<PAGE>
As filed with the Securities and Exchange Commission on June 9, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[_]
File No. 333-74835
Pre-Effective Amendment No. 2
---
[X]
Post-Effective Amendment No.
---
[_]
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[_]
File No. 811-09267
Amendment No. 2
---
[X]
Nuveen Money Market Trust
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive, Chicago, 60606
Illinois
(Zip Code)
(Address of Principal Executive
Offices)
Registrant's Telephone Number, Including Area Code: (312) 917-7700
Gifford R. Zimmerman, Esq.--Vice With a copy to: Thomas S. Harman,
President and Secretary Esq. Morgan, Lewis & Bockius LLP
1800 M Street, N.W. Washington, DC
333 West Wacker Drive 20036
Chicago, Illinois 60606
(Name and Address of Agent for
Service)
Title of Securities Being Registered ... Units of Beneficial Interest
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[X] Approximate date of Proposed Public Offering:
As soon as practicable after the
effective date of this Registration Statement
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Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further 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>
June 10, 1999 Prospectus
N U V E E N
Mutual Funds
Nuveen Money Market Fund
For investors
seeking
attractive
current income
and stability
of principal.
Featuring Portfolio Management By Nuveen Investment Advisory Services
A Premier Adviser(SM) for Income Investing
- ----------------------------------------------------------
The Securities and Exchange Commission has not
approved or disapproved any fund shares or determined
whether this prospectus is accurate or complete. It is a
crime for anyone to tell you otherwise.
- ----------------------------------------------------------
<PAGE>
We have used the icons below throughout the prospectus to make it easy
for you to find the type of information you need.
Investment Strategy
Risks
Fees, Charges and Expenses
Shareholder Instructions
Performance and Current Portfolio Information
Table of Contents
Section 1 The Fund
This section provides you with an overview of the fund, including investment
objective and portfolio holdings.
Introduction........................................................... 1
Nuveen Money Market Fund............................................... 2
Section 2 How We Manage Your Money
This section gives you a detailed discussion of our investment and risk
management strategies.
Who Manages the Fund................................................... 4
Management Fees ....................................................... 5
What Securities We Invest In........................................... 5
How We Manage Risk..................................................... 6
Section 3 How You Can Buy and Sell Shares
This section provides the information you need to move money into and out
of your account.
What Share Classes We Offer ........................................... 8
How to Buy Shares .....................................................10
Systematic Investing...................................................11
Special Services.......................................................11
How to Sell Shares.....................................................12
Section 4 General Information
This section summarizes the fund's distribution policies and other general
information.
Dividends, Distributions and Taxes.....................................15
Taxes and Tax Reporting................................................15
Distribution and Service...............................................16
Net Asset Value........................................................16
Fund Service Providers.................................................17
Year 2000..............................................................17
<PAGE>
June 10, 1999
Section 1. The Fund
Nuveen Money Market Fund
Introduction
This prospectus is intended to provide important information to help you
evaluate whether the Nuveen Money Market Fund may be right for you. Please read
it carefully before investing and keep it for future reference.
Regular Income, Convenience and Stability of Principal
Money market funds offer you the opportunity to earn income on your cash
reserves while also providing easy access to your money and stability of
principal. They can provide a convenient way to make gradual transfers into
stock or bond funds, or to lower the overall risk of your portfolio.
The fund invests in high quality money market instruments that its investment
adviser believes present minimal credit risks. The fund's investment policies
are designed to mitigate overall risk and maintain a constant price per share of
$1.00, but there can be no guarantee of this.
NOT FDIC OR GOVERNMENT INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE>
Nuveen Money Market Fund
Fund Overview
Investment Objective
The fund's investment objective is to provide as high a level of current
income as is consistent with the stability of principal and the maintenance of
liquidity.
How the Fund Pursues Its Objective
The fund invests substantially all of its assets in a diversified portfolio of
high quality money market instruments that the fund's investment adviser
believes present minimal credit risks. The adviser selects money market
instruments based on its assessment of current market interest rates and its
market outlook. The adviser seeks to identify money market instruments with
favorable characteristics the adviser believes are not yet recognized by the
market. These instruments may include U.S. dollar denominated instruments of
foreign issuers.
What are the Risks of Investing in the Fund?
While the fund invests in securities its investment adviser believes present
minimal credit and interest rate risks, the fund is not risk free. The value of
the fund's investments may be adversely affected by changes in prevailing
interest rates or an issuer's credit quality. The fund's investments in U.S.
dollar denominated money market instruments of foreign issuers expose the fund
to different risks than those associated with domestic instruments. The fund's
investment policies are designed to mitigate these risks and maintain a constant
price per share of $1.00, but there can be no guarantee of this. Like any mutual
fund investment, loss of money is a risk of investing.
Is This Fund Right For You?
The fund may be appropriate for you if you seek to:
. Earn regular income on your cash reserves with check-writing privileges;
. Maintain stability of principal;
. Make gradual transfers into stock or bond funds; or
. Lower the overall risk of your investment portfolio.
You should not invest in this fund if you seek to pursue long-term growth of
principal.
What Are the Costs of Investing?
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
Shareholder Transaction Expenses/1/
Paid Directly From Your Investment
<TABLE>
<CAPTION>
Share Class A B C R/2/
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchases None None None None
...................................................................
Maximum Sales Charge Imposed on None None None None
Reinvested Dividends
...................................................................
Maximum Deferred Sales Charge/3/ None/4/ 5%/5/ 1%/6/ None
...................................................................
Exchange Fees None None None None
...................................................................
</TABLE>
Annual Fund Operating Expenses
Paid From Fund Assets
<TABLE>
<CAPTION>
Share Class A B C R/2/
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees .45% .45% .45% .45%
...................................................................
12b-1 Distribution and Service Fees .25% 1.00% 1.00% None
...................................................................
Other Expenses/7/ .92% .92% .92% .92%
...................................................................
Total Operating Expenses--Gross+ 1.62% 2.37% 2.37% 1.37%
...................................................................
</TABLE>
- -------------
+After Expense Reimbursements
...................................................................
Expense Reimbursements (.72%) (.72%) (.72%) (.72%)
...................................................................
Total Operating Expenses--Net .90% 1.65% 1.65% .65%
...................................................................
Total Operating Expenses--Net reflect a voluntary expense limitation by the
fund's investment adviser, which may be modified or discontinued without notice
at the adviser's discretion.
Example
The following example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
you invest $10,000 in the fund for the time periods indicated, and then either
redeem or do not redeem all your shares at the end of a period. The example also
assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same. Your actual returns and costs may be higher
or lower.
<TABLE>
<CAPTION>
Redemption No Redemption
Share Class A B C R A B C R
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year $165 633 240 139 165 240 240 139
.........................................................................
3 Years $511 1,051 739 434 511 739 739 434
.........................................................................
</TABLE>
<PAGE>
How the Fund Is Invested (as of ___ _, 1999)
Portfolio Statistics
Weighted Average Maturity (Days)
Credit Quality
[graphic]
Industry Diversification (Top 5)
[graphic]
1. Authorized dealers and other firms may charge additional fees for shareholder
transactions or for advisory services. Please see their materials for details.
2. Class R shares may be purchased only under limited circumstances or by
specified classes of investors. See "How You Can Buy and Sell Shares."
3. As a percentage of purchase price or redemption proceeds, whichever is less.
4. Under limited circumstances, Class A shares may bear a 1% contingent deferred
sales charge (CDSC). See "What Share Classes We Offer."
5. Class B shares redeemed within six years of purchase bear a CDSC of 5% during
the first year, 4% during the second and third years, 3% during the fourth, 2%
during the fifth and 1% during the sixth year.
6. Class C shares redeemed within one year of purchase bear a 1% CDSC.
7. Other Expenses are based on estimated amounts for the current year. The table
does not reflect organization expenses which will be reimbursed by the adviser.
The Benefits of Money Market Funds
Money market funds often make sense as part of an overall investment plan. Money
market funds can offer investors the potential for:
. Attractive returns compared with other short-term cash management
alternatives
. Stability of principal from the pursuit of maintaining a constant price per
share of $1.00
. Monthly dividends that can be taken in cash or reinvested in additional shares
or shares of another Nuveen mutual fund
. Convenient exchange privileges that can be used to reduce your average cost of
investing in stock or bond funds.
<PAGE>
Section 2 How We Manage Your Money
To help you understand how the fund's assets are managed, this
section includes a detailed discussion of the adviser's investment
and risk management strategies. For a more complete discussion of
these matters, please consult the Statement of Additional
Information.
Who Manages the Fund
Nuveen Investment Advisory Services provides advisory and investment management
services to a broad range of clients. Nuveen Investment Advisory Services is
comprised of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp., both
of which are wholly-owned subsidiaries of John Nuveen & Co. Incorporated
(Nuveen). Nuveen Advisory Corp. (Nuveen Advisory) is the fund's investment
adviser and as such is responsible for the selection and on-going monitoring of
the securities in the fund's portfolio, managing the fund's business affairs and
providing certain clerical, bookkeeping and other administrative services.
Nuveen Advisory is located at 333 West Wacker Drive, Chicago, IL 60606.
Founded in 1898, Nuveen has been synonymous with investments that withstand the
test of time. Today, we offer a broad range of quality investments designed for
individuals seeking to build and maintain wealth. Nuveen is the sponsor and
principal underwriter of the fund's shares and has sponsored or underwritten
more than $60 billion of investment company securities. Nuveen and its
affiliates have approximately $50 billion in assets under management.
Management Fees
For providing these services, Nuveen Advisory is paid an annual management fee
according to the following schedule:
<TABLE>
<CAPTION>
Average Daily Net Asset Value Management Fee
<S> <C>
For the first $125 million 0.4500%
- ------------------------------------------------------------------------------
For the next $125 million 0.4375%
- ------------------------------------------------------------------------------
For the next $250 million 0.4250%
- ------------------------------------------------------------------------------
For the next $500 million 0.4125%
- ------------------------------------------------------------------------------
For the next $1 billion 0.4000%
- ------------------------------------------------------------------------------
For assets over $2 billion 0.3750%
- ------------------------------------------------------------------------------
</TABLE>
The fund also pays for its own operating expenses, such as custodian, transfer
agent, accounting and legal fees; brokerage commissions; distribution expenses
and extraordinary expenses.
<PAGE>
An Important Note About Risk
Although the fund's investment policies are intended to minimize interest rate
and credit risk, there can be no guarantee of this.
What Securities We Invest In
Money Market Securities
The fund invests in high quality, short-term debt securities, commonly known as
money market instruments. These generally include U.S. government securities and
repurchase agreements collateralized by these securities; bank obligations
(including certificates of deposit and bankers' acceptances); commercial paper;
and taxable short-term municipal bonds, as well as U.S. dollar denominated money
market instruments of foreign issuers and foreign banks.
Nuveen Advisory selects money market instruments based on its assessment of
current market interest rates and its market outlook. Portfolio managers are
supported by a team of specialized research analysts who review securities
available for purchase, monitor the continued creditworthiness of the fund's
investments, and analyze economic, political and demographic trends affecting
the money market. We seek to identify money market instruments with favorable
characteristics we believe are not yet recognized by the market. We then select
those higher-yielding and undervalued money market instruments that we believe
represent the most attractive values without adding undue risk. We actively
manage the maturity of the fund and its portfolio to optimally balance the
fund's yield with the fund's exposure to interest rate risk.
How We Manage Risk
Risk is inherent in all investing. Investing in a mutual fund -- even a money
market fund -- involves risk, including the risk that you may receive little or
no return on your investment or even that you may lose part of your investment.
In pursuing its investment objective, the fund assumes investment risk, chiefly
in the form of interest rate and credit risk. The fund tries to limit risk by
restricting the types and maturities of the money market instruments it
purchases, and by diversifying its investment portfolio among issuers and across
different industries. Before investing, you should consider carefully the
following risks that you assume when you invest in the fund.
Interest rate risk: Because the fund invests in fixed-income securities, the
fund is subject to interest rate risk. Interest rate risk is the risk that the
value of the fund's portfolio will decline because of rising interest rates.
Interest rate risk is generally lower for shorter-term investments and higher
for longer-term investments.
To mitigate interest rate risk, the fund, under normal market conditions,
maintains an investment portfolio with an overall weighted average maturity of
90 days or less. In addition, the fund limits its investments to money market
instruments with remaining effective maturities of 397 days or less.
Credit risk: The fund is subject to credit risk. Credit risk is the risk that an
issuer of a money market instrument will be unable to meet its obligation to
make interest and principal payments due to changing financial or market
conditions, or possibly due to Year 2000 issues. (See below) Generally, higher
rated fixed-income securities carry less credit risk than lower rated fixed-
income securities.
The fund attempts to mitigate credit risk by investing only in high quality
money market instruments that Nuveen Advisory believes present minimal credit
risks at the time of purchase. High quality instruments are:
<PAGE>
. rated in one of the two highest short-term rating categories by at least two
nationally recognized rating services, or
. if only one service has rated the instrument, rated by that service in one
of its two highest short-term rating categories, or
. unrated instruments that Nuveen Advisory judges to be of comparable quality.
In addition, the fund will not invest more than 5% of its total assets in money
market instruments rated in the second highest short-term rating categories or
in their unrated equivalents.
Year 2000 issues may affect the ability of money market issuers to meet their
interest and principal payment obligations to their holders, and may adversely
affect the money market instruments credit ratings and values. Municipal issuers
may have greater Year 2000 risks than other issuers. Nuveen Advisory is
requesting information from issuers so that Nuveen Advisory can take the
issuers' Year 2000 readiness, if made available, into account in making
investment decisions. There can be no assurance that issuers will provide this
information to Nuveen Advisory, or that issuers will begin or complete the work
necessary to address any Year 2000 issues on a timely basis. Generally, higher
rated fixed-income securities carry less credit risk than lower rated fixed-
income securities.
Concentration risk: Concentration risk is the risk that economic or other
developments affecting a single industry may cause the value of related money
market instruments to decline.
To mitigate concentration risk, the fund will not invest more than 25% of its
total assets in money market instruments issued or guaranteed by banks unless
Nuveen Advisory believes that the potential returns justify any additional risks
that may arise from doing so. Excluding banks and U.S. government securities,
the fund will not invest more than 25% of its total assets in any one industry.
This policy may not be changed without shareholder approval.
Because the fund may invest without limit in money market instruments issued or
guaranteed by banks (i.e., the banking industry), changes in the banking
industry may cause the value of the securities issued or guaranteed by banks to
decline.
Foreign investment risk: Because the fund invests in U.S. dollar denominated
securities of foreign issuers, the fund is subject to foreign investment risk.
Foreign investments pose distinct risks from domestic investments, such as
adverse political and legal developments, financial and economic instability,
and limited financial information. These investments also may have more limited
liquidity and additional settlement risks.
Insurance: The fund has purchased liability insurance against a decline in the
value of the fund's portfolio caused by the default or bankruptcy of an issuer
whose securities are owned by the fund. The insurance covers substantially all
of the fund's investments except U.S. government securities. The maximum total
coverage for all Nuveen money market funds is $50 million, with a deductible
for each loss of 0.10% of the fund's net assets. The fund pays the policy's
premiums. Coverage under the policy is subject to certain conditions and
may not be renewable upon expiration. While the policy is intended to provide
some protection against credit risk and to help the fund maintain a constant
price per share of $1.00, there is no guarantee that the insurance will do so.
<PAGE>
Section 3 How You Can Buy and Sell Shares
We offer four classes of fund shares, each with a different combination of
sales charges, fees, eligibility requirements and other features. Your
financial advisor can help you determine which class is best for you. We offer a
number of services for your convenience. Please see the Statement of Additional
Information for further details.
What Share Classes We Offer
Class A Shares
You can buy Class A shares at net asset value per share (expected to be $1.00)
without an initial sales charge. Class A shares are subject to an annual service
fee of .25% of the fund's average daily net assets.
Under limited circumstances, Class A shares may bear a 1% CDSC. You would pay
the CDSC only if:
. you purchased Class A shares of the fund by exchanging Class A shares of
another Nuveen mutual fund;
. you originally purchased $1 million or more of Class A shares of the other
Nuveen fund without a sales charge; and
. you sell your Class A shares of this fund within 18 months of when you
purchased the Class A shares of the other Nuveen fund.
The CDSC is based on either your purchase or sale price, whichever is lower. You
do not pay a CDSC on any Class A shares you purchase by reinvesting dividends.
Class B Shares
You may purchase Class B shares only if you are exchanging from Class B shares
of another Nuveen mutual fund or if you plan to make gradual transfers to Class
B shares of a Nuveen stock or bond fund within a two year period. Class B shares
are sold at net asset value per share (expected to be $1.00) without an initial
sales charge. Class B shares are subject to annual distribution and service fees
of 1% of Class B's average daily net assets. These fees reimburse Nuveen for
paying your financial adviser a sales commission as well as an on-going service
fee. Nuveen pays your financial adviser a 4% sales commission at the time of
your purchase, which includes an advance of the first year's service fee.
If you sell your shares within six years of purchase, you will pay a CDSC, as
shown in the schedule below. The CDSC is based on your purchase or sale price,
whichever is lower. You do not pay a CDSC on any Class B shares you purchase by
reinvesting dividends.
Years since purchase 0-1 1-2 2-3 3-4 4-5 5-6 over 6
CDSC 5% 4% 4% 3% 2% 1% None
................................................................................
<PAGE>
Class B shares automatically convert to Class A shares eight years after you
purchase them so that the distribution fees you pay over the life of your
investment are limited. You will continue to pay an annual service fee on any
converted Class B shares.
Class C Shares
You may purchase Class C shares only if you are exchanging from Class C of
another Nuveen mutual fund or if you plan to make gradual transfers to Class C
shares of a Nuveen stock or bond fund within a two year period. Class C shares
are sold at net asset value per share (expected to be $1.00) without an initial
sales charge. Class C shares are subject to annual distribution and service fees
of 1% of Class C's average daily net assets. These fees reimburse Nuveen for
paying your financial adviser a sales commission as well as an on-going service
fee. Nuveen pays your financial adviser a 1% sales commission at the time of
your purchase, which includes an advance of the first year's distribution and
service fees, and an additional 0.75% sales commission per year thereafter.
If you sell your shares within one year of purchase, you will pay a 1% CDSC. The
CDSC is based on either your purchase or sale price, whichever is lower. You do
not pay a CDSC on any Class C shares you purchase by reinvesting dividends.
Class R Shares
You may purchase Class R shares only under certain limited circumstances
described below and in the Statement of Additional Information. Class R shares
are sold at net asset value (expected to be $1.00) without an initial or
contingent deferred sales charge. Class R shares also are not subject to
distribution or service fees.
You are eligible to purchase Class R shares if you are:
. exchanging Class R shares of another Nuveen mutual fund
. a client of certain asset-based fee programs and bank trust departments
. an employee or director of Nuveen, or an immediate family member
. an employee of an Authorized Dealer or
. a fund officer or trustee
Additional categories of eligible investors for Class R shares are described in
the Statement of Additional Information. More information is available from your
financial adviser or by calling (800) 257-8787. The fund may modify the
eligibility requirements or discontinue eligibility categories at any time.
