Important Notice
Please Read Immediately
Aquilasm
Group of Funds
Tax Free-Fund of Colorado
380 Madison Avenue, Suite 2300, New York, NY 10017
Notice of Annual Meeting of
Shareholders to Be Held
on May 31, 2001
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 the Lawrence C. Phipps Memorial
Conference Center
University of Denver
3400 Belcaro Drive
Denver, Colorado 80209
Time: (b) on May 31, 2001
at 10:00 a.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(Proposal No. 1);
(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, 2001 (Proposal No. 2);
(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 Fund's records at the close of
business on March 5, 2001 (the "record date"). Also,
the number of shares of each of the Fund'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
April 2, 2001
Please Note:
If you do not expect to attend the Meeting, please vote by any of three ways: by
telephone, by the Internet or by completing the enclosed proxy card 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.
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.
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 800-437-1020 toll-free or 212-697-6666.
The Fund's founder and Manager (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" or "KPM") is KPM Investment Management, Inc.,
1600 Broadway, Denver, Colorado 80202.
This Notice and Proxy Statement are first being mailed on or about April 2,
2001.
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 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 this 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
the box on the proposal, the proxy holders will vote your shares for that
proposal.
Telephone Voting
To vote your shares by telephone, call the toll free number on your proxy
card. You will be prompted to enter the control number on your 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 Fund at the address
shown on your proxy card. You will be prompted to enter the control number on
your 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.
General Information
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 described above or contacting the Fund's Internet address described
above, entering your 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. 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 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, $10.42;
Class C Shares, $10.40; and Class Y Shares, $10.44 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 proposal. 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 outstanding for each class
of shares was as follows: Class A Shares, 17,522,479; Class C Shares, 98,240;
and Class Y Shares, 442,267.
On the record date, the following holders held 5% or more of the Fund's
outstanding shares. On the basis of information received from the institutional
holders the Fund's management believes that all of the shares indicated are held
by them for the benefit of clients
Name and address Number of shares Percent of class
of the holder of record
Institutional 5% shareholders
Donaldson Lufkin Jenrette
P.O. Box 2052
Jersey City, NJ 17,136 Class C 17%
Shares
(in three accounts)
First Clearing Corp
1950 S Dayton ST 231
Denver, CO 38,877 Class C 39%
Shares
(in two accounts)
Merrill Lynch Pierce
Fenner & Smith,
4800 Deer Lake Drive East
Jacksonville, FL 9,488 Class C 9%
Shares
Paine Webber,
3312 Shore Rd, Fort
Collins, CO 15,445 Class C 15%
Shares
Wells Fargo Investments
420 Montgomery St
San Francisco, CA 7,718 Class C 7%
Shares
(in two accounts)
49,396 Class Y 11%
Shares
(in three accounts)
Haws & Co (a nominee)
c/o Guaranty Bank & Trust,
P.O. Box 5847
Denver CO 59,411 Class Y 13%
Shares
Alpine Trust
& Asset Management,
225 N. 5th Street,
Grand Junction, CO 183,963 Class Y 41%
Shares
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
(Proposal No. 1)
At the Meeting, seven 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 were elected by the
shareholders in June 2000. The Trustees and officers as a group own less than 1%
of the outstanding shares of the Fund. In the material 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 Manager and
the Distributor. Ms. Herrmann is an interested person of the Fund as an officer
of the Fund and as an officer, director and shareholder of the Manager and as a
shareholder and director of the Distributor. Each is also an interested person
as a member of the immediate family of the other. They are so designated by an
asterisk.
In the following material 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"; Pacific Capital Cash Assets Trust, Pacific
Capital U.S. Government Securities Cash Assets Trust ,Pacific Capital Tax-Free
Cash Assets Trust, Capital Cash Management Trust and Capital Cash U.S.
Government Securities 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, positions with the Fund,
address, and age as of the record date and business experience during at least
the past five years of each nominee and each officer of the Fund. All shares
listed as owned by the Trustees are Class A Shares unless indicated otherwise.
Name, Position Business Experience
with the Fund,
Address and Age
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, NY Aquila Money-Market Funds, the Aquila Bond
10017 Funds and the Aquila Equity Funds,
Age: 71 and Founder, Chairman of the Board of Trustees
Shares Owned: 221 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 Capital Cash
Management Trust and Capital Cash
U.S. Government Securities Trust;
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.
