File Nos. 33-48696 & 811-6707
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
NARRAGANSETT INSURED TAX-FREE INCOME FUND
(Exact Name of Registrant as Specified in Charter)
380 Madison Avenue, Suite 2300
New York, New York 10017
(Address of Principal Executive Offices)
(212) 697-6666
(Registrant's Telephone Number)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
<page>
Important Notice
Please Read Immediately
Aquilasm
Group of Funds
Narragansett Insured Tax-Free Income Fund
380 Madison Avenue, Suite 2300, New York, NY 10017
Notice of Annual Meeting of
Shareholders to Be Held
on October 28, 2005
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 October 28, 2005
at 9:00 a.m. Eastern Daylight Time;
Purposes: (c) for the following purposes:
(i) to elect eight 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 Tait, Weller & Baker
as the Fund's independent registered public
accounting firm for the fiscal year ending
June 30, 2006 (Proposal No. 2);
(iii) 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 August 1, 2005 (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
September 22, 2005
Please Note:
If you do not expect to attend the Meeting, please vote by any of three ways: by
telephone, by the Internet 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, NY 10017
Proxy Statement
Introduction
The purpose of the Notice preceding this Proxy Statement 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 is to give you information on which you may base your decisions
as to the choices, if any, you make in voting.
The Fund's Manager (the "Manager") is Aquila Investment Management LLC, 380
Madison Avenue, Suite 2300, New York, NY 10017, a subsidiary of the Fund's
founder, Aquila Management Corporation. 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 Investment
Advisors, a department of Citizens Bank of Rhode Island (the "Sub-Adviser"), One
Citizens Plaza, Providence, RI 02903.
A copy of the Fund's most recent annual report will be sent to you without
charge upon written request to the Distributor, at the above address, or by
calling 800-437-1020 toll-free or 212-697-6666.
This Notice and Proxy Statement are first being mailed on or about
September 22, 2005.
You should read this Proxy Statement prior to voting. If your shares are
registered in the name of your broker or someone other than yourself, you may
authorize that person to vote your shares. If your shares are registered in your
name, then you may vote in one of three ways:
(1) 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 matter listed on the proxy card, you may direct the proxy
holders to vote your shares on this proposal 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
a box on the proposal, the proxy holders will vote your shares for that
proposal.
(2) Telephone Voting
To vote your shares by telephone, call the toll-free number on your proxy
card. You will be prompted to enter the control number on your 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.
(3) Internet Voting
To vote your shares by the Internet, please contact the Fund at the
Internet address shown on your proxy card. You will be prompted to enter the
control number on your 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 provided or contacting the Fund's Internet address, both of which
are detailed on your proxy card, entering your control number and revoking your
previous vote.
Proxies for shares held by brokers in "street name" and not voted or marked
as abstentions will be counted for purposes of determining a quorum. They will
be counted as present in determining voting results, and will therefore have the
same effect as negative votes.
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, $10.66;
Class C Shares, $10.66; Class Y Shares, $10.66; and Class I Shares, $10.65. The
meeting is expected to act only upon matters that affect the Fund as a whole:
the election of Trustees and the selection of an independent registered public
accounting firm. On matters that affect the Fund as a whole, all shareholders of
the Fund, including the shareholders of all classes of shares 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, 9,709,732; Class C Shares, 1,748,841;
Class Y Shares, 2,840,929; and Class I Shares, 97,336.
On the record date, the following holders held 5% or more of a class of the
Fund's outstanding shares. On the basis of information received from the
institutional holders, the Fund's management believes that all of the shares
indicated are held by them for the benefit of clients.
Name and Address of Percent
The Holder of Record Number of Shares of Class
Institutional 5% shareholders:
Merrill Lynch Pierce, 552,146 Class A Shares 5.69%
Fenner & Smith 599,775 Class C Shares 34.30%
4800 Deer Lake Dr. East
Jacksonville, FL 32246
Citizens Bank of Rhode Island 1,921,721 Class Y Shares 67.64%
One Citizens Plaza
Providence, RI 02903
SEI Trust Company 234,996 Class Y Shares 8.27%
One Freedom Valley Drive
Oaks, PA 19456
First Clearing, LLC 202,061 Class Y Shares 7.11%
Kenneth M. Lantini &
Jeanine A. Lantini
248 Cranberry Ridge Road
North Scituate, RI 02857
Charles Schwab and Co. Inc 48,974 Class I Shares 50.31%
101 Montgomery Street
San Francisco, CA 94104
Perry Baker & Co. 48,362 Class I Shares 49.69%
The Washington Trust Co.
