As filed with the Securities and Exchange Commission on May 7, 2003
Registration No. 2-78066
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
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AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS
HOUSING INVESTMENT TRUST
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PAYMENT OF FILING FEE:
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a(6)-(i)(4) and
0-11.
1) Title of Each Class of securities to which transaction applies:
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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:
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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 Number:
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3) Filing Party:
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4) Date Filed:
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May 7, 2003
TO PARTICIPANTS, AFL-CIO HOUSING INVESTMENT TRUST
Enclosed is the Notice of 2003 Annual Meeting of Participants and a Proxy
Statement describing the election of a Chairman and Trustees and the
ratification of independent public accountants and other indicated matters
that are expected to come up at the meeting.
Also enclosed is a proxy card for each Participant noting the number of Units
held by that Participant and the exact name in which those Units are
registered. A Participant that does not wish to send a representative to the
meeting should vote its Units by mail, Internet or facsimile, as described
herein, as soon as possible.
Sincerely,
Stephen Coyle
Chief Executive Officer
PLEASE VOTE WITHIN FIVE DAYS OF RECEIPT
SC/spt
opeiu #2, afl-cio
Enclosures
AFL-CIO HOUSING INVESTMENT TRUST
PROXY
2003 Annual Meeting of Participants
The undersigned hereby appoints Michael M. Arnold and Helen R. Kanovsky
and each of them with power to act without the other and with full power of
substitution, as proxies for and on behalf of the undersigned, to vote all
Units of Participation which the undersigned is entitled to vote at the Annual
Meeting of Participants to be held May 28, 2003 and all adjournments thereof,
with all the powers that the undersigned would possess if personally present
and particularly (but without limiting the generality of the foregoing) to
vote and act as follows:
(I) For the election of a Chairman to serve until the 2004 Annual
Meeting of Participants and until his successor is elected and qualifies:
Richard Ravitch
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(II) For the reelection of three (3) Class II Union Trustees and one
(1) Class II Management Trustee, and for the election of one (1) Class II
Management Trustee, to serve until the 2006 Annual Meeting of Participants and
until their successors are elected and qualify:
John J. Flynn (Class II Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Jeremiah O'Connor (Class II Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Edward C. Sullivan (Class II Union Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Marlyn J. Spear (Class II Management Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Stephen Frank (Class II Management Trustee)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(III) For ratification of the Board of Trustees' selection of Ernst &
Young, LLP as independent public accountants for the Trust's 2003 fiscal year:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
and upon such other matters as may properly come before the meeting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The Trustees recommend a vote FOR the above items. ANY PROXY NOT MARKED
OTHERWISE WILL BE TREATED AS A VOTE FOR THE ITEMS.
---
The Units of Participation represented hereby will be voted in accordance
with instructions contained in this Proxy.
The undersigned hereby ratifies and confirms all that said proxies or
their substitutes or any of them may lawfully do by virtue hereof. The
undersigned hereby acknowledges receipt of the Notice of 2003 Annual Meeting
of Participants dated May 7, 2003 and the Proxy Statement dated May 7, 2003.
Please sign your name and indicate your capacity as attorney, trustee or
official of a Participant.
Dated: , 2003
---------------
Participant ID:
Participant Name:
Number of Units:
By: ------------------------------------------
(Signature)
------------------------------------------
(Name - please print)
Title: ------------------------------------------
(please print)
- -----------------------------------------------------------------------------
To vote via Internet, please use the following User Name and Password*:
User Name:
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Password:
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- -----------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
IMPORTANT: THIS PROXY MAY BE VOTED IN ANY OF THREE (3) WAYS:
BY MAIL: PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
SELF-ADDRESSED, STAMPED ENVELOPE.
BY FACSIMILE: PLEASE SIGN, DATE AND FAX THIS PROXY TO (202) 331-8190.
BY INTERNET: PLEASE GO TO http://www.aflcio-hit.com/proxy AND ENTER THE
USER NAME AND PASSWORD ENCLOSED ABOVE.
PLEASE NOTE THAT ALL VOTES MUST BE TIME-STAMPED OR POSTMARKED
BY MIDNIGHT ON MAY 28, 2003.
- -----------------------
* Please note the User Name and Password are case-sensitive.
AFL-CIO HOUSING INVESTMENT TRUST
NOTICE OF THE 2003 ANNUAL MEETING OF PARTICIPANTS
To Participants, AFL-CIO Housing Investment Trust:
Notice is hereby given that the 2003 annual meeting of Participants (the
"Meeting") of the American Federation of Labor and Congress of Industrial
Organizations Housing Investment Trust (the "Trust"), a District of Columbia
common law trust, will be held at the offices of the Trust, 1717 K Street,
N.W., Suite 707, Washington, D.C., 20036 on May 28, 2003 at 2:00 p.m. for the
following purposes:
1. To reelect a Chairman to hold office until the 2004 Annual Meeting of
Participants and until his successor is elected and qualifies;
2. To reelect three (3) Class II Union Trustees and one (1) Class II
Management Trustee, and to elect one (1) Class II Management Trustee, to
hold office until the 2006 Annual Meeting of Participants and until their
respective successors are elected and qualify;
3. To ratify the selection of Ernst & Young, LLP as the independent public
accountants for the Trust's fiscal year ending December 31, 2003; and
4. To transact such other business as may properly come before the Meeting or
any adjournment or adjournments thereof.
The close of business on March 31, 2003 has been fixed as the record date
for the determination of Participants entitled to notice of and to vote at the
Meeting and any adjournment(s) thereof. Accordingly, only Participants of
record as of the close of business on that date are entitled to notice of and
to vote at the Meeting or at any such adjournment.
