<PAGE>
As filed with the Securities and Exchange Commission on June 2, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [_]
File No. 2-78736
Pre-Effective Amendment No.___ [_]
Post-Effective Amendment No. 16 [X]
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [_]
File No. 811-3531
Amendment No. 17 [X]
NUVEEN TAX-FREE RESERVES, INC.
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive, Chicago, 60606
Illinois (Zip Code)
(Address of Principal Executive
Offices)
Registrant's Telephone Number, Including Area Code: (312) 917-7700
Gifford R. Zimmerman, Esq.--Vice 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 [_] on (date) pursuant to paragraph
pursuant to paragraph (b) (a)(1)
[_] on June 4, 1997 pursuant [X] 75 days after filing pursuant
to paragraph (b) to paragraph (a)(2)
[_] 60 days after filing [_] on (date) pursuant to paragraph
pursuant to paragraph (a)(1) (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. A RULE 24F-2 NOTICE FOR THE
REGISTRANT'S FISCAL YEAR ENDED FEBRUARY 28, 1997, WAS FILED ON OR ABOUT APRIL
29, 1997.
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE*
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock, $.01 par value.. 147,858,855 $1.00 $147,858,855 $100.00
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
*Registrant has elected to calculate its filing fee in the manner described in
Rule 24e-2 under the Investment Company Act of 1940. The total amount of secu-
rities redeemed during the previous fiscal year was $467,712,524. The total
amount of redeemed securities used for reduction pursuant to Rule 24e-2(a) or
Rule 24f-2(c) was $320,183,669. The amount of redeemed securities being used
for reduction of the registration fee in this Amendment is $147,528,855.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
NUVEEN TAX-FREE RESERVES, INC.
CONTENTS
OF
POST-EFFECTIVE AMENDMENT NO. 16
TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FILE NO. 2-78736
AND
AMENDMENT NO. 17
TO
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
FILE NO. 811-3531
This Registration Statement comprises the following papers and contents:
The Facing Sheet
Table of Contents
Cross-Reference Sheet
Part A--The Prospectus
Part B--The Statement of Additional Information
Copy of Annual Report to Shareholders (the financial
statements from which are incorporated by reference into the
Statement of Additional Information)
Part C--Other Information
Signatures
Index to Exhibits
Exhibits
<PAGE>
NUVEEN TAX-FREE RESERVES, INC.
-----------------
CROSS REFERENCE SHEET
PART A--PROSPECTUS
<TABLE>
<CAPTION>
ITEM IN
PART A
OF FORM N-
1A PROSPECTUS LOCATION
---------- -------------------
<C> <S>
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--Capital Stock; 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 and Taxes
(g) Dividends and Taxes--Tax Matters
(h) Not applicable
7(a) Management of the Fund
(b) Net Asset Value; How to Buy Fund Shares
(c) How to Buy Fund Shares
(d) How to Buy Fund Shares
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM IN
PART A
OF FORM N-
1A PROSPECTUS LOCATION
---------- -------------------
<C> <S>
(e) How to Buy Fund Shares--Distribution and Service Plan
(f) How to Buy Fund Shares--Distribution and Service Plan
8(a) How to Redeem Fund Shares
(b) How to Redeem Fund Shares--Regular Redemption Procedure
(c) Not applicable
(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 N- LOCATION IN STATEMENT
1A OF ADDITIONAL INFORMATION
---------- -------------------------
<C> <S>
10 Cover Page
11 Cover Page
12 Not applicable
13 Fundamental Policies and Investment Portfolio
14(a) Management
(b) Management
(c) Management
15(a) Not applicable
(b) Not applicable
(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) Distribution and Service Agreements, see also "How to Buy Fund Shares--
Distribution and Service Plan" in the Prospectus
(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 "How to Redeem Fund Shares" and "General Information--Capital Stock" in
the Prospectus
(b) Not applicable
19(a) See "How to Buy Fund Shares" in the Prospectus
(b) Net Asset Value; Financial Statements--Statement of Net Assets; see also
"Net Asset Value" in the Prospectus
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM IN
PART B
OF FORM N- LOCATION IN STATEMENT
1A OF ADDITIONAL INFORMATION
- ---------- -------------------------
<S> <C>
(c) See "How to Redeem Fund Shares--Redemption in Kind" in the Prospectus
20 Tax Matters
21(a) Distribution and Service Plan; see also "How to Buy Fund Shares" in the
Prospectus
(b) Not applicable
(c) Not applicable
22(a) Yield Information
(b) Not applicable
23 Incorporated by reference to Annual Report
</TABLE>
<PAGE>
PART A--PROSPECTUS
NUVEEN TAX-FREE RESERVES, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
NUVEEN
Money Market
Funds
June 24, 1997
Prospectus
Dependable, tax-free income
to help you keep more of
what you earn.
[PHOTO OF COUPLE APPEARS HERE]
Reserves
<PAGE>
Nuveen Tax-Free Reserves, Inc.
JUNE 4, 1997
PROSPECTUS
Nuveen Tax-Free Reserves, 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 Fund management,
with stability of principal and the maintenance of
liquidity. The Fund will value its portfolio securi-
ties at amortized cost and seek to maintain a net
asset value of $1.00 per share. There are no sales or
redemption charges. The minimum initial investment is
$1,000. The Fund is designed as a vehicle for direct
investment of temporary cash balances in tax-exempt
money market instruments.
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 Informa-
tion" dated June 4, 1997, containing further informa-
tion 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. Incor-
porated by calling (800) 621-7227.
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 DISAP-
PROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
John Nuveen & Co. Incorporated
For information, call toll-free (800) 621-7227
---
1
<PAGE>
Contents
<TABLE>
<C> <S>
2 Summary of Fund Expenses
3 Highlights
4 Financial Highlights
4 Yield
5 The Fund and its Investment
Objective and Policies
7 Management of the Fund
7 Dividends and Taxes
8 Net Asset Value
9 How to Buy Fund Shares
11 How to Redeem Fund Shares
13 General Information
14 Taxable Equivalent Yield Tables
</TABLE>
Summary of 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 Feb-
ruary 28, 1997.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
- ---------------------------------------------------
<S> <C>
Sales charges imposed on purchases None
Sales charges imposed on reinvested dividends None
Redemption fees None
Exchange fees None
</TABLE>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ------------------------------------------------------------
<S> <C>
Management fees .50%
12b-1 fees .05%
Other operating expenses, after expense reimbursements .20%
- ------------------------------------------------------------
Total expenses, after expense reimbursements .75%
- ------------------------------------------------------------
</TABLE>
The following example illustrates the expenses that you 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 below,
the Fund charges no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$8 $24 $42 $93
</TABLE>
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 remains the same in each of the periods.
The purpose of the foregoing tables is to assist you in understanding all
expenses and fees that you would bear directly or indirectly as an investor in
the Fund.
As discussed under "Management of the Fund" and reflected in the tables above,
the management fee is reduced or Nuveen Advisory assumes certain Fund expenses
in an amount necessary to prevent the total expenses of the Fund in any fiscal
year from exceeding .75 of 1% of average daily net assets. Without expense
reimbursements, for the fiscal year ended February 28, 1997, other operating
expenses would have been .25 of 1% of the average daily net assets, and total
expenses would have been .80 of 1% of the average daily net assets. See "Man-
agement of the Fund."
---
2
<PAGE>
Highlights
Nuveen Tax-Free Reserves, Inc. (the "Fund") is an open-end, diversified manage-
ment investment company with the objective of providing, through investment in
a professionally managed portfolio of high quality short-term Municipal Obliga-
tions, 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 will value its portfolio
at amortized cost and seek 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 8 and "The Fund and Its Investment Objective and Policies" on page 5.
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 inter-
est 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.
Distributions may not be exempt from state or local income taxes. See "Divi-
dends and Taxes" on page 7.
HOW TO BUY FUND SHARES
Fund shares may be purchased on days on which the Federal Reserve Bank of Bos-
ton 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 $1,000. Subsequent investments for the
account of the shareholder must be in amounts of $100 or more. See "How to Buy
Fund Shares" on page 9. For further information about the Fund or for assis-
tance in opening an account, please call Nuveen toll-free at (800) 621-7227.
HOW TO REDEEM FUND SHARES
Shareholders may redeem shares at the 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 11.
DIVIDENDS AND REINVESTMENT
The Fund will declare dividends daily from its accumulated net income and dis-
tribute the dividends monthly in the form of additional shares or, at the
option of the investor, in cash. See "Dividends and Taxes" on page 7.
INVESTMENT ADVISER AND PRINCIPAL UNDERWRITER
John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter of the
Fund. The Fund has a Distribution and Service Plan under which the Fund and
Nuveen pay fees to qualifying organizations for servicing shareholder accounts.
See "How to Buy Fund Shares--Distribution and Service Plan" on page 9. Nuveen
Advisory Corp. ("Nuveen Advisory"), a wholly-owned subsidiary of Nuveen, is the
Fund's investment adviser and receives an annual management fee ranging from .5
of 1% of the first $500 million of average daily net assets to .45 of 1% of
average daily net assets over $1 billion. See "Management of the Fund" on page
7.
INVESTMENTS
The Fund invests primarily in municipal money market instruments. The Fund may
invest a portion of its assets in debt obligations which are not rated, and
variable rate or floating rate obligations. Investors are urged to read the
descriptions of these investments and practices set forth in this Prospectus.
See "Investment Policies" beginning on page 5.
The information set forth above should be read in conjunction with the detailed
information set forth elsewhere in this Prospectus.
---
3
<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 appearing in the Fund's Annual
Report, and should be read in conjunction with the financial statements and
related notes appearing in the Annual Report.
Selected data for a share of Common Stock outstanding throughout each period is
as follows:
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------- ------------------------
NET
REALIZED AND DIVIDENDS NET TOTAL
NET ASSET UNREALIZED FROM TAX- ASSET RETURN
VALUE NET GAIN (LOSS) EXEMPT NET DISTRIBUTIONS VALUE ON NET
BEGINNING INVESTMENT FROM INVESTMENT FROM CAPITAL END OF ASSET
OF PERIOD INCOME* INVESTMENTS INCOME GAINS PERIOD VALUE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED,
2/28/97 $1.000 $.029 $ - $(.029) $ - $1.000 2.87%
2/29/96 1.000 .032 - (.032) - 1.000 3.23
2/28/95 1.000 .025 - (.025) - 1.000 2.46
2/28/94 1.000 .018 - (.018) - 1.000 1.84
2/28/93 1.000 .023 - (.023) - 1.000 2.34
5 MONTHS ENDED 2/29/92 1.000 .015 - (.015) - 1.000 1.45
YEAR ENDED,
9/30/91 1.000 .046 - (.046) - 1.000 4.57
9/30/90 1.000 .055 - (.055) - 1.000 5.45
9/30/89 1.000 .057 - (.057) - 1.000 5.70
9/30/88 1.000 .045 - (.045) - 1.000 4.52
- -------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------
RATIO OF NET RATIO OF NET
RATIO OF INVESTMENT RATIO OF INVESTMENT
NET ASSETS EXPENSES TO INCOME TO EXPENSES TO INCOME TO
END OF AVERAGE NET AVERAGE NET AVERAGE NET AVERAGE NET
PERIOD (IN ASSETS BEFORE ASSETS BEFORE ASSETS AFTER ASSETS AFTER
THOUSANDS) REIMBURSEMENT REIMBURSEMENT REIMBURSEMENT* REIMBURSEMENT*
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED,
2/28/97 $304,087 .80% 2.82% .75% 2.87%
2/29/96 339,662 .79 3.18 .75 3.22
2/28/95 351,606 .78 2.40 .75 2.43
2/28/94 404,201 .80 1.78 .75 1.83
2/28/93 450,746 .74 2.35 .74 2.35
5 MONTHS ENDED 2/29/92 477,127 .75+ 3.48+ .75+ 3.48+
YEAR ENDED,
9/30/91 451,808 .72 4.56 .72 4.56
9/30/90 430,206 .73 5.45 .73 5.45
9/30/89 390,258 .72 5.69 .72 5.69
9/30/88 409,653 .73 4.52 .73 4.52
- -------------------------------------------------------------------------------------------------
</TABLE>
* Reflects the waiver of certain management fees and reimbursement of certain
other expenses by the Adviser, if applicable (see Notes to Financial
Statements in the Annual Report).
+ Annualized.
Yield
From time to time, the Fund may advertise its "yield," "effective yield" and
"taxable equivalent yield." The Fund's "yield" refers to the rate of income
generated by an investment in the Fund over a specified seven-day period,
expressed as an annualized figure. "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. Yield figures will fluctuate over time. "Tax-
able 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 for the Fund. Additional
information concerning performance figures appears in the Statement of
Additional Information.
Based on the seven-day period ended February 28, 1997, the yield, effective
yield and taxable equivalent yield (using the maximum federal income tax rate
of 39.6%) for the Fund were 2.79%, 2.83% and 4.62%, respectively.
This Prospectus may be in use for a full year and it can be expected that dur-
ing this period there will be material fluctuations in yield from that quoted
above. For information as to current yields, please call Nuveen at (800) 621-
7227.
---
4
<PAGE>
The Fund and Its Investment Objective
and Policies
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 funda-
mental 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 assur-
ance that the Fund's objective will be achieved.
INVESTMENT POLICIES
The Fund's investment assets 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 Commis-
sion ("SEC"), and are: (1) bonds rated within the two highest long-term grades
by Moody's Investors Service, Inc. ("Moody's") (Aaa or Aa) or by Standard &
Poor's Corporation ("S&P") (AAA or AA), 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, but
which, in the opinion of Nuveen Advisory, have credit characteristics equiva-
lent to obligations rated Aa, MIG-1, VMIG-1 or Prime-1 by Moody's, or AA, SP-1
or A-1 by S&P; and (3) tax-exempt project notes which at the time of purchase
are secured by the full faith and credit of the U.S. Government as to payment
of principal and interest. To the extent that unrated Municipal Obligations may
be less liquid, there may be somewhat greater risks in purchasing unrated
Municipal Obligations than in purchasing comparable but rated Municipal Obliga-
tions.
The investment portfolio of the Fund will be limited to obligations that mature
within 397 days from the date of acquisition or that have variable or floating
rates of interest (which 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 and regulations issued by the SEC under the Investment Com-
pany 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 pay-
ment at par on such an instrument could be adversely affected by events occur-
ring between the date the Fund elects to tender the instrument and the date
proceeds are due.
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 issued to provide construction financing for
specific projects, and bank notes issued by governmental authorities to commer-
cial banks as evidence of borrowings. Since these short-term securities fre-
quently 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.
To help protect against such losses, the Fund has obtained from MBIA Insurance
Corp. a commitment to issue, subject to certain conditions and at the Fund's
request, insurance policies to cover certain Municipal Obligations held by the
Fund that are backed by a credit agreement from one of a number of banks previ-
ously approved by MBIA. If the bank were to deteriorate financially (under
standards set forth in MBIA's commitment), the Fund could elect to purchase
insurance on the underlying Municipal Obligation from MBIA, which would insure
payment of regularly scheduled principal of and interest on the Municipal Obli-
gation. Although this insurance would not guarantee the market value of the
Municipal Obligations or the value of Fund shares, the Fund believes that its
ability to obtain such insurance will enable the Fund to hold or sell theses
securities at a price at or near their par value.
The Fund may purchase but to date has not purchased and has no present inten-
tion to purchase "temporary investments," the income from which is subject to
federal income tax. Under ordinary circumstances, the Fund may not invest more
than 20% of its net assets in such temporary investments. However, during
extraordinary circumstances the Fund may, for defensive purposes, invest more
than 20% of its assets in such temporary investments. The Fund will invest only
in temporary investments with remaining maturities of 397 days or less which,
in the opinion of Nuveen Advisory, are of "high grade" quality. 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 acquisi-
tion of securities.
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,
-5--
<PAGE>
1997 the average maturity of the Fund's portfolio ranged from 26 to 53 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 gener-
ally 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 Obliga-
tions, 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.
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 reve-
nues.
Municipal Obligations also include very short-term unsecured, negotiable prom-
issory notes, issued by states, municipalities, and their agencies, which are
known as "tax-exempt commercial paper" or "municipal paper." Payment of princi-
pal 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 men-
tioned above.
The yields on Municipal Obligations are dependent on a variety of factors,
including the condition of the general money market and the Municipal Obliga-
tion market, the size of a particular offering, the maturity of the obligation
and the rating of the issue. 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. 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 reg-
ular 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 pur-
chase securities on a when-issued or delayed delivery basis may involve an ele-
ment 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.
CERTAIN FUNDAMENTAL INVESTMENT POLICIES
The Fund, as a fundamental policy, may not, without the approval of the holders
of a majority of the outstanding shares of the Fund: (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) 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; (3) 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 (4) concentrate more than 25% of its
assets in the securities of issuers in any sin-
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6
<PAGE>
gle industry; provided, however, that such limitation shall not be applicable
to the purchase of Municipal Obligations issued by governments or political
subdivisions of governments, and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. For purposes of applying the
policies of clauses (1) and (2), the "issuer" of a security shall be deemed to
be the entity whose assets and revenues are committed to the payment of princi-
pal 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).
For a more complete description of the fundamental and non-fundamental invest-
ment policies summarized above and the other fundamental investment policies
applicable to the Fund, see the Statement of Additional Information. The
investment policies of the Fund 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.
Management of the Fund
The management of the Fund, including general supervision of the duties per-
formed 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, provides office facilities and equipment and certain cleri-
cal, 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:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET
VALUE MANAGEMENT FEES
- -------------------------------------------
<S> <C>
For the first $500 million .500 of 1%
For the next $500 million .475 of 1%
For assets over $1 billion .450 of 1%
- -------------------------------------------
</TABLE>
All fees and expenses are accrued daily and deducted before payment of divi-
dends to investors. In addition to the management fee of Nuveen Advisory, the
Fund pays all other costs and expenses of its operations. Included in the
expenses paid by the Fund is its share of payments under the Distribution and
Service Plan.
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 and its share of payments under the Distribu-
tion and Service Plan, but excluding interest, taxes, fees incurred in acquir-
ing and disposing of portfolio securities and extraordinary expenses) in any
fiscal year from exceeding .75 of 1% of the average daily net asset value of
the Fund. For the fiscal year ended February 28, 1997, management fees amounted
to .50 of 1% of the Fund's average daily net assets, and total expenses, net of
applicable expense reimbursements, amounted to .75 of 1% of average daily net
assets. Without expense reimbursements, total expenses for the fiscal year
ended February 28, 1997 would have been .80 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 bond funds (the
"Nuveen Exchange-Traded Funds"). As of the date of this Prospectus, Nuveen
Advisory manages approximately $34 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. Over 1,000,000
individuals have invested to date in Nuveen's funds and unit 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.
Dividends and Taxes
DIVIDENDS
All of the net income of the Fund is declared on each calendar day as a divi-
dend 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. Divi-
dends 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.
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7
<PAGE>
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 regu-
lated investment company, a 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, a 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 share-
holders 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 taxable
temporary investments and net short-term capital gains, if any, realized by the
Fund will be taxable to shareholders as ordinary income. So long as the Fund
qualifies as a regulated investment company under the Code, distributions to
shareholders will not qualify for the dividends received deduction for corpora-
tions. 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 pur-
chase or carry tax-free investments, such as shares of the Fund, is not deduct-
ible. 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 substan-
tial users. Accordingly, the Fund may not be an appropriate investment for
shareholders who are considered either a "substantial user" or a "related per-
son" 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 spe-
cific 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 lia-
bility 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 corpo-
rations 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 divi-
dends and certain other payments paid to non-corporate holders of shares who
have not furnished to the Fund their correct taxpayer identification number (in
the case of individuals, their social security number) and certain certifi-
cates, 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 ret-
roactive 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.
STATE AND LOCAL TAX MATTERS
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 share-
holders of the Fund are advised to consult their own tax advisers in that
regard.
Net Asset Value
Net asset value of the Fund's shares will be determined by The Chase Manhattan
Bank, the Fund's custodian, as of 12:00 noon Eastern Time, on each day on which
the Federal Reserve Bank of Boston is normally open for business (a "business
day") and as of 12:00 noon, Eastern Time, 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.
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8
<PAGE>
The Fund seeks to maintain a net asset value of $1.00 per share. In this con-
nection, the Fund values its portfolio securities on the basis of their amor-
tized 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 the amortized cost
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.
How to Buy Fund Shares
IN GENERAL
Fund shares may be purchased on business days (as defined under "Net Asset Val-
ue") at the net asset value which is next computed after receipt of an order in
proper form and receipt of payment in federal funds. Purchases by federal funds
are recommended. However, purchases may also be made by bank wire, Federal
Reserve draft or check. The minimum initial investment is $1,000. Subsequent
investments for the account of the shareholder must be in amounts of $100 or
more. The Fund reserves the right to reject purchase orders and to waive or
increase the minimum investment requirements. The Fund has waived the foregoing
minimum investment requirements for holders of certificates of beneficial
interest in the various unit trusts sponsored by Nuveen who are reinvesting
distributions from such investment trusts in the Fund. The Fund reserves the
right to reject purchase orders and to waive or increase the minimum investment
requirements.
In order to maximize the earnings on its assets, the Fund strives to be
invested as completely as practicable. The Fund is normally required to make
settlement in federal funds for securities purchased. Accordingly, orders for
Fund shares may be made, and become effective on business days, as follows:
PURCHASE BY TELEPHONE
To open an account, call Nuveen toll-free at (800) 858-4084 to obtain an
account number and instructions. Information concerning the account such as
name, address and social security or tax identification number will be taken
over the telephone. Payments may be made by wire transfer to the United Mis-
souri Bank of Kansas City, N.A. as follows:
United Missouri Bank of Kansas City, N.A.
ABA #101000695
Nuveen Tax-Free Reserves, Inc.
Shareholder Account No. (see above):
Shareholder Account Name:
You 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
by 3:00 p.m., Eastern Time, the order is effective that day. If both the order
and federal funds are not received by the times specified above, the order will
become effective the following business day.
PURCHASE BY MAIL
To open an account, complete an application form and mail it with a check or
Federal Reserve draft to Nuveen Tax-Free Reserves, Inc., P.O. Box 5330, Denver,
Colorado 80217-5330. Subsequent investments may be made by mailing a check with
the investor's account number to the above address. 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.
FUND DIRECT - ELECTRONIC FUNDS TRANSFER
You can use Fund Direct to link your Fund account to your account at your bank
or other financial institution which will enable you to send money electroni-
cally between those accounts to perform a variety of account transactions.
These include purchases of shares by telephone, investments under a Systematic
Investment Plan, and sending dividends and distributions, redemption payments
or Systematic Withdrawal Plan payments directly to your bank account. To acti-
vate Fund Direct privileges, just complete the appropriate section of the
enclosed Account Application, or an Account Update Form. To obtain an Account
Update Form, call Nuveen at (800) 621-7227. Fund Direct privileges will apply
to each shareholder listed in the registration on your account as well as to
your Authorized Dealer representative of record unless you indicate otherwise
in writing. After you establish Fund Direct privileges for your account, any
change of bank account information must be made by signature-guaranteed
instructions to SSI as described in "How to Redeem Fund Shares."
Purchases may be made by telephone only after your account has been estab-
lished. To purchase shares in amounts up to $250,000 through a telephone repre-
sentative, call SSI at (800) 621-7227. The purchase payment will be debited
from your bank account.
PURCHASE THROUGH A SECURITIES DEALER OR SERVICE ORGANIZATION
To open an account through a bank or a securities broker or dealer ("service
organization"), investors should send money to that organization for transmis-
sion to the Fund and furnish it with the information required in the Applica-
tion Form. The Fund has a distribution plan pursuant to which payments are made
to service organizations which provide assistance in distributing shares or
provide services to shareholders of the Fund. See "Distribution and Service
Plan."
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9
<PAGE>
PURCHASE BY REINVESTMENT OF NUVEEN UNIT TRUST DISTRIBUTIONS
Unitholders of Nuveen Unit Trusts may purchase shares of the Fund by automati-
cally reinvesting distributions from their Nuveen Unit Trust. To obtain infor-
mation on share purchases through investment of Nuveen Unit Trust
distributions, check the applicable box on the enclosed Application Form or
call Nuveen toll-free at (800) 237-0910.
COMMENCEMENT OF DIVIDENDS
Shares are deemed to have been purchased when an order becomes effective and
are entitled to dividends commencing on the day the order becomes effective.
THE FUND OFFERS TWO DIFFERENT TYPES OF SYSTEMATIC INVESTMENT PROGRAMS
SYSTEMATIC INVESTMENT PLAN
Once you have established a Fund account, you may make regular investments in
your Fund in an amount of $50 or more each month by authorizing Shareholder
Services, Inc. ("SSI") to draw preauthorized checks on your bank account. There
is no obligation to continue payments and you may terminate your participation
at any time at your discretion. No charge is made in connection with this Plan,
and there is no cost to the Fund. To obtain an Account Update Form which you
can use to initiate a Systematic Investment Plan, call Nuveen toll-free at
(800) 621-7227.
