IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
AQUILA
CHURCHILL TAX-FREE FUND OF KENTUCKY
380 Madison Avenue, Suite 2300, New York, N.Y. 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
on April 26, 1996
TO SHAREHOLDERS OF THE FUND:
The purpose of this Notice is to advise you that an Annual
Meeting of the Shareholders of Aquila Churchill Tax-Free Fund of
Kentucky (the "Fund") will be held
Place: (a) at the JBSpeed Art Museum,
2035 South Third Street,
Louisville, Kentucky
Time: (b) on April 26, 1996 at 10:00 a.m. local time
Purposes: (c) for the following purposes:
(i) to elect nine 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 Peat Marwick LLP as the Fund's
independent auditors for the fiscal year ending
December 31, 1996 (Proposal No. 1); and
Please Note:
If you do not expect to attend the Meeting, you are requested to
indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying stamped envelope. To avoid
unnecessary expense to the Fund, your cooperation is requested in
mailing in your proxy 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 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 January 31, 1996 (the "record date").
Also, the number of shares held by you according to
such records at the close of business on the record
date determines the number of shares you may vote
at the Meeting (or any adjourned meeting or
meetings).
By Order of the Board of Trustees
EDWARD M. W. HINES
Secretary
March 8, 1996
(ii)
AQUILA
CHURCHILL TAX-FREE FUND OF KENTUCKY
380 Madison Avenue, Suite 2300, New York, New York 10017
PROXY STATEMENT
INTRODUCTION
The purpose of the Notice (the first two pages of this
document) is to advise you of the time, place and purposes of an
Annual Meeting of the Shareholders of Aquila Churchill Tax-Free
Fund of Kentucky (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 on
the enclosed proxy card.
This Notice and Proxy Statement are first being mailed on or
about March 8, 1996.
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-
872-5859 TOLL-FREE OR 212-697-6666.
The Fund's founder and administrator (the "Administrator") is
Aquila Management Corporation, 380 Madison Avenue, Suite 2300, New
York, NY 10017. The Fund's investment adviser is Banc One
Investment Advisors Corporation, 416 West Jefferson Street,
Louisville, KY 40202.
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 striking a line through the nominee's name
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
checking the appropriate box "For" or "Against" or instruct them
not to vote your shares on that proposal by checking the "Abstain"
box. If you return your signed proxy card and do not check any box
on the proposal, the proxy holders will vote your shares for the
proposal.
You may end the power of the proxy holders to vote your shares
after you have signed and returned your proxy card and before the
power is used by (i) so notifying the Fund in writing; (ii) signing
a new and different proxy card (if the Fund receives it before the
old one is used); or (iii) voting your shares in person or by your
duly appointed agent at the meeting. Brokers' shares held by them
in "street name" and not voted or marked as abstentions will not be
counted for purposes of determining a quorum.
The Fund is sending you this Notice and Proxy Statement in
connection with the solicitation by its Trustees of proxy cards
("proxies") to be used at the Annual Meeting to be held at the time
and place and for the purposes indicated in the Notice or any
adjourned meeting or meetings. The 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
these shares. The Fund will pay these firms for their out-of-pocket
expenses for doing so.
All shareholders of the Fund are entitled to vote at the
meeting. Each shareholder on the record date is entitled to one (1)
vote for each dollar (and a proportionate fractional vote for each
fraction of a dollar) of net asset value (determined as of the
record date) represented by shares held on the record date. The
Fund is the only operating series of Churchill Tax-Free Trust, a
Massachusetts business trust.
On the record date, the total number of shares outstanding for
the Fund was 21,620,751. Of the shares of the Fund outstanding on
the record date, BHC Securities, Inc, 2005 Market Street,
Philadelphia, PA 19103 held of record 1,731,875 shares (8.0%). On
the basis of information received from the holder 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 its outstanding
shares as of such date.
ELECTION OF TRUSTEES
At the Meeting, nine Trustees are to be elected. Whenever it
is stated in this Proxy Statement that a matter is to be acted on
at the Meeting, this means the Meeting held at the scheduled time
or any adjourned meeting or meetings.
Each Trustee elected will serve until the next annual meeting
or until his or her successor is duly elected. The nominees
selected by the Trustees are named in the table below. See
"Introduction" above for information as to how you can instruct the
proxy holders as to the voting of your shares as to the election of
Trustees.
