As filed with the Securities and Exchange Commission on May 14, 1999
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
[x] 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>
May 17, 1999
TO PARTICIPANTS, AFL-CIO HOUSING INVESTMENT TRUST
Enclosed is the Notice of the 1999 Annual Meeting of Participants and a Proxy
Statement describing the election for Trustees, a proposed amendment of the
Trust's charter 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 June 4, 1999, the date of the
Annual Meeting.
Sincerely,
/s/ Stephen Coyle
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
------------------------------
PROXY
------------------------------
1999 Annual Meeting of Participants
The undersigned hereby appoints Michael M. Arnold and ElChino M. Martin
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 June 4, 1999 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 2000 Annual
Meeting of Participants and until his successor is elected and qualifies:
Richard Ravitch
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(2) For the election of four Class I Union Trustees and two Class I
Management Trustees to serve until the 2002 Annual Meeting of Participants and
until their successors are elected and qualify:
Linda Chavez-Thompson (Class I Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Francis Hanley (Class I Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Andrew Stern (Class I Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Richard Trumka (Class I Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Walter Kardy (Class I Management Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
George Latimer (Class I Management Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
<PAGE>
<PAGE>
(3) For the approval of amendments to the Trust's Charter to modify
certain of the criteria for state and local government-related projects and
privately-collateralized loans in which the Trust is authorized to invest:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) For ratification of the Board of Trustees' selection of Arthur
Andersen LLP as independent public accountants for the Trust's 1999 fiscal
year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
and upon such other matters as may properly come before the meeting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The Trustees recommend a vote FOR the above items. ANY PROXY NOT MARKED
OTHERWISE WILL BE TREATED AS A VOTE FOR THE ITEMS. 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>
AFL-CIO Housing Investment Trust
NOTICE OF 1999 ANNUAL MEETING OF PARTICIPANTS
- -----------------------------------------------------------------------------
To Participants, AFL-CIO Housing Investment Trust:
Notice is hereby given that the 1999 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 Friday, June 4, 1999 at 4:00 pm
for the following purposes:
1. To elect a Chairman to hold office until the 2000 Annual Meeting of
Participants and until his successor is elected and qualifies;
2. To elect four (4) Class I Union Trustees and two (2) Class I Management
Trustees to hold office until the 2002 Annual Meeting of Participants and
until their respective successors are elected and qualify;
3. To approve amendments to the Trust's Charter to modify certain of the
criteria for state and local government-related projects and privately-
collateralized loans in which the Trust is authorized to invest;
4. To ratify the selection of Arthur Andersen LLP as the independent
public accountants for the Trust's fiscal year ending December 31, 1999; and
5. 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 May 1, 1999 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
/s/ Stephen Coyle
Stephen Coyle
Chief Executive Officer
Dated: May 17, 1999<PAGE>
<PAGE>
AFL-CIO HOUSING INVESTMENT TRUST
-----------------------
PROXY STATEMENT
------------------------
May 17, 1999
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 Friday, June 4, 1999,
beginning at 4:00 pm and at any adjournment(s) thereof.
A copy of the Trust's annual report for the year ended December 31, 1998
was previously mailed to each Participant entitled to vote at the Meeting
together with financial statements for the fiscal year ended December 31,
1998. The Trust will furnish, without charge, a copy of the annual report for
1998 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,
Executive Vice President - Marketing, AFL-CIO Housing Investment Trust, 1717 K
Street, N.W., Suite 707, Washington, D.C. 20006.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Trust's Annual Meeting, Participants will act upon the matters
outlined in the accompanying notice of Meeting, including the election of a
Chairman of the Board of Trustees, election of Trustees, approval of proposed
amendments to the Trust's Charter and ratification of the Trust's independent
auditors. In addition, the Trust's management will respond to questions from
Participants.
WHO IS ENTITLED TO VOTE?
As of the close of business on May 1, 1999, 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 1,894,383.3831 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.
WHO CAN ATTEND THE MEETING?
All Participants of the record date, or their duly appointed proxies, may
attend the Meeting.<PAGE>
<PAGE>
WHAT CONSTITUTES A QUORUM?
