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:
(X) Preliminary proxy statement
( ) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FLAGSHIP TAX EXEMPT FUNDS TRUST
______________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
N/A
______________________________________________________________________________
(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
______________________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
N/A
______________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
______________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
N/A
______________________________________________________________________________
(5) Total fee paid::
N/A
______________________________________________________________________________
( ) 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
______________________________________________________________________________
(2) Form, schedule or registration statement no.:
N/A
______________________________________________________________________________
(3) Filing party:
N/A
______________________________________________________________________________
(4) Date filed:
N/A
______________________________________________________________________________
[Flagship Letterhead]
November __ , 1996
Dear Flagship Tax Exempt Funds Trust Shareholder:
We are pleased to announce that 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, at the 31st
floor conference room of John Nuveen & Co. Incorporated, 333
W. Wacker Drive, Chicago, Illinois. Subject to shareholder
approval at this meeting, we plan to merge Flagship's
portfolio management, sales and service operations with
Nuveen's corresponding divisions.
The Board of Trustees of your fund has unanimously
determined that the proposals you will vote on are advisable
and in the best interests of all shareholders. The
reorganizations should lead to the following benefits:
( ) Increased fund administration and
operating efficiencies
( ) Access to a wider range of investment
products
( ) Greater choices in the method for
purchasing shares
The enclosed proxy statement describes these proposals 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,
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 at 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.
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 __, 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, at 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 __, 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, 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, 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, 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, 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 seven Proposals. FOR EACH FUND, APPROVAL OF EACH OF
PROPOSALS 2, 3, 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:
Class A Class C
Fund Shares Shares
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
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 Flagship 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 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 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 capabi-
lities 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 undertaking by Nuveen Advisory
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 .5500 of 1%
million
For the next $125 .5375 of 1%
million
For the next $250 .5250 of 1%
million
For the next $500 .5125 of 1%
million
For the next $1 .5000 of 1%
billion
For assets over $2 .4750 of 1%
billion
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 .5000 of 1%
million
For the next $125 .4875 of 1%
million
For the next $250 .4750 of 1%
million
For the next $500 .4625 of 1%
million
For the next $1 .4500 of 1%
billion
For assets over $2 .4250 of 1%
billion
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
until August 1, 1997, 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.
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 servicing 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.
There is no assurance that the Funds actual expenses after the
Acquisition will be equal to or less than the current actual
expenses of the Funds, and in some cases, are currently estimated
to be higher; 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>
FISCAL YEAR FISCAL YEAR FISCAL YEAR
AVERAGE NET AVERAGE 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 Inter. 9,114,870 N/A 9,114,870 45,699 0.50 0.55 50,269
New Mexico 51,624,198 N/A 51,624,198 258,828 0.50 0.55 284,711
North Carolina 191,287,459 6,782,695 198,070,154 993,064 0.50 0.55 1,083,212
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 TOTAL TOTAL TOTAL DIFFERENCE
CURRENT CURRENT CURRENT CURRENT PRO FORMA PRO 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 156,327 1.72 N/A N/A 142,657 1.56 N/A N/A 0.15 N/A
Inter.
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
* Total columns represent the sum of management fees, 12b-1 fees and other expenses.
** This table assumes that current "other expenses" will be the same as pro forma "other expenses."
</TABLE>
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:
Name and Address Principal Occupation
Bruce P. Bedford . . . . . . . . Chairman and Chief Executive
Chairman, Chief Executive Officer of Flagship, the
Officer and Director Adviser and the Distributor.
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
Richard P. Davis . . . . . . . . President and Chief Operating
President, Chief Operating Officer of Flagship, the
Officer and Director Adviser and the Distributor.
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
Michael D. Kalbfleisch . . . . . Vice President, Chief
Vice President, Chief Financial Financial Officer and
Officer and Treasurer Treasurer of Flagship, the
One Dayton Centre Adviser, and the Distributor.
One South Main Street
Dayton, Ohio 45402-2030
James P. Dunmyer . . . . . . . . Controller of Flagship, the
Controller Adviser and the Distributor.
