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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[.] 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
Important Notice
Please Read Immediately
Hawaiian Tax-Free Trust
380 Madison Avenue, Suite 2300, New York, New York 10017
Notice of Annual Meeting of
Shareholders to Be Held
on September 12, 2008
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 Friday, September 12, 2008
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
(Annual Meeting Proposal No. 1);
(ii) to ratify (that is, to approve) or reject the selection
of Tait, Weller & Baker LLP as the Trust's independent
registered public accounting firm for the fiscal year ending
March 31, 2009 (Annual Meeting Proposal No. 2);
(iii) to act upon any other matters which may properly come
before the Annual Meeting at the scheduled time and place or
any adjourned meeting or meetings.
Who Can
Vote What
Shares: (d) To vote at the Annual Meeting, you must have been a
shareholder on the Trust's records at the close of
business on June 16, 2008 (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 Annual Meeting (or any adjourned
meeting or meetings).
By order of the Board of Trustees,
EDWARD M. W. HINES
Secretary
July 18, 2008
Please Note:
If you do not expect to attend the Annual Meeting, please vote by any of three
ways: by the Internet, by telephone 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.
Important Notice
Please Read Immediately
Hawaiian Tax-Free Trust
380 Madison Avenue, Suite 2300, New York, New York 10017
Notice of Special Meeting of
Shareholders to Be Held
on September 12, 2008
To Shareholders of the Trust:
The purpose of this Notice is to advise you that a Special 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 Friday, September 12, 2008
at 10:10 a.m. Hawaiian Standard Time;
Purpose: (c) for the following purpose:
Consideration of a revision of the Trust's Fundamental
Policies to expand the types of tax-free obligations in
which the Trust can invest (Special Meeting Proposal No.
1).
Who Can
Vote What
Shares: (d) To vote at the Special Meeting, you must have been a
shareholder on the Trust's records at the close of
business on June 16, 2008 (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 Special Meeting (or any adjourned
meeting or meetings).
By order of the Board of Trustees,
EDWARD M. W. HINES
Secretary
July 18, 2008
Please Note:
If you do not expect to attend the Special Meeting, please vote by any of three
ways: by the Internet, by telephone 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
Joint Proxy Statement
Introduction
The two Notices preceding this Joint Proxy Statement are to advise you
of the times, place and purposes of an Annual Meeting of the Shareholders of
Hawaiian Tax-Free Trust(the "Trust"), and a Special Meeting of the Shareholders
that will take place immediately after the Annual Meeting. The purpose of this
Joint Proxy Statement is to give you information on which you may base your
voting decisions at both meetings.
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.
These Notices and Joint Proxy Statement are first being mailed on or
about July 18, 2008.
You should read this Joint 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 Cards
The enclosed proxy cards authorize the persons named (or their
substitutes) to vote your shares; the Trust calls these persons the "proxy
holders." There are two proxy cards, one for each meeting. 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 for the
Annual Meeting 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 matters listed on each proxy card, you may direct the
proxy holders to vote your shares on a proposal by marking the appropriate box
"For" or "Against" or instruct them not to vote your shares on a 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) Internet Voting
To vote your shares by the Internet, please contact the Trust at the
Internet address shown on your proxy cards. You will be prompted to enter the
control numbers on your proxy cards. Follow the instructions on the screen,
using your proxy cards as guides. If you vote by the Internet, you need not
return the proxy cards by mail.
(3) Telephone Voting
To vote your shares by telephone, call the toll-free number on your
proxy cards. You will be prompted to enter the control numbers on your proxy
cards. Follow the recorded instructions using your proxy cards as guides. If you
vote by phone, you need not return the proxy cards by mail.
General Information
You may end the power of the proxy holders to vote your shares at
either meeting 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 quorums at the
meetings. They will be counted as present at the meeting in determining voting
results, and will therefore have the same effect as negative votes. Quorums for
the two meetings will be determined separately.
The Trust is sending you the Notices and Joint Proxy Statement in
connection with the solicitation by its Trustees of proxies to be used at the
Annual Meeting and Special Meeting to be held at the times and place and for the
purposes indicated in the Notices or any adjourned meeting or meetings. Whenever
it is stated in this Joint Proxy Statement that a matter is to be acted on at
the Annual or Special 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 these Notices and Joint 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. Because your vote is important, the Trust may telephone you to urge
you to vote.
