<PAGE>
As filed with the Securities and Exchange Commission on April 12, 1995.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
[_]
File No. 2-57408
Pre-Effective Amendment No. [_]
---
Post-Effective Amendment No. 30
--- [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
[_]
File No. 811-2692
Amendment No. 21
--- [X]^
NUVEEN MUNICIPAL BOND FUND
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive, Chicago, 60606
Illinois
(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number, Including Area Code: (312) 917-7700
James J. Wesolowski, Esq.--Vice President
333 West Wacker Drive
Chicago, Illinois 60606
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[_]
Immediately upon filing pursuant to paragraph (b), or
[_] ^
on
(Date) pursuant to paragraph (b),
or
[_]
60 days after filing pursuant to paragraph (a)(1), or
[X]
on June 13, 1995 pursuant to para-
graph (a)(1) of Rule 485
[_]
75 days after filing pursuant to paragraph (a)(2)
on
(Date) pursuant to paragraph(a)(2)
[_] ^
PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT HAS
REGISTERED AN INDEFINITE NUMBER OF SHARES (DESIGNATED AS CLASS R SHARES). REG-
ISTRANT ELECTS TO REGISTER AN INDEFINITE NUMBER OF SHARES DESIGNATED AS CLASS
A AND CLASS C SHARES. A RULE 24F-2 NOTICE FOR THE REGISTRANT'S FISCAL YEAR
ENDED FEBRUARY 28, 1995, IS PROPOSED TO BE FILED ON OR ABOUT APRIL 20, 1995.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CONTENTS
OF
POST-EFFECTIVE AMENDMENT NO. 30
TO
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FILE NO. 2-57408
AND
AMENDMENT NO. 21
TO
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
FILE NO. 811-2692
This Registration Statement comprises the following papers and contents:
The Facing Sheet
Cross-Reference Sheet
Part A--The Prospectus
Part B--The Statement of Additional Information
Copy of Annual Report to Shareholders (the financial statements from
which are incorporated by reference into the Statement of Additional
Information)
Part C--Other Information
Signatures
Index to Exhibits
Exhibits
<PAGE>
NUVEEN MUNICIPAL BOND FUND
-----------------
CROSS REFERENCE SHEET
PART A--PROSPECTUS
<TABLE>
<CAPTION>
TEM IN PART AI
OF FORM N-1A PROSPECTUS LOCATION
- -------------- -------------------
<S> <C>
1 Cover Page Cover Page
2 Synopsis Summary of Fund Expenses; How to Determine
If The Fund Is Right For You
3 Condensed Financial Information Financial Highlights
4 General Description of General Information; What Are The Fund's
Registrant Investment Objectives and Policies
5 Management of the Fund Summary of Fund Expenses; Who Is
Responsible for the Operation of the Fund;
Management of the Fund; General Information
5A Management's Discussion of Fund Incorporated by Reference to Annual Report
Performance to Shareholders; Distributions and Taxes
6 Capital Stock and Other General Information; Distributions and
Securities Taxes
7 Purchase of Securities Being Flexible Sales Charge Program; How to Buy
Offered Fund Shares; Distribution and Service Plan;
Management of the Fund; Net Asset Value;
How to Buy Fund Shares
8 Redemption or Repurchase How to Redeem Fund Shares
9 Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
TEM IN PART BI LOCATION IN STATEMENT
OF FORM N-1A OF ADDITIONAL INFORMATION
- -------------- -------------------------
<S> <C>
10 Cover Page Cover Page
11 Table of Contents Cover Page
12 General Information and History Not Applicable
13 Investment Objectives and Fundamental Policies and Investment
Policies Portfolio
14 Management of the Fund Management
15 Control Persons and Principal Management
Holders of Securities
16 Investment Advisory and Other Investment Adviser and Investment
Services Management Agreement; Distribution and
Service Plan; Independent Public
Accountants and Custodian
17 Brokerage Allocation and Other Portfolio Transactions
Practices
18 Capital Stock and Other See "General Information" in the Prospectus
Securities
19 Purchase, Redemption and Pricing Additional Information on the Purchase and
of Securities Redemption of Fund Shares; Distribution and
Service Plan; Net Asset Value
20 Tax Status Tax Matters
21 Underwriters Additional Information on the Purchase and
Redemption of Fund Shares; See "How to Buy
Fund Shares" and "Management of the Fund"
in the Prospectus
22 Calculation of Performance Data Performance Information
23 Financial Statements Incorporated by Reference to Annual Report
to Shareholders
</TABLE>
<PAGE>
PART A--PROSPECTUS
NUVEEN MUNICIPAL BOND FUND
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
NUVEEN MUNICIPAL BOND FUND
. PROSPECTUS
. APPLICATION
<PAGE>
THE NUVEEN FAMILY OF TAX-FREE VALUE FUNDS
Nuveen offers individual investors 16 different long-term
tax-free mutual funds to choose from, including:
NATIONAL LONG- Nuveen Municipal Bond Fund
TERM FUNDS Nuveen Insured Municipal Bond Fund
STATE LONG-TERM Arizona
FUNDS Nuveen Arizona Tax-Free Value Fund
California
Nuveen California Tax-Free Value Fund
Nuveen California Insured Tax-Free Value Fund
Florida
Nuveen Florida Tax-Free Value Fund
Maryland
Nuveen Maryland Tax-Free Value Fund
Massachusetts
Nuveen Massachusetts Tax-Free Value Fund
Nuveen Massachusetts Insured Tax-Free Value Fund
Michigan
Nuveen Michigan Tax-Free Value Fund
New Jersey
Nuveen New Jersey Tax-Free Value Fund
New York
Nuveen New York Tax-Free Value Fund
Nuveen New York Insured Tax-Free Value Fund
Ohio
Nuveen Ohio Tax-Free Value Fund
Pennsylvania
Nuveen Pennsylvania Tax-Free Value Fund
Virginia
Nuveen Virginia Tax-Free Value Fund
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
NUVEEN MUNICIPAL BOND FUND
Prospectus
June 13, 1995
Nuveen Municipal Bond Fund (the "Fund") is designed to provide
as high a level of current interest income exempt from regular
federal income tax as is consistent, in the view of the Fund's
management, with preservation of capital. The Fund invests in
investment grade quality, long-term Municipal Obligations
judged by the Fund's investment adviser to offer the best val-
ues among Municipal Obligations of similar credit quality.
The Fund has adopted a Flexible Sales Charge Program which pro-
vides you with alternative ways of purchasing Fund shares based
upon your individual investment needs and preferences. You may
purchase Class A Shares at a price equal to their net asset
value plus an up-front sales charge. You may purchase Class C
Shares without any up-front sales charge at a price equal to
their net asset value but subject to an annual distribution fee
designed to compensate securities dealers over time for the
sale of Fund shares. Class C Shares are subject to a 1% contin-
gent deferred sales charge ("CDSC") for redemptions within 12
months of purchase and automatically convert to Class A Shares
six years after purchase. Both Class A Shares and Class C
Shares are subject to annual service fees, which are used to
compensate securities dealers for providing you with ongoing
financial advice and other services. Under the Flexible Sales
Charge Program, all Fund shares outstanding as of June 13,
1995, have been designated as Class R Shares. Class R Shares
are available for purchase at a price equal to their net asset
value only under certain limited circumstances, or by specified
investors, as described herein. See "How to Buy Fund Shares."
This Prospectus contains information you should know before in-
vesting in the Fund. Please retain it for future reference. You
can find more detailed information about the Fund in the
"Statement of Additional Information" dated June 13, 1995. For
a free copy of this Statement, write to the Fund, c/o John
Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, IL
60606, or call Nuveen toll-free at 800-621-7227. The Statement
has been filed with the Securities and Exchange Commission and
is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guar-
anteed or endorsed by, any bank and are not federally insured
by the Federal Deposit Insurance Corporation, the Federal Re-
serve Board, or any other agency. Shares of the Fund involve
investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
JOHN NUVEEN & CO. INCORPORATED
FOR INFORMATION, CALL TOLL-FREE 800-621-7227
1
<PAGE>
CONTENTS
3 Summary of Fund Expenses
- --------------------------------------------------------------------------------
4
How to Determine if the Fund Is Right for You
- --------------------------------------------------------------------------------
Financial Highlights
8
- --------------------------------------------------------------------------------
9 Who Is Responsible for the Operation of the Fund? [/R]
- --------------------------------------------------------------------------------
What are the Fund's Investment Objective and Policies?
9
- --------------------------------------------------------------------------------
14 Flexible Sales Charge Program [/R]
- --------------------------------------------------------------------------------
17 How to Buy Fund Shares [/R]
- --------------------------------------------------------------------------------
29 Distribution and Service Plan [/R]
- --------------------------------------------------------------------------------
How to Redeem Fund Shares
29
- --------------------------------------------------------------------------------
33 Management of the Fund [/R]
- --------------------------------------------------------------------------------
35 How the Fund Shows Performance [/R]
- --------------------------------------------------------------------------------
37 Distributions and Taxes [/R]
- --------------------------------------------------------------------------------
41 Net Asset Value [/R]
- --------------------------------------------------------------------------------
General Information
41
- --------------------------------------------------------------------------------
Appendix A--Taxable Equivalent Yield Tables
- --------------------------------------------------------------------------------
Application
- --------------------------------------------------------------------------------
2
<PAGE>
SUMMARY OF FUND EXPENSES
------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES (AS A PERCENT OF OFFERING PRICE)
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS C CLASS R
----------- ----------- -------
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases 4.50% None None
Maximum Sales Load Imposed on Reinvested
Dividends None None None
Deferred Sales Charge (for sales within 12
months of purchase) None 1.00% None
Redemption Fees None None None
Exchange Fees None None None
ANNUAL OPERATING EXPENSES (AS A PERCENT
OF AVERAGE DAILY NET ASSETS)
----------------------------------------------------------------------------
<CAPTION>
CLASS A (1) CLASS C (1) CLASS R
----------- ----------- -------
<S> <C> <C> <C>
Management Fees .45% .45% .45%
Rule 12b-1 Fees (2) .25% 1.00% None
Other Operating Expenses .14% .14% .14%
---- ----- ----
Total Expenses .84% 1.59% .59%
</TABLE>
--------
(1) The percentages shown are estimated because no Class
A Shares or Class C Shares were outstanding during
the Fund's fiscal year ended February 28, 1995. Ac-
tual fees and expenses may be greater or less than
those shown.
(2) Class C Shares are subject to an annual distribution
fee of .75% of average daily net assets, less the
amount of any CDSC received by Nuveen as to which no
reinstatement privilege has been exercised, to com-
pensate Authorized Dealers over time for the sale of
Fund shares. Both Class A Shares and Class C Shares
are subject to an annual service fee of .25% of av-
erage daily net assets to compensate Authorized
Dealers for ongoing financial advice and other serv-
ices. See "Distribution and Service Plan." Long-term
holders of Class C Shares may pay more in Rule 12b-1
fees than the economic equivalent of the maximum
front-end sales charge permitted under the National
Association of Securities Dealers Rules of Fair
Practice.
The purpose of the tables above is to help you under-
stand all expenses and fees that you would bear directly
or indirectly as a Fund shareholder. The expenses and
fees shown are for the fiscal year ended February 28,
1995.
EXAMPLE*
You would pay the following expenses on a $1,000 in-
vestment over various time periods, assuming (1) a 5%
annual rate of return and (2) redemption at the end of
each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $53 $71 $90 $144
Class C $26** $50 $87 $150
Class R $ 6 $19 $33 $ 74
</TABLE>
*This example does not represent past or future ex-
penses. Actual expenses may be greater or less than
those shown. Moreover, a Fund's actual rate of return
may be greater or less than the hypothetical 5% return
shown in this example. This example assumes that the
percentage amounts listed under Annual Operating Ex-
penses remain the same in each of the periods. The ten-
year figure for Class C Shares reflects the automatic
conversion of Class C Shares into Class A Shares six
years after purchase. Based on the foregoing assump-
tions, the expenses incurred on an investment in Class C
Shares will exceed the expenses incurred on an invest-
ment in Class A Shares sometime in the sixth year after
purchase. You should also note that Class R Shares are
available for purchase only under certain limited cir-
cumstances, or by specified investors. For additional
information about the Fund's fees and expenses, see
"Distribution and Service Plan" and "Management of the
Fund."
**If shares are held longer than 12 months, so that no
CDSC is imposed, expenses in the first year would be
$16.
3
<PAGE>
HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
------------------------------------------------------------------------------
There are many reasons why you might invest in the
Fund. These can include:
. lowering the tax burden on your investment income
. earning regular monthly dividends
. seeking to preserve your investment capital
. systematically setting money aside for retirement,
college funding or estate planning purposes
While there can be no assurance that the Fund will ena-
ble you to achieve your individual investment goals, it
has been designed for investors who have these kinds of
investment goals in mind.
In addition, the Fund incorporates the following fea-
tures and benefits. You should carefully review the
more detailed description of these
features and benefits elsewhere in the Prospectus to
make sure they serve your individual investment goals.
MONTHLY, TAX- The Fund provides monthly dividends exempt from regular
FREE INCOME federal income tax.
DIVERSIFIED,
INVESTMENT GRADE The Fund purchases investment grade quality Municipal
QUALITY PORTFOLIO Obligations issued within the 50 states and certain
U.S. possessions or territories. The Fund is diversi-
fied and maintains diversity within its portfolio by
selecting Municipal Obligations of different issuers.
The Fund further enhances its portfolio mix by purchas-
ing Municipal Obligations of different types and pur-
poses and from different geographic regions across the
country.
EXPERIENCED
MANAGEMENT The Fund is managed by Nuveen Advisory Corp. ("Nuveen
Advisory"), a wholly-owned subsidiary of John Nuveen &
Co. Incorporated ("Nuveen"). Founded in 1898, Nuveen is
the oldest and largest investment banking firm in the
country devoted exclusively to tax-exempt securities.
Nuveen Advisory currently manages 76 different tax-free
portfolios representing approximately $30 billion in
assets.
VALUE INVESTING
As a guiding policy, Nuveen Advisory's portfolio manag-
ers seek investment grade quality, undervalued or un-
derrated Municipal Obligations which offer the best
values among Municipal Obligations of similar credit
quality. By selecting these Municipal Obligations,
Nuveen Advisory seeks to position the Fund better to
achieve its investment
4
<PAGE>
------------------------------------------------------------------------------
objective of as high a level of current interest income
exempt from regular federal income tax as is consistent,
in the view of the Fund's management, with preservation
of capital, regardless of which direction the market may
move.
NUVEEN RESEARCH
Nuveen Advisory's portfolio managers call upon the re-
sources of Nuveen's Research Department, the largest in
the investment banking industry devoted exclusively to
tax-exempt securities. Nuveen research analysts reviewed
in 1994 more than $100 billion of tax-exempt securities
sold in new issue and secondary markets.
LOW MINIMUMS
You can start earning tax-free income with a low initial
investment of $1,000 in a particular class. See "How to
Buy Fund Shares."
FLEXIBLE SALES For many investors, working with a professional finan-
CHARGE PROGRAM cial adviser is an important part of their financial
strategy. Because Nuveen recognizes the value a finan-
cial adviser can provide in developing and implementing
a comprehensive plan for your financial future, Nuveen's
open-end long-term bond funds ("Nuveen Mutual Funds")
are sold with a sales charge, either at the time of pur-
chase or over time in the form of a distribution fee.
This provides your financial adviser with compensation
for the professional advice and service you receive in
financial planning and investment selection.
The Fund has adopted a Flexible Sales Charge Program
which provides you with alternative ways of purchasing
Fund shares based upon your individual investment needs
and preferences. As described below, the Fund offers
Class A Shares, Class C Shares and, under certain lim-
ited circumstances, Class R Shares. In deciding which
class of the Fund's shares to purchase, you should con-
sider all relevant factors, including the dollar amount
of your purchase, the length of time you expect to hold
the shares and whether a CDSC would apply, the amount of
any applicable up-front sales charge, the amount of any
applicable distribution or service fee that may be in-
curred while you own the shares, and whether or not you
will be reinvesting income or capital gain distributions
in additional shares. For assistance with this decision,
please refer to the tables under "Summary of Fund Ex-
penses" on page 3 of this Prospectus which set forth ex-
amples of the expenses applicable to each class of
shares, or consult your financial adviser. The following
summary describes the three classes of shares offered by
the Fund:
Class A Shares
. available at net asset value plus an up-front sales
charge
5
<PAGE>
------------------------------------------------------------------------------
. certain purchasers qualify for a reduction or waiver
of the up-front sales charge
. annual service fee to compensate securities dealers
who have sales agreements with Nuveen ("Authorized
Dealers") for providing you with ongoing financial ad-
vice and other services
Class C Shares
. available at net asset value without any up-front
sales charge
. annual distribution fee to compensate Authorized Deal-
ers over time for the sale of Fund shares
. automatic tax-free conversion to Class A Shares six
years after purchase
. annual service fee to compensate Authorized Dealers
for providing you with ongoing financial advice and
other services
. 1% CDSC on shares redeemed within 12 months of pur-
chase.
Class R Shares
. if you owned Fund shares as of June 13, 1995, those
shares have been designated as Class R Shares
. available for purchase under certain limited circum-
stances, or by specified investors, at net asset value
without any sales charge or annual distribution or
service fees
See "Flexible Sales Charge Program" and "How to Buy Fund
Shares" for additional information about the Fund's
three classes of shares.
AUTOMATIC DEPOSIT The Fund offers a number of investment options, includ-
PLANS ing automatic deposit, direct deposit and payroll deduc-
tion, to help you add to your account on a regular ba-
sis.
AUTOMATIC
REINVESTMENT All monthly dividends or capital gains paid with respect
to each class of shares will be reinvested automatically
into additional shares of the same class without a sales
charge, unless you elect to receive them in cash. Sepa-
rately, distributions from any Nuveen unit investment
trust (a "Nuveen UIT") may be used to buy Class A Shares
and, under certain circumstances, Class R Shares, in ei-
ther case without a sales charge at net asset value.
EXCHANGE
PRIVILEGE Shares of a class may be quickly and easily exchanged by
telephone, without a sales charge, for shares of the
same or equivalent class of another Nuveen Mutual Fund
or for shares of certain Nuveen money market funds.
Class R Shares of the Fund may be exchanged for Class A
Shares of the Fund at any time, provided that the cur-
rent net asset value of those Class R Shares is at least
$1,000 or you already own Class A Shares.
6
<PAGE>
------------------------------------------------------------------------------
LIQUIDITY
You may redeem all or a portion of your Fund shares on
any business day at that day's net asset value for the
class of shares you are redeeming. An investor purchas-
ing Class C Shares agrees to pay a CDSC of 1% to Nuveen
if Class C Shares are redeemed within 12 months of pur-
chase. The Fund will redeem shares at net asset value
and pay the CDSC to Nuveen on the shareholder's behalf
from the proceeds of the redemption. Remember that share
prices will fluctuate with market conditions and upon
redemption may be worth more or less than their original
cost. See "Contingent Deferred Sales Charge," below, and
"How to Redeem Fund Shares."
AUTOMATIC If you own shares totalling $10,000 or more, you can ar-
WITHDRAWAL range to have $50 or more sent to you from your account
either monthly or quarterly.
TELEPHONE You may establish free telephone redemption privileges
REDEMPTIONS for your account.
NO REDEMPTION There are no fees imposed by the Fund or Nuveen for
FEES selling shares when redeeming all or part of your hold-
ings. However, your financial adviser may charge you for
serving as agent in the redemption of shares.
CONTINGENT A CDSC of 1% of the lower of (i) the net asset value at
DEFERRED SALES the time of purchase of the Class C Shares or (ii) the
CHARGE net asset value at the time of redemption will be
charged if Class C Shares are redeemed within 12 months
of purchase. See "How to Redeem Fund Shares."
RISKS AND SPECIAL
CONSIDERATIONS You should consider certain other factors about the Fund
before investing. As with other bond mutual funds or any
long-term, fixed income investment, the value of the
Fund's portfolio will tend to vary inversely with
changes in prevailing interest rates. Accordingly, the
Fund should be considered a long-term investment, de-
signed to provide the best results when held for a mul-
ti-year period. The Fund may not be suitable if you have
a short-term investment horizon. The Fund also has the
ability to engage in certain investment practices, in-
cluding the purchase of Municipal Obligations that pay
interest subject to the federal alternative minimum tax,
the purchase or sale of securities on a when-issued or
delayed delivery basis and the purchase or sale of mu-
nicipal lease and installment purchase obligations. The
Fund to date has not invested in Municipal Obligations
that pay interest subject to the federal alternative
minimum tax and has no present intention of doing so. As
described elsewhere in this Prospectus, the Fund may en-
gage in the investment practices listed above only under
strict limits.
7
<PAGE>
FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------
The following financial information for 1994 and prior
periods has been derived from the Fund's financial
statements, which have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in
their report appearing in the Annual Report to Share-
holders, and should be read in conjunction with the fi-
nancial statements and related notes appearing in the
Annual Report. A copy of the Annual Report to Sharehold-
ers which contains additional unaudited performance in-
formation can be obtained without charge by writing to
the Fund. All Fund shares outstanding as of June 13,
1995, have been designated as Class R Shares. Informa-
tion is presented only for Class R Shares since no Class
A Shares or Class C Shares were outstanding during the
periods shown below.
Selected data for a Class R Share outstanding throughout
each period is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
FEBRUARY 28 5 MOS. YEAR ENDED SEPTEMBER 30
---------------------- ENDED -------------------------------------------------------
1995* 1994 1993 2/29/92 1991 1990 1989 1988 1987 1986 1985
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $9.280 $9.450 $9.080 $9.040 $8.650 $8.730 $8.520 $8.020 $8.780 $7.830 $7.180
Income from Investment
Operations:
Net Investment Income.. .515 .519 .555 .239 .579 .596 .597 .596 .598 .595 .586
Net Realized and
Unrealized Gain (Loss)
from Investments....... (.209) (.075) .414 .080 .438 (.080) .239 .536 (.614) 1.162 .650
Less Distributions:
Dividends from Net In-
vestment Income........ (.511) (.516) (.544) (.239) (.589) (.596) (.597) (.596) (.598) (.595) (.586)
Distributions from Cap-
ital Gains............. (.075) (.098) (.055) (.040) (.038) -- (.029) (.036) (.146) (.212) --
---------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period........... $9.000 $9.280 $9.450 $9.080 $9.040 $8.650 $8.730 $8.520 $8.020 $8.780 $7.830
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Total Return on Net As-
set Value............... 3.60% 4.79% 11.04% 3.56% 12.15% 6.04% 10.07% 14.50% (.39%) 23.02% 17.73%
---------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Da-
ta:
Net Assets End of Pe-
riod (in millions)..... $2,741 $2,700 $2,372 $1,836 $1,661 $1,324 $1,120 $945 $764 $668 $460
Ratio of Expenses to
Average Net Assets..... .59% .62% .61% .62%+ .60% .62% .64% .65% .68% .71% .73%
Ratio of Net Investment
Income to Average Net
Assets................. 5.79% 5.49% 5.95% 6.24%+ 6.48% 6.78% 6.85% 7.11% 6.85% 6.95% 7.68%
Portfolio Turnover
Rate................... 17% 15% 14% 6% 10% 8% 12% 8% 16% 39% 28%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
*Unaudited.
+Annualized.
8
<PAGE>
WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
------------------------------------------------------------------------------
The following organizations work together to provide
the services and features offered by the Fund:
<TABLE>
<CAPTION>
ORGANIZATION FUNCTION DUTIES
--------------------------------------------------------
<S> <C> <C>
John Nuveen & Co. Incor- Fund Sponsor and Sponsors and
porated ("Nuveen") Principal Underwriter manages the
offering of
Fund shares;
provides
certain
administrative
services
Nuveen Advisory Corp. Investment Adviser Manages the
("Nuveen Advisory") Fund's
investment
portfolios and
provides day-
to-day
administrative
services to the
Fund
Shareholder Services, Transfer Agent; Maintains
Inc. ("SSI") Shareholder Services shareholder
Agent; Dividend accounts,
Paying Agent handles share
redemptions and
exchanges and
dividend
payments
United States Trust Custodian Maintains
Company of New York ("US custody of the
Trust") Fund's
investments and
provides
certain
accounting
services to the
Fund
</TABLE>
The Chase Manhattan Bank, N.A., has agreed to become
successor to US Trust, as Custodian and Fund Accoun-
tant. The succession is presently scheduled for July 1,
1995. No changes in the Fund's administration or in the
amount of fees and expenses paid by the Fund for these
services will result, and no action by shareholders
will be required.
WHAT ARE THE FUND'S INVESTMENT OBJECTIVE AND POLICIES?
INVESTMENT The investment objective of the Fund is to provide you
OBJECTIVE with as high a level of current interest income exempt
from regular federal income tax as is consistent, in the
view of the Fund's management, with preservation of capi-
tal. This investment objective is a fundamental policy of
the Fund and may not be changed without the approval of
the holders of a majority of the shares of the Fund. There
can be no assurance that the investment objective of the
Fund will be achieved.
The Fund is
designed to
provide income
free from federal
personal income
tax.
9
<PAGE>
HOW THE FUND
PURSUES ITS Value Investing. Nuveen Advisory believes that in any mar-
OBJECTIVE ket environment there are quality Municipal Obligations
whose current price, yield, credit quality and future
prospects make them seem underpriced or exceptionally at-
tractive when compared with other Municipal Obligations in
the market. In selecting investments for the Fund, Nuveen
Advisory will attempt to identify and purchase those in-
vestment grade quality, undervalued or underrated Munici-
pal Obligations that offer the best values among Municipal
Obligations of similar credit quality. By selecting these
Municipal Obligations, the Fund will seek to provide at-
tractive current tax-free income and to protect the Fund's
net asset value in both rising and declining markets. In
this way, regardless of the direction the market may move,
value investing, if successful, will better position the
Fund to achieve its investment objective of as high a
level of current interest income exempt from regular fed-
eral income tax as is consistent, in the view of the
Fund's management, with preservation of capital. Any net
capital appreciation realized by the Fund will generally
result in the distribution of taxable capital gains to
Fund shareholders. See "Distributions and Taxes."
The Fund seeks
Municipal Obligations
considered to be
undervalued.
The Importance of Thorough Research. Successful value in-
Thorough research vesting depends on identifying and purchasing undervalued
can help identify or underrated securities before the rest of the market-
values. place finds them. Nuveen Advisory believes the municipal
market provides these opportunities, in part because of
the relatively large number of issuers of tax-exempt secu-
rities and the relatively small number of full-time, pro-
fessional municipal market analysts. For example, there
are currently about 7,500 common stocks that are followed
by about 23,000 analysts. By contrast, there are about
60,000 entities that issue tax-exempt securities and less
than 1,000 professional municipal market analysts.
Nuveen and Nuveen Advisory believe that together they em-
ploy the largest number of research analysts in the in-
vestment banking industry devoted exclusively to the re-
view and surveillance of tax-exempt securities. Their team
of more than 40 individuals has over 350 years of combined
municipal market experience. Nuveen and Nuveen Advisory
have access to information on approximately 60,000 munici-
pal issuers, and review annually more than $100 billion of
tax-exempt securities sold in new issue and secondary mar-
kets.
Which Municipal Obligations Are Selected As
Investments? The Fund will invest primarily in Municipal
Obligations issued within the 50 states and certain U.S.
possessions or territories so that the interest income on
the Municipal Obligations will be exempt from regular fed-
eral income tax, although this income may be subject to
applicable state personal income taxes.
10
<PAGE>
The Fund will
seek to purchase The Fund's investment assets will consist of:
investment grade
quality Municipal
Obligations.
. Municipal Obligations rated investment grade at the
time of purchase (Baa or BBB or better by Moody's In-
vestors Service, Inc. ("Moody's") or Standard and
Poor's Corporation ("S&P"));
. unrated Municipal Obligations of investment grade
quality in the opinion of Nuveen Advisory, limited to
no more than 10% of the Fund's net assets; and
. temporary investments within the limitations and for
the purposes described below.
Municipal Obligations rated Baa are considered by Moody's
to be medium grade obligations which lack outstanding in-
vestment characteristics and in fact have speculative
characteristics as well, while Municipal Obligations rated
BBB are regarded by S&P as having an adequate capacity to
pay principal and interest. Although the Fund to date has
not done so and has no present intention of doing so, the
Fund may invest up to 20% of its net assets in Municipal
Obligations that pay interest subject to the federal al-
ternative minimum tax ("AMT Bonds"). The Fund intends to
emphasize investments in Municipal Obligations with long-
term maturities in order to maintain an average portfolio
maturity of 20-30 years, but the average maturity may be
shortened from time to time depending on market conditions
in order to help limit the Fund's exposure to market risk.
As a result, the Fund's portfolio at any given time may
include both long-term and intermediate-term Municipal Ob-
ligations.
Under ordinary circumstances, the Fund will invest sub-
stantially all
(at least 80%) of its net assets in Municipal Obligations,
and not more than 20% of its net assets in "temporary in-
vestments," described below, provided that temporary in-
vestments subject to regular federal income tax and AMT
Bonds may not comprise more than 20% of the Fund's net as-
sets. For defensive purposes, however, in order to limit
the exposure of its portfolio to market risk from tempo-
rary imbalances of supply and demand or other temporary
circumstances affecting the municipal market, the Fund may
invest without limit in temporary investments. The Fund
will not be in a position to achieve its investment objec-
tive of tax-exempt income to the extent it invests in tax-
able temporary investments.
The foregoing investment policies are fundamental policies
of the Fund and may not be changed without the approval of
the holders of a majority of the shares of the Fund.
11
<PAGE>
DESCRIPTION OF Municipal Obligations. Municipal Obligations, as the term
THE FUND'S is used in this prospectus, are federally tax-exempt debt
INVESTMENTS obligations issued by states, cities and local authorities
and by certain U.S. possessions or terri-
Municipal Obligations
are issued by
states, cities
and local
authorities to
support a variety
of public
activities.
tories to obtain funds for various public purposes, such
as the construction of public facilities, the payment of
general operating expenses and the refunding of outstand-
ing debts. They may also be issued to obtain funding for
various private activities, including loans to finance the
construction of housing, educational and medical facili-
ties or privately owned industrial development and pollu-
tion control projects.
The two principal classifications of Municipal Obligations
are general obligation and revenue bonds. GENERAL OBLIGA-
TION bonds are secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of princi-
pal and interest. REVENUE bonds are payable only from the
revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a spe-
cial excise or other specific revenue source. Industrial
development and pollution control bonds are in most cases
revenue bonds and do not generally constitute the pledge
of the credit
or taxing power of the issuer of these bonds.
Municipal Obligations may also include participations in
lease obligations or installment purchase contract obliga-
tions (collectively, "lease obligations") of municipal au-
thorities or entities. Certain "non-appropriation" lease
obligations may present special risks because the
municipality's obligation to make future lease or install-
ment payments depends on money being appropriated each
year for this purpose. The Fund will seek to minimize
these risks by not investing more than 10% of its assets
in non-appropriation lease obligations, and by only in-
vesting in those non-
appropriation lease obligations that meet certain criteria
of the Fund. See the Statement of Additional Information
for further information about lease obligations.
The yields on Municipal Obligations depend on a variety of
factors, including the condition of financial markets in
general and the municipal market in particular, as well as
the size of a particular offering, the maturity of the ob-
ligation and the rating of the issue. Certain Municipal
Obligations may pay variable or floating rates of interest
based upon certain market rates or indexes such as a bank
prime rate or a tax-exempt money market index. The ratings
of Moody's and S&P represent their opinions as to the
quality of the Municipal Obligations that they undertake
to rate. It should be emphasized, however, that ratings
are general and are not absolute standards of quality.
Consequently, Municipal Obligations with the same maturi-
ty, coupon and rating may have different yields, while
those having the same maturity and coupon with different
ratings may have the
12
<PAGE>
same yield. The market value of Municipal Obligations will
vary with changes in prevailing interest rate levels and
as a result of changing evaluations of the ability of
their issuers to meet interest and principal payments.
Similarly, the market value and net asset value of shares
of the Fund will change in response to interest rate
changes; they will tend to decrease when interest rates
rise and increase when interest rates fall.
All temporary Temporary Investments. As described above, the Fund under
investments will ordinary circumstances may invest up to 20% of its net
be U.S. assets in "temporary investments," but may invest without
Government or limit in temporary investments during temporary defensive
high quality periods. The Fund will seek to make temporary investments
securities. in short-term securities the interest on which is exempt
from regular federal income tax, but may be subject to
state income tax. If suitable tax-exempt temporary
investments are not available at reasonable prices and
yields, the Fund may make temporary investments in taxable
securities. The Fund will invest only in those taxable
temporary investments that are either U.S. Government
securities or are rated within the highest grade by
Moody's or S&P, and mature within one year from the date
of purchase or carry a variable or floating rate of
interest. See the Statement of Additional Information for
further information about the temporary investments in
which the Fund may invest.
CERTAIN Portfolio Trading and Turnover. The Fund will make changes
INVESTMENT in its investment portfolio from time to time in order to
STRATEGIES AND take advantage of opportunities in the municipal market
LIMITATIONS and to limit exposure to market risk. The Fund may engage
to a limited extent in short-term trading consistent with
its investment objective, but will not trade securities
solely to realize a profit. Changes in the Fund's invest-
ments are known as "portfolio turnover." While the Fund's
annual portfolio turnover rate is not expected to exceed
35%, actual portfolio turnover rates are impossible to
predict, and may exceed 35% in particular years depending
upon market conditions.
The Fund will
focus on long-
term
investment strategies,
and will engage
in short-term
trading only when
consistent with
its stated
investment
objective.
When-issued or Delayed Delivery Transactions. The Fund may
purchase and sell Municipal Obligations on a when-issued
or delayed delivery basis, which calls for the Fund to
make payment or take delivery at a future date, normally
15-45 days after the trade date. The commitment to pur-
chase securities on a when-issued or delayed delivery ba-
sis may involve an element of risk because the value of
the securities is subject to market fluctuation, no inter-
est accrues to the purchaser prior to settlement of the
transaction, and at the time of delivery the market value
may be less than cost. A Fund commonly engages in when-is-
sued transactions in order to purchase or sell newly-is-
sued Municipal Obligations, and may
13
<PAGE>
engage in delayed delivery transactions in order to manage
its operations more effectively. See the Statement of Ad-
ditional Information for further information about when-
issued and delayed delivery transactions.
The Fund will
take steps to Other Investment Policies and Restrictions. The Fund has
ensure that its adopted certain fundamental policies intended to limit the
assets are not risk of its investment portfolio. In accordance with these
concentrated in policies, the Fund may not:
just a few
holdings. . invest more than 5% of its total assets in securities of
any one issuer, except that this limitation shall not ap-
ply to securities of the U.S. government, its agencies
and instrumentalities;
. invest more than 5% of its total assets in securities of
unseasoned issuers which, together with their predeces-
sors, have been in operation for less than three years;
. invest more than 10% of its total assets in securities
that the Fund is restricted from selling to the public
without registration under the Securities Act of 1933;
. hold securities of a single bank, including securities
backed by a letter of credit of that bank, if these hold-
ings would exceed 10% of the total assets of the Fund.
In applying these policies, the "issuer" of a security is
deemed to be the entity whose assets and revenues are com-
mitted to the payment of principal and interest on that
security, provided that the guarantee of an instrument
will generally be considered a separate security.
See the Statement of Additional Information for a more
complete description of the fundamental investment poli-
cies summarized above and the Fund's other fundamental in-
vestment policies. The Fund's fundamental investment poli-
cies may not be changed without the approval of the Fund's
shareholders.
FLEXIBLE SALES CHARGE PROGRAM
For many investors, working with a professional financial
The Fund offers adviser is an important part of their financial strategy.
various sales Because Nuveen recognizes the value a financial adviser
charge options can provide in developing and implementing a comprehensive
designed to meet plan for your financial future, Nuveen Mutual Funds are
your individual sold with a sales charge, either at the time of purchase
investment needs or at the time of redemption (in the case of Class C
and preferences. Shares redeemed within 12 months of purchase), or over
time in the form of a distribution fee. This provides your
financial adviser with compensation for the professional
advice and service you receive in financial planning and
investment selection. [/R]
14
<PAGE>
The Fund has adopted a Flexible Sales Charge Program which
provides you with alternative ways of purchasing Fund
shares based upon your individual investment needs and
preferences. You may purchase Class A Shares at a price
equal to their net asset value plus an up-front sales
charge. You may purchase Class C Shares without any up-
front sales charge at a price equal to their net asset
value, but subject to an annual distribution fee designed
to compensate Authorized Dealers over time for the sale of
Fund shares and a 1% CDSC if Class C Shares are redeemed
within 12 months of purchase. See "How to Buy Fund
Shares--Class C Shares" and "How to Redeem Fund Shares."
Class C Shares automatically convert to Class A Shares six
years after purchase. Both Class A Shares and Class C
Shares are subject to annual service fees, which are used
to compensate Authorized Dealers for providing you with
ongoing financial advice and other services. See "Distri-
bution and Service Plan" below. Under the Flexible Sales
Charge Program, all Fund shares outstanding as of June 13,
1995, have been designated as Class R Shares. Class R
Shares are available for purchase at a price equal to
their net asset value only under certain limited circum-
stances, or by specified investors, as described herein.
The price at which the purchase of Fund shares is effected
is based on the next calculation of the Fund's net asset
value after the order is placed.
Which Option is When you purchase Class A Shares, you will pay an up-front
Right For You? sales charge. As a result, you will have less money in-
vested initially and you will own fewer Class A Shares
than you would in the absence of an up-front sales charge.
Alternatively, when you purchase Class C Shares, you will
not pay an up-front sales charge and all of your monies
will be fully invested at the time of purchase. However,
Class C Shares are subject to an annual distribution fee
to compensate Authorized Dealers over time for the sale of
Fund shares and a CDSC of 1% if redeemed within 12 months
of purchase. Class C Shares automatically convert to Class
A Shares six years after purchase. This automatic conver-
sion is designed to ensure that holders of Class C Shares
would pay over the six-year period a distribution fee that
is approximately the economic equivalent of the one-time,
up-front sales charge paid by holders of Class A Shares on
purchases of up to $50,000. Class A Shares and Class C
Shares are subject to annual service fees which are iden-
tical in amount and which are used to compensate Autho-
rized Dealers for providing you with ongoing financial ad-
vice and other services. You may qualify for a reduced
sales charge or a sales charge waiver on a purchase of
Class A Shares, as described below under "How the Sales
Charge on Class A Shares May Be Reduced or Waived." Under
certain limited circumstances, Class R Shares are avail-
able for purchase at a price equal to their net asset val-
ue.
15
<PAGE>
In deciding whether to purchase Class A Shares, Class C
Shares or Class R Shares, you should consider all relevant
factors, including the dollar amount of your purchase, the
length of time you expect to hold the shares and whether a
CDSC would apply, the amount of any applicable up-front
sales charge, the amount of any applicable distribution or
service fee that may be incurred while you own the shares,
and whether or not you will be reinvesting income or capi-
tal gain distributions in additional shares. For assis-
tance with this decision, please refer to the tables under
"Summary of Fund Expenses" on page 3 of this Prospectus
which sets forth examples of the expenses applicable to
each class of shares, or consult your financial adviser.
Differences Each class of shares represents an interest in the same
Between the portfolio of investments. Each class of shares is identi-
Classes of Shares cal in all respects except that each class bears its own
class expenses, including administration and distribution
expenses, and each class has exclusive voting rights with
respect to any distribution or service plan applicable to
its shares. In addition, the Class C Shares are subject to
a conversion feature and a CDSC of 1% if redeemed within
12 months of purchase, as described below. 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 classes
of shares.
Dealer Incentives Upon notice to all Authorized Dealers, Nuveen may reallow
to Authorized Dealers electing to participate up to the
full applicable sales charge during periods and for trans-
actions specified in the notice. The reallowances made
during these periods may be based upon attainment of mini-
mum sales levels. Further, 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 the Funds or other Nuveen Mutual Funds and
Nuveen Unit Investment Trusts ("UITs") during specified
time periods. The staff of the Securities and Exchange
Commission takes the position that dealers who receive 90%
or more of the applicable sales charge may be deemed un-
derwriters under the Securities Act of 1933, as amended.
Nuveen may also from time to time provide additional pro-
motional support to certain Authorized Dealers who sell or
are expected to sell certain minimum amounts of Nuveen Mu-
tual Funds and Nuveen UITs during specified time periods.
Such promotional support may include providing sales lit-
erature to and holding informational or educational pro-
grams for the benefit of such Authorized Dealers' repre-
sentatives, seminars for the public, and advertising and
sales campaigns. Any such support would be provided by
Nuveen out of its own assets, and not out of the assets of
the
16
<PAGE>
Funds, and will not change the price an investor pays for
shares or the amount that a Fund will receive from such a
sale.
HOW TO BUY FUND SHARES
CLASS A SHARES You may purchase Class A Shares at a public offering price
equal to the applicable net asset value per share plus an
up-front sales charge imposed at the time of purchase as
set forth below. You may qualify for a reduced sales
charge, or the sales charge may be waived in its entirety,
as described below under "How the Sales Charge on Class A
Shares May Be Reduced or Waived." Class A Shares are also
subject to an annual service fee to compensate Authorized
Dealers for providing you with ongoing financial advice
and other services. See "Distribution and Service Plan."
Class A Shares
are offered at
their net asset
value plus an up-
front sales
charge.
The sales charges for Class A Shares are as follows:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE REALLOWANCE
AS % OF PUBLIC AS % OF NET AS % OF PUBLIC
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
$50,000 but less than $100,000 4.25% 4.44% 3.75%
$100,000 but less than $250,000 3.50% 3.63% 3.25%
$250,000 but less than $500,000 2.75% 2.83% 2.50%
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 but less than $2,500,000 1.00% 1.01% 1.00%
$2,500,000 but less than $5,000,000 0.75% 0.76% 0.75%
$5,000,000 and over 0.50% 0.50% 0.50%
</TABLE>
The Fund receives the entire net asset value of all Class
A Shares that are sold. Nuveen retains the full applicable
sales charge from which it pays the uniform reallowances
shown above to Authorized Dealers. See "Flexible Sales
Charge Program--Dealer Incentives" above for more informa-
tion about reallowances and other compensation to Autho-
rized Dealers.
Certain commercial banks may make Class A Shares of the Fund
available to their customers on an agency basis. Pur-suant
to the agreements between Nuveen and these banks, some or
all of the sales charge paid by a bank customer in
connection with a pur-chase of Class A Shares may be
retained by or paid to the bank. Certain banks and other
financial institutions may be required to register as
securities dealers in certain states.
17
<PAGE>
HOW THE SALES Summary. There are several ways to reduce or eliminate the
CHARGE ON CLASS A sales charge:
SHARES MAY BE
REDUCED OR WAIVED
.cumulative discount;
.letter of intent;
There are several .group purchase programs; and
ways to reduce or
eliminate the
sales charge.
.special sales charge waivers for certain categories of
investors.
Cumulative Discount. You may qualify for a reduced sales
charge as shown above on a purchase of Class A Shares if
the amount of your purchase, when added to the value that
day of all of your prior purchases of shares of the Fund
or of another Nuveen Mutual Fund, or units of a Nuveen
UIT, on which an up-front sales charge or ongoing distri-
bution fee is imposed, falls within the amounts stated in
the table. You or your financial adviser must notify
Nuveen or SSI of any cumulative discount whenever you plan
to purchase Class A Shares of the Fund that you wish to
qualify for a reduced sales charge.
Letter of Intent. You may qualify for a reduced sales
charge on a purchase of Class A Shares if you plan to pur-
chase Class A Shares of Nuveen Mutual Funds over the next
13 months and the total amount of your purchases would, if
purchased at one time, qualify you for one of the reduced
sales charges shown above. In order to take advantage of
this option, you must complete the applicable section of
the Application Form or sign and deliver either to an Au-
thorized Dealer or to SSI a written Letter of Intent in a
form acceptable to Nuveen. A Letter of Intent states that
you intend, but are not obligated, over the next 13 months
to purchase a stated total amount of Class A Shares that
would qualify you for a reduced sales charge shown above.
You may count shares of a Nuveen Mutual Fund that you al-
ready own on which you paid an up-front sales charge or an
ongoing distribution fee and any Class C Shares of a
Nuveen Mutual Fund that you purchase over the next 13
months towards completion of your investment program, but
you will receive a reduced sales charge only on new Class
A Shares you purchase with a sales charge over the 13
months. You cannot count towards completion of your in-
vestment program Class A Shares that you purchase without
a sales charge through investment of distributions from a
Nuveen Mutual Fund or a Nuveen UIT, or otherwise.
By establishing a Letter of Intent, you agree that your
first purchase of Class A Shares following execution of
the Letter of Intent will be at least 5% of the total
amount of your intended purchases. You further agree that
shares representing 5% of the total amount of your in-
tended purchases will be held in escrow pending completion
of these purchases. All dividends and capital gains dis-
tributions on Class A Shares held in escrow
18
<PAGE>
will be credited to your account. If total purchases, less
redemptions, prior to the expiration of the 13 month pe-
riod equal or exceed the amount specified in your Letter
of Intent, the Class A Shares held in escrow will be
transferred to your account. If the total purchases, less
redemptions, exceed the amount specified in your Letter of
Intent and thereby qualify for a lower sales charge than
the sales charge specified in your Letter of
Intent, you will receive this lower sales charge retroac-
tively, and the difference between it and the higher sales
charge paid will be used to purchase additional Class A
Shares on your behalf. If the total purchases, less re-
demptions, are less than the amount specified, you must
pay Nuveen an amount equal to the difference between the
amounts paid for these purchases and the amounts which
would have been paid if the higher sales charge had been
applied. If you do not pay the additional amount within 20
days after written request by Nuveen or your financial ad-
viser, Nuveen will redeem an appropriate number of your
escrowed Class A Shares to meet the required payment. By
establishing a Letter of Intent, you irrevocably appoint
Nuveen as attorney to give instructions to redeem any or
all of your escrowed shares, with full power of substitu-
tion in the premises.
You or your financial adviser must notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish
to be covered under the Letter of Intent option.
Group Purchase Programs. If you are a member of a quali-
fied group, you may purchase Class A Shares of the Fund or
of another Nuveen Mutual Fund at the reduced sales charge
applicable to the group's purchases taken as a whole. A
"qualified group" is one which has been in existence for
more than six months, has a purpose other than investment,
has five or more participating members, has agreed to in-
clude Fund sales publications in mailings to members and
has agreed to comply with certain administrative require-
ments relating to its group purchases.
Under any group purchase program, the minimum monthly in-
vestment in Class A Shares of any particular Fund or port-
folio by each participant is $25, and the minimum monthly
investment in Class A Shares of any particular Fund or
portfolio for all participants in the program combined is
$1,000. No certificates will be issued for any partici-
pant's account. All dividends and other distributions by
the Fund will be reinvested in additional Class A Shares
of the Fund. No participant may utilize a systematic with-
drawal program.
To establish a group purchase program, both the group it-
self and each participant must fill out special applica-
tion materials, which the group administrator may obtain
from the group's financial adviser, by checking the
19
<PAGE>
applicable box on the enclosed Application Form or by
calling Nuveen toll-free at 800-621-7227. See the State-
ment of Additional Information for more complete informa-
tion about "qualified groups" and group purchase programs.
Special Sales Charge Waivers. Class A Shares of the Fund
may be purchased at net asset value without a sales charge
and in any amount by the following categories of invest-
ors:
. officers, directors and retired directors of the Fund;
. bona fide, full-time and retired employees of Nuveen,
any parent company of Nuveen, and subsidiaries thereof,
or their immediate family members (as defined below);
. any person who, for at least 90 days, has been an offi-
cer, director or bona fide employee of any Authorized
Dealer, or their immediate family members;
. officers and directors of bank holding companies that
make Fund shares available directly or through subsidi-
aries or bank affiliates;
. bank or broker-affiliated trust departments investing
funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary,
agency, advisory, custodial or similar capacity; and
. registered investment advisers, certified financial
planners and registered broker-dealers who in each case
either charge periodic fees to their customers for fi-
nancial planning, investment advisory or asset manage-
ment services, or provide such services in connection
with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed.
Any Class A Shares purchased pursuant to a special sales
charge waiver must be acquired for investment purposes and
on the condition that they will not be transferred or re-
sold except through redemption by the Fund. You or your
financial adviser must notify Nuveen or SSI whenever you
make a purchase of Class A Shares that you wish to be cov-
ered under these special sales charge waivers. The above
categories of investors are also eligible to purchase
Class R Shares, as described below under "Class R Shares."
You may also purchase Class A Shares at net asset value
without a sales charge if the purchase takes place through
a broker-dealer and represents the reinvestment of the
proceeds of the redemption of shares of one or more regis-
tered investment companies not affiliated with Nuveen. You
must provide appropriate documentation that the redemption
occurred not more than 60 days prior to the reinvestment
of the proceeds in Class A Shares, and that you either
paid an up-front sales charge or were sub
20
<PAGE>
ject to a contingent deferred sales charge in respect of
the redemption of such shares of such other investment
company. Finally, Class A Shares may be issued at net as-
set value without a sales charge in connection with the
acquisition by the Fund of another investment company. All
purchases under the special sales charge waivers will be
subject to minimum purchase requirements as established by
the Fund.
--------------------------------
In determining the amount of your purchases of Class A
Shares that may qualify for a reduced sales charge, the
following purchases may be combined: (1) all purchases by
a trustee or other fiduciary for a single trust estate or
fiduciary account; (2) all purchases by individuals and
their immediate family members (i.e., their spouses and
their children under 21 years of age); or (3) all pur-
chases made through a group purchase program as described
above.
The reduced sales charge programs may be modified or dis-
continued by the Fund at any time upon prior written no-
tice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES
OR REDUCED SALES CHARGE PROGRAMS, OR TO OBTAIN THE RE-
QUIRED APPLICATION FORMS, CALL NUVEEN TOLL-FREE AT 800-
621-7227.
CLASS C SHARES You may purchase Class C Shares at a public offering price
equal to the applicable net asset value per share without
any up-front sales charge. Class C Shares are subject to
an annual distribution fee to compensate Authorized Deal-
ers over time for the sale of Fund shares. See "Flexible
Sales Charge Program--Dealer Incentives" above for more
information about compensation to Authorized Dealers.
Class C Shares are also subject to an annual service fee
to compensate Authorized Dealers for providing you with
ongoing financial advice and other services. See "Distri-
bution and Service Plan."
Class C Shares
may be purchased
at their net
asset value, and
are subject to an
annual
distribution fee.
An investor purchasing Class C Shares agrees to pay a CDSC
of 1% to Nuveen if Class C Shares are redeemed within 12
months of purchase. The Fund will redeem shares at net as-
set value and pay the CDSC to Nuveen on the shareholder's
behalf from the proceeds of the redemption.
The CDSC will be based on 1% of the lower of (i) the net
asset value of Class C Shares at the time of purchase or
(ii) the net asset value of Class C Shares at the time of
redemption will be charged for Class C Shares redeemed
within 12 months of purchase. No CDSC will be charged on
Class C Shares purchased as a result of automatic rein-
vestment of divi
21
<PAGE>
dends or capital gains paid, or on exchanges for Class C
Shares of another Nuveen Mutual Fund or money market fund.
The CDSC will be calculated as if Class C Shares not sub-
ject to a CDSC are redeemed first, except if another order
of redemption would result in a lower fee.