PAYROLL DIRECT DEPOSIT PLAN
Once you have established a Fund account, you may, with your employer's con-
sent, make regular investments in Fund shares of $50 or more per month by
authorizing your employer to deduct this amount automatically from your pay-
check. There is no obligation to continue payments and you may terminate your
participation at any time at your discretion. No charge is made for this Plan,
and there is no cost to the Fund. To obtain an application form for the Payroll
Direct Deposit Plan, check the applicable box on the enclosed Application Form
or call Nuveen toll-free at (800) 621-7227.
OTHER SHAREHOLDER PROGRAMS
EXCHANGE PRIVILEGES
You may exchange shares of the Fund for the appropriate class of shares of any
other open-end management investment company with reciprocal exchange privi-
leges advised by Nuveen Advisory (the "Nuveen Funds"), provided that the Nuveen
Fund into which shares are to be exchanged is offered in the shareholder's
state of residence and that the shares to be exchanged have been held by the
shareholder for a period of at least 15 days. You may exchange Fund shares by
calling (800) 621-7227 or by mailing your written request to SSI. Shares of
Nuveen Funds purchased subject to a front-end sales charge may be exchanged for
shares of the Fund or any other Nuveen Fund at the next determined net asset
value without any front-end sales charge. No CDSC otherwise applicable will be
assessed on an exchange, and the holding period of your investment will be car-
ried over to the new fund for purposes of determining any future CDSC. You may
not exchange B shares for shares of a Nuveen money market fund. Shares of any
Nuveen Fund purchased through dividend reinvestment or through reinvestment of
Nuveen Unit Trust distributions (and any dividends thereon) may be exchanged
for Class A shares of any Nuveen Fund without a front-end sales charge.
Exchanges of shares with respect to which no front-end sales charge has been
paid will be made at the public offering price, which may include a front-end
sales charge, unless a front-end sales charge has previously been paid on the
investment represented by the exchanged shares (i.e., the shares to be
exchanged were originally issued in exchange for shares on which a front-end
sales charge was paid), in which case the exchange will be made at net asset
value. Because certain other Nuveen Funds may determine net asset value and
therefore honor purchase or redemption requests on days when the Fund does not
(generally, Martin Luther King's Birthday, Columbus Day and Veterans Day),
exchanges of shares of one of those funds for shares of the Fund may not be
effected on such days.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the Nuveen Fund into which they are being exchanged.
Exchanges are made based on the relative dollar values of the shares involved
in the exchange, and will be effected by redemption of shares of the Nuveen
Fund held and purchase of the shares of the other Nuveen Fund. For federal
income tax purposes, any such exchange constitutes a sale and purchase of
shares and may result in capital gain or loss. Before exercising any exchange,
you should obtain the Prospectus for the Nuveen Fund into which shares are to
be exchanged and read it carefully. If the registration of the account for the
Fund you are purchasing is not exactly the same as that of the fund account
from which the exchange is made, written instructions from all holders of the
account from which the exchange is being made must be received, with signatures
guaranteed by a member of an approved Medallion Guarantee Program or in such
other manner as may be acceptable to the Fund. The exchange privilege may be
modified or discontinued at any time. If you do not wish to have telephone
exchange privileges, you must indicate this in the "Telephone Services" section
of your Account Application or otherwise notify the Fund in writing of your
desire.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be opened and maintained
for you by SSI. Share certificates will be issued to you only upon written
request to SSI, and no certificates will be issued for fractional shares. The
Fund reserves the right to reject any purchase order and to waive or increase
minimum investment requirements. A change in registration or transfer of shares
held in the name of your financial adviser's firm can only be made by an order
in good form from the financial adviser acting on your behalf.
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10
<PAGE>
Authorized Dealers are encouraged to open single master accounts. However, some
Authorized Dealers may wish to use SSI's sub-accounting system to minimize
their internal recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other than the master
account or sub-accounting service offered by SSI will be required to enter into
a separate agreement with another agent for these services for a fee that will
depend upon the level of services to be provided.
Banks and other organizations through which investors may purchase Fund shares
may impose charges in connection with purchase orders. Investors should contact
their institutions directly to determine what charges, if any, may be imposed.
Subject to the rules and regulations of the SEC, the Fund reserves the right to
suspend the continuous offering of its shares at any time, but such suspension
shall not affect the shareholder's right of redemption as described in "How To
Redeem Fund Shares" below.
DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a Distribution and Service Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act, pursuant to which the Fund and Nuveen pay fees
to service organizations for services rendered in the distribution of shares of
the Fund or the servicing of shareholder accounts. Such services may include,
among other things, establishing and maintaining shareholder accounts; process-
ing purchase and redemption transactions; arranging for bank wires; performing
sub-accounting; answering shareholder inquiries and such other services as
Nuveen may request. Nuveen will enter into Service Agreements with organiza-
tions who render such services. Service payments will be made to such organiza-
tions in annual amounts ranging from .1 of 1% to .2 of 1% of daily average
assets of serviced accounts up to $10 million and .3 of 1% for such assets over
$10 million, half of which will be paid by the Fund. Nuveen may, in its discre-
tion, pay additional amounts from its own resources to a service organization
satisfying certain criteria.
The Plan continues in effect from year to year so long as its continuance is
approved at least annually by a vote of the Board of Directors and a vote of
the non-interested directors. The Plan may not be amended to increase materi-
ally the cost which the Fund may bear under the Plan without the approval of
the non-interested directors and the shareholders, and any other material
amendments of the Plan must be approved by the non-interested directors. Nuveen
also distributes the Nuveen Tax-Exempt Money Market Fund, Inc., a fund with
similar investment objectives in which investments can be made. The Nuveen Tax-
Exempt Money Market Fund, Inc. does not pay a distribution fee from its assets;
however, investors purchasing that fund must meet a higher minimum investment
requirement.
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. You may use the
telephone redemption, check redemption, or the regular redemption procedures
discussed hereafter. The purchase and redemption methods employed will deter-
mine when funds will be available to you. Where the shares to be redeemed have
been purchased by check or through Fund Direct within 15 days prior to the date
the redemption request is received, the Fund will not send the redemption pro-
ceeds until the check or Fund Direct transfer for the purchase has cleared,
which may take up to 15 days. There is no delay when the shares being redeemed
were purchased by wiring federal funds.
CHECK REDEMPTION
Shareholders may request that the Fund provide them with drafts ("Redemption
Checks") drawn on the Fund's account. Shares for which stock certificates have
been issued will not be available for redemption by the use of Redemption
Checks. Redemption Checks may be made payable to the order of any person in an
amount of $500 or more, and dividends are earned until the Redemption Check
clears. Redemption Checks clear through the United Missouri Bank of Kansas
City, N.A. (the "Bank") and are subject to the same rules and regulations that
the Bank applies to checking accounts.
When a Redemption Check is presented, a sufficient number of full and frac-
tional shares in the shareholder's account will be redeemed to cover the amount
of the Redemption Check. Shares for which stock certificates have been issued
will not be available for redemption by the use of Redemption Checks. There
must be sufficient shares in the shareholder's account to cover the amount of
each Redemption Check written or the check will be returned. Checks should not
be used to close an account. Shareholders wishing to use Redemption Checks must
complete the appropriate section of the Application Form and submit the
enclosed signature card.
This check redemption privilege may be modified or terminated at any time by
the Fund or the Bank. The check redemption feature does not constitute a bank
checking account.
BY WRITTEN REQUEST
You may redeem shares by sending a written request for redemption directly to
the Fund, c/o Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado
80217-5330, accom-
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11
<PAGE>
panied 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 signature must be guaranteed by a member of an
approved Medallion Guarantee Program or in such other manner as may be accept-
able to the Fund. 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.
TELEPHONE REDEMPTION BY CHECK
Unless you have declined telephone privileges, you may sell fund shares by
calling (800) 621-7227. Your telephone redemption must not exceed $50,000 and
you may not redeem by telephone shares held in certificate form. While you or
anyone authorized by you may make telephone redemption requests, redemption
checks will be issued only in the name of the shareholder of record and will be
mailed to the address of record. If your telephone request is received prior to
4:00 p.m. Eastern Time, the shares to be redeemed earn income on the day the
request is made, and the redemption will be effected and the redemption check
will be mailed on the following business day. For requests received after 4:00
p.m. Eastern Time, the shares to be redeemed earn income through the following
business day, and the redemption is effected and the redemption check will be
mailed on the second business day.
Nuveen, the transfer agent, or the Fund will be liable for losses resulting
from unauthorized telephone redemptions only if they do not follow reasonable
procedures designed to verify the identity of the caller. You should immedi-
ately verify your trade confirmations when you receive them. Telephone redemp-
tions will not be honored for 30 days after the address on your account has
changed.
TELEPHONE REDEMPTION VIA FUND DIRECT
To redeem shares held in non-certificate form by telephone with the redemption
proceeds paid via Fund Direct-Electronic Funds Transfer, you must complete the
Telephone Services section of the enclosed Application Form and return it to
Nuveen or SSI. If you did not authorize Telephone Redemption via Fund Direct
when you opened your account, you may do so by sending a written request to the
Fund signed by each account owner with signatures guaranteed by a member of an
approved Medallion Guarantee Program or in such other manner as may be accept-
able to the Fund. Proceeds of share redemptions made by Fund Direct will be
transferred only to the commercial bank account specified by the shareholder.
Redemption proceeds may be delayed one additional business day if the Federal
Reserve Bank of Boston or the Federal Reserve Bank of New York is closed on the
day the redemption proceeds would ordinarily be wired.
If you have authorized Telephone Redemption via Fund Direct, you can take
advantage of two methods of telephone redemption: regular telephone redemption
and expedited telephone redemption. You may make regular Fund Direct redemption
requests by calling Nuveen at (800) 621-7227. If a regular telephone redemption
request is received prior to 4:00 p.m. Eastern Time, the shares to be redeemed
earn income on the day the request is made, and the redemption is effected on
the following business day. For regular redemption requests received after 4:00
p.m. Eastern Time, the shares to be redeemed earn income through the following
business day, and the redemption is effected on the second business day follow-
ing the request. For all regular redemptions, you will typically receive your
funds within three business days after your redemption is effected. You may
make expedited telephone redemption requests to redeem shares that are worth at
least $1,000 by calling Nuveen at (800) 858-4084. If an expedited redemption
request is received by 12:00 noon Eastern Time, the shares to be redeemed do
not earn income on that day, but the redemption is effected, and you will nor-
mally receive your funds, on that day. If an expedited redemption request is
received after 12:00 noon Eastern Time, the shares to be redeemed earn income
on the day the request is received. The redemption is effected, and you will
normally receive your funds, on the next business day following the request.
The Fund reserves the right to charge a fee for expedited redemption requests.
HOW TO CHANGE AUTHORIZED REDEMPTION INSTRUCTIONS
In order to establish multiple accounts, or to change the account or accounts
designated to receive redemption proceeds, a written request specifying the
change must be sent to Nuveen. This request must be signed by each account
owner with signatures guaranteed by a member of an approved Medallion Guarantee
Program or in such other manner as may be acceptable to the Fund. Further docu-
mentation may be required from corporations, executors, trustees or personal
representatives.
The Fund reserves the right to refuse a telephone redemption and, at its
option, may limit the timing, amount or frequency of these redemptions. This
procedure may be modified or terminated at any time, on 30 days' notice, by the
Fund. The Fund, the transfer agent and Nuveen will not be liable for following
telephone instructions reasonably believed to be genuine.
REDEMPTION THROUGH SERVICE ORGANIZATIONS
Fund shareholders may also redeem shares through their accounts with service
organizations in accordance with procedures established by each such service
organization. The Fund has no redemption charge, but service organizations may
impose transaction fees or other charges relating to the redemption of Fund
shares. Individual shareholders should determine from their service organiza-
tions the procedures and charges, if any, that govern redemptions.
---
12
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
If you own shares currently worth at least $10,000, you may establish a System-
atic Withdrawal Plan by completing an application form for the Plan. You may
obtain an application form by checking the applicable box on the enclosed
Application Form or by calling Nuveen toll-free at (800) 621-7227. The Plan
permits you to request periodic withdrawals on a monthly, quarterly, semi-
annual or annual basis in an amount of $50 or more. All shares of the Fund you
own will be accumulated in the Plan, with a sufficient number of shares being
redeemed periodically to meet the requested withdrawal payments. Depending upon
the size of the payments requested under the Plan, redemptions for the purpose
of making such payments may reduce or even exhaust your account. Withdrawals
under this Plan should not, therefore, be considered a yield on investment. A
Systematic Withdrawal Plan may be terminated at any time by you or the Fund. To
obtain an Account Update Form, which you can use to initiate a Systematic With-
drawal Plan, call Nuveen toll-free at (800) 621-7227.
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 securi-
ties 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.
General Information
INVESTOR INQUIRIES
Investor inquiries may be made directly of the Fund in writing or by calling
John Nuveen & Co. Incorporated, the Fund's distributor, toll-free at (800) 621-
7227.
CUSTODIAN, SHAREHOLDER SERVICES AGENT AND TRANSFER AGENT
The custodian of the Fund's assets is The Chase Manhattan Bank, 4 New York Pla-
za, New York, New York 10004. The custodian performs custodial fund accounting
and portfolio accounting services. Shareholder Services, Inc., 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 admin-
istrative services incident to the maintenance of shareholder accounts.
CAPITAL STOCK
The Fund was incorporated in Maryland on July 6, 1982. Its authorized capital
stock consists of a single class of 2,000,000,000 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.
---
13
<PAGE>
Taxable Equivalent Yield Tables
The following tables show the effects for individuals of federal income taxes
on what you would have to earn on a taxable investment to equal a given tax-
free yield. These tables are for illustrative purposes only and are not
intended to predict the actual return you might earn on a Fund investment. The
Fund occasionally may advertise its performance in similar tables using other
current tax rates than those shown here. The tax rates used in these tables
have been rounded to the nearest one-half of one percent. They are based upon
published 1997 marginal federal tax rates and do not take into account changes
in tax rates that are proposed from time to time. A taxpayer's marginal tax
rate is affected by both his taxable income and his adjusted gross income. The
tables assume taxpayers are not subject to any alternative minimum taxes and
deduct any state income taxes paid on their federal income tax return. They
reflect the effect of the current federal tax limitations on itemized deduc-
tions and personal exemptions, which were designed to phase out certain bene-
fits of these deductions for higher income taxpayers. These limitations are
subject to certain maximums, which depend on the number of exemptions claimed
and the total amount of the taxpayer's itemized deductions. For example, the
limitation on itemized deductions will not cause a taxpayer to lose more than
80% of his allowable deductions with certain exceptions. The tax rates shown
here may be higher or lower than your actual tax rate.
Marginal tax rates for joint taxpayers with four personal exemptions
<TABLE>
<CAPTION>
FEDERAL
FEDERAL ADJUSTED TAX-EXEMPT YIELD
TAXABLE GROSS FEDERAL 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
INCOME INCOME TAX ---- ---- ---- ---- ---- ---- ----
(1,000'S) (1,000'S) RATE TAXABLE EQUIVALENT YIELD
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-41.2 $ 0-121.2 15.0% 2.35 2.94 3.53 4.12 4.71 5.29 5.88
41.2-99.6 0-121.2 28.0 2.78 3.47 4.17 4.86 5.56 6.25 6.94
121.2-181.8 29.0 2.82 3.52 4.23 4.93 5.63 6.34 7.04
99.6-151.8 0-121.2 31.0 2.90 3.62 4.35 5.07 5.80 6.52 7.25
121.2-181.8 32.0 2.94 3.68 4.41 5.15 5.88 6.62 7.35
181.8-304.3 34.5 3.05 3.82 4.58 5.34 6.11 6.87 7.63
151.8-271.1 121.2-181.8 37.0 3.17 3.97 4.76 5.56 6.35 7.14 7.94
181.8-304.3 40.0 3.33 4.17 5.00 5.83 6.67 7.50 8.33
Over 304.3 37.0 3.17 3.97 4.76 5.56 6.35 7.14 7.94
Over 271.1 181.8-304.3 44.0 3.57 4.46 5.36 6.25 7.14 8.04 8.93
Over 304.3 41.0 3.39 4.24 5.08 5.93 6.78 7.63 8.47
- ----------------------------------------------------------------------------
</TABLE>
Marginal tax rates for single taxpayers with one personal exemption
<TABLE>
<CAPTION>
FEDERAL COMBINED
FEDERAL ADJUSTED STATE TAX-FREE YIELD
TAXABLE GROSS AND 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
INCOME INCOME FEDERAL ---- ---- ---- ---- ---- ---- ----
(1,000'S) (1,000'S) TAX RATE TAXABLE EQUIVALENT YIELD
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 24.7 $ 0 - 121.2 15.0% 2.35 2.94 3.53 4.12 4.71 5.29 5.88
24.7 - 59.8 0 - 121.2 28.0 2.78 3.47 4.17 4.86 5.56 6.25 6.94
59.8 - 124.7 0 - 121.2 31.0 2.90 3.62 4.35 5.07 5.80 6.52 7.25
121.2 - 243.7 32.5 2.96 3.70 4.44 5.19 5.93 6.67 7.41
124.7 - 271.1 121.2 - 243.7 38.0 3.23 4.03 4.84 5.65 6.45 7.26 8.06
Over 243.7 37.0 3.17 3.97 4.76 5.56 6.35 7.14 7.94
Over 271.1 Over 243.7 41.0 3.39 4.24 5.08 5.93 6.78 7.63 8.47
- ---------------------------------------------------------------------------------
</TABLE>
---
14
<PAGE>
Principal Underwriter
John Nuveen & Co. Incorporated
Investment Bankers
333 West Wacker Drive
Chicago, Illinois 60606
(312) 917-7700
Investment Adviser
Nuveen Advisory Corp.
Subsidiary of John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
Custodian
The Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
Transfer and Shareholder Services Agent
Shareholder Services, Inc.
P.O. Box 5330
Denver, Colorado 80217
<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 mature investors whose portfolios are the principal
source of their ongoing financial security. More than 1.3 million investors have
entrusted Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach -- purchasing securities of strong companies and
communities that represent good long-term value -- is the cornerstone of
Nuveen's investment philosophy. It is a careful, long-term strategy that offers
the potential for attractive returns with moderated risk. Successful value
investing begins with in-depth research and a discerning eye for marketplace
opportunity. Nuveen's team of investment professionals is backed by the
discipline, resources and expertise of almost a century of investment
experience, including one of the most recognized research departments in the
industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of taxable and tax-free investment
products -- including equity and fixed-income mutual funds, unit trusts,
exchange-traded funds, individual managed account services, and cash management
products.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 621-7227 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
[NUVEEN LOGO]
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 621-7227
www.nuveen.com
MPR-1-2.97
<PAGE>
NUVEEN
Money Market Fund Account Application
. This application must be preceded or accompanied by a current fund
prospectus, and may not be used to open Nuveen unit trust reinvestment
accounts. If you wish to open this type of account, please call Nuveen to
request the appropriate application.
. If you need additional copies of this application, or would like assistance
completing it, please call Nuveen at (800) 621-7227.
. Mail this application to:
Nuveen Money Market Funds
P.O. Box 5330
Denver, CO 80217-5330.
1 Account Registration
Please select an account type and complete all applicable information.
Joint registration will be as joint tenants with rights of survivorship unless
you specify tenants in common.
[_] Individual [_] Joint Tenant
First Name, Middle Initial, Last Name
- --------------------------------------------------------------------------------
Taxpayer ID Number
- --------------------------------------------------------------------------------
[_] Uniform Gift/Transfer to Minor
Name of Custodian Minor's State of Residence
- --------------------------------------------------------------------------------
Minor's Name (only one minor may be named) Minor's Taxpayer ID Number
- --------------------------------------------------------------------------------
[_] Corporation or Partnership
Name of Corporation or Partnership Taxpayer ID Number
- --------------------------------------------------------------------------------
[_] Trust
Names of All Trustees
- --------------------------------------------------------------------------------
Trust Name
- --------------------------------------------------------------------------------
Trust Agreement Date (mandatory) Month Day Year Trust Taxpayer ID Number
- --------------------------------------------------------------------------------
2 Mailing Address
Street Address
- --------------------------------------------------------------------------------
City State Zip Code
- --------------------------------------------------------------------------------
3 Fund Selection
Please write in the amount(s) you wish to invest.
Enclose a separate check made payable to each fund you are purchasing.
[_] Enclosed is my check in the amount payable to the Fund(s) indicated below.
[_] Funds in the amount listed below were wired to United Missouri Bank of
Kansas City.
Note: Please call Nuveen at (800) 858-4084 to obtain an account number for
wiring funds.
Nuveen Money Market Funds
$________________ Tax-Free Reserves (Minimum initial investment $1,000.)
$________________ California Tax-Free Money Market Fund (Minimum initial
investment $5,000.)
$________________ Massachusetts Tax-Free Money Market Fund (Minimum initial
investment $5,000.)
$________________ New York Tax-Free Money Market Fund (Minimum initial
investment $5,000.)
If you use this application to purchase more than one fund, any optional
features you select, except for the Systematic Investment or Systematic
Withdrawal Plans, will apply to all funds.
State funds may not be registered in all states.
Please complete the next page of this form.
<PAGE>
4 Dividend Options
Please indicate how you would like to receive your dividends.
If no box is checked, dividends will be reinvested into additional shares of the
paying fund.
Some state funds may not be available in all states.
(check one)
[_] Reinvest dividends into additional shares of the paying fund.
[_] Reinvest dividends into an existing, identically registered Nuveen mutual
fund account.
Fund Name
- --------------------------------------------------------------------------------
Account Number (if known)
- ---------------------------------------
[_] Send dividends by check. (Complete Section 5.)
[_] Deposit dividends into my bank account via Fund Direct. (Complete
Section 7.)
5 Check Instructions
Please complete this section only if you requested to receive dividends by
check.
[_] Make checks payable to the registered holder.
[_] Make checks payable to the registered holder at the address listed below.
[_] Make checks payable to the following third party, at the address listed
below.
Third Party Name (if applicable)
- --------------------------------------------------------------------------------
Attention
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------
City State Zip Code Daytime Telephone Number
- -
- --------------------------------------------------------------------------------
6 Telephone Services
Telephone Exchange and Telephone Redemptions by Check
You and your financial adviser will automatically receive telephone exchange and
redemption privileges, unless you request otherwise below.
[_] I do not wish to have telephone privileges.
Telephone Redemptions via Fund Direct
[_] I would like to be able to redeem shares by phone and have the proceeds
deposited directly into my bank account, and authorize Nuveen to honor
requests for such redemptions. (Complete Section 7.)
Telephone Purchases via Fund Direct
[_] I would like to be able to purchase additional shares of my current fund by
phone using funds from my bank account, and authorize Nuveen to execute
such transactions. (Complete Section 7.)
If the names on your bank account do not exactly match your money market fund
account registration, please have all bank account holders sign below.
Signature of Depositor Month Day Year
- --------------------------------------------------------------------------------
Signature of Joint Depositor Month Day Year
- --------------------------------------------------------------------------------
[_] I wish to have telephone privileges for myself, but not my financial
adviser.
Please complete the next page of this form.
<PAGE>
7 Bank Information
Please complete this section if you wish to transfer funds electronically to or
from your bank account via Fund Direct.
If you do not have a check or a personalized deposit slip, please call Nuveen at
(800) 621-7227.
Bank Name
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------
City State Zip Code Telephone Number
- --------------------------------------------------------------------------------
Bank Account Number
- --------------------------------------------------------------------------------
Account Type (check one)
[_] Checking account (Please attach a voided check.)
[_] Savings account (Please attach a personalized deposit slip.)
8 Check Redemption Authorization
Read the instructions and explanation carefully before completing this section
and return the completed signature card with this application form.
[_] I authorize Nuveen to honor drafts drawn on the Fund and to redeem a
sufficient number of Fund shares to pay such drafts.
Joint Accounts
You must complete this section to elect this option.
[_] Either owner of the fund(s) may sign redemption checks.
[_] All owners of the fund(s) are required to sign redemption checks.
A. Checks must be on forms provided by the Fund and for a minimum of $500 or
they will not be honored. Checks are authorizations to redeem Fund shares and
are payable through the United Missouri Bank of Kansas City, N.A. (the
"Bank").
B. Check forms will not be issued until a completed signature card is received
by the Fund.
C. Checks requiring redemption of shares held for 15 days or less that were not
purchased by "wire transfer" of federal funds or for which there are
insufficient shares to cover payment will not be honored.
D. Unless one signer is authorized on the account application form and signature
card, each check must be signed by all account owners or it will not be
honored. If SSI receives written notice by either owner of a revocation of
the authorization to sign individually, all account owners will be required
to sign redemption checks. Checks must be signed exactly as registered.
