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As filed with the Securities and Exchange Commission on March 29, 2018
Securities Act File No. 33-3677
1940 Act Registration No. 811-4603
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
☐ Pre-Effective Amendment No.
☐ Post-Effective Amendment No.
(Check appropriate box or boxes)
THRIVENT SERIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415
(Address of Principal Executive Offices)
612-844-4198
(Area Code and Telephone Number)
MICHAEL W. KREMENAK
SECRETARY AND CHIEF LEGAL OFFICER
THRIVENT SERIES FUNDS, INC.
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this registration statement becomes effective. It is proposed that this filing will become effective on May 7, 2018 pursuant to Rule 488 under the Securities Act of 1933.
Title of Securities Being Registered: Shares of beneficial interest, par value $.01 per share. The Registrant has registered an indefinite number of shares of beneficial interest pursuant to Section 24(f) of the Investment Company Act of 1940, as amended, and is in a continuous offering of such shares under an effective registration statement (File Nos. 33-3677 and 811-4603). No filing fee is due herewith because of reliance on Section 24(f) of the Investment Company Act of 1940, as amended.
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LETTER FOR MEMBERS
Dear Member:
The Board of Directors of Thrivent Series Fund, Inc. (the “Fund”) has scheduled special meetings of contractholders for June 21, 2018. At the meeting, the contractholders of Thrivent Growth and Income Plus Portfolio (the “Target Portfolio”) will be asked to consider and approve an Agreement and Plan of Reorganization (an “Agreement”) providing for its reorganization into Thrivent Moderately Aggressive Allocation Portfolio (the “Acquiring Portfolio”).
If you are not planning to attend the meeting in person, please vote before June 21 in one of the ways described below.
If the merger is approved, your investment in the Target Portfolio will automatically be transferred into the Acquiring Portfolio. We will send you a written confirmation after this takes place. This transfer is not expected to be a taxable event. (Of course, you may transfer your investment to a completely different series, which will not count as one of your permitted annual exchanges.)
Your vote counts! You may vote quickly and easily in any one of these ways:
• | Via Internet: see the instructions on the enclosed proxy card. |
• | Via Telephone: see the instructions on the enclosed proxy card. |
• | Via Mail: use the enclosed proxy card and postage-paid envelope. |
• | In person: attend the shareholder meetings on June 21 at the Thrivent Financial corporate office in Minneapolis. |
If you’d like more information about the Portfolios, you may order a statement of additional information to the Portfolios’ prospectuses, a shareholder report or the statement of additional information regarding the proposed Portfolio reorganization (request the “Reorganization SAI”) by:
• | Telephone: 800-847-4836 |
• | Mail: Thrivent Series Fund, Inc., 625 Fourth Avenue South, Minneapolis, MN 55415 |
• | Internet: Thrivent.com |
Thank you for taking this matter seriously and participating in this important process.
Sincerely,
David S. Royal
President
Thrivent Series Fund, Inc.
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Questions & Answers
For Contractholders of Thrivent Growth and Income Plus Portfolio
Although we recommend that you read the complete Prospectus/Proxy Statement, we have provided the following questions and answers to clarify and summarize the issues to be voted on.
Q: Why is a contractholder meeting being held?
A: A special meeting of contractholders (the “Meeting”) of Thrivent Growth and Income Plus Portfolio (the “Target Portfolio”) is being held to seek contractholder approval of a reorganization (the “Reorganization”) of the Target Portfolio into Thrivent Moderately Aggressive Allocation Portfolio (the “Acquiring Portfolio”). Please refer to the Prospectus/Proxy Statement for a detailed explanation of the proposed Reorganization and for a more complete description of the Acquiring Portfolio.
Q: Why is the Reorganization being recommended?
A: After careful consideration, the Board of Directors (the “Board”) of Thrivent Series Fund, Inc. (the “Fund”) has determined that the Reorganization is in the best interests of the contractholders of the Target Portfolio and recommends that you cast your vote “FOR” the proposed Reorganization. The Target Portfolio and the Acquiring Portfolio both invest in equity securities and debt securities in approximately the same proportion and each is a series of the Company, an open-end investment company registered under the Investment Company Act of 1940. Thrivent Financial for Lutherans (“Thrivent Financial”) is the investment adviser for the Target Portfolio and the Acquiring Portfolio.
The Board believes that the Reorganization would be in the best interests of the contractholders of the Target Portfolio because: (i) contractholders will become contractholders of a larger combined portfolio with greater potential to increase asset size and achieve economies of scale; (ii) the Acquiring Portfolio invests in a more diversified portfolio of equity and fixed income securities; (iii) the Acquiring Portfolio has better performance than the Target Portfolio for the one-, three- and five-year periods ended December 29, 2017, though there is no guarantee of future performance; (iv) Thrivent Financial believes that it can most effectively manage the assets currently in the Target Portfolio by combining such assets with the Acquiring Portfolio; and (v) the Acquiring Portfolio has a lower gross expense ratio than the Target Portfolio and shareholders of the Target Portfolio will experience a lower net expense ratio in the Acquiring Portfolio following the Reorganization.
Q: Who can vote?
A: Owners of the variable contracts funded by the Target Portfolio and shareholders of the Target Portfolio (e.g., mutual funds affiliated with Thrivent Financial) that invest in the Target Portfolio are entitled to vote. Thrivent Financial and Thrivent Life Insurance Company (“Thrivent Life”), the sponsors of your variable contracts, will cast your votes according to your voting instructions. If no timely voting instructions are received, any shares of the Target Portfolio attributable to a variable contract will be voted by Thrivent Financial or Thrivent Life in proportion to the voting instructions received for all variable contracts participating in the proxy solicitation. If a voting instruction form is returned with no voting instructions, the shares of the Target Portfolio to which the form relates will be voted FOR the Reorganization.
Any shares of the Target Portfolio held by Thrivent Financial, Thrivent Life or any of their affiliates (e.g., a Thrivent-sponsored mutual fund) for their own account will also be voted in proportion to the voting instructions received for all variable contracts participating in the proxy solicitation.
Q: How will the Reorganization affect me?
A: Assuming contractholders approve the proposed Reorganization, the assets of the Target Portfolio will be combined with those of the Acquiring Portfolio. The shares of the Target Portfolio that fund your benefits under variable contracts automatically would be exchanged for an equal dollar value of shares of the Acquiring Portfolio. The Reorganization would affect only the investments underlying variable contracts and would not otherwise affect variable contracts. Following the Reorganization, the Target Portfolio will dissolve.
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Q: Will I have to pay any commission or other similar fee as a result of the Reorganization?
A: No. You will not pay any commissions or other similar fees as a result of the Reorganization.
Q: Will the total annual operating expenses that my portfolio investment bears increase as a result of the Reorganization?
A: No, they will likely decrease. For more information about how fund expenses may change as a result of the Reorganization, please see the comparative and pro forma table and related disclosures in the COMPARISON OF THE PORTFOLIOS—Expenses section of the Prospectus/Proxy Statement.
Q: Will I have to pay any U.S. federal income taxes as a result of the Reorganization?
A: The Reorganization is expected to be tax-free for federal income tax purposes. The Target Portfolio will seek an opinion of counsel to this effect. Generally, neither shareholders nor contractholders will incur capital gains or losses on the exchange of Target Portfolio shares for Acquiring Portfolio shares as a result of the Reorganization. The cost basis on each investment will also remain the same. If you choose to make a total or partial surrender of your contract, you may be subject to taxes and other charges under your contract.
Q: Can I surrender or exchange my interests in the Target Portfolio for a different subaccount option of the Fund or surrender my contract before the Reorganization takes place?
A: Yes, but please refer to the most recent prospectus of your variable contract as certain charges and/or restrictions may apply to such exchanges and surrenders.
Q: If contractholders of the Target Portfolio do not approve the Reorganization, what will happen to the Target Portfolio?
A: Thrivent Financial will reassess what changes it would like to make to a Target Portfolio, including a possible repurposing of the Target Portfolio’s principal investment strategies or recommending a liquidation of the Target Portfolio to the Board. It may ultimately decide to make no changes.
Q: Who pays the costs of the Reorganization?
A: The expenses of the Reorganization, including the costs of the Meeting, will be paid by Thrivent Financial and will not be borne by shareholders of the Target Portfolio.
Q: How can I vote?
A: Contractholders are invited to attend the Meeting and to vote in person. You may also vote by executing a proxy using one of three methods:
• | By Internet: Instructions for casting your vote via the Internet can be found in the enclosed proxy voting materials. The required control number is printed on your enclosed proxy card. If this feature is used, there is no need to mail the proxy card. |
• | By Telephone: Instructions for casting your vote via telephone can be found in the enclosed proxy voting materials. The toll-free number and required control number are printed on your enclosed proxy card. If this feature is used, there is no need to mail the proxy card. |
• | By Mail: If you vote by mail, please indicate your voting instructions on the enclosed proxy card, date and sign the card, and return it in the envelope provided, which is addressed for your convenience and needs no postage if mailed in the United States. |
Contractholders who execute proxies by Internet, telephone or mail may revoke them at any time prior to the Meeting by filing with the Target Portfolio a written notice of revocation, by executing another proxy bearing a later date, by voting later by Internet or telephone or by attending the Meeting and voting in person. Merely attending the Meeting, however, will not revoke any previously submitted proxy.
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Q: When should I vote?
A: Every vote is important and the Board encourages you to record your vote as soon as possible. Voting your proxy now will ensure that the necessary number of votes is obtained, without the time and expense required for additional proxy solicitation.
Q: Who should I call if I have questions about the proposal in the Prospectus/Proxy Statement?
A: Call 866-865-3843 with your questions.
Q: How can I get more information about the Target and Acquiring Portfolios or my variable contract?
A: You may obtain (1) a prospectus, statement of additional information or annual/semiannual report for the Portfolios, (2) a prospectus or statement of additional information for your variable contract or (3) the statement of additional information regarding the Reorganization (request the “Reorganization SAI”) by:
• | Telephone: 800-847-4836 and say “Variable Annuity” or “Variable Universal Life” |
• | Mail: Thrivent Series Fund, Inc., 4321 North Ballard Road, Appleton, WI 54919 |
• | Internet: |
— | For a copy of a prospectus, a statement of additional information, or a shareholder report: |
Thrivent.com |
— | For a copy of this Prospectus/Proxy Statement or the Reorganization SAI: |
www.proxy-direct.com/thr-29819 |
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Thrivent Growth and Income Plus Portfolio
a series of
THRIVENT SERIES FUND, INC.
625 Fourth Avenue South
Minneapolis, Minnesota 55415
800-847-4836
Thrivent.com
NOTICE OF SPECIAL MEETING
OF CONTRACTHOLDERS
To be Held on June 21, 2018
NOTICE IS HEREBY GIVEN THAT a special meeting of contractholders (the “Meeting”) of Thrivent Growth and Income Plus Portfolio (the “Target Portfolio”), a series of Thrivent Series Fund, Inc. (the “Fund”), will be held at the offices of Thrivent Financial for Lutherans, 625 Fourth Avenue South, Minneapolis, Minnesota 55415 on June 21, 2018 at 9:30 a.m. Central time for the following purposes:
1. | To approve an Agreement and Plan of Reorganization pursuant to which the Target Portfolio would (i) transfer all of its assets to Thrivent Moderately Aggressive Allocation Portfolio (the “Acquiring Portfolio”), a series of the Fund, in exchange for Shares of the Acquiring Portfolio, (ii) distribute such Shares of the Acquiring Portfolio to contractholders of the Target Portfolio, and (iii) dissolve. |
2. | To transact such other business as may properly be presented at the Meeting or any adjournment thereof. |
The Board of Directors of the Fund (the “Board”) has fixed the close of business on April 27, 2018 as the record date for the determination of contractholders entitled to notice of, and to vote at, the Meeting and all adjournments thereof.