Each of the nominees is presently a Trustee, and was
previously elected by the shareholders at the annual meeting of the
Fund held on April 6, 1995, except for Ms. Herrmann who was elected
by the Trustees to fill a vacancy. Each Trustee has been a Trustee
since the beginning of the Fund's operations in 1987 and was either
named as a Trustee in the original Declaration of Trust or was
named as a Trustee by such original Trustees, and was also elected
as a Trustee by the Fund's original sole shareholder, Aquila
Management Corporation, except for Mr. Nightingale who has been a
Trustee since 1993, Messrs. Christopher and Mason, who have been
Trustees since 1992 and Ms. Herrmann, who became a Trustee in 1995.
The Trustees and officers as a group own less than 1% of the
outstanding shares of the Fund. 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
as a Director, officer and shareholder of the Distributor. Ms.
Herrmann is an interested person of the Fund as a member of his
immediate family. Ms. Leven is an interested person as a
beneficiary of a trust that owns shares of the parent company of
the Adviser. They are so designated by an asterisk.
Described in the following material are the name, positions
with the Fund, age as of January 31, 1996, and business experience
during at least the past five years (other than with the Fund) of
each nominee and all officers of the Fund.
Lacy B. Herrmann*, President and Chairman of the Board of Trustees,
Age: 66, Shares owned: 543 (including 367 shares held by the
Administrator)
Founder of the Fund and President and a Director of the
Administrator since 1984; Founder, President and Chairman of the
Board of Trustees of Hawaiian Tax-Free Trust since 1984, of Tax-
Free Trust of Arizona and Tax-Free Trust of Oregon since 1986, of
Tax-Free Fund of Colorado since 1987 and of Tax-Free Fund For Utah
and Narragansett Insured Tax-Free Income Fund since 1992, all of
which are tax-free municipal bond funds, and an equity fund, Aquila
Rocky Mountain Equity Fund since 1993, to all of which the
Administrator is administrator and which are referred to as the
"Bond and Equity Funds"; Chairman and President, Chief Executive
Officer (Chairman of the Board of Trustees and/or President) and
Trustee of Capital Cash Management Trust ("CCMT"), since 1981 and
Founder and executive officer (since 1974) of CCMT and its
predecessor; Founder, President and Chairman of the Board of
Trustees of Prime Cash Fund since 1982, of Short Term Asset
Reserves and Pacific Capital Cash Assets Trust since 1984, of
Churchill Cash Reserves Trust since 1985, of Pacific Capital Tax-
Free Cash Assets Trust and of Pacific Capital U.S. Treasuries Cash
Assets Trust since 1988 and of Cascades Cash Fund, 1989-1994, all
of which are money market funds to which the Administrator is
administrator and which are referred to as the "Money Funds"; Vice
President, a Director and Secretary since 1981 (formerly Treasurer)
of the Distributor, which is distributor (i.e., principal
underwriter) for the Money Funds and the Bond and Equity Funds;
President and a Director of STCM Management Company, Inc., Adviser
to CCMT; Chairman, President and a Director since 1984 of InCap
Management Corporation, formerly sub-adviser and administrator of
Prime Cash Fund and Short Term Asset Reserves; Director or Trustee
of the various Quest for Value Funds, a group of stock, bond and
money market mutual funds, since 1983; Director of Saratoga
Advantage Trust, a group of mutual funds, since 1994; Trustee of
Brown University since 1990; actively involved for many years in
leadership roles with university, school and charitable
organizations.
Thomas A. Christopher, Trustee, Age: 48, Shares owned: 963
Shareholder of Robinson, Hughes & Christopher, C.P.A.s, P.S.C.,
since 1977; President of A Good Place for Fun, Inc., a sports
facility, since 1987; active member of the American Institute of
Certified Public Accountants; Board of Directors of the Kentucky
Society of CPAs; Trustee of Churchill Cash Reserves Trust since
1985; presently active in leadership roles with various civic,
community and church organizations.
