8/14/2019 GN-07 - Local 773 Board Meeting Minutes 0606

1/6

LOCAL 773 BENEFITS OFFICENortheastern New York District Council Pipefitters Welfare FundPlumbers & Pipefitters Local 773Annuity PlanPlumbers Local 773Pension Fund30 Bluebird RoadP.O. Box 1396South Glens Falls,NY 12803MINUTES OF LOCAL 773 PLUl\1BERS PENSION, WELFARE AND ANNUITY FUNDTRUSTEE MEETING HELD AT THE QUEENSBURY HOTEL IN GLENS FALLS, NEWYORKON ruNE 29. 2006AT 9:00 A.M.Present at the meetingwere the following Trustees:

UnionTrustees: Terry MonroeLarry BulmanMichael Salerno

Contractor Trusfees: Terry BulmanDavid CroninDa.niel MonroeAbsent: Robert BarodyEvan Myers Absent: Douglas BrockwayWilliam Gordon.Also, in attendance: Lawrence 1. Gonnelly, Fund Administrator

William Pozefsky, CounselMichael Chrys ofWachoviaSecuritiesThe meeting was called to order at 9:00 a.rn. Lawrence 1. Gonnelly acted as Chairman of themeeting and WiUiam Pozefsky as Secretary.

PRELlMlNARYMinutes, TheMinutes of the Regular Meeting of April 5, 2006 and the SpecialMeetingof June 1, 2006 were reviewed. As 00 quorum was as yet present, no vote co approve tbeMinutes was taken, and theMinutes will be voted upon at the next meeting.

INTERNATIONAL 'MANAGER SEARCH

1. Preliminary SummaryIn furtherance of the prior decision of the Trustees to hire an International InvestmentManager, Investment Consultant Michael Chrys informed the Trustees that three InternationalManagers were in attendance to make presentations. They were : Alliance Bernstein, WrightInvestors Service andHGK Asset Management, Inc.

GOVERNMENTEXH IB ITGN - 7

8/14/2019 GN-07 - Local 773 Board Meeting Minutes 0606

2/6

2. Alliance BernsteioJudy Eng, Manager , Client Relations, Taft-Hartley Group made the presentation onbehalf of her Company. She passed out copies of Alliance Bernstein's Booklet dated June 29,

2006, containing the fum' s agenda, reasons fo r international investing, philosophy and researchcapabilities and additional information. A copy of the Booklet is filed with cbese Minutes. Ms.Eng informed the Trustees that Alliance Bernstein, overall, had 20 l billion dollars in assetsunder investment and 1.7 billion dollars In assets under investment in their International ValueFund in which over 55 Taft-Hartley Funds participate. Ms. Eng pointed out that the Fundinvested only in developed countries and did not use American Depository Receipts (ADR's).The Company's objective is to earn a 3% premium over market cycles with a tracking error of500-700 basis points. Tbe Company uses Taft-Hartley guidelines (AFL-CIO Standards). Anycontract would be between OUI Fund and Alliance Bernstein, not its Delaware Trust Fund.Alliance Bernstein would accept Fiduciary SIaD..lS to our Fund.3. Wright Investors Service

Amit S. Khandwala, Executive Vice-President, CIa Equity Management and Kenneth H.Singer, Senior Vice-President. Institutional Sales and Service, made the presentation on behalf oftheir Company. They passed out the Wright Investors Service Booklet dated June 2006 withmaterial about the Company A copy of the Booklet is filed with these Minutes, They discussedthe Wright International CORE Fund witb 2.2 billion do lla rs in assets under management andmentioned that SO% of Wright's business is with Taft-Hartley Funds. Tbe Company focuses onstock selection, using a Quantitative Analysis. The CORE Fund has 50% in growth and 50% invalue, witb a tracking error 0[200 basis points. The Company rebalances monthly and invests inmostly developed markets with J% in emerging market exposure. Two types of investrnents areoffered: one is a broad universe of international blue chip securities; the second is an ADRuniverse with individual securities. Wriglu also offers what they call "Labor FriendlyScreening." The Compaoy's fee is 60 basis points using the Fuod's existing custodian. Wright'sregular fee schedule would be 70 basis points on the first 5 million dollars of assets.4. liCK Asset Management. Inc.

