SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Stat 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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April 9, 2004
Dear Valued Shareholder:
You are cordially invited to attend the joint Annual Meeting of
Shareholders of Krupp Government Income Trust and of Krupp Government
Income Trust II which meeting will be held on Thursday, May 13, 2004 at
10:00 a.m., at the offices of each Trust located at One Beacon Street,
Suite 1400, Boston, Massachusetts 02108.
The proxy statement that accompanies this letter describes the
matters which will be presented at the meeting: the election of trustees of
each of GIT and GIT II.
Due to heightened building security, if you plan to attend the
meeting in person, it will be necessary for you to notify us in advance so
that your name may be added to the building visitor list. You may do this
by checking the box on the enclosed proxy card, or by calling our investor
services line at (866) 355-7877. Only visitors listed on the visitor list
will be admitted to the premises. All visitors must present a valid state
issued picture identification card upon arrival.
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
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 13, 2004
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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 the 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 13, 2004 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.
As to GIT II:
1. Election of Trustees for GIT II.
As to both Trusts:
2. Such other business as may properly be brought before the
meeting. The Board of Trustees of each of the respective
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 2003 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 April 2,
2004 as the record date for the determination of the shareholders who will
be entitled to vote for the applicable Trust 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
April 9, 2004
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. YOUR PROMPT ATTENTION WILL AVOID THE NECESSITY OF THE
TRUST RETAINING A PROXY SOLICITATION FIRM TO OBTAIN A QUORUM AT THE ANNUAL
MEETING. THE ANTICIPATED COST OF ENGAGING SUCH A FIRM COULD EXCEED $50,000.
PROXY STATEMENT DATED APRIL 9, 2004
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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 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 13, 2004 at the
offices of each of the Trusts 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 April 9, 2003.
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 proposal on the proxy.
PERSONS MAKING THE SOLICITATION
The solicitations are made by the Board of Trustees of the respective
Trusts.
SOLICITATION
Solicitation of proxies is to be made by the use of the mails. In
addition, representatives of the applicable Trust may, under instructions
from the 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. Neither Trust currently intends to hire a
proxy solicitation firm, but may do so in its discretion if necessary to
obtain a quorum for the Annual Meeting. The anticipated cost of engaging
such a firm could exceed $50,000. The applicable Trust will pay all
expenses in connection with the solicitation of these proxies.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only Shareholders of the respective Trust of record at the close of
business on April 2, 2004 will be entitled to vote at the Annual 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. However, in
connection with exchange offers in which Berkshire Income Realty, Inc.
("BIR") acquired shares of beneficial interest of the Trusts, a voting
agreement was entered into between each of the Trusts, BIR and BIR's
affiliate, Berkshire Income Realty-OP, L.P., pursuant to which BIR has
agreed to vote all shares of beneficial interest of each of the Trusts
owned by BIR or any of its affiliates in proportion to the votes cast by
the other holders of shares of beneficial interest of GIT and GIT II,
respectively. As of April 2, 2004, BIR and its affiliates owned 4,630,792
shares of beneficial interest of GIT and 5,293,322 shares of beneficial
interest of GIT II. The Shareholders do not have cumulative voting rights.
As to each of the Trusts, the holders of a majority of the outstanding
shares for such Trust represented in person or by proxy, constitutes a
quorum at the Meeting, but if less than a quorum is present for either of
the Trusts, the Trust with a quorum may proceed and a majority in interest
of those present in connection with the other Trust may adjourn the Meeting
as to such Trust. Both Trusts' Declarations of Trust require that elections
be by a plurality. 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. There are no rights of
appraisal or similar rights of dissenters with respect to the election of
Trustees.
The following table provides a summary of the beneficial ownership of
shares of GIT, as of April 2, 2004, by (i) the Trustees of the Trust, (ii)
the Chief Executive Officer of the Trust, (iii) all current Trustees and
executive officers as a group, and (iv) all known beneficial owners of more
than 5%.
The amounts and percentages of shares beneficially owned are reported
on the basis of regulations of the SEC governing the determination of
beneficial ownership of securities. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting
power, which includes the power to vote or to direct the voting of such
security, or investment power, which includes the power to dispose of or to
direct the disposition of such security. A person is also deemed to be a
beneficial owner of any securities of which that person has a right to
acquire beneficial ownership within sixty days. Under these rules, more
than one person may be deemed to be a beneficial owner of the same
securities.
