<PAGE>
As filed with the Securities and Exchange Commission on April 22, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[_]
File No. 2-70520
Pre-Effective Amendment No. [_]
--
[X]^
Post-Effective Amendment No. 19
--
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[_]
File No. 811-3134
[X]^
Amendment No. 19
--
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive, Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (312) 917-7700
Gifford R. Zimmerman, Esq.-Vice President and Assistant Secretary
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)
on (date) pursuant to paragraph
[_] [_] (a)(1)
on April 28, 1998 pursuant to paragraph (b)
[X] 75 days after filing pursuant to par-
[_] agraph (a)(2)
60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph
[_] (a)(2) of Rule 485.
If appropriate, check the following box:
[_]This post-effective amendment designates a new effective date for a previ-
ously filed post-effective amendment.
PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT HAS
ELECTED TO REGISTER AN INDEFINITE NUMBER OF SHARES. REGISTRANT INTENDS TO FILE
A RULE 24F-2 NOTICE FOR ITS FISCAL YEAR ENDED FEBRUARY 28, 1998, ON OR ABOUT
MAY 29, 1998.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
CONTENTS
OF
POST-EFFECTIVE AMENDMENT NO. 19
TO
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FILE NO. 2-70520
AND
AMENDMENT NO. 19
TO
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
FILE NO. 811-3134
This Registration Statement comprises the following papers and contents:
The Facing Sheet
Cross-Reference Sheet
Part A--The Prospectus (including the Annual Report to
Shareholders)
Part B--The Statement of Additional Information
Part C--Other Information
Signatures
Index to Exhibits
Exhibits
<PAGE>
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
-----------------
CROSS REFERENCE SHEET
PART A--PROSPECTUS
<TABLE>
<CAPTION>
ITEM IN PART A
OF FORM
N-1A PROSPECTUS LOCATION
- -------------- -------------------
<S> <C>
1..................... Cover Page
2(a).................. Fund Expenses
(b).................. Highlights
(c).................. Highlights
3(a).................. Financial Highlights
(b).................. Not applicable
(c).................. Yield
(d).................. Not applicable
4(a).................. General Information; The Fund and Its Investment
Objective; Investment Policies
(b).................. Investment Policies
(c).................. Investment Policies
5(a).................. Management of the Fund
(b).................. Management of the Fund
(c).................. Not applicable
(d).................. General Information--Custodian, Shareholder Services Agent
and Transfer Agent; Management of the Fund
(e).................. General Information--Custodian, Shareholder Services Agent
and Transfer Agent
(f).................. Not applicable
(g).................. Not applicable
5A.................... Not applicable
6(a).................. General Information--Capital Stock
(b).................. Not applicable
(c).................. Not applicable
(d).................. Not applicable
(e).................. General Information--Investor Inquiries
(f).................. Dividends
(g).................. Taxes
(h).................. Not applicable
7(a).................. Management of the Fund
(b).................. Net Asset Value; How to Buy Fund Shares
(c).................. Not applicable
(d).................. How to Buy Fund Shares
(e).................. Not applicable
(f).................. Not applicable
8(a).................. How to Redeem Fund Shares
(b).................. How to Redeem Fund Shares
(c).................. How to Redeem Fund Shares
(d).................. How to Redeem Fund Shares
9..................... Not applicable
</TABLE>
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
ITEM IN PART B
OF FORM LOCATION IN STATEMENT
N-1A OF ADDITIONAL INFORMATION
- -------------- -------------------------
<S> <C>
10..................... Cover Page
11..................... Cover Page
12..................... Not applicable
13..................... Fundamental Policies and Investment Portfolio
14(a).................. Management
(b).................. Management
(c).................. Not applicable
15(a).................. Not applicable
(b).................. Management
(c).................. Management
16(a).................. Investment Adviser and Investment Management
Agreement; Management
(b).................. Investment Adviser and Investment Management Agreement; see
also "Management of the Fund" in the Prospectus
(c).................. Not applicable
(d).................. Not applicable
(e).................. Not applicable
(f).................. Not applicable
(g).................. Not applicable
(h).................. Independent Public Accountants and Custodian
(i).................. Not applicable
17(a).................. Portfolio Transactions
(b).................. Not applicable
(c).................. Portfolio Transactions
(d).................. Not applicable
(e).................. Not applicable
18(a).................. See "General Information--Capital Stock" and "How to Redeem
Fund Shares" in the Prospectus
(b).................. Not applicable
19(a).................. See "How to Buy Fund Shares" in the Prospectus
(b).................. Net Asset Value; Amortized Cost Valuation; Financial
Statements--Statement of Net Assets; see also "Net
Asset Value" in the Prospectus
(c).................. See "How to Redeem Fund Shares--Redemption in Kind"
in the Prospectus
20..................... Tax Matters
21(a).................. See "How to Buy Fund Shares" in the Prospectus; Principal
Underwriter and Distributor
(b).................. Not applicable
(c).................. Not applicable
22(a).................. Yield Information
(b).................. Not applicable
23..................... See Prospectus; Portfolio of Investments; Statement of Net
Assets; Statement of Operations; Statement of Changes in Net
Assets; Report of Independent Public Accountants
</TABLE>
<PAGE>
PART A--PROSPECTUS
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
NUVEEN
Money Market
Funds
Prospectus/Annual Report
Dependable, tax-free income
to help you keep more of
what you earn.
[PHOTO APPEARS HERE]
Tax-Exempt
<PAGE>
Contents
1 Dear Shareholder
3 Prospectus
5 Fund Expenses
5 Highlights
7 Financial Highlights
8 Yield
8 The Fund and its Investment Objective
8 Investment Policies
13 Management of the Fund
14 Net Asset Value
14 Dividends
15 Suitability
15 How to Buy Fund Shares
16 Other Shareholder Programs
17 How to Redeem Fund Shares
19 Taxes
21 General Information
22 Annual Report Financial Section
23 Portfolio of Investments
28 Statement of Net Assets
29 Statement of Operations
30 Statement of Changes in Net Assets
31 Notes to Financial Statements
33 Financial Highlights
34 Report of Independent
Public Accountants
36 Building Better Portfolios
37 Fund Information
<PAGE>
[Photo of Timothy R. Schwertfeger appears here]
Timothy R. Schwertfeger
Chairman of the Board
Wealth takes
a lifetime
to build.
Once achieved,
it should be
preserved.
Dear Shareholder
It is a pleasure to report to you on the performance of the Nuveen Tax-Exempt
Money Market Fund, Inc. for the year ended February 28, 1998, and to send you an
updated prospectus. Inside this report you will find the fund's financial
information, including the portfolio of investments, statement of net assets and
financial highlights, located after the prospectus.
During the 12-month period the fund continued to achieve its goal of delivering
attractive tax-free income from a portfolio of quality short-term municipal
securities. As of the end of February, investors were receiving an annual tax-
free yield of 3.11%, equivalent to a taxable yield of 4.51% for investors in the
31% federal income tax bracket.
MARKET REVIEW
Over the past two years, many financial markets have been unusually strong.
Short-term rates trended higher early in 1997 on expectations that the Federal
Reserve Board would take steps to tighten monetary policy and slow the pace of
economic growth. In March, the Fed raised its target rate for the federal funds
rate by 25 basis points, but then took no further action. Short-term securities
reversed course and yields trended downward for the remainder of the fund's
fiscal year. Still, falling commodity prices kept producer prices in check,
while low import prices - due in part to the weakness in Asian markets - limited
U.S. companies' ability to raise consumer prices. This combination has kept
inflation subdued and the Federal Reserve "on hold."
PORTFOLIO ADJUSTMENTS
During the third quarter of 1997, many short-term buyers seemed reluctant to
extend their average maturities, expecting the Federal Reserve to raise rates.
We were able to take advantage of this temporary demand shortage dur-
- ------
1
<PAGE>
"It's still uncer-
tain whether the
Fed will deem
it necessary to
raise short-term
rates, and if
they hold the
line, money
market rates
should remain
relatively stable
in 1998."
ing the quarter's large new issue period and the fund was able to buy tax-exempt
notes at historically cheap levels. As a result, the fund's average maturity
during the third quarter of 1997 increased somewhat.
Beginning in the fourth quarter of 1997, many Asian countries experienced
economic problems and severe currency devaluations. We continue to watch the
Asian situation - and Japanese banks in particular - for any additional credit
erosions and possible rating changes. During this time, the Nuveen Money Market
Funds, working with Nuveen Research, continued to closely monitor those issues
in the portfolios that were additionally secured by letters of credit from
Japanese banks. As a result, while many other money market funds were
eliminating all Japanese-bank let-ters of credit, the fund maintained its
current positions based on our credit analysis.
SHORT-TERM OUTLOOK
Looking forward, it's likely that upward pressure on wages may ultimately push
inflation up a bit. It's still uncertain whether the Fed will deem it necessary
to raise short-term rates, and if they hold the line, money market rates should
remain relatively stable in 1998.
On behalf of everyone at Nuveen, I thank you for your continued confidence in us
and our family of investments.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
April 13, 1998
- ------
2
<PAGE>
Nuveen Tax-Exempt
Money Market Fund, Inc.
Prospectus
April 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc. (the "Fund") is an open-
end, diversified management investment company with the objective
of providing as high a level of current interest income exempt
from federal income taxes as is consistent, in the view of Fund
management, with stability of principal and maintenance of
liquidity through investment in a professionally managed portfolio
of high quality, short-term Municipal Obligations. The Fund will
value its portfolio securities at amortized cost and seek to
maintain a net asset value of $1.00 per share.
The Fund is designed as a convenient investment vehicle for
institutional investors with temporary cash balances such as trust
departments, trust companies, and banks acting as agent, adviser,
or custodian. It is equally appropriate for the investment of
short-term funds held or managed by corporations, insurance
companies, investment counselors, law firms, broker-dealers and
individuals.
This Prospectus, which should be retained for future reference,
sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. A "Statement
of Additional Information" dated April 28, 1998, containing
further information about the Fund, has been filed with the
Securities and Exchange Commission, is incorporated by reference
into this Prospectus, and may be obtained without charge from John
Nuveen & Co. Incorporated by calling (800) 858-4084.
An investment in the Fund is neither insured nor guaranteed by the
U.S. Government and there can be no assurance that the Fund will
be able to maintain a stable net asset value of $1.00 per share.
Shares of the Fund are not deposits or obligations of, or
guaranteed or endorsed by, any bank and are not federally insured
by the Federal Deposit Insurance Corporation, the Federal Reserve
Board or any other agency.
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) 858-4084
3
<PAGE>
Prospectus
----------
5 Fund Expenses
5 Highlights
7 Financial Highlights
8 Yield
8 The Fund and its Investment Objective
8 Investment Policies
13 Management of the Fund
14 Net Asset Value
14 Dividends
15 Suitability
15 How to Buy Fund Shares
16 Other Shareholder Programs
17 How to Redeem Fund Shares
19 Taxes
21 General Information
4
<PAGE>
Fund Expenses
The following tables illustrate all expenses and fees that a
shareholder of the Fund will incur. The expenses and fees shown
are for the fiscal year ended February 28, 1998.
Shareholder transaction expenses
------------------------------------------------------------------
Sales load imposed on purchases None
Sales load imposed on reinvested dividends None
Redemption fees None
Exchange fees None
------------------------------------------------------------------
Annual operating expenses (as a percentage of average daily net
assets)
------------------------------------------------------------------
Management fees .40%
12b-1 fees None
Other operating expenses .04%
Total expenses .44%
The purpose of the foregoing tables is to help the investor
understand all expenses and fees that an investor in the Fund will
bear directly or indirectly. As discussed under "Management of the
Fund," the management fee is reduced or Nuveen Advisory Corp.
("Nuveen Advisory") assumes certain expenses so as to prevent the
total expenses of the Fund in any fiscal year from exceeding .45
of 1% of the average daily net asset value of the Fund.
The following example illustrates the expenses that an investor
would pay on a $1,000 investment over various time periods
assuming (1) a 5% annual rate of return and (2) redemption at the
end of each time period. As noted in the table above, the Fund
charges no redemption fees of any kind.
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------
$5 $14 $25 $55
------------------------------------------------------------------
This example should not be considered a representation of past or
future expenses or performance. Actual expenses may be greater or
less than those shown. This example assumes that the percentage
amounts listed under Annual Operating Expenses remain the same in
each of the periods.
Highlights
Nuveen Tax-Exempt Money Market Fund, Inc. (the "Fund") is an open-
end, diversified management investment company with the objective
of providing, through investment in a professionally managed
portfolio of high quality short-term Municipal Obligations, as
high a level of current interest income exempt from federal income
tax as is consistent, in the view of the Fund's management, with
stability of principal and the maintenance of liquidity. The Fund
values its portfolio at amortized cost and seeks to maintain a net
asset value of $1.00 per share. There is no guarantee that this
value will be maintained. See "Net Asset Value" on page 14 and
"The Fund and Its Investment Objective" on page 8.
5
<PAGE>
The Fund intends to qualify, as it has in prior years, for tax
treatment as a regulated investment company and to satisfy
conditions that will enable interest income which is exempt from
federal income tax in the hands of the Fund to retain such tax-
exempt status when distributed to the shareholders of the Fund.
Dividends may not be exempt from state or local income taxes. See
"Taxes" on page 19.
How to Buy Fund Shares
Fund shares may be purchased on days on which the Federal Reserve
Bank of Boston is normally open for business ("business days") at
the net asset value next determined after an order is received
together with payment in federal funds. The minimum initial
investment is $25,000. Subsequent investments for the account of
the shareholder must be in amounts of $500 or more. See "How to
Buy Fund Shares" on page 15.
How to Redeem Fund Shares
Shareholders may redeem shares at net asset value next computed
after receipt of a redemption request in proper form on any
business day. There is no redemption fee. See "How to Redeem Fund
Shares" on page 17.
Dividends
The Fund declares dividends daily from its accumulated net income
and distributes the dividends monthly in the form of additional
shares or, at the option of the investor, in cash. See "Dividends"
on page 14.
Investment Adviser and Principal Underwriter
John Nuveen & Co. Incorporated ("Nuveen") acts as principal
underwriter of the Fund. Nuveen Advisory Corp. ("Nuveen
Advisory"), a wholly-owned subsidiary of Nuveen, acts as the
Fund's investment adviser and receives an annual fee of .4 of 1%
of the average daily net asset value of the Fund. The management
fee is reduced to .375 of 1%, .350 of 1% and .325 of 1% of the
average daily net asset value over $500,000,000, $1,000,000,000,
and $2,000,000,000, respectively. See "Management of the Fund" on
page 13.
Investments
The Fund invests primarily in municipal money market instruments.
The Fund may from time to time invest a portion of its assets in
debt obligations which are not rated, and variable rate or
floating rate obligations. Each of these investments and practices
involves certain risk factors. Investors are urged to read the
descriptions set forth in this Prospectus of these investments and
practices. See "Investment Policies" on page 8.
The information set forth above should be read in conjunction with
the detailed information set forth elsewhere in this Prospectus.
6
<PAGE>
Financial Highlights
The following financial information 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, and should be read in conjunction with the financial
statements and related notes, appearing at the back of this
Prospectus.
Selected data for a share outstanding throughout each period is as
follows:
<TABLE>
<CAPTION>
Operating performance Less distributions Ratios/Supplemental data
---------------------- ------------------------ --------------------------------------
Net
realized Ratio
Net and Dividends Net Total of net
asset unrealized from tax- asset return Ratio of investment
value Net gain (loss) exempt net Distributions value on net Net assets expenses income to
Year ended beginning investment from investment from capital end of asset end of period to average average
February 28/29, of period income investments income gains period value (a) (in thousands) net assets net assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $1.00 $.03 $ -- $(.03) $ -- $1.00 3.27% $ 473,502 .44% 3.26%
1997 1.00 .03 -- (.03) -- 1.00 3.11 515,403 .44 3.10
1996 1.00 .03 -- (.03) -- 1.00 3.42 610,053 .44 3.43
1995 1.00 .03 -- (.03) -- 1.00 2.69 759,244 .44 2.65
1994 1.00 .02 -- (.02) -- 1.00 2.04 975,833 .42 2.04
1993 1.00 .03 -- (.03) -- 1.00 2.57 1,597,014 .40 2.58
1992 (b) 1.00 .02 -- (.02) -- 1.00 1.56 2,332,021 .39* 3.71*
1991 (c) 1.00 .05 -- (.05) -- 1.00 4.85 1,927,583 .38 4.81
1990 (c) 1.00 .06 -- (.06) -- 1.00 5.75 1,800,966 .40 5.74
1989 (c) 1.00 .06 -- (.06) -- 1.00 6.00 1,756,725 .39 6.02
====================================================================================================================================
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value and are not
annualized.
(b) For the five months ended February 29.
(c) For the fiscal year ended September 30.
7
<PAGE>
Yield
From time to time the Fund may advertise its "yield," "effective
yield" and "taxable equivalent yield." The "yield" of the Fund is
based on the income generated by an investment in the Fund over a
seven day period. The income is then annualized, i.e. the amount
of the income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is
expressed as a percentage of the investment. "Effective yield" is
calculated similarly except that, when annualized, the income
earned by the investment is assumed to be reinvested. Due to this
compounding effect, the effective yield will be slightly higher
than the yield. "Taxable equivalent yield" is the yield that a
taxable investment would need to generate in order to equal the
Fund's yield on an after-tax basis for an investor in a stated tax
bracket (normally assumed to be the bracket with the highest
marginal tax rate). A taxable equivalent yield quotation will be
higher than the yield or the effective yield quotations.
Additional information concerning the Fund's performance figures
appears in the Statement of Additional Information.
Based on the seven-day period ended February 28, 1998, the Fund's
yield, effective yield and taxable equivalent yield (using the
maximum federal income tax rate of 39.6%) were 3.11%, 3.16% and
5.15%, respectively.
This Prospectus may be in use for a full year and it can be
expected that during this period there will be material
fluctuations in yield from that quoted above. For information as
to current yields, please call Nuveen at (800) 858-4084.
The Fund and Its Investment Objective
The Fund is an open-end, diversified management investment company
which has the objective of providing, through investment in a
professionally managed portfolio of high quality short-term
Municipal Obligations (described below), as high a level of
current interest income exempt from federal income tax as is
consistent, in the view of the Fund's management, with stability
of principal and the maintenance of liquidity. The Fund's
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. The Fund values its portfolio securities at
amortized cost and seeks to maintain a constant net asset value of
$1.00 per share. There is risk in all investments and, therefore,
there can be no assurance that the Fund's objective will be
achieved.
Investment Policies
In General
The Fund's investment portfolio will consist primarily of short-
term Municipal Obligations which at the time of purchase are
eligible for purchase by money market funds under applicable
guidelines of the Securities and Exchange Commission ("SEC"), and
are: (1) bonds rated within the two highest long-term grades by
Moody's Investor Service Inc. ("Moody's")--Aaa or Aa, or by
Standard & Poor's Corporation ("S&P")--AAA or AA respectively, or,
in the case of municipal notes, rated MIG-1 or VMIG-1 by Moody's
or SP-1 by S&P, or, in the case of municipal commercial paper,
rated Prime-1 by Moody's or A-1 by S&P; (2) unrated obligations
which, in the opinion of Nuveen Advisory, have credit
characteristics at least equivalent to obligations rated Aa,
MIG-1, VMIG-1 or Prime-1 by Moody's, or AA, SP-1 or A-1 by S&P; or
(3) obligations exempt from federal income tax which at the time
of purchase are backed by the full faith and credit of the U.S.
Government as to payment of principal and interest.