Contractholders are invited to attend the meeting and vote in person. You may also vote by executing a proxy using one of three methods:
• | By Internet—Instructions for casting your vote via the Internet can be found in the enclosed proxy voting materials. The required control number is printed on your enclosed proxy card. If this feature is used, there is no need to mail the proxy card. |
• | By Telephone—Instructions for casting your vote via telephone can be found in the enclosed proxy voting materials. The toll-free number and required control number are printed on your enclosed proxy card. If this feature is used, there is no need to mail the proxy card. |
• | By Mail—If you vote by mail, please indicate your voting instructions on the enclosed proxy card, date and sign the card, and return it in the envelope provided, which is addressed for your convenience and needs no postage if mailed in the United States. |
Contractholders who execute proxies by Internet, telephone, or mail may revoke them at any time prior to the Meeting by filing with the Target Portfolio a written notice of revocation, by executing another proxy bearing a later date, or by attending the Meeting and voting in person. Merely attending the Meeting, however, will not revoke any previously submitted proxy.
The Board recommends that you cast your vote FOR the proposed Reorganization as described in the Prospectus/Proxy Statement.
YOUR VOTE IS IMPORTANT
Please return your proxy card or record your voting instructions by telephone or via the Internet promptly no matter how many shares you own. In order to avoid the additional expense of further solicitation, we ask that you mail your proxy card or record your voting instructions by telephone or via the Internet promptly regardless of whether you plan to be present in person at the Meeting.
Date: May 7, 2018
Michael W. Kremenak
Secretary
Thrivent Series Fund, Inc.
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COMBINED PROSPECTUS/PROXY STATEMENT
THRIVENT GROWTH AND INCOME PLUS PORTFOLIO
a series of
THRIVENT SERIES FUND, INC.
625 Fourth Avenue South
Minneapolis, Minnesota 55415
800-847-4836
May 7, 2018
This Prospectus/Proxy Statement is furnished to you as a contractholder of Thrivent Growth and Income Plus Portfolio (the “Target Portfolio”), a series of Thrivent Series Fund, Inc. (the “Fund”). A special meeting of shareholders of the Target Portfolio will be held on June 21, 2018 (the “Meeting”) to consider the items that are described below and discussed in greater detail elsewhere in this Prospectus/Proxy Statement. The Board of Directors of the Fund (the “Board”) requests that you vote your shares by completing and returning the enclosed proxy card or by recording your voting instructions by telephone or via the Internet regardless of whether you plan to be present at the Meeting in order to avoid the additional expense of further solicitation.
The Acquiring Portfolio and the Target Portfolio are sometimes referred to herein individually as a “Portfolio” or collectively as the “Portfolios.” Each of the Acquiring Portfolio and the Target Portfolio is organized as a series of the Fund, an open-end investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Target Portfolio is a diversified company and the Acquiring Portfolio is non-diversified company, each as defined under the 1940 Act.
This Prospectus/Proxy Statement sets forth concisely the information shareholders of the Target Portfolio ought to know before voting on the Reorganization. Please read it carefully and retain it for future reference.
The following documents, each having been filed with the Securities and Exchange Commission (the “SEC”), are incorporated herein by reference:
• | The Thrivent Series Fund, Inc. Prospectus, dated April 30, 2018 (the “Fund Prospectus”). |
• | A Statement of Additional Information, dated May 7, 2018, relating to this Combined Prospectus/Proxy Statement (the “Reorganization SAI”); |
• | The Thrivent Series Fund, Inc. Statement of Additional Information, dated April 30, 2018 (the “Fund SAI”). |
Copies of the foregoing may be obtained without charge by calling or writing the Portfolio as set forth below. If you wish to request the Reorganization SAI, please ask for the “Reorganization SAI.”
In addition, each Portfolio will furnish, without charge, a copy of its most recent annual report and subsequent semi-annual report, if any, to a contractholder upon request.
Copies of each Portfolio’s most recent prospectus, statement of additional information, annual report and semi-annual report can be obtained at Thrivent.com. Requests for documents can also be made by calling 800-847-4836 or writing Thrivent Series Fund, Inc., 4321 North Ballard Road, Appleton, WI 54919.
The Portfolios file reports and other information with the SEC. Information filed by the Portfolios with the SEC can be reviewed and copied at the SEC’s Public Reference Room in Washington, DC or on the EDGAR database on the SEC’s internet site (https://www.sec.gov). Information on the operation of the SEC’s Public Reference Room may be obtained by calling the SEC at 202-551-8090. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC’s e-mail address (publicinfo@sec.gov) or by writing the Public Reference Section of the SEC, Washington, DC 20549-1520.
The Board knows of no business other than that discussed above that will be presented for consideration at the Meeting. If any other matter is properly presented, it is the intention of the persons named in the enclosed proxy to vote in accordance with their best judgment.
No person has been authorized to give any information or make any representation not contained in this Prospectus/Proxy Statement and, if so given or made, such information or representation must not be relied upon as having been authorized. This Prospectus/Proxy Statement does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which, or to any person to whom, it is unlawful to make such offer or solicitation.
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Neither the Securities and Exchange Commission nor any state regulator has approved or disapproved of these shares or passed upon the adequacy of this Prospectus/Proxy Statement. A representation to the contrary is a crime.
The date of this Prospectus/Proxy Statement is May 7, 2018. The Prospectus/Proxy Statement will be sent to contractholders on or around May 14, 2018.
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The following is a summary of certain information contained elsewhere in this Prospectus/Proxy Statement and is qualified in its entirety by reference to the more complete information contained in this Prospectus/Proxy Statement. Contractholders should read the entire Prospectus/Proxy Statement carefully.
The Board, including the directors who are not “interested persons” (as defined in the 1940 Act) of each Portfolio (the “Independent Directors”), has unanimously approved an Agreement and Plan of Reorganization (the “Reorganization Agreement”) on behalf of each Portfolio, subject to Target Portfolio contractholder approval. The Reorganization Agreement provides for:
• | the transfer of all of the assets of the Target Portfolio to the Acquiring Portfolio in exchange for shares of the Acquiring Portfolio; |
• | the distribution by the Target Portfolio of such Acquiring Portfolio shares to Target Portfolio shareholders; and |
• | the dissolution of the Target Portfolio. |
When the Reorganization is complete, Target Portfolio shareholders will hold Acquiring Portfolio shares. The aggregate value of the Acquiring Portfolio shares a Target Portfolio shareholder will receive in the Reorganization will equal the aggregate value of the Target Portfolio shares owned by such shareholder immediately prior to the Reorganization. After the Reorganization, the Acquiring Portfolio will continue to operate with the investment objective and investment policies set forth in this Prospectus/Proxy Statement. The Reorganization will not affect your variable contract.
As discussed in more detail elsewhere in this Prospectus/Proxy Statement, the Board believes that the Reorganization would be in the best interests of the Target Portfolio’s contractholders because: (i) contractholders will become contractholders of a larger combined portfolio with greater potential to increase asset size and achieve economies of scale; (ii) the Acquiring Portfolio invests in a more diversified portfolio of equity and fixed income securities; (iii) the Acquiring Portfolio has better performance than the Target Portfolio for the one-, three- and five-year periods ended December 29, 2017, though there is no guarantee of future performance; (iv) Thrivent Financial for Lutherans (“Thrivent Financial” or the “Adviser”), the Portfolios’ investment adviser, believes that it can most effectively manage the assets currently in the Target Portfolio by combining such assets with the Acquiring Portfolio; and (v) the Acquiring Portfolio has a lower gross expense ratio than the Target Portfolio and shareholders of the Target Portfolio will experience a lower net expense ratio in the Acquiring Portfolio following the Reorganization.
In addition, the Board, when determining whether to approve the Reorganization, considered, among other things, the future growth prospects of each of the Target Portfolio and the Acquiring Portfolio, the fact that the Target Portfolio contractholders would not experience any diminution in contractholder services as a result of the Reorganization, and the fact that the Reorganization is expected to be a tax-free reorganization for federal income tax purposes.
Background and Reasons for the Reorganization
The Target Portfolio and the Acquiring Portfolio have similar investment objectives, but the Target Portfolio has an objective to seek income while the Acquiring Portfolio does not. The investment objective of the Target Portfolio is to seek long-term capital growth and income. The investment objective of the Acquiring Portfolio is to seek long-term capital growth.
The two Portfolios also have some similarities and some differences in their principal investment strategies, which are described in more detail in the COMPARISON OF THE PORTFOLIOS—Investment Objective and Principal Strategies section of the Prospectus/Proxy Statement. Both Portfolios invest in a combination of equity securities and debt securities in approximately the same proportion; the Target Portfolio’s target allocation is 70% equity securities and 30% debt securities and the Acquiring Portfolio’s target allocation is 77% equity securities and 23% debt securities. The equity securities in which the Target Portfolio invests are primarily income-producing,
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while the Acquiring Portfolio does not necessarily invest in income-producing equity securities. Another difference is that the Acquiring Portfolio invests in a combination of other funds managed by the Adviser and directly held financial instruments, but the Target Portfolio does not generally invest in other funds managed by the Adviser.
In determining whether to recommend approval of the Reorganization Agreement to Target Portfolio contractholders, the Board considered a number of factors, including, but not limited to: (i) the expenses and advisory fees applicable to the Portfolios before the proposed Reorganization and the estimated expense ratios of the combined portfolio after the proposed Reorganization; (ii) the comparative investment performance of the Portfolios; (iii) the future growth prospects of each Portfolio; (iv) the terms and conditions of the Reorganization Agreement; (v) whether the Reorganization would result in the dilution of contractholder interests; (vi) the compatibility of the Portfolios’ investment objectives, policies, risks and restrictions; (vii) that the proposed Reorganization was expected to be a tax-free reorganization for federal income tax purposes; (viii) the compatibility of the Portfolios’ service features available to contractholders, including exchange privileges; and (ix) the estimated costs of the Reorganization, which would be borne by the Adviser. The Board concluded that these factors supported a determination to approve the Reorganization Agreement.
The Board has determined that the Reorganization is in the best interests of the Target Portfolio and that the interests of the Target Portfolio’s contractholders will not be diluted as a result of the Reorganization. In addition, the Board has determined that the Reorganization is in the best interests of the Acquiring Portfolio and that the interests of the Acquiring Portfolio contractholders will not be diluted as a result of the Reorganization.
The Board is asking contractholders of the Target Portfolio to approve the Reorganization at the Meeting to be held on June 21, 2018. If contractholders of the Target Portfolio approve the proposed Reorganization, it is expected that the closing date of the transaction (the “Closing Date”) will be after the close of business on or about June 28, 2018, but it may be at a different time as described herein. If contractholders of the Target Portfolio do not approve the proposed Reorganization, the Board will consider alternatives, including repurposing the Target Portfolio’s principal strategies.