By Order of the Board of Trustees
Stephen Coyle
Chief Executive Officer
Dated: May 7, 2003
AFL-CIO HOUSING INVESTMENT TRUST
PROXY STATEMENT
May 7, 2003
GENERAL MATTERS
This Proxy Statement is being sent on May 7, 2003 in connection with the
solicitation of proxies for use at the annual meeting of Participants (the
"Meeting") of the American Federation of Labor and Congress of Industrial
Organizations Housing Investment Trust (the "Trust") to be held at the offices
of the Trust, 1717 K Street, N.W., Suite 707, Washington, D.C. 20036, on May
28, 2003, beginning at 2:00 p.m. and at any adjournment(s) thereof.
A copy of the Trust's annual report for the year ended December 31, 2002
was previously mailed to each Participant entitled to vote at the Meeting
together with financial statements for the fiscal year ended December 31,
2002. The Trust will furnish, without charge, a copy of the annual report for
2002 and the most recent semi-annual report succeeding the annual report, if
any, to any Participant that requests one. Requests for reports should be
made by placing a collect call to the Trust, at (202) 331-8055, directed to
Stephanie Turman. Written requests may be directed to Michael Arnold, Senior
Executive Vice President - Marketing, Investor and Labor Relations, AFL-CIO
Housing Investment Trust, 1717 K Street, N.W., Suite 707, Washington, D.C.
20036.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Trust's annual Meeting, Participants will act upon the matters
outlined in the accompanying notice of Meeting, including (i) the reelection
of a Chairman of the Board of Trustees, (ii) the reelection and election of
Trustees, and (iii) ratification of the selection of the Trust's independent
accountants. In addition, the Trust's management will respond to questions
from Participants.
WHO IS ENTITLED TO VOTE?
The close of business on March 31, 2003 is the record date for the
determination of Participants entitled to notice of and to vote at the Meeting
and any adjournment(s) thereof (the "Record Date"). As of the Record Date,
there were 2,940,523.3122 Units of Participation of the Trust outstanding,
each Unit being entitled to one vote. No shares of any other class of
securities were outstanding as of that date.
Only Participants of record as of the close of business on the Record
Date will be entitled to vote at the Meeting.
WHO CAN ATTEND THE MEETING?
All Participants as of the Record Date, or their duly appointed proxies,
may attend the Meeting.
WHAT CONSTITUTES A QUORUM?
A quorum for the Meeting is the presence in person or by proxy of
Participants holding a majority of Units outstanding at the close of business
on the Record Date. As of the Record Date, 2,940,523.3122 Units of
Participation of the Trust were outstanding. Proxies received but marked as
abstentions will be included in the calculation of the number of Units
considered to be present at the Meeting.
1
HOW DO I VOTE?
By Mail: If the proxy card that is enclosed with this Proxy Statement is
-------
properly executed and returned, the Units of Participation it represents will
be voted at the Meeting in accordance with the instructions noted thereon. If
no direction is indicated, the proxy card will be voted in accordance with the
Trustees' recommendations set forth thereon.
By Facsimile: If the proxy card that is enclosed with this Proxy
------------
Statement is properly executed and returned via facsimile to (202)331-8190,
the Units of Participation it represents will be voted at the Meeting in
accordance with the instructions noted thereon. If no direction is indicated,
the proxy card will be voted in accordance with the Trustees' recommendations
set forth thereon.
By Internet: If the proxy card is properly voted through the Internet,
-----------
the Units of Participation it represents will be voted at the Meeting in
accordance with the instructions noted thereon. If no direction is indicated,
the proxy card will be voted in accordance with the Trustees' recommendations
set forth thereon.
To vote by proxy through the Internet:
1) Use a web browser to go to http://www.aflcio-hit.com/proxy
2) Enter the User Name* and Password* that are included with this
mailing.
*Please note that the User Name and Password are CASE-SENSITIVE.
Please type the User Name and Password into the appropriate screen
exactly as it is shown on the enclosure.
In Person: By attending the Meeting and voting your Units.
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CAN I CHANGE MY VOTE AFTER GIVING A PROXY?
Yes. Any Participant giving a Proxy may revoke it at any time before it
is exercised by giving written notice to the Trust bearing a date later than
the date of the Proxy, by submission of a later dated Proxy, or by voting in
person at the Meeting, which any Participant may do whether or not such
Participant has previously given a Proxy.
WHAT ARE THE BOARD OF TRUSTEES' RECOMMENDATIONS?
Unless you give other instructions when you vote, the persons named as
proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Trustees. The Board's recommendation is set
forth together with the description of each item in this proxy statement. In
summary, the Board recommends a vote:
* for reelection of the nominated Chairman (see page 3);
* for reelection and election of the nominated Trustees (see page 3);
* for ratification of the selection of Ernst & Young, LLP as the
independent public accountants for the Trust's fiscal year ending
December 31, 2003 (see page 11).
With respect to any other matter that properly comes before the Meeting
or any adjournment or adjournments thereof, the proxy holders will vote as
recommended by the Board of Trustees or, if no recommendation is given, in
their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
As to Proposals I, II, and III, the vote required for approval will be an
affirmative vote of a majority of the Units represented in person or by proxy
at the Meeting. Each Unit is entitled to one vote. Abstentions will not be
included in the calculation of the number of Units voted affirmatively for a
proposal.
2
WHO IS MAKING THE SOLICITATION ON BEHALF OF THE TRUST?
