IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Aquilasm Group of Funds
Narragansett Insured Tax-Free Income Fund
380 Madison Avenue, Suite 2300, New York, N Y 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
ON SEPTEMBER 7, 2000
TO SHAREHOLDERS OF THE FUND:
The purpose of this Notice is to advise you that an Annual
Meeting of the Shareholders of Narragansett Insured Tax-Free
Income Fund (the "Fund") will be held:
Place: (a) at the Rhode Island Convention Center
1 Sabin Street
Providence, Rhode Island;
Time: (b) on September 7, 2000
at 2:30 p.m. local time;
Purposes: (c) for the following purposes:
(i) to elect six Trustees; each Trustee
elected will hold office until the next annual
meeting of the Fund's shareholders or until his or
her successor is duly elected (Proposal No. 1);
(ii) to ratify (that is, to approve) or
reject the selection of KPMG LLP as the Fund's
independent auditors for the fiscal year ending
June 30, 2001, (Proposal No. 2);
(iii) to act upon a proposal to change the
fundamental policies of the Fund to allow the use
of additional nationally recognized statistical
rating organizations for rating obligations the
Fund may purchase (Proposal No. 3); and
(iv) to act upon any other matters which
may properly come before the Meeting at the
scheduled time and place or any adjourned meeting
or meetings.
Who Can
Vote What
Shares: (d) To vote at the Meeting, you must have been a
shareholder on the Fund's records at the close of
business on June 15, 2000 (the "record date").
Also, the number of shares of each of the Fund's
outstanding classes of shares that you held at
that time and the respective net asset values of
each class of shares at that time determine the
number of votes you may cast at the Meeting (or
any adjourned meeting or meetings).
By Order of the Board of Trustees,
EDWARD M. W. HINES
Secretary
July 14, 2000
PLEASE NOTE:
If you do not expect to attend the Meeting, please indicate
voting instructions in any of three ways: by telephone, by e-mail
or by completing the enclosed proxy card and returning it in the
accompanying stamped envelope. To avoid unnecessary expense to
the Fund, we request your cooperation in voting no matter how
large or small your holding may be.
<PAGE>
Narragansett Insured Tax-Free Income Fund
380 Madison Avenue, Suite 2300, New York, New York 10017
PROXY STATEMENT
INTRODUCTION
The purpose of the Notice (the first two pages of this
document) is to advise you of the time, place and purposes of an
Annual Meeting of the Shareholders of Narragansett Insured Tax-
Free Income Fund (the "Fund"). The purpose of this Proxy
Statement (all the rest of this document) is to give you
information on which you may base your decisions as to the
choices, if any, you make in voting.
A copy of the Fund's most recent annual report and most
recent semi-annual report will be sent to you without charge upon
written request to the Fund's Distributor, Aquila Distributors,
Inc., 380 Madison Avenue, Suite 2300, New York, NY 10017 or by
calling 800-453-6864 toll-free or 212-697-6666.
The Fund's founder and Manager (the "Manager") is Aquila
Management Corporation, 380 Madison Avenue, Suite 2300, New York,
NY 10017. The Fund's principal underwriter (the "Distributor") is
Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New
York, NY 10017. The Fund's Investment Sub-Adviser is Citizens
Bank of Rhode Island (the "Sub-Adviser"), One Citizens Plaza,
Providence, RI 02903.
This Notice and Proxy Statement are first being mailed on or
about July 14, 2000.
You should read the Proxy Statement prior to voting. Then,
you may vote in one of three ways:
Proxy Card
The enclosed proxy card authorizes the persons named (or
their substitutes) to vote your shares; the Fund calls these
persons the "proxy holders." As to the election of Trustees you
may authorize the proxy holders to vote your shares for the
entire slate indicated below by marking the appropriate box on
the proxy card or by merely signing and returning your proxy card
with no instructions. Or you may withhold the authority of the
proxy holders to vote on the election of Trustees by marking the
appropriate box. Also, you may withhold that authority as to any
particular nominee by following the instructions on the proxy
card.
As to the other matters listed on the proxy card, you may
direct the proxy holders to vote your shares on these proposals
by marking the appropriate box "For" or "Against" or instruct
them not to vote your shares on the proposal by marking the
"Abstain" box. If you return your signed proxy card and do not
mark the box on a proposal, the proxy holders will vote your
shares for that proposal.
Telephone Voting
To vote your shares by telephone, call toll free 1-800-
690-6903. You will be prompted to enter the 12-digit control
number on the enclosed proxy card. Follow the recorded
instructions using your proxy card as a guide. If you vote by
phone, you need not return the proxy card by mail.
Internet Voting
To vote your shares by the Internet, please contact the
Fund at http://www.proxyvote.com. You will be prompted to enter
the 12-digit control number on the enclosed proxy card. Follow
the instructions on the screen, using your proxy card as a guide.
If you vote by the Internet, you need not return the proxy card
by mail.
General Information
You may end the power of the proxy holders to vote your
shares by: (i) so notifying the Fund in writing; (ii) signing a
new and different proxy card (if the Fund receives it before the
old one is used); (iii) voting your shares at the meeting in
person or by your duly appointed agent; or (iv) calling the toll
free number above or contacting the Fund's Internet address
above, entering your 12-digit control number and revoking your
previous vote.
Shares held by brokers in "street name" and not voted or
marked as abstentions will not be counted for purposes of
determining a quorum or voted on any matter. This policy may make
it more difficult to obtain the vote required to approve Proposal
No. 3.
The Fund is sending you this Notice and Proxy Statement in
connection with the solicitation by its Trustees of proxies to be
used at the Annual Meeting to be held at the time and place and
for the purposes indicated in the Notice or any adjourned meeting
or meetings. Whenever it is stated in this Proxy Statement that a
matter is to be acted on at the Meeting, this means the Meeting
held at the scheduled time or any adjourned meeting or meetings.