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 May 1, 1999. As of the record date, 1,894,383.3831 Units of Participation
of the Trust were outstanding. Proxies received but marked as abstentions
will be included in the calculation of the number of shares considered to be
present at the Meeting.
HOW DO I VOTE?
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.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. 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.
WHAT ARE THE BOARD OF TRUSTEE'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Trustees. The Board's recommendation is set
forth together with the description of each item in this proxy statement. In
summary, the Board recommends a vote:
- for election of the nominated Chairman (see page 3);
- for election of the nominated Trustees (see page 3);
- for approval of the amendments to the Trust's Charter to modify
certain of the criteria for state and local government-related
projects and privately-collateralized loans in which the Trust is
authorized to invest (see page 14); and
- for ratification of the selection of Arthur Andersen LLP as the
independent public accountants for the Trust's fiscal year ending
December 31, 1999 (see page 17).
With respect to any other matter that properly comes before the Meeting
or any adjournment or adjournments thereof, the proxy holders will vote as
recommended by the Board of Directors or, if no recommendation is given, in
their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
As to Proposals I, II, III, and IV, 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.
<PAGE>
<PAGE>
WHO ARE THE PRINCIPAL HOLDERS OF THE TRUST'S VOTING SECURITIES?
The following table sets forth the beneficial ownership information as of
May 1, 1999, with respect to each Labor Organization and Eligible Pension Plan
(as each of those terms is defined in the Trust's Declaration of Trust) known
to the Trust to be the beneficial owner of more than 5 percent (that is more
than 94,719.1692 Units) of the Trust's 1,894,383.383 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
Central Pension Fund of the
International Union of
Operating Engineers
415 Chesapeake Street, N.W.
Washington, D.C. 20016 104,466.6829 Units 5.5%
WHO IS MAKING THE SOLICITATION ON BEHALF OF THE TRUST?
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 May 17, 1999.
ELECTION OF TRUSTEES
PROPOSAL I: TO ELECT THE CHAIRMAN
PROPOSAL II: TO ELECT FOUR (4) CLASS I UNION TRUSTEES AND TWO (2) CLASS I
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 21 Trustees, 12 of whom are Union Trustees
(Chavez-Thompson, Coia, Georgine, Hanley, Hill, Hurt, Joyce, Maddaloni,
Monroe, Stern, Sweeney and Trumka), 8 of whom are Management Trustees
(Cullerton, Duvernay, Fleischer, Kardy, Latimer, 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.
<PAGE>
The terms of office of Trustees Chavez-Thompson*, Hanley*, Kardy, Latimer,
Stern* and Trumka* and Chairman Ravitch will expire on the day of the Meeting.
The principal occupations and business experience for the past five years of
these Class I Trustees standing for reelection are described below under
"Nominees for Reelection."
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 I Trustees will
serve for three-year terms ending in 2002 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.
NOMINEES FOR REELECTION
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 during which he or she 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.
Principal Occupation/ Trustee
Name Business Experience During Past 5 Years Since Age
- ----------- --------------------------------------- --------- ----
Richard Ravitch Principal, 1992 65
Ravitch, Rice & Co., LLC
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
Linda Chavez-Thompson* Executive Vice President, 1996 54
AFL-CIO; formerly, International
Vice President, American Federation
of State, County and Municipal
Employees
Francis X. Hanley* General President (formerly General 1990 68
Secretary-Treasurer) International
Union of Operating Engineers
Walter Kardy President, Specialty Contractor's 1996 70
Management Inc.
*Interested Person of the Trust. See "Executive Officers" for further
discussion.
<PAGE>
<PAGE>
Principal Occupation/ Trustee
Name Business Experience During Past 5 Years Since Age
- ----------- --------------------------------------- --------- ----
George Latimer Chief Executive Officer, National 1996 63
Equity Fund (a tax credit
investment company); Professor of
Urban Studies, Macalster College;
formerly, Director, Special Actions
Office, HUD
Andrew Stern* President, Service Employees 1998 48
International Union
Richard L. Trumka* Secretary-Treasurer, AFL-CIO; 1995 49
formerly, President, United Mine
Workers of America
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE REELECTION
OF THE NOMINATED CHAIRMAN AND TRUSTEES.
