IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Aquilasm Group of Funds
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 MAY 8, 2000
TO SHAREHOLDERS OF THE TRUST:
The purpose of this Notice is to advise you that an Annual Meeting of
the Shareholders of 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. Blvd.
Portland Oregon;
Time: (b) on May 8, 2000
at 2:00 p.m. local time;
Purposes: (c) for the following purposes:
(i) to elect ten 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(Proposal No. 1);
(ii) to ratify (that is, to approve) or
reject the selection of KPMG LLP as the Trust's
independent auditors for the fiscal year ending
September 30, 2000 (Proposal No. 2);
(iii) to act upon a proposal to change the
fundamental policies of the Trust to allow the use of
additional nationally recognized statistical rating
organizations for rating obligations the Trust may
purchase (Proposal No. 3); and
(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 February 22, 2000 (the "record date").
Also, the number of shares of each of the Trust's
outstanding classes of shares that you held at that
time and the respective net asset values of each class
of shares at that time determine 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 27, 2000
PLEASE NOTE:
If you do not expect to attend the Meeting, please indicate voting
instructions in any of three ways: by telephone, by e-mail or by
completing the enclosed proxy card and returning it in the
accompanying stamped envelope. To avoid unnecessary expense to the
Trust, we request your cooperation in voting no matter how large or
small your holding may be.
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 Tax-Free Trust of Oregon (the "Trust") 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 in voting.
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 and Manager (the "Manager") is Aquila
Management Corporation, 380 Madison Avenue, Suite 2300, New York, NY
10017. The Trust's principal underwriter (the "Distributor") is
Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New York,
NY 10017. The Trust's Investment Sub-Adviser is U.S. Bank National
Association ("the Sub-Adviser"), 601 Second Avenue, Minneapolis, MN
55402.
This Notice and Proxy Statement are first being mailed on or
about March 27, 2000.
You should read the Proxy Statement prior to voting. Then, you
may vote in one of three ways:
Proxy Card
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 following the
instructions 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 these proposals by marking
the appropriate box "For" or "Against" or instruct them not to vote
your shares on the proposal by marking the "Abstain" box. If you
return your signed proxy card and do not mark the box on a proposal,
the proxy holders will vote your shares for that proposal.
Telephone Voting
To vote your shares by telephone, call toll free 1-800-690-
6903. You will be prompted to enter the 12-digit control number on
the enclosed proxy card. Follow the recorded instructions using your
proxy card as a guide. If you vote by phone, you need not return the
proxy card by mail.
Internet Voting
To vote your shares by the Internet, please contact the Trust
at http://proxyvote.com. You will be prompted to enter the 12-digit
control number on the enclosed proxy card. Follow the instructions on
the screen, using your proxy card as a guide. If you vote by the
Internet, you need not return the proxy card by mail.
You may end the power of the proxy holders to vote your shares
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); (iii) voting your shares at the meeting in person or by your
duly appointed agent; or (iv) calling the toll free number above or
contacting the Trust's internet address above, entering your 12-digit
control number and revoking your previous vote.
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. This policy may make it more difficult
to obtain the vote required to approve Proposal No. 3.
The Trust is sending you this Notice and Proxy Statement in
connection with the solicitation by its Trustees of 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. 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.
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 their shares. The Trust will pay
these firms their out-of-pocket expenses for doing so.
On the record date, the Trust had 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
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 Trust's outstanding classes of shares was as follows:
Class A Shares, $10.05; Class C Shares, $10.04; and Class Y Shares,
$10.04. The meeting is expected to act only upon matters that affect
the Trust as a whole.: the election of Trustees and the action on the
proposals. On matters that affect the Trust as a whole, all
shareholders of the Trust, including the shareholders of all classes
of the Trust, are entitled to vote at the meeting.
On the record date, the total number of shares outstanding for
each class of shares was as follows: Class A Shares, 28,934,766;
Class C Shares, 439,884; and Class Y Shares, 1,879,020.
