SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FLAGSHIP TAX EXEMPT FUNDS TRUST
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules
14a-(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid::
N/A
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|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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[Flagship Letterhead]
November 6, 1996
Dear Flagship Tax Exempt Funds Trust Shareholder:
As recently announced, Flagship Resources Inc. plans to merge with The John
Nuveen Company. The merger with Nuveen will help Flagship serve a broader
set of investors' needs, providing a range of investment products and
services for conservative investors and the financial advisers who serve
them.
A special meeting of shareholders will be held Thursday, December 12, 1996,
at 10:00 a.m., Central Time, in the 31st floor conference room of John
Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois. At this
meeting, you will be asked to vote on proposals to make certain changes to
how your fund is organized and managed, facilitating the integration of the
Flagship and Nuveen mutual fund families.
THE BOARD OF TRUSTEES OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE
PROPOSALS YOU WILL VOTE ON ARE IN THE BEST INTERESTS OF ALL SHAREHOLDERS
AND URGES YOU TO VOTE IN FAVOR OF THE PROPOSALS. THE INTEGRATION OF
FLAGSHIP AND NUVEEN SHOULD LEAD TO THE FOLLOWING BENEFITS:
|_| Lower operating costs from expanded distribution
|_| Access to a wider range of investment products
|_| Greater choices in the method for purchasing shares
The enclosed proxy statement describes the proposals relating to your fund
in greater detail.
WHETHER OR NOT YOU PLAN TO JOIN US AT THE MEETING, PLEASE COMPLETE, DATE
AND SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT
YOUR VOTE WILL BE COUNTED.
We appreciate your continued support and confidence.
Very truly yours,
/s/ Bruce Paul Bedford
Bruce P. Bedford
Chairman of the Board
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP ALABAMA DOUBLE TAX EXEMPT FUND
FLAGSHIP COLORADO DOUBLE TAX EXEMPT FUND
FLAGSHIP CONNECTICUT DOUBLE TAX EXEMPT FUND
FLAGSHIP FLORIDA INTERMEDIATE TAX EXEMPT FUND
FLAGSHIP GEORGIA DOUBLE TAX EXEMPT FUND
FLAGSHIP KANSAS TRIPLE TAX EXEMPT FUND
FLAGSHIP KENTUCKY LIMITED TERM MUNICIPAL BOND FUND
FLAGSHIP KENTUCKY TRIPLE TAX EXEMPT FUND
FLAGSHIP LOUISIANA DOUBLE TAX EXEMPT FUND
FLAGSHIP MISSOURI DOUBLE TAX EXEMPT FUND
FLAGSHIP NEW JERSEY INTERMEDIATE TAX EXEMPT FUND
FLAGSHIP NEW MEXICO DOUBLE TAX EXEMPT FUND
FLAGSHIP NORTH CAROLINA DOUBLE TAX EXEMPT FUND
FLAGSHIP SOUTH CAROLINA DOUBLE TAX EXEMPT FUND
FLAGSHIP TENNESSEE DOUBLE TAX EXEMPT FUND
FLAGSHIP WISCONSIN DOUBLE TAX EXEMPT FUND
FLAGSHIP ALL-AMERICAN TAX EXEMPT FUND
FLAGSHIP INTERMEDIATE TAX EXEMPT FUND
FLAGSHIP LIMITED TERM TAX EXEMPT FUND
One Dayton Centre
One South Main Street
Dayton, Ohio 45402
Notice of Special Meeting of Shareholders
December 12, 1996
A Special Meeting of Shareholders of each of the above referenced
Funds (each a "Fund"), each of which is a series of the Flagship Tax Exempt
Funds Trust (the "Flagship Trust"), a Massachusetts business trust, will be
held in the 31st floor conference room of John Nuveen & Co. Incorporated,
333 West Wacker Drive, Chicago, Illinois on Thursday, December 12, 1996 at
10:00 a.m., (Central Time) for the following purposes:
1. To approve new investment advisory agreements with
Nuveen Advisory Corp. to take effect upon the acquisition
of Flagship Financial Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the
transactions contemplated thereby, the net effect of which
would be to reorganize each of the Funds as a new series
("New Fund") of a newly created investment company.
3. To approve certain changes to the Trust's investment
objective and fundamental policies and investment
restrictions, each of which will be voted on separately.
4. To approve a change in the Fund's classification from
"diversified" to "non-diversified". Voted on only by the
Colorado, Connecticut, Georgia, Louisiana, Missouri
and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen &
Co. Incorporated.
6. To approve an amendment to the Declaration of Trust to
permit the election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees.
8. To transact such other business as may properly come
before the Meeting.
Shareholders of record at the close of business on October
18, 1996 are entitled to notice of and to vote at the Meeting.
Michael D. Kalbfleisch
Secretary
November 6, 1996
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 12, 1996
INTRODUCTION
This proxy statement is solicited by the Board of Trustees (the
"Board") of the Flagship Trust for voting at the special meeting of
shareholders of each Fund named below to be held at 10:00 a.m. (Cental
Time) on Thursday, December 12, 1996, in the 31st floor conference room of
John Nuveen & Co. Incorporated ("Nuveen"), 333 West Wacker Drive, Chicago,
Illinois and at any and all adjournments thereof (the "Meeting"), for the
purposes set forth in the accompanying Notice of Special Meeting of
Shareholders. This proxy statement was first mailed to shareholders on or
about November 6, 1996.
Each share of the Flagship Trust is entitled to one vote on each
matter submitted to a vote of the shareholders at the Meeting; no shares
have cumulative voting rights.
Each valid proxy will be voted in accordance with your
instructions and as the persons named in the proxy determine on such other
business as may come before the Meeting. If no instructions are given, the
proxy will be voted FOR the election of the persons who have been nominated
as trustees for the Fund and FOR Proposals 1, 2, 3(A) - 3(P), 4, 5 and 6.
Shareholders who execute proxies may revoke them at any time before they
are voted, either by writing to the Fund or in person at the time of the
Meeting. Proxies given by telephone or electronically transmitted
instruments may be counted if obtained pursuant to procedures designed to
verify that such instructions have been authorized.
Proposal 7 (election of trustees) requires a plurality vote of the
shares of the Flagship Trust. This means that the eight nominees receiving
the largest number of votes will be elected. Proposals 1, 3(A) - 3(P), 4
and 5 require the affirmative vote of a "majority of the outstanding voting
securities" of each Fund. The term "majority of the outstanding voting
securities" as defined in the 1940 Act means: the affirmative vote of the
lesser of (1) 67% of the voting securities of the Fund present at the
meeting if more than 50% of the outstanding shares of the Fund are present
in person or by proxy or (2) more than 50% of the outstanding shares of the
Fund. Proposals 2 and 6 require a majority vote of the shares outstanding
of each Fund.
On Proposal 7, the shareholders of the Funds will vote in the
aggregate and not by Fund. On Proposals 1, 2, 3(A) - 3(P), 4 and 6 each
Fund will vote separately, as applicable. On Proposal 5, the Class A and
Class C shares of each Fund will vote separately as a class.
The Declaration of Trust of the Flagship Trust provides that the
presence at a shareholder meeting in person or by proxy of at least a
majority of the shares of the Flagship Trust constitutes a quorum. Thus,
the meeting for the Flagship Trust could not take place on its scheduled
date if less than a majority of the shares of the Flagship Trust were
represented. If, by the time scheduled for the meeting, a quorum of
shareholders of the Flagship Trust is not present or if a quorum is present
but sufficient votes in favor of any of the Proposals are not received, the
persons named as proxies may propose one or more adjournments of the
Meeting for the Flagship Trust to permit further soliciting of proxies from
shareholders of the Flagship Trust. Any such adjournment will require the
affirmative vote of a majority of the shares of the Flagship Trust (or
series) present (in person or by proxy) at the session of the meeting to be
adjourned. The persons named as proxies will vote in favor of any such
adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interest of the Flagship Trust's
shareholders.
The Meeting is scheduled as a joint meeting of the respective
shareholders of the Funds because the shareholders of all the Funds will
consider and vote on essentially the same matters. The Board has determined
that the use of a joint proxy statement for the Meeting is in the best
interest of each of the Funds shareholders. In the event that any
shareholder present at the Meeting objects to the holding of a joint
Meeting and moves for an adjournment of such Fund's Meeting to a time
immediately after the Meeting so that such Fund's Meeting may be held
separately, the persons named as proxies will vote in favor of such
adjournment.
In tallying shareholder votes, abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which (i) instructions have
not been received from the beneficial owners or persons entitled to vote
and (ii) the broker or nominee does not have discretionary voting power on
a particular matter) will be counted for purposes of determining whether a
quorum is present for purposes of convening the Meeting. On Proposal 7,
abstentions and broker non-votes will have no effect; the eight nominees
receiving the largest number of votes will be elected. On Proposals 1, 2,
3(A) - 3(P), 4, 5 and 6 abstentions and broker non-votes will be considered
to be both present at the Meeting and issued and outstanding and, as a
result, will have the effect of being counted as voted against the
Proposal. Proxies solicited and signed in accordance with voting
instructions given by telephone or electronically transmitted instruments
may be counted if obtained pursuant to procedures designed to verify that
such instructions have been authorized.
THE BOARD OF TRUSTEES OF THE FLAGSHIP TRUST RECOMMENDS THAT YOU
VOTE FOR ON ALL PROPOSALS.
The shareholders of each Fund are being asked to vote upon
twenty-two Proposals. FOR EACH FUND, APPROVAL OF EACH OF PROPOSALS 2, 3(A)
- - 3(P), 4, 5, 6 AND 7 IS CONDITIONAL UPON THE APPROVAL OF PROPOSAL 1.
The Board of the Flagship Trust has fixed the close of business on
October 18, 1996 as the record date (the "Record Date") for determining
holders of the Fund's shares entitled to notice of and to vote at the
Meeting. Each shareholder will be entitled to one vote for each share held.
At the close of business on the Record Date, the following shares were
outstanding:
<TABLE>
CLASS A CLASS C TOTAL FUND
FUND SHARES SHARES SHARES
- ---- ------- ------- ---------
<S> <C> <C> <C>
Flagship Alabama Double Tax Exempt Fund 361,587.013 N/A 361,587.013
Flagship Colorado Double Tax Exempt Fund 3,155,585.826 N/A 3,155,585.826
Flagship Connecticut Double Tax Exempt Fund 19,902,915.619 676,832.131 20,579,747.750
Flagship Florida Intermediate Tax Exempt Fund 523,971.782 296,102.363 820,074.145
Flagship Georgia Double Tax Exempt Fund 10,502,027.377 951,616.654 11,453,644.031
Flagship Kansas Triple Tax Exempt Fund 9,678,662.942 N/A 9,678,662.942
Flagship Kentucky Limited Term Municipal Bond Fund 695,669.989 158,859.438 854,529.427
Flagship Kentucky Triple Tax Exempt Fund 38,437,778.185 2,109,098.374 40,546,876.559
Flagship Louisiana Double Tax Exempt Fund 6,816,029.107 525,595.577 7,341,624.684
Flagship Missouri Double Tax Exempt Fund 19,925,692.517 621,896.954 20,547,589.471
Flagship New Jersey Intermediate Tax Exempt Fund 734,184.920 N/A 734,184.920
Flagship New Mexico Double Tax Exempt Fund 5,130,586.573 N/A 5,130,586.573
Flagship North Carolina Double Tax Exempt Fund 18,263,945.042 652,029.027 18,915,974.069
Flagship South Carolina Double Tax Exempt Fund 1,190,626.032 N/A 1,190,626.032
Flagship Tennessee Double Tax Exempt Fund 23,228,274.303 1,452,099.963 24,680,374.266
Flagship Wisconsin Double Tax Exempt Fund 1,353,604.204 N/A 1,353,604.204
Flagship All-American Tax Exempt Fund 19,884,188.208 4,682,778.296 24,566,966.504
Flagship Intermediate Tax Exempt Fund 4,459,740.471 175,592.660 4,635,333.131
Flagship Limited Term Tax Exempt Fund 43,695,705.732 1,816,518.701 45,512,224.433
</TABLE>
DESCRIPTION OF THE TRANSACTIONS
The Meeting is being called to consider approval of new advisory
agreements and a proposed restructuring of the Funds in connection with the
sale of Flagship Resources Inc. ("Flagship") to The John Nuveen Company,
the parent company of Nuveen and Nuveen Advisory Corp. ("Nuveen Advisory").
An Agreement and Plan of Merger dated as of July 16, 1996, pursuant to
which Flagship and its subsidiaries, Flagship Financial Inc. (the
"Adviser") and Flagship Funds Inc. (the "Distributor") will be acquired by
The John Nuveen Company (the "Acquisition") has been executed by the
parties thereto. In consideration for the Acquisition, shareholders of
Flagship will receive, in the aggregate, $18 million in cash plus shares of
The John Nuveen Company valued at $45 million (plus or minus certain
adjustments based on the total assets under management as of the closing
date), plus up to $20 million of additional contingent merger consideration
based on the cumulative performance of the combined municipal bond mutual
fund business, commencing January 1, 1997 and concluding December 31, 2000
(the "Contingent Payment Period"). Specifically, the additional contingent
consideration will be paid (i) if the municipal bond mutual fund business
and managed account business achieves 15% annual growth in assets under
management over the Contingent Payment Period, (ii) if operating margins
and pricing for such business over such period remains at least as
favorable to Flagship and The John Nuveen Company as current operating
margins and pricing, and (iii) if certain aggregate cost savings are
achieved in such business over such period. Subsequent to the Acquisition,
The John Nuveen Company will consider reorganizations or consolidations of
the businesses and operations of Flagship.
The Acquisition transaction is expected to close on or prior to
December 31, 1996 and is subject to various conditions, including the
receipt of shareholder approval by funds for which the Adviser provides
investment advisory services that represent at least 92.5% of the assets of
all such funds of new investment advisory agreements with Nuveen Advisory
and the receipt of the approval of the boards of such funds of distribution
agreements with Nuveen. In addition, the Acquisition is conditioned upon
investment advisory clients (other than the funds), which represent at
least 92.5% of the assets for which any Flagship company provides
investment advisory services, consenting to the assignment of their
contracts. Bruce P. Bedford and Richard P. Davis have agreed to sign
long-term employment contracts with Nuveen that provide that upon
consummation of the Acquisition, Mr. Bedford shall serve as Executive Vice
President and Director of Product Management of Nuveen and that Mr. Davis
shall serve as a Vice President of Nuveen, Director of the Broker Dealer
Group of Nuveen and General Manager of Nuveen's Dayton operations. In
addition both Mr. Bedford and Mr. Davis will serve on Nuveen's management
committee. In the view of the Board and the Adviser, there should be no
material changes in the portfolio management and investment operations of
the Funds after the transaction, although investment operations will be
consolidated with those of Nuveen. Other than as described herein, the
investment objectives and fundamental policies of the Funds are not
expected to change.
Consummation of the Acquisition would constitute an "assignment,"
as that term is defined in the Investment Company Act of 1940 (the "1940
Act"), of each Fund's current investment advisory agreement with the
Adviser. As required by the 1940 Act, each current investment advisory
agreement provides for its automatic termination in the event of its
assignment. In anticipation of the Acquisition, a new investment advisory
agreement between each Fund and Nuveen Advisory is being proposed for
approval by shareholders of each Fund. In addition, a number of other
proposals are being submitted to shareholders, the net effect of which is
to assimilate the Funds into the Nuveen family of mutual funds ("Fund
Restructuring"). In order to effect the Fund Restructuring, the Board is
seeking shareholder approval of the Proposals set forth in the accompanying
Notice of Special Meeting of Shareholders.
The transactions contemplated by the Acquisition were presented to
the Board of Trustees of the Flagship Trust for consideration at a number
of Board meetings. The Board, including a majority of the Trustees who are
not interested persons voted to approve the transactions contemplated by
the Acquisition. The independent trustees retained their own counsel to
assist them in evaluating the transaction and the various proposals. The
Board of Trustees concluded unanimously that each of the Proposals set
forth in this proxy statement is in the best interests of the Flagship
Trust and each Fund.
During its review and deliberations, the Board of Trustees
evaluated the potential benefits, detriments and costs to each Fund and its
shareholders of the proposed Acquisition. The Board received information
regarding the new advisory agreement and 12b-1 plan that would be entered
into by each Fund, including a comparison of the proposed fee structure and
expense ratios with the existing structure and ratios. The Board received
information from Nuveen Advisory and Nuveen regarding their management,
history, qualifications and other relevant information, including portfolio
transaction practices. Representatives of Nuveen made presentations and
were available for questions at the meetings. The Board conducted
additional due diligence meetings with Nuveen personnel at their offices.
The Board considered the qualifications and capabilities of Nuveen
Advisory to serve as investment adviser for the Funds. In this regard, the
Board noted the fact that Nuveen Advisory has been in operation since 1976
and has extensive experience managing municipal bond investment companies,
with approximately $32 billion in assets under management. In addition,
Nuveen Advisory is a part of a larger organization that provides investment
advice to or credit surveillance for a larger number of registered
investment companies, including open-end funds, exchange-traded funds, and
unit investment trusts. Total assets under management or credit
surveillance by Nuveen and its affiliates is in excess of $45 billion.
In evaluating the Acquisition, including the new advisory
agreement with Nuveen Advisory, the Board determined that Fund shareholders
would likely benefit from affiliation with the Nuveen organization for
several reasons, including the greater financial strength of the sponsoring
entity, access to enhanced credit research from a research department that
is the largest in the investment banking industry devoted exclusively to
tax-exempt securities, and Nuveen's larger technological infrastructure. In
addition, the Board considered that Bruce P. Bedford and Richard P. Davis
have agreed to sign long-term employment contracts with Nuveen that provide
that Mr. Bedford shall serve as an Executive Vice President and Director of
Product Management of Nuveen and that Mr. Davis shall serve as Vice
President of Nuveen, Director of Broker-Dealer Group of Nuveen and General
Manager of Nuveen's Dayton operations. In addition, both Mr. Bedford and
Mr. Davis will serve on Nuveen's Management Committee. The Board also
considered the fact that potential benefits from the larger Nuveen
organization were being obtained, with the expected retention of the
current portfolio managers for the Funds as members of the Nuveen
organization. The Board considered the similarities and differences between
the current investment objectives and policies of the Funds and the
proposed investment objectives and policies as described in Proposals 3(A)
- - 3(P) and 4. Similarly, the benefits will be obtained with no significant
changes in the portfolio management and operations of the Funds. Moreover,
Fund shareholders would gain access to a broader array of investments
products through the Fund's exchange privilege. In addition, the Board had
extensive discussions with representatives of Nuveen regarding continuity
of management functions and the level and quality of services affecting the
Funds and considered the representation by Nuveen of its intention to
maintain the continuity of management functions and the current level and
quality of services obtained by the Funds after the Acquisition.