The Proxy is being solicited by the Board of Trustees of the Trust
through the mail. The cost of solicitation will be paid by the Trust.
Further solicitation of proxies may be made by telephone or oral communication
with some Participants following the original solicitation. Any such further
solicitation will be made by Trustees or officers of the Trust who will not be
compensated therefor. The date on which proxy materials were first mailed to
Participants was May 7, 2003.
ELECTION OF TRUSTEES
PROPOSAL I: TO REELECT THE CHAIRMAN
PROPOSAL II: TO REELECT THREE (3) CLASS II UNION TRUSTEES AND ONE (1)
CLASS II MANAGEMENT TRUSTEE, AND TO ELECT ONE (1) CLASS II
MANAGEMENT TRUSTEE
Under the Trust's Declaration of Trust, the Board of Trustees may have up
to 25 Trustees. Up to 12 Trustees may be Union Trustees, up to 12 Trustees
may be Management Trustees, and one Trustee is to be the Chairman. The Board
of Trustees currently consists of 17 Trustees, 11 of whom are Union Trustees
(Chavez-Thompson, Flynn, Hanley, Hurt, Maddaloni, O'Connor, O'Sullivan, Stern,
Sullivan, Sweeney and Trumka), 5 of whom are Management Trustees (Fleischer,
Latimer, Spear, Stanley and Wiegert), and one of whom is the Chairman
(Ravitch). Proxies will not be voted for a greater number of persons than the
number of nominees named.
The Declaration of Trust divides the Union and Management Trustees into
three classes (each, a "Class"). Each Class is required to have, insofar as
the pool of Trustees permits, an equal number of Union and Management
Trustees. The term of each Class expires at the third annual meeting
following its election; the term of one Class expires each year. At each
annual meeting, the Participants elect a Chairman to serve until the next
annual meeting and such number of Trustees as is necessary to fill vacancies
in (i) the Class whose terms expire as of that meeting, and (ii) any other
Class. The terms of office of Trustees Fleischer, Flynn, O'Connor, Maddaloni,
Sullivan, Spear and Chairman Ravitch will expire on the day of the Meeting.
The principal occupations and business experience for the past five years of
the Class II Trustees standing for reelection are described below under
"Nominees for Reelection."
If a proxy in the enclosed form is received from a Participant, the Units
of Participation represented by such Proxy will be voted for the nominees
listed below (unless otherwise indicated on the proxy). Class II Trustees
will serve for three-year terms ending in 2006 and until their respective
successors are elected and qualify.
Although the Trust does not contemplate that any of the nominees will be
unavailable for election, if a vacancy in the slate of nominees should be
occasioned by death or other unexpected occurrence, it is currently intended
that the proxies will be voted for such other persons, if any, as the
Executive Committee may recommend.
NOMINEES FOR REELECTION AND ELECTION
The following information was furnished to the Trust by each nominee and
sets forth the name, age, principal occupation or employment of each nominee
and the period during which he or she has served as a Trustee of the Trust.
Each nominee has consented to be named in this Proxy Statement and to serve on
the Board of Trustees if elected.
3
Term of Office Principal Occupation/
Other Directorships
Name, Age, Address Position Held and Length of Business Experience
Held By
with Trust Time Served During Past 5 Years
Trustee**
- ------------------------------------------------------------------------------
- -------------------
Richard Ravitch Chairman Service Principal, Ravitch, Rice
None
610 5th Avenue Commenced 1991, & Co. LLC; formerly
Ste. 420 Term Expires Chairman, Aquarius
Management
New York, NY 10020 2003 Corporation (limited
profit
Age 69 housing project
management).
John J. Flynn Union Trustee Service President, International
Union None
1776 Eye Street, N.W. Commenced May of Bricklayers and
Allied Craft-
Washington, D.C. 20006 2000, Term workers (BAC); formerly
BAC
Age 67 Expires 2003 Secretary-Treasurer.
Stephen Frank Management Nominee Independent Consultant;
formerly None
9509 Lost Trail Way Trustee Vice-President and Chief
Financial
Potomac, MD 20854 Officer, The Small
Business
Age 63 Funding Corporation.
Jeremiah O'Connor Union Trustee Service International
Secretary-Treasurer, None
1125 15th Street, N.W. Commenced April International
Brotherhood of Elec-
Washington, D.C. 20005 2001, Term trical Workers (IBEW);
formerly
Age 67 Expires 2003 International Vice
President,
6th District, IBEW.
Marlyn J. Spear, CFA Management Service Chief Investment
Officer, Building None
500 Elm Grove Road Trustee Commenced March Trades United Pension
Trust Fund,
Elm Grove, WI 53122 1995, Term Milwaukee, WI.
Age 48 Expires 2003
Edward C. Sullivan Union Trustee Service President, Building and
Construc- None
815 16th Street, N.W. Commenced May tion Trades Department,
AFL-CIO;
Suite 600 2000, Term formerly, General
President,
Washington, D.C. 20006 Expires 2003 International Union of
Elevator
Age 58 Constructors.
- -------------------------
** Disclosure is limited to directorships in a corporation or trust having
securities registered pursuant to Section 12 of the Securities Exchange Act
of 1934, as
amended, or subject to the requirements of Section 15(d) of such Act, or a
company registered
as an investment company under the Investment Company Act of 1940, as
amended.
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE REELECTION
AND ELECTION, AS APPLICABLE, OF THE NOMINATED CHAIRMAN AND CLASS II TRUSTEES.
