HAWAIIAN TAX-FREE TRUST
380 Madison Avenue, Suite 2300, New York, N.Y. 10017
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
on September 10, 1998
TO OUR SHAREHOLDERS:
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 10, 1998
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 Peat Marwick LLP as the
Trust's independent auditors for the fiscal
year ending March 31, 1999
(Proposal No. 1);and
PLEASE NOTE:
If you do not expect to attend the Meeting, you are requested to
indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying stamped envelope. To avoid
unnecessary expense to the Trust, your cooperation is requested
in mailing in your proxy no matter how large or small your
holding may be.
<PAGE>
(iii) to act upon any other matters which may
properly come before the Meeting at 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, 1998
(the "record date"). Also, the number of
shares of each of the Trust's three
classes of shares that you held at that
time and the respective net asset values
of each class of shares at that time
determines 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 1, 1998
<PAGE>
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
remainder of this document) is to give you information on which
you may base your decisions as to the choices, if any, you make
on the enclosed proxy card.
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 August 1, 1998.
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 striking a line through the nominee's name
on the proxy card.
As to the other matters listed on the proxy card, you may
direct the proxy holders to vote your shares on those proposals
by checking the appropriate box "For" or "Against" or instruct
them not to vote your shares on a proposal by checking the
"Abstain" box. If you return your signed proxy card and do not
check any box on a proposal, the proxy holders will vote your
shares for that proposal. Shares held by brokers in "street name"
and not voted or marked as abstentions will not be counted for
purposes of determining a quorum.
You may end the power of the proxy holders to vote your
shares, after you have signed and returned your proxy card but
before the power is used 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); or (iii) voting
your shares at the meeting in person or by your duly appointed
agent.
The Trust is sending you this Notice and Proxy Statement in
connection with the solicitation by its Trustees of proxy cards
("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 these shares. The Trust will pay these
firms for 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 of all three classes
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 classes of shares was as follows: Class A Shares, $11.67;
Class C Shares, $11.66; and Class Y Shares, $11.68. The meeting
will act upon matters that affect the Fund as a whole: the
election of Trustees and the action on the selection of auditors
(Proposal No. 1). On matters that affect the Fund as a whole, all
shareholders of the Fund, including the shareholders of all three
classes of the Fund are entitled to vote at the meeting.
On the record date the total number of shares of the Trust
outstanding and entitled to vote was 55,629,014. Of the shares of
the Trust outstanding on the record date, Merrill Lynch Pierce
Fenner & Smith, Inc., P.O. Box 30561, New Brunswick, NJ, held of
record 7,628,026 Class A Shares (13.9% of the class) and 97,768
Class C Shares (14.9% of the class) and BHC Securities Inc., 2005
Market Street, Philadelphia, PA held of record 3,604,402 Class A
Shares (6.6% of the class) and 47,373,703 Class C Shares (7.2% 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. James D. McDowell,
Haiku, Hawaii held of record 22,432 Class Y Shares (14.6% of the
class), Martha S.N. Steele as Trustee for Martha San Nicholas
Steele, Honolulu, Hawaii, held of record 118,465 Class Y Shares
(77.1% of the class) and Nancy Lee Barton, Trustee of the Nancy
Lee Barton Trust, Honolulu, Hawaii, held of record 10,352 Class Y
Shares (6.7% of the class). The Trust's management is not aware
of any other person beneficially owning more than 5% of its
outstanding shares as of 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 29, 1997. 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.)
Described in the following material are the name, positions
with the Trust, age as of July 6, 1998, and business experience
during at least the past five years (other than with the Trust)
of each nominee and all officers of the Trust.
Lacy B. Herrmann*, President and Chairman of the Board of
Trustees, Age: 69, Shares Owned: 1,651(1)
Founder and Chairman of the Board since 1984 and President, 1984-
1997, of Aquila Management Corporation, the sponsoring
organization, Administrator and in some instances also Adviser or
Sub-Adviser of the following open-end investment companies, and
Founder, Chairman of the Board of Trustees, and President of
each: Tax-Free Trust of Arizona since 1986; Tax-Free Trust of
Oregon since 1986; Tax-Free Fund of Colorado since 1987;
Churchill Tax-Free Fund of Kentucky since 1987; Tax-Free Fund For
Utah since 1992; and Narragansett Insured Tax-Free Income Fund
since 1992; each of which is a tax-free municipal bond fund, and
two equity funds, Aquila Rocky Mountain Equity Fund since 1993
and Aquila Cascadia Equity Fund since 1996, which, together with
this Trust are called the Aquila Bond and Equity Funds; Pacific
Capital Cash Assets Trust since 1984; Churchill Cash Reserves
Trust since 1985; Pacific Capital U.S. Government Securities Cash
Asset Trust since 1988; Pacific Capital Tax-Free Cash Assets
Trust since 1988; each of which is a money market fund, and
together with Capital Cash Management Trust ("CCMT") are called
the Aquila Money-Market Funds; Vice President and Director, and
formerly Secretary of Aquila Distributors, Inc. since 1981,
distributor of the above funds; President and Chairman of the
Board of Trustees of CCMT, a money market fund since 1981, and an
Officer and Trustee/Director of its predecessors since 1974;
Chairman of the Board of Trustees and President of Prime Cash
Fund (which is inactive), since 1982 and of Short Term Asset
Reserves 1984-1996; President and a Director of STCM Management
Company, Inc., sponsor and sub-adviser to CCMT; Chairman,
President, and a Director since 1984, of InCap Management
Corporation, formerly sub-adviser and administrator of Prime Cash
Fund and Short Term Asset Reserves, and 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) Includes 487 shares held of record by his wife and 939 shares
held of record by the Administrator. In addition, the
Administrator holds of record 10 Class Y Shares.