The Fund pays the costs of the solicitation. Proxies are
being solicited by the use of the mails; they may also be
solicited by telephone, facsimile and personal interviews.
Brokerage firms, banks and others may be requested to forward
this Notice and Proxy Statement to beneficial owners of the
Fund's shares so that these owners may authorize the voting of
their shares. The Fund will pay these firms their out-of-pocket
expenses for doing so.
On the record date, the Fund had four classes of shares
outstanding. All shareholders of the Fund are entitled to vote at
the meeting. Each shareholder on the record date is entitled to
one vote for each dollar (and a proportionate fractional vote for
each fraction of a dollar) of net asset value (determined as of
the record date) represented by full and fractional shares of any
class held on the record date. On the record date, the net asset
value per share of each of the Fund's outstanding classes of
shares was as follows: Class A Shares, $9.88; Class C Shares,
$9.88; Class Y Shares, $9.89 and Class I Shares, $9.88. The
meeting is expected to act only upon matters that affect the Fund
as a whole: the election of Trustees and the action on the
proposals. On matters that affect the Fund as a whole, all
shareholders of the Fund, including the shareholders of all
classes of the Fund, are entitled to vote at the meeting.
On the record date, the total number of shares outstanding
for each class of shares was as follows: Class A Shares,
6,045,345; Class C Shares, 474,721; Class Y Shares, 229,142; and
Class I Shares, 7,590.
On the record date, the following institutional holders held 5%
or more of the Fund's outstanding shares. On the basis of
information received from the holders the Fund's management
believes that all of the shares indicated are held for the
benefit of clients
Name and address Number of shares Percent of class
of the holder of
record
Merrill Lynch,
Pierce, Fenner & Smith,
Inc., 4800 Deer Lake Drive
East, Jacksonville, FL 372,351 Class A Shares 6.1%
41,829 Class C Shares 8.6%
National Financial
Services Corp.,
200 Liberty Street,
New York, NY 10281 576,978 Class A Shares 9.5%
Fiserv Securities, Inc.
One Commerce Square,
2005 Market Street
Philadelphia, PA 842,632 Class A Shares 13.9%
111,610 Class C Shares 23%
(held in two accounts)
Donaldson Lufkin
Jenrette Securities
Corporation,
P.O. Box 2052,
Jersey City, NJ 50,860 Class C Shares 10.5%
46,754 Class Y Shares 20.4%
Citizens Bank,
870 Westminster Street,
Providence, RI 175,847 Class Y Shares 76.7%
Perry Baker & Co
The Washington Trust Company
23 Broad
Westerly, RI 7,590 Class I Shares 100%
Additional 5% shareholders
Mark S. Mandell,
1 Park Row,
Providence, RI 26,048 Class C Shares 5.4%
The Fund's management is not aware of any other person
beneficially owning more than 5% of any class of its outstanding
shares as of such date.
ELECTION OF TRUSTEES
(Proposal No. 1)
At the Meeting, six Trustees are to be elected. Each Trustee
elected will serve until the next annual meeting or until his or
her successor is duly elected. The nominees selected by the
Trustees are named in the table below. See "Introduction" above
for information as to how you can instruct the proxy holders as
to the voting of your shares as to the election of Trustees.
All of the nominees are presently Trustees and were elected
by the shareholders in October, 1999. The Trustees and officers
as a group own less than 1% of the outstanding shares of the
Fund. In the material below and elsewhere in this Proxy
Statement, Aquila Management Corporation is referred to as the
"Manager" and the Fund's Distributor, Aquila Distributors, Inc.,
is referred to as the "Distributor." Mr. Herrmann is an
interested person of the Fund as that term is defined in the
Investment Company Act of 1940 (the "1940 Act") as an officer of
the Fund and a director, officer and shareholder of the Manager
and the Distributor. Mr. Duffy is an interested person as a
director of the Sub-Adviser. They are so designated by an
asterisk.
In the following material Hawaiian Tax-Free Trust, Tax-Free
Trust of Arizona, Tax-Free Trust of Oregon, Tax-Free Fund of
Colorado, Churchill Tax-Free Fund of Kentucky, Narragansett
Insured Tax-Free Income Fund (this Fund) and Tax-Free Fund For
Utah, each of which is a tax-free municipal bond fund, are called
the "Aquila Bond Funds"; Pacific Capital Cash Assets Trust,
Capital Cash Management Trust, Capital Cash U.S. Government
Securities Trust, Churchill Cash Reserves Trust, Pacific Capital
U.S. Government Securities Cash Assets Trust and Pacific Capital
Tax-Free Cash Assets Trust, each of which is a money-market fund,
are called the "Aquila Money-Market Funds"; and Aquila Cascadia
Equity Fund and Aquila Rocky Mountain Equity Fund are called the
"Aquila Equity Funds."
Described in the following material are the name, address,
positions with the Fund, age as of the record date and business
experience during at least the past five years of each nominee
and each officer of the Fund. All shares listed as owned by the
Trustees are Class A Shares unless indicated otherwise.