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
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. Davis is currently a Trustee of the
Flagship Trust.
NAME AND ADDRESS PRINCIPAL OCCUPATION
Bruce P. Bedford . . . . . . . Chairman and Chief
Chairman of the Board Executive Officer of
One Dayton Centre Flagship, the Adviser and
One South Main Street the Distributor
Dayton, Ohio 45402-2030
Richard P. Davis . . . . . . . President and Chief
President Operating Officer of
One Dayton Centre Flagship, the Adviser and
One South Main Street the Distributor
Dayton, Ohio 45402-2030
M. Patricia Madden . . . . . . Vice President, Operations
Vice President of the Distributor
One Dayton Centre
One South Main Street
Dayton, Ohio 45402-2030
Michael D. Kalbfleisch . . . . Vice President, Chief
Treasurer and Secretary Financial Officer and
One Dayton Centre Treasurer of Flagship, the
One South Main Street Adviser and the
Dayton, Ohio 45402-2030 Distributor
LeeAnne G. Sparling . . . . . . Director of Portfolio
Controller Operations of the 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 79 management investment company
portfolios (including the Funds) with approximately $31.6
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
Chairman of the Board and Director, John Nuveen & Co.
Director (Principal Executive Incorporated
Officer)
333 West Wacker Drive
Chicago, Illinois 60606
Anthony T. Dean . . . . . . . . . President and Director, John
President and Director Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
John P. Amboian . . . . . . . . . Executive Vice President,
Executive Vice President John Nuveen & Co.
333 West Wacker Drive Incorporated
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:
* 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.
* Fees - 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 that Nuveen Advisory has undertaken 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.
* 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 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 and 4 is approved.
* 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.
* Continuity of Portfolio Management and Distribution
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.
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.
Before After
------ -----
Flagship Tax Exempt Funds Nuveen Flagship Multistate
Trust Trust I
Flagship Colorado Double Nuveen Flagship Colorado
Tax Exempt Fund Municipal Bond Fund
Flagship Florida Interme- Nuveen Flagship Florida
diate Tax Exempt Fund Intermediate Municipal Bond Fund
Flagship New Mexico Double Nuveen Flagship New Mexico
Tax Exempt Fund Municipal Bond Fund
Flagship Connecticut Double
Tax Exempt Fund
Flagship New Jersey Inter- Nuveen Flagship Multistate Trust
mediate Tax Exempt Fund II
Flagship Alabama Double Tax Nuveen Flagship Connecticut
Exempt Fund Municipal Bond Fund
Flagship Georgia Double Tax Nuveen Flagship New Jersey
Exempt Fund Intermediate Municipal Bond Fund
Flagship Louisiana Double
Tax Exempt Fund
Flagship North Carolina Nuveen Flagship Multistate Trust
Double Tax Exempt Fund III
Flagship South Carolina Nuveen Flagship Alabama Municipal
Double Tax Exempt Fund Bond Fund
Flagship Tennessee Double Nuveen Flagship Georgia Municipal
Tax Exempt Fund Bond Fund
Flagship Kansas Triple Tax Nuveen Flagship Louisiana
Exempt Fund Municipal Bond Fund
Flagship Kentucky Limited Nuveen Flagship North Carolina
Term Municipal Bond Fund Municipal Bond Fund
Flagship Kentucky Triple Nuveen Flagship South Carolina
Tax Exempt Fund Municipal Bond Fund
Flagship Missouri Double Nuveen Flagship Tennessee
Tax Exempt Fund Municipal Bond Fund
Flagship Wisconsin Double
Tax Exempt Fund
Flagship All-American Tax Nuveen Flagship Multistate Trust
Exempt Fund IV
Flagship Intermediate Tax Nuveen Flagship Kansas Municipal
Exempt Fund Bond Fund
Flagship Limited Term Tax Nuveen Flagship Kentucky Limited
Exempt Fund Term Municipal Bond Fund
Flagship Arizona Double Tax Nuveen Flagship Kentucky
Exempt Fund ** Municipal Bond Fund
Flagship Florida Double Tax Nuveen Flagship Missouri
Exempt Fund ** Municipal Bond Fund
Flagship Michigan Triple Nuveen Flagship Wisconsin
Tax Exempt Fund ** Municipal Bond Fund
Flagship Ohio Double Tax
Exempt Fund **
Flagship Pennsylvania Nuveen Flagship Municipal Trust
Triple Tax Exempt Fund ** Nuveen Flagship All-American
Flagship Virginia Double Municipal Bond Fund
Tax Exempt Fund ** Nuveen Flagship Intermediate
Municipal Bond Fund
Nuveen Flagship Limited Term
Municipal Bond Fund
** Series to which this Proxy Statement does not relate;
these series are proposed to be reorganized into various
series of Nuveen Flagship Trusts.
