As filed with the Securities and Exchange Commission on April 11, 1997
Registration No. 2-78066
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
- ------------------------------------------------------------------------------
AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS
HOUSING INVESTMENT TRUST
- ------------------------------------------------------------------------------
PAYMENT OF FILING FEE:
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a(6)-(i)(4) and
0-11.
1) Title of Each Class of securities to which transaction applies:
---------------------------------------------------------------
2) Aggregate Number of Securities to which transaction applies:
--------------------------------------
3) Per Unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------5)
Total fee paid:
-------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------
2) Form, Schedule or Registration Statement Number:
-------------------
3) Filing Party:
-----------------------------------------------------
4) Date Filed:
------------------------------------------------------<PAGE>
<PAGE>
April 21, 1997
TO PARTICIPANTS, AFL-CIO HOUSING INVESTMENT TRUST
Enclosed is the Notice of the 1997 Annual Meeting of Participants and a Proxy
Statement describing the election for Trustees and other indicated matters
that are expected to come up at the meeting.
Also enclosed is a Proxy for each Participant noting the number of Units held
by that Participant and the exact name in which those Units are registered. A
Participant that does not wish to send a representative to the meeting should
complete the Proxy and return it to us in the enclosed envelope as soon as
possible. A copy of the Proxy may be faxed to us as long as the originally
executed Proxy is postmarked no later than May 13, 1997, the date of the
Annual Meeting.
Sincerely,
Stephen Coyle
Chief Executive Officer
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY WITHIN FIVE DAYS OF RECEIPT
Enclosures<PAGE>
<PAGE>
AFL-CIO HOUSING INVESTMENT TRUST
NOTICE OF 1997 ANNUAL MEETING OF PARTICIPANTS
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- ------------------------------------------------------------------------------
To Participants, AFL-CIO Housing Investment Trust:
Notice is hereby given that the 1997 Annual Meeting of Participants (the
"Meeting") of the American Federation of Labor and Congress of Industrial
Organizations Housing Investment Trust (the "Trust"), a District of Columbia
common law trust, will be held at the offices of the Trust, 1717 K Street,
N.W., Suite 707, Washington, D.C., 20006 on Tuesday, May 13, 1997 at 11:00 am
for the following purposes:
1. To elect a Chairman to hold office until the 1998 Annual Meeting of
Participants and until his successor is elected and qualifies.
2. To elect 2 Class II Union Trustees and 2 Class II Management Trustees
to hold office until the 2000 Annual Meeting of Participants and until their
respective successors are elected and qualify.
3. To approve amendments to the Trust's Charter to authorize investment in
(A) construction or permanent loans issued or guaranteed by state housing
finance agencies rated "A" or better by Standard & Poor's, Inc., securities
backed by such loans and interests in such loans or securities and (B) tax
credit bridge loans.
4. To ratify the selection of Arthur Andersen L.L.P. as the independent
public accountants for the Trust's fiscal year ending December 31, 1997.
5. To approve amendments to the Trust's Investment Advisory Agreement with
Wellington Management Company, LLP.
6. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Trustees has fixed the close of business on April 21, 1997
as the record date for the determination of Participants entitled to notice of
and to vote at the Meeting and any adjournment(s) thereof. Accordingly, only
Participants of record as of the close of business on that date are entitled
to notice of and to vote at the Meeting or at any such adjournment. The
transfer books of the Trust will not be closed.
By Order of the Board of Trustees.
Stephen Coyle
Chief Executive Officer
Dated:April 21, 1997<PAGE>
<PAGE>
AFL-CIO HOUSING INVESTMENT TRUST
---------------
PROXY STATEMENT
---------------
April 21, 1997
GENERAL MATTERS
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the annual meeting of Participants (the "Meeting") of the
American Federation of Labor and Congress of Industrial Organizations Housing
Investment Trust (the "Trust") to be held at the offices of the Trust, 1717 K
Street, N.W., Suite 707, Washington, D.C. 20006, on Tuesday, May 13, 1997,
beginning at 11:00 am and at any adjournment(s) thereof.
A copy of the Trust's annual report for the year ended December 31, 1996
was previously mailed to each Participant entitled to vote at the Meeting
together with financial statements for the fiscal year ended December 31,
1996. The Trust will furnish, without charge, a copy of the annual report for
1996 and the most recent semi-annual report succeeding the annual report, if
any, to any Participant that requests one. Requests for reports should be
made by placing a collect call to the Trust, at (202) 331-8055, directed to
Stephanie Turman. Written requests may be directed to Michael Arnold,
Director of Investor Relations, AFL-CIO Housing Investment Trust, 1717 K
Street, N.W., Suite 707, Washington, D.C. 20006.
If the Proxy that is enclosed with this Proxy Statement is properly
executed and returned, the Units of Participation it represents will be voted
at the Meeting in accordance with the instructions noted thereon. If no
direction is indicated, the Proxy will be voted in accordance with the
Trustees' recommendations set forth thereon. Any Participant giving a Proxy
may revoke it at any time before it is exercised by giving written notice to
the Trust bearing a date later than the date of the Proxy, by submission of a
later dated Proxy, or by voting in person at the Meeting, which any
Participant may do whether or not such Participant has previously given a
Proxy.
PERSONS MAKING THE SOLICITATION
The Proxy is being solicited by the Board of Trustees of the Trust
through the mail. The cost of solicitation will be paid by the Trust.
Further solicitation of proxies may be made by telephone or oral communication
with some Participants following the original solicitation. Any such further
solicitation will be made by Trustees or officers of the Trust who will not be
compensated therefor. The date on which proxy materials were first mailed to
Participants was April 21, 1997.
Voting Securities and Principal Holders Thereof
As of the close of business on April 21, 1997, the date set by the Board of
Trustees as the record date for the determination of Participants entitled to
notice of and to vote at the Meeting and any adjournment(s) thereof (the
"Record Date"), there were 1,321,990.0182 Units of Participation of the Trust
outstanding, each Unit being entitled to one vote. No shares of any other
class of securities were outstanding as of that date.
Only Participants of record as of the close of business on the Record
Date, will be entitled to vote at the Meeting.
The following table sets forth the beneficial ownership information as of
April 1, 1997, with respect to each Labor Organization and Eligible Pension
Plan (as each of those terms is defined in the Trust's Declaration of Trust) <PAGE>
<PAGE>
known to the Trust to be the beneficial owner of more than 5 percent (that is
more than 66,099.5009 Units) of the Trust's 1,321,990.0182 outstanding Units
of Participation. Because only Labor Organizations and Eligible Pension Plans
are eligible to own Units of Participation in the Trust, no Units of
Participation are owned by any Trustee or nominee individually. The Units are
the only class of securities or units of beneficial ownership issued by the
Trust.
Name and Address of
Beneficial Owner Number of Units Percent of Total Units
- -------------------- --------------- -----------------------
Ohio Public Employees'
Retirement System
227 East Town Street
Columbus, Ohio 43215 67,165.5901 Units 5.1%
California Public Employees'
Retirement System
400 "P" Street
Suite 2220
Sacramento, California 96814 70,374.5995 Units 5.3%
ELECTION OF TRUSTEES
PROPOSAL I: TO ELECT THE CHAIRMAN
PROPOSAL II: TO ELECT TWO CLASS II UNION TRUSTEES AND
TWO CLASS II MANAGEMENT TRUSTEES
Under the Trust's Declaration of Trust, the Board of Trustees may have up
to 25 Trustees. Up to 12 Trustees may be Union Trustees, up to 12 Trustees
may be Management Trustees, and one Trustee is to be the Chairman. The Board
of Trustees currently consists of 20 Trustees, 10 of whom are Union Trustees
(Chavez-Thompson, Coia, Georgine, Hanley, Hurt, Joyce, Monroe, Moore, Sweeney
and Trumka), 9 of whom are Management Trustees (Duvernay, Fleischer, Kardy,
Latimer, LaVere, Miller, Spear, Stanley and Wiegert), and one of whom is the
Chairman (Ravitch). Proxies will not be voted for a greater number of persons
than the number of nominees named.
The Declaration of Trust divides the Union and Management Trustees into
three Classes. Each Class is required to have, insofar as the pool of
Trustees permits, an equal number of Union and Management Trustees. The term
of each Class expires at the third annual meeting following its election; the
term of one Class expires each year. At each annual meeting, the Participants
elect a Chairman to serve until the next annual meeting and such number of
Trustees as is necessary to fill vacancies in the Class whose terms expire as
of that meeting and any Trustee appointed to complete the remainder of a term.
The terms of office of Trustees Fleischer, Georgine*, Joyce*, Miller, Moore*
and Spear and Chairman Ravitch will expire on the day of the Meeting.
