IMPORTANT NOTICE
PLEASE READ IMMEDIATELY PRELIMINARY PROXY MATERIAL
CHURCHILL CASH RESERVES TRUST
380 Madison Avenue, Suite 2300, New York, N.Y. 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
on September 25, 1997
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 September 25, 1997 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, 1997 (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.
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(iii) to act upon proposed modifications of the
Trust's investment restrictions regarding
investment of more than 5% of the Trust's assets in
the securities of a single Issuer (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 July 16, 1997 (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
August 31, 1997
(ii)
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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 August 31, 1997.
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 in March, 1996. 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 July 16, 1997 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: 68, Shares Owned: None
Founder, President and Chairman of the Board of Aquila Management
Corporation since 1984, the sponsoring organization and
Administrator and/or Adviser or Sub-Adviser to the following
open-end investment companies, and Founder, Chairman of the Board
of Trustees, and President of each: Pacific Capital Cash Assets
Trust since 1984; Pacific Capital U.S. Treasuries Cash Assets
Trust since 1988; Pacific Capital Tax-Free Cash Assets Trust
since 1988; each of which is a money market fund, and together
with Capital Cash Management Trust ("CCMT") and this Trust are
called the Aquila Money-Market Funds; and Hawaiian Tax-Free Trust
since 1984; Tax-Free Trust of Arizona since 1986; Tax-Free Trust
of Oregon since 1986; Tax-Free Fund of Colorado since 1987;
Churchill Tax-Free Fund of Kentucky since 1987; Tax-Free Fund For
Utah since 1992; and Narragansett Insured Tax-Free Income Fund
since 1992; each of which is a tax-free municipal bond fund, and
two equity funds, Aquila Rocky Mountain Equity Fund since 1993
and Aquila Cascadia Equity Fund, since 1996, which are called the
Aquila Bond and Equity Funds; Vice President, Director, Secretary
and formerly Treasurer of Aquila Distributors, Inc. since 1981,
distributor of the above funds; President and Chairman of the
Board of Trustees of CCMT, a money market fund since 1981, and an
Officer and Trustee/Director of its predecessors since 1974;
Chairman of the Board of Trustees and President of Prime Cash
Fund (which is inactive), since 1982 and of Short Term Asset
Reserves 1984-1996; President and a Director of STCM Management
Company, Inc., sponsor and sub-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, and Founder and Chairman of
several other money market funds; Director or Trustee of OCC Cash
Reserves, Inc., Oppenheimer Quest Global Value Fund, Inc.,
Oppenheimer Quest Value Fund, Inc., and Trustee of Quest For
Value Accumulation Trust, The Saratoga Advantage Trust, and of
the Rochester Group of Funds, each of which is an open-end
investment company; Trustee of Brown University, 1990-1996 and
currently Trustee Emeritus; actively involved for many years in
leadership roles with university, school and charitable
organizations.
Thomas A. Christopher, Trustee, Age: 49, 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 1991 to 1994; 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: 48, 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; and 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*, Trustee, Age: 39, Shares Owned: None
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, of Aquila Cascadia Equity Fund since 1996 and of Aquila
Rocky Mountain Equity Fund and Tax-Free Fund for Utah since 1997;
President and Chief Operating Officer of the Administrator since
1997; Senior Vice President and Secretary, formerly Vice
President of the Administrator since 1986 and Director since
1984; Senior Vice President or Vice President and formerly
Assistant Vice President of the Aquila Money-Market Funds since
1986; Vice President of the Aquila Bond and Equity Funds since
1997; Vice President of InCap Management Corporation since 1986
and Director since 1983; 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: 56, 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, of Cascades Cash Fund,
1989-1994, and of Aquila Cascadia Equity Fund since 1996; 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: 61 , Shares Owned: None
Managing Director of EastWind Power Partners, Ltd. since 1994;
Director of Alumni Association, SUNY Maritime College since 1997;
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
(which is inactive) since 1982; Trustee of Short Term Asset
Reserves, 1984-1986 and 1989-1996, 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: 58, 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 and Tax-Free Fund of Colorado
since 1987 and of Tax-Free Fund For Utah since 1994.
