IMPORTANT NOTICE PLEASE READ IMMEDIATELY HAWAIIAN TAX-FREE TRUST 380 Madison Avenue, Suite 2300, New York, N Y 10017 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 29, 1999 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 October 29, 1999 at 10:00 a.m. local time; Purposes: (c) for the following purposes: (i) to elect eleven 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; (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, 2000 (Proposal No. 1); and PLEASE NOTE: If you do not expect to attend the Meeting, please indicate voting instructions in any of three ways: by telephone, by e-mail or by completing the enclosed proxy 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. (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 August 5, 1999 (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 September 15, 1999 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. A copy of the Trust's most recent annual report and most recent semi-annual report will be sent to you without charge upon written request to the Trust's Distributor, Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New York, NY 10017 or by calling 800-228-4227 toll-free or 212-697-6666. The Trust's organizer 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. Pacific Century Trust, Financial Plaza of the Pacific, P.O. Box 3170, Honolulu, Hawaii 96802 is the Trust's Investment Adviser. This Notice and Proxy Statement are first being mailed on or about September 15, 1999. You can vote in three ways: Proxy Ballot 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 that 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 any box on the proposal, the proxy holders will vote your shares for the proposal. Telephone Voting You can vote your shares by telephone. You should first read the Proxy Statement. To vote, call toll free 1-800-690-6903. You will be prompted to enter the 12-digit control number on the enclosed proxy card. Follow the recorded instruction using your proxy card as a guide. If you vote by phone, do not return the proxy card by mail. Internet Voting You can vote your shares by the Internet. You should first read the Proxy Statement. To vote, contact the Trust at http://www.proxyvote.com. You will be prompted to enter the 12- digit control number on the enclosed proxy card. Follow the instructions on the screen, using your proxy card as a guide. If you vote by the Internet, do not return the proxy card by mail. 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 above or contacting the Trust's internet address above, entering your 12-digit 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. 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. 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, $11.25; Class C Shares, $11.24; and Class Y Shares, $11.26. The meeting is expected to act only upon matters that affect the Trust as a whole: the election of Trustees and the action on the selection of auditors (Proposal No. 1). On matters that affect the Trust as a whole, all shareholders of the Trust, including the shareholders of all classes 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, 41,849,503; Class C Shares, 450,345; and Class Y Shares, 304,182. Of the shares of the Trust outstanding on the record date Of the shares of the Trust outstanding on the record date, Merrill Lynch Pierce Fenner & Smith, Inc., 4800 Deer Lake Drive, Jacksonville, FL held of record 7,296,507 Class A Shares (13.3% of the class) and 309,415 Class C Shares (28.3% of the class) and BHC Securities Inc., 2005 Market Street, Philadelphia, PA held of record 7,296,507 Class A Shares (7.7% of the class).On the basis of information received from the holders, the Trust's management believes that all of the shares indicated are held for the benefit of clients. . Martha N. Steele, Trustee of the Martha San Nicholas Steele Declaration of Trust, Honolulu, Hawaii held of record 143,224 Class Y Shares (46.9% of the class), James D. McDowell, Haiku, Hawaii held of record 23,772 Class Y Shares (7.8% of the class); and L.T. Miccio and B.A. Annis, Trustees, Honolulu, Hawaii, held of record 28,861 Class Y Shares (9.5% of the class); L.T. Miccio, Trustee, held of record 35,544 Class Y Shares (11.6% of the class). The Trust's management is not aware of any other person who beneficially owned 5% or more of its outstanding shares on such date. ELECTION OF TRUSTEES At the Meeting, eleven Trustees are to be elected. 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. 