File Nos. 33-72212 and 811-8168
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec.240.14a-12
AQUILA ROCKY MOUNTAIN EQUITY FUND
(Exact Name of Registrant as Specified in Charter)
380 Madison Avenue, Suite 2300
New York, New York 10017
(Address of Principal Executive Offices)
(212) 697-6666
(Registrant's Telephone Number)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
<page>
Important Notice Aquilasm
Please Read Immediately Group of Funds
AQUILA ROCKY MOUNTAIN EQUITY FUND
380 Madison Avenue, Suite 2300, New York, NY 10017
Notice of Special Meeting of
Shareholders to Be Held
on December 1, 2004
To Shareholders of the Fund:
The purpose of this Notice is to advise you that a Special Meeting of the
Shareholders of Aquila Rocky Mountain Equity Fund (the "Fund"), will be held:
Place: (a) at the offices of the Fund:
380 Madison Avenue
New York, New York;
Time: (b) on December 1, 2004
at 10:00 a.m. Eastern Standard 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 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 October 5, 2004 (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
October 27, 2004
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.
Aquila Rocky Mountain Equity Fund
380 Madison Avenue, Suite 2300, New York, NY 10017
Proxy Statement
Introduction
The purpose of the Notice preceding this Proxy Statement is to advise you
of the time, place and purposes of a Special Meeting of the Shareholders of
Aquila Rocky Mountain Equity Fund (the "Fund"). The purpose of this Proxy
Statement is to give you information on which you may base your decisions as to
the choices, if any, you make in voting.
The Fund's Manager (the "Manager") is Aquila Investment Management LLC, 380
Madison Avenue, Suite 2300, New York, NY 10017, a subsidiary of the Fund's
founder, Aquila Management Corporation. The Fund's principal underwriter (the
"Distributor") is Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New
York, NY 10017.
A copy of the Fund's most recent annual report will be sent to you without
charge upon written request to the Distributor, at the above address, or by
calling 800-437-1020 toll-free or 212-697-6666.
This Notice and Proxy Statement are first being mailed on or about October
27, 2004.
You should read this Proxy Statement prior to voting. If your shares are
registered in the name of your broker or someone other than yourself, you may
authorize that person to vote your shares. If your shares are registered in your
name, then you may vote in one of three ways:
(1) 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.
(2) 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.
(3) Internet Voting
To vote your shares by the Internet, please contact the Fund at the
Internet 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 provided or contacting the Fund's Internet address, both of which
are detailed on your proxy card, entering your control number and revoking your
previous vote.
Proxies for shares held by brokers in "street name" and not voted or marked
as abstentions will 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 proxies to be used at the Special 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, $25.55;
Class C Shares, $24.11; and Class Y Shares, $26.01. The meeting is expected to
act only upon matters that affect the Fund as a whole: the election of Trustees.
On the record date, the total number of shares outstanding for each class
of shares was as follows: Class A Shares, 464,760; Class C Shares, 86,082; and
Class Y Shares, 57,591.
On the record date, the following institutional 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 of the holder of Number of shares Percent of class
record
MLPF&S for the sole benefit of
its customers 131,493 Class A Shares 28.29%
4800 Deer Lake Drive East 45,013 Class C Shares 52.29%
Jacksonville, FL 4,224 Class Y Shares 7.33%
KPM Investment Management Inc.
10250 Regency Circle 46,324 Class Y Shares 80.44%
Omaha, NE
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 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 vote your shares in the election of Trustees.
The following material includes information about each nominee and each
officer of the Fund. All shares of the Fund listed as owned by the Trustees are
Class A Shares unless indicated otherwise. All of the nominees are presently
Trustees and were elected by the shareholders, except for Messrs. Cornia,
Gammage and Ryan. All nominees have consented to serve if elected.
Trustees(1)
and Officers
Number of
Positions Held Portfolios in Other Directorships
with Fund Complex Held by Trustee
Fund Overseen by (The position held is
Name, Address(2) and and Length of Principal Occupation(s) Trustee(4) a directorship unless
Date of Birth Service(3) During Past 5 Years indicated otherwise.)
