<PAGE>
As filed with the Securities and Exchange Commission on April 27, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[_]
Registration Statement No. 33-8371
[_]
Pre-Effective Amendment No. [_]
--
[X]
Post-Effective Amendment No. 9
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[_]
Registration Statement No. 811-4822
[_]
[X]
Amendment No. 10
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive, Chicago, 60606
Illinois
(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number, Including Area Code: (312) 917-7700
James J. Wesolowski, Esq.-Vice President and Secretary
333 West Wacker Drive
Chicago, Illinois 60606
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
Immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph
[_] (a)(1)
[_]
on May 1, 1995 pursuant to paragraph (b)
[X] 75 days after filing pursuant to par-
agraph (a)(2)
[_]
60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph
(a)(2) of Rule 485.
[_]
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a previ-
ously filed post-effective amendment.
[_]
PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT HAS
ELECTED TO REGISTER AN INDEFINITE NUMBER OF SHARES. A RULE 24F-2 NOTICE FOR THE
REGISTRANT'S FISCAL YEAR ENDING FEBRUARY 28, 1995, WAS FILED ON OR ABOUT APRIL
24, 1995.
CALCULATION OF REGISTRATION FEE FOR SHARES OF
MASSACHUSETTS TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE*
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock, $.01 par value.. 21,108,123 $1.00 $21,108,123 $100.00
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
*Registrant has elected to calculate its filing fee in the manner described in
Rule 24e-2 under the Investment Company Act of 1940. The total amount of secu-
rities redeemed during the previous fiscal year was $181,790,525. The total
amount of redeemed securities used for reduction pursuant to Rule 24e-2(a) or
Rule 24f-2(c) was $160,972,400. The amount of redeemed securities being used
for reduction of the registration fee in this Amendment is $20,818,125.
CALCULATION OF REGISTRATION FEE FOR SHARES OF
NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE*
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock, $.01 par value.. 6,372,368 $1.00 $6,372,368 $100.00
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
*Registrant has elected to calculate its filing fee in the manner described in
Rule 24e-2 under the Investment Company Act of 1940. The total amount of secu-
rities redeemed during the previous fiscal year was $16,400,855. The total
amount of redeemed securities used for reduction pursuant to Rule 24e-2(a) or
Rule 24f-2(c) was $10,318,485. The amount of redeemed securities being used for
reduction of the registration fee in this Amendment is $6,082,370.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CONTENTS
OF
POST-EFFECTIVE AMENDMENT NO. 9
TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FILE NO. 33-8371
AND
AMENDMENT NO. 10
TO
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
FILE NO. 811-4822
This Registration Statement comprises the following papers and contents:
The Facing Sheet
Table of Contents
Cross-Reference Sheet
Part A--The Prospectus
Part B--The Statement of Additional Information
Copy of Annual Report to Shareholders (the financial state-
ments from which are incorporated by reference into the
Statement of Additional Information)
Part C--Other Information
Signatures
Index to Exhibits
Exhibits
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
CROSS REFERENCE SHEET
PART A--PROSPECTUS
<TABLE>
<CAPTION>
ITEM IN PART A
OF FORM N-1A PROSPECTUS LOCATION
-------------- -------------------
<C> <S>
1 Cover Page
2(a) Fund Expenses
(b) Highlights
(c) Highlights
3(a) Financial Highlights
(b) Not applicable
(c) Yield
(d) Not applicable
4(a) General Information--Capital Stock; Investment Objectives of
the Funds; Investment Policies
(b) Investment Objectives of the Funds; Investment Policies
(c) Investment Objectives of the Funds; Investment Policies
5(a) Management of the Funds
(b) Management of the Funds
(c) Management of the Funds
(d) General Information--Custodian, Shareholder Services Agent and
Transfer Agent; How to Purchase Fund Shares
(e) General Information--Custodian, Shareholder Services Agent and
Transfer Agent
(f) Not applicable
(g) Not applicable
5A Not applicable
6(a) General Information--Capital Stock
(b) Not applicable
(c) General Information--Capital Stock
(d) Not applicable
(e) General Information
(f) Dividends and Taxes
(g) Dividends and Taxes
(h) Not applicable
7(a) Management of the Funds
(b) Net Asset Value; How to Purchase Fund Shares
(c) How to Purchase Fund Shares
(d) How to Purchase Fund Shares
</TABLE>
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
CROSS REFERENCE SHEET
PART A--PROSPECTUS
<TABLE>
<CAPTION>
ITEM IN PART A
OF FORM N-1A PROSPECTUS LOCATION
-------------- -------------------
<C> <S>
(e) How to Purchase Fund Shares--Distribution and Service Plans
(f) How to Purchase Fund Shares--Distribution and Service Plans
8(a) How to Redeem Fund Shares
(b) How to Redeem Fund Shares
(c) Not applicable
(d) How to Redeem Fund Shares
9 Not applicable
</TABLE>
<PAGE>
PART A--PROSPECTUS
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
Prospectus
May 1, 1995
NUVEEN MASSACHUSETTS TAX-FREE MONEY MARKET FUND
NUVEEN NEW YORK TAX-FREE MONEY MARKET FUND
Nuveen Tax-Free Money Market Fund, Inc. is an open-end, diversified management
investment company consisting of the two money market funds named above (the
"Funds"). Each Fund represents a separate portfolio, and has the objective of
providing, through investment in high quality short-term Municipal Obligations,
as high a level of current interest income exempt from both federal and desig-
nated state income taxes as is consistent, in the view of the Fund's manage-
ment, with stability of principal and the maintenance of liquidity.
This Prospectus, which should be retained for future reference, sets forth con-
cisely the information about the Funds that a prospective investor should know
before investing. A "Statement of Additional Information" dated May 1, 1995,
containing additional information about the Funds has been filed with the Secu-
rities and Exchange Commission and is incorporated by reference into this Pro-
spectus. A copy of this statement may be obtained without charge by writing to
Nuveen Tax-Free Money Market Fund, Inc., or by calling John Nuveen & Co. Incor-
porated at the number provided below. For more information, call toll-free 800-
621-7227.
An investment in the Funds is neither insured nor guaranteed by the U.S. Gov-
ernment and there can be no assurance that the Funds will be able to maintain a
stable net asset value of $1.00 per share.
Shares of the Funds are not deposits or obligations of, or guaranteed or en-
dorsed by, any bank and are not federally insured by the Federal Deposit Insur-
ance Corporation, the Federal Reserve Board or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
JOHN NUVEEN & CO. INCORPORATED
FOR INFORMATION, CALL TOLL-FREE 800-621-7227
<PAGE>
CONTENTS
<TABLE>
<C> <S>
3 Highlights
- ---------------------------------------------
5 Fund Expenses
- ---------------------------------------------
7 Financial Highlights
- ---------------------------------------------
12 Yield
- ---------------------------------------------
Investment Objectives of the
12 Funds
- ---------------------------------------------
13 Investment Policies
- ---------------------------------------------
22 Management of the Funds
- ---------------------------------------------
24 Dividends and Taxes
- ---------------------------------------------
28 Net Asset Value
- ---------------------------------------------
29 How to Purchase Fund Shares
- ---------------------------------------------
34 How to Redeem Fund Shares
- ---------------------------------------------
38 General Information
- ---------------------------------------------
39 Taxable Equivalent Yield Tables
- ---------------------------------------------
45 Application Form
- ---------------------------------------------
47 Application Instructions
</TABLE>
- --------------------------------------------------------------------------------
2
<PAGE>
HIGHLIGHTS
Nuveen Tax-Free Money Market Fund, Inc. is an open-end,
diversified management investment company whose shares
are issued in separate classes, each covering a separate
designated state portfolio. The Fund currently has two
portfolios outstanding: the Nuveen Massachusetts Tax-
Free Money Market Fund (the "Massachusetts Fund") and
the Nuveen New York Tax-Free Money Market Fund (the "New
York Fund"). Each Fund invests primarily in high quality
short-term Municipal Obligations of a single designated
state, with the objective of providing as high a level
of current interest income exempt both from federal in-
come tax and from the income tax imposed by its desig-
nated state as is consistent, in the view of the Fund's
management, with stability of principal and the mainte-
nance of liquidity. Each Fund will value its investments
at amortized cost and seek to maintain a net asset value
of $1.00 per share. There is no guarantee that this
value will be maintained, or that the objective of the
Funds will be realized. See "Net Asset Value" on page 28
and "Investment Objectives of the Funds" on page 12.
Each Fund intends to qualify, as it has in prior years,
for tax treatment as a regulated investment company and
to satisfy conditions which will enable interest income
that is exempt from federal and designated state income
taxes in the hands of a Fund to retain such tax-exempt
status when distributed to the shareholders of that
Fund. See "Dividends and Taxes" on page 24.
HOW TO
PURCHASEFUND Shares of each of the Funds may be purchased on days on
SHARES which the Federal Reserve Bank of Boston is normally
open for business ("Business Days") at the net asset
value next determined after receipt of an order. The
minimum initial investment is $5,000, and subsequent
purchases must be in amounts of $100 or more. See "How
to Purchase Fund Shares" on page 29, or for further in-
formation, please call Nuveen toll-free at 800-621-7227.
HOW TO REDEEM
FUND SHARES Shareholders may redeem shares at net asset value next
computed after receipt of a redemption request in proper
form on any Business Day. Shareholders may make redemp-
tion requests in writing or, for shareholders of the
Distribution Plan series, by check. Shareholders who
have completed and filed the necessary authorization
form may make redemption requests by telephone with pro-
ceeds to be transferred to a predesignated bank account
or sent to their address of record. There is no redemp-
tion fee. A fee may be charged for wire redemptions. See
"How to Redeem Fund Shares" on page 34.
3
<PAGE>
DIVIDENDS AND
REINVESTMENT Each of the Funds declares dividends daily from its ac-
cumulated net income on shares entitled to such divi-
dends, and distributes such dividends monthly in the
form of additional shares of the respective Funds or, at
the option of the shareholder, in cash. See "Dividends
and Taxes" on page 24.
INVESTMENT
ADVISER AND John Nuveen & Co. Incorporated ("Nuveen") acts as prin-
PRINCIPAL cipal underwriter of the shares of the Funds. The Funds
UNDERWRITER have adopted Distribution and Service Plans under which
qualifying organizations may be paid a fee for servicing
shareholder accounts. A portion of the fees paid under
these Plans is charged to the Distribution Plan and
Service Plan series of shares of the Funds. See "How to
Purchase Fund Shares--Distribution and Service Plans" on
page 32. Nuveen Advisory Corp. ("Nuveen Advisory"), a
wholly-owned subsidiary of Nuveen, is the Funds' invest-
ment adviser and receives an annual management fee of .4
of 1% of the first $500 million of average daily net as-
sets. The management fees will be reduced or Nuveen Ad-
visory will assume certain expenses in amounts necessary
to prevent the total expenses of each series of each
Fund (excluding interest, taxes, fees incurred in ac-
quiring and disposing of portfolio securities and ex-
traordinary expenses) in any fiscal year from exceeding
.55 of 1% of its average daily net asset value. See
"Management of the Funds" on page 22.
INVESTMENTS
Each of the Funds invests primarily in Municipal Obliga-
tions consisting of money market instruments issued by
governmental authorities in the Fund's designated state
(or in certain possessions of the United States) having
ratings or other credit and risk characteristics as de-
scribed on pages 16-21, the income on which is exempt
from federal and designated state income taxes. In addi-
tion, as described below, each Fund may invest a portion
of its assets in taxable "temporary investments." Tempo-
rary investments are limited to obligations issued or
guaranteed by the full faith and credit of the United
States, or certificates of deposit issued by U.S. banks
with assets of at least $1 billion, or "high grade" com-
mercial paper or corporate notes, bonds or debentures
with a remaining maturity of 397 days or less, or repur-
chase agreements in respect of any of the foregoing with
selected dealers, U.S. banks or other recognized finan-
cial institutions, subject to the specific limitations
stated below. The Funds may from time to time invest a
portion of their assets in debt obligations which are
not rated, and in variable rate or floating rate obliga-
tions. Investors are urged to read the descriptions of
these investments and practices set forth in this Pro-
spectus. See "Investment Policies" on page 13.
4
<PAGE>
The information set forth above should be read in con-
junction with the detailed information set forth else-
where in this Prospectus.
FUND EXPENSES
The following tables illustrate all expenses and fees
that a shareholder will incur. The expenses and fees
shown are for the fiscal year ended February 28, 1995.
<TABLE>
<CAPTION>
MASSACHUSETTS FUND
SHAREHOLDER TRANSACTION INSTITUTIONAL DISTRIBUTION SERVICE
EXPENSES SERIES PLAN SERIES PLAN SERIES
-----------------------------------------------------------
<S> <C> <C> <C>
Sales Load Imposed on Pur-
chases None None None
Sales Load Imposed on Rein-
vested Dividends None None None
Redemption Fees None None None
Exchange Fees None None None
<CAPTION>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS)
-----------------------------------------------------------
<S> <C> <C> <C>
Management Fees .40% .40% .40%
12b-1 Fees (or Service
Fees) None .08% .12%
Other Operating Expenses,
After Expense
Reimbursements .07% .07% .03%
---- ---- ----
Total Expenses, After Ex-
pense
Reimbursements .47% .55% .55%
==== ==== ====
<CAPTION>
NEW YORK FUND
SHAREHOLDER TRANSACTION INSTITUTIONAL DISTRIBUTION SERVICE
EXPENSES SERIES PLAN SERIES PLAN SERIES
-----------------------------------------------------------
<S> <C> <C> <C>
Sales Load Imposed on Pur-
chases None None None
Sales Load Imposed on Rein-
vested Dividends None None None
Redemption Fees None None None
Exchange Fees None None None
<CAPTION>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS)
-----------------------------------------------------------
<S> <C> <C> <C>
Management Fees .40% .40% .40%
12b-1 Fees (or Service
Fees) None .04% .04%
Other Operating Expenses,
After Expense
Reimbursements .15% .11% .11%
---- ---- ----
Total Expenses, After Ex-
pense
Reimbursements .55% .55% .55%
==== ==== ====
</TABLE>
5
<PAGE>
The purpose of the foregoing tables is to help you un-
derstand all expenses and fees that you would bear di-
rectly or indirectly as an investor in the Funds.
As discussed under "Management of the Funds" and re-
flected in the tables above, the management fee is re-
duced or Nuveen Advisory assumes certain expenses so as
to prevent the total expenses of each series of each
Fund in any fiscal year from exceeding .55 of 1% of the
average daily net asset value of the series. Without ex-
pense reimbursements, for the fiscal year ended February
28, 1995, other operating expenses would have been .07,
.33 and .09, and total expenses would have been .47, .81
and .61, of 1% of the average daily net assets, of the
Institutional series, the Distribution Plan series and
the Service Plan series, respectively, of the Massachu-
setts Fund. Without expense reimbursements, for the fis-
cal year ended February 28, 1995, other operating ex-
penses would have been 1.74, .35 and .52, and total ex-
penses would have been 2.14, .79 and .96, of 1% of the
average daily net assets, of the Institutional series,
the Distribution Plan series and the Service Plan se-
ries, respectively, of the New York Fund. See "Manage-
ment of the Funds."
The following example illustrates the expenses that you
would pay on a $1,000 investment over various time peri-
ods assuming (1) a 5% annual rate of return and (2) re-
demption at the end of each time period. As noted in the
table above, the Funds charge no redemption fees of any
kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------------------
<S> <C> <C> <C> <C>
MASSACHUSETTS FUND:
Service and Distribution Plan Series $ 6 $18 $31 $69
Institutional Series $ 5 $15 $26 $59
NEW YORK FUND:
All Series $ 6 $18 $31 $69
</TABLE>
This example should not be considered a representation
of past or future expenses or performance. Actual ex-
penses may be greater or less than those shown. This ex-
ample assumes that the percentage amounts listed for
each Fund under Annual Operating Expenses remain the
same in each of the periods.
6
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial information has been derived
from Nuveen Tax-Free Money Market Fund, Inc.'s financial
statements, which have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in
their report appearing in Nuveen Tax-Free Money Market
Fund, Inc.'s Annual Report, and should be read in con-
junction with the financial statements and related notes
appearing in the Annual Report.
7
<PAGE>
Selected data for a share of common stock for each
series of each Fund outstanding throughout each pe-
riod is as follows:
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
--------------------------------------------------------
Net
realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments income capital gains
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MA**
- -------------------------------------------------------------------------------------
Year ended
2/28/95
Service Plan series $1.000 $.025* $-- $(.025) $--
Distribution Plan se-
ries 1.000 .025* -- (.025) --
Institutional series 1.000 .026 -- (.026) --
Year ended
2/28/94
Service Plan series 1.000 .018* -- (.018) --
Distribution Plan se-
ries 1.000 .017* -- (.017) --
Institutional series 1.000 .018 -- (.018) --
Year ended
2/28/93
Service Plan series 1.000 .023* -- (.023) --
Distribution Plan se-
ries 1.000 .023* -- (.023) --
Institutional series 1.000 .023* -- (.023) --
10 months ended
2/29/92
Service Plan series 1.000 .032* -- (.032) --
Distribution Plan se-
ries 1.000 .032* -- (.032) --
Institutional series 1.000 .032 -- (.032) --
Year ended
4/30/91
Service Plan series 1.000 .053* -- (.053) --
Distribution Plan se-
ries 1.000 .053* -- (.053) --
Institutional series 1.000 .053* -- (.053) --
Year ended
4/30/90++ 1.000 .057* -- (.057) --
4/30/89++ 1.000 .050* -- (.050) --
4/30/88++ 1.000 .043* -- (.043) --
12/10/86 to
4/30/87++ 1.000 .016* -- (.016) --
- -------------------------------------------------------------------------------------
</TABLE>
*Reflects the waiver of certain management fees and reimbursement of
certain other expenses by Nuveen Advisory. For additional information
about Nuveen Advisory's fee waivers and expense reimbursements, see
Notes to Financial Statements in the Annual Report.
**Effective for the fiscal year ending April 30, 1991, the Fund has
presented the above per share data by series.
+Annualized.
++Represents combined per share data and ratios for the Service Plan,
Distribution Plan and Institutional series.
8
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
-------------------------------------------
Net
asset Total return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average
period value (in thousands) net assets net assets
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
$1.000 2.53% $27,732 .55%* 2.55%*
1.000 2.53 24,237 .55* 2.55*
1.000 2.61 1,036 .47 2.63
1.000 1.77 38,576 .52* 1.91*
1.000 1.74 27,773 .55* 1.88*
1.000 1.80 3,406 .49 1.93
1.000 2.33 40,214 .55* 2.34*
1.000 2.33 27,993 .55* 2.34*
1.000 2.34 5,325 .55* 2.34*
1.000 3.22 61,476 .55*+ 3.80*+
1.000 3.22 34,509 .55*+ 3.80*+
1.000 3.24 8,917 .53+ 3.82+
1.000 5.30 37,979 .55* 5.25*
1.000 5.30 33,809 .55* 5.25*
1.000 5.30 14,973 .54* 5.26*
1.000 5.70 53,631 .55* 5.67*
1.000 5.00 31,319 .55* 5.18*
1.000 4.29 35,614 .48* 4.30*
1.000 1.60 12,371 .06*+ 4.36*+
- ------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
--------------------------------------------------------
Net
realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments income capital gains
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NY**
- -------------------------------------------------------------------------------------
Year ended
2/28/95
Service Plan series $1.000 $.024* $-- $(.024) $--
Distribution Plan se-
ries 1.000 .024* -- (.024) --
Institutional series 1.000 .023* -- (.023) --
Year ended
2/28/94
Service Plan series 1.000 .015* -- (.015) --
Distribution Plan se-
ries 1.000 .015* -- (.015) --
Institutional series 1.000 .015* -- (.015) --
Year ended
2/28/93
Service Plan series 1.000 .020* -- (.020) --
Distribution Plan se-
ries 1.000 .020* -- (.020) --
Institutional series 1.000 .020* -- (.020) --
10 months ended
2/29/92
Service Plan series 1.000 .029* -- (.029) --
Distribution Plan se-
ries 1.000 .029* -- (.029) --
Institutional series 1.000 .030* -- (.030) --
Year ended
4/30/91
Service Plan series 1.000 .047* -- (.047) --
Distribution Plan se-
ries 1.000 .047* -- (.047) --
Institutional series 1.000 .047* -- (.047) --
Year ended
4/30/90++ 1.000 .054* -- (.054) --
4/30/89++ 1.000 .050* -- (.050) --
4/30/88++ 1.000 .041* -- (.041) --
12/10/86 to
4/30/87++ 1.000 .015* -- (.015) --
- -------------------------------------------------------------------------------------
</TABLE>
*Reflects the waiver of certain management fees and reimbursement of
certain other expenses by Nuveen Advisory. For additional information
about Nuveen Advisory's fee waivers and expense reimbursements, see
Notes to Financial Statements in the Annual Report.
**Effective for the fiscal year ending April 30, 1991, the Fund has
presented the above per share data by series.
+Annualized.
++Represents combined per share data and ratios for the Service Plan,
Distribution Plan and Institutional series.
10
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
-------------------------------------------
Net
asset Total return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average
period value (in thousands) net assets net assets
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
$1.000 2.36% $ 640 .55%* 2.38%*
1.000 2.37 29,798 .55* 2.38*
1.000 2.28 17 .55* 2.38*
1.000 1.51 557 .55* 1.63*
1.000 1.51 27,886 .55* 1.63*
1.000 1.51 17 .55* 1.63*
1.000 2.02 529 .55* 2.04*
1.000 2.02 34,827 .55* 2.04*
1.000 2.02 17 .55* 2.19*
1.000 2.94 1,934 .55*+ 3.51*+
1.000 2.94 45,259 .55*+ 3.51*+
1.000 2.97 17 .55*+ 3.51*+
1.000 4.73 1,653 .55* 4.72*
1.000 4.73 41,446 .55* 4.72*
1.000 4.73 17 .55* 4.72*
1.000 5.36 41,602 .55* 5.34*
1.000 4.95 30,262 .55* 5.05*
1.000 4.10 17,016 .50* 4.07*
1.000 1.50 4,134 .05*+ 4.20*+
- ------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
YIELD
From time to time, Nuveen Tax-Free Money Market Fund,
Inc. may advertise the "yield," "effective yield" and
"taxable equivalent yield" of the various series of each
of its two Funds. The "yield" of a series refers to the
rate of income generated by an investment in the series
over a specified seven-day period, expressed as an
annualized figure. "Effective yield" is calculated simi-
larly except that, when annualized, the income earned by
the investment is assumed to be reinvested. Accordingly,
the effective yield will be slightly higher than the
yield due to this compounding effect. "Taxable equiva-
lent yield" is the yield that a taxable investment would
need to generate in order to equal the series' yield on
an after-tax basis for an investor in a stated tax
bracket (normally assumed to be the bracket with the
highest marginal tax rate). A taxable equivalent yield
quotation for a given series will be higher than the
yield or the effective yield quotations for the series.
Additional information concerning performance figures
appears in the Statement of Additional Information.
Based on the seven-day period ended February 28, 1995,
the current yield, effective yield and taxable equiva-
lent yield (using a combined federal and state income
tax rate of 42.5% for each Fund) for the Massachusetts
and New York Funds were as follows:
<TABLE>
<CAPTION>
TAXABLE
CURRENT EFFECTIVE EQUIVALENT
YIELD YIELD YIELD
------------------------------------------------
<S> <C> <C> <C>
MASSACHUSETTS FUND:
Service and Distribution
Plan Series 3.36% 3.41% 5.84%
Institutional Series 3.39% 3.44% 5.90%
NEW YORK FUND:
All Series 3.33% 3.38% 5.79%
</TABLE>
This Prospectus may be in use for a full year and it can
be expected that during this period there will be mate-
rial fluctuations in yield from that quoted above. For
information as to current yields, please call Nuveen at
800-621-7227.
INVESTMENT OBJECTIVES OF THE FUNDS
Nuveen Tax-Free Money Market Fund, Inc. is an open-end,
diversified management investment company which has the
objective of providing, through investment in profes-
sionally managed portfolios of high quality short-term
Municipal Obligations (described below), as high a level
of current interest income exempt both from federal in-
come tax and from the income tax imposed by each Fund's
designated state as is consistent,
12
<PAGE>
in the view of the management of Nuveen Tax-Free Money
Market Fund, Inc., with stability of principal and the
maintenance of liquidity. Each Fund's investment objec-
tive is a fundamental policy of the Fund and may not be
changed without the approval of the holders of a major-
ity of the shares of that Fund. There is a risk in all
investments and, therefore, there can be no assurance
that the objective of any Fund will be achieved.
INVESTMENT POLICIES
Each Fund pursues its investment objective through the
investment policies described below. These policies are
essentially the same for each Fund, except that each
Fund will primarily invest in short-term Municipal Obli-
gations of issuers in the Fund's designated state (or in
Municipal Obligations issued by governmental authorities
in certain possessions of the United States to the ex-
tent interest on such obligations is exempt from taxa-
tion by the states pursuant to federal law), in order
that the interest income on such short-term Municipal
Obligations is exempt from that state's income tax as
well as federal income tax. Because of the different
credit characteristics of governmental authorities in
each of the designated states and because of differing
supply and demand factors for each state's short-term
Municipal Obligations, there may be differences in the
yield on each Fund and the degree of market and finan-
cial risk to which each Fund is subject. Ordinarily,
short-term Municipal Obligations in which the Funds will
invest offer lower yields than Municipal Obligations
with longer maturities, although the latter present
greater market risk (i.e., the risk that their market
values will be affected by changes in interest rates).
Similarly, the fact that the Funds invest in high qual-
ity Municipal Obligations tends to reduce the yield as
compared with investments in lower quality securities,
but the higher quality securities present less credit
risk (i.e., the risk that principal and interest will
not be paid when due). Each Fund will, as a fundamental
policy, pursue its investment objective by investing at
least 80% of its net assets in its designated state's
short-term Municipal Obligations, except during tempo-
rary defensive periods.
PORTFOLIO
INVESTMENTS Each Fund's investment assets are eligible for purchase
by money market funds under applicable guidelines of the
Securities and Exchange Commission ("SEC"), and consist
of (1) short-term Municipal Obligations which at the
time of purchase are rated within the two highest long-
term grades by Moody's Investors Service, Inc.
("Moody's")--Aaa or Aa, or by Standard & Poor's Corpora-
tion ("S&P")--AAA or AA or, in the case of munic
13
<PAGE>
ipal notes, rated MIG-1, MIG-2, VMIG-1 or VMIG-2 by
Moody's or SP-1 or SP-2 by S&P, or, in the case of mu-
nicipal commercial paper, rated Prime-1 or Prime-2 by
Moody's or A-1 or A-2 by S&P; (2) unrated short-term Mu-
nicipal Obligations which, in the opinion of Nuveen Ad-
visory, have credit characteristics equivalent to the
foregoing and are deemed to be of "high quality" by
Nuveen Advisory; and (3) temporary investments, within
the limitations and for the purposes as stated below. To
the extent that unrated Municipal Obligations may be
less liquid, there may be somewhat greater risk in pur-
chasing unrated Municipal Obligations than in purchasing
comparable but rated Municipal Obligations.
The investments of the Funds will be limited to obliga-
tions maturing within 397 days from the date of acquisi-
tion or which have variable or floating rates of inter-
est (which rates vary with changes in specified market
rates or indices such as bank prime rate or tax-exempt
money market index). The Funds may invest in such vari-
able and floating rate instruments even if they carry
stated maturities in excess of 397 days, provided that
(1) certain conditions contained in rules and regula-
tions issued by the SEC under the Investment Company Act
of 1940 are satisfied, and (2) they carry demand fea-
tures that meet the conditions of applicable SEC rules
and permit the Funds to recover the full principal
amount thereof upon specified notice. The right of each
Fund to obtain payment at par on a demand instrument
upon demand could be affected by events occurring be-
tween the date the Fund elects to redeem the instrument
and the date redemption proceeds are due which affect
the ability of the issuer to pay the instrument at par
value.
The types of short-term Municipal Obligations in which
the Funds may invest include bond anticipation notes,
tax anticipation notes, revenue anticipation notes, con-
struction loan notes issued to provide construction fi-
nancing for specific projects, and bank notes issued by
governmental authorities to commercial banks as evidence
of borrowings. Since these short-term securities fre-
quently serve as interim financing pending receipt of
anticipated funds from the issuance of long-term bonds,
tax collections or other anticipated future revenues, a
weakness in an issuer's ability to obtain such funds as
anticipated could adversely affect the issuer's ability
to meet its obligations on those short-term securities.
Each Fund may obtain stand-by commitments with respect
to Municipal Obligations it purchases. Under a stand-by
commitment (often referred to as a put), the party issu-
ing the commitment agrees in a writing delivered to the
Fund to purchase at the Fund's option the Municipal Ob-
ligation at an agreed-upon price on certain dates or
within a specific period. Each Fund intends to acquire
stand-by commitments if needed to facilitate port
14
<PAGE>
folio liquidity and to help maintain a constant net as-
set value of $1.00 per share. Each Fund may purchase
stand-by commitments for cash or pay a higher price for
portfolio securities which are acquired subject to such
a commitment (thus reducing the yield to maturity other-
wise available for the same securities). A stand-by com-
mitment would not be exercised if the market value of
the underlying security exceeded the exercise price.
Each Fund has obtained commitments (each, a "Commit-
ment") from MBIA Insurance Corporation ("MBIA") with re-
spect to certain designated bonds held by each Fund for
which credit support is furnished by one of the banks
("Approved Banks") approved by MBIA under its estab-
lished credit approval standards. Under the terms of a
Commitment, if a Fund were to determine that certain ad-
verse circumstances relating to the financial condition
of the Approved Bank had occurred, the Fund could cause
MBIA to issue a "while-in-fund" insurance policy cover-
ing the underlying bonds; after time and subject to fur-
ther terms and conditions, the Fund could obtain from
MBIA an "insured-to-maturity" insurance policy as to the
covered bonds. Each type of insurance policy would in-
sure payment of interest on the bonds and payment of
principal at maturity. Although such insurance would not
guarantee the market value of the bonds or the value of
Fund shares, each Fund believes that its ability to ob-
tain insurance for such bonds under such adverse circum-
stances will enable the Fund to hold or dispose of such
bonds at a price at or near their par value.
Except during temporary defensive periods, each Fund
will invest at least 80% of its net assets in short-term
Municipal Obligations, and not more than 20% of its net
assets in "temporary investments," the income from which
may be subject to its designated state's income tax or
to both federal and state income taxes, including the
federal alternative minimum tax. During extraordinary
circumstances, a Fund may invest more than 20% of its
net assets in temporary investments for defensive pur-
poses. The Funds to date have never purchased, and have
no present intention to purchase, temporary investments.
Each Fund will invest in temporary investments with re-
maining maturities of one year or less which, in the
opinion of Nuveen Advisory, are of "high grade" quality.
The foregoing restrictions and other limitations dis-
cussed herein will apply only at the time of purchase of
securities and will not be considered violated unless an
excess or deficiency occurs or exists immediately after
and as a result of an acquisition of securities.
The SEC has proposed amendments to Rule 2a-7 under the
Investment Company Act of 1940 that would, among other
things, further limit the
15
<PAGE>
types of securities eligible for purchase by tax-exempt
money market funds. If these amendments are adopted, the
Funds will make any necessary adjustments to their port-
folios to ensure compliance with Rule 2a-7.
Because investments of the Funds will consist of securi-
ties with relatively short maturities, the Funds can ex-
pect to have a high portfolio turnover rate. The Funds
will maintain a dollar-weighted average portfolio matu-
rity of not more than 90 days. During the fiscal year
ended February 28, 1995, the average maturity of the
Massachusetts Fund ranged from 16 to 50 days and the av-
erage maturity of the New York Fund ranged from 17 to 45
days.
MUNICIPAL Municipal Obligations include debt obligations issued by
OBLIGATIONS states, cities and local authorities to obtain funds for
various public purposes, including the construction of
such public facilities as airports, bridges, highways,
housing, hospitals, mass transportation, schools,
streets and water and sewer works. Other public purposes
for which Municipal Obligations may be issued include
the refinancing of outstanding obligations, the ob-
taining of funds for general operating expenses and for
loans to other public institutions and facilities. In
addition, certain industrial development bonds and pol-
lution control bonds may be included within the term Mu-
nicipal Obligations if the interest paid thereon quali-
fies as exempt from federal income tax. Municipal Obli-
gations in which each Fund will primarily invest are is-
sued by that Fund's designated state and cities and lo-
cal authorities in that state or are issued by posses-
sions of the United States within Section 103(c) of the
Internal Revenue Code (such as Puerto Rico), and bear
interest that, in the opinion of bond counsel to the is-
suer, is exempt from federal income tax and from income
tax imposed by the designated state.
Two principal classifications of Municipal Obligations
are "general obligation" and "revenue" bonds. General
obligation bonds are secured by the issuer's pledge of
its full faith, credit and taxing power for the payment
of principal and interest. Revenue bonds are payable
only from the revenues derived from a particular facil-
ity or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue
source. Industrial development and pollution control
bonds are in most cases revenue bonds and do not gener-
ally constitute the pledge of the credit or taxing power
of the issuer of such bonds. There are, of course, vari-
ations in the security of Municipal Obligations, both
within a par-ticular classification and between classi-
fications, depending on numerous factors.
16
<PAGE>
Municipal Obligations can be further classified between
bonds and notes. Bonds are issued to raise longer-term
capital but, when purchased by the Funds, will have 397
days or less remaining until maturity or will have a
variable or floating rate of interest (see below). These
issues may be either general obligation bonds or revenue
bonds.
Notes are short-term instruments with a maturity of two
years or less. Most notes are general obligations of the
issuer and are sold in anticipation of a bond sale, col-
lection of taxes or receipt of other revenues. Payment
of these notes is primarily dependent upon the issuer's
receipt of the anticipated revenues.
Municipal Obligations also include very short-term
unsecured, negotiable promissory notes, issued by
states, municipalities, and their agencies which are
known as "tax-exempt commercial paper" or "municipal pa-
per." Payment of principal and interest on issues of mu-
nicipal paper may be made from various sources, to the
extent that funds are available therefrom. There is a
limited secondary market for issues of municipal paper.
While these various types of notes as a group represent
the major portion of the tax-exempt note market, other
types of notes are occasionally available in the market-
place, and the Funds may invest in such other types of
notes to the extent consistent with their investment ob-
jectives and limitations. Such notes may be issued for
different purposes and with different security than
those mentioned above.
The yields on Municipal Obligations are dependent on a
variety of factors, including the condition of the gen-
eral money market and the Municipal Obligation market,
the size of a particular offering, the maturity of the
obligation and the rating of the issue. The ratings of
Moody's and S&P represent their opinions as to the qual-
ity of the Municipal Obligations which they undertake to
rate. It should be emphasized, however, that ratings are
general and are not absolute standards of quality. Con-
sequently, Municipal Obligations with the same maturity,
coupon and rating may have different yields while obli-
gations of the same maturity and coupon with different
ratings may have the same yield. The market value of
outstanding Municipal Obligations will vary with changes
in prevailing interest rate levels and as a result of
changing evaluations of the ability of their issuers to
meet interest and principal payments.
The Funds may purchase and sell Municipal Obligations on
a when-issued or delayed delivery basis. When-issued and
delayed delivery transactions arise when securities are
purchased or sold with payment and delivery beyond the
regular settlement date. (When-issued transactions nor-
17
<PAGE>
mally settle within 30 to 45 days.) On such transactions
the payment obligation and the interest rate are fixed
at the time the buyer enters into the commitment to pur-
chase. The commitment to purchase securities on a when-
issued or delayed delivery basis may involve an element
of risk because the value of the securities is subject
to market fluctuation. No interest accrues to the pur-
chaser prior to settlement of the transaction, and at
the time of delivery the market value may be less than
cost.
Obligations of issuers of Municipal Obligations are sub-
ject to the provisions of bankruptcy, insolvency and
other laws affecting the rights and remedies of credi-
tors. In addition, the obligations of such issuers may
become subject to the laws enacted in the future by Con-
gress, state legislatures or referenda extending the
time for payment of principal and/or interest, or impos-
ing other constraints upon enforcement of such obliga-
tions or upon municipalities to levy taxes. There is
also the possibility that, as a result of legislation or
other conditions, the power or ability of any issuer to
pay, when due, the principal of and interest on its Mu-
nicipal Obligations may be materially affected.
ECONOMIC FACTORS Because each Fund will concentrate its investment in Mu-
PERTAINING TO nicipal Obligations issued by governmental authorities
DESIGNATED STATES within a single designated state, it may be affected by
political, economic or regulatory factors that may im-
pair the ability of issuers in that state to pay inter-
est on or to repay the principal of their debt obliga-
tions. Set forth below are summaries of economic factors
that bear upon the risk of investing in Municipal Obli-
gations issued by public authorities in the designated
states that are the subject of currently offered Funds.
This information was obtained from official statements
of issuers located in the respective designated states
as well as from other publicly available official docu-
ments and statements. Nuveen Tax-Free Money Market Fund,
Inc. has not independently verified any of the informa-
tion contained in such statements and documents. Addi-
tional considerations relating to these risks are con-
tained in the Statement of Additional Information.
Massachusetts. In recent years, the Commonwealth of Mas-
sachusetts and certain of its public bodies and munici-
palities, particularly the City of Boston, have faced
serious financial difficulties which have affected the
credit standing and borrowing abilities of Massachusetts
and these respective entities and may have contributed
to higher interest rates on debt obligations. As a re-
sult of these difficulties, the rating agencies lowered
the credit ratings on Massachusetts general obligation
bonds several times during 1989 and 1990. Since then,
both S&P and Moody's have upgraded Massachusetts general
obligation bonds several times. As of the
18
<PAGE>
date of this Prospectus, the uninsured general obliga-
tion bonds carry a rating of A+ by S&P and A1 by
Moody's. Since 1988, there has been a significant slow-
down in the Commonwealth's economy, as indicated by a
rise in unemployment, a slowing of its per capita income
growth and a trend in declining state revenues. In fis-
cal 1991, the Commonwealth's expenditures for state gov-
ernment programs exceeded current revenues, and although
fiscal 1992, 1993 and 1994 results indicate that reve-
nues exceeded expenditures, no assurance can be given
that lower than expected tax revenues will not resume
and continue. The continuation of, or an increase in,
the financial difficulties of the Commonwealth and its
public bodies and municipalities, or the development of
a financial crisis relating to these entities, could re-
sult in declines in the market value of, or default on,
existing obligations issued by governmental authorities
in the state of Massachusetts, including Municipal Obli-
gations held by the Massachusetts Fund. Many factors, in
addition to those cited above, do or may have a bearing
upon the financial condition of the Commonwealth, in-
cluding social and economic conditions, many of which
are not within the control of the Commonwealth.
New York. New York State has historically been one of
the wealthiest states in the nation. For decades, howev-
er, the State's economy has grown more slowly than that
of the nation as a whole, gradually eroding the State's
relative economic affluence. Statewide, urban centers
have experienced significant changes involving migration
of the more affluent to the suburbs and an influx of
generally less affluent residents. Regionally, the older
Northeast cities have suffered because of the relative
success that the South and the West have had in at-
tracting people and business. New York City has faced
greater competition as other major cities have developed
financial and business resources which make them less
dependent on the specialized services traditionally
available almost exclusively in New York City, which has
had an additional negative impact on New York City's re-
covery. The State has for many years had a very high
State and local tax burden relative to other states. The
burden of State and local taxation, in combination with
the many other causes of regional economic dislocation,
has contributed to the decisions of some businesses and
individuals to relocate outside, or not locate within,
the State.
Economic recovery started considerably later in the
State than in the nation as a whole, due in part to a
significant retrenchment in the banking and financial
services industry, cutbacks in defense spending, and an
overbuilt real estate market. The State has projected
the rate of economic growth to slow within New York dur-
ing 1995 as the expansion of the national economy moder-
ates.
19
<PAGE>
The State ended its 1993-94 fiscal year with an operat-
ing surplus of approximately $1.0 billion. The State
Legislature enacted the State's 1994-95 fiscal year bud-
get on June 7, 1994, more than two months after the
start of that fiscal year.
As of February 1, 1995, the updated 1994-95 State Finan-
cial Plan (the "Plan") projected total general fund re-
ceipts and disbursements of $33.3 billion and $33.5 bil-
lion, respectively, representing reductions in receipts
and disbursements of $1 billion and $743 million, re-
spectively, from the amounts set forth in the 1994-95
State budget, as adopted by the legislature. The Plan
projected a General Fund balance of approximately $157
million at the close of the 1994-95 fiscal year.
The Governor issued a proposed State budget for the
1995-96 fiscal year on February 1, 1995, which projected
a balanced general fund and receipts and disbursements
of $32.5 billion and $32.4 billion, respectively. As of
April 17, 1995, the State legislature had not yet en-
acted, nor had the Governor and the legislature reached
an agreement on, the budget for the 1995-96 fiscal year
commencing on April 1, 1995. The delay in the enactment
of the budget may negatively affect certain proposed ac-
tions and reduce projected savings.
Following enactment of the State's 1994-95 fiscal year
budget, New York City adopted a 1995 fiscal year budget
on June 21, 1994, which provided for $31.6 billion in
spending. However, following adoption of that New York
City budget, unexpected budget gaps totaling approxi-
mately $2.0 billion for the 1995 fiscal year were iden-
tified and the Mayor has called for additional spending
cuts. In January 1995, in response to the City's plan to
borrow $120 million to refund debt due in February with-
out imposing additional cuts, S&P placed the City on
negative credit watch and indicated that it would con-
sider a possible downgrade of the City's general obliga-
tion debt in April 1995. On February 2, 1995, the Mayor
outlined his proposed $30.5 billion budget for the 1996
fiscal year which included $2.7 billion of deficit re-
duction measures almost half of which are dependent upon
State actions in the 1996 fiscal year. The Governor and
the legislature have not agreed upon the level of State
aid to the City during the 1996 fiscal year and there
can be no assurances that further cuts will not be nec-
essary to close additional budget gaps once a state bud-
get is adopted. If State aid in later years is less than
the level projected in the Mayor's proposal, projected
savings may be negatively impacted and the Mayor may be
required to propose significant additional spending re-
ductions or tax increases to balance the City's budget
for the 1996 and later fiscal years. If the State, the
State Agencies, New York City, other municipalities or
school districts were to suffer serious finan
20
<PAGE>
cial difficulties jeopardizing their respective access
to the public credit markets, or increasing the risk of
a default, the market price of Municipal Obligations is-
sued by such entities could be adversely affected.
CERTAIN
FUNDAMENTAL Each of the Funds, as a fundamental policy, may not,
INVESTMENT without the approval of the holders of a majority of the
POLICIES outstanding shares of that Fund, (1) invest more than 5%
of its total assets in securities of any one issuer, ex-
cept that this limitation shall not apply to securities
of the United States government, its agencies and in-
strumentalities or to the investment of 25% of such
Fund's assets; (2) borrow money, except from banks for
temporary or emergency purposes and then only in an
amount not exceeding (a) 10% of the value of the Fund's
total assets at the time of borrowing or (b) one-third
of the value of the Fund's total assets including the
amount borrowed, in order to meet redemption requests
which might otherwise require the untimely disposition
of securities; (3) pledge, mortgage or hypothecate its
assets, except that, to secure permitted borrowings for
temporary or emergency purposes, it may pledge securi-
ties having a market value at the time of the pledge not
exceeding 10% of the value of the Fund's assets; (4)
make loans, other than by entering into repurchase
agreements and through the purchase of Municipal Obliga-
tions or temporary investments in accordance with its
investment objective, policies and limitations; (5) in-
vest more than 5% of its total assets in securities of
unseasoned issuers which, together with their predeces-
sors, have been in operation for less than three years;
(6) invest more than 10% of its assets in repurchase
agreements maturing in more than seven days, "illiquid"
securities (such as non-negotiable CD's) and securities
without readily available market quotations; or (7) in-
vest more than 25% of its total assets in securities of
issuers in any one industry, provided, however, that
such limitation shall not be applicable to municipal
bonds issued by governments or political subdivisions of
governments, and obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. For
purposes of the foregoing sentence, the "issuer" of a
security shall be deemed to be the entity whose assets
and revenues are committed to the payment of principal
and interest on such security, provided that the guaran-
tee of an instrument will be considered a separate secu-
rity (subject to certain exclusions allowed under the
Investment Company Act of 1940). It is a fundamental
policy of each of the Funds, which cannot be changed
without the approval of the holders of a majority of
shares of such Fund, that a Fund will not hold securi-
ties of a single bank, including securities backed by a
letter of credit of such bank, if such holdings would
exceed 10% of the total assets of such Fund. The forego-
ing restrictions and other limitations discussed herein
will apply only at the time of purchase of securities
and will not be considered violated unless an excess
21
<PAGE>
or deficiency occurs or exists immediately after and as
a result of an acquisition of securities.
Under the Investment Company Act of 1940, the Funds may
not purchase portfolio securities from any underwriting
syndicate of which Nuveen is a member except under cer-
tain limited conditions set forth in Rule 10f-3.
For a more complete description of the fundamental in-
vestment policies summarized above and the other funda-
mental investment policies applicable to each of the
Funds, see the Statement of Additional Information. The
fundamental investment policies of a Fund, together with
its investment objective, and other fundamental policies
cannot be changed without approval by holders of a "ma-
jority of the Fund's outstanding voting shares." As de-
fined by the Investment Company Act of 1940, this means
the vote of (i) 67% or more of the shares present at a
meeting, if the holders of more than 50% of the shares
are present or represented by proxy or (ii) more than
50% of the shares, whichever is less.
MANAGEMENT OF THE FUNDS
The management of Nuveen Tax-Free Money Market Fund,
Inc., including general supervision of the duties per-
formed for each Fund by Nuveen Advisory under the In-
vestment Management Agreement, is the responsibility of
the Board of Directors of Nuveen Tax-Free Money Market
Fund, Inc.
Nuveen Advisory acts as the investment adviser for and
manages the investment and reinvestment of the assets of
each Fund. Its address is 333 West Wacker Drive, Chica-
go, Illinois 60606. Nuveen Advisory also administers the
Funds' business affairs, provides office facilities and
equipment and certain clerical, bookkeeping and adminis-
trative services, and permits any of its officers or em-
ployees to serve without compensation as directors or
officers of Nuveen Tax-Free Money Market Fund, Inc. if
elected to such positions.
For the services and facilities furnished by Nuveen Ad-
visory, each Fund has agreed to pay an annual management
fee as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET MANAGEMENT
VALUE FEES
------------------------------
<S> <C>
For the first $500 million .400 of 1%
For the next $500 million .375 of 1%
For assets over $1 billion .350 of 1%
</TABLE>
22
<PAGE>
All fees and expenses are accrued daily and deducted be-
fore payment of dividends to investors. In addition to
the management fee of Nuveen Advisory, each Fund pays
all other costs and expenses of its operations and a
portion of the Funds' general administrative expenses
allocated in proportion to the net assets of each Fund.
Included in the expenses paid by the Funds is each
Fund's share of payments under its Distribution and
Service Plans.
The management fees will be reduced or Nuveen Advisory
will assume certain expenses of each series of each Fund
in amounts necessary to prevent the total expenses (in-
cluding Nuveen Advisory's management fees and the Dis-
tribution Plan series and the Service Plan series of
each Fund's share of payments under the Distribution and
Service Plans, but excluding interest, taxes, fees in-
curred in acquiring and disposing of portfolio securi-
ties and, to the extent permitted, extraordinary ex-
penses) of each series in any fiscal year from exceeding
.55 of 1% of the average daily net asset value of such
series. For the fiscal year ended February 28, 1995,
management fees amounted to .40 of 1% of the average
daily net assets of each Fund. For the fiscal year ended
February 28, 1995, net of applicable expense reimburse-
ments, total expenses were .47, .55 and .55 of 1% of the
average daily net assets of the Institutional series,
the Distribution Plan series and the Service Plan se-
ries, respectively, of the Massachusetts Fund, and .55
of 1% of the average daily net assets of each series of
the New York Fund. Without expense reimbursements, total
expenses for the fiscal year ended February 28, 1995
would have been .47, .81 and .61 of 1% of the average
daily net assets of the Institutional series, the Dis-
tribution Plan series and the Service Plan series, re-
spectively, of the Massachusetts Fund, and 2.14, .79 and
.96 of 1% of the average daily net assets of the Insti-
tutional series, the Distribution Plan series and the
Service Plan series, respectively, of the New York Fund.
Nuveen Advisory was organized in 1976 and since then has
exclusively engaged in the management of municipal secu-
rities portfolios. It currently serves as investment ad-
viser to 21 open-end municipal securities portfolios
(the "Nuveen Mutual Funds") and 55 exchange-traded mu-
nicipal securities funds (the "Nuveen Exchange-Traded
Funds"). Each of these invests substantially all of its
assets in investment grade quality, tax-free municipal
securities. As of the date of this Prospectus, Nuveen
Advisory manages approximately $30 billion in assets
held by the Nuveen Mutual Funds and the Nuveen Exchange-
Traded Funds.
Nuveen Advisory is a wholly-owned subsidiary of John
Nuveen & Co. Incorporated ("Nuveen"), 333 West Wacker
Drive, Chicago, Illinois 60606, the oldest and largest
investment banking firm (based on number
23
<PAGE>
of employees) specializing in the underwriting and dis-
tribution of tax-exempt securities. Nuveen, the princi-
pal underwriter of the Funds' shares, is sponsor of the
Nuveen Tax-Exempt Unit Trust, a registered unit invest-
ment trust. It is also the principal underwriter for the
Nuveen Mutual Funds, and served as co-managing under-
writer for the shares of the Nuveen Exchange-Traded
Funds. Over 1,000,000 individuals have invested to date
in Nuveen's tax-exempt funds and trusts. Founded in
1898, Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 75% owned by The St.
Paul Companies, Inc. ("St. Paul"). St. Paul is located
in St. Paul, Minnesota, and is principally engaged in
providing property-liability insurance through subsidi-
aries.
DIVIDENDS AND TAXES
All of the net income attributable to the respective se-
DIVIDENDS ries of each Fund is declared on each calendar day as a
dividend on shares entitled to such dividend. Net income
of each Fund series consists of all interest income ac-
crued and discounts earned on portfolio assets (adjusted
for amortization of premium or discount on securities
when required for federal income tax purposes), plus or
minus any realized gains or losses on portfolio instru-
ments since the previous dividend declaration, less es-
timated expenses incurred subsequent to the previous
dividend declaration. For the Service Plan series and
Distribution Plan series of the Funds, expenses will in-
clude, among other things, payments to banks or other
organizations and securities dealers pursuant to Service
Agreements and Distribution Agreements with Nuveen. See
"Distribution and Service Plans" below for additional
information on these expenses. It is not expected that
realized or unrealized gains or losses on portfolio in-
struments will be a meaningful factor in the computation
of the net income of the Funds. Dividends are paid
monthly and are reinvested in additional shares of the
Fund on which the dividends are declared at net asset
value or, at the shareholder's option, paid in cash. Net
realized long-term capital gains, if any, will be paid
not less frequently than once a year within 30 days of
the end of the Nuveen Tax-Free Money Market Fund, Inc.'s
fiscal year and reinvested in additional shares of the
Fund on which such gains are paid at net asset value un-
less the shareholder has elected to receive capital
gains in cash. The Funds do not anticipate realizing any
significant long-term capital gains or losses.
FEDERAL INCOME
TAX MATTERS Each Fund intends to qualify, as it has in prior years,
under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), for
24
<PAGE>
tax treatment as a regulated investment company. Each
fund also intends to satisfy conditions which will ena-
ble interest from Municipal Obligations, which is exempt
from federal income tax in the hands of the Fund, to re-
tain such tax-exempt status when distributed to the
shareholders of the Fund.
Distributions by each Fund of net income received, if
any, from taxable temporary investments and net short-
term capital gains, if any, realized by the Fund, will
be taxable to shareholders as ordinary income. So long
as a Fund qualifies as a regulated investment company
under the Code, distributions to shareholders will not
qualify for the dividends received deduction for corpo-
rations. If in any year a Fund should fail to qualify
under Subchapter M for tax treatment as a regulated in-
vestment company, the Fund would incur a regular corpo-
rate federal income tax upon its taxable income for that
year, and the entire amount of distributions to share-
holders would be taxable to shareholders as ordinary in-
come.
The Code provides that interest on indebtedness incurred
or continued to purchase or carry shares of a Fund is
not deductible. Under rules used by the Internal Revenue
Service for determining when borrowed funds are consid-
ered used for the purpose of purchasing or carrying par-
ticular assets, the purchase of shares may be considered
to have been made with borrowed funds even though such
funds are not directly traceable to the purchase of
shares.
Tax-exempt income is taken into account in calculating
the amount of social security and railroad benefits that
may be subject to federal income tax.
The Funds may invest in the type of private activity
bonds the interest on which is not federally tax-exempt
to persons who are "substantial users" of the facilities
financed by such bonds or who are "related persons" of
such substantial users. Accordingly, the Funds may not
be appropriate investments for shareholders who are con-
sidered either a "substantial user" or a "related per-
son" thereof. Such persons should consult their tax ad-
visers before investing in the Funds.
Although the Funds have not done so and have no present
intention to do so, the Funds may also invest in private
activity bonds, the interest on which is a specific item
of tax preference for purposes of computing the alterna-
tive minimum tax on corporations and individuals. This
type of private activity bond includes most industrial
and housing revenue bonds. Shareholders whose tax lia-
bility is determined under the alternative minimum tax
will be taxed on their share of the Fund's exempt-inter-
est divi
25
<PAGE>
dends that were paid from income earned on these bonds.
In addition, the alternative minimum taxable income for
corporations is increased by 75% of the difference be-
tween an alternative measure of income ("adjusted cur-
rent 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 in-
cluded in calculating a corporation's adjusted current
earnings.
Each Fund is required in certain circumstances to with-
hold 31% of taxable dividends and certain other payments
paid to non-corporate holders of shares who have not
furnished to the Fund their correct taxpayer identifica-
tion number (in the case of individuals, their social
security number) and certain certificates, or who are
otherwise subject to back-up withholding.