The Board recommends that you vote “FOR” the Reorganization.
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Investment Objective and Principal Strategies
Investment Objective. The Target Portfolio and the Acquiring Portfolio have similar investment objectives, but the Target Portfolio has an objective to seek income while the Acquiring Portfolio does not. The investment objective of the Target Portfolio is to seek long-term capital growth and income. The investment objective of the Acquiring Portfolio is to seek long-term capital growth.
Principal Strategies. Both Portfolios invest in a combination of equity securities and debt securities in approximately the same proportion; the Target Portfolio’s target allocation is 70% equity securities and 30% debt securities and the Acquiring Portfolio’s target allocation is 77% equity securities and 23% debt securities. While the Acquiring Portfolio invests in a combination of other funds managed by the Adviser and directly held financial instruments, the Target Portfolio does not generally invest in other funds managed by the Adviser. However, the Target Portfolio may invest in unaffiliated exchange-traded funds (“ETFs”) as a principal investment strategy.
The equity securities in which the Target Portfolio are primarily income-producing, while the Acquiring Portfolio does not necessarily invest in income-producing equity securities. Under normal circumstances, the Target Portfolio invests in real estate investment trusts (“REITs”). The Acquiring Portfolio does not invest in REITs as a principal investment strategy.
Both Portfolios invest in a variety of fixed income securities of any maturity or credit quality. Both Portfolios invest in in leveraged loans, which are senior secured loans that are made by banks or other lending institutions to companies that are rated below investment grade.
Both Portfolios can utilize derivatives (such as futures and swaps) for investment exposure or hedging purposes. The Portfolios may enter into standardized derivatives contracts traded on domestic or foreign securities exchanges, boards of trade, or similar entities, and non-standardized derivatives contracts traded in the over-the-counter market. In addition, both Portfolios have exposure to foreign securities, including those of issuers in emerging markets.
Portfolio Holdings. A description of the Portfolios’ policies and procedures with respect to the disclosure of the Portfolios’ portfolio securities is available on the Portfolios’ website.
The Portfolios are subject to similar principal risks, with a few differences. These risks are described below. Shares of the each Portfolio will rise and fall in value and there is a risk that you could lose money by investing in each Portfolio.
Principal risks to which both Portfolios are subject
Allocation Risk. The Portfolio’s investment performance depends upon how its assets are allocated across broad asset categories and applicable sub-classes within such categories. Some broad asset categories and sub-classes may perform below expectations or the securities markets generally over short and extended periods. In particular, underperformance in the equity markets would have a material adverse effect on the Portfolio’s total return given its significant allocation to equity securities. Therefore, a principal risk of investing in the Portfolio is that the allocation strategies used and the allocation decisions made will not produce the desired results.
Credit Risk. Credit risk is the risk that an issuer of a debt security to which the Portfolio’s portfolio is exposed may no longer be able or willing to pay its debt. As a result of such an event, the debt security may decline in price and affect the value of the Portfolio.
Derivatives Risk. The use of derivatives (such as futures and swaps) involves additional risks and transaction costs which could leave the Portfolio in a worse position than if it had not used these instruments. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the contract. Changes in the value of the derivative may not correlate as intended with the underlying asset, rate or index, and the Portfolio could lose much more than the original amount invested. Derivatives can be highly volatile, illiquid and difficult to value. Certain derivatives may
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also be subject to counterparty risk, which is that the other party in the transaction will not fulfill its contractual obligations due to its financial condition, market events, or other reasons.
Emerging Markets Risk. The economic and political structures of developing countries, in most cases, do not compare favorably with the U.S. or other developed countries in terms of wealth and stability, and their financial markets often lack liquidity. Portfolio performance will likely be negatively affected by portfolio exposure to countries in the midst of, among other things, hyperinflation, currency devaluation, trade disagreements, sudden political upheaval, or interventionist government policies. Significant buying or selling actions by a few major investors may also heighten the volatility of emerging markets. These factors make investing in emerging market countries significantly riskier than in other countries, and events in any one country could cause the Portfolio’s share price to decline.
Foreign Securities Risk. Foreign securities are generally more volatile than their domestic counterparts, in part because of higher political and economic risks, lack of reliable information and fluctuations in currency exchange rates. Foreign securities may also be more difficult to resell than comparable U.S. securities because the markets for foreign securities are often less liquid. Even when a foreign security increases in price in its local currency, the appreciation may be diluted by adverse changes in exchange rates when the security’s value is converted to U.S. dollars. Foreign withholding taxes also may apply and errors and delays may occur in the settlement process for foreign securities. All of these risks may be heightened for securities of issuers located in, or with significant operations in, emerging market countries.
High Yield Risk. High yield securities – commonly known as “junk bonds” – to which the Portfolio’s portfolio is exposed are considered predominantly speculative with respect to the issuer’s continuing ability to make principal and interest payments. If the issuer of the security is in default with respect to interest or principal payments, the value of the Portfolio may be negatively affected.
Interest Rate Risk. Interest rate risk is the risk that bond prices decline in value when interest rates rise for bonds that pay a fixed rate of interest. Bonds with longer durations or maturities tend to be more sensitive to changes in interest rates than bonds with shorter durations or maturities. In addition, both mortgage-backed and asset-backed securities are sensitive to changes in the repayment patterns of the underlying security. If the principal payment on the underlying asset is repaid faster or slower than the holder of the asset-backed or mortgage-backed security anticipates, the price of the security may fall, particularly if the holder must reinvest the repaid principal at lower rates or must continue to hold the security when interest rates rise. This effect may cause the value of the Portfolio to decline and reduce the overall return of the Portfolio. Changes by the Federal Reserve to monetary policies could affect interest rates and the value of some securities.
Investment Adviser Risk. The Portfolio is actively managed and the success of its investment strategy depends significantly on the skills of the Adviser in assessing the potential of the investments in which the Portfolio invests. This assessment of investments may prove incorrect, resulting in losses or poor performance, even in rising markets.
Issuer Risk. Issuer risk is the possibility that factors specific to a company to which the Portfolio’s portfolio is exposed will affect the market prices of the company’s securities and therefore the value of the Portfolio. Common stock of a company is subordinate to other securities issued by the company. If a company becomes insolvent, interests of investors owning common stock will be subordinated to the interests of other investors in, and general creditors of, the company.
Leveraged Loan Risk. Leveraged loans (also known as bank loans) are subject to the risks typically associated with debt securities. In addition, leveraged loans, which typically hold a senior position in the capital structure of a borrower, are subject to the risk that a court could subordinate such loans to presently existing or future indebtedness or take other action detrimental to the holders of leveraged loans. Leveraged loans are also subject to the risk that the value of the collateral, if any, securing a loan may decline, be insufficient to meet the obligations of the borrower, or be difficult to liquidate. Some leveraged loans are not as easily purchased or sold as publicly-traded securities and others are illiquid, which may make it more difficult for the Portfolio to value them or dispose of them at an acceptable price. Below investment-grade leveraged loans are typically more credit sensitive. In the event of fraud or misrepresentation, the Portfolio may not be protected under federal securities laws with respect to leveraged loans that may not be in the form of “securities.” The settlement period for some leveraged loans may be more than seven days.
Liquidity Risk. Liquidity is the ability to sell a security relatively quickly for a price that most closely reflects the actual value of the security. High-yield bonds and leveraged loans have a less liquid resale market. In addition, dealer inventories of bonds are at or near historic lows in relation to market size, which has the potential to decrease
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liquidity and increase price volatility in the fixed income markets, particularly during periods of economic or market stress. As a result, the Adviser may have difficulty selling or disposing of securities quickly in certain markets or may only be able to sell the holdings at prices substantially less than what the Adviser believes they are worth.
Market Risk. Over time, securities markets generally tend to move in cycles with periods when security prices rise and periods when security prices decline. The value of the Portfolio’s investments may move with these cycles and, in some instances, increase or decrease more than the applicable market(s) as measured by the Portfolio’s benchmark index(es). The securities markets may also decline because of factors that affect a particular industry.
Mortgage-Related and Other Asset-Backed Securities Risk. The value of mortgage-related and asset-backed securities will be influenced by the factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid.
Volatility Risk. Volatility risk is the risk that certain types of securities shift in and out of favor depending on market and economic conditions as well as investor sentiment. The value of the Portfolio’s shares may be affected by weak equity markets or changes in interest rate or bond yield levels. As a result, the value of the Portfolio’s shares may fluctuate significantly in the short term.
Additional principal risks to which only the Target Portfolio is subject
Convertible Securities Risk. Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert, and are thus subject to market risk. The Portfolio may also be forced to convert a convertible security at an inopportune time, which may decrease the Portfolio’s return.
ETF Risk. An ETF is subject to the risks of the underlying investments that it holds. In addition, for index-based ETFs, the performance of an ETF may diverge from the performance of such index (commonly known as tracking error). ETFs are subject to fees and expenses (like management fees and operating expenses) that do not apply to an index, and the Portfolio will indirectly bear its proportionate share of any such fees and expenses paid by the ETFs in which it invests.
Portfolio Turnover Rate Risk. The Portfolio may engage in active and frequent trading of portfolio securities in implementing its principal investment strategies. A high rate of portfolio turnover (100% or more) involves correspondingly greater expenses which are borne by the Portfolio and its shareholders and may also result in short-term capital gains taxable to shareholders.
Preferred Securities Risk. There are certain additional risks associated with investing in preferred securities, including, but not limited to, preferred securities may include provisions that permit the issuer, at its discretion, to defer or omit distributions for a stated period without any adverse consequences to the issuer; preferred securities are generally subordinated to bonds and other debt instruments in a company’s capital structure in terms of having priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt instruments; preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. Government securities; generally, traditional preferred securities offer no voting rights with respect to the issuing company unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may elect a number of directors to the issuer’s board; and in certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified date.
Real Estate Investment Trust (“REIT”) Risk. REITs generally can be divided into three types: equity REITs, mortgage REITs, and hybrid REITs (which combine the characteristics of equity REITs and mortgage REITs). Equity REITs will be affected by changes in the values of, and income from, the properties they own, while mortgage REITs may be affected by the credit quality of the mortgage loans they hold. All REIT types may be affected by changes in interest rates. REITs are subject to additional risks, including the fact that they are dependent on specialized management skills that may affect the REITs’ abilities to generate cash flows for operating purposes and for making investor distributions. REITs may have limited diversification and are subject to the risks associated with obtaining financing for real property. As with any investment, there is a risk that REIT securities and other real estate industry investments may be overvalued at the time of purchase. In addition, a REIT can pass its income through to its investors without any tax at the entity level if it complies with various requirements under the Internal Revenue Code. There is the risk, however, that a REIT held by the Portfolio will fail to qualify for this tax-free pass-through treatment of its income. In addition, due to recent changes in the tax laws, certain tax benefits of REITs may
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not be passed through to mutual fund shareholders. By investing in REITs indirectly through the Portfolio, in addition to bearing a proportionate share of the expenses of the Portfolio, you will also indirectly bear similar expenses of the REITs in which the Portfolio invests.