<TABLE>
<CAPTION>
<S> <C> <C>
Name, Position Business Experience
with the Fund,
Address, Age,
Shares owned
Lacy B. Herrmann* Founder and Chairman of the Board of Aquila
Chairman of the Management Corporation, the sponsoring
Board of Trustees organization and Manager or Administrator
380 Madison Avenue and/or Adviser or Sub-Adviser to the
New York, NY Aquila Money-Market Funds, the Aquila Bond
10017 Funds and the Aquila Equity Funds,
Age: 71 and Founder, Chairman of the Board of Trustees
Shares Owned: 576(1) and (currently or until 1998) President of each
since its establishment, beginning in
1984; Director of Aquila Distributors,
Inc., distributor of the above funds,
since 1981 and formerly Vice President
or Secretary, 1981-1998; President and a
Director of STCM Management Company,
Inc., sponsor and sub-adviser to Capital
Cash Management Trust; Founder and
Chairman of several other money market
funds; Director or Trustee of OCC Cash
Reserves, Inc. and Quest For Value
Accumulation Trust, and Director or
Trustee of Oppenheimer Quest Value Fund,
Inc., Oppenheimer Quest Global Value
Fund, Inc. and Oppenheimer Rochester
Group of Funds, each of which is an open-
end investment company; Trustee of Brown
University, 1990-1996 and currently
Trustee Emeritus; actively involved for
many years in leadership roles with
university, school and charitable
organizations.
(1) Held of record by the Manager.
Vernon R. Alden Director of Sonesta International Hotels
20 Park Place Corporation, Boston, Massachusetts
Suite 1010 and General Independent Partner of
Boston, MA the Merrill Lynch-Lee Funds; Former Director
02116 of Colgate-Palmolive Company, Digital Equipment
Trustee Corporation, Intermet Corporation, The McGraw
Age: 77 Hill and The Mead Corporations; Chairman of the
Shares Owned: 214 Board and Executive Committee of The Boston
Company, Inc., a financial services
company, 1969-1978; Trustee of Tax-Free
Trust of Oregon since 1988, of Hawaiian
Tax-Free Trust, Pacific Capital Cash
Assets Trust, Pacific Capital Tax-Free
Cash Assets Trust and Pacific Capital
U.S. Government Securities Cash Assets
Trust since 1989, of Cascades Cash Fund,
1989-1994, of Narragansett Insured Tax-
Free Income Fund (this Fund) since 1992,
and of Aquila Cascadia Equity Fund since
1996; Associate Dean and member of the
faculty of Harvard University Graduate
School of Business Administration, 1951-
1962; member of the faculty and Program
Director of Harvard Business School -
University of Hawaii Advanced Management
Program, summer of 1959 and 1960;
President of Ohio University, 1962-1969;
Chairman of The Japan Society of Boston,
Inc., and member of several Japan-
related advisory councils; Chairman of
the Massachusetts Business Development
Council and the Massachusetts Foreign
Business Council, 1978-1983; Trustee
Emeritus, Boston Symphony Orchestra;
Chairman of the Massachusetts Council on
the Arts and Humanities, 1972-1984;
Member of the Board of Fellows of Brown
University, 1969-1986; Trustee of
various other cultural and educational
organizations; Honorary Consul General
of the Royal Kingdom of Thailand;
Received Decorations from the Emperor of
Japan (1986) and the King of Thailand
(1996 and 1997).
Paul Y. Clinton Principal of Clinton Management
Trustee Associates, a financial and venture
39 Blossom Avenue capital consulting firm; formerly
Osterville, MA Director of External Affairs
Age: 69 of Kravco Corporation, a national real Estate
Shares Owned: 241 owner and developer, 1984-1995; Formerly
President of Essex Management
Corporation, a management and financial
consulting company, 1979-1983; Trustee
of Capital Cash Management Trust since
1979, of Narragansett Insured Tax-Free
Income Fund (this Fund) since 1996 and
of Prime Cash Fund (which is inactive),
since 1993; Trustee of Short Term Asset
Reserves 1984-1996; general partner of
Capital Growth Fund, a venture capital
partnership, 1979-1982; President of
Geneve Corp., a venture capital fund,
1970-1978; formerly Chairman of Woodland
Capital Corp., a small business
investment company; formerly Vice
President, W.R. Grace & Co; Director or
Trustee of OCC Cash Reserves, Inc.,
Oppenheimer Quest Global Value Fund,
Inc., Oppenheimer Quest Value Fund,
Inc., a series of Quest Funds and
Trustee of Quest For Value Accumulation
Trust, and of the Rochester Group of
Funds, each of which is an open-end
investment company; and of the
Oppenheimer Funds Inc. Mid-Cap Fund.
David A. Duffy* Trustee of Narragansett Insured Tax-Free
Trustee Income Fund (this Fund) since 1995.
275 Stony Lane President, Duffy& Shanley, Inc., an
North Kingstown, advertising, marketing and public relations
Rhode Island 02852 firm since 1973; Director of Citizens Bank of
Age: 60 Rhode Island since 1999; National Chairman of
Shares Owned: 558 the National Conference for Community and
Justice (formerly the National
Conference of Christians and Jews); Vice
Chairman of the Providence College Board
of Trustees and Chairman of the
College's President's Council; Past
Chair and current member of the
Executive Committee of the Greater
Providence Chamber of Commerce; past
Chair of the Rhode Island Sports
Council; past Chair of the Rhode Island
Public Telecommunications Authority; and
many other civic and non-profit
organizations. He has been the
recipient of numerous awards for public
service. He served with the U.S. Army.
William J. Chairman and founder (1975)
Nightingale and Senior Advisor since 1995
Trustee of Nightingale & Associates,
1266 East Main Street L.L.C., a general management
Stamford, Connecticut consulting firm focusing on
06902 interim management, divestitures,
Age: 70 turnaround of troubled companies,
Shares Owned: 723 corporate restructuring and financial
advisory services; President, Chief
Executive Officer and Director of Bali
Company, Inc., a manufacturer of women's
apparel, which became a subsidiary of
Hanes Corporation, 1970-1975; prior to
that, Vice President and Chief Financial
Officer of Hanes Corporation after being
Vice President-Corporate Development and
Planning of that company, 1968-1970;
formerly Senior Associate of Booz, Allen
& Hamilton, management consultants,
after having been Marketing Manager with
General Mills, Inc.; Trustee of
Narragansett Insured Tax-Free Income
Fund (this Fund) since 1992 and of
Churchill Cash Reserves Trust and
Churchill Tax-Free Fund of Kentucky
since 1993; Director of Kasper A.S.L.