STATE INCOME TAX
MATTERS Massachusetts. Individual shareholders of the Massachu-
setts Fund who are subject to Massachusetts income taxa-
tion will not be required to include that portion of
their federally tax-exempt dividends in Massachusetts
gross income which the Massachusetts Fund clearly iden-
tifies as directly attributable to interest earned on
Municipal Obligations issued by governmental authorities
in Massachusetts which are specifically exempted from
income taxation in Massachusetts, provided such divi-
dends are identified in a timely written notice mailed
to shareholders of the Massachusetts Fund, or interest
earned on obligations of certain U.S. territories or
possessions. Similarly, such shareholders will not be
required to include in Massachusetts gross income capi-
tal gain dividends designated by the Massachusetts Fund
to the extent such dividends are attributable to gains
derived from Municipal Obligations issued by Massachu-
setts governmental authorities and are specifically ex-
empted from income taxation in Massachusetts, provided
such dividends are identified in a timely written notice
mailed to shareholders of the Massachusetts Fund. Last-
ly, any dividends of the Massachusetts Fund attributable
to interest on U.S. obligations exempt from state taxa-
tion and included in Federal gross income will not be
included in Massachusetts gross income, provided such
dividends are identified in a timely written notice
mailed to shareholders of the Massachusetts Fund. Dis-
tributions of dividends derived from any net income re-
ceived from taxable temporary investments and any net
short-term capital gains realized by the Massachusetts
Fund will be included in shareholders' Massachusetts in-
come.
With respect to corporate shareholders of the Massachu-
setts Fund that are subject to the Massachusetts excise
tax, dividends received from the Massachusetts Fund are
includable in gross income and generally may not be
26
<PAGE>
deducted by corporate shareholders in computing their
net income, and the net worth base of an intangible
property corporation includes the corporate sharehold-
ers' shares in the Massachusetts Fund.
New York. Individual shareholders of the New York Fund
who are subject to New York State or New York City per-
sonal income taxation will not be required to include in
their New York adjusted gross income that portion of
their exempt-interest dividends (as determined for fed-
eral income tax purposes) which the New York Fund
clearly identifies as directly attributable to interest
earned on Municipal Obligations issued by governmental
authorities in New York ("New York Municipal Obliga-
tions") and which are specifically exempted from per-
sonal income taxation in New York State or New York
City, or interest earned on obligations of U.S. territo-
ries or possessions that is exempt from taxation by the
states pursuant to federal law. Distributions to indi-
vidual shareholders of dividends derived from interest
that does not qualify as exempt-interest dividends (as
determined for federal income tax purposes), distribu-
tions of exempt-interest dividends (as determined for
federal income tax purposes) which are derived from in-
terest on Municipal Obligations issued by governmental
authorities in states other than New York State, and
distributions derived from interest earned on federal
obligations will be included in their New York adjusted
gross income as ordinary income. Distributions to indi-
vidual shareholders of the New York Fund of capital gain
dividends (as determined for federal income tax purpos-
es) will be included in their New York adjusted gross
income as long-term capital gains. Distributions to in-
dividual shareholders of the New York Fund of dividends
derived from any net income received from taxable tempo-
rary investments and any net short-term capital gains
realized by the New York Fund will be included in their
New York adjusted gross income as ordinary income.
For purposes of New York State franchise taxation (or
New York City general corporation taxation), entire in-
come will include dividends received from the New York
Fund (as determined for federal income tax purposes),
and investment capital will include a corporate share-
holder's shares of the New York Fund. If a shareholder
of the New York Fund is subject to the New York City un-
incorporated business tax, income and gains derived from
the New York Fund will be subject to such tax, except
for exempt-interest dividends (as determined for federal
income tax purposes) which the New York Fund clearly
identifies as directly attributable to interest earned
on New York Municipal Obligations.
27
<PAGE>
The foregoing is a general and abbreviated summary of
the provisions of the Code and Treasury Regulations and
tax provisions of designated states presently in effect
as they directly govern the taxation of each Fund or its
shareholders. These provisions are subject to change by
legislative or administrative action, and any such
change may be retroactive with respect to Fund transac-
tions. Shareholders are advised to consult their own tax
advisers for more detailed information concerning the
taxation of each Fund and the federal, state and local
tax consequences to its shareholders.
NET ASSET VALUE
Net asset value of the shares of each Fund will be de-
termined by United States Trust Company of New York,
Nuveen Tax-Free Money Market Fund, Inc.'s custodian, as
of 12:00 noon, eastern time on each day on which the
Federal Reserve Bank of Boston is normally open for
business (a "Business Day") and on any other day during
which there is a sufficient degree of trading in the
Funds' portfolio securities such that the current net
asset value of the Funds' shares might be materially af-
fected by changes in the value of the portfolio securi-
ties. The net asset value per share of each Fund will be
computed by dividing the sum of the value of the portfo-
lio securities held by such Fund, plus any cash or other
assets, less liabilities, by the total number of shares
of such Fund outstanding at such time.
Each Fund will seek to maintain a net asset value of
$1.00 per share. In this connection, portfolio securi-
ties in each Fund are valued on the basis of their amor-
tized cost. This method values a security at its cost on
the date of purchase and thereafter assumes a constant
amortization to maturity of any discount or premium, re-
gardless of the impact of fluctuating interest rates on
the market value of the security. For a more complete
description of the amortized cost valuation method and
its effect on existing and prospective shareholders of
the Funds, see the Statement of Additional Information.
There can be no assurance that each Fund will be able at
all times to maintain the net asset value of $1.00 per
share.
28
<PAGE>
HOW TO PURCHASE FUND SHARES
IN GENERAL Shares of each of the Funds may be purchased by resi-
dents of the Fund's designated state on Business Days
(as defined under "Net Asset Value") at the net asset
value which is next computed after receipt of the order,
provided payment in federal funds is received as de-
scribed herein.
Shares of each Fund are issued in three series: (i) the
"Service Plan" series intended for purchase by or
through banks and other organizations ("Service Organi-
zations") who have agreed to perform certain services
for their customers who are shareholders of this series
of the Fund, (ii) the "Distribution Plan" series in-
tended for purchase by or through securities dealers who
have entered into Distribution Agreements with Nuveen
with respect to the distribution of shares of the Fund
and (iii) the "Institutional" series intended for pur-
chase by trustees, bank trust departments, corporations
and investment bankers or advisers. The Distribution
Plan was adopted by the Funds in accordance with Rule
12b-1 under the 1940 Act which permits an investment
company to bear distribution expenses (as that term is
construed by the Securities and Exchange Commission) in
connection with certain services provided by securities
dealers. The Service Plan, although not a Rule 12b-1
plan, is a comparable agreement entered into with Serv-
ice Organizations who provide certain administrative
services. There is no sales load on purchases of shares
of any of the three series of each Fund. However, shares
of the Service Plan series and shares of the Distribu-
tion Plan series are charged with a portion of fees paid
to Service Organizations and securities dealers, respec-
tively, pursuant to Service Agreements and Distribution
Agreements with Nuveen. The allocation of a portion of
these fees to the Service Plan series and to the Distri-
bution Plan series of shares of each Fund will be
charged against the yield to holders of such shares,
which will result in a lower yield to these holders as
compared with the holders of the Institutional series of
the same Fund. These fees are described below under the
caption "Distribution and Service Plans" and in the
Statement of Additional Information. Shares of the Serv-
ice Plan series and the Distribution Plan series enjoy
certain exclusive voting rights on matters related to
the allocation of fees to shares of these two series.
Except for the allocation of these fees and the special
voting rights related thereto, shares of each of the
three series of each Fund are identical.
Purchases of shares of the Funds by Federal Reserve wire
are recommended. However, purchases may also be made by
bank wire, Federal Reserve draft or check. The minimum
initial investment in any of the Funds is $5,000, and
subsequent investments must be in amounts of $100 or
more.
29
<PAGE>
In order to maximize the earnings on its assets, each of
the Funds strives to be invested as completely as prac-
ticable. A Fund is normally required to make settlement
in federal funds for securities purchased. Accordingly,
orders for shares of one of the Funds may be made, and
become effective on Business Days, as follows:
Purchase By To open an account, call Nuveen toll-free at 800-858-
Telephone 4084 to obtain an account number, control number and in-
structions. Information concerning the account such as
name, address and social security or tax identification
number will be taken over the telephone. Payment may be
made by wire transfer to the United Missouri Bank of
Kansas City, N.A. as follows:
United Missouri Bank of Kansas City, N.A.
ABA #101000695
Nuveen Tax-Free Money Market Fund, Inc.
[Designated State] Fund
Account No. _________________________________ (see above)
Account Name: ___________________________________________
Control No. ________________________________ (see above).
The investor will be required to complete an application
form and mail it to Nuveen after making the initial tel-
ephone purchase. Subsequent investments may be made by
following the same telephone order and wire transfer
procedure.
If an order is received by Nuveen by 12:00 noon, eastern
time, and federal funds are received by United Missouri
Bank of Kansas City, N.A. on the same day by 3:00 p.m.,
eastern time, the order is effective that day. If both
the order and federal funds are not received by the
times specified above, the order will become effective
the following Business Day.
Purchase By Mail
To open an account, complete the application form and
mail it with a check or Federal Reserve draft to Nuveen
Tax-Free Money Market Fund, Inc., [Designated State]
Fund, P.O. Box 5330, Denver, Colorado 80217-5330. Subse-
quent investments may be made by mailing a check with
the investor's account number to the above address. The
order becomes effective as soon as the check or draft is
converted to federal funds. This typically occurs one
Business Day after receipt but may take longer.
To open an account through a securities dealer, bank or
Purchase Through other Service Organization, investors should send money
a Securities to that organization for transmission to the Funds and
Dealer or Service furnish it with the information required in the applica-
Organization tion form. Each of the Funds has Distribution and Serv-
ice Plans
30
<PAGE>
pursuant to which payments are made, in the case of the
Distribution Plan series to dealers who provide assis-
tance in distributing shares of such series of the Fund,
and in the case of the Service Plan series to Service
Organizations who provide assistance in servicing share-
holder accounts of such series. See "Distribution and
Service Plans."
Purchase By Unitholders of Nuveen Unit Investment Trusts ("UITs")
Reinvestment of may purchase shares of the Fund for the designated state
Nuveen Unit of which they are residents by automatically reinvesting
Investment Trust distributions from their Nuveen UIT. To obtain informa-
Distributions tion on share purchases through investment of Nuveen UIT
distributions, check the applicable box on the enclosed
Application Form or call Nuveen toll-free at 800-237-
0910.
COMMENCEMENT OF Shares are deemed to have been purchased and are enti-
DIVIDENDS tled to dividends commencing on the day the purchase or-
der becomes effective.
OTHER SHAREHOLDER
OPTIONS Automatic Deposit Plan. Once you have established a Fund
account, you may make regular investments in your Fund
in an amount of $25 or more each month by authorizing
Shareholder Services, Inc. ("SSI") to draw preauthorized
checks on your bank account. There is no obligation to
continue payments and you may terminate your participa-
tion at any time at your discretion. No charge is made
in connection with this Plan, and there is no cost to
the Funds. To obtain an application form for the Auto-
matic Deposit Plan, check the applicable box on the en-
closed Application Form or call Nuveen toll-free at 800-
621-7227.
Payroll Direct Deposit Plan. Once you have established
an account with the Funds, you may, with your employer's
permission, make regular investments in shares of the
Funds of $25 or more per pay period by authorizing your
employer to deduct such amount from your paycheck. There
is no obligation to continue payments and participation
may be terminated at any time at your discretion. No
charge is made for this service and there is no cost to
the Funds. To obtain an application form for the Payroll
Direct Deposit Plan, check the applicable box on the en-
closed Application Form or call Nuveen toll-free at
800-621-7227.
Exchange Privilege. You may exchange shares of a Fund
for shares of any other open-end management investment
company with reciprocal exchange privileges advised by
Nuveen Advisory (the "Nuveen Funds"), provided that the
Nuveen Fund into which shares are to be exchanged is of-
fered in your state of residence and that the shares to
be exchanged have been held by you for a period of at
least 15 days. Shares of Nuveen Funds
31
<PAGE>
purchased subject to a front-end sales charge may be ex-
changed for shares of the Funds or any other Nuveen Fund
at the next determined net asset value without any
front-end sales charge. Shares of any Nuveen Fund pur-
chased through dividend reinvestment or through rein-
vestment of Nuveen Tax-Exempt Unit Trust distributions
(and any dividends thereon) may be exchanged for shares
of the Funds or any other Nuveen Fund without a front-
end sales charge. Exchanges of shares with respect to
which no front-end sales charge has been paid will be
made at the public offering price, which may include a
front-end sales charge, unless a front-end sales charge
has previously been paid on the investment represented
by the exchanged shares (i.e., the shares to be ex-
changed were originally issued in exchange for shares on
which a front-end sales charge was paid), in which case
the exchange will be made at net asset value. Because
certain other Nuveen funds may determine net asset value
and therefore honor purchase or redemption requests on
days when the Fund does not (generally, Martin Luther
King's Birthday, Columbus Day and Veterans Day), ex-
changes of shares of one of those funds for shares of
the Fund may not be effected on such days.
The total value of shares being exchanged must at least
equal the minimum investment requirement of the Nuveen
Fund into which they are being exchanged. Exchanges are
made based on the relative dollar values of the shares
involved in the exchange, and will be effected by re-
demption of shares of the Nuveen Fund held and purchase
of the shares of the other Nuveen Fund. For federal in-
come tax purposes, any such exchange constitutes a sale
and purchase of shares and may result in capital gain or
loss. Before exercising any exchange, you should obtain
the Prospectus for the Nuveen Fund into which shares are
to be exchanged and read it carefully. If the registra-
tion of the account for the Fund you are purchasing is
not exactly the same as that of the fund account from
which the exchange is made, written instructions from
all holders of the account from which the exchange is
being made must be received, with signatures guaranteed
by a member of an approved Medallion Guarantee Program
or in such other manner as may be acceptable to the
Fund. You may also make exchanges by telephone if a pre-
authorized exchange authorization, as provided on the
account Application Form, is on file with SSI, Nuveen
Tax-Free Money Market Fund's shareholder service agent.
The exchange privilege may be modified or discontinued
at any time.
DISTRIBUTION AND Each of the Funds has adopted a Distribution Plan pursu-
SERVICE PLANS ant to Rule 12b-1 under the 1940 Act and a Service Plan
(collectively, the "Plans"), pursuant to which the Dis-
tribution Plan series and the Service Plan series
32
<PAGE>
of such Fund and Nuveen pay, in equal amounts, fees to
securities dealers and Service Organizations for serv-
ices rendered in the distribution of shares of such Fund
or the servicing of shareholder accounts. Such services
may include, among other things, establishing and main-
taining shareholder accounts, processing purchase and
redemption transactions, arranging for bank wires, per-
forming sub-accounting, answering shareholder inquiries
and such other services as Nuveen may request. Nuveen
will enter into Distribution or Service Agreements with
organizations who render such services. Service payments
to such organizations in amounts of up to .25 of 1% per
year of average assets of serviced accounts will be paid
one-half by the respective series of each Fund and one-
half by Nuveen.
The Plans continue in effect from year to year so long
as such continuance is approved at least annually by a
vote of the Board of Directors and a vote of the non-in-
terested directors. The Plans may not be amended to in-
crease materially the cost which the Distribution Plan
series or the Service Plan series of the Funds may bear
for distribution and services, respectively, without the
approval of the non-interested directors and the share-
holders of the affected series of that Fund. Any other
material amendments of the Plans must be approved by the
non-interested directors. Beneficial owners of shares of
the Distribution Plan series and the Service Plan series
of the Funds should read this prospectus in light of the
terms governing their accounts with securities dealers
and Service Organizations, respectively.
ADDITIONAL
INFORMATION An account will be maintained for each shareholder of
record in the Funds by SSI, the Funds' transfer agent.
Share certificates will be issued only upon written re-
quest of the shareholder to SSI. No certificates are is-
sued for fractional shares. The Funds reserve the right
to reject any purchase order and to waive or increase
minimum investment requirements.
A change in registration or transfer of shares held in
the name of a broker/dealer can only be effected by an
order in good form from the broker/dealer acting on be-
half of the investor. Broker/dealers are encouraged to
open single master accounts. However, some
broker/dealers may wish to use the shareholder service
agent's sub-accounting system to minimize their internal
recordkeeping requirements. A broker/dealer or other in-
vestor requesting shareholder servicing or accounting
other than the master account or sub-accounting service
offered by the Funds will be required to enter into a
separate agreement with the agent for these services for
a fee to be determined in accordance with the level of
services to be furnished.
33
<PAGE>
Subject to the rules and regulations of the SEC, each
Fund reserves the right to suspend the continuous offer-
ing of its shares at any time, but such suspension shall
not affect the shareholder's right of redemption as de-
scribed below.
HOW TO REDEEM FUND SHARES
IN GENERAL
Upon receipt of a proper redemption request on a Busi-
ness Day, each of the Funds will redeem its shares at
their next determined net asset value. You may use the
telephone redemption, check redemption, or the regular
redemption procedures discussed hereafter. The redemp-
tion method employed will determine when funds will be
available to you.
If shares to be redeemed were purchased by check, each
Fund may delay transmittal of redemption proceeds until
such time as it has assured itself that payment in fed-
eral funds has been collected for the purchase of such
shares. Verification that a shareholder's check has been
cleared for payment may take as long as 15 days; accord-
ingly, drafts requiring redemption of shares purchased
by check that have been held for 15 days or less may not
be honored. There is no delay when shares being redeemed
were purchased by wiring federal funds.
TELEPHONE
REDEMPTION Redemption requests with respect to shares in non-cer-
tificate form may be made by calling Nuveen at 800-858-
4084. To redeem by telephone, you must have elected this
option on the account application form and have returned
the form to Nuveen before telephone redemption requests
can be accepted.
Telephone redemptions payable by wire are limited to re-
demptions of $1,000 or more. If a redemption request is
received by Nuveen by 12:00 noon, eastern time, the
shares to be redeemed do not earn income on the day the
request is received, but proceeds are ordinarily wired
on the same day to the commercial bank account desig-
nated on the your application form. The wiring of re-
demption proceeds may be delayed one business day if the
Federal Reserve Bank of Boston or the Federal Reserve
Bank of New York is closed on the day redemption pro-
ceeds would ordinarily be wired under the foregoing pro-
cedures.
If the redemption request is received by Nuveen after
12:00 noon, eastern time, and prior to 4:00 p.m., east-
ern time, the shares to be redeemed earn income on the
day the request is received and proceeds are ordinarily
34
<PAGE>
wired the next business day. United States Trust Company
of New York, Nuveen Tax-Free Money Market Fund Inc.'s
custodian, reserves the right to charge a fee of approx-
imately $5 for the cost of wire transferred redemptions.
The amount of this fee is subject to change.
Telephone redemptions payable by check permit sharehold-
ers whose account address has not changed within the
last sixty days to redeem shares worth $25,000 or less
by calling the Funds' Transfer Agent. Telephone requests
can be made by the shareholder or any person. Redemption
checks will be issued only in the name of the share-
holder of record and will be mailed to the address of
record. If the telephone request is received prior to
2:00 p.m., eastern time, the shares to be redeemed earn
income on the day the request is made and the redemption
check will be mailed the next business day. For requests
received after 2:00 p.m., eastern time, the shares to be
redeemed earn income through the next business day and
the check will be mailed on the second business day.
In order to establish multiple accounts, or to change
the account or accounts designated to receive wire re-
demption proceeds, or the address of record for the re-
ceipt of telephone redemption by check proceeds, a writ-
ten request specifying the change must be sent to
Nuveen. This request must be signed by each shareholder
with each signature guaranteed by a member of an ap-
proved Medallion Guarantee Program, or in such other
manner as may be acceptable to the Funds. Further docu-
mentation may be required from corporations, executors,
trustees or personal representatives.
The Funds reserve the right to refuse a telephone re-
demption and, at their option, may limit the timing,
amount or frequency of these redemptions. This procedure
may be modified or terminated at any time, on 30 days'
notice, by the Funds. The Funds, SSI and Nuveen will not
be liable for following telephone instructions reasona-
bly believed to be genuine. The Fund employs procedures
reasonably designed to confirm that telephone instruc-
tions are genuine. These procedures include recording
all telephone instructions and requiring up to three
forms of identification prior to acting upon a caller's
instructions. If a Fund does not follow reasonable pro-
cedures for protecting shareholders against loss on tel-
ephone transactions, it may be liable for any losses due
to unauthorized or fraudulent telephone instructions.
CHECK REDEMPTION Shareholders of the Distribution Plan series of any Fund
may request that the Fund provide them with drafts ("Re-
demption Checks") drawn on the Fund's account. These Re-
demption Checks may be made payable to the order of any
person in an amount of $500 or more, and dividends are
35
<PAGE>
earned until the Redemption Check clears. Redemption
Checks clear through the United Missouri Bank of Kansas
City, N.A. (the "Bank") and are subject to the same
rules and regulations that the Bank applies to checking
accounts.
When a Redemption Check is presented, a sufficient num-
ber of full and fractional shares in the shareholder's
account will be redeemed to cover the amount of the Re-
demption Check. Shares for which stock certificates have
been issued will not be available for redemption by the
use of Redemption Checks. There must be sufficient
shares in the shareholder's account to cover the amount
of each Redemption Check written or the check will be
returned. Checks should not be used to close an account.
Shareholders wishing to use Redemption Checks must com-
plete the appropriate section of the application form
and submit the enclosed signature card.
This check redemption privilege may be modified or ter-
minated at any time by Nuveen Tax-Free Money Market
Fund, Inc. or the Bank. The Check redemption feature
does not constitute a bank checking account.
WRITTEN
REDEMPTION Shareholders may redeem their shares by sending a writ-
ten request for redemption directly to Nuveen Tax-Free
Money Market Fund, Inc., c/o Shareholder Services, Inc.,
P.O. Box 5330, Denver, Colorado 80217-5330, accompanied
by duly endorsed certificates, if issued. Requests for
redemption and share certificates, if issued, must be
signed by each shareholder and, if the redemption pro-
ceeds exceed $25,000 or are payable other than to the
shareholder of record at the address of record (which
address may not have been changed in the preceding 60
days), the signature must be guaranteed by a member of
an approved Medallion Guarantee Program or in such other
manner as may be acceptable to the Funds. Under normal
circumstances payment will be made by check and mailed
within one Business Day (and in no event more than seven
days) after receipt of a redemption request in proper
form.
REDEMPTION Fund shareholders may also redeem shares through their
THROUGH SERVICE accounts with service organizations in accordance with
ORGANIZATIONS procedures established by each such service organiza-
tion. The Funds have no redemption charge, but service
organizations may impose transaction fees or other
charges relating to the redemption of Fund shares. Indi-
vidual shareholders should determine from their service
organizations the procedures and charges, if any, that
govern redemptions.
36
<PAGE>
AUTOMATIC
WITHDRAWAL PLAN If you own Fund shares currently worth at least $10,000,
you may establish an Automatic Withdrawal Plan by com-
pleting an application form for the Plan. You may obtain
an application form by checking the applicable box on
the enclosed Application Form or by calling Nuveen toll-
free at 800-621-7227. The Plan permits you to request
periodic withdrawals on a monthly, quarterly, semi-an-
nual or annual basis in an amount of $50 or more. All
shares of the Funds you own will be accumulated in the
Plan, with a sufficient number of shares being redeemed
periodically to meet the requested withdrawal payments.
Depending upon the size of the payments requested under
the Plan, redemptions for the purpose of making such
payments may reduce or even exhaust your account. With-
drawals under this Plan should not, therefore, be con-
sidered a yield on investment. An Automatic Withdrawal
Plan may be terminated at any time by you or the Funds.
To obtain an application form for the Automatic With-
drawal Plan, check the applicable box on the enclosed
Application Form or call Nuveen toll-free at
800-621-7227.
REDEMPTION IN
KIND Each Fund has committed to pay in cash all redemption
requests made by each shareholder during any 90 day pe-
riod up to the lesser of $250,000 or 1% of the net asset
value of such Fund at the beginning of such period. This
commitment is irrevocable without the prior approval of
the SEC and is a fundamental policy of each Fund which
may not be changed without shareholder approval. In the
case of redemption requests in excess of such amounts,
the Board of Directors reserves the right to have the
Funds make payment in whole or in part in securities or
other assets of such Fund in case of an emergency or any
time a cash distribution would impair the liquidity of
such Fund to the detriment of the existing shareholders.
In this event, the securities would be valued in the
same manner as securities of such Fund are valued. If
the recipient were to sell such securities, he or she
would incur brokerage charges.
OTHER PRACTICES The Funds may suspend the right of redemption or delay
payment more than seven days (a) during any period when
the New York Stock Exchange is closed (other than cus-
tomary weekend and holiday closings), (b) when trading
in the markets the Funds normally utilizes is restrict-
ed, or an emergency exists as determined by the SEC so
that disposal of a Fund's investments or determination
of its net asset value is not reasonably practicable, or
(c) for such other periods as the SEC by order may per-
mit for protection of the shareholders of the Funds.
37
<PAGE>
GENERAL INFORMATION
Investor Inquiries. Investor inquiries may be made di-
rectly of the Funds in writing or by calling John Nuveen
& Co. Incorporated, Nuveen Tax-Free Money Market Fund,
Inc.'s distributor, toll-free at 800-621-7227.
Custodian, Shareholder Services Agent and Transfer
Agent. The Custodian of the assets of the Funds is
United States Trust Company of New York, 114 West 47th
Street, New York, New York 10036. The Chase Manhattan
Bank, N.A., 1 Chase Manhattan Plaza, New York, NY 10081,
has agreed to become successor to U.S. Trust, as Custo-
dian and Fund Accountant. The succession is presently
scheduled for July 1, 1995. No changes in the Funds' ad-
ministration or in the amount of fees and expenses paid
by the Funds for these services will result, and no ac-
tion by shareholders will be required. Shareholder Serv-
ices, Inc., P.O. Box 5330, Denver, Colorado 80217-5330,
is the transfer, shareholder services and dividend pay-
ing agent for the Funds and performs bookkeeping, data
processing and administrative services incident to the
maintenance of shareholder accounts.
Capital Stock. Nuveen Tax-Free Money Market Fund, Inc.
was incorporated in Minnesota on July 11, 1986. It is
authorized to issue an aggregate of 5,000,000,000 shares
of common stock, $.01 par value, consisting of
2,500,000,000 shares of the Massachusetts Fund and
2,500,000,000 shares of the New York Fund. Nuveen Tax-
Free Money Market Fund, Inc. reserves the right to re-
classify a portion of these shares by allocating them to
other portfolio classes that may be established in the
future. Shares of each portfolio class will have equal
non-cumulative voting rights and equal rights with re-
spect to dividends declared by such portfolio class and
the assets of such portfolio class upon liquidation, ex-
cept that only shares of a particular portfolio class
will be entitled to vote on matters concerning only that
portfolio class. Shares are fully paid and non-assessa-
ble when issued and have no pre-emptive, conversion or
exchange rights.
38
<PAGE>
TAXABLE EQUIVALENT YIELD TABLES
The following tables show the combined effects for indi-
viduals of federal, state and local (if applicable) in-
come taxes on what you would have to earn on a taxable
investment to equal a given tax-exempt yield. These ta-
bles are for illustrative purposes only and are not in-
tended to predict the actual return you might earn on a
Fund investment. The Funds occasionally may advertise
their performance in similar tables using other current
combined tax rates than those shown here. The combined
tax rates used in these tables have been rounded to the
nearest one-half of one percent. They are based upon
published 1995 marginal federal tax rates and marginal
state tax rates currently available and scheduled to be
in effect, and do not take into account changes in tax
rates that are proposed from time to time. They are cal-
culated using the highest state tax rate applicable
within each federal bracket, and assume taxpayers are
not subject to any alternative minimum taxes and deduct
any state income taxes paid on their federal income tax
returns. They also reflect the current federal tax limi-
tations on itemized deductions and personal exemptions,
which may raise the effective tax rate and taxable
equivalent yield for taxpayers above certain income lev-
els. The combined tax rates shown here may be higher or
lower than your actual combined tax rate.
39
<PAGE>
MASSACHUSETTS FUND
COMBINED MARGINAL
TAX RATES FOR
JOINT TAXPAYERS
WITH FOUR
PERSONAL
EXEMPTIONS
<TABLE>
<CAPTION>
Federal Combined
Federal Adjusted State
Taxable Gross and TAX-FREE YIELD
Income Income Federal 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-39.0 $ 0-114.7 25.0% 2.67 3.33 4.00 4.67 5.33 6.00 6.67
----------------------------------------------------------------------
39.0-94.3 0-114.7 36.5 3.15 3.94 4.72 5.51 6.30 7.09 7.87
----------------------------------------------------------------------
114.7-172.1 37.5 3.20 4.00 4.80 5.60 6.40 7.20 8.00
----------------------------------------------------------------------
94.3-143.6 0-114.7 39.5 3.31 4.13 4.96 5.79 6.61 7.44 8.26
----------------------------------------------------------------------
114.7-172.1 40.0 3.33 4.17 5.00 5.83 6.67 7.50 8.33
----------------------------------------------------------------------
172.1-294.6 42.5 3.48 4.35 5.22 6.09 6.96 7.83 8.70
----------------------------------------------------------------------
143.6-256.5 114.7-172.1 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
----------------------------------------------------------------------
172.1-294.6 47.0 3.77 4.72 5.66 6.60 7.55 8.49 9.43
----------------------------------------------------------------------
Over 294.6 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
----------------------------------------------------------------------
Over 256.5 172.1-294.6 50.5 4.04 5.05 6.06 7.07 8.08 9.09 10.10
----------------------------------------------------------------------
Over 294.6 48.0 3.85 4.81 5.77 6.73 7.69 8.65 9.62
</TABLE>
COMBINED MARGINAL
TAX RATES FOR
SINGLE TAXPAYERS
WITH ONE PERSONAL
EXEMPTION
<TABLE>
<CAPTION>
Federal Combined
Federal Adjusted State
Taxable Gross and TAX-FREE YIELD
Income Income Federal 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-
23.4 $ 0-114.7 25.0% 2.67 3.33 4.00 4.67 5.33 6.00 6.67
--------------------------------------------------------------------
23.4-
56.6 0-114.7 36.5 3.15 3.94 4.72 5.51 6.30 7.09 7.87
--------------------------------------------------------------------
56.6-
118.0 0-114.7 39.5 3.31 4.13 4.96 5.79 6.61 7.44 8.26
--------------------------------------------------------------------
114.7-237.2 40.5 3.36 4.20 5.04 5.88 6.72 7.56 8.40
--------------------------------------------------------------------
118.0-
256.5 114.7-237.2 45.5 3.67 4.59 5.50 6.42 7.34 8.26 9.17
--------------------------------------------------------------------
Over 237.2 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
--------------------------------------------------------------------
Over
256.5 Over 237.2 48.0 3.85 4.81 5.77 6.73 7.69 8.65 9.62
</TABLE>
-----------------------------------------------------------
FOR AN EQUAL
AFTER-TAX RETURN,
YOUR
<TABLE>
<CAPTION>
$50,000 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
INVESTMENT TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPARE
3%
TAXABLE $ 45,375 $36,300 $30,250 $25,929 $22,688 $20,167 $18,150
--------------------------------------------------------------------
COMPARE
4%
TAXABLE $ 60,500 $48,400 $40,333 $34,571 $30,250 $26,889 $24,200
--------------------------------------------------------------------
COMPARE
5%
TAXABLE $ 75,625 $60,500 $50,417 $43,214 $37,813 $33,611 $30,250
--------------------------------------------------------------------
COMPARE
6%
TAXABLE $ 90,750 $72,600 $60,500 $51,857 $45,375 $40,333 $36,300
--------------------------------------------------------------------
COMPARE
7%
TAXABLE $105,875 $84,700 $70,583 $60,500 $52,938 $47,056 $42,350
</TABLE>
TAX-FREE
INVESTMENT MAY BE
LESS*
For example,
$50,000 in a 5%
taxable
investment earns
the same after-
tax return as
$43,214 in a 3.5%
tax-free Nuveen
investment.
-----------------------------------------------------------
*Dollar amounts in the table reflect a 39.5% combined
federal and state tax rate.
40
<PAGE>
NEW YORK FUND
COMBINED FEDERAL
AND NEW YORK
STATE MARGINAL
TAX RATES FOR
JOINT TAXPAYERS
WITH FOUR
PERSONAL
EXEMPTIONS
<TABLE>
<CAPTION>
Federal
Federal Adjusted Combined
Taxable Gross State and TAX-FREE YIELD
Income Income Federal 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-39.0 $ 0-100.0 21.5% 2.55 3.18 3.82 4.46 5.10 5.73 6.37
----------------------------------------------------------------------
100.0-114.7 22.5 2.58 3.23 3.87 4.52 5.16 5.81 6.45
----------------------------------------------------------------------
39.0-94.3 0-100.0 33.5 3.01 3.76 4.51 5.26 6.02 6.77 7.52
----------------------------------------------------------------------
100.0-114.7 34.5 3.05 3.82 4.58 5.34 6.11 6.87 7.63
----------------------------------------------------------------------
114.7-150.0 35.0 3.08 3.85 4.62 5.38 6.15 6.92 7.69
----------------------------------------------------------------------
150.0-172.1 34.0 3.03 3.79 4.55 5.30 6.06 6.82 7.58
----------------------------------------------------------------------
94.3-143.6 0-100.0 36.0 3.13 3.91 4.69 5.47 6.25 7.03 7.81
----------------------------------------------------------------------
100.0-114.7 37.0 3.17 3.97 4.76 5.56 6.35 7.14 7.94
----------------------------------------------------------------------
114.7-150.0 38.0 3.23 4.03 4.84 5.65 6.45 7.26 8.06
----------------------------------------------------------------------
150.0-172.1 37.0 3.17 3.97 4.76 5.56 6.35 7.14 7.94
----------------------------------------------------------------------
172.1-294.6 39.5 3.31 4.13 4.96 5.79 6.61 7.44 8.26
----------------------------------------------------------------------
143.6-256.5 114.7-150.0 42.5 3.48 4.35 5.22 6.09 6.96 7.83 8.70
----------------------------------------------------------------------
150.0-172.1 42.0 3.45 4.31 5.17 6.03 6.90 7.76 8.62
----------------------------------------------------------------------
172.1-294.6 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
----------------------------------------------------------------------
Over 294.6 42.0 3.45 4.31 5.17 6.03 6.90 7.76 8.62
----------------------------------------------------------------------
Over 256.5 172.1-294.6 48.0 3.85 4.81 5.77 6.73 7.69 8.65 9.62
----------------------------------------------------------------------
Over 294.6 45.5 3.67 4.59 5.50 6.42 7.34 8.26 9.17
</TABLE>
COMBINED FEDERAL
AND NEW YORK
STATE MARGINAL
TAX RATES FOR
SINGLE TAXPAYERS
WITH ONE PERSONAL
EXEMPTION
<TABLE>
<CAPTION>
Federal
Federal Adjusted Combined
Taxable Gross State and TAX-FREE YIELD
Income Income Federal 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-23.4 $ 0-100.0 21.5% 2.55 3.18 3.82 4.46 5.10 5.73 6.37
-----------------------------------------------------------------------
100.0-114.7 22.0 2.56 3.21 3.85 4.49 5.13 5.77 6.41
-----------------------------------------------------------------------
23.4-56.6 0-100.0 33.5 3.01 3.76 4.51 5.26 6.02 6.77 7.52
-----------------------------------------------------------------------
100.0-114.7 34.0 3.03 3.79 4.55 5.30 6.06 6.82 7.58
-----------------------------------------------------------------------
56.6-118.0 0-100.0 36.0 3.13 3.91 4.69 5.47 6.25 7.03 7.81
-----------------------------------------------------------------------
100.0-114.7 36.5 3.15 3.94 4.72 5.51 6.30 7.09 7.87
-----------------------------------------------------------------------
114.7-150.0 38.0 3.23 4.03 4.84 5.65 6.45 7.26 8.06
-----------------------------------------------------------------------
150.0-237.2 37.5 3.20 4.00 4.80 5.60 6.40 7.20 8.00
-----------------------------------------------------------------------
118.0-256.5 114.7-150.0 43.0 3.51 4.39 5.26 6.14 7.02 7.89 8.77
-----------------------------------------------------------------------
150.0-237.2 42.5 3.48 4.35 5.22 6.09 6.96 7.83 8.70
-----------------------------------------------------------------------
Over 237.2 42.0 3.45 4.31 5.17 6.03 6.90 7.76 8.62
-----------------------------------------------------------------------
Over 256.5 Over 237.2 45.5 3.67 4.59 5.50 6.42 7.34 8.26 9.17
</TABLE>
41
<PAGE>
-----------------------------------------------------------
FOR AN EQUAL<TABLE>
AFTER- <CAPTION>
2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
2.0% TAX- TAX- TAX- TAX- TAX- TAX-
$50,000 INVESTMENT TAX-FREE FREE FREE FREE FREE FREE FREE
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPARE 3% TAXABLE $ 48,000 $38,400 $32,000 $27,429 $24,000 $21,333 $19,200
----------------------------------------------------------------------
COMPARE 4% TAXABLE $ 64,000 $51,200 $42,667 $36,571 $32,000 $28,444 $25,600
----------------------------------------------------------------------
COMPARE 5% TAXABLE $ 80,000 $64,000 $53,333 $45,714 $40,000 $35,556 $32,000
----------------------------------------------------------------------
COMPARE 6% TAXABLE $ 96,000 $76,800 $64,000 $54,857 $48,000 $42,667 $38,400
----------------------------------------------------------------------
COMPARE 7% TAXABLE $112,000 $89,600 $74,667 $64,000 $56,000 $49,778 $44,800
</TABLE>
TAX RETURN, YOUR
TAX-FREE INVESTMENT
MAY BE LESS*
For example,
$50,000 in a 5%
taxable
investment earns
the same after-
tax return as
$45,714 in a 3.5%
tax-free Nuveen
investment.
-----------------------------------------------------------
*The dollar amounts in the table reflect a 36.0% com-
bined federal and state tax rate.
42
<PAGE>
COMBINED FEDERAL,
NEW YORK STATE
AND NEW YORK CITY
MARGINAL TAX
RATES FOR JOINT
TAXPAYERS WITH
FOUR PERSONAL
EXEMPTIONS
<TABLE>
<CAPTION>
Federal
Federal Adjusted Combined
Taxable Gross State and TAX-FREE YIELD
Income Income Federal 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-39.0 $ 0-100.0 25.0% 2.67 3.33 4.00 4.67 5.33 6.00 6.67
-----------------------------------------------------------------------
100.0-114.7 26.0 2.70 3.38 4.05 4.73 5.41 6.08 6.76
-----------------------------------------------------------------------
39.0-94.3 0-100.0 36.5 3.15 3.94 4.72 5.51 6.30 7.09 7.87
-----------------------------------------------------------------------
100.0-114.7 37.5 3.20 4.00 4.80 5.60 6.40 7.20 8.00
-----------------------------------------------------------------------
114.7-150.0 38.0 3.23 4.03 4.84 5.65 6.45 7.26 8.06
-----------------------------------------------------------------------
150.0-172.1 37.5 3.20 4.00 4.80 5.60 6.40 7.20 8.00
-----------------------------------------------------------------------
94.3-143.6 0-100.0 39.5 3.31 4.13 4.96 5.79 6.61 7.44 8.26
-----------------------------------------------------------------------
100.0-114.7 40.0 3.33 4.17 5.00 5.83 6.67 7.50 8.33
-----------------------------------------------------------------------
114.7-150.0 41.0 3.39 4.24 5.08 5.93 6.78 7.63 8.47
-----------------------------------------------------------------------
150.0-172.1 40.0 3.33 4.17 5.00 5.83 6.67 7.50 8.33
-----------------------------------------------------------------------
172.1-294.6 42.5 3.48 4.35 5.22 6.09 6.96 7.83 8.70
-----------------------------------------------------------------------
143.6-256.5 114.7-150.0 45.5 3.67 4.59 5.50 6.42 7.34 8.26 9.17
-----------------------------------------------------------------------
150.0-172.1 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
-----------------------------------------------------------------------
172.1-294.6 47.0 3.77 4.72 5.66 6.60 7.55 8.49 9.43
-----------------------------------------------------------------------
Over 294.6 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
-----------------------------------------------------------------------
Over 256.5 172.1-294.6 50.5 4.04 5.05 6.06 7.07 8.08 9.09 10.10
-----------------------------------------------------------------------
Over 294.6 48.0 3.85 4.81 5.77 6.73 7.69 8.65 9.62
</TABLE>
COMBINED FEDERAL,
NEW YORK STATE
AND NEW YORK CITY
MARGINAL TAX
RATES
<TABLE>
<CAPTION>
Federal
Federal Adjusted Combined
Taxable Gross State and TAX-FREE YIELD
Income Income Federal 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
(1,000's) (1,000's) Tax Rate TAXABLE EQUIVALENT YIELD
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-23.4 $ 0-100.0 25.0% 2.67 3.33 4.00 4.67 5.33 6.00 6.67
-----------------------------------------------------------------------
100.0-114.7 25.5 2.68 3.36 4.03 4.70 5.37 6.04 6.71
-----------------------------------------------------------------------
23.4-56.6 0-100.0 36.5 3.15 3.94 4.72 5.51 6.30 7.09 7.87
-----------------------------------------------------------------------
100.0-114.7 37.0 3.17 3.97 4.76 5.56 6.35 7.14 7.94
-----------------------------------------------------------------------
56.6-118.0 0-100.0 39.5 3.31 4.13 4.96 5.79 6.61 7.44 8.26
-----------------------------------------------------------------------
100.0-114.7 39.5 3.31 4.13 4.96 5.79 6.61 7.44 8.26
-----------------------------------------------------------------------
114.7-150.0 41.0 3.39 4.24 5.08 5.93 6.78 7.63 8.47
-----------------------------------------------------------------------
150.0-237.2 40.5 3.36 4.20 5.04 5.88 6.72 7.56 8.40
-----------------------------------------------------------------------
118.0-256.5 114.7-150.0 45.5 3.67 4.59 5.50 6.42 7.34 8.26 9.17
-----------------------------------------------------------------------
150.0-237.2 45.5 3.67 4.59 5.50 6.42 7.34 8.26 9.17
-----------------------------------------------------------------------
Over 237.2 44.5 3.60 4.50 5.41 6.31 7.21 8.11 9.01
-----------------------------------------------------------------------
Over 256.5 Over 237.2 48.0 3.85 4.81 5.77 6.73 7.69 8.65 9.62
</TABLE>
FOR SINGLE
TAXPAYERS
WITH ONE PERSONAL
EXEMPTION
43
<PAGE>
-----------------------------------------------------------
FOR AN EQUAL<TABLE>
AFTER- <CAPTION>
2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
$50,000 2.0% TAX- TAX- TAX- TAX- TAX- TAX-
INVESTMENT TAX-FREE FREE FREE FREE FREE FREE FREE
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPARE 3%
TAXABLE $ 45,375 $36,300 $30,250 $25,929 $22,688 $20,167 $18,150
--------------------------------------------------------------
COMPARE 4%
TAXABLE $ 60,500 $48,400 $40,333 $34,571 $30,250 $26,889 $24,200
--------------------------------------------------------------
COMPARE 5%
TAXABLE $ 75,625 $60,500 $50,417 $43,214 $37,813 $33,611 $30,250
--------------------------------------------------------------
COMPARE 6%
TAXABLE $ 90,750 $72,600 $60,500 $51,857 $45,375 $40,333 $36,300
--------------------------------------------------------------
COMPARE 7%
TAXABLE $105,875 $84,700 $70,583 $60,500 $52,938 $47,056 $42,350
</TABLE>
TAX RETURN, YOUR
TAX-FREE
INVESTMENT
MAY BE LESS*
For example,
$50,000 in a 5%
taxable
investment earns
the same after-
tax return as
$43,214 in a 3.5%
tax-free Nuveen
investment.
-----------------------------------------------------------
*The dollar amounts in the table reflect a 39.5% combined
federal, state and New York City tax rate.
44
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
APPLICATION FORM
Mail completed Application Form to: If you prefer to wire funds to open
Nuveen Tax-Free Money Market Fund, an account, or need any assistance
Inc. P.O. Box 5330 Denver, CO 80217- in completing this form, call Nuveen
5330 toll-free 800-621-7227.
- --------------------------------------------------------------------------------
1. ACCOUNT REGISTRATION Print neatly or type.
3. NAME AND ADDRESS OF SECURITIES
[_]Individual[_] Joint[_] Custodian REPRESENTATIVE
Name of Securities Representative
[_]Gift to a Minor Under Uniform --------------------------------------
Gift to Minors Act of (State) _______ Firm Name
[_]Trust dated , 19 ______
--------------------------------------
Street Address
Individual or Joint Account
First Name, Initial, Last Name --------------------------------------
City State Zip Code
------------------------------------
Social Security Number --------------------------------------
-- --
4. INITIAL INVESTMENT
------------------------------------ ----------------------------------------
(Minimum Initial Investment $5,000.)
Joint Tenant (if any)
[_]Enclosed is my check in the
------------------------------------ amount payable to the
Fund indicated below.
Custodian, Gift to a Minor, or Trust Account
[_]Funds in the amount listed below
Custodian's Name, or Name of Trustee were wired to
------------------------------------ United Missouri Bank of Kansas City
Trust's Taxpayer I.D. No. for my account
-- No. in the Fund indicated
------------------------------------ below.
Minor's Name (only one for a Gift), (Please call Nuveen at 800-858-4084
or Name of Trust to obtain an
------------------------------------ account number before wiring funds.)
Minor's Social Security No. [_]Nuveen Tax-Free Money Market
-- -- Fund, Inc.--
------------------------------------ Massachusetts Fund $________
[_]Nuveen Tax-Free Money Market
Fund, Inc.--
Mailing Address and Telephone Number
New York Fund $___________
Street Address
------------------------------------ ----------------------------------------
City State Zip Code 5. SIGNATURE(S) Sign exactly as name or
names
------------------------------------
Telephone Number (include Area Code) appear above in Section 1, Account
( ) Registration.
------------------------------------ Sign in blue or black ink.
I certify that I have received and
read the current Fund prospectus.
Under penalties of perjury, I certify
(1) that the number shown on this
Application Form is my true and
correct Social Security or Taxpayer
Identification Number, and (2) that
the IRS has not notified me that I am
presently subject to backup
withholding. (Line out clause 2 if
you are subject to backup
withholding.)
- -------------------------------------
2. DISTRIBUTIONS
[_]Pay monthly dividends by check
[_]Pay capital gains distributions
by check
Individual or Joint Account
Signatures(s):
Individual Date
--------------------------------------
Joint Tenant (if applicable) Date
--------------------------------------
Custodian or Trustee Signature:
BY: Date
--------------------------------------
See reverse side for Optional Fund
Services.
45
<PAGE>
OPTIONAL FUND SERVICES
Indicate the same Fund from the
front side of this form.
[_Nuveen]Tax-Free Money Market Fund,
Inc.-- Massachusetts Fund
[_Nuveen]Tax-Free Money Market Fund,
Inc.-- New York Fund
- -------------------------------------------------------------------------------
6.OPTIONAL FUND SERVICES
Please send me application materials for these optional fund services
described in the prospectus:
[_Automatic]Deposit Plan
[_Automatic]Withdrawal Plan
[_Payroll]Direct Deposit Plan
[_UIT]Reinvestment
- -------------------------------------------------------------------------------
7. TELEPHONE REDEMPTION BY WIRE AUTHORIZATION
Select only one of the following, either Option A or B.
[_Option]A Upon my instructions,
please wire proceeds to my personal
commercial bank account. Attach a
check marked "void" and complete
only the section below.
Your Bank Account Name
-----------------------------------
Your Bank Account Number Bank's Routing Code
-----------------------------------
Name of Bank
-----------------------------------
Bank's Street Address
-----------------------------------
City StateZip
Code
-----------------------------------
Bank's Telephone Number (include Area Code)
()
-----------------------------------
[_Option]B Upon my instructions,
please wire proceeds in my name to
my securities representative firm's
commercial bank account.
Your Account Name
-----------------------------------
Your Account Number
-----------------------------------
Name of Securities Representative's Firm
-----------------------------------
Firm's Street Address
-----------------------------------
City StateZip
Code
-----------------------------------
Firm's Telephone Number (include Area Code)
()
-----------------------------------
To be completed by the securities
representative if Option B above
is selected.
Name of Bank of Securities Representative's Firm
-----------------------------------
Name of Branch Bank's routing code
-----------------------------------
Bank's Account Number
-----------------------------------
Bank's Street Address
-----------------------------------
City StateZip
Code
-----------------------------------
Securities Representative Signature
Date
-----------------------------------
- -------------------------------------------------------------------------------
8. TELEPHONE REDEMPTION BY CHECK AUTHORIZATION
[_I]hereby authorize the Fund and its agents to honor telephone instructions
from me or any person to redeem shares worth $25,000 or less from my account
and send those proceeds by check payable to me to my address of record,
subject to the terms and conditions in the prospectus and the Instructions
and Explanations section for this option.
- -------------------------------------------------------------------------------
9.CHECK REDEMPTION AUTHORIZATION
[_By]checking this box, you authorize checks drawn on the Funds to be honored
and the redemption of a sufficient number of shares of the Funds to pay such
check. Read the Instructions and Explanation carefully before completing
this section and return the completed signature card with this application
form.
Joint Accounts:
Check [_] either owner
whether or are required to
[_] all ownerssign redemption checks.
- -------------------------------------------------------------------------------
10. TELEPHONE EXCHANGE AUTHORIZATION
Check the box below to elect this option.
[_I]hereby authorize telephone exchanges from the Funds into other Nuveen
open-end mutual funds subject to the terms and conditions in the Fund
prospectus and the Instructions and Explanations section for this option.
46
<PAGE>
APPLICATION FORM--INSTRUCTIONS AND EXPLANATIONS
1. ACCOUNT Check the box that describes the type of account you are
REGISTRATION opening, and complete all required information which ap-
plies to your account type. This information will be
used to establish your account; therefore, provide the
requested information precisely as you wish it to appear
on our records. Registration for two or more persons
will be as joint tenants with right of survivorship un-
less noted otherwise. In the case of a Gift to a Minor
account, you may only indicate one minor's name and So-
cial Security Number. For a Custodian or Trust account,
provide the Taxpayer Identification or Social Security
Number of the appropriate entity.
2. DISTRIBUTIONS Since open-end mutual funds pay monthly dividends, you
have a choice of reinvesting dividend payments into ad-
ditional shares, or you may receive monthly checks. In-
dicate how you want the monthly dividends from the Funds
distributed. If no choice is indicated, dividends will
be reinvested automatically into additional shares. Al-
so, annual capital gains distributions, if any, will be
reinvested automatically in additional shares unless you
elect to receive them by check.
3. NAME AND We urge you to supply the name and address of your reg-
ADDRESS OF istered securities representative. By providing this in-
SECURITIES formation, your securities representative will receive
REPRESENTATIVE duplicate copies of your Fund's statements, and there-
fore may be apprised of the status of your investments.
4. INITIAL Minimum initial investment is $5,000. To invest in the
INVESTMENT Fund you have designated for your account registration,
enclose a check with your completed, signed application.
Your check should be in the amount specified and made
payable to the Fund named.
You may also arrange to invest in a Fund through your
securities representative. (See Nuveen Tax-Free Money
Market Fund, Inc.'s prospectus under "How to Purchase
Fund Shares" for more complete information.)
If you are opening an account to automatically reinvest
the distributions of your Nuveen Tax-Exempt Unit Trust
holdings and do not wish to make a direct investment at
this time, leave this section blank.
47
<PAGE>
5. SIGNATURE(S) This application must be signed by all registered ac-
count owners exactly as names appear in Section 1, under
Account Registration, except if the account is regis-
tered as a Custodian, Gift to a Minor, or Trust account.
In such cases, the appropriate person (e.g., trustee,
custodian) should sign the Application Form.
By signing the Application Form you certify that you
have power and authority to establish this account and
select the privileges requested. You also release Nuveen
Tax-Free Money Market Fund, Inc., Shareholder Services,
Inc. ("SSI"), John Nuveen & Co. Incorporated, United
Missouri Bank of Kansas City, N.A. and their agents and
representatives from all liability and agree to indem-
nify the same from any and all losses, damages or costs
for acting in good faith in accordance with instructions
believed to be genuine. With respect to the options
identified on items #7, #8, and #10 of this application,
you understand that the Funds, SSI and Nuveen will not
be liable for following telephone instructions reasona-
bly believed to be genuine. You also understand that the
Funds employ procedures reasonably designed to confirm
that telephone instructions are genuine and, if these
procedures are not followed, the Funds may be liable for
any losses due to unauthorized or fraudulent telephone
instructions. You agree that the authorizations herein
shall continue until SSI receives written notice of a
change or modification signed by all owners. This ac-
count is subject to the terms of Nuveen Tax-Free Money
Market Fund, Inc.'s prospectus, as amended from time to
time, and subject to acceptance by the Funds in Chicago,
Illinois, and to the laws of Illinois. All terms shall
be binding upon the heirs, representatives and assigns
of the account owners.
6. OPTIONAL FUND Read the prospectus for a description of these optional
SERVICES fund services.
7. TELEPHONE The telephone redemption option gives you quick and con-
REDEMPTION BY venient access to your money. By electing this option,
WIRE you are authorizing SSI and John Nuveen & Co. Incorpo-
AUTHORIZATION rated to honor telephone, telegraphic, or other instruc-
tions, without signature guarantee, from any person for
the redemption of shares of the Funds (minimum $1,000),
provided that proceeds are transmitted to either your
personal checking, NOW or money market account at a com-
mercial bank, or in your name to the commercial bank ac-
count of your securities representative.
Option A. By checking this box and completing the re-
quested information, you elect to have all redemption
proceeds wired to your personal
48
<PAGE>
checking, NOW or money market account at a commercial
bank. Attach a check marked "void."
Option B. By checking this box and completing the re-
quested information, you elect to have all redemption
proceeds wired in your name to your securities represen-
tative firm's commercial bank account. A representative
of that firm must complete and sign the second part of
subsection B.
