UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of (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 Section 240.14A-11(c) or Section 240.14a-12
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND (NFM)
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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)(4) 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.
[ ] 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 FUND SHAREHOLDERS
JUNE 21, 2005
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the issues to be voted on.
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. Pursuant to an investment management agreement between your Fund and Nuveen
Asset Management ("NAM"), NAM has served as your Fund's investment adviser
and has been responsible for the overall investment strategy of your Fund.
NAM is a wholly-owned subsidiary of Nuveen Investments, Inc. ("Nuveen").
Nuveen is a publicly traded company and, until recently, was a
majority-owned subsidiary of The St. Paul Travelers Companies, Inc. ("St.
Paul Travelers").
As part of St. Paul Travelers' previously announced three-part program to
sell its entire equity interest in Nuveen (the "Sale"), St. Paul Travelers
sold 39.3 million shares of Nuveen through a secondary public offering on
April 12, 2005. Nuveen also repurchased $600 million of its shares from St.
Paul Travelers. The repurchase of these shares is being completed through
two steps--a $200 million repurchase that closed on April 12, 2005, and a
$400 million forward purchase (plus interest) that will settle later this
year. Finally, St. Paul Travelers also entered into an agreement with two
other parties to sell approximately 12 million common shares of Nuveen for
settlement later this year. After completion of the Sale, Nuveen will emerge
as a fully independent public company.
Upon completion of the Sale, the investment management agreement between
your Fund and NAM may be terminated. In order for NAM to continue to serve
as investment adviser after the completion of the Sale, the shareholders of
your Fund must approve a new investment management agreement. The enclosed
Proxy Statement gives you additional information on the proposed new
investment management agreement, as well as certain other matters. The Board
of Directors/Trustees of each Fund (the "Board," and each Director or
Trustee, a "Board Member"), including those Board Members who are not
affiliated with NAM, unanimously recommend that you vote FOR the approval of
the new investment management agreement for your Fund.
Please refer to the Proxy Statement for a detailed explanation of the items
you are being asked to vote on.
Q. WHY IS A VOTE ON THE PROPOSED NEW INVESTMENT MANAGEMENT AGREEMENT REQUIRED?
A. The completion of the Sale could be deemed to be an "assignment," as that
term is defined in the Investment Company Act of 1940 ("1940 Act"), of the
investment management agreement between each Fund and NAM. As required by
the 1940 Act, under its terms, each investment management agreement would
automatically terminate in the event of its assignment. As a result,
shareholder approval of a new investment management agreement will permit
NAM to continue to serve your Fund.
Q. WHAT WILL HAPPEN IF SHAREHOLDERS DO NOT APPROVE THE NEW INVESTMENT
MANAGEMENT AGREEMENT?
A. If the new investment management agreement is not approved, your Fund's
Board will take such actions as it deems to be in the best interests of your
Fund. This is discussed in more detail in the Proxy Statement.
Q. HOW WILL THE SALE AFFECT ME AS A FUND SHAREHOLDER?
A. Your investment in your Fund will not change as a result of the Sale. You
will still own the same shares in the Fund, and the value of your investment
will not change as a result of the Sale. The new investment management
agreement, if approved by shareholders, will still be with NAM and the terms
of the new investment management agreement are substantially identical to
the terms of the original investment management agreement. In addition, the
portfolio managers of your Fund will not change as a result of the new
investment management agreement.
Q. WILL THE INVESTMENT MANAGEMENT FEE RATES BE THE SAME UPON THE APPROVAL OF
THE NEW INVESTMENT MANAGEMENT AGREEMENT?
A. Yes, the investment management fee rates will remain the same.
Q. HOW DO THE BOARD MEMBERS SUGGEST THAT I VOTE IN CONNECTION WITH THE NEW
INVESTMENT MANAGEMENT AGREEMENT?
A. After careful consideration, the Board of your Fund unanimously recommends
that you vote "FOR" the approval of the new investment management agreement.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Your vote is needed to ensure that the proposal can be acted upon.
Additionally, your immediate response will help save on the costs of any
future solicitations for these shareholder votes. 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 proposal or
how to vote your shares, please call your financial advisor. Alternatively,
you may call Nuveen at (800) 257-8787 weekdays from 8:00 a.m. to 6:00 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. Alternatively, you may
vote by telephone by calling the toll-free number on the proxy card or by
computer by going to the Internet address provided on the proxy card and
following the instructions, using your proxy card as a guide.
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 proposal and to encourage you to
vote.
<Table>
NOTICE OF SPECIAL MEETING 333 West Wacker Drive
OF SHAREHOLDERS Chicago, Illinois 60606
JULY 26, 2005 (800) 257-8787
</Table>
JUNE 21, 2005
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND (NFZ)
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NKR)
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NXE)
NUVEEN ARIZONA PREMIUM INCOME MUNICIPAL FUND, INC. (NAZ)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NAC)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NVX)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NZH)
NUVEEN CALIFORNIA INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQC)
NUVEEN CALIFORNIA MUNICIPAL MARKET OPPORTUNITY FUND, INC. (NCO)
NUVEEN CALIFORNIA MUNICIPAL VALUE FUND, INC. (NCA)
NUVEEN CALIFORNIA PERFORMANCE PLUS MUNICIPAL FUND, INC. (NCP)
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU)
NUVEEN CALIFORNIA QUALITY INCOME MUNICIPAL FUND, INC. (NUC)
NUVEEN CALIFORNIA SELECT QUALITY MUNICIPAL FUND, INC. (NVC)
NUVEEN INSURED CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NKL)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL)
NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND (NKX)
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND (NFC)
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NGK)
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NGO)
NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND (NTC)
NUVEEN FLORIDA INVESTMENT QUALITY MUNICIPAL FUND (NQF)
NUVEEN FLORIDA QUALITY INCOME MUNICIPAL FUND (NUF)
NUVEEN INSURED FLORIDA PREMIUM INCOME MUNICIPAL FUND (NFL)
NUVEEN INSURED FLORIDA TAX-FREE ADVANTAGE MUNICIPAL FUND (NWF)
NUVEEN GEORGIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NZX)
NUVEEN GEORGIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NKG)
NUVEEN GEORGIA PREMIUM INCOME MUNICIPAL FUND (NPG)
NUVEEN MASSACHUSETTS DIVIDEND ADVANTAGE MUNICIPAL FUND (NMB)
NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND (NMT)
NUVEEN INSURED MASSACHUSETTS TAX-FREE ADVANTAGE MUNICIPAL FUND (NGX)
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND (NFM)
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NZR)
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NWI)
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND (NMY)
NUVEEN MICHIGAN DIVIDEND ADVANTAGE MUNICIPAL FUND (NZW)
NUVEEN MICHIGAN PREMIUM INCOME MUNICIPAL FUND, INC. (NMP)
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC. (NUM)
NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND (NOM)
NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND (NXJ)
NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NUJ)
NUVEEN NEW JERSEY INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQJ)
NUVEEN NEW JERSEY PREMIUM INCOME MUNICIPAL FUND, INC. (NNJ)
NUVEEN NEW YORK DIVIDEND ADVANTAGE MUNICIPAL FUND (NAN)
NUVEEN NEW YORK DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NXK)
NUVEEN NEW YORK INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQN)
NUVEEN NEW YORK MUNICIPAL VALUE FUND, INC. (NNY)
NUVEEN NEW YORK PERFORMANCE PLUS MUNICIPAL FUND, INC. (NNP)
NUVEEN NEW YORK QUALITY INCOME MUNICIPAL FUND, INC. (NUN)
NUVEEN NEW YORK SELECT QUALITY MUNICIPAL FUND, INC. (NVN)
NUVEEN INSURED NEW YORK DIVIDEND ADVANTAGE MUNICIPAL FUND (NKO)
NUVEEN INSURED NEW YORK PREMIUM INCOME MUNICIPAL FUND, INC. (NNF)
NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND (NRK)
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND (NRB)
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NNO)
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NII)
NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND (NNC)
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND (NXI)
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NBJ)
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NVJ)
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC. (NUO)
NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NXM)
NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NVY)
NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQP)
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2 (NPY)
NUVEEN TEXAS QUALITY INCOME MUNICIPAL FUND (NTX)
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND (NPV)
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NGB)
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NNB)
TO THE SHAREHOLDERS OF THE ABOVE FUNDS:
Notice is hereby given that a Special Meeting of Shareholders (the "Meeting") of
Nuveen Arizona Dividend Advantage Municipal Fund, Nuveen Arizona Dividend
Advantage Municipal Fund 2, Nuveen Arizona Dividend Advantage Municipal Fund 3,
Nuveen California Dividend Advantage Municipal Fund, Nuveen California Dividend
Advantage Municipal Fund 2, Nuveen California Dividend Advantage Municipal Fund
3, Nuveen California Premium Income Municipal Fund, Nuveen Insured California
Dividend Advantage Municipal Fund, Nuveen Insured California Tax-Free Advantage
Municipal Fund, Nuveen Connecticut Dividend Advantage Municipal Fund, Nuveen
Connecticut Dividend Advantage Municipal Fund 2, Nuveen
Connecticut Dividend Advantage Municipal Fund 3, Nuveen Connecticut Premium
Income Municipal Fund, Nuveen Florida Investment Quality Municipal Fund, Nuveen
Florida Quality Income Municipal Fund, Nuveen Insured Florida Premium Income
Municipal Fund, Nuveen Insured Florida Tax-Free Advantage Municipal Fund, Nuveen
Georgia Dividend Advantage Municipal Fund, Nuveen Georgia Dividend Advantage
Municipal Fund 2, Nuveen Georgia Premium Income Municipal Fund, Nuveen
Massachusetts Dividend Advantage Municipal Fund, Nuveen Massachusetts Premium
Income Municipal Fund, Nuveen Insured Massachusetts Tax-Free Advantage Municipal
Fund, Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland
Dividend Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage
Municipal Fund 3, Nuveen Maryland Premium Income Municipal Fund, Nuveen Michigan
Dividend Advantage Municipal Fund, Nuveen Missouri Premium Income Municipal
Fund, Nuveen New Jersey Dividend Advantage Municipal Fund, Nuveen New Jersey
Dividend Advantage Municipal Fund 2, Nuveen New York Dividend Advantage
Municipal Fund, Nuveen New York Dividend Advantage Municipal Fund 2, Nuveen
Insured New York Dividend Advantage Municipal Fund, Nuveen Insured New York
Tax-Free Advantage Municipal Fund, Nuveen North Carolina Dividend Advantage
Municipal Fund, Nuveen North Carolina Dividend Advantage Municipal Fund 2,
Nuveen North Carolina Dividend Advantage Municipal Fund 3, Nuveen North Carolina
Premium Income Municipal Fund, Nuveen Ohio Dividend Advantage Municipal Fund,
Nuveen Ohio Dividend Advantage Municipal Fund 2, Nuveen Ohio Dividend Advantage
Municipal Fund 3, Nuveen Pennsylvania Dividend Advantage Municipal Fund, Nuveen
Pennsylvania Dividend Advantage Municipal Fund 2, Nuveen Pennsylvania Premium
Income Municipal Fund 2, Nuveen Texas Quality Income Municipal Fund, Nuveen
Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend Advantage
Municipal Fund, and Nuveen Virginia Dividend Advantage Municipal Fund 2, each a
Massachusetts business trust, and Nuveen Arizona Premium Income Municipal Fund,
Inc., Nuveen California Investment Quality Municipal Fund, Inc., Nuveen
California Municipal Market Opportunity Fund, Inc., Nuveen California Municipal
Value Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc.,
Nuveen California Quality Income Municipal Fund, Inc., Nuveen California Select
Quality Municipal Fund, Inc., Nuveen Insured California Premium Income Municipal
Fund, Inc., Nuveen Insured California Premium Income Municipal Fund 2, Inc.,
Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen Michigan Quality
Income Municipal Fund, Inc., Nuveen New Jersey Investment Quality Municipal
Fund, Inc., Nuveen New Jersey Premium Income Fund, Inc., Nuveen New York
Investment Quality Municipal Fund, Inc., Nuveen New York Municipal Value Fund,
Inc., Nuveen New York Performance Plus Municipal Fund, Inc., Nuveen New York
Quality Income Municipal Fund, Inc., Nuveen New York Select Quality Municipal
Fund, Inc., Nuveen Insured New York Premium Income Municipal Fund, Inc., Nuveen
Ohio Quality Income Municipal Fund, Inc., Nuveen Pennsylvania Investment Quality
Municipal Fund, Inc., each a Minnesota corporation, (individually, a "Fund" and
collectively, the "Funds") will be held (along with the meeting of shareholders
of several other Nuveen funds) in the Assembly Room of The Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois 60675, on Tuesday, July 26,
2005, 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 Meeting:
MATTERS TO BE VOTED ON BY SHAREHOLDERS:
1. To approve a new investment management agreement between each Fund and Nuveen
Asset Management ("NAM"), each Fund's investment adviser.
2. To transact such other business as may properly come before the Meeting.
Shareholders of record at the close of business on May 31, 2005 are entitled to
notice of and to vote at the Meeting.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IN ORDER TO AVOID
DELAY AND ADDITIONAL EXPENSE, AND TO ASSURE THAT YOUR SHARES ARE REPRESENTED,
PLEASE VOTE AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER OR NOT YOU PLAN TO
ATTEND THE 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 AND FOLLOW THE RECORDED
INSTRUCTIONS, USING YOUR PROXY CARD AS A GUIDE. TO VOTE OVER THE INTERNET, GO TO
THE INTERNET ADDRESS PROVIDED ON YOUR PROXY CARD AND FOLLOW THE INSTRUCTIONS,
USING YOUR PROXY CARD AS A GUIDE.