Ltd., an apparel company, since 1997, of
Ring's End, Inc., a building materials
and construction company, since 1989,
and of Furr's/Bishop's Inc., operator of
a chain of restaurants, since 1998.
J. William Weeks Trustee of Narragansett Insured
Trustee Tax-Free Income Fund (this Fund) and of Tax-
210 Jamaica Lane Free Fund of Colorado since 1995;
Palm Beach, FL 33480 Senior Vice President of Tax-Free Fund
Age: 73 of Colorado and Narragansett Insured
Shares owned: 642 Tax-Free Income Fund (this Fund), 1992-1995;
Vice President of Hawaiian Tax-Free
Trust, Tax-Free Trust of Arizona, Tax-
Free Trust of Oregon and Churchill Tax-
Free Fund of Kentucky, 1990-1995; Senior
Vice President or Vice President of the
Bond Funds and Vice President of Short
Term Asset Reserves and Pacific Capital
Cash Assets Trust, 1984-1988; President
and Director of Weeks & Co., Inc.,
financial consultants, 1978-1988;
limited partner and investor in various
real estate partnerships since 1988;
Partner of Alex. Brown & Sons,
investment bankers, 1966-1976; Vice
President of Finance and Assistant to
the President of Howard Johnson Company,
a restaurant and motor lodge chain, 1961-
1966; formerly with Blyth & Co., Inc.,
investment bankers.
Diana P. Herrmann, President and Chief Operating Officer of
President the Manager/Administrator since 1997, a
380 Madison Director since 1984, Secretary since 1986
Avenue and previously its Executive Vice
New York, President, Senior Vice President
NY 10017 or Vice President, 1986-1997;
Age: 42 President of various Aquila Bond and
Money-Market Funds since 1998; Assistant
Vice President, Vice President, Senior
Vice President or Executive Vice
President of Aquila Money-Market, Bond
and Equity Funds since 1986; Trustee of
a number of Aquila Money-Market, Bond
and Equity Funds since 1995; Trustee of
Reserve Money-Market Funds, 1999-2000
and of Reserve Private Equity Series,
1998-2000; Assistant Vice President and
formerly Loan Officer of European
American Bank, 1981-1986; daughter of
the Fund's Chairman; Trustee of the
Leopold Schepp Foundation (academic
scholarships) since 1995; actively
involved in mutual fund and trade
associations and in college and other
volunteer organizations.
Stephen J. Caridi Vice President of the Distributor since
Vice 1995, Assistant Vice President 1988-1995,
President Marketing Associate, 1986-1988; Vice
380 Madison President of Hawaiian Tax-Free Trust since
Avenue 1998; Senior Vice President of Narragansett
New York, Insured Tax-Free Income Fund (this Fund) since
NY 10017 1998, Vice President since 1996; Assistant Vice
Age: 39 President of Tax-Free Fund For Utah since 1993;
Mutual Funds Coordinator of Prudential
Bache Securities, 1984-1986; Account
Representative of Astoria Federal
Savings and Loan Association, 1979-1984.
Rose F. Marotta Chief Financial Officer of the Aquila
Chief Financial Officer Money-Market, Bond and Equity Funds
380 Madison Avenue since 1991 and Treasurer, 1981-1991;
New York, NY formerly Treasurer of the predecessor of
10017 Capital Cash Management Trust; Treasurer
Age: 76 and Director of STCM Management Company,
Inc., since 1974; Treasurer of InCap
Management Corporation since 1982, of
the Manager since 1984 and of the
Distributor, 1985-2000.
Richard F. West Treasurer of the Aquila Money-Market,
Treasurer Bond and Equity Funds and of Aquila
380 Madison Avenue Distributors, Inc. since 1992;
New York, NY Associate Director of Furman Selz
10017 Incorporated, 1991-1992; Vice
Age: 64 President of Scudder, Stevens &
Clark, Inc. and Treasurer of Scudder
Institutional Funds, 1989-1991; Vice
President of Lazard Freres Institutional
Funds Group, Treasurer of Lazard Freres
Group of Investment Companies and HT
Insight Funds, Inc., 1986-1988; Vice
President of Lehman Management Co., Inc.
and Assistant Treasurer of Lehman Money
Market Funds, 1981-1985; Controller of
Seligman Group of Investment Companies,
1960-1980.
Lori A Vindigni Assistant Vice President of Aquila Management
Assistant Treasurer Corporation since 1998, formerly Fund Accountant
380 Madison Avenue for the Aquila Group of Investment Companies
New York, NY since 1995; Staff Officer and Fund Accountant of
10017 Citibank Global Asset Management Group of
Age: 33 Investment Companies, 1994-1995; Fund Accounting
Supervisor of Dean Witter Group of
Investment Companies, 1990-1994; BS Kean
College of New Jersey, 1990.
Edward M. W. Hines Partner of Hollyer Brady Smith Troxell
Secretary Barrett Rockett Hines & Mone LLP,
551 Fifth Avenue attorneys, since 1989 and counsel,
New York, NY 1987-1989; Secretary of the Aquila
10176 Money-Market, Bond and Equity Funds since 1982;
Age: 60 Secretary of Trinity Liquid Assets Trust, 1982-
1985 and Trustee of that Trust, 1985-
1986; Secretary of Oxford Cash
Management Fund, 1982-1988.
