-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JlC8XMlZjEFxzBuEqWDejPsf1fTP+wxkAzPgppdtWg9hhTuhKgYgpz4cMMdLpXG4 ZOuhZj0/syyYJz+ZUIiNzQ== 0000791049-01-500002.txt : 20010315 0000791049-01-500002.hdr.sgml : 20010315 ACCESSION NUMBER: 0000791049-01-500002 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010507 FILED AS OF DATE: 20010314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASCADES TRUST CENTRAL INDEX KEY: 0000791049 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136868231 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 811-04626 FILM NUMBER: 1567615 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE STE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: # 2300 CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: TAX FREE TRUST OF OREGON DATE OF NAME CHANGE: 19890810 DEF 14A 1 orpxo1d.txt PROXY STATEMENT AND FORM OF PROXY Important Notice Please Read Immediately Aquilasm Group of Funds Tax-Free Trust of Oregon 380 Madison Avenue, Suite 2300, New York, N Y 10017 Notice of Annual Meeting of Shareholders to Be Held on May 7, 2001 To Shareholders of the Trust: The purpose of this Notice is to advise you that an Annual Meeting of the Shareholders of Tax-Free Trust of Oregon (the "Trust"), the only series of the Cascades Trust, will be held: Place: (a) at the World Forestry Center Cheatham Hall, 4033 SW Canyon Road Portland, Oregon; Time: (b) on Monday, May 7, 2001 at 2:00 p.m. local time; Purposes: (c) for the following purposes: (i) to elect nine Trustees; each Trustee elected will hold office until the next annual meeting of the Trust'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 Trust's independent auditors for the fiscal year ending September 30, 2001 (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 Trust's records at the close of business on February 9, 2001 (the "record date"). Also, the number of shares of each of the Trust'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 March 12, 2001 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 Trust, we request your cooperation in voting no matter how large or small your holding may be. Tax-Free Trust of Oregon 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 Tax-Free Trust of Oregon (the "Trust") the only series of the Cascades Trust. 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 Trust's most recent annual report and most recent semi-annual report will be sent to you without charge upon written request to the Trust's Distributor, Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New York, NY 10017 or by calling 800-437-1020 toll free or 212-697-6666. The Trust's founder and Manager (the "Manager") is Aquila Management Corporation, 380 Madison Avenue, Suite 2300, New York, NY 10017. The Trust's principal underwriter (the "Distributor") is Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New York, NY 10017. The Trust's Investment Sub-Adviser is U.S. Bank National Association (the "Sub-Adviser"), 601 Second Avenue, Minneapolis, MN 55402. This Notice and Proxy Statement are first being mailed on or about March 12, 2001. 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 Trust 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 the box on the proposal, the proxy holders will vote your shares for that proposal. 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. Internet Voting To vote your shares by the Internet, please contact the Trust at the 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 Trust in writing; (ii) signing a new and different proxy card (if the Trust 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 described above or contacting the Trust's Internet address described above, entering your 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. The Trust 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 Trust 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 Trust's shares so that these owners may authorize the voting of their shares. The Trust will pay these firms their out-of-pocket expenses for doing so. On the record date, the Trust had three classes of shares outstanding. All shareholders of the Trust 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 Trust's outstanding classes of shares was as follows: Class A Shares, $10.63; Class C Shares, $10.62; and Class Y Shares, $10.63 The meeting is expected to act only upon matters that affect the Trust as a whole: the election of Trustees and the action on the proposal. On matters that affect the Trust as a whole, all shareholders of the Trust, including the shareholders of all classes of the Trust, 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, 28,208,780; Class C Shares, 648,412; and Class Y Shares, 2,149,312. On the record date, the following institutional holders held 5% or more of the Trust's outstanding shares. On the basis of information received from the holders the Trust'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 Institutional 5% shareholders Merrill, Lynch, Pierce, Fenner & Smith, Inc., 4800 Deer Lake Drive East, Jacksonville, FL 1,558,202 Class A Shares 5.52% 101,745 Class C Shares 