In evaluating the transactions contemplated by the Acquisition,
the Board also considered the qualifications and capabilities of Nuveen to
serve as principal underwriter for the Funds and, with respect to certain
classes of Fund shares, to receive Rule 12b-1 payments. In this regard, the
Board noted the fact that Nuveen has been in operation since 1898 and
serves as the principal underwriter for open-end funds with assets in
excess of $6 billion and has served as co-managing underwriter for
approximately $25 billion of exchange-traded funds. The Board determined
that Fund shareholders would likely benefit from the proposed change in
distribution in that Nuveen brings a national sales organization and
multi-channel distribution system to the Funds, which should result in
greater distribution, with resulting administrative and operating
efficiencies to the Funds from asset growth. The independent Trustees also
considered the proposed continuing role of senior Flagship personnel in
distribution of the Fund. In addition, following the Acquisition the Funds
would offer additional classes of shares, which would provide existing and
future shareholders the benefit of greater choices in the method for
purchasing shares and should enhance the distribution capabilities of the
Funds with the attendant potential for growth and administrative and
operating efficiencies. The Board noted the costs associated with
sponsoring classes of shares that require the financing of distribution
expenses, which costs would be effectively borne by Nuveen.
Specifically with regard to fees and expenses, the Board
considered the current fee and expense structure, historical expense
ratios, expense limitations and voluntary reimbursements as compared to the
fee and expense structure proposed. The Board also reviewed the proposed
fees as compared to those of comparable funds. The Board determined that
the proposed agreements were beneficial and in the best interests of the
Funds in that the contractual rates for investment advisory fees, Rule
12b-1 service and Rule 12b-1 distribution fees were within the range of
rates for comparable funds and in addition, the aggregate would be lower
than the current fee structure for each current class of each Fund's
shares, except the Limited Term Tax Exempt Fund Class C shares which would
have the same aggregate fee structure. Furthermore, the Board specifically
considered the proposed increase in the investment advisory fee for the
state funds (other than the Kentucky Limited Term Fund) from an annual rate
of .50% of average daily net assets to a graduated rate that starts at .55%
of average daily net assets and is reduced for higher asset levels as
described below and the proposed increase in the investment advisory fee
for the Kentucky Limited Term Fund from an annual rate of .30% of average
daily net assets for assets up to $500 million and .25% of average daily
net assets in excess of $500 million to a graduated fee rate that starts at
.45% of average daily net assets and is reduced for higher asset levels as
described below. In addition, the Board specifically considered the
proposed increase in the investment advisory fee for the Limited Term Tax
Exempt Fund from an annual rate of .30% of average daily net assets for
assets up to $500 million and .25% of average daily net assets in excess of
$500 million to a graduated fee rate that starts at .45% of average daily
net assets and is reduced for higher asset levels as described below. In
evaluating the new advisory agreement for each Fund, the Board considered
the nature and quality of services to be provided; the performance of funds
managed by Nuveen Advisory with other comparable funds; the proposed
investment advisory fee and expense ratios for the Fund and for comparable
investment companies, including those currently advised by Nuveen Advisory
and the anticipated profitability to Nuveen Advisory from managing the
Fund. The Board also considered the written undertaking by Nuveen Advisory
that there are no projected decreases in dividends to shareholders or
aggregate increases in net expense ratios for each of the Funds for the
period beginning on the consummation of the Acquisition through each of the
Fund's current fiscal year end and the further representation by Nuveen
Advisory of their intention to continue the policy followed by the Adviser
with regard to the Funds to waive fees or reimburse expenses to the extent
necessary to maintain a competitive distribution rate.
The Board considered the agreement between Flagship and The John
Nuveen Company pursuant to which The John Nuveen Company and Flagship would
share equally all the costs and expenses of preparing printing and mailing
the proxy statements and other solicitation materials related to the
required approvals by the shareholders.
The Adviser and Nuveen Advisory have assured the Board that they
intend to comply with Section 15(f) of the 1940 Act. Section 15(f) provides
a non-exclusive safe harbor for an investment adviser to an investment
company or any of its affiliated persons to receive any amount or benefit
in connection with a change in control of the investment adviser so long as
two conditions are met. First, for a period of three years after the
transaction, at least 75% of the board members of the investment company
must not be interested persons of the Adviser or Nuveen Advisory. Second,
an "unfair burden" must not be imposed upon the investment company as a
result of such transaction or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden" is defined in
Section 15(f) to include any arrangement during the two-year period after
the Acquisition whereby the investment adviser, or any interested person of
any such adviser, receives or is entitled to receive any compensation, directly
or indirectly, from the investment company or its shareholders (other than
fees for bona fide investment advisory or other services) or from any
person in connection with the purchase or sale of securities or other
property to, from or on behalf of the investment company (other than bona
fide ordinary compensation as principal underwriter for such investment
company). The Adviser and Nuveen Advisory are not aware of any express or
implied term, condition, arrangement or understanding that would impose an
"unfair burden" on the Funds as a result of the Acquisition. Nuveen has
agreed that it and its affiliates will take no action that would have the
effect of imposing an "unfair burden" on the Funds as a result of the
Acquisition, and will indemnify the shareholders and the independent
Trustees of the Flagship Trust for any losses from imposition of an unfair
burden.
Based upon its evaluation of the relevant information presented to
them, and in light of their fiduciary duties under federal and state law,
the Board, including all its disinterested trustees of the Flagship Trust,
unanimously determined that the transactions contemplated by the
Acquisition, including the new advisory agreement and the new 12b-1 Plan
and related agreements for the Funds, are advisable and in the best
interests of each Fund and their shareholders, and recommended the approval
of each of the following Proposals by the shareholders at the Meeting.
PROPOSAL 1
APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
INTRODUCTION
New Advisory Agreement. Upon the Acquisition of Flagship, as
described above, the investment advisory agreement for each of the Funds
will immediately terminate by operation of law. In order for the Funds to
receive advisory services from Nuveen Advisory, shareholders must approve a
new investment advisory agreement (the "New Advisory Agreement"). The
Board, including the independent Trustees, unanimously approved the New
Advisory Agreement between the Flagship Trust and Nuveen Advisory on behalf
of each Fund, subject to approval by the shareholders of each Fund and the
consummation of the Acquisition. The following discussion is qualified in
its entirety by reference to the forms of the New Advisory Agreement
attached hereto as Exhibit A-1 or A-2, respectively.
Existing Advisory Agreement. Flagship Financial Inc. acts as
investment adviser to the Flagship Trust and each Fund pursuant to a
separate Investment Advisory Agreement with each Fund. The Adviser's
administrative obligations include: (i) assisting in supervising all
aspects of the Flagship Trust's operations; (ii) providing the Flagship
Trust, at the Adviser's expense, with the services of persons competent to
perform such administrative and clerical functions as are necessary in
order to provide effective corporate administration; and (iii) providing
the Flagship Trust, at the Adviser's expense, with adequate office space
and related services.
As compensation for the services rendered by the Adviser under the
Advisory Agreements dated March 8, 1985, with respect to the All-American
series; November 21, 1985, with respect to the Georgia and North Carolina
series; February 2, 1987, with respect to the Colorado, Connecticut,
Kentucky and Missouri series; July 20, 1987 with respect to the Louisiana
and Tennessee series; June 15, 1990, with respect to the Kansas series; May
15, 1992, with respect to the Intermediate, New Jersey Intermediate and New
Mexico series; June 15, 1992, with respect to the Alabama, Florida
Intermediate and South Carolina series; and February 4, 1994 with respect
to the Wisconsin series; the Adviser is paid a fee, computed daily and
payable monthly with respect to each series on a separate basis, at an
annual rate of .50% of the average daily net assets of such series. As
compensation for the services rendered by the Adviser under the Advisory
Agreement dated July 20, 1987, with respect to the Limited Term series, and
April 21, 1995, with respect to the Kentucky Limited Term Municipal Bond
Fund, the Adviser is paid a fee, computed daily and payable monthly at an
annual rate of .30% of the average daily net assets up to $500 million plus
.25% of the average daily net assets in excess of $500 million.
The Advisory Agreements were last submitted for approval by
shareholders on November 3, 1989, with respect to the All-American series;
November 11, 1988, with respect to the Limited Term, Tennessee and Missouri
series; October 13, 1987, with respect to the Colorado, Connecticut and
Kentucky series; January 30, 1987 with respect to the Georgia and North
Carolina series; October 26, 1990 with respect to the Louisiana series, May
15, 1992, with respect to the Alabama, Florida Intermediate, New Jersey
Intermediate, New Mexico, South Carolina and the Intermediate series by
Flagship as sole shareholder; September 3, 1992 with respect to the Kansas
series; February 4, 1994 with respect to the Wisconsin series by Flagship
as sole shareholder; and April 21, 1995 with respect to the Kentucky
Limited series by Flagship as sole shareholder. The Advisory Agreements for
all series were last approved by the Board of Trustees on August 23, 1996.
Each Advisory Agreement will terminate automatically upon its
assignment and its continuance must be approved annually by the Board or a
majority of the particular Fund's outstanding voting shares and in either
case, by a majority of the Board's disinterested trustees. Each Advisory
Agreement is terminable at any time without penalty by the trustees or by
a vote of a majority of the particular Fund's outstanding voting shares on
60 days' written notice to the Adviser, or by the Adviser on 60 days'
written notice to the Flagship Trust.
The Adviser has advanced all organization expenses of the Flagship
Trust and each Fund, which include printing of documents, fees and
disbursements of the Flagship Trust's counsel and accountants, registration
fees under the Securities Act of 1933, the 1940 Act, and state securities
laws, as well as the initial fees of the Flagship Trust's custodian and
transfer agent. For Funds which are still reimbursing the Adviser for
advancement of fees, such fees aggregated approximately $83,600 for the
Colorado series, $69,000 for the Limited Term series, $83,600 for the
Missouri series, $72,000 for the Louisiana series, $42,800 for the Kansas
series, $32,200 for the New Jersey Intermediate series, $51,700 for the New
Mexico series, $35,700 for the Intermediate series, $35,400 for the South
Carolina series, $27,400 for the Florida Intermediate series, $60,800 for
the Alabama series, $98,000 for the Wisconsin series and $29,400 for the
Kentucky Limited Term series.
The expenses are being reimbursed to the Adviser by uniform pro
rata deductions from the net asset value of each Fund accrued daily and
paid monthly over the five-year period which commenced June 1, 1991, with
respect to the Louisiana and Missouri series and June 1, 1993, with respect
to the Colorado, Kansas and New Mexico series. For the Alabama, Florida,
Intermediate, Kentucky Limited Term, New Jersey Intermediate, South
Carolina and Wisconsin Series, reimbursement commenced on June 1, 1996, and
will be paid pro rata over a three-year period.
The Adviser has agreed that in the event the operating expenses of
the series (including fees paid to the Adviser and payments to Flagship
Funds Inc. but excluding taxes, interest, brokerage and extraordinary
expenses) for any fiscal year ending on a date on which the related
Advisory Agreement is in effect exceed the expense limitations imposed by
applicable state securities laws or any regulations thereunder, it will, up
to the amount of its fee, reduce its fee or reimburse the Fund in the
amount of such excess.
COMPARISON OF THE NEW ADVISORY AGREEMENT AND THE EXISTING ADVISORY AGREEMENTS
Advisory Services. The Existing Advisory Agreements are discussed
above. The New Advisory Agreement provides that Nuveen Advisory will
provide the same types of services and will act as investment advisor for
and manage the investment and reinvestment of the assets of each of the
Funds. Nuveen Advisory also will administer the Funds' business affairs,
and provide office facilities and equipment and certain clerical,
bookkeeping and administrative services. For the services and facilities
furnished by Nuveen Advisory, each state specific Fund (except the Kentucky
Limited Term Municipal Bond Fund) would pay an annual management fee as
follows:
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
For the first $125 million .5500 of 1%
For the next $125 million .5375 of 1%
For the next $250 million .5250 of 1%
For the next $500 million .5125 of 1%
For the next $1 billion .5000 of 1%
For assets over $2 billion .4750 of 1%
For the services and facilities furnished by Nuveen Advisory, each
national Fund (except the Limited Term Tax Exempt Fund) would pay an annual
management fee as follows:
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
For the first $125 million .5000 of 1%
For the next $125 million .4875 of 1%
For the next $250 million .4750 of 1%
For the next $500 million .4625 of 1%
For the next $1 billion .4500 of 1%
For assets over $2 billion .4250 of 1%
For the services and facilities furnished by Nuveen Advisory, the
Kentucky Limited Term Municipal Bond and Limited Term Tax Exempt Funds
would pay annual fees as follows:
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
For the first $125 million .4500 of 1%
For the next $125 million .4375 of 1%
For the next $250 million .4250 of 1%
For the next $500 million .4125 of 1%
For the next $1 billion .4000 of 1%
For assets over $2 billion .3750 of 1%
The new investment advisory agreement will be dated as of the date
of the consummation of the Flagship Acquisition. The Flagship Acquisition
is currently expected to close on or about December 31, 1996 (although it
may occur earlier). The new investment advisory agreement will be in effect
for an initial term of up to two years, and may continue thereafter from
year to year if it is continued at least annually by a vote of "a majority
of the outstanding voting securities" of such Fund, as defined in the 1940
Act, or by the Board and, in either event, the vote of a majority of the
trustees who are not parties to the agreement or interested persons of any
such party, cast in person at a meeting called for such purpose. The
management fee structure under the new investment advisory agreements being
considered for approval in this proxy statement and described above will
not be implemented for administrative reasons until February 1, 1997 and
provided further that implementation of the new management fee structure is
contingent upon the implementation of the decrease in the Rule 12b-1 fees
as described in Proposal 5. Therefore, until the date of the implementation
of the new management fee structure as described above, the Funds will
continue to pay management fees at the rates provided for in the existing
advisory agreements. If the transactions contemplated by the Acquisition
are approved, the New Funds into which the Funds will be reorganized will
have the same form of advisory agreement as is being approved in this proxy
statement.
As noted below under Proposal 5, it is also proposed that each
Fund's Rule 12b-1 Plan be amended to authorize the compensation of John
Nuveen & Co. Incorporated, as distributor of the Class A, Class B and Class
C shares of the Fund pursuant to a Distribution Agreement dated as of the
consummation of the Acquisition. Such compensation will be in the form of
service and distribution fees on the three classes of shares of the Fund.
The distribution fee primarily reimburses John Nuveen & Co. Incorporated
for providing compensation to authorized dealers, including John Nuveen &
Co. Incorporated, either at the time of sale or on an ongoing basis. The
service fee payable to John Nuveen & Co. Incorporated is used to compensate
authorized dealers, including John Nuveen & Co. Incorporated, in connection
with the provision of ongoing account services to shareholders. See
Proposal 5. The current distribution plan only authorizes the Fund to
reimburse any underwriter, distributor or selling agent for out-of-pocket
costs and expenditures actually incurred for financing or assisting in the
financing of any activity which is primarily intended to result in the sale
of the shares of the Fund.
The table below shows the current fee arrangements applicable to
and expense ratio of each Fund and illustrates the pro forma effect that
the New Advisory Agreement and the new 12b-1 fees would have had on fees
payable by, and expense ratio of, each Fund had such Agreement and 12b-1
Plans been in effect during the Fund's last fiscal year. Although, there is
no assurance that the Funds actual expenses after the Acquisition will be
equal to or less than those shown or the current actual expenses of the
Funds, Nuveen Advisory has represented in writing that there are no
projected aggregate increases in net expense ratios for the Funds and it is
expected that such ratios will be the same or lower than such Fund's
aggregate current net expense ratios for the period beginning on the
Acquisition through the end of each Fund's current fiscal year end; actual
expenses of the Funds after the Acquisition will be a function of the
extent to which fee waivers and reimbursements are necessary to maintain a
competitive dividend rate consistent with the past practice of the Adviser.
<TABLE>
<CAPTION>
FEE TABLE
FISCAL YEAR FISCAL YEAR FISCAL YEAR
AVERAGE NET AVEAGE NET AVERAGE NET
ASSETS AS OF ASSETS AS OF ASSETS AS OF
5/31/96 5/31/96 5/31/96 CURRENT CURRENT PRO FORMA PRO FORMA
FUND CLASS A CLASS C FUND MGMT FEE $ MGMT FEE % MGMT FEE % MGMT FEE $ *
<S> <C> <C> <C> <C> <C> <C> <C>
Alabama 2,527,123 N/A 2,527,123 12,670 0.50 0.55 13,937
Colorado 34,526,436 N/A 34,526,436 173,105 0.50 0.55 190,416
Connecticut 204,529,169 6,544,082 211,073,251 1,058,258 0.50 0.54 1,153,295
Florida Inter. 5,112,000 2,475,430 7,587,430 38,041 0.50 0.55 41,845
Georgia 112,113,238 7,909,014 120,022,252 601,755 0.50 0.55 661,931
Kansas 93,353,342 N/A 93,353,342 468,046 0.50 0.55 514,850
Kentucky Ltd. 4,925,874 945,826 5,871,700 12,596 0.30 0.45 18,946
Kentucky 405,406,787 19,153,441 424,560,228 2,128,617 0.50 0.54 2,282,051
Louisiana 69,335,565 4,541,907 73,877,472 370,400 0.50 0.55 407,439
Missouri 212,894,161 5,091,750 217,985,911 1,092,915 0.50 0.54 1,190,552
New Jersey 9,114,870 N/A 9,114,870 45,699 0.50 0.55 50,269
Inter.
New Mexico 51,624,198 N/A 51,624,198 258,828 0.50 0.55 284,711
North 191,287,459 6,782,695 198,070,154 993,064 0.50 0.55 1,083,212
Carolina
South Carolina 9,331,513 N/A 9,331,513 46,785 0.50 0.55 51,464
Tennessee 247,231,610 14,162,138 261,393,748 1,310,550 0.50 0.54 1,423,080
Wisconsin 11,054,010 N/A 11,054,010 55,421 0.50 0.55 60,964
All-American 200,015,471 45,949,750 245,965,221 1,233,195 0.50 0.49 1,218,033
Intermediate 45,245,324 733,356 45,978,680 228,684 0.50 0.50 **228,684
Limited Term 526,979,911 8,235,178 535,215,089 1,592,389 0.30 0.43 2,323,486
</TABLE>
* Pro forma management fees calculated using the average net assets
times new breakpoints.
