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MIN UTES OF Til E

PA C E I NDUST RY NI ON- M ANA GEM ENT PENSlON FUND
B O ARD O F TR ST EES l\1EI~TING

April 29 - May 1, 2001

PRESEi'lT :

Labor Trustees Ma n a gemen t T r ustees

Boyd Young, Chairman Gayle Sparapani, S ecret ary

Gary B. Cook Susan Stau duh ar
Roge r Heiser
Donald L. Langham

ALSO PRESENT:

Maria F. Wieck, Administrative Manager

DOll Wilkes, Director, Pensions and Iusurance
Richard E. Nikodym, Financial Officer
Darrin Owens, The Segal Company
Virginia IVl cG in ley, Th e Se gal Company
Barry S. Slevin, Slevin & Hart., P.C.

The meeting was hel d in San An tonio, Texa s.

Minutes.

Upo n a motion duly made and seconde d, it \V a unanimous y

RESOLVED, tha t the m inutes o f the October 5 , 20 00 o ard o f T rus tees '
meeting. wit h th e additi on o f identi fication o f the Blue Ridge parti c ipat in g
faci lities, are ap pr oved.

Chairman .

T he C hairman noted tha t in the past he had ex pressed his concern about the growt h of the
Fun d. r-I e rev iewed with the Bo ard the new part icipat ing groups an d num ber o f part icip ant s and
co mplim ented the Fund O ffice and Mr. Wilkes on their efforts and the results thu s far . He noted
th at the Bo ar d needed to co n tinue to explore w ays to increase part icipa tio n.

GOVERNMENT
EXHIBIT

GE-20
 Counsel.

Mr. Slevin reviewed with the Board co unsel's April 21, 200] repo rt. In the context of tile
d iscussio n regard ing the possib le crea tion of a 40 I(h) account for retiree health benefits, it was
agreed that the Trustees would be provided wi th financi a l inform atio n relatin g to the proj ected
val ue of fut ur e benefits of the Potlatch group und er co nsideration, while co unsel goes forw ard
with a private letter ruling reques t. Up on a motion duly mad e and seconded, it was unanimo usly

RESOLVED, that coun sel' s report is accepted and the Board adopts the
recommend ations therein .

The Board adjourned and resumed the meeting on the fo llow ing day.
Independent Fiducial'" Services.

Frank Lilly and Ed Patchett attended the meet ing on beh alf of lFS. Mr. Lilly directed the
Trus tees ' attentio n to the meeting pr esentati on book and hi ghli ghted the agen da items he and Mr.
Patchett intended to cover at the me eting. Mr. Lill y said IFS would first present its Execu tive
Summary " F lash" Performance R eports through March 200 I since in form atio n w as avai lable
and would also highlight performance fo r the period ended -ebn uu)' 2001.

First, Mr. Lilly then revi ew ed the Flash Performance Report for the Fun d through Ma rch
31 ,2001, noting that the total Fund's equity man agers in total w ere do wn -5.3% du ring the
month of M arch , a period of very high vol atility in the equity markets. By com parison, the
Fu nd ' s equiry po licy benchmark, the W ilshir e 50 00 Index, declined 6.7% o ver the sa me period.
Mr. Lill y noted that all of the Fund' s equity managers posted neg ative returns over the month.
Mr. Lilly then said the Fund ' s fixed income managers pe rformed well over the month of March,
co nsistent with the per form ance o f the Fund's fixe d income po licy benchm ark. He then
indica ted that hi. disc ussion wo uld focus on the one-year period end ed March .

For the one-year ended March , M r. Lilly said the Fund ' s equity manager po. ed a - 10.2%
return. co m pared to a - 24.8% return for the Wilshire 5000 Index. Mr. Lill y sai d in general , all of
the Fun d ' s equity managers perform ed we ll relative to their as sign ed benchmarks, but that equi ty
returns acro ss many eq uity styles were sharp ly negative for the one-yea r period. M r. Li lly
reported that Highland Capital returned -6.3% for the pe riod compared to its benchmark, the
S&P 500 Index , which returned - 2 1.7%. Mr. Lilly said IC C Capital perfo rmed very well during
this volatile period, returning 9.1% compared to its benchmark, the Wilshire 5000 Index, which
returned - 24.5%. Shields/Alliance returned 5.6% over the one-year period, com pared to its
bench m ark, the S&P Barra Value index, which declined 1.0% . Finally, 1r. Li lly said W right
Inv estors returned -25.5% [or the one- year period somewhat behind its S&P 50 0 Inde x
benchmark.

WitJ1 regard to the Fund's fixed income managers, Me Lilly said performance was
sh arply po sitive, perform ing as one woul d hope du ring a period ofhi gb equiry market volatili ty.
As a gro u p, th e fix ed income managers returned 12.3% fo r [he one-year period , compared to a
12.5% return for the Fund' s fixed income po licy index , th e Leh m an Aggr egate Index. Mr. Lilly
repo rted that the Bank o f New York and Weaver Bark 'dal e retu rned 11.4% and 12.YYo
respectively, over the one-yea r period, somewhat below the Lehman Aggregate Index re turn .
Mr. Lilly said that Highland C apital and Security Asset Manageme nt bo th ou tperformed the
Lehman Aggregate Index returning 12.8% and 13.6%, respectively, over the on -year period .

