TAX-FREE FUND OF COLORADO
380 Madison Avenue, Suite 2300, New York, N.Y. 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
on June 16, 1999
TO SHAREHOLDERS OF THE FUND:
The purpose of this Notice is to advise you that an Annual
Meeting of the Shareholders of Tax-Free Fund of Colorado (the
"Fund") will be held:
Place: (a) at Inverness Hotel & Golf Club
200 Inverness Drive West
Englewood, CO 80112
Time: (b) on June 16, 1999
at 2:30 p.m., local time;
Purposes: (c) for the following purposes:
(i) to elect seven Trustees; each Trustee elected
will hold office until the next annual meeting of
the Fund's shareholders or until his or her
successor is duly elected;
(ii) to ratify (that is, to approve) or reject the
selection of KPMG LLP as the Fund's independent
auditors for the fiscal year ending December 31,
1999 (Proposal No. 1); and
<PAGE>
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 and returning it in the
accompanying stamped envelope. To avoid unnecessary expense to
the Fund, we request your cooperation in voting no matter how
large or small your holding may be.
(iii) to act upon any other matters which may
properly come before the Meeting at its 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 Fund's records at the close of
business on March 26, 1999 (the "record date").
Also, the number of shares of each of the Fund's
three 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
April 29, 1999
<PAGE>
Tax-Free Fund of Colorado
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 Fund of Colorado
(the "Fund"). 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.
This Notice and Proxy Statement are first being mailed on or
about April 29, 1999.
A copy of the Fund's most recent Annual Report and most
recent Semi-Annual Report will be sent to you without charge upon
written request to the Fund's Distributor, Aquila Distributors,
Inc., 380 Madison Avenue, Suite 2300, New York, NY 10017 or by
calling 800-872-2652 toll-free or 212-697-6666.
The Fund's organizer and administrator and investment
adviser (the "Manager") is Aquila Management Corporation, 380
Madison Avenue, Suite 2300, New York, NY 10017. The Fund's
principal underwriter (the "Distributor") is Aquila Distributors,
Inc., 380 Madison Avenue, Suite 2300, New York, NY 10017. The
Fund's Investment Sub-Adviser (the "Sub-Adviser") is KPM
Investment Management, Inc., 1700 Lincoln Street, Denver, CO
80203. The Sub-Adviser is a wholly owned subsidiary of KFS
Corporation, which is wholly-owned by Mutual of Omaha Insurance
Company, whose principal office is at Mutual of Omaha Plaza,
Omaha, NE 68175.
You can vote in three ways:
Proxy Ballot
The enclosed proxy card authorizes the persons named (or
their substitutes) to vote your shares; the Fund 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 matter listed on the proxy card, you may
direct the proxy holders to vote your shares on that proposal 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 any box
on the proposal, the proxy holders will vote your shares for the
proposal.
Telephone Voting
You can vote your shares by telephone. You should first read
the proxy statement. To vote, 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 instruction using your
proxy card as a guide. If you vote by phone, do not return the
proxy card by mail.
Internet Voting
You can vote your shares by the internet. You should first
read the Proxy Statement. To vote, contact the Fund at
http://www.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, do 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 Fund in writing; (ii) signing a
new and different proxy card (if the Fund 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 Fund'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.
The Fund 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. The Fund 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
Fund's shares so that these owners may authorize the voting of
their shares. The Fund will pay these firms their out-of-pocket
expenses for doing so.
On the record date, the Fund had three classes of shares
outstanding. All shareholders of the Fund 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 Fund's outstanding classes of
shares was as follows: Class A Shares, $10.58; Class C Shares,
$10.56; and Class Y Shares, $10.60. The meeting is expected to
act only upon matters that affect the Fund as a whole: the
election of Trustees and the action on the selection of auditors
(Proposal No. 1). On matters that affect the Fund as a whole, all
shareholders of the Fund, including the shareholders of all
classes of the Fund, are entitled to vote at the meeting.
On the record date, the total number of shares of the Fund
outstanding for each class of shares as follows: Class A Shares,
19,625,279; Class C Shares, 136,350; and Class Y Shares, 660,859.