8. TELEPHONE By electing this option, you are authorizing Shareholder
REDEMPTION BY Services, Inc. and John Nuveen & Co. Incorporated to
CHECK honor telephone requests from any person for redemption
AUTHORIZATION of Fund shares in the amount of $25,000 or less, pro-
vided that a check in the amount of such proceeds is
made payable to you and sent to your address of record,
which address has been the address of record for the
prior 60 days.
9. CHECK Redemption Checks--The following terms and conditions
REDEMPTION apply to the Redemption Check privilege:
AUTHORIZATION
A. Checks must be on forms provided by Nuveen Tax-Free
Money Market Fund, Inc. and for a minimum of $500 or
they will not be honored. Checks are authorizations
to redeem shares of the Funds and are payable through
the United Missouri Bank of Kansas City, N.A.
B. Check forms will not be issued until a completed sig-
nature card is received by the Fund.
C. Checks requiring redemption of shares held for 15
days or less that were not purchased by "wire trans-
fer" of Federal funds, or for which there are insuf-
ficient shares to cover payment, will not be honored.
D. Unless one signer is authorized on the Application
Form and signature card, each check must be signed by
all account owners or it will not be honored. If SSI
receives written notice by either owner to revoke the
authorization to sign individually, all account own-
ers will be required to sign redemption checks.
Checks must be signed exactly as registered.
E. This privilege is subject to Nuveen Tax-Free Money
Market Fund, Inc.'s and the Bank's rules and regula-
tions, and applicable governmental regulations, as
amended from time to time.
49
<PAGE>
F. Nuveen Tax-Free Money Market Fund, Inc. may refuse to
honor checks and may refuse to effect redemptions to
pay checks whenever the right of redemption has been
suspended or postponed, or whenever the account is
otherwise so impaired.
G. The account owner(s) agree(s) to examine confirma-
tions and cancelled checks. Please notify SSI within
30 days after receipt of your statement concerning
any unauthorized payment, missing signature(s) or en-
dorsement(s), or alteration of checks or errors on
the confirmation. Failure to do so shall preclude any
claim against Nuveen Tax-Free Money Market Fund,
Inc., the Bank, SSI or their representatives and
agents by reason of any unauthorized or missing sig-
nature, or endorsement, alteration, error, or forgery
of any kind.
10. TELEPHONE By electing this option, you are authorizing SSI and
EXCHANGE John Nuveen & Co. Incorporated to honor telephone re-
AUTHORIZATION quests from any person for the redemption of shares of
the Funds, provided that the proceeds of such redemption
are used to purchase shares of another Nuveen open-end
mutual fund and such shares are registered exactly the
same as this account.
50
<PAGE>
Principal Underwriter Investment Adviser Transfer and Shareholder
John Nuveen & Co. Incorporated
Nuveen Advisory Corp., Services Agent
Investment Bankers Subsidiary of Shareholder Services,
Inc.
John Nuveen & Co. Incorporated
Chicago: 333 West Wacker Drive P.O. Box 5330
333 West Wacker Drive Chicago, Illinois 60606 Denver, Colorado 80217-
Chicago, Illinois 60606 5330
Custodian
312-917-7700 Independent Public
Accountants
United States Trust Company of New York
New York: 114 West 47th Street
10 East 50th Street New York, New York 10036 for the Fund
New York, New York 10022
Arthur Andersen LLP
33 West Monroe Street
212-207-2000 Chicago, Illinois 60603
<PAGE>
PART B--STATEMENT OF ADDITIONAL INFORMATION
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
Statement of Additional Information
May 1, 1995
Nuveen Tax-Free Money Market Fund, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN MASSACHUSETTS TAX-FREE MONEY MARKET FUND
NUVEEN NEW YORK TAX-FREE MONEY MARKET FUND
Nuveen Tax-Free Money Market Fund, Inc. is an open-end diversified management
investment company consisting of the two money market funds named above (the
"Funds"). This Statement of Additional Information is not a prospectus. A pro-
spectus for the Nuveen Tax-Free Money Market Fund, Inc. may be obtained from
certain securities brokers, banks, and other financial institutions that have
entered into service agreements with the Funds or from the Funds, c/o John
Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illinois 60606.
This Statement of Additional Information relates to, and should be read in
conjunction with, the Prospectus dated May 1, 1995.
<TABLE>
<S> <C>
Table of Contents Page
- ------------------------------------------------------------
Fundamental Policies and Investment Portfolio 2
- ------------------------------------------------------------
Management 28
- ------------------------------------------------------------
Investment Adviser and Investment Management Agreement 33
- ------------------------------------------------------------
Portfolio Transactions 34
- ------------------------------------------------------------
Net Asset Value 35
- ------------------------------------------------------------
Tax Matters 37
- ------------------------------------------------------------
Additional Information on the Purchase of Fund Shares 43
- ------------------------------------------------------------
Yield Information 45
- ------------------------------------------------------------
Independent Public Accountants and Custodian 47
- ------------------------------------------------------------
</TABLE>
The audited financial statements for the fiscal year ended February 28, 1995
appearing in the Annual Report of Nuveen Tax-Free Money Market Fund, Inc. are
incorporated herein by reference. The Annual Report accompanies this Statement
of Additional Information.
<PAGE>
FUNDAMENTAL POLICIES AND INVESTMENT PORTFOLIO
FUNDAMENTAL POLICIES
The investment objective and certain fundamental policies of each Fund are de-
scribed in the Prospectus. Each of the Funds, as a fundamental policy, may
not, without the approval of the holders of a majority of the shares of that
Fund:
(1) Invest in securities other than Municipal Obligations and temporary in-
vestments, as those terms are defined in the Prospectus, and stand-by commit-
ments with respect to Municipal Obligations purchased by the Funds;
(2) Invest more than 5% of its total assets in securities of any one issuer,
except that this limitation shall not apply to securities of the United States
government, its agencies and instrumentalities or to the investment of 25% of
such Fund's assets;
(3) Borrow money, except from banks for temporary or emergency purposes and
not for investment purposes and then only in an amount not exceeding (a) 10%
of the value of 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 dispo-
sition 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;
(4) Pledge, mortgage or hypothecate its assets, except that, to secure
borrowings permitted by subparagraph (3) above, it may pledge securities hav-
ing a market value at the time of pledge not exceeding 10% of the value of the
Fund's total assets;
(5) Issue senior securities as defined in the Investment Company Act of 1940,
except to the extent such issuance might be involved with respect to
borrowings described under item (3) above;
(6) Underwrite any issue of securities, except to the extent that the purchase
of Municipal Obligations in accordance with its investment objective, policies
and limitations, may be deemed to be an underwriting;
(7) Purchase or sell real estate, but this shall not prevent any Fund from in-
vesting in Municipal Obligations secured by real estate or interests therein
or foreclosing upon and selling such security;
(8) Purchase or sell commodities or commodities contracts or oil, gas or other
mineral exploration or development programs;
(9) Make loans, other than by entering into repurchase agreements and through
the purchase of Municipal Obligations or temporary investments in accordance
with its investment objective, policies and limitations;
(10) Make short sales of securities or purchase any securities on margin, ex-
cept for such short-term credits as are necessary for the clearance of trans-
actions;
2
<PAGE>
(11) Write or purchase put or call options, except to the extent that the pur-
chase of a stand-by commitment may be considered the purchase of a put;
(12) Invest more than 5% of its total assets in securities of unseasoned is-
suers which, together with their predecessors, have been in operation for less
than three years;
(13) 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;
(14) Invest more than 10% of its assets in repurchase agreements maturing in
more than seven days, "illiquid" securities (such as non-negotiable CDs) and
securities without readily available market quotations;
(15) Purchase or retain the securities of any issuer other than the securities
of the Funds if, to the knowledge of Nuveen Tax-Free Money Market Fund, Inc.,
or those directors of Nuveen Tax-Free Money Market Fund, Inc., or those offi-
cers and directors of Nuveen Advisory Corp. ("Nuveen Advisory"), who individu-
ally own beneficially more than 1/2 of 1% of the outstanding securities of
such issuer, together own beneficially more than 5% of such outstanding secu-
rities.
For the purpose of applying the limitations set forth in paragraphs (2) and
(12) above, an issuer shall be deemed a separate issuer when its assets and
revenues are separate from other governmental entities and its securities are
backed only by its assets and revenues. Similarly, in the case of a non-gov-
ernmental issuer, such as an industrial corporation or a privately owned or
operated hospital, if the security is backed only by the assets and revenues
of the non-governmental user then such non-governmental user would be deemed
to be the sole issuer. Where a security is also backed by the enforceable ob-
ligation of a superior or unrelated governmental entity (other than a bond in-
surer) it shall be included in the computation of securities owned that are
issued by such superior governmental entity or other entity.
If, however, a security is guaranteed by a governmental entity or some other
entity (other than a bond insurer), such as a bank guarantee or letter of
credit, such a guarantee or letter of credit would be considered a separate
security and would be treated as an issue of such government, other entity or
bank. It is a fundamental policy of each of the Funds which cannot be changed
without the approval of the holders of a majority of shares of such Fund, that
a Fund will not hold securities of a single bank, including securities backed
by a letter of credit of such bank, if such holdings would exceed 10% of the
total assets of such Fund.
The foregoing fundamental investment policies, together with the investment
objective of each Fund, cannot be changed without approval by holders of "a
majority of a Fund's outstanding voting shares." As defined in the Investment
Company Act of 1940, this means the vote of (i) 67% or more of the Fund's
shares present at a meeting, if the holders of more than 50% of the Fund's
shares are present or represented by proxy, or (ii) more than 50% of the
Fund's shares, whichever is less. The foregoing restrictions and limitations
will apply only at the time of purchase of securities and will not be consid-
ered violated unless an excess or deficiency occurs or exists immediately af-
ter and as a result of an acquisition of securities, unless otherwise indicat-
ed.
3
<PAGE>
Nuveen Tax-Free Money Market Fund, Inc. is a series company under SEC Rule 18f-
2 and each Fund is a separate series issuing its own shares. Certain matters
under the Investment Company Act of 1940 which must be submitted to a vote of
the holders of the outstanding voting securities of a series company shall not
be deemed to have been effectively acted upon unless approved by the holders of
a majority of the outstanding voting securities of each series affected by such
manner.
PORTFOLIO SECURITIES
As described in the Prospectus, each of the Funds will invest primarily in a
diversified portfolio of Municipal Obligations consisting of money market in-
struments issued by governmental authorities in the Fund's designated state (or
by governmental authorities in certain possessions of the United States). In
general, Municipal Obligations include debt obligations issued to obtain funds
for various public purposes, including construction of a wide range of public
facilities. Industrial development bonds and pollution control bonds that are
issued by or on behalf of public authorities to finance various privately-oper-
ated facilities are included within the term Municipal Obligations if the in-
terest paid thereon is exempt from federal income tax. Municipal Obligations in
which each Fund will primarily invest are issued by that Fund's designated
state and cities and local authorities in that state, (or by governmental au-
thorities in certain possessions of the United States), and bear interest that,
in the opinion of bond counsel to the issuer, is exempt from federal income tax
and from income tax imposed by the designated state.
The various securities in which each of the Funds intends to invest are de-
scribed in the Prospectus. The following is a more complete description of cer-
tain short-term Municipal Obligations in which each Fund may invest:
Bond Anticipation Notes (BANs) are usually general obligations of state and lo-
cal governmental issuer which are sold to obtain interim financing for projects
that will eventually be funded through the sale of long-term debt obligations
or bonds. The ability of an issuer to meet its obligations on its BANs is pri-
marily dependent on the issuer's access to the long-term municipal bond market
and the likelihood that the proceeds of such bond sales will be used to pay the
principal and interest on the BANs.
Tax Anticipation Notes (TANs) are issued by state and local governments to fi-
nance the current operations of such governments. Repayment is generally to be
derived from specific future tax revenues. TANs are usually general obligations
of the issuer. A weakness in an issuer's capacity to raise taxes due to, among
other things, a decline in its tax base or a rise in delinquencies could ad-
versely affect the issuer's ability to meet its obligations on outstanding
TANs.
Revenue Anticipation Notes (RANs) are issued by governments or governmental
bodies with the expectation that future revenues from a designated source will
be used to repay the notes. In general, they also constitute general obliga-
tions of the issuer. A decline in the receipt of projected revenues, such as
anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal and in-
terest on RANs.
4
<PAGE>
Construction Loan Notes are issued to provide construction financing for spe-
cific projects. Frequently, these notes are redeemed with funds obtained from
the Federal Housing Administration.
Bank Notes are notes issued by local governmental bodies and agencies as those
described above to commercial banks as evidence of borrowings. The purposes
for which the notes are issued are varied but they are frequently issued to
meet short-term working-capital or capital-project needs. These notes may have
risks similar to the risks associated with TANs and RANs.
Variable and Floating Rate Instruments--Certain Municipal Obligations, certain
instruments issued, guaranteed or sponsored by the U.S. Government or its
agencies, and certain debt instruments issued by domestic banks or corpora-
tions, may carry variable or floating rates of interest. Such instruments bear
interest at rates which are not fixed, but which vary with changes in speci-
fied market rates or indices, such as a bank prime rate or a tax-exempt money
market index. Variable rate notes are adjusted to current interest rate levels
at certain specified times, such as every 30 days, as set forth in the instru-
ment. A floating rate note adjusts automatically whenever there is a change in
its base interest rate adjustor, e.g., a change in the prime lending rate or
specified interest rate indices. Typically such instruments carry demand fea-
tures permitting the Funds to recover the full principal amount thereof upon
specified notice.
One form of variable or floating rate instrument consists of an underlying
fixed rate municipal bond that is subject to a third party demand feature or
"tender option." The holder of the bond would pay a "tender fee" to the third
party tender option provider, the amount of which would be periodically ad-
justed so that the bond/tender option combination would reasonably be expected
to have a market value that approximates the par value of the bond. This
bond/tender option combination would therefore be functionally equivalent to
ordinary variable or floating rate obligations as described above, and the
Funds may purchase such obligations subject to certain conditions specified by
the Securities and Exchange Commission.
The Funds' right to obtain payment at par on a demand instrument upon demand
could be adversely affected by events occurring between the date the Funds
elect to tender the instrument and the date the proceeds are due. Nuveen Advi-
sory will monitor on an ongoing basis the pricing, quality and liquidity of
such instruments and will similarly monitor the ability of an obligor under a
demand instrument, including demand obligors as to instruments supported by
bank letters of credit or guarantees, to pay principal and interest on demand.
Although the ultimate maturity of such variable rate obligations may exceed
one year, the Funds will treat the maturity of each variable rate demand obli-
gation, for purposes of computing its dollar-weighted average portfolio matu-
rity, as the longer of (i) the notice period required before the Funds are en-
titled to payment of the principal amount through demand, or (ii) the period
remaining until the next interest rate adjustment.
The Funds may also obtain stand-by commitments with respect to Municipal Obli-
gations. Under a stand-by commitment (often referred to as a put), the party
issuing the commitment agrees to purchase at a Fund's option the Municipal Ob-
ligation at an agreed-upon price on certain dates or within a specific period.
Since the value of a stand-by commitment depends in part upon the ability of
the issuing party to meet its purchase obligations thereunder, the Funds will
enter into stand-by commit-
5
<PAGE>
ments only with parties which have been evaluated by Nuveen Advisory and, in
the opinion of Nuveen Advisory, present minimal credit risks.
The amount payable to a Fund upon its exercise of a stand-by commitment would
be (1) the acquisition cost of the Municipal Obligations (excluding any accrued
interest that the Fund paid on acquisition), less any amortized market premium
or plus any amortized market or original issue discount during the period the
Fund owned the security, plus (2) all interest accrued on the security since
the last interest payment date during the period the security was owned by the
Fund. A Fund's right to exercise stand-by commitments held by it will be uncon-
ditional and unqualified. The acquisition of a stand-by commitment will not af-
fect the valuation of the underlying security, which will continue to be valued
in accordance with the amortized cost method. The stand-by commitment itself
will be valued at zero in determining net asset value. A Fund may purchase
stand-by commitments for cash or pay a higher price for portfolio securities
which are acquired subject to such a commitment (thus reducing the yield to ma-
turity otherwise available for the same securities). The maturity of a Munici-
pal Obligation purchased by a Fund will not be considered shortened by any
stand-by commitment to which such security is subject. Although a Fund's rights
under a stand-by commitment would not be transferable, the Fund could sell Mu-
nicipal Obligations which were subject to a stand-by commitment to a third
party at any time.
WHEN-ISSUED SECURITIES
As described under "Investment Policies--Municipal Obligations" in the Prospec-
tus, each Fund may purchase and sell Municipal Obligations on a when-issued or
delayed delivery basis. When-issued and delayed delivery transactions arise
when securities are purchased or sold with payment and delivery beyond the reg-
ular settlement date. (When-issued transactions normally settle within 30-45
days.) On such transactions the payment obligation and the interest rate are
fixed at the time the buyer enters into the commitment. The commitment to pur-
chase securities on a when-issued or delayed delivery basis may involve an ele-
ment of risk because the value of the securities is subject to market fluctua-
tion, no interest accrues to the purchaser prior to settlement of the transac-
tion, and at the time of delivery the market value may be less than cost. At
the time a Fund makes the commitment to purchase a Municipal Obligation on a
when-issued or delayed delivery basis, it will record the transaction and re-
flect the amount due and the value of the security in determining its net asset
value. Likewise, at the time a Fund makes the commitment to sell a Municipal
Obligation on a delayed delivery basis, it will record the transaction and in-
clude the proceeds to be received in determining its net asset value; accord-
ingly, any fluctuations in the value of the Municipal Obligation sold pursuant
to a delayed delivery commitment are ignored in calculating net asset value so
long as the commitment remains in effect. Each Fund will also maintain desig-
nated readily marketable assets at least equal in value to commitments to pur-
chase when-issued or delayed delivery securities, such assets to be segregated
by the Custodian specifically for the settlement of such commitments. A Fund
will only make commitments to purchase Municipal Obligations on a when-issued
or delayed delivery basis with the intention of actually acquiring the securi-
ties, but each Fund reserves the right to sell these securities before the set-
tlement date if it is deemed advisable. If a when-issued security is sold be-
fore delivery any gain or loss would not be tax-exempt. A Fund commonly engages
in when-issued transactions in order to
6
<PAGE>
purchase or sell newly-issued Municipal Obligations, and may engage in delayed
delivery transactions in order to manage its operations more effectively.
SPECIAL CONSIDERATIONS RELATING TO MUNICIPAL OBLIGATIONS OF DESIGNATED STATES
As described in the Prospectus, except for investments in temporary invest-
ments, each of the Funds will, at all times, invest at least 80% of its net
assets in its designated state's Municipal Obligations. Each Fund is therefore
more susceptible to political, economic or regulatory factors adversely af-
fecting issuers of Municipal Obligations in its designated state. Brief summa-
ries of these factors are contained in the Prospectus. Set forth below is ad-
ditional information that bears upon the risk of investing in Municipal Obli-
gations issued by public authorities in these states. This information was ob-
tained from official statements of issuers located in the designated states as
well as from other publicly available official documents and statements.
Nuveen Tax-Free Money Market Fund, Inc. has not independently verified any of
the information contained in such statements and documents, but Nuveen Tax-
Free Money Market Fund, Inc. is not aware of facts which would render such in-
formation inaccurate.
FACTORS PERTAINING TO MASSACHUSETTS
As described above, except to the extent the Massachusetts Fund invests in
temporary investments, the Massachusetts Fund will invest substantially all of
its net assets in Massachusetts Municipal Obligations. The Massachusetts Fund
is therefore susceptible to political, economic or regulatory factors affect-
ing issuers of Massachusetts Municipal Obligations. Without intending to be
complete, the following briefly summarizes the current financial situation, as
well as some of the complex factors affecting the financial situation, in the
Commonwealth of Massachusetts (the "Commonwealth"). It is derived from sources
that are generally available to investors and is based in part on information
obtained from various agencies in Massachusetts. No independent verification
has been made of the accuracy or completeness of the following information.
There can be no assurance that current or future statewide or regional eco-
nomic difficulties, and the resulting impact on Commonwealth or local govern-
mental finances generally, will not adversely affect the market value of Mas-
sachusetts Obligations in the Fund or the ability of particular obligors to
make timely payments of debt service on (or relating to) those obligations.
Since 1988, there has been a significant slowdown in the Commonwealth's econo-
my, as indicated by a rise in unemployment, a slowing of its per capita income
growth and declining state revenues. In fiscal 1991, the Commonwealth's expen-
ditures for state government programs exceeded current revenues, and although
fiscal 1992, 1993 and 1994 revenues exceeded expenditures, no assurance can be
given that lower than expected tax revenues will not resume and continue.
1995 Fiscal Year Budget. On July 10, 1994, the Governor signed the Common-
wealth's budget for fiscal 1995. The fiscal 1995 budget is based on estimated
budgeted revenues and other sources of approximately $16.360 billion, which
includes revised tax revenue estimates of approximately $11.179 billion. Tax
revenues for fiscal 1995 were originally estimated at $11.328 billion in May,
1994, howev
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er, due to the slowing of the rate of growth in certain tax revenue categories
in the months following the signing of the budget, particularly income tax,
the Secretary of the Administration on September 26, 1994, as required by law,
reduced the fiscal 1995 tax revenue estimate by $75 million. On January 25,
1995, the Secretary for Administration and Finance further revised the fiscal
1995 tax revenue estimate to $11.179 billion, a reduction of approximately $55
million from the September 26, 1994 estimate. The tax revenue estimate in-
cludes $19.3 million of tax cuts signed by the Governor in the fiscal 1995
budget. Estimated fiscal 1995 tax revenues are approximately $572 million
higher than fiscal 1994 tax revenues of $10.607 billion.
As signed by the Governor, the budget authorizes approximately $16.482 billion
in fiscal 1995 expenditures. The Governor exercised his authority to veto and
reduce individual line items and reduced total expenditures by approximately
$298.2 million and vetoed certain other law changes contained in the fiscal
1995 budget. The $16.449 billion of fiscal 1995 expenditures includes a re-
serve against certain contingencies currently in the amount of $98.6 million.
On January 25, 1995, the Governor filed a supplemental appropriation recommen-
dation aggregating approximately $43.6 million, which expenditures are in-
cluded in the $98.6 million contingency reserve for fiscal 1995 expenditures.
Included in the approximately $298.2 million of vetoes noted above, the Gover-
nor vetoed approximately $296.9 million in appropriations for the Executive
Office of Human Services and the Department of Public Welfare, representing
the estimate, at the time, of 4 months of funding for the Commonwealth's pub-
lic assistance programs.
On February 10, 1995, the Governor signed into law certain reforms to the Com-
monwealth's program for Aid to Families with Dependent Children ("AFDC") which
will take effect on July 1, 1995, subject to federal approval of certain waiv-
ers. The revised program reduces AFDC benefits to able bodied recipients by
2.75%, while allowing them to keep a larger portion of their earned wages, re-
quires approximately 22,000 able-bodied parents of school-aged children to
work or perform community service for 20 hours per week and requires approxi-
mately 16,000 recipients who have children between the ages of two and six to
participate in an education or training program or perform community service.
The plan also establishes a pilot program for up to 2,000 participants that
offers tax credits and wage subsidies to employers who hire welfare recipi-
ents. Parents who find employment will be provided with extended medical bene-
fits and day care benefits for up to one year. The plan mandates paternal
identification, expands funding for anti-fraud initiatives, and requires par-
ents on AFDC to immunize their children. Parents who are disabled, caring for
a disabled child, have a child under the age of two, or are teen-agers living
at home and attending high school, will continue to receive cash assistance.
Since most provisions of the new law do not take effect until July 1, 1995,
the Executive Office for Administration projects that the reforms will not ma-
terially affect fiscal 1995 public assistance spending. The fiscal 1995 expen-
diture estimate of $16.449 billion includes $247.8 million appropriated to
fund the Commonwealth's public assistance programs for the last four months of
fiscal 1995. The Commonwealth is currently evaluating the new law's impact on
fiscal 1996 projected spending for public assistance programs.
The fiscal 1995 budget is based on numerous spending and revenue estimates,
the achievement of which cannot be assured.
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On November 8, 1994, the voters in the statewide general election approved an
initiative petition that would slightly increase the portion of the gasoline
tax revenue credited to the Highway Fund, one of the Commonwealth's three major
budgetary funds, prohibit the transfer of money from the Highway Fund to other
funds for non-highway purposes and not permit including the Highway Fund bal-
ance in the computation "consolidated net surplus" for purposes of state fi-
nance laws. The initiative petition also provides that no more than 15% of gas-
oline tax revenues may be used for mass transportation purposes, such as expen-
ditures related to the Massachusetts Bay Transit Authority. The Executive Of-
fice of Administration and Finance is analyzing the effect, if any, this ini-
tiative petition, which became law on December 8, 1994, may have on the fiscal
1995 budget and it currently does not expect it to have any materially adverse
impact. This is not a constitutional amendment and is subject to amendment or
repeal by the Legislature, which may also, notwithstanding the terms of the pe-
tition, appropriate moneys from the Highway Fund in such amounts and for such
purposes as it determines, subject only to a constitutional restriction that
such moneys be used for highways or mass transit purposes.
1994 Fiscal Year. Fiscal 1994 tax revenue collections were approximately
$10.607 billion, $87 million below the Department of Revenue's fiscal year 1994
tax revenue estimate of $10.694 billion and $677 million above fiscal 1993 tax
revenues of $9.930 billion. Budgeted revenues and other sources, including non-
tax revenues, collected in fiscal 1994 were approximately $15.550 billion. To-
tal revenues and other sources increased by approximately 5.7% from fiscal 1993
to fiscal 1994 while tax revenues increased by 6.8% for the same period. Bud-
geted expenditures and other uses of funds in fiscal 1994 were approximately
$15.523 billion, which is $826.5 million or approximately 5.6% higher than fis-
cal 1993 budgeted expenditures and other uses.
As of June 30, 1994, the Commonwealth showed a year-end cash position of ap-
proximately $757 million, as compared to a projected position of $599 million.
In June, 1993, the Legislature adopted and the Governor signed into law compre-
hensive education reform legislation. This legislation required an increase in
expenditures for education purposes above fiscal 1993 base spending of $1.288
billion of approximately $175 million in fiscal 1994. The Executive Office for
Administration and Finance expects the annual increases in expenditures above
the fiscal 1993 base spending of $1.288 billion to be approximately $396 mil-
lion in fiscal 1995, $625 million in fiscal 1996 and $868 million in fiscal
1997. Additional annual increases are also expected in later fiscal years. The
fiscal 1995 budget as signed by the Governor includes $896 million in appropri-
ations to satisfy this legislation.
1993 Fiscal Year. The Commonwealth's budgeted expenditures and other uses were
approximately $14.696 billion in fiscal 1993, which is approximately $1.280
billion or 9.6% higher than fiscal 1992 expenditures and other uses. Final fis-
cal 1993 budgeted expenditures were $23 million lower than the initial July
1992 estimates of fiscal 1993 budgeted expenditures. Budgeted revenues and
other sources for fiscal 1993 totalled approximately $14.710 billion, including
tax revenues of $9.930 billion. Total revenues and other sources increased by
approximately 6.9% from fiscal 1992 to fiscal 1993, while tax revenues in-
creased by 4.7% for the same period. Overall, fiscal 1993 ended with a surplus
of revenues and other sources over expenditures and other uses of $13.1 million
and aggregate ending fund bal
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ances in the budgeted operating funds of the Commonwealth of approximately
$562.5 million. After payment in full of the distribution of local aid to the
Commonwealth's cities and towns ("Local Aid") and the retirement of short term
debt, the Commonwealth showed a year end cash position of approximately $622.2
million, as compared to a projected position of $485.1 million.
1992 Fiscal Year. The Commonwealth's budgeted expenditures and other uses were
approximately $13.4 billion in fiscal 1992, which is $238.7 million or 1.7%
lower than fiscal 1991 budgeted expenditures. Final fiscal 1992 budgeted expen-
ditures were $300 million more than the initial July 1991 estimates of budget-
ary expenditures, due in part to increases in certain human services programs,
including an increase of $268.7 million for the Medicaid program and $50.0 mil-
lion for mental retardation consent decree requirements. Budgeted revenues and
other sources for fiscal 1992 totalled approximately $13.7 billion (including
tax revenues of approximately $9.5 billion), reflecting an increase of approxi-
mately 0.7% from fiscal 1991 to 1992 and an increase of 5.4% in tax revenues
for the same period. Overall, fiscal 1992 is estimated to have ended with an
excess of revenues and other sources over expenditures and other uses of $312.3
million. After payment in full of Local Aid in the
amount of $514.0 million due on June 30, 1992, retirement of the Commonwealth's
outstanding commercial paper (except for approximately $50 million of bond an-
ticipation notes) and certain other short term borrowings, as of June 30, 1992,
the end of fiscal 1992, the Commonwealth showed a year-end cash position of ap-
proximately $731 million, as compared with the Commonwealth's cash balance of
$182.3 million at the end of fiscal 1991.
1991 Fiscal Year. Budgeted expenditures for fiscal 1991 were approximately
$13.659 billion, as against budgeted revenues and other sources of approxi-
mately $13.634 billion. The Commonwealth suffered an operating loss of approxi-
mately $21.2 million. Application of the adjusted fiscal 1990 fund balances of
$258.3 million resulted in a fiscal 1991 budgetary surplus of $237.1 million.
State law requires that approximately $59.2 million of the fiscal year ending
balances of $237.1 million be placed in the Stabilization Fund, a reserve from
which funds can be appropriated (i) to make up any difference between actual
state revenues in any fiscal year in which actual revenues fall below the al-
lowable amount, (ii) to replace state and local losses by federal funds or
(iii) for any event, as determined by the legislature, which threatens the
health, safety or welfare of the people or the fiscal stability of the Common-
wealth or any of its political subdivisions.
Upon taking office in January 1991, the new Governor proposed a series of leg-
islative and administrative actions, including withholding of allotments under
Section 9C of Chapter 29 of the General Laws, intended to eliminate the pro-
jected deficits. The new Governor's review of the Commonwealth's budget indi-
cated projected spending of approximately $14.1 billion with an estimated $850
million in budget balancing measures that would be needed prior to the close of
fiscal 1991. At that time, estimated tax revenues were revised to approximately
$8.8 billion, $903 million less than was estimated at the time the fiscal 1991
budget was adopted. The Legislature adopted a number of the Governor's recom-
mendations and the Governor took certain administrative actions not requiring
legislative approval, including the adoption of a state employee furlough pro-
gram. It is estimated by the Commonwealth that spending reductions achieved
through savings initiatives and withholding of allotments total approximately
$484.3 million in aggregate for fiscal 1991. However, these savings and reduc-
tions may be impacted negatively by litigation pursued by third parties con-
cerning the Gover
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nor's actions under Section 9C of Chapter 29 of the General Laws and with re-
gard to the state employee furlough program.
In addition, the new administration in May 1991 filed an amendment to its Med-
icaid state plan that enables it to claim 50% federal reimbursement on
uncompensated care payments for certain hospitals in the Commonwealth. As a
result, in fiscal 1991, the Commonwealth obtained additional non-tax revenues
in the form of federal reimbursements equal to approximately $513 million on
account of uncompensated care payments. This reimbursement claim was based
upon recent amendments of federal law contained in the Omnibus Budget Recon-
ciliation Act of 1990 and, consequently, on relatively undeveloped federal
laws, regulations and guidelines. At the request of the federal Health Care
Financing Administration, the Office of Inspector General of the United States
Department of Health and Human Services has commenced an audit of the reim-
bursement. The administration, which had reviewed the matter with the Health
Care Financing Administration prior to claiming the reimbursement, believes
that the Commonwealth will prevail in the audit. If the Commonwealth does not
prevail, the Commonwealth would have the right to contest an appeal, but could
be required to pay all or part of Medicaid reimbursements with interest and to
have such amount deducted from future reimbursement payments.
1990 and 1989 Fiscal Years. In July 1989, the former Governor vetoed certain
provisions included in the budget legislation for fiscal 1990, including ap-
proximately $273 million of the fiscal 1990 appropriations, including $100
million for Local Aid. One of the Governor's vetoes occasioned a default by
the Commonwealth on a September 1, 1989 payment of $2.5 million on a general
obligation contract with the Massachusetts Community Development Finance Cor-
poration to which its full faith and credit had been pledged, which payment
was made on September 17, 1990 after a supplemental appropriation was proposed
by the Governor and passed by the legislature. The legislature overrode the
Governor's veto of $100 million of Local Aid and the Governor then indicated
that he was withholding the allotment for such expenditure. The Supreme Judi-
cial Court invalidated the Governor's withholding of $210 million of appropri-
ated funds for certain Local Aid purposes in May 1990.
Budgeted expenditures for fiscal 1989 and 1990 totalled approximately $12.6
billion and $13.3 billion, respectively. Budgeted revenues for fiscal 1989 and
1990 totalled approximately $12.0 billion and $12.0 billion, respectively.
Employment. Reversing a trend of relatively low unemployment during the early
and mid 1980's, the Massachusetts unemployment rate beginning in 1990 in-
creased significantly to where the Commonwealth's unemployment rate exceeded
the national unemployment rate. During 1990, the Massachusetts unemployment
rate increased from 4.5% in January to 6.1% in July to 6.7% in August. During
1991, the Massachusetts unemployment rate averaged 9.0% while the average
United States unemployment rate was 6.7%. The Massachusetts unemployment rate
during 1992 averaged 8.5% while the average United States unemployment rate
was 7.4%. Since 1993, the average monthly unemployment rate has declined
steadily. The Massachusetts unemployment rate in December 1994 was 5.7%, as
compared with the United States unemployment rate of 5.4% for the same period.
Other factors which may significantly and adversely affect the employment rate
in the Commonwealth include reductions
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in federal government spending on defense-related industries. Due to this and
other considerations, there can be no assurance that unemployment in the Com-
monwealth will not increase in the future.
Debt Ratings. S&P currently rates the Commonwealth's uninsured general obliga-
tion bonds at A+. At the same time, S&P currently rates state and agency notes
at SP1. From 1989 through 1992, the Commonwealth had experienced a steady de-
cline in its S&P rating, with its decline beginning in May 1989, when S&P low-
ered its rating on the Commonwealth's general obligation bonds and other Com-
monwealth obligations from AA+ to AA and continuing a series of further reduc-
tions until March 1992, when the rating was affirmed at BBB.
Moody's currently rates the Commonwealth's uninsured general obligation bonds
at A1. From 1989 through 1992, the Commonwealth had experienced a steady de-
cline in its rating by Moody's since May 1989. In May 1989, Moody's lowered its
rating on the Commonwealth's notes from MIG-1 to MIG-2, and its rating on the
Commonwealth's commercial paper from P-1 to P-2. On June 21, 1989, Moody's re-
duced the Commonwealth's general obligation rating from Aa to A. On November
15, 1989, Moody's reduced the rating on the Commonwealth's general obligations
from A to Baa1, and on March 9, 1990, Moody's reduced the rating of the Common-
wealth's general obligation bonds from Baa1 to Baa.
There can be no assurance that these ratings will continue.
In recent years, the Commonwealth and certain of its public bodies and munici-
palities have faced serious financial difficulties which have affected the
credit standing and borrowing abilities of Massachusetts and its respective en-
tities and may have contributed to higher interest rates on debt obligations.
The continuation of, or an increase in, such financial difficulties could re-
sult in declines in the market values of, or default on, existing obligations
including Massachusetts Obligations in the Fund. Should there be during the
term of the Fund a financial crisis relating to Massachusetts, its public bod-
ies or municipalities, the market value and marketability of all outstanding
bonds issued by the Commonwealth and its public authorities or municipalities
including the Massachusetts Obligations in the Fund and interest income to the
Fund could be adversely affected.
Total Bond and Note Liabilities. The total general obligation bond indebtedness
of the Commonwealth (including Fiscal Recovery Bonds) as of January 1, 1995 was
approximately $9.19 billion. There were also outstanding approximately $264
million in general obligation notes and other short term general obligation
debt. The total bond and note liabilities of the Commonwealth as of October 1,
1994, including guaranteed bond and contingent liabilities was approximately
$12.98 billion.
Debt Service. During the 1980s, capital expenditures were increased substan-
tially, which has had a short term impact on the cash needs of the Commonwealth
and also accounts for a significant rise in debt service during that period.
Payments for debt service on Commonwealth general obligation bonds and notes
have risen at an average annual rate of 22.2% from $770.9 million in fiscal
1990 to an estimated $942.3 million in fiscal 1991. Debt service payments in
fiscal 1992 were $898.3 million. Debt service payments for fiscal 1992 reflect
a $261 million one-time reduction achieved as a result of the Issuance of the
refunding bonds in September and October 1991. Debt service expenditures were
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approximately $1.140 billion and $1.149 billion for fiscal 1993 and 1994, re-
spectively, and are projected to be approximately $1.242 billion for fiscal
1995 and $1.267 billion for fiscal 1996. The fiscal 1993 and fiscal 1994 debt
service expenditures reflect savings of $62.9 million and $57.3 million, re-
spectively, achieved through the issuance of refunding bonds in October 1992,
and March, May and August 1993. The amounts represented do not include debt
service on notes issued to finance the fiscal 1989 deficit and certain Medicaid
related liabilities, certain debt service contract assistance to the Massachu-
setts Bay Transportation Authority ($181.9 million projected in fiscal 1995),
the Massachusetts Convention Center Authority ($24.6 million projected in fis-
cal 1995), the Massachusetts Government Land Bank ($6.0 million projected in
fiscal 1995) and the Massachusetts Water Pollution Abatement Trust ($13.9 mil-
lion projected in fiscal 1995), as well as grants to municipalities under the
school building assistance program to defray a portion of the debt service
costs on local school bonds ($179.2 million projected in fiscal 1995).
In January 1990, legislation was passed to impose a limit on debt service be-
ginning in fiscal 1991, providing that no more than 10% of the total appropria-
tions in any fiscal year may be expended for payment of interest and principal
on general obligation debt (excluding the Fiscal Recovery Bonds). The percent-
age of total appropriations expended from the budgeted operating funds for debt
service (excluding debt service on Fiscal Recovery Bonds) for fiscal 1994 is
5.6%, which is projected to increase to 5.9% in fiscal 1995.
Certain Liabilities. Among the material future liabilities of the Commonwealth
are significant unfunded general liabilities of its retirement systems and a
program to fund such liabilities; a program whereby, starting in 1978, the Com-
monwealth began assuming full financial responsibility for all costs of the ad-
ministration of justice within the Commonwealth; continuing demands to raise
aggregate aid to cities, towns, schools and other districts and transit author-
ities above current levels; and Medicaid expenditures which have increased each
year since the program was initiated. The Commonwealth has signed consent de-
crees to continue improving mental health care and programs for the mentally
retarded in order to meet federal standards, including those governing receipt
of federal reimbursements under various programs, and the parties in those
cases have worked cooperatively to resolve the disputed issues.
As a result of comprehensive legislation approved in January, 1988, the Common-
wealth is required, beginning in fiscal 1989, to fund future pension liabili-
ties currently and to amortize the Commonwealth's unfunded liabilities over 40
years. The estimated pension expenditures (inclusive of current benefits and
pension reserves) for fiscal 1996 are $1.044 billion, representing an increase
of 5.0% over estimated fiscal 1995 expenditures of $994.3 million.
Litigation. The Commonwealth is engaged in various lawsuits involving environ-
mental and related laws, including an action brought on behalf of the U.S. En-
vironmental Protection Agency alleging violations of the Clean Water Act and
seeking to enforce the clean-up of Boston Harbor. The MWRA, successor in lia-
bility to the Metropolitan District Commission, has assumed primary responsi-
bility for developing and implementing a court-approved plan for the construc-
tion of the treatment facilities necessary to achieve compliance with federal
requirements. Under the Clean Water Act, the Commonwealth may be liable for
costs of compliance in these or any other Clean Water cases if the MWRA or
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a municipality is prevented from raising revenues necessary to comply with a
judgment. The MWRA currently projects that the total cost of construction of
the treatment facilities required under the court's order is approximately $3.5
billion in current dollars, with approximately $1.54 billion to be spent on or
after July 1, 1994.
The Department of Public Welfare has been sued for the alleged unlawful denial
of personal care attendant services to certain disabled Medicaid recipients.
The Superior Court has denied the plaintiff's motion for preliminary injunction
and has also denied the plaintiff's motion for class certification. If the
plaintiffs were to prevail on their claims and the Commonwealth were required
to provide all of the services sought by the plaintiffs to all similarly situ-
ated persons, it would substantially increase the annual cost to the Common-
wealth if these services are eventually required. The Department of Public Wel-
fare currently estimates this increase to be as much as $200 million per year.
There are also actions pending in which recipients of human services benefits,
such as welfare recipients, the mentally retarded, the elderly, the handi-
capped, children, residents of state hospitals and inmates of corrections in-
stitutions, seek expanded levels of services and benefits and in which provid-
ers of services to such recipients challenge the rates at which they are reim-
bursed by the Commonwealth. To the extent that such actions result in judgments
requiring the Commonwealth to provide expanded services or benefits or pay in-
creased rates, additional operating and capital expenditures might be needed to
implement such judgments.
The Massachusetts Hospital Association has brought an action challenging an el-
ement of the Medicaid rate setting methodologies for hospitals. On October 12,
1993, the case was settled with the hospital association and most acute hospi-
tals, thereby reducing the Commonwealth's potential liability in the pending
case or in related appeals to approximately $10 million.
In addition, there are several tax matters in litigation which could result in
significant refunds to taxpayers if decisions unfavorable to the Commonwealth
are rendered. In BayBank, et al. v. Commissioner of Revenue, the banks chal-
lenge the inclusion of income from tax exempt obligations in the measure of the
bank excise tax. The Appellate Tax Board issued findings of fact and a report
in favor of the Commissioner of Revenue on September 30, 1993. The case is
pending before the Supreme Judicial Court and is expected to be heard in March
1995. Taking into account all banks and all years at issue (1974 through 1986),
there are 142 appeals consolidated in this case. The amount at issue is esti-
mated to be approximately $1.2 billion, which amount includes interest of ap-
proximately $900 million and amounts involved in other related applications for
abatement pending with the Commissioner of Revenue or with the Appellate Tax
Board. The amount of taxes and interest at issue in other cases is approxi-
mately $150 million.
In National Association of Government Employees v. Commonwealth, the Superior
Court declared that a line item in the Commonwealth's general appropriations
act for fiscal 1994 that increased the state employees' percentage share of
their group health insurance premiums from 10% to 15% violated the terms of
several collective bargaining agreements, and therefore was invalid under the
United States Constitution as regards employees covered by the agreements. On
February 9, 1995, the Supreme Judicial Court vacated the Superior Court's deci-
sion and declared that the fiscal 1994 line item did not violate
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the contracts clause. Several other unions have filed a companion suit assert-
ing that the premium increase similarly violated other collective bargaining
agreements. The latter suit is in its initial stages. If the Superior Court de-
cision in favor of the state employees is upheld, the Commonwealth's aggregate
liability is estimated to be approximately $32 million.
A variety of other civil suits pending against the Commonwealth may also affect
its future liabilities. There include challenges to the Commonwealth's alloca-
tion of school aid under Section 9C of Chapter 29 of the General Laws and to
adopt a state employee furlough program. No prediction is possible as to the
ultimate outcome of these proceedings.
Many factors, in addition to those cited above, have or may have a bearing upon
the financial condition of the Commonwealth, including social and economic con-
ditions, many of which are not within the control of the Commonwealth.
Expenditure and Tax Limitation Measures. Limits have been established on state
tax revenues by legislation approved by the Governor on October 25, 1986 and by
an initiative petition approved by the voters on November 4, 1986. The Execu-
tive Office for Administration and Finance currently estimates that state tax
revenues will not reach the limit imposed by either the initiative petition or
the legislative enactment in fiscal 1992.
Proposition 2 1/2, passed by the voters in 1980, led to large reductions in
property taxes, the major source of income for cities and towns and large in-
creases in state aid to offset such revenue losses. According to the Executive
Office for Administration and Finance, all of the 351 cities and towns have now
achieved a property tax level of no more than 2.5% of full property values. Un-
der the terms of Proposition 2 1/2, the property tax levy can now be increased
annually for all cities and towns, almost all by 2.5% of the prior fiscal
year's tax levy plus 2.5% of the value of new properties and of significant im-
provements to property. Legislation has also been enacted providing for certain
local option taxes. A voter initiative petition approved at the statewide gen-
eral election in November, 1990 further regulates the distribution of Local Aid
of no less than 40% of collections from individual income taxes, sales and use
taxes, corporate excise taxes, and the balance of the state lottery fund. If
implemented in accordance with its terms (including appropriation of the neces-
sary funds), the petition as approved would shift several hundred million dol-
lars to direct Local Aid.
Other Tax Measures. To provide revenue to pay debt service on both the deficit
and Medicaid-related borrowings and to fund certain direct Medicaid expendi-
tures, legislation was enacted imposing an additional tax on certain types of
personal income for 1989 and 1990 taxable years at rates of 0.375% and 0.75%,
respectively, effectively raising the tax rate of 1989 from 5% to 5.375% and
for 1990 to 5.75%. Recent legislation has effectively further increased tax
rates to 5.95% for tax year 1990 to 6.25% for tax year 1991 and returning to
5.95% for tax year 1992 and subsequent tax years. The tax is applicable to all
personal income except income derived from dividends, capital gains, unemploy-
ment compensation, alimony, rent, interest, pensions, annuities and IRA/Keogh
distributions. The income tax rate on other interest (excluding interest on ob-
ligations of the United States and of the Commonwealth and its subdivisions),
dividends and net capital gains (after a 50% reduction) was increased from 10%
to 12% for tax year 1990 and subsequent years, by recently enacted legislation.
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Estate Tax Revisions. The fiscal 1993 budget included legislation which gradu-
ally phases out the current Massachusetts estate tax and replaces it with a
"sponge tax" in 1997. The "sponge tax" is based on the maximum amount of the
credit for state taxes allowed for federal estate tax purposes. The estate tax
is phased out by means of annual increases in the basic exemption from the cur-
rent $200,000 level. The exemption is increased to $300,000 for 1993, $400,000
for 1994, $500,000 for 1995 and $600,000 for 1996. In addition, the legislation
includes a full marital deduction starting July 1, 1994. Currently the marital
deduction is limited to 50% of the Massachusetts adjusted gross estate. The
static fiscal impact of the phase out of the estate tax was estimated to be ap-
proximately $24.8 million in fiscal 1994 and is estimated to be approximately
$72.5 million in fiscal 1995.
Other Issuers of Massachusetts Obligations. There are a number of state agen-
cies, instrumentalities and political subdivisions of the Commonwealth that is-
sue Municipal Obligations, some of which may be conduit revenue obligations
payable from payments from private borrowers. These entities are subject to
various economic risks and uncertainties, and the credit quality of the securi-
ties issued by them may vary considerably from the credit quality of obliga-
tions backed by the full faith and credit of the Commonwealth. The brief sum-
mary above does not address, nor does it attempt to address, any difficulties
and the financial situations of those other issuers of Massachusetts Obliga-
tions.
FACTORS PERTAINING TO NEW YORK
As described above, except to the extent the New York Fund invests in temporary
investments, the New York Fund will invest substantially all of its assets in
New York Municipal Obligations. The New York Fund is therefore susceptible to
political, economic or regulatory factors affecting New York State and govern-
mental bodies within New York State. Some of the more significant events and
conditions relating to the financial situation in New York are summarized be-
low. The following information provides only a brief summary of the complex
factors affecting the financial situation in New York, is derived from sources
that are generally available to investors and is believed to be accurate. It is
based on information drawn from official statements and prospectuses issued by,
and other information reported by, the State of New York (the "State"), by its
various public bodies (the "Agencies"), and by other entities located within
the State, including the City of New York (the "City"), in connection with the
issuance of their respective securities.
There can be no assurance that current or future statewide or regional economic
difficulties, and the resulting impact on State or local government finances
generally, will not adversely affect the market value of New York Municipal Ob-
ligations held in the portfolio of the New York Fund or the ability of particu-
lar obligors to make timely payments of debt service on (or relating to) those
obligations.
(1) The State: The State has historically been one of the wealthiest states in
the nation. For decades, however, the State economy has grown more slowly than
that of the nation as a whole, gradually eroding the State's relative economic
affluence. Statewide, urban centers have experienced significant changes in-
volving migration of the more affluent to the suburbs and an influx of gener-
ally less affluent residents. Regionally, the older Northeast cities have suf-
fered because of the relative success that the South and the West have had in
attracting people and business. The City has also had to face greater competi-
tion as other major cities have developed financial and business capabilities
which make them
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less dependent on the specialized services traditionally available almost ex-
clusively in the City, which has had an additional negative impact on New York
City's recovery. The State has for many years had a very high State and local
tax burden relative to other states. The burden of State and local taxation, in
combination with the many other causes of regional economic dislocation, has
contributed to the decisions of some businesses and individuals to relocate
outside, or not locate within, the State.
Slowdown of Regional Economy. A national recession commenced in mid-1990. The
downturn continued throughout the State's 1990-91 fiscal year and was followed
by a period of weak economic growth during the 1991 and 1992 calendar years.
For calendar year 1993, the economy grew faster
than in 1992, but still at a very moderate rate as compared to other recov-
eries. Moderate economic growth continued in calendar year 1994. The State has
projected the rate of economic growth to slow within New York during 1995 as
the expansion of the national economy moderates. Economic recovery started con-
siderably later in the State than in the nation as a whole, due in part to a
significant retrenchment in the banking and financial services industries,
downsizing by major corporations, cutbacks in defense spending, and an oversup-
ply of office buildings. Many uncertainties exist in forecasts of both the na-
tional and State economies and there can be no assurance that the State's econ-
omy will perform at a level sufficient to meet the State's projections of re-
ceipts and disbursements.
1995-96 Fiscal Year. The Governor issued a proposed Executive Budget for the
1995-96 fiscal year (the "Proposed Budget") on February 1, 1995, which pro-
jected a balanced general fund and receipts and disbursements of $32.5 billion
and $32.4 billion, respectively. As of April 17, 1995, the State legislature
had not yet enacted, nor had the Governor and the legislature reached an agree-
ment on, the budget for the 1995-96 fiscal year, which commenced on April 1,
1995. The delay in the enactment of the budget may negatively affect certain
proposed actions and reduce projected savings.
The Proposed Budget and the 1995-96 Financial Plan provide for the closing of a
projected $4.7 billion budget gap in the 1995-96 fiscal year by cost-contain-
ment savings in social welfare programs, savings from State agency
restructurings, freezing the level of some categories of local aid and new rev-
enue measures.
The Proposed Budget and the 1995-96 Financial Plan may be impacted negatively
by uncertainties relating to the economy and tax collections, although recent
signs of improvement in the national economy could lead to short-term increases
in State receipts.
1994-95 Fiscal Year. The State Legislature enacted the State's 1994-95 fiscal
year budget on June 7, 1994, more than two months after the start of that fis-
cal year. As of February 1, 1995, the updated 1994-95 State Financial Plan (the
"Plan") projected total general fund receipts and disbursements of $33.3 bil-
lion and $33.5 billion, respectively, representing reductions in receipts and
disbursements of $1 billion and $743 million, respectively, from the amounts
set forth in the 1994-95 budget. The Plan projected for a General Fund balance
of approximately $157 million at the close of the 1994-95 fiscal year.
1993-94 Fiscal Year. The State ended the 1993-94 fiscal year with an operating
surplus of approximately $1.0 billion.
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Future Fiscal Years. There can be no assurance that the State will not face
substantial potential budget gaps in the future resulting from a significant
disparity between tax revenues projected from a lower recurring receipts base
and the spending required to maintain State programs at current levels. To ad-
dress any potential budgetary imbalance, the State may need to take signifi-
cant actions to align recurring receipts and disbursements.
Indebtedness. As of March 31, 1994, the total amount of long-term State gen-
eral obligation debt authorized but unissued stood at $2.0 billion. As of the
same date, the State had approximately $5.4 billion in general obligation
bonds, including $224 million in bond anticipation notes outstanding.
The State originally projected that its borrowings for capital purposes during
the State's 1994-95 fiscal year would consist of $374 million in general obli-
gation bonds and bond anticipation notes and $140 million in general obliga-
tion commercial paper. The Legislature has authorized the issuance of up to
$69 million in certificates of participation in pools of leases for equipment
and real property to be utilized by State agencies. Through March 15, 1995,
the State had issued in excess of $590 million of its general obligation bonds
(including $430 million of refunding bonds). The projections of the State re-
garding its borrowings for any fiscal year are subject to change if actual re-
ceipts fall short of State projections or if other circumstances require.
In June 1990, legislation was enacted creating the New York Local Government
Assistance Corporation ("LGAC"), a public benefit corporation empowered to is-
sue long-term obligations to fund certain payments to local governments tradi-
tionally funded through the State's annual seasonal borrowing. As of March 31,
1994, LGAC had issued its bonds to provide net proceeds of $4.5 billion. The
LGAC was authorized to provide net proceeds of $315 million during the State's
1994-95 fiscal year. The LGAC issued $347 million of bonds on March 1, 1995,
providing the authorized net proceeds.
Financing of capital programs by other public authorities of the State is also
obtained from lease-purchase and contractual-obligation financing arrange-
ments, the debt service for which is paid from State appropriations. As of
March 31, 1994, there were $16.6 billion of such other financing arrangements
outstanding and additional financings of this nature by public authorities are
projected to total $2.4 billion during the 1994-95 fiscal year. In addition,
certain agencies had issued and outstanding approximately $7.3 billion of
"moral obligation financings" as of March 31, 1994, which are to be repaid
from project revenues. While there has never been a default on moral obliga-
tion debt of the State, the State would be required to make up any shortfall
in debt service.
Ratings. The $850 million in TRANs issued by the State in April 1993 were
rated SP-1 Plus by S&P and MIG-1 by Moody's, which represent the highest rat-
ings given by such agencies and the first time the State's TRANs have received
these ratings since its May 1989 TRANs issuance. Both agencies cited the
State's improved fiscal position as a significant factor in the upgrading of
the April 1993 TRANs.
Moody's rating of the State's general obligation bonds stood at A on February
28, 1994, and S&P's rating stood at A- with a positive outlook, on February
28, 1994, an improvement from S&P's stable outlook from February 1994 through
April 1993 and negative outlook prior to April 1993.