8
<PAGE>
The investment portfolio of the Fund will be limited to
obligations maturing within 397 days from the date of acquisition
or that have variable or floating rates of interest (such rates
vary with changes in specified market rates or indices such as a
bank prime rate or tax-exempt money market index). The Fund may
invest in such variable and floating rate instruments even if
they carry stated maturities in excess of 397 days, provided that
(1) certain conditions contained in rules issued by the SEC under
the Investment Company Act of 1940 are satisfied and (2) they
permit the Fund to recover the full principal amount thereof upon
specified notice. The Fund's right to obtain payment on such an
instrument could be adversely affected by events occurring
between the date the Fund elects to tender the instrument and the
date proceeds are due.
The ratings of Moody's and S&P represent their opinions as to the
quality of those Municipal Obligations which they undertake to
rate. It should be emphasized, however, that ratings are general
and are not absolute standards of quality. 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 by the
Fund. 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. To the extent that unrated Municipal
Obligations may be less liquid, there may be somewhat greater
risks in purchasing unrated Municipal Obligations.
The types of short-term Municipal Obligations in which the Fund
may invest include bond anticipation notes, tax anticipation
notes, revenue anticipation notes, construction loan notes to
provide construction financing of specific projects and bank notes
issued by governmental authorities to commercial banks as evidence
of borrowings. Since these short-term securities frequently serve
as interim financing pending receipt of anticipated funds from the
issuance of long-term bonds, tax collections or other anticipated
future revenues, a weakness in an issuer's ability to obtain such
funds as anticipated could adversely affect the issuer's ability
to meet its obligations on these short-term securities.
Because the Fund invests in securities backed by banks and other
financial institutions, changes in the credit quality of these
institutions could cause losses to the Fund and affect its share
price.
The Fund has obtained commitments (each, a "Commitment") from MBIA
Insurance Corporation ("MBIA") with respect to certain designated
bonds held by the Fund for which credit support is furnished by
one of the banks ("Approved Banks") approved by MBIA under its
established credit approval standards. Under the terms of a
Commitment, if the Fund were to determine that certain adverse
circumstances relating to the financial condition of the Approved
Bank had occurred, the Fund could cause MBIA to issue a "while-in-
fund" insurance policy covering the underlying bonds; after time
and subject to further terms and conditions, the Fund could obtain
from MBIA an "insured-to-maturity" insurance policy as to the
covered bonds. Each type of insurance policy would insure payment
of interest on the bonds and payment of principal at maturity.
Although such insurance would not guarantee the market value of
the bonds or value of the Fund's shares, the Fund believes that
its ability to
9
<PAGE>
obtain insurance for such bonds under such adverse circumstances
will enable the Fund to hold or dispose of such bonds at a price
at or near their par value.
The Fund intends to remain as fully invested in municipal
securities as is prudent or practical under the circumstances. The
Fund to date has not purchased and has no present intention to
purchase "temporary investments," the income from which is subject
to federal income tax. However, the Fund may invest not more than
20% of its net assets in such temporary investments. Further,
during extraordinary circumstances, the Fund may, for defensive
purposes, invest more than 20% of its net assets in such temporary
investments. The Fund will invest only in temporary investments
with remaining maturities of one year or less which, in the
opinion of Nuveen Advisory, are of "high grade" quality.
The SEC has recently adopted amendments and proposed further
amendments to Rule 2a-7 under the Investment Company Act of 1940.
Although these amendments have not yet become effective and the
Fund has not yet amended its amortized cost procedures to
implement changes that would be required by these amendments, the
Fund will adhere at all times to all requirements of Rule 2a-7.
Because investments of the Fund will consist of securities with
relatively short maturities, the Fund can expect to have a high
portfolio turnover rate. The Fund will maintain a dollar-weighted
average portfolio maturity of not more than 90 days. During the
fiscal year ended February 28, 1998, the average maturity of the
Fund's portfolio ranged from 24 to 51 days.
Municipal Obligations
Municipal Obligations include debt obligations issued by states,
cities and local authorities to obtain funds for various public
purposes, including the construction of such public facilities as
airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other
public purposes for which Municipal Obligations may be issued
include the refinancing of outstanding obligations, the obtaining
of funds for general operating expenses and for loans to other
public institutions and facilities. In addition, certain
industrial development bonds and pollution control bonds may be
included within the term Municipal Obligations if the interest
paid thereon qualifies as exempt from federal income tax.
Two principal classifications of Municipal Obligations are
"general obligation" and "revenue" bonds. General obligation bonds
are secured by the issuer's pledge of its full faith, credit and
taxing power for the payment of principal 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 special 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 such bonds. There are,
of course, variations in the security of Municipal obligations,
both within a particular classification and between
classifications, depending on numerous factors.
Municipal Obligations can be further classified between bonds and
notes. Bonds are issued to raise longer-term capital but, when
purchased by the Fund, will have 397 days or less remaining until
maturity or will have a variable or floating rate of interest.
These issues may be either general obligation bonds or revenue
bonds.
10
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Notes are short-term instruments with a maturity of two years or
less. Most notes are general obligations of the issuer and are
sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Payment of these notes is primarily
dependent upon the issuer's receipt of the anticipated revenues.
Municipal Obligations also include very short-term unsecured,
negotiable promissory notes, issued by states, municipalities, and
their agencies, which are known as "tax-exempt commercial paper"
or "municipal paper." Payment of principal and interest on issues
of municipal paper may be made from various sources, to the extent
that funds are available therefrom. There is a limited secondary
market for issues of municipal paper.
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 extent consistent with its
investment objective and limitations. Such notes may be issued for
different purposes and with different security than those
mentioned above.
The yields on Municipal Obligations are dependent on a variety of
factors, including the condition of the general money market and
the Municipal Obligation market, the size of a particular
offering, the maturity of the obligation and the rating of the
issue. Consequently, Municipal Obligations with the same maturity,
coupon and rating may have different yields while obligations of
the same maturity and coupon with different ratings may have the
same yield. The market value of outstanding 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.
The Fund may purchase and sell Municipal Obligations 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 obligation 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 securities 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.
Obligations of issuers of Municipal Obligations are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the
rights and remedies of creditors. In addition, the obligations of
such issuers may become subject to laws enacted in the future by
Congress, state legislatures or referenda extending the time for
payment of principal and/or interest, or imposing other
constraints upon enforcement 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.
11
<PAGE>
Certain Fundamental Investment Policies
The Fund, as a fundamental policy, may not: (1) invest more than
5% of its total assets in securities of any one issuer, excluding
the United States government, its agencies and instrumentalities;
(2) borrow money, except from banks for temporary or emergency
purposes and then only in an amount not exceeding (a) 10% of the
value of the Fund's total assets at the time of borrowing or (b)
one-third of the value of the Fund's total assets including the
amount borrowed, in order to meet redemption requests which might
otherwise require the untimely disposition of securities; (3)
pledge, mortgage or hypothecate its assets, except that, to secure
permitted borrowings for temporary or emergency purposes, 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; (4) make
loans, other than by entering into repurchase agreements and
through the purchase of Municipal Obligations or temporary
investments in accordance with its investment objective, policies
and limitations; (5) invest more than 5% of its total assets in
securities of unseasoned issuers which, together with their
predecessors, have been in operation for less than three years;
(6) invest more than 10% of its assets in repurchase agreements
maturing in more than seven days, "illiquid" securities (such as
non-negotiable CDs) and securities without readily available
market quotations; or (7) invest more than 25% of its assets in
the securities of issuers in any single industry; provided,
however, that such limitation shall not be applicable to the
purchase of Municipal Obligations and obligations issued or
guaranteed by the U.S. government or its agencies or
instrumentalities. For purposes of applying the limitations of
clauses (1) and (5), the "issuer" of a security shall be deemed to
be the entity whose assets and revenues are committed to the
payment of principal and interest on such security, provided that
the guarantee of an instrument will be considered a separate
security (subject to certain exclusions allowed under the
Investment Company Act of 1940). The foregoing restrictions and
other limitations discussed herein will apply only at the time of
purchase of securities and will not be considered violated unless
an excess or deficiency occurs or exists immediately after and as
a result of an acquisition of securities.
For a more complete description of the fundamental and non-
fundamental investment policies summarized above and the other
fundamental investment policies applicable to the Fund, see the
Statement of Additional Information. The investment policies
specifically identified as fundamental, together with the Fund's
investment objective, cannot be changed without approval by
holders of a "majority of the Fund's outstanding voting shares."
As defined by the Investment Company Act of 1940, this means the
vote of (i) 67% or more of the shares present at a meeting, if the
holders of more than 50% of the shares are present or represented
by proxy, or (ii) more than 50% of the shares, whichever is less.
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<PAGE>
Management of the Fund
The management of the Fund, including general supervision of the
duties performed by Nuveen Advisory under the Investment
Management Agreement, is the responsibility of the Fund's Board of
Directors.
Nuveen Advisory acts as the investment adviser for and manages the
investment and reinvestment of the assets of the Fund. Its address
is 333 West Wacker Drive,
Chicago, Illinois 60606. Nuveen Advisory also administers the
Fund's business affairs, acts as pricing agent for the Fund,
provides office facilities and equipment and certain clerical,
bookkeeping and administrative services, and permits any of its
officers or employees to serve without compensation as directors
or officers of the Fund if elected to such positions.
For the services and facilities furnished by Nuveen Advisory, the
Fund has agreed to pay an annual management fee as follows:
Average daily net asset value Management fee
------------------------------------------------------------------
For the first $500 million .400 of 1%
For the next $500 million .375 of 1
For the next $1 billion .350 of 1
For net assets over $2 billion .325 of 1
------------------------------------------------------------------
All fees and expenses are accrued daily and deducted before
payment of dividends to investors. In addition to the management
fee of Nuveen Advisory, the Fund pays all other costs and expenses
of its operations.
The management fee will be reduced or Nuveen Advisory will assume
certain Fund expenses in an amount necessary to prevent the Fund's
total expenses (including Nuveen Advisory's management fee, but
excluding interest, taxes, fees incurred in acquiring and
disposing of portfolio securities and, to the extent permitted,
extraordinary expenses) in any fiscal year from exceeding .45 of
1% of the average daily net asset value of the Fund. For the
fiscal year ended February 28, 1998, the management fee amounted
to .40 of 1% of the Fund's average daily net assets, and total
expenses amounted to .44 of 1% of the Fund's average daily net
assets.
Nuveen Advisory currently serves as investment adviser to 42 open-
end funds (the "Nuveen Mutual Funds") and 52 exchange-traded
municipal securities funds (the "Nuveen Exchange-Traded Funds").
As of the date of this Prospectus, Nuveen Advisory manages
approximately $36 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 ("Nuveen"), 333 West Wacker Drive, Chicago, Illinois
60606. Nuveen, the principal underwriter of the Fund's shares, is
sponsor of the Nuveen Tax-Exempt Unit Trust and Nuveen Unit
Trusts, registered unit investment trusts. It is also the
principal underwriter of the Nuveen Mutual Funds, and served as
co-managing underwriter for the shares of the Nuveen Exchange-
Traded Funds. Over 1,000,000 individuals have
13
<PAGE>
invested to date in Nuveen's funds and trusts. Founded in 1898,
Nuveen is a subsidiary of The John Nuveen Company which, in turn,
is approximately 78% owned by The St. Paul Companies, Inc. ("St.
Paul"). St. Paul is located in St. Paul, Minnesota, and is
principally engaged in providing property-liability insurance
through subsidiaries.
Net Asset Value
The net asset value of the Fund's shares is determined by The
Chase Manhattan Bank, the Fund's custodian, at 12:00 noon Eastern
Time on (1) each day on which the Federal Reserve Bank of Boston
is normally open for business (a "business day") and (2) on any
other day during which there is a sufficient degree of trading in
the Fund's portfolio securities such that the current net asset
value of the Fund's shares might be materially affected by changes
in the value of portfolio securities. The net asset value per
share will be computed by dividing the sum of the value of the
portfolio securities held by the Fund, plus cash or other assets,
less liabilities, by the total number of shares outstanding at
such time.
The Fund seeks to maintain a net asset value of $1.00 per share.
In this connection, the Fund values its portfolio securities on
the basis of their amortized cost. This method values a security
at its cost on the date of purchase and thereafter assumes a
constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the
market value of the security. For a more complete description of
this valuation method and its effect on existing and prospective
shareholders, see the Statement of Additional Information. There
can be no assurance that the Fund will be able at all times to
maintain a net asset value of $1.00 per share.
Dividends
All of the net income of the Fund is declared on each calendar day
as a dividend on shares entitled to such dividend. Net income of
the Fund consists of all interest income accrued and discount
earned on portfolio assets (adjusted for amortization of premium
or discount on securities when required for federal income tax
purposes), plus or minus any realized short-term gains or losses
on portfolio instruments since the previous dividend declaration,
less estimated expenses incurred subsequent to the previous
dividend declaration. It is not expected that realized or
unrealized gains or losses on portfolio instruments will be a
meaningful factor in the computation of the Fund's net income.
Dividends are paid monthly and are reinvested in additional shares
of the Fund at net asset value or, at the shareholder's option,
paid in cash. Net realized long-term capital gains, if any, will
be paid not less frequently than annually and reinvested in
additional shares of the Fund at net asset value unless the
shareholder has elected to receive capital gains in cash. The Fund
does not anticipate realizing any significant long-term capital
gains or losses.
14
<PAGE>
Suitability
The Fund is designed as a convenient means for institutional
investors with temporary cash balances who seek to obtain income
exempt from federal income taxes. Although the Fund is primarily
designed for banks and trust companies seeking tax-free investment
of short-term funds held in accounts for which the bank or trust
company acts in a fiduciary, advisory, agency, custodial or
similar capacity, the Fund is equally appropriate for the tax-free
investment of short-term funds held by corporations, insurance
companies, investment counselors, law firms, investment bankers,
brokers, individuals and others.
Because plans qualified under Section 401 of the Internal Revenue
Code or other persons exempt from federal income tax will be
unable to benefit from the tax-exempt nature of the Fund's
dividends, the Fund is not generally suitable for such plans or
persons.
How to Buy Fund Shares
In General
Investors may purchase Fund shares on business days (as defined
under "Net Asset Value") at the net asset value which is next
computed after receipt of a proper purchase order and receipt of
payment in federal funds. There are no sales charges.
Purchase by Telephone
To purchase shares of the Fund, first open an account by calling
Nuveen on any business day at (800) 858-4084. Information needed
to establish the account will be taken over the telephone. An
application form should be completed promptly and mailed to the
Fund. Federal funds should be wired to:
United Missouri Bank of Kansas City, N.A.
ABA #101000695
Nuveen Tax-Exempt Money Market Fund, Inc.
Account No. (see above)
Account Name:
The investor will be required to complete an application and mail
it to the Fund after making the initial telephone purchase.
Subsequent investments may be made by following the same wire
transfer procedure.
If an order is received by Nuveen by 12:00 noon, eastern time, and
federal funds are received by United Missouri Bank of Kansas City,
N.A. on the same day, the order is effective that day. Federal
funds should be wired as early as possible, but no later than 3:00
p.m. Eastern Time, to facilitate crediting to the shareholder's
account on that day.
Purchase by Mail
Complete an application form and mail it with a check or Federal
Reserve draft to Nuveen Tax-Exempt Money Market Fund, Inc., c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330.
The order becomes effective as soon as the check or draft is
converted to federal funds. This usually occurs one business day
after receipt, but may take longer.
15
<PAGE>
Commencement of Dividends
Shares are deemed to have been purchased and are entitled to
dividends commencing on the day the purchase order becomes
effective.
Minimum Investment
The minimum initial investment is $25,000; subsequent investments
must be in amounts of $500 or more. Institutions are encouraged to
open single master accounts. If, however, an institution wishes to
use the Fund's transfer agent's sub-accounting system, these sub-
accounts may be aggregated for the purpose of meeting the minimum
investment.
Other Shareholder Programs
Exchange Privilege
You may exchange shares of the Fund for shares of any other open-
end management investment company with reciprocal exchange
privileges (the "Nuveen Funds"), into an identically registered
account provided that the Nuveen Fund into which shares are to be
exchanged is offered in the shareholder's state of residence and
that the shares to be exchanged have been held by the shareholder
for a period of at least 15 days. Shares of Nuveen Funds purchased
subject to a front-end sales charge may be exchanged for shares of
the Fund or any other Nuveen Fund at the next determined net asset
value without any front-end sales charge. Shares of any Nuveen
Fund purchased through dividend reinvestment or through
reinvestment of Nuveen UIT distributions (and any dividends
thereon) may be exchanged for shares of the Fund or any other
Nuveen Fund without a front-end sales charge. Exchanges of shares
with respect to which no front-end sales charge has been paid will
be made at the public offering price, which may include a front-
end sales charge, unless a front-end sales charge has previously
been paid on the investment represented by the exchanged shares
(i.e., the shares to be exchanged were originally issued in
exchange for shares on which a front-end sales charge was paid),
in which case the exchange will be made at net asset value.
Because certain other Nuveen Funds may determine net asset value
and therefore honor purchase or redemption requests on days when
the Fund does not (generally, Martin Luther King's Birthday,
Columbus Day and Veteran's Day), exchanges of shares of one of
those funds for shares of the Fund may not be effected on such
days.
The total value of shares being exchanged must at least equal the
minimum investment requirement of the Nuveen Fund into which they
are being exchanged. Exchanges are made based on the relative
dollar values of the shares involved in the exchange, and will be
effected by redemption of shares of the Nuveen Fund held and
purchase of the shares of the other Nuveen Fund. For federal
income tax purposes, any such exchange constitutes a sale and
purchase of shares and may result in capital gain or loss. Before
exercising any exchange, you should obtain the Prospectus for the
Nuveen Fund into which shares are to be exchanged and read it
carefully. If the registration of the account for the Fund you are
purchasing is not exactly the same as that of the fund account
from which the exchange is made, written instructions from all
holders of the account from which the exchange is being made must
be received, with signatures guaranteed by a member of any
approved Medallion Guarantee Program or in such other manner as
may be acceptable to the Fund. You may also make exchanges by
telephone if a pre-authorized exchange authorization, as provided
on the account Application Form, is on file with Shareholder
Services, Inc., the Fund's shareholder service agent. The exchange
privilege may be modified or discontinued at any time.
16
<PAGE>
Additional Information
As transfer agent for the Fund, Shareholder Services, Inc. ("SSI")
maintains an account for each shareholder of record. In the
interest of economy and convenience, share certificates are not
issued unless specifically requested by writing the Fund. No
certificates are issued for fractional shares.
Confirmations of each purchase and redemption order as well as
monthly statements are sent to every shareholder. Master accounts
also receive a monthly summary report setting forth the share
balance and dividends earned for the month for each sub-account
established under that master account.
To assist those institutions performing their own sub-accounting,
same day information as to the Fund's daily per share income to
seven decimal places and the one-day yield to four decimal places
are normally available by 3:30 p.m., Eastern Time.
Banks and other organizations through which investors may purchase
shares of the Fund may impose charges in connection with purchase
orders. Investors should contact their institutions directly to
determine what charges, if any, may be imposed.
The Fund has authorized one or more brokers to accept on its
behalf purchase and redemption orders. Such brokers are authorized
to designate other intermediaries to accept purchase and
redemption orders on the Fund's behalf. The Fund will be deemed to
have received a purchase or redemption order when an authorized
broker or, if applicable, a broker's authorized designee accepts
the order. Customer orders received by such broker (or their
designee) will be priced at the Fund's net asset value next
computed after they are accepted by an authorized broker (or their
designee). Orders accepted by an authorized broker (or their
designee) before the close of regular trading on the New York
Stock Exchange will receive that day's share price; orders
accepted after the close of trading will receive the next business
day's share price.
