IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
AQUILA
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 October 7, 1996
TO OUR SHAREHOLDERS:
The purpose of this Notice is to advise you that an Annual
Meeting of the Shareholders of Aquila Narragansett Insured Tax-Free
Income Fund (the "Fund") will be held:
Place: (a) Rhode Island Convention Center
1 Sabin Street
Providence, Rhode Island 02903
Time: (b) at 2:30 p.m., local time on October 7, 1996;
Purposes: (c) for the following purposes:
(i) to elect seven 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;
(ii) to ratify (that is, to approve) or
reject the selection of KPMG Peat Marwick
LLP as the Fund's independent auditors
for the fiscal year ending June 30, 1997
(Proposal No. 1);
PLEASE NOTE:
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, YOU ARE REQUESTED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY AND TO DATE,
SIGN AND RETURN IT IN THE ACCOMPANYING STAMPED ENVELOPE. TO AVOID
UNNECESSARY EXPENSE TO THE FUND, YOUR COOPERATION IS REQUESTED IN
MAILING IN YOUR PROXY NO MATTER HOW LARGE OR SMALL YOUR HOLDING MAY
BE.
(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 July 19, 1996
(the "record date"). Also, the number of
shares held by you according to such
records at the close of business on the
record date determines the number of
shares you may vote at the Meeting (or
any adjourned meeting or meetings).
By Order of the Board of Trustees,
EDWARD M. W. HINES
Secretary
August 15, 1996
(ii)
AQUILA
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 Aquila 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 on the enclosed proxy card.
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.
Citizens Financial Group, Inc. ("CFG") is a wholly-owned
subsidiary of The Royal Bank of Scotland plc. CFG is comprised of
Citizens Savings Bank and Citizens Trust Company which operate
jointly as Citizens Bank, the Fund's investment adviser (the
"Adviser") at One Citizens Plaza, Providence, Rhode Island, 02903.
The Fund's organizer and administrator (the "Administrator") 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.
This Notice and Proxy Statement are first being mailed on or
about August 15, 1996.
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 striking a line through the nominee's name 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 those proposals by
checking the appropriate box "For" or "Against" or instruct them
not to vote your shares on a proposal by checking the "Abstain"
box. If you return your signed proxy card and do not check any box
on a proposal, the proxy holders will vote your shares for that
proposal. Shares held by brokers in "street name" and not voted or
marked as abstentions will not be counted for purposes of
determining a quorum.
You may end the power of the proxy holders to vote your shares
after you have signed and returned your proxy card and before the
power is used 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); or (iii) voting your shares in person or by your
duly appointed agent at the meeting.
The Fund is sending you this Notice and Proxy Statement in
connection with the solicitation by its Trustees of proxy cards
("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. 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
these shares. The Fund will pay these firms for their out-of-pocket
expenses for doing so.
The Fund has three 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 (1) 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 three classes of the Fund's shares was $9.95.
On the record date, the total number of shares of the Fund of
all classes outstanding and entitled to vote was 3,817,461. Of the
shares of the Fund outstanding on the record date, Merrill Lynch,
Pierce, Fenner & Smith, Inc., P.O. Box 30561, New Brunswick, NJ,
held of record 451,131 shares (11.8%) all of which were Class A
Shares. On the basis of information received from the holder, the
Fund's management believes that all of the shares indicated are
held for the benefit of clients. In addition the Fund had
outstanding 10 Class C Shares and 10 Class Y Shares, held of record
by the Administrator. 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
At the Meeting, seven Trustees are to be elected. 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.
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.
Each of the nominees is presently a Trustee. Except for Mr.
Clinton, each of the current Trustees was elected by the
shareholders. Each current Trustee, except for Mr. Weeks, Mr. Duffy
and Mr. Clinton was either named as a Trustee in the original
Declaration of Trust, or was named as a Trustee by such original
Trustees, and was also elected as a Trustee by the Fund's original
sole shareholder, Aquila Management Corporation in 1992. The
Trustees and officers as a group own less than 1% of the
outstanding shares of the Fund. All of the shares indicated below
are Class A Shares. In the material below and elsewhere in this
Proxy Statement, Aquila Management Corporation, organizer and
Administrator of the Fund, is referred to as the "Administrator"
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 Distributor. He is so designated by
an asterisk.