23 Broad Street
Westerly, RI 02891
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, eight 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 vote your shares in the
election of Trustees.
The following material includes information about each nominee and each
officer of the Fund. All shares of the Fund listed as owned by the Trustees are
Class A Shares unless indicated otherwise. All nominees, except for Ms. Herrmann
and Ms. White, are presently Trustees, and of the current Trustees, all were
elected by the shareholders in October 2004, except for Mr. Leach and Mr.
Ramsey, who were elected by the Board to fill vacancies. All nominees have
consented to serve if elected.
Nominees(1)
Number of
Positions Held Portfolios in Other Directorships
with Fund Complex Held by Trustee
Fund Overseen by (The position held is
Name, Address(2) and and Length of Principal Occupation(s) Trustee a directorship unless
Date of Birth Service(3) During Past 5 Years indicated otherwise.)
- ------------- ---------- ------------------- ----------- ---------------------
Interested
Trustees(4)
David A. Duffy Trustee Chairman, Rhode Island 1 Citizens Bank of Rhode Island
North Kingstown, RI since 1995 Convention Center Authority and Connecticut since 1999;
(08/07/39) since 2003; retired Founder, Delta Dental of Rhode Island
formerly President, Duffy & since 2004.
Shanley, Inc., a marketing
communications firm, 1973-2003;
Transition Chairman for Gov.
Donald Carcieri (R.I.); past
National Chairman, National
Conference for Community and
Justice (NCCJ); Chairman, Providence
College President's Council; officer
or director of numerous civic and
non-profit organizations.
Diana P. Herrmann President since Vice Chair and Chief Executive 11 None
New York, NY 1998 and Vice Officer of Aquila Management
(02/25/58) Chair of the Corporation, Founder of the
Board since 2003 Aquilasm Group of Funds(5)
and parent of Aquila Investment
Management LLC, Manager since 2004,
President and Chief Operating Officer
since 1997, a Director since 1984,
Secretary since 1986 and previously
its Executive Vice President, Senior
Vice President or Vice President,
1986-1997; Chief Executive Officer and
Vice Chair since 2004 and President,
Chief Operating Officer and Manager of
the Manager since 2003; Vice Chair,
President, Executive Vice President or
Senior Vice President of funds in the
Aquilasm Group of Funds since 1986;
Director of the Distributor since
1997; trustee, Reserve Money-Market
Funds, 1999-2000 and Reserve Private
Equity Series, 1998-2000; Governor,
Investment Company Institute (2004)
and head of its Small Funds Committee
since 2004; active in charitable and
volunteer organizations.
Non-interested
Trustees
William J. Chair of the Retired; formerly Chairman, 2 Ring's End, Inc.
Nightingale Board of founder (1975) and Senior
Rowayton, CT Trustees since Advisor until 2000 of
(09/16/29) 2005 and Nightingale & Associates,
Trustee since L.L.C., a general management
1992 consulting firm focusing on
interim management, divestitures,
turnaround of troubled companies,
corporate restructuring and financial
advisory services.
Vernon R. Alden Trustee since Retired; former director or 1 Sonesta International Hotels
Boston, MA 1992 trustee of various Fortune 500 Corporation and College
(04/07/23) companies, including Partnership Inc.
Colgate-Palmolive and McGraw Hill;
formerly President of Ohio University
and Associate Dean of the Harvard
University Graduate School of Business
Administration; member of several
Japan-related advisory councils,
including Chairman of the Japan
Society of Boston; trustee of various
cultural, educational and civic
organizations.
Timothy J. Leach Trustee since Executive Vice President & Chief 2 None
Orinda, CA (08/28/55) 2005 Investment Officer, U.S. Trust
Company, New York, NY, 2004-present;
Executive Vice President & Chief
Investment Officer, Private Asset
Management Group, Wells Fargo Bank,
San Francisco, CA, 1999-2003;
President and Chief Investment
Officer, ABN Amro Asset Management
(USA), 1998-1999; President & Chief
Investment Officer, Qualivest Capital
Management Inc. and Senior Vice
President & Chief Investment Officer,
Trust & Investment Group, US Bancorp,
Portland, OR, 1994-1998; Trustee of
Tax-Free Trust of Oregon, 2001-2002.
