SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Section 240.14a-12

NUVEEN DIVERSIFIED DIVIDEND AND INCOME FUND
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

[X] No fee required.

[ ] 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:

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(2) Aggregate number of securities to which transaction applies:

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(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):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
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[ ] 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:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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MARCH 24, 2004

IMPORTANT NOTICE
TO FUND SHAREHOLDERS
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the issues to be voted on.

Q. WHY AM I RECEIVING THIS PROXY STATEMENT?

A. Nuveen Institutional Advisory Corp. ("NIAC") serves as the investment
adviser of the Nuveen Diversified Dividend and Income Fund (the "Fund"). NIAC
entered into an Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement")
with Security Capital Research & Management Incorporated (the "Sub-Adviser") for
the Fund pursuant to which the Sub-Adviser was retained to furnish investment
advisory services to the Fund. Until November 24, 2003, the Sub-Adviser was a
wholly-owned subsidiary of GECIA Capital Holdings, Inc. ("GECIA"). On November
24, 2003, GECIA sold all of the capital stock of the Sub-Adviser to Banc One
Investment Advisors Corporation ("Banc One") (the "Sale").

The Sub-Advisory Agreement was terminated as a result of the Sale. Currently, an
interim sub-advisory agreement approved by the Fund's Board of Trustees (the
"Board," and each Trustee a "Board Member") allows the Sub-Adviser to continue
to serve as sub-adviser for the Fund for a limited period of time. In order for
the Sub-Adviser to continue to serve as sub-adviser of the Fund after
termination of the interim sub-advisory agreement, the Fund's shareholders must
approve a new sub-advisory agreement. The enclosed Proxy Statement gives you
additional information on Banc One, the interim sub-advisory agreement and the
proposed new sub-advisory agreement, as well as certain other matters. The
Trustees of the Fund, including those who are not affiliated with NIAC or the
Sub-Adviser, recommend that you vote FOR the approval of the new sub-advisory
agreement for the Fund.

In addition, closed-end investment companies listed on a stock exchange, such as
the Fund, are required to hold annual meetings to approve the election of Board
Members. The Fund is seeking shareholder approval to elect Board Members to
serve on the Board. The Trustees of the Fund unanimously recommend that you vote
FOR the nominees for the Board.

Please refer to the Proxy Statement for a detailed explanation of each item.

Q. WHY IS A VOTE ON THE PROPOSED NEW SUB-ADVISORY AGREEMENT REQUIRED?

A. The Investment Company Act of 1940, which regulates investment companies in
the United States, such as the Fund, generally requires a shareholder vote to
approve a new investment management or sub-advisory agreement whenever there is
a "change in control" of a fund's investment adviser or sub-adviser. The Sale of
the Sub-Adviser to Banc One resulted in such a change in control. As a result,
shareholder approval of a new sub-advisory agreement is necessary to permit the
Sub-Adviser to continue to serve the Fund after termination of the interim
sub-advisory agreement.

Q. WHAT WILL HAPPEN IF SHAREHOLDERS DO NOT APPROVE THE NEW SUB-ADVISORY
AGREEMENT?

A. If the new sub-advisory agreement is not approved, the Fund's Board will
take such actions as it deems to be in the best interests of the Fund. This is
discussed in more detail in the Proxy Statement.

Q. HOW WILL THE SALE TO BANC ONE AFFECT ME AS A FUND SHAREHOLDER?

A. Your investment in the Fund did not change as a result of the Sale. You
still own the same shares in the Fund, and the value of your investment did not
change as a result of the Sale. The new sub-advisory agreement will still be
with the Sub-Adviser and the terms of the new sub-advisory agreement are
substantially identical to the terms of the original Sub-Advisory Agreement.

Q. WILL THE INVESTMENT MANAGEMENT AND SUB-ADVISORY FEE RATES BE THE SAME UPON
THE APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT?

A. Yes, the investment management and sub-advisory fee rates will remain the
same.

Q. WILL THE FUND PAY FOR THE PROXY SOLICITATION AND LEGAL COSTS ASSOCIATED WITH
THE APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT?

A. The Sub-Adviser has agreed to bear all costs associated with approval of the
Sub-Advisory Agreement. Accordingly, neither you nor your Fund will bear any
costs associated with the approval of the new sub-advisory agreement.

Q. HOW DO THE TRUSTEES OF THE FUND SUGGEST THAT I VOTE IN CONNECTION WITH THE
NEW SUB-ADVISORY AGREEMENT?

A. After careful consideration, the Board of Trustees of the Fund unanimously
recommends that you vote FOR the approval of the new sub-advisory agreement.

Q. HOW DO THE TRUSTEES OF THE FUND SUGGEST THAT I VOTE IN CONNECTION WITH THE
ELECTION OF TRUSTEES?

A. After careful consideration, the Board of Trustees of the Fund unanimously
recommends that you vote FOR the nominees for the Board.

Q. WILL MY VOTE MAKE A DIFFERENCE?

A. Your vote is needed to ensure that the proposals can be acted upon.
Additionally, your immediate response will help save on the costs of any future
solicitations for a shareholder vote. We encourage all shareholders to
participate in the governance of the Fund.

Q. WHO DO I CALL IF I HAVE QUESTIONS?

A. If you need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call your financial advisor. Alternatively, you
may call Nuveen at (800) 257-8787 weekdays from 8:00 a.m. to 6:00 p.m. Central
time.

Q. HOW DO I VOTE MY SHARES?

A. You can vote your shares by completing and signing the enclosed proxy card,
and mailing it in the enclosed postage-paid envelope. Alternatively, you may
vote by telephone by calling the toll-free number on the proxy card or by
computer by going to the Internet address provided on the proxy card and
following the recorded instructions, using your proxy card as a guide.

Q. WILL ANYONE CONTACT ME?

A. You may receive a call to verify that you received your proxy materials, to
answer any questions you may have about the proposals and to encourage you to
vote.

<Table>

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS - MARCH 24, 2004 333 West Wacker Drive
Chicago, Illinois 60606
(800) 257-8787
</Table>

NUVEEN DIVERSIFIED DIVIDEND AND INCOME FUND (JDD)

FEBRUARY 25, 2004

TO THE SHAREHOLDERS OF THE ABOVE FUND:

Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Nuveen Diversified Dividend and Income Fund (the "Fund"), a
Massachusetts business trust, will be held in the 31st floor conference room of
Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, on
Wednesday, March 24, 2004, at 10:00 a.m., Central time, for the following
purposes and to transact such other business, if any, as may properly come
before the Annual Meeting:

MATTERS TO BE VOTED ON BY SHAREHOLDERS:

1. To approve a new sub-advisory agreement between Security Capital Research
& Management Incorporated (the "Sub-Adviser") and Nuveen Institutional Advisory
Corp. ("NIAC"), the Fund's investment adviser, on behalf of the Fund.

2. To elect twelve (12) Members to the Board of Trustees (the "Board," and
each Trustee a "Board Member") of the Fund to serve until the next annual
meeting of shareholders and until their successors shall have been duly elected
and qualified:

a. ten (10) Board Members to be elected by the holders of common shares
and FundPreferred shares, voting together as a single class; and

b. two (2) Board Members to be elected by the holders of FundPreferred
shares only, voting separately as a single class.

3. To transact such other business as may properly come before the Annual
Meeting.

Shareholders of record at the close of business on January 30, 2004 are entitled
to notice of and to vote at the Annual Meeting.

ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IN ORDER TO
AVOID DELAY AND ADDITIONAL EXPENSE, AND TO ASSURE THAT YOUR SHARES ARE
REPRESENTED, PLEASE VOTE AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER YOU PLAN
TO ATTEND THE ANNUAL MEETING. YOU MAY VOTE BY MAIL, TELEPHONE OR OVER THE
INTERNET. TO VOTE BY MAIL, PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY
CARD. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. TO VOTE BY
TELEPHONE, PLEASE CALL THE TOLL-FREE NUMBER LOCATED ON YOUR PROXY CARD, AND
FOLLOW THE RECORDED INSTRUCTIONS, USING YOUR PROXY CARD AS A GUIDE. TO VOTE OVER
THE INTERNET, GO TO THE INTERNET ADDRESS PROVIDED ON YOUR PROXY CARD AND FOLLOW
THE RECORDED INSTRUCTIONS, USING YOUR PROXY CARD AS A GUIDE.

Jessica R. Droeger
Vice President and Secretary

<Table>

PROXY STATEMENT 333 West Wacker Drive
FEBRUARY 25, 2004 Chicago, Illinois 60606
(800) 257-8787
</Table>

NUVEEN DIVERSIFIED DIVIDEND AND
INCOME FUND (JDD)

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees (the "Board," and each Trustee a "Board Member") of Nuveen
Diversified Dividend and Income Fund (the "Fund"), a Massachusetts business
trust, of proxies to be voted at the Annual Meeting of Shareholders of the Fund
to be held on Wednesday, March 24, 2004 (the "Annual Meeting"), and at any and
all adjournments thereof.

On the matters coming before the Annual Meeting as to which a choice has been
specified by shareholders on the proxy, the shares will be voted accordingly. If
a proxy is returned and no choice is specified, the shares will be voted FOR the
approval of the new sub-advisory agreement and FOR the election of the nominees
as listed in this Proxy Statement. Shareholders who execute proxies may revoke
them at any time before they are voted by filing with the Fund a written notice
of revocation, by delivering a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.

This Proxy Statement is first being mailed to shareholders on or about February
25, 2004.

The following table indicates the matters on which shareholders are solicited:

<Table>
<Caption>
MATTER
- --------------------------------------------------------------

1. To approve a new sub-advisory agreement for the Fund.
2.a Election of ten (10) Board Members by holders of common
shares and FundPreferred shares, voting together as a
single class.
2.b Election of two (2) Board Members by FundPreferred
shares, voting as a separate class.
</Table>

A quorum of shareholders is required to take action at the Annual Meeting. A
majority of the shares entitled to vote at the Annual Meeting, represented in
person or by proxy, will constitute a quorum of shareholders at the Annual
Meeting, except that for the election of the two nominees to be elected by
holders of FundPreferred shares, 33 1/3% of the FundPreferred shares entitled to
vote and represented in person or by proxy will constitute a quorum. Votes cast
by proxy or in person at the Annual Meeting will be tabulated by the inspectors
of election appointed for the Annual Meeting. The inspectors of election will
determine whether or not a quorum is present at the Annual Meeting. The
inspectors of election will treat abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees, typically in "street name," as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power on a particular matter) as present for purposes of determining a
quorum.

For purposes of determining the approval of the new sub-advisory agreement,
abstentions and broker non-votes will be treated as shares voted against the
proposal. For purposes of determining the approval of the proposal to elect
nominees, abstentions and broker non-votes will have no effect on the election
of Board Members. The details of the proposals to be voted on by the
shareholders of the Fund and the vote required for approval of the proposals are
set forth under the description of the proposals below.

Shares of FundPreferred held in "street name" as to which voting instructions
have not been received from the beneficial owners or persons entitled to vote as
of one business day before the Annual Meeting, or, if adjourned, one business
day before the day to which the Annual Meeting is adjourned, and that would
otherwise be treated as "broker non-votes" may, pursuant to Rule 452 of the New
York Stock Exchange, be voted by the broker on the proposal in the same
proportion as the votes cast by all FundPreferred shareholders as a class who
have voted on the proposal or in the same proportion as the votes cast by all
FundPreferred shareholders of the Fund who have voted on that item. Rule 452
permits proportionate voting of FundPreferred with respect to a particular item
if, among other things, (i) a minimum of 30% of the shares of FundPreferred or
shares of a series of FundPreferred outstanding has been voted by the holders of
such shares with respect to such item and (ii) less than 10% of the shares of
FundPreferred or shares of a series of FundPreferred outstanding has been voted
by the holders of such shares against such item. For the purpose of meeting the
30% test, abstentions will be treated as shares "voted" and, for the purpose of
meeting the 10% test, abstentions will not be treated as shares "voted" against
the item.

Those persons who were shareholders of record at the close of business on
January 30, 2004 will be entitled to one vote for each share held. As of January
30, 2004, the Fund had 20,123,837 common shares of beneficial interest issued
and outstanding and 2,400 issued and outstanding FundPreferred shares, of each
Series T and Series W. The common shares of the Fund are listed on the New York
Stock Exchange.

1. APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT

BACKGROUND

Nuveen Institutional Advisory Corp ("NIAC" or the "Adviser") is the Fund's
investment adviser. NIAC entered into an Investment Sub-Advisory Agreement dated
July 30, 2003 with respect to the Fund (the "Original Sub-Advisory Agreement"),
with Security Capital Research & Management Incorporated (the "Sub-Adviser")
pursuant to which the Sub-Adviser was retained to furnish investment advisory
services to the Fund. Specifically, the Sub-Adviser is responsible for managing
the portion of equity securities strategy allocated to common stocks, preferred
securities and convertible securities issued by REITs. Until November 24, 2003,
the Sub-Adviser was a wholly-owned subsidiary of GECIA Capital Holdings, Inc.
("GECIA"). All of the outstanding common stock of GECIA is owned by General
Electric Capital Services, Inc.

The Original Sub-Advisory Agreement, as required by Section 15 of the Investment
Company Act of 1940, as amended (the "1940 Act"), provided for its automatic
termination in the event of its assignment. Any change in control of the
Sub-Adviser is deemed to be an assignment. On November 24, 2003, GECIA sold all
of the capital stock of the Sub-Adviser to Banc One Investment Advisors
Corporation ("Banc One") (the "Sale"). The consummation of the Sale

caused the Sub-Adviser to undergo a change in control and caused the automatic
termination of the Original Sub-Advisory Agreement, as required by the 1940 Act.

Investment advisory services to the Fund are provided by the Portfolio
Management Committee of the Sub-Adviser. The Sale did not result in any change
in the Portfolio Management Committee of the Sub-Adviser. Banc One, a registered
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), provides asset management to a broad spectrum of institutional
and individual clients including public entities, foundations, endowments,
corporate retirement plans and Taft-Hartley plans, as well as to One Group
Mutual Funds(R). Banc One is an indirect wholly-owned subsidiary of Bank One
Corporation ("Bank One Corp."), 1 Bank One Plaza, Chicago, Illinois 60670. Banc
One provides portfolio management, research and trading functions for asset
management clients. Banc One had over $186 billion in assets under management as
of December 31, 2003 and is headquartered at 1111 Polaris Parkway, Columbus,
Ohio 43271.

On January 14, 2004 Bank One Corp. and J.P. Morgan Chase & Co. ("J.P. Morgan")
announced that they have agreed to merge in a strategic business combination.
The proposed merger is subject to approval of shareholders of Bank One Corp. and
J.P. Morgan and approval of U.S. federal and state and foreign regulatory
authorities. The transaction is expected to occur in mid-2004. In the event that
the merger between Bank One Corp. and J.P. Morgan is deemed a change in control
of the Sub-Adviser, shareholder approval of a new subadvisory agreement will be
necessary.

On September 3, 2003, the Attorney General of the State of New York filed and
simultaneously settled a complaint (the "Complaint") against a hedge fund. The
Complaint alleged, among other things, that Banc One permitted the hedge fund to
engage in inappropriate market timing transactions with certain mutual funds
managed by Banc One. Since the filing of the Complaint, numerous class action
lawsuits have been filed in various jurisdictions alleging, among other things,
that Banc One violated various provisions of the federal securities laws, the
Advisers Act and the Racketeer Influenced and Corrupt Organizations Act.
Plaintiffs in these suits are seeking, among other things, injunctive and
declaratory relief, compensatory and punitive damages, disgorgement of profits
and the payment of attorneys' and experts' fees. Additional lawsuits presenting
allegations and requests for relief arising out of or in connection with the
foregoing matters, in addition to possible actions by federal regulators and
state officials, may be filed against Banc One and related parties in the
future. As a result of the Sale, the Sub-Adviser is now an affiliate of Banc
One.

On July 29, 2003, the Board approved NIAC entering into a new sub-advisory
agreement with the Sub-Adviser (the "New Sub-Advisory Agreement") with respect
to the Fund, subject to the consummation of the Sale and approval of the New
Sub-Advisory Agreement by the shareholders of the Fund. The New Sub-Advisory
Agreement is substantially identical to the Original Sub-Advisory Agreement. The
1940 Act requires that the New Sub-Advisory Agreement be approved by the Fund's
shareholders in order for it to become effective. As explained more fully below,
a majority of the Board Members of the Fund, including a majority of the Board
Members who are not parties to the Fund's investment management agreement with
NIAC, the Original Sub-Advisory Agreement or the New Sub-Advisory Agreement, or
who are not "interested persons" of the Fund, NIAC or the Sub-Adviser (the
"Independent Board Members"), recommends that the shareholders of the Fund
approve the

New Sub-Advisory Agreement between the Sub-Adviser and NIAC. The Sub-Adviser
does not anticipate that the Sale will have any adverse effect on the
performance of its obligations under the New Sub-Advisory Agreement. If
shareholders of the Fund approve the New Sub-Advisory Agreement, the New
Sub-Advisory Agreement will become effective on or about the date of the Annual
Meeting.

Approval of New Sub-Advisory Agreement. The Board met in person for the purpose
of considering whether it would be in the best interests of the Fund and its
shareholders to approve the New Sub-Advisory Agreement between the Sub-Adviser
and NIAC. At its meeting, and for reasons discussed below (see "The Board's
Considerations" below), the Board, including the Independent Board Members,
unanimously approved the New Sub-Advisory Agreement and recommended its approval
by shareholders in order to assure continuity of investment advisory services to
the Fund after the Sale. The form of the New Sub-Advisory Agreement is attached
hereto as Appendix A.

The terms of the New Sub-Advisory Agreement, including fees payable to the
Sub-Adviser by NIAC thereunder, are substantially identical to those of the
Original Sub-Advisory Agreement, except for the date of effectiveness. There is
no change in the fee rate payable by NIAC to the Sub-Adviser, nor is there a
change in fee rate payable by the Fund to NIAC under its investment management
agreement with NIAC. Certain of the terms of the Original Sub-Advisory Agreement
are described below. If approved by shareholders of the Fund, the New
Sub-Advisory Agreement will expire on August 1, 2005, unless continued. The New
Sub-Advisory Agreement will continue in effect from year to year thereafter if
such continuance is approved for the Fund at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder. In the event
that the shareholders of the Fund do not approve the New Sub-Advisory Agreement,
the Interim Sub-Advisory Agreement (as described below) will remain in effect
until expiration or termination and the Board will take such action as it deems
to be in the best interests of the Fund and its shareholders.

The Original Sub-Advisory Agreement. The Original Sub-Advisory Agreement was
approved by the initial shareholder of the Fund on September 24, 2003. The
Original Sub-Advisory Agreement provided that, subject always to the supervision
of the Fund's Board and NIAC, the Sub-Adviser would 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 to the Sub-Adviser for the Fund, on behalf of the Fund. In
the performance of its duties, the Sub-Adviser was required to satisfy its
fiduciary duties to the Fund, monitor the Fund's investments, and comply with
the provisions of the Fund's Declaration of Trust and By-laws, as amended from
time to time, and the stated investment objectives, policies and restrictions of
the Fund. The Sub-Adviser was also required to report to the Board and to NIAC
with respect to the implementation of such program, prepare necessary books and
records and make persons available to communicate with the Board and NIAC. In
addition, the Sub-Adviser was authorized to select the brokers or dealers that
executed the purchases and sales of portfolio securities for the Fund.

Expenses Paid by the Sub-Adviser. The Original Sub-Advisory Agreement also
provided that the Sub-Adviser would pay all expenses incurred by it in
connection with its activities under the Original Sub-Advisory Agreement other
than the cost of securities (including brokerage commissions, if any) purchased
for the Fund.

Compensation. Pursuant to the investment management agreement between NIAC and
the Fund, the Fund has agreed to pay an annual management fee for the services
and facilities provided by NIAC, payable on a monthly basis, according to the
following schedule:

<Table>
<Caption>
- -----------------------------------------------------------
AVERAGE DAILY MANAGED ASSETS(*) MANAGEMENT FEE
- -----------------------------------------------------------

Up to $500 million 0.900%
$500 million to $1 billion 0.875%
$1 billion to $1.5 billion 0.850%
$1.5 billion to $2 billion 0.825%
$2 billion and over 0.800%
- -----------------------------------------------------------
</Table>

(*) Managed assets including assets attributable to FundPreferred shares
and the principal amount of borrowings.

Pursuant to the Original Sub-Advisory Agreement, the Sub-Adviser would receive
from NIAC a management fee equal to the portion specified below of the
management fee payable by the Fund to NIAC (net of the reimbursements described
below), with respect to the Sub-Adviser's allocation of the Fund's average daily
managed assets, payable on a monthly basis:

<Table>
<Caption>
- -------------------------------------------------------------
PERCENTAGE OF NET
AVERAGE DAILY MANAGED ASSETS(*) MANAGEMENT FEE
- -------------------------------------------------------------

Up to $200 million 55.0%
$200 million to $300 million 52.5%
$300 million and over 50.0%
- -------------------------------------------------------------
</Table>

(*) Managed assets including assets attributable to FundPreferred shares
and the principal amount of borrowings.

NIAC has contractually agreed to reimburse the Fund for fees and expenses in the
amounts, and for the time periods, set forth below. NIAC has not agreed to
reimburse the Fund for any portion of its fees and expenses beyond September 30,
2011.

<Table>
<Caption>
- ------------------------------------------------------------------
AMOUNT REIMBURSED
YEAR ENDING (AS A PERCENTAGE OF
SEPTEMBER 30 AVERAGE DAILY MANAGED ASSETS)(*)
- ------------------------------------------------------------------

2003(**) 0.32%
2004 0.32%
2005 0.32%
2006 0.32%
2007 0.32%
2008 0.32%
2009 0.24%
2010 0.16%
2011 0.08%
- ------------------------------------------------------------------
</Table>

(*) Managed assets including assets attributable to FundPreferred shares
and the principal amount of borrowings.

(**) From the commencement of operations.

For the most recently completed fiscal year of the Fund, NIAC received $279,146
in advisory fees from the Fund (net of reimbursements), of which it paid $39,492
in sub-advisory fees to the Sub-Adviser.*

The Sub-Adviser acts as investment adviser or subadviser to other investment
companies with investment objectives similar to the Fund. Information on these
similar investment companies, including advisory fee rates, net assets and
aggregate advisory fees paid for each fund, is set forth in Appendix B to this
Proxy Statement.

Limitation on Liability. The Original Sub-Advisory Agreement also provided that
NIAC would not take any action against the Sub-Adviser to hold the Sub-Adviser
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the performance of the Sub-Adviser's duties under
the Original Sub-Advisory Agreement, except for a loss resulting from the
Sub-Adviser's willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under the Original Sub-Advisory Agreement.

Termination. The Original Sub-Advisory Agreement provided that it may be
terminated at any time without the payment of any penalty by NIAC on sixty (60)
days' written notice to the Sub-Adviser. The Original Sub-Advisory Agreement
also was terminable by the Sub-Adviser after July 31, 2005 without payment of
any penalty upon sixty (60) days' prior written notice to NIAC. In addition, the
Original Sub-Advisory Agreement may have been terminated by the Fund by action
of the Board or by a vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund on sixty (60) days' written notice to the
Sub-Adviser by the Fund.

The Original Sub-Advisory Agreement also was terminable at any time without the
payment of any penalty, by NIAC, by the Board or by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) in the
event that it was established by a court of competent jurisdiction that the
Sub-Adviser or any officer or director of the Sub-Adviser had taken any action
which resulted in a breach of the covenants of the Sub-Adviser set forth in the
Original Sub-Advisory Agreement. The Original Sub-Advisory Agreement became
effective on September 24, 2003.

Interim Sub-Advisory Agreement. To enable the Sub-Adviser to continue to
provide sub-advisory services to the Fund prior to the Annual Meeting, on July
29, 2003, by a majority vote, at a meeting held in person, the Board of the
Fund, including the Independent Board Members, approved NIAC's entering into an
interim sub-advisory agreement with the Sub-Adviser (the "Interim Sub-Advisory
Agreement") with respect to the Fund. The Interim Sub-Advisory Agreement was
effective on November 24, 2003, the date of the Sale. Pursuant to Rule 15a-4
under the 1940 Act, the Board of the Fund, including the Independent Board
Members, determined that the scope and quality of services to be provided to the
Fund under the Interim Sub-Advisory Agreement would be at least equivalent to
the scope and quality of services provided under the Original Sub-Advisory
Agreement. The Interim Sub-Advisory Agreement contains substantially the same
terms and conditions as the Original

- ---------------

* Includes $4,853 earned by the Sub-Adviser currently held in an escrow account
pursuant to the Interim Sub-Advisory Agreement. This will be paid to the
Sub-Adviser upon approval of the New Sub-Advisory Agreement.