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Previously, Moody's lowered its rating to A on June 6, 1990, its rating having
been A1 since May 27, 1986. S&P lowered its rating from A to A- on January 13,
1992. S&P's previous ratings were A from March 1990 to January 1992, AA- from
August 1987 to March 1990 and A+ from November 1982 to August 1987.
Moody's maintained its A rating and S&P continued its A- rating in connection
with the State's issuance of $537 million of its general obligation bonds in
March 1995.
(2) The City and the Municipal Assistance Corporation ("MAC"): The City ac-
counts for approximately 40% of the State's population and personal income, and
the City's financial health affects the State in numerous ways.
In response to the City's fiscal crisis in 1975, the State took a number of
steps to assist the City in returning to fiscal stability. Among other actions,
the State Legislature (i) created MAC to assist with long-term financing for
the City's short-term debt and other cash requirements and (ii) created the
State Financial Control Board (the "Control Board") to review and approve the
City's budgets and four-year financial plans (the financial plans also apply to
certain City-related public agencies).
In recent years, the rate of economic growth in the City slowed substantially
as the City's economy entered a recession. While by some measures the City's
economy may have begun to recover, a number of factors, including poor perfor-
mance by the City's financial services companies, may prevent a significant im-
provement in the City's economy and may in fact negatively impact upon the
City's finances by reducing tax receipts. The City Comptroller has issued re-
ports concluding that the recession of the City's economy may be ending, but
there is little prospect of any significant improvement in the near term.
Fiscal Year 1996 and the 1995-1998 Financial Plan. On February 14, 1995, the
Mayor released his preliminary $30.5 billion budget for fiscal year 1996, which
included $2.7 billion of deficit reduction measures. The Mayor is seeking a
$1.2 billion reduction in mandated welfare and Medicaid expenditures from the
State, a $569 million reduction in expenditures by City agencies and the Board
of Education budget, the $600 million in personnel related savings partly
through elimination of 15,000 jobs within 18 months, and other measures.
The 1995-1998 Financial Plan (the "Plan"), which was submitted to the Control
Board on February 23, 1995, projected budget gaps of $3.2 and 3.8 billion for
fiscal years 1997 and 1998, respectively. The City Comptroller warned on March
7, 1995 that the budget gap for fiscal year 1996 could increase by $500 million
to as much as $3.2 billion. The Control Board reported on March 17, 1995 that
the proposed budget for fiscal year 1996 relies heavily on risky assumptions
such as $600 million in savings to be negotiated with City unions and $1.4 bil-
lion in savings dependent on State legislative approval.
The City successfully negotiated concessions with a number of unions in order
to ensure that the fiscal year 1995 budget remained in balance. The Mayor has
indicated that to avoid additional lay-offs, higher than the number referred to
above reductions will be necessary in the benefit plans of City
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employees to close the budget gaps for fiscal years 1996 and thereafter. Union
leadership has publicly opposed such "givebacks". With respect to fiscal year
1995 the City was also successful in obtaining additional funds and relief from
certain mandated expenditures from the State for various programs, including
Medicaid. However, the amount of gap closing measures requiring State action
set forth in the Plan is well in excess of proposed assistance to the City out-
lined in the Governor's Proposed Budget. The Mayor has directed City agencies
to identify an additional $300 million in cuts for the fiscal year 1996 because
of anticipated shortfalls in State aid and budgetary actions. An extended delay
by the State in adopting its 1995-96 fiscal year budget would negatively impact
upon the City's financial condition and ability to close budget gaps for fiscal
years 1996 and thereafter.
The Mayor is required to submit an executive budget for fiscal year 1996 to the
City Council by April 26, 1995. Due to continuing uncertainties related to the
amount of State aid, the Mayor has indicated that he may delay submission of
such executive budget.
Given the foregoing, there can be no assurance that the City will continue to
maintain a balanced budget during fiscal year 1996 or thereafter, or that it
can maintain a balanced budget without additional tax or other revenue in-
creases or reductions in City services, which could adversely affect the City's
economic base.
Pursuant to State law, the City prepares a four-year annual financial plan,
which is reviewed and revised on a quarterly basis and which includes the
City's capital, revenue and expense projections. The City is required to submit
its financial plans to review bodies, including the Control Board. If
the City were to experience certain adverse financial circumstances, including
the occurrence or the substantial likelihood and the imminence of the occur-
rence of an annual operating deficit of more than $100 million or the loss of
access to the public credit markets to satisfy the City's capital and seasonal
financial requirements, the Control Board would be required by State law to ex-
ercise certain powers, including prior approval of City financial plans, pro-
posed borrowings and certain contracts.
The City depends on the State for State aid both to enable the City to balance
its budget and to meet its cash requirements. If the State experiences revenue
shortfalls or spending increases beyond its projections during its 1995-96 fis-
cal year or subsequent years, such developments could result in reductions in
projected State aid to the City. In addition, there can be no assurance that
State budgets for the 1996-97 or future fiscal years will be adopted by the
April 1 statutory deadline and that there will not be adverse effects on the
City's cash flow and additional City expenditures as a result of such delays.
The City projections set forth in the Plan are based on various assumptions and
contingencies which are uncertain and which may not materialize. Changes in ma-
jor assumptions could significantly affect the City's ability to balance its
budget as required by State law and to meet its annual cash flow and financing
requirements. Such assumptions and contingencies include the timing of any re-
gional and local economic recovery, the absence of wage increases in excess of
the increases assumed in its financial plan, employment growth, provision of
State and Federal aid and mandate relief, State legislative approval of future
State budgets, levels of education expenditures as may be required by State
law, adoption of future City budgets by the New York City Council, and approval
by the Governor or the
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State Legislature and the cooperation of MAC with respect to various other ac-
tions proposed in the Plan.
The City's ability to maintain a balanced operating budget is dependent on
whether it can implement necessary service and personnel reduction programs
successfully. As discussed above, the City must identify additional expendi-
ture reductions and revenue sources to achieve balanced operating budgets for
fiscal year 1996 and thereafter. Any such proposed expenditure reductions will
be difficult to implement because of their size and the substantial expendi-
ture reductions already imposed on City operations in recent years.
Attaining a balanced budget is also dependent upon the City's ability to mar-
ket its securities successfully in the public credit markets. The City's fi-
nancing program for fiscal years 1995 through 1998 contemplates capital spend-
ing of $16.4 billion, which will be financed through issuance of $10.7 billion
of general obligation bonds and the balance through Water Authority Revenue
Bonds and Covered Organization obligations, and will be used primarily to re-
construct and rehabilitate the City's infrastructure and physical assets and
to make capital investments. A significant portion of such bond financing is
used to reimburse the City's general fund for capital expenditures already in-
curred. In addition, the City issues revenue and tax anticipation notes to fi-
nance its seasonal working capital requirements. The terms and success of pro-
jected public sales of City general obligation bonds and notes will be subject
to prevailing market conditions at the time of the sale, and no assurance can
be given that the credit markets will absorb the projected amounts of public
bond and note sales. In addition, future developments concerning the City and
public discussion of such developments, the City's future financial needs and
other issues may affect the market for outstanding City general obligation
bonds and notes. If the City were unable to sell its general obligation bonds
and notes, it would be prevented from meeting its planned operating and capi-
tal expenditures.
The City is a defendant in a significant number of lawsuits and is subject to
numerous claims and investigations, including, but not limited to, actions
commenced and claims asserted against the City arising out of alleged consti-
tutional violations, torts, breaches of contracts, and other violations of law
and condemnation proceedings. While the ultimate outcome and fiscal impact, if
any, on the proceedings and claims are not currently predictable, adverse de-
terminations in certain of them might have a material adverse effect upon the
City's ability to carry out its financial plan. As of June 30, 1994, the City
estimated its potential future liability on outstanding claims to be $2.6
billion.
On January 30, 1995, Robert L. Schulz and other defendants commenced a federal
district court action seeking among other matters to cancel the issuance on
January 31, 1995 of $659 million of City bonds. While the federal courts have
rejected requests for temporary restraining orders and expedited appeals, the
case is still pending. The City has indicated that it believes the action to
be without merit as it relates to the City, but there can be no assurance as
to the outcome of the litigation and an adverse ruling or the granting of a
permanent injunction would have a negative impact on the City's financial con-
dition and its ability to fund its operations.
Fiscal Year 1995. New York City adopted its 1995 fiscal year budget on June
21, 1994, which provided for spending of $31.6 billion and a closed budget gap
of $2.3 billion. However, following
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adoption of the fiscal year 1995 budget, additional unexpected budget gaps to-
taling approximately $2.0 billion were identified. The widening of the budget
gap for fiscal year 1995 resulted from shortfalls in tax revenues and State and
federal aid. The Mayor and the City Council were unable to reach agreement on
additional cuts proposed by the Mayor in October 1994. The City Council passed
its own budget cut proposal in November 1994. The Mayor vetoed the City Council
version, the City Council overrode his veto and the Mayor implemented his orig-
inal plan. A state court held in December 1994 that neither budget cut proposal
could be implemented. The Mayor then elected not to spend certain funds in or-
der to keep the budget in balance.
Fiscal Years 1990 through 1994. The City achieved balanced operating results in
accordance with generally accepted accounting principles for its 1993 fiscal
year. The City was required to close substantial budget gaps in these fiscal
years in order to maintain balanced operating results.
Ratings. As of the date of this prospectus, Moody's rating of the City's gen-
eral obligation bonds stood at Baa1 and S&P's rating stood at A-. On February
11, 1991, Moody's had lowered its rating from A.
On March 13, 1995, Moody's confirmed its Baa1 rating in connection with a
scheduled March 1995 sale of $795 million of the City's general obligation
bonds.
S&P confirmed its rating of the City's general obligation bonds in connection
with the City's $795 million general obligation bond issue in March 1995. In
January 1995, in response to the City's plan to borrow $120 million to refund
debt due in February without imposing additional cuts in the fiscal 1995 bud-
get, S&P placed the City on negative credit watch and indicated that in April
1995 it would consider a possible downgrade of the City's general obligation
debt from A- to BBB. At the end of March 1995, concerned by published reports
that the Mayor might not produce his executive budget for fiscal year 1996, S&P
suggested that the Mayor should prepare "a budget-balancing contingency plan"
or face the possibility of downgrade of the City's general obligation bonds. As
of April 17, 1995, S&P had not announced any change in its ratings of the
City's debt. Any such rating decrease would negatively affect the marketability
of the City's bonds and significantly increase the City's financing costs.
On October 12, 1993, Moody's increased its rating of the City's issuance of
$650 million of Tax Anticipation Notes ("TANs") to MIG-1 from MIG-2. Prior to
that date, on May 9, 1990, Moody's revised downward its rating on outstanding
City revenue anticipation notes from MIG-1 to MIG-2 and rated the $900 million
notes then being sold MIG-2. S&P's rating of the October 1993 TANs issue in-
creased to SP-1 from SP-2. Prior to that date, on April 29, 1991, S&P revised
downward its rating on City revenue anticipation notes from SP-1 to SP-2.
As of December 31, 1994, the City and MAC had, respectively, $22.5 billion and
$4.1 billion of outstanding net long-term and short-term indebtedness.
(3) The State Agencies: Certain Agencies of the State have faced substantial
financial difficulties which could adversely affect the ability of such Agen-
cies to make payments of interest on, and principal
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amounts of, their respective bonds. The difficulties have in certain instances
caused the State (under so-called "moral obligation" provisions, which are
non-binding statutory provisions for State appropriations to maintain various
debt service reserve funds) to appropriate funds on behalf of the Agencies.
Moreover, it is expected that the problems faced by these Agencies will con-
tinue and will require increasing amounts of State assistance in future years.
Failure of the State to appropriate necessary amounts or to take other action
to permit those Agencies having financial difficulties to meet their obliga-
tions could result in a default by one or more of the Agencies. Such default,
if it were to occur, would be likely to have a significant adverse affect on
investor confidence in, and therefore the market price of, obligations of the
defaulting Agencies. In addition, any default in payment on any general obli-
gation of any Agency whose bonds contain a moral obligation provision could
constitute a failure of certain conditions that must be satisfied in connec-
tion with Federal guarantees of City and MAC obligations and could thus jeop-
ardize the City's long-term financing plans.
As of September 30, 1993, the State reported that eighteen Agencies each had
outstanding debt of $100 million or more and an aggregate of $63.5 billion of
outstanding debt, some of which was State-supported and State-related debt.
(4) State Litigation: The State is a defendant in numerous legal proceedings
pertaining to matters incidental to the performance of routine governmental
operations. Such litigation includes, but is not limited to, claims asserted
against the State arising from alleged torts, alleged breaches of contracts,
condemnation proceedings and other alleged violations of State and Federal
laws. Included in the State's outstanding litigation are a number of cases
challenging the constitutionality or the adequacy and effectiveness of a vari-
ety of significant social welfare programs primarily involving the State's
mental hygiene programs. Adverse judgments in these matters generally could
result in injunctive relief coupled with prospective changes in patient care
which could require substantial increased financing of the litigated programs
in the future.
The State is also engaged in a variety of claims wherein significant monetary
damages are sought. Actions commenced by several Indian nations claim that
significant amounts of land were unconstitutionally taken from the Indians in
violation of various treaties and agreements during the eighteenth and nine-
teenth centuries. The claimants seek recovery of approximately six million
acres of land, as well as compensatory and punitive damages.
The State has entered into a settlement agreement with Delaware, Massachusetts
and all other parties with respect to State of Delaware v. State of New York,
an action by Delaware and other states to recover unclaimed property from New
York-based brokers, which had escheated to the State pursuant to its Abandoned
Property Law. Annual payments under this settlement will be made through the
State's 2002-03 fiscal year in amounts not exceeding $48.4 million in any fis-
cal year subsequent to the State's 1994-95 fiscal year.
In Schulz v. State of New York, commenced May 24, 1993 ("Schulz 1993"), peti-
tioners challenged the constitutionality of mass transportation bonding pro-
grams of the New York State Thruway Authority and the Metropolitan Transporta-
tion Authority. On May 24, 1993, the Supreme Court, Albany County, temporarily
enjoined the State from implementing those bonding programs.
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Petitioners in Schulz 1993 asserted that issuance of bonds by the two Authori-
ties is subject to approval by statewide referendum. By decision dated October
21, 1993, the Appellate Division, Third Department, affirmed the order of the
Supreme Court, Albany County, granting the State's motion for summary judg-
ment, dismissing the complaint and vacating the temporary restraining order.
On June 30, 1994, the Court of Appeals, the State's highest court, upheld the
decisions of the Supreme Court. Plaintiffs' motion for reargument was denied
by the Court of Appeals on September 1, 1994 and their writ of certiorari to
the U.S. Supreme Court was denied on January 23, 1995.
Adverse developments in the foregoing proceedings or new proceedings could ad-
versely affect the financial condition of the State in the future.
(5) Other Municipalities: Certain localities in addition to New York City
could have financial problems leading to requests for additional State assis-
tance. The potential impact on the State of such actions by localities is not
included in projections of State receipts and expenditures in the State's
1994-95 fiscal year.
Fiscal difficulties experienced by the City of Yonkers ("Yonkers") resulted in
the creation of the Financial Control Board for the City of Yonkers (the "Yon-
kers Board") by the State in 1984. The Yonkers Board is charged with oversight
of the fiscal affairs of Yonkers. Future actions taken by the Governor or the
State Legislature to assist Yonkers could result in allocation of State re-
sources in amounts that cannot yet be determined.
Municipalities and school districts have engaged in substantial short-term and
long-term borrowings. In 1992, the total indebtedness of all localities in the
State was approximately $35.2 billion, of which $19.5 billion was debt of New
York City (excluding $5.9 billion in MAC debt). State law requires the Comp-
troller to review and make recommendations concerning the budgets of those lo-
cal government units other than New York City authorized by State law to issue
debt to finance deficits during the period that such deficit financing is out-
standing. Seventeen localities had outstanding indebtedness for State financ-
ing at the close of their fiscal year ending in 1992. In 1992, an unusually
large number of local government units requested authorization for deficit
financings. According to the Comptroller, nine local government units have
been authorized to issue deficit financing in the aggregate amount of $131.1
million. In 1993, five localities were authorized to issue only $5.5 million
in deficit financing indebtedness.
Certain proposed Federal expenditure reductions could reduce, or in some cases
eliminate, Federal funding of some local programs and accordingly might impose
substantial increased expenditure requirements on affected localities to in-
crease local revenues to sustain those expenditures. If the State, New York
City or any of the Agencies were to suffer serious financial difficulties
jeopardizing their respective access to the public credit markets, the market-
ability of notes and bonds issued by localities within the State, including
notes or bonds in the Fund, could be adversely affected. Localities also face
anticipated and potential problems resulting from certain pending litigation,
judicial decisions, and long-range economic trends. The longer-range potential
problems of declining urban population, increasing expenditures, and other
economic trends could adversely affect certain localities and require increas-
ing State assistance in the future.
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(6) Other Issuers of New York Municipal Obligations. There are a number of
other state agencies, instrumentalities and political subdivisions of the
State that issue Municipal Obligations, some of which may be conduit revenue
obligations payable from payments from private borrowers. These entities are
subject to various economic risks and uncertainties, and the credit quality of
the securities issued by them may vary considerably from the credit quality of
obligations backed by the full faith and credit of the State.
TEMPORARY INVESTMENTS
As stated in the Prospectus, the Funds to date have not invested and have no
present intention to invest in "temporary investments" the income from which
is subject to federal income tax. However, the Prospectus also discusses
briefly the ability of each Fund to invest a portion of its assets in such
temporary investments which will not exceed 20% of any Fund's assets except
when made for defensive purposes. The Funds will invest only in temporary in-
vestments which, in the opinion of the Adviser, are of "high grade" quality
and have remaining maturities of 397 days or less.
Temporary investments include obligations of the United States Government, its
agencies or instrumentalities; debt securities of issuers having, at the time
of purchase, a quality rating within the two highest grades by either Moody's
Investors Service, Inc. ("Moody's") or Standard and Poor's Corporation ("S&P")
(Aaa or Aa, or AAA or AA, respectively); commercial paper rated in the highest
grade by either of such rating services (Prime-1 or A-1, respectively); cer-
tificates of deposit of domestic banks with assets of $1 billion or more; and
Municipal Obligations and U.S. Government obligations subject to short-term
repurchase agreements.
Subject to the foregoing limitations, the Funds may invest in the following
temporary investments:
U.S. Government Direct Obligations--issued by the United States Treasury and
include bills, notes and bonds.
--Treasury bills are issued with maturities of up to one year. They are is-
sued in bearer form, are sold on a discount basis and are payable at par
value at maturity.
--Treasury notes are longer-term interest-bearing obligations with original
maturities of one to seven years.
--Treasury bonds are longer-term interest-bearing obligations with original
maturities from five to thirty years.
U.S. Government Agencies Securities--Certain federal agencies have been estab-
lished as instrumentalities of the United States Government to supervise and
finance certain types of activities. These agencies include, but are not lim-
ited to, the Bank for Cooperatives, Federal Land Banks, Federal Intermediate
Credit Banks, Federal Home Loan Banks, Federal National Mortgage Association,
Government National Mortgage Association, Export-Import Bank of the United
States and Tennessee Valley Authority. Issues of these agencies, while not di-
rect obligations of the United States Government, are either backed by the
full faith and credit of the United States or are guaranteed by the Treasury
or supported
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by the issuing agencies' right to borrow from the Treasury. There can be no as-
surance that the United States Government itself will pay interest and princi-
pal on securities as to which it is not so legally obligated.
Certificates of Deposit (CDs)--A certificate of deposit is a negotiable inter-
est-bearing instrument with a specific maturity. CDs are issued by banks in ex-
change for the deposit of funds and normally can be traded in the secondary
market, prior to maturity. The Funds will only invest in U.S. dollar denomi-
nated CDs issued by U.S. banks with assets of $1 billion or more.
Commercial Paper--Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations. Maturities on these issues
vary from a few days to nine months. Commercial paper may be purchased from
U.S. corporations.
Other Corporate Obligations--The Funds may purchase notes, bonds and debentures
issued by corporations if at the time of purchase there is less than 397 days
remaining until maturity or if they carry a variable or floating rate of inter-
est.
Repurchase Agreements--A repurchase agreement is a contractual agreement
whereby the seller of securities (U.S. Government or municipal obligations)
agrees to repurchase the same security at a specified price on a future date
agreed upon by the parties. The agreed upon repurchase price determines the
yield during the Fund's holding period. Repurchase agreements are considered to
be loans collateralized by the underlying security that is the subject of the
repurchase contract. The Funds will only enter into repurchase agreements with
dealers, domestic banks or recognized financial institutions that in the opin-
ion of Nuveen Advisory present minimal credit risk. The risk to the Funds is
limited to the ability of the issuer to pay the agreed-upon repurchase price on
the delivery date; however, although the value of the underlying collateral at
the time the transaction is entered into always equals or exceeds the agreed-
upon repurchase price, if the value of the collateral declines there is a risk
of loss of both principal and interest. In the event of default, the collateral
may be sold but the Funds might incur a loss if the value of the collateral de-
clines, and might incur disposition costs or experience delays in connection
with liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the security, realization upon the col-
lateral by the Funds may be delayed or limited. Nuveen Advisory will monitor
the value of the collateral at the time the transaction is entered into and at
all times subsequent during the term of the repurchase agreement in an effort
to determine that the value always equals or exceeds the agreed-upon repurchase
price. In the event the value of the collateral declines below the repurchase
price, Nuveen Advisory will demand additional collateral from the issuer to in-
crease the value of the collateral to at least that of the repurchase price.
Variable and Floating Rate Investments--See description on page 5.
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RATINGS OF INVESTMENTS
The two highest ratings of Moody's for Municipal Obligations are Aaa and Aa.
Municipal Obligations rated Aaa are judged to be of the "best quality." The
rating of Aa is assigned to Municipal Obligations which are of "high quality by
all standards," but as to which margins of protection or other elements make
long-term risks appear somewhat larger than in Aaa rated Municipal Obligations.
The Aaa and Aa rated Municipal Obligations comprise what are generally known as
"high grade bonds." Moody's bond rating symbols may contain numerical modifiers
of a generic rating classification. The modifier 1 indicates that the bond
ranks at the high end of its category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.
The two highest ratings of S&P for Municipal Obligations are AAA and AA. Munic-
ipal Obligations rated AAA have a strong capacity to pay principal and inter-
est. The rating of AA indicates that capacity to pay principal and interest is
very strong and such bonds differ from AAA issues only in small degree.
The two highest ratings of Moody's and S&P for federally tax-exempt short-term
loans and notes are MIG-1 and MIG-2, or VMIG-1 and VMIG-2 in the case of vari-
able instruments, and SP-1 and SP-2, respectively. Obligations designated MIG-1
or VMIG-1 are the best quality enjoying strong protection from established cash
flows of funds for their servicing or from established and broad-based access
to the market for refinancing, or both. Obligations designated as MIG-2 or
VMIG-2 are high quality obligations with ample margins of protection. The des-
ignation SP-1 indicates a very strong or strong capacity to pay principal and
interest while the designation SP-2 denotes a satisfactory capacity to pay
principal and interest.
The Funds' ability to purchase commercial paper of tax-exempt and corporate is-
suers is limited to commercial paper rated Prime-1 or Prime-2 by Moody's or A-1
or A-2 by S&P. The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers rated P-1 have a superior capacity for repayment
of short-term obligations normally evidenced by the following characteristics:
leading market positions in well-established industries; high rates of return
on funds employed; conservative capitalization structures with moderate reli-
ance on debt and ample asset protection; broad margins in earnings coverage of
fixed financial charges and high internal cash generation; well-established ac-
cess to a range of financial markets and assured sources of alternative liquid-
ity. Issuers rated Prime-2 have a strong capacity for repayment of short-term
promissory obligations. The designation A-1 indicates that the degree of safety
regarding timely payment is very strong, while the designation A-2 denotes a
strong capacity for timely repayment.
Subsequent to its purchase by a Fund, an issue may cease to be rated or its
rating may be reduced below the minimum required for purchase by such Fund.
Neither event requires the elimination of such obligations from the Fund, but
Nuveen Advisory will consider such an event in its determination of whether the
Fund should continue to hold such obligation.
27
<PAGE>
MANAGEMENT
The management of Nuveen Tax-Free Money Market Fund, Inc., including general
supervision of the duties performed by Nuveen Advisory under the Investment
Management Agreement, is the responsibility of its Board of Directors. There
are eight directors of Nuveen Tax-Free Money Market Fund, Inc., two of whom are
"interested persons" (as the term "interested persons" is defined in the In-
vestment Company Act of 1940) and six of whom are "disinterested persons." The
names and business addresses of the directors and officers of the Fund and
their principal occupations and other affiliations during the past five years
are set forth below, with those directors who are "interested persons" of
Nuveen Tax-Free Money Market Fund, Inc. indicated by an asterisk.
<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUNDS DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard J. Franke* 63 Chairman of the Chairman of the Board, Director and for-
333 West Wacker Board and Di- merly President of John Nuveen & Co. In-
Drive rector corporated; Chairman of the Board and Di-
Chicago, IL 60606 rector, formerly President, of Nuveen Ad-
visory Corp.; Chairman of the Board and
Director of Nuveen Institutional Advisory
Corp. (since April 1990); Certified Finan-
cial Planner.
- -------------------------------------------------------------------------------------
Timothy R. 46 President and Executive Vice President and Director of
Schwertfeger* Director The John Nuveen Company (since March 1992)
333 West Wacker and John Nuveen & Co. Incorporated; Direc-
Drive tor of Nuveen Advisory Corp. (since 1992)
Chicago, IL 60606 and Nuveen Institutional Advisory Corp.
(since 1992).
- -------------------------------------------------------------------------------------
Lawrence H. Brown 60 Director Retired (August 1989) as Senior Vice Pres-
201 Michigan Avenue ident of The Northern Trust Company.
Highwood, IL 60040
- -------------------------------------------------------------------------------------
Anne E. Impellizerri 62 Director President of Blanton-Peale, Institutes of
3 West 29th Street Religion and Health (since December 1990);
New York, NY 10001 prior thereto, Vice President of New York
City Partnership (from 1987 to 1990).
- -------------------------------------------------------------------------------------
Margaret K. Rosen- 68 Director Helen Ross Professor of Social Welfare
heim Policy, School of Social Service Adminis-
969 East 60th Street tration, University of Chicago.
Chicago, IL 60637
- -------------------------------------------------------------------------------------
John E. O'Toole 66 Director Retired (January 1994) as President of the
666 Third Avenue American Association of Advertising Agen-
New York, NY 10017 cies, Inc.; retired (December 1985) as
Chairman of the Board of Foote, Cone &
Belding Communications, Inc.
</TABLE>
- --------------------------------------------------------------------------------
28
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUNDS DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Peter R. Sawers 62 Director Adjunct Professor of Business and Econom-
22 The Landmark ics, University of Dubuque, Iowa (since
Northfield, IL 60093 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.
- -------------------------------------------------------------------------------------
Kathleen M. Flanagan 47 Vice President Vice President of John Nuveen & Co. Incor-
333 West Wacker porated.
Drive
Chicago, IL 60606
- -------------------------------------------------------------------------------------
J. Thomas Futrell 39 Vice President Vice President of Nuveen Advisory Corp.
333 West Wacker (since February 1991); prior thereto,
Drive Assistant Vice President of Nuveen
Chicago, IL 60606 Advisory Corp. (from August 1988 to
February 1991); Chartered Financial
Analyst.
- -------------------------------------------------------------------------------------
Steven J. Krupa 37 Vice President Vice President of Nuveen Advisory Corp.
333 West Wacker (since October 1990); prior thereto, Vice
Drive President of John Nuveen & Co. Incorporat-
Chicago, IL 60606 ed.
- -------------------------------------------------------------------------------------
Anna R. Kucinskis 49 Vice President Vice President of John Nuveen & Co. Incor-
333 West Wacker porated.
Drive
Chicago, IL 60606
- -------------------------------------------------------------------------------------
Larry W. Martin 43 Vice President Vice President (since September 1992), As-
333 West Wacker and sistant Secretary and Assistant General
Drive Assistant Sec- Counsel of John Nuveen & Co. Incorporated;
Chicago, IL 60606 retary Vice President (since May 1993) and Assis-
tant Secretary of Nuveen Advisory Corp.;
Vice President (since May 1993) and Assis-
tant Secretary (since January 1992) of
Nuveen Institutional Advisory Corp; Assis-
tant Secretary of The John Nuveen Company
(since February 1993).
- -------------------------------------------------------------------------------------
O. Walter Renfftlen 55 Vice President Vice President and Controller of The John
333 West Wacker and Controller Nuveen Company (since March 1992), John
Drive Nuveen & Co. Incorporated, Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory
Corp. (since April 1990).
</TABLE>
- --------------------------------------------------------------------------------
29
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
POSITIONS AND
OFFICES WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE FUNDS DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thomas C. Spalding, 43 Vice President Vice President of Nuveen Advisory Corp.
Jr. and Nuveen Institutional Advisory Corp.
333 West Wacker (since April 1990); Chartered Financial
Drive Analyst.
Chicago, IL 60606
- ------------------------------------------------------------------------------------------------------------------------------------
H. William Stabenow 60 Vice President Vice President and Treasurer of The John
333 West Wacker and Treasurer Nuveen Company (since March 1992), John
Drive Nuveen & Co. Incorporated, Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory
Corp. (since January 1992).
- ------------------------------------------------------------------------------------------------------------------------------------
George P. Thermos 63 Vice President Vice President of John Nuveen & Co. Incor-
333 West Wacker porated.
Drive
Chicago, IL 60606
- ------------------------------------------------------------------------------------------------------------------------------------
James J. Wesolowski 44 Vice President Vice President, General Counsel and Secre-
333 West Wacker and Secretary tary of The John Nuveen Company (since
Drive March 1992), John Nuveen & Co., Nuveen Ad-
Chicago, IL 60606 visory Corp. and Nuveen Institutional Ad-
visory Corp. (since April 1990).
- ------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman 38 Vice President Vice President (since September 1992), As-
333 West Wacker and sistant Secretary and Assistant General
Drive Assistant Sec- Counsel of John Nuveen & Co. Incorporated,
Chicago, IL 60606 retary Vice President (since May 1993) and Assis-
tant Secretary of Nuveen Advisory Corp.;
Vice President (since May 1993) and Assis-
tant Secretary (since January 1992) of
Nuveen Institutional Advisory Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Richard J. Franke, Timothy R. Schwertfeger and Margaret K. Rosenheim serve as
members of the Executive Committee of the Board of Directors. The Executive
Committee, which meets between regular meetings of the Board of Directors, is
authorized to exercise all of the powers of the Board of Directors.
The directors of Nuveen Tax-Free Money Market Fund, Inc. are also directors or
trustees, as the case may be, of the 19 other Nuveen open-end portfolios and 55
Nuveen closed-end funds.
30
<PAGE>
The following table sets forth compensation paid by Nuveen Tax-Free Money Mar-
ket Fund, Inc. during the fiscal year ended February 28, 1995 to each of the
directors. The Nuveen Tax-Free Money Market Fund, Inc. has no retirement or
pension plans. The officers and directors affiliated with Nuveen serve without
any compensation from the Nuveen Tax-Free Money Market Fund, Inc.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM THE FUND AND
COMPENSATION FUND COMPLEX PAID
NAME OF DIRECTOR FROM THE FUND TO DIRECTORS(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
Richard J. Franke.............................. $ 0 $ 0
Timothy R. Schwertfeger........................ 0 0
Lawrence H. Brown.............................. 467 56,500
Anne E. Impellizzeri........................... 354 48,750
John O'Toole................................... 467 56,000
Margaret K. Rosenheim.......................... 748(2) 64,404(3)
Peter R. Sawers................................ 467 56,000
</TABLE>
(1) The directors of the Nuveen Tax-Free Money Market Fund, Inc. are directors
or trustees, as the case may be, of 21 Nuveen open-end funds and 55 Nuveen
closed-end funds.
(2) Includes $270 in interest earned on deferred compensation from prior years.
(3) Includes $1,404 in interest earned on deferred compensation from prior
years.
Each director who is not employed by Nuveen or Nuveen Advisory will receive a
$45,000 annual retainer for serving as a director of all funds for which Nuveen
Advisory serves as investment adviser and a $1,000 fee per day plus expenses
for attendance at all meetings held on a day on which a regularly scheduled
Board meeting is held, a $1,000 fee per day plus expenses for attendance in
person or a $500 fee per day plus expenses for attendance by telephone at a
meeting held on a day on which no regular board meeting is held and a $250 fee
per day plus expenses for attendance in person or by telephone at a meeting of
the Executive Committee. The retainer, fees and expenses will be allocated
among the funds on the basis of relative net assets. Nuveen Tax-Free Money Mar-
ket Fund, Inc. requires no employees other than its officers, all of whom are
compensated by Nuveen.
The following table sets forth the percentage ownership of each person who owns
of record or is known by the Registrant to own of record 5% or more of any
class of each Fund's shares of the Funds. The Funds believe that none of these
Shares are owned beneficially, but are held as agent for various accounts which
are the beneficial owners.
<TABLE>
<CAPTION>
NAME OF FUND AND CLASS NAME AND ADDRESS OF OWNER PERCENTAGE OF OWNERSHIP
- -------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts Fund Express & Co 86.79%
Service Plan Series......... Attn Mary Richardson
155 Federal St Fl 7
Boston, MA 02110-1727
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
NAME OF FUND AND CLASS NAME AND ADDRESS OF OWNER PERCENTAGE OF OWNERSHIP
- ----------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts Fund Rockland Trust Co 49.68%
Institutional Series... Attn Trust Operations Dept
2036 Washington St
Hanover, MA 02339-1617
Southwest Securities Inc 36.82%
For the Exclusive Benefit of
Our Customers
1201 Elm St Ste 4300
Dallas, TX 75270-2134
New York Fund Henry Epstein 23.10%
Service Plan Series.... Bella Epstein Jt Ten
189 Lindberg Ave
Oceanside, NY 11572-5507
Bertram Notes 9.83%
3165 Nostrand Ave Apt 4E
Brooklyn, NY 11229-3243
Surinder E Lakmanpal 7.72%
6501 Cherylwood Dr Apt 4
Springfield, IL 62707-8658
Shirley R Mast 6.64%
1235 Hatch Rd
Webster, NY 14580-2422
Helen A Bozek 6.16%
Fred Bozek Jt Wros
496 Avanti Way Boulevard
North Fort Myers, FL 33903
Alfred A Towle & 6.05%
Alice Towle Tr
UA May 19 94
Towle Family Trust
P.O. Box 205
Wingdale, NY 12594-0205
New York Fund Estate of Edith Atlas 18.30%
Distribution Plan Se- Sandra & Norton Bass Executors
ries................... 185 Great Neck Rd
Great Neck, NY 11021-3312
Sandra Bass 11.18%
47 Deer Park Rd
Great Neck, NY 11024-2138
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
NAME OF FUND AND CLASS NAME AND ADDRESS OF OWNER PERCENTAGE OF OWNERSHIP
- -------------------------------------------------------------------------------
<S> <C> <C>
Madeline Pollock & 6.14%
Scott G Pollock
JT Ten Wros Not Tc
1740 White St
Bellmore, NY 11710-2932
New York Fund Nuveen Advisory Corp., Inc 99.95%
Institutional Series....... Attn Darlene Cramer
333 W Wacker Dr Fl 34
Chicago, IL 60606-1218
</TABLE>
INVESTMENT ADVISER AND INVESTMENT MANAGEMENT AGREEMENT
Nuveen Advisory acts as investment adviser for Nuveen Tax-Free Money Market
Fund, Inc. and in such capacity manages the investment and reinvestment of the
assets of each Fund. Nuveen Advisory also administers Nuveen Tax-Free Money
Market Fund, Inc.'s business affairs, provides office facilities and equipment
and certain clerical, bookkeeping and administrative services, and permits any
of its officers or employees to serve without compensation as directors or of-
ficers of Nuveen Tax-Free Money Market Fund, Inc. if elected to such positions.
See "Management of the Funds" in the Prospectus.
Nuveen Advisory is paid an annual management fee with respect to each Fund at
the rates set forth below which are based upon the average daily net asset
value of each Fund.
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET
VALUE MANAGEMENT FEE
- ------------------------------------------
<S> <C>
For the first $500 million .400 of 1%
For the next $500 million .375 of 1%
For assets over $1 billion .350 of 1%
</TABLE>
The management fees will be reduced or Nuveen Advisory will assume certain ex-
penses of each series of each Fund in amounts necessary to prevent the total
expenses of each series of each Fund in any fiscal year from exceeding .55 of
1% of the average daily net asset value of each series.
<TABLE>
<CAPTION>
FEE WAIVERS AND
NET MANAGEMENT FEES EXPENSE REIMBURSEMENTS
PAID TO NUVEEN ADVISORY FOR
FOR THE YEAR ENDED THE YEAR ENDED FEBRUARY
FEBRUARY 28, 28,
-------------------------- ------------------------
1993 1994 1995 1993 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Massachusetts Fund.......... $162,130 $226,631 $186,808 $174,592 $66,068 $96,303
New York Fund............... 62,602 49,139 47,656 103,746 76,018 71,808
Total For Both Funds........
</TABLE>
As discussed in the Prospectus, in addition to the management fees of Nuveen
Advisory, each Fund pays all other costs and expenses of its operations and a
portion of the Funds' general administrative expenses allocated in proportion
to the net assets of each Fund, including each Fund's share of payments under
the Distribution and Service Plans.
33
<PAGE>
Nuveen Advisory is a wholly-owned subsidiary of John Nuveen & Co. Incorporated
("Nuveen"), the Funds' principal underwriter. Founded in 1898, Nuveen is the
oldest and largest investment banking firm specializing in the underwriting
and distribution of tax-exempt securities and maintains the largest research
department in the investment banking community devoted exclusively to the
analysis of municipal securities. In 1961, Nuveen began sponsoring the Nuveen
Tax-Exempt Unit Trust and since that time has issued more than $34 billion in
tax-exempt unit trusts, including over $12 billion tax-exempt insured unit
trusts. In addition, Nuveen open-end and closed-end funds held approximately
$30 billion in tax-exempt securities under management as of the date of this
Statement. Over 1,000,000 individuals have invested to date in Nuveen's tax-
exempt funds and trusts. Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 75% owned by The St. Paul Companies, Inc.
("St. Paul"). St. Paul is located in St. Paul, Minnesota, and is principally
engaged in providing property-liability insurance through subsidiaries.
Nuveen Advisory's portfolio managers call upon the resources of Nuveen's Re-
search Department, the largest in the investment banking industry devoted ex-
clusively to tax-exempt securities. Nuveen's Research Department was selected
in 1994 by Research & Ratings Review, a municipal industry publication, as one
of the top four research teams in the municipal industry, based on an exten-
sive industry-wide poll of more than 1,000 portfolio managers, department
heads and bond buyers. The Nuveen Research Department reviews more than $100
billion in tax-exempt bonds every year.
The Funds, the other Nuveen funds, Nuveen Advisory, and other related entities
have adopted a code of ethics which essentially prohibits all Nuveen fund man-
agement personnel, including Nuveen fund portfolio managers, from engaging in
personal investments which compete or interfere with, or attempt to take ad-
vantage of, a Fund's anticipated or actual portfolio transactions, and is de-
signed to assure that the interest of Fund shareholders are placed before the
interest of Nuveen personnel in connection with personal investment transac-
tions.
PORTFOLIO TRANSACTIONS
Nuveen Advisory, in effecting purchases and sales of portfolio securities for
the account of each Fund, will place orders in such manner as, in the opinion
of management, will offer the best price and market for the execution of each
transaction. Portfolio securities will normally be purchased directly from an
underwriter or in the over-the-counter market from the principal dealers in
such securities, unless it appears that a better price or execution may be ob-
tained elsewhere. Portfolio securities will not be purchased from Nuveen or
its affiliates except in compliance with the Investment Company Act of 1940.
The Funds expect that all portfolio transactions will be effected on a princi-
pal (as opposed to an agency) basis and, accordingly, do not expect to pay any
brokerage commissions.
Purchases from underwriters will include a commission or concession paid by
the issuer to the underwriter, and purchases from dealers will include the
spread between the bid and asked price. Given the best price and execution ob-
tainable, it will be the practice of the Funds to select dealers which, in
34
<PAGE>
addition, furnish research information (primarily credit analyses of issuers)
and statistical and other services to Nuveen Advisory. It is not possible to
place a dollar value on information and statistical and other services re-
ceived from dealers. Since it is only supplementary to Nuveen Advisory's own
research efforts, the receipt of research information is not expected to re-
duce significantly Nuveen Advisory's expenses. Any research benefits obtained
are available to all of Nuveen Advisory's other clients. While Nuveen Advisory
will be primarily responsible for the placement of the business of the Funds,
the policies and practices of Nuveen Advisory in this regard must be consis-
tent with the foregoing and will, at all times, be subject to review by the
Board of Directors of Nuveen Tax-Free Money Market Fund, Inc.
Nuveen Advisory reserves the right to, and does, manage other investment ac-
counts and investment companies or other clients which may have investment ob-
jectives similar to the Funds. Subject to applicable laws and regulations,
Nuveen Advisory will attempt to allocate equitably portfolio transactions
among the Funds and the portfolios of its other clients purchasing securities
whenever decisions are made to purchase or sell securities by the Funds and
one or more of such other clients simultaneously. In making such allocations
the main factors to be considered will be the respective investment objectives
of the Funds and such other clients, the relative size of portfolio holdings
of the same or comparable securities, the availability of cash for investment
by the Funds and such other clients, the size of investment commitments gener-
ally held by the Funds and such other clients and opinions of the persons re-
sponsible for recommending investments to the Funds and such other clients.
While this procedure could have a detrimental effect on the price or amount of
the securities available to the Funds from time to time, it is the opinion of
Nuveen Tax-Free Money Market Fund, Inc.'s Board of Directors that the benefits
available from Nuveen Advisory's organization outweigh any disadvantage that
may arise from exposure to simultaneous transactions.
Under the Investment Company Act of 1940, the Funds may not purchase portfolio
securities from any underwriting syndicate of which Nuveen is a member except
under certain limited conditions set forth in Rule 10f-3. The Rule sets forth
requirements relating to, among other things, the terms of an issue of Munici-
pal Obligations purchased by the Funds, the amount of Municipal Obligations
which may be purchased in any one issue and the proportion of the assets of
the Funds which may be invested in a particular issue. In addition, purchases
of securities made pursuant to the terms of the Rule must be approved at least
quarterly by the Board of Directors of Nuveen Tax-Free Money Market Fund,
Inc., including a majority of the members thereof who are not interested per-
sons of Nuveen Tax-Free Money Market Fund, Inc.
NET ASSET VALUE
As stated in the Prospectus, the net asset value of the shares of each Fund
will be determined by United States Trust Company of New York, Nuveen Tax-Free
Money Market Fund, Inc.'s custodian, as of 12:00 noon, eastern time on each
day on which the Federal Reserve Bank of Boston is normally open for business
and as of 12:00 noon, eastern time on any other day during which there is a
sufficient degree of trading in the Funds' portfolio securities that the cur-
rent net asset value of the shares of
35
<PAGE>
the Funds might be materially affected by changes in the value of the portfolio
securities. The Federal Reserve Bank of Boston is not open for business on New
Year's Day, Washington's Birthday, Martin Luther King's Birthday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and
Christmas Day. The net asset value per share of each Fund will be computed by
dividing the sum of the value of the portfolio securities held by such Fund,
plus any cash or assets, less liabilities, by the total number of shares of
such Fund outstanding at such time.
Nuveen Tax-Free Money Market Fund, Inc. will seek to maintain a net asset value
of $1.00 per share for each of the Funds. In this connection, Nuveen Tax-Free
Money Market Fund, Inc. intends to value the portfolio securities of each Fund
at their amortized cost, as permitted by Rule 2a-7 under the Investment Company
Act of 1940. This method does not take into account unrealized securities gains
or losses. It involves valuing an instrument at its cost on the date of pur-
chase and thereafter assuming a constant amortization to maturity of any dis-
count or premium. While this method provides certainty in valuation, it may re-
sult in periods during which the value of an investment, as determined by amor-
tized cost, is higher or lower than the price the Funds would receive if it
sold the instrument. During periods of declining interest rates, the daily
yield on shares held in the Funds may tend to be higher than a like computation
made by a fund with identical investments utilizing a method of valuation based
upon market prices and estimates of market prices for all of its portfolio in-
struments. Thus, if the use of the amortized cost method by the Funds resulted
in a lower aggregate portfolio value on a particular day, a prospective in-
vestor in the Funds would be able to obtain a somewhat higher yield than would
result from an investment in a fund utilizing solely market values, and exist-
ing investors in the Funds would receive less investment income. The converse
would apply in a period of rising interest rates.
The Funds, as a condition to the use of amortized cost and the maintenance of
its per share net asset value of $1.00, must maintain a dollar-weighted average
portfolio maturity of 120 days or less, only purchase instruments having re-
maining maturities of one year or less, and invest only in securities deter-
mined to be of high quality with minimal credit risks. The Funds may invest in
variable and floating rate instruments even if they carry stated maturities in
excess of 397 days, upon certain conditions contained in rules and regulations
issued by the Securities and Exchange Commission (the "Commission") under the
Investment Company Act of 1940, but will do so only if there is a secondary
market for such instruments or if they carry demand features, permissible under
rules of the Commission for money market funds, to recover the full principal
amount thereof upon specified notice at par, or both.
The Board of Directors, pursuant to the requirements of Rule 2a-7, has estab-
lished procedures designed to stabilize, to the extent reasonably possible, the
Funds' price per share as computed for the purpose of sales and redemptions at
$1.00. Such procedures will include review of the portfolio holdings of the
Funds by the Board of Directors, at such intervals as it may deem appropriate,
to determine whether the net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share based on amor-
tized cost. Market quotations and market equivalents used in such review may be
obtained from a pricing agent approved by the Board of Directors. The Board has
selected Nuveen Advisory to act as pricing agent, but in the future may select
an independent pricing service to perform this function. In serving as pricing
agent, Nuveen Advisory will follow
36
<PAGE>
guidelines adopted by the Board, and the Board will monitor Nuveen Advisory to
see that the guidelines are followed. The pricing agent will value the invest-
ments in the Funds based on methods which include consideration of: yield or
prices of municipal obligations of comparable quality, coupon, maturity and
type; indications as to value from dealers; and general market conditions. The
pricing agent may employ electronic data processing techniques and/or a matrix
system to determine valuations. The extent of any deviation between the net as-
set value of a Fund based on the pricing agent's market valuation and $1.00 per
share based on amortized cost will be examined by the Board of Directors. If
such deviation exceeds 1/2 of 1%, the Board of Directors will promptly consider
what action, if any, will be initiated. In the event the Board of Directors de-
termines that a deviation exists which may result in material dilution or other
unfair results to investors or existing shareholders, it has agreed to take
such corrective action as it regards as necessary and appropriate, including
the sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends or pay-
ment of distributions from capital or capital gains; redemption of shares in
kind; or establishing a net asset value per share by using available market
quotations.
TAX MATTERS
FEDERAL INCOME TAX MATTERS
The following discussion of federal income tax matters is based upon the advice
of Fried, Frank, Harris, Shriver and Jacobson, Washington, D.C., counsel to the
Funds.
As described in the Prospectus, each Fund intends to qualify, as it has in
prior years, under Subchapter M of the Internal Revenue Code of 1986 (the
"Code") for tax treatment as a regulated investment company. In order to qual-
ify as regulated investment company, a Fund must satisfy certain requirements
relating to the source of its income, diversification of its assets, and dis-
tributions of its income to shareholders. First, a Fund must derive at least
90% of its annual gross income (including tax-exempt interest) from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock or securities, foreign currencies or other income
(including but not limited to gains from options and futures) derived with re-
spect to its business of investing in such stock or securities (the "90% gross
income test"). Second, a Fund must derive less than 30% of its annual gross in-
come from the sale or other disposition of any of the following which was held
for less than three months: (i) stock or securities and (ii) certain options,
futures, or forward contracts (the "short-short test"). Third, a Fund must di-
versify its holdings so that, at the close of each quarter of its taxable year,
(i) at least 50% of the value of its total assets is comprised of cash, cash
items, United States Government securities, securities of other regulated in-
vestment companies and other securities limited in respect of any one issuer to
an amount not greater in value than 5% of the value of a Fund's total assets
and to not more than 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of the total assets it invested in the
securities of any one issuer (other than United States Government securities
and securities of other regulated investment companies) or two or more issuers
controlled by a Fund and engaged in the same, similar or related trades or
businesses.
As a regulated investment company, a fund will not be subject to U.S. federal
income tax in any taxable year for which it distributes at least 90% of its
"investment company taxable income" (which includes dividends, taxable inter-
est, taxable original issue discount and market discount income, in
37
<PAGE>
come from securities lending, net short-term capital gain in excess of long-
term capital loss, and any other taxable income other than "net capital gain"
(as defined below) and is reduced by deductible expenses) and at least 90% of
the excess of its gross tax-exempt interest income over certain disallowed de-
ductions ("net tax-exempt interest").
Each Fund also intends to satisfy conditions (including requirements as to the
proportion of its assets invested in Municipal Obligations) which will enable
it to designate distributions from the interest income generated by its invest-
ment in Municipal Obligations, which is exempt from regular federal income tax
when received by such Fund, as Exempt Interest Dividends. Shareholders receiv-
ing Exempt Interest Dividends will not be subject to federal income tax on the
amount of such dividends.
Distributions by each Fund of net interest income received from certain taxable
temporary investments (such as certificates of deposit, commercial paper and
obligations of the United States Government, its agencies and instrumentali-
ties) and net short-term capital gains realized by a Fund, if any, will be tax-
able to shareholders as ordinary income whether received in cash or additional
shares. If a Fund purchases a Municipal Obligation at a market discount, any
gain realized by the Fund upon sale or redemption of the Municipal Obligation
will be treated as taxable interest income to the extent such gain does not ex-
ceed the market discount, and any gain realized in excess of the market dis-
count will be treated as capital gains. Any net long-term capital gains real-
ized by a Fund and distributed to shareholders in cash or additional shares
will be taxable to shareholders as long-term capital gains regardless of the
length of time investors have owned shares of a Fund. The Funds do not expect
to realize significant long-term capital gains. Because the taxable portion of
each Fund's investment income consists primarily of interest, none of its divi-
dends, whether or not treated as exempt-interest dividends, is expected to
qualify under the Internal Revenue Code for the dividends received deductions
for corporations.
If a Fund has both tax-exempt and taxable interest income, it will use the "ac-
tual earned method" for determining the designated percentage that is taxable
income and designate the use of such method within 60 days after the end of
Nuveen Tax-Free Money Market Fund, Inc.'s taxable year. Under this method the
ratio of (a) taxable income earned during the period for which a distribution
was made, to (b) total income earned during the period, determines the percent-
age of the distribution designated taxable. The percentage of income, if any,
designated as taxable under this method will vary from distribution to distri-
bution.
38
<PAGE>
Although dividends generally will be treated as distributed when paid, divi-
dends declared in October, November or December, payable to shareholders of
record on a specified date in one of those months and paid during the following
January, will be treated as having been distributed by each Fund (and received
by the shareholders) on December 31.
The redemption or exchange of the shares of a Fund is not expected to result in
capital gain or loss to the shareholders because the Fund's net asset value is
expected to remain constant at $1.00 per share. To the extent that the Fund's
net asset value is greater or lesser than $1.00 per share, redemptions or ex-
changes may result in capital gain or loss to the shareholder.
The redemption or exchange of the shares of a Fund is not expected to result in
capital gain or loss to the shareholders because the Fund's net asset value is
expected to remain constant at $1.00 per share.
To the extent that the Fund's net asset value is greater or lesser than $1.00
per share, redemptions or exchanges may result in capital gain or loss to the
shareholder.
In order to avoid a 4% federal excise tax, each Fund must distribute or be
deemed to have distributed by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of the excess of its
realized capital gains over its realized capital losses (generally computed on
the basis of the one-year period ending on October 31 of such year) and 100% of
any taxable ordinary income and the excess of realized capital gains over real-
ized capital losses for the prior year that was not distributed during such
year and on which such Fund paid no federal income tax. The Funds intend to
make timely distributions in compliance with these requirements and conse-
quently it is anticipated that they generally will not be required to pay the
excise tax.
If in any year a Fund should fail to qualify under Subchapter M for tax treat-
ment as a regulated investment company, the Fund would incur a regular corpo-
rate federal income tax upon its income for that year, other than interest in-
come from Municipal Obligations, and distributions to its shareholders out of
net interest income from Municipal Obligations or other investments, or out of
net capital gains, would be taxable to shareholders as ordinary dividend income
for federal income tax purposes to the extent of the Fund's available earnings
and profits.
Among the requirements that the Fund must meet in order to qualify under
Subchapter M in any year is that less than 30% of its gross income must be de-
rived from the sale or other disposition of securities held for less than three
months.
As stated in the Prospectus under "Dividends and Taxes," the Funds may invest
in the type of private activity bonds the interest on which is not federally
tax-exempt to persons who are "substantial users" of the facilities financed by
such bonds or "related persons" of such substantial users." Accordingly, the
Funds may not be appropriate investments for shareholders who are considered
either a "substantial user" or a "related person" within the meaning of the
Code. In general, a "substantial user" of a facility financed from the proceeds
of private activity bonds includes a "non-exempt person who regularly uses a
part of such facility in his trade or business." "Related persons" are in gen-
eral defined to include persons among whom there exists a relationship either
by family or business, which would result in a disallowance of losses in trans-
actions among them under various provisions of the Code (or if they are members
of the same controlled group of corporations under the Code). For certain pri-
vate
39
<PAGE>
activity bonds, this includes a partnership and each of its partners (including
their spouses and minor children) and an S corporation and each of its share-
holders (and their spouses and minor children). Various combinations of these
relationships may also constitute "related persons" under the Code. The forego-
ing is not a complete statement of all of the provisions of the Code covering
the definitions of "substantial user" and "related person." For additional in-
formation, investors should consult their tax advisers before investing in the
Funds.