On the record date, the following institutional holders held 5% or
more of the Trust's outstanding shares. 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
Name and address Number of shares Percent of class
of the holder of
record
Merrill Lynch Pierce
Fenner & Smith,
Jacksonville, FL 1,948,544 Class A Shares 6.7% of the class
68,966 Class C Shares 15.5% of the class
Vedbush Morgan
Securities,
1600 Wilshire Blvd,
Los Angeles, CA 39,987 Class C Shares 9.0% of the class
Fiserv Securities Inc.,
One Commerce Square,
2005 Market Street,
Philadelphia, PA 67,487 Class C Shares 15.2% of the class
U.S. Bank
National Association,
P.O. Box 64010,
St. Paul, MN
(as custodian) 342,510 Class Y Shares 18.2% of the class
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.
ELECTION OF TRUSTEES
(Proposal No. 1)
At the Meeting, ten Trustees are to be elected. 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.
All of the nominees are presently Trustees and all were elected
by the shareholders in May 1999, except for Mr. Jensen and Mr. Shaw
who were elected by the Trustee in 1999 to fill vacancies. The
Trustees and officers as a group own less than 1% of the outstanding
shares of the Trust. In the material below and elsewhere in this
Proxy Statement, Aquila Management Corporation is referred to as the
"Manager" and the Trust's Distributor, Aquila Distributors, Inc., is
referred to as the "Distributor." 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 the Distributor.
Ms. Herrmann is an interested person of the Trust as an officer of
the Trust and the Manager and a shareholder of the Distributor. Each
is also an interested person as a member of the immediate family of
the other. Mr. Lung and Mr. Mitchell are interested persons as
security holders of the Sub-Adviser's parent. Mr. Mitchell is also an
interested person as an employee of the Sub-Adviser. Interested
persons are so designated by an asterisk.
In the following material Hawaiian Tax-Free Trust, Tax-Free
Trust of Arizona, Tax-Free Trust of Oregon (this Trust), Tax-Free
Fund of Colorado, Churchill Tax-Free Fund of Kentucky, Narragansett
Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Bond
Funds"; Churchill Cash Reserves Trust, Capital Cash Management Trust,
Pacific Capital Cash Assets Trust, Pacific Capital U.S. Government
Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money market fund, are called the "Aquila
Money-Market Funds" and Aquila Cascadia Equity Fund and Aquila Rocky
Mountain Equity Fund are called the "Aquila Equity Funds."
Described in the following material are the name, address,
positions with the Trust, age as of the record date and business
experience during at least the past five years (other than with the
Trust) of each nominee and all officers of the Trust. All shares
listed as owned by the Trustees are Class A Shares unless indicated
otherwise.
<TABLE>
<CAPTION>
Name, Position Business Experience
with the Trust,
Address, Age,
Shares Owned
<S> <C> <C>
Lacy B. Herrmann* Founder and Chairman of the Board of Aquila
Chairman of the Management Corporation,the sponsoring
Board of Trustees organization and Manager or Administrator
380 Madison Avenue and/or Adviser or Sub-Adviser to the
New York, New York Aquila Money-Market Funds, The Aquila Bond
10017 Funds and the Aquila Equity Funds,
Age: 70 and Founder, Chairman of the Board of
Shares Owned: 207 Trustees and (currently or until 1998)
President of each since its establishment,
beginning in 1984; Director of Aquila
Distributors, Inc., distributor of the above
funds, since 1981 and formerly Vice
President or Secretary, 1981-1998; President
and a Director of STCM Management Company,
Inc., sponsor and sub-adviser to CCMT;
Founder and Chairman of several other money
market funds; Director or Trustee of OCC
Cash Reserves, Inc. and Quest For Value
Accumulation Trust, and Director or Trustee
of Oppenheimer Quest Value Fund, Inc.,
Oppenheimer Quest Global Value Fund, Inc.
and Oppenheimer 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.
Vernon R. Alden Director of Sonesta International Hotels
Trustee Corporation, Boston, Massachusetts
20 Park Plaza and General Independent Partner of
Suite 1010, the Merrill Lynch-Lee Funds; Former
Boston, Director of Colgate-Palmolive Company,
Massachusetts Digital Equipment Corporation,
02116 Intermet Corporation, The McGraw
Age: 76 Hill and The Mead Corporations;
Shares Owned: 1,059 Chairman of the Board and Executive
Committee of The Boston Company, Inc.,
a financial services company, 1969-1978;
Trustee of Tax-Free Trust of Oregon (this
Trust) since 1988, of Hawaiian Tax-Free
Trust, Pacific Capital Cash Assets Trust,
Pacific Capital Tax-Free Cash Assets Trust
and Pacific Capital U.S. Government
Securities 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 Emeritus, Boston Symphony
Orchestra; 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).
