<PAGE>
As filed with the Securities and Exchange Commission on November 13, 1997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[_]
Registration No. 333-33607
Pre-Effective Amendment No. 1
[X]
Post-Effective Amendment No.
--- [_]
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[_]
Registration No. 811-8333
Amendment No. 1
[X]
NUVEEN INVESTMENT TRUST II
(Exact Name of Registrant as Specified in Declaration of Trust)
333 West Wacker Drive, Chicago, 60606
Illinois (Zip Code)
(Address of Principal Executive
Offices)
Registrant's Telephone Number, Including Area Code: (312) 917-7700
Copies to:
Gifford R. Zimmerman Eric F. Fess Janet D. Olsen
333 West Wacker Drive Chapman and Cutler Bell, Boyd & Lloyd
Chicago, Illinois 60606 111 West Monroe Street Three First National
Chicago, Illinois 60603 Plaza, #3300
Chicago, Illinois 60602
(Name and Address of Agent for Service)
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
hereby declares that an indefinite number of shares of beneficial interest of
Registrant are being registered under the Securities Act of 1933.
Registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until registrant shall file a fur-
ther amendment which specifically states that this registration statement shall
thereafter become effective in accordance with section 8(a) of the Securities
Act of 1933, or until the registration statement shall become effective on such
date as the Commission, acting pursuant to said section 8(a), may determine.
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<PAGE>
CONTENTS
OF
REGISTRATION STATEMENT
This Registration Statement comprises the following papers and contents:
The Facing Sheet
Cross-Reference Sheet
Part A-Prospectus for Nuveen Rittenhouse Growth Fund
Part B-Statement of Additional Information for Nuveen Ritten-
house Growth Fund
Part C-Other Information
Signatures
Index to Exhibits
Exhibits
<PAGE>
NUVEEN INVESTMENT TRUST II
-----------------
CROSS REFERENCE SHEET
PART A--PROSPECTUS
<TABLE>
<CAPTION>
ITEM IN PART A
OF FORM N-1A PROSPECTUS LOCATION
-------------- -------------------
<S> <C>
1 Cover Page Cover Page
2 Synopsis Summary of Fund Expenses; How to Determine If
The Fund Is Right For You; Summary Information
about the Fund
3 Condensed Financial Not Applicable
Information
4 General Description of General Information; Additional Information about
Registrant the Fund's Investments
5 Management of the Fund Summary of Fund Expenses; Who Is Responsible
for the Operation of the Fund; Management of
the Fund; General Information
5A Management's Discussion Not Applicable
of Fund
Performance
6 Capital Stock and Other General Information; Distributions and Taxes
Securities
7 Purchase of Securities Flexible Purchase Options; How to Buy Fund
Being Offered Shares; Distribution and Service Plan;
Management of the Fund; Net Asset Value
8 Redemption or Repurchase How to Redeem Fund Shares
9 Pending Legal Not Applicable
Proceedings
</TABLE>
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
ITEM IN PART A LOCATION IN STATEMENT
OF FORM N-1A OF ADDITIONAL INFORMATION
-------------- -------------------------
<S> <C>
10 Cover Page Cover Page
11 Table of Contents Cover Page
12 General Information and Not Applicable
History
13 Investment Objectives Investment Policies and Restrictions; Investment
and Policies Policies and Techniques
14 Management of the Fund Management
15 Control Persons and Management
Principal Holders of
Securities
16 Investment Advisory and Fund Manager and Portfolio Manager; Distribution
Other Services and Service Plans; Independent Public Accountants
and Custodian
17 Brokerage Allocation and Portfolio Transactions
Other Practices
18 Capital Stock and Other See "General Information" in the Prospectus
Securities
19 Purchase, Redemption and Additional Information on the Purchase and
Pricing of Redemption of Fund Shares; Distribution and
Securities Service Plans; Net Asset Value
20 Tax Status Tax Matters
21 Underwriters Additional Information on the Purchase and
Redemption of Fund Shares; See "How to Buy
Fund Shares" and "Management of the Funds" in
the Prospectus
22 Calculation of Performance Information
Performance Data
23 Financial Statements Statement of Net Assets
</TABLE>
<PAGE>
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NUVEEN RITTENHOUSE GROWTH FUND
Prospectus
November , 1997
The NUVEEN RITTENHOUSE GROWTH FUND (the "Fund") is a mutual fund that seeks to
provide long-term growth of capital by investing in a diversified portfolio
consisting primarily of equity securities traded in U.S. securities markets of
large capitalization companies that have a history of consistent earnings and
dividend growth. The Fund's portfolio manager is Rittenhouse Financial Servic-
es, Inc. ("Rittenhouse"), a wholly-owned subsidiary of the John Nuveen Company.
The Fund offers you Flexible Purchase Options, which provide the flexibility to
purchase Fund shares in the same manner you typically make other mutual fund
investments. You may choose from one of four alternative classes of Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. Your financial ad-
viser will be able to assist you in determining which share class is best for
you. See "Flexible Purchase Options," "How to Buy Fund Shares" and "Summary of
Fund Expenses."
The Fund is a series of Nuveen Investment Trust II (the "Trust"). This Prospec-
tus contains information you should know before investing in the Fund. Please
retain it for future reference. You can find more detailed information about
the Fund in the Statement of Additional Information dated November , 1997, as
amended from time to time. For a free copy of this Statement, write to the
Nuveen Mutual Funds, 333 West Wacker Drive, Chicago, IL 60606, or call Nuveen
toll-free at 800-621-7227. The Statement has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guaranteed or en-
dorsed by, any bank and are not federally insured by the Federal Deposit Insur-
ance Corporation, the Federal Reserve Board, or any other agency. Shares of the
Fund involve investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PAGE 1
<PAGE>
<TABLE>
<C> <C> <S>
CONTENTS
3 SUMMARY OF FUND EXPENSES
4 SUMMARY INFORMATION ABOUT THE FUND
4 INVESTMENT OBJECTIVE
4 HOW THE FUND PURSUES ITS OBJECTIVE
4 PERFORMANCE OF THE PORTFOLIO MANAGER
5 HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
5 FUND FEATURES AND BENEFITS
6 RISKS AND SPECIAL CONSIDERATIONS
6 WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
6 ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
9 FLEXIBLE PURCHASE OPTIONS
10 HOW TO BUY FUND SHARES
15 DISTRIBUTION AND SERVICE PLAN
16 HOW TO REDEEM FUND SHARES
18 MANAGEMENT OF THE FUND
19 HOW THE FUND SHOWS PERFORMANCE
19 DISTRIBUTIONS AND TAXES
19 NET ASSET VALUE
20 GENERAL INFORMATION
</TABLE>
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PAGE 2
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SUMMARY OF FUND EXPENSES
The purpose of the tables below is to help you understand all expenses and fees
that you would bear directly or indirectly as a Fund shareholder. The percent-
ages shown are estimated for the current fiscal year. Actual fees and expenses
may be greater or less than those shown. An example of how the expenses work
follows these tables.
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<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES (AS A
PERCENT OF OFFERING PRICE)(1) CLASS A CLASS B CLASS C CLASS R(2)
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<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases 5.25%(3) None None None
Maximum Sales Charge Imposed on Reinvested
Dividends None None None None
Exchange Fees None None None None
Deferred Sales Charge (as a percentage of
lesser of purchase price or redemption
proceeds) None(4) 5%(5) 1%(6) None
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</TABLE>
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<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENT OF AVERAGE DAILY
NET ASSETS) CLASS A CLASS B CLASS C CLASS R
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<S> <C> <C> <C> <C>
Management Fees .85% .85% .85% .85%
Rule 12b-1 Fees(7) .25% 1.00% 1.00% None
Other Operating Expenses (after
reimbursement)(8) .25% .25% .25% .25%
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Total Expenses 1.35% 2.10% 2.10% 1.10%
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</TABLE>
(1) Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their materi-
als for details.
(2) Class R Shares are available for purchase only under certain limited cir-
cumstances, or by specified classes of investors. See "How to Buy Fund Shares--
Class R Shares."
(3) Reduced sales charges apply to purchases of $50,000 or more. See "How to
Buy Fund Shares--Class A Shares."
(4) Certain Class A purchases at net asset value of $1 million or more may be
subject to a contingent deferred sales charge of up to 1% if redeemed within 18
months after purchase. See "How to Buy Fund Shares--Class A Shares."
(5) Class B Shares redeemed within six years of purchase are subject to a con-
tingent deferred sales charge of 5% during the first year, 4% during the second
and third years, 3% during the fourth year, 2% during the fifth year, and 1%
during the sixth year.
(6) Class C Shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(7) Class A, Class B and Class C Shares are subject to an annual service fee of
.25% of the average daily net assets to compensate Authorized Dealers for ongo-
ing account services. In addition, Class B and Class C Shares are subject to
annual distribution fees of .75% of the average daily net assets to reimburse
Nuveen for costs in connection with the sale of Fund shares. See "Distribution
and Service Plan." Long-term holders of Class B and Class C Shares may pay more
in Rule 12b-1 fees than the economic equivalent of the maximum front-end sales
charge permitted under the National Association of Securities Dealers Rules of
Fair Practice.
(8) The investment adviser has agreed to waive fees and reimburse expenses
through July 31, 1998, in order to prevent Total Expenses (excluding any dis-
tribution or service fees and extraordinary expenses) from exceeding 1.10% of
the average daily net asset value of any class of Fund shares. Absent expense
reimbursement, "Other Operating Expenses" and "Total Expenses" are estimated to
be .35% and 1.20% respectively.
EXAMPLE*
For the Fund, you would pay the following expenses on a $1,000 investment over
various time periods, assuming (1) a 5% annual rate of return and (2) redemp-
tion at the end of each time period:
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<TABLE>
<CAPTION>
1 YEAR 3 YEARS
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<S> <C> <C>
Class A $66 $93
Class B** $61 $97
Class C*** $21 $66
Class R $11 $35
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</TABLE>
*THIS EXAMPLE DOES NOT REPRESENT PAST OR FUTURE EXPENSES, WHICH MAY BE GREATER
OR LESS THAN THOSE SHOWN. Moreover, the Fund's actual rate of return may be
greater or less than the hypothetical 5% return shown in this example. This ex-
ample assumes that the percentage amounts listed under Annual Operating Ex-
penses remain the same in each of the periods. For additional information about
the Fund's fees and expenses, see "Distribution and Service Plan" and "Manage-
ment of the Fund."
**Assumes that the shareholder redeemed at the end of each holding period and
the contingent deferred sales charge was applied as follows: 1 year (4%), and 3
years (3%). If instead the shareholder had redeemed prior to the end of each
holding period, the expenses would have been as follows: 1 year $70 and 3 years
$107. See "How to Buy Fund Shares--Class B Shares."
***Assumes that the shareholder redeemed at the end of the first year and the
contingent deferred sales charge was not applicable for any of the periods
shown. If instead the shareholder had redeemed before the end of the first
year, the expenses in the first year would have been $31. See "How to Buy Fund
Shares--Class C Shares."
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PAGE 3
<PAGE>
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SUMMARY INFORMATION ABOUT THE FUND
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INVESTMENT OBJECTIVE
The Fund seeks to provide long-term growth of capital by investing in a diver-
sified portfolio consisting primarily of equity securities traded in U.S. secu-
rities markets of large capitalization companies that have a history of consis-
tent earnings and dividend growth. The investment objective may not be changed
without shareholder approval. There is no assurance that this objective will be
realized.
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HOW THE FUND PURSUES ITS
OBJECTIVE
The Fund invests primarily in equity securities traded in U.S. securities mar-
kets of large capitalization companies that have a history of consistent earn-
ings and dividend growth ("blue chip companies"). Blue chip companies are gen-
erally characterized by their substantial capitalization, established history
of earnings and dividends, ready access to credit, industry leadership position
and superior management structure. As a result, blue chip companies have his-
torically exhibited less investment risk and price volatility than companies
lacking these high-quality characteristics. In addition, the large market of
publicly-held shares for these companies and substantial daily trading volume
create a relatively high degree of liquidity for their stocks. The Fund will
ordinarily invest at least 65% of its total assets in the equity securities of
blue chip companies.
From the universe of all equity securities traded in U.S. securities markets,
Rittenhouse first identifies stocks of those large-capitalization companies
(i.e. companies with an aggregate market capitalization of at least $5 billion
under current market conditions) that have a financial strength rating of A or
better by Standard & Poor's or Value Line and a history of consistent, predict-
able earnings and dividend growth. Rittenhouse then selects the industries with
the most attractive potential based upon its evaluation of current market con-
ditions and long-term industry growth trends. Through fundamental analysis,
Rittenhouse seeks to identify the companies within these industries that have a
demonstrated leadership position and offer sustained growth opportunities at
reasonable valuations relative to historical levels. The 25 to 50 stocks that
Rittenhouse believes represent the best mix of sustained growth opportunities
at reasonable valuations are selected for the fund's portfolio. For additional
information regarding the Fund's portfolio investments, see "Additional Infor-
mation About the Fund's Investments."
Certain of the Fund's investment policies are designed to reduce taxable dis-
tributions with a view toward enhancing the Fund's after-tax returns. Because
the Fund invests in stocks with low dividend yields, the Fund expects to dis-
tribute relatively little, if any, taxable dividend income. The Fund antici-
pates minimizing realized short-term and long-term capital gains as a result of
its low portfolio turnover rate and generally long holding periods for its in-
vestments. When a stock is sold, Rittenhouse will seek to minimize gains real-
ized by selling shares with the highest cost basis first and, where consistent
with the Fund's investment objective, offsetting gains with capital losses re-
alized from the sale of other stocks in the Fund's portfolio.
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PERFORMANCE OF THE PORTFOLIO
MANAGER
The Fund's portfolio manager is Rittenhouse Financial Services, Inc., a wholly
owned subsidiary of the John Nuveen Company. Rittenhouse is an institutional
investment management firm based in Radnor, Pennsylvania with over 18 years of
experience and approximately $9 billion in assets under management.
Rittenhouse's performance results presented below reflect the gross-of-fees re-
turns with dividends reinvested of the Rittenhouse Blended Equity Composite,
adjusted to reflect Class A's projected annual operating expenses (without re-
imbursement) as summarized in the Summary of Fund Expenses on page 3. The Rit-
tenhouse Blended Equity Composite represents the composite performance of the
managed accounts, presently totalling approximately $2.6 billion, for which
Rittenhouse has served as investment adviser and that have substantially the
same investment objectives and policies as the Fund. These accounts are not
subject to all of the same investment restrictions and distribution require-
ments as the Fund, which may affect Fund performance. The Rittenhouse Blended
Equity Composite performance represents past performance and should not be in-
terpreted as indicative of future performance of the Fund.
The chart below assumes that an investor holding a $10,000 Rittenhouse invest-
ment pays the maximum Class A sales charge of 5.25%. The performance results
achieved by Rittenhouse would be different for a comparable Class B, C or R in-
vestment, reflecting the different sales charge and ongoing operating expenses
of each respective class. The S&P 500 returns assume reinvestment of all divi-
dends paid by the stocks included in the index, but do not include brokerage
commissions or other fees an investor would incur by investing in the portfolio
of stocks comprising the index. The current Lipper Growth Fund Index reflects
the average returns with dividends reinvested of the 30 largest funds in the
Lipper Growth Fund Objective. Of the 936 funds in the Lipper Growth Fund
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PAGE 4
<PAGE>
Objective as of September 30, 1997, there were 790, 298 and 179 funds, respec-
tively, with 1-, 5- and 10-year performance records, and 116 funds with rec-
ords extending from composite inception on January 1, 1983 through September
30, 1997. The returns of the Lipper Growth Fund Index do not include the ef-
fect of any sales charges that an investor will incur by purchasing the funds
in the Lipper Growth Fund Objective directly. There can be no assurance that
the Fund's future performance will be comparable to that shown below. All re-
turns and comparisons of returns are calculated on a quarterly basis. See "How
the Fund Shows Performance" for additional information.
GROWTH OF A $10,000 INVESTMENT 1/83-- 9/97
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lipper Growth Consumer Price
Rittenhouse S&P 500 Fund Index Index (inflation)
----------- ------- ------------- -----------------
<S> <C> <C> <C> <C>
Dec-82.............. 9,475 10,000 10,000 10,000
Dec-83.............. 12,008 12,256 12,133 10,380
Dec-84.............. 13,427 13,024 11,698 10,790
Dec-85.............. 18,400 17,156 15,223 11,197
Dec-86.............. 22,399 20,355 17,596 11,323
Dec-87.............. 23,176 21,422 18,170 11,823
Dec-88.............. 27,176 24,971 20,736 12,345
Dec-89.............. 35,885 32,868 26,432 12,919
Dec-90.............. 35,947 31,845 25,001 13,708
Dec-91.............. 47,958 41,524 34,082 14,128
Dec-92.............. 49,949 44,682 36,682 14,538
Dec-93.............. 50,649 49,178 41,074 14,937
Dec-94.............. 51,221 49,821 40,429 15,337
Dec-95.............. 70,081 68,524 53,630 15,726
Dec-96.............. 82,223 84,248 63,008 16,249
Sep-97.............. 103,437 109,201 80,168 16,484
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
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<TABLE>
<CAPTION>
SINCE
COMPOSITE
1 YEAR 5 YEAR 10 YEAR INCEPTION
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<S> <C> <C> <C> <C>
Rittenhouse (Offer) 25.13% 15.59% 12.97% 17.16%
Rittenhouse (NAV) 32.06% 16.84% 13.58% 17.59%
Lipper Growth Fund Index 34.61% 18.91% 13.37% 15.16%
S&P 500 40.43% 20.75% 14.73% 17.60%
</TABLE>
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HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
WHO SHOULD INVEST
The Fund may be a suitable investment if:
. you are seeking a conservative growth stock fund as the core of a diversi-
fied investment plan
. you wish to build and protect wealth over time through prudent capital man-
agement
. you have a long-term investment horizon
WHO SHOULD NOT INVEST
The Fund may not be a suitable investment if:
. you are unwilling to accept share price fluctuation, including the possibil-
ity of sharp price declines
. you have a short-term investment horizon
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FUND FEATURES AND BENEFITS
LOW MINIMUM INVESTMENT
You can start your investment with a low initial purchase of $3,000 ($1,000
for an Individual Retirement Account) in a particular share class. Additional
investments can be made for as little as $50. Reinvestment of Nuveen Unit
Trust distributions has no purchase minimums. Purchases through sponsors of
fee-based programs meeting certain criteria, as described in the Statement of
Additional Information, may be eligible for lower minimums. Exceptions to
these minimums are made for participants in the Fund's automatic deposit,
group purchase or reinvestment programs. The share price you pay will depend
on when Nuveen receives your order: orders received before the close of regu-
lar session trading on the New York Stock Exchange (normally 4:00 p.m. Eastern
time, but sometimes earlier) will receive that day's share price; otherwise
you will receive the next business day's share price. See "How to Buy Fund
Shares" for more details.
FLEXIBLE PURCHASE OPTIONS
The Fund offers four classes of shares--Classes A, B, C and R. Each class of-
fers a different combination of sales charges, ongoing fees, eligibility re-
quirements and other features. This permits you and your financial adviser to
choose the share class which best meets your investment needs. You and your
adviser will want to consider:
. the amount of your current investment
. current holdings in the Fund
. length of time you expect to hold the shares
. timing and amount of any future Fund investments
. other relevant information
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PAGE 5
<PAGE>
See "Flexible Purchase Options," "How to Buy Fund Shares" and "How to Redeem
Fund Shares" for further discussion of the Fund's flexible purchase options.
EXCHANGE PRIVILEGE
Shares of the Fund may be quickly and easily exchanged by telephone, without a
sales charge, for shares of the same or equivalent class of any other Nuveen
Mutual Fund or for shares of certain Nuveen money market funds.
DIVIDEND REINVESTMENT
All income dividends or capital gains paid with respect to each class of shares
will be reinvested automatically into additional shares of the same class with-
out a sales charge, unless you elect to receive them in cash.
INVESTMENT OF NUVEEN UNIT TRUST
DISTRIBUTIONS
Distributions from any Nuveen Unit Trust may be used to buy Class A Shares of
the Fund without a sales charge.
AUTOMATIC DEPOSIT AND WITHDRAWAL PLANS
The Fund offers a number of options to help you manage additions to, and with-
drawals from, your account. These include automatic deposit, direct deposit and
payroll deduction plans for adding to your account on a regular basis. If you
need periodic withdrawals, and own shares totaling $10,000 or more, you can ar-
range to have $50 or more sent directly from your account monthly or quarterly.
ELECTRONIC FUND TRANSFERS
Nuveen's Fund Direct lets you link your Fund account to your account at a bank
or other financial institution. You may use Fund Direct to transfer money elec-
tronically between accounts, to purchase shares by phone, to invest through an
automatic deposit plan, or to send payments directly to your bank account.
TELEPHONE REDEMPTION
You may establish free telephone redemption privileges for your account.
EASY LIQUIDITY
You may redeem all or some of your Fund shares on any business day at the then
net asset value. Class B and Class C Shares, as well as certain Class A pur-
chases at net asset value, may be subject to a contingent deferred sales charge
upon redemption. See "How to Redeem Fund Shares."
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RISKS AND SPECIAL
CONSIDERATIONS
You should consider certain other factors about the Fund before investing.
While stocks over time have provided superior long-term growth potential, stock
prices may decline over short or even extended periods. Stock markets tend to
move in cycles, with periods of rising stock prices and periods of falling
stock prices. Accordingly, the Fund should be considered a long-term invest-
ment, designed to provide the best results when held for a multi-year period.
The Fund may not be a suitable investment if you have a short-term investment
horizon or are unwilling to accept fluctuations in share price, including sig-
nificant declines over a given period. In addition, investments by the Fund in
equity securities of foreign companies involve opportunities and risks not typ-
ically associated with investing in U.S. companies. There are special risks as-
sociated with options and futures transactions. See "Additional Information
About the Fund's Investments."
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WHO IS RESPONSIBLE FOR
THE OPERATION OF THE FUND?
The following organizations work together to provide the services and features
offered by the Fund:
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<TABLE>
<CAPTION>
ORGANIZATION FUNCTION DUTIES
- -----------------------------------------------------------------------------------
<S> <C> <C>
John Nuveen & Co. Fund Sponsor Sponsors and manages
Incorporated and Principal the offering of Fund
("Nuveen") Underwriter shares
Nuveen Institutional Fund Manager Oversees the Fund's
Advisory Corp. portfolio manager,
("NIAC") manages the Fund's
business affairs and
provides day-to-day
administrative services
to the Fund
Rittenhouse Portfolio Manager Manages the Fund's
investment portfolio
Shareholder Services, Transfer Agent; Maintains shareholder
Inc. ("SSI") Shareholder Services accounts, handles share
Agent; Dividend redemptions and
Paying Agent exchanges and dividend
payments
The Chase Manhattan Custodian Maintains custody of the
Bank ("Chase") Fund's investments and
provides certain
accounting services to
the Fund
</TABLE>
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ADDITIONAL INFORMATION
ABOUT THE FUND'S INVESTMENTS
HOW THE FUND SELECTS INVESTMENTS
The Fund invests primarily in equity securities traded in U.S. securities mar-
kets of large capitalization companies that have a history of consistent earn-
ings and dividend growth ("blue chip companies"). "Traded in U.S. securities
markets" means listed on one or more U.S. exchanges or quoted on the Nasdaq Na-
tional Market. Blue chip companies are generally characterized by their sub-
stantial capitalization, established his-
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PAGE 6
<PAGE>
tory of earnings and dividends, ready access to credit, good industry position
and superior management structure. As a result, blue chip companies have his-
torically exhibited less investment risk and price volatility than companies
lacking these high-quality characteristics. In addition, the large market of
publicly-held shares for these companies and substantial daily trading volume
create a relatively high degree of liquidity for their stocks.
From the universe of all equity securities traded in U.S. securities markets,
Rittenhouse first identifies stocks of those large-capitalization companies
(i.e. companies with an aggregate market capitalization of at least $5 billion
under current market conditions) that have a financial strength rating of A or
better by Standard & Poor's or Value Line and a history of consistent, pre-
dictable earnings and dividend growth. Rittenhouse then selects the industries
with the most attractive potential based upon its evaluation of current market
conditions and long-term industry growth trends. Through fundamental analysis,
Rittenhouse seeks to identify the companies within these industries that have
a demonstrated leadership position and offer sustained growth opportunities at
reasonable valuations relative to historical levels. The 25 to 50 stocks that
Rittenhouse believes represent the best mix of sustained growth opportunities
at reasonable valuations are selected for the fund's portfolio.
EQUITY SECURITIES
Under normal market conditions, the Fund invests primarily in equity securi-
ties of blue chip companies ("Equity Securities"). Equity Securities include
common stocks; preferred stocks; warrants to purchase common stocks or pre-
ferred stocks; securities convertible into common or preferred stocks, such as
convertible bonds and debentures; and other securities with equity character-
istics. The Fund expects to be substantially fully invested in Equity Securi-
ties under normal market conditions, and will invest at least 65% of its total
assets in Equity Securities which do not include warrants or rights to pur-
chase common stock.
Convertible securities must be rated A or higher by Moody's Investors Service
("Moody's") or A or higher by Standard & Poor's ("S&P"), Duff & Phelps, Inc.
("D&P") or Fitch Investors Service, Inc. ("Fitch"). A general description of
ratings may be found in the Statement of Additional Information.
In addition, the Fund may invest up to 15% of its net assets in equity securi-
ties of foreign issuers, either directly in U.S. market-traded securities of
those issuers or indirectly through investments in American Depository Re-
ceipts ("ADRs"), described later in this section.
FIXED-INCOME SECURITIES
When Rittenhouse believes that market conditions warrant a temporary defensive
position, or in order to keep cash on hand fully invested, the Fund may invest
without limitation in cash equivalents and short-term fixed income securities.
Cash equivalents and short-term fixed income securities must be from issuers
having a long-term rating of at least A or higher by S&P, Moody's or Fitch, or
A- or higher by D&P, and having a maturity of one year or less. Such securi-
ties include, without limitation, the following: U.S. government securities
that are either issued or guaranteed by the U.S. Treasury or by U.S. govern-
mental agencies or instrumentalities; certificates of deposit; bank time de-
posits; bankers' acceptances; commercial paper rated A-1 or better by S&P,
Prime-1 or better by Moody's, Duff 2 or higher by D&P, or Fitch 2 or higher by
Fitch; or repurchase agreements entered into only with respect to obligations
of the U.S. government, its agencies or instrumentalities, certificates of de-
posit and bankers acceptances.
A repurchase agreement is a contract under which the Fund would acquire a se-
curity for a relatively short period, and the seller would agree to buy back
such security at a fixed price and time. Repurchase agreements could involve
certain risks in the event of the default or insolvency of the other party to
the agreement, including possible delays or restrictions upon a Fund's ability
to dispose of the underlying securities.
WHEN-ISSUED SECURITIES
In order to lock in a fixed price on a security it intends to purchase, the
Fund may invest without limitation in securities purchased on a when-issued or
delayed delivery basis ("When-Issued Securities"). Although the payment and
terms of these securities are established at the time the purchaser enters
into the commitment, these securities may be delivered and paid for at a fu-
ture date, generally within 45 days. During the period between the purchase
and settlement, no interest or dividends are earned on the When-Issued Securi-
ty, although the Fund continues to earn income on the assets that will be used
to pay for the security. The Fund will segregate and maintain assets having a
value at least equal to the amount of outstanding commitments for When-Issued
Securities at all times. Such securities involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date.
SECURITIES OF FOREIGN ISSUERS
The Fund may invest up to 15% of its net assets in equity securities of for-
eign issuers, either directly in equity securities of those issuers traded in
U.S. securities markets, or indirectly in American Depository Receipts
("ADRs") or other instruments denominated in U.S. dollars that permit indirect
investment in foreign securities. ADRs are receipts typically issued by a U.S.
bank or trust company evidencing ownership of the underlying foreign security
and denominated in U.S. dollars. Neither U.S. exchange listing or Nasdaq quo-
tation nor ADRs eliminate all the risks inherent in investing in foreign is-
suers, such as changes in foreign currency exchange rates. However, by invest-
ing in securities of foreign issuers traded in U.S. securities markets and
ADRs, rather than directly in foreign issuers' stock traded in foreign mar-
kets, the Fund avoids currency risks during the settlement period.
- -------------------------------------------------------------------------------
PAGE 7
<PAGE>
The foreign issuers in which the Fund invests are generally large-capitaliza-
tion companies having characteristics similar to those the Fund seeks in in-
vestments in U.S. issuers and listed on U.S. exchanges.
Investments in securities of foreign issuers involve risks in addition to the
usual risks inherent in domestic investments, including currency risks. The
value of a foreign security in U.S. dollars tends to decrease when the value of
the U.S. dollar rises against the foreign currency in which the security is de-
nominated and tends to increase when the value of the U.S. dollar falls against
such currency.
Some ADRs may not be sponsored by the issuer. ADRs are affected by the fact
that in many countries there is less publicly available information about is-
suers than is available in the reports and ratings published about companies in
the U.S. and companies may not be subject to uniform accounting, auditing and
financial reporting standards. Other risks inherent in foreign investments in-
clude expropriation; confiscatory taxation; withholding taxes on dividends and
interest; less extensive regulation of foreign brokers, securities markets and
issuers; diplomatic developments; and political or social instability. Foreign
economies may differ favorably or unfavorably from the U.S. economy in various
respects, and many foreign securities are less liquid and their prices tend to
be more volatile than comparable U.S. securities. From time to time, foreign
securities may be difficult to liquidate rapidly without adverse price effects.
CERTAIN INVESTMENT STRATEGIES AND LIMITATIONS
The Fund may engage in options and futures transactions, which are sometimes
referred to as derivative transactions. The Fund's options and futures transac-
tions may include instruments such as stock index options and futures con-
tracts. Such transactions may be used for several reasons, including hedging
unrealized portfolio gains. The Fund will only engage in futures and options
transactions that, pursuant to regulations promulgated by the Commodity Futures
Trading Commission (the "CFTC"), constitute bona fide hedging and will not en-
ter into such transactions if the sum of the initial margin deposits and premi-
ums paid for unexpired options exceeds 5% of the Fund's total assets. In addi-
tion, the Fund will not enter into options and futures transactions if more
than 30% of the Fund's net assets would be committed to such instruments.
The ability of the Fund to benefit from options and futures is largely depen-
dent upon Rittenhouse's ability to correctly use such instruments, which may
involve skills different from those associated with managing securities gener-
ally. The Fund could lose money on a futures transaction or an option could ex-
pire worthless, in addition to the Fund suffering a loss on the value of its
portfolio assets. For a further discussion of options and futures transactions,
please see the Statement of Additional Information.
The Fund may lend its portfolio securities, up to 33 1/3% of its total assets,
to broker-dealers or institutional investors. Lending the Fund's portfolio se-
curities can enhance the return earned by the Fund on its investment portfolio,
consistent with its objective of long-term growth of capital. The loans will be
secured continuously by collateral at least equal to the value of the securi-
ties lent by "marking to market" daily. The Fund will continue to receive the
equivalent of the interest or dividends paid by the issuer of the securities
lent and will retain the right to call, upon notice, the lent securities. The
Fund may also receive interest on the investment of the collateral or a fee
from the borrower as compensation for the loan. As with other extensions of
credit, there are risks of delay in recovery or even loss of rights in the col-
lateral should the borrower of the securities fail financially. However, loans
will be made only to firms deemed by the portfolio manager to be of good stand-
ing.
The Fund may invest up to 15% of its net assets in illiquid securities, which
include, but are not limited to, restricted securities (securities the disposi-
tion of which is restricted under the federal securities laws); securities that
may be resold pursuant to Rule 144A under the Securities Act of 1933 but that
are deemed to be illiquid; and repurchase agreements with maturities in excess
of seven days.
PORTFOLIO TURNOVER
The Fund anticipates that its annual portfolio turnover rate will be between
20% and 30% under normal market conditions, and will generally not exceed 50%.
OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund will not invest more than 5% of its net assets in any one of the fol-
lowing types of investments: warrants; and transactions in short sales against
the box. In addition, the Fund has adopted several restrictions on the invest-
ments and other activities of the Fund that may not be changed without share-
holder approval. For example, the Fund may not:
. With respect to 75% of its total assets, purchase the securities of any is-
suer (except securities issued or guaranteed by the U.S. government or any
agency or instrumentality thereof) if, as a result, (i) more than 5% of the
Fund's total assets would be invested in securities of that issuer, or (ii)
the Fund would hold more than 10% of the outstanding voting securities of
that issuer.
. Borrow money, except that the Fund may (i) borrow money from banks for tempo-
rary or emergency purposes (but not for leverage or the purchase of invest-
ments) and (ii) engage in other transactions permissible under the Investment
Company Act of 1940 that may involve a borrowing (such as investing in When-
Issued Securities or certain futures and options), provided that the combina-
tion of (i) and (ii) shall not exceed 33 1/3% of the value of the Fund's to-
tal assets (including the amount borrowed), less the Fund's liabilities
(other than borrowings).
- --------------------------------------------------------------------------------
PAGE 8
<PAGE>
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in the value of assets will not be considered a violation.
Except as specifically noted above or in the Statement of Additional Informa-
tion, the Fund's investment policies are not fundamental and may be changed
without shareholder approval. For a more complete description of investment
restrictions that may be changed without a shareholder vote, see the Statement
of Additional Information.
- -------------------------------------------------------------------------------
FLEXIBLE PURCHASE OPTIONS
The Fund has adopted Flexible Purchase Options that offer you four alternative
classes of Fund shares (Classes A, B, C and R), each with a different combina-
tion of sales charges, ongoing fees, eligibility requirements, and other fea-
tures. The Fund's Flexible Purchase Options are designed to permit you and
your financial adviser to choose the method of purchasing shares that you be-
lieve is most beneficial given the amount of your investment, any current
holdings of Fund shares, the length of time you expect to hold your investment
and other relevant circumstances. A summary of the four classes of Fund shares
is set forth below:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTINGENT ANNUAL
DEFERRED ANNUAL 12B-1 12B-1
UP-FRONT SALES CHARGE DISTRIBUTION SERVICE
SALES CHARGE ("CDSC") FEE FEE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 5.25%(1) None(2) None .25%
Class B None 5%(3) .75%(4) .25%
Class C None 1%(5) .75% .25%
Class R None None None None
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Maximum up-front sales charge, which is reduced for purchases of $50,000
or more. Up-front sales charge may be reduced or waived for certain purchases.
(2) Certain Class A purchases at net asset value of $1 million or more may be
subject to a 1% CDSC if redeemed within 18 months of purchase.
(3) CDSC in the first year. CDSC declines to 0% after six years.
(4) Class B Shares convert to Class A Shares after eight years, which reduces
the ongoing expenses borne by an investor.
(5) CDSC is applicable to shares redeemed within 12 months of purchase.
For more information regarding features of each class, see "How to Buy Fund
Shares," "How to Redeem Fund Shares" and "Distribution and Service Plan"
below.
When you purchase Class A Shares, you will normally pay an up-front sales
charge. As a result, you will have less money invested initially and you will
own fewer Class A Shares than you would in the absence of an up-front sales
charge. Alternatively, when you purchase Class B or Class C Shares, you will
not pay an up-front sales charge and all of your monies will be fully invested
at the time of purchase. However, Class B and Class C Shares are subject to an
annual distribution fee which constitutes an asset-based sales charge whose
purpose is the same as an up-front sales charge. In addition, Class B Shares
when redeemed are subject to a CDSC, which will vary depending on the length
of time you owned your shares. Class B Shares automatically convert to Class A
Shares eight years after purchase in order to limit the distribution fees you
pay over the life of your investment. Class C Shares are subject to a CDSC of
1% if redeemed within 12 months of purchase. Because Class C Shares do not
convert to Class A Shares and continue to pay an annual distribution fee in-
definitely, Class C Shares should normally not be purchased by an investor who
expects to hold shares for significantly longer than eight years. Class A,
Class B and Class C Shares are subject to annual service fees, which are iden-
tical in amount and are used to compensate Authorized Dealers for providing
you with ongoing account services. You may qualify for a reduced sales charge
or a sales charge waiver on a purchase of Class A Shares, although there may
be a CDSC imposed on redemption of certain purchases at net asset value with-
out an up-front sales charge, as described under "How the Class A Sales Charge
May Be Reduced or Waived." Class R Shares are available for purchase at a
price equal to their net asset value, but only under certain circumstances or
for certain categories of investors, as described below under "How to Buy Fund
Shares--Class R Shares."
In deciding whether to purchase Class A, Class B, Class C or Class R Shares,
you should consider all relevant factors, including the dollar amount of your
purchase, any current holdings of Fund shares, the length of time you expect
to hold the shares and whether a CDSC would apply, the amount of any applica-
ble up-front sales charge, the amount of any applicable distribution or serv-
ice fees that may be incurred while you own the shares, whether or not you
will be reinvesting income or capital gain distributions in additional shares,
whether or not you meet applicable eligibility requirements or qualify for a
sales charge waiver or reduction, and the relative level of services that your
financial adviser may provide to different classes. Authorized Dealers and
other persons distributing the Fund's shares may receive different compensa-
tion for selling different classes of shares.
Each class of shares represents an interest in the same portfolio of invest-
ments. Each class of shares is identical in all respects except that each
class has its own sales charge structure, each class bears its own class ex-
penses, including distribution and service fees, and each class has exclusive
voting rights with respect to any distribution or service plan applicable to
its shares. In addition, Class B Shares are subject to a conversion feature.
As a result of the differences in the expenses borne by each class of shares,
and differences in the purchase and redemption activity for each class, net
income per share, dividends per share and net as-
- -------------------------------------------------------------------------------
PAGE 9
<PAGE>
set value per share will vary among the Fund's classes of shares.
Upon notice to all Authorized Dealers, Nuveen may reallow to Authorized Dealers
electing to participate up to the full applicable Class A Share up-front sales
charge during periods and for transactions specified in the notice. The
reallowances made during these periods may be based upon attainment of minimum
sales levels. Furthermore, Nuveen may from time to time provide additional pro-
motional support and make additional reallowances only to certain Authorized
Dealers who sell or are expected to sell certain minimum amounts of the Fund or
other Nuveen Mutual Funds and Nuveen Unit Trusts during specified time periods.
Promotional support may include providing sales literature to and holding in-
formational or educational programs for the benefit of such Authorized Dealers'
representatives, seminars for the public, and advertising and sales campaigns.
Under certain circumstances, Nuveen may also make ongoing payments to autho-
rized dealers to facilitate the marketing and administration of new and exist-
ing shareholder accounts, including payments for advertising.
Such reimbursement will be based on the levels of sales of Nuveen Fund shares
and Nuveen Unit Trust units sold during the prior calendar year according to an
established schedule. Any such support or reimbursement would be provided by
Nuveen out of its own assets, and not out of the assets of the Funds, and will
not change the price an investor pays for shares or the amount that a Fund will
receive from such a sale. The staff of the Securities and Exchange Commission
takes the position that dealers who receive 90% or more of the applicable sales
charge may be deemed underwriters under the Securities Act of 1933, as amended.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
CLASS A SHARES
You may purchase Class A Shares at a public offering price equal to the appli-
cable net asset value per share plus an up-front sales charge imposed at the
time of purchase as set forth below. You may qualify for a reduced sales
charge, or the sales charge may be waived in its entirety, as described below
under "How the Class A Sales Charge May Be Reduced or Waived." Class A Shares
are also subject to an annual service fee of .25%. See "Flexible Purchase Op-
tions" and "Distribution and Service Plan."
The up-front sales charge schedule for Class A Shares is as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SALES CHARGE REALLOWANCE
SALES CHARGE AS % OF AS % OF
AS % OF PUBLIC NET AMOUNT PUBLIC
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.25% 5.54% 5.00%
$50,000 but less
than $100,000 4.25% 4.44% 4.00%
$100,000 but less
than $250,000 3.50% 3.63% 3.25%
$250,000 but less
than $500,000 2.75% 2.83% 2.50%
$500,000 but less
than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over 0.00% 0.00% 0.00%(1)
- ---------------------------------------------------------------------------------
</TABLE>
(1) Authorized Dealers are eligible to receive a commission from Nuveen as dis-
cussed below.
Class A Share purchases of $1 million or more are sold at net asset value with-
out an up-front sales charge. Nuveen pays Authorized Dealers of record on such
Class A Share purchases a sales commission equal to the sum of 1.00% of the
first $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25% of pur-
chases over $5.0 million. If such shares are redeemed within 18 months of pur-
chase, a CDSC of 1% of the lower of the purchase price or the redemption pro-
ceeds may be imposed upon the redemption. Shares purchased by investors invest-
ing $1 million or more who have made arrangements with Nuveen and whose dealer
of record waived the commission are not subject to the CDSC.
The Fund receives the entire net asset value of all Class A Shares that are
sold. Nuveen retains the full applicable sales charge from which it pays the
uniform reallowances shown above to Authorized Dealers. See "Flexible Purchase
Options" for more information about reallowances and other compensation to Au-
thorized Dealers.
Certain commercial banks may make Class A Shares of the Fund available to their
customers on an agency basis. Pursuant to the agreements between Nuveen and
these banks, some or all of the sales charge paid by a bank customer in connec-
tion with a purchase of Class A Shares may be retained by or paid to the bank.
Certain banks and other financial institutions may be required to register as
securities dealers in certain states.
HOW THE CLASS A SALES CHARGE MAY BE REDUCED OR WAIVED
There are several ways to reduce or eliminate the up-front sales charge:
. cumulative discount;
. letter of intent;
. purchases with monies representing distributions from Nuveen-sponsored Unit
Trusts;
. group purchase programs;
- --------------------------------------------------------------------------------
PAGE 10
<PAGE>
. reinvestment of redemption proceeds from non-affiliated funds;
. special sales charge waivers for certain categories of investors; and
. purchases through certain eligible employer-sponsored retirement plans.
You may qualify for a reduced sales charge as shown above on a purchase of
Class A Shares if the amount of your purchase, when added to the value that
day of all of your prior purchases of shares of the Fund or of another Nuveen
Mutual Fund, or units of a Nuveen Unit Trust, on which an up-front sales
charge or ongoing distribution fee is imposed, falls within the amounts stated
in the table. You or your financial adviser need to notify Nuveen or SSI of
any cumulative discount level you have achieved at the time you purchase your
shares.
You may qualify for a reduced sales charge on a purchase of Class A Shares if
you plan to purchase Class A Shares of Nuveen Mutual Funds over the next 13
months and the total amount of your purchases would, if purchased at one time,
qualify you for one of the reduced sales charges shown above. In order to take
advantage of this option, you need to complete the applicable section of the
Application Form or sign and deliver either to an Authorized Dealer or to SSI
a written Letter of Intent in a form acceptable to Nuveen. A Letter of Intent
states that you intend, but are not obligated, to purchase over the next 13
months a stated total amount of Class A Shares that would qualify you for a
reduced sales charge shown above. You may count shares of a Nuveen Mutual Fund
that you already own on which you paid an up-front sales charge or an ongoing
distribution fee and any Class B and Class C Shares of a Nuveen Mutual Fund
that you purchase over the next 13 months towards completion of your invest-
ment program, but you will receive a reduced sales charge only on new Class A
Shares you purchase over that period. You cannot count Class A Shares that you
purchase without a sales charge through investment of distributions from a
Nuveen Mutual Fund, a Nuveen Unit Trust or otherwise, towards completion of
your Letter of Intent program.