How to Buy Shares
The fund offers four classes of shares. Fund shares may be purchased at net
asset value on any business day, which is any day the Federal Reserve Bank of
Boston is normally open for business. Generally, the Bank is closed on weekends
and national holidays. The fund's net asset value is determined at 12:00 Eastern
Time on each business day, and on other days where there is significant trading
activity in the fund's shares. If the fund receives your order in proper form
before 12:00 noon and the fund's custodian receives federal funds from you
before 3:00 p.m., Eastern Time, you will receive the dividend declared and net
asset value computed on that day. Otherwise, you will receive the next business
day's dividend and net asset value.
<PAGE>
Through a Financial Adviser
You may purchase shares through your financial adviser, who can handle all the
details for you, including opening a new account. Financial advisers also can
help you review your financial needs and formulate long-term investment goals
and objectives. In addition, financial advisers generally can help you develop a
customized financial plan, select investments, and monitor and review your
portfolio on an on-going basis to help assure that your investments continue to
meet your needs as circumstances change. Financial advisers are paid for on-
going investment advice and services either from fund sales charges and fees or
by charging you a separate fee in lieu of a sales charge. If you do not have a
financial adviser, call (800) 257-8787 and Nuveen can refer you to one in your
area.
By Mail
You may open an account and buy shares through the mail by completing the
enclosed application and mailing it along with your check to the fund, c/o
Nuveen Investor Services, P.O. Box 5186, Bowling Green Station, New York, NY
10274-5186.
Investment Minimums
Minimum Initial Investment
Regular Accounts $3,000
Traditional/Roth IRAs $1,000
Education IRAs $ 500
Minimum Systematic Investments $ 50
Minimum Subsequent Investments $ 50
The fund may waive or modify the minimum investment requirements at its
discretion.
Systematic Investing
Once you have established a fund account, you may participate in the fund's
systematic investment plan. Systematic investing allows you to make regular
investments through automatic deductions from your bank account or directly from
your paycheck. The minimum automatic deduction is $50 per month. There is no
charge to participate in the fund's systematic investment plan. You can stop the
deductions at any time by notifying the fund in writing.
From Your Bank Account
You can make systematic investments by authorizing us to draw preauthorized
checks on your bank account. To do this, simply complete the appropriate section
of the account application form or submit an Account Update Form.
From Your Paycheck
With your employer's consent, you can make systematic investments by authorizing
your employer to deduct monies from your paycheck. To do this, contact your
financial adviser or call Nuveen at (800) 257-8787.
<PAGE>
Special Services
To help make your investing with us easy and efficient, we offer you the
following services at no extra cost.
Exchanging Shares
You may exchange fund shares into an identically registered account at any time
for the same class of another Nuveen mutual fund available in your state. Your
exchange must meet the minimum purchase requirements of the fund into which you
are exchanging. You may have to pay a sales charge when exchanging shares that
you purchased without a sales charge for shares that are sold with a sales
charge. Please see the Statement of Additional Information for details.
The fund may change or cancel its exchange policy at any time upon 60 days'
notice.
Reinstatement Privilege
If you redeem fund shares, you may reinvest all or part of your redemption
proceeds up to one year later without incurring any additional charges. To do
this, you must reinvest in the same share class. If you paid a CDSC when you
sold your shares, Nuveen will refund your CDSC and reinstate your holding
period for purposes of calculating any CDSC charged should you sell your shares
again. You may use this reinstatement privilege only once for any redemption.
Fund Direct(SM)
The Fund Direct Program allows you to link your fund account to your bank
account, transfer money electronically between these accounts, and perform a
variety of account transactions, including purchasing shares by telephone and
investing through a systematic investment plan. You also may have dividends,
distributions, redemption payments or systematic withdrawal plan payments sent
directly to your bank account. Your financial adviser can help you complete
the forms for these services, or you can call Nuveen at (800) 257-8787 for
copies of the necessary forms.
How to Sell Shares
You may sell (redeem) your shares on any business day. You will receive the
share price next determined after the fund has received your properly completed
redemption request. If you are selling shares purchased recently with a check,
you will not receive your redemption proceeds until your check has cleared. This
may take up to ten days from your purchase date.
Through Your Financial Adviser
You may sell your shares through your financial adviser who can prepare the
necessary documentation. Your adviser may charge you for this service.
[EXCLAMATION LOGO APPEARS HERE]
An Important Note About Telephone Transactions
Although Nuveen Investor Services has certain safeguards and procedures to
confirm the identity of callers, it will not be liable for losses resulting from
following telephone instructions it reasonably believes to be genuine. Also, you
should verify your trade confirmations immediately upon receipt.
<PAGE>
By Telephone
If you have authorized telephone redemption privileges, you can redeem your
shares by calling (800) 257-8787. Telephone redemptions are not available if you
own shares in certificate form and may not exceed $50,000. Checks will only be
issued to you as the shareholder of record and mailed to your address of record.
If you have established Fund Direct privileges, you may have redemption proceeds
transferred electronically to your bank account. We will normally mail your
check the next business day.
By Check
You may request that the fund provides you with redemption checks. These checks
may be made payable to any person in the amount of $500 or more. Simply fill out
the appropriate section of the application form and submit the enclosed
signature card. You must have enough shares in your account to cover the amount
of each check you write or it will be returned. Writing checks from your fund
account does not mean that your account is like a bank checking account. This
check redemption privilege may be modified or terminated at any time.
By Mail
You can sell your shares at any time by sending a written request to the fund,
c/o Nuveen Investor Services, P.O. Box 5186, Bowling Green Station, New York, NY
10274-5186. Your redemption request must include the following information:
. The fund's name;
. Your name and account number;
. The dollar or share amount you wish to redeem;
. The signature of each owner exactly as it appears on the account;
. The name of the person to whom you want your redemption
proceeds paid (if other than to the shareholder of record);
. The address where you want your redemption proceeds sent (if other
than the address of record); and
. Any required signature guarantees.
The fund will normally mail your check the next business day after it receives
your redemption request, but in no event more than seven days after the fund
receives your request. If you purchased your shares by check, your redemption
proceeds will not be mailed until your check has cleared. This may take up to 10
days from your purchase date.
CDSCs
While the fund does not charge an administrative fee for processing redemptions,
you may be assessed a CDSC. If you own shares subject to a CDSC and shares
without a CDSC, the fund will first redeem the shares that are not subject to a
CDSC and then redeem the shares you have owned for the longest period of time,
unless you ask the fund to redeem your shares in a different order. No CDSC is
imposed on shares you buy through the reinvestment of dividends and capital
gains, if any. The holding period for calculating the applicable CDSC is
determined on a monthly basis and begins on the first day of the month in which
you buy shares. CDSCs are calculated on your purchase price or redemption
proceeds, whichever is lower, then deducted from your redemption proceeds and
paid to Nuveen. CDSCs may be waived under certain special circumstances, as
described in the Statement of Additional Information.
<PAGE>
Signature Guarantees
Signature guarantees are required if you are redeeming more than $50,000, you
want the check payable to someone other than the shareholder of record, you want
the check sent to another address, or if the address on the fund's records has
been changed within the last 60 days. Signature guarantees must be obtained from
a bank, brokerage firm or other financial intermediary that is a member of an
approved Medallion Guarantee Program or that is otherwise approved by the fund.
A notary public cannot provide a signature guarantee.
Systematic Withdrawal
If the value of your fund account is at least $10,000, you may participate in
the fund's systematic withdrawal plan. The plan allows you to make regular
withdrawals through automatic deductions from your fund account. The minimum
automatic withdrawal is $50 per month. You may elect to receive payments
monthly, quarterly, semi-annually or annually, and may choose to receive a
check, or have the monies transferred directly to your bank account (see
"Special Services--Fund Direct" above), paid to a third party or sent payable to
you at an address other than the address on the fund's records. To participate
in the systematic withdrawal plan, simply complete the appropriate section of
the account application or submit an Account Update Form. You should not
participate in the systematic withdrawal plan if you intend to make concurrent
purchases of Class B or Class C shares, as you may unnecessarily pay a CDSC.
Redemptions In-Kind
The fund generally pays redemption proceeds in cash. Under unusual conditions
that make cash payment unwise and for the protection of existing shareholders,
the fund may pay all or a portion of your redemption proceeds in securities or
other fund assets. Although it is unlikely that your shares would be redeemed
in-kind, you would probably have to pay transaction costs to sell the securities
distributed to you.
[EXCLAMATION LOGO APPEARS HERE]
An Important Note About Involuntary Redemption
From time to time, the fund may establish minimum account size requirements. The
fund reserves the right to liquidate your account upon 30 days' written notice
if the value of your account falls below an established minimum. The fund has
set a minimum account balance of $100 unless you have an active Nuveen Defined
Portfolio reinvestment account. You will not be assessed a CDSC on an
involuntary redemption.
<PAGE>
Section 4 General Information
To help you understand the tax implications of investing in the
fund, this section includes important information about fund
distributions. We discuss other general information about the
fund's operations as well.
Dividends, Distributions and Taxes
The fund pays dividends monthly and any capital gains annually in December. The
fund declares dividends on each business day to shareholders of record on that
day.
Payment and Reinvestment Options
The fund automatically reinvests your dividends in additional fund shares unless
you request otherwise. You may request to have your dividends paid to you by
check, deposited directly into your bank account, paid to a third party, sent to
an address other than the address on the fund's records, or reinvested in shares
of another Nuveen mutual fund. For more information, contact your financial
adviser or call Nuveen at (800) 257-8787.
Taxes and Tax Reporting
The fund's monthly dividends are taxable as ordinary income. Although the fund
does not seek to realize capital gains, the fund may realize and distribute
capital gains from time to time as a result of the fund's normal investment
activities. In December, the fund distributes any capital gains realized over
the preceding year. Net short-term gains are taxable as ordinary income. Net
long-term capital gains are taxable as long-term capital gains regardless of how
long you have owned your shares.
Early in each year, you will receive a statement detailing the amount and nature
of all dividends and capital gains that you were paid during the prior year. If
you hold your investment at the firm where you purchased your fund shares, you
will receive the statement from that firm. If you hold your shares at the fund,
Nuveen will send you the statement. The tax status of your dividends is the same
whether you reinvest your dividends or elect to receive them in cash.
Please note that if you do not furnish the fund with your correct Social
Security number or employer identification number, federal law requires the fund
to withhold federal income tax from your distributions and redemption proceeds,
currently at a rate of 31%.
Please see the Statement of Additional Information and your tax adviser for more
information about taxes.
Distribution and Service Plans
Nuveen serves as the selling agent and distributor of the fund's shares. In this
capacity, Nuveen manages the offering of the fund's shares and is responsible
for all sales and promotional activities, and for providing certain services to
shareholders. The fund has adopted a distribution and service plan in accordance
with Rule 12b-1 under the Investment Company Act of 1940 to reimburse Nuveen for
these services. Rule 12b-1 permits a mutual fund to pay distribution fees for
the sale and distribution of its shares.
<PAGE>
See "What Share Classes We Offer" for a description of the distribution and
service fees paid under this plan.
Nuveen receives the distribution fee for Class B and Class C shares, primarily
for providing compensation to authorized dealers, including Nuveen, in
connection with the distribution of shares. Because these fees are paid out of
the fund's assets on an on-going basis, over time these fees will increase the
cost of your investment and may cost you more than paying other types of sales
charges. The maximum distribution fee payable under the plan is .75% of the
relevant class' average daily net assets.
Nuveen uses the service fee for Class A, Class B and Class C shares to
compensate authorized dealers, including Nuveen, for providing on-going account
services to shareholders. These services may include establishing and
maintaining your accounts, answering your inquiries, and providing other
personal services to you. These fees also compensate Nuveen for other expenses,
including printing and distributing prospectuses to persons other than
shareholders, and preparing, printing, and distributing advertising, sales
literature and reports to shareholders that are used in connection with the sale
of shares. The maximum service fee payable under the plan is .25% of the
relevant class' average daily net assets.
Net Asset Value
The price you pay and receive for your shares is based on the fund's net asset
value per share, which is determined at 12:00 noon Eastern Time on each business
day. Because the fund seeks to maintain a constant price per share of $1.00, the
fund values its portfolio securities using the amortized cost method, which
approximates market value and is described in more detail in the Statement of
Additional Information. There can be no assurance that the fund will be able to
maintain a constant price per share of $1.00.
Fund Service Providers
The custodian of the fund's assets is The Chase Manhattan Bank, 4 New York
Plaza, New York, NY 10004-2413. Chase also provides certain accounting services
to the fund. The fund's transfer, shareholder services and dividend paying
agent, Chase Global Funds Services Company, P.O. Box 5186, New York, NY 10274-
5186, performs bookkeeping, data processing and administrative services for the
maintenance of shareholder accounts.
Year 2000
The fund's service providers rely on computer systems to manage the fund's
investments, process shareholder transactions and provide shareholder account
maintenance. Because of the way computers historically have stored dates, some
of these systems currently may not be able to correctly process activity
occurring in the year 2000. Nuveen is working with the fund's service providers
to adapt their systems to address this issue. Nuveen and the fund expect that
the necessary work will be completed on a timely basis, although there can be no
assurance of this.
<PAGE>
Nuveen Mutual Funds
Nuveen offers a variety of mutual funds designed to help you reach your
financial goals. The funds below are grouped by investment objective.
Growth
Nuveen Rittenhouse Growth Fund
Growth and Income
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
Dividend and Growth Fund
European Value Fund
Income
Income Fund
Tax-Free Income
National Municipal Bond Funds
Long-term
Insured Long-term
Intermediate-term
Limited-term
State Municipal Bond Funds
Arizona Louisiana North Carolina
California/1/ Maryland Ohio
Colorado Massachusetts/1/ Pennsylvania
Connecticut Michigan Tennessee
Florida Missouri Virginia
Georgia New Jersey Wisconsin
Kansas New Mexico
Kentucky New York/1/
Cash Reserves
Money Market Fund
Municipal Money Market Fund
California Tax-Exempt Money Market Fund
New York Tax-Exempt Money Market Fund
Several additional sources of information are available to you. The Statement of
Additional Information, incorporated by reference into this prospectus, contains
detailed information on fund policies and operations. Shareholder reports
contain management's discussion of market conditions, investment strategies and
performance results as of the fund's latest semi-annual or annual fiscal year
end. Call Nuveen at (800) 257-8787 to request a free copy of any of these
materials or other fund information, or ask your financial adviser for copies.
You also may obtain this and other fund information directly from the Securities
and Exchange Commission (SEC). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (800) SEC-0330
for room hours and operation. You also may request fund information by writing
to the SEC's Public Reference Section, Washington, D.C. 20549. The fund's
Investment Company Act file number is 811-09267.
1 Long-term and insured long term portfolios.
[NUVEEN LOGO APPEARS HERE]
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
<PAGE>
Statement of Additional Information
June 10, 1999
Nuveen Money Market Trust
333 West Wacker Drive
Chicago, Illinois 60606
Nuveen Money Market Trust
NUVEEN MONEY MARKET FUND
This Statement of Additional Information is not a prospectus. This Statement
of Additional Information should be read in conjunction with the Prospectus of
the Nuveen Money Market Fund dated June 10, 1999. The Prospectus may be
obtained without charge from certain securities representatives, banks, and
other financial institutions that have entered into sales agreements with John
Nuveen & Co. Incorporated, or from the Fund by mailing a written request to
the Fund, c/o John Nuveen & Co. Incorporated ("Nuveen"), 333 West Wacker
Drive, Chicago, Illinois 60606 or by calling (800) 257-8787.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Policies and Investment Portfolio S-2
- ------------------------------------------------------------
Management S-6
- ------------------------------------------------------------
Investment Adviser and Investment Management Agreement S-10
- ------------------------------------------------------------
Portfolio Transactions S-10
- ------------------------------------------------------------
Net Asset Value S-11
- ------------------------------------------------------------
Tax Matters S-13
- ------------------------------------------------------------
Performance Information S-15
- ------------------------------------------------------------
Additional Information About Purchases and Sales S-16
- ------------------------------------------------------------
Distribution and Service Plan S-21
- ------------------------------------------------------------
Other Information Regarding Fund Shares S-22
- ------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
Principal Underwriter Investment Adviser Independent Public Accountants
John Nuveen & Co. Incorporated Nuveen Advisory Corp., for the Fund
Subsidiary of John Nuveen & Arthur Andersen LLP
Chicago: Co. Incorporated 33 West Monroe Street
333 West Wacker Drive 333 West Wacker Drive Chicago, Illinois 60603
Chicago, Illinois 60606 Chicago, Illinois 60606
(312) 917-7700
New York: Custodian Transfer and Dividend
10 East 50th Street The Chase Manhattan Bank Disbursing Agent
New York, New York 10022 4 New York Plaza Chase Global Funds
(212) 207-2000 New York, New York 10004 Services Company
P.O. Box 5186
New York, New York 10274
</TABLE>
<PAGE>
INVESTMENT POLICIES AND INVESTMENT PORTFOLIO
Fundamental Policies
The Fund's investment objective and certain fundamental investment policies
are described in the Prospectus. The Fund, as a fundamental policy, may not,
without the approval of the holders of a majority of the shares:
(1) Invest more than 5% of its total assets in securities of any one
issuer, excluding the United States government, its agencies and
instrumentalities.
(2) Borrow money, except from banks for temporary or emergency purposes
and not for investment purposes and then only in an amount not exceeding
(a) 10% of the value of its total assets at the time of borrowing or (b)
one-third of the value of the Fund's total assets including the amount
borrowed, in order to meet redemption requests which might otherwise
require the untimely disposition of securities. While any such borrowings
exceed 5% of the Fund's total assets, no additional purchases of investment
securities will be made by the Fund. 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 days. To do this, the Fund may
have to sell a portion of its investments at a time when it may be
disadvantageous to do so.
(3) Issue senior securities as defined in the Investment Company Act of
1940, except to the extent such issuance might be involved with respect to
borrowings described under item (1) above.
(4) Underwrite any issue of securities, except to the extent that the
purchase or sale of securities in accordance with its investment objective,
policies and limitations, may be deemed to be an underwriting.
(5) Purchase or sell real estate, but this shall not prevent the Fund
from investing in securities secured by real estate or interests therein or
foreclosing upon and selling such security.
(6) Purchase or sell commodities or commodities contracts or oil, gas or
other mineral exploration or development programs.
(7) Make loans, other than by entering into repurchase agreements and
through the purchase of securities or temporary investments in accordance
with its investment objective, policies and limitations.
(8) Make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance of
transactions.
(9) Invest more than 25% of its total assets in securities of issuers in
any one industry; provided, however, that such limitations shall not be
applicable to the banking industry and obligations issued or guaranteed by
the U.S. government, its agencies or instrumentalities.
In addition, the Fund, as a non-fundamental policy, may not invest more than
10% of its net assets in "illiquid" securities, including repurchase agreements
maturing in more than seven days.
For the purpose of applying the limitations set forth in paragraph (1) above,
an issuer shall be deemed the sole issuer of a security when its assets and
revenues are separate from other governmental entities and its securities are
backed only by its assets and revenues. Similarly, in the case of a non-
governmental user, such as an industrial corporation or a privately owned or
operated hospital, if the security is backed only by the assets and revenues of
the non-governmental user, then such non-governmental user would be deemed to
be the sole issuer. Where a security is also backed by the enforceable
obligation of a superior or unrelated governmental entity or
S-2
<PAGE>
other entity (other than a bond insurer), it shall also be included in the
computation of securities owned that are issued by such governmental or other
entity.
