SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
NUVEEN CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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IMPORTANT NOTICE
TO NUVEEN FUND SHAREHOLDERS
JULY 28, 2003
Although we recommend that you read the complete Joint Proxy Statement, for your
convenience, we have provided a brief overview of the issues to be voted on.
Q. WHY AM I RECEIVING THIS JOINT PROXY STATEMENT?
A. Closed-end investment companies listed on the New York Stock Exchange such
as your Fund are required to hold annual meetings to approve the election
of Trustees. In addition, such companies are required to obtain shareholder
approval for certain changes to their investment policies. Your Fund is
seeking shareholder approval on the following items:
1. To elect trustees to serve on the Board of Trustees.
2. To approve changes to certain fundamental investment policies.
Please refer to the Joint Proxy Statement for a detailed explanation of the
proposed items.
Q. WHY ARE INDIVIDUALS RECOMMENDED FOR ELECTION TO THE BOARD OF TRUSTEES?
A. Currently, two separate board clusters oversee the funds in the Nuveen
family of funds. One board cluster comprised of the same board members
oversees the funds managed by Nuveen Advisory Corp. and one board cluster
comprised of the same board members oversees all but one of the funds
managed by Nuveen Institutional Advisory Corp. (the "Adviser"). The Board
of your Fund has proposed to consolidate both board clusters into a single
board cluster so that the same individuals serve on the boards of most
Nuveen funds.
Your Board believes that the consolidation of board clusters will have the
following advantages:
- the consolidation will avoid the need to add new board members to each
board cluster at various later dates to maintain the current size and
structure of each board cluster and thereby avoid the costs associated
with multiple meetings to fill such vacancies;
- the consolidation ensures that each Fund will gain new board members that
are already knowledgeable about Nuveen and investment companies in
general;
- the consolidation would reduce the duplication of board materials and
reports covering the same issues and would avoid the need for repeated
presentation of the same material by the same personnel at different
meetings;
- reducing such administrative burdens will allow the Adviser and its
personnel to focus more on non-administrative matters; and
- a single board cluster overseeing all operations of the Nuveen family of
funds will have a better picture of all issues facing shareholders.
Q. WHICH FUNDAMENTAL INVESTMENT POLICIES ARE CHANGING?
A. Your Board has proposed to amend your Fund's fundamental investment
policies relating to borrowing and lending in connection with the
implementation of a proposed interfund lending program.
Q. WHY IS THE FUND PROPOSING TO CHANGE ITS FUNDAMENTAL INVESTMENT POLICIES?
A. In connection with disaster recovery planning and to provide liquidity in
the event that open-end funds in the Nuveen family of funds encounter
higher than normal redemption requests that may follow a national disaster
such as the events of September 11, 2001, your Board has authorized the
Fund's participation in an interfund lending program that would allow the
Nuveen Funds, including your Fund, to lend and borrow cash for temporary
purposes directly to and from each other. The proposed new fundamental
investment policies will enable your Fund to participate in this interfund
lending program.
Q. HOW DO THE TRUSTEES OF MY FUND SUGGEST THAT I VOTE?
A. After careful consideration, the trustees of your Fund unanimously
recommend that you vote "FOR" each of the items proposed.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Your vote is needed to ensure that the proposals can be acted upon.
Additionally, your immediate response to these items will help save on the
costs of any future solicitations for a shareholder vote. We encourage all
shareholders to participate in the governance of their Fund.
Q. WHO DO I CALL IF I HAVE QUESTIONS?
A. If you need any assistance, or have any questions regarding the proposals
or how to vote your shares, please call your financial advisor or call
Nuveen at (800) 257-8787 weekdays from 7:00 a.m. to 7:00 p.m. Central time.
Q. HOW DO I VOTE MY SHARES?
A. You can vote your shares by completing and signing the enclosed proxy card,
and mailing it in the enclosed postage-paid envelope. In addition, you may
vote by telephone by calling the toll-free number on the proxy card or by
computer over the internet (www.proxyvote.com) and using the control number
on the proxy card.
Q. WILL ANYONE CONTACT ME?
A. You may receive a call to verify that you received your proxy materials, to
answer any questions you may have about the proposals and to encourage you
to vote.
NOTICE OF ANNUAL MEETING 333 West Wacker Drive
OF SHAREHOLDERS Chicago, Illinois 60606
JULY 28, 2003 (800) 257-8787
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP)
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ)
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR)
NUVEEN CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
NUVEEN NEW YORK SELECT TAX-FREE INCOME PORTFOLIO (NXN)
JUNE 17, 2003
TO THE SHAREHOLDERS OF THE ABOVE FUNDS:
Notice is hereby given that the Annual Meeting of Shareholders of each of Nuveen
Select Tax-Free Income Portfolio, Nuveen Select Tax-Free Income Portfolio 2,
Nuveen Select Tax-Free Income Portfolio 3, Nuveen California Select Tax-Free
Income Portfolio and Nuveen New York Select Tax-Free Income Portfolio, each a
Massachusetts business trust (each, a "Fund," and, collectively, the "Funds"),
will be held in the Sixth Floor auditorium of the Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois, on Monday, July 28, 2003, at 10:30
a.m., Chicago time, for the following purposes and to transact such other
business, if any, as may properly come before the Annual Meeting:
MATTERS TO BE VOTED ON BY SHAREHOLDERS:
1. To elect twelve (12) trustees to serve for each Fund until the next Annual
Meeting and until their successors shall have been duly elected and qualified.
2. To approve changes to each Fund's fundamental investment policies.
3. To transact such other business as may properly come before the Annual
Meeting.
Shareholders of record at the close of business on May 23, 2003 are entitled to
notice of and to vote at the Annual Meeting.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IN ORDER TO AVOID
DELAY AND ADDITIONAL EXPENSE TO YOUR FUND, AND TO ASSURE THAT YOUR SHARES ARE
REPRESENTED, PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. YOU MAY VOTE BY MAIL, TELEPHONE OR OVER THE INTERNET.
TO VOTE BY MAIL, PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. TO VOTE BY TELEPHONE, PLEASE
CALL THE TOLL-FREE NUMBER LOCATED ON YOUR PROXY CARD, ENTER THE CONTROL NUMBER
PROVIDED ON YOUR PROXY CARD, AND FOLLOW THE RECORDED INSTRUCTIONS, USING YOUR
PROXY CARD AS A GUIDE. TO VOTE OVER THE INTERNET, GO TO WWW.PROXYVOTE.COM, ENTER
THE CONTROL NUMBER PROVIDED ON THE PROXY CARD, AND FOLLOW THE INSTRUCTIONS,
USING YOUR PROXY CARD AS A GUIDE.
Jessica R. Droeger
Vice President and Secretary
JOINT PROXY STATEMENT 333 West Wacker Drive
Chicago, Illinois 60606
(800) 257-8787
June 17, 2003
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP)
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ)
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR)
NUVEEN CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
NUVEEN NEW YORK SELECT TAX-FREE INCOME PORTFOLIO (NXN)
GENERAL INFORMATION
This Joint Proxy Statement is furnished in connection with the solicitation by
the Board of Trustees (each a "Board" and collectively, the "Boards," and each
Trustee a "Board Member" and collectively, the "Board Members") of each of
Nuveen Select Tax-Free Income Portfolio ("Select Portfolio"), Nuveen Select
Tax-Free Income Portfolio 2 ("Select Portfolio 2"), Nuveen Select Tax-Free
Income Portfolio 3 ("Select Portfolio 3"), Nuveen California Select Tax-Free
Income Portfolio ("California Portfolio") and Nuveen New York Select Tax-Free
Income Portfolio ("New York Portfolio") (each a "Fund" and collectively, the
"Funds"), of proxies to be voted at the Annual Meeting of Shareholders to be
held on July 28, 2003 (for each Fund, an "Annual Meeting" and collectively, the
"Annual Meetings"), and at any and all adjournments thereof.
On the matters coming before each Annual Meeting as to which a choice has been
specified by shareholders on the proxy, the shares will be voted accordingly. If
no choice is so specified, the shares will be voted FOR the election of the
nominees as listed in this Joint Proxy Statement and FOR the changes to each
Fund's fundamental investment policies. Shareholders who execute proxies may
revoke them at any time before they are voted by filing with that Fund a written
notice of revocation, by delivering a duly executed proxy bearing a later date,
or by attending the Annual Meeting and voting in person.
This Joint Proxy Statement is first being mailed to shareholders on or about
June 17, 2003.
The Board of each Fund has determined that the use of this Joint Proxy Statement
for each Annual Meeting is in the best interest of each Fund and its
shareholders in light of the similar matters being considered and voted on by
the shareholders.
