Dated: July 31, 2000
AQUILA CASCADIA EQUITY FUND
SHAREHOLDER SERVICES PLAN
1. The Plan. This Shareholder Services Plan (the "Plan") is the
written plan of Aquila Cascadia Equity Fund (the "Fund") adopted
to provide for the payment by the Level-Payment Class and the
Financial Intermediary Class shares of the Fund of "service fees"
within the meaning of Rule 2830 of the Conduct Rules of the
National Association of Securities Dealers, Inc. This Plan
applies only to the Level-Payment Class ("Class C") and the
Financial Intermediary Class ("Class I") of shares of the Fund
(regardless of whether such class is so designated or is
redesignated by some other name).
Provisions for Level-Payment Class Shares (Part I)
2. Definitions. As used in Part I of this Plan, "Qualified
Recipients" shall mean broker-dealers or others selected by
Aquila Distributors, Inc. (the "Distributor"), including but not
limited to the Distributor and any other principal underwriter of
the Fund, who have, pursuant to written agreements with the Fund
or the Distributor, agreed to provide personal services to Level-
Payment shareholders and/or maintenance of Level-Payment
shareholder accounts. "Qualified Holdings" shall mean, as to any
Qualified Recipient, all Level-Payment Shares beneficially owned
by such Qualified Recipient's customers, clients or other
contacts. "Administrator" shall mean Aquila Management
Corporation, or any successor serving as administrator of the
Fund.
3. Certain Payments Permitted. Subject to the direction and
control of the Board of Trustees of the Fund, the Fund may make
payments ("Service Fees") to Qualified Recipients, which Service
Fees (i) may be paid directly or through the Distributor or
shareholder servicing agent as disbursing agent and (ii) may not
exceed, for any fiscal year of the Fund (as adjusted for any part
or parts of a fiscal year during which payments under this Part I
of the Plan are not accruable or for any fiscal year which is not
a full fiscal year) 0.25 of 1% of the average annual net assets
of the Fund represented by the Level-Payment Class of shares.
Such payments shall be made only out of the Fund assets allocable
to the Level-Payment Shares. The Distributor shall have sole
authority with respect to the selection of any Qualified
Recipient or Recipients and the amount of Service Fees, if any,
paid to each Qualified Recipient, provided that the total such
Service Fees paid to all Qualified Recipients may not exceed the
amount set forth above and provided, further, that no Qualified
Recipient may receive more than 0.25 of 1% of the average annual
net asset value of Level-Payment Shares sold by such Recipient.
The Distributor is authorized, but not directed, to take into
account, in addition to any other factors deemed relevant by it,
the following: (a) the amount of the Qualified Holdings of the
Qualified Recipient and (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area with respect to holders of Level-Payment Shares,
including without limitation, any or all of the following
activities: answering customer inquiries regarding account status
and history, and the manner in which purchases and redemptions of
shares of the Fund may be effected; assisting shareholders in
designating and changing dividend options, account designations
and addresses; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records;
assisting in processing purchase and redemption transactions;
arranging for the wiring of funds; transmitting and receiving
funds in connection with customer orders to purchase or redeem
shares; verifying and guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder designated accounts; and providing such other related
services as the Distributor or a shareholder may request from
time to time. Notwithstanding the foregoing two sentences, a
majority of the Independent Trustees (as defined below) may
remove any person as a Qualified Recipient. Amounts within the
above limits accrued to a Qualified Recipient but not paid during
a fiscal year may be paid thereafter; if less than the full
amount is accrued to all Qualified Recipients, the difference
will not be carried over to subsequent years.
Provisions for Financial Intermediary Class Shares (Part II)
4. Definitions. As used in Part II of this Plan, "Qualified
Recipients" shall mean broker-dealers or others selected by
Aquila Distributors, Inc. (the "Distributor"), including but not
limited to the Distributor and any other principal underwriter of
the Fund, who have, pursuant to written agreements with the Fund
or the Distributor, agreed to provide personal services to
Financial Intermediary shareholders, maintenance of Financial
Intermediary shareholder accounts and/or pursuant to specific
agreements entering of confirmed purchase orders on behalf of
customers or clients. "Qualified Holdings" shall mean, as to any
Qualified Recipient, all Financial Intermediary Shares
beneficially owned by such Qualified Recipient's customers,
clients or other contacts. "Administrator" shall mean Aquila
Management Corporation, or any successor serving as administrator
of the Fund.
