AQUILA TAX-FREE FUND FOR UTAH 380 Madison Avenue, Suite 2300, New York, N.Y. 10017 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD on October 12, 1998 TO OUR SHAREHOLDERS: The purpose of this Notice is to advise you that an Annual Meeting of the Shareholders of Tax-Free Fund For Utah (the "Fund") will be held: Place: (a) at the Inn at Temple Square 71 West South Temple Salt Lake City, Utah Time: (b) on October 12, 1998 at 9:00 a.m., local time; Purposes: (c) for the following purposes: (i) to elect six 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 June 30, 1999 (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 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 July 31, 1998 (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 August 18, 1998 AQUILA Tax-Free Fund For Utah 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 For Utah (the "Fund"). The purpose of this proxy statement (all the remainder 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. 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 800-882-4937 toll-free or 212-697-6666. The Fund's organizer 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") is Zions First National Bank, One South Main Street, Salt Lake City, Utah 84111. This Notice and Proxy Statement are first being mailed on or about August 18, 1998. 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 checking the appropriate box "For" or "Against" or instruct them not to vote your shares on the 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. Shares held by brokers in "street name" and not voted or marked as abstentions will not be counted for purposes of determining a quorum. You may end the power of the proxy holders to vote your shares, after you have signed and returned your proxy card but 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 at the meeting in person or by your duly appointed agent. 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. On the record date, the Fund had three classes of shares outstanding. All shareholders of the Fund of all classes 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, $10.21; Class C Shares, $10.20; and Class Y Shares, $10.21. 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 and entitled to vote was 3,305,888. On the record date BHC Securities, Inc., 100 North Street, Philadelphia, PA held of record 503,613 Class A Shares (16.9% of the class) and 9,912 Class C Shares (6.8% of the class); Merrill Lynch, Pierce, Fenner & Smith, Inc., P.O. Box 30561, New Brunswick, NJ, held of record 486,944 Class A Shares (16.4% of the class) and 40,905 Class C Shares (28.1% of the class); Dean Witter, Church Street Station Box 250, New York, NY held 47,907 Class C Shares in four accounts (32.8% of the class); a nominee of First Security Bank of Utah held of record 194,062 Class Y Shares (99.9% 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 its outstanding shares as of such date. ELECTION OF TRUSTEES At the Meeting, six 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 each was elected by the shareholders, except for Ms. Herrmann, who was elected by the Trustees in 1997 to fill a vacancy. Except for Mr. Cornia, Ms. Herrmann and Ms. Mills, each current Trustee 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. Mr. Cornia was elected by the shareholders in October, 1993, and Ms. Mills was elected by the shareholders in October, 1994. 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 the Manager and a shareholder 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. Described in the following material are the name, positions with the Fund, age as of July 31, 1998, 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*, President and Chairman of the Board of Trustees Age: 69, Shares Owned: 648 (1) Founder, President and Chairman of the Board of Aquila Management Corporation since 1984, the sponsoring organization and Manager or Administrator and/or Adviser or Sub-Adviser to the following open-end investment companies, and Founder, Chairman of the Board of Trustees, and President of each: Hawaiian Tax-Free Trust since 1984; Tax-Free Trust of Arizona since 1986; Tax-Free Trust of Oregon since 1986; Tax-Free Fund of Colorado since 1987; Churchill Tax-Free Fund of Kentucky since 1987; and Narragansett Insured Tax-Free Income Fund since 1992; each of which is a tax- free municipal bond fund, and two equity funds, Aquila Rocky Mountain Equity Fund since 1993 and Aquila Cascadia Equity Fund, since 1996, which, together with this Fund are called the Aquila Bond and Equity Funds; Pacific Capital Cash Assets Trust since 1984; Churchill Cash Reserves Trust since 1985; Pacific Capital U.S. Government Securities Cash Asset Trust since 1988; Pacific Capital Tax-Free Cash Assets Trust since 1988; each of which is a money market fund, and together with Capital Cash Management Trust ("CCMT") are called the Aquila Money-Market Funds; Vice President and Director, and formerly Secretary, of Aquila Distributors, Inc. since 1981, distributor of the above funds; President and Chairman of the Board of Trustees of CCMT, a money market fund, since 1981, and an Officer and Trustee/Director of its predecessors since 1974; Chairman of the Board of Trustees and President of Prime Cash Fund (which is inactive) since 1982 and of Short Term Asset Reserves 1984-1996; President and a Director of STCM Management Company, Inc., sponsor and sub- adviser to CCMT; Chairman, President, and a Director since 1984 of InCap Management Corporation, formerly sub-adviser and administrator of Prime Cash Fund and Short Term Asset Reserves, and Founder and Chairman of several other money market funds; Director or Trustee of OCC Cash Reserves, Inc. 