IMPORTANT NOTICE
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 12, 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 12, 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 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>
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, 1996, 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.