INCUMBENT TRUSTEES
The following incumbent Trustees will continue in office in accordance
with the Trust's Declaration of Trust, and are expected to stand for
reelection at subsequent annual meetings of Participants.
4
Term of Office Principal Occupation/
Other Directorships
Name, Age, Address Position Held and Length of Business Experience
Held By
with Trust Time Served During Past 5 Years
Trustee**
- ------------------------------------------------------------------------------
- -------------------
Linda Chavez-Thompson Union Trustee Service Executive Vice
President, None
815 16th Street, N.W. Commenced May AFL-CIO.
Washington, D.C. 20006 1996, Term
Age 58 Expires 2005
Francis X. Hanley Union Trustee Service General President,
International None
1125 17th Street, N.W. Commenced March Union of Operating
Washington, D.C. 20036 1990, Term Engineers.
Age 72 Expires 2005
Frank Hurt Union Trustee Service President, Bakery,
Confectionery None
10401 Connecticut Avenue Commenced March & Tobacco Workers and
Grain
Kensington, MD 20895 1993, Term Millers International
Union.
Age 64 Expires 2004
Terence M. O'Sullivan Union Trustee Service General President,
Laborers' None
905 16th Street, N.W. Commenced May International Union of
North
Washington, D.C. 20006 2000, Term America (LIUNA);
formerly,
Age 47 Expires 2004 Vice President,
Mid-Atlantic
Regional Manager and
Assistant
to the General
President, LIUNA.
Andrew Stern Union Trustee Service President, Service
Employees None
1313 L Street, N.W. Commenced April International Union,
AFL-CIO.
Washington, D.C. 20005 1998, Term
Age 52 Expires 2005
John J. Sweeney Union Trustee Service President, AFL-CIO.
None
815 16th Street, N.W. Commenced April
Washington, D.C. 20006 1981, Term
Age 69 Expires 2004
Richard L. Trumka Union Trustee Service Secretary-Treasurer,
AFL-CIO. None
815 16th Street, N.W. Commenced December
Washington, D.C. 20006 1995, Term
Age 53 Expires 2005
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** Disclosure is limited to directorships in a corporation or trust having
securities registered pursuant to Section 12 of the Securities Exchange Act
of 1934, as
amended, or subject to the requirements of Section 15(d) of such Act, or a
company registered
as an investment company under the Investment Company Act of 1940, as
amended.
5
Term of Office Principal Occupation/
Other Directorships
Name, Age, Address Position Held and Length of Business Experience
Held By
with Trust Time Served During Past 5 Years
Trustee**
- ------------------------------------------------------------------------------
- -------------------
George Latimer Management Service Distinguished Visiting
Professor None
1600 Grand Avenue Trustee Commenced May of Urban Studies,
Macalester
St. Paul, MN 55105 1996, Term College; formerly,Chief
Execu-
Age 67 Expires 2005 tive Officer, National
Equity
Fund (a tax credit
investment
company).
Patricia F. Wiegert Management Service Administrator, Contra
None
1355 Willow Way, Trustee Commenced March Costa County Employee's
Suite 221 1995, Term Retirement Association.
Concord, CA 94520 Expires 2004
Age 56
Tony Stanley Management Service Executive Vice President
None
25250 Rockside Road Trustee Commenced and Director, TransCon
Cleveland, OH 44146 December 1983, Builders, Inc.
Age 69 Term Expires
2004
EXECUTIVE OFFICERS
All executive officers of the Trust are located at 1717 K Street, N.W.,
Suite 707, Washington, D.C. 20036. The Executive Officers of the Trust are
elected annually by the Board of Trustees to one-year terms that begin on
January 1 and expire on December 31, or until their respective successors are
appointed and qualify.** No executive officer of the Trust serves as a
trustee or director in any corporation or trust having securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or
subject to the requirements of Section 15(d) of such Act, or any company
registered as an investment company under the Investment Company Act. The
executive officers of the Trust are as follows:
Name & Age Current Position w/ Trust Previous Principal Occupations
over Past 5 Years
- ------------------------------------------------------------------------------
Stephen F. Coyle Chief Executive Officer Chief Executive Officer since 1992, AFL-CIO
Age 57 Housing Investment Trust
Michael M. Arnold Senior Executive Vice Executive Vice President-Marketing,
Age 63 President - Marketing, Investor and Labor Relations in 2001
Investor and Labor Relations and Director of Investor Relations from
since January 2002 1985-2000, AFL-CIO Housing Investment Trust.
Helen R. Kanovsky Chief Operating Officer; Executive Vice President -Finance and
Age 52 Acting Executive Vice Administration from 1999-2001, AFL-CIO Housing
President - Investments Investment Trust; Chief of Staff from 1998-1999
since January 2002 for U.S. Senator John F. Kerry; General Counsel
from 1995-1998, AFL-CIO Housing Investment
Trust.
Erica Khatchadourian Executive Vice President- Controller in 2001, Chief of Staff from 1997-
Age 35 Finance and Administration 2000, AFL-CIO Housing Investment Trust.
since January 2002
- ------------------------
* In February 2003, Patton H. Roark resigned from his position as Executive Vice-President -
Investments/Senior Portfolio Manager. Helen Kanovsky has been appointed as Acting Executive
Vice President - Investments.
6
Name & Age Current Position w/ Trust Previous Principal Occupations
over Past 5 Years
- ------------------------------------------------------------------------------
Walter Kamiat General Counsel General Counsel, AFL-CIO Investment Trust
Age 48 since January 2002 Corporation from 1999-2001; Senior Counsel and
Special Assistant to the CEO from 1997-2001,
AFL-CIO Housing Investment Trust.
