain non-public materials regarding us. None of the parties Goldman Sachs contacted submitted a proposal to acquire us prior to the end of the go-shop period. Accordingly, following the end of the go-shop period, we notified Parent that we had not received any “takeover proposals” (as defined in the merger agreement) and therefore there were no “excluded parties” for the purposes of the solicitation and termination provisions of the merger agreement.

Reasons for the Merger; Recommendations of the Special Committee and Board of Directors

Special Committee

The special committee, with the advice and assistance of its independent legal and financial advisors, Katten Muchin Rosenman and Goldman Sachs, respectively, evaluated and, along with the company’s legal advisors, negotiated the merger agreement. The special committee unanimously determined that the proposed merger was advisable to, and in the best interest of, Nuveen Investments and our stockholders, that it was advisable to, and in the best interest of, Nuveen Investments and our stockholders to enter into the merger agreement and to consummate the transactions contemplated thereby and recommended to our board of directors that it approve and declare advisable such transactions and agreements and that our board recommend to our stockholders the adoption of the merger agreement.

In the course of its deliberations, the special committee considered, among other things, the following substantive factors and potential benefits of the merger, which the special committee believed supported a decision to enter into the merger agreement and recommend the merger:

·       the offered merger consideration of $65.00 per share in cash represented a premium of approximately 20% over the closing price of our common stock on June 19, 2007, the trading day immediately preceding the announcement of the execution of the merger agreement, a premium of approximately 26% over the average closing price of our common stock for the ninety-day period

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end June 19, 2007, and a premium of approximately 16% over the all-time, intra-day high price of our common stock;

·       the opinions of Goldman Sachs and Sandler O’Neill that the $65.00 per share cash merger consideration to be received by our stockholders pursuant to the merger agreement was fair, from a financial point of view, to such stockholders;

·       the belief that, based in part on our historical and current financial performance, projections of our future financial performance prepared by our management, and Goldman Sachs’ and Sandler O’Neill’s analyses and fairness opinions, the merger consideration of $65.00 per share, in cash, would result in substantially greater current value to our stockholders than pursuing management’s current business plan or any other strategic alternatives considered;

·       the analyses supporting the fairness opinions of Goldman Sachs and Sandler O’Neill, which were based in part on the financial projections of our management, which led us to believe that a stock price with a net present value greater than Madison Dearborn’s offer of $65.00 per share was unlikely to be achieved within the next several years if we remained independent;

·       the ability of our stockholders to recognize significant cash value through the proceeds of the merger versus the continued risk of holding our common stock while we operate as a public company, taking into account the uncertainty of achieving management’s projections and the unpredictability of our operating results going forward;

·       as a public company, the market price of our common stock would be susceptible to adverse effects of earnings fluctuations that may result from changes in our operations, prospects and results, and changes in the asset management industry generally;

·       our historical and current financial performance and results of operations, our prospects and long-term strategy, our competitive position in the asset management industry, and the outlook for the asset management industry, including (1) uncertainties associated with our ability to continue to grow our closed-end fund business; (2) evolving competitive pressures in our retail separately managed accounts (SMA) business; (3) capacity constraints on certain of our value and international strategies that may limit our ability to grow assets under management; (4) the continuing need to invest back in our business resulting in lower margins than we have experienced historically; and (5) existing limitations on our overall scale and platform in the mutual fund business, which may impair our ability to compete and generate substantial growth in our mutual funds;

·       through the process directed by the special committee, there were extensive arm’s-length negotiations with Madison Dearborn, which, among other things, resulted in an increase in the offered merger consideration from a range of $58.00 to $59.00 per share to $65.00 per share;

·       the timing of the merger and the risk that if we did not accept Madison Dearborn’s offer at the time it was made, we might not have had another opportunity to do so, particularly if the markets for private and public debt and private equity fluctuated in a manner that made it more difficult to finance an acquisition of this magnitude;

·       based upon the analyses of Goldman Sachs concerning our business and prospects and the current conditions in the asset management industry generally, the belief that there are very few, if any, other potential buyers of our company that would have the ability or willingness to exceed Madison Dearborn’s proposed merger consideration;

·       the financing commitment letters reflect a strong commitment on the part of Madison Dearborn’s financial sponsors with few conditions that would permit them to terminate their commitments;

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·       the likelihood that the proposed merger would be completed in light of the financial capabilities and reputation of Madison Dearborn and its financial sponsors;

·       the special committee’s knowledge of the current state of our business, operations, assets, financial condition, results of operations and prospects; and

·       the terms and conditions set forth in the merger agreement, including:

·        our ability to confirm many of these conclusions and beliefs through our right to actively solicit superior proposals for the go-shop period of 30 days following the execution of the merger agreement, as well as the fact that Madison Dearborn would not have a contractual right under the merger agreement to match any superior proposals received during the go-shop period;

·        our right to provide information to and participate in negotiations with third parties who have submitted written indications of interest or unsolicited acquisition proposals that meet the requirements set forth in the merger agreement after the conclusion of the go-shop period, and our right to terminate the merger agreement to accept a superior proposal from any such third party;

·        the ability of our board of directors, under certain circumstances, to change its recommendation that our stockholders vote in favor of the adoption of the merger agreement;

·        the amount of the termination fee payable by us and the circumstances under which it is payable, including the fact that the $100 million termination fee (representing approximately 1.5% of the transaction value) payable if we accepted a superior proposal within a reasonable period of time from a party that submitted an indication of interest during the go-shop period was substantially lower than the $200 million fee (representing approximately 3% of the transaction value) otherwise payable, and the belief that the termination fee is reasonable and should not unduly discourage a third party from offering a proposal that is more favorable than Madison Dearborn’s proposal;

·        our right to seek damages of up to $400 million (less any termination fee previously paid) in the event of a breach by Parent or Merger Sub of their representations and warranties or obligations under the merger agreement;

·        in the event the closing does not occur due to Parent’s failure to obtain the requisite financing for the transaction, our remedy of a $200 million termination fee;

·        our right to continue to declare and pay a quarterly dividend of up to $0.24 per share during the third and fourth quarters of 2007 and the first quarter of 2008 (with record dates no earlier than September 4, 2007, December 3, 2007 and March 3, 2008, respectively), assuming the transaction does not close prior to the record date for such dividend; and

·        the several limited guarantees provided by Madison Dearborn and certain other equity investors and the respective representations, warranties and covenants of the parties.

Factors supporting the special committee’s recommendation and determination as to the procedural fairness of the merger upon the terms and subject to the conditions set forth in the merger agreement include, among others, the following:

·       the special committee is comprised solely of disinterested directors, and the special committee was authorized to direct, and did direct, with the assistance of independent legal and financial advisors, the negotiation of the terms of the merger agreement on behalf of our stockholders;

·       the special committee was an active participant in the negotiation process with Madison Dearborn, which involved formal and informal briefings with Katten Muchin Rosenman and Goldman Sachs concerning the status of the negotiations and material open issues with respect to the merger

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agreement, and the special committee asking questions of and providing guidance to Katten Muchin Rosenman and Goldman Sachs concerning the negotiations and the resolution of such open issues;

·       the merger agreement requires the adoption of the merger agreement by the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting;

·       after the conclusion of the go-shop period and subject to certain conditions, including the payment of a termination fee under certain circumstances, the merger agreement allows our board of directors or the special committee to exercise its fiduciary duties to consider potential alternative transactions, including if it believes that an unsolicited acquisition proposal it receives after the conclusion of the go-shop period would reasonably be expected to result in a superior proposal;

·       at the direction of the special committee, our senior management has not engaged in discussions or negotiations with Madison Dearborn concerning specific employment, compensation or equity agreements or arrangements, and Madison Dearborn agreed not to engage in any such discussions or negotiations during the go-shop period and thereafter to advise us of any such arrangements;

·       based upon the advice of financial and legal advisors, the special committee’s determination that the termination fee and expense reimbursement amounts under the merger agreement are reasonable compared to other similar public company merger transactions, and the special committee’s determination that such terms should not unreasonably deter another potential purchaser from considering a transaction with us at a price higher than the $65.00 per share merger consideration; and

·       stockholders who do not vote in favor of the merger proposal and who follow the other procedures of Section 262 of the DGCL will have the right to require an appraisal of their shares of our common stock, in which case they would have the fair value of their shares determined by the Delaware Court and would have the right to receive payment based on that valuation.

The special committee also considered a number of risks and other potentially negative factors concerning the merger, including, among others, the following:

·       our stockholders will have no ongoing equity participation in the surviving corporation following the merger, meaning that they will cease to participate in the company’s future earnings or growth, or to benefit from any increases in the value of the company’s common stock;

·       our stockholders, upon completion of the merger, will receive in exchange for their shares of our common stock (upon surrendering them) the merger consideration (subject to our stockholders’ right to pursue appraisal rights), and will not have the right thereafter to liquidate their shares of our common stock at a time and for a price of their choosing;

·       the potential disruption to our business that could result from the announcement and pendency of the merger, including the potential loss of key clients and employees;

·       the fact that certain members of our board of directors and senior management team have interests in the merger that are in addition to their interests as stockholders, which had the potential to influence their views and actions in connection with the merger proposal (see “—Interests of Our Directors and Executive Officers in the Merger”);

·       if the merger is not consummated for certain reasons, including the failure of our stockholders to vote for the adoption of the merger agreement, we may be required to reimburse Parent for its out-of-pocket fees and expenses incurred in connection with the transaction (up to a cap);

·       if the merger is not consummated for certain reasons, we may be required to pay a termination fee to Parent;

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·       if the merger is not consummated for any reason, we may lose key client relationships and employees and our business, financial condition and prospects may be materially adversely affected;

·       if the merger is not consummated for any reason, our senior management and board of directors will have (1) expended extensive efforts in negotiating the merger agreement and attempting to complete the transaction, (2) experienced significant distraction from their work during the pendency of the transaction, and (3) incurred substantial transaction costs that could have a negative impact on our operating results;

·       the fact that options to acquire shares of our common stock and restricted shares of our common stock granted under our 1996 Equity Incentive Award Plan will become fully vested upon the adoption of the merger agreement by our stockholders even if the merger is subsequently not consummated for any reason will mean that these awards will no longer provide the same level of retention incentives following adoption of the merger agreement by our stockholders;

·       Parent and Merger Sub are newly formed entities with no substantial assets, and (1) our recourse in the event of a breach by them of the merger agreement will be limited to monetary damages of no more than $400 million if either Parent or Merger Sub breaches any of their representations and warranties or obligations under the merger agreement, and (2) in the event the closing does not occur due to Parent’s failure to obtain the requisite financing for the transaction, our sole remedy will be the $200 million termination fee;

·       the merger is conditioned upon the consent of the stockholders of our public funds, as well as receipt of certain regulatory and other consents, which are beyond our control;

·       between the signing of the merger agreement and the consummation of the merger, we will not be able to take certain actions without the consent of Parent;

·       the merger agreement provides for a 25-day marketing period after all conditions to the merger are satisfied to enable Parent and Merger Sub to complete their financing, during which period we bear certain risks;

·       we did not undertake a full public auction prior to entering into the merger agreement, and some interested parties may not want to devote the time and resources to explore a transaction under the limitations imposed during the go-shop period; and

·       for U.S. income tax purposes, the merger will be a taxable transaction for our stockholders whose shares will be converted into the right to receive cash in the merger.

The foregoing discussion summarizes the material factors considered by the special committee in its consideration of the merger. In view of the wide variety of factors considered by the special committee, and the complexity of these matters, the special committee did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual members of the special committee may have assigned different weights to various factors. The special committee considered the merger agreement and the merger based upon the totality of the information presented to and considered by it.

After considering these and other factors, the special committee concluded that the positive factors relating to the merger agreement and the merger outweigh the potential negative factors and approved and recommended the merger agreement and the merger to our board of directors based upon the totality of the information presented to and considered by it.

Board of Directors

Our board of directors established the special committee and empowered it to review, evaluate, negotiate and, if appropriate, make a recommendation to our board of directors with respect to the

37




proposals received from Madison Dearborn and any other potential acquiror. Our board of directors, acting upon the unanimous recommendation of the special committee, unanimously determined that the merger agreement and the transactions contemplated thereby were advisable to and in the best interest of the company and our stockholders, approved the merger agreement and the transactions contemplated thereby and is recommending to our stockholders that they vote for the adoption of the merger agreement.

In connection with its determination, our board of directors considered:

·       the determination and recommendation of the special committee and adopted such determination and recommendation in reaching its determination;

·       the factors considered by the special committee, including the positive factors and potential benefits of the merger and the risks and other potentially negative factors concerning the merger, as described above;

·       the terms of the merger agreement resulted from arm’s-length negotiations between the special committee and Madison Dearborn, including the increase in the offered merger consideration from a range of $58.00 to $59.00 per share to $65.00 per share;

·       the financial analyses presented by Goldman Sachs and Sandler O’Neill to the special committee, as well as our board of directors at the request of the special committee, and the opinions of Goldman Sachs and Sandler O’Neill rendered to the special committee and our board of directors, to the effect that, as of the date of such opinions and based upon and subject to the factors, assumptions, limitations and other considerations described in their written opinions, the merger consideration to be received by the holders of our common stock in the merger was fair, from a financial point of view, to such holders; and

·       its belief that the merger was more favorable to stockholders than the potential value from remaining public or that might result from other alternatives potentially available to us, in each case given the potential rewards, risks and uncertainties associated with those alternatives.

The foregoing discussion summarizes the material factors considered by our board of directors in its consideration of the merger. In view of the wide variety of factors considered by our board of directors, and the complexity of these matters, our board of directors did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual members of our board of directors may have assigned different weights to various factors. Our board of directors considered the merger agreement and the merger based upon the totality of the information presented to and considered by it.

Opinion of Goldman, Sachs & Co.

Goldman Sachs rendered its oral opinion, which was subsequently confirmed in writing, to the special committee and our board of directors, that, as of June 19, 2007, and based upon and subject to the factors and assumptions set forth therein, the $65.00 per share in cash to be received by the holders of our common stock (other than shares held by our affiliates who have an understanding, arrangement or other agreement with Parent or its affiliates (the “Excluded Shares”)) pursuant to the merger agreement was fair, from a financial point of view as of the date of such opinion, to such holders of common stock.

The full text of the written opinion of Goldman Sachs, dated June 19, 2007, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is included as Appendix B to this proxy statement. Goldman Sachs provided its opinion for the information and assistance of the special committee and our board of directors in connection with their consideration of the transaction contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to how any holder of Nuveen Investments common stock should vote with respect to the merger.

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In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

·       the merger agreement;

·       annual reports to stockholders and Annual Reports on Form 10-K of Nuveen Investments for the five fiscal years ended December 31, 2006;

·       certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Nuveen Investments;

·       certain other communications from Nuveen Investments to its stockholders; and

·       certain internal financial analyses and forecasts for Nuveen Investments prepared by our management.

Goldman Sachs also held discussions with members of our senior management regarding the past and current business operations, financial condition and future prospects of Nuveen Investments. In addition, Goldman Sachs reviewed the reported price and trading activity for our common stock, compared certain financial and stock market information for Nuveen Investments with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the asset management industry specifically and in other industries generally and performed such other studies and analyses, and considered such other factors, as it considered appropriate.

For purposes of rendering its opinion, Goldman Sachs relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, accounting, legal, tax and other information provided to, discussed with or reviewed by it. In that regard, Goldman Sachs assumed, with our consent, that the internal financial analyses and the forecasts for Nuveen Investments prepared by our management had been reasonably prepared on a basis reflecting the best currently available estimates and judgment of our management. In addition, Goldman Sachs did not make an independent evaluation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of Nuveen Investments or any of our subsidiaries or of the investment vehicles managed by us, nor was any evaluation or appraisal of the assets or liabilities of Nuveen Investments or any of our subsidiaries or of the investment vehicles managed by us furnished to Goldman Sachs. Goldman Sachs is not expressing any opinions to the impact of the transactions contemplated by the merger agreement on the solvency or viability of Nuveen Investments or Parent or the ability of Nuveen Investments or Parent to pay its obligations when they come due.

The Goldman Sachs opinion does not address our underlying business decision to engage in the transaction contemplated by the merger agreement or the relative merits of the merger as compared to any strategic alternative that may be available to us. Goldman Sachs was not requested to solicit, and did not solicit, in each case prior to the date of the merger agreement, interest from other parties with respect to an acquisition of or other business combination with Nuveen Investments or any other alternative transaction, but was authorized, and requested in accordance with the merger agreement to solicit such indications of interest for a prescribed period following the execution of the merger agreement, subject to the terms, conditions and procedures set forth therein. The Goldman Sachs opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to it as of, the date of its opinion. Goldman Sachs’ advisory services and its opinion are provided for the information and assistance of our board of directors and the special committee in connection with their consideration of the merger and such opinion does not constitute a recommendation as to how any holder of shares of our common stock should vote with respect to the merger or any other matter.

The following is a summary of the material financial analyses presented by Goldman Sachs to the special committee and our board of directors in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the analyses performed by Goldman Sachs, nor does the order of analyses described represent the relative importance or the weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include

39




information presented in tabular format. The tables must be read together with the full text of each summary and alone are not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 18, 2007, and is not necessarily indicative of current market conditions.

Historical Stock Trading Analysis.   Goldman Sachs reviewed the historical trading prices of our common stock for the period beginning on June 18, 2002 and ending on June 18, 2007, the last public trading date prior to our public announcement of the transactions contemplated by the merger agreement. In addition, Goldman Sachs analyzed the merger consideration of $65.00 per share to be received by holders of our common stock pursuant to the merger agreement in relation to the closing prices of our common stock on March 29, 2007, the day that Parent delivered its initial offer of $58.00 - $59.00 per share to us, June 18, 2007, the latest available closing market price, the average market price over the 30-day and 12-month periods ending on June 18, 2007 and the all time high market price. The results of these calculations are summarized below:

 

 

Premium of Merger Consideration of $65.00

per Share to Historical Share Price

 

All Time High

 

 

16.6%

 

 

Last Close (06/18/07)

 

 

19.8%

 

 

Last Close (03/29/07)

 

 

38.2%

 

 

30-Day Average

 

 

20.0%

 

 

12-Month Average

 

 

31.0%

 

 

 

Trading Statistics for Selected Public Asset Managers Analysis.   Goldman Sachs reviewed and compared certain financial information, ratios and public market multiples for Nuveen Investments to corresponding financial information, ratios and public market multiples for the following publicly traded companies in the asset management industry:

·   Franklin Resources, Inc.