Class C Shares will automatically convert to Class A
Shares six years after purchase. All conversions will be
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 C Shares acquired through rein-
vestment of distributions will convert into Class A Shares
based on the date of the initial purchase to which such
shares relate. For this purpose, Class C Shares acquired
through reinvestment of distributions will be attributed
to particular purchases of Class C Shares in accordance
with such procedures as the Board of Trustees may deter-
mine from time to time. The automatic conversion of Class
C Shares to Class A Shares six years after purchase was
designed to ensure that holders of Class C Shares would
pay over the six-year period a distribution fee that is
approximately the economic equivalent of the one-time, up-
front sales charge paid by holders of Class A Shares on
purchases of up to $50,000. Class C Shares that are con-
verted to Class A Shares will no longer be subject to an
annual distribution fee, but they will remain subject to
an annual service fee that is identical in amount for both
Class C Shares and Class A Shares. Since net asset value
per share of the Class C Shares and the Class A Shares may
differ at the time of conversion, a shareholder may re-
ceive more or fewer Class A Shares than the number of
Class C Shares converted. Any conversion of Class C Shares
into Class A Shares will be 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 tax-
able event under federal income tax law. Conversion of
Class C Shares into Class A Shares might be suspended if
such an opinion or ruling were no longer available.
CLASS R SHARES If you owned Fund shares as of June 13, 1995, those shares
have been designated as Class R Shares. Purchases of addi-
tional Class R Shares, which will not be subject to any
sales charge or any distribution or service fee, will be
limited to the following circumstances. You may purchase
Class R Shares with monies representing distributions from
Nuveen-sponsored UITs if, prior to June 13, 1995, you had
purchased such UITs and elected to reinvest distributions
from such UITs in shares of the Fund. You may also pur-
chase Class R Shares with monies representing dividends
and capital gain distributions on Class R Shares of the
Fund. Final
Class R Shares
are offered at
their net asset
value.
22
<PAGE>
ly, you may purchase Class R Shares if you are within the
following specified categories of investors who are also
eligible to purchase Class A Shares at net asset value
without an up-front sales charge:
. officers, directors and retired directors of the Fund;
. 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 offi-
cer, director or bona fide employee of any Authorized
Dealer, or their immediate family members;
. officers and directors of bank holding companies that
make Fund shares available directly or through subsidi-
aries or bank affiliates;
. bank or broker-affiliated trust departments investing
funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary,
agency, custodial or similar capacity; and
. registered investment advisers, certified financial
planners and registered broker-dealers who in each case
either charge periodic fees for financial planning, in-
vestment advisory or asset management services, or pro-
vide such services in connection with the establishment
of an investment account for which a comprehensive "wrap
fee" charge is imposed.
Investors who are eligible to purchase either Class R
Shares or Class A Shares without a sales charge at net as-
set value should be aware of the differences between these
two classes of shares. Class A Shares are subject to an
annual service fee to compensate Authorized Dealers for
providing you with ongoing financial advice and other
services. Class R Shares are not subject to a service fee
and consequently holders of Class R Shares may not receive
the same types or levels of services from Authorized Deal-
ers. In choosing between Class A Shares and Class R
Shares, you should weigh the benefits of the services to
be provided by Authorized Dealers against the annual serv-
ice fee imposed upon the Class A Shares.
INITIAL AND You may buy Fund shares through Authorized Dealers or by
SUBSEQUENT directing your financial adviser to call Nuveen toll-free
PURCHASES OF at 800-843-6765. You may pay for your purchase by Federal
SHARES Reserve draft or by check made payable to "Nuveen Munici-
pal Bond Fund, Class [A], [C], [R]," delivered to the fi-
nancial adviser through whom the investment is to be made
for forwarding to the Fund's shareholder services agent,
SSI. When making your initial investment, you must also
furnish the information necessary to establish your Fund
account by completing and enclosing with your payment the
attached Application Form. After your initial investment,
you may
The Fund offers a
number of
convenient ways
to purchase
shares.
23
<PAGE>
make subsequent purchases at any time by forwarding to SSI
a check in the amount of your purchase made payable to
"Nuveen Municipal Bond Fund, Class [A], [C], [R]," and in-
dicating on the check your account number. All payments
must be in U.S. dollars and should be sent directly to SSI
at its address listed on the back cover of this Prospec-
tus. A check drawn on a foreign bank or payable other than
to the order of the Fund generally will not be acceptable.
You may also wire Federal Funds directly to SSI, but you
may be charged a fee for this. For instructions on how to
make Fund purchases by wire transfer, call Nuveen toll-
free at 800-621-7227. Authorized Dealers and other persons
distributing the Fund's shares may receive different com-
pensation for selling different classes of shares.
MINIMUM Generally, your first purchase of any class of the Fund's
INVESTMENT shares must be for $1,000 or more. Additional purchases
REQUIREMENTS may be in amounts of $100 or more. These minimums may be
changed at any time by the Fund. There are exceptions to
these minimums for shareholders who qualify under one or
more of the Fund's automatic deposit, group purchase or
reinvestment programs.
SYSTEMATIC The Fund offers you several opportunities to capture the
INVESTMENT benefits of "dollar cost averaging" through systematic in-
PROGRAMS vestment programs. In a regularly followed dollar cost av-
eraging program, you would purchase more shares when Fund
share prices are lower and fewer shares when Fund share
prices are higher, so that the average price paid for Fund
shares is less than the average price of the Fund shares
over the same time period. The chart below shows the cumu-
lative effect that compound interest can have on a system-
atic investment program.
24
<PAGE>
The Power of a
Systematic
Investment
Program.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
YEAR 6% 5% 4% 0%
<S> <C> <C> <C> <C>
0 1,000 1,000 1,000 1,000
1 2,184 2,170 2,156 2,100
2 3,553 3,509 3,466 3,300
3 5,005 4,916 4,829 4,500
4 6,548 6,396 6,248 5,700
5 8,185 7,951 7,725 6,900
6 9,923 9,586 9,262 8,100
7 11,769 11,304 10,862 9,300
8 13,728 13,110 12,526 10,500
9 15,809 15,009 14,259 11,700
10 18,017 17,004 16,062 12,900
11 20,362 19,102 17,939 14,100
12 22,852 21,307 19,892 15,300
13 25,494 23,625 21,925 16,500
14 28,300 26,062 24,040 17,700
15 31,280 28,623 26,242 18,900
</TABLE>
SOURCE: NUVEEN MARKETING RESEARCH DEPARTMENT
In the above example, it is assumed that $100 is added to
an investment account every month for 15 years. From the
same $1,000 beginning, the chart shows the amount that
would be in the account after 15 years, assuming no inter-
est and interest compounded annually at the rates of 4%,
5% and 6%.
25
<PAGE>
This chart is designed to illustrate the effects of com-
pound interest, and is not intended to predict the results
of an actual investment in the Fund.
There are several important differences between the Fund
and the hypothetical investment program shown. This exam-
ple assumes no gain or loss in the net asset value of the
investment over the entire 15-year period, whereas the net
asset value of the Fund will rise and fall due to market
conditions or other factors, which could have a signifi-
cant impact on the total value of your investment. Simi-
larly, this example shows four steady interest rates over
the entire 15-year period, whereas the dividend rate of
the Fund can be expected to fluctuate over time. The Fund
may provide additional information to investors and advis-
ers illustrating the benefits of systematic investment
programs and dollar cost averaging.
The Fund offers The Fund offers two different types of systematic invest-
automatic deposit ment programs:
and payroll
deposit plans.
Automatic Deposit Plan. Once you have established a Class
A Share account or Class C Share account, or if you are
eligible to purchase additional Class R Shares, in the
Fund, you may make regular investments in an amount of $25
or more each month by authorizing SSI to draw preautho-
rized checks on your bank account. There is no obligation
to continue payments and you may terminate your participa-
tion at any time at your discretion. No charge in addition
to the applicable sales charge is made in connection with
this Plan, and there is no cost to the Fund. To obtain an
application form for the Automatic Deposit Plan, check the
applicable box on the enclosed Application Form or call
Nuveen toll-free at 800-621-7227.
Payroll Direct Deposit Plan. Once you have established a
Class A Share or Class C Share account in the Fund, you
may, with your employer's consent, make regular invest-
ments in Fund shares of $25 or more per pay period by au-
thorizing your employer to deduct this amount automati-
cally from your paycheck. There is no obligation to con-
tinue payments and you may terminate your participation at
any time at your discretion. No charge in addition to the
applicable sales charge is made for this Plan, and there
is no cost to the Fund. To obtain an application form for
the Payroll Direct Deposit Plan, check the applicable box
on the enclosed Application Form or call Nuveen toll-free
at 800-621-7227.
OTHER SHAREHOLDER Exchange Privilege. You may exchange shares of a class of
PROGRAMS the Fund for shares of the same class of any other Nuveen
Mutual Fund with reciprocal exchange privileges, by send-
ing a written request to the Fund, c/o Shareholder Servic-
es, Inc., P.O. Box 5330, Denver, CO 80217-5330. The shares
to be purchased must be offered in your state of residence
and you must have held the shares you are exchanging for
at least 15 days. Class A Shares of the Fund may be ex-
changed for Class A Shares of any other Nuveen Mutual Fund
at net asset value without a sales charge. Similarly,
Class A Shares of other Nuveen Mutual Funds purchased sub-
ject to a
The Fund
offersno-charge
exchanges with
other Nuveen
Mutual Funds.
26
<PAGE>
sales charge may be exchanged for Class A Shares of the
Fund at net asset value without a sales charge. Shares of
any Nuveen Mutual Fund purchased through dividend rein-
vestment or through investment of Nuveen UIT distributions
may be exchanged for shares of the Fund or any other
Nuveen Mutual Fund without a sales charge. Exchanges of
shares from any Nuveen money market fund will be made into
Class A Shares or Class C Shares of the Fund or any other
Nuveen Mutual Fund at the public offering price, which in-
cludes an up-front sales charge in the case of Class A
Shares, and will be subject to an annual distribution fee
in the case of Class C Shares. If, however, a sales charge
has previously been paid on the investment represented by
the exchanged shares (i.e., the shares to be exchanged
were originally issued in exchange for shares on which a
sales charge was paid), the exchange of shares from a
Nuveen money market fund will be made into Class A Shares
at net asset value without any up-front sales charge.
Shares of any class of the Fund may be exchanged for
shares of any Nuveen money market fund that does not im-
pose a sales charge or have any distribution or service
fees.
No CDSC will be charged on the exchange of Class C Shares
of the Fund for Class C Shares of any other Nuveen Mutual
Fund or shares of any Nuveen money market fund. The 12
month holding period for purposes of the CDSC applicable
to Class C Shares will continue to run during any period
in which Class C Shares of the Fund, Class C Shares of any
other Nuveen Mutual Fund or shares of a Nuveen money mar-
ket fund are held.
The total value of exchanged shares must at least equal
the minimum investment requirement of the Nuveen Mutual
Fund being purchased. For federal income tax purposes, any
exchange constitutes a sale and purchase of shares and may
result in capital gain or loss. Before making any ex-
change, you should obtain the Prospectus for the Nuveen
Mutual Fund you are purchasing and read it carefully. If
the registration of the account for the Fund you are pur-
chasing is not exactly the same as that of the fund ac-
count from which the exchange is made, written instruc-
tions from all holders of the account from which the ex-
change 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. You may also exchange shares by telephone if you
authorize telephone exchanges by checking the applicable
box on the enclosed Application Form or by calling Nuveen
toll-free at 800-621-7227 to obtain an authorization form.
The exchange privilege may be modified or discontinued by
the Fund at any time upon prior written notice to share-
holders of the Fund.
27
<PAGE>
In addition, you may exchange Class R Shares of the Fund
for Class A Shares without a sales charge if the current
net asset value of your Class R Shares is at least $1,000
or you already own Class A Shares.
Reinstatement Privilege. If you have redeemed Class A
Shares of the Fund or Class A Shares of any other Nuveen
Mutual Fund that were subject to a sales charge, you may
reinvest without any added sales charge up to the full
amount of the redemption in Class A Shares of the Fund at
net asset value at the time of reinvestment. This rein-
statement privilege can be exercised only once for all or
a portion of the Class A Shares you redeemed and must be
exercised within 90 days of the date of the redemption. As
applied to Class C Shares of the Fund or of any other
Nuveen Mutual Fund, this reinstatement privilege, if exer-
cised within 90 days of the date of the redemption, will
preserve the number of years credited to your ownership of
Class C Shares for purposes of the conversion of these
Class C Shares to Class A Shares. Any CDSC charged if the
shares were redeemed within 12 months of purchase will be
refunded if ownership is reinstated within the 90 day pe-
riod. The tax consequences of any capital gain realized on
a redemption will not be affected by reinstatement, but a
capital loss may be disallowed in whole or in part depend-
ing on the timing and amount of the reinvestment.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO
OBTAIN THE APPLICATION FORMS REQUIRED FOR SOME OF THEM,
CALL NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL
INFORMATION If you choose to invest in the Fund, an account will be
opened and maintained for you by SSI, the Fund's share-
holder services agent. Share certificates will be issued
to you only upon written request to SSI, and no certifi-
cates will be issued for fractional shares. The Fund re-
serves the right to reject any purchase order and to waive
or increase minimum investment requirements. A change in
registration or transfer of shares held in the name of
your financial adviser's firm can only be made by an order
in good form from the financial adviser acting on your be-
half.
Authorized Dealers are encouraged to open single master
accounts. However, some Authorized Dealers may wish to use
SSI's sub-accounting system to minimize their internal re-
cordkeeping requirements. An Au-
thorized Dealer or other investor requesting shareholder
servicing or accounting other than the master account or
sub-accounting service offered by SSI will be required to
enter into a separate agreement with another agent for
these services for a fee that will depend upon the level
of services to be provided.
Subject to the rules and regulations of the Securities and
Exchange Commission, the Fund reserves the right to sus-
pend the continuous offering of its shares at any time,
but no suspension shall affect your right of redemption as
described below.
28
<PAGE>
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 pro-
vides that Class C Shares will be subject to an annual
distribution fee and in certain circumstances a CDSC, and
that both Class A Shares and Class C Shares will be sub-
ject to an annual service fee. Class R Shares will not be
subject to either distribution or service fees.
The distribution fee and CDSC applicable to Class C Shares
under the Plan will be payable to reimburse Nuveen for
services and expenses incurred in connection with the dis-
tribution of Class C Shares. These expenses include pay-
ments to Authorized Dealers, including Nuveen, who are
brokers of record with respect to the Class C Shares, as
well as, without limitation, expenses of printing and dis-
tributing prospectuses to persons other than shareholders
of the Fund, expenses of preparing, printing and distrib-
uting advertising and sales literature and reports to
shareholders used in connection with the sale of Class C
Shares, certain other expenses associated with the distri-
bution of Class C Shares, and any distribution-related ex-
penses that may be authorized from time to time by the
Board of Trustees.
The service fee applicable to Class A Shares and Class C
Shares under the Plan will be payable to Authorized Deal-
ers in connection with the provision of ongoing services
to shareholders. These services may include establishing
and maintaining shareholder accounts, answering share-
holder inquiries and providing other personal services to
shareholders.
The Fund may spend up to .25 of 1% per year of the average
daily net assets of Class A Shares as a service fee under
the Plan applicable to Class A Shares. The Fund may spend
up to .75 of 1% per year of the average daily net assets
of Class C Shares less the amount of any CDSC received by
Nuveen as to which no reinstatement privilege has been ex-
ercised as a distribution fee and up to .25 of 1% per year
of the average daily net assets of Class C Shares as a
service fee under the Plan applicable to Class C Shares.
HOW TO REDEEM FUND SHARES
You may require the Fund at any time to redeem for cash
your shares of the Fund at the net asset value next com-
puted after instructions and required documents and cer-
tificates, if any, are received in proper form. There is
no charge for the redemption of Class A Shares or Class R
Shares. An investor purchasing Class C Shares agrees to
pay a CDSC of 1% of the lower of (i) the net asset value
of Class C Shares at the time of
29
<PAGE>
purchase or (ii) the net asset value of Class C Shares at
the time of redemption, if Class C Shares are redeemed
within 12 months of purchase. The Fund will redeem shares
at net asset value and pay any applicable CDSC to Nuveen
on the shareholder's behalf from the proceeds of redemp-
tion. No CDSC will be charged on Class C Shares purchased
as a result of automatic reinvestment of dividends or cap-
ital gains paid. The CDSC will be calculated as if Class C
Shares not subject to a CDSC are redeemed first, except if
another order of redemption would result in a lower fee.
There is no CDSC on Class C Shares held more than 12
months.
The Fund offers a By Written Request. You may redeem shares by sending a
variety of written request for redemption directly to the Fund, c/o
redemption Shareholder Services, Inc., P.O. Box 5330, Denver, CO
options. 80217-5330, accompanied by duly endorsed certificates, if
issued. Requests for redemption and share certificates, if
issued, must be signed by each shareholder and, if the re-
demption proceeds exceed $25,000 or are payable other than
to the shareholder of record at the address of record
(which address may not have changed in the preceding 60
days), the signature must be guaranteed by a member of an
approved Medallion Guarantee Program or in such other man-
ner as may be acceptable to the Fund. You will receive
payment based on the net asset value per share next deter-
mined after receipt by the Fund of a properly executed re-
demption request in proper form. A check for the redemp-
tion proceeds will be mailed to you within seven days af-
ter receipt of your redemption request. However, if any
shares to be redeemed were purchased by check within 15
days prior to the date the redemption request is received,
a Fund will not mail the redemption proceeds until the
check received for the purchase of shares has cleared,
which may take up to 15 days.
By TEL-A-CHECK. If you have authorized telephone redemp-
tion and your account address has not changed within the
last 60 days, you can redeem shares that are held in non-
certificate form and that are worth $25,000 or less by
calling Nuveen at 800-621-7227. While you or anyone autho-
rized by you may make telephone redemption requests, re-
demption checks will be issued only in the name of the
shareholder of record and will be mailed to the address of
record. If your telephone request is received prior to
2:00 p.m. eastern time, the shares redeemed will earn in-
come through the day the request is made and the redemp-
tion check will be mailed the next business day. For re-
quests received after 2:00 p.m. eastern time, the shares
redeemed earn income through the next business day and the
check will be mailed on the second business day after the
request.
By TEL-A-WIRE. If you have authorized TEL-A-WIRE redemp-
tion, you can take advantage of the following expedited
redemption procedures to
30
<PAGE>
redeem shares held in non-certificate form that are worth
at least $1,000. You may make TEL-A-WIRE redemption re-
quests by calling Nuveen at 800-621-7227. If a redemption
request is received by 4:00 p.m. eastern time, the redemp-
tion will be made as of 4:00 p.m. that day. If the redemp-
tion request is received after 4:00 p.m. eastern time, the
redemption will be made as of 4:00 p.m. the following
business day. Redemption proceeds will normally be wired
on the second business day following the redemption, but
may be delayed one additional business day if the Federal
Reserve Bank of Boston or the Federal Reserve Bank of New
York is closed on the day redemption proceeds would ordi-
narily be wired. The Fund reserves the right to charge a
fee for TEL-A-WIRE.
Before you may redeem shares by TEL-A-CHECK or TEL-A-WIRE,
you must complete the telephone redemption authorization
section of the enclosed Application Form and return it to
Nuveen or SSI. If you did not authorize telephone redemp-
tion when you opened your account, you may obtain a tele-
phone redemption authorization form by writing the Fund or
by calling Nuveen toll-free at 800-621-7227. Proceeds of
share redemptions made by TEL-A-WIRE will be transferred
by Federal Reserve wire only to the commercial bank ac-
count specified by the shareholder on the application
form. You must send a written request to Nuveen or SSI in
order to establish multiple accounts, or to change the ac-
count or accounts designated to receive redemption pro-
ceeds. These requests must be signed by each account owner
with signatures guaranteed by a member of an approved Me-
dallion Guarantee Program or in such other manner as may
be acceptable to the Fund. Further documentation may be
required from corporations, executors, trustees or per-
sonal representatives.
The Fund reserves the right to refuse telephone redemp-
tions and, at its option, may limit the timing, amount or
frequency of these redemptions. This procedure may be mod-
ified or terminated at any time, on 30 days' notice, by
the Fund.
For the convenience of shareholders, the Fund has autho-
rized Nuveen as its agent to accept orders from financial
advisers by wire or telephone for the redemption of Fund
shares. The redemption price is the first net asset value
determined following receipt of an order placed by the fi-
nancial adviser. The Fund makes payment for the redeemed
shares to the securities representatives who placed the
order promptly upon presentation of required documents
with signatures guaranteed as described above. Neither the
Fund nor Nuveen charges any redemption fees. However, your
financial adviser may charge you for serving as agent in
the redemption of shares.
The Fund reserves the right to refuse telephone redemp-
tions and, at its option, may limit the timing, amount or
frequency of these redemptions.
31
<PAGE>
This procedure may be modified or terminated at any time,
on 30 days' notice, by the Fund. The Fund, SSI and Nuveen
will not be liable for following telephone instructions
reasonably believed to be genuine. The Fund employs proce-
dures reasonably designed to confirm that telephone in-
structions are genuine. These procedures include recording
all telephone instructions and requiring up to three forms
of identification prior to acting upon a caller's instruc-
tions. If the Fund does not follow reasonable procedures
for protecting shareholders against loss on telephone
transactions, it may be liable for any losses due to unau-
thorized or fraudulent telephone instructions.
Automatic Withdrawal Plan. If you own Fund shares cur-
rently worth at least $10,000, you may establish an Auto-
matic Withdrawal Plan by completing an application form
for the Plan. You may obtain an application form by check-
ing the applicable box on the enclosed Application Form or
by calling Nuveen toll-free at 800-621-7227.
The Plan permits you to request periodic withdrawals on a
monthly, quarterly, semi-annual or annual basis in an
amount of $50 or more. Depending upon the size of the
withdrawals requested under the Plan and fluctuations in
the net asset value of Fund shares, these withdrawals may
reduce or even exhaust your account.
The purchase of Class A Shares, other than through rein-
vestment, while you are participating in the Automatic
Withdrawal Plan with respect to Class A Shares will usu-
ally be disadvantageous because you will be paying a sales
charge on any Class A Shares you purchase at the same time
you are redeeming shares. Similarly, use of the Automatic
Withdrawal Plan for Class C Shares held 12 months or less
will result in imposition of the 1% CDSC. Purchase of new
Class C Shares, other than through reinvestment, while
participating in the Automatic Investment Plan may be dis-
advantageous because the newly-purchased Class C Shares
will be subject to the 1% CDSC until more than 12 months
after purchase.
General. The Fund may suspend the right of redemption of
Fund shares or delay payment more than seven days (a) dur-
ing 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
Securities and Exchange Commission so that trading of the
Fund's investments or determination of its net asset value
is not reasonably practicable, or (c) for any other peri-
ods that the Securities and Exchange Commission by order
may permit for protection of Fund shareholders.
32
<PAGE>
The Fund may, from time to time, establish a minimum total
investment for Fund shareholders, and the Fund reserves the
right to redeem your shares if your investment is less than
the minimum after giving you at least 30 days' notice. If
any minimum total investment is established, and if your
account is below the minimum, you will be allowed 30 days
following the notice in which to purchase sufficient shares
to meet the minimum. So long as the Fund continues to offer
shares at net asset value to holders of Nuveen UITs who are
investing their Nuveen UIT distributions, no minimum total
investment will be estab-lished for the Fund.
MANAGEMENT OF THE FUND
Board of Trustees. The management of the Fund, including
Nuveen Advisory general supervision of the duties performed for the Fund
has been managing by Nuveen Advisory under the Investment Management Agree-
similar tax-free ment, is the responsibility of the Fund's Board of Direc-
funds since 1976, tors.
and has
approximately $30
billion of assets
under management.
Investment Adviser. Nuveen Advisory acts as the investment
adviser for and manages the investment and reinvestment of
the assets of the Fund. Its address is Nuveen Advisory
Corp., 333 West Wacker Drive, Chicago, Illinois 60606.
Nuveen Advisory also administers the Fund's business af-
fairs, provides office facilities and equipment and cer-
tain clerical, bookkeeping and administrative services,
and permits any of its officers or employees to serve
without compensation as directors or officers of the Fund
if elected to such positions.
Nuveen Advisory was organized in 1976 and since then has
exclusively engaged in the management of municipal securi-
ties portfolios. It currently serves as investment adviser
to 21 open-end municipal securities portfolios (the
"Nuveen Mutual Funds") and 55 exchange-traded municipal
securities funds (the "Nuveen Exchange-Traded Funds").
Each of these invests substantially all of its assets in
investment grade quality, tax-free municipal securities,
and except for money-market funds, adheres to the value
investing strategy described previously. As of the date of
this Prospectus, Nuveen Advisory manages approximately $30
billion in assets held by the Nuveen Mutual Funds and the
Nuveen Exchange-Traded Funds.
Nuveen Advisory is a wholly-owned subsidiary of John
Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago,
Illinois 60606, the oldest and largest investment banking
firm (based on number of employees) specializing in the
underwriting and distribution of tax-exempt securities.
Nuveen, the principal underwriter of the Fund's shares, is
sponsor of the Nuveen Tax-Exempt Unit Trust, a registered
unit investment trust. It is also the principal underwriter
for the Nuveen Mutual Funds, and served as co-managing
underwriter for the shares of the Nuveen Exchange-
33
<PAGE>
Traded Funds. Over 1,000,000 individuals have invested to
date in Nuveen's tax-exempt funds and trusts. Founded in
1898, Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 75% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located in St.
Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries.
For the services and facilities furnished by Nuveen Advi-
sory, the Fund has agreed to pay an annual management fee
as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET
VALUE MANAGEMENT FEE
----------------------------------
<S> <C>
For the first $125 million .5000 of 1%
For the next $125 million .4875 of 1%
For the next $250 million .4750 of 1%
For the next $500 million .4625 of 1%
For the next $1 billion .4500 of 1%
For assets over $2 billion .4250 of 1%
</TABLE>
All fees and expenses are accrued daily and deducted be-
fore payment of dividends to investors. In addition to the
management fee of Nuveen Advisory, the Fund pays all its
other costs and expenses of its operations. Nuveen Advi-
sory has agreed to waive all or a portion of its manage-
ment fee or reimburse certain expenses of the Fund in or-
der to prevent total operating expenses (excluding any
distribution or service fees) in any fiscal year from ex-
ceeding .75 of 1% of the average daily net asset value of
any class of shares of the Fund. For the fiscal year ended
February 28, 1995, the management fee amounted to .45 of
1% of the average daily net assets, and the Fund's total
operating expenses amounted to .59 of 1% of the average
net assets.
Portfolio Management. Overall portfolio management strat-
egy and the day-to-day management of the Fund is the re-
sponsibility of Thomas C. Spalding, Jr., a Vice President
of Nuveen Advisory and of the Fund. Mr. Spalding has
served as the portfolio manager of the Fund since August,
1978. Mr. Spalding has been employed by Nuveen since 1976
and by Nuveen Advisory since 1978 and has responsibility
with respect to the portfolio management of all Nuveen
open-end and exchange-traded funds managed by Nuveen Advi-
sory. See the Statement of Additional Information for fur-
ther information about Mr. Spalding.
Consistent with the Fund's investment objectives, the day-
to-day management of the Fund is characterized by an em-
phasis on value investing, a process that involves the
search for Municipal Obligations with favorable
characteristics that, in Nuveen Advisory's judgment, have
not yet been recognized in the marketplace. The process of
searching for such undervalued or underrated securities is
an ongoing one that draws upon the re
sources of the portfolio managers of the various Nuveen
funds and senior management of Nuveen Advisory. All port-
folio management decisions are
34
<PAGE>
subject to weekly review by the Nuveen Advisory management
and to quarterly review by the Fund's Board of Trustees.
HOW THE FUND SHOWS PERFORMANCE
The Fund from time to time may quote various performance
The Fund may measures in order to illustrate the historical returns
compare its available from an investment in the Fund. These perfor-
performance with mance measures, which are determined for each class of
other tax-free shares, include:
and taxable
investments,
often on a
taxable
equivalent basis.
Yield Information. YIELD is a standardized measure of the
net investment income earned over a specified 30-day peri-
od, expressed as a percentage of the offering price per
share at the end of the period. Yield is an annualized
figure, which means that it is assumed that the same level
of net investment income is generated over a one-year pe-
riod.
TAXABLE EQUIVALENT YIELD is the yield that a taxable in-
vestment would need to generate in order to equal the
yield on an after-tax basis for an investor in a stated
tax bracket. Taxable equivalent yield will consequently be
higher than its yield. See the chart below and Appendix A
for examples of taxable equivalent yields and how you can
use them to compare other investments with investments in
the Fund.
HISTORICAL YIELDS
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
TAXABLE
EQUIVALENT 30 YEAR 6 MONTH TAXABLE
DATE BB 20 TREASURY CD MMF
<S> <C> <C> <C> <C>
1/86 12.63% 9.40% 7.54% 7.15%
1/87 10.41% 7.39% 5.60% 5.50%
1/88 12.08% 8.83% 6.75% 6.50%
1/89 11.48% 8.93% 8.12% 8.36%
1/90 11.09% 8.26% 7.62% 7.75%
1/91 11.06% 8.27% 6.75% 6.89%
1/92 10.18% 7.75% 3.72% 4.13%
1/93 9.62% 7.34% 2.87% 2.84%
1/94 8.29% 5.54% 2.72% 2.71%
1/95 10.21% 7.85% 5.43% 5.13%
</TABLE>
SOURCES: BOND BUYER, BANXQUOTE, IBC/DONOGHUE'S MONEY FUND
REPORT
35
<PAGE>
As this chart shows, interest rates on various long- and
short-term investments will fluctuate over time, and not
always in the same direction or to the same degree. For
convenience, the taxable equivalent yield of the Bond
Buyer 20 Index shown here was calculated using a 36% fed-
eral income tax rate. Other federal income tax rates, both
higher and lower, were in existence for all or part of the
period shown in the chart. This chart is not intended to
predict the future direction of interest rates. See the
discussion below under the subcaption "General" for a de-
scription of the indices and investments shown in the
chart.
DISTRIBUTION RATE is determined based upon the latest div-
idend, annualized, expressed as a percentage of the offer-
ing price per share at the end of the measurement period.
Distribution rate may sometimes be different than yield
because it may not reflect amortization of bond premiums
to the extent such premiums arise after the bonds were
purchased.
Total Return Information. AVERAGE ANNUAL TOTAL RETURN and
CUMULATIVE TOTAL RETURN figures for a specified period
measure both the net investment income generated by, and
the effect of any realized and unrealized appreciation or
depreciation of, an investment in the Fund, assuming the
reinvestment of all dividends and capital gain distribu-
tions. Average annual total return figures generally are
quoted for at least one-, five- and ten-year (or life-of-
fund, if shorter) periods and represent the average annual
percentage change over those periods. Cumulative total re-
turn figures are not annualized and represent the cumula-
tive percentage or dollar value change over the period
specified.
TAXABLE EQUIVALENT TOTAL RETURN represents the total re-
turn that would be generated by a taxable income fund that
produced the same amount of net asset value appreciation
or depreciation and after-tax income as the Fund in each
year, assuming a specified tax rate. The taxable equiva-
lent total return of the Fund will therefore be higher
than its total return over the same period.
From time to time, the Fund may compare its risk-adjusted
performance with other investments that may provide dif-
ferent levels of risk and return. For example, the Fund
may compare its risk level, as measured by the variability
of its periodic returns, or its RISK-ADJUSTED TOTAL RE-
TURN, with those of other funds or groups of funds. Risk-
adjusted total return would be calculated by adjusting
each investment's total return to account for the risk
level of the investment.
The Fund may also compare its TAX-ADJUSTED TOTAL RETURN
with that of other funds or groups of funds. This measure
would take into account the tax-
36
<PAGE>
exempt nature of exempt-interest dividends and the payment
of income taxes on a fund's distributions of net realized
capital gains and ordinary income.
General. Any given performance quotation or performance
comparison for the Fund is based on historical earnings
and should not be considered as representative of the per-
formance of the Fund for any future period. See the
Statement of Additional Information for further informa-
tion concerning the Fund's performance. For information as
to current yield and other performance information regard-
ing the Fund, call Nuveen toll-free at 800-621-7227.
A comparison of the current yield or historic performance
of the Fund to those of other investments is one element
to consider in making an informed investment decision. The
Fund may from time to time in its advertising and sales
materials compare its current yield or total return with
the yield or total return on taxable investments such as
corporate or U.S. Government bonds, bank certificates of
deposit (CDs) or money market funds. These taxable invest-
ments have investment characteristics that differ from
those of the Fund. Additionally, the Fund may compare its
current yield or total return history with a widely-fol-
lowed, unmanaged municipal market index such as the Bond
Buyer 20 Index, the Merrill Lynch 500 Municipal Market In-
dex or the Lehman Brothers Municipal Bond Index. Compara-
tive performance information may also be used from time to
time in advertising or marketing the Fund's shares, in-
cluding data from Lipper Analytical Services, Inc., Morn-
ingstar, Inc. and other industry publications.
DISTRIBUTIONS AND TAXES
HOW THE FUND PAYS The Fund will pay monthly dividends to shareholders at a
DIVIDENDS level rate that reflects the past and projected net income
of the Fund and that results, over time, in the distribu-
tion of substantially all of the Fund's net income. Net
income of the Fund consists of all interest income accrued
on its portfolio less all expenses of the Fund accrued
daily. To maintain a more stable monthly distribution, the
Fund may from time to time distribute less than the entire
amount of net income earned in a particular period. This
undistributed net income would be available to supplement
future distributions, which might otherwise have been re-
duced by a decrease in the Fund's monthly net income due
to fluctuations in investment income or expenses. As a re-
sult, the distributions paid by the Fund for any particu-
lar monthly period may be more or less than the amount of
net income
The Fund pays
monthly
dividends.
37
<PAGE>
actually earned by the Fund during such period. Undistrib-
uted net income is included in the Fund's net asset value
and, correspondingly, distributions from previously undis-
tributed net income are deducted from the Fund's net asset
value. It is not expected that this dividend policy will
impact the management of the Fund's portfolio.
Dividends paid by the Fund with respect to each class of
shares will be calculated in the same manner and at the
same time, and will be paid in the same amount except that
different distribution and service fees and any other ex-
pense relating to a specific class of shares will be borne
exclusively by that class. As a result, dividends per
share will vary among the Fund's classes.
The Fund will declare dividends on the 9th of each month
(or if the 9th is not a business day, on the immediately
preceding business day), payable to shareholders of record
as of the close of business on that day. This distribution
policy is subject to change, however, by the Board of
Trustees of the Fund without prior notice to or approval
by shareholders. Dividends will be paid on the first busi-
ness day of the following month and are reinvested in ad-
ditional shares of the Fund at net asset value unless you
have elected that your dividends be paid in cash. Net re-
alized capital gains, if any, will be paid not less fre-
quently than annually and will be reinvested at net asset
value in additional shares of the Fund unless you have
elected to receive capital gains distributions in cash.
TAX MATTERS The following federal tax discussion is intended to pro-
vide you with an overview of the impact of federal income
tax provisions on the Fund or its shareholders. These tax
provisions are subject to change by legislative or admin-
istrative action, and any changes may be applied retroac-
tively. Because the Fund's taxes are a complex matter, you
should consult your tax adviser for more detailed informa-
tion concerning the taxation of the Fund and the federal,
state and local tax consequences to Fund shareholders.
[/R]
Income dividends The Fund intends to qualify, as it has in prior years, un-
are free from der Subchapter M of the Internal Revenue Code of 1986, as
regular federal amended (the "Code"), for tax treatment as a regulated in-
income tax. vestment company. In order to qualify for treatment as a
regulated investment company, the Fund must satisfy cer-
tain requirements relating to the sources of its income,
diversification of its assets and distribution of its in-
come to shareholders. As a regulated investment company,
the Fund will not be subject to federal income tax on the
portion of its net investment income and net realized cap-
ital gains that is [/R]
38
<PAGE>
currently distributed to shareholders. The Fund also in-
tends to satisfy conditions that will enable it to pay
"exempt-interest dividends" to its shareholders. This
means that you will not be subject to regular federal in-
come tax on Fund dividends you receive from income on Mu-
nicipal Obligations.
Your share of the Fund's taxable income, if any, from in-
come on taxable temporary investments and net short-term
capital gains, will be taxable to you as ordinary income.
If the Fund purchases a Municipal Obligation at a market
discount, any gain realized by the Fund upon sale or re-
demption of the Municipal Obligation will be treated as
taxable interest income to the extent such gain does not
exceed the market discount, and any gain realized in ex-
cess of the market discount will be treated as capital
gains. Distributions, if any, of net long-term capital
gains are taxable as long-term capital gains, regardless
of the length of time you have owned Fund shares. You are
required to pay tax on all taxable distributions even if
these distributions are automatically reinvested in addi-
tional Fund shares. Certain distributions paid by a Fund
in January of a given year may be taxable to shareholders
as if received the prior December 31. As long as the Fund
qualifies as a regulated investment company under the
Code, distributions will not qualify for the dividends re-
ceived deduction for corporate shareholders. Investors
should consider the tax implications of buying shares im-
mediately prior to a distribution. Investors who purchase
shares shortly before the record date for a distribution
will pay a per share price that includes the value of the
anticipated distribution and will be taxed on the distri-
bution (unless it is exempt from tax) even though the dis-
tribution represents a return of a portion of the purchase
price.
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 taxable income for that year, and the
entire amount of your distributions would be taxable as
ordinary income.
The Code does not permit you to deduct the interest on
borrowed monies used to purchase or carry tax-free invest-
ments, such as Fund shares. Under Internal Revenue Service
rules, the purchase of Fund shares may be considered to
have been made with borrowed monies even though those mon-
ies are not directly traceable to the purchase of those
shares.
Because the net asset value of the Fund's shares includes
net tax-exempt interest earned by the Fund but not yet de-
clared as an exempt-interest dividend, each time an ex-
empt-interest dividend is declared, the net asset value of
the Fund's shares will decrease in an amount equal to the
39
<PAGE>
amount of the dividend. Accordingly, if you redeem Fund
shares immediately prior to or on the record date of a
monthly exempt-interest dividend, you may realize a tax-
able gain even though a portion of the redemption proceeds
may represent your pro rata share of undistributed tax-ex-
empt interest earned by the Fund.
The redemption or exchange of Fund shares normally will
result in capital gain or loss to shareholders. Any loss
you may realize on the redemption or exchange of Fund
shares held for six months or less will be disallowed to
the extent of any distribution of exempt-interest divi-
dends received on these shares and will be treated as a
long-term capital loss to the extent of any distribution
of long-term capital gain received on these shares.
If you receive social security or railroad retirement ben-
efits you should note that tax-exempt income is taken into
account in calculating the amount of these benefits that
may be subject to federal income tax.
The Fund may invest in private activity bonds, the inter-
est on which is not exempt from federal income tax to
"substantial users" of the facilities financed by these
bonds or "related persons" of such substantial users.
Therefore, the Fund may not be an appropriate investment
for you if you are considered either a substantial user or
a related person.
The Fund may invest up to 20% of its net assets in AMT
Bonds, the interest on which is a specific tax preference
item for purposes of computing the alternative minimum tax
on corporations and individuals. If your tax liability is
determined under the alternative minimum tax, you will be
taxed on your share of the Fund's exempt-interest divi-
dends that were paid from income earned on AMT Bonds. In
addition, the alternative minimum taxable income for cor-
porations is increased by 75% of the difference between an
alternative measure of income ("adjusted current earn-
ings") and the amount otherwise determined to be alterna-
tive minimum taxable income. Interest on all Municipal Ob-
ligations, and therefore all distributions by the Fund
that would otherwise be tax exempt, is included in calcu-
lating a corporation's adjusted current earnings.
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 back-up withholding.
Each January, the Fund will notify you of the amount and
tax status of Fund distributions for the preceding year.
40
<PAGE>
NET ASSET VALUE
Net asset value Net asset value of the shares of the Fund will be deter-
is calculated mined separately for each class of shares. The net asset
daily. value per share of a class of shares will be computed by
dividing the value of the Fund's assets attributable to
the class, less the liabilities attributable to the class,
by the total number of shares of the class outstanding.
The net asset value per share is expected to vary among
Class A Shares, Class C Shares and Class R Shares, princi-
pally due to the differences in sales charges, distribu-
tion and service fees and other class expenses borne by
each class.
Net asset value will be determined by United States Trust
Company of New York, the Fund's custodian, as of 4:00 p.m.
eastern time on each day the New York Stock Exchange is
normally open for trading. In determining net asset value,
the custodian uses the valuations of portfolio securities
furnished by a pricing service approved by the Board of
Trustees. The pricing service values portfolio securities
at the mean between the quoted bid and asked prices or the
yield equivalent when quotations are readily available.
Securities for which quotations are not readily available
(which are expected to constitute a majority of the secu-
rities held by the Fund) are valued at fair value as de-
termined by the pricing service using methods that include
consideration of the following: yields or prices of munic-
ipal bonds of comparable quality, type of issue, coupon,
maturity and rating; indications as to value from securi-
ties dealers; and general market conditions. The pricing
service may employ electronic data processing techniques
and/or a matrix system to determine valuations. The proce-
dures of the pricing service and its valuations are re-
viewed by the officers of the Fund under the general su-
pervision of its Board of Trustees.
GENERAL INFORMATION
If you have any questions about the Fund or other Nuveen
Mutual Funds, call Nuveen toll-free at 800-621-7227.
Custodian and Transfer and Shareholder Services Agent. The
Custodian of the assets of the Fund is United States Trust
Company of New York, 114 West 47th Street, New York, New
York 10036. The Chase Manhattan Bank, N.A., 1 Chase Man-
hattan Plaza, New York, NY 10081, has agreed to become
successor to US Trust, as Custodian and Fund Accountant.
The succession is presently scheduled for July 1, 1995. No
changes in the Fund's administration or in the amount of
fees and expenses paid by the Fund for these services will
result, and no action by shareholders will be required.
The Fund's transfer, shareholder services and dividend
41
<PAGE>
paying agent, Shareholder Services, Inc., P.O. Box 5330,
Denver, CO 80217-5330, performs bookkeeping, data process-
ing and administrative services for the maintenance of
shareholder accounts.
Organization. The Fund is an open-end diversified manage-
ment investment company under the Investment Company Act
of 1940. The Fund was originally incorporated in Maryland
on October 8, 1976 and reorganized as a Massachusetts
business trust on June 12, 1995. The Board of Trustees is
authorized to issue an unlimited number of shares, $.10
par value, divided into three classes of shares designated
as Class A Shares, Class C Shares and Class R Shares. Each
class of shares represents an interest in the same portfo-
lio of investments of the Fund. Each class of shares has
equal rights as to voting, redemption, dividends and liq-
uidation, except that each bears different class expenses,
including different distribution and service fees, and
each has exclusive voting rights with respect to any dis-
tribution or service plan applicable to its shares. There
are no conversion, preemptive or other subscription
rights, except that Class C Shares automatically convert
into Class A Shares, as described above. The Board of
Trustees has the right to establish additional series of
the Fund and classes of shares in the future, to change
those series or classes and to determine the preferences,
voting powers, rights and privileges thereof.
The Fund is not required and does not intend to hold an-
nual meetings of shareholders. Shareholders owning more
than 10% of the outstanding shares of the Fund have the
right to call a special meeting to remove Trustees or for
any other purpose.
The Fund is an entity of the type commonly known as a
"Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circum-
stances, be held personally liable as partners for its ob-
ligations. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or
obligations of the Fund and requires that notice of this
disclaimer be given in each agreement, obligation or in-
strument entered into or executed by the Fund or the
Trustees. The Declaration of Trust further provides for
indemnification out of the assets and property of the Fund
for all loss and expense of any shareholder held person-
ally liable for the obligations of the Fund. 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 Fund it-
self was unable to meet its obligations. The Fund believes
the likelihood of these circumstances is remote.
42
<PAGE>
APPENDIX A--TAXABLE EQUIVALENT YIELD TABLES
TAXABLE The following tables show the effects for individuals of
EQUIVALENT YIELD federal income taxes on:
TABLES AND THE
EFFECT OF TAXES
AND INTEREST
RATES ON
INVESTMENTS
. what you would have to earn on a taxable investment to
equal a given tax-free yield; and
. the amount that those subject to a given tax rate would
have to put into a tax-free investment in order to gen-
erate the same after-tax income as a taxable investment.
These tables are for illustrative purposes only and are
not intended to predict the actual return you might earn
on a Fund investment. The Fund occasionally may advertise
its performance in similar tables using other current tax
rates than those shown here. The tax rates used in these
tables have been rounded to the nearest one-half of one
percent. They are based upon published 1995 marginal fed-
eral tax rates and do not take into account changes in tax
rates that are proposed from time to time. They reflect
the current federal tax limitations on itemized deductions
and personal exemptions, which may raise the effective tax
rate and taxable equivalent yield for taxpayers above cer-
tain income levels. The tax rates shown here may be higher
or lower than your actual tax rate. A higher tax rate
would tend to make the dollar amounts in the third table
lower, while a lower tax rate would make the amounts high-
er. You should consult your tax adviser to determine your
actual tax rate.
<PAGE>
NUVEEN MUNICIPAL BOND FUND
MARGINAL TAX
RATES FOR JOINT
TAXPAYERS WITH
FOUR PERSONAL
EXEMPTIONS
<TABLE>
<CAPTION>
Federal
Federal Adjusted
Taxable Gross TAX-FREE YIELD
Income Income Federal 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-
39.0 $ 0-114.7 15.0% 4.12 4.71 5.29 5.88 6.47 7.06 7.65
-------------------------------------------------------------------
39.0-
94.3 0-114.7 28.0 4.86 5.56 6.25 6.94 7.64 8.33 9.03
-------------------------------------------------------------------
114.7-172.1 29.0 4.93 5.63 6.34 7.04 7.75 8.45 9.15
-------------------------------------------------------------------
94.3-
143.6 0-114.7 31.0 5.07 5.80 6.52 7.25 7.97 8.70 9.42
-------------------------------------------------------------------
114.7-172.1 32.0 5.15 5.88 6.62 7.35 8.09 8.82 9.56
-------------------------------------------------------------------
172.1-294.6 34.5 5.34 6.11 6.87 7.63 8.40 9.16 9.92
-------------------------------------------------------------------
143.6-
256.5 114.2-172.1 37.0 5.56 6.35 7.14 7.94 8.73 9.52 10.32
-------------------------------------------------------------------
172.1-294.6 40.0 5.83 6.67 7.50 8.33 9.17 10.00 10.83
-------------------------------------------------------------------
Over 294.6 37.0 5.56 6.35 7.14 7.94 8.73 9.52 10.32
-------------------------------------------------------------------
Over
256.5 172.1-294.6 44.0 6.25 7.14 8.04 8.93 9.82 10.71 11.61
-------------------------------------------------------------------
Over 294.6 41.0 5.93 6.78 7.63 8.47 9.32 10.17 11.02
</TABLE>
MARGINAL TAX
RATES FOR SINGLE
TAXPAYERS WITH
ONE PERSONAL
EXEMPTION
<TABLE>
<CAPTION>
Federal
Federal Adjusted
Taxable Gross TAX-FREE YIELD
Income Income Federal 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-
23.4 $ 0-114.7 15.0% 4.12 4.71 5.29 5.88 6.47 7.06 7.65
-------------------------------------------------------------------
23.4-
56.6 0-114.7 28.0 4.86 5.56 6.25 6.94 7.64 8.33 9.03
-------------------------------------------------------------------
56.6-
118.0 0-114.7 31.0 5.07 5.80 6.52 7.25 7.97 8.70 9.42
-------------------------------------------------------------------
114.7-237.2 32.5 5.19 5.93 6.67 7.41 8.15 8.89 9.63
-------------------------------------------------------------------
118.0-
256.5 114.7-237.2 38.0 5.65 6.45 7.26 8.06 8.87 9.68 10.48
-------------------------------------------------------------------
Over 237.2 37.0 5.56 6.35 7.14 7.94 8.73 9.52 10.32
-------------------------------------------------------------------
Over
256.5 Over 237.2 41.0 5.93 6.78 7.63 8.47 9.32 10.17 11.02
-------------------------------------------------------------------
</TABLE>
-----------------------------------------------------------
FOR AN EQUAL
AFTER-TAX RETURN,
YOUR TAX-FREE
INVESTMENT MAY BE
LESS*
<TABLE>
<CAPTION>
3.5% 4.0% 4.5% 5.0% 5.5% 6.5%
TAX- TAX- TAX- TAX- TAX- 6.0% TAX-
$50,000 INVESTMENT FREE FREE FREE FREE FREE TAX-FREE FREE
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPARE 4% TAXABLE $39,429 $34,500 $30,667 $27,600 $25,091 $23,000 $21,231
----------------------------------------------------------------------
COMPARE 5% TAXABLE $49,286 $43,125 $38,333 $34,500 $31,364 $28,750 $26,538
----------------------------------------------------------------------
COMPARE 6% TAXABLE $59,143 $51,750 $46,000 $41,400 $37,636 $34,500 $31,846
----------------------------------------------------------------------
COMPARE 7% TAXABLE $69,000 $60,375 $53,667 $48,300 $43,909 $40,250 $37,154
----------------------------------------------------------------------
COMPARE 8% TAXABLE $78,857 $69,000 $61,333 $55,200 $50,182 $46,000 $42,462
</TABLE>
For example,
$50,000 in a 6%
taxable
investment earns
the same after-
tax return as
$41,400 in a 5%
tax-free Nuveen
investment.
-----------------------------------------------------------
*The dollar amounts in the table reflect a 31.0% federal
tax rate.
A-2
<PAGE>
Nuveen Tax-Free Value Funds
Application Form
NOTE: THIS APPLICATION FORM MAY NOT BE USED FOR ALL TYPES OF
ACCOUNTS AND CERTAIN OPTIONAL FUND SERVICES. PLEASE OBTAIN SPE-
CIAL APPLICATION MATERIALS BY CHECKING THE BOXES IN APPLICATION
ITEM #7 OR BY CALLING NUVEEN TOLL-FREE AT 800-621-7227.
1 ACCOUNT REGISTRATION
CHECK THE BOX [_] Individual
THAT DESCRIBES
THE TYPE OF
ACCOUNT YOU
ARE OPENING,
AND COMPLETE
ALL THE
INFORMATION
WHICH APPLIES
TO YOUR AC-
COUNT TYPE.
Last Name, First, Initial Social Security Number
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[_] Joint Tenant (if any)
Last Name, First, Initial
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Registration [_] Gift to a Minor
for two or
more persons
will be as
joint tenants
with right of
survivorship
unless noted
otherwise.
Name of Trustee Minor's Name (only one minor
may be named)
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Under the Uniform Gift to Minors Act of [Name of State]
Minor's Social Security Number
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[_] Trust[_] Custodian
Trust's Agreement Date (mandatory)
Trustee's or Custodian's Name
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Trust's Name Trust's Taxpayer I.D. Number
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2 MAILING ADDRESS
Street Address City, State, Zip Code
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Daytime Telephone Number (include area code)
Evening Telephone Number (in-
clude area code)
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3 FUND SELECTION
PLEASE INDI-
CATE IN WHICH
NUVEEN FUND(S)
YOU WOULD LIKE
TO OPEN AN AC-
COUNT AND THE
AMOUNT AND THE
CLASS OF
SHARES IN
WHICH YOU
WOULD LIKE TO
INVEST ($1,000
MINIMUM INI-
TIAL
INVESTMENT PER
CLASS OF ANY
FUND).
