Thursday, March 28, 2002

Members of the Board of Trustees present at this meeting:

      Msgr. Robert L. McCarthy
      Mr. Brian Bass
      Mr. Robert H. Peterson
      Major David T. Pudlowski
      Mr. Thomas G. Wright

Other persons present:

      Ms. Margaret Hart-Mahon, Associate County Counselor
      Ms. Dana Hutchings, Retirement Plans Office
      Mr. Bruce Kendrick, Assistant Director of Administration
      Mr. Chris McCarthy, Assistant County Counselor
      Mr. Glenn Pearl, Chief Accounting Officer
      Mr. Dan George, J.H. Ellwood & Associates
      Mr. Roger Gould, J.H. Ellwood & Associates
      Ms. Kari Creighton, Summit Strategies, Inc
      Mr. Dan Holmes, Summit Strategies, Inc.
      Mr. Mike Cassagranda, Capital Guardian Trust
      Mr. William Carson, retired Police Captain
      Mr. Vince Manning, retired Police Officer
      Mr. Terry Whippler, retired Police Officer

                                     APPROVAL OF MINUTES
                                  BOARD OF TRUSTEES MEETING

ISSUE:             Presentation of the minutes of the Board of Trustees meeting of
                  February 28, 2002 and called for any additions, deletions or
                  corrections to the minutes.

DECISION:         A motion was made by Mr. Peterson, seconded by Major Pudlowski
                  and unanimously carried to approve the minutes of the Board of
                  Trustees meeting of February 28, 2002 as presented.


FOR APPROVAL: Requests for Retirement Benefits submitted by participants in the
                 Civilian Employees’ Retirement Plan.

DECISION:        There being no unusual circumstances regarding these requests, a
                 motion was made by Mr. Bass, seconded by Major Pudlowski and
                 unanimously carried to approve the Retirement Benefits for Civilian
                 Employees as presented.

FOR APPROVAL: Requests for Retirement Benefits submitted by participants in the
                 Police Officers’ Retirement Plan.

DECISION:        There being no unusual circumstances regarding these requests, a
                 motion was made by Major Pudlowski, seconded by Mr. Bass and
                 unanimously carried to approve the Retirement Benefits for Police
                 Officers as presented.


FOR APPROVAL: Requests for Vested Termination Benefits for Civilians.

DECISION:        There were no Civilian Requests for Vested Termination Benefits for
                 February 2002.

FOR APPROVAL: Requests for Vested Termination Benefits for Police Officers.

DECISION:        There were no Police Requests for Vested Termination Benefits for
                 February 2002.

                               APPLICATIONS FOR DEATH BENEFITS

FOR APPROVAL: Beneficiary’s Requests for Civilian Plan Death Benefits.

DECISION:        A motion was made by Mr. Bass, seconded by Major Pudlowski and
                 unanimously carried to approve the Beneficiary Requests for Civilian
                 Plan Death Benefits as presented.

FOR APPROVAL: Beneficiary’s Requests for Police Plan Death Benefits.

DECISION:        There were no Beneficiary’s Requests for Police Death Benefits for
                 February 2002.

                                       FINANCIAL REPORTS

FOR APPROVAL: A.      Retirement Fund Balance Sheet through February 28, 2002
                      from the Division of Fiscal Management

                 B.   Jennison Associates LLC Account Reporting Package for period
                      ending February 28, 2002.

                 C.   Wellington Management Company Investment Report – None

                 D.   Chartwell Investment Partners Portfolio Summary dated
                      February 28, 2002

                 E.   Capital Guardian Trust Portfolio Statement as of February 28,

                 F.   Deutsche Asset Management Portfolio Review January 31,

                 G.   Batterymarch Financial Management Performance Summary for
                      February 28, 2002

                 H.   Summit Strategies Group Investment Performance Review
                      February 28, 2002

                 I.   J.H. Ellwood & Associates, St. Louis County Retirement Plans
                      February 28, 2002 Performance Update

                 J.   Independence Investment Associates, Inc. Asset Summary
                      Report February 28, 2002

                 Glenn Pearl advised the Board that with the number of retirements
                 that we have had, the amount of retirement payments for the year is

            going to be over $19 million. Currently the amount of monthly benefit
            payments are up around $150,000.

