-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Oe4rog4byfNzX1crv+2kZBpccH2adM1TKK6jD29UX73Ww55ZdHFVbUzVsJHRAESv 0mgOPeP/fR1nzwl9mdHtNw== 0000750909-05-000016.txt : 20050811 0000750909-05-000016.hdr.sgml : 20050811 20050811095953 ACCESSION NUMBER: 0000750909-05-000016 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050921 FILED AS OF DATE: 20050811 DATE AS OF CHANGE: 20050811 EFFECTIVENESS DATE: 20050811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN TAX FREE TRUST CENTRAL INDEX KEY: 0000750909 IRS NUMBER: 136845048 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-04084 FILM NUMBER: 051015332 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE #2300 STREET 2: #2300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: #2300 CITY: NEW YORK STATE: NY ZIP: 10017 DEF 14A 1 hipx05.txt PROXY STATEMENT AND FORM OF CARD 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 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. 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. 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. -----END PRIVACY-ENHANCED MESSAGE-----