Interested Trustees(5)
Lacy B. Herrmann Founder and Founder, Chief Executive Officer 7 Director or trustee, Pimco
New York, NY Chairman of and Chairman of the Board, Aquila Advisors VIT, Oppenheimer Quest
(05/12/29) the Board of Management Corporation, the Value Funds Group, Oppenheimer
Trustees since sponsoring organization and Small Cap Value Fund,
1993 parent of the Manager or Oppenheimer Midcap Fund, and
Administrator and/or Adviser or Oppenheimer Rochester Group of
Sub-Adviser to each fund of the Funds.
Aquilasm Group of Funds,(6)
Chairman and Chief Executive
Officer of the Manager or
Administrator and/or Adviser or
Sub-Adviser to each since 2004,
and Founder, Chairman of the
Board of Trustees, Trustee and
(currently or until 1998)
President of each since its
establishment, beginning in 1984,
except Chairman of the Board of
Trustees of Hawaiian Tax-Free
Trust, Pacific Capital Cash
Assets Trust, Pacific Capital
Tax-Free Cash Assets Trust and
Pacific Capital U.S. Government
Securities Cash Assets Trust
through 2003, Trustee until 2004
and Chairman of the Board,
Emeritus since 2004; Director of
the Distributor since 1981 and
formerly Vice President or
Secretary, 1981-1998; Trustee
Emeritus, Brown University and
the Hopkins School; active in
university, school and charitable
organizations.
Diana P. Herrmann Trustee since Vice Chair of Aquila Management 10 None
New York, NY 1997, Corporation, Founder of the
(02/25/58) President Aquilasm Group of Funds and
since 2002, parent of Aquila Investment
and Vice Chair Management LLC, Manager since
of the Board 2004, President and Chief
since 2003 Operating Officer since 1997, a
Director since 1984, Secretary
since 1986 and previously its
Executive Vice President, Senior
Vice President or Vice
President, 1986-1997; Chief
Executive Officer and Vice Chair
since 2004 and President, Chief
Operating Officer and Manager of
the Manager since 2003; Vice
Chair, President, Executive Vice
President or Senior Vice
President of funds in the
Aquilasm Group of Funds since
1986; Director of the
Distributor since 1997; trustee,
Reserve Money-Market Funds,
1999-2000 and Reserve Private
Equity Series, 1998-2000;
Governor, Investment Company
Institute and head of its Small
Funds Committee since 2004;
active in charitable and
volunteer organizations
Non-interested Trustees
Tucker Hart Adams Trustee since President, The Adams Group, 2 Director, Touch America,
Colorado Springs, 1993 Inc., an economic consulting Colorado Health Facilities
CO firm, since 1989; formerly Chief Authority and Mortgage Analysis
(01/11/38) Economist, United Banks of Computer Corp.
Colorado; currently or formerly
active with numerous
professional and community
organizations.
Arthur K. Carlson Trustee Retired; formerly Senior Vice 2 Advisory director of the
Paradise Valley, AZ since 1993 President and Manager, Trust Renaissance Companies
(01/08/22) Division of the Valley National
Bank of Arizona; past President,
New York Society of Security
Analysts; member, Phoenix
Society of Security Analysts;
former director, Financial
Analysts Federation; director,
Northern Arizona University
Foundation; currently or
formerly active with various
other professional and community
organizations.
Gary C. Cornia Trustee Director, Romney Institute of 3 None
Orem, UT 2002-2004 Public Management, Marriott
(06/24/48) School of Management, Brigham
Young University, 2004 -
present; Professor, Marriott
School of Management, 1980 -
present; Past President, the
National Tax Association; Chair
of the Executive Committee, the
International Center for Land
Policy Studies and Training
Institute, Taipei, Taiwan;
formerly Senior Visiting Fellow,
Lincoln Institute of Land
Policy, 2002-2003; Associate
Dean, Marriott School of
Management, Brigham Young
University, 1991-2000; Chair,
Utah Governor's Tax Review
Committee, 1993-2002; member,
Governor's Tax Review Committee
since 2003; Faculty Associate,
the Land Reform Training
Institute, Taipei, Taiwan and
The Lincoln Institute of Land
Policy, Cambridge, Massachusetts.