James R. Ramsey Trustee since President, University of 2 Community Bank and Trust,
Louisville, KY 2004 Louisville since November 2002; Pikeville, KY and Texas
(11/14/48) Professor of Economics, Roadhouse Inc.
University of Louisville,
1999-present; Kentucky Governor's
Senior Policy Advisor and State Budget
Director, 1999-2002; Vice Chancellor
for Finance and Administration, the
University of North Carolina at Chapel
Hill, 1998 to 1999; previously Vice
President for Finance and
Administration at Western Kentucky
University, State Budget Director for
the Commonwealth of Kentucky, Chief
State Economist and Executive Director
for the Office of Financial Management
and Economic Analysis for the
Commonwealth of Kentucky, Adjunct
Professor at the University of
Kentucky, Associate Professor at
Loyola University-New Orleans and
Assistant Professor at Middle
Tennessee State University.
J. William Weeks Trustee since Retired; limited partner and 2 None
Palm Beach, FL 1995 investor in various real estate
(06/22/27) partnerships since 1988;
formerly Senior Vice President
or Vice President of the Aquila
Bond Funds; and Vice President
of the Distributor.
Laureen L. White None President-elect and currently 1 None
North Kingstown, RI Executive Vice President,
(11/18/59) Greater Providence Chamber of
Commerce, since 2004, and Senior Vice
President, 1989-2002; Executive
Counselor to the Governor of Rhode
Island for Policy and Communications,
2003-2004.
Other Individuals
Chairman Emeritus
Because of his importance to the shareholders and to enable the Board of
Trustees to continue to have the benefit of his counsel, Mr. Lacy B. Herrmann
has agreed to be Chairman Emeritus. The Chairman Emeritus may attend Board
meetings but has no voting power.
Lacy B. Herrmann Founder, Founder and Chairman of the N/A N/A
New York, NY Chairman Board, Aquila Management
(05/12/29) Emeritus since Corporation, the sponsoring
2005 and organization and parent of the
Chairman of the Manager or Administrator and/or
Board of Adviser or Sub-Adviser to each
Trustees, fund of the Aquilasm Group of
1992-2005 Funds; Chairman of the Manager
or Administrator and/or Adviser or
Sub-Adviser to each since 2004;
Founder, Chairman Emeritus and
Trustee of Aquila Rocky Mountain
Equity Fund; Founder and Chairman
Emeritus of Hawaiian Tax-Free Trust,
Pacific Capital Cash Assets Trust,
Pacific Capital Tax-Free Cash Assets
Trust, Pacific Capital U.S.
Government Securities Cash Assets
Trust, Tax-Free Fund of Colorado,
Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income
Fund, Tax-Free Trust of Arizona,
Tax-Free Trust of Oregon and
Tax-Free Fund For Utah; previously
Chairman and a Trustee of each fund
in the Aquilasm Group of Funds since
its establishment until 2004 or
2005; Director of the Distributor
since 1981 and formerly Vice
President or Secretary, 1981-1998;
Trustee Emeritus, Brown University
and the Hopkins School; active in
university, school and charitable
organizations.
Officers
Charles E. Executive Vice Executive Vice President of all N/A N/A
Childs, III President since funds in the Aquilasm Group of
New York, NY 2003 Funds and the Manager and the
(04/01/57) Manager's parent since 2003;
formerly Senior Vice President,
corporate development, Vice President,
Assistant Vice President and Associate
of the Manager's parent since 1987;
Senior Vice President, Vice President
or Assistant Vice President of the
Aquila Money-Market Funds, 1988-2003.
Stephen J. Caridi Senior Vice Vice President of the N/A N/A
New York, NY President since Distributor since 1995; Vice
(05/06/61) 1998 President, Hawaiian Tax-Free
Trust since 1998; Senior Vice
President, Narragansett Insured
Tax-Free Income Fund since 1998, Vice
President 1996-1997; Senior Vice
President, Tax-Free Fund of Colorado
since 2004; Assistant Vice President,
Tax-Free Fund For Utah since 1993.
Robert W. Anderson Chief Chief Compliance Officer of the N/A N/A
New York, NY Compliance Fund, the Manager and the
(08/23/40) Officer since Distributor since 2004,
2004 and Compliance Officer of the Manager
Assistant or its predecessor and current
Secretary parent since 1998 and Assistant
since 2000 Secretary of the Aquilasm Group
of Funds since 2000; Consultant,
The Wadsworth Group, 1995-1998.