(1) (2) (3) (4)
CLASS OF AMOUNT AND NATURE OF PERCENT
SECURITIES NAME OF BENEFICIAL OWNER BENEFICIAL INTEREST OF CLASS
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<s> <c> <c> <c>
Shares Berkshire Income Realty-OP, L.P. 4,630,792 Shares 30.76%
Shares BIR GP, L.L.C. 4,630,792 Shares (1) 30.76%
Shares Berkshire Income Realty, Inc. 4,630,792 Shares (2) 30.76%
Shares KRF Company, L.L.C. 4,630,792 Shares (3) 30.76%
Shares The Krupp Family Limited Partnership - 94 4,630,792 Shares (4) 30.76%
Shares The Douglas Krupp 1980 Family Trust 4,630,792 Shares (5) 30.76%
Shares The George Krupp 1980 Family Trust 4,630,792 Shares (6) 30.76%
Shares George D. Krupp 4,630,792 Shares (7) 30.76%
Shares Douglas Krupp 4,630,792 Shares (8) 30.76%
Shares Stephen Puleo None *
Shares Charles N. Goldberg None *
Shares J. Paul Finnegan None *
Shares Peter Donovan None *
Shares All Trustees and Executive 4,630,792 Shares (8) 30.76%
Officers as a group (11 people)
<FN>
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<F1> BIR GP, L.L.C. owns 100% of the general partnership interests in
Berkshire Income Realty-OP, L.P. ("BIR-OP"), and by virtue of such
interest, BIR GP, L.L.C. may be deemed to beneficially own the shares
of GIT owned by BIR-OP.
<F2> Berkshire Income Realty, Inc. ("BIR") owns 100% of the preferred
limited partnership interests in BIR-OP and 100% of the limited
liability company interests in BIR GP, L.L.C., and by virtue of such
interests, BIR may be deemed to beneficially own the shares of GIT
owned by BIR-OP.
2
<F3> KRF Company, L.L.C. owns 100% of the common limited partnership
interests in BIR-OP and 100% of the common stock of BIR, and by
virtue of such interests, KRF Company, L.L.C. may be deemed to
beneficially own the shares of GIT owned by BIR-OP.
<F4> The Krupp Family Limited Partnership - 94 owns 100% of the limited
liability company interests in KRF Company, L.L.C., and by virtue of
such interest, The Krupp Family Limited Partnership - 94 may be
deemed to beneficially own the shares of GIT owned by BIR-OP.
<F5> The Douglas Krupp 1980 Family Trust owns 50% of the limited
partnership interests in The Krupp Family Limited Partnership - 94,
and by virtue of such interest, The Douglas Krupp 1980 Family Trust
may be deemed to beneficially own the shares of GIT owned by BIR-OP.
The trustees of The Douglas Krupp 1980 Family Trust are Paul Krupp,
Lawrence Silverstein and Vincent O'Reilly. The trustees share control
over the power to dispose of the assets of the trust and thus each
may be deemed to beneficially own the shares of GIT owned by BIR-OP;
however, each of the trustees disclaims beneficial ownership of all
of those shares that are or may be deemed to be beneficially owned by
Douglas Krupp or George D. Krupp.
<F6> The George Krupp 1980 Family Trust owns 50% of the limited
partnership interests in The Krupp Family Limited Partnership - 94,
and by virtue of such interest, The George Krupp 1980 Family Trust
may be deemed to beneficially own the shares of GIT owned by BIR-OP.
The trustees of The George Krupp 1980 Family Trust are Paul Krupp and
Lawrence Silverstein. The trustees share control over the power to
dispose of the assets of the trust and thus each may be deemed to
beneficially own the shares of GIT owned by BIR-OP; however, each of
the trustees disclaims beneficial ownership of all of those shares
that are or may be deemed to be beneficially owned by Douglas Krupp
or George D. Krupp.
<F7> The general partners of The Krupp Family Limited Partnership - 94 are
George D. Krupp and Douglas Krupp, each of whom owns 50% of the
general partner interests in The Krupp Family Limited Partnership -
94, and by virtue of such interest, George D. Krupp may be deemed to
beneficially own the shares of GIT owned by BIR-OP.
<F8> The general partners of The Krupp Family Limited Partnership - 94 are
George D. Krupp and Douglas Krupp, each of whom owns 50% of the
general partner interests in The Krupp Family Limited Partnership -
94, and by virtue of such interest, Douglas Krupp may be deemed to
beneficially own the shares of GIT owned by BIR-OP. Douglas Krupp
also is Chairman of the Board, President and Trustee of GIT.
* The amount owned does not exceed one percent of the shares of
beneficial interest of GIT outstanding as of April 2, 2004.