Trustees Fleischer, Georgine*, Joyce* and Spear and Chairman Ravitch have been
nominated for reelection. Trustees Miller and Moore* are not standing for
reelection and will retire from the Board of Trustees following the Meeting.
The principal occupations and business experience for the past five years of
these Class II Trustees standing for reelection are described below under
"Nominees for Reelection."
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
If a proxy in the enclosed form is received from a Participant, the Units
of Participation represented by such Proxy will be voted for the nominees
listed below (unless otherwise indicated on the proxy). Class II Trustees
will serve for three-year terms ending in 2000 and until their respective
successors are elected and qualify.
Although the Trust does not contemplate that any of the nominees will be
unavailable for election, if a vacancy in the slate of nominees should be
occasioned by death or other unexpected occurrence, it is currently intended
that the proxies will be voted for such other persons, if any, as the
Executive Committee may recommend.
The following information was furnished to the Trust by each nominee and
sets forth the name, age, principal occupation or employment of each nominee
and the period, if applicable, during which he has served as a Trustee of the
Trust. Each nominee has consented to be named in this Proxy Statement and to
serve on the Board of Trustees if elected.
NOMINEES FOR REELECTION
The following nominees will stand for reelection at the 1997 meeting of
Participants.
Principal Occupation/ Trustee
Name Business Experience During Past 5 Years Since Age
- ----------- --------------------------------------- --------- ----
Richard Ravitch Principal, 1992 63
Ravitch, Rice & Co.
formerly President and Chief Executive
Officer,
Player Relations Committee of Major
League Baseball
formerly Chairman,
Aquarius Management Corporation
(limited profit housing project
management)
formerly Chairman and Chief Executive
Officer,
Bowery Savings Bank
Alfred J. Fleischer Chairman, 1992 76
Fleischer-Seeger Construction Corporation
formerly Director,
National Corporation for Housing
Partnerships of Washington, D.C.
Robert A. Georgine* President, 1982 64
Building and Construction Trades
Department, AFL-CIO
Chairman and Chief Executive Officer,
Union Labor Life Insurance Company
John T. Joyce* President, 1993 61
Bricklayers and Allied Craftsworkers
International Union
Director,
Union Labor Life Insurance Company
- --------------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
Marlyn J. Spear Investment Coordinator, 1995 44
Milwaukee and Vicinity Building
Trades United Pension Trust Fund
INCUMBENT TRUSTEES
The following Trustees will continue in office in accordance with the
Trust's Declaration of Trust, and are expected to stand for reelection at
subsequent annual meetings of Participants.
Principal Occupation/ Trustee
Name Business Experience During Past 5 Years Since Age
- ----------- --------------------------------------- --------- ----
Linda Chavez-
Thompson* Executive Vice President, 1996 53
AFL-CIO
Arthur A. Coia* General President 1993 54
(formerly Secretary-Treasurer),
Laborers' International Union of
North America
Terrence R. Duvernay Vice President & Co-Manager, Housing Group, 1995 54
Legg Mason,
formerly Director, Public Finance Group,
CS First Boston Corp.
formerly Deputy Secretary,
U.S. Department of Housing and Urban
Development
formerly Executive Director,
Georgia Housing and Finance Authority
Michigan State Housing Development
Authority
Francis X. Hanley* General President 1990 66
(formerly General Secretary-Treasurer),
International Union of Operating Engineers
Frank Hurt* President, 1993 58
Bakery, Confectionery and Tobacco
Workers International Union
H. D. LaVere President, 1982 68
Michigan Carpentry, Inc.
(residential building contractor)
Labor Relations Director,
Michigan Carpentry Contractors Association
Walter Kardy President, 1996 69
Specialty Contractors Management, Inc.
- --------------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
George Latimer Chief Executive Officer, 1996 61
National Equity Fund
Professor of Urban Studies,
Macalaster College
formerly Director of Special Actions Office,
U.S. Department of Housing and Urban
Development
formerly Dean,
Hamline University Law School
A. L. Monroe* General President 1995 63
(formerly General Secretary-Treasurer),
International Brotherhood of Painters and
Allied Trades, AFL-CIO
Director,
Union Labor Life Insurance Company
Tony Stanley Executive Vice President and Director, 1985 63
TransCon Builders, Inc. (building
construction)
John Sweeney* President, 1981 62
AFL-CIO
formerly International President,
Service Employees International Union
Richard L. Trumka Secretary-Treasurer, 1995 47
AFL-CIO
formerly President,
Mine Workers of America, United
Patricia F. Wiegert Retirement Administrator, 1995 50
Contra Costa County (California)
Employees' Retirement Association
EXECUTIVE OFFICERS
The executive officers of the Trust are elected by the Board of Trustees
and serve one-year terms.
STEPHEN F. COYLE*, age 51, has served as Chief Executive Officer of the
Trust since 1992. Mr. Coyle served as Director of the Boston Redevelopment
Authority from July 1984 to January 1992. Prior to that, he served as Chief
Executive Officer of John Carl Warnecke & Associates in San Francisco, a
national firm for architecture and urban design. From 1977 through 1980, Mr.
Coyle served the Federal Government in Washington, D.C. as Deputy Under
Secretary of the United States Department of Health and Human Services and
Executive Assistant to the Secretary of the United States Department of
Housing and Urban Development. Mr. Coyle earned his Bachelor's degree from
Brandeis University (Waltham), his Master's degree from the Harvard Kennedy
School of Government, and a law degree from Stanford Law School.
- --------------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
MICHAEL M. ARNOLD*, age 57, has been the Trust's Director of Investor
Relations since 1985. Mr. Arnold joined the Trust after being employed by the
AFL-CIO Human Resources Development Institute (HRDI) since 1969. During his
tenure with HRDI, he held the positions of area representative, regional
director, assistant director and executive director. As executive director
during the six years prior to being employed by the Trust, he was responsible
for overall administration and fiscal affairs and the general supervision of
staff located at the national office in Washington, D.C. and in field offices
in 59 major metropolitan areas of the country. During this period, Mr. Arnold
had extensive experience in working with officers and staff of international,
state and local labor organizations. In 1967-68, Mr. Arnold was manpower
coordinator and labor liaison officer with the Dallas Community Action Agency.
He is a 37-year member and former local union officer of the International
Union of Bricklayers and Allied Craftsmen, and is also a licensed real estate
broker.
HELEN R. KANOVSKY*, age 46, has been General Counsel since 1995. Ms.
Kanovsky joined the Trust after serving as Executive Vice President and
General Counsel of GE Capital Asset Management Corporation (GECAMC) from
October 1990 to December 1995. Prior to GECAMC, from 1986 to 1990, Ms.
Kanovsky served as Litigation Counsel (December 1986 - June 1988) and
Executive Vice President and General Counsel (June 1988 - October 1990) of
Skyline Financial Services Corporation. Ms. Kanovsky earned her Bachelor of
Arts degree from Cornell University and her Juris Doctor degree from Harvard
Law School.
WILLIAM C. TUTT*, age 56, served as Financial Manager of the Trust until
his retirement on December 31, 1996. Mr. Tutt attended Southeastern
University in Washington, D.C. for three years. Mr. Tutt was first employed
by the AFL-CIO in 1961 and he has worked at the AFL-CIO for 32 years in
bookkeeping, accounting and financial positions. He became assistant to John
E. Evans, the former Chief Executive Officer and Financial Manager of the
Mortgage Investment Trust, in 1970. From July 1974 until October 1976 Mr.
Tutt served as Acting Financial Manager of the Mortgage Investment Trust, and
in October 1976 he was appointed Financial Manager. In that position he had
full responsibility for management and operations of the Mortgage Investment
Trust subject to the general direction and control of the Executive Committee
and Board of Trustees of the Mortgage Investment Trust.
The Trustees and executive officers listed above whose names are marked
in this Proxy Statement with an asterisk (*) may be considered "interested
persons" of the Trust, within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940, as amended ("Investment Company Act") because
of their employment by the Trust, the AFL-CIO, sponsor of the Trust, or one of
the member unions of the AFL-CIO, although the Trust does not concede that
they are interested persons within the meaning of that Section.
Because the Trust purchases its investments on a "net" basis, the Trust
paid no commissions during the 1996 fiscal year on its transactions.
There have been no transactions since the beginning of the Trust's last
fiscal year and there are no currently proposed transactions to which the
Trust was or is to be a party, in which the amount involved exceeds $60,000
and in which any of the following persons had or will have a material
interest: (a) any Trustee or Executive Officer of the Trust; (b) any member of
the immediate family of the foregoing persons; or (c) any Participant known to
the Trust to own of record or beneficially more than 5 percent of the Trust's
outstanding Units of Participation. None of the foregoing persons or
Participants has been indebted to the Trust since the beginning of its last
fiscal year in an amount in excess of $60,000 (nor has any corporation or
organization of which any of the foregoing persons is an executive officer,
partner or 10 percent beneficial owner, or any trust or other estate in which
any of the foregoing persons is a trustee or has a substantial beneficial
interest).
