IMPORTANT NOTICE Preliminary Copy
PLEASE READ IMMEDIATELY
CHURCHILL CASH RESERVES TRUST
380 Madison Avenue, Suite 2300, New York, N.Y. 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
on March 29, 1996
TO SHAREHOLDERS OF THE TRUST:
The purpose of this Notice is to advise you that an Annual
Meeting of the Shareholders of Churchill Cash Reserves Trust (the
"Trust") will be held
Place: (a) at the offices of the Trust,
380 Madison Avenue, Suite 2300,
New York, NY 10017
Time: (b) on March 29, 1996 at 10:00 a.m. local time
Purposes: (c) for the following purposes:
(i) to elect eight 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;
(ii) to ratify (that is, to approve) or reject
the selection of KPMG Peat Marwick LLP as the
Trust's independent auditors for the fiscal year
ending September 30, 1996 (Proposal No. 1);
Please Note:
If you do not expect to attend the Meeting, you are requested to
indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying stamped envelope. To avoid
unnecessary expense to the Trust, your cooperation is requested
in mailing in your proxy no matter how large or small your
holding may be.
<PAGE>
(iii) to act upon proposed modifications of
the trust's policies regarding
investment in restricted securities
(Proposal No. 2);
(iv) 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 January 26, 1996 (the "record date").
Also, the number of shares held by you according
to such records at the close of business on the
record date determines the number of shares you
may vote at the Meeting (or any adjourned meeting
or meetings).
By Order of the Board of Trustees
EDWARD M. W. HINES
Secretary
March ***, 1996
(ii)
<PAGE>
CHURCHILL CASH RESERVES TRUST
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 Churchill Cash Reserves
Trust (the "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 on
the enclosed proxy card.
This Notice and Proxy Statement are first being mailed on or
about March ***, 1996.
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 800-228-7496 toll-free or 212-697-6666.
The Trust's investment adviser is Banc One Investment
Advisors Corporation, 416 West Jefferson Street, Louisville, KY
40202. The Trust's administrator (the "Administrator") is Aquila
Management Corporation, 380 Madison Avenue, Suite 2300, New York,
NY 10017 .
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 striking a line through the nominee's name
on the proxy card.
As to the other matters listed on the proxy card, you may
direct the proxy holders to vote your shares on that proposal by
checking the appropriate box "For" or "Against" or instruct them
not to vote your shares on that proposal by checking the
"Abstain" box. If you return your signed proxy card and do not
check any box on any proposal, the proxy holders will vote your
shares for the proposal.
You may end the power of the proxy holders to vote your
shares after you have signed and returned your proxy card and
before the power is used by (i) so notifying the Trust in
writing; (ii) signing a new and different proxy card (if the
Trust receives it before the old one is used); or (iii) voting
your shares in person or by your duly appointed agent at the
meeting. Shares held by brokers in "street name" and not voted or
marked as abstentions will not be counted for purposes of
determining a quorum.
The Trust is sending you this Notice and Proxy Statement in
connection with the solicitation by its Trustees of proxy cards
("proxies") to be used at the Annual Meeting to be held at the
time and place and for the purposes indicated in the Notice or
any adjourned meeting or meetings. The 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 these shares. The Trust will pay these
firms for their out-of-pocket expenses for doing so.
All shareholders of record on the record date are entitled
to vote at the meeting. Each shareholder of the Trust is entitled
to one vote for each share outstanding on the record date.
On the record date, the total number of shares outstanding
for the Trust was 204,791,630. Of the shares of the Trust
outstanding on the record date a nominee of Bank One Trust Co.
held of record 186,350,367 shares (91.0%). The Trust's management
is not aware of any other person who beneficially owned 5% or
more of its outstanding shares on such date. On the basis of
information received from the record owner listed above, the
Trust's management believes (i) that all of the shares indicated
are held for the benefit of custodial or trust clients; and (ii)
that all of such shares could be considered as "beneficially"
owned by the named shareholders in that they possessed shared
voting and/or investment powers as to such shares.