INCUMBENT TRUSTEES
The following incumbent 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
- ----- --------------------------------------- --------- ----
Arthur A. Coia* General President (formerly, 1993 55
Secretary-Treasurer), Laborers'
International Union of North America
*Interested Person of the Trust. See "Executive Officers" for further
discussion.
<PAGE>
<PAGE>
Principal Occupation/ Trustee
Name Business Experience During Past 5 Years Since Age
- ----- --------------------------------------- --------- ----
John E. Cullerton Chairman, Central Pension Fund of 1995 83
the International Union of Operating
Engineers and Consultant to the Hotel
Employees and Restaurant Employees
International Union; formerly Fund
Advisor to Trustees for the Hotel
Employees and Restaurant Employees
International Union Health, Welfare
and Pension Funds
Terrence R. Duvernay Public Finance Division, Legg Mason; 1995 56
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 and Michigan State Housing
Development
Alfred J. Fleischer Chairman, Fleischer-Seeger 1992 78
Construction Corporation; formerly
Director, National Corporation for
Housing Partnerships of Washington,
D.C.
Robert A. Georgine* President, Building and Construction 1982 66
Trades Department AFL-CIO; Chairman
and Chief Executive Officer, Union
Labor Life Insurance Company
Edwin D. Hill* Secretary, International Brotherhood 1998 61
of Electrical Workers; formerly
International Vice President,
International Brotherhood of Electrical
Workers Third District Office
Frank Hurt* President, Bakery, Confectionery 1993 60
& Tobacco Workers and Grain Millers
International Union
John T. Joyce* President, International Union of 1993 63
Bricklayers and Allied
Craftworkers; Director, Union Labor
Life Insurance Company
*Interested Person of the Trust. See "Executive Officers" for further
discussion. <PAGE>
<PAGE>
Principal Occupation/ Trustee
Name Business Experience During Past 5 Years Since Age
- ----- --------------------------------------- --------- ----
Martin J. Maddaloni* President, United Association of 1998 58
Journeymen and Apprentices of the
Plumbing and Pipe Fitting Industry
of the United States and Canada
("UA"); formerly International Vice
President, UA District 2; formerly
International Representative, UA;
formerly Special Representative, UA
Michael Monroe* General President, International 1998 48
Brotherhood of Painters and Allied
Trades, AFL-CIO
Marlyn J. Spear Chief Investment Officer, Milwaukee 1995 45
and Vicinity Building Trades United
Pension Trust Fund; formerly Investment
Coordinator
Tony Stanley Executive Vice President and Director, 1985 65
TransCon Builders, Inc. (building
construction)
John Sweeney* President, AFL-CIO; formerly 1981 64
International President, Services
Employees International Union
Patricia F. Wiegert Retirement Administrator, Contra 1995 52
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. The executive officers of the Trust are as follows:
Stephen Coyle*, age 53, 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, his Master's degree from the Harvard Kennedy School of
Government, and a law degree from Stanford Law School.
Michael M. Arnold*, age 59, became Executive Vice President in April
1999. From 1985 until 1999, he served as the Trust's Director of Investor
Relations. 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
*Interested Person of the Trust. See "Executive Officers" for further
discussion. <PAGE>
<PAGE>
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 38-year member and former local union officer of the International
Union of Bricklayers and Allied Craftsworkers, and is also a licensed real
estate broker.
ElChino M. Martin*, age 38, became General Counsel in January 1998. Mr.
Martin joined the Trust in 1992. From 1992 until 1993, he served as Special
Counsel, when he became Chief of Staff. From 1995 until his appointment as
General Counsel, he served as Chief of Staff and Development Counsel. Prior
to joining the Trust, from 1988 to 1992, Mr. Martin was an associate in the
Real Estate Department of Morrison & Foerster. From 1986 until 1988, he
served as law clerk to the Honorable Gabrielle K. McDonald, U.S. District
Court for the Southern District of Texas. Mr. Martin earned his Bachelor of
Arts degree from the University of North Carolina at Chapel Hill and his Juris
Doctor degree from Yale Law School.
