Important Notice
Please Read Immediately
Hawaiian Tax-Free Trust
380 Madison Avenue, Suite 2300, New York, NY 10017
Notice of Annual Meeting of
Shareholders to Be Held
on September 13, 2002
To Shareholders of the Trust:
The purpose of this Notice is to advise you that an Annual Meeting of the
Shareholders of Hawaiian Tax-Free Trust (the "Trust") will be held:
Place: (a) at the Ala Moana Hotel, Hibiscus Ballroom,
410 Atkinson Drive, Honolulu, Hawaii;
Time: (b) on September 13, 2002
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 Trust's
shareholders or until his or her successor is duly elected
(Proposal No. 1);
(ii) to ratify (that is, to approve) or reject the selection
of KPMG LLP as the Trust's independent auditors for the
fiscal year ending March 31, 2003 (Proposal No. 2);
(iii) to act upon any other matters which may properly come
before the Meeting at the scheduled time and place or any
adjourned meeting or meetings.
Who Can
Vote What
Shares: (d) To vote at the Meeting, you must have been a
shareholder on the Trust's records at the close of
business on June 20, 2002 (the "record date"). Also,
the number of shares of each of the Trust'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
July 19, 2002
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 Trust, we request your cooperation in voting no matter how large or small
your holding may be.
Hawaiian Tax-Free Trust
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 Hawaiian Tax-Free Trust (the "Trust"). The purpose of this Proxy
Statement (all the rest of this document) is to give you information on which
you may base your decisions as to the choices, if any, you make in voting.
The Trust's founder and Administrator (the "Administrator") is Aquila
Management Corporation, 380 Madison Avenue, Suite 2300, New York, NY 10017. The
Trust's principal underwriter (the "Distributor") is Aquila Distributors, Inc.,
380 Madison Avenue, Suite 2300, New York, NY 10017. Asset Management Group of
Bank of Hawaii, Financial Plaza of the Pacific, P.O. Box 3170, Honolulu, Hawaii
96802 is the Trust's Investment Adviser.
A copy of the Trust's most recent annual report will be sent to you without
charge upon written request to the Distributor, at that 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 July
19, 2002.
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, 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 Trust calls these persons the "proxy holders." As to
the election of Trustees you may authorize the proxy holders to vote your shares
for the entire slate indicated below by marking the appropriate box on the proxy
card or by merely signing and returning your proxy card with no instructions. Or
you may withhold the authority of the proxy holders to vote on the election of
Trustees by marking the appropriate box. Also, you may withhold that authority
as to any particular nominee by following the instructions on the proxy card.
As to the other matter listed on the proxy card, you may direct the proxy
holders to vote your shares on this proposal by marking the appropriate box
"For" or "Against" or instruct them not to vote your shares on the proposal by
marking the "Abstain" box. If you return your signed proxy card and do not mark
a box on the proposal, the proxy holders will vote your shares for that
proposal.
(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 Trust 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 Trust in writing; (ii) signing a new and different proxy card (if
the Trust 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 above or contacting the Trust's Internet address described
above, entering your control number and revoking your previous vote.
Shares held by brokers in "street name" and not voted or marked as
abstentions will not be counted for purposes of determining a quorum or voted on
any matter or otherwise counted as present in determining voting results.
The Trust is sending you this Notice and Proxy Statement in connection with
the solicitation by its Trustees of proxies to be used at the Annual Meeting to
be held at the time and place and for the purposes indicated in the Notice or
any adjourned meeting or meetings. Whenever it is stated in this Proxy Statement
that a matter is to be acted on at the Meeting, this means the Meeting held at
the scheduled time or any adjourned meeting or meetings.
The Trust 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 Trust's
shares so that these owners may authorize the voting of their shares. The Trust
will pay these firms their out-of-pocket expenses for doing so.
On the record date, the Trust had three classes of shares outstanding. All
shareholders of the Trust 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 Trust's outstanding classes of shares was as follows: Class A Shares,
$11.52; Class C Shares, $11.52; and Class Y Shares, $11.54. The meeting is
expected to act only upon matters that affect the Trust as a whole: the election
of Trustees and the selection of independent auditors. On matters that affect
the Trust as a whole, all shareholders of the Trust, including the shareholders
of all classes of shares of the Trust, are entitled to vote at the meeting.
On the record date, the total number of shares outstanding for each class
of shares was as follows: Class A Shares, 55,774,044; Class C Shares, 2,338,288;
and Class Y Shares, 1,801,635.