The following table indicates which shareholders are solicited with respect to
each matter:
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PROPOSALS
------------------------
CHANGE IN
ELECT BOARD FUNDAMENTAL
FUND MEMBERS POLICIES
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Select Portfolio X X
Select Portfolio 2 X X
Select Portfolio 3 X X
California Portfolio X X
New York Portfolio X X
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A quorum of shareholders is required to take action at each Annual Meeting. A
majority of the shares entitled to vote at each Annual Meeting, represented in
person or by proxy, will constitute a quorum of shareholders at that Annual
Meeting. Votes cast by proxy or in person at each Annual Meeting will be
tabulated by the inspectors of election appointed for that Annual Meeting. The
inspectors of election will determine whether or not a quorum is present at the
Annual Meeting. The inspectors of election will treat abstentions and "broker
non-votes" (i.e., shares held by brokers or nominees, typically in "street
name," as to which (i) instructions have not been received from the beneficial
owners or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter) as present for purposes of
determining a quorum.
For each Fund abstentions and broker non-votes will have no effect on the
election of Board Members and will have the effect of a vote against the
proposal to change each Fund's fundamental investment policies. The details of
the proposals to be voted on by the shareholders and the vote required for
approval of the proposals are set forth under the description of each proposal
below.
Those persons who were shareholders of record at the close of business on May
23, 2003 will be entitled to one vote for each share held. As of May 23, 2003,
the shares of the Funds were issued and outstanding as follows:
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NYSE TICKER
FUND SYMBOL SHARES
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Select Portfolio NXP 16,378,096
Select Portfolio 2 NXQ 17,607,068
Select Portfolio 3 NXR 12,964,124
California Portfolio NXC 6,257,070
New York Portfolio NXN 3,907,069
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1. ELECTION OF BOARD MEMBERS OF EACH FUND
Currently, two separate board clusters oversee the funds in the Nuveen family of
funds. One board cluster comprised of the same board members oversees the funds
managed by Nuveen Advisory Corp. ("NAC") and one board cluster comprised of the
same board members oversees all but one of the funds managed by Nuveen
Institutional Advisory Corp. ("NIAC" or the "Adviser"). Each current board
cluster has a total of six board members who are not "interested persons" (as
that term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) and who are not affiliated with Nuveen or a fund's investment
adviser (the "Independent Board Members") and one board member who is an
"interested person." Below is a list of the board members of each board cluster.
The Boards of each Fund have proposed to consolidate both board clusters into a
single board cluster so that the same individuals serve on the boards of most of
the Nuveen funds. All individuals serving on both board clusters are nominated
to serve on the combined board except James E. Bacon, who is retiring. Mr. Bacon
is currently a Board Member of each Fund and serves on the NIAC board cluster.
The following is a list of the nominees under the proposal who are continuing
Board Members of each Fund and the nominees who are new board members:
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CONTINUING BOARD MEMBERS (NIAC BOARD CLUSTER): NEW BOARD MEMBER NOMINEES (NAC BOARD CLUSTER):
------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger* Robert P. Bremner
William E. Bennett Lawrence H. Brown
Jack B. Evans Anne E. Impellizzeri
William L. Kissick Peter R. Sawers
Thomas E. Leafstrand William J. Schneider
Sheila W. Wellington Judith M. Stockdale
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* Interested person. Mr. Schwertfeger currently serves on both board clusters.
In part, the proposal to create a single board is being recommended because of
the large number of retirements that will occur over the next few years. Within
two years, the aggregate number of Independent Board Members that serve on both
board clusters (currently 12) is expected to fall to six, due to a number of
retirements because of age and/or tenure limitations for board membership.
Combining the board will avoid the need to add new board members to each board
cluster at various later dates to maintain the current size and structure of
each board cluster and thereby avoid the costs associated with multiple meetings
to fill such vacancies. In addition, combining the board ensures that each Fund
will gain new board members that are already knowledgeable about Nuveen and
investment companies in general.
Historically, the two separate board clusters have had separate meetings but
often have reviewed similar policy issues, contractual arrangements and other
matters. Among other potential efficiencies, the Board of each Fund believes
that consolidating the board clusters into one board would reduce the
duplication of board materials and reports covering the same issues and would
avoid the need for repeated presentation of the same material by the same
personnel at different meetings. This would permit the Adviser and its personnel
to focus on non-administrative matters. In addition, a single board overseeing
all operations of the Nuveen family of funds will have a better picture of all
issues facing shareholders.
At its May 15, 2003 meeting, each board cluster reviewed the compensation paid
to Independent Board Members and determined that compensation should be
increased because of the expanded responsibilities of the Board Members due to
(a) the increase in the number and types of investment companies overseen by the
Board Members and (b) recent additional legal and regulatory requirements.
Effective July 1, 2003, for all Nuveen Funds overseen, Independent Board Members
will receive a $65,000 annual retainer, plus (a) a fee of $2,000 per day for
attendance in person or by telephone at a regularly scheduled meeting of the
Board; (b) a fee of $1,000 per day for attendance in person where such in-person
attendance is required and $500 per day for attendance by telephone or in person
where in-person attendance is not required at a special, non-regularly
scheduled, board meeting; (c) a fee of $1,000 per day for attendance in person
at an Audit Committee meeting where in-person attendance is required and $500
per day for attendance by telephone or in person where in-person
2
attendance is not required; (d) a fee of $500 per day for attendance in person
or by telephone for a meeting of the dividend committee; and (e) a fee of $500
per day for attendance in person at all other committee meetings on a day on
which no regularly scheduled Board meeting is held in which in-person attendance
is required and $250 per day for attendance by telephone or in person at such
meetings where in-person attendance is not required, plus, in each case,
expenses incurred in attending such meetings. Compensation to the Independent
Board Members is allocated among the Nuveen family of funds based on assets per
fund. The Boards do not anticipate any further change in the compensation
schedule as a result of the board consolidation.
Currently, for all Nuveen Funds overseen, the continuing Independent Board
Members of the Funds receive a $35,000 annual retainer for serving as a Trustee
for all funds affiliated with Nuveen and the Adviser, plus (a) a fee of $1,000
per day for attendance in person or by telephone at all meetings held on a day
on which a regular meeting of the Board is held; (b) a fee of $1,000 per day for
attendance in person or $500 per day for attendance by telephone at all meetings
(other than a meting of the executive committee) held on a day on which no
regular Board meeting is held; and (c) a fee of $200 per day for attendance in
person or by telephone at a meeting of the dividend and valuation committee and
a fee of $100 per day for attendance in person or by telephone at a meeting of
the executive committee, plus, in each case, expenses incurred in attending such
meetings.
Because the total compensation to the Independent Board Members is allocated
among the Nuveen family of funds based on assets per fund, the increase in total
assets overseen by the combined board means that Independent Board Member
compensation as a percentage of an individual Fund's assets is expected to be
lower as a result of the proposal. Moreover, as the size of the combined board
declines over the next two years, the total compensation paid by a Fund to
Independent Board Members is expected to decrease further to the extent fewer
board members will be compensated.
At each Fund's Annual Meeting, twelve (12) Board Members are nominated to be
elected to serve until the next Annual Meeting or until their successors shall
have been duly elected and qualified.
For each Fund, the affirmative vote of a plurality of the shares present and
entitled to vote at the Annual Meeting will be required to elect the Board
Members of that Fund.
It is the intention of the persons named in the enclosed proxy to vote the
shares represented thereby for the election of the nominees listed below unless
the proxy is marked otherwise. Each of the nominees has agreed to serve as a
Board Member of each Fund if elected. However, should any nominee become unable
or unwilling to accept nomination for election, the proxies will be voted for
substitute nominees, if any, designated by that Fund's present Board.
All of the continuing Board Member nominees were last elected to the Board at
the 2002 annual meeting of shareholders.
Other than Mr. Schwertfeger, none of the Board Member nominees have ever been a
director or an employee of Nuveen Investments, Inc. ("Nuveen") or any affiliate.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE
NOMINEES NAMED BELOW.
3
BOARD NOMINEES
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NUMBER OF
PORTFOLIOS
IN FUND OTHER
COMPLEX DIRECTORSHIPS
POSITION(S) TERM OF OFFICE OVERSEEN HELD BY
NAME, ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) BY BOARD BOARD
AND BIRTH DATE FUND TIME SERVED** DURING PAST 5 YEARS MEMBER MEMBER
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Nominees who are not interested
persons of the Funds
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Continuing Board Members
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William E. Bennett Board Member Term: Annual Private Investor; previously 19 N/A
333 West Wacker Drive Length of Service: President and C.E.O., Draper
Chicago, IL 60606 Since 2001 & Kramer, Inc. (1995-1998).
(10/16/46)
Jack B. Evans Board Member Term: Annual President, The Hall-Perrine 19 See Principal
333 West Wacker Drive Length of Service: Foundation (a private Occupation
Chicago, IL 60606 Since 1999 philanthropic corporation); description.
(10/22/48) Director, Alliant Energy;
Director and Vice Chairman
United Fire & Casualty
Company; Director, Federal
Reserve Bank of Chicago;
previously President and
Chief Operating Officer, SCI
Financial Group, Inc. (a
regional financial services
firm).