Grady Gammage, Jr. None Founding partner, Gammage & 1 None
Phoenix, AZ (10/01/51) Burnham, PLC, a law firm,
Phoenix, Arizona, since 1983;
director, Central Arizona Water
Conservation District, since
1995; director and Secretary,
Arizona State University
Foundation since 1998.
Cornelius T. Ryan Trustee since Founder and General Partner, 2 Director of Neuberger &
Westport, CT and 1996 Oxford Ventures Partners, a Berman Equity Funds.
Sun Valley, ID group of investment venture
(11/14/31) capital partnerships, since 1981
and Founder and General Partner,
Oxford Bioscience Partners, a
group of venture capital
partnerships focused on life
sciences, genomics, healthcare
information technology and
medical devices, since 1991.
Officers
Charles E. Executive Vice Executive Vice President of all N/A N/A
Childs, III President funds in the Aquilasm Group of
New York, NY since 2003 Funds and the Manager since
(04/01/57) 2003; Senior Vice President,
corporate development, formerly
Vice President, Assistant Vice
President and Associate of the
Manager's parent since 1987;
Senior Vice President, Vice
President or Assistant Vice
President of the Aquila
Money-Market Funds, 1988-2003.
Barbara S. Walchli Senior Vice Senior Vice President and N/A N/A
Phoenix, AZ President since Portfolio Manager of Aquila
(09/24/52) 1999 Rocky Mountain Equity Fund since
1999; Fund Co-manager, One Group
Large Company Growth Fund and
One Group Income Equity Fund,
Banc One Investment Advisors,
1996-1997; Director of Research,
Senior Vice President, First
Interstate Capital Management,
1995-1996; Investment Committee,
Arizona Community Foundation
since 1986; member, Institute of
Chartered Financial Analysts,
Association for Investment
Management and Research and the
Phoenix Society of Financial
Analysts; formerly Senior
Analyst, Banc One Investment
Advisors and Director of
Research, Valley National Bank.
Marie E. Aro Senior Vice Senior Vice President, Aquila N/A N/A
Denver, CO President Rocky Mountain Equity Fund, and
(02/10/55) since 2004 Vice President, Tax-Free Trust
of Arizona, since 2004; Vice
President, INVESCO Funds Group,
1998-2003; Vice President,
Aquila Distributors, Inc.,
1993-1997.
James M. McCullough Senior Vice Senior Vice President or Vice N/A N/A
Portland, OR (06/11/45) President President of Aquila Rocky
since 1999 Mountain Equity Fund and four
Aquila Bond Funds; Senior Vice
President of the Distributor
since 2000; Director of Fixed
Income Institutional Sales, CIBC
Oppenheimer & Co. Inc., Seattle,
WA, 1995-1999.
Jerry G. McGrew Senior Vice President of the Distributor N/A N/A
New York, NY (06/18/44) President since 1998, Registered Principal
since 1996 since 1993, Senior Vice
President, 1997-1998 and Vice
President, 1993-1997; Senior
Vice President, Aquila Rocky
Mountain Equity Fund and five
Aquila Bond Funds since 1995;
Vice President, Churchill Cash
Reserves Trust, 1995-2001.
Kimball L. Young Senior Vice Co-portfolio manager, Tax-Free N/A N/A
Salt Lake City, UT President since Fund For Utah since 2001;
(08/07/46) 1999 Co-founder, Lewis Young
Robertson & Burningham, Inc., a
NASD licensed broker/dealer
providing public finance
services to Utah local
governments, 1995-2001; Senior
Vice President of two Aquila
Bond Funds and Aquila Rocky
Mountain Equity Fund; formerly
Senior Vice President-Public
Finance, Kemper Securities Inc.,
Salt Lake City, Utah.
Christine L. Neimeth Vice President Vice President of Aquila Rocky N/A N/A
Portland, OR since 1999 Mountain Equity Fund and
(02/10/64) Tax-Free Trust of Oregon;
Management Information Systems
consultant, Hillcrest Ski and
Sport, 1997; Institutional
Municipal Bond Salesperson,
Pacific Crest Securities, 1996;
active in college alumni and
volunteer organizations.