·        Alliance Bernstein Holding L.P.

·        BlackRock, Inc.

·        T. Rowe Price Group, Inc.

·        Legg Mason, Inc.

·        AMVESCAP PLC

·        Eaton Vance Corp.

·        Janus Capital Group, Inc.

·        Affiliated Managers Group, Inc.

·        Federated Investors, Inc.

·        Calamos Asset Management, Inc.

·        Waddell & Reed Financial, Inc.

·        Cohen & Steers, Inc.

Although none of the selected companies is directly comparable to Nuveen Investments, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain of our operations.

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Goldman Sachs calculated and compared various financial information, ratios and public market multiples based on the latest publicly available financial data and closing stock price for Nuveen Investments as of June 18, 2007, as well as information obtained from SEC filings and research estimates from the Institutional Brokerage Estimate System (“IBES”). The multiples and ratios for each of the selected companies were based on the closing stock prices as of June 18, 2007, as well as information obtained from SEC filings, data from SNL Financial and research estimates from IBES.

Goldman Sachs calculated the selected companies’ ratios of current stock price / estimated calendar years 2007 and 2008 earnings per share and compared those calculations to our results based on our current market price and the proposed transaction price. The following table presents the results of this analysis:

 

 

 

 

 

 

Nuveen Investments

 

Ratio

 

 

 

Range

 

Median

 

Current Price

 

Transaction Price

 

Price / 2007E Earnings per Share

 

15.8x - 30.1x

 

 

19.4x

 

 

 

20.5x

 

 

 

24.5x

 

 

Price / 2008E Earnings per Share

 

14.1x - 23.8x

 

 

16.8x

 

 

 

17.4x

 

 

 

20.9x

 

 


*                    Price/Earnings ratios based on median IBES earnings estimates for calendar year. Market data as of June 18, 2007.

Goldman Sachs also calculated and compared the ratio of levered market cap, calculated as equity value plus net debt, to each of most recent assets under management (“AUM”), last quarter annualized (“LQA”) revenue and last quarter annualized earnings before interest, taxes, depreciation and amortization (“EBITDA”). The following table presents the results of this analysis:

 

 

 

 

 

 

Nuveen Investments

 

Ratio

 

 

 

Range

 

Median

 

Current Price

 

Transaction Price

 

Levered Market Cap / AUM

 

1.4% - 6.8%

 

 

3.2%

 

 

 

3.2%

 

 

 

3.8%

 

 

Levered Market Cap / LQA Revenue

 

3.0x - 7.1x

 

 

4.8x

 

 

 

6.6x

 

 

 

7.9x

 

 

Levered Market Cap / LQA EBITDA

 

10.6x - 19.2x

 

 

13.7x

 

 

 

13.8x

 

 

 

16.5x

 

 


*                    All figures based on data from publicly available filings and SNL Financial. Market data as of June 18, 2007.

Analysis of Selected Precedent Mergers and Acquisition Transactions.   Goldman Sachs analyzed certain publicly available information for eleven acquisitions in the asset management business in the U.S. that were announced and consummated during the period from May, 2000 to February, 2007. These transactions (listed by acquirer/target and month and year announced) included:

·       Putnam Investments/Great-West (February 2007)

·       WM Advisors/Principal (July 2006)

·       ML Asset Management/BlackRock (February 2006)

·       Citigroup/Legg Mason (June 2006)

·       State Street Research/BlackRock (August 2004)

·       Neuberger Berman/Lehman Brothers (July 2003)

·       Bernstein/Alliance (June 2000)

·       United Asset Management/Old Mutual (June 2000)

·       Nvest/CDC (June 2000)

·       Pioneer/UniCredito (May 2000)

·       Trimark/AMVESCAP (May 2000)

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Although none of the companies participating in the selected transactions are directly comparable to Nuveen Investments, the companies participating in the selected transactions were publicly traded companies with operations that, for purposes of this analysis, may be considered similar in certain respects to certain of our operations. The comparison was made using public filings, public investor presentations and press releases.

For each of the precedent transactions, Goldman Sachs calculated and compared, among other things, the ratio of the estimated transaction value to the: (1) target company’s last twelve months EBITDA (“LTM EBITDA”); (2) target company’s last twelve months revenue (“LTM Revenue”); and (3) percentage of the target company’s AUM.

The following table sets forth the results of this analysis:

Ratio

 

 

 

Range

 

Mean

 

Median

 

Nuveen

Investments/Parent

Transaction

 

Transaction Value / LTM EBITDA

 

7.3x - 18.5x

 

11.8x

 

 

12.3x

 

 

 

18.0x(1)

 

 

Transaction Value / LTM Revenue

 

1.9x - 5.7x

 

3.7x

 

 

3.7x

 

 

 

8.4x

 

 

Transaction Value / AUM

 

0.8% - 10.6%

 

3.2%

 

 

2.0%

 

 

 

3.8%

 

 


(1)          Nuveen Investments’ LTM EBITDA excludes Other Income / (Expense). Other Income / (Expense) includes gains and losses on investments and miscellaneous income, including gain or loss on the disposal of assets.

Illustrative Discounted Cash Flows Analysis.   Goldman Sachs performed an illustrative discounted cash flow analysis (“DCF”) to determine the implied present value of our common stock. Goldman Sachs used discount rates ranging from 11% to 13%, reflecting estimates of the weighted average cost of capital of Nuveen Investments and illustrative terminal EBITDA multiples ranging from 11x to 15x based on estimated 2011 EBITDA multiples for Nuveen Investments. For purposes of this analysis, Goldman Sachs used a range of discount rates derived by utilizing a weighted average cost of capital analysis based on certain financial metrics for Nuveen Investments and selected companies that exhibited similar business characteristics to Nuveen Investments. To conduct this analysis, Goldman Sachs used two sets of projections based on, respectively, (1) projections of our management (“Management Projections”) and (2) analyst median estimates (“Analyst Median Projections”).

The Management Projections for the period 2007-2010 were based on projections provided by our management. For purposes of such analysis, projections for 2011 were calculated by Goldman Sachs assuming revenue growth to be equal to projected revenue growth for 2010 (10.4%) and margins to remain at 2010 levels. In addition, Goldman Sachs assumed: (1) capital expenditures to be equal to depreciation and amortization; (2) net working capital to stay constant at 5% of revenues; and (3) a constant share count. Projections for cash LLC incentive payments made by Nuveen Investments in connection with acquisitions in the ordinary course of business were provided by our management. This analysis resulted in a range of implied present values of $45.15 to $65.84 per share of our common stock.

The Analyst Median Projections for the period 2007-2010 were based on analyst median estimates. Earnings per share (“EPS”) for the period 2009-2011 were grown at median IBES long-term EPS growth rate of 12%. For purposes of such analysis, Goldman Sachs assumed: (1) capital expenditures to be equal to depreciation and amortization; (2) net working capital to stay constant at 5% of revenues; and (3) a constant share count. Net income was calculated based on projections for EPS and the number of average diluted shares outstanding. Earnings before interest and taxes was calculated using an assumed tax rate of 39% and our management’s projected net interest expense. Projections for cash LLC incentive payments made by Nuveen Investments in connection with acquisitions in the ordinary course of business were provided by our management. This analysis resulted in a range of implied present value of $49.17 to $71.47 per share of our common stock.

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This compares to the merger consideration for our common stock of $65.00 per share in cash consideration to be received by the holders of our common stock pursuant to the merger agreement.

Illustrative Future Price at Current EPS Multiples Analysis.   Goldman Sachs performed an illustrative analysis of the implied present value of the future price of our common stock, which is designed to provide an indication of the present value of a theoretical value of our equity based on estimated future EPS and assumed price to earnings per share multiples. This analysis calculates our current 1-year forward and 2-year forward EPS multiples based on (1) our management’s EPS estimates and (2) analyst median EPS estimates, for 2007 and 2008, respectively. These 1-year forward and 2-year forward share price to EPS multiples, which are assumed to remain constant in future periods, are applied to the projected 1-year forward and 2-year forward EPS estimates to derive implied share prices for the next three years. The implied share prices for each of the next three years are equal to the cumulative dividends per share plus the average of (1) the share price implied by the 1-year forward multiple applied to the 1-year forward EPS estimate and (2) the share price implied by the 2-year forward multiple applied to the 2-year forward EPS estimate. For the purposes of this analysis, the annual dividend per share was assumed to be equal to $0.96, which is equal to our last quarterly dividend per share of $0.24 on an annualized basis. In addition, our management’s EPS estimate for 2011, and analyst EPS estimates for 2010 and 2011, assumed annual EPS growth equal to the IBES projected long-term growth rate of 12.0%. The results of these calculations are summarized below:

 

 

Present Value of Implied Future Share Price (12% Discount Rate)*

 

 

 

1 Year

 

2 Years

 

3 Years

 

Management Forecast

 

$

55.00

 

$

55.60

 

$

56.33

 

Analyst Median Estimate

 

58.64

 

60.66

 

61.10

 


*                    Assumes discount rate is equal to Nuveen Investments’ approximate weighted average cost of capital.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above without considering the analyses as a whole could create an incomplete view of the processes underlying the Goldman Sachs opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Nuveen Investments or the contemplated transaction.

Goldman Sachs prepared these analyses for purposes of providing its opinion to the special committee and our board of directors as to the fairness, from a financial point of view, to the holders of the outstanding shares of our common stock (other than holders of Excluded Shares) of the $65.00 per share in cash to be received by such holders pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Nuveen Investments, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The merger consideration was determined through arm’s-length negotiations between us and Parent and was approved by our board of directors. Goldman Sachs provided advice to the special committee during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to the special committee or that any specific amount of consideration constituted the only appropriate consideration for the merger.

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As described above, the Goldman Sachs opinion to the special committee and our board of directors was one of many factors taken into consideration by the special committee and our board of directors in making their determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Appendix B to this proxy statement.

Goldman Sachs and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well as for estate, corporate and other purposes. Goldman Sachs has acted as financial advisor to the special committee in connection with, and has participated in certain of the negotiations leading to, the transactions contemplated by the merger agreement. In addition, Goldman Sachs has provided certain investment banking and other financial services to Nuveen Investments from time to time, including having acted as a co-manager with respect to the secondary offering of our shares of common stock by The St. Paul Travelers Companies, Inc. in April 2005 and as a co-manager with respect to the offering by Nuveen Investments of its 5.00% 10-year Senior Notes and its 5.50% 15-year Senior Notes (aggregate principal amounts $250,000,000 and $300,000,000, respectively) in September 2005.

Goldman Sachs has also provided and is currently providing certain investment banking and other financial services to Madison Dearborn, an affiliate of Parent, and its affiliates and portfolio companies, including having acted as financial advisor to Boise Cascade LLC, a portfolio company of Madison Dearborn, in connection with its sale of approximately 2.2 million acres of timberlands to Forest Capital Partners LLC in February 2005; as lead manager with respect to the offering of 15,500,000 shares of common stock of Packaging Corporation of America, a portfolio company of Madison Dearborn, in December 2005; as co-manager with respect to the offering by Intelsat Limited, a portfolio company of Madison Dearborn, of its 9.25% Senior Notes due 2016, its LIBOR plus 600 basis points Floating Rate Notes due 2013 and its 11.25% Senior Notes due 2016 (aggregate principal amounts $750,000,000, $260,000,000 and $1,330,000,000, respectively) in June 2006; and as financial advisor to Madison River Capital LLC, a former portfolio company of Madison Dearborn, in connection with its sale to CenturyTel Inc. in May 2007.

Goldman Sachs has also provided and is currently providing certain investment banking and other financial services to Merrill Lynch & Company, Inc. (“Merrill Lynch”), an affiliate of Parent, and its affiliates and portfolio companies, including having acted as co-manager with respect to the offering by Spirit Group, a portfolio company of Merrill Lynch, of its 4.375% Euro denominated 10-year bonds (aggregate principal amount 750,000,000) in November 2004; as co-manager with respect to the offering by The Hertz Corporation (“Hertz”), a portfolio company of Merrill Lynch, of its 8.875% Senior Notes due 2014, its 10.50% Senior Subordinated Notes due 2016 and its 7.785% Senior Notes due 2014 (aggregate principal amounts of $1,800,000,000, $600,000,000 and 225,000,000, respectively) in November 2005; as co-manager and lender with respect to the term facilities and asset backed securitization facilities of Hertz in November 2005; as a lender in connection with a bridge loan extended to Hertz (aggregate principal amount of $1,000,000,000) in June 2006; as co-manager with respect to the offering by HCA Inc., a portfolio company of Merrill Lynch, of its 9.125% Senior Secured Second Lien Notes due 2014, its 9.25% Senior Secured Second Lien Notes due 2016 and its Senior Secured Second Lien Toggle Notes due 2016 (aggregate principal amounts of $1,000,000,000, $3,200,000,000 and $1,500,000,000, respectively) in November 2006; as co-manager with respect to the public offering of 88,235,000 shares of common stock of Hertz in November 2006; and as co-manager with respect to the public offering of 51,750,000 shares of common stock of Hertz in June 2007.

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Goldman Sachs has also provided and is currently providing certain investment banking and other financial services to Wachovia Corporation (“Wachovia”), an affiliate of Parent, and its affiliates and portfolio companies, including having acted as co-lead manager with respect to the offering by Wachovia of its 5.80% Wachovia Income Trust Securities (aggregate principal amount $2,500,000,000) in February 2006 and as a financial advisor in connection with Wachovia’s acquisition of Westcorp and all of the outstanding shares of WFS Financial Inc. not owned by Westcorp in March 2006.

Goldman Sachs has also provided certain investment banking and other financial services to Deutsche Bank AG (“Deutsche Bank”), an affiliate of Parent, and its affiliates and portfolio companies from time to time.

Goldman Sachs may also provide investment banking and other financial services to Nuveen Investments, Parent, Madison Dearborn, Merrill Lynch, Wachovia and Deutsche Bank and their respective affiliates and portfolio companies in the future. In connection with the above-described investment banking and other financial services, Goldman Sachs has received, and may receive, compensation.

Goldman Sachs is a full service securities firm engaged, either directly or through its affiliates, in securities trading, investment management, financial planning and benefits counseling, risk management, hedging, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, Goldman Sachs and its affiliates may provide such services to Nuveen Investments, Parent, Madison Dearborn, Merrill Lynch, Wachovia and Deutsche Bank and their respective affiliates and portfolio companies, may actively trade the debt and equity securities (or related derivative securities) of Nuveen Investments, Parent, Merrill Lynch, Wachovia, Deutsche Bank, and their respective affiliates, and portfolio companies of Madison Dearborn, Merrill Lynch, Wachovia and Deutsche Bank, for their own account and for the accounts of their customers and may at any time hold long and short positions of such securities. Affiliates of Goldman Sachs have co-invested with Madison Dearborn, Merrill Lynch, Wachovia and Deutsche Bank and their respective affiliates and such affiliates of Goldman Sachs may have invested in and may invest in the future in limited partnership units of affiliates of Madison Dearborn, Merrill Lynch, Wachovia and Deutsche Bank. Goldman Sachs also engages in the asset management business and competes with the business of Nuveen Investments.

The special committee selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement, dated May 15, 2007, the special committee engaged Goldman Sachs to act as its financial advisor in connection with our consideration of various financial alternatives available to us. Pursuant to the terms of this engagement letter, we have agreed to pay Goldman Sachs a transaction fee equal to approximately $29 million, $28 million of which is contingent upon the consummation of the transactions contemplated by the merger agreement. Half of the remaining $1 million was payable to Goldman Sachs within five business days of execution of the letter agreement and the other half was payable on July 1, 2007. In addition, we have agreed to reimburse Goldman Sachs periodically for its legal and other expenses incurred in connection with the transaction contemplated by the merger agreement and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Opinion of Sandler O’Neill & Partners, L.P.

By letter dated June 16, 2007, the special committee and our board of directors retained Sandler O’Neill to deliver a fairness opinion in connection with the merger. Sandler O’Neill is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O’Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

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Sandler O’Neill delivered a fairness opinion to the special committee and our board of directors in connection with the proposed merger. At the June 19, 2007 meetings of the special committee and our board of directors during which each of them considered and approved the merger agreement and the merger, Sandler O’Neill delivered to the special committee and, at the request of the special committee, to our board of directors, its oral opinion. Subsequently, Sandler O’Neill confirmed in writing that, as of such date, the merger consideration was fair to our stockholders from a financial point of view. The full text of Sandler O’Neill’s opinion is attached as Appendix C to this proxy statement. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the opinion. We urge stockholders to read the entire opinion carefully in connection with their consideration of the merger.

Sandler O’Neill’s opinion speaks only as of the date of the opinion. The opinion was directed to the special committee and our board of directors and is directed only to the fairness of the merger consideration to our stockholders from a financial point of view. It does not address our underlying business decision to engage in the merger or any other aspect of the merger and is not a recommendation to any holder of our common stock as to how such stockholder should vote at the special meeting with respect to the merger agreement, the merger or any other matter.

In connection with rendering its June 19, 2007 opinion, Sandler O’Neill reviewed and considered, among other things:

(1)         the merger agreement;

(2)         certain publicly available financial statements and other historical financial information of the company that it deemed relevant;

(3)         internal financial projections for the company for the years ending December 31, 2007 through December 31, 2010, as provided by and reviewed with our senior management;

(4)         certain audited financial statements and other historical financial information of Parent as provided by Parent that it deemed relevant in determining Parent’s ability to undertake the merger;

(5)         the publicly reported historical price and trading activity for our common stock, including a comparison of certain financial and stock market information for Nuveen Investments and similar publicly available information for certain other companies the securities of which are publicly traded;

(6)         the financial terms of certain recent business combinations in the asset management industry, to the extent publicly available;

(7)         the current market environment generally and the asset management environment in particular; and

(8)         such other information, financial studies, analyses and investigations and financial, economic and market criteria as Sandler O’Neill considered relevant.