By establishing a Letter of Intent, you agree that your first purchase of
Class A Shares following execution of the Letter of Intent will be at least 5%
of the total amount of your intended purchases. You further agree that shares
representing 5% of the total amount of your intended purchases will be held in
escrow pending completion of these purchases. All dividends and capital gains
distributions on Class A Shares held in escrow will be credited to your ac-
count. If total purchases, less redemptions, prior to the expiration of the 13
month period equal or exceed the amount specified in your Letter of Intent,
the Class A Shares held in escrow will be transferred to your account. If the
total purchases, less redemptions, exceed the amount specified in your Letter
of Intent and thereby qualify for a lower sales charge than the sales charge
specified in your Letter of Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher sales charge paid
will be used to purchase additional Class A Shares on your behalf. If the to-
tal purchases, less redemptions, are less than the amount specified, you must
pay Nuveen an amount equal to the difference between the amounts paid for
these purchases and the amounts that would have been paid if the higher sales
charge had been applied. If you do not pay the additional amount within 20
days after written request by Nuveen or your financial adviser, Nuveen will
redeem an appropriate number of your escrowed Class A Shares to meet the re-
quired payment. By establishing a Letter of Intent, you irrevocably appoint
Nuveen as attorney to give instructions to redeem any or all of your escrowed
shares, with full power of substitution in the premises.
You or your financial adviser need to notify Nuveen or SSI whenever you make a
purchase of Fund shares that you wish to be covered under the Letter of Intent
option.
You may purchase Class A Shares without an up-front sales charge if you are
investing distributions from a Nuveen Unit Trust. There is no initial or sub-
sequent minimum investment requirement for such purchases.
If you are a member of a qualified group, you may purchase Class A Shares of
the Fund or of another Nuveen Mutual Fund at the reduced sales charge applica-
ble to the group's purchases taken as a whole. A "qualified group" is one
which has been in existence for more than six months, has a purpose other than
investment, has ten or more participating members, has agreed to include Fund
sales publications in mailings to members and has agreed to comply with cer-
tain administrative requirements relating to its group purchases.
Under any group purchase program, the minimum monthly investment in Class A
Shares of any particular fund or portfolio by each participant is $50 and the
minimum initial investment in Class A Shares of any particular fund or portfo-
lio for each participant in the program is $3,000. No certificates will be is-
sued for any participant's account. All dividends and other distributions by
the Fund will be reinvested in additional Class A Shares of the Fund. No par-
ticipant may utilize a systematic withdrawal program.
To establish a group purchase program, both the group itself and each partici-
pant must fill out special application materials, which the group administra-
tor may obtain from the group's financial adviser by checking the applicable
box on the enclosed Application Form or by calling SSI toll-free at 800-621-
7227. See the Statement of Additional Information for more complete informa-
tion about "qualified groups" and group purchase programs.
- -------------------------------------------------------------------------------
PAGE 11
<PAGE>
Participants in eligible employer-sponsored qualified defined contribution re-
tirement plans may purchase Class A Shares at net asset value without a sales
charge. Eligible plans are those with at least 200 employees and which either
(a) make an initial purchase of one or more Nuveen mutual funds aggregating $1
million or more; or (b) execute a Letter of Intent to purchase in the aggregate
$1 million or more of Fund shares. Nuveen will pay Authorized Dealers a sales
commission on such purchases equal to 1% of the first $2.5 million, plus 0.50%
of the next $2.5 million, plus 0.25% of any amount purchased over $5.0 million.
A contingent deferred sales charge of 1% will be assessed on redemptions within
18 months of purchase, unless waived.
You may also purchase Class A Shares at net asset value without a sales charge
if the purchase takes place through an Authorized Dealer and represents the re-
investment of the proceeds of the redemption of shares of one or more regis-
tered investment companies not affiliated with Nuveen. You need to provide ap-
propriate documentation that the redemption occurred not more than 360 days
prior to the reinvestment of the proceeds in Class A Shares, and that you ei-
ther paid an up-front sales charge or were subject to a contingent deferred
sales charge upon the redemption of the shares of the other investment company.
Class A Shares of the Fund may be purchased at net asset value without a sales
charge and in any amount by: officers, trustees and past trustees of the Trust
or any Nuveen-sponsored registered investment company; bona fide, full-time and
retired employees of Nuveen or Rittenhouse, any parent company of Nuveen, and
subsidiaries thereof, or their immediate family members (as defined below); any
person who, for at least 90 days, has been an officer, director or bona fide
employee of any Authorized Dealer, or their immediate family members; officers
and directors of bank holding companies that make Fund shares available di-
rectly or through subsidiaries or bank affiliates; bank or broker-affiliated
trust departments; investors purchasing on a periodic, asset-based fee or no
transaction fee basis through a broker-dealer sponsored mutual fund purchase
program; and clients of investment advisers, financial planners or other finan-
cial intermediaries that charge periodic or asset-based fees for their servic-
es. For further details about these special categories and their eligibility
requirements, please consult your financial adviser or consult the Statement of
Additional Information, or call Nuveen at 800-621-7227.
Any Class A Shares purchased pursuant to a special sales charge waiver must be
acquired for investment purposes and on the condition that they will not be
transferred or resold except through redemption by the Fund. You or your finan-
cial adviser need to notify Nuveen or SSI whenever you make a purchase of Class
A Shares that you wish to be covered under these special sales charge waivers.
All of the above categories of investors are also eligible to purchase Class R
Shares, as described below under "Class R Shares." Finally, Class A Shares may
be issued at net asset value without a sales charge in connection with the ac-
quisition by the Fund of another investment company.
GENERAL
In determining the amount of your purchases of Class A Shares that may qualify
for a reduced sales charge, the following purchases may be combined: (1) all
purchases by a trustee or other fiduciary for a single trust estate or fidu-
ciary account; (2) all purchases by individuals and their immediate family mem-
bers (i.e., their spouses, parents, children, grandparents, grandchildren, par-
ents-in-law, sons- and daughters-in-law, siblings, a sibling's spouse, and a
spouse's siblings); or (3) all purchases made through a group purchase program
as described above.
The reduced sales charge programs may be modified or discontinued by the Fund
at any time upon prior written notice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES OR REDUCED SALES
CHARGE PROGRAMS, OR TO OBTAIN THE REQUIRED APPLICATION FORMS, CALL NUVEEN TOLL-
FREE AT 800-621-7227.
CLASS B SHARES
You may purchase Class B Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Since Class
B Shares are sold without an initial sales charge, the full amount of your pur-
chase payment will be invested in Class B Shares. Class B Shares are subject to
an annual distribution fee to compensate Nuveen for its costs in connection
with the sale of Class B shares, and are also subject to an annual service fee
to compensate Authorized Dealers for providing you with ongoing financial ad-
vice and other account services.
You may be subject to a CDSC if you redeem your Class B shares within a speci-
fied period after purchase, as shown in the table below. See "Flexible Purchase
Options" and "Distribution and Service Plan." Nuveen compensates Authorized
Dealers for sales of Class B Shares at the time of sale at the rate of 4.00% of
the amount of Class B Shares purchased, which represents a sales commission of
3.75% plus an advance on the first year's annual service fee of .25%.
If redeemed prior to the end of the sixth year after purchase, Class B Shares
may be subject to a CDSC, as set forth below:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSC
- ------------------------------------------------------------------------------
<S> <C>
0-1 5%
1-2 4%
2-3 4%
3-4 3%
4-5 2%
5-6 1%
- ------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PAGE 12
<PAGE>
Class B Shares acquired through the reinvestment of dividends are not subject
to a CDSC. Any CDSC will be imposed on the lower of the redeemed shares' cost
or net asset value at the time of redemption. For more information regarding
the imposition of the CDSC, see "How to Redeem Fund Shares--Class B Shares,"
below.
Class B Shares will automatically convert to Class A Shares eight years after
purchase. The purpose of the conversion is to limit the distribution fees you
pay over the life of your investment. All conversions will be done at net as-
set value without the imposition of any sales load, fee, or other charge, so
that the value of your account immediately before conversion will be the same
as the value of the account immediately after conversion. Class B Shares ac-
quired through reinvestment of distributions will convert into Class A Shares
based on the date of the initial purchase to which such shares relate. For
this purpose, Class B Shares acquired through reinvestment of distributions
will be attributed to particular purchases of Class B Shares in accordance
with such procedures as the Board of Trustees may determine from time to time.
Class B Shares that are converted to Class A Shares will remain subject to an
annual service fee that is identical in amount for both Class B Shares and
Class A Shares. Since net asset value per share of the Class B Shares and the
Class A Shares may differ at the time of conversion, a shareholder may receive
more or fewer Class A Shares than the number of Class B Shares converted. Any
conversion of Class B Shares into Class A Shares will be subject to the con-
tinuing availability of an opinion of counsel or a private letter ruling from
the Internal Revenue Service to the effect that the conversion of shares would
not constitute a taxable event under federal income tax law. Conversion of
Class B Shares into Class A Shares might be suspended if such an opinion or
ruling were no longer available.
CLASS C SHARES
You may purchase Class C Shares at a public offering price equal to the appli-
cable net asset value per share without any up-front sales charge. Class C
Shares are subject to an annual distribution fee to compensate Nuveen for its
costs in connection with the sale of Class C Shares. Class C Shares are also
subject to an annual service fee of .25% to compensate Authorized Dealers for
providing you with ongoing financial advice and other account services. Nuveen
compensates Authorized Dealers for sales of Class C Shares at the time of the
sale at a rate of 1% of the amount of Class C Shares purchased, which repre-
sents a sales commission of .75% plus an advance on the first year's annual
service fee of .25%. See "Flexible Purchase Options" and "Distribution and
Service Plan."
Redemptions of Class C Shares within 12 months of purchase may be subject to a
CDSC of 1% of the lower of the purchase price or redemption proceeds. See "How
to Redeem Fund Shares--Class C Shares."
CLASS R SHARES
If you are making an initial purchase of $1 million or more of Fund shares in
a single transaction, you may purchase Class R shares at a public offering
price equal to the applicable net asset value per share without any up-front
sales charge or ongoing distribution or service fees. You also may purchase
Class R Shares subject only to the Fund's minimum investment requirement of
$3,000 if you are within the following specified categories of investors who
are eligible to purchase Class A Shares at net asset value without an up-front
sales charge: officers, trustees and past trustees of the Trust or any Nuveen-
sponsored registered investment company; bona fide, full-time and retired em-
ployees of Nuveen or Rittenhouse, any parent company of Nuveen, and subsidiar-
ies thereof, or their immediate family members; any person who, for at least
90 days, has been an officer, director or bona fide employee of any Authorized
Dealer, or their immediate family members; officers and directors of bank
holding companies that make Fund shares available directly or through subsidi-
aries or bank affiliates; bank or broker-affiliated trust departments; invest-
ors purchasing on a periodic fee, asset-based fee or no transaction fee basis
through a broker-dealer sponsored mutual fund purchase program; and clients of
investment advisers, financial planners or other financial intermediaries that
charge periodic or asset-based fees for their services. For further details
about these special categories and their eligibility requirements, please con-
sult your financial adviser or the Statement of Additional Information, or
call Nuveen at 800-621-7227.
If you are eligible to purchase either Class R Shares or Class A Shares with-
out a sales charge at net asset value, you should be aware of the differences
between these two classes of shares. Class A Shares are subject to an annual
service fee to compensate Authorized Dealers for providing you with ongoing
account services. Class R Shares are not subject to a distribution or service
fee and, consequently, holders of Class R Shares may not receive the same
types or levels of services from Authorized Dealers. In choosing between Class
A Shares and Class R Shares, you should weigh the benefits of the services to
be provided by Authorized Dealers against the annual service fee imposed upon
the Class A Shares.
INITIAL AND SUBSEQUENT PURCHASES OF SHARES
You may buy Fund shares through Authorized Dealers or by calling or directing
your financial adviser to call Nuveen toll-free at 800-843-6765. You may pay
for your purchase by Federal Reserve draft or by check made payable to "Nuveen
Rittenhouse Growth Fund, Class [A], [B], [C], [R]," delivered to the financial
adviser through whom the investment is to be made for forwarding to the Fund's
shareholder services agent, SSI. When making your initial investment, you must
also furnish the information necessary to estab-
- -------------------------------------------------------------------------------
PAGE 13
<PAGE>
lish your Fund account by completing and enclosing with your payment the at-
tached Application Form. After your initial investment, you may make subsequent
purchases at any time by forwarding to your financial adviser or SSI a check in
the amount of your purchase made payable to "Nuveen Rittenhouse Growth Fund,
Class [A], [B], [C], [R]," and indicating on the check your account number. All
payments need to be in U.S. dollars and should be sent directly to SSI at its
address listed on the back cover of this Prospectus. A check drawn on a foreign
bank or payable other than to the order of the Fund generally will not be ac-
ceptable. You may also wire Federal Funds directly to SSI, but you may be
charged a fee for this. For instructions on how to make Fund purchases by wire
transfer, call Nuveen toll-free at 800-621-7227.
PURCHASE PRICE
The price at which you purchase a class of Fund shares is based on the next
calculation of the net asset value for that share class after the order is
placed. The net asset value per share of each share class is determined as of
the close of trading (normally 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange is open for business. See "Net Asset Value," below for a de-
scription of how net asset value is calculated.
MINIMUM INVESTMENT REQUIREMENTS
Generally, your first purchase of any class of the Fund's shares needs to be
for $3,000 or more ($1,000 or more for an Individual Retirement Account). Addi-
tional purchases may be in amounts of $50 or more. These minimums may be
changed at any time by the Fund. There are exceptions to these minimums for
shareholders who qualify under one or more of the Fund's automatic investment,
group purchase or reinvestment programs.
SYSTEMATIC INVESTMENT PROGRAMS
The Fund offers you several opportunities to capture the benefits of "dollar
cost averaging" through systematic investment programs. In a regularly followed
dollar cost averaging program, you would purchase more shares when Fund share
prices are lower and fewer shares when Fund share prices are higher, so that
the average price paid for Fund shares is less than the average price of the
Fund shares over the same time period. Dollar cost averaging does not assure
profits or protect against losses in a steadily declining market. Since dollar
cost averaging involves continuous investment regardless of fluctuating price
levels, you should consider your financial ability to continue investing in de-
clining as well as rising markets before deciding to invest in this way. The
Fund offers two different types of systematic investment programs:
Once you have established a Fund account, you may make regular investments in
an amount of $25 or more each month by authorizing SSI to draw preauthorized
checks on your bank account. There is no obligation to continue payments and
you may terminate your participation at any time at your discretion. No charge
in addition to the applicable sales charge is made in connection with this
Plan, and there is no cost to the Fund. To obtain an application form for the
Automatic Deposit Plan, check the applicable box on the enclosed Application
Form or call Nuveen toll-free at 800-621-7227.
Once you have established a Fund account, you may, with your employer's con-
sent, make regular investments in Fund shares of $25 or more per pay period by
authorizing your employer to deduct this amount automatically from your pay-
check. There is no obligation to continue payments and you may terminate your
participation at any time at your discretion. No charge in addition to the ap-
plicable sales charge is made for this Plan, and there is no cost to the Fund.
To obtain an application form for the Payroll Direct Deposit Plan, check the
applicable box on the enclosed Application Form or call Nuveen toll-free at
800-621-7227.
OTHER SHAREHOLDER PROGRAMS
You may exchange shares of a class of the Fund for shares of the same class of
any other Nuveen Mutual Fund with reciprocal exchange privileges, at net asset
value without a sales charge, by sending a written request to the Fund, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330. Similarly,
Class A, Class B, Class C and Class R Shares of other Nuveen Mutual Funds may
be exchanged for the same class of shares of the Fund at net asset value with-
out a sales charge. Exchanges of shares from any Nuveen money market fund will
be made into Class A Shares, Class B Shares, Class C Shares or Class R Shares
(if eligible) of the Fund at the public offering price. If, however, a sales
charge has previously been paid on the investment represented by the exchanged
shares (i.e., the shares to be exchanged were originally issued in exchange for
shares on which a sales charge was paid), the exchange of shares from a Nuveen
money market fund will be made into shares of the Fund at net asset value.
Class A Shares, Class C Shares or Class R Shares may be exchanged for shares of
any Nuveen money market fund, but Class B Shares may not be exchanged for
shares of a Nuveen money market fund.
If you exchange shares subject to a CDSC, no CDSC will be charged at the time
of the exchange. However, if you subsequently redeem the shares acquired
through the exchange, the redemption may be subject to a CDSC, depending on
when you purchased your original shares and the CDSC schedule of the fund from
which you exchanged your shares.
The shares to be purchased must be offered in your state of residence and you
must have held the shares you are exchanging for at least 15 days. The total
value of exchanged shares must at least equal the minimum investment require-
ment of the Nuveen Mutual Fund being purchased. For federal income tax purpos-
- --------------------------------------------------------------------------------
PAGE 14
<PAGE>
es, any exchange constitutes a sale and purchase of shares and may result in
capital gain or loss. Before making any exchange, you should obtain the Pro-
spectus for the Nuveen Mutual Fund you are purchasing and read it carefully.
If the registration of the account for the Fund you are purchasing is not ex-
actly the same as that of the fund account from which the exchange is made,
written instructions from all holders of the account from which the exchange
is being made must be received, with signatures guaranteed by a member of an
approved Medallion Guarantee Program or in such other manner as may be accept-
able to the Fund. You may also exchange shares by telephone if you authorize
telephone exchanges by checking the applicable box on the enclosed Application
Form or by calling Nuveen toll-free at 800-621-7227 to obtain an authorization
form. The exchange privilege may be modified or discontinued by the Fund at
any time upon prior written notice to shareholders of the Fund.
The exchange privilege is not intended to permit the Fund to be used as a ve-
hicle for short-term trading. Excessive exchange activity may interfere with
portfolio management, raise expenses, and otherwise have an adverse effect on
all shareholders. In order to limit excessive exchange activity and in other
circumstances where Fund management believes doing so would be in the best in-
terest of the Fund, the Fund reserves the right to revise or terminate the ex-
change privilege, or limit the amount or number of exchanges or reject any ex-
change. Shareholders would be notified of any such action to the extent re-
quired by law.
If you redeemed Class A, Class B or Class C Shares of the Fund or any other
Nuveen Mutual Fund that were subject to a sales charge or a CDSC, you have up
to one year to reinvest all or part of the full amount of the redemption in
the same class of shares of the Fund at net asset value. This reinstatement
privilege can be exercised only once for any redemption, and reinvestment will
be made at the net asset value next calculated after reinstatement of the ap-
propriate class of Fund shares. If you reinstate shares that were subject to a
CDSC, your holding period as of the redemption date also will be reinstated
for purposes of calculating a CDSC. The federal income tax consequences of any
capital gain realized on a redemption will not be affected by reinstatement,
but a capital loss may be disallowed in whole or in part depending on the tim-
ing, the amount of the reinvestment and the fund from which the redemption oc-
curred.
You can use Fund Direct to link your Fund account to your account at a bank or
other financial institution. Fund Direct enables you to transfer money elec-
tronically between these accounts and perform a variety of account transac-
tions. These include purchasing shares by telephone, investing through an Au-
tomatic Deposit Plan, and sending dividends, distributions, redemption pay-
ments or Automatic Withdrawal Plan payments directly to your bank account.
Please refer to the Application for details, or call SSI at 800-621-7227 for
more information.
Fund Direct privileges may be requested via an Application you obtain by call-
ing 800-621-7227. Fund Direct privileges will apply to each shareholder listed
in the registration on your account as well as to your
Authorized Dealer representative of record unless and until SSI receives writ-
ten instructions terminating or changing those privileges. After you establish
Fund Direct for your account, any change of bank account information must be
made by signature-guaranteed instructions to SSI signed by all shareholders
who own the account.
Purchases may be made by telephone only after your account has been estab-
lished. To purchase shares in amounts up to $250,000 through a telephone rep-
resentative, call SSI at 800-621-7227. The purchase payment will be debited
from your bank account.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO OBTAIN THE APPLICA-
TION FORMS REQUIRED FOR SOME OF THEM, CALL NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be opened and maintained
for you by SSI, the Fund's shareholder services agent. Share certificates will
be issued to you only upon written request to SSI, and no certificates will be
issued for fractional shares. The Fund reserves the right to reject any pur-
chase order and to waive or increase minimum investment requirements. A change
in registration or transfer of shares held in the name of your financial ad-
viser's firm can only be made by an order in good form from the financial ad-
viser acting on your behalf.
Authorized Dealers are encouraged to open single master accounts. However,
some Authorized Dealers may wish to use SSI's sub-accounting system to mini-
mize their internal recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other than the master
account or sub-accounting service offered by SSI will be required to enter
into a separate agreement with another agent for these services for a fee that
will depend upon the level of services to be provided.
Subject to the rules and regulations of the Securities and Exchange Commis-
sion, the Fund reserves the right to suspend the continuous offering of its
shares at any time, but no suspension shall affect your right of redemption as
described below.
- -------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE
PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the In-
vestment Company Act of 1940, which provides that Class B and Class C Shares
- -------------------------------------------------------------------------------
PAGE 15
<PAGE>
are subject to an annual distribution fee and Class A, Class B and Class C
Shares are subject to an annual service fee. Class R Shares are not subject to
either distribution or service fees.
The distribution fee applicable to Class B and Class C Shares under the Plan
will be payable to reimburse Nuveen for services and expenses incurred in con-
nection with the distribution of such Shares. The distribution fee primarily
reimburses Nuveen for providing compensation to Authorized Dealers, including
Nuveen, either at the time of sale or on an ongoing basis. The other expenses
for which Nuveen may be reimbursed include, without limitation, expenses of
printing and distributing prospectuses to persons other than shareholders of
the Fund, expenses of
preparing, printing and distributing advertising and sales literature and re-
ports to shareholders used in connection with the sale of such Shares, certain
other expenses associated with the distribution of such Shares, and any other
distribution-related expenses that may be authorized from time to time by the
Board of Trustees.
The service fee applicable to Class A, Class B and Class C Shares under the
Plan will be paid to Nuveen to compensate Authorized Dealers, including Nuveen,
in connection with the provision of ongoing account services to shareholders.
These services may include establishing and maintaining shareholder accounts,
answering shareholder inquiries and providing other personal services to share-
holders.
The Fund may spend up to .25 of 1% per year of the average daily net assets of
Class A Shares as a service fee under the Plan applicable to Class A Shares.
The Fund may spend up to .75 of 1% per year of the average daily net assets of
Class B Shares as a distribution fee and up to .25 of 1% per year of the aver-
age daily net assets of Class B Shares as a service fee under the Plan applica-
ble to Class B Shares. The Fund may spend up to .75 of 1% per year of the aver-
age daily net assets of Class C Shares as a distribution fee and up to .25 of
1% per year of the average daily net assets of Class C Shares as a service fee
under the Plan applicable to Class C Shares.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
You may redeem your Fund shares at any time for cash at the net asset value
next computed after the redemption instructions and any required documents and
certificates are received in proper form, as described below. There is no
charge for the redemption of Class R Shares.
CLASS A SHARES
Class A Shares are normally redeemed at net asset value, without any CDSC. How-
ever, in the case of Class A purchases of $1 million or more at net asset val-
ue, where the dealer of record has not waived the sales commission, a CDSC of
1% is imposed on any redemptions within 18 months of purchase.
CLASS B SHARES
Class B Shares redeemed within 6 years of purchase may be subject to a CDSC.
The level of the CDSC is determined by how long you have owned your shares, as
described under "How to Buy Fund Shares--Class B Shares," above.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any CDSC, except that a
CDSC of 1% is imposed upon redemptions of Class C Shares within 12 months of
purchase.
OPERATION OF THE CDSC
In determining whether a CDSC is payable, a Fund will first redeem shares not
subject to any charge, and then in the order in which the Class B Shares were
purchased or in the reverse order in which the Class A or Class C Shares were
purchased, except if another order of redemption would result in a lower charge
or you specify another order. No CDSC is charged on shares purchased as a re-
sult of automatic reinvestment of dividends or capital gains paid. In addition,
no CDSC will be charged on exchanges of shares into another Nuveen Mutual Fund
or money market fund. Your holding period is calculated on a monthly basis and
begins the first day of the month in which the order for investment is re-
ceived. The CDSC is calculated based on the lower of the redeemed shares' cost
or net asset value at the time of the redemption and is deducted from the re-
demption proceeds. Nuveen receives the amount of any CDSC you pay. The CDSC may
be waived under certain special circumstances, as described in the Statement of
Additional Information.
REDEMPTION PROCEDURES
You may redeem shares by sending a written request for redemption directly to
the Fund, c/o Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330,
accompanied by duly endorsed certificates, if issued. Requests for redemption
and share certificates, if issued, must be signed by each shareholder and, if
the redemption proceeds exceed $50,000 or are payable other than to the share-
holder of record at the address of record (which address may not have changed
in the preceding 60 days), the signature must be guaranteed by a member of an
approved Medallion Guarantee Program or in such other manner as may be accept-
able to the Fund. You will receive payment based on the net asset value per
share next determined after receipt by the Fund of a properly executed redemp-
tion request in proper form. A check for the redemption proceeds will be mailed
to you within seven days after receipt of your redemption request. For accounts
registered in the name of a broker-dealer, payment will be forwarded within
three business days. However, if any shares to be redeemed were purchased by
check
- --------------------------------------------------------------------------------
PAGE 16
<PAGE>
within 15 days prior to the date the redemption request is received, the Fund
will not mail the redemption proceeds until the check received for the pur-
chase of shares has cleared, which may take up to 15 days.
If you have authorized telephone redemption and your account address has not
changed within the last 60 days, you can redeem shares that are held in non-
certificate form and that are worth $50,000 or less by calling Nuveen at 800-
621-7227. While you or anyone authorized by you may make telephone redemption
requests, redemption checks will be issued only in the name of the shareholder
of record and will be mailed to the address of record. If your telephone re-
quest is received prior to the time the Fund calculates its net asset value
("Closing Time"), which is usually 4:00 p.m. eastern time, the redemption
check will normally be mailed the next business day. For requests received af-
ter Closing Time, the redemption will be effected at Closing Time the follow-
ing business day and the check will normally be mailed on the second business
day after the request.
If you have authorized electronic fund redemption or established Fund Direct
privileges, you can take advantage of the following expedited redemption pro-
cedures to redeem shares held in non-certificate form that are worth at least
$1,000. You may make electronic fund redemption requests through a phone rep-
resentative or Fund Direct redemption requests by calling Nuveen at 800-621-
7227. If a redemption request is received by Closing Time, the redemption will
be made as of Closing Time that day. If the redemption request is received af-
ter Closing Time, the redemption will be made as of Closing Time the following
business day. Proceeds of electronic fund redemptions will normally be wired
on the second business day following the redemption, but may be delayed one
additional business day if the Federal Reserve Bank of Boston or the Federal
Reserve Bank of New York is closed on the day redemption proceeds would ordi-
narily be wired. The Fund reserves the right to charge a fee for electronic
fund redemption. Proceeds of redemptions through Fund Direct will normally be
wired to your Fund Direct bank account on the second or third business day af-
ter the redemption.
Before you may redeem shares electronically by phone or through Fund Direct,
you need to complete the telephone redemption authorization section of the en-
closed Application Form or the Fund Direct Application Form and return it to
Nuveen or SSI. If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption authorization form by
writing the Fund or by calling Nuveen toll-free at 800-621-7227. Proceeds from
electronic share redemptions will be transferred by Federal Reserve wire only
to the commercial bank account specified by the shareholder on the Application
Form. You need to send a written request to Nuveen or SSI in order to estab-
lish multiple accounts, or to change the account or accounts designated to re-
ceive redemption proceeds. These requests must be signed by each account owner
with signatures guaranteed by a member of an approved Medallion Guarantee Pro-
gram or in such other manner as may be acceptable to the Fund. Further docu-
mentation may be required from corporations, executors, trustees or personal
representatives.
For the convenience of shareholders, the Fund has authorized Nuveen as its
agent to accept orders from financial advisers by wire or telephone for the
redemption of Fund shares. The redemption price is the first net asset value
of the appropriate share class determined following receipt of an order placed
by the financial adviser. The Fund makes payment for the redeemed shares to
the securities representatives who placed the order promptly upon presentation
of required documents with signatures guaranteed as described above. Neither
the Fund nor Nuveen charges any redemption fees other than any CDSC as de-
scribed above. However, your financial adviser may charge you for serving as
agent in the redemption of shares.
The Fund reserves the right to refuse telephone redemptions and, at its op-
tion, may limit the timing, amount or frequency of these redemptions. Tele-
phone redemption procedures may be modified or terminated at any time, on 30
days' notice, by the Fund. The Fund, SSI and Nuveen will not be liable for
following telephone instructions reasonably believed to be genuine. The Fund
employs procedures reasonably designed to confirm that telephone instructions
are genuine. These procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting upon a caller's
instructions. If the Fund does not follow reasonable procedures for protecting
shareholders against loss on telephone transactions, it may be liable for any
losses due to unauthorized or fraudulent telephone instructions.
If you own Fund shares currently worth at least $10,000, you may establish an
Automatic Withdrawal Plan by completing an application form for the Plan. You
may obtain an application form by checking the applicable box on the enclosed
Application Form or by calling Nuveen toll-free at 800-621-7227.
The Plan permits you to request periodic withdrawals on a monthly, quarterly,
semi-annual or annual basis in an amount of $50 or more. Depending upon the
size of the withdrawals requested under the Plan and fluctuations in the net
asset value of Fund shares, these withdrawals may reduce or even exhaust your
account.
The purchase of Class A Shares, other than through reinvestment, while you are
participating in the Automatic Withdrawal Plan with respect to Class A Shares
will usually be disadvantageous because you will be paying a sales charge on
any Class A Shares you purchase at the same time you are redeeming shares.
Similarly, use of the Automatic Withdrawal Plan for Class B Shares held for
less than six years or Class C Shares held for less than 12 months may be dis-
advantageous because the newly-purchased Class B or Class C Shares will be
subject to the CDSC.
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PAGE 17
<PAGE>
The Fund may suspend the right of redemption of Fund shares or delay payment
more than seven days (a) during any period when the New York Stock Exchange is
closed (other than customary weekend and holiday closings), (b) when trading on
the New York Stock Exchange is restricted, or an emergency exists as determined
by the Securities and Exchange Commission so that trading of the Fund's invest-
ments or determination of its net asset value is not reasonably practicable, or
(c) for any other periods that the Securities and Exchange Commission by order
may permit for protection of Fund shareholders.
The Fund may, from time to time, establish a minimum total investment for Fund
shareholders, and the Fund reserves the right to redeem your shares if your in-
vestment is less than the minimum after giving you at least 30 days' notice. If
any minimum total investment is established, and if your account is below the
minimum, you will be allowed 30 days following the notice in which to purchase
sufficient shares to meet the minimum. So long as the Fund continues to offer
shares at net asset value to holders of Nuveen Unit Trusts who are investing
their Nuveen Unit Trust distributions, no minimum total investment will be es-
tablished for the Fund.
- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
The management of the Fund, including general supervision of the duties per-
formed for the Fund by Nuveen Institutional Advisory Corp. ("NIAC") under the
Management Agreement, is the responsibility of the Board of Trustees of the
Trust.
Overall management of the Fund is the responsibility of NIAC, which is located
at 333 West Wacker Drive, Chicago, Illinois 60606. NIAC oversees the management
of the Fund's investment portfolio, manages the Fund's business affairs and
provides certain day-to-day administrative services to the Fund. NIAC has en-
tered into a Sub-Advisory Agreement with Rittenhouse under which Rittenhouse
manages the Fund's investment portfolio.
NIAC is a wholly-owned subsidiary of Nuveen, which has sponsored or underwrit-
ten more than $60 billion of investment company securities. Nuveen, the princi-
pal underwriter of the Fund's shares, is sponsor of the Nuveen Tax-Free Unit
Trust, a registered unit investment trust. It is also the principal underwriter
for the Nuveen Mutual Funds, and served as co-managing underwriter for the
shares of the Nuveen Exchange-Traded Funds. Over 1,000,000 individuals have in-
vested to date in Nuveen investment products. Founded in 1898, Nuveen is a sub-
sidiary of The John Nuveen Company which, in turn, is approximately 78% owned
by The St. Paul Companies, Inc. ("St. Paul"). St. Paul is located in St. Paul,
Minnesota, and is principally engaged in providing property-liability insurance
through subsidiaries.
For the fund management services and facilities furnished by NIAC, the Fund has
agreed to pay an annual management fee as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE FUND MANAGEMENT FEE
- ------------------------------------------------------------------------------
<S> <C>
For the first $125 million .8500 of 1%
For the next $125 million .8375 of 1%
For the next $250 million .8250 of 1%
For the next $500 million .8125 of 1%
For the next $1 billion .8000 of 1%
For assets over $2 billion .7875 of 1%
- ------------------------------------------------------------------------------
</TABLE>
All fees and expenses are accrued daily and deducted before payment of divi-
dends to investors. In addition to the fee paid to NIAC and the distribution
and service fees paid to Nuveen, the Fund is responsible for its own expenses
that are not covered under such agreements, including, without limitation: cus-
todial, transfer agent, accounting and legal fees; interest charges; brokerage
commissions; organizational expenses; and extraordinary expenses. In order to
prevent total operating expenses (excluding any distribution or service fee,
and extraordinary expenses) from exceeding 1.10% of the average daily net asset
value of any class of shares of the Fund for the fiscal year ended July 31,
1998, NIAC has agreed to waive all or a portion of its management fees or reim-
burse certain expenses of the Fund.
Rittenhouse was founded in 1979 and is located at Two Radnor Corporate Center,
Radnor, PA 19087-4570. Under the Sub-Advisory Agreement, NIAC pays Rittenhouse
a portfolio management fee on the Fund's average daily net asset value at an
annual rate as set forth below:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
- ------------------------------------------------------------------------------
<S> <C>
For the first $500 million .35 of 1%
For assets over $500 million .30 of 1%
- ------------------------------------------------------------------------------
</TABLE>
The investment decisions for the Fund are made through a team approach, with
all of the Rittenhouse investment professionals contributing to the process.
Rittenhouse currently maintains a staff of 20 investment professionals. Each of
the Rittenhouse officers and investment professionals has developed an expert-
ise in at least one functional investment area, including equity research,
strategy, quantiative research, technical research, and trading. A key element
in the decision making process is a formal investment committee of all the in-
vestment professionals that meets regularly to review all Rittenhouse invest-
ment positions. Pertinent information from outside sources is shared and incor-
porated into the investment outlook. The investment strategy, market sectors,
and individual security holdings are reviewed to verify their continued appro-
priateness. Investment recommendations are presented to the committee for deci-
sion.
- --------------------------------------------------------------------------------
PAGE 18
<PAGE>
Rittenhouse provides continuous advice and recommendations concerning the
Fund's investments, and is responsible for selecting the broker-dealers who
execute the portfolio's transactions. In executing such transactions, Ritten-
house seeks to obtain the best net results for the Fund. Rittenhouse also
serves as investment adviser to pension and profit-sharing plans, and other
institutional and private investors. Rittenhouse is a wholly-owned subsidiary
of The John Nuveen Company.
- -------------------------------------------------------------------------------
HOW THE FUND SHOWS
PERFORMANCE
The Fund may quote its yield or total return in reports to shareholders, sales
literature and advertisements. The Fund may also from time to time compare its
investment results to various passive indices or other mutual funds with simi-
lar investment objectives. Comparative performance information may include
data from Lipper Analytical Services, Inc., Morningstar, Inc. and other indus-
try publications. See the Statement of Additional Information for a more de-
tailed discussion.
All total return figures assume the reinvestment of all dividends and measure
the net investment income generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the underlying investments in the
Fund over a specified period of time. Average annual total return figures are
annualized and therefore represent the average annual percentage change over
the specified period. Cumulative total return figures are not annualized and
represent the aggregate percentage or dollar value change over a stated period
of time. Average annual total return and cumulative total return are based
upon the historical results of the Fund and are not necessarily representative
of the future performance of the Fund.
- -------------------------------------------------------------------------------
DISTRIBUTIONS AND TAXES
The Fund intends to operate as a "Regulated Investment Company" under
Subchapter M of the Internal Revenue Code, and therefore will not be liable
for federal income taxes to the extent earnings are distributed on a timely
basis.
For federal income tax purposes, unless you are exempt from taxation or enti-
tled to a tax deferral, ALL DIVIDENDS PAID BY THE FUND THAT ARE DERIVED FROM
NET INVESTMENT INCOME AND NET SHORT-TERM CAPITAL GAINS ARE TAXABLE AS ORDINARY
INCOME, AND DISTRIBUTIONS PAID BY THE FUND FROM NET LONG-TERM CAPITAL GAINS
ARE TAXABLE AS LONG-TERM CAPITAL GAIN, WHETHER RECEIVED IN CASH OR REINVESTED
IN ADDITIONAL SHARES. The capital gain holding period for this purpose is de-
termined by the length of time the Fund has held the security and not the
length of time you have held shares in the Fund. Investors are informed annu-
ally as to the amount and nature of all dividends and capital gains paid dur-
ing the prior year. Such capital gains and dividends may also be subject to
state or local taxes. If you are not required to pay taxes on your income, you
are generally not required to pay federal income taxes on the amounts distrib-
uted to you.
Income dividends are usually distributed quarterly, and capital gains, if any,
are usually distributed annually in December. When a dividend or capital gain
is distributed, the Fund's net asset value decreases by the amount of the pay-
ment. ANY SUCH DISTRIBUTION WILL BE SUBJECT TO FEDERAL INCOME TAX, EVEN IF THE
DISTRIBUTION OCCURS SHORTLY AFTER A PURCHASE OF FUND SHARES. All dividends or
capital gains distributions will automatically be reinvested in additional
shares of the same class of the Fund at the then prevailing net asset value
unless an investor specifically requests that either dividends or capital
gains, or both, be paid in cash. The election to receive dividends or reinvest
them may be changed by writing to: Nuveen Rittenhouse Growth Fund, c/o Share-
holder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330. Such notice needs
to be received at least 5 days prior to the record date of any dividend or
capital gain distribution.
Under certain circumstances, a corporate shareholder may be entitled to a div-
idends received deduction with respect to such shareholder's taxable dividends
which are attributable to dividends received by the Fund on its equity securi-
ties.
If you do not furnish the Fund with your correct social security number or em-
ployer identification number, the Fund is required by federal law to withhold
federal income tax from your distributions and redemption proceeds at a rate
of 31%.
This section is not intended to be a full discussion of federal income tax
laws and the effect of such laws on you. A more detailed summary appears in
the Statement of Additional Information. There may be other federal, state, or
local tax considerations applicable to a particular investor. You are urged to
consult your own tax adviser.
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NET ASSET VALUE
The Fund's net asset value per share is determined as of the close of trading
(normally 4:00 p.m. eastern time) on each day the New York Stock Exchange is
open for business. The Fund's net asset value may not be calculated on days
during which the Fund receives no orders to purchase shares and no shares are
tendered for redemption. Net asset value per share of a class is calculated by
taking the fair value of the pro rata portion of the Fund's total assets at-
tributable to that class, including interest or dividends accrued but not yet
collected, less all liabilities attributable to the class (including the
class's pro rata portion of the
- -------------------------------------------------------------------------------
PAGE 19
<PAGE>
Fund's liabilities), and dividing by the total number of shares of that class
outstanding. The result, rounded to the nearest cent, is the net asset value
per share of that class.
In determining net asset value, expenses are accrued and applied daily and se-
curities and other assets for which market quotations are available are valued
at market value. Common stocks and other equity-type securities are valued at
the last sales price on the national securities exchange or Nasdaq on which
such securities are primarily traded; however, securities traded on a national
securities exchange or Nasdaq for which there were no transactions on a given
day or securities not listed on a national securities exchange or Nasdaq are
valued at the most recent bid prices. Debt securities are valued by a pricing
service that utilizes electronic data processing techniques to determine values
for normal institutional-sized trading units of debt securities without regard
to the existence of sale or bid prices when such values are believed to more
accurately reflect the fair market value of such securities; otherwise, actual
sale or bid prices are used. Any securities or other assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by the Board of Trustees. Debt securities having remaining maturi-
ties of 60 days or less when purchased are valued by the amortized cost method
when the Board of Trustees determines that the fair market value of such secu-
rities is their amortized cost. Under this method of valuation, a security is
initially valued at its acquisition cost, and thereafter amortization of any
discount or premium is assumed each day, regardless of the impact of fluctuat-
ing interest rates on the market value of the security. Regardless of the
method employed to value a particular security, all valuations are subject to
review by the Fund's Board of Trustees or its delegate who may determine the
appropriate value of a security whenever the value as calculated is signifi-
cantly different from the previous day's calculated value.
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GENERAL INFORMATION
The Custodian of the assets of the Fund is The Chase Manhattan Bank ("Chase"),
4 New York Plaza, New York, New York 10004-2413. Chase also provides certain
accounting services to the Fund. The Fund's transfer, shareholder services and
dividend paying agent, Shareholder Services, Inc., P.O. Box 5330, Denver, CO
80217-5330, performs bookkeeping, data processing and administrative services
for the maintenance of shareholder accounts.
The Fund is a series of Nuveen Investment Trust II ("Trust"). The Trust is an
open-end diversified management investment company under the Investment Company
Act of 1940. The Trust was organized as a Massachusetts business trust on June
27, 1997. The Board of Trustees of the Trust is authorized to issue an unlim-
ited number of shares in one or more series or "Funds," which may be divided
into classes of shares. Currently, the Fund is the only series authorized and
outstanding. Shares of the Fund are divided into four classes of shares desig-
nated as Class A Shares, Class B Shares, Class C Shares and Class R Shares.
Each class of shares represents an interest in the same portfolio of invest-
ments of the Fund. Each class of shares has equal rights as to voting, redemp-
tion, dividends and liquidation, except that each bears different class ex-
penses, including different distribution and service fees, and each has exclu-
sive voting rights with respect to any distribution or service plan applicable
to its shares. There are no conversion, preemptive or other subscription
rights, except that Class B Shares automatically convert into Class A Shares,
as described above. The Board of Trustees of the Trust has the right to estab-
lish additional series and classes of shares in the future, to change those se-
ries or classes and to determine the preferences, voting powers, rights and
privileges thereof.
The Trust is not required and does not intend to hold annual meetings of share-
holders. Shareholders owning more than 10% of the outstanding shares of the
Fund have the right to call a special meeting to remove Trustees or for any
other purpose.
Under Massachusetts law applicable to Massachusetts business trusts, sharehold-
ers of such a trust may, under certain circumstances, be held personally liable
as partners for its obligations. However, the Declaration of Trust of the Trust
contains an express disclaimer of shareholder liability for acts or obligations
of the Trust and requires that notice of this disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or
the Trustees. The Trust's Declaration of Trust further provides for indemnifi-
cation out of the assets and property of the Trust for all loss and expense of
any shareholder held personally liable for the obligations of the Trust. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which both inadequate insurance ex-
isted and the Trust or Fund itself was unable to meet its obligations. The
Trust believes the likelihood of the occurrence of these circumstances is re-
mote.
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PAGE 20
<PAGE>
Statement of Additional Information
November , 1997
Nuveen Investment Trust II
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN RITTENHOUSE GROWTH FUND
This Statement of Additional Information is not a prospectus. A prospectus may
be obtained from certain securities representatives, banks and other financial
institutions that have entered into sales agreements with John Nuveen & Co. In-
corporated, or from the Fund, c/o John Nuveen & Co. Incorporated, 333 West
Wacker Drive, Chicago, Illinois 60606. This Statement of Additional Information
relates to, and should be read in conjunction with, the Prospectus for the Fund
dated November , 1997 and any supplements to that Prospectus.
<TABLE>
<S> <C>
Table of Contents Page
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General Information B-2
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Investment Policies and Restrictions B-2
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Investment Policies and Techniques B-4
- --------------------------------------------------------------------------
Management B-14
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Fund Manager and Portfolio Manager B-16
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Portfolio Transactions B-17
- --------------------------------------------------------------------------
Net Asset Value B-18
- --------------------------------------------------------------------------
Tax Matters B-19
- --------------------------------------------------------------------------
Performance Information B-23
- --------------------------------------------------------------------------
Additional Information on the Purchase and Redemption of Fund Shares B-25
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Distribution and Service Plans B-29
- --------------------------------------------------------------------------
Independent Public Accountants and Custodian B-30
- --------------------------------------------------------------------------
Statement of Net Assets B-31
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Report of Independent Public Accountants B-32
- --------------------------------------------------------------------------
Appendix A--Ratings of Investments A-1
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</TABLE>
<PAGE>
GENERAL INFORMATION
Nuveen Rittenhouse Growth Fund (the "Fund") is a series of Nuveen Investment
Trust II (the "Trust"), an open-end diversified management series investment
company. Each series of the Trust represents shares of beneficial interest in a
separate portfolio of securities and other assets, with its own objectives and
policies. Currently, the Fund is the only series of the Trust authorized and
outstanding.