William L. Kissick Board Member Term: Annual Professor Emeritus, School 19 N/A
333 West Wacker Drive Length of Service: of Medicine and the Wharton
Chicago, IL 60606 Since 1992 School of Management and
(7/29/32) former Chairman, Leonard
Davis Institute of Health
Economics, University of
Pennsylvania; Adjunct
Professor, Health Policy and
Management, Yale University.
Thomas E. Leafstrand Board Member Term: Annual Retired; previously, Vice 19 N/A
333 West Wacker Drive Length of Service: President in charge of
Chicago, IL 60606 Since 1992 Municipal Underwriting,
(11/11/31) Trading, and Dealer Sales at
The Northern Trust Company.
Sheila W. Wellington Board Member Term: Annual President of Catalyst (a 19 N/A
333 West Wacker Drive Length of Service: not-for-profit organization
Chicago, IL 60606 Since 1994 focusing on women's
(2/24/32) leadership development in
business and the
professions).
New Board Members
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Robert P. Bremner Nominee Term: Annual Private Investor and 122 N/A
333 West Wacker Drive Length of Service: Management Consultant.
Chicago, IL 60606 Since 1996
(8/22/40)
Lawrence H. Brown Nominee Term: Annual Retired (August 1989) as 122 N/A
333 West Wacker Drive Length of Service: Senior Vice President of The
Chicago, IL 60606 Since 1993 Northern Trust Company;
(7/29/34) Director of the United Way
of Highland Park-Highwood
(since 2002).
Anne E. Impellizzeri Nominee Term: Annual Retired; formerly, Executive 122 N/A
333 West Wacker Drive Length of Service: Director (1998-2001) of
Chicago, IL 60606 Since 1994 Manitoga/The Russel Wright
(1/26/33) Design Center; prior
thereto, President and Chief
Executive Officer of
Blanton-Peale Institute;
prior thereto, Vice
President, Metropolitan Life
Insurance Co.
4
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NUMBER OF
PORTFOLIOS
IN FUND OTHER
COMPLEX DIRECTORSHIPS
POSITION(S) TERM OF OFFICE OVERSEEN HELD BY
NAME, ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) BY BOARD BOARD
AND BIRTH DATE FUND TIME SERVED** DURING PAST 5 YEARS MEMBER MEMBER
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Peter R. Sawers Nominee Term: Annual Adjunct Professor of 122 N/A
333 West Wacker Drive Length of Service: Business and Economics,
Chicago, IL 60606 Since 1991 University of Dubuque, Iowa;
(4/3/33) formerly (1991-2000) Adjunct
Professor, Lake Forest
Graduate School of
Management, Lake Forest,
Illinois; Director,
Executive Service Corps of
Chicago; prior thereto,
Executive Director, Towers
Perrin Australia, a
management consulting firm;
Chartered Financial Analyst;
Certified Management
Consultant.
William J. Schneider Nominee Term: Annual Senior Partner and Chief 122 N/A
333 West Wacker Drive Length of Service: Operating Officer,
Chicago, IL 60606 Since 1996 Miller-Valentine Group, Vice
(9/24/44) President, Miller-Valentine
Realty, a development and
contract company; Chair,
Miami Valley Hospital;
Chair, Miami Valley Economic
Development Coalition;
formerly, Member, Community
Advisory Board, National
City Bank, Dayton, Ohio; and
Business Advisory Council,
Cleveland Federal Reserve
Bank.
Judith M. Stockdale Nominee Term: Annual Executive Director, Gaylord 122 N/A
333 West Wacker Drive Length of Service: and Dorothy Donnelley
Chicago, IL 60606 Since 1997 Foundation (since 1994);
(12/29/47) prior thereto, Executive
Director, Great Lakes
Protection Fund (from 1990
to 1994).
Nominee who is an interested
person* of the Funds
----------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger Chairman of Term: Annual Chairman and Director (since 141 See Principal
333 West Wacker Drive the Board Length of Service: 1996) of Nuveen Investments, Occupation
Chicago, IL 60606 and Trustee Since 1996 Inc. and Nuveen Investments, description.
(3/28/49) LLC; Director (since 1992)
and Chairman (since 1996) of
Nuveen Advisory Corp. and
Nuveen Institutional
Advisory Corp.; Chairman and
Director (since 1997) of
Nuveen Asset Management,
Inc.; Director (since 1996)
of Institutional Capital
Corporation; Chairman and
Director (since 1999) of
Rittenhouse Asset
Management, Inc.; Chairman
of Nuveen Investments
Advisers Inc. (since 2002).
----------------------------------------------------------------------------------------------------------------------------
* "Interested Person" as defined in the Investment Company Act of 1940, as
amended, by reason of being an officer and director of the Fund's Adviser.
** Length of Service indicates the year in which the individual became a Trustee
or Director of a fund in the Nuveen fund complex.
5
BENEFICIAL OWNERSHIP
The following table lists the dollar range of equity securities beneficially
owned by each Board Member nominee in each Fund and in all Nuveen Funds overseen
by the Board Member nominee as of March 31, 2003:
DOLLAR RANGE OF EQUITY SECURITIES
----------------------------------------------------------------------------------------------------------
BOARD MEMBER SELECT SELECT SELECT CALIFORNIA NEW YORK
NOMINEES PORTFOLIO PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------------------
William E. Bennett $0 $0 $0 $0 $0
Jack B. Evans $0 $0 $0 $0 $0
William L. Kissick $10,001- $10,001- $10,001- $0 $0
$50,000 $50,000 $50,000
Thomas E. Leafstrand $10,001- $10,001- $1- $0 $0
$50,000 $50,000 $10,000
Timothy R. Schwertfeger $0 $0 $0 $0 $0
Sheila W. Wellington $1- $10,001- $10,001- $0 $0
$10,000 $50,000 $50,000
Robert P. Bremner $0 $0 $0 $0 $0
Lawrence H. Brown $0 $0 $0 $0 $0
Anne E. Impellizzeri $0 $0 $0 $0 $0
Peter R. Sawers $0 $0 $0 $0 $0
William J. Schneider $0 $0 $0 $0 $0
Judith M. Stockdale $0 $0 $0 $0 $0
----------------------------------------------------------------------------------------------------------
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN
BY BOARD MEMBER
NOMINEES IN FAMILY OF
INVESTMENT COMPANIES(1)
-------------------------- ---------------------------
BOARD MEMBER
NOMINEES
-------------------------- ---------------------------
William E. Bennett $50,001-$100,000
(3,411 shares)
Jack B. Evans Over $100,000
(15,214 shares)
William L. Kissick $50,001-$100,000
(6,706 shares)
Thomas E. Leafstrand Over $100,000
(34,053 shares)
Timothy R. Schwertfeger Over $100,000
(439,783 shares)
Sheila W. Wellington Over $100,000
(13,466 shares)
Robert P. Bremner $0
(0 shares)
Lawrence H. Brown Over $100,000
(8,256 shares)
Anne E. Impellizzeri $10,001-$50,000
(3,579 shares)
Peter R. Sawers Over $100,000
(12,787 shares)
William J. Schneider Over $100,000
(28,085 shares)
Judith M. Stockdale $10,001-$50,000
(2,711 shares)
--------------------------
(1) The amounts reflect the aggregate dollar range of equity securities and the
number of shares beneficially owned by the Board Member in the Funds and in
all Nuveen funds overseen by each Board Member.
The following table sets forth, for each Board Member nominee and for the Board
Member nominees and officers as a group, the amount of shares beneficially owned
in each Fund as of March 31, 2003. The information as to beneficial ownership is
based on statements furnished by each Board Member nominee and officer.
FUND SHARES OWNED BY BOARD MEMBER NOMINEES AND OFFICERS(1)
---------------------------------------------------------------------------------------------------------------------------------
SELECT SELECT SELECT CALIFORNIA NEW YORK
BOARD MEMBER NOMINEES PORTFOLIO PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------------------
William E. Bennett 0 0 0 0 0
Jack B. Evans 0 0 0 0 0
William L. Kissick 1,500 1,000 1,000 0 0
Thomas E. Leafstrand 3,975 1,800 302 0 0
Timothy R. Schwertfeger 0 0 0 0 0
Sheila W. Wellington 1,000 1,000 2,000 0 0
Robert P. Bremner 0 0 0 0 0
Lawrence H. Brown 0 0 0 0 0
Anne E. Impellizzeri 0 0 0 0 0
Peter R. Sawers 0 0 0 0 0
William J. Schneider 0 0 0 0 0
Judith M. Stockdale 0 0 0 0 0
ALL BOARD MEMBER NOMINEES AND
OFFICERS AS A GROUP 6,475 3,800 3,302 0 0
---------------------------------------------------------------------------------------------------------------------------------
(1) The numbers include share equivalents of certain Nuveen Funds in which the
Board Member is deemed to be invested pursuant to the Deferred Compensation
Plan for Independent Board Members as more fully described below.
