SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
Krupp Government Income Trust
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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KRUPP GOVERNMENT INCOME TRUST
and
KRUPP GOVERNMENT INCOME TRUST II
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March 29, 2002
Dear Valued Shareholder:
You are cordially invited to attend the joint Annual Meeting of
Shareholders of Krupp Government Income Trust ("GIT") and Krupp Government
Income Trust II ("GIT II"), which will be held on Thursday, May 16, 2002 at
10:00 a.m., at the offices of each Trust, located at One Beacon Street,
Suite 1400, Boston, Massachusetts 02108.
The proxy statement which accompanies this letter describes the
matters that will be presented at the Annual Meeting: (1) the election of
Trustees of each of GIT and GIT II and (2) a proposal to amend Article XII
of the Declaration of Trust of each of GIT and GIT II. The proposed
amendments, if approved, would give the Board of Trustees of GIT and GIT II
the discretion (provided certain conditions were met) to waive provisions
in the applicable Declaration of Trust relating to "Excess Shares" (the
"Excess Shares Provision"). Excess Shares are those shares of GIT or GIT II
held by a person that would result in the person owning more than 9.8% of
the outstanding shares of GIT or GIT II.
The Excess Shares Provision was originally included in the
Declaration of Trust of GIT and GIT II in order to ensure that the Trusts
complied with certain technical requirements relating to qualification of
the Trusts as real estate investment trusts ("REITs") under the Internal
Revenue Code. However, the Excess Shares Provision, as currently drafted,
also has the effect of preventing a Trust or its shareholders from
participating in a transaction that might be beneficial to the
shareholders, even when such a transaction would not jeopardize the Trust's
status as a REIT.
The purpose of the proposal is to provide the Board of Trustees with
the flexibility to consider, on a case-by-case basis, whether waivers from
the Excess Shares Provision should be granted to persons in connection with
transactions that may be beneficial to the Trusts' shareholders. The
amendments would not remove the Excess Shares Provision from the
Declarations of Trust; they would only provide the Trustees with the
ability to consider whether a particular transaction should be made
available to the shareholders of a Trust, after having determined that the
transaction would not jeopardize the Trust's REIT status. Under the
proposed amendments, the Trustees of a Trust would only be permitted to
grant such a waiver after their receipt of a ruling from the Internal
Revenue Service or an opinion of counsel to the effect that such waiver
would not cause the Trust to lose its status as a REIT.
These amendments are consistent with current practice as reflected in
the governing documents of many other REITs.
The Board of Trustees of each of GIT and GIT II recommends that the
shareholders vote FOR the proposal to amend the Excess Shares Provision.
Whether or not you plan to attend the meeting in person, it is
important that your shares be voted at the meeting. THEREFORE, SHAREHOLDERS
ARE URGED TO FILL IN, DATE AND SIGN THE ENCLOSED PROXY CARD PROMPTLY AND
RETURN IT IN THE ENCLOSED ENVELOPE. Your vote is important, no matter how
many shares you may own.
Thank you for taking the time to review the enclosed materials.
Very truly yours,
/s/ Douglas Krupp
Douglas Krupp
President and Trustee of
Krupp Government Income Trust and
Krupp Government Income Trust II
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Krupp Government Income Trust
and
Krupp Government Income Trust II
One Beacon Street, Suite 1400
Boston, Massachusetts 02108
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2002
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TO THE SHAREHOLDERS OF KRUPP GOVERNMENT INCOME TRUST and
KRUPP GOVERNMENT INCOME TRUST II:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Krupp Government Income Trust ("GIT") and Krupp Government Income Trust II
("GIT II") (each a "Trust" and together the "Trusts") will be held together
on Thursday, May 16, 2002 at 10:00 a.m., at the offices of each of the
Trusts located at One Beacon Street, Suite 1400, Boston, Massachusetts
02108, for the purpose of considering and acting upon the following
matters, which are more fully described in the attached proxy statement:
As to GIT:
1. Election of Trustees for GIT.
2. A proposal to amend Article XII of GIT's Declaration of
Trust. The amendment would give GIT's Trustees the discretion
to waive GIT's prohibition on a person's ownership of more
than 9.8% of the outstanding shares of GIT, if certain
conditions are met relating to the effect of such waiver on
GIT's status as a real estate investment trust (a "REIT").
As to GIT II:
1. Election of Trustees for GIT II.
2. A proposal to amend Article XII of GIT II's Declaration of
Trust. The amendment would give GIT II's Trustees the
discretion to waive GIT II's prohibition on a person's
ownership of more than 9.8% of the outstanding shares of
GIT II, if certain conditions are met relating to the effect
of such waiver on GIT II's status as a REIT.
As to both Trusts:
3. Such other business as may properly be brought before the
meeting. The Board of Trustees of each of the Trusts at
present
knows of no other formal business to be brought before the
meeting.
Following the official business, there will be a review of the
results of operations for 2001, and management will review each Trust's
investments and discuss the future outlook of GIT and GIT II. The Trustees
and the Advisor of each of the Trusts will be available for questions and
discussion after the meeting.
The Board of Trustees of each of GIT and GIT II has fixed March 18,
2002 as the record date to determine the shareholders who will be entitled
to vote at the applicable Trust's Annual Meeting and receive notice of such
meeting or any adjournment or adjournments thereof. A list of such
shareholders will be open to the examination of such shareholders for any
purpose germane to the Annual Meeting at the Annual Meeting and during
ordinary business hours for a period of ten days prior to the Annual
Meeting at the office of each of GIT and GIT II at One Beacon Street, Suite
1400, Boston, Massachusetts 02108.
/s/ Scott D. Spelfogel
Scott D. Spelfogel
Clerk of Krupp Government Income Trust
and Krupp Government Income Trust II
March 29, 2002
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PLEASE FILL IN, DATE AND SIGN THE ACCOMPANYING PROXY, WHICH IS SOLICITED BY
THE BOARD OF TRUSTEES OF THE APPLICABLE TRUST, AND RETURN IT PROMPTLY IN
THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY NEVERTHELESS VOTE IN PERSON IF
YOU ATTEND THE MEETING.