Jessica R. Droeger
Vice President and Secretary
<Table>
JOINT PROXY STATEMENT 333 West Wacker Drive
Chicago, Illinois 60606
(800) 257-8787
</Table>
JUNE 21, 2005
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND (NFZ)
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NKR)
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NXE)
NUVEEN ARIZONA PREMIUM INCOME MUNICIPAL FUND, INC. (NAZ)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NAC)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NVX)
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NZH)
NUVEEN CALIFORNIA INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQC)
NUVEEN CALIFORNIA MUNICIPAL MARKET OPPORTUNITY FUND, INC. (NCO)
NUVEEN CALIFORNIA MUNICIPAL VALUE FUND, INC. (NCA)
NUVEEN CALIFORNIA PERFORMANCE PLUS MUNICIPAL FUND, INC. (NCP)
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU)
NUVEEN CALIFORNIA QUALITY INCOME MUNICIPAL FUND, INC. (NUC)
NUVEEN CALIFORNIA SELECT QUALITY MUNICIPAL FUND, INC. (NVC)
NUVEEN INSURED CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NKL)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL)
NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND (NKX)
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND (NFC)
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NGK)
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NGO)
NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND (NTC)
NUVEEN FLORIDA INVESTMENT QUALITY MUNICIPAL FUND (NQF)
NUVEEN FLORIDA QUALITY INCOME MUNICIPAL FUND (NUF)
NUVEEN INSURED FLORIDA PREMIUM INCOME MUNICIPAL FUND (NFL)
NUVEEN INSURED FLORIDA TAX-FREE ADVANTAGE MUNICIPAL FUND (NWF)
NUVEEN GEORGIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NZX)
NUVEEN GEORGIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NKG)
NUVEEN GEORGIA PREMIUM INCOME MUNICIPAL FUND (NPG)
NUVEEN MASSACHUSETTS DIVIDEND ADVANTAGE MUNICIPAL FUND (NMB)
NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND (NMT)
NUVEEN INSURED MASSACHUSETTS TAX-FREE ADVANTAGE MUNICIPAL FUND (NGX)
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND (NFM)
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NZR)
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NWI)
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND (NMY)
NUVEEN MICHIGAN DIVIDEND ADVANTAGE MUNICIPAL FUND (NZW)
NUVEEN MICHIGAN PREMIUM INCOME MUNICIPAL FUND, INC. (NMP)
1
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC. (NUM)
NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND (NOM)
NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND (NXJ)
NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NUJ)
NUVEEN NEW JERSEY INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQJ)
NUVEEN NEW JERSEY PREMIUM INCOME MUNICIPAL FUND, INC. (NNJ)
NUVEEN NEW YORK DIVIDEND ADVANTAGE MUNICIPAL FUND (NAN)
NUVEEN NEW YORK DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NXK)
NUVEEN NEW YORK INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQN)
NUVEEN NEW YORK MUNICIPAL VALUE FUND, INC. (NNY)
NUVEEN NEW YORK PERFORMANCE PLUS MUNICIPAL FUND, INC. (NNP)
NUVEEN NEW YORK QUALITY INCOME MUNICIPAL FUND, INC. (NUN)
NUVEEN NEW YORK SELECT QUALITY MUNICIPAL FUND, INC. (NVN)
NUVEEN INSURED NEW YORK DIVIDEND ADVANTAGE MUNICIPAL FUND (NKO)
NUVEEN INSURED NEW YORK PREMIUM INCOME MUNICIPAL FUND, INC. (NNF)
NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND (NRK)
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND (NRB)
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NNO)
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NII)
NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND (NNC)
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND (NXI)
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NBJ)
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NVJ)
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC. (NUO)
NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NXM)
NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NVY)
NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND, INC. (NQP)
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2 (NPY)
NUVEEN TEXAS QUALITY INCOME MUNICIPAL FUND (NTX)
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND (NPV)
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND (NGB)
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 (NNB)
GENERAL INFORMATION
This Joint Proxy Statement is furnished in connection with the solicitation by
the Board of Directors/Trustees (each a "Board" and collectively, the "Boards,"
and each Director or Trustee a "Board Member" and collectively, the "Board
Members") of Nuveen Arizona Dividend Advantage Municipal Fund ("Arizona Dividend
Advantage"), Nuveen Arizona Dividend Advantage Municipal Fund 2 ("Arizona
Dividend Advantage 2"), Nuveen Arizona Dividend Advantage Municipal Fund 3
("Arizona Dividend Advantage 3"), Nuveen California Dividend Advantage Municipal
Fund ("California Dividend Advantage"), Nuveen California Dividend Advantage
Municipal Fund 2 ("California Dividend Advantage 2"), Nuveen California Dividend
Advantage Municipal Fund 3 ("California Dividend Advantage 3"), Nuveen
California Premium Income Municipal Fund ("California Premium Income"), Nuveen
Insured California
2
Dividend Advantage Municipal Fund ("Insured California Dividend Advantage"),
Nuveen Insured California Tax-Free Advantage Municipal Fund ("Insured California
Tax-Free Advantage"), Nuveen Connecticut Dividend Advantage Municipal Fund
("Connecticut Dividend Advantage"), Nuveen Connecticut Dividend Advantage
Municipal Fund 2 ("Connecticut Dividend Advantage 2"), Nuveen Connecticut
Dividend Advantage Municipal Fund 3 ("Connecticut Dividend Advantage 3"), Nuveen
Connecticut Premium Income Municipal Fund ("Connecticut Premium Income"), Nuveen
Florida Investment Quality Municipal Fund ("Florida Investment Quality"), Nuveen
Florida Quality Income Municipal Fund ("Florida Quality"), Nuveen Insured
Florida Premium Income Municipal Fund ("Insured Florida Premium Income"), Nuveen
Insured Florida Tax-Free Advantage Municipal Fund ("Insured Florida Tax-Free
Advantage"), Nuveen Georgia Dividend Advantage Municipal Fund ("Georgia Dividend
Advantage"), Nuveen Georgia Dividend Advantage Municipal Fund 2 ("Georgia
Dividend Advantage 2"), Nuveen Georgia Premium Income Municipal Fund ("Georgia
Premium Income"), Nuveen Massachusetts Dividend Advantage Municipal Fund
("Massachusetts Dividend Advantage"), Nuveen Massachusetts Premium Income
Municipal Fund ("Massachusetts Premium Income"), Nuveen Insured Massachusetts
Tax-Free Advantage Municipal Fund ("Insured Massachusetts Tax-Free Advantaged"),
Nuveen Maryland Dividend Advantage Municipal Fund ("Maryland Dividend
Advantage"), Nuveen Maryland Dividend Advantage Municipal Fund 2 ("Maryland
Dividend Advantage 2"), Nuveen Maryland Dividend Advantage Municipal Fund 3
("Maryland Dividend Advantage 3"), Nuveen Maryland Premium Income Municipal Fund
("Maryland Premium Income"), Nuveen Michigan Dividend Advantage Municipal Fund
("Michigan Dividend Advantage"), Nuveen Missouri Premium Income Municipal Fund
("Missouri Premium Income"), Nuveen New Jersey Dividend Advantage Municipal Fund
("New Jersey Dividend Advantage"), Nuveen New Jersey Dividend Advantage
Municipal Fund 2 ("New Jersey Dividend Advantage 2"), Nuveen New York Dividend
Advantage Municipal Fund ("New York Dividend Advantage"), Nuveen New York
Dividend Advantage Municipal Fund 2 ("New York Dividend Advantage 2"), Nuveen
Insured New York Dividend Advantage Municipal Fund ("Insured New York Dividend
Advantage"), Nuveen Insured New York Tax-Free Advantage Municipal Fund ("Insured
New York Tax-Free Advantage"), Nuveen North Carolina Dividend Advantage
Municipal Fund ("North Carolina Dividend Advantage"), Nuveen North Carolina
Dividend Advantage Municipal Fund 2 ("North Carolina Dividend Advantage 2"),
Nuveen North Carolina Dividend Advantage Municipal Fund 3 ("North Carolina
Dividend Advantage 3"), Nuveen North Carolina Premium Income Municipal Fund
("North Carolina Premium Income"), Nuveen Ohio Dividend Advantage Municipal Fund
("Ohio Dividend Advantage"), Nuveen Ohio Dividend Advantage Municipal Fund 2
("Ohio Dividend Advantage 2"), Nuveen Ohio Dividend Advantage Municipal Fund 3
("Ohio Dividend Advantage 3"), Nuveen Pennsylvania Dividend Advantage Municipal
Fund ("Pennsylvania Dividend Advantage"), Nuveen Pennsylvania Dividend Advantage
Municipal Fund 2 ("Pennsylvania Dividend Advantage 2"), Nuveen Pennsylvania
Premium Income Municipal Fund 2 ("Pennsylvania Premium Income 2"), Nuveen Texas
Quality Income Municipal Fund ("Texas Quality Income"), Nuveen Virginia Premium
Income Municipal Fund ("Virginia Premium Income"), Nuveen Virginia Dividend
Advantage Municipal Fund ("Virginia Dividend Advantage"), and Nuveen Virginia
Dividend Advantage Municipal Fund 2 ("Virginia Dividend Advantage 2"), each a
Massachusetts business trust, and Nuveen Arizona Premium Income Municipal Fund,
Inc. ("Arizona Premium Income"), Nuveen California Investment Quality Municipal
Fund, Inc. ("California Investment Quality"), Nuveen California Municipal Market
Opportunity Fund, Inc. ("California Market Opportunity"), Nuveen California
Municipal Value Fund, Inc. ("California Value Fund"), Nuveen California
Performance Plus Municipal
3
Fund, Inc. ("California Performance Plus"), Nuveen California Quality Income
Municipal Fund, Inc. ("California Investment Quality"), Nuveen California Select
Quality Municipal Fund, Inc. ("California Select Quality"), Nuveen Insured
California Premium Income Municipal Fund, Inc. ("Insured California Premium
Income"), Nuveen Insured California Premium Income Municipal Fund 2, Inc.
("Insured California Premium Income 2"), Nuveen Michigan Premium Income
Municipal Fund, Inc. ("Michigan Premium Income"), Nuveen Michigan Quality Income
Municipal Fund, Inc. ("Michigan Quality Income"), Nuveen New Jersey Investment
Quality Municipal Fund, Inc. ("New Jersey Investment Quality"), Nuveen New
Jersey Premium Income Municipal Fund, Inc. ("New Jersey Premium Income"), Nuveen
New York Investment Quality Municipal Fund, Inc. ("New York Investment
Quality"), Nuveen New York Municipal Value Fund, Inc. ("New York Municipal
Value"), Nuveen New York Performance Plus Municipal Fund, Inc. ("New York
Performance Plus"), Nuveen New York Quality Income Municipal Fund, Inc. ("New
York Quality Income"), Nuveen New York Select Quality Municipal Fund, Inc. ("New
York Select Quality"), Nuveen Insured New York Premium Income Municipal Fund,
Inc. ("Insured New York Premium Income"), Nuveen Ohio Quality Income Municipal
Fund, Inc. ("Ohio Quality Income"), Nuveen Pennsylvania Investment Quality
Municipal Fund, Inc. ("Pennsylvania Investment Quality"), each a Minnesota
corporation, (individually, a "Fund" and collectively, the "Funds") of proxies
to be voted at a Special Meeting of Shareholders to be held (along with the
meeting of shareholders of several other Nuveen funds) in the Assembly Room of
The Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois 60675, on
Tuesday, July 26, 2005, at 10:30 a.m., Chicago time, (for each Fund, a "Meeting"
and collectively, the "Meetings"), and at any and all adjournments thereof.
On the matters coming before each Meeting as to which a choice has been
specified by shareholders on the proxy, the shares will be voted accordingly. If
a proxy is returned and no choice is specified, the shares will be voted FOR
approval of the new investment management agreement. 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 Meeting and voting in person.
This Joint Proxy Statement is first being mailed to shareholders on or about
June 21, 2005.
The Board of each Fund has determined that the use of this Joint Proxy Statement
for each 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:
<Table>
<Caption>
- -------------------------------------------------------------------------------------
MATTER COMMON SHARES PREFERRED SHARES(1)
- -------------------------------------------------------------------------------------
1. To approve a new investment management X X
agreement for each Fund
- -------------------------------------------------------------------------------------
</Table>
(1) Municipal Auction Rate Cumulative Preferred Shares ("MuniPreferred") are
referred to as "Preferred Shares."
A quorum of shareholders is required to take action at each Meeting. A majority
of the shares entitled to vote at each Meeting, represented in person or by
proxy, will constitute a quorum of shareholders at that Meeting. Votes cast by
proxy or in person at each Meeting will be tabulated by the inspectors of
election appointed for that Meeting. The inspectors of election will determine
whether or not a quorum is present at the Meeting. The inspectors of
4
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 purposes of determining the approval of the new investment management
agreement, abstentions and broker non-votes will be treated as shares voted
against the proposal. The details of the proposal to be voted on by the
shareholders of each Fund and the vote required for approval of the proposal are
set forth under the description of the proposal below.