ELECTION OF TRUSTEES
At the Meeting, eight Trustees are to be elected. Whenever
it is stated in this Proxy Statement that a matter is to be acted
on at the Meeting, this means the Meeting held at the scheduled
time or any adjourned meeting or meetings.
Each Trustee elected will serve until the next annual
meeting or until his or her successor is duly elected. The
nominees selected by the Trustees are named in the table below.
See "Introduction" above for information as to how you can
instruct the proxy holders as to the voting of your shares as to
the election of Trustees.
Each of the nominees is presently a Trustee, and was
previously elected by the shareholders, except that Ms. Herrmann
was elected by the Trustees in 1995 to fill a vacancy. Each of
the nominees has been a Trustee since the beginning of the
Trust's operations in July, 1985, except that Mr. Nightingale has
been a Trustee since 1993 and Mr. Dean, Ms. Herrmann, Ms. Leven
and Mr. Ramsey have been Trustees since 1995. All of the Trustees
are also Trustees of Churchill Tax-Free Trust, the only operating
portfolio of which is Churchill Tax-Free Fund of Kentucky, a tax-
free municipal bond fund. In the table below and elsewhere in
this Proxy Statement, the Trust's Administrator, Aquila
Management Corporation, is referred to as the "Administrator" and
the Trust's Distributor, Aquila Distributors, Inc., is referred
to as the "Distributor." On the record date, the Trustees and
officers as a group owned less than 1% of the outstanding shares.
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 as a Director, officer and
shareholder of the Distributor. Ms. Herrmann is an interested
person of the Trust as a member of his immediate family. Ms.
Leven is an interested person as a beneficiary of a trust that
owns shares of the parent company of the Adviser. They are so
designated by an asterisk.
Described in the following material are the name, positions
with the Trust, age as of January 26, 1996 and business
experience during at least the past five years (other than with
the Trust) of each nominee and all officers of the Trust.
Lacy B. Herrmann*, President and Chairman of the Board of
Trustees, Age: 66, Shares owned: None
Founder of the Trust and President and a Director of the
Administrator since 1984; Chairman and President, Chief Executive
Officer (Chairman of the Board of Trustees and/or President) and
Trustee of Capital Cash Management Trust ("CCMT"), since 1981 and
Founder and executive officer (since 1974) of CCMT and its
predecessor; Founder, President and Chairman of the Board of
Trustees of Prime Cash Fund since 1982, of Short Term Asset
Reserves and Pacific Capital Cash Assets Trust since 1984, of
Pacific Capital Tax-Free Cash Assets Trust and of Pacific Capital
U.S. Treasuries Cash Assets Trust since 1988 and of Cascades Cash
Fund, 1989-1994, all of which are money market funds to which the
Administrator is administrator and which are referred to as the
"Money Funds"; Founder, President and Chairman of the Board of
Trustees of Hawaiian Tax-Free Trust since 1984, of Tax-Free Trust
of Arizona and Tax-Free Trust of Oregon since 1986, of Churchill
Tax-Free Fund of Kentucky and Tax-Free Fund of Colorado since
1987 and of Tax-Free Fund For Utah and Narragansett Insured Tax-
Free Income Fund since 1992, all of which are tax-free municipal
bond funds, and an equity fund, Aquila Rocky Mountain Equity Fund
since 1993, to all of which the Administrator is administrator
and which are referred to as the "Bond and Equity Funds"; Vice
President, a Director and Secretary since 1981 (formerly
Treasurer) of the Distributor, which is distributor (i.e.,
principal underwriter) for the Money Funds and the Bond and
Equity Funds; President and a Director of STCM Management
Company, Inc., Adviser to CCMT; Chairman, President and a
Director since 1984 of InCap Management Corporation, formerly
sub-adviser and administrator of Prime Cash Fund and Short Term
Asset Reserves; Director or Trustee of the various Quest for
Value Funds, a group of stock, bond and money market mutual
funds, since 1983; Director of Saratoga Advantage Trust, a group
of mutual funds, since 1994; Trustee of Brown University since
1990; actively involved for many years in leadership roles with
university, school and charitable organizations.