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PROXY STATEMENT DATED MARCH 29, 2002
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This Proxy Statement is submitted to the shareholders of Krupp
Government Income Trust ("GIT") and Krupp Government Income Trust II ("GIT
II") (each a "Trust" and together the "Trusts") for solicitation of the
accompanying proxy for use at the Annual Meeting (the "Meeting") of the
shareholders of each of GIT and GIT II to be held together for the purposes
set forth in this Proxy Statement, at 10:00 a.m. on Thursday, May 16, 2002,
at the offices of each Trust, located at One Beacon Street, Suite 1400,
Boston, Massachusetts 02108, or any adjournment or adjournments thereof.
Each of the Trusts has its principal executive offices at One Beacon
Street, Suite 1400, Boston, Massachusetts 02108. This Proxy Statement,
together with an Annual Report to Shareholders, will be mailed to
shareholders on or about March 29, 2002.
REVOCABILITY OF PROXY
The proxy is revocable by the shareholders at any time before it is
voted by filing a later dated proxy, by filing a written notice of
revocation with Scott D. Spelfogel, Clerk of the applicable Trust, or by
voting at the Meeting. Unless so revoked, properly executed proxies will be
voted, and where choices are indicated on the proxy, they will be voted as
specified, and if no choices are indicated, the proxies will be voted in
favor of the proposals on the proxy.
PERSONS MAKING THE SOLICITATION
The solicitations are made by the Board of Trustees of each Trust.
SOLICITATION
Solicitation of proxies is to be made by the use of the mails. In
addition, representatives of each Trust may, under instructions from the
applicable Board of Trustees and acting only for such Trust, solicit such
proxies for the Board of Trustees of the applicable Trust by means of
telephone or personal calls. In addition, the Trusts have retained
Georgeson Shareholder Communications, Inc. to solicit proxies by means of
telephone calls. Each Trust will pay Georgeson Shareholder Communications,
Inc. a fee of $2,000, plus its out of pocket expenses in connection with
the solicitation of proxies. Each Trust will also pay all other expenses in
connection with the solicitation of these proxies.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record of the applicable Trust at the close of
business on March 18, 2002 will be entitled to vote at the Meeting. On that
date, there were 15,053,135 shares of beneficial interest outstanding for
GIT and 18,371,477 shares of beneficial interest outstanding for GIT II.
Each share is entitled to one vote. The shareholders do not have cumulative
voting rights. As to each Trust, the holders of a majority of the
outstanding shares of such Trust, represented in person or by proxy,
constitutes a quorum at the Meeting. If less than a quorum is present at
the Meeting in
person or by proxy for either Trust, the Trust with a quorum may proceed
and a majority in interest of the shareholders of the other Trust present
in person or by proxy may adjourn the Meeting as to such other Trust. Both
Trusts' Declaration of Trust require that Trustees be elected by a
plurality of votes. Both Trusts' Declaration of Trust require that Proposal
No. 2 (Amendment of Declaration of Trust) be approved by the holders of a
majority of all outstanding shares. For purposes of Proposal No. 1
(Election of Directors), proxy cards marked to indicate an abstention and
broker non-votes (proxy cards returned unmarked as to a proposal by
brokers) will be counted in determining the presence of a quorum but will
have no effect on the election. For purposes of Proposal No. 2 (Amendment
of Declaration of Trust), proxy cards marked to indicate an abstention and
broker non-votes will be counted in determining a quorum, and will be
considered to be "no" votes. There are no rights of appraisal or similar
rights of dissenters with respect to either Proposal No. 1 or Proposal No. 2.
There are no known beneficial owners of more than 5% of the shares of
beneficial interest in either of the Trusts.
The following table provides a summary of the beneficial ownership of
shares of GIT, as of March 18, 2002, by (i) the Trustees of GIT, (ii) the
Chief Executive Officer of GIT and (iii) all current Trustees and executive
officers as a group:
(1) (2) (3) (4)
CLASS OF NAME OF AMOUNT AND NATURE PERCENT
SECURITIES BENEFICIAL OWNER OF BENEFICIAL INTEREST OF CLASS
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Shares Douglas Krupp 10,000 Shares(1) *
Shares Stephen Puleo None *
Shares Charles N. Goldberg None *
Shares J. Paul Finnegan None *
Shares All Trustees and Executive 10,000 Shares(1)
Officers as a group (11 people)
(1) Mr. Krupp is a beneficial owner of the 10,000 shares held by
Berkshire Mortgage Advisors Limited Partnership, the Advisor to GIT,
by virtue of being a director of Berkshire Funding Corporation, the
general partner of Berkshire Mortgage Advisors Limited Partnership.
* The amount owned does not exceed one percent of the shares of
beneficial interest of GIT outstanding as of March 18, 2002.
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The following table provides a summary of the beneficial ownership of
shares of GIT II, as of March 18, 2002, by (i) the Trustees of GIT II, (ii)
the Chief Executive Officer of GIT II and (iii) all current Trustees and
executive officers as a group:
(1) (2) (3) (4)
CLASS OF NAME OF AMOUNT AND NATURE PERCENT
SECURITIES BENEFICIAL OWNER OF BENEFICIAL INTEREST OF CLASS
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Shares Douglas Krupp 10,000 Shares(1) *
Shares Stephen Puleo None *
Shares Charles N. Goldberg None *
Shares J. Paul Finnegan None *
Shares All Trustees and Executive 10,000 Shares(1)
Officers as a group (11 people)
(1) Mr. Krupp is a beneficial owner of the 10,000 shares held by
Berkshire Mortgage Advisors Limited Partnership, the Advisor to GIT
II by virtue of being a director of Berkshire Funding Corporation,
the general partner of Berkshire Mortgage Advisors Limited
Partnership.
* The amount owned does not exceed one percent of the shares of
beneficial interest of GIT II outstanding as of March 18, 2002.
No trustee, officer or affiliate of either of the Trusts is a party
adverse to the applicable Trust or has a material interest adverse to GIT
or GIT II in any material proceedings.
A list of shareholders of each Trust as of the record date will be
open to the examination of such shareholders for any purpose germane to the
Meeting at the Meeting and during ordinary business hours for a period of
ten days prior to the Meeting at One Beacon Street, Suite 1400, Boston,
Massachusetts 02108.
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DIRECTORS, EXECUTIVE OFFICERS AND PROPOSALS
ROPOSAL NO. 1
ELECTION OF TRUSTEES
Pursuant to each Trust's Declaration of Trust, as amended, the
Trustees are elected annually. The Trusts currently each have four
Trustees, all of whom have been nominated for re-election by the Board of
Trustees of the applicable Trust. The election will be decided by a
plurality vote.