Preferred Shares held in "street name" as to which voting instructions have not
been received from the beneficial owners or persons entitled to vote as of one
business day before the Meeting, or, if adjourned, one business day before the
day to which the Meeting is adjourned, and that would otherwise be treated as
"broker non-votes" may, pursuant to Rule 452 of the New York Stock Exchange, be
voted by the broker on the proposal in the same proportion as the votes cast by
all Preferred shareholders as a class who have voted on the proposal or in the
same proportion as the votes cast by all Preferred shareholders of the Fund who
have voted on that item. Rule 452 permits proportionate voting of Preferred
Shares with respect to a particular item if, among other things, (i) a minimum
of 30% of the Preferred Shares or shares of a series of Preferred Shares
outstanding has been voted by the holders of such shares with respect to such
item and (ii) less than 10% of the Preferred Shares or shares of a series of
Preferred Shares outstanding has been voted by the holders of such shares
against such item. For the purpose of meeting the 30% test, abstentions will be
treated as shares "voted" and for the purpose of meeting the 10% test,
abstentions will not be treated as shares "voted" against the item.
5
Those persons who were shareholders of record at the close of business on May
31, 2005 will be entitled to one vote for each share held. As of May 31, 2005,
the shares of the Funds were issued and outstanding as follows:
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------
FUND TICKER SYMBOL* COMMON SHARES PREFERRED SHARES
- ----------------------------------------------------------------------------------------------
Arizona Dividend Advantaged NFZ 1,545,185 Series T 480
- ----------------------------------------------------------------------------------------------
Arizona Dividend Advantage 2 NKR 2,423,648 Series W 740
- ----------------------------------------------------------------------------------------------
Arizona Dividend Advantage 3 NXE 3,067,243 Series M 880
- ----------------------------------------------------------------------------------------------
Arizona Premium Income NAZ 4,459,417 Series TH 1,200
- ----------------------------------------------------------------------------------------------
California Dividend Advantage NAC 23,412,013 Series TH 3,500
Series F 3,500
- ----------------------------------------------------------------------------------------------
California Dividend Advantage 2 NVX 14,790,660 Series M 2,200
Series F 2,200
- ----------------------------------------------------------------------------------------------
California Dividend Advantage 3 NZH 24,112,833 Series M 3,740
Series TH 3,740
- ----------------------------------------------------------------------------------------------
California Investment Quality NQC 13,580,232 Series M 3,600
Series W 880
- ----------------------------------------------------------------------------------------------
California Municipal Market NCO 8,154,681 Series W 2,200
Opportunity
Series F 520
- ----------------------------------------------------------------------------------------------
California Municipal Value NCA 25,241,808 N/A
- ----------------------------------------------------------------------------------------------
California Performance Plus NCP 12,965,742 Series T 1,800
Series W 640
Series F 1,800
- ----------------------------------------------------------------------------------------------
California Premium Income NCU 5,774,216 Series M 1,720
- ----------------------------------------------------------------------------------------------
California Quality Income NUC 21,999,728 Series M 1,400
Series W 3,000
Series F 3,000
- ----------------------------------------------------------------------------------------------
California Select Quality NVC 23,096,654 Series T 2,400
Series W 1,680
Series TH 3,600
- ----------------------------------------------------------------------------------------------
Insured California Dividend NKL 15,259,759 Series T 2,360
Advantage
Series F 2,360
- ----------------------------------------------------------------------------------------------
Insured California Premium Income NPC 6,448,935 Series T 1,800
- ----------------------------------------------------------------------------------------------
Insured California Premium Income 2 NCL 12,713,231 Series T 1,900
Series TH 1,900
- ----------------------------------------------------------------------------------------------
Insured California Tax-Free NKX 5,883,301 Series TH 1,800
Advantage
- ----------------------------------------------------------------------------------------------
Connecticut Dividend Advantage NFC 2,564,283 Series T 780
- ----------------------------------------------------------------------------------------------
Connecticut Dividend Advantage 2 NGK 2,309,188 Series W 700
- ----------------------------------------------------------------------------------------------
Connecticut Dividend Advantage 3 NGO 4,350,795 Series F 1,280
- ----------------------------------------------------------------------------------------------
Connecticut Premium Income NTC 5,343,880 Series TH 1,532
- ----------------------------------------------------------------------------------------------
</Table>
6
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------
FUND TICKER SYMBOL* COMMON SHARES PREFERRED SHARES
- ----------------------------------------------------------------------------------------------
Florida Investment Quality NQF 16,574,056 Series T 3,080
Series F 2,200
- ----------------------------------------------------------------------------------------------
Florida Quality Income NUF 14,299,880 Series M 1,700
Series TH 1,700
Series F 1,280
- ----------------------------------------------------------------------------------------------
Insured Florida Premium Income NFL 14,376,794 Series W 1,640
Series TH 2,800
- ----------------------------------------------------------------------------------------------
Insured Florida Tax-Free Advantage NWF 3,882,034 Series W 1,160
- ----------------------------------------------------------------------------------------------
Georgia Dividend Advantage NZX 1,961,483 Series M 600
- ----------------------------------------------------------------------------------------------
Georgia Dividend Advantage 2 NKG 4,553,660 Series F 1,320
- ----------------------------------------------------------------------------------------------
Georgia Premium Income NPG 3,796,767 Series TH 1,112
- ----------------------------------------------------------------------------------------------
Massachusetts Dividend Advantage NMB 1,951,293 Series T 600
- ----------------------------------------------------------------------------------------------
Massachusetts Premium Income NMT 4,744,935 Series TH 1,360
- ----------------------------------------------------------------------------------------------
Insured Massachusetts Tax-Free NGX 2,719,407 Series W 820
Advantage
- ----------------------------------------------------------------------------------------------
Maryland Dividend Advantage NFM 4,166,281 Series M 1,280
- ----------------------------------------------------------------------------------------------
Maryland Dividend Advantage 2 NZR 4,174,247 Series F 1,280
- ----------------------------------------------------------------------------------------------
Maryland Dividend Advantage 3 NWI 5,359,275 Series T 1,560
- ----------------------------------------------------------------------------------------------
Maryland Premium Income NMY 10,612,282 Series W 1,404
Series TH 1,760
- ----------------------------------------------------------------------------------------------
Michigan Dividend Advantage NZW 2,061,085 Series W 640
- ----------------------------------------------------------------------------------------------
Michigan Premium Income NMP 7,745,623 Series M 840
Series TH 1,400
- ----------------------------------------------------------------------------------------------
Michigan Quality Income NUM 11,706,154 Series TH 3,200
Series F 560
- ----------------------------------------------------------------------------------------------
Missouri Premium Income NOM 2,264,054 Series TH 640
- ----------------------------------------------------------------------------------------------
New Jersey Dividend Advantage NXJ 6,556,261 Series T 1,920
- ----------------------------------------------------------------------------------------------
New Jersey Dividend Advantage 2 NUJ 4,509,839 Series W 1,380
- ----------------------------------------------------------------------------------------------
New Jersey Investment Quality NQJ 20,444,580 Series M 3,200
Series TH 2,000
Series F 1,280
- ----------------------------------------------------------------------------------------------
New Jersey Premium Income NNJ 12,039,329 Series T 624
Series W 1,440
Series TH 1,600
- ----------------------------------------------------------------------------------------------
New York Dividend Advantage NAN 9,195,882 Series F 2,760
- ----------------------------------------------------------------------------------------------
New York Dividend Advantage 2 NXK 6,457,000 Series W 1,880
- ----------------------------------------------------------------------------------------------
New York Investment Quality NQN 17,720,933 Series M 960
Series T 2,400
Series F 2,400
- ----------------------------------------------------------------------------------------------
New York Municipal Value NNY 15,120,364 N/A
- ----------------------------------------------------------------------------------------------
</Table>
7
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------
FUND TICKER SYMBOL* COMMON SHARES PREFERRED SHARES
- ----------------------------------------------------------------------------------------------
New York Performance Plus NNP 14,977,135 Series M 1,600
Series T 800
Series W 2,000
Series F 572
- ----------------------------------------------------------------------------------------------
New York Quality Income NUN 24,083,739 Series M 2,200
Series W 2,200
Series TH 2,400
Series F 1,080
- ----------------------------------------------------------------------------------------------
New York Select Quality NVN 23,435,202 Series T 1,720
Series W 2,400
Series TH 3,600
- ----------------------------------------------------------------------------------------------
Insured New York Dividend Advantage NKO 7,957,934 Series TH 2,440
- ----------------------------------------------------------------------------------------------
Insured New York Premium Income NNF 8,329,215 Series M 1,320
Series T 1,280
- ----------------------------------------------------------------------------------------------
Insured New York Tax-Free Advantage NRK 3,512,848 Series TH 1,080
- ----------------------------------------------------------------------------------------------
North Carolina Dividend Advantage NRB 2,252,723 Series T 680
- ----------------------------------------------------------------------------------------------
North Carolina Dividend Advantage 2 NNO 3,740,045 Series F 1,120
- ----------------------------------------------------------------------------------------------
North Carolina Dividend Advantage 3 NII 3,925,825 Series W 1,120
- ----------------------------------------------------------------------------------------------
North Carolina Premium Income NNC 6,334,245 Series TH 1,872
- ----------------------------------------------------------------------------------------------
Ohio Dividend Advantage NXI 4,234,055 Series W 1,240
- ----------------------------------------------------------------------------------------------
Ohio Dividend Advantage 2 NBJ 3,118,765 Series F 960
- ----------------------------------------------------------------------------------------------
Ohio Dividend Advantage 3 NVJ 2,157,781 Series T 660
- ----------------------------------------------------------------------------------------------
Ohio Quality Income NUO 9,699,620 Series M 680
Series TH 1,400
Series TH2 1,000
- ----------------------------------------------------------------------------------------------
Pennsylvania Dividend Advantage NXM 3,308,738 Series T 1,000
- ----------------------------------------------------------------------------------------------
Pennsylvania Dividend Advantage 2 NVY 3,724,790 Series M 1,140
- ----------------------------------------------------------------------------------------------
Pennsylvania Investment Quality NQP 16,301,498 Series T 880
Series W 2,400
Series TH 2,000
- ----------------------------------------------------------------------------------------------
Pennsylvania Premium Income 2 NPY 15,812,637 Series M 844
Series TH 2,080
Series F 1,800
- ----------------------------------------------------------------------------------------------
</Table>
8
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------
FUND TICKER SYMBOL* COMMON SHARES PREFERRED SHARES
- ----------------------------------------------------------------------------------------------
Texas Quality Income NTX 9,483,870 Series M 760
Series TH 2,000
- ----------------------------------------------------------------------------------------------
Virginia Premium Income NPV 8,871,611 Series T 832
Series TH 1,720
- ----------------------------------------------------------------------------------------------
Virginia Dividend Advantage NGB 3,123,586 Series W 960
- ----------------------------------------------------------------------------------------------
Virginia Dividend Advantage 2 NNB 5,708,726 Series M 1,680
- ----------------------------------------------------------------------------------------------
</Table>
* The common shares of all of the Funds are listed on the New York Stock
Exchange, except NFZ, NKR, NXE, NCU, NVX, NZH, NKL, NKO, NKX, NFC, NGK, NGO,
NWF, NZX, NKG, NPG, NFM, NZR, NWI, NGX, NMB, NZW, NOM, NXJ, NXK, NUJ, NRB,
NRK, NNO, NII, NXI, NBJ, NVJ, NXM, NVY, NGB and NNB, which are listed on the
American Stock Exchange.
The number of shares of each Fund beneficially owned by each Board Member and by
the Board Members and officers of the Funds as a group as of December 31, 2004
is set forth in Appendix A. On December 31, 2004, Board Members and executive
officers as a group beneficially owned 1,196,807 shares of all funds managed by
Nuveen Asset Management ("NAM" or the "Adviser") (includes shares held by Board
Members through the Deferred Compensation Plan for Independent Board Members and
by executive officers in Nuveen's 401(k)/profit sharing plan). Each Board
Member's individual beneficial shareholdings of each Fund constituted less than
1% of the outstanding shares of each Fund. As of May 31, 2005, the Board Members
and executive officers as a group beneficially owned less than 1% of the
outstanding Common Shares of each Fund. As of May 31, 2005, no shareholder
beneficially owned more than 5% of any class of shares of any Fund.
1. APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENTS
BACKGROUND
Under an investment management agreement between the Adviser and each Fund
(each, an "Original Investment Management Agreement" and collectively, the
"Original Investment Management Agreements"), NAM has served as each Fund's
investment adviser and has been responsible for each Fund's overall investment
strategy and its implementation. The date of each Fund's Original Investment
Management Agreement and the date on which it was last approved by shareholders
and approved for continuance by the Board is provided in Appendix B. NAM is a
wholly-owned subsidiary of Nuveen Investments, Inc. ("Nuveen"). Nuveen is a
publicly traded company and, until recently, was a majority-owned subsidiary of
The St. Paul Travelers Companies, Inc. ("St. Paul Travelers"), 385 Washington
Street, St. Paul, Minnesota 55102. St. Paul Travelers is a publicly-traded
company that is principally engaged in providing property-liability insurance
through subsidiaries.