15.69% Fiserv Securities Inc. One Commerce Square 2005 Market St Philadelphia, PA 70,070 Class C Shares 10.81% Wedbush Morgan Securities, 1000 Wilshire Blvd., Los Angeles, CA 40,014 Class C Shares 6.17% US Bankcorp Investments Inc. 100 S. Fifth St. Minneapolis, MN 50,253 Class C Shares 7.75% (held in 3 accounts) US Bank National Association PO Box 64010 St. Paul, MN 781,952 Class Y Shares 36.38% (as custodian) (held in 9 accounts) The Trust'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, nine 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 May 2000 except for Mr. Leach. The Trustees and officers as a group own less than 1% of the outstanding shares of the Trust. In the material below and elsewhere in this Proxy Statement, Aquila Management Corporation is referred to as the "Manager" and the Trust's Distributor, Aquila Distributors, Inc., is referred to as the "Distributor." Mr. Herrmann is an interested person of the Trust as that term is defined in the Investment Company Act of 1940 (the "1940 Act") as an officer of the Trust and a director, officer and shareholder of the Manager and the Distributor. Ms. Herrmann is an interested person of the Trust as an officer of the Trust, an officer, director and shareholder of the Manager and a shareholder and director of the Distributor. Each is also an interested person as a member of the immediate family of the other. Mr. Lung is an interested person as a security holder of the Sub-Adviser's parent. Mr. Mitchell is an interested person as a security holder of the Sub-Adviser's parent. 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 (this Trust), 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"; Capital Cash Management Trust, Capital Cash U.S. Government Securities Trust, 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"; 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, positions with the Trust, address, age as of the record date and business experience during at least the past five years of each nominee and each officer of the Trust. All shares listed as owned by the Trustees are Class A Shares unless indicated otherwise. Name, Position Business Experience with the Trust, Address, Age 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: 217 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 and Capital Cash U.S. Government Securities 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. David B. Frohnmayer President, University of Oregon since Trustee 1994;Dean of the University of Oregon University of Oregon Law School, 1992-1994; Attorney General 110 Johnson Hall of the State of Oregon, 1981-1991; Eugene, OR 97403 Trustee of Aquila Cascadia Equity Fund Age: 60 and Tax-Free Trust of Oregon (this Trust) Shares Owned: 537(1) since 1997. (1) Held jointly with his wife. James A. Gardner President of Gardner Associates, Trustee an investment and real estate firm, 1336 NE Eby Ave since 1970; President Emeritus of Terrebonne, Lewis and Clark College and Law OR 97760 School since 1989 and President, Age: 57 1981-1989; Program Officer and County Shares Owned: 377(2) representative of the Ford Foundation, 1969-1981; Lecturer and Assistant Director of Admissions of Harvard College, 1968-1969; Member of the Oregon Young Presidents Organization since 1983; Member of the Council on Foreign Relations since 1988; Founding Member of the Pacific Council since 1995; Trustee of Tax-Free Trust of Oregon(this Trust) since 1986 and of Cascades Cash Fund, 1989-1994; Trustee of Aquila Cascadia Equity Fund since 1996; Director of the Oregon High Desert Museum since 1989; active in civic, business, educational and church organizations in Oregon. (2) Held as of 3/05/01. Diana P. Herrmann* President and Chief Operating Officer of Trustee and President the Manager 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 Shares Owned: 676 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 Trust'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. Sterling K. Jenson Managing Principal, Institutional Asset Trustee Management, Wells Fargo, 2000-present; 61 South Main Street President and Chief Executive Officer of Salt Lake City, UT 84111 First Security Investment Management Age: 48 1995-2000 and Senior Vice President, Shares Owned: 188(3) 1990-1995; Chartered Financial Analyst(CFA) since 1984; Trustee of Aquila Cascadia Equity Fund and Tax-Free Trust of Oregon (this Trust)since 1999; past President of Salt Lake City Society of Financial Analysts (1996-1997); member of various investment-related and charitable organizations. (3) Held as of 2/13/01. Timothy J. Leach Executive Vice President & Chief Investment Trustee Officer, Private Asset Management, Wells Fargo, 420 Montgomery Street San Francisco, CA, 1999-present; San Francisco, CA 94104 President and Chief Investment Officer of Age: 44 ABN Amro Asset Management(USA), 1998-1999; Shares Owned: 943(4) President & Chief Investment Officer of Qualivest Capital Management Inc. and Senior Vice President & CIO, Trust & Investment Group, US Bancorp, Portland, OR, 1994-1998. Member of the San Francisco Society of Financial Analysts. (4) Held