On the record date, the Trust had three classes of shares outstanding.
All shareholders of the Trust are entitled to vote at the Annual Meeting and the
Special 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, $11.10; Class C Shares, $11.09; and Class Y
Shares, $11.11. Both meetings are expected to act only upon matters that affect
the Trust as a whole: at the Annual Meeting, the election of Trustees and the
selection of an independent registered public accounting firm, and at the
Special Meeting, action on a revision of the Trust's Fundamental Policies. 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, 57,084,941; Class C Shares,
2,823,117; and Class Y Shares, 2,720,706.
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 of the holder of record Number of shares Percent of class
Institutional 5% shareholders:
Merrill Lynch Pierce
Fenner & Smith, Inc., 5,325,595 Class A Shares 9.33%
4800 Deer Lake Drive, 660,915 Class C Shares 23.41%
Jacksonville, FL 32246 202,282 Class Y Shares 7.43%
Strobro
P.O. Box 1930
Honolulu, HI 96805 1,033,931 Class Y Shares 38.00%
Additional 5% shareholders:
Martha N. Steele,
Trustee of the Martha
San Nicholas Steele
Declaration of Trust,
Honolulu,
HI 96817 279,403 Class Y Shares 10.27%
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 Annual Meeting)
At the Annual 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 2007. 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) Length of Principal Occupation(s) Overseen by a directorship unless
and Date of Birth Service(4) During Past 5 Years Trustee indicated otherwise.)
Interested
Trustee (6)
Diana P. Herrmann Vice Chair of Vice Chair and Chief Executive 12 ICI Mutual Insurance
New York, NY the Board of Officer of Aquila Management Company
(02/25/58) Trustees since Corporation, Founder of the
2003, President Aquila Group of Funds(7) and
since 1998 and parent of Aquila Investment
Trustee since Management LLC, Administrator
2004 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; Chair, Vice Chair,
President, Executive Vice President
or Senior Vice President of funds in
the Aquila 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 (a trade
organization for the U.S. fund
industry dedicated to protecting
shareholder interests and educating
the public about investing) 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 8 Trustee, Premier 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, Fort
Trustee since Schuyler Maritime Alumni
1984 Association, Inc., successor to
Alumni Association of SUNY
Maritime 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 Fort
Schuyler Maritime Foundation,
Inc., successor to 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 Premier VIT.
Stanley W. Hong Trustee since President, Waste Management of 4 Trustee, Pacific Capital
Honolulu, HI 1992 Hawaii, Inc. and Corporate Vice Funds(R), which includes 12 bond
(04/05/36) President - Hawaii Area for and stock funds; First
Waste Management, Inc., Insurance Co. of Hawaii, Ltd.,
2001-2005; Trustee, The King Lanihau Properties, Ltd., The
William Charles Lunalilo Trust Westye Group - West (Hawaii),
Estate since 2001; President and Inc., Heald Education LLC.
Chief Executive Officer, The
Chamber of Commerce of Hawaii,
1996-2001; Director PBS - Hawaii
Foundation since 1998; Regent,
Chaminade University of Honolulu
since 1991; Trustee, the Nature
Conservancy of Hawaii since 1998;
Trustee, Child and Family Service
since 2005; Director, The East West
Center Foundation since 2006; St.
Louis School since 2007; and a
director of other corporate and
community organizations.
Russell K. Okata Trustee since Executive Director, Hawaii 5 Trustee, Pacific Capital
Honolulu, HI 1992 Government Employees Association Funds(R), which includes 12 bond
(03/22/44) AFSCME Local 152, AFL-CIO and stock funds; Chairman,
1981-2007; International Vice Royal State Group (insurance).
President, American Federation
of State, County and Municipal
Employees, AFL-CIO 1981-2007;
director of various civic and
charitable organizations.
Douglas Philpotts Trustee since Retired; formerly director, 4 Trustee, Pacific Capital
Honolulu, HI 1992 Chairman of the Board and Funds(R), which includes 12 bond
(11/21/31) President of Hawaiian Trust and stock funds.