- --------------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
ORGANIZATION OF THE BOARD OF TRUSTEES
The Trust maintains four committees: the Executive Committee, the Asset
Management and Program Development Committee, the Marketing Committee, and the
Legal and Audit Committee. The Executive Committee is currently composed of
Chairman Ravitch, who serves as chairman of the Committee, Management Trustee
Stanley, who serves as vice chairman of the Committee, and Union Trustee
Sweeney*. The Executive Committee has all the authority of the Board of
Trustees when the Board is not in session and met 5 times during 1996. The
Executive Committee also functions as a nominating committee. In such
capacity, it will consider nominees recommended by security holders. As of
the date hereof, it has not established any specific procedures to be followed
in submitting recommendations.
The Asset Management and Program Development Committee monitors the
Trust's investment practices and policies, reviews proposed changes thereto,
and considers new investment practices and policies. This Committee is
currently composed of Union Trustees Hanley* and Moore* and Management
Trustees Duvernay, Latimer, Spear and Stanley. Mr. Moore* served as chairman
of this Committee, which met 2 times during 1996.
The Marketing Committee oversees the marketing policies and strategies of
the Trust. This Committee is currently composed of Union Trustees Chavez-
Thompson* and Monroe*, and Management Trustees Fleischer, Kardy, LaVere and
Spear. Mr. Fleischer served as chairman of this Committee, which met 2 times
during 1996.
The Legal and Audit Committee monitors the legal and accounting practices
and performance of the Trust's staff and of its counsel and independent public
accountants. This Committee is currently composed of Management Trustees
Miller, Stanley and Wiegert, and Union Trustees Trumka* Hurt* and Joyce*. Mr.
Miller served as chairman of this Committee, which met 2 times during 1996.
No committee functions as a compensation committee as such. The
Executive Committee, however, does make recommendations to the Board of
Trustees concerning compensation payable to Trustees acting in their
capacities as trustees, and compensation payable to executive officers.
The Board of Trustees met 2 times during the Trust's fiscal year ended
December 31, 1996, while the four committees of the Board of Trustees met a
total of 11 times. Trustees Coia, LaVere and Monroe attended fewer than 75
percent of the aggregate of the total number of Board of Trustees meetings and
total number of meetings of all committees of which they were members during
the 1996 fiscal year.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
During the fiscal year ended December 31, 1996, the Chairman received an
annual fee of $10,000. The Trust paid each Management Trustee who did not
waive such fee $500 per day for attendance at Board of Trustees meetings and
committee meetings. The Trust paid no fee to any Union Trustee. The
aggregate compensation paid to Trustees in the year ended December 31, 1996
was $21,000. The Trust reimbursed all Trustees for out-of-pocket expenses
incurred in attending Board of Trustees and committee meetings.
During the fiscal year ended December 31, 1996, the Trust employed
Stephen Coyle as Chief Executive Officer pursuant to an employment agreement.
During that period, Mr. Coyle's compensation from the Trust was #128,600.93 in
salary and cash compensation, $65,587.24 of deferred compensation and interest
on compensation previously deferred received in lieu of participation in the
Retirement Plan, and $1,150.00 in matching funds under the 401(k) Plan.
Pursuant to his employment agreement, Mr. Coyle was also entitled to receive
health and welfare and life insurance benefits substantially equivalent to
those provided by the AFL-CIO for department heads.
- --------------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
The following table sets forth all compensation, including deferred
compensation, which was paid during 1996 to all executive officers and
directors of the Trust.
<TABLE>
1996 COMPENSATION TABLE
NAME OF PERSON, AGGREGATE PENSION ESTIMATED TOTAL
POSITION COMPENSATION OR RETIREMENT ANNUAL COMPENSATION
FROM TRUST<F1> BENEFITS BENEFITS FROM TRUST
($) ACCRUED AS UPON PAID TO
PART OF TRUST RETIREMENT DIRECTORS<F3>
EXPENSES ($) <F2>($) ($)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stephen Coyle<F4>
Chief Executive can not be not
Officer 128,600.93 66,737.24 determined applicable
Michael M. Arnold<F5>
Director of not
Investor Relations 93,495.22 23,027.00 39,944.33 applicable
Helen R. Kanovsky<F6> not not
General Counsel 88,230.48 22,166.94 vested applicable
William C. Tutt<F7> not
Financial Manager 139,977.72 23,027.04 68,626.00 applicable
Richard Ravitch,
Chairman $ 10,000.00 0.00 0.00 10,000.00
Arthur A. Coia*,
Union Trustee $ 0.00 $ 0.00 0.00 $ 0.00
Linda Chavez-
Thompson,*
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Terence R. Duvernay,
Management Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Alfred J. Fleischer,
Management Trustee $ 3,000.00 $ 0.00 $ 0.00 $3,000.00
Robert A. Georgine*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Francis X. Hanley*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Frank Hurt*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
John T. Joyce*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Walter Kardy,
Management Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
George Latimer,
Management Trustee $ 1,000.00 $ 0.00 $ 0.00 $1,000.00
H.D. LaVere,
Management Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
George Miller*,<F8>
Management Trustee $ 2,000.00 $ 0.00 $ 0.00 $ 2,000.00
A.L. Monroe*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Jack F. Moore*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Marlyn J. Spear,
Management Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Tony Stanley,
Management Trustee $ 5,000.00 $ 0.00 $ 0.00 $ 5,000.00
John Sweeney*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Richard Trumka*,
Union Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
Patricia F. Wiegert,
Management Trustee $ 0.00 $ 0.00 $ 0.00 $ 0.00
All Directors and
Officers as a Group
(24 persons) $ 471,304.85 $134,958.22 $108,620.33 $21,000.00
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
</TABLE>
- ---------------------
<F1> Compensation figures represent 100% of each executive officer's
compensation for time devoted to Trust matters. Approximately 29% of Mr.
Coyle's time, 32% of Mr. Arnold's time, 32% of Ms. Kanovsky's time and 0%
of Mr. Tutt's time, was devoted to matters relating to the AFL-CIO
Building Investment Trust ("BIT"). Mr. Coyle and Ms. Kanovsky receives
compensation from BIT in addition to the amount set forth above.
<F2> The Internal Revenue Code limits the permissable benefit payments
that may be paid under the Retirement Plan. Consequently, the amounts
of retirement benefits that actually may be paid to individual employees
may be significantly lower than as shown, depending on several factors,
including, but not limited to, the employee's years of service,
level of compensation, and actual year of retirement.
<PAGE>
<PAGE>
<F3> Includes compensation on from the Trust and all other registered 1940 Act
companies that have a common investment advisor with the Trust, or an
investment advisor that is an affiliated person of the Trust's investment
advisor.
<F4> Aggregate Compensation includes $2,194.40 of deferred compensation
in 1996 under the 401(k) Plan, and excludes compensation deferred in
lieu of participation in the Retirement Plan, and interest thereon.
Pension or Retirement Benefits Accrued as Part of Trust Fund Expenses
includes $1,150.00 of matching funds accrued under the 401(k) Plan and
$65,587.24 of deferred compensation in lieu of participation in the
Retirement Plan. The total amount of compensation deferred by Mr. Coyle
through December 31, 1996 in lieu of participation in the Retirement
Plan, including interest, is $172,754.07, and the total amount deferred
under the 401(k) Plan, through December 31, 1996, including interest and
Trust matching, is $8,381.
<F5> Aggregate Compensation includes $9,500.00 of deferred compensation in
1996 under the 401(k) Plan and excludes amounts contributed to the
Retirement Plan on Mr. Arnold's behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $1,150.00 of matching
funds accrued under the 401(k) Plan and $21,877.00 contributed to the
Retirement Plan in 1996. The total amount of compensation deferred by
Mr. Arnold as of December 31, 1996 under the 401(k) Plan, including
interest and Trust matching, is $166,104.
<F6> Aggregate Compensation includes $9,500.00 of deferred compensation in
1996 under the 401(k) Plan and excludes amounts contributed to the
Retirement Plan on Ms. Kanovsky's behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $1,150.00 of matching
funds accrued under the 401(k) Plan and $contributed to
the Retirement Plan in 1996. The total amount of compensation deferred
by Ms. Kanovsky as of December 31, 1996 under the 401(k) Plan, including
interest and Trust matching, is $13,833.