Sandler O’Neill also discussed with certain members of our senior management our business, financial condition, results of operations and prospects.

In performing its reviews and analyses and in rendering its opinion, Sandler O’Neill relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources and that was provided by the company, Parent or their respective representatives, or that was otherwise reviewed by Sandler O’Neill and assumed such accuracy and completeness for purposes of rendering the opinion. Sandler O’Neill further relied on the assurances of our management and Parent

46




that they were not aware of any facts or circumstances that would make any of the information provided by us inaccurate or misleading. Sandler O’Neill has not been asked to undertake, and has not undertaken, an independent verification of any of such information and Sandler O’Neill does not assume any responsibility or liability for the accuracy or completeness thereof. Sandler O’Neill did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of the company, Parent or any of their subsidiaries, or the collectibility of any such assets, nor has Sandler O’Neill been furnished with any such evaluations or appraisals.

Sandler O’Neill’s opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. Sandler O’Neill assumed, in all respects material to its analysis, that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the merger agreement are not waived. Sandler O’Neill also assumed that there has been no material change in the company’s or Parent’s assets, financial condition, results of operations, business or prospects since the date of the last financial statements made available to them and that we will remain as a going concern for all periods relevant to its analyses. Finally, Sandler O’Neill expressed no opinion as to all legal, accounting and tax matters relating to the merger agreement and the other transactions contemplated by the merger agreement.

In rendering its June 19, 2007 opinion, Sandler O’Neill performed a variety of financial analyses. The following is a summary of the material analyses performed by Sandler O’Neill, but is not a complete description of all the analyses underlying Sandler O’Neill’s opinion. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to Nuveen Investments and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of Nuveen Investments and the companies to which it is being compared.

The internal financial projections of the company provided by our senior management used and relied upon by Sandler O’Neill in its analyses were reviewed with our senior management who confirmed to Sandler O’Neill that those financial projections reflected the best currently available estimates and judgments of such management of our future financial performance. With respect to the financial projections used in its analyses, Sandler O’Neill assumed that the financial performance reflected in those financial projections would be achieved. Sandler O’Neill expressed no opinion as to such financial projections or the assumptions on which they were based. These financial projections, as well as the other estimates used by Sandler O’Neill in its analyses, were based on numerous variables and assumptions which are inherently uncertain and, accordingly, actual results could vary materially from those set forth in such financial projections.

In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of the company and Sandler O’Neill. The analyses performed by

47




Sandler O’Neill are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the special committee and, at the request of the special committee, our board of directors, at the special committee’s and our board of director’s meetings on June 19, 2007. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of our common stock or the price at which our common stock may be sold at any time.

Summary of the Merger.   Sandler O’Neill reviewed the financial terms of the merger agreement. Using the $65.00 cash price for each share of our common stock and based upon per-share financial information for the company for the twelve months ended March 31, 2007 and share trading data as of June 15, 2007, Sandler O’Neill calculated the following ratios:

Transaction Ratios

 

 

 

 

 

Deal Price per Share

 

$

65.00

 

Aggregate Deal Value (mm)(1)

 

$

5,767

 

Premium Stock Price on June 15, 2007

 

19.1%

 

Premium to 30 Day Trailing Average Stock Price

 

22.6%

 

Premium to Date of Initial Offer(2)

 

38.2%

 

Premium to Last Twelve Months Average Stock Price

 

29.4%

 

Premium to 52-Week High Stock Price

 

15.7%

 

Premium to All-Time High Stock Price

 

15.7%

 

Equity Value Multiples(3):

 

 

 

 

 

 

Price/Last Twelve Months Earnings Per Share

 

27.7x

 

Price/2007 Management Earnings Per Share

 

24.8x

 

Price/2007 Analyst Earnings Per Share

 

24.5x

 

Price/2008 Management Earnings Per Share

 

22.6x

 

Price/2008 Analyst Earnings Per Share

 

20.8x

 

Enterprise Value Multiples(4):

 

 

 

 

 

 

Assets under Management

 

3.79%

 

Last Twelve Months Revenue

 

8.6x

 

Last Twelve Months EBITDA

 

16.3x

 


(1)          Aggregate consideration calculated using 88.722 million fully diluted shares as of June 4, 2007. Fully diluted share count includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.020 million restricted stock units outstanding.

(2)          Based on the company’s stock price of $47.02 as of March 29, 2007, the day Parent delivered its initial offer of $58.00-$59.00 per share.

(3)          Analyst earnings per share based on median I/B/E/S estimates; Management Earnings Per Share based on average diluted shares of 83.370 million as of March 31, 2007.

(4)          Enterprise value includes equity of $5,767 million, debt of $595 million, minority interest of $41 million, less cash and cash equivalents of $107 million.

Financial data as of March 31, 2007; Market data as of June 15, 2007.

Source: Bloomberg, Company Filings and Reports, SNL Financial

48




For purposes of Sandler O’Neill’s analyses, our earnings per share were based on fully diluted earnings per share. The aggregate transaction value was approximately $5,767 million, based upon 79,786,233 basic shares of our common stock outstanding, 450,208 restricted shares, 19,874 restricted stock units and including the intrinsic value of options to purchase 15,077,667 shares of our common stock at a weighted average strike price of $28.5009.

Comparable Company Analysis.   Sandler O’Neill used publicly available information to compare selected financial and market trading information for Nuveen Investments with the following group of asset management companies selected by Sandler O’Neill:

Affiliated Managers Group

 

Fortress Investment Group

AllianceBernstein

 

Franklin Resources

Amvescap

 

GAMCO Investors

BlackRock(1)

 

Janus Capital Group

Calamos Asset Management

 

Legg Mason

Cohen & Steers

 

T. Rowe Price Group

Eaton Vance

 

Waddell & Reed Financial

Federated Investors

 

W.P. Stewart & Co.


(1)          Pro Forma EBITDA for acquisition of Merrill Lynch Investment Managers.

The analysis compared the publicly available financial and market trading information for Nuveen Investments and the peer group as of and for the twelve-month period ended March 31, 2007, with pricing data as of June 15, 2007. The data are summarized in the table below.

 

 

 

Comparable Group Analysis

 

 

 

Nuveen
Investments
Current 
Price
(3)

 

Nuveen
Investments
Offer Price
(3)

 

Peer Group
Median

 

Price/52 Week High Closing Price (%)

 

 

97.1

 

 

 

116.6

 

 

 

94.1

 

 

Price/GAAP 2007 Earnings Per Share(1)

 

 

20.6

 

 

 

24.5

 

 

 

19.2

 

 

Price/GAAP 2008 Earnings Per Share(1)

 

 

17.5

 

 

 

20.8

 

 

 

17.0

 

 

2007 PEG Ratio(2)

 

 

1.6

 

 

 

1.9

 

 

 

1.5

 

 

Enterprise Value/Last Twelve Months EBITDA

 

 

13.2

 

 

 

16.3

 

 

 

13.4

 

 

Enterprise Value/Last Twelve Months Revenue

 

 

6.9

 

 

 

8.6

 

 

 

5.3

 

 

Enterprise Value/AUM (%)

 

 

3.1

 

 

 

3.8

 

 

 

3.9

 

 


(1)          2007 and 2008 EPS based on median I/B/E/S analyst estimates.

(2)          Represents Price/GAAP 2007 Earnings Per Share as a multiple of median I/B/E/S analyst long term growth rates.

(3)          Enterprise value includes equity of $5,767 million, debt of $595 million, minority interest of $41 million, less cash and cash equivalents of $107 million.

Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Filings and Reports, SNL Financial

 

49




Analysis of Selected Merger Transactions.   Sandler O’Neill reviewed 30 merger transactions announced from January 1, 2000 through June 15, 2007 involving asset management companies. Sandler O’Neill reviewed the following high, low, mean and median multiples related to those selected merger transactions: transaction price at announcement to 30 day prior market price, transaction value to last twelve months’ net income, transaction value to last twelve months revenue, transaction value to last twelve months EBITDA and transaction value to assets under management. As illustrated in the following table, Sandler O’Neill derived imputed ranges of values per share for our common stock of $36.15 to $65.74 based upon the median multiples for the asset management companies.

Comparable Transaction Multiples

 

 

 

Median
Group
Multiple

 

Median
Implied
Value

 

Last Twelve Months Revenue (1) (2)

 

 

5.1

x

 

$

36.15

 

Last Twelve Months EBITDA (1) (2)

 

 

11.1

x

 

$

42.26

 

Last Twelve Months EPS

 

 

24.0

x

 

$

56.40

 

Premium to 30 Day Prior Market

 

 

24.0

%

 

$

65.74

 

MRQ AUM (1) (2)

 

 

2.3

%

 

$

36.24

 


(1)          For Median Imputed Value, equity value derived from enterprise value by adjusting for debt of $595 million, minority interest of $41 million, and adding cash and cash equivalents of $107 million outstanding.

(2)          For Median Imputed Value, imputed per share values based on Nuveen Investments’ fully diluted share count as of June 4, 2007, which includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.020 million restricted stock units outstanding.

Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Filings and Reports, SNL Financial

Discounted Cash Flow of the Company and Terminal Value Analysis.   Sandler O’Neill performed an analysis that estimated the future streams of cash flow of the company through December 31, 2010 under various circumstances. The analysis assumed our projected cash flow streams assuming we performed in accordance with the financial projections for 2007 through 2010 as provided by our management. To approximate the terminal value of our common stock at December 31, 2010, Sandler O’Neill applied price to current year EBITDA multiples of 11.0x to 15.0x. The cash flow streams and terminal values were then discounted to present values using different discount rates ranging from 10.0% to 14.0%. These discount rates were chosen by Sandler O’Neill to reflect different assumptions regarding the required rates of return of holders or prospective buyers of our common stock. Then, a range was applied to the budgeted EBITDA of 15% under budget to 15% over budget, using a terminal EBITDA multiple of 13.0x and a discount rate of 11.8% for each respective tabular analysis. As illustrated in the following tables, this analysis indicated an imputed range of values per share for our common stock of $44.16 to $67.69 when applying the terminal EBITDA multiples and discount rates to the matched budget, $39.46 to $74.37 when applying the terminal EBITDA multiples to the -15% to +15% budget range, and $43.09 to $68.84 when applying the discount rates to the -15% to +15% budget range.

50




Present Value Per Share—Based on Terminal EBITDA Multiples

Discount
Rate

 

11.0x

 

12.0x

 

13.0x

 

14.0x

 

15.0x

 

10.0

%

$

50.41

 

54.73

 

59.05

 

63.37

 

67.69

 

11.0

 

48.75

 

52.94

 

57.12

 

61.31

 

65.49

 

12.0

 

47.16

 

51.22

 

55.27

 

59.33

 

63.38

 

13.0

 

45.63

 

49.56

 

53.49

 

57.43

 

61.36

 

14.0

 

44.16

 

47.97

 

51.78

 

55.60

 

59.41

 

 

Note:

Imputed per share values based on Nuveen Investments’ fully diluted share count as of June 4, 2007, which includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.020 million restricted stock units outstanding.

Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Reports and Management, SNL Financial

Present Value Per Share—Based on Terminal EBITDA Multiples

EBITDA
Variance

 

11.0x

 

12.0x

 

13.0x

 

14.0x

 

15.0x

 

(15.0

)%

$

39.46

 

42.94

 

46.41

 

49.88

 

53.35

 

(10.0

)

42.15

 

45.83

 

49.50

 

53.18

 

56.86

 

(5.0

)

44.84

 

48.72

 

52.60

 

56.48

 

60.36

 

0.0

 

47.52

 

51.61

 

55.69

 

59.78

 

63.86

 

5.0

 

50.21

 

54.50

 

58.79

 

63.08

 

67.37

 

10.0

 

52.90

 

57.39

 

61.88

 

66.38

 

70.87

 

15.0

 

55.58

 

60.28

 

64.98

 

69.67

 

74.37

 

 

Note:

Imputed per share values based on Nuveen Investments’ fully diluted share count as of June 4, 2007, which includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.020 million restricted stock units outstanding.

Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Reports and Management, SNL Financial

Present Value Per Share—Based on Discount Rate

EBITDA
Variance

 

10.0%

 

11.0%

 

12.0%

 

13.0%

 

14.0%

 

(15.0

)%

$49.26

 

47.62

 

46.05

 

44.54

 

43.09

 

(10.0

)

52.52

 

50.79

 

49.13

 

47.52

 

45.99

 

(5.0

)

55.79

 

53.96

 

52.20

 

50.51

 

48.88

 

0.0

 

59.05

 

57.12

 

55.27

 

53.49

 

51.78

 

5.0

 

62.31

 

60.29

 

58.35

 

56.48

 

54.68

 

10.0

 

65.58

 

63.46

 

61.42

 

59.46

 

57.58

 

15.0

 

68.84

 

66.62

 

64.50

 

62.45

 

60.48

 

 

51




Note:

Imputed per share values based on Nuveen Investments’ fully diluted share count as of June 4, 2007, which includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.020 million restricted stock units outstanding.

Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Reports and Management, SNL Financial

We have agreed to pay Sandler O’Neill a fee of $1 million for the delivery of its opinion. This fee became due upon delivery of the opinion and is not contingent on the closing of the merger. We have also agreed to reimburse certain of Sandler O’Neill’s reasonable out-of-pocket expenses incurred in connection with its engagement and to indemnify Sandler O’Neill and its affiliates and their respective partners, directors, officers, employees, agents, and controlling persons against certain expenses and liabilities, including liabilities under securities laws. Sandler O’Neill has not received any investment banking fees from us in the past.

In the ordinary course of our business as a broker-dealer, Sandler O’Neill may purchase securities from and sell securities to us and our respective affiliates. Sandler O’Neill may also actively trade the debt and/or equity securities of the company and its respective affiliates for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities.

Financial Projections

Our management does not as a matter of course make public projections as to future performance or earnings beyond the current fiscal year and is especially wary of making projections for extended periods due to the unpredictability of the underlying assumptions and estimates. However, certain financial projections prepared by our management in the first quarter of 2007 were made available to Madison Dearborn and potential co-investors with Madison Dearborn, the special committee, our board of directors and each of Goldman Sachs and Sandler O’Neill in connection with a potential transaction. We have included below the material financial projections (on a consolidated basis) to provide our stockholders access to certain nonpublic information that was provided to these parties in connection with a potential transaction. The inclusion of this information should not be regarded as an indication that Madison Dearborn, the potential co-investors, the special committee, our board of directors, Goldman Sachs, Sandler O’Neill or any other recipient of this information considered, or now considers, these projections to be a reliable prediction of future results. The special committee and our board of directors considered the execution risks associated with the financial projections below in considering and evaluating the merger.

We did not prepare the projections with a view toward public disclosure or compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or generally accepted accounting principles. Our independent registered public accounting firm, KPMG LLP, has neither examined nor compiled the projections and, accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect thereto. The KPMG LLP report on our historical consolidated financial statements incorporated by reference in this proxy statement does not extend to the projections and should not be read to do so.

The projections included below are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those shown below and should be read with caution. See “Cautionary Statement Concerning Forward-Looking Information” beginning on page 17 of this proxy statement. The projections are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and developments occurring since the

52




date each set of projections was prepared. Although presented with numerical specificity, the projections are based upon a variety of estimates and hypothetical assumptions made by our management. Some or all of the assumptions may not be realized, and they are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control, and such uncertainties and contingencies can generally be expected to increase with the passage of time from the dates of the projections. Accordingly, the assumptions made in preparing the projections might not prove accurate, and actual results might differ materially. In addition, the projections do not take into account any of the transactions contemplated by the merger agreement, including the merger and related financing, which might also cause actual results to differ materially.

For these reasons, as well as the bases and assumptions on which the projections were compiled, the inclusion of the projections in this proxy statement should not be regarded as an indication that the projections will be an accurate prediction of future events, and they should not be relied on as such. None of Nuveen Investments, our board of directors, the special committee, Goldman Sachs or Sandler O’Neill assumes any responsibility for the reasonableness, completeness, accuracy or reliability of the projections. No one has made, or makes, any representation regarding the information contained in the projections and, except as may be required by applicable securities laws, we do not intend to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrences of future events even if any or all of the assumptions are shown to be in error. You are cautioned not to rely on this information in making a decision whether to vote in favor of adoption of the merger agreement, thereby approving the merger.

 

 

Fiscal Year End(1)

 

 

 

2007E(2)

 

2008E(2)

 

2009E(2)

 

2010E(2)

 

Revenues

 

 

$

811

 

 

 

$

886

 

 

 

$

975

 

 

 

$

1,076

 

 

EBIT

 

 

$

383

 

 

 

$

417

 

 

 

$

459

 

 

 

$

516

 

 

Net Income

 

 

$

218

 

 

 

$

240

 

 

 

$

266

 

 

 

$

302

 

 

EPS

 

 

$

2.62

 

 

 

$

2.86

 

 

 

$

3.17

 

 

 

$

3.59

 

 


(1)          Financial projections for all fiscal years were provided to the special committee, our board of directors, Goldman Sachs, Sandler O’Neill, Madison Dearborn and potential co-investors with Madison Dearborn.

(2)          All numbers in the above chart are in millions, except per share data. In preparing the projections, our management assumed a market appreciation of assets under management of 5% and 0% for equities and fixed income, respectively, in 2007; and 5.5% and 1.5% for equities and fixed income, respectively, in 2008-2010. In addition, structuring or similar fees and support costs which we expect to incur in 2007-2010 in connection with our anticipated launches of closed-end funds and other structured products are not included in these projections.

Delisting and Deregistration of Our Common Stock

Nuveen Investments common stock is registered as a class of equity securities under the Exchange Act and is quoted on The New York Stock Exchange under the symbol “JNC”. As a result of the merger, we will become a privately-held company, with no public market for our common stock. After the merger, our common stock will cease to be traded on The New York Stock Exchange, and price quotations with respect to sales of shares of our common stock in the public market will no longer be available. In addition, we will no longer be required to file periodic reports with the SEC after the effective time of the merger with respect to our common stock.