John M. Herndon Assistant Secretary of the Aquila Money-
Assistant Secretary Market, Bond and Equity Funds since 1995
380 Madison Avenue and Vice President of the Aquila Money-
New York, NY Market Funds since 1990; Vice President of
10017 the Manager since 1990; Investment Services
Age: 60 Consultant and Bank Services Executive
of Wright Investors' Service, a
registered investment adviser, 1983-
1989; Member of the American Finance
Association, the Western Finance
Association and the Society of
Quantitative Analysts.
</TABLE>
The Fund does not currently pay fees to any of the Fund's
officers or to Trustees affiliated with the Manager or the Sub-
Adviser. For its fiscal year ended ********** the Fund paid a
total of $******* in compensation and reimbursement of expenses
to the Trustees. No other compensation or remuneration of any
type, direct or contingent, was paid by the Fund to its Trustees.
The Fund is one of the 15 Funds in the Aquilasm Group of
Funds, which consist of tax-free municipal bond funds, money-
market funds and equity funds. The following table lists the
compensation of all nominees for Trustees who received
compensation from the or from other Funds in the Aquilasm Group
of Funds during the fund's fiscal year None of such Trustees has
any pension or retirement benefits from the Fund or any of the
other Funds in the Aquila group.
Compensation Number of
from all boards on
Compensation Funds which the
from the in the Trustee
Fund Aquilasm serves
Name Group of
Funds
&&&&&&& UPDATE this is as of June 1999
Vernon R. Alden $4,026 $51,802 7
Paul Y. Clinton $4,684 $7,050 2
David A. Duffy $3,500 $3,500 1
William J.
Nightingale $4,461 $15,060 3
J. William Weeks $6,238 $14,458 2
Class A Shares may be purchased without a sales charge by
certain of the Fund's Trustees and officers.
The Fund's Manager is Manager or Administrator to the
Aquilasm Group of Funds, which consists of tax-free municipal
bond funds, money-market funds and equity funds. As of******
2000, these funds had aggregate assets of approximately $**
billion, of which approximately $** billion consisted of assets
of the tax-free municipal bond funds. The Manager is controlled
by Mr. Lacy B. Herrmann, through share ownership directly,
through a trust and by his wife. During the fiscal year ended
***** the Fund paid $***** in fees to the Manager.
During the fiscal year ended *****, $***** was paid under
Part I of the Fund's Distribution Plan to Qualified Recipients
with respect to Class A Shares, of which, $**** was retained by
the Distributor. During the same period $***** was paid under
Part II of the Plan to Qualified Recipients with respect to Class
C Shares, of which $***** (including amounts retained under the
Fund's Shareholder Services Plan was retained by the Distributor.
All of such payments were for compensation.
The Distributor currently handles the distribution of the
shares of fifteen funds (six money-market funds, seven tax-free
municipal bond funds and two equity funds), including the Fund.
Under the Distribution Agreement, the Distributor is responsible
for the payment of certain printing and distribution costs
relating to prospectuses and reports as well as the costs of
supplemental sales literature, advertising and other promotional
activities. The shares of the Distributor are owned 72% by Mr.
Herrmann and other members of his immediate family, 24% by Diana
P. Herrmann and the balance by a former officer of the
Distributor.
Other Information on Trustees
The Trustees have appointed a standing Audit Committee
consisting of all of the Trustees (the "Independent Trustees")
who are not "interested persons" of the Fund, as that term is
defined in the 1940 Act. The Committee (i) recommends to the
Board of Trustees what firm of independent auditors will be
selected by the Board of Trustees (subject to shareholder
ratification); (ii) reviews the methods, scope and result of
audits and the fees charged; and (iii) reviews the adequacy of
the Fund's internal accounting procedures and controls. The
Committee held two meetings during the Fund's last fiscal year.
The Board of Trustees does not have a nominating committee.
During the Fund's last fiscal year, the Board of Trustees held
four meetings. All current Trustees were present for at least 75%
of the total number of Board meetings and Audit Committee
meetings (if such Trustee was a member of that committee).
RATIFICATION OR REJECTION
OF SELECTION OF
INDEPENDENT AUDITORS
(Proposal No. 2)
KPMG LLP, which is currently serving as the Fund's auditors,
has been selected by the Fund's Board of Trustees, including a
majority of the Independent Trustees, as the Fund's independent
auditors for the fiscal year ending June 30, 2001. Such selection
is submitted to the shareholders for ratification or rejection.
The firm has no direct or indirect financial interest in the
Fund, the Manager or the Sub-Adviser. It is expected that
representatives of the firm will not be present at the meeting
but will be available should any matter arise requiring their
presence.
ACTION REGARDING A CHANGE
IN THE FUND'S FUNDAMENTAL POLICIES
TO ALLOW THE USE OF ADDITIONAL
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS
FOR RATING OBLIGATIONS THE FUND MAY PURCHASE
(Proposal No. 3)
Since beginning operations, the Fund has had a Fundamental
policy that defines the "investment-grade" securities the Fund
may purchase as
those rated within the four highest credit ratings
assigned by Moody's Investors Service, Inc. ("Moody's")
or Standard & Poor's Corporation ("S&P") or, if
unrated, determined to be of comparable quality.
When this Fundamental policy was put in place Moody's and
S&P were essentially the only nationally recognized statistical
rating organizations ("NRSROs") with respect to municipal
obligations. In recent years, other organizations, notably Fitch
IBCA, Inc. ("Fitch"), have become active in rating municipal
obligations. Municipal bond issuers pay to have their bonds rated
and there is competition among the NRSROs. If an issuer chooses
to have its bonds rated by an NRSRO other than Moody's or S&P,
the current Fundamental policy of the Fund has the effect of
requiring the Fund either to forego purchasing the bonds because
they are not rated by Moody's or S&P or to treat them as
"unrated" when in fact they do have ratings assigned by an NRSRO.