On March 31, 2003, continuing Board Members and executive officers as a group
beneficially owned 537,956 common shares of all funds managed by NAC and NIAC
(includes Deferred Units and shares held by the executive officers in
6
Nuveen's 401(k)/profit sharing plan). Each continuing Board Member's individual
beneficial shareholdings of each Fund constitute less than 1% of the outstanding
shares of each Fund. As of March 31, 2003, the continuing Board Members and
executive officers as a group beneficially owned less than 1% of the outstanding
common shares of each Fund. As of May 23, 2003, no shareholder beneficially
owned more than 5% of any class of shares of any Fund.
COMPENSATION
The Board Members affiliated with Nuveen or the Adviser serve without any
compensation from the Funds. The Independent Board Members are paid an annual
retainer and fees and expenses for Board meetings and committee meetings as
described above. The annual retainer, fees and expenses are allocated among the
funds managed by the Adviser on the basis of relative net asset sizes although
Fund management may, in its discretion, establish a minimum amount to be
allocated to each Fund. The Boards of certain Nuveen Funds (the "Participating
Funds") established a Deferred Compensation Plan for Independent Board Members
("Deferred Compensation Plan"). Under the Deferred Compensation Plan,
Independent Board Members of the Participating Funds may defer receipt of all,
or a portion, of the compensation they earn for their services to the
Participating Funds, in lieu of receiving current payments of such compensation.
Any deferred amount is treated as though an equivalent dollar amount had been
invested in shares of one or more eligible Nuveen funds. Each Independent Board
Member, other than Mr. Brown, has elected to defer at least a portion of their
fees. Each of the Funds are Participating Funds under the Deferred Compensation
Plan.
The table below shows, for each continuing Board Member who is not affiliated
with Nuveen or the Adviser, the aggregate compensation (i) paid by each Fund to
each continuing Board Member for its last fiscal year and (ii) paid (including
deferred fees) for service on the boards of the Nuveen open-end and closed-end
Funds managed by NAC ("NAC Funds") and NIAC ("NIAC Funds") for the calendar year
ended 2002. Mr. Schwertfeger, a Board Member who is an interested person of each
Fund, does not receive any compensation from a Fund or any Nuveen funds.
TOTAL COMPENSATION
FROM NUVEEN FUNDS
PAID TO BOARD
AGGREGATE COMPENSATION FROM THE FUNDS MEMBERS
---------------------------------------------------------------------------------------------------------------------------------
SELECT SELECT SELECT CALIFORNIA NEW YORK
CONTINUING BOARD MEMBERS PORTFOLIO(1) PORTFOLIO 2(1) PORTFOLIO 3(1) PORTFOLIO(1) PORTFOLIO(1)
---------------------------------------------------------------------------------------------------------------------------------
James E. Bacon(2) $2,397.70 $2,535.45 $1,828.59 $ 900.74 $554.68 $48,800.00
William E. Bennett 3,222.37 3,408.67 2,458.64 1,210.65 745.33 53,050.00
Jack B. Evans 3,137.45 3,318.26 2,393.38 1,178.67 725.77 49,100.00
William L. Kissick 3,086.80 3,264.79 2,354.61 1,159.64 714.02 49,000.00
Thomas E. Leafstrand 3,448.31 3,648.06 2,631.32 1,295.42 797.40 52,300.00
Sheila W. Wellington 2,868.35 3,031.75 2,186.21 1,080.85 663.74 47,600.00
---------------------------------------------------------------------------------------------------------------------------------
(1) Includes deferred fees. Pursuant to a deferred compensation agreement with
certain of the Funds, deferred amounts are treated as though an equivalent
dollar amount has been invested in shares of one or more eligible Nuveen
Funds. Total deferred fees for the Funds (including the return from the
assumed investment in the eligible Nuveen Funds) payable are:
DEFERRED FEES
----------------------------------------------------------------------------------------------------------------------------
SELECT SELECT SELECT CALIFORNIA NEW YORK
CONTINUING BOARD MEMBERS PORTFOLIO PORTFOLIO 2 PORTFOLIO 3 PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------------------------------------
James E. Bacon $2,397.70 $2,535.45 $1,828.59 $ 900.74 $554.68
William E. Bennett 3,222.37 3,408.67 2,458.64 1,210.65 745.33
Jack B. Evans 1,489.38 1,574.82 1,135.83 559.52 344.59
William L. Kissick 1,727.35 1,823.69 1,315.94 648.87 400.29
Thomas E. Leafstrand 1,597.40 1,688.90 1,218.04 599.99 369.46
Sheila W. Wellington 2,868.35 3,031.75 2,186.21 1,080.85 663.74
----------------------------------------------------------------------------------------------------------------------------
(2) Mr. Bacon is retiring.
Nuveen Investments, Inc. maintains charitable contributions programs to
encourage the active support and involvement of individuals in the civic
activities of their community. These programs include a matching contributions
program and a direct contributions program. The Independent Board Members of the
funds managed by the Adviser are eligible to participate in the charitable
contributions program of Nuveen Investments, Inc. Under the matching program,
Nuveen Investments, Inc. will match the personal contributions of a Board Member
to Section 501(c)(3) organizations up to an aggregate maximum amount of $10,000
during any calendar year. Under its direct (non-matching) program, Nuveen
Investments, Inc. makes contributions to qualifying Section 501(c)(3)
organizations, as approved by the Corporate Contributions Committee of Nuveen
Investments, Inc. The Independent Board Members are also eligible to submit
proposals to the committee requesting that contributions be made under this
program to Section 501(c)(3) organizations identified by the Board Member, in an
aggregate amount not to exceed $5,000 during any calendar year. Any contribution
made by Nuveen Investments, Inc. under the direct program is made solely at the
discretion of the Corporate Contributions Committee.
7
COMMITTEES
The Board has five standing committees: the executive committee, the audit
committee, the nominating and governance committee, the dividend committee and
the valuation committee.
William L. Kissick and Timothy R. Schwertfeger currently serve as members of the
executive committee of the Board of each Fund. The executive committee, which
meets between regular meetings of the Board, is authorized to exercise all of
the powers of the Board; provided that the scope of the powers of the executive
committee, unless otherwise specifically authorized by the full Board, are
limited to: (i) emergency matters where assembly of the full Board is
impracticable (in which case management will take all reasonable steps to
quickly notify each individual Board Member of the actions taken by the
executive committee) or (ii) matters of an administrative or ministerial nature.
The executive committee of each Fund held no meetings during their last fiscal
year.
Timothy R. Schwertfeger, William E. Bennett and Thomas E. Leafstrand are current
members of the dividend committee. The dividend committee is authorized to
declare distributions on the Funds' shares including, but not limited to,
regular and special dividends, capital gains and ordinary income distributions.
The dividend committee of each Fund held four meetings during its last fiscal
year.
James E. Bacon, William E. Bennett and Thomas E. Leafstrand are current members
of the valuation committee for each Fund. The valuation committee oversees the
Fund's Pricing Procedures including, but not limited to, the review and approval
of fair value pricing determinations made by Nuveen's Valuation Group. The
valuation committee of each Fund held no meetings during its last fiscal year.
Each Fund's Board has an audit committee composed of Independent Board Members
and who are "independent" as that term is defined in Section 303.01(B)(2)(a) and
(3) of the New York Stock Exchange's listing standards. The audit committee
monitors the accounting and reporting policies and practices of the Funds, the
quality and integrity of the financial statements of the Funds, compliance by
the Funds with legal and regulatory requirements and the independence and
performance of the external and internal auditors. The audit committee reviews
the work and any recommendations of the Fund's independent auditors. Based on
such review, it is authorized to make recommendations to the Board. A copy of
the Audit Committee Charter is attached to the proxy statement as Appendix A.
The audit committee of each Fund held three meetings during its last fiscal
year.
Nomination of those Board Members who are not "interested persons" of each Fund
is committed to a nominating and governance committee composed of all Board
Members who are not "interested persons" of that Fund. It identifies and
recommends individuals to be nominated for election as non-interested Board
Members. The committee also reviews matters relating to (1) the composition,
duties, recruitment, independence and tenure of Board Members, (2) the selection
and review of committee assignments, and (3) Board Member education, board
meetings and board performance. The nominating and governance committee of each
Fund held three meetings during its last fiscal year. In the event of a vacancy
on the Board, the nominating and governance committee receives suggestions from
various sources as to suitable candidates. Suggestions should be sent in writing
to Lorna Ferguson, Vice President for Board Relations, Nuveen Investments, 333
West Wacker Drive, Chicago, IL 60606. The nominating and governance committee
sets appropriate standards and requirements for nominations for new Board
Members and reserves the right to interview all candidates and to make the final
selection regarding the nomination of any new Board Members.
The Board of each Fund held four regular quarterly meetings and two special
board meetings during its last fiscal year. During the last fiscal year, each
Board Member attended 75% or more of each Fund's Board meetings and the
committee meetings (if a member thereof).
THE OFFICERS
The following table sets forth information as of May 1, 2003 with respect to
each officer, other than Mr. Schwertfeger, who is a Board Member and is included
in the table relating to nominees for the Board. Officers receive no
compensation from
8
the Funds. The officers of each Fund are elected by the Board on an annual basis
to serve until successors are elected and qualified.