APPROVAL:   There being no unusual circumstances regarding the Financial
            Reports, a motion was made by Mr. Bass, seconded by Mr. Peterson
            and unanimously carried to approve the Retirement Fund Balance
            Sheet and the Financial Reports as submitted.

                           DAN GEORGE – ROGER GOULD

            The U.S. stock market had a difficult time in January and continued
            into February. The Wilshire 5000 was down 3.3 percentage points
            year-to-date through the end of February. Things have turned
            around a little in early March and the market recovered somewhat.
            Through yesterday’s close, March 27th, we see the U.S. stock market
            in positive territory of almost 1 full percentage point and likewise with
            the non-U.S. stock market. Through February 28th, U.S. stocks were
            down and non-U.S. stocks, represented by the EAFE index was
            down 4.6 percentage points. Bonds were in positive territory at the
            end of February. Bonds were roughly flat at the end of the fourth
            quarter while everyone was trying to determine what was happening
            in the economy and what the Federal Reserve was going to do in
            respect to interest rates. There are goods signs of an early
            economic recovery and some expansion in the economy, but this
            leads people to believe that the Fed is done easing interest rates and
            that their next move would be an increase to interest rates. While the
            market is somewhat up or down in anticipation of interest rate
            changes, what the market does not do very well is anticipating a calm
            or plateau period. While it is possible that the Fed may increase
            interest rates, any increase would probably be very modest if at all
            unless there are signs of inflation. While the market tries to price in

the next move, whether up or down, it may do so at the cost of doing
nothing and see interest rates hold for a while. As a result, we saw
interest rates go up in the fourth quarter and come down a little in the
first quarter to date through February 28th and this pushed bond
prices up.

For the Plan’s investment program, the total assets are at $306
million and the asset allocation is right on target (65% equities/35%
fixed income). Looking at the individual allocations across the
managers, we are also very close to our targets of 20% each for our
percent of equities. When looking at the performance of our equity
managers, we see that each of our managers is performing fairly
well. Chartwell, on a year-to-date basis, despite a positive February,
is down slightly, but down less than their large cap value part of the
market. Independence is down a little more than their benchmark,
the S& P 500, and Jennison is down almost a full percentage point
less than the large cap growth side of the market. Batterymarch is
where the Plans’ are getting a good dose of value added, almost 7
percentage points better than the small cap part of the market.
Batterymarch is in positive territory with 3.2% year-to-date return.
They were positive .2 in February while their part of the market was
down almost 3 percentage points. Our total domestic equity for the
month of February, we were down 1.2% while the Wilshire 5000
(U.S. stock market) was down 2.1%, so our managers in aggregate
are protecting capital better than the market overall. Capital
Guardian (international) was up 1.3%, while the EAFE index was up
about half of that for February. Capital Guardian is protecting capital
on a year-to-date basis by more than 1 full percentage point. Our
fixed income managers, Wellington and Deutsche, combined were
doing slightly better than the combination of the two fixed income
benchmarks. All together the total plan is down .7% year-to-date and
the market benchmark down 1.7%.

It is difficult to say what will happen as we try to look forward,
especially with the economy turning a corner. Businesses are taking
it slowly, they are still doing some layoffs and they are not building
inventory significantly. While these are healthy signs for their
financial statements, they don’t really indicate strong GDP growth
yet. What we do see is that consumers continue to benefit from low
interest rates and new housing has very strong numbers year-to-
date. The consumer has really kept the economy from falling too far
into a recession. If you look at post-war, the oil embargo of the 70’s,
and when there have been other environments with consecutive
negative stock market years, the first positive year was 30%+ and
were consumer driven recoveries.



Summit Strategies Group Form ADV, Part II has been requested by
the Retirement Plans Office and is on file and available for review.