Company, Limited, a predecessor of
The Asset Management Group of Bank
of Hawaii; present or former
director of various Hawaii-based
civic and charitable organizations.
Oswald K. Stender Trustee since Director, Hawaiian Electric 4 Trustee, Pacific Capital
Honolulu, HI 1992 Industries, Inc., a public Funds(R), which includes 12 bond
(10/08/31) utility holding company, and stock funds; director,
1993-2004; trustee, the Bernice Grace Pacific Corporation, an
Pauahi Bishop Estate 1990-1999; asphalt paving company, ACE
trustee, Office of Hawaiian Trucking Inc. and Hawaiian
Affairs and a member or trustee Telecom, a telephone company
of several community (communications).
organizations.
Other Individuals
Chairman Emeritus(8)
Lacy B. Herrmann Founder and 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 Aquila Group of
Trustees, Funds; Chairman of the Manager
1984-2003 or Administrator and/or Adviser
or Sub-Adviser to each since
2004; Founder and Chairman
Emeritus of each fund in the
Aquila Group of Funds;
previously Chairman and a
Trustee of each fund in the
Aquila Group of Funds since its
establishment until 2004 or
2005; 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 Aquila 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 since 1997 and formerly
Assistant Vice President of the
three Aquila Money-Market Funds;
Vice President, Aquila Rocky
Mountain Equity Fund since 2006;
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; Vice President, Aquila Rocky
Mountain Equity Fund since 2006.
Robert W. Anderson Chief Chief Compliance Officer of the N/A N/A
New York, NY Compliance Trust and each of the other
(08/23/40) Officer since funds in the Aquila Group of
2004 and Funds, the Administrator and the
Assistant Distributor since 2004,
Secretary Compliance Officer of the
since 2000 Administrator or its predecessor
and current parent 1998-2004;
Assistant Secretary of the Aquila
Group of Funds since 2000.
Joseph P. DiMaggio Chief Financial Chief Financial Officer of the N/A N/A
New York, NY Officer since Aquila Group of Funds since 2003
(11/06/56) 2003 and and Treasurer since 2000.
Treasurer since
2000
Edward M. W. Hines Secretary since Shareholder of Butzel Long, a N/A N/A
New York, NY 1984 professional corporation,
(12/16/39) counsel to the Trust, since
2007; Partner of Hollyer Brady
Barrett & Hines LLP, its predecessor
as counsel, 1989-2007; Secretary of
the Aquila Group of Funds.
John M. Herndon Assistant Assistant Secretary of the N/A N/A
New York, NY (12/17/39) Secretary since Aquila 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 Aquila 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 Aquila
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) or by visiting the EDGAR Database at the SEC's
internet site at www.sec.gov.
(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. Ms. Herrmann is the daughter of Lacy B. Herrmann,
the Founder and Chairman Emeritus of the Trust.
(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 Municipal Bond
Funds"; Aquila Rocky Mountain Equity Fund is an equity fund; Aquila Three Peaks
High Income Fund is a high income corporate bond fund; considered together,
these 12 funds, which do not include the dormant funds described in footnote 5,
are called the "Aquila Group of Funds."
(8) The Chairman Emeritus may attend Board meetings but has no voting power.
Securities Holdings of the Nominees
(as of 06/30/08)
Dollar Range of Aggregate Dollar Range of
Name of Ownership in Hawaiian Ownership in funds in the
Trustee Tax-Free Trust(1) Aquila Group of Funds (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
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, 2008, the Trust paid a total of $144,962 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 twelve funds in the Aquila Group of Funds,
which consist of three money-market funds, seven tax-free municipal bond funds,
a high-income corporate bond fund 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 Aquila Group of Funds during the Trust's fiscal
year. None of such nominees has any pension or retirement benefits from the
Trust or any of the other funds in the Aquila Group of Funds.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquila Group Trustee
Name Trust of Funds serves*
Theodore T. Mason $21,883 $134,500 8
Thomas W.
Courtney $21,800 $96,500 5
Stanley W. Hong $18,300 $69,000 4
Russell K. Okata $17,800 $79,333 4
Douglas Philpotts $18,300 $69,000 4
Oswald K. Stender $18,300 $69,000 4
* Messrs. Hong, Okata, Philpotts and Stender are also trustees of the 12 funds
in the Pacific Capital Funds(R) for which the Adviser is also investment
adviser. For the same period, these funds paid Trustee Hong $39,000, Trustee
Okata $44,000, Trustee Philpotts $41,500 and Trustee Stender $39,000.