On March 25, 2005, Nuveen and St. Paul Travelers announced that St. Paul
Travelers planned to implement a three-part program to sell its equity interest
in Nuveen (the "Sale"). As part of St. Paul Travelers' previously announced
three-part divestiture program, St. Paul Travelers sold 39.3 million shares of
Nuveen's approximately 94 million outstanding common shares through a secondary
public offering on April 12, 2005. Nuveen also repurchased $600 million of its
common shares from St. Paul Travelers at a price of $32.98 per share, or
approximately 18.2 million shares. The repurchase of these shares is being
completed through two steps--a $200 million repurchase that closed on April 12,
2005, and a $400 million forward purchase (plus interest) that will settle later
this year. St. Paul Travelers also entered into an
9
agreement with two other parties to sell approximately 12 million common shares
of Nuveen for settlement later this year. Upon the closing of the secondary
offering and the initial repurchase by Nuveen as well as the closing for the
forward sale transactions later this year, Nuveen will emerge as a fully
independent public company.
Each Original Investment Management Agreement, as required by Section 15 of the
Investment Company Act of 1940, as amended (the "1940 Act"), provides for its
automatic termination in the event of its "assignment" (as defined in the 1940
Act). Any change in control of the Adviser is deemed to be an assignment. The
consummation of the Sale may be deemed a change in control of the Adviser and
therefore cause the automatic termination of each Original Investment Management
Agreement, as required by the 1940 Act.
In anticipation of the Sale, each Board met in person at a joint meeting of each
Fund's Board on May 10-12, 2005 for purposes of, among other things, considering
whether it would be in the best interests of each Fund and its shareholders to
approve a new investment management agreement between the Fund and NAM (each a
"New Investment Management Agreement" and collectively, the "New Investment
Management Agreements").
The 1940 Act requires that each New Investment Management Agreement be approved
by the Fund's shareholders in order for it to become effective. At the Board
meeting, and for the reasons discussed below (see "Board Considerations" below),
each Board, including a majority of the Board Members who are not parties to the
Original Investment Management Agreements or New Investment Management
Agreements entered into by the Adviser with respect to any Fund or who are not
"interested persons" of the Funds or the Adviser as defined in the 1940 Act (the
"Independent Board Members"), unanimously approved the New Investment Management
Agreement and unanimously recommended its approval by shareholders in order to
assure continuity of investment advisory services to the Fund after the Sale. In
the event shareholders of a Fund do not approve the New Investment Management
Agreement, the Board will take such action as it deems to be in the best
interests of the Fund and its shareholders. The form of the New Investment
Management Agreement is attached hereto as Appendix C.
COMPARISON OF ORIGINAL INVESTMENT MANAGEMENT AGREEMENT AND NEW INVESTMENT
MANAGEMENT AGREEMENT
The terms of each New Investment Management Agreement, including fees payable to
the Adviser by the Fund thereunder, are substantially identical to those of the
Original Investment Management Agreement, except for the date of effectiveness.
There is no change in the fee rate payable by each Fund to the Adviser. If
approved by shareholders of a Fund, the New Investment Management Agreement for
the Fund will expire on August 1, 2006, unless continued. Each New Investment
Management Agreement will continue in effect from year to year thereafter if
such continuance is approved for the Fund at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder. Below is a
comparison of certain terms of the Original Investment Management Agreement to
the terms of the New Investment Management Agreement.
INVESTMENT MANAGEMENT SERVICES. The investment management services to be
provided by the Adviser to each Fund under the New Investment Management
Agreements will be identical to those services currently provided by the Adviser
to each Fund under the Original Investment Management Agreements. Both the
Original Investment Management Agreements and New
10
Investment Management Agreements provide that the Adviser shall manage the
investment and reinvestment of the Fund's assets in accordance with the Fund's
investment objective and policies and limitations and administer the Fund's
affairs to the extent requested by and subject to the supervision of the Fund's
Board. In addition, the investment management services will be provided by the
same Adviser personnel under the New Investment Management Agreements as under
the Original Investment Management Agreements. The Adviser does not anticipate
that the Sale will have any adverse effect on the performance of its obligations
under the New Investment Management Agreements.
FEES. Under each Original Investment Management Agreement and New Investment
Management Agreement, the Fund pays to the Adviser an investment management fee
that consists of two components--a fund-level component, based only on the
amount of assets within each individual Fund, and a complex-level component,
based on the aggregate managed assets (which includes assets attributable to all
types of leverage used in leveraged funds) of all Nuveen-branded closed-end and
open-end registered investment companies organized in the United States. The
investment management fee paid by each Fund equals the sum of the fund-level
component and complex-level component.
The fee schedules for the fund-level component and complex-level component to be
paid to the Adviser under the New Investment Management Agreements are identical
to the fund-level component and complex-level component paid to the Adviser
under the Original Investment Management Agreements. The annual fund-level
component for each Fund under the Original Investment Management Agreements and
the New Investment Management Agreements, the fees paid by each Fund to the
Adviser during each Fund's last fiscal year and the Fund's net assets as of May
1, 2005 are set forth in Appendix D to this Proxy Statement. The fee schedule
for the complex-level component is the same for each Fund under both the
Original Investment Management Agreements and New Investment Management
Agreements and is also set forth in Appendix D.
PAYMENT OF EXPENSES. Under each Original Investment Management Agreement and
each New Investment Management Agreement, the Adviser shall furnish office
facilities and equipment and clerical, bookkeeping and administrative services
(other than such services, if any, provided by the Fund's transfer agent) for
the Fund.
LIMITATION ON LIABILITY. The Original Investment Management Agreements and New
Investment Management Agreements provide that the Adviser will 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 the
Agreement.
CONTINUANCE. The Original Investment Management Agreement of each Fund
originally was in effect for an initial term and could be continued thereafter
for successive one-year periods if such continuance was specifically approved at
least annually in the manner required by the 1940 Act. If the shareholders of a
Fund approve the New Investment Management Agreement for that Fund, the New
Investment Management Agreement will expire on August 1, 2006, unless continued.
The New Investment Management Agreement may be
11
continued for successive one-year periods if approved at least annually in the
manner required by the 1940 Act.
TERMINATION. The Original Investment Management Agreement and New Investment
Management Agreement for each Fund provide that the Agreement may be terminated
at any time without the payment of any penalty by the Fund or Adviser on sixty
(60) days' written notice to the other party. A Fund may effect termination by
action of the Board or by vote of a majority of the outstanding voting
securities of the Fund, accompanied by appropriate notice.
BOARD CONSIDERATIONS
At a meeting held on May 10-12, 2005, the Board of each Fund, including the
Independent Board Members, unanimously approved the New Investment Management
Agreement between each Fund and NAM.
To assist the Board in its evaluation of an advisory contract with NAM, the
Independent Board Members received a report in adequate time in advance of their
meeting which outlined, among other things, the services provided by NAM; the
organization of NAM, including the responsibilities of various departments and
key personnel; the Fund's past performance as well as the Fund's performance
compared to funds of similar investment objectives compiled by an independent
third party (a "Peer Group") and if available, with recognized or, in certain
cases, customized benchmarks; the profitability of NAM and certain industry
profitability analyses for advisers to unaffiliated investment companies; the
expenses of NAM in providing the various services; the advisory fees of NAM,
including comparisons of such fees with the management fees of comparable funds
in its Peer Group as well as comparisons of NAM's management fees with the fees
NAM assesses to other types of investment products or accounts, if any; the soft
dollar practices of NAM; and the expenses of each Fund, including comparisons of
the Fund's expense ratios (after any fee waivers) with the expense ratios of its
Peer Group. This information supplements that received by the Board throughout
the year regarding Fund performance, expense ratios, portfolio composition,
trade execution and sales activity.
In addition to the foregoing materials, independent legal counsel to the
Independent Board Members provided, in advance of the meeting, a legal
memorandum outlining, among other things, the duties of the Board Members under
the 1940 Act as well as the general principles of relevant state law in
reviewing and approving advisory contracts; the requirements of the 1940 Act in
such matters; an adviser's fiduciary duty with respect to advisory agreements
and compensation; the standards used by courts in determining whether investment
company boards of directors have fulfilled their duties and factors to be
considered by the board in voting on advisory agreements.
At the Board meeting, NAM made a presentation to and responded to questions from
the Board. After the presentations and after reviewing the written materials,
the Independent Board Members met privately with their legal counsel to review
the Board's duties in reviewing advisory contracts and consider the renewal of
the advisory contract. It is with this background that the Board Members
considered each Investment Management Agreement with NAM. The Independent Board
Members, in consultation with independent counsel, reviewed the factors set out
in judicial decisions and Securities and Exchange Commission directives relating
to the renewal of advisory contracts. As outlined in more detail below, the
12
Board Members considered all factors they believed relevant with respect to each
Fund, including the following: (a) the nature, extent and quality of the
services to be provided by NAM; (b) the investment performance of the Fund and
NAM; (c) the costs of the services to be provided and profits to be realized by
NAM and its affiliates from the relationship with the Fund; (d) the extent to
which economies of scale would be realized as the Fund grows; and (e) whether
fee levels reflect these economies of scale for the benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, extent and quality of NAM's services, the Board
Members reviewed information concerning the types of services that NAM or its
affiliates provide and are expected to provide to the Nuveen Funds; narrative
and statistical information concerning the Fund's performance record and how
such performance compares to the Fund's Peer Group and, if available, recognized
benchmarks or, in certain cases, customized benchmarks (as described in further
detail in Section B below); information describing NAM's organization and its
various departments, the experience and responsibilities of key personnel, and
available resources. In the discussion of key personnel, the Board Members
received materials regarding the changes or additions in personnel of NAM. The
Board Members further noted the willingness of the personnel of NAM to engage in
open, candid discussions with the Board. The Board Members further considered
the quality of NAM's investment process in making portfolio management
decisions, including any refinements or improvements to the portfolio management
processes, enhancements to technology and systems that are available to
portfolio managers, and any additions of new personnel which may strengthen or
expand the research and investment capabilities of NAM. In their review of the
advisory contracts for the fixed income funds, the Board Members also noted that
Nuveen won the Lipper Award for Best Fund Family: Fixed Income-Large Asset
Class, for 2004. Given the Board Members' experience with the Funds, other
Nuveen funds and NAM, the Board Members noted that they were familiar with and
continue to have a good understanding of the organization, operations and
personnel of NAM.
In addition to advisory services, the Independent Board Members considered the
quality of the administrative or non-advisory services provided. In this regard,
NAM provides the Fund with such administrative and other services (exclusive of,
and in addition to, any such services provided by others for the Funds) and
officers and other personnel as are necessary for the operations of the
respective Fund. In addition to investment management services, NAM and its
affiliates provide each Fund with a wide range of services, including: preparing
shareholder reports; providing daily accounting; providing quarterly financial
statements; overseeing and coordinating the activities of other service
providers; administering and organizing Board meetings and preparing the Board
materials for such meetings; providing legal support (such as helping to prepare
registration statements, amendments thereto and proxy statements and responding
to regulatory inquiries); and performing other Fund administrative tasks
necessary for the operation of the respective Fund (such as tax reporting and
fulfilling regulatory filing requirements). In addition, in evaluating the
administrative services, the Board Members considered, in particular, NAM's
policies and procedures for assuring compliance with applicable laws and
regulations in light of the new Securities and Exchange Commission regulations
governing compliance. The Board Members noted NAM's focus on compliance and its
compliance systems. In their review, the Board Members considered, among other
things, the additions of experienced personnel to NAM's compliance group and
modifications and other enhancements to NAM's computer systems. In
13
addition to the foregoing, the Board Members also noted that NAM outsources
certain services that cannot be replicated without significant costs or at the
same level of expertise. Such outsourcing has been a beneficial and efficient
use of resources by keeping expenses low while obtaining quality services.
In addition to the above, in reviewing the variety of additional services that
NAM or its affiliates must provide to closed-end funds, such as the Funds, the
Independent Board Members determined that Nuveen's commitment to supporting the
secondary market for the common shares of its closed-end funds is particularly
noteworthy. In this regard, the Board Members noted Nuveen's efforts to sponsor
numerous forums for analysts and specialists regarding the various Nuveen
closed-end funds, its creation of a new senior position dedicated to providing
secondary market support services and enhancing communications with investors
and analysts, and its advertising and media relations efforts designed to raise
investor and analyst awareness of the closed-end funds.
With respect to services provided to municipal funds, such as the Funds, the
Board Members also noted, among other things, the enhancements NAM implemented
to its municipal portfolio management processes (e.g., the increased use of
benchmarks to guide and assess the performance of its portfolio managers); the
implementation of a risk management program; and the various initiatives being
undertaken to enhance or modify NAM's computer systems as necessary to support
the innovations of the municipal investment team (such as, the ability to assess
certain historical data in order to create customized benchmarks, perform
attribution analysis and facilitate the use of derivatives as hedging
instruments). With respect to certain of the Funds with a less seasoned
portfolio, the Board Members also noted the hedging program implemented for such
Funds and the team responsible for developing, implementing and monitoring the
hedging procedures. The hedging program was designed to help maintain the
applicable Fund's duration within certain benchmarks.