Certain matters under the Investment Company Act of 1940 which must be submit-
ted to a vote of the holders of the outstanding voting securities of a series
company shall not be deemed to have been effectively acted upon unless approved
by the holders of a majority of the outstanding voting securities of each se-
ries affected by such matter.
INVESTMENT POLICIES AND RESTRICTIONS
INVESTMENT RESTRICTIONS
The investment objective and certain fundamental investment policies of the
Fund are described in the Fund's Prospectus. The Fund, as a fundamental policy,
may not, without the approval of the holders of a majority of the shares of the
Fund:
(1) With respect to 75% of its total assets, purchase the securities of any is-
suer (except securities issued or guaranteed by the United States government or
any agency or instrumentality thereof) if, as a result, (i) more than 5% of the
Fund's total assets would be invested in securities of that issuer, or (ii) the
Fund would hold more than 10% of the outstanding voting securities of that is-
suer;
(2) Borrow money, except that the Fund may (i) borrow money from banks for tem-
porary or emergency purposes (but not for leverage or the purchase of invest-
ments) and (ii) make other investments or engage in other transactions permis-
sible under the Investment Company Act of 1940 that may involve a borrowing,
provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the
value of the Fund's total assets (including the amount borrowed), less the
Fund's liabilities (other than borrowings).
(3) Act as an underwriter of another issuer's securities, except to the extent
that the Fund may be deemed to be an underwriter within the meaning of the Se-
curities Act of 1933 in connection with the purchase and sale of portfolio se-
curities.
(4) Make loans to other persons, except through (i) the purchase of debt secu-
rities permissible under the Fund's investment policies, (ii) repurchase agree-
ments, or (iii) the lending of portfolio securities, provided that no such loan
of portfolio securities may be made by the Fund if, as a result, the aggregate
of such loans would exceed 33 1/3% of the value of the Fund's total assets.
(5) Purchase or sell physical commodities unless acquired as a result of owner-
ship of securities or other instruments (but this shall not prevent the Fund
from purchasing or selling options, futures contracts, or other derivative in-
struments, or from investing in securities or other instruments backed by phys-
ical commodities).
B-2
<PAGE>
(6) Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prohibit the Fund from pur-
chasing or selling securities or other instruments backed by real estate or of
issuers engaged in real estate activities).
(7) Issue senior securities, except as permitted under the Investment Company
Act of 1940.
(8) Purchase the securities of any issuer if, as a result, 25% or more of the
Fund's total assets would be invested in the securities of issuers whose prin-
cipal business activities are in the same industry (except that this restric-
tion shall not be applicable to securities issued or guaranteed by the U.S.
government or any agency or instrumentality thereof).
If a percentage restriction is adhered to at the time of investment, a later
increase in percentage resulting from a change in market value of the invest-
ment or the total assets will not constitute a violation of that restriction.
The foregoing fundamental investment policies, together with the investment ob-
jective of the Fund, and certain other policies specifically identified in the
prospectus, cannot be changed without approval by holders of a "majority of the
Fund's outstanding voting shares." As defined in the Investment Company Act of
1940, this means the vote of (i) 67% or more of the Fund's shares present at a
meeting, if the holders of more than 50% of the Fund's shares are present or
represented by proxy, or (ii) more than 50% of the Fund's shares, whichever is
less.
In addition to the foregoing fundamental investment policies, the Fund is also
subject to the following non-fundamental restrictions and policies, which may
be changed by the Board of Trustees. The Fund may not:
(1) Sell securities short, unless the Fund owns or has the right to obtain se-
curities equivalent in kind and amount to the securities sold short at no added
cost, and provided that transactions in options, futures contracts, options on
futures contracts, or other derivative instruments are not deemed to constitute
selling securities short.
(2) Purchase securities on margin, except that the Fund may obtain such short-
term credits as are necessary for the clearance of transactions; and provided
that margin deposits in connection with futures contracts, options on futures
contracts, or other derivative instruments shall not constitute purchasing se-
curities on margin.
(3) Purchase securities of open-end or closed-end investment companies except
in compliance with the Investment Company Act of 1940.
(4) Enter into futures contracts or related options if more than 30% of the
Fund's net assets would be represented by futures contracts or more than 5% of
the Fund's net assets would be committed to initial margin deposits and premi-
ums on futures contracts and related options.
B-3
<PAGE>
(5) Invest in direct interests in oil, gas or other mineral exploration pro-
grams or leases; however, the Fund may invest in the securities of issuers that
engage in these activities.
(6) Purchase securities when borrowings exceed 5% of its total assets. If due
to market fluctuations or other reasons, the value of the Fund's assets falls
below 300% of its borrowings, the Fund will reduce its borrowings within 3
business days. To do this, the Fund may have to sell a portion of its invest-
ments at a time when it may be disadvantageous to do so.
(7) Invest in illiquid securities if, as a result of such investment, more than
15% of the Fund's net assets would be invested in illiquid securities.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the discussion of the Fund's investment
objective, policies, and techniques that are described in the Prospectus.
SHORT-TERM INVESTMENTS
Short-Term Taxable Fixed Income Securities
For temporary defensive purposes and to keep cash on hand fully invested, the
Fund may invest up to 100% of its total assets in cash equivalents and short-
term taxable fixed income securities. Short-term taxable fixed income securi-
ties are defined to include, without limitation, the following:
(1) U.S. government securities, including bills, notes and bonds differing as
to maturity and rates of interest, which are either issued or guaranteed by the
U.S. Treasury or by U.S. government agencies or instrumentalities. U.S. govern-
ment agency securities include securities issued by (a) the Federal Housing Ad-
ministration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, and the Government National Mortgage As-
sociation, whose securities are supported by the full faith and credit of the
United States; (b) the Federal Home Loan Banks, Federal Intermediate Credit
Banks, and the Tennessee Valley Authority, whose securities are supported by
the right of the agency to borrow from the U.S. Treasury; (c) the Federal Na-
tional Mortgage Association, whose securities are supported by the discretion-
ary authority of the U.S. government to purchase certain obligations of the
agency or instrumentality; and (d) the Student Loan Marketing Association,
whose securities are supported only by its credit. While the U.S. government
provides financial support to such U.S. government-sponsored agencies or in-
strumentalities, no assurance can be given that it always will do so since it
is not so obligated by law. The U.S. government, its agencies, and instrumen-
talities do not guarantee the market value of their securities, and consequent-
ly, the value of such securities may fluctuate.
(2) Certificates of Deposit issued against funds deposited in a bank or savings
and loan association. Such certificates are for a definite period of time, earn
a specified rate of return, and are normally negotiable. If such certificates
of deposit are non-negotiable, they will be considered illiquid securities and
be subject to the Fund's 15% restriction on investments in illiquid securities.
Pursuant to the certificate of
B-4
<PAGE>
deposit, the issuer agrees to pay the amount deposited plus interest to the
bearer of the certificate on the dated specified thereon. Under current FDIC
regulations, the maximum insurance payable as to any one certificate of deposit
is $100,000; therefore, certificates of deposit purchased by the Fund may not
be fully insured.
(3) Bankers' acceptances which are short-term credit instruments used to fi-
nance commercial transactions. Generally, an acceptance is a time draft drawn
on a bank by an exporter or an importer to obtain a stated amount of funds to
pay for specific merchandise. The draft is then "accepted" by a bank that, in
effect, unconditionally guarantees to pay the face value of the instrument on
its maturity date. The acceptance may then be held by the accepting bank as an
asset or it may be sold in the secondary market at the going rate of interest
for a specific maturity.
(4) Repurchase agreements which involve purchases of debt securities. In such
an action, at the time the Fund purchases the security, it simultaneously
agrees to resell and redeliver the security to the seller, who also simultane-
ously agrees to buy back the security at a fixed price and time. This assures a
predetermined yield for the Fund during its holding period since the resale
price is always greater than the purchase price and reflects an agreed-upon
market rate. Such actions afford an opportunity for the Fund to invest tempo-
rarily available cash. The Fund may enter into repurchase agreements only with
respect to obligations of the U.S. government, its agencies or instrumentali-
ties; certificates of deposit; or bankers acceptances in which the Fund may in-
vest. Repurchase agreements may be considered loans to the seller, collateral-
ized by the underlying securities. The risk to the Fund is limited to the abil-
ity of the seller to pay the agreed-upon sum on the repurchase date; in the
event of default, the repurchase agreement provides that the affected Fund is
entitled to sell the underlying collateral. If the value of the collateral de-
clines after the agreement is entered into, however, and if the seller defaults
under a repurchase agreement when the value of the underlying collateral is
less than the repurchase price, the Fund could incur a loss of both principal
and interest. Rittenhouse monitors the value of the collateral at the time the
action is entered into and at all times during the term of the repurchase
agreement. Rittenhouse does so in an effort to determine that the value of the
collateral always equals or exceeds the agreed-upon repurchase price to be paid
to the Fund. If the seller were to be subject to a federal bankruptcy proceed-
ing, the ability of a Fund to liquidate the collateral could be delayed or im-
paired because of certain provisions of the bankruptcy laws.
(5) Bank time deposits, which are monies kept on deposit with banks or savings
and loan associations for a stated period of time at a fixed rate of interest.
There may be penalties for the early withdrawal of such time deposits, in which
case the yields of these investments will be reduced.
(6) Commercial paper, which are short-term unsecured promissory notes, includ-
ing variable rate master demand notes issued by corporations to finance their
current operations. Master demand notes are direct lending arrangements between
the Fund and a corporation. There is no secondary market for the notes. Howev-
er, they are redeemable by the Fund at any time. Rittenhouse will consider the
financial condition of the corporation (e.g., earning power, cash flow, and
other liquidity ratios) and will continuously monitor the corporation's ability
to meet all of its financial obligations, because the Fund's liquidity might be
impaired if the corporation were unable to pay principal and interest on de-
mand. Investments in commercial paper will be limited to commercial paper rated
in the two highest categories by a major rating agency or unrated commercial
paper which is, in the opinion of Rittenhouse, of comparable quality.
B-5
<PAGE>
HEDGING STRATEGIES
General Description of Hedging Strategies
The Fund may engage in hedging activities. Rittenhouse may cause the Fund to
utilize a variety of financial instruments, including options, futures con-
tracts (sometimes referred to as "futures") and options on futures contracts to
attempt to hedge the Fund's holdings.
Hedging instruments on securities generally are used to hedge against price
movements in one or more particular securities positions that the Fund owns or
intends to acquire. Hedging instruments on stock indices, in contrast, gener-
ally are used to hedge against price movements in broad equity market sectors
in which the Fund has invested or expects to invest. The use of hedging instru-
ments is subject to applicable regulations of the Securities and Exchange Com-
mission (the "SEC"), the several options and futures exchanges upon which they
are traded, the Commodity Futures Trading Commission (the "CFTC") and various
state regulatory authorities. In addition, the Fund's ability to use hedging
instruments will be limited by tax considerations.
General Limitations on Futures and Options Transactions
The Trust has filed a notice of eligibility for exclusion from the definition
of the term "commodity pool operator" with the CFTC and the National Futures
Association, which regulate trading in the futures markets. Pursuant to Section
4.5 of the regulations under the Commodity Exchange Act (the "CEA"), the notice
of eligibility for the Fund includes the representation that the Fund will use
futures contracts and related options solely for bona fide hedging purposes
within the meaning of CFTC regulations. The Fund will not enter into futures
and options transactions if the sum of the initial margin deposits and premiums
paid for unexpired options exceeds 5% of the Fund's total assets. In addition,
the Fund will not enter into futures contracts and options transactions if more
than 30% of its net assets would be committed to such instruments.
The foregoing limitations are not fundamental policies of the Fund and may be
changed without shareholder approval as regulatory agencies permit. Various ex-
changes and regulatory authorities have undertaken reviews of options and
futures trading in light of market volatility. Among the possible actions that
have been presented are proposals to adopt new or more stringent daily price
fluctuation limits for futures and options transactions and proposals to in-
crease the margin requirements for various types of futures transactions.
Asset Coverage for Futures and Options Positions
The Fund will comply with the regulatory requirements of the SEC and the CFTC
with respect to coverage of options and futures positions by registered invest-
ment companies and, if the guidelines so require, will set aside assets permit-
ted by the SEC and CFTC in a segregated custodial account in the amount pre-
scribed. Securities held in a segregated account cannot be sold while the
futures or options position is outstanding, unless replaced with other permis-
sible assets, and will be marked-to-market daily.
Stock Index Options
The Fund may (i) purchase stock index options for any purpose, (ii) sell stock
index options in order to
B-6
<PAGE>
close out existing positions, and/or (iii) write covered options on stock in-
dexes for hedging purposes. Stock index options are put options and call op-
tions on various stock indexes. In most respects, they are identical to listed
options on common stocks. The primary difference between stock options and in-
dex options occurs when index options are exercised. In the case of stock op-
tions, the underlying security, common stock, is delivered. However, upon the
exercise of an index option, settlement does not occur by delivery of the secu-
rities comprising the index. The option holder who exercises the index option
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in
the case of a put, the exercise price of the option. This amount of cash is
equal to the difference between the closing price of the stock index and the
exercise price of the option expressed in dollars times a specified multiple.
A stock index fluctuates with changes in the market values of the stock in-
cluded in the index. For example, some stock index options are based on a broad
market index, such as the Standard & Poor's 500 or the Value Line Composite In-
dex or a narrower market index, such as the Standard & Poor's 100. Indexes may
also be based on an industry or market segment, such as the AMEX Oil and Gas
Index or the Computer and Business Equipment Index. Options on stock indexes
are currently traded on the following exchanges: the Chicago Board of Options
Exchange, the New York Stock Exchange, the American Stock Exchange, the Pacific
Stock Exchange, and the Philadelphia Stock Exchange.
The Fund's use of stock index options is subject to certain risks. Successful
use by the Fund of options on stock indexes will be subject to the ability of
Rittenhouse to correctly predict movements in the directions of the stock mar-
ket. This requires different skills and techniques than predicting changes in
the prices of individual securities. In addition, the Fund's ability to effec-
tively hedge all or a portion of the securities in its portfolio, in anticipa-
tion of or during a market decline through transactions in put options on stock
indexes, depends on the degree to which price movements in the underlying index
correlate with the price movements of the securities held by the Fund. Inasmuch
as the Fund's securities will not duplicate the components of an index, the
correlation will not be perfect. Consequently, the Fund will bear the risk that
the prices of its securities being hedged will not move in the same amount as
the prices of its put options on the stock indexes. It is also possible that
there may be a negative correlation between the index and the Fund's securities
which would result in a loss on both such securities and the options on stock
indexes acquired by the Fund.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price and rate
movements can take place in the underlying markets that cannot be reflected in
the options markets. The purchase of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. The purchase of stock index
options involves the risk that the premium and transaction costs paid by the
Fund in purchasing an option will be lost as a result of unanticipated move-
ments in prices of the securities comprising the stock index on which the op-
tion is based.
Certain Considerations Regarding Options
There is no assurance that a liquid secondary market on an options exchange
will exist for any particular option, or at any particular time, and for some
options no secondary market on an exchange or elsewhere
B-7
<PAGE>
may exist. If the Fund is unable to close out a call option on securities that
it has written before the option is exercised, the Fund may be required to pur-
chase the optioned securities in order to satisfy its obligation under the op-
tion to deliver such securities. If the Fund is unable to effect a closing sale
transaction with respect to options on securities that it has purchased, it
would have to exercise the option in order to realize any profit and would in-
cur transaction costs upon the purchase and sale of the underlying securities.
The writing and purchasing of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. Imperfect correlation between the
options and securities markets may detract from the effectiveness of attempted
hedging. Options transactions may result in significantly higher transaction
costs and portfolio turnover for the Fund.
Federal Income Tax Treatment of Options
Certain option transactions have special federal income tax results for the
Fund. Expiration of a call option written by the Fund will result in short-term
capital gain. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the security covering the call option and, in determining
such gain or loss, the option premium will be included in the proceeds of the
sale.
If the Fund writes options, or purchases puts that are subject to the loss de-
ferral rules of Section 1092 of the Internal Revenue Code of 1986, as amended
(the "Code"), any losses on such options transactions, to the extent they do
not exceed the unrecognized gains on the securities covering the options, may
be subject to deferral until the securities covering the options have been
sold.
In the case of transactions involving "nonequity options," as defined in Code
Section 1256, the Fund will treat any gain or loss arising from the lapse,
closing out or exercise of such positions as 60% long-term and 40% short-term
capital gain or loss as required by Section 1256 of the Code. In addition, such
positions must be marked-to-market as of the last business day of the year, and
gain or loss must be recognized for federal income tax purposes in accordance
with the 60%/40% rule discussed above even though the position has not been
terminated. A "nonequity option" includes an option with respect to any group
of stocks or a stock index if there is in effect a designation by the CFTC of a
contract market for a contract based on such group of stocks or indexes. For
example, options involving stock indexes such as the Standard & Poor's 500 in-
dex would be "nonequity options" within the meaning of Code Section 1256.
Futures Contracts
The Fund may enter into futures contracts (hereinafter referred to as "Futures"
or "Futures Contracts"), including index Futures as a hedge against movements
in the equity markets, in order to establish more definitely the effective re-
turn on securities held or intended to be acquired by the Fund or for other
purposes permissible under the CEA. The Fund's hedging may include sales of
Futures as an offset against the effect of expected declines in stock prices
and purchases of Futures as an offset against the effect of expected increases
in stock prices. The Fund will not enter into Futures Contracts which are pro-
hibited under the CEA and will, to the extent required by regulatory authori-
ties, enter only into Futures Contracts that are traded on national futures ex-
changes and are standardized as to maturity date
B-8
<PAGE>
and underlying financial instrument. The principal interest rate Futures ex-
changes in the United States are the Board of Trade of the City of Chicago and
the Chicago Mercantile Exchange. Futures exchanges and trading are regulated
under the CEA by the CFTC.
An index Futures Contract is an agreement pursuant to which the parties agree
to take or make delivery of an amount of cash equal to the difference between
the value of the index at the close of the last trading day of the contract and
the price at which the index Futures Contract was originally written. Transac-
tion costs are incurred when a Futures Contract is bought or sold and margin
deposits must be maintained. A Futures Contract may be satisfied by delivery or
purchase, as the case may be, of the instrument or by payment of the change in
the cash value of the index. More commonly, Futures Contracts are closed out
prior to delivery by entering into an offsetting transaction in a matching
Futures Contract. Although the value of an index might be a function of the
value of certain specified securities, no physical delivery of those securities
is made. If the offsetting purchase price is less than the original sale price,
a gain will be realized; if it is more, a loss will be realized. Conversely, if
the offsetting sale price is more than the original purchase price, a gain will
be realized; if it is less, a loss will be realized. The transaction costs must
also be included in these calculations. There can be no assurance, however,
that the Fund will be able to enter into an offsetting transaction with respect
to a particular Futures Contract at a particular time. If the Fund is not able
to enter into an offsetting transaction, the Fund will continue to be required
to maintain the margin deposits on the Futures Contract.
Margin is the amount of funds that must be deposited by the Fund with its cus-
todian in a segregated account in the name of the futures commission merchant
in order to initiate Futures trading and to maintain the Fund's open positions
in Futures Contracts. A margin deposit is intended to ensure the Fund's perfor-
mance of the Futures Contract. The margin required for a particular Futures
Contract is set by the exchange on which the Futures Contract is traded and may
be significantly modified from time to time by the exchange during the term of
the Futures Contract. Futures Contracts are customarily purchased and sold on
margins that may range upward from less than 5% of the value of the Futures
Contract being traded.
If the price of an open Futures Contract changes (by increase in the case of a
sale or by decrease in the case of a purchase) so that the loss on the Futures
Contract reaches a point at which the margin on deposit does not satisfy margin
requirements, the broker will require an increase in the margin. However, if
the value of a position increases because of favorable price changes in the
Futures Contract so that the margin deposit exceeds the required margin, the
broker will pay the excess to the Fund. In computing daily net asset value, the
Fund will mark to market the current value of its open Futures Contracts. The
Fund expects to earn interest income on their margin deposits.
Because of the low margin deposits required, Futures trading involves an ex-
tremely high degree of leverage. As a result, a relatively small price movement
in a Futures Contract may result in immediate and substantial loss, as well as
gain, to the investor. For example, if at the time of purchase, 10% of the
value of the Futures Contract is deposited as margin, a subsequent 10% decrease
in the value of the Futures Contract would result in a total loss of the margin
deposit, before any deduction for the transaction costs, if the account were
then closed out. A 15% decrease would result in a loss equal to 150% of
B-9
<PAGE>
the original margin deposit, if the Futures Contract were closed out. Thus, a
purchase or sale of a Futures Contract may result in losses in excess of the
amount initially invested in the Futures Contract. However, the Fund would pre-
sumably have sustained comparable losses if, instead of the Futures Contract,
it had invested in the underlying financial instrument and sold it after the
decline.
Most United States Futures exchanges limit the amount of fluctuation permitted
in Futures Contract prices during a single trading day. The day limit estab-
lishes the maximum amount that the price of a Futures Contract may vary either
up or down from the previous day's settlement price at the end of a trading
session. Once the daily limit has been reached in a particular type of Futures
Contract, no trades may be made on that day at a price beyond that limit. The
daily limit governs only price movement during a particular trading day and
therefore does not limit potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures Contract prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of Futures positions and sub-
jecting some Futures traders to substantial losses.
There can be no assurance that a liquid market will exist at a time when the
Fund seeks to close out a Futures position. The Fund would continue to be re-
quired to meet margin requirements until the position is closed, possibly re-
sulting in a decline in the Fund's net asset value. In addition, many of the
contracts discussed above are relatively new instruments without a significant
trading history. As a result, there can be no assurance that an active second-
ary market will develop or continue to exist.
A public market exists in Futures Contracts covering a number of indexes, in-
cluding, but not limited to, the Standard & Poor's 500 Index, the Standard &
Poor's 100 Index, the NASDAQ 100 Index, the Value Line Composite Index and the
New York Stock Exchange Composite Index.
Options on Futures
The Fund may also purchase or write put and call options on Futures Contracts
and enter into closing transactions with respect to such options to terminate
an existing position. A futures option gives the holder the right, in return of
the premium paid, to assume a long position (call) or short position (put) in a
Futures Contract at a specified exercise price prior to the expiration of the
option. Upon exercise of a call option, the holder acquires a long position in
the Futures Contract and the writer is assigned the opposite short position. In
the case of a put option, the opposite is true. Prior to exercise or expira-
tion, a futures option may be closed out by an offsetting purchase or sale of a
futures option of the same series.
The Fund may use options on Futures Contracts in connection with hedging strat-
egies. Generally, these strategies would be applied under the same market and
market sector conditions in which the Fund uses put and call options on securi-
ties or indexes. The purchase of put options on Futures Contracts is analogous
to the purchase of puts on securities or indexes so as to hedge the Fund's se-
curities holdings against the risk of declining market prices. The writing of a
call option or the purchasing of a put option on a Futures Contract constitutes
a partial hedge against declining prices of the securities which are delivera-
ble upon exercise of the Futures Contract. If the futures price at expiration
of a written call option is below the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's holdings of securities. If the
futures price when the option is exercised is above the exercise price, howev-
er, the Fund will incur
B-10
<PAGE>
a loss, which may be offset, in whole or in part, by the increase in the value
of the securities held by the Fund that were being hedged. Writing a put option
or purchasing a call option on a Futures Contract serves as a partial hedge
against an increase in the value of the securities the Fund intends to acquire.
As with investments in Futures Contracts, the Fund is required to deposit and
maintain margin with respect to put and call options on Futures Contracts writ-
ten by it. Such margin deposits will vary depending on the nature of the under-
lying Futures Contract (and the related initial margin requirements), the cur-
rent market value of the option, and other futures positions held by the Fund.
The Funds will set aside in a segregated account at the Funds' custodian assets
equal in value to the amount due on the underlying obligation. Such segregated
assets will be marked to market daily, and additional assets will be placed in
the segregated account whenever the total value of the segregated account falls
below the amount due on the underlying obligation.
The risks associated with the use of options on Futures Contracts include the
risk that the Fund may close out its position as a writer of an option only if
a liquid secondary market exists for such options, which cannot be assured. The
Fund's successful use of options on Futures Contracts depends on Rittenhouse's
ability to correctly predict the movement in prices of Futures Contracts and
the underlying instruments, which may prove to be incorrect. In addition, there
may be imperfect correlation between the instruments being hedged and the
Futures Contract subject to the option. For additional information, see
"Futures Contracts."
Federal Income Tax Treatment of Futures Contracts
For federal income tax purposes, the Fund is required to recognize as income
for each taxable year its net unrealized gains and losses on Futures Contracts
as of the end of the year, as well as gains and losses actually realized during
the year. Except for transactions in Futures Contracts that are classified as
part of a "mixed straddle" under Code Section 1256, any gain or loss recognized
with respect to a Futures Contract is considered to be 60% long-term capital
gain or loss and 40% short-term capital gain or loss, without regard to the
holding period of the Futures Contract. In the case of a Futures transaction
not classified as a "mixed straddle," the recognition of losses may be required
to be deferred to a later taxable year.
Sales of Futures Contracts that are intended to hedge against a change in the
value of securities held by a Fund may affect the holding period of such secu-
rities and, consequently, the nature of the gain or loss on such securities
upon disposition.
The Fund will distribute to shareholders annually any net capital gains which
have been recognized for federal income tax purposes (including unrealized
gains at the end of the Fund's fiscal year) on Futures transactions. Such dis-
tributions will be combined with distributions of capital gains realized on the
Fund's other investments and shareholders will be advised of the nature of the
payments.
OTHER INVESTMENT POLICIES AND TECHNIQUES
Illiquid Securities
The Fund may invest in illiquid securities (i.e., securities that are not read-
ily marketable). For purposes of this restriction, illiquid securities include,
but are not limited to, restricted securities (securities the
B-11
<PAGE>
disposition of which is restricted under the federal securities laws), securi-
ties that may only be resold pursuant to Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), but that are deemed to be illiquid;
and repurchase agreements with maturities in excess of seven days. However, the
Fund will not acquire illiquid securities if, as a result, such securities
would comprise more than 15% of the value of the Fund's net assets. The Board
of Trustees or its delegate has the ultimate authority to determine, to the ex-
tent permissible under the federal securities laws, which securities are liquid
or illiquid for purposes of this 15% limitation. The Board of Trustees has del-
egated to Rittenhouse the day-to-day determination of the illiquidity of any
security held by the Fund, although it has retained oversight and ultimate re-
sponsibility for such determinations. Although no definitive liquidity criteria
are used, the Board of Trustees has directed Rittenhouse to look to such fac-
tors as (i) the nature of the market for a security (including the institu-
tional private resale market; the frequency of trades and quotes for the secu-
rity; the number of dealers willing to purchase or sell the security; and the
amount of time normally needed to dispose of the security, the method of solic-
iting offers and the mechanics of transfer), (ii) the terms of certain securi-
ties or other instruments allowing for the disposition to a third party or the
issuer thereof (e.g., certain repurchase obligations and demand instruments),
and (iii) other permissible relevant factors.
Restricted securities may be sold only in privately negotiated transactions or
in a public offering with respect to which a registration statement is in ef-
fect under the Securities Act. Where registration is required, the Fund may be
obligated to pay all or part of the registration expenses and a considerable
period may elapse between the time of the decision to sell and the time the
Fund may be permitted to sell a security under an effective registration state-
ment. If, during such a period, adverse market conditions were to develop, the
Fund might obtain a less favorable price than that which prevailed when it de-
cided to sell. Illiquid securities will be priced at a fair value as determined
in good faith by the Board of Trustees or its delegate. If, through the appre-
ciation of illiquid securities or the depreciation of liquid securities, the
Fund should be in a position where more than 15% of the value of its net assets
are invested in illiquid securities, including restricted securities which are
not readily marketable, the affected Fund will take such steps as is deemed ad-
visable, if any, to protect liquidity.
Short Sales Against the Box
When Rittenhouse believes that the price of a particular security held by the
Fund may decline, it may make "short sales against the box" to hedge the
unrealized gain on such security. Selling short against the box involves sell-
ing a security which the Fund owns for delivery at a specified date in the fu-
ture. The Fund will limit its transactions in short sales against the box to 5%
of its net assets. If, for example, the Fund bought 100 shares of ABC at $40
per share in January and the price appreciates to $50 in March, the Fund might
"sell short" the 100 shares at $50 for delivery the following July. Thereafter,
if the price of the stock declines to $45, it will realize the full $1,000 gain
rather than the $500 gain it would have received had it sold the stock in the
market. On the other hand, if the price appreciates to $55 per share, the Fund
would be required to sell at $50 and thus receive a $1,000 gain rather than the
$1,500 gain it would have received had it sold the stock in the market. The
Fund may also be required to pay a premium for short sales which would par-
tially offset any gain.
Warrants
The Fund may invest in warrants. Investing in warrants is purely speculative in
that they have no voting rights, pay no dividends, and have no rights with re-
spect to the assets of the corporation issuing
B-12
<PAGE>
them. Warrants basically are options to purchase equity securities at a spe-
cific price for a specific period of time. They do not represent ownership of
the securities but only the right to buy them. Warrants are issued by the is-
suer of the security, which may be purchased on their exercise. The prices of
warrants do not necessarily parallel the prices of the underlying securities.
The Fund does not intend to invest more than 5% of its net assets in warrants.
When-Issued Securities
The Fund may from time to time purchase securities on a "when-issued" basis.
The price of securities purchased on a when-issued basis is fixed at the time
the commitment to purchase is made, but delivery and payment for the securities
take place at a later date. Normally, the settlement date occurs within 45 days
of the purchase. During the period between the purchase and settlement, no pay-
ment is made by the Fund to the issuer and no interest is accrued on debt secu-
rities or dividend income is earned on equity securities. Forward commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date, which risk is in addition to the risk of decline
in value of the Fund's other assets. While when-issued securities may be sold
prior to the settlement date, the Fund intends to purchase such securities with
the purpose of actually acquiring them. At the time the Fund makes the commit-
ment to purchase a security on a when-issued basis, it will record the transac-
tion and reflect the value of the security in determining its net asset value.
The Fund does not believe that net asset value will be adversely affected by
purchases of securities on a when-issued basis.
The Fund will segregate and maintain assets equal in value to commitments for
when-issued securities. When the time comes to pay for when-issued securities,
the Fund will meet its obligations from then available cash flow, sale of the
securities held in the segregated account, described above, sale of other secu-
rities or, although it would not normally expect to do so, from the sale of the
when-issued securities themselves (which may have a market value greater or
less than the Fund's payment obligation).
B-13
<PAGE>
MANAGEMENT
The management of the Trust, including general supervision of the duties per-
formed for the Fund under the Management Agreement, is the responsibility of
its Board of Trustees. The number of trustees of the Trust is currently set at
six, two of whom are "interested persons" (as the term "interested persons" is
defined in the Investment Company Act of 1940) and four of whom are "disinter-
ested persons." The names and business addresses of the trustees and officers
of the Trust and their principal occupations and other affiliations during the
past five years are set forth below, with those trustees who are "interested
persons" of the Trust indicated by an asterisk.
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
POSITION AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH TRUST DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------
<C> <C> <C> <S>
Anthony T. Dean* 52 Chairman and Trustee President (since July
333 W. Wacker Drive 1996) and Director,
Chicago, IL 60606 formerly Executive Vice
President, of The John
Nuveen Company and John
Nuveen & Co.
Incorporated; Director
and President (since July
1996), formerly Executive
Vice President (from May
1994 to July 1996) of
Nuveen Institutional
Advisory Corp. and Nuveen
Advisory Corp.
- -------------------------------------------------------------------------------
Timothy R. Schwertfeger* 48 President and Trustee Chairman (since July
333 W. Wacker Drive 1996) and Director,
Chicago, IL 60606 formerly Executive Vice
President, of The John
Nuveen Company and John
Nuveen & Co.
Incorporated; Director
(since October 1992) and
Chairman (since July
1996), formerly Executive
Vice President (from May
1994 to July 1996) of
Nuveen Institutional
Advisory Corp and Nuveen
Advisory Corp.
- -------------------------------------------------------------------------------
James E. Bacon 66 Trustee Business consultant;
114 W. 4th Street Director of Lone Star
New York, NY 10036 Industries, Inc.
(cement); retired.
- -------------------------------------------------------------------------------
William L. Kissick 65 Trustee Professor, School of
University of Pennsylvania Medicine and the Wharton
224 NEB/2L School of Management and
Philadelphia, PA 19104 Chairman, Leonard Davis
Institute of Health
Economics, University of
Pennsylvania.
- -------------------------------------------------------------------------------
Thomas E. Leafstrand 65 Trustee Retired; previously Vice
412 W. Franklin President in charge of
Wheaton, IL 60187 Municipal Underwriting
and Dealer Sales at The
Northern Trust Company.
- -------------------------------------------------------------------------------
Sheila W. Wellington 65 Trustee President (since 1993) of
250 Park Avenue Catalyst (a not-for-
New York, NY 10003 profit organization
focusing on women's
leadership development in
business and the
professions).
</TABLE>
- --------------------------------------------------------------------------------
B-14
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
POSITION AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH TRUST DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------
<C> <C> <C> <S>
Bruce P. Bedford 57 Executive Vice Executive Vice President of John
333 West Wacker Drive President Nuveen & Co. Incorporated,
Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
(since January 1997); prior
thereto, Chairman and CEO of
Flagship Resources Inc. and
Flagship Financial Inc. and the
Flagship funds.
- -------------------------------------------------------------------------------
Kathleen M. Flanagan 50 Vice President Vice President of John Nuveen &
333 West Wacker Drive Co. Incorporated; Vice President
Chicago, IL 60606 (since June 1996) of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory Corp.
- -------------------------------------------------------------------------------
Anna R. Kucinskis 51 Vice President Vice President of John Nuveen &
333 West Wacker Drive Co. Incorporated.
Chicago, IL 60606
- -------------------------------------------------------------------------------
Larry W. Martin 46 Vice President and Vice President (since September
333 West Wacker Drive Assistant Secretary 1992), Assistant Secretary and
Chicago, IL 60606 Assistant General Counsel of
John Nuveen & Co. Incorporated;
Vice President (since May 1993)
and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.;
Assistant Secretary of The John
Nuveen Company (since February
1993).
- -------------------------------------------------------------------------------
O. Walter Renfftlen 58 Vice President and Vice President and Controller of
333 West Wacker Drive Controller The John Nuveen Company, John
Chicago, IL 60606 Nuveen & Co. Incorporated,
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
- -------------------------------------------------------------------------------
H. William Stabenow 63 Vice President and Vice President and Treasurer of
333 West Wacker Drive Treasurer The John Nuveen Company, John
Chicago, IL 60606 Nuveen & Co. Incorporated,
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
- -------------------------------------------------------------------------------
Gifford R. Zimmerman 41 Vice President and Vice President (since September
333 West Wacker Drive Assistant Secretary 1992), Assistant Secretary and
Chicago, IL 60606 Associate General Counsel,
previously Assistant General
Counsel of John Nuveen & Co.
Incorporated; Vice President
(since May 1993) and Assistant
Secretary of Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.
</TABLE>
- --------------------------------------------------------------------------------
Anthony T. Dean, Thomas E. Leafstrand and Timothy R. Schwertfeger serve as mem-
bers of the Executive Committee of the Board of Trustees. The Executive Commit-
tee, which meets between regular meetings of the Board of Trustees, is autho-
rized to exercise all of the powers of the Board of Trustees.
Mr. Dean and Mr. Schwertfeger are also directors or trustees, as the case may
be, of 95 Nuveen open-end funds and closed-end funds advised by Nuveen Advisory
Corp.
The other trustees of the Trust are also trustees of 8 open-end and closed-end
funds advised by NIAC.
B-15
<PAGE>
The following table sets forth compensation estimated to be paid by the Trust
to each of the trustees who are not designated "interested persons" during the
Trust's fiscal year ending July 31, 1998. The Trust has no retirement or pen-
sion plans. The officers and trustees affiliated with Nuveen serve without any
compensation from the Trust.
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
FROM TRUST
AGGREGATE AND FUND
COMPENSATION COMPLEX
FROM THE PAID TO
NAME OF TRUSTEE TRUST TRUSTEES
- -----------------------------------------------
<S> <C> <C>
James E. Bacon $2,273.89 $32,000
William L. Kissick $2,273.89 $28,000
Thomas E. Leafstrand $2,677.17 $31,600
Sheila W. Wellington $2,273.89 $28,000
</TABLE>
Each trustee who is not affiliated with NIAC receives a $20,000 annual retainer
for serving as a director or trustee of all funds for which NIAC serves as in-
vestment adviser or manager and a $1,000 fee per day plus expenses for atten-
dance at all meetings held on a day on which a regularly scheduled Board meet-
ing is held, a $500 fee per day plus expenses for attendance in person or a
$500 fee per day plus expenses for attendance by telephone at a meeting held on
a day on which no regular Board meeting is held and a $100 fee per day plus ex-
penses for attendance in person or by telephone at a meeting of the Executive
Committee held solely to declare dividends. The annual retainer, fees and ex-
penses are allocated among the funds for which NIAC serves as investment ad-
viser or manager on the basis of relative net asset sizes. The Trust requires
no employees other than its officers, all of whom are compensated by NIAC.
As of November 12, 1997 NIAC owned all the shares of each class of the Fund
with 5,000 shares outstanding (Class A, Class B, Class C, and Class R).
FUND MANAGER AND PORTFOLIO MANAGER
Fund Manager. NIAC acts as the manager of the Fund, with responsibility for the
overall management of the Fund. Its address is 333 West Wacker Drive, Chicago,
Illinois 60606. NIAC has entered into a Sub-Advisory Agreement with Rittenhouse
under which Rittenhouse, subject to NIAC's supervision, manages the Fund's in-
vestment portfolio. NIAC is also responsible for managing the Fund's business
affairs and providing day-to-day administrative services to the Fund.
NIAC is a wholly-owned subsidiary of Nuveen, which is also the principal under-
writer of the Fund's shares. Nuveen is sponsor of the Nuveen Tax-Free Unit
Trust, a registered unit investment trust, is also the principal underwriter
for the Nuveen Mutual Funds, and has served as co-managing underwriter for the
shares of the Nuveen Exchange-Traded Funds. Over 1,000,000 individuals have in-
vested to date in Nuveen's funds and trusts. Founded in 1898, Nuveen is a sub-
sidiary of The John Nuveen Company which, in turn, is approximately 78% owned
by The St. Paul Companies, Inc. ("St. Paul"). St. Paul is located in St. Paul,
Minnesota, and is principally engaged in providing property-liability insurance
through subsidiaries.
B-16
<PAGE>
Sub-Adviser. Rittenhouse is an institutional investment management firm based
in Radnor, Pennsylvania with over 18 years of experience and approximately $9
billion in assets under management as of September 30, 1997. Under the Sub-Ad-
visory Agreement, Rittenhouse is compensated by NIAC for its investment advi-
sory services to the Fund.
Rittenhouse provides continuous advice and recommendations concerning the
Fund's investments, and is responsible for selecting the broker-dealers who
execute the portfolio transactions. Rittenhouse also serves as investment ad-
viser to pension and profit-sharing plans, and other institutional and private
investors. Rittenhouse is a wholly-owned subsidiary of The John Nuveen Compa-
ny.
PORTFOLIO TRANSACTIONS
Rittenhouse is responsible for decisions to buy and sell securities for the
Fund and for the placement of the Fund's securities business, the negotiation
of the commissions to be paid on brokered transactions, the prices for princi-
pal trades in securities, and the allocation of portfolio brokerage and prin-
cipal business. It is the policy of Rittenhouse to seek the best execution at
the best security price available with respect to each transaction, and with
respect to brokered transactions, in light of the overall quality of brokerage
and research services provided to the respective adviser and its advisees. The
best price to the Fund means the best net price without regard to the mix be-
tween purchase or sale price and commission, if any. Purchases may be made
from underwriters, dealers, and, on occasion, the issuers. Commissions will be
paid on the Fund's futures and options transactions, if any. The purchase
price of portfolio securities purchased from an underwriter or dealer may in-
clude underwriting commissions and dealer spreads. The Fund may pay mark-ups
on principal transactions. In selecting broker-dealers and in negotiating com-
missions, Rittenhouse considers the firm's reliability, the quality of its ex-
ecution services on a continuing basis and its financial condition. Brokerage
will not be allocated based on the sale of the Fund's shares.
Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)") permits
an investment adviser, under certain circumstances, to cause an account to pay
a broker or dealer who supplies brokerage and research services a commission
for effecting a transaction in excess of the amount of commission another bro-
ker or dealer would have charged for effecting the transaction. Brokerage and
research services include (a) furnishing advice as to the value of securities,
the advisability of investing, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; (b) fur-
nishing analyses and reports concerning issuers, industries, securities, eco-
nomic factors and trends, portfolio strategy, and the performance of accounts;
and (c) effecting securities transactions and performing functions incidental
thereto (such as clearance, settlement, and custody).
In selecting brokers, Rittenhouse considers investment and market information
and other research, such as economic, securities and performance measurement
research, provided by such brokers, and the quality and reliability of broker-
age services, including execution capability, performance, and financial re-
sponsibility. Accordingly, the commissions charged by any such broker may be
greater than the amount another firm might charge if Rittenhouse determines in
good faith that the amount of such commissions is reasonable in relation to
the value of the research information and brokerage services provided by such
broker to Rittenhouse or the Fund. Rittenhouse believes that the research in-
formation received in this
B-17
<PAGE>
manner provides the Fund with benefits by supplementing the research otherwise
available to the Fund. The Management Agreement and the Sub-Advisory Agreement
provide that such higher commissions will not be paid by the Fund unless the
applicable adviser determines in good faith that the amount is reasonable in
relation to the services provided. The investment advisory fees paid by the
Fund to NIAC under the Management Agreement or the subadvisory fees paid by
NIAC to Rittenhouse under the Sub-Advisory Agreement are not reduced as a re-
sult of receipt by either NIAC or Rittenhouse of research services.
Rittenhouse places each place portfolio transactions for other advisory ac-
counts managed by it. Research services furnished by firms through which the
Fund effects its securities transactions may be used by Rittenhouse in servic-
ing all of its accounts; not all of such services may be used by Rittenhouse in
connection with the Fund. Rittenhouse believes it is not possible to measure
separately the benefits from research services to each of the accounts (includ-
ing the Fund) managed by it. Because the volume and nature of the trading ac-
tivities of the accounts are not uniform, the amount of commissions in excess
of those charged by another broker paid by each account for brokerage and re-
search services will vary. However, Rittenhouse believes such costs to the Fund
will not be disproportionate to the benefits received by the Fund on a continu-
ing basis. Rittenhouse seeks to allocate portfolio transactions equitably when-
ever concurrent decisions are made to purchase or sell securities by the Fund
and another advisory account. In some cases, this procedure could have an ad-
verse effect on the price or the amount of securities available to the Fund. In
making such allocations between the Fund and other advisory accounts, the main
factors considered by Rittenhouse are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment and the size of investment commitments gen-
erally held.
Under the Investment Company Act of 1940, the Fund may not purchase portfolio
securities from any underwriting syndicate of which Nuveen is a member except
under certain limited conditions set forth in Rule 10f-3. The Rule sets forth
requirements relating to, among other things, the terms of a security purchased
by the Fund, the amount of securities that may be purchased in any one issue
and the assets of the Fund that may be invested in a particular issue. In addi-
tion, purchases of securities made pursuant to the terms of the Rule must be
approved at least quarterly by the Board of Trustees, including a majority of
the trustees who are not interested persons of the Trust.
NET ASSET VALUE
As stated in the Prospectus, the Fund's net asset value per share is determined
as of the close of trading (normally 4:00 p.m. eastern time) on each day the
New York Stock Exchange (the "Exchange") is open for business. The Exchange is
not open for trading on New Year's Day, Washington's Birthday, Martin Luther
King's birthday, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share of a class of
shares of a Fund will be computed by dividing the value of the Fund's assets
attributable to the class, less the liabilities attributable to the class, by
the number of shares of the class outstanding.