Subject to the rules of the SEC, the Fund reserves the right to
suspend the continuous offering of the shares at any time, but
such suspension shall not affect the shareholder's right of
redemption as described below. The Fund also reserves the right to
reject any purchase order and to waive or increase minimum
investment requirements.
How to Redeem Fund Shares
In general
Upon receipt of a proper redemption request on a business day the
Fund will redeem its shares at their next determined net asset
value. The Fund reserves the right not to honor redemption
requests where the shares to be redeemed have been purchased by
check within 15 days prior to the date the redemption request is
received. There is no delay when shares being redeemed were
purchased by wiring federal funds and thus purchase by this method
is strongly recommended.
Telephone Redemption by Check
Unless you have declined telephone redemption privileges, you may
sell fund shares by calling (800) 858-4084. Your redemption must
not exceed $50,000 and you may not redeem by telephone shares held
in certificate form. Checks will be issued only to the shareholder
on record and mailed to the address on record.
17
<PAGE>
Telephone Redemption by Fedwire
Redemption requests may be made by calling Nuveen at (800) 858-
4084. Shareholders wishing to redeem by telephone must have
elected this option on an account application form and have
returned the form to Nuveen before telephone redemption requests
can be accepted. If a redemption request is received by Nuveen by
12:00 noon, Eastern Time, the proceeds are ordinarily wired on the
same day to the commercial bank account designated on the
shareholder's application form. The shares redeemed do not earn
income on the day the proceeds are wired. If the redemption
request is received by Nuveen after 12:00 noon, Eastern Time, the
shares to be redeemed earn income on the day the request is
received and proceeds are ordinarily wired the next business day.
The Fund reserves the right to charge a fee of approximately $5
for the cost of wire transferred redemptions of less than $5,000.
The amount and terms of this fee are subject to change. Telephone
redemption is not available to redeem shares for which share
certificates have been issued.
Proceeds of telephone redemption of shares will be transferred by
Federal Reserve wire only to the commercial bank account specified
on the shareholder's application form. In order to establish
multiple accounts, or to change the account or accounts designated
to receive wire redemption proceeds, a written request specifying
the change must be sent to Nuveen. This request must be signed by
each shareholder with each signature guaranteed by a member of an
approved Medallion Guarantee Program, or in such other manner as
may be acceptable to the Fund. Further documentation may be
required from corporations, executors, trustees or personal
representatives.
The Fund reserves the right to refuse a telephone redemption and,
at its option, may limit the timing, amount or frequency of these
redemptions. This procedure may be modified or terminated at any
time, on 30 days' notice, by the Fund. The Fund, SSI and Nuveen
will not be liable for following telephone instructions reasonably
believed to be genuine. The Fund employs procedures reasonably
designed to confirm that telephone instructions are genuine. These
procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting upon
a caller's instructions. If the Fund does not follow reasonable
procedures for protecting shareholders against loss on telephone
transactions, it may be liable for any losses due to unauthorized
or fraudulent telephone instructions.
Written Redemption
Shareholders may redeem their shares by sending a written request
for redemption directly to the Fund, accompanied by duly endorsed
certificates, if issued. Requests for redemption and share
certificates, if issued, must be signed by each shareholder and,
if the redemption proceeds exceed $50,000 or are payable other
than to the shareholder of record at the address of record (which
address may not have been changed in the preceding 30 days), the
signatures must be guaranteed by a member of an approved Medallion
Guarantee Program, or in such other manner as may be acceptable to
the Fund. Under normal circumstances payment will be made by check
and mailed within one business day (and in no event more than
seven days) after receipt of a redemption request in proper form.
18
<PAGE>
Redemption in Kind
The Fund has committed to pay in cash all redemption requests made
by each shareholder during any 90 day period up to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning
of such period. This commitment is irrevocable without the prior
approval of the SEC and is a fundamental policy of the Fund which
may not be changed without shareholder approval. In the case of
redemption requests in excess of such amounts, the Board of
Directors reserves the right to have the Fund make payment in
whole or in part in securities or other assets of the Fund in case
of an emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing
shareholders. In this event, the securities would be valued in the
same manner as the portfolio of the Fund is valued. If the
recipient were to sell such securities, he or she would incur
brokerage charges.
Other Practices
The Fund may suspend the right of redemption or delay payment more
than seven days (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund normally
utilizes is restricted, or an emergency exists as determined by
the SEC so that disposal of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the SEC by order may
permit for protection of the shareholders of the Fund.
The Fund reserves the right to redeem any account with a balance
of $5,000 or less. Shareholders will be notified that the value of
their account is less than $5,000 and will be allowed 60 days to
make additional share purchases before the redemption is
processed.
Banks and other organizations through which investors may redeem
shares of the Fund may impose charges for redemption. Shareholders
should contact such institutions directly regarding any such
charges.
Taxes
Federal Income Tax Matters
The Fund intends to qualify, as it has in prior years, 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 for treatment as a regulated investment company,
the Fund must satisfy certain requirements relating to the sources
of its income, diversification of its assets and distribution of
its income 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 capital gains that is
currently distributed to shareholders. The fund also intends to
satisfy conditions which will enable interest income from
Municipal Obligations that is exempt from federal income tax in
the hands of the Fund to retain such tax-exempt status when
distributed to the shareholders of the Fund. Distributions of
interest income on Municipal Obligations may not be exempt from
state or local income taxes.
Distributions by the Fund of net interest income received, if any,
from temporary investments and net short-term capital gains, if
any, realized by the Fund, will be taxable to shareholders as
ordinary income. As long as the Fund qualifies as a regulated
invest-
19
<PAGE>
ment company under the Code, distributions to shareholders will
not qualify for the dividends received deduction for corporations.
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
distributions to shareholders would be taxable to shareholders as
ordinary income.
The Code provides that interest on indebtedness incurred or
continued to purchase or carry tax-free investments, such as
shares of the Fund, is not deductible. Under rules used by the
Internal Revenue Service for determining when borrowed funds are
considered used for the purpose of purchasing or carrying
particular assets, the purchase of shares may be considered to
have been made with borrowed funds even though such funds are not
directly traceable to the purchase of shares.
Tax-exempt income is taken into account in calculating the amount
of social security and railroad retirement benefits that may be
subject to federal income tax.
The Fund may invest in the type of private activity bonds the
interest on which is not federally tax-exempt to persons who are
"substantial users" of the facilities financed by such bonds or
who are "related persons" of such substantial users. Accordingly,
the Fund may not be an appropriate investment for shareholders who
are considered either a "substantial user" or a "related person"
thereof. Such persons should consult their tax advisers before
investing in the Fund.
The Fund may invest in private activity bonds, the interest on
which is a specific item of tax preference for purposes of
computing the alternative minimum tax on corporations and
individuals. This type of private activity bond includes most
industrial and housing revenue bonds. Shareholders whose tax
liability is determined under the alternative minimum tax will be
taxed on their share of the Fund's exempt-interest dividends that
were paid from income earned on these bonds. In addition, the
alternative minimum taxable income for corporations is increased
by 75% of the difference between an alternative measure of income
("adjusted current earnings") and the amount otherwise determined
to be alternative 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.
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 certificates, 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
shareholders. These provisions are subject to change by
legislative or administrative action, and any such change may be
retroactive with respect to Fund transactions. Shareholders are
advised to consult their own tax advisers for more detailed
information concerning the federal taxation of the Fund and the
federal, state and local tax consequences to its shareholders.
20
<PAGE>
State and Local Tax Aspects
The exemption from federal income tax for distributions of
interest income from Municipal Obligations which are designated
exempt interest dividends will not necessarily result in exemption
under the income or other tax laws of any state or local taxing
authority. The laws of the several states and local taxing
authorities vary with respect to the taxation of such
distributions, and shareholders of the Fund are advised to consult
their own tax advisers in that regard.
General Information
Investor Inquiries
Investor inquiries may be made directly of the Fund in writing or
by calling Nuveen, the Fund's distributor (nationwide (800) 858-
4084).
Custodian, Shareholder Services Agent and Transfer Agent
The custodian of the Fund's assets is The Chase Manhattan Bank, 4
New York Plaza, New York, New York 10004. The custodian performs
custodial fund accounting and portfolio accounting services. SSI,
P.O. Box 5330, Denver, Colorado 80217-5330, is the transfer,
shareholder services and dividend paying agent for the Fund and
performs bookkeeping, data processing and administrative services
incidental to the maintenance of shareholder accounts.
Nuveen Advisory and the transfer agent rely on computer systems to
manage the fund's investments, process shareholder transactions
and provide shareholder account maintenance. Because of the way
computers historically have stored dates, some of these systems
currently may not be able to correctly process activity occurring
in the year 2000. Nuveen Advisory is working with the fund's
service providers to adapt their systems to address this "year
2000 issue." Nuveen Advisory and the fund expect the necessary
work to be completed no later than December 1999, although we can
make no assurance with respect to the systems of the fund's
service providers.
Capital Stock
The Fund was incorporated in Maryland on November 19, 1980. Its
authorized capital stock consists of a single class of
5,000,000,000 shares of common stock, $.01 par value. All shares
have equal non-cumulative voting rights and equal rights with
respect to dividends declared by the Fund and assets upon
liquidation. Shares are fully paid and non-assessable when issued
and have no pre-emptive, conversion or exchange rights.
Independent Public Accountants
Arthur Andersen LLP, independent public accountants, 33 West
Monroe Street, Chicago, Illinois 60603 have been selected as
auditors for the Fund. In addition to audit services, Arthur
Andersen LLP provide consultation and assistance on accounting,
internal control, tax and related matters. The financial
statements of the Fund which follow and the information set forth
under "Financial Highlights" have been audited by Arthur Andersen
LLP as indicated in their report with respect thereto, and are
included in reliance upon the authority of said firm as experts in
giving said report.
21
<PAGE>
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
ANNUAL REPORT FINANCIAL SECTION
FEBRUARY 28, 1998
CONTENTS
23 Portfolio of Investments
28 Statement of Net Assets
29 Statement of Operations
30 Statement of Changes in Net Assets
31 Notes to Financial Statements
33 Financial Highlights
34 Report of Independent Public Accountants
____
22
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
Principal Amortized
Amount Description Ratings* Cost
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alabama - 2.1%
$ 5,935,000 Boaz Industrial Development Board (Parker-Hannifin Corporation Project),
Variable Rate Demand Bonds, 3.500%, 9/01/12+ Aa-2 $ 5,935,000
3,955,000 Marshall County, Special Obligation School Refunding Warrants, Series 1994,
Variable Rate Demand Bonds, 3.450%, 2/01/12+ A-1+ 3,955,000
- ---------------------------------------------------------------------------------------------------------------------------
Arizona - 2.1%
5,000,000 Apache County Industrial Development, Pollution Control Revenue (Tucson
Electric), Series C, Variable Rate Demand Bonds, 3.400%, 12/15/18+ VMIG-1 5,000,000
5,000,000 Arizona School District, Financing Program, Paradise Valley Unified School
District No. 69 of Maricopa County, Arizona, Tax Anticipation Note,
4.600%, 6/30/98 SP-1+ 5,013,001
- ---------------------------------------------------------------------------------------------------------------------------
Connecticut - 3.2%
15,000,000 Connecticut State Special Assessment Unemployment Compensation Advance Fund
Revenue Bonds, Series 1993C, Commercial Paper, 3.900%, 7/01/98 VMIG-1 15,000,000
- ---------------------------------------------------------------------------------------------------------------------------
District of Columbia - 3.7%
6,200,000 District of Columbia General Obligation, Series 1992A-3, Variable Rate Demand
Bonds, 3.700%, 10/01/07+ VMIG-1 6,200,000
7,200,000 District of Columbia General Obligation, Series 1992A-4, Variable Rate Demand
Bonds, 3.700%, 10/01/07+ VMIG-1 7,200,000
4,200,000 District of Columbia General Obligation, Series 1992A-2, Variable Rate Demand
Bonds, 3.700%, 10/01/07+ VMIG-1 4,200,000
- ---------------------------------------------------------------------------------------------------------------------------
Florida - 8.4%
18,000,000 Florida Housing Finance Agency, Multi-Family, 1985 Series D (Kings Colony),
Variable Rate Demand Bonds, 3.500%, 8/01/06+ VMIG-1 18,000,000
6,955,000 Gulf Breeze, Series 1995 A (Florida Municipal Bond Fund), Variable Rate Demand
Bonds, 3.500%, 3/31/21+ A-1 6,955,000
3,000,000 Jacksonville Health Facilities Authority (River Garden Project), Variable
Rate Demand Bonds, 3.350%, 2/01/18+ A-1 3,000,000
5,800,000 Miami Health Facilities Authority (Miami Jewish Home and Hospital for the
Aged, Inc.), Series 1992, Variable Rate Demand Bonds, 3.500%, 3/01/12+ Aa-3 5,800,000
2,200,000 Palm Beach County Health Facility Authority (Pooled Hospital Loan Program),
Series 1985, Commercial Paper, 3.250%, 4/07/98 VMIG-1 2,200,000
4,000,000 The University Athletic Association, Inc., Capital Improvement Revenue Bonds,
Series 1990, Variable Rate Demand Bonds, 3.650%, 2/01/20+ VMIG-1 4,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Georgia - 10.3%
5,000,000 Municipal Gas Authority of Georgia, Gas Revenue Bonds (Southern Portfolio I A-1+ 5,000,000
Project), Series D, Commercial Paper, 3.300%, 5/07/98
7,215,000 Housing Authority of Clayton County, Tax-Exempt Adjustable Mode, Multifamily
Housing Revenue Refunding Bonds, Series 1996 (BS Partners LP Project),
3.400%, 9/01/26+ Aa-2 7,215,000
8,000,000 Cobb County School District (Georgia), Short-Term Notes, Series 1998, 4.000%,
12/31/98 MIG-1 8,032,533
3,000,000 Columbia Elderly Authority, Residential Care Facilities, Revenue Bonds
(Augusta Resource Center on Aging Inc.), Variable Rate Demand Bonds,
3.500%, 1/01/21+ Aa-3 3,000,000
</TABLE>
____
23
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
Principal Amortized
Amount Description Ratings* Cost
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Georgia - continued
$ 4,800,000 Housing Authority of the County of DeKalb, Georgia, Multifamily Housing
Revenue Bonds (Crow Wood Arbor Associates, Limited Project), Series 1985Q,
Variable Rate Demand Bonds, 3.500%, 12/01/07+ A-1+ $ 4,800,000
10,705,000 Housing Authority of the County of Dekalb, Georgia, Multifamily Housing Revenue
Refunding Bonds (Lenox Pointe Project), Series 1996A, Variable Rate
Demand Bonds, 3.450%, 11/01/23+ P-1 10,705,000
10,000,000 Municipal Electric Authority of Georgia, Commercial Paper, Program General
Resolution Project, Bond Anticipation Note, Series A & B, 3.500%, 5/28/98 A-1+ 10,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Illinois - 4.4%
10,000,000 City of Chicago, General Obligation Tender Notes, Series 1998, 3.550%, 2/04/99 SP-1+ 10,000,000
Decatur Water Revenue Bonds, Series 1985 (New South Water Treatment),
Commercial Paper:
5,700,000 3.800%, 5/13/98 VMIG-1 5,700,000
5,000,000 3.650%, 4/22/98 VMIG-1 5,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Kansas - 1.3%
6,000,000 Manhattan Industrial Development Board (Parker-Hannifin Corporation), Variable
Rate Demand Bonds, 3.500%, 9/01/09+ Aa-2 6,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Kentucky - 3.2%
15,000,000 Louisville and Jefferson County, Metropolitan Sewer District, Sewer and
Drainage System, Subordinated Revenue Notes, Series 1997A, 3.500%,
4/14/98 SP-1 15,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Louisiana - 1.0%
4,800,000 New Orleans Aviation Board, Series 1993B, Variable Rate Demand Bonds,
3.550%, 8/01/16+ VMIG-1 4,800,000
- ---------------------------------------------------------------------------------------------------------------------------
Michigan - 5.4%
7,000,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds
(The Detroit Edison Company Pollution Control Bonds Project),
Series 1995CC, Variable Rate Demand Bonds, 3.700%, 9/01/30+ A-1+ 7,000,000
11,800,000 Detroit Downtown Development Authority (Millender Center Project), Variable
Rate Demand Bonds, 4.200%, 12/01/10+ VMIG-1 11,800,000
7,000,000 The School District of the City of Kalamazoo, County of Kalamazoo,
State of Michigan, 1997 State Aid Notes (Limited Tax General
Obligation), 4.000%, 4/15/98 SP-1+ 7,002,525
- ---------------------------------------------------------------------------------------------------------------------------
Minnesota - 4.1%
5,000,000 Bloomington Port Authority, Tax Increment Revenue Refunding Bonds (Mall of
America Project), Series 1995A, Variable Rate Demand Bonds, 3.450%, 2/01/13+ VMIG-1 5,000,000
6,920,000 Minneapolis/St. Paul Housing and Redevelopment Authority, Health Care
(Children's Health Care), Series 1995, Variable Rate Demand Bonds,
3.850%, 8/15/25+ SP-1+ 6,920,000
7,500,000 St. Paul Housing and Redevelopment Authority, Parking Revenue Bonds,
Series 1995B, Variable Rate Demand Bonds, 3.550%, 8/01/17+ VMIG-1 7,500,000
- ---------------------------------------------------------------------------------------------------------------------------
Missouri - 7.5%
5,500,000 Health and Educational Facilities Authority of the State of Missouri, Health
Facilities Revenue Bonds (Bethesda Barclay), Series 1996A, Variable
Rate Demand Bonds, 3.950%, 8/15/26+ VMIG-1 5,500,000
</TABLE>
____
24
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
Principal Amortized
Amount Description Ratings* Cost
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Missouri - continued
$ 2,400,000 Health and Educational Facilities Authority of the State of Missouri,
Educational Facilities, St. Louis University, Series 1985, Readily
Adjustable Tax Exempt Securities, Adjustable Rate Demand Bonds,
3.750%, 12/01/05+ VMIG-1 $ 2,400,000
3,355,000 State Environmental Improvement and Energy Resources Authority of the
State of Missouri, Unit Priced Demand Adjustable Pollution Control
Revenue Bonds, Series 1985 A (Union Electric Company), Commercial Paper,
3.550%, 5/27/98 VMIG-1 3,355,000
3,800,000 The Industrial Development Authority of the County of Jackson, State of
Missouri, Recreational Facilities Revenue Bonds (YMCA of Greater Kansas
City Project), Series 1996A, Variable Rate Demand Bonds, 3.950%, A-1 3,800,000
12,000,000 The City of St. Louis, Missouri, Tax and Revenue Anticipation Notes, Payable
from the General Revenue Fund, Series 1997, 4.500%, 6/30/98 MIG-1 12,024,892
8,300,000 St. Louis Land Clearance Redevelopment Authority, Parking Facility Revenue
Refunding Bonds, Series 1996, Variable Rate demand Bonds, 4.100%, 9/01/19+ VMIG-1 8,300,000
- ---------------------------------------------------------------------------------------------------------------------------
Nebraska - 0.9%
4,405,000 Scotts Bluff County Hospital Authority, Elderly Residential Facility (West
Village), GNMA, Variable Rate Demand Bonds, 4.000%, 12/01/31+ A-2 4,405,000
- ---------------------------------------------------------------------------------------------------------------------------
North Carolina - 4.2%
4,100,000 North Carolina Eastern Municipal Power Agency, Power System Revenue,
Series 1988 B, Commercial Paper, 3.400%, 6/11/98 A-1+ 4,100,000
North Carolina Eastern Municipal Power Agency, Commercial Paper (Tax-Exempt):
8,000,000 3.500%, 4/07/98 A-1+ 8,000,000
8,000,000 3.300%, 5/14/98 A-1+ 8,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Ohio - 5.0%
