File Nos. 2-92583 & 811-4084
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
HAWAIIAN TAX-FREE TRUST
(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
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 21, 2005
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 21, 2005
at 10:00 a.m. Hawaiian 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 Trust'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 Trust's records at the close of
business on July 6, 2005 (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
August 15, 2005
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 preceding this Proxy Statement 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 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 Administrator (the "Administrator") is Aquila Investment
Management LLC, 380 Madison Avenue, Suite 2300, New York, NY 10017, a subsidiary
of the Trust's founder, Aquila Management Corporation. The Trust's principal
underwriter (the "Distributor") is Aquila Distributors, Inc., 380 Madison
Avenue, Suite 2300, New York, NY 10017. The Trust's Investment Adviser (the
"Adviser") is Asset Management Group of Bank of Hawaii, Financial Plaza of the
Pacific, P.O. Box 3170, Honolulu, HI 96802.
A copy of the Trust'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
August 15, 2005.
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 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.
(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 or contacting the Trust'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. They
will be counted as present in determining voting results, and will therefore
have the same effect as negative votes.
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, $11.61; Class C Shares, $11.60; and Class Y Shares, $11.63. The
meeting is expected to act only upon matters that affect the Trust as a whole:
the election of Trustees. 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, 59,280,519; Class C Shares,
3,123,953; and Class Y Shares, 1,802,282.
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.
Institutional 5% shareholders:
Merrill Lynch Pierce
Fenner & Smith, Inc., 5,647,841 Class A Shares 9.53%
4800 Deer Lake Drive, 784,196 Class C Shares 25.10%
Jacksonville, FL 32246 418,280 Class Y Shares 23.21%
Fiserv Securities Inc.
One Commerce Sq.
Philadelphia, PA 19103 7,217,875 Class A Shares 12.18%
National Financial Services
Corp.
200 Liberty Street
New York, New NY 10048 163,492 Class Y Shares 9.07%
Bank of Hawaii Agent U/A
For TT Family Limited
Partnership
P.O. Box 1930
Honolulu, HI 96805 118,602 Class Y Shares 6.58%
Additional 5% shareholders:
Martha N. Steele,
Trustee of the Martha
San Nicholas Steele
Declaration of Trust,
Honolulu,
HI 96817 170,325 Class Y Shares 9.45%
R. Dwayne Steele, Member
Steele Family
Enterprises LLC
2525 Pali Highway
Honolulu, HI 96817 257,773 Class Y shares 14.30%
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, seven 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 information about 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 2004. All nominees
have consented to serve if elected.
Nominees(1)(2)
Number of
Portfolios in Other Directorships
Positions Held Fund Held by Trustee
with Trust and Complex(5) (The position held is
Name, Address (3) and Length of Principal Occupation(s) Overseen by a directorship unless
Date of Birth Service(4) During Past 5 Years Trustee indicated otherwise.)
Interested
Trustee (6)
Diana P. Herrmann Trustee since Vice Chair and Chief Executive 10 None
New York, NY 2004, President Officer of Aquila Management
(02/25/58) since 1998 and Corporation, Founder of the
Vice Chair Aquilasm Group of Funds(7) and
since 2003 parent of Aquila Investment
Management LLC, Administrator, since
2004, President and Chief 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
Administrator 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 (2004)
and head of its Small Funds
Committee since 2004; active in
charitable and volunteer
organizations.
Non-interested Trustees
Theodore T. Mason Chair of the Executive Director, East Wind 10 Trustee, Pimco Advisors VIT.
New York, NY Board of Power Partners LTD since 1994
(11/24/35) Trustees since and Louisiana Power Partners,
2004 and 1999-2003; Treasurer, Alumni
Trustee since Association of SUNY Maritime
1984 College since 2004 (President,
2002-2003, First Vice President,
2000-2001, Second Vice
President, 1998-2000) and
director of the same
organization since 1997;
Director, STCM Management
Company, Inc., 1973-2004; 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, 2000-2004; and the
Maritime College at Fort
Schuyler Foundation, Inc. since
2000.
Thomas W. Courtney Trustee President, Courtney Associates, 5 Chairman of the Board of
Sewickley, PA since 1984 Inc., a venture capital firm, Oppenheimer Quest Value Funds
(08/17/33) since 1988. Group, Oppenheimer Small Cap
Value Fund, Oppenheimer Midcap
Fund, and Oppenheimer Rochester
Group of Funds; Chairman of the
Board of Pimco Advisors VIT.