Thomas A. Christopher, Trustee, Age: 48, Shares owned: None
Shareholder of Robinson, Hughes & Christopher, C.P.A.s, P.S.C.,
since 1977; President of A Good Place for Fun, Inc., a sports
facility, since 1987; active member of the American Institute of
Certified Public Accountants; Board of Directors of the Kentucky
Society of CPAs; Trustee of Churchill Tax-Free Fund of Kentucky
since 1992; presently active in leadership roles with various
civic, community and church organizations.
Douglas Dean, Trustee, Age: 46, Shares owned: None
Founder and President of Dean, Dorton & Ford P.S.C., a public
accounting firm, since 1979; previously Staff Accountant, Tax
Supervisor and Tax Manager with Coopers & Lybrand, a public
accounting firm; Trustee of Trent Equity Fund, an equity mutual
fund, 1992-1994; Trustee of Churchill Tax-Free Fund of Kentucky
since 1987; Active as an officer and board member of various
charitable and community organizations.
Diana P. Herrmann*, Vice President and Trustee, Age: 37, Shares
owned: None
Senior Vice President and Secretary and formerly Vice President
of the Administrator since 1986 and Director since 1984; Trustee
of Tax-Free Trust of Arizona and Tax-Free Trust of Oregon since
1994 and of Churchill Tax-Free Fund of Kentucky since 1995; Vice
President of InCap Management Corporation since 1986 and Director
since 1983; Vice President and formerly Assistant Vice President
of the Money Funds since 1986; Assistant Vice President of Oxford
Cash Management Fund, 1986-1988; Assistant Vice President and
formerly Loan Officer of European American Bank, 1981-1986;
daughter of the Trust's President; 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.
Ann R. Leven*, Trustee, Age: 55, Shares owned: None
Treasurer of the National Gallery of Art, Washington, D.C., since
1994, Deputy Treasurer, 1990-1994; Treasurer of the Smithsonian
Institution, Washington, D.C., 1984-1990; President of ARL
Associates, strategic consultants, since 1983; Vice
President/Senior Corporate Planning Officer of The Chase
Manhattan Bank, N.A., 1979-1983; Treasurer of The Metropolitan
Museum of Art, 1972-1979; Trustee of Short Term Asset Reserves,
1984-1993, of Tax-Free Trust of Oregon since 1986, of Churchill
Tax-Free Fund of Kentucky since 1987 and of Cascades Cash Fund,
1989-1994; Trustee of Oxford Cash Management Fund, 1987-1988;
Director of the Delaware Group of mutual funds since 1989;
Adjunct Professor at Columbia University Graduate School of
Business Administration since 1975; Trustee of the American Red
Cross Endowment Fund, 1985-1990; Member of the Visiting Committee
of Harvard Business School, 1979-1985; Member of the Board of
Overseers of The Amos Tuck School, Dartmouth College, 1978-1984;
Staff Director of the Presidential Task Force on the Arts and
Humanities, 1981; Director of Alliance Capital Reserves Fund, a
money market fund, 1978-1979.
