<PAGE>

                                                                     Exhibit h.6

                        ADDITIONAL COMPENSATION AGREEMENT

        ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of
February __, 2005, between Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and PA Fund Management LLC ("PAFM").

        WHEREAS, NFJ Dividend, Interest & Premium Strategy Fund (including any
successor by merger or otherwise, the "Trust") is a diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and its common shares are registered under
the Securities Act of 1933, as amended;

        WHEREAS, PAFM is the investment advisor of the Trust;

        WHEREAS, Merrill Lynch is acting as a co-manager in an offering (the
"Offering") of the Trust's common shares, par value $.00001 (the "Common
Shares");

        WHEREAS, PAFM desires to provide additional compensation to Merrill
Lynch for acting as an underwriter in the Offering; and

        WHEREAS, PAFM desires to retain Merrill Lynch to provide after-market
support services designed to maintain the visibility of the Trust on an ongoing
basis, and Merrill Lynch is willing to render such services;

        NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:

1.      (a)     PAFM hereby employs Merrill Lynch, for the period and on the
        terms and conditions set forth herein, to provide the following services
        at the reasonable request of PAFM:

                (1)     after-market support services designed to maintain the
                        visibility of the Trust on an ongoing basis.

                (2)     relevant information, studies or reports regarding
                        general trends in the closed-end investment company and
                        asset management industries, if reasonably obtainable,
                        and consult with representatives of PAFM in connection
                        therewith; and

                (3)     information to and consult with PAFM with respect to
                        applicable strategies designed to address market value
                        discounts, if any.

        (b)     At the request of PAFM, Merrill Lynch shall limit or cease any
                action or service provided hereunder to the extent and for the
                time period requested by PAFM; provided, however, that pending
                termination of this Agreement as provided for in Section 6
                hereof, any such limitation or cessation shall not relieve PAFM
                of its payment obligations pursuant to Section 2 hereof.

        (c)     Merrill Lynch will promptly notify PAFM if it learns of any
                material inaccuracy or misstatement in, or material omission
                from, any written information, as of the date such information
                was published, provided by Merrill Lynch to PAFM in connection
                with the performance of services by Merrill Lynch under this
                Agreement.

<PAGE>

2.      PAFM shall pay Merrill Lynch a fee computed weekly and payable quarterly
        in arrears commencing March 1, 2005, at an annualized rate of 0.15% of
        the Trust's average daily total managed assets (as such term is defined
        in the Prospectus dated February 23, 2005) (including any assets
        attributable to any preferred shares that may be outstanding)
        attributable to the Common Shares sold by Merrill Lynch in the offering
        for a term as described in Section 5 hereof. The maximum service fees
        payable by PAFM hereunder shall be four and one-half percent (4.5%) of
        the aggregate initial public offering price for the Common Shares
        purchased pursuant to the underwriting agreement, dated February __,
        2005, by and among the Trust, PAFM and each of the underwriters named
        therewith (the "Underwriting Agreement"), minus (i) the amount payable
        by the Trust to the Underwriters pursuant to Section 6 of the
        Underwriting Agreement for reimbursement of underwriter's counsel fees
        of $15,000 or _______%, and for partial reimbursement of certain
        underwriter expenses, which amount is equal to $.005 per share of Common
        Shares, and will not exceed $________, or _____% of the total initial
        price to the public of the Common Shares (including Firm and Option
        Shares) (ii) the amount payable by PAFM to UBS Securities LLC pursuant
        to the Additional Compensation Agreement dated           , 2005, which
        amount shall equal $            which is equal to % of the total initial
        price to the public of the Common Shares (including firm and optional
        shares) and (iii) the amount payable to PAFM to Citigroup Global
        Markets Inc. pursuant to the Structuring Fee Agreement dated,
        2005 which amount shall equal $            which is equal
        to            % of the total initial price to the public of the Common
        Shares (including firm and optional shares).

3.      PAFM acknowledges that the services of Merrill Lynch provided for
        hereunder do not include any advice as to the value of securities or
        regarding the advisability of purchasing or selling any securities for
        the Trust's portfolio. No provision of this Agreement shall be
        considered as creating, nor shall any provision create, any obligation
        on the part of Merrill Lynch, and Merrill Lynch is not hereby agreeing,
        to: (i) furnish any advice or make any recommendations regarding the
        purchase or sale of portfolio securities or (ii) render any opinions,
        valuations or recommendations of any kind or to perform any such similar
        services in connection with providing the services described in Section
        1 hereof.

4.      Nothing herein shall be construed as prohibiting Merrill Lynch or its
        affiliates from providing similar or other services to any other clients
        (including other registered investment companies or other investment
        advisors), so long as Merrill Lynch's services to PAFM are not impaired
        thereby.