53




Considerations Relating to the Merger

Set forth below are various risks relating to the proposed merger. The following is not intended to be an exhaustive list of the risks relating to the merger and should be read in conjunction with the other information in this proxy statement. In addition, you should refer to the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which is incorporated in this proxy statement by reference, for additional risks relating to our business.

Failure to complete the merger could negatively impact the market price of our common stock.

If the merger is not completed for any reason, we will be subject to a number of material risks, including the following:

·       the market price of our common stock may decline substantially to the extent that the current market price of our common stock reflects a market assumption that the merger will be completed;

·       costs relating to the merger agreement, such as legal, accounting and financial advisory fees, and in specified circumstances, termination and expense reimbursement fees, must be paid by us even if the merger is not completed and our ability to recover from Parent and under the  guarantees of the Guarantors will be limited and subject to certain conditions; and

·       the diversion of our management’s attention from the day-to-day business of Nuveen Investments and the potential disruption to our employees and our relationships with customers, clients, investment teams and distributors during the period before the completion of the merger may make it difficult for us to achieve our strategic plan if the merger does not occur.

If the merger is not approved by our stockholders at the special meeting, Nuveen Investments, Parent and Merger Sub will not be permitted under Delaware law to complete the merger and we and Parent will each have the right to terminate the merger agreement. Upon such termination and under specified circumstances, we may be required to reimburse Parent for certain of its expenses up to a maximum of $20 million and to pay to Parent a termination fee of $200 million (less the amount of reimbursed expenses). See “Terms of the Merger Agreement—Reimbursement of Expenses; Termination Fees” beginning on page 87 of this proxy statement.

Further, if the merger is terminated and our board of directors seeks another merger or business combination, stockholders cannot be certain that we will be able to find a party willing to pay an equivalent or better price than the price to be paid in the merger.

Uncertainties associated with the merger may cause us to lose key personnel.

Our current and prospective employees may be uncertain about their future roles and relationships with us following the completion of the merger. This uncertainty may adversely affect our ability to attract and retain key management and employees during the period prior to completion of the merger.

Financing

We currently estimate the total amount of funds necessary to complete the merger and the related transactions to be approximately $6.5 billion, which includes approximately $5.8 billion to be paid to our stockholders and holders of other equity-based interests in Nuveen Investments and the assumption of approximately $550 million of our existing indebtedness, with the remainder to be applied to pay related fees and expenses in connection with the merger, the financing arrangements and the related transactions. Parent has obtained equity financing commitments from the Equity Sponsors (as defined below) and debt financing commitments from the Debt Providers (as defined below) for the transactions contemplated by the merger agreement. After giving effect to the contemplated draws under the debt commitments, we currently expect that the total amount of debt outstanding at the close of the merger to be approximately $3.7 billion (including our currently outstanding senior notes).

54




Equity Financing

In this proxy statement, we refer to:

·       Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P. and Madison Dearborn Capital Partners V Executive-A, L.P., collectively, as the “MDCP Parties,”

·       Citigroup Capital Partners II 2007 Citigroup Investment, L.P., Citigroup Capital Partners II Employee Master Fund, L.P., Citigroup Capital Partners II Onshore, L.P. and Citigroup Capital Partners II Cayman Holdings, L.P., collectively, as the “Citigroup Equity Parties,”

·       Deutsche Bank Investment Partners, Inc., the MDCP Parties, MLGPE U.S. Strategies LLC and Wachovia Capital Partners 2007, LLC, collectively, as the “Guarantors,”

·       Wachovia Capital Partners 2007, LLC and Wachovia Investment Holdings, LLC, together, as the “Wachovia Equity Parties,” and

·       The Citigroup Equity Parties, Deutsche Bank Investment Partners, Inc., the MDCP Parties, MLGPE U.S. Strategies LLC and the Wachovia Equity Parties, collectively, as the “Equity Sponsors.”

Holdings has delivered an equity commitment to Parent in the amount of up to $2.7 billion. Holdings, in turn, has received equity commitments from investment funds and other investors affiliated with or managed by the Equity Sponsors, totaling approximately $2.7 billion. The Equity Sponsors have informed Nuveen Investments that they intend to syndicate a portion of their respective equity commitments to other investors. Such other investors may include affiliates of debt financing sources, limited partners of the Equity Sponsors and other co-investors, some of whom may be existing stockholders of Nuveen Investments. The terms and conditions of any additional equity syndication are subject to further negotiations and discussions among the Equity Sponsors and the potential equity investors.

The equity commitment letters provide that the equity funds will be contributed to fund the merger consideration in accordance with the merger agreement. Each of the equity commitments is subject to completion of the merger. The amount of these commitments to be funded under each respective equity commitment letter agreement on or prior to the closing may be reduced on a dollar for dollar basis (1) for purchases of equity securities of Holdings by their respective affiliates and our current officers and stockholders and (2) to the extent agreed by Madison Dearborn, for purchase of equity securities by Holdings by third parties funding directly or indirectly to Holdings.

Each equity commitment will expire upon the earliest to occur of (1) the effective time of the merger, (2) the valid termination of the merger agreement in accordance with its terms, (3) the termination of the equity commitment letters executed by the Guarantors and delivered to Merger Sub or (4) when we or any of our affiliates assert a claim (a) against any Guarantor under any of the guarantees (as defined in the merger agreement) or (b) otherwise directly or indirectly against any Guarantor or affiliate thereof in connection with the merger agreement or any of the transactions contemplated thereby.

Concurrently with the execution and delivery of the equity commitment letters, the Guarantors have executed and delivered to us limited guarantees related to the performance by Parent (and Merger Sub in the case of the MDCP Parties) of certain payment obligations under the merger agreement. For a description of the guarantees, see “Terms of the Merger Agreement—Limited Guarantees” beginning on page 88 of this proxy statement.

Debt Financing

In this proxy statement, we refer to:

·       Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch and Deutsche Bank Securities Inc., collectively, as “Deutsche Bank,”

55




·       Merrill Lynch Capital Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, together, as “Merrill Lynch,”

·       Morgan Stanley Senior Funding, Inc. as “Morgan Stanley,”

·       Wachovia Bank, National Association, Wachovia Investment Holdings, LLC and Wachovia Capital Markets, LLC, collectively, as “Wachovia,” and

·       Deutsche Bank, Merrill Lynch, Morgan Stanley and Wachovia, collectively, as the “Debt Providers.”

Parent and Merger Sub have received a debt commitment letter, dated as of June 19, 2007, from the Debt Providers to provide the following, subject to the conditions set forth in the debt commitment letter:

·       initially to Merger Sub, and upon consummation of the merger, to the surviving corporation of the merger, which we refer to as the “Borrower,” up to $2.69 billion of senior secured credit facilities (not all of which is expected to be drawn at closing) for the purpose of financing the merger, repaying or refinancing certain existing indebtedness of Nuveen Investments and its subsidiaries, paying fees and expenses incurred in connection with the merger and for providing ongoing working capital and for other general corporate purposes of the surviving corporation and its subsidiaries; and

·       to Borrower, up to $660 million of senior unsecured bridge loans for the purpose of financing the merger, repaying or refinancing certain existing indebtedness of Nuveen Investments and its subsidiaries and paying fees and expenses incurred in connection with the merger.

Pursuant to such debt commitment described above, the Debt Providers have delivered debt financing commitments in approximately the following amounts:

Debt Providers

 

 

 

Commitment
Amount

 

Deutsche Bank.

 

$

893,344,500

 

Merrill Lynch

 

893,344,500

 

Wachovia

 

893,344,500

 

Morgan Stanley.

 

670,000,000

 

TOTAL

 

$

3,350,000,000

 

 

Deutsche Bank, Merrill Lynch and Wachovia were each allocated 26.6667% of the total commitments and Morgan Stanley was allocated 20% of the total commitments of the senior secured credit facility. Deutsche Bank, Merrill Lynch and Wachovia were each allocated 26.6667% of the total commitments and Morgan Stanley was allocated 20% of the total commitments of the senior unsecured bridge facility.

The merger agreement contemplates a period of 25 consecutive calendar days, which we refer to in this proxy statement as the “marketing period,” to consummate the transactions contemplated by the debt financing commitments. There are certain requirements in order for the marketing period to commence. See “Terms of the Merger Agreement—Marketing Period” beginning on page 81 of this proxy statement.

The debt commitment letter and the debt financing commitments thereunder will automatically terminate if the initial borrowing under the facilities does not occur on or before the earlier of (1) the consummation of the merger and (2) April 30, 2008. The debt financing commitments are subject to the satisfaction or waiver of certain conditions, including, without limitation, the following:

·       the absence of a material adverse effect (as defined in the merger agreement);

·       the execution and delivery of definitive credit documentation consistent with the debt commitment letter and the term sheets for the debt facilities and consistent with similar facilities involving

56




affiliates of Madison Dearborn or, to the extent agreed to by Madison Dearborn, affiliates of other top-tier private equity sponsors;

·       the consummation of the merger substantially simultaneously with the initial borrowing under the debt financing facilities, without any material provision of the merger agreement having been waived, amended, supplemented or otherwise modified in a manner material and adverse to the lenders without the consent of the lead arrangers (which consent may not be unreasonably withheld or delayed);

·       the consummation of the equity contribution to Parent substantially simultaneously with the initial borrowing under the facilities;

·       the receipt by the lead arrangers of certain audited, unaudited and pro forma financial statements, including certain projections;

·       with respect to the senior bridge facility, the receipt by the Investment Bank (as defined in the fee letter to the debt commitment letter) of all financial statements for a high yield financing of the type customarily included in private placements pursuant to Rule 144A promulgated under the Securities Act of 1933 in accordance with the senior bridge facility term sheet; and

·       the receipt by the lead arrangers of documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

Although the debt financing described in this proxy statement is not subject to the lenders’ satisfaction with their due diligence or to a “market out,” such financing might not be funded on the closing date because of failure to meet the closing conditions or for other reasons. As of the date of this proxy statement, no alternative financing arrangements or alternative financing plans have been made if the debt financing described herein is not available as anticipated. The documentation governing the debt financing facilities has not been finalized and, accordingly, their actual terms may differ from those described in this proxy statement.

Senior Secured Term and Revolving Credit Facilities (the “Senior Secured Facility”)

General.   The Borrower under the Senior Secured Facility will initially be Merger Sub and, upon consummation of merger, the surviving corporation. The Senior Secured Facility will be comprised of a (1) $2.44 billion term loan facility with a term of seven years and (2) $250 million revolving credit facility with a term of six years.

Each of Deutsche Bank, Merrill Lynch, Wachovia and Morgan Stanley were appointed as lead arrangers and bookrunners for the Senior Secured Facility. Deutsche Bank has been appointed as administrative agent and collateral agent for the Senior Secured Facility. Wachovia has been appointed as syndication agent and Merrill Lynch and Morgan Stanley have been appointed as co-documentation agents for the Senior Secured Facility.

Interest Rate and Fees.   Loans under the Senior Secured Facility are expected to bear interest, at the Borrower’s option, at a rate equal to the adjusted London interbank offer rate or an alternate base rate, in each case plus a spread. After the Borrower’s delivery of financial statements with respect to at least one full fiscal quarter ending after the effective date of the merger, interest rates under the Senior Secured Facility shall be subject to decreases based on a senior secured leverage ratio (which means the ratio of the Borrower’s total net senior secured debt to adjusted EBITDA) and shall be as agreed upon between the Borrower and the Debt Providers.

Guarantors.   All obligations under the Senior Secured Facility, and, at the option of the Borrower, any designated interest rate protection or other hedging arrangement entered into with a lender or any of its affiliates and cash management obligations owed to a lender or any of its affiliates will be

57




unconditionally guaranteed jointly and severally by Parent and each of the existing and future direct and indirect, wholly-owned material domestic subsidiaries of the Borrower (other than certain subsidiaries to be mutually agreed upon, including subsidiaries that are broker-dealers).

Security.   The obligations of the Borrower and the guarantors under the Senior Secured Facility, the guarantees, any designated interest rate protection or other hedging arrangement entered into with a lender or any of its affiliates and cash management obligations that are guaranteed owed to a lender or any of its affiliates, will be secured, subject to permitted liens and other agreed upon exceptions, (1) on a first-lien basis, by all the capital stock of the Borrower and certain of its subsidiaries (excluding significant subsidiaries and limited, in the case of foreign subsidiaries, to 100% of the non-voting capital stock and 65% of the voting capital stock of such subsidiaries) directly held by the Borrower or any guarantor and (2) on a first-lien basis, by substantially all present and future assets of the Borrower and each guarantor. If certain security is not provided at closing despite the use of commercially reasonable efforts to do so, the delivery of such security will not be a condition precedent to the availability of the Senior Secured Facility on the closing date, but instead will be required to be delivered following the closing date pursuant to arrangements to be agreed upon.

Other Terms.   The Senior Secured Facility will contain customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, investments, sales of assets, mergers and consolidations, prepayments of subordinated indebtedness, liens and dividends and other distributions. The Senior Secured Facility will also include customary events of defaults including a change of control to be defined.

Senior Unsecured Bridge Facility (the “Bridge Facility”)

The Borrower is expected to issue up to $660 million aggregate principal amount of senior unsecured notes and/or senior subordinated unsecured notes. The notes may or may not be registered under the Securities Act and may or may not be offered in the United States absent registration or an applicable exemption from registration requirements. If the offering of notes by the Borrower is not completed on or prior to the closing of the merger, the Debt Providers have committed to provide up to $660 million of a senior unsecured Bridge Facility. The Borrower would be the borrower under the Bridge Facility. The bridge facility will be guaranteed (on a senior subordinated basis) by the domestic subsidiaries of the surviving corporation that guarantee the Senior Secured Facility.

Merrill Lynch, Deutsche Bank, Morgan Stanley and Wachovia have been appointed lead arrangers and bookrunners and Merrill Lynch has been appointed as administrative agent.

Interests of Our Directors and Executive Officers in the Merger

In considering the recommendation of the special committee and our board of directors with respect to the merger, you should be aware that our directors and executive officers have interests in the transaction that are different from, or in addition to, your interests as a stockholder. Our board of directors and the special committee were aware of these actual and potential conflicts of interest and considered them along with other matters when they determined to recommend the merger.

Treatment of Nuveen Investments Stock Options in the Merger

Options to acquire shares of our common stock granted under various Nuveen Investments stock incentive plans that are outstanding immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled as of the effective time of the merger in consideration for the right to receive a cash payment equal to the excess of $65.00 over the exercise price per share of the option multiplied by the number of shares subject to the option, less any applicable withholding taxes. Each of our executive officers will benefit from this cash-out of all of his or her options in the same manner as all other holders of our outstanding options.

58




The table below sets forth, as of August 13, 2007, for each of our executive officers, (a) the number of shares subject to vested options to purchase our common stock held by such person, (b) the value of such vested options (without regard to deductions for withholding taxes), calculated by multiplying (1) the excess of $65.00 over the per share exercise price of the option by (2) the number of shares subject to the option, (c) the number of additional options held by such person that will vest immediately prior to the effective time of the merger in accordance with the terms of the merger agreement, (d) the value of such additional options (without regard to deductions for withholding taxes), calculated by multiplying (1) the excess of $65.00 over the per share exercise price of the option by (2) the number of shares subject to the option, (e) the aggregate number of shares subject to vested options and options that will vest as a result of the merger held by such person and (f) the aggregate value of all such vested options and options that will vest as a result of the merger (without regard to deductions for withholding taxes), calculated, for each such person, by adding the amount shown in column (b) and the amount shown in column (d). This table assumes that the number of options held by each person in the table on the date of the consummation of the merger will be identical to the number of options held by him or her on August 13, 2007. None of our non-employee directors hold any stock options.

Information Regarding Stock Options

 

 

Vested Options

 

Options that Will Vest
as a Result of the Merger*

 

Total Shares
and Value

 

 

 

(a) Shares

 

(b) Value

 

(c) Shares

 

(d) Value

 

(e) Shares

 

(f) Value

 

Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timothy R. Schwertfeger

 

 

2,272,869

 

 

$

98,796,472.18

 

 

839,024

 

 

$

19,825,089.43

 

 

3,111,893

 

 

$

118,621,561.61

 

John P. Amboian

 

 

1,787,285

 

 

$

76,579,907.27

 

 

708,957

 

 

$

16,764,340.20

 

 

2,496,242

 

 

$

93,344,247.44

 

Alan G. Berkshire

 

 

476,000

 

 

$

18,851,335.00

 

 

168,540

 

 

$

3,771,620.82

 

 

644,540

 

 

$

22,622,955.82

 

William Adams IV

 

 

356,000

 

 

$

13,369,460.00

 

 

107,371

 

 

$

2,598,267.68

 

 

463,371

 

 

$

15,967,727.68

 

Alan A. Brown

 

 

190,000

 

 

$

7,237,800.00

 

 

78,028

 

 

$

1,798,822.10

 

 

268,028

 

 

$

9,036,622.10

 

Glenn R. Richter

 

 

 

 

 

 

57,114

 

 

$

1,101,038.48

 

 

57,114

 

 

$

1,101,038.48

 

John L. MacCarthy

 

 

 

 

 

 

57,013

 

 

$

1,008,723.98

 

 

57,013

 

 

$

1,008,723.98

 

Sherri A. Hlavacek

 

 

18,000

 

 

$

647,280.00

 

 

19,481

 

 

$

417,946.03

 

 

37,481

 

 

$

1,065,226.03

 


*                    Includes unvested options that are outstanding under our 1996 Equity Incentive Plan, which will vest upon adoption of the merger agreement by our stockholders, and unvested options that are outstanding under our 2005 Equity Incentive Plan, which will vest upon the completion of the merger.

Treatment of Nuveen Investments Restricted Stock in the Merger

Except as otherwise agreed by Parent and the holder of outstanding restricted stock, upon completion of the merger, all outstanding shares of restricted stock (and deferred restricted stock) granted under Nuveen Investments’ equity incentive plans will become fully vested and will be converted into the right to receive a cash payment equal to $65.00 per share, less any applicable withholding taxes. Each of our executive officers will benefit from this accelerated vesting of his or her restricted stock in the same manner as all other holders of our outstanding restricted stock. In addition, while, as of the date of this proxy statement, no arrangements have been agreed upon, and it is not certain whether any such arrangements will be agreed upon, certain members of our management may convert into, or contribute a portion of the proceeds from the exchange of their restricted stock to Parent in exchange for, equity in Parent or the surviving corporation after the merger.