On the record date, the following holders held 5% or more of a class of the
Trust's outstanding shares. On the basis of information received from the
institutional holders the Trust's management believes that all of the shares
indicated are held by them for the benefit of clients
Name and address Number Percent
of the holder of of shares of class
record
Institutional 5% shareholders
Merrill Lynch Pierce
Fenner & Smith, Inc. 6,132,228 Class A Shares 11.0%
4800 Deer Lake Drive 697,519 Class C Shares 29.9%
Jacksonville, FL 32246 361,984 Class Y Shares 20.0%
Fiserv Securities Inc. 5,579,327 Class A Shares 10.0%
2005 Market Street
STE 1200
Philadelphia,
PA 19103
National Financial Services LLC
200 Liberty Street
One World Financial Center
New York, NY 10281 90,916 Class Y Shares 5.0%
Additional 5% shareholders
Pacific Century Trust,
Trustee for TT Family Limited
Partnership
P.O. Box 1930
Honolulu, HI 96805 131,952 Class Y Shares 7.3%
Martha N. Steele,
Trustee of the Martha
San Nicholas Steele
Declaration of Trust
2525 Pali Hwy.
Honolulu, HI 96817 149,679 Class Y Shares 8.3%
R. Dwayne Steele, Member
Steele Family Enterprises LLC
2525 Pali Highway
Honolulu, HI 96817 226,527 Class Y Shares 12.6%
Linda S. Kano, Trustee
575 Cooke Street
Honolulu, HI 96813 82,133 Class Y Shares 8.7%
The Trust'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, nine Trustees are to be elected. Each Trustee elected will
serve until the next annual meeting or until his or her successor is duly
elected. The nominees selected by the Trustees are named in the table below. See
"Introduction" above for information as to how you can vote your shares in the
election of Trustees.
The following material includes the name, positions with the Trust,
address, date of birth and business experience during at least the past five
years of each nominee and each officer of the Trust. All shares of the Trust
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
in September 2002.
Trustees(1)(2)
and Officers
Number of
Positions Held Portfolios in
with Fund Complex
Trust Overseen by
Name, Address(3) and and Length of Principal Occupation(s) Trustee Other Directorships
Date of Birth Service(4) During Past 5 Years Held by Trustee
Interested Trustees(5)
Lacy B. Herrmann Chairman of Founder and Chairman of the 14 Director or trustee, OCC Cash
New York, NY the Board of Board, Aquila Management Reserves, Inc., OCC
(05/12/29) Trustees since Corporation, the sponsoring Accumulation Trust, Oppenheimer
1984 organization and Manager or Quest Value Funds Group,
Administrator and/or Adviser or Oppenheimer Small Cap Value
Sub-Adviser to each fund in the Fund, Oppenheimer Midcap Fund,
Aquilasm Group of Funds (6) and and Oppenheimer Rochester Group
Founder, Chairman of the Board of of Funds.
Trustees and (currently or until
1998) President of each since its
establishment, beginning in 1984;
Director, Aquila Distributors,
Inc., distributor of the above
funds, since 1981 and formerly
Vice President or Secretary,
1981-1998; President and a
Director, STCM Management
Company, Inc., sponsor and
investment adviser to Capital
Cash Management Trust and Capital
Cash U.S. Government Securities
Trust; Trustee Emeritus, Brown
University and active in
university, school and charitable
organizations.
Douglas Philpotts Trustee since Retired; formerly Director, 4 Trustee, Pacific Capital
Honolulu, HI 1992 Chairman of the Board and Funds, which includes 8 bond
(11/21/31) President of Hawaiian Trust and stock funds.
Company, Limited; present or former
director of various Hawaii-based civic
and charitable organizations.
Non-interested
Trustees
William M. Cole Trustee since President, Cole International, 4 None
Westfield, NJ 1985 Inc., financial and shipping
(05/21/31) consultants, since 1974;
Chairman, Cole Group, a financial
consulting and real estate firm.
Thomas W. Courtney Trustee President, Courtney Associates, 5 Director or trustee, OCC
Sewickley, PA since 1984 Inc., a venture capital firm, Cash Reserves, Inc., OCC
(08/17/33) since 1988. Accumulation Trust,
Oppenheimer Quest Value
Funds Group, Oppenheimer
Small Cap Value Fund,
Oppenheimer Midcap Fund, and
Oppenheimer Rochester Group
of Funds.
