ge-06 - paper workers board meeting minutes 0395

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MINUTES (. BOARD ~ TRUSTEES MEETING \

PAPER INDUSTRY UNION-MANAGEMENT PENSION FUNheld atTHE BREAKERS RESORTPALl\1::BEAcH,FLORIDAMARCH 20-23, 1995

r. CALL TO ORDER: ROLL CALLMr. WayneE. Glenn, Chairman, called the meeting to order at 8:50 a.m., on Monday, March 20,\995. The Chairman then called the roll,The Trustees present were:Messrs. Joe J. Bradshaw, Wayne E. Glenn, Fran Pothier, Joseph Russo', Mario Scarselletta, Ms.Gayle Sparapani and JimWright.Absent from the meeting:Mr. Daniel Girvan.Also present were:Mr. Frank Kelly. FundAdministrativeManager; Maria Wieck, Fund Financial Officer; SteveDohrmann, Fund Consultant; Messrs. Charles Maresca andMike Kaplan", of the Segal Company;Barry Slevin, Esq., of Slevin & Hart, P.c., Fund Counsel.'"Mike Kaplan was absent on March. 21. 1995.

IJ. MINUTES OF PRECEDING 1\fEETING.The Minutes of the meeting held on August 29-30, 1994, having been previously distributed, werereviewed by the Trustees .

Motion was made, seconded andunanimously adopted to approvethe minutes oftbe meeting heldon August 29-30, 1994.

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GOVERNMENTEXHIBITGE-6


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add some incremental returns, not put the Fund at risk. It was noted that a few ba nks hadsustained loses in their securities lend ing program . Some had made up the loses for the clients,other had not. It was noted that $200 million was the average exposure of the Fund in the lendingprogram . After considerable discussion on securitie s lending, the representatives of the bank wereexcused from the meeting. A synopsis of their investment perfoon ance is attached as Exhibit 1.

XX. WRIGHT NESTORS' SERVICEAt this time Messrs, Albert Meric, Ken. Singer and Joseph Bruno entered the meet ing. Th esegentlemen explained the investment services that their com pany could perform for PIUMJ>F.Wright has bee n in business for over 30 yea rs. It is a privately owned company, They onlyhandle bus iness investment management and research. They have a staff of 62 investmentprofessionals and 168 full- time employees. OVCI: 55% of their business is in Taft-Hartley funds .They currently manage $3.7 billion .. Th ey have 119 clients. $2 .3 billion is with Taft-Hartl eyfunds : They specialize in balanced accounts, equity or fixed income investments. They revieweda list ofmul ti-employer funds they handle .Their type of management experience provides dependence 01 \ a team approach . Their assetallocation is discussed at senior investment committee level They have a disciplined investmentprocess. They h-ave outstanding professionat teams for equity or fixed income management. Theycan allocate within limits set.by Ute Trustees. They can handle shifts in allocations without havingto shift assets among managers. Their long- term track record is excellent in both equity, fixed orbalanced. Their management philosophy provides for a dis ciplined- and dependable methodology.They only invest in top-quality companies. They also feel that value is.outstanding for theirquality and g rowth style: A rev iew ofWright's investment management results is attached to theminutes as Exhibit J. After their presentation they were excused from the meeting.

XXI. PROVIDENT INVESTMENT COUNSELAt this timeMs. Paula Ponsetto and Mr. Thomas Condon entered the meeting. Therepresentatives of this fum explained Provident Investment Counsel was founded in 1951. Theyare located in Pasadena, California. They currently manage $14 billion in assets. They rep ortedthat they have an outstanding record- in the selection of high quality growth stocks. Theyreviewed a list of their clients, which range from Fortune 500 companies to Foundation,Endowment, Public Retirement Systems, rel igious affiliations and Taft-Hartley funds. Theirinvestment philosophy focuses on fundamental research, properly controlled, which adds value.They emphasize strong financial characteristics, which insure focus on growth and quality. Theirinvestment style is consistency to provide superior long-term investment results.They reviewed their portfolio review process, which provides fo r daily reports generated by online management information system, followed-up by a formal weekly review of performance and