as of 3/05/01 jointly with his wife. Raymond H. Lung* Retired; Trustee of Qualivest Group of Trustee Funds, 1994-1997; Executive Vice 16199 NW President and Executive Trust Officer of Canterwood Way, U.S. National Bank of Oregon, 1989-1991; Portland, OR 97229 Senior Vice President and Executive Trust Age: 74 Officer, 1980-1989; various other management Shares Owned: 29,804(5) positions, 1954-1980; Member of the Executive Committee of the Trust Division of American Bankers Association, 1986-1988; Director of Pacific Securities Depository Trust Company and Pacific Clearing Corporation (subsidiaries of the Pacific Stock Exchange), 1980-1987; Director of Collins Pine Company and Ostrander Companies (lumber and oil), 1980-1990; Trustee of Tax-Free Trust of Oregon (this Trust)since 1992, of Cascades Cash Fund, 1992-1994 and of Aquila Cascadia Equity Fund since 1996. (5) Held with his wife as Trustees. John W. Mitchell* Principal of M & H Economic Trustee Consultants; Economist, Western Region, P.O. Box 40012 for U. S. Bancorp since 1998; Portland, OR 97240 Chief Economist of U.S. Bancorp, Age: 56 Portland, Oregon, 1983-1998; Shares Owned: 956 Professor of Boise State University, 1970-1983; Member of the Oregon Governor's Council of Economic Advisors, 1984-1998; Chairman of the Oregon Governor's Technical Advisory Committee for Tax Review in 1998; Trustee of Aquila Cascadia Equity Fund and Tax Free Trust of Oregon (this Trust) since 1999. Ralph R. Shaw General Partner, Shaw Management Company, Trustee an investment counseling firm, since 400 SW Sixth Avenue 1980, of Shaw Venture Partners since 1983, Suite 1100 of Shaw Venture Partners II since 1987 Portland, OR 97204 and of Shaw Venture Partners III since 1994. Age: 62 (US Bancorp, parent of the Sub-Adviser, is a Shares Owned: 1,026 limited partner in the last three ventures.) Mr. Shaw presently serves on the boards of directors of Schnitzer Steel Industries, Inc., Magni Systems, Inc., Micromonitors, Inc., Integra Telecom, Inc. (formerly OGIT Communications, Inc.), Dendreon Corporation (formerly Activated Cell Therapy, Inc.), LaTIS, Inc., Industrial Devices Corporation, Telestream, Inc., 3PF.COM, Inc.(formerly ComAlliance, Inc.), Automation Solutions International and BMG Seltec Corp. Additionally, he serves on the Board of Advisors of K-2 Designs, Inc. and as trustee of the Tax-Free Trust of Oregon (this Trust) and Aquila Cascadia Equity Fund since 2000. He is active in local civic and charitable organizations. James M. McCullough Senior Vice President of Aquila Senior Vice Cascadia Equity Fund, Aquila Rocky President Mountain Equity Fund, Tax-Free Fund 2019 Lloyd Center of Colorado and Tax-Free Trust of Oregon Portland, OR 97232 (this Trust) since 1999 and of Aquila Age: 56 Distributors since 2000; Vice President, Churchill Tax-Free Fund of Kentucky since 2000; Director of Fixed Income Institutional Sales, CIBC Oppenheimer & Co.Inc., Seattle, WA, 1995-1999; Sales Manager, Oregon Municipal Bonds, Kidder, Peabody, Inc. (acquired in 1995 by Paine, Webber), Portland, OR, 1994-1995. Kerry A. Lemert Vice President of Aquila Cascadia Equity Vice President Fund and Tax-Free Trust of Oregon (this Trust) 2019 Lloyd Center since 1998; Assistant Vice President, Black & Portland, OR 97232 Co., 1997-1998; Dealer-Sales and Assistant Age: 46 Municipal bond trader, Pacific Crest Securities, 1994-1997; Assistant Municipal Bond Trader, Registered Sales Assistant, Paine Webber Inc., Portland OR, 1988-1994; Sales Assistant, E.F. Hutton & Co., Inc., Portland, OR, 1984-1988. Christine L. Neimeth Vice President of Aquila Cascadia Equity Vice President Fund and Tax-Free Trust of Oregon (this 2019 Lloyd Center Trust) since 1998; Management Information Portland, OR 97232 Systems consultant, Hillcrest Ski and Age: 36 Sport, 1997; Institutional Municipal Bond Salesperson, Pacific Crest Securities, 1996; Institutional Bond Broker, Hilliard Farber and Company 1991-1995; Bond Trader, Bear Stearns and Company, 1989-91. Active in college alumni and volunteer organizations. 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; Chief Financial Officer of the Manager since 1984 and of the Distributor, 1985-2000. Joseph P. DiMaggio Treasurer of the Aquila Money-Market, Treasurer Bond and Equity Funds since 2001; Treasurer 380 Madison Avenue of Aquila Distributors, Inc. since New York, NY 10017 2000; Controller of Van Eck Global Funds, Age: 44 1993-2000; Mutual Fund Accounting Manager of Alliance Capital Management L.P., 1985-1993. 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: 34 Investment Companies, 1994-1995; Fund Accounting Supervisor of Dean Witter Group of Investment Companies, 1990-1994. Edward M. W. Hines Partner of Hollyer Brady Smith & Hines Secretary LLP, attorneys, since 1989 and counsel, 551 Fifth Avenue 1987-1989; Secretary of the Aquila Money-Market, New York, NY Bond and Equity Funds since 1982; Secretary 10176 of Trinity Liquid Assets Trust, 1982-1985 and Age: 61 Trustee of that Trust, 1985-1986; Secretary of Oxford Cash Management Fund, 1982-1988. Robert W. Anderson Compliance Officer of Aquila Management Assistant Secretary Corporation since 1998 and Assistant 380 Madison Avenue Secretary of the Aquila Money-Market Funds New York, NY 10017 and the Aquila Bond and Equity Funds since 2000; Age: 60 Consultant, The Wadsworth Group, 1995-1998; Executive Vice President of Sheffield Management Company (investment adviser and distributor of a mutual fund group), 1986-1995. 