Theodore T. Mason, Trustee, Age: 60, Shares owned: None
Managing Director of EastWind Power Partners, Ltd. since 1994;
Director of Cogeneration Development of Willamette Industries,
Inc., a forest products company, 1991-1993; Vice President of
Corporate Development of Penntech Papers, Inc., 1978-1991; Vice
President of Capital Projects for the same company, 1977-1978;
Vice Chairman of the Board of Trustees of CCMT since 1981;
Trustee and Vice President, 1976-1981, and formerly Director of
its predecessor; Director of STCM Management Company, Inc.; Vice
Chairman of the Board of Trustees and Trustee of Prime Cash Fund
since 1982; Trustee of Short Term Asset Reserves, 1984-1986 and
since 1989, of Hawaiian Tax-Free Trust and Pacific Capital Cash
Assets Trust since 1984, of Pacific Capital Tax-Free Cash Assets
Trust and Pacific Capital U.S. Treasuries Cash Assets Trust since
1988 and of Churchill Tax-Free Fund of Kentucky since 1992; Vice
President and Trustee of Oxford Cash Management Fund, 1983-1989;
Vice President of Trinity Liquid Assets Trust, 1983-1985;
President and Director of Ted Mason Venture Associates, Inc., a
venture capital consulting firm, 1972-1980; Advisor to the
Commander, U.S. Maritime Defense Zone Atlantic, 1984-1988;
National Vice President, Surface/Subsurface, Naval Reserve
Association, 1985-1987; National Vice President, Budget and
Finance, for the same Association, 1983-1985; Commanding Officer
of four Naval Reserve Units, 1974-1985; Captain, USNR, 1978-1988.
Anne J. Mills, Trustee, Age: 57, Shares owned: None
Vice President for Business Affairs of Ottawa University since
1992; Director of Customer Fulfillment, U.S. Marketing and
Services Group, IBM Corporation, 1990-1991; Director of Business
Requirements of that Group, 1988-1990; Director of Phase
Management of that Group, 1985-1988; Budget Review Officer of the
American Baptist Churches/USA since 1994; Director of the
American Baptist Foundation since 1985; Trustee of Brown
University; Trustee of Tax-Free Trust of Arizona since 1986, of
Churchill Tax-Free Fund of Kentucky, Tax-Free Fund of Colorado
and Capital Cash Management Trust since 1987 and of Tax-Free Fund
For Utah since 1994.
William J. Nightingale, Trustee, Age: 66, Shares owned: None
Chairman and founder (1975) and Senior Advisor since 1995 of
Nightingale & Associates, Inc., a general management consulting
firm focusing on interim management, divestitures, turnaround of
troubled companies, corporate restructuring and financial
advisory services; President, Chief Executive Officer and
Director of Bali Company, Inc., a manufacturer of women's
apparel, which became a subsidiary of Hanes Corporation, 1970-
1975; prior to that, Vice President and Chief Financial Officer
of Hanes Corporation after being Vice President-Corporate
Development and Planning of that company, 1968-1970; formerly
Senior Associate of Booz, Allen & Hamilton, management
consultants, after having been Marketing Manager with General
Mills, Inc.; Trustee of Narragansett Insured Tax-Free Income Fund
since 1992 and of Churchill Tax-Free Fund of Kentucky since 1993;
Director of Spreckels Industries, Inc. (beet sugar processing and
various industrial manufacturing companies); Glasstech Inc.
(glass bending equipment and engineering) and Ring's End, Inc.
(retail lumber and building supply chain).
James R. Ramsey, Trustee, Age: 47, Shares owned: None
Vice President for Finance and Administration, and Professor of
Economics, Western Kentucky University; Trustee of Churchill Tax-
Free Fund of Kentucky since 1987; Chief State Economist and
Executive Director of the Office for Financial Management and
Economic Analysis of the Commonwealth of Kentucky, 1981-1992;
Adjunct Professor of the University of Kentucky; Assistant Dean
and Director of Public Administration of Loyola University in New
Orleans, Louisiana, 1978-1981; Assistant Professor of Public
Finance and Administration of Loyola University, 1977-1981;
Assistant Professor of Economics, Middle Tennessee State
University, 1975-1977; published numerous articles, monographs
and working papers on economics and fiscal management.
Charles E. Childs, III, Vice President, Age: 38
Vice President - Administration and formerly Assistant Vice
President and Associate of the Administrator since 1987; Vice
President or Assistant Vice President of the Money Funds since
1988; Northeastern University, 1986-1987 (M.B.A., 1987);
Financial Analyst, Unisys Corporation, 1986; Associate Analyst at
National Economic Research Associates, Inc. (NERA), a micro-
economic consulting firm, 1979-1985.
