Exhibit g.2
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 25th day of October 2004 by and between Nuveen
Institutional Advisory Corp., a Delaware corporation and a federally registered
investment adviser ("Manager"), and Gateway Investment Advisers, L.P., a
Delaware limited partnership and a federally registered investment adviser
("Sub-Adviser").
WHEREAS, Manager serves as the investment manager for the Nuveen Equity
Premium Income Fund (the "Fund"), a closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940 Act")
pursuant to an Investment Management Agreement between Manager and the Fund (as
such agreement may be modified from time to time, the "Management Agreement");
and
WHEREAS, Manager desires to retain Sub-Adviser to furnish investment
advisory services for a certain designated portion of the Fund's investment
portfolio, upon the terms and conditions hereafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. Manager hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Fund for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointment
and agrees to furnish the services herein set forth for the compensation
herein provided.
2. Services to be Performed. Subject always to the supervision of Fund's
Board of Trustees and the Manager, Sub-Adviser will furnish an
investment program in respect of, make investment decisions for, and
place all orders for the purchase and sale of securities for the portion
of the Fund's investment portfolio allocated by Manager to Sub-Adviser,
all on behalf of the Fund and as described in the Fund's initial
registration statement on Form N-2 as declared effective by the
Securities and Exchange Commission, consistent with the investment
objectives and restrictions of the Fund described therein and as they
may subsequently be changed by the Fund's Board of Trustees and publicly
described and as the Sub-Adviser is notified of such changes. In the
performance of its duties, Sub-Adviser will satisfy its fiduciary duties
to the Fund, will monitor the Fund's investments in securities selected
for the Fund by the Sub-Adviser hereunder, and will comply with the
provisions of the Fund's Declaration of Trust and By-laws, as amended
from time to time, and the investment objectives, policies and
restrictions of the Fund, to the extent the Sub-Adviser has been
notified of such objectives, policies and restrictions. Manager will
provide Sub-Adviser with current copies of the Fund's Declaration of
Trust, By-laws, prospectus and any amendments thereto, and any written
objectives, policies, procedures or limitations not appearing therein as
they may be relevant to Sub-Adviser's performance under this Agreement.
Sub-Adviser and Manager will each make its officers and employees
available to the other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other regarding
the investment affairs of the Fund. Sub-Adviser will report to the Board
of Trustees and to Manager with respect to the implementation of such
program.
Manager shall arrange for the Fund's custodian to forward to Sub-Adviser
or Sub-Adviser's designated proxy agent on a timely basis copies of all
proxies and shareholder communications relating to securities in which
assets of the Fund's investment portfolio allocated by Manager to
Sub-Adviser are invested. The Sub-Adviser will vote all such proxies
delivered to Sub-Adviser or Sub-Adviser's designated proxy agent
consistent with the Sub-Adviser's proxy voting guidelines and the best
interests of the Fund. The Sub-Adviser will maintain appropriate records
detailing its voting of proxies on behalf of the Fund and upon
reasonable request will provide a report setting forth the proposals
voted on and how the Fund's shares were voted, including the name of the
corresponding issuers.
Sub-Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Fund,
and is directed to use its commercially reasonable efforts to obtain
best execution, which includes most favorable net results and execution
of the Fund's orders, taking into account all appropriate factors,
including price, dealer spread or commission, size and difficulty of the
transaction and research or other services provided. It is understood
that the Sub-Adviser will not be deemed to have acted unlawfully, or to
have breached a fiduciary duty to the Fund, or be in breach of any
obligation owing to the Fund under this Agreement, or otherwise, solely
by reason of its having caused the Fund to pay a member of a securities
exchange, a broker or a dealer a commission for effecting a securities
transaction for the Fund in excess of the amount of commission another
member of an exchange, broker or dealer would have charged if the
Sub-Adviser determined in good faith that the commission paid was
reasonable in relation to the brokerage or research services provided by
such member, broker or dealer, viewed in terms of that particular
transaction or the Sub-Adviser's overall responsibilities with respect
to its accounts, including the Fund, as to which it exercises investment
discretion. In addition, if in the judgment of the Sub-Adviser, the Fund
would be benefited by supplemental services, the Sub-Adviser is
authorized to pay spreads or commissions to brokers or dealers
furnishing such services in excess of spreads or commissions that
another broker or dealer may charge for the same transaction, provided
that the Sub-Adviser determined in good faith that the commission or
spread paid was reasonable in relation to the services provided. The
Sub-Adviser will properly communicate to the officers and trustees of
the Fund such information relating to transactions for the Fund as they
may reasonably request. In no instance will portfolio securities be
purchased from or sold to the Manager, Sub-Adviser or any affiliated
person of either the Fund, Manager, or Sub-Adviser, except as may be
permitted under the 1940 Act.