Joseph P. DiMaggio Chief Financial Chief Financial Officer of the N/A N/A
New York, NY Officer since Aquilasm Group of Funds since
(11/06/56) 2003 and 2003 and Treasurer since 2000;
Treasurer since Controller, Van Eck Global
2000 Funds, 1993-2000.
Edward M. W. Hines Secretary since Partner, Hollyer Brady Barrett & N/A N/A
New York, NY 1992 Hines LLP, legal counsel to the
(12/16/39) Fund, since 1989; Secretary of
the Aquilasm Group of Funds.
John M. Herndon Assistant Assistant Secretary of the N/A N/A
New York, NY Secretary since Aquilasm Group of Funds since
(12/17/39) 1995 1995 and Vice President of the
three Aquila Money-Market Funds since
1990; Vice President of the Manager or
its predecessor and current parent
since 1990.
Lori A. Vindigni Assistant Assistant Treasurer of the N/A N/A
New York, NY Treasurer since Aquilasm Group of Funds since
(11/02/66) 2000 2000; Assistant Vice President
of the Manager or its predecessor and
current parent since 1998; Fund
Accountant for the Aquilasm Group of
Funds, 1995-1998.
(1)The Fund's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free).
(2) The mailing address of each nominee and officer is c/o Narragansett Insured
Tax-Free Income Fund, 380 Madison Avenue, New York, NY 10017.
(3)Each Trustee holds office until the next annual meeting of shareholders or
until his or her successor is elected and qualifies. The term of office of each
officer is one year.
(4) Mr. Duffy is an interested person as a director of the Sub-Adviser. Ms.
Herrmann is an interested person of the Fund as an officer of the Fund, as a
director, officer and shareholder of the Manager's corporate parent, as an
officer and Manager of the Manager, and as a shareholder and director of the
Distributor.
(5) In this material Pacific Capital Cash Assets 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"; 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 and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Bond Funds";
Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these
11 funds are called the "Aquilasm Group of Funds."
Securities Holdings of the Nominees
(as of 08-31-05)
Dollar Range Aggregate Dollar
Of Ownership Range of Ownership
In Narragansett in the Aquilasm Group
Insured Tax-Free of Funds Overseen by
Income Fund(1) Nominee(1)
Interested Trustees
Diana P. Herrmann B E
David A. Duffy C C
Non-interested Trustees
Vernon R. Alden B B
Timothy J. Leach B B
William J. Nightingale C C
James R. Ramsey C D
J. William Weeks B C
Laureen L. White B B
(1) A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. over $100,000
None of the non-interested nominees or their immediate family members holds
of record or beneficially any securities of the Manager or the Distributor.
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 June 30, 2005 the Fund paid a total of $105,874 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 11 funds in the Aquilasm Group of Funds, which
consist of tax-free municipal bond funds, money-market funds and an equity fund.
The following table lists the compensation of all nominees for Trustee who
received compensation from the Fund or from other funds in the Aquilasm Group of
Funds during the Fund's fiscal year. None of such nominees has any pension or
retirement benefits from the Fund or any of the other funds in the Aquilasm
Group of Funds.
Compensation
From
all funds Number of
in the boards on
Compensation Aquilasm which the
from the Group Trustee
Name Fund of Funds now serves
Vernon R. Alden $10,400 $10,400 1
David A. Duffy $ 8,300 $ 8,300 1
Timothy J. Leach $ 4,000 $10,500 2
William J.
Nightingale $15,575 $27,688 2
James R. Ramsey $ 5,785 $17,085 2
J. William Weeks $13,213 $24,813 2
Class A Shares may be purchased without a sales charge by the Fund's
Trustees and officers.
The Fund's Manager is a wholly-owned subsidiary of Aquila Management
Corporation ("AMC"), founder of each fund in the Aquilasm Group of Funds. As of
August 31, 2005, these funds had aggregate assets of approximately $4.3 billion,
of which approximately $2.5 billion consisted of assets of the tax-free
municipal bond funds. AMC's address is the same as that of the Manager. AMC is
controlled by Mr. Lacy B. Herrmann, through share ownership directly, through
two trusts and by his wife. During the fiscal year ended June 30, 2005, the Fund
incurred $753,282 in management fees, of which $579,069 was waived, $22,277 was
paid to the Manager, and the balance was paid to the Sub-Adviser.