E. The privilege is subject to the Fund's and the Bank's rules and regulations,
and applicable governmental regulations, as amended from time to time.
F. The Fund may refuse to honor checks and may refuse to effect redemptions to
pay checks whenever the right of redemption has been suspended or postponed,
or whenever the account is otherwise impaired.
G. The account owner agrees to examine confirmations and cancelled checks and to
notify SSI of any unauthorized or missing signature or endorsement or
alteration on the check or error on the confirmation within 30 days after
mailing to owner. Failure to do so shall preclude any claim against the Fund,
the Bank, SSI, or their representatives and agents by reason of any
unauthorized or missing signature or endorsement, alteration, error, or
forgery of any kind.
- --------------------------------------------------------------------------------
Checkwriting Signature Card
Please indicate the Nuveen fund(s) to the right for which this signature card
applies.
In order to process this card you must write your account number in the space
provided.
Please print the names of the registered owners or legal representatives and
sign in the space provided at right.
Customer Account Number
- --------------------------------------------------------------------------------
[_] Nuveen Tax-Free Reserves
[_] Nuveen California Tax-Free Money Market Fund
[_] Nuveen Massachusetts Tax-Free Money Market Fund
[_] Nuveen New York Tax-Free Money Market Fund
Joint Accounts
[_] Check here if more than one signature will be required on checks.
Authorized Account Signer
- --------------------------------------------------------------------------------
Authorized Account Signature
- --------------------------------------------------------------------------------
Authorized Account Signer
- --------------------------------------------------------------------------------
Authorized Account Signature
- --------------------------------------------------------------------------------
<PAGE>
9 Financial Adviser Information
Please complete this section so your financial adviser can service your account
and receive copies of your statements.
Financial Adviser's Name Rep. Number
- --------------------------------------------------------------------------------
Firm Name
- --------------------------------------------------------------------------------
Branch Address Branch Number
- --------------------------------------------------------------------------------
City State Zip Code Telephone Number
- --------------------------------------------------------------------------------
10 Certification and Substitute Form W-9
I/we have received and read a copy of the prospectus for the fund(s) I am/we are
purchasing and agree to be bound by its terms, as amended. Under penalty of
perjury, I/we certify that (1) I/we have the power and authority to establish
this account; (2) the information provided on this application is accurate and
complete; and (3) the IRS has not notified me/us that I am/we are subject to
backup withholding. (Line out clause (3) if you are subject to backup
withholding.) I/we release the fund(s), Nuveen, and their agents and
representatives from all liability and agree to indemnify them from any and all
losses, damages or costs for acting in good faith in accordance with
instructions, including telephone instructions, believed to be genuine. I/we
agree to notify Nuveen promptly in writing if any information contained in this
application changes.
Signature Month Day Year Daytime Telephone Number
- --------------------------------------------------------------------------------
Signature of Joint Tenant (if any) Month Day Year Daytime Telephone Number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mail this completed application to:
Nuveen Money Market Funds
P.O. Box 5330
Denver, CO 80217-5330
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
NUVEEN TAX-FREE RESERVES, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
[NUVEEN LOGO]
Statement of Additional Information
June 4, 1997
Nuveen Tax-Free Reserves, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN TAX-FREE RESERVES, INC.
Nuveen Tax-Free Reserves, Inc. (the "Fund") is an open-end diversified manage-
ment investment company. This Statement of Additional Information is not a pro-
spectus. A prospectus may be obtained from certain securities brokers and other
service organizations that have entered into service agreements with the Fund
or from John Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illi-
nois 60606. This Statement of Additional Information relates to, and should be
read in conjunction with, the Prospectus dated June 4, 1997.
<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
- ------------------------------------------------------------
Tax Matters 16
- ------------------------------------------------------------
Distribution and Service Plan 20
- ------------------------------------------------------------
Yield Information 22
- ------------------------------------------------------------
Independent Public Accountants and Custodian 24
- ------------------------------------------------------------
</TABLE>
The audited financial statements for the fiscal year ended February 28, 1997
appearing in the Fund's Annual Report are incorporated herein by reference. The
Annual Report accompanies this Statement of Additional Information.
<TABLE>
<S> <C> <C>
Principal Underwriter Investment Adviser Transfer and Shareholder Services
John Nuveen & Co. Incorporated Nuveen Advisory Corp., Agent
Subsidiary of John Nuveen & Shareholder Services, Inc.
Chicago: Co. Incorporated P.O. Box 5330
333 West Wacker Drive 333 West Wacker Drive Denver, Colorado 80217-5330
Chicago, Illinois 60606 Chicago, Illinois 60606
(312) 917-7700 Independent Public Accountants
Custodian for the Fund
New York: The Chase Manhattan Bank Arthur Andersen LLP
10 East 50th Street 4 New York Plaza 33 West Monroe Street
New York, New York 10022 New York, New York 10004 Chicago, Illinois 60603
(212) 207-2000
</TABLE>
<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, without the ap-
proval of the holders of a majority of the shares:
(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 for temporary or emergency purposes and not for in-
vestment 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 disposi-
tion of securities. While any such borrowings exceed 5% of total assets, no
additional purchases of investment securities will be made by the Fund. If due
to market fluctuations or other reasons the value of the Fund's assets fall
below 300% of its borrowings, the Fund will reduce its borrowings within 3
business days. To do this, the Fund may have to sell a portion of its invest-
ments at a time when it may be disadvantageous to do so;
(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
or foreclosing upon and selling such security;
(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) Write or purchase put or call options, except to the extent that the pur-
chase of a stand-by commitment may be considered the purchase of a put;
(12) Invest more than 5% of its total assets in securities of unseasoned is-
suers which, together with their predecessors, have been in operation for less
than three years;
2
<PAGE>
(13) Concentrate more than 25% of its assets in the securities of issuers in
any single industry; provided, however, that such limitations shall not be ap-
plicable on the purchase of Municipal Obligations issued by governments or po-
litical subdivisions of governments, and obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities;
(14) 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;
(15) 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 secu-
rities.
For the purpose of applying the limitations set forth in paragraphs (2) and
(12) above, the 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-gov-
ernmental user, such as an industrial corporation or a privately owned or op-
erated 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 obliga-
tion of a superior or unrelated governmental entity or other entity (other
than a bond insurer) it shall be included in the computation of securities
owned that are issued by such governmental 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
credit, such a guarantee or letter or credit would be considered a separate
security 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 in-
vestment objective and other fundamental policies, cannot be changed without
approval by holders of a "majority of the Fund's outstanding voting shares."
As defined in the Investment Company Act of 1940, this means the vote of (i)
67% or more of the 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 apply only at the time of purchase or securities and will not be consid-
ered violated unless an excess of deficiency occurs or exists immediately af-
ter and as a result of an acquisition of securities, unless otherwise indicat-
ed.
PORTFOLIO SECURITIES
As described in the Prospectus, the Fund will invest primarily in a diversi-
fied portfolio of Municipal Obligations consisting of money market instruments
issued by governmental authorities. In general, Municipal Obligations include
debt obligations issued to obtain funds for various public purposes,
3
<PAGE>
including construction of a wide range of public facilities. Industrial devel-
opment bonds and pollution control bonds that are issued by or on behalf of
public authorities to finance various privately-operated facilities are in-
cluded within the term Municipal Obligations if the interest paid thereon is
exempt from federal income tax.
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 lo-
cal governmental issuers which are sold to obtain interim financing for pro-
jects that will eventually be funded through the sale of long-term debt obliga-
tions 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 mar-
ket 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 obligations
of the issuer. A weakness in an issuer's capacity to raise taxes due to, among
other things, a decline in its tax base or a rise in delinquencies, could ad-
versely affect the issuer's ability to meet its obligations on outstanding
TANs.
Revenue Anticipation Notes (RANs) are issued by governments or governmental
bodies with the expectation that future revenues from a designated source will
be used to repay the notes. In general they also constitute general obligations
of the issuer. A decline in the receipt of projected revenues, such as antici-
pated revenues from another level of government, could adversely affect an is-
suer's ability to meet its obligations on outstanding RANs. In addition, the
possibility that the revenues would, when received, be used to meet other obli-
gations could affect the ability of the issuer to pay the principal and inter-
est 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 such as
those described above to commercial banks as evidence of borrowings. The pur-
poses 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 agen-
cies, and certain debt instruments issued by domestic banks or corporations,
may carry variable or floating rates of interest. Such instruments bear inter-
est at rates which are not fixed, but which vary with changes in specified mar-
ket rates or indices, such as a bank prime rate or tax-exempt money market in-
dex. Variable rate notes are adjusted to current interest rate levels at cer-
tain specified times, such as every 30 days, as set forth in the instrument. A
floating rate note adjusts automatically whenever there is a change in its base
interest rate adjustor, e.g., a change in the prime lending rate or specified
interest rate indices. Typically such instruments carry demand features permit-
ting the Fund to recover the full principal amount thereof upon specified
notice.
4
<PAGE>
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 "tender fee" to the third
party tender option provider, the amount of which would be periodically ad-
justed so that the bond/tender option combination would reasonably be expected
to have a market value that approximates the par value of the bond. This
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 obligations 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 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 unconditional and un-
qualified. The acquisition of a standby commitment will not affect the valua-
tion of the underlying security, which will continue to be valued 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 sub-
ject to such a commitment (thus reducing the yield to maturity otherwise avail-
able for the same securities). The maturity of a Municipal Obligation purchased
by the Fund will not be considered shortened by any standby commitment to which
such security is subject. Although the Fund 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--Municipal Obligations" in the Pro-
spectus, 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 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 fluc-
tuation, 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 Obli-
gation on a when-issued or delayed delivery basis, it will record the transac-
tion and reflect the amount due and the value of the security in determining
its net asset value. Likewise, at the time the Fund makes the commitment to
sell a Municipal Obligation on a delayed delivery 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 com-
mitments. The Fund will only make commitments to purchase Municipal Obliga-
tions on a when-issued or delayed delivery basis with the intention of actu-
ally acquiring the securities, but the Fund reserves the right to sell these
securities before the settlement date if it is deemed advisable. If a when-is-
sued security is sold before delivery any gain or loss would not be tax-ex-
empt.
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
investments." As stated in the Prospectus, the Fund to date has not invested
in and has no present intention of investing in such temporary investments. In
any event, temporary investments will not exceed 20% of the Fund's assets ex-
cept 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 397 days or less. Temporary invest-
ments include obligations of the United States Government, its agencies or in-
strumentalities; debt securities of issuers having, at the time of purchase, a
quality rating within the two highest grades by either Moody's Investors Serv-
ice, 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 ei-
ther 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 Ob-
ligations and U.S. Government obligations subject to short-term repurchase
agreements.
6
<PAGE>
Subject to the foregoing limitations, the Fund may invest in the following tem-
porary investments:
U.S. Government Direct Obligations--issued by the United States Treasury and
include bills, notes, and bonds.
- --Treasury bills are issued with maturities of up to one year. They are issued
in bearer form, are sold on a discount basis and are payable at par value at
maturity.
- --Treasury notes are longer-term interest-bearing obligations with original ma-
turities of one to seven years.
- --Treasury bonds are longer-term interest-bearing obligations with original ma-
turities from five to thirty years.
U.S. Government Agencies Securities--Certain federal agencies have been estab-
lished as instrumentalities of the United States government to supervise and
finance certain types of activities. These agencies include, but are not lim-
ited to the Bank for Cooperatives, Federal Land Banks, Federal Intermediate
Credit Banks, Federal Home Loan Banks, Federal National Mortgage Association,
Government National Mortgage Association, Export-Import Bank of the United
States and Tennessee Valley Authority. Issues of these agencies, while not di-
rect obligations of the United States government, are either backed by the full
faith and credit of the United States or are guaranteed by the Treasury or sup-
ported by the issuing agencies' right to borrow from the Treasury. There can be
no assurance that the United States government itself will pay interest and
principal on securities as to which it is not so legally obligated.
Certificates of Deposit (CDs)--A certificate of deposit is a negotiable inter-
est-bearing instrument with a specific maturity. CDs are issued by banks in ex-
change for the deposit of funds and normally can be traded in the secondary
market, prior to maturity. The Fund will only invest in U.S. dollar denominated
CDs issued by U.S. banks with assets of $1 billion or more.
Commercial Paper--Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations. Maturities on these issues
vary from a few days to nine months. Commercial paper may be purchased from
U.S. corporations.
Other Corporate Obligations--The Fund may purchase notes, bonds and debentures
issued by corporations if at the time of purchase there is less than 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
7
<PAGE>
both principal and interest. In the event of default, the collateral may be
sold but the Fund might incur a loss if the value of the collateral declines,
and might incur disposition costs or experience delays in connection with liq-
uidating the collateral. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the security, realization upon the collateral by
the Fund may be delayed or limited. Nuveen Advisory will monitor the value of
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 deter-
mine 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 or MIG-1 are the best quality, enjoying strong protection from estab-
lished cash flows of funds for their servicing or from established and broad-
based access to the market for refinancing, or both. The designation SP-1 indi-
cates 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>
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. Nei-
ther event requires the elimination of such obligation from the Fund's portfo-
lio, but Nuveen Advisory will consider such an event in its determination of
whether the Fund should continue to hold such obligation.
MANAGEMENT
The management of the Fund, including general supervision of the duties per-
formed 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 ages and principal occupations and other affiliations during the
past five years are set forth below, with those directors who are "interested
persons" of the Fund indicated by an asterisk.
<TABLE>
- ---------------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUND DURING PAST FIVE YEARS
- ---------------------------------------------------------------------------------------------
<C> <C> <C> <S>
Timothy R. Schwertfeger 48 Chairman of the Chairman since July 1, 1996 of The John
333 West Wacker Drive Board and Direc- Nuveen Company, John Nuveen & Co. Incorpo-
Chicago, IL 60606 tor rated, Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; prior
thereto Executive Vice President and Di-
rector of The John Nuveen Company (since
March 1992), John Nuveen & Co. Incorporat-
ed, Nuveen Advisory Corp. (since October
1992) and Nuveen Institutional Advisory
Corp. (since October 1992).
- ---------------------------------------------------------------------------------------------
Anthony T. Dean 52 President and President since July 1, 1996 of The John
333 West Wacker Drive Director Nuveen Company, John Nuveen & Co. Incorpo-
Chicago, IL 60606 rated, Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; prior there-
to, Executive Vice President and Director
of The John Nuveen Company (since March
1992), John Nuveen & Co. Incorporated,
Nuveen Advisory Corp. (since October 1992)
and Nuveen Institutional Advisory Corp.
(since October 1992).
- ---------------------------------------------------------------------------------------------
Robert P. Bremner 56 Director Private Investor and Management Consul-
3725 Huntington Street, N.W. tant.
Washington, D.C. 20015
- ---------------------------------------------------------------------------------------------
Lawrence H. Brown 62 Director Retired (August 1989) as Senior Vice Pres-
201 Michigan Avenue ident of The Northern Trust Company.
Highwood, IL 60040
- ---------------------------------------------------------------------------------------------
Anne E. Impellizzeri 64 Director President and Chief Executive Officer of
3 West 29th Street Blanton-Peale Institute of Religion and
New York, NY 10001 Health.
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUND DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------
<C> <C> <C> <S>
Margaret K. Rosen- 70 Director Helen Ross Professor of Social Welfare
heim Policy, School of Social Service Adminis-
969 East 60th Street tration, University of Chicago.
Chicago, IL 60637
- -------------------------------------------------------------------------------------
Peter R. Sawers 64 Director Adjunct Professor of Business and Econom-
22 The Landmark ics, University of Dubuque, Iowa; Adjunct
Northfield, IL 60093 Professor, Lake Forest Graduate School of
Management, Lake Forest, Illinois; Chart-
ered Financial Analyst; Certified Manage-
ment Consultant.
- -------------------------------------------------------------------------------------
William J. Schneider 52 Director Senior Partner, Miller-Valentine Partners,
4000 Miller-Valen- Vice President, Miller-Valentine Realty,
tine Ct. Inc.
P.O. Box 744
Dayton, OH 45401
- -------------------------------------------------------------------------------------
Bruce P. Bedford 57 Executive Vice Executive Vice President of John Nuveen &
333 West Wacker President Co. Incorporated, Nuveen Advisory Corp.
Drive and Nuveen Institutional Advisory Corp.
Chicago, IL 60606 (since January 1997), prior thereto,
Chairman and CEO of Flagship Resources
Inc. and Flagship Financial Inc. and the
Flagship funds (since January 1985).
- -------------------------------------------------------------------------------------
Michael S. Davern 39 Vice President Vice President of Nuveen Advisory Corp.
One South Main (since January 1997); prior thereto, Vice
Street President and Portfolio Manager (since
Dayton, OH 45402 September 1991) of Flagship Financial.
- -------------------------------------------------------------------------------------
William M. Fitzger- 33 Vice President Vice President of Nuveen Advisory Corp.
ald (since December 1995); Assistant Vice
333 West Wacker President of Nuveen Advisory Corp. (from
Drive September 1992 to December 1995); prior
Chicago, IL 60606 thereto Assistant Portfolio Manager of
Nuveen Advisory Corp. (from June 1988 to
September 1992).
- -------------------------------------------------------------------------------------
Kathleen M. Flanagan 50 Vice President Vice President of John Nuveen & Co. Incor-
333 West Wacker porated; Vice President of Nuveen Advisory
Drive Corp. and Nuveen Institutional Advisory
Chicago, IL 60605 Corp. (since June 1996).
- -------------------------------------------------------------------------------------
J. Thomas Futrell 41 Vice President Vice President of Nuveen Advisory Corp.
333 West Wacker
Drive
Chicago, IL 60606
- -------------------------------------------------------------------------------------
Richard A. Huber 34 Vice President Vice President of Nuveen Advisory Corp.
One South Main (since January 1997); prior thereto, Vice
Street President and Portfolio Manager (since Au-
Dayton, OH 45402 gust 1985) of Flagship Financial.
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH FUND DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------
<C> <C> <C> <S>
Steven J. Krupa 39 Vice President Vice President of Nuveen Advisory Corp.
333 West Wacker
Drive
Chicago, IL 60606
- ----------------------------------------------------------------------------------------
Anna R. Kucinskis 51 Vice President Vice President of John Nuveen & Co. Incor-
333 West Wacker porated.
Drive
Chicago, IL 60606
- ----------------------------------------------------------------------------------------
Larry W. Martin 45 Vice President and Vice President (since September 1992), As-
333 West Wacker Assistant Secre- sistant Secretary and Assistant General
Drive tary Counsel of John Nuveen & Co. Incorporated;
Chicago, IL 60606 Vice President (since May 1993) and Assis-
tant Secretary of Nuveen Advisory Corp.;
Vice President (since May 1993) and Assis-
tant Secretary of Nuveen Institutional Ad-
visory Corp.; Assistant Secretary of The
John Nuveen Company (since February 1993).
- ----------------------------------------------------------------------------------------
Edward F. Neild, IV 31 Vice President Vice President (since September 1996),
One South Main previously Assistant Vice President (since
Street December 1993) of Nuveen Advisory Corp.,
Dayton, OH 45402 Portfolio Manager prior thereto; Vice
President (since September 1996), previ-
ously Assistant Vice President (since May
1995) of Nuveen Institutional Advisory
Corp., Portfolio Manager prior thereto.
- ----------------------------------------------------------------------------------------
Walter K. Parker 48 Vice President Vice President of Nuveen Advisory Corp.
One South Main (since January 1997); prior thereto, Vice
Street President and Portfolio Manager (since
Dayton, OH 45402 July 1994) of Flagship Financial; Portfo-
lio Manager and CIO Trust Investor (since
1983) for PNC Bank.
- ----------------------------------------------------------------------------------------
O. Walter Renfftlen 57 Vice President and Vice President and Controller of The John
333 West Wacker Controller Nuveen Company (since March 1992), John
Drive Nuveen & Co. Incorporated, Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory
Corp.
- ----------------------------------------------------------------------------------------
Thomas C. Spalding, 45 Vice President Vice President of Nuveen Advisory Corp.
Jr. and Nuveen Institutional Advisory Corp.;
333 West Wacker Chartered Financial Analyst.
Drive
Chicago, IL 60606
- ----------------------------------------------------------------------------------------
H. William Stabenow 62 Vice President and Vice President and Treasurer of The John
333 West Wacker Treasurer Nuveen Company (since March 1992), John
Drive Nuveen & Co. Incorporated, Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory
Corp.
- ----------------------------------------------------------------------------------------
Jan E. Terbrueggen 41 Vice President Vice President of Nuveen Advisory Corp.
One South Main (since January 1997); prior thereto, Vice
Street President and Portfolio Manager of Flag-
Dayton, OH 45402 ship 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 40 Vice President Vice President (since September 1992), As-
333 West Wacker and sistant Secretary and Assistant General
Drive Assistant Secre- Counsel of John Nuveen & Co. Incorporated;
Chicago, IL 60606 tary Vice President (since May 1993) and Assis-
tant Secretary of Nuveen Advisory Corp.;
Vice President (since May 1993) and Assis-
tant Secretary of Nuveen Institutional Ad-
visory Corp.
</TABLE>
- --------------------------------------------------------------------------------
Anthony T. Dean, Timothy R. Schwertfeger and Margaret K. Rosenheim 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 Nuveen Tax-Free Reserves,
Inc. during the fiscal year ended February 28, 1997 to each of the directors.
Nuveen Tax-Free Reserves, Inc. has no retirement or pension plans. The officers
and directors affiliated with Nuveen serve without any compensation from Nuveen
Tax-Free Reserves, Inc.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM THE FUND AND
COMPENSATION FUND COMPLEX PAID
NAME OF DIRECTOR FROM THE FUND TO DIRECTORS
- --------------------------------------------------------------------------------
<S> <C> <C>
Anthony T. Dean................................ $ 0 $ 0
Richard J. Franke*............................. 0 0
Timothy R. Schwertfeger........................ 0 0
Robert P. Bremner.............................. 0 0(1)
Lawrence H. Brown.............................. 739 59,000
Anne E. Impellizzeri........................... 739 59,000
Margaret K. Rosenheim.......................... 927(2) 66,815(3)
Peter R. Sawers................................ 739 59,000
William J. Schneider........................... 0 0(1)
</TABLE>
- --------
*Mr. Franke retired as of June 30, 1996.
(1) First payment was in April, 1997.
(2) Includes $46 in interest earned on deferred compensation from prior years.
(3) Includes $1,565 in interest earned on deferred compensation from prior
years.
Directors who are not affiliated with Nuveen or Nuveen Advisory will receive a
$27,500 annual retainer for serving as a director of all open-end funds for
which Nuveen Advisory serves as investment adviser and a $1,000 fee per day
plus expenses for attendance at all meetings held on a day on which a regularly
scheduled Board meeting is held, a $1,000 fee per day plus expenses for atten-
dance in person or a $500 fee per day plus expenses for attendance by telephone
at a meeting held on a day on which
12
<PAGE>
no regular board meeting is held and a $250 fee per day plus expenses for at-
tendance in person or by telephone at a meeting of the Executive Committee. The
annual retainer, fees and expenses will be allocated among the open-end funds
on the basis of relative net assets. The Fund requires no employees other than
its officers, all of whom are compensated by Nuveen.
On May 28, 1997, the officers and directors of the Fund as a group owned less
than 1% of the outstanding shares of the Fund. On May 28, 1997, Elaine D.
Sammons, 4242 Lomo Alto Dr., Dallas, TX owned of record 22,390,916.330 (8.14%)
shares of the Fund.
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 .5 of 1%
of the first $500 million of average daily net assets, .475 of 1% of the next
$500 million, and .45 of 1% of average daily net assets over $1 billion. The
management fee will be reduced or Nuveen Advisory will assume certain Fund ex-
penses in an amount necessary to prevent the Fund's total expenses in any fis-
cal year from exceeding .75 of 1% of the average daily net asset value of the
Fund. The net management fee for the fiscal year ended February 28, 1997
amounted to $1,377,941, after giving effect to fee waivers and expense reim-
bursements of $165,912. The net management fees for the fiscal years ended Feb-
ruary 29, 1996 and February 28, 1995, amounted to $1,566,356 and $1,669,835 re-
spectively. As discussed in the Prospectus, subject to the expense limitations
of the Investment Management Agreement, the Fund is responsible for payment of
certain of the costs and expenses of its operations, including its share of
payments under the Distribution and Service Plan.
Nuveen Advisory is a wholly-owned subsidiary of John Nuveen & Co. Incorporated
("Nuveen"), the Fund's principal underwriter. In 1961, Nuveen began sponsoring
the Nuveen Tax-Exempt Unit Trust and since that time has issued more than $36
billion in tax-exempt unit trusts, including over $12 billion in tax-exempt in-
sured unit trusts. In addition, the Nuveen open-end and closed-end funds held
approximately $36 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 en-
gaged 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.