Sub-Advisory Agreement, including the fee rate payable to the Sub-Adviser, but
also includes special provisions required by Rule 15a-4, including:

- - a maximum term of 150 days;

- - a provision that the Board or holders of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act) may terminate the agreement at
any time without penalty on not more than 10 days' written notice to the
Sub-Adviser; and

- - a provision that the compensation earned by the Sub-Adviser under the
agreement is to be held in an interest-bearing escrow account until
shareholder approval of the New Sub-Advisory Agreement is obtained, after
which the amount in the escrow account (together with any interest) would be
paid to the Sub-Adviser.

If the Fund has not received the requisite shareholder approval for the New
Sub-Advisory Agreement within 150 days after consummation of the Sale, the
Sub-Advisor will be paid, out of the escrow account, the lesser of (i) any costs
incurred in performing the Interim Sub-Advisory Agreement (plus interest earned
on that amount while in escrow) or (ii) the total amount in the escrow account
(plus interest earned), and the Board will take such actions as it deems to be
in the best interests of the Fund.

The Board's Considerations. In determining whether to approve the Interim
Sub-Advisory Agreement and New Sub-Advisory Agreement, the Board evaluated the
implications of the Sale for the Sub-Adviser and the Sub-Adviser's ability to
continue to provide services of substantially the same scope and quality as were
currently provided. In particular, the Board inquired as to the impact of the
Sale on the Sub-Adviser's personnel, facilities and financial capabilities. The
Board received assurances from representatives of the Sub-Adviser that there
were no current plans to make any material personnel changes that would affect
the investment advisory services provided to the Fund. The Board Members also
received assurances from the Sub-Adviser that the Sale would not adversely
affect the Sub-Adviser's ability to fulfill its obligations to the Fund or to
operate its business in a manner consistent with past practices.

The Board further considered: (i) the quality of the operations and services
which have been provided to the Fund by the Sub-Adviser and which were expected
to continue to be provided after the Sale, with no change in fee rates, (ii) the
overall experience and reputation of the Sub-Adviser in providing such services
to investment companies, and the likelihood of its continued financial
stability, (iii) the reputation and capitalization of Banc One and its
affiliates, and (iv) the benefits of continuity in the services to be provided
under the Interim Sub-Advisory Agreement and New Sub-Advisory Agreement. Based
upon its review, the Board determined that continuity and efficiency of
portfolio management services after the Sale could best be assured by approving
the New Sub-Advisory Agreement. The Board believes that the New Sub-Advisory
Agreement will enable the Fund to continue to obtain investment advisory
services of high quality at costs which it deems appropriate and reasonable
under the circumstances, and that approval of the New Sub-Advisory Agreement is
in the best interests of the Fund and its shareholders. Accordingly, the Board
approved the New Sub-Advisory Agreement and recommends that shareholders approve
the New Sub-Advisory Agreement.

Furthermore, the Board recognized that NIAC and the Sub-Adviser have each
assured the Board Members that they intend to comply with Section 15(f) of the
1940 Act. Section 15(f)

provides a non-exclusive safe harbor for an investment adviser (or sub-adviser)
to an investment company or any affiliated persons to receive any amount or
benefit in connection with a change in control of the investment adviser (or
sub-adviser) to an investment company as long as two conditions are satisfied.

First, an "unfair burden" must not be imposed on investment company clients of
the adviser as a result of the transaction, or any express or implied terms,
conditions or understandings applicable to the transaction. The term "unfair
burden" (as defined in the 1940 Act) includes any arrangement during the
two-year period after the transaction whereby the investment adviser or
sub-adviser (or predecessor or successor adviser or sub-adviser), or any
"interested person" (as defined in the 1940 Act) (an "Interested Person") of any
such adviser or sub-adviser, receives or is entitled to receive any
compensation, directly or indirectly, from such an investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any other person in connection with the purchase or sale of
securities or other property to, from or on behalf of such investment company.
The Board has been advised that neither the Sub-Adviser nor Banc One is aware of
any circumstances arising from the Sale that might result in an unfair burden
being imposed on the Fund.

Second, for a period of three years after the change in control, at least 75% of
the board members of the investment company must be persons who are not
Interested Persons of the predecessor or successor investment adviser or
sub-adviser.

The Sub-Adviser has undertaken to pay the costs of preparing and distributing
proxy materials to the Fund's shareholders with respect to this proposal, as
well as other fees and expenses in connection with the Sale, including the fees
and expenses of legal counsel and consultants to the Fund and the Board Members
relating to their review of the Sale.

The principal executive officers and directors of the Sub-Adviser and their
principal occupations are respectively as follows: Anthony R. Manno Jr.,
President, Director and Managing Director; Kenneth D. Statz, Managing Director;
Kevin W. Bedell, Senior Vice President; David E. Rosenbaum, Senior Vice
President; and Michael J. Heller, Secretary, Treasurer and Controller. The
business address of the Sub-Adviser and each of the foregoing individuals is 11
South LaSalle Street, 2nd Floor, Chicago, Illinois 60603.

Shareholder Approval. To become effective, the New Sub-Advisory Agreement must
be approved by a vote of a majority of the outstanding voting securities of the
Fund, with the common and FundPreferred shareholders voting together as a single
class. The "vote of a majority of the outstanding voting securities" is defined
in the 1940 Act as the lesser of the vote of (i) 67% or more of the shares of
the Fund entitled to vote thereon present at the meeting if the holders of more
than 50% of such outstanding shares are present in person or represented by
proxy; or (ii) more than 50% of such outstanding shares of the Fund entitled to
vote thereon. The Interim Sub-Advisory Agreement and the New Sub-Advisory
Agreement were approved by the Board after consideration of all factors which it
determined to be relevant to its deliberations, including those discussed above.
The Board also determined to submit the New Sub-Advisory Agreement for
consideration by the shareholders of the Fund.

THE BOARD RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE NEW
SUB-ADVISORY AGREEMENT.

2. ELECTION OF BOARD MEMBERS

GENERAL

Twelve (12) Board Members are nominated to be elected to serve until the next
annual meeting of shareholders or until they retire or their successors shall
have been duly elected and qualified. Under the terms of the Fund's
organizational documents, under normal circumstances holders of FundPreferred
are entitled to elect two (2) Board Members, and the remaining Board Members are
to be elected by holders of common shares and FundPreferred, voting together as
a single class.

a. Ten (10) Board Members are to be elected by holders of common
shares and FundPreferred shares, voting together as a single class. Board
Members Bennett, Bremner, Brown, Evans, Impellizzeri, Kissick, Leafstrand,
Sawers, Stockdale and Wellington are nominees for election by all
shareholders.

b. Holders of FundPreferred shares, each series voting together as a
single class, are entitled to elect two (2) Board Members. Board Members
Schneider and Schwertfeger are nominees for election by holders of
FundPreferred.

The affirmative vote of a plurality of the shares present and entitled to vote
at the Annual Meeting will be required to elect the Board Members.

Under the Fund's retirement policy for Independent Board Members, which provides
that Independent Board Members will retire at the earlier of age 72 or after
board service of 15 years, Board Members Leafstrand and Wellington will be
retiring on June 30, 2004. In addition, it is expected that Board Members
Impellizzeri, Kissick and Sawers, who will not then have reached the age or
service period at which retirement would be called for under the retirement
policy, will also be retiring on June 30, 2004. William C. Hunter has been
appointed to the Board for a term expected to begin July 1, 2004. In the
interim, Mr. Hunter will be a trustee designate of the Fund.

It is the intention of the persons named in the enclosed proxy to vote the
shares represented thereby for the election of the nominees listed below unless
the proxy is marked otherwise. Each of the nominees has agreed to serve as a
Board Member of the Fund if elected. However, should any nominee become unable
or unwilling to accept nomination for election, the proxies will be voted for
substitute nominees, if any, designated by the Fund's present Board.

All of the Board Member nominees were elected to the Fund's Board by the Fund's
initial shareholder on September 24, 2003.

Other than Mr. Schwertfeger, none of the Board Member nominees has ever been a
director or an employee of Nuveen Investments, Inc. ("Nuveen") or any affiliate.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE
NOMINEES NAMED BELOW.

BOARD NOMINEES

<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN OTHER
FUND COMPLEX DIRECTOR-
TERM OF OFFICE OVERSEEN SHIPS HELD
NAME, ADDRESS POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) BY BOARD BY BOARD
AND BIRTH DATE WITH FUND TIME SERVED** DURING PAST 5 YEARS MEMBER MEMBER
- -----------------------------------------------------------------------------------------------------------------------------------

NOMINEES WHO ARE NOT
INTERESTED PERSONS OF THE
FUND
William E. Bennett Board Member Term: Annual Private Investor; previously 143 N/A
333 West Wacker Drive Length of Service: President and C.E.O., Draper &
Chicago, IL 60606 Since 2001 Kramer, Inc. (1995-1998). Prior
(10/16/46) thereto, Executive Vice President
and Chief Credit Officer of First
Chicago Corporation and its
principal subsidiary, The First
National Bank of Chicago.
Robert P. Bremner Board Member Term: Annual Private Investor and Management 143 N/A
333 West Wacker Drive Length of Service: Consultant.
Chicago, IL 60606 Since 1996
(8/22/40)
Lawrence H. Brown Board Member Term: Annual Retired (1989) as Senior Vice 143 See
333 West Wacker Drive Length of Service: President of The Northern Trust Principal
Chicago, IL 60606 Since 1993 Company; Director, Community Occupation
(7/29/34) Advisory Board for Highland Park and Description
Highwood, United Way of the North
Shore (since 2002).
</Table>

Jack B. Evans Board Member Term: Annual President, The Hall-Perrine 143 See
333 West Wacker Drive Length of Service: Foundation (a private philanthropic Principal
Chicago, IL 60606 Since 1999 corporation); Director, Alliant Occupation
(10/22/48) Energy; Director and Vice Chairman Description
United Fire & Casualty Company;
Director, Federal Reserve Bank of
Chicago; previously President and
Chief Operating Officer, SCI
Financial Group, Inc. (a regional
financial services firm).
***Anne E. Impellizzeri Board Member Term: Annual Retired; formerly, Executive 143 N/A
333 West Wacker Drive Length of Service: Director (1998-2001) of Manitoga/The
Chicago, IL 60606 Since 1994 Russel Wright Design Center; prior
(1/26/33) thereto, President and Chief
Executive Officer of Blanton-Peale
Institute; prior thereto, Vice
President, Metropolitan Life
Insurance Co.
***William L. Kissick Board Member Term: Annual Professor Emeritus, School of 143 N/A
333 West Wacker Drive Length of Service: Medicine and the Wharton School of
Chicago, IL 60606 Since 1992 Management and former Chairman,
(7/29/32) Leonard Davis Institute of Health
Economics, University of
Pennsylvania; Adjunct Professor,
Health Policy and Management, Yale
University.
</Table>

***Thomas E. Leafstrand Board Member Term: Annual Retired; previously, Vice President 143 N/A
333 West Wacker Drive Length of Service: in charge of Municipal Underwriting,
Chicago, IL 60606 Since 1992 Trading, and Dealer Sales at The
(11/11/31) Northern Trust Company.
***Peter R. Sawers Board Member Term: Annual Adjunct Professor of Business and 143 See
333 West Wacker Drive Length of Service: Economics, University of Dubuque, Principal
Chicago, IL 60606 Since 1991 Iowa; formerly (1991-2000) Adjunct Occupation
(4/3/33) Professor, Lake Forest Graduate Description
School of Management, Lake Forest,
Illinois; Director, Executive
Service Corps of Chicago; prior
thereto, Executive Director, Towers
Perrin Australia, a management
consulting firm; Chartered Financial
Analyst; Certified Management
Consultant.
William J. Schneider Board Member Term: Annual Senior Partner and Chief Operating 143 N/A
333 West Wacker Drive Length of Service: Officer, Miller-Valentine Group,
Chicago, IL 60606 Since 1996 Vice President, Miller- Valentine
(9/24/44) Realty, a construction company;
Chair, Miami Valley Hospital; Chair,
Dayton Development Coalition;
formerly, Member, Community Advisory
Board, National City Bank, Dayton,
Ohio; and Business Advisory Council,
Cleveland Federal Reserve Bank.
</Table>