Sovereign Debt Risk. Sovereign debt securities are issued or guaranteed by foreign governmental entities. These investments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies.
Additional principal risks to which only the Acquiring Portfolio is subject
Underlying Portfolio Risk. The performance of the Portfolio is dependent, in part, upon the performance of the underlying Portfolios in which the Portfolio invests. As a result, the Portfolio is subject to the same risks as those faced by the underlying Portfolios.
The Board. The Board has oversight responsibilities for each Portfolio and performs its fiduciary duties imposed on the directors of investment companies by the 1940 Act and under applicable state law.
The Adviser. Thrivent Financial is the investment adviser for each Portfolio and manages each Portfolio on a day-to-day basis. Thrivent Financial and its investment advisory affiliate, Thrivent Asset Management, LLC, have been in the investment advisory business since 1986 and managed approximately $120.6 billion in assets as of December 31, 2017, including approximately $50.3 billion in mutual fund assets. These advisory entities are located at 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
The Portfolios’ annual report to contractholders discusses the basis for the Board approving the investment advisory agreement during the period covered by the report.
Portfolio Management. Stephen D. Lowe, CFA has served as a portfolio manager of the Target Portfolio since 2013. Mark L. Simenstad, CFA, Noah J. Monsen, CFA, and Reginald L. Pfeifer, CFA have served as portfolio managers of the Target Portfolio since 2015. John T. Groton, Jr., CFA has served as a portfolio manager of the Target Portfolio since 2016. Mr. Lowe is Vice President of Fixed Income Mutual Funds and Separate Accounts and has been with Thrivent Financial since 1997. He has served as a portfolio manager since 2009. Mr. Simenstad is Chief Investment Strategist and has been with Thrivent Financial since 1999. Mr. Monsen has been with Thrivent Financial since 2000 and has served in an investment management capacity since 2008. Mr. Pfeifer has been with Thrivent Financial since 1990 and has served as an equity portfolio manager since 2003. Mr. Groton has been with Thrivent Financial since 2007 in an investment management capacity and currently is the firm’s Director of Equity Research.
David C. Francis, CFA and Mark L. Simenstad, CFA have served as portfolio managers of the Acquiring Portfolio since its inception in 2005. Darren M. Bagwell, CFA and Stephen D. Lowe, CFA have served as portfolio managers of the Acquiring Portfolio since April of 2016. David S. Royal has served as a portfolio manager of the Acquiring Portfolio since April 2018. Mr. Francis is Vice President of Investment Equities and has been with Thrivent Financial since 2001. Mr. Simenstad is Chief Investment Strategist and has been with Thrivent Financial since 1999. Mr. Bagwell has been with Thrivent Financial since 2002 in an investment management capacity and currently is a Senior Equity Portfolio Manager. Mr. Lowe is Vice President of Fixed Income Mutual Funds and Separate Accounts and has been with Thrivent Financial since 1997. He has served as a portfolio manager since 2009. Mr. Royal is the Chief Investment Officer and has been with Thrivent Financial since 2006.
The Fund SAI provides information about the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of shares of the Portfolios.
Advisory Fees. Each Portfolio pays an annual investment advisory fee to the Adviser. The advisory contract between the Adviser and the Fund provides for the following advisory fees for each Portfolio, expressed as an annual rate of average daily net assets:
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Target Portfolio
0.650% of average daily net assets up to $250 million
0.600% of average daily net assets over $250 million
Acquiring Portfolio
0.700% of average daily net assets up to $500 million
0.675% of average daily net assets greater than $500 million up to $2 billion
0.650% of average daily net assets greater than $2 billion up to $5 billion
0.625% of average daily net assets greater than $5 billion up to $10 billion
0.600% of average daily net assets over $10 billion
During the twelve-months ended December 31, 2017, the contractual advisory fees for the Target Portfolio were 0.650% of the Target Portfolio’s average daily net assets.
During the twelve-months ended December 31, 2017, the contractual advisory fees for the Acquiring Portfolio were 0.658% of the Acquiring Portfolio’s average daily net assets.
For a complete description of each Portfolio’s advisory services, see the section of the Portfolio Prospectus entitled “Management” and the section of the Fund SAI entitled “Investment Adviser, Investment Subadvisers, and Portfolio Managers.”
The table below sets forth the fees and expenses that investors may pay to buy and hold shares of each of the Target Portfolio and the Acquiring Portfolio, including (i) the fees and expenses paid by the Target Portfolio for the twelve-month period ended December 31, 2017, (ii) the fees and expenses paid by the Acquiring Portfolio for the twelve-month period ended December 31, 2017, and (iii) pro forma fees and expenses for the Acquiring Portfolio for the twelve-month period ended December 31, 2017, assuming the Reorganization had been completed as of the beginning of such period. If you own a variable annuity contract or a variable life insurance contract, you will have additional expenses, including mortality and expense risk charges. These additional contract-level expenses are not reflected in the table below.
Shareholder Fees for Target and Acquiring Portfolios - Actual and Pro Forma
(fees directly paid from your investment)
Maximum Sales Charge (Load) N/A
Maximum Deferred Sales Charge (Load) N/A
Actual | Pro Forma | |||||||||||||||||
Annual Fund Operating Expenses As a Percentage of Average Net Assets (expenses that you pay each year as a percentage of the value of your investment) | Target Portfolio | Acquiring Portfolio | Acquiring Portfolio (assuming merger with Target Portfolio) | |||||||||||||||
Management Fees | 0.65 | % | 0.66 | % | 0.66% | |||||||||||||
Other Expenses | 0.31 | % | 0.03 | % | 0.03% | |||||||||||||
Acquired (Underlying) Portfolio Fees and Expenses | 0.03 | % | 0.25 | % | 0.24% | |||||||||||||
Total Annual Operating Expenses | 0.99 | % | 0.94 | % | 0.93% | |||||||||||||
Less Expense Reimbursement* | 0.06 | % | 0.23 | % | 0.23% | |||||||||||||
Net Annual Portfolio Operating Expenses | 0.93 | % | 0.71 | % | 0.70% |
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* The Adviser has contractually agreed, through at least April 30, 2019 to waive certain fees and/or reimburse certain expenses associated with the shares of the Thrivent Growth and Income Plus Portfolio in order to limit the total Annual Portfolio Operating Expenses After Fee Waivers and/or Expense Reimbursements, if any, to an annual rate of 0.90% of the average daily net assets of the shares. This contractual provision, however, may be terminated before the indicated termination date upon the mutual agreement between the Independent Directors and the Adviser.
* The Adviser has contractually agreed, for as long as the current fee structure is in place, to waive an amount equal to any investment advisory fees indirectly incurred by Moderately Aggressive Allocation Portfolio as a result of its investment in any other mutual fund for which the Adviser or an affiliate serves as investment adviser, other than Thrivent Cash Management Trust. This contractual provision may be terminated upon the mutual agreement between the Independent Directors and the Adviser.
Example
The following example, using the actual and pro forma operating expenses for the twelve-month period ended December 31, 2017, is intended to help you compare the costs of investing in the Acquiring Portfolio pro forma after the Reorganization with the costs of investing in each of the Target Portfolio and the Acquiring Portfolio without the Reorganization. The example assumes that you invest $10,000 in each Portfolio for the time period indicated and that you redeem all of your shares at the end of each period. The example also assumes that your investments have a 5% return each year and that each Portfolio’s operating expenses remain the same each year. Although your actual returns may be higher or lower, based on these assumptions your costs would be:
Actual | Pro Forma | |||||||||||
Target Portfolio | Acquiring Portfolio | Acquiring Portfolio (assuming | ||||||||||
Total operating expenses assuming redemption at the end of the period | ||||||||||||
One Year | $95 | $73 | $72 | |||||||||
Three Years | $309 | $277 | $273 | |||||||||
Five Years | $541 | $498 | $492 | |||||||||
Ten Years | $1,208 | $1,134 | $1,122 |
Portfolio Turnover
Each Portfolio pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These costs, which are not reflected in Total Annual Operating Expenses or in the Example, affect the Portfolios’ performance. During the fiscal year ended December 31, 2017, the Acquiring Portfolio’s and the Target Portfolio’s portfolio turnover rates were 104% and 131%, respectively, of the average value of their portfolios.
Shares in the Fund are currently sold, without sales charges, only to: (1) separate accounts of insurance companies, including those of Thrivent Financial and Thrivent Life Insurance Company (“Thrivent Life”), a subsidiary of Thrivent Financial, which are used to fund benefits of variable life insurance and variable annuity contracts (each a “variable contract”); and (2) other portfolios of the Fund.
A Prospectus for the variable contract describes how the premiums and the assets relating to the variable contract may be allocated among one or more of the subaccounts that correspond to the portfolios of the Fund.
The Fund serves as the underlying investment vehicle for variable annuity contracts and variable life insurance policies that are funded through separate accounts established by Thrivent Financial and Thrivent Life. It is possible
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that in the future, it may not be advantageous for variable life insurance separate accounts and variable annuity separate accounts to invest in the portfolios at the same time. Although neither Thrivent Financial, Thrivent Life, nor the Fund currently foresees any such disadvantage, the Fund’s Board monitors events in order to identify any material conflicts between such policy owners and contract owners. Material conflict could result from, for example, (1) changes in state insurance laws, (2) changes in federal income tax law, (3) changes in the investment management of a portfolio, or (4) differences in voting instructions between those given by policy owners and those given by contract owners. Should it be necessary, the Board would determine what action if any, should be taken on response to any such conflicts.
As a result of differences in tax treatment and other considerations, a conflict could arise between the interests of the variable life insurance contract owners and variable annuity contract owners with respect to their investments in the Fund. The Fund’s Board will monitor events in order to identify the existence of any material irreconcilable conflicts and to determine what action if any, should be taken in response to any such conflicts.
The price of a Portfolio’s shares is based on the Portfolio’s net asset value (“NAV”). Each Portfolio generally determines its NAV once daily at the close of regular trading on the New York Stock Exchange (“NYSE”), which is normally 4:00 p.m. Eastern Time. If the NYSE has an unscheduled early close but certain other markets remain open until their regularly scheduled closing time, the NAV may be determined as of the regularly scheduled closing time of the NYSE. If the NYSE and/or certain other markets close early due to extraordinary circumstances (e.g., weather, terrorism, etc.), the NAV may be calculated as of the early close of the NYSE and/or other markets. The NAV generally will not be determined on days when, due to extraordinary circumstances, the NYSE and/or certain other markets do not open for trading. The Portfolios generally do not determine NAV on holidays observed by the NYSE or on any other day when the NYSE is closed. The NYSE is regularly closed on Saturdays and Sundays, New Year’s Day, Martin Luther King, Jr. Day, Presidents Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Each Portfolio determines its NAV by adding the value of Portfolio assets, subtracting the Portfolio’s liabilities, and dividing the result by the number of outstanding shares. To determine the NAV, the other Portfolios generally value their securities at current market value using readily available market prices. If market prices are not available or if the investment adviser determines that they do not accurately reflect fair value for a security, the Board of Directors has authorized the investment adviser to make fair valuation determinations pursuant to policies approved by the Board of Directors. Fair valuation of a particular security is an inherently subjective process, with no single standard to utilize when determining a security’s fair value. In each case where a security is fair valued, consideration is given to the facts and circumstances relevant to the particular situation. This consideration includes a review of various factors set forth in the pricing policies adopted by the Board of Directors. For any portion of a Portfolio’s assets that are invested in other mutual funds, the NAV is calculated based upon the NAV of the mutual funds in which the Portfolio invests, and the prospectuses for those mutual funds explain the circumstances under which they will use fair value pricing and the effects of such a valuation.