Sub-Adviser further agrees that it:
a) will use the degree of skill and care in providing such services
as it uses in providing services to fiduciary accounts for which
it has investment responsibilities;
b) will conform to all applicable Rules and Regulations of the
Securities and Exchange Commission in all material respects and
in addition will conduct its activities under this Agreement in
accordance with any applicable regulations of any governmental
authority pertaining to its investment advisory activities;
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c) will report regularly to Manager and to the Board of Trustees of
the Fund and will make appropriate persons available for the
purpose of reviewing with representatives of Manager and the
Board of Trustees on a regular basis at reasonable times the
management of the Fund, including, without limitation, review of
the general investment strategies of the Fund with respect to
the portion of the Fund's portfolio allocated to the
Sub-Adviser, the performance of the Fund's investment portfolio
allocated to the Sub-Adviser in relation to standard industry
indices and general conditions affecting the marketplace and
will provide various other reports from time to time as
reasonably requested by Manager;
d) will monitor the pricing of option contracts each day on which
the Fund calculates a net asset value, to determine whether
market movements between 4:00 p.m. and 4:15 p.m. indicate that
it is necessary for the Fund to determine a fair value of such
option contracts and will promptly notify the Manager of such
evaluation provided that, this provision is not intended to
limit the Sub-Adviser's responsibility to promptly notify the
Manager of market or security-specific events that have come to
the attention of the Sub-Adviser, that could call into question
the validity of the pricing of one or more securities in the
Fund's portfolio; and
e) will prepare such books and records with respect to the Fund's
securities transactions for the portion of the Fund's investment
portfolio allocated to the Sub-Adviser as reasonably requested
by the Manager and will furnish Manager and Fund's Board of
Trustees such periodic and special reports as the Board or
Manager may reasonably request.
f) The Sub-Adviser is prohibited from consulting with any other
sub-adviser of the Fund or any other sub-adviser to a fund under
common control with the Fund concerning transactions of the Fund
in securities or other assets.
3. Representations of Manager. Manager hereby represents that it:
a) is registered as an investment adviser under the Advisers Act
and will continue to be so registered for so long as this
Agreement remains in effect;
b) is not prohibited by the 1940 Act or the Advisers Act from
performing investment advisory services to the Fund;
c) has met, and will continue to meet for so long as this Agreement
remains in effect, any applicable federal or state requirements,
or the applicable requirements of any regulatory or industry
self-regulatory agency, or the applicable licensing requirements
for the use of any trademarks necessary to be met in order to
perform investment advisory services for the Fund; and
d) will immediately notify the Sub-Adviser of the occurrence of any
event that would disqualify the Manager from serving as an
investment adviser of an investment company pursuant to Section
9 (a) of the 1940 Act or otherwise.
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4. Representations of Sub-Adviser. Sub-Adviser hereby represents that it:
a) is registered as an investment adviser under the Advisers Act
and will continue to be so registered for so long as this
Agreement remains in effect;
b) is not prohibited by the 1940 Act or the Advisers Act from
performing investment advisory services to the Fund;
c) has met, and will continue to meet for so long as this Agreement
remains in effect, any applicable federal or state requirements,
or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform
investment advisory services for the Fund; and
d) will immediately notify the Manager of the occurrence of any
event that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section
9 (a) of the 1940 Act or otherwise.
5. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commissions and other related expenses) purchased for the Fund.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, Manager will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a portfolio
management fee equal to the portion specified below of the investment
management fee payable by the Fund to the Manager, pursuant to the
Management Agreement, with respect to the Sub-Adviser's allocation of
Fund net assets (including net assets attributable to FundPreferred
Shares and the principal amount of any borrowings), as the net amount of
such fee is reduced by the obligation of Manager to reimburse certain
fees and expenses to the Fund pursuant to an Expense Reimbursement
Agreement of even date herewith by and between the Fund and the Manager,
as such agreement may be modified from time to time:
PERCENTAGE OF NET
DAILY NET ASSETS MANAGEMENT FEE
Up to $200 million 55.0%
$200 million to $300 million 52.5%
$300 million and over 50.0%
From the date hereof until August 1, 2006, notwithstanding the above,
the portfolio management fee paid to the Sub-Adviser by the Manager
shall be subject to a minimum fee calculated at an annual rate of 0.315%
of the Sub-Adviser's allocation of Fund net assets (including net assets
attributable to FundPreferred Shares and the principal amount of any
borrowings) up to $500 million.
The portfolio management fee shall accrue on each calendar day, and
shall be payable monthly on the first business day of the next
succeeding calendar month. The daily fee accrual shall be computed by
multiplying the fraction of one divided by the number of days in the
calendar year by the applicable annual rate of fee, and multiplying this
product by the net assets of the Fund allocated to the Sub-Advisor,
determined in the manner established by the Fund's Board of Trustees, as
of the close of business on the last preceding business day on which the
Fund's net asset value was determined.
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For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the
number of days that the Agreement is in effect during the month and
year, respectively.
Manager shall not agree to amend the financial terms of the Expense
Reimbursement Agreement or the Management Agreement to the detriment of
the Sub-Adviser by operation of this Section 6 without the express
written consent of the Sub-Adviser.
7. Services to Others. Manager understands, and has advised Fund's Board of
Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to other investment portfolios including investment
companies, provided that whenever the Fund and one or more other
investment advisory clients of Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be
allocated in a manner believed by Sub-Adviser to be equitable to each.