<TABLE>
<CAPTION>
NUVEEN FUND CLASS A SHARES CLASS C SHARES
----------- -------------- --------------
$
<S> <C> <C>
Municipal Bond Fund [_] [_]
Insured Municipal Bond Fund [_] [_]
Arizona Tax-Free Value Fund [_] [_]
California Tax-Free Value Fund [_] [_]
California Insured Tax-Free Value Fund [_] [_]
Florida Tax-Free Value Fund [_] [_]
Maryland Tax-Free Value Fund [_] [_]
Massachusetts Tax-Free Value Fund [_] [_]
Massachusetts Insured Tax-Free Value Fund [_] [_]
Michigan Tax-Free Value Fund [_] [_]
New Jersey Tax-Free Value Fund [_] [_]
New York Tax-Free Value Fund [_] [_]
New York Insured Tax-Free Value Fund [_] [_]
Ohio Tax-Free Value Fund [_] [_]
Pennsylvania Tax-Free Value Fund [_] [_]
Virginia Tax-Free Value Fund [_] [_]
</TABLE>
[_] Check this box if you qualify for Class R Share purchases
as described in the Fund Prospectus. Class R Shares are not
available unless you meet certain eligibility requirements.
NOTE: State funds may not be registered for sale in all states.
Please enclose a separate check made payable to each fund/class
in which you are investing. If more than one fund is selected,
any optional features chosen will apply to all fund accounts.
If you prefer to wire funds to open an account, or need any as-
sistance in completing this form, call Nuveen toll-free at 800-
621-7227.
4 DISTRIBUTION OPTIONS
IF NO BOX IS [_] Dividends are to be paid by check.
CHECKED, ALL
DISTRIBUTIONS
FROM A FUND
WILL BE
REINVESTED
INTO THE SAME
FUND.
[_] Capital gains are to be paid by check.
5 INFORMATION ABOUT YOUR FINANCIAL ADVISER
PLEASE SUPPLY Financial Adviser's Name Street Address
THE NAME AND
ADDRESS OF
YOUR FINANCIAL
ADVISER SO
THAT THEY WILL
RECEIVE
DUPLICATE
COPIES OF YOUR
FUND
STATEMENTS.
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Firm Name City, State, Zip Code
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6 SIGNATURE(S)
SIGN IN INK I certify that I have power and authority to establish this ac-
EXACTLY AS count and select the options requested. I also release the
NAME OR NAMES fund(s), Shareholder Services, Inc. (SSI), John Nuveen & Co.
APPEAR ABOVE Incorporated, United Missouri Bank of Kansas City, N.A., First
IN ACCOUNT Interstate Bank of Denver, N.A. and their agents and represent-
REGISTRATION atives from all liability and agree to indemnify each of them
SECTION. from any and all losses, damages or costs for acting in good
faith in accordance with instructions believed to be genuine.
With respect to the options identified on items #8, #9, and #10
of this application, I understand that the Fund(s), SSI and
Nuveen will not be liable for following telephone instructions
reasonably believed to be genuine. I also understand that the
Fund(s) employ procedures reasonably designed to confirm that
telephone instructions are genuine and, if these procedures are
not followed, the Fund(s) may be liable for any losses due to
unauthorized or fraudulent telephone instructions. I agree that
the authorizations herein shall continue until SSI receives
written notice of a change or modification signed by all ac-
count owners. I understand that each account is subject to the
terms of the prospectus of the Nuveen fund selected, as amended
from time to time, and subject to acceptance by that fund in
Chicago, Illinois, and to the laws of Illinois. All terms shall
be binding upon my heirs, representatives and assigns. I cer-
tify that I have received and read the current prospectus for
each fund I have selected. Under penalties of perjury, I cer-
tify (1) that the number shown on this Application Form is my
correct Social Security or Taxpayer Identification Number, and
(2) that the IRS has not notified me that I am subject to
backup withholding. (Line out clause (2) if you are subject to
backup withholding.)
Individual's Signature Date Joint Tenant's Signature (if
applicable)
Date
-------------------------------
-------------------------------
Custodian/Trustee Signature (if applicable)
Date
BY:
-------------------------------
SEE REVERSE SIDE FOR OPTIONAL FUND SERVICES.
<PAGE>
Optional Fund Services
7 OPTIONAL FUND SERVICES
Please send me application materials for these optional fund
services which are described in the prospectus:
[_] Automatic Deposit Plan
[_] Automatic Withdrawal Plan
[_] UIT Rein-
vestment
[_] Payroll Direct Deposit Plan
[_] Group Purchase Plans
8 TEL-A-WIRE AUTHORIZATION
By electing this option, I authorize SSI and Nuveen to honor
telephone instructions to redeem my fund shares (minimum
$1,000), subject to the terms and conditions described in the
prospectus.
SELECT ONLY [_] OPTION A
ONE OF THE By completing this section, I elect to have all redemption pro-
FOLLOWING, OP- ceeds wired to my personal checking, NOW or money market ac-
TION A OR B. count at a commercial bank. (Attach a check marked "void" and
complete only the Option A section.)
Name of Bank Bank's Street Address
----------------------------------------------------------------
Your Bank Account Name Bank's City, State, Zip Code
----------------------------------------------------------------
Your Bank Account Number
Bank's Routing Code
Bank's Telephone Number (in-
clude area code)
----------------------------------------------------------------
[_] OPTION B
By completing this section, I elect to have all redemption pro-
ceeds wired in my name to the commercial bank account of my fi-
nancial adviser's firm. (A representative of that firm must
complete and sign the second part of the Option B section.)
Name of Financial Adviser's Firm Firm's Street Address
----------------------------------------------------------------
Your Account Name Firm's City, State, Zip Code
----------------------------------------------------------------
Your Account Number Firm's Telephone Number (in-
clude area code)
----------------------------------------------------------------
Name of Bank of Financial Adviser's Firm
Bank's Street Address
TO BE COM-
PLETED BY YOUR
FINANCIAL AD-
VISER IF
OPTION B IS
SELECTED.
----------------------------------------------------------------
Name of Branch Bank's Routing Code
Bank's City, State, Zip Code
----------------------------------------------------------------
Bank's Account Number Financial Adviser's Signature
Date
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9 TEL-A-CHECK AUTHORIZATION
CHECK THE BOX [_] I hereby authorize the fund and its agents to honor tele-
TO ELECT THIS phone instructions to redeem shares worth $25,000 or less from
OPTION my account and send those proceeds by check payable to me to my
address of record, subject to the terms and conditions de-
scribed in the prospectus.
10 TELEPHONE EXCHANGE AUTHORIZATION
CHECK THE BOX [_] I hereby authorize the fund and its agents to honor
TO ELECT THIS telephone instructions to invest redemption proceeds from the
OPTION. fund into other Nuveen Mutual Funds, subject to the terms and
conditions described in the prospectus.
11 LETTER OF INTENT
COMPLETE THIS [_] By electing this option, I indicate my intention, but am
SECTION TO under no obligation, to purchase additional Class A Shares in
ELECT THIS OP- the fund(s) and amount(s) indicated over the next 13 months in
TION. order to qualify for reduced sales charges, subject to the
terms and conditions described in the prospectus. I understand
that I or my financial adviser must notify Nuveen or SSI when I
make a purchase of fund shares that I wish to be covered under
the Letter of Intent option.
I intend to purchase at least:
[_] $50,000
[_] $100,000
[_] $250,000
[_] $500,000
[_] $1,000,000 or more
worth of shares of Fund(s) over the next 13 months.
MAIL COMPLETED APPLICATION FORM TO:
NUVEEN TAX-FREE VALUE FUNDS
P.O. BOX 5330
DENVER, CO 80217-5330
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
NUVEEN MUNICIPAL BOND FUND
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
Statement of Additional Information
June 13, 1995
Nuveen Municipal Bond Fund
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN MUNICIPAL BOND FUND
This Statement of Additional Information is not a prospectus. A prospectus may
be obtained from certain securities representatives, banks and other financial
institutions that have entered into sales agreements with John Nuveen & Co. In-
corporated, or from the Fund, c/o John Nuveen & Co. Incorporated, 333 West
Wacker Drive, Chicago, Illinois 60606. This Statement of Additional Information
relates to, and should be read in conjunction with, the Prospectus dated June
13, 1995.
<TABLE>
<S> <C>
Table of Contents Page
- --------------------------------------------------------------------------
Fundamental Policies and Investment Portfolio 2
- --------------------------------------------------------------------------
Management 9
- --------------------------------------------------------------------------
Investment Adviser and Investment Management Agreement 12
- --------------------------------------------------------------------------
Portfolio Transactions 13
- --------------------------------------------------------------------------
Net Asset Value 14
- --------------------------------------------------------------------------
Tax Matters 15
- --------------------------------------------------------------------------
Performance Information 20
- --------------------------------------------------------------------------
Additional Information on the Purchase and Redemption of Fund Shares 24
- --------------------------------------------------------------------------
Distribution and Service Plan 26
- --------------------------------------------------------------------------
Independent Public Accountants and Custodian 27
- --------------------------------------------------------------------------
Appendix A--Financial Statements
- --------------------------------------------------------------------------
</TABLE>
The audited financial statements for the fiscal year ended February 28, 1994,
appearing in the Fund's Annual Report are incorporated herein by reference. The
1994 Annual Report accompanies this Statement of Additional Information. Unau-
dited financial statements for the fiscal year ended February 28, 1995 are in-
cluded as Appendix A to this Statement of Additional Information. These unau-
dited statements reflect all adjustments, all of which are of a normal, recur-
ring nature, which are, in the opinion of management, necessary to a fair
statement of the results for the periods presented.
<PAGE>
FUNDAMENTAL POLICIES AND INVESTMENT PORTFOLIO
FUNDAMENTAL POLICIES
The investment objective and certain fundamental investment policies of the
Fund 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 of the
Fund:
(1) Invest in securities other than Municipal Obligations and temporary invest-
ments, as those terms are defined in the Prospectus;
(2) Invest more than 5% of its total assets in securities of any one issuer,
except that this limitation shall not apply to securities of the United States
government, its agencies and instrumentalities;
(3) Borrow money, except for temporary or emergency purposes and not for in-
vestment purposes and then only in an amount not exceeding 5% of the value of
the Fund's total assets at the time of borrowing;
(4) Pledge, mortgage or hypothecate its assets, except that, to secure
borrowings permitted by subparagraph (3) above, it may pledge securities having
a market value at the time of pledge not exceeding 10% of the value of the
Fund's total assets;
(5) Issue senior securities as defined in the Investment Company Act of 1940;
(6) Underwrite any issue of securities;
(7) Purchase or sell real estate, but this shall not prevent the Fund from in-
vesting in Municipal Obligations secured by real estate or interests therein;
(8) Purchase or sell commodities or commodities contracts or oil, gas or other
mineral exploration or development programs;
(9) Make loans, other than by entering into repurchase agreements and through
the purchase of Municipal Obligations or temporary investments in accordance
with the Fund's investment objective, policies and limitations;
(10) Make short sales of securities or purchase any securities on margin, ex-
cept for such short-term credits as are necessary for the clearance of transac-
tions;
(11) Write or purchase puts, calls, straddles, spreads or any combination
thereof;
(12) Invest more than 5% of its total assets in securities of unseasoned is-
suers which, together with their predecessors, have been in operation for less
than three years;
(13) Invest more than 10% of its total assets in securities that the Fund is
restricted from selling to the public without registration under the Securities
Act of 1933; or
(14) Purchase or retain the securities of any issuer other than the securities
of the Fund if, to the Fund's knowledge, those trustees of the Fund, or those
officers and directors of Nuveen Advisory Corp. ("Nuveen Advisory"), who indi-
vidually own beneficially more than 1/2 of 1% of the outstanding securities of
such issuer, together own beneficially more than 5% of such outstanding securi-
ties.
For the purpose of applying the limitations set forth in paragraphs (2) and
(12) 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 secu-
rities are backed only by its assets and revenues. Similarly, in
2
<PAGE>
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 as-
sets 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 other
entity (other than a bond insurer), it shall also be included in the computa-
tion 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, 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.
With respect to temporary investments, in addition to the foregoing limita-
tions, the Fund will not purchase securities (other than securities of the U.S.
government, its agencies and instrumentalities) if, as a result of such pur-
chase, more that 25% of the Fund's total assets would be invested in any one
industry nor enter into a repurchase agreement if, as a result thereof, more
than 10% of its assets would be subject to repurchase agreements maturing in
more than seven days.
The foregoing restrictions and limitations, as well as the Fund's policies as
to ratings of portfolio investments, will apply only at the time of purchase of
securities, and the percentage limitations will not be considered violated un-
less 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 ob-
jective of the Fund, cannot be changed without approval by holders of a "major-
ity of the Fund's outstanding voting shares." As defined in the Investment Com-
pany 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.
PORTFOLIO SECURITIES
As described in the Prospectus, the Fund invests primarily in a diversified
portfolio of Municipal Obligations issued within the 50 states and certain U.S.
possessions and territories. In general, Municipal Obligations include debt ob-
ligations issued by states, cities and local authorities to obtain funds for
various public purposes, including construction of a wide range of public fa-
cilities such as airports, bridges, highways, hospitals, housing, mass trans-
portation, schools, streets and water and sewer works. Industrial development
bonds and pollution control bonds that are issued by or on
3
<PAGE>
behalf of public authorities to finance various privately-rated facilities are
included within the term Municipal Obligations if the interest paid thereon is
exempt from federal income tax.
The investment assets of the Fund will consist of (1) Municipal Obligations
which are rated at the time of purchase within the four highest grades (Baa or
BBB or better) by Moody's Investors Service, Inc. ("Moody's") or Standard and
Poor's Corporation ("S&P"), (2) unrated Municipal Obligations which, in the
opinion of Nuveen Advisory, have credit characteristics equivalent to bonds
rated within the four highest grades by Moody's or S&P, except that the Fund
may not invest more than 10% of its net assets in unrated bonds and (3) tempo-
rary investments as described below, the income from which may be subject to
federal income tax.
As described in the Prospectus, the Fund may invest in Municipal Obligations
that constitute participations in a lease obligation or installment purchase
contract obligation (hereafter collectively called "lease obligations") of a
municipal authority or entity. Although lease obligations do not constitute
general obligations of the municipality for which the municipality's taxing
power is pledged, a lease obligation is ordinarily backed by the municipality's
covenant to budget for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain "non-appropriation"
clauses which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated for
such purpose on a yearly basis. Although nonappropriation lease obligations are
secured by the leased property, disposition of the property in the event of
foreclosure might prove difficult. The Fund will seek to minimize the special
risks associated with such securities by not investing more than 10% of its as-
sets in lease obligations that contain non-appropriation clauses, and by only
investing in those nonappropriation leases where (1) the nature of the leased
equipment or property is such that its ownership or use is essential to a gov-
ernmental function of the municipality, (2) the lease payments will commence
amortization of principal at an early date resulting in an average life of
seven years or less for the lease obligation, (3) appropriate covenants will be
obtained from the municipal obligor prohibiting the substitution or purchase of
similar equipment if lease payments are not appropriated, (4) the lease obligor
has maintained good market acceptability in the past, (5) the investment is of
a size that will be attractive to institutional investors, and (6) the under-
lying leased equipment has elements of portability and/or use that enhance its
marketability in the event foreclosure on the underlying equipment were ever
required. Lease obligations provide a premium interest rate which along with
regular amortization of the principal may make them attractive for a portion of
the assets of the Fund.
Obligations of issuers of Municipal Obligations are subject to the provisions
of bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors, such as the Federal Bankruptcy Reform Act of 1978. In addition, the
obligations of such issuers may become subject to the laws enacted in the fu-
ture by Congress, state legislatures or referenda extending the time for pay-
ment of principal and/or interest, or imposing other constraints upon enforce-
ment of such obligations or upon municipalities to levy taxes. There is also
the possibility that, as a result of legislation or other conditions, the power
or ability of any issuer to pay, when due, the principal of and interest on its
Municipal Obligations may be materially affected.
4
<PAGE>
PORTFOLIO TRADING AND TURNOVER
The Fund will make changes in its investment portfolio from time to time in
order to take advantage of opportunities in the municipal market and to limit
exposure to market risk. The Fund may also engage to a limited extent in
short-term trading consistent with its investment objective. Securities may be
sold in anticipation of market decline or purchased in anticipation of market
rise and later sold, but the Fund will not engage in trading solely to recog-
nize a gain. In addition, a security may be sold and another of comparable
quality purchased at approximately the same time to take advantage of what
Nuveen Advisory believes to be a temporary disparity in the normal yield rela-
tionship between the two securities. The Fund may make changes in its invest-
ment portfolio in order to limit its exposure to changing market conditions.
Changes in the Fund's investments are known as "portfolio turnover." While it
is impossible to predict future portfolio turnover rates, the Fund's annual
portfolio turnover rate is generally not expected to exceed 35%. However, the
Fund reserves the right to make changes in its investments whenever it deems
such action advisable, and therefore, the Fund's annual portfolio turnover
rate may exceed 35% in particular years depending upon market conditions. The
Fund's portfolio turnover rates for the fiscal years ended February 28, 1995,
and February 28, 1994 were 17% and 15%, respectively.
WHEN-ISSUED SECURITIES
As described in the Prospectus, the Fund may purchase and sell Municipal Obli-
gations on a when-issued or delayed delivery basis. When-issued and delayed
delivery transactions arise when securities are purchased or sold with payment
and delivery beyond the regular settlement date. (When-issued transactions
normally settle within 15-45 days.) On such transactions the payment obliga-
tion and the interest rate are fixed at the time the buyer enters into the
commitment. The commitment to purchase securities on a when-issued or delayed
delivery basis may involve an element of risk because the value of the securi-
ties is subject to market fluctuation, no interest accrues to the purchaser
prior to settlement of the transaction, and at the time of delivery the market
value may be less than cost. At the time the Fund makes the commitment to pur-
chase a Municipal Obligation on a when issued or delayed delivery basis, it
will record the transaction and reflect the amount due and the value of the
security in determining its net asset value. Likewise, at the time the Fund
makes the commitment to sell a Municipal Obligation on a delayed delivery ba-
sis, it will record the transaction and include the proceeds to be received in
determining its net asset value; accordingly, any fluctuations in the value of
the Municipal Obligation sold pursuant to a delayed delivery commitment are
ignored in calculating net asset value so long as the commitment remains in
effect. The Fund will maintain designated readily marketable assets at least
equal in value to commitments to purchase when-issued or delayed delivery se-
curities, such assets to be segregated by the Custodian specifically for the
settlement of such commitments. The Fund will only make commitments to pur-
chase Municipal Obligations on a when-issued or delayed delivery basis with
the intention of actually acquiring the securities, but the Fund reserves the
right to sell these securities before the settlement date if it is deemed ad-
visable. If a when-issued security is sold before delivery any gain or loss
would not be tax-exempt. A Fund commonly engages in when-issued transactions
in order to purchase or sell newly-issued Municipal Obligations, and may en-
gage in delayed delivery transactions in order to manage its operations more
effectively.
5
<PAGE>
TEMPORARY INVESTMENTS
The Prospectus discusses briefly the ability of the Fund to invest a portion
of its assets in federally tax-exempt or taxable "temporary investments." Tem-
porary investments will not exceed 20% of the Fund's assets except when made
for defensive purposes. The Fund will invest only in taxable temporary invest-
ments that are either U.S. Government securities or are rated within the high-
est grade by Moody's or S&P, and mature within one year from the date of pur-
chase or carry a variable or floating rate of interest.
The Fund may invest in the following federally tax-exempt temporary invest-
ments:
Bond Anticipation Notes (BANs) are usually general obligations of state and
local governmental issuers which are sold to obtain interim financing for pro-
jects that will eventually be funded through the sale of long-term debt obli-
gations or bonds. The ability of an issuer to meet its obligations on its BANs
is primarily dependent on the issuer's access to the long-term municipal bond
market and the likelihood that the proceeds of such bond sales will be used to
pay the principal and interest on the BANs.
Tax Anticipation Notes (TANs) are issued by state and local governments to fi-
nance the current operations of such governments. Repayment is generally to be
derived from specific future tax revenues. Tax anticipation notes are usually
general obligations of the issuer. A weakness in an issuer's capacity to raise
taxes due to, among other things, a decline in its tax base or a rise in de-
linquencies, could adversely affect the issuer's ability to meet its obliga-
tions on outstanding TANs.
Revenue Anticipation Notes (RANs) are issued by governments or governmental
bodies with the expectation that future revenues from a designated source will
be used to repay the notes. In general, they also constitute general obliga-
tions of the issuer. A decline in the receipt of projected revenues, such as
anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal and
interest on RANs.
Construction Loan Notes are issued to provide construction financing for spe-
cific projects. Frequently, these notes are redeemed with funds obtained from
the Federal Housing Administration.
Bank Notes are notes issued by local government bodies and agencies as those
described above to commercial banks as evidence of borrowings. The purposes
for which the notes are issued are varied but they are frequently issued to
meet short-term working capital or capital-project needs. These notes may have
risks similar to the risks associated with TANs and RANs.
Tax-Exempt Commercial Paper (Municipal Paper) represents very short-term
unsecured, negotiable promissory notes, issued by states, municipalities and
their agencies. Payment of principal and interest on issues of municipal paper
may be made from various sources, to the extent the funds are available there-
from. Maturities of municipal paper generally will be shorter than the maturi-
ties of TANs, BANs or RANs. There is a limited secondary market for issues of
municipal paper.
6
<PAGE>
While these various types of notes as a group represent the major portion of
the tax-exempt note market, other types of notes are occasionally available in
the marketplace and the Fund may invest in such other types of notes to the ex-
tent permitted under its investment objective, policies and limitations. Such
notes may be issued for different purposes and may be secured differently from
those mentioned above.
The Fund may also invest in the following taxable temporary investments:
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 estab-
lished as instrumentalities of the United States Government to supervise and
finance certain types of activities. These agencies include, but are not lim-
ited 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 di-
rect 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 sup-
ported 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 so legally obligated.
Certificates of Deposit (CDs)--A certificate of deposit is a negotiable inter-
est bearing instrument with a specific maturity. CDs are issued by banks in ex-
change 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 one year
remaining until maturity or if they carry a variable or floating rate of inter-
est.
Repurchase Agreements--A repurchase agreement is a contractual agreement
whereby the seller of securities (U.S. Government or Municipal Obligations)
agrees to repurchase the same security at a specified price on a future date
agreed upon by the parties. The agreed upon repurchase price
7
<PAGE>
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 repur-
chase agreements with dealers, domestic banks or recognized financial institu-
tions that in the opinion of 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 un-
derlying collateral at the time the transaction is entered into always equals
or exceeds the agreed-upon repurchase price, if the value of the collateral de-
clines 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 experi-
ence delays in connection with liquidating the collateral. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the securi-
ty, realization upon the collateral by the Fund may be delayed or limited.
Nuveen Advisory will monitor the value of collateral at the time the transac-
tion is entered into and at all times subsequent during the term of the repur-
chase agreement in an effort to determine that the value always equals or ex-
ceeds 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 assets in re-
purchase agreements maturing in more than seven days.
RATINGS OF INVESTMENTS
The four highest ratings of Moody's for Municipal Obligations are "Aaa", "Aa",
"A" and "Baa". Municipal Obligations rated "Aaa" are judged to be of the "best
quality." The rating of "Aa" is assigned to Municipal Obligations which are of
"high quality by all standards," but as to which margins of protection or other
elements make long-term risks appear somewhat larger than in "Aaa" rated Munic-
ipal Obligations. The "Aaa" and "Aa" rated Municipal Obligations comprise what
are generally known as "high grade bonds." Municipal Obligations that are rated
"A" by Moody's possess many favorable investment attributes and are considered
upper medium grade obligations. Factors giving security to principal and inter-
est of "A" rated Municipal Obligations are considered adequate, but elements
may be present, which suggest a susceptibility to impairment sometime in the
future. Municipal Obligations rated "Baa" by Moody's are considered medium
grade obligations (i.e., they are neither highly protected nor poorly secured).
Such bonds lack outstanding investment characteristics and in fact have specu-
lative characteristics as well. Moody's bond rating symbols may contain numeri-
cal modifiers of a generic rating classification. The modifier 1 indicates that
the bond ranks at the high end of its category; the modifier 2 indicates a mid-
range ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its general rating category.
The four highest ratings of S&P for Municipal Obligations are "AAA", "AA", "A"
and "BBB". Municipal Obligations rated "AAA" have a strong capacity to pay
principal and interest. The rating of "AA" indicates that capacity to pay prin-
cipal and interest is very strong and such bonds differ from "AAA" issues only
in small degree. The category of "A" describes bonds which have a strong capac-
ity to pay principal and interest, although such bonds are somewhat more sus-
ceptible to the adverse effects of changes in circumstances and economic condi-
tions. The "BBB" rating is the lowest "investment grade" security rating by
S&P. Municipal Obligations rated "BBB" are regarded as
8
<PAGE>
having an adequate capacity to pay principal and interest. Whereas such bonds
normally exhibit adequate protection parameters, adverse economic conditions
are more likely to lead to a weakened capacity to pay principal and interest
for bonds in this category than for bonds in the "A" category.
The "Other Corporate Obligations" category of temporary investments are corpo-
rate (as opposed to municipal) debt obligations rated "AAA" by S&P or "Aaa" by
Moody's. Corporate debt obligations rated "AAA" by S&P have an extremely strong
capacity to pay principal and interest. The Moody's corporate debt rating of
"Aaa" is comparable to that set forth above for Municipal Obligations.
Subsequent to its purchase by the Fund, an issue may cease to be rated or its
rating may be reduced below the minimum required for purchase. Neither event
requires the elimination of such obligation from the Fund's portfolio, but
Nuveen Advisory will consider such an event in its determination of whether the
Fund should continue to hold such obligation.
MANAGEMENT
The management of the Fund, including general supervision of the duties per-
formed for the Fund under the Investment Management Agreement, is the responsi-
bility of its Board of Trustees. There are seven trustees of the Fund, two of
whom are "interested persons" (as the term "interested person" is defined in
the Investment Company Act of 1940) and five of whom are "disinterested per-
sons." The names and business addresses of the trustees and officers of the
Fund and their principal occupations and other affiliations during the past
five years are set forth below, with those trustees who are "interested per-
sons" of the Fund indicated by an asterisk.
<TABLE>
- -------------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUND DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard J. Franke* 63 Chairman of Chairman of the Board, Director and formerly
333 West Wacker Drive the Board and President of John Nuveen & Co. Incorporated;
Chicago, IL 60606 Trustee Chairman of the Board and Director, formerly
President, of Nuveen Advisory Corp.; Chairman
of the Board and Director of Nuveen Institu-
tional Advisory Corp. (since April 1990);
Certified Financial Planner.
- -------------------------------------------------------------------------------------------
Timothy R. Schwertfeger* 46 President and Executive Vice President and Director of The
333 West Wacker Drive Trustee John Nuveen Company (since March 1992) and
Chicago, IL 60606 John Nuveen & Co. Incorporated; Director of
Nuveen Advisory Corp. (since 1992) and Nuveen
Institutional Advisory Corp. (since 1992).
- -------------------------------------------------------------------------------------------
Lawrence H. Brown 60 Trustee Retired (August 1989) as Senior Vice Presi-
201 Michigan Avenue dent of The Northern Trust Company.
Highwood, IL 60040
- -------------------------------------------------------------------------------------------
Anne E. Impellizzeri 62 Trustee President and Chief Executive Officer of
3 West 29th Street Blanton-Peale, Institutes of Religion and
New York, NY 10001 Health (since December 1990); prior thereto,
Vice President of New York City Partnership
(from 1987 to 1990).
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUND DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John E. O'Toole 66 Trustee Retired (January 1994) as President of the
666 Third Avenue American Association of Advertising Agencies,
New York, NY 10017 Inc.; retired (December 1985) as Chairman of
the Board of Foote, Cone & Belding Communica-
tions, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Margaret K. Rosenheim 68 Trustee Helen Ross Professor of Social Welfare Poli-
969 East 60th Street cy, School of Social Service Administration,
Chicago, IL 60637 University of Chicago.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter R. Sawers 62 Trustee Adjunct Professor of Business and Economics,
22 The Landmark University of Dubuque, Iowa (since January
Northfield, IL 60093 1991); Adjunct Professor, Lake Forest Gradu-
ate School of Management, Lake Forest, Illi-
nois (since January 1992); prior thereto, Ex-
ecutive Director, Towers Perrin Australia
(management consultant); Chartered Financial
Analyst; Certified Management Consultant.
- ------------------------------------------------------------------------------------------------------------------------------------
Kathleen M. Flanagan 47 Vice President Vice President of John Nuveen & Co. Incorpo-
333 West Wacker Drive rated.
Chicago, IL 60606
- ------------------------------------------------------------------------------------------------------------------------------------
J. Thomas Futrell 39 Vice President Vice President of Nuveen Advisory Corp.
333 West Wacker Drive (since February 1991); prior thereto, Assis-
Chicago, IL 60606 tant Vice President of Nuveen Advisory Corp.
(from August 1988 to February 1991); Chart-
ered Financial Analyst.
- ------------------------------------------------------------------------------------------------------------------------------------
Steven J. Krupa 37 Vice President Vice President of Nuveen Advisory Corp.
333 West Wacker Drive (since October 1990); prior thereto, Vice
Chicago, IL 60606 President of John Nuveen & Co. Incorporated
(from January 1989 to October 1990).
- ------------------------------------------------------------------------------------------------------------------------------------
Anna R. Kucinskis 49 Vice President Vice President of John Nuveen & Co. Incorpo-
333 West Wacker Drive rated.
Chicago, IL 60606
- ------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin 43 Vice President Vice President (since September 1992), Assis-
333 West Wacker Drive and Assistant tant Secretary and Assistant General Counsel
Chicago, IL 60606 Secretary of John Nuveen & Co. Incorporated; Vice Pres-
ident (since May 1993) and Assistant Secre-
tary of Nuveen Advisory Corp; Vice President
(since May 1993) and Assistant Secretary
(since January 1992) of Nuveen Institutional
Advisory Corp.; Assistant Secretary of The
John Nuveen Company (since February 1993).
- ------------------------------------------------------------------------------------------------------------------------------------
O. Walter Renfftlen 55 Vice President Vice President and Controller of The John
333 West Wacker Drive and Controller Nuveen Company (since March 1992),John Nuveen
Chicago, IL 60606 & Co. Incorporated, Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp. (since
April 1990).
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas C. Spalding, Jr. 43 Vice President Vice President of Nuveen Advisory Corp. and
333 West Wacker Drive Nuveen Institutional Advisory Corp. (since
Chicago, IL 60606 April 1990); Chartered Financial Analyst.
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUND DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
H. William Stabenow 60 Vice President Vice President and Treasurer of The John
333 West Wacker Drive and Treasurer Nuveen Company (since March 1992), John
Chicago, IL 60606 Nuveen & Co. Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional Advisory Corp,
(since January 1992).
- ----------------------------------------------------------------------------------------
George P. Thermos 63 Vice President Vice President of John Nuveen & Co. Incorpo-
333 West Wacker Drive rated.
Chicago, IL 60606
- ----------------------------------------------------------------------------------------
James J. Wesolowski 44 Vice President Vice President, General Counsel and Secretary
333 West Wacker Drive and Secretary of The John Nuveen Company (since March
Chicago, IL 60606 1992), John Nuveen & Co. Incorporated, Nuveen
Advisory Corp. and Nuveen Institutional Advi-
sory Corp. (since April 1990).
- ----------------------------------------------------------------------------------------
Gifford R. Zimmerman 38 Vice President Vice President (since September 1992), Assis-
333 West Wacker Drive and Assistant tant Secretary and Assistant General Counsel
Chicago, IL 60606 Secretary of John Nuveen & Co. Incorporated; Vice Pres-
ident (since May 1993) and Assistant Secre-
tary of Nuveen Advisory Corp.; Vice President
(since May 1993) and Assistant Secretary
(since January 1992) of Nuveen Institutional
Advisory Corp.
</TABLE>
- --------------------------------------------------------------------------------
Richard J. Franke, Timothy R. Schwertfeger and Margaret K. Rosenheim serve as
members of the Executive Committee of the Board of Trustees. The Executive Com-
mittee, which meets between regular meetings of the Board of Trustees, is au-
thorized to exercise all of the powers of the Board of Trustees.
The trustees of the Fund are also directors or trustees, as the case may be, of
20 other Nuveen open-end fund portfolios and 55 closed-end funds.
The following table sets forth compensation paid by the Fund and its predeces-
sor during the fiscal year ended February 28, 1995 to each of the trustees of
the Fund. The Fund has no retirement or pension plans. The officers and trust-
ees affiliated with Nuveen serve without any compensation from the Fund.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM FUND
COMPENSATION AND FUND COMPLEX
NAME OF TRUSTEE FROM THE FUND PAID TO TRUSTEES
- --------------------------------------------------------------------------------
<S> <C> <C>
Richard J. Franke.............................. $ 0 $ 0
Timothy R. Schwertfeger........................ 0 0
Lawrence H. Brown.............................. 4,839 56,500
Anne E. Impellizzeri........................... 3,785 48,750
John E. O'Toole................................ 4,839 56,000
Margaret K. Rosenheim.......................... 6,509(1) 64,404(2)
Peter R. Sawers................................ 4,839 56,000
</TABLE>
- --------
(1) Includes $270 in interest earned on deferred compensation from prior years.
(2) Includes $1,404 in interest earned on deferred compensation from prior
years.
11
<PAGE>
Each trustee who is not affiliated with Nuveen or Nuveen Advisory receives a
$45,000 annual retainer for serving as a director or trustee of all funds for
which Nuveen Advisory serves as investment adviser and a $1,000 fee per day
plus expenses for attendance at all meetings held on a day on which a regularly
scheduled Board meeting is held, a $1,000 fee per day plus expenses for atten-
dance in person or a $500 fee per day plus expenses for attendance by telephone
at a meeting held on a day on which no regular Board meeting is held, and a
$250 fee per day plus expenses for attendance in person or by telephone at a
meeting of the Executive Committee held solely to declare dividends. The annual
retainer, fees and expenses are allocated among the funds for which Nuveen Ad-
visory serves as investment adviser on the basis of relative net asset sizes.
The Fund requires no employees other than its officers, all of whom are compen-
sated by Nuveen.
On April 6, 1995, the officers and trustees of the Fund as a group owned less
than 1% of the outstanding shares of the Fund. No person owned as much as 5% of
the outstanding shares of the Fund on that date.
INVESTMENT ADVISER AND INVESTMENT MANAGEMENT AGREEMENT
Nuveen Advisory Corp. acts as investment adviser for and manages the investment
and reinvestment of the assets of the Fund. Nuveen Advisory also administers
the Fund's business affairs, provides office facilities and equipment and cer-
tain clerical, bookkeeping and administrative services, and permits any of its
officers or employees to serve without compensation as directors or officers of
the Fund if elected to such positions. See "Management of the Fund" in the Pro-
spectus.
Pursuant to an investment management agreement between Nuveen Advisory and the
Fund, the Fund has agreed to pay an annual management fee at the rates set
forth below:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET
VALUE MANAGEMENT FEE
- ------------------------------------------
<S> <C>
For the first $125 million .5000 of 1%
For the next $125 million .4875 of 1%
For the next $250 million .4750 of 1%
For the next $500 million .4625 of 1%
For the next $1 billion .4500 of 1%
For assets over $2 billion .4250 of 1%
</TABLE>
Nuveen Advisory will waive all or a portion of its management fee or reimburse
certain expenses of the Fund in order to prevent total operating expenses (in-
cluding Nuveen Advisory's fee, but excluding interest, taxes, fees incurred in
acquiring and disposing of portfolio securities, any asset-based distribution
or service fees and, to the extent permitted, extraordinary expenses) in any
fiscal year from exceeding .75 of 1% of the average daily net asset value of
any class of shares of the Fund. For the fiscal years ended February 28, 1995,
February 28, 1994, and February 28, 1993, the Fund paid net management fees to
Nuveen Advisory of $11,932,164, $11,645,399 and $9,598,518 respectively. As
discussed in the Prospectus, subject to the expense limitations of the Invest-
ment Management Agreement, the Fund is responsible for payment of certain of
the costs and expenses of its operations.
12
<PAGE>
Nuveen Advisory is a wholly owned subsidiary of John Nuveen & Co. Incorporated
("Nuveen"), the Fund's principal underwriter. Founded in 1898, Nuveen is the
oldest and largest investment banking firm specializing in the underwriting
and distribution of tax-exempt securities and maintains the largest research
department in the investment banking community devoted exclusively to the
analysis of municipal securities. In 1961, Nuveen began sponsoring the Nuveen
Tax-Exempt Unit Trust and since that time has issued more than $34 billion in
tax-exempt unit trusts, including over $12 billion in tax-exempt insured unit
trusts. In addition, Nuveen open-end and closed-end funds held approximately
$30 billion in tax-exempt securities under management as of the date of this
Statement. Over 1,000,000 individuals have invested to date in Nuveen's tax-
exempt funds and trusts. Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 75% 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.
Nuveen Advisory's portfolio managers call upon the resources of Nuveen's Re-
search Department, the largest in the investment banking industry devoted ex-
clusively to tax-exempt securities. Nuveen's Research Department was selected
in 1994 by Research & Ratings Review, a municipal industry publication, as one
of the top four research teams in the municipal industry, based on an exten-
sive industry-wide poll of more than 1,000 portfolio managers, department
heads and bond buyers. The Nuveen Research Department reviews more than $100
billion in tax-exempt bonds every year.
The Funds, the other Nuveen funds, the Adviser, and other related entities
have adopted a code of ethics which essentially prohibits all Nuveen fund man-
agement personnel, including Nuveen fund portfolio managers, from engaging in
personal investments which compete or interfere with, or attempt to take ad-
vantage of, a Fund's anticipated or actual portfolio transactions, and is de-
signed to assure that the interests of Fund shareholders are placed before the
interests of Nuveen personnel in connection with personal investment transac-
tions.
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 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 ob-
tained elsewhere. Portfolio securities will not be purchased from Nuveen or
its affiliates except in compliance with the Investment Company Act of 1940.
The Fund since its inception has effected all portfolio transactions on a
principal (as opposed to an agency) basis and, accordingly, has not paid any
brokerage commissions. Purchases from underwriters will include a commission
or concession paid by the issuer to the underwriter, and purchases from deal-
ers 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
13
<PAGE>
research information (primarily credit analyses of issuers and general eco-
nomic 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 Ad-
visory 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 ac-
counts 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 al-
locations 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 commit-
ments 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 the 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 ex-
posure 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 Munici-
pal Obligations purchased by the Fund, the amount of Municipal Obligations
which may be purchased in any one issue and the assets of the Fund which may
be invested in a particular 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 directors who are not inter-
ested 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 United
States Trust Company of New York, the Fund's custodian, as of 4:00 p.m. east-
ern time on each day on which the New York Stock Exchange (the "Exchange") is
normally open for trading. The Exchange is not open for trading on New Year's
Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of a
class of shares will be computed by dividing the value of the Fund's assets
attributable to the class, less the liabilities attributable to the class, by
the number of shares of the class outstanding.
14
<PAGE>
In determining net asset value for the Fund, the Fund's custodian utilizes the
valuations of portfolio securities furnished by a pricing service approved by
the directors. The pricing service values portfolio securities at the mean be-
tween the quoted bid and asked price or the yield equivalent when quotations
are readily available. Securities for which quotations are not readily avail-
able (which constitute a majority of the securities held by the Fund) are val-
ued at fair value as determined by the pricing service using methods which in-
clude consideration of the following: yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating; indications as
to value from securities representatives; and general market conditions. The
pricing service may employ electronic data processing techniques and/or a ma-
trix system to determine valuations. The procedures of the pricing service and
its valuations are reviewed by the officers of the Fund under the general su-
pervision of the Board of Trustees.
TAX MATTERS
FEDERAL INCOME TAX MATTERS
The following discussion of federal income tax matters is based upon the advice
of Fried, Frank, Harris, Shriver & Jacobson, Washington, D.C., counsel to the
Fund.
As described in the Prospectus, the Fund intends to qualify under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code") for tax treatment
as a regulated investment company. In order to qualify as a regulated invest-
ment company, the Fund 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 invest-
ing in such stock or securities (the "90% gross income test"). Second, the Fund
must derive less than 30% of its annual gross income from the sale or other
disposition of any of the following which was held for less than three months:
(i) stock or securities and (ii) certain options, futures, or forward contracts
(the "short-short test"). Third, the Fund must diversify its holdings so that,
at the close of each quarter of its taxable year, (i) at least 50% of the value
of its total assets is comprised of cash, cash items, United States Government
securities, securities of other regulated investment companies and other secu-
rities limited in respect of any one issuer to an amount not greater in value
than 5% of the value of a 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 regu-
lated investment companies) or two or more issuers controlled by the Fund and
engaged in the same, similar or related trades or businesses.
15
<PAGE>
As a regulated investment company, the Fund will not be subject to federal in-
come tax in any taxable year for which it distributes at least 90% of its "in-
vestment company taxable income" (which includes dividends, taxable interest,
taxable original issue discount and market discount income, income from securi-
ties 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 at least 90% of the excess of its
gross tax-exempt interest income over certain disallowed deductions ("net tax-
exempt interest"). The Fund may retain for investment its net capital gain
(which consists of the excess of its net long-term capital gain over its short-
term capital loss). However, if the Fund retains any net capital gain or any
investment company taxable income, it will be subject to tax at regular corpo-
rate rates on the amount retained. If the Fund retains any capital gain, such
Fund may designate the retained amount as undistributed capital gains in a no-
tice to its shareholders who, if subject to federal income tax purposes on
long-term capital gains, (i) will be required to include in income for federal
income tax purposes, as long-term capital gain, their shares of such undistrib-
uted amount, and (ii) will be entitled to credit their proportionate shares of
the tax paid by the Fund against their federal income tax liabilities if any,
and to claim refunds to the extent the credit exceeds such liabilities. For
federal income tax purposes, the tax basis of shares owned by a shareholder of
the Fund will be increased by an amount equal under current law to 65% of the
amount of undistributed capital gains included in the shareholder's gross in-
come. The Fund intends to distribute at least annually to its shareholders all
or substantially all of its net tax-exempt interest and any investment company
taxable income and net capital gain.
Treasury regulations permit a regulated investment company, in determining its
investment company taxable income and net capital gain, i.e., the excess of net
long-term capital gain over net short-term capital loss for any taxable year,
to elect (unless it has made a taxable year election for excise tax purposes as
discussed below) to treat all or part of any net capital loss, any net long-
term capital loss or any net foreign currency loss incurred after October 31 as
if they had been incurred in the succeeding year.
The Fund also intends to satisfy conditions (including requirements as to the
proportion of its assets invested in Municipal Obligations) that will enable it
to designate distributions from the interest income generated by investments in
Municipal Obligations, which is exempt from regular federal income tax when re-
ceived by the Fund, as exempt-interest dividends. Shareholders receiving ex-
empt-interest dividends will not be subject to regular federal income tax on
the amount of such dividends. Insurance proceeds received by the Fund under any
insurance policies in respect of scheduled interest payments on defaulted Mu-
nicipal Obligations will be excludable from federal gross income under Section
103(a) of the Code. In the case of non-appropriation by a political subdivi-
sion, however, there can be no assurance that payments made by the insurer rep-
resenting interest on "non-appropriation" lease obligations will be excludable
from gross income for federal income tax purposes. See "Fundamental Policies
and Investment Portfolio; Portfolio Securities."
Distributions by the Fund of net interest received from certain taxable tempo-
rary investments (such as certificates of deposit, commercial paper and obliga-
tions of the U.S. Government, its agencies and instrumentalities) and net
short-term capital gains realized by the Fund, if any, will be taxable
16
<PAGE>
to shareholders as ordinary income whether received in cash or additional
shares./1/ If the Fund purchases a Municipal Obligation at a market discount,
any gain realized by the Fund upon sale or redemption of the Municipal Obliga-
tion will be treated as taxable interest income to the extent such gain does
not exceed the market discount, and any gain realized in excess of the market
discount will be treated as capital gains. Any net long-term capital gains re-
alized 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 ordinary income dividends, exempt-interest div-
idends, or capital gain dividends 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.
If any of the Funds engages in hedging transactions involving financial futures
and options, these transactions will be subject to special tax rules, the ef-
fect of which may be to accelerate income to a Fund, defer a Fund's losses,
cause adjustments in the holding periods of a Fund's securities, convert long-
term capital gains into short-term capital gains and convert short-term capital
losses into long-term capital losses. These rules could therefore affect the
amount, timing and character of distributions to shareholders.
Because the taxable portion of the Fund's investment income consists primarily
of interest, none of its dividends, whether or not treated as exempt-interest
dividends, is expected to qualify under the Internal Revenue Code for the divi-
dends received deductions for corporations.
Prior to purchasing shares in the Fund, the impact of dividends or distribu-
tions which are expected to be or have been declared, but not paid, should be
carefully considered. Any dividend or distribution declared shortly after a
purchase of such shares prior to the record date will have the effect of reduc-
ing the per share net asset value by the per share amount of the dividend or
distribution.
Although dividends generally will be treated as distributed when paid, divi-
dends declared in October, November or December, payable to shareholders of
record on a specified date in one of those months and paid during the 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 normally will result in
capital gain or loss to the shareholders. Generally, a shareholder's gain or
loss will be long-term gain or loss if the shares have been held for more than
one year. Present law taxes both long- and short-term capital gains of corpora-
tions at the rates applicable to ordinary income. For non-corporate taxpayers,
however, net
capital gains (i.e., the excess of net long-term capital gain over net short-
term capital loss) will be taxed at a maximum marginal rate of 28%, while
short-term capital gains and other ordinary income will be taxed at a maximum
marginal rate of 39.6%. Because of the limitations on itemized deductions and
the deduction for personal exemptions applicable to higher income taxpayers,
the effective tax rate may be higher in certain circumstances.
- --------
/1/If the Fund has both tax-exempt and taxable interest income, it will use the
"actual earned method" for determining the designed percentage that is taxable
income and designate the use of such method within 60 days after the end of the
Fund's taxable year. Under this method the ratio of (a) taxable income earned
during the period for which a distribution was made, to (b) total income earned
during the period, determines the percentage of the distribution designated
taxable. The percentage of income, if any, designated as taxable under this
method will vary from distribution to distribution.
17
<PAGE>
All or a portion of a sales load paid in purchasing shares of a Fund cannot be
taken into account for purposes of determining gain or loss on the redemption
or exchange of such shares within 90 days after their purchase to the extent
shares of a Fund or another fund are subsequently acquired without payment of
a sales load pursuant to the reinvestment or exchange privilege. Any disre-
garded portion of such load will result in an increase in the shareholder's
tax basis in the shares subsequently acquired. Moreover, losses recognized by
a shareholder on the redemption or exchange of shares of the Fund held for six
months or less are disallowed to the extent of any distribution of exempt-in-
terest dividends received with respect to such shares and, if not disallowed,
such losses are treated as long-term capital losses to the extent of any dis-
tributions of long-term capital gains made with respect to such shares. In ad-
dition, no loss will be allowed on the redemption or exchange of shares of the
Fund if the shareholder purchases other shares of the Fund (whether through
reinvestment of distributions or otherwise) or the Shareholder acquires or en-
ters into a contract or option to acquire securities that are substantially
identical to shares of the Fund within a period of 61 days beginning 30 days
before and ending 30 days after such redemption or exchange. If disallowed,
the loss will be reflected in an adjustment to the basis of the shares ac-
quired.
It may not be advantageous from a tax perspective for shareholders to redeem
or exchange shares after tax-exempt income has accrued but before the record
date for the exempt-interest dividend representing the distribution of such
income. Because such accrued tax-exempt income is included in the net asset
value per share (which equals the redemption or exchange value), such a re-
demption could result in treatment of the portion of the sales or redemption
proceeds equal to the accrued tax-exempt interest as taxable gain (to the ex-
tent the redemption or exchange price exceeds the shareholder's tax basis in
the shares disposed of) rather than tax-exempt interest.
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 com-
puted 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 pur-
poses 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 distribu-
tions 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 (other than inter-
est income from Municipal Obligations), and distributions to its shareholders
would be taxable to shareholders as ordinary dividend income for federal in-
come tax purposes to the extent of the Fund's available earnings and profits.
Among the requirements that the Fund must meet in order to qualify under
Subchapter M in any year is that less than 30% of its gross income must be de-
rived from the sale or other disposition of securities and certain other as-
sets held for less than three months.
18
<PAGE>
Because the Fund may invest in private activity bonds, the interest on which is
not federally tax-exempt to persons who are "substantial users" of the facili-
ties financed by such bonds or "related persons" of such "substantial users,"
the Fund may not be an appropriate investment for shareholders who are consid-
ered either a "substantial user" or a "related person" within the meaning of
the Code. For additional information, investors should consult their tax advis-
ers before investing in the Fund.
Federal tax law imposes an alternative minimum tax with respect to both corpo-
rations and individuals. Interest on certain Municipal Obligations, such as
bonds issued to make loans for housing purposes or to private entities (but not
for certain tax-exempt organizations such as universities, and non-profit hos-
pitals) is included as an item of tax preference in determining the amount of a
taxpayer's alternative minimum taxable income. To the extent that the Fund re-
ceives income from Municipal Obligations subject to the alternative minimum
tax, a portion of the dividends paid by it, although otherwise exempt from fed-
eral income tax, will be taxable to shareholders to the extent that their tax
liability is determined under the alternative minimum tax regime. The Fund will
annually supply shareholders with a report indicating the percentage of Fund
income attributable to Municipal Obligations subject to the federal alternative
minimum tax.
In addition, the alternative minimum taxable income for corporations is in-
creased by 75% of the difference between an alternative measure of income ("ad-
justed current earnings") and the amount otherwise determined to be the alter-
native minimum taxable income. Interest on all Municipal Obligations, and
therefore all distributions by the Fund that would otherwise be tax exempt, is
included in calculating a corporation's adjusted current earnings.
Tax-exempt income, including exempt-interest dividends paid by the Fund, will
be added to the taxable income of individuals receiving social security or
railroad retirement benefits in determining whether a portion of that benefit
will be subject to federal income tax.
The Code provides that interest on indebtedness incurred or continued to pur-
chase or carry shares of the Fund is not deductible. Under rules used by the
IRS for determining when borrowed funds are considered used for the purpose of
purchasing or carrying particular assets, the purchase of shares of the Fund
may be considered to have been made with borrowed funds even though such funds
are not directly traceable to the purchase of shares.
The Fund is required in certain circumstances to withhold 31% of taxable divi-
dends and certain other payments paid to non-corporate holders of shares who
have not furnished to the Fund their correct taxpayer identification number (in
the case of individuals, their social security number) and certain certifica-
tions, or who are otherwise subject to back-up 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 sharehold-
ers. For complete provisions, reference should be made to the pertinent Code
sections and Treasury Regulations. The Code and Treasury Regulations are sub-
ject 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 sharehold-
ers.
19
<PAGE>
PERFORMANCE INFORMATION
As explained in the Prospectus, the historical investment performance of the
Fund may be shown in the form of "yield," "taxable equivalent yield," "average
annual total return," "cumulative total return" and "taxable equivalent total
return" figures, each of which will be calculated separately for each class of
shares. Information is presented only for Class R Shares since no Class A
Shares or Class C Shares were outstanding during the periods shown below.
