SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(AMENDMENT NO.
(Amendment No. )
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¨ | Preliminary Proxy Statement | ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
x | Definitive Proxy Statement | |||||
¨ | Definitive Additional Materials | |||||
¨ | Soliciting Material Pursuant to §240.14a-12 |
Russell Investment Funds
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
RUSSELL INSURANCE FUNDS
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
if other than the Registrant)
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RUSSELL INVESTMENT FUNDS
909 A STREET
TACOMA, WASHINGTON 98402
1-800-787-7354
August 24, 2007
Dear Contract Owner:
On behalf 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 dateBoard of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
RUSSELL INSURANCE FUNDS
909 A STREET
TACOMA, WASHINGTON 98402
1-800-787-7354
Dear Shareholder:
Enclosed isTrustees (the “Board”) of Russell Investment Funds (the “Trust”) we are pleased to notify you of a Notice of Special Meeting in lieu of Annual Meeting of
Shareholdersspecial meeting of the Russell Insurance Fundsshareholders (the "Investment Company"“Special Meeting”) of the Trust’s series (each a “Fund,” and, collectively, the “Funds”). The Special Meeting has been called for Thursday, November 19, 1998will be held on October 25, 2007 at 11:10:00 a.m., local time, at the Trust’s offices of the Investment Company at 909 A Street, Tacoma, Washington. The accompanyingWashington 98402.
You are entitled to provide instructions for voting shares of each Fund that your Insurance Company holds to fund your variable annuity contract or variable life insurance policy. You should read the enclosed Proxy Statement detailscarefully and submit your voting instructions.
At the proposals being
presented for your consideration.
The Special Meeting, will consider several matters, and shareholders will be asked to: (i) elect the
Elect eight members of the Board, of Trustees
Approve certain changes to the Master Trust Agreement of the Investment
Company; (ii) ratify the selection of PricewaterhouseCoopers LLP as the
Investment Company's independent accountants; (iii) approve a proposed
management agreement between the Investment Company, on behalf of each sub-
trust of the Investment Company (each a "Fund")Trust, and Frank Russell Investment
Management Company ("FRIMCo"), to take effect upon the acquisition of Frank
Russell Company by The Northwestern Mutual Life Insurance Company; and (iv)
approve
Approve a change in each Fund's fundamental investment restriction limiting
borrowing to authorize a higher borrowing level for the purpose of meeting
redemptions.
The enclosed materials provide detailsstatus of the proposals. Accordingly,Real Estate Securities Fund from a proxy card“diversified company” to a “non-diversified company.”
as stated in the Notice of Special Meeting of Shareholders and further explained in the enclosed Proxy Statement.
A Voting Instruction Card for the Special Meeting in lieu of Annual Meeting of Shareholders is enclosed. IT IS IMPORTANT THAT YOU COMPLETE, SIGN AND RETURN YOUR VOTING INSTRUCTION CARD, OR TAKE ADVANTAGE OF THE TELEPHONIC OR ELECTRONIC VOTING PROCEDURES DESCRIBED IN THE VOTING INSTRUCTION CARD, AS SOON AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED AT THE SPECIAL MEETING. Please returnThe number of shares of each Fund attributable to you will be voted in accordance with your instructions. Your vote is important. If we do not hear from you after a reasonable amount of time, you may receive a telephone call from our proxy card as soon as possible.
Sincerely,
/s/ Karl J. Ege
Karl J. Ege, Esq.
Secretary
NOTE:solicitor, Computershare Fund Services, reminding you to vote. If you own shares ofhave any questions in connection with these materials, please call us at 1-800-787-7354.
| Sincerely, |
 |
| Gregory J. Lyons |
| Secretary |
Note: You may receive more than one Fund, you will receive a separate
proxy card for each Fund.voting instruction card. PLEASE COMPLETE THEEACH CARD PROVIDED FOR EACH FUND IN
WHICH YOU OWN SHARES so that each Fund will have the quorum needed to conduct its business.
RUSSELL INSURANCEINVESTMENT FUNDS
909 A STREET
TACOMA, WASHINGTON 98402
NOTICE OF SPECIAL MEETING IN LIEU OF ANNUAL MEETING
OF SHAREHOLDERS OF THE
RUSSELL INSURANCEINVESTMENT FUNDS
TO BE HELD ON THURSDAY, NOVEMBER 19, 1998
OCTOBER 25, 2007
To the Shareholdersshareholders of each of Multi-Style Equity Fund, Aggressive Equity Fund, Non-
U.S.Non-U.S. Fund, Real Estate Securities Fund, Core Bond Fund, Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund and Core Bond Fund:
Equity Growth Strategy Fund (each a “Fund,” and, collectively, the “Funds”):
NOTICE IS HEREBY GIVEN that a Special Meeting in lieu of Annual Meetingspecial meeting of the shareholders (the "Shareholders") of the four sub-trusts (each a "Fund,"
and collectively the "Funds"“Special Meeting”) of Russell InsuranceInvestment Funds (the "Investment
Company"“Trust”) will be held at the Investment Company'sTrust’s offices located at 909 A Street, Tacoma, Washington, on Thursday, November 19, 1998October 25, 2007 at 11:10:00 a.m., local time, for the following purposes:
1. To elect the members of the Board of Trustees of the Investment
Company.
2. To ratify the selection of PricewaterhouseCoopers LLP as the
Investment Company's independent accountants.
3. To approve a proposed management agreement with Frank Russell
Investment Management Company ("FRIMCo"), the current investment manager
of the Investment Company, to take effect upon the closing of the
acquisition of Frank Russell Company by The Northwestern Mutual Life
Insurance Company.
4. To approve a change to each Fund's fundamental investment restriction
limiting borrowing activities, authorizing a higher borrowing level for
the purpose of meeting shareholder redemption requests.
The Special Meeting also will consider and act upon any other business (none
being known as of the date of this notice) as may legally come before the
Special Meeting or any adjournment thereof.
| Proposal 1: | To elect eight members of the Board of Trustees of the Trust. |
| Proposal 2: | To approve certain changes to the Liquidation Provision of the Master Trust Agreement of the Trust. |
| Proposal 3: | To approve certain changes to the Reorganization Provision of the Master Trust Agreement of the Trust. |
| Proposal 4: | To approve a change in status of the Real Estate Securities Fund from a “diversified company” to a “non-diversified company”. |
The attached Proxy Statement provides more information concerning each of the proposed items upon which Shareholdersshareholders and the corresponding Contract Owners will be asked to vote.
The Board of Trustees unanimously recommends that you vote in favor of the Proposals. Shareholders of record as of the close of business on September 21, 1998,July 31, 2007 are entitled to notice of and to vote at the Special Meeting or any adjournment thereof.
By Order
The Trust is seeking approval for certain actions it wishes to take, and if you are a Contract Owner, you are entitled to instruct your Insurance Company how to vote the shares of the Board of Trustees,
/s/ Karl J. Ege
KARL J. EGE, ESQ.
Secretary
Tacoma, Washington
October 19, 1998
Funds attributable to you under your contract or policy.
| By Order of the Board of Trustees, | ||||
| ||||
| Tacoma, Washington | Gregory J. Lyons | |||
| August 24, 2007 | Secretary | |||
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING! WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY CARD(S)OR VOTING INSTRUCTION CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.STATES, OR TAKE ADVANTAGE OF THE TELEPHONIC OR INTERNET VOTING PROCEDURES DESCRIBED IN THE PROXY OR VOTING INSTRUCTION CARD. IF YOU DESIRE TO VOTE IN PERSON YOU MAY REVOKE YOUR PROXY PRIOR TO THE SPECIAL MEETING. PLEASE
COMPLETE AND RETURN ALL PROXY CARDS ENCLOSED. EACH IS FOR
No matter how many shares you own, your vote is important. A SEPARATE FUND.
RUSSELL INSURANCEINVESTMENT FUNDS
909 A STREET
TACOMA, WASHINGTONStreet
Tacoma, Washington 98402
1-800-787-7354
PROXY STATEMENT
DATED OCTOBER 19, 1998
JULY 26, 2007
FOR A SPECIAL MEETING IN LIEU OF ANNUAL MEETING
OF SHAREHOLDERS OF
Multi-Style Equity Fund
Aggressive Equity Fund
Non-U.S. Fund
Real Estate Securities Fund
Core Bond Fund
Moderate Strategy Fund
Balanced Strategy Fund
Growth Strategy Fund
Equity Growth Strategy Fund
(each a “Fund,” and, collectively, the “Funds”)
EACH A SERIES OF
RUSSELL INSURANCEINVESTMENT FUNDS TO BE HELD NOVEMBER 19, 1998
SUMMARY
WHAT IS(the “Trust”)
QUESTIONS AND ANSWERS ABOUT THE PURPOSE OF THISSPECIAL MEETING
AND THE PROXY STATEMENT?
STATEMENT
General Information About the Proposals
| Q. | What is the purpose of this Proxy Statement? |
| A. | You are receiving these proxy materials—that include the Proxy Statement and one or more proxy or voting instruction cards—because you have the right to vote or instruct your Insurance Company how to vote on important proposals concerning your investment in one or more of the Funds. |
The principal purpose of this Proxy Statement is to seek Shareholdershareholder approval of the matters identified in the accompanying Notice of Special
Meeting in lieu of Annual Meeting. Shareholders of each Fund will be asked to
consider and approve, on behalf of their respective Fund(s),table below (the “Proposals”). Following the four
proposals discussed in this Proxy Statement. Beforetable, before addressing the specific proposals,Proposals, this Proxy Statement provides you with important information regarding how the Funds operate.
HOW ARE THE FUNDS MANAGED?
Each Fund is a sub-trust
PROPOSAL | SHAREHOLDERS SOLICITED | |||
1. | To elect eight members of the Board of Trustees of the Trust. | All Funds. | ||
2. | To approve changes to the Liquidation Provision of the Master Trust Agreement. | Multi-Style Equity, Aggressive Equity, Non-U.S., Real Estate Securities and Core Bond. | ||
3. | To approve changes to the Reorganization Provision of the Master Trust Agreement. | Multi-Style Equity, Aggressive Equity, Non-U.S., Real Estate Securities and Core Bond. | ||
4. | To approve a change in status of Real Estate Securities Fund from a “diversified company” to a “non-diversified company”. | Real Estate Securities Fund only. | ||
Information About Voting
| Q. | Who is asking for my vote? |
| A. | The Board of Trustees (the “Board” or the “Trustees”) of the Trust has requested your vote or voting instructions for the special meeting (the “Special Meeting”) of the shareholders (the “Shareholders”) of the Funds. The Special Meeting will be held at 10:00 a.m., local time, on October 25, 2007, at the Trust’s offices located at 909 A Street, Tacoma, Washington. The Trust proposes to mail on or about August 24, 2007 the Notice of Special Meeting, the proxy or voting instruction card and the Proxy Statement to Shareholders and Contract Owners of record at the close of business on July 31, 2007. |
| Q. | Who is eligible to vote? |
| A. | The Trust has nine series, or funds, in all. This Proxy Statement relates to all of those series (each a “Fund,” and, collectively, the “Funds”). Shareholders or Contract Owners of record of the Funds at the close of business on July 31, 2007 (the “Record Date”) are entitled to notice of and to vote or give voting instructions on the Proposals at the Special Meeting or at any adjournment of the Special Meeting. Shareholders of record will be entitled to one vote for each full share and a fractional vote for each fractional share that they held on the Record Date on each matter presented at the Special Meeting. |
The Funds serve as investment vehicles for variable annuity contracts and variable life insurance policies (the “Variable Contracts” and “Variable Policies”) issued by various life insurance companies (the “Insurance Companies”). Insurance Companies may also invest their own general account assets in the Trust. All shares of the RussellFunds are owned of record by sub-accounts of separate accounts (“Separate Accounts”) established to fund the Variable Contracts and Variable Policies issued by the Insurance Companies or by the Insurance Companies in their general accounts. Each Insurance Company, to the extent required by the Investment Company Act of 1940, as amended (the “1940 Act”), will solicit voting instructions from Variable Contract and Variable Policy owners (the “Contract Owners”) who beneficially own shares of a Fund through a Separate Account (a “1940 Act Separate Account”) of such Insurance
Company as of the Record Date. These shares will be voted by the applicable Insurance Company as timely directed by the Contract Owners. Each Insurance Company will vote the shares of each 1940 Act Separate Account for which no timely instructions are received from a Contract Owner in the same proportion as dictated by the timely voting instructions received from other Contract Owners for shares of such Fund held in that 1940 Act Separate Account.
The Trust has been advised by certain Insurance Companies that they are not required by the 1940 Act to solicit voting instructions from certain owners of Variable Contracts or Variable Policies who own shares of a Fund through certain of their Separate Accounts (the “Non-1940 Act Separate Accounts”) and that such Insurance Companies therefore will not solicit voting instructions from the Variable Contract or Variable Policy owners that beneficially own shares of a Fund through a Non-1940 Act Separate Account (and such Variable Contract or Variable Policy owners are not included in the term “Contract Owners” as used herein). Fund shares held in a Non-1940 Act Separate Account will be represented at the Special Meeting by the applicable Insurance Company and voted in the same proportion as the aggregate of votes cast with respect to shares of such Fund held in all of that Insurance Company’s 1940 Act Separate Accounts or in such other manner as may be required by law.
| Q. | How do I deliver voting instructions to my Insurance Company? |
| A. | Contract Owners may instruct their Insurance Company how to vote shares of the Funds attributable to their Variable Contract or Variable Policy in writing, by executing the enclosed voting instruction card and returning it in the envelope provided or via telephone or the Internet as described in the voting instruction card. |
To give voting instructions via the Internet, please access the website listed on your instruction card(s) or noted in the enclosed voting instructions. To give voting instructions via the Internet, you will need the “control number” that appears on your voting instruction card. The Internet voting procedures are designed to authenticate your identity, to allow you to give voting instructions and to confirm that your instructions have been recorded properly. If you vote via the Internet, you may incur costs associated with electronic access providers and telephone companies.
Instruction cards that are properly signed, dated and received and proper voting instructions received via telephone or the Internet prior to the Special Meeting will be voted as specified. If you sign, date and return the instruction card, but do not specify a vote for the Proposals, your Insurance Company will vote your sharesFOR electing each of the nominees to serve on the Board,FOR approval of the changes to the Liquidation Provision of the Master Trust Agreement of the Trust,FOR approval of the changes to the Reorganization Provision of the Master Trust Agreement of the Trust, andFORapproval of a change in status of Real Estate Securities Fund from a “diversified company” to a “non-diversified company”. Your Insurance Company will vote each Fund’s shares held by the 1940 Act Separate Accounts for which no timely instructions are received in proportion to the voting instructions which are received with respect to such Fund.
| Q. | If I send my proxy or voting instruction card in now as requested, can I change or revoke my vote later? |
| A. | Contract Owners may revoke their instructions by submitting, before the meeting, written notice of revocation, a later-dated instruction card or a later-dated vote via telephone or the Internet. |
Shareholders may revoke their proxy at any time prior to its exercise by voting in person at the Special Meeting or by submitting before the meeting written notice of revocation, a later-dated proxy or a later-dated vote via telephone or the Internet.
| Q. | How do the Trustees recommend that I instruct my Insurance Company to vote for these Proposals? |
| A. | The Trustees recommend that you instruct your Insurance Company to voteFOR each Proposal. |
| Q. | Whom should I call for additional information about this Proxy Statement? |
| A. | Please call Computershare Fund Services, the Trust’s information agent, toll-free at 1-866-525-2720. |
General Information About the Funds
| Q. | How are the Funds managed? |
| A. | The Trust is an open-end, management investment company organized under the laws of the Commonwealth of Massachusetts, with principal offices located at 909 A Street, Tacoma, Washington 98402. |
The Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund and Equity Growth Strategy Fund are funds of funds that invest in other funds managed by Russell Investment Management Company (“RIMCo”) (the “Funds of Funds”).
Under Massachusetts law, each Fund is a “sub-trust” of the Trust. The management of the business and affairs of the Investment
CompanyTrust is the responsibility of the Board of Trustees (the "Board" or
"Trustees").Board. The Board oversees the Funds'Funds’ operations, including reviewing and approving the Funds'Funds’ contracts with Frank Russell Investment Management
Company ("FRIMCo" or the "Manager"), Frank Russell Company ("FRC")Funds’ investment adviser, RIMCo and the Funds' money managers.Funds’ respective sub-advisers (“Money Managers”). The Investment Company'sTrust’s officers all of whom are
employed by and are officers of FRIMCo or its affiliates, are responsible for the day-to-day management and administration of the Funds'Funds’ operations. The
money managersFor all Funds except the Funds of Funds, the Money Managers are responsible for selection of individual portfolio securities for the assets assigned to them.
Shareholders will be asked
Except for the Funds of Funds, RIMCo selects, subject to elect Trustees, ratify the selection of
accountants, and amend a restriction affecting borrowing. Shareholders will
also consider approval of the Fund’s Board, Money Managers for the Funds, allocates Fund assets among Money Managers, oversees the Money Managers and evaluates the performance results. The Funds’ Money Managers select the individual portfolio securities for the assets assigned to them and either RIMCo or the Money Manager arranges for execution of portfolio securities transactions. The Funds of Funds invest in other Russell Investment Funds (“RIF”) or Russell Investment Company (“RIC”) Funds. RIMCo, as agent for RIF, pays the Money Managers’ fees for the Funds, as a new management agreement to become effective atfiduciary for the time of a change of control of FRC, the corporate parentFunds, out of the investment
manageradvisory fee paid by the Funds to RIMCo. The remainder of the Investment Company.
Each Fundadvisory fee is managedretained by FRIMCo, whose address is 909 A Street, Tacoma,
Washington 98402. As described in more detail in connection with Proposal #3
below, FRIMCo:
. provides or supervises the general management and administration,
investment advisory and portfolio management, and distribution servicesRIMCo as compensation for the Funds;
. furnishes the Funds with office space, equipmentservices described above and personnel to operate and administer the Funds' business, and supervises services
provided by third parties, such as the money managers and the custodian;
. develops investment guidelines and restrictions, selects money managers,
allocates assets among money managers and monitors the money managers'
investment programs and results; and
. provides the Funds with transfer agent, dividend disbursing and
shareholder recordkeeping services.
FRIMCo pays the expenses of providing these services (other than transfer
agent, dividend disbursing, and shareholder recordkeeping), as well as a
portion of the costs of preparing and distributing materials that describe the
Funds. FRIMCo is a wholly owned subsidiary of FRC, which provides
comprehensive asset management consulting services to institutional pools of
investment assets. pay expenses.
The address of FRC is 909 A Street, Tacoma, Washington
98402. George F. Russell, Jr., Chairman of the Board of the Investment
Company, is the Chairman of the Board and controlling shareholder of FRC.
The Investment CompanyTrust has received an exemptive order from the U.S. Securities and Exchange Commission (the "SEC"(“SEC”) which permits the Investment
Company,RIMCo, with the approval of the Board, to engage and terminate money
managersMoney Managers without a shareholder vote and to disclose the aggregate fees paid to
the manager and the money managers of each sub-trust.
The money managers for the Funds are listed in Exhibit Avote. Appendix B to this Proxy Statement. The money managersStatement lists the current Money Managers for the Funds. There may be changes to the Money Managers between the date you receive this proxy statement and the date of the meetings. However, the Money Managers will not change as a result of the proposalsProposals that Shareholders are being asked to consider at the Special Meeting.
WHAT ARE THE VARIOUS FEES AND EXPENSES FOR THE FUNDS?
The following summarizes the fees and expenses of the Funds under the
current service agreements.
Investment Management Fees: Under its Management Agreement with the
Investment Company, FRIMCo receives a management fee from each Fund for
FRIMCo's services. From this fee, FRIMCo, as the Investment Company's agent,
pays the money managers for their investment selection services. The remainder
of the management fee is retained by FRIMCo as compensation for the services
described above and to pay expenses. Quarterly, each money manager is paid the
pro rata portion of an annual fee, based on the average of all assets
allocated to the money manager for the quarter. Additional information
regarding the management fees of the Funds is set
2
forth under "Information Regarding the Current Management Agreement" in this
Proxy Statement.
Administrative Services: FRIMCo provides the Investment Company with
administrative services and facilities necessary to operate the Funds. FRIMCo
also serves as the dividend-paying agent, transfer agent and shareholder
servicing agent for the Funds.
TO ELECT THEEIGHT MEMBERS OF THE BOARD OF TRUSTEES
At itstheir meeting held on October 5, 1998,May 22, 2007, the Trustees determined to present the election of eight Trustees to hold office until their respective successors are elected and qualified, of which seven currently serve as Trustees of the Trust. Of the seven Trustees who currently serve on the Board of the Trust, four have previously been elected by the Trust’s Shareholders. Each of the Trustees will continue to hold office during the lifetime of the Trust except as such Trustee sooner dies, retires (or reaches the mandatory retirement age of 72), resigns or is removed, as provided for in the Trust’s Master Trust Agreement (the “Master Trust Agreement”). The Trust also has six Trustees Emeritus. Trustees Emeritus do not have the power to vote on matters coming before the Board, or to direct the vote of any Trustee, and generally are not responsible or accountable in any way for the performance of the Board’s responsibilities.