John M. Herndon, Vice President and Assistant Secretary, Age: 56
Assistant Secretary of the Money Funds and the Bond and Equity
Funds since 1995; Vice President of the Money Funds since 1990;
Vice President of the Administrator since 1990; Investment
Services Consultant and Bank Services Executive of Wright
Investors' Service, a registered investment adviser, 1983-1989;
Member of the American Finance Association, the Western Finance
Association and the Society of Quantitative Analysts.
Jerry G. McGrew, Vice President, Age: 51
Senior Vice President of Churchill Tax-Free Fund of Kentucky
since 1994, Vice President since 1987; Vice President of Tax-Free
Fund For Utah since 1992; Registered Principal since 1993; Vice
President of Aquila Distributors, Inc. since 1993; Registered
Representative of J.J.B. Hilliard, W.L. Lyons Inc., 1983-1987;
Account Manager with IBM Corporation, 1967-1981; Gubernatorial
appointee, Kentucky Financial Institutions Board, since 1993;
Chairman, Total Quality Management for Small Business, 1990-1994;
President of Elizabethtown/Hardin County, Kentucky, Chamber of
Commerce, 1989-1991; President of Elizabethtown Country Club,
1983-1985.
Rose F. Marotta, Chief Financial Officer, Age: 71
Chief Financial Officer of the Money Funds and the Bond and
Equity Funds since 1991; Treasurer of the Money Funds and the
Bond and Equity Funds, 1981-1991; formerly Treasurer of the
predecessor of CCMT; Treasurer and Director of STCM Management
Company, Inc., since 1974; Treasurer of Trinity Liquid Assets
Trust, 1982-1986 and of Oxford Cash Management Fund, 1982-1988;
Treasurer of InCap Management Corporation since 1982, of the
Administrator since 1984 and of the Distributor since 1985.
Richard F. West, Treasurer, Age: 60
Treasurer of the Money Funds and the Bond and Equity Funds and of
Aquila Distributors, Inc. since 1992; Associate Director of
Furman Selz Incorporated, 1991-1992; Vice President of Scudder,
Stevens & Clark, Inc. and Treasurer of Scudder Institutional
Funds, 1989-1991; Vice President of Lazard Freres Institutional
Funds Group, Treasurer of Lazard Freres Group of Investment
Companies and HT Insight Funds, Inc., 1986-1988; Vice President
of Lehman Management Co., Inc. and Assistant Treasurer of Lehman
Money Market Funds, 1981-1985; Controller of Seligman Group of
Investment Companies, 1960-1980.
Edward M. W. Hines, Secretary, Age: 56
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines &
Mone LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary
of the Money Funds and the Bond and Equity Funds since 1982;
Secretary of Trinity Liquid Assets Trust, 1982-1985 and Trustee
of that Trust, 1985-1986; Secretary of Oxford Cash Management
Fund, 1982-1988.
Patricia A. Craven, Assistant Secretary & Compliance Officer,
Age: 29
Assistant Secretary of the Money Funds and the Bond and Equity
Funds since 1995; Counsel to the Administrator and the
Distributor since 1995; formerly a Legal Associate for
Oppenheimer Management Corporation, 1993-1995.
The Trust does not pay fees to Trustees affiliated with the
Administrator or to any of the Trust's officers. During the
fiscal year ended September 30, 1995, the Trust paid $43,749 in
fees and reimbursement of expenses to its other 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 an equity fund. The following table lists the
compensation of all Trustees who received compensation from the
Trust and the compensation they received during the Trust's
fiscal year from other funds in the Aquilasm Group of Funds. None
of such Trustees has any pension or retirement benefits from the
Trust or any of the other funds in the Aquila group.