Harry W. Thompson*, age 39, was appointed Controller in December 1997.
Mr. Thompson joined the Trust in 1991. From 1991 until 1993, he served as
Deputy Financial Manager, when he became Controller. Prior to joining the
Trust, from 1988 through 1991, Mr. Thompson was the Controller for Rosewood
Residential, an apartment developer and its predecessor Property Company of
America. From 1985 to 1988, Mr. Thompson held Asset Manager positions with
CRI Inc. and Shelter Can-American. From 1982 to 1985, Mr. Thompson was on the
audit staff of KMG/Main Hurdman, an international accounting firm. Mr.
Thompson is a certified public accountant and earned his Bachelor of Science
in Business Administration degree, with a double major in professional
accounting and finance, from The American University.
Patton H. Roark, Jr.*, age 32, was appointed Portfolio Manager in
December 1997. Mr. Roark joined the Trust in 1993 as Assistant Portfolio
Manager. Prior to joining the Trust, from 1990 to 1993, Mr. Roark was a
Senior Consultant for Price Waterhouse, an international accounting firm.
From 1989 to 1990, Mr. Roark was an internal auditor with the Inspector
General's office of the Office of Personnel Management. Mr. Roark is a
Chartered Financial Analyst, Certified Public Accountant and Certified
Internal Auditor, and earned his Bachelors of Science degree in accounting
from Shepherd College.
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 1998 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
*Interested Person of the Trust. See "Executive Officers" for further
discussion. <PAGE>
<PAGE>
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).
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 9 times during 1998. 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*, Hill* and Stern*, and Management
Trustees Duvernay, Latimer, Spear and Stanley. Mr. Stanley served as chairman
of this Committee, which met 2 times during 1998.
The Marketing Committee oversees the marketing policies and strategies of
the Trust. This Committee is currently composed of Union Trustees Chavez-
Thompson*, Maddaloni* and Monroe*, and Management Trustees Fleischer, Kardy
and Spear. Mr. Fleischer served as chairman of this Committee, which met 2
times during 1998.
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
Cullerton, Latimer, Stanley and Wiegert, and Union Trustees Trumka*, Hurt* and
Joyce*. Mr. Hurt served as chairman of this Committee, which met 2 times
during 1998.
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.
*Interested Person of the Trust. See "Executive Officers" for further
discussion. <PAGE>
<PAGE>
The Board of Trustees met 2 times during the Trust's fiscal year ended
December 31, 1998, while the four committees of the Board of Trustees met a
total of times. Trustees and 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 1998
fiscal year.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
During the fiscal year ended December 31, 1998, 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, 1998
was $16,500. 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, 1998, 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 $152,695 in
salary and cash compensation, $80,718 of deferred compensation and interest on
compensation previously deferred received in lieu of participation in the
Retirement Plan, and $1,350 in matching funds under the AFL-CIO Housing
Investment Trust 401(k) Retirement Plan (the "401(k) Plan"). Pursuant to his
employment agreement, Mr. Coyle also received health and welfare and life
insurance benefits substantially equivalent to those provided by the AFL-CIO
for department heads.
The following table sets forth all compensation, including deferred
compensation, which was paid during 1998 to all executive officers and
directors of the Trust.