During the fiscal year ended June 30, 2005, $157,240 was paid under Part I
of the Fund's Distribution Plan to Qualified Recipients with respect to the
Class A Shares, of which $4,011 was retained by the Distributor. With respect to
Class C Shares, during the same period $141,377 was paid under Part II of the
Plan and $47,126 was paid under the Shareholder Services Plan. Of the total
payments under Parts I and II of the Plan of $188,503, the Distributor received
$45,058. All of such payments were for compensation. With respect to Class I
Shares, during the same period $433 was paid under Part III of the Plan and
$1,298 was paid under the Shareholder Services Plan.
The Distributor currently handles the distribution of the shares of the
funds in the Aquilasm Group of 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 24% by Diana P. Herrmann, 72% by Mr.
Herrmann and other members of his immediate family and the balance by current
and former employees of Aquila Investment Management LLC.
Other Information on Trustees
The Trustees have appointed a standing Audit Committee consisting of all of
the Trustees who are "independent" and are not "interested persons" of the Fund,
as that term is defined in the Investment Company Act of 1940. The members of
the Audit Committee are Vernon R. Alden, Timothy J. Leach, William J.
Nightingale, James R. Ramsey and J. William Weeks. The Committee (i) selects the
Fund's independent registered public accounting firm (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. Selection of the independent registered public
accounting firm is also ratified by the Board of Trustees. The Audit Committee
held one meeting during the Fund's last fiscal year. The Board of Trustees has
adopted a written charter for the Audit Committee.
During the Fund's last fiscal year, the Board of Trustees held five
meetings. Each current Trustee was 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).
The Fund's policy is that all Trustees who can do so attend the Annual
Meeting.
The Fund has a Nominating Committee, consisting of all of the
Independent Trustees. The Nominating Committee held one meeting during the last
fiscal year. The committee will consider nominees recommended by the
shareholders who may send recommendations to the committee in care of the
Manager at 380 Madison Avenue, New York, NY 10017. The charter of the Nominating
Committee is available on the Fund's website at www.aquilafunds.com.
Since the beginning of the Fund's most recently completed fiscal year,
no Trustee purchased or sold more than 1% of the outstanding shares of any class
of shares of the Manager.
Vote Required
To be elected, each nominee must receive the affirmative votes of a majority
of the shares present.
Ratification or Rejection
of Selection of
Independent Registered Public Accounting Firm
(Proposal No. 2)
Tait, Weller & Baker ("TWB") has been preliminarily selected as the
Fund's independent registered public accounting firm for the fiscal year ending
June 30, 2006 by the Fund's Audit Committee, after requesting from the Manager
and receiving the results of interviews and evaluations of a number of possible
firms. The selection has been preliminarily ratified by the Board of Trustees,
including a majority of the Independent Trustees. TWB has concentrated its
accounting practice primarily in the mutual fund industry for more than 40 years
and is one of the industry's largest providers. It is anticipated that
immediately prior to the Annual Meeting of Shareholders, selection of TWB by the
Audit Committee and ratification by the Board of Trustees will be formally
confirmed at meetings attended in person by members of the Audit Committee and
Board, respectively.
KPMG LLP ("KPMG") has served as the Fund's independent registered
public accounting firm for all of the Fund's fiscal years from its inception
through its fiscal year ended June 30, 2005. Throughout that period, KPMG's
reports on the Fund's financial statements, including those for the Fund's two
most recent fiscal years, contained no adverse opinion or disclaimer of opinion.
No reports were qualified or modified as to uncertainty, audit scope, or
accounting principles. Since inception and including the last two fiscal years
and the subsequent period through the date of this proxy statement, there have
been no disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, and
there were no reportable events of the kinds required to be disclosed under
regulations applicable to proxy statements.
The following table represents fees for professional audit services
rendered by KPMG for the audit of the Fund's annual financial statements for the
fiscal years ended June 30, 2004 and 2005, and fees billed for other services
rendered by KPMG.
2004 2005
Audit Fees $15,400 $17,000
Audit related fees 0 0
------- ------
Audit and audit related fees 15,400 17,000
Tax fees (1) 7,875 8,005
All other fees 0 0
------ ------
Total $23,275 $25,005
====== ======
(1) Tax fees consisted of fees for tax consultation and tax compliance
services.