Tucker Hart Adams President of The Adams Group,Inc.,
Trustee an economic consulting firm, since
4822 Alteza Drive 1989; Trustee of Tax-Free Fund
Colorado Springs, of Colorado since 1989 and of Aquila
CO 80917 Rocky Mountain Equity Fund since 1993;
Age: 63 Vice President of United Banks of Colorado,
Shares Owned: 409 1985-1988; Chief Economist of United Banks of
Colorado, 1981-1988; director of
the Montana Power Company, of the
Colorado Health Facilities
Facilities Authority, of Avista Laboratories, Inc.,
(a developer of cell technology for a subsidiary of
Avista Corp.) and of the University of Colorado
Foundation; formerly director of University
Hospital; currently or formerly an officer or director
of numerous professional and community organizations
Gary C. Cornia President elect of the National Tax Association;
Trustee Professor and Chair of the Executive Committee of
577 East 1090 North the International Center for Land Policy Studies and
Orem, UT 84057 Training Institute, Taipei, Taiwan; Associate Dean of
Age: 52 the Marriott School of Management, Brigham Young
Shares Owned: 422(1) 1991; Assistant Professor, 1980-1985; Commissioner of
the Utah Tax Commission,
1983-1986;Director of the National
Tax Association, 1990-1993; Chair
of the Governor's Tax Review
Committee since 1993; Faculty
Associate of the Land Reform
Training Institute, Taipei, Taiwan
and The Lincoln Institute of Land
Policy, Cambridge, Massachusetts.
Trustee of Tax-Free Fund For Utah
since 1993 and of Tax-Free Fund of
Colorado since 2000.
(1) Held jointly with his wife.
Diana P. Herrmann* President and Chief Operating Officer of
Trustee and President the Manager since 1997, a
380 Madison Director since 1984, Secretary since 1986
Avenue and previously its Executive Vice
New York, President, Senior Vice President
NY 10017 or Vice President, 1986-1997;
Age: 43 President of various Aquila Bond and
Shares Owned: 528 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, 1999-2000 and
of Reserve Private Equity Series,
1998-2000; 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.
John C. Lucking President, Econ-Linc, an economic consulting
Trustee firm, since 1995; Consulting Economist,
7537 North Bank One Arizona (formerly Valley National
Central Avenue Bank of Arizona) 1994-1996; Chief Economist,
Phoenix, AZ 85020 Valley National Bank of Arizona, 1987-1994;
Age: 57 Municipal bond analyst and government
Shares Owned: 1,039 securities institutional sales
representative, Valley National
Bank of Arizona, 1984-1987;
Financial Analyst, Phelps Dodge
Corporation (a mining company)
1980-1984; Director of New Mexico
and Arizona Land Company since
1993; Director of Northern Arizona
University Investment Committee
since 1997; Director SANU Resources
and SHRI (privately held mining and
exploration companies) since 1996;
Director: Arizona Historical
Foundation and The Arizona Mining
and Mineral Museum Foundation.
Member: Joint Legislative Budget
Committee Economic Advisory Panel;
Western Blue Chip Economic Forecast
Panel; The Economic Club of
Phoenix; The Arizona Economic
Roundtable; The National
Association of Business Economists
and the National Association of
Corporate Directors; Trustee of
Tax-Free Trust of Arizona since
1994 and of Tax-Free Fund of
Colorado since 2000.
Anne J. Mills Vice President for Business Affairs
Trustee of Ottawa University since 1992;
167 Glengarry Place IBM Corporation, 1965-1991; Budget
Castle Rock Review Officer of the American
CO 80104 Baptist Churches/USA, 1994-1997;
Age: 62 Director of the American Baptist
Shares Owned: 6,009 Foundation,1985-1996 and since 1998;
Trustee of
Brown University, 1992-1999; Trustee
of Churchill Cash Reserves Trust
1985 to 2001, of Tax-Free Trust of
Arizona since 1986, of Churchill
Tax-Free Fund of Kentucky, Tax-Free
Fund of Colorado and Capital Cash
Management Trust since 1987 and of
Tax-Free Fund For Utah since 1994.