The table below sets forth, as of August 13, 2007, for each of our executive officers, (a) the number of shares of restricted stock held by such person that will vest (or deferred restricted stock that will be paid out) as a result of the merger, (b) the per share value of the restricted stock, (c) the aggregate deferred dividend equivalents that have accrued with respect to deferred restricted stock and (d) the total cash

59




payment that will be made to the executive officer with respect to those shares of restricted stock in connection with the merger (without regard to deductions for withholding taxes). This table assumes that the number of shares of restricted stock held by each person in the table on the date of the consummation of the merger will be identical to the number of shares of restricted stock held by him or her on August 13, 2007. None of our non-employee directors hold any shares of restricted stock.

Information Regarding Restricted Stock

Executive Officer

 

 

 

(a)
Shares*

 

(b)
Value
Per Share

 

(c)
Aggregate
Deferred Dividend
Equivalents

 

(d)
Total

 

Timothy R. Schwertfeger

 

428,312

 

 

$

65.00

 

 

 

$

1,565,381.18

 

 

$

29,405,661.18

 

John P. Amboian

 

301,183

 

 

$

65.00

 

 

 

 

 

$

19,576,895.00

 

Alan G. Berkshire

 

38,570

 

 

$

65.00

 

 

 

 

 

$

2,507,050.00

 

William Adams IV

 

23,403

 

 

$

65.00

 

 

 

 

 

$

1,521,195.00

 

Alan A. Brown

 

47,540

 

 

$

65.00

 

 

 

 

 

$

3,090,100.00

 

Glenn R. Richter

 

24,151

 

 

$

65.00

 

 

 

 

 

$

1,569,815.00

 

John L. MacCarthy

 

13,756

 

 

$

65.00

 

 

 

 

 

$

894,140.00

 

Sherri A. Hlavacek

 

4,843

 

 

$

65.00

 

 

 

 

 

$

314,795.00

 


*                    Includes unvested restricted shares and deferred restricted stock that are outstanding under our 1996 Equity Incentive Plan, which will generally vest or be settled (as applicable) upon adoption of the merger agreement by our stockholders, and unvested restricted shares that are outstanding under our 2005 Equity Incentive Plan, which will generally vest upon the completion of the merger.

Treatment of Nuveen Investments Restricted Stock Units in the Merger

In connection with the merger, all outstanding restricted stock units granted under Nuveen Investments’ equity incentive plans will be cancelled and will be converted into the right to receive a cash payment equal to $65.00 multiplied by the maximum number of shares of our common stock subject to the restricted stock unit and plus any dividend equivalents accrued with respect to the restricted stock unit, less any applicable withholding taxes.

The table below sets forth, as of August 13, 2007, for each of our non-employee directors, (a) the number of restricted stock units held by such person that will vest as a result of the merger and (b) the total cash payment that will be made to the director with respect to those restricted stock units in connection with the merger (without regard to deductions for withholding taxes). This table assumes the number of restricted stock units held by each person in the table on the date of the consummation of the merger will be identical to the number of restricted stock units held by him or her on August 13, 2007. None of our executive officers hold any restricted stock units.

Information Regarding Restricted Stock Units

Directors

 

 

 

(a) RSUs

 

(b) Value

 

Willard L. Boyd

 

6,133.61

 

$

398,684.42

 

Duane R. Kullberg

 

6,133.61

 

$

398,684.42

 

Roderick A. Palmore

 

5,809.37

 

$

377,608.85

 

Connie K. Duckworth

 

1,885.25

 

$

122,541.38

 

 

60




Change in Control and Severance Agreements

We have entered into certain agreements with our executive officers that, in each case, provides for severance payments and other benefits to the executive officer if his or her employment is terminated by us or any successor entity. The completion of the merger would constitute a change in control of Nuveen Investments for purposes of these agreements.

Timothy R. Schwertfeger and John P. Amboian

Pursuant to the employment agreement with each of Messrs. Schwertfeger and Amboian, in the event that the executive’s employment is terminated (a) other than for Cause or (b) for Good Reason (each as defined below), the executive will receive: (1) a pro rated annual bonus for the year of termination based on his average bonus (both cash and equity portions) for the last three years (“Recent Average Bonus”), (2) a lump sum cash payment equal to three times the executive’s annual base salary plus his Recent Average Bonus, (3) continuation of welfare benefits for the earlier of three years or the date medical or welfare benefit coverage with another employer begins, in which case such coverage provided herein will become secondary to any new coverage, (4) three years of additional age and service credit under our retirement plan and (5) immediate vesting of all outstanding equity awards. Messrs. Schwertfeger and Amboian are also entitled to a full gross-up payment with respect to any excise tax incurred under Section 4999 of the Code. We do not expect that consummation of the merger, in and of itself, will require us to make any gross-up payments to Messrs. Schwertfeger and Amboian.

Each of the agreements define “Cause” as (1) the willful and continued failure of the executive to perform substantially his duties with Nuveen Investments, (2) willful engaging by the executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to Nuveen Investments, (3) conviction of a felony or a guilty or nolo contendere plea by the executive or (4) a material breach of the executive’s responsibility under the agreement to maintain confidential information.

Each of the agreements define “Good Reason” as (1) any action by Nuveen Investments which results in a material diminution of the executive’s position, authority, duties, or responsibilities, (2) any failure by Nuveen Investments to pay the executive the contractually determined compensation, (3) a requirement that the executive be based at an office or location other than Chicago, Illinois, (4) the failure by Nuveen Investments to require any successor to expressly assume and agree to perform the agreement, (5) a termination of the executive not permitted by the agreement including Nuveen Investments giving the executive a notice of termination of the employment period under the agreement so that the employment period is not automatically extended and (6) failure of the board of directors to nominate the executive for election to the board of directors or to appoint the executive, in Mr. Schwertfeger’s case, to each committee of the board of directors (other than the Audit, Compensation, and Nomination & Governance Committees), and, in Mr. Amboian’s case, to the Executive Committee of the board of directors, where legally permitted to do so. In addition, the executive’s resignation shall be deemed to be a termination for Good Reason (a) where such termination would constitute a “Qualifying Termination” (as defined below), (b) resignation for any reason during the 60-day period following the six-month anniversary of a “Change of Control” (as defined in our 1996 Equity Incentive Award Plan or any successor thereto), where the executive was not actively and substantively involved in the negotiation of the terms of the Change of Control transaction or event or (c) resignation at any time during the two-year period following a Change of Control in connection with or subsequent to which (1) his position, title, authority, duties or responsibilities are changed adversely, (2) any change is made, without his consent, to our business strategy or business operations which is inconsistent with our business strategy or business operations immediately prior to such Change of Control or (3) he is asked to report to any person (A) other than the board of directors (or, in Mr. Amboian’s case, our principal executive officer) of a publicly traded company that is Nuveen Investments or a successor to Nuveen Investments (if Nuveen Investments is publicly traded immediately prior to such Change of Control) or (B) the Chief Executive Officer of the ultimate parent

61




company of the acquiring company (in the event Nuveen Investments is no longer publicly held and the agreements remain in effect immediately prior to such Change in Control). A “Qualifying Termination” means (1) a termination of employment by Nuveen Investments other than for Cause during the two-year period following a Change in Control, (2) a termination of employment by the executive for Good Reason during the two-year period following a Change in Control or (3) the termination of employment by the executive for any reason (or no reason at all) during the 30-day period commencing one year after the date of a Change in Control. Termination by reason of the Executive’s death or disability shall not be treated as a “Qualifying Termination.”

Each agreement further provides that the executive will not disclose confidential information and will not be permitted to solicit or hire any person employed by Nuveen Investments for twelve months after termination of employment.

On June 19, 2007, our board of directors appointed Mr. Amboian as our Chief Executive Officer effective July 1, 2007. Since July 1, 2007, Mr. Schwertfeger has served as non-executive Chairman of our board of directors. The appointment of Mr. Amboian as our Chief Executive Officer has given Mr. Schwertfeger a basis to terminate his employment agreement for “Good Reason” under his existing employment agreement. In light of the agreement reached between Mr. Schwertfeger and Parent discussed below, the company and Mr. Schwertfeger have postponed further discussions regarding terms and arrangements relating to the transition in roles and in connection with Mr. Schwertfeger’s rights and obligations under his employment agreement. Parent and Mr. Schwertfeger have informed us that they have reached an agreement in principle under which, among other things, Mr. Schwertfeger would waive his rights upon a good reason termination and Parent would permit Mr. Schwertfeger to purchase, on terms similar to Madison Dearborn, equity of Parent or the surviving corporation after the merger.  The final documentation of this agreement has not been completed.

Alan A. Brown

In the event Mr. Brown’s employment is terminated (a) other than for “cause” (as defined in Nuveen Investments’ equity incentive award plan in effect at the time of termination) or (b) for “good reason” (as defined below), Mr. Brown will receive (1) continuation of his annual base compensation then in effect for up to 18 months after the date of termination and (2) a pro rated annual bonus (based on the number of days he was employed in the year during which he was terminated) for the year of termination based on his prior year’s bonus. Mr. Brown is prohibited from soliciting Nuveen Investments’ clients or employees during the period in which he receives base compensation continuation payments. He can, however, relinquish his rights to future payments at any time and be released from this limitation. The severance rights provided in these employment terms are in lieu of any severance rights Mr. Brown would otherwise have under Nuveen Investments’ severance plan. The term “good reason,” as defined in these employment terms, means (1) Mr. Brown’s responsibilities are materially diminished without his consent or (2) Mr. Brown is required to report to any person other than the President of Nuveen Investments or another member of the Office of the Chairman without his consent. Good reason does not include any action not taken in bad faith that is remedied by us within 30 days after we receive detailed written notice of the action from Mr. Brown.

Glenn R. Richter and John L. MacCarthy

The employment terms of Messrs. Richter and MacCarthy are outlined in offer summaries entered into in May 2006 and March 2006, respectively. If we terminate either executive’s employment without cause prior to January 1, 2008, then the terminated executive will be entitled to receive upon termination a bonus that is a pro rata portion (based on the number of days he was employed in the year during which he is terminated) of $800,000. In addition, in that case, each terminated executive will also be entitled to receive a special severance payment equal to $500,000, which amount will be paid either through a semi-monthly salary continuation or through a lump-sum payment 45 days following the date of termination.

62




Severance Plan

In accordance with the severance plan for Nuveen Investments’ broker-dealer subsidiary, for which Ms. Hlavacek and Messrs. Adams and Berkshire are eligible, if an employee is terminated by the company other than due to unacceptable performance or misconduct, the employee is eligible to receive a month’s salary for each completed year such employee was employed, with a minimum of three months and up to a maximum of eighteen months, provided he or she is otherwise in compliance with the plan. Messrs. Schwertfeger, Amboian, Richter, Brown and MacCarthy and other employees with employment agreements or terms are not eligible to participate in this severance plan during the term of such agreements, but will be eligible to participate upon the termination of such agreements or terms.

Information Regarding Change in Control Severance Payments

The following table sets forth information regarding the estimated value of payments and other benefits that would be payable or provided by us to each of our executive officers pursuant to certain termination and/or change in control provisions described above on pages 60 through 63 if his or her employment were to be terminated immediately following the completion of the merger and assuming that the merger were to be completed on October 1, 2007, under circumstances entitling such executive officer to severance under such agreements. The value of outstanding stock options and restricted stock is described above on pages 59 through 60.

Executive Officers

 

 

 

Bonus
Through
Termination
Date

 

Salary and/or
Bonus
Continuation

 

Health &
Welfare
Continuation

 

Incremental
Non-
Qualified
Pension

 

Gross-up
Payment

 

Total
Payments

 

Timothy R. Schwertfeger

 

 

$

6,488,414

 

 

 

$

28,179,975

 

 

 

$

62,557

 

 

 

$

598,515

 

 

$

19,578,777

 

$

54,908,238

 

John P. Amboian

 

 

$

5,515,153

 

 

 

$

23,540,484

 

 

 

$

58,957

 

 

 

$

246,187

 

 

$

17,404,781

 

$

46,765,562

 

Alan G. Berkshire

 

 

 

 

 

$

416,667

 

 

 

$

12,588

 

 

 

 

 

 

$

429,255

 

William Adams IV

 

 

 

 

 

$

562,500

 

 

 

$

25,176

 

 

 

 

 

 

$

587,676

 

Alan A. Brown

 

 

$

867,048

 

 

 

$

600,000

 

 

 

$

4,895

 

 

 

 

 

 

$

1,471,943

 

Glenn R. Richter

 

 

$

600,548

 

 

 

$

500,000

 

 

 

$

4,196

 

 

 

 

 

 

$

1,104,744

 

John L. MacCarthy

 

 

$

600,548

 

 

 

$

500,000

 

 

 

$

4,196

 

 

 

 

 

 

$

1,104,744

 

Sherri A. Hlavacek

 

 

 

 

 

$

190,000

 

 

 

$

3,340

 

 

 

 

 

 

$

193,340

 

 

Payment of Deferred Bonus Plan Accounts

Under our Deferred Bonus Plan, we permit our senior executives to defer all or a portion of their annual cash bonus and receive a return on the amounts so deferred measured by (1) the prime rate or (2) the performance of one or more of a specified list of investment products sponsored by us. Upon a change in control, all accounts under the Deferred Bonus Plan become payable in a lump sum. As of June 30, 2007, Messrs. Amboian, Berkshire and Adams had aggregate balances under the Deferred Bonus Plan of approximately $1,579,589, $694,369 and $1,395,844, respectively. No other executive officers have balances in the Deferred Bonus Plan. None of our non-employee directors participate in the Deferred Bonus Plan.

Payment of Retirement Benefits

Mr. Schwertfeger is eligible to receive early retirement benefits under our Retirement Plan and Excess Benefit Retirement Plan, which provide for reduced retirement benefits once a participant has completed 15 or more years of continuous service and has reached at least age 55. If Mr. Schwertfeger were to choose to retire effective October 1, 2007, the present value of his early retirement benefits under these plans would be $4,691,653, which includes the value of the non-qualified pension enhancement quantified in the table above. None of our other executive officers is currently (or would be as of October 1, 2007) eligible for early retirement under these plans.

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Rabbi Trust Obligations

Pursuant to the trust agreement under our Excess Benefit Retirement Plan, upon a change in control, we are required to contribute funds to a trust in an amount sufficient to pay all benefits payable under the plan. The completion of the merger will result in a change in control for purposes of the trust agreement. The trust is currently unfunded. We anticipate being required to contribute an amount equal to approximately $5,292,233 to the trust to satisfy the funding obligation. This amount includes funds necessary to pay benefits to all participants in the Excess Benefit Retirement Plan, including our executive officers.

Pursuant to the trust agreement under the Nuveen Scholarship Plan, following a change in control, we will not be entitled to the return of any funds held in the trust established pursuant to the plan, except in the form of reimbursement of scholarship benefits. In addition, the trust cannot be terminated for a period of ten years following a change in control.  The completion of the merger will result in a change in control for purposes of the trust agreement. As of July 31, 2007, the trust held assets in an amount equal to $4,829,309.

Exculpation, Indemnification and Insurances

The merger agreement provides, among other things, that, for a period of six years after the effective time of the merger, Parent will cause the certificate of incorporation and bylaws or other organizational documents of the surviving corporation and each of its subsidiaries to contain provisions no less advantageous with respect to the elimination of liability of directors, indemnification of officers and directors and advancement of expenses than are set forth in the corresponding provisions of such organizational documents as in effect on the date of the merger agreement. The merger agreement also provides that the surviving corporation shall obtain and fully pay the premium for an extension of specific portions of our existing directors’ and officers’ insurance and fiduciary liability insurance for a period of six years after the effective time of the merger. See “Terms of the Merger Agreement—Indemnification and Insurance” on page 89 of this proxy statement.

Special Committee Compensation

Our board of directors has provided that each member of the special committee is to be paid by us a fee of $2,500 for each day that such member attends a full meeting of the special committee or otherwise devotes substantial time and attention to matters for which the special committee was formed. Compensation for members of the special committee was not and is not contingent on the committee approving or recommending the merger or any other strategic alternative, or the consummation of the merger or any other strategic alternative.

Benefits Arrangements with the Surviving Corporation

Parent has agreed that, following the completion of the merger, Parent will cause the surviving corporation and its subsidiaries to assume and honor each of the company’s employment, severance, retention, change of control and similar plans, agreements and arrangements (including any such plan, agreement or arrangement applicable to our executive officers, but excluding any commitment to grant equity compensation) in accordance with their terms as in effect immediately prior to the completion of the merger, subject to any amendment or termination that may be permitted by such agreement or arrangement.

Parent has agreed to cause the surviving corporation and each of its subsidiaries to maintain, for a period commencing at the effective time of the merger and ending on the first anniversary of the effective time of the merger, for each employee employed by Nuveen Investments or any of its subsidiaries at the effective time of the merger (including our executive officers), benefits under employee benefit plans and severance benefits that, in the aggregate, are no less favorable than those provided immediately prior to the effective time of the merger. Parent has agreed to recognize the service of such employees with Nuveen

64




Investments and its subsidiaries prior to the consummation of the merger for purposes of eligibility to participate, level of benefits, vesting and benefit accruals with respect to any benefit plan, program or arrangement maintained by Parent or the surviving corporation, with the exception of benefit accruals under certain defined benefit plans and to the extent such credit would result in a duplication of benefits. Parent has also agreed to waive all waiting time to participate in the benefit plans of the surviving corporation and limitations as to pre-existing conditions to the extent waived under any such plan maintained by Nuveen Investments immediately prior to the effective time of the merger and give effect, for the applicable plan year in which the closing of the merger occurs, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, employees under similar plans maintained by Nuveen Investments and its subsidiaries (to the extent credited under such plan) immediately prior to the effective time of the merger.

New Management Arrangements

As of the date of this proxy statement, no member of our management has entered into any amendments or modifications to existing employment agreements with us or our subsidiaries in connection with the merger. In addition, as of the date of this proxy statement, except with respect to Mr. Schwertfeger as described above, no member of our management has entered into any agreement, arrangement or understanding with Parent or any of its affiliates regarding employment with, or the right to purchase or participate in the equity plans of, Parent or the surviving corporation.