Based on their review, the Board Members found that, overall, the nature, extent
and quality of services provided (and expected to be provided) to the Funds
under the Investment Management Agreements were of a high level and were quite
satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND ADVISER
As previously noted, the Board received a myriad of performance information
regarding each Fund and its Peer Group. Among other things, the Board received
materials reflecting a Fund's historic performance, the Fund's performance
compared to its Peer Group and, if available, its performance compared to
recognized and, in certain cases, customized benchmarks. Further, in evaluating
the performance information, in certain limited instances, the Board Members
noted that the closest Peer Group for a Fund still would not adequately reflect
such Fund's investment objectives and strategies, thereby limiting the
usefulness of the comparisons of such Fund's performance with that of the Peer
Group.
For state municipal funds, such as the Funds, the performance data included,
among other things, the respective Fund's performance relative to its peers.
More specifically, a Fund's one-, three- and five-year total returns (as
available) for the periods ending December 31, 2004 were evaluated relative to
the unaffiliated funds in its respective Peer Group (including the returns of
individual peers as well as the Peer Group average) as well as additional
performance information with respect to all the funds in the Peer Group, subject
to the following. Certain state municipal Funds do not have a corresponding Peer
Group in which
14
case their performance is measured against a state-specific municipal index
compiled by an independent third party. Such indices measure bond performance
rather than fund performance. The Funds that utilize such indices are from
Connecticut, Georgia, Maryland, Missouri, North Carolina, Texas and Virginia.
Based on their review, the Board Members determined that the respective Fund's
absolute and relative investment performance over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
FEES AND EXPENSES. In evaluating the management fees and expenses that a Fund is
expected to bear, the Board Members considered the Fund's current management fee
structure and the Fund's expected expense ratios in absolute terms as well as
compared with the fees and expense ratios of the unaffiliated funds in its Peer
Group. The Board Members reviewed the financial information of NAM, including
its respective revenues, expenses and profitability. In reviewing fees, the
Board Members, among other things, reviewed comparisons of the Fund's gross
management fees (fees after fund-level and complex-wide level breakpoints but
before reimbursement and fee waivers), net management fees (after breakpoints
and reimbursements and fee waivers) and total expense ratios (before and after
waivers) with those of the unaffiliated funds in the Peer Group and peer
averages. In this regard, the Board Members noted that the relative ranking of
the Nuveen Funds on fees and expenses was aided by the significant level of fee
reductions provided by the fund-level and complex-wide breakpoint schedules, and
the fee waivers and reimbursements provided by Nuveen for certain Funds launched
since 1999. The complex-wide breakpoint schedule was instituted in 2004 and is
described in further detail below in Section D entitled "Economies of Scale and
Whether Fee Levels Reflect these Economies of Scale." In their review of the fee
and expense information provided, including, in particular, the expense ratios
of the unaffiliated funds in the respective Peer Group, the Board Members
determined that each Fund's net total expense ratio was within an acceptable
range compared to such peers.
COMPARISONS WITH THE FEES OF OTHER CLIENTS. The Board Members further compared
the fees of NAM to the fees NAM assessed for other types of clients investing in
municipal funds (such as municipal managed accounts). With respect to such
separately managed accounts, the advisory fees for such accounts are generally
lower than those charged to the comparable Fund. The Board Members noted,
however, the additional services that are provided and the costs incurred by
Nuveen in managing and operating registered investment companies, such as the
Funds, compared to individually managed separate accounts. For instance, as
described above, NAM and its affiliates provide numerous services to the Funds
including, but not limited to, preparing shareholder reports; providing daily
accounting; preparing quarterly financial statements; overseeing and
coordinating the activities of other service providers; administering and
organizing Board meetings and preparing the Board materials for such meetings;
providing legal support; and administering all other aspects of the Fund's
operations. Further, the Board Members noted the increased compliance
requirements for funds in light of new Securities and Exchange Commission
regulations and other legislation. These services are generally not required to
the same extent, if at all, for separate accounts. In addition to the
differences in services, the Board Members also considered, among other things,
the differences in product distribution, investment policies, investor profiles
and account sizes. Accordingly, the Board Members believe that the nature and
number of services provided to operate a Fund merit the higher fees than those
to separate managed accounts.
15
PROFITABILITY OF ADVISER. In conjunction with its review of fees, the Board
Members also considered NAM's profitability. The Board Members reviewed NAM's
revenues, expenses and profitability margins (on both a pre-tax and after-tax
basis). In reviewing profitability, the Board Members recognized that one of the
most difficult issues in determining profitability is establishing a method of
allocating expenses. Accordingly, the Board Members reviewed NAM's assumptions
and methodology of allocating expenses. In this regard, the methods of
allocation used appeared reasonable but the Board noted the inherent limitations
in allocating costs among various advisory products. The Board Members also
recognized that individual fund or product line profitability of other advisers
is generally not publicly available. Further, profitability may be affected by
numerous factors including the types of funds managed, expense allocations,
business mix, etc. and therefore comparability of profitability is somewhat
limited. Nevertheless, to the extent available, the Board Members considered
NAM's profit margin compared to the profitability of various publicly-traded
investment management companies and/or investment management companies that
publicly disclose some or all of their financial results compiled by three
independent third-party service providers. The Board Members also reviewed the
revenues, expenses and profit margins of various unaffiliated advisory firms
with similar amounts of assets under management for the last year prepared by
NAM. Based on their review, the Board Members were satisfied that NAM's level of
profitability from its relationship with each Fund was reasonable in light of
the services provided.
In evaluating the reasonableness of the compensation, the Board Members also
considered any other revenues paid to NAM as well as any indirect benefits (such
as soft dollar arrangements, if any) NAM and its affiliates are expected to
receive that are directly attributable to their management of the Funds, if any.
See Section E below for additional information. Based on their review of the
overall fee arrangements of the applicable Fund, the Board Members determined
that the advisory fees and expenses of the respective Fund were reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF
SCALE
In reviewing the compensation, the Board Members have long understood the
benefits of economies of scale as the assets of a fund grows and have sought to
ensure that shareholders share in these benefits. One method for shareholders to
share in economies of scale is to include breakpoints in the advisory fee
schedules that reduce fees as fund assets grow. Accordingly, the Board Members
received and reviewed the schedules of advisory fees for each Fund, including
fund-level breakpoints thereto. In addition, after lengthy negotiations with
management, the Board in May 2004 approved a complex-wide fee arrangement
pursuant to which fees of the funds in the Nuveen complex, including the Funds,
are reduced as the assets in the fund complex reach certain levels. The
complex-wide fee arrangement was introduced on August 1, 2004 and the Board
Members reviewed data regarding the reductions of fees for the Funds for the
period of August 1, 2004 to December 31, 2004. In evaluating the complex-wide
fee arrangement, the Board Members considered, among other things, the historic
and expected fee savings to shareholders as assets grow, the amount of fee
reductions at various asset levels, and that the arrangement would extend to all
funds in the Nuveen complex. The Board Members also considered the impact, if
any, the complex-wide fee arrangement may have on the level of services
provided. Based on their review, the Board Members concluded that the breakpoint
schedule and complex-wide fee arrangement
16
currently was acceptable and desirable in providing benefits from economies of
scale to shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Board Members also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. In this regard, the Board Members considered any benefits from soft
dollar arrangements. The Board Members noted that although NAM manages a large
amount of assets, it has very little, if any, brokerage to allocate. This is due
to the fact that NAM typically manages the portfolios of the municipal funds in
the Nuveen complex and municipal bonds generally trade on a principal basis.
Accordingly, NAM does not currently have any soft dollar arrangements and does
not pay excess brokerage commissions (or spreads on principal transactions) in
order to receive research services. In addition to soft dollar arrangements, the
Board Members also considered any other revenues, if any, received by NAM or its
affiliates. With respect to Funds with outstanding preferred shares and new
Funds, the Board Members considered revenues received by Nuveen for serving as
agent for broker-dealers at its preferred trading desk and for acting as
co-manager in the initial public offering of new closed-end exchange-traded
funds.
F. OTHER CONSIDERATIONS
Nuveen, until recently, was a majority-owned subsidiary of St. Paul Travelers.
As noted, St. Paul Travelers earlier this year announced its intention to divest
its equity stake in Nuveen. Nuveen is the parent of NAM. Pursuant to a series of
transactions, St. Paul Travelers has begun to reduce its interest in Nuveen
which will ultimately result in a change of control of Nuveen and therefore NAM.
As mandated by the 1940 Act, such a change in control would result in an
assignment of the advisory agreement with NAM and the automatic termination of
such agreement. Accordingly, the Board also considered for each Fund the
approval of a New Investment Management Agreement with each Fund in light of,
and which would take effect upon, the anticipated change of control. More
specifically, the Board considered for each Fund a New Investment Management
Agreement on substantially identical terms to the existing Investment Management
Agreement, to take effect after the change of control has occurred and the
contract has been approved by Fund shareholders. In its review, the Board
considered whether the various transactions necessary to divest St. Paul
Travelers' interest will have an impact on the various factors they considered
in approving NAM, such as the scope and quality of services to be provided
following the change of control. In reviewing the St. Paul Travelers
transactions, the Board considered, among other things, the impact, if any, on
the operations and organizational structure of NAM; the possible benefits and
costs of the transactions to the respective Fund; the potential implications of
any arrangements used by Nuveen to finance certain of the transactions; the
ability of NAM to perform its duties after the transactions; whether a Fund's
fee structure or expense ratio would change; any changes to the current
practices of the respective Fund; any changes to the terms of the advisory
agreement; and any anticipated changes to the operations of NAM. Based on its
review, the Board determined that St. Paul Travelers' divestiture would not
affect the nature and quality of services provided by NAM, the terms of the
Investment Management Agreement, including the fees thereunder, and would not
materially affect the organization or operations of NAM.
17
Accordingly, the Board determined that their analysis of the various factors
regarding their approval of NAM would continue to apply after the change of
control.
G. APPROVAL
The Board Members did not identify any single factor discussed previously as
all-important or controlling. The Board Members, including a majority of
Independent Board Members, concluded that the terms of the Investment Management
Agreements were fair and reasonable, that the respective Fund Adviser's fees are
reasonable in light of the services provided to each Fund, that the renewal of
the NAM Investment Management Agreements should be approved, and that the new,
post-change of control NAM Investment Management Agreements be approved and
recommended to shareholders.
INFORMATION ABOUT THE ADVISER
NAM, a registered investment adviser, is a wholly-owned subsidiary of Nuveen.
Founded in 1898, Nuveen and its affiliates had approximately $119 billion in
assets under management as of March 31, 2005. Nuveen is a publicly traded
company and is listed on the New York Stock Exchange and trades under the symbol
"JNC."
The principal occupation of the officers and directors of NAM is shown in
Appendix E. The business address of NAM, Nuveen and each principal executive
officer and director of NAM is 333 West Wacker Drive, Chicago, Illinois 60606.
Board Member Schwertfeger sold 330,950 shares of Class A Stock of Nuveen on the
New York Stock Exchange since June 1, 2003. Mr. Schwertfeger received $9,483,036
in exchange for his shares of Nuveen sold.
SHAREHOLDER APPROVAL
To become effective with respect to a particular Fund, the New Investment
Management Agreement must be approved by a vote of a majority of the outstanding
voting securities of the Fund, with the Common and Preferred shareholders voting
together as a single class. The "vote of a majority of the outstanding voting
securities" is defined in the 1940 Act as the lesser of the vote of (i) 67% or
more of the shares of the Fund entitled to vote thereon present at the meeting
if the holders of more than 50% of such outstanding shares are present in person
or represented by proxy; or (ii) more than 50% of such outstanding shares of the
Fund entitled to vote thereon. Each New Investment Management Agreement was
approved by the Board of the respective Fund after consideration of all factors
which it determined to be relevant to its deliberations, including those
discussed above. The Board of each Fund also determined to submit the Fund's New
Investment Management Agreement for consideration by the shareholders of the
Fund.
THE BOARD OF EACH FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE
FOR APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENT.
18
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
The Funds (except New York Dividend Advantage, New York Dividend Advantage 2,
New York Investment Quality, New York Municipal Value, New York Performance
Plus, New York Quality Income, New York Select Quality, Insured New York
Dividend Advantage, Insured New York Premium Income and Insured New York
Tax-Free Advantage) have yet to hold their 2005 annual meeting of shareholders.
For the 2005 annual meeting, shareholder proposals submitted pursuant to Rule
14a-8 of the Securities and Exchange Act of 1934 had to have been received at
the offices of that Fund, 333 West Wacker Drive, Chicago, Illinois 60606, by
June 20, 2005. 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
for the 2005 annual meeting must submit such written notice to the Fund not
later than September 3, 2005. For New York Dividend Advantage, New York Dividend
Advantage 2, New York Investment Quality, New York Municipal Value, New York
Performance Plus, New York Quality Income, New York Select Quality, Insured New
York Dividend Advantage, Insured New York Premium Income and Insured New York
Tax-Free Advantage, a shareholder proposal, pursuant to Rule 14a-8, to be
considered for presentation at the 2006 annual meeting must be received at the
address above not later than October 20, 2005. 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 January 3, 2006.
Timely submission of a proposal does not mean that such proposal will be
included in a proxy statement.
SHAREHOLDER COMMUNICATIONS
Shareholders who want to communicate with the Board or any individual Board
Member should write their Fund to the attention of Lorna Ferguson, Manager of
Fund Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago,
Illinois 60606. The letter should indicate that you are a Fund shareholder. If
the communication is intended for a specific Board Member and so indicates it
will be sent only to that Board Member. If a communication does not indicate a
specific Board Member it will be sent to the chair of the nominating and
governance committee and the outside counsel to the Independent Board Members
for further distribution as deemed appropriate by such persons.