Described in the following material are the name, positions
with the Fund, age as of July 19, 1996, and business experience
during at least the past five years (other than with the Fund) of
each nominee and all officers of the Fund.
Lacy B. Herrmann*, President and Chairman of the Board of Trustees,
Age: 67, Shares Owned: 529 (1)
Founder, President and Chairman of the Board of Aquila Management
Corporation since 1984, the sponsoring organization and
Administrator and/or Adviser or Sub-Adviser to the following open-
end investment companies, and Founder, Chairman of the Board of
Trustees, and President of each: Pacific Capital Cash Assets Trust
since 1984; Churchill Cash Reserves Trust since 1985; Pacific
Capital U.S. Treasuries Cash Assets Trust since 1988; Pacific
Capital Tax-Free Cash Assets Trust since 1988; each of which is a
money market fund, and together with Capital Cash Management Trust
("CCMT") are called the Aquila Money-Market Funds; and Hawaiian
Tax-Free Trust since 1984; Tax-Free Trust of Arizona since 1986;
Tax-Free Trust of Oregon since 1986; Tax-Free Fund of Colorado
since 1987; Churchill Tax-Free Fund of Kentucky since 1987; and
Tax-Free Fund For Utah since 1992; each of which is a tax-free
municipal bond fund, and two equity funds, Aquila Rocky Mountain
Equity Fund since 1993 and Aquila Cascadia Equity Fund, since 1996,
which, together with this Fund are called the Aquila Bond and
Equity Funds; Vice President, Director, Secretary and formerly
Treasurer of Aquila Distributors, Inc. since 1981, distributor of
the above funds; President and Chairman of the Board of Trustees of
CCMT, a money market fund since 1981, and an Officer and
Trustee/Director of its predecessors since 1974; Chairman of the
Board of Trustees and President of Prime Cash Fund 1982-1996 and of
Short Term Asset Reserves 1984-1996; President and a Director of
STCM Management Company, Inc., sponsor and sub-adviser to CCMT;
Chairman, President, and a Director since 1984, of InCap Management
Corporation, formerly sub-adviser and administrator of Prime Cash
Fund and Short Term Asset Reserves, and Founder and Chairman of
several other money market funds; Director or Trustee of OCC Cash
Reserves, Inc., Oppenheimer Quest Global Value Fund, Inc.,
Oppenheimer Quest Value Fund, Inc., and Trustee of Quest For Value
Accumulation Trust, The Saratoga Advantage Trust, and of the
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) Class A Shares held of record of the Administrator; does not
include Class C Shares and Class Y Shares described under
"Introduction."
Vernon R. Alden, Trustee, Age: 73, Shares Owned: 214
Director of Colgate Palmolive Company since 1974, Digital Equipment
Corporation, a computer manufacturing corporation, since 1959,
Intermet Corporation, an independent foundry, since 1986, and
Sonesta International Hotels Corporation since 1978; Chairman of
the 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. Treasuries Cash Assets Trust since 1989, of
Cascades Cash Fund, 1989-1994, 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 of the Boston Symphony Orchestra since 1975;
Chairman of the Massachusetts Council on the Arts and Humanities,
1972-1984; Member of the Board of Fellows of Brown University,
1969-1986; Trustee and member of the Executive Committee, Plimoth
Plantation; trustee of various other cultural and educational
organizations; Honorary Consul General of the Royal Kingdom of
Thailand.
Paul Y. Clinton, Trustee, Age: 65, Shares Owned: 200
Principal of Clinton Management Associates, a financial and venture
capital consulting firm; formerly Director of External Affairs of
Kravco Corporation, a national real estate 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 Short Term Asset
Reserves 1984-1996, and of Prime Cash Fund, 1993-1996; 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., and
Trustee of Quest For Value Accumulation Trust, and of the Rochester
Group of Funds, each of which is an open-end investment company.