For election as Trustees at the Special Meeting, the Board has nominated Thaddas L. Alston, Kristianne Blake, Daniel P. Connealy, Jonathan Fine, Greg J. Stark, Raymond P. Tennison, Jr., Jack R. Thompson and Julie W. Weston (the “Nominees”). Mr. Alston, Mr. Fine, Mr. Stark and Mr. Thompson have not previously been elected by Shareholders. Mr. Stark will be deemed an “interested person” of the Trust for purposes of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”) because of his affiliation with RIMCo. None of the other Nominees is an “interested person” of the Trust (collectively, the “Independent Trustees”). Each Nominee has indicated that he or she is willing to serve as a Trustee. The Trust is submitting for Shareholder approval the election of the Trustees in order to meet the requirement under the 1940 Act that at least two-thirds of the Trustees have been elected by Shareholders. After careful consideration, the Board of Trustees to Shareholders athas concluded that it is in the Special Meeting.
Messrs. Russell, Lynn L. Anderson, Paul E. Anderson, Baxter and Gingrich, Dr.
Anton and Ms. Palmer (the "Current Trustees"), after due consideration,
unanimously approved each nominee identified below to serve as a memberbest interests of the BoardTrust’s Shareholders to submit for their approval the election of Trustees. Mr. Russell will not stand for re-election as a voting
Trusteeeach of the Investment Company, although he has been electedNominees, even if previously elected.
The proxies will vote for the election of each Nominee unless you withhold authority to servevote for any or all of them in the proxy. If any or all of the Nominees should become unavailable for election due to events not now known or anticipated, the persons named as a
Trustee Emeritus immediately uponproxies will vote for such other nominee or nominees as the completion of his present service as a
Trustee. current Trustees may recommend.
In considering the nomineesNominees for election as Trustees of the Investment Company,Trust, the Trustees took into account the qualifications of each of the nomineesNominee and the concern for the continued efficient conduct of the Investment Company'sTrust’s business. In particular, the Trustees considered the requirements of the Investment
Company1940 Act of 1940, as amended, (the "1940 Act") as they apply to the election of Trustees. One factor considered byTrustees generally and the Board is the requirement
imposed by the 1940 Act that the selection and nomination of trustees who are
not "interested persons" (as that term is definedNominees in Section 2(a)(19) of the
1940 Act) of the Investment Company (the "Independent Trustees") must be
committed, in the first instance, to the Independent Trustees then in office.
particular.
The Independent Trustees met separately with Investment Company counsel, and
proposed the nomination of the Independent Trustees whose names are set forth
below.
At a meeting held on October 5, 1998, the Board also noted the proposed
change in control of FRC described in Proposal #3 below. Under Section 15(f)
of the 1940 Act, for a period of three years following a change of control, at
least 75% of the members of the Board of Trustees must be individuals who are
not "interested persons" of FRIMCo or its predecessor entities. Based upon the
current affiliations of the nominees for election, the election of a Board
comprised of the six nominees set forth in this Proposal #1 will satisfy that
requirement.
The Current Trustees will continue to serve as Trustees until the Trustees
elected by the Shareholders take office, although Mr. Russell will resign as a
voting Trustee effective December 30, 1998, or at such date as may be
considered appropriate to assure that the composition of the Board complies
with Section 15(f). Upon the election and
3
qualification of the new Trustees, the six nominees listed below will
constitute the Board of Trustees of the Investment Company. It is anticipated
that the nominees will take office at the first regularly scheduled Board
meeting following their election, which Board meeting is presently anticipated
to be held in January, 1999. Mr. Russell and Mr. Lynn Anderson are and will
continue to be "interested persons" of the Investment Company. Mr. Russell has
been designated by the Board of Trustees as a Trustee Emeritus of the
Investment Company as described above pursuant to the Master Trust Agreement.
As a Trustee Emeritus, he will be expected to attend meetings of the Board,
will participate in discussions of the business of the Investment Company, and
may continue to provide the benefit of his advice and experience to the Board.
Under the Master Trust Agreement, a Trustee Emeritus does not vote on any
matter before the Board, and is not liable for the actions taken or omitted by
the Board.
Because the Investment Company does not hold regular annual meetings, each
nominee, if elected, will hold office until his or her successor is elected
and qualified.Shareholder meetings. The Board may call special meetings of shareholdersShareholders for action by shareholderShareholder vote as may be required by the 1940 Act or required or permitted by the Master Trust Agreement and by-laws of the Investment Company.Trust. In compliance with the 1940 Act, shareholderShareholder meetings will be held to elect Trustees whenever fewer than a majority of the Trustees holding office have been elected by the shareholdersShareholders or, if necessary in the case of filling vacancies, to assure that at least two-thirds of the Trustees holding office after vacancies are filled have been elected by shareholders.
THE NOMINEES
Shareholders.
No Nominee is a party adverse to the Trust or any of its affiliates in any material pending legal proceedings, nor does any Nominee have an interest materially adverse to the Trust.
The following tables set forth information is providedconcerning the Nominees for eachthe Board and officers of the six nominees. It
includes the nominee's name, principal occupation(s) or employment during the
past five years, and directorships with other companies which file reports
periodically with the SEC. Unless otherwise noted, the mailing address for
each nominee is FrankTrust. The Russell Investment Company, 909 A Street, Tacoma, WA
98402. EachFund Complex consists of the nominees is currently a Trust and RIC.
Nominees
Nominees for Election as Interested Trustees
Name, Age, | Position(s) | Term of | Principal Occupation(s) During the Past | No. of | Other | |||||
Greg J. Stark, Born May 3, 1968 909 A Street Tacoma, Washington 98402-1616 | President and Chief Executive Officer since 2004 | Until successor is chosen and qualified by Trustees | • President and CEO, RIC and RIF • Chairman of the Board, President and CEO, RIMCo • Chairman of the Board, President and CEO, RFD • Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”)) • Until 2004, Managing Director of Individual Investor Services, FRC • 2000 to 2004, Managing Director, Sales and Client Service, RIMCo | 44 | None |
| * | Each Trustee is subject to mandatory retirement at age 72. |
Nominees for Election as Independent Trustees
Name, Age, | Position(s) | Term of | Principal Occupation(s) During the Past | No. of | Other | |||||
| INDEPENDENT TRUSTEES | ||||||||||
Thaddas L. Alston Born April 7, 1945 909 A Street Tacoma, Washington 98402-1616 | Trustee since 2006 | Appointed until successor is duly elected and qualified | • Senior Vice President, Larco Investments, Ltd. (real estate firm) | 44 | None | |||||
Name, Age, | Position(s) | Term of | Principal Occupation(s) During the Past | No. of | Other | |||||
Kristianne Blake, Born January 22, 1954 909 A Street Tacoma, Washington 98402-1616 | • Trustee since 2000 • Chairperson since 2005 | • Appointed until successor is duly elected and qualified • Annual | • Director and Chairman of the Audit Committee, Avista Corp. • Trustee, Principal Investors Fund and Principal Variable Contracts Fund (investment company) • Regent, University of Washington • President, Kristianne Gates Blake, P.S. (accounting services) • February 2002 to June 2005, Chairman of the Audit Committee, RIC and RIF • Trustee and Chairman of the Operations and Distribution Committee, WM Group of Funds, 1999-2006 | 44 | • Director, Avista Corp • (electric utilities); • Trustee, Principal Investors Fund (investment company); • Trustee, Principal Variable Contracts Fund (investment company) | |||||
Daniel P. Connealy Born June 6, 1946 909 A Street Tacoma, Washington 98402-1616 | • Trustee since 2003 • Chairman of the Audit Committee since 2005 | • Appointed until successor is duly elected and qualified • Appointed until successor is duly elected and qualified | • June 2004 to present, Senior Vice President and Chief Financial Officer, Waddell & Reed Financial, Inc. • 2003, Retired • 2001 – 2003, Vice President and Chief Financial Officer, Janus Capital Group Inc. • 1979 – 2001, Audit and Accounting Partner, PricewaterhouseCoopers LLP | 44 | None | |||||
Jonathan Fine, Born July 8, 1954 909 A Street Tacoma, Washington 98402-1616 | Trustee since 2004 | Appointed until successor is duly elected and qualified | • President and Chief Executive Officer, United Way of King County, WA | 44 | None | |||||
Raymond P. Tennison, Jr. 909 A Street Tacoma, Washington 98402-1616 | Trustee since 2000 | Appointed until successor is duly elected and qualified | • President, Simpson Investment Company and several additional subsidiary companies, including Simpson Timber Company, Simpson Paper Company and Simpson Tacoma Kraft Company | 44 | None | |||||
Name, Age, | Position(s) | Term of | Principal Occupation(s) During the Past | No. of | Other | |||||
Jack R. Thompson, 909 A Street Tacoma, Washington 98402-1616 | Trustee since 2005 | Appointed until successor is duly elected and qualified | • September 2003 to present, Independent Board Chair and Chairman of the Audit Committee, Sparx Japan Fund • May 1999 to May 2003, President, Chief Executive Officer and Director, Berger Financial Group, LLC • May 1999 to May 2003, President and Trustee, Berger Funds | 44 | Director, Sparx Japan Fund (investment company) | |||||
Julie W. Weston, Born 909 A Street Tacoma, Washington 98402-1616 | • Trustee since 2002 | • Appointed until successor is duly elected and qualified | • Retired since 2000 • 1987 to 2002, Director, Smith Barney Fundamental Value Fund | 44 | None | |||||
• Chairperson of the Investment Committee since 2006 | • Appointed until successor is duly elected and qualified | |||||||||
| * | Each Trustee is subject to mandatory retirement at age 72. |
Officers
Name, Age, Address | Position(s) Held With | Term of Office | Principal Occupation(s) During the Past | |||
OFFICERS | ||||||
Cheryl Wichers Born December 16, 1966 909 A Street Tacoma, Washington 98402-1616 | Chief Compliance Officer since 2005 | Until removed by Independent Trustees | • Chief Compliance Officer, RIC • Chief Compliance Officer, RIF • Chief Compliance Officer, RIMCo • April 2002-May 2005, Manager, Global Regulatory Policy • 1998-2002, Compliance Supervisor, Russell Investment Group | |||
Greg J. Stark, Born May 3, 1968 909 A Street Tacoma, Washington 98402-1616 | President and Chief Executive Officer since 2004 | Until successor is chosen and qualified by Trustees | • President and CEO, RIC and RIF • Chairman of the Board, President and CEO, RIMCo • Chairman of the Board, President and CEO, RFD • Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”)) • Until 2004, Managing Director of Individual Investor Services, FRC • 2000 to 2004, Managing Director, Sales and Client Service, RIMCo | |||
Mark E. Swanson, Born November 26, 1963 909 A Street Tacoma, Washington 98402-1616 | Treasurer and Chief Accounting Officer since 1998 | Until successor is chosen and qualified by Trustees | • Treasurer, Chief Accounting Officer and CFO, RIC and RIF • Director, Funds Administration, RIMCo, RTC and RFD • Treasurer and Principal Accounting Officer, SSgA Funds | |||
Thomas F. Hanly, Born November 17, 1964 909 A Street Tacoma, Washington 98402-1616 | Chief Investment Officer since 2004 | Until removed by Trustees | • Chief Investment Officer, RIC, RIF, FRC, RTC • Director and Chief Investment Officer, RIMCo and RFD • 1999 to 2003, Chief Financial Officer, FRC, RIC and RIF | |||
Gregory J. Lyons, Born August 24, 1960 909 A Street Tacoma, Washington 98402-1616 | Secretary since 2007 | Until successor is chosen and qualified by Trustees | • Associate General Counsel and Assistant Secretary, FRC and RIA • Director and Secretary, RIMCo and RFD • Secretary and Chief Legal Counsel, RIC and RIF | |||
Remuneration of the Investment CompanyTrustees and except as otherwise indicated, has served as a Trustee since 1996.
Mr. Lynn Anderson is the only nominee for election as a Trustee who is an
"interested person" of the Investment Company as defined in the 1940 Act. This
designation results from his ownership interest and position as an officer of
certain FRC affiliates. As used in the list below, "Frank Russell Company"
includes its corporate predecessor, Frank Russell Co., Inc.
*Lynn L. Anderson -- 59 years old -- Trustee, President and Chief Executive
Officer since 1996. Trustee, President and Chief Executive Officer, Frank
Russell Investment Company; Director, Chief Executive Officer and Chairman of
the Board, Russell Fund Distributors, Inc.; Trustee, Chairman of the Board,
President, and Treasurer, Officers
The SSgA Funds (investment company); Director, Chief
Executive Officer and Chairman of the Board, Frank Russell Investment
Management Company; Director,
4
Chief Executive Officer and President, Frank Russell Trust Company; Director
and Chairman of the Board, Frank Russell Investment Company Public Limited
PLC; Director, Frank Russell Company, Frank Russell Investments (Ireland)
Limited, Frank Russell Investments (Cayman) Ltd. and Frank Russell Investments
(UK) Ltd., Russell Insurance Agency, Inc., Frank Russell Investment Company,
PLC; June 1993 to November 1995, Director, Frank Russell Company. Until
September 1994, Director and President, The Laurel Funds, Inc. (investment
company); November 1995 to December 1996, Director and Chairman, Russell MLC
Management Company; December 1996 to March 1997, Director and Chairman, Frank
Russell Company (Delaware) Inc.
Paul E. Anderson -- 67 years old -- Trustee. 23 Forest Glen Lane, Tacoma,
Washington 98409. Trustee, Frank Russell Investment Company; 1996 to Present,
President, Forest Limited Partnership. 1984 to 1996, President, Vancouver Door
Company, Inc.
Paul Anton, Ph.D. -- 78 years old -- Trustee. PO Box 212, Gig Harbor,
Washington 98335. Trustee, Frank Russell Investment Company. President, Paul
Anton and Associates (Marketing Consultant on emerging international markets
for small corporations). 1991-1994, Adjunct Professor, International
Marketing, University of Washington, Tacoma, Washington.
William E. Baxter -- 73 years old -- Trustee. 800 North C Street, Tacoma,
Washington 98403. Trustee, Frank Russell Investment Company, Retired.
Lee C. Gingrich -- 68 years old -- Trustee. 1730 North Jackson, Tacoma,
Washington 98406. Trustee, Frank Russell Investment Company. President,
Gingrich Enterprises, Inc. (Business and Property Management).
Eleanor W. Palmer -- 72 years old -- Trustee. 2025 Narrows View Circle #232-
D, P.O. Box 1057, Gig Harbor, Washington 98335. Trustee, Frank Russell
Investment Company; Director of Frank Russell Trust Company.
The Investment Company pays fees only to the Independent Trustees of the
Investment Company.Trustees. Compensation of officers and Trustees who are "interested
persons"“interested persons” of the Investment Company (as indicated by an asterisk)Trust is paid by FRIMCoRIMCo or its affiliates. All of the nominees attended each regular Board of Trustees meeting held in
1997, and the special meeting ofThe Trust’s officers are appointed by the Board of Trustees held on June 6, 1997,
except for Paul Anderson, who was absent from two meetings, Lynn L. Anderson,
who was absent from three meetings, and Eleanor W Palmer, who was absent from
one meeting. The Board of Trustees has an Audit Committee, which is composed
of the Independent Trustees of the Investment Company. The function of the
Audit Committee ishold office until they resign, are removed or are otherwise disqualified to advise the Board with regard to the appointment of the
Investment Company's independent accountants, review and approve audit and
non-audit services of the Investment Company's independent
5
accountants, and meet with the Investment Company's financial officers to
review the conduct of accounting and internal controls. The Committee also
serves as a vehicle for these Trustees to consult separately with the
Investment Company's outside counsel. The Audit Committee met once during the
year ended December 31, 1997. All members of the Audit Committee attended the
Audit Committee meeting. The Board does not have standing nominating or
compensation committees.serve. The following represents the compensation paid to each Current Trustee for the fiscal year ended December 31, 1997:
2006. The Russell Fund complex consists of the Trust and RIC.
TRUSTEE COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
TRUSTEE | AGGREGATE COMPENSATION FROM RIF | PENSION OR RETIREMENT BENEFITS ACCRUED AS PART OF RIF EXPENSES | ESTIMATED ANNUAL BENEFITS UPON RETIREMENT | TOTAL COMPENSATION FROM RIF AND RUSSELL FUND COMPLEX PAID TO TRUSTEES | ||||||||
INTERESTED TRUSTEES | ||||||||||||
Michael J. Phillips* | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||
INDEPENDENT TRUSTEES | ||||||||||||
Thaddas L. Alston** | $ | 2,059 | $ | 0 | $ | 0 | $ | 54,167 | ||||
Kristianne Blake | $ | 5,392 | $ | 0 | $ | 0 | $ | 140,500 | ||||
Daniel P. Connealy | $ | 3,725 | $ | 0 | $ | 0 | $ | 97,000 | ||||
Jonathan Fine | $ | 3,341 | $ | 0 | $ | 0 | $ | 87,000 | ||||
Raymond P. Tennison, Jr. | $ | 3,343 | $ | 0 | $ | 0 | $ | 87,000 | ||||
Jack R. Thompson | $ | 3,341 | $ | 0 | $ | 0 | $ | 87,000 | ||||
Julie W. Weston | $ | 3,629 | $ | 0 | $ | 0 | $ | 94,500 | ||||
| * | Effective December 31, 2006, Mr. Phillips retired from the Board of Trustees. |
| ** | Mr. Alston was elected to the Board of Trustees effective May 1, 2006. |
| *** | Mr. Anderson was elected Trustee Emeritus effective January 1, 2007. |
Trustee Ownership of Fund Shares
The table below sets forth the dollar range of the value of the shares of each Fund, and the dollar range of the aggregate value of the shares of all funds in the Russell Fund Complex, owned directly or beneficially by the Trustees, including the Nominees, as of March 31, 2007. The Russell Fund Complex consists of the Trust and RIC.
EQUITY SECURITIES BENEFICIALLY OWNED BY TRUSTEES
FOR THE PERIOD ENDED MARCH 31, 2007
TRUSTEE | DOLLAR RANGE OF EQUITY SECURITIES IN EACH FUND | AGGREGATE TRUSTEES IN RUSSELL FUND | ||
INTERESTED TRUSTEES | ||||
Greg J. Stark* | None | None | ||
INDEPENDENT TRUSTEES | ||||
Thaddas L. | None | None | ||
Kristianne Blake | None | Over $100,000 | ||
Daniel P. Connealy | None | Over $100,000 | ||
Jonathan Fine | None | Over $100,000 | ||
Raymond P. Tennison, Jr. | None | Over $100,000 | ||
Jack R. Thompson | None | $ | ||
Julie W. | None | $50,001-$100,000 |
| * | Mr. Stark is not currently a member of the Board of Trustees. |
| ** | Mr. Alston was elected to the Board of Trustees effective May 1, 2006. |
Trustees are paid an annual retainer plus meeting attendance and chairperson fees, both at the Board and Committee levels, in addition to any travel and other expenses incurred in attending Board and Committee meetings. The Trust’s officers and employees are paid by RIMCo or its affiliates.
Board Meetings, Committees, and Other Related Matters
The Board of Trustees is responsible for overseeing generally the operation of the Funds, including reviewing and approving the Funds’ contracts with RIMCo, the Funds’ Adviser, and the Money Managers. Generally, a Trustee may be removed at any time by a vote of two-thirds of the Trust’s Shares. A vacancy in the Board is filled by a vote of a majority of the remaining Trustees so long as after filling such vacancy, two-thirds of the Trustees have been elected by shareholders.
There are six Trustees Emeritus. Trustees Emeritus do not have the power to vote on matters coming before the Board, or to direct the vote of any Trustee, and generally are not responsible or accountable in any way for the performance of the Board’s responsibilities.
The officers, all of whom are employed by and are officers of RIMCo or its affiliates, are responsible for the day-to-day management and administration of the Funds’ operations. The Board met seven times during the year ended December 31, 2006. The Board does not have a policy with regard to Trustee attendance at special meetings of the Shareholders. Each Trustee attended or participated telephonically in at least 75% of all Board and applicable committee meetings.
The Board does not provide a process for Shareholders to send communications to the Board. To date, the Board has not considered providing a process for Shareholders to send communications to the Board.
The Board of Trustees has established a standing Audit Committee, a standing Nominating and Governance Committee and a standing Investment Committee.
The Trust’s Board of Trustees has adopted and approved a formal written charter for the Audit Committee, which sets forth the Audit Committee’s current responsibilities. The Audit Committee’s primary functions are: (1) oversight of the Funds’ accounting and financial reporting policies and practices and their internal controls and, as appropriate, the internal controls of certain service providers; (2) oversight of the quality and objectivity of the Funds’ financial statements and the independent audit thereof; and (3) to act as liaison between the Funds’ Independent Registered Public Accounting Firm and the full Board. The Audit Committee reviews the maintenance of the Funds’ records and the safekeeping arrangements of the Trust’s custodian, reviews both the audit and non-audit work of the Trust’s Independent Registered Public Accounting Firm, submits a recommendation to the Board as to the selection of the Independent Registered Public Accounting Firm, and pre-approves (i) all audit and non-audit services to be rendered by the Independent Registered Public Accounting Firm for the Trust, (ii) all audit services provided to RIMCo, or any affiliate thereof that provides ongoing services to the Trust, relating to the operations and financial reporting of the Trust, and (iii) all non-audit services relating to the operations and financial reporting of the Trust, provided to RIMCo, or any affiliate thereof that provides ongoing services to the Trust, by any auditors with an ongoing relationship with the Trust. It is management’s responsibility to maintain appropriate systems for accounting and internal control and the auditor’s responsibility to plan and carry out a proper audit. Currently, the Audit Committee members consist of Messrs. Raymond P. Tennison, Jr., Daniel P. Connealy, and Jonathan Fine, each of whom is an Independent Trustee. For the fiscal year ending December 31, 2006, the Audit Committee held five meetings.