Because many foreign markets close before the U.S. markets, significant events may occur between the close of the foreign market and the close of the U.S. markets, when the Portfolio’s assets are valued, that could have a material impact on the valuation of foreign securities (i.e., available price quotations for these securities may not necessarily reflect the occurrence of the significant event). The Fund, subject to oversight by the Board of Directors, evaluates the impact of these significant events and adjusts the valuation of foreign securities to reflect the fair value as of the close of the U.S. markets to the extent that the available price quotations do not, in the Adviser’s opinion, adequately reflect the occurrence of the significant events.
The separate accounts place an order to buy or sell shares of a respective Portfolio each business day. The amount of the order is based on the aggregate instructions from owners of the variable annuity contracts. Orders placed before the close of the NYSE on a given day by the separate accounts result in share purchases and redemptions at the NAV calculated as of the close of the NYSE that day.
Please note that the Target Portfolio and the Acquiring Portfolio have identical valuation policies. As a result, there will be no material change to the value of the Target Portfolio’s assets because of the Reorganization.
Also, the Target Portfolio and the Acquiring Portfolio have identical policies with respect to frequent purchases and redemptions and standing allocation orders (for more information, please see Policy Regarding
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Frequent Purchases and Redemptions and Standing Allocation Order disclosures in the Acquiring Portfolio’s Prospectus—these disclosures are incorporate herein by reference). The Reorganization will not affect these policies.
The following table sets forth the capitalization of the Target Portfolio and the Acquiring Portfolio, as of December 31, 2017, and the pro forma capitalization of the Acquiring Portfolio as if the Reorganization occurred on that date. These numbers may differ as of the Closing Date.
Actual | Pro Forma | |||||||||||
Target Portfolio | Acquiring Portfolio | Acquiring Portfolio (assuming merger with the Target Portfolio) | ||||||||||
Net assets | ||||||||||||
Portfolio Net Assets | $99,012,685 | $6,183,520,301 | $6,282,532,986 | |||||||||
Net asset value per share | ||||||||||||
Net asset value | $11.41 | $16.40 | $16.40 | |||||||||
Shares outstanding | ||||||||||||
Portfolio Shares | 8,680,225 | 377,080,927 | 383,118,875 |
The pro forma shares outstanding reflect the issuance by the Acquiring Portfolio of approximately 6,037,948 shares. Such issuance reflects the exchange of the assets of the Target Portfolio for newly issued shares of the Acquiring Portfolio at the pro forma net asset value per share. The aggregate value of the Acquiring Portfolio shares that a Target Portfolio shareholder receives in the Reorganization will equal the aggregate value of the Target Portfolio shares owned immediately prior to the Reorganization.
Annual Performance Information
The following chart shows the annual returns of the Target Portfolio since its inception and the Acquiring Portfolio for the past ten calendar years. The bar charts include the effects of each Portfolio’s expenses, but not charges or deductions against your variable contract. If these charges and deductions were included, returns would be lower than those shown.
Target Portfolio
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Acquiring Portfolio
As a result of market activity, current performance may vary from the figures shown.
The Target Portfolio’s total return for the three-month period from January 1, 2018 to March 31, 2018 was [ ]%. The Acquiring Portfolio’s total return for the three-month period from January 1, 2018 to March 31, 2018 was [ ]%. During the past 10 years, the Target Portfolio’s highest quarterly return was 14.48% (for the quarter ended June 30, 2009) and its lowest quarterly return was -16.30% (for the quarter ended September 30, 2011). During the past 10 years, the Acquiring Portfolio’s highest quarterly return was 17.17% (for the quarter ended June 30, 2009) and its lowest quarterly return was -19.32% (for the quarter ended December 31, 2008).
Comparative Performance Information
As a basis for evaluating each Portfolio’s performance and risks, the following table shows how each Portfolio’s performance compares with broad-based market indices that the Adviser believes are appropriate benchmarks for such Portfolio. The Target Portfolio’s benchmarks are the MSCI World Index – USD Net Returns, which measures the performance of stock markets in developed countries throughout the world, the Bloomberg Barclays U.S. Mortgage-Backed Securities Index, which covers the mortgage-backed securities component of the Bloomberg Barclays U.S. Aggregate Bond Index, the S&P/LSTA Leveraged Loan Index, which reflects the performance of the largest facilities in the leveraged loan market, and the Bloomberg Barclays U.S. High Yield Ba/B 2% Issuer Capped Index, which represents the performance of U.S. short duration, higher-rated high yield bonds. The Acquiring Portfolio’s benchmarks are the S&P 500 Index, which measures the performance of 500 widely held, publicly traded stocks, the Bloomberg Barclays U.S. Aggregate Bond Index, which measures the performance of U.S. investment grade bonds, and the MSCI All Country World Index ex-USA – USD Net Returns, which measures the performance of stock markets in developed and emerging markets countries throughout the world (excluding the U.S.). Further, the table includes the effects of each Portfolio’s expenses, but not charges or deductions against your variable contract. If these charges and deductions were included, returns would be lower than those shown.
Average annual total returns are shown below for each Portfolio for the periods ended December 29, 2017 (the most recently completed calendar year prior to the date of this Prospectus/Proxy Statement). Remember that past performance of a Portfolio is not indicative of its future performance.
Average Annual Total Returns for the Period ended December 29, 2017
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Target Portfolio | Acquiring Portfolio | |||||||||||
Past 1 Year | Past 5 Years | Since Inception (4/30/08) | Past 1 Year | Past 5 Years | Past 10 Years | |||||||
Applicable Portfolio | 14.01% | 8.36% | 4.81% | 16.79% | 10.45% | 6.04% | ||||||
S&P 500 Index (reflects no deduction for fees, expenses or taxes) | – | – | – | 21.83% | 15.79% | 8.50% | ||||||
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) | – | – | – | 3.54% | 2.10% | 4.01% | ||||||
MSCI All Country World Index ex-USA - USD Net Returns (reflects no deduction for fees, expenses or taxes) | – | – | – | 27.19% | 6.80% | 1.84% | ||||||
MSCI World Index-USD Net Returns (reflects no deduction for fees, expenses or taxes) | 22.40% | 11.64% | 5.69% | – | – | – | ||||||
Bloomberg Barclays U.S. Mortgage-Backed Securities Index (reflects no deduction for fees, expenses or taxes) | 2.47% | 2.04% | 3.70% | – | – | – | ||||||
Bloomberg Barclays U.S. High Yield Ba/B 2% Issuer Capped Index (reflects no deduction for fees, expenses or taxes) | 6.92% | 5.45% | 7.54% | – | – | – | ||||||
S&P/LSTA Leveraged Loan Index (reflects no deduction for fees, expenses or taxes) | 4.12% | 4.03% | 5.27% | – | – | – |
Thrivent Financial, 625 Fourth Avenue South, Minneapolis, Minnesota 55415, provides administrative personnel and services necessary to operate the Portfolios and receives an administration fee from the Portfolios. The custodian for the Portfolios is State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111. PricewaterhouseCoopers LLP, 45 South Seventh Street, Suite 3400, Minneapolis, MN 55402, serves as the Fund’s independent registered public accounting firm.
The Fund is an open-end management investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and was organized as a Minnesota corporation on February 24, 1986. The Fund is made up of 30 separate series or “Portfolios.” Each Portfolio of the Fund, other than the Thrivent Asset Allocation Portfolios, is diversified. Each Portfolio is in effect a separate investment fund, and a separate class of capital stock of the Fund is issued with respect to each Portfolio.
The Fund’s organizational documents are filed as part of the Fund’s registration statement with the SEC, and shareholders may obtain copies of such documents as described on the first page of this Prospectus/Proxy Statement and in the Questions and Answers preceding this Prospectus/Proxy Statement.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase a Portfolio through a broker-dealer or other financial intermediary, the Portfolio and its related companies may pay the intermediary for the sale of Portfolio shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Portfolio over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
INFORMATION ABOUT THE REORGANIZATION
Under the Reorganization Agreement, the Target Portfolio will transfer all of its assets to the Acquiring Portfolio in exchange for shares of the Acquiring Portfolio. The Acquiring Portfolio shares issued to the Target Portfolio will have an aggregate value equal to the aggregate value of the Target Portfolio’s net assets immediately
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prior to the Reorganization. Upon receipt by the Target Portfolio of Acquiring Portfolio shares, the Target Portfolio will distribute such shares of the Acquiring Portfolio to Target Portfolio shareholders. Then, as soon as practicable after the Closing Date of the Reorganization, the Target Portfolio will dissolve under applicable state law.
The Target Portfolio will distribute the Acquiring Portfolio shares received by it pro rata to Target Portfolio shareholders of record in exchange for their interest in shares of the Target Portfolio. Accordingly, as a result of the Reorganization, each Target Portfolio shareholder would own Acquiring Portfolio shares that would have an aggregate value immediately after the Reorganization equal to the aggregate value of that shareholder’s Target Portfolio shares immediately prior to the Reorganization. The interests of each of the Target Portfolio’s shareholders will not be diluted as a result of the Reorganization. However, as a result of the Reorganization, a shareholder of the Target Portfolio or the Acquiring Portfolio will hold a reduced percentage of ownership in the larger combined portfolio than the shareholder did in either of the separate Portfolios.
No sales charge or fee of any kind will be assessed to Target Portfolio shareholders in connection with their receipt of Acquiring Portfolio shares in the Reorganization.
Approval of the Reorganization will constitute approval of amendments to any of the fundamental investment restrictions of the Target Portfolio that might otherwise be interpreted as impeding the Reorganization, but solely for the purpose of and to the extent necessary for consummation of the Reorganization.
Terms of the Reorganization Agreement
The following is a summary of the material terms of the Reorganization Agreement. This summary is qualified in its entirety by reference to the form of Reorganization Agreement, a form of which is attached as Appendix A to the Reorganization SAI.
Pursuant to the Reorganization Agreement, the Acquiring Portfolio will acquire all of the assets of the Target Portfolio on the Closing Date in exchange for shares of the Acquiring Portfolio. Subject to the Target Portfolio’s contractholders approving the Reorganization, the Closing Date shall occur on June 28, 2018 or such other date as determined by an officer of the Fund.
On the Closing Date, the Target Portfolio will transfer to the Acquiring Portfolio all of its assets. The Acquiring Portfolio will in turn transfer to the Target Portfolio a number of its shares equal in value to the value of the net assets of the Target Portfolio transferred to the Acquiring Portfolio as of the Closing Date, as determined in accordance with the valuation method described in the Acquiring Portfolio’s then current prospectus. In order to minimize any potential for undesirable federal income and excise tax consequences in connection with the Reorganization, the Target Portfolio will distribute on or before the Closing Date all or substantially all of its undistributed net investment income (including net capital gains) as of such date.