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 substantially 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, 1996.
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 THAT SHAREHOLDERS APPROVE THE
REORGANIZATION AGREEMENT
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.
PROPOSAL 3
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 this proposal 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.
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 (or intangibles
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 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.
Set forth below is a list of the current fundamental
investment policies of the Funds as well the proposed
fundamental investment policies. 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" THIS
PROPOSAL. This proposal will only be implemented if the
Reorganization is approved. These changes are being
voted on as a single proposal because they must either
all be approved or disapproved as a condition to
effecting the Reorganization pursuant to this proxy
statement.
The Current Fund Policies. The Fund has adopted the
following investment restrictions as fundamental
policies, none of which may be changed with respect to
any series of the Fund designated on the date hereof
without the approval of the holders of a majority of such
series' outstanding shares.
No existing series of the Fund may:
(1) 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.
(2) Make loans, except to the extent the purchase
of the debt obligations (including repurchase
agreements) in accordance with the series'
investment objectives and policies are
considered loans.
(3) Issue securities senior to the shares or borrow
money, except from banks for extraordinary or
emergency purposes (and not for leveraging) or
in order to meet unexpectedly heavy redemption
requests in an amount not exceeding 10% of the
value of the series' assets, or purchase any
securities at any time when the total
outstanding borrowings from banks attributable
to such series exceeds 5% of the series' net
assets.
(4) Mortgage, pledge or hypothecate any assets
except as required by law or agreement to
secure borrowings permitted by clause (3)
above.
(5) Purchase or sell real estate, real estate
mortgage loans, real estate investment trust
securities, commodities, commodity contracts or
oil and gas interests, except to the extent
that the tax-exempt and U.S. government
securities the series may invest in would be
considered to be such loans, securities,
contracts or interests and except to the extent
the various hedging instruments the series may
invest in would be considered to be commodities
or commodities contracts.
(6) 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.
(7) 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.
(8) Purchase securities on margin, make short sales
of securities or maintain a net short position
except to the extent the various hedging
instruments the series may invest in or the
options the series may write would be
considered to involve short sales or a net
short position.
(9) Invest more than 25% of its assets in a single
industry. However, as described in the
Prospectus, particular series may from time to
time invest more than 25% of their assets in
one or more particular segments of the tax
exempt obligations market.
Proposed Policies of the Funds. If this Proposal 3
is approved by shareholders of the Fund, the following
will be a fundamental policy of the Fund and may not be
changed without the approval of the holders of a majority
of the shares of the Fund.
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 (or intangibles 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:
* 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"));
* unrated Municipal Obligations of investment grade
quality in the opinion of Adviser; and
* temporary investments within the limitations and for
the purposes described below.
Municipal Obligations rated Baa are considered by
Moody's to be medium grade obligations which lack
outstanding 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.
Furthermore, if this Proposal 3 is approved by the
shareholders of the Fund, the Fund, as a fundamental
policy, may not, without the approval of the holders of a
majority of the shares of the Fund:
(1) Invest in securities other than Municipal
Obligations and temporary investments;
(2) Borrow money, except from banks for temporary
or emergency purposes and not for investment
purposes and then only in an amount not
exceeding (a) 10% of the value of its total
assets at the time of borrowing or (b) one-
third of the value of the Fund's total assets
including the amount borrowed, in order to meet
redemption requests which might otherwise
require the untimely disposition of securities.