Emily T. Rae Vice President Vice President of Aquila N/A N/A
Aurora, CO since 2002 Rocky Mountain Equity Fund
(03/02/74) and Tax-Free Fund of
Colorado since 2002;
investment analyst,
Colorado State Bank and
Trust, 2001-02; financial
analyst, J.P. Morgan,
2000-01, senior registered
associate, Kirkpatrick
Pettis, 1998-2000;
registered associate,
FBS Investments (now U.S.
Bancorp Piper Jaffray),
1997-98.
Alan R. Stockman Vice President Senior Vice President, Tax-Free N/A N/A
Scottsdale, AZ since 1999 Trust of Arizona since 2001,
(07/31/54) Vice President, 1999-2001; Vice
President, Aquila Rocky Mountain
Equity Fund since 1999; Bank
One, Commercial Client Services
representative, 1997-1999;
Trader and Financial Consultant,
National Bank of Arizona (Zions
Investment Securities Inc.),
Phoenix, Arizona 1996-1997.
Robert W. Anderson Chief Chief Compliance Officer since N/A N/A
New York, NY (08/23/40) Compliance 2004, Compliance Officer of the
Officer since Manager or its predecessor and
2004 and current parent since 1998 and
Assistant Assistant Secretary of the
Secretary Aquilasm Group of Funds since
since 2000 2000; Consultant, The Wadsworth
Group, 1995-1998.
Joseph P. DiMaggio Chief Chief Financial Officer of the N/A N/A
New York, NY Financial Aquilasm Group of Funds since
(11/06/56) Officer since 2003 and Treasurer since 2000;
2003 and Controller, Van Eck Global
Treasurer Funds, 1993-2000.
since 2000
Edward M. W. Hines Secretary Partner, Hollyer Brady Barrett & N/A N/A
New York, NY since 1993 Hines LLP, legal counsel to the
(12/16/39) Fund, since 1989; Secretary of
the Aquilasm Group of Funds.
John M. Herndon Assistant Assistant Secretary of the N/A N/A
New York, NY (12/17/39) Secretary Aquilasm Group of Funds since
since 1995 1995 and Vice President of the
three Aquila Money-Market Funds
since 1990; Vice President of
the Manager or its predecessor
and current parent since 1990.
Lori A. Vindigni Assistant Assistant Treasurer of the N/A N/A
New York, NY Treasurer since Aquilasm Group of Funds since
(11/02/66) 2000 2000; Assistant Vice President
of the Manager or its
predecessor and current parent
since 1998; Fund Accountant for
the Aquilasm Group of Funds,
1995-1998.
(1)The Fund's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free).
(2) The mailing address of each Trustee and officer is c/o Aquila Rocky Mountain
Equity Fund, 380 Madison Avenue, New York, NY 10017.
(3) Because the Fund does not hold annual meetings, each Trustee holds office
for an indeterminate term. The term of office of each officer is one year.
(4) Does not include funds that are currently inactive.
(5) Mr. Herrmann and Ms. Herrmann are interested persons of the Fund, as that
term is defined in the 1940 Act, as officers of the Fund and their affiliations
with both the Manager and the Distributor. Each is also an interested person as
a member of the immediate family of the other.
(6) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of
Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Bond Funds";
Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these
11 funds are called the "Aquilasm Group of Funds."
Securities Holdings of the Trustees
(as of 6/30/04)
Dollar Range of Aggregate Dollar Range of Ownership
Ownership in Aquilasm Rocky Mountain in Aquilasm Investment
Name of Trustee Equity Fund(1) Companies Overseen by Trustee(1)
Interested Trustees
Lacy B. Herrmann D E
Diana P. Herrmann B E
Non-interested Trustees
Tucker Hart Adams B B
Arthur K. Carlson C C
Gary C. Cornia D D
Grady Gammage, Jr. B(2) B
Cornelius T. Ryan C C
(1) A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. over $100,000
(2) As of October 15, 2004
None of the non-interested Trustees or their immediate family members holds
of record or beneficially any securities of the Manager or the Distributor.
The Fund does not currently pay fees to any of the Fund's officers or to
Trustees affiliated with the Manager. For its fiscal year ended December 31,
2003 the Fund paid a total of $19,923 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 11 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 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 from all Number of Boards
Compensation from the Funds in the Aquilasm on which the Trustee
Name Fund Group of Funds Serves
Tucker H. Adams, $3,000 $11,950 2
Arthur K. Carlson, $3,000 $13,000 2
Gary C. Cornia, $3,000 $25,750 3
Grady Gammage, Jr. 0 $9,500 1
Cornelius T. Ryan, $3,500 $14,250 2
Class A Shares may be purchased without a sales charge by the Fund's
Trustees and officers.
