IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
AQUILA TAX-FREE TRUST OF OREGON
380 Madison Avenue, Suite 2300, New York, N.Y. 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
on April 20, 1998
TO SHAREHOLDERS OF THE TRUST:
The purpose of this Notice is to advise you that an Annual
Meeting of the Shareholders of Aquila Tax-Free Trust of Oregon
(the "Trust"), the only series of The Cascades Trust, will be
held
Place: (a) at the Oregon Convention Center
777 N.E. Martin Luther King Jr. Boulevard
Portland, Oregon 97212
Time: (b) on April 20, 1998, at 2:00 p.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, 1998
(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 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 30, 1998 (the "record date").
Also, the number of shares of each of the Trust's
three classes of shares that you held at that time
and the respective net asset values of each class
of shares at that time determines the number of
votes you may cast at the Meeting (or any
adjourned meeting or meetings).
By Order of the Board of Trustees
EDWARD M. W. HINES
Secretary
March 10, 1998
(ii)
AQUILA
TAX-FREE TRUST OF OREGON
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 Aquila Tax-Free Trust of
Oregon (the "Trust"), which is the only series of the Cascades
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 10, 1998.
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 800-872-6734 toll-free or 212-697-6666.
The Trust's organizer, investment adviser and administrator
(the "Manager") is Aquila Management Corporation, 380 Madison
Avenue, Suite 2300, New York, NY 10017. The Trust's investment
sub-adviser is U.S. Bank National Association, 601 Second Avenue,
Minneapolis, MN 55402.
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 a proposal, the proxy holders will vote your
shares for that 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 or voted on any matter.
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.
The Trust has three classes of shares outstanding. All
shareholders of the Trust are entitled to vote at the meeting.
Each shareholder on the record date is entitled to one (1) vote
for each dollar (and a proportionate fractional vote for each
fraction of a dollar) of net asset value (determined as of the
record date) represented by full and fractional shares of any
class held on the record date. On the record date the net asset
value per share of each of the three classes of the Trust's
shares was $10.81.
On the record date, the total number of shares of the Trust
of all classes outstanding and entitled to vote was 30,400,200.
of which 95,449 were Class C Shares, 758,177 were Class Y Shares
and the balance were Class A Shares. The Trust's management is
not aware of any other person beneficially owning more than 5% of
any class of its outstanding shares as of such date.
Of the shares of the Trust outstanding on the record date,
BHC Securities, Inc, 2005 Market Street, Philadelphia, PA held of
record 2,679,762 Class A Shares (9.1% of the class), Merrill
Lynch Pierce Fenner & Smith P.O. Box 30561, New Brunswick, NJ
held of record 2,152,321 Class A Shares (7.3% of the class) and
50,221 Class C Shares (52.6% of the class); PaineWebber P.O. Box
4493, Salem, OR held of record 4,841 Class C Shares (5.1% of the
class); PaineWebber 2105 NW 133rd Place Portland OR held of
record 18,544 Class C Shares (19.4% of the class; and U.S.
National Bank of Oregon directly and through a nominee held of
record 720,069 Class Y Shares (95% of the class). On the basis of
information received from the holders the Trust's management
believes that all of the shares indicated are held for the
benefit of clients. The Trust's management is not aware of any
other person beneficially owning more than 5% of its outstanding
shares as of such date.
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
reelected by the shareholders at the last annual meeting on April
21, 1997, except that Mr. Frohnmayer was elected by the Trustees
in December, 1997 to fill a vacancy. Mr. Herrmann and Mr. Coloney
have been Trustees since the beginning of the Trust's operations
in June 1986. Mr. Gardner has been a Trustee since 1986, Mr.
Alden and Mr. Ross have been Trustees since 1988. Mr. Lung has
been a Trustee since 1992 and Ms. Herrmann has been a Trustee
since 1994.
On January 30, 1998, as a group, the Trustees and officers
owned less than 1% of the outstanding shares of the Trust. In the
information below, the Trust's Manager, Aquila Management
Corporation, is referred to as the "Manager" and the Trust's
Distributor, Aquila Distributors, Inc., is referred to as the
"Distributor." The beneficial ownership of shares indicated
below, all of which are Class A Shares, includes voting and
investment control unless otherwise indicated. 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 a Director, officer and shareholder of the Manager
and Distributor. Ms. Herrmann is an interested person as a member
of his immediate family. Mr. Lung is an interested person as a
security holder of the Sub-Adviser's parent. Interested persons
are so designated by an asterisk.