Richard W. Gushman, Trustee since President and Chief Executive 4 Trustee, Pacific Capital
II(7) 1992 Officer, OKOA, Inc., a Funds, which includes 8 bond
Honolulu, HI diversified Hawaii-based real and stock funds; director,
(02/28/46) estate organization with Outrigger Hotels since 2000;
activities in the western U.S. director, Servco Pacific,
and the Pacific Basin, since Inc. and Oceanic Time-Warner
1972; Managing Partner of Summit since 1998; director,
Financial Resources, a Salt Lake American Savings Bank since
City, Utah-based financial 2002.
services company; trustee, the
Estate of James Campbell since
2000 and Chairman of the Board
of Trustees since 2002; trustee,
University of Hawaii Foundation and
Hawaii Pacific University since 1997;
director, United Way of America since
1998; board member of the Boys & Girls
Club of Honolulu, Aloha United Way,
and other charitable and civic
organizations.
Stanley W. Hong Trustee since President, Waste Management of 4 Trustee, Pacific Capital
Honolulu, HI 1992 Hawaii, Inc. since 2002; Funds, which includes 8 bond
(04/05/36) Corporate Vice President, Hawaii and stock funds; director,
Area, Waste Management, Inc. Central Pacific Bank and
since 2002; Trustee, The King First Insurance Co. of
William Charles Lunalilo Trust Hawaii, Ltd.
Estate since 2001; President and
Chief Executive Officer, The
Chamber of Commerce of Hawaii,
1996-2001; director, Hawaii Public
Television Foundation since 1998;
Regent, Chaminade University of
Honolulu; Chair - State Judicial
Salary Commission since 1998; and
director of other corporate and
community organizations.
Theodore T. Mason Trustee since Executive Director, East Wind 7 Trustee, OCC Cash Reserves,
New York, NY 1984 Power Partners LTD since 1994 Inc. and OCC Accumulation
(11/24/35) and Louisiana Power Partners, Trust.
LLC since 1999; President, Alumni
Association of SUNY Maritime College
since 2002 (First Vice President,
2000-2001, Second Vice President,
1998-2000) and Director of the same
organization since 1997; Director,
STCM Management Company, Inc., since
1973; twice national officer of Naval
Reserve Association, Commanding
Officer of four naval reserve units
and Captain, USNR (Ret); director, The
Navy League of the United States New
York Council since 2002; trustee, The
Maritime Industry Museum at Fort
Schuyler and the Maritime College at
Fort Schuyler Foundation, Inc. since
2000.
Russell K. Okata Trustee since Executive Director, Hawaii 4 Trustee, Pacific Capital
Honolulu, HI 1992 Government Employees Association Funds, which includes 8 bond
(03/22/44) AFSCME Local 152, AFL-CIO since and stock funds; Chairman,
1970; International Vice Royal State Insurance Group.
President, American Federation
of State, County and Municipal
Employees, AFL-CIO since 1981;
director of various civic and
charitable organizations.
Oswald K. Stender Trustee since Director, Hawaiian Electric 4 Trustee, Pacific Capital Funds,
Honolulu, HI 1992 Industries, Inc., a public which includes 8 bond and stock
(10/08/31) utility holding company, since funds.
1993; Trustee, the Bernice Pauahi
Bishop Estate 1990-1999; Trustee,
Office of Hawaiian Affairs and a
member or trustee of several community
organizations.
Officers
Diana P. Herrmann President President and Chief Operating 9 None
New York, NY since 1998 Officer of the Manager since
(02/25/58) 1997, a Director since 1984,
Secretary since 1986 and previously
its Executive Vice President, Senior
Vice President or Vice President,
1986-1997; President, Senior Vice
President or Executive Vice President
of 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; active in mutual fund and
trade organizations and in charitable
and volunteer organizations.
Sherri Foster Senior Vice Senior Vice President, Hawaiian N/A N/A
Lahaina, HI (07/27/50) President Tax-Free Trust since 1993; Vice
since 1993 President or Assistant Vice
President of four Aquila Cash
and Equity Funds; Registered
Representative of the
Distributor since 1985.
Stephen J. Caridi Vice President Vice President of the N/A N/A
New York, NY (05/06/61) since 1998 Distributor since 1995; Vice
President, Hawaiian Tax-Free Trust
since 1998; Senior Vice President,
Narragansett Insured Tax-Free Income
Fund since 1998, Vice President
1996-1997; Assistant Vice President,
Tax-Free Fund For Utah since 1993.