The Fund's Manager is a wholly-owned subsidiary of Aquila Management
Corporation ("AMC"), founder of each fund in the Aquilasm Group of Funds. As of
September 30, 2004 these funds had aggregate assets of approximately $4.0
billion, of which approximately $2.4 billion consisted of assets of the tax-free
municipal bond funds. AMC's address is the same as that of the Manager. AMC is
controlled by Mr. Lacy B. Herrmann, through share ownership directly, through
two trusts and by his wife. During the fiscal year ended December 31, 2003, the
Fund incurred Management fees of $136,670, all of which was waived.
During the fiscal year ended December 31, 2003, $17,210 was paid under Part
I of the Fund's Distribution Plan to Qualified Recipients with respect to the
Class A Shares, of which $2,054 was retained by the Distributor. With respect to
Class C Shares, during the same period $8,537 was paid under Part II of the Plan
and $2,846 was paid under the Shareholder Services Plan. Of these total payments
of $11,383, the Distributor retained $2,622. All of such payments were for
compensation.
The Distributor currently handles the distribution of the shares of the
funds in the Aquilasm Group of 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 Investment Management LLC.
Other Information on Trustees
The Trustees have appointed a standing Audit Committee consisting of all of
the Trustees who are "independent" and are not "interested persons" of the Fund,
as that term is defined in the 1940 Act. The members of the Audit Committee are
Tucker Hart Adams, Arthur K. Carlson and Cornelius T. Ryan. The Committee (i)
selects the Fund's independent registered public accounting firm (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. Selection of the independent registered
public accounting firm is also ratified by the Board of Trustees. The Audit
Committee held one meeting during the Fund's last fiscal year. The Board of
Trustees has adopted a written charter for the Audit Committee, a copy of which
is attached as an appendix to this Proxy Statement.
During the Fund's last fiscal year, the Board of Trustees held four
meetings. Each current Trustee was 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). The Board of Trustees does not have a nominating committee.
The Fund does not hold annual meetings.
The Fund has not yet formed a nominating committee nor adopted a nominating
committee charter. The Fund has a Trustee Retirement and Replacement Policy
which covers many of the issues facing any nominating committee, including
matters to be considered in connection with candidates for election to the Board
of Trustees. In accordance with regulatory requirements, the selection and
nomination of all independent Trustees has been committed to the independent
Trustees, and suggestions for new Trustees are provided from management and
other interested Trustees only upon request of the independent Trustees. The
Board expects to establish nominating committee policies and procedures before
the end of the year.
Shareholders may send communications to the Board of Trustees or to any
individual Trustee by mail addressed to the Board or such Trustee c/o Aquila
Investment Management LLC, 380 Madison Avenue, New York, NY 10017. All such
communications are sent directly to the members of the Board of Trustees.
Since the beginning of the Fund's most recently completed fiscal year, no
Trustee purchased or sold more than 1% of the shares of any class of the
Manager.
Vote Required
To be elected, each nominee must receive the affirmative votes of a
majority of the shares present.
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.
AQUILA ROCKY MOUNTAIN EQUITY FUND
AUDIT COMMITTEE CHARTER
September 5, 2003
1. The Audit Committee shall be composed entirely of independent Trustees.
2. The purposes of the Audit Committee are:
(a) to oversee the Fund's accounting and financial reporting policies.
(b) to oversee the quality and objectivity of the Fund's financial
statements and the independent audit thereof; and
(c) to act as a liaison between the Fund's independent auditors and the
full Board of Trustees.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, and the auditor's responsibility to plan and carry out a proper
audit and such other functions as deemed appropriate by the Audit
Committee.