Stephanie Wiggins Chief Investment Officer- Director, Fannie Mae Production from 2000-2001,
Age 37 Multifamily Finance AFL-CIO Housing Investment Trust;
since January 2002 Director, Prudential Mortgage Capital Company;
Vice President / Multifamily Transaction
Manager, WMF Capital Corporation.
Carol Nixon Chief Investment Officer - Director of Affordable Housing Finance in
Age 40 Homeownership Finance 2002, Director of Public Finance from 1999-
since January 2002 2002, Senior Investment Officer in 1999,
AFL-CIO Housing Investment Trust; Vice
President - Community Development Division,
Bank of America.
ORGANIZATION OF BOARD OF TRUSTEES
Under the terms of the Declaration of Trust, the Board of Trustees of the
Trust has overall responsibility for the management and policies of the Trust.
Prior to the meeting of the Board of Trustees on April 23, 2003 (the "April
Meeting"), the Board of Trustees maintained three committees: the Executive
Committee, the Legal and Audit Committee and the Committee of the Whole. At
the April Meeting, the Board of Trustees adopted a written charter for a newly
formulated Audit Committee that will replace the current Legal and Audit
Committee.
The Executive Committee is currently composed of Chairman Ravitch, who
serves as chairman of the Committee, Management Trustee Stanley and Union
Trustee Sweeney. The Executive Committee has all the authority of the Board
of Trustees when the Board is not in session and met six times during 2002.
The Executive Committee also functions as a nominating committee, recommending
candidates for election to the Board of Trustees. In such capacity, it will
consider nominees recommended by Participants. The Trust has not established
any formal procedures to be followed in submitting recommendations.
The Committee of the Whole monitors the Trust's investment practices and
policies, reviews proposed changes thereto, considers new investment practices
and policies and oversees the marketing policies and strategies of the Trust.
This Committee is currently composed of all Trustees.
Prior to the April Meeting, the Legal and Audit Committee monitored the
legal and accounting practices and performance of the Trust's staff and of its
counsel and independent public accountants. The Committee was composed of
Union Trustees Hurt, O'Sullivan and Trumka, and Management Trustees Latimer,
Stanley and Wiegert. The members of the newly formed Audit Committee will be
selected following the election of Trustees at the Meeting. Although the new
Audit Committee will operate under a written charter adopted by the Board of
Trustees, it has not been given the authority to select independent public
accountants for the Trust without ratification by the Participants.
Accordingly, the Board of Trustees' selection of Ernst & Young, LLP as
independent public accountants for the Trust's 2003 fiscal year is being
submitted to the Participants for ratification. Following the annual audit,
the Legal and Audit Committee met with the independent public accountants to
review the audit outside the presence of Trust management. Pursuant to its
charter, the new Audit Committee will meet with the independent public
accountants to review the audit outside the presence of Trust management.
No committee functions as a compensation committee as such. The
Executive Committee, however, does make recommendations to the Board of
Trustees concerning compensation payable to Trustees acting in their
capacities as trustees, and compensation payable to executive officers. See
"COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS".
The Board of Trustees and the Committee of the Whole each met twice
during the Trust's fiscal year ended December 31, 2002. The Legal and Audit
Committee met three times during the Trust's fiscal year ended December 31,
2002. Trustees Hanley, Hurt, Maddaloni, Monroe, O'Sullivan, Stern, Sullivan
and Trumka, and
7
former Trustee Monroe attended fewer than 75 percent of the aggregate of the
total number of Board of Trustees meetings and total number of meetings of all
committees of which they were members during the 2002 fiscal year.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
During the fiscal year ended December 31, 2002, the Chairman received an
annual fee of $10,000. The Trust paid each Management Trustee who did not
waive such fee $500 per day for attendance at Board of Trustees meetings and
committee meetings. The Trust paid no fee to any Union Trustee. The
aggregate compensation paid to Trustees in the year ended December 31, 2002
was $19,000. The Trust reimbursed all Trustees for out-of-pocket expenses
incurred in attending Board of Trustees and committee meetings.
During the fiscal year ended December 31, 2002, the Trust employed
Stephen Coyle as Chief Executive Officer pursuant to an employment agreement.
During that period, Mr. Coyle's compensation from the Trust was $209,355 in
salary and cash compensation, $91,916 of deferred compensation and interest on
previously deferred compensation received in lieu of participation in the
Retirement Plan, and $1,875 in matching funds under the AFL-CIO Housing
Investment Trust 401(k) Retirement Plan.
2002 COMPENSATION TABLE
The following table sets forth the aggregate compensation, including any
previously deferred compensation, paid during the 2002 fiscal year to each of
the three highest paid officers of the Trust and to all Trustees of the Trust.
As the Trust is a single, self-managed fund, its staff includes more than 55
employees. Therefore, in addition to those individuals identified in the table
below, the Trust had 29 other employees who earned aggregate compensation
exceeding $60,000 during the 2002 fiscal year.
