-----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, KaIvEgDk80XRY2oHYS1CwUGhjG7vAVdAmhwkSBIR46P85IAHyh4AxUlJF6nhrodr muHz5aeglKgKod+rbiipow== 0000791049-02-000007.txt : 20020415 0000791049-02-000007.hdr.sgml : 20020415 ACCESSION NUMBER: 0000791049-02-000007 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020507 FILED AS OF DATE: 20020326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASCADES TRUST CENTRAL INDEX KEY: 0000791049 IRS NUMBER: 136868231 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-04626 FILM NUMBER: 02586400 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 orpx02d.txt PROXY STATEMENT AND FORM OF CARD 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, 2002 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 Tuesday, May 7, 2002 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, 2002 (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 March 5, 2002 (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 20, 2002 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. 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. Bancorp Asset Management, Inc. (the "Sub-Adviser"), 555 S.W. Oak Street, Portland, Oregon 97204 A copy of the Trust's most recent annual report will be sent to you without charge upon written request to the Distributor, at that 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 March 20, 2002. You should read the 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, 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 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 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 Trust 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 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 provided 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 or otherwise counted as present in determining voting results. 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, $10.68; Class C Shares, $10.67; and Class Y Shares, $10.67. The meeting is expected to act only upon matters that affect the Trust as a whole: the election of Trustees and the selection of independent auditors. On matters that affect the Trust as a whole, all shareholders of the Trust, including the shareholders of all classes of shares 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, 29,474,570; Class C Shares, 1,631,856; and Class Y Shares, 2,164,537. On the record date, the following holders held 5% or more of the outstanding shares of a class of Trust shares. On the basis of information received from the institutional 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 277,627 Class C Shares 17.01% National Financial Services Corporation 200 Liberty Street New York, NY 1,918,236 Class Y Shares 88.62% 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 vote your shares in the election of Trustees. The following material includes the name, positions with the Trust, address, date of birth and business experience during at least the past five years of each nominee and each officer of the Trust. All shares of the Trust listed as owned by the Trustees are Class A Shares unless indicated otherwise. All of the nominees are presently Trustees and were elected by the shareholders in April, 2001, except for Patricia L. Moss and Nancy Wilgenbusch, who were elected by the Trustees to take office January 1, 2002. Trustees and Officers
Number of Positions Held Portfolios in with Fund Complex Trust Overseen by Name, Address(1) and and Length of Principal Occupation(s) Trustee Other Directorships Date of Birth Service(2) During Past 5 Years Held by Trustee Interested Trustees(3) Lacy B. Herrmann Chairman of the Founder and Chairman of the 14 Director or trustee, OCC Cash New York, NY Board of Board, Aquila Management Reserves, Inc., OCC (05/12/29) Trustees since Corporation, the sponsoring Accumulation Trust, Oppenheimer 1985 organization and Manager or Quest Value Funds Group, Administrator and/or Adviser or Oppenheimer Small Cap Value Sub-Adviser to the Aquilasm Fund, Oppenheimer Midcap Fund, Group of Funds (4) and Founder, and Oppenheimer Rochester Group Chairman of the Board of of Funds. Trustees and (currently or until 1998) President of each since its establishment, beginning in 1984; Director of the Distributor since 1981and formerly Vice President or Secretary, 1981-1998; President and a director, STCM Management Company, Inc., sponsor and investment adviser to Capital Cash Management Trust and Capital Cash U.S. Government Securities Trust, since 1973; Trustee Emeritus, Brown University and active in university, school and charitable organizations. Diana P. Herrmann Trustee since President and Chief Operating 9 None New York, NY 1994 and Officer of the Manager since (02/25/58) President 1997, a Director since 1984, since 1998 Secretary since 1986 and previously its Executive Vice President, Senior Vice President or Vice President, 1986-1997; President, Senior Vice President or Executive Vice President of 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; active in mutual fund and trade organizations and in charitable and volunteer organizations. Raymond H. Lung Trustee since Retired; trustee, Qualivest 2 None Portland, OR 1992 Group of Funds, 1994-1997; (12/24/26) former Executive Vice President and Executive Trust Officer, U.S. National Bank of Oregon; previously active in bank trade organizations and director of certain Pacific Northwest companies. John W. Mitchell Trustee since Principal of M & H Economic 2 None Portland, OR 1999 Consultants; Economist, Western (07/13/44) Region, for U. S. Bancorp since 1998; Chief Economist, U.S. Bancorp, Portland, Oregon, 