Rose F. Marotta Chief Chief Financial Officer of the N/A N/A
New York, NY Financial Aquilasm Group of Funds since
(05/08/24) Officer since 1991 and Treasurer, 1981-1991;
1991 Treasurer and Director, STCM
Management Company, Inc., since
1974; Treasurer of the Manager
since 1984 and of the
Distributor, 1985-2000.
Joseph P. DiMaggio Treasurer Treasurer of the Aquilasm Group N/A N/A
New York, NY since 2000 of Funds and the Distributor
(11/06/56) since 2000; Controller, Van Eck
Global Funds, 1993-2000.
Edward M. W. Hines Secretary Partner, Hollyer Brady Smith & N/A N/A
New York, NY since 1984 Hines LLP, legal counsel to the
(12/16/39) Trust, since 1989; Secretary of
the Aquilasm Group of Funds.
Robert W. Anderson Assistant Compliance Officer of the N/A N/A
New York, NY (08/23/40) Secretary Manager since 1998 and Assistant
since 2000 Secretary of the Aquilasm Group
of Funds since 2000; Consultant, The
Wadsworth Group, 1995-1998.
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
five Aquila Money-Market Funds since
1990; Vice President of the Manager
since 1990.
Lori A. Vindigni Assistant Assistant Treasurer of the N/A N/A
New York, NY Treasurer Aquilasm Group of Funds since
(11/02/66) since 2000 2000; Assistant Vice President
of the Manager since 1998; Fund
Accountant for the Aquilasm
Group of Funds, 1995-1998.
<FN>
(1) The Trust'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).
</FN>
<FN>
(2)From time to time Bank of Hawaii may enter into normal investment management,
commercial banking and lending arrangements with one or more of the Trustees of
the Trust and their affiliates.
</FN>
<FN>
(3) The mailing address of each Trustee and officer is c/o Hawaiian Tax-Free
Trust, 380 Madison Avenue, New York, NY 10017.
</FN>
<FN>
(4) Each Trustee holds office until the next annual meeting of shareholders or
until his successor is elected and qualifies. The term of office of each officer
is one year.
</FN>
<FN>
(5) Mr. Herrmann is an interested person of the Trust as that term is defined in
the Investment Company Act of 1940 (the "1940 Act") as an officer of the Trust
and a director, officer and shareholder of the Distributor. Mr. Philpotts is an
interested person of the Trust, as that term is so defined, as a shareholder of
the Adviser's corporate parent.
</FN>
<FN>
(6) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust, Pacific Capital Tax-Free Cash Assets
Trust, Capital Cash Management Trust and Capital Cash U.S. Government Securities
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; 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"; and
Aquila Cascadia Equity Fund and Aquila Rocky Mountain Equity Fund are called the
"Aquila Equity Funds"; considered together, these 14 funds are called the
"Aquilasm Group of Funds."
</FN>
<FN>
(7)Mr. Gushman has minority equity interests in a partnership and a limited
liability company that have outstanding loans from Bank of Hawaii, the Trust's
investment adviser. Mr. Gushman also owns corporate entities that act as general
partner and managing member, respectively, of the borrowers and holds majority
equity interests in corporate entities that receive fees for services to the
borrowers. The partnership's largest aggregate amount of indebtedness during the
two years ended December 31, 2001 and the amount outstanding on that date was
$13,100,000, and the interest rate is 6.57%. For the limited liability company,
the corresponding amounts involved were both $7,200,000, and the interest rate
is 7.0%.
</FN>
Securities Holdings of the Trustees
(as of 5/01/02)
Dollar Range of Aggregate Dollar Range of
Name of Ownership in Hawaiian Ownership in Aquilasm Investment
Trustee Tax-Free Trust(1) Companies Overseen by Trustee(1)
Interested Trustees
Lacy B. Herrmann B E
Douglas Philpotts C C
Non-interested Trustees
William M. Cole B E
Thomas W. Courtney C C
Richard W. Gushman, II B B
Stanley W. Hong C C
Theodore T. Mason C C
Russell K. Okata B B
Oswald K. Stender B B
(1) A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. over $100,000
None of the non-interested Trustees or their immediate family members holds
of record or beneficially any securities of the Adviser, Administrator or the
Distributor.