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' .. J xxv. SHIELDS/ALLIANCE

At this t ime Messrs. Richard No lan and Frank Caruso entered the meeting. It was reported thatat the beginning of 1994 theymanaged a portfolio of $85 million invested in. fixed incomesecurities. At the Trustees instruction after the March 1994 meeting, they have slowly beenconverting the fixed income portfolio to an equity portfolio. Ai; of year end $37.3 million was inequities; $44.1 million in fixed income for a total of $82 .9 million. For the year the return was1.3% for the equity; fixed income -3.6% for a total return of -2.8% . It was noted" however, thatafter the first 2 months of the year, the equity portfolio was up 8.6%, and the fixed income sectorhad also made up most of its loses. 1994 was a very cautious year for investments, and theywereonly buying stocks on market weakness. They will continue to tr ansfer the po rtfoli.o in the futurefrom fixed income to an equity basis . As a growth investment manager, they are loo kingforearnings driven securities. A summary on their investments [o r fixed income and equities isattached as Exhibit M, In addition they reviewed th eir investments for the Defined ContributionProgram . The representatives of Shields/Alliance were excused from the meeting.

X,XV!. LEE . OBlNSON & STErnE ,The Trustees reviewed the investment performance o f-Lee. Robinson & Sterne since inception,and specifically their investmen t returns for the past few years . Th e Trustees felt there werebetter investment opportu nities ava ilable with other managers in view of the returns ofLee,Robinson & Steine. After a discussion:

Motion was made, seconded and unanimouslyapproved to terminate the services ofLee, Robinson& Steihe as an equi ty investment manager forPIU1vfPF irnrriediately.

The Trustees discussed how to distr ibute the assets from Lee Robinson & Steine, which amountto approximately $120 million. Trustees discussed a number ofways to handle this, I t wasdecided that all securities would be sold as soon as possible and' cash be transferred to thosemanagers chosen by the Trustees to 'manage additional assets. After consideration the Trusteesdecided to allocate assets in the following manner. Each manager listed will receive the followingnew money:

Lazard Freres Asset.Management - $30 millionCl Northern Trust S & P 500 Index Fund - $40 million9 Highland CapitalManagement - $20 million

The Trustees decided to hire Wright Investors' Service. This new firm to receive $20 million,subject to negotiation of a reduced. fee schedule.

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c The Trustees decided Seligman Henderson will con tinue to manage international investmentsand that they will receive an additional $10 million, subject to entering into an investmentmanagement agreement.

Motion was made, seconded and unanimouslyadopted approving the above actions.

Counsel was instructed to prepare new Investment Management Agreements for WrightI nvestors' and Seligman Henderson since they will no longer be connected with Lee; Robinson &St eine. When the portfolio ofLRS is sold, all assets are to be placed ill a short-term investmentfund with BONY until distribu tion. The Fund o ffice was instruc ted to sell the portfolio at thelowest tra nsaction cost available.

xxvn . ] \ i r O TRANSFERS-ASSETil l view of the realignment of the money managers, it was noted that the only transfer of assetsbe tween money managers will be as follows:o $480,000 from Weaver Barksdale to the Fund Administrative Account with BONY.e $720,000 from the Bank ofNew York to the Fund Administrative Account with BONY .All other tr ansfers VIilI be terminated as of this date.

XXVil l . SECURITIES LENDINGThe Trustees continued the discussion on securities lending with the Bank ofNew York.. Aftercareful consideration:

Motion was made, seconded and unanimouslyadopted to pu t a cap on the securities lendingprogram of $200 million at anyone time.

This matter will be discussed at the next meeting.

XXIx. NEXTMEETINGThe next meeting is scheduled for September 9 - 14, 1995 in Maui, Hawaii.

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ge-06 - paper workers board meeting minutes 0395

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