Federal tax law imposes an alternative minimum tax with respect to both corpo-
rations and individuals. Interest on certain Municipal Obligations, such as
bonds issued to make loans for housing purposes or to private entities (but not
for certain tax-exempt organizations such as universities and non-profit hospi-
tals), is included as an item of tax preference in determining the amount of a
taxpayer's alternative minimum taxable income. To the extent that a Fund re-
ceives income from Municipal Obligations subject to the alternative minimum
tax, a portion of the dividends paid by it, although otherwise exempt from fed-
eral income tax, will be taxable to shareholders to the extent that their tax
liability is determined under the alternative minimum tax regime.
The Funds will annually supply shareholders with a report indicating the per-
centage of Fund income attributable to Municipal Obligations subject to the
federal alternative minimum tax.
In addition, the alternative minimum taxable income for corporations is in-
creased by 75% of the difference between an alternative measure of income ("ad-
justed current earnings") and the amount otherwise determined to be the alter-
native minimum taxable income. Interest on all Municipal Obligations, and
therefore all distributions by a Fund that would otherwise be tax-exempt, is
included in calculating the alternative measures of a corporation's taxable in-
come.
Individuals whose "modified income" exceeds a base amount will be subject to
Federal income tax on up to one-half of their social security or railroad re-
tirement benefits. Modified income currently includes adjusted gross income,
one-half of social security benefits and tax-exempt interest, including exempt-
interest dividends from the Fund. Individuals whose modified income exceeds
certain base amounts are required to include in gross income up to 85% of their
social security benefits.
The Code provides that interest on indebtedness incurred or continued to pur-
chase or carry shares of any Fund is not deductible. Under rules used by the
IRS for determining when borrowed funds are considered used for the purpose of
purchasing or carrying particular assets, the purchase of shares of a Fund may
be considered to have been made with borrowed funds even though such funds are
not directly traceable to the purchase of shares.
Each Fund is required in certain circumstances to withhold 31% of taxable divi-
dends and certain other payments paid to non-corporate holders of shares who
have not furnished to the Fund their correct taxpayer identification number (in
the case of individuals, their social security number) and certain certifi-
cates, or who are otherwise subject to back-up withholding.
The foregoing is a general and abbreviated summary of the provisions of the
Code and Treasury Regulations presently in effect as they directly govern the
taxation of the Funds and their shareholders. For complete provisions, refer-
ence should be made to the pertinent Code sections and Treasury Regula-
40
<PAGE>
tions. The Code and Treasury Regulations are subject to change by legislative
or administrative action, and any such change may be retroactive with respect
to transactions of the Funds. Shareholders are advised to consult their own
tax advisers for more detailed information concerning the federal taxation of
the Funds and the income tax consequences to their shareholders.
STATE TAX MATTERS
Massachusetts. Individual shareholders of the Massachusetts Fund who are sub-
ject to Massachusetts income taxation will not be required to include that
portion of their federally tax-exempt dividends in Massachusetts gross income
which the Massachusetts Fund clearly identifies as directly attributable to
interest earned on Municipal Obligations issued by governmental authorities in
Massachusetts and which are specifically exempted from income taxation in Mas-
sachusetts; provided that such portion is identified in a written notice
mailed to the shareholders of the Massachusetts Fund not later than sixty days
after the close of the Massachusetts Fund's tax year. Also, the individual
shareholders of the Massachusetts Fund will not be required to include in
gross income interest earned on obligations of United States possessions and
territories to the extent interest earned on such obligations is exempt from
taxation by the states pursuant to federal law.
Similarly, such shareholders will not be required to include in Massachusetts
gross income capital gain dividends designated by the Massachusetts Fund to
the extent such dividends are attributable to gains derived from Municipal Ob-
ligations issued by Massachusetts governmental authorities and are specifi-
cally exempted from income taxation in Massachusetts, provided that such divi-
dends are identified in a written notice mailed to the shareholders of the
Massachusetts Fund not later than sixty days after the close of the Massachu-
setts Fund's tax year. Lastly, any dividends of the Massachusetts Fund attrib-
utable to interest on U.S. obligations exempt from state taxation and included
in Federal gross income will not be included in Massachusetts gross income if
identified by the Massachusetts Fund in a written notice mailed to sharehold-
ers within sixty days after the close of the Massachusetts Fund's tax year.
Massachusetts shareholders will be required to include all remaining dividends
in their Massachusetts income.
To the extent not otherwise exempted from Massachusetts income taxation as
provided above, the Massachusetts Fund's long-term capital gains for federal
income tax purposes will be taxed as long-term capital gains to the individual
shareholders of the Massachusetts Fund for purposes of Massachusetts income
taxation. Massachusetts shareholders will be required to recognize any taxable
gain or loss that is recognized for federal income tax purposes upon an ex-
change or redemption of their shares.
If a shareholder of the Massachusetts Fund is a Massachusetts business corpo-
ration or any foreign business corporation which exercises its charter, quali-
fies to do business, actually does business or owns or uses any part of its
capital, plant or other property in Massachusetts, then it will be subject to
Massachusetts excise taxation either as a tangible property corporation or as
an intangible property corporation. If the corporate shareholder is a tangible
property corporation, it will be taxed upon its net income allocated to Massa-
chusetts and the value of certain tangible property. If it is an intangible
property corporation, it will be taxed upon its net income and net worth allo-
cated to Massachusetts. Net income is gross income less allowable deductions
for federal income tax purposes, subject to specified modifications. Dividends
received from the Massachusetts Fund are includable in gross in-
41
<PAGE>
come and generally may not be deducted by a corporate shareholder in computing
its net income. The corporation's shares in the Massachusetts Fund are not
includable in the computation of the tangible property base of a tangible
property corporation, but are includable in the computation of the net worth
base of an intangible property corporation.
Shares of the Massachusetts Fund will be includable in the Massachusetts gross
estate of a deceased individual shareholder who is a resident of Massachusetts
for purposes of the Massachusetts Estate Tax.
Shares of the Massachusetts Fund will be exempt from local property taxes in
Massachusetts.
New York. Individual shareholders of the New York Fund who are subject to New
York State (or New York City) personal income taxation will not be required to
include in their New York adjusted gross income that portion of their exempt-
interest dividends (as determined for federal income tax purposes) which the
New York Fund clearly identifies as directly attributable to interest earned
on Municipal Obligations issued by governmental authorities in New York ("New
York Municipal Obligations") and which are specifically exempted from personal
income taxation in New York State (or New York City), or interest earned on
obligations of United States possessions or territories to the extent interest
earned on such obligations is exempt from taxation by the states pursuant to
federal law. Distributions to individual shareholders of dividends derived
from interest that does not qualify as an exempt-interest dividend (as deter-
mined for federal income tax purposes), distributions of exempt-interest divi-
dends (as determined for federal income tax purposes) which are derived from
interest earned on Municipal Obligations issued by governmental authorities in
states other than New York State, and distributions derived from interest
earned on federal obligations will be included in their New York adjusted
gross income as ordinary income.
Distributions to individual shareholders of the New York Fund of capital gain
dividends (as determined for federal income tax purposes) will be included in
their New York adjusted gross income as long-term capital gains. Distributions
to individual shareholders of the New York Fund of dividends derived from any
net income received from taxable temporary investments and any net short-term
capital gains realized by the New York Fund will be included in their New York
adjusted gross income as ordinary income. Present New York law taxes long-term
capital gains at the rates applicable to ordinary income.
Gain or loss, if any, resulting from an exchange or redemption of shares of
the New York Fund that is recognized by individual shareholders of the New
York Fund for federal income tax purposes will be recognized for purposes of
New York State (or New York City) personal income taxation.
Generally, corporate shareholders of the New York Fund which are subject to
New York State franchise taxation (or New York City general corporation taxa-
tion) will be taxed upon their entire net income, business and investment cap-
ital, or at a flat rate minimum tax. Entire income will include dividends re-
ceived from the New York Fund (as determined for federal income tax purposes),
as well as any gain or loss recognized from an exchange or redemption of
shares of the New York Fund that is recognized for federal income tax purpos-
es. Investment capital will include the corporate shareholder's shares of the
New York Fund. Corporate shareholders of the New York Fund, which are subject
to the
42
<PAGE>
temporary metropolitan transportation surcharge, will be required to pay a tax
surcharge on the franchise taxes imposed by New York State.
Shareholders of the New York Fund will not be subject to New York City unin-
corporated business taxation solely by reason of their ownership of shares of
the New York Fund. If a shareholder of the New York Fund is subject to the New
York City unincorporated business tax, income and gains derived from the New
York Fund will be subject to such tax, except for exempt-interest dividends
(as determined for federal income tax purposes) which the New York Fund
clearly identifies as directly attributable to interest earned on New York Mu-
nicipal Obligations.
Shares of the New York Fund will be exempt from local property taxes in New
York State and New York City, but will be includible in the New York gross es-
tate of a deceased individual holder who is a resident of New York for pur-
poses of the New York Estate Tax.
The foregoing is a general and abbreviated summary of some of the important
state tax provisions of designated states presently in effect as they directly
govern the taxation of the Funds or their shareholders. The foregoing state
tax information assumes that each Fund qualifies as a regulated investment
company for federal income tax purposes under subchapter M of the Code, and
that the amounts so designated by each Fund to its shareholders qualify as
"exempt-interest dividends" under Section 852(b)(5) of the Code. These state
provisions are subject to change by legislative or administrative action, and
any such change may be retroactive with respect to transactions of the Funds.
Shareholders of the Funds are advised to consult their own tax advisers in
that regard.
ADDITIONAL INFORMATION ON THE PURCHASE OF FUND SHARES
Shares of each Fund may be purchased at the net asset value which is next com-
puted after receipt of an order, provided payment in federal funds is received
as described in the Prospectus. Shares of each Fund are issued in three se-
ries: (i) the Service Plan series, (ii) the Distribution Plan series, and
(iii) the Institutional series. There is no sales charge on purchases of
shares of any series of the Fund.
As discussed in the Prospectus under "How to Purchase Fund Shares--Distribu-
tion and Service Plans," each Fund has adopted Distribution and Service Plans
(the "Plans") with respect to its shares of the Distribution Plan series and
the Service Plan series. The Plans were adopted by a vote of the Board of Di-
rectors of Nuveen Tax-Free Money Market Fund, Inc., including a majority of
the directors who are not interested persons of Nuveen Tax-Free Money Market
Fund, Inc. and who have no direct or indirect financial interest in the opera-
tion of the Plans. Under the Plans, the Distribution Plan series and the Serv-
ice Plan series of each Fund and Nuveen pay fees (i) in the case of the Serv-
ice Plan series, to banks and other organizations described in the Prospectus
for the servicing of accounts of shareholders of such series and (ii) in the
case of the Distribution Plan series, to securities dealers for services ren-
dered in the distribution of the shares of such series. In each case, such
services may include, among other things, establishing and maintaining share-
holder accounts, processing purchase and redemption transactions, arranging
for bank wires, performing sub-accounting, answering shareholder inquiries and
such other services as Nuveen may request. Payments to such securities dealers
and banks or other
43
<PAGE>
organizations will be at the rate of .25 of 1% per year of the average assets
of serviced accounts. A portion of such amounts will be paid by the Service
Plan series and the Distribution Plan series of each Fund and a portion by
Nuveen. For the fiscal year ended February 28, 1995, Nuveen Tax-Free Money Mar-
ket Fund, Inc. paid fees to banks and other organizations under the Service
Plan in the amount of $46,919 in connection with the Massachusetts Fund and
$266 in connection with the New York Fund. For the same period, Nuveen Tax-Free
Money Market Fund, Inc. paid fees to securities dealers under the Distribution
Plan in the amount of $22,886 in connection with the Massachusetts Fund and
$12,446 in connection with the New York Fund.
Under the Plans, the Controller or the Treasurer of Nuveen Tax-Free Money Mar-
ket Fund, Inc. will report quarterly to the Board of Directors for its review
amounts expended for services rendered under the Plans. The Plans may be termi-
nated at any time, without the payment of any penalty, by a vote of a majority
of the directors who are not "interested persons" and who have no direct or in-
direct financial interest in the Plans or by vote of a majority of the out-
standing voting securities of the applicable series of each Fund. The Plans may
be renewed from year to year if approved by a vote of the Board of Directors
and a vote of the non-interested directors who have no direct or indirect fi-
nancial interest in the Plans cast in person at a meeting called for the pur-
pose of voting on the Plans. The Plans may be continued only if the directors
who vote to approve such continuance conclude, in the exercise of reasonable
business judgment and in light of their fiduciary duties under applicable law,
that there is a reasonable likelihood that the Plans will benefit such series
of Nuveen Tax-Free Money Market Fund, Inc. and its shareholders. The Plans may
not be amended to increase materially the cost which the Distribution Plan se-
ries or the Service Plan series of each Fund may bear under the Plan without
the approval of the shareholders of the affected series, and any other material
amendments of the Plans must be approved by the non-interested directors by a
vote cast in person at a meeting called for the purpose of considering such
amendments. During the continuance of the Plans, the selection and nomination
of the non-interested directors of Nuveen Tax-Free Money Market Fund, Inc. will
be committed to the discretion of the non-interested directors then in office.
No director of the Nuveen Tax-Free Money Market Fund, Inc., nor any interested
person of the Nuveen Tax-Free Money Market Fund, Inc., has any direct or indi-
rect financial interest in the Plans.
Shareholders should note that when a Fund dividend check has been returned to
the sender by the post office after repeated mailings, the shareholder account
will thereafter be registered for automatic reinvestment of dividends and thus
the dividend check and future dividend checks will be reinvested in additional
Fund shares. Shareholders are reminded that they need to advise the Funds
promptly in writing of any change in address.
The Glass-Steagall Act and other applicable laws, among other things, may limit
banks from engaging in the business of underwriting, selling or distributing
securities. Since the only functions of banks who may be engaged as Service Or-
ganizations is to perform administrative shareholder servicing functions,
Nuveen Tax-Free Money Market Fund, Inc. believes that such laws should not pre-
clude a bank from acting as a Service Organization. However, future changes in
either federal or state statutes or regulations relating to the permissible ac-
tivities of banks and their subsidiaries or affiliates, as well as judicial or
administrative decisions or interpretations of statutes or regulations, could
prevent a bank
44
<PAGE>
from continuing to perform all or a part of its shareholder servicing activi-
ties. If a bank were prohibited from so acting, its shareholder customers would
be permitted to remain shareholders of the Funds and alternative means for con-
tinuing the servicing of such shareholders would be sought.
YIELD INFORMATION
As explained in the Prospectus, the historical performance of a series of a
Fund may be expressed in terms of "yield," "effective yield" or "taxable equiv-
alent yield." These various measures of performance are described below. Based
on the seven-day period ended February 28, 1995 the current yield, effective
yield and taxable equivalent yield (using a combined federal and state income
tax rate of 42.5% for each Fund) for the series of the Massachusetts and New
York Funds were as follows:
<TABLE>
<CAPTION>
TAXABLE
CURRENT EFFECTIVE EQUIVALENT
YIELD YIELD YIELD
- -------------------------------------------------------------------
<S> <C> <C> <C>
MASSACHUSETTS FUND:
Service and Distribution Plan Series 3.36% 3.41% 5.84%
Institutional Series 3.39% 3.44% 5.90%
NEW YORK FUND:
All Series 3.33% 3.38% 5.79%
</TABLE>
Each series' yield is computed in accordance with a standard method prescribed
by rules of the Securities and Exchange Commission. Under that method, current
yield is based on a seven-day period and is computed as follows: The series'
net investment income per share for the period is divided by the price per
share (expected to remain constant at $1.00) at the beginning of the period,
the result (the "base period return") is divided by 7 and multiplied by 365,
and the resulting figure is carried to the nearest hundredth of one percent.
For the purpose of this calculation, the series' net investment income per
share includes its accrued interest income plus or minus amortized purchase
discount or premium less accrued expenses, but does not include realized capi-
tal gains or losses or unrealized appreciation or depreciation of investments.
A series' effective yield is calculated by taking the base period return (com-
puted as described above) and calculating the effect of assumed compounding.
The formula for effective yield is: (base period return + 1)/3//6//5///7/ -1.
A series' taxable equivalent yield is computed by dividing that portion of the
series' yield which is tax-exempt by the remainder of (1 minus the stated fed-
eral income tax rate) and adding the product to that portion, if any, of the
yield of the series that is not tax-exempt.
Each series' yield will fluctuate, and the publication of annualized yield quo-
tations is not a representation of what an investment in the series will actu-
ally yield for any given future period. Actual yields will depend not only on
changes in interest rates on money market instruments during the period in
question, but also on such matters as the expenses attributable to the series.
45
<PAGE>
In reports or other communications to shareholders or in advertising and sales
literature, Nuveen Tax-Free Money Market Fund, Inc. may compare the performance
of its Funds to that of other money market mutual funds tracked by Lipper Ana-
lytical Services, Inc. ("Lipper"), by Donoghue's Money Fund Report
("Donoghue's") or similar services or by financial publications such as
Barron's, Changing Times, Forbes and Money Magazine. Performance comparisons by
these indexes, services or publications may rank mutual funds over different
periods of time by means of aggregate, average, year-by-year or other types of
performance figures. Lipper performance calculations include the reinvestment
of all capital gain and income dividends for the periods covered by the calcu-
lations. As reported by Donoghue's, all investment results represent total re-
turn (annualized results for the period net of management fees and expenses)
and one year investment results are effective annual yields assuming reinvest-
ment of dividends.
A comparison of tax-exempt and taxable equivalent yields is one element to con-
sider in making an investment decision. Nuveen Tax-Free Money Market Fund, Inc.
may from time to time in its advertising and sales materials compare the then
current yields of its Funds as of a recent date with the yields on taxable in-
vestments such as corporate or U.S. Government bonds and bank CDs or money mar-
ket accounts, each of which has investment characteristics that may differ from
those of the Funds. U.S. Government bonds, for example, are backed by the full
faith and credit of the U.S. Government, and bank CDs and money market accounts
are insured by an agency of the federal government.
The following tables show the effects for individuals of federal income taxes
on the amount that those subject to a given tax rate would have to put into a
tax-free investment in order to generate the same after-tax income as a taxable
investment.*
Read down to find the amount of a tax-free investment at the specified rate
that would provide the same after-tax income as a $50,000 taxable invest-
ment at the stated taxable rate.
<TABLE>
<CAPTION>
2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
2.00% TAX- TAX- TAX- TAX- TAX- TAX-
TAXABLE TAX-FREE FREE FREE FREE FREE FREE FREE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3.00% $ 51,750 $41,400 $34,500 $29,571 $25,875 $23,000 $20,700
- ---------------------------------------------------------------------
4.00% $ 69,000 $55,200 $46,000 $39,429 $34,500 $30,667 $27,600
- ---------------------------------------------------------------------
5.00% $ 86,250 $69,000 $57,500 $49,286 $43,125 $38,333 $34,500
- ---------------------------------------------------------------------
6.00% $103,500 $82,800 $69,000 $59,143 $51,750 $46,000 $41,400
- ---------------------------------------------------------------------
7.00% $120,750 $96,600 $80,500 $69,000 $60,375 $53,667 $48,300
- ---------------------------------------------------------------------
</TABLE>
*The dollar amounts in the table reflect a 31% federal income tax rate.
This table is for illustrative purposes only and is not intended to predict the
actual return you might earn on your investment. The Funds occasionally may ad-
vertise their performance in similar tables using a different current tax rate
than that shown here. The tax rate shown here may be higher or lower than your
actual tax rate; a higher tax rate would tend to make the dollar amounts in the
table lower, while a lower tax rate would make the amounts higher. You should
consult your tax adviser to determine your actual tax rate.
46
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
Arthur Andersen LLP, independent public accountants, 33 W. Monroe Street, Chi-
cago, Illinois 60603 have been selected as auditors for Nuveen Tax-Free Money
Market Fund, Inc. In addition to audit services, Arthur Andersen LLP provides
consultation and assistance on accounting, internal control, tax and related
matters. The financial statements of Nuveen Tax-Free Money Market Fund, Inc.
incorporated by reference elsewhere in this Statement of Additional Information
and the information set forth under "Financial Highlights" in the Prospectus
have been audited by Arthur Andersen LLP as indicated in their report with re-
spect thereto, and are included in reliance upon the authority of said firm as
experts in giving said report.
The custodian of the Nuveen Tax Free Money Market Fund, Inc.'s assets is United
States Trust Company of New York, 114 West 47th Street, New York, New York
10036. The custodian performs custodial, fund accounting and portfolio account-
ing services. The Chase Manhattan Bank, N.A., 1 Chase Manhattan Plaza, New
York, NY 10081 has agreed to become successor to U.S. Trust, as custodian and
fund accountant. The succession is presently scheduled for July 1, 1995. No
changes in the Funds' administration or in the amount of fees and expenses paid
by the Funds for those services will result, and no action by shareholders will
be required.
47
<PAGE>
[NUVEEN LOGO APPEARS HERE]
Nuveen Tax-Free
Money Market Funds
Dependable tax-free
income for generations
NUVEEN TAX-FREE RESERVES, INC.
NUVEEN CALIFORNIA TAX-FREE
MONEY MARKET FUND
NUVEEN MASSACHUSETTS TAX-FREE
MONEY MARKET FUND
NUVEEN NEW YORK TAX-FREE
MONEY MARKET FUND
[PHOTO OF COUPLE APPEARS HERE]
ANNUAL REPORT/FEBRUARY 28, 1995
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
7 Fund performance
9 Portfolio of investments
21 Statement of net assets
22 Statement of operations
26 Statement of changes in net assets
33 Notes to financial statements
38 Financial highlights
46 Report of independent auditors
<PAGE>
Dear
shareholder
[PHOTO OF RICHARD J. FRANKE APPEARS HERE]
"Providing secure
income remains
our top priority"
The objective of the Nuveen Tax-Free Money Market Funds is to provide as high a
level of current tax-free income as is consistent with stability of principal
and the maintenance of liquidity. It is a pleasure to report that for the year
ended February 28, 1995, Nuveen's Tax-Free Money Market Funds met their
objectives, providing yields that compared favorably with those available from
both tax-exempt and taxable short-term alternatives.
The 7-day annualized yield for the funds covered in this report ranged from
3.33% to 3.51% on February 28. To equal these yields, an investor in the 36%
federal income tax bracket would need to earn at least 5.20% on taxable
alternatives.
Since February 1994, the Federal Reserve Board raised interest rates seven
times to fend off future inflation. As a result, the funds' yields increased
more than 70% over the course of the year. In this environment, we continue to
look for opportunities to capture attractive yields in different market sectors
and over many types of municipal securities, including tax-free variable rate
demand notes, tax and revenue anticipation notes, commercial paper, and selected
certificates of participation. The benefits of this type of diversification
combine with share
3
<PAGE>
price stability, daily liquidity, and investment convenience to make Nuveen Tax-
Free Money Market Funds some of the best vehicles conservative, tax-conscious
investors can find for their short-term funds.
Our approach to investing has provided more than one million Nuveen investors
with the tax-free income they need to help realize their dreams and goals and to
improve the quality of their lives year after year. We are confident that it
will continue to do so in the future.
We appreciate your trust in our family of funds, and we look forward to helping
you meet your tax-free investment objectives in the future.
Sincerely,
[SIGNATURE OF RICHARD J. FRANKE]
Richard J. Franke
Chairman of the Board
April 17, 1995
4
<PAGE>
Answering your
questions
We spoke recently with Tom
Spalding, head of Nuveen's portfo-
lio management team, and asked
him about developments in the
municipal market and the outlook
for Nuveen's tax-free funds.
How did the Federal
Reserve Board's moves
to raise short-term
interest rates affect
the performance of
the funds?
The Fed's moves certainly affected our money market funds' performance over the
past year. Yields have moved up significantly, which is good news for income-
oriented investors.
By raising short-term interest rates aggressively in recent months, the
Federal Reserve has demonstrated its commitment to fighting inflation, which
should be good news for all municipal investors. As long as inflation-the
primary factor affecting investment values-remains under control, the
fundamentals for strong municipal performance are in place.
5
<PAGE>
[PHOTO OF TOM SPALDING APPEARS HERE]
Tom Spalding, head
of Nuveen's portfolio
management team,
answers investors'
questions on develop-
ments in the
municipal market.
A number of fund
managers have
encountered problems
recently related to
the use of derivative
securities. Do you use
derivatives in your
portfolios?
Over the last year, participants in the financial services industry, including
securities dealers, underwriters and investment advisers, received much
attention in the press relating to the use of certain types of derivative
financial instruments in the management of portfolios, including those of mutual
funds. There are many different types of derivative investments available in the
market today, including those derivatives whose market values respond to
interest rate changes with greater volatility than do others. In general,
derivatives used to speculate on the future course of interest rates pose the
greatest risk, while derivatives used for hedging purposes present less risk
and, if used properly, can often reduce the probability of loss (while
sacrificing upside potential). Synthetic money market securities generally
present no greater risk to investors than ordinary money market securities.
Although the Funds are authorized to invest in such financial instruments, and
may do so in the future, they did not make any such investments during the
fiscal year ended February 28, 1995, other than a limited amount of synthetic
money market securities.
6
<PAGE>
NUVEEN TAX-FREE
RESERVES, INC.
Tax-Free Reserves
Shareholders in this Fund enjoyed attractive tax-free dividends over the past 12
months. During the fiscal year, the Fund's 7-day annualized yield rose from
1.88% to 3.37%.
[BAR GRAPH APPEARS HERE]
Tax Free Reserves
Year to Date
Summary
Fiscal 1995
Date Dividend
- -----------------
3/94 .0015
4/94 .0015
5/94 .0019
6/94 .0017
7/94 .0017
8/94 .0020
9/94 .0021
10/94 .0021
11/94 .0023
12/94 .0028
1/95 .0025
2/95 .0025
FUND HIGHLIGHTS 2/28/95
Current 7-day SEC yield on NAV 3.37%
Taxable-equivalent yield on NAV* 5.27%
Federal tax rate 36.0%
Total net assets ($000) $351,606
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
*An investor subject to the indicated federal income tax rate would need to
receive this return from a fully taxable investment to equal the stated 7-day
annualized yield on NAV.
NUVEEN CALIFORNIA TAX-FREE
MONEY MARKET FUND
California
Shareholders in this Fund enjoyed attractive tax-free dividends over the past 12
months. During the fiscal year, the Fund's 7-day annualized yield rose from
2.01% to 3.51%.
[BAR GRAPH APPEARS HERE]
California Money Market
Year to Date
Summary
Fiscal 1995
Date Dividend
- -----------------
3/94 $0.0016
4/94 $0.0016
5/94 $0.0020
6/94 $0.0018
7/94 $0.0019
8/94 $0.0021
9/94 $0.0022
10/94 $0.0022
11/94 $0.0024
12/94 $0.0031
1/95 $0.0027
2/95 $0.0026
FUND HIGHLIGHTS 2/28/95
Current 7-day SEC yield on NAV 3.51%
Taxable-equivalent yield on NAV* 6.10%
Combined state and federal tax rate 42.5%
Total net assets ($000) $159,701
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
* An investor subject to the indicated state and federal income tax rate would
need to receive this return from a fully taxable investment to equal the stated
7-day annualized yield on NAV.
7
<PAGE>
NUVEEN MASSACHUSETTS TAX-FREE
MONEY MARKET FUND
Massachusetts
Shareholders in this Fund enjoyed attractive tax-free dividends over the past 12
months. During the fiscal year, the Fund's 7-day annualized yield rose from
1.85% to 3.36%.
[BAR GRAPH APPEARS HERE]
Massachusetts Money Market
Year-to Date Summary
Fiscal 1995
Date Dividend
- -----------------
3/94 $0.0015
4/94 $0.0016
5/94 $0.0020
6/94 $0.0018
7/94 $0.0017
8/94 $0.0021
9/94 $0.0022
10/94 $0.0022
11/94 $0.0024
12/94 $0.0029
1/95 $0.0025
2/95 $0.0025
FUND HIGHLIGHTS 2/28/95
Current 7-day SEC yield on NAV 3.36%
Taxable-equivalent yield on NAV* 5.95%
Combined state and federal tax rate 43.5%
Total net assets ($000) $53,004
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
*An investor subject to the indicated state and federal income tax rate would
need to receive this return from a fully taxable investment to equal the stated
7-day annualized yield on NAV.
NUVEEN NEW YORK TAX-FREE
MONEY MARKET FUND
New York
Shareholders in this Fund enjoyed attractive tax-free dividends over the past 12
months. During the fiscal year, the Fund's 7-day annualized yield rose from
1.77% to 3.33%.
[BAR GRAPH APPEARS HERE]
New York Money Market
Year to Date
Summary
Fiscal 1995
Date Dividend
- -----------------
3/94 $0.0013
4/94 $0.0015
5/94 $0.0018
6/94 $0.0015
7/94 $0.0015
8/94 $0.0019
9/94 $0.0021
10/94 $0.0021
11/94 $0.0023
12/94 $0.0028
1/95 $0.0023
2/95 $0.0025
FUND HIGHLIGHTS 2/28/95
Current 7-day SEC yield on NAV 3.33%
Taxable-equivalent yield on NAV* 5.89%
Combined state and federal tax rate 43.5%
Total net assets ($000) $30,454
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
* An investor subject to the indicated state and federal income tax rate would
need to receive this return from a fully taxable investment to equal the stated
7-day annualized yield on NAV.
8
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1995
NUVEEN TAX-FREE RESERVES, INC.
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
ALABAMA - 2.0%
$ 7,215,000 Anniston Industrial Development Board
(Union Foundry Company), Variable Rate
Demand Bonds, 4.200%, 6/01/05+ VMIG-1 $ 7,215,000
- -------------------------------------------------------------------------------
ARIZONA - 3.9%
4,000,000 Coconino County School District No. 1
(Flagstaff Unified School District-
Series 1994B), Tax Anticipation Notes,
5.000%, 7/28/95 SP-1+ 4,011,973
6,700,000 Maricopa County Pollution Control
Corporation (Arizona Public Service
Company, Palo Verde Project), Variable
Rate Demand Bonds, 3.900%, 5/01/29+ P-1 6,700,000
2,900,000 Mesa, Arizona Municipal Development
Corporation, Special Tax Bonds, Series
1985, Commercial Paper, 4.100%, 4/03/95 VMIG-1 2,900,000
- -------------------------------------------------------------------------------
ARKANSAS - 4.0%
3,100,000 Arkansas Hospital Equipment Finance
Authority (Washington Regional Medical
Center), Variable Rate Demand Bonds,
4.350%, 10/01/98+ VMIG-1 3,100,000
11,000,000 University of Arkansas--Board of Trustees
(UAMS Campus-Series 1994), Variable Rate
Demand Bonds, 4.100%, 12/01/19+ VMIG-1 11,000,000
- -------------------------------------------------------------------------------
CALIFORNIA - 3.1%
5,800,000 California Health Facilities Financing
Authority (St. Francis Memorial
Hospital), Series 1993B, Variable Rate
Demand Bonds,
3.750%, 11/01/19+ P-1 5,800,000
5,000,000 Kings County Board of Education, 1994-95,
Tax Anticipation Notes, 4.250%, 7/28/95 SP-1+ 5,008,818
- -------------------------------------------------------------------------------
DELAWARE - 1.6%
5,600,000 Delaware Economic Development Authority,
Industrial Development (Noramco of
Delaware, Inc.), Series 1984, Variable
Rate Demand Bonds, 4.500%, 12/01/14+ N/R 5,600,000
- -------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.8%
3,000,000 District of Columbia General Obligation,
General Fund Recovery, Variable Rate
Demand Bonds, 4.500%, 6/01/03+ A-1+ 3,000,000
- -------------------------------------------------------------------------------
FLORIDA - 3.9%
7,500,000 Dade County Water and Sewer System,
Series 1994, Variable Rate Demand Bonds,
3.950%, 10/05/22+ VMIG-1 7,500,000
3,000,000 Hialeah Hospital Refunding, Series 1989
(Hialeah Hospital Inc.), Variable Rate
Demand Bonds, 4.350%, 2/01/14+ VMIG-1 3,000,000
3,100,000 Pasco Multi-Family Housing, Carlton Arms
of Magnolia Valley, Series 1985,
Variable Rate Demand Bonds, 4.250%,
12/01/07+ VMIG-1 3,100,000
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN TAX-FREE RESERVES, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION RATINGS* AMORTIZED COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
GEORGIA - 5.6%
$ 6,500,000 Burke County Development Authority,
Pollution Control (Oglethorpe Power
Company), Adjustable Tender Bonds,
4.050%, 4/06/95 VMIG-1 $ 6,500,000
6,200,000 Fulton County Hospital Authority,
Anticipation Certificates,
Commercial Paper, 3.900%, 3/02/95 VMIG-1 6,200,000
7,000,000 Fulton County, Georgia Hospital
Authority, Anticipation Certificates
(St. Joseph's Hospital of Atlanta
Project), Commercial Paper, 4.125%,
5/31/95 VMIG-1 7,000,000
- -------------------------------------------------------------------------------
HAWAII - 1.2%
4,200,000 Hawaii Department of Budget and
Finance, Special Purpose (Adventist
Health System), Variable Rate Demand
Bonds, 4.150%, 9/01/99+ A-1 4,200,000
- -------------------------------------------------------------------------------
ILLINOIS - 12.2%
10,000,000 Illinois Development Finance
Authority (Chicago Symphony
Orchestra Project), Variable Rate
Demand Bonds, 4.100%, 12/01/28+ VMIG-1 10,000,000
4,985,000 Illinois Educational Facilities
Authority, The Art Institute of
Chicago, Series 1987, Variable Rate
Demand Bonds, 4.150%, 3/01/27+ MIG-1 4,985,000
11,400,000 Illinois Health Facilities Authority
(Victory Health Services Project),
Series 1991, 4.150%, 12/01/11
(Optional Put 3/29/95) VMIG-1 11,400,000
2,500,000 Chicago O'Hare International Airport
(American Airlines), Variable Rate
Demand Bonds, 3.950%, 12/01/17+ VMIG-1 2,500,000
Decatur Water Bonds (New South Water
Treatment), Series 1985, Commercial
Paper:
2,200,000 3.800%, 3/03/95 VMIG-1 2,200,000
3,300,000 4.150%, 4/04/95 VMIG-1 3,300,000
4,000,000 4.350%, 5/08/95 VMIG-1 4,000,000
4,600,000 4.125%, 5/11/95 VMIG-1 4,600,000
- -------------------------------------------------------------------------------
INDIANA - 3.3%
6,000,000 Indianapolis Economic Development
(Yellow Freight System),
5.500%, 1/15/10 (Mandatory Put
1/15/96) N/R 6,000,000
5,500,000 Fort Wayne Economic Development
(Georgetown Place Venture Project),
Variable Rate Demand Bonds, 4.000%,
12/01/15+ A-1+ 5,500,000
- -------------------------------------------------------------------------------
IOWA - 2.2%
2,500,000 Iowa School Corporation, Warrant
Certificates, Series A 1994,
Municipal Note, 4.250%, 7/17/95 MIG-1 2,505,917
2,900,000 Eddyville Pollution Control
(Heartland Lysine Inc.), Variable
Rate Demand Bonds, 4.600%, 11/01/03+ N/R 2,900,000
2,200,000 Mount Vernon Private College (Cornell
College Project), Series 1985,
Variable Rate Demand Bonds, 4.300%,
10/01/15+ VMIG-1 2,200,000
</TABLE>
10
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
KENTUCKY - 6.8%
$ 9,005,000 Hancock County Industrial Development
(Southwire Company Project), Variable
Rate Demand Bonds, 4.250%, 7/01/10+ N/R $ 9,005,000
14,800,000 Perry County Health Care System
(Appalachian Regional Hospital, Inc.
Project), Series 1984, Variable Rate
Demand Bonds,
4.150%, 8/01/14+ VMIG-1 14,800,000
- -------------------------------------------------------------------------------
LOUISIANA - 3.6%
6,000,000 Louisiana Offshore Terminal Authority,
Variable Rate Demand Bonds, 3.900%,
9/01/06+ A-1+ 6,000,000
6,500,000 Louisiana Recovery District, Sales Tax,
Variable Rate Demand Bonds, 3.750%,
7/01/98+ VMIG-1 6,500,000
- -------------------------------------------------------------------------------
MASSACHUSETTS - 4.5%
2,300,000 Massachusetts Bay Transportation
Authority, Series A, Commercial Paper,
3.700%, 3/08/95 A-1+ 2,300,000
3,000,000 Massachusetts Dedicated Income Tax,
Variable Rate Demand Bonds, 3.650%,
6/01/95 VMIG-1 3,000,000
4,000,000 Massachusetts Health and Educational
Facilities Authority (Harvard
University), Variable Rate Demand Bonds,
3.750%, 2/01/16+ VMIG-1 4,000,000
1,000,000 Massachusetts Health and Educational
Facilities Authority (M.I.T. Project),
Variable Rate Demand Bonds, 3.850%,
7/01/21+ VMIG-1 1,000,000
2,400,000 Massachusetts Industrial Finance Agency
(Nova Realty Trust 1994 Refunding),
Variable Rate Demand Bonds, 4.100%,
12/01/02+ P-1 2,400,000
3,000,000 Massachusetts General Obligation Notes,
1994, Series A,
5.000%, 6/15/95 MIG-1 3,006,794
- -------------------------------------------------------------------------------
MICHIGAN - 4.6%
7,100,000 Michigan Job Development Authority,
Limited Obligation (Frankenmuth Bavarian
Inn), Variable Rate Demand Bonds,
4.300%, 9/01/15+ A-1 7,100,000
7,500,000 Detroit City School District, Wayne
County State School Aid Notes (Limited
Tax, General Obligation), Series 1994,
5.000%, 5/01/95 SP-1+ 7,512,887
1,650,000 Warren Economic Development Corporation,
Limited Obligation (The Prince Company--
Michigan Division), Variable Rate Demand
Bonds, 4.400%, 11/01/99+ P-1 1,650,000
- -------------------------------------------------------------------------------
MINNESOTA - 4.4%
6,410,000 Bloomington Commercial Development (94th
Street Associates), Variable Rate Demand
Bonds, 4.150%, 12/01/15+ A-1+ 6,410,000
6,430,000 Bloomington Commercial Development (James
Avenue Associates Project), Variable
Rate Demand Bonds, 4.150%, 12/01/15+ A-1+ 6,430,000
2,600,000 St. Paul Housing and Redevelopment
Authority, District Heating, Variable
Rate Demand Bonds, 4.250%, 12/01/12+ A-1 2,600,000
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN TAX-FREE RESERVES, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
MISSOURI - 0.8%
$ 2,840,000 Independence Industrial Development
Authority, Industrial Revenue Bonds,
Series 1994 (Resthaven Project),
Variable Rate Demand Bonds, 4.150%,
2/01/25+ A-1+ $ 2,840,000
- -------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.8%
2,900,000 Merrimack County Tax Anticipation Notes,
5.240%, 12/29/95 N/R 2,911,123
- -------------------------------------------------------------------------------
NEW YORK - 3.1%
New York City General Obligation,
Variable Rate Demand Bonds:
7,000,000 3.950%, 2/01/20+ VMIG-1 7,000,000
2,700,000 3.950%, 2/01/21+ VMIG-1 2,700,000
1,100,000 3.950%, 2/01/22+ VMIG-1 1,100,000
- -------------------------------------------------------------------------------
NORTH CAROLINA - 1.4%
5,100,000 North Carolina Medical Care Commission,
Hospital Pooled Financing, Variable Rate
Demand Bonds, 3.900%, 10/01/13+ VMIG-1 5,100,000
- -------------------------------------------------------------------------------
OHIO - 7.9%
9,600,000 Centerville Health Care (Bethany Lutheran
Village), Variable Rate Demand Bonds,
4.000%, 5/01/08+ VMIG-1 9,600,000
3,500,000 Centerville Health Care (Bethany Lutheran
Village Continuing Care Facilities
Expansion Project), Variable Rate Demand
Bonds,
4.000%, 11/01/13+ VMIG-1 3,500,000
3,000,000 Cincinnati and Hamilton County Port
Authority (Kenwood Office Associates),
Variable Rate Demand Bonds, 3.900%,
9/01/25+ A-1 3,000,000
2,795,000 Clermont County Economic Development
(Clermont Hills County Project),
Commercial Paper, 4.100%, 5/01/95 N/R 2,795,000
2,700,000 Cuyahoga County--University Hospital of
Cleveland, Series 1985, Variable Rate
Demand Bonds, 3.750%, 1/01/16+ VMIG-1 2,700,000
3,900,000 Franklin County Hospital Facilities
(Traditions at Mill Run), Floating Rate
Demand Bonds, 4.350%, 11/01/14+ N/R 3,900,000
2,200,000 Franklin County (Rickenbacker Holdings,
Inc. Project), Variable Rate Demand
Bonds, 4.200%, 12/01/10+ N/R 2,200,000
- -------------------------------------------------------------------------------
PENNSYLVANIA - 1.6%
3,000,000 Pennsylvania Tax Anticipation Notes,
First Series of 1994-1995, 4.750%,
6/30/95 MIG-1 3,007,246
1,100,000 Chartiers Valley Industrial and
Commercial Development Authority
(Universal Auto), Variable Rate Demand
Bonds, 4.140%, 8/01/00+ N/R 1,100,000
1,400,000 Delaware County Industrial Development
Authority, Airport Facility (UPS),
Variable Rate Demand Bonds, 3.750%,
12/01/15+ A-1+ 1,400,000
</TABLE>
12
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
TENNESSEE - 1.7%
$ 6,100,000 Roane County Industrial Development Board
(Fortofil Fiber), Variable Rate Demand
Bonds, 4.000%, 12/15/12+ N/R $ 6,100,000
- -------------------------------------------------------------------------------
TEXAS - 4.6%
4,000,000 Texas Tax Anticipation Notes, 5.000%,
8/31/95 MIG-1 4,016,516
4,500,000 Angelina and Neches River Authority,
Industrial Development Corp., Solid
Waste (Teec Int. Temple Inland), Series
1984E, Variable Rate Demand Bonds,
3.900%, 5/01/14+ VMIG-1 4,500,000
4,800,000 Lufkin Health Facilities Development
Corporation (Memorial Medical Center of
East Texas), Variable Rate Demand Bonds,
4.300%, 1/01/18+ A-1 4,800,000
3,000,000 Plano Health Facilities Development
Corporation, Children's and Presbyterian
Health Care, Commercial Paper, 3.700%,
3/01/95 VMIG-1 3,000,000
- -------------------------------------------------------------------------------
UTAH - 2.2%
Emery County Pollution Control, Refunding
Bonds (Pacificorp Project), Series 1991,
Commercial Paper:
4,100,000 3.750%, 3/07/95 A-1+ 4,100,000
3,700,000 3.750%, 3/13/95 A-1+ 3,700,000
- -------------------------------------------------------------------------------
VIRGINIA - 1.7%
2,600,000 Norfolk Industrial Development Authority
(Norfolk, Virginia Beach, Portsmouth),
Industrial Development Bonds, Variable
Rate Demand Bonds, 5.850%, 11/01/04+ N/R 2,600,000
3,300,000 Richmond Industrial Development Authority
(Richmond MSA), Variable Rate Demand
Bonds, 5.850%, 11/01/04+ N/R 3,300,000
- -------------------------------------------------------------------------------
WASHINGTON - 5.2%
5,500,000 Washington Health Care Facilities
Authority (Adventist Health System
West/Walla Walla General), Variable Rate
Demand Bonds, 4.390%, 9/01/09+ A-1 5,500,000
3,300,000 Washington Housing Finance Commission
(Crista Ministries Project), Series
1991B, Variable Rate Demand Bonds,
4.150%, 7/01/11+ VMIG-1 3,300,000
5,415,000 Washington Housing Finance Commission
(YMCA of Greater Seattle Program),
Variable Rate Demand Bonds, 3.950%,
7/01/11+ VMIG-1 5,415,000
4,040,000 Yakima County Public Corporation (Jeld-
Wen Inc.), Variable Rate Demand Bonds,
4.150%, 5/01/01+ VMIG-1 4,040,000
- -------------------------------------------------------------------------------
WISCONSIN - 1.6%
5,500,000 Milwaukee Housing Authority (Yankee Hill
Apartments), Variable Rate Demand Bonds,
3.850%, 12/01/09+ A-1 5,500,000
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN TAX-FREE RESERVES, INC.--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -----------------------------------------------------------------------------
<C> <S> <C> <C>
WYOMING - 0.3%
$ 1,200,000 Sweetwater County Pollution Control
(Pacificorp), Variable Rate Demand
Bonds, 3.850%, 12/01/14+ A-1+ $ 1,200,000
- -----------------------------------------------------------------------------
$353,485,000 Total Investments - 100.6% 353,566,274
- -------------------
------------------------------------------------------------------
Other Assets Less Liabilities - (0.6)% (1,959,877)
- -----------------------------------------------------------------------------
Net Assets - 100% $351,606,397
</TABLE>
- --------------------------------------------------------------------------------
* Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
14
<PAGE>
NUVEEN MONEY MARKET VALUE FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
NUVEEN CALIFORNIA MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 3,000,000 California Health Facilities Authority
(St. Joseph Health System), Series A,
Variable Rate Demand Bonds, 3.700%,
7/01/13+ VMIG-1 $ 3,000,000
2,900,000 California Health Facilities Authority,
Pooled Loan Program, Variable Rate
Demand Bonds, 4.050%, 6/01/07+ VMIG-1 2,900,000
6,000,000 California Health Facilities Authority
(St. Francis Memorial Hospital), Series
1993B, Variable Rate Demand Bonds,
3.750%, 11/01/19+ P-1 6,000,000
8,000,000 California Pollution Control Finance
Authority (Pacific Gas and Electric),
Series D 1988, Commercial Paper, 4.050%,
4/11/95 A-1 8,000,000
California Pollution Control Finance
Authority (Shell Oil Company), Variable
Rate Demand Bonds:
4,000,000 3.700%, 11/01/00+ VMIG-1 4,000,000
1,000,000 3.700%, 10/01/11+ VMIG-1 1,000,000
4,000,000 California Pollution Control Finance
Authority, Pollution Control (Exxon
Project), Variable Rate Demand Bonds,
3.800%, 12/01/12+ A-1+ 4,000,000
3,000,000 California School Cash Reserve Program
Authority, 1994 Pool Bonds, Series A
Notes, 4.500%, 7/05/95 MIG-1 3,007,478
6,000,000 California 1994-1995 Anticipation
Floating Index Notes, Series B, Variable
Rate Demand Bonds, 4.140%, 6/28/95 MIG-1 6,000,000
5,500,000 California Statewide Community
Development Authority, Certificates of
Participation, Series 1993, Variable
Rate Demand Bonds,
3.600%, 12/01/18+ A-1+ 5,500,000
3,000,000 Hayward Housing Authority (Huntwood
Terrace), Multi-Family Mortgage, Series
1993A, Variable Rate Demand Bonds,
4.150%, 3/01/27+ A-1 3,000,000
5,000,000 Kern Community College District,
Certificates of Participation, Series
1995, Variable Rate Demand Bonds,
4.300%, 1/01/25+ A-1 5,000,000
3,000,000 Kings County Board of Education, 1994-
1995, Tax Anticipation Notes, 4.250%,
7/28/95 SP-1+ 3,005,291
3,000,000 Long Beach, 1994-1995 Tax Anticipation
Notes, 4.750%, 9/20/95 MIG-1 3,010,407
3,000,000 Los Angeles County, 1994-1995 Tax
Anticipation Notes,
4.500%, 6/30/95 MIG-1 3,006,201
6,000,000 Los Angeles County Metropolitan
Transportation Authority, Commercial
Paper, 4.300%, 4/11/95 P-1 6,000,000
7,400,000 Oakland Capital Improvement Project,
Certificates of Participation, Variable
Rate Demand Bonds, 4.400%, 12/01/15+ N/R 7,400,000
4,900,000 Orange County Apartment Development
(Monarch Bay Apartments Project),
Variable Rate Demand Bonds, 5.300%,
10/01/07+ A-1+ 4,900,000
3,800,000 Orange County (Robinson Ranch Apartments
Project), Variable Rate Demand Bonds,
5.250%, 11/01/08+ VMIG-1 3,800,000
5,000,000 Orange County Apartment Development
(Niguel Summit), Variable Rate Demand
Bonds, 4.250%, 11/01/09+ VMIG-1 5,000,000
3,000,000 Riverside County, Tax Anticipation Notes,
4.250%, 6/30/95 MIG-1 3,006,233
3,000,000 Riverside County School Financing
Authority, School Districts Anticipation
Notes, Series 1994-1995, 4.500%, 7/07/95 MIG-1 3,006,563
5,000,000 Sacramento Municipal Utility District,
Series G, Commercial Paper, 4.200%,
3/09/95 P-1 5,000,000
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN CALIFORNIA MONEY MARKET FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 5,000,000 Sacramento County Certificates of
Participation (Administration and
Courthouse Project), Variable Rate
Demand Bonds,
3.700%, 6/01/20+ VMIG-1 $ 5,000,000
5,000,000 San Bernardino County Transportation
Authority, Limited Tax Bonds, Series
1994A, Variable Rate Demand Bonds,
4.100%, 3/01/10+ VMIG-1 5,000,000
3,000,000 San Diego Housing Authority, Multi-Family
Housing, Series 1993-A (Carmel Del Mar
Apartments), Variable Rate Demand Bonds,
4.000%, 12/01/15+ A-1 3,000,000
5,300,000 San Diego County Regional Transportation
Commission, Second Senior Tax, Series
1994, Variable Rate Demand Bonds,
3.900%, 4/01/08+ VMIG-1 5,300,000
7,000,000 San Francisco City and County Housing
(Bayside Village), Variable Rate Demand
Bonds, 3.900%, 12/01/05+ VMIG-1 7,000,000
7,000,000 San Dimas Industrial Development Bonds
(Bausch and Lomb Incorporated), Variable
Rate Demand Bonds, 5.150%, 12/01/15+ N/R 7,000,000
5,300,000 Santa Ana Health Facilities Authority
(Town and Country), Variable Rate Demand
Bonds, 3.600%, 10/01/20+ A-1 5,300,000
2,700,000 Santa Clara County Transit District,
Refunding Equipment Trust Certificates,
Variable Rate Demand Bonds, 3.850%,
6/01/15+ VMIG-1 2,700,000
6,400,000 Torrance Hospital (Little Company of Mary
Hospital--Torrance Memorial Hospital),
Variable Rate Demand Bonds,
4.150%, 2/01/22+ A-1 6,400,000
7,000,000 Vista Community Development Commission,
Bond Anticipation Notes, Series 1992,
Commercial Paper, 4.500%, 11/01/95 A-1 7,000,000
- -------------------------------------------------------------------------------
$152,200,000 Total Investments - 95.3% 152,242,173
- -------------------
--------------------------------------------------------------------
Other Assets Less Liabilities - 4.7% 7,459,313
- -------------------------------------------------------------------------------
Net Assets - 100% $159,701,486
</TABLE>
- --------------------------------------------------------------------------------
* Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
16
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
NUVEEN MASSACHUSETTS MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Massachusetts Bay Transportation Authority,
Commercial Paper,
Series A:
$ 2,400,000 3.700%, 3/01/95 A-1+ $ 2,400,000
2,600,000 3.700%, 3/08/95 A-1+ 2,600,000
2,000,000 Massachusetts General Obligation Notes,
1994 Series A,
5.000%, 6/15/95 MIG-1 2,004,644
1,490,000 Massachusetts Health and Educational
Facilities Authority (Newbury College),
Variable Rate Demand Bonds, 3.900%,
11/01/18+ N/R 1,490,000
Massachusetts Health and Educational
Facilities Authority (Capital Asset
Program), Variable Rate Demand Bonds:
1,900,000 3.900%, 1/01/35+ VMIG-1 1,900,000
1,400,000 3.800%, 1/01/35+ VMIG-1 1,400,000
1,500,000 Massachusetts Health and Educational
Facilities Authority (Brigham and Women's
Hospital), Variable Rate Demand Bonds,
3.700%, 7/01/17+ VMIG-1 1,500,000
1,500,000 Massachusetts Industrial Finance Agency
(Jencoat/Levy Realty Trust), Variable Rate
Demand Bonds, 4.660%, 10/06/99+ N/R 1,500,000
1,000,000 Massachusetts Industrial Finance Agency
(Nova Realty Trust 1994 Refunding),
Variable Rate Demand Bonds, 4.100%,
12/01/02+ P-1 1,000,000
1,000,000 Massachusetts Industrial Finance Agency,
Pollution Control (New England Power
Company), Commercial Paper, 4.150%,
5/05/95 P-1 1,000,000
3,000,000 Massachusetts Industrial Finance Agency,
Pollution Control (New England Power
Company), Commercial Paper, 3.850%,
3/06/95 P-1 3,000,000
2,100,000 Massachusetts Industrial Finance Agency
(Holyoke Water Power Company Project),
Variable Rate Demand Bonds, 3.750%,
5/01/22+ VMIG-1 2,100,000
1,000,000 Massachusetts Industrial Finance Agency,
Resource Recovery (Ogden Haverhill),
Variable Rate Demand Bonds, 3.700%,
12/01/06+ VMIG-1 1,000,000
1,900,000 Massachusetts Industrial Finance Agency
(Williston Northampton School Issue),
Series A, Variable Rate Demand Bonds,
3.900%, 4/01/10+ N/R 1,900,000
2,000,000 Massachusetts Industrial Finance Agency
(WGBH Educational Foundation Project),
Variable Rate Demand Bonds,
4.200%, 10/01/09+ VMIG-1 2,000,000
1,000,000 Massachusetts Industrial Finance Agency
(New England Deaconess Association
Project), Series 1993B, Variable Rate
Demand Bonds, 3.700%, 4/01/23+ MIG-1 1,000,000
1,500,000 Massachusetts Housing Finance Authority,
Single Family Housing, Series 35, Variable
Rate Demand Bonds, 3.750%, 6/01/17+ VMIG-1 1,500,000
1,000,000 Boston General Obligation, Tax Anticipation
Notes, 5.000%, 8/01/95 Aaa 1,004,061
665,000 Boston Water and Sewer Commission, Series
1985A, Variable Rate Demand Bonds, 4.000%,
11/01/14+ VMIG-1 665,000
500,000 Boston Water and Sewer Commission, 1994
Series A, General Revenue Bonds (Senior
Series), Variable Rate Demand Bonds,
3.650%, 11/01/24+ VMIG-1 500,000
800,000 Holyoke Pollution Control (Holyoke Water
Power Company Project), Series 1988,
Variable Rate Demand Bonds, 3.750%,
11/01/13+ A-1+ 800,000
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN MASSACHUSETTS MONEY MARKET FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 1,950,000 Hopkinton Bond Anticipation Notes, 4.000%,
7/06/95 N/R $ 1,952,471
1,300,000 New Bedford Industrial Development (Cliftex
Corporation), Series 1989, Variable Rate
Demand Bonds, 4.660%, 10/01/97+ N/R 1,300,000
625,000 Newton General Obligation, Limited Tax
Anticipation Notes, Series 1994, 5.200%,
4/15/95 Aaa 626,467
2,000,000 Pioneer Valley Transit Authority,
Anticipation Notes,
4.100%, 8/11/95 N/R 2,002,149
1,500,000 Reading Anticipation Notes, 4.020%, 7/14/95 N/R 1,500,211
1,000,000 Sudbury Anticipation Notes, 3.570%, 3/28/95 N/R 1,000,028
960,000 Waltham Anticipation Notes, 4.000%, 8/25/95 N/R 960,595
2,900,000 Woods Hole, Martha's Vineyard and Nantucket
Steamship Authority, Anticipation Notes,
4.000%, 4/28/95 N/R 2,900,359
3,200,000 Puerto Rico Highway/Transportation
Authority, Series X, Variable Rate Demand
Bonds, 3.500%, 7/01/99+ VMIG-1 3,200,000
3,300,000 Puerto Rico Industrial Medical Educational
and Environmental Authority (Inter-
American University of Puerto Rico),
Commercial Paper, 3.700%, 4/04/95 VMIG-1 3,300,000
700,000 Puerto Rico Industrial Medical Educational
and Environmental Authority (Ana G. Mendez
Educational Foundation), Commercial Paper,
3.750%, 4/10/95 A-1+ 700,000
- -------------------------------------------------------------------------------
$51,690,000 Total Investments - 97.6% 51,705,985
- -------------------------------------------------------------------------------
- -------------------
Other Assets Less Liabilities - 2.4% 1,298,307
- -------------------------------------------------------------------------------
Net Assets - 100% $53,004,292
</TABLE>
- --------------------------------------------------------------------------------
* Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
18
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
NUVEEN NEW YORK MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- ------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 1,500,000 New York State Energy Research and
Development Authority (Niagara Power
Corporation), Variable Rate Demand Bonds,
4.100%, 7/01/15+ A-1+ $ 1,500,000
1,000,000 New York State Energy Research and
Development Authority (Central Hudson Gas
and Electric), Variable Rate Demand
Bonds,
3.750%, 11/01/20+ VMIG-1 1,000,000
400,000 New York State Energy Research and
Development Authority, Pollution Control
(New York State Electric and Gas Corp.),
Series 1994C, Commercial Paper, 3.875%,
4/06/95 VMIG-1 400,000
1,000,000 New York State Energy Research and
Development Authority (New York State
Electric and Gas Company), 1985 Series D,
Commercial Paper, 4.000%, 4/07/95 A-1+ 1,000,000
2,000,000 New York State Housing Finance Agency
(Normandie Court), Variable Rate Demand
Bonds, 3.900%, 5/15/15+ VMIG-1 2,000,000
195,000 New York State Job Development Authority,
Series 1984E, Variable Rate Demand Bonds,
3.800%, 3/01/99+ MIG-1 195,000
260,000 New York State Job Development Authority,
Series 1984C, Variable Rate Demand Bonds,
3.800%, 3/01/99+ MIG-1 260,000
1,300,000 New York State Local Government Assistance
Corporation,
Series 1994B, Variable Rate Demand Bonds,
3.750%, 4/01/23+ VMIG-1 1,300,000
800,000 New York State Medical Care Facilities
Finance Agency (Lenox Hill Hospital),
Variable Rate Demand Bonds, 3.800%,
11/01/08+ VMIG-1 800,000
1,700,000 New York State Medical Care Facilities
Finance Agency (Children's Hospital of
Buffalo), Variable Rate Demand Bonds,
4.000%, 11/01/05+ VMIG-1 1,700,000
1,000,000 Dormitory Authority of the State of New
York, Oxford University Press (Letter of
Credit Secured), Series 1993, Variable
Rate Demand Bonds, 3.950%, 7/01/23+ VMIG-1 1,000,000
700,000 Dormitory Authority of the State of New
York (Sloan-Kettering Cancer Center),
Commercial Paper, 4.200%, 4/03/95 P-1 700,000
600,000 Dormitory Authority of the State of New
York (Sloan-Kettering Cancer Center),
Series 1989C, Commercial Paper, 4.000%,
4/04/95 P-1 600,000
500,000 Dormitory Authority of the State of New
York, Commercial Paper, 4.200%, 5/12/95 P-1 500,000
1,000,000 Erie County Anticipation Notes 1994,
4.750%, 8/15/95 MIG-1 1,003,300
1,000,000 Erie County Water Authority, Variable Rate
Demand Bonds, Water Works System, 3.750%,
12/01/16+ VMIG-1 1,000,000
1,000,000 Hastings-on-Hudson Union Free School
District, Anticipation (Renewal) Notes,
4.490%, 7/26/95 N/R 1,000,755
500,000 Ithaca City School District, Anticipation
Notes, 4.500%, 6/29/95 N/R 500,397
1,000,000 Monroe County Bond Anticipation Notes,
Series C, Unlimited Tax General
Obligation, 5.000%, 6/09/95 N/R 1,001,539
200,000 New York City General Obligation, Variable
Rate Demand Bonds, 3.950%, 2/01/21+ VMIG-1 200,000
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN NEW YORK MONEY MARKET FUND--CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT DESCRIPTION RATINGS* COST
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 900,000 New York City General Obligation, 1994 B-4,
Variable Rate Demand Bonds, 4.000%,
8/15/22+ VMIG-1 $ 900,000
300,000 New York City Housing Development
Corporation (Columbus Gardens Project),
Variable Rate Demand Bonds, 3.900%,
2/01/07+ A-1 300,000
800,000 New York City Industrial Development Agency
(LaGuardia Associates Project), Variable
Rate Demand Bonds, 3.800%, 12/01/15+ A-1 800,000
1,000,000 New York City Municipal Water Finance
Authority, Variable Rate Demand Bonds,
3.900%, 6/15/22+ VMIG-1 1,000,000
300,000 New York City Municipal Water Finance
Authority, Commercial Paper, 3.550%,
3/02/95 SP-1+ 300,000
1,500,000 New York City Housing Development
Corporation (Upper Fifth Avenue Project),
Variable Rate Demand Bonds, 3.750%,
1/01/16+ VMIG-1 1,500,000
1,000,000 New York City Housing Development, Variable
Rate Demand Bonds, 3.800%, 8/01/15+ VMIG-1 1,000,000
700,000 New York City Trust for Cultural Resources
(Guggenheim Foundation), Variable Rate
Demand Bonds, 3.600%, 12/01/15+ VMIG-1 700,000
975,000 St. Lawrence County Industrial Development
Agency, Pollution Control (Reynolds
Metals), Variable Rate Demand Bonds,
3.900%, 12/01/07+ P-1 975,000
1,000,000 Suffolk County, Tax Anticipation Notes,
1994 (RA Series II),
4.500%, 9/14/95 MIG-1 1,002,173
800,000 Syracuse Industrial Development Agency,
Civic Facility (Syracuse University),
Variable Rate Demand Bonds, 3.600%,
3/01/23+ SP-1+ 800,000
1,300,000 Triborough Bridge and Tunnel Authority,
Special Obligation, Variable Rate Demand
Bonds, Series 1994 (1994 Resolution),
3.750%, 1/01/24+ MIG-1 1,300,000
1,300,000 Yonkers Industrial Development Agency,
Series 1989, Civic Facility, Variable Rate
Demand Bonds, 3.950%, 7/01/19+ VMIG-1 1,300,000
700,000 Yonkers Industrial Development Agency,
Civic Facility, Variable Rate Demand
Bonds, 3.950%, 7/01/21+ VMIG-1 700,000
- -------------------------------------------------------------------------------
$30,230,000 Total Investments - 99.3% 30,238,164
- -------------------------------------------------------------------------------
- -------------------
Other Assets Less Liabilities - 0.7% 216,248
- -------------------------------------------------------------------------------
Net Assets - 100% $30,454,412
- -------------------------------------------------------------------------------
</TABLE>
* Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
20
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
RESERVES CA MA NY
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in short-term
municipal securities, at
amortized cost (note 1) $353,566,274 $152,242,173 $51,705,985 $30,238,164
Cash 2,564,607 1,890,126 156,904 105,894
Receivables:
Interest 1,952,900 1,321,573 357,437 155,401
Investments sold 215,000 4,800,000 1,000,000 45,000
Other assets 16,636 16,836 11,419 7,920
------------ ------------ ----------- -----------
Total assets 358,315,417 160,270,708 53,231,745 30,552,379
------------ ------------ ----------- -----------
LIABILITIES
Payable for investments
purchased 5,500,000 -- -- --
Accrued expenses:
Management fees (note 4) 132,043 47,935 18,678 9,479
Other 212,629 110,148 57,749 12,078
Dividends payable 864,348 411,139 151,026 76,410
------------ ------------ ----------- -----------
Total liabilities 6,709,020 569,222 227,453 97,967
------------ ------------ ----------- -----------
Net assets applicable to
shares outstanding
(note 3) $351,606,397 $159,701,486 $53,004,292 $30,454,412
------------ ------------ ----------- -----------
Shares outstanding:
Service Plan series -- 41,771,918 27,731,552 640,073
Distribution Plan series -- 67,157,179 24,237,180 29,797,672
Institutional series -- 50,772,389 1,035,560 16,667
------------ ------------ ----------- -----------
Total shares outstanding 351,606,397 159,701,486 53,004,292 30,454,412
------------ ------------ ----------- -----------
Net asset value, offering
and redemption price per
share (net assets divided
by shares outstanding) $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ----------- -----------
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
STATEMENT OF OPERATIONS
Year ended February 28, 1995
<TABLE>
<CAPTION>
RESERVES
- -------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest income (note 1) $11,501,656
-----------
Expenses:
Management fees (note 4) 1,804,298
12b-1 expense (note 4) 209,800
Shareholders' servicing agent fees and
expenses 555,046
Custodian's fees and expenses 79,594
Directors' fees and expenses (note 4) 4,567
Professional fees 19,724
Shareholders' reports--printing and
mailing expenses 78,982
Federal and state registration fees 59,459
Other expenses 29,474
-----------
Total expenses before expense
reimbursement 2,840,944
Expense reimbursement from investment
adviser (note 4) (134,463)
-----------
Net expenses 2,706,481
-----------
Net investment income 8,795,175
Net gain (loss) from investment
transactions --
-----------
Net increase in net assets from
operations $ 8,795,175
-----------
</TABLE>
See accompanying notes to financial statements.