PENSION ESTIMATED TOTAL
OR RETIREMENT ANNUAL
COMPENSATION
BENEFITS BENEFITS FROM
TRUST
AGGREGATE ACCRUED AS UPON PAID TO
NAME OF PERSON, COMPENSATION PART OF TRUST RETIREMENT TRUSTEES
POSITION FROM TRUST EXPENSES <F1>
- ------------------------------------------------------------------------------
- ---
Stephen Coyle<F2>
Chief Executive Cannot
Officer $209,355 $91,916 be determined Not
applicable
Helen R. Kanovsky<F3> 179,899 17,887 31,638 Not
applicable
Chief Operating
Officer
Patton H. Roark, Jr., CFA<F4> 200,010 20,330 44,024 Not
applicable
formerly, Executive
Vice President -
Investments and
Portfolio Manager
Richard Ravitch, 10,000 0 0 $10,000
Chairman
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<F1> The estimated annual benefits payable upon retirement to the executive
officers of the Trust, other than Mr. Coyle who does not participate in
the
Retirement Plan, are determined primarily by a formula based on average
final compensation and years of service. See "THE RETIREMENT PLAN".
<F2> Aggregate Compensation includes $6,825 of deferred compensation in 2002
under the 401(k) Plan, and excludes compensation deferred in lieu of
participation in the Retirement Plan and interest thereon. Pension or
Retirement Benefits as Part of Trust Expenses includes $1,875 of matching
funds paid into the 401(k) Plan and $91,916 of deferred compensation in
lieu of participation in the Retirement Plan. The total amount deferred
by Mr. Coyle through December 31, 2002 in lieu of participation in the
Retirement Plan, including interest, is $723,066 and the total amount
deferred under the 401(k) Plan through December 31, 2002, including
interest and Trust matching, is $58,672.
<F3> Aggregate Compensation includes $10,135 of deferred compensation in 2002
under the 401(k) Plan, and excludes amounts contributed to the Retirement
Plan on Ms. Kanovsky's behalf. Pension or Retirement Benefits as Part of
Trust Expenses includes $2,125 of matching funds paid into the 401(k)
Plan
and $17,887 contributed to the Retirement Plan in 2002. The total amount
deferred by Ms. Kanovsky as of December 31, 2002 under the 401(k) Plan,
including interest and Trust matching, is $23,073.
<F4> In February 2003, Patton H. Roark resigned from his position as Executive
Vice President - Investments/Senior Portfolio Manager. Aggregate
Compensation includes $8,060 of deferred compensation in 2002 under the
401(k) Plan, and excludes amounts contributed to the Retirement Plan on
Mr. Roark's behalf. Pension or Retirement Benefits as Part of Trust
Expenses includes $2,500 of matching funds paid into the 401(k) Plan and
$20,330 contributed to the Retirement Plan in 2002. The total amount
deferred by Mr. Roark as of December 31, 2002 under the 401(k) Plan,
including interest and Trust matching, is $32,971.
8
Linda Chavez-Thompson,
Union Trustee 0 0 0 0
John J. Flynn,
Union Trustee 0 0 0 0
Francis X. Hanley,
Union Trustee 0 0 0 0
Frank Hurt,
Union Trustee 0 0 0 0
Martin J. Maddaloni,
Union Trustee 0 0 0 0
Michael E. Monroe,
Union Trustee* 0 0 0 0
Jeremiah O'Connor,
Union Trustee 0 0 0 0
Terence M. O'Sullivan,
Union Trustee 0 0 0 0
Andrew Stern,
Union Trustee 0 0 0 0
Edward C. Sullivan,
Union Trustee 0 0 0 0
John Sweeney,
Union Trustee 0 0 0 0
Richard Trumka,
Union Trustee 0 0 0 0
Alfred J. Fleischer,
Management Trustee 1,000 0 0 1,000
Walter Kardy,
Management Trustee* 0 0 0 0
George Latimer,
Management Trustee 2,500 0 0 2,500
Marlyn J. Spear,
Management Trustee 1,500 0 0 1,500
Tony Stanley,
Management Trustee 4,000 0 0 4,000
Patricia F. Wiegert,
Management Trustee 0 0 0 0
-----------------------------------------------
* In April 2002, Trustee Kardy resigned and in April 2003, Trustee Monroe
resigned.
9
Prior to October 1, 1990, the Trust had not established or adopted any
bonus, profit sharing, pension, retirement, stock purchase or other
compensation or incentive plans for its officers and employees. Also prior to
October 1, 1990, personnel (other than the Chief Executive Officer) were
provided pursuant to a Personnel Contract between the Trust and the AFL-CIO,
whereby the Trust reimbursed the AFL-CIO for the AFL-CIO's costs of employing
the personnel. While the Personnel Contract was in effect, the personnel
participated in the AFL-CIO Deferred Compensation Plan, a defined contribution
plan, and were subject to the AFL-CIO Staff Retirement Plan ("Retirement
Plan"), a defined benefit plan. Any amounts contributed by the AFL-CIO on
behalf of such personnel pursuant to the Retirement Plan were reimbursed by
the Trust pursuant to the Personnel Contract. The Trust adopted the
Retirement Plan for all of its employees except for its Chief Executive
Officer (who by the terms of the Retirement Plan is ineligible), effective as
of October 1, 1990. Effective October 1, 1996, the Trust adopted the AFL-CIO
Housing Investment Trust 401(k) Plan described below for all of its employees
including its Chief Executive Officer.
THE RETIREMENT PLAN
Under the Retirement Plan, contributions are based on an eligible
employee's base salary. The Internal Revenue Service also imposes an annual
maximum on the amount that can be counted in determining base salary, which
amount is currently $200,000 and was $170,000 in 2002. In general, rates are
determined actuarially every year. The Retirement Plan was funded by employer
contributions at rates of approximately 11.7% of eligible employees' base
salaries during the twelve months ended December 31, 2002. During 2002, the
annual base salaries for pension purposes Ms. Kanovsky, and Mr. Roark were
$179,856 and $173,753 respectively.