There is a theory out there, that not participating in these class action
lawsuits is a breach of your fiduciary duty. There is a body of Public
Pension Plan attorneys who feel that if you hold any of the stocks,
you have an obligation to sue the companies or join these class
action suits and there is the other half that basically says, if you feel
you have been wronged, you can participate in these class action
suits but some feel maybe it is not worth the trouble when you
consider what your pro-rata share of recovery might be and that to
read this in as a fiduciary responsibility is a stretch. In a class action
lawsuit the custodian does not have an obligation to act on behalf of
the County. They would not be acting as our attorney. The County
should retain the right to decide whether to participate in each
lawsuit, individually. To give it away to the custodian runs the same
risk of not looking into the facts and making an informed decision.
When anybody offers to provide the Board information about a
lawsuit, the Board should accept this information, pass it along to the
County Counselor’s Office, who will in turn look into it and make a
determination as to whether there is an upside for the County. In
these class action lawsuits, the money manager would be on record
as holding the stock and would get the proxy information and forward
it on to their investors. The notification usually will ask if you own the
stock and if you owned these stocks did you own them between
these dates, was there harm done, did you buy it high, sell it low. If
you didn’t suffer a loss, you can’t really file and recoup a loss, but if
you did suffer a loss, you can participate.

When you are voting a proxy, you are voicing an opinion on an issue
that could go one way or the other. For instance, a vote for a Board
member, you are having more of an impact on the ongoing operation
of a organization that you are investing in. If you owned a stock and
an accountant or management did something illegal or wrong and
you are trying to recoup that loss, it is a little less of an impact on the
daily ongoing operation and how a corporation does it’s business.
Basically, you are saying that you shouldn’t have done that and it
affected me adversely, but you are not telling them this is how they
should run their business as much as you are just protecting your
investment. It comes down to the issue of governance vs. recouping
a claim of some sort, or rights as a stockholder vs. taking appropriate
steps to protect your investment. As a stockholder, you are afforded
certain rights. The fact that you own stock gives you the right to
receive dividends, the right to examine corporate books, and the right

to attend the annual shareholders’ meeting (or in lieu of attending,
voting a proxy for whatever is on the agenda). You have these rights
simply by holding that stock. In the case of these shareholder
lawsuits, you are not obligated to join.

The portfolio manager would be in the best position to calculate if
there was a material loss in their holdings. In the case of a class
action lawsuit, the portfolio manager would probably notify us, but it
would still be up to the Board and the County Counselor to look at
this and make a decision on whether we want to participate in any
type of class action. You have on your own standing the right to sue,
believing that they may get a better result by not participating in the
class action suit.

This is the same fee schedule that was brought to the Board back in
July or August 2001. Rebecca Roberie and Deutsche had planned
on putting this in effect at the end of March 2002. Rebecca Roberie
and Deutsche have agreed to backdate this fee schedule to the
beginning of October 2001, so there will be some rebates back to the


Glenn Pearl has provided a copy of this article for the Board
members information.

                          OTHER BUSINESS

                   ANDERSON LLP

            Fidelity has, on behalf of various client accounts, reached agreement
            on settlement of an action brought against Arthur Anderson LLP.
            Anderson has agreed to payment of damages (portfolio losses)
            related to purchases by Fidelity of Sunbeam Corporation Zero
            Coupon Senior Subordinated Debentures due 2018. A portion of
            these proceeds in the amount of $4,000.00 is due to the St. Louis
            County Large Cap Value account (since terminated) managed by
            Fidelity Management Trust. FMTC is requesting written direction for
            remittance of these funds to the St. Louis County, Missouri
            Employees’ Retirement Plan account.

DECISION:   A motion was made by Mr. Bass, seconded by Major Pudlowski, and
            unanimously approved to accept the recommendation of the Chief
            Accounting Officer that we request that FMTC have a check in the
            amount of $4,000.00 made payable to the “Treasurer, St. Louis
            County mailed to Fiscal Management, Attention: Glenn Pearl at 41 S.
            Central, Clayton, Missouri for deposit into the County account.


            The County Counselor’s office has prepared a letter that outlines a
            few issues that have arisen in negotiation of the securities lending
            contract. Each of these issues is predominantly a business decision
            to be made and not necessarily a legal decision. This is being
            brought before the Board for consideration and guidance on how to

            1) Collateral. We would like the Board to consider the types of
               acceptable collateral Deutsche can accept on the Plans’ behalf.
               The Bank’s proposed contract allows for a broad range of
               collateral including shares, stocks, bonds, debentures, notes,

   certificates of indebtedness, warrants, cash and irrevocable
   letters of credit. The County Counselor’s impression is to limit the
   types of collateral to cash, U.S. government securities and
   irrevocable letters of credit to lower the risk of the collateral.