J. William Weeks Trustee of Narragansett Insured
Trustee Tax-Free Income Fund and of Tax-
210 Jamaica Lane Free Fund of Colorado since 1995;
Palm Beach, FL 33480 Senior Vice President of Tax-Free Fund
Age: 73 of Colorado and Narragansett Insured
Shares Owned: 627 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 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.
James M. McCullough Senior Vice President of Aquila
Senior Vice Cascadia Equity Fund, Aquila Rocky
President Mountain Equity Fund, Tax-Free Fund
2019 Lloyd Center of Colorado and Tax-Free Trust of Oregon since
Portland, OR 97232 1999 and of Aquila Distributors since 2000;
Age: 55 Vice President, Churchill Tax-Free Fund of
Kentucky since 2000; 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.
Jerry G. McGrew President of Aquila Distributors,
Senior Vice President Inc. since 1998, Registered Principal
380 Madison Avenue since 1993, Senior Vice President, 1997-1998
New York, NY 10017 and Vice President, 1993-1997; Senior Vice
Age: 56 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 and
Tax-Free Fund For Utah since 1997;
Vice President of Churchill Cash
Reserves Trust 1995 to 2001;
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.
Emily C. Van Voorhis Vice President of Tax-Free Fund of
Vice President Colorado and of Aquila Rocky Mountain
8 Inverness Drive East Equity Fund since 2000;
Suite 130 Pension Consultant of Metlife,Inc., March-June 2000;
Englewood, CO 80112 Retirement Plans training specialist of
Age: 32 Oppenheimer Funds, Inc., 1998-2000;
corporate training consultant
and benefits services administrator,
Merrill, Lynch & Co., 1994-1998.
Jori Everitt Assistant Vice President of Tax-Free Fund of
Assistant Vice Colorado and Aquila Rocky Mountain Equity Fund
President since 2001; Financial Advisor of Morgan Stanley
8 Inverness Drive East Dean Witter, 1998-2000; Associate Financial Consultant,
Suite 130 Merrill Lynch,Pierce, Fenner & Smith, 1995-1998.
Englewood,CO 80112
Age: 28
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, NY formerly Treasurer of the predecessor of
10017 Capital Cash Management Trust; Treasurer
Age: 76 and Director of STCM Management Company,
Inc., since 1974; Chief Financial Officer of the
Manager since 1984
and of the Distributor, 1985-2000.
Joseph P. DiMaggio Treasurer of the Aquila Money-Market,
Treasurer Bond and Equity Funds since 2001; Treasurer
380 Madison Avenue of Aquila Distributors, Inc. since 2000;
New York, NY 10017 Controller of Van Eck Global Funds, 1993-2000;
Age: 44 Mutual Fund Accounting Manager of Alliance
Capital Management L.P., 1985-1993.
Lori A Vindigni Assistant Vice President of Aquila Management
Assistant Treasurer Corporation since 1998, formerly Fund Accountant
380 Madison Avenue for the Aquila Group of Investment Companies
New York, NY since 1995; Staff Officer and Fund Accountant of
10017 Citibank Global Asset Management Group of
Age: 34 Investment Companies, 1994-1995; Fund Accounting
Supervisor of Dean Witter Group of Investment
Companies, 1990-1994.
Edward M. W. Hines Partner of Hollyer Brady Smith & Hines
Secretary LLP, attorneys, since 1989 and counsel,
551 Fifth Avenue 1987-1989; Secretary of the Aquila Money-Market,
New York, NY Bond and Equity Funds since 1982; Secretary
10176 of Trinity Liquid Assets Trust, 1982-1985 and
Age: 61 Trustee of that Trust, 1985-1986; Secretary of
Oxford Cash Management Fund, 1982-1988.
Robert W. Anderson Compliance Officer of Aquila Management
Assistant Secretary Corporation since 1998 and Assistant
380 Madison Avenue Secretary of the Aquila Money-Market Funds
New York, NY 10017 and the Aquila Bond and Equity Funds since 2000;
Age: 60 Consultant, The Wadsworth Group, 1995-1998;
Executive Vice President of
Sheffield Management Company
(investment adviser and distributor
of a mutual fund group), 1986-1995.