B-18
<PAGE>
TAX MATTERS
The following discussion of federal income tax matters is based upon the advice
of Chapman and Cutler, counsel to the Trust.
As described in the Prospectus, the Fund intends to qualify under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code") for tax treatment
as a regulated investment company. In order to qualify as a regulated invest-
ment company, the Fund (i) must elect to be treated as a regulated investment
company and (ii) for each taxable year thereafter must satisfy certain require-
ments relating to the source of its income, diversification of its assets, and
distributions of its income to shareholders. First, the Fund must derive at
least 90% of its annual gross income (including tax-exempt interest) from divi-
dends, interest, payments with respect to securities loans, gains from the sale
or other disposition of stock or securities, foreign currencies or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies (the "90% gross income test"). Second, for its initial year the Fund
must derive less than 30% of its annual gross income from the sale or other
disposition of any of the following which was held for less than three months:
stock, securities and certain options, futures, or forward contracts (the
"short-short test"). The Taxpayer Relief Act of 1997 (the "1997 Act") has re-
pealed the short-short test for taxable years beginning after the date of its
enactment. Third, the Fund must diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the value of its total
assets is comprised of cash, cash items, United States Government securities,
securities of other regulated investment companies and other securities limited
in respect of any one issuer to an amount not greater in value than 5% of the
value of the Fund's total assets and to not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of
the Fund's total assets is invested in the securities of any one issuer (other
than United States Government securities and securities of other regulated in-
vestment companies) or two or more issuers controlled by a Fund and engaged in
the same, similar or related trades or businesses.
As a regulated investment company, the Fund will not be subject to federal in-
come tax in any taxable year for which it distributes at least 90% of the sum
of (i) its "investment company taxable income" (without regard to its net capi-
tal gain, i.e., the excess of its net long-term capital gain over its short-
term capital loss) and (ii) its net tax-exempt interest (the excess of its
gross tax-exempt interest income over certain disallowed deductions). In addi-
tion, to the extent the Fund timely distributes to shareholders at least 98% of
its taxable income (including any net capital gain), it will not be subject to
the 4% excise tax on certain undistributed income of "regulated investment com-
panies." The Fund intends to make timely distributions in compliance with these
requirements and consequently it is anticipated that it generally will not be
required to pay the excise tax. The Fund may retain for investment its net cap-
ital gain (which consists of the excess of its net long-term capital gain over
its net short-term capital loss). However, if the Fund retains any net capital
gain or any investment company taxable income, it will be subject to federal
income tax at regular corporate rates on the amount retained. If the Fund re-
tains any net capital gain, the Fund may designate the retained amount as un-
distributed capital gains in a notice to its shareholders who, if subject to
federal income tax on long-term capital gains, (i) will be required to include
in income for federal income tax purposes, as long-term capital gain, their
shares of such undistributed amount, and (ii) will be entitled to credit their
proportionate shares of the tax
B-19
<PAGE>
paid by the Fund against their federal income tax liabilities if any, and to
claim refunds to the extent the credit exceeds such liabilities. For federal
income tax purposes, the tax basis of shares owned by a shareholder of the
Fund will be increased by an amount equal under current law to 65% of the
amount of undistributed net capital gains included in the shareholder's gross
income. The Fund intends to distribute at least annually to its shareholders
all or substantially all of its investment company taxable income and net cap-
ital gain.
Treasury regulations permit a regulated investment company, in determining its
investment company taxable income and net capital gain, to elect (unless it
has made a taxable year election for excise tax purposes as discussed below)
to treat all or part of any net capital loss, any net long-term capital loss
or any net foreign currency loss incurred after October 31 as if they had been
incurred in the succeeding year.
If the Fund engages in hedging transactions involving financial futures and
options, these transactions will be subject to special tax rules, the effect
of which may be to accelerate income to the Fund, defer the Fund's losses,
cause adjustments in the holding periods of the Fund's securities, convert
long-term capital gains into short-term capital gains and convert short-term
capital losses into long-term capital losses. These rules could therefore af-
fect the amount, timing and character of distributions to shareholders.
Prior to purchasing shares in the Fund, a prospective shareholder should care-
fully consider the impact of dividends or distributions which are expected to
be or have been declared, but not paid. Any dividend or distribution declared
shortly after a purchase of such shares prior to the record date will have the
effect of reducing the per share net asset value by the per share amount of
the dividend or distribution and will be subject to federal income tax to the
extent it is a distribution of ordinary income or capital gain.
In any taxable year of the Fund, distributions from the Fund, other than dis-
tributions which are designated as capital gains dividends will to the extent
of the earnings and profits on the Fund constitute dividends for Federal in-
come tax purposes which are taxable as ordinary income to shareholders. To the
extent that distributions to a shareholder in any year exceed the Fund's cur-
rent and accumulated earnings and profits, they will be treated as a return of
capital and will reduce the shareholder's basis in his or her shares and, to
the extent that they exceed his or her basis, will be treated as gain from the
sale of such shares as discussed below. It should be noted that certain legis-
lative proposals have been made which could affect the calculation of basis
for shareholders holding securities that are substantially identical to the
Fund's securities. Distributions of the Fund's net capital gain which are
properly designated as capital gain dividends by the Fund will be taxable to
the shareholders as long-term capital gain, regardless of the length of time
the shares have been held by a shareholder. Distributions will be taxed in the
manner described (i.e., as ordinary income, long-term capital gain, return of
capital or exempt-interest dividends) even if reinvested in additional shares
of the Fund.
Although dividends generally will be treated as distributed when paid, divi-
dends declared in October, November or December, payable to shareholders of
record on a specified date in one of those months and paid during the follow-
ing January, will be treated as having been distributed by the Fund (and re-
ceived by the shareholders) on December 31 of the year such dividends are de-
clared.
B-20
<PAGE>
The redemption or exchange of the shares of the Fund normally will result in
capital gain or loss to the shareholders. Generally, a shareholder's gain or
loss will be long-term gain or loss if the shares have been held for more than
one year. Present law taxes both long- and short-term capital gains of corpo-
rations at the rates applicable to ordinary income. For taxpayers other than
corporations, net capital gains (which is defined as net long-term capital
gain over net short-term capital loss for the taxable year) are subject to a
maximum marginal stated tax rate of either 28% or 20%, depending upon the
holding period of the capital assets. In particular, net capital gain, exclud-
ing net gain from property held more than one year but not more than 18 months
and gain on certain other assets, is subject to a maximum marginal stated tax
rate of 20% (10% in the case of certain taxpayers in the lowest tax bracket).
Net capital gain that is not taxed at the maximum marginal stated tax rate of
20% (or 10%) as described in the preceding sentence, is generally subject to a
maximum marginal stated tax rate of 28%. The date on which a share is acquired
(i.e., the "trade date") is excluded for purposes of determining the holding
period of the share. It should be noted that legislative proposals are intro-
duced from time to time that affect tax rates and could affect relative dif-
ferences at which ordinary income and capital gains are taxed.
In addition, please note that capital gains may be recharacterized as ordinary
income in the case of certain financial transactions that are considered "con-
version transactions" effective for transactions entered into after April 30,
1993. Shareholders and prospective investors should consult with their tax ad-
visers regarding the potential effect of this provision on their investment in
shares of the Fund.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Fund as long as the shares
of the Fund are held by or for 500 or more persons at all times during the
taxable year or another exception is met. In the event the shares of the Fund
are held by fewer than 500 persons, additional taxable income may be realized
by the individual (and other non-corporate) shareholders in excess of the dis-
tributions received from the Fund.
All or a portion of a sales load paid in purchasing shares of the Fund cannot
be taken into account for purposes of determining gain or loss on the redemp-
tion or exchange of such shares within 90 days after their purchase to the ex-
tent shares of the Fund or another fund are subsequently acquired without pay-
ment of a sales load or with the payment of a reduced sales load pursuant to
the reinvestment or exchange privilege. Any disregarded portion of such load
will result in an increase in the shareholder's tax basis in the shares subse-
quently acquired. Moreover, losses recognized by a shareholder on the redemp-
tion or exchange of shares of the Fund held for six months or less are disal-
lowed to the extent of any distribution of exempt-interest dividends received
with respect to such shares and, if not disallowed, such losses are treated as
long-term capital losses to the extent of any distributions of long-term capi-
tal gains made with respect to such shares. In addition, no loss will be al-
lowed on the redemption or exchange of shares of the Fund if the shareholder
purchases other shares of the Fund (whether through reinvestment of distribu-
tions or otherwise) or the shareholder acquires or enters into a contract or
option to acquire securities that are substantially identical to shares of the
Fund within a period of 61 days beginning 30 days before and ending 30 days
after such redemption or exchange. If disallowed, the loss will be reflected
in an adjustment to the basis of the shares acquired.
B-21
<PAGE>
If in any year the Fund should fail to qualify under Subchapter M for tax
treatment as a regulated investment company, the Fund would incur a regular
corporate federal income tax upon its income for that year, and distributions
to its shareholders would be taxable to shareholders as ordinary dividend in-
come for federal income tax purposes to the extent of the Fund's available
earnings and profits.
The Fund is required in certain circumstances to withhold 31% of taxable divi-
dends and certain other payments paid to non-corporate holders of shares who
have not furnished to the Fund their correct taxpayer identification number (in
the case of individuals, their social security number) and certain certifica-
tions, or who are otherwise subject to backup withholding.
Shareholders who are non-resident aliens are subject to U.S. withholding tax on
ordinary income dividends at a rate of 30% or such lower rate as prescribed by
an applicable tax treaty.
A corporate shareholder may be entitled to a 70% dividends received deduction
with respect to any portion of such shareholder's ordinary income dividends
which are attributable to dividends received by the Fund on certain Equity Se-
curities. This rule does not apply to certain corporate shareholders, such as
"S" corporations, which are not eligible for the deduction because of their
special characteristics and also does not apply for purposes of special taxes
such as the accumulated earnings tax and the personal holding corporation tax.
The Fund will designate the portion of any taxable dividend which is eligible
for this deduction. However, a corporate shareholder should be aware that Sec-
tions 246 and 246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations in-
clude a requirement that stock (and therefore Shares of the Fund) must gener-
ally be held at least 46 days (as determined under, and during the period spec-
ified in, Section 246(c) of the Code). Regulations have been issued which ad-
dress special rules that must be considered in determining whether the 46 day
holding requirement is met. Moreover, the allowable percentage of the deduction
will generally be reduced from 70% if a corporate shareholder owns Shares of
the Fund the financing of which is directly attributable to indebtedness in-
curred by such corporation. It should be noted that various legislative propos-
als that would affect the dividends received deduction have been introduced. To
the extent dividends received by the Fund are attributable to foreign corpora-
tions, a corporate shareholder will not be entitled to the dividends received
deduction with respect to its share of such foreign dividends since the divi-
dends received deduction is generally available only with respect to dividends
paid by domestic corporations. It should be noted that payments to the Fund of
dividends on Equity Securities that are attributable to foreign corporations
may be subject to foreign withholding taxes. Corporate shareholders should con-
sult with their tax advisers with respect to the limitations on, and possible
modifications to, the dividends received deduction.
The foregoing is a general and abbreviated summary of the provisions of the
Code and Treasury Regulations presently in effect as they directly govern the
federal income taxation of the Fund and its shareholders and relates only to
the federal income tax status of the Fund and to tax treatment of distributions
by the Fund to United States shareholders. For complete provisions, reference
should be made to the pertinent Code sections and Treasury Regulations. The
Code and Treasury Regulations are subject to change by legislative or adminis-
trative action, and any such change may be retroactive with respect to Fund
transactions. Shareholders are advised to consult their own tax advisers for
more detailed information concerning the federal taxation of the Fund and the
income tax consequences to its shareholders, as well as with respect to for-
eign, state and local tax consequences of ownership of Fund shares.
B-22
<PAGE>
PERFORMANCE INFORMATION
As explained in the Prospectus, the historical investment performance of the
Fund may be shown in the form of "average annual total return," and "cumula-
tive total return" each of which will be calculated separately for each class
of shares.
The average annual total return quotation is computed in accordance with a
standardized method prescribed by SEC rules. The average annual total return
for a specific period is found by taking a hypothetical, $1,000 investment
("initial investment") in Fund shares on the first day of the period, reducing
the amount to reflect the maximum sales charge, and computing the "redeemable
value" of that investment at the end of the period. The redeemable value is
then divided by the initial investment, and this quotient is taken to the Nth
root (N representing the number of years in the period) and 1 is subtracted
from the result, which is then expressed as a percentage. The calculation as-
sumes that all income and capital gains distributions have been reinvested in
Fund shares at net asset value on the reinvestment dates during the period.
Calculation of cumulative total return is not subject to a prescribed formula.
Cumulative total return for a specific period is calculated by first taking a
hypothetical initial investment in Fund shares on the first day of the period,
deducting (in some cases) the maximum sales charge, and computing the "redeem-
able value" of that investment at the end of the period. The cumulative total
return percentage is then determined by subtracting the initial investment
from the redeemable value and dividing the remainder by the initial investment
and expressing the result as a percentage. The calculation assumes that all
income and capital gains distributions by the Fund have been reinvested at net
asset value on the reinvestment dates during the period. Cumulative total re-
turn may also be shown as the increased dollar value of the hypothetical in-
vestment over the period. Cumulative total return calculations that do not in-
clude the effect of the sales charge would be reduced if such charge were in-
cluded.
From time to time, the Fund may compare its risk-adjusted performance with
other investments that may provide different levels of risk and return. For
example, the Fund may compare its risk level, as measured by the variability
of its periodic returns, or its RISK-ADJUSTED TOTAL RETURN, with those of
other funds or groups of funds. Risk-adjusted total return would be calculated
by adjusting each investment's total return to account for the risk level of
the investment.
The risk level for a class of shares of the Fund, and any of the other invest-
ments used for comparison, would be evaluated by measuring the variability of
the investment's return, as indicated by the standard deviation of the invest-
ment's monthly returns over a specified measurement period (e.g., two years).
An investment with a higher standard deviation of monthly returns would indi-
cate that a fund had greater price variability, and therefore greater risk,
than an investment with a lower standard deviation.
THE RISK-ADJUSTED TOTAL RETURN for a class of shares of the Fund and for other
investments over a specified period would be evaluated by dividing (a) the re-
mainder of the investment's annualized two-year total return minus the
annualized total return of an investment in Treasury bill securities (essen-
tially a risk-free return) over that period, by (b) the standard deviation of
the investment's monthly returns for the period. This ratio is sometimes re-
ferred to as the "Sharpe measure" of return. An investment with a higher
Sharpe measure would be regarded as producing a higher return for the amount
of risk assumed during the measurement period than an investment with a lower
Sharpe measure.
B-23
<PAGE>
Class A Shares of the Fund are sold at net asset value plus a current maximum
sales charge of 5.25% of the offering price. This current maximum sales charge
will typically be used for purposes of calculating performance figures. Re-
turns and net asset value of each class of shares of the Fund will fluctuate.
Factors affecting the performance of the Fund include general market condi-
tions, operating expenses and investment management. Any additional fees
charged by a securities representative or other financial services firm would
reduce returns described in this section. Shares of the Fund are redeemable at
net asset value, which may be more or less than original cost.
In reports or other communications to shareholders or in advertising and sales
literature, the Fund may also compare its performance with that of: (1) the
Consumer Price Index and (2) equity mutual funds or mutual fund indexes as re-
ported by Lipper Analytical Services, Inc. ("Lipper"), Morningstar, Inc.
("Morningstar"), Wiesenberger Investment Companies Service ("Wiesenberger")
and CDA Investment Technologies, Inc. ("CDA") or similar independent services
which monitor the performance of mutual funds, or other industry or financial
publications such as Barron's, Changing Times, Forbes and Money Magazine. Per-
formance comparisons by these indexes, services or publications may rank mu-
tual funds over different periods of time by means of aggregate, average,
year-by-year, or other types of total return and performance figures. Any
given performance quotation or performance comparison should not be considered
as representative of the performance of the Fund for any future period.
There are differences and similarities between the investments which the Fund
may purchase and the investments measured by the indexes and reporting serv-
ices which are described herein. The Consumer Price Index is generally consid-
ered to be a measure of inflation. Lipper, Morningstar, Wiesenberger and CDA
are widely recognized mutual fund reporting services whose performance calcu-
lations are based upon changes in net asset value with all dividends rein-
vested and which do not include the effect of any sales charges.
Rittenhouse's Performance Record
The Fund does not have any prior operating history. The table below presents
annual investment returns for the Rittenhouse Blended Equity Composite between
January 1, 1983 (inception) and September 30, 1997. The Rittenhouse Blended
Equity Composite represents the composite performance of the 5,584 managed ac-
counts totalling approximately $2.6 billion for which Rittenhouse serves as
investment adviser and that have the same investment objectives and policies
as the Fund.
<TABLE>
<CAPTION>
1ST QTR-
3RD QTR ANNUAL TOTAL RETURNS FOR THE YEAR ENDING DECEMBER 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rittenhouse (Gross)..... 27.08% 18.97% 38.66% 2.60% 2.87% 5.66% 35.22% 1.64% 33.84%
Rittenhouse (Net)....... 25.80% 17.33% 36.82% 1.13% 1.40% 4.15% 33.41% 0.17% 32.05%
S&P 500................. 29.63% 22.95% 37.53% 1.31% 10.06% 7.61% 30.40% -3.11% 31.63%
Lipper Growth Fund In-
dex.................... 27.23% 17.48% 32.65% -1.57% 11.98% 7.63% 36.33% -5.41% 27.47%
</TABLE>
<TABLE>
<CAPTION>
ANNUAL TOTAL RETURNS FOR THE YEAR ENDING DECEMBER 31,
1988 1987 1986 1985 1984 1983
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rittenhouse (Gross)..... 18.90% 4.98% 23.43% 38.89% 13.40% 28.48%
Rittenhouse (Net)....... 17.26% 3.47% 21.74% 37.04% 11.81% 26.73%
S&P 500................. 16.56% 5.25% 18.66% 31.73% 6.27% 22.56%
Lipper Growth Fund In-
dex.................... 14.13% 3.25% 15.59% 30.14% -3.60% 21.35%
</TABLE>
B-24
<PAGE>
The gross performance results of the Rittenhouse Blended Equity Composite re-
flect the investment performance of the composite before deduction of any in-
vestment advisory fees or other expenses. The net performance results of the
Rittenhouse Blended Equity Composite reflect the deduction of the projected an-
nual operating expenses (without waiver or reimbursement) for Class A shares of
the Fund, as summarized in the Summary of Fund Expenses section of the Prospec-
tus. The Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") is a
widely-recognized, unmanaged index of common stock prices. S&P 500 returns as-
sume reinvestment of all dividends paid by the stocks included in the index,
but do not include brokerage commissions or other fees an investor would incur
by investing in the portfolio of stocks comprising the index. The current
Lipper Growth Fund Index reflects the average returns with dividends reinvested
of the 30 largest funds in the Lipper Growth Fund Objective. Of the 936 funds
in the Lipper Growth Fund Objective as of September 30, 1997, there were 790,
298 and 179 funds, respectively, with 1-, 5- and 10-year performance records,
and 116 funds with records extending from composite inception on January 1,
1983 through September 30, 1997. The returns of the Lipper Growth Fund Index do
not include the effect of any sales charges that an investor will incur by pur-
chasing the funds in the Lipper Growth Fund Objective directly. There can be no
assurance that the Fund's future performance will be comparable to that shown
above.
THE INFORMATION SHOWN REFLECTS THE PAST PERFORMANCE ACHIEVED BY RITTENHOUSE IN
MANAGING ITS SEPARATE ACCOUNTS, AND DOES NOT REFLECT PAST PERFORMANCE OF THE
FUND, WHICH HAS NO OPERATING HISTORY. PAST PERFORMANCE IS NOT PREDICTIVE OF FU-
TURE RESULTS.
ADDITIONAL INFORMATION ON THE PURCHASE AND
REDEMPTION OF FUND SHARES
Set forth is an example of the method of computing the offering price of the
Class A shares of the Fund. The example assumes a purchase of Class A shares of
the Fund aggregating less than $50,000 subject to the schedule of sales charges
set forth in the Prospectus at a price based upon the net asset value of the
Class A shares.
<TABLE>
<S> <C>
Net Asset Value per Class A Share...................................... $20.000
Per Share Sales Charge--5.25% of public offering price (5.54% of net
asset value per share)................................................ $ 1.108
Per Share Offering Price to the Public................................. $21.108
</TABLE>
You may purchase Class B Shares without any up-front sales charge at a price
equal to their net asset value, but subject to a contingent deferred sales
charge ("CDSC") if you redeem shares within six years of purchase. Class B
Shares are also subject to an annual distribution fee designed to compensate
Authorized Dealers over time for the sale of Fund shares. Class B Shares auto-
matically convert to Class A Shares eight years after purchase.
You may purchase Class C Shares without any up-front sales charge at a price
equal to their net asset value, but subject to an annual distribution fee de-
signed to compensate Authorized Dealers over time for the sale of Fund shares.
Class C Shares are subject to a contingent deferred sales charge for redemption
within 12 months of purchase.
B-25
<PAGE>
The CDSC may be waived or reduced under the following circumstances: (i) in
the event of total disability (as evidenced by a determination by the federal
Social Security Administration) of the shareholder (including a registered
joint owner) occurring after the purchase of the shares being redeemed; (ii)
in the event of the death of the shareholder (including a registered joint
owner); (iii) for redemptions made pursuant to a systematic withdrawal plan,
up to 12% annually of the original investment amount; (iv) involuntary redemp-
tions caused by operation of law; (v) redemptions in connection with a payment
of account or plan fees; (vi) redemptions in connection with the exercise of a
reinstatement privilege whereby the proceeds of a redemption of the Fund's
shares subject to a sales charge are reinvested in shares of certain funds
within a specified number of days; and (vii) redemptions in connection with
the exercise of the Fund's right to redeem all shares in an account that does
not maintain a certain minimum balance or that the board has determined may
have material adverse consequences to the shareholders of the Fund.
In addition, the CDSC will be waived in connection with the following redemp-
tions of shares held by an employer-sponsored qualified defined contribution
retirement plan: (i) partial or complete redemptions in connection with a dis-
tribution without penalty under Section 72(t) of the Internal Revenue Code
("Code") from a retirement plan: (a) upon attaining age 59 1/2, (b) as part of
a series of substantially equal periodic payments, or (c) upon separation from
service and attaining age 55; (ii) partial or complete redemptions in connec-
tion with a qualifying loan or hardship withdrawal; (iii) complete redemptions
in connection with termination of employment, plan termination or transfer to
another employer's plan or IRA; and (iv) redemptions resulting from the return
of an excess contribution. The CDSC will also be waived in connection with the
following redemptions of shares held in an IRA account: (i) for redemptions
made pursuant to an IRA systematic withdrawal based on the shareholder's life
expectancy including, but not limited to, substantially equal periodic pay-
ments described in Code Section 72(t)(A)(iv) prior to age 59; and (ii) for re-
demptions to satisfy required minimum distributions after age 70 from an IRA
account (with the maximum amount subject to this waiver being based only upon
the shareholder's Nuveen IRA accounts).
Each class of shares of the Fund represents an interest in the same portfolio
of investments. Each class of shares is identical in all respects except that
each class bears its own class expenses, including distribution expenses, and
each class has exclusive voting rights with respect to any distribution or
service plan applicable to its shares. In addition, the Class B Shares are
subject to a conversion feature, as described below. As a result of the dif-
ferences in the expenses borne by each class of shares, net income per share,
dividends per share and net asset value per share will vary among the Fund's
classes of shares.
The expenses to be borne by specific classes of shares may include (i) trans-
fer agency fees attributable to a specific class of shares, (ii) printing and
postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxy statements to current shareholders
of a specific class of shares, (iii) Securities and Exchange Commission
("SEC") and state securities registration fees incurred by a specific class of
shares, (iv) the expense of administrative personnel and services required to
support the shareholders of a specific class of shares, (vi) litigation or
other legal expenses relating to a specific class of shares, (vi) directors'
fees or expenses incurred as a result of issues relating to a specific class
of shares, (vii) accounting expenses relating to a specific class of shares
and (viii) any additional incremental expenses subsequently identified and de-
termined to be properly allocated to one or more classes of shares.
B-26
<PAGE>
The Fund has special purchase programs under which certain persons may pur-
chase Class A Shares at reduced sales charges. One such program is available
to members of a "qualified group." A CDSC may apply to redemption of Class A
shares purchased under these programs, although the CDSC may be waived in the
circumstances described above.
An individual who is a member of a "qualified group" may purchase Class A
Shares of the Fund (or any other Nuveen Fund with respect to which a sales
charge is imposed), at the reduced sales charge applicable to the group taken
as a whole. A "qualified group" is one which (i) has been in existence for
more than six months; (ii) has a purpose other than investment; (iii) has five
or more participating members; (iv) has agreed to include sales literature and
other materials related to the Fund in publications and mailings to members;
(v) has agreed to have its group administrator submit a single bulk order and
make payment with a single remittance for all investments in the Fund during
each investment period by all participants who choose to invest in the Fund;
and (vi) has agreed to provide the Fund's transfer agent with appropriate
backup data for each participant of the group in a format fully compatible
with the transfer agent's processing system.
The "amount" of a share purchase by a participant in a group purchase program
for purposes of determining the applicable sales charge is (i) the aggregate
value of all shares of the Fund (and all other Nuveen Funds with respect to
which a sales charge is imposed) currently held by participants of the group,
plus (ii) the amount of shares currently being purchased.
Special Sales Charge Waivers. Class A Shares of the Fund may be purchased at
net asset value without a sales charge, and Class R Shares may be purchased,
by the following categories of investors:
. officers, trustees and past trustees of the Trust or any Nuveen-sponsored
registered investment company;
. bona fide, full-time and retired employees of Nuveen or Rittenhouse, any
parent company of Nuveen, and subsidiaries thereof, or their immediate fam-
ily members (as defined below);
. any person who, for at least 90 days, has been an officer, director or bona
fide employee of any Authorized Dealer, or their immediate family members;
. officers and directors of bank holding companies that make Fund shares
available directly or through subsidiaries or bank affiliates;
. bank or broker-affiliated trust departments investing funds over which they
exercise exclusive discretionary investment authority and that are held in
a fiduciary, agency, advisory, custodial or similar capacity;
. investors purchasing through a mutual fund purchase program sponsored by a
broker-dealer that offers a selected group of mutual funds either without a
transaction fee or with an asset-based fee or a fixed fee that does not
vary with the amount of the purchase. In order to qualify, such purchase
program must offer a full range of mutual fund related services and share-
holder account servicing capabilities, including establishment and mainte-
nance of shareholder accounts, addressing investor inquiries regarding ac-
count activity and investment performances, processing of trading and divi-
dend activity and generation of monthly account statements and year-end tax
reporting; and
B-27
<PAGE>
. registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees to their custom-
ers for financial planning, investment advisory or asset management servic-
es, or provide such services in connection with the establishment of an in-
vestment account for which a comprehensive "wrap fee" charge is imposed.
Any Class A Shares purchased pursuant to a special sales charge waiver must be
acquired for investment purposes and on the condition that they will not be
transferred or resold except through redemption by the Funds. You or your fi-
nancial adviser must notify Nuveen or the Fund's transfer agent whenever you
make a purchase of Class A Shares of any Fund that you wish to be covered under
these special sales charge waivers.
In determining the amount of your purchases of Class A Shares of any Fund that
may qualify for a reduced sales charge, the following purchases may be com-
bined: (1) all purchases by a trustee or other fiduciary for a single trust,
estate or fiduciary account; (2) all purchases by individuals and their immedi-
ate family members (i.e., their spouses, parents, children, grandparents,
grandchildren, parents-in-law, sons- and daughters-in-law, siblings, a sib-
ling's spouse, and a spouse's siblings); or (3) all purchases made through a
group purchase program as described above.
The reduced sales charge programs may be modified or discontinued by the Fund
at any time upon prior written notice to shareholders of the Fund.
For more information about the purchase of Class A Shares or reduced sales
charge programs, or to obtain the required application forms, call Nuveen toll-
free at (800) 621-7227.
Class R Share Purchase Eligibility. Class R Shares are available for purchases
of $1 million or more and for purchases using dividends and capital gains dis-
tributions on Class R Shares. Class R Shares also are available for the catego-
ries of investors described above under "Special Sales Charge Waivers." In ad-
dition, purchasers of Nuveen unit investment trusts may reinvest their distri-
butions from such unit investment trusts, if, before September 6, 1994, such
purchasers had elected to reinvest distributions in Nuveen Fund shares (before
June 13, 1995 for Nuveen Municipal Bond Fund shares). Such purchasers of Nuveen
unit investment trusts who elected to reinvest distributions also may exchange
their Class R Shares of any Nuveen Fund into Class R Shares of any other Nuveen
Fund.
To help advisers and investors better understand and most efficiently use the
Fund to reach their investment goals, the Fund may advertise and create spe-
cific investment programs and systems. For example, this may include informa-
tion on how to use the Fund to accumulate assets for future education needs or
periodic payments such as insurance premiums. The Fund may produce software,
multi-media, electronic information sites or additional sales literature to
promote the advantages of using the Fund to meet these and other specific in-
vestor needs.
Exchanges of shares of the Fund for shares of a Nuveen money market fund may be
made on days when both funds calculate a net asset value and make shares avail-
able for public purchase. Shares of the Nuveen money market funds may be pur-
chased on days on which the Federal Reserve Bank of Boston is normally open for
business. In addition to the holidays observed by the Fund, the Nuveen money
market funds observe and will not make fund shares available for purchase on
the following holidays: Columbus Day and Veterans Day.
B-28
<PAGE>
For more information on the procedure for purchasing shares of the Fund and on
the special purchase programs available thereunder, see "How to Buy Fund
Shares" in the Prospectus.
Nuveen serves as the principal underwriter of the shares of the Fund pursuant
to a "best efforts" arrangement as provided by a distribution agreement with
the Trust ("Distribution Agreement"). Pursuant to the Distribution Agreement,
the Trust appointed Nuveen to be its agent for the distribution of the Fund's
shares on a continuous offering basis. Nuveen sells shares to or through bro-
kers, dealers, banks or other qualified financial intermediaries (collectively
referred to as "Dealers"), or others, in a manner consistent with the then ef-
fective registration statement of the Trust. Pursuant to the Distribution
Agreement, Nuveen, at its own expense, finances certain activities incident to
the sale and distribution of the Fund's shares, including printing and dis-
tributing of prospectuses and statements of additional information to other
than existing shareholders, the printing and distributing of sales literature,
advertising and payment of compensation and giving of concessions to dealers.
Nuveen receives for its services the excess, if any, of the sales price of the
Fund's shares less the net asset value of those shares, and reallows a major-
ity or all of such amounts to the Dealers who sold the shares; Nuveen may act
as such a Dealer. Nuveen also receives compensation pursuant to a distribution
plan adopted by the Trust pursuant to Rule 12b-1 and described herein under
"Distribution and Service Plans." Nuveen receives any CDSCs imposed on redemp-
tions of Shares, but any amounts as to which a reinstatement privilege is not
exercised are set off against and reduce amounts otherwise payable to Nuveen
pursuant to the distribution plan.
DISTRIBUTION AND SERVICE PLANS
The Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the In-
vestment Company Act of 1940, which provides that Class B Shares and Class C
Shares are subject to an annual distribution fee, and that Class A Shares,
Class B Shares and Class C Shares are all subject to an annual service fee.
Class R Shares are not subject to either distribution or service fees.
The distribution fee applicable to Class B Shares and Class C Shares under the
Fund's Plan will be payable to reimburse Nuveen for services and expenses in-
curred in connection with the distribution of such Shares. These expenses in-
clude payments to Authorized Dealers, including Nuveen, who are brokers of
record with respect to the Shares, as well as, without limitation, expenses of
printing and distributing prospectuses to persons other than shareholders of
the Fund, expenses of preparing, printing and distributing advertising and
sales literature and reports to shareholders used in connection with the sale
of such Shares, certain other expenses associated with the distribution of
such Shares, and any distribution-related expenses that may be authorized from
time to time by the Board of Trustees.
The service fee applicable to Class A Shares, Class B Shares and Class C
Shares under the Plan is payable to Authorized Dealers in connection with the
provision of ongoing account services to shareholders. These services may in-
clude establishing and maintaining shareholder accounts, answering shareholder
inquiries and providing other personal services to shareholders.
The Fund may spend up to .25 of 1% per year of the average daily net assets of
Class A Shares as a service fee under the Plan as applicable to Class A
Shares. The Fund may spend up to .75 of 1% per
B-29
<PAGE>
year of the average daily net assets of each of the Class B Shares and Class C
Shares as a distribution fee and up to .25 of 1% per year of the average daily
net assets of each of the Class B Shares and Class C Shares as a service fee
under the Plan as applicable to such classes.
Under the Plan, the Fund will report quarterly to the Board of Trustees for its
review all amounts expended per class of shares under the Plan. The Plan may be
terminated at any time with respect to any class of shares, without the payment
of any penalty, by a vote of a majority of the Trustees who are not "interested
persons" and who have no direct or indirect financial interest in the Plan or
by vote of a majority of the outstanding voting securities of such class. The
Plan may be renewed from year to year if approved by a vote of the Board of
Trustees and a vote of the non-interested Trustees who have no direct or indi-
rect financial interest in the Plan cast in person at a meeting called for the
purpose of voting on the Plan. The Plan may be continued only if the trustees
who vote to approve such continuance conclude, in the exercise of reasonable
business judgment and in light of their fiduciary duties under applicable law,
that there is a reasonable likelihood that the Plan will benefit the Fund and
its shareholders. The Plan may not be amended to increase materially the cost
which a class of shares may bear under the Plan without the approval of the
shareholders of the affected class, and any other material amendments of the
Plan must be approved by the non-interested trustees by a vote cast in person
at a meeting called for the purpose of considering such amendments. During the
continuance of the Plan, the selection and nomination of the non-interested
trustees of the Trust will be committed to the discretion of the non-interested
trustees then in office.
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
Arthur Andersen LLP, independent public accountants, 33 West Monroe Street,
Chicago, Illinois 60603, have been selected as auditors for the Trust. In addi-
tion to audit services, Arthur Andersen will provide consultation and assis-
tance on accounting, internal control, tax and related matters.
The custodian of the assets of the Fund is The Chase Manhattan Bank, 4 New York
Plaza, New York, New York 10004. The custodian performs custodial, fund ac-
counting and portfolio accounting services.
B-30
<PAGE>
STATEMENT OF NET ASSETS
NUVEEN INVESTMENT TRUST II
STATEMENT OF NET ASSETS
NOVEMBER 12, 1997
<TABLE>
<CAPTION>
NUVEEN
RITTENHOUSE
GROWTH FUND
- -------------------------------------------------------------------------------
<S> <C>
Assets:
Cash............................................................. $100,000
Deferred organization costs (note 2)............................. 176,000
--------
Total assets................................................... 276,000
--------
Liabilities:
Organization costs accrued....................................... 176,000
--------
Net assets......................................................... $100,000
========
Shares outstanding (note 1):
Class A Shares................................................... 1,250
Class B Shares................................................... 1,250
Class C Shares................................................... 1,250
Class R Shares................................................... 1,250
Net asset value and redemption price per share:
Class A, B, C and R Shares....................................... $ 20.00
========
Offering price per share:
Class B, C and R Shares at net asset value....................... $ 20.00
========
Class A Shares at net asset value plus maximum sales charge of
5.25% of offering price......................................... $ 21.11
========
</TABLE>
(1) THE TRUST:
The Trust was organized as a Massachusetts business trust on June 27, 1997, and
has been inactive since that date except for matters relating to its organiza-
tion, its registration as an open-end series investment company and the regis-
tration of shares of the series designated Nuveen Rittenhouse Growth Fund (the
"Fund") under the Investment Company Act of 1940, as amended, and the Securi-
ties Act of 1933, as amended, and the sale of the outstanding shares of the
Fund to Nuveen Institutional Advisory Corp., the Trust's investment adviser
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company. Addi-
tional series may be added in the future. The Fund is permitted to issue shares
at a price equal to net asset value for its authorized Class B, Class C, and
Class R Shares and at a price equal to net asset value plus varying sales
charges for its authorized Class A Shares.
(2) DEFERRED ORGANIZATION COSTS:
The Trust expects to incur approximately $176,000 in organization costs. These
costs will be amortized by the Fund over a 60-month period beginning with the
commencement of Trust operations.
The Adviser, the Trust's initial shareholder, has agreed that if any of the
initial shares are redeemed during the first 60 months of the Trust's opera-
tions by any holder thereof, the proceeds of redemption will be reduced by the
pro rata share of the unamortized organization expenses as of the date of re-
demption. The pro rata share by which the redemption proceeds shall be reduced
shall be derived by dividing the number of original shares redeemed by the to-
tal number of original shares outstanding at the time of redemption.
(3) RELATED PARTIES:
The Adviser will act as investment adviser for and manage the investment and
reinvestment of the assets of the Fund and will administer its business af-
fairs. For these services the Fund has agreed to pay an annual management fee
as described in the Fund's Prospectus. The Adviser has entered into a Sub-Advi-
sory Agreement with Rittenhouse Financial Services, Inc. ("Rittenhouse"), an-
other wholly owned subsidiary of The John Nuveen Company, under which Ritten-
house manages the Fund's investment portfolio.
B-31
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder and Board of Trustees of
Nuveen Investment Trust II
We have audited the accompanying statement of net assets of Nuveen Investment
Trust II (a Massachusetts business trust) comprising the Nuveen Rittenhouse
Growth Fund as of November 12, 1997. The statement of net assets is the respon-
sibility of Nuveen Investment Trust II's management. Our responsibility is to
express an opinion on the statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of net assets is free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the statement of net assets. Our proce-
dures included confirmation of cash held by the custodian as of November 12,
1997. An audit also includes assessing the accounting principles used and sig-
nificant estimates made by management, as well as evaluating the overall finan-
cial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the statement of net assets referred to above presents fairly,
in all material respects, the net assets of the Fund constituting the Nuveen
Investment Trust II as of November 12, 1997, in conformity with generally ac-
cepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 12, 1997
B-32
<PAGE>
APPENDIX A--RATINGS OF INVESTMENTS
STANDARD & POOR'S RATINGS GROUP--A brief description of the applicable Standard
& Poor's Ratings Group ("S&P") rating symbols and their meanings (as published
by S&P) follows:
LONG TERM DEBT
An S&P corporate or municipal debt rating is a current assessment of the cred-
itworthiness of an obligor with respect to a specific obligation. This assess-
ment may take into consideration obligors such as guarantors, insurers, or
lessees.
The debt rating is not a recommendation to purchase, sell, or hold a security,
inasmuch as it does not comment as to market price or suitability for a partic-
ular investor.
The ratings are based on current information furnished by the issuer or ob-
tained by S&P from other sources it considers reliable. S&P does not perform an
audit in connection with any rating and may, on occasion, rely on unaudited fi-
nancial information. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information, or based on other
circumstances.
The ratings are based, in varying degrees, on the following considerations:
1. Likelihood of default--capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with
the terms of the obligation;
2. Nature of and provisions of the obligation;
3. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws
of bankruptcy and other laws affecting creditors' rights.
INVESTMENT GRADE
AAA Debt rated "AAA' has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA Debt rated "AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small de-
gree.
A Debt rated "A' has a strong capacity to pay interest and repay princi-
pal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.
BBB
Debt rated "BBB' is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate pro-
tection parameters, adverse economic conditions or changing circum-
stances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated
categories.
<PAGE>
SPECULATIVE GRADE RATING
Debt rated "BB', "B', "CCC', "CC' and "C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. "BB' indicates the least degree of speculation and "C' the highest.
While such debt will likely have some quality and protective characteristics
these are outweighed by major uncertainties or major exposures to adverse con-
ditions.
BB Debt rated "BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which
could lead to inadequate capacity to meet timely interest and princi-
pal payments. The "BB' rating category is also used for debt subordi-
nated to senior debt that is assigned an actual or implied "BBB-' rat-
ing.
B Debt rated "B' has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal.
The "B' rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "BB' or "BB-' rating.
CCC Debt rated "CCC' has a currently identifiable vulnerability to de-
fault, and is dependent upon favorable business, financial, and eco-
nomic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal.
The "CCC' rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "B' or "B-' rating.
CC The rating "CC' typically is applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC' debt rating.
C The rating "C' typically is applied to debt subordinated to senior
debt which is assigned an actual or implied "CCC-' debt rating. The
"C' rating may be used to cover a situation where a bankruptcy peti-
tion has been filed, but debt service payments are continued.
CI The rating "CI' is reserved for income bonds on which no interest is
being paid.
D Debt rated "D' is in payment default. The "D' rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
"D' rating also will be used upon the filing of a bankruptcy petition
if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA' to "CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
PROVISIONAL RATINGS: The letter "p" indicates that the rating is provisional. A
provisional rating assumes the successful completion of the project financed by
the debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful and timely completion of the
project. This rating, however, while addressing credit quality subsequent to
comple-
A-2
<PAGE>
tion of the project, makes no comment on the likelihood of, or the risk of de-
fault upon failure of, such completion. The investor should exercise judgment
with respect to such likelihood and risk.
L The letter "L' indicates that the rating pertains to the principal
amount of those bonds to the extent that the underlying deposit col-
lateral is federally insured by the Federal Savings & Loan Insurance
Corp. or the Federal Deposit Insurance Corp.* and interest is ade-
quately collateralized. In the case of certificates of deposit the
letter "L' indicates that the deposit, combined with other deposits
being held in the same right and capacity will be honored for princi-
pal and accrued pre-default interest up to the federal insurance lim-
its within 30 days after closing of the insured institution or, in the
event that the deposit is assumed by a successor insured institution,
upon maturity.
NR Indicates no rating has been requested, that there is insufficient in-
formation on which to base a rating, or that S&P does not rate a par-
ticular type of obligation as a matter of policy.
*Continuance of the rating is contingent upon S&P's receipt of an executed copy
of the escrow agreement or closing documentation confirming investments and
cash flow.
COMMERCIAL PAPER
An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded into several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. These categories are as follows:
A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is satis-
factory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the
higher designations.
B Issues rated "B" are regarded as having only speculative capacity for
timely payment.
C This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.
D Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date
due, even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period.
A-3
<PAGE>
A commercial rating is not a recommendation to purchase, sell, or hold a secu-
rity inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P does not perform an audit in connection with any rating and may, on occa-
sion, rely on unaudited financial information. The ratings may be changed, sus-
pended, or withdrawn as a result of changes in or unavailability of such infor-
mation or based on other circumstances.
VALUE LINE--FINANCIAL STRENGTH RATING (A++, A+, A, B++, B+, B, C++, C+, C)--The
financial strength of each of the more than 1,600 companies in the VS II data
base is rated relative to all the others. The ratings range from A++ to C in
nine steps. (For screening purposes, think of an A rating as "greater than" a
B). Companies that have the best relative financial strength are given an A++
rating, indicating an ability to weather hard times better than the vast major-
ity of other companies. Those who don't quite merit the top rating are given an
A+ grade, and so on. A rating as low as C++ is considered satisfactory. A rat-
ing of C+ is well below average, and C is reserved for companies with very se-
rious financial problems. The ratings are based upon a computer analysis of a
number of key variables that determine (a) financial leverage, (b) business
risk, and (c) company size, plus the judgment of Value Line's analysts and se-
nior editors regarding factors that cannot be quantified across-the-board for
all companies. The primary variables that are indexed and studied include eq-
uity coverage of debt, equity coverage of intangibles, "quick ratio", account-
ing methods, variability of return, fixed charge coverage, stock price stabili-
ty, and company size.
MOODY'S INVESTORS SERVICE, INC.--A brief description of the applicable Moody's
Investors Service, Inc. ("Moody's") rating symbols and their meanings (as pub-
lished by Moody's) follows:
LONG TERM DEBT
Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally re-
ferred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks ap-
pear somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
A-4
<PAGE>
Baa Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristi-
cally unrealiable over any great length of time. Such bonds lack out-
standing investment characteristics and in fact have speculative char-
acteristics as well.