The Trust’s Board of Trustees has adopted and approved a formal written charter for the Nominating and Governance Committee, which sets forth the Nominating and Governance Committee’s current responsibilities. A copy of the charter is not available on the Trust’s website, but can be found attached to this amount, $4,000 wasProxy Statement under Appendix A. The primary functions of the Nominating and Governance Committee are to: (1) nominate and evaluate individuals for services during 1996.
** The Trustees received $20,000 for service as trusteesTrustee membership on the Board, including individuals who are not interested
persons of the Trust for Independent Trustee membership; (2) supervise an annual assessment by the Trustees taking into account such factors as the Committee may deem appropriate; (3) review the composition of the Board; (4) review Trustee compensation; and (5) make nominations for membership on all Board committees and review the responsibilities of each committee. When seeking to fill vacancies on the Board or adding Trustees to the then existing membership, the Nominating and Governance Committee identifies potential nominees through its network of contacts, and may also engage, if it deems appropriate, a professional search firm. The Nominating and Governance Committee meets to discuss and consider such candidates’ qualifications and then chooses a candidate by majority vote to recommend to the full Board for its consideration. The Committee will not consider nominees recommended by Shareholders of the Funds. Currently, the Nominating and Governance Committee members consist of Messr. Raymond P. Tennison and Mses. Julie W. Weston and Kristianne Blake, each of whom is an Independent Trustee. For the fiscal year ending December 31, 2006, the Nominating and Governance Committee held two meetings.
In evaluating all candidates for membership on the Board, the Nominating and Governance Committee, according to its charter, should consider, among other factors that it may deem relevant:
whether or not the person is willing and able to commit the time necessary for the Frank Russell Investment Company.
OFFICERS OF THE INVESTMENT COMPANY
Information aboutperformance of the Investment Company's principal executive officers
(other than Lynn Anderson), including their names, ages, position(s)duties of a Trustee;
whether the person is otherwise qualified under applicable laws and regulations to serve as a Trustee;
the contribution which the person may be expected to make to the Board and the Trust, with consideration being given to the Investment Company,person’s business and principal occupationprofessional experience, board experience, education and such other factors as the Nominating and Governance Committee, in its sole judgment, may consider relevant; and
the character and integrity of the person.
In evaluating Independent Trustee candidates, the Nominating and Governance Committee, according to its charter, should also consider, among other factors that it may deem relevant:
whether or employment duringnot the past
five years, is set forth below. An asterisk (*) indicates that the officerperson is an "interested person" of the Investment Company“interested person” as defined in the 1940 Act.
AsAct;
whether or not the person has any relationships that might impair his or her independence, such as any business, financial or family relationships with Trust management, RIMCo, any money manager or any other principal Trust service providers or their affiliates;
whether or not the person serves on boards of, or is otherwise affiliated with, competing financial service organizations or their related mutual fund complexes; and
whether or not the selection and nomination of the person would be consistent with the requirements of the Trust’s retirement policies.
The Trust’s Board of Trustees has adopted and approved a formal written charter for the Investment Committee, which sets forth the Investment Committee’s current responsibilities. The Investment Committee: (1) shall regularly review and monitor the investment strategies and investment performance of the Funds; (2) shall review the kind, scope, and format of, and the time periods covered by, the investment performance data and related reports provided to the Board; (3) may review the investment performance benchmarks and peer groups used in reports delivered to the table, "Frank Russell Company" includes its corporate
predecessor, Frank Russell Co., Inc.
*George F. Russell, Jr. -- 66 years old -- TrusteeBoard; (4) may review such matters that are related to the investment strategies and Chairmaninvestment performance of the Trust’s funds as would be considered by the Board since 1996. Trusteeas the Committee may deem to be necessary or appropriate; and Chairman(5) may meet with any officer of the BoardTrusts, or officer or other representative of Frank RussellRIMCo, any subadviser to a fund or other service provider to the Trusts. Currently, the Investment Company; Director, ChairmanCommittee members consist of Mses. Julie W. Weston and Kristianne Blake and Messrs. Thaddas L. Alston and Jack R. Thompson, each of whom is an Independent Trustee. For the Board and Chief Executive Officer, Russell
Building Management Company, Inc.; Director and Chairman offiscal year ending December 31, 2006, the Board, Frank
Russell Company, Frank Russell Securities, Inc., Frank Russell Trust Company,
Frank Russell Investments (Delaware), Inc.; Director, Frank Russell Investment Management Company; Director, Chairman of the Board, and President, Russell
20/20 Association.
*Mark E. Swanson -- 34 years old -- Treasurer and Chief Accounting Officer
since August 1998. Treasurer and Chief Accounting Officer, Frank Russell
Investment Company; Interim Director, Finance and Operations, Frank Russell
Trust Company;
6
Assistant Secretary and Principal Accounting Officer, SSgA Funds (investment
company); Interim Director of Fund Administration and Accounting, Frank
Russell Investment Management Company; Manager, Funds Accounting and Taxes,
Russell Fund Distributors, Inc. April 1996 to August 1998, Assistant
Treasurer, Frank Russell Investment Company; August 1996 to August 1998,
Assistant Treasurer, Frank Russell Investment Company; November 1995 to July
1998, Assistant Secretary, the SSgA Funds; February 1997 to July 1998,
Manager, Funds Accounting and Taxes, Frank Russell Investment Management
Company.
*Randall P. Lert -- 45 years old -- Director of Investments since 1996.
Director of Investments, Frank Russell Investment Company; Senior Investment
Officer and Director of Investment Services, Frank Russell Trust Company;
Director and Chief Investment Officer, Frank Russell Investment Management
Company; Director and Chief Investment Officer, Russell Fund Distributors,
Inc. Director-Futures Trading, Frank Russell Investments (Ireland) Limited and
Frank Russell Investments (Cayman) Ltd.; Senior Vice President and Director of
Portfolio Trading, Frank Russell Canada Limited/Limitee. April 1990 to
November 1995, Director of Investments of Frank Russell Investment Management
Company.
*Karl J. Ege -- 57 years old -- Secretary and General Counsel since 1996.
Secretary and General Counsel of Frank Russell Investment Company. Director,
Secretary and General Counsel, Russell Fiduciary Services Co., Frank Russell
Capital, Inc.; Director, Secretary, General Counsel and Managing Director --
Law and Government Affairs of Frank Russell Company; Secretary and General
Counsel of Frank Russell Investment Management Company, Frank Russell Trust
Company and Russell Fund Distributors, Inc.; Director and Secretary of Russell
Building Management Company Inc., Russell International Services Co., Inc. and
Russell 20-20 Association; Director and Assistant Secretary of Frank Russell
Company Limited (London) and Russell Systems Ltd.; Director, Frank Russell
Investment Company LLC, Frank Russell Investments (Cayman) Ltd., Frank Russell
Investment Company PLC, Frank Russell Investments (Ireland) Limited, Frank
Russell Company S.A., Frank Russell Japan Co. Ltd., Frank Russell Company (NZ)
Limited, Russell Investment Nominee Co PTY Ltd and Frank Russell Investments
(UK) Ltd.; Secretary, A Street Investments, Inc.; Director and Secretary,
Frank Russell Investments (Delaware), Inc.; July 1992 to June 1994, Director,
President and Secretary of Frank Russell Shelf Corporation; July 1993 to
December 1996, Secretary, Russell MLC Management Co.
*Peter Apanovitch -- 53 years old -- Manager of Short-Term Investment Funds
since 1996. Manager of Short-Term Investment Funds, Frank Russell Investment
Company; Manager of Short-Term Investment Funds, Frank Russell Investment
Management Company and Frank Russell Trust Company.
Committee held four meetings.
Required Vote
The persons named inon the proxy card intend, in the absence of contrary instructions, to vote all proxies in favor of the election of each nominee.the Nominees. A Shareholder may vote for or withhold authority with respect to any or all of
the nominees.Nominees. If an executed proxy card is 7
returnedreceived without voting instructions, the shares will be voted for all
nomineesthe Nominees named herein. All of
Your Insurance Company will vote each Fund’s shares held by the nomineesAccounts for which no timely instructions are received in proportion to the voting instructions which are received with respect to such Fund.
The Nominees have consented to being named in this Proxy Statement and to serve if elected. The Investment CompanyTrust knows of no reason why any nomineethe Nominees would be unable or unwilling to serve if elected. Should any of the nomineesNominees become unable or unwilling to accept nomination or election prior to the Special Meeting, the persons named inon the proxy card will exercise their voting power to vote for such substitute person or persons as the Currentcurrent Trustees of the Investment CompanyTrust may recommend. If any nominee
is not approved
The Master Trust Agreement requires that the Trustees be elected by a “plurality” vote. Therefore, the Shareholders of the Investment Company, the Board will
consider alternative nominations.
The nomineeseight Nominees who receive the greatest number of affirmative votes cast by the shareholdersShareholders of the Investment CompanyTrust who are present at the Special Meeting in person or by proxy will be declared elected.elected, provided that there is a sufficient number of shares represented in person or by proxy to meet the quorum requirements set forth in the Master Trust Agreement.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND
VOTE “FOR” THE ELECTION OF EACH OF THE EIGHT NOMINEES TO
SERVE ON THE BOARD OF TRUSTEES RECOMMENDSAS DESCRIBED IN
PROPOSAL 1. ANY EXECUTED UNMARKED PROXY CARDS THAT
SHAREHOLDERS VOTE
ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
TO ELECT AS TRUSTEES THE
NOMINEES FOR ELECTIONAPPROVE CERTAIN CHANGES TO THE BOARD OF TRUSTEES LIQUIDATION PROVISION
OF THE INVESTMENT COMPANY
PROPOSAL #2: RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS THE
INVESTMENT COMPANY'S INDEPENDENT ACCOUNTANTS
At its meetingMASTER TRUST AGREEMENT
This proposal will be voted on April 27, 1998, pursuant to a requestseparately by Shareholders of Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund and Core Bond Fund only.
After careful consideration, the managementBoard of Trustees has concluded that it is in the best interests of the Investment Company,Trust’s Shareholders to allow any Fund to be liquidated or terminated without the specific approval of the Shareholders of such Fund. To effect this change, the Board including a majorityof Trustees has unanimously approved and recommends for approval by Shareholders an amendment to the Trust’s Master Trust Agreement providing an exception from the provision that gives Shareholders of the Independent
Trusteesfollowing Funds the right to vote on any potential liquidation or termination of those Funds:
Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund and Core Bond Fund.
The amendment also clarifies and simplifies the liquidation and termination provision of the Investment Company, selected the firm of
PricewaterhouseCoopers LLPMaster Trust Agreement.
This amendment applies only to be independent accountants for the Investment
Company for the fiscal year ending December 31, 1998.liquidations and terminations, and does not apply to reorganizations. Shareholders of all of
the sub-trusts of the Investment Company are being asked atto vote on an amendment to the Special
MeetingMaster Trust Agreement relating to ratifyreorganizations in a separate proposal.
The current liquidation provision of the selectionMaster Trust Agreement allows for Funds established on or after August 23, 2005 to be liquidated or terminated without Shareholder approval. Funds established before August 23, 2005 must receive Shareholder approval before a liquidation or termination can occur. The Board of PricewaterhouseCoopers LLP,Trustees believes that standardizing the liquidation provision for all Funds of the Trust may enhance efficiency in administering the various Funds. The revised liquidation provision would also give the Board of Trustees added flexibility to make decisions they feel are in the Shareholders’ best interests when considering a firm formedFund liquidation or termination, without causing a Fund to incur the time and expense of soliciting Shareholder approval where, in the Board’s judgment this is in the best interest of Shareholders.
Although the Board of Trustees unanimously agrees that this amendment to the Master Trust Agreement is in the best interests of the Trust’s Shareholders, the amendment would remove the right of Shareholders of a Fund to vote on proposed liquidations or terminations of that Fund. If the amendment is approved, Shareholders of a Fund will no longer be required or entitled to vote on the liquidation or termination of that Fund. Therefore, this amendment to the Master Trust Agreement must be approved by the recent mergerShareholders of those Funds. The amendment will not alter in any way the Board of Trustees’ existing fiduciary obligations to act with due care and in the Shareholders’ interests. Before using any new flexibility that the proposed amendment may afford, the Board of Trustees must first consider the Shareholders’ interests and then act in accordance with such interests. Notwithstanding the above, if the proposed amendment is approved, the Board of Trustees maintains the right, in its sole discretion, to seek Shareholder approval of a proposed termination of a Fund.
Section 4.2(d) of the Investment Company's accountant with another
prominent accounting firm.
ServicesMaster Trust Agreement addresses liquidations and terminations of Funds. Appendix C, attached hereto, highlights the differences in connection with the audit function tocurrent language of Section 4.2(d) and the proposed amended language of Section 4.2(d). If Proposal 2 is approved, Section 4.2(d) will be performed byrestated in its entirety as follows:
(d)Liquidation and Termination. (1) Except as set forth below, the Investment Company's independent accountants include: (i) the examinationTrustees may not terminate any Sub-Trust of the annual financial statements of the Investment Company; (ii) all services
rendered in order to permit the accountants to render a formal opinion on the
Investment Company's financial statements; and (iii) provision of assistance
and consultations with respect to filings with the SEC. PricewaterhouseCoopers
LLP does not have any direct or indirect financial interest in the Investment
Company. It is not expected that a representative of PricewaterhouseCoopers
LLP will be present at the Special Meeting. If a representative is present, he
or she will have an opportunity to make a statement if he or she so desires to
do so, and would be available to respond to appropriate questions.
8
To be ratified, the appointment of PricewaterhouseCoopers LLP must receiveTrust without the affirmative vote of a majority of the securities of the Investment Company
which are present at the Meeting in person or by proxy, and vote on this
proposal.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE TO RATIFY THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
THE INVESTMENT COMPANY'S INDEPENDENT ACCOUNTANTS
PROPOSAL #3: TO APPROVE A PROPOSED MANAGEMENT
AGREEMENT BETWEEN THE INVESTMENT COMPANY,
ON BEHALF OF EACH FUND, AND FRANK RUSSELL
INVESTMENT MANAGEMENT COMPANY, TO TAKE EFFECT
UPON THE ACQUISITION OF FRANK RUSSELL COMPANY
BY THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
INTRODUCTION
FRIMCo currently servesoutstanding voting Shares, as the investment manager to the Funds pursuant to
an investment management agreement (the "Management Agreement") described
below. The current Management Agreement with FRIMCo is dated August 5, 1996.
The Management Agreement was continued until April 30, 1999, by the Board,
including all of the Independent Trustees, at its meeting held on April 27,
1998. The continuance of the current Management Agreement assured that the
Investment Company would continue to receive the services of FRIMCo after
April 30, 1998. On August 10, 1998, FRC entered into an Agreement and Plan of
Merger (the "Transaction Agreement") with The Northwestern Mutual Life
Insurance Company ("Northwestern Mutual") pursuant to which Northwestern
Mutual will acquire at the effective time all of the outstanding common stock
of FRC through the merger of Project Rainier Corp., a wholly-owned subsidiary
of Northwestern Mutual, with and into FRC (the "Transaction"). Northwestern
Mutual is a Milwaukee-based mutual insurance company with assets of more than
$76 billion at June 30, 1998, and annual revenues of more than $12.3 billion
for the year ended December 31, 1997. Northwestern Mutual Investment Services,
LLC ("NMIS"), a wholly-owned subsidiary of Northwestern Mutual, serves as
investment adviser to the Mason Street Funds, Inc. (a family of retail mutual
funds sponsored by Northwestern Mutual) and Northwestern Mutual Series Fund,
Inc. (the investment fund for Northwestern Mutual's variable annuity and life
insurance contracts). NMIS had approximately $9 billion under management at
June 30, 1998. The mailing address of Northwestern Mutual is 720 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202-4797.
Pursuant to the Transaction Agreement, FRC will be the surviving corporation
in the merger, and will continue to exist as a Washington corporation, as a
subsidiary of Northwestern Mutual. The corporate headquarters of FRC will
remain in Tacoma,
9
Washington. FRC will retain its name and operating independence and will
continue to operate globally as a separate company. George F. Russell, Jr.
will continue as Chairman of the Board of Directors of FRC. Michael J. A.
Phillips will continue as Chief Executive Officer of FRC and as a member of
FRC's Board of Directors.
Consummation of the Transaction will constitute an "assignment," as that
term is defined in the 1940 Act, of that Sub-Trust. Upon the Management Agreement. As required by
the 1940 Act, that Agreement provides for its automatic termination in the
event of its assignment. In anticipation of the Transaction and the resulting
termination, a new investment agreement (the "New Agreement") between the
Funds and FRIMCo is being submitted for approval by ShareholdersTrust or any Sub-Trust of the Funds.
A copyTrust:
(i) The Trust or Sub-Trust of the Management Agreement is attached hereto as Exhibit B. THE NEW
AGREEMENT FOR THE FUNDS WILL CONTAIN IN ALL MATERIAL RESPECTS THE SAME TERMS
AS THE TERMS IN THE MANAGEMENT AGREEMENT THAT ARE IN EFFECT AT THE TIME OF THE
CONSUMMATION OF THE TRANSACTION, other thanTrust shall carry on no business except for the effective datepurpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the agreement.
BOARD OF TRUSTEES EVALUATION AND CONCLUSIONS
At a Board of Trustees meeting on August 10, 1998, the Board was advised
that FRC and Northwestern Mutual had entered into the Transaction Agreement.
The Board directed the officersTrust or Sub-Trust of the Investment Company to obtain additional
information concerning Northwestern Mutual,Trust and all the termspowers of the Transaction, andTrustees under this Agreement shall continue until the impactaffairs of the Transaction on the Investment Company. Extensive information
was provided to the Board by FRC and Northwestern Mutual, and this information
was reviewed by the Board. In addition, the Independent Trustees also
consulted with the Investment Company's outside counsel concerning these
matters. After a careful review and evaluation of this information, a special
meetingTrust or Sub-Trust of the Board was held on October 5, 1998Trust shall have been wound up, including the power to considerfulfill or discharge the information
provided by FRC and Northwestern Mutual.
At its October meeting, the Boardcontracts of the Investment Company focused upon the
effectTrust or Sub-Trust of the proposed Transaction on the Investment Company. RepresentativesTrust, collect its assets, sell, convey, assign, exchange, transfer or otherwise dispose of FRC and Northwestern Mutual attended the meeting and described the termsall or any part of the proposed Transaction and the perceived benefits to the FRC organization,
FRIMCo and FRIMCo's investment advisory clients. In the course of these
discussions, FRIMCo and FRC advised the Independent Trustees that they did not
expect that the proposed Transaction would have a material effect on the
operationsremaining assets or assets of the Investment CompanySub-Trust to one or its shareholders. FRC has advised the
Independent Trustees that the Transaction Agreement, by its terms, does not
contemplate any changesmore persons at public or private sale for consideration which may consist in the structure or operations of FRIMCo,whole or in the
way that FRIMCo provides services to the Investment Company. Representativespart of Northwestern Mutual have informed the Trustees that Northwestern Mutual
currently intends to maintain the separate existence of the investment
companies that FRIMCo advises, and the funds that NMIS manages.
10
Though no specific plans have been developed at this time, the Trustees have
been advised by FRC that there may be some changes in personnel currently
involved in providing services to the Investment Company in order to combine
the strengths and efficiencies of FRC and Northwestern Mutual. With respect to
non-investment advisory services, Northwestern Mutual and FRC will seek to
identify ways in which FRIMCo and other subsidiaries of Northwestern Mutual
(including Robert W. Baird & Co. Incorporated) can more effectively meet the
administrative needs of the Investment Company and its affiliates. Any changes
in investment advisory services would require approval of the Board and
Shareholders in accordance with the 1940 Act. Any restructuring of non-
advisory services provided by FRIMCo will be subject to the review and
approval of the Board of Trustees, including the Trustees who are not
"interested persons" of FRC or Northwestern. In their discussions with the
Trustees, Northwestern Mutual representatives also emphasized the strengths of
the Northwestern Mutual organization and its commitment to provide the FRC
organization, including FRIMCo, with the resources necessary to continue to
provide high quality services to the Investment Company and the other
investment advisory clients of the FRC organization.
The Board of the Investment Company was advised that the Transaction
Agreement provides for FRC to rely, and that FRC intends to rely, on Section
15(f) of the 1940 Act, which provides a safe harbor for an investment adviser
to an investment company (and the adviser's affiliated persons) to retain any
amount or benefit received in connection with a change in control of the
investment adviser so long as the two conditions described below are met.
First, for a period of three years after the Transaction, at least 75% of
the members of the Board of Trustees of the Investment Company must not be
"interested persons" of the Investment Company's investment adviser or its
predecessor adviser. Assuming the election of the nominees listed in Proposal
#1, the Board of the Investment Company would be in compliance with this
provision of Section 15(f) at the time of, or prior to, the consummation of
the Transaction. (See Proposal #1 concerning the election of the Board of
Trustees.)