13
<PAGE>
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 are 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 concession paid by the is-
suer 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 addition, 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 in-
formation and statistical and other services received from dealers. Since it is
only supplementary to Nuveen Advisory's own research efforts, the receipt of
research information is not expected to reduce significantly Nuveen Advisory's
expenses. Any research benefits obtained are available to all of Nuveen
Advisory's other clients. While Nuveen Advisory will be primarily responsible
for the placement of the Fund's business, the policies and practices of Nuveen
Advisory in this regard must be consistent with the foregoing and will, at all
times, be subject to review by the Board of Directors of the Fund.
Nuveen Advisory reserves the right to, and does, manage other investment ac-
counts and investment companies or 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 avail-
able to the Fund
14
<PAGE>
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 disad-
vantage that may arise from exposure to simultaneous transactions.
Under the Investment Company Act of 1940, the Fund may not purchase portfolio
securities from any underwriting syndicate of which Nuveen is a member except
under certain limited conditions set forth in Rule 10f-3. The Rule sets forth
requirements relating to, among other things, the terms of an issue of 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 similarly will not be open on New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Co-
lumbus Day, Veteran's Day, Thanksgiving Day and Christmas Day. The net asset
value per share will be computed by dividing the value of the portfolio securi-
ties held by the Fund, plus cash or other assets, less liabilities, by the to-
tal number of shares outstanding at such time.
The Fund will seek to maintain a net asset value of $1.00 per share. In this
connection, the Fund intends to value its portfolio securities at their amor-
tized cost, as permitted by Rule 2a-7 under the Investment Company Act of 1940.
This method does not take into account unrealized securities gains or losses.
It involves valuing an instrument at its cost on the date of purchase and
thereafter assuming a constant amortization to maturity of any discount or pre-
mium. While this method provides certainty in valuation, it may result in peri-
ods during which the value of an investment, as determined by amortized cost,
is higher or lower than the price the Fund would receive if it sold the instru-
ment. 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.
15
<PAGE>
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 (the "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 the requirements of Rule 2a-7, has estab-
lished procedures designed to stabilize, to the extent reasonably possible, the
Fund's price per share as computed for the purpose of sales and redemptions at
$1.00. Such procedures will include review of the Fund's portfolio holdings by
the Board of Directors, at such intervals as it may deem appropriate, to deter-
mine whether the net asset value calculated by using available market quota-
tions or market equivalents deviates from $1.00 per share based on amortized
cost. Market quotations and market equivalents used in such review may be ob-
tained from a pricing agent approved by the Board of Directors. The Board has
selected Nuveen Advisory to act as pricing agent, but in the future may select
an independent pricing service to perform this function. In serving as pricing
agent, Nuveen Advisory will follow guidelines adopted by the Board, and the
Board will monitor Nuveen Advisory to see that the guidelines are followed. The
pricing agent will value the Fund's investments based on methods which include
consideration of: yield or prices of municipal obligations of comparable quali-
ty, coupon, maturity, and type; indications as to values from dealers; and gen-
eral market conditions. The pricing agent may employ electronic data processing
techniques and/or a matrix system to determine valuations. The extent of any
deviation between the Fund's net asset value based on the pricing agent's mar-
ket 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 Di-
rectors will promptly consider what action, if any, will be initiated. In the
event the Board of Directors determines that a deviation exists which may re-
sult in material dilution or other unfair results to investors or existing
shareholders, they have agreed to take such corrective action as they regard as
necessary and appropriate, including the sale of portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio ma-
turity; withholding dividends or payments of distributions from capital or cap-
ital 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
16
<PAGE>
investment company. In order to qualify as a regulated investment company, the
Fund must satisfy certain requirements relating to the source of its income,
diversification of its assets, and distributions of its income to shareholders.
First, the Fund must derive at least 90% of its annual gross income (including
tax-exempt interest) from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock or
securities, foreign currencies or other income (including but not limited to
gains from options and futures) derived with respect to its business of
investing in such stock or securities (the "90% gross income test"). Second,
the Fund must derive less than 30% of its annual gross income from the sale or
other disposition of any of the following which was held for less then three
months: (i) stock or securities and (ii) certain options, futures, or forward
contracts (the "short-short test"). Third, the Fund must diversify its holdings
so that, at the close of each quarter of its taxable year, (i) at least 50% of
the value of its total assets is comprised of cash, cash items, United States
Government securities, securities of other regulated investment companies and
other securities limited in respect of any one issuer to an amount not greater
in value than 5% of the value of the Fund's total assets and to not more than
10% of the outstanding voting securities of such issuer, and (ii) not more than
25% of the value of the total assets is invested in the securities of any one
issuer (other than United States Government securities and securities of other
regulated investment companies) or two or more issuers controlled by the Fund
and engaged in the same, similar or related trades or businesses.
As a regulated investment company, the Fund will not be subject to federal in-
come tax on the portion of its net investment income and net realized gain that
is currently distributed to shareholders in any taxable year for which the Fund
distributes at least 90% of the sum of (i) its "investment company taxable in-
come" (which includes dividends, taxable interest, taxable original issue dis-
count 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 short-term capital loss) and is reduced by deductible expenses)
and (ii) its "net tax-exempt interest" (the excess of its gross tax-exempt in-
terest income over certain disallowed deductions).
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
investment 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 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 Obligation at a
market discount, any gain realized by the Fund upon the sale or redemption of
the Municipal Obligation will be treated as taxable interest income to the
extent such gain does not exceed the market discount, and any gain realized in
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 capital
gains
17
<PAGE>
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
dividends received deductions for corporations.
If a Fund has both tax-exempt and taxable income, it will use the "average an-
nual" 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.
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 Octo-
ber 31 of such year) and 100% of any taxable ordinary income and the excess of
realized capital gains over realized capital losses for the prior year that was
not distributed during such year and on which the Fund paid no federal income
tax. The Fund intends to make timely distributions in compliance with these re-
quirements and consequently it is anticipated that it generally will not be re-
quired 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.
As stated in the Prospectus under "Dividends and Taxes--Federal Income Tax Mat-
ters," 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 share-
holders 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 private 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 defined to include persons among whom there
exists a relationship, either by
18
<PAGE>
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). For certain pri-
vate activity bonds, this includes a partnership and each of its partners (in-
cluding their spouses and minor children) and an S corporation and each of its
shareholders (and their spouses and minor children). Various combinations of
these relationships may also constitute "related persons" under the Code. The
foregoing is not a complete statement of all of the provisions of the Code cov-
ering the definitions of "substantial user" and "related person." For addi-
tional information, investors should consult their tax advisers before invest-
ing 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 hospi-
tals), is included as an item of tax preference in determining the amount of a
taxpayer's alternative minimum taxable income. To the extent that the Fund re-
ceives income from Municipal Obligations subject to the alternative minimum
tax, a portion of the dividends paid by it, although otherwise exempt from fed-
eral income tax, will be taxable to shareholders to the extent that their tax
liability is determined under the alternative minimum tax regime. The Fund will
annually supply shareholders with a report indicating the percentage of Fund
income attributable to Municipal Obligations subject to the federal alternative
minimum tax.
In addition, the alternative minimum taxable income for corporations is in-
creased by 75% of the difference between an alternative measure of income ("ad-
justed current earnings") and the amount otherwise determined to be the alter-
native minimum taxable income. Interest on all Municipal Obligations, and
therefore all distributions by the Fund that would otherwise be tax-exempt, is
included in calculating the alternative measures of a corporation's taxable in-
come.
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 exempt-
interest dividends from the Fund. Individuals whose modified income exceeds 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 the Fund
may be considered to have been made with borrowed funds even though such funds
are not directly traceable to the purchase of shares.
The Fund is required in certain circumstances to withhold 31% of taxable divi-
dends and certain other payments paid to non-corporate holders of shares who
have not furnished to the Fund their correct taxpayer identification number (in
the case of individuals, their social security number) and certain certifi-
cates, or who are otherwise subject to back-up withholding.
19
<PAGE>
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.
DISTRIBUTION AND SERVICE PLAN
Pursuant to a Distribution Agreement with the Fund, Nuveen acts as the distrib-
utor or principal underwriter of Fund shares. Shares of the Fund are offered on
a continuous basis at net asset value without a sales charge. Under this Agree-
ment, Nuveen will pay sales and promotion expenses in connection with the of-
fering of Fund shares, including the cost of printing and distributing prospec-
tuses (except expenses of preparing, printing and distributing prospectuses to
existing shareholders and governmental agencies) and advertising and sales lit-
erature expense. Expenses incurred in registering the Fund and its shares under
federal and state securities laws will be paid by the Fund.
As discussed in the Prospectus under "Distribution and Service Plan," the Fund
has adopted a Distribution and Service Plan (the "Plan") in accordance with
Rule 12b-1 (the "Rule") of the Investment Company Act of 1940. The Plan was
adopted and has been renewed by vote of the Board of Directors of the Fund, and
of the directors who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Plan or in any agree-
ments related to the Plan, cast in person at meetings called for the purpose of
voting on such Plan. Under the Plan, the Fund and Nuveen pay fees to service
organizations for services rendered in the distribution of shares of the Fund
or the servicing of shareholder accounts. Nuveen will enter into Service Agree-
ments with organizations who render such services. Service payments to such or-
ganizations will be made in accordance with the following schedule:
<TABLE>
<CAPTION>
DAILY AVERAGE ASSETS OF PAYMENT ON AN
SERVICED ACCOUNTS ANNUALIZED BASIS
- -----------------------------------------
<S> <C>
$0-$2 Million .10 of 1%
$2-$5 Million .15 of 1%
$5-$10 Million .20 of 1%
$10 Million and Over .30 of 1%
</TABLE>
Payment of the above fees are split evenly between Nuveen and the Fund and thus
the maximum the Fund would pay on an annualized basis is .15 of 1%. Nuveen may,
in its discretion, pay from its own
20
<PAGE>
resources to a service organization satisfying certain criteria an additional
amount not to exceed in the case of a given service organization the greater
of (a) .05 of 1% per year based on average assets of accounts serviced, or (b)
the amount by which the payment, if based on .30 of 1% of average assets of
accounts serviced, would have exceeded the actual amount of the payment under
the above schedule. Expenses that are incurred under the Plan in a given fis-
cal year but not reimbursed by the Fund in that year are not carried over to
future years. For the fiscal year ended February 28, 1997, the Fund paid fees
to service organizations under the Plan in the amount of $141,601.
Under the Plan, the Controller or Treasurer of the Fund will report quarterly
to the Board of Directors for its review amounts expended for distribution
services. The Plan, the Service Agreements and the Distribution Agreement may
be terminated at any time, without the payment of any penalty, by a vote of a
majority of the directors who are not "interested persons" and who have no di-
rect or indirect financial interest in the Plan or any related agreements or
by vote of a majority of the outstanding voting securities of the Fund. The
Plan may be renewed from year to year if approved at least annually by a vote
of the Board of Directors and a vote of the non-interested directors who have
no direct or indirect financial interest in the Plan or the related service
agreements cast in person at a meeting called for the purpose of voting on the
Plan. The Plan may be continued only if the Directors who vote to approve such
continuance conclude, in the exercise of reasonable business judgment and in
light of
their fiduciary duties under applicable law, that there is a reasonable like-
lihood that the Plan will benefit the Fund and its shareholders. The Plan is
intended to benefit the Fund by promoting the sale of Fund shares, which in
turn leads to economies of scale and helps assure the continued viability of
the Fund. The Plan may not be amended to increase materially the cost which
the Fund may bear under the Plan without shareholder approval, and any other
material amendments of the Plan must be approved by the non-interested direc-
tors by a vote cast in person at a meeting called for the purpose of consider-
ing such amendments. During the continuance of the Plan, as required by the
Rule, the selection and nomination of the non-interested directors of the Fund
will be committed to the discretion of the non-interested directors then in
office.
No director of the Fund and no "interested" person of the Fund has any direct
or indirect financial interest in the Plan or any agreement related to the
Plan. Services provided to the Fund by organizations receiving payments under
the Plan are described in "How to Purchase Fund Shares--Distribution and Serv-
ice Plan" in the Prospectus.
Shareholders should note that when a Fund dividend check has been returned to
the sender by the post office after repeated mailings, the shareholder account
will thereafter be registered for automatic reinvestment of dividends and thus
the dividend check and future dividend checks will be reinvested in additional
Fund shares. Shareholders are reminded that they need to advise the Funds
promptly in writing of any change in address.
The Glass-Steagall Act and other applicable laws, among other things, may
limit banks from engaging in the business of underwriting, selling or distrib-
uting securities. Since the only functions of banks who may be engaged as
service organizations is to perform administrative shareholder servicing func-
tions, the Fund believes that such laws should not preclude a bank from acting
as a service organization. However, future changes in either federal or state
statutes or regulations relating to the permissible activities of banks and
their subsidiaries or affiliates, as well as judicial or administrative deci-
sions
21
<PAGE>
or interpretations of statutes or regulations, could prevent a bank from con-
tinuing to perform all or a part of its shareholder servicing activities. If a
bank were prohibited from so acting, its shareholder customers would be permit-
ted to remain shareholders of the Fund and alternative means for continuing the
servicing of such shareholders would be sought.
To help advisers and investors better understand and more efficiently use an
investment in the Fund to reach their investment goals, the Fund and its spon-
sor, Nuveen, may advertise and create specific investment programs and systems.
For example, such activities may include presenting information on how to use
an investment in the Fund, alone or in combination with an investment in other
mutual funds or unit investment trusts sponsored by Nuveen, to accumulate as-
sets for future education needs or periodic payments such as insurance premi-
ums. The Fund and its sponsor may produce software or additional sales litera-
ture to promote the advantages of using the Fund to meet these and other spe-
cific investor needs.
YIELD INFORMATION
As explained in the Prospectus, the historical performance may be expressed in
terms of "yield," "effective yield" or "taxable equivalent yield." The Fund's
yield and effective yield for the seven-day period ended February 28, 1997 were
2.79% and 2.83%, respectively. These various measures of performance are de-
scribed below.
The Fund's yield is computed in accordance with a standard method prescribed by
rules of the Securities and Exchange Commission. Under that method, current
yield is based on a seven-day period and is computed as follows: The Fund's net
investment income per share for the period is divided by the price per share
(expected to remain constant at $1.00) at the beginning of the period, the re-
sult (the "base period return") is divided by 7 and multiplied by 365, and the
resulting figure is carried to the nearest hundredth of one percent. For the
purpose of this calculation, the Fund's net investment income per share in-
cludes its accrued interest income plus or minus amortized purchase discount or
premium less accrued expenses, but does not include realized capital gains or
losses or unrealized appreciation or depreciation of investments.
The Fund's effective yield is calculated by taking the base period return (com-
puted as described above) and calculating the effect of assumed compounding.
The formula for effective yield is: (base period return + 1) 365/7 - 1.
The Fund's taxable equivalent yield is computed by dividing that portion of the
Fund's yield which is tax-exempt by 1 minus the stated federal income tax rate
and adding the result to that portion, if any, of the yield of the Fund that is
not tax-exempt.
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 expenses of the Fund.
22
<PAGE>
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 performance calculations in-
clude the reinvestment of all capital gain and income dividends for the periods
covered by the calculations. As reported by Donoghue's, all investment results
represent total return (annualized results for the period net of management
fees and expenses) and one year investment results are effective annual yields
assuming reinvestment of dividends.
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 generally shorter term investments
insured by an agency of the federal government. Bank money market accounts and
money market funds provide stability of principal but pay interest at rates
which vary with the condition of the short-term taxable debt market.
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.
The 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.
23
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
Arthur Andersen LLP, independent public accountants, 33 West Monroe Street,
Chicago, Illinois 60603 have been selected as auditors for the Fund. In addi-
tion to audit services, Arthur Andersen LLP provides consultation and assis-
tance on accounting, internal control, tax and related matters. The financial
statements of the Fund incorporated by reference elsewhere in this Statement of
Additional Information and the information set forth under "Financial High-
lights" in the Prospectus have been audited by Arthur Andersen LLP as indicated
in their report with respect thereto, and are included in reliance upon the au-
thority 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, New York 10004.
MAI-T-F-RSRV
24
<PAGE>
NUVEEN
Money Market
Funds
February 28, 1997
Annual Report
Dependable, tax-free income
to help you keep more of
what you earn.
Reserves
California
Massachusetts [PHOTO OF COUPLE APPEARS HERE]
New York
<PAGE>
Contents
2 Dear Shareholder
4 Answering Your Questions
6 Reserves Overview
7 California Overview
8 Massachusetts Overview
9 New York Overview
11 Financial Section
49 Shareholder Meeting Results
50 Shareholder Information
51 Fund Information
1
<PAGE>
Dear Shareholder
It is a pleasure to report to you on the performance of your Nuveen tax-free
money market fund for the year ended February 28, 1997. During this 12-month
period the funds covered in this report continued to achieve their goal of
delivering attractive tax-free income from portfolios of quality municipal
bonds. As of the end of February, investors were receiving annual tax-free
yields that ranged from 2.79% to 2.87%, equivalent to taxable yields of 4.36% to
4.48% for investors in the 36% federal income tax bracket.
The Nuveen money market funds have done well in generating tax-free income for
investors while preserving net asset value stability and investor confidence.
Perhaps even more importantly, your money market fund has continued to deliver
safety and liquidity, which is especially comforting during periods of market
volatility. When combined with the flexibility of checkwriting, money market
funds remain a valuable and convenient investment alternative.
Since our last report, Nuveen has broadened our family of municipal bond funds
to better meet your needs for attractive current income free from federal, and
in some cases, state taxes. In January we merged our mutual fund family with
Flagship Resources, a respected manager of municipal bond mutual funds based in
Dayton, Ohio. This merger added 19 mutual funds to the Nuveen family, giving
investors an expanded array of investment solutions for their personal
portfolios.
[PHOTO OF TIMOTHY R.
SCHWERTFEGER APPEARS HERE]
Timothy R. Schwertfeger
2
<PAGE>
"Since our last report, Nuveen has broadened our family of municipal bond funds
to better meet your needs for attractive current income free from federal, and
in some cases, state taxes."
Nuveen also has created new equity investments to help investors keep more of
what they have earned. In November we launched the Nuveen Growth and Income
Stock Fund, a fund that seeks to provide prudent investors superior equity
market performance with equal or less risk than the overall stock market. In
March we introduced two new balanced mutual funds, each designed to give
investors the combination of performance potential and income protection that
comes from a carefully assembled balance of stocks and bonds.
Nuveen prides itself on providing attractive tax-free income with reduced risk
to more than 1.3 million shareholders. In conversations with investors, many of
you have told me how important tax-free income is to maintaining a lifestyle
that you have worked so hard to build. I appreciate the trust you have placed in
us.
Sincerely,
/S/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
April 14, 1997
3
<PAGE>
Answering Your Questions
[PHOTO OF TOM SPALDING APPEARS HERE]
Tom Spalding, head of Nuveen's portfolio
management team, talks about the municipal bond market and offers insights into
factors that affected fund performance over the past year.
What principal factors affected the municipal bond market and the funds during
the past year?
In 1996, the bond market--despite some fluctuations--was relatively stable
compared with recent years. Following a strong start to the year, a succession
of mixed reports affecting interest rate and inflation forecasts caused
investors to view the markets with alternating enthusiasm and uncertainty.
Throughout the year, euphoria in the equity market focused investors' attention
on stocks and brought record amounts of new money into equity-based mutual
funds, bypassing the bond market. Money market investments turned in good
returns, considering the current low rates available on short-term securities.
Some investors, concerned about a possible correction in the stock market,
decided to take their profits, but adopted a wait-and-see attitude about
investing capital gains, electing to go with shorter-term vehicles until a
clearer picture of market trends emerged.
What impact will future interest rate changes have on fund performance?
Given the uncertainty about a possible correction in the equity market and the
Federal Reserve's recent 0.25% increase in short-term interest rates, municipal
money market funds should see improvement in the tax-free yields they provide
investors.
What is your approach to managing the funds?
We kept the fund's weighted average maturity near the low end of its target
range for the first six months of 1996, so that we could quickly roll assets
into higher yielding securities as they became
4
<PAGE>
"Money market investments turned in good returns, considering the current low
rates available on short- term securities."
available. We took advantage of the June/July note season, when many municipal
governments bring new issues to market, to modestly extend maturity.
What is your outlook for the market in the next year?
Economic expansion continues to be slow and steady, as evidenced by a lack of
price pressure at the consumer and producer levels, strong consumer confidence,
low unemployment figures, and a stable money supply. It is not clear if or when
the Federal Reserve will raise rates again. Our strategy is to keep the fund at
or near its current maturity range until the interim volatility subsides and we
can better assess the direction of interest rates.
5
<PAGE>
Nuveen Tax-Free Reserves, Inc.
February 28, 1997 Annual Report
Reserves
Overview
<TABLE>
<CAPTION>
Fund Highlights
=================================================
<S> <C>
Inception Date 11/82
Total Net Assets $304,087,480
Average Weighted Maturity (Days) 33
- -------------------------------------------------
Tax-Free Yields
=================================================
SEC 7-Day Yield 2.79%
SEC 30-Day Yield 2.80%
- -------------------------------------------------
Taxable Equivalent Yields
=================================================
SEC 7-Day Yield 4.36%
SEC 30-Day Yield 4.38%
- -------------------------------------------------
</TABLE>
Based on a federal income tax rate of 36%; represents the yield needed from a
taxable investment necessary to equal the yield of the Nuveen fund on an after-
tax basis.
[PIE CHART APPEARS HERE]
[LINE GRAPH APPEARS HERE]
====
6
<PAGE>
Nuveen California Tax-Free Money Market Fund
February 28, 1997 Annual Report
California
Overview
<TABLE>
<CAPTION>
Fund Highlights
=================================================
<S> <C>
Inception Date 3/86
Total Net Assets $185,638,604
Average Weighted Maturity (Days) 22
- -------------------------------------------------
Tax-Free Yields
=================================================
SEC 7-Day Yield 2.87%
SEC 30-Day Yield 2.88%
- -------------------------------------------------
Taxable Equivalent Yields
=================================================
SEC 7-Day Yield 4.95%
SEC 30-Day Yield 4.97%
- -------------------------------------------------
</TABLE>
Based on a combined federal and state income tax rate of 42%; represents the
yield needed from a taxable investment necessary to equal the yield of the
Nuveen fund on an after-tax basis.
[PIE CHART APPEARS HERE]
[LINE GRAPH APPEARS HERE]
====
7
<PAGE>
Nuveen Massachusetts Tax-Free Money Market Fund
February 28, 1997 Annual Report
Massachusetts
Overview
<TABLE>
<CAPTION>
Fund Highlights
================================================
<S> <C>
Inception Date 2/87
Total Net Assets $41,024,478
Average Weighted Maturity (Days) 48
- ------------------------------------------------
Tax-Free Yields
================================================
SEC 7-Day Yield 2.79%
SEC 30-Day Yield 2.80%
- ------------------------------------------------
Taxable Equivalent Yields
================================================
SEC 7-Day Yield 4.94%
SEC 30-Day Yield 4.96%
- ------------------------------------------------
</TABLE>
Based on a combined federal and state income tax rate of 43.5%; represents the
yield needed from a taxable investment necessary to equal the yield of the
Nuveen fund on an after-tax basis.
[PIE CHART APPEARS HERE]
[LINE GRAPH APPEARS HERE]
====
8
<PAGE>
Nuveen New York Tax-Free Money Market Fund
February 28, 1997 Annual Report
New York
Overview
<TABLE>
<CAPTION>
Fund Highlights
================================================
<S> <C>
Inception Date 2/87
Total Net Assets $26,546,301
Average Weighted Maturity (Days) 47
- ------------------------------------------------
Tax-Free Yields
================================================
SEC 7-Day Yield 2.86%
SEC 30-Day Yield 2.87%
- ------------------------------------------------
Taxable Equivalent Yields
================================================
SEC 7-Day Yield 4.81%
SEC 30-Day Yield 4.82%
- ------------------------------------------------
</TABLE>
Based on a combined federal and state income tax rate of 40.5%; represents the
yield needed from a taxable investment necessary to equal the yield of the
Nuveen fund on an after-tax basis.