Described in the following material are the name, positions
with the Trust, age as of January 30, 1998 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: 187 (1)
Founder, President and Chairman of the Board of Aquila Management
Corporation since 1984, the sponsoring organization and
Administrator and/or Manager or Sub-Adviser to the following
open-end investment companies, and Founder, Chairman of the Board
of Trustees, and President of each: Hawaiian Tax-Free Trust since
1984; Tax-Free Trust of Arizona since 1986; Churchill Tax-Free
Fund of Kentucky since 1987; Tax-Free Fund of Colorado 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, together with this Trust are called the Aquila Bond
and Equity Funds; and Pacific Capital Cash Assets Trust since
1984; Churchill Cash Reserves Trust since 1985; 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") are called the Aquila Money-Market 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.
(1) In addition the Manager owns of record 12 Class Y Shares
Vernon R. Alden, Trustee, age: 74, Shares owned: 1057
Director of Digital Equipment Corporation, a computer
manufacturing corporation, since 1959, Intermet Corporation, an
independent foundry, since 1986, and Sonesta International Hotels
Corporation since 1978; Former Director of Colgate Palmolive,
McGraw Hill and the Mead Corporation; Chairman of the Board and
Executive Committee of The Boston Company, Inc., a financial
services company, 1969-1978; Trustee of Hawaiian Tax-Free Trust,
Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash
Assets Trust and Pacific Capital U.S. Treasuries Cash Assets
Trust since 1989, of Cascades Cash Fund, 1989-1994, of
Narragansett Insured Tax-Free Income Fund since 1992, and of
Aquila Cascadia Equity Fund since 1996; Associate Dean and member
of the faculty of Harvard University Graduate School of Business
Administration, 1951-1962; member of the faculty and Program
Director of Harvard Business School - University of Hawaii
Advanced Management Program, summer of 1959 and 1960; President
of Ohio University, 1962-1969; Chairman of The Japan Society of
Boston, Inc., and member of several Japan-related advisory
councils; Chairman of the Massachusetts Business Development
Council and the Massachusetts Foreign Business Council, 1978-
1983; Trustee of the Boston Symphony Orchestra since 1975;
Chairman of the Massachusetts Council on the Arts and Humanities,
1972-1984; Member of the Board of Fellows of Brown University,
1969-1986; Trustee of various other cultural and educational
organizations; Honorary Consul General of the Royal Kingdom of
Thailand; Received Decorations from the Emperor of Japan (1986)
and the King of Thailand (1996 and 1997).
Warren C. Coloney, Trustee, Age: 68, Shares owned: 1005 (2)
Consultant to management and governing boards on issues of
corporate governance, strategy, organization, marketing and human
resource management; Advisory Director of the Washington, D.C.
office of Management Practice, Inc. since 1992; Chairman of The
Global Business Association, Bethesda, MD since 1996; Director of
Bradley Energy International, Inc., Alexandria, VA since 1997;
Trustee of Cascades Cash Fund, 1989-1994 and of Aquila Cascadia
Equity Fund since 1996; Managing Director-Europe of Towers,
Perrin, Forster & Crosby, Inc., London, England, 1974-1984;
President of Coloney, Cannon, Main & Pursell, Inc., New York, NY
and London, England, 1968-1974; Senior Engagement Manager,
McKinsey & Company, Inc., New York, NY and London, England, 1959-
1967; Sales Engineer, American Oil Company, Tampa, FL, 1955-1956;
Managing Engineer, J.E. Greiner, Co., Tampa, FL 1956-1957; Lt(jg)
Civil Engineer Corps, U.S.N.R., 1952-1955; MBA, The Darden
School, University of Virginia, 1959; Bachelor of Civil
Engineering, University of Florida, 1951; Life Member of the
American Society of Civil Engineers; Founding Member of the
Institute of Management Consultants.
(2) Held in a revocable trust with his wife
Dave Frohnmayer, Trustee, Age: 57, Shares owned:
President, University of Oregon since 1994; Dean of the
University of Oregon Law School, 1992-1994; Attorney General of
the State of Oregon, 1981-1991; Trustee of Aquila Cascadia Equity
Fund since 1997. Director of the Qualivest Funds until 1997;
Director, South Umpqua Bank, Roseburg, OR since 1996; Director of
charitable organizations in the field of health care.