Some of these types of collateral like, stocks, bonds, debentures, and
warrants have their own market risk. They may be inappropriate
investments for the Plans. They may upset the diversity that the
Plans have already decided upon. The County Counselor’s office
has been informed that the greatest interest in borrowing our
securities would be in the area of fixed income investments. If a
large percentage of our fixed income investments were loaned out,
the collateral that would be received to secure that lending was in
stock, we would take what the Board had decided should have been
fixed income and inadvertently move it into equity. There could be
some additional risk that the Plans would incur.

The Board could limit the securities lending to equities only, but the
problem with this is that those parties interested in borrowing
securities are mostly interested in fixed income investments. By
limiting ourselves to lending equities, we are severely limiting the
utility of the program. The biggest portion of the securities lending
program is fixed income securities. The Board is in a position to be
able to stipulate what securities they want to put at risk and could
impose limitations in terms of many of the issues that are raised by
the contract. The difficulty with limiting the contract to equities only is
that the bulk of securities lending revenue comes from the lending of
fixed income securities. A year ago, the Board was informed that the
revenue generated from the program could be as high as $90,000.00
a year but was based on a much higher interest rate. So with the
lower interest rate, it would be better to assume that the income
generated would be about half that amount, somewhere around

            $45,000-$50,000 annually. Even though the revenues generated are
            cut in half the consultants agree that the reward is commensurate
            with the overall risk. What the Board is trying to achieve with this
            program is to generate enough revenue to offset the custodial costs,
            which will improve the overall efficiency of the Plans. The
            consultants are comfortable with limiting the type of acceptable
            collateral as suggested by the County Counselor’s office. Cash, U.S.
            government securities, and irrevocable letters of credit is about as
            conservative as it gets in terms of the collateral to be accepted and
            are also the bulk of the collateral pool (the majority of the assets
            pledged as collateral). Regardless of whatever the Board is lending
            out, whether it is equity or fixed income, it will not change the overall
            asset allocation of the Plans because there is always the ability for
            the Board to sell that security and call that loan back in. The Board
            consultants, J.H. Ellwood and Summit Strategies, worked closely with
            the County Counselor’s office on these issues in regards to the
            securities lending program. The County Counselor’s office in
            preparing a securities lending agreement with Deutsche Bank has
            encountered these issues and they want to make sure the Board has
            a full understanding of the issues imbedded in these contracts.

DECISION:   Moved by Mr. Wright, seconded by Msgr. McCarthy, and
            unanimously approved to accept the recommendation of the County
            Counselor’s office and the consultants to limit the types of collateral
            to cash, U.S. government securities, and irrevocable letters of credit.

            2) Concentration of Assets. Deutsche invests all cash collateral in
               the Daily Assets Fund, a mutual fund for institutional investors
               participating in securities lending. Under Deutsche’s proposed
               contract, theoretically, all of the Plan assets could be out on loan
               backed by cash collateral that is in the Fund. If something goes
               awry with the Fund, the entire Plan would be in jeopardy. The

               consultants have advised that although theoretically this is a
               possibility, it is highly unlikely that such a result could occur.
               However, to protect ourselves from this theoretical problem, and
               in that most of our funds would probably not be the subject of
               securities lending in any event, the County Counselor suggests
               that the Board may wish to limit the amount of the portfolio that
               would be out on loan at any one time.

            In the exercise of prudence, the County Counselor’s office was
            wondering if the Board wanted to set a limit on the total amounts of
            the Plans’ assets that could be lent out at any one time. The initial
            proposal was based on a total program in which the Plans total
            assets could be lent out at any time. While the total could be lent out,
            the total would never actually be lent out, theoretically. It is possible
            that all assets could be on loan at the same time, but the consultants
            have never seen where it has come close. Right now, in the market
            place, what are in hot demand are bonds and in some cases, small
            cap stocks. It is highly unlikely that anyone would want to borrow
            everything in our portfolio all at once. To be safe, the consultants
            have agreed that it is probably prudent to put a limitation on the
            overall amount of assets that can be on loan at any given time. If the
            Board wants to limit the amount of assets on loan at any one time to
            50%, the consultants are comfortable with this limitation. The original
            estimate was based on a percent out on loan that was quite a bit less
            than 50%, somewhere in the upper 30’s. The consultants do not see
            a cap on percent on loan across all of their securities lending clients.
            The cap on percent on loan is a way to make clients that are new to
            securities lending or a little unsure get a little more comfortable with
            the program.