Manager recognizes, and has advised Fund's Board of Trustees, that in
some cases this procedure may adversely affect the size of the position
that the Fund may obtain in a particular security. It is further agreed
that, on occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other
accounts, it may, to the extent permitted by applicable law, but will
not be obligated to, aggregate the securities to be so sold or purchased
for the Fund with those to be sold or purchased for other accounts in
order to obtain favorable execution and lower brokerage commissions. In
addition, Manager understands, and has advised Fund's Board of Trustees,
that the persons employed by Sub-Adviser to assist in Sub-Adviser's
duties under this Agreement will not devote their full such efforts and
service to the Fund. It is also agreed that the Sub-Adviser may use any
supplemental research obtained for the benefit of the Fund in providing
investment advice to its other investment advisory accounts or for
managing its own accounts.
8. Limitation of Liability. The Sub-Adviser shall not be liable for, and
Manager will not take any action against the Sub-Adviser to hold
Sub-Adviser liable for, any error of judgment or mistake of law or for
any loss suffered by the Fund (including, without limitation, by reason
of the purchase, sale or retention of any security) in connection with
the performance of the Sub-Adviser's duties under this Agreement, except
for a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Adviser in the performance of its
duties under this Agreement, or by reason of its reckless disregard of
its obligations and duties under this Agreement.
9. Term; Termination; Amendment. This Agreement shall become effective with
respect to the Fund on the same date as the Management Agreement between
the Fund and the Manager becomes effective, provided that it has been
approved by a vote of a majority of the outstanding voting securities of
the Fund in accordance with the requirements of the 1940 Act, and shall
remain in full force until August 1, 2006 unless sooner terminated as
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hereinafter provided. This Agreement shall continue in force from year
to year thereafter with respect to the Fund, but only as long as such
continuance is specifically approved for the Fund at least annually in
the manner required by the 1940 Act and the rules and regulations
thereunder; provided, however, that if the continuation of this
Agreement is not approved for the Fund, the Sub-Adviser may continue to
serve in such capacity for the Fund in the manner and to the extent
permitted by the 1940 Act and the rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any
penalty by the Manager on no less than sixty (60) days' written notice
to the Sub-Adviser. This Agreement may be terminated at any time without
the payment of any penalty by the Sub-Adviser on no less than sixty (60)
days' written notice to the Manager. This Agreement may also be
terminated by the Fund with respect to the Fund by action of the Board
of Trustees or by a vote of a majority of the outstanding voting
securities of such Fund on no less than sixty (60) days' written notice
to the Sub-Adviser by the Fund.
This Agreement may be terminated with respect to the Fund at any time
without the payment of any penalty by the Manager, the Board of Trustees
or by vote of a majority of the outstanding voting securities of the
Fund in the event that it shall have been established by a court of
competent jurisdiction that the Sub-Adviser or any officer or director
of the Sub-Adviser has taken any action that results in a breach of the
representations of the Sub-Adviser set forth herein.
The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the
rules and regulations thereunder.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the
compensation described in Section 6 earned prior to the effective date
of such termination. This Agreement shall automatically terminate in the
event the Management Agreement between the Manager and the Fund is
terminated, assigned or not renewed.
10. Gateway Name. Manager shall furnish to Sub-Adviser all prospectuses,
proxy statements, reports to shareholders, sales literature or other
material prepared for distribution which refers to the Sub-Adviser by
name prior to the use thereof. Manager shall not use any such materials
if the Sub-Adviser reasonably objects to such use. This paragraph shall
survive the termination of this Agreement.
11. Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party
If to the Manager: If to the Sub-Adviser:
Nuveen Institutional Advisory Corp. Gateway Investment Advisers, L.P.
000 Xxxx Xxxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000 0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx Attention: Xxxxxxxx Xxxxxx
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With a copy to:
Nuveen Investments, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or such address as each such party may designate for the receipt of such
notice.
12. Limitations on Liability. All parties hereto are expressly put on notice
of the Fund's Agreement and Declaration of Trust and all amendments
thereto, a copy of which is on file with the Secretary of the
Commonwealth of Massachusetts, and the limitation of shareholder and
trustee liability contained therein. The obligations of the Fund entered
in the name or on behalf thereof by any of the Trustees, representatives
or agents are made not individually but only in such capacities and are
not binding upon any of the Trustees, officers, or shareholders of the
Fund individually but are binding upon only the assets and property of
the Fund, and persons dealing with the Fund must look solely to the
assets of the Fund and those assets belonging to the subject Fund, for
the enforcement of any claims.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby. This Agreement will be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors.
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14. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 9 hereof which shall be
construed in accordance with the laws of Massachusetts) the laws of the
State of Illinois.
IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this Agreement
to be executed as of the day and year first above written.
NUVEEN INSTITUTIONAL ADVISORY GATEWAY INVESTMENT ADVISERS,
CORP., a Delaware corporation L.P., a Delaware limited partnership
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx
----------------------------- -----------------------------
Title: Managing Director Title: Chairman,
Gateway Investment Advisers, Inc.,
General Partner
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