The Target Portfolio expects to distribute shares of the Acquiring Portfolio received by the Target Portfolio to contractholders of the Target Portfolio promptly after the Closing Date and then dissolve.
The Acquiring Portfolio and the Target Portfolio have made certain standard representations and warranties to each other regarding their capitalization, status and conduct of business. Unless waived in accordance with the Reorganization Agreement, the obligations of the parties to the Reorganization Agreement are conditioned upon, among other things:
• | the approval of the Reorganization by the Target Portfolio’s contractholders; |
• | the absence of any rule, regulation, order, injunction or proceeding preventing or seeking to prevent the consummation of the transactions contemplated by the Reorganization Agreement; |
• | the receipt of all necessary approvals, registrations and exemptions under federal and state laws; |
• | the truth in all material respects as of the Closing Date of the representations and warranties of the parties and performance and compliance in all material respects with the parties’ agreements, obligations and covenants required by the Reorganization Agreement; |
• | the effectiveness under applicable law of the registration statement of the Acquiring Portfolio of which this Prospectus/Proxy Statement forms a part and the absence of any stop orders under the Securities Act of 1933, as amended, pertaining thereto; and |
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• | the receipt of an opinion of counsel relating to the characterization of the Reorganization as a tax-free reorganization for federal income tax purposes (as further described herein under the heading “Material Federal Income Tax Consequences of the Reorganization”). |
The Reorganization Agreement may be terminated or amended by the mutual consent of the parties either before or after approval thereof by the contractholders of the Target Portfolio, provided that no such amendment after such approval shall be made if it would have a material adverse effect on the interests of such Target Portfolio’s contractholders. The Reorganization Agreement also may be terminated by the non-breaching party if there has been a material misrepresentation, material breach of any representation or warranty, material breach of contract or failure of any condition to closing.
Reasons for the Proposed Reorganization
In determining whether to recommend approval of the Reorganization Agreement to Target Portfolio contractholders, the Board considered a number of factors, including, but not limited to: (i) the expenses and advisory fees applicable to the Portfolios before the proposed Reorganization and the estimated expense ratios of the combined portfolio after the proposed Reorganization; (ii) the comparative investment performance of the Portfolios; (iii) the future growth prospects of each Portfolio; (iv) the terms and conditions of the Reorganization Agreement; (v) whether the Reorganization would result in the dilution of contractholder interests; (vi) the compatibility of the Portfolios’ investment objectives, policies, risks and restrictions; (vii) that the proposed Reorganization was expected to be a tax-free reorganization for federal income tax purposes; (viii) the compatibility of the Portfolios’ service features available to contractholders, including exchange privileges; and (ix) the estimated costs of the Reorganization, which would be borne by the Adviser. The Board concluded that these factors supported a determination to approve the Reorganization Agreement.
The Board believes that the Reorganization would be in the best interests of the Target Portfolio’s contractholders because: (i) contractholders will become contractholders of a larger combined portfolio with greater potential to increase asset size and achieve economies of scale; (ii) the Acquiring Portfolio invests in a more diversified portfolio of equity and fixed income securities; (iii) the Acquiring Portfolio has better performance than the Target Portfolio for the one-, three- and five-year periods ended December 29, 2017, though there is no guarantee of future performance; (iv) Thrivent Financial for Lutherans (“Thrivent Financial” or the “Adviser”), the Portfolios’ investment adviser, believes that it can most effectively manage the assets currently in the Target Portfolio by combining such assets with the Acquiring Portfolio; and (v) the Acquiring Portfolio has a lower gross expense ratio than the Target Portfolio and shareholders of the Target Portfolio will experience a lower net expense ratio in the Acquiring Portfolio following the Reorganization.
The Board has determined that the Reorganization is in the best interests of the Target Portfolio and that the interests of the Target Portfolio’s contractholders will not be diluted as a result of the Reorganization. In addition, the Board has determined that the Reorganization is in the best interests of the Acquiring Portfolio and that the interests of the Acquiring Portfolio contractholders will not be diluted as a result of the Reorganization.
Material Federal Income Tax Consequences of the Reorganization
The following is a general summary of the material anticipated U.S. federal income tax consequences of the Reorganization. This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations, court decisions, published positions of the Internal Revenue Service (“IRS”) and other applicable authorities, all as in effect on the date hereof and all of which are subject to change or differing interpretations (possibly with retroactive effect). This discussion is limited to U.S. persons who hold shares of the Target Portfolio as capital assets for U.S. federal income tax purposes on the date of the exchange. For federal income tax purposes, the contractholders are not the shareholders of the Target Portfolio. Rather, Thrivent Financial and Thrivent Life and their separate accounts are the shareholders.
This summary does not address all of the U.S. federal income tax consequences that may be relevant to a particular contractholder or to contractholders who may be subject to special treatment under U.S. federal income tax laws. No assurance can be given that the IRS would not assert or that a court would not sustain a position contrary to any of the tax aspects described below. Contractholders should consult their own tax advisers as to the
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U.S. federal income tax consequences of the Reorganization to them, as well as the effects of state, local and non-U.S. tax laws.
The Reorganization is expected to be a tax-free reorganization for U.S. federal income tax purposes. It is a condition to closing the Reorganization that the Target Portfolio and the Acquiring Portfolio receive an opinion from Reed Smith LLP, special counsel to each Portfolio, dated as of the Closing Date, regarding the characterization of the Reorganization as a “reorganization” within the meaning of Section 368(a)(1) of the Code. As such a reorganization, the U.S. federal income tax consequences of the Reorganization can be summarized as follows: to the effect that on the basis of existing provisions of the Code, the Treasury regulations promulgated thereunder, current administrative rules and court decisions, generally for U.S. federal income tax purposes, except as noted below:
• | the Reorganization will constitute a reorganization within the meaning of Section 368(a)(1) of the Code, and the Target Portfolio and the Acquiring Portfolio will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code; |
• | under Section 361 of the Code, no gain or loss will be recognized by the Target Portfolio upon the transfer of its assets to the Acquiring Portfolio in exchange for Acquiring Portfolio shares, or upon the distribution of Acquiring Portfolio shares by the Target Portfolio to its shareholders in liquidation; |
• | under Section 1032 of the Code, no gain or loss will be recognized by the Acquiring Portfolio upon receipt of the assets transferred to the Acquiring Portfolio in exchange for Acquiring Portfolio shares; |
• | under Section 362(b) of the Code, the Acquiring Portfolio’s tax basis in each asset that the Acquiring Portfolio receives from the Target Portfolio will be the same as the Target Portfolio’s tax basis in such asset immediately prior to such exchange; |
• | under Section 1223(2) of the Code, the Acquiring Portfolio’s holding periods in each asset will include the Target Portfolio’s holding periods in such asset; |
• | under Section 354 of the Code, no gain or loss will be recognized by shareholders of the Target Portfolio on the distribution of Acquiring Portfolio shares to them in exchange for their shares of the Target Portfolio; |
• | under Section 358 of the Code, the aggregate tax basis of the Acquiring Portfolio shares that the Target Portfolio’s shareholders receive in exchange for their Target Portfolio shares will be the same as the aggregate tax basis of the Target Portfolio shares exchanged therefor; |
• | under Section 1223(1) of the Code, a Target Portfolio shareholder’s holding period for the Acquiring Portfolio shares received in the Reorganization will be determined by including the holding period for the Target Portfolio shares exchanged therefor, provided that the shareholder held the Target Portfolio shares as a capital asset on the date of the exchange; and |
• | under Section 381 of the Code, the Acquiring Portfolio will succeed to and take into account the items of the Target Portfolio described in Section 381(c) of the Code, subject to the conditions and limitations specified in Section 381, 382, 383 and 384 of the Code and the Treasury regulations thereunder. |
The opinion will be based on certain factual certifications made by the officers of the Target Portfolio and the Acquiring Portfolio and will also be based on customary assumptions such as the assumption that the Reorganization will be consummated in accordance with the Reorganization Agreement. The opinion is not a guarantee that the tax consequences of the Reorganization will be as described above. There is no assurance that the IRS or a court would agree with the opinion.
The Acquiring Portfolio intends to continue to be taxed under the rules applicable to regulated investment companies as defined in Section 851 of the Code which are the same rules currently applicable to the Target Portfolio. In connection with the Reorganization, on or before the Closing Date, the Target Portfolio will declare to its shareholders a dividend which, together with all of its previous distributions, will have the effect of distributing to shareholders all of its investment company taxable income (computed without regard to the deduction for dividends paid), net tax-exempt interest income and net capital gains through the Closing Date.
Immediately prior to the Reorganization, the Target Portfolio is not expected to have any unutilized capital loss carryforwards. The final amount of unutilized capital loss carryforwards for the Target Portfolio is subject to
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change and will not be determined until the Closing Date. As of January 31, 2018, the capital loss carryforward of the Target Portfolio and the Acquiring Portfolio was $0 and $0, respectively.
Generally, the Acquiring Portfolio will succeed to the capital loss carryforwards of the Target Portfolio, subject to the limitations described below. If the Target Portfolio has capital loss carryforwards, such capital losses would, in the absence of the Reorganization, generally be available to offset Target Portfolio capital gains, thereby reducing the amount of capital gain net income that must be distributed to the Target Portfolio shareholders.
Under Sections 382 and 383 of the Code, an “equity structure shift” arising as a result of a reorganization under Section 368(a)(1) of the Code can result in limitations on the post-reorganization Portfolio’s use of capital loss carryforwards of the participating Portfolios. An “equity structure shift” can trigger limitations on capital loss carryforwards where there is a more than 50% change in the ownership of a Portfolio.
The Adviser does not anticipate a limitation on capital loss carryforwards because the Reorganization is not expected to result in a more than 50% change in ownership of the Target Portfolio or the Acquiring Portfolio and the Portfolios are not expected to have capital loss carryforwards.
This summary of the U.S. federal income tax consequences of the Reorganization is made without regard to the particular facts and circumstances of any shareholder. Shareholders are urged to consult their own tax advisors as to the specific consequences to them of the Reorganization, including the applicability and effect of state, local, non-U.S. and other tax laws.
It is not expected that the Reorganization will be a taxable event for any contractholder.
Expenses of the Reorganization
All expenses of the Reorganization will be paid by the Adviser or an affiliate and will not be borne by shareholders of the Target Portfolio.
Reorganization expenses include, but are not limited to: all costs related to the preparation and distribution of materials distributed to the Board; all expenses incurred in connection with the preparation of the Reorganization Agreement and a registration statement on Form N-14; SEC and state securities commission filing fees and legal and audit fees in connection with each Reorganization; the costs of printing and distributing this Prospectus/Proxy Statement; legal fees incurred preparing materials for the Boards attending the Board meetings and preparing the Board minutes; auditing fees associated with the Portfolio’s financial statements; portfolio transfer taxes (if any); and any similar expenses incurred in connection with the Reorganization. Management of the Portfolios estimates the total cost of the Reorganization to be approximately $387,862. If the Reorganization is not approved by contractholders, the Adviser will still bear the costs of the proposed Reorganization.