As people are the most important assets of an asset management firm, Parent has informed us that it currently intends to retain our current management team following the merger. Parent has also informed us that it intends to offer members of management the opportunity to invest in equity of Parent (and/or a parent/subsidiary thereof) on terms that are no more favorable than other investors in Parent. Further, Parent has informed us that it intends to establish an equity-based incentive program for the surviving corporation to give our key employees the opportunity to receive up to 15% of the future increase in Parent’s equity value. The specific terms of such equity-based incentive program have not yet been determined and no participation interests have yet been allocated to members of our management or other key employees. It is anticipated that this equity program will be subject to vesting over a number of years of continued employment and transfer restrictions.

Although it is likely that members of our current management team will enter into new arrangements with Parent or its affiliates regarding employment with, and the right to purchase or participate in the equity and/or profits of, Parent (and/or a subsidiary thereof), there can be no assurance that any parties will reach an agreement. These matters are subject to negotiation and discussion and no terms or conditions have been finalized. Any new arrangements are currently expected to be entered into at or prior to the completion of the merger and will not become effective until after the merger is completed.

Although no arrangement has been made as of the date of this proxy statement, Parent has informed us that it expects to offer Mr. Amboian, Nuveen Investments’ Chief Executive Officer, the opportunity to serve on the boards of directors of Holdings and the surviving corporation following the completion of the merger, which boards are expected to include at least nine other members immediately following the completion of the merger.

Regulatory Matters

The HSR Act and the regulations promulgated thereunder require that we and Parent file notification and report forms with respect to the merger and related transactions with the Antitrust Division and the FTC. The parties thereafter are required to observe a waiting period before completing the merger. The required notification and report forms were filed with the Antitrust Division and the FTC on July 3, 2007. On July 17, 2007, we received notice from the FTC of early termination of the HSR waiting period.

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At any time before or after the completion of the merger, the Antitrust Division or the FTC or any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, to rescind the merger or to seek divestiture of particular assets. Private parties also may seek to take legal action under the antitrust laws under certain circumstances. Although there is no assurance that they will not do so, we do not expect any regulatory authority, state or private party to take legal action under the antitrust laws.

Although we do not expect these regulatory authorities to raise any significant concerns in connection with their review of the merger, there is no assurance that all applicable waiting periods will expire, that we will obtain all required regulatory approvals, or that those approvals will not include terms, conditions or restrictions that may have an adverse effect on us or, after completion of the transaction, Parent.

Other than the filings described above, we are not aware of any mandatory regulatory filings to be made, approvals to be obtained, or waiting periods to expire, in order to complete the merger. If the parties discover that other regulatory filings, approvals or waiting periods are necessary, they will seek to obtain or comply with them. If any approval or action is needed, however, we may not be able to obtain it or any of the other necessary approvals. Even if we could obtain all necessary approvals, and the merger agreement is adopted by our stockholders, conditions may be placed on the merger that could cause us to abandon it.

Litigation Relating to the Merger

On June 20, 2007, a putative class action suit was filed in the Circuit Court of Cook County, Illinois, Chancery Division, by an alleged stockholder of Nuveen Investments, naming Nuveen Investments, members of the board of directors and Madison Dearborn as defendants in the complaint. The case is captioned Robert Summerfield v. Nuveen Investments, Inc., et al., Case No. 07CH 16315. This is a stockholder class action suit for alleged breaches of fiduciary duty or other violations of applicable law arising out of the pending merger. The petition alleges that the defendants have breached their fiduciary duties of loyalty, due care, independence, good faith and fair dealing, or have aided and abetted such breaches. The plaintiff asks the court to declare the suit a proper class action suit and to certify the plaintiff as class representative and plaintiff’s counsel as class counsel. The plaintiff seeks, among other things, to enjoin the proposed merger, to have the Circuit Court declare that the directors of Nuveen Investments have breached their fiduciary duties and to have attorneys’ fees awarded to plaintiff’s counsel.

On June 21, 2007, June 26, 2007 and June 27, 2007, similar putative class action suits were filed in the same court by alleged stockholders of Nuveen Investments. The cases are captioned Samuel K. Rosen v. Nuveen Investments, Inc., et. al., Case No. 07CH 16443, Levy Investments v. Nuveen Investments, Inc., et al., Case No. 07CH 16832 and John Sudderth v. Nuveen Investments, Inc., et al., Case No. 07CH 16939, and name as defendants Nuveen Investments, members of our board of directors and, in the case of Levy Investments, Madison Dearborn. On July 31, 2007, all of the Illinois cases were consolidated with the Summerfield case. A similar putative class action suit was filed in the Court of Chancery of the State of Delaware in and for New Castle County on June 28, 2007. The case is captioned Brockton Contributory Retirement Sys. v. Nuveen Investments, Inc., Case No. 3060, and names as defendants Nuveen Investments, members of our board of directors, Madison Dearborn, Parent and Merger Sub. The complaints variously allege that the defendants breached their fiduciary duties of loyalty, due care, independence, good faith or fair dealing. All of the plaintiffs ask the court to declare the suit a proper class action suit and to certify the respective plaintiffs as class representative. Among other things, all complaints seek to enjoin the proposed merger. Additionally, two of the cases, Sudderth and Brockton Contributory Retirement System, seek imposition of a constructive trust, in favor of the class, upon any benefits improperly received by defendants as a result of the alleged misconduct.

We believe that the complaints are entirely without merit and intend to defend vigorously against these actions.

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Material U.S. Federal Income Tax Consequences

The following is a summary of the material U.S. federal income tax consequences of the merger to certain holders of Nuveen Investments common stock. This summary is based on the Internal Revenue Code of 1986, as amended, referred to in this proxy statement as the Code, regulations promulgated under the Code, administrative rulings by the Internal Revenue Service (the “IRS”) and court decisions now in effect. All of these authorities are subject to change, possibly with retroactive effect so as to result in tax consequences different from those described below. This summary is not binding on the IRS or a court and there are no assurances that the tax consequences described in this summary will not be challenged by the IRS or will be sustained by a court if challenged by the IRS. No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the merger. This summary does not address all of the U.S. federal income tax consequences that may be applicable to a particular holder of Nuveen Investments common stock. For example, this summary does not address the alternative minimum tax. In addition, this summary does not address the U.S. federal income tax consequences of the merger to holders of Nuveen Investments common stock who are subject to special treatment under U.S. federal income tax laws, including, for example, banks and other financial institutions, insurance companies, tax-exempt investors, S corporations, holders that are properly classified as “partnerships” under the Code, dealers in securities, holders who hold their common stock as part of a hedge, straddle or conversion transaction or who are deemed to sell their common stock in a constructive sale transaction, holders whose functional currency is not the U.S. dollar, holders who acquired our common stock through the exercise of employee stock options or other compensatory arrangements, holders who own 5% or more of Nuveen Investments common stock and holders who do not hold their shares of Nuveen Investments common stock as “capital assets” within the meaning of Section 1221 of the Code. This summary does not address the U.S. federal income tax consequences to any holder of Nuveen Investments common stock who or which, for U.S. federal income tax purposes, is a nonresident alien individual, a foreign corporation, a foreign partnership or a foreign estate or trust and this summary does not address the tax consequences of the merger under state, local or foreign tax laws.

This summary is provided for general information purposes only and is not intended as a substitute for individual tax advice. Each holder of Nuveen Investments common stock should consult the holder’s individual tax advisors as to the particular tax consequences of the merger to such holder, including the application and effect of any state, local, foreign or other tax laws and the possible effect of changes to such laws.

Exchange of Common Stock for Cash

Generally, merger consideration paid to our stockholders will be taxable to our stockholders for U.S. federal income tax purposes. A holder of Nuveen Investments common stock receiving cash in the merger generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Nuveen Investments common stock surrendered. Any such gain or loss generally will be capital gain or loss if the Nuveen Investments common stock is held as a capital asset at the effective time of the merger. Any capital gain or loss will be taxed as long-term capital gain or loss if the holder has held the Nuveen Investments common stock for more than one year prior to the effective time of the merger. If the holder has held the Nuveen Investments common stock for one year or less prior to the effective time of the merger, any capital gain or loss will be taxed as short-term capital gain or loss. Currently, long-term capital gain for non-corporate taxpayers is taxed at a maximum federal tax rate of 15%. The deductibility of capital losses is subject to certain limitations. Gain or loss will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction).

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Dissenting Stockholders

Our stockholders who validly exercise dissenters’ rights with respect to the merger, as discussed under “—Appraisal Rights” beginning on page 68 of this proxy statement, and who receive cash in respect of their shares of our common stock, generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Nuveen Investments common stock surrendered. Gain or loss will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction). Each such stockholder should consult its own tax advisor as to the tax consequences of the receipt of cash as a result of exercising dissenters’ rights.

Backup Withholding and Information Reporting

Under the U.S. federal backup withholding tax rules, unless an exemption applies, the paying agent will be required to withhold, and will withhold, 28% of all cash payments to which a holder of Nuveen Investments common stock is entitled in connection with the merger unless the holder provides a tax identification number (social security number in the case of an individual or employer identification number in the case of other holders), certifying that such number is correct and that no backup withholding is otherwise required and otherwise complies with such backup withholding rules. Each holder of Nuveen Investments common stock should complete, sign and return to the paying agent the Substitute Form W-9 in order to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the paying agent. The Substitute Form W-9 will be included as part of the letter of transmittal mailed to each record holder of Nuveen Investments common stock. Cash received in the merger will be subject to information reporting unless an exemption applies.

Appraisal Rights

Holders of record of our shares of common stock who do not vote in favor of the adoption of the merger agreement or consent thereto in writing and who properly demand appraisal of their shares will be entitled to seek appraisal of the “fair value” of their shares under Section 262 of the Delaware General Corporation Law, referred to in this proxy statement as “Section 262”.

In order to exercise appraisal rights and obtain “fair value” for your shares exclusive of any element of value arising from the expectation or accomplishment of the merger, you must demand an appraisal and perfect your appraisal rights in accordance with Section 262. A person having a beneficial interest in shares of our common stock held of record in the name of another person, such as a broker, fiduciary, depositary or other nominee, must act promptly to cause the record holder to follow the steps set forth in Section 262 properly and in a timely manner to perfect appraisal rights. Failure to follow exactly the procedures specified under Section 262 will result in the loss of appraisal rights.

The following discussion is not a complete statement of the law pertaining to appraisal rights under Section 262 and is qualified in its entirety by the full text of Section 262 which is attached to this proxy statement as Appendix D. The following summary does not constitute any legal or other advice nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262. All references in Section 262 and in this summary to a “stockholder” or “holders of shares of our common stock” are to the record holder or holders of the shares of our common stock entitled to vote as to which appraisal rights are asserted.

Under Section 262, a record holder of shares of our common stock who makes the demand described below with respect to such shares, who continuously is the record holder of such shares through the effective time of the merger, who does not vote in favor of the adoption of the merger agreement and who otherwise follows the procedures set forth in Section 262, will be entitled to have his or her shares

68




appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, as determined by the court.

Under Section 262, when a merger is to be submitted for approval at a meeting of stockholders, as in the case of the adoption of the merger agreement by our stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in such notice a copy of Section 262. This proxy statement shall constitute such notice, and the full text of Section 262 is attached to this proxy statement as Appendix D. Any holder of our common stock who wishes to exercise appraisal rights, or who wishes to preserve such holder’s right to do so should review the following discussion and Appendix D carefully because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of our common stock, we believe that if you consider exercising such rights, you should seek the advice of legal counsel.

Any stockholder wishing to exercise appraisal rights must deliver to us, before the vote on the adoption of the merger agreement at the special meeting on September 18, 2007, a written demand for the appraisal of the stockholder’s shares, and must not vote in favor of the adoption of the merger agreement. A holder of shares of our common stock wishing to exercise appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective time of the merger, since appraisal rights will be lost if the shares are transferred prior to the effective time of the merger. A proxy that is signed and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the merger agreement. Therefore, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the adoption of the merger agreement or abstain from voting on the merger agreement. Neither voting against the adoption of the merger agreement (in person or by proxy), nor abstaining from voting or failing to vote on the proposal to adopt the merger agreement, will in and of itself constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the proposal to adopt the merger agreement. The demand must reasonably inform us of the identity of the record holder as well as the intention of the holder to demand an appraisal of the “fair value” of the shares held by the holder. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the merger agreement at the special meeting of stockholders will constitute a waiver of appraisal rights.

Only a holder of record of shares of our common stock is entitled to assert appraisal rights for the shares registered in that holder’s name. A demand for appraisal in respect of shares of our common stock should be executed by or on behalf of the holder of record, and must state that the person intends thereby to demand appraisal of the holder’s shares in connection with the merger. Beneficial owners who do not also hold the shares of record may not directly make appraisal demands to us. The beneficial owner must, in such cases, have the registered stockholder submit the required demand in respect of those shares. If the shares are owned of record by a person other than the beneficial owner, including a broker, fiduciary (such as a trustee, guardian or custodian), depositary or other nominee, execution of the demand should be by or for the record owner, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder or record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners. A record holder such as a broker who holds shares as nominee for several beneficial owners may exercise appraisal rights with respect to the shares held for one or more beneficial owners while not exercising the rights with respect to the shares held for other beneficial owners; in such case, however, the written demand should set forth the number of

69




shares as to which appraisal is sought and where no number of shares is expressly mentioned the demand will be presumed to cover all shares of our common stock entitled to vote held in the name of the record owner. Stockholders who hold their shares in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.

All demands for appraisal pursuant to Section 262 should be made in writing and delivered to the following address prior to the vote on the adoption of the merger agreement: Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, Attention: Secretary.

The demand must reasonably inform us of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares of common stock. If your shares of our common stock are held through a broker, bank, nominee or other third-party and you wish to demand appraisal rights you must act promptly to instruct the applicable broker, bank, nominee or other third party to follow the steps set forth in Section 262, and summarized here, properly and in a timely fashion.

Within ten days after the effective time of the merger, the surviving corporation must notify each holder of our common stock who has complied with Section 262, and who has not voted in favor of the adoption of the merger agreement that the merger has become effective. Within 120 days after the effective time of the merger, but not thereafter, the surviving corporation or any holder of our common stock who has so complied with Section 262 and is entitled to appraisal rights under Section 262 may file a petition in the Delaware Court of Chancery with a copy served on the surviving corporation demanding a determination of the fair value of the shares held by all dissenting holders. If a petition for appraisal is not timely filed, then the right to an appraisal for all dissenting stockholders will cease. The surviving corporation is under no obligation to and has no present intention to file a petition and holders should not assume that the surviving corporation will file a petition or that the surviving corporation will initiate any negotiations with respect to the fair value of such shares. Accordingly, the holders of our common stock who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of shares of our common stock within the time and in the manner prescribed in Section 262.

Within 120 days after the effective time of the merger, any holder of our common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the merger agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within ten days after a written request therefor has been received by the surviving corporation or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later.

Under the merger agreement, Nuveen Investments has agreed to provide Parent prompt notice of any written demands for appraisal, attempted withdrawals of such demands and any other related instruments served pursuant to the Delaware General Corporation Law received by us pursuant to Section 262. Parent will have the right to participate in and direct negotiations and proceedings with respect to demands for appraisal under Section 262. We will not make any payments with respect to, or settle or offer to settle, any demands for appraisal without the prior written consent of Parent.

If a petition for an appraisal is timely filed by a holder of shares of our common stock and a copy thereof is served upon the surviving corporation, the surviving corporation will then be obligated within 20 days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the Court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become

70




entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded payment for their shares to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with the direction, the Court of Chancery may dismiss the proceedings as to that stockholder.

After determining the holders of our common stock entitled to appraisal, the Delaware Court of Chancery will determine the “fair value” of their shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value and, if applicable, a fair rate of interest, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined could be more than, the same as or less than the cash merger consideration that they would receive pursuant to the merger if they did not seek appraisal of their shares and that an investment banking opinion as to the fairness from a financial point of view of the consideration to be received in a merger is not necessarily an opinion as to fair value under Section 262. Although we believe that the merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the cash merger consideration.

Parent has informed us that it does not anticipate offering to any stockholder exercising appraisal rights more than $65.00 per share to any holder of shares of common stock, and Parent has reserved the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of our common stock is less than $65.00 per share of common stock. The Delaware Court of Chancery will also determine the amount of interest, if any, to be paid upon the amounts to be received by persons whose shares of our common stock have been appraised. The costs of the action may be determined by the Court and taxed upon the parties as the Court deems equitable under the circumstances. However, such costs do not include attorneys’ and expert witness fees. Each dissenting stockholder is responsible for his or her attorneys’ and expert witness expenses, although upon application of a dissenting stockholder or the surviving corporation, the Court may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, be charged pro rata against the value of all the shares entitled to be appraised.

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Any holder of shares of our common stock who has duly demanded an appraisal in compliance with Section 262 will not, after the effective time of the merger, be entitled to vote the shares subject to the demand for any purpose or be entitled to the payment of dividends or other distributions on those shares (except dividends or other distributions payable to holders of record of our common stock as of a record date prior to the effective time of the merger).

If any stockholder who demands appraisal of shares of our common stock under Section 262 fails to perfect, or successfully withdraws or loses, such holder’s right to appraisal, the stockholder’s shares of our common stock will be deemed to have been converted at the effective time of the merger into the right to receive $65.00 in cash per share, without interest and less any applicable withholding taxes. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the effective time of the merger, or if the stockholder delivers to the surviving corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the merger consideration, except that any attempt to withdraw made more than 60 days after the effective time of the merger will require the written approval of the surviving corporation and, once a petition for appraisal is filed, the appraisal proceeding may not be dismissed as to any holder absent approval by the Delaware Court of Chancery, which approval may be conditioned upon the terms the Court deems just.

Failure to comply with all of the procedures set forth in Section 262 may result in the loss of a stockholder’s statutory appraisal rights. Consequently, any stockholder who may wish to pursue appraisal rights is urged to consult legal counsel promptly.