</FN>
The following table provides a summary of the beneficial ownership of
shares of GIT II, as of April 7, 2003, by (i) the Trustees of the Trust,
(ii) the Chief Executive Officer of the Trust, (iii) all current Trustees
and executive officers as a group, and (iv) all known beneficial owners of
more than 5%.
The amounts and percentages of shares beneficially owned are reported
on the basis of regulations of the SEC governing the determination of
beneficial ownership of securities. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting
power, which includes the power to vote or to direct the voting of such
security, or investment power, which includes the power to dispose of or to
direct the disposition of such security. A person is also deemed to be a
beneficial owner of any securities of which that person has a right to
acquire beneficial ownership within sixty days. Under these rules, more
than one person may be deemed to be a beneficial owner of the same
securities.
(1) (2) (3) (4)
CLASS OF AMOUNT AND NATURE OF PERCENT
SECURITIES NAME OF BENEFICIAL OWNER BENEFICIAL INTEREST OF CLASS
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<s> <c> <c> <c>
Shares Berkshire Income Realty-OP, L.P. 5,293,322 Shares 28.81%
Shares BIR GP, L.L.C. 5,293,322 Shares (1) 28.81%
Shares Berkshire Income Realty, Inc. 5,293,322 Shares (2) 28.81%
Shares KRF Company, L.L.C. 5,293,322 Shares (3) 28.81%
3
Shares The Krupp Family Limited Partnership - 94 5,293,322 Shares (4) 28.81%
Shares The Douglas Krupp 1980 Family Trust 5,293,322 Shares (5) 28.81%
Shares The George Krupp 1980 Family Trust 5,293,322 Shares (6) 28.81%
Shares George D. Krupp 5,293,322 Shares (7) 28.81%
Shares Douglas Krupp 5,293,322 Shares (8) 28.81%
Shares Stephen Puleo None *
Shares Charles N. Goldberg None *
Shares J. Paul Finnegan None *
Shares Peter Donovan None *
Shares All Trustees and Executive 5,293,322 Shares (8) 28.81%
Officers as a group (11 people)
<FN>
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<F1> BIR GP, L.L.C. owns 100% of the general partnership interests in
Berkshire Income Realty-OP, L.P. ("BIR-OP"), and by virtue of such
interest, BIR GP, L.L.C. may be deemed to beneficially own the shares
of GIT II owned by BIR-OP.
<F2> Berkshire Income Realty, Inc. ("BIR") owns 100% of the preferred
limited partnership interests in BIR-OP and 100% of the limited
liability company interests in BIR GP, LLC, and by virtue of such
interests, BIR may be deemed to beneficially own the shares of GIT II
owned by BIR-OP.
<F3> KRF Company, L.L.C. owns 100% of the common limited partnership
interests in BIR-OP and 100% of the common stock of BIR, and by
virtue of such interests, KRF Company, L.L.C. may be deemed to
beneficially own the shares of GIT II owned by BIR-OP.
<F4> The Krupp Family Limited Partnership - 94 owns 100% of the limited
liability company interests in KRF Company, L.L.C., and by virtue of
such interest, The Krupp Family Limited Partnership - 94 may be
deemed to beneficially own the shares of GIT II owned by BIR-OP.
<F5> The Douglas Krupp 1980 Family Trust owns 50% of the limited
partnership interests in The Krupp Family Limited Partnership - 94,
and by virtue of such interest, The Douglas Krupp 1980 Family Trust
may be deemed to beneficially own the shares of GIT II owned by BIR-
OP. The trustees of The Douglas Krupp 1980 Family Trust are Paul
Krupp, Lawrence Silverstein and Vincent O'Reilly. The trustees share
control over the power to dispose of the assets of the trust and thus
each may be deemed to beneficially own the shares of GIT II owned by
BIR-OP; however, each of the trustees disclaims beneficial ownership
of all of those shares that are or may be deemed to be beneficially
owned by Douglas Krupp or George D. Krupp.
<F6> The George Krupp 1980 Family Trust owns 50% of the limited
partnership interests in The Krupp Family Limited Partnership - 94,
and by virtue of such interest, The George Krupp 1980 Family Trust
may be deemed to beneficially own the shares of GIT II owned by BIR-
OP. The trustees of The George Krupp 1980 Family Trust are Paul Krupp
and Lawrence Silverstein. The trustees share control over the power
to dispose of the assets of the trust and thus each may be deemed to
beneficially own the shares of GIT II owned by BIR-OP; however, each
of the trustees disclaims beneficial ownership of all of those shares
that are or may be deemed to be beneficially owned by Douglas Krupp
or George D. Krupp.