4,000,000 Ohio School Districts, 1998 Cash Flow Borrowing Program, Certificates of
Participation, General Obligation Notes, Series A, 4.120%, 12/31/98 MIG-1 4,018,557
9,800,000 Cuyahoga County, University Hospital of Cleveland, Series 1985, Variable Rate
Demand Bonds, 3.850%, 1/01/16+ VMIG-1 9,800,000
5,000,000 County of Hamilton, Ohio, Hospital Facilities, Series 1997A (Children's
Hospital Medical Center), Variable Rate Demand Bonds, 3.550%, 5/15/17+ VMIG-1 5,000,000
5,000,000 County of Lucas, Ohio, Multi-Mode Variable Rate Demand Facilities Improvement
Revenue Bonds, Series 1997, (The Toledo Zoological Society Project), Variable
Rate Demand Bonds, 3.450%, 10/01/05+ VMIG-1 5,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Oregon - 1.3%
6,200,000 Port of Morrow (Portland G. E. Company Boardman Project), Variable Rate Demand
Bonds, 4.000%, 10/01/13+ VMIG-1 6,200,000
- ---------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 5.3%
10,000,000 Port Authority of Allegheny County (Commonwealth of Pennsylvania), Grant
Anticipation Notes, Series A of 1997, 3.850%, 6/30/98 MIG-1 10,000,000
10,000,000 Dauphin County General Authority, Series of 1997 (Education and Health Loan
Program), Variable Rate Demand Bonds, 3.460%, 11/01/17+ VMIG-1 10,000,000
</TABLE>
____
25
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
Principal Amortized
Amount Description Ratings* Cost
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pennsylvania - continued
$ 3,210,000 Montgomery County Higher Education and Health Authority, Series 1995
(Philadephia Presbytery Homes, Inc), Variable Rate Demand Bonds,
3.450%, 7/01/25+ VMIG-1 $ 3,210,000
2,000,000 City of Philadelphia Tax and Revenue Anticipation Notes, Series A of
1997-1998, 4.500%, 6/30/98 MIG-1 2,003,186
- ---------------------------------------------------------------------------------------------------------------------------
South Dakota - 2.5%
11,935,000 South Dakota Health and Education Facility (McKennan Hospital), Series 1994,
Variable Rate Demand Bonds, 3.450%, 7/01/14+ VMIG-1 11,935,000
- ---------------------------------------------------------------------------------------------------------------------------
Tennessee - 5.7%
15,000,000 The Public Building Authority of the City of Clarksville, Tennessee, Adjustable
Rate Pooled Financing Revenue Bonds, Series 1994 (Tennessee Municipal Bond
Fund), Variable Rate Demand Bonds, 3.450%, 6/01/24+ A-1+ 15,000,000
4,175,000 Loudon Water and Sewer Revenue Refunding Bonds, Series 1996, Variable Rate
Demand Bonds, 3.500%, 9/01/06+ Aa-2 4,175,000
8,000,000 The Public Building Authority of The County of Montgomery, Tennessee,
Adjustable Rate Pooled Financing Revenue Bonds, Series 1996 (Montgomery
County Loan), 3.450%, 7/01/19+ P-1 8,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Texas - 2.6%
2,800,000 Texas Health Facilities Development Corporation (North Texas Pooled Health
Program), Variable Rate Demand Bonds, 3.650%, 5/31/25+ VMIG-1 2,800,000
9,400,000 City of Austin, Texas (Travis and Williamson Counties), Combined Utility
Systems, Commercial Paper, Series A, 3.500%, 6/11/98 A-1+ 9,400,000
- ---------------------------------------------------------------------------------------------------------------------------
Washington - 6.6%
7,000,000 Washington Health Care Facilities Authority, Variable Rate Demand Revenue
Bonds, Series 1997 (Sunnyside Community Hospital Association, Sunnyside),
3.300%, 10/01/17+ Aa-2 7,000,000
10,745,000 Washington State Housing Finance Commission, Variable Rate Demand Nonprofit
Revenue Bonds, (Emerald Heights Project), Series 1990, Variable Rate
Demand Bonds, 3.700%, 1/01/21+ A-1 10,745,000
4,400,000 Washington State Housing Finance Commission, Nonprofit Revenue Bonds (Panorama
City Project), 1997 Refunding Bonds, Variable Rate Demand Bonds,
3.700%, 1/01/27+ VMIG-1 4,400,000
9,000,000 Washington Student Loan Agency, Series 1984A, Variable Rate Demand Bonds,
3.725%, 1/01/01+ VMIG-1 9,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Wisconsin - 5.7%
10,000,000 State of Wisconsin, Operating Notes of 1997, Series 2, 4.500%, 6/15/98 MIG-1 10,021,792
6,500,000 Wisconsin Health and Educational Facilities Authority, Series 1988A
(Alexian Village of Milwaukee), Commercial Paper, 3.800%, 5/11/98 VMIG-1 6,500,000
1,505,000 School District of Delavan-Darien, Rock and Walworth Counties, Wisconsin,
Bond Anticipation Notes, 4.150%, 4/15/98 MIG-1 1,505,434
1,500,000 Germantown School District, Washington County, Wisconsin, Bond Anticipation
Notes, 4.250%, 4/01/98 MIG-1 1,500,271
3,725,000 River Falls Commercial Development Revenue Refunding (Erdeco Partnership
Project), Variable Rate Demand Bonds, 3.560%, 11/01/13+ Aa-2 3,725,000
3,600,000 Village of Whitefish Bay, Milwaukee County, Wisconsin, General Obligation
Capital Improvement Bonds, Tax and Revenue Anticipation Promissory
Notes, 4.100%, 6/17/98 N/R 3,602,698
</TABLE>
____
26
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
Principal Amortized
Amount Description Ratings* Cost
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wyoming - 1.9%
Lincoln County Pollution Control Revenue Refunding (Pacificorp Project),
Series 1991, Commercial Paper:
$ 5,300,000 3.550%, 4/06/98 VMIG-1 $ 5,300,000
3,500,000 3.300%, 5/06/98 VMIG-1 3,500,000
- ---------------------------------------------------------------------------------------------------------------------------
$466,040,000 Total Investments - 98.4% 466,159,889
- ---------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 7,341,830
------------------------------------------------------------------------------------------------------------
Net Assets - 100% $473,501,719
------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
+ 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.
____
27
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
FEBRUARY 28, 1998
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
- -------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments in short-term municipal securities, at amortized cost, which
approximates market value (note 1) $466,159,889
Cash 4,170,442
Receivables:
Interest 2,545,296
Investments sold 1,935,328
Other assets 17,258
- -------------------------------------------------------------------------------------------
Total assets 474,828,213
- -------------------------------------------------------------------------------------------
LIABILITIES
Accrued expenses:
Management fees (note 3) 149,941
Other 60,360
Dividends payable 1,116,193
- -------------------------------------------------------------------------------------------
Total liabilities 1,326,494
- -------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding (note 4) $473,501,719
- -------------------------------------------------------------------------------------------
Shares outstanding 473,501,719
- -------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
(net assets divided by shares outstanding) $1.00
- -------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
___
28
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 28, 1998
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
- ----------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $18,509,473
- ---------------------------------------------------------------------------------------
EXPENSES
Management fees (note 3) 1,993,848
Shareholders' servicing agent fees and expenses 22,289
Custodian's fees and expenses 73,374
Directors' fees and expenses (note 3) 8,593
Professional fees 42,468
Shareholders' reports - printing and mailing expenses 4,886
Federal and state registration fees 35,510
Other expenses 39,609
- ---------------------------------------------------------------------------------------
Total expenses 2,220,577
- ---------------------------------------------------------------------------------------
Net investment income 16,288,896
Net realized gain (loss) from investment transactions (notes 1 and 2) (2,131)
- ---------------------------------------------------------------------------------------
Net increase in net assets from operations $16,286,765
- ---------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
___
29
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
YEAR ENDED YEAR ENDED
2/28/98 2/28/97
- ------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $16,288,896 $16,624,557
Net realized gain (loss) from investment transactions
(notes 1 and 2) (2,131) 21,201
- -------------------------------------------------------------------------------------
Net increase in net assets from operations 16,286,765 16,645,758
- -------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1) (16,286,765) (16,645,758)
- -------------------------------------------------------------------------------------
SHARE TRANSACTIONS
(at constant net asset value of $1 per share)
(note 1)
Net proceeds from sale of shares 2,020,884,303 2,793,785,234
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 6,718,107 6,431,423
- -------------------------------------------------------------------------------------
2,027,602,410 2,800,216,657
- -------------------------------------------------------------------------------------
Cost of shares redeemed (2,069,503,749) (2,894,867,006)
- -------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from share transactions (41,901,339) (94,650,349)
Net assets at the beginning of year 515,403,058 610,053,407
- -------------------------------------------------------------------------------------
Net assets at the end of year $473,501,719 $515,403,058
- -------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
___
30
<PAGE>
Notes to Financial Statements
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
1. General Information and Significant Accounting Policies
The Nuveen Tax-Exempt Money Market Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as an open-end, diversified management
investment company. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements in
accordance with generally accepted accounting principles.
Securities Valuation
The Fund invests in short-term municipal securities maturing within one year
from the date of acquisition. Securities with a maturity of more than one year
in all cases have variable rate and demand features qualifying them as short-
term securities and are valued at amortized cost. On a dollar-weighted basis,
the average maturity of all such securities must be 90 days or less (at February
28, 1998, the dollar-weighted average life was 44 days).
Securities Transactions
Securities transactions are recorded on a trade date basis. 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 have extended settlement periods. Any securities so purchased are subject to
market fluctuation during this period. The Fund has instructed the custodian to
segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
February 28, 1998, there were no such outstanding purchase commitments.
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts.
Dividends and Distributions to Shareholders
Tax-exempt net investment income, adjusted for realized short-term gains and
losses on investment transactions, is declared as a dividend to shareholders of
record as of the close of each business day and payment is made or reinvestment
is credited to shareholder accounts after month-end.
Federal Income Taxes
The Fund intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its tax-
exempt net investment income, including any net realized capital gains from
investment transactions. Therefore, no federal income tax provision is required.
Furthermore, the 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 shareholders of the Fund. All
income dividends paid during the fiscal year ended February 28, 1998, have been
designated Exempt Interest Dividends. Net realized capital gain distributions,
if any, are subject to federal taxation.
Insurance Commitments
The Fund has obtained commitments (each a "Commitment") from Municipal Bond
Investors Assurance Corporation ("MBIA") with respect to certain designated
bonds held by the Fund for which credit support is furnished by banks ("Approved
Banks") approved by MBIA under its established credit approval standards. Under
the terms of a Commitment, if the Fund were to determine that certain adverse
circumstances relating to the financial condition of the Approved Banks had
occurred, the Fund could cause MBIA to issue a "while-in-fund" insurance policy
covering the underlying bonds; after time and subject to further terms and
conditions, the Fund could obtain from MBIA an "insured-to-maturity" insurance
policy as to the covered bonds. Each type of insurance policy would insure
payment of interest on the bonds and payment of principal at maturity. Although
such insurance would not guarantee the market value of the bonds or the value of
the Fund's shares, the Fund believes that its ability to obtain insurance for
such bonds under such adverse circumstances will enable the Fund to hold or
dispose of such bonds at a price at or near their par value.
Derivative Financial Instruments
The Fund may invest in certain derivative financial instruments including
futures, forward, swap, and option contracts, and other financial instruments
with similar characteristics. Although the Fund is authorized to invest in such
financial instruments, and may do so in the future, it did not make any such
investments during the fiscal year ended February 28, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
------
31
<PAGE>
Notes to Financial Statements - continued
February 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
2. Securities Transactions
Purchases and sales (including maturities) of investments in short-term
municipal securities during the fiscal year ended February 28, 1998, aggregated
$1,543,700,587 and $1,590,684,150, respectively.
At February 28, 1998, the cost of investments owned for federal income tax
purposes was the same as the cost for financial reporting purposes.
3. Management Fee and Other Transactions with Affiliates
Under the Fund's investment management agreement with Nuveen Advisory Corp. (the
"Adviser"), a wholly owned subsidiary of John Nuveen & Co. Incorporated, the
Fund pays an annual management fee, payable monthly, as follows:
<TABLE>
<CAPTION>
Average daily net asset value Management fee
----------------------------------------------------------------------------
<S> <C>
For the first $500 million .400 of 1%
For the next $500 million .375 of 1
For the next $1 billion .350 of 1
For net assets over $2 billion .325 of 1
----------------------------------------------------------------------------
</TABLE>
The management fee is reduced by, or the Adviser assumes certain Fund expenses
in an amount necessary to prevent the Fund's total expenses (including the
Adviser's fee, but excluding interest, taxes, fees incurred in acquiring and
disposing of portfolio securities and, to the extent permitted, extraordinary
expenses) in any fiscal year from exceeding .45 of 1% of the average daily net
asset value of the Fund.
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Fund pays no
compensation directly to those of its Directors who are affiliated with the
Adviser or to its officers, all of whom receive remuneration for their services
to the Fund from the Adviser or its affiliates.
4. Composition of Net Assets
At February 28, 1998, the Fund had 5 billion shares of $.01 par value stock
authorized. Net assets consisted of $473,501,719 paid-in capital.
5. Investment Composition
At February 28, 1998, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------
Utilities 15%
Tax Obligation/General 14
Health Care 13
Tax Obligation/Limited 11
Long Term Care 9
Housing/Multifamily 9
Water and Sewer 6
Education and Civic Organizations 5
Transportation 4
Financials 3
Capital Goods 3
Other 8
- ----------------------------------------------------------------------------
100%
- ----------------------------------------------------------------------------
</TABLE>
At February 28, 1998, 89% of the investments owned by the Fund have credit
enhancements (letters of credit, guarantees or insurance) issued by third party
domestic or foreign banks or other institutions (see note 1).
For additional information regarding each investment security, refer to the
Portfolio of Investments.
-----
32
<PAGE>
Financial Highlights
Nuveen Tax-Exempt Money Market Fund, Inc.
Selected data for a share outstanding throughout
each period is as follows:
<TABLE>
<CAPTION>
Operating performance Less distributions
--------------------- ------------------
Net
realized
Net and Dividends Net
asset unrealized from tax- asset
value Net gain (loss) exempt net Distributions value
Year ended beginning investment from investment from capital end of
February 28/29, of period income investments income gains period
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1998 $1.00 $.03 $ -- $(.03) $ -- $1.00
1997 1.00 .03 -- (.03) -- 1.00
1996 1.00 .03 -- (.03) -- 1.00
1995 1.00 .03 -- (.03) -- 1.00
1994 1.00 .02 -- (.02) -- 1.00
1993 1.00 .03 -- (.03) -- 1.00
1992 (b) 1.00 .02 -- (.02) -- 1.00
1991 (c) 1.00 .05 -- (.05) -- 1.00
1990 (c) 1.00 .06 -- (.06) -- 1.00
1989 (c) 1.00 .06 -- (.06) -- 1.00
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental data
------------------------
Ratio
Total of net
return Ratio of investment
on net Net assets expenses income to
Year ended asset end of period to average average
February 28/29, value(a) (in thousands) net assets net assets
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 3.27% $ 473,502 .44% 3.26%
1997 3.11 515,403 .44 3.10
1996 3.42 610,053 .44 3.43
1995 2.69 759,244 .44 2.65
1994 2.04 975,833 .42 2.04
1993 2.57 1,597,014 .40 2.58
1992 (b) 1.56 2,332,021 .39* 3.71*
1991 (c) 4.85 1,927,583 .38 4.81
1990 (c) 5.75 1,800,966 .40 5.74
1989 (c) 6.00 1,756,725 .39 6.02
- ---------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
(a) Total returns are calculated on net asset value and are not
annualized.
(b) For the five months ended February 29.
(c) For the fiscal year ended September 30.
- -----
33
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of
Nuveen Tax-Exempt Money Market Fund, Inc.:
We have audited the accompanying statement of net assets of the Nuveen Tax-
Exempt Money Market Fund, Inc. (a Maryland corporation), including the portfolio
of investments, as of February 28, 1998, 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, 1998, 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 the Nuveen
Tax-Exempt Money Market Fund, Inc. as of February 28, 1998, the results of its
operations for the year then ended, the changes in its 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 15, 1998
- ------
34
<PAGE>
- ------
35
<PAGE>
Building Better Portfolios with Nuveen
Reducing the impact of taxes and moderating risk are
important goals for many risk-sensitive investors seeking to
build better portfolios. For these investors, a tax-
efficient, risk-resistant investment portfolio often forms
the foundation of a carefully crafted financial plan for
building and sustaining wealth. Nuveen is committed to
providing investors and their financial advisers with a range
of products and investment tools to help build better
portfolios.
Nuveen Family Mutual Funds
of Mutual Funds
Nuveen offers a Nuveen Mutual Funds offer investors access to the Nuveen
variety of funds family of premier advisers, including Nuveen Advisory Corp.,
designed to help Institutional Capital Corp. and Rittenhouse Financial
you reach your Services. Our equity, balanced and income funds seek to
financial goals. provide consistent performance, time-tested strategies to
Growth reduce risk and experienced, professional management.
Nuveen Rittenhouse
Growth Fund Private Asset Management
Growth and Income
Growth and Rittenhouse Financial Services and Nuveen Asset Management
Income Stock Fund offer comprehensive, customized investment management
Balanced Stock solutions to investors with assets of $250,000 or more. A
and Bond Fund range of actively managed growth, balanced and municipal
Balanced Municipal income-oriented portfolios are available, all based upon a
and Stock Fund disciplined investment philosophy.
Tax-Free Income
National Funds Unit Trusts
Long-Term
Insured Nuveen Unit Trusts are fixed portfolios of quality securities
Intermediate-Term that are a convenient, attractive alternative to purchasing
Limited Term individual securities. They provide low-cost diversification
State Funds to reduce risk, experienced, professional security selection
Alabama and surveillance, and daily liquidity at that day's net asset
Arizona value for quick access to your assets.
California
Colorado Exchange-Traded Funds
Connecticut
Florida Nuveen Exchange-Traded Funds offer investors actively managed
Georgia portfolios of investment-grade quality municipal bonds. The
Kansas fund shares are listed and traded on the New York and
Kentucky American stock exchanges. Exchange-traded funds provide the
Louisiana investment convenience, price visibility and liquidity of
Maryland common stocks.
Massachusetts
Michigan MuniPreferred(R)
Missouri
New Jersey Nuveen MuniPreferred offers investors a AAA-rated investment
New Mexico with an attractive tax-free yield for the cash reserves
New York portion of an investment portfolio. MuniPreferred shares are
North Carolina backed 2-to-1 by the long-term portfolios of Nuveen dual-
Ohio class exchange-traded funds and are available for national as
Pennsylvania well as a wide variety of state-specific portfolios.
South Carolina
Tennessee
Virginia
Wisconsin
___
36
<PAGE>
Fund Information
Board of Directors Custodian
Robert P. Bremner The Chase Manhattan Bank
Lawrence H. Brown 4 New York Plaza
Anthony T. Dean New York, NY 10004-2413
Anne E. Impellizzeri (800) 257-8787
Peter R. Sawers
William J. Schneider Transfer Agent,
Timothy R. Schwertfeger Shareholder Services and
Judith M. Stockdale Dividend Disbursing Agent
Shareholder Services, Inc.
Fund Manager Nuveen Investor Services
Nuveen Advisory Corp. P.O. Box 5330
333 West Wacker Drive Denver, CO 80217-5330
Chicago, IL 60606 (800) 621-7227
Legal Counsel
Fried, Frank, Harris,
Shriver & Jacobson
Washington, D.C.