Second, an "unfair burden" must not be imposed upon the Investment Company
as a result of such Transaction or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden" is defined in
Section 15(f) to include any arrangement during the two-year period after the
Transaction whereby the investment adviser, or any interested person of any
such adviser, receives or is entitled to receive any compensation, directly or
indirectly, from the Investment Company or its shareholders (other than fees
for bona fide investment advisory or other services) or from any person in
connection with the purchase or sale ofcash, securities or other property of any kind, discharge or pay its liabilities, and to fromdo all other acts appropriate to liquidate its business; and
(iii) After paying or on behalfadequately providing for the payment of all liabilities, and upon receipt of such releases, indemnities and refunding agreements as they deem necessary for their protection, the Trustees may distribute the remaining assets of the Investment Company (other than ordinary feesTrust or assets of the Sub-Trust, in cash or in kind or partly in cash and partly in kind, among the Shareholders of the Trust or the Sub-Trust according to their respective rights. The assets so distributable to the Shareholders of any particular Sub-Trust shall be distributed among such Shareholders in proportion to the number of Shares of that Sub-Trust held by them and recorded on the books of the Trust, adjusted for bona fide
servicessuch distinctions between Shares of Classes of a Sub-Trust as principal underwriter for the Investment Company). No compensation
agreements which would violate Section 15(f) are contemplatedTrustees, in connectiontheir discretion, deem just and equitable.
The foregoing provisions shall also apply, with appropriate modifications as determined by the Transaction.
11
FRIMCo has undertakenTrustees, to pay the costs associated withtermination of any Class of any Sub-Trust.
(2) After termination of the preparation,
filing, printing,Trust or Sub-Trust or Class and distribution of these proxy materials, and of holding
the Special Meeting in lieu of Annual Meeting, as well as any other fees and
expenses incurred by the Investment Company in connection with the
Transaction, including the fees and expenses of legal counsel to the Investment Company.
During the course of their deliberations, the Independent Trustees
considered a variety of factors. These factors included the nature, quality
and extentShareholders of the services furnished by FRIMCo toTrust or Sub-Trust or Class as herein provided, the Investment Company; the
investment record of FRIMCo in managing the Funds in the Investment Company,
including the special role of FRIMCo as a "manager of managers"; the increased
complexity of the domesticTrustees shall thereupon be discharged from all further liabilities and international securities markets; and
comparative data as to investment performance, advisory fees and other fees,
including administrative fees, and expense ratios. The Board also considered
the risks assumed by FRIMCo by serving as adviser to the Investment Company;
the necessity for FRIMCo to maintain and enhance its ability to retain and
attract capable personnel to serve the Investment Company; FRIMCo's
profitability from advising the Investment Company; and other benefits
received by FRIMCo from serving the Investment Company. In connection with the
acquisition of FRC by Northwestern Mutual, the Board noted that there could be
possible economies of scale or other advantages to the Investment Company of
having an adviser with a parent which also serves other investment companies.
The Board also considered current and developing conditions in the financial
services industry, including the entry into the industry of large and well
capitalized companies which are spending and appear to be prepared to continue
to spend substantial sums to engage experienced personnel and to provide
services to competing investment companies; and the financial resources of
FRIMCo and the continuance of appropriate incentive compensation arrangements
to assure that FRIMCo will continue to furnish high quality services to the
Investment Company.
In addition to the foregoing factors, the Independent Trustees gave careful
consideration to the likely impact of the Transaction on the FRC organization.
In this regard, the Independent Trustees considered, among other things, the
following factors: the structure of the Transaction, which is expected to
afford FRIMCo executives significant autonomy over FRIMCo's operations and
could potentially provide meaningful FRC equity participation and incentives
for certain FRIMCo employees; FRIMCo's, FRC's and Northwestern Mutual's
commitment to enable FRIMCo to pay compensation adequate to attract and retain
top quality personnel; information regarding the financial resources and
business reputation of Northwestern Mutual; the complementary nature of
various aspects of the business of FRIMCo and the Northwestern Mutual
organization; and the current intention of Northwestern Mutual to maintain
separate Frank Russell and Northwestern Mutual brands in the mutual fund
business. Based on the foregoing, the Independent Trustees concluded that the
Transaction should cause no reduction in the quality of services provided to
the Investment Company and concluded that the Transaction should enhance
FRIMCo's ability to provide such services. The Independent Trustees considered
the foregoing
12
factorsduties hereunder with respect to eachthe Trust or Sub-Trust or Class, and the rights and interests of all Shareholders of the sub-trustsTrust or Sub-Trust or Class shall thereupon cease.
(3) Notwithstanding the above provisions of the Investment Company, and
the Investment Company collectively. The Trustees, including the Independent
Trustees, concluded that the on-going reorganization of the organizational and
operational structure of the sub-trusts of the Investment Company permittedSection 4.2(d), the Trustees to conclude that no sub-trust would be affected differently from
the Investment Company as a whole in these respects, and therefore determined
that the conclusions of the Board with respect to these matters would have
equal impact with respect to every sub-trust in the Investment Company.
As a result of these deliberations, at the Board of Trustees meeting on
October 5, 1998, the Trustees of the Investment Company, including the
Independent Trustees, approved the New Agreement for the Investment Company,
and recommended that shareholders of each of the sub-trusts in the Investment
Company approve the New Agreement, to become effective upon the completion of
the change of control of FRC and the termination of the Management Agreement
then in effect. In reaching this decision, the Board did not determine the
relative importance of the factors which were discussed. The discussion by the
Trustees with Fund counsel reflected consideration by the Board of all of the
issues considered.
The Board has not determined what action would be taken in the event that
any sub-trust does not approve the New Agreement for that sub-trust, and the
Transaction closes. In such a circumstance, the Board would seek to obtain for
the sub-trust suitable advisory services from FRIMCo or another investment
advisor on both an interim and/or a continuing basis. The approval of
continuing arrangements would be subject to the approval of the shareholders
of the affected sub-trust. The Trustees have determined that, in the event the
Transaction is not completed, FRIMCo will continue to serve the Investment
Company under the terms of the agreement then in effect.
INFORMATION CONCERNING THE TRANSACTION AND NORTHWESTERN MUTUAL
Under the Transaction Agreement, at the effective time of the Transaction,
each share of FRC common stock then outstanding (other than shares for which
dissenters' rights have been exercised) will be converted into the right to
receive $905,000,000 divided by the number of fully diluted units of equity of
FRC (taking into account all outstanding shares of FRC capital stock, options
to acquire shares of FRC capital stock, equity appreciation units and other
equity related rights), adjusted as described below. Such share price will be
increased or reduced based on the change (taking into account certain pro
forma adjustments) in FRC's net worth per share between March 31, 1998 and
closing. In addition, $90,000,000 of the $905,000,000 will be held back by
Northwestern Mutual at the closing to cover any adjustments occasioned by
changes in the net worth of FRC and for any losses incurred by Northwestern
Mutual or FRC as a result of the breach by FRC of certain specified
representations made by FRC in the Transaction Agreement, and will be
distributed to the former FRC shareholders and other former holders of FRC
equity related rights no earlier than October 1, 1999 to the extent
13
that there are no such adjustments or claims in respect of the breach of the
specified representations. FRC currently has approximately 200 shareholders.
Certain shareholders of FRC who have held their shares of common stock for
less than twelve months will have the option to convert such shares of common
stock into FRC preferred stock prior to the closing. Such preferred stock will
be subject to certain put and call rights during certain periods (at a price
per share equal to the amount that would have been paid if the preferred stock
had been common stock at the effective time of the Transaction, plus a
percentage of cumulative earnings per share of FRC on a fully diluted basis
from such effective time to the quarter preceding the put or call) but will
convert to FRC common stock if not redeemed or repurchased after four years.
George Russell, his family members and their related trusts are expected to
own approximately 59% in the aggregate of the fully diluted equity units of
FRC at the effective time of the Transaction. Lynn Anderson is also a
shareholder of FRC and is expected to own approximately 1% of the fully
diluted equity units of FRC at the effective time of the Transaction.
At and after the effective time of the Transaction, FRC will be a subsidiary
of Northwestern Mutual. FRIMCo will remain a wholly-owned subsidiary of FRC.
In connection with the Transaction, 50,000,000 shares of new FRC common stock
will be reserved for future issuance under a FRC Incentive Payments Plan. The
Incentive Payments Plan will be established to enhance the value of FRC and
its subsidiaries, including FRIMCo, by motivating superior performance of
management and key employees of the FRC organization after the closing of the
Transaction through the award of shares of FRC common stock and cash (to cover
certain income tax consequences of any stock award) to certain employees of
FRC and its subsidiaries. Over the course of a five-year period from the
effective time of the Transaction, participants in the Incentive Payments Plan
could collectively earn awards constituting up to 20% of the outstanding
common stock of FRC, depending upon FRC's cumulative earnings over the five
year period. George Russell and his wife, Jane Russell, will be awarded 20% in
the aggregate of the total number of incentive shares that may, be issued under
the Incentive Payments Plan. Lynn Anderson is expected to participate in the
Incentive Payments Plan. The number of incentive shares to be granted to Mr.
Anderson will be determined after the closing of the Transaction.
At the closing, FRC and Northwestern Mutual will enter into a Governance
Agreement (the "Governance Agreement"). Under the Governance Agreement, the
Board of Directors of FRC will be comprised of five persons. Initially,
Northwestern Mutual will elect to the FRC Board George F. Russell, Jr.,
Michael J.A. Phillips (both of whom are currently members of FRC's Board) and
three other Northwestern Mutual-designated persons. Thereafter, Northwestern
Mutual has agreed to take all actions within its power to cause the FRC Board
at all times to be comprised of (i) FRC's Chief Executive Officer and one
other senior officer or employee of FRC designated by the Chief Executive
Officer and approved by a majority of the other FRC directors then in
14
office (with Messrs. Russell and Phillips, each a "Russell-designated
director"); and (ii) three other persons designated by Northwestern Mutual.
The names, addresses and principal occupations of the initial Russell-
designated directors are as follows:
George F. Russell, Jr., 909 A Street, Tacoma, Washington, 98402; Trustee
and Chairman of the Board, Frank Russell Investment Company; Trustee and
Chairman of the Board, Russell Insurance Funds; Director, Chairman of the
Board, and Chief Executive Officer, Russell Building Management Company,
Inc.; Director and Chairman of the Board, Frank Russell Company, Frank
Russell Securities, Inc., Frank Russell Trust Company, Frank Russell
Investments (Delaware), Inc.; Director, Frank Russell Investment
Management Company; Director, Chairman of the Board and President, Russell
20/20 Association.
Michael J.A. Phillips, 909 A Street, Tacoma, Washington, 98402;
Director, President and Chief Executive Officer, Frank Russell Company;
Director and President, Frank Russell Investments (Delaware), Inc.;
Director, Frank Russell Capital Inc., Frank Russell Japan Co., Ltd., Frank
Russell Trust Company, Russell Systems Limited, Frank Russell Company
Limited and Frank Russell Company Pty Limited.
The three initial directors to be designated by Northwestern Mutual have not
yet been determined, but will be selected prior to the closing of the
Transaction. It is currently anticipated that such directors will be selected
from among the executive officers of Northwestern Mutual.
The Governance Agreement, which will terminate no later than December 31,
2008, vests the officers of FRC with the responsibility for day-to-day
management and implementation of FRC's annual operating budget and strategic
plan. However, FRC Board approval is required before certain specified actions
may be taken by FRC or its subsidiaries including, (i) the registration,
issuance and/or sales of securities of FRC and its subsidiaries; (ii) the
merger, consolidation or sale of a substantial portion of assets with or to
another entity (other than another FRC company); (iii) entering into certain
joint ventures, partnerships or other business combinations or acquisitions;
(iv) entering into any material business or line of business other than
investment management, investment consulting, securities trading, analytical
services, and other similar financial services, or discontinuing any material
line of business; (v) entering into material exclusivity contracts, or other
agreements, which materially restrict the manner in which FRC or its
subsidiaries conduct their investment management business in any jurisdiction,
or any U.S. distribution agreements with any life insurance company or life
insurance marketing company other than Northwestern Mutual and its affiliates;
(vi) selling, leasing or otherwise disposing of certain assets or property;
(vii) assuming, incurring, or becoming liable for certain material
indebtedness for borrowed money; (viii) pledging, mortgaging or encumbering
certain assets; (ix) amending its articles of
15
incorporation or bylaws or undertaking any recapitalization or similar plan;
(x) changing FRC's heads of internal audit or compliance; (xi) approving any
transaction with key employees or certain related parties; (xii) taking any
action with respect to a FRC stockholder meeting; (xiii) declaring dividends
or distributions on FRC's shares; or (xiv) taking any action required to be
taken or approved by the FRC Board under Washington State corporate law. With
respect to (iv) and (v) above, FRC Board approval must include the approval of
the Chief Executive Officer of FRC. In addition, for a period of ten years
from the date of the Governance Agreement, FRC may not change its name or move
its principal place of business to a location other than Tacoma, Washington, without the unanimous vote or consent of the FRC Board.
The closing of the Transaction is subject to a number of conditions,
including, among others, approval by FRC shareholders; a determination that at
the closing date FRC's annualized revenues from investment advisory, retainer
consulting and analytical services (neutralized for market effect and currency
fluctuations) have not fallen below 90% of the level of such revenues as of
July 31, 1998; the absence of any restraining order or injunction preventing
the Transaction, or any litigation seeking such an injunction; the continued
accuracy of the representations and warranties contained in the Transaction
Agreement; delivery and/or filing of certain documents contemplated by the
Transaction Agreement; all material governmental approvals having been
obtained; holders of not more than 2% of the outstanding FRC common stock
having exercised their statutory appraisal rights; and compliance in all
material respects with all agreements and obligations contained in the
Transaction Agreement. Holders entitled to vote a percentage of shares of FRC
sufficient to approve the Transaction have entered into an agreement with
Northwestern Mutual in which they have agreed to vote such shares in favor of
the approval of the Transaction. The Transaction is expected to close on or
about December 30, 1998, with the merger becoming effective on January 1,
1999.
The information set forth under this Proposal #3 concerning FRC and the
Transaction has been provided to the Investment Company by FRC, and the
information set forth under this Proposal #3 concerning Northwestern Mutual
has been provided to the Investment Company by Northwestern Mutual.
Founded in 1857, Northwestern Mutual is a mutual insurance corporation
organized under the laws of Wisconsin. Its home office is located at 720 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202-4797. Northwestern Mutual's
products consist of a full range of permanent and term life insurance,
disability income insurance, long term care insurance, mutual funds and
annuities for personal, estate, retirement, business and benefits planning.
Northwestern Mutual provides its insurance products and services through an
exclusive network of approximately 7,200 agents associated with over 100
general agencies nationwide. Northwestern Mutual leads the U.S. in both
individual life insurance sold annually (approximately $78 billion in 1997)
and total individual life insurance in force (more than $500 billion at June
30, 1998). Northwestern Mutual employs over 3,600 people, mostly in Milwaukee,
Wisconsin.
16
FRC, one of the world's leading investment management and consulting firms,
provides investment advice, analytical tools and funds to institutional and
individual investors in more than 30 countries. FRC, through its subsidiaries,
currently manages approximately $40 billion in assets and provides investment
strategy consulting, including manager selection, for more than $1 trillion in
retainer client assets. It is also well known for its family of market
indexes, including the Russell 2000(R). Russell indexes provide complete sets
of performance benchmarks for investors in Australia, Canada, Japan and the
United States. FRC is a three-time winner of Washington CEO magazine's "Best
Large Company to Work For" award in Washington State, and in 1997 was chosen
from among some 12 million family companies to receive the "National Family
Business of the Year" Award. Founded in 1936, the FRC organization is an
established presence in the asset management and mutual fund industry.
REQUIRED VOTE
To be approved, the Management Agreement must receive the affirmative vote
of a "majority of the outstanding voting securities" of each Fund, as defined
in the 1940 Act. Under the 1940 Act, a vote of a majority of the outstanding voting securities of each Fund means the lesser of (i) 67% or more of the
shares of each Fund represented at the Special Meeting, if more than 50% of
the outstanding shares are present at the Special Meeting or represented by
proxy, or (ii) more than 50% of the outstanding shares of each Fund.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE TO APPROVE THE PROPOSED MANAGEMENT AGREEMENT WITH
FRIMCO ON BEHALF OF THE FUNDS, TO TAKE EFFECT
UPON THE ACQUISITION OF FRC BY NORTHWESTERN MUTUAL
PROPOSAL #4: TO APPROVE AN AMENDMENT TO
EACH FUND'S FUNDAMENTAL INVESTMENT
RESTRICTIONS TO INCREASE THE AMOUNT WHICH THE
FUND MAY BORROW TO MEET REDEMPTIONS
WHAT IS THE CURRENT LIMITATION ON BORROWING BY THE FUNDS?
Section 18(f)(1) of the 1940 Act provides that it shall be unlawful for any
registered open-end investment company to issue any class of senior security
or to sell any senior security of which it is the issuer, except that any such
registered company shall be permitted to borrow from any bank; provided, that
immediately after any such borrowing, there is an asset coverage of at least
300 per cent for all borrowings of the investment company; and provided
further, that in the event that such asset coverage shall at any time fall
below 300 per cent the registered company shall, within three days thereafter
(not including Sundays and holidays) or such longer period as the SEC may
allow, reduce
17
the amount of its borrowings to an extent that the asset coverage of such
borrowings shall be at least 300 per cent.
The Investment Company, on behalf of the Funds, has previously adopted a
fundamental investment restriction that limits the borrowing authority of each
sub-trust to less than the amount that is permitted by the 1940 Act as
described in the prior paragraph. Specifically, each Fund's investment
restriction on borrowing currently provides:
"[The Fund will not:] Borrow amounts more than 5% of the Fund's total
assets taken at cost or at market value, whichever is lower, and only from
banks as a temporary measure for extraordinary or emergency purposes,
except that [the] Fund may engage in reverse repurchase agreements to meet
redemption requests without immediately selling any portfolio instruments.
The Fund will not mortgage, pledge or in any other manner transfer as
security for any indebtedness, any of its assets. Collateral arrangements
with respect to margin for futures contracts are not deemed a pledge of
assets."
WHY IS AN INCREASE IN THE BORROWING LIMITATION PROPOSED?
At a Board meeting held on October 5, 1998, management reported to the Board
on the prospects for entering into a line of credit for the Investment Company
with a commercial bank, whereby the Investment Company's sub-trusts would be
permitted to borrow money under the line of credit in order to meet redemption
requests. This practice would permit the Funds to pay redemption proceeds to
shareholders without the need to make untimely and disadvantageous
dispositions of securities. Given the current investment restriction of the
Investment Company, borrowings by the Funds for this purpose would be limited
to five percent of each Fund's assets.
At the Board meeting, management recommended that the Trustees consider
approving a revision to the fundamental restriction that would authorize a
higher borrowing level for the purpose of efficiently meeting shareholder
redemption requests. FRIMCo, in advocating an increase in the borrowing limits
for the Investment Company's sub-trusts, noted that raising the maximum level
of borrowing to conform to the 1940 Act's limitation would give the Investment
Company's money managers greater flexibility in meeting shareholder redemption
requests.
The officers of the Investment Company noted that an increase in the maximum
level of borrowing permitted to the Investment Company's sub-trusts would
permit the Investment Company to negotiate a larger line of credit with a
bank, although the officers advised the Board that there is no current
intention to do so at this time.
At that meeting, the Board approved a proposal to increase the borrowing
limit under each Fund's fundamental investment restriction, and directed that
the officers of the Investment Company submit to Shareholders a proposal to
approve such amendment
18
to permit borrowing at a higher level by the Funds. If approved, each Fund's
investment restriction would be revised to state:
"[The Fund will not:] Borrow money, except that the Fund may borrow as a
temporary measure for extraordinary or emergency purposes, and not in
excess of five percent of its net assets; provided, that the Fund may
borrow to facilitate redemptions (not for leveraging or investment),
provided that borrowings do not exceed an amount equal to 33 1/3% of the
current value of the Fund's assets taken at market value, less liabilities
other than borrowings. If at any time the Fund's borrowings exceed this
limitation due to a decline in net assets, such borrowings will be reduced
to the extent necessary to comply with this limitation within three days.
Reverse repurchase agreements will not be considered borrowings for
purposes of the foregoing restriction, provided that the Fund will not
purchase investments when borrowed funds (including reverse repurchase
agreements) exceed 5% of its total assets."
The revised fundamental investment restriction will take effect after
receipt of approval by Shareholders.
To be approved, the proposal must receive the affirmative vote of "a
majority of the outstanding voting securities" of each Fund,Shares, as defined in the 1940 Act, of a Sub-Trust, by vote of a majority of the Trustees or written instrument executed by a majority of their number then in office, terminate any of the following Sub-Trusts of the Trust, or any Class of any such Sub-Trust, at any time by prior written notice to the Shareholders of that Sub-Trust or Class:
Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund, Core Bond Fund, Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund and as described in more detailEquity Growth Strategy Fund.
Required Vote
The persons named on the proxy card intend, in the last paragraph under Proposal
#3.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE TO APPROVEabsence of contrary instructions, to vote all proxies in favor of the approval of the changes to the liquidation provision of the Master Trust Agreement set forth above for each Fund. A CHANGE IN
EACH FUND'S FUNDAMENTAL RESTRICTIONS TO INCREASE THE
LIMITS ON BORROWING MONEY FOR THE PURPOSE
OF MEETING REDEMPTIONS
19
INFORMATION REGARDING THE CURRENT
MANAGEMENT AGREEMENT
The table below sets forth (i)Shareholder may vote for or against the net assetsproposal for each Fund. If an executed proxy card is received without voting instructions, the shares will be voted to approve the proposal for each Fund.