<TABLE>
<CAPTION>
1998 COMPENSATION TABLE
NAME OF PERSON, AGGREGATE PENSION ESTIMATED TOTAL
POSITION COMPENSATION OR RETIREMENT ANNUAL COMPENSATION
FROM TRUST<F1> BENEFITS BENEFITS FROM TRUST
($) 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 152,695 82,068 determined applicable
Michael M. Arnold<F5>
Director of not
Investor Relations 112,691 29,299 59,133 applicable
James D. Campbell<F6>
Chief Investment not
Officer 134,207 27,744 23,073 applicable
ElChino Martint<F7> not
General Counsel 139,433 24,373 20,610 applicable
Harry Thompson<F8> not
Controller 112,936 21,815 25,635 applicable
Patton H. Roark, Jr.<F9>
Portfolio not
Manager 98,151 17,309 13,635 applicable
Richard Ravich,
Chairman 10,000 0 0 10,000
Arthur A. Coia*, 0 0 0 0
Linda Chavez-
Thompson,*
Union Trustee 0 0 0 0
Terence R. Duvernay,
Management Trustee 0 0 0 0
Alfred J. Fleischer,
Management Trustee 0 0 0 0
Robert A. Georgine*,
Union Trustee 0 0 0 0
Francis X. Hanley*,
Union Trustee 0 0 0 0
Frank Hurt*, 0 0 0 0
Union Trustee
John T. Joyce*, 0 0 0 0
Union Trustee
Walter Kardy, 0 0 0 0
Management Trustee
George Latimer, 1,000 0 0 0
Management Trustee
Michael Monroe*, 0 0 0 0
Union Trustee
Marlyn J. Spear,
Management Trustee 0 0 0 0
Tony Stanley,
Management Trustee 5,500 0 0 5,500
John Sweeney*, 0 0 0 0
Union Trustee
Richard Trumka*, 0 0 0 0
Union Trustee
Patricia F. Wiegert, 0 0 0 0
Management Trustee
All Directors and
Officers as a Group**
(23 persons) $ 766,613 $ 202,608 $142,085 $16,500
- ----------------------
*Interested Person of the Trust. See "Information Regarding the Trust" for
further discussion.
**In addition, the Trust has an additional 22 employees who received
compensation in excess of $60,000 from the Trust during 1998; these employees
are not involved in the management of the Trust's portfolio.
</TABLE>
- ---------------------
<F1> Compensation figures represent 100% of each executive officer's
compensation for time devoted to Trust matters. Approximately 30% of Mr.
Coyle's time, 38% of Mr. Arnold's time, 17% of Mr Campbell's time, 0%
of Mr. Martin's time, 7% of Mr. Thompson's time and 0% of Mr. Roarks's
time , was devoted to matters relating to the AFL-CIO Building Investment
Trust ("BIT"). Mr. Coyle received compensation from BIT Limited
Partnership 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.
<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.<PAGE>
<PAGE>
<F4> Aggregate Compensation includes $8,058 of deferred compensation
in 1998 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 $1,350 of matching funds accrued under the 401(k) Plan and
$80,718 of deferred compensation in lieu of participation in the
Retirement Plan. The total amount of compensation deferred by Mr. Coyle
through December 31, 1998 in lieu of participation in the Retirement
Plan, including interest, is $372,146, and the total amount deferred
under the 401(k) Plan, through December 31, 1998, including interest and
Trust matching, is $20,630.
<F5> Aggregate Compensation includes $10,000.00 of deferred compensation in
1998 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 $1,350 of matching
funds accrued under the 401(k) Plan and $27,949 contributed to the
Retirement Plan in 1998. The total amount of compensation deferred by
Mr. Arnold as of December 31, 1998 under the 401(k) Plan, including
interest and Trust matching, is $298,977.
<F6> Aggregate Compensation includes $9,832 of deferred compensation in
1998 under the 401(k) Plan and excludes amounts contributed to the
Retirement Plan on Mr. Campbell's behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $1,350 of matching
funds accrued under the 401(k) Plan and $26,394 contributed to the
Retirement Plan in 1998. The total amount of compensation deferred
by Mr. Campbell as of December 31, 1998 under the 401(k) Plan, including
interest and Trust matching, is $20,804.
<F7> Aggregate Compensation includes $10,000 of deferred compensation in
1998 under the 401(k) Plan and excludes amounts contributed to the
Retirement Plan on Mr. Martins behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $1,350 of matching
funds accrued under the 401(k) Plan and $23,023 contributed to the
Retirement Plan in 1998. The total amount of compensation deferred
by Mr. Campbell as of December 31, 1998 under the 401(k) Plan, including
interest and Trust matching, is $101,000.
<F8> Aggregate Compensation includes $10,000 of deferred compensation in
1998 under the 401(k) Plan and excludes amounts contributed to the
Retirement Plan on Mr. Thompson's behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $1,350 of matching
funds accrued under the 401(k) Plan and $20,465 contributed to the
Retirement Plan in 1998. The total amount of compensation deferred
by Mr. Thompson as of December 31, 1998 under the 401(k) Plan, including
interest and Trust matching, is $87,610.