Both results distort the clear intent of the policy.
Accordingly the Board of Trustees has determined that it
would be in the best interest of the Fund and its shareholders to
change the Fundamental policy so that the ratings used to define
"investment-grade" securities would include those assigned by any
NRSRO approved from time to time by the Board of Trustees.
At the present time, if the proposed change is adopted, the
Board of Trustees will approve Fitch in addition to Moody's and
S&P. The Board of Trustees has determined that the standards
Fitch employs in rating bonds are comparable to those of Moody's
and S&P that bonds in the four highest categories rated by Fitch
are of comparable quality to those similarly rated by Moody's and
S&P.
Action Requested
The Board of Trustees recommends that the proposed change in the
Fund's fundamental policies described above be approved.
Vote Required
The favorable vote of the holders of a majority (as defined
in the 1940 Act) of the outstanding shares of the Fund is
required for the approval of this Proposal No. 3. Under the 1940
Act, the vote of the holders of a majority of the outstanding
shares of the Fund means the vote of the holders of the lesser of
(a) 67% or more of the shares of the Fund present at the Meeting
or represented by proxy if the holders of more than 50% of such
shares are so present or represented, or (b) more than 50% of the
outstanding shares of the Fund, with one vote for each dollar
(and a proportionate fractional vote for each fraction of a
dollar) of net asset value (determined as of the record date)
represented by full and fractional shares of all of the Fund's
four classes of shares.
If this proposal is not approved, the Board of Trustees will
consider appropriate action, which could include continuing with
the present policies or calling another meeting of shareholders.
The meeting can be adjourned by the affirmative vote of a
majority of the shares present in person or by proxy. In voting
for an adjournment, the proxy holders will consider all relevant
factors, including possible delay of receipt of proxies and
whether or not a substantial number of negative votes have been
cast with respect to any proposal. The shares of shareholders who
have voted by proxy against a proposal will be voted against
adjournment.
RECEIPT OF
SHAREHOLDER PROPOSALS
Under the proxy rules of the Securities and Exchange
Commission, shareholder proposals meeting tests contained in
those rules may, under certain conditions, be included in the
Fund's proxy statement and proxy card for a particular annual
meeting. One of these conditions relates to the timely receipt by
the Fund of any such proposal. Under these rules, proposals
submitted for inclusion in the proxy material for the Fund's next
annual meeting after the meeting to which this Proxy Statement
relates must be received by the Fund not less than 120 days
before the anniversary of the date stated in this Proxy Statement
for the first mailing of this Proxy Statement. The date for such
submission could change, depending on the scheduled date for the
next annual meeting; if so, the Fund will so advise you.
The fact that the Fund receives a shareholder proposal in a
timely manner does not insure its inclusion in the Fund's proxy
material, since there are other requirements in the proxy rules
relating to such inclusion.
OTHER BUSINESS
The Fund does not know of any other matter which will come
up for action at the Meeting. If any other matter or matters
properly come up for action at the Meeting, including any
adjournment of the Meeting, the proxy holders will vote the
shares which your proxy card, telephone or internet vote entitles
them to vote, in accordance with their judgment on such matter or
matters. That is, by signing and returning your proxy card or by
voting by telephone or the Internet, you give the proxy holders
discretionary authority as to any such matter or matters.
<PAGE>
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Narragansett Insured Tax-Free Income Fund
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on September 7, 2000
PROXY STATEMENT
<PAGE>
Aquilasm Group of Funds
NARRAGANSETT INSURED TAX-FREE INCOME FUND
Class A Shares
PROXY FOR SHAREHOLDERS MEETING September 7, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of NARRAGANSETT INSURED TAX-FREE
INCOME FUND (the "Fund") does hereby appoint LACY B. HERRMANN,
DIANA P. HERRMANN and EDWARD M. W. HINES, or any of them, as
attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of the
Fund to be held on Thursday, September 7, 2000 at the Rhode
Island Convention Center, 1 Sabin Street, Providence, Rhode
Island 02903 at 2:30 p.m. local time, and at all adjournments
thereof, and thereat to vote the shares held in the name of the
undersigned on the record date for said meeting on the matters
listed below. Such shares are entitled to one vote for every
dollar of net asset value represented by the share balance
printed below.
Please read the proxy statement prior to voting.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If
you can join us, please so indicate on the proxy card or e-mail
us at [email protected]
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
To vote your shares by telephone, call toll free 1-800-690-
6903. You will be prompted to enter the 12-digit control number
on this proxy card. Follow the simple recorded instructions using
this proxy card as a guide. If you vote by phone, you need not
return the proxy card by mail.
Internet
www.proxyvote.com
To vote your shares by the Internet, contact the Fund at
www.proxyvote.com You will be prompted to enter the 12-digit
control number on this proxy card. Follow the simple instructions
at the website, using your proxy card as a guide. If you vote by
the Internet, you need not return the proxy card by mail.
Mail
You can vote your shares by completing and returning this
proxy card. Please mark your proxy, date and sign it below and
return it promptly in the accompanying envelope which requires no
postage if mailed in the United States.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
_________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
NARRAGANSETT INSURED TAX-FREE INCOME FUND
DCLASS A Shares
For address changes and/or comments, please check this box
and write them on the back where indicated.
[_]
Vote on Trustees
(Proposal No.1 in Proxy Statement)
1. Election of Trustees
01) Lacy B. Herrmann* 02) Vernon R. Alden 03) Paul Y.