** Assumes the pro forma rate is the same as the existing rate,
therefore dollar amount did not change
<TABLE>
<CAPTION>
FISCAL YEAR
AVERAGE NET ASSETS
AS OF 5/31/96 CURRENT A CURRENT A PRO FORMA A PRO FORMA A
FUNDS CLASS A 12B-1 FEE $ 12B-1 FEE % 12B-1 FEE $* 12B-1 FEE % *
<S> <C> <C> <C> <C> <C>
Alabama 2,527,123 10,085 0.40 5,054 0.20
Colorado 34,526,436 138,113 0.40 69,053 0.20
Connecticut 204,529,169 818,000 0.40 409,058 0.20
Florida Inter. 5,112,000 20,419 0.40 10,224 0.20
Georgia 112,113,238 448,491 0.40 224,226 0.20
Kansas 93,353,342 373,114 0.40 186,707 0.20
Kentucky Ltd. 4,925,874 14,089 0.40 7,045 0.20
Kentucky 405,406,787 1,621,314 0.40 810,814 0.20
Louisiana 69,335,565 277,262 0.40 138,671 0.20
Missouri 212,894,161 851,451 0.40 425,788 0.20
New Jersey Inter. 9,114,870 36,470 0.40 18,230 0.20
New Mexico 51,624,198 206,501 0.40 103,248 0.20
North Carolina 191,287,459 765,262 0.40 382,575 0.20
South Carolina 9,331,513 37,304 0.40 18,663 0.20
Tennessee 247,231,610 988,749 0.40 494,463 0.20
Wisconsin 11,054,010 44,164 0.40 22,108 0.20
All-American 200,015,471 800,411 0.40 400,031 0.20
Intermediate 45,245,324 180,903 0.40 90,491 0.20
Limited Term 526,979,911 2,109,177 0.40 1,053,960 0.20
</TABLE>
* Pro forma 12b-1 calculated using the average net assets times new rate.
<TABLE>
<CAPTION>
FISCAL YEAR
AVERAGE NET
ASSETS AS OF 5/31/96 CURRENT C CURRENT C PRO FORMA C PRO FORMA C
FUND CLASS C 12B-1 FEE $ 12B-1 FEE % 12B-1 FEE $ * 12B-1 FEE % *
<S> <C> <C> <C> <C> <C>
Alabama N/A N/A N/A N/A N/A
Colorado N/A N/A N/A N/A N/A
Connecticut 6,544,082 62,142 0.95 49,081 0.75
Florida Inter. 2,475,430 23,475 0.95 18,566 0.75
Georgia 7,909,014 75,046 0.95 59,318 0.75
Kansas N/A N/A N/A N/A N/A
Kentucky Ltd. 945,826 4,734 0.70 3,710 0.55
Kentucky 19,153,441 181,774 0.95 143,651 0.75
Louisiana 4,541,907 43,079 0.95 34,064 0.75
Missouri 5,091,750 48,302 0.95 38,188 0.75
New Jersey Inter. N/A N/A N/A N/A N/A
New Mexico N/A N/A N/A N/A N/A
North Carolina 6,782,695 64,653 0.95 50,870 0.75
South Carolina N/A N/A N/A N/A N/A
Tennessee 14,162,138 134,450 0.95 106,216 0.75
Wisconsin N/A N/A N/A N/A N/A
All-American 45,949,750 436,430 0.95 344,623 0.75
Intermediate 733,356 3,450 0.94 2,758 0.75
Limited Term 8,235,178 28,351 0.70 22,647 0.55
</TABLE>
* Pro forma 12b-1 calculated using the average net assets times new rate.
<TABLE>
<CAPTION>
TOTAL TOTAL TOTAL TOTAL TOTAL PRO TOTAL PRO TOTAL TOTAL DIFFERENCE
CURRENT CURRENT CURRENT CURRENT FORMA FORMA PRO FORMA PRO FORMA CURRENT VS.
EXPENSE $ EXPENSE % EXPENSE $ EXPENSE % EXPENSE $ EXPENSE % EXPENSE $ EXPENSE % PROFORMA %
------------------
FUND CLASS A CLASS A CLASS C CLASS C CLASS A CLASS A CLASS C CLASS C CLASS A CLASS C
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alabama 82,465 3.26 N/A N/A 78,702 3.11 N/A N/A 0.15 N/A
Colorado 445,563 1.29 N/A N/A 393,814 1.14 N/A N/A 0.15 N/A
Connecticut 2,127,954 1.04 104,055 1.59 1,811,103 0.88 93,940 1.43 0.16 0.16
Florida Inter. 90,398 1.77 57,361 2.32 82,766 1.62 53,693 2.17 0.15 0.15
Georgia 1,229,737 1.10 130,159 1.65 1,061,683 0.95 118,396 1.50 0.15 0.15
Kansas 1,036,822 1.11 N/A N/A 897,219 0.96 N/A N/A 0.15 N/A
Kentucky LTD. 61,009 1.74 13,743 2.04 59,272 1.69 13,742 2.04 0.05 0.00
Kentucky 4,170,712 1.03 302,220 1.58 3,506,724 0.86 271,019 1.41 0.17 0.16
Louisiana 760,682 1.10 74,746 1.65 656,853 0.95 68,008 1.50 0.15 0.15
Missouri 2,273,513 1.07 82,313 1.62 1,943,207 0.91 74,480 1.46 0.16 0.16
New Jersey Inter. 156,327 1.72 N/A N/A 142,657 1.56 N/A N/A 0.15 N/A
New Mexico 578,452 1.12 N/A N/A 501,082 0.97 N/A N/A 0.15 N/A
North Carolina 2,017,542 1.05 109,057 1.61 1,721,916 0.90 98,361 1.45 0.16 0.16
South Carolina 153,018 1.64 N/A N/A 139,056 1.49 N/A N/A 0.15 N/A
Tennessee 2,555,770 1.03 224,214 1.58 2,167,918 0.88 202,076 1.43 0.16 0.16
Wisconsin 173,178 1.57 N/A N/A 156,665 1.42 N/A N/A 0.15 N/A
All American 2,118,974 1.06 739,345 1.61 1,706,265 0.85 644,706 1.40 0.21 0.21
Intermediate 551,146 1.21 6,428 1.75 460,734 1.01 5,728 1.56 0.20 0.19
Limited Term 4,469,275 0.84 46,649 1.14 4,139,530 0.78 46,569 1.13 0.06 0.01
</TABLE>
[FN]
* Total columns represent the sum of management fees, 12b-1 fees and other
expenses prior to any waivers or reimbursements of any fees or expenses.
* This table assumes that current "other expenses" will be the same as pro
forma "other expenses."
INFORMATION CONCERNING FLAGSHIP, THE ADVISER, THE FLAGSHIP TRUST, AND
NUVEEN ADVISORY
FLAGSHIP AND THE ADVISER
The Adviser is 100% owned by Flagship which in turn is owned by
the families of Bruce P. Bedford and Richard P. Davis and various trusts
organized for their benefit. Flagship is owned 50% by the Richard P. Davis
Trust, 25% by Susan Logan Bedford and 25% by Julie Ann Bedford. The address
of Flagship, the Richard P. Davis Trust, Susan Logan Bedford and Julie Ann
Bedford is One Dayton Centre, One South Main Street, Dayton, OH 45402.
The names, addresses and principal occupations of the principal
executive officers and the directors of the Adviser are as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
<S> <C>
Bruce P. Bedford.............................................. Chairman and Chief Executive Officer of Flag-
Chairman, Chief Executive Officer and Director ship, the Adviser and the Distributor.
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
Richard P. Davis.............................................. President and Chief Operating Officer of Flagship,
the Adviser and the Distributor.
President, Chief Operating Officer and Director
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
Michael D. Kalbfleisch........................................ Vice President, Chief Financial Officer and Trea-
Vice President, Chief Financial Officer and surer of Flagship, the Adviser, and the
Treasurer Distributor.
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
James P. Dunmyer.............................................. Controller of Flagship, the Adviser and
Controller the Distributor.
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
</TABLE>
In addition, Mr. Bedford is a Trustee and Chairman of the Board of
the Flagship Trust, Mr. Davis is a Trustee and President of the Flagship
Trust and Mr. Kalbfleisch is Treasurer and Secretary of the Flagship Trust.
THE FLAGSHIP TRUST
The current executive officers of the Flagship Trust are listed
below. Each of them hold the same position with each series of the Flagship
Trust and has held the office shown or other offices in the same company
for the last five years. In addition, Mr. Bedford and Mr. Davis are
currently Trustees of the Flagship Trust.
NAME AND ADDRESS PRINCIPAL OCCUPATION
Bruce P. Bedford.................... Chairman and Chief Executive
Chairman of the Board Officer of Flagship, the Adviser
One Dayton Centre and the Distributor
One South Main Street
Dayton, Ohio 45402-2030
Richard P. Davis.................... President and Chief Operating
President Officer of Flagship, the Adviser
One Dayton Centre and the Distributor
One South Main Street
Dayton, Ohio 45402-2030
M. Patricia Madden.................. Vice President, Operations of the
Vice President Distributor
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
Michael D. Kalbfleisch.............. Vice President, Chief Financial
Treasurer and Secretary Officer and Treasurer of Flag-
One Dayton Centre ship, the Adviser and the Dis-
One South Main Street tributor
Dayton, Ohio 45402-2030
LeeAnne G. Sparling................. Director of Portfolio Operations
Controller Adviser
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
NUVEEN ADVISORY
Nuveen Advisory is a wholly-owned subsidiary of John Nuveen & Co.
Incorporated, located at 333 West Wacker Drive, Chicago, Illinois 60606,
the oldest and largest investment banking firm specializing in the
underwriting and distribution of tax-exempt securities. Nuveen, which
maintains the largest research department of all investment banking firms
devoted exclusively to municipal securities, has issued over $30 billion of
tax-exempt unit trusts since 1961 and currently sponsors 81 management
investment company portfolios with approximately $32 billion in tax-exempt
securities under management. Over 1,000,000 individuals have invested to
date in Nuveen's tax-exempt funds and trusts. Founded in 1898, Nuveen is a
majority-owned subsidiary of The John Nuveen Company, which, in turn, is
approximately 78% owned by The St. Paul Companies, Inc., 385 Washington
Street, St. Paul, Minnesota 55102, a management company of St. Paul,
Minnesota, principally engaged in providing property-liability insurance
through subsidiaries.
The names, addresses and principal occupations of the principal
executive officers and directors of Nuveen Advisory are as follows:
NAME AND ADDRESS PRINCIPAL OCCUPATION
Timothy R. Schwertfeger................ Chairman of the Board and Director,
Chairman of the Board and Director John Nuveen & Co. Incorporated
(Principal Executive Officer)
333 West Wacker Drive
Chicago, Illinois 60606
Anthony T. Dean........................ President and Director, John Nuveen &
President and Director Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
John P. Amboian........................ Executive Vice President, John Nuveen
Executive Vice President & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
BOARD RECOMMENDATION THAT SHAREHOLDERS APPROVE THE NEW ADVISORY AGREEMENTS
The Board of Trustees of the Flagship Trust has determined that
the new advisory agreements are advisable and in the best interests of each
Fund's shareholders.
THE BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS VOTE "FOR"
THE NEW ADVISORY AGREEMENTS.
In making this recommendation, the Boards considered the following
factors, among others:
o Portfolio Management -- The Boards evaluated the qualifications
and capabilities of Nuveen Advisory to serve as investment
adviser, noting that Nuveen Advisory has extensive experience
managing municipal bond investment companies with approximately
$32 billion under management. In addition, Nuveen Advisory is a
part of an organization that provides investment advice to or
credit surveillance for a large number of open-end and
exchange-traded funds. Total assets under management or credit
surveillance by Nuveen and affiliates is in excess of $45 billion.
o Fees and Dividends-- That the proposed contractual rates for
investment advisory fees, Rule 12b-1 service and Rule 12b-1
distribution fees were within the range of rates for comparable
funds and in addition, the aggregate, would be lower than the
current fee structure for each current class of each Fund's
shares, except the Limited Term Fund Class C shares which would
have the same aggregate fee structure. In addition, the Board
considered the written undertaking by Nuveen Advisory that there
are no projected decreases in dividends to shareholders or
aggregate increases in net expense ratios for each of the Funds
for the period beginning on the consummation of the Acquisition
through each of the Fund's current fiscal year end and the further
representation by Nuveen Advisory of their intention to continue
the policy followed by the Adviser with regard to the Funds to
waive fees or reimburse expenses to the extent necessary to
maintain a competitive distribution rate.
o Investment Objectives and Policies -- The current investment
objectives and policies of each corresponding Fund are similar to
the proposed investment objectives and policies as described in
Proposals 3(A) - 3(P) and 4, each having a value-investing
orientation, commitment to research, and a focus on capital
preservation. Thus, the Funds following the Reorganization are
expected to be managed prospectively in substantially the same
manner as will be managed if Proposals 3(A) - 3(P) and 4 are
approved.
o Increased Investment Choices -- The Funds would offer additional
classes of shares, which would provide existing and future
shareholders the benefit of an expanded set of purchase options.
o Continuity of Portfolio Management and Management Personnel --
It is expected that, subject to normal personnel turnover, the
current portfolio managers for the Funds will continue as managers
of the Funds and Bruce Bedford and Richard Davis have agreed to
sign long-term employment contracts with Nuveen.
o Continuity of Management Functions and Level and Quality of
Services -- The Board considered the representation by Nuveen of
its intention to maintain the continuity of management functions
and the current level and quality of services obtained by the
Funds after the Acquisition.
PROPOSAL 2
THE PROPOSED REORGANIZATIONS
The Board of Trustees of the Flagship Trust unanimously approved an
Agreement and Plan of Reorganization (the "Reorganization Agreement") in the
form attached hereto as Exhibit B. The Reorganization Agreement provides for
the reorganization (the "Reorganization") of each existing Fund into a new
series (each a "New Fund") of a newly created Massachusetts business trust.
The table below shows the structure of the Funds before and after the
Reorganization.
<TABLE>
<CAPTION>
Before After
<S> <C>
FLAGSHIP TAX EXEMPT FUNDS TRUST TRUST NUVEEN FLAGSHIP MULTISTATE TRUST I
Flagship Colorado Double Tax Exempt Fund Nuveen Flagship Colorado Municipal Bond Fund
Flagship Florida Intermediate Tax Exempt Fund Nuveen Flagship Florida Intermediate Municipal Bond Fund
Flagship New Mexico Double Tax Exempt Fund Nuveen Flagship New Mexico Municipal Bond Fund
Flagship Connecticut Double Tax Exempt Fund
Flagship New Jersey Intermediate Tax Exempt Fund NUVEEN FLAGSHIP MULTISTATE TRUST II
Flagship Alabama Double Tax Exempt Fund Nuveen Flagship Connecticut Municipal Bond Fund
Flagship Georgia Double Tax Exempt Fund Nuveen Flagship New Jersey Intermediate Municipal Bond Fund
Flagship Louisiana Double Tax Exempt Fund
Flagship North Carolina Double Tax Exempt Fund NUVEEN FLAGSHIP MULTISTATE TRUST III
Flagship South Carolina Double Tax Exempt Fund Nuveen Flagship Alabama Municipal Bond Fund
Flagship Tennessee Double Tax Exempt Fund Nuveen Flagship Georgia Municipal Bond Fund
Flagship Kansas Triple Tax Exempt Fund Nuveen Flagship Louisiana Municipal Bond Fund
Flagship Kentucky Limited Term Municipal Bond Fund Nuveen Flagship North Carolina Municipal Bond Fund
Flagship Kentucky Triple Tax Exempt Fund Nuveen Flagship South Carolina Municipal Bond Fund
Flagship Missouri Double Tax Exempt Fund Nuveen Flagship Tennessee Municipal Bond Fund
Flagship Wisconsin Double Tax Exempt Fund
Flagship All-American Tax Exempt Fund NUVEEN FLAGSHIP MULTISTATE TRUST IV
Flagship Intermediate Tax Exempt Fund Nuveen Flagship Kansas Municipal Bond Fund
Flagship Limited Term Tax Exempt Fund Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Flagship Arizona Double Tax Exempt Fund ** Nuveen Flagship Kentucky Municipal Bond Fund
Flagship Florida Double Tax Exempt Fund ** Nuveen Flagship Missouri Municipal Bond Fund
Flagship Michigan Triple Tax Exempt Fund ** Nuveen Flagship Wisconsin Municipal Bond Fund
Flagship New Jersey Double Tax Exempt Fund**
Flagship New York Tax Exempt Fund** NUVEEN FLAGSHIP MUNICIPAL TRUST
Flagship Ohio Double Tax Exempt Fund ** Nuveen Flagship All-American Municipal Bond Fund
Flagship Pennsylvania Triple Tax Exempt Fund ** Nuveen Flagship Intermediate Municipal Bond Fund
Flagship Virginia Double Tax Exempt Fund ** Nuveen Flagship Limited Term Municipal Bond Fund
<FN>
** Series to which this Proxy Statement does not relate;
these series are proposed to be reorganized into various
series of Nuveen Flagship Trusts.
</TABLE>
The purpose of the Reorganization is to assimilate the Funds into
the Nuveen family of mutual funds in a structure that provides for a
uniform set of charter documents, shareholder purchase options, shareholder
account privileges and a smaller number of series of each Trust. Nuveen
Advisory believes that the standardization of documents and operational
policies will help to promote operational efficiencies, to allocate work
flows and to allow for future change, which should benefit the Funds. The
Reorganization is a matter of convenience for Fund shareholders, Flagship
and Nuveen and will not affect the basic nature of the shareholders'
holdings. Flagship Fund shareholders will not bear any of the costs of the
Reorganization. In addition, the Reorganizations should not result in any
adverse Federal income tax consequences for the Funds or their
shareholders.
The Reorganization Agreement sets forth the terms of each
Reorganization under which the New Fund would acquire all of the assets of
the corresponding existing Fund in exchange for which the New Fund would
assume all the liabilities of the existing Fund and each shareholder of the
existing Fund would receive for such shareholder's shares an equal number
of shares (including any fractional share) of equal value of the New Fund.