22
<PAGE>
NUVEEN MONEY MARKET VALUE FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET
-----------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (note 1) $3,280,577 $2,204,557 $1,598,756 $7,083,890
---------- ---------- ---------- ----------
Expenses:
Management fees (note
4) 477,352 282,337 199,287 958,976
12b-1 expense (note 4) 142,699 62,026 -- 204,725
Shareholders' servicing
agent fees and
expenses 5,676 41,107 428 47,211
Custodian's fees and
expenses 71,107 30,696 24,347 126,150
Directors' fees and
expenses (note 4) 925 1,229 807 2,961
Professional fees 6,187 5,399 4,356 15,942
Shareholders' reports--
printing and mailing
expenses 4,621 26,914 96 31,631
Federal and state
registration fees -- -- -- --
Other expenses 2,160 3,611 3,335 9,106
---------- ---------- ---------- ----------
Total expenses before
expense reimbursement 710,727 453,319 232,656 1,396,702
Expense reimbursement
from investment
adviser (note 4) (58,837) (63,409) -- (122,246)
---------- ---------- ---------- ----------
Net expenses 651,890 389,910 232,656 1,274,456
---------- ---------- ---------- ----------
Net investment income 2,628,687 1,814,647 1,366,100 5,809,434
Net gain (loss) from
investment transactions (11,576) (4,489) (2,299) (18,364)
---------- ---------- ---------- ----------
Net increase in net
assets from operations $2,617,111 $1,810,158 $1,363,801 $5,791,070
---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
23
<PAGE>
STATEMENT OF OPERATIONS
Year ended February 28, 1995
<TABLE>
<CAPTION>
MASSACHUSETTS MONEY MARKET
-----------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (note 1) $1,226,072 $850,576 $119,585 $2,196,233
---------- -------- -------- ----------
Expenses:
Management fees (note
4) 158,079 109,619 15,413 283,111
12b-1 expense (note 4) 46,919 22,886 -- 69,805
Shareholders' servicing
agent fees and
expenses 612 28,337 135 29,084
Custodian's fees and
expenses 24,311 15,504 1,394 41,209
Directors' fees and
expenses (note 4) 901 599 75 1,575
Professional fees 6,927 5,570 611 13,108
Shareholders' reports--
printing and mailing
expenses 2,378 39,650 196 42,224
Federal and state
registration fees 853 588 108 1,549
Other expenses 931 623 63 1,617
---------- -------- -------- ----------
Total expenses before
expense reimbursement 241,911 223,376 17,995 483,282
Expense reimbursement
from investment
adviser (note 4) (23,741) (72,562) -- (96,303)
---------- -------- -------- ----------
Net expenses 218,170 150,814 17,995 386,979
---------- -------- -------- ----------
Net investment income 1,007,902 699,762 101,590 1,809,254
Net gain (loss) from
investment transactions (1,430) (1,013) (60) (2,503)
---------- -------- -------- ----------
Net increase in net
assets from operations $1,006,472 $698,749 $101,530 $1,806,751
---------- -------- -------- ----------
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT FEBRUARY 28, 1995
<TABLE>
<CAPTION>
NEW YORK MONEY MARKET
-----------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (note 1) $20,960 $852,805 $473 $874,238
------- -------- ---- --------
Expenses:
Management fees (note 4) 2,864 116,536 64 119,464
12b-1 expense (note 4) 266 12,446 -- 12,712
Shareholders' servicing
agent fees and expenses 1,601 31,442 32 33,075
Custodian's fees and
expenses 817 34,316 227 35,360
Directors' fees and
expenses (note 4) 57 1,798 1 1,856
Professional fees 338 10,923 6 11,267
Shareholders' reports--
printing and mailing
expenses 856 20,472 5 21,333
Federal and state
registration fees -- -- -- --
Other expenses 24 989 10 1,023
------- -------- ---- --------
Total expenses before
expense reimbursement 6,823 228,922 345 236,090
Expense reimbursement from
investment adviser (note
4) (2,920) (68,631) (257) (71,808)
------- -------- ---- --------
Net expenses 3,903 160,291 88 164,282
------- -------- ---- --------
Net investment income 17,057 692,514 385 709,956
Net gain (loss) from
investment transactions -- -- -- --
------- -------- ---- --------
Net increase in net assets
from operations $17,057 $692,514 $385 $709,956
------- -------- ---- --------
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
RESERVES
---------------------------------
Year ended Year ended
2/28/95 2/28/94
- -------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 8,795,175 $ 7,830,250
Net realized gain (loss) from investment
transactions -- --
------------ ------------
Net increase in net assets from operations 8,795,175 7,830,250
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1) (8,795,175) (7,830,250)
------------ ------------
COMMON SHARE TRANSACTIONS (at constant net asset
value of $1 per share) (note 1)
Net proceeds from sales of shares 657,011,312 766,196,962
Net asset value of shares issued to shareholders
due to reinvestment of distributions from net
investment income and from net realized gains
from investment transactions 7,787,100 6,943,302
------------ ------------
664,798,412 773,140,264
Cost of shares redeemed (717,393,211) (819,685,408)
------------ ------------
Net increase (decrease) in net assets derived
from Common share transactions (52,594,799) (46,545,144)
Net assets at the beginning of year 404,201,196 450,746,340
------------ ------------
Net assets at the end of year $351,606,397 $404,201,196
------------ ------------
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
<TABLE>
----------------------------------------------
<CAPTION>
CALIFORNIA MONEY MARKET
----------------------------------------------
Year ended February 28, 1995
----------------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 2,628,687 $ 1,814,647 $ 1,366,100 $ 5,809,434
Net realized gain (loss)
from investment
transactions (11,576) (4,489) (2,299) (18,364)
------------ ------------ ------------ ------------
Net increase in net
assets from operations 2,617,111 1,810,158 1,363,801 5,791,070
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS (note 1) (2,617,111) (1,810,158) (1,363,801) (5,791,070)
------------ ------------ ------------ ------------
COMMON SHARE
TRANSACTIONS (at
constant net asset
value of $1 per share)
(note 1)
Net proceeds from sale
of shares 208,318,412 113,315,156 247,997,081 569,630,649
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment income and
from net realized gains
from investment
transactions 2,983,786 1,322,451 7,041 4,313,278
------------ ------------ ------------ ------------
211,302,198 114,637,607 248,004,122 573,943,927
Cost of shares redeemed (584,768,062) (119,860,860) (229,530,966) (934,159,888)
------------ ------------ ------------ ------------
Net increase (decrease)
in net assets derived
from Common share
transactions (373,465,864) (5,223,253) 18,473,156 (360,215,961)
Net assets at the
beginning of year 415,237,782 72,380,432 32,299,233 519,917,447
------------ ------------ ------------ ------------
Net assets at the end of
year $ 41,771,918 $ 67,157,179 $ 50,772,389 $159,701,486
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET
----------------------------------------------
Year ended February 28, 1994
----------------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 8,697,661 $ 1,401,096 $ 708,239 $ 10,806,996
Net realized gain (loss)
from investment
transactions 993 161 76 1,230
------------ ------------ ------------ ------------
Net increase in net
assets from operations 8,698,654 1,401,257 708,315 10,808,226
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS (note 1) (8,698,654) (1,401,257) (708,315) (10,808,226)
------------ ------------ ------------ ------------
COMMON SHARE
TRANSACTIONS (at
constant net asset
value of $1 per share)
(note 1)
Net proceeds from sale
of shares 593,317,833 109,131,190 231,831,775 934,280,798
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment
income and from net
realized gains from
investment
transactions 8,711,394 1,055,257 7,218 9,773,869
------------ ------------ ------------ ------------
602,029,227 110,186,447 231,838,993 944,054,667
Cost of shares redeemed (656,603,608) (118,457,991) (223,695,990) (998,757,589)
------------ ------------ ------------ ------------
Net increase (decrease)
in net assets derived
from Common share
transactions (54,574,381) (8,271,544) 8,143,003 (54,702,922)
Net assets at the
beginning of year 469,812,163 80,651,976 24,156,230 574,620,369
------------ ------------ ------------ ------------
Net assets at the end of
year $415,237,782 $72,380,432 $32,299,233 $519,917,447
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
MASSACHUSETTS MONEY MARKET
---------------------------------------------
Year ended February 28, 1995
---------------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 1,007,902 $ 699,762 $ 101,590 $ 1,809,254
Net realized gain (loss)
from investment
transactions (1,430) (1,013) (60) (2,503)
------------ ----------- ----------- ------------
Net increase in net
assets from operations 1,006,472 698,749 101,530 1,806,751
------------ ----------- ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS (note 1) (1,006,472) (698,749) (101,530) (1,806,751)
------------ ----------- ----------- ------------
COMMON SHARE
TRANSACTIONS (at
constant net asset
value of $1 per share)
(note 1)
Net proceeds from sale
of shares 126,292,160 26,877,207 10,226,869 163,396,236
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment
income and from net
realized gains from
investment
transactions 982,397 655,827 5,596 1,643,820
------------ ----------- ----------- ------------
127,274,557 27,533,034 10,232,465 165,040,056
Cost of shares redeemed (138,119,127) (31,068,859) (12,602,539) (181,790,525)
------------ ----------- ----------- ------------
Net increase (decrease)
in net assets derived
from Common share
transactions (10,844,570) (3,535,825) (2,370,074) (16,750,469)
Net assets at the
beginning of year 38,576,122 27,773,005 3,405,634 69,754,761
------------ ----------- ----------- ------------
Net assets at the end of
year $ 27,731,552 $24,237,180 $ 1,035,560 $ 53,004,292
------------ ----------- ----------- ------------
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MASSACHUSETTS MONEY MARKET
---------------------------------------------
Year ended February 28, 1994
---------------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 814,885 $ 495,675 $ 78,218 $ 1,388,778
Net realized gain (loss)
from investment
transactions 15 9 2 26
------------ ----------- ---------- ------------
Net increase in net
assets from operations 814,900 495,684 78,220 1,388,804
------------ ----------- ---------- ------------
DISTRIBUTIONS TO SHARE-
HOLDERS (note 1) (814,900) (495,684) (78,220) (1,388,804)
------------ ----------- ---------- ------------
COMMON SHARE TRANSAC-
TIONS (at constant net
asset value of $1 per
share) (note 1)
Net proceeds from sale
of shares 176,973,990 29,011,727 5,412,804 211,398,521
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment income and
from net realized gains
from investment
transactions 806,029 486,759 -- 1,292,788
------------ ----------- ---------- ------------
177,780,019 29,498,486 5,412,804 212,691,309
Cost of shares redeemed (179,417,504) (29,718,817) (7,332,647) (216,468,968)
------------ ----------- ---------- ------------
Net increase (decrease)
in net assets derived
from Common share
transactions (1,637,485) (220,331) (1,919,843) (3,777,659)
Net assets at the
beginning of year 40,213,607 27,993,336 5,325,477 73,532,420
------------ ----------- ---------- ------------
Net assets at the end of
year $ 38,576,122 $27,773,005 $3,405,634 $ 69,754,761
------------ ----------- ---------- ------------
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
NEW YORK MONEY MARKET
-------------------------------------------
Year ended February 28, 1995
-------------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 17,057 $ 692,514 $ 385 $ 709,956
Net realized gain (loss)
from investment
transactions -- -- -- --
---------- ----------- ------- -----------
Net increase in net
assets from operations 17,057 692,514 385 709,956
---------- ----------- ------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS (note 1) (17,057) (692,514) (385) (709,956)
---------- ----------- ------- -----------
COMMON SHARE
TRANSACTIONS (at
constant net asset
value of $1 per share)
(note 1)
Net proceeds from sale
of shares 1,126,675 16,626,815 -- 17,753,490
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment
income and from net
realized gains from
investment
transactions 15,591 626,707 -- 642,298
---------- ----------- ------- -----------
1,142,266 17,253,522 -- 18,395,788
Cost of shares redeemed (1,058,955) (15,341,900) -- (16,400,855)
---------- ----------- ------- -----------
Net increase (decrease)
in net assets derived
from Common share
transactions 83,311 1,911,622 -- 1,994,933
Net assets at the
beginning of year 556,762 27,886,050 16,667 28,459,479
---------- ----------- ------- -----------
Net assets at the end of
year $ 640,073 $29,797,672 $16,667 $30,454,412
---------- ----------- ------- -----------
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NEW YORK MONEY MARKET
------------------------------------------
Year ended February 28, 1994
------------------------------------------
Service Distribution Institutional
Plan series Plan series series Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 7,985 $ 503,453 $ 273 $ 511,711
Net realized gain (loss)
from investment
transactions -- -- -- --
-------- ----------- ------- -----------
Net increase in net
assets from operations 7,985 503,453 273 511,711
-------- ----------- ------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS (note 1) (7,985) (503,453) (273) (511,711)
-------- ----------- ------- -----------
COMMON SHARE
TRANSACTIONS (at
constant net asset
value of $1 per share)
(note 1)
Net proceeds from sales
of shares 837,650 17,150,608 -- 17,988,258
Net asset value of
shares issued to
shareholders due to
reinvestment of
distributions from net
investment
income and from net
realized gains from
investment
transactions 7,546 483,621 -- 491,167
-------- ----------- ------- -----------
845,196 17,634,229 -- 18,479,425
Cost of shares redeemed (817,370) (24,575,123) -- (25,392,493)
-------- ----------- ------- -----------
Net increase (decrease)
in net assets derived
from Common share
transactions 27,826 (6,940,894) -- (6,913,068)
Net assets at the
beginning of year 528,936 34,826,944 16,667 35,372,547
-------- ----------- ------- -----------
Net assets at the end of
year $556,762 $27,886,050 $16,667 $28,459,479
-------- ----------- ------- -----------
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1995
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At February 28, 1995, the money market Funds (the "Funds")
covered in this report are Nuveen Tax-Free Reserves, Inc., a
nationally diversified Fund, Nuveen California Tax-Free Fund,
Inc. (comprised of the Nuveen California Tax-Free Money
Market Fund) and Nuveen Tax-Free Money Market Fund, Inc.
(comprised of the Nuveen Massachusetts and New York Tax-Free
Money Market Funds).
The Funds are registered under the Investment Company Act of
1940 as open-end, diversified management investment
companies.
Each Fund invests in tax-exempt money market instruments.
Shares of the state Funds are issued in three series: (1) the
"Service Plan" series intended for purchase by or through
banks and other organizations who have agreed to perform
certain services for their customers who are shareholders of
this series of the Fund, (2) the "Distribution Plan" series
intended for purchase by or through securities dealers who
have agreed to perform distribution and administrative
services for their customers who are shareholders of this
series of the Fund and (3) the "Institutional" series
intended for purchase by trustees, bank trust departments and
investment bankers or advisers.
Each Fund issues its own shares, at net asset value which
the Fund will seek to maintain at $1.00 per share without
sales charge.
The following is a summary of significant accounting
policies followed by the Funds in the preparation of their
financial statements in accordance with generally accepted
accounting principles.
Securities Investments in each of the Funds consist of short-term
Valuation municipal securities maturing within one year from the date
of acquisition. Securities with a maturity of more than one
year in all cases have variable rate and demand features
qualifying them as short-term securities and are traded and
valued at amortized costs. On a dollar-weighted basis, the
average maturity of all such securities must be 90 days or
less (at February 28, 1995, the dollar-weighted average life
was 29 days for Reserves, 36 days for California Money
Market, 41 days for Massachusetts Money Market and 30 days
for New York Money Market).
Securities Securities transactions are recorded on a trade date basis.
Transactions Realized gains and losses from such transactions are
determined on the specific identification method. Securities
purchased or sold on a when-issued or delayed delivery basis
may be settled a month or more after the transaction date.
The securities so purchased are subject to market fluctuation
during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current
value at least equal
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS
to the amount of their purchase commitments. At February 28,
1995, there were no such purchase commitments in any of the
Funds.
Interest Income Interest income is determined on the basis of interest
accrued, adjusted for premium amortized and discount earned.
Dividends and Net investment income, adjusted for realized short-term gains
Distributions and losses on investment transactions, is declared as a
to Shareholders dividend to shareholders of record as of the close of each
business day and payment is made or reinvestment is credited
to shareholder accounts after month-end.
Federal Income Each Fund is a separate taxpayer for federal income tax
Taxes purposes and intends to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies by distributing all of its income to shareholders.
Therefore, no federal income tax provision is required.
Furthermore, each Fund intends to satisfy conditions which
will enable interest from municipal securities, which is
exempt from regular federal and designated state income taxes
for the California, Massachusetts and New York Money Market
Funds, to retain such tax-exempt status when distributed to
the shareholders of the Funds. All income dividends paid
during the year ended February 28, 1995, have been designated
Exempt Interest Dividends.
Insurance The Funds have obtained commitments (each, a "Commitment")
Commitments from Municipal Bond Investors Assurance Corporation ("MBIA")
with respect to certain designated bonds held by the Funds
for which credit support is furnished by banks ("Approved
Banks") approved by MBIA under its established credit
approval standards. Under the terms of a Commitment, if a
Fund were to determine that certain adverse circumstances
relating to the financial condition of an Approved Bank had
occurred, the Fund could cause MBIA to issue a "while-in-
fund" insurance policy covering the underlying bonds; after
time and subject to further terms and conditions, the Fund
could obtain from MBIA an "insured-to-maturity" insurance
policy as to the covered bonds. Each type of insurance policy
would insure payment of interest on the bonds and payment of
principal at maturity. Although such insurance would not
guarantee the market value of the bonds or the value of the
Funds' shares, the Funds believe that their ability to obtain
insurance for such bonds under such adverse circumstances
will enable the Funds to hold or dispose of such bonds at a
price at or near their par value.
34
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
Derivative In October 1994, the Financial Accounting Standards Board
Financial (FASB) issued Statement of Financial Accounting Standards No.
Instruments 119 Disclosure about Derivative Financial Instruments and
Fair Value of Financial Instruments which prescribes
disclosure requirements for transactions in certain
derivative financial instruments including futures, forward,
swap, and option contracts, and other financial instruments
with similar characteristics. Although the Funds are
authorized to invest in such financial instruments, and may
do so in the future, they did not make any such investments
during the fiscal year ended February 28, 1995, other than
occasional purchases of high quality synthetic money market
securities.
2. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investment
securities during the year ended February 28, 1995, were as
follows:
<TABLE>
<CAPTION>
RESERVES CA MA NY
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases $847,362,455 $518,839,920 $213,588,033 $37,825,720
Sales and maturities 894,725,000 881,582,950 230,435,040 35,805,000
------------ ------------ ------------ -----------
</TABLE>
At February 28, 1995, the cost of investments owned for
federal income tax purposes was the same as the cost for
financial reporting purposes for all Funds.
3. COMPOSITION OF NET ASSETS
At February 28, 1995, the Funds had common stock authorized
at $.01 par value per share. The composition of net assets as
well as the number of authorized shares were as follows:
<TABLE>
<CAPTION>
RESERVES CA MA NY
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital paid in:
Service Plan series $ -- $ 41,771,918 $ 27,731,552 $ 640,073
Distribution Plan se-
ries -- 67,157,179 24,237,180 29,797,672
Institutional series -- 50,772,389 1,035,560 16,667
------------- ------------- ------------- -------------
Total $ 351,606,397 $ 159,701,486 $ 53,004,292 $ 30,454,412
------------- ------------- ------------- -------------
Authorized shares 2,000,000,000 2,350,000,000 2,500,000,000 2,500,000,000
------------- ------------- ------------- -------------
</TABLE>
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen
Advisory Corp. (the "Adviser"), a wholly owned subsidiary of
The John Nuveen Company, each Fund pays to the Adviser an
annual management fee, payable monthly, at the rates set
forth below which are based upon the average daily net asset
value of each Fund:
<TABLE>
<CAPTION>
MANAGEMENT FEES
- -------------------------------------------------------------------
AVERAGE DAILY NET ASSET VALUE RESERVES CA, MA, NY
- -------------------------------------------------------------------
<S> <C> <C>
For the first $500,000,000 .5 of 1% .4 of 1%
For the next $500,000,000 .475 of 1 .375 of 1
For net assets over $1,000,000,000 .45 of 1 .35 of 1
</TABLE>
Also, pursuant to a distribution agreement with the Funds,
Nuveen is the distributor or principal underwriter of Fund
shares and pays sales and promotion expenses in connection
with the offering of Fund shares. The Funds have adopted a
Distribution Plan pursuant to Rule 12b-1 of the Investment
Company Act of 1940 and a Service Plan pursuant to which the
Funds and Nuveen pay, in equal amounts, fees to securities
dealers and service organizations for services rendered in
the distribution of shares of the Funds or the servicing of
shareholder accounts. For Reserves, total service payments to
such securities dealers and organizations on an annualized
basis range from .1 of 1% to .2 of 1% of the average daily
net asset value of serviced accounts up to $10 million and .3
of 1% for such assets over $10 million. For the California,
Massachusetts and New York Money Market Funds, total service
payments to such securities dealers and organizations are .25
of 1% per year of the average daily net asset value of
serviced accounts.
The management fee referred to above is reduced by, or the
Adviser assumes certain expenses of each Fund, in an amount
necessary to prevent the total expenses of each Fund
(including the management fee and each Fund's share of
service payments under the Distribution and Service Plans,
but excluding interest, taxes, fees incurred in acquiring and
disposing of portfolio securities and, to the extent
permitted, extraordinary expenses) in any fiscal year from
exceeding .75 of 1% of the average daily net asset value of
Reserves, and .55 of 1% of the average daily net asset value
of the California, Massachusetts and New York Money Market
Funds.
36
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
The management fee compensates the Adviser for overall
investment advisory and administrative services, and general
office facilities. The Funds pay no compensation directly to
their directors who are affiliated with the Adviser or to
their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
5. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include
general obligation, escrowed and revenue bonds. At February
28, 1995, the revenue sources by municipal purpose for these
investments, expressed as a percent of total investments,
were as follows:
<TABLE>
<CAPTION>
RESERVES CA MA NY
- --------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue bonds:
Pollution control facilities 27% 16% 23% 30%
Health care facilities 28 15 11 13
Housing facilities 4 18 3 16
Lease rental facilities 2 17 -- --
Educational facilities 7 -- 14 4
Water/Sewer facilities 6 -- 2 8
Transportation 3 -- -- 4
Electric facilities -- 3 -- --
Other revenue 9 17 10 8
General obligation bonds 14 14 37 17
- --------------------------------------------------------
100% 100% 100% 100%
--- --- --- ---
</TABLE>
In addition, certain temporary investments in short-term
municipal securities have credit enhancements (letters of
credit, guarantees or insurance) issued by third party
domestic or foreign banks or other institutions (91% for
Reserves, 83% for California, 68% for Massachusetts and 87%
for New York).
For additional information regarding each investment
security, refer to the Portfolio of Investments.
37
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
--------------------------------------------------------------------
Net realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments income capital gains
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RESERVES
- ---------------------------------------------------------------------------------------------
Year ended
2/28/95 $1.000 $.025* $-- $(.025) $--
2/28/94 1.000 .018* -- (.018) --
2/28/93 1.000 .023 -- (.023) --
5 months ended 2/29/92 1.000 .015 -- (.015) --
Year ended
9/30/91 1.000 .046 -- (.046) --
9/30/90 1.000 .055 -- (.055) --
9/30/89 1.000 .057 -- (.057) --
9/30/88 1.000 .045 -- (.045) --
9/30/87 1.000 .039 -- (.039) --
9/30/86 1.000 .045* -- (.045) --
9/30/85 1.000 .050* -- (.050) --
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes on page 44.
38
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
-------------------------------------------
Net
asset Total return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average
period value (in thousands) net assets net assets
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------
$1.000 2.46% $351,606 .75%* 2.43%*
1.000 1.84 404,201 .75* 1.83*
1.000 2.34 450,746 .74 2.35
1.000 1.45 477,127 .75+ 3.48+
1.000 4.57 451,808 .72 4.56
1.000 5.45 430,206 .73 5.45
1.000 5.70 390,258 .72 5.69
1.000 4.52 409,653 .73 4.52
1.000 3.88 361,044 .73 3.85
1.000 4.46 272,677 .75* 4.39*
1.000 4.98 141,762 .75* 4.90*
- --------------------------------------------------------------------------
</TABLE>
39
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
--------------------------------------------------------
Net
realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments income capital gains
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CA**
- -------------------------------------------------------------------------------------
Year ended
2/28/95
Service Plan series $1.000 $.026* $-- $(.026) $--
Distribution Plan se-
ries 1.000 .026* -- (.026) --
Institutional series 1.000 .027 -- (.027) --
Year ended
2/28/94
Service Plan series 1.000 .019 -- (.019) --
Distribution Plan se-
ries 1.000 .019* -- (.019) --
Institutional series 1.000 .021 -- (.021) --
Year ended
2/28/93
Service Plan series 1.000 .023* -- (.023) --
Distribution Plan se-
ries 1.000 .023* -- (.023) --
Institutional series 1.000 .024 -- (.024) --
8 months ended
2/29/92
Service Plan series 1.000 .024* -- (.024) --
Distribution Plan se-
ries 1.000 .024* -- (.024) --
Institutional series 1.000 .025 -- (.025) --
Year ended
6/30/91
Service Plan series 1.000 .047* -- (.047) --
Distribution Plan se-
ries 1.000 .047* -- (.047) --
Institutional series 1.000 .048 -- (.048) --
Year ended
6/30/90++ 1.000 .054* -- (.054) --
6/30/89++ 1.000 .056* -- (.056) --
6/30/88++ 1.000 .043* -- (.043) --
6/30/87++ 1.000 .039* -- (.039) --
3/27/86 to
6/30/86++ 1.000 .011* -- (.011) --
- -------------------------------------------------------------------------------------
</TABLE>
See notes on page 44.
40
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
----------------------------------------------
Net asset Total return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average
period value (in thousands) net assets net assets
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
$1.000 2.59% $ 41,772 .55%* 2.19%*
1.000 2.60 67,157 .55* 2.56*
1.000 2.69 50,772 .47 2.74
1.000 1.94 415,238 .53 1.94
1.000 1.92 72,380 .55* 1.92*
1.000 2.07 32,299 .41 2.06
1.000 2.28 469,812 .55* 2.26*
1.000 2.29 80,652 .55* 2.26*
1.000 2.36 24,156 .47 2.33
1.000 2.39 478,886 .55*+ 3.54*+
1.000 2.39 91,670 .55*+ 3.54*+
1.000 2.45 18,334 .45+ 3.64+
1.000 4.70 431,590 .55* 4.67*
1.000 4.70 90,031 .55* 4.67*
1.000 4.80 22,342 .45 4.77
1.000 5.37 452,465 .55* 5.38*
1.000 5.62 362,927 .55* 5.70*
1.000 4.28 207,897 .55* 4.31*
1.000 3.90 284,956 .50* 3.92*
1.000 1.10 80,871 .05*+ 4.16*+
- -----------------------------------------------------------------------------
</TABLE>
41
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
--------------------------------------------------------
Net
realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments income capital gains
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MA***
- -------------------------------------------------------------------------------------
Year ended
2/28/95
Service Plan series $1.000 $.025* $-- $(.025) $--
Distribution Plan se-
ries 1.000 .025* -- (.025) --
Institutional series 1.000 .026 -- (.026) --
Year ended
2/28/94
Service Plan series 1.000 .018* -- (.018) --
Distribution Plan se-
ries 1.000 .017* -- (.017) --
Institutional series 1.000 .018 -- (.018) --
Year ended
2/28/93
Service Plan series 1.000 .023* -- (.023) --
Distribution Plan se-
ries 1.000 .023* -- (.023) --
Institutional series 1.000 .023* -- (.023) --
10 months ended
2/29/92
Service Plan series 1.000 .032* -- (.032) --
Distribution Plan se-
ries 1.000 .032* -- (.032) --
Institutional series 1.000 .032 -- (.032) --
Year ended
4/30/91
Service Plan series 1.000 .053* -- (.053) --
Distribution Plan se-
ries 1.000 .053* -- (.053) --
Institutional series 1.000 .053* -- (.053) --
Year ended
4/30/90++ 1.000 .057* -- (.057) --
4/30/89++ 1.000 .050* -- (.050) --
4/30/88++ 1.000 .043* -- (.043) --
12/10/86 to
4/30/87++ 1.000 .016* -- (.016) --
- -------------------------------------------------------------------------------------
</TABLE>
See notes on page 44.
42
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
-------------------------------------------
Net
asset Total return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average
period value (in thousands) net assets net assets
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------
$1.000 2.53% $27,732 .55%* 2.55%*
1.000 2.53 24,237 .55* 2.55*
1.000 2.61 1,036 .47 2.63
1.000 1.77 38,576 .52* 1.91*
1.000 1.74 27,773 .55* 1.88*
1.000 1.80 3,406 .49 1.93
1.000 2.33 40,214 .55* 2.34*
1.000 2.33 27,993 .55* 2.34*
1.000 2.34 5,325 .55* 2.34*
1.000 3.22 61,476 .55*+ 3.80*+
1.000 3.22 34,509 .55*+ 3.80*+
1.000 3.24 8,917 .53+ 3.82+
1.000 5.30 37,979 .55* 5.25*
1.000 5.30 33,809 .55* 5.25*
1.000 5.30 14,973 .54* 5.26*
1.000 5.70 53,631 .55* 5.67*
1.000 5.00 31,319 .55* 5.18*
1.000 4.29 35,614 .48* 4.30*
1.000 1.60 12,371 .06*+ 4.36*+
- --------------------------------------------------------------------------
</TABLE>
43
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment
operations Less distributions
-------------------------------------------------------
Net
realized
and
Net asset unrealized Dividends
value Net gain (loss) from net Distributions
beginning investment from investment from
of period income investments income capital gains
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NY***
- ------------------------------------------------------------------------------------
Year ended
2/28/95
Service Plan series $1.000 $.024* $-- $(.024) $--
Distribution Plan
series 1.000 .024* -- (.024) --
Institutional series 1.000 .023* -- (.023) --
Year ended
2/28/94
Service Plan series 1.000 .015* -- (.015) --
Distribution Plan
series 1.000 .015* -- (.015) --
Institutional series 1.000 .015* -- (.015) --
Year ended
2/28/93
Service Plan series 1.000 .020* -- (.020) --
Distribution Plan
series 1.000 .020* -- (.020) --
Institutional series 1.000 .020* -- (.020) --
10 months ended
2/29/92
Service Plan series 1.000 .029* -- (.029) --
Distribution Plan
series 1.000 .029* -- (.029) --
Institutional series 1.000 .030* -- (.030) --
Year ended
4/30/91
Service Plan series 1.000 .047* -- (.047) --
Distribution Plan
series 1.000 .047* -- (.047) --
Institutional series 1.000 .047* -- (.047) --
Year ended --
4/30/90++ 1.000 .054* -- (.054) --
4/30/89++ 1.000 .050* -- (.050) --
4/30/88++ 1.000 .041* -- (.041) --
12/10/86 to
4/30/87++ 1.000 .015* -- (.015) --
- ------------------------------------------------------------------------------------
</TABLE>
* Reflects the waiver of certain management fees and reimbursement of certain
other expenses by the Adviser. See note 4 of Notes to Financial Statements.
** Effective for the fiscal year ending June 30, 1991, and thereafter, the Fund
has presented the above per share data by series.
*** Effective for the fiscal year ending April 30, 1991, and thereafter, the
Fund has presented the above per share data by series.
+ Annualized.
++ Represents combined per share data and ratios for the Service Plan,
Distribution Plan and Institutional series.
44
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUNDS ANNUAL REPORT
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental data
--------------------------------------------
Net
asset Total return Ratio of net
value on Net assets Ratio of investment income
end of net asset end of period expenses to average to average
period value (in thousands) net assets net assets
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
$1.000 2.36% $ 640 .55%* 2.38%*
1.000 2.37 29,798 .55* 2.38*
1.000 2.28 17 .55* 2.38*
1.000 1.51 557 .55* 1.63*
1.000 1.51 27,886 .55* 1.63*
1.000 1.51 17 .55* 1.63*
1.000 2.02 529 .55* 2.04*
1.000 2.02 34,827 .55* 2.04*
1.000 2.02 17 .55* 2.19*
1.000 2.94 1,934 .55*+ 3.51*+
1.000 2.94 45,259 .55*+ 3.51*+
1.000 2.97 17 .55*+ 3.51*+
1.000 4.73 1,653 .55* 4.72*
1.000 4.73 41,446 .55* 4.72*
1.000 4.73 17 .55* 4.72*
1.000 5.36 41,602 .55* 5.34*
1.000 4.95 30,262 .55* 5.05*
1.000 4.10 17,016 .50* 4.07*
1.000 1.50 4,134 .05*+ 4.20*+
- ---------------------------------------------------------------------------
</TABLE>
45
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Nuveen Tax-Free Reserves,
Nuveen California Tax-Free Fund, Inc.,
Nuveen Tax-Free Money Market Fund, Inc.:
We have audited the accompanying statements of net assets of
NUVEEN TAX-FREE RESERVES (a Maryland corporation), NUVEEN
CALIFORNIA TAX-FREE FUND, INC. (comprised of Nuveen
California Tax-Free Money Market Fund) (a Maryland
corporation) and NUVEEN TAX-FREE MONEY MARKET FUND, INC.
(comprised of Nuveen Massachusetts and New York Tax-Free
Money Market Funds) (a Minnesota corporation), including the
portfolios of investments, as of February 28, 1995, and the
related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years
in the period then ended and the financial highlights for the
periods indicated thereon. These financial statements and
financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of
February 28, 1995, by correspondence with the custodian and
brokers. As to securities purchased but not received, we
requested confirmation from brokers and, when replies were
not received, we carried out other alternative auditing
procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the net assets of each of the respective funds
constituting Nuveen Tax-Free Reserves, Nuveen California Tax-
Free Fund, Inc. and Nuveen Tax-Free Money Market Fund, Inc.
as of February 28, 1995, the results of their operations for
the year then ended, the changes in their net assets for each
of the two years in the period then ended, and the financial
highlights for the periods indicated thereon in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
April 3, 1995
46
<PAGE>
The
human bond
[PHOTO OF BOOK APPEARS HERE]
At John Nuveen & Co.
Incorporated, where our
tax-free municipal bonds have
helped people live their
dreams for nearly 100
years, we still believe our strongest
bond is human./TM/
For almost a century, John Nuveen & Company has concentrated its resources and
expertise on one area: municipal bonds. We are the oldest and largest investment
banking firm specializing exclusively in municipal securities, and we strive to
be the best.
We maintain a sharp focus on the needs of prudent investors and their
families, offer investments of quality, and then work to make them better by
seeking out opportunity. We hold to a dedicated belief in the importance of
research. And we sustain a commitment to sound financial management through
value investing.
Our hope is that by providing quality investments we may foster opportunity
for our investors. Through careful research, attention to detail, and our
philosophy of managing for long-term value, we hope to provide our shareholders
with the attractive level of income they need to achieve their personal goals
and aspirations.
These are the things that matter most, and it's why we say that, at Nuveen, our
strongest bond is human.
[LOGO OF NUVEEN]
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
<PAGE>
PART C--OTHER INFORMATION
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
PART C--OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements:
Included in the Prospectus:
Financial Highlights
Included in the Statement of Additional Information through incorporation
by reference to the Registrant's Annual Report:
Portfolio of Investments, February 28, 1995
Statement of Net Assets, February 28, 1995
Statement of Operations, Year Ended February 28, 1995
Statement of Changes in Net Assets, Years Ended February 28, 1995 and
February 28, 1994
Report of Independent Public Accountants dated April 3, 1995
(b) Exhibits
<TABLE>
<C> <S>
1. Articles of Incorporation of Registrant, as amended. Filed as Exhibit 1
to Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A (File No. 33-8371) and are incorporated herein
by reference thereto.
2. By-Laws of Registrant, as amended. Filed as Exhibit 2 to Post-Effective
Amendment No. 8 to the Registrant's Registration Statement on Form N-1A
(File No. 33-8371) and are incorporated herein by reference thereto.
3. Not applicable.
4. Specimen certificates of shares of Capital Stock of Registrant. Filed
as Exhibit 4 to Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A (File No. 33-8371) and are
incorporated herein by reference thereto.
5(a). Investment Management Agreement between Registrant and Nuveen Advisory
Corp., dated July 30, 1986.
5(b). Amendment, dated April 30, 1990, to Investment Management Agreement.
5(c). Renewal, dated July 14, 1994, of Investment Management Agreement.
6(a). Distribution Agreement between Registrant and John Nuveen & Co.
Incorporated, dated July 30, 1986. Filed as Exhibit 6 to Registrant's
Registration Statement on Form N-1A (File No. 33-8371) and is
incorporated herein by this reference thereto.
6(b). Renewal, dated July 29, 1994, of Distribution Agreement.
7. Not applicable.
</TABLE>
C-1
<PAGE>
<TABLE>
<C> <S>
8. Custody Agreement, dated October 1, 1993, between Registrant and United
States Trust Company of New York. Filed as Exhibit 8 to Post-Effective
Amendment No. 8 to Registrant's Registration Statement on Form N-1A
(File No. 33-8371) and is incorporated herein by reference thereto.
9(a). Transfer Agency Agreement between Registrant and Shareholder Services,
Inc., dated December 19, 1994.
9(b). Service Plan adopted with respect to shares of the Registrant's Service
Plan Series. Filed as Exhibit 9(b) to Registrant's Registration
Statement on Form N-1A (File No. 33-8371) and is incorporated herein by
this reference thereto.
9(c). Service Agreement, as amended, relating to the Service Plan and adopted
with respect to shares of the Registrant's Service Plan Series. Filed
as Exhibit 9(c) to Post-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N1-A (File 33-8371) and is incorporated
by reference herein.
10(a). Opinion of Fried, Frank, Harris, Shriver & Jacobson, dated April 26,
1995.
10(b). Opinion of Dorsey & Whitney P.L.L.P., dated April 26, 1995.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Subscription Agreement of Nuveen Advisory Corp., dated July 30, 1986.
Filed as Exhibit 13 to Registrant's Registration Statement on Form N-1A
(File No. 33-8371) and is incorporated herein by this reference
thereto.
14. Not applicable.
15(a). Distribution Plan adopted under Rule 12b-1 with respect to shares of
the Registrant's Distribution Plan Series. Filed as Exhibit 15 to
Registrant's Registration Statement on Form N-1A (File No. 33-8371) and
is incorporated herein by this reference thereto.
15(b). Distribution and Service Agreement, as amended, relating to the
Distribution Plan and adopted with respect to shares of the
Registrant's Distribution Plan Series. Filed as Exhibit 15(b) to Post-
Effective Amendment No. 2 to Registrant's Registration Statement on
Form N-1A (File No. 33-8371) and is incorporated herein by this
reference thereto.
16. Schedule of Computation of Yield Figures.
17. Financial Data Schedule.
18. Not applicable.
99(a). Agreement for a Money Market Fund Insurance Program. Filed as Exhibit
18 to Post-Effective Amendment No. 8 to Registrant's Registration
Statement on Form N-1A (File No. 33-8371) and is incorporated herein by
reference thereto.
99(b). Certified copy of resolution of Board of Directors authorizing the
signing of the names of directors and officers on the registration
statement pursuant to power of attorney.
</TABLE>
C-2
<PAGE>
<TABLE>
<C> <S>
99(c). Original Powers of Attorney of all Registrant's Directors authorizing,
among others, James J. Wesolowski and Gifford R. Zimmerman to execute
the Registration Statement.
99(d). Code of Ethics and Reporting Requirements.
</TABLE>
ITEM 25: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26: NUMBER OF HOLDERS OF SECURITIES
At April 17, 1995:
<TABLE>
<CAPTION>
TITLE OF SERIES NUMBER OF RECORD HOLDERS
--------------- ------------------------
<S> <C>
Massachusetts Fund--Distribution Plan Series..... 1,145
Massachusetts Fund--Service Plan Series.......... 45
Massachusetts Fund--Institutional Series......... 5
New York Fund--Distribution Plan Series.......... 1,116
New York Fund--Service Plan Series............... 52
New York Fund--Institutional Series.............. 1
</TABLE>
ITEM 27: INDEMNIFICATION
Article EIGHTH of the Registrant's Articles of Incorporation provides as fol-
lows:
EIGHTH: To the maximum extent permitted by the Minnesota Business Corpora-
tion Act, as from time to time amended, the Corporation shall indemnify its
currently acting and its former directors, officers, employees and agents,
and those persons who, at the request of the Corporation serve or have
served another corporation, partnership, joint venture, trust or other en-
terprise in one or more such capacities. The indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
seeking indemnification may otherwise be entitled.
Expenses (including attorneys' fees) incurred in defending a civil or crim-
inal action, suit or proceeding (including costs connected with the prepa-
ration of a settlement) may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding, if authorized by the
Board of Directors in the specific case, upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay that
amount of the advance which exceeds the amount which it is ultimately de-
termined that he is entitled to receive from the Corporation by reason of
indemnification as authorized herein; provided, however, that prior to mak-
ing any such advance at least one of the following conditions shall have
been met: (1) the indemnitee shall provide a security for his undertaking,
(2) the Corporation shall be insured against losses arising by reason of
any lawful advances, or (3) a majority of a quorum of the disinterested,
non-party directors of the Corporation, or an independent legal counsel in
a written opinion, shall determine, based on a review of readily available
facts, that there is reason to believe that the indemnitee ultimately will
be found entitled to indemnification.
C-3
<PAGE>
Nothing in these Articles of Incorporation or in the By-Laws shall be
deemed to protect or provide indemnification to any director or officer of
the Corporation against any liability to the Corporation or to its security
holders to which he would otherwise be subject by reason of willful misfea-
sance, bad faith, gross negligence or reckless disregard of the duties in-
volved in the conduct of his office ("disabling conduct"), and the Corpora-
tion shall not indemnify any of its officers or directors against any lia-
bility to the Corporation or to its security holders unless a determination
shall have been made in the manner provided hereafter that such liability
has not arisen from such officer's or director's disabling conduct. A de-
termination that an officer or director is entitled to indemnification
shall have been properly made if it is based upon (1) a final decision on
the merits by a court or other body before whom the proceeding was brought
that the indemnitee was not liable by reason of disabling conduct or, (2)
in the absence of such a decision, a reasonable determination, based upon a
review of the facts, that the indemnitee was not liable by reason of disa-
bling conduct, by (a) the vote of a majority of a quorum of directors who
are neither "interested persons" of the Corporation as defined in the In-
vestment Company Act of 1940 nor parties to the proceeding, or (b) an inde-
pendent legal counsel in a written opinion.
The directors and officers of the Registrant are covered by an Investment
Trust Errors and Omission policy in the aggregate amount of $20,000,000 (with
a maximum deductible of $500,000) against liability and expenses of claims of
wrongful acts arising out of their position with the Registrant, except for
matters which involve willful acts, bad faith, gross negligence and willful
disregard of duty (i.e., where the insured did not act in good faith for a
purpose he or she reasonably believed to be in the best interest of the Regis-
trant or where he or she had reasonable cause to believe this conduct was un-
lawful).