<F7> Aggregate Compensation includes $9,500.00 of deferred compensation in
1996 under the 401(k) Plan, and excludes amounts contributed to the
Retirement Plan on Mr. Tutt's behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $21,877.04 of matching
funds accrued under the 401(k) Plan and $ contributed to the
Retirement Plan in 1996. The total amount of compensation deferred by
Mr. Tutt as of December 31, 1996 under the 401(k) Plan, including
interest and Trust matching, is $ .
<F8> Union Trustee Moore and Management Trustee Miller will not stand
for reelection.
Prior to October 1, 1990, the Trust had not established or adopted any
bonus, profit sharing, pension, retirement, stock purchase, or other
compensation or incentive plans for its officers and employees. Personnel
(other than the Chief Executive Officer) were provided pursuant to a Personnel
Contract between the Trust and the AFL-CIO, whereby the Trust reimbursed the
AFL-CIO for the AFL-CIO's costs of employing the personnel. While the
Personnel Contract was in effect, the personnel participated in the AFL-CIO
Deferred Compensation Plan (the "401(k) Plan"), a defined contribution plan,
and were subject to the AFL-CIO Staff Retirement Plan ("Retirement Plan"), a
defined benefit plan. Any amounts contributed by the AFL-CIO on behalf of
such personnel pursuant to the Retirement Plan were reimbursed by the Trust
pursuant to the Personnel Contract. The Trust adopted the Retirement Plan for
all of its employees except for its Chief Executive Officer, effective as of
October 1, 1990. Also, effective October 1, 1990, the Trust adopted the
401(k) Plan for all of its employees including its Chief Executive Officer
(and subsequent Chief Executive Officers).
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
THE RETIREMENT PLAN
Under the Retirement Plan, contributions are based on an eligible
employee's base salary. In general, rates are determined actuarially every
other year. The Retirement Plan was funded by employer contributions at rates
of 17.7% of eligible employees' base salaries during the six months ended
December 31, 1996. During 1996, the base salaries of Mr. Arnold, Ms. Kanovsky
and Mr. Tutt were $126,457, $121,485 and $126,457, respectively.
The Retirement Plan is open to employees of the AFL-CIO and other
participating employers approved by the Retirement Plan's board of trustees
that make contributions to the Retirement Plan on their behalf. Such
employees become members of the Retirement Plan on their first day of
employment that they are scheduled to work at least 1,000 hours during the
next 12 consecutive months.
The Retirement Plan provides a normal retirement pension to eligible
employees for life, beginning at age 65. The amount of this pension depends
on salary and years of credited service at retirement. Eligible employees
will receive 2.80 percent of the average of their highest three years'
earnings ("Final Average Salary") for each year of credited service up to 25
years, and 0.5 percent of their Final Average Salary of each year of credited
service over 25 years. Eligible employees must have at least five years of
service to retire and receive a monthly pension. Eligible employees generally
earn credited service toward their pension for each year that they work for a
participating employer.
An eligible employee can also receive full benefits after reaching age
55, if his or her age plus his or her years of service equals 80 or more. It
is also possible for an employee who meets the combination of 80 requirement
to retire after age 50, but in such event benefits would be reduced 4 percent
for each year or portion thereof that the employee is less than 55 years old.
Set forth below is a table showing estimated annual benefits payable upon
retirement<F9> in specified compensation and years of service classifications.
As of the date hereof, Mr. Arnold and Ms. Kanovsky have approximately 12 and 2
credited years of service, respectively, under the Retirement Plan.
Years of Service
----------------
Final
Average Salary 15<F10> 20<F10> 25<F10> 30<F11> 35<F11>
- -------------- ------ ------ ----- ------- -------
$ 50,000 $ 21,000 $ 28,000 $ 35,000 $ 36,250 $ 37,500
70,000 29,400 39,200 49,000 50,750 52,500
100,000 42,000 56,000 70,000 72,500 75,000
- --------------------------
<F9> The Internal Revenue Code limits the permissible benefit payments that
may be paid under the Retirement Plan. Consequently, the amounts of
retirement benefits that actually may be paid to individual employees
may be significantly lower than as shown, depending on several factors,
including but not limited to the employee's years of service, level of
compensation, and actual year of retirement.
<F10> 2.80 percent per year up to 25 years.
<F11> 0.5 percent per year for years over 25 years.
Benefits listed in the table are not subject to any deduction for Social
Security benefits or other offset amounts.
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
THE 401(K) PLAN
Under the 401(k) Plan, an eligible employee may agree with the Trust to
set aside up to 15 percent of his or her total compensation, up to a maximum
of $9,500 in 1997. In 1997, the Trust will match dollar-for-dollar the first
$1,150 contributed. The amount set aside by an eligible employee and the
amount of the Trust's matching contribution, if any, will be deposited in a
trust account in the employee's name. Every employees in the 401(k) Plan
provided such employee has reached the age of 21 and is not a nonresident
alien.
An employee of the Trust is eligible to participate (i) if the employee
is a full-time employee, or (ii) if the employee is a temporary employee who
has been credited with 1,000 hours of service for any year beginning with the
date, or any subsequent anniversary date, of the employee's commencement of
employment with the Trust.
When a participating employee terminates his or her employment, retires,
or becomes disabled, the employee will be able to receive as a lump sum
payment the salary reduction amounts that were contributed to the Trust on the
employee's behalf, the additional amounts that the Trust contributed to the
trust account on the employee's behalf, plus income (less the employee's
allocated share of expenses) earned on these contributions.
If the employee continues to work for the Trust, the employee cannot
withdraw these amounts unless the employee has a financial hardship. A
financial hardship is an immediate and heavy financial need for which the
employee has no other available resources, and includes medical expenses, the
purchase of a primary residence, the payment of tuition and related
educational fees and the need to prevent eviction from, or foreclosure on the
mortgage of, the employee's primary residence. The employee will be required
to present evidence of the financial hardship and upon submission of such
evidence may be entitled to withdraw an amount, up to the balance in the
employee's account, to meet the immediate financial need.
The amount in an employee's account must be distributed to the employee
in one lump sum or in periodic installments beginning the April 1 of the year
following the year in which the employee reaches age. Additionally, these
amounts must be distributed within a reasonable time following the
termination of the 401(k) Plan or the termination of the employee's
employment. An employee will be entitled to receive a distribution of the
amounts in their account upon the employee's attainment of age 65.
A participating employee may borrow from his or her account subject to
certain prescribed limitations.
The following table sets forth the amounts paid or distributed pursuant
to the 401(k) Plan in 1996 to the executive officers listed in the
Compensation Table above, and the amounts deferred and accrued pursuant to the
401(k) Plan for the accounts of such individuals during 1996, the distribution
or unconditional vesting of which are not subject to future events.
Name of Individual Amount Paid or Amount Employer
Number of Group Distributed($) Deferred Matching ($)
- ------------------ --------------- -------- ------------
Stephen F. Coyle -0- 2,194.40 1,150.00
Michael M. Arnold -0- 9,500.00 1,150.00
Helen R. Kanovsky -0- 9,500.00 1,150.00
William C. Tutt -0- 9,500.00 1,150.00
All executive officers
as a group
(4 persons) -0- 30,694.40 4,600.00
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.<PAGE>
<PAGE>
APPROVAL OF AMENDMENTS TO THE CHARTER
PROPOSAL III: TO APPROVE AMENDMENTS TO THE TRUST'S CHARTER TO AUTHORIZE
INVESTMENT IN (A) CONSTRUCTION OR PERMANENT LOANS ISSUED OR
GUARANTEED BY STATE OR LOCAL HOUSING AGENCIES RATED "A" OR
BETTER, SECURITIES BACKED BY SUCH LOANS AND INTERESTS IN SUCH
LOANS OR SECURITIES AND (B) SECURED BRIDGE LOANS
OBLIGATIONS ISSUED OR GUARANTEED BY STATE OR LOCAL HOUSING FINANCE AGENCIES
RATED "A" OR HIGHER.
The Board of Trustees has approved, subject to approval by the
Participants at the Annual Meeting, an amendment to the Charter authorizing
investment in a new category of state and local government-related
obligations. Under this new investment authority, the Trust would be
authorized to invest in construction or permanent mortgage loans, or
securities backed by construction or permanent mortgage loans, or interests in
such loans or securities, provided that such loans or securities are issued or
guaranteed, as the case may be, by a state or local housing finance agency
with a general obligation rating of "A" or better by Standard & Poor's (or a
comparable rating by another nationally recognized statistical rating agency,
as determined by the Executive Committee of the Trust) at the time of the
acquisition of the investment by the Trust; and are (i) with full recourse
(directly or by way of full indemnity or guarantee) to such agency's general
credit and assets or (ii) backed by the "moral obligation" of the state in
which such agency is located, in the form of the state's commitment to
replenish any insufficiencies in the funds pledged to debt service on the
obligations or similar commitment. Although this proposed investment
authority would require that a state or local agency which issues or
guarantees an obligation to be acquired have a general obligation debt rating
of "A" or better, there is no requirement that the obligation itself be rated
or ratable. There is no rating requirement for states which provide their
"moral obligation" for such obligations.