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 instruct the proxy holders as to the voting of your shares as to the election of Trustees. All of the nominees are presently Trustees, and were previously elected by the shareholders at the annual meeting of the Trust held on September 10, 1998. Mr. Herrmann, Mr. Cole and Mr. Courtney have been Trustees since the beginning of the Trust's operations in February 1985. Mr. Carlson has been a Trustee since 1987, and Mr. Alden, since 1989. Messrs. Gushman, Hong, Philpotts, Okata and Stender have been Trustees since 1992. Each of the Trustees holds the same positions with the Pacific Capital Funds of Cash Assets Trust: Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, and Pacific Capital U.S. Government Securities Cash Assets Trust, money market fund portfolios having the same Adviser and Administrator as the Trust. The beneficial ownership of shares indicated below includes voting and investment control unless otherwise indicated. Shares are given to the nearest full share. All shares are Class A Shares unless otherwise indicated. The Trustees and officers as a group own less than 1% of the outstanding shares of the Trust. In the table below and elsewhere in this Proxy Statement, Aquila Management Corporation, the Trust's founder and Administrator, is referred to as the "Administrator" and the Trust's Distributor, Aquila Distributors, Inc., is referred to as the "Distributor." 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 a shareholder of the Adviser's corporate parent. They are so designated by an asterisk. (See "Other Information," below for a description of certain agreements among them and the Trust, including provisions about persons suggested by them to be Trustees.) In the following material Pacific Capital Cash Assets Trust, Churchill Cash Reserves 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 together with Capital Cash Management Trust ("CCMT") called the "Aquila Money-Market Funds"; Hawaiian Tax-Free Trust (this 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." Described in the following material are the name, positions with the Trust, age as of the record date and business experience during at least the past five years (other than with the Trust) of each nominee and all officers of the Trust. All shares listed as owned by the Trustees are Class A Shares unless indicated otherwise. Lacy B. Herrmann* Chairman Founder and Chairman of 380 Madison Avenue of the the Board of Aquila New York, New York Board of Management Corporation, 10017 Trustees the sponsoring organization Age: 70 and Manager or Administrator and/or Shares owned: 939 (1) Adviser or Sub-Adviser to the Aquila Money Market Funds, the Aquila Bond Funds and the Aquila Equity Funds, and founder, Chairman of the Board of Trustees and (currently or until 1998) President of each since its establishment, beginning in 1984; Director of Aquila Distributors, Inc., distributor of the above funds, since 1981 and formerly Vice President or Secretary, 1981-1998; President and a Director of STCM Management Company, Inc., sponsor and sub-adviser to CCMT; Founder and Chairman of several other money market funds; Director or Trustee of OCC Cash Reserves, Inc. and Quest For Value Accumulation Trust, and Director or Trustee of Oppenheimer Quest Value Fund, Inc., Oppenheimer Quest Global Value Fund, Inc. and Oppenheimer Rochester Group of Funds, each of which is an open-end investment company; Trustee of Brown University, 1990-1996 and currently Trustee Emeritus; actively involved for many years in leadership roles with university, school and charitable organizations. (1) Held of record by the Administrator. Vernon R. Alden Trustee Director of Sonesta 20 Park Plaza International Hotels Suite 1010 Corporation, Boston, General Boston, Independent Partner of Massachusetts 02116 the Merrill Lynch-Lee Funds; Age: 76 Former Director of Colgate- Shares owned: 185 Palmolive Company, Digital Equipment Corporation, Intermet Corporation, The McGraw- Hill and The Mead Corporation; Chairman of the Board and Executive Committee of The Boston Company, Inc., a financial services company, 1969-1978; Trustee of Tax-Free Trust of Oregon since 1988, of Hawaiian Tax-Free Trust (this Trust), Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1989, of Cascades Cash Fund, 1989-1994, of Narragansett Insured Tax-Free Income Fund since 1992, and of Aquila Cascadia Equity Fund since 1996; Associate Dean and member of the faculty of Harvard University Graduate School of Business Administration, 1951-1962; member of the faculty and Program Director of Harvard Business School - University of Hawaii Advanced Management Program, summer of 1959 and 1960; President of Ohio University, 1962-1969; Chairman of The Japan Society of Boston, Inc., and member of several Japan-related advisory councils; Chairman of the Massachusetts Business Development Council and the Massachusetts Foreign Business Council, 1978- 