EXPENSES OF PROXY SOLICITATION
The cost of preparing, printing and mailing the enclosed proxy, accompanying
notice and proxy statement and all other costs in connection with the
solicitation of proxies will be paid by Nuveen. Solicitation may be made by
letter or telephone by officers or employees of Nuveen or the Adviser, or by
dealers and their representatives.
19
FISCAL YEAR
The last fiscal year end for each of the Funds is as follows: May 31, 2004 for
Connecticut Dividend Advantage, Connecticut Dividend Advantage 2, Connecticut
Dividend Advantage 3, Connecticut Premium Income, Georgia Dividend Advantage,
Georgia Dividend Advantage 2, Georgia Premium Income, Massachusetts Dividend
Advantage, Massachusetts Premium Income, Insured Massachusetts Tax-Free
Advantaged, Maryland Dividend Advantage, Maryland Dividend Advantage 2, Maryland
Dividend Advantage 3, Maryland Premium Income, Missouri Premium Income, North
Carolina Dividend Advantage, North Carolina Dividend Advantage 2, North Carolina
Dividend Advantage 3, North Carolina Premium Income, Virginia Premium Income,
Virginia Dividend Advantage, and Virginia Dividend Advantage 2; June 30, 2004
for Florida Investment Quality, Florida Quality, Insured Florida Premium Income,
Insured Florida Tax-Free Advantage, New Jersey Dividend Advantage, New Jersey
Dividend Advantage 2, New Jersey Investment Quality, New Jersey Premium Income,
Pennsylvania Dividend Advantage, Pennsylvania Dividend Advantage 2, Pennsylvania
Investment Quality, Pennsylvania Premium Income 2; July 31, 2004 for Arizona
Dividend Advantage, Arizona Dividend Advantage 2, Arizona Dividend Advantage 3,
Arizona Premium Income, Michigan Dividend Advantage, Michigan Premium Income,
Michigan Quality Income, Ohio Dividend Advantage, Ohio Dividend Advantage 2,
Ohio Dividend Advantage 3, Ohio Quality Income, and Texas Quality Income; August
31, 2004 for California Dividend Advantage, California Dividend Advantage 2,
California Dividend Advantage 3, California Investment Quality, California
Market Opportunity, California Municipal Value, California Performance Plus,
California Premium Income, California Quality Income, California Select Quality,
Insured California Dividend Advantage, Insured California Premium Income,
Insured California Premium Income 2, and Insured California Tax-Free Advantage;
September 30, 2004 for New York Dividend Advantage, New York Dividend Advantage
2, New York Investment Quality, New York Municipal Value, New York Performance
Plus, New York Quality Income, New York Select Quality, Insured New York
Dividend Advantage, Insured New York Premium Income, and Insured New York
Tax-Free Advantage.
ANNUAL REPORT DELIVERY
Annual reports will be 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.
20
GENERAL
Management does not intend to present and does not have reason to believe that
any other items of business will be presented at the Meetings. However, if other
matters are properly presented to the Meetings 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 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 the Meetings.
Failure of a quorum to be present at any 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 Meeting to permit further
solicitation of proxies with respect to the proposal 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 21, 2005
21
APPENDIX A
NUMBER OF SHARES BENEFICIALLY OWNED
BY BOARD MEMBERS AND OFFICERS
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- --------------------------------------------------------------------------------------------------------------------------
ARIZONA ARIZONA ARIZONA ARIZONA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND PREMIUM DIVIDEND DIVIDEND DIVIDEND
BOARD MEMBERS ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
- --------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- --------------------------------------------------------------------------------------------------------------------------
CALIFORNIA
CALIFORNIA MUNICIPAL CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
INVESTMENT MARKET MUNICIPAL PERFORMANCE PREMIUM QUALITY SELECT
BOARD MEMBERS QUALITY OPPORTUNITY VALUE PLUS INCOME INCOME QUALITY
- --------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------
</Table>
(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. The information as to beneficial
ownership is based on statements furnished by each Board Member and officer.
A-1
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- ---------------------------------------------------------------------------------------------------------------------------
INSURED INSURED INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CONNECTICUT CONNECTICUT CONNECTICUT
DIVIDEND PREMIUM PREMIUM TAX-FREE DIVIDEND DIVIDEND DIVIDEND
BOARD MEMBERS ADVANTAGE INCOME INCOME 2 ADVANTAGE ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
- ---------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
</Table>
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- ----------------------------------------------------------------------------------------------------------------------
INSURED INSURED
CONNECTICUT FLORIDA FLORIDA FLORIDA FLORIDA GEORGIA GEORGIA
PREMIUM INVESTMENT QUALITY PREMIUM TAX-FREE DIVIDEND DIVIDEND
BOARD MEMBERS INCOME QUALITY INCOME INCOME ADVANTAGE ADVANTAGE ADVANTAGE 2
- ----------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
</Table>
(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. The information as to beneficial
ownership is based on statements furnished by each Board Member and officer.
A-2
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- ---------------------------------------------------------------------------------------------------------------------------------
INSURED
GEORGIA MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND PREMIUM TAX-FREE DIVIDEND DIVIDEND DIVIDEND
BOARD MEMBERS INCOME ADVANTAGE INCOME ADVANTAGE ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
- ---------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- -------------------------------------------------------------------------------------------------------------------
NEW NEW
MARYLAND MICHIGAN MICHIGAN MICHIGAN MISSOURI JERSEY JERSEY
PREMIUM DIVIDEND PREMIUM QUALITY PREMIUM DIVIDEND DIVIDEND
BOARD MEMBERS INCOME ADVANTAGE INCOME INCOME INCOME ADVANTAGE ADVANTAGE 2
- -------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------
</Table>
(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. The information as to beneficial
ownership is based on statements furnished by each Board Member and officer.
A-3
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- ------------------------------------------------------------------------------------------------------------------------
NEW JERSEY NEW JERSEY NEW YORK NEW YORK NEW YORK NEW YORK NEW YORK
INVESTMENT PREMIUM DIVIDEND DIVIDEND INVESTMENT MUNICIPAL PERFORMANCE
BOARD MEMBERS QUALITY INCOME ADVANTAGE ADVANTAGE 2 QUALITY VALUE PLUS
- ------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- -------------------------------------------------------------------------------------------------------------------
INSURED INSURED INSURED NORTH NORTH
NEW YORK NEW YORK NEW YORK NEW YORK NEW YORK CAROLINA CAROLINA
QUALITY SELECT DIVIDEND PREMIUM TAX-FREE DIVIDEND DIVIDEND
BOARD MEMBERS INCOME QUALITY ADVANTAGE INCOME ADVANTAGE ADVANTAGE ADVANTAGE 2
- -------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------
</Table>
(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. The information as to beneficial
ownership is based on statements furnished by each Board Member and officer.
A-4
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- --------------------------------------------------------------------------------------------------------------------------
NORTH NORTH
CAROLINA CAROLINA OHIO OHIO OHIO OHIO PENNSYLVANIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND DIVIDEND QUALITY DIVIDEND
BOARD MEMBERS ADVANTAGE 3 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME ADVANTAGE
- --------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FUND SHARES OWNED BY BOARD MEMBERS AND OFFICERS(1)
- ----------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA TEXAS VIRGINIA VIRGINIA VIRGINIA
DIVIDEND INVESTMENT PREMIUM QUALITY PREMIUM DIVIDEND DIVIDEND
BOARD MEMBERS ADVANTAGE 2 QUALITY INCOME 2 INCOME INCOME ADVANTAGE ADVANTAGE 2
- ----------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner............. 0 0 0 0 0 0 0
Lawrence H. Brown............. 0 0 0 0 0 0 0
Jack B. Evans................. 0 0 0 0 0 0 0
William C. Hunter............. 0 0 0 0 0 0 0
David J. Kundert.............. 0 0 0 0 0 0 0
William J. Schneider.......... 0 0 0 0 0 0 0
Timothy R. Schwertfeger....... 0 0 0 0 0 0 0
Judith M. Stockdale........... 0 0 0 0 0 0 0
Eugene S. Sunshine............ 0 0 0 0 0 0 0
ALL BOARD MEMBERS AND OFFICERS
AS A GROUP.................. 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
(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. The information as to beneficial
ownership is based on statements furnished by each Board Member and officer.
A-5
APPENDIX B
DATES RELATING TO ORIGINAL
INVESTMENT MANAGEMENT AGREEMENTS(1)
<Table>
<Caption>
- --------------------------------------------------------------------------------------------
DATE ORIGINAL DATE ORIGINAL
DATE OF ORIGINAL INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
INVESTMENT AGREEMENT WAS LAST AGREEMENT WAS LAST
MANAGEMENT APPROVED BY APPROVED FOR
FUND AGREEMENT SHAREHOLDERS CONTINUANCE BY BOARD
- --------------------------------------------------------------------------------------------
Arizona Dividend
Advantage December 14, 2000 January 30, 2001 May 11, 2005
Arizona Dividend
Advantage 2 February 20, 2002 March 25, 2002 May 11, 2005
Arizona Dividend
Advantage 3 July 30, 2002 September 24, 2002 May 11, 2005
Arizona Premium
Income November 16, 1992 July 28, 1993 May 11, 2005
California Dividend
Advantage May 22, 1999 May 25, 1999 May 11, 2005
California Dividend
Advantage 2 February 20, 2001 March 27, 2001 May 11, 2005
California Dividend
Advantage 3 August 2, 2001 September 25, 2001 May 11, 2005
California Investment
Quality July 28, 1993 July 28, 1993 May 11, 2005
California Municipal
Market Opportunity July 28, 1993 July 28, 1993 May 11, 2005
California Municipal September 21,
Value 1987 July 28, 1993 May 11, 2005
California
Performance Plus July 28, 1993 July 28, 1993 May 11, 2005
California Premium
Income June 9, 1993 June 9, 1993 May 11, 2005
California Quality
Income November 13, 1991 July 28, 1993 May 11, 2005
California Select
Quality May 15, 1991 July 28, 1993 May 11, 2005
Insured California
Dividend Advantage February 20, 2002 March 25, 2002 May 11, 2005
Insured California
Premium Income November 16, 2002 July 28, 1993 May 11, 2005
Insured California
Premium Income 2 March 15, 1993 July 28, 1993 May 11, 2005
Insured California
Tax-Free Advantage November 14, 2002 November 19, 2002 May 11, 2005
Connecticut Dividend
Advantage December 14, 2000 January 23, 2001 May 11, 2005
Connecticut Dividend
Advantage 2 February 20, 2002 March 25, 2002 May 11, 2005
</Table>
B-1
<Table>
<Caption>
- --------------------------------------------------------------------------------------------
DATE ORIGINAL DATE ORIGINAL
DATE OF ORIGINAL INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
INVESTMENT AGREEMENT WAS LAST AGREEMENT WAS LAST
MANAGEMENT APPROVED BY APPROVED FOR
FUND AGREEMENT SHAREHOLDERS CONTINUANCE BY BOARD
- --------------------------------------------------------------------------------------------
Connecticut Dividend
Advantage 3 July 30, 2002 September 24, 2002 May 11, 2005
Connecticut Premium
Income May 10, 1993 May 10, 1993 May 11, 2005
Florida Investment
Quality July 28, 1993 July 28, 1993 May 11, 2005
Florida Quality
Income October 7, 1991 July 28, 1993 May 11, 2005
Insured Florida
Premium Income December 10, 1992 July 28, 1993 May 11, 2005
Insured Florida Tax-
Free Advantage November 14, 2002 November 19, 2002 May 11, 2005
Georgia Dividend
Advantage August 2, 2001 September 25, 2001 May 11, 2005
Georgia Dividend
Advantage 2 July 30, 2002 September 24, 2002 May 11, 2005
Georgia Premium
Income May 10, 1993 May 10, 1993 May 11, 2005
Massachusetts
Dividend Advantage December 14, 2000 January 30, 2001 May 11, 2005
Massachusetts Premium
Income March 15, 1993 July 28, 1993 May 11, 2005
Insured Massachusetts
Tax-Free Advantage November 14, 2002 November 19, 2002 May 11, 2005
Maryland Dividend
Advantage December 14, 2000 January 23, 2001 May 11, 2005
Maryland Dividend
Advantage 2 August 2, 2001 September 25, 2001 May 11, 2005
Maryland Dividend
Advantage 3 July 30, 2002 September 24, 2002 May 11, 2005
Maryland Premium
Income July 31, 2004 July 28, 1993 May 11, 2005
Michigan Dividend
Advantage August 2, 2001 September 25, 2001 May 11, 2005
Michigan Premium
Income December 10, 1992 July 28, 1993 May 11, 2005
Michigan Quality
Income October 7, 1991 July 28, 1993 May 11, 2005
Missouri Premium
Income May 10, 1993 May 10, 1993 May 11, 2005
New Jersey Dividend
Advantage February 20, 2001 March 27, 2001 May 11, 2005
New Jersey Dividend
Advantage 2 February 20, 2002 March 25, 2002 May 11, 2005
New Jersey Investment
Quality July 28, 1993 July 28, 1993 May 11, 2005
New Jersey Premium
Income December 10, 1992 July 28, 1993 May 11, 2005
</Table>
B-2
<Table>
<Caption>
- --------------------------------------------------------------------------------------------
DATE ORIGINAL DATE ORIGINAL
DATE OF ORIGINAL INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
INVESTMENT AGREEMENT WAS LAST AGREEMENT WAS LAST
MANAGEMENT APPROVED BY APPROVED FOR
FUND AGREEMENT SHAREHOLDERS CONTINUANCE BY BOARD
- --------------------------------------------------------------------------------------------
New York Dividend
Advantage May 25, 1999 May 25, 1999 May 11, 2005
New York Dividend
Advantage 2 February 20, 2001 March 27, 2001 May 11, 2005
New York Investment
Quality July 28, 1993 July 28, 1993 May 11, 2005
New York Municipal
Value May 1, 1989 July 28, 1993 May 11, 2005
New York Performance
Plus July 28, 1993 July 28, 1993 May 11, 2005
New York Quality
Income November 13, 1991 July 28, 1993 May 11, 2005
New York Select
Quality May 15, 1991 July 28, 1993 May 11, 2005
Insured New York
Dividend Advantage February 20, 2002 March 25, 2002 May 11, 2005
Insured New York
Premium Income December 10, 1992 July 28, 1993 May 11, 2005
Insured New York Tax-
Free Advantage November 14, 2002 November 19, 2002 May 11, 2005
North Carolina
Dividend Advantage December 14, 2000 January 23, 2001 May 11, 2005
North Carolina
Dividend
Advantage 2 October 3, 2001 November 15, 2001 May 11, 2005
North Carolina
Dividend
Advantage 3 July 30, 2002 September 24, 2002 May 11, 2005
North Carolina
Premium Income May 10, 1993 May 10, 1993 May 11, 2005
Ohio Dividend
Advantage February 20, 2001 March 27, 2001 May 11, 2005
Ohio Dividend
Advantage 2 August 2, 2001 September 25, 2001 May 11, 2005
Ohio Dividend
Advantage 3 February 20, 2002 March 26, 2002 May 11, 2005
Ohio Quality Income October 7, 1991 July 28, 1993 May 11, 2005
Pennsylvania Dividend
Advantage February 20, 2001 March 27, 2001 May 11, 2005
Pennsylvania Dividend
Advantage 2 February 20, 2002 March 25, 2002 May 11, 2005
Pennsylvania
Investment Quality July 28, 1993 July 28, 1993 May 11, 2005
Pennsylvania Premium
Income 2 March 15, 1993 July 28, 1993 May 11, 2005
Texas Quality Income October 7, 1991 July 28, 1993 May 11, 2005
</Table>
B-3
<Table>
<Caption>
- --------------------------------------------------------------------------------------------
DATE ORIGINAL DATE ORIGINAL
DATE OF ORIGINAL INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
INVESTMENT AGREEMENT WAS LAST AGREEMENT WAS LAST
MANAGEMENT APPROVED BY APPROVED FOR
FUND AGREEMENT SHAREHOLDERS CONTINUANCE BY BOARD
- --------------------------------------------------------------------------------------------
Virginia Premium
Income March 15, 1993 July 28, 1993 May 11, 2005
Virginia Dividend
Advantage December 14, 2000 January 23, 2001 May 11, 2005
Virginia Dividend
Advantage 2 October 3, 2001 November 15, 2001 May 11, 2005
- --------------------------------------------------------------------------------------------
</Table>
(1) The Original Investment Management Agreements were between the Funds and
Nuveen Advisory Corp. ("NAC"). Effective January 1, 2005, NAC was merged
into NAM. As a result, NAC became a part of NAM and ceased to exist
separately. NAM assumed all of NAC obligations under the Original Investment
Management Agreements. Like NAC, NAM is a wholly owned subsidiary of Nuveen.