ITEM 28: BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Nuveen Advisory Corp. serves as investment adviser to the following open-end
management type investment companies: Nuveen Municipal Bond Fund, Inc., Nuveen
Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves, Inc., Nuveen
California Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund, Inc., Nuveen In-
sured Tax-Free Bond Fund, Inc. Nuveen Tax-Free Money Market Fund, Inc. and
Nuveen Multistate Tax-Free Trust. It also serves as investment adviser to the
following closed-end management investment companies: Nuveen Municipal Value
Fund, Inc., Nuveen California Municipal Value Fund, Inc., Nuveen New York Mu-
nicipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc., Nuveen Califor-
nia Municipal Income Fund, Inc., Nuveen New York Municipal Income Fund, Inc.,
Nuveen Premium Income Municipal Fund, Inc., Nuveen Performance Plus Municipal
Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc., Nuveen
New York Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage
Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen California
Municipal Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal
Fund, Inc., Nuveen California Investment Quality Municipal Fund, Inc., Nuveen
New York Investment Quality Municipal Fund, Inc., Nuveen Insured Quality Mu-
nicipal Fund, Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen
New Jersey Investment Quality Municipal Fund, Inc., Nuveen Pennsylvania In-
vestment Quality Municipal Fund, Nuveen Select Quality Municipal Fund, Inc.,
Nuveen California Select Quality Municipal Fund, Inc., Nuveen New York Select
Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc.,
Nuveen Insured Municipal Op
C-4
<PAGE>
portunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund, Nuveen
Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income Munic-
ipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen California
Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Municipal
Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier Insured
Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund 2, Inc.,
Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen Insured
New York Premium Income Municipal Fund, Inc., Nuveen Select Maturities Munici-
pal Fund, Nuveen Arizona Premium Income Municipal Fund, Inc., Nuveen Insured
Florida Premium Income Municipal Fund, Nuveen Michigan Premium Income Municipal
Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc., Nuveen In-
sured Premium Income Municipal Fund, Inc., Nuveen Premium Income Municipal Fund
4, Inc., Nuveen Insured California Premium Income Municipal Fund 2, Inc.,
Nuveen Pennsylvania Premium Income Municipal Fund 2, Nuveen Maryland Premium
Income Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund,
Nuveen Virginia Premium Income Municipal Fund, Nuveen Washington Premium Income
Municipal Fund, Nuveen Connecticut Premium Income Municipal Fund, Nuveen Geor-
gia Premium Income Municipal Fund, Nuveen Missouri Premium Income Municipal
Fund, Nuveen North Carolina Premium Income Municipal Fund, Nuveen California
Premium Income Municipal Fund and Nuveen Insured Premium Income Municipal Fund
2. Nuveen Advisory Corp. has no other clients or business at the present time.
The principal business address for all of these investment companies is 333
West Wacker Drive, Chicago, Illinois, 60606. For a description of other busi-
ness, profession, vocation or employment of a substantial nature in which any
director or officer, other than Donald E. Sveen and Anthony T. Dean, of the in-
vestment adviser has engaged during the last two years for his account or in
the capacity of director, officer, employee, partner or trustee, see the de-
scriptions under "Management" in the Statement of Additional Information.
Donald E. Sveen is President and Director, formerly Executive Vice President,
of Nuveen Advisory Corp., the investment adviser. Mr. Sveen has, during the
last two years, been President, Director and formerly Executive Vice President
of John Nuveen & Co. Incorporated; and President and Director of Nuveen Insti-
tutional Advisory Corp. Anthony T. Dean is Director of Nuveen Advisory Corp.,
the investment adviser. Mr. Dean has, during the last two years, been Executive
Vice President and Director of John Nuveen Company and John Nuveen & Co. Incor-
porated; and Director of Nuveen Institutional Advisory Corp.
ITEM 29: PRINCIPAL UNDERWRITERS
(a) John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter of
the Nuveen Municipal Bond Fund, Inc., Nuveen Tax-Exempt Money Market Fund,
Inc., Nuveen Tax-Free Reserves, Inc., Nuveen California Tax-Free Fund, Inc.,
Nuveen Tax-Free Bond Fund, Inc., Nuveen Insured Tax-Free Bond Fund, Inc.,
Nuveen Tax-Free Money Market Fund, Inc. and Nuveen Multistate Tax-Free Trust,
all open-end management investment companies. Nuveen also acts as depositor and
principal underwriter of the Nuveen Tax-Exempt Unit Trust, a registered unit
investment trust. Nuveen has also served or is serving as a co-managing under-
writer of the shares of Nuveen Municipal Value Fund, Inc., Nuveen California
Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund, Inc., Nuveen
Municipal Income Fund, Inc., Nuveen California Municipal Income Fund, Inc.,
Nuveen New
C-5
<PAGE>
York Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund, Inc.,
Nuveen Performance Plus Municipal Fund, Inc., Nuveen California Performance
Plus Municipal Fund, Inc., Nuveen New York Performance Plus Municipal Fund,
Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportu-
nity Fund, Inc., Nuveen California Municipal Market Opportunity Fund, Inc.,
Nuveen Investment Quality Municipal Fund, Inc., Nuveen California Investment
Quality Municipal Fund, Inc., Nuveen New York Investment Quality Municipal
Fund, Inc., Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida In-
vestment Quality Municipal Fund, Nuveen New Jersey Investment Quality Munici-
pal Fund, Inc., Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen
Select Quality Municipal Fund, Inc., Nuveen California Select Quality Munici-
pal Fund, Inc., Nuveen New York Select Quality Municipal Fund, Inc., Nuveen
Quality Income Municipal Fund, Inc., Nuveen Insured Municipal Opportunity
Fund, Inc., Nuveen Florida Quality Income Municipal Fund, Nuveen Michigan
Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income Municipal
Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen California
Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Municipal
Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier Insured
Municipal Income Fund, Inc., Nuveen Select Tax-Free Income Portfolio, Nuveen
Premium Income Municipal Fund 2, Inc., Nuveen Insured California Premium In-
come Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal
Fund, Inc., Nuveen Select Maturities Municipal Fund, Nuveen Arizona Premium
Income Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal
Fund, Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey
Premium Income Municipal Fund, Inc., Nuveen Insured Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured Cali-
fornia Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium In-
come Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen
Massachusetts Premium Income Municipal Fund, Nuveen Virginia Premium Income
Municipal Fund, Nuveen Washington Premium Income Municipal Fund, Nuveen Con-
necticut Premium Income Municipal Fund, Nuveen Georgia Premium Income Munici-
pal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen North Carolina
Premium Income Municipal Fund, Nuveen California Premium Income Municipal
Fund, Nuveen Insured Premium Income Municipal Fund 2, Nuveen Select Tax-Free
Income Portfolio 2, Nuveen Insured California Select Tax-Free Income Portfo-
lio, Nuveen Insured New York Select Tax-Free Income Portfolio and Nuveen Se-
lect Tax-Free Income Portfolio 3.
C-6
<PAGE>
(b)
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------------------------------------------------
<S> <C> <C>
Richard J. Franke Chairman of the Board, Chairman of the Board
333 West Wacker Chief Executive Officer and Director and Director
Drive
Chicago, IL 60606
Donald E. Sveen President, Chief Operating None
333 West Wacker Officer and Director
Drive
Chicago, IL 60606
Anthony T. Dean Executive Vice President None
333 West Wacker and Director
Drive
Chicago, IL 60606
Timothy R. Executive Vice President President and Director
Schwertfeger and Director
333 West Wacker
Drive
Chicago, IL 60606
William Adams IV Vice President None
333 West Wacker
Drive
Chicago, IL 60606
Kathleen M. Vice President Vice President
Flanagan
333 West Wacker
Drive
Chicago, IL 60606
Stephen D. Foy Vice President None
333 West Wacker
Drive
Chicago, IL 60606
Robert D. Freeland Vice President None
333 West Wacker
Drive
Chicago, IL 60606
Michael G. Gaffney Vice President None
333 West Wacker
Drive
Chicago, IL 60606
James W. Vice President None
Gratehouse
333 West Wacker
Drive
Chicago, IL 60606
Paul E. Greenawalt Vice President None
333 West Wacker
Drive
Chicago, IL 60606
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ---------------------------------------------------------------------------------
<S> <C> <C>
Anna R. Kucinskis Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
Robert B. Kuppenheimer Vice President None
333 West Wacker Drive
Chicago, IL 60606
Larry W. Martin Vice President and Vice President and
333 West Wacker Drive Assistant Secretary Assistant Secretary
Chicago, IL 60606
Thomas C. Muntz Vice President None
333 West Wacker Drive
Chicago, IL 60606
O. Walter Renfftlen Vice President and Vice President and
333 West Wacker Drive Controller Controller
Chicago, IL 60606
Stuart W. Rogers Vice President None
333 West Wacker Drive
Chicago, IL 60606
Bradford W. Shaw, Jr. Vice President None
333 West Wacker Drive
Chicago, IL 60606
H. William Stabenow Vice President and Vice President and
333 West Wacker Drive Treasurer Treasurer
Chicago, IL 60606
George P. Thermos Vice President Vice President
333 West Wacker Drive
Chicago, IL 60606
James J. Wesolowski Vice President, General Vice President and
333 West Wacker Drive Counsel and Secretary Secretary
Chicago, IL 60606
Paul C. Williams Vice President None
333 West Wacker Drive
Chicago, IL 60606
Gifford R. Zimmerman Vice President and Vice President and
333 West Wacker Drive Assistant Secretary Assistant Secretary
Chicago, IL 60606
</TABLE>
(c) Not applicable.
C-8
<PAGE>
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Nuveen Advisory Corp., 333 West Wacker Drive, Chicago, Illinois, 60606, main-
tains Articles of Incorporation, By-Laws, minutes of directors and shareholder
meetings, contracts and all advisory material of the investment adviser.
United States Trust Company of New York, 114 West 47th Street, New York, New
York 10036, maintains all general and subsidiary ledgers, journals, trial bal-
ances, records of all portfolio purchases and sales, and all other required
records not maintained by Nuveen Advisory Corp. or Shareholder Services, Inc.
Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado, 80217-5330, main-
tains all the required records in its capacity as transfer, dividend paying,
and shareholder service agent for the Registrant.
ITEM 31: MANAGEMENT SERVICES
Not applicable.
ITEM 32: UNDERTAKINGS
Not applicable.
C-9
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940 THE REGISTRANT CERTIFIES THAT THIS REGISTRATION STATEMENT
MEETS ALL THE REQUIREMENTS FOR EFFECTIVENESS UNDER PARAGRAPH (B) OF RULE 485
UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS REGISTRATION STATE-
MENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED,
IN THIS CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 27TH DAY OF APRIL,
1995.
NUVEEN TAX-FREE MONEY MARKET FUND,
INC.
/s/ Gifford R. Zimmerman
--------------------------------------
Gifford R. Zimmerman, Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ O. Walter Renfftlen
- -------------------------------
O. Walter Renfftlen Vice President and April 27, 1995
Controller (Principal
Financial and
Accounting Officer)
Richard J. Franke Chairman of the Board
and Director (Principal
Executive Officer)
Lawrence H. Brown Director
Anne E. Impellizzeri Director
/s/ Gifford R.
Zimmerman
By_________________________
John E. O'Toole Director Gifford R. Zimmerman
Margaret K. Rosenheim Director Attorney-in-Fact
Peter R. Sawers Director April , 1995
Timothy R. Schwertfeger President and Director
</TABLE>
AN ORIGINAL POWER OF ATTORNEY AUTHORIZING, AMONG OTHERS, JAMES J. WESOLOWSKI
AND GIFFORD R. ZIMMERMAN TO EXECUTE THIS REGISTRATION STATEMENT, AND AMEND-
MENTS THERETO, FOR EACH OF THE OFFICERS AND DIRECTORS OF REGISTRANT ON WHOSE
BEHALF THIS REGISTRATION STATEMENT IS FILED, HAS BEEN EXECUTED AND FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION.
C-10
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
5(a). Investment Management Agreement between Registrant
and Nuveen Advisory Corp. dated July 30, 1986.
5(b). Amendment, dated April 30, 1990, to Investment Man-
agement Agreement.
5(c). Renewal, dated July 14, 1994, of Investment Manage-
ment Agreement.
6(b). Renewal, dated July 29, 1994, of Distribution Agree-
ment.
9(a). Transfer Agency Agreement between Registrant and
Shareholder Services, Inc. dated December 19, 1994.
10(a). Opinion of Fried, Frank, Harris, Shriver & Jacobson,
dated April 26, 1995.
10(b). Opinion of Dorsey & Whitney P.L.L.P., dated April 26,
1995.
11. Consent of Independent Public Accountants.
16. Schedule of Computation of Yield Figures.
17. Financial Data Schedule.
99(b). Certified copy of resolution of Board of Directors
authorizing the signing of the names of directors and
officers on the Registration Statement pursuant to
power of attorney.
99(c). Original Power of Attorney for all of Registrant's
Directors authorizing, among others, James J. Weso-
lowski and Gifford R. Zimmerman to execute the Regis-
tration Statement.
99(d). Code of Ethics and Reporting Requirements.
</TABLE>
<PAGE>
Exhibit 5(a)
INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
AGREEMENT made this 30th day of July, 1986, by and between NUVEEN TAX-FREE
MONEY MARKET FUND, INC., a Minnesota corporation (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
investment objective and policies and limitations relating to each such
portfolio, and to administer the Fund's affairs to the extent requested by and
subject to the supervision of the Board of Directors 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 instructions
with respect to securities investments relating to such portfolio as set forth
in the Fund's Registration Statement on Form N-1A under the Securities Act of
1933 and the Investment Company Act of 1940 covering the Fund's shares of
Common Stock, 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,
<PAGE>
-2-
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 transfer agent and shareholder service agent) for the
Fund, to permit any of its officers or employees to serve without compensation
as directors or officers of the Fund if elected to such positions, and to
assume the obligations herein set forth for the compensation herein provided.
The Adviser shall, for all purposes herein provided, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for nor represent the Fund in any way, nor
otherwise be deemed an agent of the Fund.
2. For the services and facilities described in Section 1, the Fund will pay to
the Adviser, at the end of each calendar month, an investment management fee
computed at the rate of .4 of 1% of the average daily net assets of each
portfolio for the first $500 million in net assets of such portfolio, .375 of
1% of average daily net assets in excess of $500 million but not more than $1
billion, and .35 of 1% of average daily net assets in excess of $1 billion.
<PAGE>
-3-
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 to 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.
3. In addition to the services and facilities described in Section 1 the
Adviser shall assume and pay to the extent hereafter provided the following
expenses related to each Fund portfolio: (a) any expenses for services rendered
by a custodian for the safekeeping of portfolio securities or other property,
for keeping books of account, for calculating the net asset value of the shares
related to such portfolio as provided in the Articles of Incorporation of the
Fund, and any other charges of the custodian; (b) the cost and expenses of the
Fund's operations related to the portfolio, including its allocated share of
the compensation of the directors, transfer, dividend disbursing and shareholder
service agent expenses, legal fees, expenses of independent accountants, cost
of share certificates, expenses of preparing, printing and distributing reports
to shareholders and governmental agencies, and all fees payable to Federal,
State, or other governmental agencies on account of the registration of
securities issued by the Fund, filing of corporate documents or otherwise; and
(c) any amounts due from the Fund as its
<PAGE>
-4-
share of service payments made pursuant to the Fund's Distribution and
Service Plans. Notwithstanding the foregoing, the Adviser shall not be
obligated to assume or pay interest, taxes, fees incurred in acquiring
and disposing of portfolio securities or extraordinary expenses of the
Fund. The Fund shall not incur any obligation for management or
administrative expenses which the Fund intends the Adviser to assume
and pay hereunder without first obtaining the written approval of the
Adviser.
The foregoing enumerated expenses are hereby assumed by the Adviser
with respect to each portfolio to the extent they, together with the
Adviser's fee payable hereunder with respect to such portfolio (but
excluding interest, taxes, fees incurred in acquiring and disposing of
portfolio securities and extraordinary expenses), exceed during any fiscal
year .55 of 1% of the average net assets for each Series of shares; to the
extent they do not exceed such percentage, such expenses shall be properly
chargeable to the Fund. If, at the end of any month, the expenses of the
Fund properly chargeable to the income account for any portfolio or Series
of a portfolio on a year-to-date basis shall exceed the appropriate percentage
of average net assets of such portfolio or Series, the payment to the Adviser
for that month related to such portfolio shall be reduced and, if necessary,
the Adviser shall assume and pay expenses pursuant hereto so that the total
year-to-date net expense for such portfolio or Series
<PAGE>
-5-
will not exceed such percentage. As of the end of the Fund's fiscal year,
the foregoing computation and assumption of expenses shall be readjusted,
if necessary, so that the expenses allocable to each portfolio or Series
assumed and paid by the Adviser, if any, are such, and the aggregate
compensation payable to the Adviser related to each portfolio or Series
for the year, (otherwise equal to the percentages set forth in Section 2
hereof of the average net asset value of each portfolio or Series as
determined and described herein throughout the fiscal year) is diminished
as may be necessary, so that the total amount of expenses of each portfolio
or Series borne by the Fund shall not exceed the applicable expense
limitation.
The net asset value of the shares shall be calculated as provided in the
Articles of Incorporation of the Fund. On each day when net asset value is not
calculated, the net asset value of a share of Common Stock 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.
The Adviser shall arrange for officers or employees of the Adviser to
serve, without compensation from the Fund, as directors, officers or agents of
the Fund, if duly elected or appointed to such positions, and subject to their
individual consent and to any limitations imposed by law.
<PAGE>
-6-
4. Subject to applicable statutes and regulations, it is understood that
officers, directors, 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 directors, 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
<PAGE>
-7-
funds purchasing securities whenever decisions are made to purchase or sell
securities by a Fund portfolio and another Fund 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 May 1, 1987, 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 Directors or by vote of a
majority of the outstanding shares of the Common Stock of the Fund, accompanied
by appropriate notice.
<PAGE>
-8-
This Agreement may be terminated, at any time, without the payment of any
penalty, by the Board of Directors of the Fund, or by vote of a majority of the
outstanding shares of Common Stock of the Fund, in the event that it shall have
been established by a court of competent jurisdiction that the Adviser, or any
officer or director of the Adviser, has taken any action which results in a
breach of the covenants of the Adviser set forth herein.
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. 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.
<PAGE>
-9-
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement
to be executed on the day and year above written.
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
By: /s/ John A. McTavish
------------------------------------
Vice President
Attest: /s/ James J. Wesolowski
--------------------------------
Assistant Secretary
NUVEEN ADVISORY CORP.
By: /s/ Paul R. Daniels
------------------------------------
Vice President
Attest: /s/ James J. Wesolowski
--------------------------------
Assistant Secretary
<PAGE>
Exhibit 5(b)
AMENDMENT TO INVESTMENT MANAGEMENT AGREEMENT
--------------------------------------------
This Agreement made this 30th day of April, 1990, by and between Nuveen
Tax-Free Money Market Fund, Inc., a Minnesota corporation (the "Fund"), and
Nuveen Advisory Corp., a Delaware corporation (the "Adviser").
WHEREAS, the Investment Management Agreement between the Fund and Nuveen
Advisory Corp. by its terms permits termination, among other circumstances, by a
vote of a majority of the outstanding shares of the Fund but not by vote of the
holders of a single portfolio; and
WHEREAS, the staff of the Securities and Exchange Commission in a routine
examination of the Fund noted that although the Investment Company Act does not
specifically require an investment advisory agreement to permit termination as
to any particular portfolio, the staff's position is that termination by vote of
the shareholders of each portfolio should be permitted; and
WHEREAS, the parties hereto believe that permitting such termination is
reasonable and consistent with the policies underlying the Investment Company
Act.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and in
the Agreement as hereby amended, the parties hereto agree to amend Section 7 of
the Agreement to read as follows:
7. This Agreement shall continue in effect until May 1, 1991, 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 in its entirety or with respect to any
portfolio 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 Directors or,
with respect to any Fund portfolio, by vote of a majority of the
outstanding shares of the Common Stock 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 Directors of the Fund, or, with respect to
any Fund portfolio, by vote of a majority of the outstanding shares of
Common Stock 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.
<PAGE>
Exhibit 6(b)
Renewal of Distribution Agreement
---------------------------------
This Agreement made this 29th day of July, 1994 by and between Nuveen Tax-Free
Money Market Fund, Inc., a Minnesota corporation (the "Fund"), and John Nuveen &
Co. Incorporated, a Delaware corporation (the "Underwriter");
WHEREAS, the parties hereto are the contracting parties under that certain
Distribution Agreement (the "Agreement") pursuant to which the Underwriter
acts as agent for the distribution of shares of the Fund; and
WHEREAS, the Agreement terminates August 1, 1994 unless continued in the manner
required by the Investment Company Act of 1940; and
WHEREAS, in connection with the implementation of its Flexible Pricing
Structure, the form of the Dealer Distribution Agreement attached as an Exhibit
has been revised; and
WHEREAS, the Board of Directors of the Fund, at a meeting called for the purpose
of reviewing the Agreement has approved the Agreement with the revised form of
Dealer Distribution Agreement as an Exhibit, and its continuance until August 1,
1995 in the manner required by the Investment Company Act of 1940;
NOW THEREFORE, in consideration of the mutual covenants contained in the
Agreement the parties hereto do hereby continue the Agreement in effect until
August 1, 1995 and ratify and confirm the Agreement with the revised form of
Dealer Distribution Agreement as an Exhibit, in all respects.
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
By: /s/ Gifford R. Zimmerman
------------------------------------
Vice President
ATTEST:
/s/ Morrison C. Warren
- -----------------------------------
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By: /s/ James J. Wesolowski
------------------------------------
Vice President
ATTEST:
/s/ Larry Martin
- -----------------------------------
Assistant Secretary
<PAGE>
Exhibit 9(a)
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
TRANSFER AGENCY AGREEMENT
-------------------------
This Agreement is made as of the 19th day of December, 1994, between Nuveen
Tax-Free Money Market Fund, Inc., a corporation organized and existing under
the laws of the State of Minnesota having its principal office and place of
business at 333 West Wacker Drive, Chicago, Illinois 60606 (hereinafter referred
to as the "Fund"), and SHAREHOLDER SERVICES, INC., a Colorado corporation having
its place of business at 3410 South Galena Street, Denver, Colorado 80231
(hereinafter referred to as the "Transfer Agent").
In consideration of the mutual promises hereinafter set forth, the parties
hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the following meanings:
1.1 "Approved Institution" shall mean a broker-dealer, broker, bank or other
entity named in a Certificate, as hereinafter defined, and having account(s) in
the Fund, or the Distributor or an agent it appoints, in each case acting on
behalf of the Fund for the benefit of its clients. From time to time the Fund
may amend a previously delivered Certificate by delivering to the Transfer Agent
a Certificate naming an additional entity as an Approved Institution or deleting
any entity named as an Approved Institution in a previously delivered
Certificate.
1.2 "Business Day" shall mean each day on which the New York Exchange is
open for trading.
1.3 "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to the Transfer
Agent by the Fund and which is signed by any Officer, as hereinafter defined,
and actually received by the Transfer Agent. "Certificate" shall also include
any notice submitted to the Transfer Agent by electronic or telephone
transmission, reasonably believed by the Transfer Agent to be genuine and to
have been properly made, signed or authorized by an Officer.
1.4. "Computer Tape" shall mean any computer/electromagnetic tape or
transmission transmitted by an Approved Institution, via a remote terminal or
other similar link, into a data processing, storage, or collection system or
similar system (the "System"), located on the Transfer Agent's premises. For
purposes of Section 5.1, such Computer Tape shall be deemed to have been
furnished at such times as are agreed upon from time to time by the Transfer
Agent and Fund only if the information reflected thereon was input into the
system at such times as are agreed upon from time to time by the Transfer Agent
and the Fund.
1.5. "Custodian" shall mean, with respect to the Fund, U.S. Trust Company of
New York, as custodian under the terms and conditions of the Custody Agreement
between the Custodian and the Fund, or any successor(s) to such Custodian
performing similar functions for or on behalf of the Fund.
1.6. "Direct Accounts" means accounts registered in the name(s) of
shareholders other than Approved Institutions.
1.7. "Distributor" shall mean John Nuveen & Co. Incorporated (hereinafter
referred to as "Nuveen & Co."), as distributor under the terms and conditions of
the Distributor's Contract between the Fund and Nuveen & Co., wherein Nuveen &
Co. has the right to sell shares of the Fund to investors against orders
therefor at net asset value, or any successor(s) to Nuveen & Co. performing a
similar function for or on behalf of the Fund.
<PAGE>
1.8. "Effective Date" shall mean December 19, 1994.
1.9. "Series" shall mean each individual portfolio of the Fund, each being a
separate portfolio of securities and other assets, interests in which are
represented by a separate series of the Fund's shares, and such terms shall
include any other such portfolio that may be created for which the Transfer
Agent agrees to act as transfer agent pursuant to Article 10 of this Agreement.
1.10. "Officer" shall mean the Fund's Chairman of the Board, President,
Secretary, Treasurer, and any other person duly authorized by the Board of
Directors of the Fund to execute or give any Certificate on behalf of the Fund
and named in the Certificate annexed hereto as Appendix A, as such Certificate
may be amended from time to time.
1.11. "Prospectus" shall mean the most current Fund prospectus and
statement of additional information relating to the Shares, actually received
by the Transfer Agent from the Fund.
1.12. "Shares" shall mean full or fractional shares comprising all or any
part of each series representing the beneficial interest in the Fund and shall
include, to the extent applicable, shares designated as comprising any and all
classes of any series of the Fund.
ARTICLE 2
APPOINTMENT OF TRANSFER AGENT
2.1. The Fund hereby constitutes and appoints the Transfer Agent as transfer
agent of all the Shares of the Fund and as dividend disbursing agent for the
Fund during the term of this Agreement.
2.2. The Transfer Agent hereby accepts appointment as transfer agent and
dividend disbursing agent and agrees on and after the Effective Date to perform
the duties hereinafter set forth.
2.3. In connection with such appointment, upon or prior to executing this
Agreement the Fund shall deliver to the Transfer Agent such of the following as
have not already been furnished to the Transfer Agent:
(a) A copy of the Articles of Incorporation of the Fund and all Amendments
thereto certified by the Secretary of the Fund;
(b) A copy of the By-Laws of the Fund certified by the Secretary of the
Fund;
(c) A Certificate signed by the Secretary of the Fund specifying the names
and specimen signatures of the Officers of the Fund;
(d) Specimen Share certificate for Shares of each series of the Fund in the
forms approved by the Board of Directors of the Fund together with a certificate
signed by the Secretary of the Fund as to such approval;
(e) Copies of the most recently filed Post-Effective Amendment to the Fund's
Registration Statement, filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, together with any applications for exemptive relief from any
of the provisions of such laws filed by the Fund and the record of any formal
action of the Securities and Exchange Commission with respect to all such
applications; and
(f) Opinion of Counsel for the Fund to the effect that (1) the authorized
shares of the Fund consists of __________ shares of common stock of $0.01 par
value, divided into multiple classes, (2) the issue and sale of the Fund's
authorized but unissued Shares have been duly authorized under Minnesota law,
(3) the outstanding Shares are validly issued, fully paid and non-assessable
and (4) upon the issue and sale of any authorized and unissued shares and upon
receipt of the authorized consideration therefor in an amount not less than
either the Shares' net asset value or par
-2-
<PAGE>
value, if any, established and in force at the time of their sale, the Fund
Shares so issued will be validly issued, fully paid and non-assessable.
2.4. The Fund shall either (a) furnish the Transfer Agent with sufficient
supplies of blank Share certificates in the form approved from time to time by
Board of Directors of the Fund, and from time to time will renew such supplies
upon request of the Transfer Agent, or (b) authorize the Transfer Agent to
itself create laser-printed Share certificates in the form approved by the Board
of Directors of the Fund. Any such blank Share certificates shall be properly
signed, by facsimile or otherwise, by authorized Officers and, if required,
shall bear the seal of the Fund or a facsimile thereof. Notwithstanding the
death, resignation or removal of any Officer authorized to sign such Share
certificates, the Transfer Agent may continue to countersign and issue Share
certificates bearing such Officer's signature until otherwise directed by the
Fund. The Fund agrees to indemnify and exonerate, save and hold the Transfer
Agent harmless, from and against any and all claims or demands that may be
asserted against the Transfer Agent with respect to the genuineness of any Share
certificate supplied to the Transfer Agent by the Fund pursuant to this
Agreement.
ARTICLE 3
AUTHORIZATION AND ISSUANCE OF SHARES
3.1. The Transfer Agent shall maintain records of accounts evidencing
ownership of Shares as provided in this Agreement and in the Fund's Prospectus
and, subject to the terms and conditions of this Agreement, when requested shall
countersign, record, issue, and deliver certificates for Shares both upon
original issue and transfer. Evidence of the ownership of Shares shall be
maintained on the Transfer Agent's records in book (uncertificated) form, or, if
requested by an Approved Institution (or the Distributor or its agent acting on
behalf of such Approved Institution) or shareholder, Share certificates shall be
issued, subject to the provisions of Article 5 hereof, to evidence the ownership
of Shares.
3.2. Prior to the issuance of any Shares pursuant to Share splits and prior
to any reduction in the number of Shares outstanding, the Fund shall deliver the
following documents to the Transfer Agent:
(a) A copy of the resolution(s) adopted by the Board of Directors of the
Fund and/or the shareholders of the relevant Fund, certified by the Secretary of
the Fund, authorizing such issuance of additional Shares of such Fund or such
reduction, as the case may be;
(b) In the case of the issuance of Shares, an opinion of counsel for the
Fund with respect to matters set forth in Section 2.3(f) hereof as to such
shares; and
(c) Such additional documents as the Transfer Agent may reasonably request.
ARTICLE 4
RECAPITALIZATION OR CAPITAL ADJUSTMENT
4.1. In the case of any Share split, recapitalization or other capital
adjustment, the Transfer Agent will, in the case of accounts represented by
uncertificated Shares, cause the account records to be adjusted, as necessary,
to reflect the number of Shares held for the account of each such shareholder as
a result of such adjustment, or, in the case of Shares represented by
certificates, will, if so instructed by the Fund, issue revised Share
certificates in exchange for, or upon transfer of, outstanding share
certificates in the old form, in either case upon receiving:
(a) A Certificate authorizing the issuance of revised Share certificates
and any other action required to be taken by the Transfer Agent in connection
with any such split, recapitalization or other capital adjustment;
(b) A copy of any amendment to the Articles of Incorporation of the Fund,
certified by the Secretary of the Fund, with respect to the adjustment;
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(c) Specimen Share certificates in the revised form approved by the Board
of Directors of the Fund;
(d) An opinion of counsel for the Fund with respect to the matters set
forth in Article 2, Section 2.3(f) hereof as to such Shares; and
(e) Such additional documents as the Transfer Agent may reasonably request.
4.2. The Fund shall either (a) furnish the Transfer Agent with a sufficient
supply of blank Share certificates in any new form authorized in connection with
any such Share split, recapitalization or other capital adjustment, and from
time to time will replenish such supply upon the request of the Transfer Agent,
or (b) authorize the Transfer Agent to itself create laser-printed Share
certificates in the form approved by the Board of Directors of the Fund. Any
such blank Share certificates shall be properly signed by authorized Officers
and, if required, shall bear the Fund's seal or facsimile thereof.
ARTICLE 5
ISSUANCE, REDEMPTION, AND TRANSFER OF SHARES
5.1. (a) On each Business Day, the Transfer Agent shall accept, at such
times as are agreed upon from time to time by the Transfer Agent and the Fund,
(i) purchase orders received by the Transfer Agent directly from an Approved
Institution (or the Distributor or its agent acting on behalf of such Approved
Institution) or an individual investor, (ii) redemption requests either
received from a shareholder, whether or not an Approved Institution (or the
Distributor or its agent acting on behalf of such Approved Institution), or
contained in a Certificate, and (iii) requests for exchanges of Shares of the
Fund for Shares of another fund received from a shareholder, whether or not an
Approved Institution (or the Distributor or its agent acting on behalf of such
Approved Institution), or contained in a Certificate, provided that (1) such
purchase order, exchange request or redemption request, as the case may be, is
in conformity with the Fund's purchase, exchange, and redemption procedures, as
applicable, described in the Prospectus, and (2) if such type of purchase order,
exchange request, or redemption request is not described in the Prospectus in
effect upon the commencement date of the Agreement, the Transfer Agent has
agreed to accept and act as to such order or request. Upon receipt on any
Business Day of any check drawn or endorsed to the Transfer Agent, the Fund, or
the Distributor for the purchase of Shares, or any payment made by Automated
Clearing House or Federal Funds wire, the Transfer Agent shall deposit such
check or payment in the bank account established by the Fund or the Distributor
for the collection of such amounts and shall wire such amounts to the Fund's
Custodian on the next Business Day. The Transfer Agent shall have no
responsibility hereunder for the Fund's compliance with states securities
registration laws ("Blue Sky laws") relating to such purchase orders, except to
the extent that the Transfer Agent will maintain records in a manner that will
enable the Fund to monitor the total number of Shares of the Fund sold in each
state and shall provide the Fund reports as to such sales as specified in
Appendix B to this Agreement.
(b) On each Business Day, the Transfer Agent shall also accept, at such
times as are agreed upon from time to time by the Transfer Agent and the Fund, a
Computer Tape consistent in all respects with the Transfer Agent's tape layout
package, as amended from time to time, which is reasonably believed by the
Transfer Agent to be furnished by or on behalf of any Approved Institution,
setting forth data as to purchases, redemptions and exchanges of Shares
irrespective of whether payment of the purchase price accompanies such Computer
Tape. The Transfer Agent may rely on the data on such Computer Tapes as
accurate, and shall not be responsible hereunder for errors in such Computer
Tapes furnished to it hereunder, unless caused solely by the Transfer Agent's
own negligence, bad faith or willful misconduct.
(c) On each Business Day, the Fund shall provide or cause to be provided to
the Transfer Agent, at such time as the parties hereto shall agree, the net
asset value per share for the Fund and such other information as the Transfer
Agent may reasonably request.
5.2. On the Business Day following each Business Day, at such time as the
Transfer Agent and the Fund shall agree, an authorized employee of the Transfer
Agent shall confirm the following information by summary sheet
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transmitted by electronic or other electromagnetic means to an authorized
employee or agent of the Fund (or by such other form as shall be agreed upon
from time to time by the Fund and the Transfer Agent):
(a) The total dollar amount to be applied toward the purchase of Shares of
the Fund and the number of Shares of the Fund purchased on such prior Business
Day, computed by aggregating the amounts so specified in (i) the purchase orders
received by the Transfer Agent on such prior Business Day from individual
investors and (ii) all Computer Tapes described in Section 5.1(b) timely
received by the Transfer Agent with respect to such prior Business Day;
(b) The total dollar value and number of Shares of the Fund redeemed on such
prior Business Day, computed by aggregating the amounts so specified in (i) the
redemption requests received by the Transfer Agent directly on the preceding
Business Day from shareholders, and (ii) all Computer Tapes described in Section
5.1(b) relating to such prior Business Day; and
(c) The total dollar value and number of Shares of the Fund to be exchanged
for Shares of another fund and the number of shares of such other fund to be
issued in such exchanges on such prior Business Day, and the total dollar value
and number of shares of the Fund to be issued in exchange for shares of another
fund on such prior business day (if not included in 5.2(a) above), all computed
by aggregating the amounts represented by any exchange requests received
directly by the Transfer Agent from shareholders and the amounts specified in
all Computer Tapes described in Section 5.1(b) relating to such prior Business
Day.
5.3. As to each Business Day, the Transfer Agent will (on a day on which
banks in Chicago, Illinois, and New York, New York are open for business but in
any event on or prior to the fifth Business Day following such Business Day)
advise the Distributor of the amount of cash necessary to be wired to the
appropriate Custodian, representing purchase orders for the Fund's Shares
received by the Transfer Agent as to such Business Day, as set forth in Section
5.1 above. As to each Business Day, the Transfer Agent will advise the Fund of
the amount of cash representing exchange orders received by the Transfer Agent
as to such Business Day, such advice to be given on the next Business Day.
5.4. As to each Business Day, the Transfer Agent shall issue to, and redeem
from, the accounts specified in a purchase order, redemption request, or
exchange request received by the Transfer Agent in proper form in accordance
with the Prospectus and, when required by the Prospectus, properly endorsed by
the record owner thereof with the record owner's or owners' signatures(s)
guaranteed by a U.S. commercial bank or U.S. trust company, a member of a
national securities exchange, or shall issue to, and/or redeem from, the
accounts specified in a Computer Tape received by the Transfer Agent from an
Approved Institution, the appropriate number of full and fractional Shares based
on the net asset value per Share of the relevant series of the Fund specified in
an advice received as to such Business Day from the Fund. Notwithstanding the
foregoing, if a redemption specified in a redemption request received directly
by the Transfer Agent or in a Computer Tape is for a dollar value of Shares in
excess of the dollar value of uncertificated Shares in the specified account
plus the dollar value of certificated Shares in the specified account for which
the Transfer Agent has received the tender of a Share certificate or
certificates in proper form as described above, the Transfer Agent shall not
effect such redemption in whole or part. In such case involving a Computer Tape,
the Transfer Agent shall orally or by electronic or other electromagnetic means
advise both the Fund and the Approved Institution (or the Distributor or its
agent if acting on behalf of such Approved Institution) which supplied such
Computer Tape of such discrepancy. In such case involving a direct shareholder,
the Transfer Agent shall, within five (5) business days, notify such shareholder
directly, orally, or in writing.
5.5. The Transfer Agent shall, as of each Business Day specified in a
Certificate described in Section 6.1, issue Shares of the Fund, based on the net
asset value per Share of the Fund specified in an advice received from the Fund
as to such Business Day, in connection with a reinvestment of a dividend or
distribution on Shares of the Fund.
5.6. On each Business Day, the Transfer Agent shall advise the Fund by
computer/electromagnetic tape specifying, with respect to the immediately
preceding Business Day; the total number of Shares of the Fund (including
fractional Shares) issued and outstanding at the opening of business on such
day; the total number of Shares of the Fund
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sold on such day, pursuant to Section 5.2; the total number of Shares in the
Fund redeemed or exchanged on such day; the total number of Shares of the Fund,
if any, sold on such day pursuant to preceding Section 5.4, and the total number
of Shares of the Fund issued and outstanding at the close of business on such
day. Unless the Fund or its agent shall advise the Transfer Agent of any error
in the information contained in such computer/electromagnetic tape (the "Initial
Tape") prior to the transmission of the next computer/electromagnetic tape by
the Transfer Agent, the Transfer Agent shall be deemed to have fulfilled its
responsibilities hereunder with respect to the accuracy of the data on
subsequent computer/electromagnetic tapes submitted to the Fund that are based
in whole or in part upon any inaccurate data from the Initial Tape.
5.7. In connection with each purchase, exchange and redemption of Shares
other than pursuant to a Computer Tape submitted by an Approved Institution (or
by the Distributor or its agent acting on behalf of such Approved Institution),
the Transfer Agent shall send to the shareholder such statements as are
described in the Prospectus or as otherwise reasonably instructed in writing by
the Fund. If the Prospectus indicates that certificates for Shares are
available, and if specifically requested in writing by any shareholder, or if
otherwise required hereunder, the Transfer Agent will countersign, issue and
mail to such shareholder, at the address set forth in the records of the
Transfer Agent, a Share certificate for any full Shares requested.
5.8. In computing the redemption proceeds to be paid to any shareholder or
to an account for an Approved Institution, the Transfer Agent shall first
compute the amount of any withholding for federal income taxes for which the
Transfer Agent has the responsibility under this Agreement to calculate such
withholding, in such manner as the Fund and the Transfer Agent shall agree from
time to time in conformity with instructions provided by the Fund to the
Transfer Agent. The Transfer Agent shall also compute any withholding for
federal income taxes for which the Transfer Agent has such responsibility at the
time of any exchange of a Fund's shares for another fund's shares. In the case
of a redemption of Shares directly by a shareholder of record and not by means
of a Computer Tape submitted by an Approved Institution (or by the Distributor
or its agent acting on behalf of such Approved Institution), upon deposit of
moneys in a redemption account by the relevant Custodian against which the
Transfer Agent is authorized by the Fund to draw checks in connection with a
redemption of Shares of the Fund, the Transfer Agent shall cancel the redeemed
Shares and after making appropriate deduction for any withholding of taxes
required of it by this Agreement or applicable law, make payment of (i) the
redemption proceeds to the order of the shareholder, and (ii) any tax withheld
to the Internal Revenue Service, in accordance with the Fund's redemption and
payment procedures described in the Prospectus or as otherwise reasonably
described in a written instruction from the Fund. In the case of an exchange of
Shares directly by a shareholder of record and not by means of a Computer Tape
submitted by an Approved Institution (or by the Distributor or its agent acting
on behalf of such Approved Institution), upon deposit of moneys in an account by
the relevant Custodian against which the Transfer Agent is authorized by the
Fund to draw checks in connection with an exchange of Shares of the Fund, the
Transfer Agent shall cancel the exchanged Shares, and withhold and pay taxes
required under this Agreement and applicable law. In the case of a redemption of
Shares pursuant to a Computer Tape, the Transfer Agent shall, on the next
Business Day, send the Fund a Computer Tape setting forth the amount of
redemption proceeds due each Approved Institution. If such Approved Institution
(or the Distributor or its agent acting on behalf of such Approved Institution)
has previously furnished the Transfer Agent withholding instructions with
respect to such redemption or any exchange of Shares pursuant to a Computer
Tape, the Transfer Agent shall include in the Computer Tape furnished to the
Fund information as to the amount of such withholding.
5.9. The Transfer Agent shall not be required to issue Shares of any
Portfolio of the Fund (other than with respect to the reinvestment of dividends
or distributions on shares owned by an existing shareholder if so stated in the
certificate) after it has received a Certificate stating that the sale of Shares
of that Portfolio of the Fund has been suspended or discontinued.
5.10. The Transfer Agent shall not be responsible for the payment of the
original issue or other taxes required to be paid by the Fund in connection with
the issuance of any Shares.
5.11. The Transfer Agent shall not be responsible for issuing or effecting
any "stop transfer" or other similar order or restriction on any Shares held in
the name of an Approved Institution. In the case of Shares registered in the
name of a shareholder other than an Approved Institution as to which a "stop
transfer" or other similar order of
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restriction applies, the Transfer Agent will adhere to the terms of such stop
transfer or similar order, except that it may rely on a Certificate to effect a
redemption, exchange or transfer of such Shares, notwithstanding such stop order
or restriction.
5.12. The Transfer Agent shall accept (a) a Computer Tape which is furnished
by or on behalf of any Approved Institution (or the Distributor or its agent
acting on behalf of such Approved Institution) and represented to be
instructions with respect to the transfer of Shares from one account of such
Approved Institution to another such account, and (b) as to Shares standing
directly in the name of a shareholder other than an Approved Institution,
transfer instructions in proper form in accordance with the Fund's Prospectus
and the Transfer Agent's rules described herein, and shall effect the transfer
specified in said Computer Tape or transfer instructions, provided that any
necessary documents or Share certificates have been tendered to the Transfer
Agent.
5.13. (a) Except as otherwise provided in sub-paragraph (b) of this Section
5.13 and in Section 5.14, Shares will be transferred, exchanged or redeemed
other than pursuant to Computer Tapes from an Approved Institution (or the
Distributor or its agent acting on behalf of such Approved Institution) upon
presentation to the Transfer Agent of endorsed Share certificates or, in the
case of uncertificated Shares, instructions endorsed in proper form in
accordance with the Prospectus as stated in Section 5.4, accompanied by such
documents as the Transfer Agent reasonably deems necessary to evidence the
authority of the person making such transfer, exchange or redemption, and
bearing satisfactory evidence of the payment of transfer taxes. In the case of
small estates, where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate small estates affidavit under applicable law
or with a surety bond, and without further approval of the Fund, transfer or
redeem Shares registered in the name of a decedent if the current market value
of the Shares being redeemed or transferred does not exceed such amount as may
from time to time be prescribed by the applicable state statutes and
regulations. The Transfer Agent reserves the right to refuse to transfer,
exchange or redeem Shares until it is reasonably satisfied that the
endorsement on the Share certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an Officer, a
signature guarantee as stated in Section 5.4 of this Agreement. The Transfer
Agent also reserves the right to refuse to transfer, exchange or redeem Shares
until it is reasonably satisfied that the requested transfer, exchange, or
redemption is legally authorized, or until it is reasonably satisfied that
there is no basis to any claims adverse to such transfer, exchange or
redemption. The Transfer Agent may, in effecting transfers, exchanges and
redemptions of Shares, rely upon those provisions of the Uniform Act for the
Simplification of Fiduciary Security Transfers or the Uniform Commercial Code,
as the same may be amended from time to time, applicable to the transfer of
securities.
(b) Notwithstanding the foregoing or any other provision contained in this
Agreement to the contrary, the Transfer Agent shall be fully protected by the
Fund in requiring any instructions, documents, assurances, endorsements or
guarantees, including, without limitation, any signature guarantees, in
connection with a redemption, exchange or transfer of Shares whenever the
Transfer Agent reasonably believes that requiring the same would be consistent
with the transfer, exchange and redemption procedures described in the
Prospectus, or in any instructions or certificates provided to the Transfer
Agent by the Fund.
5.14. Notwithstanding any provision contained in this Agreement to the
contrary, the Transfer Agent shall not be expected to require, as a condition to
any transfer, redemption or exchange of any Shares pursuant to a Computer Tape,
any documents, including, without limitation, any documents of the kind
described in Section 5.13(a) to evidence the authority of the person requesting
the transfer, exchange or redemption and/or the payment of any transfer taxes,
and shall be fully protected in accordance with the applicable provisions of
this Agreement.
5.15. Nothing contained in this Agreement shall constitute any agreement or
representation by the Transfer Agent to permit, or to agree to permit, any
Approved Institution to input information into the System, although the Transfer
Agent may, with the Fund's written permission, permit access to the System by an
Approved Institution to retrieve data or information as to such Approved
Institution's accounts.
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ARTICLE 6
DIVIDENDS AND DISTRIBUTIONS
6.1. The Fund shall furnish to the Transfer Agent a Certificate either
(i) setting forth with respect to the Fund the date of the declaration of a
dividend or distribution, the date of accrual or payment thereof, as the case
may be, the record date as of which shareholders entitled to payment or accrual,
as the case may be, shall be determined, the amount per Share of such dividend
or distribution for the Fund, the payment date on which all previously accrued
and unpaid dividends are to be paid, and the total amount, if any, payable by
the Transfer Agent with respect to such dividend or distribution on such payment
date, or (ii) stating that the declaration of dividends and distributions shall
be on a daily or other periodic basis and containing information of the type set
forth in subsection (i) hereof.
6.2. Upon the payment date specified in the relevant Certificate, the
Transfer Agent shall, in the case of a cash dividend or distribution, advise the
Fund (by telephone or other electronic transmission) of the amount of cash
necessary to make the payment of the dividend or distribution to the
shareholders of record as of such payment date, including the amounts to be paid
to Approved Institutions. The Fund shall be responsible for having the
appropriate Custodian transfer a sufficient amount of cash to a dividend
disbursement account maintained by the Fund against which the Transfer Agent
shall cause checks to be drawn to the order of such shareholders or Approved
Institutions in payment of the dividend. The Transfer Agent shall not be liable
for any improper payments made in accordance with a Certificate described in
Section 6.1. If the Transfer Agent shall not receive from the appropriate
Custodian sufficient cash to make payments of any cash dividend or distribution
to shareholders of the Fund as of the record date, the Transfer Agent may, upon
notifying the Fund, withhold payment to all shareholders of record as of the
record date until sufficient cash is provided to the Transfer Agent unless
otherwise instructed by the Fund by a Certificate and acceptable to the Transfer
Agent. In the case of dividends or distributions reinvested in additional Shares
of a series of the Fund, the Transfer Agent shall follow the procedures set
forth in Section 5.5.
6.3. The Transfer Agent shall in no way be responsible for the determination
of the rate or form of dividends or capital gain distributions due shareholders.
6.4. The Transfer Agent shall upon request of the Fund file such appropriate
information returns concerning the payment of dividends and capital gain
distributions and redemptions with the proper Federal, state and local
authorities as are required by law to be filed by the Fund but shall in no way
be responsible for the collection or withholding of taxes due on such dividends
or distributions or on redemption proceeds due shareholders, except and only to
the extent required of it by applicable law for accounts of shareholders other
than Approved Institutions. If any amount is to be withheld from any dividend
or distribution paid to, or exchange or redemption proceeds or other cash
distribution from, the account of an Approved Institution, such Approved
Institution (or the Distributor or its agent acting on behalf of such Approved
Institution) may advise the Transfer Agent of the amount to be withheld
therefrom, and if such advice is provided in a timely manner to the Transfer
Agent, the Transfer Agent will provide a separate check for such amount to the
Approved Institution, which shall be responsible for the proper application of
such withheld amounts.
ARTICLE 7
CONCERNING THE FUND
7.1. The Fund shall promptly deliver to the Transfer Agent written notice of
any change in the Officers authorized to sign or give Share certificates or
Certificates, together with a specimen signature of each new Officer.
7.2. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent in a timely manner the Fund's currently effective Prospectus,
copies of any exemptive relief obtained by the Fund under applicable securities
laws and copies of any amendments to the Fund's Articles of Incorporation,
By-Laws and any other documents to be furnished by the Fund under this Agreement
to enable the Transfer Agent to carry out its duties hereunder, and, for
purposes of this Agreement, the Transfer Agent shall not be deemed to have
notice of any information contained in such
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Prospectus, exemptive relief or other document until it is actually received by
the Transfer Agent.
ARTICLE 8
CONCERNING THE TRANSFER AGENT
8.1. Subject to the standard of care set forth in Section 8.4, the Transfer
Agent shall not be liable and shall be fully protected in acting upon and in
compliance with any Computer Tape, Certificate, oral instructions, writing or
document reasonably believed by it to be genuine and to have been signed (in the
case of written instructions or documents) or made by the proper person or
persons and shall not be held to have any notice of any change of authority of
any person until receipt of written notice thereof from the Fund or such person.
Subject to the standard of care set forth in Section 8.4, the Transfer Agent
shall be similarly protected in processing Share certificates which it
reasonably believes to bear the proper manual or facsimile signatures of the
Officers of the Fund and the proper countersignature of the Transfer Agent or
any prior transfer agent.
8.2. The Transfer Agent covenants that it shall carry out its
responsibilities under this Agreement in accordance and compliance with the
provisions of applicable laws and regulations governing its operation as a
transfer agent.
8.3. The Transfer Agent shall keep and maintain on behalf of the Fund such
records which the Fund or the Transfer Agent is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rule 31a-1 under the Investment Company Act of 1940, relating
to the maintenance of records in connection with the services to be provided
hereunder. The Transfer Agent agrees to make such records available for
inspection by the Fund at reasonable times and otherwise to keep confidential
all records and other information relative to the Fund and its shareholders,
except when the Transfer Agent reasonably believes it has been (i) requested to
divulge such information by duly-constituted authorities or court process; (ii)
or requested by a shareholder with respect to information concerning an account
as to which such shareholder has either a legal or beneficial interest; or (iii)
when requested by the Fund, the shareholder, or the dealer of record as to such
account.
8.4. (a) The Transfer Agent shall not be liable for any loss or damage,
including, without limitation, attorneys' fees, expenses and court costs,
resulting from the Transfer Agent's actions or omissions to act under or in
connection with this Agreement and its duties and responsibilities hereunder,
except for any loss or damage arising out of its own failure to act in good
faith, or its negligence or willful misfeasance.
(b) The Transfer Agent shall, provided such coverage is readily
available to the Transfer Agent at reasonable rates and upon reasonable terms
and conditions, maintain an insurance policy or surety bond, in the face amount
of $10 million per covered transaction against losses suffered by the Transfer
Agent in excess of the policy deductibles arising from errors or omissions on
the part of the Transfer Agent in carrying out its responsibilities under this
Agreement and other agreements. The Transfer Agent shall upon request, furnish
promptly to the Fund copies of all insurance policies maintained pursuant to
this Section 8.4(b) that have not previously been furnished to the Fund.
(c) Any costs or losses incurred by the Fund for the processing of any
purchase, redemption, exchange or other share transactions at a price per share
other than the price per share applicable to the effective date of the
transaction (the foregoing being generally referred to herein as "as of"
transactions) will be handled in the following manner:
1. For each calendar year, if all "as of" transactions for the
year, taken in the aggregate, result in a net loss to the Fund
("net loss"), Transfer Agent will reimburse the Fund for such
net loss, except to the extent that such net loss may be offset
by application of a "net benefit" to the Fund carried over from
prior calendar years pursuant to sub-paragraph 2 immediately
below.
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<PAGE>
2. For each calendar year, if all "as of" transactions for the year,
taken in the aggregate, result in a net benefit to the Fund ("net
benefit"), the Fund shall not reimburse the Transfer Agent for the
amount of such net benefit; however, any "net benefit" for any
calendar year may be used to offset, in whole or in part, any "net
loss" suffered by the Fund in any future calendar year so as to
reduce the amount by which the Transfer Agent shall be required to
reimburse the Fund for such "net loss" in such year pursuant to sub-
paragraph 1 immediately above.
3. Any "net loss" for which the Transfer Agent reimburses the Fund in
any calendar year shall not be carried over into future years so as
to offset any "net benefit" in such future years.
8.5. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent and its officers, directors, employees and agents (hereinafter
the Transfer Agent and such persons are referred to as "Indemnitees") from and
against any and all liabilities or losses arising from claims or demands
(whether with or without basis in fact or law), and from any and all expenses
(including, without limitation, reasonable attorney's fees, expenses and court
costs associated with defending against such claims and demands,) of any nature
which any Indemnitee may sustain or incur or which may be asserted against any
Indemnitee by any person arising out of or in any manner related to any action
taken or omitted to be taken by the Transfer Agent in good faith and without
negligence or willful misconduct in reasonable reliance upon (i) any provision
of this Agreement; (ii) the Prospectus; (iii) any instruction or order
including, without limitation, any Computer Tape reasonably believed by the
Transfer Agent to have been received from an Approved Institution (or the
Distributor or its agent acting on behalf of such Approved Institution);
(iv) any instrument or order reasonably believed by the Transfer Agent to be
genuine and to be signed, countersigned or executed by any duly authorized
Officer; (v) any Certificate or other instructions of an Officer; (vi) any
opinion of legal counsel for the Fund; (vii) any records or data supplied by the
Fund's prior transfer agent; or (viii) any order of any court, arbitration panel
or other judicial entity.