<F7> The general partners of The Krupp Family Limited Partnership - 94 are
George D. Krupp and Douglas Krupp, each of whom owns 50% of the
general partner interests in The Krupp Family Limited Partnership -
94, and by virtue of such interest, George D. Krupp may be deemed to
beneficially own the shares of GIT II owned by BIR-OP.
<F8> The general partners of The Krupp Family Limited Partnership - 94 are
George D. Krupp and Douglas Krupp, each of whom owns 50% of the
general partner interests in The Krupp Family Limited Partnership -
94, and by virtue of
4
such interest, Douglas Krupp may be deemed to beneficially own the
shares of GIT II owned by BIR-OP. Douglas Krupp also is Chairman of
the Board, President and Trustee of GIT II.
* The amount owned does not exceed one percent of the shares of
beneficial interest of GIT II outstanding as of April 2, 2004.
</FN>
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of the filings with the Securities and Exchange
Commission, the Trusts believe that all of the Trustees and executive
officers complied during fiscal 2003 with the reporting requirements of
Section 16(a) of the Securities and Exchange Act of 1934
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 as of the record date of each of the Trusts
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 One
Beacon Street, Suite 1400, Boston, Massachusetts 02108.
TRUSTEE NOMINATION PROCESS
The Trusts do not currently have a nominating committee as the Board
has determined, given its relatively small size, that the Independent
Trustees shall perform this function. Nominees for positions on each of GIT
and GIT II's respective Board of Trustees are identified and recommended by
a majority of the Independent Trustees (as defined herein) on each Trust's
Board. Trustee candidates, including Trustees up for re-election and
candidates nominated by Shareholders, are considered based upon various
criteria, including broad-based business and professional skills and
experience, personal integrity, sound business judgment, community
involvement, and time available to devote to Board activities. The 4
nominees approved by the Board for inclusion on each of GIT and GIT II's
proxy card are Trustees standing for re-election. Neither of the Trusts
paid a fee to any third party to identify or evaluate or assist in
identifying or evaluating potential nominees. The Board did not receive a
Trustee candidate recommendation from a Shareholder that beneficially owned
more than 5% of either Trust's common voting shares or from a group of
Shareholders that beneficially owned, in the aggregate, more than 5% of
either Trust's common voting shares.
The Board for each Trust will consider Trustee candidates recommended
by Shareholders. The Declaration of Trust for each of GIT and GIT II sets
forth procedures relating to the consideration of Trustee nominations by
Shareholders. A copy of the Declaration of Trust for the applicable Trust
may be obtained by any Shareholder upon request by writing to the Clerk of
the Trusts at the address of the office of GIT and GIT II listed on the
first page of this proxy statement. The procedures set forth therein
include that Shareholders entitled to vote at the election of Trustees may
nominate one or more persons for election by sending written notice of
their intention to the Clerk at least 90 days prior to the election which
shall identify the nominator and nominee; include biographical information,
a description of business and personal experience for each nominee, and a
written consent from the nominee to serve as a Trustee if so elected.
5
ELECTION OF TRUSTEES
Pursuant to each of the Trusts' Declarations of Trust, as amended,
the Trustees are elected annually. The Trusts both currently have four
Trustees, all of whom have been nominated for reelection in the case of
both GIT and GIT II by the Board of Trustees. 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 Offices No. of Principal Offices No. of
with GIT Years as with GIT II Years
as GIT GIT II
Trustee Trustee
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<s> <c> <c> <c> <c>
Douglas Krupp, 57 Chairman of the 8 Chairman of the 8
Board, President and Board, President and
Trustee Trustee
Charles N. Goldberg, 62 Trustee* 14 Trustee* 12
Stephen Puleo, 69 Trustee* 3 Trustee* 3
J. Paul Finnegan, 79 Trustee* 14 Trustee* 12
<FN>
- --------------------
* Independent Trustees as defined under Article II, Section 1(x) of the
Declaration of Trust for each Trust and as defined in Section 121(A)
of the American Stock Exchange's listing standards.
</FN>
Douglas Krupp co-founded and serves as 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 an operating company through private
equity investments. Mr. Krupp has held the position of Chairman and
previously, 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. Mr. Krupp is a regional board member of the Anti-Defamation
League. Mr. Krupp 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 Juris Doctor degree from the University of Texas. He
is a 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
6
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 and a director.
Mr. Finnegan holds a Bachelor of Arts degree from Harvard College, a Juris
Doctor 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.
EXECUTIVE OFFICERS
Douglas Krupp, age 57, 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.
Peter Donovan, age 50, is Chief Executive Officer of both GIT and GIT II.
He was elected July 28, 2003 to both GIT and GIT II.