[PIE CHART APPEARS HERE]
[LINE GRAPH APPEARS HERE]
====
9
<PAGE>
Financial Section
Contents
12 Portfolio of Investments
25 Statement of Net Assets
26 Statement of Operations
30 Statement of Changes in Net Assets
34 Notes to Financial Statements
39 Financial Highlights
48 Report of Independent
Public Accountants
====
11
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
Tax-Free Reserves
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alabama -- 4.0%
$12,200,000 The Medical Clinic Board of the City of Birmingham - UAHSF, Medical A-1+ $12,200,000
Clinic Revenue Bonds, UAHSF Series 1991, Variable Rate Demand
Bonds, 3.550%, 12/01/26+
- -----------------------------------------------------------------------------------------------------------------------
Arizona -- 6.4%
7,000,000 The Industrial Development Authority of the County of Apache (Arizona), VMIG-1 7,000,000
Pollution Control Revenue Bonds, 1981 Series B (Tucson Electric Power
Company Project ), Variable Rate Demand Bonds, 3.450%, 10/01/21+
12,600,000 City of Mesa Municipal Development Corporation, Special Tax Updates VMIG-1 12,600,000
Bonds, Series 1985, Commercial Paper, 3.400%, 4/30/97
- -----------------------------------------------------------------------------------------------------------------------
Arkansas -- 1.0%
2,900,000 Board of Trustees of the University of Arkansas, Various Facility Revenue VMIG-1 2,900,000
Bonds (UAMS Campus), Series 1994, Variable Rate Demand Bonds,
3.350%, 12/01/19+
- -----------------------------------------------------------------------------------------------------------------------
California -- 2.6%
5,000,000 California School Cash Reserve Program Authority, 1996 Pool Bonds, MIG-1 5,013,770
Series A Note, 4.750%, 7/02/97
3,000,000 Santa Clara County Transit District, Refunding Equipment Trust VMIG-1 3,000,000
Certificates, Variable Rate Demand Bonds, 3.450%, 6/01/15+
- -----------------------------------------------------------------------------------------------------------------------
Delaware -- 3.8%
11,452,500 New Castle County, Delaware, Economic Development Revenue Refunding A-1 11,452,500
Bonds (Henderson/McGuire Partners Project), Series 1993, Variable
Rate Demand Bonds, 3.350%, 8/15/20+
- -----------------------------------------------------------------------------------------------------------------------
District of Columbia -- 2.4%
7,200,000 District of Columbia (Washington, D.C.), General Obligation General VMIG-1 7,200,000
Fund Recovery Bonds, Series 1991B, Variable Rate Demand Bonds,
3.500%, 6/01/03+
- -----------------------------------------------------------------------------------------------------------------------
Florida -- 5.9%
1,400,000 Florida Housing Finance Agency, Multi-Family Housing Revenue Refunding A-1 1,400,000
Bonds, 1989 Series E (Fairmont Oaks Project), Variable Rate Demand
Bonds, 3.500%, 4/01/26+
4,210,000 Florida Municipal Power Agency, Initial Pooled Loan Project, Commercial A-1 4,210,000
Paper Notes, Series A, 3.450%, 6/20/97
1,000,000 Atlantic Beach Improvement and Refunding Revenue Bonds, Series VMIG-1 1,000,000
1994B (Fleet Landing Project), Variable Rate Demand Bonds,
3.500%, 10/01/24+
=====
12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Florida -- continued
$3,100,000 Pasco County Housing Finance Authority, Multi-Family Housing Revenue VMIG-1 $ 3,100,000
Bonds (Carlton Arms of Magnolia Valley Project), Series 1985, Variable
Rate Demand Bonds, 3.375%, 12/01/07+
4,800,000 Sarasota County Public Hospital District, Hospital Revenue Bonds A-1+ 4,800,000
(Sarasota Memorial Hospital Project), Series C, Commercial Paper,
3.450%, 3/21/97
3,300,000 Sunshine State Governmental Financing Commission, Revenue Bonds, VMIG-1 3,300,000
Series 1986, Commercial Paper, 3.500%, 3/05/97
- -----------------------------------------------------------------------------------------------------------------------
Georgia -- 6.1%
Municipal Gas Authority of Georgia, Gas Revenue Bonds (Transco
Portfolio I Project), Series B, Commercial Paper:
5,000,000 3.300%, 3/07/97 A-1+ 5,000,000
3,400,000 3.400%, 5/14/97 VMIG-1 3,400,000
10,000,000 Fulco Hospital Authority, Revenue Anticipation Certificates (Saint VMIG-1 10,000,000
Joseph's Hospital of Atlanta Project), Series 1989, Commercial
Paper, 3.350%, 4/30/97
- -----------------------------------------------------------------------------------------------------------------------
Hawaii -- 0.9%
2,600,000 Hawaii State Department of Budget and Finance, Special Purpose A-1 2,600,000
Floating Rate Demand Revenue Bonds (Adventist
Health System -- West), Series 1984, Variable Rate
Demand Bonds, 3.700%, 9/01/99+
- -----------------------------------------------------------------------------------------------------------------------
Illinois -- 9.1%
7,000,000 Illinois Development Finance Authority, Pollution Control Revenue Bonds P-1 7,000,000
(Diamond - Star Motors Corporation Project), Series 1985, Variable
Rate Demand Bonds, 3.550%, 12/01/08+
6,000,000 Illinois Education Facilities Authority, Adjustable Demand Revenue VMIG-1 6,000,000
Bonds, Shedd Aquarium Society, Series 1987B, Commercial Paper,
3.550%, 5/06/97
1,570,000 Illinois Health Facilities Authority, Unit Priced Demand Adjustable Revenue A-1+ 1,570,000
Bonds, Alexian Brothers Health System, Inc. (Alexian Brothers Medical
Center, Inc. Project), Series 1985D, Commercial Paper, 3.400%, 4/25/97
4,400,000 Illinois Health Facilities Authority, Adjustable Demand Revenue Bonds, VMIG-1 4,400,000
Series 1991 (Victory Health Services Project), Commercial Paper,
3.500%, 3/20/97
=====
13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
Tax-Free Reserves -- continued
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Illinois -- continued
$ 3,000,000 City of Chicago, Chicago-O'Hare International Airport, Special Facility P-1 $ 3,000,000
Revenue Bonds (American Airlines, Inc. Project), Series 1983C,
Variable Rate Demand Bonds, 3.450%, 12/01/17+
5,700,000 City of Decatur, Macon County, Illinois, Unit Priced Demand Adjustable VMIG-1 5,700,000
Water Revenue Bonds, Series 1985, Commercial Paper,
3.550%, 4/09/97
- -----------------------------------------------------------------------------------------------------------------------
Iowa -- 2.9%
6,000,000 Iowa School Corporations, Warrant Certificates, 1996-97 Series A MIG-1 6,014,916
Note, 4.750%, 6/27/97
2,900,000 City of Eddyville, Iowa, Industrial Development Revenue Bonds N/R 2,900,000
(Heartland Lysine, Inc. Project), Series 1985, Variable Rate
Demand Bonds, 3.650%, 11/01/03+
- -----------------------------------------------------------------------------------------------------------------------
Kentucky -- 3.6%
2,000,000 Kentucky Governmental Agencies, 1996 Cash Flow Borrowing Program, N/R 2,000,947
Certificates of Participation, Tax and Revenue Anticipation Notes,
4.300%, 6/30/97
9,005,000 Hancock County, Kentucky, Industrial Building Revenue Refunding N/R 9,005,000
Bonds (Southwire Company Project), Series 1990, Variable Rate
Demand Bonds, 3.900%, 7/01/10+
- -----------------------------------------------------------------------------------------------------------------------
Louisiana -- 4.9%
10,000,000 Louisiana Recovery District, Sales Tax Bonds, Series 1988, Commercial Aaa 10,000,000
Paper, 3.900%, 7/01/97
5,000,000 Ascension Parish Pollution Control (BASF Wyandotte Corporation), P-1 5,000,000
Variable Rate Demand Bonds, 3.500%, 12/01/05+
- -----------------------------------------------------------------------------------------------------------------------
Michigan -- 2.7%
7,100,000 Michigan Job Development Authority, Limited Obligation Revenue Bonds A-1 7,100,000
(Frankenmuth Bavarian Inn Motor Lodge Project), Series A, Variable
Rate Demand Bonds, 3.850%, 9/01/15+
1,065,000 The Economic Development Corporation of the City of Warren, MaComb P-1 1,065,000
County, Michigan, Floating Rate Limited Obligation Revenue Bonds
(The Prince Company, Inc., Michigan Division Project), Series A,
Variable Rate Demand Bonds, 3.750%, 11/01/99+
- -----------------------------------------------------------------------------------------------------------------------
Minnesota -- 2.5%
5,255,000 City of Bloomington, Minnesota, Floating Rate Demand Commercial A-1+ 5,255,000
Revenue Bonds (James Avenue Associates Project), Series 1985,
Variable Rate Demand Bonds, 3.350%, 12/01/15+
</TABLE>
====
14
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Minnesota -- continued
$ 2,400,000 Housing and Redevelopment Authority of the City of Saint Paul, A-1 $2,400,000
Minnesota, Variable Rate Demand Purchase, District Heating
Revenue Bonds, 1982 Series A, Variable Rate Demand Bonds,
3.550%, 12/01/12+
- -----------------------------------------------------------------------------------------------------------------------
Missouri -- 3.0%
State Environmental Improvement and Energy Resources Authority,
Unit Priced Demand Adjustable Pollution Control Revenue Bonds,
Series 1985 A (Union Electric Company), Commercial Paper:
3,600,000 3.300%, 4/10/97 VMIG-1 3,600,000
5,600,000 3.550%, 5/21/97 VMIG-1 5,600,000
- -----------------------------------------------------------------------------------------------------------------------
New Hampshire -- 2.3%
7,000,000 New Hampshire Higher Educational and Health Facilities Authority, A-1 7,000,000
Revenue Bonds, Hunt Community Issue, Series 1996, Variable Rate
Demand Bonds, 3.450%, 5/01/26+
- -----------------------------------------------------------------------------------------------------------------------
New York -- 2.8%
3,500,000 The City of New York, General Obligation Bonds, Fiscal 1995 Series B, VMIG-1 3,500,000
Variable Rate Demand Bonds, 3.500%, 8/15/22+
5,000,000 The City of New York, General Obligation Revenue Anticipation Notes, MIG-1 5,012,173
Fiscal 1997 Series B, 4.500%, 6/30/97
- -----------------------------------------------------------------------------------------------------------------------
North Carolina -- 4.0%
2,400,000 The Wake County Industrial Facilities and Pollution Control Financing P-1 2,400,000
Authority, Pollution Control Refunding Bonds (Carolina Power and
Light Company Project), Series 1990B, Commercial Paper,
3.700%, 4/10/97
6,630,000 The Wake County Industrial Facilities and Pollution Control Financing P-1 6,630,000
Authority, Pollution Control Refunding Bonds (Carolina Power and
Light Company Project), Series 1990A, Commercial Paper,
3.550%, 4/09/97
3,000,000 The Wake County Industrial Facilities and Pollution Control Financing VMIG-1 3,000,000
Authority, Pollution Control Refunding Bonds (Carolina Power and
Light Company Project), Series 1985C, Variable Rate Demand Bonds,
3.500%, 10/01/15
- -----------------------------------------------------------------------------------------------------------------------
Ohio -- 9.4%
3,100,000 Ohio School Districts, 1996 Cash Flow Borrowing Program, Certificates MIG-1 3,105,231
of Participation, Revenue Anticipation Notes of Certain Ohio School
Districts, Series B, 4.530%, 6/30/97
</TABLE>
====
15
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
Tax-Free Reserves -- continued
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ohio -- continued
$ 8,800,000 Centerville Variable Rate Demand Health Care Revenue Bonds VMIG-1 $ 8,800,000
(Bethany Lutheran Village Continuing Care Facilities Expansion
Project), Variable Rate Demand Bonds, 3.400%, 5/01/08+
5,200,000 Port Authority of Cincinnati and Hamilton County, Daily Adjustable A-2 5,200,000
Economic Development Revenue Bonds (Kenwood Office Associates
Project), Series 1985, Variable Rate Demand Bonds, 3.500%, 9/01/25+
1,200,000 Cuyahoga County, University Hospital of Cleveland, Series 1985, Variable VMIG-1 1,200,000
Rate Demand Bonds, 3.550%, 1/01/16+
5,120,000 County of Erie, Ohio, Adjustable Rate Demand Health Care Facilities VMIG-1 5,120,000
Revenue Bonds (The Commons of Providence Project), Series 1996 B,
Variable Rate Demand Bonds, 3.450%, 10/01/21+
3,685,000 County of Franklin, Ohio, Floating Rate Demand Hospital Financing N/R 3,685,000
Revenue Bonds, Series 1993 (Traditions at Mill Run Project), Variable
Rate Demand Bonds, 3.500%, 11/01/14+
1,880,000 County of Hamilton, Ohio, Adjustable Rate Demand Healthcare Revenue N/R 1,880,000
Bonds, Series 1995 (Community Limited Care Dialysis Center Project),
Variable Rate Demand Bonds, 3.350%, 9/01/05+
- -----------------------------------------------------------------------------------------------------------------------
Oregon -- 1.0%
3,100,000 Port of Morrow (Portland G.E. Company Boardman Project), Variable VMIG-1 3,100,000
Rate Demand Bonds, 3.500%, 10/01/13+
- -----------------------------------------------------------------------------------------------------------------------
Pennsylvania -- 3.4%
3,250,000 The Pennsylvania State University Notes, Series of 1996, MIG-1 3,252,189
4.250%, 4/04/97
4,000,000 City of Philadelphia, Pennsylvania, General Obligation Bonds, VMIG-1 4,000,000
Series 1990B, Commercial Paper, 3.550%, 4/10/97
3,000,000 City of Philadelphia, Pennsylvania, Gas Works Revenue Notes, A-1+ 3,000,000
Commercial Paper, Series B, 3.500%, 3/27/97
- -----------------------------------------------------------------------------------------------------------------------
Tennessee -- 4.4%
6,800,000 The Public Building Authority of the City of Clarksville, Adjustable Rate A-1+ 6,800,000
Pooled Financing Revenue Bonds, Series 1994 (Tennessee Municipal
Bond Fund), Variable Rate Demand Bonds, 3.300%, 6/01/24+
3,500,000 The Industrial Development Board of the County of Jackson, Variable N/R 3,500,000
Rate Industrial Development Demand Revenue Bonds (Esselte Project),
Series 1985B, Variable Rate Demand Bonds, 3.550%, 8/01/15+
3,000,000 The Public Building Authority of the County of Montgomery, Adjustable A-1+ 3,000,000
Rate Pooled Financing Revenue Bonds, Series 1985 (Tennessee
County Loan Pool), Variable Rate Demand Bonds, 3.300%, 3/01/25+
</TABLE>
=====
16
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Texas -- 3.0%
$ 4,000,000 State of Texas Tax and Revenue Anticipation Notes, Series 1996, MIG-1 $ 4,023,588
4.750%, 8/29/97
5,000,000 Southwest Higher Education Authority, Southern Methodist University, VMIG-1 5,000,000
Variable Rate Demand Bonds, 3.450%, 7/01/15+
- -----------------------------------------------------------------------------------------------------------------------
Utah -- 1.2%
3,550,000 West Valley City Industrial Development (Johnson Matthey Project), N/R 3,550,000
Variable Rate Demand Bonds, 3.550%, 12/01/11+
- -----------------------------------------------------------------------------------------------------------------------
Virginia -- 2.9%
3,000,000 Industrial Development Authority of Albemarle County, Variable Rate Health A-1 3,000,000
Services Revenue Bonds (The University of Virginia Health Services
Foundation), Series 1996, Variable Rate Demand Bonds, 3.350%, 2/01/26+
2,600,000 The Industrial Development Authority of the City of Norfolk, Floating N/R 2,600,000
Rate Industrial Development Revenue Bonds (Norfolk-Virginia Beach-
Portsmouth MSA Limited Partnership Project), Variable Rate Demand
Bonds, 5.363%, 11/01/04+
3,300,000 The Industrial Development Authority of the City of Richmond, Floating N/R 3,300,000
Rate Industrial Development Revenue Bonds (Richmond MSA Limited
Partnership Project), Variable Rate Demand Bonds, 5.363%, 11/01/04+
- -----------------------------------------------------------------------------------------------------------------------
Washington -- 3.2%
5,100,000 Washington Health Care Facilities Authority, Variable Rate Demand A-1 5,100,000
Revenue Bonds, Series 1984 (Adventist Health System-West/Walla
Walla General Hospital), Variable Rate Demand Bonds,
3.700%, 9/01/09+
3,300,000 Washington State Housing Finance Commission, Nonprofit Revenue VMIG-1 3,300,000
Bonds (Crista Ministries Project), Series 1991A, Variable Rate
Demand Bonds, 3.300%, 7/01/11+
1,400,000 Spokane County, Washington, Road Fund Tax Anticipation Notes, N/R 1,400,000
Series 1996B, 4.000%, 6/30/97
- -----------------------------------------------------------------------------------------------------------------------
$302,172,500 Total Investments -- 99.4% 302,245,314
============-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- 0.6% 1,842,166
-------------------------------------------------------------------------------------------------------
Net Assets -- 100% $304,087,480
=======================================================================================================
</TABLE>
* Ratings (not covered by the report of independent public
accountants): rating. Using the higher of Standard & Poor's
or Moody's
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.
=====
17
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
California -- continued
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$2,700,000 California Health Facilities Financing Authority (Sutter/CHS), Series VMIG-1 $2,702,188
1996B, Variable Rate Demand Bonds, 3.350%, 7/01/12+
2,000,000 California Health Facilities Financing Authority (Sutter/CHS), VMIG-1 2,000,000
Variable Rate Demand Bonds, 3.350%, 7/01/22+
7,700,000 California Health Facilities Authority, Variable Rate Hospital Revenue VMIG-1 7,700,000
Bonds, Adjustable Convertible Extendable Securities -- ACES
(Saint Francis Memorial Hospital), Series 1993B, Variable Rate
Demand Bonds, 3.200%, 11/01/19+
3,000,000 California School Cash Reserve Program Authority, 1996 Pool Bonds MIG-1 3,008,262
Series A, General Obligation Note, 4.750%, 7/02/97
3,000,000 State of California 1996-97 Revenue Anticipation Notes, MIG-1 3,005,071
4.500%, 6/30/97
2,001,000 State of California Department of Water Resources, Water Revenue A-1+ 2,001,000
Commercial Paper Notes, Series 1, 3.350%, 5/23/97
7,100,000 Certificates of Participation, California Statewide Communities VMIG-1 7,100,000
Development Authority, Northern California Retired Officers
Community, Variable Rate Demand Bonds, 3.350%, 6/01/26+
4,430,000 Tri-Modal Variable Rate Revenue Refunding Certificates of A-1+ 4,430,000
Participation (House Ear Institute), 1993 Series A, Variable Rate
Demand Bonds, 3.350%, 12/01/18+
9,200,000 California Statewide Communities Development Authority, VMIG-1 9,200,000
Certificates of Participation, St. Joseph Health System Obligated
Group, Variable Rate Demand Bonds, 3.350%, 7/01/24+
3,080,000 Chico Multifamily Housing (Sycamore Glen Project), Variable Rate N/R 3,080,000
Refunding Bonds, Series 1995, Variable Rate Demand Bonds,
3.590%, 4/07/14+
4,500,000 Contra Costa Multifamily Mortgage Revenue Refunding (Delta Square VMIG-1 4,500,000
Project), Series 1990A, Variable Rate Demand Bonds, 3.300%, 8/01/07+
3,700,000 Fremont Multifamily Housing (Mission Wells Project), Series 1985E, A-1 3,700,000
Variable Rate Demand Bonds, 3.350%, 9/01/07+
2,000,000 Grand Terrace Redevelopment Agency, Multifamily Housing A-1 2,000,000
(Mount Vernon Villas Project), Variable Rate Demand Bonds,
3.350%, 12/01/11+
3,000,000 Hayward Housing Authority, Multifamily Mortgage Revenue A-1 3,000,000
Refunding Bonds,Series 1993A (Huntwood Terrace), Variable
Rate Demand Bonds, 3.400%, 3/01/27+
3,860,000 Hillsborough Certificates of Participation, Water and Sewer System A-1 3,860,000
Project, Series 1995A, Variable Rate Demand Bonds, 3.700%, 6/01/15+
18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$6,400,000 Irvine Ranch Water District, Consolidated A-1+ $6,400,000
Bonds, Series 1985-B, 1986 Capital Improvement
Project, Variable Rate Demand Bonds,
3.250%, 10/01/09+
3,100,000 Irvine Ranch Water District, Variable VMIG-1 3,100,000
Rate Demand Bonds, 3.250%, 6/01/15+
4,300,000 Irvine Ranch Water District, Variable VMIG-1 4,300,000
Rate Demand Consolidated Refunding Bonds,
Series A, Variable Rate Demand Bonds,
3.250%, 5/01/09+
9,000,000 Kern Community College District, Certificates A-2 9,000,000
of Participation, Series 1995, Variable Rate
Demand Bonds, 3.950%, 1/01/25+
4,855,000 City of Los Angeles (Studio Colony Project), VMIG-1 4,855,000
Multifamily Housing Revenue Bonds, Variable
Rate Demand Bonds, 3.350%, 5/01/07+
2,400,000 Los Angeles County, Tax and Revenue Anticipation MIG-1 2,407,859
Notes, 1996-1997 Series A, 4.500%, 6/30/97
2,500,000 The City of Los Angeles, Wastewater System, VMIG-1 2,500,000
Commercial Paper Revenue Notes, 3.400%,
5/15/97
8,400,000 Monterey County Financing Authority, Revenue VMIG-1 8,400,000
Bonds (Reclamation and Distribution Project),
Series 1995A, Variable Rate Demand Bonds,
3.400%, 9/01/36+
7,100,000 Oakland, California Certificates of Participation, N/R 7,100,000
Project, Variable Rate Demand Capital Improvement
Bonds, 3.650%, 12/01/15+
7,900,000 Orange County Apartment Development (Monarch Bay A-1 7,900,000
Apartments Project), Variable Rate Demand Bonds,
3.300%, 10/01/07+
3,800,000 Orange County (Robinson Ranch Apartments Project), VMIG-1 3,800,000
Variable Rate Demand Revenue Bonds, 3.450%,
11/01/08+
1,500,000 Orange County Irvine Coast Assessment District VMIG-1 1,500,000
#88-1, Variable Rate Demand Bonds, 3.400%,
9/02/18+
4,200,000 Orange County Sanitation District, Certificates VMIG-1 4,200,000
of Participation, Variable Rate Demand Bonds,
3.400%, 8/01/17+
2,000,000 Orange County Water District, Variable Rate A-1+ 2,000,000
Rate Demand Bonds, 3.250%, 8/15/15+
4,200,000 San Diego County Rincon Del Diablo Municipal Water VMIG-1 4,200,000
District, Rincon Public Facilities Corporation,
Commercial Paper, 3.850%, 5/01/97
8,000,000 Sacramento Municipal Utility District, Series I, A-1+ 8,000,000
Commercial Paper Notes, 3.350%, 6/20/97
1,200,000 San Bernardino Multifamily Housing (Castle Park VMIG-1 1,200,000
Apartments), Variable Rate Demand Bonds, 3.550%,
11/01/05+
19
</TABLE>
<PAGE>
Portfolio of Investments
California -- continued
<TABLE>
<CAPTION>
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,500,000 San Bernardino County, 1996-1997 Tax and Revenue Anticipation MIG-1 $ 2,504,986
Notes, 4.500%, 6/30/97
2,000,000 San Bernardino County (1996 County Center Refinancing Project), VMIG-1 2,000,000
Certificates of Participation, Variable Rate Demand Bonds,
3.250%, 7/01/15+
3,000,000 San Diego Housing Authority, Multifamily Housing Revenue Refunding A-1+ 3,000,000
Bonds, Series 1993-A, (Carmel Del Mar Apartments), Variable Rate
Demand Bonds, 3.200%, 12/01/15+
3,000,000 San Diego County Teeter Obligation, Tax-Exempt Commercial Paper, A-1 3,000,000
3.350%, 5/22/97
7,000,000 San Dimas Industrial Development Bonds (Bausch & Lomb N/R 7,000,000
Incorporated), Variable Rate Demand Bonds, 3.650%, 12/01/15+
5,900,000 Santa Paula Public Financing Authority, Lease Revenue Bonds, Series A-1 5,900,000
1996 Water System Acquisition Project, Variable Rate Demand
Bonds, 3.500%, 2/01/26+
5,000,000 Southern California Public Power Authority, Transmission Project, VMIG-1 5,000,000
Variable Rate Demand Bonds, 3.200%, 7/01/19+
8,000,000 Torrance Hospital Revenue (Little Company of Mary Hospital -- A-1 8,000,000
Torrance Memorial Hospital), Variable Rate Demand Bonds,
3.250%, 2/01/22+
900,000 Turlock Irrigation District (Transmission Projects), 1996 Series A, VMIG-1 900,000
Certificates of Participation, Variable Rate Demand Bonds,
3.150%, 1/01/26+
2,640,000 Vista Multifamily Housing (Shadowridge Apartments), Variable Rate A-1+ 2,640,000
Demand Bonds, 3.350%, 5/01/05+
3,000,000 Washington Township Hospital District, 1984 Issue A, Variable Rate VMIG-1 3,000,000
Demand Bonds, 3.350%, 1/01/16+
- -----------------------------------------------------------------------------------------------------------------------
$185,066,000 Total Investments -- 99.7% 185,094,366
============-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- 0.3% 544,238
-------------------------------------------------------------------------------------------------------
Net Assets -- 100% $185,638,604
=======================================================================================================
</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.