As a result of each Reorganization, the assets of the existing Fund would
be combined into the New Fund and shareholders of the existing Funds would
become shareholders of the New Fund. The investment objectives and policies
of each New Fund will be identical to the investment objectives and
policies of the Funds. In addition, the general portfolio characteristics
of each New Fund, immediately after the Reorganization, would be identical
to those of each of the respective existing Funds. If the proposals
relating to the Reorganization Agreement are approved, the effective time
is currently expected to be the close of business on or about January 31,
1997.
If shareholders of a Fund do not approve the Reorganization, that
Fund will continue in business as a series of the Flagship Trust.
Procedures for Reorganization. In connection with each
Reorganization and prior to its completion, one share of the New Fund will
be issued to the Fund. The Fund, as the sole shareholder of the New Fund,
will then take the following actions:
(1) approve a proposed new investment advisory agreement on
behalf of the New Fund on the same terms as described above
under Proposal 1 (if Proposal 1 is approved by
shareholders);
(2) approve a proposed new Rule 12b-1 Plan on behalf of the New
Fund on the same terms as described under Proposal 5 (if
Proposal 5 is approved by shareholders); and
(3) ratify the election as trustees of the new trust of the
same persons who are nominated as trustees in Proposal
7 (if Proposal 7 is approved by shareholders); and
(4) ratify the selection of the New Fund's auditors.
Thereafter, the Fund will transfer all its assets to the New Fund
and the New Fund will assume all the liabilities of the Fund and issue to
each shareholder of the Fund shares of the same class of the New Fund, in a
number equal to the number of shares (including any fractional share) of
the Fund then owned by such shareholder. The Fund will then terminate. A
shareholder of the Fund will acquire the same pro rata interest in the New
Fund as of the closing of the Reorganization as the shareholder had in
the Fund immediately prior to the Reorganization. The New Fund will then
operate in place of the Fund, giving effect to the results of the
shareholder votes on the other Proposals herein. After the effective time
of the Reorganization, the outstanding certificates of the existing Funds
will represent certificates of the New Funds.
BOARD RECOMMENDATION
The Board of Trustees of the Flagship Trust has determined that
the transactions contemplated by the Reorganization Agreement are advisable
and in the best interests of each Fund's shareholders.
THE BOARD HAS UNANIMOUSLY RECOMMENDED THAT THE SHAREHOLDERS
APPROVE THE REORGANIZATION AGREEMENT BY VOTING "FOR" PROPOSAL 2.
PROPOSALS 3(A) THROUGH 3(P)
CHANGES TO INVESTMENT OBJECTIVE AND
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
The Board of each of the Funds has proposed that the investment
objective and fundamental investment policies of the Funds be changed.
Shareholders are being asked to approve changes to the Funds' operating
restrictions as part of the Reorganization and assimilation of the Funds'
into the Nuveen mutual fund complex. The primary purpose of these proposals
is to revise the Funds' investment objective and fundamental policies to
conform them to those that are expected to become standard for all similar
funds managed or to be managed by Nuveen Advisory. Set forth below are
Proposals 3(A) through 3(P) each of which will be voted on separately and
if approved by shareholders will become the investment objective and
fundamental investment policies of the Fund, as described below. The Board
and the Adviser believe that these changes will not result in any
significant changes to the actual operation of the Fund portfolios or
impair the ability of the Funds to operate. THEREFORE THE BOARD RECOMMENDS
THAT YOU VOTE "FOR" PROPOSALS 3(A) THROUGH 3(P). If both the Reorganization
as described in Proposal 2 and the changes to the investment objective and
fundamental investment policies as described in Proposals 3(A) through 3(P)
are approved, the changes to the investment objective and fundamental
investment policies, as approved, will become effective immediately prior
to the Reorganization. If, however, the Reorganization is not approved, the
changes to the investment objective and fundamental investment policies, as
approved, will become effective on the close of business on January 31,
1997.
PROPOSAL 3(A): INVESTMENT OBJECTIVE
The Board has proposed that the investment objective of each of
the Funds be changed. The Fund's current investment objective and the
proposed investment objective are substantially similar. Both investment
objectives seek high current interest income exempt from both regular
federal income tax and the applicable state personal income tax, consistent
with preservation of capital, by investing in municipal obligations. The
current investment objective, in addition, provides that the income sought
be consistent with liquidity in addition to preservation of capital. The
proposed investment objective of each Fund is set forth below:
The investment objective of each Fund is to provide you with as high
a level of current interest income exempt from both regular federal
income tax and the applicable state personal income tax as is
consistent, in the view of the Fund's management, with preservation
of capital.
The primary purpose of this proposal is to revise the Funds'
investment objective to conform them to those that are expected to become
standard for all similar funds managed or to be managed by Nuveen Advisory
following the Acquisition. The Board and the Adviser believe that this
change will not result in any significant changes to the actual operation
of the Fund portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(B): INVESTMENT ASSETS
The Board has proposed that the following be a fundamental
investment policy of each of the Funds, which if approved, may not be
changed without the approval of the holders of a majority of the shares of
the Fund.
Each national Fund will invest primarily in Municipal Obligations
issued within the 50 states and certain U.S. possessions or territories so
that the interest income on the Municipal Obligations will be exempt from
regular federal income tax, although this income may be subject to
applicable state personal income taxes.
Each state Fund will invest primarily in Municipal Obligations
issued within its respective state so that the interest income on the
Municipal Obligations will be exempt from both regular federal and
applicable state personal income taxes. Because of the different credit
characteristics of governmental authorities in each of the states and
because of differing supply and demand factors for each state's Municipal
Obligations, there may be differences in the yields on each state Fund's
classes of shares and in the degree of market and financial risk to which
each state Fund is subject.
Each Fund's investment assets will consist of:
o Municipal Obligations rated investment grade at the time of purchase
(Baa or better by Moody's Investors Service, Inc. ("Moody's"), or BBB or
better by Standard and Poor's Corporation ("S&P") or Fitch
Investors Services, Inc. ("Fitch"));
o unrated Municipal Obligations of investment grade quality in the opinion
of Nuveen Advisory; and
o temporary investments within the limitations and for the purposes
described below.
Municipal Obligations rated Baa are considered by Moody's to be
medium grade obligations which lack outstanding investment characteristics
and in fact have speculative characteristics as well, Municipal Obligations
rated BBB are regarded by S&P as having an adequate capacity to pay
principal and interest and Municipal Obligations rated BBB are regarded by
Fitch to be investment grade and of satisfactory credit quality with an
adequate capacity to pay principal and interest. Each Fund may invest in
Municipal Obligations that pay interest subject to the federal alternative
minimum tax ("AMT Bonds").
Under ordinary circumstances, each state Fund will invest
substantially all (at least 80%) of its net assets in its respective
state's Municipal Obligations and each national Fund will invest
substantially all (at least 80%) of its net assets in Municipal
Obligations, and each Fund will not invest more than 20% of its net assets
in "temporary investments," described below, provided that temporary
investments subject to regular federal income tax may not comprise more
than 20% of each Fund's net assets. For defensive purposes, however, in
order to limit the exposure of its portfolio to market risk from temporary
imbalances of supply and demand or other temporary circumstances
affecting the municipal market, each Fund may invest without limit in
temporary investments. A Fund will not be in a position to achieve its
investment objective of tax-exempt income to the extent it invests in
taxable temporary investments.
The salient differences between this proposed fundamental
investment policy and the Fund's current investment policies include the
following:
AMT Bonds. If Proposal 3(B) is approved, the Funds will not have a
fundamental restriction on the percentage of assets invested in Municipal
Obligations that pay interest subject to the federal alternative minimum
tax. The Funds, except for the Kentucky Limited Term Fund, currently do not
allow more than 20% to be invested in AMT Bonds. AMT Bonds are Municipal
Obligations, the interest on which is a specific tax preference item for
purposes of computing the alternative minimum tax on corporations and
individuals. If for shareholders whose tax liability is determined under
the alternative minimum tax, such shareholders will be taxed on their share
of the Fund's exempt-interest dividends that were paid from income earned
on AMT Bonds. In addition, the alternative minimum taxable income for
corporations is increased by 75% of the difference between an alternative
measure of income ("alternative 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.
Temporary Investments. If Proposal 3(B) is approved, the Funds will permit,
under normal circumstances, up to 20% of their net assets to be invested in
temporary investments, provided that temporary investments subject to regular
federal income tax may not comprise more than 20% of each Fund's net assets.
For defensive purposes, however, each Fund will be permitted to invest without
limit in temporary investments. Temporary investments include: short-term
securities the interest on which is exempt from regular federal income tax,
but may be subject to state income tax; taxable temporary investments that are
either U.S. Government securities or are securities rated within the highest
two grades by Moody's, S&P or Fitch and that mature within one year from the
date of purchase or carry a variable or floating rate of interest. The Funds
will be permitted to invest in taxable securities only to the extent that
federal tax-exempt securities temporary investments are not available at
reasonable prices and yields.
The Funds currently do not restrict, under normal circumstances,
the percentage of investments that may be made in short-term municipal
obligations except to the extent that an average maturity of 15 to 25 years
is sought. Short-term notes must be rated SP-1 through SP-2 by S&P or MIG 1
through MIG 4 by Moody's, and tax-exempt commercial paper must be rated
A-1+ through A-2 by S&P or Prime-1 through Prime-2 by Moody's. For
temporary defensive purposes, the Funds may currently invest up to 20% of
its assets in obligations issued or guaranteed by the U.S. Government or
its agencies or instrumentalities, including up to 5% in related,
adequately collateralized repurchase agreements.
The primary purpose of this proposal is to revise the Funds'
fundamental policies to conform them to those that are expected to become
standard for all similar funds managed or to be managed by Nuveen Advisory
following the Acquisition. The Board and the Adviser believe that this
change will not result in any significant changes to the actual operation
of the Fund portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(C): TYPE OF SECURITIES
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, invest in
securities other than Municipal Obligations and temporary
investments.
The Fund does not currently have a similar fundamental investment
policy restricting investments to Municipal Obligations and temporary
securities. The primary purpose of this proposal is to revise the Funds'
fundamental policies to conform them to those that are expected to become
standard for all similar funds managed or to be managed by Nuveen Advisory
following the Acquisition. The Board and the Adviser believe that this change
will not result in any significant changes to the actual operation of the
Fund portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(D): BORROWING
The Board has proposed that the following be a fundamental investment
restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, borrow
money, except from banks for temporary or emergency purposes and
not for investment purposes and then only in an amount not
exceeding (a) 10% of the value of its total assets at the time of
borrowing or (b) one-third of the value of the Fund's total assets
including the amount borrowed, in order to meet redemption
requests which might otherwise require the untimely disposition of
securities. While any such borrowings exceed 5% of such Fund's
total assets, no additional purchases of investment securities
will be made by such Fund. If due to market fluctuations or other
reasons, the value of the Fund's assets falls below 300% of its
borrowings, the Fund will reduce its borrowings within 3 business
days. To do this, the Fund may have to sell a portion of its
investments at a time when it may be disadvantageous to do so.
The current investment restriction on borrowings and the proposed
fundamental investment restriction are similar. The salient difference is
that if Proposal 3(D) is approved, the Funds will be permitted to borrow
from banks up to 10% for temporary or emergency purposes and up to 1/3 of
the value of total assets in order to meet redemption requests, while the
Funds are currently limited to borrowing 10% for extraordinary or emergency
purposes (and not for leveraging) to meet unexpectedly heavy redemption
requests. The primary purpose of this proposal is to revise the Funds'
fundamental policies to conform them to those that are expected to become
standard for all similar funds managed or to be managed by Nuveen Advisory
following the Acquisition. The Board and the Adviser believe that this
change will not result in any significant changes to the actual operation
of the Fund portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(E): PLEDGES
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, pledge,
mortgage or hypothecate its assets, except that, to secure
borrowings permitted by the Fund's fundamental investment
policies, it may pledge securities having a market value at the
time of pledge not exceeding 10% of the value of the Fund's total
assets.
The Fund's current fundamental investment restriction regarding
pledging, mortgaging or hypothecating the Fund's assets is similar to the
proposed fundamental investment restriction described above. The Fund's
current restriction provides that the Fund may not pledge, mortgage or
hypothecate any assets except as required by law or agreement to secure
borrowings permitted under the Fund's current investment policies. The
primary purpose of this proposal is to revise the Funds' fundamental
policies to conform them to those that are expected to become standard for
all similar funds managed or to be managed by Nuveen Advisory following the
Acquisition. The Board and the Adviser believe that this change will not
result in any significant changes to the actual operation of the Fund
portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(F): SENIOR SECURITIES
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval of
the holders of a majority of the shares of the Fund, 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 Proposal 3(D) above or with respect to
transactions involving futures contracts or the writing of options
within certain limits.
The Fund's current fundamental investment restriction regarding
issuing securities senior to the Fund's shares is similar to the proposed
fundamental investment restriction described above, except the current
restriction does not contain the exception concerning transactions
involving futures contracts or the writing of options. The primary purpose
of this proposal is to revise the Funds' fundamental policies to conform
them to those that are expected to become standard for all similar funds
managed or to be managed by Nuveen Advisory following the Acquisition. The
Board and the Adviser believe that this change will not result in any
significant changes to the actual operation of the Fund portfolios or
impair the ability of the Funds to operate.
PROPOSAL 3(G): UNDERWRITING
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval of
the holders of a majority of the shares of the Fund, underwrite any
issue of securities, except to the extent that the purchase of
Municipal Obligations in accordance with its investment objective,
policies and limitations, may be deemed to be an underwriting.
The Fund's current fundamental investment restriction regarding
underwriting securities is similar to the proposed fundamental investment
restriction described above. The Fund's current restriction provides that
the Fund may not act as an underwriter of securities except to the extent
that in connection with disposition of portfolio securities it may be
deemed to be an underwriter. The primary purpose of this proposal is to
revise the Funds' fundamental policies to conform them to those that are
expected to become standard for all similar funds managed or to be managed
by Nuveen Advisory following the Acquisition. The Board and the Adviser
believe that this change will not result in any significant changes to the
actual operation of the Fund portfolios or impair the ability of the Funds
to operate.
PROPOSAL 3(H): REAL ESTATE
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, purchase
or sell real estate, but this shall not prevent any Fund from
investing in Municipal Obligations secured by real estate or
interests therein or foreclosing upon and selling such security.
The Fund's current fundamental investment restriction regarding
investing in real estate is similar to the proposed fundamental investment
restriction described above. The Fund's current restriction provides that
the Fund may not purchase or sell real estate, real estate mortgage loans
or real estate investment trust securities except to the extent that the
tax exempt and U.S. government securities the Fund may invest in would be
considered to be such loans or securities. The primary purpose of this
proposal is to revise the Funds' fundamental policies to conform them to
those that are expected to become standard for all similar funds managed or
to be managed by Nuveen Advisory following the Acquisition. The Board and
the Adviser believe that this change will not result in any significant
changes to the actual operation of the Fund portfolios or impair the
ability of the Funds to operate.
PROPOSAL 3(I): COMMODITIES
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, purchase
or sell commodities or commodities contracts or oil, gas or
other mineral exploration or development programs, except for
transactions involving futures contracts within certain limits.
The Fund's current fundamental investment restriction regarding
investing in commodities, commodity contracts or oil and gas interests is
similar to the proposed fundamental investment restriction described
above. The Fund's current restriction provides that the Fund may not
purchase or sell commodities, commodity contracts or oil and gas interests
except to the extent that the tax exempt and U.S. government securities the
Fund may invest in would be considered to be such contracts or interests
and to the extent the various hedging instruments the Fund may invest in
would be considered to be commodities or commodity contracts. The primary
purpose of this proposal is to revise the Funds' fundamental policies to
conform them to those that are expected to become standard for all similar
funds managed or to be managed by Nuveen Advisory following the
Acquisition. The Board and the Adviser believe that this change will not
result in any significant changes to the actual operation of the Fund
portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(J): LOANS
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, 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.
The Fund's current fundamental investment restriction regarding
making loans is similar to the proposed fundamental investment restriction
described above. The Fund's current restriction provides that the Fund may
not make loans, except to the extent the purchase of the debt obligations
(including repurchase agreements) in accordance with the Fund's current
investment objectives and policies are considered loans. The primary
purpose of this proposal is to revise the Funds' fundamental policies to
conform them to those that are expected to become standard for all similar
funds managed or to be managed by Nuveen Advisory following the
Acquisition. The Board and the Adviser believe that this change will not
result in any significant changes to the actual operation of the Fund
portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(K): SHORT SALES AND MARGIN PURCHASES
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, make short
sales of securities or purchase any securities on margin, except
for such short-term credits as are necessary for the clearance of
transactions.
The Fund's current fundamental investment restriction regarding
short sales of securities or purchasing securities on margin is similar to
the proposed fundamental investment restriction described above. The Fund's
current restriction provides that the Fund may not purchase securities on
margin, make short sales of securities or maintain a net short position
except to the extent the various hedging instruments the Fund may invest in
or the options the Fund may write would be considered to involve short
sales or a net short position. The primary purpose of this proposal is to
revise the Funds' fundamental policies to conform them to those that are
expected to become standard for all similar funds managed or to be managed
by Nuveen Advisory following the Acquisition. The Board and the Adviser
believe that this change will not result in any significant changes to
the actual operation of the Fund portfolios or impair the ability of the
Funds to operate.
PROPOSAL 3(L): PUT AND CALL OPTIONS
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, write or
purchase put or call options, except to the extent that the
purchase of a stand-by commitment may be considered the purchase
of a put, and except for transactions involving options within
certain limits.
The Fund does not currently have a similar fundamental investment
policy restricting the Fund from writing or purchasing put or call options.
The primary purpose of this proposal is to revise the Funds' fundamental
policies to conform them to those that are expected to become standard for
all similar funds managed or to be managed by Nuveen Advisory following the
Acquisition. The Board and the Adviser believe that this change will not
result in any significant changes to the actual operation of the Fund
portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(M): INDUSTRY CONCENTRATION
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, invest
more than 25% of its total assets in securities of issuers in any
one industry, provided, however, that such limitations shall not
be applicable to Municipal Obligations issued by governments or
political subdivisions of governments, and obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities.