Your Insurance Company may vote each Fund’s shares held by the Accounts for which no timely instructions are received in proportion to the voting instructions which are received with respect to such Fund.
Pursuant to the Master Trust Agreement, the Shareholders of each Fund aswill vote separately on the proposal. The Master Trust Agreement requires that in order for the proposal to be effective with respect to a Fund, the proposal must be approved by the vote of Shareholders of the Investment Company's year ended December 31, 1997; (ii)Fund holding a majority of the rateshares of management
fees, computed daily and payable monthly, tothe Fund present at a meeting of Shareholders at which FRIMCoa quorum is entitled forpresent. Approval of the services provided and expenses assumed pursuant toproposal by Shareholders of any one Fund is not contingent on the Management Agreement;
(iii)approval of the actual management fees (netproposal by Shareholders of waivers) paid by the Funds for the
year ended December 31, 1997; and (iv) the management fees paid by FRIMCo to
money managers for their services for the year ended December 31, 1997.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE
“FOR” THE APPROVAL OF CERTAIN CHANGES TO THE
LIQUIDATION PROVISION OF THE MASTER TRUST AGREEMENT
AS DESCRIBED IN PROPOSAL 2. ANY EXECUTED UNMARKED PROXY
CARDS THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
PROPOSAL 3
TO APPROVE CERTAIN CHANGES TO THE REORGANIZATION PROVISION
OF THE MASTER TRUST AGREEMENT
This proposal will be voted on separately by Shareholders of Multi-Style Equity Fund; 1.25%
for theFund, Aggressive Equity Fund; 1.30% for theFund, Non-U.S. Fund, Real Estate Securities Fund and 0.80% for the
Core Bond Fund. Any such waiver may be revised or eliminated at any time.
For the year ended December 31, 1997, the brokerage commissions paid by the
Funds were:
Multi-Style Equity Fund............. $36,614
Aggressive Equity Fund.............. $39,991
Non-US Fund......................... $22,186
The Core Bond Fund normally does not pay a stated brokerage commissiononly.
After careful consideration, the Board of Trustees has concluded that it is in the best interests of the Trust’s Shareholders to allow the reorganization (including merger) of any Fund without the specific approval of the Shareholders of such Fund. To effect this change, the Board of Trustees has unanimously approved and recommends for approval by Shareholders an amendment to the Trust’s Master Trust Agreement providing an exception from the provision that gives Shareholders of the following Funds the right to vote on a
transaction. Theany potential reorganization of those Funds:
Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund and Core Bond Fund.
The amendment also clarifies and simplifies the reorganization provision of the Master Trust Agreement.
The current reorganization provision of the Master Trust Agreement allows for Funds established on or after August 23, 2005 to be reorganized without Shareholder approval. Funds established before August 23, 2005 must receive Shareholder approval before a reorganization can occur. The Board of Trustees believes that standardizing the reorganization provision for all Funds of the Trust may enhance efficiency in administering the various Funds. The revised reorganization provision would also give the Board of Trustees added flexibility to make decisions they feel are in the Shareholders’ best interests when considering a Fund does, however, engagereorganization, without causing a Fund to incur the time and expense of soliciting Shareholder approval where, in transactionsthe Board’s judgment this is in the best interest of Shareholders.
Although the Board of Trustees unanimously agrees that this amendment to the Master Trust Agreement is in the best interests of the Trust’s Shareholders, the amendment would remove the right of Shareholders of a Fund to vote on proposed reorganizations of that Fund. If the amendment is approved, Shareholders of a Fund will no longer be required or entitled to vote on the reorganization of that Fund. Therefore, this amendment to the Master Trust Agreement must be approved by the Shareholders of those Funds. The Board of Trustees believes that this amendment is in the best interests of the Trust’s Shareholders. The amendment will not alter in any way the Board of Trustees’ existing fiduciary obligations to act with dealers acting as principaldue care and in the costsShareholders’ interests. Before using any new flexibility that the proposed amendment may afford, the Board of Trustees must first consider the Shareholders’ interests and then act in accordance with such interests. Notwithstanding the above, if the proposed amendment is approved, the Board of Trustees maintains the right, in its sole discretion, to seek Shareholder approval of a potential reorganization of a Fund.
To the extent that the Board of Trustees approves the reorganization of a Fund with another Fund that has different investment strategies or risks, Shareholders will be subject to those different investment strategies or risks. The nature of such transactions involve dealer
spreads rather than brokerage commissions.
20
DIRECTORS AND OFFICERS OF FRIMCO
Set forth below arerisks will depend on the names and current positionsFund(s) being reorganized. Additionally, the reorganization of a Fund may have tax ramifications for Shareholders. However, the officers and
directorsBoard of FRIMCo, along with their positions with FRC and/orTrustees will only approve a reorganization if it finds that the Investment
Company, as applicable:
NAME INVESTMENT COMPANY FRIMCO FRC
---- ------------------ ------ ---
George F. Russell, Trustee, Chairman Director Director, Chairman
Jr. ................... of the Board of the Board
Lynn L. Anderson........ Trustee, President, and Director, Chairman Director
Chief Executive of the Board and
Officer Chief Executive Officer
Randall P. Lert......... Director of Investments Director --
Eric A. Russell......... -- Director, President Director
Karl J. Ege............. Secretary and Secretary and Director,
General Counsel General Counsel Secretary and
General Counsel
Peter F. Apanovitch..... Manager of Short Term Manager of Short Term --
Investment Funds Investment Funds
Mark E. Swanson......... Treasurer and Chief Interim Director of Fund --
Accounting Officer Administration and
Accounting
INFORMATION REGARDING THE SOLICITATION AND REVOCATION
OF PROXIES AND VOTING INFORMATION
This Proxy Statementreorganization is provided on behalfin Shareholders’ best interests. Any exercise of the Board of TrusteesTrustees’ increased authority under the amendment also would be subject to any applicable requirements of the Investment Company in connection with a Special Meeting in lieu of Annual
Meeting of1940 Act and Massachusetts law. In all cases, the amendment would require that Shareholders receive prior written notification of the Investment Companyreorganization prior to be held at the officesits consummation.
Section 7.2 of the Investment Company at 909 A Street, Tacoma, Washington 98402, on Thursday,
November 19, 1998 at 11:00 a.m., local time, and at any or all adjournments
thereof. This Proxy Statement is being mailed to Shareholders on or about
October 19, 1998. You may revoke your proxy at any time before it is exercised
by delivering a written notice toMaster Trust Agreement addresses reorganizations of Funds. Appendix D, attached hereto, highlights the Investment Company expressly revoking
your proxy, by signing and forwarding to the Investment Company a later-dated
proxy, or by attending the Special Meeting and casting your votes in person.
The Investment Company requests that broker-dealer firms, custodians,
nominees and fiduciaries forward proxy material to the beneficial owners of
the shares held of record by such persons. Under the terms of certain
exemptive orders which the SEC has issued to the Investment Company, insurance
companies which have placed assetsdifferences in the Funds are required to forward
proxies to policy holders to request voting instructions. The costcurrent language of soliciting these proxiesSection 7.2 and the proposed amended language of Section 7.2. If Proposal 3 is approved, Section 7.2 will be borne by each Fund,restated in its entirety as follows:
Reorganization. Except as set forth below, the Trustees may, subject to the extent of its
direct operational expenses, and by FRIMCo. In addition to solicitations by
mail, some of the
21
officers and employees of the Investment Company, FRIMCo and Russell Fund
Distributors, Inc. ("Distributors"), without extra remuneration, may conduct
additional solicitations by telephone, or facsimile or computer transmission
or in person.
WHO MAY VOTE AT THE SPECIAL MEETING?
The Board of the Investment Company has fixed the close of business on
September 21, 1998, as the record date (the "Record Date") for the
determination of Shareholders entitled to notice of and to vote at the Special
Meeting and any adjournments thereof. Only holders of record of shares at the
close of business on the Record Date are entitled to notice of, and to vote
at, the Special Meeting and any adjournments thereof. The holders of 5% or
more of each Fund's shares are listed in the section "Principal Shareholders"
below. At the close of business on the Record Date, the total number of voting
shares of each Fund issued and outstanding was the following:
Multi-Style Equity Fund................................... 3,984,687 Shares
Aggressive Equity Fund.................................... 1,737,951 Shares
Non-U.S. Bond Fund........................................ 1,608,032 Shares
Core Bond Fund............................................ 2,377,688 Shares
The total number of voting shares of the Investment Company issued and
outstanding was 9,708,359.
The holder of record of each full share of beneficial interest of each Fund
outstanding as of the close of business on the Record Date is entitled to one
vote for each share held of record upon each matter properly submitted to the
Special Meeting or any adjournments thereof, with a proportionate vote for
each fractional share.
WHAT OTHER BUSINESS WILL BE DISCUSSED AT THE SPECIAL MEETING IN LIEU OF ANNUAL
MEETING?
The Board of Trustees does not intend to present any matters before the
Special Meeting in lieu of Annual Meeting other than as described in this
Proxy Statement, and is not aware of any other matters to be brought before
the Meeting or any adjournments thereof by others. IF ANY OTHER MATTER LEGALLY
COMES BEFORE THE MEETING, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS OF THE BOARD OF TRUSTEES OF THE INVESTMENT COMPANY, AND IN THE
JUDGMENT OF THE NAMED PROXIES.
WHAT IF A QUORUM IS NOT PRESENT AT THE SPECIAL MEETING IN LIEU OF ANNUAL
MEETING?
In the event a quorum is not present at the Special Meeting in lieu of
Annual Meeting or sufficient votes to approve a proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. A shareholder vote may be taken on
any other matter to properly come before the Meeting prior to such adjournment
if sufficient votes to approve such matters have been received and such vote
is otherwise appropriate. Any adjournment of the Meeting will require the affirmative vote of a majority of thosethe outstanding voting Shares, as defined in the 1940 Act, of each Sub-Trust voting separately by Sub-Trust, sell, convey, merge and transfer the assets of the Trust (any such transaction is referred to in this Section 7.2 as a “transfer”), to another trust, partnership, association or corporation organized under the laws of any state of the United States, in exchange for cash, shares present ator other securities with such transfer either (1) being made subject to, or with the Meetingassumption by the transferee of, the liabilities belonging to the Trust, or represented(2) not being made subject to, or not with the assumption of such liabilities.
The Trustees may, subject to the affirmative vote of a majority of the outstanding voting Shares, as defined in the 940 Act, of a Sub-Trust, transfer the assets belonging to any one or more Sub-Trusts, to another trust, partnership, association or corporation organized under the laws of any state of the United States, or to the Trust to be held as assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares or other securities (including, in the case of a transfer to another Sub-Trust of the Trust, Shares of such other Sub-Trust) with such transfer either (1) being made subject to, or with the assumption by proxythe transferee of, the liabilities belonging to each Sub-Trust the assets of which are so transferred, or (2) not being made subject to, or not with the assumption of such liabilities. Following such transfer, the Trustees shall distribute such cash, shares or other securities (giving due effect to the assets and voting. liabilities belonging
to and any other differences among the various Sub-Trusts the assets belonging to which have so been transferred) among the Shareholders of the Sub-Trust the assets belonging to which have been so transferred; and if all of the assets of the Sub-Trust have been so transferred, the Sub-Trust shall be terminated.
The Trustees may, subject to the affirmative vote of a majority of the outstanding voting Shares, as defined in the 1940 Act, of each Sub-Trust voting separately by Sub-Trust, (1) consolidate the Trust, either as successor, survivor or non-survivor, with one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, to form a new consolidated trust, partnership, association or corporation under the laws of which any one of the constituent entities is organized, or (2) merge the Trust, either as successor, survivor or non-survivor, into one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, or have one or more such trusts, partnerships, associations or corporations merged into it, any such consolidation or merger to be upon such terms and conditions as are specified in an agreement and plan of reorganization entered into by the Trust, in connection therewith.
The Trustees may, subject to the affirmative vote of a majority of the outstanding voting Shares, as defined in the 1940 Act, of a Sub-Trust, (1) consolidate any one or more Sub-Trusts, either as successor, survivor or non-survivor, with one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, to form a new consolidated trust, partnership, association or corporation under the laws of which any one of the constituent entities is organized, or (2) merge any one or more Sub-Trusts, either as successor, survivor or non-survivor, into one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, or have one or more such trusts, partnerships, associations or corporations merged into it, any such consolidation or merger to be upon such terms and conditions as are specified in an agreement and plan of reorganization entered into by one or more Sub-Trusts, as the case may be, in connection therewith. The terms “merge” or “merger” as used herein shall also include the purchase or acquisition of any assets of any other trust, partnership, association or corporation which is an investment company organized under the laws of the Commonwealth of Massachusetts or any other state of the United States. The Trustees shall provide prior notice to affected Shareholders of a reorganization effected under this Section 7.2.
The foregoing provisions shall also apply, with appropriate modifications as determined by the Trustees, to the transfer, consolidation or merger of any Class of any Sub-Trust.
Notwithstanding the above provisions of Section 7.2, any transaction effected pursuant to this Section 7.2 with respect to any one of the following Sub-Trusts may be authorized by vote of a majority of the Trustees or written instrument executed by a majority of their number then in office, and without the affirmative vote of the holders of a majority of the outstanding voting Shares, as defined in the 1940 Act, of that Sub-Trust:
Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund, Core Bond Fund, Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund and Equity Growth Strategy Fund.
Required Vote
The persons named as proxies on the proxy 22
willintend, in the absence of contrary instructions, to vote against any such adjournment thoseall proxies required to be voted
against such proposal. They will vote in favor of the approval of the changes to the reorganization provision of the Master Trust Agreement set forth above for each Fund. A Shareholder may vote for or against the proposal for each Fund. If an adjournment all other
proxies which they are entitled to vote. The costs of any such additional
solicitation and of any adjourned sessionexecuted proxy card is received without voting instructions, the shares will be bornevoted to approve the proposal for each Fund.
Your Insurance Company may vote each Fund’s shares held by the Investment
Company. Abstentions and broker "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have notAccounts for which no timely instructions are received in proportion to the voting instructions from the
beneficial owner or other person entitled to vote shares on a particular
matterwhich are received with respect to such Fund.
Pursuant to the Master Trust Agreement, the Shareholders of each Fund will vote separately on the proposal. The Master Trust Agreement requires that in order for the proposal to be effective with respect to a Fund, the proposal must be approved by the vote of Shareholders of the Fund holding a majority of the shares of the Fund present at a meeting of Shareholders at which a quorum is present. Approval of the brokers or nominees doproposal by Shareholders of any one Fund is not have discretionary
power)contingent on the approval of the proposal by Shareholders of any other Fund. To the extent that the proposal is not approved by Shareholders of a Fund, then the reorganization of that Fund will continue to require approval by Shareholders of that Fund.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE
“FOR” THE APPROVAL OF CERTAIN CHANGES TO THE
REORGANIZATION PROVISION OF THE MASTER TRUST AGREEMENT
AS DESCRIBED IN PROPOSAL 3. ANY EXECUTED UNMARKED PROXY
CARDS THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
TO APPROVE A CHANGE IN STATUS OF
REAL ESTATE SECURITIES FUND FROM
A “DIVERSIFIED COMPANY” TO A “NON-DIVERSIFIED COMPANY”
This proposal will be countedvoted on by Shareholders of Real Estate Securities Fund only.
After careful consideration, the Board of Trustees has concluded that it is in the best interests of the Trust’s Shareholders to change the status of Real Estate Securities Fund from a “diversified company” to a “non-diversified company.” To effect this change, the Board of Trustees has unanimously approved and recommends for approval by Shareholders a change in the status of Real Estate Securities Fund from a “diversified company” to a “non-diversified company.”
The Fund is presently a “diversified company” under the 1940 Act. This means that as shares that are present for purposesto 75% of determining
the presence of a quorum. Abstentions (but not broker non-votes) have the
effect of a "no" vote when determining whether a proposal has received
sufficient votes to be approved.
PRINCIPAL SHAREHOLDERS
As of September 21, 1998, the only persons known by the Investment Company
to be beneficial owners ofits assets, no individual security can represent more than 5% of the Fund’s total assets, and the Fund cannot own more than 10% of any one issuer’s outstanding voting securities. These restrictions do not apply to securities issued by the U.S. Government or any of its agencies or instrumentalities. The Fund’s diversification policy is a fundamental policy that can be changed only by a shareholder vote.
The Fund’s Board of Trustees approved a proposal from RIMCo to change the Fund’s status from a “diversified company” to a “non-diversified company,” subject to shareholder approval. If shareholders approve the proposed change in status, the Fund would become a “non-diversified company” under the 1940 Act. The change would enable the Fund to invest in the securities of a single issuer without limit under the 1940 Act.
Recently, consolidation in the Real Estate Investment Company'sTrust (“REIT”) industry has created a number of very large companies that are included in the FTSE NAREIT Equity REITs Index, the Fund’s benchmark index. As a diversified fund, the Fund is limited in its ability to take overweight positions in principal benchmark constituents. The proposed change to non-diversified status is intended to provide the Fund with more investment flexibility to respond to consolidation in the REIT industry and take larger positions in one or more issuers in the REIT industry. As a non-diversified company, however, the Fund would continue to operate in a manner so that it will qualify as a “regulated investment company” under the Internal Revenue Code (although it reserves the right not to qualify). If it qualifies, the Fund generally does not have to pay federal income taxes if more than 90% of its earnings are distributed to shareholders. To qualify, the Fund must meet a number of conditions, including a diversification requirement, at the close of each quarter of the taxable year. To satisfy the diversification requirement, at the end of each taxable year quarter, first, not more than 25% of the market value of the Fund’s total assets may be invested in (i) the securities (other than Government securities and securities of other regulated investment companies) of a single issuer, (ii) the securities (other than the securities of other regulated investment companies) of two or more issuers that are engaged in the same or related trades or businesses and are controlled by the Fund, or (iii) the securities of one or more qualified publicly-traded partnerships (i.e., publicly-traded partnerships other than those that derive at least 90% of their annual gross income from certain passive sources). Second, at least 50% of the market value of its total assets must be represented by cash and cash items (including receivables), Government securities and securities of other regulated investment companies, and other securities, with such other securities being limited such that (1) no more than 5% of the market value of the Fund’s total assets may be invested in the securities of a single issuer, and (2) the Fund must not own more than 10% of the outstanding voting securities were:
As a non-diversified fund, the Fund will be subject to additional risk. To the extent the Fund invests a higher percentage of its assets in the securities of a single issuer or a group of issuers, the Fund’s performance will be more vulnerable to changes in the market value of the single issuer or group of issuers, and more susceptible to risks associated with a single economic, political or regulatory occurrence, than it would be had the Fund continued to operate as a diversified fund.
Required Vote
The persons named on the proxy card intend, in the absence of contrary instructions, to vote all proxies in favor of the approval of a change in status of Real Estate Securities Fund from a “diversified company” to a “non-diversified company”. A Shareholder may vote for or against the Proposal. If an executed proxy card is received without voting instructions, the shares will be voted to approve the Proposal.
Your Insurance Company will vote each Fund’s shares held by the Accounts for which no timely instructions are received in proportion to the voting instructions which are received with respect to such Fund.
The favorable vote of the holders of a “majority” (as defined in the 1940 Act) of the outstanding shares of the fund is required for the approval of the fund becoming non-diversified. Under the 1940 Act, the vote of the holders of a “majority” of the outstanding shares of the fund means the vote of the holders of the lesser of (a) 67% or more of its shares present at the special meeting or represented by proxy if the holders of 50% or more of its shares are so present or represented; or (b) more than 50% of its outstanding shares.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND THAT THE SHAREHOLDERS OF THE REAL ESTATE SECURITIES FUND VOTE “FOR” THE APPROVAL OF A CHANGE IN STATUS OF REAL ESTATE
SECURITIES FUND FROM A “DIVERSIFIED COMPANY” TO A “NON-DIVERSIFIED COMPANY” AS DESCRIBED IN PROPOSAL 4. ANY EXECUTED UNMARKED PROXY CARDS THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
The Trustees know of no other business to be presented at the Special Meeting other than the Proposals, and do not intend to bring any other matters before the Special Meeting. However, if any additional matters should be properly presented, proxies will be voted in the discretion of the persons named as proxies.
INFORMATION HOW AREABOUT THE FUNDS DISTRIBUTED?TRUST
Investment Advisor, Administrator and Transfer Agent
RIMCo provides or oversees the provision of all general management and administration, investment advisory and portfolio management services for the Funds and acts as transfer agent for the Funds. RIMCo develops the investment program for each of the Funds. Except for the Funds of Funds, RIMCo selects Money Managers for the Funds (subject to approval by the Board), allocates assets among Money Managers, monitors the Money Managers’ investment programs and results, and may exercise investment discretion over certain assets. The Funds of Funds invest in other RIF or RIC Funds. RIMCo’s mailing address is 909 A Street, Tacoma, Washington 98402. Unlike most investment companies that have a single organization that acts as both administrator and investment advisor, the Funds divide responsibility for corporate management and investment advice between RIMCo and a number of different Money Managers. A list of the Money Managers and their addresses is provided in Appendix B to this Proxy Statement.
Distributor
Russell Fund Distributors, located atInc. (the “Distributor”) serves as the distributor of the Trust’s shares. The Distributor receives no compensation from the Trust for its services. The Distributor is a wholly owned subsidiary of RIMCo and its mailing address is 909 A Street, Tacoma, WA 98402, a wholly-owned
subsidiary of FRIMCo,98402.