In accordance with a standardized method prescribed by rules of the Securities
and Exchange Commission ("SEC"), yield is computed by dividing the net invest-
ment income per share earned during the specified one month or 30-day period by
the maximum offering price per share on the last day of the period, according
to the following formula:
<TABLE>
<C> <C> <C> <C> <S>
Yield = 2[(a-b+1)/6/-1]
cd
</TABLE>
In the above formula, a = dividends and interest earned during the period; b =
expenses accrued for the period (net of reimbursements); c = the average daily
number of shares outstanding during the period that were entitled to receive
dividends; and d = the maximum offering price per share on the last day of the
period. In all cases, the maximum offering price includes the maximum sales
charge of 4.75% which was in effect for the Fund's Class R Shares during the
periods shown.
In computing yield, the Fund follows certain standardized accounting practices
specified by SEC rules. These practices are not necessarily consistent with
those that the Fund uses to prepare its annual and interim financial statements
in conformity with generally accepted accounting principles. Thus, yield may
not equal the income paid to shareholders or the income reported in the Fund's
financial statements.
Taxable equivalent yield is computed by dividing that portion of the yield
which is tax-exempt by 1 minus the stated federal income tax rate and adding
the result to that portion, if any, of the yield that is not tax exempt. Based
upon (1) the 1994 maximum marginal federal income tax rate of 39.6% and (2) the
previously quoted yield for the 30-day period ended February 28, 1995, the tax-
able equivalent yield of the Class R Shares of the Fund for that period was
8.64%.
For additional information concerning taxable equivalent yields, see the Tax-
able Equivalent Yield Tables in the Prospectus.
The Fund may from time to time in its advertising and sales materials report a
quotation of the current distribution rate. The distribution rate represents a
measure of dividends distributed for a specified period. Distribution rate is
computed by dividing the most recent monthly tax-free income dividend per
share, multiplying it by 12 to annualize it, and dividing by the appropriate
price per share (e.g., net asset value for purchases to be made without a load
such as reinvestments from Nuveen UITs, or the maximum public offering price).
The distribution rate differs from yield and total return and therefore is not
intended to be a complete measure of performance. Distribution rate may some-
times be higher than yield because it may not include the effect of amortiza-
tion of
bond premiums to the extent such premiums arise after the bonds were purchased.
The distribution
20
<PAGE>
rate as of February 28, 1995, based on maximum public offering price then in
effect for the Class R Shares of the Fund was 5.46%.
Average annual total return quotation is computed in accordance with a stan-
dardized method prescribed by SEC rules. The average annual total return for a
specific period is found by taking a hypothetical, $1,000 investment ("initial
investment") in Fund shares on the first day of the period, reducing the amount
to reflect the maximum sales charge, and computing the "redeemable value" of
that investment at the end of the period. The redeemable value is then divided
by the initial investment, and this quotient is taken to the Nth root (N repre-
senting the number of years in the period) and 1 is subtracted from the result,
which is then expressed as a percentage. The calculation assumes that all in-
come and capital gains distributions have been reinvested in Fund shares at net
asset value on the reinvestment dates during the period. The Fund's average an-
nual return figures, including the effect of the maximum sales charge then in
effect for the Class R Shares, for the one-year, five-year and ten-year periods
ended February 28, 1995, and for the period from the Fund's inception on Novem-
ber 29, 1976, through February 28, 1995, were (1.32)%, 6.48%, 9.10% and 6.98%,
respectively.
Calculation of cumulative total return is not subject to a prescribed formula.
Cumulative total return for a specific period is calculated by first taking a
hypothetical initial investment in Fund shares on the first day of the period,
deducting (in some cases) the maximum sales charge, and computing the "redeem-
able value" of that investment at the end of the period. The cumulative total
return percentage is then determined by subtracting the initial investment from
the redeemable value and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
and capital gains distributions by the Fund have been reinvested at net asset
value on the reinvestment dates during the period. Cumulative total return may
also be shown as the increased dollar value of the hypothetical investment over
the period. Cumulative total return calculations that do not include the effect
of the sales charge would be reduced if such charge were included. The cumula-
tive total return, including the effect of the maximum sales charge then in ef-
fect for the Class R Shares, for the one-year, five-year and ten-year periods
ended February 28, 1995, and for the period from the Fund's inception on Novem-
ber 29, 1976, through February 28, 1995, were (1.32)%, 36.86%, 139.02% and
242.21%, respectively.
Calculation of taxable equivalent total return is also not subject to a pre-
scribed formula. Taxable equivalent total return for a specific period is cal-
culated by first taking a hypothetical initial investment in Fund shares on the
first day of the period, computing the total return for each calendar year in
the period in the manner described above, and increasing the total return for
each such calendar year by the amount of additional income that a taxable fund
would need to have generated to equal the income on an after-tax basis, at a
specified income tax rate (usually the highest marginal federal tax rate), cal-
culated as described above under the discussion of "taxable equivalent yield."
The resulting amount for the calendar year is then divided by the initial in-
vestment amount to arrive at a "taxable equivalent total return factor" for the
calendar year. The taxable equivalent total return factors for all the calendar
years are then multiplied together and the result is then annualized by taking
its Nth root (N representing the number of years in the period) and
subtracting 1, which provides a taxable equivalent total return expressed as a
percentage. Using
21
<PAGE>
the 39.6% maximum marginal federal tax rate for 1995, the annualized taxable
equivalent total returns for the Fund's Class R Shares for the one-year, five-
year and ten-year periods ended February 28, 1995, were as follows:
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED
FEBRUARY 28, 1995 FEBRUARY 28, 1995 FEBRUARY 28, 1995
- -------------------------------- ---------------------------------- -----------------------------------
<S> <C> <C>
WITH MAXIMUM WITH MAXIMUM WITH MAXIMUM
4.75% SALES CHARGE AT NET 4.75% SALES CHARGE AT NET 4.75% SALES CHARGE AT NET
THEN IN EFFECT ASSET VALUE THEN IN EFFECT ASSET VALUE THEN IN EFFECT ASSET VALUE
- -------------------------------- ---------------------------------- -----------------------------------
2.22% 7.31% 10.53% 11.61% 13.50% 14.05%
</TABLE>
From time to time, the Fund may compare its risk-adjusted performance with
other investments that may provide different levels of risk and return. For
example, the Fund may compare its risk level, as measured by the variability
of its periodic returns, or its RISK-ADJUSTED TOTAL RETURN, with those of
other funds or groups of funds. Risk-adjusted total return would be calculated
by adjusting each investment's total return to account for the risk level of
the investment.
The Fund may also compare its TAX-ADJUSTED TOTAL RETURN with that of other
funds or groups of funds. This measure would take into account the tax-exempt
nature of exempt-interest dividends and the payment of income taxes on a
fund's distributions of net realized capital gains and ordinary income.
The risk level for a class of shares of the Fund, and any of the other invest-
ments used for comparison, would be evaluated by measuring the variability of
the investment's return, as indicated by the standard deviation of the invest-
ment's monthly returns over a specified measurement period (e.g., two years).
An investment with a higher standard deviation of monthly returns would indi-
cate that a fund had greater price variability, and therefore greater risk,
than an investment with a lower standard deviation. The standard deviation of
monthly returns for the two years ended February 28, 1995, for the Class R
Shares of the Fund, was 1.30%.
THE RISK-ADJUSTED TOTAL RETURN for a class of shares of the Fund and for other
investments over a specified period would be evaluated by dividing (a) the re-
mainder of the investment's annualized two-year total return minus the
annualized total return of an investment in short-term tax-exempt
securities (essentially a risk-free return) over that period, by (b) the stan-
dard deviation of the investment's monthly returns for the period. This ratio
is sometimes referred to as the "Sharpe measure" of return. An investment with
a higher Sharpe measure would be regarded as producing a higher return for the
amount of risk assumed during the measurement period than an investment with a
lower Sharpe measure. The Sharpe measure, for the two-year period ended Febru-
ary 28, 1995, for the Class R Shares of the Fund, was .77%.
Class A Shares of the Fund are sold at net asset value plus a current maximum
sales charge of 4.50% of the offering price. This current maximum sales charge
will typically be used for purposes of calculating performance figures even
though the maximum sales charge may have been different for portion of the
measurement period. Yield, returns and net asset value of each class of shares
of the Fund will fluctuate. Factors affecting performance include general mar-
ket conditions, operating expenses and investment management. Any additional
fees charged by a securities representative
22
<PAGE>
or other financial services firm would reduce returns described in this sec-
tion. Shares of the Fund are redeemable at net asset value, which may be more
or less than original cost.
In reports or other communications to shareholders or in advertising and sales
literature, the Fund may also compare its performance with that of: (1) the
Consumer Price Index or various unmanaged bond indexes such as the Lehman
Brothers Municipal Bond Index and the Salomon Brothers High Grade Corporate
Bond Index and (2) other fixed income or municipal bond mutual funds or mutual
fund indexes as reported by Lipper Analytical Services, Inc. ("Lipper"), Morn-
ingstar, Inc. ("Morningstar"), Wiesenberger Investment Companies Service
("Wiesenberger") and CDA Investment Technologies, Inc. ("CDA") or similar in-
dependent services which monitor the performance of mutual funds, or other in-
dustry or financial publications such as Barron's, Changing Times, Forbes and
Money Magazine. Performance comparisons by these indexes, services or publica-
tions may rank mutual funds over different periods of time by means of aggre-
gate, average, year-by-year, or other types of total return and performance
figures. Any given performance quotation or performance comparison should not
be considered as representative of the performance of the Fund for any future
period.
There are differences and similarities between the investments which the Fund
may purchase and the investments measured by the indexes and reporting serv-
ices which are described herein. The Consumer Price Index is generally consid-
ered to be a measure of inflation. The CDA Mutual Fund-Municipal Bond Index is
a weighted performance average of other mutual funds with a federally tax-ex-
empt income objective. The Salomon Brothers High Grade Corporate Bond Index is
an unmanaged index that generally represents the performance of high grade
long-term taxable bonds during various market conditions. The Lehman Brothers
Municipal Bond Index is an unmanaged index that generally represents the per-
formance of high grade intermediate and long-term municipal bonds during vari-
ous market conditions. Lipper, Morningstar, Wiesenberger and CDA are widely
recognized mutual fund reporting services whose performance calculations are
based upon changes in net asset value with all dividends reinvested and which
do not include the effect of any sales charges. The market prices and yields
of taxable and tax-exempt bonds will fluctuate. The Fund primarily invests in
investment grade Municipal Obligations in pursuing its objective of as high a
level of current interest income which is exempt from federal income tax as is
consistent, in the view of the Fund's management, with preservation of capi-
tal.
The Fund may also compare its taxable equivalent total return performance to
the total return performance of taxable income funds such as treasury securi-
ties funds, corporate bond funds (either investment grade or high yield), or
Ginnie Mae funds. These types of funds, because of the character of their un-
derlying securities, differ from municipal bond funds in several respects. The
susceptibility of the price of treasury bonds to credit risk is far less than
that of municipal bonds, but the price of treasury bonds tends to be slightly
more susceptible to change resulting from changes in market interest rates.
The susceptibility of the price of investment grade corporate bonds and munic-
ipal bonds to market interest rate changes and general credit changes is simi-
lar. High yield bonds are subject to a greater degree of price volatility than
municipal bonds resulting from changes in market interest rates and are par-
ticularly susceptible to volatility from credit changes. Ginnie Mae bonds are
generally subject to less price volatility than municipal bonds from
23
<PAGE>
credit concerns, due primarily to the fact that the timely payment of monthly
installments of principal and interest are backed by the full faith and credit
of the U.S. Government, but Ginnie Maes of equivalent coupon and maturity are
generally more susceptible to price volatility resulting from market interest
rate changes. In addition, the volatility of Ginnie Mae bonds due to changes in
market interest rates may differ from municipal bonds of comparable coupon and
maturity because bonds of the sensitivity of Ginnie Mae prepayment experience
to change in interest rates.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION OF FUND SHARES
As described in the Prospectus, the Fund has adopted a Flexible Sales Charge
Program which provides you with alternative ways of purchasing Fund shares
based upon your individual investment needs and preferences. You may purchase
Class A Shares at a price equal to their net asset value plus an up-front sales
charge. For information regarding the up-front sales charge on Class A shares,
see the table under "How to Buy Fund Shares" of the Prospectus. Set forth is an
example of the method of computing the offering price of the Class A shares of
the Fund. The example assumes a purchase on February 28, 1995 of Class A shares
from the Fund aggregating less than $50,000 subject to the schedule of sales
charges set forth in the Prospectus at a price based upon the net asset value
of the Class A shares.
<TABLE>
<S> <C>
Net Asset Value per share......................................... $9.280
Per Share Sales Charge--4.50% of public offering price (4.71% of
net asset value per share)....................................... $ .437
Per Share Offering Price to the Public............................ $9.717
</TABLE>
You may purchase Class C Shares without any up-front sales charge at a price
equal to their net asset value, but subject to an annual distribution fee de-
signed to compensate Authorized Dealers over time for the sale of Fund shares.
Class C Shares automatically convert to Class A Shares six years after pur-
chase. Both Class A Shares and Class C Shares are subject to annual service
fees, which are used to compensate Authorized Dealers for providing you with
ongoing financial advice and other services. Under the Flexible Sales Charge
Program, all Fund shares outstanding as of June 13 1995, have been designated
as Class R Shares. Class R Shares are available for purchase at a price equal
to their net asset value only under certain limited circumstances, or by speci-
fied investors, as described herein.
Each class of shares represents an interest in the same portfolio of invest-
ments. Each class of shares is identical in all respects except that each class
bears its own class expenses, including administration and distribution ex-
penses, and each class has exclusive voting rights with respect to any distri-
bution or service plan applicable to its shares. In addition, the Class C
Shares are subject to a conversion feature, as described below. 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 classes of shares.
24
<PAGE>
The expenses to be borne by specific classes of shares may include (i) transfer
agency fees attributable to a specific class of shares, (ii) printing and post-
age expenses related to preparing and distributing materials such as share-
holder reports, prospectuses and proxy statements to current shareholders of a
specific class of shares, (iii) Securities and Exchange Commission ("SEC") and
state securities registration fees incurred by a specific class of shares, (iv)
the expense of administrative personnel and services required to support the
shareholders of a specific class of shares, (vi) litigation or other legal ex-
penses relating to a specific class of shares, (vi) directors' fees or expenses
incurred as a result of issues relating to a specific class of shares, (vii)
accounting expenses relating to a specific class of shares and (viii) any addi-
tional incremental expenses subsequently identified and determined to be prop-
erly allocated to one or more classes of shares that shall be approved by the
SEC pursuant to an amended exemptive order.
The Fund has special purchase programs under which certain persons may purchase
Class A Shares at reduced sales charges. One such program is available to mem-
bers of a "qualified group." An individual who is a member of a "qualified
group" may purchase Class A Shares of the Fund (or any other Nuveen Fund with
respect to which a sales charge is imposed), at the reduced sales charge appli-
cable to the group taken as whole. A "qualified group" is one which (i) has
been in existence for more than six months; (ii) has a purpose other than in-
vestment; (iii) has five or more participating members; (iv) has agreed to in-
clude sales literature and other materials related to the Fund in publications
and mailings to members; (v) has agreed to have its group administrator submit
a single bulk order and make payment with a single remittance for all invest-
ments in the Fund during each investment period by all participants who choose
to invest in the Fund; and (vi) has agreed to provide the Fund's transfer agent
with appropriate backup data for each participant of the group in a format
fully compatible with the transfer agent's processing system.
The "amount" of a share purchase by a participant in a group purchase program
for purposes of determining the applicable sales charge is (i) the aggregate
value of all shares of the Fund (and all other Nuveen Funds with respect to
which a sales charge is imposed) currently held by participants of the group,
plus (ii) the amount of shares currently being purchased.
The Fund may encourage registered representatives and their firms to help ap-
portion their assets among bonds, stocks and cash, and may seek to participate
in programs that recommend a portion of their assets be invested in tax-free,
fixed income securities.
To help advisers and investors better understand and most efficiently use the
Fund to reach their investment goals, the Fund may advertise and create spe-
cific investment programs and systems. For example, this may include informa-
tion on how to use the Fund to accumulate assets for future education needs or
periodic payments such as insurance premiums. The Fund may produce software or
additional sales literature to promote the advantages of using the Fund to meet
these and other specific investor needs.
Exchanges of shares of the Fund for shares of a Nuveen money market fund may be
made on days when both funds calculate a net asset value and make shares avail-
able for public purchase. Shares of the Nuveen money market funds may be pur-
chased on days on which the Federal Reserve Bank
25
<PAGE>
of Boston is normally open for business. In addition to the holidays observed
by the Fund, the Nuveen money market funds observe and will not make fund
shares available for purchase on the following holidays: Martin Luther King's
Birthday, Columbus Day and Veterans Day.
For more information on the procedure for purchasing shares of the Fund and on
the special purchase programs available thereunder, see "How to Buy Fund
Shares" in the Prospectus.
Nuveen serves as the principal underwriter of the shares of the Fund pursuant
to a "best efforts" arrangement as provided by a distribution agreement with
the Nuveen Municipal Bond Fund, Inc., dated January 2, 1990, and assigned to
the Fund effective June 13, 1995 ("Distribution Agreement"). Pursuant to the
Distribution Agreement, the Fund appointed Nuveen to be its agent for the dis-
tribution of the Fund's shares on a continuous offering basis. Nuveen sells
shares to or through brokers, dealers, banks or other qualified financial in-
termediaries (collectively referred to as "Dealers"), or others, in a manner
consistent with the then effective registration statement of the Fund. Pursuant
to the Distribution Agreement, Nuveen, at its own expense, finances certain ac-
tivities incident to the sale and distribution of the Fund's shares, including
printing and distributing of prospectuses and statements of additional informa-
tion to other than existing shareholders, the printing and distributing of
sales literature, advertising and payment of compensation and giving of conces-
sions to dealers. Nuveen receives for its services the excess, if any, of the
sales price of the Fund's shares sold with an up-front sales charge less the
net asset value of those shares, and reallows a majority or all of such amounts
to the Dealers who sold the shares; Nuveen may act as such a Dealer. Nuveen
also receives compensation pursuant to a distribution plan adopted by the Fund
pursuant to Rule 12b-1 and described herein under "Distribution and Service
Plan." Nuveen receives any CDSCs imposed on redemptions of Class C Shares re-
deemed within 12 months of purchase, but any such amounts as to which a rein-
statement privilege is not exercised are set off against and reduce amounts
otherwise payable to Nuveen pursuant to the distribution plan.
The aggregate amount of underwriting commissions with respect to the sale of
Fund shares and the amount thereof retained by Nuveen for the Fund's fiscal
years ended February 28, 1995, 1994 and 1993 were $2,248, $467; $5,703, $1,093;
and $5,938, $986, respectively. All figures are to the nearest thousand.
DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the In-
vestment Company Act of 1940, which provides that Class C Shares will be sub-
ject to an annual distribution fee, and that both Class A Shares and Class C
Shares will be subject to an annual service fee. Class R Shares will not be
subject to either distribution or service fees.
The distribution fee applicable to Class C Shares under the Plan will be pay-
able to reimburse Nuveen for services and expenses incurred in connection with
the distribution of Class C Shares. These expenses include payments to Autho-
rized Dealers, including Nuveen, who are brokers of
26
<PAGE>
record with respect to the Class C Shares, as well as, without limitation, ex-
penses of printing and distributing prospectuses to persons other than share-
holders of the Fund, expenses of preparing, printing and distributing advertis-
ing and sales literature and reports to shareholders used in connection with
the sale of Class C Shares, certain other expenses associated with the distri-
bution of Class C Shares, and any distribution-related expenses that may be au-
thorized from time to time by the Board of Directors.
The service fee applicable to Class A Shares and Class C Shares under the Plan
will be payable to Authorized Dealers in connection with the provision of ongo-
ing services to shareholders. These services may include establishing and main-
taining shareholder accounts, answering shareholder inquiries and providing
other personal services to shareholders.
The Fund may spend up to .25 of 1% per year of the average daily net assets of
Class A Shares as a service fee under the Plan applicable to Class A 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 aver-
age daily net assets of Class C Shares as a service fee under the Plan applica-
ble to Class C Shares. The .75 of 1% distribution fee will be reduced by the
amount of any CDSC imposed on the redemption of Class C Shares within 12 months
of purchase as to which a reinstatement privilege has not been exercised.
Under the Plan, the Fund will report quarterly to the Board of Trustees for its
review all amounts expended per class of shares under the Plan. The Plan may be
terminated at any time with respect to any class of shares, without the payment
of any penalty, by a vote of a majority of the trustees who are not "interested
persons" and who have no direct or indirect financial interest in the Plan or
by vote of a majority of the outstanding voting securities of such class. The
Plan may be renewed from year to year if approved by a vote of the Board of
Trustees and a vote of the non-interested directors who have no direct or indi-
rect financial interest in the Plan cast in person at a meeting called for the
purpose of voting on the Plan. The Plan may be continued only if the trustees
who vote to approve such continuance conclude, in the exercise of reasonable
business judgment and in light of their fiduciary duties under applicable law,
that there is a reasonable likelihood that the Plan will benefit the Fund and
its shareholders. The Plan may not be amended to increase materially the cost
which a class of shares may bear under the Plan without the approval of the
shareholders of the affected class, and any other material amendments of the
Plan must be approved by the
non-interested directors 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 Fund will be
committed to the discretion of the non-interested trustees then in office.
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
Arthur Andersen LLP, independent public accountants, 33 W. Monroe Street, Chi-
cago, Illinois 60603 have been selected as auditors for the Fund. In addition
to audit services, Arthur Andersen LLP will provide consultation and assistance
on accounting, internal control, tax and related matters. The
27
<PAGE>
ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- ------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ALASKA - 1.7%
Alaska Housing Finance
Corporation, Insured
Mortgage Program:
$ 4,265,000 6.375%, 12/01/07 6/95 at 101 Aa $ 4,299,291
3,290,000 7.650%, 12/01/10 12/00 at 102 Aa 3,476,181
10,885,000 7.800%, 12/01/30 12/00 at 102 Aa 11,444,162
Alaska State Housing
Finance Corporation:
3,675,000 6.375%, 12/01/12 12/02 at 102 Aa 3,977,122
22,250,000 6.600%, 12/01/23 12/02 at 102 Aa 23,617,930
- ------------------------------------------------------------------------------------
ARIZONA - 2.1%
Salt River Project,
Agricultural
Improvement
and Power District:
5,000,000 4.900%, 1/01/08 1/04 at 102 AA 4,596,050
9,145,000 5.000%, 1/01/10 7/95 at 100 AA 8,358,896
26,200,000 4.750%, 1/01/17 1/04 at 102 AA 21,849,490
20,350,000 5.500%, 1/01/28 1/02 at 100 AA 18,438,525
4,570,000 Scottsdale Industrial
Development Authority
(Scottsdale Memorial
Hospital), 8.500%,
9/01/07 9/97 at 102 Aaa 5,016,580
- ------------------------------------------------------------------------------------
ARKANSAS - 0.4%
11,210,000 Jefferson County
Hospital, 6.000%,
7/01/06 7/03 at 102 N/R 11,010,238
- ------------------------------------------------------------------------------------
CALIFORNIA - 12.2%
California Department of
Water Resources
(Central Valley
Project):
15,515,000 5.700%, 12/01/16 6/03 at 101 1/2 AA 14,771,056
8,500,000 5.750%, 12/01/19 6/03 at 101 1/2 AA 8,111,040
12,250,000 5.500%, 12/01/23 12/03 at 101 1/2 AA 11,219,163
20,000,000 4.875%, 12/01/27 12/03 at 101 AA 16,044,000
13,025,000 California Health
Facilities Financing
Authority (Catholic
Healthcare West),
5.000%, 7/01/14 7/04 at 102 Aaa 11,517,747
27,600,000 California Health
Facilities Financing
Authority (Daughters of
Charity), 9.250%,
3/01/15 3/96 at 102 Aa 29,213,772
12,000,000 California State Public
Works Board, Department
of Corrections
(California State
Prison, Monterey
County), 7.000%,
11/01/19 11/04 at 102 A- 12,544,080
32,795,000 California Statewide
Communities Development
Authority (St. Joseph
Health System),
5.500%, 7/01/23 7/03 at 102 AA 28,607,734
9,000,000 East Bay Municipal
Utility District,
5.000%, 6/01/21 6/03 at 102 Aaa 7,679,880
Los Angeles Department
of Water and Power:
15,825,000 6.500%, 4/15/32 4/02 at 102 AA 16,073,453
13,100,000 6.125%, 1/15/33 1/03 at 102 AA 12,862,235
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -----------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
Los Angeles Wastewater
System:
$ 7,000,000 5.700%, 6/01/20 6/03 at 102 Aaa $ 6,649,440
21,000,000 5.700%, 6/01/23 6/03 at 102 Aaa 19,899,600
Los Angeles County
Metropolitan Transit
Authority: 5.500%,
10,000,000 7/01/13 7/03 at 102 AA- 9,228,100
13,435,000 4.750%, 7/01/18 7/03 at 102 Aaa 11,104,834
19,500,000 Los Angeles County
Sanitation District
Financing Authority,
5.000%, 10/01/23 10/03 at 100 AA 16,270,020
25,000,000 Los Angeles County
Transportation
Commission,
6.750%, 7/01/19 (Pre-
refunded to 7/01/02) 7/02 at 102 Aaa 27,713,000
Southern California
Metropolitan Water
District:
4,670,000 5.500%, 1/01/10 7/95 at 101 1/2 AA+ 4,563,197
5,000,000 5.500%, 7/01/19 7/02 at 102 AA 4,597,950
12,750,000 Modesto Irrigation
District (Geysers
Geothermal Power
Project), Certificates
of Participation,
7.250%, 10/01/15 10/96 at 102 A1 13,180,185
22,725,000 Northern California
Power Agency,
7.150%, 7/01/24 7/98 at 102 A- 23,330,621
12,600,000 Sacramento Sanitation
District Finance
Authority,
4.750%, 12/01/23 12/03 at 102 AA 9,936,108
2,179,452 San Diego County
(Contel), Certificates
of Participation,
7.500%, 2/08/96 No Opt. Call N/R 2,221,341
7,600,000 Santa Clara County
(Capital Project No.
1), Certificates of
Participation,
8.000%, 10/01/06 (Pre-
refunded to 10/01/96) 10/96 at 102 AAA 8,122,120
8,050,000 University of
California,
6.875%, 9/01/16 (Pre-
refunded to 9/01/02) 9/02 at 102 A- 8,999,498
- -----------------------------------------------------------------------------------
COLORADO - 2.1%
31,750,000 Colorado Housing Finance
Authority,
7.250%, 11/01/31 11/01 at 102 AA- 32,901,573
City and County of
Denver Airport System:
12,075,000 8.375%, 8/01/11 4/95 at 101 Con(Baa) 12,227,024
7,090,000 9.250%, 8/01/20 4/95 at 102 Con(Baa) 7,257,608
4,250,000 7.250%, 11/15/25 11/02 at 102 Baa 4,335,298
- -----------------------------------------------------------------------------------
CONNECTICUT - 0.5%
9,820,000 Connecticut Housing
Finance Authority,
7.550%, 11/15/08 11/00 at 102 AA 10,424,126
2,970,000 Connecticut Resources
Recovery Authority,
8.625%, 1/01/04 1/96 at 102 A 3,105,194
</TABLE>
12
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- ------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DISTRICT OF COLUMBIA -
0.3%
$ 7,635,000 CHT Housing, Inc., FHA-
Insured,
8.500%, 1/01/22 7/95 at 103 N/R $ 7,917,571
- ------------------------------------------------------------------------------------
FLORIDA - 4.6%
4,500,000 Dade County Health
Facilities Authority
(Mt. Sinai Medical
Center),
8.400%, 12/01/07 (Pre-
refunded to 12/01/99) 12/99 at 102 Aaa 4,999,725
31,000,000 Hillsborough County
Industrial Development
Authority, Pollution
Control (Tampa
Electric), 8.000%,
5/01/22 5/02 at 103 Aa2 35,490,660
9,500,000 Jacksonville Electric
Authority, 7.375%,
10/01/13 (Pre-refunded
to 10/01/95) 10/95 at 101 1/2 Aaa 9,785,665
8,150,000 Jacksonville Electric
Authority (St. John's
River Power Park
System), 6.500%,
10/01/20 10/95 at 100 Aa1 8,196,700
26,950,000 North Broward Hospital
District, 8.000%,
1/01/14 (Pre-refunded
to 1/01/96) 1/96 at 103 AAA 28,475,640
Orlando Utilities
Commission:
22,700,000 8.500%, 10/01/09 (Pre-
refunded to 10/01/95) 10/95 at 102 Aaa 23,649,768
6,500,000 5.000%, 10/01/23 10/99 at 100 AA- 5,545,540
8,005,000 Pensacola Health
Facilities Authority
(Daughters of Charity),
7.750%, 1/01/03 (Pre-
refunded to 1/01/98) 1/98 at 101 1/2 Aaa 8,702,716
Sarasota Elderly Housing
Corporation:
30,000 7.500%, 7/01/95 No Opt. Call A 30,207
1,520,000 7.500%, 7/01/09 7/95 at 104 A 1,581,378
- ------------------------------------------------------------------------------------
GEORGIA - 0.3%
2,975,000 Appling County
Development Authority,
Pollution Control
(Georgia Power
Company),
10.600%, 10/01/15 10/95 at 102 A3 3,126,190
4,000,000 Burke County Development
Authority, Pollution
Control (Georgia Power
Company),
10.125%, 6/01/15 6/95 at 102 A3 4,129,360
- ------------------------------------------------------------------------------------
HAWAII - 0.3%
8,000,000 Hawaii Department of
Budget and Finance
(Kapiolani Health Care
System),
7.650%, 7/01/19 (Pre-
refunded to 7/01/01) 7/01 at 102 Aaa 9,148,000
- ------------------------------------------------------------------------------------
ILLINOIS - 16.1%
8,500,000 Illinois Development
Finance Authority
(Columbus-Cuneo-Cabrini
Medical Center),
8.500%, 2/01/15 2/00 at 102 BBB+ 9,070,605
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 8,500,000 Illinois Educational
Facilities Authority
(The University of
Chicago), 5.600%,
7/01/24 7/03 at 102 Aaa $ 7,686,805
Illinois General
Obligation:
15,100,000 6.200%, 10/01/04 10/02 at 102 AA- 15,913,286
14,750,000 5.875%, 6/01/10 6/02 at 102 AA- 14,784,958
5,000,000 5.875%, 6/01/11 6/02 at 102 AA- 4,899,550
10,000,000 5.700%, 4/01/18 4/03 at 102 AA- 9,366,500
5,435,000 Illinois Health
Facilities Authority
(Rush Presbyterian),
6.900%, 10/01/02 4/95 at 100 A1 5,434,185
12,420,000 Illinois Health
Facilities Authority
(LaGrange Hospital),
7.625%, 7/01/13 (Pre-
refunded to 7/01/96) 7/96 at 102 A 13,122,599
5,000,000 Illinois Health
Facilities Authority
(Evanston Hospital),
9.750%, 9/01/15 9/95 at 102 AA 5,211,050
10,900,000 Illinois Health
Facilities Authority
(Illinois Masonic
Medical Center),
10.250%, 9/01/15 (Pre-
refunded to 9/01/95) 9/95 at 102 AAA 11,418,295
10,000,000 Illinois Health
Facilities Authority
(Highland Park
Hospital),
6.200%, 10/01/22 10/02 at 102 Aaa 9,973,000
33,620,000 Illinois Health
Facilities Authority
(Rush Presbyterian-St.
Luke's Medical
Center), 5.500%,
11/15/25 11/03 at 102 Aaa 30,275,482
10,425,000 Illinois Independent
Higher Education Loan
Authority
(Northwestern
University),
8.000%, 12/01/07 12/96 at 102 AA- 11,195,512
Illinois Sales Tax:
21,670,000 6.000%, 6/15/18 6/01 at 100 AAA 21,189,143
14,200,000 5.250%, 6/15/18 6/03 at 102 AAA 12,421,024
Illinois Toll Highway
Authority:
20,000,000 6.450%, 1/01/13 1/03 at 102 A1 20,215,400
6,000,000 6.200%, 1/01/16 1/03 at 102 Aaa 5,999,340
Chicago General
Obligation:
4,900,000 9.000%, 1/01/99 (Pre-
refunded to 7/01/95) 7/95 at 102 Aaa 5,076,057
5,800,000 5.250%, 1/01/18 1/04 at 102 Aaa 5,144,020
15,770,000 5.625%, 1/01/23 1/03 at 102 Aaa 14,495,153
22,425,000 Chicago Metropolitan
Housing Development
Corporation, 6.900%,
7/01/22 7/02 at 102 AA 22,776,400
4,465,000 Chicago Motor Fuel Tax,
5.000%, 1/01/16 1/03 at 101 Aaa 3,851,866
31,000,000 Chicago O'Hare
International Airport,
5.000%, 1/01/16 1/04 at 102 A1 26,516,470
15,905,000 Cook County General
Obligation,
5.000%, 11/15/23 11/03 at 100 Aaa 13,414,277
</TABLE>
14
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
DuPage Water Commission,
General Obligation:
$ 51,290,000 7.875%, 3/01/11 (Pre-
refunded to 3/01/96) 3/96 at 102 Aaa $ 53,892,968
16,800,000 5.750%, 3/01/11 3/02 at 100 Aaa 16,747,584
9,500,000 5.250%, 5/01/14 5/03 at 102 AA 8,703,995
2,000,000 Hazel Crest (South
Suburban Hospital),
9.125%, 7/01/17 (Pre-
refunded to 7/01/97) 7/97 at 102 AAA 2,226,880
54,980,000 Metropolitan Pier and
Exposition Authority
(McCormick Place
Expansion Project),
6.500%, 6/15/27 6/03 at 102 A+ 55,177,378
Zion Elderly Housing
Corporation:
310,000 7.250%, 3/01/98 9/95 at 102 A 319,675
1,705,000 7.750%, 3/01/10 9/95 at 102 A 1,747,096
- --------------------------------------------------------------------------------
INDIANA - 1.5%
10,500,000 Indiana Health
Facilities Financing
Authority (Methodist
Hospital), 5.750%,
9/01/11 9/02 at 102 Aaa 10,163,265
12,550,000 Indiana Office Building
Commission,
8.750%, 7/01/12 (Pre-
refunded to 7/01/97) 7/97 at 102 Aaa 13,873,649
2,500,000 Indianapolis Local
Public Improvement,
Bond Bank, 6.750%,
2/01/20 2/03 at 102 A+ 2,556,000
3,135,000 Indianapolis Resource
Recovery (Ogden
Martin),
7.900%, 12/01/08 12/96 at 103 A 3,323,257
6,660,000 Evansville Hospital
Authority
(Daughters of Charity),
10.125%, 11/01/15 11/95 at 102 Aa 7,004,788
2,500,000 Southwind Housing, Inc.,
7.125%, 11/15/21 No Opt. Call AA 2,835,375
- --------------------------------------------------------------------------------
IOWA - 0.3%
4,350,000 Iowa Housing Finance
Authority,
5.875%, 8/01/08 8/95 at 101 Aa1 4,371,794
3,500,000 Davenport (Mercy
Hospital), 6.625%,
7/01/14 7/02 at 102 Aaa 3,631,530
- --------------------------------------------------------------------------------
KENTUCKY - 3.1%
Kentucky Housing
Corporation:
17,600,000 5.300%, 7/01/10 1/04 at 102 Aaa 16,093,616
10,100,000 5.400%, 7/01/14 1/04 at 102 Aaa 9,080,506
3,925,000 7.250%, 1/01/17 7/01 at 102 Aaa 4,101,507
Kentucky Turnpike
Authority:
9,860,000 8.000%, 7/01/03 7/97 at 102 A+ 10,701,255
8,980,000 5.000%, 7/01/08 7/97 at 100 A+ 8,286,834
34,500,000 Carroll County Pollution
Control
(Kentucky Utilities
Company),
7.450%, 9/15/16 9/02 at 102 Aa2 37,665,720
- --------------------------------------------------------------------------------
MAINE - 0.3%
10,000,000 Maine Housing Authority,
5.700%, 11/15/26 2/04 at 102 AA- 8,966,700
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MASSACHUSETTS - 4.0%
$ 15,000,000 Massachusetts Bay
Transportation
Authority,
Certificates of
Participation, 7.650%,
8/01/15 8/00 at 102 Aaa $ 16,539,000
29,670,000 Massachusetts General
Obligation,
4.700%, 8/01/02 No Opt. Call A1 28,289,752
12,245,000 Massachusetts Housing
Finance Agency (GNMA),
9.125%, 12/01/20 12/95 at 102 Aaa 12,731,494
Massachusetts Water
Resources Authority:
9,765,000 5.250%, 3/01/13 3/03 at 102 A 8,905,094
6,500,000 7.500%, 4/01/16 (Pre-
refunded to 4/01/00) 4/00 at 102 Aaa 7,270,185
9,500,000 6.000%, 4/01/20 4/00 at 100 A 9,366,050
24,650,000 5.250%, 12/01/20 12/04 at 102 A 21,769,155
5,795,000 5.000%, 3/01/22 3/03 at 100 A 4,895,558
- --------------------------------------------------------------------------------
MICHIGAN - 5.8%
3,000,000 Michigan Hospital
Finance Authority
(Genesys Health
System), 7.500%,
10/01/27 10/05 at 100 BBB 2,900,670
4,595,000 Michigan Housing
Development Authority,
6.750%, 7/01/05 7/95 at 100 Aa1 4,628,544
10,000,000 Michigan Housing
Development Authority,
Rental Housing,
6.600%, 4/01/12 10/02 at 102 A+ 10,191,100
4,000,000 Michigan State Hospital
Finance Authority
(Henry Ford Hospital),
7.500%, 7/01/13
(Pre-refunded to
1/01/97) 1/97 at 102 Aaa 4,262,560
Michigan State Hospital
Finance Authority
(St. John Hospital):
9.125%, 12/01/02 (Pre-
1,990,000 refunded to 12/01/95) 12/95 at 102 A1 2,093,002
6,855,000 9.200%, 12/01/10 (Pre-
refunded to 12/01/95) 12/95 at 102 N/R 7,213,585
41,500,000 Michigan State Hospital
Finance Authority
(Harper Grace and
Huron Valley
Hospitals), 10.000%,
10/01/16 (Pre-refunded
to 10/01/95) 10/95 at 102 AAA 43,560,060
Michigan State Hospital
Finance Authority
(Detroit Medical
Center):
19,585,000 5.750%, 8/15/13 8/04 at 102 A- 17,841,935
49,000,000 5.500%, 8/15/23 8/04 at 102 A- 40,973,800
5,000,000 Detroit Sewage Disposal
System,
8.250%, 7/01/05 (Pre-
refunded to 7/01/97) 7/97 at 102 A- 5,467,900
16,805,000 St. Joseph Hospital
Finance Authority
(Mercy Memorial
Medical Center
Obligated Group),
5.250%, 1/01/16 1/04 at 102 Aaa 14,949,728
5,000,000 University of Michigan
Hospital,
6.625%, 12/01/10 12/96 at 100 AA 5,043,350
- --------------------------------------------------------------------------------
MINNESOTA - 0.8%
2,520,000 Minnesota Housing
Finance Agency,
6.250%, 2/01/20 8/95 at 102 A1 2,513,524
</TABLE>
16
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- ------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MINNESOTA (CONTINUED)
$ 14,420,000 Minneapolis Convention
Center,
7.750%, 4/01/11 (Pre-
refunded to 4/01/96) 4/96 at 102 Aaa $ 15,167,677
5,000,000 University of Minnesota,
7.625%, 2/01/05 (Pre-
refunded to 2/01/96) 2/96 at 102 AAA 5,229,150
- ------------------------------------------------------------------------------------
MISSOURI - 1.0%
2,785,000 Missouri Environmental
Improvement and Energy
Resource Authority,
Pollution Control
(Associated Electric
Cooperative, Inc.),
7.900%, 11/15/14 5/96 at 103 Aa3 2,940,654
15,750,000 Missouri Health and
Educational Facilities
Authority (Heartland
Health), 8.125%,
10/01/10 10/99 at 102 1/2 BBB+ 17,837,033
6,195,000 Missouri Housing
Development Commission,
7.000%, 9/15/22 3/95 at 102 AA+ 6,317,413
- ------------------------------------------------------------------------------------
NEBRASKA - 1.6%
40,835,000 Consumers Public Power
District, 5.100%,
1/01/03 7/95 at 101 A1 40,941,988
2,615,000 Hall County Hospital
Authority
(Sisters of Charity),
6.750%, 12/01/07 6/95 at 103 Aa 2,693,450
- ------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.3%
8,500,000 New Hampshire Industrial
Development Authority,
Pollution Control
(Central Maine Power
Company), 7.375%,
5/01/14 12/01 at 103 Baa3 8,823,680
- ------------------------------------------------------------------------------------
NEW JERSEY - 0.4%
10,750,000 New Jersey Housing and
Mortgage Finance
Agency, 6.950%,
11/01/13 5/02 at 102 A+ 11,199,565
- ------------------------------------------------------------------------------------
NEW YORK - 6.8%
8,000,000 New York Local
Government
Assistance Corporation,
7.000%, 4/01/18 (Pre-
refunded to 4/01/02) 4/02 at 102 Aaa 8,970,800
13,000,000 New York State Housing
Finance Agency,
Health Facilities (New
York City),
8.000%, 11/01/08 11/00 at 102 BBB+ 14,379,430
11,490,000 New York State Mortgage
Agency,
6.875%, 4/01/17 10/96 at 102 Aa 11,753,925
10,725,000 Battery Park City
Authority, 5.000%,
11/01/13 11/03 at 102 AA 9,122,149
New York Municipal
Assistance Corporation:
16,270,000 7.750%, 7/01/06 7/97 at 102 AA- 17,618,295
18,565,000 6.750%, 7/01/06 7/97 at 102 AA- 19,578,278
23,535,000 7.250%, 7/01/08 7/96 at 102 AA- 24,627,024
14,250,000 6.000%, 7/01/08 7/97 at 100 AA- 14,400,195
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- ------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK (CONTINUED)
New York City General
Obligation:
$ 24,685,000 6.700%, 2/01/96 No Opt. Call A- $ 25,095,265
16,500,000 4.875%, 10/01/01 No Opt. Call A- 15,299,955
5,000,000 8.125%, 11/01/06 (Pre-
refunded to 11/01/97) 11/97 at 101 1/2 Aaa 5,492,800
8,000,000 5.750%, 8/15/11 8/03 at 102 A- 7,270,880
8,525,000 6.625%, 8/01/12 (Pre-
refunded to 8/01/02) 8/02 at 101 1/2 Aaa 9,335,728
5,000,000 Triborough Bridge and
Tunnel Authority,
General Purpose,
4.750%, 1/01/19 1/04 at 100 Aa 4,129,950
- ------------------------------------------------------------------------------------
NORTH CAROLINA - 4.2%
North Carolina Eastern
Municipal Power Agency:
53,810,000 6.250%, 1/01/12 1/03 at 102 A- 52,171,486
17,290,000 8.000%, 1/01/21 (Pre-
refunded to 1/01/98) 1/98 at 102 Aaa 19,000,154
North Carolina Municipal
Power Agency No. 1
(Catawba):
13,880,000 9.000%, 1/01/14 (Pre-
refunded to 1/01/96) 1/96 at 102 Aaa 14,647,703
5,545,000 7.625%, 1/01/14 1/98 at 102 Aaa 5,939,471
20,080,000 8.500%, 1/01/17 (Pre-
refunded to 1/01/96) 1/96 at 102 Aaa 21,105,285
Wilmington Housing
Authority:
210,000 7.750%, 6/01/98 No Opt. Call AA 215,462
1,195,000 7.750%, 6/01/10 No Opt. Call AA 1,283,848
- ------------------------------------------------------------------------------------
OHIO - 0.3%
6,285,000 Ohio Building Authority
(Correctional
Facilities), 9.100%,
10/01/04 (Pre-refunded
to 10/01/95) 10/95 at 103 Aaa 6,630,864
500,000 Ohio Building Authority
(Toledo Center),
9.100%, 10/01/04 10/95 at 103 A1 527,395
- ------------------------------------------------------------------------------------
OKLAHOMA - 0.2%
5,375,000 Comanche County Hospital
Authority,
8.050%, 7/01/16 (Pre-
refunded to 7/01/99) 7/99 at 102 AAA 6,089,391
- ------------------------------------------------------------------------------------
PENNSYLVANIA - 4.7%
Pennsylvania Housing
Finance Agency:
4,025,000 8.100%, 7/01/13 7/02 at 102 AAA 4,433,618
16,830,000 8.200%, 7/01/24 7/02 at 102 AAA 18,480,182
14,000,000 Pennsylvania Housing
Finance Agency, Rental
Housing (FNMA), 5.750%,
7/01/14 7/03 at 102 Aaa 13,408,360
15,000,000 Pennsylvania
Intergovernmental
Cooperative Authority
(Philadelphia Funding
Program), 5.00%,
6/15/22 6/03 at 100 Aaa 12,853,500
5,000,000 Allegheny County
Hospital Development
Authority (St. Francis
Medical Center),
8.125%, 6/01/13 (Pre-
refunded to 6/01/96) 6/96 at 102 Aaa 5,307,600
7,000,000 Geisinger Health System,
7.875%, 7/01/04 7/95 at 102 AA 7,212.940
</TABLE>
18
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- ------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$ 10,000,000 Lehigh County Industrial
Development Authority,
Pollution Control
(Pennsylvania Power and
Light Company), 6.400%,
9/01/29 9/04 at 102 Aaa $ 10,138,100
6,550,000 Monroeville Hospital
Authority
(Forbes Health System),
9.700%, 10/01/13 (Pre-
refunded to 10/01/95) 10/95 at 102 AAA 6,863,811
9,300,000 Philadelphia Airport,
6.200%, 6/15/06 6/95 at 100 BBB 9,299,070
Philadelphia Water and
Sewer System:
5,890,000 7.250%, 7/01/14 (Pre-
refunded to 7/01/96) 7/96 at 102 AAA 6,139,442
7,000,000 7.000%, 8/01/18 8/01 at 100 BBB 7,195,720
28,075,000 Philadelphia Hospitals
and Higher Educational
Facilities Authority
(Pennsylvania
Hospital), 7.250%,
7/01/14 7/96 at 101 A 28,588,211
- ------------------------------------------------------------------------------------
RHODE ISLAND - 0.4%
3,900,000 Rhode Island Housing and
Mortgage Finance
Corporation, 8.875%,
7/01/07 7/95 at 100 A1 3,948,750
7,595,000 Rhode Island Convention
Center Authority,
5.000%, 5/15/20 5/03 at 100 Aaa 6,371,825
- ------------------------------------------------------------------------------------
TEXAS - 4.4%
Austin Water, Sewer and
Electric:
17,575,000 14.000%, 11/15/01 No Opt. Call A 25,332,429
4,000,000 11.000%, 11/15/02 (Pre-
refunded to 5/15/97) 5/97 at 100 AAA 4,509,000
Dallas-Fort Worth
International Airport:
9,400,000 9.000%, 11/01/05 11/95 at 102 1/2 A1 9,891,432
15,945,000 9.125%, 11/01/15 11/95 at 102 1/2 A1 16,782,910
19,400,000 Harris County Toll Road,
5.300%, 8/15/13 8/04 at 102 Aaa 18,080,218
7,000,000 Harris County Health
Facilities Development
Corporation (St. Luke's
Episcopal Hospital),
6.750%, 2/15/21 2/01 at 102 AA 7,120,190
3,345,000 Houston Water and Sewer
System, 8.200%,
12/01/15 (Pre-refunded
to 12/01/96) 12/96 at 102 AAA 3,608,118
San Antonio Electric and
Gas Systems:
5,000,000 8.000%, 2/01/09 (Pre-
refunded to 2/01/98) 2/98 at 102 Aaa 5,504,100
3,500,000 8.000%, 2/01/16 (Pre-
refunded to 2/01/98) 2/98 at 102 Aaa 3,852,870
16,000,000 5.000%, 2/01/17 2/02 at 101 Aa1 13,886,720
San Antonio Sewer
System:
6,750,000 8.000%, 5/01/10 (Pre-
refunded to 5/01/95) 5/95 at 102 Aaa 6,928,133
5,615,000 7.900%, 5/01/14 (Pre-
refunded to 5/01/97) 5/97 at 101 1/2 Aaa 6,048,253
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -----------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UTAH - 4.2%
Intermountain Power
Agency:
$ 9,200,000 10.250%, 7/01/04 7/95 at 102 1/2 AA $ 9,592,380
6,345,000 10.000%, 7/01/10 7/95 at 102 1/2 AA 6,613,711
6,300,000 5.500%, 7/01/13 7/03 at 103 AA 5,878,971
32,080,000 7.875%, 7/01/14 7/96 at 102 AA- 33,670,847
3,200,000 9.625%, 7/01/19 7/95 at 102 AA 3,315,648
16,260,000 7.200%, 7/01/19 7/97 at 102 AA- 16,983,407
18,225,000 7.000%, 7/01/23 (Pre-
refunded to 7/01/95) 7/95 at 100 Aaa 18,396,497
22,140,000 5.000%, 7/01/23 7/03 at 100 AA 18,535,165
1,835,000 Layton Industrial
Development (K-Mart),
8.750%, 6/01/05 6/95 at 100 1/2 Baa1 1,859,442
- -----------------------------------------------------------------------------------
VERMONT - 0.1%
270,000 University of Vermont,
Housing, Dining and
Student Services,
6.300%, 7/01/06 7/95 at 101 AA- 274,136
- -----------------------------------------------------------------------------------
VIRGINIA - 3.9%
Virginia Housing
Development Authority:
19,080,000 5.550%, 5/01/08 5/03 at 102 AA 18,253,645
28,075,000 5.900%, 5/01/14 5/03 at 102 AA 26,386,570
3,275,000 6.700%, 11/01/21 4/95 at 101 AA 3,304,573
50,000,000 7.150%, 1/01/33 1/02 at 102 AA+ 52,085,000
6,240,000 Chesapeake Hospital
Authority
(Chesapeake General
Hospital),
7.625%, 7/01/18 (Pre-
refunded to 7/01/98) 7/98 at 102 Aaa 6,859,757
1,190,000 Chesapeake Industrial
Development Authority
(Camelot Hall Nursing
Home), 7.500%, 9/01/01 No Opt. Call N/R 1,194,129
- -----------------------------------------------------------------------------------
WASHINGTON - 7.3%
Washington Public Power
Supply System,
Nuclear Project No. 1:
14,260,000 7.000%, 7/01/07 No Opt. Call AA 15,489,212
7,805,000 7.000%, 7/01/09 No Opt. Call AA 8,414,804
18,500,000 5.750%, 7/01/13 7/03 at 102 AA 17,079,570
10,000,000 5.375%, 7/01/15 7/03 at 102 AA 8,821,400
5,000,000 7.125%, 7/01/16 No Opt. Call AA 5,542,700
10,000,000 5.700%, 7/01/17 7/03 at 102 Aaa 9,307,400
Washington Public Power
Supply System,
Nuclear Project No. 3:
9,180,000 5.300%, 7/01/10 7/03 at 102 AA 8,209,765
51,070,000 5.375%, 7/01/15 7/03 at 102 AA 45,050,890
2,095,000 15.000%, 7/01/18 (Pre-
refunded to 7/01/96) 7/96 at 103 Aaa 2,433,342
8,835,000 5.700%, 7/01/18 7/03 at 102 AA 7,990,991
11,545,000 5.500%, 7/01/18 7/03 at 102 AA 10,204,510
6,635,000 Chelan County Public
Utility District No. 1,
5.125%, 7/01/23 7/95 at 100 A1 6,270,207
</TABLE>
20
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 33,576,000 Chelan County Public
Utility District No. 1
(Rocky Reach Hydro-
Electric System),
5.000%, 7/01/13 7/95 at 100 A1 $ 33,573,313
16,920,000 Columbia Storage Power
Exchange,
3.875%, 4/01/03 4/95 at 100 AA 16,919,491
4,950,000 Seattle Metropolitan
Sewer,
7.400%, 1/01/16 (Pre-
refunded to 1/01/96) 1/96 at 102 Aaa 5,176,066
- --------------------------------------------------------------------------------
WISCONSIN - 2.2%
13,500,000 Wisconsin Health and
Educational Facilities
Authority (Aurora
Health Care Obligated
Group), 5.250%, 8/15/23 8/03 at 102 Aaa 11,762,550
3,250,000 Wisconsin Health and
Educational Facilities
Authority (Froedtert
Memorial Lutheran
Hospital), 5.875%,
10/01/13 10/04 at 102 Aaa 3,137,614
Wisconsin Housing and
Economic Development
Authority:
2,760,000 9.875%, 11/01/03 3/95 at 101 A1 2,825,550
3,205,000 10.000%, 11/01/10 3/95 at 101 A1 3,265,093
23,200,000 5.800%, 11/01/13 1/04 at 104 A1 21,669,263
4,500,000 5.800%, 6/01/17 No Opt. Call AA 4,378,950
8,500,000 7.050%, 11/01/22 4/02 at 102 A1 8,728,395
4,815,000 Sheboygan Pollution
Control
(Wisconsin Electric
Power Company),
9.750%, 9/15/15 9/95 at 102 AA+ 5,033,360
- --------------------------------------------------------------------------------
PUERTO RICO - 0.3%
8,000,000 Puerto Rico Aqueduct and
Sewer Authority,
7.875%, 7/01/17 7/98 at 102 A 8,772,240
- --------------------------------------------------------------------------------
$2,727,460,452 Total Investments -
(cost $2,622,064,371) -
98.7% 2,704,785,376
- --------------------------------------------------------------------------------
- -------------------
TEMPORARY INVESTMENTS IN
SHORT-TERM MUNICIPAL
SECURITIES - 0.1%
$ 2,700,000 Michigan Strategic Fund
-------------- (Dow Chemical Company),
Variable Rate Demand
Bonds, 3.800%, 2/01/09+ P-1 2,700,000
- --------------------------------------------------------------------------------
Other Assets Less
Liabilities - 1.2% 33,692,723
- --------------------------------------------------------------------------------
Net Assets - 100% $2,741,178,099
</TABLE>
- --------------------------------------------------------------------------------
21
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MUNICIPAL BOND FUND, INC.--CONTINUED
<TABLE>
<CAPTION>
NUMBER MARKET
STANDARD & POOR'S MOODY'S OF ISSUES MARKET VALUE PERCENT
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 75 $ 859,743,088 32%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 81 1,028,411,785 38
PORTFOLIO OF A+ A1 24 344,778,946 13
INVESTMENTS A, A- A, A2, A3 26 347,109,113 13
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 11 95,185,580 3
TEMPORARY Non-rated Non-rated 5 29,556,864 1
INVESTMENTS):
- -----------------------------------------------------------------------------------------
TOTAL 222 $2,704,785,376 100%
</TABLE>
- --------------------------------------------------------------------------------
* Optional Call Provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
Con. Rating is conditional. Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings by projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals which begin when facilities are completed, or (d) payments to which
some other limiting condition attaches. Parenthetical rating denotes probable
credit stature upon completion of construction or elimination of basis of
condition.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
22
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
NUVEEN INSURED MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ALABAMA - 4.2%
$ 2,120,000 Albertville Water Supply
Board, 6.700%, 3/01/11 3/02 at 102 Aaa $ 2,244,762
4,960,000 Auburn Government Utility
Services Corporation,
Wastewater Treatment,
7.300%, 1/01/12 12/99 at 102 Aaa 5,288,104
500,000 Auburn Water Works Board,
5.750%, 9/01/22 9/02 at 102 Aaa 478,080
1,875,000 Birmingham Special Care
Facilities Financing
Authority (Baptist Medical
Center),
7.000%, 1/01/21 1/01 at 102 Aaa 1,963,275
Daphne Utilities Board,
Water, Gas and Sewer:
1,255,000 7.350%, 6/01/20 (Pre-
refunded to 6/01/00) 6/00 at 102 Aaa 1,401,069
1,225,000 7.350%, 6/01/20 6/00 at 102 Aaa 1,311,840
3,000,000 Madison General Obligation,
6.250%, 2/01/19 2/04 at 102 Aaa 3,044,880
3,000,000 Mobile County General
Obligation,
6.700%, 2/01/11 (Pre-
refunded to 2/01/00) 2/00 at 102 Aaa 3,252,030
2,375,000 Muscle Shoals Utilities
Board,
Water and Sewer System,
7.250%, 4/01/17 (Pre-
refunded to 4/01/99) 4/99 at 102 Aaa 2,611,028
3,000,000 Oneanta Utilities Board,
6.900%, 11/01/24 11/04 at 102 Aaa 3,218,760
1,250,000 Warrior River Water
Authority, 5.350%, 8/01/23 8/03 at 102 Aaa 1,120,238
West Morgan--East Lawrence
Water Authority:
2,200,000 6.800%, 8/15/19 8/04 at 102 Aaa 2,340,536
3,000,000 6.850%, 8/15/25 8/04 at 102 Aaa 3,203,940
- -------------------------------------------------------------------------------
ALASKA - 0.6%
5,000,000 Anchorage General
Obligation, 5.600%,
1/01/14 1/04 at 100 Aaa 4,721,800
- -------------------------------------------------------------------------------
ARIZONA - 0.8%
6,000,000 Tempe Union High School
District No. 213, General
Obligation, 6.000%,
7/01/10 7/04 at 101 Aaa 6,153,300
- -------------------------------------------------------------------------------
CALIFORNIA - 13.6%
5,000,000 California Health
Facilities Financing
Authority (Catholic
Healthcare West), 5.000%,
7/01/14 7/04 at 102 Aaa 4,421,400
Brea Public Financing
Authority, Tax Allocation:
3,525,000 7.000%, 8/01/15 (Pre-
refunded to 8/01/01) 8/01 at 102 Aaa 3,936,755
1,475,000 7.000%, 8/01/15 8/01 at 102 Aaa 1,576,362
5,000,000 Brea Redevelopment Agency,
Tax Allocation,
5.750%, 8/01/23 8/03 at 102 Aaa 4,771,300
5,000,000 Contra Costa Water
Authority, 5.750%,
10/01/20 10/02 at 102 Aaa 4,780,650
4,150,000 Fairfield Public Finance
Authority, 5.500%, 8/01/23 8/03 at 102 Aaa 3,789,531
Lancaster Redevelopment
Agency, Tax Allocation:
2,500,000 6.100%, 8/01/19 8/01 at 102 Aaa 2,509,400
2,500,000 5.800%, 8/01/23 8/03 at 102 Aaa 2,395,925
10,700,000 Los Angeles Community
Redevelopment Agency
(Bunker Hill Project),
5.625%, 12/01/23 12/03 at 102 Aaa 9,851,062
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 14,740,000 Los Angeles Convention and
Exhibition Center
Authority, 5.375%, 8/15/18 8/03 at 102 Aaa $ 13,432,415
4,570,000 Los Angeles Wastewater
System, 5.800%, 6/01/21 6/03 at 102 Aaa 4,385,372
4,500,000 Los Angeles County
Metropolitan
Transportation Authority,
Sales Tax, 5.625%, 7/01/18 7/03 at 102 Aaa 4,262,085
4,500,000 M-S-R Public Power Agency
(San Juan Project),
6.000%, 7/01/20 7/03 at 102 Aaa 4,441,860
1,700,000 Monterey Regional Water
Pollution Control Agency,
Wastewater System,
5.300%, 6/01/14 6/03 at 100 Aaa 1,548,751
2,500,000 Moulton Niguel Water
District, Certificates of
Participation,
5.300%, 9/01/23 9/03 at 102 Aaa 2,206,775
2,500,000 Oakland General Obligation,
6.000%, 6/15/22 6/02 at 102 Aaa 2,466,675
3,000,000 Rancho Cucamonga
Redevelopment Agency,
5.500%, 9/01/23 3/04 at 102 Aaa 2,758,080
5,295,000 Riverside County Desert,
Justice Facility
Corporation, Certificates
of Participation,
6.000%, 12/01/12 12/04 at 101 Aaa 5,331,959
2,250,000 Sacramento Municipal
Utility District,
Electric System,
6.500%, 9/01/21 (Pre-
refunded to 9/01/01) 9/01 at 102 Aaa 2,456,325
4,750,000 San Francisco City and
County Sewer System,
5.375%, 10/01/22 10/02 at 102 Aaa 4,275,238
7,500,000 University of California
Housing System,
5.500%, 11/01/18 11/03 at 102 Aaa 6,948,225
10,000,000 University of California,
6.375%, 9/01/24 9/02 at 102 Aaa 10,145,700
- -------------------------------------------------------------------------------
COLORADO - 1.1%
4,500,000 Denver Board of Water
Commissioners,
Certificates of
Participation, 6.625%,
11/15/11 11/01 at 101 Aaa 4,747,005
3,500,000 Jefferson County Equipment
Lease, Certificates of
Participation, 6.650%,
12/01/08 12/02 at 102 Aaa 3,831,905
- -------------------------------------------------------------------------------
DELAWARE - 0.5%
3,600,000 Delaware Economic
Development Authority,
Pollution Control
(Delmarva Power and
Light Company), 6.750%,
5/01/19 5/02 at 102 Aaa 3,767,292
- -------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.6%
District of Columbia
General Obligation:
2,500,000 7.500%, 6/01/10 (Pre-
refunded to 6/01/00) 6/00 at 102 Aaa 2,804,375
6,000,000 6.100%, 6/01/11 6/04 at 102 Aaa 5,932,320
2,000,000 District of Columbia
(American College of
Obstetricians and
Gynecologists),
6.500%, 8/15/18 8/01 at 102 Aaa 2,023,240
</TABLE>
24
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DISTRICT OF COLUMBIA
(CONTINUED)
$ 1,000,000 Washington Metropolitan
Area Transit Authority,
5.250%, 7/01/14 1/04 at 102 Aaa $ 909,430
- -------------------------------------------------------------------------------
FLORIDA - 0.8%
Florida Keys Aqueduct
Authority:
920,000 6.750%, 9/01/21 (Pre-
refunded to 9/01/01) 9/01 at 101 Aaa 1,003,398
80,000 6.750%, 9/01/21 9/01 at 101 Aaa 83,682
Brevard County, Utility
System:
1,520,000 7.375%, 3/01/14 (Pre-
refunded to 3/01/98) 3/98 at 102 Aaa 1,649,869
295,000 7.375%, 3/01/14 3/98 at 102 Aaa 314,730
2,405,000 South Broward Hospital
District, 7.500%, 5/01/08 5/03 at 102 Aaa 2,726,693
- -------------------------------------------------------------------------------
GEORGIA - 2.5%
5,000,000 Albany Sewerage System,
6.625%, 7/01/17 7/02 at 102 Aaa 5,231,400
5,000,000 Appling County Development
Authority (Oglethorpe
Power Corporation),
7.150%, 1/01/21 1/04 at 101 Aaa 5,447,900
1,000,000 Atlanta Board of Education,
Certificates of
Participation,
7.125%, 6/01/12 (Pre-
refunded to 6/01/00) 6/00 at 102 Aaa 1,106,140
2,250,000 Chatham County Hospital
Authority
(Savannah Memorial Medical
Center),
7.000%, 1/01/21 1/01 at 102 Aaa 2,396,093
1,500,000 Columbus Water and Sewerage
System, 5.700%, 5/01/20 11/03 at 102 Aaa 1,441,785
2,500,000 Fulton-DeKalb Hospital
Authority
(Grady Memorial),
5.500%, 1/01/20 7/03 at 102 Aaa 2,309,125
1,000,000 Georgia Municipal Electric
Authority,
6.500%, 1/01/26 1/04 at 102 Aaa 1,028,090
- -------------------------------------------------------------------------------
ILLINOIS - 9.9%
6,810,000 Illinois Health Facilities
Authority
(Methodist Health
Services), 8.000%, 8/01/15 2/99 at 103 Aaa 7,444,011
1,500,000 Illinois Health Facilities
Authority
(Rush-Presbyterian-St.