Any brokerage charges associated with the purchase or disposition of portfolio investments by the Target Portfolio prior to the Reorganization will be borne by the Target Portfolio. Any brokerage charges associated with the purchase or disposition of portfolio investments by the Acquiring Portfolio after the Reorganization will be borne by the Acquiring Portfolio.
The Board has unanimously approved the Reorganization, subject to shareholder approval. Approval of the Reorganization requires the affirmative vote of a “Majority of the Outstanding Voting Securities” of the Target Portfolio, which is, under the 1940 Act, the lesser of (1) 67% or more of the shares of the Portfolio present at the Meeting if the holders of more than 50% of the outstanding shares of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding shares of the Portfolio.
The Board recommends voting “FOR” the proposed Reorganization.
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SHAREHOLDER AND CONTRACTHOLDER INFORMATION
At the close of business on the Record Date, the Acquiring Portfolio had outstanding shares. As of the Record Date, the directors and officers of the Acquiring Portfolio as a group owned less than 1% of the shares of the Acquiring Portfolio. As of the Record Date, no person was known by the Acquiring Portfolio to own beneficially or of record as much as 5% of the Acquiring Portfolio shares except as follows:
Name | Shares Outstanding | Approximate Percentage of Ownership | ||
% | ||||
% | ||||
% |
At the close of business on the Record Date, the Target Portfolio had outstanding shares. As of the Record Date, the directors and officers of the Target Portfolio as a group owned less than 1% of the shares of the Target Portfolio. As of the Record Date, no person was known by the Target Portfolio to own beneficially or of record as much as 5% of the shares of the Target Portfolio except as follows:
Name | Shares Outstanding | Approximate Percentage of Ownership | ||
% | ||||
% |
Annual Meeting of Contractholders
There will be no annual or further special meetings of contractholders of the Fund unless required by applicable law or called by the Board in its discretion. Contractholders wishing to submit proposals for inclusion in a proxy statement for a subsequent contractholder meeting should send their written proposals to the Secretary of the Fund, 625 Fourth Avenue South, Minneapolis, Minnesota 55415. Contractholder proposals should be received in a reasonable time before the solicitation is made.
VOTING INFORMATION AND REQUIREMENTS
Approval of the Reorganization requires the affirmative vote of a “Majority of the Outstanding Voting Securities” of the Target Portfolio, which is, under the 1940 Act, the lesser of (1) 67% or more of the shares of the Target Portfolio present at the Meeting if the holders of more than 50% of the outstanding shares of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding shares of the Target Portfolio.
The Board has fixed the close of business on April 27, 2018, as the Record Date for the determination of contractholders entitled to notice of, and to vote at, the Meeting. Target Portfolio shareholders on the Record Date are entitled to one vote for each share held, with no shares having cumulative voting rights.
A majority of the shares of the Target Portfolio entitled to vote at the Meeting represented in person or by proxy constitutes a quorum. Thrivent Financial and its affiliates together are the record owners of a majority of the shares of the Target Portfolio. Thrivent Financial’s representation at the Meeting will therefore assure the presence of a quorum.
Target Portfolio contractholders may vote in any one of four ways: (i) via the Internet, (ii) by telephone, (iii) by mail, by returning the proxy card, or (iv) in person at the Meeting. Instructions for Internet and telephone voting are included with the enclosed proxy materials. Contractholders who deliver voting instructions by methods
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(i), (ii) or (iii) may revoke them at any time prior to the Meeting by delivering a written notice of revocation, by executing another proxy card bearing a later date or by attending the Meeting and giving voting instructions in person. Merely attending the Meeting, however, will not revoke any previously submitted proxy. The required control number for Internet and telephone voting is printed on the enclosed proxy card. The control number is used to match voting proxy cards with contractholders’ respective accounts and to ensure that, if multiple proxy cards are executed, shares are voted in accordance with the proxy card bearing the latest date. The Target Portfolio employs procedures for Internet and telephone voting, such as requiring the control number from the proxy card in order to vote by either of these methods, which it considers to be reasonable to confirm that the instructions received are genuine. If reasonable procedures are employed, the Target Portfolio will not be liable for following Internet or telephone votes which it believes to be genuine.
Abstentions and broker non-votes (i.e., where a nominee such as a broker holding shares for beneficial owners votes on certain matters pursuant to discretionary authority or instructions from beneficial owners, but with respect to one or more proposals does not receive instructions from beneficial owners or does not exercise discretionary authority) will be deemed present for quorum purposes. Abstentions and broker non-votes have the same effect as votes “AGAINST” the Reorganization.
All properly executed proxies received prior to the Meeting will be voted at the Meeting in accordance with the instructions marked thereon or otherwise as provided therein. Proxies received prior to the Meeting on which no vote is indicated will be voted “FOR” the approval of the proposed Reorganization.
Solicitation of proxies is being made primarily by the mailing of this Notice and Prospectus/Proxy Statement with its enclosures on or about May 14, 2018. Contractholders of the Target Portfolio whose shares are held by nominees, such as brokers, can vote their proxies by contacting their respective nominee. In addition to the solicitation of proxies by mail, employees of the Adviser and its affiliates, without additional compensation, may solicit proxies in person or by telephone, telegraph, facsimile or oral communication. The Target Portfolio may retain Computershare Fund Services (“Computershare”), a professional proxy solicitation firm, to assist with any necessary solicitation of proxies. We do not anticipate any expense for additional telephone solicitation by Computershare. The proxy solicitation expenses, if any, are an expense of the Reorganization and will be allocated as described above.
Other Matters to Come Before the Meeting
The Board knows of no business other than that described in the Notice that will be presented for consideration at the Meeting. If any other matters are properly presented, it is the intention of the persons named on the enclosed proxy to vote proxies in accordance with their best judgment.
In the event that a quorum is present at the Meeting but sufficient votes to approve the proposed Reorganization are not received, proxies (including abstentions and broker non-votes) will be voted in favor of one or more adjournments of the Meeting to permit further solicitation of proxies on the proposed Reorganization, provided that the Board determines that such an adjournment and additional solicitation is reasonable and in the interest of contractholders based on a consideration of all relevant factors, including the nature of the particular proposals, the percentage of votes then cast, the percentage of negative votes cast, the nature of the proposed solicitation activities and the nature of the reasons for such further solicitation. Any such adjournment will require the affirmative vote of the holders of a majority of the outstanding shares voted at the session of the Meeting to be adjourned.
If you cannot be present in person, you are requested to fill in, sign and return the enclosed proxy card, for which, no postage is required if mailed in the United States, or record your voting instructions by telephone or via the Internet promptly.
Michael W. Kremenak |
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Secretary |
Thrivent Series Fund, Inc. |
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STATEMENT OF ADDITIONAL INFORMATION
Relating to the Acquisition of the Assets of
Thrivent Growth and Income Plus Portfolio
By and In Exchange for Shares of
Thrivent Moderately Aggressive Allocation Portfolio
May 7, 2018
This Statement of Additional Information is available to the contractholders of Thrivent Growth and Income Plus Portfolio (the “Target Portfolio”), a series of Thrivent Series Fund, Inc. (the “Registrant”), in connection with the proposed reorganization (“the Reorganization”) whereby all of the assets of the Target Portfolio would be transferred to Thrivent Moderately Aggressive Allocation Portfolio (the “Acquiring Portfolio”), a series of the Registrant, in exchange for Shares of the Acquiring Portfolio. Unless otherwise defined herein, capitalized terms have the meanings given to them in the Prospectus/Proxy Statement dated May 7, 2018 related to the Reorganization (the “Prospectus/Proxy Statement”). The Acquiring Portfolio and the Target Portfolio are sometimes referred to herein individually as a “Portfolio” or collectively as the “Portfolios”.
This Statement of Additional Information is not a prospectus and should be read in conjunction with the Prospectus/Proxy Statement. A copy of the Prospectus/Proxy Statement may be obtained, without charge, from, Thrivent Series Fund, Inc. by calling toll-free 800-847-4836 or writing Thrivent Series Fund, Inc., 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
The Acquiring Portfolio will provide, without charge, upon the request of any person to whom this Statement of Additional Information is delivered, a copy of any and all documents that have been incorporated by reference in the registration statement of which this Statement of Additional Information is a part.
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Appendix B — Statement of Additional Information of the Registrant | B-1 |
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The contractholders of the Target Portfolio are being asked to approve an Agreement and Plan of Reorganization (the “Reorganization Agreement”) pursuant to which the Target Portfolio would (i) transfer all of its assets to the Acquiring Portfolio in exchange for Shares of the Acquiring Portfolio, (ii) distribute such Acquiring Portfolio shares to contractholders of the Target Portfolio, and (iii) dissolve. A form of the Reorganization Agreement is attached hereto as Appendix A.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS
Incorporated herein by reference in its entirety is the Statement of Additional Information of the Registrant, dated April 30, 2018 and as supplemented through the date hereof, which was filed with the Securities and Exchange Commission (the “SEC”) on April 30, 2018 and is attached hereto as Appendix B.
Incorporated herein by reference in their respective entireties are:
(i) | the audited annual financial statements of the Target Portfolio, as of December 31, 2017, along with the opinion of independent registered public accounting firm, included as part of the Target Portfolio’s Form N-CSR as filed with the SEC on February 28, 2018; and |
(ii) | the audited annual financial statements of the Acquiring Portfolio, as of December 31, 2017, along with the opinion of independent registered public accounting firm, included as part of the Acquiring Portfolio’s Form N-CSR as filed with the SEC on February 28, 2018. |
Annual reports referenced as part of a Portfolio’s filing on Form N-CSR may be obtained by following the instructions on the cover of this Statement of Additional Information and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC or on the EDGAR database on the SEC’s Internet site (https://www.sec.gov). Information on the operation of the SEC’s Public Reference Room may be obtained by calling the SEC at 202-551-8090. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC’s e-mail address (publicinfo@sec.gov) or by writing the Public Reference Section of the SEC, Washington, DC 20549-0102.
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FORM OF AGREEMENT AND PLAN OF REORGANIZATION
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the “Agreement”) is made as of , 2018 by Thrivent Series Fund, Inc. (the “Fund”), a Minnesota corporation, on behalf of its series, Thrivent Moderately Aggressive Allocation Portfolio (the “Acquiring Portfolio”) and Thrivent Growth and Income Plus Portfolio (the “Target Portfolio”).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Fund, on behalf of each of the Acquiring Portfolio and the Target Portfolio, has determined that entering into this Agreement whereby the Target Portfolio would transfer all of its assets to the Acquiring Portfolio in exchange for shares of the Acquiring Portfolio, is in the best interests of the shareholders of their respective fund; and
WHEREAS, the parties intend that this transaction qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”);
NOW, THEREFORE, in consideration of the mutual promises contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:
1. | Plan of Transaction. |
A. Transfer of Assets. Upon satisfaction of the conditions precedent set forth in Sections 7 and 8 hereof, the Target Portfolio will convey, transfer and deliver to the Acquiring Portfolio at the closing, provided for in Section 2 hereof, all of the existing assets of the Target Portfolio (including accrued interest to the Closing Date) (as defined below), free and clear of all liens, encumbrances and claims whatsoever (the assets so transferred collectively being referred to as the “Assets”).