Judith M. Stockdale Board Member Term: Annual Executive Director, Gaylord and 143 N/A
333 West Wacker Drive Length of Service: Dorothy Donnelley Foundation (since
Chicago, IL 60606 Since 1997 1994); prior thereto, Executive
(12/29/47) Director, Great Lakes Protection
Fund (from 1990 to 1994).
***Sheila W. Wellington Board Member Term: Annual Clinical Professor of Management, 143 N/A
333 West Wacker Drive Length of Service: Stern/NYU Business School (since
Chicago, IL 60606 Since 1994 2003); formerly, President of
(2/24/32) Catalyst (a not-for-profit
organization focusing on women's
leadership development in business
and the professions) (1993-2003).
</Table>

<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
POSITION(S) TERM OF OFFICE OVERSEEN
NAME, ADDRESS HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) BY BOARD
AND BIRTH DATE WITH FUND TIME SERVED** DURING PAST 5 YEARS MEMBER
- --------------------------------------------------------------------------------------------------------------------------

NOMINEE WHO IS AN
INTERESTED PERSON OF THE
FUND
*Timothy R. Schwertfeger Chairman of Term: Annual Chairman and Director (since 1996) of Nuveen 143
333 West Wacker Drive the Board Length of Service: Investments, Inc. and Nuveen Investments,
Chicago, IL 60606 and Board Since 1996 LLC; Director (since 1992) and Chairman
(3/28/49) Member (since 1996) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.; Chairman
and Director (since 1997) of Nuveen Asset
Management, Inc.; Director (since 1996) of
Institutional Capital Corporation; Chairman
and Director (since 1999) of Rittenhouse
Asset Management, Inc.; Chairman of Nuveen
Investments Advisers, Inc. (since 2002).
- --------------------------------------------------------------------------------------------------------------------------

<Caption>
- -------------------------- -----------

OTHER
DIRECTOR-
SHIPS HELD
NAME, ADDRESS BY BOARD
AND BIRTH DATE MEMBER
- -------------------------- -----------

NOMINEE WHO IS AN
INTERESTED PERSON OF THE
FUND
*Timothy R. Schwertfeger See
333 West Wacker Drive Principal
Chicago, IL 60606 Occupation
(3/28/49) Description
- --------------------------
</Table>

* "Interested person" as defined in the 1940 Act, by reason of being an officer
and director of the Fund's Adviser.

** Length of Service indicates the year in which the individual became a
Trustee or Director of a fund in the Nuveen fund complex. All of the
nominees have served as a Trustee of the Fund since its inception.

***Retiring or expected to retire on June 30, 2004.

BENEFICIAL OWNERSHIP

The following table lists the dollar range and number of common shares
beneficially owned by each Board Member nominee in the Fund and in all Nuveen
funds overseen by the Board Member nominees as of December 31, 2003:

<Table>
<Caption>
DOLLAR RANGE AND NUMBER OF COMMON SHARES
- ----------------------------------------------------------------------------------
AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL REGISTERED INVESTMENT
COMPANIES OVERSEEN BY BOARD MEMBER
NOMINEES IN FAMILY OF INVESTMENT
BOARD MEMBER NOMINEES FUND COMPANIES(1)
- ----------------------------------------------------------------------------------

William E. Bennett.... $0 Over $100,000
5,768 Shares
Robert P. Bremner..... Over $100,000 Over $100,000
13,200 Shares 19,497 Shares
Lawrence H. Brown..... $0 Over $100,000
19,787 Shares
Jack B. Evans......... $0 Over $100,000
15,503 Shares
Anne E.
Impellizzeri........ $0 Over $100,000
17,351 Shares
William L. Kissick.... $0 Over $100,000
12,422 Shares
Thomas E.
Leafstrand.......... $0 Over $100,000
40,498 Shares
Peter R. Sawers....... $0 Over $100,000
56,837 Shares
William J.
Schneider........... $10,001-$50,000 Over $100,000
650 Shares 60,647 Shares
Timothy R.
Schwertfeger........ $0 Over $100,000
550,472 Shares
Judith M. Stockdale... $0 Over $100,000
6,038 Shares
Sheila W.
Wellington.......... $0 Over $100,000
18,914 Shares
- ----------------------------------------------------------------------------------
</Table>

(1) The amounts reflect the aggregate dollar range of equity securities and the
number of shares beneficially owned by the Board Member in the Fund and in
all Nuveen funds overseen by each Board Member.

As of December 31, 2003, the Board Member nominees and the Board Member nominees
and officers as a group, beneficially owned 13,850 shares of the Fund. The
information as to beneficial ownership is based on statements furnished by each
Board Member nominee and Fund officer.

On December 31, 2003, the Board Members and executive officers as a group
beneficially owned 993,608 common shares of all funds managed by Nuveen Advisory
Corp. ("NAC") and NIAC (includes deferred units in connection with the Deferred
Compensation Plan, as

described below, and shares held by the executive officers in Nuveen's
401(k)/profit sharing plan). Each Board Member's individual beneficial
shareholdings of the Fund constitute less than 1% of the outstanding shares of
the Fund. As of January 30, 2004, the Board Members and executive officers as a
group beneficially owned less than 1% of the outstanding common shares of the
Fund. As of January 30, 2004, the Board Member nominees and executive officers
of the Fund did not own any shares of FundPreferred. As of January 30, 2004, no
shareholder beneficially owned more than 5% of any class of shares of the Fund.

COMPENSATION

For all Nuveen funds overseen, Independent Board Members receive a $65,000
annual retainer plus (a) a fee of $2,000 per day for attendance in person or by
telephone at a regularly scheduled meeting of the Board; (b) a fee of $1,000 per
day for attendance in person where such in-person attendance is required and
$500 per day for attendance by telephone or in person where in-person attendance
is not required at a special, non-regularly scheduled board meeting; (c) a fee
of $1,000 per day for attendance in person at an audit committee meeting where
in-person attendance is required and $500 per day for attendance by telephone or
in person where in-person attendance is not required; (d) a fee of $500 per day
for attendance in person or by telephone for a meeting of the dividend
committee; and (e) a fee of $500 per day for attendance in person at all other
committee meetings on a day on which no regularly scheduled board meeting is
held in which in-person attendance is required and $250 per day for attendance
by telephone or in person at such meetings where in-person attendance is not
required, plus, in each case, expenses incurred in attending such meetings. The
annual retainer, fees and expenses are allocated among the funds managed by the
Adviser on the basis of relative net asset sizes although fund management may,
in its discretion, establish a minimum amount to be allocated to each fund. As
noted above, Board Members Impellizzeri, Kissick and Sawers will retire on June
30, 2004. It is contemplated that these three Board Members will each receive a
payment at the time of their retirement as partial compensation for the earnings
they would have received if they had continued as Independent Board Members
until the time specified in the current retirement policy. The Board Member
affiliated with Nuveen and the Adviser serves without any compensation from the
Fund.

The boards of certain Nuveen funds (the "Participating Funds") established a
Deferred Compensation Plan for Independent Board Members ("Deferred Compensation
Plan"). Under the Deferred Compensation Plan, Independent Board Members of the
Participating Funds may defer receipt of all, or a portion, of the compensation
they earn for their services to the Participating Funds, in lieu of receiving
current payments of such compensation. Any deferred amount is treated as though
an equivalent dollar amount had been invested in shares of one or more eligible
Nuveen funds. Each Independent Board Member, other than Mr. Brown, has elected
to defer at least a portion of his or her fees. The Fund is a Participating
Fund.

The table below shows, for each Board Member who is not affiliated with Nuveen
or the Adviser, the aggregate compensation (i) estimated to be earned for
service to the Fund for the 12-month period ending on December 31, 2004,
representing a full fiscal year of the Fund and (ii) paid (including deferred
fees) for service on the boards of the Nuveen open-end and closed-end funds
managed by NAC ("NAC Funds") and NIAC ("NIAC Funds") for the calendar year ended
2003 and estimated compensation from the Fund to be earned for the 12-month
period ending December 31, 2004, representing a full fiscal year of the Fund.

Mr. Schwertfeger, a Board Member who is an interested person of the Fund, does
not receive any compensation from the Fund or any Nuveen funds.

<Table>
<Caption>
AGGREGATE COMPENSATION FROM THE FUND
- -------------------------------------------------------------------------------
TOTAL COMPENSATION
FROM NUVEEN FUNDS
PAID TO BOARD
BOARD MEMBERS FUND(1) MEMBERS(2)
- -------------------------------------------------------------------------------

William E. Bennett................ $542 $ 73,959
Robert P. Bremner................. $542 $ 99,742
Lawrence H. Brown................. $563 $101,313
Jack B. Evans..................... $563 $ 71,146
Anne E. Impellizzeri.............. $495 $ 96,045
William L. Kissick................ $495 $ 65,578
Thomas E. Leafstrand.............. $563 $ 71,696
Peter R. Sawers................... $542 $ 96,292
William J. Schneider.............. $558 $ 99,308
Judith M. Stockdale............... $495 $ 94,495
Sheila W. Wellington.............. $495 $ 62,078
- -------------------------------------------------------------------------------
</Table>

(1) Based on the estimated compensation from the Fund to be earned by the
Independent Board Members for the 12-month period ending December 31, 2004,
representing a full fiscal year of the Fund.

(2) Based on the total compensation from Nuveen Funds paid to the Independent
Board Members for the one year period ending December 31, 2003 and the
estimated compensation from the Fund to be earned by the Independent Board
Members for the 12-month period ending December 31, 2004, representing a
full fiscal year of the Fund. Includes deferred fees. Pursuant to the
Deferred Compensation Plan for the Fund, deferred amounts are treated as
though an equivalent dollar amount has been invested in shares of one or
more Participating Funds. Total deferred fees for the Fund (including the
return from the assumed investment in the Participating Funds) payable are:

<Table>
<Caption>
DEFERRED FEES
- ------------------------------------------------------------------------------------------------------
CONTINUING BOARD MEMBERS
- ------------------------------------------------------------------------------------------------------
WILLIAM E. ROBERT P. LAWRENCE H. JACK B. ANNE E. WILLIAM L. THOMAS E. PETER R.
BENNETT BREMNER BROWN EVANS IMPELLIZZERI KISSICK LEAFSTRAND SAWERS
- ------------------------------------------------------------------------------------------------------

0 0 0 0 0 0 0 0

<Caption>
DEFERRED FEES
- --- -----------------------------------
CONTINUING BOARD MEMBERS
- --- -----------------------------------
WILLIAM J. JUDITH M. SHEILA W.
SCHNEIDER STOCKDALE WELLINGTON
- ---

0 0 0
</Table>

Nuveen Investments, Inc. maintains charitable contributions programs to
encourage the active support and involvement of individuals in the civic
activities of their community. These programs include a matching contributions
program and a direct contributions program. The Independent Board Members of the
funds managed by the Adviser are eligible to participate in the charitable
contributions program of Nuveen Investments, Inc. Under the matching program,
Nuveen Investments, Inc. will match the personal contributions of a Board Member
to Section 501(c)(3) organizations up to an aggregate maximum amount of $10,000
during any calendar year. Under its direct (non-matching) program, Nuveen
Investments, Inc. makes contributions to qualifying Section 501(c)(3)
organizations, as approved by the Corporate Contributions Committee of Nuveen
Investments, Inc. The Independent Board Members are also eligible to submit
proposals to the committee requesting that contributions be made under this
program to Section 501(c)(3) organizations identified by the Board Member, in an

aggregate amount not to exceed $5,000 during any calendar year. Any
contributions made by Nuveen Investments, Inc. under the direct program is made
solely at the discretion of the Corporate Contributions Committee.

COMMITTEES

The Board has five standing committees: the executive committee, the audit
committee, the nominating and governance committee, the dividend committee and
the compliance, risk management and regulatory oversight committee.