Alan Reese, age 50, is Treasurer of both GIT and GIT II. He was elected
February 28, 2003 to both GIT and GIT II.
Scott D. Spelfogel, age 43, 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 30, 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.
Peter F. Donovan (age 50) is Chief Executive Officer of the Trusts
and 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. 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 Bachelor of Arts degree from Trinity College and a Master of Business
Administration degree from Northwestern University. Mr. Donovan is
currently a member of the Fannie Mae DUS Advisory Council.
Alan Reese is the Treasurer of the Trusts and is Executive Vice
President, Corporate Operations and Chief Financial Officer of Berkshire
Mortgage Finance. Berkshire Mortgage Finance is the 12th largest mortgage
banking firm in the United States based on servicing and asset management
of a $18 billion loan portfolio. Mr. Reese joined Berkshire Mortgage
Finance in February of 2003 and is currently responsible for the
accounting, financial planning and reporting, treasury, mortgage trading
desk and loan servicing functions. Prior to joining Berkshire Mortgage
Finance, Mr. Reese was the Chief Financial Officer of Visible Markets, Inc.
(a company involved in the development and operation of an internet trading
site for secondary trading of mortgage-backed securities) from 2000 to 2001
and was engaged in business as a consultant from 2001-January, 2003. Prior
to Visible Markets, Inc., he was the Senior Vice
7
President and Chief Financial Officer of Mortgage Lenders Network USA, Inc.
(a residential mortgage banking company) from 1998-2000. Mr. Reese held
several positions with BankBoston Corporation from 1990 to 1998 and most
recently held the position of Director of Operations, National Consumer
Lending from 1996-1998. In addition, Mr. Reese was employed with Coopers &
Lybrand from 1976 to 1990, and was a partner from 1987-1990. Mr. Reese
presently serves on the Board of Trustees for Berklee College of Music. He
received a B.B.A. degree from the University of Wisconsin - Eau Claire 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 Bachelor of Arts degree from the College of the Holy Cross in
1995 and a Juris Doctor degree 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 and New York Bar Associations.
In addition, the following are deemed Executive Officers of the
Trusts:
George Krupp (age 59) is the Co-Founder and Vice-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 an operating company through private equity investments. Mr.
Krupp has held the position of Vice-Chairman and previously Co-Chairman,
since The Berkshire Group was established as The Krupp Companies in 1969.
Mr. Krupp attended the University of Pennsylvania and Harvard University
and holds a Master's Degree in History from Brown University. Mr. Krupp
also serves on the Boards of Directors of Boston Symphony and Combined
Jewish Philanthropies.
Ronald Halpern (age 62) 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 Bachelor of Arts degree from the University of the
City of New York and Juris Doctor degree from Brooklyn Law School.
Carol J.C. Mills (age 54) is Senior Vice President for Loan
Management of Berkshire Mortgage Finance and in this capacity, she is
responsible for the Asset Management functions of Berkshire Mortgage
Finance. She manages the estimated $18 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
Bachelor of Arts degree from
8
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 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 $185,359 and $587,877 for GIT and GIT II respectively in 2003)
of the value of the respective Trust's actual and committed mortgage
assets, payable quarterly.
GIT and GIT II also reimburse affiliates of the Advisor for certain
costs incurred in connection with maintaining the books and records of each
Trust, the preparation and mailing of financial reports, tax information
and other communications to investors and legal fees and expenses (which
totaled $347,598 and $386,494 in 2003, respectively for GIT and GIT II).
REPORT OF THE AUDIT COMMITTEE
GIT and GIT II have Audit Committees meeting the standards set forth
in section 3(a)(58)(A) of the Securities Exchange Act of 1934 which were
established in May, 2002. There is no Compensation Committee, nor is there
any committee performing a similar function. Each of the Audit Committees
is comprised of Messrs. Puleo, Goldberg and Finnegan, the Independent
Trustees (as defined herein). Mr. Puleo is the Chairman of each Audit
Committee and is the designated financial expert. During the 2003 fiscal
year, each Committee met four times. The duties of each of the Audit
Committees include: (1) engaging independent auditors for the applicable
Trust and confirming their independence; (2) reviewing with the independent
auditors of the applicable Trust the scope of the audit and audit fees; (3)
reviewing with the independent auditors and management the financial
statements for the year; (4) reviewing and approving any non-audit services
provided by the independent auditors; (5) consulting with the independent
auditors and management regarding the adequacy of internal controls; (6)
discussing any legal or regulatory matters affecting the applicable Trust;
and (8) approving any related party transactions between the Advisor and
the applicable Trust. In addition, each Audit Committee, based on its
reviews, make recommendations to the applicable Board of Trustees of the
Trust that are in the best interests of the Trust and the shareholders.