Ba Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protec-
tion of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desir-
able investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of
time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and is-
sues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Con( . . . )
Bonds for which the security depends upon the completion of some act
or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b)
earnings of projects unseasoned in operation experience, (c) rentals
which begin when facilities are completed, or (d) payments to which
some other limiting condition attaches. Parenthetical rating denotes
probable credit stature upon completion of construction or elimination
of basis of condition.
NOTE:Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believes
possess the strongest investment attributes are designated by the sym-
bols Aa1, A1, Baa1, Ba1, and B1.
COMMERCIAL PAPER
Issuers rated PRIME-1 (or related supporting institutions) have a superior ca-
pacity for repayment of senior short-term promissory obligations. Prime-1 re-
payment capacity will often be evidenced by many of the following characteris-
tics:
--Leading market positions in well-established industries.
--High rates of return on funds employed.
--Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
--Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
--Well-established access to a range of financial markets and assured
sources of alternate liquidity.
<PAGE>
Issuers rated PRIME-2 (or related supporting institutions) have a strong capac-
ity for repayment of senior short-term promissory obligations. This will nor-
mally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
Issuers rated PRIME-3 (or related supporting institutions) have an acceptable
capacity for repayment of senior short-term promissory obligations. The effect
of industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial lever-
age. Adequate alternate liquidity is maintained.
Issuers rated NOT PRIME do not fall within any of the Prime rating categories.
DUFF & PHELPS, INC.--A brief description of the applicable Duff & Phelps, Inc.
("D&P") ratings symbols and their meanings (as published by D&P) follows:
LONG TERM DEBT
These ratings represent a summary opinion of the issuer's long-term fundamental
quality. Rating determination is based on qualitative and quantitative factors
which may vary according to the basic economic and financial characteristics of
each industry and each issuer. Important considerations are vulnerability to
economic cycles as well as risks related to such factors as competition, gov-
ernment action, regulation, technological obsolescence, demand shifts, cost
structure, and management depth and expertise. The projected viability of the
obligor at the trough of the cycle is a critical determination.
Each rating also takes into account the legal form of the security, (e.g.,
first mortgage bonds, subordinated debt, preferred stock, etc.). The extent of
rating dispersion among the various classes of securities is determined by sev-
eral factors including relative weightings of the different security classes in
the capital structure, the overall credit strength of the issuer, and the na-
ture of covenant protection.
The Credit Rating Committee formally reviews all ratings once per quarter (more
frequently, if nec- essary). Ratings of "BBB-' and higher fall within the defi-
nition of investment grade securities, as defined by bank and insurance super-
visory authorities. Structured finance issues, including real estate, asset-
backed and mortgage-backed financings, use this same rating scale. Duff &
Phelps Credit Rating claims paying ability ratings of insurance companies use
the same scale with minor modification in the definitions. Thus, an investor
can compare the credit quality of investment alternatives across industries and
structural types. A "Cash Flow Rating" (as noted for specific ratings) ad-
dresses the likelihood that aggregate principal and interest will equal or ex-
ceed the rated amount under appropriate stress conditions.
A-6
<PAGE>
RATING SCALEDEFINITION
- -------------------------------------------------------------------------------
AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
- -------------------------------------------------------------------------------
AA+ High credit quality. Protection factors are strong. Risk is mod-
AA est, but may vary slightly from time to time because of economic
AA- conditions.
- -------------------------------------------------------------------------------
A+ Protection factors are average but adequate. However, risk factors
A are more variable and greater in periods of economic stress.
A-
- -------------------------------------------------------------------------------
BBB+ Below average protection factors but still considered sufficient
BBB for prudent investment. Considerable variability in risk during
BBB- economic cycles.
- -------------------------------------------------------------------------------
BB+ Below investment grade but deemed likely to meet obligations when
BB due. Present or prospective financial protection factors fluctuate
BB- according to industry conditions or company fortunes. Overall
quality may move up or down frequently within this category.
- -------------------------------------------------------------------------------
B+ Below investment grade and possessing risk that obligations will
B not be met when due. Financial protection factors will fluctuate
B- widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the
rating within this category or into a higher or lower rating
grade.
- -------------------------------------------------------------------------------
CCC Well below investment grade securities. Considerable uncertainty
exists as to timely payment of principal, interest or preferred
dividends. Protection factors are narrow and risk can be substan-
tial with unfavorable economic/industry conditions, and/or with
unfavorable company developments.
- -------------------------------------------------------------------------------
DD Defaulted debt obligations. Issuer failed to meet scheduled prin-
cipal and/or interest payments.
DP Preferred stock with dividend arrearages.
- -------------------------------------------------------------------------------
SHORT-TERM DEBT RATINGS
Duff & Phelps' short-term ratings are consistent with the rating criteria used
by money market participants. The ratings apply to all obligations with matu-
rities of under one year, including commercial paper, the uninsured portion of
certificates of deposit, unsecured bank loans, master notes, bankers accept-
ances, irrevocable letters of credit, and current maturities of long-term
debt. Asset-backed commercial paper is also rated according to this scale.
A-7
<PAGE>
Emphasis is placed on liquidity which is defined as not only cash from opera-
tions, but also access to alternative sources of funds including trade credit,
bank lines, and the capital markets. An important consideration is the level of
an obligor's reliance on short-term funds on an ongoing basis.
The distinguishing feature of Duff & Phelps Credit Ratings' short-term ratings
is the refinement of the traditional "1' category. The majority of short-term
debt issuers carry the highest rating, yet quality differences exist within
that tier. As a consequence, Duff & Phelps Credit Rating has incorporated gra-
dations of "1+' (one plus) and "1-' (one minus) to assist investors in recog-
nizing those differences.
These ratings are recognized by the SEC for broker-dealer requirements, specif-
ically capital computation guidelines. These ratings meet Department of Labor
ERISA guidelines governing pension and profit sharing investments. State regu-
lators also recognize the ratings of Duff & Phelps Credit Rating for insurance
company investment portfolios.
RATING SCALE:
DEFINITION
HIGH GRADE
D-1+ Highest certainty of timely payment. Short-term liquidity, includ-
ing internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-
free U.S. Treasury short-term obligations.
D-1 Very high certainty of timely payment. Liquidity factors are ex-
cellent and supported by good fundamental protection factors. Risk
factors are minor.
D-1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.
GOOD GRADE
D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good.
Risk factors are small.
SATISFACTORY GRADE
D-3 Satisfactory liquidity and other protection factors qualify issue
as to investment grade. Risk factors are larger and subject to
more variation. Nevertheless, timely payment is expected.
NON-INVESTMENT GRADE
D-4 Speculative investment characteristics. Liquidity is not suffi-
cient to insured against disruption in debt service. Operating
factors and market access may be subject to a high degree of vari-
ation.
DEFAULT
D-5
Issuer failed to meet scheduled principal and/or interest pay-
ments.
FITCH INVESTORS SERVICE, INC.--A brief description of the applicable Fitch In-
vestors Service, Inc. ("Fitch") ratings symbols and meanings (as published by
Fitch) follows:
A-8
<PAGE>
LONG TERM DEBT
Fitch investment grade bond ratings provide a guide to investors in determining
the credit risk associated with a particular security. The ratings represent
Fitch's assessment of the issuer's ability to meet the obligations of a spe-
cific debt issue or class of debt in a timely manner.
The rating takes into consideration special features of the issue, its rela-
tionship to other obligations of the issuer, the current and prospective finan-
cial condition and operating performance of the issuer and any guarantor, as
well as the economic and political environment that might affect the issuer's
future financial strength and credit quality.
Fitch ratings do not reflect any credit enhancement that may be provided by in-
surance policies or financial guaranties unless otherwise indicated.
Bonds that have the same rating are of similar but not necessarily identical
credit quality since the rating categories do not fully reflect small differ-
ences in the degrees of credit risk.
Fitch ratings are not recommendations to buy, sell, or hold any security. Rat-
ings do not comment on the adequacy of market price, the suitability of any se-
curity for a particular investor, or the tax-exempt nature or taxability of
payments made in respect of any security.
Fitch ratings are based on information obtained from issuers, other obligors,
underwriters, their experts, and other sources Fitch believes to be reliable.
Fitch does not audit or verify the truth or accuracy of such information. Rat-
ings may be changed, suspended, or withdrawn as a result of changes in, or the
unavailability of, information or for other reasons.
AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay inter-
est and repay principal, which is unlikely to be affected by reasona-
bly foreseeable events.
AA Bonds considered to be investment grade and of very high credit quali-
ty. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA'. Because
bonds rated in the "AAA' and "AA' categories are not significantly
vulnerable to foreseeable future developments, short-term debt of the
issuers is generally rated "F-1+'.
A Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is consid-
ered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on
these bonds and, therefore, impair timely payment. The likelihood that
the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
A-9
<PAGE>
Fitch speculative grade bond ratings provide a guide to investors in determin-
ing the credit risk associated with a particular security. The ratings ("BB'
to "C') represent Fitch's assessment of the likelihood of timely payment of
principal and interest in accordance with the terms of obligation for bond is-
sues not in default. For defaulted bonds, the rating ("DDD' to "D') is an as-
sessment of the ultimate recovery value through reorganization or liquidation.
The rating takes into consideration special features of the issue, its rela-
tionship to other obligations of the issuer, the current and prospective fi-
nancial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the is-
suer's future financial strength.
Bonds that have the same rating are of similar but not necessarily identical
credit quality since the rating categories cannot fully reflect the differ-
ences in the degrees of credit risk.
BB Bonds are considered speculative. The obligor's ability to pay inter-
est and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identi-
fied which could assist the obligor in satisfying its debt service re-
quirements.
B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of con-
tinued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and eco-
nomic activity throughout the life of the issue.
CCC Bonds have certain identifiable characteristics which, if not reme-
died, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C Bonds are in imminent default in payment of interest or principal.
DDD, Bonds are in default on interest and/or principal payments. Such bonds
DD are extremely speculative and should be valued on the basis of their
AND Dultimate recovery value in liquidation or reorganization of the obli-
gor. "DDD' represents the highest potential for recovery of these
bonds, and "D' represents the lowest potential for recovery.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on de-
mand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
A-10
<PAGE>
F-1+ EXCEPTIONALLY STRONG CREDIT QUALITY Issues assigned this rating are
regarded as having the strongest degree of assurance for timely pay-
ment.
F-1 VERY STRONG CREDIT QUALITY Issues assigned this rating reflect an as-
surance of timely payment only slightly less in degree than issues
rated "F-1+'.
F-2 GOOD CREDIT QUALITY Issues assigned this rating have a satisfactory
degree of assurance for timely payment but the margin of safety is not
as great as for issues assigned "F-1+' and "F-1' ratings.
F-3 FAIR CREDIT QUALITY Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is ade-
quate; however, near-term adverse changes could cause these securities
to be rated below investment grade.
F-S WEAK CREDIT QUALITY Issues assigned this rating have characteristics
suggesting a minimal degree of assurance for timely payment and are
vulnerable to near-term adverse changes in financial and economic con-
ditions.
D DEFAULT Issues assigned this rating are in actual or imminent payment
default.
LOC The symbol LOC indicates that the rating is based on a letter of
credit issued by a commercial bank.
A-11
<PAGE>
PART C--OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements:
Included in the Prospectus:
Not Applicable
Included in the Statement of Additional Information:
(b) Exhibits
<TABLE>
<C> <S> <C>
1(a). Declaration of Trust of Registrant.*
1(b). Certificate for the Establishment and Designation of
Series dated June 27, 1997.*
1(c). Certificate for the Establishment and Designation of
Classes dated June 27, 1997.*
1(d). Amended and Restated Establishment and Designation of
Series dated August 13, 1997.*
2. By-Laws of Registrant.*
3. Not applicable.*
4. Specimen certificate of Shares of Nuveen Rittenhouse
Growth Fund.
5(a). Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.
5(b). Sub-Advisory Agreement between Nuveen Institutional
Advisory Corp. and Rittenhouse.
6. Distribution Agreement between Registrant and John Nuveen
& Co. Incorporated.
7. Not applicable.
8. Form of Custodian Agreement between Registrant and The
Chase Manhattan Bank.
9. Not applicable.
10(a). Opinion and consent of Bingham Dana LLP, dated November
12, 1997.
10(b). Opinion and consent of Bell, Boyd & Lloyd, dated November
13, 1997.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Subscription Agreement with Nuveen Institutional Advisory
Corp.
14. Not applicable.
</TABLE>
C-1
<PAGE>
<TABLE>
<C> <S> <C>
15. Plan of Distribution and Service Pursuant to Rule 12b-1
for the Class A Shares, Class B Shares and Class C Shares
of Nuveen Rittenhouse Growth Fund.
16. Not applicable.
17. Financial Data Schedule.
18. Multi-Class Plan.
99(a). Original Powers of Attorney for Messrs. Schwertfeger,
Dean, Bacon, Leafstrand and Kissick and Ms. Wellington,
Trustees, authorizing, among others, Gifford R. Zimmerman
and Larry W. Martin to execute the Registration
Statement.*
</TABLE>
- --------
* Previously filed.
ITEM 25: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26: NUMBER OF HOLDERS OF SECURITIES
At November 12, 1997:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF SERIES RECORD HOLDERS
--------------- --------------
<S> <C>
Nuveen Rittenhouse Growth Fund............................. 1
</TABLE>
ITEM 27: INDEMNIFICATION
Section 4 of Article XII of Registrant's Declaration of Trust provides as fol-
lows:
Subject to the exceptions and limitations contained in this Section 4, every
person who is, or has been, a Trustee, officer, employee or agent of the Trust,
including persons who serve at the request of the Trust as directors, trustees,
officers, employees or agents of another organization in which the Trust has an
interest as a shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person"), shall be indemnified by the Trust to the fullest extent per-
mitted by law against liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in which
he becomes involved as a party or otherwise by virtue of his being or having
been such a Trustee, director, officer, employee or agent and against amounts
paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Covered Person:
(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the proceeding
was brought that he engaged in willful misfeasance, bad faith, gross negli-
gence or reckless disregard of the duties involved in the conduct of his
office;
C-2
<PAGE>
(b) with respect to any matter as to which he shall have been finally adju-
dicated not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Trust; or
(c) in the event of a settlement or other disposition not involving a final
adjudication (as provided in paragraph (a) or (b)) and resulting in a pay-
ment by a Covered Person, unless there has been either a determination that
such Covered Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office by the court or other body approving the settlement or other
disposition or a reasonable determination, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that he did not
engage in such conduct:
(i) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification herein provided may be insured against by poli-
cies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Covered Person may now or hereafter be entitled, shall con-
tinue as to a person who has ceased to be such a Covered Person and shall inure
to the benefit of the heirs, executors and administrators of such a person.
Nothing contained herein shall affect any rights to indemnification to which
Trust personnel other than Covered Persons may be entitled by contract or oth-
erwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding subject to a claim for indemnification under this Section 4
shall be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such amount if it
is ultimately determined that he is not entitled to indemnification under this
Section 4, provided that either:
(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of any
such advances; or
(b) a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office act on the
matter) or independent legal counsel in a written opinion shall determine,
based upon a review of the readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient ul-
timately will be found entitled to indemnification.
As used in this Section 4, a "Disinterested Trustee" is one (x) who is not an
Interested Person of the Trust (including, as such Disinterested Trustee, any-
one who has been exempted from being an Interested Person by any rule, regula-
tion or order of the Commission), and (y) against whom none of such actions,
suits or other proceedings or another action, suit or other proceeding on the
same or similar grounds is then or has been pending.
As used in this Section 4, the words "claim," "action," "suit" or "proceeding"
shall apply to all claims, actions, suits, proceedings (civil, criminal, admin-
istrative or other, including appeals), actual or threatened; and the word "li-
ability" and "expenses" shall include without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and other lia-
bilities.
-----------------
C-3
<PAGE>
The trustees and officers of the Registrant are covered by Investment Trust Er-
rors and Omission policies in the aggregate amount of $40,000,000 (with a maxi-
mum deductible of $500,000) against liability and expenses of claims of wrong-
ful acts arising out of their position with the Registrant, except for matters
which involved willful acts, bad faith, gross negligence and willful disregard
of duty (i.e., where the insured did not act in good faith for a purpose he or
she reasonably believed to be in the best interest of Registrant or where he or
she shall have had reasonable cause to believe this conduct was unlawful).
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to the officers, trustees or controlling persons of the
Registrant pursuant to the Declaration of Trust of the Registrant or otherwise,
the Registrant has been advised that in the opinion of the Securities and Ex-
change Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indem-
nification against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by an officer or trustee or controlling person of
the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such officer, trustee or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 28: BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) Nuveen Institutional Advisory Corp. serves as investment adviser or manager
to Nuveen Investment Trust, an open-end management investment company, the Reg-
istrant and to the following closed-end management type investment companies:
Nuveen Select Tax-Free Income Portfolio; Nuveen Select Tax-Free Income Portfo-
lio 2; Nuveen Insured California Select Tax-Free Income Portfolio; Nuveen In-
sured New York Select Tax-Free Income Portfolio and Nuveen Select Tax-Free In-
come Portfolio 3. The principal business address for all of these investment
companies is 333 West Wacker Drive, Chicago, Illinois 60606. In addition,
Nuveen Institutional Advisory Corp. serves as investment adviser to separately
managed accounts.
For a description of other business, profession, vocation or employment of a
substantial nature in which any director or officer of the investment adviser
has engaged during the last two years for his account or in the capacity of di-
rector, officer, employee, partner or trustee, see the descriptions under "Man-
agement" in the Statement of Additional Information.
C-4
<PAGE>
(b) Rittenhouse acts as sub-investment adviser to the Registrant and serves as
invstment adviser to separately managed accounts. The following is a listing of
each director and officer of Rittenhouse. The principal business address for
each person is Two Radnor Corporate Center, Suite 400, Radnor, PA 19087, except
Messrs. Dean and Amboian's address is 333 W. Wacker Drive, Chicago, IL 60606:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH RITTENHOUSE WITH REGISTRANT
---- --------------------- ---------------------
<S> <C> <C>
John P. Amboian Director None
George W. Connell Chief Investment Officer None
William L. Conrad Vice President, Director None
Anthony T. Dean Director Chairman and Trustee
Richard D. Hughes President, Director None
Michael H. Lewers Vice President, Director None
Marion R. Metzbower Chief Compliance Officer None
Cynthia A. Stains Chief Financial Officer None
John P. Waterman Vice President, Director None
</TABLE>
ITEM 29: PRINCIPAL UNDERWRITERS
(a) John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter to
the following open-end management type investment companies: Nuveen Municipal
Bond Fund, Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves,
Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund, Inc.,
Nuveen Insured Tax-Free Bond Fund, Inc., Nuveen Tax-Free Money Market Fund,
Inc., Nuveen Multistate Tax-Free Trust, Nuveen Investment Trust and the Regis-
trant. Nuveen also acts as depositor and principal underwriter of the Nuveen
Tax-Free Unit Trust and the Nuveen Unit Trust, registered unit investment
trusts. Nuveen has also served or is serving as co-managing underwriter to the
following closed-end management type investment companies: Nuveen Municipal
Value Fund, Inc., Nuveen California Municipal Value Fund, Inc., Nuveen New York
Municipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc., Nuveen Premium
Income Municipal Fund, Inc., Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen California Performance Plus Municipal Fund, Inc., Nuveen New York Per-
formance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc.,
Nuveen Municipal Market Opportunity Fund, Inc., Nuveen California Municipal
Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc.,
Nuveen California Investment Quality Municipal Fund, Inc., Nuveen New York In-
vestment Quality Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund,
Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen New Jersey In-
vestment Quality Municipal Fund, Inc., Nuveen Pennsylvania Investment Quality
Municipal Fund, Nuveen Select Quality Municipal Fund, Inc., Nuveen California
Select Quality Municipal Fund, Inc., Nuveen New York Select Quality Municipal
Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Insured Munici-
pal Opportunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund,
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income
Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen Cali-
fornia Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Mu-
nicipal Fund, Inc., Nuveen Premier Municipal In-
C-5
<PAGE>
come Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen
Premium Income Municipal Fund 2, Inc., Nuveen Insured California Premium Income
Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal Fund,
Inc., Nuveen Select Maturities Municipal Fund, Nuveen Arizona Premium Income
Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal Fund,
Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium
Income Municipal Fund, Inc., Nuveen Insured Premium Income Municipal Fund,
Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured California
Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium Income Mu-
nicipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen Massachu-
setts Premium Income Municipal Fund, Nuveen Virginia Premium Income Municipal
Fund, Nuveen Washington Premium Income Municipal Fund, Nuveen Connecticut Pre-
mium Income Municipal Fund, Nuveen Georgia Premium Income Municipal Fund,
Nuveen Missouri Premium Income Municipal Fund, Nuveen North Carolina Premium
Income Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen
Insured Premium Income Municipal Fund 2, Nuveen Select Tax-Free Income Portfo-
lio, Nuveen Select Tax-Free Income Portfolio 2, Nuveen Insured California Se-
lect Tax-Free Income Portfolio, Nuveen Insured New York Select Tax-Free Income
Portfolio and Nuveen Select Tax-Free Income Portfolio 3.
(b)
<TABLE>
<S> <C> <C>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------------------------------------------------
Anthony T. Dean President, Chief Operating Chairman and Trustee
333 West Wacker Drive Officer and Director
Chicago, IL 60606
Timothy R. Schwertfeger Chairman of the Board, President and Trustee
333 West Wacker Drive Chief Executive Officer,
Chicago, IL 60606 and Director
John P. Amboian Executive Vice President None
333 West Wacker Drive
Chicago, IL 60606
Bruce P. Bedford Executive Vice President None
333 W. Wacker Drive
Chicago, IL 60606
William Adams IV Vice President None
333 West Wacker Drive
Chicago, IL 60606
Alan G. Berkshire Vice President None
333 West Wacker Drive
Chicago, IL 60606
Richard P. Davis Vice President None
One South Main Street
Dayton, OH 45402
</TABLE>
C-6
<PAGE>
<TABLE>
<S> <C> <C>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ----------------------------------------------------------------------------------
Clifton L. Fenton Vice President None
333 West Wacker Drive
Chicago, IL 60606
Kathleen M. Flanagan Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Stephen D. Foy Vice President None
333 West Wacker Drive
Chicago, IL 60606
Robert D. Freeland Vice President None
333 West Wacker Drive
Chicago, IL 60606
Michael G. Gaffney Vice President None
333 West Wacker Drive
Chicago, IL 60606
Anna R. Kucinskis Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
333 West Wacker Drive
Chicago, IL 60606
Larry W. Martin Vice President and Vice President and
333 West Wacker Drive Assistant Secretary Assistant Secretary
Chicago, IL 60606
Thomas C. Muntz Vice President None
333 West Wacker Drive
Chicago, IL 60606
O. Walter Renfftlen Vice President Vice President and
333 West Wacker Drive and Controller Controller
Chicago, IL 60606
Stuart W. Rogers Vice President None
333 West Wacker Drive
Chicago, IL 60606
Bradford W. Shaw, Jr. Vice President None
333 West Wacker Drive
Chicago, IL 60606
</TABLE>
C-7
<PAGE>
<TABLE>
<S> <C> <C>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- -----------------------------------------------------------------------------------
H. William Stabenow Vice President Vice President and
333 West Wacker Drive and Treasurer Treasurer
Chicago, IL 60606
Paul C. Williams Vice President None
333 West Wacker Drive
Chicago, IL 60606
Gifford R. Zimmerman Vice President Vice President and
333 West Wacker Drive and Assistant Secretary Assistant Secretary
Chicago, IL 60606
</TABLE>
(c) Not applicable.
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Nuveen Institutional Advisory Corp., 333 West Wacker Drive, Chicago, Illinois
60606, maintains the Declaration of Trust, By-Laws, minutes of trustees and
shareholder meetings and contracts of the Registrant and all advisory material
of the investment adviser.
The Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004, maintains
all general and subsidiary ledgers, journals, trial balances, records of all
portfolio purchases and sales, and all other required records not maintained by
Nuveen Advisory Corp., or Shareholder Services, Inc.
Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado 80217-5330, main-
tains all the required records in its capacity as transfer, dividend paying,
and shareholder service agent for the Registrant.
ITEM 31: MANAGEMENT SERVICES
Not applicable.
ITEM 32: UNDERTAKINGS
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment to its regis-
tration statement, using financial statements of Nuveen Rittenhouse Growth
Fund which need not be certified, within four to six months from the effec-
tive date of Registrant's 1933 Act registration statement.
(c) Not applicable.
C-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO REGISTRA-
TION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 12TH DAY OF
NOVEMBER, 1997.
NUVEEN INVESTMENT TRUST II
/s/ Larry W. Martin
---------------------------------------
Larry W. Martin, Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT TO
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ O. Walter Renfftlen
- -------------------------------
O. Walter Renfftlen Vice President and November 12, 1997
Controller (Principal
Financial and
Accounting Officer)
Timothy R. Schwertfeger President and Trustee )
)
Anthony T. Dean Chairman and Trustee )
(Principal Executive )
Officer) ) By: /s/ Larry W. Martin
) --------------------
James E. Bacon Trustee ) Larry W. Martin
) Attorney-in-Fact
Thomas E. Leafstrand Trustee )
) November 12, 1997
Sheila W. Wellington Trustee )
)
William L. Kissick Trustee )
</TABLE>
ORIGINAL POWERS OF ATTORNEY AUTHORIZING, AMONG OTHERS, GIFFORD R. ZIMMERMAN AND
LARRY W. MARTIN TO EXECUTE THIS REGISTRATION STATEMENT, AND AMENDMENTS THERETO,
FOR EACH OF MESSRS. SCHWERTFEGER, DEAN, BACON, LEAFSTRAND AND KISSICK AND MS.
WELLINGTON HAVE BEEN EXECUTED AND FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
C-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S> <C>
1(a). Declaration of Trust of Registrant.*
1(b). Certificate for the Establishment and Designation of Series
dated June 27, 1997.*
1(c). Certificate for the Establishment and Designation of Classes
dated June 27, 1997.*
1(d). Amended and Restated Establishment and Designation of Series
dated August 13, 1997.*
2. By-Laws of Registrant.*
3. Not applicable.
4. Specimen certificate of Shares of Nuveen Rittenhouse Growth
Fund.
5(a). Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.
5(b). Sub-Advisory Agreement between Nuveen Institutional Advisory
Corp. and Rittenhouse.
6. Distribution Agreement between Registrant and John Nuveen &
Co. Incorporated.
7. Not applicable.
8. Form of Custodian Agreement between Registrant and The Chase
Manhattan Bank.
9. Not applicable.
10(a). Opinion and consent of Bingham Dana LLP, dated November 12,
1997.
10(b). Opinion and consent of Bell, Boyd & Lloyd, dated November 13,
1997.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Subscription Agreement with Nuveen Institutional Advisory
Corp.
14. Not applicable.
15. Plan of Distribution and Service Pursuant to Rule 12b-1 for
the Class A Shares, Class B Shares and Class C Shares of
Nuveen Rittenhouse Growth Fund.
16. Not applicable.
17. Financial Data Schedule.
18. Multi-Class Plan.
99(a). Original Powers of Attorney for Messrs. Schwertfeger, Dean,
Bacon, Leafstrand and Kissick and Ms. Wellington, Trustees,
authorizing, among others, Gifford R. Zimmerman and Larry W.
Martin to execute the Registration Statement.*
</TABLE>
- --------
* Previously filed.
<PAGE>
EXHIBIT 4
Number Class [ ] Shares
Nuveen Investment Trust II
[Name of Series]
Organized Under the Laws of the Commonwealth of Massachusetts
This is to certify that See Reverse for
is the owner of Certain Definitions
CUSIP
Fully Paid and Non-Assessable Class [ ] Shares
- -------------------------------------------------------------------------------
of beneficial interest, with the par value of one-cent ($.01) each, of the [Name
of Series] series of the Nuveen Investment Trust II (herein called the "Trust")
transferable on the books of the Trust by the holder hereof in person or by duly
authorized attorney upon surrender of this certificate properly endorsed. The
shares represented by this certificate are issued and held subject to all of the
provisions of the Declaration of Trust establishing the Trust as a Massachusetts
business trust and any amendments thereto and any designation of classes, and
the By-Laws of the Trust, and any amendments thereto, copies of which are on
file with the Transfer Agent, to all of which the holder by acceptance hereof
expressly assents. This certificate is executed on behalf of the Trust by the
officers as officers and not individually and the obligations hereof are not
binding upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust. This certificate is not
valid unless countersigned by the Transfer Agent.
WITNESS THE FACsimile signatures of its duly authorized officers.
Dated:
Nuveen Investment Trust II
Assistant Secretary, President, Nuveen
Nuveen Investment Trust II Investment Trust II
<PAGE>
Nuveen Investment Trust II
[Name of Series]
Nuveen Investment Trust II (the "Trust") will furnish to any shareholder, upon
request and without charge, a full statement of the designations, preferences,
limitation as to dividends, qualifications and terms and conditions of
redemption and relative rights and preferences of the shares of each class or
series of the Trust authorized to be issued, so far as they have been
determined, and the authority of the Board of Trustees to determine the relative
rights and preferences of subsequent classes or series. Any such request should
be addressed to the Secretary of the Trust.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - ________ Custodian _______ under Uniform gifts
(Cust) (Minor)
to Minors Act _______
(State)
Additional abbreviations may also be used though not in the above list.
________________________________________________________________________________
For value received, ________ hereby sell, assign and transfer unto
__________________________________
Please insert social security or other identifying number of assignee
________________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
________________________________________________________________________________
______________________________________________________________________ Shares of
beneficial interest represented by the within certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
____________________________________________________________________ Attorney to
<PAGE>
transfer the said shares on the books of the within-named Trust with full power
of substitution in the premises.
Dated, _________________ NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the certificate in every particular, without
alteration or enlargement or any change whatever.
Owner __________________ The signature(s) must be guaranteed by one of the
following entities: U.S. bank, trust company,
credit union, savings association, or foreign bank
having a U.S. correspondent bank: a U.S. registered
securities dealer or broker, municipal securities
dealer or broker, or government securities dealer
or broker; or a national securities exchange,
registered securities association or clearing
agency.
Signature of Co-Owner, if any
_________________________________
Signature(s) guaranteed by:
________________________________________________________________________________
PLEASE NOTE: This document contains a watermark when viewed at an angle. It is
invalid without this watermark: NUVEEN
________________________________________________________________________________
This Space Must Not Be Covered In Any Way
<PAGE>
Exhibit 5(a)
Management Agreement
Between
Nuveen Investment Trust II
and
Nuveen Institutional Advisory Corp.
Nuveen Investment Trust II, a Massachusetts business trust registered under
the Investment Company Act of 1940 ("1940 Act") as an open-end diversified
management series investment company ("Trust"), hereby appoints Nuveen
Institutional Advisory Corp., a Delaware corporation registered under the
Investment Advisers Act of 1940 as an investment adviser, of Chicago, Illinois
("Manager"), to furnish investment advisory and management services and certain
administrative services with respect to the portion of its assets represented by
the shares of beneficial interest issued in the series listed in Schedule A
hereto, as such schedule may be amended from time to time (each such series
hereinafter referred to as "Fund"). Trust and Manager hereby agree that:
1. Investment Management Services. Manager shall manage the investment
operations of Trust and each Fund, subject to the terms of this Agreement
and to the supervision and control of Trust's Board of Trustees
("Trustees"). Manager agrees to perform, or arrange for the performance of,
the following services with respect to each Fund:
(a) to obtain and evaluate such information relating to
economies, industries, businesses, securities and commodities markets,
and individual securities, commodities and indices as it may deem
necessary or useful in discharging its responsibilities hereunder;
(b) to formulate and maintain a continuous investment program in
a manner consistent with and subject to (i) Trust's agreement and
declaration of trust and by-laws; (ii) the Fund's investment
objectives, policies, and restrictions as set forth in written
documents furnished by the Trust to Manager; (iii) all securities,
commodities, and tax laws and regulations applicable to the Fund and
Trust; and (iv) any other written limits or directions furnished by
the Trustees to Manager;
<PAGE>
(c) unless otherwise directed by the Trustees, to determine from
time to time securities, commodities, interests or other investments
to be purchased, sold, retained or lent by the Fund, and to implement
those decisions, including the selection of entities with or through
which such purchases, sales or loans are to be effected;
(d) to use reasonable efforts to manage the Fund so that it will
qualify as a regulated investment company under subchapter M of the
Internal Revenue Code of 1986, as amended;
(e) to make recommendations as to the manner in which voting
rights, rights to consent to Trust or Fund action, and any other
rights pertaining to Trust or the Fund shall be exercised;
(f) to make available to Trust promptly upon request all of the
Fund's records and ledgers and any reports or information reasonably
requested by the Trust; and
(g) to the extent required by law, to furnish to regulatory
authorities any information or reports relating to the services
provided pursuant to this Agreement.
Except as otherwise instructed from time to time by the Trustees, with
respect to execution of transactions for Trust on behalf of a Fund, Manager
shall place, or arrange for the placement of, all orders for purchases,
sales, or loans with issuers, brokers, dealers or other counterparts or
agents selected by Manager. In connection with the selection of all such
parties for the placement of all such orders, Manager shall attempt to
obtain most favorable execution and price, but may nevertheless in its sole
discretion as a secondary factor, purchase and sell portfolio securities
from and to brokers and dealers who provide Manager with statistical,
research and other information, analysis, advice, and similar services. In
recognition of such services or brokerage services provided by a broker or
dealer, Manager is hereby authorized to pay such broker or dealer a
commission or spread in excess of that which might be charged by another
broker or dealer for the same transaction if the Manager determines in good
faith that the commission or spread is reasonable in relation to the value
of the services so provided.
Trust hereby authorizes any entity or person associated with Manager
that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Fund to the extent
permitted by and in accordance with Section 11(a) of the Securities
Exchange Act or 1934 and Rule 11a2-2(T) thereunder. Trust hereby
-2-
<PAGE>
consents to the retention by such entity or person of compensation for such
transactions in accordance with Rule 11a-2-2(T)(a)(iv).
Manager may, where it deems to be advisable, aggregate orders for its
other customers together with any securities of the same type to be sold or
purchased for Trust or one or more Funds in order to obtain best execution
or lower brokerage commissions. In such event, Manager shall allocate the
shares so purchased or sold, as well as the expenses incurred in the
transaction, in a manner it considers to be equitable and fair and
consistent with its fiduciary obligations to Trust, the Funds, and
Manager's other customers.
Manager shall for all purposes be deemed to be an independent
contractor and not an agent of Trust and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent Trust in
any way.
2. Administrative Services. Subject to the terms of this Agreement
and to the supervision and control of the Trustees, Manager shall provide
to the Trust facilities, equipment, statistical and research data,
clerical, accounting and bookkeeping services, internal auditing and legal
services, and personnel to carry out all management services required for
operation of the business and affairs of the Funds other than those
services to be performed by the Trust's Distributor pursuant to the
Distribution Agreement, those services to be performed by the Trust's
Custodian pursuant to the Custody Agreement, those services to be performed
by the Trust's Transfer Agent pursuant to the Transfer Agency Agreement,
those services to be provided by the Trust's Custodian pursuant to the
Accounting Agreement and those services normally performed by the Trust's
counsel and auditors.
3. Use of Affiliated Companies and Subcontractors. In connection with
the services to be provided by Manager under this Agreement, Manager may,
to the extent it deems appropriate, and subject to compliance with the
requirements of applicable laws and regulations, make use of (i) its
affiliated companies and their directors, trustees, officers, and employees
and (ii) subcontractors selected by Manager, provided that Manager shall
supervise and remain fully responsible for the services of all such third
parties in accordance with and to the extent provided by this Agreement.
All costs and expenses associated with services provided by any such third
parties shall be borne by Manager or such parties.
4. Expenses Borne by Trust. Except to the extent expressly assumed by
Manager herein or under a separate agreement between Trust and Manager and
except to the extent required by law to be paid by Manager, Manager shall
not be obligated to pay
-3-
<PAGE>
any costs or expenses incidental to the organization, operations or
business of the Trust. Without limitation, such costs and expenses shall
include but not be limited to:
(a) all charges of depositories, custodians and other agencies
for the safekeeping and servicing of its cash, securities, and other
property;
(b) all charges for equipment or services used for obtaining
price quotations or for communication between Manager or Trust and the
custodian, transfer agent or any other agent selected by Trust;
(c) all charges for and accounting services provided to Trust by
Manager, or any other provider of such services;
(d) all charges for services of Trust's independent auditors and
for services to Trust by legal counsel;
(e) all compensation of Trustees, other than those affiliated
with Manager, all expenses incurred in connection with their services
to Trust, and all expenses of meetings of the Trustees or committees
thereof;
(f) all expenses incidental to holding meetings of holders of
units of interest in the Trust ("Shareholders"), including printing
and of supplying each record-date Shareholder with notice and proxy
solicitation material, and all other proxy solicitation expense;
(g) all expenses of printing of annual or more frequent revisions
of Trust prospectus(es) and of supplying each then-existing
Shareholder with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting
certificates representing Trust shares;
(i) all expenses of bond and insurance coverage required by law
or deemed advisable by the Board of Trustees;
(j) all brokers' commissions and other normal charges incident to
the purchase, sale, or lending of portfolio securities;
-4-
<PAGE>
(k) all taxes and governmental fees payable to Federal, state or
other governmental agencies, domestic or foreign, including all stamp
or other transfer taxes;
(l) all expenses of registering and maintaining the registration
of Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering Trust's shares under the 1933 Act,
of qualifying and maintaining qualification of Trust and of Trust's
shares for sale under securities laws of various states or other
jurisdictions and of registration and qualification of Trust under all
other laws applicable to Trust or its business activities;
(m) all interest on indebtedness, if any, incurred by Trust or a
Fund; and
(n) all fees, dues and other expenses incurred by Trust in
connection with membership of Trust in any trade association or other
investment company organization.
5. Allocation of Expenses Borne by Trust. Any expenses borne by Trust
that are attributable solely to the organization, operation or business of
a Fund shall be paid solely out of Fund assets. Any expense borne by Trust
which is not solely attributable to a Fund, nor solely to any other series
of shares of Trust, shall be apportioned in such manner as Manager
determines is fair and appropriate, or as otherwise specified by the Board
of Trustees.
6. Expenses Borne by Manager. Manager at its own expense shall furnish
all executive and other personnel, office space, and office facilities
required to render the investment management and administrative services
set forth in this Agreement.
In the event that Manager pays or assumes any expenses of Trust or a
Fund not required to be paid or assumed by Manager under this Agreement,
Manager shall not be obligated hereby to pay or assume the same or similar
expense in the future; provided that nothing contained herein shall be
deemed to relieve Manager of any obligation to Trust or a Fund under any
separate agreement or arrangement between the parties.
7. Management Fee. For the services rendered, facilities provided, and
charges assumed and paid by Manager hereunder, Trust shall pay to Manager
out of the assets of each Fund fees at the annual rate for such Fund as set
forth in Schedule B to this Agreement. For each Fund, the management fee
shall accrue on each calendar day, and shall be payable monthly on the
first business day of the next succeeding calendar month.
-5-
<PAGE>
The daily fee accrual shall be computed by multiplying the fraction of one
divided by the number of days in the calendar year by the applicable annual
rate of fee, and multiplying this product by the net assets of the Fund,
determined in the manner established by the 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.
8. State Expense Limitation. If for any fiscal year of a Fund, its
aggregate operating expenses ("Aggregate Operating Expenses") exceed the
applicable percentage expense limit imposed under the securities law and
regulations of any state in which Shares of the Fund are qualified for sale
(the "State Expense Limit"), the Manager shall pay such Fund the amount of
such excess. For purposes of this State Expense Limit, Aggregate Operating
Expenses shall (a) include (i) any fees or expenses reimbursements payable
to Manager pursuant to this Agreement and (ii) to the extent the Fund
invests all or a portion of its assets in another investment company
registered under the 1940 Act, the pro rata portion of that company's
operating expenses allocated to the Fund, and (iii) any compensation
payable to Manager pursuant to any separate agreement relating to the
Fund's administration, but (b) exclude any interest, taxes, brokerage
commissions, and other normal charges incident to the purchase, sale or
loan of securities, commodity interests or other investments held by the
Fund, litigation and indemnification expense, and other extraordinary
expenses not incurred in the ordinary course of business. Except as
otherwise agreed to by the parties or unless otherwise required by the law
or regulation of any state, any reimbursement by Manager to a Fund under
this section shall not exceed the management fee payable to Manager by the
Fund under this Agreement.
Any payment to a Fund by Manager hereunder shall be made monthly, by
annualizing the Aggregate Operating Expenses for each month as of the last
day of the month. An adjustment for payments made during any fiscal year of
the Fund shall be made on or before the last day of the first month
following such fiscal year of the Fund if the Annual Operating Expenses for
such fiscal year (i) do not exceed the State Expense Limitation or (ii) for
such fiscal year there is no applicable State Expense Limit.
9. Retention of Sub-Adviser. Subject to obtaining the initial and
periodic approvals required under Section 15 of the 1940 Act, Manager may
retain one or more sub-advisers at Manager's own cost and expense for the
purpose of furnishing one or more of the services described in Section 1
hereof with respect to Trust or one or more Funds. Retention of a sub-
adviser shall in no way reduce the responsibilities or obligations of
Manager under this Agreement, and Manager shall be responsible to Trust and
its Funds for all acts or omissions of any sub-adviser in connection with
the performance or Manager's duties hereunder.
-6-
<PAGE>
10. Non-Exclusivity. The services of Manager to Trust hereunder are
not to be deemed exclusive and Manager shall be free to render similar
services to others.
11. Standard of Care. The Manager shall not be liable for any loss
sustained by reason of the purchase, sale or retention of any security,
whether or not such purchase, sale or retention shall have been based upon
the investigation and research made by any other individual, firm or
corporation, if such recommendation shall have been selected with due care
and in good faith, except loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the Manager in the performance of
its obligations and duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
12. Amendment. This Agreement may not be amended as to Trust or any
Fund without the affirmative votes (a) of a majority of the Board of
Trustees, including a majority of those Trustees who are not "interested
persons" of Trust or of Manager, voting in person at a meeting called for
the purpose of voting on such approval, and (b) of a "majority of the
outstanding shares" of Trust or, with respect to any amendment affecting an
individual Fund, a "majority of the outstanding shares" of that Fund. The
terms "interested persons" and "vote of a majority of the outstanding
shares" shall be construed in accordance with their respective definitions
in the 1940 Act and, with respect to the latter term, in accordance with
Rule 18f-2 under the 1940 Act.
13. Effective Date and Termination. This Agreement shall become
effective as to any Fund as of the effective date for that Fund specified
in Schedule A hereto. This Agreement may be terminated at any time, without
payment of any penalty, as to any Fund by the Board of Trustees of Trust,
or by a vote of a majority of the outstanding shares of that fund, upon at
least sixty (60) days' written notice to Manager. This Agreement may be
terminated by Manager at any time upon at least sixty (60) days' written
notice to Trust. This Agreement shall terminate automatically in the event
of its "assignment" (as defined in the 1940 Act). Unless terminated as
hereinbefore provided, this Agreement shall continue in effect with respect
to any Fund until the end of the initial term applicable to that Fund
specified in Schedule A and thereafter from year to year only so long as
such continuance is specifically approved with respect to that Fund at
least annually (a) by a majority of those Trustees who are not interested
persons of Trust or of Manager, voting in person at a meeting called for
the purpose of voting on such approval, and (b) by either the Board of
Trustees of Trust or by a "vote of a majority of the outstanding shares" of
the Fund.
14. Ownership of Records; Interparty Reporting. All records required
to be maintained and preserved by Trust pursuant to the provisions of rules
or regulations of
-7-
<PAGE>
the Securities and Exchange Commission under Section 31(a) of the 1940 Act
or other applicable laws or regulations which are maintained and preserved
by Manager on behalf of Trust and any other records the parties mutually
agree shall be maintained by Manager on behalf of Trust are the property of
Trust and shall be surrendered by Manager promptly on request by Trust;
provided that Manager may at its own expense make and retain copies of any
such records.