Robert P. Bremner, Anne E. Impellizzeri and Timothy R. Schwertfeger currently
serve as members of the executive committee of the Board. The executive
committee, which meets between regular meetings of the Board, is authorized to
exercise all of the powers of the Board; provided that the scope of the powers
of the executive committee, unless otherwise specifically authorized by the full
Board, is limited to: (i) emergency matters where assembly of the full Board is
impracticable (in which case management will take all reasonable steps to
quickly notify each individual Board Member of the actions taken by the
executive committee) and (ii) matters of an administrative or ministerial
nature. The executive committee held two (2) meetings during the Fund's last
fiscal year.

Lawrence H. Brown, Jack B. Evans and Thomas E. Leafstrand are current members of
the dividend committee. The dividend committee is authorized to declare
distributions on the Fund's shares including, but not limited to, regular and
special dividends, capital gains and ordinary income distributions. The dividend
committee held two (2) meetings during the Fund's last fiscal year.

William E. Bennett, Lawrence H. Brown, Thomas E. Leafstrand, William J.
Schneider and Judith M. Stockdale are current members of the compliance, risk
management and regulatory oversight committee for the Board. The compliance,
risk management and regulatory oversight committee is responsible for the
oversight of compliance issues, risk management, and other regulatory matters
affecting the Fund which are not otherwise the jurisdiction of the other Board
committees. As part of its duties regarding compliance matters the committee is
responsible for the oversight of the Pricing Procedures of the Fund and the
Valuation Group. The compliance, risk management and regulatory oversight
committee held one (1) meeting during the Fund's last fiscal year.

The Fund's Board has an audit committee, established in accordance with Section
3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
composed of Independent Board Members who are "independent" as that term is
defined in the New York Stock Exchange's listing standards pertaining to
closed-end funds. The audit committee monitors the accounting and reporting
policies and practices of the Fund, the quality and integrity of the financial
statements of the Fund, compliance by the Fund with legal and regulatory
requirements and the independence and performance of the external and internal
auditors. The audit committee reviews the work and any recommendations of the
Fund's independent auditors. Based on such review, it is authorized to make
recommendations to the Board. A copy of the Audit Committee Charter is attached
to the proxy statement as Appendix C. The Board is scheduled to meet at the end
of February 2004 in order to adopt a revised Audit Committee Charter that
conforms to the new listing standards of the New York

Stock Exchange. The audit committee did not hold any meetings during the Fund's
last fiscal year.

The Fund has a nominating and governance committee composed entirely of Board
Members who are not "interested persons" (as that term is defined in the 1940
Act) of the Fund. The purpose of the nominating and governance committee is to
seek, identify and recommend to the Board qualified candidates for election or
appointment to the Fund's Board. In addition, the committee oversees matters of
corporate governance, including the evaluation of Board performance and
processes, and assignment and rotation of committee members, and the
establishment of corporate governance guidelines and procedures, to the extent
necessary or desirable. The committee operates under a written charter adopted
and approved by the Board, a copy of which is attached to the proxy statement as
Appendix D. The nominating and governance committee held two (2) meetings during
the Fund's last fiscal year.

The nominating and governance committee looks to many sources for
recommendations of qualified Board Members, including current Board Members,
members of the management company, current shareholders of the Fund, third party
sources and any other persons or entities that may be deemed necessary or
desirable by the committee. Shareholders of the Fund who wish to nominate a
candidate to the Fund's Board should mail information to the attention of Lorna
Ferguson, Manager of Fund Board Relations, Nuveen Investments, 333 West Wacker
Drive, Chicago, Illinois 60606. This information must include evidence of Fund
ownership of the person or entity recommending the candidate, a full listing of
the proposed candidate's education, experience, current employment, date of
birth, names and addresses of at least three professional references,
information as to whether the candidate is an "interested person" (as such term
is defined in the 1940 Act) in relation to the Fund and such other information
that would be helpful to the nominating and governance committee in evaluating
the candidate. All satisfactorily completed information regarding candidates
will be forwarded to the chairman of the nominating and governance committee and
the outside counsel to the Independent Board Members. Recommendations for
candidates to the Board will be evaluated in light of whether the number of
Board Members is expected to change and whether the Board expects any vacancies.
All nominations from Fund shareholders will be acknowledged, although there may
be times when the committee is not actively recruiting new Board Members. In
those circumstances nominations will be kept on file until active recruitment is
under way.

The nominating and governance committee sets appropriate standards and
requirements for nominations to the Board. In considering a candidate's
qualifications, each candidate must meet certain basic requirements, including
relevant skills and experience, time availability and, if qualifying as a
non-"interested person" candidate, independence from the management company, the
Sub-Adviser or other service providers. These experience requirements may vary
depending on the current composition of the Board, since the goal is to ensure
an appropriate range of skills and experience, in the aggregate. All candidates
must meet high expectations of personal integrity, governance experience and
professional competence that are assessed on the basis of personal interviews,
recommendations, or direct knowledge by committee members. The committee may use
any process it deems appropriate for the purpose of evaluating candidates, which
process may include, without limitation, personal interviews, background checks,
written submissions by the candidates and third party references. There is no
difference in the manner in which the nominating and governance committee
evaluates nominees when the nominee is submitted by a shareholder. The

nominating and governance committee reserves the right to make the final
selection regarding the nomination of any Board Member.

The Board of the Fund held two (2) regular quarterly meetings and three (3)
special meetings during the Fund's last fiscal year. During the last fiscal
year, each Board Member attended 75% or more of the Fund's Board meetings and
the committee meetings (if a member thereof). The policy of the Board relating
to attendance by Board Members at annual meetings of the Fund is posted on the
Fund's website at www.nuveen.com/mf and www.nuveen.com/etf.

THE OFFICERS

The following table sets forth information as of January 30, 2004 with respect
to each officer other than Mr. Schwertfeger (who is a Board Member and is
included in the table relating to nominees for the Board). Officers receive no
compensation from the Fund. The officers of the Fund are elected by the Board on
an annual basis to serve until successors are elected and qualified.

<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
POSITION(S) TERM OF OFFICE FUND COMPLEX
NAME, ADDRESS HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) SERVED BY
AND BIRTHDATE WITH FUND TIME SERVED* DURING PAST 5 YEARS OFFICER
- ---------------------------------------------------------------------------------------------------------------------------------

Gifford R. Zimmerman Chief Term: Annual Managing Director (since 2002), Assistant Secretary 143
333 West Wacker Drive Administrative Length of and Associate General Counsel, formerly, Vice
Chicago, IL 60606 Officer Service: Since President of Nuveen Investments, LLC; Managing
(9/9/56) 1988 Director (since 2002), General Counsel and Assistant
Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory
Corp.; Managing Director (since 2002) and Assistant
Secretary and Associate General Counsel, formerly
Vice President (since 2000) of Nuveen Asset
Management, Inc.; Assistant Secretary of Nuveen
Investments, Inc. (since 1994); Assistant Secretary
of NWQ Investment Management Company, LLC. (since
2002); Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002);
Managing Director, Associate General Counsel and
Assistant Secretary of Rittenhouse Asset Management,
Inc. (since 2003); Chartered Financial Analyst.
Michael T. Atkinson Vice President Term: Annual Vice President (since 2002), formerly Assistant Vice 143
333 West Wacker Drive and Assistant Length of President (from 2000), previously, Associate of
Chicago, IL 60606 Secretary Service: Since Nuveen Investments, LLC.
(2/3/66) 2002
Peter H. D'Arrigo Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 143
333 West Wacker Drive and Treasurer Length of 1999); prior thereto, Assistant Vice President (from
Chicago, IL 60606 Service: Since 1997); Vice President and Treasurer (since 1999) of
(11/28/67) 1999 Nuveen Investments, Inc.; Vice President and
Treasurer (since 1999) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.; Vice President
and Treasurer of Nuveen Asset Management, Inc. (since
2002) and of Nuveen Investments Advisers Inc. (since
2002); Assistant Treasurer of NWQ Investments
Management Company, LLC. (since 2002); Vice President
and Treasurer of Nuveen Rittenhouse Asset Management,
Inc. (since 2003); Chartered Financial Analyst.
</Table>

Susan M. DeSanto Vice President Term: Annual Vice President of Nuveen Advisory Corp. (since 2001); 143
333 West Wacker Drive Length of previously, Vice President of Van Kampen Investment
Chicago, IL 60606 Service: Since Advisory Corp. (from 1998).
(9/8/54) 2001
Jessica R. Droeger Vice President Term: Annual Vice President (since 2002) and Assistant General 143
333 West Wacker Drive and Secretary Length of Counsel (since 1998), formerly Assistant Vice
Chicago, IL 60606 Service: Since President (from 1998) of Nuveen Investments, LLC;
(9/24/64) 1998 Vice President (since 2002) and Assistant Secretary
(from 1998), formerly Assistant Vice President of
Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.
Lorna C. Ferguson Vice President Term: Annual Managing Director, formerly, Vice President (since 143
333 West Wacker Drive Length of 1998) of Nuveen Investments, LLC; Vice President
Chicago, IL 60606 Service: Since (since 1998) of Nuveen Advisory Corp. and Nuveen
(10/24/45) 1998 Institutional Advisory Corp.
William M. Fitzgerald Vice President Term: Annual Managing Director (since 2001), formerly Vice 143
333 West Wacker Drive Length of President (since 1995) of Nuveen Advisory Corp. and
Chicago, IL 60606 Service: Since Nuveen Institutional Advisory Corp.; Managing
(3/2/64) 1995 Director of Nuveen Asset Management, Inc. (since
2001); Vice President of Nuveen Investments Advisers
Inc. (since 2002); Chartered Financial Analyst.
Stephen D. Foy Vice President Term: Annual Vice President (since 1993) and Funds Controller 143
333 West Wacker Drive and Controller Length of (since 1998) of Nuveen Investment, LLC; Vice
Chicago, IL 60606 Service: Since President and Funds Controller (since 1998) of Nuveen
(5/31/54) 1993 Investments, Inc.; Certified Public Accountant.
David J. Lamb Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 143
333 West Wacker Drive Length of 2000); prior thereto, Assistant Vice President (from
Chicago, IL 60606 Service: Since 1999); formerly Associate of Nuveen Investments, LLC;
(3/22/63) 2000 Certified Public Accountant.
</Table>

Tina M. Lazar Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 143
333 West Wacker Drive Length of 1999); prior thereto, Assistant Vice President (since
Chicago, IL 60606 Service: Since 1993) of Nuveen Investments, LLC.
(8/27/61) 2002
Larry W. Martin Vice President Term: Annual Vice President, Assistant Secretary and Assistant 143
333 West Wacker Drive and Assistant Length of General Counsel of Nuveen Investments, LLC; Vice
Chicago, IL 60606 Secretary Service: Since President and Assistant Secretary of Nuveen Advisory
(7/27/51) 1988 Corp. and Nuveen Institutional Advisory Corp.;
Assistant Secretary of Nuveen Investments, Inc.;
Assistant Secretary of Nuveen Asset Management, Inc.
(since 1997); Vice President (since 2000), Assistant
Secretary and Assistant General Counsel (since 1998)
of Rittenhouse Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen Investments
Advisers Inc. (since 2002); Assistant Secretary of
NWQ Investment Management Company, LLC (since 2002).
Edward F. Neild, IV Vice President Term: Annual Managing Director (since 2002), formerly, Vice 143
333 West Wacker Drive Length of President (from 1996) of Nuveen Institutional
Chicago, IL 60606 Service: Since Advisory Corp. and Nuveen Advisory Corp.; Managing
(7/7/65) 1996 Director of Nuveen Asset Management, Inc. (since
1999); Chartered Financial Analyst.
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>

* Length of Time Served indicates the year the individual became an officer of a
fund in the Nuveen fund complex.

AUDIT COMMITTEE REPORT

The audit committee of the Board is responsible for assisting the Board in
monitoring (1) the accounting and reporting policies and procedures of the Fund,
(2) the quality and integrity of the Fund's financial statements, (3) the Fund's
compliance with regulatory requirements, and (4) the independence and
performance of the Fund's independent and internal auditors. Among other
responsibilities, the committee reviews, in its oversight capacity, the Fund's
annual financial statements with both management and the independent auditors
and the committee meets periodically with the independent and internal auditors
to consider their evaluation of the Fund's financial and internal controls. The
committee also selects, retains, evaluates and may replace the Fund's
independent auditors and determines their compensation, subject to ratification
of the Board, if required. The committee is currently composed of seven Board
Members and operates under a written charter adopted and approved by the Board,
a copy of which is attached as Appendix C. Each committee member is independent
as defined by New York Stock Exchange listing standards.