The merger did not constitute a change in control. There was no change in
who manages the Funds or in the Funds' investment objectives or policies as
a result of the merger.
B-4
APPENDIX C
FORM OF INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this [31st] day of [July, 2005], by and between <NAME OF FUND>, a
<TYPE OF ENTITY> (the "Fund"), and NUVEEN ASSET MANAGEMENT, a Delaware
corporation (the "Adviser").
W I T N E S S E T H
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 the
Fund in accordance with the Fund's investment objective and policies
and limitations, and to administer the Fund's affairs to the extent
requested by and subject to the supervision of the <Board of
Trustees/Directors> ("Board") of the Fund for the period and upon the
terms herein set forth. The investment of the Fund's assets shall be
subject to the Fund's policies, restrictions and limitations with
respect to securities investments as set forth in the Fund's then
current registration statement under the Investment Company Act of
1940, and all applicable laws and the regulations of the Securities and
Exchange Commission relating to the management of registered
closed-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) for the Fund,
to permit any of its officers or employees to serve without
compensation as <trustees/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 l, the Fund will
pay to the Adviser, at the end of each calendar month, an investment
management fee equal to the sum of a Fund-Level Fee and a Complex-Level
Fee.
A. The Fund Level Fee shall be computed by applying the following annual
rate to the average total daily net assets of the Fund:
<Table>
<Caption>
--------------------------------------------------------------------
AVERAGE TOTAL DAILY NET ASSETS RATE
--------------------------------------------------------------------
<SCHEDULE>
--------------------------------------------------------------------
</Table>
B. The Complex-Level Fee shall be calculated by reference to the daily
net assets of the Eligible Funds, as defined below (with such daily
net assets to include, in the case of Eligible Funds whose advisory
fees are calculated by reference to net assets that include net
assets attributable to preferred stock issued by or
C-1
borrowings by the fund, such leveraging net assets) ("Complex-Level
Assets"), pursuant to the following annual fee schedule:
<Table>
<Caption>
-------------------------------------------------------------------
COMPLEX-LEVEL DAILY MANAGED ASSETS(1) RATE
-------------------------------------------------------------------
First $55 billion .2000%
Next $1 billion .1800%
Next $1 billion .1600%
Next $3 billion .1425%
Next $3 billion .1325%
Next $3 billion .1250%
Next $5 billion .1200%
Next $5 billion .1175%
Next $15 billion .1150%
-------------------------------------------------------------------
</Table>
(1) With respect to Complex-Level Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined
at a later date. The parties agree that, in the unlikely event
that Complex-Wide Assets reach $91 billion prior to the parties
reaching an agreement as to the Complex-Level Fee rate or rates
to be applied to such assets, the Complex-Level Fee rate for
such Complex-Level Assets shall be .1400% until such time as
the parties agree to a different rate or rates.
C. "Eligible Funds", for purposes of this Agreement, shall mean all
Nuveen-branded closed-end and open-end registered investment companies
organized in the United States. Any open-end or closed-end funds that
subsequently become part of the Nuveen complex because either (a)
Nuveen Investments, Inc. or its affiliates acquire the investment
adviser to such funds (or the adviser's parent), or (b) Nuveen
Investments, Inc. or its affiliates acquire the fund's adviser's
rights under the management agreement for such fund, will be evaluated
by both Nuveen management and the Nuveen Funds' Board, on a
case-by-case basis, as to whether or not these acquired funds would be
included in the Nuveen complex of Eligible Funds and, if so, whether
there would be a basis for any adjustments to the complex-level
breakpoints.
D. For the month and year in which this Agreement becomes effective, or
terminates, there shall be an appropriate proration on the basis of
the number of days that the Agreement shall have been in effect 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. The Adviser shall arrange for officers or employees of the Adviser to
serve, without compensation from the Fund, as <trustees/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.
4. Subject to applicable statutes and regulations, it is understood that
officers, <trustees/directors>, or agents of the Fund are, or may be,
interested in the Adviser as officers, directors, agents, shareholders
or otherwise, and that the
C-2
officers, directors, shareholders and agents of the Adviser may be
interested in the Fund otherwise than as trustees, officers or agents.
5. The Adviser shall not be liable for any loss sustained by reason of the
purchase, sale or retention of any security, whether or not such
purchase, sale or retention shall have been based upon the
investigation and research made by any other individual, firm or
corporation, if such recommendation shall have been selected with due
care and in good faith, except loss resulting from willful misfeasance,
bad faith, or gross negligence on the part of the Adviser in the
performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
6. The Adviser currently manages other investment accounts and funds,
including those with investment objectives similar to the Fund, and
reserves the right to manage other such accounts and funds in the
future. Securities considered as investments for the Fund may also be
appropriate 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
portfolios of its other investment accounts and funds purchasing
securities whenever decisions are made to purchase or sell securities
by the Fund and 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 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 and such other accounts
and funds, the size of investment commitments generally held by the
Fund and such accounts and funds, and the opinions of the persons
responsible for recommending investments to the Fund and such other
accounts and funds.
7. This Agreement shall continue in effect until [August l, 2006], 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 no less than sixty (60)
days' written notice to the other party. The Fund may effect
termination by action of the Board or by vote of a majority of the
outstanding voting securities of the Fund, accompanied by appropriate
notice.
This Agreement may be terminated, at any time, without the payment of
any penalty, by the Board of the Fund, or by vote of a majority of the
outstanding voting securities 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.
C-3
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.
10. The Fund's Declaration of Trust is on file with the Secretary of the
<ENTITY'S STATE OF ORGANIZATION>. This Agreement is executed on behalf
of the Fund by the Fund's officers as officers and not individually and
the obligations imposed upon the Fund by this Agreement are not binding
upon any of the Fund's Board, officers or shareholders individually but
are binding only upon the assets and property of the Fund.
11. This Agreement shall be construed in accordance with applicable federal
law and (except as to Section 10 hereof which shall be construed in
accordance with the laws of <ENTITY'S STATE OF ORGANIZATION>) the laws
of the State of Illinois.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed on the day and year above written.
<NAME OF FUND>
By:
-------------------------
Vice President
Attest:
-------------------------
Assistant Secretary
NUVEEN ASSET MANAGEMENT
By:
-------------------------
Managing Director
Attest:
-------------------------
Assistant Secretary
C-4
APPENDIX D
COMPLEX-LEVEL FEE RATES
<Table>
<Caption>
- ----------------------------------------------------------------------
COMPLEX DAILY NET ASSETS FEE RATE
- ----------------------------------------------------------------------
First $55 billion 0.2000%
Next $1 billion 0.1800%
Next $1 billion 0.1600%
Next $3 billion 0.1425%
Next $3 billion 0.1325%
Next $3 billion 0.1250%
Next $5 billion 0.1200%
Next $5 billion 0.1175%
Next $15 billion 0.1150%
- ----------------------------------------------------------------------
</Table>
FUND-LEVEL FEE RATES, AGGREGATE MANAGEMENT FEES
PAID AND NET ASSETS
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Arizona Dividend
Advantage For the first $125 million 0.4500% $ 123,468(3) $ 35,866,778.44
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Arizona Dividend
Advantage 2 For the first $125 million 0.4500% $ 193,689(3) $ 56,311,237.18
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-1
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Arizona Dividend
Advantage 3 For the first $125 million 0.4500% $ 215,337(4) $ 66,880,116.52
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Arizona Premium
Income For the first $125 million 0.4500% $ 602,609 $ 94,687,122.34
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Dividend
Advantage For the first $125 million 0.4500% $1,799,300(5) $545,213,540.40
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Dividend
Advantage 2 For the first $125 million 0.4500% $1,112,234(3) $337,225,099.27
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Dividend
Advantage 3 For the first $125 million 0.4500% $1,775,022(3) $550,227,811.57
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-2
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
California Investment
Quality For the first $125 million 0.4500% $2,054,712 $325,992,215.77
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Municipal
Market Opportunity For the first $125 million 0.4500% $1,244,771 $198,291,407.65
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Municipal
Value .15% of the Fund's Average Weekly $1,464,310 $258,273,747.57
Net Assets and 4.125% of the gross
interest income of the fund computed
in each case on an annualized basis.