Trust shall furnish or otherwise make available to Manager such copies
of the financial statements, proxy statements, reports, and other
information relating to the business and affairs of each Shareholder in a
Fund as Manager may, at any time or from time to time, reasonably require
in order to discharge its obligations under this Agreement.
Manager shall prepare and furnish to Trust as to each Fund statistical
data and other information in such form and at such intervals as Trust may
reasonably request.
15. Non-Liability of Trustees and Shareholders. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Fund thereof) and shall not be binding upon any Trustee,
officer, employee, agent or Shareholder of Trust. Neither the authorization
of any action by the Trustees or Shareholders of Trust nor the execution of
this Agreement on behalf of Trust shall impose any liability upon any
Trustee or any Shareholder.
16. Use of Manager's Name. Trust may use the name "Nuveen Investment
Trust II" and the Fund names listed in Schedule A or any other name derived
from the name "Nuveen" only for so long as this Agreement or any extension,
renewal, or amendment hereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the business
of Manager as investment adviser. At such time as this Agreement or any
extension, renewal or amendment hereof, or such other similar agreement
shall no longer be in effect, Trust will cease to use any name derived from
the name "Nuveen" or otherwise connected with Manager, or with any
organization which shall have succeeded to Manager's business as investment
adviser.
17. References and Headings. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder'" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a
part hereof or control or affect the meaning, construction, or effect
-8-
<PAGE>
of this Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
Dated: October 31, 1997
Nuveen Investment Trust II
Attest By /s/ Gifford R. Zimmerman
--------------------------------
Gifford R. Zimmerman
/s/ Karen L. Healy
- ------------------------
Karen L. Healy
Nuveen Institutional Advisory Corp.
Attest By /s/ Thomas C. Spalding
--------------------------------
Thomas C. Spalding
/s/ Larry Martin
- ------------------------
Larry Martin
-9-
<PAGE>
Nuveen Investment Trust II
Management Agreement
Schedule A
The Funds of the Trust currently subject to this Agreement and the
effective date of each are as follows:
Fund Effective Date
Nuveen Rittenhouse Growth Fund November , 1997
<PAGE>
Exhibit 5(b)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT MADE THIS 31st day of October 1997 by and between Nuveen
Institutional Advisory Corp., a Delaware corporation and a registered investment
adviser ("Manager"), and Rittenhouse Financial Services, Inc., a Delaware
corporation and a registered investment adviser ("Sub-Adviser").
WHEREAS, Manager is the investment manager for Nuveen Investment Trust II
(the "Fund"), an open-end diversified, management investment company registered
under the Investment Company Act of 1940, as amended ("1940 Act"), the only
outstanding series of which is currently the Nuveen Rittenhouse Growth Fund (the
"Portfolio"); and
WHEREAS, Manager desires to retain Sub-Adviser as its agent to furnish
investment advisory services for the 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 Portfolio for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointments and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. Additional Portfolios. In the event that the Fund establishes one or
more additional portfolios other than the Portfolio with respect to which the
Manager desires to engage the Sub-Adviser to render investment advisory services
hereunder, the Manager shall notify the Sub-Adviser of such desire. If the Sub-
Adviser is willing to render such services, it shall notify the Manager in
writing whereupon such portfolio or portfolios shall become a Portfolio
hereunder.
3. 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 Portfolio, all on behalf of the
Portfolio. In the performance of its duties, Sub-Adviser will satisfy its
fiduciary duties to the Fund (as set forth in Section 7, below), and will
monitor the Portfolio's investments, and will comply with the provisions of
Fund's Declaration of Trust and By-laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the Portfolio.
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 Portfolio and to consult
with each other regarding the investment affairs of the Portfolio. Sub-Adviser
will report to the Board of Trustees and to Manager with respect to the
implementation of such program.
<PAGE>
Sub-Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Portfolio, and
is directed to use its best 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 the Portfolio,
or be in breach of any obligation owing to the Fund or the Portfolio 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 Portfolio 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 which 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 any Portfolio 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 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 Portfolios, including,
without limitation, review of the general investment strategies of the
Portfolio, the performance of the Portfolio 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; and
2
<PAGE>
(d) will prepare such books and records with respect to the Portfolio's
securities transactions 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.
4. 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 commission, if any)
purchased for the Fund.
5. 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, at the end of each
calendar month, a portfolio management fee at the annual rate as set forth
below:
Assets Rate of Fee
For the first $500 million .35 of 1%
For assets over $500 million .30 of 1%
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.
6. 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 other investment companies, provided that
whenever the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 service and nothing contained in this Agreement will be deemed to
limit or restrict the right of Sub-Adviser or any of its affiliates to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature. 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.
3
<PAGE>
7. Limitation of Liability. Manager will not take any action against Sub-
Adviser to hold 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 Sub-
Adviser's duties under this Agreement, except for a loss resulting from 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 this Agreement.
8. Term; Termination; Amendment. This Agreement shall become effective
with respect to the Portfolio 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
Portfolio in accordance with the requirements of the 1940 Act, and shall remain
in full force until August 1, 1999 unless sooner terminated as hereinafter
provided. This Agreement shall continue in force from year to year thereafter
with respect to a Portfolio, but only as long as such continuance is
specifically approved for that Portfolio at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder; provided,
however, that if the continuation of this Agreement is not approved for a
Portfolio, the Sub-Adviser may continue to serve in such capacity for such
Portfolio 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 sixty (60) days' written notice to the Sub-Adviser. This Agreement
may also be terminated by the Fund with respect to a Portfolio by action of the
Board of Trustees or by a vote of a majority of the outstanding voting
securities of such Portfolio on sixty (60) days' written notice to the Sub-
Adviser by the Fund.
This Agreement may be terminated with respect to a Portfolio 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 such Portfolio 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 which 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 5 earned prior to such termination. This Agreement shall automatically
terminate in the event the Investment Management Agreement between the Manager
and the Fund is terminated, assigned or not renewed.
4
<PAGE>
9. Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
10. Limitations on Liability. All parties hereto are expressly put on
notice of the Fund's Agreement and Declaration of Trust and all amendments
thereto, all of which are on file with the Secretary of Massachusetts, and the
limitation of shareholder and trustee liability contained therein. The
obligations of the Fund entered in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually but only in such
capacities and are not binding upon any of the Trustees, officers, or
shareholders of the Fund individually but are binding upon only the assets and
property of the Fund, and persons dealing with the Fund must look solely to the
assets of the Fund and those assets belonging to the subject Portfolio, for the
enforcement of any claims.
11. 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.
12. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 11 hereof which shall be
construed in accordance with the laws of Massachusetts) the laws of the State of
Illinois.
IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this
Agreement to be executed as of the day and year first above written.
NUVEEN INSTITUTIONAL ADVISORY RITTENHOUSE FINANCIAL SERVICES,
CORP., a Delaware corporation INC, a Delaware corporation
By: /s/ Gifford R. Zimmerman By: /s/ Richard D. Hughes
--------------------------- ---------------------------
Title: Vice President Title: President
------------------------ ------------------------
5
<PAGE>
Exhibit 6
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT made as of this 24th of July, l997 between NUVEEN INVESTMENT
TRUST II, a business trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund"), and JOHN NUVEEN & CO. INCORPORATED, a Delaware
corporation (the "Underwriter").
W I T N E S S E T H
- - - - - - - - - -
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the
distribution of shares of beneficial interest, par value $.0l per share,
including such series or classes of shares as may now or hereafter be
authorized, (the "Shares") in jurisdictions wherein Shares may legally be
offered for sale; provided, however, that the Fund, in its absolute discretion,
may: (a) issue or sell Shares directly to holders of Shares of the Fund upon
such terms and conditions and for such consideration, if any, as it may
determine, whether in connection with the distribution of subscription or
purchase rights, the payment or reinvestment of dividends or distributions, or
otherwise; and (b) issue or sell Shares at net asset value in connection with
merger or consolidation with, or acquisition of the assets of, other investment
companies or similar companies.
2. The Underwriter hereby accepts appointment as agent for the distribution of
the Shares and agrees that it will use its best efforts to sell such part of the
authorized Shares remaining unissued as from time to time shall be effectively
registered under the Securities Act of l933 ("Securities Act"), at prices
determined as hereinafter provided and on terms hereinafter set forth, all
subject to applicable Federal and State laws and regulations and to the
Declaration of Trust of the Fund.
3. The Fund agrees that it will use its best efforts to keep effectively
registered under the Securities Act for sale, as herein contemplated, such
Shares as the Underwriter shall reasonably request and as the Securities and
Exchange Commission shall permit to be so registered.
4. Notwithstanding any other provision hereof, the Fund may terminate,
suspend, or withdraw the offering of the Shares, or Shares of any series or
class, whenever, in its sole discretion, it deems such action to be desirable.
5. The Underwriter shall sell Shares to, or through, brokers, dealers, banks
or other qualified financial intermediaries (hereinafter referred to as
"dealers"), or others, in such manner not inconsistent with the provisions
hereof and the then effective Registration Statement of the Fund under the
Securities Act (and related Prospectus and Statement of Additional Information)
as the Underwriter may determine from time to time, provided that no dealer, or
other person, shall be appointed nor authorized to act as agent of the Fund
without the prior consent of the Fund. The Underwriter shall have the right to
enter into agreements with brokers, dealers and banks (referred to herein as
"dealers") of its choice for the sale of Shares and fix therein the portion of
<PAGE>
the sales charge which may be allocated to such dealers; provided that the Fund
shall approve the form of such agreements and shall evidence such approval by
filing said form and any amendments thereto as attachments to this Agreement,
which shall be filed as an exhibit to the Fund's currently effective
registration statement under the Securities Act. Shares sold to dealers shall be
for resale by such dealers only at the public offering price(s) set forth in the
Fund's then current Prospectus. The current forms of such agreements are
attached hereto as Exhibits 1, 2 and 3.
6. Shares offered for sale, or sold by the Underwriter, shall be so offered or
sold at a price per Share determined in accordance with the then current
Prospectus relating to the sale of Shares except as departure from such prices
shall be permitted by the rules and regulations of the Securities and Exchange
Commission. Any public offering price shall be the net asset value per Share
plus a sales charge of not more than 5.25% of such public offering price. Shares
may be sold at net asset value without a sales charge to such class or classes
of investors or in such class or classes of transactions as may be permitted
under applicable rules of the Securities and Exchange Commission and as
described in the then current Prospectus of the Fund. The net asset value per
Share of each series or class shall be calculated in accordance with the
Declaration of Trust of the Fund and shall be determined in the manner, and at
the time, set forth in the then current Prospectus of the Fund relating to such
Shares.
7. The price the Fund shall receive for all Shares purchased from the Fund
shall be the net asset value used in determining the public offering price
applicable to the sale of such Shares. The excess, if any, of the sales price
over the net asset value of Shares sold by the Underwriter as agent shall be
retained by the Underwriter as a commission for its services hereunder. Out of
such commission, the Underwriter may allow commissions or concessions to dealers
in such amounts as the Underwriter shall determine from time to time. Except as
may be otherwise determined by the Underwriter and the Fund from time to time,
such commissions or concessions shall be uniform to all dealers.
8. The Underwriter shall issue and deliver, or cause to be issued and
delivered, on behalf of the Fund such confirmations of sales made by it as
agent, pursuant to this Agreement, as may be required. At, or prior to, the time
of issuance of Shares, the Underwriter will pay, or cause to be paid, to the
Fund the amount due the Fund for the sale of such Shares. Certificates shall be
issued, or Shares registered on the transfer books of the Fund, in such names
and denominations as the Underwriter may specify.
9. The Fund will execute any and all documents, and furnish any and all
information, which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of the Fund as
a dealer, where necessary or advisable) in such states as the Underwriter may
reasonably request (it being understood that the Fund shall not be required,
without its consent, to comply with any requirement which, in its opinion, is
unduly burdensome).
2
<PAGE>
10. The Fund will furnish to the Underwriter, from time to time, such
information with respect to the Fund and the Shares as the Underwriter may
reasonably request for use in connection with the sale of Shares. The
Underwriter agrees that it will not use or distribute, nor will it authorize
dealers or others to use, distribute or disseminate, in connection with the sale
of such Shares, any statements other than those contained in the Fund's current
Prospectus and Statement of Additional Information, except such supplemental
literature or advertising as shall be lawful under Federal and State securities
laws and regulations, and that it will furnish the Fund with copies of all such
material.
11. The Underwriter shall order Shares from the Fund only to the extent that it
shall have received purchase orders therefor. The Underwriter will not make, nor
authorize any dealers or others, to make: (a) any short sale of Shares; or (b)
any sale of Shares to any officer or trustee of the Fund, nor to any officer or
trustee of the Underwriter, or of any corporation or association furnishing
investment advisory, managerial, or supervisory services to the Fund, nor to any
such corporation or association, unless such sales are made in accordance with
the then current Prospectus relating to the sale of such Shares.
12. In selling Shares for the account of the Fund, the Underwriter will in all
respects conform to the requirements of all Federal and State laws and the Rules
of Fair Practice of the National Association of Securities Dealers, Inc.
relating to such sales, and will indemnify and save harmless the Fund from any
damage or expense on account of any wrongful act by the Underwriter or any
employee, representative, or agent of the Underwriter. The Underwriter will
observe and be bound by all the provisions of the Declaration of Trust of the
Fund (and of any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940, notice of which shall have been given by the
Fund to the Underwriter) which at the time in any way require, limit, restrict,
prohibit or otherwise regulate any action on the part of the Underwriter.
13. The Underwriter will require each dealer to conform to the provisions
hereof and of the Registration Statement (and related Prospectus) at the time in
effect under the Securities Act with respect to the public offering price of the
Shares, and neither the Underwriter nor any such dealer shall withhold the
placing of purchase orders so as to make a profit thereby.
14. The Fund will pay, or cause to be paid, expenses (including the fees and
disbursements of its own counsel) of any registration of Shares under the
Securities Act, expenses of qualifying or continuing the qualification of the
Shares for sale and, in connection therewith, of qualifying or continuing the
qualification of the Fund as a dealer or broker under the laws of such states as
may be designated by the Underwriter under the conditions herein specified, and
expenses incident to the issuance of the Shares such as the cost of Share
certificates, issue taxes, and fees of the transfer and shareholder service
agent. The Underwriter will pay, or cause to be paid, all expenses (other than
expenses which any dealer may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the Shares issued or sold
hereunder, including, without limiting the generality of the foregoing, all: (a)
expenses of printing and
3
<PAGE>
distributing any Prospectus and Statement of Additional Information and of
preparing, printing and distributing or disseminating any other literature,
advertising and selling aids in connection with such offering of the Shares for
sale (except that such expenses need not include expenses incurred by the Fund
in connection with the preparation, printing and distribution of any report or
other communication to holders of Shares in their capacity as such), and (b)
expenses of advertising in connection with such offering. No transfer taxes, if
any, which may be payable in connection with the issue or delivery of Shares
sold as herein contemplated, or of the certificates for such Shares, shall be
borne by the Fund, and the Underwriter will indemnify and hold harmless the Fund
against liability for all such transfer taxes.
15. This agreement shall continue in effect until August 1, 1998, unless and
until terminated by either party as hereinafter provided, and will continue from
year to year thereafter, but only so long as such continuance is specifically
approved, at least annually, in the manner required by the Investment Company
Act of 1940. Either party hereto may terminate this agreement on any date by
giving the other party at least six months' prior written notice of such
termination, specifying the date fixed therefor. Without prejudice to any other
remedies of the Fund in any such event, the Fund may terminate this agreement at
any time immediately upon any failure of fulfillment of any of the obligations
of the Underwriter hereunder.
Without prejudice to any other remedies of the Fund in any such event, the Fund
may terminate this Agreement at any time immediately upon any failure of
fulfillment of any of the obligations of the Underwriter hereunder.
16. This agreement shall automatically terminate in the event of its
assignment.
17. Any notice under this agreement shall be in writing, addressed, and
delivered or mailed, postage pre-paid, to the other party at such address as
such other party may designate for the receipt of such notice.
18. The Declaration of Trust of the Fund on file with the Secretary of State of
the Commonwealth of Massachusetts was executed on behalf of the Fund by the
initial trustees of the Fund and not individually, and any obligation of the
Fund shall be binding only upon the assets of the Fund (or applicable series
thereof) and shall not be binding upon any trustee, officer or shareholder of
the Fund. Neither the authorization of any action by the trustees or
shareholders of the Fund nor the execution of this agreement on behalf of the
Fund shall impose any liability upon any Trustee, officer or shareholder of the
Fund.
4
<PAGE>
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this agreement
to be executed on its behalf as of the day and year first above written.
NUVEEN INVESTMENT TRUST II
By /s/ Larry Martin
------------------------
Vice President
Attest:
/s/ Karen L. Healy
- -------------------
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By /s/ Alan G. Berkshire
------------------------
Vice President
Attest:
/s/ Gifford R. Zimmerman
- ------------------------
Assistant Secretary
5
<PAGE>
EXHIBIT A TO NUVEEN MUTUAL FUNDS
DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
Policies and Procedures With Respect to Sales of
Multiple Classes of Funds
The Nuveen non-money market open-end mutual funds (the "Funds") have the
following classes of shares generally available to the public: Class A Shares,
which are normally subject to an up-front sales charge and a service fee; Class
B Shares, which are subject to an asset-based sales charge, a service fee, and a
declining contingent deferred sales charge ("CDSC"); and Class C Shares, which
are subject to an asset-based sales charge, a service fee, and a 12-month CDSC,
it is important for an investor to choose the method of purchasing shares which
best suits his or her particular circumstances. To assist investors in these
decisions, John Nuveen & Co. Incorporated, underwriter for the Nuveen Mutual
Funds, has instituted the following policies with respect to orders for Fund
shares. These policies apply to each Authorized Dealer which distributes Fund
shares.
1. Purchase orders for a single purchaser equal to or exceeding $1,000,000
should be placed only for Class A shares, unless such purchase for
Class B or Class C Shares has been reviewed and approved by the
Authorized Dealer's appropriate supervisor.
2. Any purchase order for less than $1,000,000 may be for Class A, Class B
or Class C Shares in light of the relevant facts and circumstances,
including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his or her
Shares;
c. whether the investor expects to reinvest dividends; and
d. any other relevant circumstances such as the availability of
purchases under a letter of intent, a combined discount or a
cumulative discount, as described in the Prospectus for the
Fund, and any anticipated changes in the funds net asset value
per share.
There are instances when one method of purchasing Shares may be more appropriate
than the other. For example, investors who would qualify for a significant
discount from the maximum sales load on Class A Shares might determine that
payment of such a reduced up-front sales charge is preferable to the payment of
a higher ongoing distribution fee on Class B or Class C Shares. On the other
hand, investors who prefer not to pay an up-front sales charge may wish to defer
the sales charge by purchasing Class B or Class C Shares. Those who plan to
redeem their shares within five years might consider Class C Shares,
particularly if they do not expect to reinvest dividends in additional shares.
Note that, if an investor anticipate redeeming Class B Shares within a short
period of time such as one year, that investor may bear higher distribution
expenses than if Class A Shares had been purchased. In addition, investors who
intend to hold their shares for a significantly long
<PAGE>
time may not wish to bear the higher ongoing asset-based sales charges of Class
B or Class C Shares, irrespective of the fact that the CDSC that would apply to
a redemption of Class B Shares is reduced over time and is ultimately
eliminated, and that the CDSC that would apply to a redemption of Class C Shares
is relatively short in duration and small in amount.
Appropriate supervisory personnel within your organization must ensure that all
employees receiving investor inquiries about the purchase of shares of the Funds
advise the investor of the available pricing structures offered by the Funds and
the impact of choosing one method over another, including breakpoints and the
availability of letters of intent, combined purchases and cumulative discounts.
In some instances it may be appropriate for a supervisory person to discuss a
purchase with the investor.
These policies are effective immediately with respect to any order for the
purchase of shares of the Funds.
July 18, 1996
<PAGE>
Nuveen Mutual Funds
Dealer Distribution and
Shareholder Servicing Agreement
As principal underwriter of shares of the various Nuveen non-money market open-
end mutual funds, and of the shares of any future such funds (collectively, the
"Funds"), we invite you to join a selling group for the distribution of shares
of common stock of the Funds (the "Shares"). As exclusive agent of the Funds, we
offer to sell you Shares on the following terms:
1. In all sales of Shares to the public you shall act as dealer for your own
account, and in no transaction shall you have any authority to act as agent
for any Fund, for us or for any other member of the Selling Group.
2. Orders received from you shall be accepted by us only at the public offering
price applicable to each order, as established by the then current
Prospectus of the appropriate Fund, subject to the discounts provided in
such Prospectus. Upon receipt from you of any order to purchase Shares we
shall confirm to you in writing or by wire to be followed by a confirmation
in writing. Additional instructions may be forwarded to you from time to
time. All orders are subject to acceptance or rejection by us in our sole
discretion.
3. You may offer and sell Shares to your customers only at the public offering
price determined in the manner described in the current Prospectus of the
appropriate Fund. Shares will be offered at a public offering price based
upon the net asset value of such Shares plus, with respect to certain
class(es) of Shares, a sales charge from which you shall receive a discount
equal to a percentage of the applicable offering price as provided in the
Prospectus. You may receive a distribution fee and/or a service fee with
respect to certain class(es) of Shares for which such fees are applicable,
as provided in the applicable Prospectus, which distribution fee and/or
service fee shall be payable for such periods and at such intervals as are
from time to time specified by us. Your placement of an order for Shares
after the date of any notice of such amendment shall conclusively evidence
your agreement to be bound thereby.
Reduced sales charges may also be available as a result of a cumulative
discount or pursuant to a letter of intent. Further information as to such
reduced sales charges, if any, is set forth in the appropriate Fund
Prospectus. You agree to advise us promptly as to the amounts of any sales
made by you to the public qualifying for reduced sales charges.
4. By accepting this Agreement, you agree:
a) That you will purchase Shares only from us;
b) That you will purchase Shares from us only to cover purchase orders
already received from your customers, or for your own bona fide
investment; and
c) That you will not withhold placing with us orders received from your
customers so as to profit yourself as a result of such withholding.
d) That, with respect to the sale of Shares of Funds that offer multiple
classes of Shares, you will comply with the terms of the Policies and
Procedures with Respect to Sales of Multiple Classes of Shares, attached
hereto as Exhibit A.
5. We will not accept from you any conditional orders for Shares.
6. Payment for Shares ordered from us shall be in New York clearing house funds
and must be received by the Funds' agent, Shareholder Services, Inc., P. O.
Box 5330, Denver, Colorado 80217-5330, within three business days after our
acceptance of your order. If such payment is not received, we reserve the
right, without notice, forthwith to cancel the sale or, at our option, to
cause the Fund to redeem the Shares ordered, in which case we may hold you
responsible for any loss, including loss of profit, suffered by us
1
<PAGE>
as result of your failure to make such payment. If any Shares confirmed to
you under the terms of this agreement are repurchased by the issuing Fund or
by us as agent for the Fund, or are tendered for repurchase, within seven
business days after the date of our confirmation of the original purchase
order, you shall promptly refund to us the full discount, commission, or
other concession, if any, allowed or paid to you on such Shares.
7. Shares sold hereunder shall be available in book-entry form on the books of
Shareholder Services, Inc. unless other instructions have been given.
8. No person is authorized to make any representations concerning Shares of any
Fund except those contained in the applicable current Prospectus and printed
information subsequently issued by the appropriate Fund or by us as
information supplemental to such Prospectus. You agree that you will not
offer or sell any Shares except under circumstances that will result in
compliance with the applicable Federal and state securities laws and that in
connection with sales and offers to sell Shares you will furnish to each
person to whom any such sale or offer is made a copy of the then current
Prospectus for the appropriate Fund (as the amended or supplemented) and
will not furnish to any persons any information relating to Shares which is
inconsistent in any respect with the information contained in the then
current Prospectus or cause any advertisement to be published in any
newspaper or posted in any public place without our consent and the consent
of the appropriate Fund. You shall be responsible for any required filing of
such advertising.
9. All sales will be made subject to our receipt of Shares from the appropriate
Fund. We reserve the right, in our discretion, without notice, to modify,
suspend or withdraw entirely the offering of any Shares, and upon notice to
change the price, sales charge, or dealer discount or to modify, cancel or
change the terms of this agreement.
10. Your acceptance of this agreement constitutes a representation that you are
a registered securities dealer and a member in good standing of the
National Association of Securities Dealers, Inc. and agree to comply with
all applicable state and Federal laws, rules and regulations applicable to
transactions hereunder and to the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., including specifically Section 26,
Article III thereof. You likewise agree that you will not offer to sell
Shares in any state or other jurisdiction in which they may not lawfully be
offered for sale.
11. You shall provide such office space and equipment, telephone facilities,
personnel and literature distribution as is necessary or appropriate for
providing information and services to your customers. Such services and
assistance may include, but not be limited to, establishment and
maintenance of shareholder accounts and records, processing purchase and
redemption transactions, answering routine inquiries regarding the Funds,
and such other services as may be agreed upon from time to time and as may
be permitted by applicable statute, rule, or regulation. You shall perform
these services in good faith and with reasonable care. You shall
immediately inform the Funds or us of all written complaints received by
you from Fund shareholders relating to the maintenance of their accounts
and shall promptly answer all such complaints.
12. All communications to us should be sent to 333 W. Wacker Drive, Chicago,
Illinois 60606. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
13. This Agreement shall be construed in accordance with the laws of the State
of Illinois. This Agreement is subject to the Prospectuses of the Funds
from time to time in effect, and, in the event of a conflict, the terms of
the Prospectuses shall control. References herein to the "Prospectus" of a
Fund shall mean the prospectus and statement of additional information of
such Fund as from time to time in effect. Any changes, modifications or
additions reflected in any such Prospectus shall be effective on the date
of such Prospectus (or supplement thereto) unless specified otherwise. This
Agreement shall supersede any prior dealer distribution agreement with
respect to the Funds.
John Nuveen & Co. Incorporated
| |
John Nuveen | |
Authorized Signature | |
- --------------------------------------------------------------------------------
2
<PAGE>
We have read the foregoing agreement and accept and agree to the terms and
conditions therein.
<TABLE>
<CAPTION>
Firm | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
___________________________________________________________________________________________________________
<S> <C>
| |
| Month Day Year |
Authorized Signature | Date | | | |
___________________________________________________________________________________________________________
Print Name of Signature | | | | | | | | | | | | | | | | | | | | | | | | | | | |
___________________________________________________________________________________________________________
Address | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
___________________________________________________________________________________________________________
City | | | | | | | | | | | | | | | | | | | Zip | | | | | | |
___________________________________________________________________________________________________________
Tax ID Number | | | | | | | | | | | | NASD | | | | | | | | | | | | | |
___________________________________________________________________________________________________________
</TABLE>
The above agreement should be executed in duplicate and both copies returned to
us for signature. We will return a fully executed copy to you for your files.
Please return the completed agreement to:
John Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illinois
60606-1286
3
<PAGE>
Nuveen Mutual Funds
Distribution and Shareholder
Servicing Agreement
(Bank Version)
As principal underwriter of shares of common stock (the "Shares") of the
various Nuveen non-money market open-end mutual funds and any future such funds
(collectively, the "Funds"), we offer to make available Shares for purchase by
your customers on the following terms:
1. In all sales of Shares to the public you shall act as agent for your
customers, and in no transaction shall you have any authority to act as
agent for any Fund or for us. The customers in question are for all purposes
your customers and not customers of John Nuveen & Co. Incorporated. We shall
execute transactions for each of your customers only upon your
authorization, it being understood in all cases that (a) you are acting as
agent for the customer; (b) the transactions are without recourse against
you by the customer; (c) as between you and the customer, the customer will
have full beneficial ownership of the securities; (d) each transaction is
initiated solely upon the order of the customer; and (e) each transaction is
for the account of the customer and not for your account.
2. Orders received from you shall be accepted by us only at the public offering
price applicable to each order, as established by the then current
Prospectus of the appropriate Fund, subject to the discounts provided in
such Prospectus. Upon receipt from you of any order to purchase Shares we
shall confirm to you in writing or by wire to be followed by a confirmation
in writing, and we shall concurrently send to your customer a letter
confirming such order, together with a copy of the appropriate Fund's
current Prospectus. Additional instructions may be forwarded to you from
time to time. All orders are subject to acceptance or rejection by us in our
sole discretion.
3. Members of the general public, including your customers, may purchase Shares
only at the public offering price determined in the manner described in the
current Prospectus of the appropriate Fund. Shares will be offered at a
public offering price based upon the net asset value of such Shares plus,
with respect to certain class(es) of Shares, a sales charge which, together
with the amount of that sales charge to be retained by banks acting as agent
for their customers, is set forth in the Prospectus. You may receive a
distribution fee and/or a service fee with respect to certain class(es) of
Shares for which such fees are applicable, as provided in the applicable
Prospectus, which distribution fee and/or service fee shall be payable for
such periods and at such intervals as are from time to time specified by us.
Your placement of an order for Shares after the date of any notice of such
amendment shall conclusively evidence your agreement to be bound thereby.
Reduced sales charges may also be available as a result of a cumulative
discount or pursuant to a letter of intent. Further information as to such
reduced sales charges, if any, is set forth in the appropriate Fund
Prospectus. You agree to advise us promptly as to the amounts of any sales
made by or though you to the public qualifying for reduced sales charges.
4. By accepting this Agreement, you agree:
a) That you will purchase Shares only from us, and only to cover purchase
orders already received from your customers;
b) That you will not withhold placing with us orders received from your
customers so as to profit yourself as a result of such withholding; and
c) That, with respect to the sale of Shares of Funds that offer multiple
classes of Shares, you will comply with the terms of the Policies and
Procedures with Respect to Sales of Multiple Classes of Shares, attached
hereto as Exhibit A.
5. We will not accept from you any conditional orders for Shares.
1
<PAGE>
6. Payment for Shares ordered from us shall be in New York clearing house funds
and must be received by the Funds' agent, Shareholder Services, Inc., P.O.
Box 5330, Denver, Colorado 80217-5330, within three business days after our
acceptance of your order. If such payment is not received, we reserve the
right, without notice, forthwith to cancel the sale or, at our option, to
cause the Fund to redeem the Shares ordered, in which case we may hold you
responsible for any loss, including loss of profit, suffered by us as result
of your or your customer's failure to make such payment. If any Shares
confirmed to you or your customer under the terms of this agreement are
repurchased by the issuing Fund or by us as agent for the Fund, or are
tendered for repurchase, within seven business days after the date of our
confirmation of the original purchase order, you shall promptly refund to us
the full discount, commission, or other concession, if any, allowed or paid
to you on such Shares.
7. Shares sold hereunder shall be available in book-entry form on the books of
Shareholder Services, Inc. unless other instructions have been given.
8. No person is authorized to make any representations concerning Shares of any
Fund except those contained in the applicable current Prospectus and printed
information issued by the appropriate Fund or by us as information
supplemental to such Prospectus. You agree that you will not offer or sell
any Shares except under circumstances that will result in compliance with
the applicable Federal and state securities laws and that in connection with
sales and offers to sell Shares you will furnish to each person to whom any
such sale or offer is made a copy of the then current Prospectus for the
appropriate Fund (as amended or supplemented) and will not furnish to any
persons any information relating to Shares which is inconsistent in any
respect with the information contained in the then current Prospectus or
cause any advertisement to be published in any newspaper or posted in any
public place without our consent and the consent of the appropriate Fund.
You shall be responsible for any required filing of such advertising.
9. All sales will be made subject to our receipt of Shares from the appropriate
Fund. We reserve the right, in our discretion, without notice, to modify,
suspend or withdraw entirely the offering of any Shares, and upon notice to
change the price, sales charge, or dealer discount or to modify, cancel or
change the terms of this agreement.
10. Your acceptance of this agreement constitutes a representation that you are
a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934,
as amended, and are duly authorized to engage in the transactions to be
performed hereunder. You hereby agree to comply with all applicable state
and Federal laws, rules and regulations applicable to transactions
hereunder. You likewise agree that you will not make Shares available in
any state or other jurisdiction in which they may not lawfully be offered
for sale.
11. You shall provide such office space and equipment, telephone facilities,
personnel and literature distribution as is necessary or appropriate for
providing information and services to your customers. Such services and
assistance may include, but not be limited to, establishment and maintenance
of shareholder accounts and records, processing purchase and redemption
transactions, answering routine inquiries regarding the Funds, and such
other services as may be agreed upon from time to time and as may be
permitted by applicable statute, rule, or regulation. You shall perform
these services in good faith and with reasonable care. You shall
immediately inform the Funds or us of all written complaints received by you
from Fund shareholders relating to the maintenance of their accounts and
shall promptly answer all such complaints.
12. All communications to us should be sent to 333 W. Wacker Drive, Chicago,
Illinois 60606. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
13. This Agreement shall be construed in accordance with the laws of the State
of Illinois. This Agreement is subject to the Prospectuses of the Funds
from time to time in effect, and, in the event of a conflict, the terms of
the Prospectuses shall control. References herein to the "Prospectus" of a
Fund shall mean the prospectus and statement of additional information of
such Fund as from time to time in effect. Any changes, modifications or
additions reflected in any such Prospectus shall be effective on the date of
such Prospectus (or supplement thereto) unless specified otherwise. This
Agreement shall supersede any prior dealer distribution agreement with
respect to the Funds.
2
<PAGE>
<TABLE>
John Nuveen & Co. Incorporated
| |
John Nuveen | |
Authorized Signature | |
__________________________________________________________________________________________________________
We have read the foregoing agreement and accept and agree to the terms and conditions therein.
<S> <C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C><C>
Firm | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
| Month Day Year |
Authorized Signature | Date | | | |
__________________________________________________________________________________________________________
Print Name of Signature | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
Address | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
City | | | | | | | | | | | | | | | | | | | | Zip | | | | | |
__________________________________________________________________________________________________________
Tax ID Number | | | | | | | | | | | | NASD | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
</TABLE>
The above agreement should be executed in duplicate and both copies returned to
us for signature. We will return a fully executed copy to you for your files.
Please return the completed agreement to:
John Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illinois 60606-
1286
3
<PAGE>
Nuveen Mutual Funds
Distribution and Shareholder
Servicing Agreement
(Version for Bank-Affiliated Broker-Dealers)
As principal underwriter of shares of common stock (the "Shares") of the
various Nuveen non-money market open-end mutual funds and any future such funds
(collectively, the "Funds"), we offer to make available Shares for purchase by
your customers on the following terms:
1. In all sales of Shares to the public you shall act as agent for your
customers, and in no transaction shall you have any authority to act as
agent for any Fund or for us. The customers in question are for all purposes
your customers and not customers of John Nuveen & Co. Incorporated. We shall
execute transactions for each of your customers only upon your
authorization, it being understood in all cases that (a) you are acting as
agent for the customer; (b) the transactions are without recourse against
you by the customer; (c) as between you and the customer, the customer will
have full beneficial ownership of the securities; (d) each transaction is
initiated solely upon the order of the customer; and (e) each transaction is
for the account of the customer and not for your account.
2. Orders received from you shall be accepted by us only at the public offering
price applicable to each order, as established by the then current
Prospectus of the appropriate Fund, subject to the discounts provided in
such Prospectus. Upon receipt from you of any order to purchase Shares we
shall confirm to you in writing or by wire to be followed by a confirmation
in writing, and we shall concurrently send to your customer a letter
confirming such order, together with a copy of the appropriate Fund's
current Prospectus. Additional instructions may be forwarded to you from
time to time. All orders are subject to acceptance or rejection by us in our
sole discretion.
3. Members of the general public, including your customers, may purchase Shares
only at the public offering price determined in the manner described in the
current Prospectus of the appropriate Fund. Shares will be offered at a
public offering price based upon the net asset value of such Shares plus,
with respect to certain class(es) of Shares, a sales charge which, together
with the amount of that sales charge to be retained by banks or bank-
affiliated broker-dealers acting as agent for their customers, is set forth
in the Prospectus. You may receive a distribution fee and/or a service fee
with respect to certain class(es) of Shares for which such fees are
applicable, as provided in the applicable Prospectus, which distribution fee
and/or service fee shall be payable for such periods and at such intervals
as are from time to time specified by us. Your placement of an order for
Shares after the date of any notice of such amendment shall conclusively
evidence your agreement to be bound thereby. Reduced sales charges may also
be available as a result of a cumulative discount or pursuant to a letter of
intent. Further information as to such reduced sales charges, if any, is set
forth in the appropriate Fund Prospectus. You agree to advise us promptly as
to the amounts of any sales made by or though you to the public qualifying
for reduced sales charges.
4. By accepting this Agreement, you agree:
(a) That you will purchase Shares only from us, and only to cover purchase
orders already received from your customers;
(b) That you will not withhold placing with us orders received from your
customers so as to profit yourself as a result of such withholding; and
(c) That, with respect to the sale of Shares of Funds that offer multiple
classes of Shares, you will comply with the terms of the Policies and
Procedures with Respect to Sales of Multiple Classes of Shares,
attached hereto as Exhibit A.
1
<PAGE>
5. We will not accept from you any conditional orders for Shares.
2
<PAGE>
6. Payment for Shares ordered from us shall be in New York clearing house funds
and must be received by the Funds' agent, Shareholder Services, Inc., P. O.
Box 5330, Denver, Colorado 80217-5330, within three business days after our
acceptance of your order. If such payment is not received, we reserve the
right, without notice, forthwith to cancel the sale or, at our option, to
cause the Fund to redeem the Shares ordered, in which case we may hold you
responsible for any loss, including loss of profit, suffered by us as result
of your or your customer's failure to make such payment. If any Shares
confirmed to you or your customer under the terms of this agreement are
repurchased by the issuing Fund or by us as agent for the Fund, or are
tendered for repurchase, within seven business days after the date of our
confirmation of the original purchase order, you shall promptly refund to us
the full discount, commission, or other concession, if any, allowed or paid
to you on such Shares.
7. Shares sold hereunder shall be available in book-entry form on the books of
Shareholder Services, Inc. unless other instructions have been given.
8. No person is authorized to make any representations concerning Shares of any
Fund except those contained in the applicable current Prospectus and printed
information issued by the appropriate Fund or by us as information
supplemental to such Prospectus. You agree that you will not offer or sell
any Shares except under circumstances that will result in compliance with
the applicable Federal and state securities laws and that in connection with
sales and offers to sell Shares you will furnish to each person to whom any
such sale or offer is made a copy of the then current Prospectus for the
appropriate Fund (as amended or supplemented) and will not furnish to any
persons any information relating to Shares which is inconsistent in any
respect with the information contained in the then current Prospectus or
cause any advertisement to be published in any newspaper or posted in any
public place without our consent and the consent of the appropriate Fund.
You shall be responsible for any required filing of such advertising.
9. All sales will be made subject to our receipt of Shares from the appropriate
Fund. We reserve the right, in our discretion, without notice, to modify,
suspend or withdraw entirely the offering of any Shares, and upon notice to
change the price, sales charge, or dealer discount or to modify, cancel or
change the terms of this agreement.
10. Your acceptance of this agreement constitutes a representation that you are
a registered securities broker-dealer and a member in good standing of the
National Association of Securities Dealers, Inc. and agree to comply with
all state and Federal laws, rules and regulations applicable to transactions
hereunder and with the Rules of Fair Practice of the NASD, including
specifically Section 26 of Article III thereof. You likewise agree that you
will not offer to sell Shares in any state or other jurisdiction in which
they may not lawfully be offered for sale. We agree to advise you currently
of the identity of those states and jurisdictions in which the Shares may
lawfully be offered for sale.
11. You shall provide such office space and equipment, telephone facilities,
personnel and literature distribution as is necessary or appropriate for
providing information and services to your customers. Such services and
assistance may include, but not be limited to, establishment and maintenance
of shareholder accounts and records, processing purchase and redemption
transactions, answering routine inquiries regarding the Funds, and such
other services as may be agreed upon from time to time and as may be
permitted by applicable statute, rule, or regulation. You shall perform
these services in good faith and with reasonable care. You shall immediately
inform the Funds or us of all written complaints received by you from Fund
shareholders relating to the maintenance of their accounts and shall
promptly answer all such complaints.
12. All communications to us should be sent to 333 W. Wacker Drive, Chicago,
Illinois 60606. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
13. This Agreement shall be construed in accordance with the laws of the State
of Illinois. This Agreement is subject to the Prospectuses of the Funds from
time to time in effect, and, in the event of a conflict, the terms of the
Prospectuses shall control. References herein to the "Prospectus" of a Fund
shall mean the prospectus and statement of additional information of such
Fund as from time to time in effect. Any changes, modifications or additions
reflected in any such Prospectus shall be effective on the date of such
Prospectus (or supplement thereto) unless specified otherwise. This
Agreement shall supersede any prior distribution agreement with respect to
the Funds.
3
<PAGE>
<TABLE>
<CAPTION>
John Nuveen & Co. Incorporated
| |
John Nuveen | |
Authorized Signature| |
___________________________________________________________________________________________________________
<S> <C>
We have read the foregoing agreement and accept and agree to the terms and
conditions therein.
Firm | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
___________________________________________________________________________________________________________
| |
| Month Day Year |
Authorized Signature | Date | | | |
__________________________________________________________________________________________________________
Print Name of Signature | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
Address | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
City | | | | | | | | | | | | | | | | | | | Zip| | | | | | | |
__________________________________________________________________________________________________________
Tax ID Number | | | | | | | | | | | | | NASD| | | | | | | | | | | | | | |
__________________________________________________________________________________________________________
</TABLE>
The above agreement should be executed in duplicate and both copies returned to
us for signature. We will return a fully executed copy to you for your files.
Please return the completed agreement to:
John Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illinois
60606-1286
4
<PAGE>
Exhibit A to Nuveen Mutual Funds
Dealer Distribution and
Shareholder Servicing Agreement
Policies and Procedures With Respect to
Sales of Multiple Classes of Funds
The Nuveen non-money market open-end mutual funds (the "Funds") have one or more
of the following classes of shares generally available to the public: Class A
Shares, which are normally subject to an up-front sales charge and a service
fee; Class B Shares, which are subject to an asset-based sales charge, a service
fee, and a declining contingent deferred sales charge ("CDSC"); and Class C
Shares, which are subject to an asset-based sales charge, a service fee, and a
12-month CDSC, it is important for an investor to choose the method of
purchasing shares which best suits his or her particular circumstances. To
assist investors in these decisions, John Nuveen & Co. Incorporated, underwriter
for the Nuveen Mutual Funds, has instituted the following policies with respect
to orders for Fund shares. These policies apply to each Authorized Dealer which
distributes Fund shares.
1. Purchase orders for a single purchaser equal to or exceeding $1,000,000
should be placed only for Class A shares, unless such purchase for Class B
or Class C Shares has been reviewed and approved by the Authorized Dealer's
appropriate supervisor.
2. Any purchase order for less than $1,000,000 may be for Class A, Class B or
Class C Shares in light of the relevant facts and circumstances, including:
a) the specific purchase order dollar amount;
b) the length of time the investor expects to hold his or her Shares;
c) whether the investor expects to reinvest dividends; and
d) any other relevant circumstances such as the availability of purchases
under a letter of intent, a combined discount or a cumulative discount,
as described in the Prospectus for the Fund, and any anticipated changes
in the funds net asset value per share.
There are instances when one method of purchasing Shares may be more appropriate
than the other. For example, investors who would qualify for a significant
discount from the maximum sales load on Class A Shares might determine that
payment of such a reduced up-front sales charge is preferable to the payment of
a higher ongoing distribution fee on Class B or Class C Shares. On the other
hand, investors who prefer not to pay an up-front sales charge may wish to defer
the sales charge by purchasing Class B or Class C Shares. Those who plan to
redeem their shares within 5 years might consider Class C Shares, particularly
if they do not expect to reinvest dividends in additional shares. Note that, if
an investor anticipates redeeming Class B Shares within a short period of time
such as one year, that investor may bear higher distribution expenses than if
Class A Shares had been purchased. In addition, investors who intend to hold
their shares for a significantly long time may not wish to bear the higher
ongoing-asset-based sales charges of Class B or Class C Shares, irrespective of
the fact that the CDSC that would apply to a redemption of Class B Shares is
reduced over time and is ultimately eliminated, and that the CDSC that would
apply to a redemption of Class C Shares is relatively short in duration and
small in amount.