20
<PAGE>
<TABLE>
<CAPTION>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
Portfolio of Investments
Massachusetts
Principal Amortized
Amount Description Ratings* Cost
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,000,000 Brookline General Obligation Bonds, Unlimited Tax -- Note, Aaa $1,000,568
3.750%, 6/04/97
2,000,000 Framingham General Obligation Bonds, Unlimited Tax -- Note, N/R 2,000,902
4.250%, 3/28/97
1,500,000 Ipswich, Massachusetts Bond Anticipation Notes, General Obligation N/R 1,504,722
Unlimited Tax -- Note, 4.000%, 2/05/98
2,000,000 Massachusetts Bay Transportation Authority, Series C, Commercial A-1+ 2,000,000
Paper, 3.500%, 5/29/97
500,000 The Commonwealth of Massachusetts, Dedicated Income Tax VMIG-1 500,000
Bonds, Fiscal Recovery Loan Act of 1990, Series B, Variable Rate
Demand Bonds, 3.400%, 12/01/97
1,300,000 The Commonwealth of Massachusetts, Dedicated Income Tax Bonds, VMIG-1 1,300,000
Fiscal Recovery Loan Act of 1990, Series E, Variable Rate
Demand Bonds, 3.400%, 12/01/97
Massachusetts Health and Educational Facilities Authority
(Capital Asset Program), Variable Rate Demand Bonds:
500,000 3.150%, 7/01/05+ VMIG-1 500,000
1,900,000 3.450%, 1/01/35+ VMIG-1 1,900,000
1,900,000 Massachusetts Health and Educational Facilities Authority VMIG-1 1,900,000
(Harvard University), Variable Rate Demand Bonds,
3.200%, 8/01/17+
1,800,000 Massachusetts Health and Educational Facilities Authority VMIG-1 1,800,000
(Brigham and Women's Hospital), Variable Rate Demand Bonds,
3.200%, 7/01/17+
1,200,000 Massachusetts Health and Educational Facilities Authority VMIG-1 1,200,000
(M.I.T. Project), Variable Rate Demand Bonds, 3.100%, 7/01/21+
1,145,000 Massachusetts Industrial Finance Agency, Adjustable Rate N/R 1,145,000
Industrial Revenue Bonds (Jencoat/Levy Realty Trust), Variable
Rate Demand Bonds, 4.210%, 10/06/99+
800,000 Massachusetts Industrial Finance Agency (Nova Realty Trust 1994 P-1 800,000
Refunding), Variable Rate Demand Bonds, 3.100%, 12/01/02+
1,940,000 Massachusetts Health and Educational Facilities Authority A-2 1,940,000
(Community Health Center Capital Fund), Variable Rate Demand
Bonds, 3.300%, 3/01/15+
2,000,000 Massachusetts Industrial Finance Agency, Pollution Control Revenue A-1 2,000,000
Refunding (New England Power Company), Commercial Paper,
3.450%, 3/05/97
1,900,000 Massachusetts Port Authority, Multimodal Revenue Refunding Bonds, VMIG-1 1,900,000
Series 1995A, Variable Rate Demand Bonds, 3.350%, 7/01/15+
21
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
Massachusetts -- continued
Principal Amortized
Amount Description Ratings* Cost
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,575,000 Massachusetts Industrial Finance Agency, Chestnut House Apartments A-1 $ 1,575,000
(FHA Insurance), Variable Rate Demand Bonds, 3.150%, 8/01/26+
1,900,000 Massachusetts Industrial Finance Agency (Showa Women's Institute VMIG-1 1,900,000
Boston, Inc. 1994 Project), Variable Rate Demand Bonds,
3.400%, 3/15/04+
1,000,000 Massachusetts Industrial Finance Agency (Emerson College Issue), N/R 1,000,000
Series 1995, Variable Rate Demand Bonds, 3.100%, 1/01/15+
1,900,000 Massachusetts Industrial Finance Agency, Edgewood Retirement VMIG-1 1,900,000
Community Project, Series 1995-C, Variable Rate Demand Bonds,
3.350%, 11/15/25+
1,000,000 Massachusetts Industrial Finance Agency (Lower Mills Associates N/R 1,000,000
LP), Series 1995, Variable Rate Demand Bonds, 3.100%, 12/01/20+
1,800,000 Massachusetts Industrial Finance Agency (Newbury College), N/R 1,800,000
1996 Series, Variable Rate Demand Bonds, 3.100%, 6/01/21+
1,800,000 Massachusetts Water Resources Authority, Series 1994, A-1+ 1,800,000
Commercial Paper, 3.350%, 3/06/97
1,500,000 Medway Massachusetts Bond Anticipation Notes, 4.000%, 6/13/97 N/R 1,501,812
1,000,000 Natick Bond Anticipation Notes, General Obligation Unlimited Tax N/R 1,001,436
-- Note, 3.750%, 2/27/98
500,000 New Bedford Industrial Development Revenue Refunding (Cliftex N/R 500,000
Corporation), Series 1989, Variable Rate Demand Bonds,
4.210%, 10/01/97
1,000,000 Peabody Bond Anticipation Notes, General Obligation Unlimited Tax N/R 1,001,431
-- Note, 4.150%, 8/15/97
900,000 Puerto Rico Industrial Medical Education and Environmental A-1 900,000
Authority, Ana G. Mendez Educational Foundation (FEAGM Project),
Variable Rate Demand Bonds, 3.300%, 12/01/15+
- ------------------------------------------------------------------------------------------------------------
$39,260,000 Total Investments -- 95.7% 39,270,871
===========-------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- 4.3% 1,753,607
---------------------------------------------------------------------------------------------
Net Assets -- 100% $41,024,478
=============================================================================================
* 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.
</TABLE>
See accompanying notes to financial statements.
22
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
New York
Principal Amortized
Amount Description Ratings* Cost
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,000,000 Buffalo Revenue Anticipation Notes, 4.250%, 7/15/97 MIG-1 $1,002,377
1,000,000 Dutchess County Industrial Development Agency Industrial Development A-1 1,000,000
Revenue Bonds (Toys "R" US -- NYTEX Inc. Facility), Series 1984,
Variable Rate Demand Bonds, 3.425%, 11/01/19+
1,000,000 Great Neck Union Free School District In The County Of Nassau New York, MIG-1 1,001,127
Tax Anticipation Notes For 1996-1997, 4.250%, 6/30/97
700,000 Guilderland Industrial Development Agency, Industrial Development P-1 700,000
Variable Rate Refunding Bonds, Series 1993A (Northeastern Ind. Park),
Variable Rate Demand Bonds, 3.200%, 12/01/08+
1,000,000 Nassau County Industrial Development Agency, Manhasset Associates A-1 1,000,000
Project, Series 1984, Variable Rate Demand Bonds, 3.250%, 12/01/99+
300,000 Nassau County Industrial Development Agency, Cold Spring Harbor Series A-1+ 300,000
1993, Variable Rate Demand Bonds, 3.400%, 7/01/23+
385,000 New York City Housing Development Corporation (Parkgate Tower), A-1+ 385,000
Variable Rate Demand Bonds, 3.250%, 12/01/07+
300,000 New York City Housing Development Corporation (Columbus Gardens A-1+ 300,000
Project), Variable Rate Demand Bonds, 3.200%, 2/01/07+
1,000,000 New York City Industrial Development Agency, Refunding Revenue A-1 1,000,000
(LaGuardia Associates Project), Variable Rate Demand Bonds,
3.400%, 12/01/15+
1,100,000 New York City Trust for Cultural Resources (Guggenheim Foundation), VMIG-1 1,100,000
Variable Rate Demand Bonds, 3.300%, 12/01/15+
1,000,000 New York City General Obligation Fiscal 1996 Series J-2, Commercial A-1+ 1,000,000
Paper, 3.450%, 7/06/97
1,000,000 New York City Series J-3, Commercial Paper, 3.550%, 5/30/97 A-1+ 1,000,000
1,000,000 Dormitory Authority of the State of New York (Sloan Kettering Cancer A-1 1,000,000
Center), Variable Rate Demand Bonds, 3.250%, 3/03/97
900,000 New York State Dormitory Authority, Revenue Bonds, Series 1995, VMIG-1 900,000
(Beverwyck Inc.), Variable Rate Demand Bonds, 3.400%, 7/01/25+
1,000,000 New York State Energy Research and Development Authority, Pollution P-1 1,000,000
Control Revenue (Central Hudson Gas and Electric Corporation),
Variable Rate Demand Bonds, 3.200%, 11/01/20+
2,400,000 New York State Energy Research and Development Authority, Pollution N/R 2,400,000
Control (Niagara Mohawk Power Corporation), Variable Rate Demand
Bonds, 3.700%, 3/01/27+
1,000,000 New York State Environmental Facilities Corporation (General Electric A-1+ 1,000,000
Company), Commercial Paper, 3.450%, 6/27/97
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
New York -- continued
Principal Amortized
Amount Description Ratings* Cost
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,200,000 New York State Housing Finance Agency (Normandie Court), Variable VMIG-1 $ 1,200,000
Rate Demand Bonds, 3.200%, 5/15/15+
900,000 New York State Housing Finance Agency, Demand Revenue Bonds, VMIG-1 900,000
Series 1984-A (Mt. Sinai School of Medicine), Variable Rate
Demand Bonds, 3.300%, 11/01/14+
765,000 New York State Job Development Authority, Series 1984E, Variable MIG-1 765,000
Rate Demand Bonds, 3.700%, 3/01/99+
1,200,000 New York Local Government Assistance Corp., Series 1995E, Variable VMIG-1 1,200,000
Rate Demand Bonds, 3.200%, 4/01/25+
1,000,000 New York State Medical Care Facilities Finance Agency (Lenox Hill VMIG-1 1,000,000
Hospital), Variable Rate Demand Bonds, 3.250%, 11/01/08+
1,200,000 New York State Medical Care Facilities Finance Agency (Children's VMIG-1 1,200,000
Hospital of Buffalo), Variable Rate Demand Bonds,
3.400%, 11/01/05+
1,000,000 Sayville UFSD General Obligation Tax Anticipation Notes, MIG-1 1,001,704
4.500%, 6/26/97
1,100,000 Village of Southampton, Suffolk County, New York, Anticipation N/R 1,103,040
Notes, 1997, 4.000%, 2/13/98
500,000 Syracuse Industrial Development Agency, Multi-Modal VMIG-1 500,000
Interchangeable Rate, Civic Facility Revenue Bonds, (Syracuse
University), Variable Rate Demand Bonds, 3.300%, 3/01/23+
400,000 Triborough Bridge and Tunnel Authority Special Obligation, Variable MIG-1 400,000
Rate Demand Bonds, Series 1994, 3.200%, 1/01/24+
500,000 Yonkers Industrial Development Agency, Series 1989 Civic Facility VMIG-1 500,000
Revenue Bonds, Variable Rate Demand Bonds, 3.150%, 7/01/19+
- ------------------------------------------------------------------------------------------------------------------------------------
$25,850,000 Total Investments -- 97.4% 25,858,248
=======================-------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- 2.6% 688,053
--------------------------------------------------------------------------------------------------------
Net Assets -- 100% $26,546,301
========================================================================================================
* 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.
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
Statement of Net Assets
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
Reserves CA MA NY
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments in short-term municipal securities,
at amortized cost (note 1) $302,245,314 $185,094,366 $39,270,871 $25,858,248
Cash 961,970 222,102 623,305 456,427
Receivables:
Interest 1,796,319 821,593 227,624 122,943
Investments sold -- - 1,060,000 220,000
Other assets 18,613 14,186 15,483 7,845
- -----------------------------------------------------------------------------------------------------------------------
Total assets 305,022,216 186,152,247 41,197,283 26,665,463
- -----------------------------------------------------------------------------------------------------------------------
Liabilities
Accrued expenses:
Management fees (note 4) 114,301 54,527 12,387 8,154
Other 177,952 67,513 72,516 50,699
Dividends payable 642,483 391,603 87,902 60,309
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities 934,736 513,643 172,805 119,162
- -----------------------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding (note 3) $304,087,480 $185,638,604 $41,024,478 $26,546,301
=======================================================================================================================
Shares outstanding:
Service Plan series -- 95,306,430 9,964,264 414,071
Distribution Plan series -- 57,489,607 27,082,874 26,115,563
Institutional series -- 32,842,567 3,977,340 16,667
- -----------------------------------------------------------------------------------------------------------------------
Total shares outstanding 304,087,480 185,638,604 41,024,478 26,546,301
=======================================================================================================================
Net asset value, offering and redemption price per share
(net assets divided by shares outstanding) $1.00 $1.00 $1.00 $1.00
=======================================================================================================================
See accompanying notes to financial statements.
</TABLE>
25
<PAGE>
Statement of Operations
Year ended February 28, 1997
<TABLE>
<CAPTION>
Reserves
- --------------------------------------------------------------------------------
Investment Income
Tax-exempt interest income (note 1) $11,181,059
- --------------------------------------------------------------------------------
<S> <C>
Expenses
Management fees (note 4) 1,543,853
12b-1 expense (note 4) 141,601
Shareholders' servicing agent fees and expenses 459,638
Custodian's fees and expenses 95,010
Directors' fees and expenses (note 4) 5,661
Professional fees 56,561
Shareholders' reports -- printing and mailing expenses 112,921
Federal and state registration fees 40,661
Other expenses 25,832
- --------------------------------------------------------------------------------
Total expenses before expense reimbursement 2,481,738
Expense reimbursement from investment adviser (note 4) (165,912)
- --------------------------------------------------------------------------------
Net expenses 2,315,826
- --------------------------------------------------------------------------------
Net investment income 8,865,233
Net gain (loss) from investment transactions (notes 1 and 2) -
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 8,865,233
================================================================================
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
California Money Market
------------------------------------------------------------
Distribution
Service Plan Plan Institutional
series series series Total
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Investment Income
Tax-exempt interest income (note 1) $2,449,983 $2,251,066 $1,698,717 $6,399,766
- ------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 4) 281,392 258,625 195,771 735,788
12b-1 expense (note 4) 86,592 61,766 -- 148,358
Shareholders' servicing agent fees and expenses 4,862 32,159 229 37,250
Custodian's fees and expenses 23,466 22,054 16,175 61,695
Directors' fees and expenses (note 4) 2,114 1,328 506 3,948
Professional fees 3,038 2,724 1,469 7,231
Shareholders' reports -- printing and mailing expenses 6,940 11,197 3,251 21,388
Federal and state registration fees 2,366 3,230 4,274 9,870
Other expenses 4,218 4,674 3,328 12,220
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses before expense reimbursement 414,988 397,757 225,003 1,037,748
Expense reimbursement from investment adviser (note 4) (28,060) (42,073) -- (70,133)
- ------------------------------------------------------------------------------------------------------------------------------
Net expenses 386,928 355,684 225,003 967,615
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income 2,063,055 1,895,382 1,473,714 5,432,151
Net gain (loss) from investment transactions (notes 1 and 2) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $2,063,055 $1,895,382 $1,473,714 $5,432,151
==============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations -- continued
Year ended February 28, 1997
Massachusetts Money Market
----------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- -------------------------------------------------------------------------------------------------------------------------------
Investment Income
Tax-exempt interest income (note 1) $ 990,723 $ 913,895 $ 151,058 $2,055,676
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses
Management fees (note 4) 117,258 107,737 17,805 242,800
12b-1 expense (note 4) 36,759 25,412 - 62,171
Shareholders' servicing agent fees and expenses 1,287 34,571 774 36,632
Custodian's fees and expenses 29,751 28,528 4,729 63,008
Directors' fees and expenses (note 4) 1,507 1,621 276 3,404
Professional fees 8,722 9,968 1,690 20,380
Shareholders' reports -- printing and mailing expenses 16,218 31,343 156 47,717
Federal and state registration fees 2,273 978 1,125 4,376
Other expenses 2,614 2,485 415 5,514
- -------------------------------------------------------------------------------------------------------------------------------
Total expenses before expense reimbursement 216,389 242,643 26,970 486,002
Expense reimbursement from investment adviser (note 4) (55,049) (94,603) (2,481) (152,133)
- -------------------------------------------------------------------------------------------------------------------------------
Net expenses 161,340 148,040 24,489 333,869
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income 829,383 765,855 126,569 1,721,807
Net gain (loss) from investment transactions (notes 1 and 2) (134) (365) (53) (552)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 829,249 $ 765,490 $ 126,516 $1,721,255
===============================================================================================================================
See accompanying notes to financial statements.
====
28
</TABLE>
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
New York Money Market
-----------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
Tax-exempt interest income (note 1) $14,354 $ 975,592 $574 $ 990,520
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 4) 1,671 113,406 66 115,143
12b-1 expense 133 11,444 - 11,577
Shareholders' servicing agent fees and expenses 1,318 32,710 25 34,053
Custodian's fees and expenses 653 44,475 26 45,154
Directors' fees and expenses (note 4) 20 1,372 - 1,392
Professional fees 248 17,143 11 17,402
Shareholders' reports -- printing and mailing expenses 1,014 35,929 53 36,996
Federal and state registration fees 182 649 3 834
Other expenses 44 2,929 2 2,975
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses before expense reimbursement 5,283 260,057 186 265,526
Expense reimbursement from investment adviser (note 4) (2,985) (104,103) (95) (107,183)
- ----------------------------------------------------------------------------------------------------------------------------------
Net expenses 2,298 155,954 91 158,343
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 12,056 819,638 483 832,177
Net gain (loss) from investment transactions (notes 1 and 2) - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $12,056 $ 819,638 $483 $ 832,177
==================================================================================================================================
</TABLE>
====
29 See accompanying notes to financial statements.
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Reserves
------------------------------
Year ended Year ended
2/28/97 2/29/96
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income $ 8,865,233 $ 10,864,878
Net realized gain (loss) from investment transactions
(notes 1 and 2) -- --
- -----------------------------------------------------------------------------------------------
Net increase in net assets from operations 8,865,233 10,864,878
- -----------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (8,865,233) (10,864,878)
- -----------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of shares 423,698,103 808,776,352
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 8,439,437 10,240,006
- -----------------------------------------------------------------------------------------------
432,137,540 819,016,358
- -----------------------------------------------------------------------------------------------
Cost of shares redeemed (467,712,524) (830,960,291)
- -----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions (35,574,984) (11,943,933)
Net assets at the beginning of year 339,662,464 351,606,397
- -----------------------------------------------------------------------------------------------
Net assets at the end of year $ 304,087,480 $ 339,662,464
===============================================================================================
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
California Money Market
------------------------------------------------------------------
Year ended 2/28/97
------------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 2,063,055 $ 1,895,382 $ 1,473,714 $ 5,432,151
Net realized gain (loss) from investment transactions
(notes 1 and 2) - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 2,063,055 1,895,382 1,473,714 5,432,151
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (2,063,055) (1,895,382) (1,473,714) (5,432,151)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of shares 138,494,313 60,809,468 209,608,538 408,912,319
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 1,919,782 1,593,201 47,282 3,560,265
- -----------------------------------------------------------------------------------------------------------------------------------
140,414,095 62,402,669 209,655,820 412,472,584
- -----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (115,829,598) (77,933,155) (211,205,458) (404,968,211)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions 24,584,497 (15,530,486) (1,549,638) 7,504,373
Net assets at the beginning of year 70,721,933 73,020,093 34,392,205 178,134,231
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 95,306,430 $ 57,489,607 $ 32,842,567 $ 185,638,604
===================================================================================================================================
California Money Market
------------------------------------------------------------------
Year ended 2/29/96
------------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- -----------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 1,933,448 $ 2,282,992 $ 1,255,971 $ 5,472,411
Net realized gain (loss) from investment transactions
(notes 1 and 2) - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 1,933,448 2,282,992 1,255,971 5,472,411
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (1,933,448) (2,282,992) (1,255,971) (5,472,411)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of share 137,297,132 130,907,267 212,399,556 480,603,955
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 1,633,671 1,762,239 3,093 3,399,003
- -----------------------------------------------------------------------------------------------------------------------------------
138,930,803 132,669,506 212,402,649 484,002,958
- -----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (109,980,788) (126,806,592) (228,782,833) (465,570,213)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions 28,950,015 5,862,914 (16,380,184) 18,432,745
Net assets at the beginning of year 41,771,918 67,157,179 50,772,389 159,701,486
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 70,721,933 $ 73,020,093 $ 34,392,205 $ 178,134,231
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
Statement of Changes in Net Assets -- continued
<TABLE>
<CAPTION>
Massachusetts Money Market
---------------------------------------------------------------
Year ended 2/28/97
---------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 829,383 $ 765,855 $ 126,569 $ 1,721,807
Net realized gain (loss) from investment transactions
(notes 1 and 2) (134) (365) (53) (552)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 829,249 765,490 126,516 1,721,255
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (829,249) (765,490) (126,516) (1,721,255)
- ---------------------------------------------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of shares 44,456,256 21,736,601 12,606,653 78,799,510
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 897,029 748,887 37,305 1,683,221
- ---------------------------------------------------------------------------------------------------------------------------------
45,353,285 22,485,488 12,643,958 80,482,731
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (73,639,600) (21,681,856) (12,216,797) (107,538,253)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions (28,286,315) 803,632 427,161 (27,055,522)
Net assets at the beginning of year 38,250,579 26,279,242 3,550,179 68,080,000
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 9,964,264 $ 27,082,874 $ 3,977,340 $ 41,024,478
=================================================================================================================================
Massachusetts Money Market
---------------------------------------------------------------
Year ended 2/29/96
---------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- ---------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 970,086 $ 770,798 $ 106,132 $ 1,847,016
Net realized gain (loss) from investment transactions
(notes 1 and 2) - - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 970,086 770,798 106,132 1,847,016
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (970,086) (770,798) (106,132) (1,847,016)
- ---------------------------------------------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of shares 77,847,781 24,524,563 16,474,350 118,846,694
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 960,638 758,160 46,176 1,764,974
- ---------------------------------------------------------------------------------------------------------------------------------
78,808,419 25,282,723 16,520,526 120,611,668
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (68,289,392) (23,240,661) (14,005,907) (105,535,960)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions 10,519,027 2,042,062 2,514,619 15,075,708
Net assets at the beginning of year 27,731,552 24,237,180 1,035,560 53,004,292
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 38,250,579 $ 26,279,242 $ 3,550,179 $ 68,080,000
=================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
<TABLE>
<CAPTION>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
New York Money Market
---------------------------------------------------------------
Year ended 2/28/97
---------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 12,056 $ 819,638 $ 483 $ 832,177
Net realized gain (loss) from investment transactions
(notes 1 and 2) - - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 12,056 819,638 483 832,177
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (12,056) (819,638) (483) (832,177)
- ---------------------------------------------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of shares 57,000 12,254,309 - 12,311,309
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 11,184 794,185 - 805,369
- ---------------------------------------------------------------------------------------------------------------------------------
68,184 13,048,494 - 13,116,678
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (208,572) (18,564,379) - (18,772,951)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions (140,388) (5,515,885) - (5,656,273)
Net assets at the beginning of year 554,459 31,631,448 16,667 32,202,574
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 414,071 $ 26,115,563 $16,667 $ 26,546,301
=================================================================================================================================
New York Money Market
---------------------------------------------------------------
Year ended 2/29/96
---------------------------------------------------------------
Service Plan Distribution Plan Institutional
series series series Total
- ---------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 16,065 $ 968,690 $ 533 $ 985,288
Net realized gain (loss) from investment transactions
(notes 1 and 2) - - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 16,065 968,690 533 985,288
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1) (16,065) (968,690) (533) (985,288)
- ---------------------------------------------------------------------------------------------------------------------------------
Common Share Transactions
(at constant net asset value of $1 per share) (note 1)
Net proceeds from sale of shares 364,272 36,230,907 - 36,595,179
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 13,053 942,307 - 955,360
- ---------------------------------------------------------------------------------------------------------------------------------
377,125 37,173,214 - 37,550,539
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (462,939) (35,339,438) - (35,802,377)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from share transactions (85,614) 1,833,776 - 1,748,162
Net assets at the beginning of year 640,073 29,797,672 16,667 30,454,412
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 554,459 $ 31,631,448 $16,667 $ 32,202,574
=================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
33
<PAGE>
Notes to Financial Statements
1. General Information and Significant Accounting Policies
At February 28, 1997, the money market Funds (the "Funds") covered in this
report are Nuveen Tax-Free Reserves, Inc., a nationally diversified Fund, Nuveen
California Tax-Free Fund, Inc. (comprising the Nuveen California Tax-Free Money
Market Fund) and Nuveen Tax-Free Money Market Fund, Inc. (comprising the Nuveen
Massachusetts and New York Tax-Free Money Market Funds).