While any such borrowings exceed 5% of 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;
(3) Pledge, mortgage or hypothecate its assets,
except that, to secure borrowings permitted by
subparagraph (2) above, it may pledge
securities having a market value at the time of
pledge not exceeding 10% of the value of the
Fund's total assets;
(4) 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
subparagraph (2) above or with respect to
transactions involving futures contracts or the
writing of options within certain limits;
(5) 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;
(6) 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;
(7) 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;
(8) 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;
(9) 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;
(10) 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;
(11) 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;
(12) 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;
(13) If the Fund is diversified, 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.
The current investment policies of the Funds are
similar to the proposed investment policies. The salient
differences include:
a. Diversification. Some of the Funds will be
"diversified", as such term is defined under the
1940 Act. If Proposal 3 is approved, diversified
Funds may not invest more than 5% of their total
assets in securities of any one issuer, except that
this limitation does not apply to securities of the
U.S. government, its agencies and instrumentalities
or to the investment of 25% of the Funds' assets.
The Funds currently have a similar restriction.
However, the 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.
b. 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.
c. AMT Bonds. If Proposal 3 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.
d. Concentration. If Proposal 3 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. 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.
e. Temporary Investments. If Proposal 3 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.
f. Futures and Options. If Proposal 3 is 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.
g. Borrowing. If Proposal 3 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. The Funds are currently limited to
borrowing 10% for any purposes.
h. 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.
i. Other Investment Companies. The Funds currently
have a fundamental policy restricting the Funds from
acquiring securities of other investment companies
(other than in connection with the acquisition of
such companies), except that a series may from time
invest up to 10% of its assets in tax-exempt funds,
including money market funds. Although, if Proposal
3 is approved, the fundamental policies of the Funds
will not have such a restriction, the Funds will,
however, have a non-fundamental policy consistent
with such restriction.
THE BOARD HAS UNANIMOUSLY RECOMMENDED THAT THE
SHAREHOLDERS APPROVE THE CHANGES BY VOTING "FOR" PROPOSAL
3.
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 "non-
diversified 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 that 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 affected 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
Georgia Diversified Non-Diversified
Florida Int Non-Diversified Non-Diversified
Kansas Non-Diversified Non-Diversified
Kentucky Diversified Diversified
Kentucky Ltd. Term Non-Diversified Non-Diversified
Louisiana Diversified Non-Diversified
Missouri Diversified Non-Diversified
NJ Int 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. 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.
This Proposal 4 will only be implemented if the
Reorganization is approved.
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
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 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 distributor's 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.
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 12B-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
Plans and to submit them to the shareholders for their
approval.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE NEW RULE 12B-1 PLANS.
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- BENEFICIALLY OWNED
YEAR BUSINESS LENGTH OF AS OF AUG. 8, 1996
EXPERIENCE SERVICE BY FUND
---------------------- --------- ------------------
Robert P. Bremner (56) Since 1983 Intermediate -868**
Currently a private
investor and management
consultant.
William J. Schneider Since 1983 Ohio - 8,155**
(52) Limited Term -
Currently a senior 2,805**
partner at Miller-
Valentine Partners,
Vice President,
Miller-Valentine
Realty, Inc.
Lawrence H. Brown Nominee None
(61)
Retired in August
1989 as Senior Vice
President of the
Northern Trust
Company
*Timothy R. Schwertfeger Nominee None
(47)
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 Nominee None
(63)
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. Nominee None
Rosenheim (69)
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 Nominee None
(51)
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.
* 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. Bremner $20,500 $25,500
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 representatives, 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,
----------------------------------
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 August
1, 1997, 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:_____________________
Assistant 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 August 7, 1997,
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:_______________________
Assistant 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
December 31, 1996 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 any one year
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.