David A. Duffy, Trustee, Age: 56, Shares Owned: 105 (2)
President, Duffy & Shanley, Inc., an advertising, marketing and
public relations firm since 1973; Chairman, Rhode Island Public
Telecommunications Authority and Rhode Island Sports Council;
Member of the Governor's Commission on Bias and Prejudice; Officer
of numerous civic, religious and educational organizations
including the Rhode Island and Southeastern New England Region of
the National Conference of Christians & Jews, the Greater
Providence Chamber of Commerce, the Strategic Planning Committee of
the Diocese of Providence and the Board of Trustees of Providence
College; he has been the recipient of numerous awards for public
service.
(2) Held of record by Duffy and Shanley, Inc.
Robert L. Krakoff, Trustee, Age: 61, Shares Owned: 123
Chairman and Chief Executive Officer of Advanstar Holdings, Inc.,
since 1996. Chairman and Chief Executive Officer of Cahners
Publishing Company 1991-1996; President of Cahners Publishing
Company 1989-1991; Executive Vice President of that company, 1985-
1989; President of Cahners Exposition Group, a division of that
company, 1979-1985; Vice President of that company, 1973-1985;
Trustee of Capital Cash Management Trust since 1976; Director of
Centennial Capital Special Fund, Inc. until 1979; Trustee of
Trinity Liquid Assets Trust, 1982-1991; Director of Reed Elsevier
International PLC (an international publishing firm) since 1990-
1996; Director of Freedom Communications, Inc. since 1996.
William J. Nightingale, Trustee, Age: 66, Shares Owned: 115
Chairman and founder (1975) and Senior Advisor since 1995 of
Nightingale & Associates, Inc., a general management consulting
firm focusing on interim management, divestitures, turnaround of
troubled companies, 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 Churchill Cash
Reserves Trust and Churchill Tax-Free Fund of Kentucky since 1993;
Director of Yale International, Inc. (various industrial
manufacturing companies); Glasstech Inc. (glass bending equipment
and engineering) and Ring's End, Inc. (retail lumber and building
supply chain).
J. William Weeks, Trustee, Age: 69, Shares Owned: 529
Trustee of Tax-Free Fund of Colorado since 1995; Senior Vice
President of Tax-Free Fund of Colorado 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 and Equity
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, since 1978; 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.
John W. Cody, Vice President, Age: 54
Vice President of the Administrator since 1995; Vice President of
Capital Cash Management Trust and Prime Cash Fund since 1995; Vice
President and formerly Assistant Vice President of National
Westminster Bank NJ (and its predecessor, First Jersey National
Bank) 1985-1994; Vice President of SCA, Inc., a computer software
firm specializing in banking systems, 1983-1984; Second Vice
President, and various other official positions, of Savings Banks
Trust Company 1962-1983; Secretary of Institutional Investors
Mutual Fund, Inc. and M.S.B. Fund, Inc., (for which Savings Banks
Trust Company was investment adviser) 1969-1983.
William C. Wallace, Vice President, Age: 61
Vice President of Capital Cash Management Trust and Pacific Capital
Cash Assets Trust since 1984; Senior Vice President of Hawaiian
Tax-Free Trust since 1985 and Vice President, 1984-1985; Senior
Vice President of Tax-Free Trust of Arizona since 1989 and Vice
President, 1986-1988; Vice President of Tax-Free Trust of Oregon
since 1986, of Churchill Tax-Free Fund of Kentucky and Tax-Free
Fund of Colorado since 1987, of Pacific Capital Tax-Free Cash
Assets Trust and Pacific Capital U.S. Treasuries Cash Assets Trust
since 1988; Secretary and Director of STCM Management Company, Inc.
since 1974; President of the Distributor since 1995 and formerly
Vice President of the Distributor, 1986-1992; Member of the Panel
of Arbitrators, American Arbitration Association, since 1978;
Assistant Vice President, American Stock Exchange, Market
Development Division, and Director of Marketing, American Gold Coin
Exchange, a subsidiary of the American Stock Exchange, 1976-1984.
Rose F. Marotta, Chief Financial Officer, Age: 72
Chief Financial Officer of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1991 and Treasurer, 1981-1991;
formerly Treasurer of the predecessor of CCMT; Treasurer and
Director of STCM Management Company, Inc., since 1974; Treasurer of
Trinity Liquid Assets Trust, 1982-1986 and of Oxford Cash
Management Fund, 1982-1988; Treasurer of InCap Management
Corporation since 1982, of the Administrator since 1984 and of the
Distributor since 1985.