The following table sets forth the names and ages of each Trustee of
each Trust and of the management nominees for election as a Trustee, their
principal offices with the respective Trust, their term of office as a
Trustee for the respective Trust and any periods during which they have
served as such:
Name and Age Principal No. of Principal No. of Years
Offices Years as Offices as GIT II
with GIT GIT Trustee with GIT II Trustee
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<s> <c> <c> <c> <c>
Douglas Krupp, 55 Chairman of the 6 Chairman of the 6
Board, President Board, President
and Trustee and Trustee
Charles N. Goldberg, 60 Trustee* 12 Trustee* 10
Stephen Puleo, 67 Trustee* 1 Trustee* 1
J. Paul Finnegan, 77 Trustee* 12 Trustee* 10
* Independent Trustees
Douglas Krupp co-founded and serves as Co-Chairman and Chief
Executive Officer of The Berkshire Group, an integrated real estate
financial services firm engaged in real estate acquisitions, property
management, investment sponsorship, venture capital investing, mortgage
banking, financial management and ownership of two operating companies
through private equity investments. Mr. Krupp has held the position of Co-
Chairman since The Berkshire Group was established as The Krupp Companies
in 1969 and he has served as the Chief Executive Officer since 1992. He is
a graduate of Bryant College where he received an honorary Doctor of
Science in Business Administration in 1989.
Charles N. Goldberg is currently a partner of Oppel, Goldberg &
Saenz, LLC. Prior to that he was of counsel to the law firm of Broocks,
Baker & Lange, L.L.P., a position he held from December of 1997 to May 1,
2000. Prior to joining Broocks, Baker & Lange, L.L.P., Mr. Goldberg was a
partner in the law firm of Hirsch & Westheimer from March of 1996 to
December of 1997. Prior to Hirsch & Westheimer, he was the Managing Partner
of Goldberg Brown, Attorneys at Law from 1980 to March of 1996. He received
a B.B.A. degree and a J.D. degree from the University of Texas. He is a
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member of the State Bar of Texas and is admitted to practice before the
U.S. Court of Appeals, Fifth Circuit and U.S. District Court, Southern
District of Texas.
Stephen Puleo is currently engaged in business as a consultant and
director. He retired as a director of Coopers & Lybrand, an international
accounting and consulting firm where he worked from 1995-1997 primarily
servicing real estate industry clients. From 1993-1994, Mr. Puleo was a tax
director for Deloitte & Touche. From 1984-1993, Mr. Puleo held the
positions of Executive Vice President and Chief Financial Officer of a
predecessor to The Berkshire Group. Prior to that, Mr. Puleo was the
Chairman of the National Real Estate Industry Group of Coopers & Lybrand
where he provided various real estate services and was a senior tax partner
in charge of the Northeast Region. He is a graduate of McNeese State
University and attended the Executive Development Program at the Tuck
School of Business at Dartmouth College. He is a Certified Public
Accountant and currently serves as director of Simpson Housing Limited
Partnership of Denver, Colorado.
J. Paul Finnegan retired as a partner of Coopers & Lybrand in 1987.
Since then, he has been engaged in business as a consultant, a director and
arbitrator. Mr. Finnegan holds a B.A. degree from Harvard College, a J.D.
degree from Boston College Law School and an ASA degree from Bentley
College. Mr. Finnegan currently serves as a director at Scituate Federal
Savings Bank and has so served since 1991. Mr. Finnegan is a Certified
Public Accountant and an attorney.
The Board of Directors for GIT and GIT II recommends a vote FOR
election of the four nominees.
PROPOSAL NO. 2
AMENDMENT OF ARTICLE XII OF DECLARATION
OF TRUST OF GIT AND GIT II
WITH RESPECT TO EXCESS SHARES
Proposal No. 2, if adopted, would modify the "Excess Shares"
provisions contained in Article XII of each Trust's Declaration of Trust
("Declaration of Trust") to permit the Trustees of each Trust to waive the
Declaration of Trust's prohibition on a person's ownership of more than
9.8% of the outstanding shares of the Trust, upon the satisfaction of
certain conditions described below. Under the proposed amendment, the
Trustees may impose such additional conditions on the granting of such a
waiver as they deem appropriate.
Background. In order for the Trusts to qualify (and continue to
qualify) as real estate investment trusts ("REITs") under the Internal
Revenue Code of 1986, as amended (the "Code"), they must each comply with
certain technical requirements of the Code, including a requirement that
not more than 50% of each Trust's outstanding securities be owned by five
or fewer individuals (as defined in the Code to include certain entities)
during the last half of any calendar year. In order to ensure that the
Trusts comply with this requirement, the Declaration of Trust of each Trust
prohibits any person from
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owning, directly or indirectly, more than 9.8% of the outstanding shares of
such Trust (the Declaration of Trust of each Trust defines shares that, if
transferred to a person would result in that person owning more than 9.8%
of the outstanding shares of the Trust, as "Excess Shares"). The Trustees
may also refuse to permit any transfer of shares that would, in their
opinion, jeopardize a Trust's status as a REIT.
Under each Trust's Declaration of Trust, Excess Shares are not
entitled to any voting rights, are not deemed to be outstanding for the
purpose of determining a quorum at a meeting of shareholders, are not
entitled to any dividends, may be acquired by the applicable Trust at the
lesser of the price paid for the Excess Shares or their fair market value,
and are otherwise subject to material restrictions as set forth in the
Declaration of Trust.
In addition to protecting a Trust's status as a REIT, the Excess
Shares provisions may have the effect of discouraging changes in control of
a Trust, and may limit the opportunity of a shareholder of the Trust to
receive a premium for his or her shares in the event someone desires to
make purchases to assemble a block of shares of the Trust.
Purpose of Proposal No. 2. The purpose of Proposal No. 2 is to
provide the Trustees with the flexibility to consider, on a case-by-case
basis, whether to grant waivers from the Excess Shares provisions in order
to permit a person to acquire shares of the Trust in situations that would
not jeopardize the Trust's REIT status. Such flexibility could facilitate
transactions that may be beneficial to other Trust shareholders, by
mitigating some of the negative effects of the current Excess Shares
provisions described above.