The Fund's current fundamental investment restriction regarding
concentration of investments in any one industry is similar to the proposed
fundamental investment restriction described above. The salient difference
between the proposed policy and the current policy is that if Proposal 3(M)
is approved the Funds may not invest more than 25% in any one industry,
with the exception of investments in Municipal Obligations issued or
guaranteed by governments, their political subdivisions, and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, while the Funds are currently permitted to invest more
than 25% of their assets in a particular segment of the municipal bond
market, such as Hospital Revenue Bonds, Housing Agency Bonds, Industrial
Development Bonds, Airport Bonds or U.S. Territorial Bonds. As described
above, if Proposal 3(M) is approved, the Funds will not be permitted to
invest more than 25% of their assets in a particular segment of the
municipal bond market, such as Hospital Revenue Bonds, Housing Agency
Bonds, Industrial Development Bonds or Airport Bonds.
PROPOSAL 3(N): AFFILIATE PURCHASES
The Board has proposed that the following be a fundamental
investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, purchase
or retain the securities of any issuer other than the securities
of the Fund if, to the Fund's knowledge, those trustees of the
Trust, or those officers and directors of Nuveen Advisory, who
individually own beneficially more than 1/2 of 1% of the
outstanding securities of such issuer, together own beneficially
more than 5% of such outstanding securities.
The Fund does not currently have a similar fundamental investment
policy restricting the Fund from purchasing securities of an issuer
affiliated with the Fund's trustees or the Adviser's officers and
directors. The primary purpose of this proposal is to revise the Funds'
fundamental policies to conform them to those that are expected to become
standard for all similar funds managed or to be managed by Nuveen Advisory
following the Acquisition. The Board and the Adviser believe that this
change will not result in any significant changes to the actual operation
of the Fund portfolios or impair the ability of the Funds to operate.
PROPOSAL 3(O): DIVERSIFICATION. FOR THE ALL AMERICAN, INTERMEDIATE,
LIMITED TERM, KENTUCKY AND TENNESSEE FUNDS ONLY.
The Board of each of the listed Funds has proposed that the
following be a fundamental investment restriction for such Fund.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the shares of the Fund, invest
more than 5% of its total assets in securities of any one issuer,
except that this limitation shall not apply to securities of the
United States government, its agencies and instrumentalities or to
the investment of 25% of such Fund's assets.
Each of the listed Fund's current fundamental investment
restriction regarding diversification is similar to the proposed
fundamental investment restriction described above. The salient difference
between the proposed policy and the current policy is that the listed Funds
are currently further restricted from purchasing securities of any one
issuer, other than the U.S. government or any of its instrumentalities, if
immediately after such purchase all of the Funds would own in aggregate
more than 10% of the outstanding voting securities of such issuer.
Although, if Proposal 3(O) is approved, such further restriction will not
be a fundamental policy of the listed Funds, in accordance with applicable
law, the listed Funds will abide by such restriction. The primary purpose
of this proposal is to revise the Funds' fundamental policies to conform
them to those that are expected to become standard for all similar funds
managed or to be managed by Nuveen Advisory following the Acquisition. The
Board and the Adviser believe that this change will not result in any
significant changes to the actual operation of the Fund portfolios or
impair the ability of the Funds to operate.
PROPOSAL 3(P): INVESTMENT COMPANIES
The Board has proposed that the following be deleted as a
fundamental investment restriction of each of the Funds.
The Fund, as a fundamental policy, may not, without the approval
of the holders of a majority of the outstanding shares of the
Fund, acquire securities of other investment companies (other than
in connection with the acquisition of such companies), except that
a series may from time to time invest up to 10% of its assets in
tax-exempt funds, including money market funds.
If Proposal 3(P) is approved, the fundamental policies of the
Funds will not provide that the Funds are restricted from acquiring
securities of other investment companies as described above and the Funds
will be permitted to invest in investment companies subject to applicable
law. The primary purpose of this proposal is to revise the Funds'
fundamental policies to conform them to those that are expected to become
standard for all similar funds managed or to be managed by Nuveen Advisory
following the Acquisition. The Board and the Adviser believe that this
change will not result in any significant changes to the actual operation
of the Fund portfolios or impair the ability of the Funds to operate.
BOARD RECOMMENDATION THAT SHAREHOLDERS APPROVE THE ABOVE CHANGES IN THE
FUND'S INVESTMENT OBJECTIVE AND FUNDAMENTAL INVESTMENT POLICIES
The Board of Trustees has determined that the changes in each Fund's
fundamental investment policies as described in Proposals 3(A) through 3(P)
are advisable and in the best interests of each Fund's shareholders.
THEREFORE, THE BOARD HAS UNANIMOUSLY RECOMMENDED THAT THE SHAREHOLDERS APPROVE
THE CHANGES IN THE FUND'S INVESTMENT OBJECTIVE AND FUNDAMENTAL INVESTMENT
POLICIES BY VOTING "FOR" PROPOSALS 3(A) THROUGH 3(P).
Discussed below are additional salient differences between certain
current non-fundamental investment policies of the Funds and the proposed
investment policies.
a. Average Maturity. The Funds will seek an average maturity of
between 15 to 30 years as compared to the Funds' current goal of
15 to 25 years. Generally, securities with longer maturities are
more volatile than those with shorter maturities.
b. Futures and Options. If the proposed investment policies are
approved, the Funds reserve the right to engage in certain hedging
transactions involving the use of financial futures or options
based on either an index of long-term tax-exempt securities or on
debt securities whose prices, in the opinion of the adviser,
correlate with the prices of the Fund's investments. The Funds
currently engage to a limited extent in futures and options
transactions for hedging purposes.
c. Illiquid Securities. The Funds currently have no stated limitation
on investments in illiquid securities; however, the Funds have
generally followed the Commission guidelines, which provide that
the usual limit on aggregate holdings of illiquid securities is
15% of net assets. If the transactions contemplated by the
Acquisition are approved, as a non-fundamental policy, the Funds
will not be permitted to invest more than 15% of their net assets
in illiquid securities.
PROPOSAL 4
CHANGES FROM "DIVERSIFIED" TO "NON DIVERSIFIED" FOR COLORADO, CONNECTICUT,
GEORGIA, LOUISIANA, MISSOURI AND NORTH CAROLINA FUNDS ONLY
The 1940 Act divides management investment companies into two
types: "diversified" and "non-diversified". A "diversified company" is a
management company which meets the following requirements: At least 75% of
the value of its total assets is represented by cash and cash items
(including receivables), Government securities, securities of other
investment companies and other securities for the purposes of this
calculation limited in respect of any one issuer to an amount not greater
in value than 5% of the value of the total assets of such management
company and not more than 10% of the outstanding voting securities of such
issuer. A "nondiversified company" is any management company other than a
diversified company. The six applicable Funds listed above are currently
"diversified".
The Board of each of the applicable Funds believes because of the
limited size of these states' municipal bond markets, the requirements
under the 1940 Act for diversified funds may at times hinder these Funds'
ability to invest in attractive securities that are suitable for them.
Accordingly, each Board recommends that shareholders of each applicable
Fund vote to change such Fund from a diversified to a non-diversified fund.
In connection with and as a part of this change, the Board also recommends
that shareholders of each such Fund eliminate the Fund's fundamental
investment policy with respect to investing more than a specified
percentage of its assets in the securities of any one issuer. That policy
is as follows:
The Fund may not purchase the securities of any one issuer, other
than the U.S. Government or any of its instrumentalities, if
immediately after such purchase more than 5% of the value of its
total assets would be invested in such issuer, or if all series of
the Fund would own in the aggregate more than 10% of the
outstanding voting securities of such issuer, except that up to
25% of the value of the Fund's total assets may be invested
without regard to such 5% and 10% limitations.
The following table provides a summary of the Board
recommendations with respect to the diversification status of the Funds.
Funds which are proposed to have a change in diversification status are
shown in italics.
CURRENT PROPOSED
FUND STATUS STATUS
All American Diversified Diversified
Intermediate Diversified Diversified
Limited Term Diversified Diversified
Alabama Non-Diversified Non-Diversified
Colorado Diversified Non-Diversified
Connecticut Diversified Non-Diversified
Florida Intermediate Non-Diversified Non-Diversified
Georgia Diversified Non-Diversified
Kansas Non-Diversified Non-Diversified
Kentucky Diversified Diversified
Kentucky Limited Term Non-Diversified Non-Diversified
Louisiana Diversified Non-Diversified
Missouri Diversified Non-Diversified
New Jersey Intermediate Non-Diversified Non-Diversified
New Mexico Non-Diversified Non-Diversified
North Carolina Diversified Non-Diversified
South Carolina Non-Diversified Non-Diversified
Tennessee Diversified Diversified
Wisconsin Non-Diversified Non-Diversified
Being non-diversified, the applicable Funds will be able to invest
more than 5% of their assets in the obligations of an issuer, subject to the
diversification requirements of Subchapter M of the Internal Revenue Code.
This allows each Fund, as to 50% of its total assets, to invest more than 5%,
but not more than 25%, in securities of an individual issuer. Since these
Funds may invest a higher percentage of their assets in the obligations of a
limited number of issuers, these Funds may be more susceptible to any single
economic, political or regulatory occurrence than currently exists as
diversified Funds.
If both the Reorganization as described in Proposal 2 and this
Proposal 4 are approved, this Proposal 4 will become effective immediately
prior to the Reorganization. If, however, the Reorganization is not
approved and this Proposal 4 is approved, this Proposal 4 will become
effective on the close of business on January 31, 1997.
THE BOARD HAS UNANIMOUSLY RECOMMENDED THAT THE SHAREHOLDERS
APPROVE THE CHANGE FROM DIVERSIFIED TO NON-DIVERSIFIED FOR THE COLORADO,
CONNECTICUT, GEORGIA, LOUISIANA, MISSOURI AND NORTH CAROLINA FUNDS ONLY BY
VOTING "FOR" PROPOSAL 4.
PROPOSAL 5
APPROVAL OF 12B-1 PLAN
Rule 12b-1, adopted by the SEC under the 1940 Act, governs the
adoption of distribution plans. The rule provides, among other things, that
an investment company may not engage directly or indirectly in financing
any activity which is primarily intended to result in the sale of its
shares except pursuant to a written plan (the "Plan") adopted in accordance
with the rule, that contains certain provisions that have been approved by
the Board and shareholders. On July 15, 1996, the Board, including all of
the disinterested Trustees, voted to approve the new 12b-1 Plan for each
Fund and directed that it be submitted to the Class A and Class C
shareholders of each Fund at the Meeting along with a recommendation that
each shareholder approve such 12b-1 Plan. A form of the Plan is attached as
Exhibit C and the following summary is qualified in its entirety by
reference to such Exhibit C. If approved by the shareholders, the Plan will
become effective on the date of the consummation of the Acquisition
described above, subject to approval of Proposal 1.
New 12b-1 Plan. Under the new Plan, the Fund is authorized to
compensate Nuveen (the "New Distributor"), as distributor of the Class A,
Class B and Class C shares of the Fund pursuant to a Distribution Agreement
dated as of the consummation of the Flagship Acquisition. The New
Distributor's compensation will initially be at the same rate as currently
exists under the existing 12b-1 plan as described in the Fee Table in
Proposal 1 until February 1, 1997 and thereafter will be: a service fee of
.20% of the average net assets of the Class A shares of the Fund; a service
fee of .20% of the average net assets of the Class B shares of the Fund,
plus a distribution fee of .75% of the average daily net assets of the
Class B shares the Fund; and a service fee of .20% of the average net
assets of the Class C shares of the Fund, plus a distribution fee of .55%
of the average daily net assets of the Class C shares the Fund. For Class C
shares of the Limited Term Fund and Kentucky Limited Term Fund, the New
Distributor's compensation will be a service fee of .20% of average net
assets plus a distribution fee of .35% of average daily net assets. The
distribution fee primarily reimburses the New Distributor for providing
compensation to authorized dealers, including the New Distributor, either
at the time of sale or on an ongoing basis. The service fee payable to the
New Distributor is used to compensate authorized dealers, including the New
Distributor, in connection with the provision of ongoing account services
to shareholders. Such compensation will be accrued daily and paid monthly.
Such fees may be in addition to fees paid to the New Distributor or to
other authorized dealers and brokers for providing other services to
shareholders of the Fund.
The services for which such authorized dealers will be compensated
include, but are not limited to, maintaining account records for
shareholders who beneficially own shares; answering inquiries relating to
shareholders' accounts, the policies of the Fund and the performance of
their investment; providing assistance and handling the transmission of
funds in connection with the purchase, redemption and exchange orders for
shares; providing assistance in connection with changing account setups and
enrolling in various optional fund services; producing and disseminating
shareholder communications or servicing materials; the ordinary or capital
expenses, such as equipment, rent, fixtures, salaries, bonuses, reporting
and recordkeeping and third party consultancy or similar expenses, relating
to any activity for which payment is authorized by the Board; and the
financing of any other activity for which payment is authorized by the
Board.
Existing 12b-1 Plan. The existing Plan authorizes the Fund to
reimburse any underwriter, distributor or selling agent (a "Seller") for
out-of-pocket costs and expenditures actually incurred for financing or
assisting in the financing of any activity which is primarily intended to
result in the sale of the shares of the Fund. The services for which any
such Seller is reimbursed under the existing Plan is substantially similar
to that under the new Plan. The existing Plan also authorizes the payment
of monthly fees to non-affiliated entities who provide marketing and
distribution services to the Fund. Reimbursement is made only to Sellers
with which the Fund has entered into a Distribution Agreement. Such
authority is subject to the discretion of the Board.
The table below shows, as to the Rule 12b-1 Plan for Class A
Shares and the Class C Shares of each Fund, the date adopted, the date of
last amendment (if any), the date last approved by the trustees and the
date to which it continues.
CLASS A AND CLASS C RULE 12-1 PLAN
APPROVAL
BY
FUND ADOPTED AMENDED TRUSTEES CONTINUED TO
Alabama 5/15/92 9/3/92 8/23/96 8/23/97
Colorado 2/2/87 9/3/92 8/23/96 8/23/97
Connecticut 2/2/87 9/3/92 8/23/96 8/23/97
Florida Int. 6/15/92 9/3/92 8/23/96 8/23/97
Georgia 11/21/85 9/3/92 8/23/96 8/23/97
Kansas 7/20/87 9/3/92 8/23/96 8/23/97
Kentucky Ltd. 4/21/95 ------- 8/23/96 8/23/97
Kentucky 2/2/87 9/3/92 8/23/96 8/23/97
Louisiana 7/20/87 9/3/92 8/23/96 8/23/97
Missouri 2/2/87 9/3/92 8/23/96 8/23/97
NJ Int 5/15/92 9/3/92 8/23/96 8/23/97
New Mexico 5/15/92 9/3/92 8/23/96 8/23/97
North Car 11/21/85 9/3/92 8/23/96 8/23/97
South Car 6/15/92 9/3/92 8/23/96 8/23/97
Tennessee 7/20/87 9/3/92 8/23/96 8/23/97
Wisconsin 2/4/94 ------ 8/23/96 8/23/97
All-American 3/8/85 9/3/92 8/23/96 8/23/97
Intermediate 5/15/92 9/3/92 8/23/96 8/23/97
Limited Term 7/20/87 9/3/92 8/23/96 8/23/97
The new Rule 12b-1 Plan will be in effect until August 1, 1997,
and may continue thereafter from year to year for a class if specifically
approved at least annually by vote of "a majority of the outstanding voting
securities" of that class, as defined under the 1940 Act, or by the Board,
including, in either event, the vote of a majority of the "non-interested"
trustees, cast in person at a meeting called for such purpose.
Pursuant to the new Rule 12b-1 Plan, Nuveen will prepare reports
to the Board on a quarterly basis for the Fund's Class A, Class B and Class
C Shares showing the amounts paid to the various firms and such other
information as from time to time the Board may reasonably request. The
Rule requires the Board to review such reports at least quarterly.
In approving the new Rule 12b-1 Plan, the Board determined, as
with the current Rule 12b-1 Plan, that there is a reasonable likelihood
that the new Rule 12b-1 Plan would benefit the Fund and its shareholders.
In doing so, the Board considered several factors, including that the new
Rule 12b-1 Plan would (i) have lower fees (ii) enable investors to choose
the purchasing option best suited to their individual situations, thereby
encouraging current shareholders to make additional investments in each
Fund and attracting new investors and assets to the Funds to the benefit of
each Fund and its shareholders, (iii) facilitate distribution of each
Fund's shares, (iv) help maintain the competitive position of each Fund in
relation to other funds that have implemented or are seeking to implement
similar distribution arrangements, and (v) permit possible administrative
and operating efficiencies through increased fund size.
BOARD RECOMMENDATION
As a result of its consideration of the foregoing factors, the
Board voted to approve the new Rule 12b-1 Plan and to submit it to the
shareholders for their approval.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
NEW RULE 12B-1 PLAN.
PROPOSAL 6
AMENDMENT OF DECLARATION OF TRUST
The Flagship Fund Board of Trustees has unanimously approved a
proposal to amend the existing Amended and Restated Agreement and
Declaration of Trust (the "Declaration of Trust"), to allow the election of
one additional Trustee to the Board. The Declaration of Trust currently
permits a maximum of seven Trustees, and as noted below, Section 15(f) of
the 1940 Act requires that after the Acquisition at least 75% of the
Trustees must be persons who are not "interested persons" of the Adviser.
Therefore in order to be able to have the eight required Trustees, it is
necessary to amend the Declaration of Trust.
In accordance with the current Declaration of Trust, an
affirmative vote of the holders of a majority of the outstanding shares of
the Trust is required to approve the amended Declaration of Trust.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE DECLARATION OF TRUST.
PROPOSAL 7
ELECTION OF BOARD OF TRUSTEES
A condition to the consummation of the Acquisition is that the
Flagship Trust's Board of Trustees comply with Section 15(f) of the 1940
Act. The Board is not currently composed of 75% of independent trustees.
Section 15(f) provides, in pertinent part, that for a period of three years
after the Acquisition, at least 75% of the members of the Board may not be
"interested persons" (as defined in the 1940 Act) of Flagship or Nuveen.
Therefore it is necessary to elect additional trustees.
The current disinterested Trustees (Messrs. Bremner, Castellano,
Nezi and Schneider), have nominated eight (8) persons to take office upon
each person's election by the shareholders. The nominees include two (2) of
the Flagship Trust's current disinterested Trustees (Messrs. Bremner and
Schneider), four additional disinterested nominees (all four of whom also
serve as disinterested members of the boards of other mutual funds managed
by Nuveen Advisory) and two nominees who are directors of Nuveen Advisory
and who also serve as board members of Nuveen Advisory managed funds.