Stanley W. Hong Trustee since President, Waste Management of 4 Trustee, Pacific Capital Funds,
Honolulu, HI 1992 Hawaii, Inc. since 2002; which includes 11 bond and
(04/05/36) Corporate Vice President, Hawaii stock funds; director, First
Area, Waste Management, Inc. Insurance Co. of Hawaii, Ltd.,
since 2002; Trustee, The King Lanihau Properties, Ltd.
William Charles Lunalilo Trust
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 - trustees, Heald
College; trustee, the Nature
Conservancy of Hawaii; and director
of other corporate and community
organizations.
Russell K. Okata Trustee since Executive Director, Hawaii 4 Trustee, Pacific Capital Funds,
Honolulu, HI 1992 Government Employees Association which includes 11 bond and
(03/22/44) AFSCME Local 152, AFL-CIO since stock funds; Chairman, Royal
1981; International Vice State Group (insurance).
President, American Federation
of State, County and Municipal
Employees, AFL-CIO since 1981;
director of various civic and
charitable organizations.
Douglas Philpotts Trustee since Retired; formerly director, 4 Trustee, Pacific Capital Funds,
Honolulu, HI 1992 Chairman of the Board and which includes 11 bond and
(11/21/31) President of Hawaiian Trust stock funds.
Company, Limited; present or former
director of various Hawaii-based
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 11 bond and
(10/08/31) utility holding company, stock funds; director, Grace
1993-2004; trustee, the Bernice Pacific Corporation, an asphalt
Pauahi Bishop Estate 1990-1999; paving company, and ACE
trustee, Office of Hawaiian Trucking Inc., a trucking
Affairs and a member or trustee company.
of several community
organizations.
Other Individuals
Chairman Emeritus(8)
Lacy B. Herrmann Founder, Founder and Chairman of the N/A N/A
New York, NY Chairman Board, Aquila Management
(05/12/29) Emeritus since Corporation, the sponsoring
2004, Trustee, organization and parent of the
1984-2004, and Manager or Administrator and/or
Chairman of the Adviser or Sub-Adviser to each
Board of fund of the Aquilasm Group of
Trustees, Funds, Chairman of the Manager
1984-2003 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.
Officers
Charles E. Executive Vice Executive Vice President of all N/A N/A
Childs, III President since funds in the Aquilasm Group of
New York, NY 2003 Funds and the Administrator and
(04/01/57) the Administrator's parent since
2003; formerly Senior Vice
President, corporate development,
Vice President, Assistant Vice
President and Associate of the
Administrator's parent since 1987;
Senior Vice President, Vice
President or Assistant Vice
President of the Aquila Money-Market
Funds, 1988-2003.
Sherri Foster Senior Vice Senior Vice President, Hawaiian N/A N/A
Lahaina, HI President Tax-Free Trust since 1993 and
(07/27/50) since 1993 formerly Vice President or
Assistant Vice President; Vice
President or Assistant Vice
President of three Aquila
Money-Market 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; Senior Vice President,
Tax-Free Fund of Colorado since
2004; Assistant Vice President,
Tax-Free Fund For Utah since 1993.
Robert W. Anderson Chief Chief Compliance Officer of the N/A N/A
New York, NY Compliance Trust, the Administrator and the
(08/23/40) Officer since Distributor since 2004,
2004 and Compliance Officer of the
Assistant Administrator or its predecessor
Secretary and current parent since 1998
since 2000 and Assistant Secretary of the
Aquilasm Group of Funds since
2000; Consultant, The Wadsworth
Group, 1995-1998.
Joseph P. DiMaggio Chief Financial Chief Financial Officer of the N/A N/A
New York, NY Officer since Aquilasm Group of Funds since 2003
(11/06/56) 2003 and and Treasurer since 2000;
Treasurer since Controller, Van Eck Global Funds,
2000 1993-2000.
Edward M. W. Hines Secretary since Partner, Hollyer Brady Barrett & N/A N/A
New York, NY 1984 Hines LLP, legal counsel to the
(12/16/39) Trust, 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 since Aquilasm Group of Funds since
1995 1995 and Vice President of the three
Aquila Money-Market Funds since
1990; Vice President of the
Administrator 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 Administrator or its
predecessor and current parent since
1998; Fund Accountant for the
Aquilasm Group of Funds, 1995-1998.
(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).
(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. The Asset Management Group of Bank of Hawaii is
the Trust's investment adviser.