The Trust does not currently pay fees to any of the Trust's officers or to
Trustees affiliated with the Adviser or Administrator. For its fiscal year ended
March 31, 2002, the Trust paid a total of $151,789 in compensation and
reimbursement of expenses to the Trustees. No other compensation or remuneration
of any type, direct or contingent, was paid by the Trust to its Trustees.
The Trust is one of the 14 funds in the Aquilasm Group of Funds, which
consist of tax-free municipal bond funds, money-market funds and equity funds.
The following table lists the compensation of all nominees for Trustee who
received compensation from the Trust or from other funds in the Aquilasm Group
of Funds during the Trust's fiscal year. None of such Trustees has any pension
or retirement benefits from the Trust 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 Trust Group of Funds now serves
William M. Cole $14,000 $41,500 4
Thomas W.
Courtney $14,000 $51,850 5
Richard W.
Gushman $15,350 $43,950 4
Stanley W. Hong $14,350 $41,850 4
Theodore T. Mason $14,350 $49,850 7
Russell K. Okata $14,350 $41,750 4
Douglas Philpotts $13,100 $36,850 4
Oswald Stender $14,700 $41,500 4
Certain Trustees are also trustees of the funds in the Pacific Capital
Group of Funds for which the Adviser is also investment adviser. For the same
period, these funds paid the following Trustees the amounts listed: Mr. Gushman,
$20,833; Mr. Hong, $20,833; Mr. Okata, $20,833; Mr. Philpotts, $20,833; and Mr.
Stender, $20,833.
Class A Shares may be purchased without a sales charge by certain of the
Trust's Trustees and officers.
The Trust's Administrator is Manager or Administrator to the Aquilasm Group
of Funds. As of June 30, 2002 these funds had aggregate assets of approximately
$3.6 billion, of which approximately $2.1 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.
During the fiscal year ended March 31, 2002 the Trust paid $1,681,104 in fees to
the Administrator.
During the fiscal year ended March 31, 2002, $1,224,789 was paid under Part
I of the Trust's Distribution Plan to Qualified Recipients with respect to the
Class A Shares, of which $70,477 was retained by the Distributor. With respect
to Class C Shares, during the same period $149,123 was paid under Part II of the
Plan and $49,708 was paid under the Shareholder Services Plan. Of these total
payments of $198,831, the Distributor received $94,899. All of such payments
were for compensation.
During the fiscal year ended March 31, 2002 the Trust paid to Hollyer Brady
Smith & Hines, independent counsel to the Trust, $83,224 for legal services.
Edward M.W. Hines, Secretary of the Trust, is a partner of that firm.
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 Trust. Under the Distribution Agreement, the
Distributor is responsible for the payment of certain printing and distribution
costs relating to prospectuses and reports as well as the costs of supplemental
sales literature, advertising and other promotional activities. The shares of
the Distributor are owned 24% by Diana P. Herrmann, 72% by Mr. Herrmann and
other members of his immediate family, and the balance by current employees of
Aquila Management Corporation.
Other Information on Trustees
The Trustees have appointed a standing Audit Committee consisting of all of
the Trustees (the "Independent Trustees") who are not "interested persons" of
the Trust, as that term is defined in the 1940 Act. The members of the Audit
Committee are William M. Cole, Thomas W. Courtney, Richard W. Gushman, II,
Stanley W. Hong, Theodore T. Mason, Russell K. Okata and Oswald K. Stender. None
of the members of the Committee is an "interested person" of the Trust. 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 Trust's internal accounting
procedures and controls. The Committee held one meeting during the Trust's last
fiscal year. The Board of Trustees does not have a nominating committee. During
the Trust's last fiscal year, the Board of Trustees held four meetings. Each
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).
Since the beginning of the Trust's most recently completed fiscal year, no
Trustee purchased or sold shares of the Adviser or its parents or subsidiaries.
Ratification or Rejection of Selection of Independent Auditors Proposal No. 2)
KPMG LLP ("KPMG"), which is currently serving as the Trust's auditors, has
been selected by the Trust's Board of Trustees, including a majority of the
Independent Trustees, as the Trust's independent auditors for the fiscal year
ending March 31, 2003 Such selection is submitted to the shareholders for
ratification or rejection.
The Trust paid the following fees to KPMG during the fiscal year ended
March 31, 2002:
Audit Fees $18,000
Financial Information
Systems Design and Implementation 0
All Other Fees $7,922
(Fees for preparation
of the Trust's tax
returns and tax-related memoranda.)