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) 528 Class A Shares and 120 Class Y Shares held of record by the Manager. Gary C. Cornia, Trustee, Age: 50, Shares Owned: 125 (2) Professor and Associate Dean of the Marriott School of Management, Brigham Young University, since 1991; Associate Professor, 1985-1991; 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. (2) Held jointly with his wife. William L. Ensign, Trustee, Age: 69, Shares Owned: 628 Planning and Architectural Consultant; Acting Architect of the United States Capital 1995-1997; Assistant Architect of the United States Capital 1980-1995; previously President and CEO McLeod Ferrara Ensign, an international planning and design firm based in Washington DC; Fellow and former Director of the American Institute of Architects; District of Columbia Zoning Commissioner 1989-1997; member, U.S. Capitol Police Board 1995- 1997, National Advisory Council on Historic Preservation 1989- 1997, National Capital Memorial Commission 1989-1997; Acting Director of the U.S. Botanic Garden 1995-1997; Trustee, National Building Museum 1995-1997; Trustee of Tax-Free Trust of Arizona since 1986; Trustee of Oxford Cash Management Fund, 1983-1989. Diana P. Herrmann*, Trustee, Vice President, Age: 40, Shares Owned: 209 Trustee of Tax-Free Trust of Arizona and Tax-Free Trust of Oregon since 1994, of Churchill Tax-Free Fund of Kentucky and Churchill Cash Reserves Trust since 1995, of Aquila Cascadia Equity Fund since 1996 and of Aquila Rocky Mountain Equity Fund and Capital Cash Management Trust since 1997; President and Chief Operating Officer of the Manager since 1997; Senior Vice President and Secretary, and formerly Vice President, of the Manager since 1986 and Director since 1984; Senior Vice President or Vice President and formerly Assistant Vice President of the Aquila Money-Market Funds since 1986; Senior Vice President or Vice President of the Aquila Bond and Equity Funds since 1997; Vice President of InCap Management Corporation since 1986 and Director since 1983; Assistant Vice President of Oxford Cash Management Fund, 1986- 1988 and Prime Cash Fund 1986-1996; 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. Anne J. Mills, Trustee, Age: 59, Shares Owned: 131 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, 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 and Capital Cash Management Trust since 1987. R. Thayne Robson, Trustee, Age: 69, Shares Owned: 130 Director of the Bureau of Economic and Business Research, Professor of Management, and Research Professor of Economics at the University of Utah since 1978; Trustee of Aquila Rocky Mountain Equity Fund since 1993; Director of the Alliance of Universities for Democracy since 1990; Trustee of the Salt Lake Convention and Visitors Bureau since 1984; Member of Utah Governor's Economic Coordinating Committee since 1982; Member of the Association for University Business and Economic Research since 1985; Director of ARUP (a medical test laboratory) since 1988; Director of Western Mortgage since 1989; Director of the Utah Economic Development Corporation since 1985; Director of the Salt Lake Downtown Alliance since 1991; Trustee of Crossroads Research Institute since 1986. Jerry G. McGrew, Senior Vice President, Age: 54 Senior Vice President of Aquila Rocky Mountain Equity Fund since 1997; Senior Vice President of Churchill Tax-Free Fund of Kentucky since 1994, Vice President since 1987; Senior Vice President of Tax-Free Fund of Colorado since 1997; Vice President of Churchill Cash Reserves Trust since 1995; Registered Principal since 1993; Vice President since 1993 and currently Acting President of Aquila Distributors, Inc.; 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. Kimball L. Young, Senior Vice President, Age: 51 Co-Founder of Lewis Young Robertson & Burningham, Inc., an NASD licensed broker-dealer providing public finance services to Utah local governments 1995-present. Formerly Senior Vice President- Public Finance, Kemper Securities Inc., Salt Lake City, Utah. Stephen J. Caridi, Vice President, Age: 37 Vice President of the Distributor since 1995, Assistant Vice President, 1988-1995, Marketing Associate, 1986-1988; Vice President of Narragansett Insured Tax-Free Income Fund since 1996; Mutual Funds Coordinator of Prudential Bache Securities, 1984-1986; Account Representative of Astoria Federal Savings and Loan Association, 1979-1984. Rose F. Marotta, Chief Financial Officer, Age: 74 Chief Financial Officer of the Aquila Money-Market Funds and the Aquila Bond and Equity Funds since 1991 and Treasurer, 1981-1991; formerly Treasurer of the predecessor of CCMT; Treasurer and Director of STCM Management Company, Inc., since 1974; Treasurer of Trinity Liquid Assets Trust, 1982-1986 and of Oxford Cash Management Fund, 1982-1988; Treasurer of InCap Management Corporation since 1982, of the Manager since 1984 and of the Distributor since 1985. Richard F. West, Treasurer, Age: 62 Treasurer of the Aquila