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive,
Jacksonville, FL held of record 1,248,015 Class A Shares (6.4% of
the class) and 14,829 Class C Shares (10.9% of the class);
PaineWebber, 3312 Shore Rd, Fort Collins, CO held of record
20,389 Class C Shares (14.9% of the class); Everen Securities,
Inc., 111 E. Kilbourn Av., Milwaukee, WI held of record in 2
accounts 70,930 Class C Shares (52.0% of the class); Dean
Witter, 250 Church St. Station, New York, NY held of record 8,624
Class C Shares (6.3% of the class); Norwest Investment Services,
608 2nd Ave., Minneapolis, MN held of record 7,128 Class C Shares
(5.2% of the class); Guaranty Bank & Trust, P.O. Box 5847,
Denver, CO held in the name of two nominees 176,983 Class Y
Shares (26.7% of the class); Alpine Trust & Asset Management, 225
N. 5th St., Denver, CO held of record 251,702 Class Y Shares
(38.0%) of the class); Linway & Co, 1740 Broadway, New York, N Y
held of record 166,261 Class Y Shares (25.2% of the class); and
SEI Trust Co c/o Colorado Business Bank, One Freedom Valley
Drive, Oaks, PA held of record 46,420 Class Y Shares (7.0% of the
class). On the basis of information received from the holders,
the Fund's management believes that all of the shares indicated
are held for the benefit of clients. The Fund'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
At the Meeting, seven 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 reelected by the shareholders at the annual meeting of
the Fund held on June 29, 1998. Except for Mr. Weeks, who has
been a Trustee since 1995, and Dr. Adams, who has been a Trustee
since 1989, every other Trustee has been a Trustee since the
beginning of the Fund's operations in 1987. The Trustees and
officers as a group owned on the record date less than 1% of the
outstanding shares of the Fund. Listed in the table below are the
shares of the Fund owned by each Trustee, all of which are Class
A Shares. In the table below and elsewhere in this Proxy
Statement, Aquila Management Corporation is referred to as the
"Manager" and the Fund's Distributor, Aquila Distributors, Inc.,
is referred to as the "Distributor." Mr. Herrmann is an
interested person of the Fund as that term is defined in the
Investment Company Act of 1940 (the "1940 Act") as an officer of
the Fund and a Director, officer and shareholder of the
Distributor. He is so designated by an asterisk.
In the following material Pacific Capital Cash Assets Trust,
Churchill Cash Reserves Trust, Pacific Capital U.S. Government
Securities Cash Asset Trust and Pacific Capital Tax-Free Cash
Assets Trust, each of which is a money market fund, are together
with Capital Cash Management Trust ("CCMT") called the "Aquila
Money-Market Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of
Arizona, Tax-Free Trust of Oregon, Tax-Free Fund of Colorado
(this Fund), 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"; 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, positions
with the Fund, age as of March 26, 1999 and business experience
during at least the past five years (other than with the Fund) of
each nominee and all officers of the Fund. All shares listed as
owned by the Trustees are Class A Shares unless indicated
otherwise.
Lacy B. Herrmann* Chairman Founder and Chairman of
Age: 69 of the the Board of Aquila
Shares Owned: 332.4 (1) Board of Management Corporation,
Trustees the sponsoring
organization and Manager or
Administrator and/or Adviser or
Sub-Adviser to the Aquila Money
Market Funds, the Aquila Bond Funds
and the Aquila Equity Funds, and
Founder, Chairman of the Board of
Trustees and (currently or until
1998) President of each since its
establishment, beginning in 1984;
Vice President and Director, and
formerly Secretary, of Aquila
Distributors, Inc., distributor of
the above funds, since 1981;
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.
(1) Includes 132 shares held of record by the Manager.