-----------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE NUMBER OF PORTFOLIOS
NAME, ADDRESS POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND BIRTHDATE WITH FUND TIME SERVED* DURING PAST 5 YEARS SERVED BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief Term: Annual Managing Director (since 2002), 141
333 West Wacker Drive Administrative Length of Service: Assistant Secretary and
Chicago, IL 60606 Officer Since 1988 Associate General Counsel,
(9/9/56) formerly, Vice President of
Nuveen Investments, LLC;
Managing Director (since 2002),
General Counsel and Assistant
Secretary, formerly, Vice
President of Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.; Managing
Director (since 2002) and
Assistant Secretary and
Associate General Counsel,
formerly Vice President (since
2000) of Nuveen Asset
Management, Inc.; Assistant
Secretary of Nuveen
Investments, Inc. (since 1994);
Assistant Secretary of NWQ
Investment Management Company,
LLC (since 2002); Vice
President and Assistant
Secretary of Nuveen Investments
Advisers Inc. (since 2002);
Managing Director, Associate
General Counsel and Assistant
Secretary of Rittenhouse Asset
Management, Inc. (since May
2003); Chartered Financial
Analyst.
Michael T. Atkinson Vice President and Term: Annual Vice President (since 2002), 141
333 West Wacker Drive Assistant Secretary Length of Service: formerly Assistant Vice
Chicago, IL 60606 Since 2002 President (from 2000),
(2/3/66) previously, Associate of Nuveen
Investments, LLC.
Paul L. Brennan Vice President Term: Annual Vice President (since 2002), 135
333 West Wacker Drive Length of Service: formerly Assistant Vice
Chicago, IL 60606 Since 1997 President (since 1997) of
(11/10/66) Nuveen Advisory Corp.;
Chartered Financial Analyst and
Certified Public Accountant.
Peter H. D'Arrigo Vice President and Term: Annual Vice President of Nuveen 141
333 West Wacker Drive Treasurer Length of Service: Investments, LLC (since 1999);
Chicago, IL 60606 Since 1999 prior thereto, Assistant Vice
(11/28/67) President (from 1997); Vice
President and Treasurer (since
1999) of Nuveen Investments,
Inc.; Vice President and
Treasurer (since 1999) of
Nuveen Advisory Corp. and
Nuveen Institutional Advisory
Corp; Vice President and
Treasurer of Nuveen Asset
Management, Inc. (since 2002)
and of Nuveen Investments
Advisers Inc. (since 2002);
Assistant Treasurer of NWQ
Investments Management Company,
LLC. (since 2002); Chartered
Financial Analyst.
Susan M. DeSanto Vice President Term: Annual Vice President of Nuveen 141
333 West Wacker Drive Length of Service: Advisory Corp. (since 2001);
Chicago, IL 60606 Since 2001 previously, Vice President of
(9/8/54) Van Kampen Investment Advisory
Corp. (from 1998).
9
-----------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE NUMBER OF PORTFOLIOS
NAME, ADDRESS POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND BIRTHDATE WITH FUND TIME SERVED* DURING PAST 5 YEARS SERVED BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President and Term: Annual Vice President (since 2002) and 141
333 West Wacker Drive Secretary Length of Service: Assistant General Counsel
Chicago, IL 60606 Since 1998 (since 1998), formerly
(9/24/64) Assistant Vice President (from
1998) of Nuveen Investments,
LLC; Vice President (since
2002) and Assistant Secretary
(from 1998), formerly Assistant
Vice President of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory Corp.
Lorna C. Ferguson Vice President Term: Annual Vice President of Nuveen 141
333 West Wacker Drive Length of Service: Investments, LLC (since 1998);
Chicago, IL 60606 Since 1998 Vice President (since 1998) of
(10/24/45) Nuveen Advisory Corp. and
Nuveen Institutional Advisory
Corp.
William M. Fitzgerald Vice President Term: Annual Managing Director (since 2001), 141
333 West Wacker Drive Length of Service: formerly Vice President (since
Chicago, IL 60606 Since 1995 1995) of Nuveen Advisory Corp.
(3/2/64) and Nuveen Institutional
Advisory Corp.; Managing
Director of Nuveen Asset
Management, Inc. (since 2001);
Vice President of Nuveen
Investments Advisers Inc.
(since 2002); Chartered
Financial Analyst.
Stephen D. Foy Vice President and Term: Annual Vice President (since 1993) and 141
333 West Wacker Drive Controller Length of Service: Funds Controller (since 1998)
Chicago, IL 60606 Since 1993 of Nuveen Investment, LLC; Vice
(5/31/54) President and Funds Controller
(since 1998) of Nuveen
Investments, Inc.; Certified
Public Accountant.
J. Thomas Futrell Vice President Term: Annual Vice President of Nuveen 135
333 West Wacker Drive Length of Service: Advisory Corp.; Chartered
Chicago, IL 60606 Since 1992 Financial Analyst.
(7/5/55)
Richard A. Huber Vice President Term: Annual Vice President of Nuveen 135
333 West Wacker Drive Length of Service: Institutional Advisory Corp.
Chicago, IL 60606 Since 1997 (since 1998) and Nuveen
(3/26/63) Advisory Corp. (since 1997).
Steven J. Krupa Vice President Term: Annual Vice President of Nuveen 135
333 West Wacker Drive Length of Service: Advisory Corp.
Chicago, IL 60606 Since 1990
(8/21/57)
David J. Lamb Vice President Term: Annual Vice President of Nuveen 141
333 West Wacker Drive Length of Service: Investments, LLC (since 2000);
Chicago, IL 60606 Since 2000 prior thereto, Assistant Vice
(3/22/63) President (from 1999); formerly
Associate of Nuveen
Investments, LLC; Certified
Public Accountant.
Tina M. Lazar Vice President Term: Annual Vice President of Nuveen 141
333 West Wacker Drive Length of Service: Investments, LLC (since 1999);
Chicago, IL 60606 Since 2002 prior thereto, Assistant Vice
(8/27/61) President (since 1993) of
Nuveen Investments, LLC.
10
-----------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE NUMBER OF PORTFOLIOS
NAME, ADDRESS POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND BIRTHDATE WITH FUND TIME SERVED* DURING PAST 5 YEARS SERVED BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President and Term: Annual Vice President, Assistant 141
333 West Wacker Drive Assistant Secretary Length of Service: Secretary and Assistant General
Chicago, IL 60606 Since 1988 Counsel of Nuveen Investments,
(7/27/51) LLC; Vice President and
Assistant Secretary of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory Corp.;
Assistant Secretary of Nuveen
Investments, Inc.; Assistant
Secretary of Nuveen Asset
Management, Inc. (since 1997);
Vice President (since 2000),
Assistant Secretary and
Assistant General Counsel
(since 1998) of Rittenhouse
Asset Management, Inc.; Vice
President and Assistant
Secretary of Nuveen Investments
Advisers Inc. (since 2002);
Assistant Secretary of NWQ
Investment Management Company,
LLC (since 2002).
Edward F. Neild, IV Vice President Term: Annual Managing Director (since 2002), 141
333 West Wacker Drive Length of Service: formerly, Vice President (from
Chicago, IL 60606 Since 1996 1996) of Nuveen Institutional
(7/7/65) Advisory Corp. and Nuveen
Advisory Corp.; Managing
Director of Nuveen Asset
Management, Inc. (since 1999);
Chartered Financial Analyst.
Thomas J. O'Shaughnessy Vice President Term: Annual Vice President (since 2002), 135
333 West Wacker Drive Length of Service: previously, Assistant Vice
Chicago, IL 60606 Since 1998 President (1998) of Nuveen
(9/4/60) Advisory Corp.
Thomas C. Spalding Vice President Term: Annual Vice President of Nuveen 135
333 West Wacker Drive Length of Service: Advisory Corp. and Nuveen
Chicago, IL 60606 Since 1987 Institutional Advisory Corp.;
(7/31/51) Chartered Financial Analyst.
-----------------------------------------------------------------------------------------------------------------------
* Length of Service indicates the year the individual became an officer of a
fund in the Nuveen fund complex.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board is responsible for assisting the Board in
monitoring (1) the quality and integrity of the Fund's financial statements, (2)
each Fund's compliance with regulatory requirements, and (3) the independence
and performance of the Fund's independent and internal auditors. Among other
responsibilities, the Committee reviews, in its oversight capacity, each Fund's
annual financial statements with both management and the independent auditors
and the Committee meets periodically with the independent and internal auditors
to consider their evaluation of the Fund's financial and internal controls. The
Committee also recommends to the Board the selection of each Fund's independent
auditors. The Committee is currently composed of five Board Members and operates
under a written charter adopted and approved by the Board. Each Committee member
is independent as defined by New York Stock Exchange.
The Committee, in discharging its duties, has met with and held discussions with
management and each Fund's independent and internal auditors. The Committee has
reviewed and discussed the audited financial statements with management.
