Dated: July 31, 2000
AQUILA CASCADIA EQUITY FUND
Rule 18f-3
Multiple Class Plan
AQUILA CASCADIA EQUITY FUND (the "Fund") has elected to
rely on Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act"), in offering multiple classes of shares
with differing distribution arrangements, voting rights and
expense allocations.
Pursuant to Rule 18f-3, the Board of Trustees of the
Fund has approved and adopted this written plan (the "Plan")
specifying all of the differences among the classes of shares to
be offered by the Fund. Prior to such offering, the Plan will be
filed as an exhibit to the Fund's registration statement. The
Plan sets forth the differences among the classes, including
shareholder services, distribution arrangements, expense
allocations, and conversion or exchange options.
I. Attributes of Share Classes
This section discusses the attributes of the various classes
of shares. Each share of the Fund represents an equal pro rata
interest in the Fund and has identical voting rights, powers,
qualifications, terms and conditions and, in proportion to each
share's net asset value, liquidation rights and preferences.
Each class differs in that: (a) each class has a different class
designation; (b) only the Front-Payment Shares are subject to a
front-end sales charge ("FESC"); (c) only the Level-Payment and
certain Front-Payment Shares are subject to a contingent deferred
sales charge ("CDSC"); (d) only the Front-Payment Shares, Level-
Payment Shares and Financial Intermediary Shares (as described
below) are subject to distribution fees under a plan adopted
pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1 Plan"),
the distribution fees for the Level-Payment Class and Financial
Intermediary Class being higher than that for the Front-Payment
Class; (e) only the Level-Payment Shares and Financial
Intermediary Shares are subject to a shareholder servicing fee
under a non-Rule 12b-1 shareholder services plan (a "Shareholder
Services Plan"); (f) to the extent that one class alone is
affected by a matter submitted to a vote of the shareholders,
then only that class has voting power on the matter, provided,
however, that any class whose shares convert automatically to
shares of another class also votes separately with respect to
class-specific Rule 12b-1 matters applying to the latter class;
(g) the expenses attributable to a specific class ("Class
Expenses")1/ are borne only by shares of that class on a pro-rata
basis; and (h) exchange privileges and conversion features may
vary among the classes.
A. Front-Payment Shares
Front-Payment Shares are sold to (1) retail customers
and (2) persons entitled to exchange into Front-Payment
Shares under the exchange privileges of the Fund. Shares of
the Fund outstanding on the date that different classes of
shares were first made available were redesignated Front-
Payment Shares. Front-Payment Shares are also issued upon
automatic conversion of Level-Payment Shares, as described
below.
1. Sales Loads. Front-Payment Shares are sold
subject to the current maximum FESC (with scheduled
variations or eliminations of the sales charge, as
permitted by the 1940 Act). Certain Front-Payment
Shares sold without a FESC are subject to a CDSC.
2. Distribution and Service Fees. Front-Payment
Shares are subject to a distribution fee pursuant to
Part I of the Fund's Rule 12b-1 Plan. They are not
subject to charges applicable to a Shareholder Services
Plan.
3. Class Expenses. Class Expenses that are
attributable to the Front-Payment Class are allocated
to that particular class.
4. Exchange Privileges and Conversion Features.
Front-Payment Shares are exchangeable for Front-Payment
Shares issued by other funds sponsored by Aquila
Management Corporation and as may additionally be set
forth in the then current prospectus of the Fund.
Front-Payment Shares have no conversion features.
B. Level-Payment Shares
Level-Payment Shares are sold to (1) retail customers
and (2) persons entitled to exchange into Level-Payment
Shares under the exchange privileges of the Fund.
1. Sales Loads. Level-Payment Shares are sold
without the imposition of any FESC, but are subject to
a CDSC (with scheduled variations or eliminations of
the sales charge, as permitted by the 1940 Act).
2. Distribution and Service Fees. Level-Payment
Shares are subject to a distribution fee pursuant to
Part II of the Fund's Rule 12b-1 Plan and to a
shareholder servicing fee under a Shareholder Services
Plan not to exceed .25% of the average daily net assets
of the Level-Payment Class.
3. Class Expenses. Class Expenses that are
attributable to the Level-Payment Class are allocated
to that particular class.
4. Exchange Privileges and Conversion Features.
Level-Payment Shares are exchangeable for Level-Payment
Shares issued by other funds sponsored by Aquila
Management Corporation and as may additionally be set
forth in the then current prospectus of the Fund. After
a period of no greater than six years, Level-Payment
Shares automatically convert to Front-Payment Shares on
the basis of the relative net asset values of the two
classes without the imposition of any sales charge,
fee, or other charge, provided, however, that the
expenses, including distribution fees, for Front-
Payment Shares are not higher than the expenses,
including distribution fees, for Level-Payment Shares.