Custodian
The Trust’s custodian is State Street Bank and Trust Company and its mailing address is Josiah Quincy Building, 200 Newport Avenue, North Quincy, MA 02171.
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP (“PwC”) serves as the principal underwriterIndependent Registered Public Accounting Firm of the Investment
Company's shares. Distributors receivesTrust. PwC is responsible for performing annual audits of the financial statements and financial highlights of the Funds in accordance with the auditing standards of the Public Company Accounting Oversight Board and a review of federal tax returns. The mailing address of PwC is 1420 Fifth Avenue, Suite 1900, Seattle, WA 98101.
Upon the recommendation of the Audit Committee, the Board selected the firm of PwC as the independent registered public accounting firm of the Trust for the fiscal year ending December 31, 2007.
Audit Fees.The aggregate fees billed by PwC for professional services rendered for the audit of the Trust’s annual financial statements for the fiscal years ended December 31, 2005 and 2006 were $109,256 and $117,500, respectively.
Audit-Related Fees.PwC billed aggregate fees for assurance and related services rendered that are reasonably related to the audit of the Trust’s annual financial statements but not reported under “Audit-Fees” above for the fiscal years ended December 31, 2005 and 2006 of $94,530 and $103,799, respectively.
Tax Fees.The aggregate fees billed by PwC for professional services rendered for tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2005 and 2006 were $73,537 and $79,000, respectively.
All Other Fees.The aggregate fees billed by PwC for professional services rendered for products and services other than those described above for the fiscal years ended December 31, 2005 and 2006 were $16,250 and $17,500, respectively. Substantially all of these services were rendered in connection with the issuance of consent letters related to filings by the Trust with the Securities and Exchange Commission.
The Audit Committee has considered whether the services described above are compatible with PwC’s independence. The Audit Committee has also considered whether the provision of all other non-audit services rendered to RIMCo, or an affiliate thereof that provides ongoing services to the Trust, is compatible with maintaining PwC’s independence. The Audit Committee has adopted a policy requiring pre-approval by the committee of all services (audit and non-audit) to be provided to the Trust by its independent registered public accounting firm. In accordance with that policy, the Audit Committee has given its approval for the provision of audit services by PwC for the fiscal year ended December 31, 2006 and has also given its general pre-approval (“general pre-approval”) for up to a year in advance for the provision by PwC of particular categories or types of audit-related, tax and permitted non-audit services (including permitted non-audit services to the Trust, RIMCo and any entity controlling, controlled by, or under common control with RIMCo that provides ongoing services to the Trust), subject to specific budgets. Services which have not received general pre-approval or which exceed their budgets must receive specific approval of the Audit Committee (“specific approval”). In cases where the Audit Committee’s pre-approval is not covered by one of those approvals, the policy provides that the Audit Committee may delegate general or specific pre-approval authority to one or more of its members, and that any such pre-approvals will then be communicated for informational purposes only to the full Audit Committee at its next scheduled meeting. To date, no compensation fromsuch delegation of authority has been made by the Investment
CompanyAudit Committee.
Pre-approval has not been waived in respect of services described under “Audit-Related Fees,” “Tax Fees” or “All Other Fees” since the date on which the aforementioned pre-approval procedures were adopted by the Audit Committee.
The aggregate non-audit fees billed by PwC for its services.
MASSACHUSETTS STATE LAW CONSIDERATIONS
services rendered to the Trust and to RIMCo, or an affiliate thereof that provides ongoing services to the Trust, for the fiscal years ended December 31, 2005 and 2006 were $27,450 and $17,500, respectively.
Representatives of PwC are not expected to be present at the Special Meeting, but will be given the opportunity to make a statement if they so desire and will be available should any matter arise requiring their presence.
Massachusetts State Law Considerations
The Investment CompanyTrust is an entity of the type commonly known as a "Massachusetts“Massachusetts business trust."” Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. 23
of the Investment Company contains an express disclaimer of shareholderShareholder liability for acts or obligations of the Investment CompanyTrust and provides for indemnification and reimbursement of expenses out of the Investment Company'sTrust’s property for any shareholderShareholder held personally liable for the obligations of the Investment Company.Trust. The Master Trust Agreement also provides that the Investment CompanyTrust may maintain appropriate insurance (for example, fidelity bonding and errors and omissions insurance) for the protection of the Investment Company,Trust, the shareholdersShareholders of the sub-trusts, Trustees, officers, employees and agents covering possible tort and other liabilities. Thus, the risk ofthat a shareholder incurringShareholder would incur financial loss on account of shareholderShareholder liability also is limited to circumstances in which both inadequate insurance exists and the Investment
CompanyTrust itself is unable to meet its obligations.
Under Massachusetts law, the Investment CompanyTrust is not required to hold annual meetings. In the past, the Funds have availed themselves of these provisions of state law to achieve cost savings by eliminating printing costs, mailing charges and other expenses involved to hold routine annual meetings. Each FundThe Funds may, however, hold a meeting for such purposes as changing fundamental investment restrictions, approving a new investment management
agreement or any other matters which are required to be acted on by shareholdersShareholders under the 1940 Act. In addition, a meeting also may be called by shareholdersShareholders holding at least 10% of the shares entitled to vote at the meeting for the purpose of voting upon the removal of Trustees, in which case shareholdersShareholders may receive assistance in communicating with other shareholders
suchShareholders as that provided in Section 16(c) of the 1940 Act. The Investment CompanyTrust is holding the Special Meeting because of the items that must be presented for Shareholders'Shareholders’ consideration and approval.
FURTHER INFORMATION ABOUT VOTING AND THE SPECIAL MEETING
Voting Procedures
This Proxy Statement is provided on behalf of the Board in connection with the Special Meeting of the Trust to be held at the offices of the Trust at 909 A Street, Tacoma, Washington 98402, on October 25, 2007, at 10:00 a.m., local time, and any or all adjournments thereof. This Proxy Statement is first being mailed to Shareholders and Contract Owners on or about August 24, 2007.
Contract Owners may revoke their instructions by submitting, before the meeting, written notice of revocation, a later-dated instruction card or a later-dated vote via telephone or the Internet.
Shareholders may revoke their proxy at any time prior to its exercise by voting in person at the Special Meeting or by submitting before the meeting written notice of revocation, a later-dated proxy or a later-dated vote via telephone or the Internet.
The Trust requests that Insurance Companies forward proxy material to Contract Owners.
Record Date
Shareholders of record at the close of business on the Record Date, July 31, 2007, are entitled to be present and to vote at the Special Meeting or any adjournment of the Special Meeting. Contract Owners of record at the close of business on the Record Date, July 31, 2007, are entitled to give voting instructions to their Insurance Company. Each share of record is entitled to one vote on each matter presented at the Special Meeting, with proportionate votes for fractional shares.
Shares Outstanding
The following table sets forth the number of shares of beneficial interest of each class of each Fund outstanding as of June 15, 2007:
Name of Fund | Number of Shares Outstanding | |
Multi-Style Equity Fund: | 28,925,397 | |
Aggressive Equity Fund | 16,188,801 | |
Non-U.S. Fund | 28,198,840 | |
Real Estate Securities Fund | 29,885,093 | |
Core Bond Fund | 29,120,804 | |
Moderate Strategy Fund | 126,445 | |
Balanced Strategy Fund | 417,290 | |
Growth Strategy Fund | 227,648 | |
Equity Growth Strategy Fund | 258,269 |
Voting Rights
The number of shares that you may vote or give voting instructions with respect to is the total of the number shown on the proxy ballot(s) or voting instruction card accompanying this Proxy Statement. Shareholders of record will be entitled to one vote for each full share and a proportionate vote for each fractional share that they held on the Record Date on each matter at the Special Meeting.
Quorum, Voting and Adjournment
The Master Trust Agreement provides that a quorum shall be present at a meeting when a majority of the shares entitled to vote is present at the meeting, but any lesser number shall be sufficient for adjournments. In the event that a quorum is not present at the Special Meeting or sufficient votes to approve a Proposal are not received, the persons named as proxies may propose one or more adjournments of the Special Meeting to permit further solicitation of proxies. A Shareholder vote may be taken on any other matter to properly come before the Special Meeting prior to such adjournment if sufficient votes to approve such matters have been received and such vote is otherwise appropriate. Any adjournment of the Special Meeting will require the affirmative vote of a majority of those shares present at the Special Meeting or represented by proxy and voting. The persons named as proxies on the proxy card will vote against any such adjournment those proxies required to be voted against such Proposal. They will vote in favor of an adjournment all other proxies that they are entitled to vote. The costs of any such additional solicitation and of any adjourned session will be borne by the Trust.
Abstentions will be counted as shares that are present for purposes of determining the presence of a quorum, but which have not been voted. Abstentions will not be counted in favor of, but will have no other effect on, Proposal 1, and will have the effect of a “no” vote on all other Proposals. Accordingly, Shareholders are urged to forward their proxy card or voting instructions promptly.
To the extent that any shares of a Fund are owned directly by any Fund of Funds, those shares will be voted directly by the Funds of Funds in the same proportion as all other votes received from the other holders of such Fund’s shares (so-called “echo voting”). Broker “non-votes” will be excluded in determining the echo vote.
Expenses
The Trust will pay the some of the expenses in connection with this Notice and Proxy Statement and the Special Meeting, including the printing, mailing, solicitation and vote tabulation expenses and out-of-pocket expenses. Some of the expenses in connection with this Notice and Proxy Statement and the Special Meeting, including the printing, mailing, solicitation and vote tabulation expenses and out-of-pocket expenses with respect to Contract Owners may be paid by the Insurance Companies.
Beneficial Owners
As of September 21, 1998,May 7, 2007, the officers and Trustees, including the Nominees, of the Investment
CompanyTrust as a group beneficially owned less than 1% of the shares of each class of each Fund outstanding on such date.
ANNUAL AND SEMI-ANNUAL REPORTS
A Fund will furnish, without charge, a copyAs of June 15, 2007, to the best of the Fund's Annual ReportTrust’s knowledge, no person owned beneficially more than 5% of any class of any Fund, except for the following:
Aggressive Equity Fund—NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY VARIABLE LIFE ACCOUNT, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 43.15%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 42.47%, Record.
Core Bond Fund—NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI
53202-4703, 68.46%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY VARIABLE LIFE ACCOUNT, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 21.81%, Record.
Multi-Style Equity Fund—NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 44.95%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY VARIABLE LIFE ACCOUNT, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 43.22%, Record.
Non-U.S. Fund—NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 50.60%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY VARIABLE LIFE ACCOUNT, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 42.42%, Record.
Real Estate Securities Fund—NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 60.38%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY VARIABLE LIFE ACCOUNT, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 26.84%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT C, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 9.29%, Record.
Balanced Strategy FundNORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 89.49%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT A, ATTN MUTUAL FUND ACCOUNTING N13 NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 8.09%, Record.
Equity Growth Strategy FundNORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 95.55%, Record.
Growth Strategy FundNORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 94.95%, Record.
Moderate Strategy FundNORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT B, ATTN MUTUAL FUND ACCOUNTING N13NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 65.80%, Record. NORTHWESTERN MUTUAL LIFE INSURANCE, COMPANY ACCOUNT A, ATTN MUTUAL FUND ACCOUNTING N13 NW, 720 E WISCONSIN AVE, MILWAUKEE WI 53202-4703, 26.20%, Record. RUSSELL INVESTMENT MANAGEMENT CO, ATTN MARK SWANSON, PO BOX 1616, TACOMA WA 98401-1616, 7.92%, Record.
Shareholder Proposals
The Trust is not required, and does not intend, to hold regular annual meetings of Shareholders. Shareholders wishing to submit proposals for consideration for inclusion in a proxy statement for the most recent Semi-Annual Report succeeding the Annual Report, to a
Shareholder upon request. A Shareholder may receive the report by writingnext meeting of Shareholders should send their written proposals to the Secretary, Russell Insurance Funds,Trust’s offices, 909 A Street, Tacoma, Washington 98402, Attn: Secretary, so they are received within a reasonable time before any such meeting. The Trustees know of no business, other than the matters mentioned in the Notice and described above, that is expected to come before the Special Meeting. Should any other matter requiring a vote of Shareholders arise, including any question as to an adjournment or by telephoning 1-800-787-7354.
By Orderpostponement of the Trustees,
/s/ Karl J. Ege
Karl J. Ege
Secretary
October 19, 1998
24
EXHIBITS TO PROXY STATEMENT
EXHIBIT
A. ListSpecial Meeting, the persons named as proxies will vote on such matters according to their best judgment in the interests of Money Managersthe Trust.
Annual and Semi-Annual Reports
The Funds’ most recent audited financial statements and Annual Report, for the Underlying Funds.
B. Present Management Agreementfiscal year ended December 31, 2006 has been previously mailed to Shareholders, and the Funds’ Semi-Annual Report for the period ended June 30, 2007 will be mailed to Shareholders when it is available. Both Reports are available free of charge. If you have not received one of these Reports for the Fund(s), or would like to receive additional copies, free of charge, please contact your Insurance Company.
Householding
If possible, depending on contract owner registration and address information, and unless you have otherwise opted out, only one copy of this proxy statement will be sent to contract owners at the same address. However, each contract owner will receive separate proxy cards. If you would like to receive a separate copy of the proxy statement, please contact your insurance company. If you currently receive multiple copies of proxy statements and would like to request to receive a single copy of documents in the future, please call your insurance company.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY BALLOT(S) OR INSTRUCTION CARD (OR TAKE ADVANTAGE OF AVAILABLE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES) PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
BOARD OF TRUSTEES
RUSSELL INVESTMENT FUNDS
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
Nominating and Governance Committee Membership
The Nominating and Governance Committee (the "Management Agreement"“Committee”) between theshall be composed entirely of Trustees (“Independent Trustees”) who are not “interested” persons of Frank Russell Investment Company and FRIMCo.
25
EXHIBIT A
As(“FRIC”) as defined in Section 2(a)(19) of the date of this Proxy Statement, the money managers for the Funds,
along with their addresses, are as follows:
MULTI-STYLE EQUITY FUND
Alliance Capital Management, L.P., 601 2nd Ave. South, Suite 5000,
Minneapolis, MN 55402-4322
Equinox Capital Management Inc., 590 Madison Avenue, 41st Floor, New York,
NY 10022
Westpeak Investment Advisors, LP, 1011 Walnut Street, Suite 400, Boulder, CO
80302
AGGRESSIVE EQUITY FUND
Rothschild Asset Management, Inc., 1251 Avenue of the Americas, 51st Floor,
New York, NY 10020
Westpeak Investment Advisors, LP, 1011 Walnut Street, Suite 400, Boulder, CO
80302
NON-U.S. FUND
J.P. Morgan Investment Management, Inc., 522 Fifth Avenue, 14th Floor, New
York, NY 10036
Oechsle International Advisors, LLC, One International Place, 23rd Floor,
Boston, MA 02110
The Boston Company Asset Management, Inc., One Boston Place, 14th Floor,
Boston, MA 02108
CORE BOND FUND
Pacific Investment Management Company, 840 Newport Center Drive, Suite 360,
Newport Beach, CA 92660
Standish, Ayer & Wood, Inc., One Financial Center, Boston, MA 02110
A-1
EXHIBIT B
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT made this 5th day of August, 1996 between RUSSELL
INSURANCE FUNDS, a Massachusetts business trust hereinafter called the "Trust"
and FRANK RUSSELL INVESTMENT MANAGEMENT COMPANY, a Washington corporation,
hereinafter called "FRIMCo."
WHEREAS, the Trust has been organized by and at the expense of a company
affiliated with FRIMCo and operates as an investment company of the "series"
type registered under the Investment Company Act of 1940 ("1940 Act"(the “1940 Act”).
Board Nominations and Functions
| 1. | The Committee shall make nominations to the FRIC Board of Trustees (the “Board”) for Trustee membership on the Board. The Committee shall evaluate candidates’ qualifications for Board membership and, in the case of Independent Trustee candidates, their independence from Frank Russell Investment Management Company (“FRIMCo”), FRIC’s investment manager, and from sub-advisors to FRIC’s portfolios (“money managers”) and other principal service providers. In evaluating all candidates for membership on the Board, the Committee should consider, among other factors that it may deem relevant: |
whether or not the person is willing and able to commit the time necessary for the purposeperformance of investingthe duties of a Trustee;
whether the person is otherwise qualified under applicable laws and reinvesting its assets in portfolios of securities,
each of which has distinct investment objectives and policies (each distinct
portfolio being referredregulations to hereinserve as a "Sub-Trust"), as set forth more fully
in its Master Trust Agreement, its Bylaws and its Registration Statements
under Trustee;
the 1940 Act andcontribution which the Securities Act of 1933, all as heretofore amended
and supplemented; and the Trust desires to avail itself of the services,
information, advice, assistance, and facilities of a manager and to have a
manager perform for it various management, administrative, statistical,
research, money manager selection, investment management, and other services;
and
WHEREAS, FRIMCo is registered as an investment adviser under the Investment
Advisers Act of 1940 and will engage in the business of rendering investment
advice, counseling, money manager recommendation, and supervisory services to
investment consulting clients; and FRIMCo and its affiliated corporations have
undertaken the initiative and expense of organizing the Trust in order to have
a means to commingle assets for certain investors to have access to and
utilize the "Multi-Style, Multi-Manager" method of investment and to provide
services to the Trust in consideration of and on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the Trust and FRIMCo agree as follows:
1. Employment of FRIMCo. The Trust hereby employs FRIMCo to manage the
investment and reinvestment of the Trust's assets and to act as a
discretionary Money Manager to certain of the Sub-Trusts in the manner set
forth in Section 2(B) of this Agreement, and to administer its business and
administrative operations, subject to the direction of the Board of Trustees
and the officers of the Trust, for the period, in the manner, and on the terms
hereinafter set forth. FRIMCo hereby accepts such employment and agrees during
such period to render the services and to assume the obligations herein set
forth. FRIMCo shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized (whether
herein or otherwise), have no authority to act for or represent the Trust in
any way.
2. Obligations of and Services to be provided by FRIMCo. FRIMCo undertakes
to provide the services hereinafter set forth and to assume the following
obligations:
B-1
A. Management and Administrative Services.
(1) FRIMCo shall furnish to the Trust adequate (a) office space,
whichperson may be space within the offices of FRIMCo or in such other place
as may be agreed upon from timeexpected to time, (b) office furnishing,
facilities, and equipment as may be reasonably required for managing
and administering the business and operations of the Trust, including
(i) complying with the business trust, securities, and tax reporting
requirements of the United States and the various states in which the
Trust does business, (ii) conducting correspondence and other
communications with the shareholders of the Trust ("Shareholders"),
and (iii) maintaining or supervising the maintenance of all internal
bookkeeping, accounting, and auditing services and records in
connection with the Trust's investment and business activities. The
Trust agrees that its shareholder recordkeeping services, the
computing of net asset value and the preparation of certain of its
records required by Rule 31 under the 1940 Act are maintained by the
Trust's Transfer Agent, Custodian, and Money Managers, and that with
respect to these records FRIMCo's obligations under this Section 2(A)
are supervisory in nature.
(2) FRIMCo shall employ or provide and compensate the executive,
administrative, secretarial, and clerical personnel necessary to
supervise the provision of the services set forth in sub-paragraph
2(A)(1), and shall bear the expense of providing such services except
as provided in Section 4 of this Agreement. FRIMCo shall also
compensate all officers and employees of the Trust who are officers or
employees of FRIMCo, or its affiliated companies.
B. Investment Management Services.
(1) The Trust intends to appoint one or more persons or companies
("Money Manager[s]") for each of the Sub-Trusts or segments thereof,
and each Money Manager shall have full investment discretion and shall
make all determinations with respect to the investment of a Sub-
Trust's assets assigned to the Money Manager and the purchase and sale
of portfolio securities with those assets, and such steps as may be
necessary to implement its decision. FRIMCo shall not be responsible
or liable for the investment merits of any decision by a Money Manager
to purchase, hold, or sell a security for a Sub-Trust portfolio.
(2) FRIMCo shall, subject to and in accordance with the investment
objectives and policies of the Trust and each Sub-Trust and any
directions which the Trust's Board of Trustees may issue to FRIMCo,
have: (i) overall supervisory responsibility for the general
management and investment of the Trust's assets and securities
portfolios; and (ii) full investment discretion to make all
determinations with respect to the investment of Sub-Trust assets not
assigned to a Money Manager.
B-2
(3) FRIMCo shall develop overall investment programs and strategies
for each Sub-Trust, or segments thereof, shall revise such programs as
necessary, and shall monitor and report periodically to the Board of
Trustees concerningand FRIC, with consideration being given to the implementationperson’s business and professional experience, board experience, education and such other factors as the Committee, in its sole judgment, may consider relevant; and
the character and integrity of the Programs.
(4)person.
In evaluating Independent Trustee candidates, the Committee should also consider, among other factors that it may deem relevant:
whether or not the person is an “interested person” as defined in the 1940 Act;
whether or not the person has any relationships that might impair his or her independence, such as any business, financial or family relationships with FRIC management, FRIMCo, any money manager or any other principal FRIC service providers or their affiliates;
whether or not the person serves on boards of, or is otherwise affiliated with, competing financial service organizations or their related mutual fund complexes; and
whether or not the selection and nomination of the person would be consistent with the requirements of FRIC’s retirement policies.