Each Audit Committee reviewed and discussed the audited financial
statements for GIT and GIT II as applicable for 2003 with the Advisor. In
addition, the Audit Committees discussed with the independent auditors the
matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU section 380). The Audit Committees have each
received the written disclosures and the letter from the independent
accountants required by the Independent Standards Board Standard No. 1
(Independent Standards Board Standard No. 1, Independence Discussions with
Audit Committees), and have discussed with the independent auditors the
independent auditor's independence. Based on the review and discussions
regarding the foregoing, the Audit Committees recommended to the Boards of
Trustees of GIT and GIT II, as applicable, that the audited financial
statements be included in the
9
applicable Trust's Annual Report on Form 10-K for the last fiscal year for
filing with the Securities and Exchange Commission.
The Audit Committees discussed with the Advisor its evaluation of the
effectiveness of the Trusts' disclosure controls and procedures. There were
no significant changes in the Trusts' internal controls or in other factors
that could significantly affect these controls following the date of their
evaluation.
The Boards of Trustees for the Trusts have adopted written charters
for each Audit Committee. The charters for GIT and GIT II are attached as
appendices hereto.
Members of the Audit Committee:
Stephen Puleo, Chair
Charles N. Goldberg
J. Paul Finnegan
The Board of Trustees of each Trust has regularly scheduled quarterly
meetings and special meetings as required. During 2003, 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.
The Trusts encourage each Trustee to attend each Trust's annual
meeting. All 4 Trustees for GIT and GIT II attended the annual meeting in
2003.
SHAREHOLDER-TRUSTEE COMMUNICATIONS
Shareholders may communicate in writing to the Board of Trustees, or
any individual Trustee, by sending any such written correspondence directly
to the attention of the Clerk of the Trusts in a sealed envelope marked
with the Trustee's name. The Clerk will forward all such written
communications unopened to the Board or any individual Trustee.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
During 2003 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 $532,957and $974,371 for GIT and GIT II
respectively. Employees of affiliates of the Advisor do not receive
directly 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 stock appreciation rights were exercised
in 2003 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 2003.
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neither GIT nor GIT II had a Compensation Committee in 2003 and
neither currently has such a committee, as no Executive Officers of GIT or
GIT II received in 2003 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
2003.
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 formation. The Audit Committee of each Trust
has engaged PricewaterhouseCoopers LLP as auditors for 2004.
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 2003 and the reviews of the
financial statements included in GIT and GIT II's Forms 10-Q for the year
2003 along with any financial information systems design and implementation
fees or any other fees.
GIT
- ---------------------------------------------------------------------------
Fee Category Fiscal 2003 Fees Fiscal 2002 Fees
- ---------------------------------------------------------------------------
Audit Fees $37,000 $37,000
- ---------------------------------------------------------------------------
Audit Related Fees -0- $ 4,868
- ---------------------------------------------------------------------------
Tax Fees $ 3,675 $ 3,500
- ---------------------------------------------------------------------------
All Other Fees -0- -0-
- ---------------------------------------------------------------------------
GIT II
- ---------------------------------------------------------------------------
Fee Category Fiscal 2003 Fees Fiscal 2002 Fees
- ---------------------------------------------------------------------------
Audit Fees $37,000 $37,000
- ---------------------------------------------------------------------------
Audit Related Fees -0- $ 4,868
- ---------------------------------------------------------------------------
Tax Fees $ 3,675 $ 3,500
- ---------------------------------------------------------------------------
All Other Fees -0- -0-
- ---------------------------------------------------------------------------
The Audit-Related Fees for 2002 represent fees incurred relating to
Form S-11/Prospectus research and SEC Comment Letter response in connection
with the BIR exchange offer.
11
The Tax Fees consist of fees billed for professional services related
to tax compliance.
Each Trust's Declaration of Trust does not require that Shareholders
approve the engagement 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
2005 Annual Meeting of Shareholders, the Shareholder must submit the
Proposal to the applicable Trust on or before December 10, 2004.
IMPORTANT
PLEASE FILL IN, DATE AND SIGN THE ACCOMPANYING PROXY, WHICH IS
SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST, AND RETURN IT PROMPTLY IN
THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY NEVERTHELESS VOTE IN PERSON IF
YOU ATTEND THE MEETING.