The Retirement Plan is open to employees of the AFL-CIO and other
participating employers that are approved by the Retirement Plan's board of
trustees and that make contributions to the Retirement Plan on their behalf.
Such employees become members of the Retirement Plan on their first day of
employment that they are scheduled to work at least 1,000 hours during the
next 12 consecutive months.
The Retirement Plan provides a normal retirement pension to eligible
employees for life, beginning at age 65 if the employee has at least three
years of credited service, beginning at age 60 if the employee has at least 10
years of credited service, or beginning at age 50 if the employee's age plus
years of credited service equals 80 or more. The amount of this pension
depends on salary and years of credited service at retirement. Eligible
employees will receive 3.00 percent of the average of their highest three
years' earnings, subject to the Internal Revenue Service limit noted above
("Final Average Salary") for each year of credited service up to 25 years, and
0.5% of their Final Average Salary of each year of credited service over 25
years. Eligible employees must have at least three years of service to retire
and receive a monthly pension. Eligible employees generally earn credited
service toward their pension for each year that they work for a participating
employer.
Set forth below is a table showing estimated annual benefits payable upon
retirement in specified compensation and years of service classifications. As
of the date hereof , Ms. Kanovsky has approximately 6 credited years of
service, under the Retirement Plan.
Years of Service
----------------
Final
Average Salary<F5> 15<F6> 20<F6> 25<F6> 30<F7> 35<F7>
- ------------------- -- -- -- -- --
$ 100,000 $ 45,000 $ 60,000 $ 75,000 $ 77,500 $ 80,000
150,000 67,500 90,000 112,500 116,250 120,000
170,000 76,500 102,000 127,500 131,750 136,000
THE 401(K) PLAN
Under the AFL-CIO Housing Investment Trust 401(k) Plan, an eligible
employee may designate to set aside up to 100 percent of his or her total
compensation, up to a maximum of $12,000 in 2003 (or up to $14,000 for
eligible employees over the age of 50). In 2003, the Trust will match
dollar-for-dollar the first $2,700 contributed. The amount set aside by an
eligible employee and the amount of the Trust's matching contribution, if any,
will be deposited in a trust account in the employee's name. Every employee
of the Trust is eligible to participate in the
- -----------------------
<F5> The Internal Revenue Code limits the permissible benefit payments
that may be paid under the Retirement Plan. Consequently, the amounts of
retirement benefits that actually may be paid to individual employees may
be significantly lower than as shown, depending on several factors,
including but not limited to the employee's years of service, level of
compensation, and actual year of retirement.
<F6> 3.00 percent per year up to 25 years.
<F7> 0.5 percent per year over 25 years.
10
401(k) Plan provided such employee has reached the age of 21 and is not a
nonresident alien. An eligible employee may enroll in the 401(k) Plan every
January 1st and July 1st of a given year.
When a participating employee terminates his or her employment, retires
or becomes disabled, the employee will be able to receive as a lump sum
payment the salary reduction amounts that were contributed to the trust
account on the employee's behalf, the additional amounts that the Trust
contributed to the trust account on the employee's behalf, plus income earned
(or less losses incurred) as a result of investment of these contributions
(less the employee's allocated share of expenses).
If the employee continues to work for the Trust, the employee cannot
withdraw these amounts unless the employee has a financial hardship. A
financial hardship is an immediate and heavy financial need for which the
employee has no other available resources, and includes medical expenses, the
purchase of a primary residence, the payment of tuition and related
educational fees, funeral expenses and the need to prevent eviction from, or
foreclosure of the mortgage of, the employee's primary residence. The
employee will be required to present evidence of the financial hardship and
upon submission of such evidence may be entitled to withdraw an amount, up to
the balance in the employee's account, to meet the immediate financial need.
The amount in an employee's account must be distributed to the employee
in one lump sum or in periodic installments beginning April 1st of the year
following the year in which the employee reaches age 70 1/2. Additionally,
these amounts must be distributed within a reasonable time following the
termination of the 401(k) Plan or the termination of the employee's
employment. An employee will be entitled to receive a distribution of the
amounts in their account upon the employee's attainment of age 65. A
participating employee may borrow from his or her account subject to certain
prescribed limitations.
The following table sets forth the amounts paid or distributed pursuant
to the 401(k) Plan in 2002 to the executive officers listed in the
Compensation Table above, and the amounts deferred and paid as part of Trust
expenses, pursuant to the 401(k) Plan for the accounts of such individuals
during 2002, the distribution or unconditional vesting of which are not
subject to future events.
Amount
Deferred From
Amount Paid or Trust Aggregate Employer
Name of Individual Distributed Compensation Matching
------------------ -------------- -------- ---------
Stephen Coyle $0 $ 6,825 $1,875
Helen R. Kanovsky 0 10,135 2,125
Patton H. Roark, Jr. 0 8,060 2,500
DESIGNATION OF ACCOUNTANTS
PROPOSAL III: TO RATIFY THE SELECTION OF ERNST & YOUNG, LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS
The Participants are requested to ratify the Board of Trustees' selection
of Ernst & Young, LLP as the independent public accountants for the Trust for
the current fiscal year. Representatives of Ernst & Young, LLP are not
expected to be present at the Meeting and thus will not have an opportunity to
make a statement or be available to respond to questions.