- ------------------------------------------------------------------------------------------------------------
California
Performance Plus For the first $125 million 0.4500% $1,945,314 $308,153,798.08
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-3
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
California Premium
Income For the first $125 million 0.4500% $ 812,288 $128,749,232.13
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Quality
Income For the first $125 million 0.4500% $3,301,803 $532,907,931.01
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
California Select
Quality For the first $125 million 0.4500% $3,462,418 $556,814,346.77
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured California
Dividend Advantage For the first $125 million 0.4500% $1,180,628(3) $356,369,914.34
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-4
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Insured California
Premium Income For the first $125 million 0.4500% $ 960,645 $149,080,678.53
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured California
Premium Income 2 For the first $125 million 0.4500% $1,829,431 $288,681,364.08
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured California
Tax-Free Advantage For the first $125 million 0.4500% $ 427,132(4) $133,309,266.67
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Connecticut Dividend
Advantage For the first $125 million 0.4500% $ 202,920(3) $ 58,706,114.84
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-5
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Connecticut Dividend
Advantage 2 For the first $125 million 0.4500% $ 187,048(3) $ 53,412,978.26
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Connecticut Dividend
Advantage 3 For the first $125 million 0.4500% $ 313,090(4) $ 96,076,842.85
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Connecticut Premium
Income For the first $125 million 0.4500% $ 769,502 $119,421,229.48
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Florida Investment
Quality For the first $125 million 0.4500% $2,453,270 $388,090,306.39
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-6
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Florida Quality
Income For the first $125 million 0.4500% $2,140,073 $339,335,914.31
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured Florida
Premium Income For the first $125 million 0.4500% $2,184,865 $342,770,328.91
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured Florida Tax-
Free Advantage For the first $125 million 0.4500% $ 278,005(4) $ 85,720,337.34
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Georgia Dividend
Advantage For the first $125 million 0.4500% $ 155,384(3) $ 44,790,939.41
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-7
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Georgia Dividend
Advantage 2 For the first $125 million 0.4500% $ 324,428(4) $ 99,550,316.37
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Georgia Premium
Income For the first $125 million 0.4500% $ 546,917 $ 85,039,796.74
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Massachusetts
Dividend Advantage For the first $125 million 0.4500% $ 157,264(3) $ 45,297,708.83
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Massachusetts Premium
Income For the first $125 million 0.4500% $ 674,834 $105,094,405.95
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-8
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Insured Massachusetts
Tax-Free Advantage For the first $125 million 0.4500% $ 197,817(4) $ 60,875,145.80
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Maryland Dividend
Advantage For the first $125 million 0.4500% $ 329,044(3) $ 94,652,241.37
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Maryland Dividend
Advantage 2 For the first $125 million 0.4500% $ 332,863(3) $ 96,030,508.02
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Maryland Dividend
Advantage 3 For the first $125 million 0.4500% $ 381,943(4) $117,934,176.36
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Maryland Premium
Income For the first $125 million 0.4500% $1,508,376 $238,263,730.37
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-9
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Michigan Dividend
Advantage For the first $125 million 0.4500% $ 163,634(3) $ 47,741,494.83
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Michigan Premium
Income For the first $125 million 0.4500% $1,134,184 $176,984,362.53
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Michigan Quality
Income For the first $125 million 0.4500% $1,778,400 $280,647,706.52
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Missouri Premium
Income For the first $125 million 0.4500% $ 320,034 $ 49,945,994.56
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-10
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
New Jersey Dividend
Advantage For the first $125 million 0.4500% $ 508,441(3) $149,219,628.29
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
New Jersey Dividend
Advantage 2 For the first $125 million 0.4500% $ 357,476(3) $104,777,531.81
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
New Jersey Investment
Quality For the first $125 million 0.4500% $2,994,179 $476,699,613.57
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
New Jersey Premium
Income For the first $125 million 0.4500% $1,813,391 $282,604,442.61
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
New York Dividend
Advantage For the first $125 million 0.4500% $ 749,496(6) $215,178,569.91
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-11
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
New York Dividend
Advantage 2 For the first $125 million 0.4500% $ 509,021(3) $$148,250,817.38
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
New York Investment
Quality For the first $125 million 0.4500% $2,753,389 $428,143,573.80
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.375%
- ------------------------------------------------------------------------------------------------------------
New York Municipal
Value .15% of the Fund's Average Weekly Net $ 849,063 $152,284,416.77
Assets and 4.125% of the gross
interest income of the fund computed
in each case on an annualized basis.
- ------------------------------------------------------------------------------------------------------------
New York Performance
Plus For the first $125 million 0.4500% $2,351,607 $371,913,221.26
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
New York Quality
Income For the first $125 million 0.4500% $3,637,476 $577,602,969.23
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-12
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
New York Select
Quality For the first $125 million 0.4500% $3,578,885 $568,581,150.92
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured New York
Dividend Advantage For the first $125 million 0.4500% $ 633,143(3) $186,377,023.35
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured New York
Premium Income For the first $125 million 0.4500% $1,276,279 $197,789,639.75
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Insured New York Tax-
Free Advantage For the first $125 million 0.4500% $ 256,382(4) $ 79,745,666.61
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-13
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
North Carolina
Dividend Advantage For the first $125 million 0.4500% $ 179,339(3) $ 51,545,912.16
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
North Carolina
Dividend
Advantage 2 For the first $125 million 0.4500% $ 298,437(3) $ 85,597,428.77
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
North Carolina
Dividend
Advantage 3 For the first $125 million 0.4500% $ 278,578(4) $ 85,560,413.03
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
North Carolina
Premium Income For the first $125 million 0.4500% $ 919,034 $142,025,704.07
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-14
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Ohio Dividend
Advantage For the first $125 million 0.4500% $ 332,633(3) $ 97,096,584.52
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Ohio Dividend
Advantage 2 For the first $125 million 0.4500% $ 246,875(3) $ 72,044,071.03
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Ohio Dividend
Advantage 3 For the first $125 million 0.4500% $ 171,739(3) $ 50,152,889.77
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Ohio Quality Income For the first $125 million 0.4500% $1,519,417 $238,490,040.90
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Pennsylvania Dividend
Advantage For the first $125 million 0.4500% $ 269,494(3) $ 77,005,741.43
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-15
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Pennsylvania Dividend
Advantage 2 For the first $125 million 0.4500% $ 299,611(3) $ 86,959,027.32
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Pennsylvania
Investment Quality For the first $125 million 0.4500% $2,438,416 $385,207,061.28
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Pennsylvania Premium
Income 2 For the first $125 million 0.4500% $2,289,102 $357,463,788.30
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Texas Quality Income For the first $125 million 0.4500% $1,373,508 $215,616,002.57
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
D-16
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
FEES PAID
TO THE
ADVISER
DURING LAST NET ASSETS
FUND FUND AVERAGE DAILY NET ASSETS FEE RATE(1) FISCAL YEAR(2) AS OF 5/1/05
- ------------------------------------------------------------------------------------------------------------
Virginia Premium
Income For the first $125 million 0.4500% $1,288,717 $203,180,367.29
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For the next $3 billion 0.3875%
For net assets of $5 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Virginia Dividend
Advantage For the first $125 million 0.4500% $ 246,627(3) $ 72,027,183.19
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
Virginia Dividend
Advantage 2 For the first $125 million 0.4500% $ 451,576(3) $130,793,038.11
For the next $125 million 0.4375%
For the next $250 million 0.4250%
For the next $500 million 0.4125%
For the next $1 billion 0.4000%
For net assets of $2 billion and over 0.3750%
- ------------------------------------------------------------------------------------------------------------
</Table>
(1) The fee rates shown above went into effect on August 1, 2004. Prior to
August 1, 2004, the investment management fee paid by each Fund was
calculated using the above fund-level fee rates plus 0.20% at each
breakpoint asset level. There was no complex-level component of the
investment management fee prior to August 1, 2004.
(2) Prior to January 1, 2005, Nuveen Advisory Corp. ("NAC") and Nuveen
Institutional Advisory Corp. ("NIAC") provided investment management
services to the Funds. Effective January 1, 2005, NAC and NIAC were merged
into NAM. As a result, NAC and NIAC became a part of NAM and ceased to
exist separately. Prior to the reorganization, management fees were paid to
NAC and NIAC. Currently and under the New Investment Management Agreements,
all management fees will be paid to NAM. Like NAM, NAC and NIAC were
wholly-owned subsidiaries of Nuveen.
(3) Includes mandatory fee waiver of 0.30%.
(4) Includes mandatory fee waiver of 0.32%.
(5) Includes mandatory fee waiver of 0.30% for the period of September 1, 2003
through July 31, 2004 and 0.25% for the period August 1, 2004 through
August 31, 2004.
(6) Includes mandatory fee waiver of 0.30% for the period of October 1, 2003
through July 31, 2004 and 0.25% for the period August 1, 2004 through
September 30, 2004.
D-17
APPENDIX E
OFFICERS AND DIRECTORS OF
NUVEEN ASSET MANAGEMENT ("NAM")
<Table>
<Caption>
- ---------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION
- ---------------------------------------------------------------------------------
John P. Amboian President and Director of Nuveen Investments, Inc. and
Nuveen Asset Management, Nuveen Investments, LLC,
Rittenhouse Asset Management, Inc., Nuveen Investments
Advisors Inc., and Nuveen Investments Holdings, Inc.
Alan Berkshire Senior Vice President, Secretary and General Counsel of
Nuveen Investments, Inc., Nuveen Asset Management,
Nuveen Investments, LLC, Rittenhouse Asset Management,
Inc. and Nuveen Investments Holdings, Inc.; Senior Vice
President and Secretary of Nuveen Institutional
Advisory Corp.,* Nuveen Advisory Corp.* and Nuveen
Investments Advisors Inc.; Assistant Secretary of NWQ
Investment Management Company, LLC and Secretary of
Symphony Asset Management, LLC.
Stuart J. Cohen Vice President, Assistant Secretary and Assistant
General Counsel of Nuveen Asset Management, Nuveen
Investments, LLC, Nuveen Investments Holdings, Inc. and
Rittenhouse Asset Management, Inc.; Vice President of
Nuveen Investments Advisers, Inc.
Peter H. D'Arrigo Vice President of Nuveen Investments, LLC and Nuveen
Asset Management; Assistant Vice President and
Treasurer of Nuveen Investments, Inc.; Assistant
Treasurer of NWQ Investments Management Company, LLC;
Vice President and Treasurer of Nuveen Rittenhouse
Asset Management, Inc.; Vice President and Treasurer of
funds in Nuveen Fund complex.
Jessica R. Droeger Vice President and Assistant Secretary of Nuveen Asset
Management; Assistant General Counsel of Nuveen
Investments, LLC; Vice President and Secretary of funds
in Nuveen fund complex.
William M. Fitzgerald Managing Director of Nuveen Asset Management; Vice
President of Nuveen Investments Advisers Inc.; Vice
President of funds in Nuveen fund complex.
James D. Grassi Vice President and Deputy Director of Compliance of
Nuveen Investments, LLC, Nuveen Asset Management,
Nuveen Investments Advisers Inc. and Rittenhouse Asset
Management, Inc.; Vice President and Chief Compliance
Officer of funds in Nuveen fund complex.
Sherri A. Hlavacek Vice President and Corporate Controller of Nuveen Asset
Management, Nuveen Investments, LLC, Nuveen Investments
Holdings, Inc., Nuveen Investments Advisers, Inc. and
Rittenhouse Asset Management, Inc.; Vice President and
Controller of Nuveen Investments, Inc.; Certified
Public Accountant.
Mary E. Keefe Managing Director of Nuveen Investments, Inc.; Managing
Director and Chief Compliance Officer of Nuveen Asset
Management, Nuveen Investments, LLC, Nuveen Investments
Advisers Inc. and Rittenhouse Asset Management, Inc.;
Chief Compliance Officer of Symphony Asset Management,
LLC.
</Table>
E-1
<Table>
<Caption>
- ---------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION
- ---------------------------------------------------------------------------------
Larry W. Martin Vice President, Assistant Secretary and Assistant
General Counsel of Nuveen Investments, LLC, Nuveen
Investments, Inc. and Rittenhouse Asset Management,
Inc.; Vice President and Assistant Secretary of Nuveen
Asset Management and Nuveen Investments Advisers Inc.;
Assistant Secretary of NWQ Investment Management
Company, LLC; Vice President and Assistant Secretary of
funds in Nuveen fund complex.
Timothy R.
Schwertfeger Chairman and Director of Nuveen Investments, Inc.,
Nuveen Asset Management and Nuveen Investments, LLC;
Director of Institutional Capital Corporation; Chairman
and Director of Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers, Inc.; Chairman
of the Board and Board Member of funds in Nuveen fund
complex.
Margaret E. Wilson Senior Vice President, Finance of Nuveen Investments,
Inc., Nuveen Asset Management, Nuveen Investments, LLC,
Rittenhouse Asset Management, Inc., Nuveen Investments
Advisors Inc., and Nuveen Investments Holdings, Inc.
Gifford R. Zimmerman Managing Director, Assistant Secretary and Associate
General Counsel of Nuveen Investments, LLC and Nuveen
Asset Management; Managing Director and Assistant
Secretary of Nuveen Investments, Inc.; Assistant
Secretary of NWQ Investment Management Company, LLC;
Vice President and Assistant Secretary of Nuveen
Investments Advisers Inc.; Managing Director, Associate
General Counsel and Assistant Secretary of Rittenhouse
Asset Management, Inc.; Chief Administrative Officer of
funds in Nuveen fund complex.
- ---------------------------------------------------------------------------------
</Table>
E-2
[NUVEEN INVESTMENTS LOGO]
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606-1286
(800) 257-8787
www.nuveen.com NFZ0705
[NUVEEN INVESTMENTS LOGO]
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com
3 EASY WAYS TO VOTE YOUR PROXY
1. Automated Touch Tone Voting: Call toll-free 1-800-690-6903 and follow the
recorded instructions.
2. On the Internet at www.proxyweb.com, and follow the simple instructions.
3. Sign, Date and Return this proxy card using the enclosed postage-paid
envelope.
**** CONTROL NUMBER: 999 999 999 999 98 ****
[FUND NAME PRINTS HERE]
THIS PROXY IS SOLICITED BY THE BOARD OF THE FUND
FOR A SPECIAL MEETING OF SHAREHOLDERS, JULY 26, 2005
A Special Meeting of shareholders will be held in the Assembly Room of The
Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois, on Tuesday,
July 26, 2005, at 10:30 a.m., Chicago time. 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
Special Meeting of shareholders to be held on July 26, 2005, 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.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Special Meeting.
PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, SUCH SHARES WILL BE VOTED "FOR" THE PROPOSAL SET FORTH IN THIS PROXY.
FOR AGAINST ABSTAIN
1. Approval of the new investment management [ ] [ ] [ ]
agreement.
PLEASE SIGN ON REVERSE SIDE