The committee, in discharging its duties, has met with and held discussions with
management and the Fund's independent and internal auditors. The committee has
reviewed and discussed the audited financial statements with management.
Management has represented to the independent auditors that the Fund's financial
statements were prepared in accordance with generally accepted accounting
principles. The committee has also discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees). The Fund's independent auditors provided
to the committee the written disclosure required by Independent Standards Board
Standard No. 1 (Independent Discussions with Audit Committees), and the
committee discussed with representatives of the independent auditors their
firm's independence. As provided in the Audit Committee Charter, it is not the
committee's responsibility to determine, and the considerations and discussions
referenced above do not ensure, that the Fund's financial statements are
complete and accurate and presented in accordance with generally accepted
accounting principles.

Based on the committee's review and discussions with management and the
independent auditors, the representations of management and the report of the
independent auditors to the committee, the committee has recommended that the
Board include the audited financial statements in the Fund's Annual Report.

The members of the committee are:

William E. Bennett
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans

Thomas E. Leafstrand

Peter R. Sawers
William J. Schneider

Audit and Related Fees. The chart below provides the aggregate fees billed by
Ernst & Young LLP for the period since the inception of the Fund to December 31,
2003: (i) for audit and non-audit services provided to the Fund; and (ii) for
engagements for non-audit services pre-approved by the audit committee for the
Adviser and certain entities controlling, controlled by, or under common control
with the Adviser that provide ongoing services to the

Fund ("Adviser Entities"), which engagements relate directly to the operations
and financial reporting of the Fund.

<Table>
<Caption>
- -----------------------------------------------------------------------------------------
AUDIT
FEES(1) AUDIT RELATED FEES(2) TAX FEES(3) ALL OTHER FEES(4)
- -----------------------------------------------------------------------------------------
ADVISER ADVISER ADVISER
FUND FUND ENTITIES FUND ENTITIES FUND ENTITIES
- -----------------------------------------------------------------------------------------

$17,800 0 0 0 0 $1,500 0
- -----------------------------------------------------------------------------------------
</Table>

(1) "Audit Fees" are the aggregate fees billed for professional services for the
audit of the Fund's annual financial statements and services provided in
connection with statutory and regulatory filings or engagements.

(2) "Audit Related Fees" are the aggregate fees billed for assurance and related
services reasonably related to the performance of the audit or review of
financial statements and are not reported under "Audit Fees."

(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance and tax planning.

(4) "All Other Fees" are the aggregate fees billed for products and services
other than "Audit Fees," "Audit Related Fees" and "Tax Fees." The $1,500 fee
is related to the initial agreed upon procedures for the offering of
FundPreferred shares.

Audit Committee Pre-Approval Policies and Procedures. Generally, the audit
committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Adviser Entities
with respect to operations and financial reporting of the Fund. Regarding tax
and research projects conducted by the independent accountants for the Fund and
Adviser Entities (with respect to operations and financial reports of the Fund)
such engagements will be (i) pre-approved by the audit committee if they are
expected to be for amounts greater than $10,000; (ii) reported to the audit
committee chairman for his verbal approval prior to engagement if they are
expected to be for amounts under $10,000 but greater than $5,000; and (iii)
reported to the audit committee at the next audit committee meeting if they are
expected to be for an amount under $5,000.

All Non-Audit Fees. The aggregate non-audit fees billed by Ernst & Young LLP
for services rendered to the Fund and to the Adviser Entities for the period
from the inception of the Fund to December 31, 2003 was $1,500. The audit
committee has generally considered whether the provision of non-audit services
rendered by Ernst & Young LLP to the Adviser Entities that were not required to
be pre-approved by the audit committee is compatible with maintaining Ernst &
Young LLP's independence.

APPOINTMENT OF INDEPENDENT AUDITORS

The Fund has appointed Ernst & Young LLP, independent public accountants, as
independent auditors to audit the books and records of the Fund for its fiscal
year. A representative of Ernst & Young LLP will be present at the meeting to
make a statement, if such representative so desires, and to respond to
shareholders' questions. Ernst & Young LLP has informed the Fund that it has no
direct or indirect material financial interest in the Fund, Nuveen, the Adviser
or any other investment company sponsored by Nuveen.

SECTION 16(A) BENEFICIAL INTEREST REPORTING COMPLIANCE

Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require Board
Members and officers, the investment adviser, affiliated persons of the
investment adviser and persons who own more than 10% of a registered class of
the Fund's equity securities to file forms reporting their affiliation with the
Fund and reports of ownership and changes in ownership of the Fund's shares with
the Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange. These persons and entities are required by SEC regulation to furnish
the Fund with copies of all Section 16(a) forms they file. Based on a review of
these forms furnished to the Fund, the Fund believes that its Board Members and
officers, investment adviser and affiliated persons of the investment adviser
have complied with all applicable Section 16(a) filing requirements during its
last fiscal year. To the knowledge of management of the Fund, no shareholder of
the Fund owns more than 10% of a registered class of the Fund's equity
securities.

INFORMATION ABOUT THE ADVISER

The Adviser, located at 333 West Wacker Drive, Chicago, Illinois 60606, serves
as investment adviser and manager for the Fund. The Adviser is a wholly owned
subsidiary of Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois
60606. Nuveen Investments, Inc., is approximately 79% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located at 385 Washington Street, St.
Paul, Minnesota 55102, and is principally engaged in providing
property-liability insurance through subsidiaries. On November 17, 2003, St.
Paul and Travelers Property Casualty Corp. ("Travelers") announced that they had
signed a definitive merger agreement, under which holders of Travelers common
stock will each receive common shares of St. Paul in exchange for their
Travelers shares. The transaction is subject to customary closing conditions,
including approval by the shareholders of both companies as well as certain
regulatory approvals.

SHAREHOLDER PROPOSALS

To be considered for presentation at the annual meeting of shareholders of the
Fund to be held in 2005, a shareholder proposal submitted pursuant to Rule 14a-8
of the 1934 Act must be received at the offices of the Fund, 333 West Wacker
Drive, Chicago, Illinois 60606, not later than October 28, 2004. A shareholder
wishing to provide notice in the manner prescribed by Rule 14a-4(c)(1) of a
proposal submitted outside of the process of Rule 14a-8 must submit such written
notice to the Fund not later than January 10, 2005. Timely submission of a
proposal does not mean that such proposal will be included in a proxy statement.

SHAREHOLDER COMMUNICATIONS

Fund shareholders who want to communicate with the Board or any individual Board
Member should write the Fund to the attention of Lorna Ferguson, Manager of Fund
Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago, Illinois
60606. The letter should indicate that you are a Fund shareholder. If the
communication is intended for a specific Board Member and so indicates it will
be sent only to that Board Member. If a communication does not indicate a
specific Board Member it will be sent to the chair of the

nominating and governance committee and the outside counsel to the Independent
Board Members for further distribution as deemed appropriate by such persons.

EXPENSES OF PROXY SOLICITATION

All costs incurred in connection with approval of the New Sub-Advisory Agreement
will be paid by the Sub-Adviser and the remainder of the costs of preparing,
printing and mailing the enclosed proxy, accompanying notice and proxy statement
and all other costs in connection with the solicitation of proxies will be paid
by the Fund. Additional solicitation may be made by letter, telephone or
telegraph by officers or employees of Nuveen or the Adviser, or by dealers and
their representatives.

FISCAL YEAR

The Fund's first fiscal year end was December 31, 2003.

ANNUAL REPORT DELIVERY

Annual reports will be sent to shareholders of record of the Fund following the
Fund's fiscal year end. The Fund will furnish, without charge, a copy of its
annual report and/or semi-annual report as available upon request. Such written
or oral requests should be directed to the Fund at 333 West Wacker Drive,
Chicago, Illinois 60606 or by calling 1-800-257-8787.

Please note that only one annual report or proxy statement may be delivered to
two or more shareholders of the Fund who share an address, unless the Fund has
received instructions to the contrary. To request a separate copy of an annual
report or proxy statement, or for instructions as to how to request a separate
copy of such documents or as to how to request a single copy if multiple copies
of such documents are received, shareholders should contact the Fund at the
address and phone number set forth above.

GENERAL

Management does not intend to present and does not have reason to believe that
any other items of business will be presented at the Annual Meeting. However, if
other matters are properly presented to the Annual Meeting for a vote, the
proxies will be voted by the persons acting under the proxies upon such matters
in accordance with their judgment of the best interests of the Fund.

A list of shareholders entitled to be present and to vote at the Annual Meeting
will be available at the offices of the Fund, 333 West Wacker Drive, Chicago,
Illinois, for inspection by any shareholder during regular business hours
beginning ten days prior to the date of the Annual Meeting.

Failure of a quorum to be present at the Annual Meeting will necessitate
adjournment and will subject the Fund to additional expense. The persons named
in the enclosed proxy may also move for an adjournment of the Annual Meeting to
permit further solicitation of proxies with respect to a proposal if they
determine that adjournment and further solicitation is reasonable and in the
best interests of the shareholders. Under the Fund's By-Laws, an adjournment of
a meeting requires the affirmative vote of a majority of the shares present in
person or represented by proxy at the meeting.

IF YOU CANNOT BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.

Jessica R. Droeger
Vice President and Secretary
February 25, 2004

APPENDIX A

INVESTMENT SUB-ADVISORY AGREEMENT

AGREEMENT made as of this day of 2004 by and between Nuveen
Institutional Advisory Corp., a Delaware corporation and a registered investment
adviser ("Manager"), and Security Capital Research & Management Incorporated, a
Delaware corporation and a federally registered investment adviser
("Sub-Adviser").

WHEREAS, Manager serves as the investment manager for the Nuveen Diversified
Dividend and 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 as its agent 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 investment policy section of the Fund's
initial registration statement on Form N-2 as declared effective by the
Securities and Exchange Commission, as such policies described therein may
subsequently be changed by the Fund's Board of Trustees and publicly
described. 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 stated investment objectives,
policies and restrictions of the Fund. Manager will provide Sub-Adviser
with current copies of the Fund's Declaration of Trust, By-laws, prospectus
and any amendments thereto, and any objectives, policies 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.

The Sub-Adviser will vote all proxies solicited by or with respect to the
issuers of securities which assets of the Fund's investment portfolio allocated
by Manager to Sub-Adviser are

A-1

invested, consistent with its proxy voting guidelines and based upon 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 same 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;

(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;

A-2

(d) will monitor the pricing of non-exchange-listed and non-U.S.
portfolio securities (together, "Monitored Securities"), and events
relating to the issuers of Monitored Securities and the markets in which
the Monitored Securities trade in the ordinary course of managing the
portfolio securities of the Fund, and will notify Manager promptly of any
issuer-specific or market events or other situations that occur
(particularly those that may occur after the close of a foreign market in
which the securities may primarily trade but before the time at which the
Fund's securities are priced on a given day) that may materially impact the
pricing of one or more Monitored Securities in Sub-Adviser's portion of the
portfolio. In addition, Sub-Adviser will assist Manager in evaluating the
impact that such an event may have on the net asset value of the Fund and
in determining a recommended fair value of any Monitored Securities; 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 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. 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, if any) purchased for the Fund.

4. 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:

<Table>
<Caption>
- -----------------------------------------------------------
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%
- -----------------------------------------------------------
</Table>

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

A-3

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.

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 4 without the express written consent
of the Sub-Adviser.

5. 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 fiduciary and other managed accounts, and as
investment adviser or sub-investment adviser to one or more other
investment companies that are not a series of the Fund, 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.

6. 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.

7. 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, 2005 unless sooner terminated as
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

A-4

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 by the Sub-Adviser without cause after July 31, 2005
without payment of any penalty on no less than sixty (60) days' prior 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 covenants 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
4 earned prior to 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.

8. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party

<Table>

If to the Manager: If to the Sub-Adviser:
Nuveen Institutional Advisory Corp. Security Capital Research &
333 West Wacker Drive Management Incorporated
Chicago, Illinois 60606 11 South LaSalle Street
Attention: John P. Amboian Chicago, Illinois 60603
Attention: Anthony R. Manno, Jr.

With a copy to: With a copy to:
The John Nuveen Company Attention: General Counsel
333 West Wacker Drive
Chicago, Illinois 60606
</Table>

or such address as such party may designate for the receipt of such notice.

9. 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

A-5

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.

10. 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.

11. 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.

<Table>

NUVEEN INSTITUTIONAL ADVISORY CORP., a SECURITY CAPITAL RESEARCH & MANAGEMENT
Delaware corporation INCORPORATED,
a Delaware corporation

By: By:
- ------------------------------------- -------------------------------------
Title: Managing Director Title:
------------------------------------
</Table>

A-6

APPENDIX B

INFORMATION FOR OTHER
FUNDS WITH SIMILAR OBJECTIVES

FUNDS ADVISED BY SECURITY CAPITAL RESEARCH
AND MANAGEMENT INCORPORATED

<Table>
<Caption>
NET ASSETS AS
FUND OBJECTIVE FEE RATE OF 12/31/03
- ----------------------------------------------------------------------------------------------------------------------------------

Nuveen Real Estate Income High current income and capital Percentage of Nuveen $701.8 million
Fund appreciation Daily Net Assets Management Fee
---------------------------- --------------------
Up to $125 million 50.0%
$125 million to $150 million 47.5%
$150 million to $175 million 45.0%
$175 million to $200 million 42.5%
$200 million and over 40.0%
- ----------------------------------------------------------------------------------------------------------------------------------
An institutional small Capital appreciation. Monthly Average $70.8 million*
cap fund (Real Estate Net Assets Fee Rate
Securities Allocation) ---------------------------- --------------------
Under to $200 million 0.45%
$200 million to $225 million $900,000
Over $225 million 0.40%
- ----------------------------------------------------------------------------------------------------------------------------------
An institutional real Total return, including current Monthly Average $1.0 million**
state fund (Real Estate income and capital application. Net Assets Fee Rate
Securities Allocation) ---------------------------- --------------------
Under to $200 million 0.45%
$200 million to $225 million $900,000
Over $225 million 0.40%
- ----------------------------------------------------------------------------------------------------------------------------------
An institutional Long-term capital appreciation. Monthly Average $9.6 million*
small/mid cap fund (Real Net Assets Fee Rate
Estate Securities ---------------------------- --------------------
Allocation) Under to $200 million 0.45%
$200 million to $225 million $900,000
Over $225 million 0.40%
- ----------------------------------------------------------------------------------------------------------------------------------
Security Capital U.S. Above average total returns, 0.60% of the average daily net asset value $298.4 million
Real Estate Shares including current income and
capital appreciation, primarily
through investments in real estate
securities in the United States.
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>

* Security Capital Research and Management Incorporated ("Security Capital")
provides subadvisory services for only one segment of this fund. Fund net
asset figures identify only the portion of total net assets for which
Security Capital provides subadvisory services.

** Security Capital is one of two sub-advisors. Fund net asset figures identify
only the portion of total net assets for which Security Capital provides
subadvisory services.

B-1

APPENDIX C

NUVEEN MANAGEMENT INVESTMENT COMPANIES

AUDIT COMMITTEES CHARTER

REVISED MAY, 2003

ORGANIZATION AND MEMBERSHIP

There shall be a committee of each Board of Directors/Trustees of the Nuveen
Management Investment Companies (the "Funds") to be known as the Audit
Committee. The Audit Committee shall be composed of at least three
Directors/Trustees. Audit Committee members shall be independent of the Funds
and free of any relationship that, in the opinion of the Directors/Trustees,
would interfere with their exercise of independent judgment as a Committee
member. In particular, each member must meet the independence and experience
requirements of the New York Stock Exchange, Section 10A of the Securities
Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission"). Each such member of the
Audit Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements. At least one
such member shall have accounting or related financial management expertise, in
each case as determined by the Directors/Trustees, exercising their business
judgment (this person may also be the Committee's "financial expert"). The Board
shall appoint the members of the Audit Committee, on the recommendation of the
Governance Committee.

STATEMENT OF POLICY

The Audit Committee shall assist the Board in monitoring (1) the accounting and
reporting policies and practices of the Management Investment Companies
(hereafter referred to as "Funds" or individually "Fund"), (2) the quality and
integrity of the financial statements of the Funds, (3) the Funds' compliance
with legal and regulatory requirements and (4) the independent auditors'
qualifications and independence, and the performance of the internal audit
function and independent auditors. In doing so, the Audit Committee shall seek
to maintain free and open means of communication among the Directors/Trustees,
the independent auditors, the internal auditors and the management of Nuveen.
The Audit Committee shall meet periodically with Nuveen management, the Funds'
internal auditor, and the Funds' independent auditors, in separate executive
sessions.

The Audit Committee shall have the authority and resources in its discretion to
retain special legal, accounting or other consultants to advise the Committee.
The Audit Committee may request any officer or employee of Nuveen Investments,
Inc. (or its affiliates) or the Funds' independent auditors or outside counsel
to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee. The Funds' independent auditors and internal
auditors shall have unrestricted accessibility at any time to Committee members.

C-1

RESPONSIBILITIES

Fund management has the primary responsibility to establish and maintain systems
for accounting, reporting and internal control.

The independent auditors have the primary responsibility to plan and implement
an audit, with proper consideration given to the accounting, reporting and
internal controls. The independent auditors are ultimately accountable to the
Board and Audit Committee. It is the ultimate responsibility of the Audit
Committee to select, retain, evaluate and replace the independent auditors and
to determine their compensation, subject to ratification of the Board, if
required.

In carrying out its responsibilities the Audit Committee believes its policies
and procedures should remain flexible, in order to react to changing conditions
and requirements applicable to the Funds.

The Audit Committee is responsible for the following:

Fund Financial Statements:

1. Reviewing the annual audited financial statements with Fund management and
the independent auditors including major issues regarding accounting and
auditing principles and practices, and the Funds' disclosures in its
periodic reports under "Management's Discussion and Analysis."

2. Requiring the independent auditors to deliver to the Chairman of the
Committee a timely report on any issues relating to the significant
accounting policies, management judgments and accounting estimates or other
matters that would need to be communicated under Statement on Auditing
Standards (SAS) No. 90, Audit Committee Communications (which amended SAS
No. 61, Communication with Audit Committees), that arise during the
auditors' review of the Funds' financial statements, which information the
Chairman shall further communicate to the other members of the Committee, as
deemed necessary or appropriate in the Chairman's judgment.

3. Discussing with management the Funds' press releases regarding dividends, as
well as financial information and guidance provided to analysts and rating
agencies. This discussion may be done generally, consisting of discussing
the types of information to be disclosed and the types of presentations to
be made. The Chairman of the Audit Committee shall be authorized to have
these discussions with management on behalf of the Audit Committee.

4. Discussing with management and the independent auditors significant
financial reporting issues and judgments made in connection with the
preparation of the Funds' financial statements, including any significant
changes in the Funds' selection or application of accounting principles and
any major issues as to the adequacy of the Funds' internal controls and any
special audit steps adopted in light of control deficiencies.

5. Discussing with management and the independent auditors the effect of
regulatory and accounting initiatives on the Funds' financial statements.

6. Reviewing and discussing reports from the independent auditors regarding (a)
all critical accounting policies and practices to be used; (b) all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed

C-2

with management, ramifications of the use of such alternative treatments and
disclosures, and the treatment preferred by the independent auditors; and
(c) other material written communications between the independent auditors
and management, such as any management letter or schedule of unadjusted
differences.

7. Discussing with management the Funds' major financial risk exposures and the
steps management has taken to monitor and control these exposures, including
the Funds' risk assessment and risk management policies.

8. Reviewing disclosures made to the Audit Committee by the Funds' principal
executive officer and principal financial officer during their certification
process for the Funds' periodic reports about any significant deficiencies
in the design or operation of internal controls or material weaknesses
therein and any fraud involving management or other employees who have a
significant role in the Funds' internal controls.

With respect to the independent auditors:

1. Appointing or replacing the independent auditors, subject, if applicable,
only to Board and shareholder ratification; and compensating and overseeing
the work of the independent auditor (including the resolution of
disagreements between management and the independent auditor regarding
financial reporting), who shall report directly to the Audit Committee, for
the purpose of preparing or issuing an audit report or related work.

2. Meeting with the independent auditors and Fund management to review the
scope, fees, audit plans and staffing for the audit, for the current year.
At the conclusion of the audit, reviewing such audit results, including the
independent auditors' evaluation of the Funds' financial and internal
controls, any comments or recommendations of the independent auditors, any
audit problems or difficulties and management's response, any significant
changes required from the originally planned audit programs and any
adjustments to such statements recommended by the auditors.

3. Pre-approving all audit services and permitted non-audit services (including
the fees and terms thereof) to be performed for the Funds by their
independent auditors, subject to the de minimis exceptions for non-audit
services described in Section 10A of the Exchange Act that the Audit
Committee approves prior to the completion of the audit. The Chairman of the
Audit Committee shall be authorized to give pre-approvals of such non-audit
services on behalf of the Audit Committee.

4. Obtaining and reviewing a report from the independent auditors at least
annually (including a formal written statement delineating all relationships
between the auditors and the Funds) regarding (a) the independent auditor's
internal quality-control procedures; (b) any material issues raised by the
most recent internal quality-control review, or peer review, of the firm, or
by an inquiry or investigation by governmental or professional authorities
within the preceding five years, respecting one or more independent audits
carried out by the firm; (c) any steps taken to deal with any such issues;
and (d) all relationships between the independent auditor and the Funds and
their affiliates; and evaluating the qualifications, performance and
independence of the independent auditor, including their membership in the
SEC practice section of the AICPA and their compliance with all applicable
requirements for independence and peer review, and a review and evaluation
of the lead partner, taking into account the opinions

C-3

of management and the internal auditors, and discussing such reports with
the independent auditors. The Audit Committee shall present its conclusions
with respect to the independent auditor to the Board.

5. Reviewing any reports from the independent auditors mandated by Section
10A(b) of the Exchange Act regarding any illegal act detected by the
independent auditor (whether or not perceived to have a material effect on
the Funds' financial statements) and obtaining from the independent auditors
any information about illegal acts in accordance with Section 10A(b).

6. Ensuring the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law, and further considering the rotation
of the independent auditor firm itself.

7. Recommending to the Board of Directors policies for the Funds' or the
Adviser's hiring of employees or former employees of the independent auditor
who participated in the audit of the Funds.

With respect to any internal auditor:

1. Reviewing the internal audit function as it relates to the Funds including
the proposed programs for the coming year. It is not the obligation or
responsibility of the Audit Committee to confirm the independence of any
Nuveen internal auditors performing services relating to the Funds or to
approve any termination or replacement of the Nuveen Manager of Internal
Audit.

2. Receiving a summary of findings from any completed internal audits
pertaining to the Funds and a progress report on the proposed internal audit
plan for the Funds, with explanations for significant deviations from the
original plan.

Other responsibilities:

1. Reviewing with the Funds' and the Adviser's counsel legal matters that may
have a material impact on the Fund's financial statements or compliance
policies.

2. Receiving and reviewing periodic or special reports issued on
exposure/controls, irregularities and control failures related to the Funds.

3. Reviewing with the independent auditors, with any internal auditor and with
Fund management, the adequacy and effectiveness of the accounting and
financial controls of the Funds, and eliciting any recommendations for the
improvement of internal control procedures or particular areas where new or
more detailed controls or procedures are desirable. Particular emphasis
should be given to the adequacy of such internal controls to expose
payments, transactions or procedures that might be deemed illegal or
otherwise improper.

4. Reviewing the reports of examinations by regulatory authorities.

5. Discussing with management and the independent auditor any correspondence
with regulators or governmental agencies that raises material issues
regarding the Funds' financial statements or accounting policies.

C-4

6. Obtaining reports from management with respect to the Funds' policies and
procedures regarding compliance with applicable laws and regulations.