James A. Gardner, Trustee, Age: 54, Shares owned: 375
President of Gardner Associates, an investment and real estate
firm, since 1970; President Emeritus of Lewis and Clark College
and Law School since 1989 and President, 1981-1989; Program
Officer and County Representative of the Ford Foundation, 1969-
1981; Lecturer and Assistant Director of Admissions of Harvard
College, 1968-1969; Member of the Oregon Young Presidents
Organization since 1983; Member of the Council on Foreign
Relations since 1988; Founding Member of the Pacific Council
since 1995; Trustee of Cascades Cash Fund, 1989-1994; Trustee of
Aquila Cascadia Equity Fund, since 1996; Director of the Oregon
High Desert Museum since 1989; active in civic, business,
educational and church organizations in Oregon.
Diana P. Herrmann*, Trustee, Age: 39, Shares owned: 1096
Trustee of Tax-Free Trust of Arizona and of Churchill Tax-Free
Fund of Kentucky and Churchill Cash Reserves Trust 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 Manager since 1997;
Senior Vice President and Secretary, formerly Vice President of
the Manager 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.
Raymond H. Lung*, Trustee, Age: 71, Shares owned: 44,436 (3)
Retired; Trustee of Qualivest Group of Funds since 1994;
Executive Vice President and Executive Trust Officer of U.S.
National Bank of Oregon, 1989-1991; Senior Vice President and
Executive Trust Officer, 1980-1989; various other management
positions, 1954-1980; Member of Executive Committee, Trust
Division, American Bankers Association, 1986-1988; Director of
Pacific Securities Depository Trust Company and Pacific Clearing
Corporation (subsidiaries of the Pacific Stock Exchange), 1980-
1987; Director of Collins Pine Company and Ostrander Companies
(lumber and oil), 1980-1990; Trustee of Cascades Cash Fund, 1992-
1994 and of Aquila Cascadia Equity Fund since 1996.
(3) Held jointly with his wife
Richard C. Ross, Trustee, Age: 76, Shares owned: 4,766 (3)
President of Richard Ross Communications, a consulting firm,
since 1986; Senior communications consultant to Pihas, Schmidt,
Westerdahl, advertising and public relations, 1986-1988;
Executive News Director of KATU Television, 1975-1986; News
Director of KGW-TV, 1956-1975; Trustee of Cascades Cash Fund,
1989-1994 and of Aquila Cascadia Equity Fund since 1996; Director
of the Portland Rose Festival since 1972; Director of the Greater
Portland Convention & Visitors Association, 1982-1985; Director
of the Portland Chamber of Commerce, 1971-1980; President of the
Oregon chapter of the National Multiple Sclerosis Society, 1984-
1986; Director of the Meridian Park Hospital Foundation, 1984-
1987; Chairman of the Broadcasters Group of the Bar-Press-
Broadcasters professional relations committee, 1964-1984; Former
President of the Rotary Club of East Portland and currently a
Director of Goodwill Industries, Metropolitan Youth Symphony and
the Lake Oswego Community Theatre.
(3) Held jointly with his wife
Sue McCarthy-Jones, Senior Vice President, Age: 52
Senior Vice President of Aquila Cascadia Equity Fund, Aquila
Rocky Mountain Equity Fund since 1997; Investment Executive, US
Bancorp Securities, 1996-1997; Training and sales supervision,
Marketing One, Inc., 1991-1996; Account Executive, Security
Pacific Bank, 1990-1991; various investment related positions,
1980-1990.
Nancy L. Kayani, Vice President, Age: 40
Vice President of Cascades Cash Fund, 1992-1994 and of Aquila
Cascadia Equity Fund since 1996; Customer Service Representative
of U.S. National Bank of Oregon, 1990-1991; Securities Trader of
Bidwell & Co., 1988-1989; Securities Trader and Mutual Fund
Regional Representative of Fidelity Investments Southwest, 1985-
1987; Stockbroker of Dean Witter Reynolds, 1983-1984; Mutual
Regional Representative of Columbia Management Company, 1980-
1983;
William C. Wallace, Vice President, Age: 62
Vice President of Capital Cash Management Trust and Pacific
Capital Cash Assets Trust since 1984; Senior Vice President of
Hawaiian Tax-Free Trust since 1985 and Vice President, 1984-1985;
Senior Vice President of Tax-Free Trust of Arizona since 1989 and
Vice President, 1986-1988; Vice President of Churchill Tax-Free
Fund of Kentucky and Tax-Free Fund of Colorado since 1987, of
Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital
U.S. Treasuries Cash Assets Trust since 1988 and of Narragansett
Insured Tax-Free Income Fund since 1992; Secretary and Director
of STCM Management Company, Inc. since 1974; President of the
Distributor since 1995 and formerly Vice President of the
Distributor, 1986-1992; Member of the Panel of Arbitrators,
American Arbitration Association, since 1978; Assistant Vice
President, American Stock Exchange, Market Development Division,
and Director of Marketing, American Gold Coin Exchange, a
subsidiary of the American Stock Exchange, 1976-1984.