DECISION:   Moved by Mr. Bass, seconded by Major Pudlowski, and unanimously
            approved to accept the recommendation of the consultants and the

County Counselor’s office to limit the percent on loan with the
securities lending program to 50% of the Plans’ portfolio.

3) Counterparties. Attached is a list of the Counterparties that can
   participate in securities lending with our securities. Please advise
   if you consider any Counterparty unacceptable.

The County Counselor’s office is requesting guidance from the
consultants as to the acceptability of the Counterparties on
Deutsche’s list. The consultants agree that it is the bank’s job to
screen the credit worthiness of the Counterparties. To prevent any
possibility of a conflict of interest, the only limitation that the
consultants would offer is to screen out Deutsche Bank or any of its
subsidiaries. Another thing for the Board to remember is that this is
an indemnified program and Deutsche Bank is indemnifying the Plan
against losses associated with borrower default. Deutsche Bank is
not only doing the credit analysis on each borrower, but they are
putting their name behind them for losses associated with borrower
default. Deutsche Bank is going to have business relationships with
every entity on this list, there is a possible conflict of interest that they
might lend to themselves rather than lend to another entity when they
might be able to get a better rate elsewhere. The consultants are not
saying this would ever happen, but the potential is there. There
could be an instance where this could be a very significant concern
and that is where Deutsche Bank ever to get into an “Enron” type of
situation, where things were starting to cascade in on them due to
their making some type of mistake. Deutsche Bank could borrow our
securities and loan it to one of their subsidiaries and use their credit
for collateral to be able to get money from our Plan at a time when
other bankers would be aware of their potential weakness and the
potential collapsing of the company. Deutsche Bank could drain our

            Fund and put it into their subsidiary and then our only backing is their
            collateral, which is worthless.

DECISION:   Moved by Msgr. McCarthy, seconded by Mr. Bass, and unanimously
            approved to screen out Deutsche Bank or any of its subsidiaries from
            the list of Counterparties.

            4) Conflicts of Interest. The Bank asks the Plans to acknowledge
               that it may represent itself, other Counterparties, creditors or
               clients of a Counterparty, even if the interests of the Bank or
               those other entities may conflict with the County in some manner.

            In this issue, Deutsche Bank comes out and tells the County, that
            they have a conflict of interest and are going to be dealing against us.
            Deutsche Bank may represent themselves or Counterparties, or
            creditors for their interests and against our interests. This clause
            probably goes to a full disclosure type of issue. Deutsche Bank is
            informing the County that there are a lot of parties involved in this
            action and some may be related to them. The consultants feel that
            the two issues in 3) & 4) are definitely related and the conflicts of
            interest is reducing it with the removal of the Deutsche Bank affiliates
            from the list. There are 100 names on the list. It is not a commodity
            business but the going rate is known out there and so you will still get
            the securities out on loan, if you take these 5 or so names affiliated
            with Deutsche Bank off the list.

DECISION:   Moved by Mr. Bass, seconded by Mr. Peterson, and unanimously
            approved to accept the Conflict of Interest acknowledgment.

            5) Summary of purchases and redemption in Fund. The Bank will
               give us a monthly summary of purchase and redemption

                transactions. It asks that we waive any right we may have to
                receive a confirmation after each purchase or redemption
                transaction (although we can revoke the waiver upon written
                request). Acceptable?

            Item #5 is a question of whether a monthly summary of purchase or
            redemption transaction is sufficient or whether the Board would rather
            have confirmation of each and every one as it occurs. Basically the
            contract has the County waive the right to receive a confirmation after
            each purchase or redemption and just receive a monthly statement.

DECISION:   Moved by Mr. Wright, seconded by Msgr. McCarthy, and unanimously
            approved to accept the provisions of issue #5 in regards to receiving a
            monthly summary of purchases and redemption in Fund.