Clinton 04) David A. Duffy* 05) William J. Nightingale 06) J.
William Weeks
* interested Trustees
__
[__] For all
__
[__] Withhold all
__
[__] For all except
To withhold authority to vote for one or more (but not all)
nominees, mark "For all except" and write the nominee number(s)
and/ or name(s) on the line below.
________________
MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ABOVE
AND FOR THE PROPOSALS LISTED BELOW. THE SHARES REPRESENTED HEREBY
WILL BE VOTED AS INDICATED BELOW OR FOR IF NO CHOICE IS
INDICATED.
As to any other matter said proxies shall vote in accordance
with their best judgment.
2. Action on selection of KPMG LLP as independent auditors
(Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
3. Action on change of fundamental policy of the Fund (Proposal
No.3 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
Please indicate if you plan to attend the Shareholder Meeting. If
you mark the box below, you must return the proxy card by mail to
have this information recorded.
P. I plan to attend the annual meeting in Providence. [__]
PLEASE SIGN EXACTLY AS YOUR NAME (S) APPEAR HEREON. When signing
as a custodian, attorney, executor, administrator, trustee,
guardian, etc., please sign your full title as such. Joint
owners should each sign.
_________________________________Dated: _________
Signature
[Please sign within the box]
_________________________________Dated: __________
Signature
(Joint Owners)
<PAGE>
Aquilasm Group of Funds
NARRAGANSETT INSURED TAX-FREE INCOME FUND
Class C Shares
PROXY FOR SHAREHOLDERS MEETING September 7, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of NARRAGANSETT INSURED TAX-FREE
INCOME FUND (the "Fund") does hereby appoint LACY B. HERRMANN,
DIANA P. HERRMANN and EDWARD M. W. HINES, or any of them, as
attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of the
Fund to be held on Thursday, September 7, 2000 at the Rhode
Island Convention Center, 1 Sabin Street, Providence, Rhode
Island 02903 at 2:30 p.m. local time, and at all adjournments
thereof, and thereat to vote the shares held in the name of the
undersigned on the record date for said meeting on the matters
listed below. Such shares are entitled to one vote for every
dollar of net asset value represented by the share balance
printed below.
Please read the proxy statement prior to voting.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If
you can join us, please so indicate on the proxy card or e-mail
us at [email protected]
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
To vote your shares by telephone, call toll free 1-800-690-
6903. You will be prompted to enter the 12-digit control number
on this proxy card. Follow the simple recorded instructions using
this proxy card as a guide. If you vote by phone, you need not
return the proxy card by mail.
Internet
www.proxyvote.com
To vote your shares by the Internet, contact the Fund at
www.proxyvote.com You will be prompted to enter the 12-digit
control number on this proxy card. Follow the simple instructions
at the website, using your proxy card as a guide. If you vote by
the Internet, you need not return the proxy card by mail.
Mail
You can vote your shares by completing and returning this
proxy card. Please mark your proxy, date and sign it below and
return it promptly in the accompanying envelope which requires no
postage if mailed in the United States.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
_________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
NARRAGANSETT INSURED TAX-FREE INCOME FUND
CLASS C Shares
For address changes and/or comments, please check this box
and write them on the back where indicated.
[_]
Vote on Trustees
(Proposal No.1 in Proxy Statement)
1. Election of Trustees
01) Lacy B. Herrmann* 02) Vernon R. Alden 03) Paul Y.
Clinton 04) David A. Duffy* 05) William J. Nightingale 06) J.
William Weeks
* interested Trustees
__
[__] For all
__
[__] Withhold all
__
[__] For all except
To withhold authority to vote for one or more (but not all)
nominees, mark "For all except" and write the nominee number(s)
and/ or name(s) on the line below.
________________
MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ABOVE
AND FOR THE PROPOSALS LISTED BELOW. THE SHARES REPRESENTED HEREBY
WILL BE VOTED AS INDICATED BELOW OR FOR IF NO CHOICE IS
INDICATED.
As to any other matter said proxies shall vote in accordance with
their best judgment.
2. Action on selection of KPMG LLP as independent auditors
(Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
3. Action on change of fundamental policy of the Fund (Proposal
No.3 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
Please indicate if you plan to attend the Shareholder Meeting. If
you mark the box below, you must return the proxy card by mail to
have this information recorded.
P. I plan to attend the annual meeting in Providence. [__]
PLEASE SIGN EXACTLY AS YOUR NAME (S) APPEAR HEREON. When signing
as a custodian, attorney, executor, administrator, trustee,
guardian, etc., please sign your full title as such. Joint
owners should each sign.
_________________________________Dated: _________
Signature
[Please sign within the box]
_________________________________Dated: __________
Signature
(Joint Owners)
<PAGE>
Aquilasm Group of Funds
NARRAGANSETT INSURED TAX-FREE INCOME FUND
Class Y Shares
PROXY FOR SHAREHOLDERS MEETING September 7, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of NARRAGANSETT INSURED TAX-FREE
INCOME FUND (the "Fund") does hereby appoint LACY B. HERRMANN,
DIANA P. HERRMANN and EDWARD M. W. HINES, or any of them, as
attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of the
Fund to be held on Thursday, September 7, 2000 at the Rhode
Island Convention Center, 1 Sabin Street, Providence, Rhode
Island 02903 at 2:30 p.m. local time, and at all adjournments
thereof, and thereat to vote the shares held in the name of the
undersigned on the record date for said meeting on the matters
listed below. Such shares are entitled to one vote for every
dollar of net asset value represented by the share balance
printed below.