Luke's Medical Center),
5.500%, 11/15/25 11/03 at 102 Aaa 1,350,780
Illinois Health Facilities
Authority (Community
Provider Pooled Loan
Program):
20,000 7.900%, 8/15/03 (Pre-
refunded to 8/15/95) 8/95 at 102 Aaa 20,732
159,000 7.900%, 8/15/03 No Opt. Call Aaa 186,540
1,304,000 7.900%, 8/15/03 8/95 at 102 Aaa 1,350,475
Illinois Health Facilities
Authority
(Ingalls Health System):
7,000,000 6.250%, 5/15/14 5/04 at 102 Aaa 7,038,360
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 2,100,000 7.000%, 1/01/19 (Pre-
refunded to 1/01/00) 1/00 at 102 Aaa $ 2,299,143
4,000,000 Illinois Health
Facilities Authority
(Northwestern Medical
Faculty Foundation),
6.500%, 11/15/15 11/04 at 102 Aaa 4,123,600
7,705,000 Illinois Toll Highway
Authority,
6.200%, 1/01/16 1/03 at 102 Aaa 7,704,152
2,500,000 Chicago General
Obligation
(Central Public Library
Project),
6.850%, 1/01/17 (Pre-
refunded to 7/01/02) 7/02 at 101 1/2 Aaa 2,760,050
5,000,000 Chicago General
Obligation,
6.250%, 1/01/12 1/02 at 102 Aaa 5,060,350
1,500,000 Chicago Public Building
Commission (Community
College District No.
508), 7.700%, 1/01/08 No Opt. Call Aaa 1,650,795
18,300,000 Chicago Public Building
Commission (Board of
Education),
5.750%, 12/01/18 12/03 at 102 Aaa 17,411,901
6,540,000 Cicero General
Obligation,
6.400%, 12/01/14 12/04 at 102 Aaa 6,445,497
2,500,000 Community College
District No. 508, Cook
County, 8.750%, 1/01/07 No Opt. Call Aaa 3,182,250
2,370,000 Eastern Illinois
University,
6.375%, 4/01/16 4/04 at 102 Aaa 2,427,544
4,000,000 Northlake General
Obligation,
6.250%, 12/01/11 12/01 at 102 Aaa 4,080,520
- -------------------------------------------------------------------------------
INDIANA - 7.1%
5,000,000 Indiana Health
Facilities Financing
Authority (Community
Hospitals Project),
6.400%, 5/01/12 5/02 at 102 Aaa 5,107,150
Indiana Municipal Power
Agency,
Power Supply System:
1,000,000 7.100%, 1/01/15 (Pre-
refunded to 1/01/00) 1/00 at 102 Aaa 1,099,290
5,000,000 6.125%, 1/01/19 1/03 at 102 Aaa 4,946,950
3,750,000 Indianapolis Gas Utility
System, 6.200%, 6/01/23 6/02 at 102 Aaa 3,757,388
2,000,000 Allen County
Certificates of
Participation, 6.500%,
11/01/17 5/02 at 101 Aa 2,036,500
5,350,000 Jasper County Pollution
Control
(Northern Indiana
Public Service
Company),
7.100%, 7/01/17 7/01 at 102 Aaa 5,677,153
2,000,000 Lawrence Central High
School Building
Corporation, First
Mortgage,
7.250%, 7/01/08 7/00 at 102 Aaa 2,141,760
Marion County Convention
and Recreational
Facilities Authority,
Excise Taxes Lease
Rental:
3,300,000 7.000%, 6/01/21 (Pre-
refunded to 6/01/01) 6/01 at 102 Aaa 3,665,112
500,000 7.000%, 6/01/21 6/01 at 102 Aaa 528,455
2,250,000 Monroe County Hospital
Authority
(Bloomington Hospital),
7.125%, 5/01/11 5/99 at 101 Aaa 2,368,058
1,000,000 Princeton Pollution
Control (Public Service
Company of Indiana),
7.375%, 3/15/12 3/00 at 102 Aaa 1,074,360
1,800,000 Randolph County Jail
Building Corporation,
First Mortgage,
6.250%, 8/01/13 8/02 at 101 Aaa 1,823,382
</TABLE>
26
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
INDIANA (CONTINUED)
$ 4,000,000 Richmond Hospital Authority
(Reid Hospital and Health
Care), 6.250%, 1/01/12 1/02 at 102 Aaa $ 4,053,760
St. Joseph County Hospital
Authority
(Memorial Hospital of
South Bend):
2,000,000 7.000%, 8/15/20 8/01 at 102 Aaa 2,109,440
2,500,000 6.250%, 8/15/22 2/03 at 102 Aaa 2,483,675
2,190,000 Shelby County Jail Building
Corporation,
First Mortgage,
6.500%, 7/15/09 7/02 at 102 Aaa 2,293,061
South Bend Community School
Building Corporation,
First Mortgage:
4,000,000 7.000%, 1/15/11 (Pre-
refunded to 7/15/99) 7/99 at 100 Aaa 4,315,800
1,380,000 6.650%, 1/15/14 (Pre-
refunded to 7/15/00) 7/00 at 100 Aaa 1,479,443
2,265,000 Southwest Allen Multi-
School Building
Corporation,
6.375%, 1/15/09 1/02 at 101 Aaa 2,339,020
- -------------------------------------------------------------------------------
KENTUCKY - 0.3%
Louisville and Jefferson
County Metropolitan Sewer
District:
1,000,000 7.000%, 5/01/09 (Pre-
refunded to 5/01/99) 5/99 at 102 Aaa 1,091,890
1,000,000 7.350%, 5/01/19 (Pre-
refunded to 5/01/00) 5/00 at 102 Aaa 1,115,310
- -------------------------------------------------------------------------------
LOUISIANA - 3.4%
Louisiana General
Obligation:
5,000,000 6.500%, 5/01/09 5/02 at 102 Aaa 5,265,850
2,000,000 6.500%, 5/01/12 5/02 at 102 Aaa 2,088,320
1,700,000 Louisiana Public Facilities
Authority
(Our Lady of Lourdes
Regional Medical Center),
6.450%, 2/01/22 2/02 at 102 Aaa 1,724,752
7,000,000 Louisiana Public Facilities
Authority
(Southern Baptist
Hospital), 6.800%, 5/15/12 5/02 at 102 Aaa 7,396,130
1,655,000 Louisiana Public Facilities
Authority (West Jefferson
Medical Center), 7.900%,
12/01/15 12/98 at 102 Aaa 1,805,539
1,000,000 Louisiana State University
and Agricultural and
Mechanical College,
5.750%, 7/01/74 7/04 at 102 Aaa 969,290
Tangipahoa Parish Hospital
Service District No. 1:
1,250,000 6.125%, 2/01/14 2/04 at 102 Aaa 1,255,350
4,750,000 6.250%, 2/01/24 2/04 at 102 Aaa 4,764,583
- -------------------------------------------------------------------------------
MAINE - 0.6%
3,175,000 Maine Health and Higher
Educational Facilities
Authority, 7.00%, 7/01/24 7/04 at 102 Aaa 3,379,311
Old Orchard Beach General
Obligation:
750,000 6.650%, 9/01/09 9/02 at 103 Aaa 806,820
500,000 6.650%, 9/01/10 9/02 at 103 Aaa 535,015
</TABLE>
27
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MARYLAND - 0.6%
$ 3,000,000 Maryland Health and Higher
Educational Facilities
Authority (Frederick
Memorial Hospital),
5.000%, 7/01/23 7/03 at 102 Aaa $ 2,548,380
1,000,000 Morgan State University,
Academic and Auxiliary
Fees, 7.000%, 7/01/20
(Pre-refunded to 7/01/00) 7/00 at 102 Aaa 1,101,570
1,000,000 Prince George's County
Industrial
Development Authority
(Upper Marlboro
Justice Center Project),
7.000%, 6/30/19 (Pre-
refunded to 6/30/99) 6/99 at 102 Aaa 1,093,600
- -------------------------------------------------------------------------------
MASSACHUSETTS - 4.3%
2,000,000 Massachusetts General
Obligation,
7.000%, 6/01/09 (Pre-
refunded to 6/01/99) 6/99 at 102 Aaa 2,184,720
2,500,000 Massachusetts Bay
Transportation Authority,
General Transportation
System,
7.100%, 3/01/13 (Pre-
refunded to 3/01/99) 3/99 at 102 Aaa 2,730,525
1,250,000 Massachusetts Bay
Transportation Authority,
Certificates of
Participation,
7.650%, 8/01/15 8/00 at 102 Aaa 1,378,250
2,000,000 Massachusetts Health and
Educational Facilities
Authority (Capital Asset
Program), 7.300%, 10/01/18 4/00 at 102 Aaa 2,161,300
3,400,000 Massachusetts Health and
Educational Facilities
Authority (New England
Medical Center),
6.625%, 7/01/25 7/02 at 102 Aaa 3,505,774
4,000,000 Massachusetts Health and
Educational Facilities
Authority (South Shore
Hospital), 6.500%, 7/01/22 7/02 at 102 Aaa 4,075,160
1,000,000 Massachusetts Health and
Educational Facilities
Authority (Falmouth
Hospital), 5.625%, 7/01/11 7/03 at 102 Aaa 955,180
2,800,000 Massachusetts Health and
Educational Facilities
Authority (Lahey Clinic
Medical Center),
5.625%, 7/01/15 7/03 at 102 Aaa 2,645,916
3,875,000 Massachusetts Health and
Educational Facilities
Authority (Cape Cod Health
System),
5.250%, 11/15/21 11/03 at 102 AAA 3,351,914
2,500,000 Massachusetts Housing
Finance Agency, Housing
Project, 6.150%, 10/01/15 4/03 at 102 Aaa 2,479,650
1,660,000 Massachusetts Turnpike
Authority, 5.125%, 1/01/23 1/03 at 102 Aaa 1,434,423
3,500,000 Boston City Hospital (FHA-
Insured),
7.625%, 2/15/21 (Pre-
refunded to 8/15/00) 8/00 at 102 Aaa 3,951,955
1,150,000 Haverhill General
Obligation,
7.000%, 6/15/12 6/02 at 102 Aaa 1,244,737
</TABLE>
28
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MICHIGAN - 4.9%
$ 1,535,000 Michigan Housing
Development Authority,
5.625%, 10/15/18 10/03 at 103 Aaa $ 1,397,863
2,400,000 Michigan Hospital
Finance Authority
(Henry Ford Health
System),
5.750%, 9/01/17 9/02 at 102 Aaa 2,275,416
2,000,000 Michigan Strategic Fund
(The Detroit Edison
Company),
6.875%, 12/01/21 12/01 at 102 Aaa 2,112,040
12,130,000 Bay City General
Obligation, Unlimited
Tax, 0.000%, 6/01/21 No Opt. Call Aaa 2,403,923
5,000,000 Caledonia Community
Schools General
Obligation,
6.700%, 5/01/22 (Pre-
refunded to 5/01/02) 5/02 at 102 Aaa 5,506,750
2,000,000 Detroit Sewage Disposal
System, 6.625%, 7/01/21 7/01 at 102 Aaa 2,068,960
2,000,000 Grand Rapids Water
Supply System,
6.500%, 1/01/15 1/01 at 102 Aaa 2,069,180
1,750,000 Grand Traverse County
Hospital Finance
Authority (Munson
Healthcare),
6.250%, 7/01/22 7/02 at 102 Aaa 1,765,208
5,000,000 Jackson County Hospital
Finance Authority
(W. A. Foote Memorial
Hospital),
5.250%, 6/01/23 6/03 at 102 Aaa 4,399,900
8,000,000 Livonia Public School
District, General
Obligation,
5.500%, 5/01/21 5/03 at 102 Aaa 7,385,360
6,085,000 River Rouge School
District, Unlimited
Tax, 5.625%, 5/01/22 5/03 at 101 1/2 Aaa 5,718,440
- -------------------------------------------------------------------------------
MISSISSIPPI - 0.8%
6,400,000 Medical Center
Educational Building
Corporation (University
of Mississippi Medical
Center Project),
5.900%, 12/01/23 12/04 at 102 Aaa 6,134,784
- -------------------------------------------------------------------------------
NEBRASKA - 0.2%
1,500,000 Lancaster County
Hospital Authority No.
1
(Bryan Memorial
Hospital),
6.700%, 6/01/22 6/02 at 102 Aaa 1,575,750
- -------------------------------------------------------------------------------
NEVADA - 1.0%
2,000,000 Clark County Industrial
Development
(Nevada Power Company),
7.200%, 10/01/22 10/02 at 102 Aaa 2,150,300
4,555,000 Reno, Insured Hospital
(St. Mary's Regional
Medical Center),
5.625%, 5/15/23 5/03 at 102 Aaa 4,179,213
1,160,000 University of Nevada
System,
7.125%, 7/01/16 (Pre-
refunded to 7/01/00) 7/00 at 102 Aaa 1,284,526
</TABLE>
29
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW HAMPSHIRE - 0.5%
New Hampshire Higher
Educational and Health
Facilities Authority,
University System:
$ 1,000,000 7.625%, 7/01/20 (Pre-
refunded to 7/01/99) 7/99 at 102 Aaa $ 1,117,350
2,850,000 6.250%, 7/01/20 7/02 at 102 Aaa 2,855,672
- -------------------------------------------------------------------------------
NEW JERSEY - 0.5%
1,480,000 New Jersey Housing and
Mortgage Finance
Agency, Home Mortgage
Purchase,
8.100%, 10/01/17 4/98 at 103 Aaa 1,587,700
2,015,000 Pennsauken Township,
Housing Finance
Corporation,
8.000%, 4/01/11 4/95 at 105 Aaa 2,118,087
- -------------------------------------------------------------------------------
NEW MEXICO - 1.0%
5,000 New Mexico Mortgage
Finance Authority,
Single Family Mortgage,
8.625%, 7/01/17 7/97 at 103 Aaa 5,322
3,000,000 Albuquerque Hospital
System (Presbyterian
Healthcare Services),
6.600%, 8/01/07 8/97 at 102 Aaa 3,107,670
4,445,000 Farmington Pollution
Control (Public Service
Company of New Mexico),
6.375%, 12/15/22 12/02 at 102 Aaa 4,550,080
- -------------------------------------------------------------------------------
NEW YORK - 13.0%
New York State Medical
Care Facilities Finance
Agency, Mental Health
Services Facilities
Improvement:
2,000,000 6.375%, 8/15/17 12/02 at 102 Aaa 2,037,480
6,530,000 5.900%, 8/15/22 8/02 at 102 Aaa 6,373,737
3,000,000 New York State Urban
Development
Corporation,
Correctional
Facilities,
5.250%, 1/01/18 1/03 at 102 Aaa 2,694,450
3,000,000 Dormitory Authority of
the State of New York
(City University),
5.750%, 7/01/18 No Opt. Call Aaa 2,906,160
Dormitory Authority of
the State of New York
(Mount Sinai School of
Medicine):
1,775,000 5.000%, 7/01/16 7/04 at 102 Aaa 1,556,977
8,375,000 5.000%, 7/01/21 7/04 at 102 Aaa 7,232,985
Metropolitan
Transportation
Authority
Commuter Facilities:
4,955,000 6.250%, 7/01/17 7/02 at 102 Aaa 5,027,938
5,000,000 6.375%, 7/01/18 7/04 at 101 1/2 Aaa 5,135,550
6,925,000 6.250%, 7/01/22 7/02 at 102 Aaa 6,992,519
New York City General
Obligation:
5,715,000 6.625%, 8/01/12 (Pre-
refunded to 8/01/02) 8/02 at 101 1/2 Aaa 6,258,497
285,000 6.625%, 8/01/12 8/02 at 101 1/2 Aaa 298,917
3,010,000 6.000%, 5/15/16 5/03 at 101 1/2 Aaa 2,991,790
3,750,000 7.000%, 2/01/18 2/02 at 101 1/2 Aaa 4,036,838
1,000,000 New York City
Educational
Construction Fund,
5.625%, 4/01/13 4/04 at 101 1/2 Aaa 958,880
</TABLE>
30
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK (CONTINUED)
$ 3,885,000 New York City Health and
Hospitals Corporation,
Health System,
5.750%, 2/15/22 2/03 at 102 Aaa $ 3,691,333
New York City Municipal
Water Finance
Authority, Water and
Sewer System:
4,155,000 6.750%, 6/15/14 (Pre-
refunded to 6/15/99) 6/99 at 101 1/2 Aaa 4,496,458
2,025,000 6.750%, 6/15/14 6/99 at 101 1/2 Aaa 2,107,721
6,330,000 6.750%, 6/15/16 6/01 at 101 Aaa 6,648,536
4,470,000 5.750%, 6/15/18 6/02 at 101 1/2 Aaa 4,297,771
New York City Transit
Authority Transit
Facilities (Livingston
Plaza Project):
1,000,000 7.500%, 1/01/20 (Pre-
refunded to 1/01/00) 1/00 at 102 Aaa 1,123,360
3,900,000 5.400%, 1/01/18 No Opt. Call Aaa 3,578,991
New York City Industrial
Development Agency,
Civic Facility (USTA
National Tennis Center
Incorporated Project):
3,500,000 6.500%, 11/15/10 11/04 at 102 Aaa 3,696,630
3,000,000 6.600%, 11/15/11 11/04 at 102 Aaa 3,181,980
2,765,000 Suffolk County Water
Authority, Water
System, 5.000%, 6/01/17 6/03 at 102 Aaa 2,433,670
Triborough Bridge and
Tunnel Authority,
Special Obligation:
5,240,000 6.875%, 1/01/15 1/01 at 102 Aaa 5,576,775
3,015,000 5.500%, 1/01/17 1/02 at 100 Aaa 2,829,065
- -------------------------------------------------------------------------------
NORTH CAROLINA - 0.3%
2,500,000 Charlotte Convention
Facility, Certificates
of Participation,
5.250%, 12/01/20 12/03 at 102 Aaa 2,273,650
- -------------------------------------------------------------------------------
OHIO - 0.8%
1,000,000 Columbus City School
District,
General Obligation,
Unlimited Tax,
7.000%, 12/01/11 (Pre-
refunded to 12/01/00) 12/00 at 102 Aaa 1,107,310
2,500,000 Dublin City School
District, General
Obligation,
6.200%, 12/01/19 12/02 at 102 Aaa 2,538,075
1,500,000 Pickerington Local
School District,
General Obligation,
5.375%, 12/01/19 12/04 at 102 Aaa 1,385,190
1,000,000 South Euclid-Lyndhurst
City School District,
General Obligation,
Unlimited Tax,
5.300%, 12/01/14 12/04 at 102 Aaa 929,340
- -------------------------------------------------------------------------------
OKLAHOMA - 0.7%
5,000,000 Oklahoma Industries
Authority (Baptist
Center--South Oklahoma
City Hospital),
6.250%, 08/15/12 8/05 at 102 Aaa 5,047,250
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
OKLAHOMA (CONTINUED)
$ 435,000 Muskogee County Home
Finance Authority,
Single Family Mortgage,
7.600%, 12/01/10 6/00 at 102 Aaa $ 465,789
- -------------------------------------------------------------------------------
PENNSYLVANIA - 3.1%
5,000,000 Lehigh County General
Purpose Authority (St.
Luke's Hospital of
Bethlehem),
6.250%, 7/01/22 7/02 at 102 Aaa 5,038,150
North Penn Water
Authority:
750,000 6.875%, 11/01/19 11/04 at 101 Aaa 804,638
3,000,000 7.000%, 11/01/24 11/04 at 101 Aaa 3,245,850
500,000 Northampton County
Higher Educational
Authority (Moravian
College),
7.150%, 6/01/09 6/98 at 101 Aaa 527,975
1,000,000 Northampton County
Higher Education
Authority (Lehigh
University),
7.000%, 10/15/11 10/01 at 102 Aaa 1,085,210
7,500,000 Philadelphia Water and
Wastewater System,
5.500%, 6/15/14 6/03 at 102 Aaa 7,049,475
3,900,000 Philadelphia Municipal
Authority, Justice
Lease, 7.125%, 11/15/18
(Pre-refunded to
11/15/01) 11/01 at 102 Aaa 4,375,722
1,000,000 Washington County
Hospital Authority,
Hospital Refunding,
7.150%, 7/01/17 7/00 to 102 Aaa 1,054,030
- -------------------------------------------------------------------------------
RHODE ISLAND - 2.7%
Rhode Island Depositors
Economic Protection
Corporation, Special
Obligation:
3,750,000 6.000%, 8/01/17 8/03 at 102 Aaa 3,686,288
2,250,000 6.625%, 8/01/19 (Pre-
refunded to 8/01/02) 8/02 at 102 Aaa 2,468,723
6,255,000 Rhode Island Health and
Educational Building
Corporation, Higher
Education Auxiliary
Enterprise,
5.250%, 9/15/23 9/03 at 102 Aaa 5,449,043
4,000,000 Cranston, General
Obligation,
7.200%, 7/15/11 (Pre-
refunded to 7/15/01) 7/01 at 101 1/2 Aaa 4,474,920
3,130,000 Kent County Water
Authority,
6.350%, 7/15/14 7/04 at 102 Aaa 3,219,142
1,000,000 Providence Housing
Development
Corporation, FHA-
Insured (Barbara Jordan
Apartments), 6.650%,
7/01/15 7/04 at 102 Aaa 1,026,320
- -------------------------------------------------------------------------------
SOUTH CAROLINA - 1.3%
1,000,000 Aiken Water and Sewer
System, 7.250%, 1/01/14 1/00 at 102 Aaa 1,067,190
Charleston County Public
Facilities Corporation,
Certificates of
Participation:
1,500,000 6.875%, 6/01/14 6/04 at 102 Aaa 1,617,600
2,500,000 7.00%, 6/01/19 6/04 at 102 Aaa 2,702,175
Rock Hill Combined
Utility System Revenue:
2,000,000 6.375%, 1/01/15 1/01 at 102 Aaa 2,046,160
2,000,000 7.000%, 1/01/20 (Pre-
refunded to 1/01/00) 1/00 at 102 Aaa 2,189,660
</TABLE>
32
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH DAKOTA - 0.1%
$ 1,000,000 South Dakota Health and
Educational Facilities
Authority (McKennan
Hospital), 7.250%, 7/01/15 7/00 at 102 Aaa $ 1,060,450
- -------------------------------------------------------------------------------
TENNESSEE - 0.7%
1,375,000 Memphis-Shelby County
Airport Authority,
5.650%, 9/01/15 9/03 at 102 Aaa 1,309,303
3,000,000 Metropolitan Nashville
Airport Authority,
Airport Improvement,
6.600%, 7/01/15 7/01 at 102 Aaa 3,130,440
1,000,000 Robertson and Sumner
Counties, White House
Utility District,
6.375%, 1/01/22 1/02 at 102 Aaa 1,024,650
- -------------------------------------------------------------------------------
TEXAS - 5.0%
6,080,000 Texas Health Facilities
Development Corporation
(All Saints Episcopal
Hospitals of Fort Worth),
6.250%, 8/15/22 8/03 at 102 Aaa 6,098,301
800,000 Texas Housing Agency,
Single Family Mortgage,
7.875%, 9/01/17 9/96 at 102 Aa 825,080
3,000,000 Bexar County Health
Facilities Development
Corporation (Baptist
Memorial Hospital System
Project), 6.750%, 8/15/19 8/04 at 102 Aaa 3,133,860
5,000,000 Bexar Metropolitan Water
District, 5.000%, 5/01/19 5/04 at 100 Aaa 4,308,850
4,575,000 Harris County Toll Road,
Senior Lien,
6.500%, 8/15/17 (Pre-
refunded to 8/15/02) 8/02 at 102 Aaa 4,992,332
1,000,000 Harris County Hospital
District, 7.400%, 2/15/10 No Opt. Call Aaa 1,150,400
500,000 Houston Hotel Occupancy Tax
and Parking Facilities,
7.000%, 7/01/15 7/01 at 100 Aaa 529,370
4,820,000 Houston Water and Sewer
System, Junior Lien,
6.375%, 12/01/17 12/01 at 102 Aaa 4,931,294
825,000 Lower Colorado River
Authority, Priority
Refunding, 7.000%, 1/01/11 1/01 at 102 Aaa 883,064
3,205,000 Lower Colorado River
Authority, 6.000%, 1/01/17 1/02 at 100 Aaa 3,206,442
3,250,000 Sabine River Authority,
Pollution Control (Texas
Utilities Electric
Company), 5.550%, 5/01/22 11/03 at 102 Aaa 3,009,858
5,000,000 Tarrant County Health
Facilities Development
Corporation (Fort Worth
Osteopathic Hospital),
6.000%, 5/15/21 No Opt. Call Aaa 4,870,650
- -------------------------------------------------------------------------------
UTAH - 1.1%
335,000 Utah Housing Finance
Agency, Single Family
Mortgage, 8.375%, 7/01/19 1/09 at 100 AA 391,494
</TABLE>
33
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UTAH (CONTINUED)
Provo City Energy System:
$ 2,300,000 5.500%, 11/15/11 5/03 at 102 Aaa $ 2,188,772
500,000 5.750%, 5/15/14 5/03 at 102 Aaa 479,755
1,500,000 West Valley City Municipal
Building Authority,
7.700%, 1/15/10 (Pre-
refunded to 1/15/99) 1/99 at 102 Aaa 1,665,900
3,500,000 White City Water System,
6.600%, 2/01/25 2/05 at 100 Aaa 3,594,570
- -------------------------------------------------------------------------------
VIRGINIA - 0.7%
1,000,000 Fairfax County, Sewer
Revenue,
7.000%, 11/15/16 (Pre-
refunded to 11/15/99) 11/99 at 102 Aaa 1,099,250
2,860,000 Richmond Metropolitan
Authority Expressway,
5.750%, 7/15/22 7/02 at 100 Aaa 2,756,783
1,050,000 Roanoke County Water
System,
6.000%, 7/01/31 (Pre-
refunded to 7/01/01) 7/01 at 100 Aaa 1,091,349
- -------------------------------------------------------------------------------
WASHINGTON - 5.3%
2,750,000 Washington Health Care
Facilities Authority
(Group Health Cooperative
of Puget Sound),
6.250%, 12/01/21 12/00 at 102 Aaa 2,751,320
6,000,000 Washington Health Care
Facilities Authority
(Swedish Hospital Medical
Center of Seattle),
6.300%, 11/15/22 11/02 at 102 Aaa 5,983,620
Washington Public Power
Supply System,
Nuclear Project No. 1:
5,000,000 6.250%, 7/01/17 7/02 at 102 Aaa 5,006,450
6,500,000 5.700%, 7/01/17 7/03 at 102 Aaa 6,049,810
5,000,000 Washington Public Power
Supply System,
Nuclear Project No. 2,
5.400%, 7/01/05 No Opt. Call Aaa 4,925,700
2,500,000 Washington Public Power
Supply System,
Nuclear Project No. 3,
7.250%, 7/01/16 (Pre-
refunded to 7/01/99) 7/99 at 102 Aaa 2,759,275
1,000,000 Marysville Water and Sewer,
7.000%, 12/01/11 (Pre-
refunded to 12/01/03) 12/03 at 100 Aaa 1,111,110
Seattle Metropolitan
Municipality Sewer System:
5,000,000 5.400%, 1/01/14 1/03 at 102 Aaa 4,626,500
3,080,000 5.400%, 1/01/15 1/03 at 102 Aaa 2,843,547
2,000,000 Walla Walla Water and Sewer
System, 6.200%, 8/01/12 8/02 at 102 Aaa 2,031,219
2,000,000 Whatcom County School
District No. 501,
General Obligation,
6.125%, 12/01/13 12/04 at 100 Aaa 1,961,559
- -------------------------------------------------------------------------------
WEST VIRGINIA - 0.7%
1,000,000 West Virginia School
Building Authority,
Capital Improvement,
7.250%, 7/01/15 (Pre-
refunded to 7/01/00) 7/00 at 102 Aaa 1,113,369
</TABLE>
34
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL OPT. CALL
AMOUNT DESCRIPTION PROVISIONS* RATINGS** MARKET VALUE
- ------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
WEST VIRGINIA
(CONTINUED)
$ 5,000,000 Mason County Pollution
Control (Appalachian
Power Company),
6.850%, 6/01/22 6/02 at 102 Aaa $ 5,207,799
- ------------------------------------------------------------------------------
WISCONSIN - 1.7%
7,020,000 Wisconsin Health and
Educational Facilities
Authority (Sisters of
the Sorrowful
Mother--Ministry
Corporation),
6.125%, 8/15/22 2/03 at 102 Aaa 6,824,562
1,000,000 Wisconsin Municipal
Insurance Commission,
8.700%, 4/01/07 4/97 at 102 Aaa 1,089,739
1,050,000 Ashland School District
General Obligation,
6.900%, 4/01/10 (Pre-
refunded to 4/01/00) 4/00 at 100 Aaa 1,132,288
2,000,000 Superior Limited
Obligation
(Detroit Edison
Company),
6.900%, 8/01/21 No Opt. Call Aaa 2,234,099
1,000,000 Three Lakes School
District, General
Obligation,
6.750%, 4/01/12 (Pre-
refunded to 4/01/03) 4/03 at 100 Aaa 1,089,199
- ------------------------------------------------------------------------------
WYOMING - 0.3%
2,000,000 University of Wyoming
Facilities,
7.100%, 6/01/10 6/00 at 101 Aaa 2,153,519
- ------------------------------------------------------------------------------
PUERTO RICO - 0.6%
3,750,000 Commonwealth of Puerto
Rico, General
Obligation,
6.600%, 7/01/13 (Pre-
refunded to 7/01/02) 7/02 at 101 1/2 Aaa 4,123,349
- ------------------------------------------------------------------------------
$752,003,000 Total Investments -
(cost $726,819,723) -
98.9% 746,237,257
- ------------------------------------------------------------------------------
- -------------------
Other Assets Less
Liabilities - 1.1% 8,540,950
- ------------------------------------------------------------------------------
Net Assets - 100% $754,778,207
</TABLE>
- --------------------------------------------------------------------------------
35
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED MUNICIPAL BOND FUND--CONTINUED
<TABLE>
<CAPTION>
NUMBER MARKET
STANDARD & POOR'S MOODY'S OF ISSUES MARKET VALUE PERCENT
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 237 $742,984,183 99%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 3 3,253,074 1
PORTFOLIO OF
INVESTMENTS:
- ----------------------------------------------------------------------------------
TOTAL 240 $746,237,257 100%
</TABLE>
- --------------------------------------------------------------------------------
All of the bonds in the portfolio are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities to ensure the timely payment of principal and interest.
* Optional Call Provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent public accountants):
Using the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
36
<PAGE>
STATEMENT OF NET ASSETS
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- ------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $2,704,785,376 $746,237,257
Temporary investments in short-term municipal
securities, at market value which equals cost
(note 1) 2,700,000 --
Cash 669,552 1,167,558
Receivables:
Interest 45,210,467 10,140,262
Shares sold 602,478 157,707
Investments sold -- 40,000
Other assets 30,882 9,656
-------------- ------------
Total assets 2,753,998,755 757,752,440
-------------- ------------
LIABILITIES
Payable for shares reacquired 947,975 303,139
Accrued expenses:
Management fees (note 7) 942,248 272,800
Other 617,944 88,837
Dividends payable 10,312,489 2,309,457
-------------- ------------
Total liabilities 12,820,656 2,974,233
-------------- ------------
Net assets (note 8) $2,741,178,099 $754,778,207
-------------- ------------
Class A Shares (note 1)
Net Assets $ N/A $ 14,096,504
-------------- ------------
Shares outstanding N/A 1,355,512
-------------- ------------
Net asset value and redemption price per share $ N/A $ 10.40
-------------- ------------
Offering price per share (net asset value per
share plus maximum sales charge of 4.50% of
offering price) $ N/A $ 10.89
-------------- ------------
Class C Shares (note 1)
Net Assets $ N/A $ 3,979,241
-------------- ------------
Shares outstanding N/A 386,035
-------------- ------------
Net asset value, offering and redemption price
per share $ N/A $ 10.31
-------------- ------------
Class R Shares (note 1)
Net Assets $2,741,178,099 $736,702,462
-------------- ------------
Shares outstanding 304,572,559 70,992,270
-------------- ------------
Net asset value and redemption price per share $ 9.00 $ 10.38
-------------- ------------
Offering price per share (net asset value per
share plus maximum sales charge of 4.75% of
offering price) $ 9.45 $ N/A
-------------- ------------
</TABLE>
N/A--Muni Bond is not authorized to issue Class A Shares or Class C Shares;
Ins. Muni Bond Class R Shares are sold without a sales charge.
See accompanying notes to financial statements.
37
<PAGE>
STATEMENT OF OPERATIONS
Year Ended February 28, 1995
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- ------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest income (note 1) $167,929,987 $45,571,804
Taxable market discount -- 4,697
------------ -----------
Total income 167,929,987 45,576,501
------------ -----------
Expenses (note 2):
Management fees (note 7) 11,932,164 3,449,591
12b-1 distribution and service fees (note 1) -- 18,173
Shareholders' servicing agent fees and expenses 2,319,241 654,783
Custodian's fees and expenses 290,635 93,642
Directors' fees and expenses (note 7) 29,527 9,281
Professional fees 103,583 24,210
Shareholders' reports--printing and mailing
expenses 442,979 268,338
Federal and state registration fees 298,970 97,443
Portfolio insurance expense -- 17,052
Other expenses 52,161 24,267
------------ -----------
Total expenses before expense reimbursement 15,469,260 4,656,780
Expense reimbursement from investment adviser
(note 7) -- (10,570)
------------ -----------
Net expenses 15,469,260 4,646,210
------------ -----------
Net investment income 152,460,727 40,930,291
------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS
Net realized gain (loss) from investment
transactions, net of taxes, if applicable
(notes 1 and 5) 9,508,194 (1,781,054)
Net change in unrealized appreciation or
depreciation of investments (67,140,015) (25,968,067)
------------ -----------
Net gain (loss) from investments (57,631,821) (27,749,121)
------------ -----------
Net increase in net assets from operations $ 94,828,906 $13,181,170
------------ -----------
</TABLE>
See accompanying notes to financial statements.
38
<PAGE>
STATEMENT OF CHANGES IN
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
NET ASSETS
<TABLE>
<CAPTION>
MUNI BOND INS. MUNI BOND
- ---------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
2/28/95 2/28/94 2/28/95 2/28/94
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 152,460,727 $ 140,045,709 $ 40,930,291 $ 34,985,971
Net realized gain (loss)
from investment
transactions, net of
taxes, if applicable 9,508,194 33,668,121 (1,781,054) 3,722,189
Net change in unrealized
appreciation or
depreciation of
investments (67,140,015) (57,025,692) (25,968,067) (4,767,784)
-------------- -------------- ------------ ------------
Net increase in net
assets from operations 94,828,906 116,688,138 13,181,170 33,940,376
-------------- -------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS (note 1)
From undistributed net
investment income:
Class A N/A N/A (204,455) --
Class C N/A N/A (45,156) --
Class R (151,297,051) (139,098,668) (41,157,453) (34,323,272)
From accumulated net
realized gains from
investment
transactions:
Class A N/A N/A (6,709) --
Class C N/A N/A (1,121) --
Class R (22,411,997) (26,833,320) (1,157,602) (3,876,453)
-------------- -------------- ------------ ------------
Decrease in net assets
from distributions to
shareholders (173,709,048) (165,931,988) (42,572,496) (38,199,725)
-------------- -------------- ------------ ------------
FUND SHARE TRANSACTIONS
(note 3)
Net proceeds from sales
of shares:
Class A N/A N/A 15,273,227 --
Class C N/A N/A 4,686,336 --
Class R 469,226,165 554,702,232 158,370,453 226,307,056
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment
income and from net
realized gains from
investment
transactions:
Class A N/A N/A 105,479 --
Class C N/A N/A 25,888 --
Class R 141,568,061 138,399,306 28,508,956 26,207,900
-------------- -------------- ------------ ------------
610,794,226 693,101,538 206,970,339 252,514,956
-------------- -------------- ------------ ------------
Cost of shares redeemed:
Class A N/A N/A (1,930,617) --
Class C N/A N/A (893,066) --
Class R (490,742,684) (315,520,307) (165,891,052) (69,573,599)
-------------- -------------- ------------ ------------
(490,742,684) (315,520,307) (168,714,735) (69,573,599)
-------------- -------------- ------------ ------------
Net increase in net
assets derived from
Fund share
transactions 120,051,542 377,581,231 38,255,604 182,941,357
-------------- -------------- ------------ ------------
Net increase in net
assets 41,171,400 328,337,381 8,864,278 178,682,008
Net assets at beginning
of year 2,700,006,699 2,371,669,318 745,913,929 567,231,921
-------------- -------------- ------------ ------------
Net assets at end of
year $2,741,178,099 $2,700,006,699 $754,778,207 $745,913,929
-------------- -------------- ------------ ------------
Balance of undistributed
net investment income
at end
of year $ 2,133,643 $ 969,967 $ 189,790 $ 666,563
-------------- -------------- ------------ ------------
</TABLE>
N/A--Muni Bond is not authorized to issue Class A Shares or Class C Shares.
See accompanying notes to financial statements.
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT
ACCOUNTING POLICIES
At February 28, 1995, the nationally diversified Funds
covered in this report (the "Funds") are Nuveen Municipal
Bond Fund, Inc. and Nuveen Insured Tax-Free Bond Fund, Inc.
(comprising Nuveen Insured Municipal Bond Fund). Each Fund
invests primarily in a diversified portfolio of municipal
obligations issued by state and local government authorities.
Municipal Bond issues its shares at a price equal to net
asset value plus varying sales charges. Insured Municipal
Bond issues shares of each of its classes at a price equal to
net asset value of such classes plus the appropriate front-
end sales charge, if any.
The following is a summary of significant accounting
policies followed by each Fund in the preparation of their
financial statements in accordance with generally accepted
accounting principles.
Securities Valuation
Portfolio securities for which market quotations are readily
available are valued at the mean between the quoted bid and
asked prices or the yield equivalent. Portfolio securities
for which market quotations are not readily available are
valued at fair value by consistent application of methods
determined in good faith by the Board of Directors. Temporary
investments in securities that have variable rate and demand
features qualifying them as short-term securities are traded
and valued at principal amount.
Securities Securities transactions are recorded on a trade date basis.
Transactions Realized gains and losses from such transactions are
determined on the specific identification method. Securities
purchased or sold on a when-issued or delayed delivery basis
may be settled a month or more after the transaction date.
Any securities so purchased are subject to market fluctuation
during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current
value at least equal to the amount of their purchase
commitments. At February 28, 1995, there were no such
purchase commitments in either of the Funds.
40
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
Interest Income Interest income is determined on the basis of interest
accrued and discount earned, adjusted for amortization of
premiums or discounts on long-term debt securities when
required for federal income tax purposes.
Dividends and Net investment income is declared as a dividend monthly and
Distributions to payment is made or reinvestment is credited to shareholder
Shareholders accounts after month-end. Net realized gains from securities
transactions are distributed to shareholders not less
frequently than annually only to the extent they exceed
available capital loss carryovers.
Distributions to shareholders of net investment income and
net realized gains from investment transactions are recorded
on the ex-dividend date. The amount and timing of such
distributions are determined in accordance with federal
income tax regulations, which may differ from generally
accepted accounting principles. Accordingly, temporary over-
distributions as a result of these differences may result and
will be classified as either distributions in excess of net
investment income or distributions in excess of accumulated
net realized gains from investment transactions, if
applicable.