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 Manager since 1984 and of the
Distributor since 1985.
Richard F. West, Treasurer, Age: 62
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: 58
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.
John M. Herndon, Assistant Secretary, Age 58
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
Manager 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.
Patricia A. Craven, Assistant Secretary & Compliance Officer,
Age: 31
Assistant Secretary of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1995; Counsel to the Manager
and the Distributor since 1995; formerly a Legal Associate for
Oppenheimer Management Corporation, 1993-1995.
Compensation of Trustees
The Trust does not pay fees to Trustees affiliated with the
Manager or Sub-Adviser or to any of the Trust's officers. During
the fiscal year ended September 30, 1997, the Trust paid $79,387
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 each received during the Trust's
fiscal year from all funds in the Aquilasm Group of Funds and the
number of such 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 on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group serves
<S> <C> <C> <C>
Vernon R.
Alden $11,077 $52,789 7
Warren C.
Coloney $11,318 $12,418 2
James A.
Gardner $9,400 $10,508 2
Raymond H.
Lung $9,900 $11,008 2
Richard C.
Ross $9,844 $11,292 2
</TABLE>
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" of the Trust, as that term is defined in the
1940 Act. The Committee (i) recommends to the Board of Trustees
which 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 seven meetings. Each Trustee was present
at least 75% of the total number of Board and (if such Trustee
was a member of that Committee) Audit Committee meetings.
The Trust's Manager is founder and investment adviser
and/or administrator to the Aquilasm Group of Funds, which
consists of tax-free municipal bond funds, money market funds and
an equity fund. As of December 31, 1997, these funds had
aggregate assets of approximately $2.8 billion, of which
approximately $1.9 billion consisted of assets of tax-free
municipal bond funds. The Manager which was founded in 1984, is
controlled by Mr. Lacy B. Herrmann (directly, through a trust and
through share ownership by his wife). For the fiscal year of the
Trust ended September 30, 1997, fees of $617,654 were paid or
accrued to the Manager under an administration agreement then in
effect. For the fiscal year ended September 31, 1997, fees of
$617,654 were paid or accrued to the Trust's former adviser and
to the Sub-Adviser under the former advisory agreement in effect
until August 1, 1997 and an interim advisory agreement in effect
until October 31, 1997, respectively.
The Distributor currently handles the distribution of the
shares of fourteen funds (seven tax-free municipal bond funds,
five money market funds and two equity funds), including the
Trust. Under the Distribution Agreement, the Distributor is
responsible for the payment of certain printing and distribution
costs relating to prospectuses and reports as well as the costs
of supplemental sales literature, advertising and other
promotional activities. During the fiscal year ended September
30, 1997, $459,662 was paid to Qualified Recipients with respect
to Class A Shares, of which $12,019 was retained by the
Distributor and $4,910 was paid to Qualified Recipients with
respect to Class C Shares. All of such payments were for
compensation. During the fiscal year, the Distributor received
$5,622 with respect to Class C Shares under the Distribution Plan
and the Shareholder Services Plan, all of which was for
compensation.
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, 1998; 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.
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>
AQUILA
TAX-FREE TRUST OF OREGON
PROXY FOR SHAREHOLDERS MEETING APRIL 20, 1998
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of TAX-FREE TRUST OF OREGON (the
"Trust") does hereby appoint LACY B. HERRMANN, DIANA P. HERRMANN
and EDWARD M. W. HINES, or any of them, as attorneys and proxies
of the undersigned, with full power of substitution, to attend
the Annual Meeting of Shareholders of The Cascades Trust, of
which the Trust is the only series, to be held on April 20, 1998,
at the Oregon Convention Center, 777 N.E. Martin Luther King Jr.
Boulevard, Portland, Oregon 97212 at 2:00 p.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. Such shares are entitled to one vote
for every dollar of net asset value represented by the share
balance printed on the other side of this card.
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.
Please indicate your vote by an "X" in the appropriate box
below.
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, VERNON R. ALDEN, WARREN C. COLONEY,
DAVE FROHNMAYER, JAMES A. GARDNER, DIANA P. HERRMANN,
RAYMOND H. LUNG, RICHARD C. ROSS
Action on selection of KPMG Peat
Marwick LLP as independent auditors
__ __ __
(Proposal No. 1) FOR [__] AGAINST [__] ABSTAIN [__]
Dated: ____________ ______, 1998
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.