7. Reporting to the Directors/Trustees on the results of the activities of the
Committee.

8. Performing any special reviews, investigations or oversight responsibilities
requested by the Directors/Trustees.

9. Preparing any report required by the rules of the SEC to be included in a
proxy statement for a fund.

10. Reviewing and reassessing annually the adequacy of this charter and
recommending to the Board of Directors/Trustees approval of any proposed
changes deemed necessary or advisable by the Committee.

Although the Audit Committee shall have the authority and responsibilities set
forth in this Charter, it is not the responsibility of the Audit Committee to
plan or conduct audits or to determine that the Funds' financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. That is the responsibility of management and the independent
auditors. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditors or to ensure compliance with laws and regulations.

C-5

APPENDIX D

AMENDED AND RESTATED
NOMINATING AND GOVERNANCE COMMITTEE CHARTER

I. NOMINATING AND GOVERNANCE COMMITTEE: MEMBERSHIP AND PURPOSE

The Nominating and Governance Committee shall be composed entirely of
independent directors of the Board with one independent director elected as
chair of the committee. The term "independent director" as used in this Charter
means any director or trustee who is not an "interested person" of the Funds as
such term is defined in the Investment Company Act of 1940, as amended, and any
rules or regulations adopted thereunder (the "1940 Act").

The purpose of the Committee is to seek, identify and recommend to the Board
qualified candidates for election or appointment to the Funds' Board of
Directors, and matters related thereto. In addition, the Committee oversees
matters of corporate governance, including the evaluation of Board performance
and processes, and assignment and rotation of Committee members, the
establishment of corporate governance guidelines and procedures, to the extent
necessary or desirable, and matters related thereto.

II. BOARD: SELECTION AND TENURE

A. The Committee shall periodically review the composition of the Board of
Directors, including its size and mix of skills, experience, and
background.

B. The Committee shall, as part of the recruitment process, and with the
assistance of its counsel, define and clarify the duties and
responsibilities of Board members. In performing this function, the
Committee shall consider, among other things, legal and fiduciary duties;
expectations regarding preparation, attendance, and participation at
meetings; fund ownership; and limitations on investments.

C. The Committee shall make nominations for director membership on the Board
of Directors, with input from various sources as the committee deems
necessary. The Committee shall evaluate the members of the current Board
of Directors and identify, recruit and evaluate candidates for Board
membership, including evaluation of their independence from the Funds'
investment adviser and other principal service providers, including any
affiliates of such persons, if applicable. The Committee shall consider
the effect of any relationships beyond those delineated in the 1940 Act
and any other applicable federal securities laws and regulations and rules
and regulations of self-regulatory organizations that might impair their
independence, e.g., business, financial or family relationships with the
Funds' investment adviser and service providers, including any affiliates
of such persons.

D. The Committee shall review on an annual basis questionnaires completed by
all directors regarding their independence.

E. The Committee shall periodically review and make recommendations with
regard to the tenure of the directors, including term limits and/or age
limits.

D-1

F. The Committee shall look to many sources for recommendations of qualified
directors. These sources shall include current directors, members of the
management company, current security holders of the Funds, third party
sources and any other persons or entities as may be deemed necessary or
desirable by the Committee. The Committee may, but shall not be required
to, develop and establish additional material elements of the foregoing
policy in furtherance of the objectives and elements currently stated
therein.

G. The Committee may, but shall not be required to, establish necessary or
desirable minimum qualifications to be possessed by all nominees and may
also establish specific qualities or skills to be possessed by one or more
directors.

III. COMMITTEES: SELECTION AND REVIEW

A. Subject to the approval of the full Board, the Committee shall review
committee assignments at least annually and make nominations for director
membership on all committees. The committee shall also recommend to the
full Board the chair of each committee.

B. The Committee shall periodically review and make recommendations to the
full Board regarding the responsibilities and charters of any committee
(other than the Audit Committee) of the Board, the continuing need for
each committee, the need for additional committees, and the need or desire
to combine or reorganize committees.

IV. BOARD: EDUCATION AND OPERATIONS

A. The Committee shall periodically review and make recommendations
concerning continuing education for incumbent directors and appropriate
orientation materials and procedures for new directors.

B. The Committee shall periodically review and make recommendations
concerning the organization of Board of Directors meetings, including the
frequency, timing, content, and agendas of the meetings.

C. The Committee shall evaluate the performance of the Board at least
annually, with a view towards enhancing its effectiveness.

D. The Committee shall establish a process by which security holders will be
able to communicate in writing with members of the Board of Directors via
regular mail. The Manager of Fund Board Relations, or such other person
designated by the Committee, shall assist the Committee in developing and
implementing this process. The process will also provide that the Manager
of Fund Board Relations, or such other person designated by the Committee,
will be appointed to administer the operations of the communications
process established hereunder. Written communications to directors should
be addressed to the Funds at the address of the principal offices of the
Funds, which currently is 333 West Wacker Drive, Chicago, Illinois 60606.
If the communication is intended for a specific director and so indicated
it will be sent only to that director. If a communication does not
indicate a specific director it will be sent to the Chair of the Committee
and the outside counsel to the independent directors for further
distribution as deemed appropriate by such persons. The Committee is
hereby authorized to oversee the administration, implementation and
maintenance of this
D-2

communications process and further develop and refine this process as
deemed necessary or desirable by the Committee.

E. The Committee shall establish a policy relating to attendance by directors
at annual meetings of the Funds.

V. OTHER POWERS AND RESPONSIBILITIES

A. The Committee shall monitor the performance of legal counsel, and any
other service providers (other than the independent auditors, which are
monitored by the Audit Committee) that are chosen by the directors, and
shall supervise counsel for the independent directors.

B. The Committee shall periodically review and make recommendations regarding
director compensation to the full Board of Directors.

C. The Committee shall have the resources and authority to discharge its
responsibilities, including authority to retain special counsel and other
experts or consultants at the expense of the appropriate Fund(s).

D. The Committee shall be authorized to adopt Key Practices to further
develop, clarify and implement its duties and responsibilities as set
forth in this Charter, which Key Practices may be amended and/or restated
from time to time upon the approval of a majority of the members of the
Committee.

D-3

[NUVEEN INVESTMENTS LOGO]

Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606-1286

(800) 257-8787

www.nuveen.com JDD 304

(NUVEEN LOGO)

NUVEEN INVESTMENTS

NUVEEN INVESTMENTS
333 WEST WACKER DR.
CHICAGO IL 60606
WWW.NUVEEN.COM

NUVEEN DIVERSIFIED DIVIDEND AND INCOME FUND
COMMON SHARES

3 EASY WAYS TO VOTE YOUR PROXY

1. Automated Touch Tone Voting: Call toll-free 1-800-690-6903 and follow
the recorded instructions, using your proxy card as a guide.

2. On the internet at www.proxyweb.com, follow the simple instructions
using your proxy card as a guide.

3. Sign, Date and Return this proxy card using the enclosed postage-paid
envelope, to Proxy Tabulator, PO Box 9122, Hingham, MA 02043.

**** CONTROL NUMBER: 999 999 999 999 99 ****

THIS PROXY IS SOLICITED BY THE BOARD OF
THE FUND
FOR AN ANNUAL MEETING OF SHAREHOLDERS, MARCH 24, 2004.

The Annual Meeting of shareholders will be held Wednesday, March 24, 2004 at
10:00 a.m. Central Time, in the 31st floor conference room of Nuveen
Investments, 333 West Wacker Drive, Chicago, Illinois. At this meeting, you will
be asked to vote on the proposal described in the proxy statement attached. The
undersigned hereby appoints Timothy R. Schwertfeger, Jessica R. Droeger and
Gifford R. Zimmerman, and each of them, with full power of substitution, proxies
for the undersigned, to represent and vote the shares of the undersigned at the
Annual Meeting of shareholders to be held on March 24, 2004, or any adjournment
or adjournments thereof.

WHETHER OR NOT YOU PLAN TO JOIN US AT THE MEETING, PLEASE COMPLETE, DATE AND
SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE
WILL BE COUNTED. AS AN ALTERNATIVE, PLEASE CONSIDER VOTING BY TELEPHONE AT (800)
690-6903 OR OVER THE INTERNET (www.proxyweb.com).

Date:
----------------------------------
SIGN HERE EXACTLY AS NAME(S) APPEAR(S)
ON LEFT. (Please sign in Box)

---------------------------------------

NOTE: PLEASE SIGN YOUR NAME EXACTLY AS
IT APPEARS ON THIS PROXY. IF SHARES ARE
HELD JOINTLY, EACH HOLDER MUST SIGN THE
PROXY. IF YOU ARE SIGNING ON BEHALF OF
AN ESTATE, TRUST OR CORPORATION, PLEASE
STATE YOUR TITLE OR CAPACITY.

In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.

PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, SUCH SHARES WILL BE VOTED "FOR" PROPOSAL NO. 1 AND "FOR" THE ELECTION OF
NOMINEES TO THE BOARD.

PLEASE FILL IN ONE OF THE BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2
PENCIL. [X]

PLEASE DO NOT USE FINE POINT PENS.

1. To approve a new sub-advisory agreement between Security Capital
Research & Management Incorporated (the "Sub-Adviser") and Nuveen
Institutional Advisory Corp. ("NIAC"), the Fund's investment adviser,
on behalf of the Fund.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. Election of Board Members:

(01) William E. Bennett (06) William L. Kissick FOR NOMINEES WITHHOLD
(02) Robert P. Bremner (07) Thomas E. Leafstrand listed at left AUTHORITY
(03) Lawrence H. Brown (08) Peter R. Sawers (except as marked to vote for all
(04) Jack B. Evans (09) Judith M. Stockdale to the contrary) nominees listed
(05) Anne E. Impellizzeri (10) Sheila W. Wellington [ ] at left
[ ]

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE THE NUMBER(S) OF THE NOMINEE(S) ON
THE LINE PROVIDED BELOW.)

- -----------------------------------------------------------------

PLEASE SIGN ON REVERSE SIDE

(NUVEEN LOGO)

NUVEEN INVESTMENTS

NUVEEN INVESTMENTS
333 WEST WACKER DR.
CHICAGO IL 60606
WWW.NUVEEN.COM

NUVEEN DIVERSIFIED DIVIDEND AND INCOME FUND
FUNDPREFERRED SHARES

3 EASY WAYS TO VOTE YOUR PROXY

1. Automated Touch Tone Voting: Call toll-free 1-800-690-6903 and follow
the recorded instructions, using your proxy card as a guide.

2. On the internet at www.proxyweb.com, follow the simple instructions
using your proxy card as a guide.

3. Sign, Date and Return this proxy card using the enclosed postage-paid
envelope, to Proxy Tabulator, PO Box 9122, Hingham, MA 02043.

**** CONTROL NUMBER: 999 999 999 999 99 ****

THIS PROXY IS SOLICITED BY THE BOARD OF
THE FUND
FOR AN ANNUAL MEETING OF SHAREHOLDERS, MARCH 24, 2004.

Date:
---------------------------------
SIGN HERE EXACTLY AS NAME(S) APPEAR(S)
ON LEFT. (Please sign in Box)

---------------------------------------

In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.

PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, SUCH SHARES WILL BE VOTED "FOR" PROPOSAL NO. 1 AND "FOR" THE ELECTION OF
NOMINEES TO THE BOARD.

PLEASE FILL IN ONE OF THE BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2
PENCIL. [X]

PLEASE DO NOT USE FINE POINT PENS.

1. To approve a new sub-advisory agreement between Security Capital
Research & Management Incorporated (the "Sub-Adviser") and Nuveen
Institutional Advisory Corp. ("NIAC"), the Fund's investment adviser,
on behalf of the Fund.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. Election of Board Members:

(01) William E. Bennett (07) Thomas E. Leafstrand FOR NOMINEES WITHHOLD
(02) Robert P. Bremner (08) Peter R. Sawers listed at left AUTHORITY
(03) Lawrence H. Brown (09) William J. Schneider (except as marked to vote for all
(04) Jack B. Evans (10) Timothy R. Schwertfeger to the contrary) nominees listed
(05) Anne E. Impellizzeri (11) Judith M. Stockdale [ ] at left
(06) William L. Kissick (12) Sheila W. Wellington [ ]

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE THE NUMBER(S) OF THE NOMINEE(S) ON
THE LINE PROVIDED BELOW.)

- -----------------------------------------------------------------

PLEASE SIGN ON REVERSE SIDE