3. To carry out its purposes, the Audit Committee shall have the following
duties and powers:
(a) to select, retain or terminate the auditors and, in connection
therewith, to evaluate the independence of the auditors, including
whether the auditors provide any consulting services to the manager,
and to receive the auditors' specific representations as to their
independence;
(b) to meet with the Fund's independent auditors, including private
meetings, as necessary (i) to review and approve the audit plan,
detailing the arrangements for and scope of the annual audit, any
special audits and any other services deemed appropriate; (ii) to
discuss any matters of concern relating to the Fund's financial
statements, including any adjustments to such statements recommended
by the auditors, or other results of said audit(s); (iii) to consider
the auditors' comments with respect to the Fund's financial policies,
procedures and internal accounting controls and management's responses
thereto; and (iv) to review the form of opinion the auditors propose
to render to the Board and shareholders;
(c) to consider the effect upon the Fund of any changes in accounting
principles or practices proposed by management or the auditors;
(d) to review and approve the fees charged by the auditors for audit and
non-audit services;
(e) to investigate improprieties or suspected improprieties in Fund
operations;
(f) to establish a complaint mechanism about accounting, internal
accounting controls or auditing matters, including a procedure to
receive confidential, anonymous submissions regarding questionable
accounting and audit matters;
(g) to establish procedures if it believes appropriate for delegation of
pre-approvals of services by auditors to a member or members of the
Committee; and
(h) to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other matters
as the Committee may deem necessary or appropriate.
4. The Committee shall meet on a periodic basis and is empowered to hold
special meetings as circumstances require.
5. The Committee shall periodically meet with the Chief Financial Officer
and/or the Treasurer of the Fund and with internal auditors, if any, for
the management company.
6. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain special
counsel and other experts or consultants at the expense of the Fund.
7. The Committee shall review this Charter regularly and recommend any changes
to the full Board of Trustees.
Important Notice
Please Read Immediately
Aquila Rocky Mountain Equity Fund
Notice of Special Meeting of Shareholders
to be held on December 1, 2004
PROXY STATEMENT
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THE AQUILASM GROUP OF FUNDS
380 MADISON AVENUE, SUITE 2300
NEW YORK, NY 10017
VOTE BY TELEPHONE OR INTERNET OR MAIL
24 Hours a day, 7 days a week
TELEPHONE
1-888-221-0697
To vote your shares by telephone, call toll free 1-888-221-0697. 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
www.proxyweb.com/aquila
To vote your shares by the Internet, contact the Fund at
www.proxyweb.com/aquila. 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.
Please fold and detach card at perforation before mailing.
Aquilasm Group of Funds
Aquila Rocky Mountain Equity Fund
Proxy for Special Meeting of the Shareholders December 1, 2004
Proxy Solicited on Behalf of the Board of Trustees
The shareholder(s) of Aquila Rocky Mountain Equity Fund (the "Fund") whose
signature(s)appears below does/do 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 Special Meeting of
Shareholders of the Fund to be held on Wednesday, December 1, 2004 at the
offices of the Fund, 380 Madison Avenue, New York, New York, at 10:00 a.m.
Eastern Standard 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 on the reverse side. 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.
Address changes/comments: _______________________________
_________________________________________________________
_________________________________________________________
(If you noted any address changes/comments above, please mark corresponding box
on other side.)
Dated: __________________, 2004
_________________________________
Signature(s) SIGN IN THE BOX
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS PROXY CARD. When signing
as a custodian, attorney, executor, administrator, trustee, guardian, etc.,
please sign your full title as such. Joint owners should each sign.
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Aquila Rocky Mountain Equity Fund
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
[X] PLEASE DO NOT USE FINE POINT PENS
1. Election of Trustees
01) Lacy B. Herrmann* 02) Tucker Hart Adams 03) Arthur K. Carlson (04) Gary C.
Cornia 05) Grady Gammage, Jr. 06) Diana P. Herrmann* 07) Cornelius T. Ryan
*interested Trustees
__
[__] FOR ALL
__
[__] WITHHOLD ALL
__
[__] FOR ALL EXCEPT
__________________
INSTRUCTION: 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 above.
[bolded in printed form]
Management recommends a vote FOR all nominees listed above. The shares
represented hereby will be voted as indicated at right or FOR ALL if no choice
is indicated.
As to any other matter said proxies shall vote in accordance with their best
judgment.
For address changes and/or comments, please check the box and write them on the
front where indicated. _
[_]
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ON THE REVERSE SIDE.
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