(3) The mailing address of each Trustee and officer is c/o Hawaiian Tax-Free
Trust, 380 Madison Avenue, Suite 2300, New York, NY 10017.
(4) Each Trustee holds office until the next annual meeting of shareholders or
until his or her successor is elected and qualifies. The term of office of each
officer is one year.
(5) Includes certain Aquila-sponsored funds that are dormant and have no public
shareholders.
(6) Ms. Herrmann is an interested person of the Trust as an officer of the
Trust, as a director, officer and shareholder of the Administrator's corporate
parent, as an officer and Manager of the Administrator, and as a shareholder and
director of the Distributor.
(7) 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, which do not include the dormant funds described in footnote 5, are
called the "Aquilasm Group of Funds."
(8) The Chairman Emeritus may attend Trustee and shareholder meetings but has no
voting power.
Securities Holdings of the Trustees
(as of 06/30/05)
Dollar Range of Aggregate Dollar Range of
Name of Ownership in Hawaiian Ownership in funds in the
Trustee Tax-Free Trust(1) Aquilasm Group of Funds
Overseen by Trustee(1)
Interested Trustees
Diana P. Herrmann C E
Non-interested Trustees
Theodore T. Mason C C
Thomas W. Courtney C C
Stanley W. Hong C C
Russell K. Okata C C
Douglas Philpotts C C
Oswald K. Stender B C
(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, 2005, the Trust paid a total of $139,462 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 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 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 serves*
Theodore T. Mason $17,550 $67,800 10
Thomas W.
Courtney $15,750 $58,175 5
Stanley W. Hong $16,150 $46,400 4
Russell K. Okata $15,750 $46,000 4
Douglas Philpotts $15,750 $46,000 4
Oswald K. Stender $16,150 $46,400 4
* Messrs. Hong, Okata, Philpotts and Stender are also trustees of the 11 funds
in the Pacific Capital Funds for which the Adviser is also investment adviser.
For the same period, these funds paid them each the amount of $27,000.
Class A Shares may be purchased without a sales charge by the Trust's
Trustees and officers.
The Trust's Administrator is a wholly-owned subsidiary of Aquila
Management Corporation ("AMC"), founder of each fund in the Aquilasm Group of
Funds. As of July 31, 2005 these funds had aggregate assets of approximately
$4.3 billion, of which approximately $2.5 billion consisted of assets of the
tax-free municipal bond funds. AMC's address is the same as that of the
Administrator. AMC is controlled by Mr. Lacy B. Herrmann, through share
ownership directly, through two trusts and by his wife. During the fiscal year
ended March 31, 2005 the Trust paid $1,928,568 in fees to the Administrator.
During the fiscal year ended March 31, 2005, $1,363,640 was paid under
Part I of the Trust's Distribution Plan to Qualified Recipients with respect to
the Class A Shares, of which $85,070 was retained by the Distributor. With
respect to Class C Shares, during the same period $280,021 was paid under Part
II of the Plan and $93,340 was paid under the Shareholder Services Plan. Of
these total payments of $373,361, the Distributor retained $68,509. All of such
payments were for compensation.
During the fiscal year ended March 31, 2005 the Trust paid to Hollyer
Brady Barrett & Hines LLP, independent counsel to the Trust, $136,677 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 the
funds in the Aquilasm Group of 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 and former 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 Trust, as that term is defined in the 1940 Act. The members of the Audit
Committee are Thomas W. Courtney, Stanley W. Hong, Theodore T. Mason, Russell K.
Okata, Douglas Philpotts and Oswald K. Stender. The Committee (i) selects the
Trust's independent registered public accounting firm; (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. Selection of the
independent registered public accounting firm is also ratified by the Board of
Trustees. The Audit Committee held one meeting during the Trust's last fiscal
year. The Board of Trustees has adopted a written charter for the Audit
Committee.
During the Trust'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 Trust's policy is that all Trustees who can do so attend the Annual
Meeting.
The Trust has a Nominating Committee, consisting of all of the
Independent Trustees. The Nominating Committee held no meetings during the last
fiscal year. The committee will consider nominees recommended by the
shareholders who may send recommendations to the committee in care of the
Administrator at 380 Madison Avenue, New York, NY 10017. The charter of the
Nominating Committee is available on the Trust's website at www.aquilafunds.com.
Since the beginning of the Trust's most recently completed fiscal year,
no Trustee purchased or sold more than 1% of the outstanding shares of any class
of shares of the Adviser or its parent or subsidiaries.
Vote Required
To be elected, each nominee must receive the affirmative votes of a
majority of the shares present.