Where a security is guaranteed by a governmental entity or some other
facility, such as a bank guarantee or letter of credit, such a guarantee or
letter of credit would be considered a separate security and would be treated
as an issue of such government, other entity or bank. Where a security is
insured by bond insurance, it shall not be considered a security issued or
guaranteed by the insurer; instead the issuer of such security will be
determined in accordance with the principles set forth above. The foregoing
restrictions do not limit the percentage of the Fund's assets that may be
invested in securities insured by any single insurer. It is a fundamental
policy of the Fund, which cannot be changed without the approval of the holders
of a majority of shares of such Fund, that the Fund will not hold securities of
a single bank, including securities backed by a letter of credit of such bank,
if such holdings would exceed 10% of the total assets of the Fund.
The foregoing restrictions and limitations, as well as the Fund's policies as
to ratings of fund investments, will apply only at the time of purchase of
securities, and the percentage limitations will not be considered violated
unless an excess or deficiency occurs or exists immediately after and as a
result of an acquisition of securities, unless otherwise indicated.
The foregoing fundamental investment policies, together with the investment
objective of the Fund, 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.
General Information
The Nuveen Money Market Trust (the "Trust") is an open-end management series
investment company organized as a Massachusetts business trust on January 15,
1999. The Fund is an open-end, diversified management investment company
organized as a series of the Trust. The Trust is an open-end management series
company under SEC Rule 18f-2. The Fund is a separate series issuing its own
shares and has four classes of shares: Class A, Class B, Class C and Class R.
The Trust currently has five series. Certain matters under the Investment
Company Act of 1940 which must be submitted 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 series affected by such matter.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of a trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the Declaration of 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 Declaration of Trust
further provides for indemnification out of the assets and property of the
Trust for all loss and expense of any shareholder 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 existed and the Trust itself were unable to meet its
obligations. The Trust believes the likelihood of these circumstances is
remote.
Year 2000 Issues
The "Year 2000" problem refers to the fact that many computer programs use
only the last two digits of a year, and do not recognize a year that begins
with "20" instead of "19." If this problem is not corrected, computers could
function improperly or not at all, which could affect the global economy. The
SEC has urged securities issuers to disclose the steps they are taking to
correct any Year 2000 problems.
S-3
<PAGE>
The Fund invests primarily in money market instruments. If the issuers of
these instruments do not correct any Year 2000 problems in a timely manner,
they could experience problems in conducting their operations or in making
payments on their securities, which could cause the value of these securities
to decline. Issuers could experience three types of Year 2000 problems. First,
if an issuer's internal computer systems experience Year 2000 problems, this
could disrupt an issuer's operations (such as its ability to collect local
taxes or fees). Second, an issuer may rely on other parties for the payments
that support its debt service, such as servicers that collect mortgage or
student loan payments, and those third parties may have Year 2000 problems that
interfere with their ability to forward payments to the issuer. Third, an
issuer may have mechanical problems in sending payments to its securities
holders.
Nuveen Advisory is obtaining information about the Year 2000 readiness of the
issuers of its portfolio securities as part of its on-going surveillance of the
creditworthiness of those issuers.
Portfolio Securities
As described in the Prospectus, the Fund invests primarily in money market
instruments issued by banks, corporations and governments.
U.S. Government Direct Obligations are issued by the United States
Treasury and include bills, notes and bonds.
--Treasury bills are issued with maturities of up to one year. They are
issued in bearer form, are sold on a discount basis and are payable at
par value at maturity.
--Treasury notes are longer-term interest bearing obligations with
original maturities of one to seven years.
--Treasury bonds are longer-term interest-bearing obligations with
original maturities from five to thirty years.
U.S. Government Agencies Securities--Certain federal agencies have been
established as instrumentalities of the United States Government to supervise
and finance certain types of activities. These agencies include, but are not
limited to, the Bank for Cooperatives, Federal Land Banks, Federal Intermediate
Credit Banks, Federal Home Loan Banks, Federal National Mortgage Association,
Government National Mortgage Association, Export-Import Bank of the United
States, and Tennessee Valley Authority. Issues of these agencies, while not
direct obligations of the United States Government, are either backed by the
full faith and credit of the United States or are guaranteed by the Treasury or
supported by the issuing agencies' right to borrow from the Treasury. There can
be no assurance that the United States government itself will pay interest and
principal on securities as to which it is not legally so obligated.
Certificates of Deposit (CDs)--A certificate of deposit is a negotiable
interest bearing instrument with a specific maturity. CDs are issued by banks
in exchange for the deposit of funds and normally can be traded in the
secondary market, prior to maturity. The Fund will only invest in U.S. dollar
denominated CDs issued by U.S. banks with assets of $1 billion or more.
Commercial Paper--Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations. Maturities on these issues
vary from a few days to nine months. Commercial paper may be purchased from
U.S. corporations.
Other Corporate Obligations--The Fund may purchase notes, bonds and
debentures issued by corporations if at the time of purchase there is less than
397 days remaining until maturity or if they carry a variable or floating rate
of interest.
S-4
<PAGE>
Repurchase Agreements--A repurchase agreement is a contractual agreement
whereby the seller of securities agrees to repurchase the same security at a
specified price on a future date agreed upon by the parties. The agreed upon
repurchase price determines the yield during the Fund's holding period.
Repurchase agreements are considered to be loans collateralized by the
underlying security that is the subject of the repurchase contract. The Fund
will only enter into repurchase agreements with dealers, domestic banks or
recognized financial institutions that in the opinion of the Fund's investment
advisor, Nuveen Advisory Corp. ("Nuveen Advisory") present minimal credit risk.
The risk to the Fund is limited to the ability of the issuer to pay the agreed-
upon repurchase price on the delivery date; however, although the value of the
underlying collateral at the time the transaction is entered into always equals
or exceeds the agreed-upon repurchase price, if the value of the collateral
declines there is a risk of loss of both principal and interest. In the event
of default, the collateral may be sold but the Fund might incur a loss if the
value of the collateral declines, and might incur disposition costs or
experience delays in connection with liquidating the collateral. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
security, realization upon the collateral by the Fund may be delayed or
limited. Nuveen Advisory will monitor the value of collateral at the time the
transaction is entered into and at all times subsequent during the term of the
repurchase agreement in an effort to determine that the value always equals or
exceeds the agreed upon price. In the event the value of the collateral
declined below the repurchase price, Nuveen Advisory will demand additional
collateral from the issuer to increase the value of the collateral to at least
that of the repurchase price. The Fund will not invest more than 10% of its net
assets in repurchase agreements maturing in more than seven days.
Asset-Backed Securities--The Fund may purchase notes, bonds and debentures
that are backed by assets such as credit card, automobile, corporate loan
receivables, consumer loan receivables, retail installment loans, or
participations in pools of leases. At the time of purchase, these securities
must have 397 days or less remaining until maturity. Credit support for these
securities may be based on the underlying assets and/or provided through credit
enhancements by a third party. The values of these securities are sensitive to
changes quality of the underlying collateral, the credit strength of the credit
enhancements, changes in interest rates, and at times the financial condition
of the issuer. Principal payments on these securities may be provided through a
third party liquidity support facility.
Credit and Liquidity Supports--These may be employed by issuers or sellers of
securities to reduce the credit risk of the security, or to provide a means of
funding the payment of principal and/or interest on the security upon maturity
or upon the owner's exercise of its right to tender the security. Credit
supports include letters of credit, insurance and guarantees provided by
domestic or foreign entities. Liquidity supports include puts, demand features,
lines of credit and standby bond purchase agreements. Most of these
arrangements essentially substitute the credit of the support provider for that
of the issuer of (or assets standing behind) the underlying security.
Variable and Floating Rate Instruments--Certain money market instruments may
carry variable or floating rates of interest. Such instruments bear interest at
rates which are not fixed, but which vary with changes in specified market
rates or indices, such as a bank prime rate or tax-exempt money market index.
Variable rate notes are adjusted to current interest rate levels at certain
specified times, such as every 30 days, as set forth in the instrument. A
floating rate note adjusts automatically whenever there is a change in its base
interest rate adjustor, e.g., a change in the prime lending rate or specified
interest rate indices. Typically such instruments carry demand features
permitting the Fund to recover the full principal amount thereof upon specified
notice.
Defensive Investment Strategies
The Fund may hold up to 100% of its assets in cash as a temporary defensive
measure in response to adverse market conditions or to provide liquidity.
During these periods, the average maturity of the fund's investment portfolio
may fluctuate.
S-5
<PAGE>
MANAGEMENT
The management of the Trust, including general supervision of the duties
performed by Nuveen Advisory under the Investment Management Agreement, is the
responsibility of its Board of Trustees. There are seven trustees of the Trust,
one of whom is an "interested person" (as the term "interested person" is
defined in the Investment Company Act of 1940) and six of whom are
"disinterested persons." None of the trustees who are not "interested persons"
of the Fund has ever been a director or employee of, or consultant to, Nuveen
or its affiliates. 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.
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
Positions and Principal Occupations
Name and Address Age Offices with Funds During Past Five Years
- --------------------------------------------------------------------------------
<C> <C> <C> <S>
Timothy R. Schwertfeger*+ 50 Chairman of the Board Chairman of the Board of
333 West Wacker Drive and Trustee the Funds (since July
Chicago, IL 60606 1996); Trustee and
President of the Funds
advised by Nuveen
Institutional Advisory
Corp. (since July 1996);
Chairman (since July
1996), Director, and
previously Executive
Vice President, of The
John Nuveen Company,
John Nuveen & Co.,
Nuveen Advisory Corp.
and Nuveen Institutional
Advisory Corp.; Director
(since 1996) of
Institutional Capital
Corporation; Chairman
and Director of Nuveen
Asset Management, Inc.;
Chairman and Director of
Rittenhouse Financial
Services Inc. (since
1999).
- --------------------------------------------------------------------------------
Robert P. Bremner 58 Trustee Private Investor and
3725 Huntington Street, N.W. Management Consultant.
Washington, D.C. 20015
- --------------------------------------------------------------------------------
Lawrence H. Brown 64 Trustee Retired (August 1989) as
201 Michigan Avenue Senior Vice President of
Highwood, IL 60040 The Northern Trust
Company (banking and
trust industry).
- --------------------------------------------------------------------------------
Anne E. Impellizzeri 66 Trustee Executive Director
3 West 29th Street (since 1998) of Manitoga
New York, NY 10001 (center for Russell
Wright's design/home and
landscape); formerly
President and Chief
Executive Officer of
Blanton-Peale,
Institutes of Religion
and Health (a training
and counseling
organization).
- --------------------------------------------------------------------------------
Peter R. Sawers 66 Trustee Adjunct Professor of
22 The Landmark Business and Economics,
Northfield, IL 60093 University of Dubuque,
Iowa; Adjunct Professor,
Lake Forest Graduate
School of Management,
Lake Forest, Illinois;
Chartered Financial
Analyst; Certified
Management Consultant.
- --------------------------------------------------------------------------------
William J. Schneider 54 Trustee Senior Partner and Chief
4000 Miller-Valentine Ct. Operating Officer,
P.O. Box 744 Miller-Valentine
Dayton, OH 45401 Partners, Vice
President, Miller-
Valentine Group
(commercial real
estate); Member
Community Advisory
Board, National City
Bank, Dayton, Ohio.
- --------------------------------------------------------------------------------
</TABLE>
S-6
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------
<CAPTION>
Positions and Principal Occupations
Name and Address Age Offices with Funds During Past Five Years
- ---------------------------------------------------------------------------------------
<C> <C> <C> <S>
Judith M. Stockdale 51 Trustee Executive Director,
35 E. Wacker Drive Gaylord and Dorothy
Suite 2600 Donnelley Foundation, a
Chicago, IL 60601 private family
foundation (since 1994);
prior thereto, Executive
Director, Great Lakes
Protection Fund (from
1990 to 1994).
- ---------------------------------------------------------------------------------------
Alan G. Berkshire+ 38 Vice President and Asst. Vice President and
333 West Wacker Drive Secretary since 1998 General Counsel (since
Chicago, IL 60606 September 1997) and
Secretary (since May
1998) of The John Nuveen
Company, John Nuveen &
Co. Incorporated, Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp.; prior
thereto, partner in the
law firm of Kirkland &
Ellis.
- ---------------------------------------------------------------------------------------
Peter H. D'Arrigo 31 Vice President and Treasurer Vice President of John
333 West Wacker Drive since 1999 Nuveen & Co.
Chicago, IL 60606 Incorporated (since
January 1999), prior
thereto. Assistant Vice
President (from January
1997); formerly,
Associate of John Nuveen
& Co. Incorporated;
Chartered Financial
Analyst.
- ---------------------------------------------------------------------------------------
Michael S. Davern+ 41 Vice President since 1997 Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 January 1997); prior
thereto, Vice President
and Portfolio Manager of
Flagship Financial, Inc.
(from September 1991 to
January 1997).
- ---------------------------------------------------------------------------------------
Lorna C. Ferguson+ 53 Vice President since 1998 Vice President of John
333 West Wacker Drive Nuveen & Co.
Chicago, IL 60606 Incorporated; Vice
President of Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp. (since
January 1998).
- ---------------------------------------------------------------------------------------
William M. Fitzgerald+ 35 Vice President since 1996 Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 December 1995); prior
thereto, Assistant Vice
President of
Nuveen Advisory Corp.
(from September 1992 to
December 1995);
Chartered Financial
Analyst.
- ---------------------------------------------------------------------------------------
Stephen D. Foy+ 44 Vice President and Controller Vice President of John
333 West Wacker Drive since 1998 Nuveen & Co.
Chicago, IL 60606 Incorporated and (since
May 1998) The John
Nuveen Company;
Certified Public
Accountant.
- ---------------------------------------------------------------------------------------
J. Thomas Futrell+ 43 Vice President since 1991 Vice President of Nuveen
333 West Wacker Drive Advisory Corp.;
Chicago, IL 60606 Chartered Financial
Analyst.
- ---------------------------------------------------------------------------------------
Richard A. Huber+ 36 Vice President since 1997 Vice President of Nuveen
333 West Wacker Drive Institutional Advisory
Chicago, IL 60606 Corp. (since March 1998)
and Nuveen Advisory
Corp. (since January
1997); prior thereto,
Vice President and
Portfolio Manager of
Flagship Financial, Inc.
- ---------------------------------------------------------------------------------------
Steven J. Krupa+ 41 Vice President since 1990 Vice President of Nuveen
333 West Wacker Drive Advisory Corp.
Chicago, IL 60606
- ---------------------------------------------------------------------------------------
</TABLE>
S-7
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------
<CAPTION>
Positions and Principal Occupations
Name and Address Age Offices with Funds During Past Five Years
- ------------------------------------------------------------------------------------
<C> <C> <C> <S>
Larry W. Martin+ 47 Vice President and Vice President,
333 West Wacker Drive Asst. Secretary since 1993 Assistant Secretary and
Chicago, IL 60606 Assistant General
Counsel of John Nuveen &
Co. Incorporated; Vice
President and Assistant
Secretary of Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp.,
Assistant Secretary of
The John Nuveen Company
and (since January 1997)
Nuveen Asset Management
Inc.
- ------------------------------------------------------------------------------------
Edward F. Neild, IV+ 33 Vice President since 1996 Vice President of Nuveen
333 West Wacker Drive Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional
Advisory Corp. (since
September 1996); prior
thereto, Assistant Vice
President of Nuveen
Advisory Corp. (from
December 1993 to
September 1996) and
Nuveen Institutional
Advisory Corp. (from May
1995 to September 1996);
Chartered Financial
Analyst.
- ------------------------------------------------------------------------------------
Stephen S. Peterson+ 41 Vice President since 1997 Vice President, (since
333 West Wacker Drive September 1997),
Chicago, IL 60606 Assistant Vice President
(from September 1996 to
September 1997), and
Portfolio Manager prior
thereto, of Nuveen
Advisory Corp.;
Chartered Financial
Analyst.
- ------------------------------------------------------------------------------------
Stuart W. Rogers+ 43 Vice President since 1997 Vice President of John
333 West Wacker Drive Nuveen & Co.
Chicago, IL 60606 Incorporated.
- ------------------------------------------------------------------------------------
Thomas C. Spalding, Jr.+ 47 Vice President since 1980 Vice President of Nuveen
333 West Wacker Drive Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional
Advisory Corp.;
Chartered Financial
Analyst.
- ------------------------------------------------------------------------------------
William S. Swanson+ 33 Vice President since 1998 Vice President of John
333 West Wacker Drive Nuveen & Co.
Chicago, IL 60606 Incorporated (since
October 1997); Assistant
Vice President (from
September 1996 to
October 1997) and
formerly, Associate;
Chartered Financial
Analyst.
- ------------------------------------------------------------------------------------
Gifford R. Zimmerman+ 42 Vice President since 1993 Vice President,
333 West Wacker Drive and Secretary since 1998 Assistant Secretary and
Chicago, IL 60606 Associate General
Counsel, formerly
Assistant General
Counsel (since September
1997) of John Nuveen &
Co. Incorporated; Vice
President and Assistant
Secretary of Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp.;
Assistant Secretary of
The John Nuveen Company
(since May 1994);
Chartered Financial
Analyst.
</TABLE>
- --------
*Mr. Schwertfeger is an interested person of the Fund.
+Person is affiliated with the Fund and affiliated with the Fund's adviser or
principal underwriter.
Timothy Schwertfeger and Peter Sawers serve as members of the Executive
Committee of the Board of Trustees. The Executive Committee, which meets
between regular meetings of the Board of Trustees, is authorized to exercise
all of the powers of the Board of Trustees; provided, that the scope of the
powers of the Executive Committee, unless otherwise specifically authorized by
the full Board, shall be limited to (i) emergency
S-8
<PAGE>
matters where assembling the full Board in a timely manner is impractical (and
in which event management would take all reasonable steps to quickly notify the
individual Board members of the actions taken by the Executive Committee) or
(ii) matters of an administrative or ministerial nature.
The trustees of the Trust are directors or trustees, as the case may be, of
36 Nuveen open-end funds and 55 Nuveen closed-end funds. Mr. Schwertfiger is
also trustee of 11 Nuveen open-end and closed-end funds advised by Nuveen
Institutional Advisory Corp.
The following table sets forth compensation expected to be paid by the Fund
to each of the trustees of the Trust and the total compensation expected to be
paid to each trustee during the fiscal year ending February 28, 2000. The Trust
has no retirement or pension plans. The officers and trustees affiliated with
Nuveen serve without any compensation from the Trust.
<TABLE>
<CAPTION>
Aggregate Total Expected
Expected Compensation
Compensation From Fund Complex
Name of Trustee from the Fund Paid to Trustees
--------------- ------------- -----------------
<S> <C> <C>
Robert P. Bremner......................... $72 $73,000
Lawrence H. Brown......................... $72 $80,250
Anne E. Impellizzeri...................... $72 $73,000
Peter R. Sawers........................... $72 $73,500
William J. Schneider...................... $72 $73,000
Judith M. Stockdale....................... $72 $73,500
</TABLE>
Each trustee who is not affiliated with Nuveen or Nuveen Advisory receives a
fee. The Trust requires no employees other than its officers, all of whom are
compensated by Nuveen.