FORMER ACCOUNTANTS
Arthur Andersen, LLP (the "Former Accountants") were the independent
public accountants for the Trust for the fiscal year 2001. The Former
Accountants declined to submit a proposal to serve as the Trust's independent
11
public accountants for the fiscal year 2002. Upon a recommendation of the
Trust's Legal and Audit Committee, the Trustees at their meeting, held on
April 24, 2002, voted to select Ernst & Young, LLP as the Trust's independent
public accountants for the 2002 fiscal year. Such selection was ratified by
the Participants at the May 29, 2002 Annual Meeting.
None of the Former Accountants' reports on the Trust's financial
statements contained an adverse opinion, disclaimer of opinion, or a modified
or qualified opinion. Furthermore, there were no disagreements with the Former
Accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure; there were no
disagreements with the Former Accountants with respect to internal controls
necessary for the Trust to develop reliable financial statements; the Former
Accountants have not advised the Trust of any material matters with respect to
the Trust's reports or financial statements or of information that had come to
the Former Accountants' attention that had led them to no longer be able to
rely on the management's representations, that made them unwilling to be
associated with financial statements prepared by management, that led them to
advise the Trust of the need to expand the scope of its audit or that led them
to question the fairness or reliability of reports or financial statements.
Ernst & Young, LLP was not consulted on any matter during 2001 on either the
application of accounting principles to a specified transaction or an audit
opinion, or any matter on which there was a disagreement with the Former
Accountants.
AUDIT FEES
The aggregate fees billed for professional services rendered by Ernst
&Young, LLP for the audit of the Trust's financial statements for the fiscal
year ended December 31, 2002 were $197,449. The aggregate fees billed for
professional services rendered by the Former Accountants for the audit of the
Trust's financial statements for the fiscal year ended December 31, 2001 were
$100,000.
TAX FEES
The aggregate fees billed for professional services rendered by Ernst
&Young, LLP for preparation of tax returns for the fiscal year ended December
31, 2002 were $12,823. The aggregate fees billed for professional services
rendered by the Former Accountants for preparation of tax returns for the
fiscal year ended December 31, 2001 were $15,000.
ALL OTHER FEES
In 2002, Ernst & Young, LLP provided Association for Investment
Management and Research (AIMR) compliance services. The aggregate fees billed
by Ernst & Young, LLP in 2002 for these services were $6,133. In 2001, the
Former Accountants provided Association for Investment Management and Research
(AIMR) compliance services, and services to review the reimbursement charged
to the AFL-CIO Investment Trust Corporation. The aggregate fees billed by the
Former Accountants in 2001 for these services were $6,000.
PRE-APPROVAL POLICIES AND PROCEDURES
It was the policy and procedure of the Legal and Audit Committee, and
will be the policy and procedure of the Audit Committee, to pre-approve the
engagement of accountants to render each audit and non-audit service. The
engagement of Ernst & Young, LLP for the fiscal year 2002 was pre-approved by
the Legal and Audit Committee. In addition, the Legal and Audit Committee
determined that the provision of all non-audit services by Ernst & Young, LLP
for the fiscal year 2002 was not incompatible with maintaining the
independence of Ernst & Young, LLP. The engagement of the Former Accountants
for the fiscal year 2001 was pre-approved by the Legal and Audit Committee.
In addition, the Legal and Audit Committee determined that the provision of
all non-audit services by the Former Accountants for the fiscal year 2001 was
not incompatible with maintaining the independence of the Former Accountants.
THE BOARD OF TRUSTEES RECOMMENDS THAT PARTICIPANTS VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF ERNST & YOUNG, LLP AS THE TRUST'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 2003.
12
PROPOSALS FOR 2004 ANNUAL MEETING OF PARTICIPANTS
Participants who wish to make a proposal to be included in the Trust's
proxy statement and form of proxy for the Trust's 2004 annual meeting of
Participants (expected to be held in May 2004) must cause such proposal to be
received by the Trust at its principal office not later than December 15,
2003.
OTHER MATTERS
The Trust currently has no independent investment adviser other than
Wellington Management Company LLP. Wellington Management Company is a
Massachusetts limited liability partnership and a registered investment
advisor. Its principal offices are located at 75 State Street, Boston,
Massachusetts 02109. Investment decisions with respect to Trust assets other
than those subject to the Investment Advisory Agreement with Wellington
Management Company are made by the Chief Executive Officer, the Chief
Operating Officer, the Senior Executive Vice President - Marketing, Investor
and Labor Relations, the Executive Vice President - Investments and the
Executive Vice President - Finance and Administration of the Trust under the
supervision of the Executive Committee and, ultimately, the Board of Trustees.
Because the Chief Executive Officer, the Chief Operating Officer, the Senior
Executive Vice President - Marketing, Investor and Labor Relations, the
Executive Vice President - Investments and the Executive Vice President -
Finance and Administration are officers of the Trust and are not engaged in
the business of providing securities investment advice to others, they are not
registered as investment advisers under the Investment Advisers Act. For the
foregoing reasons, the Participants will not be asked at the Meeting to
approve any investment advisory contract relating to the Chief Executive
Officer, the Chief Operating Officer, the Senior Executive Vice President -
Marketing, Investor and Labor Relations, the Executive Vice President-
Investments or the Executive Vice President - Finance and Administration.
At the date of this Proxy Statement, the Trustees know of no other
matters that may come before the Meeting. If any other matter properly comes
before the Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the Units represented by such Proxy in accordance with
their best judgment.
Participants who are unable to attend the Meeting in person are urged to
forward their Proxies without delay. A prompt response will be appreciated.
By Order of the Board of Trustees
STEPHEN COYLE
Chief Executive Officer
13