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 Age: 61 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. The Trust does not currently pay fees to any of the Trust's officers or to Trustees affiliated with the Manager or the Sub-Adviser. For its fiscal year ended September 30, 2000 the Trust paid a total of $91,902 in compensation and reimbursement of expenses to the Trustees. No other compensation or remuneration of any type, direct or contingent, was paid by the Trust to its Trustees. The Trust is one of the 14 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 Trustee who received compensation from the Trust or from other funds in the Aquilasm Group of Funds during the Trust's fiscal year. None of such Trustees has any pension or retirement benefits from the Trust 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 Trust Aquilasm serves Name Group of Funds David B. Frohnmayer 7,400 9,250 2 James A. Gardner 9,400 11,900 2 Sterling K. Jenson 8,200 10,050 2 Raymond H. Lung 8,900 11,800 2 John W. Mitchell 8,300 10,600 2 Ralph R. Shaw 6,250 7,750 2 Class A Shares may be purchased without a sales charge by certain of the Trust's Trustees and officers. The Trust'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 December 31, 2000 these funds had aggregate assets of approximately $3.1 billion, of which approximately $1.8 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 September 30, 2000 the Trust incurred Management fees of $1,264,345. During the fiscal year ended September 30, 2000, $439,079 was paid under Part I of the Trust's Distribution Plan to Qualified Recipients with respect to the Class A Shares, of which $15,277 was retained by the Distributor. With respect to Class C Shares, during the same period $32,867 was paid under Part II of the Plan and $10,956 was paid under the Shareholder Services Plan. Of these total payments of $43,823, the Distributor received $24,831. All of such payments were for compensation. 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 Trust. 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 employees of Aquila Management Corporation. 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 Trust, 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 Trust's internal accounting procedures and controls. The Committee held {one} meeting during the Trust's last fiscal year. The Board of Trustees does not have a nominating committee. During the Trust'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 Trust's auditors, has been selected by the Trust's Board of Trustees, including a majority of the Independent Trustees, as the Trust's independent auditors for the fiscal year ending September 30,2001. Such selection is submitted to the shareholders for ratification or rejection. The firm has no direct or indirect financial interest in the Trust, the Trust's Manager or the Trust's 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. 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 Trust's proxy statement and proxy card for a particular annual meeting. One of these conditions relates to the timely receipt by the Trust of any such proposal. Under these rules, proposals submitted for inclusion in the proxy material for the Trust's next annual meeting after the meeting to which this Proxy Statement relates must be received by the Trust 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 Trust will so advise you. The fact that the Trust receives a shareholder proposal in a timely manner does not insure its inclusion in the Trust's proxy material, since there are other requirements in the proxy rules relating to such inclusion. Other Business The Trust 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 Tax-Free Trust of Oregon NOTICE OF ANNUAL MEETING OF SHAREHOLDERS to be held on May 7, 2001 PROXY STATEMENT Aquilasm Group of Funds Tax-Free Trust of Oregon CLASS-A Proxy for Shareholders Meeting May 7, 2001 Proxy Solicited on Behalf of the Board of Trustees The undersigned shareholder of Tax-Free Trust of Oregon (the Trust) 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 Trust to be held on Monday, May 7, 2001 at the World Forestry Center, Cheatham Hall, 4033 SW Canyon Road, Portland, OR at 2:00 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 info@aquilafunds.com 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 voting To vote your shares by the Internet, contact the Trust 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. Annual Meeting Attendance We encourage you to attend the Annual Meeting of Shareholders. If you can join us, please indicate it on the proxy card or e-mail us at info@aquilafunds.com TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: - ----------------------------------------------------------------- THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED Tax-Free Trust of Oregon CLASS-A 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) David B. Frohnmayer; 03) James A. Gardner; 04) Diana P. Herrmann*; 05) Sterling K. Jenson; 06) Timothy J. Leach; 07) Raymond H. Lung*; 08) John W. Mitchell*; 09) Ralph R. Shaw. * 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. - ---------------- [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 below or For if no choice is indicated. 