Martin J Maddaloni, Jr., Managing Director/Marketing & Client Services, made thepresentation on behalf of his Company. Mr. Maddaloni passed out his Company's Booklet datedJune 29,2006 containing an overview oftbe Firm, a discussion of the investment process, certainstatistics and performance information and disclosures. A copy oftbe Booklet is filed with theseMinutes. The HGK International Equity product has 3 billion dollars in assets undermanagement, with approximately 100 separate accounts. One Hundred and Sixty MillionDoU ars is invested in International Di scipline, Tbe Company's fee is either 100 basis points or80 basis points plus a performance percentage. Mr. Maddaloni explained that his Company usesa direct investment portfolio, oat ADR' 5, and that the account is oat CQ-m ingl ed. but is separatelymanaged using our Fund's guidelines, No specific style (value or growth) is followed. Theinvestments are in developed, not emerging markets, and ills Company follows A F L ~ C r Oguidelines for International Investing. Mr. Maddaloni informed the Trustees that a highlyqualified individuaJ named Richard Bruce does proprietary research for his Company.

2

8/14/2019 GN-07 - Local 773 Board Meeting Minutes 0606

3/6

5. Disc.ussion on ManagersUpon the conclusion of the presentations, the Trustees and Michaet Chrys discussed each

of them. Mr. Chrys confirmed that all three of the Managers have good performance and goodTaft-Hartley relationships. He pointed out that Alliance Bernstein's individual portfolio requiresa 25 million dollar investment (NWQ, for example, has a 10 million dollar individual portfoliorequirement) so that our Fund's assets would be co-mingled with other clients; that RichardBruce, the analyst for H G is very good, but that custody of assets would be a potential issuesince HGK uses sub-custody arrangements outside the U.S.; and that Wright lnvestors, the"vanilla" choice, uses ADR's but not all great companies have ADR's. After ao extensivediscussion, a quorum having been obtained,Trustee Larry Bulman made a MOTION, seconded by TrusteeMichael Salerno to hire Wright Investors and Invest 4 milliondollars in option Dumber 2 (tbe ADR Universe of individualsecurities); to take the 4 million dollars from assets managed byTCW, with the understanding that i f TCw does not have 4 milliondollars available, tbe balance should be taken from assets managedby NWQ; and to amend the Investment Guidelines to permit up to15% of the Fund assets in International Investments.

TheMonon passed unanimously.PENSION FUNDJ. Micbael Chrys discussed the fact that Wachovia had placed TCW on "watch" anddistributed two handouts frOID Wachovia's Managers Strategy Group outlining certain personneldepartures from TCW and under performance by TeW relating to allocation and volatility.After some further discussion, MI. Chrys recommended tbat the Trustees close out TCW.2. Rebalancing

Mr. Chrys informed the Trustees that bewould like to rebalance the value-growth ratio ofinvestments.~ ' E L F ARE FUNDI. Fund Manager Gonoelly reviewed with the Trustees the application of Gregory WBrown for a Health Care Expense Benefit reimbursement for the purchase of a treadmill for hiswife Suzanne. Mr. Gonnelly explained that Gregory Brown bad followed the requiredprocedures of obtaining a doctor's prescription, submitting a reimbursement request, first to BlueShield of Northeastern New York appealing Blue Shield's denial. and then submitting theappeal denial to tile WeIfare Fund, along with the receipt for the purchase and a signedCertification and Hold Harmless Agreement. Mr. Gonnelly also explained that the paperworkhad been approved by the Fund Actuary Stephen Thomas and tbe Fund Attorney WilliamPozefsky.