Tucker Hart Adams Trustee President of The Adams
Age: 61 Group,Inc., an economic
Shares Owned: 371 consulting firm, since 1989;
Trustee of Tax-Free Fund of
Colorado (this Fund) since 1989 and
of Aquila Rocky Mountain Equity
Fund since 1993; Vice President of
United Banks of Colorado, 1985-
1988; Chief Economist of United
Banks of Colorado, 1981-1988;
Director of University Hospital,
1990-1994; Director of the Colorado
Health Facilities Authority;
Director of the University of
Colorado Foundation; currently or
formerly an officer or director of
numerous professional and community
organizations.
Arthur K. Carlson Trustee Retired; Advisory Director of
Age: 77 the Renaissance Companies
Shares Owned: 507 (design and construction
companies of
commercial,industrial
and upscale residential properties)
since 1996; Senior Vice President
and Manager of the Trust Division
of The Valley National Bank of
Arizona, 1977-1987; Trustee of Tax-
Free Fund of Colorado (this Fund),
Hawaiian Tax-Free Trust, Tax-Free
Trust of Arizona and Pacific
Capital Cash Assets Trust since
1987, of Pacific Capital Tax-Free
Cash Assets Trust and Pacific
Capital U.S. Government Securities
Cash Assets Trust since 1988 and of
Aquila Rocky Mountain Equity Fund
since 1993; previously Vice
President of Investment Research at
Citibank, New York City, and prior
to that Vice President and Director
of Investment Research of Irving
Trust Company, New York City; past
President of The New York Society
of Security Analysts and currently
a member of the Phoenix Society of
Financial Analysts; formerly
Director of the Financial Analysts
Federation; past Chairman of the
Board and past Director of Mercy
Healthcare of Arizona, Phoenix,
Arizona; Director of St. Joseph's
Hospital Foundation since 1996 and
Director of Northern Arizona
University Foundation since 1990,
present or formerly an officer
and/or director of various other
community and professional
organizations.
William M. Cole Trustee President of Cole
Age: 67 International,
Shares Owned: 94 Inc., financial and shipping
consultants, since 1974; President
of Cole Associates, shopping center
and real estate developers, 1974-
1976; President of Seatrain Lines,
Inc., 1970-1974; former General
Partner of Jones & Thompson,
international shipping brokers;
Trustee of Pacific Capital Cash
Assets Trust since 1984, of
Hawaiian Tax-Free Trust since 1985,
of Tax-Free Fund of Colorado (this
Fund) since 1987 and of Pacific
Capital Tax-Free Cash Assets Trust
and Pacific Capital U.S. Government
Securities Cash Assets Trust since
1988; Chairman of Cole Group, a
financial consulting and real
estate firm, since 1985.
Anne J. Mills Trustee Vice President for Business Affairs
Age: 60 of Ottawa University since 1992;
Shares Owned: 5,449 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,
1994-1997; Director of the American
Baptist Foundation 1985-1986 and
since 1998; Trustee of Brown
University; Trustee of Churchill
Cash Reserves Trust since 1985, of
Tax-Free Trust of Arizona since
1986, of Churchill Tax-Free Fund of
Kentucky, Tax-Free Fund of Colorado
(this Fund) and Capital Cash
Management Trust since 1987 and of
Tax-Free Fund For Utah since 1994.
J. William Weeks Trustee Trustee of Narragansett Insured
Age: 71 Tax-Free Income Fund and of Tax
Shares Owned: 568.1 -Free Fund of Colorado (this Fund)
since 1995; Senior Vice Presidentof
Tax-Free Fund of Colorado and
Narragansett Insured Tax-Free
Income Fund, 1992-1995; Vice
President of Hawaiian Tax-Free
Trust, Tax-Free Trust of Arizona,
Tax-Free Trust of Oregon and
Churchill Tax-Free Fund of
Kentucky, 1990-1995; Senior Vice
President or Vice President of the
Bond and Equity Funds and Vice
President of Short Term Asset
Reserves and Pacific Capital Cash
Assets Trust, 1984-1988; President
and Director of Weeks & Co., Inc.,
financial consultants, 1978-1988;
limited partner and investor in
various real estate partnerships
since 1988; Partner of Alex. Brown
& Sons, investment bankers, 1966-
1976; Vice President of Finance and
Assistant to the President of
Howard Johnson Company, a
restaurant and motor lodge chain,
1961-1966; formerly with Blyth &
Co., Inc., investment bankers.