Douglas Dean, Trustee, Age: 46, Shares owned: 5,332
Founder and President of Dean, Dorton & Ford P.S.C., a public
accounting firm, since 1979; previously Staff Accountant, Tax
Supervisor and Tax Manager with Coopers & Lybrand, a public
accounting firm; Trustee of Trent Equity Fund, an equity mutual
fund, 1992-1994; Trustee of Churchill Cash Reserves Trust since
1995; Active as an officer and board member of various charitable
and community organizations.
Diana P. Herrmann*,Trustee, Age: 37, Shares owned: 468
Senior Vice President and Secretary and formerly Vice President of
the Administrator since 1986 and Director since 1984; Trustee of
Tax-Free Trust of Arizona and Tax-Free Trust of Oregon since 1994
and of Churchill Cash Reserves Trust since 1995; Vice President of
InCap Management Corporation since 1986 and Director since 1983;
Vice President and formerly Assistant Vice President of the Money
Funds since 1986; Assistant Vice President of Oxford Cash
Management Fund, 1986-1988; Assistant Vice President and formerly
Loan Officer of European American Bank, 1981-1986; daughter of the
Fund's President; Trustee of the Leopold Schepp Foundation
(academic scholarships) since 1995; actively involved in mutual
fund and trade associations and in college and other volunteer
organizations.
Ann R. Leven*, Trustee, Age: 55, Shares owned: 954
Treasurer of the National Gallery of Art, Washington, D.C., since
1994, Deputy Treasurer, 1990-1994; Treasurer of the Smithsonian
Institution, Washington, D.C., 1984-1990; President of ARL
Associates, strategic consultants, since 1983; Vice
President/Senior Corporate Planning Officer of The Chase Manhattan
Bank, N.A., 1979-1983; Treasurer of The Metropolitan Museum of Art,
1972-1979; Trustee of Short Term Asset Reserves, 1984-1993, of Tax-
Free Trust of Oregon since 1986, of Cascades Cash Fund, 1989-1994,
and of Churchill Cash Reserves Trust since 1995; Trustee of Oxford
Cash Management Fund, 1987-1988; Director of the Delaware Group of
mutual funds since 1989; Adjunct Professor at Columbia University
Graduate School of Business Administration since 1975; Trustee of
the American Red Cross Endowment Fund, 1985-1990; Member of the
Visiting Committee of Harvard Business School, 1979-1985; Member of
the Board of Overseers of The Amos Tuck School, Dartmouth College,
1978-1984; Staff Director of the Presidential Task Force on the
Arts and Humanities, 1981; Director of Alliance Capital Reserves
Fund, a money market fund, 1978-1979.
Theodore T. Mason, Trustee, Age: 60, Shares owned: 594 (Held in
joint tenancy with his wife.)
Managing Director of EastWind Power Partners, Ltd. since 1994;
Director of Cogeneration Development of Willamette Industries,
Inc., a forest products company, 1991-1993; Vice President of
Corporate Development of Penntech Papers, Inc., 1978-1991; Vice
President of Capital Projects for the same company, 1977-1978; Vice
Chairman of the Board of Trustees of CCMT since 1981; Trustee and
Vice President, 1976-1981, and formerly Director of its
predecessor; Director of STCM Management Company, Inc.; Vice
Chairman of the Board of Trustees and Trustee of Prime Cash Fund
since 1982; Trustee of Short Term Asset Reserves, 1984-1986 and
since 1989, of Hawaiian Tax-Free Trust and Pacific Capital Cash
Assets Trust since 1984, of Churchill Cash Reserves Trust since
1985 and of Pacific Capital Tax-Free Cash Assets Trust and Pacific
Capital U.S. Treasuries Cash Assets Trust since 1988; Vice
President and Trustee of Oxford Cash Management Fund, 1983-1989;
Vice President of Trinity Liquid Assets Trust, 1983-1985; President
and Director of Ted Mason Venture Associates, Inc., a venture
capital consulting firm, 1972-1980; Advisor to the Commander, U.S.
Maritime Defense Zone Atlantic, 1984-1988; National Vice President,
Surface/Subsurface, Naval Reserve Association, 1985-1987; National
Vice President, Budget and Finance, for the same Association, 1983-
1985; Commanding Officer of four Naval Reserve Units, 1974-1985;
Captain, USNR, 1978-1988.