Management has represented to the independent auditors that each Fund's
financial statements were prepared in accordance with generally accepted
accounting principles. The Committee has also discussed with the independent
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61 (Communications with Audit Committees). Each Fund's independent auditors
provided to the Committee the written disclosure required by Independent
Standards Board Standard No. 1 (Independent Discussions with Audit Committees),
and the Committee discussed with representatives of the independent auditor
their firm's independence. As provided in the Audit Committee Charter, it is not
the Committee's responsibility to determine, and the considerations and
discussions referenced above do not ensure, that each Fund's financial
statements are complete and accurate and presented in accordance with generally
accepted accounting principles.
Based on the Committee's review and discussions with management and the
independent auditors, the representations of management and the report of the
independent auditors to the Committee, the Committee has recommended that the
Board include the audited financial statements in each Fund's Annual Report.
11
The members of the Committee are:
James E. Bacon*
William E. Bennett
Jack B. Evans
William L. Kissick
Thomas E. Leafstrand
---------------
* Mr. Bacon is expected to retire from his position as trustee on July 1, 2003.
AUDIT AND RELATED FEES
AUDIT FEES. The aggregate fees billed by Ernst & Young LLP for professional
services for the audit of each Fund's financial statements for its most recently
completed fiscal year were as follows:
------------------------------------------------------------------------------------------------------------------
FINANCIAL INFORMATION
AUDIT SYSTEMS DESIGN AND ALL OTHER
FUND FEES IMPLEMENTATION FEES FEES
------------------------------------------------------------------------------------------------------------------
Select Portfolio $9,605 $0 $ 350
Select Portfolio 2 9,831 0 350
Select Portfolio 3 8,525 0 350
California Portfolio 6,747 0 350
New York Portfolio 6,106 0 350
------------------------------------------------------------------------------------------------------------------
ALL NON-AUDIT FEES. The Audit Committee has generally considered whether the
receipt of non-audit fees by Ernst & Young LLP from the Fund is compatible with
maintaining Ernst & Young LLP's independence.
2. PROPOSED CHANGES TO EACH FUND'S FUNDAMENTAL INVESTMENT POLICIES
The Board has proposed amending each Fund's fundamental investment policies
relating to borrowing and lending in connection with the implementation of a
proposed interfund lending program.
Each Fund's current fundamental investment policy regarding borrowing states:
The Fund may not borrow money, except from banks for temporary or emergency
purposes or for repurchase of its shares, and then only in an amount not
exceeding one-third of the value of the [Fund's] total assets including the
amount borrowed. While any such borrowings exceed 5% of the [Fund's] total
assets, no additional purchases of investment securities will be made.
Each Fund's current fundamental policy regarding lending states:
The Fund may not make loans, other than by entering into repurchase
agreements and through the purchase of Municipal Obligations or temporary
investments in accordance with its investment objective, policies and
limitations.
The Board recommends that shareholders vote to replace these policies with the
following fundamental investment policy governing borrowing and the following
fundamental investment policy regarding lending:
The Fund may not borrow money, except as permitted by the Investment
Company Act of 1940 and exemptive orders granted under the 1940 Act.
The Fund may not make loans except as permitted by the Investment Company
Act of 1940 and exemptive orders granted under the 1940 Act.
In connection with disaster recovery planning and to provide liquidity in the
event that open-end funds in the Nuveen family of funds encounter higher than
normal redemption requests that may follow a national disaster such as the
events of September 11, 2001, the Boards of the Nuveen Funds have determined
that an interfund lending program would allow the Nuveen Funds, including the
Funds, to lend and borrow cash for temporary purposes directly to and from each
other. The proposed new fundamental investment policies will enable each Fund to
participate in this interfund lending program.
Because an interfund lending program raises issues under various sections of the
1940 Act, in order to implement the proposal, all Nuveen Funds, including the
Funds, will file an application for exemption from certain provisions of the
1940 Act with the Securities and Exchange Commission ("SEC"). The application to
the SEC for exemptive relief will not limit interfund lending under the program
to emergency situations and the relief, if and when granted, would allow the
Adviser to set up a more regular program if it and the Board of a Fund
determines that a more regular program would be in the best interests of a fund.
Implementation of the interfund lending program is contingent upon the SEC
granting the exemptive relief.
12
Nuveen's open-end funds are far more likely to experience large net cash
outflows during an emergency situation than the closed-end funds, therefore the
open-end funds will likely be the only funds that would borrow extensively under
the program. However, because the closed-end funds might be able to lend money
at attractive rates under the program, it is proposed that all current and
future Nuveen Funds, both open-end and closed-end, may participate in the
program. Because the interest earned by the lending fund on such loans is
taxable, Nuveen anticipates that funds that invest primarily in municipal
securities would only participate in the program as lenders if the Adviser
believes that it would be in the best interests of the shareholders of such
funds. Funds that invest primarily in securities other than municipal securities
may also utilize the program in non-emergency situations.
Currently, the Nuveen open-end funds can borrow from banks for temporary
purposes and can lend to banks or other entities in the form of repurchase
agreements or investment in other short-term instruments. The proposed program
would reduce the open-end funds' borrowing costs and enhance their ability to
earn higher rates of interest on investment of their short-term cash balances.
The open-end funds would still be free to establish committed lines of credit or
other borrowing arrangements with banks.
It is currently anticipated that the interest rate that will be charged to the
funds on any interfund loan ("Interfund Loan Rate") would be the average of the
"Repo Rate"(1) and the "Bank Loan Rate."(2) The program would be administered by
employees of the Adviser, including representatives of the Funds' Administration
and Financial Analysis, Product Management, Portfolio Operations and Trading
and/or representatives of the Portfolio Management and Research Department who
are not portfolio managers ("Interfund Lending Team"). Under the proposed
program, in an emergency situation, a meeting of the Interfund Lending Team
would be called and the Team would collect data on the uninvested cash and
borrowing requirements of the funds. Once it determines the aggregate amount of
cash available for loans and borrowing demand, the Interfund Lending Team would
allocate loans among borrowing funds with input from portfolio managers.
The Interfund Lending Team would allocate borrowing demand and cash available
for lending among the funds on what the Interfund Lending Team believes to be an
equitable basis, subject to certain administrative procedures applicable to all
funds, such as the time of filing requests to participate, minimum loan lot
sizes, and the need to minimize the number of transactions and associated
administrative costs. To reduce transaction costs, each loan normally would be
allocated in a manner intended to minimize the number of funds necessary to
complete the loan transaction. The method of allocation and related
administrative procedures would be approved by the Board, including a majority
of the Independent Board Members, to ensure both borrowing and lending funds
participate on an equitable basis.
The Adviser would (i) monitor the interest rates charged and other terms and
conditions of the Interfund Loans, (ii) ensure compliance with each fund's
investment policies and limitations, (iii) ensure equitable treatment of each
fund, and (iv) make quarterly reports to the Board concerning any transactions
by the funds under the program and the Interfund Loan Rates. Nuveen would
administer the credit facility as part of its duties under its existing advisory
contract with each fund and would receive no additional fee as compensation for
its services. The actual terms of any Interfund Loan Program in which the Funds
may participate may change from time to time from the description presented here
both as a result of a regulatory action in connection with the granting of the
appropriate regulatory approvals, or as approved by a Board of a Fund.
Although, under the proposed new investment policies, each Fund may borrow and
lend to the full extent permitted by the 1940 Act, currently each Fund only
intends to change its current practices with respect to borrowing and lending
solely to the extent it participates in the proposed interfund lending program.
However, under the proposed new investment policies, each Fund reserves the
right in the future to engage in borrowing and lending to the full extent
permitted by the 1940 Act.
VOTES REQUIRED
Approval of the proposed changes to a Fund's fundamental investment policies
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund. The term "majority of the outstanding voting
securities" as defined in the 1940 Act means the affirmative vote of the lesser
of (1) 67% of the voting securities of the Fund present at the meeting if more
than 50% of the outstanding shares of the Fund are present in person or by proxy
or (2) more than 50% of the outstanding shares of the Fund. Shareholders of each
Fund will vote separately on the proposed changes to each fundamental investment
policy.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED CHANGES
TO EACH FUND'S FUNDAMENTAL INVESTMENT POLICIES.
---------------
(1) The "Repo Rate" for any day would be the highest rate available to the funds
from investing in overnight repurchase agreements with a highly reputable
counterparty.
(2) The "Bank Loan Rate" for any day would be calculated by Nuveen each day an
interfund loan is made according to a formula established by the Board
designed to approximate the lowest interest rate at which bank short-term
loans would be available to the funds. The formula would be based upon a
publicly available rate (e.g., Federal Funds plus 25 basis points) and would
vary with this rate so as to reflect changing bank loan rates. The Board
periodically would review the continuing appropriateness of using the
publicly available rate, as well as the relationship between the Bank Loan
Rate and current bank loan rates that would be available to the funds. The
initial formula and any subsequent modifications to the formula would be
subject to the approval of the Board.