1983; Trustee Emeritus, Boston Symphony Orchestra; Chairman of the Massachusetts Council on the Arts and Humanities, 1972-1984; Member of the Board of Fellows of Brown University, 1969-1986; Trustee of various other cultural and educational organizations; Honorary Consul General of the Royal Kingdom of Thailand; Received decorations from the Emperor of Japan (1986) and the King of Thailand (1996 and 1997). Arthur K. Carlson Trustee Retired; Advisory Director 8702 North Via La Serena of the Renaissance Companies Paradise Valley, Arizona (design and construction 85253 companies of commercial, Age: 77 industrial and upscale residential Shares owned: 1,086 (2) properties) since 1996; Senior Vice President and Manager of the Trust Division of The Valley National Bank of Arizona, 1977- 1987; Trustee of Tax-Free Fund of Colorado, Hawaiian Tax-Free Trust (this Trust), Tax-Free Trust of Arizona and Pacific Capital Cash Assets Trust since 1987, of Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1988 and of Aquila Rocky Mountain Equity Fund since 1993; previously Vice President of Investment Research at Citibank, New York City, and prior to that Vice President and Director of Investment Research of Irving Trust Company, New York City; past President of The New York Society of Security Analysts and currently a member of the Phoenix Society of Financial Analysts; formerly Director of the Financial Analysts Federation; past Chairman of the Board and past Director of Mercy Healthcare of Arizona, Phoenix, Arizona; Director of St. Joseph's Hospital Foundation since 1996 and Director of Northern Arizona University Foundation since 1990, present or formerly an officer and/or director of various other community and professional organizations. (1) Held in street name. William M. Cole Trustee President of Cole 852 Ramapo Way International, Westfield, New Jersey Inc., financial and 07090 shipping consultants, Age: 68 since 1974; President of Cole Shares owned: 84 Associates, shopping center and real estate developers, 1974-1976; President of Seatrain Lines, Inc., 1970-1974; former General Partner of Jones & Thompson, international shipping brokers; Trustee of Pacific Capital Cash Assets Trust since 1984, of Hawaiian Tax-Free Trust (this Trust) since 1985, of Tax-Free Fund of Colorado since 1987 and of Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1988; Chairman of Cole Group, a financial consulting and real estate firm, since 1985. Thomas W. Courtney Trustee President of Courtney P.O. Box 8186 Associates, Inc., a venture Naples, Florida 33941 capital firm, since 1988; Age: 65 General Partner of Trivest Venture Shares owned: 1,759 Fund, 1983-1988; President of Federated Investment counseling Inc., 1975-1982; President of Boston Company Institutional Investors, Inc., 1970- 1975; formerly a Director of the Financial Analysts Federation; Trustee of Hawaiian Tax-Free Trust (this Trust) and Pacific Capital Cash Assets Trust since 1984, of Tax-Free Trust of Arizona since 1986 and of Pacific Capital Tax- Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1988; Trustee of numerous Oppenheimer Capital and Oppenheimer Management Funds. Richard W. Gushman II Trustee President and Chief 700 Bishop Street Executive Officer of Suite 222 OKOA, INC., a private Honolulu, Hawaii 96813 Hawaii corporation Age: 53 involved in real estate; adviser to Shares owned: 689 RAMPAC, Inc., a wholly owned subsidiary of the Bank of Hawaii, involved with commercial real estate finance; Trustee of Hawaiian Tax-Free Trust (this Trust) since 1992 and of Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1993; Trustee of Pacific Capital Funds, which includes bond and stock funds, since 1993; Trustee of the University of Hawaii Foundation and of Hawaii Pacific University; Member of the Boards of Aloha United Way, Boys and Girls Club of Honolulu and Oceanic Cablevision, Inc. Stanley W. Hong Trustee President and Chief 4976 Poola Street Executive Officer Honolulu, Hawaii 96821 of The Chamber of Age: 63 Commerce of Hawaii since 1996; Shares owned: 1,196 (3) Business consultant since 1994; Senior Vice President of McCormack Properties, Ltd., 1993- 1994; President and Chief Executive of the Hawaii Visitors Bureau, 1984- 1993; Vice President, General Counsel and Corporate Secretary at Theo, Davies & Co., Ltd., a multiple business company, 1973- 1984; formerly Legislative Assistant to U.S. Senator Hiram L. Fong; member of the Boards of Directors of several community organizations; Trustee of Hawaiian Tax-Free Trust (this Trust) since 1992 and of Pacific Capital Cash Assets Trust, Pacific Capital Tax- Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1993; Trustee of Pacific Capital Funds, which includes bond and stock funds, since 