            6) Fund shares not registered or insured. The County
                acknowledges that the shares of the Fund are not registered
                under the Securities Act of 1933 or under any other law. Further,
                the Fund’s assets are not deposits or obligations guaranteed or
                endorsed by any bank, or federally insured institution. The Fund
                intends to maintain a constant $1.00 per share net assets value,
                although there can be no assurance that it will do so.

            The lion’s share of the Board’s collateral from the Counterparties is
            going to go here. If Deutsche was to ever break the buck (going
            below $1.00 net asset value of that pool), for whatever reason, their
            entire securities lending program would go down the chutes. There is
            a risk. There could be a default, though modest, on an individual
            security within the pool. From past experience, when an individual
            security went into default or a deferral on an interest payment, the
            bank stepped in to protect the buck. The bank would have to step in

            for it would be a tremendous crisis in the event that anything ever
            happened to break that buck. The consultants can receive a report on
            the pool that will reflect the individual securities of that pool
            periodically. Included in Deutsche’s report will be the performance of
            the collateral pool. The reason that it is not regulated or registered
            with the SEC is because they are exempt from registration.

DECISION:   Moved by Mr. Bass, seconded by Mr. Wright, and unanimously
            approved to accept #6 regarding acknowledgment that the shares of
            the Fund are not registered are not registered under the Securities Act
            of 1933 or under any other law and the Fund’s assets are not deposits
            or obligations guaranteed or endorsed by any bank or federally
            insured institution.

             7) Agree to reimburse Deutsche if collateral return insufficient. The
                Plan agrees to accept the investment risks in the Daily Assets
                Fund, and we agree to reimburse the Bank if the Fund is unable
                to return the cash collateral and any interest or rebate payable on
                the collateral. Acceptable?

            If the party that borrows the securities defaults, Deutsche agrees to
            indemnify us. If the collateral decreases in value so much that the
            Plans does not have enough to pay it back at the end of the lending
            period, then the Plans has to come up with that money.

DECISION:   Moved by Mr. Bass, seconded by Major Pudlowski, and unanimously
            approved to accept #7.

            Summit Strategies has one additional issue in regards to securities
            lending. On Monday of this week, eleven members of Deutsche
            Bank’s Securities Lending team left and went to another bank.
            Deutsche Bank’s point is that it is only eleven members out of a 200-

            person team. Summit Strategies will investigate and find out who
            these eleven members were and if the consultants agree that it is not
            material to the operation of the securities lending program, they will
            contact the County Counselor’s office and let them know if it is
            acceptable to proceed with the contract. The County Counselor’s
            office will proceed with the contract negotiations up until the point
            where it requires the signature of the Chairman, Msgr. McCarthy and
            then they will make the decision whether to send it to the Plan. There
            will be negotiations back and forth with Deutsche Bank. The County
            Counselor’s office will submit a contract that is really very different
            from the one they initially submitted to us. The County Counselor’s
            office will deal with Summit Strategies and J.H. Ellwood to iron out the
            finer points without having to run back to the Board. It is the
            discretion of the County Counselor’s office to negotiate the final terms
            of the contract.

                                    NAPPA ORGANIZATION

FOR APPROVAL:   There is an organization known as the National Association of
            Corporate Pension Plan Attorneys. It is a good organization for
            Maggie Hart Mahon to be a part of as being legal counsel for the
            County dealing with issues pertaining to the Retirement Plans.
            Maggie is relatively new to the Board as far as representation on
            issues of concern for the Retirement Plans. Maggie relies on Chris
            McCarthy to point her in the right direction a lot of times. Chris
            McCarthy is the head of the St. Louis County Litigation Department
            and is expecting Maggie, as he should be expecting her, to carry the
            ball more on a lot of the Board’s issues. Maggie feels it would be
            helpful if she become a member of the National Association of
            Pension Plan Attorneys but there is an annual fee of $300.00 to be a
            part of this organization and be able to get information from them. For
            example, on the securities lending issue, NAPPA had a lot of

            information that is available to members that might have been helpful
            as far as being able to work through the issues. Maggie would like to
            ask the Board if they would approve the payment of the annual fee
            from the Fund for this current year since it was not included in the
            County Counselor’s budget.