S-9
<PAGE>
INVESTMENT ADVISER AND INVESTMENT MANAGEMENT AGREEMENT
Nuveen Advisory acts as investment adviser for and manages the investment and
reinvestment of the assets of the Fund. Nuveen Advisory also administers the
Trust's business affairs, provides office facilities and equipment and certain
clerical, bookkeeping and administrative services, and permits any of its
officers or employees to serve without compensation as trustees or officers of
the Trust if elected to such positions. See "Who Manages the Fund" in the
Prospectus.
Pursuant to an investment management agreement between Nuveen Advisory and
the Trust, the Fund has agreed to pay an annual management fee at the rates set
forth below, which are based on the Fund's average daily net asset value:
<TABLE>
<CAPTION>
Average Daily Net Asset Value Management Fee
- ----------------------------- --------------
<S> <C>
For the first $125 million....................................... .4500 of 1%
For the next $125 million........................................ .4375 of 1%
For the next $250 million........................................ .4250 of 1%
For the next $500 million........................................ .4125 of 1%
For the next $1 billion.......................................... .4000 of 1%
For assets over $2 billion....................................... .3750 of 1%
</TABLE>
Nuveen Advisory has voluntarily agreed to waive all or a portion of its
management fee or reimburse certain expenses of the Fund in order to prevent
total operating expenses (including Nuveen Advisory's fee, but excluding
interest, taxes, fees incurred in acquiring and disposing of portfolio
securities, any 12b-1 or service fees and, to the extent permitted,
extraordinary expenses) from exceeding .65 of 1% of average daily net asset
value of any class of shares of the Fund. Nuveen may modify or discontinue
these waivers and reimbursements at any time.
Nuveen Advisory is a wholly owned subsidiary of John Nuveen & Co.
Incorporated ("Nuveen"), the Fund's principal underwriter. Nuveen and its
affiliates have sponsored or underwritten more than $60 billion of investment
company securities. Over 1,300,000 individuals have invested to date in
Nuveen's funds and Defined Portfolios. Founded in 1898, Nuveen is a subsidiary
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.
The Fund, the other Nuveen funds, Nuveen Advisory, and other related entities
have adopted a code of ethics which essentially prohibits all Nuveen fund
management personnel, including Nuveen fund portfolio managers, from engaging
in personal investments which compete or interfere with, or attempt to take
advantage of, the Fund's anticipated or actual portfolio transactions, and is
designed to assure that the interests of Fund shareholders are placed before
the interests of Nuveen personnel in connection with personal investment
transactions.
PORTFOLIO TRANSACTIONS
Nuveen Advisory, in effecting purchases and sales of portfolio securities for
the account of the Fund, will place orders in such manner as, in the opinion of
management, will offer the best price and market for the
S-10
<PAGE>
execution of each transaction. Portfolio securities will normally be purchased
directly from an underwriter or in the over-the-counter market from the
principal dealers in such securities, unless it appears that a better price or
execution may be obtained elsewhere. Portfolio securities will not be purchased
from Nuveen or its affiliates except in compliance with the Investment Company
Act of 1940.
The Fund expects that all portfolio transactions will be effected on a
principal (as opposed to an agency) basis and, accordingly, do not expect to
pay any brokerage commissions.
Purchases from underwriters will include a commission or concession paid by
the issuer to the underwriter, and purchases from dealers will include the
spread between the bid and asked price. Given the best price and execution
obtainable, it will be the practice of the Fund to select dealers which, in
addition, furnish research information (primarily credit analyses of issuers
and general economic reports) and statistical and other services to Nuveen
Advisory. It is not possible to place a dollar value on information and
statistical and other services received from dealers. Since it is only
supplementary to Nuveen Advisory's own research efforts, the receipt of
research information is not expected to reduce significantly Nuveen Advisory's
expenses. While Nuveen Advisory will be primarily responsible for the placement
of the business of the Fund, the policies and practices of Nuveen Advisory in
this regard must be consistent with the foregoing and will, at all times, be
subject to review by the Board of Trustees.
Nuveen Advisory reserves the right to, and does, manage other investment
accounts and investment companies for other clients, which may have investment
objectives similar to the Fund. Subject to applicable laws and regulations,
Nuveen Advisory will attempt to allocate equitably portfolio transactions among
the Fund and the portfolios of its other clients purchasing or selling
securities whenever decisions are made to purchase or sell securities by the
Fund and one or more of such other clients simultaneously. In making such
allocations the main factors to be considered will be the respective investment
objectives of the Fund and such other clients, the relative size of portfolio
holdings of the same or comparable securities, the availability of cash for
investment by the Fund and such other clients, the size of investment
commitments generally held by the Fund and such other clients and opinions of
the persons responsible for recommending investments to the Fund and such other
clients.
While this procedure could have a detrimental effect on the price or amount
of the securities available to a Fund from time to time, it is the opinion of
the Board of Trustees that the benefits available from Nuveen Advisory's
organization will outweigh any disadvantage that may arise from exposure to
simultaneous transactions.
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 an issue of money
market instruments purchased by the Fund, the amount of instruments which may
be purchased in any one issue. In addition, 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 Fund.
NET ASSET VALUE
As stated in the Prospectus, the net asset value of the shares of the Fund
will be determined separately for each class of the Fund's shares by The Chase
Manhattan Bank, the Fund's custodian, as of 12:00 noon, Eastern Time, (1) on
each day on which the Federal Reserve Bank of Boston is normally open and (2)
on any day during which there is sufficient degree of trading in the Fund's
portfolio securities that the current net asset
S-11
<PAGE>
value of the Fund shares might be materially affected by such changes in the
value of the portfolio securities. The Federal Reserve Bank of Boston is not
open and the Fund will similarly not be open on New Year's Day, Martin Luther
King's Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas
Day. It is possible that changing circumstances during the year will result in
addition or deletions to the above lists. The net asset value per share will be
computed by dividing the value of the portfolio securities held by the Fund,
plus cash or other assets, less liabilities, by the total number of shares
outstanding at such time.
As stated in the Prospectus, the Fund will seek to maintain a net asset value
of $1.00 per share. In this connection, the Fund values its portfolio
securities at their amortized cost, as permitted by the Securities and Exchange
Commission (the "Commission") under Rule 2a-7 under the Investment Company Act
of 1940. This method does not take into account unrealized securities gains or
losses. It involves valuing an instrument at its cost on the date of purchase
and thereafter assuming a constant amortization to maturity of any discount or
premium. While this method provides certainty in valuation, it may result in
periods during which the value of an investment, as determined by amortized
cost, is higher or lower than the price the Fund would receive if it sold the
instrument. During periods of declining interest rates, the daily yield on
shares of the Fund may tend to be higher than a like computation made by a fund
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio instruments.
Thus, if the use of the amortized cost method by the Fund resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in the
Fund would be able to obtain a somewhat higher yield than would result from an
investment in a fund utilizing solely market values, and existing investors in
the Fund would receive less investment income. The converse would apply in a
period of rising interest rates.
The Fund, as a condition to the use of amortized cost and the maintenance of
its per share net asset value of $1.00, must maintain a dollar-weighted average
portfolio maturity of 90 days or less, only purchase instruments having
remaining maturities of 397 days or less, and invest only in securities
determined to be of high quality with minimal credit risks. The Fund may invest
in variable and floating rate instruments even if they carry stated maturities
in excess of 397 days, upon certain conditions contained in rules and
regulations issued by the Securities and Exchange Commission under the
Investment Company Act of 1940, but will do so only if there is a secondary
market for such instruments or if they carry demand features, permissible under
rules of the Commission for money market funds, to recover the full principal
amount thereof upon specified notice at par, or both.
The Board of Trustees, pursuant to Rule 2a-7, has established procedures
designed to stabilize, to the extent reasonably possible, the Fund's price per
share as computed for the purpose of sales and redemptions at $1.00. Such
procedures will include review of the Fund's portfolio holdings by the Board of
Trustees, at such intervals as it may deem appropriate, to determine whether
the net asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market
quotations and market equivalents used in such review may be obtained from a
pricing agent approved by the Board of Trustees. The Board has selected Nuveen
Advisory to act as pricing agent, but in the future may select an independent
pricing service to perform this function. In serving as pricing agent, Nuveen
Advisory will follow guidelines adopted by the Board, and the Board will
monitor Nuveen Advisory to see that the guidelines are followed. The pricing
agent will value the Fund's investment based on methods which include
consideration of yield or prices of municipal obligations of comparable
quality, coupon, maturity, and type; indications as to values from dealers; and
general market conditions. The pricing agent may employ electronic data
processing techniques and/or a matrix system to determine valuations. The
extent of any deviation between the Fund's net asset value based on the pricing
agent's market valuation and $1.00 per share based on amortized cost will be
examined by the Board of Trustees. If such deviation exceeds 1/2 of 1%, the
Board of Trustees will promptly
S-12
<PAGE>
consider what action, if any, will be initiated. In the event the Board of
Trustees determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, it has
agreed to take such corrective action as it regards as necessary and
appropriate, including the sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends or payment of distributions from capital or capital
gains; redemption of shares in kind; or establishing a net asset value per
share by using available market quotations.
TAX MATTERS
Federal Income Tax Matters
The following discussion of federal income tax matters is based upon the
advice of Morgan, Lewis & Bockius LLP, counsel to the Trust.
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 investment company, the Fund must
satisfy certain requirements 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 dividends, 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 and futures) derived with respect to its business of
investing in such stock or securities (the "90% gross income test"). Second,
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 total
assets is invested in the securities of any one issuer (other than United
States government securities and securities of other regulated investment
companies) or two or more issuers controlled by the 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
income tax on any portion of its net income currently distributed to
shareholders in any taxable year for which it distributes at least 90% of the
sum of (i) its "investment company taxable income" (which includes dividends,
taxable interest, taxable original issue discount and market discount income,
income from securities lending, net short-term capital gain in excess of long-
term capital loss, and any other taxable income other than "net capital gain"
(as defined below) and is reduced by deductible expenses) and (ii) any net tax-
exempt interest (the excess of its gross tax-exempt interest income over
certain disallowed deductions).
Distributions by the Fund of net interest received from its investments and
net short-term capital gains realized by a Fund, if any, will be taxable to
shareholders as ordinary income whether received in cash or additional shares.
Any net long-term capital gains realized by the Fund and distributed to
shareholders in cash or additional shares, will be taxable to shareholders as
long-term capital gains regardless of the length of time investors have owned
shares of the Fund. Distributions by the Fund that do not constitute a dividend
will be treated as a return of capital to the extent of (and in reduction of)
the shareholder's tax basis in his or her shares. Any excess will be treated as
gain from the sale of his or her shares, as discussed below. Because the Fund's
investment income consists primarily of interest, none of its dividends are
expected to qualify under the Internal Revenue Code for the dividends received
deductions for corporations.
S-13
<PAGE>
Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in one of those months and paid during the following
January, will be treated as having been distributed by the Fund (and received
by the shareholders) on December 31.
The redemption or exchange of the shares of the Fund is not expected to
result in capital gain or loss to the shareholders because the Fund's net asset
value is expected to remain constant at $1.00 per share. To the extent that the
Fund's net asset value is greater or less than $1.00 per share, redemptions or
exchanges may result in capital gain or loss to the shareholder.
In order to avoid a 4% federal excise tax, the Fund must distribute or be
deemed to have distributed by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of the excess of its
realized capital gains over its realized capital losses (generally computed on
the basis of the one-year period ending on October 31 of such year) and 100% of
any taxable ordinary income and the excess of realized capital gains over
realized capital losses for the prior year that was not distributed during such
year and on which the Fund paid no federal income tax. For purposes of the
excise tax, a regulated investment company may reduce its capital gain net
income (but not below its net capital gain) by the amount of any net ordinary
loss for the calendar year. The Fund intends to make timely distributions in
compliance with these requirements and consequently it is anticipated that they
generally will not be required to pay the excise tax.
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 income
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
dividends 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
certifications, or who are otherwise subject to backup withholding.
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
taxation of the Fund and its 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
administrative 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.
State Tax Matters
The discussion of tax treatment is based on the assumptions that the Fund
will qualify under Subchapter M of the Code as a regulated investment company
and as a qualified investment fund under applicable state law, and that the
Fund will distribute all interest and dividends it receives to its
shareholders. Investment income received by the Fund on direct U.S. Government
obligations may be exempt from tax at the state level, depending on the state,
when received by a shareholder as income dividends from the Fund provided
certain state specific conditions are satisfied. Shareholders generally will be
required to include capital gain distributions in their income for state tax
purposes. Investors should consult a tax adviser for more detailed information
about state taxes to which they may be subject.
S-14
<PAGE>
PERFORMANCE INFORMATION
The historical performance of the Fund may be expressed in terms of "yield"
or "effective yield." These measures of performance are described below.
Yield is computed in accordance with a standard method prescribed by rules of
the Securities and Exchange Commission. Under that method, current yield is
based on a seven-day period and is computed as follows: the Fund's net
investment income per share for the period is divided by the price per share
(expected to remain constant at $1.00) at the beginning of the period, the
result (the "base period return") is divided by 7 and multiplied by 365, and
the resulting figure is carried to the nearest hundredth of one percent. For
the purpose of this calculation, the Fund's net investment income per share
includes its accrued interest income plus or minus amortized purchase discount
or premium less accrued expenses, but does not include realized capital gains
or losses or unrealized appreciation or depreciation of investments.
The Fund's effective yield is calculated by taking the base period return
(computed as described above) and calculating the effect of assumed
compounding. The formula for effective yield is: (base period return +
1)/365///7/-1.
The Fund's yield will fluctuate, and the publication of annualized yield
quotations is not a representation of what an investment in the Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
question, but also on such matters as the Fund's expenses.
In reports or other communications to shareholders or in advertising and
sales literature, the Fund may compare its performance to that of other money
market mutual funds tracked by Lipper Analytical Services, Inc. ("Lipper"), by
Donoghue's Money Fund Report ("Donoghue's") or similar services or by financial
publications such as Barron's, Changing Times, Forbes and Money Magazine.
Performance comparisons by these indexes, services or publications may rank
mutual funds over different periods of time by means of aggregate, average,
year-by-year or other types performance figures. Lipper ranks mutual funds by
overall performance, investment objectives, and assets and assumes the
reinvestment of dividends for the period covered. Donoghue's ranks investment
results according to total return (annualized results net of management fees
and expenses) and presents one year results as effective annual yields assuming
reinvestment of dividends. Any given performance quotation or performance
comparison should not be considered as representative of the Fund's performance
for any future period.
S-15
<PAGE>
ADDITIONAL INFORMATION ABOUT PURCHASES AND SALES
As described in the Prospectus, the Fund provides you with alternative ways
of purchasing Fund shares based upon your individual investment needs and
preferences.
Each share class of the Fund represents an interest in the same portfolio of
investments. Each share class is identical in all respects except that each
class bears its own class expenses, including distribution and administration
expenses, and each class has exclusive voting rights with respect to any
distribution or service plan applicable to its shares. As a result of the
differences 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 share classes.
Shareholders of each class will share expenses proportionately for services
that are received equally by all shareholders. A particular class of shares
will bear only those expenses that are directly attributable to that class,
where the type or amount of services received by a class varies from one class
to another. For example, class-specific expenses generally will include
distribution and service fees.
The minimum initial investment is $3,000 per share class, and may be lower
for accounts opened through fee-based programs for which the program sponsor
has established a single master account with the fund's transfer agent and
performs all sub-accounting services related to that account.
Class B Shares 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 are done at net asset
value without the imposition of any sales load, fee, or other charge, so that
the value of each shareholder's account immediately before conversion will be
the same as the value of the account immediately after conversion. Class B
Shares acquired through reinvestment of distributions 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
are 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 remain subject to an annual
service fee that is identical in amount for both Class B Shares and Class A
Shares. Any conversion of Class B Shares into Class A Shares is subject to the
continuing 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 R Share Purchase Eligibility. Class R Shares are available for
purchases of $2.5 million or more and for purchases using dividends and capital
gains distributions on Class R Shares. Class R Shares also are available for
the following categories of investors:
. officers, trustees and former trustees of the Nuveen and Flagship Funds
and their immediate family members or trustees/directors of any fund,
sponsored by Nuveen, any parent company of Nuveen and subsidiaries
thereof and their immediate family members;
. bona fide, full-time and retired employees of Nuveen, any parent company
of Nuveen, and subsidiaries 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;
S-16
<PAGE>
. officers and directors of bank holding companies that make Fund shares
available directly or through subsidiaries or bank affiliates, or their
immediate family members;
. 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 on a periodic fee, asset-based fee or no transaction
fee basis through a broker-dealer sponsored mutual fund purchase program;
. clients of investment advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for their
services.
. Any shares purchased by investors falling within any of the first four
categories listed above must be acquired for investment purposes and on
the condition that they will not be transferred or resold except through
redemption by the fund.
In addition, purchasers of Nuveen Defined Portfolios may reinvest their
distributions from such Defined Portfolios in Class R Shares, if, before
September 6, 1994, such purchasers has elected to reinvest distributions in
Nuveen Fund shares (before June 13, 1995 for Nuveen Municipal Bond Fund
shares). Shareholders may exchange their Class R Shares of any Nuveen Fund into
Class R Shares of any other Nuveen Fund.
The categories of eligible investors 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 R Shares, or to obtain the
required application forms, call Nuveen toll-free at (800) 257-8787.
Reduction or Elimination of Contingent Deferred Sales Charge
In the case of Class B Shares redeemed within six years of purchase, a CDSC
is imposed, beginning at 5% for redemptions within the first year, declining to
4% for redemptions within years two and three, and declining by 1% each year
thereafter until disappearing after the sixth year. Class C Shares are redeemed
at net asset value, without any CDSC, except that a CDSC of 1% is imposed upon
redemption of Class C Shares that are redeemed within 12 months of purchase.
Under limited circumstances, Class A Shares may be subject to a 1% CDSC, as
described in the Prospectus.
In determining whether a CDSC is payable, the Fund will first redeem shares
not subject to any charge, or that represent an increase in the value of a Fund
account due to capital appreciation, and then will redeem shares held for the
longest period, unless the shareholder specifies another order. No CDSC is
charged on shares purchased as a result 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 a Nuveen money market fund. The
holding period is calculated on a monthly basis and begins the first day of the
month in which the order for investment is received. 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 redemption proceeds. Nuveen receives
the amount of any CDSC shareholders pay. If shares subject to a CDSC are
exchanged for shares of a Nuveen money market fund, the CDSC would be imposed
on the subsequent redemption of those money market shares, and the period
during which the shareholder holds the money market fund shares would be
counted in determining the remaining duration of the CDSC. The Fund may elect
not to so count the period during which the shareholder held the money market
fund shares, in which event the amount of any applicable CDSC would be reduced
in accordance with applicable rules by the amount of any 12b-1 plan payments to
which those money market funds shares may be subject.
S-17
<PAGE>
The CDSC may be waived or reduced under the following six special
circumstances: 1) redemptions within one year following the death or
disability, as defined in Section 72(m)(7) of the Internal Revenue Code of
1986, as amended, of a shareholder; 2) 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 Nuveen
mutual funds within a specified number of days; 3) 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 applicable board has determined
may have material adverse consequences to the shareholders of such Fund; and 4)
redemptions made pursuant to the Fund's systematic withdrawal plan, up to 12%
of the current market value. If the Fund waives or reduces the CDSC, such
waiver or reduction would be uniformly applied to all Fund shares in the
particular category. In waiving or reducing a CDSC, the Fund will comply with
the requirements of Rule 22d-1 of the Investment Company Act of 1940.