Messrs. Bremner and Schneider also have been nominated to serve as members
of other mutual funds managed by Nuveen Advisory.
The nominees, if elected, will take office upon the consummation
of the Acquisition. The term of each person elected as Trustee will be from
election until the next meeting held for the purpose of electing Trustees
and until his or her successor is elected and qualified. If any of the
Proposals comprising the Reorganization are not approved by Shareholders or
if the Acquisition is not consummated, the current Trustees of the
Flagship Trust will continue to serve as the Flagship Trust's Board.
All of the nominees have consented to serve as Trustees. However,
if any nominee is not available for election at the time of the Meeting,
the proxies may be voted for such other person(s) as shall be determined by
the persons acting under the proxies in their discretion.
The following table shows each nominee who is standing for
election and his age, principal occupation or employment during the past
five years and other public board memberships. The table also shows the
year in which the nominee was elected to the Board of Trustees of the
Flagship Trust, or whether the nominee is standing for election for the
first time at this Meeting, in addition to shareholdings in each Fund.
SHARES/PERCENTAGE
NAME, AGE AND FIVE-YEAR BENEFICIALLY OWNED AS
BUSINESS EXPERIENCE LENGTH OF SERVICE OF AUG. 8, 1996 BY FUND
----------------------- ----------------- -----------------------
Robert P. Bremner (56) Since 1983 Intermediate - 868**
Currently a private investor
and management consultant.
William J. Schneider (52) Since 1983 Ohio - 8,155**
Currently a senior partner Limited Term - 2,805**
at Miller-Valentine Partners,
Vice President, Miller-
Valentine Realty, Inc.
Lawrence H. Brown (61) Nominee None
Retired in August 1989 as
Senior Vice President of the
Northern Trust Company
*Timothy R. Schwertfeger (47) Nominee None
Chairman (since July, 1996)
and Director of The John Nuveen
Company, John Nuveen & Co.
Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.; prior thereto,
Executive Vice President of
The John Nuveen Company, John
Nuveen & Co. Incorporated,
Nuveen Advisory Corp.
and Nuveen Institutional
Advisory Corp.
Anne E. Impellizzeri (63) Nominee None
President and Chief Executive
Officer of Blanton-Peale
Institute (since December 1990);
prior thereto, Vice President
of New York City Partnership
(from 1987 to 1990) and Vice
President of Metropolitan Life
Insurance Company (from 1980
to 1987)
Margaret K. Rosenheim (69) Nominee None
Helen Ross Professor of Social
Welfare Policy, School of Social
Service Administration,
University of Chicago
Peter R. Sawers (63) Nominee None
Adjunct Professor of Business
and Economics, University of
Dubuque, Iowa (since January
1991); Adjunct Professor,
Lake Forest Graduate School
of Management, Lake Forest,
Illinois (since January
1992); prior thereto,
Executive Director, Towers
Perrin Australia (management
consultant); Chartered Financial
Analyst; Certified Management
Consultant
*Anthony T. Dean (51) Nominee None
Director and (since July 1996)
President of The John Nuveen
Company, John Nuveen & Co.
Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.; prior thereto
Executive Vice President of
The John Nuveen Company,
John Nuveen & Co. Incorporated,
Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.
[FN]
* Trustees who are or would be "interested persons" as defined in
the Investment Company Act of 1940.
** Less than 1%.
R. Bremner and W. Schneider serve as board members of two
registered investment companies advised by the Adviser. L. Brown, A. Dean,
P. Sawers, T. Schwertfeger, A. Impellizzeri and M. Rosenheim serve as board
members of 60 funds advised by Nuveen Advisory. In addition, A. Dean and T.
Schwertfeger serve as board members of six registered investment companies
advised by Nuveen Institutional Advisory Corp. The current Trustees of the
Flagship Trust are Robert P. Bremner, William J. Schneider, Bruce P.
Bedford, Joseph F. Castellano, Richard P. Davis and Paul F. Nezi.
The Board met 7 times during the Flagship Trust's fiscal year
ended May 31, 1996. Each then current Trustee attended 75% or more of the
respective meetings of the Board and the committees of which he was a
member. The Board does not have an audit committee, a nominating
committee or a compensation committee.
The Flagship Trust pays the disinterested trustees $3,750 per
quarter each plus an additional $1,500 per meeting. As reflected above, the
trustees currently serve as board members of one other investment companies
for which the Adviser serves as investment adviser. Trustees or officers
who are "interested persons" receive no compensation from the Flagship
Trust.
The table below shows, for each disinterested trustee, the
aggregate compensation paid or accrued by the Flagship Trust for the fiscal
year ended May 31, 1996 and the total compensation that all existing Funds
paid to each trustee during the calendar year 1995.
TOTAL COMPENSATION
AGGREGATE FROM TRUST AND
COMPENSATION FUND COMPLEX
TRUSTEE FROM TRUST PAID TO TRUSTEES
Robert P. $20,500 $25,500
Bremner
Joseph F. Castellano $21,500 $26,500
William J. Schneider $21,500 $26,500
Paul F. Nezi $21,500 $26,500
It is anticipated that, after completion of the Acquisition, the
restructured Board of the New Funds will elect new officers who are
expected to include persons affiliated with Nuveen.
As of August 8, 1996, the trustees and executive officers of the
Flagship Trust as a group owned 370,234 shares of the Flagship Trust
through ownership of the Ohio, All-American and Limited Term Funds. As of
August 8, 1996, no person known to the Flagship Trust have owned
beneficially more than five percent of the shares of any class of any Fund,
except as set forth in Annex A.
OTHER INFORMATION
FEDERAL INCOME TAX CONSEQUENCES
It is anticipated that the transactions contemplated by the
Reorganization will be tax-free for federal income tax purposes. The
Flagship Trust will receive an opinion of counsel that under the Internal
Revenue Code of 1986 the reorganization of the Fund into the New Fund
pursuant to the Reorganization will not give rise to the recognition of
income, deductions, gain or loss for federal income tax purposes to the
Fund, the Flagship Trust, or the shareholders of the Fund. A shareholder's
adjusted basis for tax purposes in shares of the New Fund after the
Reorganization will be the same as his adjusted basis for tax purposes in
the shares of the Fund immediately before the Reorganization. The holding
period of the shares of the New Fund received by the shareholders of the
Fund will include the holding period of shares of the Fund exchanged
therefor, provided that at the time of the exchange the shares of the Fund
were held as capital assets.
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement and all other costs in connection
with solicitation of proxies related to the approval of the new Investment
Advisory Agreements will be paid by the Adviser and the John Nuveen Company
including any additional solicitation made by letter, telephone or
telegraph. In addition to solicitation by mail, certain officers and
representatives of the Flagship Trust, officers and employees of the
Adviser and Nuveen and certain financial services firms and their represen-
tatives, who will receive no extra compensation for their services, may
solicit proxies by telephone, telegram or personally. In addition, the
Adviser and Nuveen may retain a firm to solicit proxies on behalf of the
Board; the fee for which will be borne by the Adviser and Nuveen. A COPY OF
YOUR FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED MAY 31, 1996 IS
AVAILABLE WITHOUT CHARGE UPON REQUEST BY WRITING TO THE FLAGSHIP TRUST AT
ONE DAYTON CENTRE, ONE SOUTH MAIN STREET, DAYTON OH, 45402 OR BY CALLING
1-800-414-7447.
PROPOSALS OF SHAREHOLDERS
As a Massachusetts business trust, the Flagship Trust is not
required to hold annual shareholder meetings, but it will hold special
meetings as required or deemed desirable, or upon request by holders of 10%
of the shares. Since the Flagship Trust does not hold regular meetings of
shareholders, the anticipated date of the next special shareholder meeting
cannot be provided. Any shareholder proposal which may properly be included
in the proxy solicitation material for a special shareholder meeting must
be received by the Flagship Trust no later than four months prior to the
date proxy statements are mailed to shareholders.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board is not aware of any matters that will be presented for
action at the Meeting other than the matters set forth herein. Should any
other matters requiring a vote of shareholders arise, the proxy in the
accompanying form will confer upon the person or persons entitled to vote the
shares represented by such proxy the discretionary authority to vote matters
in accordance with their best judgment.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
Michael D. Kalbfleisch
Secretary
EXHIBIT A-1
FORM OF INVESTMENT MANAGEMENT AGREEMENT
[STATE SPECIFIC FUNDS]
AGREEMENT made this day of , 1996, by and between _________ FUND, a
series of the FLAGSHIP TAX EXEMPT FUNDS TRUST, a Massachusetts business trust
(the "Fund"), and NUVEEN ADVISORY CORP., a Delaware corporation (the
"Adviser").
WITNESSETH
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment
adviser for, and to manage the investment and reinvestment of the
assets of each of the Fund's portfolios as may exist from time to
time in accordance with the Fund's investment objective and
policies and limitations relating to such portfolio, and to
administer the Fund's affairs to the extent requested by and
subject to the supervision of the Board of Trustees of the Fund
for the period and upon the terms herein set forth. The investment
of the assets of each portfolio shall be subject to the Fund's
policies, restrictions and limitations with respect to securities
investments as set forth in the Fund's registration statement on
Form N-lA under the Securities Act of 1933 and the Investment
Company Act of 1940 covering the Fund's shares of beneficial
interest, including the Prospectus and Statement of Additional
Information forming a part thereof, all as filed with the
Securities and Exchange Commission and as from time to time
amended, and all applicable laws and the regulations of the
Securities and Exchange Commission relating to the management of
registered open-end, management investment companies.
The Adviser accepts such employment and agrees during such period
to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and administrative services
(other than such services, if any, provided by the Fund's transfer
agent and shareholder service agent) for the Fund, to permit any
of its officers or employees to serve without compensation as
trustees or officers of the Fund if elected to such positions,
and to assume the obligations herein set forth for the
compensation herein provided. The Adviser shall, for all
purposes herein provided, be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for nor represent the Fund in any
way, nor otherwise be deemed an agent of the Fund.
2. For the services and facilities described in Section 1, the Fund
will pay to the Adviser, at the end of each calendar month, an
investment management fee related to each of the Fund's
portfolios. For each portfolio calculated separately except the
Flagship Kentucky Limited Municipal Bond Fund ("Kentucky
Limited"), the fees shall be computed at the rate of:
----------------------------------------------------
RATE NET ASSETS
----------------------------------------------------
.5500% For the first $125 million
.5375% For the next $125 million
.5250% For the next $250 million
.5125% For the next $500 million
.5000% For the next $1 billion
.4750% For assets over $2 billion
----------------------------------------------------
For Kentucky Limited, the fees shall be computed at the rate of:
RATE NET ASSETS
----------------------------------------------------
.4500% For the first $125 million
.4375% For the next $125 million
.4250% For the next $250 million
.4125% For the next $500 million
.4000% For the next $1 billion
.3750% For assets over $2 billion
----------------------------------------------------
For the month and year in which this Agreement becomes effective,
or terminates, and for any month and year in which a portfolio is
added or eliminated from the Fund, there shall be an appropriate
proration on the basis of the number of days that the Agreement
shall have been in effect, or the portfolio shall have existed,
during the month and year, respectively. The services of the
Adviser to the Fund under this Agreement are not to be deemed
exclusive, and the Adviser shall be free to render similar
services or other services to others so long as its services
hereunder are not impaired thereby.
Regardless of any of the above provisions, the Adviser guarantees
that the total expenses of the Fund in any fiscal year, exclusive
of taxes, interest, brokerage commissions, and extraordinary
expenses such as litigation costs, shall not exceed, and the
Adviser undertakes to pay or refund to the Fund any amount up to
but not greater than the aggregate fees received by the Adviser
under this Agreement for such fiscal year, the limitation imposed
by any jurisdiction in which the Fund continues to offer and sell
its shares after exceeding such limitation.
The net asset value of the Fund shall be calculated as provided in
the Declaration of Trust of the Fund. On each day when net asset
value is not calculated, the net asset value of a share of
beneficial interest of the Fund shall be deemed to be the net
asset value of such share as of the close of business on the last
day on which such calculation was made for the purpose of the
foregoing computations.
3. The Adviser shall arrange for officers or employees of the
Adviser to serve, without compensation from the Fund, as trustees,
officers or agents of the Fund, if duly elected or appointed to
such positions, and subject to their individual consent and to any
limitations imposed by law.
4. Subject to applicable statutes and regulations, it is
understood that officers, trustees, or agents of the Fund are, or
may be, interested in the Adviser as officers, directors, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as trustees, officers or agents.
5. The Adviser shall not be liable for any loss sustained by reason
of the ------- purchase, sale or retention of any security,
whether or not such purchase, sale or retention shall have been
based upon the investigation and research made by any other
individual, firm or corporation, if such recommendation shall
have been selected with due care and in good faith, except loss
resulting from willful misfeasance, bad faith, or gross negligence
on the part of the Adviser in the performance of its obligations
and duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. The Adviser currently manages other investment accounts and funds,
including those ------- with investment objectives similar to the
Fund, and reserves the right to manage other such accounts and
funds in the future. Securities considered as investments for a
Fund portfolio may also be appropriate for other Fund portfolios
or for other investment accounts and funds that may be managed by
the Adviser. Subject to applicable laws and regulations, the
Adviser will attempt to allocate equitably portfolio transactions
among the Fund's portfolios and the portfolios of its other
investment accounts and funds purchasing securities whenever
decisions are made to purchase or sell securities by a Fund
portfolio and another Fund's portfolio or one or more of such
other accounts or funds simultaneously. In making such
allocations, the main factors to be considered by the Adviser will
be the respective investment objectives of the Fund portfolio or
portfolios purchasing such securities and such other accounts and
funds, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by
the Fund portfolios and such other accounts and funds, the size of
investment commitments generally held by the Fund portfolios and
such accounts and funds, and the opinions of the persons
responsible for recommending investments to the Fund and such
other accounts and funds.
7. This Agreement shall continue in effect until [ ], unless and until
terminated by either party as hereinafter provided, and shall
continue in force from year to year thereafter, but only as long as
such continuance is specifically approved, at least annually, in the
manner required by the Investment Company Act of 1940.
This Agreement shall automatically terminate in the event of its
assignment, and may be terminated at any time without the payment
of any penalty by the Fund or by the Adviser upon sixty (60) days'
written notice to the other party. The Fund may effect termination
by action of the Board of Trustees, or, with respect to any Fund
portfolio, by vote of a majority of the outstanding voting
securities of that portfolio, accompanied by appropriate notice.
This Agreement may be terminated, at any time, without the payment
of any penalty, by the Board of Trustees of the Fund, or, with
respect to any Fund portfolio, by vote of a majority of the
outstanding voting securities of that portfolio, in the event that
it shall have been established by a court of competent
jurisdiction that the Adviser, or any officer or director of the
Adviser, has taken any action which results in a breach of the
covenants of the Adviser set forth herein.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation, described in Section 2, earned prior to such
termination.
8. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder shall not
be thereby affected.
9. The Adviser and its affiliates reserve the right to grant, at
any time, ------- the use of the name "Nuveen" or the name
"Flagship", or any approximation or abbreviation thereof, to any
other investment company or business enterprise. Upon termination
of this Agreement by either party, or by its terms, the Fund shall
thereafter refrain from using any name of the Fund which includes
"Nuveen" or "Flagship" or any approximation or abbreviation
thereof, or is sufficiently similar to such name as to be likely
to cause confusion with such name, and shall not allude in any
public statement or advertisement to the former association.
10. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for receipt of such notice.
11. The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf
of the Fund by the Fund's officers as officers and not individually
and the obligations imposed upon the Fund by this Agreement are not
binding upon any of the Fund's Trustees, officers or shareholders
individually but are binding only upon the assets and property of
the Fund.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed on the day and year above written.
FLAGSHIP TAX EXEMPT FUNDS TRUST NUVEEN ADVISORY CORP.
by:____________________________ by:_________________________
Vice President Vice President
Attest:__________________________ Attest:_______________________
Secretary Assistant Secretary
EXHIBIT A-2
FORM OF INVESTMENT MANAGEMENT AGREEMENT
[NATIONAL FUNDS]
AGREEMENT made this day of , 1996, by and between __________ FUND,
a series of the FLAGSHIP TAX EXEMPT FUNDS TRUST, a Massachusetts business
trust (the "Fund"), and NUVEEN ADVISORY CORP., a Delaware corporation (the
"Adviser").
WITNESSETH
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment
adviser for, and to manage the investment and reinvestment of the
assets of each of the Fund's Series ("Portfolios") as may exist
from time to time in accordance with the Fund's investment
objective and policies and limitations relating to such portfolio,
and to administer the Fund's affairs to the extent requested by
and subject to the supervision of the Board of Trustees of the
Fund for the period and upon the terms herein set forth. The
investment of the assets of each Portfolio shall be subject to the
Fund's policies, restrictions and limitations with respect to
securities investments as set forth in the Fund's registration
statement on Form N-1A under the Securities Act of 1933 and the
Investment Company Act of 1940 covering the Fund's Portfolio's
shares of beneficial interest, including the Prospectus and
Statement of Additional Information forming a part thereof, all as
filed with the Securities and Exchange Commission and as from time
to time amended, and all applicable laws and the regulations of
the Securities and Exchange Commission relating to the management
of registered open-end, diversified management investment
companies.
The Adviser accepts such employment and agrees during such period
to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and administrative services
(other than such services, if any, provided by the Fund's
custodian, transfer agent and shareholder service agent, and the
like) for the Fund, to permit any of its officers or employees to
serve without compensation as trustees or officers of the Fund if
elected to such positions, and to assume the obligations herein
set forth for the compensation herein provided. The Adviser shall,
for all purposes herein provided, be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for nor represent the Fund in any
way, nor otherwise be deemed an agent of the Fund.