1983-1998; member, Oregon Governor's Council of Economic Advisors, 1984-1998; Chairman, Oregon Governor's Technical Advisory Committee for Tax Review in 1998. Non-interested Trustees David B. Frohnmayer Trustee since President, University of Oregon 2 Umpqua Holding Company Eugene, OR 1997 since 1994; former Dean of the (07/09/40) University of Oregon Law School and former Attorney General of the State of Oregon. James A. Gardner Trustee since President, Gardner Associates, 2 None Terrebonne, OR 1986 an investment and real estate (07/06/43) firm, since 1989; partner, the Canyons Ranch, a real estate firm, since 1991; President Emeritus, Lewis and Clark College and Law School; director, Oregon High Desert Museum since 1989; active in civic, business, educational and church organizations in Oregon. Patricia L. Moss Trustee since President and Chief Executive 2 Cascade Bancorp and Bank of Bend, OR 2002 Officer, Cascade Bancorp & Bank the Cascades(5) (07/23/53) of the Cascades since 1998, and Executive Vice President & director, Chief Financial Officer, Chief Operating Officer, 1987-1998; director, Oregon Bankers Association; active in community and educational organizations. Ralph R. Shaw Trustee since General Partner, Shaw Management 2 Schnitzer Steel Industries, Portland, OR 2000 Company, an investment Inc., Magni Systems, Inc., (08/23/38) counseling firm, since 1980, of Severon Corporation Shaw Venture Partners since (formerly Micromonitors, 1982, of Shaw Venture Partners Inc.), Integra Telecom, Inc. II since 1987 and of Shaw (formerly OGIT Venture Partners III since 1994 Communications, Inc.), (US Bancorp, parent of the Dendreon Corporation Sub-Adviser, is a limited (formerly Activated Cell partner in the last three Therapy, Inc.), LaTIS, Inc., ventures); active in local civic Telestream, Inc., 3PF.com, and charitable organizations. Inc. (formerly ComAlliance, Inc.), BMG Seltec Corp. Nancy Wilgenbusch Trustee since President, Marylhurst University 2 Chair, Oregon Regional Marylhurst, OR 2002 since 1984; member, Ethics Advisory Board for (09/17/47) Committee of the American PacifiCorp ; member, Institute of Certified Public PacifiCorp Advisory Board Accountants; active board member for Scottish Power; Chair, of a number of civic Portland Branch of the organizations. Federal Reserve Bank of San Francisco; director, Cascade Corporation. Officers James M. McCullough Senior Vice Senior Vice President or Vice N/A N/A Portland, OR (06/11/45) President President of five Aquila Bond since 1999 and Equity Funds; Senior Vice President of the Distributor since 2000; Director of Fixed Income Institutional Sales, CIBC Oppenheimer & Co. Inc., Seattle, WA, 1995-1999. Christine L. Neimeth Vice President Vice President of three Aquila N/A N/A Portland, OR since 1998 Bond and Equity Funds; (02/10/64) Management Information Systems consultant, Hillcrest Ski and Sport, 1997; Institutional Municipal Bond Salesperson, Pacific Crest Securities, 1996; active in college alumni and volunteer organizations. Rose F. Marotta Chief Chief Financial Officer of the N/A N/A New York, NY Financial Aquilasm Group of Funds since (05/08/24) Officer since 1991 and Treasurer, 1981-1991; 1991 Treasurer and director , STCM Management Company, Inc., since 1974; Treasurer of the Manager since 1984 and of the Distributor, 1985-2000. Joseph P. DiMaggio Treasurer Treasurer of the Aquilasm Group N/A N/A New York, NY since 2000 of Funds and the Distributor (11/06/56) since 2000; Controller, Van Eck Global Funds, 1993-2000. Edward M. W. Hines Secretary Partner, Hollyer Brady Smith & N/A N/A New York, NY since 1985 Hines LLP, legal counsel to the (12/16/39) Trust, since 1989; Secretary of the Aquilasm Group of Funds. Lori A. Vindigni Money- Market, Assistant Treasurer of the N/A N/A New York, NY Bond and Aquilasm Group of Funds since (11/02/66) Equity Funds: 2000; Assistant Vice President Assistant of the Manager since 1998; Fund Treasurer Accountant for the Aquilasm since 2000 Group of Funds, 1995-1998. Robert W. Anderson Assistant Compliance Officer of the N/A N/A New York, NY (08/23/40) Secretary Manager since 1998 and Assistant since 2000 Secretary of the Aquilasm Group of Funds since 2000; Consultant, The Wadsworth Group, 1995-1998. John M. Herndon Assistant Assistant Secretary of the N/A N/A New York, NY (12/17/39) Secretary Aquilasm Group of Funds since since 1995 1995 and Vice President of the five Aquila Money-Market Funds since 1990; Vice President of the Manager since 1990. (1) The mailing address of each Trustee and officer is c/o Tax-Free Trust of Oregon, 380 Madison Avenue, New York, NY 10017. (2) 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. (3) Mr. Herrmann and Ms. Herrmann are interested persons of the Trust, as that term is defined in the 1940 Act, as officers of the Trust and affiliates of both the Manager and the Distributor. Each is also an interested person as a member of the immediate family of the other. Mr. Lung and Mr. Mitchell are interested persons as security holders of the Sub-Adviser's parent. (4) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S. Government Securities Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, Capital Cash Management Trust and Capital Cash U.S. Government Securities 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"; and Aquila Cascadia Equity Fund and Aquila Rocky Mountain Equity Fund are called the "Aquila Equity Funds"; considered together, these 14 funds are called the "Aquilasm Group of Funds." (5) Bank of the Cascades has a Federal Funds line of credit in the amount of $3.5 million with U.S. Bank NA, an affiliate of the Sub-Adviser.