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 Aquila Group of
Funds. As of June 30, 2008 these funds had aggregate assets of approximately
$4.9 billion, of which approximately $2.3 billion consisted of assets of the
tax-free municipal bond funds. AMC, which was founded in 1984, is currently
controlled by Mr. Lacy B. Herrmann and his wife, Mrs. Elizabeth B. Herrmann,
directly and through certain trusts, although it is anticipated that these
arrangements will change. During the fiscal year ended March 31, 2008 the Trust
paid $1,801,002 in fees to the Administrator.
During the fiscal year ended March 31, 2008, $1,269,862 was paid under
Part I of the Trust's Distribution Plan to Qualified Recipients with respect to
the Class A Shares, of which $65,568 was retained by the Distributor. With
respect to Class C Shares, during the same period $240,327 was paid under Part
II of the Plan and $80,109 was paid under the Shareholder Services Plan. Of
these total payments of $320,436, the Distributor received $71,610. All of such
payments were for compensation.
During the fiscal year ended March 31, 2008, the Trust paid $102,900 to
Butzel Long, a professional corporation ("Butzel Long"), independent counsel to
the Fund, and $2,061 to Hollyer Brady Barrett & Hines LLP, predecessor to Butzel
Long, for legal services. Edward M.W. Hines, Secretary of the Fund, is a
shareholder of Butzel Long, and was a partner of Hollyer Brady Barrett & Hines
LLP.
The Distributor currently handles the distribution of the shares of the
funds in the Aquila 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, 74% by Mr.
Herrmann and other members of his immediate family, and the balance by Aquila
Management Corporation.
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 Investment Company Act of 1940. 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
(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. Selection of the
independent registered public accounting firm is also ratified by the Board of
Trustees. The Audit Committee held two meetings 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 meetings of committees of which such Trustee was a member.
The Trust's policy is that all Trustees who can do so attend the Annual
Meeting. At the last Annual Meeting all of the Trustees were present.
The Trust has a Nominating Committee, consisting of all of the
Independent Trustees. The Nominating Committee held one meeting 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. Recommendations of
nominees from shareholders are not treated differently than proposals from other
sources. The charter of the Nominating Committee is available on the Trust's
website at www.aquilafunds.com.
Shareholder communications intended for the Board of Trustees (or one
or more specified Trustees) may be sent to them in care of the Administrator at
the above address.
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 at the Annual Meeting.
Ratification or Rejection
of Selection of
Independent Registered Public Accounting Firm
(Proposal No. 2 at the Annual Meeting)
Tait, Weller & Baker LLP ("TWB"), which is currently serving as the
Trust's independent registered public accounting firm, has been selected by the
Trust's Audit Committee and ratified by the Board of Trustees, including a
majority of the Independent Trustees, as the Trust's independent registered
public accounting firm for the fiscal year ending March 31, 2009. Such selection
is submitted to the shareholders for ratification or rejection.
The following table represents fees for professional audit services
rendered by TWB for the audit of the Trust's annual financial statements, and
fees billed for other services rendered by TWB, for the fiscal years ended March
31, 2007 and 2008.
2007 2008
Audit Fees $18,000 $18,000
Audit related fees 0 0
------- ------
Audit and audit related fees $18,000 $18,000
Tax fees (1) 3,000 3,000
All other fees 0 0
------ ------
Total $21,000 $21,000
====== ======
(1) Tax fees consisted of fees for tax consultation and tax compliance services.
TWB did not perform any services during the last fiscal year for the
Trust's investment adviser (the Adviser) or any entity controlling, controlled
by or under common control with the Adviser that provides services to the Trust.
All audit and non-audit services performed by TWB 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 TWB and has accepted TWB's representation that it is independent in
recommending re-appointment of it for the fiscal year ending March 31, 2009.
TWB has no direct or indirect financial interest in the Trust, the
Administrator or the Adviser. It is expected that representatives of TWB will
not be present at the meeting but will be available should any matter arise
requiring their presence.