Federal Income Each Fund is a separate taxpayer for federal income tax
Taxes purposes and intends to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies by distributing all of its net investment income,
in addition to any significant amounts of net realized gains
from investments, to shareholders. The Funds currently
consider significant net realized gains as amounts in excess
of $.001 per share. Furthermore, each Fund intends to satisfy
conditions which will enable interest from municipal
securities, which is exempt from regular federal income tax,
to retain such tax exempt status when distributed to the
shareholders of the Funds. All income dividends paid during
the fiscal year ended February 28, 1995, have been designated
Exempt Interest Dividends.
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Insurance Insured Municipal Bond invests in municipal securities which
are covered by insurance guaranteeing timely payment of
principal and interest thereon or backed by an escrow or
trust account containing sufficient U.S. Government or U.S.
Government agency securities to ensure the timely payment of
principal and interest. Each insured municipal security is
covered by Original Issue Insurance, Secondary Market
Insurance or Portfolio Insurance. Such insurance does not
guarantee the market value of the municipal securities or the
value of the Fund's
shares. Original Issue Insurance and Secondary Market
Insurance remain in effect as long as the municipal
securities covered thereby remain outstanding and the insurer
remains in business, regardless of whether the Fund
ultimately disposes of such municipal securities.
Consequently, the market value of the municipal securities
covered by Original Issue Insurance or Secondary Market
Insurance may reflect value attributable to the insurance.
Portfolio Insurance is effective only while the municipal
securities are held by the Fund. Accordingly, neither the
prices used in determining the market value of the underlying
municipal securities nor the net asset value of the Fund's
shares include value, if any, attributable to the Portfolio
Insurance. Each policy of the Portfolio Insurance does,
however, give the Fund the right to obtain permanent
insurance with respect to the municipal security covered by
the Portfolio Insurance policy at the time of its sale.
42
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
Flexible Sales Charge
Effective September 6, 1994, Insured Municipal Bond commenced
Program offering Class "A" Shares and Class "C" Shares. Class "A"
Shares incur a front-end sales charge and an annual 12b-1
service fee. Class "C" Shares are sold without a sales charge
but incur annual 12b-1 distribution and service fees.
Prior to the offering of Class "A" and Class "C" Shares, the
shares outstanding were renamed Class "R" and are not subject
to any 12b-1 distribution or service fees. Effective with the
offering of the new classes, Class "R" Shares are generally
available only for reinvestment of dividends by current "R"
shareholders and for already established Nuveen Unit
Investment Trust reinvestment accounts.
Municipal Bond is not authorized to issue Class "A" Shares
or Class "C" Shares, therefore, in the Notes to Financial
Statements "N/A" represents not-applicable.
Derivative Financial
In October 1994, the Financial Accounting Standards Board
Instruments issued Statement of Financial Accounting Standards (FASB) No.
119 Disclosure about Derivative Financial Instruments and
Fair Value of Financial Instruments which prescribes
disclosure requirements for transactions in certain
derivative financial instruments including futures, forward,
swap, and option contracts, and other financial instruments
with similar characteristics. Although the Funds are
authorized to invest in such financial instruments, and may
do so in the future, they did not make any such investments
during the fiscal year ended February 28, 1995, other than
occasional purchases of high quality synthetic money market
securities which were held temporarily pending the re-
investment in long-term portfolio securities.
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS
2. EXPENSE ALLOCATION
Expenses of the Insured Municipal Bond Fund that are not
directly attributable to any class of shares are prorated
among the classes based on the relative net assets of each
class. Expenses directly attributable to a class of shares
are recorded to the specific class. A breakdown of the class
level expenses, as well as the total fund level expenses, for
the year ended February 28, 1995, are as follows:
<TABLE>
<CAPTION>
INS. MUNI
BOND
- -------------------------------------------------------
<S> <C>
CLASS A
12b-1 service fees $ 9,661
Shareholder servicing agent fees and
expenses 8,467
Shareholder reports-printing and mailing
expenses 6,781
Federal and state registration fees 4,940
----------
Total class level expenses 29,849
Total fund level expenses 19,324
----------
Total expenses before expense
reimbursement 49,173
Less: Expense reimbursement from
investment adviser (10,551)
----------
Net expenses--Class A $ 38,622
----------
CLASS C
12b-1 service fees $ 2,128
12b-1 distribution fees 6,384
Shareholder servicing agent fees and
expenses 597
Shareholder reports-printing and mailing
expenses 438
Federal and state registration fees 1,108
----------
Total class level expenses 10,655
Total fund level expenses 4,261
----------
Total expenses before expense
reimbursement 14,916
Less: Expense reimbursement from
investment adviser (19)
----------
Net expenses--Class C $ 14,897
----------
CLASS R
Shareholder servicing agent fees and
expenses $ 645,719
Shareholder reports-printing and mailing
expenses 261,119
Federal and state registration fees 91,395
----------
Total class level expenses 998,233
Total fund level expenses 3,594,458
----------
Total expenses before expense
reimbursement 4,592,691
Less: Expense reimbursement from
investment advisers --
----------
Net expenses--Class R $4,592,691
----------
Net expenses--Fund $4,646,210
----------
</TABLE>
44
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
3. FUND SHARES
Transactions in shares were as follows:
<TABLE>
<CAPTION>
MUNI BOND INS. MUNI BOND
- ----------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
2/28/95 2/28/94 2/28/95 2/28/94
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A N/A N/A 1,538,119 --
Class C N/A N/A 474,253 --
Class R 52,970,376 58,943,195 15,709,700 20,708,650
Shares issued to
shareholders due to
reinvestment of
distributions from net
investment income and
from net realized
gains from investment
transactions:
Class A N/A N/A 10,686 --
Class C N/A N/A 2,644 --
Class R 15,973,465 14,663,493 2,822,384 2,386,849
----------- ----------- ----------- ----------
68,943,841 73,606,688 20,557,786 23,095,499
----------- ----------- ----------- ----------
Shares redeemed:
Class A N/A N/A (193,293) --
Class C N/A N/A (90,862) --
Class R (55,355,782) (33,503,455) (16,561,539) (6,346,641)
----------- ----------- ----------- ----------
(55,355,782) (33,503,455) (16,845,694) (6,346,641)
----------- ----------- ----------- ----------
Net increase 13,588,059 40,103,233 3,712,092 16,748,858
----------- ----------- ----------- ----------
</TABLE>
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
4. DISTRIBUTIONS TO SHAREHOLDERS
On March 9, 1995, the Funds declared dividend distributions
from their ordinary income which were paid on April 3, 1995,
to shareholders of record on March 9, 1995 as follows:
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- ---------------------------------------
<S> <C> <C>
Dividend per share:
Class A $ N/A $.0450
Class C N/A .0385
Class R .0430 .0480
------ ------
</TABLE>
5. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in
municipal securities and temporary municipal investments for
the year ended February 28, 1995, were as follows:
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- ----------------------------------------------------------------
<S> <C> <C>
PURCHASES
Investments in municipal securities $597,214,116 $211,453,612
Temporary municipal investments 410,185,000 113,800,000
SALES
Investments in municipal securities 448,105,688 176,027,201
Temporary municipal investments 445,685,000 120,400,000
------------ ------------
</TABLE>
At February 28, 1995, the cost of investments for federal
income tax purposes was the same as the cost for financial
reporting purposes for each Fund.
At February 28, 1995, Insured Muni Bond had a capital loss
carryforward of $1,780,735 available for federal income tax
purposes to be applied against future security gains, if any.
If not applied the carryover will expire in the year 2003.
46
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
6. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized
depreciation of investments at February 28, 1995, were as
follows:
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- ------------------------------------------------------------------------
<S> <C> <C>
Gross Unrealized:
Appreciation $118,858,244 $29,302,832
Depreciation (36,137,239) (9,885,298)
------------ -----------
Net unrealized appreciation (depreciation) $ 82,721,005 $19,417,534
------------ -----------
</TABLE>
7. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreement with Nuveen
Advisory Corp. (the "Adviser"), a wholly owned subsidiary of
The John Nuveen Company, each Fund pays to the Adviser an
annual management fee, payable monthly, at the rates set
forth below which are based upon the average daily net asset
value of each Fund:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
- ----------------------------------------------------
<S> <C>
For the first $125,000,000 .5 of 1%
For the next $125,000,000 .4875 of 1
For the next $250,000,000 .475 of 1
For the next $500,000,000 .4625 of 1
For the next $1,000,000,000 .45 of 1
For net assets over $2,000,000,000 .425 of 1
</TABLE>
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The management fee is reduced by, or the Adviser assumes
certain expenses of each Fund, in an amount necessary to
prevent the total expenses of each Fund (including the
management fee, but excluding interest, taxes, fees incurred
in acquiring and disposing of portfolio securities, 12b-1
Service and Distribution fees, if applicable, and to the
extent permitted, extraordinary expenses) in any fiscal year
from exceeding .75 of 1% of the average daily net asset value
of the Funds.
The management fee referred to above compensates the Adviser
for overall investment advisory and administrative services,
and general office facilities. The Funds pay no compensation
directly to their directors who are affiliated with the
Adviser or to their officers, all of whom receive
remuneration for their services to the Funds from the
Adviser.
8. COMPOSITION OF NET ASSETS
At February 28, 1995, the Funds had common stock authorized
of $.10 par value per share for Municipal Bond and $.01 par
value per share for Insured Municipal Bond. The composition
of net assets as well as the number of authorized shares is
as follows:
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- ------------------------------------------------------------------------------
<S> <C> <C>
Capital paid-in $2,654,349,505 $736,951,618
Balance of undistributed net investment income 2,133,643 189,790
Undistributed net realized gain (loss) from
investment transactions, net of taxes, if
applicable 1,973,946 (1,780,735)
Net unrealized appreciation (depreciation) of
investments 82,721,005 19,417,534
-------------- ------------
Net assets $2,741,178,099 $754,778,207
-------------- ------------
Authorized Shares:
Class A N/A 340,000,000
Class C N/A 460,000,000
Class R 750,000,000 200,000,000
-------------- ------------
</TABLE>
48
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
9. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include
general obligation, escrowed and revenue bonds. At February
28, 1995, the revenue sources by municipal purpose for these
investments, expressed as a percent of total investments,
were as follows:
<TABLE>
<CAPTION>
MUNI INS. MUNI
BOND BOND
- -------------------------------------------
<S> <C> <C>
Revenue Bonds:
Health Care Facilities 12% 21%
Electric Utilities 19 5
Housing Facilities 15 1
Water/Sewer Facilities 7 14
Educational Facilities 1 7
Transportation 6 5
Pollution Control 4 5
Lease Rental Facilities 2 5
Other 9 8
General Obligation Bonds 6 15
Escrowed Bonds 19 14
- -------------------------------------------
100% 100%
</TABLE>
Certain long-term and intermediate-term investments owned by
the Funds are covered by insurance issued by several private
insurers or are backed by an escrow or trust containing U.S.
Government or U.S. Government agency securities, either of
which ensure the timely payment of principal and interest in
the event of default (29% for Municipal Bond, 100% for
Insured Municipal Bond) Such insurance, however, does not
guarantee the market value of the municipal securities or the
value of the Funds' shares.
For additional information regarding each investment
security, refer to the Portfolio of Investments of each Fund.
49
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
---------------------------------------------------------------------
Net realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments** income capital gains
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNI BOND
- ----------------------------------------------------------------------------------------------
Year Ended
2/28/95 $9.280 $.515 $(.209) $(.511) $(.075)
2/28/94 9.450 .519 (.075) (.516) (.098)
2/28/93 9.080 .555 .414 (.544) (.055)
5 Months Ended
2/29/92 9.040 .239 .080 (.239) (.040)
Year Ended
9/30/91 8.650 .579 .438 (.589) (.038)
9/30/90 8.730 .596 (.080) (.596) --
9/30/89 8.520 .597 .239 (.597) (.029)
9/30/88 8.020 .596 .536 (.596) (.036)
9/30/87 8.780 .598 (.614) (.598) (.146)
9/30/86 7.830 .595 1.162 (.595) (.212)
9/30/85 7.180 .586 .650 (.586) --
- ----------------------------------------------------------------------------------------------
INS. MUNI BOND
- ----------------------------------------------------------------------------------------------
Class A
9/7/94 to 2/28/95 10.310 .264+ .115 (.273) (.016)
Class C
9/8/94 to 2/28/95 10.290 .227+ .075 (.266) (.016)
Class R
Year Ended
2/28/95 10.810 .573 (.407) (.580) (.016)
2/28/94 10.850 .574 .012 (.565) (.061)
2/28/93 10.030 .591 .880 (.589) (.062)
2/29/92 9.690 .612 .425 (.617) (.080)
2/28/91 9.520 .617 .198 (.611) (.034)
2/28/90 9.350 .627 .262 (.630) (.089)
2/29/89 9.300 .629 .050 (.629) --
2/29/88 9.790 .637+ (.490) (.637) --
12/10/86 to 2/28/87 9.600 .127+ .190 (.127) --
- ----------------------------------------------------------------------------------------------
</TABLE>
* Annualized
** Net of taxes, if applicable. See Note 1 of the Notes to Financial
Statements.
+ Reflects the waiver of certain management fees and reimbursement of certain
other expenses by the Adviser. See note 7 of Notes to Financial Statements.
++ Total Return on Net Asset Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in net
asset value per share.
50
<PAGE>
NUVEEN TAX-FREE VALUE FUNDS ANNUAL REPORT FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
------------------------------------------------------------------
Net
asset Total Return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average Portfolio
period value++ (in thousands) net assets net assets turnover rate
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
$9.000 3.60% $2,741,178 .59% 5.79% 17%
9.280 4.79 2,700,007 .62 5.49 15
9.450 11.04 2,371,669 .61 5.95 14
9.080 3.56 1,835,708 .62* 6.24* 6
9.040 12.15 1,661,420 .60 6.48 10
8.650 6.04 1,323,623 .62 6.78 8
8.730 10.07 1,198,833 .64 6.85 12
8.520 14.50 945,361 .65 7.11 8
8.020 (.39) 764,092 .68 6.85 16
8.780 23.02 668,416 .71 6.95 39
7.830 17.73 459,627 .73 7.68 28
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
10.400 3.84 14,097 1.00*+ 5.55*+ 25
10.310 3.09 3,979 1.75*+ 4.83*+ 25
10.380 1.85 736,702 .64 5.67 25
10.810 5.47 745,914 .65 5.21 11
10.850 15.24 567,232 .72 5.68 20
10.030 11.03 306,853 .73 6.12 45
9.690 8.94 178,931 .85 6.45 53
9.520 9.73 111,806 .83 6.49 78
9.350 7.63 66,049 .87 6.83 106
9.300 2.00 41,330 .60+ 6.93+ 88
9.790 3.31 13,160 -- 4.00*+ --
- ----------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Nuveen Municipal Bond Fund, Inc.
Nuveen Insured Tax-Free Bond Fund, Inc.:
We have audited the accompanying statements of net assets of
NUVEEN MUNICIPAL BOND FUND, INC. (a Maryland corporation) and
NUVEEN INSURED TAX-FREE BOND FUND, INC. (comprised of Nuveen
Insured Municipal Bond Fund) (a Minnesota corporation),
including the portfolios of investments, as of February 28,
1995, and the related statements of operations for the year
then ended, the statements of changes in net assets for each
of the two years in the period then ended and the financial
highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of
February 28, 1995, by correspondence with the custodian. 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the net assets of each of the respective funds
constituting Nuveen Municipal Bond Fund, Inc. and Nuveen
Insured Tax-Free Bond Fund, Inc. as of February 28, 1995, the
results of their operations for the year then ended, the
changes in their net assets for each of the two years in the
period then ended, and the financial highlights for the
periods indicated thereon in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
April 3, 1995
52
<PAGE>
PART C--OTHER INFORMATION
NUVEEN MUNICIPAL BOND FUND
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
PART C--OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements:
Included in the Prospectus:
Financial Highlights
Included in the Statement of Additional Information:
Portfolio of Investments, February 28, 1995 (unaudited)
Statement of Net Assets, February 28, 1995 (unaudited)
Statement of Operations, Year Ended February 28, 1995 (unaudited)
Statement of Changes in Net Assets, Years Ended February 28, 1995 (unau-
dited) and February 28, 1994
Included in the Statement of Additional Information through incorporation
by reference to the Registrant's Annual Report to Shareholders:
Portfolio of Investments, February 28, 1994
Statement of Net Assets, February 28, 1994
Statement of Operations, Year Ended February 28, 1994
Statement of Changes in Net Assets, Years Ended February 28, 1994,
and February 28, 1993
Report of Independent Public Accountants, dated April 1, 1994
(b) Exhibits:
1(a). Declaration of Trust of Registrant.
1(a)(i).Form of Establishment and Declaration of Classes.
2. By-Laws of Registrant.
3. Not applicable.
4(a). Specimen certificate of Class R Shares of the Fund.
4(b). Specimen certificate of Class A Shares of the Fund.
4(c). Specimen certificate of Class C Shares of the Fund.
5. Form of Investment Management Agreement between Registrant and
Nuveen Advisory Corp., dated June 13, 1995.
6(a). Form of Distribution Agreement between Registrant and John Nuveen &
Co. Incorporated dated June 13, 1995.
<PAGE>
6(b)(i).
Form of Dealer Distribution Agreement between Registrant's Princi-
pal Underwriter and dealers relating to the sale of Registrant's
shares was filed as Exhibit 6(b)(i) to Post-Effective Amendment No.
18 to Registrant's Statement on Form N-1A (File No. 2-57408) and is
incorporated herein by reference thereto.
6(b)(ii).
Form of agreement between Registrant's Principal Underwriter and
banks or bank affiliates relating to the sale of Registrant's
shares was filed as Exhibit 6(b)(ii) to Post-Effective Amendment
No. 18 to Registrant's Registration Statement on Form
N-1A (File No. 2-57408) and is incorporated herein by reference
thereto.
7. Not applicable.
8(a). Custody Agreement, dated October 1, 1993, between Registrant and
United States Trust Company of New York was filed as Exhibit 8(a)
to Post-Effective Amendment No. 29 to Registrant's Registration
Statement on Form N-1A and is incorporated herein by reference.
8(a)(i). Assignment, dated June 13, 1995, of Custody Agreement.
9(a). Transfer Agency Agreement between Registrant and Shareholder Serv-
ices, Inc. was filed as Exhibit 9 to Post-Effective Amendment No.
26 to Registrant's Registration Statement on Form N-1A (File No. 2-
57408) and is incorporated herein by reference thereto.
9(a)(i) Assignment, dated June 13, 1995, of Transfer Agency Agreement.
10(a). Form of opinion of Bell, Boyd & Lloyd as to the legality of the se-
curities being offered.
10(b). Form of opinion of Bingham, Dana & Gould.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Not applicable.
14. Not applicable.
15. Form of Plan of Distribution and Service for Class A Shares and
Class C Shares.
16. Schedule of Computation of Performance Figures.
17. Financial Data Schedule.
99(a). Original Powers of Attorney of all of Registrant's Trustees (other
than Mr. John E. O'Toole) authorizing, among others, James J. Weso-
lowski and Gifford R. Zimmerman to execute the Registration State-
ment.
99(b). Code of Ethics and Reporting Requirements.
C-2
<PAGE>
ITEM 25: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not Applicable.
ITEM 26: NUMBER OF HOLDERS OF SECURITIES
At April 6, 1995:
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Common Stock ($.10 par value) 99,017
ITEM 27: INDEMNIFICATION
Section 4 of Article XII of Registrant's Declaration of Trust provides as fol-
lows:
Subject to the exceptions and limitations contained in this Section 4, every
person who is, or has been, a Trustee, officer, employee or agent of the Trust,
including persons who serve at the request of the Trust as directors, trustees,
officers, employees or agents of another organization in which the Trust has an
interest as a shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person"), shall be indemnified by the Trust to the fullest extent per-
mitted by law against liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in which
he becomes involved as a party or otherwise by virtue of his being or having
been such a Trustee, director, officer, employee or agent and against amounts
paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Covered Person:
(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the proceeding
was brought that he engaged in willful misfeasance, bad faith, gross negli-
gence or reckless disregard of the duties involved in the conduct of his
office;
(b) with respect to any matter as to which he shall have been finally adju-
dicated not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or
(c) in the event of a settlement or other disposition not involving a final
adjudication (as provided in paragraph (a) or (b)) and resulting in a pay-
ment by a Covered Person, unless there has been either a determination that
such Covered Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office by the court or other body approving the settlement or other
disposition or a reason-
able determination, based on a review of readily available facts (as op-
posed to a full trial-type inquiry), that he did not engage in such con-
duct:
(i) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or
(ii) by written opinion of independent legal counsel.
C-3
<PAGE>
The rights of indemnification herein provided may be insured against by poli-
cies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Covered Person may now or hereafter be entitled, shall con-
tinue as to a person who has ceased to be such a Covered Person and shall inure
to the benefit of the heirs, executors and administrators of such a person.
Nothing contained herein shall affect any rights to indemnification to which
Trust personnel other than Covered Persons may be entitled by contract or oth-
erwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding subject to a claim for indemnification under this Section 4
shall be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such amount if it
is ultimately determined that he is not entitled to indemnification under this
Section 4, provided that either:
(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of any
such advances; or
(b) a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office act on the
matter) or independent legal counsel in a written opinion shall determine,
based upon a review of the readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient ul-
timately will be found entitled to indemnification.
As used in this Section 4, a "Disinterested Trustee" is one (x) who is not an
Interested Person of the Trust (including anyone, as such Disinterested Trust-
ee, who has been exempted from being an Interested Person by any rule, regula-
tion or order of the Commission), and (y) against whom none of such actions,
suits or other proceedings or another action, suit or other proceeding on the
same or similar grounds is then or has been pending.
As used in this Section 4, the words "claim," "action," "suit" or "proceeding"
shall apply to all claims, actions, suits, proceedings (civil, criminal, admin-
istrative or other, including appeals), actual or threatened; and the word "li-
ability" and "expenses" shall include without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and other lia-
bilities.
-----------------
The trustees and officers of the Registrant are covered by an Investment Trust
Errors and Omissions policy in the aggregate amount of $20,000,000 (with a max-
imum deductible of $350,000) against liability and expenses of claims of wrong-
ful acts arising out of their position with the Registrant (and such other com-
panies), except for matters which involve willful acts, bad faith, gross negli-
gence 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 inter-
est of Registrant or where he or she have had reasonable cause to believe this
conduct was unlawful).
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to the officers, trustees or controlling persons of the
Registrant pursuant to the Declaration of Trust of the Registrant or otherwise,
the Registrant has been advised that in the opinion of the Securities and Ex-
change Commission such indemnification is against public policy as expressed in
the Act
C-4
<PAGE>
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 or director or controlling person of the Regis-
trant in the successful defense of any action, suit or proceeding) is asserted
by such officer, director or controlling persons in connection with the securi-
ties being registered, the Registrant will, unless in the opinion of its coun-
sel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 28: BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Nuveen Advisory Corp. serves as investment adviser to the following open-end
management type investment companies: Nuveen Municipal Bond Fund, Nuveen Tax-
Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves, Inc., Nuveen Califor-
nia Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund, Inc., Nuveen Insured Tax-
Free Bond Fund, Inc., Nuveen Tax-Free Money Market Fund, Inc. and Nuveen
Multistate Tax-Free Trust. It also serves as investment adviser to the follow-
ing closed-end management type investment companies: Nuveen Municipal Value
Fund, Inc., Nuveen California Municipal Value Fund, Inc., Nuveen New York Mu-
nicipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc., Nuveen California
Municipal Income Fund, Inc., Nuveen New York 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 Municipal Market Opportunity Fund, Inc., Nuveen California Munici-
pal 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, Nuveen Select Quality Municipal Fund, Inc., Nuveen California
Select Quality Municipal Fund, Inc., Nuveen New York Select Quality Municipal
Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Insured Munici-
pal Opportunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund,
Nuveen Michigan Quality Income Municipal Fund, Inc. Nuveen Ohio Quality Income
Municipal Fund, Inc. Nuveen Texas Quality Income Municipal Fund, Nuveen Cali-
fornia Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Mu-
nicipal Fund, Inc., Nuveen Premier Municipal 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. and Nuveen
Insured New York Premium Income Municipal Fund, Inc., Nuveen Select Maturities
Municipal Fund, Nuveen Arizona Premium Income Municipal Fund, Inc., Nuveen In-
sured Florida Premium Income Municipal Fund, Nuveen Michigan Premium Income Mu-
nicipal Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc.,
Nuveen Insured Premium Income Municipal Fund, Inc., Nuveen Premium Income Mu-
nicipal Fund 4, Inc., Nuveen Insured California Premium Income Municipal Fund
2, Inc., Nuveen Insured New York Premium Income Municipal Fund 2, Nuveen Penn-
sylvania Premium Income Municipal Fund 2, Nuveen Maryland Premium In come Mu-
nicipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Vir-
ginia 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
North Carolina Premium Income Municipal Fund, Nuveen California Premium
C-5
<PAGE>
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 of the investment adviser
has engaged during the last two years for his account or in the capacity of di-
rector, officer, employee, partner or trustee, see the descriptions under "Man-
agement" in the Statement of Additional Information.
Donald E. Sveen is President and Director, formerly Executive Vice President,
of Nuveen Advisory Corp., the investment adviser. Mr. Sveen has, during the
last two years, been President, Director and formerly Executive Vice President
of John Nuveen & Co. Incorporated; and President and Director of Nuveen Insti-
tutional Advisory Corp. Anthony T. Dean is Director of Nuveen Advisory Corp.,
the investment adviser. Mr. Dean has, during the last two years, been Executive
Vice President and Director of John Nuveen Company and John Nuveen & Co. Incor-
porated; and Director of Nuveen Institutional Advisory Corp.
ITEM 29: PRINCIPAL UNDERWRITERS
(a) John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter to
the following open-end management type investment companies: Nuveen Municipal
Bond Fund, Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves,
Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund, Inc.,
Nuveen Insured Tax-Free Bond Fund, Inc., Nuveen Tax-Free Money Market Fund,
Inc. and Nuveen Multistate Tax-Free Trust. Nuveen also acts as depositor and
principal underwriter of the Nuveen Tax-Exempt Unit Trust, a registered unit
investment trust. Nuveen has served or is serving as a co-managing underwriter
of the shares of 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 California Municipal Income Fund, Inc., Nuveen New York Municipal
Income Fund, Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen Perfor-
mance Plus Municipal Fund, Inc., Nuveen California Performance Plus Municipal
Fund, Inc., Nuveen New York Performance Plus Municipal Fund, Inc., Nuveen Mu-
nicipal 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 In-
sured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality Municipal
Fund, Nuveen New Jersey Investment Quality Municipal Fund, Inc., Nuveen Penn-
sylvania 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 Mu-
nicipal 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 Select Tax-
Free Income
C-6
<PAGE>
Portfolio, Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Insured Cali-
fornia Premium Income Municipal Fund, Inc., Nuveen Insured New York Premium In-
come Municipal Fund, Inc., Nuveen Select Maturities Municipal Fund, Nuveen Ari-
zona 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 Ohio Premium Income Munici-
pal Fund, Inc., Nuveen Pennsylvania Premium Income Municipal Fund, Nuveen Texas
Premium Income Municipal Fund, Nuveen Insured Premium Income Municipal Fund,
Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured California
Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium Income Mu-
nicipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen Massachu-
setts Premium Income Municipal Fund, Nuveen Virginia Premium Income Municipal
Fund, Nuveen Washington Premium Income Municipal Fund, Nuveen Connecticut Pre-
mium Income Municipal Fund, Nuveen Georgia Premium Income Municipal Fund,
Nuveen Missouri Premium Income Municipal Fund, Nuveen North Carolina Premium
Income Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen
Insured Premium Income Municipal Fund 2, Nuveen Select Tax-Free Income Portfo-
lio 2, Nuveen Insured California Select Tax-Free Income Portfolio, Nuveen In-
sured New York Select Tax-Free Income Portfolio and Nuveen Select Tax-Free In-
come Portfolio 3.
(b)
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS POSITIONS AND OFFICES POSITIONS AND OFFICES
ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ------------------ --------------------- ---------------------
<S> <C> <C>
Richard J. Franke Chairman of the Board, Chairman of the Board
333 West Wacker Drive Chief Executive Officer and Trustee
Chicago, IL 60606 and Director
Donald E. Sveen President, Chief Operating None
333 West Wacker Drive Officer and Director
Chicago, IL 60606
Anthony T. Dean Executive Vice President None
333 West Wacker Drive and Director
Chicago, IL 60606
Timothy R. Schwertfeger Executive Vice President President and Trustee
333 West Wacker Drive and Director
Chicago, IL 60606
William Adams IV Vice President None
333 West Wacker Drive
Chicago, IL 60606
John H. Claiborne Vice President None
333 West Wacker Drive
Chicago, IL 60606
Kathleen M. Flanagan Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
</TABLE>
C-7
<PAGE>
<TABLE>
<S> <C> <C>
Stephen D. Foy Vice President None
333 West Wacker Drive
Chicago, IL 60606
Robert D. Freeland Vice President None
333 West Wacker Drive
Chicago, IL 60606
Michael G. Gaffney Vice President None
333 West Wacker Drive
Chicago, IL 60606
James W. Gratehouse Vice President None
333 West Wacker Drive
Chicago, IL 60606
Paul E. Greenawalt Vice President None
333 West Wacker Drive
Chicago, IL 60606
Anna R. Kucinskis Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
333 West Wacker Drive
Chicago, IL 60606
Larry W. Martin Vice President Vice President and
333 West Wacker Drive and Assistant Secretary Assistant Secretary
Chicago, IL 60606
Thomas C. Muntz Vice President None
333 West Wacker Drive
Chicago, IL 60606
O. Walter Renfftlen Vice President Vice President and Controller
333 West Wacker Drive and Controller
Chicago, IL 60606
Stuart W. Rogers Vice President None
333 West Wacker Drive
Chicago, IL 60606
Bradford W. Shaw, Jr Vice President None
333 West Wacker Drive
Chicago, IL 60606
</TABLE>
C-8
<PAGE>
<TABLE>
<S> <C> <C>
H. William Stabenow Vice President Vice President and Treasurer
333 West Wacker Drive and Treasurer
Chicago, IL 60606
George P. Thermos Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
James J. Wesolowski Vice President, General Vice President and Secretary
333 West Wacker Drive Counsel and Secretary
Chicago, IL 60606
Paul C. Williams Vice President None
333 West Wacker Drive
Chicago, IL 60606
Gifford R. Zimmerman Vice President Vice President and
333 West Wacker Drive and Assistant Secretary Assistant Secretary
Chicago, IL 60606
</TABLE>
(c) Not applicable.
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Nuveen Advisory Corp., 333 West Wacker Drive, Chicago, Illinois, 60606, main-
tains the Declaration of Trust, By-Laws, minutes of trustees and shareholder
meetings, contracts and all advisory material of the investment adviser.
United States Trust Company of New York, 114 West 47th Street, New York, New
York 10036, maintains all general and subsidiary ledgers, journals, trial bal-
ances, records of all portfolio purchases and sales, and all other required
records not maintained by Nuveen Advisory Corp., or Shareholder Services, Inc.
Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado 80217-5330, main-
tains all the required records in its capacity as transfer, dividend paying,
and shareholder services agent for the Registrant.
ITEM 31: MANAGEMENT SERVICES
Not applicable.
ITEM 32: UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest Annual Report to Share-
holders upon request and without charge.
C-9
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATE-
MENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED,
IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 12TH DAY OF APRIL, 1995.
NUVEEN MUNICIPAL BOND FUND
/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
--------- ----- ----
<S> <C> <C>
/s/ O. Walter Renfftlen
- -------------------------------
O. Walter Renfftlen Vice President and April 12, 1995
Controller (Principal
Financial and
Accounting Officer)
Richard J. Franke Chairman of the Board
and Trustee (Principal
Executive Officer)
Lawrence H. Brown Trustee
Anne E. Impellizzeri Trustee
Margaret K. Rosenheim Trustee By /s/ Gifford R. Zimmerman
Peter R. Sawers Trustee ---------------------------
Timothy R. Schwertfeger President and Trustee Gifford R. Zimmerman
John E. O'Toole Trustee Attorney-in-Fact
April 12, 1995
</TABLE>
AN ORIGINAL POWER OF ATTORNEY AUTHORIZING, AMONG OTHERS, JAMES J. WESOLOWSKI
AND GIFFORD R. ZIMMERMAN TO EXECUTE THIS REGISTRATION STATEMENT, AND AMEND-
MENTS THERETO, FOR EACH OF THE OFFICERS AND TRUSTEES OF REGISTRANT ON WHOSE
BEHALF THIS REGISTRATION STATEMENT IS FILED (OTHER THAN MR. O'TOOLE), HAS BEEN
EXECUTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
1(a). Declaration of Trust of Registrant
1(a)(i). Form of Establishment and Designation of Classes
2. By-Laws of Registrant
4(a). Specimen Certificate of Class R Shares of the Fund
4(b). Specimen Certificate of Class A Shares of the Fund
4(c). Specimen Certificate of Class C Shares of the Fund
5. Investment Management Agreement between Registrant and
Nuveen Advisory Corp., dated June 13, 1995
6(a). Form of Distribution Agreement between Registrant and
John Nuveen & Co. Incorporated dated June 13, 1995
8(a)(i). Assignment, dated June 13, 1995, of Custody Agreement
9(a)(i). Assignment dated June 13, 1995 of Transfer Agency
Agreement
10(a). Form of opinion of Bell, Boyd & Lloyd as to the
legality of the securities being offered
10(b). Form of opinion of Bingham, Dana & Gould
11. Consent of Independent Public Accountants
15. Form of Plan of Distribution and Service for Class A
Shares and Class C Shares
16. Schedule of Computation of Performance Figures
17. Financial Data Schedule
99(a). Original Powers of Attorney of all of Registrant's
Trustees (other than Mr. John E. O'Toole) authorizing,
among others, James J. Wesolowski and Gifford R.
Zimmerman to execute the Registration Statement
99(b). Code of Ethics and Reporting Requirements
</TABLE>
<PAGE>
DECLARATION OF TRUST
OF
NUVEEN MUNICIPAL BOND FUND
DECLARATION OF TRUST made as of this 13th day of March, 1995 by the
Trustee hereunder.
WHEREAS, the Trustee desires to establish a trust fund for the
purposes of carrying on the business of a management investment company; and
WHEREAS, in furtherance of such purpose, the Trustee and any successor
Trustees elected in accordance with Article V hereof are acquiring and may
hereafter acquire assets and properties which they will hold and manage as
trustees of a Massachusetts business trust with transferable shares in
accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustee and any successor Trustees elected or
appointed in accordance with Article V hereof hereby declare that they will hold
all cash, securities and other assets and properties, which they may from time
to time acquire in any manner as Trustees hereunder, IN TRUST, and that they
will manage and dispose of the same upon the following terms and conditions for
the benefit of the holders from time to time of shares of beneficial interest in
this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. This Trust shall be known as the "Nuveen Municipal
Bond Fund" and the Trustees shall conduct the business of the Trust under that
name or any other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
<PAGE>
-2-
(a) The "Trust" refers to the Massachusetts voluntary association
established by this Declaration of Trust, as amended from time to time;
(b) "Trustee" or "Trustees" refers to each signatory to this
Declaration of Trust so long as such signatory shall continue in office in
accordance with the terms hereof, and all other individuals who at the time
in question have been duly elected or appointed and qualified in accordance
with Article V hereof and are then in office;
(c) "Shares" mean the shares of beneficial interest described in
Article IV hereof and include fractions of Shares as well as whole Shares;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 (and
any successor statute) and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The terms "Commission," "Interested Person," "Principal
Underwriter" and "vote of a majority of the outstanding voting securities"
shall have the meanings given them in the 1940 Act;
(g) "Declaration of Trust" or "Declaration" shall mean this
Declaration of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
NATURE AND PURPOSE OF TRUST
The Trust is a voluntary association with transferable shares (commonly
known as a business trust) of the type referred to in Chapter 182 of the General
Laws of the Commonwealth of Massachusetts. The Trust is not intended to be,
shall not be deemed to be, and shall not be treated as, a general or a limited
partnership, joint venture, corporation or joint stock company, nor shall the
Trustees or Shareholders or any of them for any purpose be deemed to be, or be
treated in any way whatsoever as though they were, liable or responsible
hereunder as
<PAGE>
-3-
partners or joint venturers. The purpose of the Trust is to engage in, operate
and carry on the business of an open-end management investment company and to do
any and all acts or things as are necessary, convenient, appropriate, incidental
or customary in connection therewith.
The Trust set forth in this instrument shall be deemed made in the
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a business trust, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust. No provision of this Declaration shall be
effective to require a waiver of compliance with any provision of the Securities
Act of 1933, as amended, or the 1940 Act, or of any valid rule, regulation or
order of the Commission thereunder.
ARTICLE III
REGISTERED AGENT; PRINCIPAL PLACE OF BUSINESS
The name of the registered agent of the Trust is CT Corporation System at
2 Oliver Street, Boston, Massachusetts. The principal place of business of the
Trust is 333 West Wacker Drive, Chicago, Illinois 60606. The Trustees may,
without the approval of Shareholders, change the registered agent of the Trust
and the principal place of business of the Trust.
ARTICLE IV
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial interest in the
Trust shall be divided into such transferable Shares of beneficial interest, of
such series or classes, and of such designations and par values (if any) and
with such rights, preferences, privileges and restrictions as shall be
determined by the Trustees in their sole discretion, without Shareholder
approval, from time to time and shall initially consist of one class of
transferable shares, par value $.10 per share. The number of Shares is unlimited
and each Share shall be fully paid and nonassessable. The Trustees shall have
full power and authority, in their sole discretion and without obtaining any
prior authorization or vote of the Shareholders of the Trust or of the
Shareholders of any series or class of Shares, to
<PAGE>
-4-
create and establish (and to change in any manner) Shares or any series or
classes thereof with such preferences, voting powers, rights and privileges as
the Trustees may from time to time determine; to divide or combine the Shares or
the Shares of any series or classes thereof into a greater or lesser number; to
classify or reclassify any issued Shares into one or more series or classes of
Shares; to abolish any one or more series or classes of Shares; and to take such
other action with respect to the Shares as the Trustees may deem desirable.
Except as may be specifically set forth in Section 2 of this Article IV or in an
instrument establishing and designating classes or series of Shares, the Shares
shall have the powers, preferences, rights, qualifications, limitations and
restrictions described below:
(i) In the event of the termination of the Trust the holders of the
Shares shall be entitled to receive pro rata the net distributable assets
of the Trust.
(ii) Each holder of Shares shall be entitled to one vote for each
Share held on each matter submitted to a vote of Shareholders, and the
holders of outstanding Shares shall vote together as a single class.
(iii) Dividends or other distributions to Shareholders, when, as and
if declared or made by the Trustees, shall be shared equally by the holders
of Shares on a share for share basis, such dividends or other distributions
or any portion thereof to be paid in cash or to be reinvested in full and
fractional Shares of the Trust as the Trustees shall direct.
(iv) Any Shares purchased, redeemed or otherwise reacquired by the
Trust shall be retired automatically and such retired Shares shall have the
status of authorized but unissued Shares.
(v) Shares may be issued from time to time, without the vote of the
Shareholders (or, if the Trustees in their sole discretion deem advisable,
with a vote of Shareholders), either for cash or for such other
consideration (which may be in any one or more instances a certain
specified consideration or certain specified considerations) and on such
terms as the Trustees, from time to time, may deem advisable, and the Trust
may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities).
<PAGE>
-5-
(vi) The Trust may issue Shares in fractional denominations to the
same extent as its whole Shares, and Shares in fractional denominations
shall be Shares having proportionately to the respective fractions
represented thereby all the rights of whole Shares, including, without
limitation, the right to vote, the right to receive dividends and
distributions and the right to participate upon termination of the Trust.
The Trustees may from time to time, without the vote of Shareholders,
divide or combine Shares into a greater or lesser number without thereby
changing their proportionate beneficial interest in the Trust.
Section 2. Establishment of Series and Classes of Shares.
(a) Series. The Trustees, in their sole discretion, without obtaining
any prior authorization or vote of the Shareholders of the Trust or of the
Shareholders of any series or class of Shares, from time to time may authorize
the division of Shares into two or more series, the number and relative rights,
privileges and preferences of which shall be established and designated by the
Trustees, in their discretion, upon and subject to the following provisions:
(i) All Shares shall be identical except that there may be such
variations as shall be fixed and determined by the Trustees between different
series as to purchase price, right of redemption, and the price, terms and
manner or redemption, and special and relative rights as to dividends and on
liquidation.
(ii) The number of authorized Shares and the number of Shares of each
series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any series into one or more series that may be established and designated from
time to time. The Trustees may hold as treasury shares (of the same or some
other series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any series reacquired by the Trust at their
discretion from time to time.
(iii) The power of the Trustees to invest and reinvest the assets of
the Trust allocated or belonging to any particular series shall be governed by
Section 1, Article VI hereof unless otherwise provided in the instrument of the
Trustees establishing such series which is hereinafter described.
<PAGE>
-6-
(iv) Each Share of a series shall represent a beneficial interest in
the net assets allocated or belonging to such series only, and such interest
shall not extend to the assets of the Trust generally. Dividends and
distributions on Shares of a particular series may be paid with such frequency
as the Trustees may determine, which may be monthly or otherwise, pursuant to a
standing vote or votes adopted only once or with such frequency as the Trustees
may determine, to the Shareholders of that series only, from such of the income
and capital gains, accrued or realized, from the assets belonging to that
series. All dividends and distributions on Shares of a particular series shall
be distributed pro rata to the Shareholders of that series in proportion to the
number of Shares of that series held by such Shareholders at the date and time
of record established for the payment of such dividends or distributions. Shares
of any particular series of the Trust may be redeemed solely out of the assets
of the Trust allocated or belonging to that series. Upon liquidation or
termination of a series of the Trust, Shareholders of such series shall be
entitled to receive a pro rata share of the net assets of such series only.
(v) Notwithstanding any provision hereof to the contrary, on any
matter submitted to a vote of the Shareholders of the Trust, all Shares then
entitled to vote shall be voted by individual series, except that (i) when
required by the 1940 Act to be voted in the aggregate, Shares shall not be voted
by individual series, (ii) when the Trustees have determined that the matter
affects only the interests of Shareholders of one or more series, only
Shareholders of such series shall be entitled to vote thereon, and (iii) all
series shall vote together on the election of Trustees.
(vi) The establishment and designation of any series of Shares shall
be effective upon the execution by a majority of the Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such series or as otherwise provided in such instrument.
(b) Classes. Notwithstanding anything in this Declaration to the contrary,
the Trustees may, in their discretion, without obtaining any prior authorization
or vote of the Shareholders of the Trust or of the Shareholders of any series or
class of Shares, from time to time authorize the division of Shares of the Trust
or any series thereof into Shares of one or more classes upon the execution by a
majority of the Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such class or classes.
All Shares of a class shall be identical with each other and with the Shares of
each other
<PAGE>
-7-
class of the same series except for such variations between classes as may be
approved by the Board of Trustees and set forth in such instrument of
establishment and designation and be permitted under the 1940 Act or pursuant to
any exemptive order issued by the Commission.
Section 3. Ownership of Shares. The ownership and transfer of Shares
shall be recorded on the books of the Trust or its transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates,
transfer of Shares and similar matters. The record books of the Trust, as kept
by the Trust or any transfer or similar agent of the Trust, shall be conclusive
as to who are the holders of Shares and as to the number of Shares held from
time to time by each Shareholder.
Section 4. No Preemptive Rights, Etc. The holders of Shares shall not,
as such holders, have any right to acquire, purchase or subscribe for any Shares
or securities of the Trust which it may hereafter issue or sell, other than such
right, if any, as the Trustees in their discretion may determine. The holders of
Shares shall have no appraisal rights with respect to their Shares and, except
as otherwise determined by resolution of the Trustees in their sole discretion,
shall have no exchange or conversion rights with respect to their Shares.
Section 5. Assets and Liabilities of Series. In the event that the
Trust, pursuant to Section 2(a) of this Article IV, shall authorize the division
of Shares into two or more series, the following provisions shall apply:
(a) All consideration received by the Trust for the issue or sale of
Shares of a particular series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of the Trust. Such
consideration, assets, income, earnings, profits and proceeds, including any
proceeds derived from the sale, exchange or liquidation of such assets and any
funds or payments derived from any reinvestment of such proceeds, in whatever
form the same may be, together with any General Items (as hereinafter defined)
allocated to that series as provided in the following sentence, are herein
referred to as "Assets belonging to" that
<PAGE>
-8-
series. In the event that there are any assets, income, earnings, profits or
proceeds thereof, funds or payments which are not readily identifiable as
belonging to any particular series (collectively "General Items"), the Trustees
shall allocate such General Items to and among any one or more of the series
created from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable; and any General Items allocated to a
particular series shall belong to that series. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all series for
all purposes.
(b) The assets belonging to a particular series shall be charged with
the liabilities of the Trust in respect of that series and with all expenses,
costs, charges and reserves attributable to that series and shall be so recorded
upon the books of the Trust. Liabilities, expenses, costs, charges and reserves
charged to a particular series, together with any General Items (as hereinafter
defined) allocated to that series as provided in the following sentence, are
herein referred to as "liabilities belonging to" that series. In the event there
are any general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular series
(collectively "General Items"), the Trustees shall allocate and charge such
General Items to and among any one or more of the series created from time to
time in such manner and on such basis as the Trustees in their sole discretion
deem fair and equitable; and any General Items so allocated and charges to a
particular series shall belong to that series. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all series for
all purposes.
Section 6. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms of this
Declaration of Trust and to have become a party thereto. The death of a
Shareholder during the continuance of the Trust shall not operate to terminate
the same nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or the
Trustees, but only to the rights of said decedent under this Trust. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust property or right to call for a partition or division of the
same or for an accounting. Neither the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind any Shareholder personally or to
call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any
<PAGE>
-9-
time personally agree to pay by way of subscription for any Shares or otherwise.
ARTICLE V
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees, and they shall have all powers necessary
and desirable to carry out that responsibility.
Section 2. Qualification and Number. Each Trustee shall be a natural
person. A Trustee need not be a Shareholder, a citizen of the United States, or
a resident of the Commonwealth of Massachusetts. By the vote or consent of a
majority of the Trustees then in office, the Trustees may fix the number of
Trustees at a number not less than one (1) nor more than twelve (12) and may
fill the vacancies created by any such increase in the number of Trustees.
Except as determined from time to time by resolution of the Trustees, no
decrease in the number of Trustees shall have the effect of removing any Trustee
from office prior to the expiration of his term, but the number of Trustees may
be decreased in conjunction with the removal of a Trustee pursuant to Section 4
of Article V.
Section 3. Term and Election. Each Trustee shall hold office until the
next meeting of Shareholders called for the purpose of considering the election
or re-election of such Trustee or of a successor to such Trustee, and until his
successor is elected and qualified, and any Trustee who is appointed by the
Trustees in the interim to fill a vacancy as provided hereunder shall have the
same remaining term as that of his predecessor, if any, or such term as the
Trustees may determine. Any vacancy resulting from a newly created Trusteeship
or the death, resignation, retirement, removal, or incapacity of a Trustee may
be filled by the affirmative vote or consent of a majority of the Trustees then
in office.
Section 4. Resignation and Removal. Any Trustee may resign his trust
or retire as a Trustee (without need for prior or subsequent accounting except
in the event of removal) by an instrument in writing signed by him and delivered
or mailed to the Chairman, if any, the President or the Secretary, and such
resignation or retirement shall be effective upon such delivery, or at a later
date according to the terms of the instrument. Any Trustee who has become
incapacitated by illness or injury as determined by a majority of the other
Trustees, may be retired
<PAGE>
-10-
by written instrument signed by a majority of the other Trustees. Except as
aforesaid, any Trustee may be removed from office only for "Cause" (as
hereinafter defined) and only (i) by action of at least sixty-six and two-
thirds percent (66-2/3%) of the outstanding Shares, or (ii) by written
instrument, signed by at least sixty-six and two-thirds percent (66-2/3%) of the
remaining Trustees, specifying the date when such removal shall become
effective. "Cause" shall require willful misconduct, dishonesty, fraud or a
felony conviction.
Section 5. Vacancies. The death, declination, resignation, retirement,
removal, or incapacity, of the Trustees, or any one of them, shall not operate
to annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled as provided herein, or the number of
Trustees as fixed is reduced, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees, and during the period
during which any such vacancy shall occur, only the Trustees then in office
shall be counted for the purposes of the existence of a quorum or any action to
be taken by such Trustees.
Section 6. Ownership of Assets of the Trust. The assets of the Trust
shall be held separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any successor
Trustees. All of the assets of the Trust shall at all times be considered as
automatically vested in the Trustees as shall be from time to time in office.
Upon the resignation, retirement, removal, incapacity or death of a Trustee,
such Trustee shall automatically cease to have any right, title or interest in
any of the Trust property, and the right, title and interest of such Trustee in
the Trust property shall vest automatically in the remaining Trustees. Such
vesting and cessation of title shall be effective without the execution or
delivery of any conveyancing or other instruments. No Shareholder shall be
deemed to have a severable ownership in any individual asset of the Trust or any
right of partition or possession thereof
Section 7. Voting Requirements. In addition to the voting requirements
imposed by law or by any other provision of this Declaration of Trust, the
provisions set forth in this Article V may not be amended, altered or repealed
in any respect, nor may any provision inconsistent with this Article V be
adopted, without the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the outstanding Shares. In the event the holders
of the outstanding shares of any series or class are required by law or any
other provision of this Declaration of
<PAGE>
-11-
Trust to approve such an action by a class vote of such holders, such action
must be approved by the holders of at least sixty-six and two-thirds percent (66
2/3%) of the outstanding Shares of such series or class or such lower percentage
as may be required by law or any other provision of this Declaration of Trust.
ARTICLE VI
POWERS OF TRUSTEES
Section 1. Powers. The Trustees in all instances shall have full,
absolute and exclusive power, control and authority over the Trust assets and
the business and affairs of the Trust to the same extent as if the Trustees were
the sole and absolute owners thereof in their own right. The Trustees shall have
full power and authority to do any and all acts and to make and execute any and
all contracts and instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The enumeration of any specific
power herein shall not be construed as limiting the aforesaid powers. In
construing the provisions of this Declaration of Trust, there shall be a
presumption in favor of the grant of power and authority to the Trustees.