13
APPOINTMENT OF INDEPENDENT AUDITORS
Each Board has appointed Ernst & Young LLP, independent public accountants, as
independent auditors to audit the books and records of each Fund for its fiscal
year. A representative of Ernst & Young LLP will be present at the meeting to
make a statement, if such representative so desires, and to respond to
shareholders' questions. Ernst & Young LLP has informed each Fund that it has no
direct or indirect material financial interest in the Fund, Nuveen, the Adviser
or any other investment company sponsored by Nuveen.
SECTION 16(A) BENEFICIAL INTEREST REPORTING COMPLIANCE
Section 30(h) of the Investment Company Act of 1940, as amended (the "1940 Act")
and Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), require Board Members and officers, the investment adviser, affiliated
persons of the investment adviser and persons who own more than 10% of a
registered class of the Funds' equity securities to file forms reporting their
affiliation with that Fund and reports of ownership and changes in ownership of
that Fund's shares with the Securities and Exchange Commission (the "SEC") and
the New York Stock Exchange. These persons and entities are required by SEC
regulation to furnish the Funds with copies of all Section 16(a) forms they
file. Based on a review of these forms furnished to each Fund, each Fund
believes that the Fund's Board Members and officers, investment adviser and
affiliated persons of the investment adviser have complied with all applicable
Section 16(a) filing requirements during its last fiscal year. To the knowledge
of management of the Funds, no shareholder of a Fund owns more than 10% of a
registered class of a Fund's equity securities.
INFORMATION ABOUT THE ADVISER
The Adviser, located at 333 West Wacker Drive, Chicago, Illinois, serves as
investment adviser and manager for each Fund. The Adviser is a wholly owned
subsidiary of Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois
60606. Nuveen Investments, Inc., is approximately 79% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located at 385 Washington Street, St.
Paul, Minnesota 55102, and is principally engaged in providing
property-liability insurance through subsidiaries.
SHAREHOLDER PROPOSALS
To be considered for presentation at the Annual Meeting of shareholders of any
of the Funds to be held in 2004, a shareholder proposal submitted pursuant to
Rule 14a-8 of the 1934 Act must be received at the offices of that Fund, 333
West Wacker Drive, Chicago, Illinois 60606, not later than February 17, 2004. A
shareholder wishing to provide notice in the manner prescribed by Rule
14a-4(c)(1) of a proposal submitted outside of the process of Rule 14a-8 must
submit such written notice to the Fund not later than May 2, 2004. Timely
submission of a proposal does not mean that such proposal will be included.
EXPENSES OF PROXY SOLICITATION
The cost of preparing, printing and mailing the enclosed proxy, accompanying
notice and proxy statement will be paid by the Funds. All other costs in
connection with the solicitation of proxies, will be paid by the Funds pro rata
based on the number of shareholder accounts. Additional solicitation may be made
by letter, telephone or telegraph by officers or employees of Nuveen or the
Adviser, or by dealers and their representatives. The Funds have engaged D.F.
King & Co., Inc., to assist in the solicitation of proxies at an estimated cost
of $2,500 per fund, plus reasonable expenses.
FISCAL YEAR
The last fiscal year end for each Fund was March 31, 2003.
ANNUAL REPORT DELIVERY
Annual reports were sent to shareholders of record of each Fund following each
Fund's fiscal year end. Each Fund will furnish, without charge, a copy of its
annual report and/or semi-annual report as available upon request. Such written
or oral requests should be directed to such Fund at 333 West Wacker Drive,
Chicago, Illinois 60606 or by calling 1-800-257-8787.
Please note that only one annual report or proxy statement may be delivered to
two or more shareholders of a Fund who share an address, unless the Fund has
received instructions to the contrary. To request a separate copy of an annual
report or proxy statement, or, for instructions as to how to request a separate
copy of such documents or as to how to request a single copy if multiple copies
of such documents are received, shareholders should contact the applicable Fund
at the address and phone number set forth above.
14
GENERAL
Management does not intend to present and does not have reason to believe that
any other items of business will be presented at any Annual Meeting. However, if
other matters are properly presented to the Annual Meeting for a vote, the
proxies will be voted by the persons acting under the proxies upon such matters
in accordance with their judgment of the best interests of the Fund.
A list of shareholders entitled to be present and to vote at each Annual Meeting
will be available at the offices of the Funds, 333 West Wacker Drive, Chicago,
Illinois, for inspection by any shareholder during regular business hours
beginning ten days prior to the date of that Annual Meeting.
Failure of a quorum to be present at any Annual Meeting will necessitate
adjournment and will subject that Fund to additional expense. The persons named
in the enclosed proxy may also move for an adjournment of any Annual Meeting to
permit further solicitation of proxies with respect to any of the proposals if
they determine that adjournment and further solicitation is reasonable and in
the best interests of the shareholders. Under each Fund's By-Laws, an
adjournment of a meeting requires the affirmative vote of a majority of the
shares present in person or represented by proxy at the meeting.
IF YOU CANNOT BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
Jessica R. Droeger
Vice President and Secretary
June 17, 2003
15
APPENDIX A
NUVEEN MANAGEMENT INVESTMENT COMPANIES
AUDIT COMMITTEES CHARTER
Revised May, 2003
ORGANIZATION AND MEMBERSHIP
There shall be a committee of each Board of Directors/Trustees of the Nuveen
Management Investment Companies (the "Funds") to be known as the Audit
Committee. The Audit Committee shall be composed of at least three
Directors/Trustees. Audit Committee members shall be independent of the Funds
and free of any relationship that, in the opinion of the Directors/Trustees,
would interfere with their exercise of independent judgment as a Committee
member. In particular, each member must meet the independence and experience
requirements of the New York Stock Exchange, Section 10A of the Securities
Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission"). Each such member of the
Audit Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements. At least one
such member shall have accounting or related financial management expertise, in
each case as determined by the Directors/Trustees, exercising their business
judgment (this person may also be the Committee's "financial expert"). The Board
shall appoint the members of the Audit Committee, on the recommendation of the
Governance Committee.
STATEMENT OF POLICY
The Audit Committee shall assist the Board in monitoring (1) the accounting and
reporting policies and practices of the Management Investment Companies
(hereafter referred to as "Funds" or individually "Fund"), (2) the quality and
integrity of the financial statements of the Funds, (3) the Funds' compliance
with legal and regulatory requirements and (4) the independent auditors'
qualifications and independence, and the performance of the internal audit
function and independent auditors. In doing so, the Audit Committee shall seek
to maintain free and open means of communication among the Directors/Trustees,
the independent auditors, the internal auditors and the management of Nuveen.
The Audit Committee shall meet periodically with Nuveen management, the Funds'
internal auditor, and the Funds' independent auditors, in separate executive
sessions.
The Audit Committee shall have the authority and resources in its discretion to
retain special legal, accounting or other consultants to advise the Committee.
The Audit Committee may request any officer or employee of Nuveen Investments,
Inc. (or its affiliates) or the Funds' independent auditors or outside counsel
to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee. The Funds' independent auditors and internal
auditors shall have unrestricted accessibility at any time to Committee members.
RESPONSIBILITIES
Fund management has the primary responsibility to establish and maintain systems
for accounting, reporting and internal control.
The independent auditors have the primary responsibility to plan and implement
an audit, with proper consideration given to the accounting, reporting and
internal controls. The independent auditors are ultimately accountable to the
Board and Audit Committee. It is the ultimate responsibility of the Audit
Committee to select, retain, evaluate and replace the independent auditors and
to determine their compensation, subject to ratification of the Board, if
required.
In carrying out its responsibilities the Audit Committee believes its policies
and procedures should remain flexible, in order to react to changing conditions
and requirements applicable to the Funds.
The Audit Committee is responsible for the following:
Fund Financial Statements:
1. Reviewing the annual audited financial statements with Fund
management and the independent auditors including major issues
regarding accounting and auditing principles and practices, and the
Funds' disclosures in its periodic reports under "Management's
Discussion and Analysis."
2. Requiring the independent auditors to deliver to the Chairman of
the Committee a timely report on any issues relating to the
significant accounting policies, management judgments and
accounting estimates or other matters that would need to be
communicated under Statement on Auditing Standards (SAS) No. 90,
Audit Committee Communications (which amended SAS No. 61,
Communication with Audit Committees), that arise during the
auditors' review of the Funds' financial statements, which
information the Chairman shall further communicate to the other
members of the Committee, as deemed necessary or appropriate in the
Chairman's judgment.
A-1
3. Discussing with management the Funds' press releases regarding
dividends, as well as financial information and guidance provided
to analysts and rating agencies. This discussion may be done
generally, consisting of discussing the types of information to be
disclosed and the types of presentations to be made. The Chairman
of the Audit Committee shall be authorized to have these
discussions with management on behalf of the Audit Committee.
4. Discussing with management and the independent auditors significant
financial reporting issues and judgments made in connection with
the preparation of the Funds' financial statements, including any
significant changes in the Funds' selection or application of
accounting principles and any major issues as to the adequacy of
the Funds' internal controls and any special audit steps adopted in
light of control deficiencies.
5. Discussing with management and the independent auditors the effect
of regulatory and accounting initiatives on the Funds' financial
statements.