John G. Welles Trustee Retired; Executive Director
Age: 73 Emeritus of the Denver Museum of
Shares Owned: 5,181 Natural History since 1995;Director
of the Museum, 1987-1994;Regional
Administrator of Region VIII, U.S.
Environmental Protection Agency,
1983-1987; Vice President for
Planning and Public Affairs of the
Colorado School of Mines, 1974-
1983; Member of the Board of
Directors of Intra West Mortgage
Corporation, 1976-1983; Member of
the Board of Directors of the Gulf
of Maine Foundation; formerly head
of the Industrial Economics
Division of the University of
Denver Research Institute,
consultant to the United Nations
Conference on the Human Environment
and to Business International, and
Chairman of the Colorado Front
Range Project; formerly Vice
President and member of Ethics
Commission of the American
Association of Museums.
Diana P. Herrmann Senior President and Chief Operating
Age: 41 Vice Officer of the Manager
President since 1997, a Director since
1984, Secretary since 1986 and
previously its Executive Vice
President, Senior Vice President or
Vice President, 1986-1997;
President of various Aquila Bond
and 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 Fund'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.
Jerry G. McGrew Senior Vice President of Aquila
Age: 54 President Distributors, Inc. since
1998, Registered Principal since
1993, Senior Vice President, 1997-
1998 and Vice President, 1993-1997;
Senior Vice President of Aquila
Rocky Mountain Equity Fund since
1996; Senior Vice President of
Churchill Tax-Free Fund of Kentucky
since 1994, and of Tax-Free Fund of
Colorado (this Fund) and Tax-Free
Fund For Utah since 1997; Vice
President of Churchill Cash
Reserves Trust since 1995;
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, 1993-
1997; 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; Director-at Large, Houston
Alliance for the Mentally Ill
(AMI), since 1998.
Jean M. Smith Vice Assistant Treasurer of
Age: 54 President Bradford Trust Company,
1977-1978; Staff Supervisor of Wood
Struthers & Winthrop, an investment
advisory firm, 1976- 1977; Client
Administrator of Bradford Trust
Company, 1972-1976.
Jessica L. Wiltshire Vice Investor Representative
Age: 28 President with Oppenheimer Funds, 1996-1997;
Sales Representative for Tax-Free
Fund of Colorado (this Fund) and
Aquila Rocky Mountain Equity Fund,
1993-1996.
Rose F. Marotta Chief Chief Financial Officer
Age: 74 Financial of the Aquila Money-Market, Bond
Officer 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 Treasurer of the Aquila
Age: 63 Money-Market, 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 Partner of Hollyer Brady
Age: 59 Smith Troxell Barrett Rockett Hines
& MoneLLP, attorneys, since 1989
and counsel, 1987-1989; Secretary
of the Aquila Money-Market, 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 Assistant Secretary of
Age: 59 Secretary the Aquila Money-Market,
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.
The Fund does not currently pay fees to any of the Fund's
officers or to Trustees affiliated with the Manager or the Sub-
Adviser. For its fiscal year ended December 31, 1998, the Fund
paid a total of $73,819 in compensation and reimbursement of
expenses to the Trustees. No other compensation or remuneration
of any type, direct or contingent, was paid by the Fund to its
Trustees.
The Fund 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
Fund and the compensation they received during the Fund's fiscal
year from other funds in the Aquilasm Group of Funds. None of
such Trustees has any pension or retirement benefits from the
Fund 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 Fund Group serves
<S> <C> <C> <C>
Tucker H.
Adams $8,103 $9,729 2
Arthur K.
Carlson $8,760 $53,558 7
William M.
Cole $6,352 $43,215 5
Anne J.
Mills $7,330 $33,522 6
J. William
Weeks $8,793 $14,426 2
John G.
Welles $8,677 $8,677 1
</TABLE>
The Fund'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, 1998, these funds had aggregate assets of approximately $3.2
billion, of which approximately $2.0 billion consisted of assets
of the 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. During
the year ended December 31, 1998 the Fund incurred fees for
advisory and administration services of $1,087,501.