In particular, Proposal No. 2, if adopted, would modify the Excess
Shares provisions in each Trust's Declaration of Trust to allow the
Trustees to exempt a person desiring to acquire more than 9.8% of the
outstanding shares of a Trust from such Excess Shares provisions if the
Trust receives a ruling from the Internal Revenue Service or an opinion of
counsel to the effect that such exemption will not cause the Trust to lose
its status as a REIT. The full text of the proposed amendment to the
Declaration of Trust of each Trust is attached hereto as Exhibit "C" and
incorporated herein by reference. The full text of the current Excess
Shares provisions of GIT and GIT II is attached hereto as Exhibits "A" and
"B", respectively, and incorporated herein by reference. The Trustees
believe that the flexibility afforded by the proposed amendment to each
Declaration of Trust, which is consistent with current practice as
reflected in the governing documents of many REITs, will provide adequate
protection of each Trust's continuing status as a REIT while at the same
time facilitate the consideration by the Trustees and shareholders of
potentially beneficial transactions such as the possible transaction
described below.
Potential Transaction. In February 2002, the Board of Trustees of
each of the Trusts was advised by affiliates of the Advisor that such
affiliates were considering proposing a transaction that would be designed
to provide the shareholders of the Trusts with the opportunity to
participate in a newly formed REIT. As described by the Advisor affiliates,
the potential transaction would provide the shareholders with the
opportunity to receive rates of return and liquidity that would make such
an investment attractive to the
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Trust shareholders. In order to participate in the new REIT, shareholders
of the Trusts would be given the opportunity, on a voluntary basis, to
exchange their shares in the Trusts for shares of the newly formed REIT. As
described by the Advisor affiliates, shareholders of the Trusts who chose
not to participate in the new investment opportunity would retain their
current investment. The Advisor affiliates have informed the Board of
Trustees that they have not yet determined whether or not to propose such a
transaction, but that the current Excess Shares provisions would prevent
them from doing so.
The Advisor affiliates have informed the Board of Trustees of each
Trust that should the Trust's shareholders vote to adopt this Proposal No.
2, and should the Advisor affiliates decide to propose a transaction, it is
the Advisor affiliates' intention to then request that each Board of
Trustees waive the applicable Excess Shares provisions in connection with
such transaction. The respective Boards of Trustees of each Trust have
expressed no opinion and have not made any commitment as to whether or not
they would waive the Excess Shares provisions in connection with such a
transaction, and have advised the Advisor affiliates that they would
consider any request consistent with the discretion vested in them under
the proposed amendment to each Declaration of Trust, such factors as they
deem appropriate, and the need to protect each Trust's status as a REIT.
Douglas Krupp, who is currently an executive officer and Trustee of
both of the Trusts and is nominated for reelection as Trustee, is a
director and executive officer of the Advisor affiliates referred to above.
George Krupp, is currently deemed an executive officer of both Trusts and
is a director and an executive officer of the Advisor affiliates referred
to above. Scott D. Spelfogel and Mary Beth Bloom are currently executive
officers of both of the Trusts and executive officers of the Advisor
affiliates referred to above.
The Board of Trustees for each of GIT and GIT II recommends a vote
FOR Proposal No. 2. If the shareholders of either GIT or GIT II do not
approve the proposed amendment to the Declaration of Trust, the amendment
will not go into effect with respect to such Trust and the Excess Shares
provisions of such Declaration of Trust will remain unchanged.
EXECUTIVE OFFICERS
Douglas Krupp, age 55, is President, Chairman of the Board and a Trustee of
both GIT and GIT II. He was elected May 2, 1996 as Chairman of the Board
and Trustee to both GIT and GIT II and he was appointed President of both
GIT and GIT II on October 8, 1997.
Robert Barrows, age 44, is Treasurer of both GIT and GIT II. He was elected
August 3, 1995 to both GIT and GIT II.
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Scott D. Spelfogel, age 41, is Clerk of both GIT and GIT II. He was elected
Assistant Clerk July 26, 1990 to GIT and November 7, 1991 to GIT II and he
was elected Clerk on May 2, 1996 to both GIT and GIT II.
Mary Beth Bloom, age 28, is Assistant Clerk of both GIT and GIT II. She was
elected November 9, 2000 to both GIT and GIT II.
Information on Mr. Krupp appears above under the heading "Directors,
Executive Officers and Proposals - Proposal No. 1 - Election of Trustees."
Robert A. Barrows is the Treasurer of the Trusts and is Senior Vice
President and Chief Financial Officer of Berkshire Mortgage Finance. Mr.
Barrows has held several positions within The Berkshire Group since joining
the company in 1983 and is currently responsible for the accounting,
financial reporting and treasury functions for Berkshire Mortgage Finance.
Prior to joining The Berkshire Group, he was an audit supervisor for
Coopers & Lybrand L.L.P. in Boston, He received a B.S. degree from Boston
College and is a Certified Public Accountant.
Scott D. Spelfogel is the Clerk of the Trusts and is Senior Vice
President and General Counsel to The Berkshire Group. Prior to 1997, he
served as Vice President and Assistant General Counsel. Before joining the
firm in November 1988, he was a litigator in private practice in Boston. He
received a Bachelor of Science degree in Business Administration from
Boston University, a Juris Doctor Degree from Syracuse University's College
of Law, and a Master of Laws degree in Taxation from Boston University Law
School. He is admitted to practice law in Massachusetts and New York, is a
member of the American, Boston, Massachusetts and New York State bar
associations and is a licensed real estate broker in Massachusetts.
Mary Beth Bloom is the Assistant Clerk of the Trusts and is Assistant
General Counsel to The Berkshire Group. Prior to joining the company in
August, 2000, she was an attorney with John Hancock Financial Services. She
received a B.A. from the College of the Holy Cross in 1995 and a J.D. from
New England School of Law in 1998. She is admitted to practice law in
Massachusetts and New York and is a member of the American, Massachusetts
and New York Bar Associations.
In addition, the following are deemed Executive Officers of the
Trusts:
George Krupp (age 57) is the Co-Founder and Co-Chairman of The
Berkshire Group, an integrated real estate financial services firm engaged
in real estate acquisitions, property management, investment sponsorship,
venture capital investing, mortgage banking, financial management and
ownership of two operating companies through private equity investments.
Mr. Krupp has held the position of Co-Chairman since The Berkshire Group
was established as The Krupp Companies in 1969. Mr. Krupp has been an
instructor of history at the New Jewish High School in Waltham,
Massachusetts since September of 1997. Mr. Krupp attended the University of
Pennsylvania and Harvard University and holds a Master's Degree in History
from Brown University. He also
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serves on the boards of directors of Boston Symphony and Combined Jewish
Philanthropies.