Under the Charter as it currently exists, up to thirty percent of the
assets of the Trust may be invested in privately collateralized investments
and state and local government-related obligations. Investments made under
this new investment authority will be in this thirty percent "basket."
Presently, the Trust is authorized to invest (within the 30% basket for
privately collateralized investments and state and local government-related
investments) in obligations similar to those described above that are issued
or guaranteed by state and local housing finance agencies designated "Top
Tier" by Standard & Poor's (or a comparable designation by another nationally
recognized statistical rating agency). However, Standard & Poor's has de-
emphasized the "top tier" rating category in favor of rating state and local
housing finance agencies on the basis of their ability to meet their general
debt obligations and state and local housing agencies have begun to apply for
these general obligation ratings. At this time, Standard & Poor's is not
accepting new applications for "Top Tier" designation, but has indicated that
it will continue to maintain the rating category for those agencies which
continue to satisfy the criteria for that designation.
The Trust will continue to be authorized to invest in obligations issued
or guaranteed by state and local housing finance agencies which are designated
"Top Tier" by Standard & Poor's. The Trust believes, however, that this new
investment authority will provide it with more product in which it is eligible
to invest within the limits of the 30% basket and that the product available
under this investment authority will be of the same or better level of credit
quality as that available under the Trust's "Top Tier" investment authority.
As noted above, the Trust may acquire obligations which are backed by the
"moral obligation" of the state<PAGE>
<PAGE>
in which the agency is located (without regard to the credit rating of such
state), in lieu of recourse against the state or local agency. Obligations
which are backed by the "moral obligation" of the related state could include
loans from the Trust to the agency, securities issued by the agency or loans
or participation interests in loans made by the Trust or the agency to the
underlying borrower (or securities backed by a loan made by the agency to the
borrower). However, these obligations would be secured by the state's "moral
obligation", rather than by full recourse against the agency. The state's
"moral obligation" could take the form of a commitment to replenish any
insufficiencies in the funds pledged to debt service on the investment or a
commitment to pay any amounts due on the investment in the event that the
revenues from the underlying real property are insufficient to pay all amounts
when due. However, the state's "moral obligation" would not be a binding,
legal obligation of the state to pay amounts due under the obligations
acquired by the Trust and could not be enforced against the state or its
general credit and assets.
Before rating a housing agency's general obligation debt as "A" or
better, Standard & Poor's has indicated that it must favorably evaluate a
number of criteria, including the state's economic base, the agency's
legislative mandate and the sponsoring state's commitment to housing programs,
the operating performance and management of the agency and earnings quality
and financial strength of the agency. As of January 1997, the following state
and municipal housing finance agencies had a general obligation rating of "A"
or better from Standard & Poor's: Alaska, California, Illinois, New Jersey,
Nebraska, New York City, Massachusetts, Minnesota, Pennsylvania, Utah and
Virginia.
There can be no assurance that the general debt obligation rating of an
agency of "A" or better would continue for any given period of time after the
Trust acquires an obligation issued or guaranteed by that agency, or that the
rating would not be revised downward or withdrawn entirely by the rating
entity if, in its judgment, circumstances so warrant. A downgrade in or
withdrawal of the rating of an agency would signify an increase in the risk
that the obligations issued or guaranteed by that agency would not be paid in
accordance with their terms and would be likely to result in a reduction in
the value of the related obligations, except to the extent that the Trust has
obtained other forms of credit enhancement for the investment. The Trust
would not be required to dispose of the obligations issued or guaranteed by an
agency which loses its general obligation rating of "A" or better.
Although this proposed investment authority would require that the agency
which issues or guarantees an obligation have a rating of "A" or better on its
general debt obligations, there is no requirement that the obligation itself
be rated or ratable. While a rating on an obligation does not provide any
assurance of repayment and is subject to revision or withdrawal at any time by
the assigning rating agency, such ratings do provide the prospective investor
with some indication that the proposed structure and revenue analysis for the
obligation satisfy the rating agency's internal criteria for the applicable
rating. However, the Trust intends to undertake transactions under this
authority selectively, and only after having made its own independent
evaluation with respect to the experience, credit history, and management
expertise of the agencies issuing or guaranteeing the obligations to be
acquired. Unrated investments may also be less liquid than rated investments.
However, the investments made under this authority, together with all other
Trust investments, would be subject to the SEC requirement which requires that
at least 90% of the value of the Trust's assets be invested in investments
that are readily marketable and convertible into cash within 120 days without
a discount from their market value.
The Trust believes that the direct recourse provided by the agency
involved in these investments or the "moral obligation" of the related state
will be a significant factor in helping to assure the safety and soundness of
the investments to the Trust. However, if such recourse proves insufficient
to ensure full and timely performance of the obligations of the issuer under
the terms of the investment, the Trust (or an agent or nominee on its behalf)
will have recourse to a lien on the underlying real property securing the
project financed. If the Trust is required to enforce its rights to the
underlying real property because its recourse against the issuer is
insufficient, the Trust will be subject to the same real estate-related risks
and uncertainties that apply to real estate investments generally, which could
have a material adverse effect on the value and performance of the
investments. Some of these risks are described in the Trust's current
prospectus under the caption "RISK FACTORS--Real Estate-Related Risks".
<PAGE>
<PAGE>
SECURED BRIDGE LOANS
A. New Investment Authority
The Board of Trustees has approved, subject to approval by the
Participants, an amendment to the Charter authorizing investment of up to 5%
of all the Trust's assets in certain secured bridge loans (collectively,
"Secured Bridge Loans"), as part of the privately collateralized and state and
local government-related obligations in which it may invest up to 30% of its
total assets.
Secured Bridge Loans will be loans related to single family or
multifamily housing developments which are eligible to receive and have
allocations or other rights to receive Low Income Housing Tax Credits
("LIHTCs") under Section 42 of the Internal Revenue Code of 1986, as amended.
Borrowers on LIHTC projects are eligible to receive tax credits which may be
used dollar-for-dollar to offset federal taxes otherwise due, subject to
certain limitations. Sponsors of LIHTC projects frequently sell ownership
interests in their projects to investors who want to receive the benefits of
the LIHTCs. There have been approximately 850,000 units of housing built
under the LIHTC program since its inception in 1986. The LIHTCs are available
to owners in proportion to their ownership interests in the development and
are provided in substantially equal annual amounts to owners of the
development over a ten year period, generally commencing in the year in which
the units of each building are available for occupancy. Investors generally
agree to pay for their ownership interests in the development (and,
consequently, the LIHTCs) in installments over the construction, rent-up and
later periods, as negotiated on a case by case basis.
The investor generally makes an initial payment upon admission to the
ownership entity and pays subsequent installments as various events are
achieved, such as lien free completion of construction and achievement of
stabilized occupancy for an agreed period of time (usually three to six
consecutive months of occupancy at a specified debt service coverage level).
Payment obligations are generally evidenced by notes or contractual
agreements.
Development sponsors generally need the proceeds of the sale of LIHTCs at
or before the time construction commences to make up the difference between
the construction financing and other sources of funds available and the total
development cost of the development. Accordingly, it is customary for
sponsors to obtain bridge loan financing at or prior to the closing on the
construction loan financing to close this gap; the bridge loan financing is to
be repaid from the payments due from the LIHTC investors as the development is
constructed and reaches the achievement levels required by the LIHTC
investors. Unlike other construction financing, Secured Bridge Loans of the
type in which the Trust proposes to invest are not secured by the underlying
development. Instead, such Secured Bridge Loans are secured, as described
below, primarily by the general credit of the issuer or guarantor and, to a
lesser extent, by the LIHTC investors' ownership interests in the development
owner.