William J. Nightingale, Trustee, Age: 67, 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 Yale International, Inc. (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: 48, 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: 40
Vice President - Administration and formerly Assistant Vice
President and Associate of the Administrator since 1987; Senior
Vice President, Vice President or Assistant Vice President of the
Money-Market 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: 57
Assistant Secretary of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1995 and Vice President of the
Aquila Money-Market 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: 53
Senior Vice President of Aquila Rocky Mountain Equity Fund since
1997; 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: 73
Chief Financial Officer of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1991 and Treasurer, 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: 61
Treasurer of the Aquila Money-Market Funds and the Aquila 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: 57
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines &
Mone LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary
of the Aquila Money-Market Funds and the Aquila 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: 30
Assistant Secretary of the Aquila Money-Market Funds and the
Aquila 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, 1996, the Trust paid $55,724 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 two equity funds. 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 which
Compensation funds in the the Trustee
Name from the Trust Aquila Group now serves
<S> <C> <C> <C>
Thomas A. $5,451 $12,001 2
Christopher
Douglas Dean $4,800 $13,332 2
Ann R. $5,100 $19,000 4
Leven
Theodore T. $5,087 $48,182 8
Mason
Anne J. $5,508 $30,066 6
Mills
William J. $5,592 $12,203 3
Nightingale
James R. $5,331 $19,000 2
Ramsey
</TABLE>
For the fiscal year ended September 30, 1996, the fees
payable to the Adviser under the Advisory Agreement were $521,359
of which $77,712 was voluntarily waived. During the same period,
fees payable to the Administrator under the Administration
Agreement were $267,924 of which $39,771 was voluntarily 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, 1997; 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 INVESTMENT RESTRICTIONS
(Proposal No. 2)
Background and Reasons for the Proposal
The purpose of this proposal is to seek shareholder approval
of a change in the Trust's investment restrictions, which
currently have the effect of preventing the Trust from making
certain investments.
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
Prospectus, is the following:
The Trust cannot buy the securities (not including U.S.
Government Securities) of any issuer if more than 5% of its
total assets (valued at market value) would then be invested
in securities of that issuer.
It is proposed that this policy be changed for the following
reasons.
As a money market fund, the Trust operates under a rule of
the Securities and Exchange Commission, Rule 2a-7, (the ("Rule")
which allows the Trust to use the "amortized cost" method of
valuing its securities and which contains certain risk limiting
provisions, including requirements as to maturity, quality and
diversification of the Trust's portfolio. The Trust is a
diversified investment company.
Under the Rule, the Trust must limit its investments to
those instruments which are denominated in U.S. dollars, which
are determined by the Board of Trustees to present minimal credit
risks, and which, at the time of purchase, are Eligible
Securities. In accordance with the Rule, the Board of Trustees
has adopted investment procedures and has approved investment
policies pursuant to which all investment determinations have
been delegated to the Adviser, under the direction and control of
the Board of Trustees, except for those matters for which the
Rule requires Board determination.
With respect to diversification of the Trust's portfolio,
the Rule requires (with limited exceptions) that immediately
after purchase of any security, the Trust have invested not more
than 5% of its assets in the securities of any one issuer. The
Rule provides an exception as follows:
"[P]rovided, however that [the Trust] may invest more
than five percent of its Total Assets in the First Tier
Securities of a single issuer for a period of up to
three Business days after the purchase thereof (subject
to section 5(b)(1) of the Act [15 U.S.C. 80a-5(b)(1)]
..., provided, further that the [Trust] may not make
more than one investment in accordance with the
foregoing proviso at any time..."
The Trust's investment restriction, set forth above,
prevents the Trust from taking advantage of the exception allowed
by the Rule. The Board of Trustees considers that the Trust's
investment restriction is not necessary and prevents the Adviser
from temporary investments in positions greater than five per
cent of the Trust's total. This in turn interferes with the
flexibility to handle large purchases and redemptions of the
Trusts shares.
It is proposed to amend the Trust's investment restriction
to read as follows:
The Trust cannot buy the securities (not
including U.S. Government Securities) of any
issuer if more than 5% of its total assets
(valued at market value) would then be
invested in securities of that issuer,
provided, however that the Trust may invest
more than not more than 25% of its total
assets in the First Tier Securities (as
defined in the Rule) of a single issuer for a
period of up to three Business days after the
purchase thereof, and provided, further that
the Trust may not make more than one
investment in accordance with the foregoing
proviso at any time.
The Board of Trustees has determined that the foregoing
modifications of the Trust's investment restrictions are in the
best interest of the Trust and its shareholders because the Trust
will have increased flexibility in managing portfolio liquidity
and occasional large inflow and outflows. It is also believed
that the ability afforded by the proposed charge will provide an
efficient way to insure liquidity in the event of unexpected
redemptions and to temporarily invest unanticipated cash flows.
In order to comply with the Rule, the Trust cannot make such an
investment for more than three business days after purchase, nor
can it make more than one such investment at one time. In order
to comply with definitions of a diversified investment company in
the 1940 Act, such investments cannot exceed 25% of the Trust's
total assets.
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 SEPTEMBER 25, 1997
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, DIANA P.
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 September 25, 1997, 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 investment restrictions
__ __ __
(Proposal No. 2) FOR [__] AGAINST [__] ABSTAIN [__]
Dated: ____________ ______, 1997
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.