<F9> Aggregate Compensation includes $2,860 of deferred compensation in
1998 under the 401(k) Plan and excludes amounts contributed to the
Retirement Plan on Mr. Roark's behalf. Pension or Retirement Benefits
Accrued as Part of Trust Fund Expenses includes $1,350 of matching
funds accrued under the 401(k) Plan and $15,959 contributed to the
Retirement Plan in 1998. The total amount of compensation deferred
by Mr. Roark as of December 31, 1998 under the 401(k) Plan, including
interest and Trust matching, is $21,121.
<PAGE>
<PAGE>
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, 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 described
below for all of its employees including its Chief Executive Officer (and
subsequent Chief Executive Officers).
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 17.4% of eligible employees' base salaries during the twelve months ended
December 31, 1998. During 1998, the base salaries of Mr. Arnold, Mr.
Campbell, Mr. Martin, Mr. Thompson and Mr. Roark were $160,925, $152,000,
$132,573, $117,767 and $91,889, respectively.
The Retirement Plan is open to employees of the AFL-CIO and other
participating employers which are approved by the Retirement Plan's board of
trustees and 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 3.00 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<F10> in specified compensation and years of service
classifications. As of December 31, 1998, Mr. Arnold, Mr. Campbell, Mr.
Martin, Mr. Thompson and Mr. Roark have approximately 14, 6, 6, 8 and 6
credited years of service, respectively, under the Retirement Plan.
<F10> 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>
<TABLE>
<CAPTION>
Years of Service
Final
Average Salary 15<F11> 20<F11> 25<F11> 30<F12> 35<F12>
- -------------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
50,000 $ 22,500 $ 30,000 $ 37,500 $ 38,750 $ 40,000
70,000 31,500 42,000 52,500 54,250 56,000
100,000 45,000 60,000 75,000 77,500 80,000
</TABLE>
<F11> 3.00 percent per year up to 25 years.
<F12> 0.5 percent per year for years over 25 years.
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 $10,000 in 1999. In 1999, the Trust will match dollar-for-dollar the first
$1,450 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 employee of the Trust is eligible
to participate in the 401(k) Plan provided such employee has reached the age
of 21 and is not a nonresident alien.
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
account 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 70 1/2. 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.
<PAGE>
<PAGE>
The following table sets forth the amounts paid or distributed
pursuant to the 401(k) Plan in 1998 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 1998, the distribution
or unconditional vesting of which are not subject to future events.
<TABLE>
<CAPTION>
Name of Individual Amount paid or Employer
Number of Group Distributed ($) Amount Deferred ($) Matching ($)
- ------------------ --------------- ------------------- -----------
<S> <C> <C> <C>
Stephen Coyle -0- 8,058 1,350
Michael M. Arnold -0- 10,000 1,350
James D. Campbell -0- 9,832 1,350
ElChino M. Martin -0- 10,000 1,350
Harry W. Thompson -0- 10,000 1,350
Patton H. Roark, Jr. -0- 2,860 1,350
All executive officers
as a group(6 persons) -0- 50,750 8,100
</TABLE>
PROPOSAL III: TO APPROVE AMENDMENTS TO THE TRUST'S CHARTER TO MODIFY
CERTAIN OF THE CRITERIA FOR STATE AND LOCAL GOVERNMENT-
RELATED PROJECTS AND PRIVATELY-COLLATERALIZED LOANS IN WHICH
THE TRUST IS AUTHORIZED TO INVEST
Under the Declaration of Trust, the Trust is authorized to invest in
construction and/or permanent loans and securities that are (i) supported by a
full faith and credit guaranty of a state/local government or agency having
general taxing authority; or (ii) supported by a guaranty of at least 75% of
the principal amount of such loan or security from a state insurance or
guaranty program having a credit rating of "A-1" by S&P; or (iii) issued or
guaranteed by a housing finance agency designated "top tier" or having a
general obligation rating of "A" or better from S&P, provided that the loans
or securities have certain guaranties or security from the state or agency.