Peter F. Donovan (age 48) is Chief Executive Officer of Berkshire
Mortgage Finance which position he has held since January of 1998 and in
this capacity, he oversees the strategic growth plans of this mortgage
banking firm. Berkshire Mortgage Finance is the 10th largest mortgage
banking firm in the United States based on servicing and asset management
of a $14.1 billion loan portfolio. Previously he served as President of
Berkshire Mortgage Finance from January of 1993 to January of 1998 and in
that capacity he directed the production, underwriting, servicing and asset
management activities of the firm. Prior to that, he was Senior Vice
President of Berkshire Mortgage Finance and was responsible for all
participating mortgage originations. Before joining the firm in 1984, he
was Second Vice President, Real Estate Finance for Continental Illinois
National Bank & Trust, where he managed a $300 million construction loan
portfolio of commercial properties. Mr. Donovan received a B.A. from
Trinity College and an M.B.A. degree from Northwestern University. He is
also currently a member of the Advisory Council for Fannie Mae.
Ronald Halpern (age 60) is President and Chief Operating Officer of
Berkshire Mortgage Finance. He has served in these positions since January
of 1998 and as such, he is responsible for the overall operations of the
Company. Prior to January of 1998, he was Executive Vice President,
managing the underwriting, closing, portfolio management and servicing
departments for Berkshire Mortgage Finance. Before joining the firm in
1987, he held senior management positions with the Department of Housing
and Urban Development in Washington D.C. and several HUD regional offices.
Mr. Halpern has over 30 years of experience in real estate finance which
includes his experience as prior Chairman of the MBA Multifamily Housing
Committee. He holds a B.A. degree from the University of the City of New
York and J.D. degree from Brooklyn Law School.
Carol J.C. Mills (age 52) is Senior Vice President for Loan
Management of Berkshire Mortgage Finance and in this capacity, she is
responsible for the loan servicing and asset management functions of the
Boston office of Berkshire Mortgage Finance. She manages the estimated
$14.1 billion portfolio of loans. Ms. Mills joined Berkshire in December
1997 as Vice President and was promoted to Senior Vice President in January
1999. From January 1989 through November 1997, Ms. Mills was Vice President
of First Winthrop Corporation and Winthrop Financial Associates, in
Cambridge, MA. Ms. Mills earned a B.A. degree from Mount Holyoke College
and a Master of Architecture degree from Harvard University. Ms. Mills is a
member of the Real Estate Finance Association, New England Women in Real
Estate and the Mortgage Bankers Association.
Each officer of each of the Trusts is elected annually by the
applicable Board of Trustees for the ensuing year or until a successor is
elected and qualified. George Krupp and Douglas Krupp are brothers;
otherwise there are no family relationships amongst the Officers and
Trustees of either Trust.
Douglas Krupp, by virtue of indirect ownership interests in the
Advisor, is deemed to have direct or indirect material interests in amounts
paid to the Advisor by
9
each Trust. GIT and GIT II also individually reimburse the Advisor and
affiliates for certain expenses incurred by them in connection with the
operation of the individual Trusts.
Under the terms of the Advisory Service Agreements between GIT and
the Advisor and GIT II and the Advisor, the Advisor and its affiliates are
entitled to an Asset Management Fee equal to .75% per annum (which
represented $950,966 and $1,309,430 for GIT and GIT II respectively in
2001) of the value of the respective Trust's actual and committed mortgage
assets, payable quarterly.
GIT also reimburses affiliates of the Advisor for certain costs
incurred in connection with maintaining the books and records of GIT, the
preparation and mailing of financial reports, tax information and other
communications to investors and legal fees and expenses (which totaled
$255,142 in 2001).
During 2001, GIT received interest collections on additional loans
with affiliates of the Advisor of the Trust of $155,738. In addition, GIT
received $3,431,133 in 2001 related to participating interest income.
GIT II also reimburses affiliates of the Advisor for certain costs
incurred in connection with maintaining the books and records of the Trust,
the preparation and mailing of financial reports, tax information and other
communications to investors and legal fees and expenses (which totaled
$273,830 in 2001).
During 2001, GIT II received interest collections on additional loans
with affiliates of the Advisor of the Trust in the amount of $398,549. In
addition, GIT II received $8,780,579 in 2001 related to participating
interest income.
Neither Trust has an Audit Committee, Compensation Committee or
Nominating Committee, nor is there any committee performing similar
functions.
The Board of Trustees of each Trust have regularly scheduled
quarterly meetings and special meetings as required. During 2001, the Board
of Trustees of GIT met 4 times and acted once by unanimous written consent
and the Board of Trustees of GIT II met 4 times and acted once by unanimous
written consent. No Trustee attended fewer than 75% of the total number of
meetings of the Board of Trustees of the individual Trusts.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
During 2001 all of the Executive Officers of GIT and GIT II were
employees of affiliates of the Advisor, which has been retained to manage
the respective Trust's day-to-day affairs, subject to the applicable
Board's control and supervision, for the fees and expense reimbursements
described above which totaled $1,206,108 and $1,583,260 for GIT and GIT II
respectively. Employees of affiliates of the Advisor do not directly
receive any remuneration from either of the Trusts, including options,
stock appreciation rights, or rights under any long-term incentive plan.
Such employees are compensated for their services relating to GIT and GIT
II by the Advisor. No options or
10
stock appreciation rights were exercised in 2001 or outstanding at the end
of the fiscal year.
Independent Trustees of each Trust are compensated at the rate of
$25,000 per year for their services and receive reimbursement for their
travel expenses. There were no other arrangements for either of the Trusts
to compensate any Trustee during 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neither GIT nor GIT II had a Compensation Committee in 2001 and
neither currently has such a committee, as no Executive Officers of GIT or
GIT II received in 2001 or currently receive any remuneration from either
of the Trusts. Neither of the Boards of Trustees of either of the Trusts
conducted any deliberations concerning Executive Officer compensation in
2001.
Since no Executive Officers of GIT or GIT II receive any remuneration
from the respective Trust, the Boards of Trustees of both Trusts have not
adopted any executive compensation policies, such as regarding the
relationship of the applicable Trust's performance to executive
compensation.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP has served as independent auditors to each
Trust since their respective formations. The Board of Trustees of each
Trust has approved the selection of PricewaterhouseCoopers LLP as auditors
for 2002.
A representative of PricewaterhouseCoopers LLP is expected to be
present at the Annual Meeting to respond to appropriate questions and to
make a statement should he or she desire to do so.