(c) With respect to Class A Shares, the Distributor shall
pay any Service Fees it receives under the Plan for
which a particular underwriter, dealer, broker, bank or
selling entity having a Dealer Agreement in effect
("Authorized Dealer", which may include the Distributor)
is the dealer of record to such Authorized Dealers to
compensate such organizations for providing services to
shareholders relating to their investment. The
Distributor may retain any Service Fees not so paid.
(d) With respect to the Class B Shares, the Distributor:
(i) shall retain the Distribution Fee to compensate it
for costs associated with the distribution of the
Class B Shares, including the payment of broker
commissions to Authorized Dealers (which may
include the Distributor) who were the dealer of
record with respect to the purchase of those
shares; and
(ii) shall pay any Service Fees it receives under the
Plan for which a particular Authorized Dealer is
the dealer of record (which may include the
Distributor) to such Authorized Dealers to
compensate such organizations for providing
services to shareholders relating to their
investment; provided, however, that the Distributor
shall be entitled to retain, for the first year
after purchase of the Class B Shares, the Service
Fee to the extent that it may have pre-paid the
Service Fee for that period to the Authorized
Dealer of record.
The Distributor may retain any Distribution or
Service Fees not so paid.
(e) With respect to the Class C Shares, the Distributor:
(i) shall pay the Distribution Fee it receives under
the Plan with respect to Class C Shares for which a
particular Authorized Dealer is the dealer of
record (which may include the Distributor) to such
Authorized Dealers to compensate such organizations
in connection with such share sales; provided,
however, that the Distributor shall be entitled to
retain, for the first year after purchase of the
Class C Shares, the Distribution Fee to the extent
that it may have pre-paid the Distribution Fee for
that period to the Authorized Dealer of record; and
(ii) shall pay any Service Fees it receives under the
Plan for which a particular Authorized Dealer is
the dealer of record (which may include the
Distributor) to such Authorized Dealers to
compensate such organizations for providing
services to shareholders relating to their
investment; provided, however, that the Distributor
shall be entitled to retain, for the first year
after purchase of the Class 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.
(f) Services for which such Authorized Dealers may receive
Service Fee payments include any or all of the
following: maintaining account records for shareholders
who beneficially own Shares; answering inquiries
relating to the shareholders' accounts, the policies of
the Fund and the performance of their investment;
providing assistance and handling transmission of funds
in connection with purchase, redemption and exchange
orders for Shares; providing assistance in connection
with changing account setups and enrolling in various
optional fund services; producing and disseminating
shareholder communications or servicing materials; the
ordinary or capital expenses, such as equipment, rent,
fixtures, salaries, bonuses, reporting and recordkeeping
and third party consultancy or similar expenses,
relating to any activity for which payment is authorized
by the Board; and the financing of any other activity
for which payment is authorized by the Board.
(g) Payments of Distribution or Service Fees to any
organization as of any month-end (or other period-end,
as appropriate) will not exceed the appropriate amount
based on the annual percentages set forth in
subparagraphs (c), (d) and (e) 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 distribution- and service-related
activities, Distribution Fees, Service Fees, and the purposes
for which such activities were performed and expenses
incurred.
5. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Trustees or by vote of a majority (as
defined in the Act) of the outstanding voting Shares of 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 Margaret S. Buzzelli 5.45%
Intermediate- 3900 Red Rock Way
Class A Sarasota, FL 34231
Intermediate - PJH Prime Account 5.22%
Class C 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 - Jeramy C. Kammerer, Ttee 5.73%
Class C Jeramy C. Kammerer
Rev Trust
5932 E. Quail Track Dr.
Cave Creek, AZ 85331
Louisiana - Edward D. Jones & Co. 5.01%
Class C FAO
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 - Prudential Securities FBO 5.74%
Class C Raymond E. Terry & Amy Terry
Ten Com
P.O. Box 393
Pickwick Dam, TN
38365
[The following will be inserted on the top of the proxy
card for each Fund]
A special meeting of shareholders will be held on
Thursday, December 12, 1996, at 10:00 a.m., Central Time,
at 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 AGREED 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:
Increased fund administration and operating efficiencies.