The Trust has proposed making Secured Bridge Loans in a way which it
believes will minimize the Trust's risks on such loans. The Trust proposes to
limit such loans to loans which on the date of the Trust's acquisition or
making of the loan are:
(1) (a) issued or guaranteed by a state or local agency designated as
"Top Tier" by Standard & Poor's (or a comparable rating by another
nationally recognized statistical rating agent, as determined by the
Executive Committee of the Trust) with full recourse to the assets
and credit of such agency (or in lieu of such full recourse, secured
by such third party credit enhancement which, in the judgment of
management of the Trust, offers security comparable to full recourse
to the assets and credit of such agency, or
(b) issued (with recourse) or guaranteed by a state or local agency
which has its long term credit rating at the level of "A" or above
by Standard & Poor's (or a comparable rating by another nationally
recognized rating agency approved by the Trust's Executive
Committee) for a Secured Bridge Loan with a term of longer than 12
months and at the rating level of A-1 or better by Standard & Poor's
(or a comparable rating by another nationally recognized<PAGE>
<PAGE>
rating agency approved by the Trust's Executive Committee) for a
Secured Bridge Loan with a term of less than 12 months;
(2) issued (with recourse) or guaranteed by FHA, GNMA, Fannie Mae,
Freddie Mac or another entity rated AA or above by Standard & Poor's
(or a comparable rating by another nationally recognized rating
agency approved by the Trust's Executive Committee) or fully
collateralized by obligations issued (with recourse) or guaranteed
by FHA, GNMA, Fannie Mae, Freddie Mac or another entity rated AA or
above by Standard & Poor's (or a comparable rating by another
nationally recognized rating agency approved by the Trust's
Executive Committee); or
(3) fully collateralized by a letter of credit or other guaranty by a
bank or other financial entity whose credit rating is rated as AA or
above by Standard & Poor's (or a comparable rating by another
nationally recognized rating agency approved by the Trust's
Executive Committee) or a bank with a rating Thompson Bankwatch of
"B" or better.
The Trust will invest in Secured Bridge Loans only in cases where the
Trust is otherwise committed to invest in the project's construction and/or
permanent mortgage loan, except in cases where the project's permanent loan is
less than $1 million, in which event the Trust may make the Secured Bridge
Loans even if the Trust is not committed to make the construction or permanent
loan.
The credit enhancement mechanisms set forth above may be structured to
provide either an assurance that all scheduled payments under the Secured
Bridge Loans will be made when due or an assurance only of the ultimate
repayment of all amounts due under such loans at maturity or after foreclosure
or other liquidation.
There is no requirement that the Secured Bridge Loan itself be rated or
ratable.
The Secured Bridge Loans will be paid down in a manner approved by the
Trust as capital contributions are made by the LIHTC investors, although not
all of the proceeds of investor payments will be required to reduce the
Trust's loan if the Trust so approves.
B. The Secured Bridge Loan Program
The Trust believes the authority to invest in Secured Bridge Loans will
provide the Trust with numerous benefits, including the following:
First, the Trust believes bridge lending authority will give it an
-----
advantage in marketing its other loan products in an increasingly competitive
affordable-housing lending market by allowing the Trust to offer an additional
level of financing in addition to construction and permanent lending. The
Trust anticipates that its participation in the relatively less-competitive
bridge lending market will enable it to gain access to construction and
permanent loan investments on underlying projects to which it might not
otherwise have access. The Trust anticipates that most Secured Bridge Loans
in which it invests will be for projects on which the Trust also invests in
the long-term mortgage loan pursuant to the Trust's existing investment
authority.
Second, the Trust believes bridge lending authority will help diversify
------
the Trust's long-term assets -- 93% of which, as of December 31, 1996, were
FHA-insured loans or GNMA-guaranteed securities backed by FHA-insured<PAGE>
<PAGE>
loans -- by providing the opportunity to invest in a greater volume of Fannie
Mae and Freddie Mac mortgage-backed securities backed by LIHTC properties.
Third, the Trust believes bridge lending authority will enable it to
-----
better manage its overall portfolio by increasing its ability to invest cash
in shorter term investments.
Unlike most other assets in which the Trust invests, Secured Bridge Loans
are not secured by mortgages or directly related to payments on first-lien
mortgage loans, nor are they necessarily insured or guaranteed by the federal
government or a federal government-sponsored enterprise such as Fannie Mae.
However, as described above, Secured Bridge Loans will be guaranteed or
credit-enhanced by state housing finance agencies, letter-of-credit providers
or other mechanisms which are of the same credit quality as those enhancing
other assets in the Trust's current 30% "basket" for privately collateralized
and state and local government-related investments.
The obligation to make principal and interest payments on Secured Bridge
Loans will not be contingent on investor payments to the borrower and the
Trust expects to have recourse on such loans directly to a creditworthy entity
as described above. The development owner may depend on investor payments to
make payments which will then be made on a Secured Bridge Loan; payments to
the development owner from its investors may be dependent on certain factors
relating to completion, rent-up, other matters relating to the LIHTC and
otherwise. The Trust expects, however, that its investments will be made on
the basis of the credit of the guarantor or issuer as described in (1) through
(3) above, and to a lesser extent by the LIHTC investors' ownership interests
in the development owner. The Trust's investment criteria have been designed
to enhance the likelihood that the Trust will invest only in credit-worthy
Secured Bridge Loans. The Trust also believes that any additional risk
associated with bridge loans, as compared to the Trust's other authorized
investments, will be offset by the higher interest rates payable on Secured
Bridge Loans. Presently, Secured Bridge Loans of the quality in which the
Trust would be authorized to invest, if the Participants approve the proposed
amendments to the Charter, carry interest rates of approximately 1.25 to 1.75
percentage points over United States Treasury obligations of comparable
average life, and yields of up to 4.0% over cash equivalents. Such yields are
higher than the average yields now enjoyed by the Trust on investments of
similar duration.
Presently, the Trust is limited to investing at least 90% of its assets
in investments that are readily marketable and convertible into cash within
120 days without a discount from their market value. Secured Bridge Loans may
not be liquid investments. The authority to invest in Secured Bridge Loans
will not increase the 10% limit on illiquid assets, but it may result in an
increase the proportion of illiquid investments in the Trust's portfolio.
C. Risk Factors
There is no assurance that the rating of the issuer of any letter of
credit or the issuer or guarantor of any other form of guaranty which secures <PAGE>
<PAGE>
a Secured Bridge Loan investment acquired by the Trust will continue for any
given period of time or that it will not be revised downward or withdrawn
entirely by the rating agency if, in the rating agency's judgment,
circumstances so warrant. Any such downward revision or withdrawal of such
rating would be likely to signify an increase in the risk to the Trust
associated with the related Secured Bridge Loan and would be likely to result
in a reduction in the value of the related Secured Bridge Loan. The Trust is
not required to dispose of investments if the rating of the issuer of the
related letter of credit or guaranty or of the obligation itself is downgraded
or withdrawn. Notwithstanding any of the above, such a downward revision or
withdrawal of a rating would not necessarily have any impact upon the
repayment of the Secured Bridge Loan to the Trust.
Since the Secured Bridge Loans themselves are not required to be rated or
ratable, the Trust will not have the benefit of a rating on these investments.
Some of the benefits of having such a rating are described above under the
discussion of investments in obligations issued or guaranteed by state or
local housing finance agencies rated "A" or higher. However, the Trust
intends to undertake transactions under this authority selectively, and only
after having made its own independent evaluation and investigation with
respect to a proposed investment, as well as a consideration of the factors
the Trust applies to investments in all categories of state and local
government-related obligation.
If the issuer of any letter of credit or other form of guaranty which
secures a Secured Bridge Loan fails or is unable to meet its obligations under
such letter of credit or other guaranty, the Trust would be subject to the
risk that LIHTC investors may not make required payments on their obligations
to the development owner as scheduled and also to certain real-estate risks
relating to the underlying development. LIHTC investors may not make the
payments for reasons relating to the performance of the development, i.e.,
because the agreed upon circumstances under which the payments would become
due do not occur. In addition, however, the LIHTC investors may not make the
payments as a result of changes in the financial capacity of the LIHTC
investors themselves. In the event that the LIHTC investors do not make
required payments, the Trust may be required to enforce the obligations of the
LIHTC investors under their notes or other payment agreements with the
development owner. Enforcement actions may include foreclosing upon or
otherwise acquiring the defaulting LIHTC investors' ownership interests. As
the owner of such interests in the development owner, the Trust would be
subject to the real-estate risks that any development owner would face.
Certain of these risks are described in the Trust's current prospectus under
the caption "RISK FACTORS--Real Estate-Related Risks".
THE TRUST RECOMMENDS VOTING IN FAVOR OF THE PROPOSED
AMENDMENTS TO THE CHARTER.
<PAGE>
<PAGE>
DESIGNATION OF AUDITORS
PROPOSAL IV: TO RATIFY THE SELECTION OF ARTHUR ANDERSEN L.L.P. AS
INDEPENDENT PUBLIC ACCOUNTANTS
The Participants will be requested to ratify the Board of Trustees'
selection of Arthur Andersen L.L.P. as the independent public accountants for
the Trust for the current fiscal year. Representatives of Arthur Andersen
L.L.P. will be present at the Meeting. They will be given an opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions.
As of April 3, 1997 Arthur Andersen, L.L.P. replaced KPMG Peat Marwick
L.L.P. (the "Former Accountants"). Beginning in November 1996, the Trust's
staff solicited proposals from several national accounting firms, including
the Former Accountants, for the provision of accounting services to the Trust.