Please read the proxy statement prior to voting.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If
you can join us, please so indicate on the proxy card or e-mail
us at [email protected]
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
To vote your shares by telephone, call toll free 1-800-690-
6903. You will be prompted to enter the 12-digit control number
on this proxy card. Follow the simple recorded instructions using
this proxy card as a guide. If you vote by phone, you need not
return the proxy card by mail.
Internet
www.proxyvote.com
To vote your shares by the Internet, contact the Fund at
www.proxyvote.com You will be prompted to enter the 12-digit
control number on this proxy card. Follow the simple instructions
at the website, using your proxy card as a guide. If you vote by
the Internet, you need not return the proxy card by mail.
Mail
You can vote your shares by completing and returning this
proxy card. Please mark your proxy, date and sign it below and
return it promptly in the accompanying envelope which requires no
postage if mailed in the United States.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
_________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
NARRAGANSETT INSURED TAX-FREE INCOME FUND
CLASS Y Shares
For address changes and/or comments, please check this box
and write them on the back where indicated.
[_]
Vote on Trustees
(Proposal No.1 in Proxy Statement)
1. Election of Trustees
01) Lacy B. Herrmann* 02) Vernon R. Alden 03) Paul Y.
Clinton 04) David A. Duffy* 05) William J. Nightingale 06) J.
William Weeks
* interested Trustees
__
[__] For all
__
[__] Withhold all
__
[__] For all except
To withhold authority to vote for one or more (but not all)
nominees, mark "For all except" and write the nominee number(s)
and/ or name(s) on the line below.
MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ABOVE
AND FOR THE PROPOSALS LISTED BELOW. THE SHARES REPRESENTED HEREBY
WILL BE VOTED AS INDICATED BELOW OR FOR IF NO CHOICE IS
INDICATED.
As to any other matter said proxies shall vote in accordance with
their best judgment.
2. Action on selection of KPMG LLP as independent auditors
(Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
3. Action on change of fundamental policy of the Fund (Proposal
No.3 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
Please indicate if you plan to attend the Shareholder Meeting. If
you mark the box below, you must return the proxy card by mail to
have this information recorded.
P. I plan to attend the annual meeting in Providence. [__]
PLEASE SIGN EXACTLY AS YOUR NAME (S) APPEAR HEREON. When signing
as a custodian, attorney, executor, administrator, trustee,
guardian, etc., please sign your full title as such. Joint
owners should each sign.
_________________________________Dated: _________
Signature
[Please sign within the box]
_________________________________Dated: __________
Signature
(Joint Owners)
<PAGE>
Aquilasm Group of Funds
NARRAGANSETT INSURED TAX-FREE INCOME FUND
Class I Shares
PROXY FOR SHAREHOLDERS MEETING September 7, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of NARRAGANSETT INSURED TAX-FREE
INCOME FUND (the "Fund") does hereby appoint LACY B. HERRMANN,
DIANA P. HERRMANN and EDWARD M. W. HINES, or any of them, as
attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of the
Fund to be held on Thursday, September 7, 2000 at the Rhode
Island Convention Center, 1 Sabin Street, Providence, Rhode
Island 02903 at 2:30 p.m. local time, and at all adjournments
thereof, and thereat to vote the shares held in the name of the
undersigned on the record date for said meeting on the matters
listed below. Such shares are entitled to one vote for every
dollar of net asset value represented by the share balance
printed below.
Please read the proxy statement prior to voting.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If
you can join us, please so indicate on the proxy card or e-mail
us at [email protected]
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
To vote your shares by telephone, call toll free 1-800-690-
6903. You will be prompted to enter the 12-digit control number
on this proxy card. Follow the simple recorded instructions using
this proxy card as a guide. If you vote by phone, you need not
return the proxy card by mail.
Internet
www.proxyvote.com
To vote your shares by the Internet, contact the Fund at
www.proxyvote.com You will be prompted to enter the 12-digit
control number on this proxy card. Follow the simple instructions
at the website, using your proxy card as a guide. If you vote by
the Internet, you need not return the proxy card by mail.
Mail
You can vote your shares by completing and returning this
proxy card. Please mark your proxy, date and sign it below and
return it promptly in the accompanying envelope which requires no
postage if mailed in the United States.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
_________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
NARRAGANSETT INSURED TAX-FREE INCOME FUND
CLASS I Shares
For address changes and/or comments, please check this box
and write them on the back where indicated.
[_]
Vote on Trustees
(Proposal No.1 in Proxy Statement)
1. Election of Trustees
01) Lacy B. Herrmann* 02) Vernon R. Alden 03) Paul Y.
Clinton 04) David A. Duffy* 05) William J. Nightingale 06) J.
William Weeks
* interested Trustees
__
[__] For all
__
[__] Withhold all
__
[__] For all except
To withhold authority to vote for one or more (but not all)
nominees, mark "For all except" and write the nominee number(s)
and/ or name(s) on the line below.
MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ABOVE
AND FOR THE PROPOSALS LISTED BELOW. THE SHARES REPRESENTED HEREBY
WILL BE VOTED AS INDICATED BELOW OR FOR IF NO CHOICE IS
INDICATED.
As to any other matter said proxies shall vote in accordance with
their best judgment.
2. Action on selection of KPMG LLP as independent auditors
(Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
3. Action on change of fundamental policy of the Fund (Proposal
No.3 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
Please indicate if you plan to attend the Shareholder Meeting. If
you mark the box below, you must return the proxy card by mail to
have this information recorded.
P. I plan to attend the annual meeting in Providence. [__]
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as a custodian, attorney, executor, administrator, trustee,
guardian, etc., please sign your full title as such. Joint
owners should each sign.
_________________________________Dated: _________
Signature
[Please sign within the box]
_________________________________Dated: __________
Signature
(Joint Owners)