Anne J. Mills, Trustee, Age: 57, Shares owned: 930
Vice President for Business Affairs of Ottawa University since
1992; Director of Customer Fulfillment, U.S. Marketing and Services
Group, IBM Corporation, 1990-1991; Director of Business
Requirements of that Group, 1988-1990; Director of Phase Management
of that Group, 1985-1988; Budget Review Officer of the American
Baptist Churches/USA since 1994; Director of the American Baptist
Foundation since 1985; Trustee of Brown University; Trustee of
Churchill Cash Reserves Trust since 1985, of Tax-Free Trust of
Arizona since 1986, of Tax-Free Fund of Colorado and Capital Cash
Management Trust since 1987 and of Tax-Free Fund For Utah since
1994.
William J. Nightingale, Trustee, Age: 66, Shares owned: 526
Chairman and founder (1975) and Senior Advisor since 1995 of
Nightingale & Associates, Inc., a general management consulting
firm focusing on interim management, divestitures, turnaround of
troubled companies, corporate restructuring and financial advisory
services; President, Chief Executive Officer and Director of Bali
Company, Inc., a manufacturer of women's apparel, which became a
subsidiary of Hanes Corporation, 1970-1975; prior to that, Vice
President and Chief Financial Officer of Hanes Corporation after
being Vice President-Corporate Development and Planning of that
company, 1968-1970; formerly Senior Associate of Booz, Allen &
Hamilton, management consultants, after having been Marketing
Manager with General Mills, Inc.; Trustee of Narragansett Insured
Tax-Free Income Fund since 1992 and of Churchill Cash Reserves
Trust since 1993; Director of Spreckels Industries, Inc. (beet
sugar processing and various industrial manufacturing companies);
Glasstech Inc. (glass bending equipment and engineering) and Ring's
End, Inc. (retail lumber and building supply chain).
James R. Ramsey, Trustee, Age: 47, Shares owned: 1,279 (Held in
joint tenancy with his wife.)
Vice President for Finance and Administration, and Professor of
Economics, Western Kentucky University; Trustee of Churchill Cash
Reserves Trust since 1995; Chief State Economist and Executive
Director of the Office for Financial Management and Economic
Analysis of the Commonwealth of Kentucky, 1981-1992; Adjunct
Professor of the University of Kentucky; Assistant Dean and
Director of Public Administration of Loyola University in New
Orleans, Louisiana, 1978-1981; Assistant Professor of Public
Finance and Administration of Loyola University, 1977-1981;
Assistant Professor of Economics, Middle Tennessee State
University, 1975-1977; published numerous articles, monographs and
working papers on economics and fiscal management.
Jerry G. McGrew, Senior Vice President, Age: 51
Vice President, 1987-1994; Vice President of Tax-Free Fund For Utah
since 1992; Vice President of Churchill Cash Reserves Trust since
1995; Registered Principal since 1993; Vice President of Aquila
Distributors, Inc. since 1993; Registered Representative of J.J.B.
Hilliard, W.L. Lyons Inc., 1983-1987; Account Manager with IBM
Corporation, 1967-1981; Gubernatorial appointee, Kentucky Financial
Institutions Board, since 1993; Chairman, Total Quality Management
for Small Business, 1990-1994; President of Elizabethtown/Hardin
County, Kentucky, Chamber of Commerce, 1989-1991; President of
Elizabethtown Country Club, 1983-1985.
William C. Wallace, Vice President, Age: 60
Vice President of Capital Cash Management Trust and Pacific Capital
Cash Assets Trust since 1984; Senior Vice President of Hawaiian
Tax-Free Trust since 1985 and Vice President, 1984-1985; Senior
Vice President of Tax-Free Trust of Arizona since 1989 and Vice
President, 1986-1988; Vice President of Tax-Free Trust of Oregon
since 1986, of Tax-Free Fund of Colorado since 1987, of Pacific
Capital Tax-Free Cash Assets Trust and Pacific Capital U.S.
Treasuries Cash Assets Trust since 1988 and of Narragansett Insured
Tax-Free Income Fund since 1992; Secretary and Director of STCM
Management Company, Inc. since 1974; President of the Distributor
since 1995 and formerly Vice President of the Distributor, 1986-
1992; Member of the Panel of Arbitrators, American Arbitration
Association, since 1978; Assistant Vice President, American Stock
Exchange, Market Development Division, and Director of Marketing,
American Gold Coin Exchange, a subsidiary of the American Stock
Exchange, 1976-1984.