Vote Required
Approval requires the affirmative votes of a majority of the shares
present at the Annual Meeting.
CONSIDERATION OF A REVISION
TO THE TRUST'S FUNDAMENTAL POLICIES
TO EXPAND THE TYPES
OF TAX-FREE OBLIGATIONS
IN WHICH THE TRUST CAN INVEST
(Proposal No. 1 of the Special Meeting)
Background and Reasons for the Proposal
The Trust's Prospectuses currently provide that the Trust invests in
"Hawaiian Obligations," which are tax-free municipal obligations which pay
interest exempt from Hawaiian state and regular Federal income taxes. In
general, all or almost all of these obligations are issued by the State of
Hawaii, its counties and various other local authorities. At least 80% of the
Trust's assets will always consist of such obligations of these issuers.
The Prospectuses further provide that Hawaiian Obligations are a type
of municipal obligation. They pay interest which bond counsel or other
appropriate counsel deems to be exempt from regular Federal and State of Hawaii
income taxes. Municipal obligations are issued by or on behalf of states,
territories and possessions of the United States and their political
subdivisions, agencies and instrumentalities to obtain funds for public
purposes.
Hawaiian Obligations include obligations of Hawaiian issuers and
certain non-Hawaiian issuers, of any maturity. The obligations of non-Hawaiian
issuers that the Trust can purchase as Hawaiian Obligations are those issued by
or under the authority of Guam, the Northern Mariana Islands, Puerto Rico and
the Virgin Islands. Interest paid on these obligations is currently exempt from
regular Federal and State of Hawaii income taxes. The Trust purchases the
obligations of these issuers only when obligations of Hawaiian issuers with the
appropriate characteristics of quality, maturity and coupon rate are
unavailable.
There are two principal classifications of municipal obligations:
"notes" and "bonds." Notes generally have maturities of one year or less, while
bonds are paid back over longer periods.
The various public purposes for which municipal obligations are issued include:
* obtaining funds for general operating expenses,
* refunding outstanding obligations,
* obtaining funds for loans to other public institutions and facilities,
and
* funding the construction of highways, bridges, schools, hospitals,
housing, mass transportation, streets and water and sewer works.
Municipal obligations include:
* tax, revenue or bond anticipation notes,
* construction loan notes,
* project notes, which sometimes carry a U.S. government guarantee,
* municipal lease/purchase agreements, which are similar to installment
purchase contracts for property or equipment, and
* floating and variable rate demand notes.
Inverse Floaters
The Trustees have determined that it would be in the best interests of
the Trust and its shareholders if the Trust had the authority to invest, under
appropriate market conditions, in certain derivative instruments known as
"inverse floaters." Although volatile, these instruments typically offer the
potential for yields exceeding the yields available on comparable fixed-rate
municipal bonds. The Trust would invest only in inverse floaters qualifying as
"Hawaiian Obligations" because their yields are exempt from Hawaiian state and
regular Federal income taxes.
Inverse floaters are instruments that pay interest at rates that bear
an inverse relationship to the interest rate on another security (inverse
floaters). An investment in inverse floaters may involve greater risk than an
investment in fixed-rate obligations because changes in the interest rate on the
other security inversely affect the residual interest paid on the inverse
floater. The value of the inverse floater is accordingly generally more volatile
than that of a fixed-rate municipal bond. Inverse floaters have interest rate
adjustment formulas which generally reduce or, in the extreme, eliminate the
interest rate received when short-term interest rates rise and increase the
interest received when short-term rates fall. For these reasons, tax-free
inverse floaters tend to underperform the market for fixed-rate municipal bonds
in a rising interest rate environment, but tend to outperform the market for
fixed-rate municipal bonds when interest rates decline. Shifts in long-term
interest rates may, however, alter this tendency.
Inverse floaters may be issued by the types of issuers - Hawaii, Guam,
the Northern Mariana Islands, Puerto Rico, the Virgin Islands and their
political subdivisions, agencies and instrumentalities - that issue the Hawaiian
Obligations in which the Trust normally invests and are already mentioned in the
Trust's Prospectus. In addition to these "municipal issuer inverse floaters,"
however, are "synthetic" tax-free inverse floaters, which are created by
investment banks and other companies by depositing municipal bonds in a trust,
which then issues certificates some of which have the characteristics of inverse
floaters.