2. For the services and facilities described in Section 1, the
Fund will pay to the Adviser, at the end of each calendar month,
an investment management fee related to each of the Fund's
Portfolios. For each Portfolio, calculated separately, except the
Flagship Limited Term Municipal Bond Fund ("Limited Term") the
fees shall be computed at the rate of:
----------------------------------------------------
RATE NET ASSETS
----------------------------------------------------
.5000% For the first $125 million
.4875% For the next $125 million
.4750% For the next $250 million
.4625% For the next $500 million
.4500% For the next $1 billion
.4250% For assets over $2 billion
---------------------------------------------------
For the Limited Term, the fees shall be computed at the rate of:
RATE NET ASSETS
---------------------------------------------------
.4500% For the first $125 million
.4375% For the next $125 million
.4250% For the next $250 million
.4125% For the next $500 million
.4000% For the next $1 billion
.3750% For assets over $2 billion
---------------------------------------------------
For the month and year in which this Agreement becomes effective,
or terminates, and for any month and year in which a Portfolio is
added or eliminated from the Fund, there shall be an appropriate
proration on the basis of the number of days that the Agreement
shall have been in effect, or the Portfolio shall have existed,
during the month and year, respectively. The services of the
Adviser to the Fund under this Agreement are not to be deemed
exclusive, and the Adviser shall be free to render similar
services or other services to others so long as its services
hereunder are not impaired thereby.
Regardless of any of the above provisions, the Adviser guarantees
that the total expenses of each Portfolio in any fiscal year,
exclusive of taxes, interest, brokerage commissions, and
extraordinary expenses such as litigation costs, shall not exceed,
and the Adviser undertakes to pay or refund to the Portfolio any
amount up to but not greater than the aggregate fees received by
the Adviser under this Agreement for such fiscal year, the
limitation imposed by any jurisdiction in which the Fund continues
to offer and sell shares of the Portfolio after exceeding such
limitation.
The net asset value of each Portfolio shall be calculated as
provided in the Declaration of Trust of the Fund. On each day when
net asset value is not calculated, the net asset value of a share
of beneficial interest of a Portfolio shall be deemed to be the
net asset value of such share as of the close of business on the
last day on which such calculation was made for the purpose of the
foregoing computations.
3. The Adviser shall arrange for officers or employees of the
Adviser to serve, without compensation from the Fund, as trustees,
officers or agents of the Fund, if duly elected or appointed to
such positions, and subject to their individual consent and to any
limitations imposed by law.
4. Subject to applicable statutes and regulations, it is
understood that officers, trustees, or agents of the Fund are, or
may be, interested in the Adviser as officers, directors, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as trustees, officers or agents.
5. The Adviser shall not be liable for any loss sustained by reason of
the purchase, sale or retention of any security, whether or not
such purchase, sale or retention shall have been based upon the
investigation and research made by any other individual, firm or
corporation, if such recommendation shall have been selected with
due care and in good faith, except loss resulting from willful
misfeasance, bad faith, or gross negligence on the part of the
Adviser in the performance of its obligations and duties, or by
reason of its reckless disregard of its obligations and duties
under this Agreement.
6. The Adviser currently manages other investment accounts and funds,
including those with investment ------- objectives similar to the
Fund, and reserves the right to manage other such accounts and
funds in the future. Securities considered as investments for a
Portfolio of the Fund may also be appropriate for other Portfolios
or for other investment accounts and funds that may be managed by
the Adviser. Subject to applicable laws and regulations, the
Adviser will attempt to allocate equitably portfolio transactions
among the Fund's Portfolios and the portfolios of its other
investment accounts and funds purchasing securities whenever
decisions are made to purchase or sell securities by a Portfolio
and another fund's portfolio or one or more of such other accounts
or funds simultaneously. In making such allocations, the main
factors to be considered by the Adviser will be the respective
investment objectives of the Fund Portfolio or Portfolios
purchasing such securities and such other accounts and funds, the
relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment by the Fund
Portfolios and such other accounts and funds, the size of
investment commitments generally held by the Fund Portfolios and
such accounts and funds, and the opinions of the persons
responsible for recommending investments to the Fund and such
other accounts and funds.
7. This Agreement shall be in effect until [ ], unless and until
terminated by either party as hereinafter provided, and shall
continue in force from year to year thereafter, but only as long
as such continuance is specifically approved, at least annually,
in the manner required by the Investment Company Act of 1940.
This Agreement shall automatically terminate in the event of its
assignment, and may be terminated at any time without the payment
of any penalty by the Fund or by the Adviser upon sixty (60) days'
written notice to the other party. The Fund may effect termination
by action of the Board of Trustees, or, with respect to any Fund
Portfolio, by vote of a majority of the outstanding voting
securities of that Portfolio, accompanied by appropriate notice.
This Agreement may be terminated, at any time, without the payment
of any penalty, by the Board of Trustees of the Fund, or, with
respect to any Fund Portfolio, by vote of a majority of the
outstanding voting securities of that Portfolio, in the event that
it shall have been established by a court of competent
jurisdiction that the Adviser, or any officer or director of the
Adviser, has taken any action which results in a breach of the
covenants of the Adviser set forth herein.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation, described in Section 2, earned prior to such
termination
8. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule, or otherwise, the
remainder shall not be thereby affected.
9. The Adviser and its affiliates reserve the right to grant, at any
time, the use of the name "Nuveen" or the name "Flagship", or any
approximation or abbreviation thereof, to any other investment
company or business enterprise. Upon termination of this Agreement
by either party, or by its terms, the Fund shall thereafter
refrain from using any name of the Fund which includes "Nuveen" or
"Flagship" or any approximation or abbreviation thereof, or is
sufficiently similar to such name as to be likely to cause
confusion with such name, and shall not allude in any public
statement or advertisement to the former association.
10. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for receipt of such notice.
11. The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on
behalf of the Fund by the Fund's officers as officers and not
individually and the obligations imposed upon the Fund by this
Agreement are not binding upon any of the Fund's Trustees,
officers or shareholders individually but are binding only upon
the assets and property of the Fund.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed on the day and year above written.
FLAGSHIP TAX-EXEMPT FUNDS TRUST NUVEEN ADVISORY CORP.
by:____________________________ by:_________________________
Vice President Vice President
Attest:__________________________ Attest:_______________________
Secretary Assistant Secretary
EXHIBIT B
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
FLAGSHIP TAX EXEMPT FUNDS TRUST, a Massachusetts business trust
(the "Trust"), on behalf of its __________________ series (the "Fund"), and
NUVEEN FLAGSHIP _______ TRUST, a Massachusetts business trust (the "New
Trust") on behalf of its series of shares designated ___________________
(the "New Fund"), agree upon the following plan of reorganization:
1. The Fund shall transfer to the New Fund all of the assets of
the Fund (including the share(s) of the New Fund owned by the Fund, which
shall be cancelled), in exchange for which the New Fund shall
simultaneously assume all of the liabilities of the Fund, and shall issue
directly to the shareholders of the Fund shares of the New Fund in a number
equal to the aggregate number of shares (including fractional shares) of
the Fund then outstanding, in a distribution in which each registered
shareholder of the Fund shall receive shares of the New Fund in a number
equal to the number of shares (including any fractional share) of the Fund
then owned by the shareholder, in exchange for and cancellation of the
shareholder's shares of the Fund.
2. The distribution to the shareholders of the Fund shall be
accomplished by establishing an account on the share records of the New
Fund in the name of each registered shareholder of the fund, and crediting
that account with a number of shares of the New Fund equal to the number of
shares (including any fractional share) of the Fund owned of record by the
shareholder at the time of the distribution. Outstanding certificates
representing shares of the fund shall thereafter represent an equal
number of shares of the Series.
3. Promptly thereafter, the Fund shall be terminated.
4. The transaction in section 1 above shall occur on January 31,
1997 at ____ p.m., Chicago time, at the offices of the New Trust, or at
such other date, time or place as may be agreed upon by the parties.
5. This agreement may be amended at any time, and may be
terminated at any time before the completion of the transaction in section
1, regardless of whether or not this agreement and plan of reorganization
has been approved by the shareholders of the Fund, by agreement of the
Trust and the New Trust, provided that no amendment shall have a material
adverse effect upon the interests of shareholders of the Fund. In any case,
this agreement and plan of reorganization may be terminated by either the
Trust or the New Trust, if the transaction in section 1 has not occurred by
the close of business on June 30, 1997.
6. A copy of the Trust's declaration of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
give that this instrument is executed on behalf of the trustees of the
Trust as the trustees of the Trust and not individually and that the
obligations under this instrument are not binding upon any of the trustees,
officers or shareholders of the Trust individually, but binding only upon
the assets and property of the Series.
7. A copy of the New Trust's Declaration of the Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of
the New Trust as the Trustees of the New Trust and not individually and
that the obligations under this instrument are not binding upon any of the
Trustees, officers or shareholders of the New Trust individually, but
binding only upon the assets and property of the New Fund.
8. At any time after the completion of the transaction in section
1, the Trust acting through its officers, or if then dissolved through
its last officers, shall execute and deliver to the New Trust, such
additional instruments of transfer or other written assurances as the New
Trust may reasonably request in order to vest in the New Trust, acting for
the New Fund, title to the assets transferred by the Fund under this
agreement.
9. This agreement shall be construed in accordance with applicable
federal law and the laws of the State of Illinois, except as to the
provisions of sections 6 and 7 hereof which shall be construed in
accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by the President or Vice President of each Trust.
FLAGSHIP TAX-EXEMPT FUNDS TRUST
By:--------------------------------
President
NUVEEN FLAGSHIP_____ TRUST
By:--------------------------------
President
EXHIBIT C
FORM OF PLAN OF DISTRIBUTION AND SERVICE
PURSUANT TO RULE 12B-1
____________,1996
WHEREAS, Flagship Tax Exempt Funds Trust, a Massachusetts business
trust (the "Fund") engages in business as an open end management investment
company and is registered under the Investment Company Act of 1940, as
amended (the "Act");
WHEREAS, the Fund employs John Nuveen & Co. Incorporated (the
"Distributor") as distributor of the shares of the Fund (the "Shares")
pursuant to a Distribution Agreement dated as of , 1996;
WHEREAS, the Fund is authorized to issue Shares in four different
classes ("Classes"): Class A, Class B, Class C and Class R (although not all
series will offer all classes).
WHEREAS, the Fund desires to adopt a Plan of Distribution and
Service pursuant to Rule 12b-1 under the Act ("Rule 12b-1 and the Board of
Trustees of the Fund has determined that there is a reasonable likelihood
that adoption of this Plan of Distribution and Service will benefit the
Fund and its shareholders;
WHEREAS, the Fund has adopted a Multiple Class Plan Pursuant to
Rule 18f-3 (the "Rule 18f-3 Plan") to enable the various Classes of Shares
to be granted different rights and privileges and to bear different
expenses, and has an effective registration statement on file with the SEC
containing a Prospectus describing such Classes of Shares;
WHEREAS, as described in the Rule 18f-3 Plan, the purchase of
Class A Shares is generally subject to an up-front sales charge, as set
forth in the Fund's Prospectus and Statement of Additional Information, and
the purchase of Class B and Class C Shares will not be subject to an
up-front sales charge, but in lieu thereof the Class B Shares will be
subject to an asset-based distribution fee (and a declining contingent
deferred sales charge) and Class C Shares will be subject to an asset-based
distribution fee (and a one-year contingent deferred sales charge), as
described in the Prospectus for the Shares; and
WHEREAS, Shares representing an investment in Class B will
automatically convert to Class A Shares 8 years after the investment, as
described in the Prospectus for the Shares,
NOW, THEREFORE, the Fund hereby adopts, and the Distributor hereby
agrees to the terms of, this Plan of Distribution and Service (the "Plan")
in accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Fund is authorized to compensate the Distributor for
services performed and expenses incurred by the Distributor
in connection with the distribution of Shares of Class A,
Class B and Class C of the Fund and the servicing of
accounts holding such Shares.
(b) The amount of such compensation paid during the period
beginning on January 1, 1997 through January 31, 1997 shall
consist of:
(i) with respect to Class A Shares, a Service Fee not
to exceed .20% of average daily net assets of the
Class A Shares of the Fund, plus a Distribution Fee
not to exceed .20% of average daily net assets of
the Class A Shares of the Fund;
(ii) with respect to Class B Shares, a Service Fee not
to exceed .20% of average daily net assets of the
Class B Shares of the Fund, plus a Distribution Fee
not to exceed .75% of average daily net assets of
the Class B Shares of the Fund; and
(iii) (A) with respect to Class C Shares of a Long-Term
and Intermediate series, a Service Fee not to
exceed .20% of average daily net assets of the
Class C Shares of the Fund, plus a Distribution Fee
not to exceed .75% of average daily net assets of
the Class C Shares of the Fund; and
(B) with respect to Class C Shares of a Limited
Term series, a Service Fee not to exceed .20% of
average daily net assets of the Class C Shares of
the Fund, plus a Distribution Fee not to exceed
.50% of the average daily net assets of the Class C
Shares of the Fund.
(c) The amount of such compensation paid beginning on February
1, 1997 and for any one year thereafter shall consist of:
(i) with respect to Class A Shares, a Service Fee not
to exceed .20% of average daily net assets of the
Class A Shares of the Fund;
(ii) with respect to Class B Shares, a Service Fee not
to exceed .20% of average daily net assets of the
Class B Shares of the Fund, plus a Distribution Fee
not to exceed .75% of average daily net assets of
the Class B Shares of the Fund; and
(iii) (A) with respect to Class C Shares of a Long-Term
and Intermediate series, a Service Fee not to
exceed .20% of average daily net assets of the
Class C Shares of the Fund, plus a Distribution Fee
not to exceed .55% of average daily net assets of
the Class C Shares of the Fund; and
(B) with respect to Class C Shares of a Limited
Term series, a Service Fee not to exceed .20% of
average daily net assets of the Class C Shares of
the Fund, plus a Distribution Fee not to exceed
.35% of the average daily net assets of the Class C
Shares of the Fund.
Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of
Trustees may determine.
(d) With respect to Class A Shares, the Distributor shall pay
any Service Fees it receives under the Plan for which a
particular underwriter, dealer, broker, bank or selling
entity having a Dealer Agreement in effect ("Authorized
Dealer", which may include the Distributor) is the dealer
of record to such Authorized Dealers to compensate such
organizations for providing services to shareholders
relating to their investment. The Distributor may retain
any Service Fees not so paid.
(e) With respect to the Class B Shares, the Distributor:
(i) shall retain the Distribution Fee to compensate
it for costs associated with the distribution
of the Class B Shares, including the payment of
broker commissions to Authorized Dealers (which
may include the Distributor) who were the dealer
of record with respect to the purchase of those
shares; and
(ii) shall pay any Service Fees it receives under the
Plan for which a particular Authorized Dealer is
the dealer of record (which may include the
Distributor) to such Authorized Dealers to
compensate such organizations for providing
services to shareholders relating to their
investment; provided, however, that the
Distributor shall be entitled to retain, for the
first year after purchase of the Class B Shares,
the Service Fee to the extent that it may have
pre-paid the Service Fee for that period to the
Authorized Dealer of record.
The Distributor may retain any Distribution or
Service Fees not so paid.
(f) With respect to the Class C Shares, the Distributor:
(i) shall pay the Distribution Fee it receives
under the Plan with respect to Class C Shares
for which a particular Authorized Dealer is the
dealer of record (which may include the
Distributor) to such Authorized Dealers to
compensate such organizations in connection with
such share sales; provided, however, that the
Distributor shall be entitled to retain, for the
first year after purchase of the Class C Shares,
the Distribution Fee to the extent that it may
have pre-paid the Distribution Fee for that
period to the Authorized Dealer of record; and
(ii) shall pay any Service Fees it receives under the
Plan for which a particular Authorized Dealer is
the dealer of record (which may include the
Distributor) to such Authorized Dealers to
compensate such organizations for providing
services to shareholders relating to their
investment; provided, however, that the
Distributor shall be entitled to retain, for the
first year after purchase of the Class C Shares,
the Service Fee to the extent that it may have
pre-paid the Service Fee for that period to the
Authorized Dealer of record.
The Distributor may retain any Distribution or
Service Fees not so paid.
(g) Services for which such Authorized Dealers may receive
Service Fee payments include any or all of the following:
maintaining account records for shareholders who
beneficially own Shares; answering inquiries relating to
the shareholders' accounts, the policies of the Fund and
the performance of their investment; providing assistance
and handling transmission of funds in connection with
purchase, redemption and exchange orders for Shares;
providing assistance in connection with changing account
setups and enrolling in various optional fund services;
producing and disseminating shareholder communications
or servicing materials; the ordinary or capital expenses,
such as equipment, rent, fixtures, salaries, bonuses,
reporting and recordkeeping and third party consultancy
or similar expenses, relating to any activity for which
payment is authorized by the Board; and the financing of
any other activity for which payment is authorized by the
Board.
(h) Payments of Distribution or Service Fees to any
organization as of any month-end (or other period-end, as
appropriate) will not exceed the appropriate amount based
on the annual percentages set forth in subparagraphs
(d), (e) and (f) above, based on average net assets of
accounts for which such organization appeared on the
records of the Fund and/or its transfer agent as the
organization of record during the preceding month
(period).
2. This Plan shall not take effect until the Plan, together with
any related agreement(s), has been approved by votes of a majority
of both (a) the Board of Trustees of the Fund, and (b) those
Trustees of the Fund who are not "interested persons" of the Fund
(as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan or any agreements
related to it (the "Rule 12b-1 Trustees") cast in person at a
meeting (or meetings) called for the purpose of voting on the Plan
and such related Agreement(s).
3. This Plan shall remain in effect until August 1, 1997, and shall
continue in effect thereafter so long as such continuance is
specifically approved at least annually in the manner provided for
approval of this Plan in paragraph 2.
4. The Distributor shall provide to the Board of Trustees of the Fund
and the Board shall review, at least quarterly, a written report of
distributionand service-related activities, Distribution Fees,
Service Fees, and the purposes for which such activities were
performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees or by vote of a majority (as defined in
the Act) of the outstanding voting Shares of a Series of the Fund.
6. This Plan may not be amended to increase materially the amount of
compensation payable by a Series with respect to Class A, Class B
or Class C Shares under paragraph 1 hereof unless such amendment
is approved by a vote of at least a majority (as defined in the
Act) of the outstanding voting Shares of that Class of Shares of
the Series. No material amendment to the Plan shall be made unless
approved in the manner provided in paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of
the Fund shall be committed to the discretion of the Trustees who
are not such interested persons.
8. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof,
for a period of not less than six years from the date of the Plan,
any such agreement or any such report, as the case may be, the
first two years in an easily accessible place.