Public Accountants
Arthur Andersen LLP
Chicago, IL
___
37
<PAGE>
Serving Investors for Generations
[PHOTO OF JOHN NUVEEN, SR. APPEARS HERE]
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today, we offer a broad range of
investments designed for risk-sensitive individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them maintain the lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of products and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and income funds, along with our unit trusts and private asset
management, can form the foundation of a tax-efficient and risk-resistant
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you build and sustain your long-term financial
security. Or call us at (800) 621-7227 for more information, including a
prospectus where applicable. Please read that information carefully before you
invest.
[LOGO OF NUVEEN]
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
Statement of Additional Information
April 28, 1998
Nuveen Tax-Exempt Money Market Fund, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
Nuveen Tax-Exempt Money Market Fund, Inc. (the "Fund") is an open-end, diversi-
fied management investment company. This Statement of Additional Information is
not a prospectus. A prospectus may be obtained from the Fund's distributor,
John Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illinois 60606.
This Statement of Additional Information relates to, and should be read in con-
junction with, the Prospectus dated April 28, 1998.
<TABLE>
<S> <C>
Table of Contents Page
- ------------------------------------------------------------
Fundamental Policies and Investment Portfolio 2
- ------------------------------------------------------------
Management 9
- ------------------------------------------------------------
Investment Adviser and Investment Management Agreement 13
- ------------------------------------------------------------
Portfolio Transactions 14
- ------------------------------------------------------------
Net Asset Value 15
- ------------------------------------------------------------
Amortized Cost Valuation 15
- ------------------------------------------------------------
Tax Matters 17
- ------------------------------------------------------------
Principal Underwriter and Distributor 20
- ------------------------------------------------------------
Yield Information 20
- ------------------------------------------------------------
Independent Public Accountants and Custodian 23
- ------------------------------------------------------------
</TABLE>
Investment Adviser Transfer and Shareholder
Principal Underwriter Nuveen Advisory Corp., Services Agent
John Nuveen & Co. Subsidiary of Shareholder Services,
Incorporated John Nuveen & Co. Inc.
Incorporated P.O. Box 5330
Chicago: 333 West Wacker Drive Denver, Colorado 80217-
333 West Wacker Drive Chicago, Illinois 60606 5330
Chicago, Illinois 60606
(312) 917-7700 Custodian Independent Public
Accountants
The Chase Manhattan Bank
New York: 4 New York Plaza for the Fund
10 East 50th Street New York, New York 10004 Arthur Andersen LLP
New York, New York 10022 33 West Monroe Street
(212) 207-2000 Chicago, Illinois 60603
<PAGE>
FUNDAMENTAL POLICIES AND INVESTMENT PORTFOLIO
FUNDAMENTAL POLICIES
The Fund's investment objective and certain fundamental policies are described
in the Prospectus. The Fund, as a fundamental policy, may not:
(1) Invest in securities other than Municipal Obligations and temporary in-
vestments as those terms are defined in the Prospectus;
(2) Invest more than 5% of its total assets in securities of any one issuer,
excluding the United States government, its agencies and instrumentalities;
(3) Borrow money, except from banks for temporary or emergency purposes and
not for investment purposes and then only in an amount not exceeding (a) 10%
of the value of the Fund's total assets at the time of borrowing or (b) one-
third of the value of the Fund's total assets including the amount borrowed in
order to meet redemption requests which might otherwise require the untimely
disposition of securities. While any such borrowings are outstanding, no net
purchases of investment securities will be made by the Fund. If due to market
fluctuations or other reasons the value of the Fund's assets falls below 300%
of its borrowings, the Fund will reduce its borrowings within 3 business days.
To do this, the Fund may have to sell a portion of its investments at a time
when it may be disadvantageous to do so;
(4) Pledge, mortgage or hypothecate its assets, except that, to secure
borrowings permitted by subparagraph (3) above, it may pledge securities hav-
ing 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
except to the extent such issuance might be involved with respect to
borrowings described under item (3) above;
(6) Underwrite any issue of securities, except to the extent that the purchase
of Municipal Obligations in accordance with the Fund's investment objective,
policies, and limitations, may be deemed to be an underwriting;
(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 its 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 trans-
actions;
(11) 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;
2
<PAGE>
(12) Invest more than 25% of its assets in the securities of issuers in any
single industry; provided, however, that such limitations shall not be applica-
ble to the purchase of Municipal Obligations and obligations issued or guaran-
teed by the U.S. government, its agencies or instrumentalities;
(13) Purchase or retain the securities of any issuer other than the securities
of the Fund if, to the Fund's knowledge, those directors 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
(11) above, an issuer shall be deemed a separate issuer when its assets and
revenues are separate from other governmental entities and its securities are
backed only by its assets and revenues. Similarly, in the case of a non-govern-
mental user, such as an industrial corporation or a privately owned or operated
hospital, if the security is backed only by the assets and revenues of the non-
governmental user then such non-governmental user would be deemed to be the
sole issuer. Where a security is also backed by the enforceable obligations of
a superior or unrelated governmental entity or other entity it shall be in-
cluded in the computation of securities owned that are issued by such govern-
mental entity or other entity.
If, however, a security is guaranteed by a governmental entity or some other
entity (other than a bond insurer), such as a bank guarantee or letter of cred-
it, such a guarantee or letter of credit would be considered a separate secu-
rity and would be treated as an issue of such government, other entity or bank.
The Fund's present policy, which is not a fundamental policy, is that it will
not hold securities of a single bank, including securities backed by a letter
of credit of such bank, if such holdings would exceed 10% of the total assets
of the Fund.
The foregoing fundamental investment policies, together with the Fund's invest-
ment objective, and other fundamental policies, cannot be changed without ap-
proval by holders of a "majority of the Fund's outstanding voting shares." As
defined in the Investment Company Act of 1940, this means the vote of (i) 67%
or more of the shares present at a meeting, if the holders of more than 50% of
the shares are present or represented by proxy, or (ii) more than 50% of the
shares, whichever is less. The foregoing restrictions and limitations will ap-
ply only at the time of purchase of securities and will not be considered vio-
lated unless an excess or deficiency occurs or exists immediately after and as
a result of an acquisition of securities, unless otherwise indicated.
PORTFOLIO SECURITIES
As described in the Prospectus, the Fund invests primarily in a diversified
portfolio of Municipal Obligations consisting of money market instruments is-
sued by governmental authorities. In general, Municipal Obligations include
debt obligations issued to obtain funds for various public purposes, including
construction of a wide range of public facilities. Industrial development bonds
and pollution control bonds that are issued by or on behalf of public authori-
ties to finance various privately-operated facilities are included within the
term Municipal Obligations if the interest paid thereon is exempt from federal
income tax.
3
<PAGE>
The following is a more complete description of certain short-term Municipal
Obligations in which the Fund may invest:
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. TANs are usually general obliga-
tions 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 delinquencies,
could adversely affect the issuer's ability to meet its obligations on out-
standing 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 governmental 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.
Variable and Floating Rate Instruments--Certain Municipal Obligations, certain
instruments issued, guaranteed or sponsored by the U.S. government or its
agencies, and certain debt instruments issued by domestic banks or corpora-
tions, may carry variable or floating rates of interest. Such instruments bear
interest at rates which are not fixed, but which vary with changes in speci-
fied market rates or indices, such as a bank prime rate or tax-exempt money
market index. Variable rate notes are adjusted to current interest rate levels
at certain specified times, such as every 30 days, as set forth in the instru-
ment. A floating rate note adjusts automatically whenever there is a change in
its base interest rate adjustor, e.g., a change in the prime lending rate or
specified interest rate indices. Typically such instruments carry demand fea-
tures permitting the Fund to recover the full principal amount thereof upon
specified notice.
One form of variable or floating rate instrument consists of an underlying
fixed rate municipal bond that is subject to a third party demand feature or
"tender option." The holder of the bond would pay a
4
<PAGE>
"tender fee" to the third party tender option provider, the amount of which
would be periodically adjusted so that the bond/tender option combination would
reasonably be expected to have a market value that approximates the par value
of the bond. The bond/tender option combination would therefore be functionally
equivalent to ordinary variable or floating rate obligations as described
above, and the Fund may purchase such obligation subject to certain conditions
specified by the Securities and Exchange Commission.
The Fund's right to obtain payment at par on a demand instrument upon demand
could be adversely affected by events occurring between the date the Fund
elects to tender the instrument and the date proceeds are due. Nuveen Advisory
will monitor on an ongoing basis the pricing, quality and liquidity of such in-
struments and will similarly monitor the ability of an obligor under the demand
arrangement, including demand obligors as to instruments supported by bank let-
ters of credit or guarantees, to pay principal and interest on demand. Although
the ultimate maturity of such variable rate obligations may exceed one year,
the Fund will treat the maturity of each variable rate demand obligation, for
purposes of computing its dollar-weighted average portfolio maturity, as the
longer of (i) the notice period required before the Fund is entitled to payment
of the principal amount through demand, or (ii) the period remaining until the
next interest rate adjustment.
The Fund may also obtain standby commitments with respect to Municipal Obliga-
tions. Under a standby commitment (often referred to as a put), the party issu-
ing the commitment agrees to purchase at the Fund's option the Municipal Obli-
gation at an agreed-upon price on certain dates or within a specific period.
Since the value of a standby commitment depends in part upon the ability of the
issuing party to meet its purchase obligations thereunder, the Fund will enter
into standby commitments only with parties which have been evaluated by Nuveen
Advisory and, in the opinion of Nuveen Advisory, present minimal credit risks.
The amount payable to the Fund upon its exercise of a standby commitment would
be (1) the acquisition cost of the Municipal Obligations (excluding any accrued
interest that the Fund paid on acquisition), less any amortized market premium
or plus any amortized market or original issue discount during the period the
Fund owned the security, plus (2) all interest accrued on the security since
the last interest payment date during the period the security was owned by the
Fund. The Fund's right to exercise standby commitments held by it will be un-
conditional and unqualified. The acquisition of a standby commitment will not
affect the valuation of the underlying security, which will continue to be val-
ued in accordance with the amortized cost method. The standby commitment itself
will be valued at zero in determining net asset value. The Fund may purchase
standby commitments for cash or pay a higher price for portfolio securities
which are acquired subject to such a commitment (thus reducing the yield to ma-
turity otherwise available for the same securities). The maturity of a Munici-
pal Obligation purchased by the Fund will not be considered shortened by any
standby commitment to which such security is subject. Although the Fund's
rights under a standby commitment would not be transferable, the Fund could
sell Municipal Obligations which were subject to a standby commitment to a
third party at any time.
5
<PAGE>
WHEN-ISSUED SECURITIES
As described under "Investment Policies of the Portfolio--Municipal Obliga-
tions" in the Prospectus, the Fund may purchase and sell Municipal Obligations
on a when-issued or delayed delivery basis. When-issued and delayed delivery
transactions arise when securities are purchased or sold with payment and de-
livery beyond the regular settlement date. (When-issued transactions normally
settle within 30-45 days.) On such transactions the payment obligation 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 securities 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 purchase 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 deter-
mining its net asset value. Likewise, at the time the Fund makes the commitment
to sell a Municipal Obligation on a delayed delivery basis, it will record the
transaction and include the proceeds to be received in determining its net as-
set value; accordingly, any fluctuations in the value of the Municipal Obliga-
tion 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 com-
mitments to purchase when-issued or delayed delivery securities, such assets to
be segregated by the Custodian specifically for the settlement of such commit-
ments. The Fund will only make commitments to purchase Municipal Obligations on
a when-issued or delayed delivery basis with the intention of actually acquir-
ing the securities, but the Fund reserves the right to sell these securities
before the settlement date if it is deemed advisable. If a when-issued security
is sold before delivery any gain or loss would not be tax-exempt.
TEMPORARY INVESTMENTS
The Prospectus discusses briefly the Fund's ability to invest a portion of its
assets on a temporary basis or for defensive purposes in taxable "temporary in-
vestments." As stated in the Prospectus, the Fund has not invested in and has
no present intention to invest in such temporary investments. In any event,
temporary investments will not exceed 20% of the Fund's assets except when made
for defensive purposes. The Fund will invest only in temporary investments
which, in the opinion of Nuveen Advisory, are of "high grade" quality and have
remaining maturities of one year or less. Temporary investments include obliga-
tions of the United States government, its agencies or instrumentalities; debt
securities of issuers having, at the time of purchase, a quality rating within
the two highest grades by either Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("S&P") (Aaa or Aa, or AAA or AA, respectively);
commercial paper rated in the highest grade by either of such rating services
(Prime-1 or A-1, respectively); certificates of deposit of domestic banks with
assets of $1 billion or more; and Municipal Obligations and U.S. government ob-
ligations subject to short-term repurchase agreements.
Subject to the foregoing limitations, the Fund may invest in the following tem-
porary investments:
U.S. Government Direct Obligations are issued by the United States Treasury and
include bills, notes, and bonds.
6
<PAGE>
- --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 ma-
turities of one to seven years.
- --Treasury bonds are longer-term interest-bearing obligations with original ma-
turities of 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 397 days
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 determines the
yield during the Fund's holding period. Repurchase agreements are considered to
be loans collateralized by the underlying security that is the subject of the
repurchase contract. The Fund will only enter into repurchase agreements with
dealers, domestic banks or recognized financial institutions that in the opin-
ion of Nuveen Advisory represent minimal credit risk. The risk to the Fund is
limited to the ability of the issuer to pay the agreed upon repurchase price on
the delivery date; however, although the value of the underlying collateral at
the time the transaction is entered into always equals or exceeds the agreed
upon repurchase price, if the value of the collateral declines, there is a risk
of loss of both principal and interest. In the event of default, the collateral
may be sold but the Fund might incur a loss if the value of the collateral de-
clines, and might incur disposition costs or experience
7
<PAGE>
delays in connection with liquidating the collateral. In addition, if bank-
ruptcy proceedings are commenced with respect to the seller of the security,
realization upon the collateral by the Fund may be delayed or limited. Nuveen
Advisory will monitor the value of the collateral at the time the transaction
is entered into and at all times subsequent during the term of the repurchase
agreement in an effort to determine that the value always equals or exceeds the
agreed upon repurchase price. In the event the value of the collateral declines
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.
Variable and Floating Rate Instruments--See description on page 4.
RATINGS OF INVESTMENTS
The two highest ratings of Moody's for Municipal Obligations are Aaa and Aa.
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 Municipal Obligations.
The Aaa and Aa rated Municipal Obligations comprise what are generally known as
"high grade bonds." Moody's bond rating symbols may contain numerical 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 generic rating category.
The two highest ratings of S&P for Municipal Obligations are AAA and AA. Munic-
ipal Obligations rated AAA have an extremely strong capacity to pay principal
and interest. The rating of AA indicates that capacity to pay principal and in-
terest is very strong and such bonds differ from AAA issues only in small de-
gree.
The highest rating of Moody's and S&P for federally tax-exempt short-term loans
and notes is VMIG-1 or MIG-1 and SP-1, respectively. Obligations designated
VMIG-1 and MIG-1 are the best quality, enjoying strong protection from estab-
lished cash flows for their servicing or from established and broad-based ac-
cess to the market for refinancing, or both. The designation SP-1 indicates a
very strong or strong capacity to pay principal and interest.
The Fund's ability to purchase commercial paper of tax-exempt and corporate is-
suers is limited to commercial paper rated Prime-1 by Moody's or A-1 by S&P.
The rating Prime-1 (P-1) is the highest commercial paper rating assigned by
Moody's. Issuers rated P-1 have a superior capacity for repayment of short-term
obligations normally evidenced by the following characteristics: leading market
positions in well-established industries; high rates of return on funds em-
ployed; conservative capitalization structures with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed finan-
cial charges and high internal cash generation; well-established access to a
range of financial markets and assured sources of alternative liquidity. The
designation A-1 indicates that the degree of safety regarding timely payment is
very strong.
8
<PAGE>
MANAGEMENT
The management of the Fund, including general supervision of the duties per-
formed by Nuveen Advisory under the Investment Management Agreement, is the re-
sponsibility of its Board of Directors. There are eight directors of the Fund,
two of whom are "interested persons" (as the term "interested persons" is de-
fined in the Investment Company Act of 1940) and six of whom are "disinterested
persons." The names and business addresses of the directors and officers of the
Fund and their principal occupations and other affiliations during the past
five years are set forth below, with those directors who are "interested per-
sons" of the Fund indicated by an asterisk.
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND ADDRESS AGE OFFICES WITH FUND DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------
<C> <C> <C> <S>
Timothy R. Schwertfeger* 49 Chairman of the Board Chairman since July 1,
333 West Wacker Drive and Director 1996 of The John Nuveen
Chicago, IL 60606 Company, John Nuveen &
Co. Incorporated, Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp., prior
thereto Executive Vice
President and Director
of The John Nuveen
Company and John Nuveen
& Co. Incorporated;
Director of Nuveen
Advisory Corp. (since
1992) and Nuveen
Institutional Advisory
Corp. (since October
1992); Chairman and
Director (since January
1997) of Nuveen Asset
Management, Inc.;
Director (since 1996) of
Institutional Capital
Corporation.
- --------------------------------------------------------------------------------
Anthony T. Dean* 53 President and President since July 1,
333 West Wacker Drive Director 1996 of The John Nuveen
Chicago, IL 60606 Company, John Nuveen &
Co. Incorporated, Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp.; prior
thereto, Executive Vice
President and
Director of The John
Nuveen Company, John
Nuveen & Co.
Incorporated, Nuveen
Advisory Corp. (since
October 1992) and Nuveen
Institutional Advisory
Corp. (since October
1992); President and
Director (since January
1997) of Nuveen Asset
Management, Inc.;
Chairman and Director
(since 1997) of
Rittenhouse Financial
Services, Inc.
- --------------------------------------------------------------------------------
Robert P. Bremner 57 Director Private Investor and
3725 Huntington Street, N.W. Management Consultant.
Washington, D.C. 20015
- --------------------------------------------------------------------------------
Lawrence H. Brown 63 Director Retired (August 1989) as
201 Michigan Avenue Senior Vice President of
Highwood, IL 60040 The Northern Trust
Company
- --------------------------------------------------------------------------------
Anne E. Impellizerri 65 Director President and Chief
3 West 29th Street Executive Officer of
New York, NY 10001 Blanton-Peale,
Institutes of Religion
and Health (since
December 1990).
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH FUND DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------
<C> <C> <C> <S>
Peter R. Sawers 65 Director Adjunct Professor of
22 The Landmark Business and Economics,
Northfield, IL 60093 University of Dubuque,
Iowa; Adjunct Professor,
Lake Forest Graduate
School of Management,
Lake Forest, Illinois.
- --------------------------------------------------------------------------------
William J. Schneider 53 Director Senior Partner, Miller-
4000 Miller-Valentine Ct. Valentine Partners, Vice
P.O. Box 744 President, Miller-
Dayton, OH 45401 Valentine Realty, Inc.
- --------------------------------------------------------------------------------
Judith M. Stockdale 50 Director Executive Director,
35 E. Wacker Drive Gaylord and Dorothy
Suite 2600 Donnelley Foundation
Chicago, IL 60601 (since 1994); prior
thereto, Executive
Director, Great Lakes
Protection Fund (from
1990 to 1994).
- --------------------------------------------------------------------------------
Bruce P. Bedford 58 Executive Vice President Executive Vice President
333 West Wacker Drive of John Nuveen & Co.
Chicago, IL 60606 Incorporated, Nuveen
Advisory Corp. and
Nuveen
Institutional Advisory
Corp. (since January
1997); prior thereto,
Chairman and CEO of
Flagship Resources Inc.
and Flagship Financial
Inc. and the Flagship
funds.
- --------------------------------------------------------------------------------
Michael S. Davern 40 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 January 1997); prior
thereto, Vice President
and Portfolio Manager
(since September 1991)
of Flagship Financial.