The Trust has a number of policies concerning what it can and cannot
invest in. One of those policies, which cannot be changed without approval by
the Trust's shareholders, is that the Trust cannot buy any securities other than
those discussed in certain specified sections of the Trust's Prospectus and
Statement of Additional Information. Because municipal issuer inverse floaters
are issued by the kinds of issuers already discussed in the prospectus, the
Trust could gain the ability to invest in those securities simply by amplifying
the already-existing prospectus disclosure to inform investors of the
characteristic and risks of these distinctive instruments. However, because
synthetic tax-free inverse floaters are not issued by the issuers identified in
the current prospectus, inclusion of them in the prospectus will constitute a
change in the investment policy and will therefore require shareholder approval.
Synthetic inverse floaters that would qualify as Hawaiian Obligations
are generally more plentiful than municipal issuer inverse floaters that would
qualify as Hawaiian Obligations. Accordingly, the Trustees request the
shareholders to approve adding synthetic inverse floaters to the descriptions in
the Prospectuses of the types of Hawaiian Obligations that the Trust can
purchase, together with appropriate disclosure of the risks associated with such
investments.
The Trustees will authorize the purchase of inverse floaters only when
they are satisfied that relevant questions concerning investment in these
securities have been appropriately addressed. The proposal is submitted to the
shareholders at this time in order to permit the Trust to invest in synthetic as
well as municipal issuer inverse floaters if and when the Trustees so determine.
Action Requested
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE SHAREHOLDERS OF THE TRUST
VOTE TO APPROVE CHANGE TO THE TRUST'S PROSPOECTUSES
Vote Required
The favorable vote of the holders of a majority (as defined in the 1940
Act) of the outstanding shares of the Trust is required for the approval of this
Proposal No. 1. Under the 1940 Act, the vote of the holders of a majority of the
outstanding shares of the Trust means the vote of the holders of the lesser of
(a) 67% or more of the shares of the Trust present at the Meeting or represented
by proxy if the holders of more than 50% of such shares are so present or
represented, or (b) more than 50% of the outstanding shares of the Trust, with
one (1) 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 all of the Trust's four outstanding
classes of shares.
If necessary or desirable, the meeting can be adjourned by the
affirmative vote of a majority of the shares present in person or by proxy. In
voting for an adjournment, the proxies will consider all relevant factors,
including possible delay of receipt of proxies and whether or not a substantial
number of negative votes have been cast with respect to any proposal. The
proxies of shareholders who have voted by proxy against a proposal will be voted
against adjournment.
If this proposal is not approved by the shareholders the Board of
Trustees will consider what further action is appropriate, which could include
calling another shareholder meeting.
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 of this Proxy Statement.
Accordingly, a shareholder proposal intended to be presented at the Trust's 2009
annual meeting must be received by the Trust by March 19, 2009 in order to be
included in the Trust's proxy material relating to that meeting. 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.
A shareholder wishing to provide notice of a proposal in the manner
prescribed by Rule 14a-4 (c)(1) under the Securities Exchange Act of 1934 must
submit written notice of the proposal to the Trust by June 2, 2009.
Other Business
The Trust does not know of any other matter which will come up for
action at the Annual Meeting. If any other matter or matters properly come up
for action at the Annual Meeting, including any adjournment of the Annual
Meeting, the proxy holders will vote the shares which your proxy card, Internet
or telephone 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 the Internet or telephone, you give the proxy holders
discretionary authority as to any such matter or matters.
The Trust does not know of any other matter which will come up for
action at the Special Meeting. If any other matter or matters properly come up
for action at the Special Meeting, including any adjournment of the Special
Meeting, the proxy holders will vote the shares which your proxy card, Internet
or telephone 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 the Internet or telephone, you give the proxy holders
discretionary authority as to any such matter or matters.
Outreach Meeting
To enable shareholders who live a distance from Honolulu, the Trust
customarily holds outreach meetings at which shareholders can participate in all
activities of the annual meeting except the corporate business of voting on the
proposals discussed in the proxy statement. The outreach meeting this year will
be held on Wednesday, September 10, 2008 in Lihue, Kauai at 5:00 p.m.