Access to a wider range of investment products.
Greater choices in the method of 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.
Please fold at perforation before detaching
---------------------------------------------------------
[PROPOSALS]
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
ALABAMA DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP ALABAMA DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
4. To approve a change in the Fund's FOR ( ) AGAINST ( )
classification from "diversified" to ABSTAIN ( )
"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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
COLORADO DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP COLORADO DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
4. To approve a change in the Fund's FOR ( ) AGAINST ( )
classification from "diversified" to ABSTAIN ( )
"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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
CONNECTICUT DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP CONNECTICUT DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
FLORIDA INTERMEDIATE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP FLORIDA INTERMEDIATE TAX EXEMPT FUND STOCK
(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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
4. To approve a change in the Fund's FOR ( ) AGAINST ( )
classification from "diversified" to ABSTAIN ( )
"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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
GEORGIA DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP GEORGIA DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
KANSAS TRIPLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP KANSAS TRIPLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
KENTUCKY LIMITED TERM MUNICIPAL BOND SERIES OF
FLAGSHIP TAX EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP KENTUCKY LIMITED TERM MUNICIPAL BOND FUND
STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
KENTUCKY TRIPLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP KENTUCKY TRIPLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
4. To approve a change in the Fund's FOR ( ) AGAINST ( )
classification from "diversified" to ABSTAIN ( )
"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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
LOUISIANA DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP LOUISIANA DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
4. To approve a change in the Fund's FOR ( ) AGAINST ( )
classification from "diversified" to ABSTAIN ( )
"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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
MISSOURI DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP MISSOURI DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
NEW JERSEY INTERMEDIATE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP NEW JERSEY INTERMEDIATE TAX EXEMPT FUND STOCK
(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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
NEW MEXICO DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP NEW MEXICO DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
4. To approve a change in the Fund's FOR ( ) AGAINST ( )
classification from "diversified" to ABSTAIN ( )
"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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
NORTH CAROLINA DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP NORTH CAROLINA DOUBLE TAX EXEMPT FUND STOCK
(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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
SOUTH CAROLINA DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP SOUTH CAROLINA DOUBLE TAX EXEMPT FUND STOCK
(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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
TENNESSEE DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP TENNESSEE DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
WISCONSIN DOUBLE TAX EXEMPT SERIES OF FLAGSHIP TAX
EXEMPT FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP WISCONSIN DOUBLE TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
ALL-AMERICAN TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP ALL-AMERICAN TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
INTERMEDIATE TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP INTERMEDIATE DOUBLE TAX EXEMPT FUND STOCK
(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 STOCKHOLDERS 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
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 stockholder.
If no direction is made this proxy will be voted FOR
proposals 1, 2, 3, 4, 5, 6 and 7.
1. To approve a new investment advisory FOR ( ) AGAINST ( )
agreement with Nuveen Advisory Corp. to ABSTAIN ( )
take effect upon the acquisition of
Flagship Resources Inc. by The John
Nuveen Company.
2. To approve an Agreement and Plan of FOR ( ) AGAINST ( )
Reorganization and the transactions ABSTAIN ( )
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 FOR ( ) AGAINST ( )
investment objective and fundamental ABSTAIN ( )
policies and investment restrictions.
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 FOR ( ) AGAINST ( )
John Nuveen & Co. Incorporated. ABSTAIN ( )
6. To approve an amendment to the FOR ( ) AGAINST ( )
Declaration of Trust to permit the ABSTAIN ( )
election of one additional Trustee.
7. To elect eight (8) Trustees to the Board FOR ( ) AGAINST ( )
of Trustees of the Fund. STOCKHOLDERS ABSTAIN ( )
MAY WITHHOLD THEIR VOTE FOR ANY NOMINEES
BY STRIKING OUT THE NAME OF SUCH NOMINEE
OR NOMINEES.
Robert P. Bremner William J. Schneider
Lawrence H. Brown Timothy R.