The following table sets forth the aggregate fees billed for
professional services rendered for the audit of each of GIT and GIT II's
annual financial statements for the year 2001, the reviews of the financial
statements included in GIT and GIT II's Forms 10-Q for the year 2001, and
any financial information systems design and implementation fees or any
other fees.
GIT
- ----------------------------------------------------------------------------
Audit Fees $27,445
- ----------------------------------------------------------------------------
Financial Information Systems Design and
Implementation Fees -0-
- ----------------------------------------------------------------------------
All Other Fees $ 3,195
- ----------------------------------------------------------------------------
GIT II
- ----------------------------------------------------------------------------
Audit Fees $27,445
Financial Information Systems Design and
Implementation Fees -0-
- ----------------------------------------------------------------------------
All Other Fees $ 3,195
- ----------------------------------------------------------------------------
11
The Board of Directors did not consider whether the provision of
financial information systems design and implementation services is
compatible with the principal accountant's independence as no such non-
audit services were provided in 2001 or anticipated for 2002.
The Board of Directors reviewed the other non-audit services provided
by the principal accountants and determined that such services were
compatible with the principal accountant's independence.
Neither Trust's Declaration of Trust requires that shareholders
approve the appointment of independent auditors.
OTHER MATTERS
The Board of Trustees of each Trust is not aware of any other formal
matters to be presented at the meeting. Pursuant to the Declarations of
Trust of GIT and GIT II, no business other than that stated in this notice
shall be transacted at the meeting without the unanimous consent of all the
shareholders entitled to vote at the meeting.
By order of the Board
of Trustees of Krupp Government Income Trust
and Krupp Government Income Trust II
/s/ Scott D. Spelfogel
Scott D. Spelfogel
Clerk of Krupp Government Income
Trust and Krupp Government Income
Trust II
SHAREHOLDERS' PROPOSALS
If any shareholder wishes to submit a proposal to be voted on at the
2003 Annual Meeting of Shareholders, the shareholder must submit the
proposal to the applicable Trust on or before November 29, 2002.
IMPORTANT
PLEASE FILL IN, DATE AND SIGN THE ACCOMPANYING PROXY, WHICH IS
SOLICITED BY THE BOARD OF TRUSTEES OF THE APPLICABLE TRUST, AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY NEVERTHELESS VOTE
IN PERSON IF YOU ATTEND THE MEETING.
12
Exhibit "A"
Article XII of the Declaration of Trust of GIT
----------------------------------------------
ARTICLE XII - EXCESS SHARES
---------------------------
SECTION 1 EXCESS SHARES. (A) If, at any time after July, 1, 1991, a
Person (as defined in (C) below) would become an Owner (as defined in (C)
below) of Shares of the Trust in excess of 9.8% of the outstanding Shares
(the "Limit"), but less than 80% of the outstanding Shares, those Shares of
the Trust intended to be acquired by such Person which are in excess of the
Limit, including for this purpose Shares deemed Owned through attribution,
shall constitute "Excess Shares" at such time as all events have occurred
to effect such transfer in accordance with any agreement between the
transferor and such Person. Excess Shares shall have the following
characteristics:
(1) Notwithstanding that the Person to whom the Excess Shares
were originally intended to be transferred may be the record owner of
the Excess Shares, Excess Shares shall be transferred by operation of
law to the Trust as trustee of a trust for the exclusive benefit of
the Person(s) to whom the Excess Shares can be transferred without
constituting Excess Shares if Owned by such Person(s);
(2) Excess Shares shall not be entitled to any voting rights;
(3) Excess Shares shall not be deemed to be outstanding for
the purpose of determining a quorum at the annual meeting or any
special meeting of Shareholders;
(4) Excess Shares shall not be entitled to any dividends
within the meaning of Code Section 316; however, any other
distributions with respect to Excess Shares which are payable in
respect of Shares shall be accumulated by the Trust and deposited in
a savings account in a Massachusetts bank (which may be the Trust's
dividend disbursing agent) for the benefit of, and be payable to, the
holder or holders of such Shares at such time as such Excess Shares
shall cease to be Excess Shares;
(5) Although not entitled to voting and dividend rights,
Excess Shares shall continue to be issued and outstanding units of
beneficial interest in the Trust;
(6) To accommodate transfers of Excess Shares to a Person or
Persons whose Ownership of such Shares would not cause such Shares to
be Excess Shares, the Person to whom the Excess Shares were
originally intended to be transferred may transfer an interest in the
trust in which the Excess Shares are held to a transferee at a price
not in excess of the price paid for the Excess Shares represented by
the transferred interest, and if an interest in such trust is so
transferred, the Trust will distribute the Excess Shares represented
by the transferred interest to the transferee, provided that the
Excess Shares would not be Excess Shares in the hands of the
transferee;
(7) Excess Shares shall be deemed to have been offered for
sale to the Trust or its designee, for the lesser of the price paid
for the Excess Shares by the Person
A-1
to whom the Excess Shares were originally intended to be transferred
or at their fair market value. The Trust shall have the right to
accept such offer for a period of ninety (90) days from the date of:
(i) the transfer of Shares which made the Shares Excess Shares if the
Trust has actual knowledge that such transfer creates Excess Shares
as a result of receipt of the notice required by (B) below; or (ii)
if such transfer is not actually known to the Trust, the
determination by the Trustees in good faith by resolution duly
adopted that a transfer creating Excess Shares has taken place (the
"Offer Period"). Fair market value shall be determined as of the date
of (i) or (ii) above, and shall be the closing price on the national
stock exchange on which the Shares are listed; but if the Shares are
not listed on a national stock exchange, then the closing bid price
on the "pink sheets" of the National Quotation Bureau Incorporated or
on the NASDAQ National Quotation System (as applicable); but if the
Shares are not quoted on such markets, then the price as determined
in good faith by the Trustees;
(8) If a permitted transferee acquires the Excess Shares they
shall cease to be Excess Shares as of the date of the acquisition. If
the Trust redeems Excess Shares, they shall cease to be Excess Shares
and to be issued and outstanding Shares as of the date of the
acquisition. The permitted transferee or the Trust, as applicable,
shall be entitled to the amounts deposited in accordance with (4)
above.