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TERMS OF THE MERGER AGREEMENT

This section of the proxy statement describes the material terms of the merger and the merger agreement but does not purport to describe all of the terms of the merger agreement and may not contain all of the information about the merger and the merger agreement that is important to you. The following summary is qualified in its entirety by reference to the complete text of the merger agreement, which is attached as Appendix A to this proxy statement and is incorporated into this proxy statement by reference. We urge you to read the full text of the merger agreement because it is the legal document that governs the merger. We have included this description of the merger agreement to provide you with information regarding its terms. We have not provided this description to provide you with any other factual information about us. You can find such factual information elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled “Where Stockholders Can Find More Information” below.

The Merger

The merger agreement provides that on the third business day following the day on which the conditions to the merger are satisfied or waived and the marketing period described below under the section entitled “—Marketing Period” has elapsed, Merger Sub, a wholly owned subsidiary of Parent, will merge with and into the company, with the company continuing as the surviving corporation. As a result of the merger, we will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent. Following the satisfaction or waiver of the conditions to the merger and the expiration of the marketing period, we and Merger Sub will file a certificate of merger with the Secretary of State of the State of Delaware. The merger will become effective at the time the certificate of merger is duly filed with the Secretary of State of the State of Delaware (or at such later time as may be agreed by Parent and us and specified in the certificate of merger) (which we refer to as the “effective time”).

We expect that the merger will be consummated as promptly as practicable after all conditions to the merger (including the vote of our stockholders in favor of the adoption of the merger agreement) have been satisfied or waived and the marketing period has expired. We cannot specify when, or assure you that, all conditions to the merger will be satisfied or waived; however, we intend to consummate the merger as promptly as practicable.

We or Parent may terminate the merger agreement prior to the consummation of the merger in some circumstances whether before or after the adoption of the merger agreement by our stockholders. You can find additional details on termination of the merger agreement under the section entitled “—Termination of the Merger Agreement”.

Merger Consideration

At the effective time, unless otherwise agreed between a stockholder and Parent, each share of our common stock issued and outstanding immediately prior to the effective time (other than shares owned by us, Parent or Merger Sub and dissenting shares under Delaware law) will automatically be cancelled and will cease to exist and will be converted into the right to receive $65.00 in cash and the payment of any dividends declared with a record date prior to the effective time that remain unpaid at the effective time and that are due, in each case, without interest and less any applicable withholding taxes.

Treatment of Restricted Shares, Options and Restricted Stock Units

Except as otherwise agreed by Parent and a holder of our restricted shares, options to acquire our common stock or restricted stock units, such restricted shares, options and restricted stock units will, as of the effective time, be treated as follows:

·       each unvested restricted share of the company outstanding immediately prior to the consummation of the merger will become vested and become free of restrictions and each restricted share of the

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company will be cancelled and converted into the right to receive from the surviving corporation $65.00 in cash, without interest and less any applicable withholding taxes;

·       each option to acquire shares of our common stock outstanding immediately prior to the consummation of the merger will become vested with respect to the number of shares covered by such option and will be cancelled in exchange for the right to receive from the surviving corporation a cash payment equal to the number of shares of our common stock underlying the holder’s option multiplied by the amount by which $65.00 exceeds the exercise price for each share of the company’s common stock underlying the options, without interest and less any applicable withholding taxes; and

·       each restricted stock unit (and each deferred share of restricted stock) outstanding immediately prior to the consummation of the merger will be cancelled and converted into the right to receive from the surviving corporation a cash payment equal to the number of shares of the company’s common stock subject to such restricted stock unit (and deferred restricted stock) multiplied by $65.00 plus any dividend equivalents accrued with respect to such restricted stock unit (and deferred restricted stock) but not yet distributed as of the effective time (other than any such dividend equivalents that are held in the form of restricted stock units (and deferred restricted stock) as of the effective time), without interest and less any applicable withholding taxes.

The options to acquire shares of our common stock and restricted shares of our common stock granted under the company’s 1996 Equity Incentive Award Plan will become fully vested, and outstanding restricted stock units (and deferred restricted stock) granted under our 1996 Equity Incentive Plan that vested before January 1, 2005 will be settled, upon the adoption of the merger agreement by our stockholders. The options to acquire shares of our common stock, restricted shares of our common stock and restricted stock units granted under our 2005 Equity Incentive Plan, and restricted stock units (and deferred restricted stock) granted under our 1996 Equity Incentive Award Plan that were unvested as of January 1, 2005 will become fully vested upon the completion of the merger.

Payment for the Shares

Before the merger, Parent will designate a bank or trust company reasonably acceptable to us (the “paying agent”) to act as agent for the payment of the merger consideration. At the effective time, Parent will cause to be deposited with the paying agent cash in the amount necessary to pay the aggregate merger consideration as described above under the section entitled “—Merger Consideration”.

At the close of business on the date on which the effective time occurs and upon the settlement of transfers that occurred prior to the effective time, we will close our stock transfer books. After that time, there will be no further transfer of shares of our common stock.

Promptly after the effective time, the surviving corporation will instruct the paying agent to send to each holder of record of shares of our common stock a letter of transmittal and instructions advising each such holder how to surrender its shares of common stock in exchange for the merger consideration. The paying agent will pay each such holder its merger consideration after such holder has (a) surrendered its shares of common stock of the company to the paying agent and (b) provided to the paying agent its signed letter of transmittal and any other items specified by the letter of transmittal. Interest will not be paid or accrue in respect of the merger consideration. The surviving corporation will reduce the amount of any merger consideration paid to each such holder by any applicable withholding taxes.

You should not forward your stock certificates to the paying agent without a letter of transmittal, and you should not return your stock certificates with the enclosed proxy.

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If any cash deposited with the paying agent is not claimed within 12 months following the effective time, such cash will be returned to the surviving corporation upon demand, subject to any applicable unclaimed property laws.

If the paying agent is to pay some or all of the merger consideration to a person other than the registered owner of a stock certificate, the recipient must have the applicable stock certificates properly endorsed or otherwise in proper form for transfer, and the recipient must pay any transfer or other taxes payable by reason of the transfer or establish to the paying agent’s reasonable satisfaction that the taxes have been paid or are not required to be paid.

The transmittal instructions will instruct each holder of record of shares of our common stock what to do if it has lost its certificate or if such certificate has been stolen or destroyed. Each such holder will have to provide an affidavit to that fact and, if required by the surviving corporation, post a bond in a customary amount and upon such terms as the surviving corporation directs as indemnity against any claim that may be made against it in respect of the certificate.

Certificate of Incorporation; Bylaws; Directors and Officers of the Surviving Corporation

At the effective time, our certificate of incorporation as in effect immediately prior to the effective time will be amended to read in its entirety as the certificate of incorporation of Merger Sub (except that Article I thereof shall be amended to read “The name of the Corporation is Nuveen Investments, Inc.”), and our by-laws as in effect immediately prior to the effective time will be amended to read in their entirety as the by-laws of Merger Sub, and, in each case as so amended, will be the certificate of incorporation and by-laws of the surviving corporation, until thereafter amended in accordance with their terms or applicable law. In addition, as of the effective time, the directors of Merger Sub and our officers immediately prior to the effective time will be the directors and officers of the surviving corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the terms of the certificate of incorporation and by-laws of the surviving corporation.

Representations and Warranties

The merger agreement contains representations and warranties that the parties made to each other. The statements embodied in those representations and warranties were made for purposes of the contract between the parties and are subject to qualifications and limitations agreed by the parties in connection with negotiating the terms of that contract. Certain representations and warranties were made as of the date of the merger agreement (or such other date specified in the merger agreement), may be subject to contractual standards of materiality different from those generally applicable to stockholders or may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. In addition, the representations and warranties are qualified by information in a confidential disclosure letter that the parties have exchanged in connection with signing the merger agreement. While we do not believe that the disclosure letter contains information required by securities laws to be publicly disclosed that has not already been disclosed either in this proxy statement or our other filings with the SEC, the disclosure letter does contain information that modifies, quantifies and creates exceptions to the representations and warranties set forth in the merger agreement attached as Appendix A to this proxy statement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since they are modified in important part by the relevant section of the disclosure letter. The disclosure letter contains information that has been included in Nuveen Investments’ prior public disclosures as well as potential additional non-public information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, and such changes may or may not be fully reflected in our public disclosures. At the effective time, the representations and warranties contained in the merger agreement are only required to be true and correct subject to the materiality standards contained in the merger agreement,

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which may differ from what may be viewed as material by stockholders. The representations and warranties will not survive consummation of the merger and cannot be the basis for any claim under the merger agreement by any party thereto after consummation of the merger. The merger agreement should not be read alone, but should instead be read in conjunction with the other information regarding Nuveen Investments and the merger that is contained in this proxy statement as well as in the filings that Nuveen Investments makes and has made with the SEC.

The representations and warranties contained in the merger agreement may or may not have been accurate as of the date they were made and we make no assertion herein that they are accurate as of the date of this proxy statement.

The representations and warranties made by us to Parent and Merger Sub include representations and warranties relating to, among other things:

·       due organization, power, standing and other corporate matters;

·       authorization, execution, delivery and enforceability of the merger agreement and related matters;

·       the consents we are required to obtain and the regulatory filings we are required to make in connection with entry into the merger agreement and the consummation of the merger and related transactions;

·       absence of any conflict with, violation of, or default under, organizational documents, contracts, permits or laws as a result of execution, delivery and performance of the merger agreement and the consummation the merger and related transactions;

·       capitalization;

·       subsidiaries and other equity investments;

·       the accuracy and completeness of the information contained in the reports and financial statements that we have filed with the SEC since December 31, 2005, and the compliance of our SEC filings with applicable requirements of federal securities laws;

·       the preparation in accordance with generally accepted accounting principles in the United States (“GAAP”) of financial statements included or incorporated by reference in documents filed with the SEC since December 31, 2005;

·       compliance with laws and permits;

·       undisclosed liabilities;

·       the absence of certain changes or events since December 31, 2006;

·       the absence of litigation;

·       contracts;

·       tax matters, employee benefit plans and ERISA compliance;

·       intellectual property matters;

·       title to real property;

·       funds and assets under management;

·       absence of anti-takeover provisions;

·       the receipt of an opinion from our financial advisor;

·       the absence of undisclosed finder’s and similar fees in connection with the merger;

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·       interested party transactions; and

·       indebtedness.

The representations and warranties made by Parent and Merger Sub to us include representations and warranties relating to, among other things:

·       due organization, power, standing and other corporate matters;

·       authorization, execution, delivery and enforceability of the merger agreement and related matters;

·       the consents Parent and Merger Sub are required to obtain and the filings they are required to make in connection with entering into the merger agreement and the consummation of the merger and related transactions;

·       the absence of any conflict with, violation of, or default under, organizational documents, permits and laws as a result of execution, delivery and performance of the merger agreement and the consummation of the merger and related transactions;

·       sufficiency and effectiveness of, and no default under, the financing commitments and absence of undisclosed conditions with respect thereto;

·       conduct of business of Merger Sub;

·       solvency;

·       guarantees; and

·       absence of understandings or arrangements between our management or directors, on the one hand, and Parent, Merger Sub or any of its affiliates, on the other hand.

Many of our representations and warranties are qualified by a material adverse effect standard. For purposes of the merger agreement, “material adverse effect” on us means any fact, event, circumstance, development, change, occurrence or effect that, individually or in the aggregate with all other facts, events, circumstances, developments, changes, occurrences or effects (a) is materially adverse to the business, financial condition or results of operations of us and our subsidiaries, taken as a whole, other than any fact, event, circumstance, development, change, occurrence or effect to the extent relating to:

·       (1)

·        (A) the economic, business, financial or regulatory environment generally affecting the investment management industry to the extent such fact, event, circumstance, development, change, occurrence or effect does not have a materially disproportionate effect on us;

·        (B) an act of terrorism or an outbreak or escalation of hostilities or war (whether declared or not declared) or any natural disasters or any national or international calamity or crisis affecting the United States to the extent such fact, event, circumstance, development, change, occurrence or effect does not have a materially disproportionate effect on us;

·        (C) changes in applicable law or GAAP or the enforcement thereof after the date of the merger agreement to the extent such change or enforcement thereof does not have a materially disproportionate effect on us;

·        (D) any reduction in the level of assets under management or revenue run rate of us in and of itself (for the avoidance of doubt, any underlying cause for any such reduction shall not be excluded by this clause (D));

·        (E) our failure to meet analysts’ expectations, projections or forecasts or changes in the market price or trading volume of our securities, in each case, in and of itself (for the avoidance of

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doubt, any underlying cause for any such failure or changes shall not be excluded by this clause (E));

·        (F) any failure by us to take any action referred to below in the section entitled “—Conduct of Business Pending the Merger” due to Parent’s withholding of consent following written notice from us that the withholding of such consent would reasonably be expected to have a material adverse effect on us (determined in accordance in accordance with the balance of this definition); or

·        (G) any litigation arising from or relating to allegations of a breach of any fiduciary duty relating to the merger agreement or the transactions contemplated by the merger agreement; or

·       (2) the public announcement or pendency of the merger agreement or the performance of and compliance with the terms of the merger agreement, including losses or threatened losses of the relationships of us or any of our subsidiaries with any clients or the loss or departure of any officers or employees of us or any of our subsidiaries; or

(b)   prevents or materially delays or materially impairs our ability to consummate the merger by March 19, 2008.

The representations and warranties of each of the parties to the merger agreement will expire at the effective time.

Conduct of Business Pending the Merger

Until the effective time, except as expressly required by the merger agreement or otherwise required by applicable law, we are obligated to, and to cause each of our subsidiaries to, conduct our operations in all material respects in the ordinary course of business consistent with past practice and to use commercially reasonable efforts to maintain our business organizations intact and maintain our goodwill with customers and employees. In addition, until the effective time, except with the prior consent of Parent, as expressly contemplated by the merger agreement or otherwise required by applicable law, we may not, and will cause each of our subsidiaries not to, take any of the following actions:

·       propose or adopt any change to our organizational or governing documents;

·       make, declare, set aside, or pay any dividend or distribution on any shares of its capital stock; provided that we may continue to pay quarterly cash dividends not in excess of $0.24 per share during the third and fourth quarters of 2007 and the first quarter of 2008 (with record dates no earlier than September 4, 2007, December 3, 2007 and March 3, 2008, respectively); and provided further that we may not declare a quarterly dividend with respect to the quarter in which the effective time occurs unless the effective time is after the record date for such quarter (such restriction not applying to dividends or distributions paid by a subsidiary to us or any wholly owned subsidiary of ours in the ordinary course of business consistent with past practice);

·       (a) adjust, split, combine or reclassify or otherwise amend the terms of any capital stock, (b) except for specified exceptions, repurchase, redeem, purchase, acquire, encumber, pledge, dispose of or otherwise transfer any shares of capital stock, (c) except for specified exceptions, issue, grant, deliver or sell any shares of capital stock, (d) enter into any contract, understanding or arrangement with respect to the sale, voting, pledge, encumbrance, disposition, acquisition, transfer, registration or repurchase of capital stock or (e) register for sale, resale or other transfer any shares of our common stock under the Securities Act;

·       except for specified exceptions, (a) increase the compensation or benefits payable to any past or present directors, officers or employees or enter into any bonus or incentive arrangement with any

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past or present directors, officers or employees, (b) grant or pay any severance or termination pay to any past or present directors, officers or employees, (c) enter into any new employment or severance agreement with any past or present directors, officers or employees, (d) establish, adopt, enter into, amend or take any action to accelerate rights or fund benefits under any benefit plan or (e) contribute any funds to a “rabbi trust” or similar grantor trust;

·       except for specified exceptions, including sales of seed capital investments, sell, lease or otherwise dispose of any assets or securities with a value in excess of $10 million, including by merger, consolidation, asset sale or other business combination or by property transfer;

·       other than in the ordinary course of business consistent with past practice, mortgage or pledge any material assets or create, assume or suffer to exist any liens on any material assets;

·       except for specified exceptions, make any acquisitions, by purchase, merger, consolidation or other business combination or make any purchase of any property or assets from any person;

·       take any action that (a) would prevent any public fund from qualifying as a “regulated investment company” under Section 851 of the Internal Revenue Code (the “Code”) or (b) would be materially inconsistent with the prospectuses and other offering, advertising and marketing materials of any public fund then engaging in a public offering of its shares;

·       except for specified exceptions, incur, assume, guarantee or prepay any indebtedness for borrowed money or offer, place or arrange any issue of debt securities or commercial bank or other credit facilities;

·       except for specified exceptions, make any loans, advances or capital contributions to, or investments in, any other person;

·       authorize or make any capital expenditures, other than capital expenditures in the ordinary course of business consistent with past practice not in excess of $5 million in any one project or $12 million in the aggregate;

·       (a) change financial accounting policies or procedures, other than as required by law or generally accepted accounting principles (GAAP) or (b) write up, write down or write off the book value of any assets, other than in the ordinary course of business consistent with past practice or as may be required by law or GAAP;

·       except for specified exceptions, waive, release, assign, settle or compromise any legal action;

·       (a) settle or compromise any material tax audit, make or change any material tax election or file any material amendment to a material tax return, (b) except as required by applicable law, change any annual tax accounting period or adopt or change any material tax accounting method or (c) enter into any material closing agreement, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment;

·       enter into, amend in any material respect, waive any material right or obligation under or terminate any affiliate transaction;

·       except for specified exceptions, enter into, or amend or modify in any material respect, any material contract;

·       except for specified exceptions, hire, promote or terminate any executive officer; or

·       agree or commit to do any of the foregoing.

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Efforts to Consummate the Merger

Upon the terms and subject to the conditions set forth in the merger agreement and in accordance with applicable laws, each of the parties to the merger agreement has agreed to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to ensure that the conditions to the closing of the merger are satisfied and to consummate the transactions contemplated by the merger agreement as promptly as practicable, including, among other things:

·       obtaining all necessary actions or non-actions, waivers, consents and approvals from all applicable governmental entities and clients;

·       making all necessary registrations and filings and taking all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental entity and client;

·       within ten business days after the date of the merger agreement, making an appropriate filing with the U.S. Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice under the HSR Act with respect to the transactions contemplated by the merger agreement; and

·       subject to first having used its commercially reasonable efforts to negotiate a reasonable resolution of any objections underlying such lawsuit, defending and contesting any lawsuit challenging the merger agreement or the consummation of the transactions contemplated by the merger agreement, including seeking to have any stay or temporary restraining order entered by any governmental entity vacated or reversed.