12
KRUPP GOVERNMENT INCOME TRUST
AND
KRUPP GOVERNMENT INCOME TRUST II
FIRST AMENDED AND RESTATED AUDIT COMMITTEE CHARTER
I. Purpose
The primary objective of the Audit Committee is to assist the Board in
fulfilling its oversight responsibilities with respect to (a) the financial
statements and other financial information provided by the Company to its
stockholders, the public and others, (b) the Company's compliance with
legal and regulatory requirements, (c) the independent auditors'
qualifications and independence and (d) the performance of the Company's
independent auditors.
Although the Audit Committee has the powers and responsibilities set forth
in this Charter, the role of the Audit Committee is oversight. The members
of the Audit Committee are not full-time employees of the Company and may
or may not be accountants or auditors by profession or experts in the
fields of accounting or auditing and, in any event, do not serve in such
capacity. Consequently, it is not the duty of the Audit Committee to
conduct audits or to determine that the Company's financial statements and
disclosures are complete and accurate and are in accordance with generally
accepted accounting principles and applicable rules and regulations. These
are the responsibilities of management and the independent auditors.
II. Organization
The Audit Committee shall consist of three or more trustees, each of whom
shall satisfy the independence, financial literacy and experience
requirements of Section 10A of the Securities Exchange Act and any other
regulatory requirements.
The members of the Audit Committee shall be appointed by the Board.
The Audit Committee may form and delegate authority to subcommittees when
appropriate.
III. Meetings
The Audit Committee shall meet at least four times per year on a quarterly
basis, or more frequently as circumstances require. As part of its job to
foster open communication, the Audit Committee shall meet at least
quarterly with management and the independent auditors in separate
executive sessions to discuss any matters that the Audit Committee or each
of these groups believe should be discussed privately.
13
The members of the Audit Committee shall select a chair who will preside at
each meeting of the Audit Committee and, in consultation with the other
members of the Audit Committee, shall set the frequency and length of each
meeting and the agenda of items to be addressed at each upcoming meeting.
In addition, at each first meeting held following the beginning of each
calendar year (the "First Meeting"), the chair, in consultation with the
other members of the Audit Committee, shall determine the list of items to
be addressed by the Audit Committee during the coming year (the "Annual
Agenda").
The chair shall ensure that the agenda for each upcoming meeting of the
Audit Committee is circulated to each member of the Audit Committee as well
as each other trustee in advance of the meeting, and that the Annual Agenda
is circulated to each member of the Audit Committee as well as each other
trustee not later than five business days after it is finalized (which
shall be not later than five business days after the First Meeting).
IV. Authority and Responsibilities
In recognition of the fact that the independent auditors are ultimately
accountable to the Audit Committee, the Audit Committee shall have the sole
authority and responsibility to select, evaluate and, where appropriate,
replace the independent auditors (or to nominate the independent auditors
for stockholder approval), and shall approve all audit engagement fees and
terms and all non-audit engagements with the independent auditors. The
Audit Committee shall consult with management but shall not delegate these
responsibilities.
To fulfill its responsibilities, the Audit Committee shall:
With respect to the independent auditors:
1. Be directly responsible for the appointment, compensation and
oversight of the work of the independent auditors (including
resolution of disagreements between management and the independent
auditors regarding financial reporting) for the purpose of preparing
its audit report or related work.
2. Have the sole authority to review in advance, and grant any
appropriate pre-approvals, of (a) all auditing services to be
provided by the independent auditors and (b) all non-audit services
to be provided by the independent auditors as permitted by Section
10A of the Securities Exchange Act, and in connection therewith to
approve all fees and other terms of engagement. The Audit Committee
shall also review and approve disclosures required to be included in
Securities and Exchange Commission periodic reports filed under
Section 13(a) of the Securities Exchange Act with respect to non-
audit services.
3. Review on an annual basis the performance of the independent
auditors.
4. Ensure that the independent auditors submit to the Audit Committee on
an annual basis a written statement consistent with Independent
Standards Board Standard No. 1, discuss with the independent auditors
any disclosed relationships or
14
services that may impact the objectivity and independence of the
independent auditors and satisfy itself as to the independent
auditors' independence.
5. Discuss with the independent auditor at least annually the auditor's
internal quality control procedures and any material issues raised by
the most recent peer review.
6. Review all reports required to be submitted by the independent
auditors to the Audit Committee under Section 10A of the Securities
Exchange Act.
7. Review, based upon the recommendation of the independent auditors
management, the scope and plan of the work to be done by the
independent auditors.
With respect to the annual financial statements:
8. Review and discuss with management and the independent auditors the
Company's annual audited financial statements, including disclosures
made in "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
9. Discuss with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, as amended,
relating to the conduct of the audit.