2. Action on selection of KPMG LLP as independent auditors (Proposal No.2 in Proxy Statement) FOR [__] AGAINST [__] ABSTAIN [__] As to any other matter said proxies shall vote in accordance with their best judgment. Please indicate if you plan to attend one of the Shareholder Meetings. If you mark one of the boxes below, you must return the proxy card by mail to have this information recorded. I plan to attend the annual meeting in Portland[__] I plan to attend the outreach meeting in Salem[__] 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) Aquilasm Group of Funds Tax-Free Trust of Oregon CLASS-C Proxy for Shareholders Meeting May 7, 2001 Proxy Solicited on Behalf of the Board of Trustees The undersigned shareholder of Tax-Free Trust of Oregon (the Trust) 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 Trust to be held on Monday, May 7, 2001 at the World Forestry Center, Cheatham Hall, 4033 SW Canyon Road, Portland, OR at 2:00 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 info@aquilafunds.com 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 voting To vote your shares by the Internet, contact the Trust 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. Annual Meeting Attendance We encourage you to attend the Annual Meeting of Shareholders. If you can join us, please indicate it on the proxy card or e-mail us at info@aquilafunds.com TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: - ----------------------------------------------------------------- THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED Tax-Free Trust of Oregon CLASS-C 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) David B. Frohnmayer; 03) James A. Gardner; 04) Diana P. Herrmann*; 05) Sterling K. Jenson; 06) Timothy J. Leach; 07) Raymond H. Lung*; 08) John W. Mitchell*; 09) Ralph R. Shaw. * 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. - ---------------- [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 below or For if no choice is indicated. 2. Action on selection of KPMG LLP as independent auditors (Proposal No.2 in Proxy Statement) FOR [__] AGAINST [__] ABSTAIN [__] As to any other matter said proxies shall vote in accordance with their best judgment. Please indicate if you plan to attend one of the Shareholder Meetings. If you mark one of the boxes below, you must return the proxy card by mail to have this information recorded. I plan to attend the annual meeting in Portland[__] I plan to attend the outreach meeting in Salem[__] 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) Aquilasm Group of Funds Tax-Free Trust of Oregon CLASS-Y Proxy for Shareholders Meeting May 7, 2001 Proxy Solicited on Behalf of the Board of Trustees The undersigned shareholder of Tax-Free Trust of Oregon (the Trust) 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 Trust to be held on Monday, May 7, 2001 at the World Forestry Center, Cheatham Hall, 4033 SW Canyon Road, Portland, OR at 2:00 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 info@aquilafunds.com 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 voting To vote your shares by the Internet, contact the Trust 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. Annual Meeting Attendance We encourage you to attend the Annual Meeting of Shareholders. If you can join us, please indicate it on the proxy card or e-mail us at info@aquilafunds.com TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: - ----------------------------------------------------------------- THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED Tax-Free Trust of Oregon CLASS-Y 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) David B. Frohnmayer; 03) James A. Gardner; 04) Diana P. Herrmann*; 05) Sterling K. Jenson; 06) Timothy J. Leach; 07) Raymond H. Lung*; 08) John W. Mitchell*; 09) Ralph R. Shaw. * 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. - ---------------- [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 below or For if no choice is indicated. 2. Action on selection of KPMG LLP as independent auditors (Proposal No.2 in Proxy Statement) FOR [__] AGAINST [__] ABSTAIN [__] As to any other matter said proxies shall vote in accordance with their best judgment. Please indicate if you plan to attend one of the Shareholder Meetings. If you mark one of the boxes below, you must return the proxy card by mail to have this information recorded. I plan to attend the annual meeting in Portland[__] I plan to attend the outreach meeting in Salem[__] 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) -----END PRIVACY-ENHANCED MESSAGE-----