Information About Independent
Registered Public
Accounting Firms
Tait, Weller & Baker ("TWB") has been preliminarily selected as the
Trust's independent registered public accounting firm for the fiscal year ending
March 31, 2006 by the Trust's Audit Committee, after requesting from the
Administrator and receiving the results of interviews and evaluations of a
number of possible firms. The selection has been preliminarily ratified by the
Board of Trustees, including a majority of the Independent Trustees. TWB has
concentrated its accounting practice primarily in the mutual fund industry for
more than 40 years and is one of the industry's largest providers. It is
anticipated that immediately prior to the Annual Meeting of Shareholders,
selection of TBW by the Audit Committee and ratification by the Board of
Trustees will be formally confirmed at meetings attended in person by members of
the Audit Committee and Board, respectively.
KPMG LLP ("KPMG") has served as the Trust's independent registered
public accounting firm for all of the Trust's fiscal years from its inception
through its fiscal year ended March 31, 2005. Throughout that period, KPMG's
reports on the Trust's financial statements, including those for the Trust's two
most recent fiscal years, contained no adverse opinion or disclaimer of opinion.
No reports were qualified or modified as to uncertainty, audit scope, or
accounting principles. Since inception and including the last two fiscal years
and the subsequent period through the date of this proxy statement, there have
been no disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, and
there were no reportable events of the kinds required to be disclosed under
regulations applicable to proxy statements.
The following table represents fees for professional audit services
rendered by KPMG for the audit of the Trust's annual financial statements for
the fiscal years ended March 31, 2004 and 2005, and fees billed for other
services rendered by KPMG.
2004 2005
Audit Fees $21,200 $23,320
Audit related fees 0 0
------- -------
Audit and audit related fees 21,200 23,320
Tax fees (1) 8,270 18,029
All other fees 0 0
------ ------
29,470 41,349
Total $ $
====== ======
(1) Tax fees consisted of fees for tax consultation and tax compliance services.
During the year ended March 31, 2005, KPMG provided the following
services for which Bank of Hawaii (the Bank) was billed:
Assistance to the Bank in connection with the
assessment by the Arizona Department of
Revenue for sales tax on gross receipts and
filing of a refund claim in California
for excise tax on telecommunications $110,823
All audit and non-audit services performed by KPMG on behalf of the
Trust or non-audit services performed on behalf of affiliated entities within
the investment company complex where such engagement relates directly to the
operations and financial reporting of the Trust are pre-approved by the Audit
Committee. Services to be considered between meetings of the Committee are
pre-approved by a selected member of the Committee in accordance with applicable
regulations and subject to additional procedures established by the Committee.
The Audit Committee has reviewed all services performed and fees
charged by KPMG and has accepted its representation that it is independent. The
Audit Committee has reviewed all services to be performed and fees to be charged
by TWB and in recommending appointment of TWB for the fiscal year ending March
31, 2006 has accepted its representation that it is independent.
It is expected that representatives of neither firm will be present at
the meeting but representatives of each firm 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, shareholders will be notified.
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>
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Hawaiian Tax-Free Trust
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on September 21, 2005
PROXY STATEMENT
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 Trust 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
Hawaiian Tax-Free Trust
Proxy for Shareholder Meeting September 21, 2005
Proxy Solicited on Behalf of the Board of Trustees
The shareholder(s) of Hawaiian Tax-Free Trust (the "Trust") whose
signature(s) appear(s) 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 Annual Meeting of
Shareholders of the Trust to be held on Wednesday, September 21, 2005 at the Ala
Moana Hotel, Hibiscus Ballroom, 410 Atkinson Drive, Honolulu, Hawaii, at 10:00
a.m. Hawaiian 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.
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.)
Dated: -------------------, 2005
- ---------------------------------
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.
<page>
Hawaiian Tax-Free Trust
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) Thomas W. Courtney; 02) Diana P. Herrmann*; 03) Stanley W. Hong; 04)
Theodore T. Mason; 05) Russell K. Okata; 06) Douglas Philpotts; 07) Oswald K.
Stender
* interested Trustee
--
[__] 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 if no choice is
indicated.
As to any other matter said proxies shall vote in accordance with their best
judgment.
--
I plan to attend the annual meeting in Honolulu [__]
--
I plan to attend the outreach meeting in Kauai [__]
For address changes and/or comments, please check the box at right and write
them on the front where indicated. __
[ ]
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ON THE REVERSE SIDE.