5.      The term of this Agreement shall commence upon the date referred to
        above and shall be in effect so long as PAFM acts as the investment
        advisor to the Trust pursuant to the Management Agreement (as such term
        is defined in the Underwriting Agreement) or other subsequent advisory
        agreement In the event the offering is terminated, Merrill Lynch may not
        receive compensation except a reimbursement of actual and reasonable out
        of pocket expenses in accordance with Conduct Rule 2710(f)(2)(D) of the
        National Association of Securities Dealers, Inc..

6.      PAFM will furnish Merrill Lynch with such information as Merrill Lynch
        reasonably requests in connection with performing its services (all such
        information so furnished being the "Information"). PAFM recognizes and
        confirms that Merrill Lynch (a) will use and rely primarily on the
        Information and on information available from generally recognized
        public sources in performing the services contemplated by this Agreement
        without having independently verified the same and (b) does not assume
        responsibility for the accuracy or completeness of the Information and
        such other information. To the best of PAFM's knowledge, the Information
        to be furnished by PAFM when delivered, will be true and correct in all
        material respects and will

                                        2

<PAGE>

        not contain any material misstatement of fact or omit to state any
        material fact necessary to make the statements contained therein not
        misleading. PAFM will promptly notify Merrill Lynch if it learns of any
        material inaccuracy or misstatement in, or material omission from, any
        Information delivered to Merrill Lynch. Merrill Lynch agrees to keep
        such information confidential to the extent permitted by law for a
        period of two years.

7.      PAFM agrees that Merrill Lynch shall have no liability to PAFM or the
        Trust for any act or omission to act by Merrill Lynch in the course of
        its performance under this Agreement, in the absence of gross negligence
        or willful misconduct on the part of Merrill Lynch. PAFM agrees to the
        indemnification and other agreement set forth in the Indemnification
        Agreement attached hereto, the provisions of which are incorporated
        herein by reference and shall survive the termination, expiration or
        supersession of this Agreement.

8.      This Agreement and any claim, counterclaim or dispute of any kind or
        nature whatsoever arising out of or in any way relating to this
        Agreement ("Claim") shall be governed by and construed in accordance
        with the laws of the State of New York.

9.      No Claim may be commenced, prosecuted or continued in any court other
        than the courts of the State of New York located in the City and County
        of New York or in the United States District Court for the Southern
        District of New York, which courts shall have exclusive jurisdiction
        over the adjudication of such matters, and PAFM and Merrill Lynch
        consent to the jurisdiction of such courts and personal service with
        respect thereto. Each of Merrill Lynch and PAFM waives all right to
        trial by jury in any proceeding (whether based upon contract, tort or
        otherwise) in any way arising out of or relating to this Agreement. PAFM
        agrees that a final judgment in any proceeding or counterclaim brought
        in any such court shall be conclusive and binding upon PAFM and may be
        enforced in any other courts to the jurisdiction of which PAFM is or may
        be subject, by suit upon such judgment.

10.     This Agreement may not be assigned by either party without the prior
        written consent of the other party.

11.     This Agreement (including the attached Indemnification Agreement)
        embodies the entire agreement and understanding between the parties
        hereto and supersedes all prior agreements and understandings relating
        to the subject matter hereof. If any provision of this Agreement is
        determined to be invalid or unenforceable in any respect, such
        determination will not affect such provision in any other respect or any
        other provision of this Agreement, which will remain in full force and
        effect. This Agreement may not be amended or otherwise modified or
        waived except by an instrument in writing signed by both Merrill Lynch
        and PAFM.

12.     All notices required or permitted to be sent under this Agreement shall
        be sent, if to PAFM:

        PA Fund Management LLC
        1345 Avenue of the Americas
        New York, New York 10105
        Attention: Brian Shlissel

        or if to Merrill Lynch:

        Merrill Lynch & Co.
        Merrill Lynch, Pierce, Fenner & Smith

                                        3

<PAGE>

                Incorporated
        4 World Financial Center
        New York, New York 10080
        Attention:  Tina Singh

        or such other name or address as may be given in writing to the other
        parties. Any notice shall be deemed to be given or received on the third
        day after deposit in the US mail with certified postage prepaid or when
        actually received, whether by hand, express delivery service or
        facsimile transmission, whichever is earlier.

13.     This Agreement may be executed in separate counterparts, each of which
        is deemed to be an original and all of which taken together constitute
        one and the same agreement.

                         [signatures on following page]

                                        4

<PAGE>

        IN WITNESS WHEREOF, the parties hereto have duly executed this
Additional Compensation Agreement as of the date first above written.