If the amount of expenses, including distribution fees,
for the Front-Payment Class is increased materially
without approval of the shareholders of the Level-
Payment Class, a new class will be established -- on
the same terms as apply to the Front-Payment Class
prior to such increase -- as the class into which Level-
Payment Shares automatically convert.
C. Institutional Shares
Institutional Shares are not offered to retail
customers but are sold only to (1) institutional investors
investing funds held in a fiduciary, advisory, agency,
custodial or other similar capacity and (2) persons entitled
to exchange into Institutional Shares under the exchange
privileges of the Fund.
1. Sales Loads. Institutional Shares are sold
without the imposition of any FESC, CDSC or any other
sales charge.
2. Distribution and Service Fees. Institutional
Shares are not subject to any distribution fee or
shareholder servicing fee.
3. Class Expenses. Class Expenses that are
attributable to the Institutional Class are allocated
to that particular class.
4. Exchange Privileges and Conversion Features.
Institutional Shares are exchangeable for Institutional
Shares issued by other funds sponsored by Aquila
Management Corporation and as may additionally be set
forth in the then current prospectus of the Fund.
Institutional Shares have no conversion features.
D. Financial Intermediary Shares
Financial Intermediary Shares are sold (1) only through
financial intermediaries with which Aquila Distributors,
Inc. has entered into sales agreements, and are not offered
directly to retail customers and (2) persons entitled to
exchange into Financial Intermediary Shares under the
exchange privileges of the Fund.
1. Sales Loads. Financial Intermediary Shares
are sold without the imposition of any FESC, CDSC or
any other sales charge.
2. Distribution and Service Fees. Financial
Intermediary Shares are subject to a distribution fee
pursuant to Part III of the Fund's Rule 12b-1 Plan and
to a shareholder servicing fee under a Shareholder
Services Plan not to exceed 0.25% of the average daily
net assets of the Financial Intermediary Class.
3. Class Expenses. Class Expenses that are
attributable to the Financial Intermediary Class are
allocated to that particular class.
4. Exchange Privileges . Financial Intermediary
Shares are exchangeable for Financial Intermediary
Shares issued by other funds sponsored by Aquila
Management Corporation to the extent that shares of
such funds are sold by the respective financial
intermediaries, and as may additionally be set forth in
the then current prospectus of the Fund.
E. Additional Classes
In the future, the Fund may offer additional classes of
shares which differ from the classes discussed above.
However, any additional classes of shares must be approved
by the Board, and the Plan must be amended to describe those
classes.
II. Approval of Multiple Class Plan
The Board of the Fund, including a majority of the
independent Trustees, must approve the Plan initially. In
addition, the Board must approve any material changes to the
classes and the Plan prior to their implementation. The Board
must find that the Plan is in the best interests of each class
individually and the Fund as a whole. In making its findings,
the Board should focus on, among other things, the relationships
among the classes and examine potential conflicts of interest
among classes regarding the allocation of fees, services, waivers
and reimbursements of expenses, and voting rights. Most
significantly, the Board should evaluate the level of services
provided to each class and the cost of those services to ensure
that the services are appropriate and that the allocation of
expenses is reasonable. In accordance with the foregoing
provisions of this Section II, the Board of the Fund has approved
and adopted this Plan as of the date written above.
III. Dividends and Distributions
Because of the differences in fees paid under a Rule
12b-1 Plan and Shareholder Services Plan and the special
allocation of Class Expenses among the classes of shares of the
Fund, the dividends payable to shareholders of a class will
differ from the dividends payable to shareholders of one or more
of the other classes. Dividends paid to each class of shares in
the Fund will, however, be declared and paid at the same time
and, except for the differences in expenses listed above, will be
determined in the same manner and paid in the same amounts per
outstanding shares.
IV. Expense Allocations
The methodology and procedures for calculating the net
asset value and dividends and distributions of the various
classes of shares and the proper allocation of income and
expenses among the various classes of shares are set forth in the
Memorandum (together with exhibits) of Richard F. West,
Treasurer, dated November 24, 1995, revised August 28, 1997 and
entitled "Methodologies Used In Accounting For Multiple Class
Shares."
_______________________________
1/ Class Expenses are limited to (i) transfer agency fees; (ii)
preparation and mailing expenses for shareholder
communications required by law, sent to current shareholders
of a class; (iii) state Blue Sky registration fees; (iv)
Securities and Exchange Commission ("SEC") registration
fees; (v) trustees' fees; (vi) expenses incurred for
periodic meetings of trustees or shareholders; and (vii)
legal and accounting fees, other than fees for income tax
return preparation or income tax advice.