The Funds are registered under the Investment Company Act of 1940 as open-end,
diversified management investment companies. Each Fund invests in tax-exempt
money market instruments. Shares of the state Funds are issued in three series:
(1) the "Service Plan" series intended for purchase by or through banks and
other organizations who have agreed to perform certain services for their
customers who are shareholders of this series of the Fund, (2) the "Distribution
Plan" series intended for purchase by or through securities dealers who have
agreed to perform distribution and administrative services for their customers
who are shareholders of this series of the Fund and (3) the "Institutional"
series intended for purchase by trustees, bank trust departments and investment
bankers or advisers.
Each Fund issues its own shares at net asset value, which the Fund will seek to
maintain at $1.00 per share, without a sales charge.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
Investments in each of the Funds consist of 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 traded and 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, 1997, the dollar-weighted
average life was 33 days for Reserves, 22 days for California Money Market, 48
days for Massachusetts Money Market and 47 days for New York Money Market).
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 be settled a month or more after the transaction date. The securities so
purchased are subject to market fluctuation during this period. The Funds have
instructed the custodian to segregate assets in a separate account with a
current value at least equal to the amount of their purchase commitments. At
February 28, 1997, there were no such purchase commitments in any of the Funds.
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts.
34
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
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.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes and intends to
comply with the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute to shareholders 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, each Fund intends to satisfy conditions which will enable interest
from municipal securities, which is exempt from regular federal and designated
state income taxes for the California, Massachusetts and New York Money Market
Funds, to retain such tax-exempt status when distributed to the shareholders of
the Funds. All income dividends paid during the fiscal year ended February 28,
1997, have been designated Exempt Interest Dividends.
Insurance Commitments
The Funds have obtained commitments (each a "Commitment") from Municipal Bond
Investors Assurance Corporation ("MBIA") with respect to certain designated
bonds held by the Funds 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 a 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 Funds' shares, the Funds believe that their ability to
obtain insurance for such bonds under such adverse circumstances will enable the
Funds to hold or dispose of such bonds at a price at or near their par value.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap, and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the fiscal year ended February 28, 1997.
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.
35
<PAGE>
Notes to Financial Statements -- continued
2. Securities Transactions
Purchases and sales (including maturities) of investment securities during the
fiscal year ended February 28, 1997, were as follows:
<TABLE>
<CAPTION>
Reserves CA MA NY
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases $871,686,296 $403,699,606 $148,958,093 $41,915,309
Sales and Maturities 904,765,000 395,942,000 179,764,679 47,958,387
- -----------------------------------------------------------------------------
</TABLE>
At February 28, 1997, the cost of investments owned for federal income tax
purposes was the same as the cost for financial reporting purposes for all
Funds.
3. Composition of Net Assets
At February 28, 1997, the Funds had common stock authorized at $.01 par value
per share. The composition of net assets as well as the number of authorized
shares were as follows:
<TABLE>
<CAPTION>
Reserves CA MA NY
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital paid in:
Service Plan series $ - $ 95,306,430 $ 9,964,264 $ 414,071
Distribution Plan series - 57,489,607 27,082,874 26,115,563
Institutional series - 842,567 3,977,340 16,667
- ----------------------------------------------------------------------------------------------------------
Net assets $ 304,087,480 $ 185,638,604 $ 41,024,478 $ 26,546,301
- ----------------------------------------------------------------------------------------------------------
Authorized shares 2,000,000,000 2,350,000,000 2,500,000,000 2,500,000,000
- ----------------------------------------------------------------------------------------------------------
</TABLE>
4. Management Fee and Other Transactions with Affiliates
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of the John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below
which are based upon the average daily net asset value of each Fund:
<TABLE>
<CAPTION>
Management fees
------------------------------------
Average daily net asset value Reserves CA, MA, NY
- -----------------------------------------------------------------------------------
<S> <C> <C>
For the first $500 million .500 of 1% .400 of 1%
For the next $500 million .475 of 1 .375 of 1
For net assets over $1 billion .450 of 1 .350 of 1
- -----------------------------------------------------------------------------------
</TABLE>
Also, pursuant to a distribution agreement with the Funds, John Nuveen & Co.
Incorporated (the "Distributor"), a wholly owned subsidiary of the John Nuveen
Company, pays sales and promotion expenses in connection with the offering of
Fund shares. The Funds have adopted a Distribution Plan pursuant to Rule 12b-1
of the Investment Company Act of 1940 and a Service Plan pursuant to which the
Distribution Plan series and the Service Plan series and the Distributor pay, in
equal amounts, fees to securities dealers and service organizations for services
rendered in the distribution of shares of the Funds or the servicing of
shareholder accounts. For Reserves, total service payments to such securities
dealers and organizations on an
36
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
annualized basis range from .1 of 1% to .2 of 1% of the average daily net asset
value of serviced accounts up to $10 million and .3 of 1% for such assets over
$10 million. For the California, Massachusetts and New York Money Market Funds,
total service payments to such securities dealers and organizations are .25 of
1% per year of the average daily net asset value of serviced accounts.
The management fee is reduced by, or the Adviser assumes certain expenses of
each Fund, in an amount necessary to prevent the total expenses of each Fund
(including the management fee and each Fund's share of service payments under
the Distribution and Service Plans, 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 .75 of 1% of the
average daily net asset value of Reserves, and .55 of 1% of the average daily
net asset value of the California, Massachusetts and New York Money Market
Funds.
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Funds pay no
compensation directly to their Directors who are affiliated with the Adviser or
to their officers, all of whom receive remuneration for their services to the
Funds from the Adviser.
5. Investment Composition
Each Fund invests in municipal securities which include general obligation and
revenue bonds. At February 28, 1997, the revenue sources by municipal purpose
for these investments, expressed as a percent of total investments, were as
follows:
<TABLE>
<CAPTION>
Reserves CA MA NY
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue Bonds:
Pollution Control Facilities 30% 4% 11% 33%
Health Care Facilities 25 24 19 16
Educational Facilities 4 - 23 7
Housing Facilities 5 21 7 7
Water/Sewer Facilities 2 18 5 -
Lease Rental Facilities - 10 - -
Electric Utilities 4 7 - -
Transportation 2 - 5 -
Other 12 1 - 10
General Obligation Bonds 13 15 30 27
Escrowed Bonds 3 - - -
- -------------------------------------------------------------------------------
100% 100% 100% 100%
- -------------------------------------------------------------------------------
</TABLE>
In addition, certain temporary investments in short-term municipal securities
have credit enhancements (letters of credit, guarantees or insurance) issued by
third-party domestic or foreign banks or other institutions (94% for Reserves,
97% for California Money Market, 80% for Massachusetts Money Market and 84% for
New York Money Market) (see note 1).
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
37
<PAGE>
Financial Highlights
39
<PAGE>
Financial Highlights
Selected data for a share outstanding throughout each period is as
follows.
<TABLE>
<CAPTION>
Income from
Investment Operations Less Distributions
------------------------- -------------------------
Net
Net realized and Dividends Net Total
asset unrealized from tax- asset return
value Net gain (loss) exempt net Distributions value on net
beginning investment from investment from capital end of asset
RESERVES of period income* investments income gains period value
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year ended,
2/28/97 $1.000 $.029 $ - $(.029) $ - $1.000 2.87%
2/29/96 1.000 .032 - (.032) - 1.000 3.23
2/28/95 1.000 .025 - (.025) - 1.000 2.46
2/28/94 1.000 .018 - (.018) - 1.000 1.84
2/28/93 1.000 .023 - (.023) - 1.000 2.34
5 months ended 2/29/92 1.000 .015 - (.015) - 1.000 1.45
Year ended,
9/30/91 1.000 .046 - (.046) - 1.000 4.57
9/30/90 1.000 .055 - (.055) - 1.000 5.45
9/30/89 1.000 .057 - (.057) - 1.000 5.70
9/30/88 1.000 .045 - (.045) - 1.000 4.52
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Reflects the waiver of certain management fees and reimbursement
of certain other expenses by the Adviser, if applicable (see note
4 of the Notes to Financial Statements).
** Effective for the fiscal year ended June 30, 1991, and
thereafter, the Fund has presented the per share data by series.
*** Effective for the fiscal year ended April 30, 1991, and
thereafter, the Fund has presented the per share data by series.
+ Annualized.
++ Represents combined per share data and ratios for the Service
Plan, Distribution Plan and Institutional series.
40
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
Ratios/Supplemental Data
- --------------------------------------------------------------------
Ratio Ratio
of net of net
Ratio of investment Ratio of investment
expenses income to expenses income to
to average average to average average
net assets net assets net assets net assets
Net assets before before after after
end of period reimburse- reimburse- reimburse- reimburse-
(in thousands) ment ment ment* ment*
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
$304,087 .80% 2.82% .75% 2.87%
339,662 .79 3.18 .75 3.22
351,606 .78 2.40 .75 2.43
404,201 .80 1.78 .75 1.83
450,746 .74 2.35 .74 2.35
477,127 .75+ 3.48+ .75+ 3.48+
451,808 .72 4.56 .72 4.56
430,206 .73 5.45 .73 5.45
390,258 .72 5.69 .72 5.69
409,653 .73 4.52 .73 4.52
- --------------------------------------------------------------------
</TABLE>
41
<PAGE>
Financial Highlights -- continued
<TABLE>
<CAPTION>
Income from
Investment Operations Less Distributions
------------------------- ---------------------------
Net
Net realized and Dividends Net Total
asset unrealized from asset return
value Net gain (loss) tax-exempt Distributions value on net
beginning investment from investment from capital end of asset
CALIFORNIA** of period income* investments income gains period value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year ended 2/28/97
Service Plan series $1.000 $.029 $ - $(.029) $ - $1.000 2.94%
Distribution Plan series 1.000 .029 - (.029) - 1.000 2.94
Institutional series 1.000 .030 - (.030) - 1.000 3.02
Year ended 2/29/96
Service Plan series 1.000 .033 - (.033) - 1.000 3.32
Distribution Plan series 1.000 .033 - (.033) - 1.000 3.31
Institutional series 1.000 .034 - (.034) - 1.000 3.40
Year ended 2/28/95
Service Plan series 1.000 .026 - (.026) - 1.000 2.59
Distribution Plan series 1.000 .026 - (.026) - 1.000 2.60
Institutional series 1.000 .027 - (.027) - 1.000 2.69
Year ended 2/28/94
Service Plan series 1.000 .019 - (.019) - 1.000 1.94
Distribution Plan series 1.000 .019 - (.019) - 1.000 1.92
Institutional series 1.000 .021 - (.021) - 1.000 2.07
Year ended 2/28/93
Service Plan series 1.000 .023 - (.023) - 1.000 2.28
Distribution Plan series 1.000 .023 - (.023) - 1.000 2.29
Institutional series 1.000 .024 - (.024) - 1.000 2.36
8 months ended 2/29/92
Service Plan series 1.000 .024 - (.024) - 1.000 2.39
Distribution Plan series 1.000 .024 - (.024) - 1.000 2.39
Institutional series 1.000 .025 - (.025) - 1.000 2.45
Year ended 6/30/91
Service Plan series 1.000 .047 - (.047) - 1.000 4.70
Distribution Plan series 1.000 .047 - (.047) - 1.000 4.70
Institutional series 1.000 .048 - (.048) - 1.000 4.80
Year ended,
6/30/90++ 1.000 .054 - (.054) - 1.000 5.37
6/30/89++ 1.000 .056 - (.056) - 1.000 5.62
6/30/88++ 1.000 .043 - (.043) - 1.000 4.28
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 40.
42
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
Ratios/Supplemental Data
- -------------------------------------------------------------------
Ratio Ratio
of net of net
Ratio of investment Ratio of investment
expenses income to expenses income to
to average average to average average
net assets net assets net assets net assets
Net assets before before after after
end of period reimburse- reimburse- reimburse- reimburse-
(in thousands) ment ment ment* ment*
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 95,306 .59% 2.89% .55% 2.93%
57,490 .61 2.87 .55 2.93
32,843 .46 3.01 .46 3.01
70,722 .56 3.28 .54 3.30
73,020 .62 3.23 .55 3.30
34,392 .46 3.39 .46 3.39
41,772 .59 2.15 .55 2.19
67,157 .64 2.47 .55 2.56
50,772 .47 2.74 .47 2.74
415,238 .53 1.94 .53 1.94
72,380 .73 1.74 .55 1.92
32,299 .41 2.06 .41 2.06
469,812 .57 2.24 .55 2.26
80,652 .62 2.19 .55 2.26
24,156 .47 2.33 .47 2.33
478,886 .56+ 3.53+ .55+ 3.54+
91,670 .61+ 3.48+ .55+ 3.54+
18,334 .45+ 3.64+ .45+ 3.64+
431,590 .57 4.65 .55 4.67
90,031 .61 4.61 .55 4.67
22,342 .45 4.77 .45 4.77
452,465 .59 5.34 .55 5.38
362,927 .57 5.68 .55 5.70
207,897 .59 4.27 .55 4.31
- -------------------------------------------------------------------
</TABLE>
43
<PAGE>
Financial Highlights -- continued
<TABLE>
<CAPTION>
Income from
Investment Operations Less Distributions
----------------------------- -----------------------------
Net
Net realized and Dividends Net
asset unrealized from asset
value Net gain (loss) tax-exempt Distributions value
beginning investment from investment from capital end of
of period income* investments income gains period
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Year ended 2/28/97
Service Plan series $1.000 $.028 $ - $(.028) $ - $1.000
Distribution Plan series 1.000 .028 - (.028) - 1.000
Institutional series 1.000 .028 - (.028) - 1.000
Year ended 2/29/96
Service Plan series 1.000 .032 - (.032) - 1.000
Distribution Plan series 1.000 .032 - (.032) - 1.000
Institutional series 1.000 .032 - (.032) - 1.000
Year ended 2/28/95
Service Plan series 1.000 .025 - (.025) - 1.000
Distribution Plan series 1.000 .025 - (.025) - 1.000
Institutional series 1.000 .026 - (.026) - 1.000
Year ended 2/28/94
Service Plan series 1.000 .018 - (.018) - 1.000
Distribution Plan series 1.000 .017 - (.017) - 1.000
Institutional series 1.000 .018 - (.018) - 1.000
Year ended 2/28/93
Service Plan series 1.000 .023 - (.023) - 1.000
Distribution Plan series 1.000 .023 - (.023) - 1.000
Institutional series 1.000 .023 - (.023) - 1.000
Year ended 2/29/92
Service Plan series 1.000 .032 - (.032) - 1.000
Distribution Plan series 1.000 .032 - (.032) - 1.000
Institutional series 1.000 .032 - (.032) - 1.000
Year ended 4/30/91
Service Plan series 1.000 .053 - (.053) - 1.000
Distribution Plan series 1.000 .053 - (.053) - 1.000
Institutional series 1.000 .053 - (.053) - 1.000
Year ended,
4/30/90++ 1.000 .057 - (.057) - 1.000
4/30/89++ 1.000 .050 - (.050) - 1.000
4/30/88++ 1.000 .043 - (.043) - 1.000
</TABLE>
<TABLE>
<CAPTION>
Total
return
on net
asset
MASSACHUSETTS**** value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Year ended 2/28/97
Service Plan series 2.84%
Distribution Plan series 2.84
Institutional series 2.84
Year ended 2/29/96
Service Plan series 3.17
Distribution Plan series 3.17
Institutional series 3.18
Year ended 2/28/95
Service Plan series 2.53
Distribution Plan series 2.53
Institutional series 2.61
Year ended 2/28/94
Service Plan series 1.77
Distribution Plan series 1.74
Institutional series 1.80
Year ended 2/28/93
Service Plan series 2.33
Distribution Plan series 2.33
Institutional series 2.34
Year ended 2/29/92
Service Plan series 3.22
Distribution Plan series 3.22
Institutional series 3.24
Year ended 4/30/91
Service Plan series 5.30
Distribution Plan series 5.30
Institutional series 5.30
Year ended,
4/30/90++ 5.70
4/30/89++ 5.00
4/30/88++ 4.29
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 40
44
<PAGE>
<TABLE>
<CAPTION>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------
Ratio Ratio
of net of net
Ratio of investment Ratio of investment
expenses income to expenses income to
to average average to average average
net assets net assets net assets net assets
Net assets before before before before
end of period reimburse- reimburse- reimburse- reimburse-
(in thousands) ment ment ment* ment*
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 9,964 .74% 2.64% .55% 2.83%
27,083 .90 2.49 .55 2.84
3,977 .61 2.78 .55 2.84
38,251 .63 3.06 .55 3.14
26,279 .84 2.87 .55 3.16
3,550 .57 3.12 .54 3.15
27,732 .61 2.49 .55 2.55
24,237 .82 2.28 .55 2.55
1,036 .47 2.63 .47 2.63
38,576 .55 1.88 .52 1.91
27,773 .76 1.67 .55 1.88
3,406 .49 1.93 .49 1.93
40,214 .73 2.16 .55 2.34
27,993 .82 2.07 .55 2.34
5,325 .58 2.31 .55 2.34
61,476 .62+ 3.73+ .55+ 3.80+
34,509 .72+ 3.63+ .55+ 3.80+
8,917 .53 3.82+ .53+ 3.82+
37,979 .68 5.12 .55 5.25
33,809 .76 5.04 .55 5.25
14,973 .54 5.26 .54 5.26
53,631 .74 5.48 .55 5.67
31,319 .76 4.97 .55 5.18
35,614 .75 4.03 .48 4.30
- ----------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
Financial Highlights -- continued
<TABLE>
<CAPTION>
Income from
Investment Operations Less Distributions
-------------------------- ---------------------------
Net
Net realized and Dividends Net Total
asset unrealized from asset return
value Net gain (loss) tax-exempt Distributions value on net
beginning investment from investment from capital end of asset
NEW YORK*** of period income* investments income gains period value
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year ended 2/28/97
Service Plan series $1.000 $.029 $ - $(.029) $ - $1.000 2.90%
Distribution Plan series 1.000 .029 - (.029) - 1.000 2.90
Institutional series 1.000 .029 - (.029) - 1.000 2.90
Year ended 2/29/96
Service Plan series 1.000 .032 - (.032) - 1.000 3.20
Distribution Plan series 1.000 .032 - (.032) - 1.000 3.20
Institutional series 1.000 .032 - (.032) - 1.000 3.20
Year ended 2/28/95
Service Plan series 1.000 .024 - (.024) - 1.000 2.36
Distribution Plan series 1.000 .024 - (.024) - 1.000 2.37
Institutional series 1.000 .023 - (.023) - 1.000 2.28
Year ended 2/28/94
Service Plan series 1.000 .015 - (.015) - 1.000 1.51
Distribution Plan series 1.000 .015 - (.015) - 1.000 1.51
Institutional series 1.000 .015 - (.015) - 1.000 1.51
Year ended 2/28/93
Service Plan series 1.000 .020 - (.020) - 1.000 2.02
Distribution Plan series 1.000 .020 - (.020) - 1.000 2.02
Institutional series 1.000 .020 - (.020) - 1.000 2.02
10 months ended 2/29/92
Service Plan series 1.000 .029 - (.029) - 1.000 2.94
Distribution Plan series 1.000 .029 - (.029) - 1.000 2.94
Institutional series 1.000 .030 - (.030) - 1.000 2.97
Year ended 4/30/91
Service Plan series 1.000 .047 - (.047) - 1.000 4.73
Distribution Plan series 1.000 .047 - (.047) - 1.000 4.73
Institutional series 1.000 .047 - (.047) - 1.000 4.73
Year ended,
4/30/90++ 1.000 .054 - (.054) - 1.000 5.36
4/30/89++ 1.000 .050 - (.050) - 1.000 4.95
4/30/88++ 1.000 .041 - (.041) - 1.000 4.10
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 40.
46
<PAGE>
Nuveen Municipal Money Market Funds
February 28, 1997 Annual Report
<TABLE>
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------------------------------
Ratio of net Ratio of net
Ratio of investment Ratio of investment
expenses to income to expenses to income to
Net assets average net average net average net average net
end of period assets before assets before assets after assets after
NEW YORK*** (in thousands) reimbursement reimbursement reimbursement* reimbursement*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended 2/28/97
Service Plan series $ 414 1.27% 2.17% .55% 2.89%
Distribution Plan series 26,116 .92 2.52 .55 2.89
Institutional series 17 1.12 2.33 .55 2.90
Year ended 2/29/96
Service Plan series 554 1.92 1.82 .55 3.19
Distribution Plan series 31,631 .94 2.80 .55 3.19
Institutional series 17 1.38 2.37 .55 3.20
Year ended 2/28/95
Service Plan series 640 .95 1.98 .55 2.38
Distribution Plan series 29,798 .79 2.14 .55 2.38
Institutional series 17 2.14 .79 .55 2.38
Year ended 2/28/94
Service Plan series 557 1.49 .69 .55 1.63
Distribution Plan series 27,886 .78 1.40 .55 1.63
Institutional series 17 4.60 (2.42) .55 1.63
Year ended 2/28/93
Service Plan series 529 1.17 1.42 .55 2.04
Distribution Plan series 34,827 .78 1.81 .55 2.04
Institutional series 17 19.33 (16.59) .55 2.19
10 months ended 2/29/92
Service Plan series 1,934 .87+ 3.19+ .55+ 3.51+
Distribution Plan series 45,259 .71+ 3.35+ .55+ 3.51+
Institutional series 17 11.89+ (7.83)+ .55+ 3.51+
Year ended 4/30/91
Service Plan series 1,653 .88 4.39 .55 4.72
Distribution Plan series 41,446 .69 4.58 .55 4.72
Institutional series 17 .62 4.65 .55 4.72
Year ended,
4/30/90++ 41,602 .71 5.18 .55 5.34
4/30/89++ 30,262 .86 4.74 .55 5.05
4/30/88++ 17,016 1.03 3.54 .50 4.07
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of
Nuveen Tax-Free Reserves, Inc.
Nuveen California Tax-Free Fund, Inc.
Nuveen Tax-Free Money Market Fund, Inc.:
We have audited the accompanying statements of net assets of Nuveen Tax-Free
Reserves, Inc. (a Maryland Corporation), Nuveen California Tax-Free Fund, Inc.
(comprising the Nuveen California Tax-Free Money Market Fund) (a Maryland
Corporation) and Nuveen Tax-Free Money Market Fund, Inc. (comprising the Nuveen
Massachusetts and New York Tax-Free Money Market Funds) (a Minnesota
Corporation), including the portfolios of investments, as of February 28, 1997,
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, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the net assets of each of the
respective funds constituting Nuveen Tax-Free Reserves, Inc., Nuveen California
Tax-Free Fund, Inc. and Nuveen Tax-Free Money Market Fund, Inc. as of February
28, 1997, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and the
financial highlights for the periods indicated thereon in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 11, 1997
48
<PAGE>
Nuveen California Tax-Free Money Market Fund
February 28, 1997 Annual Report
California
Shareholder Meeting Report
On February 28, 1997, the Nuveen California Tax-Free
Money Market Fund held a Special Meeting of
Shareholders. At that meeting, shareholders approved
the following matters:
<TABLE>
<CAPTION>
Service Distribution Institutional
Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------
Election of the Fund's
Board of Directors
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(A) Bremner For 61,177,310 19,108,011 45,291,091
Withhold 760 113,460 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(B) Brown For 61,177,310 19,108,440 45,291,091
Withhold 760 113,031 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(C) Dean For 61,177,310 19,108,440 45,291,091
Withhold 760 113,031 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(D) Impellizzeri For 61,177,310 19,076,491 45,291,091
Withhold 760 144,980 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(E) Rosenheim For 61,177,310 19,076,919 45,291,091
Withhold 760 144,552 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(F) Sawers For 61,177,310 19,108,440 45,291,091
Withhold 760 113,031 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(G) Schneider For 61,177,310 19,108,011 45,291,091
Withhold 760 113,460 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
(H) Schwertfeger For 61,177,310 19,108,440 45,291,091
Withhold 760 113,031 40,798
-------------------------------------------------------
Total 61,178,070 19,221,471 45,331,889
- --------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
Shareholder Information
Nuveen Family of Mutual Funds
Nuveen offers a variety of funds designed to help you reach your financial
goals. The funds below are grouped by investment objectives.
Growth and Income Funds
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
Municipal Bond Funds
National Funds/1/
State Funds
Alabama Michigan
Arizona Missouri
California/2/ New Jersey/3/
Colorado New Mexico
Connecticut New York/2/
Florida/3/ North Carolina
Georgia Ohio
Kansas Pennsylvania
Kentucky/4/ South Carolina
Louisiana Tennessee
Maryland Virginia
Massachusetts/2/ Wisconsin
1. Long-term, insured long-term, intermediate-term and limited-term portfolios.
2. Long-term and insured long-term portfolios.
3. Long-term and intermediate-term portfolios.
4. Long-term and limited-term portfolios.
To purchase additional shares of your Nuveen Money Market Fund, contact your
financial adviser. If you would like to add to your current investment on a
monthly or semi-annual basis, you can sign up for Nuveen's systematic investing
program, which allows you to invest a fixed dollar amount every month
automatically.