After a determination by the Committee that a person should be selected and nominated as an Independent Trustee, the Committee shall research and evaluate Money Managers and shall
advisepresent its recommendation to the Board for its consideration.
| 2. | The Committee shall supervise an annual assessment by Trustees, which assessment shall take into account such factors as the Committee may deem appropriate. The results of the assessment shall be summarized and presented to the Board for consideration as to any appropriate actions. |
| 3. | The Committee shall periodically review the composition of the Board to determine whether it may be appropriate to add individuals with different backgrounds or skill sets from those already on the Board. |
| 4. | The Committee shall periodically review Independent Trustee compensation and shall recommend any appropriate changes to the Independent Trustees as a group. |
Committee Nominations and Functions
| 1. | The Committee shall make nominations to the Board for membership on all committees of the Board and shall review committee assignments at least annually. |
| 2. | The Committee shall review as necessary the responsibilities of any committees of the Board, whether there is a continuing need for each committee, whether there is a need for additional committees of the Board, and whether committees should be combined or reorganized. The Committee shall make recommendations for any such action to the Board. |
Independent Trustee Education
| 1. | The Committee shall supervise an orientation program for newly-elected Independent Trustees designed to familiarize such Independent Trustees with the business and regulation of registered investment companies generally; the respective roles of FRIMCo, the Board and the Independent Trustees in the business and affairs of FRIC; and such other matters as the Committee, in its sole judgment, shall deem appropriate. |
| 2. | The Committee shall establish policies and practices with respect to Independent Trustee attendance at industry conferences and events. |
Other Powers and Responsibilities
| 1. | The Committee shall monitor the performance of legal counsel employed by FRIC and the Independent Trustees, and shall be responsible for the supervision of counsel for the Independent Trustees. |
| 2. | The Committee shall have the resources and authority appropriate to discharge its responsibilities, including authority to retain special counsel and other experts or consultants at the expense of the appropriate portfolio(s) of FRIC. |
| 3. | The Committee may request, and FRIC’s management shall provide, such information and analyses and access to FRIC’s officers, agents, representatives and service providers, including RIMCo, as shall be reasonably necessary for the Committee to carry out its responsibilities. |
| 4. | The authority, powers and rights of the Committee as described in this Charter are not intended and shall not operate to reduce, restrict or limit in any manner whatsoever the authority, powers and rights which are granted to the Board and Committees thereof, including the Committee, under the Master Trust Agreement or By-laws of FRIC. In the event of any inconsistency between this Charter and either of such organizational documents, the provisions of the latter shall be given precedence. |
| 5. | At any meeting of the Committee, a majority of the Independent Trustees on the Committee shall constitute a quorum. Any action may be taken by the Committee at a meeting at which there is a quorum present by a vote of a majority of the Committee members present. |
| 6. | The Committee shall review this Charter at least annually and recommend any changes to the Board. |
Dated: August 20, 2001, as amended August 23, 2005
MONEY MANAGER INFORMATION
The following is a list, current as of TrusteesJuly 26, 2007, of the Trustnames and addresses of the Money Managers for each Fund which FRIMCo believesis not a fund-of-funds. The money managers are best suited to invest the assets of each Sub-
Trust; shall monitor and evaluate the investment performance of each
Money Manager employed by the Trust; shall determine the portion of
each Sub-Trust's assets to be managed by each Money Manager; shall
recommend changes or additions of Money Managers when appropriate;
shall coordinate the investment activitiesnot affiliates of the Money Managers; and
actingFunds or the Funds’ service providers other than their management of Fund assets. Each money manager is principally engaged in managing institutional investment accounts. These managers may also serve as a fiduciary formanagers or advisers to other investment companies unaffiliated with the Trust, shall compensateother Funds in the Money
Managers.
(5) FRIMCo shall renderTrust, or to other clients of RIMCo or of Russell Investment Group, including Russell Investment Group’s wholly-owned subsidiary, Russell Trust Company. The Funds may engage or terminate a money manager at any time, subject to the Trust'sapproval of the Funds’ Board of Trustees, such
periodic reports concerningwithout a shareholder vote. Assets not allocated to money managers are managed by RIMCo.
Multi-Style Equity Fund
Columbus Circle Investors, One Station Place, Metro Center – 8th Floor, Stamford, CT 06902.
DePrince, Race & Zollo, Inc., 250 Park Avenue South, Suite 250, Winter Park, FL 32789.
Institutional Capital Corporation, 225 West Wacker Drive, Suite 2400, Chicago, IL 60606.
Jacobs Levy Equity Management, Inc., 100 Campus Drive, P.O. Box 650, Florham Park, NJ 07932-0650.
Montag & Caldwell, Inc., 3455 Peachtree Road N.E., Suite 1200, Atlanta, GA 30326-3248.
Suffolk Capital Management, LLC, 1633 Broadway, 40th Floor, New York, NY 10019.
Turner Investment Partners, Inc., 1205 Westlakes Drive, Suite 100, Berwyn, PA 19312-2414.
Aggressive Equity Fund
Berkeley Capital Management LLC, One Bush Street, 12th Floor, San Francisco, CA 94104.
ClariVest Asset Management, LLC, 11452 El Camino Real, Suite 250, San Diego, CA 92130.
David J. Greene and Company, LLC, 599 Lexington Avenue, New York, NY 10022-6067.
DePrince, Race & Zollo, Inc., 250 Park Avenue South, Suite 250, Winter Park, FL 32789.
Gould Investment Partners, LLC, 1235 Westlakes Drive, Suite 280, Berwyn, PA 19312-2412.
Jacobs Levy Equity Management, Inc., 100 Campus Drive, P.O. Box 650, Florham Park, NJ 07932-0650.
PanAgora Asset Management, Inc., 260 Franklin Street, 22nd Floor, Boston, MA 02110.
Tygh Capital Management, Inc., 1211 S.W. Fifth Avenue, Suite 2100 Portland, OR 97204.
Non-U.S. Fund
Altrinsic Global Advisors, LLC, 100 First Stamford Place, 6th Floor East, Stamford, CT 06902.
AQR Capital Management, LLC, Two Greenwich Plaza, 3rd Floor, Greenwich, CT 06830.
MFS Institutional Advisors, Inc., 500 Boylston Street, 21st Floor, Boston, MA 02116-3741.
Wellington Management Company, LLP, 75 State Street, Boston, MA 02109.
Real Estate Securities Fund
AEW Management and Advisors, L.P., World Trade Center East, Two Seaport Lane, 16th Floor, Boston, MA 02210-2021.
Cohen & Steers Capital Management, Inc. 280 Park Avenue, 10th Floor, New York, NY 10017-1216.
Heitman Real Estate Securities LLC, 191 North Wacker Drive, Chicago, IL 60606.
INVESCO Institutional (N.A.), Inc., which acts as money manager to the Trust's and Sub-Trust's business and
investments as the Board of Trustees shall reasonably request.
C. Use of Frank Russell Company Research.
FRIMCo is hereby authorized and expected to utilize the research and
other resources of Frank Russell Company,Fund through its corporate parent, or any
predecessor organization, in providing theINVESCO Real Estate Division, Three Galleria Tower, Suite 500, 13155 Noel Road, Dallas, TX 75240.
RREEF America L.L.C., The Hancock Building, 875 North Michigan Avenue, 41st Floor, Chicago, IL 60611-1901.
Core Bond Fund
Bear Stearns Asset Management Inc., 383 Madison Avenue, New York, NY 10179.
Goldman Sachs Asset Management, L.P., 32 Old Slip, 24th Floor, New York, NY 10005.
Pacific Investment Management Services
specified in Subsection "B," above. Neither FRIMCo norCompany LLC, 840 Newport Center Drive, Suite 300, P.O. Box 6430, Newport Beach, CA 92660-6430.
(d) Liquidation. In the Trust shall be
obligated to pay any fee to Frank Russell Company for these services.
D. Provision of Information Necessary for Preparation of Securities
Registration Statements, Amendments and Other Materials.
FRIMCo will make available and provide financial, accounting, and
statistical information required by the Trust for the preparation of
registration statements, reports, and other documents required by federal
and state securities laws, and with such information as the Trust may
reasonably request for use in the preparation of such documents or of
other materials necessary or helpful for the underwriting and distributionevent of the Trust's shares.
E. Other Obligations and Services.
FRIMCo shall make available its officers and employees to the Board of
Trustees and officers of the Trust for consultation and discussions
regarding the administration and management of the Trust and its
investment activities.
3. Execution and Allocation of Portfolio Brokerage Commissions. FRIMColiquidation or the Money Managers, subject to and in accordance with any directions which the
Trust's
B-3
Board of Trustees may issue from time to time, shall place, in the name of the
Trust, orders for the execution of the Sub-Trust's portfolio transactions.
When placing such orders, the primary objective of FRIMCo and Money Managers
shall be to obtain the best net price and execution for the Trust, but this
requirement shall not be deemed to obligate FRIMCo or a Money Manager to place
any order solely on the basis of obtaining the lowest commission rate if the
other standards set forth in this section have been satisfied. The Trust
recognizes that there are likely to be many cases in which different brokers
are equally able to provide such best price and execution and that, in
selecting among such brokers with respect to particular trades, it is
desirable to choose those brokers who furnish "brokerage and research
services" (as defined in Section 28(e)(3) of the Securities and Exchange Act
of 1934) or statistical quotations and other information to the Trust, FRIMCo
and/or the Money Managers in accord with the standards set forth below.
Moreover, to the extent that it continues to be lawful to do so and so long as
the Board determines as a matter of general policy that the Trust will
benefit, directly or indirectly, by doing so, FRIMCo or a Money Manager may
place orders with a broker who charges a commission for that transaction which
is in excess of the amount of commission that another broker would have
charged for effecting that transaction, provided that the excess commission is
reasonable in relation to the value of brokerage and research services
provided by that broker. Accordingly, the Trust and FRIMCo agree that FRIMCo
and the Money Managers shall select brokers for the execution of the Sub-
Trust's portfolio transactions from among:
A. Those brokers and dealers who provide brokerage and research
services, or statistical quotations and other information to the Trust,
specifically including the quotations necessary to determine the Trust's
net assets, in such amount of total brokerage as may reasonably be
required in light of such services;
B. Those brokers and dealers supply brokerage and research services to
FRIMCo and/or its affiliated corporations, or the Money Managers, which
relate directly to portfolio securities, actual or potential,dissolution of the Trust or which place FRIMCo or Money Managers in a better position to
make decisions in connection with the managementany Sub-Trust existing as of the Trust'sdate of this Amendment No. 8, the Shareholders of each Sub-Trust existing as of the date of this Amendment No. 8 that has been established and designated and that has voted to be liquidated or dissolved, shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Sub-Trust over the liabilities belonging to that Sub-Trust; and portfolios, whetherin the event of the liquidation or not such data may also be useful to FRIMCodissolution of any Sub-Trust established and its
affiliates, or the Money Managers and their affiliates, in managing other
portfolios or advising other clients, in such amount of total brokerage as
may reasonably be required; and
C. Frank Russell Securities, Inc., an affiliate of FRIMCo, when FRIMCo
or Money Manager has determined that the Trust will receive competitive
execution, price, and commission. FRIMCo shall render regular reportsdesignated subsequent to the Trust, not more frequently than quarterly,date of how much total brokerage
business has been placed with Frank Russell Securities, Inc.,this Amendment No. 8, the Shareholders of such Sub-Trust shall be entitled to receive, when and as declared by the manner in whichTrustees, the allocation has been accomplished.
FRIMCo agrees and each Money Manager will be required to agree, that no
investment decision will be made or influenced by a desire to provide
brokerage for
B-4
allocation in accordance with the foregoing, and that the right to make such
allocation of brokerage shall not interfere with FRIMCo's or Money Manager's
primary duty to obtain the best net price and execution for the Trust.
4. Expensesexcess of the Trust. It is understoodassets belonging to that Sub-Trust over the Trust will pay all its
expenses other than those expressly assumed by FRIMCo herein, which expressly
assumed by FRIMCo herein, which expenses payable byliabilities belonging to that Sub-Trust. The assets so distributable to the Trust shall include:
A. Fees for the services of the Money Manager;
B. Expenses of all audits by independent public accountants;
C. Expenses of transfer agent, registrar, dividend disbursing agent, and
shareholder recordkeeping services;
D. Expenses of custodial services including recordkeeping services
provided by the Custodian;
E. Expenses of obtaining quotations for calculating the value of the
Trust's net assets;
F. Expenses of obtaining Portfolio Activity Reports and Analyses of
International Management reports for each portfolio of each Sub-Trust;
G. Expenses of maintaining each Sub-Trust's tax records;
H. Salaries and other compensationShareholders of any particular Sub-Trust shall be distributed among such Shareholders in proportion to the number of Shares of that Sub-Trust held by them and recorded on the Trust's executive
officers and employees, if any, who are not officers, directors,
stockholders, or employees of FRIMCo;
I. Taxes levied against the Trust;
J. Brokerage fees and commissions in connection with the purchase and
sale of portfolio securities for the Trust;
K. Costs, including the interest expense, of borrowing money;
L. Costs and/or fees incident to meetingsbooks of the Trust, adjusted for such distinctions between Shares of Classes of a Sub-Trust as the preparationTrustees, in their discretion, deem just and mailingsequitable. The liquidation of prospectusesany particular Sub-Trust existing as of the date of this Amendment No. 8 may be authorized by vote of a majority of the Trustees in office on the date of such vote subject to the approval of a majority of the outstanding voting shares of that Sub-Trust, as defined in the 1940 Act; and reportsthe liquidation of any Sub-Trust established and designated subsequent to the date of this Amendment No. 8 may be authorized by vote of a majority of Trustees in office on the date of such vote without Shareholder approval and subject to notice to Shareholders of that Sub-Trust.
(d) Liquidation and Termination. (1) Except as set forth below, the Trustees may not terminate any Sub-Trust of the Trust to its Shareholders,without the filingaffirmative vote of reports with regulatory bodies, the maintenancea majority of the Trust's existence, and the registration of shares with federal and state
securities authorities;
M. Legal fees, including the legal fees related to the registration and
continued qualification of the Trust shares for sale;
N. Costs of printing stock certificates representing shares of the
Trust;
B-5
O. Trustees' fees and expenses to Trustees who are not officers,
employees, or stockholders of FRIMCo or any of its affiliates;
P. The Trust's pro rata portion of the fidelity bond required by Section
17(g) ofoutstanding voting Shares, as defined in the 1940 Act, or other insurance premiums;
Q. Association membership dues; and
R. Extraordinary expenses as may arise including expenses incurred in
connection with litigation, proceedings, other claims, andof that Sub-Trust. Upon the legal
obligations of the Trust to indemnify its Trustees, officers, employees,
Shareholders, distributors, and agents with respect thereto.
5. Activities and Affiliates of FRIMCo.
A. The services of FRIMCo and its affiliated corporations to the Trust
hereunder are not to be deemed exclusive, and FRIMCo and any of its
affiliates shall be free to render similar services to others.
(1) FRIMCo and its affiliated corporations shall use the same skill
and care in the management of the Sub-Trust's portfolios as they use
in the administration of other accounts to which they provide asset
management consulting and manager selection services, but they shall
not be obligated to give the Trust more favorable or preferential
treatment vis-a-vis their other clients.
(2) The Trust expressly recognizes that Frank Russell Investment
Company ("FRIC") is a client of FRIMCo and that Frank Russell Trust
Company ("Trust Company"), a corporation affiliated with FRIMCo, is
also a client of a corporation affiliated with FRIMCo and each of FRIC
and Trust Company receives substantially the same portfolio
structuring and money manager selection services from the affiliate as
does the Trust; that each of FRIC and Trust Company has, or may have,
commingled investment funds with substantially the same investment
objectives, strategies, and programs as the Trust; that each of FRIC
and the Trust was organized by and at the expense of FRIMCo or of a
corporation affiliated with FRIMCo for the express purpose of offering
the same type of investment management services to the Trust's
Shareholders, at least some of whom could not obtain these services
through FRIC or Trust Company, as FRIC provides to its Shareholders
and as Trust Company provides to its trust customers; and that over
time FRIC, Trust Company and the Trust may utilize some of the same
money managers and have similar portfolio securities holders.
B. Subject to and in accordance with the Master Trust Agreement (as
defined below) and Bylaws of the Trust and to Section 10(a) of the 1940
Act, it is understood that Trustees, officers, agents, and Shareholders of
the Trust are or may be interested
B-6
in FRIMCo or its affiliates as directors, agents, or stockholders of
FRIMCo or its affiliates are or may be interested in the Trust as
Trustees, officers, agents, Shareholders, or otherwise; that FRIMCo or its
affiliates may be interested in the Trust as Shareholders or otherwise;
and that the effect of any such interests shall be governed by said Master
Trust Agreement, Bylaws, and the 1940 Act.
6. Compensation of FRIMCo.
FRIMCo shall receive from each of the following Sub-Trusts an annual
management fee, accrued daily at the rate of 1/365th of the applicable
management fee and payable following the last day of each month. The annual
management fee, including the fee payable to the Money Managers (for each
respective Sub-Trust), shall be computed based on the following annual
percentage of each Sub-Trust's average daily net assets during the month:
Multi-Style Equity.................................................. 0.78%
Aggressive Equity................................................... 0.95
Non-U.S............................................................. 0.95
Core Bond........................................................... 0.60
Money Market Liquidity.............................................. 0.25
From this management fee, FRIMCo, acting as a fiduciary of the Trust, shall
compensate the Money Managers.
7. Liabilities of FRIMCo.
A. In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of obligations or duties hereunder or on the part of
FRIMCo or its corporate affiliates, FRIMCo and its corporate affiliates
shall not be subject to liability to the Trust or to any Shareholder of
the Trust for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in
the purchase, holding, or sale of any security.
B. No provision of this Agreement shall be construed to protect any
Trustee or officertermination of the Trust or FRIMCo and its corporate affiliates,
from liability in violation of Section 17(h) and (i)any Sub-Trust of the 1940 Act.
8. Renewal and Termination.
A. Trust:
This (i) The Trust or Sub-Trust of the Trust shall carry on no business except for the purpose of winding up its affairsAgreementparagraph shall become effective on and as of August 5, 1996 and
shall continue in effect asapply to each Sub-Trust until May 31, 1998.(and any Class of such Sub-Trust) established and designated subsequent to the date of this Amendment No. 8. The Agreement is renewable annually thereafter for successive one-year periods
(a)termination of a Sub-Trust or Class may be authorized at any time, subject to notice to Shareholders of such Sub-Trust or Class but without Shareholder approval, by a vote of a majority of the Trustees or written instrument executed by a majority of their number then in office. Upon the effective date of the termination of the Sub-Trust or Class, as applicable, which shall commence the period during which the affairs of such Sub-Trust or Class shall be wound up, (1) the Sub-Trust or Class in an orderly manner;
(2ii)theThe Trustees shall proceed to wind up the affairs of theTrust orSub-Trustor Class; (3)of the Trust and allof the powers of the Trustees under this Agreement shall continue until the affairs of the Trustor Sub-Trust of the Trustshall have been wound up, includingbut not limited tothe power to(i)fulfill or discharge the contracts ofathe Trust or Sub-Trustor Class, (ii) collect assets allocated or belonging to such Sub-Trust or Class, (iii)of the Trust, collect its assets, sell, convey, assign, exchange, transfer or otherwise dispose of all or any part of the remainingTrust property allocated or belonging to suchassets or assets of the Sub-Trust or Class to one or more persons at public or private sale for considerationthatwhich may consist in whole or in part of cash, securities, or other property of any kind, (iv) discharge or payitsliabilities allocated or belonging to such Sub-Trust or Class, and (v) authorize or take, and to do all other acts appropriate to liquidate its business; and
(4iii)afterAfter paying or adequately providing for the payment of all liabilities, and upon receipt of such releases, indemnities, and refunding agreements as they deem necessary for their protection, the Trustees may distribute the remainingpropertyassets of theterminatedTrust or assets of the Sub-Trust or Class, in cash or in kind or partlyeachin cash and partly in kind, among theshareholdersShareholders of theTrust or theSub-Trustor Class according to their respective rights. Upon completion of the distribution of the remaining proceeds or the remaining assets as provided above in this paragraph, such Sub-Trust or Class shall terminate and the Trustees and the Trust shall be discharged of any and The assets so distributable to the Shareholders of any particular Sub-Trust shall be distributed among such Shareholders in proportion to the number of Shares of that Sub-Trust held by them and recorded on the books of the Trust, adjusted for such distinctions between Shares of Classes of a Sub-Trust as the Trustees, in their discretion, deem just and equitable.
C-1
The foregoing provisions shall also apply, with appropriate modifications as determined by the Trustees, to the termination of any Class of any Sub-Trust.
(2) After termination of the Trust or (b)Sub-Trust or Class and distribution to the Shareholders of the Trust or Sub-Trust or Class as herein provided, the Trustees shall thereupon be discharged from all further liabilities and duties hereunderand the right, title and interest of all partieswith respect tosuchthe Trust or Sub-Trust or Class, and the rights and interests of all Shareholders of the Trust or Sub-Trust or Class shallbe canceled and discharged. In connection therewith, the Trustees shall cause such filings to be made with any federal, state and local regulators as is determined by the Trustees or Trust counsel to be necessary or appropriate. This paragraph shall not be construed to imply anything about the manner in which the Trust itself or any Sub-Trust thereupon cease.by aor Class existing as of the date of this Amendment No. 8 may be terminated, wound up and liquidated
(3) Notwithstanding the above provisions of Section 4.2(d), the Trustees may, without the affirmative vote of a majority of the outstanding voting securities of
that Sub-Trust, andShares, as defined in either case by a majority of the Trustees who are
not parties to the Agreement or interestedperson of any parties to the
Agreement (other than as Trustees of the Trust), cast in person at a
meeting called for purposes of voting on the Agreement; provided,
B-7
however, that if the Shareholders of any one or more Sub-Trusts fail to
approve the Agreement as provided herein, FRIMCo may continue to serve in
such capacity in the manner and to the extent permitted by the 1940 Act and Rules and Regulations thereunder.