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 Fund.
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. At the date of this Proxy Statement, there is a
proposed transaction whereby the shares of the Distributor, which
are currently owned 75% by Mr. Herrmann and other members of his
immediate family and 25% by Diana P. Herrmann, will be owned by
those persons and certain officers of the Manager, including Mr.
Herrmann and Ms. Herrmann.
During the fiscal year ended December 31, 1998, $104,938 was
paid under the Fund's Distribution Plan to Qualified Recipients
with respect to Class A Shares, of which $4,446 was retained by
the Distributor. All of such payments were for compensation.
During the Fund's fiscal year ended December 31, 1998, under the
Plan and under the Fund's Shareholder Services Plan, $8,988 was
paid with respect to the Fund's Class C Shares of which $6,724
(including amounts retained under the Fund's Shareholder Services
Plan) was retained by the Distributor. All of such payments were
for compensation.
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 Fund, 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 Fund's internal accounting
procedures and controls. The Committee held two meetings during
the Fund's last fiscal year. The Board of Trustees does not have
a nominating committee. During the Fund's last fiscal year, the
Board of Trustees held four meetings. All 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. 1)
KPMG LLP, which is currently serving as the Fund's auditors,
has been selected by the Fund's Board of Trustees, including a
majority of the Independent Trustees, as the Fund's independent
auditors for the fiscal year ending December 31, 1999. Such
selection is submitted to the shareholders for ratification or
rejection.
The firm has no direct or indirect financial interest in the
Fund or in the Fund's Manager, Distributor or 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.
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
Fund's proxy statement and proxy card for a particular annual
meeting. One of these conditions relates to the timely receipt by
the Fund of any such proposal. Under these rules, proposals
submitted for inclusion in the proxy material for the Fund's next
annual meeting after the meeting to which this Proxy Statement
relates must be received by the Fund 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
Fund will so advise you.
The fact that the Fund receives a shareholder proposal in a
timely manner does not insure its inclusion in the Fund's proxy
material, since there are other requirements in the proxy rules
relating to such inclusion.
OTHER BUSINESS
The Fund 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 or telephone or internet
instructions entitle them to vote in accordance with their
judgment on such matter or matters. That is, by signing and
returning your proxy card or voting by telephone or internet you
give the proxy holders discretionary authority as to any such
matter or matters.
<PAGE>
[Back Cover]
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
AQUILA
TAX-FREE FUND
OF
COLORADO
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 16, 1999
PROXY STATEMENT
<PAGE>
TAX-FREE FUND OF COLORADO
PROXY FOR SHAREHOLDERS MEETING JUNE 16, 1999
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of TAX-FREE FUND OF COLORADO
(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 June 16, 1999 at the Inverness Hotel & Golf Club, 200
Inverness Drive West, Englewood, Colorado 80112 at 2:30 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.
Telephone Voting (Touch-tone only)
You can vote you shares by telephone. Read the proxy
statement. To vote, 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, do not return the proxy card by
mail.
Internet voting
You can vote your shares by the internet. Read the proxy
statement. To vote, contact the Fund 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, do 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 attorneys 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 on June 16, please call us a t
1-800-872-2652, e-mail us at [email protected] or mail the
planning card back to us along with your proxy vote.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
_________________________________________________________________
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
TAX-FREE FUND OF COLORADO
For address changes and/or comments, please check this box
and write them on the back where indicated. __
[__]
Vote on Trustees
2. Election of Trustees.
01) LACY B. HERRMANN, 02) TUCKER HART ADAMS, 03) ARTHUR K.
CARLSON, 04) WILLIAM M. COLE, 05) ANNE J. MILLS, 06) J.
WILLIAM WEEKS, 07) JOHN G. WELLES
__
[__] For all
__
[__] Withhold all
__
[__] For all except
To withhold authority to vote, mark "For all Except" and write
the nominee's number on the line below.
________________
Vote on Proposals
1. Action on selection of KPMG LLP
as independent auditors (Proposal No.1 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)