L. Michele Crutcher, Assistant Vice President, Age: 31
Registered Representative of Aquila Distributors, Inc. since 1995;
Investment Broker, 1990-1994; Sales Assistant, 1984-1990, J.J.B.
Hilliard, W.L. Lyons, Inc.; active in Elizabethtown Emmaus
Community, United Way of Hardin County, Elizabethtown Junior
Women's Club, Big Brothers/Big Sisters, and Fund for the Arts.
Rose F. Marotta, Chief Financial Officer, Age: 71
Chief Financial Officer of the Money Funds and the Bond and Equity
Funds since 1991; Treasurer of the Money Funds and the Bond and
Equity Funds, 1981-1991; formerly Treasurer of the predecessor of
CCMT; Treasurer and Director of STCM Management Company, Inc.,
since 1974; Treasurer of Trinity Liquid Assets Trust, 1982-1986 and
of Oxford Cash Management Fund, 1982-1988; Treasurer of InCap
Management Corporation since 1982, of the Administrator since 1984
and of the Distributor since 1985.
Richard F. West, Treasurer, Age: 60
Treasurer of the Money Funds and the Bond and Equity Funds and of
Aquila Distributors, Inc. since 1992; Associate Director of Furman
Selz Incorporated, 1991-1992; Vice President of Scudder, Stevens &
Clark, Inc. and Treasurer of Scudder Institutional Funds, 1989-
1991; Vice President of Lazard Freres Institutional Funds Group,
Treasurer of Lazard Freres Group of Investment Companies and HT
Insight Funds, Inc., 1986-1988; Vice President of Lehman Management
Co., Inc. and Assistant Treasurer of Lehman Money Market Funds,
1981-1985; Controller of Seligman Group of Investment Companies,
1960-1980.
Edward M. W. Hines, Secretary, Age: 56
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines & Mone
LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary of the
Money Funds and the Bond and Equity Funds since 1982; Secretary of
Trinity Liquid Assets Trust, 1982-1985 and Trustee of that Trust,
1985-1986; Secretary of Oxford Cash Management Fund, 1982-1988.
John M. Herndon, Assistant Secretary, Age: 56
Assistant Secretary of the Money Funds and the Bond and Equity
Funds since 1995; Vice President of the Money Funds since 1990;
Vice President of the Administrator since 1990; Investment Services
Consultant and Bank Services Executive of Wright Investors'
Service, a registered investment adviser, 1983-1989; Member of the
American Finance Association, the Western Finance Association and
the Society of Quantitative Analysts.
Patricia A. Craven, Assistant Secretary & Compliance Officer, Age:
29
Assistant Secretary of the Money Funds and the Bond and Equity
Funds since 1995; Counsel to the Administrator and the Distributor
since 1995; formerly a Legal Associate for Oppenheimer Management
Corporation, 1993-1995.
Compensation of Trustees
The Fund does not pay fees to Trustees affiliated with the
Administrator or to any of the Fund's officers. During the fiscal
year ended December 31, 1995, the Fund paid $93,491 in fees and
reimbursement of expenses to its other 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 an equity
fund. 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.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Fund Group now serves
Thomas A.
Christopher $7,737 $13,335 2
Douglas
Dean $7,973 $9,373 2
Ann R.
Leven $7,016 $14,100 3
Theodore T.
Mason $6,899 $37,531 8
Anne J.
Mills $8,677 $29,684 6
William J.
Nightingale $7,010 $14,713 3
James R.
Ramsey $8,500 $10,386 2
The Fund's Administrator is administrator to the Aquilasm
Group of Funds which consists of tax-free municipal bond funds
money market funds and an equity fund. As of December 31, 1995,
these funds had aggregate assets of approximately $2.7 billion, of
which approximately $1.9 billion consisted of assets of the tax-
free municipal bond funds. The Administrator is controlled by Mr.
Lacy B. Herrmann, through share ownership directly, through a trust
and by his wife. From January 1, 1995, through September 10, 1995,
the Fund paid or accrued $336,044 in advisory fees to its former
adviser under a former advisory agreement. From September 11, 1995
through December 31, 1995 the Fund paid or accrued $102,734 in
advisory fees to the Adviser. During the year ended December 31,
1995, fees of $515,895 were paid or accrued to the Administrator
under a former administration agreement in effect until September
10, 1995 and under the Administration Agreement in effect
thereafter.