8.6. At any time the Transfer Agent may apply to an Officer of the Fund for
written instructions with respect to any matters arising in connection with the
Transfer Agent's duties and obligations under this Agreement, and the Transfer
Agent shall not be liable for any action taken or omitted by it in good faith
and without negligence or willful misconduct in accordance with such written
instructions. The Transfer Agent may consult with counsel to the Fund, at the
expense of the Fund and shall be fully protected with respect to anything done
or omitted by it in good faith and without negligence or willful misfeasance in
accordance with the advice or opinion of counsel of the Fund. Such application
by the Transfer Agent for written instructions from an Officer of the Fund may,
at the option of the Transfer Agent, set forth in writing any action proposed
to be taken or omitted by the Transfer Agent with respect to its duties or
obligations under this Agreement and the date on and/or after which such action
shall be taken, and the Transfer Agent shall not be liable (other than for its
bad faith, negligence or willful misfeasance) for any action taken or omitted
in accordance with a proposal included in any such application on or after the
date specified therein unless, prior to taking or omitting any such action, the
Transfer Agent has received written instructions in response to such application
specifying the action to be taken or omitted.
8.7. Any report, confirmation or other document furnished to the Fund or to
an Approved Institution as part of the Transfer Agent's responsibilities under
this Agreement shall be deemed final and conclusive on the 8th Business Day
after such report, confirmation or document has been furnished to the Fund or
Approved Institution, as the case may be, and the Transfer Agent shall not be
liable to the Fund or such Approved Institution under this Agreement as to any
error or omission in such report, confirmation or document that is not reported
to the Transfer Agent within such 7-day period.
8.8. The Transfer Agent shall deliver Share certificates by courier or by
certified or registered mail to the shareholder's address in the records of the
Transfer Agent. The Transfer Agent shall advise the Fund of any Share
certificates returned as undeliverable after being transmitted by courier or
mailed as herein provided for.
8.9 The Transfer Agent may issue new Share certificates in place of Share
certificates represented to have been lost, stolen, or destroyed upon receiving
instructions satisfactory to the Transfer Agent. If the Transfer Agent
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receives written notification from the owner of the lost, destroyed, or stolen
Share certificate within a reasonable time after the owner has notice of such
loss, destruction or theft, the Transfer Agent shall issue a replacement Share
certificate upon receipt of an affidavit or affidavits of loss or nonreceipt and
an indemnity agreement executed by the registered owner or his legal
representative, and supported (a) in the case of a certificate having a value at
the time of replacement of less than $100, by a fixed penalty surety bond for
twice the then-current market value of Shares represented by said certificate,
(b) in the case of a certificate having a value at time of replacement of $100
or more, by an open penalty bond, in form satisfactory to the Transfer Agent, or
(c) by such other documentation or reasonable assurances in a particular case as
may be set forth in a Certificate. If the Fund receives such written
notification from the owner of the lost, destroyed or stolen Share certificate
within a reasonable time after the owner has notice of it, the Fund shall
promptly notify the Transfer Agent. The Transfer Agent may issue new Share
certificates in exchange for, and upon surrender of, mutilated Share
certificates.
8.10. The Transfer Agent will supply shareholder lists to the Fund from time
to time upon receiving a request therefor from an Officer of the Fund.
8.11. At the request of an Officer, the Transfer Agent will address and mail
such appropriate notices to shareholders as the Fund may direct, at the Fund's
expense.
8.12. Notwithstanding any of the foregoing provisions of this Agreement, the
Transfer Agent shall be under no duty or obligation to inquire into, and shall
not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency of the
amount to be received therefor, or the authority of an Approved Institution or
of the Fund, as the case may be, to request such sale or issuance;
(b) The legality of a transfer, exchange or redemption of any Shares by an
Approved Institution, the propriety of the amount to be paid therefor, or the
authority of an Approved Institution to request such transfer, exchange or
redemption;
(c) The legality of the declaration of any dividend or capital gains
distribution by the Fund, or the legality of the issue of any Shares in payment
of any Share dividend or distribution; or
(d) The legality of any recapitalization or readjustment of the Shares.
8.13. The Transfer Agent shall be entitled to receive, and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, including its
performance of the duties and functions set forth in Appendix B hereto, (i) its
reasonable out-of-pocket expenses (including without limitation legal expenses,
court costs, and attorney's fees, associated with litigation or arbitration),
incurred in connection with this Agreement and its performance hereunder and
(ii) such compensation as is specified in Appendix C hereto as such fees may be
amended from time to time by agreement in writing by the Transfer Agent and the
Fund.
8.14. The Transfer Agent shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Transfer Agent.
8.15. The Transfer Agent shall indemnify and exonerate, save and hold
harmless the Fund, and its officers, directors, employees and agents, from and
against any and all liabilities or losses arising from claims and demands
(whether with or without basis in fact or law), and from any and all expenses
(including, without limitation, reasonable attorney's fees, expenses and court
costs), of any nature which the Fund or any officer, director, employee or agent
may sustain or incur or which may be asserted against them by any person arising
out of or in any manner related to the Transfer Agent's failure to comply with
the terms of this Agreement or which arise out of the Transfer Agent's
negligence or willful misconduct provided, however, that the Transfer Agent
shall not indemnify and exonerate, save and hold harmless, the Fund, its
officers, directors, employees, and agents for anything arising out of or in any
manner related to the Fund's failure to comply with the terms of this Agreement
or which arises out of the Fund's, or any officer's,
-11-
<PAGE>
director's, employee's or agent's (other than the Transfer Agent) negligence or
willful misconduct.
ARTICLE 9
TERMINATION
9.1. The initial term of this Agreement shall commence on the Effective Date
and shall continue through June 30, 1996 (which period shall be referred to
herein as the "Initial Term"), unless earlier terminated pursuant to Section
9.2. Thereafter, unless terminated by either party at the end of the Initial
Term upon at least 90 days' prior written notice, this Agreement shall continue
from day to day thereafter (such period shall be referred to as the "Renewal
Term"), until either of the parties hereto terminates this Agreement by giving
at least 6 months' prior written notice to the other party, whereupon this
Agreement shall terminate automatically upon the expiration of the 6-month
period specified in the written notice. In the event such notice of termination
is given by the Fund, it shall be accompanied by a copy of a resolution of the
Board of Directors of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement. The Fund shall, on or before
the termination date, deliver to the Transfer Agent a copy of a resolution of
the Board of Directors of the Fund certified by the Secretary or any Assistant
Secretary designating a successor transfer agent or transfer agents. In the
absence of such designation by the Fund, the Transfer Agent may designate a
successor transfer agent. If the Fund fails to designate a successor transfer
agent and if the Transfer Agent is unable to find a successor transfer agent,
the Fund shall, upon the date specified for termination of this Agreement and
delivery of the records maintained hereunder, be deemed to be its own transfer
agent and the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
9.2. Notwithstanding Section 9.1 hereof, this Agreement may be terminated at
any time by the Fund upon not less than 60 days' written notice from the Fund to
the Transfer Agent notifying the Transfer Agent: (i) if the Fund's Board of
Directors, including a majority of the Directors who are not "interested
persons" (as that term is defined in the Investment Company Act of 1940), upon
completion of the procedures set forth below have reasonably made a specific
finding that the Transfer Agent has failed on a continuing basis to perform its
duties pursuant to this Agreement in a satisfactory manner consistent with then
current industry standards and practices or (ii) if there is instituted or
pending any action or proceeding by or before any court or governmental,
administrative or regulatory agency against or involving the parties hereto,
their affiliates, the Directors of the Fund or any of them and challenging the
making of this Agreement or alleging that any material term of the Agreement is
contrary to law or any governmental agency has threatened in writing to commence
such an action or proceeding. Prior to any termination pursuant to clause (i),
the Board of Directors of the Fund shall provide the Transfer Agent with a
written statement of the specific aspects of the Transfer Agent's performance of
its duties that are unsatisfactory, the specific incident or incidents giving
rise to the Board of Directors' conclusion and any written material that the
Board of Directors relied upon in making such a determination. The Transfer
Agent shall have 30 days to respond to such written statement. If no response is
made, or if, after reasonable consideration of the response of the Transfer
Agent, such response is unsatisfactory to the Board of Directors of the Fund,
then the Board of Directors of the Fund may terminate the Agreement pursuant to
clause (i) hereof. For purposes of making a finding as contemplated by clause
(i) above, and without limiting the generality of such clause (i), the Transfer
Agent shall, absent unusual circumstances, be presumed to have failed on a
continuing basis to perform its duties pursuant to this Agreement in a
satisfactory manner consistent with the industry standards and practices
prevailing on the date of this Agreement if any of the following should occur:
(1) The Transfer Agent, through its fault, is unable (more than once in a
twelve-month period) to process daily activity for any two successive Business
Days and to confirm information generated by such activity by the fourth
Business Day following the later of such two Business Days. (For example,
assuming no holidays, daily activity on a Monday and Tuesday is not confirmed by
the following Monday.)
(2) The Transfer Agent, through its fault, is unable (more than two times in
any twelve-month period) to provide system access to personnel of an Approved
Institution for six hours between 9:00 a.m. and 5:00 p.m. Chicago time on three
successive Business Days.
(3) The Transfer Agent, through its fault, is unable (more than twice in
any one year) to create
-12-
<PAGE>
and mail dividend checks within four Business Days after the Fund's payable date
(assuming that the required information has been furnished to the Transfer Agent
on the record date).
(4) The Transfer Agent, through its fault, is unable to instruct various
financial institutions on daily money movements from and to the Fund's Custodian
for two successive Business Days by the fourth Business Day following the later
of such two Business Days. (For this purpose, instructions based on reasonable
estimates are treated as fulfilling the Transfer Agent's obligations hereunder.)
(5) The Transfer Agent, through its fault, is unable (more than twice in any
twelve-month period) to transmit dividend activity to an Approved Institution
within five Business Days from the Fund's payable date.
For purposes of the foregoing, an event described in any of the foregoing
clauses 1 through 5 shall be deemed not to have occurred if the Transfer Agent's
inability to perform is a result directly or indirectly of faulty or inadequate
performance by service providers including but not limited to telephone
companies, pricing services, John Nuveen & Co. Incorporated, Approved
Institutions, and banks other than the Transfer Agent and its agents and
employees or a result directly or indirectly of other events out of the Transfer
Agent's reasonable control. Also for the purpose of the foregoing, if the
Transfer Agent processes transactions or instructions (as the case may be) as
required hereunder within the time periods indicated but more than 10% of the
transactions, checks or instructions, as the case may be, are inaccurate in any
material respect and are not corrected within the requisite time, then the
Transfer Agent shall be deemed to have been unable to perform the relevant
service within the requisite time.
9.3. In the event of termination of this Agreement, the Transfer Agent will
facilitate transfer of the records maintained by it hereunder and cooperate with
such successor transfer agent as may be designated pursuant to the provisions of
Section 9.1 hereof with respect to delivery of such records and assumption by
such successor transfer agent of its duties. In the event the Fund or the
Transfer Agent terminates the Transfer Agency Agreement at any time, the Fund
shall be responsible for the payment of fees and expenses of the Transfer Agent
relating to the conversion to the new Transfer Agent.
ARTICLE 10
ADDITIONAL SERIES
10.1. In the event that the Fund establishes one or more series in addition
to any series named herein with respect to which it desires to have the Transfer
Agent render services as Transfer Agent under the terms hereof, it shall so
notify the Transfer Agent in writing at least 60 days in advance of the sale of
Shares of such series and shall deliver to the Transfer Agent the documents
listed in Section 2.3 with respect to such series. Unless the Transfer Agent
declines in writing within a reasonable time to provide such services, the
Shares of such series shall be subject to this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1. The Fund agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties or obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, and shall have received and agreed to the schedule of charges, if any,
specified by the Transfer Agent as necessary to effect such change.
11.2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at 333 West Wacker
Drive, Chicago, Illinois 60606, Attention: Mr. Stuart W. Rogers, with copy
delivered to Andrew J. Donohue, or at such other place as the Fund may from time
to time designate in writing.
-13-
<PAGE>
11.3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent, Attention: President, and mailed or delivered
to it at its office at 3410 South Galena Street, Denver, Colorado 80231, with a
copy to be sent to Andrew J. Donohue at Oppenheimer Management Corporation, Two
World Trade Center, New York, New York 10048, or at such other place as the
Transfer Agent may from time to time designate in writing.
11.4. This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties.
11.5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund or the Transfer Agent without
the written consent of the other party. A change in ownership of the Transfer
Agent as a result of an internal reorganization of the Transfer Agent, its
parent corporation or affiliates shall not be deemed to be an "assignment"
hereunder. A change in "control" (as defined under the Investment Company Act of
1940) of the Transfer Agent's parent corporation shall not be deemed an
"assignment" hereunder. A sale of a controlling interest in the capital stock or
of all or substantially all of the assets of the Transfer Agent to a third party
unaffiliated with the Transfer Agent or its parent corporation shall be deemed
an "assignment" hereunder.
11.6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado as applicable to agreements to be wholly
performed in that state.
11.7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
11.8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
11.9. Neither the Fund nor the Transfer Agent will be liable or responsible
hereunder for delays or errors by reason of circumstances reasonably beyond its
control, including, without limitation, acts of civil or military authority,
national emergencies, labor difficulties, fire, mechanical breakdown, flood,
catastrophe, acts of God, insurrection, war, riots, or failure of
transportation, communication or power supply.
11.10. The Fund shall establish and maintain such bank accounts, with such
bank or banks as are selected by the Fund, as are necessary so that the Transfer
Agent may perform the services to be provided hereunder. To the extent that
performance of such services shall require the Transfer Agent directly to
disburse amounts for payments of dividends, redemption proceeds or other
purposes, the Fund shall provide such bank or banks with all instructions and
authorizations necessary to evidence the Transfer Agent's authority to effect
such transactions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the
day and year first above written.
Attest: NUVEEN TAX-FREE MONEY MARKET FUND, INC.
/s/ Gifford R. Zimmerman VP By: /s/ Anna Kucinskis V.P.
- ---------------------------------- ---------------------------------
Name Title Name Title
Attest: SHAREHOLDER SERVICES, INC.
/s/ Rhonda Dixon-Gunner VP By: /s/ Barbara Hennigar
- ---------------------------------- ---------------------------------
Name Title Barbara Hennigar
President
-14-
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
TRANSFER AGENCY AGREEMENT
APPENDIX A
OFFICER'S CERTIFICATE
I, , the Secretary of Nuveen Tax-Free Money
Market Fund, Inc., a Minnesota corporation (the "Fund"), do hereby certify
that:
The following individuals have been duly authorized by the Directors of the
Fund in conformity with the Fund's Articles of Incorporation and By-Laws to
execute any Certificate, instruction, notice or other instrument, including an
amendment to Appendix B to this Agreement, or to give oral instructions on
behalf of the Fund, and the signatures set forth opposite their respective names
are their true and correct signatures.
Name Title Signature
- ---- ----- ---------
Chairman
- ----------------------------- ------------------------------
President
- ----------------------------- ------------------------------
Secretary
- ----------------------------- ------------------------------
Trustee
- ----------------------------- ------------------------------
Vice President
- ----------------------------- ------------------------------
- ----------------------------- --------------- ------------------------------
- ----------------------------- --------------- ------------------------------
- ----------------------------- --------------- ------------------------------
- ----------------------------- --------------- ------------------------------
- ----------------------------- --------------- ------------------------------
- ----------------------------- --------------- ------------------------------
, Secretary
------------------
Name
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
TRANSFER AGENCY AGREEMENT
APPENDIX B
TRANSFER AGENT SERVICES
<TABLE>
<CAPTION>
Service: SSI will:
- -------- ---------
<C> <S>
New Account Set-Ups Process new sales applications. Place telephone calls to account
representatives as needed to clarify instructions for new account
set-ups.
Purchasers - New and Subsequent Process mailed-in, lockbox, bank wire, list billing, ACH, and
telephone payments as received. Coordinate and balance UIT
reinvestment payments.
Transfers Negotiate and process all transfer requests.
Exchanges - Mail and Telephone Negotiate and process exchange requests. Record telephone
exchange requests.
Redemptions - Mail and Telephone Negotiate and process redemption requests. Record telephone
redemption requests.
Wire Order Purchases and Redemptions Process wire order purchases and redemptions for 5-day
delayed settlement accepted on recorded telephone lines and via
NSCC FUND/SERV. Process purchases and redemptions for
same-day wire settlement.
Account Maintenance Process all written and telephone maintenance.
(Address Changes, Dividend For address changes, prepare and mail a notice
Option Changes, Name Changes, of the address change to the former address.
Broker or Dealer Changes, etc.)
Certificate Issuances Issue certificates as requested by shareholders.
Telephone Services Provide efficient handling of all incoming shareholder and
broker/dealer telephone calls. Provide timely problem
resolution for all servicing calls.
Corresponding with Shareholders Respond to all shareholder and broker/dealer written
and Broker/Dealers inquiries. Document all correspondence affecting
shareholder accounts on the Shareholder Accounting
System.
Shareholder Confirms Prepare and mail confirmations of daily account
(Daily/Monthly/Quarterly activity. Prepare and mail monthly, quarterly, and
Annual) annual confirmations as directed by the fund.
Dealer Confirms Prepare and mail weekly dealer confirmations listing activity on
client accounts.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Service: SSI will:
- -------- ---------
<C> <S>
Distribution Disbursements Prepare and mail cash distribution checks. Process reinvested
distributions.
Commission Statements Provide bimonthly commission statements listing each purchase
and the portion of the sales charge paid to the broker/dealer.
Commission Checks Provide bimonthly commission checks to broker/dealers.
Daily Transmission of Reports Transmit daily transaction activity reports, balancing reports,
and sales information via telephone lines to a printer at Nuveen.
Fund Summary Sheets Prepare daily reports that summarize by type of transaction all
capital stock activity for each fund.
Sales Reporting Provide daily, weekly, monthly, quarterly, and annual reports of
sales information.
12b-1 Reporting Complete 12b-1 processing including calculating the 12b-1
payment amounts and sending checks to the broker-dealer home
offices. Provide a listing broken down by sales representative
within each branch.
Invalid Taxpayer Identification Mail Forms W-9 as required to validate taxpayer
Number Solicitation and identification numbers; institute backup withholding
Backup Withholding as required by IRS regulations, and timely send all notices.
Regulatory Reporting Compute, prepare, and mail all necessary reports to
shareholders, federal, and/or state authorities (Forms 1099-DIV,
1099-B, and 1042S).
Front-End Microfilming of Documents Front-end film all incoming documents.
Cost Basis Reporting Provide cost basis information to shareholders annually for use
in determining capital gains and losses.
Blue Sky Reporting Provide monthly report of purchases and redemptions by state.
Financial Report Mailings Provide mail handling for 2 financial reports per fund per year to
Nuveen shareholders.
Prospectus Mailings Provide mail handling for 1 prospectus per fund per year to
Nuveen shareholders.
Proxy Solicitation and Tabulation Perform 1 proxy solicitation and tabulation per fund per
year.
</TABLE>
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
TRANSFER AGENCY AGREEMENT
APPENDIX C
FEE SCHEDULE
The Transfer Agent will provide the transfer agent services listed on Appendix B
for the Fund at the rates set forth below:
Annual Transfer Agent Fees:
- ---------------------------
Annual-Per-Account Fees*
First 20,000 Accounts** $22.00 per account
Next 30,000 Accounts** $20.00 per account
Over 50,000 Accounts** $19.00 per account
Out-of-Pocket Expenses:
- -----------------------
Out-of-pocket expenses may be incurred by either the Fund or the Transfer Agent
and are not included in the annual Transfer Agent Fees. Those out-of-pocket
expenses directly incurred by the Transfer Agent will be billed to the Fund on a
monthly basis. These out-of-pocket expenses include, but are not limited to,
the printing of forms, envelopes, postage for the shareholder mailings,
equipment and system access costs, microfilm, telephone line and usage charges,
overnight express mail charges, check signature plates and stamps, and
programmer/analyst and testing technician time beyond that agreed to in writing.
Bank charges and earnings credit will be billed directly to the Fund by
United Missouri Bank (or other banks). The Transfer Agent may require the prior
payment of anticipated out-of-pocket expenses, from time to time.
*Payable on a monthly basis for each account in existence at the end of the
month.
**The determination of the number of accounts for purposes of determining the
per account fee shall be based on all Nuveen Funds using the same fee schedule
and shall be allocated on a Fund by Fund basis in a manner determined by the
Transfer Agent based on the number of accounts in each fund.
These fees are valid for eighteen months after which they are subject to
change, from time to time.
<PAGE>
[LETTERHEAD OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON]
EXHIBIT 10(a)
April 26, 1995
(202) 639-7065
Nuveen Tax-Free Money Market Fund, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
RE: REGISTRATION STATEMENT ON FORM N-1A
UNDER THE SECURITIES ACT OF 1933
(FILE NO. 33-8371)
-----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Nuveen Tax-Free Money Market Fund, Inc., a
Minnesota corporation (the "Fund"), in connection with the above-referenced
Registration Statement on Form N-1A (as amended, the "Registration Statement")
which relates to the Fund's Nuveen Massachusetts Tax-Free Money Market Fund --
Institutional Series Shares; Nuveen Massachusetts Tax-Free Money Market Fund --
Service Plan Series Shares; Nuveen Massachusetts Tax-Free Money Market Fund --
Distribution Plan Series Shares; Nuveen New York Tax-Free Money Market Fund --
Institutional Series Shares; Nuveen New York Tax-Free Money Market Fund --
Service Plan Series Shares; and Nuveen New York Tax-Free Money Market Fund --
Distribution Plan Series Shares, par value $.01 (collectively, the "Shares").
This opinion is being delivered to you in connection with the Fund's filing of
Post-Effective Amendment No. 9 to the Registration Statement (the "Amendment")
with the Securities and Exchange Commission pursuant to Rule 485(b) of the
Securities Act of 1933 (the "1933 Act"). With your permission, all assumptions
and statements of reliance herein have been made without any independent
investigation or verification on our part except to the extent otherwise
expressly stated, and we express no opinion with respect to the subject matter
or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things,
executed copies of the following documents:
(a) a certificate of the Secretary of State of the State of Minnesota as
to the existence and good standing of the Fund;
(b) copies, certified by the Secretary of State of the State of
Minnesota, of the Fund's Articles of Incorporation and of all
amendments and all supplements thereto (the "Articles of
Incorporation");
<PAGE>
Nuveen Tax-Free Money Market Fund, Inc.
April 26, 1995
Page 2
(c) a certificate executed by Karen L. Healy, the Assistant Secretary of
the Fund, certifying as to, and attaching copies of, the Fund's
Articles of Incorporation and By-Laws, as amended (the "By-Laws"), and
certain resolutions adopted by the Board of Directors of the Fund
authorizing the issuance of the Shares; and
(d) a printer's proof, dated April 26, 1995, of the Amendment.
In our capacity as counsel to the Fund, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of all original or certified copies, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduced copies. As to various questions of fact relevant to such
opinion, we have relied upon, and assume the accuracy of, certificates and oral
or written statements of public officials and officers or representatives of the
Fund. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission, will be in substantially the form of the printer's proof
referred to in paragraph (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Fund's
Articles of Incorporation and for the consideration described in the
Registration Statement, will be legally issued, fully paid and non-assessable.
The opinion expressed herein is limited to the laws of the State of
Minnesota. As to matters of Minnesota law covered thereby, we have relied solely
upon the opinion of Dorsey & Whitney P.L.L.P., addressed to us and dated
April 26, 1995.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Thomas S. Harman
--------------------------------------
Thomas S. Harman
<PAGE>
Exhibit 10(b)
[LETTERHEAD OF DORSEY & WHITNEY P.L.L.P.]
April 26, 1995
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue N.W.
Suite 800
Washington, D.C. 20004-2505
Re: Nuveen Tax-Free Money Market Fund, Inc.
1995 Legality Opinion
Ladies and Gentlemen:
We have acted as special Minnesota counsel to Nuveen Tax-Free Money
Market Fund, Inc., a Minnesota corporation (the "Company"), in rendering the
opinions hereinafter set forth with respect to:
(i) the Company's "Class A Shares" (also known as its "Massachusetts
Tax-Free Money Market Fund -- Institutional Series Shares"), its
"Class B Shares" (also known as its "Massachusetts Tax-Free Money
Market Fund -- Service Plan Series Shares"), and its "Class C
Shares" (also known as its "Massachusetts Tax-Free Money Market
Fund -- Distribution Plan Series Shares"); and
(ii) the Company's "Class D Shares" (also known as its "New York Tax-Free
Money Market Fund -- Institutional Series Shares"), its "Class E
Shares" (also known as its "New York Tax-Free Money Market Fund --
Service Plan Series Shares"), and its "Class F Shares" (also known
as its "New York Tax-Free Money Market Fund -- Distribution Plan
Series Shares").
The classes of shares of the Company referred to above are referred to herein
collectively as the "Shares."
We understand that the Shares are being registered under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, pursuant to Post-Effective Amendment No. 9 to the Company's
<PAGE>
Fried, Frank, Harris, Shriver & Jacobson
April 26, 1995
Page 2
Registration Statement on Form N-1A (1933 Act File No. 33-8371), relating to
such shares. Such Registration Statement, as amended by said Post-Effective
Amendment No. 9, is referred to herein as the "Registration Statement."
In rendering the opinions hereinafter expressed, we have reviewed the
corporate proceedings taken by the Company in connection with the authorization
and issuance of the Shares, and we have reviewed such questions of law and
examined copies of such corporate records of the Company, certificates of public
officials and of responsible officers of the Company, and other documents as we
have deemed necessary as a basis for such opinions. As to the various matters of
fact material to such opinions, we have, when such facts were not independently
established, relied to the extent we deem proper on certificates of public
officials and of responsible officers of the Company. In connection with such
review and examination, we have assumed that all copies of documents provided to
us conform to the originals and that all signatures are genuine.
In addition, in rendering the opinions hereinafter expressed, we have
assumed, with the concurrence of the Company, that all of the Shares issued and
sold by the Funds will be issued and sold upon the terms and in the manner set
forth in the Registration Statement; that the Company will not issue Shares of
any series in excess of the numbers authorized in the Company's Articles of
Incorporation as in effect at the respective dates of issuance; that the Company
will not issue Shares for consideration less than the amount specified by
Article FIFTH(f) of such Articles; and that the Company will maintain its
corporate existence and good standing under the laws of the State of Minnesota
in effect at all times after the date of this opinion.
Based on the foregoing, it is our opinion that:
1. The Company is validly existing as a corporation in good standing
under the laws of the State of Minnesota.
2. The Shares issued from and after the date hereof, when issued and
delivered by the Company as described in the Registration Statement, will be
legally issued and fully paid and non-assessable; and the issuance of such
Shares is not subject to preemptive rights.
In rendering the foregoing opinions, we express no opinion as to the
laws of any jurisdiction other than the State of Minnesota. You are hereby
authorized to rely on the foregoing opinions in rendering your opinion to the
Company to be filed as an exhibit to the Registration Statement. In addition, we
hereby consent to the filing of this opinion letter as an exhibit to the
Registration
<PAGE>
Fried, Frank, Harris, Shriver & Jacobson
April 26, 1995
Page 3
Statement. Except as aforesaid, the foregoing opinions are not to be relied upon
by any other person without our prior written authorization.
Very truly yours,
/s/ Dorsey & Whitney P.L.L.P.
JDA
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our report
dated April 3, 1995, and to all references to our firm included in or made a
part of this registration statement of Nuveen Tax-Free Money Market Fund, Inc.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
April 24, 1995
<PAGE>
EXHIBIT 16
SCHEDULE OF COMPUTATION OF YIELD FIGURES
I. Current Yield
A. Current Yield is calculated as follows:
Net investment income per Share for the seven day period
i. ---------------------------------------------------------- = Base Period
Value of account at beginning of seven day period Return
ii. Base Period Return X 365/7 = Current Yield
B. Calculation of Current Yield for Seven Day Period Ended 2/28/95:
i. Massachusetts:
.0006439 365
Service and Distribution ( -------- ) X --- = 3.36%
Plan Series 1.00 7 =====
.0006497 365
Institutional ( -------- ) X --- = 3.39%
Series 1.00 7 =====
ii. New York:
.0006377 365
Service and Distribution ( -------- ) X --- = 3.33%
Plan Series 1.00 7 =====
.0006378 365
Institutional ( -------- ) X --- = 3.33%
Series 1.00 7 =====
II. Effective Yield
A. Effective Yield is calculated as follows:
(Base Period Return + 1) 365/7 - 1 = Effective Yield
B. Calculation of Effective Yield for Seven Day Period ended 2/28/95:
i. Massachusetts:
365/7
.0006439
Service and Distribution [ ( -------- ) + 1 ] - 1 = 3.41%
Plan Series 1.00 =====
365/7
Institutional .0006497
Series [ ( -------- ) + 1 ] - 1 = 3.44%
1.00 =====
ii. New York:
365/7
Service and Distribution .0006377
Plan Series [ ( -------- ) + 1 ] - 1 = 3.38%
1.00 =====
365/7
Institutional Series .0006378
[ ( -------- ) + 1 ] - 1 = 3.38%
1.00 =====
1
<PAGE>
III. Taxable Equivalent Yield
Based on a combined federal and state income tax rates for both Massachusetts
and New York of 42.5%, the Taxable Equivalent Yields for the Massachusetts and
New York Funds for the Seven Day Period Ended 2/28/95 are:
Massachusetts:
3.36%
Service and Distribution Plan Series -------- = 5.84%
1 - .425 =====
3.39%
Institutional Series -------- = 5.90%
1 - .425 =====
New York:
All Series 3.33%
-------- = 5.79%
1 - .425 =====
2
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM N-SAR AND THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCES TO SUCH DOCUMENTS.
</LEGEND>
<SERIES>
<NUMBER> 011
<NAME> NUVEEN MASSACHUSETTS MONEY MARKET SERVICE
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 51706
<INVESTMENTS-AT-VALUE> 51678
<RECEIVABLES> 1357
<ASSETS-OTHER> 169
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53232
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 228
<TOTAL-LIABILITIES> 228
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27732
<SHARES-COMMON-STOCK> 27732
<SHARES-COMMON-PRIOR> 38576
<ACCUMULATED-NII-CURRENT> 1008
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 27732
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1226
<OTHER-INCOME> 0
<EXPENSES-NET> 218
<NET-INVESTMENT-INCOME> 1008
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1006
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1006
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 126292
<NUMBER-OF-SHARES-REDEEMED> 138119
<SHARES-REINVESTED> 982
<NET-CHANGE-IN-ASSETS> (10845)
<ACCUMULATED-NII-PRIOR> 815
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 158
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 242
<AVERAGE-NET-ASSETS> 39511
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .025
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.025)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM N-SAR AND THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCES TO SUCH DOCUMENTS.
</LEGEND>
<SERIES>
<NUMBER> 012
<NAME> NUVEEN MASSACHUSETTS MONEY MARKET DISTRIBUTION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 51706
<INVESTMENTS-AT-VALUE> 51678
<RECEIVABLES> 1357
<ASSETS-OTHER> 169
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53232
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 228
<TOTAL-LIABILITIES> 228
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24237
<SHARES-COMMON-STOCK> 24237
<SHARES-COMMON-PRIOR> 27773
<ACCUMULATED-NII-CURRENT> 700
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 24237
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 851
<OTHER-INCOME> 0
<EXPENSES-NET> 151
<NET-INVESTMENT-INCOME> 700
<REALIZED-GAINS-CURRENT> (1)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 699
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 699
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26877
<NUMBER-OF-SHARES-REDEEMED> 31069
<SHARES-REINVESTED> 656
<NET-CHANGE-IN-ASSETS> (3536)
<ACCUMULATED-NII-PRIOR> 496
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 110
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 223
<AVERAGE-NET-ASSETS> 27410
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .025
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.025)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM N-SAR AND THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCES TO SUCH DOCUMENTS.
</LEGEND>
<SERIES>
<NUMBER> 013
<NAME> NUVEEN MASSACHUSETTS MONEY MARKET INSTITUTIONAL
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 51706
<INVESTMENTS-AT-VALUE> 51678
<RECEIVABLES> 1357
<ASSETS-OTHER> 169
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53232
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 228
<TOTAL-LIABILITIES> 228
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1036
<SHARES-COMMON-STOCK> 1036
<SHARES-COMMON-PRIOR> 3406
<ACCUMULATED-NII-CURRENT> 102
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1036
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 120
<OTHER-INCOME> 0
<EXPENSES-NET> 18
<NET-INVESTMENT-INCOME> 102
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 102
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 102
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10227
<NUMBER-OF-SHARES-REDEEMED> 12603
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> (2370)
<ACCUMULATED-NII-PRIOR> 78
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18
<AVERAGE-NET-ASSETS> 3854
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .026
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.026)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM N-SAR AND THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCES TO SUCH DOCUMENTS.
</LEGEND>
<SERIES>
<NUMBER> 021
<NAME> NUVEEN NEW YORK MONEY MARKET SERVICE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 30238
<INVESTMENTS-AT-VALUE> 30233
<RECEIVABLES> 200
<ASSETS-OTHER> 114
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30552
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 98
<TOTAL-LIABILITIES> 98
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 640
<SHARES-COMMON-STOCK> 640
<SHARES-COMMON-PRIOR> 557
<ACCUMULATED-NII-CURRENT> 17
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 640
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21
<OTHER-INCOME> 0
<EXPENSES-NET> 4
<NET-INVESTMENT-INCOME> 17
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 17
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 17
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1127
<NUMBER-OF-SHARES-REDEEMED> 1059
<SHARES-REINVESTED> 15
<NET-CHANGE-IN-ASSETS> 83
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7
<AVERAGE-NET-ASSETS> 716
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .024
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.024)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM N-SAR AND THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCES TO SUCH DOCUMENTS.
</LEGEND>
<SERIES>
<NUMBER> 022
<NAME> NUVEEN NEW YORK MONEY MARKET DISTRIBUTION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1995
<PERIOD-END> FEB-28-1994
<INVESTMENTS-AT-COST> 30238
<INVESTMENTS-AT-VALUE> 30233
<RECEIVABLES> 200
<ASSETS-OTHER> 114
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30552
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 98
<TOTAL-LIABILITIES> 98
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29798
<SHARES-COMMON-STOCK> 29798
<SHARES-COMMON-PRIOR> 27886
<ACCUMULATED-NII-CURRENT> 693
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 29798
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 853
<OTHER-INCOME> 0
<EXPENSES-NET> 160
<NET-INVESTMENT-INCOME> 693
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 693
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 693
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16627
<NUMBER-OF-SHARES-REDEEMED> 15342
<SHARES-REINVESTED> 627
<NET-CHANGE-IN-ASSETS> 1912
<ACCUMULATED-NII-PRIOR> 504
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 117
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 229
<AVERAGE-NET-ASSETS> 29134
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .024
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.024)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FORM N-SAR AND THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCES TO SUCH DOCUMENTS.
</LEGEND>
<SERIES>
<NUMBER> 023
<NAME> NUVEEN NEW YORK MONEY MARKET INSTITUTIONAL
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 30238
<INVESTMENTS-AT-VALUE> 30233
<RECEIVABLES> 200
<ASSETS-OTHER> 114
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30552
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 98
<TOTAL-LIABILITIES> 98
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17
<SHARES-COMMON-STOCK> 17
<SHARES-COMMON-PRIOR> 17
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 17
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 16
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .024
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.024)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 99(b)
Certified Resolution
--------------------
The undersigned, James J. Wesolowski, hereby certifies, on behalf of Nuveen
Tax-Free Money Market Fund, Inc. (the "Fund"), (1) that he is the duly elected,
qualified and acting Secretary of the Fund, and that as such Secretary he has
custody of its corporate books and records, (2) that attached to this
Certificate is a true and correct copy of a resolution duly adopted by the Board
of Directors of the Fund at a meeting held on February 14, 1995, and (3) that
said resolution has not been amended or rescinded and remains in full force and
effect.
April 25, 1995
/s/ James J. Wesolowski
------------------------------
James J. Wesolowski, Secretary
<PAGE>
RESOLVED, that each member of the Board and officer of the Fund who may be
required to execute the Registration Statement on Form N-1A, or any amendment or
amendments thereto, be, and each of them hereby is, authorized to execute a
power of attorney appointing Richard J. Franke, Timothy R. Schwertfeger, James
J. Wesolowski, Larry W. Martin, Gifford R. Zimmerman, and Thomas S. Harman, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Registration Statement and any and all
amendments thereto and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, and ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
<PAGE>
Exhibit 99(c)
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set his hand this 14th day of
February, 1995.
/s/ Richard J. Franke
---------------------
Richard J. Franke
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set his hand this 14th day of
February, 1995.
/s/ Lawrence H. Brown
---------------------
Lawrence H. Brown
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) her true and lawful attorney-in-fact and agent, for him on
her behalf and in her name, place and stead, in any and all capacities, to sign,
execute and affix her seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set her hand this 14th day of February, 1995.
/s/ Anne E. Impellizzeri
------------------------
Anne E. Impellizzeri
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be her voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set his hand this 14th day of February, 1995.
/s/ John E. O'Toole
------------------------
John E. O'Toole
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) her true and lawful attorney-in-fact and agent, for him on
her behalf and in her name, place and stead, in any and all capacities, to sign,
execute and affix her seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set her hand this 14th day of February, 1995.
/s/ Margaret K. Rosenheim
-------------------------
Margaret K. Rosenheim
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be her voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set his hand this 14th day of February, 1995.
/s/ Peter R. Sawers
------------------------
Peter R. Sawers
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
NUVEEN TAX-FREE MONEY MARKET FUND, INC.
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of the above-
referenced organization, hereby constitutes and appoints RICHARD J. FRANKE,
TIMOTHY R. SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN, GIFFORD R.
ZIMMERMAN, and THOMAS S. HARMAN, and each of them (with full power to each of
them to act alone) his true and lawful attorney-in-fact and agent, for him on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and affix his seal thereto and file one or more Registration Statements
on Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940, including any amendment or amendments thereto, with all exhibits, and any
and all other documents required to be filed with any regulatory authority,
federal or state, relating to the registration thereof, or the issuance of
shares thereof, without limitation, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could do
if personally present, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned director of the above-referenced
organization has hereunto set his hand this 14th day of February, 1995.
/s/ Timothy R. Schwertfeger
---------------------------
Timothy R. Schwertfeger
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
On this 14th day of February, 1995, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.
-------------------------------
"OFFICIAL SEAL"
Virginia L. Corcoran
(SEAL) Notary Public, State of /s/ Virginia L. Corcoran
Illinois -------------------------
My Commission Expires 10/26/97 Notary Public
-------------------------------
My Commission Expires: 10/26/97
<PAGE>
EXHIBIT 99(c)
NUVEEN TAX-EXEMPT UNIT TRUSTS
NUVEEN TAX-EXEMPT MUTUAL FUNDS
NUVEEN MUNICIPAL EXCHANGE-TRADED FUNDS
NUVEEN ADVISORY CORP.
NUVEEN INSTITUTIONAL ADVISORY CORP.
JOHN NUVEEN & CO. INCORPORATED
THE JOHN NUVEEN COMPANY
______________________________
Standards and Procedures
Regarding
Conflicts of Interest
______________________________
Code of Ethics
And
Reporting Requirements
The Securities and Exchange Commission, in Investment Company Act Release No.
ll42l, has adopted Rule l7j-l "to provide guidance to investment companies as to
the minimum standards of conduct appropriate for persons who have access to
information regarding the purchase and sale of portfolio securities by
investment companies." The Rule requires registered investment companies, their
investment advisers and their principal underwriters to adopt codes of ethics
and reporting requirements to guard against violations of the standards set
forth in the Rule and the principles provided below and to establish guidelines
for the conduct of persons who (1) may obtain information concerning securities
held by or considered for purchase or sale by any series of the Nuveen Tax-
Exempt Unit Trusts (the "Trusts") or by any of the registered management
investment companies (the "Funds") or non-management investment company clients
("Clients") to which Nuveen Advisory Corp. or Nuveen Institutional Advisory
Corp. act as investment advisers or (2) who may make any recommendation or
participate in the determination of which recommendation shall be made
concerning the purchase or sale of any securities by a Trust, Fund or Client.
This Code of Ethics (the "Code") consists of six sections -- 1. Statement of
General Principles; 2. Definitions; 3. Exempted Transactions; 4. Prohibitions;
5. Reporting Requirements; and 6. Sanctions.
I. Statement of General Principles
The Code is based upon the principle that the officers, directors and
employees of a Fund, Nuveen Advisory Corp., Nuveen Institutional Advisory
Corp., John Nuveen & Co. Incorporated and The John Nuveen Company owe a
fiduciary duty to, among others, the unitholders and shareholders of the
Trusts and Funds and the Clients, to conduct their personal securities
transactions in a manner which does not interfere with Trust, Fund or
Client portfolio transactions or otherwise take unfair advantage of their
relationship to the Trusts, Funds or Clients. In accordance with this
general principle, persons covered by the Code must: (1) place the
interests of unitholders and shareholders of the Trusts and Funds and the
<PAGE>
2
Clients first; (2) execute personal securities transactions in compliance
with the Code; (3) avoid any actual or potential conflict of interest and
any abuse of their positions of trust and responsibility; and (4) not take
inappropriate advantage of their positions. It bears emphasis that
technical compliance with the Code's procedures will not automatically
insulate from scrutiny trades which show a pattern of abuse of the
individual's fiduciary duties to the Trust, Fund or Client.
II. Definitions
As used herein:
(l) "Access person" shall mean any director, officer or advisory person of
any Fund or of Nuveen Advisory Corp. or Nuveen Institutional Advisory
Corp.
A list of persons deemed to be access persons is attached as Exhibit
A.
(2) "Advisory person" shall mean:
(a) Any employee of a Fund, of Nuveen Advisory Corp., of Nuveen
Institutional Advisory Corp. or of John Nuveen & Co. Incorporated
who, in connection with his or her regular functions or duties,
makes, participates in, or obtains information regarding the
purchase or sale of securities by a Trust, Fund or Client or whose
functions relate to the making of any recommendations with respect
to such purchases or sales; and
(b) Any director or officer of John Nuveen & Co. Incorporated or The
John Nuveen Company who in the ordinary course of business makes,
participates in or obtains information regarding the purchase or
sale of securities for a Trust, Fund or Client or recommendations
made with regard to the purchase or sale of a security by a Trust,
Fund or Client, or whose functions or duties relate to the making
of any recommendation to a Trust, Fund or Client regarding the
purchase or sale of securities.
(3) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the
recommendation, when such person considers making such recommendation.
<PAGE>
3
(4) A person will be deemed to be the "beneficial owner" of securities:
(a) held in his or her own name or the name of his or her spouse and
their minor children;
(b) held in a trust
(i) of which such person is trustee and the trustee or members
of his or her immediate family have a vested interest in
the income of the trust,
(ii) in which such person has a vested beneficial interest, or
(iii) of which such person is settlor and which the settlor has
the power to revoke without consent of the beneficiaries; a
person will not be deemed to be the beneficial owner of
securities held in the portfolio of a registered investment
company solely by reason of his or her ownership of shares
or units of such registered investment company;
(c) held in any other name if by reason of any contract,
understanding, relationship, agreement or other arrangement such
person obtains benefits substantially equivalent to those of
ownership (e.g. the right to income from and the right to
exercise a controlling influence over the purchase or sale of
such securities) or would otherwise be deemed to beneficially own
such security for purposes of determining whether such person
would be subject to the provisions of Section l6 of the
Securities Exchange Act of l934 and the rules and regulations
thereunder, except that the determination of direct or indirect
beneficial ownership shall apply to all securities which an
access person has or acquires.
A person will not be deemed to be the beneficial owner of
securities held in the portfolio of a registered investment
company solely by reason of his or her ownership of shares or
units of such registered investment company.
(5) "Security" shall mean any stock, bond, debenture, evidence of
indebtedness or in general any other instrument defined to be a
security in Section 2(a)(36) of the Investment Company Act of l940
except that it shall not include securities issued by the Government
of the United States, short term debt securities which are "government
securities" within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, bankers' acceptances, bank certificates of
deposit, commercial paper and shares of registered open-end investment
companies.
<PAGE>
4
(6) "Purchase or sale of a security" shall include any transaction in
which a beneficial interest in a security is acquired or disposed of,
including but not limited to the writing of an option to purchase or
sell a security.
(7) "Control" shall have the same meaning as set forth in Section 2(a) (9)
of the Investment Company Act of 1940.
(8) "Investment personnel" shall mean any employee of a Fund, Nuveen
Advisory Corp. or Nuveen Institutional Advisory Corp. who acts as a
portfolio manager or as an analyst or trader who provides information
or advice to the portfolio manager or who helps execute the portfolio
manager's decisions. A list of investment personnel is attached as
Exhibit B.
(9) "Portfolio manager" shall mean any employee of a Fund, Nuveen Advisory
Corp. or Nuveen Institutional Advisory Corp. who is entrusted with the
direct responsibility and authority to make investment decisions
affecting a Trust, Fund or Client. A list of portfolio managers is
attached as Exhibit C.
III. Exempted Transactions
The prohibitions of Section IV of this Code shall not apply to:
(1) Purchases or sales affecting any account over which the party involved
has no direct or indirect influence or control;
(2) Purchases or sales of securities which are not:
(a) acquired in a private placement;
(b) shares of The John Nuveen Company;
(c) municipal securities; or
(d) shares of Nuveen-sponsored exchange-traded funds.
(3) Purchases or sales which are non-volitional on the part of either the
party involved or a Trust, Fund or Client;
(4) Purchases which are part of an automatic dividend reinvestment plan.
<PAGE>
5
(5) Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such rights so
acquired.
IV. Prohibitions
(l) Unless such transaction is exempted above or is previously cleared in
the manner described in paragraph (9) below, no access person shall
purchase or sell the following securities for his or her own account
or for any account in which he or she has any beneficial ownership:
(a) securities offered in a private placement;
(b) shares of The John Nuveen Company;
(c) municipal securities; or
(d) shares of a Nuveen-sponsored exchange-traded fund.
The purchase of securities identified in paragraph (1)(a) by
investment personnel must also comply with paragraph (4) below.
(2) No access person shall execute a securities transaction on a day
during which a Trust, Fund or Client has a pending "buy" or "sell"
order in that same security until that order is executed or withdrawn.
Trades made in violation of this prohibition should be unwound or, if
that is impractical, any profits realized must be disgorged to a
charitable organization.
(3) Investment personnel shall not purchase any securities in an initial
public offering except an offering of securities issued by municipal
or United States government entities.
(4) Unless such transaction is previously approved in the manner described
in paragraph (10) below and the criteria set forth in that paragraph
are followed, investment personnel shall not purchase any security in
a private placement.
(5) Investment personnel shall not profit in the purchase and sale, or
sale and purchase, of the same (or equivalent) security within 60
calendar days if such security is a municipal security or shares
issued by a Nuveen-sponsored exchange-traded fund. Trades made in
violation of this prohibition should be unwound or, if that is
impractical, any profits realized must be disgorged to a charitable
organization.
<PAGE>
6
(6) Investment personnel shall not accept any gift or other thing of more
than de minimis value from any person or entity that does business
with or on behalf of a Trust, Fund or Client. For purposes of this
prohibition the term "de minimis value" shall have the same meaning
expressed in the National Association of Securities Dealers, Inc.
Rules of Fair Practice.
(7) Unless such service is previously cleared in the manner described in
paragraph (11) below and the criteria set forth in that paragraph are
followed, investment personnel shall not serve as board members or
other decision-makers for entities that issue municipal securities.
(8) No portfolio manager of a Trust, Fund or Client shall purchase or sell
any security within seven calendar days before or after the Fund or
Client he surveys or manages trades or considers to purchase or sell
such security. Trades made in violation of this prohibition should be
unwound or, if that is impractical, any profits realized must be
disgorged to a charitable organization.
(9) An access person may request clearance of a transaction otherwise
prohibited by paragraph (1) above prior to the placement of any order
in connection therewith by submitting a written request for clearance
to the Chairman or President of John Nuveen & Co. Incorporated or his
designee, with a copy to the Legal Department. Such request shall
state the title and principal amount of the security proposed to be
purchased or sold, the nature of the transaction, the price at which
the transaction is proposed to be effected, and the name of the
broker, dealer or bank with or through whom the transaction is
proposed to be effected. No such transaction may be effected without
the prior clearance of the transaction and the price by the Chairman
or President or his designee. Employee transaction tickets must bear
initials showing such clearance before processing. Preclearance shall
be valid for three days. Transactions may be cleared by the Chairman
or President or his designee only if such officer determines that the
potential harm to any Trust, Fund or Client is highly remote or non-
existent because such transaction would be very unlikely to affect a
highly institutional market, or because it clearly is not related
economically to the securities to be purchased, sold or held by any
Trust, Fund or Client.
(10) Investment personnel may request approval of a transaction otherwise
prohibited by paragraph (4) above prior to the placement of any order
in connection therewith by submitting a written request for approval
to the Chairman or President of John Nuveen & Co. Incorporated or his
designee, with a copy to the Legal Department. Such request shall
state the title and principal amount of the security proposed to be
purchased or sold, the nature of the transaction, the price at which
the transaction is proposed to be effected, and the name of the
broker, dealer or bank with or through
<PAGE>
7
whom the transaction is proposed to be effected. No such transaction
may be effected without the prior approval of the transaction and the
price by the Chairman or President or his designee. Employee
transaction tickets must bear initials showing such approval before
processing. Any approval shall be valid for three days. Transactions
may be approved by the Chairman or President or his designee only if
such officer takes into account, among other factors, whether the
investment opportunity should be reserved for a Trust, Fund or Client
and any shareholders or unitholders affected, and whether the
opportunity is being offered to an individual by virtue of his or her
position. In addition, Investment personnel who receive authorization
to purchase securities in a private placement have an affirmative duty
to disclose that position to the Chairman or President or his designee
if he or she plays a role in a Trust's, Fund's or Client's subsequent
investment decision regarding the same issuer. Once such disclosure is
made, the Chairman or President or his designee shall assemble a
commission of investment personnel with no personal interest in the
issuer involved to independently review the Trust's, Fund's or
Client's investment decision.
(11) Investment Personnel may request clearance of service otherwise
prohibited by paragraph (7) above, prior to acceptance of any such
position, by submitting a written request for clearance to the
Chairman or President of John Nuveen & Co. Incorporated or his
designee, with a copy to the Legal Department. Such request shall
state the position sought, the reason service is desired and any
possible conflicts of interest known at the time of the request. No
such position may be accepted without the prior clearance by the
Chairman or President or his designee. Service may be cleared by the
Chairman or President or his designee only if such officer determines
that service in that capacity would be consistent with the interests
of the Trusts, Funds or Clients and any shareholders or unitholders
affected. In addition, Investment personnel who receive authorization
to serve in such a capacity must be isolated through "Chinese Wall"
procedures from those making investment decisions regarding securities
issued by the entity involved.
V. Reporting Requirements
(l) Every access person (other than directors of a Fund who are not
"interested persons" of such Fund) shall report to the Legal
Department of John Nuveen & Co. Incorporated details of each
transaction by reason of which he or she acquires any direct or
indirect beneficial ownership of any security. Notwithstanding the
foregoing, an access person need not make a report pursuant hereto
where such report would duplicate information recorded pursuant to
Rules 204-2(a)(l2) or 204-2(a)(l3) under the Investment Advisers Act
of l940. In addition to the reporting requirement expressed above,
every access person (including directors who are not "interested
<PAGE>
8
persons") shall direct his or her broker or brokers to supply to the
Legal Department, on a timely basis, duplicate copies of confirmations
of all securities transactions and copies of periodic statements for
all securities accounts involving securities in which such access
person acquires or foregoes direct or indirect beneficial ownership.
(2) Every director of a Fund who is not an "interested person" of such
Fund shall be required to report the details of each transaction with
respect to which such director knew or, in the ordinary course of
fulfilling his or her official duties as a director of the Fund,
should have known that during the 15 day period immediately preceding
or after the date of the transaction in a security by the director
such security is or was purchased or sold by the Fund or such purchase
or sale by the Fund is or was considered by the Fund or its investment
adviser.
(3) Every report required to be made pursuant to paragraphs 1 and 2 of
this Section (other than duplicate copies of confirmations and
periodic statements) shall be made not later than l0 days after the
end of the calendar quarter in which the transaction to which the
report relates was effected, and shall contain the following
information:
(a) the date of the transaction, the title and the number of shares,
or principal amount of each security involved;
(b) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(c) the price at which the transaction was effected; and
(d) the name of the broker, dealer or bank with or through whom the
transaction was effected.
Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he or
she has any direct or indirect beneficial ownership in the security to
which the report relates.
(4) The reporting requirements established pursuant to paragraphs 1 and 2
of this Section (other than duplicate copies of confirmations and
periodic statements) shall apply only to transactions by an access
person in securities in which such access person has, or by reason of
such transaction acquires, any direct or indirect beneficial ownership
in the security.
(5) Investment personnel shall disclose to the General Counsel of John
Nuveen & Co. Incorporated all personal securities holdings within 10
days of commencement of employment as an investment person and shall
continue to disclose such holdings on an annual basis.
<PAGE>
9
VI. Sanctions
Upon discovery of a violation of this Code, any Fund, Nuveen Advisory
Corp., Nuveen Institutional Advisory Corp., John Nuveen & Co.
Incorporated or The John Nuveen Company may impose such sanctions as
it deems appropriate, including, inter alia, a letter of censure or
suspension or termination of the employment of the violator. All
material violations of this Code and any sanctions imposed with
respect thereto shall be reported periodically to the board of
directors of the management investment company with respect to
securities of which the violation occurred, or to the Executive
Committee of John Nuveen & Co. Incorporated if the violation was with
respect to securities of any series of the Nuveen Tax-Exempt Unit
Trusts, or to the board of directors of Nuveen Institutional Advisory
Corp. or Nuveen Advisory Corp. with respect to securities of non-
management investment company clients advised by these entities.
Revised October 1994