David B. Frohnmayer President, University of Oregon since
Trustee 1994;Dean of the University of Oregon
1226 University Law School, 1992-1994; Attorney General
of Oregon of the State of Oregon, 1981-1991;
Eugene, OR 97403-1226 Trustee of Aquila Cascadia Equity Fund
Age: 59 and Tax-Free Trust of Oregon
Shares Owned: 513 (1) (this Trust) since 1997.
(1) Held jointly with his wife.
James A. Gardner President of Gardner Associates,
Trustee an investment and real estate firm,
Vandervert Ranch since 1970; President Emeritus of
Vandervert Road Lewis and Clark College and Law
Bend, Oregon 97707 School since 1989 and President,
Age: 56 1981-1989; Program Officer and
Shares Owned: 4,690 (2) 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 Tax-Free
Trust of Oregon (this Trust) since 1986 and
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.
(2) Held with his wife as Trustees
Diana P. Herrmann, * President and Chief Operating Officer of
Trustee and the Manager/Administrator since 1997, a
President Director since 1984, Secretary since 1986
380 Madison Avenue and previously its Executive Vice
New York, New York President, Senior Vice President
10017 or Vice President, 1986-1997;
Age: 41 President of various Aquila Bond and
Shares Owned: 646 Money-Market Funds since 1998; Assistant
Vice President, Vice President, Senior Vice
President or Executive Vice President of
Aquila Money-Market, Bond and Equity Funds
since 1986; Trustee of a number of Aquila
Money-Market, Bond and Equity Funds since
1995; {Trustee of Reserve Money-Market Funds
since 1999 and Reserve Private Equity Series
since 1998;} Assistant Vice President and
formerly Loan Officer of European American
Bank, 1981-1986; daughter of the Trust's
Chairman; 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.
Sterling K. Jenson President and Chief Executive Officer of
Trustee First Security Investment Management since
568 South 350 East 1995 and Senior Vice President, 1990-1995;
Farmington, Utah 84025 Chartered Financial Analyst (CFA) since
Age: 47 1984;Trustee of Aquila Cascadia Equity
Shares Owned:0 Fund and Tax-Free Trust of Oregon (this
Trust); past President of Salt Lake City
Society of Financial Analysts (1996-1997);
member of various investment-related and
charitable organizations.
Raymond H. Lung* Retired; Trustee of Qualivest Group of
Trustee Funds, 1994-1997; Executive Vice
16199 N.W. Canterwood President and Executive Trust Officer
Way, Portland, of U.S.National Bank of Oregon, 1989-1991;
Oregon 97229 Senior Vice President and Executive
Age: 73 Trust Officer,1980-1989; various other
Shares Owned: 29,784 (2) management positions, 1954-1980; Member of
the Executive Committee of the Trust
Division of 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 Tax-Free Trust of Oregon (this
Trust) since 1992, of Cascades Cash Fund,
1992-1994 and of Aquila Cascadia Equity Fund
since 1996.
(2) Held with his wife as trustees.
John W. Mitchell* Principal of M & H Economic
Trustee Consultants; Economist, Western
P.O. Box 40012 Region, for U. S. Bancorp since
Portland, Oregon 1998; Chief Economist of U.S
97240-0012 Bancorp, Portland, Oregon, 1983-1998;
Age: 55 Professor of Boise State University,
Shares Owned: 1,811 (3) 1970-1983; Member of the Oregon
Governor's Council of Economic Advisors,
1984-1998; Chairman of the Oregon Governor's
Technical Advisory Committee for Tax Review
in 1998; Trustee of Aquila Cascadia Equity
Fund and Tax Free Trust of Oregon (this
Trust) since 1999.