Next, Mr. Lilly highlighted the F lash Perform ance Re port thro ugh February 200 1.
ind icat ing the Fund ' eq uity com posi te return ed 5.2% for the one-year perio d, well ahead of the
Fund ' s Equity Policy Index, the Wilshire 5000 Index, which dec lined 14.5% . M r. Lilly also
re port ed that the Fu nd' s fixed incom e composite retu rned 13.6% for the one-year period as
com pared to the Fund ' s Fixed Inco me Policy Index , the Lehman Aggregate In dex , wh ich
returned 13.4%. 1\1r. Lilly said all of the Fund 's investment managers performe d either
consistent with or ahead of their respective performance benchm arks ov er the one-year period
ended -cbruary 200 1.

Thereafter, Mr. Patchett reviewed lFS' Performance Report which contained peer
uni verse comparisons, for the period ended Decem ber 31, 2000. Mr. Patchett said such un iverse
inform ation is norm ally available after six weeks followi ng each ca lendar quarter end and was
not yet availabIe for the first quarte r f 200 1.

Mr. Patchett dir ected the Tru stees ' atte ntion to that port ion o f the repo rt that com pared
the Fund ' s per formance to that of other multiernployer defined benefi t plans and reported that he
FW1d ranked at or above the un ive rse median over the pas t year, and on an annualized as is
going back six years. Mr. Patchett also said perform ance was ahead o f the Fund Policy Index for
the year and on an annuali zed bas is for the pas t three years. As compared to the uni verse of
corporate defined benefit plan s, Mr. P atchett reported the Fun d ranked within the top quartile
ov r the past year and was at about the med ian 0 11 an annualized basis over the pas t four years.

Mr. Patchett then report ed that the Fund 's equity composite, consisting of all equity
managers as a group, ranked above median over the past year as com pared to the un ive rse o f all
other equity portfol ios . On an annu alized basis over the past six years. Mr. Patchell said
perform ance was ahead o f the equity policy inde x and at about the un ivers e medi an.

Wit h regard to the Fun d ' s fixed incom e composite, consisting of all o f the Fun d 's fixed
income ma nagers, Mr. Patchett said performance was ahead o f the Lehman Aggregate policy
index ov er the past year and abov e the universe me dian . O n an an nualized basis over the past
thr ee and five years, M r. Patchett sa id perform ance was generally consistent with the policy
index but ranke d somewhat below media n.

Nex t, Mr. Patchett reported on the risk and return ran kin gs, peer uni verse com paris ons
and portfo lio characteristics for tile F und s equ ity ma nagers . Mr. Patchett said Highland Capital
demonstrat ed favor able risk/return charac teristics to r the five-year period ended December 3 1,
2000 while Shields/Alliance was clo se to the universe median. Mr. Patchett said Wright
Investors demon strated about median return volatility for the five-year period with below median
per formance. Mr. Pa tche tt said the Fund's other equity managers did no t yet hav e a five year
per formance his tory with the Fund and were not incl uded in the risk/ return analysis.
 Sh iclds!Alliau ce o

Nex t, Dick No lan and Aryeh G latter o f Shie lds!A lliance presente d to the Trustees a
re view o f the large ca p value equ ity acc ount th e firm manages o n beh alf oft he Fund . First , Mr.
o lan provid ed an overview of the firrn, its perso nnel and resources . He also reported that
Al liance acquired Sanford C. Bern stein d urin g the p ast year , no ting th at the inve stm en t di sc iplin e
the firm uses remains unchanged but is augm en ted by Bern ste in 's strong, fundam en ta l rese arch
capabilities . N xt, Mr. Iolan repon ed th at the acco unt increased 10 .7% sinc e fo r the year ended
Decem b er 2000 compared to an incre ase of 6 .0% for the S& P Barra V a lue Ind ex . For the first
qu art er 0 [200 I, M r. No lan repo rted the account declined 2. 1% com pared to a 6.5% d ecline in
he S&P Barr a \ alue Index.

Mr. G lan er then re view ed the investm ent philosophy an d proc ess by whi ch
Shie lds!A lliance manages the po rtfol io on be ha lf o f the Fund . T h erea fte r, M r. G larie r pro vided
his finn' s out loo k for the market. A ft er respon di ng to quest ion s p osed by th . Tru stees, M r.
G lauer and M r. io lan w ere thank ed for their presentatio n and excu sed from th e m eet ing .

Wrigh t In vcstors Service.