<TABLE>
<CAPTION>
Compensation Number of
from all boards
Compensation funds in the which the
Name from the Trust Aquila Group Trustee now
serves
<S> <C> <C> <C>
Thomas A. $,5022 $10,776 2
Christopher
Douglas Dean $350 $7,054 1
Ann R. Leven $400 $19,100 3
Theodore T. $4,718 $30,690 8
Mason
Anne J.
Mills $4,587 $19,818 6
William J. $4,250 $9,750 3
Nightingale
James R. $250 $6,624 1
Ramsey
</TABLE>
For the fiscal year ended September 30, 1995, the fees
payable to the Trust's former adviser under an advisory agreement
in effect until July 19, 1995 were $366,654 and fees payable to
the Adviser under the Advisory Agreement thereafter were $99,642
of which $49,089 was voluntarily waived. During the same period,
fees payable to the Administrator under a former administration
agreement in effect until July 19, 1995 were $366,654 and under
the Administration Agreement in effect thereafter were $58,931 of
which $21,561 was waived.
Other Information on Trustees
The Trustees have appointed an Audit Committee consisting of
all of the Trustees (the "Independent Trustees") who are not
"interested persons," as that term is defined in the 1940 Act, 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. The Board of Trustees does not have
a nominating committee. During the Trust's last fiscal year, the
Board of Trustees held six meetings. All Trustees were present at
at least 75% of the total number of Board and (if such Trustee
was a member of that Committee) Audit Committee meetings.
RATIFICATION OR REJECTION OF
SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 1)
KPMG Peat Marwick LLP 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, 1996; 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 Adviser or the Trust's Administrator. It is
expected that representatives of the firm will not be present at
the meeting but will be available should any matter arise
requiring their presence.
PROPOSED MODIFICATIONS OF
THE TRUST'S POLICIES REGARDING
INVESTMENT IN RESTRICTED SECURITIES
(Proposal No. 2)
Background and Reasons for the Proposal
The purpose of this proposal is to seek shareholder approval
of two changes in the Trust's policies, which currently have the
effect of preventing the Trust from investing in certain kinds of
securities.
1. The first proposed change is as follows: The Trust has
a number of policies concerning what it can and cannot do. Those
policies, which are called "fundamental policies," may not be
changed unless the change is approved by the holders of a
majority, as defined in the Investment Company Act of 1940 (the
"1940 Act"), of the Trust's outstanding shares. (See "Vote
Required" below for the definition of such a majority.) One such
policy, as set forth in the Trust's Statement of Additional
Information, is the following:
[the Trust] cannot invest in restricted securities.
Restricted securities are securities which cannot freely be
sold for legal reasons.
It is proposed that this policy be eliminated for the
following reasons.
Historically, securities subject to contractual or legal
restrictions on resale because they have not been registered
under the Securities Act of 1933 (the "Securities Act") -- so-
called "restricted securities" -- were considered illiquid and as
such not suitable as investments for a money market fund such as
the Trust. Limitations on resale were assumed to have an adverse
effect on the marketability of portfolio securities, so that an
investment company might be unable to dispose of such securities
promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. In
addition, an illiquid security's lack of a ready market may
present difficulties in valuing the security for purposes of
determining the value of the fund's assets.
However, in recent years a large market has developed among
institutional investors for certain securities that are not
registered under the Securities Act, including commercial paper
and corporate bonds and notes, permitting their ready
marketability among institutions participating in the market;
thus, the fact that there are contractual or legal restrictions
on resale to the general public may not be indicative of the
liquidity of such investments. Such securities include
securities whose trading is regulated by Rule 144A under the
Securities Act -- a rule that establishes a "safe harbor" from
the registration requirements of the Securities Act for resales
of certain securities to qualified institutional buyers -- as
well as certain commercial paper issued in reliance on an
exemption from registration in Section 4(2) of the Securities
Act, but for which the Rule 144A safe harbor for resales may not
be available.
If this Proposal is adopted, the Trust will no longer be
flatly prohibited by policy from investing in restricted
securities.