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Hawaiian Tax-Free Trust
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
and
NOTICE OF SPEICAL MEETING OF SHAREHOLDERS
to be held on September 12, 2008
PROXY STATEMENT
HAWAIIAN TAX-FREE TRUST
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET VOTING
www.proxyvote.com/aquila
To vote your shares by the Internet, contact the Trust at
www.proxyvote.com/aquila. Follow the simple instructions at the website, using
this proxy card as a guide. If you vote by the Internet, you need not return the
proxy card by mail.
TELEPHONE VOTING
1-877-587-0761
To vote your shares by telephone, call toll-free 1-877-587-0761. 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.
VOTE BY MAIL
You can vote your shares by completing and returning this proxy card. Please
mark this 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:
KEEP THIS PORTION FOR YOUR RECORDS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Hawaiian Tax-Free Trust
1. Election of Trustees Nominees:
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 below.
- --------------------
[sentences 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 at right
or FOR if no choice is indicated.
2. Action on selection of Tait, Weller & Baker LLP as independent registered
public accounting firm. (Annual Meeting Proposal No. 2 in Proxy Statement)
For Against Abstain
-- -- --
[--] [--] [--]
As to any other matter said proxies shall vote in accordance with their best
judgment.
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(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.
- ----------------------------------------- ----
Signature(s) (PLEASE SIGN WITHIN THE BOX) Date
--
I plan to attend the annual meeting in Honolulu [__]
--
I plan to attend the outreach meeting in Lihue, Kauai [__]
Aquila Group of Funds
Hawaiian Tax-Free Trust
Proxy for Annual Meeting of Shareholders - September 12, 2008
Proxy Solicited on Behalf of the Board of Trustees
The shareholder(s) of Hawaiian Tax-Free Trust (the "Trust") whose
signature(s)appear(s) on the reverse does/do hereby appoint DIANA P. HERRMANN,
CHARLES E. CHILDS, III 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 12,
2008 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 on the reverse.
Please read the proxy statement prior to voting.
Annual Meeting Attendance - You are encouraged to attend the Annual Meeting of
Shareholders. If you can attend, 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 the reverse side.)
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ON THE REVERSE SIDE.
HAWAIIAN TAX-FREE TRUST
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET VOTING
www.proxyvote.com/aquila
To vote your shares by the Internet, contact the Trust at
www.proxyvote.com/aquila. Follow the simple instructions at the website, using
this proxy card as a guide. If you vote by the Internet, you need not return the
proxy card by mail.
TELEPHONE VOTING
1-877-587-0761
To vote your shares by telephone, call toll-free 1-877-587-0761. 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.
VOTE BY MAIL
You can vote your shares by completing and returning this proxy card. Please
mark this 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:
KEEP THIS PORTION FOR YOUR RECORDS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Hawaiian Tax-Free Trust
1. Action on a revision of the Trust's Fundamental Policies to expand the types
of tax-free obligations in which the Trust can invest. (Special Meeting Proposal
No. 1 in Proxy Statement)
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 below.
- --------------------
As to any other matter said proxies shall vote in accordance with their best
judgment.
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(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.
- ----------------------------------------- ----
Signature(s) (PLEASE SIGN WITHIN THE BOX) Date
I plan to attend the special meeting in Honolulu [__]
Aquila Group of Funds
Hawaiian Tax-Free Trust
Proxy for Special Meeting of Shareholders - September 12, 2008
Proxy Solicited on Behalf of the Board of Trustees
The shareholder(s) of Hawaiian Tax-Free Trust (the "Trust") whose
signature(s)appear(s) on the reverse does/do hereby appoint DIANA P. HERRMANN,
CHARLES E. CHILDS, III and EDWARD M. W. HINES, or any of them, as attorneys and
proxies of the undersigned, with full power of substitution, to attend the
Special Meeting of Shareholders of the Trust to be held on Friday, September 12,
2008 at the Ala Moana Hotel, Hibiscus Ballroom, 410 Atkinson Drive, Honolulu,
Hawaii, at 10:10 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 matter 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.
Please read the proxy statement prior to voting.
Special Meeting Attendance - You are encouraged to attend the Special Meeting of
Shareholders. If you can attend, 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 the reverse side.)
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ON THE REVERSE SIDE.