3

8/14/2019 GN-07 - Local 773 Board Meeting Minutes 0606

4/6

After discussion, Trustee Larry Bulman made a MOTION,seconded by Trustee David Cronin, to reimburse Gregory Brownthe sum of $695.37 for the purchase of the treadmill.The Motion passed unanimously .2. Future Health Care Expense Benefit Reimbursement Procedure

The Trustees discussed the procedure to be followed in the future to expedite Health CareAssistance Benefit Reimbursement, in view of the fact that the required steps for suchreimbursement have been well defined .Trustee Larry Bulman made a MOTION , seconded by TrusteeTerry Monroe, that in the future, i f the Fund Manager obtained alltbe necessary paperwork for payment of a HeaJth Care AssistanceBenefit and the benefit is approved by the Fund Actuary, then theFund Manager is authorized to approve the reimbursement andissue the reimbursement check without additiooal Trusteeapproval .TheMotion passed unanimously.

GENERAL

1. Robert Southard DiscussionRobert Southard of Allegiance Capital, Inc. discussed with the Trustees, a Dew Fund with.which he is associated. The Fund has been registered with the Securities and ExchangeCommission as a Registered Investment Advisor, and is owned equally by Allegiance Capitaland Treesdale Partners. The Fund is a "Fund of Funds" contain ing 22 separate Funds, onaverage, and is intended to be Don-correlated to stocks and non-correlated to the rest of the

Hedge Fund industry. The goal of the Fund will be to produce better returns than the bondmarket and to show positive returns most of tbe time. The Fund was started in May 2005 andwill not contain any Hedge Funds that are correlated to stocks. Mr. Southard further explainedthat he was not in a position to offer the Fuod to the Trustees at tills time but that his intentionwas to make them aware of this new product. The offering documents for the Fund arenumbered, as required by SCC regulations , and were not passed out at the meeting.NEXT MJETINGI. The Trustees set September 14, 2006 as the date for the next meeting, at a location to bedeterm..ined .2. Trustee Michael Salerno made a MOnON, seconded by Trustee Larry Bulman toadjourn tbe meeting. TheMotion passed unanimously and the meeting adjourned at 1:37 p.rn.

Yours Truly,Lawrence J. GonnellyFund Manager' .\Fil, SC\'C: 0 \ l n DiJb\L773 (5S)\I

8/14/2019 GN-07 - Local 773 Board Meeting Minutes 0606

5/6

Benefits Meeting June 29. 2006PENSION APPLICATrONS SINCE LAST MEETING 6/2912006,

I. Michael LaViollerte effective 9J1/2006 life form benefit $720.30 16.42years pensionservice MUB rate of $57. 722. Pending application from Gtlfld Fobare QDRODeathsI. Terry Waldron active age 46 spouse received Lump Sum Payment of $38,963.602. Robert PrattLife fOI1J1 benefit age 73

Total Plan: as of IJI12006 171 PensionersMonthJy payout is around $210,000 .00New BusinessWacbovlaWachovia CQntracts have not vet received onlv consulting agreement contractsOff sit e Back upsdone dailv remotely

I. received a portfolio monitoring report from LerachCoughlin, 2 class action suites fiJed againstHCA,Inc. holdings only (means that no purchases were made during the class period& PrxAR ourpension fund suffered a loss of$5,602. We will receive class action suite forms in the near future . Inbreif cascI . Draft copy of SPD for the Pension from Steve Thomas.2. Steve Thomas in Relative Value disclosure regulations (Steve Thomas to report)3. Mike Chrys guideline for investment policy forWright investors

OLD BUSINESSContractor in ArrearsI. Advance June& July2. Check Data base for aoy others

Page I of 2

8/14/2019 GN-07 - Local 773 Board Meeting Minutes 0606

6/6

WE.L FAREOpt outs since last meetingPending Dave Rozelle

NEW BllSI.I\'ESS[FEB conference se t up events for the 2 Trustees so far MassMutual & Wright IvestorsQLD BUSINESS

ANNUITY

ANNUITY ACTIVITlESAnnu ity Distributions since last meetingLIn-Service Benefits: Keith Purick $4,195.76. Michael Cameron $4,991.63,William Laybee SI3,418.ll2.Normal retirement: Gerald Jabaut $3,800, Peter Hughes $2,099.843. Termination benefit: Mark Maynard $1,314.11

NEW BUSINESSPlan Assets: $4,1 08,450.00 as of 612&/2006

Page 2 of 2