Money-Market Funds and the Aquila Bond and Equity Funds and of Aquila Distributors, Inc. since 1992; Associate Director of Furman Selz Incorporated, 1991-1992; Vice President of Scudder, Stevens & Clark, Inc. and Treasurer of Scudder Institutional Funds, 1989-1991; Vice President of Lazard Freres Institutional Funds Group, Treasurer of Lazard Freres Group of Investment Companies and HT Insight Funds, Inc., 1986- 1988; Vice President of Lehman Management Co., Inc. and Assistant Treasurer of Lehman Money Market Funds, 1981-1985; Controller of Seligman Group of Investment Companies, 1960-1980. Edward M. W. Hines, Secretary, Age: 58 Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines & Mone LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary of the Aquila Money-Market Funds and the Aquila Bond and Equity Funds since 1982; Secretary of Trinity Liquid Assets Trust, 1982- 1985 and Trustee of that Trust, 1985-1986; Secretary of Oxford Cash Management Fund, 1982-1988. John M. Herndon, Assistant Secretary, Age: 58 Assistant Secretary of the Aquila Money-Market Funds and the Aquila Bond and Equity Funds since 1995 and Vice President of the Aquila Money-Market Funds since 1990; Vice President of the Manager since 1990; Investment Services Consultant and Bank Services Executive of Wright Investors' Service, a registered investment adviser, 1983-1989; Member of the American Finance Association, the Western Finance Association and the Society of Quantitative Analysts. Patricia A. Craven, Assistant Secretary & Compliance Officer, Age: 32 Assistant Secretary of the Aquila Money-Market Funds and the Aquila Bond and Equity Funds since 1995; Counsel to the Manager and the Distributor since 1995; Secretary of the Distributor since 1997; formerly a Legal Associate for Oppenheimer Management Corporation, 1993-1995. Compensation of Trustees The Fund does not pay fees to Trustees affiliated with the Manager or to any of the Fund's officers. During the fiscal year ended June 30, 1998, the Fund paid $28,746 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 two 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. Compensation Number of from all boards on Compensation funds in the which the from the Aquilasm Trustee Name Fund Group now serves Gary C. Cornia $3,377 $3,377 1 William L. Ensign $3,594 $13,928 2 Anne J. Mills $3,263 $33,911 6 R. Thayne Robson $3,204 $4,879 2 The 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 June 30, 1998, these funds had aggregate assets of approximately $3.0 billion, of which approximately $1.9 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. For the Fund's fiscal year ended June 30, 1998 fees of $154,372 and $135,847, respectively, were paid and/or accrued to the Manager and to the Fund's former sub-adviser, all of which were waived. In addition, the Manager voluntarily agreed to reimburse the Fund for other expenses during this period in the amount of $157,610, of which $144,245 was paid prior to June 30, 1998 and $13,365 was paid in early July, 1998. 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 75% by Mr. Herrmann and 25% by Diana P. Herrmann. During the fiscal year ended June 30, 1998, $58,192 was paid under the Fund's Distribution Plan to Qualified Recipients with respect to Class A Shares, of which $1,871 was retained by the Distributor. All of such payments were for compensation. During the Fund's fiscal year ended June 30, 1998, under the Plan and under the Fund's Shareholder Services Plan, $8,223 was paid with respect to the Fund's Class C Shares of which $6,404 was retained by the Distributor. All of such payments were for compensation. 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 and Ms. Herrmann, will be owned by certain directors and/or officers of the Manager and/or the Distributor including Mr. Herrmann and Ms. Herrmann. 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 Peat Marwick 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 June 30, 1999. 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 Manager or the Fund's Sub-Adviser. It is expected that representatives of the firm not will 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 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. TAX-FREE FUND FOR UTAH PROXY FOR SHAREHOLDERS MEETING OCTOBER 12, 1998 PROXY SOLICITED ON BEHALF OF THE TRUSTEES The undersigned shareholder of TAX-FREE FUND FOR UTAH (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 Tax-Free Fund For Utah, to be held on October 12, 1998, at the Inn at Temple Square, Salt Lake City, Utah at 9:00 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 proposal 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. Election of Trustees __ [__] 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. --------------- 1) LACY B. HERRMANN; 2) GARY C. CORNIA; 3) WILLIAM L. ENSIGN; 4) DIANA P.HERRMANN; 5) ANNE J. MILLS; 6) R. THAYNE ROBSON; Vote On Proposal Ratification of selection of KPMG Peat Marwick LLP as independent auditors (Proposal No.1 in Proxy Statement) __ __ __ FOR [__] AGAINST [__] ABSTAIN [__] Please check here if planning to attend the Annual Meeting of Shareholders. __ [__] 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. __________________________________ Signature (PLEASE SIGN WITHIN BOX) Date __________________________________ Signature (Joint Owners) Date