The Trust also has the authority to invest in construction (but not permanent)
loans or related securities made or issued by any state or local government or
agency (whether or not rated) or any private lender as long as the investments
are secured or collateralized by : (i)cash placed in escrow with a third party
by a state or local government or agency; or (ii)a letter of credit from an
entity rated "B" or high by Thomson Bankwatch; or (iii) a guaranty from an
entity (public or private) with a short-term rating of "A-1" from S&P, for
guaranties of 12 months or less, or with a long-term rating in one of the two
rating highest categories for guaranties longer than 12 months.
<PAGE>
<PAGE>
The Board of Trustees has approved, subject to approval by the
Participants at the Meeting, amendments to the Trust's Declaration of Trust
which will permit the Trust to invest in construction and/or permanent loans
or related securities made or issued by any state or local government or
agency or instrumentality thereof and construction and/or permanent loans or
related securities made or issued by any private or public lender as long as
such loans or securities are fully collateralized or secured by: (i) cash
placed in escrow with a third party by a state or local government or agency
or instrumentality thereof; or (ii) a letter of credit, insurance or other
form of guaranty from an entity (public or private) with an S&P rating of "A"
or better (or a comparable rating by another statistical rating agency). The
aggregate amount of investments made under this authority, together with all
other state and local government-related investments then-held by the Trust,
may not exceed 30% of the Trust's net assets.
At least 70% of the mortgage-backed securities and mortgage loans in
which the Trust invests or that back the Trust's investment must either be
federally insured or guaranteed or be issued or guaranteed by Fannie Mae or
Freddie Mac. The amendments do not change this requirement and the Trust
intends to concentrate its investment in these types of mortgage loans and
mortgage-backed securities to the extent that market conditions permit,
consistent with the overall objectives of the Trust.
HOW WILL THESE CHANGES HELP THE TRUST MEET ITS GOALS?
These changes are designed to expand the Trust's range of investment
products, thereby increasing the investment opportunities available to the
Trust, to permit the Trust to invest in loans or securities which are made or
issued by any state and local government agency or instrumentality as long as
the required collateral or security is provided and to give the Trust
additional tools with which to manage its portfolio, all without materially
increasing the risk associated with the Trust's portfolio. The investment
criteria for state and local government-related and privately-collateralized
investments set forth in the Declaration of Trust were developed at a time
when real estate market conditions were significantly different than those
existing today and the Trust needs additional investment opportunities in
light of current market conditions.
In 1980, the Federal Housing Administration of the United States
Department of Housing and Urban Development ("FHA") insured 42% of all
mortgage loans originated for new multifamily construction in the United
States. By 1997, this percentage had declined to 10.34%. In addition, FHA-
insured loans, as well as loans securitized by Fannie Mae and Freddie Mac are
subject to statutory limits. In the case of FHA-insured mortgage loans, the
statutory limits have not been increased since March, 1993. These statutory
limits restrict the investment opportunities available to the Trust under the
FHA insurance program and under the Government National Mortgage Association
("GNMA"), Fannie Mae and Freddie Mac guaranty programs in high cost, heavily
unionized regions of the country such as New York, Boston and San Francisco.
In addition, Fannie Mae's market rate program is targeted to "mid-tier"
cities; rather than the older urban areas with higher rates of unionization
which have been the Trust's traditional focus.
Neither Fannie Mae nor Freddie Mac has a standardized, cost-effective
program to guaranty loans during their construction periods. This often
results in a situation in which the Trust receives one form of credit
enhancement (often a guaranty from a private lender) for an investment during
its construction phase, followed by a Fannie Mae guaranty of the permanent
loan investment. The use of such multiple forms of credit enhancement can
<PAGE>
<PAGE>
necessitate a cumbersome, unwieldy financing structure and result in
transaction costs, guaranty fees and other costs to the project developer
which are significantly in excess of those which would be required to obtain a
single form of credit enhancement over the life of the investment.
Investments which are insured by FHA or guaranteed by GNMA, Fannie Mae
and Freddie Mac have standardized terms and conditions, including prepayment
provisions, loan maturity, amortization requirements and the like. As a
result, the terms of a specific investment cannot be individually tailored to
meet the Trust's portfolio management objectives.