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, NY Market Funds since 1990; Vice President of
10017 the Manager since 1990; Investment
Age: 61 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, 2000, the Fund paid a total of $72,804 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 nominees for Trustee who
received compensation from the Fund or from other funds in the Aquilasm Group of
Funds during the Fund's fiscal year. None of such Trustees has any pension or
retirement benefits from the Fund or any of the other funds in the Aquila group.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Fund Group of Funds serves
Tucker H.
Adams $9,700 $12,200 2
Gary
Cornia $4,250 $9,700 2
John C.
Lucking $4,600 $14,750 2
Anne J.
Mills $8,500 $38,900 7
J. William
Weeks $8,850 $14,300 2
Class A Shares may be purchased without a sales charge by certain of the
Fund's Trustees and officers.
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, 2000, these funds had aggregate assets of
approximately $3.1 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 December 31, 2000 the Fund incurred
Management fees of $941,736.
During the fiscal year ended December 31, 2000, $90,796, was paid under
Part I of the Fund's Distribution Plan to Qualified Recipients with respect to
the Class A Shares, of which $4,356 was retained by the Distributor. With
respect to Class C Shares, during the same period $14,562 was paid under Part II
of the Plan and $4,854 was paid under the Shareholder Services Plan. Of these
total payments of $19,416, the Distributor received $10,528. All of such
payments were for compensation.
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. The shares of
the Distributor are owned 24% by Diana P. Herrmann, 72% by Mr. Herrmann and
other members of his immediate family, and the balance by current employees of
Aquila Management Corporation.
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 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 one meeting 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 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 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, 2001. Such selection is submitted to the shareholders for
ratification or rejection.
The firm has no direct or indirect financial interest in the Fund, the
Manager or the 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 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 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 your proxy card, telephone or internet vote entitles them to
vote, in accordance with their judgment on such matter or matters, except as
noted. 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.
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Tax-Free Fund of Colorado
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on May 31, 2001
PROXY STATEMENT
Aquilasm Group of Funds
TAX-FREE FUND OF COLORADO CLASS-A
PROXY FOR SHAREHOLDERS MEETING June 1, 2001
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of TAX-FREE FUND OF COLORADO (the "Fund) 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 Fund to be
held on Friday, June 1, 2001 at the Lawrence C. Phipps Memorial Conference
Center, University of Denver, 3400 Belcaro Drive, Denver, Colorado at 10:00 a.m.
local time, and at all adjournments thereof, and thereat to vote the shares held
in the name of the undersigned on the record date for said meeting on the
matters listed below. 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.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If you can
join us, please so indicate on the proxy card or e-mail us at
info@aquilafunds.com
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
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 instructions 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 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, you need not return the proxy card by mail.
Mail
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.
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 or e-mail
us at info@aquilafunds.com
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 CLASS-A
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) Tucker Hart Adams; 3) Gary C. Cornia; 4) Diana P.
Herrmann*; 5) John C. Lucking; 6) Anne J. Mills; 7) J. William Weeks
* 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.
________________
[bolded in printed form]
Management recommends a vote For all nominees listed above and For the
proposal listed below. The shares represented hereby will be voted as indicated
below or For if no choice is indicated
2. Action on selection of KPMG LLP
as independent auditors (Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
As to any other matter said proxies shall vote in accordance with their
best judgment.
Please indicate if you plan to attend one of the Shareholder Meetings. If
you mark one of the boxes below, you must return the proxy card by mail to have
this information recorded.
I plan to attend the annual meeting in Denver [__]
I plan to attend the outreach meeting in Fort Collins [__]
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)
Aquilasm Group of Funds
TAX-FREE FUND OF COLORADO CLASS-C
PROXY FOR SHAREHOLDERS MEETING June 1, 2001
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of TAX-FREE FUND OF COLORADO (the "Fund) 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 Fund to be
held on Friday, June 1, 2001 at the Lawrence C. Phipps Memorial Conference
Center, University of Denver, 3400 Belcaro Drive, Denver, Colorado at 10:00 a.m.
local time, and at all adjournments thereof, and thereat to vote the shares held
in the name of the undersigned on the record date for said meeting on the
matters listed below. 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.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If you can
join us, please so indicate on the proxy card or e-mail us at
info@aquilafunds.com
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
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 instructions 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 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, you need not return the proxy card by mail.