The Trust may accept the deemed offer for Excess Shares by
mailing by registered mail (return receipt requested) a written
notice to the record holder of Excess Shares at the address appearing
on the Trust's stock transfer records stating the Trust's acceptance
of the offer within the Offer Period. Payment for Excess Shares shall
be made by the Trust by check, subject to collection, within 30 days
after acknowledgement of receipt of the above-described notice. After
notice has been sent, Excess Shares shall have no further rights
beyond the right to receive payment pursuant to this Paragraph.
(B) Each Person who would become the Owner of Excess Shares is
obliged upon entering into a binding agreement to acquire the Excess Shares
immediately to give or cause to be given written notice thereof to the
Trust and to give to the Trust such other information as the Trust may
reasonably require of such Person: (1) with respect to identifying all
Owners and amount of Ownership of its outstanding Shares held directly or
by attribution by such Person; and (2) such other information as may be
necessary to determine the Trust's status under the Code. If any Person
knowingly fails to give the notice provided above and the Trust loses its
REIT qualification under the Code or becomes a personal holding company,
such Person shall indemnify the Trust for the full amount of any damages
and expenses (including increased taxes, attorneys' fees and administrative
costs) resulting from the Trust's loss of its REIT qualification.
(C) For the purpose of determination to be made under this Article:
(a) A Person shall be considered to "Own," be the "Owner" or
have "Ownership" of Shares if he is treated as owner of such Shares
for purposes of part II, subchapter M of the Code, including the
attribution of ownership provisions of Section 542 and 544 of the
Code, or if such Person would have beneficial ownership of
A-2
such Shares as defined under Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "Act") (all as in effect on the date of
the formation of the Trust); and
(b) "Person" includes an individual, corporation, partnership,
estate, trust, association, joint stock company or other entity and
also includes a group as that term is used for purposes of Section
13(d)(3) of the Act (as in effect on the date of the formation of the
Trust).
(c) In the case of an ambiguity in the application of any of
the provisions of (a) and (b) above, the Trustees shall have the
power to determine for the purposes of this Article XII on the basis
of information known to them: (i) whether any person Owns Shares;
(ii) whether any two or more individuals, corporations, partnerships,
estates, trusts, associations or joint stock companies or other
entities constitute a Person; and (iii) whether any of the entities
of (ii) above constitute a group.
(D) If any provision of this Article XII or any application of any
such provision is determined to be invalid by any federal or state court
having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected.
(E) Nothing contained in this Article XII shall limit the authority
of the Trustees to take such other action as they deem necessary or
advisable to protect the Trust and the interests of its Shareholders by
preservation of the Trust's status as a REIT under the Code.
(F) All references in this Declaration of Trust to the vote of
Shares shall be deemed to include all Shares other than Excess Shares.
A-3
Exhibit "B"
Article XII of the Declaration of Trust of GIT II
-------------------------------------------------
ARTICLE XII - EXCESS SHARES
---------------------------
SECTION 1 EXCESS SHARES. (A) If, at any time after July 1, 1992, a
Person (as defined in (C) below) would become an Owner (as defined in (C)
below) of Shares of the Trust in excess of 9.8% of the outstanding Shares
(the "Limit"), but less than 80% of the outstanding Shares, those Shares of
the Trust intended to be acquired by such Person which are in excess of the
Limit, including for this purpose Shares deemed Owned through attribution,
shall constitute "Excess Shares" at such time as all events have occurred
to effect such transfer in accordance with any agreement between the
transferor and such Person. Excess Shares shall have the following
characteristics:
(1) Notwithstanding that the Person to whom the Excess Shares
were originally intended to be transferred may be the record owner of
the Excess Shares, Excess Shares shall be transferred by operation of
law to the Trust to be held in escrow until such time as the Excess
Shares are transferred to such Person(s) to whom the Excess Shares
can be transferred without constituting Excess Shares if Owned by
such Person(s);
(2) Excess Shares shall not be entitled to any voting rights;
(3) Excess Shares shall not be deemed to be outstanding for
the purpose of determining a quorum at the annual meeting or any
special meeting of Shareholders;
(4) Excess Shares shall not be entitled to any dividends
within the meaning of Code Section 316; however, any other
distributions with respect to Excess Shares which are payable in
respect of Shares shall be accumulated by the Trust and deposited in
a savings account in a Massachusetts bank (which may be the Trust's
dividend disbursing agent) for the benefit of, and be payable to, the
holder or holders of such Shares at such time as such Excess Shares
shall cease to be Excess Shares;
(5) Although not entitled to voting and dividend rights,
Excess Shares shall continue to be issued and outstanding units of
beneficial interest in the Trust;
(6) To accommodate transfers of Excess Shares to a Person or
Persons whose Ownership of such Shares would not cause such Shares to
be Excess Shares, the Person to whom the Excess Shares were
originally intended to be transferred may transfer the Excess Shares
held in escrow to a transferee at a price not in excess of the price
paid for the Excess Shares represented by the transferred interest,
and if an interest in such trust is so transferred, the Trust will
release from escrow the Excess Shares represented by the transferred
interest to the transferee, provided that the Excess Shares would not
be Excess Shares in the hands of the transferee;
(7) Excess Shares shall be deemed to have been offered for
sale to the Trust or its designee, for the lesser of the price paid
for the Excess Shares by the Person
B-1
to whom the Excess Shares were originally intended to be transferred
or at their fair market value. The Trust shall have the right to
accept such offer for a period of ninety (90) days from the date of:
(i) the transfer of Shares which made the Shares Excess Shares if the
Trust has actual knowledge that such transfer creates Excess Shares
as a result of receipt of the notice required by (B) below; or (ii)
if such transfer is not actually known to the Trust, the
determination by the Trustees in good faith by resolution duly
adopted that a transfer creating Excess Shares has taken place (the
"Offer Period"). Fair market value shall be determined as of the date
of (i) or (ii) above, and shall be the closing price on the national
stock exchange on which the Shares are listed; but if the Shares are
not listed on a national stock exchange, then the closing bid price
on the "pink sheets" of the National Quotation Bureau Incorporated or
on the NASDAQ National Quotation System (as applicable); but if the
Shares are not quoted on such markets, then the price as determined
in good faith by the Trustees;
(8) If a permitted transferee acquires the Excess Shares they
shall cease to be Excess Shares as of the date of the acquisition. If
the Trust redeems Excess Shares, they shall cease to be Excess Shares
and to be issued and outstanding Shares as of the date of the
redemption. The permitted transferee or the Trust, as applicable,
shall be entitled to the amounts deposited in accordance with (4)
above.