Richard F. West, Treasurer, Age: 60
Treasurer of the Aquila Money-Market Funds and the Aquila Bond and
Equity Funds and of Aquila Distributors, Inc. since 1992; Associate
Director of Furman Selz Incorporated, 1991-1992; Vice 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.
Edward M. W. Hines, Secretary, Age: 56
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines & Mone
LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary of the
Aquila Money-Market Funds and the Aquila Bond and Equity Funds
since 1982; 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, Age: 56
Assistant Secretary of the Aquila Money-Market Funds and the Aquila
Bond and Equity Funds since 1995 and Vice President of the Aquila
Money-Market Funds since 1990; Vice President of the Administrator
since 1990; Investment Services 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.
Patricia A. Craven, Assistant Secretary & Compliance Officer,
Age: 30
Assistant Secretary of the Aquila Money-Market Funds and the Aquila
Bond and Equity Funds since 1995; Counsel to the Administrator and
the Distributor since 1995; formerly a Legal Associate for
Oppenheimer Management Corporation, 1993-1995.
Compensation of Trustees
The Fund does not pay fees to Trustees affiliated with the
Administrator or to any of the Fund's officers. During the fiscal
year ended June 30, 1996, the Fund paid $21,798 in fees and
reimbursement of expenses to its other Trustees. The Fund is one of
the 14 funds in the Aquilasm Group of Funds, which consist of
tax-free municipal bond funds, money market funds and two equity
funds. The following table lists the compensation of all Trustees
who received compensation from the Fund and the compensation they
received during the Fund's fiscal year from other funds in the
Aquilasm Group of Funds. None of such Trustees has any pension or
retirement benefits from the Fund or any of the other funds in the
Aquila group.
[CAPTION]
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Fund Group now serves
Vernon R.
Alden $983 $33,315 7
Paul Y.
Clinton $407 $3,246 2
David A.
Duffy $1,150 $1,150 1
Robert L.
Krakoff $650 $2,100 2
William J.
Nightingale $3,014 $15,239 3
J. William
Weeks $1,850 $6,017 2
The Administrator is administrator to the Aquilasm Group of
Funds which consists of tax-free municipal bond funds, money market
funds and two equity funds. As of June 30, 1996, these funds had
aggregate assets of approximately $2.6 billion, of which
approximately $1.9 billion consisted of assets of the tax-free
municipal bond funds. The Administrator is controlled by Mr. Lacy
B. Herrmann, through share ownership directly, through a trust and
by his wife. For the year ended June 30, 1996, fees of $84,631 and
$99,350, respectively, were accrued to the Adviser under the Fund's
advisory agreement and to the Administrator under the Fund's
administration agreement, of which $74,614 and $94,003,
respectively, were waived. In addition, the Administrator
reimbursed the Fund $205,443 in expenses. During the year ended
June 30, 1996 under the Fund's Distribution Plan $55,194 was paid
to Qualified Recipients of which the Distributor received $1,008.
The Distributor currently handles the distribution of the
shares of fourteen funds (five 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. All
of the shares of the Distributor are owned by Mr. Herrmann.
At the date of this proxy statement, there is a proposed
transaction whereby all of the shares of the Distributor, which are
currently owned by Mr. Herrmann, will be owned by certain directors
and/or officers of the Administrator and/or the Distributor
including Mr. Herrmann.
Other Information on Trustees
The Trustees have appointed an Audit Committee consisting of
all of the Trustees (the "Independent Trustees") who are not
"interested persons," 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. 1)
KPMG Peat Marwick 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, 1997, such
selection is submitted to the shareholders for ratification or
rejection.
The firm has no direct or indirect financial interest in the
Fund, the Fund's Adviser or the Fund's Administrator. 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.
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 the proxy
cards entitle them to vote in accordance with their judgment on
such matter or matters. That is, by signing and returning your
proxy card, you give the proxy holders discretionary authority as
to any such matter or matters.