On the basis of such proposals, the staff recommended to the Board of Trustees
that the Trust not renew its agreements with the Former Accountants for fiscal
year 1997, and that the Trust retain Arthur Andersen, L.L.P. The Former
Accountants were dismissed by the Trust upon a recommendation of the Trust's
legal and audit committee and by a vote of the Trustees at their meeting held
on April 3, 1997.
None of the Former Accountant's reports on the Trust's financial
statements for the past two years contained an adverse opinion, disclaimer of
opinion, or a modified or qualified opinion. Furthermore, during the Trust's
two most recent fiscal years: there were no disagreements with the Former
Accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure that were not resolved in
favor of the accountants; there were no disagreements with the Former
Accountants with respect to internal control; the Former Accountants had not
advised the Trust of any material matters with respect to the Trust's reports
or financial statements or of information that had come to the Former
Accountants' attention that had led them to no longer be able to rely on the
management's representations, that made them unwilling to be associated with
financial statements prepared by management, that led them to advise the Trust
of the need to expand the scope of its audit or that led them to question the
fairness or reliability of reports or financial statements.
Arthur Andersen, L.L.P. was not consulted on any matter during the
Trust's two most recent fiscal years on either the application of accounting
principles to a specified transaction or an audit opinion, or any matter on
which there was a disagreement with the Former Accountants.
PROPOSAL V: TO APPROVE AN AMENDMENT TO THE INVESTMENT ADVISORY AGREEMENT WITH
WELLINGTON MANAGEMENT COMPANY, LLP
The Board of Trustees has approved, subject to approval by the
Participants, an amendment to the Trust's Investment Advisory Agreement with
Wellington Management Company, LLP ("Wellington Management"). The Trust
currently has no independent investment adviser other than Wellington
Management, whose Investment Advisory Agreement with the Trust was approved by <PAGE>
<PAGE>
Participants at the Trust's 1992 Annual Meeting. Wellington Management, a
Massachusetts limited liability partnership, is a registered investment
adviser with principal offices located at 75 State Street, Boston,
Massachusetts 02109. Its Managing Partners are Robert W. Doran, Duncan M.
McFarland and John R. Ryan. Exhibit A identifies the general partners of
Wellington Management as of February 28, 1997, each of whom may be reached at
the principal office of the firm. At its meeting on April 2, 1997, the
Trustees, including each of the Trustees who is not an "interested person" (as
defined in the Investment Company Act of 1940) of the Trust, considered the
fact that under the proposed amendment to the Investment Advisory Agreement,
Wellington Management would be providing additional investment management
services as well as analytical services. The Trustees also considered that
the level of fees would increase in consideration of the increased services
being provided. The Trustees also considered that Wellington Management
possesses the relevant experience and expertise in investment advisory
services and in the sophisticated portfolio analytics contemplated by the
proposed amendments to the Investment Advisory Agreement. The Trustees
considered the nature and the quality of the investment services currently
provided by Wellington Management, including the compliance by Wellington
Management with policies and regulatory requirements. The Trustees received
all information they deemed necessary to their evaluation of the terms and
conditions of the proposed amendments to the Investment Advisory Agreement.
Based upon the Trustees' review and evaluations of the materials provided and
their consideration of all factors deemed relevant, the Trustees determined
that the proposed amendments to the Investment Advisory Agreement are
reasonable, fair, and in the best interests of the Participants of the Trust.
Accordingly, the Trustees, including all of the Independent Trustees, approved
the proposed amendment to the Investment Advisory Agreement and its submission
to each Participation for approval and adoption. If the proposed amendment to
the Investment Advisory Agreement is not approved and adopted by the Trust's
Participants, the current Investment Advisory Agreement between Wellington
Management and the Trust will continue in effect through May 21, 1997, and
thereafter will be subject to continuation by the Trustees.
Wellington Management is a professional investment counseling firm that
provides investment services to investment companies, employee benefit plans,
endowment funds, foundations, and other institutions and individuals. As of
February 28, 1997, Wellington Management held investment management authority
over approximately $139.6 billion of assets, including $16.6 billion of cash
and cash-equivalent assets. Wellington Management and its predecessor
organizations have provided investment advisory services to investment
companies since 1933 and to investment counseling clients since 1960.
Under the existing Investment Advisory Agreement, Wellington Management
provides investment advisory services concerning certain of the short-term,
liquid assets in the Trust's portfolio (the "Short-Term Assets"). Wellington
Management manages the investment and reinvestment of short-term assets;
continuously reviews, supervises and administers the investment program of
Short-Term Assets; determines the securities to be purchased, retained and
sold (and implements those decisions); renders regular reports to the Trust's
officers and Trustees concerning its discharge of the foregoing <PAGE>
<PAGE>
responsibilities, including causing to be provided to the Trust's officers
within 2 business days after each Valuation Date market prices as of the
Valuation Date of Short-Term Assets that mature more than 60 days after the
Valuation Date; develops and produces portfolio analysis reports; monitors
portfolio investment characteristics; analyzes portfolio performance and
provides to the Trust's officers within 10 business days after each calendar
month end a report regarding such performance for such month; provides
analysis on markets and instruments; provides investment overview and economic
outlook forecasts; provides information and comment on various relevant
regulatory and legal issues; attends meetings of the Trust's Executive
Committee and Trustees as reasonably requested; and supplies the Trust's
officers and Trustees with statistical information and reports. Wellington
Management discharges these and its other duties subject to the oversight of
the officers and Trustees of the Trust and in compliance with the Trust's
policies.
Wellington Management renders all of the services described above at its
own expense, and provides the office space, furnishings and equipment, and
personnel required by it to perform those services for the compensation
described below.
Wellington Management is authorized to arrange for the execution of
portfolio transactions by selecting brokers or dealers that will execute the
transactions, and is directed to use its best efforts to obtain the best net
results, taking into account such factors as price (including the applicable
brokerage commission or dealer spread), size of order, difficulty of
execution, and operational facilities of the firm involved. Wellington
Management may in its discretion purchase and sell portfolio securities
through brokers who provide it or the Trust with research, analysis, advice
and similar services, and Wellington Management may pay to these brokers, in
return for research and analysis, a higher commission than may be charged by
other brokers, provided that Wellington Management determines in good faith
that such commission is reasonable in terms either of that particular
transaction or of the overall responsibility of Wellington Management, that
the total commission paid by the Trust will be reasonable in relation to the
benefits to the Trust over the long term, and that the total commission paid
by the Trust is consistent with commissions paid in comparable transactions.
In selecting a broker for each specific transaction, Wellington
Management has agreed to use its best judgment to choose the broker most
capable of providing the brokerage services necessary to obtain the best
available price and most favorable execution. The full range and quality of
brokerage services available will be considered in making these
determinations. For example, brokers may be selected on the basis of the
quality of such brokerage services related to the requirements of the specific
transaction such as the following; capable floor brokers or traders, competent
block trading coverage, good communications, ability to position, use of
automation, research contracts, arbitrage skills, administrative ability, or
provision of market information relating to the security. Wellington
Management will make periodic evaluations of the quality of these brokerage
services as provided by various firms and measure these services against its
own standards of execution. Brokerage services will be obtained only from <PAGE>
<PAGE>
those firms which meet its standards, maintain a reasonable capital position,
and can be expected to reliably and continuously supply these services.
On occasions when Wellington Management deems the purchase or sale of a
security to be in the best interest of the Trust as well as other clients,
Wellington Management, to the extent permitted by applicable laws and
regulations, may, but is under no obligation to, aggregate the securities to
be so purchased or sold in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by Wellington Management in the manner it considers
to be the most equitable and consistent with its fiduciary obligations.
Under the terms of the existing Investment Advisory Agreement, Wellington
Management is compensated monthly at the annual rate of 0.125% of the market
value of the Trust's assets under management, based upon the average monthly
market value of the first $100 million, and at the annual rate of .10% of the
market value of the Trust's assets under management, based upon the average
monthly market value in excess $100 million.
Under the proposed amendment to the Investment Advisory Agreement,
Wellington Management will continue to provide all of the above-described
investment advisory services concerning the Short-Term Assets designated by
the Trust from time to time. In addition, Wellington Management will also
provide (a) all of the above-described investment advisory services concerning
certain intermediate-term, liquid assets in the Trust's portfolio designated
by the Trust from time to time (the "Short/Intermediate Term Assets"), and (b)
certain portfolio analysis functions and reports for the Trust, including
analysis and reports which may assist the Trust in determining the allocation
of assets within the Short/Intermediate Term Assets. Under the terms of the
proposed amendment to the Investment Advisory Agreement, Wellington Management
will be compensated monthly at the annual rate of 0.16% of the market value of
the Trust's assets under management based upon the average monthly market
value.