1993; Director of Capital Investment of Hawaii, Inc. since 1995 (Real Estate and Wholesale Bakery); Director, Central Pacific Bank since 1985; Trustee of Nature Conservancy of Hawaii since 1990; Regent of Chaminade University of Honolulu since 1990. (3) Held in the name of his wife. Theodore T. Mason Trustee Managing Director of 26 Circle Drive, EastWind Power New York 10706 Partners, Ltd. since Age: 63 1994; Hastings- on-Hudson, Second Shares owned: 832 Vice President, Alumni Association, SUNY Maritime College 1998; Director for the same organization, 1997; Director of Cogeneration Development of Willamette Industries, Inc., a forest products company, 1991-1993; Vice President of Corporate Development of Penntech Papers, Inc., 1978-1991; Vice President of Capital Projects for the same company, 1977-1978; Vice Chairman of the Board of Trustees of CCMT since 1981; Trustee and Vice President, 1976-1981, and formerly Director of its predecessor; Director of STCM Management Company, Inc.; Vice Chairman of the Board of Trustees and Trustee of Prime Cash Fund (which is inactive) since 1982; Trustee of Short Term Asset Reserves, 1984-1986 and 1989- 1996, of Hawaiian Tax-Free Trust (this Trust) and Pacific Capital Cash Assets Trust since 1984, of Churchill Cash Reserves Trust since 1985, of Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1988 and of Churchill Tax-Free Fund of Kentucky since 1992; Vice President and Trustee of Oxford Cash Management Fund, 1983-1989; Vice President of Trinity Liquid Assets Trust, 1983- 1985; President and Director of Ted Mason Venture Associates, Inc., a venture capital consulting firm, 1972-1980; Advisor to the Commander, U.S. Maritime Defense Zone Atlantic, 1984-1988; National Vice President, Surface/Subsurface, Naval Reserve Association, 1985- 1987; National Vice President, Budget and Finance, for the same Association, 1983-1985; Commanding Officer of four Naval Reserve Units, 1974-1985; Captain, USNR, 1978-1988. Russell K. Okata Trustee Executive Director, Hawaii 888 Miliani Street Government Employees Suite 601, Association AFSCME Honolulu, Hawaii 96813-298 Local 152, AFL-CIO; Age: 55 Trustee of Hawaiian Tax-Free Trust Shares owned: 623 (4) (this Trust) since 1992 and of Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1993; Trustee of Pacific Capital Funds, which includes bond and stock funds, since 1993; Chairman of the Royal State Insurance Group since 1988; Trustee of the Blood Bank of Hawaii since 1975 (Chair 1982-1984); International Vice President of the American Federation of State, Country and Municipal Employees, AFL-CIO since 1981; Director of the Rehabilitation Hospital of the Pacific since 1981; Trustee of the Public Schools of Hawaii Foundation since 1986; Member of the Judicial Council of Hawaii since 1987; and 1997 chair of the Hawaii Community Foundation. (4) Held jointly with his wife. Douglas Philpotts* Trustee Retired; Director of P.O. Box 3170 Financial Plaza of the Honolulu, Hawaii 96802 Pacific Hawaiian Trust Age: 67 Company, Limited 1986-1997; Shares owned: 994 (5) Chairman of the Board, 1992- 1994 and President, 1986- 1992;Director of Victoria Ward, Limited; Trustee of Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, Pacific Capital U.S. Government Securities Cash Assets Trust and Hawaiian Tax- Free Trust (this Trust) since 1992; Trustee of Pacific Capital Funds, which includes bond and stock funds, since 1993; Trustee of the Strong Foundation; present or former director or trustee of a number of civic and charitable organizations in Hawaii. (5) Held as trustee of a personal trust. Oswald K. Stender Trustee Director of Hawaiian P. O. Box 3466 Electric Industries, Honolulu, Hawaii 96801 Inc., a public utility Age:67 holding company, since 1993; Shares owned: 546 Trustee of the Bernice Pauahi Bishop Estate 1990- 1999; Senior Advisor to the Trustees of The Estate of James Campbell, 1987- 1989 and Chief Executive Officer, 1976-1988; Director of several housing and real estate associations; Director, member or trustee of several community organizations; Trustee of Hawaiian Tax-Free Trust (this Trust) since 1992 and of Pacific Capital Cash Assets Trust, Pacific Capital Tax- Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1993; Trustee of Pacific Capital Funds, which includes bond and stock funds, since 1993. Diana P. Herrmann, President President and Chief 380 Madison Avenue Operating Officer of the New York, New York Administrator since 10017 since 1997, a Director since Age: 41 1984, Secretary since 1986 and previously its Executive Vice President, Senior Vice President or Vice President, 1986-1997; President of various Aquila Bond and Money-Market Funds since 1998; Assistant Vice President, Vice President, Senior