DECISION:   Moved by Mr. Bass, seconded by Mr. Peterson, and unanimously
            approved for the payment of the annual membership fee of $300.00 to
            NAPPA (National Association of Pension Plan Attorneys) from the
            Retirement Funds, as requested by Maggie Hart Mahon, Attorney, St.
            Louis County Counselor’s Office for her enrollment in this organization
            for this year.

            For the record, Board members and staff should make arrangements
            when possible to have any expenses (i.e., memberships in
            organizations, attendance of seminars, travel, etc.) budgeted for with
            their department so the Plan has as little direct expense as possible.

                              CAPITAL GUARDIAN TRUST
                                 MIKE CASSAGRANDA

            The St. Louis County Retirement Plan is essentially in a non-U.S.
            commingled fund managed by Capital Guardian Trust. Two major
            points in the guidelines are that Capital Guardian can go up to 10% in
            emerging markets and also up to 10% of purchase in non-U.S. small-
            cap. Currently, we are at 3% of the small-cap fund. Total assets
            managed as of February 28, 2002 were at $36.6 million, with equities
            at 90%, small-cap at 3% and cash is up to 6.6%. Within that 90% of
            equities, there are roughly 7% in emerging markets. The 7% are
            emerging markets blue chips that operate to global standards and
            compete globally.

Capital Guardian has 10 portfolio managers and they consider the
entire portfolio to be one pie with each manager having a slice of that
pie to the EAFE index. They run diversified portfolios. Robert Ronus
at the end of 2001, announced that he is going to give up his asset
management at the end of 2002. Capital Guardian has essentially
over a year to prepare for this gradually and it will be fairly seamless
from the Retirement Plans’ perspective. Quarterly, Robert Ronus’
assets will be transitioned to different managers already on the team.
Robert will stay with Capital Guardian in an advisory capacity. There
are no current plans to add a new manager to the pool to manage
Robert’s assets. Chris Reed was added fairly recently last year,
partly in anticipation of this change.

Looking at investment results, the absolute numbers are pretty nasty.
For the lifetime of the Fund (October 19, 2000 – February 28, 2002)
the portfolio is down 13% vs. a little over 16.5% for the EAFE. While
we are ahead of the benchmark at a little over 3.5%, it doesn’t help a
lot if the absolute numbers aren’t there. After one year, the portfolio
was ahead of the index by 4.75%. Again, good relative numbers but
the absolute were poor. In the Fourth Quarter, we saw a turnaround,
with a lot of what had been going on with Technology in the prior year
really making a turnaround which resulted in a gain of 12.53%,
essentially double the index over that period. The calendar year-to-
date figure for the Fund is 1.67% and the index year-to-date was up
.71%. With the one-year ending December 31, 2001, the EAFE, in
local currency terms, was down 16%, didn’t get any help from
conversion with a –6.2% on top of that loss for a total of –21%. If you
look at the change in exchange rate, not one currency improved
returns for a U.S. dollar. Primarily right now, Capital Guardian is
about 7.5% hedged out of the Yen and most of that has gone to the
Euro. There was no place to hide in the last year. The most notable

area of weakness was information technology and telecom services.
At the end of 2000, orders for PC’s and handsets fell off the cliff.
This was something that Capital Guardian didn’t see coming. While
they had reduced some of these names in the beginning of the year,
they were still heavily exposed.

In summary, looking at non-U.S. investments in general, there are
three things Capital Guardian sees as attractive. You can find a lot of
growth outside the U.S., even when you might not be able to find it
inside the U.S. Capital Guardian feels that markets outside will grow
faster than inside the U.S. Going forward, Capital Guardian is
overweight non-U.S. in the global balance accounts. Capital
Guardian thinks that the global economy has bottomed and there is a
lot of room to improve and so they have introduced a bit of a cyclical
element into the portfolio. They also think that for the U.S. investor,
there is a currency tailwind that will get going forward. The Euro is
structurally undervalued and there is a lot of room for improvement.

It was unanimously agreed that the next meeting of the Board of
Trustees will be held on Thursday, April 25, 2002 in the St. Louis
County Meramec Building, 121 South Meramec, 1st Floor Training
Room at 10:00 A.M.


Moved by Mr. Peterson, seconded by Major Pudlowski, and
unanimously carried to adjourn the meeting of the Board of Trustees
at 11:30 a.m.

                     Msgr. Robert L. McCarthy, Chairman 04-25-02

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