2. In addition to the foregoing policy, the Trust also has
a policy restricting its investments in various illiquid
securities to 10% of its net assets. Restricted securities are
included in the list of kinds of securities subject to this
limitation. It is proposed that the reference in that investment
restriction to restricted securities be modified to refer only to
restricted securities that have not been determined by the Trust
to be liquid. The Board of Trustees will delegate to the Trust's
investment adviser the responsibility for determining and
monitoring the liquidity of the Trust's investments in restricted
securities, subject to supervision, including periodic review, by
the Board.
The effect of the foregoing changes in the Trust's policies
will be twofold: To the extent consistent with its investment
objective, its other policies and applicable regulatory
requirements, including Rule 2a-7 under the 1940 Act, the Trust
will be free (i) to invest without limit in restricted securities
that are determined to be liquid and (ii) to invest up to 10% of
its net assets in illiquid securities generally, including
illiquid restricted securities. The Trust has no present
intention of investing in illiquid securities.
The Board of Trustees has determined that the foregoing
modifications of the Trust's policies regarding restricted
securities are in the best interest of the Trust and its
shareholders because the Trust will then have access to a large
number of securities that it cannot presently acquire. Access to
these securities will allow the Trust to improve the diversity of
its portfolio.
Action Requested
THE BOARD OF TRUSTEES RECOMMENDS
THAT PROPOSAL NO. 2 BE APPROVED.
Vote Required
The favorable vote of the holders of a majority (as defined
in the 1940 Act) of the outstanding shares of the Trust, is
required for the approval of this Proposal No. 2. Under the 1940
Act, the vote of the holders of a majority of the outstanding
shares of the Trust means the vote of the holders of the lesser
of (a) 67% or more of the shares of the Trust present at the
Meeting or represented by proxy if the holders of more than 50%
of such shares are so present or represented, or (b) more than
50% of the outstanding shares of the Trust.
If the required votes are not obtained at the Meeting or any
adjourned meeting or meetings, the Board of Trustees will
consider appropriate action, which could include calling another
special meeting of shareholders.
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 on the first page
of this Proxy Statement relating to 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 the proxy cards entitle them to vote in accordance
with their judgment on such matter or matters. That is, by
signing and returning your proxy card, you give the proxy holders
discretionary authority as to any such matter or matters.
<PAGE>
Preliminary Copy
CHURCHILL CASH RESERVES TRUST
PROXY FOR SHAREHOLDERS MEETING MARCH 29, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of CHURCHILL CASH RESERVES TRUST (the
"Trust") does hereby appoint LACY B. HERRMANN and EDWARD M. W. HINES, or
either 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 March 29, 196, at the offices of the Trust, 380 Madison
Avenue, New York, NY 10017 at 10:00 a.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.
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.
MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW AND FOR THE
PROPOSALS LISTED BELOW. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS
INDICATED BELOW OR FOR IF NO CHOICE IS INDICATED.
As to any other matter said attorneys shall vote in accordance with
their best judgment.
Election of Trustees---.
__
[__] FOR all nominees listed below
__
[__] VOTE WITHHELD for all nominees listed
below
(Instructions: To withhold authority to vote for any one or more of the
nominees, strike a line through the name of that nominee
or the names of such nominees in the list below.)
LACY B. HERRMANN, THOMAS A. CHRISTOPHER, DOUGLAS DEAN,
DIANA P. HERRMANN, ANN R. LEVEN, THEODORE T. MASON, ANNE J. MILLS,
WILLIAM J. NIGHTINGALE, JAMES R. RAMSEY
Ratification of selection of KPMG Peat
Marwick LLP as independent auditors
(Proposal No. 1)
__ __ __
FOR [__] AGAINST [__] ABSTAIN [__]
Action on Proposed modifications of
the trust's policies regarding
investment in restricted securities
(Proposal No. 2)
__ __ __
FOR [__] AGAINST [__] ABSTAIN [__]
Dated: ____________ ______, 1996
Month Day
_____________________________________________
SIGNATURE(S)
______________________________________________
SIGNATURE(S)
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.