Vice President or Executive Vice President of Aquila Money-Market, Bond and Equity Funds since 1986; Trustee of a number of Aquila Money- Market, Bond and Equity Funds since 1995; Trustee of Reserve Money- Market Funds since 1999 and Reserve Private Equity Series since 1998; Assistant Vice President and formerly Loan Officer of European American Bank, 1981-1986; daughter of the Trust's Chairman; Trustee of the Leopold Schepp Foundation (academic scholarships) since 1995; actively involved in mutual fund and trade associations and in college and other volunteer organizations. Sherri Foster Vice Senior Vice President of 100 Ridge Road President Hawaiian Tax-Free Suite 1813-15 Trust (this Trust) since 1993, Lahaina, Hawaii 96761 President, Vice Age: 49 President, 1988-1992 and Assistant Vice President, 1985-1988; Assistant Vice President of Pacific Capital Cash Assets Trust since 1985 and of Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust since 1988; Vice President of Aquila Cascadia Equity Fund since 1998; Registered Representative of the Distributor since 1985; Realtor-Associate of Tom Soeten Realty; Sherian Bender Realty, successor to John Wilson Enterprises, 1983-1998; Executive Secretary of the Hyatt Regency, Maui, 1981-1983. Stephen J. Caridi Vice Vice President of the 380 Madison Avenue President Distributor since 1995, New York 10017 Assistant Vice President, Age: 38 1988-1995, Marketing Associate, 1986-1988; Vice President of Hawaiian Tax-Free Trust (this Trust) since 1998; Senior Vice President of Narragansett Insured Tax-Free Income Fund since 1998, Vice President since 1996; Assistant Vice President of Tax-Free Fund For Utah since 1993; Mutual Funds Coordinator of Prudential Bache Securities, 1984-1986; Account Representative of Astoria Federal Savings and Loan Association, 1979- 1984. Rose F. Marotta Chief Chief Financial Officer 380 Madison Avenue Financial of the Aquila Money- New York, New York Officer Market, Bond and Equity 10017 Funds since 1991 and Age: 74 Treasurer, 1981- 1991; formerly Treasurer of the predecessor of CCMT; Treasurer and Director of STCM Management Company, Inc., since 1974; Treasurer of Trinity Liquid Assets Trust, 1982-1986 and of Oxford Cash Management Fund, 1982-1988; Treasurer of InCap Management Corporation since 1982, of the Administrator since 1984 and of the Distributor since 1985. Richard F. West Treasurer Treasurer of the Aquila Money- Market, Bond and Equity Funds 380 Madison Avenue and of Aquila Distributors, New York, New York 10017 Inc. since 1992; Associate Director Age: 63 of Furman Selz Incorporated, 1991-1992; Vice President of Scudder, Stevens & Clark, Inc. and Treasurer of Scudder Institutional Funds, 1989- 1991; Vice President of Lazard Freres Institutional Funds Group, Treasurer of Lazard Freres Group of Investment Companies and HT Insight Funds, Inc., 1986-1988; Vice President of Lehman Management Co., Inc. and Assistant Treasurer of Lehman Money Market Funds, 1981- 1985; Controller of Seligman Group of Investment Companies, 1960-1980. Edward M. W. Hines Secretary Partner of Hollyer Brady 551 Fifth Avenue Smith Troxell Barrett New York, New York 10176 Rockett Hines & Mone Age: 59 LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary of the Aquila Money- Market, Bond and Equity Funds since 1982; Secretary of Trinity Liquid Assets Trust, 1982-1985 and Trustee of that Trust, 1985-1986; Secretary of Oxford Cash Management Fund, 1982-1988. John M. Herndon Assistant Assistant Secretary of 380 Madison Avenue Secretary the Aquila Money-Market, New York, New York Bond and Equity Funds 10017 since 1995 and Vice Age: 59 President of the Aquila Money-Market Funds since 1990; Vice President of the Administrator since 1990; Investment Services Consultant and Bank Services Executive of Wright Investors' Service, a registered investment adviser, 1983-1989; Member of the American Finance Association, the Western Finance Association and the Society of Quantitative Analysts. The Trust does not currently pay fees to any of the Trust's officers or to Trustees affiliated with the Administrator or the Adviser. For its fiscal year ended March 31, 1999 the Trust paid a total of $169,327 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 Trustees who received compensation from the Trust and the compensation they received during the Trust's fiscal year from other funds in the Aquilasm Group of Funds. None of such Trustees has any pension or retirement benefits from the Trust or any of the other Trusts in the Aquila group. Compensation Number of from all boards on Compensation Trusts in the which the from the Aquilasm Trustee Name Trust Group serves Vernon R. Alden $14,495 $50,188 7 Arthur K. Carlson $15,313 $54,795 7 William M. Cole $14,902 $42,515 5 Thomas W. Courtney $15,585 $47,855 5 Richard W. Gushman, II $14,593 $35,058 4 Stanley W. Hong $14,063 $36,605 4 Theodore T. Mason $14,414 $47,453 8 Russell K. Okata $13,617 $34,961 4 Douglas Philpotts $12,767 $30,597 4 Oswald K. Stender $14,321 $34,500 4 Certain Trustees are also trustees of the funds in the Pacific Capital Group of Funds for which the Adviser is also investment adviser. During the calendar year 1998, these funds paid the following Trustees the amounts listed: Mr. Gushman, $18,500; Mr. Hong, $18,500; Mr. Okata, $18,500; Mr. Philpotts, $16,000; and Mr. Stender, $16,000. 