Finally, many state and local housing agencies which do not have either a
"top tier" or an "A" rating originate desirable investments which are secured
or collateralized by guaranties or other security provided by a lender or
other financial institution rated "A" or better. Under its current authority,
the Trust may not purchase such investments, even though the Trust could
purchase a similar investment if it were issued by a state or local housing
agency which has a "top tier" or "A" rating.
In light of these market conditions, the amendments will permit the Trust
to work with more state and local housing finance agencies nationwide, as well
as with private lenders, to develop additional and more flexible investment
opportunities for the Trust. These agencies and lenders are not bound by the
statutory cost limitations imposed upon FHA, Fannie Mae and Freddie Mac loans
and can make needed loans in highly unionized, older urban areas. In
addition, the bulk of mortgage loans for new construction and substantial
rehabilitation multifamily projects made today are made by private lenders.
The use of credit enhancement from "A" rated entities for construction and
permanent mortgage loans will also permit the Trust to use a single source of
credit enhancement for investments which now require different forms of credit
enhancement during the construction and permanent loan periods, reducing
transaction costs and guaranty fees and simplifying financing structures.
Working with state and local housing agencies and private sources of credit
enhancement, the Trust expects that investments made under this authority can
also be structured to provide the yields, maturities and loan terms that the
Trust needs to integrate its origination goals and portfolio management
objectives. At the same time, all of the investments under this authority
would be fully collateralized or secured by cash or by a letter of credit,
insurance or other form of guaranty from an entity rated "A" or higher.
HOW WILL THE AMENDMENTS AFFECT THE RISK PROFILE OF THE TRUST?
Because investments that would be made under this new authority would
have to be fully secured or collateralized with cash or a letter of credit,
insurance or other form of guaranty rated "A" or higher, management believes
that the new authority is consistent with the Trust's current authority to
make secured investments and that the amendments do not significantly alter
the risk profile of the Trust. As with other existing investment options,
there is no requirement that an investment of this type 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 project owner and
any credit enhancement provider. Unrated investments may also be less liquid
than rated investments.<PAGE>
<PAGE>
As indicated in the Trust's current prospectus, for investments which
involve credit enhancement, there is no assurance that the rating of the
credit enhancement provider 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. As described in
the Trust's current prospectus, 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 investment and would be likely to result in a
reduction in the value of the related obligation. The Trust is not required
to dispose of investments if the rating of the credit enhancement provider is
downgraded or withdrawn, except to the extent required by certain investment
restrictions which are described in the Trust's current prospectus.
Notwithstanding any of the above, such a downward revision or withdrawal of a
rating would not have any impact upon the project owner's obligation to repay
the construction and/or permanent loan to the Trust.
To the extent that any credit enhancement provider is unable or fails or
refuses to honor its obligations, investments in this category 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. Certain of these risks are
described in the Trust's current prospectus under the caption "INVESTMENT
OBJECTIVES, PRINCIPAL STRATEGIES, RELATED RISKS AND DEFAULT HISTORY."
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" APPROVAL OF
AMENDMENTS TO THE TRUST'S CHARTER TO MODIFY CERTAIN OF THE CRITERIA FOR STATE
AND LOCAL GOVERNMENT-RELATED PROJECTS AND PRIVATELY-COLLATERALIZED LOANS IN
WHICH THE TRUST IS AUTHORIZED TO INVEST.
DESIGNATION OF AUDITORS
PROPOSAL IV: TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS
The Participants will be requested to ratify the Board of Trustees'
selection of Arthur Andersen LLP as the independent public accountants for the
Trust for the current fiscal year. Representatives of Arthur Andersen LLP
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.
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE RATIFICATION
OF THE SELECTION OF ARTHUR ANDERSEN LLP AS THE TRUST'S INDEPENDENT PUBLIC
ACCOUNTANT FOR FISCAL 1999.
PROPOSALS FOR 2000 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 2000 Annual Meeting of
Participants (expected to be held in April 2000) must cause such proposal to
be received by the Trust at its principal office not later than December 17,
1999.
<PAGE>
<PAGE>
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