(3) Held as trustee in two trusts
Richard C. Ross President of Richard Ross Communications,
Trustee a consulting firm, since 1986; Senior
510 SW Country communications consultant to Pihas,
Club Road Schmidt, Westerdahl, advertising and
Lake Oswego, public relations, 1986-1988; Executive
Oregon 97034 News Director of KATU Television
Age: 78 1975-1986; News Director of KGW-TV,
Shares Owned: 5,280 (1) 1956-1975; Trustee of Tax-Free Trust of
Oregon (this Trust) since 1988 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.
(1) Held Jointly with his wife
Ralph R. Shaw General Partner, Shaw Management
Trustee Company, an investment counseling
400 SW Sixth Avenue, firm, since 1980, of Shaw Venture
Suite 1100 Partners since 1983, of Shaw
Portland, Oregon Venture Partners II since June 1987
97204-1636 and of Shaw Venture Partners III
Age: 61 since 1994 (US Bancorp, parent of the
Shares Owned:0 Sub-Adviser, is a limited partner in the
last three ventures). Mr. Shaw presently
serves on the boards of directors of
Schnitzer Steel Industries, Inc., Magni
Systems, Inc., Micromonitors, Inc., Integra
Telecom, Inc. (formerly OGIT Communications,
Inc.), Dendreon Corporation (formerly
Activated Cell Therapy, Inc.), LaTIS, Inc.,
Industrial Devices Corporation, Telestream,
Inc., and 3PF.COM, Inc. (formerly
ComAlliance, Inc.). Additionally, he serves
on the Board of Advisors of K-2 Designs,
Inc. and as trustee of the Tax-Free Trust of
Oregon (this Trust). He is active in local
civic and charitable organizations.
James M. McCullough Senior Vice President of Aquila
Senior Vice President Distributors since 2000, Aquila Cascadia
1750 Aspen Court Equity Fund, Aquila Rocky Mountain
Lake Oswego, OR Equity Fund, Tax-Free Fund of Colorado
97034 and Tax-Free Trust of Oregon (this Trust)
Age: 54 since 1999; Director of Fixed Income
Institutional Sales, CIBC Oppenheimer & Co.
Inc., Seattle, WA, 1995-1999; Sales Manager,
Oregon Municipal Bonds, Kidder, Peabody,
Inc., (acquired in 1995 by Paine, Webber)
Portland, OR, 1994-1995.
Kerry A. Lemert Vice President of Aquila Cascadia Equity
Vice President Fund and Tax Free Trust of Oregon (this
2019 Lloyd Center Trust) since 1998; Assistant Vice
Portland, President, Black & Co., 1997-1998; Dealer-
Oregon 97232 Sales and Assistant Municipal bond trader,
Age: 45 Pacific Crest Securities, 1994-1997;
Assistant Municipal Bond Trader, Registered
Sales Assistant, Paine Webber Inc., Portland
Oregon, 1988-1994; Sales Assistant, E.F.
Hutton & Co., Inc., Portland, Oregon, 1984-
1988.
Christine L. Neimeth Vice President of Aquila Cascadia
Vice President Equity Fund and Tax Free Trust
2019 Lloyd Center, of Oregon (this Trust) since1998;
Portland, Oregon 97232 Management Information Systems
Age: 36 consultant, Hillcrest Ski and
Sport, 1997; Institutional Municipal Bond
Salesperson, Pacific Crest Securities, 1996;
Institutional Bond Broker, Hilliard Farber
and Company 1991-1995; Bond Trader, Bear
Stearns and Company, 1989-91. Active in
college alumni and volunteer organizations.
Rose F. Marotta Chief Financial Officer of the Aquila
Chief Financial Officer Money-Market, Bond and Equity Funds
380 Madison Avenue since 1991 and Treasurer, 1981-1991;
New York, New York formerly Treasurer of the predecessor of
10017 CCMT; Treasurer and Director of STCM
Age: 75 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 of the Aquila Money-Market,
Treasurer Bond and Equity Funds and of Aquila
380 Madison Avenue Distributors, Inc. since 1992;
New York, New York Associate Director of Furman Selz
10017 Incorporated, 1991-1992; Vice
Age: 64 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 Partner of Hollyer Brady Smith Troxell
Secretary Barrett Rockett Hines & Mone LLP,
551 Fifth Avenue attorneys, since 1989 and counsel,
New York, New York 1987-1989; Secretary of the Aquila
10176 Money-Market, Bond and Equity Funds since
1982;
Age: 60 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 of the Aquila Money-
Assistant Secretary Market, Bond and Equity Funds since 1995
380 Madison Avenue and Vice President of the Aquila Money-
New York, New York Market Funds since 1990; Vice President of
10017 the Manager since 1990 ; Investment Services
Age: 60 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.