You can also invest automatically through dividend reinvestment. By reinvesting
your fund's dividends back into the fund, you give your investment the added
growth potential of long-term compounding.
For more information on the service options listed above, call your adviser, or
Nuveen at (800) 621-7227.
50
<PAGE>
Fund Information
Board of Directors
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Margaret K. Rosenheim
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Fund Manager
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
Custodian
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Transfer Agent, Shareholder Services and Dividend Disbursing Agent
Shareholder Services, Inc.
Nuveen Investor Services
P.O. Box 5330
Denver, CO 80217-5330
(800) 621-7227
Legal Counsel
Fried, Frank, Harris, Shriver
& Jacobsen
Washington, D.C.
Public Accountants
Arthur Andersen LLP
Chicago, Illinois
51
<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 mature investors whose portfolios are the principal
source of their ongoing financial security. More than 1.3 million investors have
entrusted Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach -- purchasing securities of strong companies and
communities that represent good long-term value -- is the cornerstone of
Nuveen's investment philosophy. It is a careful, long-term strategy that offers
the potential for attractive returns with moderated risk. Successful value
investing begins with in-depth research and a discerning eye for marketplace
opportunity. Nuveen's team of investment professionals is backed by the
discipline, resources and expertise of almost a century of investment
experience, including one of the most recognized research departments in the
industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of taxable and tax-free investment
products -- including equity and fixed-income mutual funds, unit trusts,
exchange-traded funds, individual managed account services, and cash management
products.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 621-7227 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 621-7227
MAN-1-4.97
<PAGE>
PART C--OTHER INFORMATION
NUVEEN TAX-FREE RESERVES, 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
Included in the Statement of Additional Information through incorporation
by reference to the Registrant's Annual Report:
Portfolio of Investments, February 28, 1997
Statement of Net Assets, February 28, 1997
Statement of Operations, Year Ended February 28, 1997
Statements of Changes in Net Assets, Years Ended February 28, 1997 and
February 29, 1996
Report of Independent Public Accountants, dated April 11, 1997
(b) Exhibits
<TABLE>
<C> <S>
1. Articles of Incorporation of Registrant, as amended and as
currently in effect. Filed as Exhibit 1 to Registrant's
Registration Statement on Form N-1A (File No. 2-78736) and
incorporated herein by reference thereto.
2. By-Laws of Registrant as currently in effect. Filed as Exhibit 2
to Registrant's Registration Statement on Form N-1A (File No. 2-
78736) and 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. 14 to the Registrant's Registration
Statement on Form N-1A (File No. 2-78736) and incorporated herein
by reference thereto.
5(b). Renewal, dated May 7, 1996, of Investment Management Agreement.
6(a). Distribution Agreement between Registrant and John Nuveen & Co.
Incorporated, dated August 2, 1982. Filed as Exhibit 6 to
Registrant's Registration Statement on Form N-1A (File No. 2-
78736) and incorporated herein by reference thereto.
6(b). Renewal, dated July 26, 1996, 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 to
Post-Effective Amendment No. 13 to Registrant's Registration
Statement on Form N-1A (File No. 2-78736) and incorporated herein
by reference thereto.
8(b). Letter evidencing assignment of U.S. Trust Company of New York's
rights and responsibilities under the Custody Agreement to The
Chase Manhattan Bank, and is incorporated herein by reference
thereto.
</TABLE>
C-1
<PAGE>
<TABLE>
<C> <S>
9. Transfer Agency Agreement between Registrant and Shareholder
Services, Inc. dated December 19, 1994. Filed as Exhibit 9 to Post-
Effective Amendment No. 14 to the Registrant's Registration
Statement on Form N-1A (File No. 2-78736) and incorporated herein
by reference thereto.
9(a). Amendment No. 1 to Transfer Agency Agreement dated July 1, 1996.
10. Opinion of Fried, Frank, Harris, Shriver & Jacobson.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Not applicable.
14. Not applicable.
15. Distribution and Service Plan and related form of Service Agreement
under the Registrant's 12b-1 Plan. Filed as Exhibit 15 to
Registrant's Registration Statement on Form N-1A (File No. 2-78736)
and incorporated herein by reference thereto.
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. 2-78736) and
incorporated herein by reference thereto.
99(b). Certified copy of resolution of Board of Directors authorizing the
signing of the names of officers and directors on the Registration
Statement pursuant to power of attorney.
99(c). Original Powers of Attorney for all Registrant's Directors
authorizing, among others, Gifford R. Zimmerman and Larry W. Martin
to execute the Registration Statement.
99(d). Code of Ethics and Reporting Requirements. Filed as Exhibit 99(d)
to Post-Effective Amendment No. 14 to the Registrant's Registration
Statement on Form N-1A (File No. 2-78736) and 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 April 7, 1997
<TABLE>
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
<S> <C>
Common Stock ($.01 par value).................... 30,998
</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
a 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 oth-
erwise, 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 ex-
pressed 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 control-
ling person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such officer, director or controlling persons in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling pre-
cedent, 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 in-
vestment companies for which Nuveen Advisory 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 liabil-
ity 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 Munici-
pal Fund, Inc., Nuveen Performance Plus Municipal Fund, Inc., Nuveen Califor-
nia 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 Qual-
ity 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 Op-
portunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund, Nuveen
Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income Mu-
nicipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen Cali-
fornia Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Mu-
nicipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier
Insured Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund 2,
Inc., Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen
Insured New York
C-4
<PAGE>
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 Munic-
ipal 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 Washing-
ton 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 In-
come Municipal Fund 2. Nuveen Advisory Corp. has no other clients or business
at the present time. The principal business address for all of these invest-
ment 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,
employee, partner or trustee, see the descriptions under "Management" in the
Statement of Additional Information.
Timothy R. Schwertfeger is Chairman and Director of Nuveen Advisory Corp., the
investment adviser. Mr. Schwertfeger has, during the last two years, been
Chairman and formerly Executive Vice President and Director of The John Nuveen
Company, John Nuveen & Co. Incorporated, and Nuveen Institutional Advisory
Corp. 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.
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 Mu-
nicipal 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., and Nuveen Investment Trust.
Nuveen also acts as depositor and principal underwriter of the Nuveen Tax-Ex-
empt Unit Trust and Nuveen Unit Trusts, registered unit investment trusts.
Nuveen has also served 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 Mu-
nicipal Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc.,
Nuveen New York Performance Plus Municipal Fund, Inc., Nuveen Municipal Advan-
tage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Cali-
fornia Municipal Market Opportunity Fund, Inc., Nuveen Investment Quality Mu-
nicipal Fund, Inc., Nuveen California Investment
C-5
<PAGE>
Quality Municipal Fund, Inc., Nuveen New York Investment Quality Municipal
Fund, Inc., Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida In-
vestment Quality Municipal Fund, Nuveen New Jersey Investment Quality Munici-
pal Fund, Inc., Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen
Select Quality Municipal Fund, Inc., Nuveen California Select Quality Munici-
pal 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 In-
come 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 Mu-
nicipal 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>
<S> <C> <C>
William Adams IV Vice President None
333 West Wacker Drive
Chicago, IL 60606
Richard P. Davis Vice President None
One South Main Street
Dayton, Ohio 45402
Clifton L. Fenton Vice President None
333 West Wacker Drive
Chicago, IL 60606
Kathleen M. Flanagan Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Stephen D. Foy Vice President None
333 West Wacker Drive
Chicago, IL 60606
Robert D. Freeland Vice President None
333 West Wacker Drive
Chicago, IL 60606
Michael G. Gaffney Vice President None
333 West Wacker Drive
Chicago, IL 60606
Anna R. Kucinskis Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
333 West Wacker Drive
Chicago, IL 60606
Larry W. Martin Vice President and Vice President and
333 West Wacker Drive Assistant Secretary Assistant Secretary
Chicago, IL 60606
Thomas C. Muntz Vice President None
333 West Wacker Drive
Chicago, IL 60606
O. Walter Renfftlen Vice President and Vice President and
333 West Wacker Drive Controller Controller
Chicago, IL 60606
</TABLE>
C-7
<PAGE>
<TABLE>
<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>
ITEM 30: LOCATION OF ACCOUNT AND RECORDS
Nuveen Advisory Corp., 333 West Wacker Drive, Chicago, Illinois 60606, main-
tains 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, New York 10004, main-
tains all general and subsidiary ledgers, journals, trial balances, records of
all portfolio purchases and sales, and all other required records not main-
tained by Nuveen Advisory Corp., or Shareholder Services, Inc.
Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado 80217-5330 main-
tains all the required records in its capacity as transfer, dividend paying,
and shareholder service agent for the Registrant.
ITEM 31: MANAGEMENT SERVICES
Not applicable.
ITEM 32: UNDERTAKINGS
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 THIS REGISTRATION STATEMENT
MEETS ALL THE REQUIREMENTS FOR EFFECTIVENESS UNDER PARAGRAPH (B) OF RULE 485
UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS REGISTRATION STATE-
MENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED,
IN THIS CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 30TH DAY OF MAY, 1997.
NUVEEN TAX-FREE RESERVES, 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 May 30, 1997
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 ) By /s/ Gifford R. Zimmerman
) --------------------------
Anne E. Impellizzeri Director ) Gifford R. Zimmerman
) Attorney-in-Fact
Margaret K. Rosenheim Director )
) May 30, 1997
Peter R. Sawers Director )
)
William J. Schneider Director )
</TABLE>
AN ORIGINAL POWER OF ATTORNEY AUTHORIZING, AMONG OTHERS, GIFFORD R. ZIMMERMAN
AND LARRY W. MARTIN TO EXECUTE THIS REGISTRATION STATEMENT, AND AMENDMENTS
THERETO, FOR EACH OF THE OFFICERS AND DIRECTORS OF REGISTRANT ON WHOSE BEHALF
THIS REGISTRATION STATEMENT IS FILED, HAS BEEN EXECUTED AND IS FILED AS AN EX-
HIBIT.
C-9
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
Specimen certificate of shares of Capital Stock of
4. Registrant.
Renewal, dated May 7, 1996, of Investment Management
5(b). Agreement.
Renewal, dated July 26, 1996, of Distribution
6(b). Agreement.
Amendment No. 1 to Transfer Agency Agreement dated
9(a). July 1, 1996.
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 Powers of Attorney authorizing, among
others, Gifford R. Zimmerman and Larry W. Martin to
execute the Registration Statement on behalf of all
of the Registrant's Directors.
</TABLE>
<PAGE>
Exhibit 4
- -------------- --------------
NUMBER SHARES
- -------------- --------------
NUVEEN TAX-FREE RESERVES, 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 670639 10 3
------------------
- ---------===============================================================--------
fully paid and non-assessable shares of the par value of one-cent ($.01) each of
the common stock of Nuveen Tax-Free Reserves, 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-Free Reserves, Inc.
[SEAL] NUVEEN TAX-FREE RESERVES, INC. SEAL 1982 MARYLAND
[THE FOLLOWING IS VOID]
Dated:
NUVEEN TAX-FREE RESERVES, INC.
/s/ Timothy R. Schwertfeger Authorized Signature
Chairman of the Board, Nuveen Tax-Free Reserves, 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-FREE RESERVES, INC.
RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT
------------------------------------------
This Agreement made this 7th day of May, 1996 by and between Nuveen Tax-Free
Reserves, 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, 1996 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, 1997 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, 1997 and ratify and confirm the Agreement in all respects.
NUVEEN TAX-FREE RESERVES, INC.
By: /s/ James J. Wesolowski
------------------------------
Vice President
ATTEST:
/s/ Karen L. Healy
- -----------------------------
Assistant Secretary
NUVEEN ADVISORY CORP.
By: /s/ Gifford R. Zimmerman
------------------------------
Vice President
ATTEST:
/s/ Larry Martin
- -----------------------------
Assistant Secretary
<PAGE>
EXHIBIT 6(b)
Renewal of Distribution Agreement
---------------------------------
This Agreement made this 26th day of July, 1996 by and between Nuveen Tax-Free
Reserves, 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, 1996 unless continued in the manner
required by the Investment Company Act of 1940; and
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, 1997 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, 1997 and ratify and confirm the Agreement in all respects.
NUVEEN TAX-FREE RESERVES, INC.
By: /s/ Gifford R. Zimmerman
------------------------------
Vice President
ATTEST:
/s/ Karen L. Healy
- -----------------------------
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By: /s/ Larry Martin
------------------------------
Vice President
ATTEST:
/s/ Morrison C. Warren
- -----------------------------
Assistant Secretary
<PAGE>
EXHIBIT 9(a)
NUVEEN TAX-FREE RESERVES, INC.
------------------------------
Amendment No. 1 to
Transfer Agency Agreement
-------------------------
This Amendment No. I to Transfer Agency Agreement is made and entered into
as of the 1st day of July, 1996 between Nuveen Tax-Free Reserves, Inc. (the
"Fund") and Shareholder Services, Inc. ("SSI").
WITNESSETH:
WHEREAS, the Fund and SSI have entered into a Transfer Agency Agreement
dated December 19, 1994 (the "Transfer Agency Agreement"); and
WHEREAS, SSI and the Fund desire to amend the Transfer Agency Agreement as
herein provided.
NOW THEREFORE, the parties hereto AGREE as follows:
1. The first sentence of Section 9.1 is hereby revised by deleting "June
30, 1996" and insert in its place "June 30, 1997".
2. Appendix B to the Transfer Agency Agreement is deleted in its entirety
and replaced with the Appendix B attached hereto.
3. Appendix C to the Transfer Agency Agreement is deleted in its
entirety and replaced with the Appendix C attached hereto.
4. As herein amended, the Transfer Agency Agreement is hereby ratified
and confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No 1 to
the Transfer Agency Agreement to be duly executed as of the day and year first
above written.
Attest: NUVEEN TAX-FREE RESERVES, INC.
/s/ Gifford R. Zimmerman /s/ Anna R. Kucinskis
- ------------------------------ ------------------------------
Name Title
Gifford R. Zimmerman, Vice President Name: Anna R. Kucinskis
Title: Vice President
SHAREHOLDER SERVICES, INC.
/s/ Kathryn L. Kluck, AVP /s/ Barbara Hennigar
- ------------------------------ ------------------------------
Name Title Barbara Hennigar
President
<PAGE>
NUVEEN TAX-FREE RESERVES, INC.
TRANSFER AGENCY AGREEMENT
Appendix B
Transfer Agent Services
Service: SSI Will:
- -------- ---------
New Account Set-Ups Process new sales applications.
Place telephone calls to account
representatives as needed to
clarify instructions for new
account set-ups.
Purchases - New and Subsequent Process mailed-in, lockbox, bank
wire, list billing, ACH, and
telephone payments as received.
Coordinate and balance UIT
reinvestment payments.
Transfers Negotiate and process all transfer
requests.
Exchanges - Mail and Telephone Negotiate and process exchange
requests. Record telephone exchange
requests.
Redemptions - Mail and Telephone Negotiate and process mailed in, ACH
and telephone redemption requests.
Record telephone redemption
requests.
Wire Order Purchases and Redemptions Process wire order purchases and
redemptions for designated
settlement period accepted on
recorded telephone lines and via
NSCC FUND/SERV. Process purchases
and redemptions for same day wire
settlement.
Account Maintenance Process all written and telephone
(Address Changes, Dividend Option maintenance. For address changes,
Changes, Name Changes, Broker or prepare and mail a notice of the
Dealer Changes, etc.) address change to the former
address.
Certificate Issuances Issue certificates as requested by
shareholders.
Telephone Services Provide efficient handling of all
incoming shareholder and
broker/dealer telephone calls. Make
outgoing clarification
calls/coordination with Chase on
UIT/ETF consolidations. Provide
timely problem resolution for all
servicing calls. Provide automated
trend reporting.
1
<PAGE>
Service: SSI Will:
- -------- ---------
Correspondence with Shareholders Respond to all shareholder and
and Broker/Dealers broker/dealer written inquiries.
Document all correspondence
affecting shareholder accounts on
the Shareholder Accounting System.
Shareholder Confirms Prepare and mail confirmations of
(Daily/Monthly/Quarterly/Annual) daily account activity. Prepare and
mail monthly, quarterly, and annual
confirmations as directed by the
fund.
Dealer Confirms Prepare and mail weekly dealer
confirmations listing activity on
client accounts as directed by the
Fund.
Distribution Disbursements Prepare and mail cash distribution
checks. Process reinvested
distributions.
Commission Statements Provide bimonthly commission
statements listing each purchase and
the portion of the sales charge paid
to the broker/dealer.
Commission Checks Provide bimonthly commission checks
to broker/dealers.
Daily Transmission of Reports Transmit daily transaction activity
reports, balancing reports, and
sales information via telephone
lines to a printer at Nuveen.
Fund Summary Sheets Prepare daily reports that summarize
by type of transaction all capital
stock activity for each fund.
Transmit/download wire/capital stock
activity information to Chase.
Sales Reporting Provide daily, weekly, monthly,
quarterly, and annual reports of
sales information.
12b-1 Reporting Complete 12b-1 processing including
calculating the 12b-1 payment
amounts and sending checks to the
broker/dealer home offices. Provide
a listing broken down by sales
representative within each branch.
Invalid Taxpayer Identification Mail Forms W-9 as required to
Number Solicitation and validate taxpayer identification
Backup Withholding numbers; institute backup
withholding as required by IRS
regulations, and timely send all
notices.
Regulatory Reporting Compute, prepare, and mail all
necessary reports to shareholders,
federal, and/or state authorities
(Forms 1099-DIV, 1099-B, and 1042S).
2
<PAGE>
Service: SSI Will:
- -------- ---------
Front-End Imaging of Documents Front-end Image all incoming
documents.
Cost Basis Reporting Provide cost basis information as
available to shareholders annually
for use in determining capital gains
and losses.
Blue Sky Reporting Provide monthly report of purchases
and redemptions by state.
Financial Reporting Mailings Provide mail handling for 2
financial reports per fund per year
to Nuveen shareholders.
Prospectus Mailings Provide mail handling for 1
prospectus per fund per year to
Nuveen shareholders.
Proxy Solicitation and Tabulation Perform 1 proxy solicitation and
tabulation per fund per year.
Networking Accounts Provide transmission and appropriate
services for each network level.
Cash Availability Transmit mutual fund activity to
designated entity on a daily basis
for cash availability purposes.
Commission/12b-1 Balancing Provide balancing reports for
commission and 12b-1 payments.
3
<PAGE>
NUVEEN TAX-FREE RESERVES, INC.
TRANSFER AGENCY AGREEMENT
Appendix C
Fee Schedule
The Transfer Agent will provide the transfer agent services listed on
Appendix B for the Fund at the rates set forth below:
Annual Transfer Agent Fees:
- --------------------------
Annual-Per-Account Fees*
-----------------------
First 20,000 Accounts** $22.00 per account
Next 30,000 Accounts** $20.00 per account
Over 50,000 Accounts** $19.00 per account
Out-Of-Pocket Expenses:
- ----------------------
Out-of-pocket expenses may be incurred by either the Fund or the Transfer
Agent and are not included in the annual Transfer Agent Fees. Those out-of-
pocket expenses directly incurred by the Transfer Agent will be billed to the
Fund on a monthly basis. These out-of-pocket expenses include, but are not
limited to, the printing of forms, envelopes, postage and proxy solicitation
fees for the shareholder mailings, costs of abandoned property reports or
searches for missing or inactive shareholders, equipment and system access
costs, microfilm, telephone line and usage charges, overnight express mail
charges, check signature plates and stamps, and programmer/analyst and testing
technician time beyond that agreed to in writing. Bank charges and earnings
credit will be billed directly to the Fund by United Missouri Bank (or other
banks). The Transfer Agent may require the prior payment of anticipated out-of-
pocket expenses from time to time.
- --------------
* Payable on a monthly basis for each non-retirement plan account in existence
at the end of the month. Retirement Plan accounts may be subject to a separate
fee schedule to be negotiated.
** The determination of the number of accounts for purposes of determining the
per account fee shall be based on all Nuveen Funds using the same fee schedule
and shall be allocated on a Fund by Fund basis in a manner determined by the
Transfer Agent based on the number of accounts in each fund.
These fees are valid for twelve months after which they are subject to change,
from time to time.
The Transfer Agent shall, from time to time, but no more frequently than
monthly, send an invoice to the Fund itemizing the compensation and expense
reimbursement. The Fund shall pay such invoice (except to the extent that the
amount thereof is in dispute) by wire not later than 30 days after receipt of
the invoice.
<PAGE>
Exhibit 10
May 29, 1997
(202) 639-7065
Nuveen Tax-Free Reserves, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
RE: Registration Statement on Form N-1A
Under the Securities Act of 1933
(File No. 2-78736)
-----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Nuveen Tax-Free Reserves, 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. 16 to the Registration Statement (the
"Amendment") with the Securities and Exchange Commission pursuant to Rule 485(b)
of the Securities Act of 1933 (the "1933 Act"). With your permission, all
assumptions and statements of reliance herein have been made without any
independent investigation or verification on our part except to the extent
otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things,
executed copies of the following documents:
(a) a certificate of the 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 May 28, 1997, of the Amendment.
<PAGE>
Nuveen Tax-Free Reserves, Inc.
May 29, 1997
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 11, 1997, and to all references to our Firm included in or made a
part of this registration statement of Nuveen Tax-Free Reserves, Inc.
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 23, 1997
<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 period
ii. Base Period Return X 365/7 = Current Yield
b. Calculation of Current Yield for seven-day period
ended February 28, 1997:
( .0005353 ) 365
( -------- ) X --- = 2.79%
( 1.00 ) 7 =====
II. EFFECTIVE a. Effective Yield is calculated as follows:
YIELD
(Base Period Return + 1) 365/7 - 1 = Effective Yield
b. Calculation of Effective Yield for seven-day period
ended February 28, 1997:
[ ( .0005353 ) ] 365/7
[ ( -------- ) + 1 ] - 1 = 2.83%
[ ( 1.00 ) ] =====
III. TAXABLE
EQUIVALENT a. The Taxable Equivalent Yield formula is as follows:
YIELD
Tax Exempt Yield
-----------------------
(1 - federal income
tax rate)
b. Based on a maximum Federal income tax rate of 39.6%,
the Taxable Equivalent Yield for the seven-day period
ended February 28, 1997 is as follows:
2.79%
-------- = 4.62%
1 - .396 =====
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains Summary Financial Information extracted from the Form
N-SAR and the financial statements and is qualified in its entirety by
references to such documents.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 302245
<INVESTMENTS-AT-VALUE> 302245
<RECEIVABLES> 1796
<ASSETS-OTHER> 981
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 305022
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 935
<TOTAL-LIABILITIES> 935
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 304087
<SHARES-COMMON-STOCK> 304087
<SHARES-COMMON-PRIOR> 339662
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 304087
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11181
<OTHER-INCOME> 0
<EXPENSES-NET> 2316
<NET-INVESTMENT-INCOME> 8865
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8865
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 423698
<NUMBER-OF-SHARES-REDEEMED> 467713
<SHARES-REINVESTED> 8439
<NET-CHANGE-IN-ASSETS> (35575)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1544
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2482
<AVERAGE-NET-ASSETS> 308769
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .029
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .029
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .75
<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-Free Reserves, 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 30, 1997, and (3) that
said resolution has not been amended or rescinded and remains in full force and
effect.
April 11, 1997
/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-FREE RESERVES, 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, relating to the reorganization, 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 30th day of January, 1997.
/s/ Timothy R. Schwertfeger
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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, relating to the reorganization, 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 30th day of January, 1997.
/s/ Anthony T. Dean
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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, relating to the reorganization, 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 30th day of January, 1997.
/s/ Lawrence H. Brown
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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) her true and lawful attorney-in-fact and agent, for her on her behalf
and in her name, place and stead, in any and all capacities, to sign, execute
and affix her seal thereto and file one or more Registration Statements on Form
N-1A, under the Securities Act of 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, relating to the reorganization, 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 she 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 her hand this 30th day of January, 1997.
/s/ Anne E. Impellizzeri
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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) her true and lawful attorney-in-fact and agent, for her on her behalf
and in her name, place and stead, in any and all capacities, to sign, execute
and affix her seal thereto and file one or more Registration Statements on Form
N-1A, under the Securities Act of 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, relating to the reorganization, 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 she 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 her hand this 30th day of January, 1997.
/s/ Margaret K. Rosenheim
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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, relating to the reorganization, 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 30th day of January, 1997.
/s/ Peter R. Sawers
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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, relating to the reorganization, 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 30th day of January, 1997.
/s/ Robert P. Bremner
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
<PAGE>
NUVEEN TAX-FREE RESERVES, 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, relating to the reorganization, 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 30th day of January, 1997.
/s/ William J. Schneider
-----------------------------------
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 30th day of January, 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