Subject to any applicable limitation in this Declaration, the Trustees shall
have power and authority:
(a) To invest and reinvest in, to buy or otherwise acquire, to hold,
for investment or otherwise, to sell or otherwise dispose of, to lend or to
pledge, to trade in or deal in securities or interests of all kinds,
however evidenced, or obligations of all kinds, however evidenced, or
rights, warrants, or contracts to acquire such securities, interests, or
obligations, of any private or public company, corporation, association,
general or limited partnership, trust or other enterprise or organization
foreign or domestic, or issued or guaranteed by any national or state
government, foreign or domestic, or their agencies, instrumentalities or
subdivisions (including but not limited to, bonds, debentures, bills, time
notes and all other evidences or indebtedness); negotiable or non-
negotiable instruments; any and all options and futures contracts,
derivatives or structured securities; government securities and money
market instruments (including but not limited to, bank certificates of
deposit, finance paper, commercial paper, bankers acceptances, and all
kinds of repurchase agreements) and, without limitation, all other kinds
and types of financial instruments;
<PAGE>
-12-
(b) To adopt By-Laws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders;
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(d) To set record dates for any purpose;
(e) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, investment subadviser,
transfer agent, custodian, underwriter or other independent contractor or
agent;
(f) Subject to Article IX, Section 1 hereof, to merge, or consolidate
the Trust with any other corporation, association, trust or other
organization; or to sell, convey, transfer, or lease all or substantially
all of the assets of the Trust;
(g) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(h) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(i) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form; or either
in their or the Trust's name or in the name of a custodian or a nominee or
nominees;
(j) To issue, sell, repurchase, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer and otherwise deal in Shares and in any
options, warrants or other rights to purchase Shares or any other interests
in the Trust other than Shares;
(k) To set apart, from time to time, out of any funds of the Trust a
reserve or reserves for any proper purpose, and to abolish any such
reserve;
<PAGE>
-13-
(l) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or issuer, and
to pay calls or subscriptions with respect to any security held in the
Trust;
(m) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(n) To make distributions to Shareholders;
(o) To borrow money and to pledge, mortgage, or hypothecate
the assets of the Trust;
(p) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon such terms as
shall be established by the Trustees;
(q) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(r) To purchase and pay for out of Trust property such insurance as
they may deem necessary or appropriate for the conduct of the business of
the Trust, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, investment
subadvisers or managers, principal underwriters, or independent contractors
of the Trust individually against all claims and liabilities of every
nature arising by reason of holding, being or having held any such office
or position, or by reason of any action alleged to have been taken or
omitted by any such person as Shareholder, Trustee, officer, employee,
agent, investment adviser, subadviser or manager,
<PAGE>
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principal underwriter, or independent contractor, whether or not any such
action may be determined to constitute negligence, and whether or not the
Trust would have the power to indemnify such person against such liability;
and
(s) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
Any determination made by or pursuant to the direction of the Trustees
in good faith and consistent with the provisions of this Declaration of Trust
shall be final and conclusive and shall be binding upon the Trust and every
holder at any time of Shares, including, but not limited to the following
matters: the amount of the assets, obligations, liabilities and expenses of the
Trust; the amount of the net income of the Trust from dividends, capital gains,
interest or other sources for any period and the amount of assets at any time
legally available for the payment of dividends or distributions; the amount,
purpose, time of creation, increase or decrease, alteration or cancellation of
any reserves or charges and the propriety thereof (whether or not any obligation
or liability for which such reserves or charges were created shall have been
paid or discharged); the market value, or any quoted price to be applied in
determining the market value, of any security or other asset owned or held by
the Trust; the fair value of any security for which quoted prices are not
readily available, or of any other asset owned or held by the Trust; the number
of Shares of the Trust issued or issuable; the net asset value per Share; any
matter relating to the acquisition, holding and depositing of securities and
other assets by the Trust; any question as to whether any transaction
constitutes a purchase of securities on margin, a short sale of securities, a
borrowing, or an underwriting of the sale of, or participation in any
underwriting or selling group in connection with the public distribution of, any
securities, and any matter relating to the issue, sale, redemption, repurchase,
and/or other acquisition or disposition of Shares of the Trust. No provision of
this Declaration of Trust shall be effective to protect or purport to protect
any Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
<PAGE>
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Section 2. Manner of Acting, By-Laws. The By-Laws shall make provision
from time to time for the manner in which the Trustees may take action,
including, without limitation, at meetings within or without Massachusetts,
including meetings held by means of a conference telephone or other
communications equipment, or by written consents, the quorum and notice, if any,
that shall be required for any meeting or other action, and the delegation of
some or all of the power and authority of the Trustees to any one or more
committees which they may appoint from their own number, and terminate, from
time to time.
ARTICLE VII
EXPENSES OF THE TRUST
The Trustees shall have the power to reimburse themselves from the
Trust property for their expenses and disbursements, to pay reasonable
compensation to themselves from the Trust property, and to incur and pay out of
the Trust property any other expenses which in the opinion of the Trustees are
necessary or incidental to carry out any of the purposes of this Declaration of
Trust, or to exercise any of the powers of the Trustees hereunder.
ARTICLE VIII
INVESTMENT ADVISER, UNDERWRITER
AND TRANSFER AGENT
Section 1. Investment Adviser. The Trust may enter into written
contracts with one or more persons (which term shall include any firm,
corporation, trust or association), to act as investment adviser or investment
subadviser to the Trust, and as such to perform such functions as the Trustees
may deem reasonable and proper, including, without limitation, investment
advisory, management, research, valuation of assets, clerical and administrative
functions, under such terms and conditions, and for such compensation, as the
Trustees may in their discretion deem advisable.
Upon the termination of any contract with Nuveen Advisory Corp., or
any corporation affiliated with John Nuveen & Co. Incorporated, acting as
investment adviser or manager, the Trustees are hereby required to promptly
change the name of the Trust to a name which does not include "Nuveen" or any
approximation or abbreviation thereof.
<PAGE>
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Section 2. Underwriter; Transfer Agent. The Trust may enter into a
written contract or contracts with an underwriter or underwriters or distributor
or distributors whereby the Trust may either agree to sell Shares to the other
party or parties to the contract or appoint such other party or parties its
sales agent or agents for such Shares and with such other provisions as the
Trustees may deem reasonable and proper, and the Trustees may in their
discretion from time to time enter into transfer agency and/or shareholder
service contract(s), in each case with such terms and conditions, and providing
for such compensation, as the Trustees may in their discretion deem advisable.
Section 3. Parties to Contract. Any contract of the character
described in Sections 1 and 2 of this Article VIII or in Article X hereof may be
entered into with any corporation, firm, partnership, trust or association,
including, without limitation, the investment adviser, any investment subadviser
or an affiliate of the investment adviser or investment subadviser, although one
or more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract, or
otherwise interested in such contract and no such contract shall be invalidated
or rendered voidable by reason of the existence of any such relationship, nor
shall any person holding such relationship be liable merely by reason of such
relationship for any loss or expense to the Trust under or by reason of said
contract or accountable for any profit realized directly or indirectly
therefrom, provided that the contract when entered into was not inconsistent
with the provisions of this Article VIII, Article X, or the By-Laws. The same
person (including a firm, corporation, partnership, trust or association) may be
the other party to contracts entered into pursuant to Sections 1 and 2 above or
Article X, and any individual may be financially interested or otherwise
affiliated with persons who are parties to any or all of the contracts mentioned
in this Section 3.
ARTICLE IX
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only: (a) for the election or removal of Trustees as provided in Article V, (b)
with respect to any investment advisory or management contract to the extent
required by the 1940 Act, (c) with respect to any termination of the Trust or a
series thereof to the extent and as provided in this Article IX, Section 1, (d)
with respect to any amendment of this Declaration of Trust to the extent and as
provided in Article XIII, Section 4, (e) with
<PAGE>
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respect to a merger or consolidation of the Trust or any series thereof with any
corporation, association, trust or other organization or a reorganization or
recapitalization of the Trust or series thereof, or a sale, lease or transfer of
all or substantially all of the assets of the Trust or any series thereof (other
than in the regular course of the Trust's investment activities) to the extent
and as provided in this Article IX, Section 1, (f) to the same extent as the
shareholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, and (g) with
respect to such additional matters relating to the Trust as may be required by
law, the 1940 Act, this Declaration of Trust, the By-Laws of the Trust, or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider necessary or desirable.
An affirmative vote of the holders of at least sixty-six and two-
thirds percent (66-2/3%) of the outstanding Shares of the Trust (or, in the
event of any action set forth below affecting only one or more series or classes
of the Trust, an affirmative vote of the holders of at least sixty-six and two-
thirds percent of the outstanding Shares of such affected series or class) shall
be required to approve, adopt or authorize (i) a merger or consolidation of the
Trust or a series of the Trust with any corporation, association, trust or other
organization or a reorganization or recapitalization of the Trust or a series of
the Trust, (ii) a sale, lease or transfer of all or substantially all of the
assets of the Trust or series of the Trust (other than in the regular course of
the Trust's investment activities), or (iii) a termination of the Trust or a
series of the Trust (other than a termination by the Trustees as provided for in
Section 1 of Article XIII hereof), unless in any case such action is recommended
by the Trustees, in which case the affirmative vote of a majority of the
outstanding voting securities of the Trust or the affected series or class shall
be required. Nothing contained herein shall be construed as requiring approval
of Shareholders for any transaction, whether deemed a merger, consolidation,
reorganization or otherwise whereby the Trust issues Shares in connection with
the acquisition of assets (including those subject to liabilities) from any
other investment company or similar entity.
Section 2. Meetings. Meetings of the Shareholders of the Trust or any
one or more series thereof may be called and held from time to time for the
purpose of taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Meetings of the
<PAGE>
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Shareholders shall be held at such place within the United States as shall be
fixed by the Trustees, and stated in the notice of the meeting. Meetings of the
Shareholders may be called by the Trustees and shall be called by the Trustees
upon the written request of Shareholders owning at least one-tenth of the
outstanding Shares entitled to vote. Shareholders shall be entitled to at least
ten days' written notice of any meeting, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of the adjournment.
Section 3. Quorum and Action. (a) The Trustees shall set in the By-
Laws the quorum required for the transaction of business by the Shareholders at
a meeting, which quorum shall in no event be less than thirty percent (30%) of
the Shares entitled to vote at such meeting. If a quorum is present when a duly
called or held meeting is convened, the Shareholders present may continue to
transact business until adjournment, even though the withdrawal of a number of
Shareholders originally present leaves less than the proportion or number
otherwise required for a quorum.
(b) The Shareholders shall take action by the affirmative vote of the
holders of a majority, except in the case of the election of Trustees which
shall only require a plurality, of the Shares present in person or by proxy and
entitled to vote at a meeting of Shareholders at which a quorum is present,
except as may be otherwise required by any provision of this Declaration of
Trust or the By-Laws.
Section 4. Voting. Each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote, except that Shares held in the
treasury of the Trust shall not be voted. In the event that there is more than
one series of the Shares, Shares shall be voted by individual series on any
matter submitted to a vote of the Shareholders of the Trust except as provided
in Sections 2(a)(v) and 2(b) of Article IV. There shall be no cumulative voting
in the election of Trustees or on any other matter submitted to a vote of the
Shareholders. Shares may be voted in person or by proxy. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required or permitted by law, this Declaration of Trust or the By-Laws of
the Trust to be taken by Shareholders.
Section 5. Action by Written Consent in Lieu of Meeting of
Shareholders. Any action required or permitted to be taken at a meeting of the
Shareholders may be taken without a meeting by written action signed by all of
the Shareholders entitled to vote on that action. The
<PAGE>
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written action is effective when it has been signed by all of those
Shareholders, unless a different effective time is provided in the written
action.
ARTICLE X
CUSTODIAN
All securities and cash of the Trust shall be held by one or more
custodians and subcustodians, each meeting the requirements for a custodian
contained in the 1940 Act, or shall otherwise be held in accordance with the
1940 Act.
ARTICLE XI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees may in their sole discretion
from time to time declare and pay, or may prescribe and set forth in a duly
adopted vote or votes of the Trustees, the bases and time for the declaration
and payment of, such dividends and distributions to Shareholders as they may
deem necessary or desirable, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices.
Section 2. Redemption of Shares. All shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. The Trust shall redeem the Shares of the Trust or any series or
class thereof at the price determined as hereinafter set forth, upon the
appropriately verified application of the record holder thereof (or upon such
other form of request as the Trustees may determine) at such office or agency as
may be designated from time to time for that purpose by the Trustees. The
Trustees may from time to time specify additional conditions, not inconsistent
with the 1940 Act, regarding the redemption of Shares in the Trust's then
effective prospectus under the Securities Act of 1933.
Section 3. Redemption Price. Shares shall be redeemed at their net
asset value (less any applicable redemption fee or sales charge) determined as
set forth in Section 7 of this Article XI as of such time as the Trustees shall
have theretofore prescribed by resolution. In the absence of such resolution,
the redemption price of Shares deposited shall
<PAGE>
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be the net asset value of such Shares next determined as set forth in such
Section hereof after receipt of such application.
Section 4. Payment. Payment of the redemption price of Shares of the
Trust or any series or class thereof shall be made in cash or in property or
partly in cash and partly in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act or other applicable laws, as may be
specified from time to time in the Trust's then effective prospectus under the
Securities Act of 1933.
Section 5. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the Shares of the
Trust or one or more series of the Trust held by any Shareholder if the value of
such Shares held by such Shareholder is less than the minimum amount established
from time to time by the Trustees.
Section 6. Suspension of Right of Redemption. Notwithstanding the
foregoing, the Trust may postpone payment of the redemption price and may
suspend the right of the holders of Shares to require the Trust to redeem Shares
(a) during any period when the New York Stock Exchange (the "Exchange") is
closed (other than customary weekend and holiday closings), (b) when trading in
the markets the Trust normally utilizes is restricted, or an emergency exists as
determined by the Commission so that disposal of the Trust's investments or
determination of its net asset value is not reasonably practicable, or (c) for
such other periods as the Commission may by order, rule or otherwise permit.
Section 7. Determination of Net Asset Value and Valuation of Portfolio
Assets. The Trustees may in their sole discretion from time to time prescribe
and shall set forth in the By-Laws or in a duly adopted vote or votes of the
Trustees such bases and times for determining the per Share net asset value of
the Shares and the valuation of portfolio assets as they may deem necessary or
desirable.
The Trust may suspend the determination of net asset value during any
period when it may suspend the right of the holders of Shares to require the
Trust to redeem Shares.
<PAGE>
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ARTICLE XII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Liability. No personal liability for any debt
or obligation of the Trust shall attach to any Trustee of the Trust. Without
limiting the foregoing, a Trustee shall not be responsible for or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, investment
adviser, subadviser, principal underwriter or custodian of the Trust, nor shall
any Trustee be responsible or liable for the act or omission of any other
Trustee. Nothing contained herein shall protect any Trustee against any
liability to which such Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his capacity as Trustees or Trustee and neither such
Trustees or Trustee nor the Shareholders shall be personally liable thereon.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of State of the
Commonwealth of Massachusetts, shall recite that the same was executed or made
by or on behalf of the Trust by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, and may contain such further recitals
as they or he may deem appropriate, but the omission thereof shall not operate
to bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the Trust for payment under
such credit, contract or claim; and neither the Shareholders nor the Trustees,
nor any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.
<PAGE>
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Section 2. Trustees' Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions thereunder
shall be binding upon everyone interested. A Trustee shall be liable only for
his own willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes of fact or law.
The Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust and their duties as Trustees
hereunder, and shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. In discharging their
duties, the Trustees, when acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written reports made to the Trustees
by any officer appointed by them, any independent public accountant and (with
respect to the subject matter of the contract involved) any officer, partner or
responsible employee of any other party to any contract entered into hereunder.
The Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.
Section 3. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
Section 4. Indemnification. Subject to the exceptions and limitations
contained in this Section 4, every person who is, or has been, a Trustee,
officer, employee or agent of the Trust, including persons who serve at the
request of the Trust as directors, trustees, officers, employees or agents of
another organization in which the Trust has an interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person"), shall be
indemnified by the Trust to the fullest extent 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 such a
Trustee, director, officer, employee or agent and against amounts paid or
incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Covered Person:
(a) against any liability to the Trust or its Shareholders by reason
of a final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful
<PAGE>
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misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
(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 either a determination
that such Covered Person did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office by the court or other body approving the settlement
or other disposition, or a reasonable determination, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that he
did not engage in such conduct:
(i) by a vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested Trustees
then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification herein provided may be insured against
by 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 or
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 this
Section 4 shall be advanced by the Trust prior to final disposition thereof upon
receipt of an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to indemnification under
this Section 4, provided that either:
(a) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising
out of any such advances; or
<PAGE>
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(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 anyone, as such Disinterested
Trustee, 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 grounds is then or has been pending.
As used in this Section 4, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits, proceedings (civil,
criminal, administrative or other, including appeals), actual or threatened; and
the words "liability" and "expenses" shall include without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.
Section 5. Shareholders. No personal liability for any debt or
obligation of the Trust shall attach to any Shareholder or former Shareholder of
the Trust. In case any Shareholder or former Shareholder of the Trust shall be
held to be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other reason,
the Shareholder or former Shareholder (or his heirs, executors, administrators
or other legal representatives or in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled out of the assets of
the Trust to be held harmless from and indemnified against all loss and expense
arising from such liability; provided, however, there shall be no liability or
obligation of the Trust arising hereunder to reimburse any Shareholder for taxes
paid by reason of such Shareholder's ownership of any Share or for losses
suffered by reason of any changes in value of any Trust assets. The Trust shall,
upon request by the Shareholder or former Shareholder, assume the defense of any
claim made against the Shareholder for any act or obligation of the Trust and
satisfy any judgment thereon.
<PAGE>
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ARTICLE XIII
MISCELLANEOUS
Section 1. Termination of Trust. Unless terminated as provided herein,
the Trust shall continue without limitation of time. The Trust or any series of
the Trust may be terminated at any time by the Trustees by written notice to the
Shareholders of the Trust, or such Series as the case may be, without a vote of
the Shareholders of the Trust, or of such series, or the Trust or any series of
the Trust may be terminated by the affirmative vote of the Shareholders in
accordance with Section 1 of Article IX hereof.
Upon termination of the Trust or any series thereof, after paying or
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, as may be determined by the Trustees, the Trust
shall, in accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets of the Trust or of the particular series thereof to
distributable form in cash or other securities, or any combination thereof, and
distribute the proceeds to the holders of the Shares of the Trust or such series
in the manner set forth by resolution of the Trustees.
Section 2. Filing of Copies, References, Headings. The original or a
copy of this instrument and of each amendment hereto shall be kept in the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment shall be filed by the Trustees with the
Secretary of State of the Commonwealth of Massachusetts, as well as any other
governmental office where such filing may from time to time be required,
provided, however, that the failure to so file will not invalidate this
instrument or any properly authorized amendment hereto. Anyone dealing with the
Trust may rely on a certificate by an officer or Trustee of the Trust as to
whether or not any such amendments have been made and as to any matters in
connection with the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the Trust to
be a copy of this instrument or of any such amendments. In this instrument or in
any such amendment, references to this instrument, and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer to this instrument
as a whole and as amended or affected by any such amendment, and masculine
pronouns shall be deemed to include the feminine and the neuter, as the context
shall require. Headings are placed herein for convenience of reference only, and
in case of any conflict, the text of this instrument,
<PAGE>
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rather than the headings, shall control. This instrument may be executed in any
number of counterparts, each of which shall be deemed an original.
Section 3. Trustees May Resolve Ambiguities. The Trustees may construe
any of the provisions of this Declaration insofar as the same may appear to be
ambiguous or inconsistent with any other provisions hereof, and any such
construction hereof by the Trustees in good faith shall be conclusive as to the
meaning to be given to such provisions.
Section 4. Amendments. Except as otherwise specifically provided in
this Declaration of Trust, this Declaration of Trust may be amended at any time
by an instrument in writing signed by a majority of the then Trustees with the
consent of Shareholders holding more than fifty percent (50%) of Shares entitled
to vote except that an amendment which in the determination of the Trustees
shall affect the holders of one or more series or classes of Shares but not the
holders of all outstanding series or classes shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote to each series
and class affected and no vote of Shareholders of a series or class not affected
shall be required. In addition, notwithstanding any other provision to the
contrary contained in this Declaration of Trust, the Trustees may amend this
Declaration of Trust without the vote or consent of Shareholders (i) at any time
if the Trustees deem it necessary in order for the Trust or any series or class
thereby to meet the requirements of applicable Federal or State laws or
regulations, or the requirements of the regulated investment company provisions
of the Internal Revenue Code, (ii) to designate series or classes or exercise
other powers with respect thereto in accordance with Section 1 and 2 or Article
IV hereof, (iii) change the name of the Trust or to supply any omission, cure
any ambiguity or cure, correct or supplement any defective or inconsistent
provision contained herein, or (iv) for any reason at any time before a
registration statement under the Securities Act of 1933, as amended, covering
the initial public offering of Shares has become effective.
<PAGE>
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IN WITNESS WHEREOF, the undersigned, being the sole Trustee of the
Trust, has executed this instrument as of the date first written above.
/s/ Timothy R. Schwertfeger
------------------------------
Timothy R. Schwertfeger,
as Trustee
333 West Wacker Drive
Chicago, Illinois 60606
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
Then personally appeared the above-named person who is known to me to
be the Trustee of the Trust whose name and signature are affixed to the
foregoing Declaration of Trust and who acknowledged the same to be his free act
and deed, before me this 18th day of March, 1995.
- --------------------------------
"OFFICIAL SEAL"
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
- --------------------------------
/s/ Karen L. Healy
-------------------------------
Notary Public
My Commission Expires: 12-30-95
---------
<PAGE>
EXHIBIT 1(a)(i)
BD&G Draft of 2/15/95
NUVEEN MUNICIPAL BOND FUND
ESTABLISHMENT AND DESIGNATION OF CLASSES
The undersigned, being the sole Trustee(s) of Nuveen Municipal Bond Fund, a
Massachusetts business trust (the "Trust"), acting pursuant to Sections 1 and 2
of Article IV of the Declaration of Trust dated _____________________, 1995,
(the "Declaration"), do hereby divide the Shares of its series, whether
currently existing or created in the future, into three Classes of Shares, as
follows:
1. The three Classes of Shares are designated "Class A Shares", "Class C
Shares" and "Class R Shares".
2. Class A Shares, Class C Shares and Class R Shares shall be entitled to
all the rights and preferences accorded to Shares under the Declaration.
3. The number of Shares of each Class designated hereby shall be unlimited.
4. The purchase price of Class A Shares, Class C Shares and Class R Shares,
the method of determination of the net asset value of Class A Shares, Class C
Shares and Class R Shares, the price, terms and manner of redemption of Class A
Shares, Class C Shares and Class R Shares, any conversion or exchange feature or
privilege of the Class A Shares, Class C Shares and Class R Shares, and the
relative dividend rights of the holders of Class A Shares, Class C Shares and
Class R Shares shall be established by the Trustees of the Trust in accordance
with the Declaration and shall be set forth in the current prospectus and
statement of additional information of the Trust or any series thereof, as
amended from time to time, contained in the Trust's registration statement under
the Securities Act of 1933, as amended (the "Prospectus").
5. Each of the Class A Shares, Class C Shares and Class R Shares shall bear
the expenses of payments under any distribution and service agreements entered
into by or on behalf of the Trust with respect to that Class, and any other
expenses that are properly allocated to such Class in accordance with the
Investment Company Act of 1940, or any
<PAGE>
-2-
rule or order issued thereunder and applicable to the Trust (the "1940 Act").
6. As to any matter on which shareholders are entitled to vote, Class A
Shares, Class C Shares and Class R Shares of a series shall vote together as a
single class; provided however, that notwithstanding the provisions of Section 4
of Article IX of the Declaration to the contrary, (a) as to any matter with
respect to which a separate vote of any Class is required by the 1940 Act or is
required by a separate agreement applicable to such Class, such requirements as
to a separate vote by the Class shall apply, (b) except as required by (a)
above, to the extent that a matter affects more than one Class and the interests
of two or more Classes in the matter are not materially different, then the
Shares of such Classes whose interests in the matter are not materially
different shall vote together as a single Class, but to the extent that a matter
affects more than one Class and the interests of a Class in the matter are
materially different from that of each other Class, then the Shares of such
Class shall vote as a separate class; and (c) except as required by (a) above or
as otherwise required by the 1940 Act, as to any matter which does not affect
the interests of a particular Class, only the holders of Shares of the one or
more affected Classes shall be entitled to vote.
7. The designation of Class A Shares, Class C Shares and Class R Shares
hereby shall not impair the power of the Trustees from time to time to designate
additional classes of Shares of the Trust.
8. Subject to the applicable provisions of the 1940 Act, the Trustees may
from time to time modify the preferences, voting powers, rights and privileges
of any of the Classes designated hereby without any action or consent of the
Shareholders.
IN WITNESS WHEREOF, the undersigned has executed this certificate this
_________ day of ___________, 199__.
_________________________________, Trustee
<PAGE>
EXHIBIT 2
BY-LAWS
OF
NUVEEN MUNICIPAL BOND FUND
ARTICLE I
DECLARATION OF TRUST
AND
OFFICES
Section 1.1. Declaration of Trust. These By-Laws shall be subject to the
Declaration of Trust, as from time to time in effect (the "Declaration of
Trust"), of Nuveen Municipal Bond Fund, the Massachusetts business trust
established by the Declaration of Trust (the "Trust").
Section 1.2. Other Offices. The Trust may have such other offices and
places of business within or without the Commonwealth of Massachusetts as the
Board of Trustees shall determine.
ARTICLE II
SHAREHOLDERS
Section 2.1. Place of Meetings. Meetings of the Shareholders may be held
at such place or places within or without the Commonwealth of Massachusetts as
shall be fixed by the Board of Trustees and stated in the notice of the meeting.
Section 2.2. Regular Meeting. Regular meetings of the Shareholders for the
election of Trustees and the transaction of such other business as may properly
come before the meeting shall be held on an annual or other less frequent
periodic basis at such date and time as the Board of Trustees by resolution
shall designate, except as otherwise required by applicable law.
Section 2.3. Special Meeting. Special meetings of the Shareholders for any
purpose or purposes may be called by the Chairman of the Board, the President or
two or more Trustees, and must be called at the written request stating the
purpose or purposes of the meeting, of Shareholders entitled to cast at least 10
percent of all the votes entitled to be cast at the meeting.
Section 2.4. Notice of Meetings. Notice stating the time and place of the
meeting and in the case of a special meeting the purpose or purposes thereof and
by whom called, shall be delivered to each Shareholder not less than ten nor
more than sixty days prior to the meeting, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of the adjournment.
<PAGE>
Section 2.5. Quorum and Action. (a) The holders of thirty percent (30%) of
the voting power of the shares of beneficial interest of the Trust (the
"Shares") entitled to vote at a meeting are a quorum for the transaction of
business. If a quorum is present when a duly called or held meeting is convened,
the Shareholders present may continue to transact business until adjournment,
even though the withdrawal of a number of Shareholders originally present leaves
less than the proportion or number otherwise required for a quorum.
(b) The Shareholders shall take action by the affirmative vote of the
holders of a majority, except in the case of the election of Trustees which
shall only require a plurality, of the voting power of the Shares present and
entitled to vote at a meeting of Shareholders at which a quorum is present,
except as may be otherwise required by the Investment Company Act of 1940, as
amended (the "1940 Act"), or the Declaration of Trust.
Section 2.6. Voting. At each meeting of the Shareholders, every holder of
Shares then entitled to vote may vote in person or by proxy and shall have one
vote for each Share registered in his name.
Section 2.7. Proxy Representation. A Shareholder may cast or authorize the
casting of a vote by filing a written appointment of a proxy with an officer of
the Trust at or before the meeting at which the appointment is to be effective.
The appointment of a proxy is valid for eleven months, unless a longer period is
expressly provided in the appointment. No appointment is irrevocable unless the
appointment is coupled with an interest in the Shares or in the Trust.
Section 2.8. Adjourned Meetings. Any meeting of Shareholders may be
adjourned to a designated time and place by the vote of the holders of a
majority of the Shares present and entitled to vote thereat even though less
than a quorum is so present without any further notice except by announcement at
the meeting. An adjourned meeting may reconvene as designed, and when a quorum
is present any business may be transacted which might have been transacted at
the meeting as originally called.
ARTICLE III
TRUSTEES
Section 3.1. Qualifications and Number: Vacancies. Each Trustee shall be a
natural person. A Trustee need not be a Shareholder, a citizen of the United
States, or a resident of the Commonwealth of Massachusetts. The number of
Trustees of the Trust, their term and election and the filling of vacancies,
shall be as provided in the Declaration of Trust.
Section 3.2. Powers. The business and affairs of the Trust shall be
managed under the direction of the Board of Trustees. All powers of the Trust
may be exercised by or under the authority of the Board of Trustees, except
those conferred on or reserved to the Shareholders by statute, the Declaration
of Trust or these By-Laws.
Section 3.3. Investment Policies. It shall be the duty of the Board of
Trustees to ensure that the purchase, sale, retention and disposal of portfolio
securities and the other investment
2
<PAGE>
practices of the Trust are at all times consistent with the investment
objectives, policies and restrictions with respect to securities investments and
otherwise of the Trust filed from time to time with the Securities and Exchange
Commission and as required by the 1940 Act, unless such duty is delegated to an
investment adviser pursuant to a written contract, as provided in the
Declaration of Trust. The Trustees, however, may delegate the duty of management
of the assets of the Trust to an individual or corporate investment adviser or
subadviser to act as investment adviser or subadviser pursuant to a written
contract.
Section 3.4. Meetings. Regular meetings of the Trustees may be held
without notice at such times as the Trustee shall fix. Special meetings of the
Trustees may be called by the Chairman of the Board or the President, and shall
be called at the written request of two or more Trustees. Unless waived by each
Trustee, three days' notice of special meetings shall be given to each Trustee
in person, by mail, by telephone, or by telegram or cable, or by any other means
that reasonably may be expected to provide similar notice. Notice of special
meetings need not state the purpose or purposes thereof. Meetings of the
Trustees may be held at any place within or outside the Commonwealth of
Massachusetts. A conference among Trustees by any means of communication through
which the Trustees may simultaneously hear each other during the conference
constitutes a meeting of the Trustees or of a committee of the Trustees, if the
notice requirements have been met (or waived) and if the number of Trustees
participating in the conference would be sufficient to constitute a quorum at
such meeting. Participation in such meeting by that means constitutes presence
in person at the meeting.
Section 3.5. Quorum and Action. A majority of the Trustees currently
holding office, or in the case of a meeting of a committee of the Trustees, a
majority of the members of such committee, shall constitute a quorum for the
transaction of business at any meeting. If a quorum is present when a duly
called or held meeting is convened, the Trustees present may continue to
transact business until adjournment, even though the withdrawal of a number of
Trustees originally present leaves less than the proportion or number otherwise
required for a quorum. At any duly held meeting at which a quorum is present,
the affirmative vote of the majority of the Trustees present shall be the act of
the Trustees or the committee, as the case may be, on any question, except where
the act of a greater number is required by these By-Laws or by the Declaration
of Trust.
Section 3.6. Action by Written Consent in Lieu of Meetings of Trustees. An
action which is required or permitted to be taken at a meeting of the Trustees
or a committee of the Trustees may be taken by written action signed by the
number of Trustees that would be required to take the same action at a meeting
of the Trustees or committee, as the case may be, at which all Trustees were
present. The written action is effective when signed by the required number of
Trustees, unless a different effective time is provided in the written action.
When written action is taken by less than all Trustees, all Trustees shall be
notified immediately of its text and effective date.
Section 3.7. Committees. The Trustees, by resolution adopted by the
affirmative vote of a majority of the Trustees, may designate from their members
an Executive Committee, an Audit Committee and any other committee or
committees, each such committee to consist of two
3
<PAGE>
or more Trustees and to have such powers and authority (to the extent permitted
by law) as may be provided in such resolution. Any such committee may be
terminated at any time by the affirmative vote of a majority of the Trustees.
ARTICLE IV
OFFICERS
Section 4.1. Number and Qualifications. The officers of the Trust shall
include a Chairman of the Board, a President, a Controller, one or more Vice
Presidents (one of whom may be designated an Executive Vice President), a
Treasurer, and a Secretary. Any two or more offices may be held by the same
person. Unless otherwise determined by the Trustees, each officer shall be
appointed by the Trustees for a term which shall continue until the meeting of
the Trustees following the next regular meeting of Shareholders and until his
successor shall have been duly elected and qualified, or until his death, or
until he shall have resigned or have been removed, as hereinafter provided in
these By-Laws. The Trustees may from time to time elect, or delegate to the
Chairman of the Board or the President, or both, the power to appoint, such
officers (including one or more Assistant Vice Presidents, one or more Assistant
Treasurers and one or more Assistant Secretaries) and such agents as may be
necessary or desirable for the business of the Trust. Such other officers shall
hold office for such terms as may be prescribed by the Trustees or by the
appointing authority.
Section 4.2. Resignations. Any officer of the Trust may resign at any time
by giving written notice of his resignation to the Trustees, the Chairman of the
Board, the President or the Secretary. Any such resignation shall take effect at
the time specified therein or, if the time when it shall become effective shall
not be specified therein, immediately upon its receipt, and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 4.3. Removal. An officer may be removed at any time, with or
without cause, by a resolution approved by the affirmative vote of a majority of
the Trustees present at a duly convened meeting of the Trustees.
Section 4.4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause, may be filled for the
unexpired portion of the term by the Trustees, or in the manner determined by
the Trustees.
Section 4.5. The Chairman of the Board. The Chairman of the Board shall be
elected from among the Trustees. He shall be the chief executive officer of the
Trust and shall:
(a) have general active management of the business of the Trust;
(b) when present, preside at all meetings of the Trustees and of the
Shareholders;
(c) see that all orders and resolutions of the Trustees are carried
into effect;
4
<PAGE>
(d) sign and deliver in the name of the Trust any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
Trust, except in cases in which the authority to sign and deliver is
required by law to be exercised by another person or is expressly delegated
by the Declaration of Trust or By-Laws or by the Trustees to some other
officer or agent of the Trust; and
(e) maintain records of and, whenever necessary, certify all
proceedings of the Trustees and the Shareholders.
The Chairman of the Board shall be authorized to do or cause to be done all
things necessary or appropriate, including preparation, execution and filing of
any documents, to effectuate the registration from time to time of the Shares of
the Trust with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended. He shall perform all duties incident to the office of
Chairman of the Board and such other duties as from time to time may be assigned
to him by the Trustees or by these By-Laws.
Section 4.6. The President. The President shall be the chief operating
officer of the Trust and, subject to the Chairman of the Board, he shall have
general authority over and general management and control of the business and
affairs of the Trust. In general, he shall discharge all duties incident to the
office of the chief operating officer of the Trust and such other duties as may
be prescribed by the Trustees and the Chairman of the Board from time to time.
In the absence of the Chairman of the Board or in the event of his disability,
or inability to act or to continue to act, the President shall perform the
duties of the Chairman of the Board and when so acting shall have all the powers
of, and be subject to all the restrictions upon, the Chairman of the Board.
Section 4.7. Executive Vice-President. In the case of the absence or
inability to act of the President and the Chairman of the Board, any Executive
Vice-President shall perform the duties of the President and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. Any Executive Vice-President shall perform all duties incident to the
office of Executive Vice-President and such other duties as from time to time
may be assigned to him by the Trustees, the President or these By-Laws,
Section 4.8. Vice Presidents. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Trustees, the Chairman
of the Board or the President.
Section 4.9. Controller. The Controller shall:
(a) keep accurate financial records for the Trust;
(b) render to the Chairman of the Board, the President and the
Trustees, whenever requested, an account of all transactions by and of the
financial condition of the Trust; and
5
<PAGE>
(c) in general, perform all the duties incident to the office of Controller
and such other duties as from time to time may be assigned to him by the
Trustees, the Chairman of the Board or the President.
Section 4.10. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds and
securities of the Trust, except those which the Trust has placed in the custody
of a bank or trust company pursuant to a written agreement designating such
bank or trust company as custodian of the property of the Trust, as required by
Section 6.5 of these By-Laws;
(b) deposit all money, drafts, and checks in the name of and to the credit
of the Trust in the banks and depositories designated by the Trustees;
(c) endorse for deposit all notes, checks, and drafts received by the Trust
making proper vouchers therefor;
(d) disburse corporate funds and issue checks and drafts in the name of the
Trust, as ordered by the Trustees; and
(e) in general, perform all the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him by the
Trustees, the Chairman of the Board or the President.
Section 4.11. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the purpose,
the minutes of all meetings of the Trustees, the committees of the Trustees and
the Shareholders;
(b) see that all notices are duly given in accordance with the provisions
of these By-Laws and as required by statute;
(c) be custodian of the records of the Trust;
(d) see that the books, reports, statements, certificates and other
documents and records required by statute to be kept and filed are properly kept
and filed; and
(e) in general, perform all the duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him by the
Trustees, the Chairman of the Board or the President.
Section 4.12. Salaries. The salaries of all officers shall be fixed by the
Trustees.
6
<PAGE>
ARTICLE V
SHARES
Section 5.1. Share Certificates. Each owner of Shares of the Trust shall be
entitled upon request to have a certificate, in such form as shall be approved
by the Trustees, representing the number of whole Shares of the Trust owned by
him. Certificates representing fractional Shares shall not be issued. The
certificates representing whole Shares shall be signed in the name of the Trust
by the Chairman of the Board, the President, the Executive Vice President or a
Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer (which signatures may be either manual or facsimile,
engraved or printed). In case any officer who shall have signed such certificate
shall have ceased to be such officer before such certificates shall be issued,
they may nevertheless be issued by the Trust with the same effect as if such
officer were still in office at the date of their issuance.
Section 5.2. Books and Records; Inspection. The Trust shall keep at its
principal executive office, or at another place or places within the United
States determined by the Trustees, a share register not more than one year old,
containing the names and addresses of the shareholders and the number of Shares
held by each Shareholder. The Trust shall also keep, at its principal executive
office, or at another place or places within the United States determined by the
Trustees, a record of the dates on which certificates representing Shares were
issued.
Section 5.3. Share Transfers. Upon compliance with any provisions
restricting the transferability of Shares that may be set forth in the
Declaration of Trust, these By-Laws, or any resolution or written agreement in
respect thereof, transfers of Shares of the Trust shall be made only on the
books of the Trust by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with an
officer of the Trust, or with a transfer agent or a registrar and on surrender
of any certificate or certificates for such Shares properly endorsed and the
payment of all taxes thereon. Except as may be otherwise provided by law or
these By-Laws, the person in whose name Shares stand on the books of the Trust
shall be deemed the owner thereof for all purposes as regards the Trust;
provided that whenever any transfer of Shares shall be made for collateral
security, and not absolutely, such fact, if known to an officer of the Trust,
shall be so expressed in the entry of transfer.
Section 5.4. Regulations. The Trustees may make such additional rules and
regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the issue, certification, transfer and registration of Shares of the
Trust. They may appoint, or authorize any officer or officers to appoint, one or
more transfer agents or one or more transfer clerks and one or more registrars
and may require all certificates for Shares to bear the signature or signatures
of any of them.
Section 5.5. Lost, Destroyed or Mutilated Certificates. The holder of any
certificate representing Shares of the Trust shall immediately notify the Trust
of any loss, destruction or mutilation of such certificate, and the Trust may
issue a new certificate in the place of any certificate theretofore issued by it
which the owner thereof shall allege to have been lost or destroyed or which
shall have been mutilated, and the Trustees may, in their discretion, require
7
<PAGE>
such owner or his legal representatives to give to the Trust a bond in such sum,
limited or unlimited, and in such form and with such surety or sureties as the
Trustees in their absolute discretion shall determine, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate, or the issuance of a new certificate.
Anything herein to the contrary notwithstanding, the Trustees, in their absolute
discretion, may refuse to issue any such new certificate, except as otherwise
required by law.
Section 5.6. Record Date: Certification of Beneficial Owner. (a) The
Trustees may fix a date not more than ninety days before the date of a meeting
of Shareholders as the date for the determination of the holders of Shares
entitled to notice of and entitled to vote at the meeting or any adjournment
thereof.
(b) The Trustees may fix a date for determining Shareholders entitled to
receive payment of any dividend or distribution or allotment of any rights or
entitled to exercise any rights in respect of any change, conversion or exchange
of Shares.
(c) In the absence of such fixed record date, (i) the date for
determination of Shareholders entitled to notice of and entitled to vote at a
meeting of Shareholders shall be the later of the close of business on the day
on which notice of the meeting is mailed or the thirtieth day before the
meeting, and (ii) the date for determining Shareholders entitled to receive
payment of any dividend or distribution or an allotment of any rights or
entitled to exercise any rights in respect of any change, conversion or exchange
of Shares shall be the close of business on the day on which the resolution of
the Trustees is adopted.
(c) A resolution approved by the affirmative vote of a majority of the
Trustees present may establish a procedure whereby a Shareholder may certify in
writing to the Trust that all or a portion of the Shares registered in the name
of the Shareholder are held for the account of one or more beneficial owners.
Upon receipt by the Trust of the writing, the persons specified as beneficial
owners, rather than the actual Shareholders, are deemed the Shareholders for the
purposes specified in the writing.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Fiscal Year. The fiscal year of the Trust shall be as fixed by
the Trustees of the Trust.
Section 6.2. Notice of Waiver of Notice. (a) Any notice of a meeting
required to be given under these By-Laws to Shareholders or Trustees, or both,
may be waived by any such person (i) orally or in writing signed by such person
before, at or after the meeting or (ii) by attendance at the meeting in person
or, in the case of a Shareholder, by proxy.
(b) Except as otherwise specifically provided herein, all notices required
by these By-Laws shall be printed or written, and shall be delivered either
personally, by telecopy, telegraph or cable, or by mail or courier or delivery
service, and, if mailed, shall be deemed to be delivered
8
<PAGE>
when deposited in the United States mail, postage prepaid, addressed to the
Shareholder or Trustee at his address as it appears on the records of the Trust.
ARTICLE VII
AMENDMENTS
Section 7.1. These By-Laws may be amended or repealed, or new By-Laws may
be adopted, by the Trustees at any meeting thereof or by action of the Trustees
by written consent in lieu of a meeting.
9
<PAGE>
EXHIBIT 4(a)
- -------------- ---------------------
NUMBER CLASS R SHARES
- -------------- ---------------------
NUVEEN MUNICIPAL BOND FUND
Organized Under the Laws of the Commonwealth of Massachusetts
This is to certify that SEE REVERSE FOR
CERTAIN DEFINITIONS
is the owner of
- ------------------
CUSIP
- ------------------
FULLY PAID AND NON-ASSESSABLE CLASS R SHARES
- ----------===========================================================----------
of beneficial interest, with the par value of ten cents ($.10) each, of the
Nuveen Municipal Bond Fund (herein called the "Trust") transferable on the books
of the Trust by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. The shares represented by this
certificate are issued and held subject to all of the provisions of the
Declaration of Trust establishing the Trust as a Massachusetts business trust
and any amendments thereto and any designation of classes, and the By-Laws of
the Trust, and any amendments thereto, copies of which are on file with the
Transfer Agent, to all of which the holder by acceptance hereof expressly
assents. This certificate is executed on behalf of the Trust by the officers as
officers and not individually and the obligations hereof are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Fund. This certificate is not valid unless
countersigned by the Transfer Agent.
WITNESS the facsimile signatures of its duly authorized officers.
Dated:
NUVEEN MUNICIPAL BOND FUND
[LOGO SIGNATURE OF RICHARD J. FRANKE]
Secretary, Nuveen Municipal Bond Fund Chairman of the Board,
Nuveen Municipal Bond Fund
Countersigned
SHAREHOLDER SERVICES, INC.
Denver (Colo.) Transfer Agent
By
Authorized Signature
<PAGE>
NUVEEN MUNICIPAL BOND FUND
Nuveen Municipal Bond Fund (the "Trust") will furnish to any shareholder, upon
request and without charge, a full statement of the designations, preferences,
limitations as to dividends, qualifications, and terms and conditions of
redemption and relative rights and preferences of the shares of beneficial
interest of each class or series of the Trust authorized to be issued, so far as
they have been determined, and the authority of the Board of Trustees to
determine the relative rights and preferences of subsequent classes or series.
Any such request should be addressed to the Secretary of the Trust.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
JNIF GIFT MIN ACT - __________ Custodian __________
(Cust) (Minor)
under Uniform gifts to Minors
Act __________
(State)
Additional abbreviations may also be used though not in the above list.
_______________________________________________________________________________
For value received, _____________ hereby sell, assign and transfer unto
- ----------------------------
| | | | | | | | | |
- ----------------------------
Please insert social security or other identifying number of assignee
_______________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_______________________________________________________________________________
________________________________________________________________________ Shares
of the beneficial interest represented by the within certificate, and do hereby
irrevocably constitute and appoint ____________________________________________
____________________________________________ Attorney to transfer the said
shares on the books of the within-named Trust with full power of substitution on
the premises.
Dated, ________________________
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the certificate in every
particular, without alteration or
enlargement of any change whatever.
Owner
- -------------------------------
The signature(s) must be guaranteed by a
commercial bank or trust company located
or having a correspondent in New York
City, or by a member firm of the New
York, American, Midwest or Pacific Coast
stock exchanges, whose signature(s) is
known to the Transfer Agent of the Trust.
Signature of Co-Owner, if any
- -------------------------------
Signature(s) guaranteed by:
- -------------------------------------------------------------------------------
PLEASE NOTE: This document contains a watermark when viewed at an angle. It is
invalid without this watermark: [LOGO OF NUVEEN]
- -------------------------------------------------------------------------------
This Space Must Not Be Covered In Any Way
<PAGE>
EXHIBIT 4(b)
- -------------- ---------------------
NUMBER CLASS A SHARES
- -------------- ---------------------
NUVEEN MUNICIPAL BOND FUND
Organized Under the Laws of the Commonwealth of Massachusetts
This is to certify that SEE REVERSE FOR
CERTAIN DEFINITIONS
is the owner of
- ------------------
CUSIP
- ------------------
FULLY PAID AND NON-ASSESSABLE CLASS A SHARES
- ----------===========================================================----------
of beneficial interest, with the par value of ten cents ($.10) each, of the
Nuveen Municipal Bond Fund (herein called the "Trust") transferable on the books
of the Trust by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. The shares represented by this
certificate are issued and held subject to all of the provisions of the
Declaration of Trust establishing the Trust as a Massachusetts business trust
and any amendments thereto and any designation of classes, and the By-Laws of
the Trust, and any amendments thereto, copies of which are on file with the
Transfer Agent, to all of which the holder by acceptance hereof expressly
assents. This certificate is executed on behalf of the Trust by the officers as
officers and not individually and the obligations hereof are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Fund. This certificate is not valid unless
countersigned by the Transfer Agent.
WITNESS the facsimile signatures of its duly authorized officers.
Dated:
NUVEEN MUNICIPAL BOND FUND
[LOGO SIGNATURE OF RICHARD J. FRANKE]
Secretary, Nuveen Municipal Bond Fund Chairman of the Board,
Nuveen Municipal Bond Fund
Countersigned
SHAREHOLDER SERVICES, INC.
Denver (Colo.) Transfer Agent
By
Authorized Signature
<PAGE>
NUVEEN MUNICIPAL BOND FUND
Nuveen Municipal Bond Fund (the "Trust") will furnish to any shareholder, upon
request and without charge, a full statement of the designations, preferences,
limitations as to dividends, qualifications, and terms and conditions of
redemption and relative rights and preferences of the shares of beneficial
interest of each class or series of the Trust authorized to be issued, so far as
they have been determined, and the authority of the Board of Trustees to
determine the relative rights and preferences of subsequent classes or series.
Any such request should be addressed to the Secretary of the Trust.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
JNIF GIFT MIN ACT - __________ Custodian __________
(Cust) (Minor)
under Uniform gifts to Minors
Act __________
(State)
Additional abbreviations may also be used though not in the above list.
_______________________________________________________________________________
For value received, _____________ hereby sell, assign and transfer unto
- ----------------------------
| | | | | | | | | |
- ----------------------------
Please insert social security or other identifying number of assignee
_______________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_______________________________________________________________________________
________________________________________________________________________ Shares
of the beneficial interest represented by the within certificate, and do hereby
irrevocably constitute and appoint ____________________________________________
____________________________________________ Attorney to transfer the said
shares on the books of the within-named Trust with full power of substitution on
the premises.
Dated, ________________________
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the certificate in every
particular, without alteration or
enlargement of any change whatever.
Owner
- -------------------------------
The signature(s) must be guaranteed by a
commercial bank or trust company located
or having a correspondent in New York
City, or by a member firm of the New
York, American, Midwest or Pacific Coast
stock exchanges, whose signature(s) is
known to the Transfer Agent of the Trust.
Signature of Co-Owner, if any
- -------------------------------
Signature(s) guaranteed by:
- -------------------------------------------------------------------------------
PLEASE NOTE: This document contains a watermark when viewed at an angle. It is
invalid without this watermark: [LOGO OF NUVEEN]
- -------------------------------------------------------------------------------
This Space Must Not Be Covered In Any Way
<PAGE>
EXHIBIT 4(c)
- -------------- ---------------------
NUMBER CLASS C SHARES
- -------------- ---------------------
NUVEEN MUNICIPAL BOND FUND
Organized Under the Laws of the Commonwealth of Massachusetts
This is to certify that SEE REVERSE FOR
CERTAIN DEFINITIONS
is the owner of
- ------------------
CUSIP
- ------------------
FULLY PAID AND NON-ASSESSABLE CLASS R SHARES
- ----------===========================================================----------
of beneficial interest, with the par value of ten cents ($.10) each, of the
Nuveen Municipal Bond Fund (herein called the "Trust") transferable on the books
of the Trust by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. The shares represented by this
certificate are issued and held subject to all of the provisions of the
Declaration of Trust establishing the Trust as a Massachusetts business trust
and any amendments thereto and any designation of classes, and the By-Laws of
the Trust, and any amendments thereto, copies of which are on file with the
Transfer Agent, to all of which the holder by acceptance hereof expressly
assents. This certificate is executed on behalf of the Trust by the officers as
officers and not individually and the obligations hereof are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Fund. This certificate is not valid unless
countersigned by the Transfer Agent.
WITNESS the facsimile signatures of its duly authorized officers.
Dated:
NUVEEN MUNICIPAL BOND FUND
[LOGO SIGNATURE OF RICHARD J. FRANKE]
Secretary, Nuveen Municipal Bond Fund Chairman of the Board,
Nuveen Municipal Bond Fund
Countersigned
SHAREHOLDER SERVICES, INC.
Denver (Colo.) Transfer Agent
By
Authorized Signature
<PAGE>
NUVEEN MUNICIPAL BOND FUND
Nuveen Municipal Bond Fund (the "Trust") will furnish to any shareholder, upon
request and without charge, a full statement of the designations, preferences,
limitations as to dividends, qualifications, and terms and conditions of
redemption and relative rights and preferences of the shares of beneficial
interest of each class or series of the Trust authorized to be issued, so far as
they have been determined, and the authority of the Board of Trustees to
determine the relative rights and preferences of subsequent classes or series.
Any such request should be addressed to the Secretary of the Trust.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
JNIF GIFT MIN ACT - __________ Custodian __________
(Cust) (Minor)
under Uniform gifts to Minors
Act __________
(State)
Additional abbreviations may also be used though not in the above list.
_______________________________________________________________________________
For value received, _____________ hereby sell, assign and transfer unto
- ----------------------------
| | | | | | | | | |
- ----------------------------
Please insert social security or other identifying number of assignee
_______________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_______________________________________________________________________________
________________________________________________________________________ Shares
of the beneficial interest represented by the within certificate, and do hereby
irrevocably constitute and appoint ____________________________________________
____________________________________________ Attorney to transfer the said
shares on the books of the within-named Trust with full power of substitution on
the premises.
Dated, ________________________
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the certificate in every
particular, without alteration or
enlargement of any change whatever.
Owner
- -------------------------------
The signature(s) must be guaranteed by a
commercial bank or trust company located
or having a correspondent in New York
City, or by a member firm of the New
York, American, Midwest or Pacific Coast
stock exchanges, whose signature(s) is
known to the Transfer Agent of the Trust.