Schwertfeger Anne E. Impellizzeri
Margaret K. Rosenheim Peter R. Sawers
Anthony T. Dean
8. To transact such other business as may FOR ( ) AGAINST ( )
properly come before the meeting or any ABSTAIN ( )
adjournments thereof.
(OVER)
LIMITED TERM TAX EXEMPT SERIES OF FLAGSHIP TAX EXEMPT
FUNDS TRUST
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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 FLAGSHIP LIMITED TERM TAX EXEMPT FUND STOCK (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 STOCKHOLDERS 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
<TABLE> <S> <C>
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<NAME> FLAGSHIP ALL-AMERICAN TAX EXEMPT FUND
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<INTEREST-INCOME> 15,813,555
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<EXPENSES-NET> (2,183,487)
<NET-INVESTMENT-INCOME> 13,630,068
<REALIZED-GAINS-CURRENT> 4,802,765
<APPREC-INCREASE-CURRENT> (8,074,381)
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<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>
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<NAME> FLAGSHIP ALL-AMERICAN
TAX EXEMPT FUND
<SERIES>
<NUMBER> 013
<NAME> CLASS C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
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<SHARES-COMMON-PRIOR> 4,195,458
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<INTEREST-INCOME> 15,813,555
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<EXPENSES-NET> (2,183,487)
<NET-INVESTMENT-INCOME> 13,630,068
<REALIZED-GAINS-CURRENT> 4,802,765
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<NET-CHANGE-FROM-OPS> 10,358,452
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<DISTRIBUTIONS-OF-INCOME> (2,350,784)
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<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
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<GROSS-EXPENSE> 2,858,319
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<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
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<TOTAL-ASSETS> 3,293,706
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<OTHER-ITEMS-LIABILITIES> 37,306
<TOTAL-LIABILITIES> 37,306
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<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
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<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)
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<GROSS-EXPENSE> 82,465
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<PER-SHARE-NII> 0.53
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<PER-SHARE-NAV-END> 9.77
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
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<NUMBER> 101
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<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
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<NET-INVESTMENT-INCOME> 11,632,542
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<TABLE> <S> <C>
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<NAME> FLAGSHIP CONNECTICUT
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<SERIES>
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<S> <C>
<PERIOD-TYPE> YEAR
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
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<NAME> FLAGSHIP FLORIDA INTERMEDIATE DOUBLE TAX EXEMPT FUND
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<S> <C>
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<DISTRIBUTIONS-OF-INCOME> (235,102)
<DISTRIBUTIONS-OF-GAINS> (22,352)
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<NUMBER-OF-SHARES-SOLD> 366,520
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<AVERAGE-NET-ASSETS> 7,587,430
<PER-SHARE-NAV-BEGIN> 10.05
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<PER-SHARE-GAIN-APPREC> (0.12)
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<PER-SHARE-DISTRIBUTIONS> (0.05)
<RETURNS-OF-CAPITAL> 0.00
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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
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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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<NAME> FLAGSHIP LIMITED TERM
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</TABLE>
<TABLE> <S> <C>
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<CIK> 0000764860
<NAME> FLAGSHIP NORTH
CAROLINA DOUBLE TAX
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<NAME> CLASS C
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP NEW JERSEY INTERMEDIATE DOUBLE TAX EXEMPT FUND
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<NAME> CLASS A
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP NEW MEXICO DOUBLE TAX EXEMPT FUND
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<NAME> CLASS A
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<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP SOUTH CAROLINA DOUBLE TAX EXEMPT FUND
<SERIES>
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<NAME> CLASS A
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP TENNESSEE DOUBLE TAX EXEMPT FUND
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<NAME> CLASS A
<MULTIPLIER> 1
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP TENNESSEE
DOUBLE TAX EXEMPT FUND
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<NAME> CLASS C
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<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000764860
<NAME> FLAGSHIP WISCONSIN DOUBLE TAX EXEMPT FUND
<SERIES>
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<NAME> CLASS A
<MULTIPLIER> 1
<S> <C>
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</TABLE>