The Distributor currently handles the distribution of the
shares of thirteen funds (five money market funds, seven tax-free
municipal bond funds and an equity fund) 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. All of
the shares of the Distributor are owned by Mr. Herrmann.
At the date of this proxy statement, there is a proposed
transaction whereby all of the shares of the Distributor, which are
currently owned by Mr. Herrmann, will be owned by certain directors
and/or officers of the Administrator and/or the Distributor
including Mr. Herrmann. In anticipation of this transaction, the
Board of Trustees, including a majority of the independent
Trustees, has approved a new Distribution Agreement for the Fund
with no material change from the currently effective Distribution
Agreement.
Other Information on Trustees
The Trustees have appointed an Audit Committee consisting of
all of the Trustees (the "Independent Trustees") who are not
"interested persons," as that term is defined in the 1940 Act. 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 six meetings. All Trustees were present at least 75%
of the total number of Board and (if such Trustee was a member of
that Committee) Audit Committee meetings.
RATIFICATION OR REJECTION OF
SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 1)
KPMG Peat Marwick LLP is being recommended as the Fund's
independent auditors for the fiscal year ending December 31,
1996; such selection is submitted to the shareholders for
ratification or rejection.
The firm has no direct or indirect financial interest in the
Fund, the Fund's Adviser or the Fund's Administrator. It is
expected that representatives of the firm will not be present at
the meeting but will be available should any matter arise
requiring their presence.
RECEIPT OF
SHAREHOLDER PROPOSALS
Under the proxy rules of the Securities and Exchange
Commission, shareholder proposals meeting tests contained in
those rules may, under certain conditions, be included in the
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 entitle them to vote in accordance
with their judgment on such matter or matters. That is, by
signing and returning your proxy card, you give the proxy holders
discretionary authority as to any such matter or matters.
AQUILA
CHURCHILL TAX-FREE FUND OF KENTUCKY
PROXY FOR SHAREHOLDERS MEETING APRIL 26, 1996
PROXY SOLICITED ON BEHALF OF THE TRUSTEES
The undersigned shareholder of AQUILA CHURCHILL TAX-FREE
FUND OF KENTUCKY (the "Fund") does hereby appoint LACY B.
HERRMANN and EDWARD M. W. HINES, or either of them, as attorneys
and proxies of the undersigned, with full power of substitution,
to attend the Annual Meeting of Shareholders of the Fund to be
held on April 26, 1996, at JBSpeed Art Museum, 2035 South Third
Street, Louisville, Kentucky at 10:00 a.m. local time, and at all
adjournments thereof, and thereat to vote the shares held in the
name of the undersigned on the record date for said meeting on
the matters listed below.
Please mark your proxy, date and sign it below and return it
promptly in the accompanying envelope which requires no postage
if mailed in the United States.
MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW
AND FOR THE PROPOSALS LISTED BELOW. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED BELOW OR FOR IF NO CHOICE IS
INDICATED.
As to any other matter said attorneys shall vote in
accordance with their best judgment.
Please indicate your vote by an "X" in the appropriate box
below.
Election of Trustees---.
__
[__] FOR all nominees listed below
__
[__] VOTE WITHHELD for all nominees listed
below
(Instructions: To withhold authority to vote for any one or more
of the nominees, strike a line through the name of that nominee
or the names of such nominees in the list below.)
LACY B. HERRMANN, THOMAS A. CHRISTOPHER, DOUGLAS DEAN,
DIANA P. HERRMANN, ANN R. LEVEN, THEODORE T. MASON,
ANNE J. MILLS, WILLIAM J. NIGHTINGALE, JAMES R. RAMSEY
Action on selection of KPMG Peat
Marwick LLP as independent auditors
__ __ __
(Proposal No. 1) FOR [__] AGAINST [__] ABSTAIN [__]
Dated: ____________ ______, 1996
Month Day
__________________________________
SIGNATURE(S)
__________________________________
SIGNATURE(S)
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing
as a custodian, attorney, executor, administrator, trustee,
guardian, etc., please sign your full title as such. Joint
owners should each sign.