KPMG did not perform any services during the fiscal year for the Fund's
investment adviser (the Manager) or any entity controlling, controlled by or
under common control with the Manager that provides services to the Fund.
All audit and non-audit services performed by KPMG on behalf of the
Fund or non-audit services performed on behalf of affiliated entities within the
investment company complex where such engagement relates directly to the
operations and financial reporting of the Fund are pre-approved by the Audit
Committee. Services to be considered between meetings of the Committee are
pre-approved by a selected member of the Committee in accordance with applicable
regulations and subject to additional procedures established by the Committee.
The Audit Committee has reviewed all services performed and fees
charged by KPMG and has accepted its representation that it is independent. The
Audit Committee has reviewed all services to be performed and fees to be charged
by TWB and in recommending appointment of TWB for the fiscal year ending June
30, 2006 has accepted its representation that it is independent.
It is expected that representatives of neither firm will be present at
the meeting but representatives of each firm will be available should any matter
arise requiring their presence.
Vote Required
Approval requires the affirmative votes of a majority of the shares
present.
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, shareholders will be notified.
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, except as noted. 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.
Important Notice
Please Read Immediately
Narragansett Insured Tax-Free Income Fund
Notice of Annual Meeting of Shareholders
to be held on October 28, 2005
PROXY STATEMENT
THE AQUILASM GROUP OF FUNDS
380 MADISON AVENUE, SUITE 2300
NEW YORK, NY 10017
VOTE BY TELEPHONE OR INTERNET OR MAIL 24 Hours a day, 7 days a week
TELEPHONE
1-888-221-0697
To vote your shares by telephone, call toll free 1-888-221-0697. 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 VOTING
www.proxyweb.com/aquila
To vote your shares by the Internet, contact the Fund at
www.proxyweb.com/aquila. 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.
Please fold and detach card at perforation before mailing.
Aquilasm Group of Funds
NARRAGANSETT INSURED TAX-FREE INCOME FUND
Proxy for Shareholder Meeting October 28, 2005
Proxy Solicited on Behalf of the Board of Trustees
The shareholder(s) of NARRAGANSETT INSURED TAX-FREE INCOME FUND (the
"Fund") whose signature(s) appear(s) below does/do hereby appoint DIANA P.
HERRMANN, CHARLES E. CHILDS, III 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 Friday,
October 28, 2005 at the Rhode Island Convention Center, One Sabin Street,
Providence, Rhode Island, at 9:00 a.m. Eastern Daylight 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 on the
reverse side. 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
You are encouraged to attend the Annual Meeting of Shareholders. If you can
attend, please so indicate on the proxy card or send an e-mail to
info@aquilafunds.com.
Address changes/comments: ---------------------
---------------------
---------------------
(If you noted any address changes/comments above, please mark corresponding box
on other side.)
Dated: ----------------------, 2005
- ---------------------------------
Signature(s) PLEASE SIGN WITHIN THE BOX
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS PROXY CARD. When signing
as a custodian, attorney, executor, administrator, trustee, guardian, etc.,
please sign your full title as such. Joint owners should each sign.
<page>
NARRAGANSETT INSURED TAX-FREE INCOME FUND
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
[X] PLEASE DO NOT USE FINE POINT PENS
1. Election of Trustees
01) Vernon R. Alden 02) David A. Duffy* 03) Diana P. Herrmann* 04)
Timothy J. Leach 05) William J. Nightingale 06) James R. Ramsey 07) J.
William Weeks 08) Laureen L. White
* interested Trustees
[ ] FOR ALL
[ ] WITHHOLD ALL
[ ] FOR ALL EXCEPT
- ---------------------
INSTRUCTION: 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 above.
[bolded in printed form]
Management recommends a vote FOR all nominees listed above and FOR the
proposal listed below. The shares represented hereby will be voted as indicated
at right or FOR if no choice is indicated.
2. Action on selection of Tait, Weller & Baker as independent
registered public accounting firm (Proposal No.2 in Proxy
Statement)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
As to any other matter said proxies shall vote in accordance with their best
judgment.
I plan to attend the annual meeting in Providence [ ]
I plan to attend the outreach meeting in Newport [ ]
For address changes and/or comments, please check the box at right and write
them on the front where indicated.
[ ]
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ON THE REVERSE SIDE.