</TABLE>
The Trust does not currently pay fees to any of the Trust's
officers or to Trustees affiliated with the Manager or the Sub-
Adviser. For its fiscal year ended September 30, 1999, the Trust paid
a total of $81,359 in compensation and reimbursement of expenses to
the Trustees. No other compensation or remuneration of any type,
direct or contingent, was paid by the Trust to its 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 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
Trusts in the Aquila group.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group of Funds serves
Vernon R.
Alden $8,735 $49,155 7
David B.
Frohnmayer $7,200 $8,350 2
James A.
Gardner $8,745 $10,245 2
Sterling K.
Jensen $350 $700 2
Raymond H.
Lung $9,200 $11,688 2
John W.
Mitchell $6,000 $7,050 2
Richard C.
Ross $8,702 $10,202 2
Class A Shares may be purchased without a sales charge by
certain of the Trust's Trustees and officers.
The Trust's Manager is Manager or Administrator to the Aquilasm
Group of Funds, which consists of tax-free municipal bond funds,
money-market funds and equity funds. As of December 31, 1999, these
funds had aggregate assets of approximately $3.0 billion, of which
approximately $1.8 billion consisted of assets of the tax-free
municipal bond funds. The Manager is controlled by Mr. Lacy B.
Herrmann, through share ownership directly, through a Trust and by
his wife. During the fiscal year ended September 30, 1999 the Trust
paid $1,345,097 in management fees.
During the fiscal year ended September 30, 1999, $482,779 was
paid under Part I of the Trust's Distribution Plan with respect to
the Trust's Class A shares to Qualified Recipients. Of that amount,
$14,550 was paid to the Distributor. During the same period $15,831
was paid to Qualified Recipients under Part II of the Plan with
respect to the Trust's Class C Shares.
The Distributor currently handles the distribution of the shares
of fourteen funds (five money-market funds, seven tax-free municipal
bond 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. The shares
of the Distributor are owned 72% by Mr. Herrmann and other members of
his immediate family, 24% by Diana P. Herrmann and the balance by an
officer of the Distributor.
Other Information on Trustees
The Trustees have appointed a standing 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
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 two meetings 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 four meetings. All current Trustees were present for at least
75% of the total number of Board meetings and Audit Committee
meetings (if such Trustee was a member of that committee).
RATIFICATION OR REJECTION
OF SELECTION OF
INDEPENDENT AUDITORS
(Proposal No. 2)
KPMG LLP, which is currently serving as the Trust's auditors,
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, 2000. 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 Manager or the Trust's Sub-Adviser. 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.
CONSIDERATION OF A CHANGE
IN THE TRUST'S FUNDAMENTAL POLICIES
TO ALLOW THE USE OF ADDITIONAL
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS
FOR RATING OBLIGATIONS THE TRUST MAY PURCHASE
(Proposal No. 3)
Since beginning operations, the Trust has had a fundamental
policy that defines the "investment-grade" securities the Trust may
purchase as
those rated within the four highest credit ratings
assigned by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("S&P") or, if unrated,
determined to be of comparable quality.
When this fundamental policy was put in place Moody's and S&P
were essentially the only nationally recognized statistical rating
organizations ("NRSROs") with respect to municipal obligations. In
recent years, other organizations, notably Fitch IBCA, Inc.
("Fitch"), have become active in rating municipal obligations.
Municipal bond issuers pay to have their bonds rated and there is
competition among the NRSROs. If an issuer chooses to have its bonds
rated by an NRSRO other than Moody's or S&P, the current fundamental
policy of the Trust has the effect of requiring the Trust either to
forego purchasing the bonds because they are not rated by Moody's or
S&P or to treat them as "unrated" when in fact they do have ratings
assigned by an NRSRO. Both results distort the clear intent of the
policy.
