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: - ----------------------------------------------------------------- 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 -- [__] For All -- [__] Withhold All -- [__] For All Except To withhold authority to vote for one or more (but not all) nominees, mark "For all except" and write the nominee number(s) and/ or name(s) on the line below. - ---------------- [bolded in printed form] Management recommends a vote For all nominees listed above and For the proposal listed below. The shares represented hereby will be voted as indicated below or For if no choice is indicated. 2. Action on selection of KPMG LLP as independent auditors (Proposal No. 2 in Proxy Statement) FOR [__] AGAINST [__] ABSTAIN [__] As to any other matter said proxies shall vote in accordance with their best judgment. Please indicate if you plan to attend one of the Shareholder Meetings. If you mark one of the boxes below, you must return the proxy card by mail to have this information recorded. 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.)