- --------------------------------------------------------------------------------
Lorna C. Ferguson 52 Vice President Vice President of John
333 West Wacker Drive Nuveen & Co.
Chicago, IL 60606 Incorporated; Vice
President (since January
1998) of Nuveen Advisory
Corp. and Nuveen
Institutional Advisory
Corp.
- --------------------------------------------------------------------------------
William M. Fitzgerald 34 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 December 1995);
Assistant Vice President
of Nuveen Advisory Corp.
(from September 1992 to
December 1995), prior
thereto Assistant
Portfolio Manager of
Nuveen Advisory Corp.
- --------------------------------------------------------------------------------
Kathleen M. Flanagan 50 Vice President Vice President of John
333 West Wacker Drive Nuveen & Co.
Chicago, IL 60606 Incorporated.
- --------------------------------------------------------------------------------
J. Thomas Futrell 42 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp.
Chicago, IL 60606
- --------------------------------------------------------------------------------
Richard A. Huber 35 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since
Chicago, IL 60606 January 1997); prior
thereto, Vice President
and Portfolio Manager of
Flagship Financial.
- --------------------------------------------------------------------------------
Steven J. Krupa 40 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp.
Chicago, IL 60606
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH FUND DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------
<C> <C> <C> <S>
Anna R. Kucinskis 52 Vice President Vice President of John Nuveen
333 West Wacker Drive & Co. Incorporated.
Chicago, IL 60606
- -------------------------------------------------------------------------------
Larry W. Martin 46 Vice President and Vice President, Assistant
333 West Wacker Drive Assistant Secretary Secretary and Assistant
Chicago, IL 60606 General Counsel of John Nuveen
& Co. Incorporated; Vice
President (since May 1993) and
Assistant Secretary of Nuveen
Advisory Corp.; Vice President
(since May 1993) and Assistant
Secretary of Nuveen
Institutional Advisory Corp.;
Assistant Secretary of The
John Nuveen Company.
- -------------------------------------------------------------------------------
Edward F. Neild, IV 32 Vice President Vice President (since
333 West Wacker Drive September 1996), previously
Chicago, IL 60606 Assistant Vice President
(since December 1993) of
Nuveen Advisory Corp.,
Portfolio Manager prior
thereto (since January 1992);
Vice President (since
September 1996), previously
Assistant Vice President
(since May 1995) of Nuveen
Institutional Advisory Corp.,
Portfolio Manager prior
thereto.
- -------------------------------------------------------------------------------
Walter K. Parker 49 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. (since January
Chicago, IL 60606 1997); prior thereto, Vice
President and Portfolio
Manager (since July 1994) of
Flagship Financial; Portfolio
Manager and CIO Trust Investor
for PNC Bank.
- -------------------------------------------------------------------------------
Stephen S. Peterson 40 Vice President Vice President (since
333 West Wacker Drive September 1997), previously
Chicago, IL 60606 Assistant Vice President
(since September 1996) of
Nuveen Advisory Corp.,
Portfolio Manager prior
thereto.
- -------------------------------------------------------------------------------
O. Walter Renfftlen 58 Vice President and Vice President and Controller
333 West Wacker Drive Controller of The John Nuveen Company,
Chicago, IL 60606 John Nuveen & Co.
Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.
- -------------------------------------------------------------------------------
Stuart W. Rogers 41 Vice President Vice President of John Nuveen
333 West Wacker Drive & Co. Incorporated.
Chicago, IL 60606
- -------------------------------------------------------------------------------
Thomas C. Spalding, Jr. 46 Vice President Vice President of Nuveen
333 West Wacker Drive Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.;
Chartered Financial Analyst.
- -------------------------------------------------------------------------------
H. William Stabenow 63 Vice President and Vice President and Treasurer
333 West Wacker Drive Treasurer of The John Nuveen Company,
Chicago, IL 60606 John Nuveen & Co.
Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.
- -------------------------------------------------------------------------------
Jan E. Terbrueggen 42 Vice President Vice President Nuveen Advisory
333 West Wacker Drive Corp. (since January 1997);
Chicago, IL 60606 prior thereto, Vice President
and Portfolio Manager of
Flagship Financial.
- -------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH FUND DURING PAST FIVE YEARS
- -----------------------------------------------------------------------------------------
<C> <C> <C> <S>
Gifford R. Zimmerman 41 Vice President and Vice President (since September 1992),
333 West Wacker Drive Assistant Secretary Assistant Secretary and Associate General
Chicago, IL 60606 Counsel formerly Assistant General Counsel
of John Nuveen & Co. Incorporated; Vice
President (since May 1993) and Assistant
Secretary of Nuveen Advisory Corp.; Vice
President (since May 1993) and Assistant
Secretary of Nuveen Institutional Advisory
Corp.
- --------------------------------------------------------------------------------
</TABLE>
Anthony T. Dean, Timothy R. Schwertfeger and Peter R. Sawers serve as members
of the Executive Committee of the Board of Directors. The Executive Committee,
which meets between regular meetings of the Board of Directors, is authorized
to exercise all of the powers of the Board of Directors.
The directors of the Fund, are directors, or trustees, as the case may be, of
42 Nuveen open-end portfolios and 52 Nuveen closed-end funds.
The following table sets forth compensation paid by the Nuveen Tax-Exempt Money
Market Fund, Inc. during the fiscal year ended February 28, 1998 to each of the
directors. The Nuveen Tax-Exempt Money Market Fund, Inc. has no retirement or
pension plans. The officers and directors affiliated with Nuveen serve without
any compensation from the Nuveen Tax-Exempt Money Market Fund, Inc.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM THE FUND
COMPENSATION AND FUND COMPLEX
NAME OF DIRECTOR FROM THE FUND PAID TO DIRECTORS
- --------------------------------------------------------------------------------
<S> <C> <C>
Anthony T. Dean.............................. $ 0 $ 0
Timothy R. Schwertfeger...................... 0 0
Robert P. Bremner............................ 1,378 58,780
Lawrence H. Brown............................ 1,444 76,000
Anne E. Impellizzeri......................... 1,356 71,750
Margaret K. Rosenheim........................ 1,072(/1/) 47,405(/2/)
Peter R. Sawers.............................. 1,356 71,750
William J. Schneider......................... 1,378 58,780
Judith M. Stockdale.......................... 626 32,000(/3/)
</TABLE>
(1) Includes $181 in interest earned on deferred compensation from prior years;
former director, retired July, 1997.
(2) Includes $1,655 in interest earned on deferred compensation from prior
years; former director, retired July, 1997.
(3) First payment was in July, 1997.
Each director who is not affiliated with Nuveen or Nuveen Advisory will receive
a fee. The Fund requires no employees other than its officers, all of whom are
compensated by Nuveen.
On March 31, 1998, the officers and directors of the Fund as a group owned less
than 1% of the outstanding shares of the Fund.
12
<PAGE>
The following table sets forth the percentage of ownership of each person who
as of March 31, 1998 owns of record or is known by the Registrant to own of
record 5% or more of the Fund. The Fund believes that none of these shares are
owned beneficially, but are held as agent for various accounts which are the
beneficial owners.
<TABLE>
<CAPTION>
PERCENTAGE
OF
NAME OF FUND NAME AND ADDRESS OF OWNER OWNERSHIP
- -------------------------------------------------------------------------------
<S> <C> <C>
Nuveen Tax-Exempt Money Market Fund The Chase Manhattan Bank, NA 20.46
2 Chase Plaza
Security Controlling Dept.
4th Floor
New York, NY 10081
First Hawaiian Bank 7.38
FIDAC
Attn: Trust Investments
P.O. Box 3200
Honolulu, HI 96847-0001
JC Bradford & Co. 6.40
Money Funds Operations
Attn: Deborah Hornbuckle
330 Commerce St.
Nashville, TN 37201-1805
</TABLE>
INVESTMENT ADVISER AND INVESTMENT MANAGEMENT AGREEMENT
Nuveen Advisory acts as investment adviser for the Fund and in such capacity
manages the investment and reinvestment of the assets of the Fund. Nuveen Advi-
sory also administers the Fund's business affairs, provides office facilities
and equipment and certain clerical, bookkeeping and administrative services,
and permits any of its officers or employees to serve without compensation as
directors or officers of the Fund if elected to such positions. See "Management
of the Fund" in the Prospectus.
Nuveen Advisory is paid an annual management fee in an amount equal to .4 of 1%
of the first $500 million of average daily net assets, .375 of 1% of the next
$500 million, .35 of 1% of the next $1 billion, and .325 of 1% of average daily
net assets over $2 billion. The management fee will be reduced or Nuveen Advi-
sory will assume certain Fund expenses in an amount necessary to prevent the
Fund's total expenses in any fiscal year from exceeding .45 of 1% of the aver-
age daily net asset value of the Fund. The management fee for fiscal years
ended February 28, 1998, February 28 1997 and February 29 1996 amounted to
$1,993,848, $2,136,925 and $2,645,505, respectively. As discussed in the Pro-
spectus, subject to the expense limitations of the Investment Management Agree-
ment, the Fund is responsible for payment of certain of the costs and expenses
of its operations.
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
13
<PAGE>
firm (based on number of employees) specializing in the underwriting and dis-
tribution of tax-exempt securities and maintains one of the largest research
departments 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 $37 billion in
taxable and tax-exempt unit trusts, including over $12 billion in tax-exempt
insured unit trusts. In addition, the Nuveen open-end and closed-end funds held
approximately $38 billion in securities under management as of the date of this
Statement. Over 1,000,000 individuals have invested to date in Nuveen's funds
and trusts. Founded in 1898, Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 78% owned by The St. Paul Companies, Inc.
("St. Paul"). St. Paul is located in St. Paul, Minnesota, and is principally
engaged in providing property-liability insurance through subsidiaries.
Nuveen Advisory's portfolio managers call upon the resources of Nuveen's Re-
search Department. The Nuveen Research Department reviews more than $100 bil-
lion in municipal bonds every year.
The Fund, the other Nuveen funds, Nuveen Advisory, 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 advan-
tage of, a Fund's anticipated or actual portfolio transactions, and is designed
to assure that the interest of Fund shareholders is placed before the interest
of Nuveen personnel in connection with personal investment transactions.
PORTFOLIO TRANSACTIONS
Nuveen Advisory, in effecting purchases and sales of portfolio securities for
the account of the Fund, will place orders in such manner as, in the opinion of
management, will offer the best price and market for the 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 prin-
cipal (as opposed to an agency) basis and, accordingly, has not paid any bro-
kerage commissions. Purchases from underwriters include a commission or conces-
sion paid by the issuer to the underwriter, and purchases from dealers include
the spread between the bid and asked price. Given the best price and execution
obtainable, it is the practice of the Fund to select dealers which, in addi-
tion, furnish research information (primarily credit analyses of issuers) 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 ef-
forts, the receipt of research information is not expected to reduce signifi-
cantly Nuveen Advisory's expenses. Any research benefits obtained are available
to all Nuveen Advisory's other clients. While Nuveen Advisory will be primarily
responsible for the placement of the Fund's business, the policies and prac-
tices 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 Directors of the
Fund.
14
<PAGE>
Nuveen Advisory reserves the right to, and does, manage other investment ac-
counts and investment companies for other clients which may have investment ob-
jectives 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 securities whenever
decisions are made to purchase or sell securities by the Fund and one or more
of such other clients simultaneously. In making such allocations the main fac-
tors to be considered will be the respective investment objectives of the Fund
and such other clients, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Fund and
such other clients, the size of investment commitments generally held by the
Fund and such other clients and opinions of the persons responsible for recom-
mending 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 Fund's Board of Directors 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 pur-
suant to the terms of the Rule must be approved at least quarterly by the Board
of Directors of the Fund, including a majority of the members thereof who are
not interested persons of the Fund.
NET ASSET VALUE
As stated in the Prospectus, the net asset value of the shares of the Fund will
be determined by The Chase Manhattan Bank, the Fund's custodian, as of 12:00
noon, Eastern Time, (1) on each day on which the Federal Reserve Bank of Boston
is normally open and (2) on any day during which there is sufficient degree of
trading in the Fund's portfolio securities that the current net asset value of
the Fund shares might be materially affected by such changes in the value of
the portfolio securities. The Federal Reserve Bank of Boston is not open and
the Fund will similarly not be open on New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas Day. It
is possible that changing circumstances during the year will result in addition
or deletions to the above lists. The net asset value per share will be computed
by dividing the value of the portfolio securities held by the Fund, plus cash
or other assets, less liabilities, by the total number of shares outstanding at
such time.
AMORTIZED COST VALUATION
As stated in the Prospectus, the Fund will seek to maintain a net asset value
of $1.00 per share. In this connection, the Fund values its portfolio securi-
ties at their amortized cost, as permitted by the Securities and Exchange Com-
mission (the "Commission") under Rule 2a-7 under the Investment Company
15
<PAGE>
Act of 1940. This method does not take into account unrealized securities gains
or losses. It involves valuing an instrument at its cost on the date of pur-
chase and thereafter assuming a constant amortization to maturity of any dis-
count or premium. While this method provides certainty in valuation, it may re-
sult in periods during which the value of an investment, as determined by amor-
tized cost, is higher or lower than the price the Fund would receive if it sold
the instrument. During periods of declining interest rates, the daily yield on
shares of the Fund may tend to be higher than a like computation made by a fund
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio instruments.
Thus, if the use of the amortized cost method by the Fund resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in the
Fund would be able to obtain a somewhat higher yield than would result from an
investment in a fund utilizing solely market values, and existing investors in
the Fund would receive less investment income. The converse would apply in a
period of rising interest rates.
The Fund, as a condition to the use of amortized cost and the maintenance of
its per share net asset value of $1.00, must maintain a dollar-weighted average
portfolio maturity of 90 days or less, only purchase instruments having remain-
ing maturities of 397 days or less, and invest only in securities determined to
be of high quality with minimal credit risks. The Fund may invest in variable
and floating rate instruments even if they carry stated maturities in excess of
397 days, upon certain conditions contained in rules and regulations issued by
the Securities and Exchange Commission under the Investment Company Act of
1940, but will do so only if there is a secondary market for such instruments
or if they carry demand features, permissible under rules of the Commission for
money market funds, to recover the full principal amount thereof upon specified
notice at par, or both.
The Board of Directors, pursuant to Rule 2a-7, has established procedures de-
signed to stabilize, to the extent reasonably possible, the Fund's price per
share as computed for the purpose of sales and redemptions at $1.00. Such pro-
cedures will include review of the Fund's portfolio holdings by the Board of
Directors, at such intervals as it may deem appropriate, to determine whether
the net asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market quo-
tations and market equivalents used in such review may be obtained from a pric-
ing agent approved by the Board of Directors. The Board has selected Nuveen Ad-
visory to act as pricing agent, but in the future may select an independent
pricing service to perform this function. In serving as pricing agent, Nuveen
Advisory will follow guidelines adopted by the Board, and the Board will moni-
tor Nuveen Advisory to see that the guidelines are followed. The pricing agent
will value the Fund's investment based on methods which include consideration
of: yield or prices of municipal obligations of comparable quality, coupon, ma-
turity, and type; indications as to values from dealers; and general market
conditions. The pricing agent may employ electronic data processing techniques
and/or a matrix system to determine valuations. The extent of any deviation be-
tween the Fund's net asset value based on the pricing agent's market valuation
and $1.00 per share based on amortized cost will be examined by the Board of
Directors. If such deviation exceeds 1/2 of 1%, the Board of Directors will
promptly consider what action, if any, will be initiated. In the event the
Board of Directors determines that a deviation exists which may result in mate-
rial dilution or other unfair results to investors or existing shareholders, it
has agreed to take such corrective action as it regards as necessary and appro-
priate, including the sale of portfolio instruments prior to maturity to
16
<PAGE>
realize capital gains or losses or to shorten average portfolio maturity; with-
holding dividends or payment of distributions from capital or capital gains;
redemption of shares in kind; or establishing a net asset value per share by
using available market quotations.
TAX MATTERS
FEDERAL INCOME TAX MATTERS
The following discussion of federal income tax matters is based upon the advice
of Fried, Frank, Harris, Shriver and Jacobson, Washington, D.C., counsel to the
Fund.
As described in the Prospectus, the Fund intends to qualify, as it has in prior
years, under Subchapter M of the Internal Revenue Code of 1986, as amended,
(the "Code"), for tax treatment as a regulated investment company. In order to
qualify as a regulated investment company, the Fund must satisfy certain re-
quirements relating to the source of its income, diversification of its assets,
and distributions of its income to shareholders. First, the Fund must derive at
least 90% of its annual gross income (including tax-exempt interest) from divi-
dends, interest, payments with respect to securities loans, gains from the sale
or other disposition of stock or securities, foreign currencies or other income
(including but not limited to gains from options and futures) derived with re-
spect to its business of investing in such stock or securities (the "90% gross
income test"). Second, the Fund must diversify its holdings so that, at the
close of each quarter of its taxable year, (i) at least 50% of the value of its
total assets is comprised of cash, cash items, United States Government securi-
ties, securities of other regulated investment companies and other securities
limited in respect of any one issuer to an amount not greater in value than 5%
of the value of the Fund's total assets and to not more than 10% of the out-
standing voting securities of such issuer, and (ii) not more than 25% of the
value of the total assets it 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.
As a regulated investment company, the Fund will not be subject to federal in-
come tax on any portion of its net income currently distributed to shareholders
in any taxable year for which it distributes at least 90% of the sum of (i) its
"investment company taxable income" (which includes dividends, taxable inter-
est, taxable original issue discount and market discount income, income from
securities lending, net short-term capital gain in excess of long-term capital
loss, and any other taxable income other than "net capital gain" (the excess of
its net long-term capital gain over its net short-term capital loss) and is re-
duced by deductible expenses) and (ii) its "net tax-exempt interest" (the ex-
cess of its gross tax-exempt interest income over certain disallowed deduc-
tions).
The Fund also intends to satisfy conditions (including requirements as to the
proportion of its assets invested in Municipal Obligations) which will enable
it to designate distributions from the interest income generated by its invest-
ment in Municipal Obligations, which is exempt from regular federal income tax
when received by the Fund, as Exempt Interest Dividends. Shareholders receiving
Exempt Interest Dividends will not be subject to federal income tax on the
amount of such dividends.
Distributions by the Fund of net interest income received from certain taxable
temporary investments (such as certificates of deposit, commercial paper and
obligations of the United States Government, its
17
<PAGE>
agencies and instrumentalities) and net short-term capital gains realized by
the Fund, if any, will be taxable to shareholders as ordinary income whether
received in cash or additional shares. If the Fund purchases a Municipal Obli-
gation at a market discount, any gain realized by the Fund upon the 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 real-
ized in excess of the market discount will be treated as capital gains. Any net
long-term capital gains realized by the Fund and distributed to shareholders in
cash or in additional shares will be taxable to shareholders as long-term capi-
tal gains regardless of the length of time investors have owned shares of the
Fund. The Fund does not expect to realize significant long-term capital gains.
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.
If the Fund has both tax-exempt and taxable income, it will use the "average
annual" method for determining the designated 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, one designated percentage is applied uniformly
to all distributions made during the Fund's taxable year. The percentage of in-
come designated as tax-exempt for any particular distribution may be substan-
tially different from the percentage of the Fund's income that was tax-exempt
during the period covered by the 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 is not expected to result
in capital gain or loss to the shareholders because the Fund's net asset value
is expected to remain constant at $1.00 per share. To the extent that the
Fund's net asset value is greater or lesser than $1.00 per share, redemptions
or exchanges may result in capital gain or loss to the shareholder.