Wellington Management serves as investment adviser or subadviser to a
number of registered investment company portfolios which have investment
objectives similar to the Short/Intermediate Term Assets. It should be noted
that for all of the portfolios listed below, Wellington Management proves
investment management services without the portfolio analysis services that
will be provided to the Trust under the terms of the proposed amendment to the
Investment Advisory Agreement. The following table identifies the portfolios,
state their net assets and the applicable fee schedule.
<PAGE>
<PAGE>
<TABLE
[CAPTION]
2/28/97 Advisory Fee Schedule(1)
Net Assets ---------------------
Fund $ Mil Net Assets Annual Rate
- ----- ------------- ---------- -----------
[S] [C] [C] [C]
Horace Mann Short-Term $ 1 First $100 Million 0.125%
Investment Fund Next $100 Million 0.100%
Over $200 Million 0.075%
ICON Short-Term
Fixed Income Fund $ 78 First $250 Million 0.200%
Next $250 Million 0.150%
Over $500 Million 0.125%
SEI Daily Income Trust $ 56 First $500 Million 0.100%
Corporate Daily Income Next $500 Million 0.075%
Portfolio(2) Over $1 Billion 0.050%
_____________________________
(1) All fee schedules may be subject to fee waivers. Minimum annual fees
are not reflected in effective annual rate.
(2) The fee schedules shown for SEI Daily Income Trust Corporate Daily
Income Portfolio applies to the aggregate assets of four portfolios in the SEI
Daily Income Trust.
During the year ended December 31, 1996, Wellington Management received
advisory fees from the Trust totaling $104,756. Had the fee in the proposed
amendment been in effect during the same period, Wellington Management would
have received a total of $134,089 of adviser's fees. Such fees which
represent a 21.9% increase in fees would represent compensation for investment
advisory services with respect to the Trust's Short Term-Assets, as provided
under the existing Investment Advisory Agreement, plus compensation for
additional investment advisory services with respect to Short/Intermediate
term assets and portfolio analysis functions and reports, as provided under
the proposed amendments to the Investment Advisory Agreement.
THE TRUST RECOMMENDS VOTING IN FAVOR OF THE PROPOSED AMENDMENTS TO THE
INVESTMENT ADVISORY AGREEMENT WITH WELLINGTON.
<PAGE>
<PAGE>
VOTING PROCEDURES
As to Proposals I, II, III, IV and V the vote required for approval will
be a majority of the Units represented in person or by proxy at the Meeting.
Each Unit is entitled to one vote. A quorum for the Meeting is the presence
in person or by proxy of Participants holding a majority of Units outstanding
at the close of business on April 21, 1997.
PROPOSALS FOR 1998 ANNUAL MEETING OF PARTICIPANTS
Participants who wish to make a proposal to be included in the Trust's
proxy statement and form of proxy for the Trust's 1998 Annual Meeting of
Participants (expected to be held in April 1998) must cause such proposal to
be received by the Trust at its principal office not later than December 16,
1997.
OTHER MATTERS
The Trust currently has no independent investment adviser other than
Wellington Management Company, LLP. Investment decisions with respect to
Trust assets other than those subject to the Investment Advisory Agreement
with Wellington Management Company are made by the Chief Executive Officer and
by the Chief Investment Officer of the Trust under the supervision of the
Executive Committee and, ultimately, the Board of Trustees. Because both the
Chief Executive Officer and the Chief Investment Officer are officers of the
Trust and neither is engaged in the business of providing securities
investment advice to others, neither the Chief Executive Officer nor the Chief
Investment Officer is registered as an investment adviser under the Investment
Advisers Act. For the foregoing reasons, the Participants will not be asked
at the Meeting to approve any investment advisory contract relating to the
Chief Executive Officer or the Chief Investment Officer.
At the date of this Proxy Statement, the Trustees knows of no other
matters that may come before the Meeting. If any other matter properly comes
before the Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the Units represented by such Proxy in accordance with
their best judgment.
Participants who are unable to attend the Meeting in person are urged to
forward their Proxies without delay. A prompt response will be appreciated.
By Order of the Board of Trustees
STEPHEN COYLE, Chief Executive Officer
<PAGE>
<PAGE>
EXHIBIT A
Wellington Management Company, LLP Partners
Kenneth L. Abrams
Nicholas C. Adams
Rand L. Alexander
Deborah L. Allinson
Nancy T. August
James H. Averill
Marie-Claude Bernal
William N. Booth
Paul Braverman
William D. DeIanni
Pamela Dippel
Robert W. Doran
Charles T. Freeman
Laurie A. Gabriel
Frank J. Gilday
John H. Gooch
Nicholas P. Greville
Willam C. S. Hicks
Paul D. Kaplan
John C. Keogh
Mark T. Lynch
Nancy T. Lukitsh
Christine S. Manfredi
Patrick J. McCloskey
Earl E. McEvoy
Duncan M. McFarland
Paul M. Mecray, III
Matthew E. Megargel
James N. Mordy
Diane C. Nordin
Edward P. Owens
Saul J. Pannell
Thomas L. Pappas
David M. Parker
Jonathan M. Payson
Stephen M. Pazuk
Robert D. Rands
Eugene E. Record, Jr.
John R. Ryan
Joseph H. Schwartz
David W. Scudder
Binkley C. Shorts
Trond Skramstad
Catherine A. Smith
Stephen A. Soderberg
Harriett Tee Taggart
Perry M. Traquina
Gene R. Tremblay
Mary Ann Tynan
<PAGE>
<PAGE>
Ernst H. von Metzsch
Clare Villari
James L. Walters
Kim Williams
Frank V. Wisneski
<PAGE>
<PAGE>
AFL-CIO HOUSING INVESTMENT TRUST
------------------
PROXY
------------------
1997 ANNUAL MEETING OF PARTICIPANTS
The undersigned hereby appoints William C. Tutt and Michael M. Arnold and
each of them with power to act without the other and with full power of
substitution, as proxies for and on behalf of the undersigned, to vote all
Units of Participation which the undersigned is entitled to vote at the Annual
Meeting of Participants to be held May 13, 1997 and all adjournments thereof,
with all the powers that the undersigned would possess if personally present
and particularly (but without limiting the generality of the foregoing) to
vote and act as follows:
(1) For the election of a Chairman to serve until the 1998 Annual
Meeting of Participants and until his successor is elected and qualifies:
Richard Ravitch
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(2) For the election of two Class II Union Trustees and two Class II
Management Trustees to serve until the 2000 Annual Meeting of Participants and
until their successors are elected and qualify:
*Robert A. Georgine (Class II Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
*John T. Joyce (Class II Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Alfred J. Fleischer (Class II Management Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Marlyn J. Spear (Class II Management Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) To approve amendments to the Trust's Charter to authorize
investment in (A) construction or permanent loans issued or guaranteed by
state housing finance agencies rated "A" or better by Standard & Poor's, Inc.,
securities backed by such loans and interests in such loans or securities and
(B) tax credit bridge loans.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) For ratification of the Board of Trustees' selection of Arthur
Andersen L.L.P. as independent public accountants for the Trust's 1996 fiscal
year:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(5) To appprove amendments to the Trust's Investment Advisory
Agreement with Wellington Management Company, LLP.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
and upon such other matters as may properly come before the meeting.
The Trustees recommend a vote FOR the above items. ITEMS NOT MARKED
OTHERWISE WILL BE TREATED AS A VOTE FOR THE ITEM. You may strike through or
manually cross out the name of any nominee for Chairman or Trustee for which
you wish to withhold authority to vote.
<PAGE>
<PAGE>
The Units of Participation represented hereby will be voted in accordance
with instructions contained in this Proxy.
The undersigned hereby ratifies and confirms all that said proxies or
their substitutes or any of them may lawfully do by virtue hereof. The
undersigned hereby acknowledges receipt of the Notice of 1997 Annual Meeting
of Participants dated April 21, 1997 and the Proxy Statement dated April 21,
1997.
Dated: , 1997
--------------
Participant:
------------------------------------------------------
By:
------------------------------------------------------
(Signature)
-------------------------------------------------------
(Name - please print)
Title:
-------------------------------------------------------
Number of Units:
-------------------------------------------------------
Please sign your name and indicate your capacity as attorney, trustee or
official of a Participant.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
IMPORTANT - PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
SELF-ADDRESSED, STAMPED ENVELOPE. YOU MAY FAX A COPY OF THE PROXY TO THE
TRUST AS LONG AS THE MANUALLY EXECUTED ORIGINAL PROXY IS MAILED NO LATER THAN
MAY 13, 1997, THE DATE OF THE ANNUAL MEETING. The Trust's fax number is
202/331-8190.