Securities Holdings of the Trustees (as of 12/31/01) Dollar Range of Ownership Aggregate Dollar Range in of Name of Tax-Free Trust of Oregon(1) Ownership in Aquilasm Investment Companies Overseen by Trustee(1) Interested Trustees Lacy B. Herrmann B E Diana P. Herrmann B D Raymond H. Lung E E John W. Mitchell C C Non-interested Trustees David B. Frohnmayer B B James A. Gardner B B Patricia L. Moss C(2) C(2) Ralph R. Shaw C C Nancy Wilgenbusch B(3) B(3) (1) A. None B. $1-$10,000 C. $10,001-$50,000 D. $50,001-$100,000 E. over $100,000 (2) Purchased February 5, 2002. (3) Purchased March 22, 2002. None of the non-interested Trustees or their immediate family members holds of record or beneficially any securities of the Manager, the Sub-Adviser or the Distributor. 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, 2001, the Trust paid a total of $104,696 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 7,800 9,950 2 James A. Gardner 11,000 14,300 2 Raymond H. Lung 9,300 12,150 2 John W. Mitchell 8,950 11,450 2 Ralph R. 9,300 11,800 2 Shaw 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. As of February 28, 2002 these funds had aggregate assets of approximately $3.5 billion, of which approximately $2.0 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, 2001 the Trust incurred Management fees of $1,317,686. During the fiscal year ended September 30, 2001, $447,670 was paid under Part I of the Trust's Distribution Plan to Qualified Recipients with respect to the Class A Shares, of which $16,998 was retained by the Distributor. With respect to Class C Shares, during the same period $64,698 was paid under Part II of the Plan and $21,566 was paid under the Shareholder Services Plan. Of these total payments of $86,264, the Distributor received $59,643. 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 who are not "interested persons" of the Trust, as that term is defined in the 1940 Act. The members of the Audit Committee are David B. Frohnmayer, James A. Gardner, Patricia L. Moss, Ralph R. Shaw and Nancy Wilgenbusch. None of the members of the Committee is an "interested person" of the Trust. 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. During the Trust's last fiscal year, the Board of Trustees held four meetings. Except for Ms. Moss and Ms. Wilgenbusch, who took office January 1, 2002, 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 Board of Trustees does not have a nominating committee. Since the beginning of the Trust's most recently completed fiscal year, no Trustee purchased or sold shares of the Manager, Sub-Adviser or the parents or subsidiaries of either except for Ms. Moss, whose husband sold all of his shares of the Sub-Adviser's parent before she became a Trustee. Ratification or Rejection of Selection of Independent Auditors (Proposal No. 2) KPMG LLP ("KPMG"), which is currently serving as the Trust's independent 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, 2002. Such selection is submitted to the shareholders for ratification or rejection. The Trust paid the following fees to KPMG during the fiscal year ended September 30, 2001: Audit Fees: $17,000 Financial Information Systems Design and Implementation 0 All Other Fees $6,027 (Fees for preparation of the Trust's tax returns and correspondence, tax-equivalent yields.) KPMG did not perform any services during the fiscal year for the Trust's investment adviser (the Manager) or any entity controlling, controlled by or under common control with the Manager that provides services to the Trust. The Audit Committee of the Trust's Board of Trustees has reviewed all services performed and fees charged by KPMG and has determined that the provision of non-audit services reflected in the table is compatible with maintaining KPMG's independence. The Committee has recommended to the Trustees that KPMG be reappointed for the fiscal year ending September 30, 2002. KPMG has no direct or indirect financial interest in the Trust, the Manager or the Sub-Adviser. It is expected that representatives of KPMG 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, 2002 PROXY STATEMENT Aquilasm Group of Funds Tax-Free Trust of Oregon Proxy for Shareholders Meeting May 7, 2002 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 Tuesday, May 7, 2002 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 www.proxyvote.com 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 For address changes and/or comments, please check this box and write them on the back. [_] Vote on Trustees (Proposal No.1 in Proxy Statement) 1. Election of Trustees 1) Lacy B. Herrmann*; 2) David B. Frohnmayer; 03) James A. Gardner; 04) Diana P. Herrmann*; 05) Raymond H. Lung*; 06) John W. Mitchell*; 07) Patricia L Moss; 8) Ralph R. Shaw; 9) Nancy Wilgenbusch * 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 Eugene[__] 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-----