KPMG LLP did not perform any services during the fiscal year for the
Trust's investment adviser or any entity controlling, controlled by or under
common control with the investment adviser that provides services to the Trust.
The Audit Committee of the Trust's Board of Trustees, which consists of all
of the independent Trustees, has reviewed all services performed and fees
charged by KPMG and has accepted its representation that it is independent in
recommending re-appointment of it for the fiscal year ending March 31, 2003.
KPMG has no direct or indirect financial interest in the Trust, the Trust's
Administrator or the Trust's Adviser. It is expected that representatives of
KPMG 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 Trust's proxy statement and proxy card for a
particular annual meeting. One of these conditions relates to the timely receipt
by the Trust of any such proposal. Under these rules, proposals submitted for
inclusion in the proxy material for the Trust's next annual meeting after the
meeting to which this Proxy Statement relates must be received by the Trust 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 Trust will so advise you.
The fact that the Trust receives a shareholder proposal in a timely manner
does not insure its inclusion in the Trust's proxy material, since there are
other requirements in the proxy rules relating to such inclusion.
Other Business
The Trust 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.
<page>
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
1-800-690-6903
To vote your shares by telephone, call toll free 1-800-690-6903. You
will be prompted to enter the 12-digit control number on this proxy card. Follow
the simple recorded instructions using this proxy card as a guide. If you vote
by phone, you need not return the proxy card by mail.
Internet
www.proxyvote.com
To vote your shares by the Internet, contact the Trust at
www.proxyvote.com You will be prompted to enter the 12-digit control number on
this proxy card. Follow the simple instructions at the website, using your proxy
card as a guide. If you vote by the Internet, you need not return the proxy card
by mail.
Mail
You can vote your shares by completing and returning this proxy card.
Please mark your proxy, date and sign it below and return it promptly in the
accompanying envelope which requires no postage if mailed in the United States.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
HAWAIIAN TAX-FREE TRUST CLASS A
Vote on Trustees
(Proposal No.1 in Proxy Statement)
1. Election of Trustees
1) Lacy B. Herrmann*; 2) William M. Cole; 3) Thomas W. Courtney; 4) Richard
W. Gushman, II; 5) Stanley W. Hong; 6) Theodore T. Mason; 7) Russell K.
Okata; 8) Douglas Philpotts*; 9) Oswald K. Stender
* interested Trustees
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[__] For All
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[__] Withhold All
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[__] For All Except
To withhold authority to vote for one or more (but not all) nominees, mark "For
all except" and write the nominee number(s) and/ or name(s) on the line below.
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[bolded in printed form]
Management recommends a vote For all nominees listed above and For the proposal
listed below. The shares represented hereby will be voted as indicated below or
For if no choice is indicated.
2. Action on selection of KPMG LLP as independent auditors
(Proposal No. 2 in Proxy Statement)
FOR [__] AGAINST [__] ABSTAIN [__]
As to any other matter said proxies shall vote in accordance with their
best judgment.
Please indicate if you plan to attend one of the Shareholder Meetings. If you
mark one of the boxes below, you must return the proxy card by mail to have this
information recorded.
H. I plan to attend the annual meeting in Honolulu [__]
K. I plan to attend the outreach meeting in Kauai [__]
For address changes and/or comments, please check this box and write
them on the back where indicated.
[ ]
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.
_________________________________Date_________
Signature
[Please sign within box]
_________________________________Date__________
Signature
(Joint Owners)
HAWAIIAN TAX-FREE TRUST
Proxy for Shareholders Meeting September 13, 2002
Proxy Solicited on Behalf of the Board of Trustees
The undersigned shareholder of HAWAIIAN TAX-FREE TRUST (the "Trust") does
hereby appoint LACY B. HERRMANN, DIANA P. HERRMANN and EDWARD M. W. HINES, or
any of them, as attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of the Trust to be
held on Friday, September 13, 2002 at the Ala Moana Hotel, Hibiscus Ballroom,
410 Atkinson Drive, Honolulu, Hawaii; 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 on the
reverse side. Such shares are entitled to one vote for every dollar of net asset
value represented by the share balance printed on the reverse side.
Please read the proxy statement prior to voting.
Annual Meeting Attendance
We encourage you to attend the Annual Meeting of
Shareholders. If you can join us, please so indicate on the proxy card or e-mail
us at info@aquilafunds.com
Address changes/comments: _______________________________
_________________________________________________________
_________________________________________________________
(If you noted any address changes/comments above, please mark corresponding box
on other side.)