Next, Ke n Singer , D iane Timpany and Pat Pierce o f Wrig ht Inv esto rs S ervice presented
to the T ru stees a rev i ew o f the large ca p core eq ui ty account W rig ht m an ages on b eh a lf o f the
Fund . F irs t, M r. Singe r repo rt ed that the acc oun t d ecreased 8. 7% fo r th e year end ed December
2000 compared to a decrease o f 9 .1% fo r the S &P 500 Index. For th e first [W O m o nths o f2 001,
M r. Si nge r repo rted the ac cou nt decl ined 8.2% co mp ared to a 5.9% decl ine ill th e S& P 50 0
In dex . Mr. Singer ind ic at ed that the portfo lio h ad perfo rmed consisten t w ith the S,,"p 500 Index
since M s. Pierce assumed resp onsibil ity fo r th e account a fter the first qu arter o f 1999 , increasing
1.5% from M arch 3 1, 1999 through Febru ary 200 I compared to a de lin e o f 1.4% in th e S&P
500 Index ov er that same period .

T he rea fter, Ms . Pi erc e re viewed th e inv estm en t philoso ph y and process by w h ich Wrigh t
has bee n m anaging the account since she assum ed respo nsibility fo r the finn's large cap core
strateg y. Ms. P ierce sa id th e firm has becom e m uch more sensit ive to benchmark sector w e igh ts
and has so ught to m in imi ze sect or weigh t dev iations fro m the b enchm ar k in order to focus on
generating excess per fo rm ance thro ugh stock selectio n. Ms. Pierce then review ed the portfoli o
sector a llocati n . sector perfo rmance and po rtfoli o char acteristic s as o f December 200 0 . Ms.
P ierce then high lighted cert ain stoc ks th at per fo rm ed poorl y over th e first quarte r o f _0 l ,
incl ud ing C isco . Sun M i r systems an d Ado be, w hich co n tributed to the firm 's
underperformancc ye ar -to-date in 200 1. The T ru stees questioned Ms. Pierce concerning the
recently report ed tro ub le Ci sco ha encountered regarding alleged fin an cial repon ing
irregu lari ties and she disc ussed her o vera ll o pi nion of C isc o as a co m pany.

T h erea fter, the T ru stees asked the W rig ht representative ad di tional quest ions related to
the (i rrns organizatio na l structure and inv estment pe rformance. A fter respo nd ing to these items:
th e Trustees thanked M r. S inger, 1s. Pierce and M s. T im pany for the ir presen ta tio n an d excused
them from the m eet in g.
 Th ereafter, the Tru stees asked Mr. Lilly and M r. Patchell for IFS ' opi nion of Wrigh t and
their inves tment approac h and perform ance. Mr. Lilly and M r. Patch ett sai d that they be lieved
the addition o f Pat P ierce to th e team appeared to be a positive step as sh e has instilled an
additiona l level of discipline to the portfolio co nstruction process which, excep t for the past few
month s, appeared to have a some what favorable impact on performance. Hov..-e ver. when the
flTI11'S per form ance since 1999 is linked to pre- I 999 periods, Wrigh t's performa nce trail ed the
S&P 500 Index and ranked well below median in the firm 's peer universe.

Based on this, Mr. Lilly said IFS recomm ended that the Trus tees conside r reallocating
halfo f W right's account value to other ofthc Fund's equity managers and reconsider the firm' s
mandate at the next Tru stees' meeting, at which tim e the finn wou ld hav e a 2 11 yea -
perform ance reco rd under Ms . Pierce ' s direc tion. Upon further discussion o f this matter, the
Tru stee s directed IFS to analyze, 6:0111 a fee and equity style allocation perspective, real locating
the entire W right port folio , total ing approx imat ely $80 million, to other ex isting investment
managers.

Up on returning to the meeti ng after perform ing the rea llocat ion analys is, Mr. Lilly and
1r. Patchett said the Trustees could reallocate approximately $2 5 million each to Highland
Cap ita l and Shields/A lliance and app roxi mate ly S 15 each to ICC and Battcrymarch without
significantly a ltering the Fun d's overa.ll style exposures or ov erall equity manager fees .
Thereafter, the Trustees asked Mr. Lilly and Mr. Patchett to ana lyze the impac t, aga in from a
sty le and fee perspective, reallocating hal f o f the Wright portfolio value to Sh ields /Alliance and
ha lf to ICe. Upon performi ng the analysis, M r. Lilly and Mr. Patchett ind icated the overall Fund
eq uity style exp osure from this reallocatio n could result in somewhat of a "val ue" bias as
com pared to the W ilshire 5000 Po licy Index, and that equity manager fees wou ld decl ine by
approxima tely $7 0,000 per year given the low er ma rginal fee breakpoints , After discussion,
upo n a mo tion duly mad e and seconded, it was unanimously

RESOLVED, to term inate the accou nt managed by W right and to rea lloca te
half of the accou nt assets to lee and half to hields/Alliance,

M r. Lill y indicated that If' S could, if directed by the Trustees, ob tain asset transition
proposa ls fr om the Bank o f New York and Lynch, Jones & Ryan, for the assets in the W right
accou nt that neither ICC no r Shields/A lliance would like to receive in kind and to coordinate the
overall asset trans fer with the Fund office. A ftcr discussion, upon a motion duly made and
seconded , it was unani mously

RE SOLVED, to author ize IFS to obtain the two transition prop osa ls and to
present the results by co nfe rence ca ll w ith hairman Young and Sec retary
Sparupani who would then direct the selection of a tran ition serv ice provider.