6. Reviewing and discussing reports from the independent auditors
regarding (a) all critical accounting policies and practices to be
used; (b) all alternative treatments of financial information
within generally accepted accounting principles that have been
discussed with management, ramifications of the use of such
alternative treatments and disclosures, and the treatment preferred
by the independent auditors; and (c) other material written
communications between the independent auditors and management,
such as any management letter or schedule of unadjusted
differences.
7. Discussing with management the Funds' major financial risk
exposures and the steps management has taken to monitor and control
these exposures, including the Funds' risk assessment and risk
management policies.
8. Reviewing disclosures made to the Audit Committee by the Funds'
principal executive officer and principal financial officer during
their certification process for the Funds' periodic reports about
any significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving
management or other employees who have a significant role in the
Funds' internal controls.
With respect to the independent auditors:
1. Appointing or replacing the independent auditors, subject, if
applicable, only to Board and shareholder ratification; and
compensating and overseeing the work of the independent auditor
(including the resolution of disagreements between management and
the independent auditor regarding financial reporting), who shall
report directly to the Audit Committee, for the purpose of
preparing or issuing an audit report or related work.
2. Meeting with the independent auditors and Fund management to review
the scope, fees, audit plans and staffing for the audit, for the
current year. At the conclusion of the audit, reviewing such audit
results, including the independent auditors' evaluation of the
Funds' financial and internal controls, any comments or
recommendations of the independent auditors, any audit problems or
difficulties and management's response, any significant changes
required from the originally planned audit programs and any
adjustments to such statements recommended by the auditors.
3. Pre-approving all audit services and permitted non-audit services
(including the fees and terms thereof) to be performed for the
Funds by their independent auditors, subject to the de minimis
exceptions for non-audit services described in Section 10A of the
Exchange Act that the Audit Committee approves prior to the
completion of the audit. The Chairman of the Audit Committee shall
be authorized to give pre-approvals of such non-audit services on
behalf of the Audit Committee.
4. Obtaining and reviewing a report from the independent auditors at
least annually (including a formal written statement delineating
all relationships between the auditors and the Funds) regarding (a)
the independent auditor's internal quality-control procedures; (b)
any material issues raised by the most recent internal quality-
control review, or peer review, of the firm, or by an inquiry or
investigation by governmental or professional authorities within
the preceding five years, respecting one or more independent audits
carried out by the firm; (c) any steps taken to deal with any such
issues; and (d) all relationships between the independent auditor
and the Funds and their affiliates; and evaluating the
qualifications, performance and independence of the independent
auditor, including their membership in the SEC practice section of
the AICPA and their compliance with all applicable requirements for
independence and peer review, and a review and evaluation of the
lead partner, taking into account the opinions of management and
the internal auditors, and discussing such reports with the
independent auditors. The Audit Committee shall present its
conclusions with respect to the independent auditor to the Board.
5. Reviewing any reports from the independent auditors mandated by
Section 10A(b) of the Exchange Act regarding any illegal act
detected by the independent auditor (whether or not perceived to
have a material
A-2
effect on the Funds' financial statements) and obtaining from the
independent auditors any information about illegal acts in accordance
with Section 10A(b).
6. Ensuring the rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit partner
responsible for reviewing the audit as required by law, and further
considering the rotation of the independent auditor firm itself.
7. Recommending to the Board of Directors policies for the Funds' or
the Adviser's hiring of employees or former employees of the
independent auditor who participated in the audit of the Funds.
With respect to any internal auditor:
1. Reviewing the internal audit function as it relates to the Funds
including the proposed programs for the coming year. It is not the
obligation or responsibility of the Audit Committee to confirm the
independence of any Nuveen internal auditors performing services
relating to the Funds or to approve any termination or replacement of
the Nuveen Manager of Internal Audit.
2. Receiving a summary of findings from any completed internal audits
pertaining to the Funds and a progress report on the proposed
internal audit plan for the Funds, with explanations for significant
deviations from the original plan.
Other responsibilities:
1. Reviewing with the Funds' and the Adviser's counsel legal matters
that may have a material impact on the Fund's financial statements
or compliance policies.
2. Receiving and reviewing periodic or special reports issued on
exposure/controls, irregularities and control failures related to
the Funds.
3. Reviewing with the independent auditors, with any internal auditor
and with Fund management, the adequacy and effectiveness of the
accounting and financial controls of the Funds, and eliciting any
recommendations for the improvement of internal control procedures
or particular areas where new or more detailed controls or
procedures are desirable. Particular emphasis should be given to
the adequacy of such internal controls to expose payments,
transactions or procedures that might be deemed illegal or
otherwise improper.
4. Reviewing the reports of examinations by regulatory authorities.
5. Discussing with management and the independent auditor any
correspondence with regulators or governmental agencies that raises
material issues regarding the Funds' financial statements or
accounting policies.
6. Obtaining reports from management with respect to the Funds'
policies and procedures regarding compliance with applicable laws
and regulations.
7. Reporting to the Directors/Trustees on the results of the
activities of the Committee.
8. Performing any special reviews, investigations or oversight
responsibilities requested by the Directors/ Trustees.
9. Preparing any report required by the rules of the SEC to be
included in a proxy statement for a fund.
10. Reviewing and reassessing annually the adequacy of this charter
and recommending to the Board of Directors/Trustees approval of
any proposed changes deemed necessary or advisable by the
Committee.
Although the Audit Committee shall have the authority and responsibilities set
forth in this Charter, it is not the responsibility of the Audit Committee to
plan or conduct audits or to determine that the Funds' financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. That is the responsibility of management and the independent
auditors. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditors or to ensure compliance with laws and regulations.
A-3
[NUVEEN INVESTMENTS LOGO]
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 257-8787
www.nuveen.com
SELECT0703
(NUVEEN LOGO)
NUVEEN
INVESTMENTS
Nuveen Investments o 333 West Wacker Dr. o Chicago
www.nuveen.com
Template for Closed-End Funds
NIAC
3 EASY WAYS TO VOTE YOUR PROXY
1. Automated Touch Tone Voting: Call toll-free 1-800-690-6903 and use the
control number shown.
2. On the internet at www.proxyweb.com, enter the control number shown
and follow the simple instructions.
3. Sign, Date and Return this proxy card using the enclosed postage-paid
envelope, to Proxy Tabulator, PO Box 9122, Hingham, MA 02043.
**** CONTROL NUMBER: 999 999 999 999 98 ****
THIS PROXY IS SOLICITED BY THE BOARD OF [FUND NAME]
FOR A ANNUAL MEETING OF SHAREHOLDERS, JULY 28, 2003.
The Annual Meeting of shareholders will be held Monday, July 28, 2003 at 10:30
a.m. Central Time, in the Sixth floor auditorium of The Northern Trust Company,
50 South LaSalle Street, Chicago, Illinois. At this meeting, you will be asked
to vote on the proposal described in the proxy statement attached. The
undersigned hereby appoints Timothy R. Schwertfeger, Jessica R. Droeger and
Gifford R. Zimmerman, and each of them, with full power of substitution, proxies
for the undersigned, to represent and vote the shares of the undersigned at the
Annual Meeting of shareholders to be held on July 28, 2003 or any adjournment or
adjournments thereof.
WHETHER OR NOT YOU PLAN TO JOIN US AT THE MEETING, PLEASE COMPLETE, DATE AND
SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE
WILL BE COUNTED. AS AN ALTERNATIVE, PLEASE CONSIDER VOTING BY TELEPHONE (800)
690-6903 OR OVER THE INTERNET (www.proxyweb.com).
Date:
---------------------------
SIGN HERE EXACTLY AS NAME(S) APPEAR(S) ON
LEFT. (Please sign in Box)
------------------------------------------
------------------------------------------
NOTE: PLEASE SIGN YOUR NAME EXACTLY AS IT
APPEARS ON THIS PROXY. IF SHARES ARE HELD
JOINTLY, EACH HOLDER MUST SIGN THE PROXY,
IF YOU ARE SIGNING ON BEHALF OF AN ESTATE,
TRUST, OR CORPORATION, PLEASE STATE YOUR
TITLE OR CAPACITY.
[SELECT]
Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]
PLEASE DO NOT USE FINE POINT PENS.
1. Election of Directors:
(01) Timothy R. Schwertfeger (07) Judith M. Stockdale FOR WITHHOLD
(02) Robert P. Bremner (08) William E. Bennett NOMINEES AUTHORITY
(03) Lawrence H. Brown (09) Jack B. Evans listed at left to vote for
(04) Anne E. Impellizzeri (10) William L. Kissick (except as all Nominees
(05) Peter R. Sawers (11) Thomas E. Leafstrand marked to listed at left
(06) William J. Schneider (12) Shelia W. Wellington the contrary)
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write
the number(s) of the nominee(s) on the line provided below.)
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a change to a fundamental Investment restriction with respect to [ ] [ ] [ ]
lending.
3. To approve a change to a fundamental Investment restriction with respect to [ ] [ ] [ ]
borrowing.
[SELECT]