In order to avoid a 4% federal excise tax, the Fund must distribute or be
deemed to have distributed by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of the excess of its
realized capital gains over its realized capital losses (generally computed on
the basis of the one-year period ending on October 31 of such year) and 100% of
any taxable ordinary income and the excess of realized capital gains over real-
ized capital losses for the prior year that was not distributed during such
year and on which the Fund paid no federal income tax. The Fund intends to make
timely distributions in compliance with these requirements and consequently it
is anticipated that it generally will not be required to pay the excise tax.
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 interest
income from Municipal Obligations, and distributions to its shareholders out of
net interest income from Municipal Obligations or other investments, or out of
net capital gains, would be taxable to shareholders as ordinary dividend income
for federal income tax purposes to the extent of the Fund's available earnings
and profits.
18
<PAGE>
As stated in the Prospectus under "Taxes," the Fund may invest in the type of
private activity bonds, the interest on which is not federally tax-exempt to
persons who are "substantial users" of the facilities financed by such bonds
or "related persons" of such "substantial users." Accordingly, the Fund may
not be an appropriate investment for shareholders who are considered either a
"substantial user" or a "related person" within the meaning of the Code. In
general, a "substantial user" of a facility financed from the proceeds of pri-
vate activity bonds includes a "non-exempt person who regularly uses a part of
such facility in his trade or business." "Related persons" are in general de-
fined to include persons among whom there exists a relationship, either by
family or business, which would result in a disallowance of losses in transac-
tions among them under various provisions of the Code (or if they are members
of the same controlled group of corporations under the Code). This includes a
partnership and each of its partners (including their spouses and minor chil-
dren) and an S corporation and each of its shareholders (and their spouses and
minor children). Various combinations of these relationships may also consti-
tute "related persons" under the Code. For additional information, investors
should consult their tax advisers 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
hospitals), 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 receives income from Municipal Obligations subject to the alternative
minimum tax, a portion of the dividends paid by it, although otherwise exempt
from federal 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 per-
centage 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
("adjusted current earnings") and the amount otherwise determined to be the
alternative 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 the alternative measures of a corporation's taxable
income.
Individuals whose "modified income" exceeds a base amount will be subject to
Federal income tax on up to one-half of their social security or railroad re-
tirement benefits. Modified income currently includes adjusted gross income,
one-half of social security benefits and tax-exempt interest, including ex-
empt-interest dividends from the Fund. Individuals whose modified income ex-
ceeds the adjusted base amount are required to include in gross income up to
85% of their social security benefits.
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 a 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
19
<PAGE>
taxpayer identification number (in the case of individuals, their social secu-
rity number) and certain certificates, 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 shareholders. For complete provisions, reference
should be made to the pertinent Code sections and Treasury Regulations. The
Code and Treasury Regulations are subject to change by legislative or adminis-
trative action, and any such change may be retroactive with respect to Fund
transactions. Shareholders are advised to consult their own tax advisers for
more detailed information concerning the federal taxation of the Fund and the
income tax consequences to its shareholders.
State and Local Tax Aspects. The exemption from federal income tax for distri-
butions of interest income from Municipal Obligations which are designated ex-
empt interest dividends will not necessarily result in exemption under the in-
come or other tax laws of any state or local taxing authority. The laws of the
several states and local taxing authorities vary with respect to the taxation
of such distributions, and shareholders of the Fund are advised to consult
their own tax advisers in that regard.
PRINCIPAL UNDERWRITER AND DISTRIBUTOR
Nuveen acts as the principal underwriter or distributor of Fund shares. Shares
of the Fund are offered on a continuous basis at net asset value without a
sales charge. Nuveen has agreed to pay sales and promotion expenses in connec-
tion with the offering of Fund shares, including the cost of printing and dis-
tributing prospectuses (except expenses of preparing, printing and distributing
prospectuses to existing shareholders and governmental agencies) and advertis-
ing and sales literature expense. Expenses incurred in registering the Fund and
its shares under federal and state securities laws will be paid by the Fund.
YIELD INFORMATION
As explained in the Prospectus, the historical performance of the Fund may be
expressed in terms of "yield" or "effective yield." The Fund's yield and effec-
tive yield for the seven-day period ended February 28, 1998 were 3.11% and
3.16%, respectively. These measures of performance are described below.
Yield is computed in accordance with a standard method prescribed by rules of
the Securities and Exchange Commission. Under that method, current yield is
based on a seven-day period and is computed as follows: the Fund's net invest-
ment income per share for the period is divided by the price per share (ex-
pected to remain constant at $1.00) at the beginning of the period, the result
(the "base period return") is divided by 7 and multiplied by 365, and the re-
sulting figure is carried to the nearest hundredth of one percent. For the pur-
pose of this calculation, the Fund's net investment income per share includes
its accrued interest income plus or minus amortized purchase discount or pre-
mium less accrued expenses, but does not include realized capital gains or
losses or unrealized appreciation or depreciation of investments.
20
<PAGE>
The Fund's effective yield is calculated by taking the base period return (com-
puted as described above) and calculating the effect of assumed compounding.
The formula for effective yield is: (base period return + 1)/3//6//5///7/-1.
The Fund's yield will fluctuate, and the publication of annualized yield quota-
tions is not a representation of what an investment in the Fund will actually
yield for any given future period. Actual yields will depend not only on
changes in interest rates on money market instruments during the period in
question, but also on such matters as the Fund's expenses.
In reports or other communications to shareholders or in advertising and sales
literature, the Fund may compare its performance to that of other money market
mutual funds tracked by Lipper Analytical Services, Inc. ("Lipper"), by
Donoghue's Money Fund Report ("Donoghue's") or similar services or by financial
publications such as Barron's, Changing Times, Forbes and Money Magazine. Per-
formance comparisons by these indexes, services or publications may rank mutual
funds over different periods of time by means of aggregate, average, year-by-
year or other types of performance figures. Lipper ranks mutual funds by over-
all performance, investment objectives, and assets and assumes the reinvestment
of dividends for the period covered. Donoghue's ranks investment results ac-
cording to total return (annualized results net of management fees and ex-
penses) and presents one year results as effective annual yields assuming rein-
vestment of dividends. Any given performance quotation or performance compari-
son should not be considered as representative of the Fund's performance for
any future period.
A comparison of tax-exempt and taxable equivalent yields is one element to con-
sider in making an investment decision. The Fund may from time to time in its
advertising and sales materials compare its then current yields as of a recent
date with the yields on taxable investments such as corporate or U.S. Govern-
ment bonds and bank CDs or money market accounts, each of which has investment
characteristics that may differ from those of the Fund. U.S. Government bonds,
for example, are backed by the full faith and credit of the U.S. Government,
and bank CDs and money market accounts are insured by an agency of the federal
government.
21
<PAGE>
The following table shows the effects for individuals of federal income taxes
on the amount that those subject to a given tax rate would have to put into a
tax-free investment in order to generate the same after-tax income as a taxable
investment.*
Read down to find the amount of a tax-free investment at the specified rate
that would provide the same after-tax income as a $50,000 taxable invest-
ment at the stated taxable rate.
<TABLE>
<CAPTION>
2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
TAXABLE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3.00% $ 51,750 $41,400 $34,500 $29,571 $25,875 $23,000 $20,700
- --------------------------------------------------------------------------
4.00% $ 69,000 $55,200 $46,000 $39,429 $34,500 $30,667 $27,600
- --------------------------------------------------------------------------
5.00% $ 86,250 $69,000 $57,500 $49,286 $43,125 $38,333 $34,500
- --------------------------------------------------------------------------
6.00% $103,500 $82,800 $69,000 $59,143 $51,750 $46,000 $41,400
- --------------------------------------------------------------------------
7.00% $120,750 $96,600 $80,500 $69,000 $60,375 $53,667 $48,300
</TABLE>
*The dollar amounts in the table reflect a 31% federal income tax rate.
This table is for illustrative purposes only and is not intended to predict the
actual return you might earn on your investment. The Fund occasionally may ad-
vertise its performance in similar tables using a different current tax rate
than that shown here. The tax rate 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
table lower, while a lower tax rate would make the amounts higher. You should
consult your tax adviser to determine your actual tax rate.
22
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
Arthur Andersen LLP independent public accountants, 33 West Monroe Street, Chi-
cago, Illinois 60603 have been selected as auditors for the Fund. In addition
to audit services, Arthur Andersen LLP provides consultation and assistance on
accounting, internal control, tax and related matters. The financial statements
of the Fund and the information set forth under "Financial Highlights" are in-
cluded in the Prospectus and have been audited by Arthur Andersen LLP as indi-
cated in their report with respect thereto, and are included in reliance upon
the authority of said firm as experts in giving said report.
The custodian of the Fund's assets is The Chase Manhattan Bank, 4 New York Pla-
za, New York, NY 10004.
23
<PAGE>
PART C--OTHER INFORMATION
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
PART C--OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Financial information included in the Prospectus:
Financial Highlights
Portfolio of Investments, February 28, 1998
Statement of Net Assets, February 28, 1998
Statement of Operations, Year Ended February 28, 1998
Statements of Changes in Net Assets, Years Ended February 28, 1998 and
February 28, 1997
Report of Independent Public Accountants, dated April 15, 1998
(b) Exhibits
<TABLE>
<S> <C>
1. Articles of Incorporation of Registrant, as amended and as currently in effect.
Filed as Exhibit 1 to Post-Effective Amendment No. 5 to Registrant's Registra-
tion Statement on Form N-1A (File No. 2-70520) and are incorporated herein by
reference thereto.
2. By-Laws of Registrant as currently in effect. Filed as Exhibit 2 to Post-Effec-
tive Amendment No. 9 to Registrant's Statement on Form N-1A (File No. 2-70520)
and are incorporated herein by reference thereto.
3. Not applicable.
4. Specimen certificate of shares of Capital Stock of Registrant.
5(a). Investment Management Agreement between Registrant and Nuveen Advisory Corp.
dated May 1, 1988. Filed as Exhibit 5(a) to Post-Effective Amendment No. 16 to
Registrant's Registration Statement on Form N-1A (File No. 2-70520) and is in-
corporated herein by reference thereto.
(b). Renewal, dated May 20, 1997, of Investment Management Agreement.
6(a). Distribution Agreement between Registrant and John Nuveen & Co. Incorporated,
dated April 30, 1982. Filed as Exhibit 6(a) to Post-Effective Amendment No. 9 to
Registrant's Registration Statement on Form N-1A (File No. 2-70520) and is in-
corporated herein by reference thereto.
(b). Renewal, dated July 31, 1997, of Distribution Agreement.
7. Not applicable.
8(a). Custody Agreement, dated October 1, 1993, between Registrant and United States
Trust Company of New York. Filed as Exhibit 8(a) to Post-Effective Amendment No.
15 to Registrant's Registration Statement on Form N-1A (File No. 2-70520) and is
incorporated herein by reference thereto.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
8(b). Letter evidencing assignment of U.S. Trust Company of New York's rights and re-
sponsibilities under the Custody Agreement to The Chase Manhattan Bank and is
incorporated herein by reference thereto.
9. Transfer Agency Agreement between Registrant and Shareholder Services, Inc.
dated December 19, 1994. Filed as Exhibit 9 to Post-Effective Amendment No. 16
to Registrant's Registration Statement on Form N-1A (File No. 2-70520) and is
incorporated herein by reference thereto.
9(a). Amendment No. 1 to Transfer Agency Agreement dated July 1, 1996. Filed as Ex-
hibit 9(a) to Post-Effective Amendment No. 18 to Registrant's Registration
Statement on Form N-1A (File No. 2-70520) and is incorporated herein by refer-
ence thereto.
10. Opinion of Fried, Frank, Harris, Shriver & Jacobson.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Not applicable.
14. Not applicable.
15. Not applicable.
16. Schedule of Computation of Yield Figures.
17. Financial Data Schedule.
18. Not applicable.
99(a). Agreement for a Money Market Fund Insurance Program. Filed as Exhibit 18 to
Post-Effective Amendment No. 8 to Registrant's Registration Statement on Form N-
1A (File No. 2-70520) and is incorporated herein by reference thereto.
99(b). Certified copy of resolution of Board of Directors authorizing the signing of
the names of directors and officers on the Registration Statement pursuant to
power of attorney.
99(c). Original Power of Attorney for Judith M. Stockdale authorizing, among others,
Gifford R. Zimmerman and Larry W. Martin to execute the Registration Statement
on her behalf as one of the Registrant's Directors. Original Powers of Attorney
for all of Registrant's other Directors authorizing, among others, Gifford R.
Zimmerman and Larry W. Martin to execute the Registration Statement filed as Ex-
hibit 99(c) to Post-Effective Amendment No. 18 to Registrant's Registration
Statement on Form N-1A (File No. 2-70520) and is incorporated herein by refer-
ence thereto.
99(d). Code of Ethics and Reporting Requirements. Filed as Exhibit 99(d) to Post-Effec-
tive Amendment No. 16 to Registrant's Registration Statement on Form N-1A (File
No. 2-70520) and is incorporated herein by reference thereto.
</TABLE>
ITEM 25: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26: NUMBER OF HOLDERS OF SECURITIES
As of March 31, 1998:
<TABLE>
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
<S> <C>
Common Stock ($.01 par value).................... 1,231
</TABLE>
C-2
<PAGE>
ITEM 27: INDEMNIFICATION
Section 2-418 of the General Corporation Law of Maryland provides for indemni-
fication of officers and directors. Article NINTH of the Articles of Incorpo-
ration of Registrant provides as follows:
NINTH: To the maximum extent permitted by the General Corporation Law of
the State of Maryland, as from time to time amended, the Corporation shall
indemnify its currently acting and its former directors, officers, employ-
ees and agents, and those persons who, at the request of the Corporation
serve or have served another corporation, partnership, joint venture, trust
or other enterprise in one or more such capacities. The indemnification
provided for herein shall not be deemed exclusive of any other rights to
which those seeking indemnification may otherwise be entitled.
Expenses (including attorneys' fees) incurred in defending a civil or crim-
inal action, suit or proceeding (including costs connected with the prepa-
ration of a settlement) may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding, if authorized by the
Board of Directors in the specific case, upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay that
amount of the advance which exceeds the amount which it is ultimately de-
termined that he is entitled to receive from the Corporation by reason of
indemnification as authorized herein; provided, however, that prior to mak-
ing any such advance at least one of the following conditions shall have
been met: (1) the indemnitee shall provide a security for his undertaking,
(2) the Corporation shall be insured against losses arising by reason of
any lawful advances, or (3) a majority of a quorum of the disinterested,
non-party directors of the Corporation, or an independent legal counsel in
written opinion, shall determine, based on a review of readily available
facts, that there is reason to believe that the indemnitee ultimately will
be found and entitled to indemnification.
Nothing in these Articles of Incorporation or in the By-Laws shall be
deemed to protect or provide indemnification to any director or officer of
the Corporation against any liability to the Corporation or to its security
holders to which he would otherwise be subject by reason of willful misfea-
sance, bad faith, gross negligence or reckless disregard of the duties in-
volved in the conduct of his office ("disabling conduct"), and the Corpora-
tion shall not indemnify any of its officers or directors against any lia-
bility to the Corporation or to its security holders unless a determination
shall have been made in the manner provided hereafter that such liability
has not arisen from such officer's or director's disabling conduct. A de-
termination that an officer or director is entitled to indemnification
shall have been properly made if it is based upon (1) a final decision on
the merits by a court or other body before whom the proceeding was brought
that the person to be indemnified ("indemnitee") was not liable by reason
of disabling conduct or, (2) in the absence of such a decision, a reason-
able determination, based upon a review of the facts, that the indemnitee
was not liable by reason of disabling conduct, by (a) the vote of a major-
ity of a quorum of directors who are neither "interested persons" of the
Corporation as defined in the Investment Company Act of 1940 nor parties to
the proceeding, or (b) an independent legal counsel in a written opinion.
-----------------
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to the officers, directors or controlling persons of the
Registrant pursuant to the Articles of Incorporation of the Registrant or
otherwise, the Registrant has been advised that in the opinion of the
Securities
C-3
<PAGE>
and Exchange Commission such indemnification is against public policy as
expressed in the Act 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 Registrant in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
The directors and officers of the Registrant (and of the other management
investment companies for which Nuveen Advisory Corp. serves as investment
adviser) are covered by an Investment Trust Errors and Omissions policy in the
aggregate amount of $20,000,000 (with a maximum deductible of $500,000) against
liability and expenses of claims of wrongful acts arising out of their position
with the Registrant (and such other companies), except for matters which
involve willful acts, bad faith, gross negligence and willful disregard of duty
(i.e., where the insured did not act in good faith for a purpose he or she
reasonably believed to be in the best interest of the applicable investment
company or where he or she had reasonable cause to believe this conduct was
unlawful).
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 Flagship Multistate Trust I,
Nuveen Flagship Multistate Trust II, Nuveen Flagship Multistate Trust III,
Nuveen Flagship Multistate Trust IV, Nuveen Flagship Municipal Trust, Flagship
Admiral Funds Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free
Money Market Fund, Inc., Nuveen Tax-Exempt Money Market Fund, Inc., and Nuveen
Tax-Free Reserves, Inc. It also serves as investment adviser to the following
closed-end management investment companies: Nuveen Municipal Value Fund, Inc.,
Nuveen California Municipal Value Fund, Inc., Nuveen New York Municipal Value
Fund, Inc., Nuveen Municipal Income Fund, Inc., Nuveen Premium Income Municipal
Fund, Inc., Nuveen Performance Plus Municipal Fund, Inc., Nuveen California
Performance Plus Municipal Fund, Inc., Nuveen New York Performance Plus
Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal
Market Opportunity Fund, Inc., Nuveen California Municipal Market Opportunity
Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc., Nuveen California
Investment Quality Municipal Fund, Inc., Nuveen New York Investment Quality
Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund, Inc., Nuveen
Florida Investment Quality Municipal Fund, Nuveen New Jersey Investment Quality
Municipal Fund, Inc., Nuveen Pennsylvania Investment Quality Municipal Fund,
Nuveen Select Quality Municipal Fund, Inc., Nuveen California Select Quality
Municipal Fund, Inc., Nuveen New York Select Quality Municipal Fund, Inc.,
Nuveen Quality Income Municipal Fund, Inc., Nuveen Insured Municipal
Opportunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund, Nuveen
Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income
Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen
California Quality Income Municipal Fund, Inc., Nuveen New York Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen
Premier Insured Municipal Income Fund, Inc., Nuveen Premium Income Municipal
Fund 2, Inc., Nuveen Insured California Premium Income Municipal Fund, Inc.,
Nuveen Insured New York Premium Income Municipal Fund, Inc., Nuveen Select
Maturities Municipal Fund, Nuveen Arizona
C-4
<PAGE>
Premium Income Municipal Fund, Inc., Nuveen Insured Florida Premium Income
Municipal Fund, Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New
Jersey Premium Income Municipal Fund, Inc., Nuveen Premium Income Municipal
Fund 4, Inc., Nuveen Insured California Premium Income Municipal Fund 2, Inc.,
Nuveen Pennsylvania Premium Income Municipal Fund 2, Nuveen Maryland Premium
Income Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund,
Nuveen Virginia 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 Income Municipal Fund and Nuveen Insured Premium Income Municipal Fund
2. Nuveen Advisory Corp. has no other clients or business at the present time.
The principal business address for all of these investment companies is 333
West Wacker Drive, Chicago, Illinois, 60606.
For a description of other business, profession, vocation or employment of a
substantial nature in which any director or officer, other than Timothy R.
Schwertfeger and Anthony T. Dean, of the investment adviser has engaged during
the last two years for his account or in the capacity of director, officer, em-
ployee, partner or trustee, see the descriptions under "Management" in the
Statement of Additional Information.