Appropriate supervisory personnel within your organization must ensure that all
employees receiving investor inquiries about the purchase of shares of the Funds
advise the investor of the available pricing structures offered by the Funds and
the impact of choosing one method over another, including breakpoints and the
availability of letters of intent, combined purchases and cumulative discounts.
In some instances it may be appropriate for a supervisory person to discuss a
purchase with the investor.
These policies are effective immediately with respect to any order for the
purchase of shares of the Funds.
<PAGE>
October 4, 1996
<PAGE>
<TABLE>
<CAPTION>
Exhibit A (Page 2)
- -------------------------------------------
Nuveen Mutual Funds
------------------
CUSIP Quotron
Number Symbol
- ----------------------------------------------------------------------
Nuveen Tax-Free Money Market Funds
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nuveen Tax-Exempt Money Market Fund, Inc. 670634104 NUVXX
Nuveen Tax-Free Reserves, Inc. 670639103 NRFXX
Nuveen CA Tax-Free Money Market --
Service Portfolio 67062D303 NCTXX
Distribution Portfolio 67062D402 NCTXX
Institutional Portfolio 67062D501 NCTXX
Nuveen MA Tax-Free Money Market Fund --
Service Portfolio 670637107 NMAXX
Distribution Portfolio 670637206 NMAXX
Institutional Portfolio 670637305 NMAXX
Nuveen NY Tax-Free Money Market Fund --
Service Portfolio 670637404 NTFXX
Distribution Portfolio 670637503 NTFXX
Institutional Portfolio 670637602 NTFXX
- ----------------------------------------------------------------------
A SHARE B SHARE C SHARE R SHARE
-------------------------------------------------------------------------------
CUSIP Quotron CUSIP Quotron CUSIP Quotron CUSIP Quotron
Number Symbol Number Symbol Number Symbol Number Symbol
- ----------------------------------------------------------------------------------------------------------------------------------
Equity Mutual Funds
Nuveen Growth and Income Stock Fund 67064Y503 # 67064Y602 # 67064Y701 # 67064Y800 #
Nuveen Balanced Stock and Bond Fund 67064Y107 # 67064Y206 # 67064Y305 # 67064Y404 #
Nuveen Balanced Municipal and Stock Fund 67064Y883 # 67064Y875 # 67064Y867 # 67064Y859 #
Nuveen Flagship Utility Fund 33841G108 FUIAX - - 33841G306 FLUCX - -
Golden Rainbow Fund 33841G207 GLRBX - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Municipal Mutual Funds
Nuveen Municipal Bond Fund, Inc. 67065Q202 NMBAX 67065Q103 # 67065Q301 # 67065Q400 NUVBX
Nuveen Insured Municipal Bond Fund 67065Q509 NMBIX 67065Q608 # 67065Q707 # 67065Q806 NITNX
Nuveen Flagship All-American Tax Exempt Fund 67065Q889 FLAAX 67065Q871 # 67065Q863 FAACX 67065Q855 #
Nuveen Flagship Limited Term Tax Exempt Fund 67065Q848 FLTDX - - 67065Q830 FLTCX 67065Q822 #
Nuveen Flagship Intermediate Tax Exempt Fund 67065Q814 FINTX - - 67065Q798 FINCX 67065Q780 #
Nuveen Flagship AL Municipal Bond Fund 67065P105 FABTX 67065P204 # 67065P303 # 67065P402 #
Nuveen Flagship AZ Municipal Bond Fund 67065L104 FAZTX 67065L203 # 67065L302 FAZCX 67065L401 NMARX
Nuveen CA Municipal Bond Fund 67065N100 NCAAX* 67065N209 # 67065N308 # 67065N407 NCSPX
Nuveen CA Insured Municipal Bond Fund 67065N506 NCAIX* 67065N605 # 67065N704 # 67065N803 NCIBX
Nuveen Flagship CO Municipal Bond Fund 67065L609 FCOTX 67065L500 # 67065L807 # 67065L880 #
Nuveen Flagship CT Municipal Bond Fund 67065N886 FCTTX 67065N878 # 67065N860 FCTCX 67065N852 #
Nuveen Flagship FL Municipal Bond Fund 67065L708 FLOTX 67065L658 # 67065L641 NFLCX 67065L872 NMFLX
Nuveen Flagship FL Intermediate 67065L864 FIFAX - - 67065L856 FIFCX 67065L849 #
Municipal Bond Fund
Nuveen Flagship GA Municipal Bond Fund 67065P501 FGATX 67065P600 # 67065P709 FGACX 67065P808 #
Nuveen Flagship KS Municipal Bond Fund 67065R101 FKSTX 67065R200 # 67065R309 # 67065R408 #
Nuveen Flagship KY Municipal Bond Fund 67065R507 FKYTX 67065R606 # 67065R705 FKYCX 67065R804 #
Nuveen Flagship KY Limited Term 67065R887 FLKAX - - 67065R879 FLKCX 67065R861 #
Municipal Bond Fund
Nuveen Flagship LA Municipal Bond Fund 67065P881 FTLAX 67065P873 # 67065P865 FTLCX 67065P857 #
Nuveen MD Municipal Bond Fund 67065L831 NMDAX* 67065L823 # 67065L815 # 67065L799 NMMDX
Nuveen MA Municipal Bond Fund 67065N845 NMAAX* 67065N837 # 67065N829 # 67065N811 NBMAX
Nuveen MA Insured Municipal Bond Fund 67065N795 NMAIX* 67065N787 # 67065N779 # 67065N761 NIMAX
Nuveen Flagship MI Municipal Bond Fund 67065R853 FMITX 67065R846 # 67065R838 FLMCX 67065R820 NMMIX
Nuveen Flagship MO Municipal Bond Fund 67065R812 FMOTX 67065R796 # 67065R788 FMOCX 67065R770 #
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A (Page 3)
- --------------------------------------
Nuveen Mutual Funds
A SHARE B SHARE C SHARE R SHARE
-------------------------------------------------------------------------------
CUSIP Quotron CUSIP Quotron CUSIP Quotron CUSIP Quotron
Number Symbol Number Symbol Number Symbol Number Symbol
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Municipal Mutual Funds (cont.)
Nuveen Flagship NJ Municipal Bond Fund 67065N753 NNJAX 67065N746 # 67065N738 NNJCX 67065N720 NMNJX
Nuveen Flagship NJ Intermediate Municipal Bond Fund 67065N712 FNJIX - - 67065N696 # 67065N688 #
Nuveen Flagship NM Municipal Bond Fund 67065L781 FNMTX 67065L773 # 67065L765 # 67065L757 #
Nuveen Flagship NY Municipal Bond Fund 67065N670 NNYAX* 67065N662 # 67065N654 NNYCX 67065N647 NTNYX
Nuveen NY Insured Municipal Bond Fund 67065N639 NNYIX* 67065N621 # 67065N613 # 67065N597 NINYX
Nuveen Flagship NC Municipal Bond Fund 67065P840 FLNCX 67065P832 # 67065P824 FCNCX 67065P816 #
Nuveen Flagship OH Municipal Bond Fund 67065R762 FOHTX 67065R754 # 67065R747 FOHCX 67065R739 NXOHX
Nuveen Flagship PA Municipal Bond Fund 67065L740 FPNTX 67065L732 # 67065L724 FPNCX 67065L716 NBPAX
Nuveen Flagship SC Municipal Bond Fund 67065P790 FLSCX 67065P782 # 67065P774 # 67065P766 #
Nuveen Flagship TN Municipal Bond Fund 67065P758 FTNTX 67065P741 # 67065P733 FTNCX 67065P725 #
Nuveen Flagship VA Municipal Bond Fund 67065L690 FVATX 67065L682 # 67065L674 FVACX 67065L666 NMVAX
Nuveen Flagship WI Municipal Bond Fund 67065R721 FWIAX 67065R713 # 67065R697 # 67065R689 #
</TABLE>
# Will receive a supplemental listing when the number of class shareholder
accounts is 300 or when the class asset base reaches $1 million.
NOTE: A Quotron Symbol requires 1,000 shareholder accounts or $25 million in
assets.
*Denotes supplemental listing only
<PAGE>
Exhibit 8
CUSTODY AGREEMENT
=================
THIS AGREEMENT is made this th day of , 1997 by and between NUVEEN
INVESTMENT TRUST II (the "Fund"), and THE CHASE MANHATTAN BANK.
W I T N E S S E T H
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interest in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund intends to initially offer shares in one series, Nuveen
Rittenhouse Growth Fund (such series together with all other series subsequently
established by the Fund and made subject to this Contract in accordance with
paragraph 33, being herein referred to as the "Fund(s)"):
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints The Chase Manhattan Bank to act
-----------
as custodian of its portfolio securities, cash and other property on the terms
set forth in this Agreement. The Chase Manhattan Bank accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Section 23 of this Agreement.
2. Delivery of Documents. The Fund has furnished The Chase Manhattan Bank
---------------------
with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Trustees authorizing the appointment
of The Chase Manhattan Bank as Custodian of the portfolio securities, cash and
other property of the Fund and approving this Agreement;
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(b) Incumbency and signature certificates identifying and containing the
signatures of the Fund's officers and/or the persons authorized to sign Proper
Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Declaration of Trust filed with the Commonwealth of
Massachusetts and all amendments thereto (such Declaration of Trust as currently
in effect and from time to time, be amended, are herein called the
"Declaration");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws"),
(e) Resolutions of the Fund's Board of Trustees appointing the investment
advisor of the Fund and resolutions of the Fund's Board of Trustees and the
Fund's Shareholders approving the proposed Investment Advisory Agreement between
the Fund and the advisor (the "Advisory Agreement");
(f) The Advisory Agreement
(g) The Fund's Registration Statement on Form N-1A under the 1940 Act and
the Securities Act of 1933, as amended ("the 1933 Act") as filed with the SEC;
and
(h) The Fund's most recent prospectus and statement of additional
information including all amendments and supplements thereto (the "Prospectus").
Upon request the Fund will furnish The Chase Manhattan Bank with copies of
all amendments of or supplements to the foregoing, if any. The Fund will also
furnish The Chase Manhattan Bank upon request with a copy of the opinion of
counsel for the Fund with respect to the validity of the Shares and the status
of such Shares under the 1933 Act filed with the SEC, and any other applicable
federal law or regulation.
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3. Definitions.
-----------
(a) "Authorized Person". As used in this Agreement, the term "Authorized
Person" means the Fund's President, Treasurer and any other person, whether or
not any such person is an officer or employee of the Fund, duly authorized by
the Board of Trustees of the Fund to give Proper Instructions on behalf of the
Fund as set forth in resolutions of the Fund's Board of Trustees.
(b) "Book-Entry System". As used in this Agreement, the term "Book-Entry
System" means a book-entry system authorized by the U.S. Department of Treasury,
its successor or successors and its nominee or nominees.
(c) "Proper Instructions". Proper Instructions as used herein means a
writing signed or initialled by two or more persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if The Chase Manhattan Bank reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall cause all
such oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the authorization
by the Board of Trustees of the Fund accompanied by a detailed description of
procedures approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and The Chase Manhattan Bank are
satisfied that such procedures afford adequate safeguards for the Fund's assets.
For purposes of this Section, Proper Instructions shall include instructions
received by The Chase Manhattan Bank pursuant to any three-party agreement which
requires a segregated asset account in accordance with Section 9.
(d) "Property". The term "Property", as used in this Agreement, means:
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(i) any and all securities and other property of the Fund which the Fund
may from time to time deposit, or cause to be deposited, with The Chase
Manhattan Bank or which The Chase Manhattan Bank may from time to time hold
for the Fund;
(ii) all income in respect of any such securities or other property;
(iii) all proceeds of the sales of any of such securities or other
property; and
(iv) all proceeds of the sale of securities issued by the Fund, which are
received by The Chase Manhattan Bank from time to time from or on behalf of
the Fund.
(e) "Securities Depository". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Company's Board of Trustees approving deposits by The Chase
Manhattan Bank therein.
4. Delivery and Registration of the Property. The Fund will deliver or
-----------------------------------------
cause to be delivered to The Chase Manhattan Bank all securities and all moneys
owned by it, including payments of interest, principal and capital distributions
and cash received for the issuance of its Shares, at any time during the period
of this Agreement, except for securities and monies to be delivered to any
subcustodian appointed pursuant to Section 7 hereof. The Chase Manhattan Bank
will not be responsible for such securities and such monies until actually
received by it. All securities delivered to The Chase Manhattan Bank or to any
such subcustodian (other than in bearer form) shall be registered in the name of
the Fund or in the name of a nominee of the Fund or in the name of The Chase
Manhattan Bank or any nominee of The Chase Manhattan Bank (with or without
indication of fiduciary
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status) or in the name of any subcustodian or any nominee of such subcustodian
appointed pursuant to Paragraph 7 hereof or shall be properly endorsed and in
form for transfer satisfactory to The Chase Manhattan Bank.
5. Voting Rights. With respect to all securities, however registered, it
-------------
is understood that the voting and other rights and powers shall be exercised by
the Fund. The Chase Manhattan Bank's only duty shall be to mail for delivery on
the next business day to the Fund any documents received, including proxy
statements and offering circulars, with any proxies for securities registered in
a nominee name executed by such nominee. Where warrants, options, tenders or
other securities have fixed expiration dates, the Fund understands that in order
for The Chase Manhattan Bank to act, The Chase Manhattan Bank must receive the
Fund's instructions at its offices in New York, addressed as The Chase Manhattan
Bank may from time to time request, by no later than noon (NY City time) at
least one business day prior to the last scheduled date to act with respect
thereto (or such earlier date or time as The Chase Manhattan Bank may reasonably
notify the Fund). Absent The Chase Manhattan Bank's timely receipt of such
instructions, such instruments will expire without liability to The Chase
Manhattan Bank.
6. Receipt and Disbursement of Money.
---------------------------------
(a) The Chase Manhattan Bank shall open and maintain a custody account for
the Fund, subject only to draft or order by The Chase Manhattan Bank acting
pursuant to the terms of this Agreement, and shall hold in such account, subject
to the provisions hereof, all cash received by it from or for the Fund other
than cash maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the 1940 Act. Funds held by The Chase
Manhattan Bank for the Fund may be deposited by it to its credit at The Chase
Manhattan Bank in the Banking Department of The Chase Manhattan Bank or in such
other banks or trust companies as it may in its discretion deem necessary or
desirable; provided,
5
<PAGE>
however, that every such bank or trust company shall be qualified to act as a
custodian under the 1940 Act, and that each such bank or trust company shall be
approved by vote of a majority of the Board of Trustees of the Fund. Such funds
shall be deposited by The Chase Manhattan Bank in its capacity as Custodian and
shall be withdrawable by The Chase Manhattan Bank only in that capacity.
(b) Upon receipt of Proper Instructions (which may be continuing
instructions as deemed appropriate by the parties) The Chase Manhattan Bank
shall make payments of cash to, or for the account of, the Fund from such cash
only (i) for the purchase of securities, options, futures contracts or options
on futures contracts for the Fund as provided in Section 13 hereof; (ii) in the
case of a purchase of securities effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set forth in Section 8
hereof; (iii) in the case of repurchase agreements entered into between the Fund
and The Chase Manhattan Bank, or another bank, or a broker-dealer which is a
member of The National Association of Securities Dealers, Inc. ("NASD"), either
(a) against delivery of the securities either in certificate form or through an
entry crediting The Chase Manhattan Bank's account at the Federal Reserve Bank
with such securities or (b) against delivery of the receipt evidencing purchase
by the Fund of securities owned by The Chase Manhattan Bank along with written
evidence of the agreement by The Chase Manhattan Bank to repurchase such
securities from the Fund; (iv) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such transfer may be effected
prior to receipt of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund; (v) for the payment of dividends
or other distributions on shares declared pursuant to the governing documents of
the Fund, or for the payment of interest, taxes, administration, distribution or
advisory fees or expenses which are to be borne by the Fund under the terms of
this Agreement, any Advisory Agreement, or any
6
<PAGE>
administration agreement; (vi) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Fund and held
by or to be delivered to The Chase Manhattan Bank; (vii) to a subcustodian
pursuant to Section 7 hereof; (viii) for such common expenses incurred by the
Fund in the ordinary course of its business, including but not limited to
printing and mailing expenses, legal fees, accountants fees, exchange fees; or
(ix) for any other proper purpose, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of Trustees
or of the Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
(c) The Chase Manhattan Bank is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money received as
custodian for the Fund.
6A. Advances by Custodian. The Custodian may from time to time agree to
advance cash to the Fund, without interest, for the fund's other proper
corporate purposes. If the Custodian advances cash for any purpose, the Fund
shall and hereby does grant to the Custodian a security interest in Fund
securities equal in value to the amount of the cash advance but in no event
shall the value of securities in which a security interest has been granted
exceed 20% of the value of the Fund's total assets at the time of the pledge;
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to reasonably dispose of any securities
in which it has a security interest to the extent necessary to obtain
reimbursement.
7
<PAGE>
7. Receipt and Delivery of Securities.
----------------------------------
(a) Except as provided by Section 8 hereof, The Chase Manhattan Bank shall
hold and physically segregate all securities and noncash Property received by it
for the Fund. All such securities and non-cash Property are to be held or
disposed of by The Chase Manhattan Bank for the Fund pursuant to the terms of
this Agreement. In the absence of Proper Instructions accompanied by a certified
resolution authorizing the specific transaction by the Fund's Board, The Chase
Manhattan Bank shall have no power or authority to withdraw, deliver, assign,
hypothecate, pledge or otherwise dispose of any such securities and investments,
except in accordance with the express terms provided for in this Agreement. In
no case may any director, officer, employee or agent of the Fund withdraw any
securities. In connection with its duties under this Section 7, The Chase
Manhattan Bank may, at its own expense, enter into subcustodian agreements with
other banks or trust companies for the receipt of certain securities and cash to
be held by The Chase Manhattan Bank for the account of the Fund pursuant to this
Agreement; provided that each such bank or trust company has an aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000) and that such bank or
trust company agrees with The Chase Manhattan Bank to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder. The
Chase Manhattan Bank will be liable for acts or omissions of any subcustodian.
The Chase Manhattan Bank shall employ sub-custodians upon receipt of Proper
Instructions, but only in accordance with an applicable vote by the Board of
Trustees of the Fund.
(b) Promptly after the close of business on each day The Chase Manhattan
Bank shall furnish the Fund with confirmations and a summary of all transfers to
or from the account of the Fund during said day. Where securities are
transferred to the account of the Fund established at a Securities Depository or
Book Entry
8
<PAGE>
System pursuant to Section 8 hereof, The Chase Manhattan Bank shall also by
book-entry or otherwise identify as belonging to such Fund the quantity of
securities in a fungible bulk of securities registered in the name of The Chase
Manhattan Bank (or its nominee) or shown in The Chase Manhattan Bank's account
on the books of a Securities Depository or Book-Entry System. At least monthly
and from time to time, The Chase Manhattan Bank shall furnish the Fund with a
detailed statement of the Property held for the Fund under this Agreement.
8. Use of Securities Depository or Book-Entry System. The Fund shall
-------------------------------------------------
deliver to The Chase Manhattan Bank a certified resolution of the Board of
Trustees of the Fund approving, authorizing and instructing The Chase Manhattan
Bank on a continuous and ongoing basis until instructed to the contrary by
Proper Instructions actually received by The Chase Manhattan Bank (i) to deposit
in a Securities Depository or Book-Entry System all securities of the Fund
eligible for deposit therein and (ii) to utilize a Securities Depository or
Book-Entry System to the extent possible in connection with the performance of
its duties hereunder, including without limitation settlements of purchases and
sales of securities by the Fund, and deliveries and returns of securities
collateral in connection with borrowings. Without limiting the generality of
such use, it is agreed that the following provisions shall apply thereto:
(a) Securities and any cash of the Fund deposited in a Securities
Depository or Book-Entry System will at all times (1) be represented in an
account of The Chase Manhattan Bank in the Securities Depository or Book Entry
System (the "Account") and (2) be segregated from any assets and cash controlled
by The Chase Manhattan Bank in other than a fiduciary or custodian capacity but
may be commingled with other assets held in such capacities. The Chase Manhattan
Bank will effect payment for securities and receive and deliver securities in
accordance with accepted industry practices as set forth in (b) below, unless
the Fund has given
9
<PAGE>
The Chase Manhattan Bank Proper Instructions to the contrary. The records of The
Chase Manhattan Bank with respect to securities of the Fund maintained in a
Securities Depository or Book Entry System shall identify by book entry those
securities belonging to the Fund.
(b) The Chase Manhattan Bank shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the Securities Depository or
Book Entry System that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of The Chase Manhattan Bank to
reflect such payment and transfer for the account of the Fund. Upon receipt of
Proper Instructions, The Chase Manhattan Bank shall transfer securities sold for
the account of the Fund upon (i) receipt of advice from the Securities
Depository or Book Entry System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the records of
The Chase Manhattan Bank to reflect such transfer and payment for the account of
the Fund. Copies of all advices from the Securities Depository or Book Entry
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by The Chase Manhattan Bank and be provided to
the Fund at its request. Upon request, The Chase Manhattan Bank shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in a Securities Depository
or Book Entry System for the account of the Fund.
(c) The Chase Manhattan Bank shall provide the Fund with any report
obtained by The Chase Manhattan Bank on the Securities Depository or Book Entry
System's accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities Depository or Book Entry
System;
10
<PAGE>
(d) All Books and records maintained by The Chase Manhattan Bank which
relate to the Fund participation in a Securities Depository or Book-Entry System
will at all times during The Chase Manhattan Bank's regular business hours be
open to the inspection of the Fund's duly authorized employees or agents, and
the Fund will be furnished with all information in respect of the services
rendered to it as it may require.
(e) Anything to the contrary in this Agreement notwithstanding, The Chase
Manhattan Bank shall be liable to the Fund for any loss or damage to the Fund
resulting from any negligence, misfeasance or misconduct of The Chase Manhattan
Bank or any of its agents or of any of its or their employees in connection with
its or their use of the Securities Depository or Book Entry Systems or from
failure of The Chase Manhattan Bank or any such agent to enforce effectively
such rights as it may have against such Securities Depository or Book Entry
System; at the election of the Fund, it shall be entitled to be subrogated to
the rights of The Chase Manhattan Bank with respect to any claim against the
Securities Depository or Book Entry System or any other person which The Chase
Manhattan Bank may have as a consequence of any such loss or damage if and to
the extent that the Fund has not been made whole for any such loss or damage.
9. Segregated Account. The Chase Manhattan Bank shall upon receipt of
------------------
Proper Instructions establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by The
Chase Manhattan Bank pursuant to Section 8 hereof, (i) in accordance with the
provisions of any agreement among the Fund, The Chase Manhattan Bank and a
broker dealer registered under the Securities and Exchange Act of 1934 and a
member of the NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing
11
<PAGE>
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for purposes of
segregating cash or government securities in connection with options purchased,
sold or written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in the case of
clause (iv), upon receipt of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
10. Instructions Consistent With The Declaration, etc.
--------------------------------------------------
(a) Unless otherwise provided in this Agreement, The Chase Manhattan Bank
shall act only upon Proper Instructions. The Chase Manhattan Bank may assume
that any Proper Instructions received hereunder are not in any way inconsistent
with any provision of the Declaration or By-Laws or any vote or resolution of
the Fund's Board of Trustees or any committee thereof. The Chase Manhattan Bank
shall be entitled to rely upon any Proper Instructions actually received by The
Chase Manhattan Bank pursuant to this Agreement. The Fund agrees that The Chase
Manhattan Bank shall incur no liability in acting in good faith upon Proper
Instructions given to The Chase Manhattan Bank, except to the extent such
liability was incurred as a result of The Chase Manhattan Bank's negligence or
willful misconduct. In accord with instructions from the Fund, as
12
<PAGE>
required by accepted industry practice or as The Chase Manhattan Bank may elect
in effecting the execution of Fund instructions, advances of cash or other
Property made by The Chase Manhattan Bank, arising from the purchase, sale,
redemption, transfer or other disposition of Property of the Fund, or in
connection with the disbursement of funds to any party, or in payment of fees,
expenses, claims or liabilities owed to The Chase Manhattan Bank by the Fund, or
to any other party which has secured judgment in a court of law against the Fund
which creates an overdraft in the accounts or over-delivery of Property, shall
be deemed a loan by The Chase Manhattan Bank to the Fund, payable on demand,
bearing interest at such rate customarily charged by The Chase Manhattan Bank
for similar loans.
(b) The Fund agrees that test arrangements, authentication methods or other
security devices to be used with respect to instructions which the Fund may give
by telephone, telex, TWX, facsimile transmission, bank wire or other
teleprocess, or through an electronic instruction system, shall be processed in
accordance with terms and conditions for the use of such arrangements, methods
or devices as The Chase Manhattan Bank may put into effect and modify from time
to time. The Fund shall safeguard any test keys, identification codes or other
security devices which The Chase Manhattan Bank makes available to the Fund and
agrees that the Fund shall be responsible for any loss, liability or damage
incurred by The Chase Manhattan Bank or by the Fund as a result of The Chase
Manhattan Bank's acting in accordance with instructions from any unauthorized
person using the proper security device except to the extent such loss,
liability or damage was incurred as a result of The Chase Manhattan Bank's
negligence or willful misconduct. The Chase Manhattan Bank may electronically
record, but shall not be obligated to so record, any instructions given by
telephone and any other telephone discussions with respect to the Fund. In the
event that the Fund uses The Chase Manhattan Bank's Asset Management system or
any successor electronic
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communications or information system, the Fund agrees that The Chase Manhattan
Bank is not responsible for the consequences of the failure of that system to
perform for any reason, beyond the reasonable control of The Chase Manhattan
Bank, or the failure of any communications carrier, utility, or communications
network. In the event that system is inoperable, the Fund agrees that it will
accept the communication of transaction instructions by telephone, facsimile
transmission on equipment compatible to The Chase Manhattan Bank's facsimile
receiving equipment or by letter, at no additional charge to the Fund.
(c) The Chase Manhattan Bank shall transmit promptly to the Fund all
written information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund and the maturity
of futures contracts purchased or sold by the Fund) received by The Chase
Manhattan Bank from issuers of the securities being held for the Fund. With
respect to tender or exchange offers, The Chase Manhattan Bank shall transmit
promptly by facsimile to the Fund all written information received by The Chase
Manhattan Bank from issuers of the securities whose tender or exchange is sought
and from the party (or his agents) making the tender or exchange offer. If the
Fund desires to take action with respect to any tender offer, exchange offer or
any other similar transaction, the Fund shall notify The Chase Manhattan Bank at
least three business days prior to the date on which The Chase Manhattan Bank is
to take such action or upon the date such notification is first received by the
Fund, if later. If any Property registered in the name of a nominee of The Chase
Manhattan Bank is called for partial redemption by the issuer of such property,
The Chase Manhattan Bank is authorized to allot the called portion to the
respective beneficial holders of the Property in such manner deemed to be fair
and equitable by The Chase Manhattan Bank in its sole discretion.
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11. Transactions Not Requiring Instructions. The Chase Manhattan Bank is
---------------------------------------
authorized to take the following action without Proper Instructions:
(a) Collection of Income and Other Payments. The Chase Manhattan Bank
---------------------------------------
shall:
(i) collect and receive on a timely basis for the account of the
Fund, all income and other payments and distributions, including
(without limitation) stock dividends, rights, warrants and similar
items, included or to be included in the Property of the Fund, and
promptly advise the Fund of such receipt and shall credit such income,
as collected, to the Fund. From time to time, The Chase Manhattan Bank
may elect, but shall not be obligated, to credit the account with
interest, dividends or principal payments on payable or contractual
settlement date, in anticipation of receiving same from a payor,
central depository, broker or other agent employed by the Fund or The
Chase Manhattan Bank. Any such crediting and posting shall be at the
Fund's sole risk, and The Chase Manhattan Bank shall be authorized to
reverse any such advance posting in the event it does not receive good
funds from any such payor, central depository, broker or agent of the
Customer. The Chase Manhattan Bank agrees to promptly notify the Fund
of the reversal of any such advance posting.
(ii) endorse and deposit for collection in the name of the Fund,
checks, drafts, or other orders for the payment of money on the same
day as received;
(iii) receive and hold for the account of the Fund all securities
received by the Fund as a result of a stock dividend, share split-up
or reorganization, merger, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued
15
<PAGE>
with respect to any portfolio securities of the Fund held by The Chase
Manhattan Bank hereunder;
(iv) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;
(v) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts and
other negotiable instruments;
(vi) to effect an exchange of the securities where the par value
is changed, and to surrender securities at maturity or upon an earlier
call for redemption, or when securities otherwise become payable,
against payment therefore in accordance with accepted industry
practice. If any Property registered in the name of a nominee of The
Chase Manhattan Bank is called for partial redemption by the issuer of
such property, The Chase Manhattan Bank is authorized to allot the
called portion to the respective beneficial holders of the Property in
such manner deemed to be fair and equitable by The Chase Manhattan
Bank in its sole discretion.
(b) Miscellaneous Transactions. The Chase Manhattan Bank is authorized to
--------------------------
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor for examination by a dealer selling for the account
of the Fund in accordance with street delivery custom.
12. Transactions Requiring Instructions. In addition to the actions
-----------------------------------
requiring Proper Instructions set forth herein, upon receipt of Proper
Instructions and not otherwise, The Chase Manhattan Bank, directly or through
the use of a Securities Depository or Book-Entry System, shall:
16
<PAGE>
(a) Execute and deliver to such persons as may be designated in such
Proper Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities may be
exercised;
(b) Deliver any securities held for the Fund against receipt of other
securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
issuer of securities or corporation, or the exercise of any conversion
privilege;
(c) Deliver any securities held for the Fund to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
issuer of securities or corporation, against receipt of such certificates of
deposit, interim receipts or other instruments or documents, and cash, if any,
as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund and take
such other steps as shall be stated in said instructions to be for the purpose
of effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(e) Release securities belonging to the Fund to any bank or trust company
for the purpose of pledge or hypothecation to secure any loan incurred by the
Fund; provided, however, that securities shall be released only upon payment to
The Chase Manhattan Bank of the monies borrowed, or upon receipt of adequate
collateral as agreed upon by the Fund and The Chase Manhattan Bank which may be
in the form of cash or obligations issued by the U.S. government, its agencies
or instrumentalities, except that in cases where additional collateral is
required to secure a borrowing already made, subject to proper prior
authorization, further securities may be released for that purpose; and pay such
loan upon re-delivery to it
17
<PAGE>
of the securities pledged or hypothecated therefore and upon surrender of the
note or notes evidencing the loan; and
(f) Deliver securities in accordance with the provisions of any agreement
among the Fund, The Chase Manhattan Bank and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Funds;
(g) Deliver securities in accordance with the provisions of any agreement
among the Fund, The Chase Manhattan Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any Contract Market, or
any similar organization or organizations, regarding account deposits in
connection with transactions by the Fund; and
(h) Deliver securities against payment or other consideration or written
receipt therefore for transfer of securities into the name of the Fund or The
Chase Manhattan Bank or a nominee of either, or for exchange or securities for a
different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to The Chase Manhattan Bank;
(i) Exchange securities in temporary form for securities in definitive
form;
(j) Surrender, in connection with their exercise, warrants, rights or
similar securities, provided that in each case, the new securities and cash, if
any, are to be delivered to The Chase Manhattan Bank;
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(k) Deliver securities upon receipt of payment in connection with any
repurchase agreement related to such securities entered into by the Fund;
(l) Deliver securities pursuant to any other proper corporate purpose, but
only upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee signed by an
officer of the Funds and certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made.
13. Purchase of Securities. Promptly after each purchase of securities,
----------------------
options, futures contracts or options on futures contracts by the investment
advisor, the Fund shall deliver to The Chase Manhattan Bank (as Custodian)
Proper Instructions specifying with respect to each such purchase: (a) the name
of the issuer and the title of the securities, (b) the number of shares of the
principal amount purchased and accrued interest, if any, (c) the dates of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase, (f) the name of the person from whom or the broker
through whom the purchase was made and (g) the Fund name. The Chase Manhattan
Bank shall upon receipt of securities purchased by or for the Fund registered in
the name of the Fund or in the name of a nominee of The Chase Manhattan Bank or
of the Fund or in proper form for transfer or upon receipt of evidence of title
to options, futures contracts or options on futures contracts purchased by the
Fund, pay out of the moneys held for the account of the Fund the total amount
payable to the person from whom or the broker through whom the purchase was
made, provided that the same conforms to the total amount payable as set forth
in such Proper Instructions. Except as specifically stated otherwise in this
Agreement, in any and every case where payment for purchase of securities for
the account of the Fund is made by
19
<PAGE>
The Chase Manhattan Bank in advance of receipt of the securities purchased in
the absence of specific written instructions from the Fund to so pay in advance,
The Chase Manhattan Bank shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by The
Chase Manhattan Bank.
14. Sale of Securities. Promptly after each sale of securities by the
------------------
Fund at the instruction of the investment advisor, the Fund shall deliver to The
Chase Manhattan Bank (as Custodian) Proper Instructions, specifying with respect
to each such sale; (a) the name of the issuer and the title of the security, (b)
the number of shares or principal amount sold, and accrued interest, if any, (c)
the date of sale, (d) the sale price per unit, (e) the total amount payable to
the Fund upon such sale, (f) the name of the broker through whom or the person
to whom the sale was made and (g) the Fund name. The Chase Manhattan Bank shall
deliver the securities upon receipt of the total amount payable to the Fund upon
such sale, provided that the same conforms to the total amount payable as set
forth in such Proper Instructions. Subject to the foregoing, The Chase Manhattan
Bank may accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
15. Not In Use.
----------
16. Records. The books and records pertaining to the Fund which are in
-------
the possession of The Chase Manhattan Bank shall be the property of the Fund.
Such books and records shall be prepared and maintained as required by the 1940
Act, as amended, and other applicable securities laws and rules and regulations.
The Fund, or the Fund's authorized representative, shall have access to such
books and records at all times during The Chase Manhattan Bank's normal business
hours, and such books and records shall be surrendered to the Fund promptly upon
request. Upon reasonable request of the Fund, copies of any such books and
records
20
<PAGE>
shall be provided by The Chase Manhattan Bank to the Fund or the Fund's
authorized representative at the Fund's expense.
17. Cooperation with Accountants. The Chase Manhattan Bank shall
----------------------------
cooperate with the Fund's independent certified public accountants and shall
take all reasonable action in the performance of its obligations under this
Agreement to assure that the necessary information is made available to such
accountants for the expression of their unqualified opinion, including but not
limited to the opinion included in the Fund's Form N-1A, Form N-SAR and other
reports to the Securities and Exchange Commission and with respect to any other
requirement of such Commission.
18. Reports to Fund by Independent Public Accountants. The Chase
-------------------------------------------------
Manhattan Bank shall provide the Fund, at such times as the Fund may reasonably
require, with reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including securities
deposited and/or maintained in a Securities Depository or Book Entry System,
relating to the services provided by The Chase Manhattan Bank under this
Contract; such reports, shall be of sufficient scope and in sufficient detail,
as may reasonably be required by the Fund to provide reasonable assurance that
any material inadequacies would be disclosed by such examination, and, if there
are no such inadequacies, the reports shall so state.
19. Confidentiality. The Chase Manhattan Bank agrees on behalf of itself
---------------
and its employees to treat confidentially and as the proprietary information of
the Fund all records and other information relative to the Fund and its prior,
present or potential Shareholders and relative to the advisors and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after
21
<PAGE>
prior notification to and approval in writing by the Fund, which approval shall
not be unreasonably withheld and may not be withheld where The Chase Manhattan
Bank may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. Nothing contained herein,
however, shall prohibit The Chase Manhattan Bank from advertising or soliciting
the public generally with respect to other products or services, regardless of
whether such advertisement or solicitation may include prior, present or
potential Shareholders of the Fund.
20. Equipment Failures. In the event of equipment failures beyond The
------------------
Chase Manhattan Bank's control, The Chase Manhattan Bank shall, at no additional
expense to the Fund, take reasonable steps to minimize service interruptions but
shall not have liability with respect thereto. The Chase Manhattan Bank shall
enter into and shall maintain in effect with appropriate parties one or more
agreements making reasonable provisions for back up emergency use of electronic
data processing equipment to the extent appropriate equipment is available.
21. Right to Receive Advice.
-----------------------
(a) Advice of Fund. If The Chase Manhattan Bank shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Fund clarification or advice.
(b) Advice of Counsel. If The Chase Manhattan Bank shall be in doubt as
to any question of law involved in any action to be taken or omitted by The
Chase Manhattan Bank, it may request advice at its own cost from counsel of its
own choosing (who may be counsel for the Fund or The Chase Manhattan Bank, at
the option of The Chase Manhattan Bank).
(c) Conflicting Advice. In case of conflict between directions or advice
received by The Chase Manhattan Bank pursuant to sub-paragraph (a) of this
22
<PAGE>
paragraph and advice received by The Chase Manhattan Bank pursuant to
subparagraph (b) of this paragraph, The Chase Manhattan Bank shall be entitled
to rely on and follow the advice received pursuant to the latter provision
alone.
(d) Protection of The Chase Manhattan Bank. The Chase Manhattan Bank
shall be protected in any action or inaction which it takes or omits to take in
reliance on any directions or advice received pursuant to subparagraphs (a) or
(b) of this section which The Chase Manhattan Bank, after receipt of any such
directions or advice, in good faith believes to be consistent with such
directions or advice. However, nothing in this paragraph shall be construed as
imposing upon The Chase Manhattan Bank any obligation (i) to seek such
directions or advice, or (ii) to act in accordance with such directions or
advice when received, unless, under the terms of another provision of this
Agreement, the same is a condition to The Chase Manhattan Bank's properly taking
or omitting to take such action. Nothing in this subsection shall excuse The
Chase Manhattan Bank when an action or omission on the part of The Chase
Manhattan Bank constitutes willful misfeasance, bad faith, negligence or
reckless disregard by The Chase Manhattan Bank of its duties under this
Agreement.
22. Compliance with Governmental Rules and Regulations. The Fund assumes
--------------------------------------------------
full responsibility for insuring that the contents of each Prospectus of the
Fund complies with all applicable requirements of the 1933 Act, the 1940 Act,
and any laws, rules and regulations of governmental authorities having
jurisdiction.
23. Compensation. As compensation for the services rendered by The Chase
------------
Manhattan Bank during the term of this Agreement, the Fund will pay to The Chase
Manhattan Bank, in addition to reimbursement of its out-of-pocket expenses,
monthly fees as outlined in Exhibit A.
24. Indemnification. The Fund, as sole owner of the Property, agrees to
---------------
indemnify and hold harmless The Chase Manhattan Bank and its nominees from all
23
<PAGE>
taxes, charges, expenses, assessments, claims, and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the Securities
Exchange Act of 1934, the 1940 Act, and any state and foreign securities and
blue sky laws, all as or to be amended from time to time) and expenses,
including (without limitation) attorney's fees and disbursements (hereafter
"liabilities and expenses"), arising directly or indirectly from any action or
thing which The Chase Manhattan Bank takes or does or omits to take or do (i) at
the request or on the direction of or in reliance on the advice of the Fund, or
(ii) upon Proper Instructions, provided, that neither The Chase Manhattan Bank
nor any of its nominees or sub-custodians shall be indemnified against any
liability to the Fund or to its Shareholders (or any expenses incident to such
liability) arising out of (x) The Chase Manhattan Bank's or such nominee's or
sub-custodian's own willful misfeasance, bad faith, negligence or reckless
disregard of its duties under this Agreement or any agreement between The Chase
Manhattan Bank and any nominee or subcustodian or (y) The Chase Manhattan Bank's
own negligent failure to perform its duties under this Agreement. The Chase
Manhattan Bank similarly agrees to indemnify and hold harmless the Fund from all
liabilities and expenses arising directly or indirectly from The Chase Manhattan
Bank's or such nominee's or sub-custodian's willful misfeasance, bad faith,
negligence or reckless disregard in performing its duties under this agreement.
In the event of any advance of cash for any purpose made by The Chase Manhattan
Bank resulting from orders or Proper Instructions of the Fund, or in the event
that The Chase Manhattan Bank or its nominee or subcustodian shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's or sub-custodian's own negligent action, negligent failure
to act, willful misconduct, or reckless disregard, the Fund shall
24
<PAGE>
promptly reimburse The Chase Manhattan Bank for such advance of cash or such
taxes, charges, expenses, assessments claims or liabilities.
25. Responsibility of The Chase Manhattan Bank. In the performance of its
------------------------------------------
duties hereunder, The Chase Manhattan Bank shall be obligated to exercise care
and diligence and to act in good faith to insure the accuracy and completeness
of all services performed under this Agreement. The Chase Manhattan Bank shall
be responsible for its own negligent failure or that of any subcustodian it
shall appoint to perform its duties under this Agreement but to the extent that
duties, obligations and responsibilities are not expressly set forth in this
Agreement, The Chase Manhattan Bank shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith, or negligence on the
part of The Chase Manhattan Bank or such subcustodian or reckless disregard of
such duties, obligations and responsibilities. Without limiting the generality
of the foregoing or of any other provision of this Agreement, The Chase
Manhattan Bank in connection with its duties under this Agreement shall, so long
as and to the extent it is in the exercise of reasonable care, not be under any
duty or obligation to inquire into and shall not be liable for or in respect of
(a) the validity or invalidity or authority or lack thereof of any advice,
direction, notice or other instrument which conforms to the applicable
requirements of this Agreement, if any, and which The Chase Manhattan Bank
believes to be genuine, (b) the validity of the issue of any securities
purchased or sold by the Fund, the legality of the purchase or sale thereof or
the propriety of the amount paid or received therefor, (c) the legality of the
issue or sale of any Shares, or the sufficiency of the amount to be received
therefore, (d) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor, (e) the legality of the declaration or payment
of any dividend or distribution on Shares, of (f) delays or errors or loss of
data occurring by reason of circumstances beyond The Chase Manhattan Bank's
control, including acts of civil
25
<PAGE>
or military authority, national emergencies, labor difficulties, fire,
mechanical breakdown (except as provided in Section 20), flood or catastrophe,
acts of God, insurrection, war, riots, or failure of the mail, transportation,
communication or power supply.
26. Collection of Income. The Chase Manhattan Bank shall collect on a
--------------------
timely basis all income and other payments with respect to registered securities
held hereunder to which the Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held by The Chase Manhattan Bank or
its agent thereof and shall credit such income, as collected, to the Fund's
custodian account. Without limiting the generality of the foregoing, The Chase
Manhattan Bank shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due the Fund on
securities loaned pursuant to the provisions of Section 9 shall be the
responsibility of the Fund. The Chase Manhattan Bank will have no duty or
responsibility in connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the Fund is properly
entitled.
27. Ownership Certificates for Tax Purposes. The Chase Manhattan Bank
---------------------------------------
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to securities of the Fund held by it and in connection with
transfers of securities.
28. Effective Period; Termination and Amendment.
-------------------------------------------
26
<PAGE>
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that The Chase Manhattan Bank shall not act under Section 8 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees of the Fund has approved the
initial use of a particular Securities Depository or Book Entry System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary that
the Board of Trustees has reviewed the use by the Fund of such Securities
Depository and/or Book Entry System, as required in each case by Rule 17f-4
under the Investment Company Act of 1940, as amended; provided further, however,
that the Fund shall not amend or terminate this Agreement in contravention of
any applicable federal or state regulations, or any provision of the Declaration
of Trust, and further provided, that the Fund may at any time by action of its
Board of Trustees (i) substitute another bank or trust company for The Chase
Manhattan Bank by giving notice as described above to The Chase Manhattan Bank,
or (ii) immediately terminate this Agreement in the event of the appointment of
a conservator or receiver for The Chase Manhattan Bank by the Comptroller of the
Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund shall pay to The Chase
Manhattan Bank such compensation as may be due as of the date of such
termination and shall likewise reimburse The Chase Manhattan Bank for its costs,
expenses and disbursements.