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, which consists of tax-free municipal bond funds, money-market funds and equity funds. As of June 30, 1999, these funds had aggregate assets of approximately $3.2 billion, of which approximately $1.9 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. For the Trust's fiscal year ended March 31, 1999, $912,501 and $1,694,655 respectively were paid to the Adviser and Administrator. During the fiscal year ended March 31, 1999, $1,282,269 was paid under Part I of the Trust's Distribution Plan to Qualified Recipients. Of that amount, $70,253 was paid to the Distributor. During the same period $63,590 was paid to Qualified Recipients under Part II of the Plan with respect to the Trust's Class C Shares, of which $24,017 was retained by the Distributor. 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 72% by Mr. Herrmann and other members of his immediate family, 24% by Diana P. Herrmann and the balance by an officer of the Distributor. Other Information on Trustees The Trustees have appointed an 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 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 two meetings 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. All current Trustees were 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). RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT AUDITORS (Proposal No. 1) KPMG LLP, 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, 2000. Such selection is submitted to the shareholders for ratification or rejection. The firm 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 the firm 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. 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. HAWAIIAN TAX-FREE TRUST PROXY FOR SHAREHOLDERS MEETING OCTOBER 29, 1999 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, October 29, 1999 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 below. Such shares are entitled to one vote for every dollar of net asset value represented by the share balance printed below. Telephone Voting (Touch-tone only) You can vote you shares by telephone. Read the proxy statement. To vote, 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 instruction using this proxy card as a guide. If you vote by phone, do not return the proxy card by mail. Internet voting You can vote your shares by the internet. Read the proxy statement. To vote, 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, do not return the proxy card by mail. Proxy Card Voting 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. MANAGEMENT RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW AND FOR THE PROPOSALS LISTED BELOW. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED BELOW OR FOR IF NO CHOICE IS INDICATED. As to any other matter said attorneys shall vote in accordance with their best judgment. Annual Meeting Attendance We encourage you to attend the Annual Meeting of Shareholders. If you can join us on October 29, please call us at 1-800-228-4227, e-mail us at info@aquilafunds.com or mail the planning card back to us along with your proxy vote. 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 For address changes and/or comments, please check this box and write them on the back where indicated. __ [__] Vote on Trustees 2. Election of Trustees. 1) Lacy B. Herrmann; 2) Vernon R. Alden; 3) Arthur K. Carlson; 4) William M. Cole; 5) Thomas W. Courtney; 6) Richard W. Gushman, II; 7) Stanley W. Hong; 8) Theodore T. Mason; 9)Russell K. Okata; 10)Douglas Philpotts; 11) Oswald K. Stender __ [__] For all __ [__] Withhold all __ [__] For all except To withhold authority to vote, mark "For all Except" and write the nominee's number on the line below. ________________ Vote on Proposals 1. Action on selection of KPMG LLP as independent auditors (Proposal No.1 in Proxy Statement) __ __ __ FOR [__] AGAINST [__] ABSTAIN [__] 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. _________________________________Dated: _________ Signature [Please sign within the box] _________________________________Dated: __________ Signature (Joint Owners)