Accordingly the Board of Trustees has determined that it would
be in the best interest of the Trust and its shareholders to change
the fundamental policy so that the ratings used to define "investment-
grade" securities would include those assigned by any NRSRO approved
from time to time by the Board of Trustees.
At the present time, if the proposed change is adopted, the
Board of Trustees will approve Fitch in addition to Moody's and S&P.
The Board of Trustees has determined that the standards Fitch employs
in rating bonds are comparable to those of Moody's and that bonds in
the four highest categories rated by Fitch are of comparable quality
to those similarly rated by Moody's and S&P.
Action Requested
THE BOARD OF TRUSTEES RECOMMENDS THAT THE PROPOSED CHANGE IN THE
TRUST'S FUNDAMENTAL POLICIES DESCRIBED ABOVE 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. 3. 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, with one 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 all
of the Trust's three classes of shares.
If this proposal is not approved, the Board of Trustees will
consider appropriate action, which could include continuing with the
present policies or calling another meeting of shareholders.
The meeting can be adjourned by the affirmative vote of a
majority of the shares present in person or by proxy. In voting for
an adjournment, the proxy holders will consider all relevant factors,
including possible delay of receipt of proxies and whether or not a
substantial number of negative votes have been cast with respect to
any proposal. The shares of shareholders who have voted by proxy
against a proposal will be voted against adjournment.
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 in
this Proxy Statement for 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 your proxy
card, telephone or internet vote entitles them to vote, in accordance
with their judgment on such matter or matters. That is, by signing
and returning your proxy card or by voting by telephone or the
Internet, you give the proxy holders discretionary authority as to
any such matter or matters.
<PAGE>
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
TAX-FREE TRUST OF OREGON
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on MAY 8, 2000
PROXY STATEMENT
<PAGE>
TAX-FREE TRUST OF OREGON
PROXY FOR SHAREHOLDERS MEETING MAY 8, 2000
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 Trust to be held on Friday, May 8,
2000 at the Oregon Convention Center, 777 N. E. Martin Luther King
Jr. Blvd, Portland, Oregon, 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 below.
Please read the proxy statement prior to voting.
Telephone Voting (Touch-tone only)
To vote your shares by telephone, call toll free 1-800-690-6903.
You will be prompted to enter the 12-digit control number on this
proxy card. Follow the simple recorded instruction using this proxy
card as a guide. If you vote by phone, you need not return the proxy
card by mail.
Internet voting
To vote your shares by the Internet, contact the Trust at
www.proxyvote.com. You will be prompted to enter the 12-digit control
number on this proxy card. Follow the simple instructions at the
website, using your proxy card as a guide. If you vote by the
Internet, you need not return the proxy card by mail.
Proxy Card Voting
You can vote your shares by completing and returning this proxy
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 proxies shall vote in accordance
with their best judgment.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If you
can join us, please indicate it on the proxy card, call us at 1-800-
872-6734, or e-mail us at [email protected]
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
_________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
TAX-FREE TRUST OF OREGON
For address changes and/or comments, please check this box and
write them on the back where indicated.
[_]
1.Vote on Trustees(Proposal No.1 in Proxy Statement)
Election of Trustees
1) Lacy B. Herrmann*; 2) Vernon R Alden; 3) David B.
Frohnmayer; 4) James A. Gardner; 5) Diana P. Herrmann*; 6)
Sterling K. Jenson; 7) Raymond H. Lung*; 8) John W. Mitchell*; 9)
Richard C. Ross; 10) Ralph R. Shaw.
*interested Trustees
__
[__] For all
__
[__] Withhold all
__
[__] For all except
To withhold authority to vote for one or more (but not all) nominees,
mark "For all except" and write the nominee number(s) and/or name(s)
on the line below.
________________
2. Action on selection of KPMG LLP
as independent auditors (Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
3. Action on change of fundamental policy of the Trust
(Proposal No.3 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
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.
_________________________________Dated: _________
Signature
[Please sign within the box]
_________________________________Dated: __________
Signature
(Joint Owners)
If you mark one of the boxes below, you must return the proxy card by
mail to have this information recorded.
Please indicate if you plan to attend one of the Shareholder
Meetings.
I plan to attend the annual meeting in Portland .[__]
I plan to attend the outreach meeting in Medford .[__]