PA FUND MANAGEMENT LLC                  MERRILL LYNCH & CO.
                                        MERRILL LYNCH, PIERCE, FENNER & SMITH
                                         INCORPORATED

By:                                     By:
   ---------------------------------       --------------------------------
   Name:                                   Name:
   Title:                                  Title:

                                        5

<PAGE>

                  Merrill Lynch & Co. Indemnification Agreement

                                                               February __, 2005

Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
        Incorporated
4 World Financial Center
New York, New York 10080

Ladies and Gentlemen:

        In connection with the engagement of Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to advise and assist the
undersigned (together with its affiliates and subsidiaries, referred to as the
"Company") with the matters set forth in the Additional Compensation Agreement
dated February __, 2005 between the Company and Merrill Lynch (the "Agreement"),
in the event that Merrill Lynch becomes involved in any capacity in any claim,
suit, action, proceeding, investigation or inquiry (including, without
limitation, any shareholder or derivative action or arbitration proceeding)
(collectively, a "Proceeding") in connection with any matter in any way relating
to or referred to in the Agreement or arising out of the matters contemplated by
the Agreement, the Company agrees to indemnify, defend and hold Merrill Lynch
harmless to the fullest extent permitted by law, from and against any losses,
claims, damages, liabilities and expenses in connection with any matter in any
way relating to or referred to in the Agreement or arising out of the matters
contemplated by the Agreement, except to the extent that it shall be determined
by a court of competent jurisdiction in a judgment that has become final in that
it is no longer subject to appeal or other review, that such losses, claims,
damages, liabilities and expenses resulted solely from the gross negligence or
willful misconduct of Merrill Lynch. In addition, in the event that Merrill
Lynch becomes involved in any capacity in any Proceeding in connection with any
matter in any way relating to or referred to in the Agreement or arising out of
the matters contemplated by the Agreement, the Company will reimburse Merrill
Lynch for its reasonable legal and other expenses incurred by Merrill Lynch in
connection therewith. If such indemnification were not to be available for any
reason, the Company agrees to contribute to the losses, claims, damages,
liabilities and expenses involved (i) in the proportion appropriate to reflect
the relative benefits received or sought to be received by the Company and its
shareholders and affiliates and other constituencies, on the one hand, and
Merrill Lynch, on the other hand, in the matters contemplated by the Agreement
or (ii) if (but only if and to the extent) the allocation provided for in clause
(i) is for any reason held unenforceable, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company and its shareholders and affiliates, on the one
hand, and the party entitled to contribution, on the other hand, as well as any
other relevant equitable considerations. The Company agrees that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Company and its shareholders and affiliates, on the one hand,
and the party entitled to contribution, on the other hand, of a transaction as
contemplated shall be deemed to be in the same proportion that the total value
received or paid or contemplated to be received or paid by the Company or its
shareholders or affiliates, as the case may be, as a result of or in connection
with the transaction (whether or not consummated) for which Merrill Lynch has
been retained to perform services bears to the fees paid to Merrill Lynch under
the Agreement; provided, that in no event shall the Company contribute less than
the amount necessary to assure that Merrill Lynch is not liable for losses,

                                        6

<PAGE>

claims, damages, liabilities and expenses in excess of the amount of fees
actually received by Merrill Lynch pursuant to the Agreement. Relative fault
shall be determined by reference to, among other things, whether any alleged
untrue statement or omission or any other alleged conduct relates to information
provided by the Company or other conduct by the Company (or its employees or
other agents), on the one hand, or by Merrill Lynch, on the other hand. The
Company will not settle any Proceeding in respect of which indemnity may be
sought hereunder, whether or not Merrill Lynch is an actual or potential party
to such Proceeding, without Merrill Lynch's prior written consent. For purposes
of this Indemnification Agreement, Merrill Lynch shall include Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, any of its affiliates,
each other person, if any, controlling Merrill Lynch or any of its affiliates,
their respective officers, current and former directors, employees and agents,
and the successors and assigns of all of the foregoing persons. The foregoing
indemnity and contribution agreement shall be in addition to any rights that any
indemnified party may have at common law or otherwise.

        The Company agrees that neither Merrill Lynch nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability to
the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either Merrill Lynch's engagement
under the Agreement or any matter referred to in the Agreement, including,
without limitation, related services and activities prior to the date of the
Agreement, except to the extent that it shall be determined by a court of
competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review that any losses, claims, damages,
liabilities or expenses incurred by the Company resulted solely from the gross
negligence or willful misconduct of Merrill Lynch in performing the services
that are the subject of the Agreement.

        THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS SET FORTH BELOW,
NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT OTHER THAN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICH
COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS,
AND THE COMPANY AND MERRILL LYNCH CONSENT TO THE JURISDICTION OF SUCH COURTS AND
PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANY HEREBY CONSENTS TO PERSONAL
JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY CLAIM ARISING OUT OF
OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY ANY THIRD PARTY AGAINST
MERRILL LYNCH OR ANY INDEMNIFIED PARTY. EACH OF MERRILL LYNCH AND THE COMPANY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR CLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY PROCEEDING OR CLAIM
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT IN ANY SUCH
COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND MAY BE ENFORCED IN
ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT,
BY SUIT UPON SUCH JUDGMENT.

                                        7

<PAGE>

        The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of Merrill Lynch's engagement. This
Indemnification Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.

                                        Very truly yours,

                                        PA FUND MANAGEMENT LLC

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:

Accepted and agreed to as of
the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
        INCORPORATED

By
   ------------------------------------
   Name:
   Title:
                                        8