Signature of Co-Owner, if any
- -------------------------------
Signature(s) guaranteed by:
- -------------------------------------------------------------------------------
PLEASE NOTE: This document contains a watermark when viewed at an angle. It is
invalid without this watermark: [LOGO OF NUVEEN]
- -------------------------------------------------------------------------------
This Space Must Not Be Covered In Any Way
<PAGE>
EXHIBIT 5
INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
AGREEMENT made this 13th day of June, 1995, by and between NUVEEN MUNICIPAL
BOND FUND, a Massachusetts business trust (the "Fund"), 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 Fund hereby employs the Adviser to act as the investment adviser for,
and to manage the investment and reinvestment of the assets of the Fund in
accordance with the Fund's investment objective and policies and limitations,
and to administer its affairs to the extent requested by and subject to the
supervision of the Board of Trustees of the Fund for the period and upon the
terms herein set forth. The investment of such assets shall be subject to the
Fund's policies, restrictions and instructions with respect to securities
investments as set forth in the Fund's Registration Statement on Form N-1A under
the Securities Act of 1933 and the Investment Company Act of 1940 covering the
Fund's shares of beneficial interest, including the Prospectus 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 Commission relating to the management of registered
open-end, diversified management investment companies.
<PAGE>
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 Fund's transfer agent and shareholder service agent) for the
Fund, to permit any of its officers or employees to serve without compensation
as trustees or officers of the Fund 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 Fund in any way, nor otherwise be deemed
an agent of the Fund.
2. For the services and facilities described in Section 1, the Fund will pay
to the Adviser, at the end of each calendar month, an investment management fee
computed at an annual 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% On assets of $2 billion and over
For the month and year in which this Agreement becomes effective, or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement shall have been in effect during the month and year, respectively.
The services of the Adviser to the Fund under
<PAGE>
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. In addition to the services and facilities described in Section 1 the
Adviser shall assume and pay to the extent hereafter provided: (x) any expenses
for services rendered by a custodian for the safekeeping of the Fund's
securities or other property, for keeping its books of account, for calculating
the net asset value of the Fund as provided in the Declaration of Trust of the
Fund, and any other charges of the custodian; and (y) the cost and expenses of
the Fund's operations, including compensation of the trustees, transfer,
dividend disbursing and shareholder service agent expenses, legal fees, expenses
of independent accountants, costs of share certificates, expenses of preparing,
printing and distributing reports to shareholders and governmental agencies, and
all fees payable to Federal, State, or other governmental agencies on account of
the registration of securities issued by the Fund, filing of corporate documents
or otherwise. Notwithstanding the foregoing, the Adviser shall not be obligated
to assume or pay interest, taxes, fees incurred in acquiring and disposing of
portfolio securities or extraordinary expenses of the Fund. The Fund shall not
incur any obligation for management or administrative expenses which the Fund
intends the Adviser to assume and pay hereunder without first obtaining the
written approval of the Adviser.
The Adviser shall arrange for officers or employees of the Adviser to serve,
without compensation from the Fund, as trustees, officers or agents of the Fund,
if duly elected or appointed to such positions, and subject to their individual
consent and to any limitations imposed by law.
<PAGE>
The foregoing enumerated expenses are hereby assumed by the Adviser to the
extent they, together with the Adviser's fee payable hereunder (but excluding
interest, taxes, fees incurred in acquiring and disposing of portfolio
securities and extraordinary expenses), exceed during any fiscal year .75 of 1%
of the Fund's average net assets for such year; to the extent they do not exceed
such percentage, such expenses shall be properly chargeable to the Fund. If, at
the end of any month, the expenses of the Fund properly chargeable to the income
account on a year-to-date basis shall exceed the appropriate percentage of
average net assets, the payment to the Adviser for that month shall be reduced
and, if necessary, the Adviser shall assume and pay expenses pursuant hereto so
that the total year-to-date net expense will not exceed such percentage. As of
the end of the Fund's fiscal year the foregoing computation and assumption of
expenses shall be readjusted, if necessary, so that the expenses assumed and
paid by the Adviser, if any, are such, and the aggregate compensation payable to
the Adviser for the year, (otherwise equal to the percentage set forth in
Section 2 hereof of the average net asset value as determined and described
herein throughout the fiscal year) is diminished as may be necessary, so that
the total amount of expenses borne by the Fund shall not exceed the applicable
expense limitation.
The net asset value of the Fund shall be calculated as provided in the
Declaration of Trust of the Fund. On each day when net asset value is not
calculated, the net asset value of a share of beneficial interest of the 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.
<PAGE>
4. Subject to applicable statutes and regulations, it is understood that
officers, trustees, or agents of the Fund are, or may be, interested in the
Adviser as officers, directors, agents, shareholders or otherwise, and that the
officers, directors, shareholders and agents of the Adviser may be interested in
the Fund otherwise than as trustees, officers or agents.
5. 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.
6. The Adviser reserves the right to manage other investment accounts and
funds, including those with investment objectives similar to the Fund. In the
event that the Adviser manages other investment accounts or funds, securities
considered as investments for the Fund may also be appropriate for such 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 Fund and the portfolios of its other investment
accounts and funds purchasing securities whenever decisions are made to purchase
or sell securities by the Fund and 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
<PAGE>
investment objectives of the Fund and such other accounts and funds, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment by the Fund and such other accounts and
funds, the size of investment commitments generally held by the fund and such
accounts and funds, and the opinions of the persons responsible for recommending
investments to the Fund and such other accounts and funds.
7. This Agreement shall continue in effect until August 1, 1996, 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 1940.
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 Fund
or by the Adviser upon sixty (60) days' written notice to the other party. The
Fund may effect termination by action of the Board of Trustees, or by vote of a
majority of the outstanding shares of beneficial interest of the Fund,
accompanied by appropriate notice.
This Agreement may be terminated, at any time, with the payment of any
penalty, by the Board of Trustees of the Fund, or by vote of a majority of the
outstanding shares of beneficial interest of the 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.
<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.
8. 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.
9. 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 Fund shall thereafter refrain
from using any name of the Fund 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.
10. 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.
11. 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 trustee of the Fund and not individually, and any obligation of the Fund
shall be binding only upon the assets
<PAGE>
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.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed on the day and year above written.
NUVEEN MUNICIPAL BOND FUND
By:
-------------------------------------
President
Attest:
------------------------
NUVEEN ADVISORY CORP.
By:
-------------------------------------
Vice President
Attest:
------------------------
<PAGE>
EXHIBIT 6(a)
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT made as of this 13th day of June 1995, between NUVEEN MUNICIPAL
BOND FUND, a Massachusetts business trust (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 $.10 per share, including such Class
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
<PAGE>
of 1933 ("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 Class,
whenever, in its sole discretion, it deems such action to be desirable.
5. The Underwriter shall sell Shares to, or through, brokers, dealers or
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 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
2
<PAGE>
amendments thereto as exhibits to its currently effective registration statement
under the Securities Act. Shares sold to dealers shall be for resale by such
dealers only at the public offering price(s) set forth in the Fund's then
current prospectus. The current forms of such agreements are attached hereto as
Exhibits 1, 2 and 3.
6. Shares offered for sale, or sold by the Underwriter, shall be so offered
or sold at a price per Share determined in accordance with the then current
Prospectus relating to the sale of Shares except as departure from such prices
shall be permitted by the rules and regulations of the Securities and Exchange
Commission. Any public offering price shall be the net asset value per Share
plus a sales charge of not more than 4.75% of such public offering price. Shares
may be sold at net asset value without a sales charge to such class or classes
of investors or in such class or classes of transactions as may be permitted
under applicable rules of the Securities and Exchange Commission and as
described in the then current Prospectus of the Fund. The net asset value per
Share of each Class shall be computed 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
3
<PAGE>
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 it consent, to comply with any requirement which, in its opinion, is
unduly burdensome).
10. The Fund will furnish to the Underwriter, from time to time, such
information with respect to the Fund and the Shares as the Underwriter may
reasonably request for use in connection with the sale of Shares. The
Underwriter agrees that it will not use or distribute, nor will it authorize
dealers or others to use, distribute or disseminate, in connection with the sale
of such Shares, any statements other than those contained in the Fund's current
Prospectus and Statement of Additional Information, except such supplemental
literature or advertising as shall
4
<PAGE>
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 director of the Fund, nor to any
officer or director of the Underwriter, or of any corporation or association
furnishing investment advisory, managerial, or supervisory services to the Fund,
nor to any such corporation or association, unless such sales are made in
accordance with the then current prospectus relating to the sale of such Shares.
12. In selling Shares for the account of the Fund, the Underwriter will in
all respects conform to the requirements of all State and Federal laws and the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
relating to such sales, and will indemnify and save harmless the Fund from any
damage or expense on account of any wrongful act by the Underwriter or any
employee, representative, or agent of the Underwriter. The Underwriter will
observe and be bound by all the provisions of the Declaration of Trust of the
Fund (and of any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940, notice of which shall have been given by the
Fund to the Underwriter) which at the time in any way require, limit, restrict,
prohibit or otherwise regulate any action on the part of the Underwriter.
13. The Underwriter will require each dealer to conform to the provisions
hereof and of the Registration Statement (and related prospectus) at the time in
effect under the Securities
5
<PAGE>
Act with respect to the public offering price of the Shares, and neither the
Underwriter nor any such dealer shall withhold the placing of purchase orders so
as to make a profit thereby.
14. The Fund will pay, or cause to be paid, expenses (including the fees and
disbursements of its own counsel) of any registration of Shares under the
Securities Act, expenses of qualifying or continuing the qualification of the
Shares for sale and, in connection therewith, of qualifying or continuing the
qualification of the Fund as a dealer or broker under the laws of such states as
may be designated by the Underwriter under the conditions herein specified, and
expenses incident to the issuance of the Shares such as the cost of Share
certificates, issue taxes, and fees of the transfer and shareholder service
agent. The Underwriter will pay, or cause to be paid, all expenses (other than
expenses which any dealer may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the Shares issued or sold
hereunder, including, without limiting the generality of the foregoing, all: (a)
expenses of printing and 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.
6
<PAGE>
15. This agreement shall continue in effect until May 1, 1990, unless and
until terminated by either party as hereinafter provided, and will continue from
year to year thereafter, but only so long as such continuance is specifically
approved, at least annually, in the manner required by the Investment Company
Act of 1940. Either party hereto may terminate this agreement on any date by
giving the other party at least six month's 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.
16. This agreement shall automatically terminate in the event of its
assignment.
17. Any notice under this agreement shall be in writing, addressed, and
delivered or mailed, postage pre-paid, to 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 trustee 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.
7
<PAGE>
IN WITNESS WHEREOF, the Fund and the Underwriters have caused this agreement
to be executed on its behalf as of the day and year first above written.
NUVEEN MUNICIPAL BOND FUND
By:
-------------------------------------
Vice President
Attest:
- ------------------------------
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By:
-------------------------------------
Vice President
Attest:
- ------------------------------
Assistant Secretary
8
<PAGE>
EXHIBIT 8(a)(i)
Assignment of Custody Agreement
This Assignment is made this 13th day of June, 1995 by and among Nuveen
Municipal Bond Fund, Inc., a Maryland corporation (the "Fund"), Nuveen Municipal
Bond Fund, a Massachusetts business trust (the "Trust") and United States Trust
Company of New York, a New York State chartered bank and trust company ("U.S.
Trust");
WHEREAS, the Fund and U.S. Trust are the contracting parties under that certain
Custody Agreement (the "Agreement") pursuant to which U.S. Trust acts as
custodian for the Fund; and
WHEREAS, the Fund intends to reorganize into the Trust on or about June 12, 1995
(the "Reorganization"); and
WHEREAS, the Board of Directors of the Fund, at a meeting called for the purpose
of approving the Reorganization, so approved the Reorganization; and
WHEREAS, the shareholders of record of the Fund properly approved the
Reorganization at a shareholder meeting called on May 26, 1995; and
WHEREAS, the initial sole trustee of the Trust approved by written consent the
appointment of U.S. Trust to serve as the depository and the custodian of the
assets of the Fund;
NOW THEREFORE, in connection with the mutual covenants contained in the
Agreement, the parties hereto do hereby agree that the Fund's rights and
obligations under the Agreement are assigned to the Trust, as of the
consummation of the Reorganization.
<PAGE>
NUVEEN MUNICIPAL BOND FUND, INC.
By:
-------------------------------------
ATTEST:
- ------------------------------
NUVEEN MUNICIPAL BOND FUND
By:
-------------------------------------
ATTEST:
- ------------------------------
UNITED STATES TRUST COMPANY OF
NEW YORK
By:
-------------------------------------
ATTEST:
- ------------------------------
<PAGE>
EXHIBIT 9(a)(i)
Assignment of Transfer Agency Agreement
This Assignment is made this 13th day of June, 1995 by and among Nuveen
Municipal Bond Fund, Inc., a Maryland corporation (the "Fund"), Nuveen Municipal
Bond Fund, a Massachusetts business trust (the "Trust") and Shareholder
Services, Inc., a Colorado corporation ("SSI");
WHEREAS, the Fund and SSI are the contracting parties under that certain
Transfer Agency Agreement (the "Agreement") pursuant to which SSI acts as
transfer agent and dividend disbursing agent for the Fund; and
WHEREAS, the Fund intends to reorganize into the Trust on or about June 12, 1995
(the "Reorganization"); and
WHEREAS, the Board of Directors of the Fund, at a meeting called for the purpose
of approving the Reorganization, so approved the Reorganization; and
WHEREAS, the shareholders of record of the Fund properly approved the
Reorganization at a shareholder meeting called on May 26, 1995; and
WHEREAS, the initial sole trustee of the Trust approved by written consent the
appointment of SSI to serve as transfer agent and dividend disbursing agent for
the Fund;
NOW THEREFORE, in connection with the mutual covenants contained in the
Agreement, the parties hereto do hereby agree that the Fund's rights and
obligations under the Agreement are assigned to the Trust, as of the
consummation of the Reorganization.
<PAGE>
NUVEEN MUNICIPAL BOND FUND, INC.
By:
-------------------------------------
ATTEST:
- ------------------------------
NUVEEN MUNICIPAL BOND FUND
By:
-------------------------------------
ATTEST:
- ------------------------------
SHAREHOLDER SERVICES, INC.
By:
-------------------------------------
ATTEST:
- ------------------------------
<PAGE>
June __, 1995
Nuveen Municipal Bond Fund
333 West Wacker Drive
Chicago, Illinois 60606
Ladies and Gentlemen:
We have acted as counsel for Nuveen Municipal Bond Fund, Inc. (the
"Fund") in connection with the registration under the Securities Act of 1933
(the "Act") of an indefinite number of its shares (designated as Class R, Class
A and Class C shares) (collectively the "Shares"), $.10 par value, in post-
effective amendment no. 31 ( the "Amendment") to registration statement no. 2-
57408 on Form N-1A (the "Registration Statement).
In this connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, records,
certificates and other papers as we deemed it necessary to examine for the
purpose of this opinion, including the Declaration of Trust of the Fund (the
"Declaration of Trust"), a form of the Certificate for the Establishment and
Designation of Classes, bylaws of the Fund, actions of the board of trustees of
the Fund authorizing the issuance of Shares, the forms of certificates to
evidence the Shares, and the Amendment.
Based on the foregoing examination, we are of the opinion that:
1. The Fund is an unincorporated voluntary association legally
organized and validly existing under the laws of the Commonwealth of
Massachusetts.
2. Upon the issuance and delivery of the Shares in accordance with
the Declaration of Trust and the actions of the board of trustees authorizing
the issuance of such Shares, and the receipt by the Fund of the authorized
consideration therefor, the Shares so issued will be validly issued and
outstanding, fully paid and nonassessable (although shareholders of the Fund may
be subject to liability under certain circumstances as described in the
prospectus of the Fund included as Part A of the Registration Statement under
the caption "General Information").
In giving this opinion we have relied upon the opinion of Bingham,
Dana & Gould to us dated June __, 1995, and have made no independent inquiry
with respect to any matter covered by such opinion.
<PAGE>
Nuveen Municipal Bond Fund
June __, 1995
Page 2
We consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are in
the category of person whose consent is required under Section 7 of the Act.
Very truly yours,
<PAGE>
EXHIBIT 10(b)
June __, 1995
Bell, Boyd & Lloyd
Three First National Plaza, Suite 3300
70 West Madison Street
Chicago, Illinois 60602-4207
Re: Nuveen Municipal Bond Fund
--------------------------
Ladies and Gentlemen:
We have acted as special Massachusetts counsel to Nuveen Municipal Bond
Fund (the "Fund"), in connection with the Fund's Post-Effective Amendment
Number __ to its Registration Statement on Form N-1A as proposed to be filed
with the Securities and Exchange Commission on ____________, 1995 (the
"Amendment") pursuant to Rule 485(a) of the Investment Company Act of 1940, (as
proposed to be amended, the "Registration Statement") with respect to certain of
its Class A Common Shares, par value $.01 per share (the "Class A Shares"), its
Class C Common Shares, par value $.01 per share (the "Class C Shares") and its
Class R Common Shares, par value $.01 per share (the "Class R Shares", such
Class A Shares, Class C Shares and Class R Shares referred to collectively
herein as the "Common Shares"). You have requested that we deliver this opinion
to you, as special counsel to the Fund, for use by you in connection with your
opinion to the Fund with respect to the Common Shares.
In connection with the furnishing of this opinion, we have examined the
following documents:
(a) a certificate of the Secretary of State of the Commonwealth of
Massachusetts as to the existence of the Fund;
<PAGE>
Bell, Boyd & Lloyd
June __, 1995
Page 2
(b) copy, certified by the Secretary of State of the Commonwealth of
Massachusetts, of the Fund's Declaration of Trust dated March 13, 1995;
(c) a copy, certified by the Secretary of State of the Commonwealth of
Massachusetts, of the Fund's Certificate for the Establishment and
Designation of Classes on file in the office of the Secretary of State (the
"Certificate of Designation");
(d) a Certificate executed by an appropriate officer of the Fund,
certifying as to, and attaching copies of, the Fund's Declaration of Trust
and By-Laws, and certain resolutions adopted by the Trustees of the Fund;
(e) a printer's proof dated April 5, 1995 of the Amendment.
In such examination, we have assumed the genuineness of all signatures, the
conformity to the originals of all of the documents reviewed by us as copies,
the authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing any
document. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission will be in substantially the form of the printer's proof
referred to in paragraph (e) above.
This opinion is based entirely on our review of the documents listed above
and such investigation of law as we have deemed necessary or appropriate. We
have made no other review or investigation of any kind whatsoever, and we have
assumed, without independent inquiry, the accuracy of the information set forth
in such documents.
This opinion is limited solely to the internal substantive laws of the
Commonwealth of Massachusetts as applied by courts located in such Commonwealth,
except that we express no opinion as to any Massachusetts securities law.
We understand that all of the foregoing assumptions and limitations are
acceptable to you.
<PAGE>
Bell, Boyd & Lloyd
June __, 1995
Page 3
Based upon and subject to the foregoing, please be advised that it is our
opinion that:
1. The Fund is duly organized and existing under the Fund's Declaration of
Trust and the laws of the Commonwealth of Massachusetts as a voluntary
association with transferable shares of beneficial interest commonly referred to
as a "Massachusetts business trust."
2. The Common Shares, when issued and sold in accordance with the Fund's
Declaration of Trust, Certificate of Designation and By-Laws and for the
consideration described in the Registration Statement, will be legally issued,
fully paid and non-assessable, except that, as set forth in the Registration
Statement, shareholders of the Fund may under certain circumstances be held
personally liable for its obligations.
We hereby consent to your reliance on this opinion in connection with your
opinion to the Fund with respect to the Common Shares, to the reference to our
name in the Registration Statement under the heading "Legal Opinions" and to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
BINGHAM, DANA & GOULD
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our report
dated April 1, 1994, and to all references to our firm included in or made a
part of this registration statement of Nuveen Municipal Bond Fund.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
April 11, 1995
<PAGE>
EXHIBIT 15
NUVEEN MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION AND SERVICE
PURSUANT TO RULE 12b-1
June __, 1995
WHEREAS, Nuveen Municipal Bond Fund, a Massachusetts business trust (the "Fund")
engages in business as an open-end management investment company and is
registered under the Investment Company Act of 1940, as amended (The "Act");
WHEREAS, the Fund employs John Nuveen & Co. Incorporated (the "Distributor") as
distributor of the shares of common stock of the Fund (the "Shares") pursuant to
a Distribution Agreement dated as of June __, 1995;
WHEREAS, the Fund is authorized to issue Shares in three different classes
("Classes"): Class A, Class C and Class R;
WHEREAS, the Fund desires to adopt a Plan of Distribution and Service pursuant
to Rule 12b-1 under the Act ("Rule 12b-1"), and the Board of Trustees of the
Fund has determined that there is a reasonable likelihood that adoption of this
Plan of Distribution and Service will benefit the Fund and its shareholders;
WHEREAS, the Fund, along with several other investment companies for which the
Distributor serves as distributor, has obtained an exemptive order (the "Order")
from the Securities and Exchange Commission (SEC) 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 Order, the purchase of Class A Shares is generally
subject to an up-front sales charge, not to exceed 4.50% of the purchase price,
and the purchase of Class C Shares will not be subject to an up-front sales
charge, but in lieu thereof the Class C Shares will be subject to an asset-based
distribution fee, as described below;
WHEREAS, Class C Shares redeemed within 12 months of purchase may be subject to
a contingent deferred sales charge ("CDSC"); and
WHEREAS, Shares representing an investment in Class C will automatically
convert to Class A Shares 72 months after 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 and Class C of the Fund and the servicing of
accounts holding such Shares.
<PAGE>
(b) The amount of such compensation paid during any one year shall consist
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; and consist 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 (in lieu of an up-
front sales charge) not to exceed .75% of average daily net assets of the Class
C Shares of the Fund less the amount of any CDSC received by the Distributor and
for which any applicable reinstatement privilege has expired. Such compensation
shall be calculated and accrued daily and paid quarterly or at such other
intervals as the Board of Trustees may determine.
(c) The Distributor shall pay any Distribution Fees it receives under the
Plan with respect to Class C Shares of the Fund for which a particular
underwriter, dealer, broker, bank or other selling entity (including the
Distributor) having a Dealer Distribution Agreement in effect ("Authorized
Dealer") is the dealer of record to such Authorized Dealers to compensate such
organizations in connection with sales of Shares of Class C of the Fund. The
Distributor may retain any Distribution Fees not so paid. Payments of
Distribution Fees to any Authorized Dealer as of any quarter-end will not exceed
.75% per year based on average net assets of accounts for which such Authorized
Dealer appeared on the records of the Fund and/or its transfer agent as the
dealer of record during the preceding quarter.
(d) The Distributor shall pay any Service Fees it receives under the Plan
with respect to a given Class A or C of the Fund for which a particular
Authorized Dealer (including the Distributor) is the dealer of record to such
Authorized Dealers to compensate such organizations for providing services to
shareholders relating to their investment in such Class, including any or all of
the following activities: 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. The Distributor may retain any Service Fees not so
paid. Payments of Service Fees to any organization as of any quarter-end will
not exceed .25% per year based on average net assets of accounts for which such
organization appeared on the records of the Fund and/or its transfer agent as
the organization of record during the preceding quarter.
2. This Plan shall not take effect until the Plan, together with any related
agreement(s), has been approved by votes of a majority of both (a) the Board of
Trustees of the Fund, and (b) those Trustees of the Fund who are not "interested
persons" of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan or any agreements related to it
(the "Rule 12b-1 Trustees") cast in person at a meeting (or meetings) called for
the purpose of voting on the Plan and such related Agreement(s).
2
<PAGE>
3. This Plan shall remain in effect until August 1, 1995, and shall continue in
effect thereafter so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph 2.
4. The Distributor shall provide to the Board of Trustees of the Fund and the
Board shall review, at least quarterly, a written report of distribution- and
service-related activities, Distribution Fees, Service Fees, and the purposes
for which such activities were performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Trustees or by vote of a majority (as defined in the Act) of the
outstanding voting Shares of the Fund.
6. This Plan may not be amended to increase materially the amount of
compensation payable by the Fund with respect to Class A or Class C Shares under
paragraph 1 hereof unless such amendment is approved by a vote of at least a
majority (as defined in the Act) of the outstanding voting Shares of that Class
of Shares. No material amendment to the Plan shall be made unless approved in
the manner provided in paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the Trustees
who are not interested persons (as defined in the Act) of the Fund shall be
committed to the discretion of the Trustees who are not such interested persons.
8. The Fund shall preserve copies of this Plan and any related agreements and
all reports made pursuant to paragraph 4 hereof, for a period of not less than
six years from the date of the Plan, any such agreement or any such report, as
the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund and Distributor have executed this Plan of
Distribution and Servicing as of the day and year first above written.
NUVEEN MUNICIPAL BOND FUND
By:
-----------------------------
Its Vice President
JOHN NUVEEN & CO. INCORPORATED
By:
-----------------------------
Its Vice President
<PAGE>
EXHIBIT 16
SCHEDULE OF COMPUTATION OF PERFORMANCE FIGURES
I. YIELD
A. Yield Formula Yield is computed according the following formula:
A - B /6/
Yield = 2[ ( ----- +1 ) -1]
CD
Where:
A = dividends and interest* earned during the period.
B = expenses accrued for the period (net of reimburse-
ments).
C = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
D = the maximum offering price per share on the last day
of the period.
B. Yield
Calculation The following is the 30-day yield as of February 28, 1995
for the Fund:
[$13,724,445 - $1,330,846] /6/
Yield = 2[ ( -------------------------- +1 ) -1]
[$304,667,852 X $9.45]
= 5.22%
--------
*Interest earned on tax-exempt obligations is determined
as follows:
A. In the case of a tax-exempt obligation (1) with a cur-
rent market premium or (2) issued at a discount where the
current market discount is less than the then-remaining
portions of the original issue discount, it is necessary
to first compute the yield to maturity (YTM). The YTM is
then divided by 360 and the quotient is multiplied by the
market value of the obligation (plus accrued interest).
B. In the case of a tax-exempt obligation issued at a dis-
count where the current market discount is in excess of
the then-remaining portion of the original issue discount,
the adjusted original issue discount basis of the obliga-
tion (plus accrued interest) is used in lieu of the market
value of the obligation (plus accrued interest) in comput-
ing the yield to maturity (YTM). The YTM is then divided
by 360 and the quotient is multiplied by the adjusted
original issue basis of the obligation (plus accrued in-
terest).
C. In the case of a tax-exempt obligation issued without
original issue discount and having a current market dis-
count, the coupon rate of interest is used in lieu of the
yield to maturity. The coupon rate is then divided by 360
and the quotient is multiplied by the par value of the ob-
ligation.
<PAGE>
II. TAXABLE
EQUIVALENT YIELD
A. Taxable The Taxable Equivalent Yield Formula is as follows:
Equivalent
Yield Formula
Tax Exempt Yield
Taxable Equivalent Yield = ------------------------------
(1 - Federal income tax yield)
B. Taxable
Equivalent Based on a 1995 maximum federal income tax rate of 39.6%,
Yield the Taxable Equivalent Yield for the Fund for the 30-day
Calculation period ended February 28, 1995 is as follows:
5.22%
-------- = 8.64%
1 - .396
III. DISTRIBUTION
RATE
A. Distribution The formula for calculation of distribution rate is as
Rate Formula follows:
Distribution Rate = 12 X most recent tax-exempt income
dividend per share
-------------------------------------------------------
share price
B. Distribution
Rate The following is the distribution rate as of February 28,
Calculation 1995, based on maximum public offering price for the Fund:
12 X $.0430
Distribution Rate = ----------- = 5.46%
$9.45
IV. AVERAGE
ANNUAL TOTAL
RETURN
A. Average Annual Average Annual Total Return is computed according to the
Total Return following formula:
Formula
ERV 1/N
T = --- -1
P
Where:
T = average annual total return.
P = a hypothetical initial payment of $1,000.
N = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10-year
(or fractional portion thereof) periods at the end
of such 1, 5 or 10-year (or fractional portion
thereof) periods.
2
<PAGE>
B. Calculations
The following are the average annual total returns for the
1-year, 5-year and 10-year periods ended February 28,
1995:
$986.80 1/1
A. 1 year ended February 28, 1995 = (-------) - 1 = (1.32)%
$1000
$1368.60 1/5
B. 5 years ended February 28, 1995 = (--------) - 1 = 6.48%
$1000
$2390.20 1/10
C. 10 years ended February 28, 1995 = (--------) - 1 = 9.10%
$1000
V. CUMULATIVE
TOTAL RETURN
A. Cumulative Cumulative Total Return is computed according to the fol-
Total Return lowing formula:
Formula
ERV - P
T = -------
P
Where:
T = cumulative total return.
P = a hypothetical initial payment of $1,000.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the inception of the Fund or at the
first day of a specified 1-year, 5-year or 10-year
period.
B. Cumulative
Total Return The following are the cumulative total returns for the
Calculation Fund for the 1-year, 5-year and 10-year periods ending
February 28, 1995:
$986.80 - $1000
1 year ended February 28, 1995 = ( --------------- ) = (1.32)%
$1000 =======
$1368.60 - $1000
5 years ended February 28, 1995 = ( ---------------- ) = 36.86%
$1000 =======
$2390.20 - $1000
10 years ended February 28, 1995 = ( ---------------- ) = 139.02%
$1000 =======
VI. TAXABLE
EQUIVALENT
TOTAL RETURN
A. Taxable The Fund's taxable equivalent total return for a specific
Equivalent period is calculated by first taking a hypothetical ini-
Total Return tial investment in the Fund's shares on the first day of
Formula the period, computing the Fund's total return for each
3
<PAGE>
calendar year in the period according to the above formu-
la, and increasing the total return for each such calendar
year by the amount of additional income that a taxable
fund would need to have generated to equal the income of
the Fund on an after-tax basis, at a specified tax rate
(usually the highest marginal federal tax rate), calcu-
lated pursuant to the formula presented above under "tax-
able equivalent yield." The resulting amount for the cal-
endar year is then divided by the initial investment
amount to arrive at a "taxable equivalent total return
factor" for the calendar year. The taxable equivalent to-
tal return factors for all the calendar years in the pe-
riod are then multiplied together and the result is then
annualized by taking its Nth root (N representing the num-
ber of years in the period) and subtracting 1, which pro-
vides a taxable equivalent total return expressed as a
percentage.
B. Taxable The taxable equivalent total return calculations for the
Equivalent Fund for the one year and five year periods ending Febru-
Total Return ary 28, 1994 are set forth on the following pages. One set
Calculations of calculations presents the Fund's taxable equivalent to-
tal return with the maximum 4.75% sales charge and the
other set of calculations presents the taxable equivalent
total return at the Fund's net asset value. Each set of
calculations assumes a 39.6% federal income tax rate based
on 1994 rates.
VII. MEASUREMENT OF RISK
The annualized standard deviation of monthly returns for Class R Shares of the
Fund over the two years ended February 28, 1995, was calculated as follows:
annualized --------------------------------------------------------
standard / [S((Total return in month X) - (Average monthly total
deviation (s) = \/ return))/2/] /1/
------------------------------------------------------
number of months (24)
For the Fund, the calculation was as follows:
----------------
/
s = \/ 0.405%/24
----------------
/
s = \/ 0.0169%
s = 1.30%
4
<PAGE>
VIII. RISK-ADJUSTED TOTAL RETURN
The risk-adjusted total return for the Class R Shares of the Fund over the two
years ended February 28, 1995, was calculated as follows:
Annualized total return of Fund - annualized total return of
Ponder Varifact
Risk-Adjusted Municipal Variable Rate Demand Bond Index
Total Return = -------------------------------------------------------------
Annualized standard deviation of return (s)
3.80% - 2.80%
= ------------
0.0130
1.00%
= -----
0.013
= .77
5
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Form N-
SAR and the Financial Statements and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 2,624,764
<INVESTMENTS-AT-VALUE> 2,707,485
<RECEIVABLES> 45,813
<ASSETS-OTHER> 701
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,753,999
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,821
<TOTAL-LIABILITIES> 12,821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,654,350
<SHARES-COMMON-STOCK> 304,573
<SHARES-COMMON-PRIOR> 290,985
<ACCUMULATED-NII-CURRENT> 2,134
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,974
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 82,720
<NET-ASSETS> 2,741,178
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 167,930
<OTHER-INCOME> 0
<EXPENSES-NET> 15,469
<NET-INVESTMENT-INCOME> 152,461
<REALIZED-GAINS-CURRENT> 9,508
<APPREC-INCREASE-CURRENT> (67,140)
<NET-CHANGE-FROM-OPS> 94,829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 151,297
<DISTRIBUTIONS-OF-GAINS> 22,412
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,970
<NUMBER-OF-SHARES-REDEEMED> 55,356
<SHARES-REINVESTED> 15,974
<NET-CHANGE-IN-ASSETS> 41,171
<ACCUMULATED-NII-PRIOR> 970
<ACCUMULATED-GAINS-PRIOR> 14,887
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 11,932
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,469
<AVERAGE-NET-ASSETS> 2,634,441
<PER-SHARE-NAV-BEGIN> 9.280
<PER-SHARE-NII> .515
<PER-SHARE-GAIN-APPREC> (.209)
<PER-SHARE-DIVIDEND> (.511)
<PER-SHARE-DISTRIBUTIONS> (.075)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.000
<EXPENSE-RATIO> .59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 99(a)
NUVEEN MUNICIPAL BOND FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of l933 and the Investment Company Act of
l940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 11th day of April, 1995.
/s/ Richard J. Franke
----------------------------------
Richard J. Franke
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 11th day of April, 1995, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.
(SEAL) (Sig. of Karen L. Healy)
----------------------------------
"OFFICIAL SEAL" Notary Public
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
My Commission Expires: 12/30/95
<PAGE>
NUVEEN MUNICIPAL BOND FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of l933 and the Investment Company Act of
l940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 11th day of April, 1995.
/s/ Lawrence H. Brown
----------------------------------
Lawrence H. Brown
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 11th day of April, 1995, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.
(SEAL) (Sig. of Karen L. Healy)
----------------------------------
"OFFICIAL SEAL" Notary Public
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
My Commission Expires: 12/30/95
<PAGE>
NUVEEN MUNICIPAL BOND FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) her true and lawful attorney-in-fact and agent, for him on
her behalf and in her name, place and stead, in any and all capacities, to sign,
execute and affix her seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of l933 and the Investment Company Act of
l940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 11th day of April, 1995.
/s/ Anne E. Impellizzeri
----------------------------------
Anne E. Impellizzeri
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 11th day of April, 1995, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.
(SEAL) (Sig. of Karen L. Healy)
----------------------------------
"OFFICIAL SEAL" Notary Public
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
My Commission Expires: 12/30/95
<PAGE>
NUVEEN MUNICIPAL BOND FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) her true and lawful attorney-in-fact and agent, for him on
her behalf and in her name, place and stead, in any and all capacities, to sign,
execute and affix her seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of l933 and the Investment Company Act of
l940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 11th day of April, 1995.
/s/ Margaret K. Rosenheim
----------------------------------
Margaret K. Rosenheim
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 11th day of April, 1995, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.
(SEAL) (Sig. of Karen L. Healy)
----------------------------------
"OFFICIAL SEAL" Notary Public
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
My Commission Expires: 12/30/95
<PAGE>
NUVEEN MUNICIPAL BOND FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of l933 and the Investment Company Act of
l940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 11th day of April, 1995.
/s/ Peter R. Sawers
----------------------------------
Peter R. Sawers
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 11th day of April, 1995, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.
(SEAL) (Sig. of Karen L. Healy)
----------------------------------
"OFFICIAL SEAL" Notary Public
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
My Commission Expires: 12/30/95
<PAGE>
NUVEEN MUNICIPAL BOND FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of l933 and the Investment Company Act of
l940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization
has hereunto set his hand this 11th day of April, 1995.
/s/ Timothy R. Schwertfeger
----------------------------------
Timothy R. Schwertfeger
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 11th day of April, 1995, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.
(SEAL) (Sig. of Karen L. Healy)
----------------------------------
"OFFICIAL SEAL" Notary Public
Karen L. Healy
Notary Public, State of Illinois
My Commission Expires 12/30/95
My Commission Expires: 12/30/95
<PAGE>
EXHIBIT 99(b)
NUVEEN TAX-EXEMPT UNIT TRUSTS
NUVEEN TAX-EXEMPT MUTUAL FUNDS
NUVEEN MUNICIPAL EXCHANGE-TRADED FUNDS
NUVEEN ADVISORY CORP.
NUVEEN INSTITUTIONAL ADVISORY CORP.
JOHN NUVEEN & CO. INCORPORATED
THE JOHN NUVEEN COMPANY
-------------------------
Standards and Procedures
Regarding
Conflicts of Interest
-------------------------
Code of Ethics
And
Reporting Requirements
The Securities and Exchange Commission, in Investment Company Act Release No.
11421, has adopted Rule 17j-1 "to provide guidance to investment companies as to
the minimum standards of conduct appropriate for persons who have access to
information regarding the purchase and sale of portfolio securities by
investment companies." The Rule requires registered investment companies, their
investment advisers and their principal underwriters to adopt codes of ethics
and reporting requirements to guard against violations of the standards set
forth in the Rule and the principles provided below and to establish guidelines
for the conduct of persons who (1) may obtain information concerning securities
held by or considered for purchase or sale by any series of the Nuveen Tax-
Exempt Unit Trusts (the "Trusts") or by any of the registered management
investment companies (the "Funds") or non-management investment company clients
("Clients") to which Nuveen Advisory Corp. or Nuveen Institutional Advisory
Corp. act as investment advisers or (2) who may make any recommendation or
participate in the determination of which recommendation shall be made
concerning the purchase or sale of any securities by a Trust, Fund or Client.
This Code of Ethics (the "Code") consists of six sections -- 1. Statement of
General Principles; 2. Definitions; 3. Exempted Transactions; 4. Prohibitions;
5. Reporting Requirements; and 6. Sanctions.
1. Statement of General Principles
-------------------------------
The Code is based upon the principle that the officers, directors and
employees of a Fund, Nuveen Advisory Corp., Nuveen Institutional Advisory
Corp., John Nuveen & Co. Incorporated and The John Nuveen Company owe a
fiduciary duty to, among others, the unitholders and shareholders of the
Trusts and Funds and the Clients, to conduct their personal securities
transactions in a manner which does not interfere with Trust, Fund or
Client portfolio transactions or otherwise take unfair advantage of their
relationship to the Trusts, Funds or Clients. In accordance with this
general principle, persons covered by the Code must (1) place the interests
of unitholders and shareholders of the Trusts and Funds and the Clients
first; (2)
<PAGE>
2
execute personal securities transactions in compliance with the Code; (3)
avoid any actual or potential conflict of interest and any abuse of their
positions of trust and responsibility; and (4) not take inappropriate
advantage of their positions. It bears emphasis that technical compliance
with the Code's procedures will not automatically insulate from scrutiny
trades which show a pattern of abuse of the individual's fiduciary duties to
the Trust, Fund or Client.
II. Definitions
-----------
As used herein:
(1) "Access person" shall mean any director, officer or advisory person of
any Fund or of Nuveen Advisory Corp. or Nuveen Institutional Advisory
Corp.
A list of persons deemed to be access persons is attached as Exhibit A.
(2) "Advisory person" shall mean:
(a) Any employee of a Fund, of Nuveen Advisory Corp., of Nuveen
Institutional Advisory Corp. or of John Nuveen & Co. Incorporated
who, in connection with his or her regular functions or duties,
makes, participates in, or obtains information regarding the
purchase or sale of securities by a Trust, Fund or Client or whose
functions relate to the making of any recommendations with respect
to such purchases or sales; and
(b) Any director or officer of John Nuveen & Co. Incorporated or The
John Nuveen Company who in the ordinary course of business makes,
participates in or obtains information regarding the purchase or
sale of securities for a Trust, Fund or Client or recommendations
made with regard to the purchase or sale of a security by a Trust,
Fund or Client, or whose functions or duties relate to the making of
any recommendation to a Trust, Fund or Client regarding the purchase
or sale of securities.
(3) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the recommendation,
when such person considers making such recommendation.
<PAGE>
3
(4) A person will be deemed to be the "beneficial owner" of securities:
(a) held in his or her own name or the name of his or her spouse and
their minor children;
(b) held in a trust
(i) of which such person is trustee and the trustee or members
of his or her immediate family have a vested interest in
the income of the trust,
(ii) in which such person has a vested beneficial interest, or
(iii) of which such person is settlor and which the settlor has
the power to revoke without consent of the beneficiaries;
a person will not be deemed to be the beneficial owner of
securities held in the portfolio of a registered
investment company solely by reason of his or her
ownership of shares or units of such registered investment
company;
(c) held in any other name if by reason of any contract,
understanding, relationship, agreement or other arrangement such
person obtains benefits substantially equivalent to those of
ownership (e.g. the right to income from and the right to
exercise a controlling influence over the purchase or sale of
such securities) or would otherwise be deemed to beneficially own
such security for purposes of determining whether such person
would be subject to the provisions of Section 16 of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder, except that the determination of direct or indirect
beneficial ownership shall apply to all securities which an
access person has or acquires.
A person will not be deemed to be the beneficial owner of
securities held in the portfolio of a registered investment
company solely by reason of his or her ownership of shares or
units of such registered investment company.
(5) "Security" shall mean any stock, bond, debenture, evidence of
indebtedness or in general any other instrument defined to be a
security in Section 2(a)(36) of the Investment Company Act of 1940
except that it shall not include securities issued by the Government
of the United States, short term debt securities which are "government
securities" within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, bankers' acceptances, bank certificates of
deposit, commercial paper and shares of registered open-end investment
companies.
<PAGE>
4
(6) "Purchase or sale of a security" shall include any transaction in
which a beneficial interest in a security is acquired or disposed of,
including but not limited to the writing of an option to purchase or
sell a security.
(7) "Control" shall have the same meaning as set forth in Section 2(a) (9)
of the Investment Company Act of 1940.
(8) "Investment personnel" shall mean any employee of a Fund, Nuveen
Advisory Corp. or Nuveen Institutional Advisory Corp. who acts as a
portfolio manager or as an analyst or trader who provides information
or advice to the portfolio manager or who helps execute the portfolio
manager's decisions. A list of investment personnel is attached as
Exhibit B.
(9) "Portfolio manager" shall mean any employee of a Fund, Nuveen Advisory
Corp. or Nuveen Institutional Advisory Corp. who is entrusted with the
direct responsibility and authority to make investment decisions
affecting a Trust, Fund or Client. A list of portfolio managers is
attached as Exhibit C.
III. Exempted Transactions
---------------------
The prohibitions of Section IV of this Code shall not apply to:
(1) Purchases or sales affecting any account over which the party involved
has no direct or indirect influence or control;
(2) Purchases or sales of securities which are not:
(a) acquired in a private placement;
(b) shares of The John Nuveen Company;
(c) municipal securities; or
(d) shares of Nuveen-sponsored exchange-traded funds.
(3) Purchases or sales which are non-volitional on the part of either
the party involved or a Trust, Fund or Client;
(4) Purchases which are part of an automatic dividend reinvestment plan.
<PAGE>
5
(5) Purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent
such rights were acquired from such issuer, and sales of such rights so
acquired.
IV. Prohibitions
------------
(1) Unless such transaction is exempted above or is previously cleared in
the manner described in paragraph (9) below, no access person shall
purchase or sell the following securities for his or her own account
or for any account in which he or she has any beneficial ownership:
(a) securities offered in a private placement;
(b) shares of The John Nuveen Company;
(c) municipal securities; or
(d) shares of a Nuveen-sponsored exchange-traded fund.
The purchase of securities identified in paragraph (1)(a) by
investment personnel must also comply with paragraph (4) below.
(2) No access person shall execute a securities transaction on a day
during which a Trust, Fund or Client has a pending "buy" or "sell"
order in that same security until that order is executed or withdrawn.
Trades made in violation of this prohibition should be unwound or, if
that is impractical, any profits realized must be disgorged to a
charitable organization.
(3) Investment personnel shall not purchase any securities in an initial
public offering except an offering of securities issued by municipal
or United States government entities.
(4) Unless such transaction is previously approved in the manner described
in paragraph (10) below and the criteria set forth in that paragraph
are followed, investment personnel shall not purchase any security in
a private placement.
(5) Investment personnel shall not profit in the purchase and sale, or
sale and purchase, of the same (or equivalent) security within 60
calendar days if such security is a municipal security or shares
issued by a Nuveen-sponsored exchange-traded fund. Trades made in
violation of this prohibition should be unwound or, if that is
impractical, any profits realized must be disgorged to a charitable
organization.
<PAGE>
6
(6) Investment personnel shall not accept any gift or other thing of more
than de minimis value from any person or entity that does business
with or on behalf of a Trust, Fund or Client. For purposes of this
prohibition the term "de minimis value" shall have the same meaning
expressed in the National Association of Securities Dealers, Inc.
Rules of Fair Practice.
(7) Unless such service is previously cleared in the manner described in
paragraph (11) below and the criteria set forth in that paragraph are
followed, investment personnel shall not serve as board members or
other decision-makers for entities that issue municipal securities.
(8) No portfolio manager of a Trust, Fund or Client shall purchase or sell
any security within seven calendar days before or after the Fund or
Client he surveys or manages trades or considers to purchase or sell
such security. Trades made in violation of this prohibition should be
unwound or, if that is impractical, any profits realized must be
disgorged to a charitable organization.
(9) An access person may request clearance of a transaction otherwise
prohibited by paragraph (1) above prior to the placement of any order
in connection therewith by submitting a written request for clearance
to the Chairman or President of John Nuveen & Co. Incorporated or his
designee, with a copy to the Legal Department. Such request shall
state the title and principal amount of the security proposed to be
purchased or sold, the nature of the transaction, the price at which
the transaction is proposed to be effected, and the name of the
broker, dealer or bank with or through whom the transaction is
proposed to be effected. No such transaction may be effected without
the prior clearance of the transaction and the price by the Chairman
or President or his designee. Employee transaction tickets must bear
initials showing such clearance before processing. Preclearance shall
be valid for three days. Transactions may be cleared by the Chairman
or President or his designee only if such officer determines that
the potential harm to any Trust, Fund or Client is highly remote or
non-existent because such transaction would be very unlikely to affect
a highly institutional market, or because it clearly is not related
economically to the securities to be purchased, sold or held by any
Trust, Fund or Client.
(10) Investment personnel may request approval of a transaction otherwise
prohibited by paragraph (4) above prior to the placement of any
order in connection therewith by submitting a written request for
approval to the Chairman or President of John Nuveen & Co.
Incorporated or his designee, with a copy to the Legal Department.
Such request shall state the title and principal amount of the
security proposed to be purchased or sold, the nature of the
transaction, the price at which the transaction is proposed to be
effected, and the name of the broker, dealer or bank with or through
<PAGE>
7
whom the transaction is proposed to be effected. No such transaction
may be effected without the prior approval of the transaction and the
price by the Chairman or President or his designee. Employee
transaction tickets must bear initials showing such approval before
processing. Any approval shall be valid for three days. Transactions
may be approved by the Chairman or President or his designee only if
such officer takes into account, among other factors, whether the
investment opportunity should be reserved for a Trust, Fund or Client
and any shareholders or unitholders affected, and whether the
opportunity is being offered to an individual by virtue of his or her
position. In addition, Investment personnel who receive authorization
to purchase securities in a private placement have an affirmative duty
to disclose that position to the Chairman or President or his designee
if he or she plays a role in a Trust's, Fund's or Client's subsequent
investment decision regarding the same issuer. Once such disclosure is
made, the Chairman or President or his designee shall assemble a
commission of investment personnel with no personal interest in the
issuer involved to independently review the Trust's, Fund's or
Client's investment decision.
(11) Investment personnel may request clearance of service otherwise
prohibited by paragraph (7) above, prior to acceptance of any such
position, by submitting a written request for clearance to the
Chairman or President of John Nuveen & Co. Incorporated or his
designee, with a copy to the Legal Department. Such request shall
state the position sought, the reason service is desired and any
possible conflicts of interest known at the time of the request. No
such position may be accepted without the prior clearance by the
Chairman or President or his designee. Service may be cleared by the
Chairman or President or his designee only if such officer determines
that service in that capacity would be consistent with the interests
of the Trusts, Funds or Clients and any shareholders or unitholders
affected. In addition, Investment personnel who receive authorization
to serve in such a capacity must be isolated through "Chinese Wall"
procedures from those making investment decisions regarding securities
issued by the entity involved.
V. Reporting Requirements
----------------------
(1) Every access person (other than directors of a Fund who are not
"interested persons" of such Fund) shall report to the Legal
Department of John Nuveen & Co. Incorporated details of each
transaction by reason of which he or she acquires any direct or
indirect beneficial ownership of any security. Notwithstanding the
foregoing, an access person need not make a report pursuant hereto
where such report would duplicate information recorded pursuant to
Rules 204-2(a)(12) or 204-2(a)(13) under the Investment Advisers Act
of 1940. In addition to the reporting requirement expressed above,
every access person (including directors who are not "interested
<PAGE>
8
persons") shall direct his or her broker or brokers to supply to the
Legal Department, on a timely basis, duplicate copies of confirmations
of all securities transactions and copies of periodic statements for
all securities accounts involving securities in which such access
person acquires or foregoes direct or indirect beneficial ownership.
(2) Every director of a Fund who is not an "interested person" of such
Fund shall be required to report the details of each transaction with
respect to which such director knew or, in the ordinary course of
fulfilling his or her official duties as a director of the Fund,
should have known that during the 15 day period immediately preceding
or after the date of the transaction in a security by the director
such security is or was purchased or sold by the Fund or such purchase
or sale by the Fund is or was considered by the Fund or its investment
adviser.
(3) Every report required to be made pursuant to paragraphs 1 and 2 of
this Section (other than duplicate copies of confirmations and
periodic statements) shall be made not later than 10 days after the
end of the calendar quarter in which the transaction to which the
report relates was effected, and shall contain the following
information:
(a) the date of the transaction, the title and the number of shares,
or principal amount of each security involved;
(b) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(c) the price at which the transaction was effected; and
(d) the name of the broker, dealer or bank with or through whom the
transaction was effected.
Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he
or she has any direct or indirect beneficial ownership in the security
to which the report relates.
(4) The reporting requirements established pursuant to paragraphs 1 and 2
of this Section (other than duplicate copies of confirmations and
periodic statements) shall apply only to transactions by an access
person in securities in which such access person has, or by reason of
such transaction acquires, any direct or indirect beneficial ownership
in the security.
(5) Investment personnel shall disclose to the General Counsel of John
Nuveen & Co. Incorporated all personal securities holdings within 10
days of commencement of employment as an investment person and shall
continue to disclose such holdings on an annual basis.
<PAGE>
9
VI. Sanctions
---------
Upon discovery of a violation of this Code, any Fund, Nuveen
Advisory Corp., Nuveen Institutional Advisory Corp., John
Nuveen & Co. Incorporated or The John Nuveen Company may impose
such sanctions as it deems appropriate, including, inter alia,
a letter of censure or suspension or termination of the
employment of the violator. All material violations of this
Code and any sanctions imposed with respect thereto shall be
reported periodically to the board of directors of the
management investment company with respect to securities of
which the violation occurred, or to the Executive Committee of
John Nuveen & Co. Incorporated if the violation was with
respect to securities of any series of the Nuveen Tax-Exempt
Unit Trusts, or to the board of directors of Nuveen
Institutional Advisory Corp. or Nuveen Advisory Corp. with
respect to securities of non-management investment company
clients advised by these entities.
Revised October 1994