Exchange Privileges
You may exchange shares of the Fund for the appropriate class of shares of
any other open-end management investment company with reciprocal exchange
privileges advised by Nuveen Advisory (the "Nuveen Funds"), into an identically
registered account, provided that the Nuveen Fund into which shares are to be
exchanged is offered in the shareholder's state of residence and that the
shares to be exchanged have been held by the shareholder for a period of at
least 15 days. You may exchange fund shares by calling (800) 257-8787 or by
mailing your written request to our Transfer Agent. Shares of Nuveen Funds
purchased subject to a front-end sales charge may be exchanged for shares of
the fund or any other Nuveen Fund at the next determined net asset value
without any front-end sales charge. No CDSC otherwise applicable will be
assessed on an exchange, and the holding period of your investment will be
carried over to the new fund for purposes of determining any future CDSC. You
may exchange Class B shares for shares of a Nuveen money market fund. Shares of
any Nuveen Fund purchased through dividend reinvestment or through reinvestment
of Nuveen Unit Trust distributions (and any dividends thereon) may be exchanged
for Class A shares of any Nuveen Fund without a front-end sales charge.
Exchanges of shares with respect to which no front-end sales charge has been
paid will be made at the public offering price, which may include a front-end
sales charge, unless a front-end 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 front-end
sales charge was paid), in which case the exchange will be made at net asset
value. Because certain other Nuveen Funds may determine net asset value and
therefore honor purchase or redemption requests on days when the Fund does not
(generally, Martin Luther King's Birthday, Columbus Day and Veterans Day),
exchanges of shares of one of those funds for shares of the fund may not be
effected on such days.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the Nuveen Fund into which they are being exchanged.
Exchanges are made based on the relative dollar values of the shares involved
in the exchange, and will be effected by redemption of shares of the Nuveen
Fund held and purchase of the shares of the other Nuveen Fund. For federal
income tax purposes, any such exchange constitutes a sale and purchase of
shares and may result in capital gain or loss. Before exercising any exchange,
you should obtain the Prospectus for the Nuveen Fund into which shares are to
be exchanged and read it carefully. If the registration of the account for the
Fund you are purchasing is not exactly 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 acceptable to the Fund. The exchange privilege may be
modified or discontinued at any time. If you do not wish to have telephone
exchange privileges, you must indicate this in the "Telephone Services" section
of your Account Application or otherwise notify the Fund in writing of your
desire.
S-18
<PAGE>
Additional Information
An account will be maintained for each shareholder of record in the fund by
our Transfer Agent. Share certificates will be issued only upon written request
of the shareholder to our Transfer Agent. No certificates are issued for
fractional shares. The Fund reserves the right to reject any purchase order and
to waive or increase minimum investment requirements.
Confirmations of each purchase and redemption order as well as monthly
statements are sent to every shareholder. Master accounts also receive a
monthly summary report setting forth the share balance and dividends earned for
the month for each sub-account established under that master account.
To assist those institutions performing their own-sub-accounting, same day
information as to the fund's daily per share income to seven decimal places and
the one-day yield to four decimal places are normally available by 3:30 p.m.,
Eastern Time.
A change in registration or transfer of shares held in the name of a
broker/dealer can only be effected by an order in good form from the
broker/dealer acting on behalf of the investor. Broker/dealers are encouraged
to open single master accounts. However, some broker/dealers may wish to use
our Transfer Agent's sub-accounting system to minimize their internal
recordkeeping requirements. A broker/dealer or other investor requesting
shareholder servicing or accounting other than the master account or
subaccounting service offered by the fund will be required to enter into a
separate agreement with the agent for these services for a fee to be determined
in accordance with the level of services to be furnished.
Banks and other organizations through which investors may purchase shares of
the Fund may impose charges in connection with purchase orders. Investors
should contact their institutions directly to determine what charges, if any,
may be imposed.
Subject to the SEC rules, the Fund reserves the right to suspend the
continuous offering of the shares at any time, but such suspension shall not
affect the shareholder's right of redemption as described below. The Fund also
reserves the right to reject any purchase order and to waive or increase
minimum investment requirements.
Telephone Redemption via Fund Direct
To redeem shares held in non-certificate form by telephone with the
redemption proceeds paid via Fund Direct-Electronic Funds Transfer, you must
complete the Telephone Services section of the enclosed Application Form and
return it to Nuveen or our Transfer Agent. If you did not authorize Telephone
Redemption via Fund Direct when you opened your account, you may do so by
sending a written request to the Fund signed by each account owner with
signatures guaranteed by a member of an approved Medallion Guarantee Program or
in such other manner as may be acceptable to the fund. Proceeds of share
redemptions made by Fund Direct will be transferred only to the commercial bank
account specified by the shareholder. Redemption proceeds 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 the redemption proceeds would
ordinarily be wired.
If you have authorized Telephone Redemption via Fund Direct, you can take
advantage of two methods of telephone redemption: regular telephone redemption
and expedited telephone redemption. You may make regular Fund Direct redemption
requests by calling Nuveen at (800) 257-8787. If a regular telephone redemption
request is received prior to 4:00 p.m. Eastern Time, the shares to be redeemed
earn income on the day the request is made, and the redemption is effected on
the following business day. For regular redemption requests received after 4:00
p.m. Eastern Time, the shares to be redeemed earn income through the following
business day, and the redemption is effected on the second business day
following the request. For all regular
S-19
<PAGE>
redemptions, you will typically receive your funds within three business days
after your redemption is effected. You may make expedited telephone redemption
requests to redeem shares that are worth at least $1,000 by calling Nuveen at
(800) 257-8787. If an expedited redemption request is received by 12:00 noon
Eastern Time, the shares to be redeemed do not earn income on that day, but the
redemption is effected, and you will normally receive your funds, on that day.
If an expedited redemption request is received after 12:00 noon Eastern Time,
the shares to be redeemed earn income on the day the request is received. The
redemption is effected, and you will normally receive your funds, on the next
business day following the request. The Fund reserves the right to charge a fee
for expedited redemption requests.
How to Change Authorized Redemption Instructions
In order to establish multiple accounts, or to change the account or accounts
designated to receive redemption proceeds, a written request specifying the
change must be sent to Nuveen. This request must be signed by each account
owner with signatures guaranteed by a member of an approved Medallion Guarantee
Program or in such other manner as may be acceptable to the Fund. Further
documentation may be required from corporations, executors, trustees or
personal representatives.
The Fund reserves the right to refuse a telephone redemption and, at its
option, may limit the timing, amount or frequency of these redemptions. This
procedure may be modified or terminated at any time, on 30 days' notice, by the
fund. The Fund, the transfer agent and Nuveen will not be liable for following
telephone instructions reasonably believed to be genuine.
Redemption in Kind
The Fund expects to pay in cash all redemption requests made by each
shareholder during any 90 day period up to the lesser of $250,000 or 1% of the
net asset value of the fund at the beginning of such period. In the case of
redemption requests in excess of such amounts, the Fund may make payment in
whole or in part in securities or other assets of the Fund. In this event, the
securities would be valued in the same manner as the portfolio of the fund is
valued. If the recipient were to sell such securities, he or she would incur
brokerage charges.
Other Practices
The Fund may encourage registered representatives and their firms to help
apportion their assets among bonds, stocks and cash, and may seek to
participate in programs that recommend a portion of their assets be invested in
money market instruments.
The Fund may suspend the right of redemption 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 in the markets
the Fund normally utilizes is restricted, or an emergency exists as determined
by the SEC so that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such other periods as
the SEC by order may permit for protection of the shareholders of the Fund.
The Fund has authorized certain brokers and firms to accept purchase and
redemption orders on its behalf. The Fund will consider an order to be
"received" when such a broker or firm accepts the order from its customer.
S-20
<PAGE>
In addition to the types of compensation to dealers to promote sales of Fund
shares that are described in the prospectus, Nuveen may from time to time make
additional reallowances only to certain authorized dealers who sell or are
expected to sell certain minimum amounts of shares of the Nuveen mutual funds
during specified time periods.
DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the
Investment 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 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
Fund's Plan is payable to compensate Nuveen for services and expenses incurred
in connection with the distribution of Class B and Class C Shares,
respectively. These expenses include payments to Authorized Dealers, including
Nuveen, who are brokers of record with respect to the Class B and Class C
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 Class B and Class C
Shares, certain other expenses associated with the distribution of Class B and
Class C Shares, and any distribution-related expenses that may be authorized
from time to time by the Board of Trustees. Nuveen may retain any unused
portions of the distribution fee.
The service fee applicable to Class A Shares, Class B Shares and Class C
Shares under the Fund's Plan is payable to Authorized Dealers in connection
with the provision of ongoing account services to shareholders. Nuveen may
retain portions of the service fee not paid to Dealers.
S-21
<PAGE>
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
average daily net assets of Class B Shares as a service fee under the Plan
applicable to Class B Shares. The Fund may spend up to .75 of 1% per year of
the average 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.
Under the Fund's 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 Board believes that there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders. 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 indirect 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.
No trustee of the Fund and no "interested" person of the Fund has any direct
or indirect financial interest in the Plan or any agreement related to the
Plan.
OTHER INFORMATION REGARDING FUND SHARES
Shareholders should note that when a fund dividend check has been returned to
the sender by the post office after repeated mailings, the shareholder account
will thereafter be registered for automatic reinvestment of dividends and thus
the dividend check and future dividend checks will be reinvested in additional
Fund shares. Shareholders are reminded that they need to advise the Funds
promptly in writing of any change in address.
The Glass-Steagall Act and other applicable laws, among other things, may
limit banks from engaging in the business of underwriting, selling or
distributing securities. Since the only functions of banks who may be engaged
as service organizations is to perform administrative shareholder servicing
functions, the fund believes that such laws should not preclude a bank from
acting as a service organization. However, future changes in either federal or
state statutes or regulations relating to the permissible activities of banks
and their subsidiaries or affiliates, as well as judicial or administrative
decisions or interpretations of statutes or regulations, could prevent a bank
from continuing to perform all or a part of its shareholder servicing
activities. If a bank were prohibited from so acting, its shareholder customers
would be permitted to remain shareholders of the Fund and alternative means for
continuing the servicing of such shareholders would be sought.
Nuveen serves as the principal underwriter or distributor of Fund shares.
Fund shares are offered on a continuous offering basis at net asset value
without a sales charge. Nuveen sells shares to or through brokers, dealers,
banks or other qualified financial intermediaries (collectively referred to as
"Dealers"), or others, in a
S-22
<PAGE>
manner consistent with the then effective 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 distributing 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 also receives compensation pursuant to
a distribution plan adopted by the Trust pursuant to Rule 12b-1 and described
herein under "Distribution and Service Plan." Nuveen receives any CDSCs imposed
on redemptions of shares.
To help advisers and investors better understand and more efficiently use an
investment in the Fund to reach their investment goals, the Fund and its
sponsor, Nuveen, may advertise and create specific investment programs and
systems. For example, such activities may include presenting information on how
to use an investment in the Fund, alone or in combination with an investment in
other mutual funds or unit investment trusts sponsored by Nuveen, to accumulate
assets for future education needs or periodic payments such as insurance
premiums. The Fund and its sponsor may produce software or additional sales
literature to promote the advantages of using the Fund to meet these and other
specific investor needs.
S-23
<PAGE>
Nuveen Money Market Trust
Statement of Net Assets
June 7, 1999
<TABLE>
<CAPTION>
Nuveen Money
Market Fund
<S> <C>
Assets:
Cash............................................................ $100,000
--------
Total assets.................................................. 100,000
--------
Net assets........................................................ $100,000
========
Shares outstanding (note 1):
Class A shares.................................................. 25,000
Class B shares.................................................. 25,000
Class C shares.................................................. 25,000
Class R shares.................................................. 25,000
Net asset value, offering price and redemption price per share:
Class A, B, C and R Shares...................................... $ 1.00
========
</TABLE>
(1) The Trust:
The Trust was organized as a Massachusetts business trust on January 15, 1999,
and has been inactive since that date except for matters relating to its
organization, its registration as an open-end series investment company and the
registration of its shares under the Investment Company Act of 1940, as amended,
and the Securities Act of 1933, as amended, and the sale of the outstanding
shares to Nuveen Advisory Corp., the Trust's investment adviser (the "Adviser"),
a wholly owned subsidiary of The John Nuveen Company. The Fund is a series of
the Trust. Additional series may be added in the future. The Fund is permitted
to issue shares at a price equal to net asset value for its other authorized
Class A, B, C, and R Shares.
(2) Organization Costs:
John Nuveen & Co. Incorporated, a wholly owned subsidiary of The John Nuveen
Company, will assume all of the organization costs, approximately $186,000,
related to the Trust.
(2) 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 affairs.
For these services the Fund has agreed to pay an annual management fee as
described in the Fund's Prospectus.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder and Trustees
Nuveen Money Market Trust:
We have audited the accompanying statement of net assets of the Nuveen Money
Market Trust (comprised of the Nuveen Money Market Fund) (a Massachusetts
business trust) as of June 7, 1999. This statement of net assets is the
responsibility of the Fund'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 standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of net assets. Our procedures
included confirmation of cash held by the custodian as of June 7, 1999. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets presents fairly, in all material
respects, the net assets of the Nuveen Money Market Fund as of June 7, 1999, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
June 7, 1999
<PAGE>
PART C: OTHER INFORMATION
Item 23. Exhibits:
(a) Declaration of Trust of Registrant. Filed as exhibit (a) to the
Initial Registration Statement on Form N-1A, dated March 22, 1999 and
incorporated by reference thereto.
(b) By-Laws of Registrant. Filed as exhibit (b) to the Initial
Registration Statement on Form N-1A, dated March 22, 1999 and incorporated
by reference thereto.
(c) Not applicable.
(d) Form of Investment Management Agreement filed herewith.
(e) Form of Distribution Agreement filed herewith.
(f) Not applicable.
(g) Custodian Agreement filed herewith.
(h) Transfer Agency Agreement filed herewith.
(i) Opinion of Morgan, Lewis & Bockius LLP filed herewith.
(j) Consent of Independent Public Accountants filed herewith.
(k) Not applicable.
(l) Form of Subscription Agreement filed herewith.
(m) Plan of Distribution filed herewith.
(n) Not applicable.
(o) Multi-Class Plan filed herewith.
(p) Powers of Attorney of Registrant. Filed as exhibit (p) to Pre-
Effective Amendment No. 1, dated June 1, 1999 and incorporated by reference
thereto.
Item 24. Persons Controlled by or Under Common Control with Registrant:
Not applicable.
Item 25. Indemnification:
Section 4 of Article XII of Registrant's Declaration of Trust provides as
follows:
Subject to the exceptions and limitations contained in this Section 4, every
person who is, 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 permitted 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 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 courts or other body before which the proceeding
was brought that he engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office;
<PAGE>
(b) with respect to any matter as to which he shall have been finally
adjudicated 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
payment by a Covered Person, unless there has been wither 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 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 the independent legal counsel.
The rights of indemnification herein provided may be insured against by
policies 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 continue 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 otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding subject to a claim for indemnification under 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 ultimately 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,
anyone who has been exempted from being an Interested Person by any rule,
regulation 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 groundings 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, proceeding (civil,
criminal, administrative or other, including appeals), actual or threatened;
and the word "liability" and "expenses" shall include without limitation,
attorney's fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
The trustees and officers of the Registrant are covered by an Investment
Trust Errors and Omission policy in the aggregate amount of $20,000,000 (with
a maximum deductible of $500,000) against liability and expenses of claims if
wrongful 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 the
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 Trustees, officers and controlling persons of
the Registrant pursuant to the Declaration of Trust or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by an officer, 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
ii
<PAGE>
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser:
Nuveen Advisory Corp. serves as investment adviser to the following open-end
management type investment companies: Nuveen Flagship Multistate Trust I,
Nuveen Flagship Multistate Trust II, Nuveen Flagship Multistate Trust III,
Nuveen Flagship Multistate Trust IV, Nuveen Flagship Municipal Trust, Nuveen
Taxable Funds Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free
Money Market Fund, Inc., Nuveen Tax-Exempt Money Market Fund, Inc., and Nuveen
Tax-Free Reserves, Inc. It also serves as investment adviser to the following
closed-end management type investment companies: Nuveen Municipal Value Fund,
Inc., Nuveen California Municipal Value Fund, Inc., Nuveen Fund, Inc., Nuveen
Performance Plus Municipal Fund, Inc., Nuveen California Performance Plus
Municipal Fund, Nuveen New York Performance 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 Investment Quality Municipal Fund, Inc.,
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality
Municipal Fund, Nuveen New Jersey Investment Quality Municipal Fund, Inc.,
Nuveen Pennsylvania Investment Quality Municipal Fund, Inc., 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 Municipal 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 Income Municipal Fund, Inc., Nuveen California Quality Income Municipal
Fund, Inc., Nuveen New York Quality Income Fund, Inc., Nuveen Premium Income
Municipal Fund 2, Inc., Nuveen Insured California Premium Income Municipal
Fund, 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 Premium Income Municipal Fund 4, Inc., Nuveen
Insured California Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania
Premium Income Municipal Fund 2, Inc., Nuveen Maryland Premium Income
Municipal Fund, Nuveen Washington Premium Income Municipal Fund, Nuveen New
Jersey Premium Income Municipal Fund 2, Inc., Nuveen Connecticut Premium
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, and Nuveen
Insured Premium Income Municipal Fund 2. Nuveen Advisory Corp. has no other
clients or business at the present time. The principal business address for
all of these investment companies is 333 West Wacker Drive, Chicago, Illinois
60606.
For a description of other business, profession, vocation or employment of a
substantial nature in which any director or officer, other than Timothy R.
Schwertfeger and John P. Amboian, of the investment adviser has engaged during
the last two years for his account or in the capacity of director, officer,
employee, partner or trustee, see the description under "Management" in the
Statement of Additional Information.
Timothy R. Schwertfeger is Chairman and Director of Nuveen Advisory Corp.,
the investment adviser. Mr. Schwertfeger has, during the last two years, been
Chairman and Director and formerly Executive Vice President and Director of
the John Nuveen Company, John Nuveen & Co. Incorporated, and Nuveen
Institutional Advisory Corp. John P. Amboian is Executive Vice-President and
Chief Financial Officer, and Director of Nuveen Advisory Corp., the investment
adviser. Mr. Amboian has, during the last two years, been Executive Vice-
President and Chief Financial Officer of John Nuveen & Co. Incorporated.