Financing

Parent and Merger Sub have agreed to use their commercially reasonable efforts to arrange the debt financing as promptly as practicable on the terms and conditions described in the debt financing commitments. We have agreed to use commercially reasonable efforts to provide to Parent and Merger Sub all cooperation reasonably requested by Parent in connection with the financing, including, but not limited to, (1) assisting in preparation of materials and documents necessary for financing, (2) executing and delivering any pledge and security documents and other definitive financing documents and (3) furnishing financial statements and other such financial and other pertinent information regarding the company to Parent and its financing sources. See the section entitled “Adoption of the Merger Agreement—Financing” for a description of the financing arranged by Parent to fund the merger and related transactions.

Parent has agreed:

·       to use its commercially reasonable efforts to arrange the debt financing as promptly as practicable on the terms and conditions described in the debt financing commitments and to satisfy on a timely basis all conditions applicable to Parent in any definitive agreements entered into relating to the debt financing that are within its control; and

·       in the event that any portion of the debt financing becomes unavailable on the terms and conditions contemplated in the debt financing commitments, to use its commercially reasonable efforts to arrange alternative financing on terms no less favorable to Parent and the company (as determined in its reasonable judgment) than those contemplated by the debt financing commitments as promptly as practicable so long as such alternative financing (1) does not impose new, additional or modified conditions to the receipt of the financing than those set forth in the debt financing commitments or (2) will not be reasonably likely to cause any material delay in the satisfaction of the conditions to closing.

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Parent has agreed that neither it nor any of its affiliates may award more than one entity or person (or after 5:00 p.m., New York City time, on July 19, 2007 (the “go-shop period end time”), more than two entities or persons) any financial advisory role on an exclusive basis or engage more than one bank, investment bank or other provider of financing (or after the go-shop period end time, more than two banks, investment banks or other providers of financing) on an exclusive basis, in connection with the merger and the transactions contemplated by the merger agreement.

Marketing Period

Unless otherwise agreed by Parent and us, the parties to the merger agreement are required to consummate the merger no later than the third business day following the day on which the last of the conditions to the merger described under the section entitled “—Conditions to the Merger” below is satisfied or waived and the marketing period has elapsed. The purpose of the marketing period is to provide Parent and Merger Sub a reasonable and appropriate period of time during which they can market and place the permanent debt financing contemplated by the debt financing commitments for the purposes of financing the merger.

For purposes of the merger agreement, “marketing period” means the period of 25 consecutive calendar days throughout and at the end of which:

·       Parent and its financing sources have received certain financial information and consents and comfort letters from our independent registered public accounting firm; and

·       the conditions to the obligation of Parent and Merger Sub to close are satisfied and remain satisfied.

In addition, for purposes of calculating the 25 consecutive calendar day period, August 17, 2007 through September 3, 2007, November 21, 2007 through November 25, 2007 and December 20, 2007 through January 1, 2008 will not be counted or taken into account. Furthermore, if at any point during the 25 consecutive calendar day period we have not provided Parent with sufficiently current required financial information, a new 25 calendar day period will be required and will commence upon receipt by Parent of such sufficiently current financial information.

If all or any portion of the debt financing structured as privately offered notes has not been received by Parent or Merger Sub by the time that all of the conditions to the closing of the merger are satisfied or waived and the bridge facilities contemplated in the debt financing commitments are available on the terms and conditions set forth in the debt financing commitments, Parent and Merger Sub will borrow under such bridge financing and cause the proceeds of such bridge financing to be used to replace the privately offered notes financing no later than the last day of the marketing period or the date on which the conditions to the closing of the merger are satisfied or waived, whichever is later.

Conditions to the Merger

Conditions to Each Party’s Obligations.   Each party’s obligation to consummate the merger is subject to the satisfaction or waiver of the following conditions:

·       the merger agreement must have been adopted by the affirmative vote of the holders of a majority of the voting power of all outstanding shares of our common stock;

·       any applicable waiting period (and any extension thereof) under the HSR Act must have expired or been terminated and, if any foreign merger control law is applicable to the merger, the applicable governmental entity must have given all necessary approvals or consents, except for those approvals or consents the failure of which to obtain would not be material to us and our and subsidiaries, taken as a whole; and

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·       no governmental entity will have enacted or issued any law or order which are then in effect that enjoin or otherwise prohibit the consummation of the merger. No governmental entity will have commenced and not withdrawn any proceeding seeking to enjoin or otherwise prohibit the consummation of the merger.

Conditions to Parent’s and Merger Sub’s Obligations.   The obligation of Parent and Merger Sub to consummate the merger is subject to the satisfaction or waiver of the following additional conditions:

·       our representation and warranty with respect to the absence of a material adverse effect on us must be true  and correct as of the date of the merger agreement and the closing date as if made at and as of such time;

·       our representations and warranties with respect to our due organization and the due organization of our subsidiaries, our authorization to enter into the merger agreement, the enforceability of the merger agreement, our capital structure, the absence of anti-takeover provisions, the absence of undisclosed finder’s fees and our indebtedness and the indebtedness of our subsidiaries, must be true and correct in all material respects as if made at and as of the date of the merger agreement and the closing date (without giving effect to any qualification as to “materiality” or “material adverse effect” set forth in such representations and warranties);

·       all other representations and warranties made by us in the merger agreement must be true and correct as of the date of the merger agreement and the closing date as if made at and as of such time (without giving effect to any qualification as to “materiality” or “material adverse effect” set forth in such representations and warranties), except where the failure to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on us;

·       we must have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants that we are required to perform or comply with under the merger agreement at or prior to the effective time;

·       we must have delivered a certificate signed by one of our senior executive officers stating that the foregoing conditions have been satisfied; and

·       the revenue run rate of us and our subsidiaries as of the closing date must be at least 80% of the revenue run rate of us and our subsidiaries as of the base date. In order to satisfy this condition, we will need to obtain consents to the merger from our non-public fund clients, our public fund clients and the shareholders, of our public fund clients. If any of our clients or, in the case of our public fund clients, their shareholders do not consent to the merger on or prior to the closing date, our revenue run rate as of the closing date will exclude the revenues we generate from such clients for purposes of determining whether this condition is satisfied.

The “revenue run rate” of us and our subsidiaries means the aggregate annualized investment advisory and sub-advisory fees computed primarily by reference to assets under management that are payable to us or our affiliates (including our subsidiaries) in respect of all client accounts as to which we provide any of the foregoing services, determined by multiplying the adjusted assets under management of us and our subsidiaries for each such account by the applicable annual fee rate for such account.

The “adjusted assets under management” of us and our subsidiaries means the amount of assets under management as of May 31, 2007 (or, in the case of specified funds, the last date prior to the date of the merger agreement for which the amount of assets under management was available) adjusted:

·       to reflect net cash flows (additions and withdrawals and, with respect to public funds, exclusive of dividends or distributions or reinvestment of dividends or distributions), new accounts and

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terminated accounts or accounts for which us or any of our subsidiaries has received a notification of termination that has not been withdrawn from and after the base date through the last business day of the most recently completed month (or, in the case of specified funds, the last business day of either the next to last most recently completed month or the most recently completed fiscal quarter);

·       to exclude any increase or decrease in assets under management due to market appreciation or depreciation or currency fluctuations from and after the base date; and

·       to exclude any client accounts that require a public fund consent or a non-public fund consent and with respect to which the company or the applicable subsidiary of the company shall not have obtained a public fund consent or non-public fund consent, as the case may be.

The “base date” means May 31, 2007 (or, in the case of specified funds, the last date prior to the date of the merger agreement for which the amount of assets under management was available).

Conditions to Our Obligations.   Our obligation to consummate the merger is subject to the satisfaction or waiver of the following additional conditions:

·       the representations and warranties made by Parent and Merger Sub in the merger agreement must be true and correct as of the closing date as if made at and as of such time, except to the extent the facts or matters causing the failure of such representations and warranties to be so true and correct (without giving effect to any qualification as to “materiality” or “material adverse effect” set forth in such representations and warranties), would not reasonably be expected to, individually or in the aggregate, materially adversely affect Parent’s or Merger Sub’s ability to consummate the merger by March 19, 2008;

·       Parent and Merger Sub must have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be perform by them under the merger agreement at or prior to the effective time; and

·       Parent and Merger Sub must have delivered a certificate signed by a senior executive officer of Parent stating that the foregoing conditions have been satisfied.

Restrictions on Solicitations of Other Offers; Change in Recommendation and Termination of the Merger Agreement

The merger agreement provides that, until the go-shop period end time, we were permitted to:

·       initiate, solicit and encourage any takeover proposal (including by way of providing non-public information), provided that we had to promptly provide to Parent and Merger Sub any non-public information concerning us or our subsidiaries that was provided to any person given such access which was not previously provided to Parent and Merger Sub; and

·       enter into and maintain discussions or negotiations concerning a takeover proposal or otherwise cooperate with or assist or participate in, or facilitate any such discussions or negotiations or the making of any takeover proposal.

We did not receive any takeover proposals prior to the go-shop period end time.

From and after the go-shop period end time, we have agreed not to:

·       initiate, solicit or encourage (including by way of providing information) the submission of any inquiries, proposals or offers that constitute or may reasonably be expected to lead to any takeover proposal or engage in any discussions or negotiations with respect thereto or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, offers, discussions or negotiations; or

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·       approve or recommend, or propose to approve or recommend, any takeover proposal, change the recommendation of the board of directors that the stockholders adopt the merger agreement or enter into any merger agreement, letter of intent, agreement in principle, purchase agreement, option agreement or other similar agreement providing for or relating to any takeover proposal or enter into any agreement or agreement in principle requiring us to abandon, terminate or fail to consummate the transactions contemplated by the merger agreement or breach our obligations under the merger agreement or propose or agree to do any of the foregoing.

In addition, from and after the go-shop period end time, we have agreed to cease and terminate with all persons any solicitation, encouragement, discussions or negotiations existing at such time.

Notwithstanding the aforementioned restrictions, at any time prior to the adoption of the merger agreement by our stockholders, we are permitted to engage in discussions or negotiations with, or furnish information to, any party to the extent that we receive from such party a takeover proposal that:

·       our board of directors determines in good faith is bona fide;

·       our board of directors (acting through the special committee if such committee still exists) determines in good faith, after consultation with our financial advisors and outside legal counsel, constitutes or would reasonably be expected to result in a superior proposal; and

·       was not a result of our or any of our representatives’ intentional breach of the restrictions regarding soliciting takeover proposals described above.

In such cases, we (a) will not, and will not allow our representatives to, disclose any non-public information to such person without entering into an agreement that contains confidentiality provisions that are no less favorable in the aggregate to us than those contained in a confidentiality agreement we have entered into with Madison Dearborn in connection with the merger and (b) will promptly provide to Parent and Merger Sub any non-public information concerning us or our subsidiaries provided to such other person that was not previously provided to Parent and Merger Sub.

In addition, notwithstanding the aforementioned restrictions, at any time prior to the adoption of the merger agreement by our stockholders, in response to a bona fide written takeover proposal received by us, our board of directors may withdraw, modify or qualify in a manner adverse to Parent or Merger Sub its recommendation that its stockholders adopt the merger agreement and may cause us to terminate the merger agreement in order to enter into a definitive agreement in respect of such takeover proposal if:

·       our board of directors (acting through the special committee if such committee still exists) determines in good faith, after consultation with our financial advisors and outside legal counsel, that such takeover proposal constitutes a superior proposal;

·       our board of directors (acting through the special committee if such committee still exists) determines in good faith, after consultation with our financial advisors and outside legal counsel, that failing to take such action would be inconsistent with its fiduciary duties under applicable law; and

·       such takeover proposal was not a result of our or any of our representatives intentional breach of the restrictions regarding soliciting takeover proposals described above;

except that our board of directors may not withdraw, modify or qualify in a manner adverse to Parent or Merger Sub its recommendation to our stockholders or cause us to terminate the merger agreement unless (a) if the basis for such withdrawal, modification or qualification is a superior proposal and (b) we have complied with the actions described in the two bullet points below:

·       we have provided prior written notice to Parent, at least three days in advance (the “notice period”), of our board of directors’ intention to withdraw, modify or qualify its recommendation to

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our stockholders or to cause us to terminate the merger agreement, which notice will specify the material terms and conditions of such superior proposal (including the identity of the person making such superior proposal) and we have provided to Parent a copy of the relevant proposed transaction agreements with the person making such superior proposal and other material documents, including the alternative acquisition agreement. If there are any material revisions to such superior proposal, we are required to deliver a new written notice to Parent (except that the notice period will be 24 hours) and again comply with the provisions of this bullet point.

·       prior to our board of directors withdrawing, modifying or qualifying its recommendation to our stockholders or causing the company to terminate the merger agreement, we have, during the notice period, negotiated with Parent in good faith to make such adjustments in the terms of and conditions of the merger agreement so that such superior proposal ceases to constitute a superior proposal.

Finally, notwithstanding the aforementioned restrictions, at any time prior to the adoption of the merger agreement by our stockholders, in the absence of a takeover proposal, our board of directors may withdraw, modify or qualify in a manner adverse to Parent or Merger Sub its recommendation that our stockholders adopt the merger agreement if our board of directors (acting through the special committee if such committee still exists) determines in good faith, after consultation with our financial advisors and outside legal counsel, that failing to take such action would be inconsistent with its fiduciary duties under applicable law.

We may not terminate the merger agreement as a result of a superior proposal in accordance with the foregoing procedures unless we first pay the $200 million termination fee as described below under the section entitled “—Reimbursement of Expenses; Termination Fees” and, simultaneously with terminating the merger agreement, we enter into an acquisition agreement relating to such superior proposal.

From and after the go-shop period end time, we are required to promptly (but in any event within 48 hours) notify Parent if we receive from any person (a) any takeover proposal or any indication that such person is considering making a takeover proposal, (b) any request for non-public information relating to us or our subsidiaries (other than requests for information in the ordinary course of business and unrelated to a takeover proposal) or (c) any inquiry or request for discussions or negotiations regarding a takeover proposal. From that time, we are required to promptly (but in any event within 48 hours) notify Parent of the identity of such person and provide to Parent a copy of such takeover proposal (including any material modification to any takeover proposal), and to keep Parent reasonably informed on a prompt basis (and in any event within 48 hours) of the status of any such takeover proposal (including the material terms and conditions thereof and of any modification thereto).

A “takeover proposal” means any proposal or offer from any person or group of persons (other than Parent and certain of its affiliates) relating to, in a single transaction or a series of related transactions, any direct or indirect acquisition or purchase of (1) a business or division (or more than one of them) that in the aggregate constitutes 15% or more of the net revenues, net income or assets of the company and its subsidiaries, taken as a whole, (2) 15% or more of the equity interests in the company (by vote or value), (3) any tender offer, self tender offer or exchange offer that if consummated would result in any person or group of persons beneficially owning 15% or more of the equity interests (by vote or value) in the company or (4) any merger, reorganization, consolidation, share exchange, business combin­ation, recapitalization, liquidation, dissolution or similar transaction involving the company (or any subsidiary of the company whose business constitutes 15% or more of the net revenues, net income or assets of the company and its subsidiaries, taken as a whole).

A “superior proposal” means any bona fide written takeover proposal (A) that our board of directors (acting through the special committee if such committee still exists) determines in its good faith judgment (following consultation with financial advisors and outside legal counsel) to be more favorable from a

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financial perspective (taking into account (1) any legal, financial, regulatory and other aspects of such takeover proposal and the merger and other transactions contemplated by the merger agreement deemed relevant by our board of directors (or the special committee, as applicable) and (2) the anticipated timing, conditions and prospects for completion of such takeover proposal) to our stockholders than the merger and the other transactions contemplated by the merger agreement (taking into account all of the terms of any proposal by Parent to amend or modify the terms of the merger and the other transactions contemplated by the merger agreement), except that the reference to “15%” in the definition of “takeover proposal” shall be deemed to be a reference to “50%” and (B) for which financing, if a cash transaction (whether in whole or in part), is then fully committed.

Termination of the Merger Agreement

The merger agreement may be terminated:

·       at any time prior to the effective time by mutual written consent of us and Parent;

·       at any time prior to the effective time by either us or Parent if:

·        the merger is not consummated on or before March 19, 2008;

·        the merger agreement has been submitted to our stockholders for adoption at the special stockholders’ meeting called for such purpose and the requisite stockholder vote is not obtained at such meeting (including any adjournment or postponement thereof); or

·        if any law or governmental entity prohibits consummation of the merger or if any order restrains, enjoins or otherwise prohibits consummation of the merger, and such order has become final and non-appealable;

provided that the right to terminate the merger agreement in accordance with the foregoing is not available to any party whose material breach of any of its obligations under the merger agreement was a principal cause of, or resulted in, the failure of a condition to the merger.

·       at any time prior to the effective time by Parent if:

·        (a) our board of directors (or the special committee) withdraws, modifies or qualifies in a manner adverse to Parent and the Merger Sub its recommendation that our stockholders adopt the merger agreement, (b) our board of directors or the special committee approves, endorses or recommends any takeover proposal (other than the merger), (c) we fail to include the recommendation of the board of directors to the company’s stockholders in respect of the merger in this proxy statement or (d) we or our board of directors (or the special committee) publicly announces its intention to do any of the foregoing; or

·        a breach by the company of any representation, warranty, covenant or agreement in the merger agreement that is incapable of being cured by March 19, 2008 occurs that would give rise to the failure of certain conditions to closing to be satisfied (unless Parent or Merger Sub is then in material breach of the merger agreement);

·       by us (acting through the special committee if then in existence) if:

·        at any time prior to the effective time, a breach by Parent or Merger Sub of any representation, warranty, covenant or agreement in the merger agreement that is incapable of being cured by March 19, 2008 occurs that would prevent Parent or Merger Sub from consummating the transactions contemplated by the merger agreement (unless the company is then in material breach of the merger agreement);