5. Certain Payments Permitted. Subject to the direction and
control of the Board of Trustees of the Fund, the Fund may make
payments ("Service Payments") to Qualified Recipients, which
Service Payments (i) may be paid directly or through the
Distributor or shareholder servicing agent as disbursing agent
and (ii) may not exceed, for any fiscal year of the Fund (as
adjusted for any part or parts of a fiscal year during which
payments under this Part II of the Plan are not accruable or for
any fiscal year which is not a full fiscal year) 0.25 of 1% of
the average annual net assets of the Fund represented by the
Financial Intermediary Class of shares. Such payments shall be
made only out of the Fund assets allocable to the Financial
Intermediary Shares. The Distributor shall have sole authority
with respect to the selection of any Qualified Recipient or
Recipients and the amount of Service Payments, if any, paid to
each Qualified Recipient, provided that the total such Service
Payments paid to all Qualified Recipients may not exceed the
amount set forth above and provided, further, that no Qualified
Recipient may receive more than 0.25 of 1% of the average annual
net asset value of such Recipient's Qualified Holdings. The
Distributor is authorized, but not directed, to take into
account, in addition to any other factors deemed relevant by it,
the following: (a) the amount of the Qualified Holdings of the
Qualified Recipient and (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area with respect to holders of Financial Intermediary
Shares, including without limitation, (i) activities relating to
sub-accounting and record-keeping, including the providing of
necessary personnel and facilities to establish and maintain
shareholder accounts and records, and (ii) activities relating to
account service, such as assisting shareholders in designating
and changing dividend options, account designations and
addresses; answering customer inquiries regarding account status
and history and the manner in which purchases and redemptions of
shares of the Fund may be effected; transmitting and receiving
funds in connection with customer orders to purchase or redeem
shares, including, where appropriate, arranging for the wiring of
funds; assisting in processing purchase and redemption
transactions; and verifying and guaranteeing shareholder
signatures in connection with redemption orders and transfers and
changes in shareholder designated accounts. Notwithstanding the
foregoing two sentences, (a) a majority of the Independent
Trustees (as defined below) may remove any person as a Qualified
Recipient and (b) no fees shall be paid pursuant to this Plan for
activities primarily intended to result in the sale of shares of
the Fund or to finance sales or sales promotion expenses.1 In
addition, fees paid under this Plan shall be subject to such
further limits as may be necessary for the Financial Intermediary
Class of shares to qualify as a "no-load" class for purposes of
the Conduct Rules of the National Association of Securities
Dealers, Inc.2 Amounts within the above limits accrued to a
Qualified Recipient but not paid during a fiscal year may be paid
thereafter; if less than the full amount is accrued to all
Qualified Recipients, the difference will not be carried over to
subsequent years.
General Provisions (Part III)
6. Reports. While this Plan is in effect, the Fund's
Distributor shall report at least quarterly to the Fund's
Trustees in writing for their review on the following matters:
(i) all Service Fees and Service Payments paid under the Plan,
the identity of the Qualified Recipient of each payment, and the
purposes for which the amounts were expended; and (ii) all fees
of the Fund to the Distributor paid or accrued during such
quarter. In addition, if any Qualified Recipient is an
"affiliated person," as that term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), of the Fund,
the Administrator, the Distributor, or the investment adviser or
sub-adviser of the Fund, such person shall agree to furnish to
the Distributor for transmission to the Board of Trustees of the
Fund an accounting, in form and detail satisfactory to the Board
of Trustees, to enable the Board of Trustees to make the
determinations of the fairness of the compensation paid to such
affiliated person, not less often than annually.
7. Effectiveness, Continuation, Termination and Amendment. This
Plan has been approved by a vote of the Trustees, including those
Trustees who, at the time of such vote, were not "interested
persons" (as defined in the 1940 Act) of the Fund and had no
direct or indirect financial interest in the operation of this
Plan or in any agreements related to this Plan (the "Independent
Trustees"), with votes cast in person at a meeting called for the
purpose of voting on this Plan. It is effective as of the date
first above written and will continue in effect for a period of
more than one year from such date only so long as such
continuance is specifically approved at least annually as set
forth in the preceding sentence. It may be amended in like
manner and may be terminated at any time by vote of the
Independent Trustees.
8. Additional Terms and Conditions. (a) This Plan shall also be
subject to all applicable terms and conditions of Rule 18f-3
under the 1940 Act as now in force or hereafter amended.
(b) While this Plan is in effect, the selection and nomination
of those Trustees of the Fund who are not "interested persons" of
the Fund, as that term is defined in the 1940 Act, shall be
committed to the discretion of such disinterested Trustees.
Nothing herein shall prevent the involvement of others in such
selection and nomination if the final decision on any such
selection and nomination is approved by a majority of such
disinterested Trustees.
_______________________________
1In particular, no fees shall be paid, or be deemed to have
been paid, for any of the listed activities to the extent that
such payments are deemed by the Independent Trustees to be so
intended.
2 On the effective date of this Plan, such limitation is as
follows: fees paid under the Plan that satisfy the definition of
"service fees" in Rule 2830(d) of the Conduct Rules of the
National Association of Securities Dealers, Inc. may not exceed
an amount equal to the difference between (i) 0.25 of 1% of the
average annual net assets of the Fund represented by the
Financial Intermediary Class of shares and (ii) the amount paid
from the assets of the Financial Intermediary Class under the
Distribution Plan of the Fund. Where necessary or appropriate,
the Independent Trustees, or such appropriate officer or officers
of the Fund as they may designate, shall, with the advice of
counsel, determine what fees paid under this Plan are to be
deemed "service fees." Nevertheless, it is understood that, as
a general matter, fees allocable to activities in category (i)
above -- sub-accounting and record-keeping -- are not "service
fees," while fees allocable to activities in category (ii) --
account service -- are "service fees." In like manner,
allocation of payments among activities shall also be determined
by the Independent Trustees or their delegates.