Item 27. Principal Underwriters:
(a) John Nuveen & Co., Incorporated ("Nuveen") acts as principal underwriter
to the following open-end management type investment companies: Nuveen
Flagship Multistate Trust I, Nuveen Flagship Multistate Trust II, Nuveen
Flagship Multistate Trust III, Nuveen Flagship Multistate Trust IV, Nuveen
Flagship Municipal Trust,
iii
<PAGE>
Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Money Market Fund,
Inc., Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves,
Inc., Nuveen Taxable Funds Inc., Nuveen Investment Trust and Nuveen Investment
Trust II and III. Nuveen also acts as depositor and principal underwriter of
the Nuveen Tax-Exempt Unit Trust and Nuveen Unit Trusts, 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 Performance Plus Municipal Fund, Inc., Nuveen Municipal
Advantage Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc., Nuveen
California Investment Quality Municipal Fund, Inc., Nuveen New York Investment
Quality Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund, Inc.,
Nuveen Florida Investment Quality Municipal Fund, Nuveen New Jersey Investment
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 Municipal
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
California Quality Income Municipal Fund, Inc., Nuveen New York Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income 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 Michigan Premium Income Municipal Fund,
Inc., Nuveen New Jersey 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 Municipal Fund 2,
Inc., Nuveen Maryland Premium Income Municipal Fund, Nuveen Washington Premium
Income Municipal Fund, Nuveen Connecticut Premium Income Municipal Fund,
Nuveen Georgia Premium Income Municipal Fund, Nuveen Missouri Premium Income
Municipal Fund, Nuveen Maryland Premium Income Municipal Fund, Nuveen North
Carolina Premium Income Municipal Fund, Nuveen California Premium Income
Municipal Fund, Nuveen Insured Premium Income Municipal Fund, Nuveen Select
Tax-Free Income Portfolio 2, Nuveen Insured California Select Tax-Free Income
Portfolio, Nuveen Insured New York Select Tax-Free Income Portfolio and Nuveen
Select Tax-Free Income Portfolio 3.
(b)
<TABLE>
<CAPTION>
Name and
Principal
Business Positions and Offices Positions and Offices
Address with Underwriter with Registrant*
--------------------------------------------------------------------------
<S> <C> <C>
Timothy R. Chairman of the Board, Chief Chairman of the Board and
Schwertfeger Executive Officer and Director Trustee
333 West
Wacker Drive
Chicago, IL
60606
John P. Executive Vice-President and None
Amboian Chief Financial Officer
333 West
Wacker Drive
Chicago, IL
60606
William Vice President None
Adams IV
333 West
Wacker Drive
Chicago, IL
60606
Judson T. Vice President None
Bergman
333 West
Wacker Drive
Chicago, IL
60606
Alan G. Vice President and Secretary Vice President and Assistant
Berkshire Secretary
333 West
Wacker Drive
Chicago, IL
60606
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
----------------------------------------------------------------------------------------
<S> <C> <C>
James Connors Vice President None
333 West Wacker Drive
Chicago, IL 60606
Clifton L. Fenton Vice President None
333 West Wacker Drive
Chicago, IL 60606
Kathleen M. Flanagan Vice President None
333 West Wacker Drive
Chicago, IL 60606
Stephen D. Foy Vice President Vice President and Controller
333 West Wacker Drive
Chicago, IL 60606
Michael G. Gaffney Vice President None
333 West Wacker Drive
Chicago, IL 60606
Richard D. Hughes Vice President None
Two Radnor Corporate Center
Radnor, PA 19087
Anna R. Kucinskis Vice President None
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
1990 MacArthur Blvd.
Irvine, CA 92612
Larry W. Martin Vice President and Assistant Vice President and Assistant
333 West Wacker Drive Secretary Secretary
Chicago, IL 60606
Thomas C. Muntz Vice President None
333 West Wacker Drive
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
Paul C. Williams Vice President None
333 West Wacker Drive
Chicago, IL 60606
Margaret E. Wilson Vice President and Corporate None
333 West Wacker Drive Controller
Chicago, IL 60606
Gifford R. Zimmerman Vice President and Assistant Vice President and Secretary
333 West Wacker Drive Secretary
Chicago, IL 60606
</TABLE>
v
<PAGE>
Item 28. Location of Accounts and Records.
Nuveen 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 records not
maintained by Nuveen Advisory Corp., Shareholder Services, Inc. or Boston
Financial.
Chase Global Funds Service Company, 73 Tremont Street, Boston,
Massachusetts, mainains all the required records in its capacity as transfer,
dividend paying and shareholder service agent for the Fund.
Item 29. Management Services:
Not applicable.
Item 30. Undertakings:
Not applicable.
vi
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, duly
authorized, in the City of Chicago, and State of Illinois, on the 9th day of
June, 1999.
NUVEEN MONEY MARKET TRUST
/s/ Gifford R. Zimmerman
-----------------------------------------
Gifford R. Zimmerman, Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <C> <S>
/s/ Stephen D. Foy
-------------------------------
Stephen D. Foy Vice President and June 9, 1999
Controller (Principal
Financial and
Accounting Officer)
Timothy R. Schwertfeger Chairman of the Board
and Trustee (Principal
Executive Officer)
Robert P. Bremner Trustee
Lawrence H. Brown Trustee
Anne E. Impellizzeri Trustee
Peter R. Sawers Trustee
William J. Schneider Trustee
Judith M. Stockdale Trustee
</TABLE>
/s/ Gifford R. Zimmerman
By____________________________
Gifford R. Zimmerman
Attorney-in-Fact
June 9, 1999
An original power of attorney authorizing, among others, Gifford R. Zimmerman
and Larry W. Martin to execute this Registration Statement, and Amendments
thereto, for each of the trustees of the Registrant on whose behalf this
Registration Statement is filed, has been executed and is incorporated by
reference in this Registration Statement.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Name Exhibit
---- -------
<S> <C>
Form of Investment Management Agreement, is filed herewith.............. Ex-99.d
Form of Distribution Agreement, is filed herewith....................... Ex-99.e
Form of Custodian Agreement, is filed herewith.......................... Ex-99.g
Transfer Agency Agreement, is filed herewith............................ Ex-99.h
Opinion of Morgan, Lewis & Bockius LLP, is filed herewith............... Ex-99.i
Consent of Independent Public Accountants, is filed herewith............ Ex-99.j
Form of Subscription Agreement, is filed herewith....................... Ex-99.l
Plan of Distribution, is filed herewith................................. Ex-99.m
Multi-Class Plan, is filed herewith..................................... Ex-99.o
</TABLE>
<PAGE>
FORM OF INVESTMENT MANAGEMENT AGREEMENT
--------------------------------------
AGREEMENT made as of the 1st day of February, l999, by and between NUVEEN MONEY
MARKET TRUST, a Massachusetts business trust (the "Trust"), and NUVEEN ADVISORY
CORP., a Delaware corporation (the "Adviser").
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 Trust hereby employs the Adviser to act as the investment adviser for,
and to manage the investment and reinvestment of the assets of each of the
Trust's series as set forth on Exhibit A attached hereto (the "Funds") or as may
exist from time to time in accordance with the Trust's investment objective and
policies and limitations relating to such Fund, and to administer the Trust's
affairs to the extent requested by and subject to the supervision of the Board
of Trustees of the Trust for the period and upon the terms herein set forth.
The investment of the assets of each Fund shall be subject to the Trust's
policies, restrictions and limitations with respect to securities investments as
set forth in the Trust's registration statement on Form N-1A under the
Securities Act of 1933 and the Investment Company Act of l940 covering the
Trust's Funds' shares of beneficial interest, including the Prospectus and
Statement of Additional Information forming a part thereof, all as filed with
the Securities and Exchange Commission and as from time to time amended, and all
applicable laws and the regulations of the Securities and Exchange
<PAGE>
Commission relating to the management of registered open-end, management
investment companies.
The Adviser accepts such employment and agrees during such period to render such
services, to furnish office facilities and equipment and clerical, bookkeeping
and administrative services (other than such services, if any, provided by the
Trust's custodian, transfer agent and shareholder service agent, and the like)
for the Trust, to permit any of its officers or employees to serve without
compensation as trustees or officers of the Trust if elected to such positions,
and to assume the obligations herein set forth for the compensation herein
provided. The Adviser shall, for all purposes herein provided, be deemed to be
an independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for nor represent the Trust in any
way, nor otherwise be deemed an agent of the Trust.
2. For the services and facilities described in Section l, the Trust will pay
to the Adviser, at the end of each calendar month, an investment management fee
related to each of the Trust's Funds. For each Fund, calculated separately,
except the Nuveen Municipal Money Market Fund and Nuveen Money Market Fund, the
fees shall be computed at the rate of:
Rate Net Assets
---- ----------
.4000% For the first $125 million
.3875% For the next $125 million
.3750% For the next $250 million
.3625% For the next $500 million
.3500% For the next $1 billion
.3250% For assets over $2 billion
2
<PAGE>
For Nuveen Money Market Fund, the fees shall be computed at the rate of:
Rate Net Assets
---- ----------
.4500% For the first $125 million
.4375% For the next $125 million
.4250% For the next $250 million
.4125% For the next $500 million
.4000% For the next $1 billion
.3750% For assets over $2 billion
For Nuveen Municipal Money Market Fund, the fees shall be computed at the rate
of:
Rate Net Assets
---- ----------
.5000% For the first $125 million
.4875% For the next $125 million
.4750% For the next $250 million
.4625% For the next $500 million
.4500% For the next $1 billion
.4250% For assets over $2 billion
For the month and year in which this Agreement becomes effective or terminates,
and for any month and year in which a Fund is added or eliminated from the
Trust, there shall be an appropriate proration on the basis of the number of
days that the Agreement shall have been in effect, or the Fund shall have
existed, during the month and year, respectively. The services of the Adviser
to the Trust under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services or other services to others so
long as its services hereunder are not impaired thereby.
3. The net asset value of each Fund shall be calculated as provided in the
Declaration of Trust of the Trust. On each day when net asset value is not
calculated, the net asset value of a
3
<PAGE>
share of beneficial interest of a Fund shall be deemed to be the net asset value
of such share as of the close of business on the last day on which such
calculation was made for the purpose of the foregoing computations.
4. Regardless of any of the above provisions, the Adviser guarantees that the
total expenses of each Fund in any fiscal year, exclusive of taxes, interest,
brokerage commissions, and extraordinary expenses such as litigation costs,
shall not exceed, and the Adviser undertakes to pay or refund to the Fund any
amount up to but not greater than the aggregate fees received by the Adviser
under this Agreement for such fiscal year, the limitation imposed by any
jurisdiction in which the Trust continues to offer and sell shares of the Fund
after exceeding such limitation. Except as otherwise agreed to by the Trust or
the Adviser or unless otherwise required by the law or regulation of any state,
any reimbursement by the Adviser to a Fund under this section shall not exceed
the management fee payable to the Adviser by a Fund under this Agreement.
5. The Adviser shall arrange for officers or employees of the Adviser to serve,
without compensation from the Trust, as trustees, officers or agents of the
Trust, if duly elected or appointed to such positions, and subject to their
individual consent and to any limitations imposed by law.
6. Subject to applicable statutes and regulations, it is understood that
officers, trustees, or agents of the Trust are, or may be, interested in the
Adviser as officers, directors, agents,
4
<PAGE>
shareholders or otherwise, and that the officers, directors, shareholders and
agents of the Adviser may be interested in the Trust otherwise than as trustees,
officers or agents.
7. The Adviser 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 Adviser
in the performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
8. The Adviser currently manages other investment accounts and Trusts,
including those with investment objectives similar to the Trust, and reserves
the right to manage other such accounts and funds in the future. Securities
considered as investments for a Fund of the Trust may also be appropriate for
other Funds or for other investment accounts and funds that may be managed by
the Adviser. Subject to applicable laws and regulations, the Adviser will
attempt to allocate equitably portfolio transactions among the Trust's Funds and
the portfolios of its other investment accounts and funds purchasing securities
whenever decisions are made to purchase or sell securities by a Fund and another
fund's portfolio or one or more of such other accounts or funds simultaneously.
In making such allocations, the main factors to be considered by the Adviser
will be the respective investment objectives of the Trust's Fund or Funds
purchasing such securities and such other accounts and funds, the relative size
of portfolio holdings of the
5
<PAGE>
same or comparable securities, the availability of cash for investment by the
Trust's Funds and such other accounts and funds, the size of investment
commitments generally held by the Trust's Funds and such accounts and funds, and
the opinions of the persons responsible for recommending investments to the
Trust and such other accounts and funds.
9. This Agreement shall continue in effect until August 1, 2000, unless and
until terminated by either party as hereinafter provided, and shall continue in
force from year to year thereafter, but only as long as such continuance is
specifically approved, at least annually, in the manner required by the
Investment Company Act of l940.
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 Trust or
by the Adviser upon sixty (60) days' written notice to the other party. The
Trust may effect termination by action of the Board of Trustees, or, with
respect to any Trust Fund, by vote of a majority of the outstanding voting
securities of that Fund, accompanied by appropriate notice.
This Agreement may be terminated, at any time, without the payment of any
penalty, by the Board of Trustees of the Trust, or, with respect to any Trust
Fund, by vote of a majority of the outstanding voting securities of that Fund,
in the event that it shall have been established by a court of competent
jurisdiction that the Adviser, or any officer or director of the Adviser, has
taken any action which results in a breach of the covenants of the Adviser set
forth herein.
6
<PAGE>
Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation, described in Section
2, earned prior to such termination.
10. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.
11. The Adviser and its affiliates reserve the right to grant, at any time, the
use of the name "Nuveen", or any approximation or abbreviation thereof, to any
other investment company or business enterprise. Upon termination of this
Agreement by either party, or by its terms, the Trust shall thereafter refrain
from using any name of the Trust which includes "Nuveen" or any approximation or
abbreviation thereof, or is sufficiently similar to such name as to be likely to
cause confusion with such name, and shall not allude in any public statement or
advertisement to the former association.
12. 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 receipt of such notice.
7
<PAGE>
13. The Trust's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the
Trust by the Trust's officers as officers and not individually and the
obligations imposed upon the Trust by this Agreement are not binding upon any of
the Trust's Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement to be
executed on the day and year above written.
NUVEEN MONEY MARKET TRUST
by: ____________________
Vice President
Attest: _________________________
Assistant Secretary
NUVEEN ADVISORY CORP.
by: ____________________
Vice President
Attest: _________________________
Assistant Secretary
8
<PAGE>
Exhibit A
Nuveen Money Market Fund
Nuveen Municipal Money Market Fund
Nuveen Institutional Tax-Exempt Money Market Fund
Nuveen California Tax-Exempt Money Market Fund
Nuveen New York Tax-Exempt Money Market Fund
9
<PAGE>
FORM OF DISTRIBUTION AGREEMENT
------------------------------
AGREEMENT made as of this 1st day of February, l999 between NUVEEN MONEY
MARKET TRUST, 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
without any sales charge, except that the public offering price of the Nuveen
Money Market Fund series of the Trust shall be the net asset value per Share
plus a sales charge of not more than 5.75% of such public offering price.
Shares of Nuveen Money Market Fund 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>
l0. 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.
l2. 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 l940, 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.
l3. 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.
l4. 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.
l5. This agreement shall continue in effect until August l, 2000, 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 l940. 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.
l6. This agreement shall automatically terminate in the event of its assignment.
l7. 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 MONEY MARKET TRUST
By _______________________
Vice President
Attest:
__________________________
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By _______________________
Vice President
Attest:
__________________________
Assistant Secretary
5
<PAGE>
CUSTODY AGREEMENT
=================
THIS AGREEMENT is made this 30th day of November, 1998 by and between
NUVEEN MONEY MARKET TRUST (the "Trust"), and THE CHASE MANHATTAN BANK.
W I T N E S S E T H
WHEREAS, the Trust 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 Trust intends to initially offer shares in one series, Nuveen
Income Fund (such series together with all other series subsequently established
by the Trust 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 Trust 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 Trust has furnished The Chase Manhattan
---------------------
Bank with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Trust'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;
(b) Incumbency and signature certificates identifying and containing the
signatures of the Trust's officers and/or the persons authorized to sign Proper
Instructions, as hereinafter defined, on behalf of the Fund;
<PAGE>
(c) The Trust'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 Trust'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 Trust's Board of Trustees appointing the investment
advisor of the Fund and resolutions of the Trust's Board of Trustees and the
Fund's Shareholders approving the proposed Investment Advisory Agreement between
the Trust and the advisor (the "Advisory Agreement");
(f) The Advisory Agreement;
(g) The Trust'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 Trust's most recent prospectus and statement of additional
information including all amendments and supplements thereto (the "Prospectus").
Upon request the Trust will furnish The Chase Manhattan Bank with copies of
all amendments of or supplements to the foregoing, if any. The Trust will also
furnish The Chase Manhattan Bank upon request with a copy of the opinion of
counsel for the Trust 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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<PAGE>
3. DEFINITIONS.
-----------
(a) "Authorized Person". As used in this Agreement, the term "Authorized
-----------------
Person" means the Trust's President, Treasurer and any other person, whether or
not any such person is an officer or employee of the Trust, duly authorized by
the Board of Trustees of the Trust to give Proper Instructions on behalf of the
Fund as set forth in resolutions of the Trust'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 Trust 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:
--------
3
<PAGE>
(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 status) or in the name of any subcustodian or any
nominee of such subcustodian
4
<PAGE>
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, 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 Trust. Such funds shall be
5
<PAGE>
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 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,
6
<PAGE>
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 Trust
signed by an officer of the Trust 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 Trust'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 Trust.
(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 System pursuant to Section 8 hereof, The Chase Manhattan Bank shall
also by book-entry or otherwise identify as
8
<PAGE>
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 Trust 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 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.
9
<PAGE>
(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;
(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
10
<PAGE>
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 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
11
<PAGE>
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 Trust 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 Trust'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 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
12
<PAGE>
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
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
13
<PAGE>
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.
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.
14
<PAGE>
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 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
15
<PAGE>
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:
(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
16
<PAGE>
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 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;
17
<PAGE>
(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;
(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 Trusts 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
18
<PAGE>
Agreement, in any and every case where payment for purchase of securities for
the account of the Fund is made by 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,
19
<PAGE>
copies of any such books and records 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 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
20
<PAGE>
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
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.
21
<PAGE>
(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 Trust assumes
--------------------------------------------------
full responsibility for insuring that the contents of each Prospectus of the
Trust 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
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
22
<PAGE>
(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 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
23
<PAGE>
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
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
24
<PAGE>
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. 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
25
<PAGE>
regulations, or any provision of the Declaration of Trust, and further provided,
that the Trust 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.
26
<PAGE>
29. SUCCESSOR CUSTODIAN. If a successor custodian shall be appointed by
----------------------
the Board of Trustees of the Trust, 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 Trust, 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 be
come 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 shall be entitled to fair compensation for its services during
such period as The Chase Manhattan Bank retains
27
<PAGE>
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, 333 West Wacker
Drive, Chicago, Illinois 60606 Attention: Fund 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 Trust establishes one or more
----------------
series of Shares in addition to the Nuveen Income Fund with respect to which it
desires to have the Custodian render services as custodian under the terms
hereof, it shall so notify the
28
<PAGE>
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 Trust's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the
Trust by the Trust's officers as officers and not individually and the
obligations imposed upon the Trust by this Agreement are not binding upon any of
the Trust's Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Fund.
29
<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: /s/ Tara Noonan-Amaral By: /s/ Thomas A. De Angelo
___________________________ ___________________________
THOMAS A. DE ANGELO
VICE PRESIDENT
NUVEEN MONEY MARKET TRUST
Attest: /s/ Gifford R. Zimmerman By: /s/ Stephen D. Foy
___________________________ ___________________________
STEPHEN D. FOY
VICE PRESIDENT &
CONTROLLER
30
<PAGE>
EXHIBIT A
---------
CUSTODY SERVICE FEE
-------------------
ADMINISTRATION AND MAINTENANCE FEE
- ----------------------------------
.01375% (1 3/8 Basis Points) on first $10 billion
.00875% (7/8 Basis Point) on second $10 billion
.0075% (3/4 Basis Point) on third $10 billion
.005% (1/2 Basis Point) on remainder
TRANSACTION FEES
- ----------------
$10.00 Per Book Entry or Physical Transaction
$35.00 Per Future Contract or Option wire
$8.00 Per outgoing Wire Transfer for ETFs
$5.00 Per incoming and outgoing Wire Transfer for Open
End and Money Market Funds
NOTES:
1. Schedule should be applied to total assets for all Exchange Traded Funds,
Open End Load Funds, and Money Market Funds.