Vernon R. Alden, Trustee, Age: 75, Shares Owned: 184
Director of Intermet Corporation, an independent foundry, since
1986, and Sonesta International Hotels Corporation since 1978;
Former Director of Digital Equipment Corporation, a computer
manufacturing corporation, Colgate Palmolive, 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, 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 of the Boston Symphony Orchestra since 1975;
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, Age: 76, Shares Owned: 1,027(2)
Retired; Advisory Director of the Renaissance Companies (design
and construction companies of commercial, industrial and upscale
residential 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, 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.
(2) Held of record by a nominee
William M. Cole, Trustee, Age: 67, Shares Owned: 1,640
President of Cole International, Inc., financial and shipping
consultants, since 1974; President of Cole 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 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, C.F.A., Trustee, Age: 64, Shares Owned: 1,664
President of Courtney Associates, Inc., a venture capital firm,
since 1988; General Partner of Trivest Venture 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 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 for numerous Oppenheimer
Capital and Oppenheimer Management Funds.
Richard W. Gushman, II, Trustee, Age: 52, Shares Owned: 651
President and Chief Executive Officer of OKOA, INC., a private
Hawaii corporation involved in real estate; adviser to RAMPAC,
Inc., a wholly owned subsidiary of the Bank of Hawaii, involved
with commercial real estate finance; Trustee 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; Member of the Boards of Aloha United
Way, Downtown Improvement Association, Boys and Girls Club of
Honolulu and Oceanic Cablevision, Inc.
Stanley W. Hong, Trustee, Age: 62, Shares Owned: 1,197(3)
President and Chief Executive Officer of The Chamber of Commerce
of Hawaii since 1996; 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 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 of record by his wife.
Theodore T. Mason, Trustee, Age: 62, Shares Owned: 784
Managing Director of EastWind Power Partners, Ltd. since 1994;
Second 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 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, Age: 54, Shares Owned: 589(4)
Executive Director, Hawaii Government Employees Association
AFSCME Local 152, AFL-CIO; Trustee 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, Age: 66, Shares Owned: 940
Retired; Director of Hawaiian Trust Company, Limited 1986-1997;
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
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.
Oswald K. Stender, Trustee, Age: 66, Shares Owned: 1,450
Trustee of the Bernice Pauahi Bishop Estate since 1990; Director
of Hawaiian Electric Industries, Inc., a public utility holding
company, since 1993; 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 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.
Sherri Foster, Senior Vice President, Age: 47
Senior Vice President since 1993, Vice 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; Registered
Representative of the Distributor since 1985; Realtor-Associate
of Sherrian Bender Realty, successor to John Wilson Enterprises,
1983-1994; Executive Secretary of the Hyatt Regency, Maui, 1981-
1983.
William C. Wallace, Senior Vice President, Age: 63
Vice President of Capital Cash Management Trust and Pacific
Capital Cash Assets Trust since 1984; Senior Vice President since
1985 and Vice President, 1984-1985; Senior Vice President of Tax-
Free Trust of Arizona since 1989 and Vice President, 1986-1988;
Vice President of Tax-Free Trust of Oregon since 1986, of
Churchill Tax-Free Fund of Kentucky and Tax-Free Fund of Colorado
since 1987, of Pacific Capital Tax-Free Cash Assets Trust and
Pacific Capital U.S. Government Securities Cash Assets Trust
since 1988 and of Narragansett Insured Tax-Free Income Fund since
1992; Secretary and Director of STCM Management Company, Inc.
since 1974; President of the Distributor since 1995 and formerly
Vice President of the Distributor, 1986-1992; Member of the Panel
of Arbitrators, American Arbitration Association, since 1978;
Assistant Vice President, American Stock Exchange, Market
Development Division, and Director of Marketing, American Gold
Coin Exchange, a subsidiary of the American Stock Exchange, 1976-
1984.