29. Successor Custodian
-------------------
27
<PAGE>
If a successor custodian shall be appointed by the Board of Trustees of the
Fund, The Chase Manhattan Bank shall, upon termination, deliver to such
successor custodian at the office of the custodian, duly endorsed and in the
form for transfer, all securities then held by it hereunder and shall transfer
to an account of the successor custodian all of the Fund's securities held in a
Securities Depository or Book Entry System.
If no such successor custodian shall be appointed, The Chase Manhattan Bank
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Trustees of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
The Chase Manhattan Bank on or before the date when such termination shall
become effective, then The Chase Manhattan Bank shall have the right to deliver
to a bank or trust company, which is a "bank" as defined in the 1940 Act, doing
business in New York, New York, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
The Chase Manhattan Bank and all instruments held by The Chase Manhattan Bank
relative thereto and all other property held by it under this Agreement and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities Depository or Book Entry System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of The Chase Manhattan Bank after the date of termination hereof
owing to failure of the Fund to procure the certified copy of the vote referred
to or of the Board of Trustees to appoint a successor custodian, The Chase
Manhattan Bank
28
<PAGE>
shall be entitled to fair compensation for its services during such period as
The Chase Manhattan Bank retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of The Chase Manhattan Bank shall remain in full force and effect.
30. Notices. All notices and other communications (collectively referred
-------
to as "Notice" or "Notices") in this section hereunder shall be in writing and
shall be first sent by telegram, cable, telex, or facsimile sending device and
thereafter by overnight mail for delivery on the next business day. Notices
shall be addressed (a) if to The Chase Manhattan Bank, at The Chase Manhattan
Bank's address, 4 New York Plaza, New York, New York, 10004, facsimile number
(212) 623-8997; (b) if to the Fund, at the address of the Fund Attention:
Controller, facsimile number (312) 917-8049; or (c) if to neither of the
foregoing, at such other address as shall have been notified to the sender of
any such Notice or other communication. Notices sent by overnight mail shall be
deemed to have been given the next business day. Notices sent by messenger shall
be deemed to have been given on the day delivered, and notices sent by
confirming telegram, cable, telex or facsimile sending device shall be deemed to
have been given immediately. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.
31. Further Actions. Each party agrees to perform such further acts and
---------------
execute such further documents as are necessary to effectuate the purposes
hereof.
32. Amendments. This Agreement or any part hereof may be changed or waived
----------
only by an instrument in writing signed by the party against which enforcement
of such change or waiver is sought.
33. Additional Funds. In the event that the Fund establishes one or more
----------------
series of Shares in addition to Nuveen Rittenhouse Growth Fund with respect to
which it desires to have the Custodian render services as custodian under the
terms
29
<PAGE>
hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares shall become a
Fund hereunder.
34. Miscellaneous. This Agreement embodies the entire Agreement and
-------------
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. 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. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall insure to the benefit of the parties hereto and their respective
successors.
35. The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund
by the Fund's officers as officers and not individually and the obligations
imposed upon the Fund by this Agreement are not binding upon any of the Fund's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.
30
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
THE CHASE MANHATTAN BANK
Attest: ___________________________ By: ___________________________
THOMAS V. DIBELLA
VICE PRESIDENT
NUVEEN INVESTMENT TRUST II
Attest: __________________________ By: ___________________________
GIFFORD R. ZIMMERMAN O. WALTER RENFFTLEN
ASSISTANT GENERAL COUNSEL VICE PRESIDENT &
CONTROLLER
31
<PAGE>
Exhibit 10(a)
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110-1726
November 12, 1997
Nuveen Investment Trust II
333 West Wacker Drive
Chicago, Illinois 60606-1286
Re: Registration Statement on Form N-1A under the
Securities Act of 1933
Ladies and Gentlemen:
We have acted as special Massachusetts counsel to Nuveen Investment Trust
II (the "Fund") on behalf of its series Nuveen Rittenhouse Growth Fund, in
connection with the Fund's Pre-Effective Amendment Number 1 to be filed on or
about November 13, 1997 (the "Amendment") to its Registration Statement on Form
N-1A as filed with the Securities and Exchange Commission on August 14, 1997 (as
proposed to be amended, the "Registration Statement") with respect to certain of
its Class A Common Shares, par value $.01 per share (the "Class A Shares"),
Class B Common Shares, par value $.01 per share (the "Class B Shares"), Class C
Common Shares, par value $.01 per share (the "Class C Shares") and Class R
Common Shares, par value $.01 per share (the "Class R Shares", such Class A
Shares, Class B Shares, Class C Shares and Class R Shares referred to
collectively herein as the "Shares"). You have requested that we deliver this
opinion to you in connection with the Fund's filing of such Amendment.
In connection with the furnishing of this opinion, we have examined the
following documents:
(a) a certificate dated as of a recent date of the Secretary of the
Commonwealth of Massachusetts as to the existence of the Fund;
(b) a copy, stamped as filed with the Secretary of the Commonwealth
of Massachusetts, of the Fund's Declaration of Trust dated June 27, 1997;
<PAGE>
Nuveen Investment Trust II
November 12, 1997
Page 2
(c) a copy of the Fund's Certificate for the Establishment and
Designation of Classes designating the Class A Shares, Class B Shares,
Class C Shares and Class R Shares, as executed by the Trustees of the Fund
and filed with Secretary of the Commonwealth of Massachusetts (the
"Designation of Classes");
(d) a copy of the Fund's Amended and Restated Establishment and
Designation of Series designating Nuveen Rittenhouse Growth Fund as
executed by the Trustees of the Fund and filed with the Secretary of the
Commonwealth of Massachusetts (the "Designation of Series");
(e) a Certificate executed by an appropriate officer of the Fund,
certifying as to, and attaching copies of, the Fund's Declaration of Trust,
Designation of Classes, Designation of Series, By-Laws, and certain
resolutions adopted by the Trustees of the Fund;
(f) a printer's proof dated as of November 8, 1997 of the Amendment.
In such examination, we have assumed the genuineness of all signatures, the
conformity to the originals of all of the documents reviewed by us as copies,
the authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing any
document. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission, will be in substantially the form of the printer's proof
referred to in paragraph (f) above.
This opinion is based entirely on our review of the documents listed above
and such investigation of law as we have deemed necessary or appropriate. We
have made no other review or investigation of any kind whatsoever, and we have
assumed, without independent inquiry, the accuracy of the information set forth
in such documents.
This opinion is limited solely to the internal substantive laws of the
Commonwealth of Massachusetts as applied by courts located in such Commonwealth,
except that we express no opinion as to any Massachusetts securities law.
<PAGE>
Nuveen Investment Trust II
November 12, 1997
Page 3
We understand that all of the foregoing assumptions and limitations are
acceptable to you.
Based upon and subject to the foregoing, please be advised that it is our
opinion that:
1. The Fund is duly organized and existing under the Fund's Declaration
of Trust and the laws of the Commonwealth of Massachusetts as a voluntary
association with transferable shares of beneficial interest commonly referred to
as a "Massachusetts business trust."
2. The Shares, when issued and sold in accordance with the Fund's
Declaration of Trust, Designation of Classes, Designation of Series and By-Laws
and for the consideration described in the Registration Statement, will be
legally issued, fully paid and non-assessable, except that, as set forth in the
Registration Statement, shareholders of the Fund may under certain circumstances
be held personally liable for its obligations.
We hereby consent to the reference to our name in the Registration
Statement under the heading "Legal Opinions" and to the filing of this opinion
as an exhibit to the Registration Statement.
Very truly yours,
BINGHAM DANA LLP
<PAGE>
Exhibit 10(b)
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
312 372-1121
Fax 312 372-2098
November 13, 1997
Nuveen Investment Trust II
333 West Wacker Drive
Chicago, Illinois 60606-1286
Ladies and Gentlemen:
We have served as counsel for Nuveen Investment Trust II, a Massachusetts
business trust (the "Trust"), in connection with the registration under the
Securities Act of 1933 (the "Act") of an indefinite number of shares of various
classes (the "Shares") of the series of the Trust designated Nuveen Rittenhouse
Growth Fund (the "Fund") in registration statement no. 333-33607 on Form N-1A
(the "Registration Statement").
In this connection we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate and other
records, certificates and other papers as we deemed it necessary to examine for
the purpose of this opinion, including the Declaration of Trust and By-laws of
the Trust, actions of the board of trustees of the Trust authorizing the
issuance of Shares of the Fund and the Registration Statement.
We assume that, upon sale of the Shares, the Trust will receive the
authorized consideration therefor, and that such consideration will in each case
at least equal the net asset value and par value of the Shares.
Based on such examination, we are of the opinion that upon the issuance and
delivery of the Shares of the Fund after the post-effective amendment has been
declared effective and in accordance with the Declaration of Trust and the
actions of the board of trustees authorizing the issuance of the Shares, and the
receipt by the Trust of the authorized consideration therefor, the Shares so
issued will be validly issued, fully paid and nonassessable (although
shareholders of the Fund may be subject to liability under certain circumstances
as described in the prospectus of the Trust included as Part A of the
Registration Statement in the section under the caption "General Information").
In rendering the foregoing opinion, we have relied upon the opinions of
Bingham Dana LLP in their letter dated November 12, 1997.
<PAGE>
Nuveen Investment Trust II
November 13, 1997
Page 2
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under section 7 of the Act.
Very truly yours,
/s/ BELL, BOYD & LLOYD
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated November 12, 1997, and to all references to our Firm included in or made a
part of this registration statement on Form N-1A of Nuveen Investment Trust II,
comprising the Nuveen Rittenhouse Growth Fund.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 12, 1997
<PAGE>
Exhibit 13
NUVEEN INVESTMENT TRUST II
Subscription Agreement
----------------------
This Agreement made this 12th day of November, 1997 by and between Nuveen
Investment Trust II, a Massachusetts business trust (the "Fund"), and Nuveen
Institutional Advisory Corp., a Delaware corporation (the "Subscriber");
WITNESSETH:
WHEREAS, the Fund has been formed for the purposes of carrying on business
as an open-end diversified management investment company; and
WHEREAS, the Subscriber has been selected by the Fund's Board of Trustees
to serve as investment adviser to the Fund; and
WHEREAS, the Subscriber wishes to subscribe for and purchase, and the Fund
wishes to sell to the Subscriber, 5,000 common shares (1,250 shares of each of
the four classes of shares designated in the Fund's Establishment and
Designation of Classes), for a purchase price of $20.00 per share;
NOW THEREFORE, IT IS AGREED:
1. The Subscriber subscribes for and agrees to purchase from the Fund
5,000 common shares, (1,250 shares of each of the four classes of shares
designated in the Fund's Establishment and Designation of Classes), for a
purchase price of $20.00 per share. Subscriber agrees to make payment for these
shares at such time as demand for payment may be made by an officer of the Fund.
2. The Fund agrees to issue and sell said shares to Subscriber promptly
upon its receipt of the purchase price.
3. To induce the Fund to accept its subscription and issue the shares
subscribed for, the Subscriber represents that it is informed as follows:
(a) That the shares being subscribed for have not been and will not be
registered under the Securities Act of 1933 ("Securities Act");
(b) That the shares will be sold by the Fund in reliance on an exemption
from the registration requirements of the Securities Act;
(c) That the Fund's reliance upon an exemption from the registration
requirements of the Securities Act is predicated in part on the
representations and agreements contained in this Subscription Agreement;
<PAGE>
2
(d) That when issued, the shares will be "restricted securities" as
defined in paragraph (a)(3) of Rule 144 of the General Rules and
Regulations under the Securities Act ("Rule 144") and cannot be sold or
transferred by Subscriber unless they are subsequently registered under the
Securities Act or unless an exemption from such registration is available;
(e) That there do not appear to be any exemptions from the registration
provisions of the Securities Act available to the Subscriber for resale of
the shares. In the future, certain exemptions may possibly become
available, including an exemption for limited sales including an exemption
for limited sales in accordance with the conditions of Rule 144.
The Subscriber understands that a primary purpose of the information
acknowledged in subparagraphs (a) through (e) above is to put it on notice as to
restrictions on the transferability of the shares.
4. To further induce the Fund to accept its subscription and issue the
shares subscribed for, the Subscriber:
(a) Represents and warrants that the shares subscribed for are being and
will be acquired for investment for its own account and not on behalf of
any other person or persons and not with a view to, or for sale in
connection with, any public distribution thereof; and
(b) Agrees that any certificates representing the shares subscribed for
may bear a legend substantially in the following form:
The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933 or any other federal or state securities law. These shares may
not be offered for sale, sold or otherwise transferred unless
registered under said securities laws or unless some exemption from
registration is available.
5. This Subscription Agreement and all of its provisions shall be binding
upon the legal representatives, heirs, successors and assigns of the parties
hereto.
<PAGE>
6. The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund
by the Fund's officers as officers and not individually and the obligations
imposed upon the Fund by this Agreement are not binding upon any of the Fund's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.
IN WITNESS WHEREOF, this Subscription Agreement has been executed by the
parties hereto as of the day and date first above written.
NUVEEN INVESTMENT TRUST II
/s/ Larry W. Martin
By:_____________________________
Vice President
NUVEEN INSTITUTIONAL ADVISORY CORP.
/s/ Thomas C. Spalding
By:_______________________________
Vice President
<PAGE>
Exhibit 15
Nuveen Investment Trust II
Plan of Distribution and Service
Pursuant to Rule 12b-1
July 24, 1997
Whereas, Nuveen Investment Trust II, a Massachusetts business trust (the
"Fund"), engages in business as an open-end management investment company and is
registered under the Investment Company Act of 1940, as amended (the "Act");
Whereas, the Fund employs John Nuveen & Co. Incorporated (the
"Distributor") as distributor of the shares of the Fund (the "Shares") pursuant
to a Distribution Agreement dated as of July 24, 1997;
Whereas, the Fund is authorized to issue Shares in four different classes
("Classes"): Class A, Class B, Class C and Class R.
Whereas, the Fund desires to adopt a Plan of Distribution and Service
pursuant to Rule 12b-1 under the Act ("Rule 12b-1"), and the Board of Trustees
of the Fund has determined that there is a reasonable likelihood that adoption
of this Plan of Distribution and Service will benefit the Fund and its
shareholders;
Whereas, the Fund has adopted a Multiple Class Plan Pursuant to Rule 18f-3
(the "Rule 18f-3 Plan") to enable the various Classes of Shares to be granted
different rights and privileges and to bear different expenses, and has an
effective registration statement on file with the SEC containing a Prospectus
describing such Classes of Shares;
Whereas, as described in the Rule 18f-3 Plan, the purchase of Class A
Shares is generally subject to an up-front sales charge, as set forth in the
Fund's Prospectus and Statement of Additional Information, and the purchase of
Class B and Class C Shares will not be subject to an up-front sales charge, but
in lieu thereof the Class B Shares will be subject to an asset-based
distribution fee (and a declining contingent deferred sales charge) and Class C
Shares will be subject to an asset-based distribution fee (and a one-year
contingent deferred sales charge), as described in the Prospectus for the
Shares; and
Whereas, Shares representing an investment in Class B will automatically
convert to Class A Shares 8 years after the investment, as described in the
Prospectus for the Shares;
<PAGE>
Now, Therefore, the Fund hereby adopts, and the Distributor hereby agrees
to the terms of, this Plan of Distribution and Service (the "Plan") in
accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Fund is authorized to compensate the Distributor for services
performed and expenses incurred by the Distributor in connection with
the distribution of Shares of Class A, Class B and Class C of the Fund
and the servicing of accounts holding such Shares.
(b) The amount of such compensation paid during any one year
shall consist
(i) with respect to Class A Shares of a Service Fee not to exceed
.25 % of average daily net assets of the Class A Shares of the
Fund;
(ii) with respect to Class B Shares of a Service Fee not to exceed
.25% of average daily net assets of the Class B Shares of the
Fund, plus a Distribution Fee not to exceed .75% of average
daily net assets of the Class B Shares of the Fund; and
(iii) with respect to Class C Shares of a Service Fee not to exceed
.25% of average daily net assets of the Class C Shares of the
Fund, plus a Distribution Fee not to exceed .75% of average
daily net assets of the Class C Shares of the Fund.
Such compensation shall be calculated and accrued daily and paid
monthly or at such other intervals as the Board of Trustees may
determine.
(c) With respect to Class A Shares, the Distributor shall pay any Service
Fees it receives under the Plan for which a particular underwriter,
dealer, broker, bank or selling entity having a Dealer Agreement in
effect ("Authorized Dealer", which may include the Distributor) is the
dealer of record to such Authorized Dealers to compensate such
organizations for providing services to shareholders relating to their
investment. The Distributor may retain any Service Fees not so paid.
(d) With respect to the Class B Shares, the Distributor:
(i) shall retain the Distribution Fee to compensate it for costs
associated with the distribution of the Class B Shares, including
the payment of broker commissions to Authorized Dealers (which
may include the Distributor)
-2-
<PAGE>
who were the dealer of record with respect to the purchase of
those shares; and
(ii) shall pay any Service Fees it receives under the Plan for which
a particular Authorized Dealer is the dealer of record (which
may include the Distributor) to such Authorized Dealers to
compensate such organizations for providing services to
shareholders relating to their investment; provided, however,
that the Distributor shall be entitled to retain, for the first
year after purchase of the Class B Shares, the Service Fee to
the extent that it may have pre-paid the Service Fee for that
period to the Authorized Dealer of record.
The Distributor may retain any Distribution or Service Fees not so
paid.
(e) With respect to the Class C Shares, the Distributor:
(i) shall pay the Distribution Fee it receives under the Plan with
respect to Class C Shares for which a particular Authorized
Dealer is the dealer of record (which may include the
Distributor) to such Authorized Dealers to compensate such
organizations in connection with such share sales; provided,
however, that the Distributor shall be entitled to retain, for
the first year after purchase of the Class C Shares, the
Distribution Fee to the extent that it may have pre-paid the
Distribution Fee for that period to the Authorized Dealer of
record; and
(ii) shall pay any Service Fees it receives under the Plan for which a
particular Authorized Dealer is the dealer of record (which may
include the Distributor) to such Authorized Dealers to compensate
such organizations for providing services to shareholders
relating to their investment; provided, however, that the
Distributor shall be entitled to retain, for the first year after
purchase of the Class B Shares, the Service Fee to the extent
that it may have pre-paid the Service Fee for that period to the
Authorized Dealer of record.
The Distributor may retain any Distribution or Service Fees not so
paid.
(f) Services for which such Authorized Dealers may receive Service Fee
payments include any or all of the following: maintaining account records for
shareholders who beneficially own Shares; answering inquiries relating to the
shareholders' accounts, the policies of the Fund and the performance of their
investment; providing assistance and handling
-3-
<PAGE>
transmission of funds in connection with purchase, redemption and exchange
orders for Shares; providing assistance in connection with changing account
setups and enrolling in various optional fund services; producing and
disseminating shareholder communications or servicing materials; the ordinary or
capital expenses, such as equipment, rent, fixtures, salaries, bonuses,
reporting and recordkeeping and third party consultancy or similar expenses,
relating to any activity for which payment is authorized by the Board; and the
financing of any other activity for which payment is authorized by the Board.
(g) Payments of Distribution or Service Fees to any organization as
of any quarter-end will not exceed the appropriate amount based on the annual
percentages set forth in subparagraphs (c), (d) and (e) above, based on average
net assets of accounts for which such organization appeared on the records of
the Fund and/or its transfer agent as the organization of record during the
preceding quarter.
2. This Plan shall not take effect until the Plan, together with any
related agreement(s), has been approved by votes of a majority of both (a) the
Board of Trustees of the Fund, and (b) those Trustees of the Fund who are not
"interested persons" of the Fund (as defined in the Act) and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to it (the "Rule 12b-1 Trustees") cast in person at a meeting (or
meetings) called for the purpose of voting on the Plan and such related
Agreement(s).
3. This Plan shall remain in effect until August 1, 1997, and shall
continue in effect thereafter so long as such continuance is specifically
approved at least annually in the manner provided for approval of this Plan in
paragraph 2.
4. The Distributor shall provide to the Board of Trustees of the Fund
and the Board shall review, at least quarterly, a written report of
distribution-and service-related activities, Distribution Fees, Service Fees,
and the purposes for which such activities were performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees or by vote of a majority (as defined in the Act) of the
outstanding voting Shares of the Fund.
6. This Plan may not be amended to increase materially the amount of
compensation payable by the Fund with respect to Class A, Class B or Class C
Shares under paragraph 1 hereof unless such amendment is approved by a vote of
at least a majority (as defined in the Act) of the outstanding voting Shares of
that Class of Shares. No material amendment to the Plan shall be made unless
approved in the manner provided in paragraph 2 hereof.
-4-
<PAGE>
7. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the Trustees who are not such interested
persons.
8. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof, for a period of
not less than six years from the date of the Plan, any such agreement or any
such report, as the case may be, the first two years in an easily accessible
place.
-5-
<PAGE>
Nuveen Investment Trust II
Multiple Class Plan
Adopted Pursuant to Rule 18f-3
Whereas, Nuveen Investment Trust II, a Massachusetts business trust (the
"Fund"), engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
Whereas, the Fund is authorized to and does issue shares of beneficial
interest in separate series, with the shares of each such series representing
the interests in a separate portfolio of securities and other assets (the Fund's
series together with all other such series subsequently established by a Fund
being referred to herein individually as a "Series" and collectively as the
"Series");
Whereas, the Fund is authorized to and has divided the shares of each
Series into four classes, designated as Class A Shares, Class B Shares, Class C
Shares and Class R Shares; and
Whereas, the Board of the Fund as a whole, and the Trustees who are not
interested persons of the Fund (as defined in the Act) (the "Non-Interested
Members"), after having been furnished and having evaluated information
reasonably necessary to evaluate this Multiple Class Plan (the "Plan"), have
determined in the exercise of their reasonable business judgment that the Plan
is in the best interests of each class of each Series individually, and each
Series and the Fund as a whole.
Now, Therefore, the Fund hereby adopts this Plan, effective the date
hereof, in accordance with Rule 18f-3 under the Act:
Section 1. Class Differences. Each class of shares of a Series shall
represent interests in the same portfolio of investments of that Series and,
except as otherwise set forth in this Plan, shall differ solely with respect to:
(i) distribution, service and other charges and expenses as provided for in
Sections 2 and 3 of this Plan; (ii) the exclusive right of each class of shares
to vote on matters submitted to shareholders that relate solely to that class or
for which the interests of one class differ from the interests of another class
or classes; (iii) such differences relating to eligible investors as may be set
forth in the prospectus and statement of additional information of each Series,
as the same may be amended or supplemented from time to time (each a
"Prospectus" and "SAI" and collectively, the "Prospectus" and "SAI"); (iv) the
designation of each class of shares; and (v) conversion features.
<PAGE>
Section 2. Distribution and Service Arrangements; Conversion
Features. Class A Shares, Class B Shares, Class C Shares and Class R Shares of
each Fund shall differ in the manner in which such shares are distributed and in
the services provided to shareholders of each such class as follows:
(a) Class A Shares:
(i) Class A Shares shall be sold at net asset value subject to
a front-end sales charge set forth in the Prospectus and SAI;
(ii) Class A Shares shall be subject to an annual service fee
("Service Fee") pursuant to a Plan of Distribution and Service
Pursuant to Rule 12b-1 (the "12b-1 Plan") not to exceed 0.25 of 1% of
the average daily net assets of the Series allocable to Class A
Shares, which, as set forth in the Prospectus, SAI and the 12b-1 Plan,
may be used to compensate certain authorized dealers for providing
ongoing account services to shareholders; and
(iii) Class A Shares shall not be subject to a Distribution
Fee (as hereinafter defined);
(iv) As described in the Prospectus and SAI, certain Class A
shares redeemed within 18 months of purchase shall be subject to a
contingent deferred sales charge ("CDSC") of 1% of the lower of (a)
the net asset value of Class A Shares at the time of purchase or (b)
the net asset value of Class A Shares at the time of redemption, as
set forth in the Prospectus and SAI; and
(v) Class A Shares may be offered from time to time at net
asset value without a front-end sales load, the terms and conditions
of such offer will be described in the Fund's Prospectus or supplement
thereto. If the Class A Shares are sold on a load-waived basis, such
Class A Shares redeemed within 24 months of purchase shall be subject
to a CDSC of 2% of the lower of the purchase price or redemption
proceeds, as described in the Prospectus or supplement thereto.
(b) Class B Shares:
(i) Class B Shares shall be sold at net asset value without a
front-end sales charge;
(ii) Class B Shares shall be subject to a Service Fee pursuant
to the 12b-1 Plan not to exceed 0.25 of 1% of average daily net assets
of the Series
-2-
<PAGE>
allocable to Class B Shares, which, as set forth in the
Prospectus, SAI and the 12b-1 Plan, may be used to compensate certain
authorized dealers for providing ongoing account services to
shareholders;
(iii) Class B Shares shall be subject to an annual
distribution fee ("Distribution Fee") pursuant to the 12b-1 Plan not
to exceed 0.75 of 1% of average daily net assets of the Series
allocable to Class B Shares, which, as set forth in the Prospectus,
SAI and the 12b-1 Plan, will be used to reimburse John Nuveen & Co.
Incorporated, the Funds' distributor, for certain expenses and for
providing compensation to certain authorized dealers;
(iv) Class B Shares redeemed within 6 years of purchase shall
be subject to a CDSC described below of the lower of (a) the net asset
value of Class B Shares at the time of purchase or (b) the net asset
value of Class B Shares at the time of redemption, as set forth in the
Prospectus and SAI; and
<TABLE>
<CAPTION>
Years Since Purchase
of Class B Shares CDSC
<S> <C>
0-1 5%
1-2 4%
2-3 4%
3-4 3%
4-5 2%
5-6 1%
6+ 0%
</TABLE>
(v) Class B Shares will automatically convert to Class A
Shares eight years after purchase, as set forth in the Prospectus and
SAI.
(c) Class C Shares:
(i) Class C Shares shall be sold at net asset value without a
front-end sales charge;
(ii) Class C Shares shall be subject to a Service Fee pursuant
to the 12b-1 Plan not to exceed 0.25 of 1% of average daily net assets
of the Series allocable to Class C Shares, which, as set forth in the
Prospectus, SAI and the 12b-1 Plan, may be used to compensate certain
authorized dealers for providing ongoing account services to
shareholders;
-3-
<PAGE>
(iii) Class C Shares shall be subject to a Distribution Fee
pursuant to the 12b-1 Plan not to exceed 0.75 of 1% of average daily
net assets of the Series allocable to Class C Shares, which, as set
forth in the Prospectus, SAI and the 12b-1 Plan, will be used to
reimburse John Nuveen & Co. Incorporated, the Funds' distributor, for
certain expenses and for providing compensation to certain authorized
dealers; and
(iv) Class C Shares redeemed within 12 months of purchase
shall be subject to a CDSC of 1% of the lower of (a) the net asset
value of Class C Shares at the time of purchase or (b) the net asset
value of Class C Shares at the time of redemption, as set forth in the
Prospectus and SAI.
(d) Class R Shares:
(i) Class R Shares shall be sold at net asset value without a
front-end sales charge;
(ii) Class R Shares shall not be subject to a Service Fee; and
(iii) Class R Shares shall not be subject to a
Distribution Fee.
Section 3. Allocation of Income, Expenses, Gains and Losses.
(a) Investment Income, and Realized and Unrealized Gains and Losses. The
daily investment income, and realized and unrealized gains and losses, of a
Series will be allocated to each class of shares based on each class' relative
percentage of the total value of shares outstanding of the Series at the
beginning of the day, after such net assets are adjusted for the prior day's
capital share transactions.
(b) Series Level Expenses. Expenses that are attributable to a Series,
but not a particular class thereof ("Series level expenses"), will be allocated
to each class of shares based on each class' relative percentage of the total
value of shares outstanding of the Series at the beginning of the day, after
such net assets are adjusted for the prior day's capital share transactions.
Series level expenses include fees for services that are received equally by the
classes under the same fee arrangement. All expenses attributable to a Series
that are not "class level expenses" (as defined below) shall be Series level
expenses, including but not limited to transfer agency fees and expenses, share
registration expenses, and shareholder reporting expenses.
-4-
<PAGE>
(c) Class Level Expenses. Expenses that are directly attributable to a
particular class of shares, including the expenses relating to the distribution
of a class' shares, or to services provided to the shareholders of a class, as
set forth in Section 2 of this Plan, will be incurred by that class of shares.
Class level expenses include expenses for services that are unique to a class of
shares in either form or amount. "Class level expenses" shall include, but not
be limited to, 12b-1 Service Fees, 12b-1 Distribution Fees, expenses associated
with the addition of share classes to a Fund (to the extent that the expenses
were not fully accrued prior to the issuance of the new classes of shares),
expenses of administrative personnel and services required to support the
shareholders of a specific class, litigation or other legal expenses relating to
a specific class of shares, directors' fees or expenses incurred as a result of
issues relating to a specific class of shares, and accounting expenses relating
to a specific class of shares.
(d) Fee Waivers and Expense Reimbursements. On a daily basis, if the
Series level expenses and the class level expenses (not including 12b-1 plan
payments) exceed the daily expense cap for the Series, an appropriate
waiver/reimbursement will be made to the Series. The amount of such
reimbursement to each class will be in an amount such that the expenses of the
class with the highest expense ratio (excluding Service Fees and Distribution
Fees) will be equal to the daily expense cap after reimbursement. The expense
reimbursement will be allocated to each class of shares based on each class'
relative percentage of the total value of shares outstanding of the Series at
the beginning of the day, after such net assets are adjusted for the prior day's
capital share transactions.
Section 4. Exchange Privilege. Shares of a class of a Series may be
exchanged only for shares of the same class of another Series, except as
otherwise set forth in the Prospectus and SAI.
Section 5. Term and Termination.
(a) The Series. This Plan shall become effective with respect to each
Series on the date hereof, and shall continue in effect with respect to such
Class A, Class B, Class C and Class R Shares of each such Series until
terminated in accordance with the provisions of Section 5(c) hereof.
(b) Additional Series or Classes. This Plan shall become effective with
respect to any class of shares of a Series other than Class A, Class B, Class C
or Class R and with respect to each additional Series or class thereof
established by a Fund after the date hereof and made subject to this Plan upon
commencement of the initial public offering thereof (provided that the Plan has
previously been approved with respect to such additional Series or class by
votes of a majority of both (i) the members of the Board of a Fund, as a whole,
and (ii) the Non-Interested Members, cast at a meeting held before the initial
public offering of such additional Series or
-5-
<PAGE>
classes thereof), and shall continue in effect with respect to each such
additional Series or class until terminated in accordance with provisions of
Section 5(c) hereof. An addendum setting forth such specific and different
terms of such additional series or classes shall be attached to or made part of
this Plan.
(c) Termination. This Plan may be terminated at any time with respect to
any Fund or any Series or class thereof, as the case may be, by vote of a
majority of both the members of the Board of a Fund, as a whole, and the Non-
Interested Members. The Plan may remain in effect with respect to a particular
Fund or any Series or class thereof even if it has been terminated in accordance
with this Section 5(c) with respect to any other Fund or Series or class
thereof.
Section 6. Subsequent Funds. The parties hereto intend that any
open-end investment company established subsequent to the date set forth below
for which Nuveen Institutional Advisory Corp. acts as investment adviser (each a
"Future Fund"), will be covered by the terms and conditions of this Plan,
provided that the Board of such Future Fund as a whole, and the Non-Interested
Members of such Future Fund, after having been furnished and having evaluated
information reasonably necessary to evaluate the Plan, have determined in the
exercise of their reasonable business judgment that the Plan is in the best
interests of each class of each Series of such Future Fund individually, and
each Series of such Future Fund and such Future Fund as a whole.
Section 7. Amendments.
(a) General. Except as set forth below, any material amendment to this
Plan affecting a Fund or Series or class thereof shall require the affirmative
vote of a majority of both the members of the Board of that Fund, as a whole,
and the Non-Interested Members that the amendment is in the best interests of
each class of each Series individually and each Series as a whole.
(b) Future Funds. Any amendment to the Plan solely for the purpose of
adding a Future Fund as a party hereto in accordance with Section 6, will not
require any action by the Boards of the Funds.
Dated: July 24, 1997
-6-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
the Statement of Net Assets as of November 12, 1997 of Nuveen Investment Trust
II and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> NOV-12-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 276,000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 176,000
<TOTAL-LIABILITIES> 176,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100,000
<SHARES-COMMON-STOCK> 5,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 100,000
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 100,000
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 18
NUVEEN INVESTMENT TRUST II
MULTIPLE CLASS PLAN
ADOPTED PURSUANT TO RULE 18f-3
Whereas, Nuveen Investment Trust II, a Massachusetts business trust (the
"Fund"), engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
Whereas, the Fund is authorized to and does issue shares of beneficial
interest in separate series, with the shares of each such series representing
the interests in a separate portfolio of securities and other assets (the Fund's
series together with all other such series subsequently established by a Fund
being referred to herein individually as a "Series" and collectively as the
"Series");
Whereas, the Fund is authorized to and has divided the shares of each
Series into four classes, designated as Class A Shares, Class B Shares, Class C
Shares and Class R Shares; and
Whereas, the Board of the Fund as a whole, and the Trustees who are not
interested persons of the Fund (as defined in the Act) (the "Non-Interested
Members"), after having been furnished and having evaluated information
reasonably necessary to evaluate this Multiple Class Plan (the "Plan"), have
determined in the exercise of their reasonable business judgment that the Plan
is in the best interests of each class of each Series individually, and each
Series and the Fund as a whole.
Now, Therefore, the Fund hereby adopts this Plan, effective the date
hereof, in accordance with Rule 18f-3 under the Act:
Section 1. Class Differences. Each class of shares of a Series shall
represent interests in the same portfolio of investments of that Series and,
except as otherwise set forth in this Plan, shall differ solely with respect to:
(i) distribution, service and other charges and expenses as provided for in
Sections 2 and 3 of this Plan; (ii) the exclusive right of each class of shares
to vote on matters submitted to shareholders that relate solely to that class or
for which the interests of one class differ from the interests of another class
or classes; (iii) such differences relating to eligible investors as may be set
forth in the prospectus and statement of additional information of each Series,
as the same may be amended or supplemented from time to time (each a
"Prospectus" and "SAI" and collectively, the "Prospectus" and "SAI"); (iv) the
designation of each class of shares; and (v) conversion features.
<PAGE>
Section 2. Distribution and Service Arrangements; Conversion
Features. Class A Shares, Class B Shares, Class C Shares and Class R Shares of
each Fund shall differ in the manner in which such shares are distributed and in
the services provided to shareholders of each such class as follows:
(a) Class A Shares:
(i) Class A Shares shall be sold at net asset value subject to
a front-end sales charge set forth in the Prospectus and SAI;
(ii) Class A Shares shall be subject to an annual service fee
("Service Fee") pursuant to a Plan of Distribution and Service
Pursuant to Rule 12b-1 (the "12b-1 Plan") not to exceed 0.25 of 1% of
the average daily net assets of the Series allocable to Class A
Shares, which, as set forth in the Prospectus, SAI and the 12b-1 Plan,
may be used to compensate certain authorized dealers for providing
ongoing account services to shareholders; and
(iii) Class A Shares shall not be subject to a Distribution
Fee (as hereinafter defined);
(iv) As described in the Prospectus and SAI, certain Class A
shares redeemed within 18 months of purchase shall be subject to a
contingent deferred sales charge ("CDSC") of 1% of the lower of (a)
the net asset value of Class A Shares at the time of purchase or (b)
the net asset value of Class A Shares at the time of redemption, as
set forth in the Prospectus and SAI; and
(v) Class A Shares may be offered from time to time at net
asset value without a front-end sales load, the terms and conditions
of such offer will be described in the Fund's Prospectus or supplement
thereto. If the Class A Shares are sold on a load-waived basis, such
Class A Shares redeemed within 24 months of purchase shall be subject
to a CDSC of 2% of the lower of the purchase price or redemption
proceeds, as described in the Prospectus or supplement thereto.
(b) Class B Shares:
(i) Class B Shares shall be sold at net asset value without a
front-end sales charge;
(ii) Class B Shares shall be subject to a Service Fee pursuant
to the 12b-1 Plan not to exceed 0.25 of 1% of average daily net assets
of the Series
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<PAGE>
allocable to Class B Shares, which, as set forth in the Prospectus,
SAI and the 12b-1 Plan, may be used to compensate certain authorized
dealers for providing ongoing account services to shareholders;
(iii) Class B Shares shall be subject to an annual
distribution fee ("Distribution Fee") pursuant to the 12b-1 Plan not
to exceed 0.75 of 1% of average daily net assets of the Series
allocable to Class B Shares, which, as set forth in the Prospectus,
SAI and the 12b-1 Plan, will be used to reimburse John Nuveen & Co.
Incorporated, the Funds' distributor, for certain expenses and for
providing compensation to certain authorized dealers;
(iv) Class B Shares redeemed within 6 years of purchase shall
be subject to a CDSC described below of the lower of (a) the net asset
value of Class B Shares at the time of purchase or (b) the net asset
value of Class B Shares at the time of redemption, as set forth in the
Prospectus and SAI; and
<TABLE>
<CAPTION>
Years Since Purchase
of Class B Shares CDSC
<S> <C> <C>
0-1 5%
1-2 4%
2-3 4%
3-4 3%
4-5 2%
5-6 1%
6+ 0%
</TABLE>
(v) Class B Shares will automatically convert to Class A
Shares eight years after purchase, as set forth in the Prospectus and
SAI.
(c) Class C Shares:
(i) Class C Shares shall be sold at net asset value without a
front-end sales charge;
(ii) Class C Shares shall be subject to a Service Fee pursuant
to the 12b-1 Plan not to exceed 0.25 of 1% of average daily net assets
of the Series allocable to Class C Shares, which, as set forth in the
Prospectus, SAI and the 12b-1 Plan, may be used to compensate certain
authorized dealers for providing ongoing account services to
shareholders;
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<PAGE>
(iii) Class C Shares shall be subject to a Distribution Fee
pursuant to the 12b-1 Plan not to exceed 0.75 of 1% of average daily
net assets of the Series allocable to Class C Shares, which, as set
forth in the Prospectus, SAI and the 12b-1 Plan, will be used to
reimburse John Nuveen & Co. Incorporated, the Funds' distributor, for
certain expenses and for providing compensation to certain authorized
dealers; and
(iv) Class C Shares redeemed within 12 months of purchase
shall be subject to a CDSC of 1% of the lower of (a) the net asset
value of Class C Shares at the time of purchase or (b) the net asset
value of Class C Shares at the time of redemption, as set forth in the
Prospectus and SAI.
(d) Class R Shares:
(i) Class R Shares shall be sold at net asset value without a
front-end sales charge;
(ii) Class R Shares shall not be subject to a Service Fee; and
(iii) Class R Shares shall not be subject to a Distribution
Fee.
Section 3. Allocation of Income, Expenses, Gains and Losses.
(a) Investment Income, and Realized and Unrealized Gains and Losses. The
daily investment income, and realized and unrealized gains and losses, of a
Series will be allocated to each class of shares based on each class' relative
percentage of the total value of shares outstanding of the Series at the
beginning of the day, after such net assets are adjusted for the prior day's
capital share transactions.
(b) Series Level Expenses. Expenses that are attributable to a Series,
but not a particular class thereof ("Series level expenses"), will be allocated
to each class of shares based on each class' relative percentage of the total
value of shares outstanding of the Series at the beginning of the day, after
such net assets are adjusted for the prior day's capital share transactions.
Series level expenses include fees for services that are received equally by the
classes under the same fee arrangement. All expenses attributable to a Series
that are not "class level expenses" (as defined below) shall be Series level
expenses, including but not limited to transfer agency fees and expenses, share
registration expenses, and shareholder reporting expenses.
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<PAGE>
(c) Class Level Expenses. Expenses that are directly attributable to a
particular class of shares, including the expenses relating to the distribution
of a class' shares, or to services provided to the shareholders of a class, as
set forth in Section 2 of this Plan, will be incurred by that class of shares.
Class level expenses include expenses for services that are unique to a class of
shares in either form or amount. "Class level expenses" shall include, but not
be limited to, 12b-1 Service Fees, 12b-1 Distribution Fees, expenses associated
with the addition of share classes to a Fund (to the extent that the expenses
were not fully accrued prior to the issuance of the new classes of shares),
expenses of administrative personnel and services required to support the
shareholders of a specific class, litigation or other legal expenses relating to
a specific class of shares, directors' fees or expenses incurred as a result of
issues relating to a specific class of shares, and accounting expenses relating
to a specific class of shares.
(d) Fee Waivers and Expense Reimbursements. On a daily basis, if the
Series level expenses and the class level expenses (not including 12b-1 plan
payments) exceed the daily expense cap for the Series, an appropriate
waiver/reimbursement will be made to the Series. The amount of such
reimbursement to each class will be in an amount such that the expenses of the
class with the highest expense ratio (excluding Service Fees and Distribution
Fees) will be equal to the daily expense cap after reimbursement. The expense
reimbursement will be allocated to each class of shares based on each class'
relative percentage of the total value of shares outstanding of the Series at
the beginning of the day, after such net assets are adjusted for the prior day's
capital share transactions.
Section 4. Exchange Privilege. Shares of a class of a Series may be
exchanged only for shares of the same class of another Series, except as
otherwise set forth in the Prospectus and SAI.
Section 5. Term and Termination.
(a) The Series. This Plan shall become effective with respect to each
Series on the date hereof, and shall continue in effect with respect to such
Class A, Class B, Class C and Class R Shares of each such Series until
terminated in accordance with the provisions of Section 5(c) hereof.
(b) Additional Series or Classes. This Plan shall become effective with
respect to any class of shares of a Series other than Class A, Class B, Class C
or Class R and with respect to each additional Series or class thereof
established by a Fund after the date hereof and made subject to this Plan upon
commencement of the initial public offering thereof (provided that the Plan has
previously been approved with respect to such additional Series or class by
votes of a majority of both (i) the members of the Board of a Fund, as a whole,
and (ii) the Non-Interested Members, cast at a meeting held before the initial
public offering of such additional Series or
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<PAGE>
classes thereof), and shall continue in effect with respect to each such
additional Series or class until terminated in accordance with provisions of
Section 5(c) hereof. An addendum setting forth such specific and different
terms of such additional series or classes shall be attached to or made part of
this Plan.
(c) Termination. This Plan may be terminated at any time with respect to
any Fund or any Series or class thereof, as the case may be, by vote of a
majority of both the members of the Board of a Fund, as a whole, and the Non-
Interested Members. The Plan may remain in effect with respect to a particular
Fund or any Series or class thereof even if it has been terminated in accordance
with this Section 5(c) with respect to any other Fund or Series or class
thereof.
Section 6. Subsequent Funds. The parties hereto intend that any
open-end investment company established subsequent to the date set forth below
for which Nuveen Institutional Advisory Corp. acts as investment adviser (each a
"Future Fund"), will be covered by the terms and conditions of this Plan,
provided that the Board of such Future Fund as a whole, and the Non-Interested
Members of such Future Fund, after having been furnished and having evaluated
information reasonably necessary to evaluate the Plan, have determined in the
exercise of their reasonable business judgment that the Plan is in the best
interests of each class of each Series of such Future Fund individually, and
each Series of such Future Fund and such Future Fund as a whole.
Section 7. Amendments.
(a) General. Except as set forth below, any material amendment to this
Plan affecting a Fund or Series or class thereof shall require the affirmative
vote of a majority of both the members of the Board of that Fund, as a whole,
and the Non-Interested Members that the amendment is in the best interests of
each class of each Series individually and each Series as a whole.
(b) Future Funds. Any amendment to the Plan solely for the purpose of
adding a Future Fund as a party hereto in accordance with Section 6, will not
require any action by the Boards of the Funds.
Dated: July 24, 1997
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