Mail
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.
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 or e-mail
us at info@aquilafunds.com
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 CLASS-C
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) Tucker Hart Adams; 3) Gary C. Cornia; 4) Diana P.
Herrmann*; 5) John C. Lucking; 6) Anne J. Mills; 7) J. William Weeks
* 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.
________________
[bolded in printed form]
Management recommends a vote For all nominees listed above and For the
proposal listed below. The shares represented hereby will be voted as indicated
below or For if no choice is indicated
2. Action on selection of KPMG LLP
as independent auditors (Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
As to any other matter said proxies shall vote in accordance with their
best judgment.
Please indicate if you plan to attend one of the Shareholder Meetings. If
you mark one of the boxes below, you must return the proxy card by mail to have
this information recorded.
I plan to attend the annual meeting in Denver [__]
I plan to attend the outreach meeting in Fort Collins [__]
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)
Aquilasm Group of Funds
TAX-FREE FUND OF COLORADO CLASS-Y
PROXY FOR SHAREHOLDERS MEETING June 1, 2001
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of TAX-FREE FUND OF COLORADO (the "Fund) 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 Fund to be
held on Friday, June 1, 2001 at the Lawrence C. Phipps Memorial Conference
Center, University of Denver, 3400 Belcaro Drive, Denver, Colorado at 10:00 a.m.
local time, and at all adjournments thereof, and thereat to vote the shares held
in the name of the undersigned on the record date for said meeting on the
matters listed below. 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.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of Shareholders. If you can
join us, please so indicate on the proxy card or e-mail us at
info@aquilafunds.com
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
Telephone
1-800-690-6903
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 instructions 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 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, you need not return the proxy card by mail.
Mail
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.
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 or e-mail
us at info@aquilafunds.com
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 CLASS-Y
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) Tucker Hart Adams; 3) Gary C. Cornia; 4) Diana P.
Herrmann*; 5) John C. Lucking; 6) Anne J. Mills; 7) J. William Weeks
* 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.
________________
[bolded in printed form]
Management recommends a vote For all nominees listed above and For the
proposal listed below. The shares represented hereby will be voted as indicated
below or For if no choice is indicated
2. Action on selection of KPMG LLP
as independent auditors (Proposal No.2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
As to any other matter said proxies shall vote in accordance with their
best judgment.
Please indicate if you plan to attend one of the Shareholder Meetings. If
you mark one of the boxes below, you must return the proxy card by mail to have
this information recorded.
I plan to attend the annual meeting in Denver [__]
I plan to attend the outreach meeting in Fort Collins [__]
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)
OOPS !
The enclosed proxy statement for Tax-Free Fund of Colorado inadvertently
contains an incorrect date for the Annual Meeting of Shareholders.
The correct date is Friday June 1, 2001
In order to save the Fund the expense of reprinting the proxy statement, we
are enclosing this card to alert you of the error. All other information remains
as is printed. The Meeting will be held at 10:00 a.m. at the Lawrence C. Phipps
Memorial Center.
Our apologies for this error.
TAX-FREE FUND OF COLORADO
Supplement to the Proxy Statement
Dated April 2, 2001
The following is added to the material under Proposal No. 2 (Ratification
or Rejection of Selection of Independent Auditors).
Description of fees paid during the fiscal year ended December 31, 2000 to the
Fund's independent auditors, KPMG LLP.
Audit Fees: $17,000
Financial Information
Systems Design and Implementation 0
All Other Fees $5,750
(Fees for preparation
of the Fund's tax
returns and review of Forms 1099
for the Fund's shareholders.)
KPMG LLP did not perform any services during the fiscal year for the Fund's
investment adviser (the "Manager") or any entity controlling, controlled by or
under common control with the Manager that provides services to the Fund.
The audit committee of the Fund's Board of Trustees, which consists of all of
the independent Trustees, has reviewed all services performed and fees charged
by KPMG LLP and has accepted that firm's representation that it is independent
in recommending re-appointment of KPMG LLP for the fiscal year ending 2001.
The date of this supplement is April 11, 2001