2. Add $5.00 per book entry transaction and physical transaction if Custody
inputs trades.
BALANCES:
The allowable overdraft policy will not apply to the Nuveen Income Fund.
Instead, this series will receive an earnings credit which will be applied
to the bill and used to reduce the monthly custody fees. This monthly
assessment will be determined at the end of the month as follows:
The positve net cumulative balance less 10% reserves multiplied by the
monthly average 90-Day Treasury Bill rate divided by 365 days.
If the average monthly balance is negative a charge will be applied to
the custody bill as follows:
The negative net cumulative balance plus 10% reserves multiplied by
the average monthly Fed Funds rate divided by 365 days.
31
<PAGE>
1. TABLE OF CONTENTS
Page
----
<TABLE>
<CAPTION>
<S> <C> <C>
1. Appointment 1
2. Delivery of Documents 1
3. Definitions 3
4. Delivery and Registration of the Property 4
5. Voting Rights 5
6. Receipt and Disbursement of Money 5
6A. Advances By Custodian 7
7. Receipt and Delivery of Securities 8
8. Use of Securities Depository or the Book Entry System 9
9. Segregated Account 11
10. Instructions Consistent With The Declaration, etc. 12
11. Transaction Not Requiring Instructions, 15
Collection of Income and Other Payments 15
Miscellaneous Transactions 16
12. Transactions Requiring Instructions 16
13. Purchase of Securities 19
14. Sale of Securities 20
15. Not In Use 20
16. Records 20
17. Cooperation with Accountants 21
18. Reports to Fund Independent Public Accountants 21
19. Confidentiality 21
20. Equipment Failures 22
21. Right to Receive Advice 22
22. Compliance with Governmental Rules and Regulations 23
23. Compensation 23
24. Indemnification 23
25. Responsibility of Chase Manhattan Bank 25
26. Collection of Income 26
27. Ownership Certificates for Tax Purposes 26
28. Effective Period; Terminations and Amendment 28
29. Successor Custodian 29
30. Notices 29
31. Further Actions 29
32. Amendments 29
33. Additional Funds 29
34. Miscellaneous 30
35. Declaration of Trust 30
</TABLE>
32
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
. Transfer Agency Services
NUVEEN FUNDS
August 24, 1998
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents
-----------------
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
1. Appointment......................................................... 1
2. Representations and Warranties...................................... 1
3. Delivery of Documents............................................... 3
4. Services Provided................................................... 3
5. Fees and Expenses................................................... 4
6. Limitation of Liability and Indemnification......................... 6
7. Term................................................................ 8
8. Notices............................................................. 9
9. Waiver.............................................................. 9
10. Force Majeure....................................................... 9
11. Additional Funds.................................................... 10
12. Amendments.......................................................... 10
13. Assignment.......................................................... 10
14. Severability........................................................ 10
15. Governing Law....................................................... 10
Signatures................................................................. 10
</TABLE>
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents (continued)
-----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Schedule A -- Fees and Expenses........................................ A-1
Schedule B -- List of Nuveen Funds and Jurisdictions under
which Funds are Organized................................ B-1
Schedule C -- Transfer Agency Services Description..................... C-1
</TABLE>
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of August 24, 1998 by and between the Nuveen Funds
(each, a "Fund" and collectively the "Funds"), for the Funds listed on Schedule
B, and organized under the jurisdictions set forth on Schedule B, and Chase
Global Funds Services Company ("Chase"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, each Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, each Fund wishes to contract with Chase to provide certain
services with respect to the Fund;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Funds hereby appoint Chase to provide services for
the Funds, as described hereinafter, subject to the supervision of the Board of
Directors or Trustees of the Funds (the "Board"), for the period and on the
terms set forth in this Agreement. Chase accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Section 5 of and Schedule A to this Agreement.
2. Representations and Warranties.
(a) Chase represents and warrants to the Funds that:
(i) Chase is a corporation, duly organized and existing under the
laws of the State of Delaware;
(ii) Chase is duly qualified to carry on its business in the
Commonwealth of Massachusetts;
(iii) Chase is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement;
(iv) all requisite corporate proceedings have been taken to
authorize Chase to enter into and perform this Agreement;
(v) Chase has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;
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(vi) no legal or administrative proceedings have been instituted
or threatened which would impair Chase's ability to perform its duties and
obligations under this Agreement; and
(vii) Chase's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of Chase or any law or regulation applicable to Chase;
(b) Each Fund represents and warrants to Chase that:
(i) the Fund is a duly organized and existing and in good standing
under the laws of the jurisdictions set forth above its name on Schedule B;
(ii) the Fund is empowered under applicable laws and by its
Charter Document and By-Laws to enter into and perform this Agreement;
(iii) all requisite proceedings have been taken to authorize the
Fund to enter into and perform this Agreement;
(iv) the Fund is an investment company properly registered under
the 1940 Act;
(v) a registration statement under the Securities Act of 1933, as
amended ("1933 Act") and the 1940 Act on Form N-1A has been filed and will be
effective and will remain effective during the term of this Agreement, and all
necessary filings under the laws of the states will have been made and will be
current during the term of this Agreement;
(vi) no legal or administrative proceedings have been instituted
or threatened which would impair the Fund's ability to perform its duties and
obligations under this Agreement;
(vii) the Fund's registration statement complies in all material
respects with the 1933 Act and the 1940 Act (including the rules and regulations
thereunder) and none of the Fund's prospectuses and/or statements of additional
information contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein not misleading; and
(viii) the Fund's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of the Fund or any law or regulation applicable to it.
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3. Delivery of Documents. Each Fund will promptly furnish to Chase such
copies, properly certified or authenticated, of contracts, documents and other
related information that Chase may request or requires to properly discharge its
duties. Such documents may include but are not limited to the following:
(a) Resolutions of the Board authorizing the appointment of Chase to
provide certain services to the Fund and approving this Agreement;
(b) The Fund's Charter Document;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's registration statement including exhibits, as amended,
on Form N-1A (the "Registration Statement") under the 1933 Act and the 1940 Act,
as filed with the SEC;
(f) Copies of the Investment Advisory Agreement between the Fund and
its investment adviser (the "Advisory Agreement");
(g) Opinions of counsel and auditors' reports;
(h) The Fund's prospectus(es) and statement(s) of additional
information relating to all funds, series, portfolios and classes, as
applicable, and all amendments and supplements thereto (such Prospectus(es) and
Statement(s) of Additional Information and supplements thereto, as presently in
effect and as from time to time hereafter amended and supplemented, herein
called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into from time to time
including securities lending agreements, futures and commodities account
agreements, brokerage agreements and options agreements.
4. Services Provided.
(a) Chase will provide the following services subject to the control,
direction and supervision of the Board and its designated agents and in
compliance with the objectives, policies and limitations set forth in the Funds'
Registration Statement, Charter Document and By-Laws; applicable laws and
regulations; and all resolutions and policies implemented by the Board:
(i) Transfer Agency.
A description of the above service is contained in Schedule C to this Agreement.
(b) Chase will also:
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(i) provide office facilities with respect to the provision of the
services contemplated herein (which may be in the offices of Chase or a
corporate affiliate of Chase);
(ii) provide or otherwise obtain personnel sufficient for
provision of the services contemplated herein;
(iii) furnish equipment and other materials, which are necessary
or desirable for provision of the services contemplated herein; and
(iv) keep records relating to the services provided hereunder in
such form and manner as Chase may deem appropriate or advisable. To the extent
required by Section 31 of the 1940 Act and the rules thereunder, Chase agrees
that all such records prepared or maintained by Chase relating to the services
provided hereunder are the property of the Funds and will be preserved for the
periods prescribed under Rule 31a-2 under the 1940 Act, maintained at the Funds'
expense, and made available in accordance with such Section and rules.
5. Fees and Expenses.
(a) As compensation for the services rendered to the Funds pursuant to
this Agreement the Funds shall pay Chase monthly fees determined as set forth in
Schedule A to this Agreement. Such fees are to be billed monthly and shall be
due and payable upon receipt of the invoice. Upon any termination of the
provision of services under this Agreement before the end of any month, the fee
for the part of the month before such termination shall be prorated according to
the proportion which such part bears to the full monthly period and shall be
payable upon the date of such termination.
(b) For the purpose of determining fees calculated as a function of
each Fund's assets, the value of the Fund's assets and net assets shall be
computed as required by its currently effective Prospectus, generally accepted
accounting principles, and resolutions of the Board.
(c) The Funds may request additional services, additional processing,
or special reports, with such specifications, requirements and documentation as
may be reasonably required by Chase. If Chase elects to provide such services
or arrange for their provision, it shall be entitled to additional fees and
expenses at its customary rates and charges.
(d) Chase will bear its own expenses in connection with the performance
of the services under this Agreement except as provided herein or as agreed to
by the parties. Each Fund agrees to promptly reimburse Chase for any services,
equipment or supplies ordered by or for the Fund through Chase and for any other
expenses that Chase may incur on the Fund's behalf at the
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Fund's request or as consented to by the Fund. Such other expenses to be
incurred in the operation of the Fund and to be borne by the Funds, include, but
are not limited to: taxes; interest; brokerage fees and commissions; salaries
and fees of officers, directors, or trustees who are not officers, directors,
shareholders or employees of Chase, or the Fund's distributor; SEC and state
Blue Sky registration and qualification fees, levies, fines and other charges;
postage and mailing costs; costs of share certificates; advisory fees;
independent public accountants and custodians; insurance premiums including
fidelity bond premiums; legal expenses; consulting fees; customary bank charges
and fees; expenses of typesetting and printing of Prospectuses for regulatory
purposes and for distribution to current shareholders of the Fund (the Fund's
distributor to bear the expense of all other printing, production, and
distribution of Prospectuses, and marketing materials); expenses of printing and
production costs of shareholders' reports and proxy statements and materials;
expenses of proxy solicitation and annual meetings; costs and expenses of Fund
stationery and forms; customer service telephone expenses, costs and expenses of
telephone and data lines and devices which are specially requested by the Fund;
costs associated with corporate or trust, shareholder, and Board meetings; trade
association dues and expenses; reprocessing costs to Chase caused by third party
errors; and any extraordinary expenses and other customary Fund expenses.
(e) All fees, out-of-pocket expenses, or additional charges of Chase
shall be billed on a monthly basis and shall be due and payable upon receipt of
the invoice.
(f) Chase will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days shall bear interest in finance
charges equivalent to, in the aggregate, the Prime Rate (as reasonably
determined by Chase) plus two percent per year and all costs and expenses of
effecting collection of any such sums, including reasonable attorney's fees,
shall be paid by the Funds to Chase.
(g) In the event that the Funds are more than sixty (60) days
delinquent in payments of monthly billings in connection with this Agreement
(with the exception of specific amounts which may be contested in good faith by
the Funds), this Agreement may be terminated upon thirty (30) days' written
notice to the Funds by Chase. The Funds must notify Chase in writing of any
contested amounts within thirty (30) days of receipt of a billing for such
amounts. Disputed amounts are not due and payable while they are being
investigated.
5
<PAGE>
6. Limitation of Liability and Indemnification.
(a) Chase shall not be liable for any error of judgment or mistake of
law or for any loss or expense suffered by the Funds, in connection with the
matters to which this Agreement relates, except for a loss or expense solely
caused by or resulting from willful misfeasance, bad faith or negligence on
Chase's part in the performance of its duties or from reckless disregard by
Chase of its obligations and duties under this Agreement. In no event shall
Chase be liable for any indirect, incidental, special or consequential losses or
damages of any kind whatsoever, even if Chase has been advised of the likelihood
of such loss or damage and regardless of the form of action.
(b) Subject to Section 6(a) above, Chase shall not be responsible for,
and the Funds shall indemnify and hold Chase harmless from and against, any and
all losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities incurred by Chase, any of its agents, or the Funds'
agents in the performance of its/their duties hereunder, including but not
limited to those arising out of or attributable to:
(i) any and all actions of Chase or its officers or agents
required to be taken pursuant to this Agreement;
(ii) the reasonable reliance on or use by Chase or its officers or
agents of information, records, or documents which are received by Chase or its
officers or agents and furnished to it or them by or on behalf of the Funds, and
which have been prepared or maintained by the Funds or any third party on behalf
of the Funds;
(iii) the Funds' refusal or failure to comply with the terms of
this Agreement or the Funds' lack of good faith, or actions, or lack thereof,
involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of the Funds
hereunder;
(v) the taping or other form of recording of telephone
conversations or other forms of electronic communications with investors and
shareholders, or reasonable reliance by Chase on telephone or other electronic
instructions of any person acting on behalf of a shareholder or shareholder
account for which telephone or other electronic services have been authorized;
(vi) the reliance on or the carrying out by Chase or its officers
or agents of any proper instructions reasonably believed to be duly authorized,
or requests of the Funds or
6
<PAGE>
recognition by Chase of any share certificates which are reasonably believed to
bear the proper signatures of the officers of the Funds and the proper
countersignature of any transfer agent or registrar of the Funds;
(vii) any delays, inaccuracies, errors in or omissions from
information or data provided to Chase by data, corporate action, pricing
services or securities brokers and dealers;
(viii) the offer or sale of shares by any Fund in violation of any
requirement under the Federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any Federal agency or any state agency with respect
to the offer or sale of such shares in such state (1) resulting from activities,
actions, or omissions by the Funds or their other service providers and agents,
or (2) existing or arising out of activities, actions or omissions by or on
behalf of the Fund prior to the effective date of this Agreement;
(ix) any failure of a Fund's registration statement to comply with
the 1933 Act and the 1940 Act (including the rules and regulations thereunder)
and any other applicable laws, or any untrue statement of a material fact or
omission of a material fact necessary to make any statement therein not
misleading in a Fund's prospectus;
(x) the actions taken by the Funds, their investment adviser, and
their distributor in compliance with applicable securities, tax, commodities and
other laws, rules and regulations, or the failure to so comply; and
(xi) all actions, inactions, omissions, or errors caused by third
parties to whom Chase or the Funds has assigned any rights and/or delegated any
duties under this Agreement at the request of or as required by the Funds, their
investment advisers, distributor, administrator or sponsor.
(c) In performing its services hereunder, Chase shall be entitled to
reasonably rely on any oral or written instructions, notices or other
communications, including electronic transmissions, from the Funds and their
custodians, officers and directors, investors, agents and other service
providers and shareholders which Chase reasonably believes to be genuine, valid
and authorized, and shall be indemnified by the Funds for any loss or expense
caused by such reliance. Chase shall also be entitled to consult with and rely
on the advice and opinions of outside legal counsel retained by the Funds, as
necessary or appropriate.
7
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(d) Chase shall indemnify and hold the Funds harmless from and against
any and all losses, damages, costs, charges, payments, expenses and liability,
excluding attorneys' fees and costs, arising out of or attributable to Chase's
refusal or failure to comply with the material terms of this Agreement, or
Chase's lack of good faith, negligence or willful misconduct.
(e) Subject to the above Sections 6 (a) through 6 (d), any costs or
losses incurred by a Fund for the processing of any purchase, redemption,
exchange or other share transactions at a price per share other than the price
per share applicable to the effective date of the transaction (the foregoing
being generally referred to herein as "as of" transactions) will be handled in
the following manner:
(i) For each calendar year, if all "as of" transactions for the
year, taken in the aggregate, result in a net loss to a Fund ("net loss"), Chase
will reimburse the Fund for such net loss, except to the extent that such net
loss may be offset by application of a "net benefit" to the Fund carried over
from prior calendar years pursuant to sub-paragraph (ii) immediately below.
(ii) For each calendar year, if all "as of" transactions for the
year, taken in the aggregate, result in a net benefit to a Fund ("net benefit"),
the Fund shall not reimburse Chase for the amount of such net benefit; however,
any "net benefit" for any calendar year may be used to offset, in whole or in
part, any "net loss" suffered by the Fund in any future calendar year so as to
reduce the amount by which Chase shall be required to reimburse the Fund for
such "net loss" in such year pursuant to sub-paragraph (i) immediately above.
(iii) Any "net loss" for which Chase reimburses a Fund in any
calendar year shall not be carried over into future years so as to offset any
"net benefit" in such future years.
7. Term. This Agreement shall become effective on the date first
hereinabove written for an initial term of four years. The Agreement may be
modified or amended from time to time by mutual agreement between the parties
hereto. After the initial term, the Agreement shall continue in effect unless
terminated by either party on 6 months' prior written notice. Upon termination
of this Agreement, each Fund shall pay to Chase such compensation and any
reasonable out-of-pocket or other reimbursable expenses which may become due or
payable under the terms hereof as of the date of termination or after the date
that the provision of services ceases, whichever is later. If the Funds
terminate the Agreement for any reason during the first year of the initial
term, they will reimburse Chase in accordance with Schedule A.
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<PAGE>
8. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed effective on the date of personal delivery (by
private messenger, courier service or otherwise) or upon confirmed receipt of
telex or facsimile, whichever occurs first, or upon receipt if by mail to the
parties at the following address (or such other address as a party may specify
by notice to the other):
If to the Funds:
John Nuveen & Co., Incorporated
333 West Wacker Drive
Chicago, IL 60606
Attention: Fund Controller
Fax: (312) 917-8049
If to Chase:
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
Attention: Karl O. Hartmann, Esq., General Counsel
Fax: (617) 557-8616
9. Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
10. Force Majeure. Chase shall not be responsible or liable for any harm,
loss or damage suffered by the Funds, their investors, or other third parties or
for any failure or delay in performance of Chase's obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond Chase's control. In the event of a force majeure, any resulting harm,
loss, damage, failure or delay by Chase will not give the Funds the right to
terminate this Agreement.
11. Additional Funds. In the event that John Nuveen & Company Incorporated
sponsors additional open-end management companies with respect to which it
desires Chase to provide services under the terms of this Agreement, it shall so
notify Chase in writing, and if Chase agrees in writing to provide such
services, such Fund or Funds shall be subject to the terms of this Agreement and
Schedule C shall be modified accordingly.
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12. Amendments. This Agreement may be modified or amended from time to
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
13. Assignment. Chase may assign and delegate this Agreement and its
rights and obligations hereunder without the consent of the other party.
14. Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
NUVEEN FUNDS
By: /s/ Stuart Rogers
--------------------------
Name: Stuart Rogers
------------------------
Title: Vice President
-----------------------
CHASE GLOBAL FUNDS
SERVICES COMPANY
By: /s/ Donald P. Hearn
--------------------------
Name: Donald P. Hearn
------------------------
Title: Chairman and CEO
------------------------
10
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE A
FEES AND EXPENSES
Transfer Agency Fees
A. $18.50 per municipal fund account per annum
$18.25 per equity fund account per annum
$29.00 per money market fund account per annum
B. Out-of-pocket expenses, including but not limited to those in Section 5(d),
will be computed, billed and payable monthly Customized systems and
technology charges (excluding those projects covered under the conversion
agreement) will be negotiated individually and billed along with out-of-
pocket expenses.