ANNEX A
HOLDERS OF MORE THAN 5% OF ANY CLASS OF A FUND'S SHARES
Alabama Farley L. Berman 10.39%
1234 Champaign Avenue
Anniston, AL 36207
Prudential Securities Inc. 7.32%
FBO Jerry F. Wilson
P.O. Box 300
Addison, AL 35540
Florida Intermediate- Margaret S. Buzzelli 5.45%
Class A 3900 Red Rock Way
Sarasota, FL 34231
Intermediate - Class C PJH Prime Account 5.22%
Arnold W. Schroeder Tr
The Armar Trust B
8570 E. Via Del Palacio
Scottsdale, AZ 85258
Derryl Lehman 6.27%
Charlene M. Lehman Jt Ten
RR 2 Box 365
Berne, IN 46711
NFSC FEBO 6.67%
Lynette S. Arrington
7707 Karem Street
Richmond, VA 23294
Kansas PaineWebber FBO 8.62%
Sonya & Leonard Ropfogel,
Trustees
155 N. Market, Suite 1000
Wichita, KS 67202
Limited Term - Class C Jeramy C. Kammerer, Ttee 5.73%
Jeramy C. Kammerer Rev Trust
5932 E. Quail Track Dr.
Cave Creek, AZ 85331
Louisiana - Class C Edward D. Jones & Co. FAO 5.01%
Earl K. Rush
P.O. Box 2500
Maryland Heights, MO 63043
South Carolina Janece Marsha Garrison 10.33%
1017 Stevens Greek Rd.
Unit K-211
Augusta, GA 30907
Joseph Cristopher Garrison 10.33%
1017 Stevens Greek Rd.
Unit K-211
Augusta, GA 30907
James C. McMillan 8.96%
6 Rock Ledge Ct.
Banner Elk, NC 28604
J.C. Bradford & Co. Cust. FBO 6.38%
Ruth K. Keever
330 Commerce St.
Nashville, TN 37201
Tennessee - Class C Prudential Securities FBO 5.74%
Raymond E. Terry & Amy Terry
Ten Com
P.O. Box 393
Pickwick Dam, TN 38365
FLAGSHIP ALABAMA DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Alabama Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ----------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP ALABAMA DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisor FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |_| |_| |_|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
FOR all WITHHOLD all
|-| |-|
7. To elect eight (8) Trustees to the Board of Trustees of the Fund.
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP COLORADO DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Colorado Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ----------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
- -----------------------------------------------------------------------------
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP COLORADO DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified" |-| |-| |-|
to "non-diversi- fied". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP CONNECTICUT DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Connecticut Double Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ----------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP CONNECTICUT DOUBLE TAX EXEMPT FUND
ONE DAYTON CENTRE, ONE SOUTH MAIN STREET, DAYTON, OH 45402
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3(A)-3(P), 4, 5, 6 AND 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT WITH NUVEEN FOR AGAINST ABSTAIN
ADVISORY CORP. TO TAKE EFFECT UPON THE ACQUISITION OF FLAGSHIP |-| |-| |-|
RESOURCES INC. BY THE JOHN NUVEEN COMPANY.
2. TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE |-| |-| |-|
TRANSACTIONS CONTEMPLATED THEREBY, THE NET EFFECT OF WHICH WOULD BE
TO REORGANIZE THE FUND AS A NEW SERIES OF A NEWLY CREATED INVESTMENT
COMPANY.
3. TO APPROVE CERTAIN CHANGES TO THE TRUST'S INVESTMENT OBJECTIVE AND |-| |-| |-|
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified" |-| |-| |-|
to "non-diversified". Voted on only by Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated., |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP FLORIDA INTERMEDIATE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Florida Intermediate Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ----------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
- -----------------------------------------------------------------------------
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP FLORIDA INTERMEDIATE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP GEORGIA DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Georgia Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- --------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP GEORGIA DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified" |-| |-| |-|
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP KANSAS TRIPLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Kansas Triple Tax Exempt Fund (the "Series") of
Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP KANSAS TRIPLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP KENTUCKY LIMITED TERM MUNICIPAL BOND FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Kentucky Limited Term Municipal Bond Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP KENTUCKY LIMITED TERM MUNICIPAL BOND FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP KENTUCKY TRIPLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Kentucky Triple Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP KENTUCKY TRIPLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Diversification
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP LOUISIANA DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Louisiana Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- --------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP LOUISIANA DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified" |-| |-| |-|
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP MISSOURI DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Missouri Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ----------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP MISSOURI DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified" |-| |-| |-|
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP NEW JERSEY INTERMEDIATE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship New Jersey Intermediate Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- --------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP NEW JERSEY INTERMEDIATE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_
</TABLE>
FLAGSHIP NEW MEXICO DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship New Mexico Double Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- -------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP NEW MEXICO DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP NORTH CAROLINA DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship North Carolina Double Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- --------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP NORTH CAROLINA DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisor FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified" |-| |-| |-|
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP SOUTH CAROLINA DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship South Carolina Double Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP SOUTH CAROLINA DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP TENNESSEE DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Tennessee Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP TENNESSEE DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Diversification
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP WISCONSIN DOUBLE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Wisconsin Double Tax Exempt Fund (the "Series")
of Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- --------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP WISCONSIN DOUBLE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Not Applicable
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP ALL-AMERICAN TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship All-American Tax Exempt Fund (the "Series") of
Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ----------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP ALL-AMERICAN TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Diversification
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP INTERMEDIATE TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Intermediate Double Tax Exempt Fund (the
"Series") of Flagship Tax Exempt Funds Trust (the "Fund") held of record by
the undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP INTERMEDIATE TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Diversification
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
FLAGSHIP LIMITED TERM TAX EXEMPT FUND
OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Bruce P. Bedford and Michael D. Kalbfleisch
as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated below, all
shares of stock of Flagship Limited Term Tax Exempt Fund (the "Series") of
Flagship Tax Exempt Funds Trust (the "Fund") held of record by the
undersigned on October 18, 1996, at the 1996 Special Meeting of
Shareholders of the Fund to be held on December 12, 1996 or any adjournment
thereof.
By signing and dating the lower portion of this card, you authorize the
proxies to vote each proposal as marked, or if not marked to vote "FOR"
each proposal, and to use their discretion to vote any other matter as may
properly come before the meeting. If you do not intend to personally attend
the meeting please complete and mail this card at once in the enclosed
envelope.
|_| Please sign name or names as printed on proxy to
authorize the voting of your shares as indicated. Where
shares are registered with joint owners all joint owners
should sign. Persons signing as executors,
administrators, trustees, etc. should so indicate.
- ---------------------------------------------------------------------------
Signature Signature Date
A Special Meeting of Shareholders will be held on Thursday, December 12,
1996, at 10:00 a.m., Central Time, in the 31st floor conference room of
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois at
which shareholders will be asked to consider and approve several proposals
relating to the proposed merger of Flagship Resources Inc. with The John
Nuveen Company. At this meeting, you will be asked to vote on proposals to
make certain changes to how your fund is organized and managed to
facilitate the integration of the Nuveen and Flagship mutual fund families.
THE BOARD OF YOUR FUND HAS UNANIMOUSLY DETERMINED THAT THESE PROPOSALS ARE
IN THE BEST INTERESTS OF SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF THE
PROPOSALS. THE INTEGRATION OF NUVEEN AND FLAGSHIP SHOULD LEAD TO THE
FOLLOWING BENEFITS:
o Lower operating costs from expanded distribution
o Access to a wider range of investment products
o Greater choices in the method for purchasing shares
WHETHER OR NOT YOU PLAN TO JOIN US, PLEASE COMPLETE, DATE AND SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
1996 SPECIAL MEETING
FLAGSHIP TAX EXEMPT FUNDS TRUST
FLAGSHIP LIMITED TERM TAX EXEMPT FUND
One Dayton Centre, One South Main Street, Dayton, OH 45402
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made this proxy
will be voted FOR proposals 1, 2, 3(A)-3(P), 4, 5, 6 and 7.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To approve a new investment advisory agreement with Nuveen Advisory FOR AGAINST ABSTAIN
Corp. to take effect upon the acquisition of Flagship Resources |-| |-| |-|
Inc. by The John Nuveen Company.
2. To approve an Agreement and Plan of Reorganization and the |-| |-| |-|
transactions contemplated thereby, the net effect of which would be
to reorganize the Fund as a new series of a newly created investment
company.
3. To approve certain changes to the Trust's investment objective and |-| |-| |-|
fundamental policies and investment restrictions. SHAREHOLDERS MAY
VOTE AGAINST ANY PARTICULAR PROPOSED CHANGE BY STRIKING OUT SUCH
PROPOSAL BELOW.
(A) Investment Objective (G) Underwriting (L) Put and Call Options
(B) Investment Assets (H) Real Estate (M) Industry Concentration
(C) Type of Securities (I) Commodities (N) Affiliate Purchases
(D) Borrowing (J) Loans (O) Diversification
(E) Pledges (K) Short Sales and (P) Investment Companies
(F) Senior Securities Margin Purchases
4. To approve a change in the Fund's classification from "diversified"
to "non-diversified". Voted on only by the Colorado, Connecticut,
Georgia, Louisiana, Missouri, and North Carolina Funds.
5. To approve a new Rule 12b-1 Plan with John Nuveen & Co. Incorporated. |-| |-| |-|
6. To approve an amendment to the Declaration of Trust to permit the |-| |-| |-|
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board of Trustees of the Fund. FOR all WITHHOLD all
SHAREHOLDERS MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES BY STRIKING |-| |-|
OUT THE NAME OF SUCH NOMINEE OR NOMINEES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) Robert P. Bremner (C) Lawrence H. Brown (E) Anne E. Impellizzeri (G) Peter R. Sawers
(B) William J. Schneider (D) Timothy R. Schwertfeger (F) Margaret K. Rosenheim (H) Anthony T. Dean
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8. To transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting or any adjournments thereof. |_| |_| |_|
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP ALL-AMERICAN TAX EXEMPT FUND
<SERIES>
<NUMBER> 011
<NAME> CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 245,848,473
<INVESTMENTS-AT-VALUE> 253,413,762
<RECEIVABLES> 7,474,887
<ASSETS-OTHER> 2,136,478
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 263,025,127
<PAYABLE-FOR-SECURITIES> 5,971,503
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,748,081
<TOTAL-LIABILITIES> 7,719,584
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 247,585,234
<SHARES-COMMON-STOCK> 19,497,708
<SHARES-COMMON-PRIOR> 17,189,868
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 155,020
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,565,289
<NET-ASSETS> 255,305,543
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,813,555
<OTHER-INCOME> 0
<EXPENSES-NET> (2,183,487)
<NET-INVESTMENT-INCOME> 13,630,068
<REALIZED-GAINS-CURRENT> 4,802,765
<APPREC-INCREASE-CURRENT> (8,074,381)
<NET-CHANGE-FROM-OPS> 10,358,452
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11,330,827)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,757,928
<NUMBER-OF-SHARES-REDEEMED> (2,979,351)
<SHARES-REINVESTED> 529,263
<NET-CHANGE-IN-ASSETS> 22,496,560
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (4,647,745)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,233,195
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,858,319
<AVERAGE-NET-ASSETS> 245,965,221
<PER-SHARE-NAV-BEGIN> 10.79
<PER-SHARE-NII> 0.61
<PER-SHARE-GAIN-APPREC> (0.12)
<PER-SHARE-DIVIDEND> (0.61)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.67
<EXPENSE-RATIO> 0.83
<AVG-DEBT-OUTSTANDING> 331,600
<AVG-DEBT-PER-SHARE> 0.01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP ALL-AMERICAN
TAX EXEMPT FUND
<SERIES>
<NUMBER> 013
<NAME> CLASS C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 245,848,473
<INVESTMENTS-AT-VALUE> 253,413,762
<RECEIVABLES> 7,474,887
<ASSETS-OTHER> 2,136,478
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 263,025,127
<PAYABLE-FOR-SECURITIES> 5,971,503
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,748,081
<TOTAL-LIABILITIES> 7,719,584
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 247,585,234
<SHARES-COMMON-STOCK> 4,438,578
<SHARES-COMMON-PRIOR> 4,195,458
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 155,020
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,565,289
<NET-ASSETS> 255,305,543
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,813,555
<OTHER-INCOME> 0
<EXPENSES-NET> (2,183,487)
<NET-INVESTMENT-INCOME> 13,630,068
<REALIZED-GAINS-CURRENT> 4,802,765
<APPREC-INCREASE-CURRENT> (8,074,381)
<NET-CHANGE-FROM-OPS> 10,358,452
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,350,784)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,153,142
<NUMBER-OF-SHARES-REDEEMED> (1,035,684)
<SHARES-REINVESTED> 125,662
<NET-CHANGE-IN-ASSETS> 2,071,489
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (4,647,745)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,233,195
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,858,319
<AVERAGE-NET-ASSETS> 245,965,221
<PER-SHARE-NAV-BEGIN> 10.78
<PER-SHARE-NII> 0.55
<PER-SHARE-GAIN-APPREC> (0.12)
<PER-SHARE-DIVIDEND> (0.55)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.66
<EXPENSE-RATIO> 1.37
<AVG-DEBT-OUTSTANDING> 331,600
<AVG-DEBT-PER-SHARE> 0.01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP ALABAMA DOUBLE TAX EXEMPT FUND
<SERIES>
<NUMBER> 231
<NAME> CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 3,184,999
<INVESTMENTS-AT-VALUE> 3,193,695
<RECEIVABLES> 70,756
<ASSETS-OTHER> 29,255
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,293,706
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37,306
<TOTAL-LIABILITIES> 37,306
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,261,958
<SHARES-COMMON-STOCK> 333,444
<SHARES-COMMON-PRIOR> 189,123
<ACCUMULATED-NII-CURRENT> 515
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (14,769)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,696
<NET-ASSETS> 3,256,400
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 144,570
<OTHER-INCOME> 0
<EXPENSES-NET> (10,085)
<NET-INVESTMENT-INCOME> 134,485
<REALIZED-GAINS-CURRENT> 519
<APPREC-INCREASE-CURRENT> (63,639)
<NET-CHANGE-FROM-OPS> 71,365
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (134,144)
<DISTRIBUTIONS-OF-GAINS> (1,200)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 174,099
<NUMBER-OF-SHARES-REDEEMED> (35,361)
<SHARES-REINVESTED> 5,583
<NET-CHANGE-IN-ASSETS> 1,376,833
<ACCUMULATED-NII-PRIOR> 174
<ACCUMULATED-GAINS-PRIOR> (14,088)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,670
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 82,465
<AVERAGE-NET-ASSETS> 2,527,123
<PER-SHARE-NAV-BEGIN> 9.94
<PER-SHARE-NII> 0.53
<PER-SHARE-GAIN-APPREC> (0.17)
<PER-SHARE-DIVIDEND> (0.53)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.77
<EXPENSE-RATIO> 0.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP COLORADO DOUBLE TAX EXEMPT FUND
<SERIES>
<NUMBER> 091
<NAME> CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 32,665,579
<INVESTMENTS-AT-VALUE> 33,627,346
<RECEIVABLES> 521,641
<ASSETS-OTHER> 2,394
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34,151,381
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 514,880
<TOTAL-LIABILITIES> 514,880
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 33,229,675
<SHARES-COMMON-STOCK> 3,436,028
<SHARES-COMMON-PRIOR> 3,515,301
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (554,941)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 961,767
<NET-ASSETS> 33,636,501
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,058,328
<OTHER-INCOME> 0
<EXPENSES-NET> (182,536)
<NET-INVESTMENT-INCOME> 1,875,792
<REALIZED-GAINS-CURRENT> 86,320
<APPREC-INCREASE-CURRENT> (554,501)
<NET-CHANGE-FROM-OPS> 1,407,611
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,893,445)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 416,678
<NUMBER-OF-SHARES-REDEEMED> (586,370)
<SHARES-REINVESTED> 90,419
<NET-CHANGE-IN-ASSETS> (1,255,470)
<ACCUMULATED-NII-PRIOR> 5,397
<ACCUMULATED-GAINS-PRIOR> (641,261)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 173,105
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 445,563
<AVERAGE-NET-ASSETS> 34,526,436
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> 0.54
<PER-SHARE-GAIN-APPREC> (0.13)
<PER-SHARE-DIVIDEND> (0.55)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.79
<EXPENSE-RATIO> 0.55
<AVG-DEBT-OUTSTANDING> 150,200
<AVG-DEBT-PER-SHARE> 0.04
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP CONNECTICUT DOUBLE TAX EXEMPT FUND
<SERIES>
<NUMBER> 101
<NAME> CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 200,073,283
<INVESTMENTS-AT-VALUE> 207,134,067
<RECEIVABLES> 3,682,080
<ASSETS-OTHER> 12,418
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 210,828,565
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,366,706
<TOTAL-LIABILITIES> 1,366,706
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 204,040,272
<SHARES-COMMON-STOCK> 19,768,778
<SHARES-COMMON-PRIOR> 19,580,377
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
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<TABLE> <S> <C>
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<NAME> FLAGSHIP CONNECTICUT
DOUBLE TAX EXEMPT FUND
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> FLAGSHIP FLORIDA INTERMEDIATE DOUBLE TAX EXEMPT FUND
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> FLAGSHIP FLORIDA
INTERMEDIATE DOUBLE
TAX EXEMPT FUND
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<NAME> CLASS C
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<TABLE> <S> <C>
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<CIK> 0000764860
<NAME> FLAGSHIP GEORGIA DOUBLE TAX EXEMPT FUND
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<NAME> CLASS A
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<TABLE> <S> <C>
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<NAME> FLAGSHIP GEORGIA
DOUBLE TAX EXEMPT FUND
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
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<CIK> 0000764860
<NAME> FLAGSHIP INTERMEDIATE TAX EXEMPT FUND
<SERIES>
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<NAME> CLASS A
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<S> <C>
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<TABLE> <S> <C>
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<NAME> FLAGSHIP INTERMEDIATE
TAX EXEMPT FUND
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP KANSAS TRIPLE TAX EXEMPT FUND
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<NAME> CLASS A
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<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<TABLE> <S> <C>
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<NAME> FLAGSHIP NEW MEXICO DOUBLE TAX EXEMPT FUND
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> FLAGSHIP SOUTH CAROLINA DOUBLE TAX EXEMPT FUND
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<NAME> FLAGSHIP TENNESSEE DOUBLE TAX EXEMPT FUND
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DOUBLE TAX EXEMPT FUND
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> FLAGSHIP WISCONSIN DOUBLE TAX EXEMPT FUND
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