B. This Agreement:
(a) May at any time be terminated without the payment of any penalty
either by vote of the Board of Trustees of the Trust or, as to anya Sub-Trust, by vote of a majority of the outstanding voting securitiesTrustees or written instrument executed by a majority of their number then in office, terminate any of the following Sub-Trusts of the Trust, or any Class of any such Sub-Trust, on 60 days' written notice to FRIMCo;
(b) Shall immediately terminate in the event of its assignment; and
(c) May be terminatedat any time by FRIMCo on 60 days'prior written notice to the Trust.
C. As used in this Shareholders of that Sub-Trust or Class:
| • | Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund, Core Bond Fund, Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund and Equity Growth Strategy Fund. |
Section Reorganization. Except as set forth below, the 8,7.2 Reorganization. The Trustees mayTerms "assignment," "interested
person" and "voteTrustees may, subject to the affirmative vote of a majority of the outstanding voting securities"
shall have the meanings set forth for any such termsShares, as defined in the 1940 Act.
D. Any noticeAct, of each Sub-Trust voting separately by Sub-Trust, sell, convey, merge and transfer the assets of the Trust, or(any such transaction is referred to in this Section 7.2 as a “transfer”), to another trust, partnership, association or corporation organized under the laws of any state of the United States, in exchange for cash, shares or other securities with such transfer either (1) being made subject to, or with the assumption by the transferee of, the liabilities belonging to the Trust, or (2) not being made subject to, or not with the assumption of such liabilities.
The Trustees may, subject to the affirmative vote of a majority of the outstanding voting Shares, as defined in the 1940 Act, of a Sub-Trust, transfer the assets belonging to any one or more Sub-Trusts, to another trust, partnership, association or corporation organized under the laws of any state of the United States, or to the Trust to be held as assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares or other securities (including, in the case of a transfer to another Sub-Trust of the Trust, Shares of such other Sub-Trust) with such transfer either (1) being made subject to, or with the assumption by the transferee of, the liabilities belonging to each Sub-Trust the assets of which are so transferred, or (2) not being made subject to, or not with the assumption of such liabilities.No assets belonging to any particular Sub-Trust existing as of the date of this Following such AgreementAmendment No. 8 shall be givenso transferred unless the terms of such transfer shall have first been approved at a meeting called for that purpose by the affirmative vote of the holders of a majority of the outstanding voting Shares, as defined in writing addressed
and delivered, or mailed postpaid,the 1940 Act, of that Sub-Trust. Subject to the other partyrequirements of the 1940 Act, assets belonging to any particular Sub-Trust established and designated subsequent to the date of this Amendment No. 8 may be so transferred without the requirement of Shareholder approval at any officetime by vote of a majority of the Trustees or written instrument executed by a majority of their number then in office.party.
9. Severability. Iftransfer, the Trustees shall distribute such cash, shares or other securities (giving due effect to the assets and liabilities belonging to and any provisionother differences among the various Sub-Trusts the assets belonging to which have so been transferred) among the Shareholders of this Agreementthe Sub-Trust the assets belonging to which have been so transferred; and if all of the assets of theSub-Trust have been so transferred, theSub-Trust shall be held or made
invalid byterminated.
The Trustees may, subject to the affirmative vote of a court decision, statute, rule, or otherwise, the remainder of
this Agreement shall not be affected thereby.
10. Reservation of Name. The parties hereto acknowledge that Frank Russell
Company has reserved the right to grant the non-exclusive usemajority of the name
"Russell," or any derivative thereof, to any other investment company,
investment advisor, distributor or other business enterprise, and to withdraw
fromoutstanding voting Shares, as defined in the 1940 Act, of each Sub-Trust voting separately by Sub-Trust, (1) consolidate the Trust, either as successor, survivor or non-survivor, with one or more other trusts, partnerships, associations or corporations organized under the uselaws of the name "Russell." In the event that Frank Russell
Company should elect to withdraw the use of the name "Russell" from the Trust,
the Trust will submit the question of continuing this Agreement to a vote of
its Shareholders.
11. Limitation of Liability. The Master Trust Agreement, dated July 11,
1996, as amended from time to time, establishing the Trust, which is hereby
referred to and a copy of which is on file with the Secretary of The Commonwealth of Massachusetts provides thator any other state of the name Russell Insurance Funds
meansUnited States, to form a new consolidated trust, partnership, association or corporation under the laws of which any one of the constituent entities is organized, or (2) merge the Trust, either as successor, survivor or non-survivor, into one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, or have one or more such trusts, partnerships, associations or corporations merged into it, any such consolidation or merger to be upon such terms and conditions as are specified in an agreement and plan of reorganization entered into by the Trust, in connection therewith.
TheTrust, orTrustees may, subject to the affirmative vote of a majority of the outstanding voting Shares, as defined in the 1940 Act, of a Sub-Trust, (1) consolidate any one or more Sub-Trusts,may, either asthesuccessor, survivor or non-survivor,(1) consolidate with one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, to form a new consolidated trust, partnership, association or corporation under the laws of which any one of the constituent entities is organized, or (2) mergeinto one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, or have one or more such trusts, partnerships, associations or corporations merged into it, any such consolidation or merger to be upon such terms and conditions as are specified in an agreement and plan of reorganization entered into by the Trust, orany one or more Sub-Trusts, either as successor, survivor or non-survivor, into one or more other trusts, partnerships, associations or corporations organized under the laws of the Commonwealth of Massachusetts or any other state of the United States, or have one or more such trusts,
partnerships, associations or corporations merged into it, any such consolidation or merger to be upon such terms and conditions as are specified in an agreement and plan of reorganization entered into by one or more Sub-Trusts, as the case may be, in connection therewith. The terms “merge” or “merger” as used herein shall also include the purchase or acquisition of any assets of any other trust, partnership, association or corporation which is an investment company organized under the laws of the Commonwealth of Massachusetts or any other state of the United States. Any such consolidation or merger of any Sub-Trust established and designated subsequent to the date of this Amendment No. 8 may be authorized without the requirement of Shareholder approval at any time by vote of a majority of the Trustees The Trustees shall providepriornotice to from timeor written instrument executed by a majority of their number then in office.time serving (as Trustees but not personally)affected Shareholders of a reorganization effected under said Master Trust Agreement. It is expressly acknowledged and agreed
that the obligations of the Trust hereunderthis Section 7.2.
The foregoing provisions shall not be binding upon any of
the Shareholders, Trustees, officers, employees, or agents of the Trust,
personally, but shall bind only the trust property of the Trust,also apply, with appropriate modifications as provided
in its Master Trust Agreement. The execution and delivery of this Agreement
have been authorizeddetermined by the Trustees, to the transfer, consolidation or merger of any Class of any Sub-Trust.
Notwithstanding the above provisions of Section 7.2, any transaction effected pursuant to this Section 7.2 with respect to any one of the Trust and signedfollowing Sub-Trusts may be authorized by the Presidentvote of a majority of the Trust, actingTrustees or written instrument executed by a majority of their number then in office, and without the affirmative vote of the holders of a majority of the outstanding voting Shares, as such,defined in the 1940 Act, of that Sub-Trust:
| • | Multi-Style Equity Fund, Aggressive Equity Fund, Non-U.S. Fund, Real Estate Securities Fund, Core Bond Fund, Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund and Equity Growth Strategy Fund. |
| PROXY | RUSSELL INVESTMENT FUNDS | PROXY | ||
| SPECIAL MEETING OF SHAREHOLDERS | ||||
| TO BE HELD ON OCTOBER 25, 2007 |
The undersigned, having received Notice of the Special Meeting of Shareholders of Russell Investment Funds to be held on October 25, 2007, at 10:00 a.m., Pacific Time, at the offices of Russell Investment Funds located at 909 A Street, Tacoma, Washington and B-8
neither such authorization by such Trustees nor such executionthe related proxy statement, and delivery by
such officers shallhereby revoking all Proxies heretofore given with respect to shares to be deemed to have been made byvoted at the Special Meeting, hereby appoints each of Mary Beth Rhoden, Gregory Lyons, Mark Swanson and David Craig, or any of them, individually or
to impose any liability on any of them personally, but shall bind only the
trust propertyas Proxies of the Trust as provided in its Master Trust Agreement.
IN WITNESS WHEREOF,undersigned with power to act without the parties hereto have caused this Agreement to be
executed, as of the dayothers and year first written above.
RUSSELL INSURANCE FUNDS
/s/ Gregory J. Lyons By: /s/ Lynn L. Anderson
_________________________________ _________________________
Gregory J. Lyons, Assistant Lynn L. Anderson,
Secretary President
FRANK RUSSELL INVESTMENT
MANAGEMENT COMPANY
/s/ Gregory J. Lyons By: /s/ Eric A. Russell
_________________________________ _________________________
Gregory J. Lyons, Assistant Eric A. Russell,
Secretary President
FRANK RUSSELL COMPANY agrees to provide consulting services without charge
to the Trust upon the request of the Board of Trustees or officers of the
Trust, or upon the request of Manager pursuant to Section 2(C).
FRANK RUSSELL COMPANY
/s/ J. David Griswold By: /s/ Michael J. A. Phillips
_________________________________ _________________________
J. David Griswold, Assistant Michael J. A. Phillips,
Secretary President
B-9
RUSSELL INSURANCE FUNDS PROXY
SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF SHAREHOLDERS NOVEMBER 19, 1998
FUND NAME PRINTS HERE
The undersigned hereby revokes all previous proxies for the undersigned's shares
and appoints Gregory J. Lyons and Rick Chase, and each of them, proxies of the
undersigned with full power of substitution, to vote on behalf of the undersigned as indicated on this proxy card all of the shares of the above-
referenced fund (the "Fund")any Fund of Russell Investment Funds which the undersigned is entitled to vote at the Fund's Special Meeting in Lieu of Annual Meeting of Shareholders ("Special
Meeting") to be heldand at the offices of Russell Insurance Funds (the "Investment
Company"), at 909 A Street, Tacoma, WA 98402 at 11:00 a.m., local time, on
Thursday, the 19th day of November 1998, including any adjournment or postponement thereof, upon
such business as may properlyfully as the undersigned would be brought before the Special Meeting.
TO AVOID THE EXPENSE OF MULTIPLE MAILINGS TO THE SAME SHAREHOLDER, WE HAVE,
WHEVEVER POSSIBLE, INCLUDED PROXY CARDS FOR ALL YOUR ACCOUNTS
IN THE FUNDS INVOLVED IN THIS PROXY IN ONE ENVELOPE.
Pleaseentitled to vote by filling in the boxes below.
WITHHOLD
FOR all authority
Nominees to vote
except as for all
marked nominees
--------- -------
NO. 1 To elect the following six nominees as
Trustees: Lynn L. Anderson, Paul E. Anderson,
Paul Anton, PhD, William E. Baxter, Lee C.
Gingrich, and Eleanor W. Palmer.
(Instructions: To withhold authority to vote
for any individual nominee(s), write the name
of the nominee(s) below.)
_____________________________________________
FOR AGAINST ABSTAIN
--- ------- -------
No. 2 To ratify the selection of
PricewaterhouseCoopers LLP as the independent
accountants for the Investment Company.
No. 3 To approve a new management agreement with
FRIMCo to take effect upon the acquisition of
Frank Russell Company by The Northwestern
Mutual Life Insurance Company.
NO. 4 To approve a change to the Fund's fundamental
investment restrictions, authorizing a higher
borrowing level for the purpose of meeting
redemptions.
GRANT WITHHOLD
----- --------
To consider and act upon any other business
which may legally come before the meeting
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE. NO POSTAGE
REQUIRED IF MAILED IN THE U.S. if personally present.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. IT WILLShares will be voted as you specify. The Board of Trustees recommends that you voteFOR each proposal. IF THIS PROXY CARD IS SIGNED, DATED AND RETURNED WITH NO CHOICE INDICATED AS TO ONE OR MORE PROPOSALS ON WHICH SHARES REPRESENTED BY THIS PROXY CARD ARE ENTITLED TO BE VOTED, AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXYSUCH SHARES SHALL BE VOTED IN FAVOR OF THE ELECTION OF THE NOMINEES TO THE BOARD, TO RATIFY
THE SELECTION OF ACCOUNTANTS, AND IN FAVOR OF THE PROPOSALS TO APPROVE A
MANAGEMENT AGREEMENT AND TO AMEND A FUNDAMENTAL RESTRICTION. IF ANY OTHER
MATTERS PROPERLY COME BEFORE THE MEETING ABOUT WHICH THE PROXY HOLDERS ARE NOT
AWARE AT THIS TIME, THE PROXY HOLDERS MAY VOTE IN ACCORDANCE WITH THE VIEWS OF
THE TRUSTEES THEREON. MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS.
Dated:___________________________
_________________________________________
Signature
_________________________________________
Signature
Note:FOR EACH PROPOSAL. The Proxies are authorized in their discretion to transact such other business as may properly come before the Special Meeting or any adjournment or postponement thereof.
| VOTE VIA TELEPHONE: 1-866-241-6192 | ||||
| VOTE VIA THE INTERNET: https://vote.proxy-direct.com | ||||
| 999 9999 9999 999 | ||||
| NOTE: Please sign exactly as your name appears on this Proxy Card and date. If signing for estates, trusts or corporations, title or capacity should be stated. If shares are held jointly, each holder should sign. | ||||
| Signature | ||||
| Signature (if held jointly) | ||||
| Date | RIF_17914_072507 | |||
| FUND | FUND | |
| Aggressive Equity | Balanced Strategy | |
| Core Bond | Equity Growth Strategy | |
| Growth Strategy | Moderate Strategy | |
| Multi-Style Equity | Non-U.S. | |
| Real Estate Securities |
Please vote by filling in the appropriate box below. If you do not mark one or more proposals, your Proxy will be votedFOR each such proposal.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: n
¨ To voteFORall Funds onall Proposals mark this box. (No other vote is necessary.) |
1. Elect eight members of the Board of Trustees of the Trust | FOR ALL | WITHHOLD ALL | FOR ALL EXCEPT | |||||||||
01 Greg J. Stark | 02 Thaddas L. Alston | 03 Kristianne Blake | 04 Daniel P. Connealy | ¨ | ¨ | ¨ | ||||||
05 Jonathan Fine | 06 Raymond P. Tennison, Jr. | 07 Jack R. Thompson | 08 Julie W. Weston | |||||||||
Instruction: To withhold authority to vote for any individual nominee, mark the “For All Except” box and write the number and name of any such nominee on the proxy.line provided. ____________________________________________________________________
| 2. | Approve changes to the Liquidation Provision of the Master Trust Agreement of the Trust to provide an exception from the Shareholder approval requirement for each Fund: |
¨ To vote all Funds FOR; ¨ to vote all Funds AGAINST; ¨ to ABSTAIN votes for all Funds; or vote separately by Fund below.
| FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||
| Aggressive Equity | ¨ | ¨ | ¨ | Core Bond | ¨ | ¨ | ¨ | |||||||
| Multi-Style Equity | ¨ | ¨ | ¨ | Non-U.S. | ¨ | ¨ | ¨ | |||||||
| Real Estate Securities | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ |
| 3. | Approve changes to the Reorganization Provision of the Master Trust Agreement of the Trust to provide an exception from the Shareholder approval requirement for each Fund: |
¨ To vote all Funds FOR; ¨ to vote all Funds AGAINST; ¨ to ABSTAIN votes for all Funds; or vote separately by Fund below.
| FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||
| Aggressive Equity | ¨ | ¨ | ¨ | Core Bond | ¨ | ¨ | ¨ | |||||||
| Multi-Style Equity | ¨ | ¨ | ¨ | Non-U.S. | ¨ | ¨ | ¨ | |||||||
| Real Estate Securities | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ |
| 4. | Approve a change in status of the Real Estate Securities Fund from a “diversified company” to a “non-diversified company”. |
| FOR | AGAINST | ABSTAIN | ||||||||||||
| Real Estate Securities | ¨ | ¨ | ¨ |
EVERY SHAREHOLDER’S VOTE IS IMPORTANT! PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD TODAY!
VOTING OPTIONS
Read your proxy statement and have it at hand when voting.
 |  |  |  | |||||||||
| VOTE ON THE INTERNET | VOTE BY PHONE | VOTE BY MAIL | VOTE IN PERSON | |||||||||
| Log on to: | Call 1-866-241-6192 | Vote, sign and date this Proxy | Attend Shareholder Meeting | |||||||||
| https://vote.proxy-direct.com | Follow the recorded | Card and return in the | 909 A Street | |||||||||
| Follow the on-screen instructions | instructions | postage-paid envelope | Tacoma, WA | |||||||||
| available 24 hours | available 24 hours | on October 25, 2007 | ||||||||||
| VOTING INSTRUCTION | RUSSELL INVESTMENT FUNDS | VOTING INSTRUCTION | ||
| SPECIAL MEETING OF SHAREHOLDERS | ||||
| TO BE HELD ON OCTOBER 25, 2007 |
[INSURANCE COMPANY NAME]
The undersigned revoking all voting instructions heretofore given, hereby instructs all shares of any Funds of Russell Investment Funds (“RIF”) deemed attributable to the undersigned’s contract or policy with the issuing insurance company named above to be voted as indicated on this Voting Instruction Card at the Special Meeting of the Shareholders of RIF to be held on October 25, 2007, at 10:00 a.m. Pacific Time, at the offices of Russell Investment Funds located at 909 A Street, Tacoma, Washington, and at any adjournment thereof. The issuing insurance company named above and any proxies appointed by it are authorized in their discretion to transact such other business as may properly come before the special meeting or any adjournment thereof.
VOTING INSTRUCTIONS ARE SOLICITED BY THE ISSUING INSURANCE COMPANY NAMED ABOVE ON BEHALF OF RIF’S BOARD OF TRUSTEES. Shares will be voted as you specify. The Board of Trustees recommends that you voteFOR each proposal. IF THIS VOTING INSTRUCTION CARD IS SIGNED, DATED AND RETURNED WITH NO CHOICE INDICATED AS TO ONE OR MORE PROPOSALS ON WHICH SHARES REPRESENTED BY THE UNDERSIGNED’S CONTRACT OR POLICY ARE ENTITLED TO BE VOTED, SUCH SHARES SHALL BE VOTEDFOR EACH PROPOSAL.
| VOTE VIA TELEPHONE: 1-866-235-4258 | ||||
| VOTE VIA THE INTERNET: https://vote.proxy-direct.com | ||||
| 999 9999 9999 999 | ||||
| NOTE: Please sign exactly as your name appears on this Voting Instruction and date. If signing for estates, trusts or corporations, title or capacity should be stated. If shares are held jointly, each holder should sign. | ||||
| Signature | ||||
| Signature (if held jointly) | ||||
| Date | RIF_17914_072507 | |||
| FUND | FUND | |
| Aggressive Equity | Balanced Strategy | |
| Core Bond | Equity Growth Strategy | |
| Growth Strategy | Moderate Strategy | |
| Multi-Style Equity | Non-U.S. | |
| Real Estate Securities |
Please provide voting instructions by, filling in the appropriate box below. If signingyou do not mark one or more proposals, the Shares attributable to your contract or policy, will be votedFOR each such proposal.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: n
¨ To voteFORall Funds onall Proposals mark this box. (No other vote is necessary.) |
1. Elect eight members of the Board of Trustees of the Trust: | FOR ALL | WITHHOLD ALL | FOR ALL EXCEPT | |||||||||
01 Greg J. Stark | 02 Thaddas L. Alston | 03 Kristianne Blake | 04 Daniel P. Connealy | ¨ | ¨ | ¨ | ||||||
05 Jonathan Fine | 06 Raymond P. Tennison, Jr. | 07 Jack R. Thompson | 08 Julie W. Weston | |||||||||
Instruction: To withhold authority to vote for estates, trustsany individual nominee, mark the “For All Except” box and write the number and name of any such nominee on the line provided. ________________________________________________________________________
| 2. | Approve changes to the Liquidation Provision of the Master Trust Agreement of the Trust to provide an exception from the Shareholder approval requirement for each Fund: |
¨ To vote all Funds FOR; ¨ to vote all Funds AGAINST; ¨ to ABSTAIN votes for all Funds; or corporations, titlevote separately by Fund below.
| FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||
| Aggressive Equity | ¨ | ¨ | ¨ | Core Bond | ¨ | ¨ | ¨ | |||||||
| Multi-Style Equity | ¨ | ¨ | ¨ | Non-U.S. | ¨ | ¨ | ¨ | |||||||
| Real Estate Securities | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ |
| 3. | Approve changes to the Reorganization Provision of the Master Trust Agreement of the Trust to provide an exception from the Shareholder approval requirement for each Fund: |
¨ To vote all Funds FOR; ¨ to vote all Funds AGAINST; ¨ to ABSTAIN votes for all Funds; or capacity should be stated. If shares
are held jointly, each holder must sign.