C. If the Funds terminate this Agreement for any reason whatsoever between the
date of this Agreement and July 1, 1999, there will be immediately due and
owing to Chase by Nuveen a $6 million charge; if between the date of July
1, 1999 and June 30, 2000, a $4 million charge; and if between July 1, 2000
and June 30, 2001, a $2 million charge. In addition, the Funds will
reimburse Chase for all costs it incurs in connection with any conversion
to another transfer agent.
A-1
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MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE B
Flagship Admiral Funds Inc. (Maryland Corporation)
Flagship Utility Income Fund
Nuveen Investment Trust (Massachusetts Business Trust)
Nuveen Growth and Income Stock Fund
Nuveen Balanced Stock and Bond Fund
Nuveen Balanced Municipal and Stock Fund
Nuveen European Value Fund
Nuveen Investment Trust II (Massachusetts Business Trust)
Nuveen Rittenhouse Growth Fund
Nuveen Investment Trust III (Massachusetts Business Trust)
Nuveen Income Fund
Nuveen Flagship Municipal Trust (Massachusetts Business Trust)
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
Nuveen Flagship All-American Municipal Bond Fund
Nuveen Flagship Limited Term Municipal Bond Fund
Nuveen Flagship Intermediate Municipal Bond Fund
Nuveen Flagship Multistate Trust I (Massachusetts Business Trust)
Nuveen Flagship Arizona Municipal Bond Fund
Nuveen Flagship Colorado Municipal Bond Fund
Nuveen Flagship Florida Municipal Bond Fund
Nuveen Flagship Florida Intermediate Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen Flagship New Mexico Municipal Bond Fund
B-1
<PAGE>
Nuveen Flagship Pennsylvania Municipal Bond Fund
Nuveen Flagship Virginia Municipal Bond Fund
Nuveen Flagship Multistate Trust II (Massachusetts Business Trust)
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Nuveen Flagship Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Nuveen Flagship New Jersey Municipal Bond Fund
Nuveen Flagship New Jersey Intermediate Municipal Bond Fund
Nuveen Flagship New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
Nuveen Flagship Multistate Trust III (Massachusetts Business Trust)
Nuveen Flagship Alabama Municipal Bond Fund
Nuveen Flagship Georgia Municipal Bond Fund
Nuveen Flagship Louisiana Municipal Bond Fund
Nuveen Flagship North Carolina Municipal Bond Fund
Nuveen Flagship South Carolina Municipal Bond Fund
Nuveen Flagship Tennessee Municipal Bond Fund
Nuveen Flagship Multistate Trust IV (Massachusetts Business Trust)
Nuveen Flagship Kansas Municipal Bond Fund
Nuveen Flagship Kentucky Municipal Bond Fund
Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Nuveen Flagship Michigan Municipal Bond Fund
Nuveen Flagship Missouri Municipal Bond Fund
Nuveen Flagship Ohio Municipal Bond Fund
Nuveen Flagship Wisconsin Municipal Bond Fund
Nuveen Tax-Exempt Money Market Fund, Inc. (Maryland Corporation)
Nuveen Tax-Free Reserves, Inc. (Maryland Corporation)
Nuveen Tax-Free Money Market Fund, Inc. (Minnesota Corporation)
Nuveen Massachusetts Tax-Free Money Market Fund
B-2
<PAGE>
Nuveen New York Tax-Free Money Market Fund
Nuveen California Tax-Free Fund, Inc. (Maryland Corporation)
Nuveen California Tax-Free Money Market Fund
B-3
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE C
DESCRIPTION OF TRANSFER AGENCY SERVICES
The following is a general description of the transfer agency services Chase
shall provide to each Fund.
A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address, appropriate tax
certification and tax identifying number; (ii) number of shares of each
Fund, portfolio or class; (iii) historical information including, but not
limited to, dividends paid, date and price of all transactions including
individual purchases and redemptions, based upon appropriate supporting
documents; and (iv) any dividend reinvestment order, application,
specific address, payment and processing instructions and correspondence
relating to the current maintenance of the account.
B. Share Issuance. Record the issuance of shares of each Fund, portfolio or
class. Except as specifically agreed in writing between Chase and the
Fund, Chase shall have no obligation when countersigning and issuing
and/or crediting shares to take cognizance of any other laws relating to
the issue and sale of such shares except insofar as policies and
procedures of the Stock Transfer Association recognize such laws.
C. Transfer, Purchase, Exchange and Redemption Orders. Process all orders
for the transfer, purchase, exchange and redemption of shares of the Fund
in accordance with the Fund's current prospectus and customary transfer
agency policies and procedures, including electronic transmissions which
the Fund acknowledges it has authorized, or in accordance with any
instructions of the Fund or its agents which Chase reasonably believes to
be authorized.
D. Shareholder Communications. Transmit all communications by the Fund to
its shareholders promptly following the delivery by the Fund of the
material to be transmitted by mail, telephone, courier service or
electronically.
E. Proxy Materials. Assist with the mailing or transmission of proxy
materials, tabulating votes, and compiling and certifying voting results.
Services may include the provision of inspectors of election at any
meeting of shareholders.
F. Share Certificates. If permitted by Fund policies, and if a shareholder
of the Fund requests a certificate representing shares, Chase as Transfer
Agent, will countersign and mail a share certificate to the investor at
his/her address as it appears on the Fund's shareholder records.
C-1
<PAGE>
G. Returned Checks. In the event that any check or other negotiable
instrument for the payment of shares is returned unpaid for any reason,
Chase will take such steps, as Chase may, in its discretion, deem
appropriate and notify the Fund of such action. However, the Fund
remains ultimately liable for any returned checks or negotiable
instruments of its shareholders.
H. Shareholder & Broker-Dealer Correspondence. Acknowledge all
correspondence from shareholders and broker-dealers relating to share
accounts and undertake such other shareholder and broker-dealer
correspondence as may from time to time be mutually agreed upon.
I. Tax Reporting. Chase shall issue appropriate shareholder tax forms as
required.
J. Dividend Disbursing. Chase will prepare and mail checks, place wire
transfers or credit income and capital gain payments to shareholders.
The Fund will advise Chase of the declaration of any dividend or
distribution and the record and payable date thereof at least five (5)
days prior to the record date. Chase will, on or before the payment date
of any such dividend or distribution, notify the Fund's Custodian of the
estimated amount required to pay any portion of such dividend or
distribution payable in cash, and on or before the payment date of such
distribution, the Fund will instruct its Custodian to make available to
Chase sufficient funds for the cash amount to be paid out. If a
shareholder is entitled to receive additional shares by virtue of any
such distribution or dividend, appropriate credits will be made to each
shareholder's account.
K. Escheatment. Chase shall provide escheatment services only with respect
to the escheatment laws of the Commonwealth of Massachusetts, including
those which relate to reciprocal agreements with other states.
L. Telephone Services. Chase will provide staff coverage, training and
supervision in connection with the Fund's telephone line for shareholder
inquiries, and will respond to inquiries concerning shareholder records,
transactions processed by Chase, procedures to effect the shareholder
records and inquiries of a general nature relative to shareholder
services.
M. 12b-1. Chase will calculate and process all 12b-1 payments in accordance
with each Fund's current prospectus.
N. Commission Payments. Chase will calculate and process all commission
payments in accordance with each Fund's current prospectus.
O. Requests for Information. Chase will provide all required information in
a timely fashion in support of regulatory filings.
P. SAS 70. Chase will make available to the Funds' sponsor independent
auditor reports in compliance with SAS 70.
C-2
<PAGE>
Q. Regulatory Changes. Chase will provide assistance with the analysis and
implementation of any changes required by regulatory bodies.
C-3
<PAGE>
Exhibit 99.i
June 9, 1999
Nuveen Money Market Trust
333 West Wacker Drive
Chicago, Illinois 60606
Re: Opinion of Counsel regarding Pre-Effective Amendment No. 2 to be
Registration Statement filed on Form N-1A under the Securities Act of
1933 (File No. 333-74835)
Ladies and Gentlemen:
We have acted as counsel for Nuveen Money Market Trust, a Massachusetts
business trust (the "Trust"), in connection with the above-referenced
Registration Statement on Form N-1A as amended (the "Registration Statement"),
which relates to the shares of beneficial interest, par value $.01 per share, of
the Nuveen Institutional Tax-Exempt Money Market Fund, the Nuveen New York
Tax-Exempt Money Market Fund, the Nuveen Municipal Money Market Fund, each a
separate series of the Trust (collectively, the "Shares"). This opinion is being
delivered to you in connection with the Trust's filling of Pre-Effective
Amendment No. 2 to the Registration Statement to be filed with the Securities
and Exchange Commission on or about June 9, 1999 pursuant to the Securities Act
of 1933 (the "1933 Act"). With your permission, all assumptions and statements
of reliance herein have been made without any independent investigation or
verification on our part except to the extent otherwise expressly stated, and we
express no opinion with respect to the subject matter or accuracy of such
assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things,
executed copies of the following documents:
(a) a certificate of the Secretary of State of the Commonwealth of
Massachusetts ad to the existence of the Trust;
(b) copies, certified by the Secretary of State of the Commonwealth of
Massachusetts, of the Trust's Declaration of trust and of all
amendments thereto on file with in the office of the Secretary of
State (the "Caller");
(c) a certificate executed by Karen L. Healy, an Assistant Secretary of
the Trust, certifying as to, and attaching copies of, the Charter and
the By-Laws (the "By-Laws"), and certain resolutions adopted by the
Board of Trustees of the Trust authorizing the issuance of the Shares;
and
<PAGE>
Nuveen Money Market Trust
June 9, 1999
Page 2
(d) a printer's proof, dated June 9, 1999, of the Amendment.
In our capacity as counsel to the Trust, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In all such examinations, we have
assumed the legal capacity of all natural persons executing documents, the
genuineness of all signatures, the authenticity of all original or certified
copies, and the conformity to original or certified copies of all copies
submitted to us as conformed or reproduced copies. As to various questions of
fact relevant to such opinion, we have relied upon, and assumed the accuracy of,
certificates and oral or written statements of public officials and officers or
representatives of the Trust. We have assumed that the Registration Statement,
as filed with the Securities and Exchange Commission, will be in substantially
the form of the printer's proof referred to in paragraph (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Trust's
charter 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 Trust may, under
certain circumstances, be held personally liable for its obligations.
The opinion expressed herein is limited to the laws of the Commonwealth of
Massachusetts.
We hereby 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 1933
Act.
Very truly yours,
/s/ Morgan, Lewis & Bockius
- ---------------------------
Morgan, Lewis & Bockius LLP
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated June 7, 1999, and to all references to our Firm included in or made a part
of this registration statement of Nuveen Money Market Trust (comprising the
Nuveen Money Market Fund).
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 7, 1999
<PAGE>
NUVEEN MONEY MARKET TRUST
Form of Subscription Agreement
------------------------------
This Agreement made this ____ day of ________, 1999 by and between Nuveen
Money Market Trust, a Massachusetts business trust (the "Trust"), and Nuveen
Advisory Corp., a Delaware corporation (the "Subscriber");
WITNESSETH:
WHEREAS, the Trust 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 Trust's Board of Trustees
to serve as investment adviser to the Trust; and
WHEREAS, the Subscriber wishes to subscribe for and purchase, and the Trust
wishes to sell to the Subscriber, 100,000 common shares (25,000 shares of each
of the four classes of shares designated in the Trust's Establishment and
Designation of Classes), for a purchase price of $1.00 per share;
NOW THEREFORE, IT IS AGREED:
1. The Subscriber subscribes for and agrees to purchase from the Trust
100,000 common shares (25,000 shares of each of the four classes of shares
designated in the Fund's Establishment and Designation of Classes), for a
purchase price of $1.00 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
Trust.
2. The Trust agrees to issue and sell said shares to Subscriber promptly
upon its receipt of the purchase price.
3. To induce the Trust 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 Trust in reliance on an exemption
from the registration requirements of the Securities Act;
(c) That the Trust'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 Trust 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>
3
6. The Trust's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Trust
by the Trust's officers as officers and not individually and the obligations
imposed upon the Trust by this Agreement are not binding upon any of the Trust's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Trust.
IN WITNESS WHEREOF, this Subscription Agreement has been executed by the
parties hereto as of the day and date first above written.
NUVEEN MONEY MARKET TRUST
By: __________________________
NUVEEN ADVISORY CORP.
By: _____________________________
<PAGE>
Nuveen money market trust
(Nuveen Money Market Fund)
Plan of Distribution and Service
Pursuant to Rule 12b-1
February 1, 1999
Whereas, Nuveen Money Market Trust, a Massachusetts business trust (the
"Trust"), 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 Trust is authorized to issue shares in several series;
Whereas, the Trust employs John Nuveen & Co. Incorporated (the
"Distributor") as distributor of the shares of each Fund (the "Shares") pursuant
to a Distribution Agreement dated as of February 1, 1999;
Whereas, the Nuveen Money Market Fund series of the Trust (the "Fund") is
authorized to issue Shares in four different classes ("Classes"): Class A, Class
B, Class C and Class R.
Whereas, the Trust, on behalf of 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 Trust 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 Trust 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
Trust'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
<PAGE>
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;
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:
-2-
<PAGE>
(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) 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.
-3-
<PAGE>
(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 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 month-end or at such other intervals as the Board of Trustees may
determine will not exceed the appropriate amount based on the annual percentages
set forth in subparagraphs b(i), (ii) and (iii) 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 month.
2. This Plan shall not take effect until the Plan, together with any
related agreement(s), has been approved with respect to the affected Class
thereof by votes of a majority of both (a) the Board of Trustees of the Trust,
and (b) those Trustees of the Trust who are not "interested persons" of the
Trust (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, 1999, 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 Trust
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 as to the Fund or as to a given Class
A, Class B or Class C of the Fund 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 applicable Class.
-4-
<PAGE>
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 of the Fund. No material amendment to the Plan shall be
made unless approved in the manner provided in paragraph 2 hereof.
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 Trust
shall be committed to the discretion of the Trustees who are not such interested
persons.
8. The Trust 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 Money Market Trust
Multiple Class Plan
Adopted Pursuant to Rule 18f-3
Whereas, Nuveen Money Market Trust, a Massachusetts business trust (the
"Trust"), 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 Trust 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
Trust's series together with all other such series subsequently established by
the Trust being referred to herein individually as a "Fund" and collectively as
the "Funds");
Whereas, the series of the Trust designated as Nuveen Money Market Fund
(this series, together with any future series having the same multi-class
structure shall herein be referred to as a "Multi-Class Fund") is authorized to
and has divided the shares of that Multi-Class Fund into four classes,
designated as Class A Shares, Class B Shares, Class C Shares and Class R Shares;
and
Whereas, the Board of the Trust as a whole, and the Trustees who are not
interested persons of the Trust (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 Multi-Class Fund individually,
and each Multi-Class Fund and the Trust as a whole.
Now, Therefore, the Trust 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 Multi-Class
Fund shall represent interests in the same portfolio of investments of that
Multi-Class Fund 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 Multi-Class Fund, as the same may be amended or
supplemented from time to time (each a "Prospectus" and "SAI" and collectively,
the
<PAGE>
"Prospectus" and "SAI"); (iv) the designation of each class of shares; and (v)
conversion features.
Section 2. Distribution and Service Arrangements; Conversion Features.
Class A Shares, Class B Shares, Class C Shares and Class R Shares of each Multi-
Class 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 without
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 Multi-Class
Fund 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 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.
(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 Multi-Class Fund 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;
-2-
<PAGE>
(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
Multi-Class Fund 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 Trust's
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 Multi-Class Fund 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;
(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 Multi-Class Fund allocable to Class C
Shares, which, as set forth in the Prospectus, SAI
-3-
<PAGE>
and the 12b-1 Plan, will be used to reimburse John Nuveen & Co.
Incorporated, the Trust's 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
Multi-Class Fund will be allocated to each class of shares based on each class'
relative percentage of the total value of shares outstanding of the Multi-Class
Funds at the beginning of the day, after such net assets are adjusted for the
prior day's capital share transactions.
(b) Multi-Class Fund Level Expenses. Expenses that are attributable to a
Multi-Class Fund, but not a particular class thereof ("Multi-Class Fund 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 Multi-Class
Fund at the beginning of the day, after such net assets are adjusted for the
prior day's capital share transactions. Multi-Class Fund level expenses include
fees for services that are received equally by the classes under the same fee
arrangement. All expenses attributable to a Multi-Class Fund that are not "class
level expenses" (as defined below) shall be Multi-Class Fund level expenses,
including but not limited to transfer agency fees and expenses, share
registration expenses, and shareholder reporting expenses.
(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
-4-
<PAGE>
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 Trust (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 Multi-
Class Fund level expenses and the class level expenses (not including 12b-1 plan
payments) exceed the daily expense cap for the Multi-Class Fund, an appropriate
waiver/reimbursement will be made to the Multi-Class Fund. 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 Multi-Class
Fund 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 Multi-Class Fund
may be exchanged only for shares of the same class of another Multi-Class Fund,
except as otherwise set forth in the Prospectus and SAI.
Section 5. Term and Termination.
(a) The Multi-Class Funds. This Plan shall become effective with respect to
each Multi-Class Fund 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 Multi-
Class Fund until terminated in accordance with the provisions of Section 5(c)
hereof.
(b) Additional Multi-Class Funds or Classes. This Plan shall become
effective with respect to any class of shares of a Multi-Class Fund other than
Class A, Class B, Class C or Class R and with respect to each additional Multi-
Class Fund or class thereof established by a Trust 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 Multi-Class Fund or class by votes of a majority of both (i) the
members of the Board of a Trust, as a whole, and (ii) the Non-Interested
Members, cast at a meeting held before the initial public offering of such
additional Multi-Class Fund or classes thereof), and shall continue in effect
with respect to each such additional Multi-Class Fund 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.
-5-
<PAGE>
(c) Termination. This Plan may be terminated at any time with respect to
any Trust or any Multi-Class Fund or class thereof, as the case may be, by vote
of a majority of both the members of the Board of a Trust, as a whole, and the
Non-Interested Members. The Plan may remain in effect with respect to a
particular Trust or any Multi-Class Fund or class thereof even if it has been
terminated in accordance with this Section 5(c) with respect to any other Trust
or Multi-Class Fund or class thereof.
Section 6. Subsequent Trusts. 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 Trust"), will be covered by the terms and conditions of this Plan,
provided that the Board of such Future Trust as a whole, and the Non-Interested
Members of such Future Trust , 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 Multi-Class Fund of such Future Trust
individually, and each Multi-Class Fund of such Future Trust and such Future
Trust as a whole.
Section 7. Amendments.
(a) General. Except as set forth below, any material amendment to this Plan
affecting a Trust or Multi-Class Fund or class thereof shall require the
affirmative vote of a majority of both the members of the Board of that Trust,
as a whole, and the Non-Interested Members that the amendment is in the best
interests of each class of each Trust individually and each Multi-Class Fund as
a whole.
(b) Future Trusts. Any amendment to the Plan solely for the purpose of
adding a Future Trust as a party hereto in accordance with Section 6, will not
require any action by the Board of the Trust.
Effective Date: February 1, 1999
-6-