10. Recommend to the Board, if appropriate, that the Company's annual
audited financial statements be included in the Company's annual
report on Form 10-K for filing with the Securities and Exchange
Commission.
11. Prepare the report required by the Securities and Exchange Commission
to be included in the Company's annual proxy statement and any other
reports of the Audit Committee required by applicable securities
laws.
With respect to quarterly financial statements:
12. Review and discuss with management and the independent auditors the
Company's quarterly financial statements, including disclosures made
in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the independent auditors' review of the
quarterly financial statements, prior to submission to stockholders,
any governmental body, any stock exchange or the public.
15
Annual reviews:
13. Obtain and review an annual report from management relating to the
accounting principles used in the preparation of the Company's
financial statements, including those policies for which management
is required to exercise discretion or judgments regarding the
implementation thereof.
Periodic reviews:
14. Periodically review separately with each of management and the
independent auditors (a) any significant disagreement between
management and the independent auditors in connection with the
preparation of the financial statements, (b) any difficulties
encountered during the course of the audit, including any
restrictions on the scope of work or access to required information
and (c) management's response to each.
15. Periodically discuss with the independent auditors, without
management being present, (a) their judgments about the quality and
appropriateness of the Company's accounting principles and financial
disclosure practices as applied in its financial reporting and (b)
the completeness and accuracy of the Company's financial statements.
16. Consider and approve, if appropriate, significant changes to the
Company's accounting principles and financial disclosure practices as
suggested by the independent auditors or management. Review with the
independent auditors, and management, at appropriate intervals, the
extent to which any changes or improvements in accounting or
financial practices, as approved by the Audit Committee, have been
implemented.
17. Review and discuss with management and the independent auditors and
the Company's in-house and independent counsel, as appropriate, any
legal, regulatory or compliance matters that could have a significant
impact on the Company's financial statements, including applicable
changes in accounting standards or rules.
Discussions with management:
18. Review and discuss with management the Company's earnings press
releases, if any, including the use of "pro forma" or "adjusted" non-
GAAP information, as well as financial information and earnings
guidance provided to analysts and rating agencies.
19. Review and discuss with management all material off-balance sheet
transactions, arrangements, obligations (including contingent
obligations) and other
16
relationships of the Company with unconsolidated entities or other
persons, that may have a material current or future effect on
financial condition, changes in financial condition, results of
operations, liquidity, capital resources, capital reserves or
significant components of revenues or expenses.
20. Review and discuss with management the Company's major risk exposures
and the steps management has taken to monitor, control and manage
such exposures, including the Company's risk assessment and risk
management guidelines and policies.
With respect to internal controls:
21. In consultation with the independent auditors and management, review
the adequacy of the Company's internal control structure and
procedures designed to insure compliance with laws and regulations.
22. Establish procedures for (a) the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and (b) the confidential,
anonymous submission by employees of the Company of concerns
regarding the questionable accounting or auditing matters.
23. Review (i) the internal control report prepared by management,
including management's assessment of the effectiveness of the
Company's internal control structure and procedures for financial
reporting and (ii) the independent auditors' attestation, and report,
on the assessment made by management.
Other:
24. Review and approve all related-party transactions, including the
matters required to be approved by the independent trustees pursuant
to the Company's Declaration of Trust, as amended.
25. Review and approve (a) any change or waiver in the Company's code of
ethics for senior financial officers and (b) any disclosure made on
Form 8-K regarding such change or waiver.
26. Establish a policy addressing the Company's hiring of employees or
former employees of the independent auditors who were engaged on the
Company's account.
27. Review and reassess the adequacy of this Charter annually and
recommend to the Board any changes deemed appropriate by the Audit
Committee.
28. Review its own performance annually.
29. Report regularly to the Board.
17
30. Perform any other activities consistent with this Charter, the
Company's by-laws and governing law, as the Audit Committee or the
Board deems necessary or appropriate.
V. Resources
The Audit Committee shall have the authority to retain independent legal,
accounting and other consultants to advise the Audit Committee. The Audit
Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditors to attend a meeting of
the Audit Committee or to meet with any members of, or consultants to, the
Audit Committee.
The Audit Committee shall determine the extent of funding necessary for
payment of compensation to the independent auditors for the purpose of
rendering or issuing the annual audit report and to any independent legal,
accounting and other consultants retained to advise the Audit Committee.
18
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 shares of beneficial interest of Krupp Government Income
Trust of the Undersigned at the Annual Meeting of the Shareholders to be
held Thursday, May 13, 2004 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 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.
I will attend the Annual Meeting of the Shareholders in person.
Yes [ ] No [ ]