Diana P. Herrmann, Vice President, Age: 40
Trustee of Tax-Free Trust of Arizona and Tax-Free Trust of Oregon
since 1994, of Churchill Tax-Free Fund of Kentucky and Churchill
Cash Reserves Trust since 1995, of Aquila Cascadia Equity Fund
since 1996 and of Aquila Rocky Mountain Equity Fund and Tax-Free
Fund for Utah since 1997; President and Chief Operating Officer
of the Administrator since 1997; Senior Vice President and
Secretary, and formerly Vice President, of the Administrator
since 1986 and Director since 1984; Senior Vice President or Vice
President and formerly Assistant Vice President of the Aquila
Money-Market Funds since 1986; Senior Vice President or Vice
President of the Aquila Bond and Equity Funds since 1997; Vice
President of InCap Management Corporation since 1986 and Director
since 1983; Assistant Vice President of Oxford Cash Management
Fund, 1986-1988; Assistant Vice President and formerly Loan
Officer of European American Bank, 1981-1986; daughter of the
Trust's President; 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.
Rose F. Marotta, Chief Financial Officer, Age: 74
Chief Financial Officer of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1991 and 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, Age: 62
Treasurer of the Aquila Money-Market Funds and the Aquila Bond
and Equity Funds and of Aquila Distributors, Inc. since 1992;
Associate Director 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, Age: 58
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines &
Mone LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary
of the Aquila Money-Market Funds and the Aquila 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 Secretary, Age: 58
Assistant Secretary of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1995 and Vice 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.
Patricia A. Craven, Assistant Secretary & Compliance Officer,
Age: 31
Assistant Secretary of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1995; Counsel to the
Administrator and the Distributor since 1995; Secretary of the
Distributor since 1997; formerly a Legal Associate for
Oppenheimer Management Corporation, 1993-1995.
Compensation of Trustees
The Trust does not currently pay fees to any of the Trust's
officers or to Trustees affiliated with the Administrator or the
Adviser, except for Trustees affiliated with the Adviser solely
because of membership on its Board of Directors. During the
fiscal year ended March 31, 1998, the Trust paid $208,528 in fees
and reimbursement of expenses to its other 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 two
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 funds in the Aquila group.
<TABLE>
<CAPTION>
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group now serves
<S> <C> <C> <C>
Vernon R.
Alden $16,086 $53,811 7
Arthur K.
Carlson $15,394 $56,955 7
William M.
Cole $16,109 $44,625 5
Thomas W.
Courtney $15,080 $48,135 5
Richard W.
Gushman, II $15,125 $35,550 4
Stanley W.
Hong $14,854 $37,626 4
Theodore T.
Mason $14,484 $49,460 8
Russell K.
Okata $14,854 $33,464 4
Douglas
Philpotts $13,360 $33,560 4
Oswald K.
Stender $15,595 $36,350 4
</TABLE>
The Administrator is administrator to the Aquilasm Group of
Funds which consists of tax-free municipal bond funds, money
market funds and two equity funds. As of June 30, 1998, these
funds had aggregate assets of approximately $3.0 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, 1998 fees of $921,605 and $1,711,563, respectively, were paid
and/or accrued to the Adviser and to the Administrator under the
Advisory Agreement and the Administration Agreement.
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. All of the shares of the Distributor are owned by Mr.
Herrmann. During the fiscal year ended March 31, 1998, $1,304,887
was paid to Qualified Recipients with respect to Class A Shares,
of which $72,446 was retained by the Distributor. All of such
payments were for compensation. During the Trust's fiscal year
ended March 31, 1998, $43,743 was paid to Qualified Recipients
under the Plan with respect to the Trust's Class C Shares of
which $38,109 was retained by the Distributor. All of such
payments were for compensation. In addition, during the same
period, $14,581 was paid to the Distributor under the Trust's
Shareholder Services Plan with respect to Class C Shares.
At the date of this proxy statement, there is a proposed
transaction whereby all of the shares of the Distributor, which
are currently owned by Mr. Herrmann, will be owned by certain
directors and/or officers of the Administrator and/or the
Distributor including Mr. Herrmann and Ms. Herrmann.
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," 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 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 Peat Marwick 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, 1999, 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 Adviser or the Trust's Administrator. 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 the proxy cards entitle them to vote in accordance
with their judgment on such matter or matters. That is, by
signing and returning your proxy card, you give the proxy holders
discretionary authority as to any such matter or matters.
<PAGE>
HAWAIIAN TAX-FREE TRUST
PROXY FOR SHAREHOLDERS MEETING SEPTEMBER 10, 1998
PROXY SOLICITED ON BEHALF OF THE 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 Hawaiian Tax-Free Trust, to
be held on September 10, 1998, at 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.
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 proposal 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.
Election of Trustees
__
[__] For All
__
[__] Withheld All
__
[__] For All Except
To withhold authority to vote, mark "For All Except" and write
the nominee's number on the line below.
---------------
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;
Vote On Proposal
Ratification of selection of KPMG Peat Marwick LLP as
independent auditors (Proposal No.1 in Proxy Statement)
__ __ __
FOR [__] AGAINST [__] ABSTAIN [__]
Please check here if planning to attend the Annual Meeting of
Shareholders.
__
[__]
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.
__________________________________
Signature (PLEASE SIGN WITHIN BOX) Date
__________________________________
SIGNATURE (Joint Owners) Date