Timothy R. Schwenfeger is Chairman and Director of Nuveen Advisory Corp., the
investment adviser. Mr. Schwenfeger has, during the last two years, been Chair-
man and formerly Executive Vice President and Director of the John Nuveen Com-
pany, John Nuveen & Co. Incorporated, and Nuveen Institutional Advisory Corp.;
Chairman and Director (since January 1997) of Nuveen Asset Management, Inc.;
Director (since 1996) of Institutional Capital Corporation. Anthony T. Dean is
President and Director of Nuveen Advisory Corp., the investment adviser. Mr.
Dean has, during the last two years, been Executive Vice President and Director
of The John Nuveen Company and John Nuveen & Co. Incorporated; and Director of
Nuveen Institutional Advisory Corp.; President and Director (since January
1997) of Nuveen Asset Management, Inc.; Chairman and Director of Rittenhouse
Financial Services, Inc.
ITEM 29: PRINCIPAL UNDERWRITERS
(a) John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter to
the following open-end management type investment companies: Nuveen Flagship
Multistate Trust I, Nuveen Flagship Multistate Trust II, Nuveen Flagship
Multistate Trust III, Nuveen Flagship Multistate Trust IV, Nuveen Flagship
Municipal Trust, Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Money
Market Fund, Inc., Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free
Reserves, Inc., Flagship Admiral Funds Inc., Nuveen Investment Trust and Nuveen
Investment Trust II. Nuveen also acts as depositor and principal underwriter of
the Nuveen Tax-Exempt Unit Trust and Nuveen Unit Trusts, registered unit
investment trusts. Nuveen has also served or is serving as a co-managing
underwriter of the shares of Nuveen Municipal Value Fund, Inc., Nuveen
California Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund,
Inc., Nuveen Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund,
Inc., Nuveen Performance Plus Municipal Fund, Inc., Nuveen California
Performance Plus Municipal Fund, Inc., Nuveen New York Performance Plus
Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal
Market Opportunity Fund, Inc., Nuveen California Municipal Market Opportunity
Fund, Inc., Nuveen
C-5
<PAGE>
Investment Quality Municipal Fund, Inc., Nuveen California Investment Quality
Municipal Fund, Inc., Nuveen New York Investment Quality Municipal Fund, Inc.,
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality
Municipal Fund, Nuveen New Jersey Investment Quality Municipal Fund, Inc.,
Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen Select Quality
Municipal Fund, Inc., Nuveen California Select Quality Municipal Fund, Inc.,
Nuveen New York Select Quality Municipal Fund, Inc., Nuveen Quality Income
Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen
Florida Quality Income Municipal Fund, Nuveen Michigan Quality Income Municipal
Fund, Inc., Nuveen Ohio Quality Income Municipal Fund, Inc., Nuveen Texas
Quality Income Municipal Fund, Nuveen California Quality Income Municipal Fund,
Inc., Nuveen New York Quality Income Municipal Fund, Inc., Nuveen Premier
Municipal Income Fund, Inc., Nuveen Premier Insured Municipal Income Fund,
Inc., Nuveen Select Tax-Free Income Portfolio, Nuveen Premium Income Municipal
Fund 2, Inc., Nuveen Insured California Premium Income Municipal Fund, Inc.,
Nuveen Insured New York Premium Income Municipal Fund, Inc., Nuveen Select
Maturities Municipal Fund, Nuveen Arizona Premium Income Municipal Fund, Inc.,
Nuveen Insured Florida Premium Income Municipal Fund, Nuveen Michigan Premium
Income Municipal Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund,
Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured California
Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium Income
Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen
Massachusetts Premium Income Municipal Fund, Nuveen Virginia 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 Income
Municipal Fund, Nuveen Insured Premium Income Municipal Fund 2, Nuveen Select
Tax-Free Income Portfolio 2, Nuveen Insured California Select Tax-Free Income
Portfolio, Nuveen Insured New York Select Tax-Free Income Portfolio and Nuveen
Select Tax-Free Income Portfolio 3.
(b)
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- -----------------------------------------------------------------------------
<S> <C> <C>
Timothy R. Schwertfeger Chairman of the Board, Chairman of the Board
333 West Wacker Drive Chief Executive Officer and Director
Chicago, IL 60606 and Director
Anthony T. Dean President and Director President and Director
333 West Wacker Drive
Chicago, IL 60606
John P. Amboian Executive Vice President None
333 West Wacker Drive and Chief Financial Officer
Chicago, IL 60606
Bruce P. Bedford Executive Vice President Executive Vice President
333 West Wacker Drive
Chicago, IL 60606
</TABLE>
C-6
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ------------------------------------------------------------------------------
<S> <C> <C>
William Adams IV Vice President None
333 West Wacker Drive
Chicago, IL 60606
Alan G. Berkshire Vice President None
333 West Wacker Drive
Chicago, IL 60606
Clifton L. Fenton Vice President None
333 West Wacker Drive
Chicago, IL 60606
Kathleen M. Flanagan Vice President Vice President
333 West Wacker Drive Chicago, IL
60606
Stephen D. Foy Vice President None
333 West Wacker Drive
Chicago, IL 60606
Robert D. Freeland Vice President None
333 West Wacker Drive
Chicago, Illinois 60606
Michael G. Gaffney Vice President None
333 West Wacker Drive
Chicago, IL 60606
Anna R. Kucinskis Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
333 West Wacker Drive
Chicago, IL 60606
Larry W. Martin Vice President and Vice President and
333 West Wacker Drive Assistant Secretary Assistant Secretary
Chicago, Illinois 60606
Thomas C. Muntz Vice President None
333 West Wacker Drive
Chicago, IL 60606
O. Walter Renfftlen Vice President and Vice President and
333 West Wacker Drive Controller Controller
Chicago, IL 60606
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ------------------------------------------------------------------------------------
<S> <C> <C>
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
H. William Stabenow Vice President and Vice President and
333 West Wacker Drive Treasurer Treasurer
Chicago, IL 60606
Paul C. Williams Vice President None
333 West Wacker Drive
Chicago, IL 60606
Gifford R. Zimmerman Vice President and Vice President and
333 West Wacker Drive 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,
maintains Articles of Incorporation, By-Laws, minutes of directors and
shareholder meetings, contracts and all advisory material of the investment
adviser.
The Chase Manhattan Bank, 4 New York Plaza, New York, NY 10004, maintains all
general and subsidiary ledgers, journals, trial balances, records of all
portfolio purchases and sales, and all other required records not maintained by
Nuveen Advisory Corp. or Shareholder Services, Inc.
Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado 80217-5330,
maintains 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) Not applicable.
C-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940 THE REGISTRANT CERTIFIES THAT IT MEETS ALL REQUIREMENTS
FOR EFFECTIVENESS OF THIS REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER
THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THIS
CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 21ST DAY OF APRIL, 1998.
NUVEEN TAX-EXEMPT MONEY MARKET FUND,
INC.
/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 21, 1998
Controller (Principal
Financial and
Accounting Officer)
Timothy R. Schwertfeger Chairman of the Board
and Director (Principal
Executive Officer)
Anthony T. Dean President and Director
Robert P. Bremner Director
Lawrence H. Brown Director
Anne E. Impellizzeri Director
Peter R. Sawers Director
William J. Schneider Director
Judith M. Stockdale Director
</TABLE>
/s/ Gifford R. Zimmerman
By_________________________
Gifford R. Zimmerman
Attorney-in-Fact
April 21, 1998
AN ORIGINAL POWER OF ATTORNEY AUTHORIZING, AMONG OTHERS, GIFFORD R. ZIMMERMAN
AND LARRY W. MARTIN TO EXECUTE THIS REGISTRATION STATEMENT, AND AMENDMENTS
THERETO, FOR JUDITH M. STOCKDALE, HAS BEEN EXECUTED AND IS FILED AS AN EXHIBIT
TO THIS REGISTRATION STATEMENT. AN ORIGINAL POWER OF ATTORNEY FOR EACH OF THE
OTHER OFFICERS AND DIRECTORS OF THE REGISTRANT HAS BEEN EXECUTED AND IS INCOR-
PORATED BY REFERENCE IN THIS REGISTRATION STATEMENT.
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
4. Specimen certificate of shares of Capital Stock of
Registrant.
5(b). Renewal, dated May 20, 1997, of Investment Management
Agreement.
6(b). Renewal, dated July 31, 1997, of Distribution Agree-
ment.
10. Opinion of Fried, Frank, Harris, Shriver & Jacobson.
11. Consent of Independent Public Accountants.
16. Schedule of Computation of Yield Figures.
17. Financial Data Schedule.
99(b). Certified copy of resolution of Board of Directors
authorizing the signing of the names of directors and
officers on the Registration Statement pursuant to
power of attorney.
99(c). Original Power of Attorney for Judith M. Stockdale
authorizing, among others, Gifford R. Zimmerman and
Larry W. Martin to execute the Registration Statement
on her behalf as one of the Registrant's Directors.
</TABLE>
<PAGE>
Exhibit 4
- -------------- --------------
NUMBER SHARES
- -------------- --------------
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
Incorporated Under the Laws of the State of Maryland
This is to certify that SEE REVERSE FOR
CERTAIN DEFINITIONS
is the owner of
------------------
CUSIP 670634 10 4
------------------
- ---------===============================================================--------
fully paid and non-assessable shares of the par value of one-cent ($.01) each of
the common stock of Nuveen Tax-Exempt Money Market Fund, Inc., transferable on
the books of the Corporation 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 Articles of Incorporation and By-Laws of the Corporation, each
as amended, copies of which are on file with the Transfer Agent. This
certificate is not valid unless countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
/s/ G. R. Zimmerman
Assistant Secretary, Nuveen Tax-Exempt Money Market Fund, Inc.
[SEAL] NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC. SEAL 1980 MARYLAND
[THE FOLLOWING IS VOID]
Dated:
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
/s/ Timothy R. Schwertfeger Authorized Signature
Chairman of the Board, Nuveen Tax-Exempt Money Market Fund, Inc.
Countersigned
SHAREHOLDER SERVICES, INC.
Denver (Colo.) Transfer Agent
By
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT- ______ Custodian _______ under Uniform gifts to Minors Act
(Cust) (Minor)
_______
(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 Stock represented by the within certificate, and do hereby irrevocably
constitute and appoint__________________________________________________________
________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.
Dated, _____________________ Notice: The signature to this assignment must
correspond with the name as written upon the
face of the certificate in every particular,
without alteration or enlargement or any change
whatever.
Owner
____________________________ The signature(s) must be guaranteed by 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 Corporation.
Signature of Co-Owner, if any
_____________________________
Signature(s) guaranteed by:
________________________________________________________________________________
PLEASE NOTE: This document contains a watermark when viewed at an angle. It is
invalid without this watermark: NUVEEN
________________________________________________________________________________
This Space Must Not Be Covered In Any Way
<PAGE>
EXHIBIT 5(b)
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT
------------------------------------------
This Agreement made this 20th day of May, 1997 by and between Nuveen Tax-Exempt
Money Market Fund, Inc., a Maryland corporation (the "Fund"), and Nuveen
Advisory Corp., a Delaware corporation (the "Adviser");
WHEREAS, the parties hereto are the contracting parties under that certain
Investment Management Agreement (the "Agreement") pursuant to which the Adviser
furnishes investment management and other services to the Fund; and
WHEREAS, the Agreement terminates August 1, 1997 unless continued in the manner
required by the Investment Company Act of 1940; and
WHEREAS, the Board of Directors, at a meeting called for the purpose of
reviewing the Agreement, have approved the Agreement and its continuance until
August 1, 1998 in the manner required by the Investment Company Act of 1940.
NOW THEREFORE, in consideration of the mutual covenants contained in the
Agreement the parties hereto do hereby continue the Agreement in effect until
August 1, 1998 and ratify and confirm the Agreement in all respects.
NUVEEN TAX-EXEMPT
MONEY MARKET FUND, INC.
By: /s/ Gifford R. Zimmerman
------------------------------
Vice President
ATTEST:
/s/ Karen L. Healy
- -----------------------------
Assistant Secretary
NUVEEN ADVISORY CORP.
By: /s/ J. Thomas Futrell
------------------------------
Vice President
ATTEST:
/s/ Larry Martin
- -----------------------------
Assistant Secretary
<PAGE>
EXHIBIT 6(b)
Renewal of Distribution Agreement
---------------------------------
This Agreement made this 31st day of July, 1997 by and between Nuveen Tax-Exempt
Money Market Fund, Inc., a Maryland corporation (the "Fund"), and John Nuveen &
Co. Incorporated, a Delaware corporation (the "Underwriter");
WHEREAS, the parties hereto are the contracting parties under that certain
Distribution Agreement (the "Agreement") pursuant to which the Underwriter acts
as agent for the distribution of shares of the Fund; and
WHEREAS, the Agreement terminates August 1, 1997 unless continued in the manner
required by the Investment Company Act of 1940;
WHEREAS, the Board of Directors of the Fund, at a meeting called for the purpose
of reviewing the Agreement has approved the Agreement and its continuance until
August 1, 1998 in the manner required by the Investment Company Act of 1940;
NOW THEREFORE, in consideration of the mutual covenants contained in the
Agreement the parties hereto do hereby continue the Agreement in effect until
August 1, 1998 and ratify and confirm the Agreement in all respects.
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
By: /s/ Gifford R. Zimmerman
------------------------------
Vice President
ATTEST:
/s/ Karen L. Healy
- -----------------------------
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By: /s/ Anna Kucinskis
------------------------------
Vice President
ATTEST:
/s/ Larry Martin
- -----------------------------
Assistant Secretary
<PAGE>
Exhibit 10
April 21, 1998
(202) 639-7065
Nuveen Tax-Exempt Money Market Fund, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
RE: Registration Statement on Form N-1A
Under the Securities Act of 1933
(File No. 2-70520)
-----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Nuveen Tax-Exempt Money Market Fund,
Inc., a Maryland corporation (the "Fund"), in connection with the above-
referenced Registration Statement on Form N-1A (as amended, the "Registration
Statement") which relates to the Fund's shares of common stock, par value $.01
(the "Shares"). This opinion is being delivered to you in connection with the
Fund's filing of Post-Effective Amendment No. 19 to the Registration Statement
(the "Amendment") with the Securities and Exchange Commission pursuant to Rule
485(b) of the Securities Act of 1933, as amended (the "1933 Act"). With your
permission, all assumptions and statements of reliance herein have been made
without any independent investigation or verification on our part except to the
extent otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things,
executed copies of the following documents;
(a) a certificate of the Maryland State Department of Assessments and
Taxation (the "Department") as to the existence and good standing of
the Fund;
(b) copies, certified by the Department, of the Fund's Articles of
Incorporation and of all amendments and all supplements thereto (the
"Charter");
(c) a certificate executed by Karen L. Healy, the Assistant Secretary of
the Fund, certifying as to, and attaching copies of, the Fund's
Charter and By-Laws, as amended (the "By-Laws"), and certain
resolutions adopted by the Board of Directors of the fund authorizing
the issuance of the Shares; and
(d) a printer's proof, dated April 21, 1998, of the Amendment.
<PAGE>
Nuveen Tax-Exempt Money Market Fund, Inc.
April 21, 1998
Page 2
In our capacity as counsel to the Fund, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of all original or certified copies, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduced copies. As to various questions of fact relevant to such
opinion, we have relied upon, and assume the accuracy of, certificates and oral
or written statements of public officials and officers or representatives of the
Fund. 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 (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Fund's
Charter and for the consideration described in the Registration Statement, will
be legally issued, fully paid and nonassessable under the laws of the State of
Maryland.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Thomas S. Harman
-------------------------------------
Thomas S. Harman
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated April 15, 1998, and to all references to our Firm included in or made a
part of this registration statement of Nuveen Tax-Exempt Money Market Fund, Inc.
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 20, 1998
<PAGE>
EXHIBIT 16
SCHEDULE OF COMPUTATION OF YIELD FIGURES
I. Current Yield
a. Current Yield is calculated as follows:
i. Net investment income per share for the seven
day period
------------------------------------------------- = Base Period Return
Value of account at beginning of seven-day pe-
riod
ii. Base Period Return X 365/7 = Current Yield
b. Calculation of Current Yield for seven-day period ended February 28,
1998:
365
( .0005965 ---
------- X 7
= 3.11%
1.00
II. Effective Yield )
a. Effective Yield is calculated as follows:
(Base Period Return + 1) 365/7 - 1 = Effective Yield
b. Calculation of Effective Yield for seven-day period ended February 28,
1998:
365/7
[ (.0005965 ]
------- + 1
1.00 - 1 =
) 3.16%
III. Taxable Equivalent Yield
a. The Taxable Equivalent Yield formula is as follows:
Tax Exempt Yield
-----------------------
(1 - federal income
tax rate)
b. Based on a maximum Federal income tax rate of 39.6%, the Taxable Equiva-
lent Yield for the seven-day period ended February 28, 1998 is as follows:
3.11%
-------
1 - .396
= 5.15%
1
<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 to such
documents.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 466160
<INVESTMENTS-AT-VALUE> 466160
<RECEIVABLES> 4481
<ASSETS-OTHER> 4187
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 474828
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1326
<TOTAL-LIABILITIES> 1326
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 473502
<SHARES-COMMON-STOCK> 473502
<SHARES-COMMON-PRIOR> 515403
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 473502
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18509
<OTHER-INCOME> 0
<EXPENSES-NET> 2220
<NET-INVESTMENT-INCOME> 16289
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 16287
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 16287
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2020884
<NUMBER-OF-SHARES-REDEEMED> (2069504)
<SHARES-REINVESTED> 6718
<NET-CHANGE-IN-ASSETS> (41901)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1994
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2220
<AVERAGE-NET-ASSETS> 499533
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .440
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 99(b)
Certified Resolution
--------------------
The undersigned, Gifford R. Zimmerman, hereby certifies, on behalf of Nuveen
Tax-Exempt Money Market Fund, Inc. (the "Fund"), (1) that he is the duly
elected, qualified and acting Assistant Secretary of the Fund, and that as such
Assistant Secretary he has custody of its corporate books and records, (2) that
attached to this Certificate is a true and correct copy of a resolution duly
adopted by the Board of Directors of the Fund at a meeting held on January 22,
1998, and (3) that said resolution has not been amended or rescinded and remains
in full force and effect.
April 13, 1998
/s/ Gifford R. Zimmerman
-----------------------------------------
Gifford R. Zimmerman, Assistant Secretary
<PAGE>
FURTHER RESOLVED, that each member of the Board and officer of the Fund who may
be required to execute the registration statement on Form N-1A, or any amendment
or amendments thereto, be, and each of them hereby is, authorized to execute a
power of attorney appointing Timothy R. Schwertfeger, Anthony T. Dean, Bruce P.
Bedford, Larry W. Martin, Gifford R. Zimmerman, and Thomas S. Harman, and each
of them his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the registration statement, and any and all
amendments thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done, as fully to all intents and purposes as he might or could
do in person, and ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
<PAGE>
Exhibit 99(c)
NUVEEN TAX-EXEMPT MONEY MARKET FUND, INC.
------------------
POWER OF ATTORNEY
------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above
referenced organization, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, ANTHONY T. DEAN, BRUCE P. BEDFORD, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, AND THOMAS S. HARMAN 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 1933, as amended, and the Investment Company
Act of 1940, as amended, 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, 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 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 director of the above-referenced
organization has hereunto set his hand this 1st day of July, 1997.
/s/ Judith M. Stockdale
-----------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 1st day of July, 1997, 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.
- --------------------------------
"OFFICIAL SEAL"
VIRGINIA L. CORCORAN
Notary Public, State of Illinois
My Commission Expires 10/26/97
- --------------------------------
/s/ Virginia L. Corcoran
--------------------------------
My Commission Expires: 10/26/97