The Trust may accept the deemed offer for Excess Shares by
mailing by registered mail (return receipt requested) a written
notice to the record holder of Excess Shares at the address appearing
on the Trust's stock transfer records stating the Trust's acceptance
of the offer within the Offer Period. Payment for Excess Shares shall
be made by the Trust by check, subject to collection, within 30 days
after acknowledgement of receipt of the above-described notice. After
notice has been sent, the record holders of Excess Shares shall have
no further rights beyond the right to receive payment pursuant to
this Paragraph.
(B) Each Person who would become the Owner of Excess Shares is
obliged upon entering into a binding agreement to acquire the Excess Shares
immediately to give or cause to be given written notice thereof to the
Trust and to give to the Trust such other information as the Trust may
reasonably -require of such Person: (1) with respect to identifying all
Owners and amount of Ownership of its outstanding Shares held directly or
by attribution by such Person; and (2) such other information as may be
necessary to determine the Trust's status under the Code. If any Person
knowingly fails to give the notice provided above and the Trust loses its
REIT qualification under the Code or becomes a personal holding company,
such Person shall indemnify the Trust for the full amount of any damages
and expenses (including increased taxes, attorneys' fees and administrative
costs) resulting from the Trust's loss of its REIT qualification.
(C) For the purpose of determination to be made under this Article:
(a) A Person shall be considered to "Own," be the "Owner" or
have "Ownership" of Shares if he is treated as owner of such Shares
for purposes of part II, subchapter M of the Code, including the
attribution of ownership provisions of Sections 542 and 544 of the
Code, or if such Person would have beneficial ownership of
B-2
such Shares as defined under Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (all as in effect on the
date of the formation of the Trust); and
(b) "Person" includes an individual, corporation, partnership,
estate, trust, association, joint stock company or other entity and
also includes a group as that term is used for purposes of Section
13(d)(3) of the Exchange Act (as in effect on the date of the
formation of the Trust).
(c) In the case of an ambiguity in the application of any of
the provisions of (a) and (b) above, the Trustees shall have the
power to determine for the purposes of this Article XII on the basis
of information known to them: (i) whether any Person Owns Shares;
(ii) whether any two or more individuals, corporations, partnerships,
estates, trusts, associations or joint stock companies or other
entities constitute a Person; and (iii) whether any of the entities
of (ii) above constitute a group.
(D) If any provision of this Article XII or any application of any
such provision is determined to be invalid by any federal or state court
having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected.
(E) Nothing contained in this Article XII shall limit the authority
of the Trustees to take such other action as they deem necessary or
advisable to protect the Trust and the interests of its Shareholders by
preservation of the Trust's status as a REIT under the Code.
(F) All references in this Declaration of Trust to the vote of
Shares shall be deemed to include all Shares other than Excess Shares.
B-3
Exhibit "C"
Declaration of Trust Amendment
------------------------------
Article XII of the Declaration of Trust of each Trust shall be
amended by adding a new section (G) as follows:
(G) Notwithstanding anything to the contrary contained in this
Article XII, the Trustees, in their sole discretion, may exempt a
Person from one or more of the restrictions contained in this
Article XII if the Trust receives a ruling from the Internal Revenue
Service or an opinion of counsel, in either case in form and
substance satisfactory to the Trustees, in their sole discretion, to
the effect that such exemption will not cause the Trust to lose its
status as a REIT. Notwithstanding the receipt of any such ruling or
opinion, the Trustees may impose such additional conditions or
restrictions as they deem appropriate in connection with granting
such exemption.
C-1
KRUPP GOVERNMENT INCOME TRUST PROXY
In completing and returning this proxy you will be voting in the election
of Trustees. Please mark, sign, date, and return this proxy as soon as
possible using the enclosed postage paid envelope. If the Trust has not
received proxies representing a quorum (50.1% of outstanding shares) for
the annual meeting immediately, the Trust may engage a proxy solicitation
firm to obtain a quorum. THE ESTIMATED COST TO THE TRUST ENGAGING SUCH A
FIRM COULD EXCEED $50,000.
A proxy with respect to shares held in the name of two or more persons
shall be cast if executed by any one of them unless at or prior to exercise
of the proxy the Trust receives a specific written notice to the contrary
from any one of them. A proxy purporting to be executed by or on behalf of
a Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the challenger.
Krupp
Shares Held Account No. ______________
----------- -----------
[ ]
[ ] PLEASE SIGN AND DATE THIS
[ ] PROXY CARD ON THE REVERSE SIDE
[ ]
The undersigned hereby appoints Douglas Krupp, Peter Donovan, and Scott
Spelfogel and each of them, as proxies, with full power of substitution in
each, to vote all the shares of beneficial interest of Krupp Government
Income Trust of the Undersigned at the Annual Meeting of the Shareholders
to be held Thursday, May 16, 2002 at 10:00 A.M. at the Trust's office on
the 14th floor of One Beacon Street, Boston, Massachusetts 02108.
1 Election of Trustees:
To vote for all the nominees listed below check box [ ]
- or -
To withhold authority to vote for all the nominees listed below check box [ ]
- or -
To vote for some, but not all of the nominees line through or strike out
the names of those nominees you want to vote AGAINST in order to withhold
authority,
Douglas Krupp Stephen Puleo Charles N. Goldberg J. Paul Finnegan
2 To consider and vote on a proposal to amend Article XII of GIT's
Declaration of Trust. The amendment would give GIT Trustees the
discretion to waive GIT's prohibition on a person's ownership of more
than 9.8% of the outstanding shares of GIT, if certain conditions are met
relating to the effect of such waiver on GIT's status as a real estate
investment trust (a "REIT"), as more fully described in the accompanying
proxy statement.
3 Other Business:
In their discretion, the proxies are authorized to vote upon such other
business as may properly be brought before the meeting. The Board of
Trustees presently knows of no other formal business to be brought before
the meeting.
This proxy is solicited by the Board of Trustees and may be revoked prior
to exercise. This proxy, when properly executed, will be voted as directed
herein by the undersigned Shareholder. In the absence of direction, this
proxy will be voted for All Items.
Date: _______________ Signature of Shareholder ___________________________
Signature of Shareholder ___________________________
Important: Please sign exactly as name appears on front of proxy.
Executors, Administrators, Guardians, Attorneys, or any other
representative should give full title. Corporate stockholders sign with
full corporate name by a duly authorized officer. If a partnership, sign in
partnership name by authorized person.