B. Consideration. In consideration thereof, the Acquiring Portfolio agrees that the Acquiring Portfolio at the closing will deliver to the Target Portfolio, full and fractional shares of beneficial interest, par value $0.01 per share, of the Acquiring Portfolio having net asset values per share calculated as provided in Section 3(A) hereof, in an amount equal to the aggregate dollar value of the Assets determined pursuant to Section 3(A) hereof net of any liabilities of the Target Portfolio described in Section 3(E) hereof (the “Liabilities”) (collectively, the “Acquiring Portfolio Shares”). The calculation of full and fractional Acquiring Portfolio Shares to be exchanged shall be carried out to no less than two (2) decimal places. All Acquiring Portfolio Shares delivered to the Target Portfolio in exchange for such Assets shall be delivered at net asset value without sales load, commission or other transactional fees being imposed.
2. | Closing of the Transaction. |
A. Closing Date. The closing shall occur within thirty (30) business days after the later of the receipt of all necessary regulatory approvals and the final adjournment of the meeting of shareholders of the Target Portfolio at which this Agreement will be considered and approved, or such later date as soon as practicable thereafter, as the parties may mutually agree (the “Closing Date”). On the Closing Date, the Acquiring Portfolio shall deliver to the Target Portfolio the Acquiring Portfolio Shares in the amount determined pursuant to Section 1(B) hereof and the Target Portfolio thereafter shall, in order to effect the distribution of such shares to the Target Portfolio shareholders, instruct the Acquiring Portfolio to register the pro rata interest in the Acquiring Portfolio Shares (in full and fractional shares) of each of the holders of record of shares of the Target Portfolio in accordance with their holdings of shares of the Target Portfolio and shall provide as part of such instruction a complete and updated list of such holders (including addresses and taxpayer identification numbers), and the Acquiring Portfolio agrees promptly to comply with said instruction. The Acquiring Portfolio shall have no obligation to inquire as to the validity, propriety or correctness of such instruction, but shall assume that such instruction is valid, proper and correct.
3. | Procedure for Reorganization. |
A. Valuation. The value of the Assets of the Target Portfolio to be transferred by the Acquiring Portfolio shall be computed as of the Closing Date, in the manner set forth in the most recent Prospectus and Statement of Additional Information of the Acquiring Portfolio (collectively, the “Acquiring Portfolio Prospectus”), copies of which have been delivered to the Target Portfolio.
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B. Delivery of Portfolio Assets. The Assets shall be delivered to State Street Bank and Trust Company as Custodian for the Acquiring Portfolio or such other custodian as designated by the Acquiring Portfolio (collectively the “Custodian”) for the benefit of the Acquiring Portfolio, duly endorsed in proper form for transfer in such condition as to constitute a good delivery thereof, free and clear of all liens, encumbrances and claims whatsoever, in accordance with the custom of brokers, and shall be accompanied by all necessary state stock transfer stamps, if any, the cost of which shall be borne by the Target Portfolio and the Acquiring Portfolio, in proportion to their respective declines in total operating expenses, if any.
C. Failure to Deliver Securities. If the Target Portfolio is unable to make delivery pursuant to Section 3(B) hereof to the Custodian of any of the securities of the Target Portfolio for the reason that any such securities purchased by the Target Portfolio have not yet been delivered it by the Target Portfolio’s broker or brokers, then, in lieu of such delivery, the Target Portfolio shall deliver to the Custodian, with respect to said securities, executed copies of an agreement of assignment and due bills executed on behalf of such broker or brokers, together with such other documents as may be required by the Acquiring Portfolio or Custodian, including brokers’ confirmation slips.
D. Shareholder Accounts. The Acquiring Portfolio, in order to assist the Target Portfolio in the distribution of the Acquiring Portfolio Shares to the Target Portfolio shareholders after delivery of the Acquiring Portfolio Shares to the Target Portfolio, will establish pursuant to the request of the Target Portfolio an open account with the Acquiring Portfolio for each shareholder of the Target Portfolio and, upon request by the Target Portfolio, shall transfer to such accounts, the exact number of Acquiring Portfolio Shares then held by the Target Portfolio specified in the instruction provided pursuant to Section 2 hereof.
E. Liabilities. The Liabilities shall include all of the Target Portfolio’s liabilities, debts, obligations, and duties of whatever kind or nature, whether absolute, accrued, contingent, or otherwise, whether or not arising in the ordinary course of business, whether or not determinable at the Closing Date, and whether or not specifically referred to in this Agreement. The Target Portfolio will discharge all of its Liabilities prior to or on the Closing Date.
F. Expenses. In the event that the transactions contemplated herein are consummated, Thrivent Financial for Lutherans (or an affiliate thereof) shall pay the expenses of the Reorganization, including the costs of the special meeting of shareholders of the Target Fund. In addition, as part of the Reorganization, the Target Fund will write off its remaining unamortized organizational expenses, if any, which shall be reimbursed by Thrivent Financial for Lutherans (or an affiliate thereof). The Acquiring Fund shall bear expenses associated with the qualification of shares of the Acquiring Fund for sale in the various states. In addition, to the extent that any transition of Fund securities is required in connection with the Reorganization, the respective Fund may incur transaction expenses associated with the sale and purchase of Fund securities. In the event that the transactions contemplated herein are not consummated for any reason, then all reasonable outside expenses incurred to the date of termination of this Agreement shall be borne by Thrivent Financial for Lutherans (or an affiliate thereof).
G. Dissolution. As soon as practicable after the Closing Date but in no event later than one year after the Closing Date, the Target Portfolio shall voluntarily dissolve and completely liquidate by taking, in accordance with the laws of the State of Minnesota and federal securities laws, all steps as shall be necessary and proper to effect a complete liquidation and dissolution of the Target Portfolio. Immediately after the Closing Date, the share transfer books relating to the Target Portfolio shall be closed and no transfer of shares shall thereafter be made on such books.
4. | Representations and Warranties of the Target Portfolio. |
The Target Portfolio hereby represents and warrants to the Acquiring Portfolio, which representations and warranties are true and correct on the date hereof, and agrees with the Acquiring Portfolio that:
A. Organization. The Fund is a corporation, with transferable shares, duly organized, validly existing and in good standing in conformity with the laws of its jurisdiction of organization. The Target Portfolio is a separate series of the Fund duly organized in accordance with the applicable provisions of the Articles of Incorporation of the Fund, as amended through the date hereof (the “Articles of Incorporation”). The Fund and the Target Portfolio are qualified to do business in all jurisdictions in which it is required to be so qualified, except jurisdictions in which the failure to so qualify would not have a material adverse effect on the Target Portfolio. The Fund and the Target Portfolio have all material federal, state and local authorizations necessary to own all of its properties and assets and
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to carry on its business as now being conducted, except authorizations which the failure to so obtain would not have a material adverse effect on the Target Portfolio.
B. Registration. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and such registration has not been revoked or rescinded. The Target Portfolio is in compliance in all material respects with the 1940 Act, and the rules and regulations thereunder with respect to its activities. All of the outstanding common shares of beneficial interest of the Target Portfolio have been duly authorized and are validly issued, fully paid and non-assessable and not subject to pre-emptive or dissenters’ rights.
C. Audited Financial Statements. The statement of assets and liabilities and the portfolio of investments and the related statements of operations and changes in net assets of the Target Portfolio audited as of and for the year ended December 31, 2017, true and complete copies of which have been heretofore furnished to the Acquiring Portfolio, fairly represent the financial condition and the results of operations of the Target Portfolio as of and for their respective dates and periods in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved.
D. Unaudited Financial Statements. The Target Portfolio shall furnish to the Acquiring Portfolio within ten (10) business days after the Closing Date, an unaudited statement of assets and liabilities and the portfolio of investments and the related statements of operations and changes in net assets as of and for the interim period ending on the Closing Date; such financial statements will represent fairly the financial position and portfolio of investments and the results of the Target Portfolio’s operations as of, and for the periods ending on, the dates of such statements in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved and the results of its operations and changes in financial position for the period then ended; and such financial statements shall be certified by the Treasurer of the Target Portfolio as complying with the requirements hereof.
E. Contingent Liabilities. There are, and as of the Closing Date will be, no contingent liabilities of the Target Portfolio not discharged pursuant to Section 3(E), and there are no legal, administrative, or other proceedings pending or, to its knowledge, threatened against the Target Portfolio which would, if adversely determined, materially affect the Target Portfolio’s financial condition. All liabilities were incurred by the Target Portfolio in the ordinary course of its business.
F. Material Agreements. The Target Portfolio is in compliance with all material agreements, rules, laws, statutes, regulations and administrative orders affecting its operations or its assets; and except as referred to in the most recent Prospectus and Statement of Additional Information of the Target Portfolio (collectively, the “Target Portfolio Prospectus”), there are no material agreements outstanding relating to the Target Portfolio to which the Target Portfolio is a party.
G. Statement of Earnings. As promptly as practicable, but in any case no later than 30 calendar days after the Closing Date, the Target Portfolio shall furnish the Acquiring Portfolio with a statement of the earnings and profits of the Target Portfolio within the meaning of the Code as of the Closing Date.
H. Tax Returns. At the date hereof and on the Closing Date, all federal and other material tax returns and reports of the Target Portfolio required by law to have been filed by such dates shall have been filed, and all federal and other taxes shown thereon shall have been paid so far as due, or provision shall have been made for the payment thereof, and to the best of the Target Portfolio’s knowledge no such return is currently under audit and no assessment has been asserted with respect to any such return.
I. Necessary Authority. The Fund on behalf of the Target Portfolio has the necessary power to enter into this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by the Board on behalf of the Target Portfolio, and except for obtaining approval of the Target Portfolio shareholders, no other corporate acts or proceedings by the Fund on behalf of the Target Portfolio are necessary to authorize this Agreement and the transactions contemplated herein. This Agreement has been duly executed and delivered by the Fund on behalf of the Target Portfolio and constitutes a valid and binding obligation of the Target Portfolio enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
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fraudulent transfer, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by general principles of equity (regardless of whether enforcement is sought in a proceeding at equity or law).
J. No Violation, Consents and Approvals. The execution, delivery and performance of this Agreement by the Fund on behalf of the Target Portfolio does not and will not (i) result in a material violation of any provision of the Fund’s or the Target Portfolio’s organizational documents, (ii) violate any statute, law, judgment, writ, decree, order, regulation or rule of any court or governmental authority applicable to the Target Portfolio, (iii) result in a material violation or breach of, or constitute a default under any material contract, indenture, mortgage, loan agreement, note, lease or other instrument or obligation to which the Target Portfolio is subject, or (iv) result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Target Portfolio. Except as have been obtained, (i) no consent, approval, authorization, order or filing with or notice to any court or governmental authority or agency is required for the consummation by the Target Portfolio of the transactions contemplated by this Agreement and (ii) no consent of or notice to any third party or entity is required for the consummation by the Target Portfolio of the transactions contemplated by this Agreement.
K. Absence of Changes. From the date of this Agreement through the Closing Date, there shall not have been:
i. | any change in the business, results of operations, assets, or financial condition or the manner of conducting the business of the Target Portfolio, other than changes in the ordinary course of its business, or any pending or threatened litigation, which has had or may have a material adverse effect on such business, results of operations, assets, financial condition or manner of conducting business; |
ii. | issued by the Target Portfolio any option to purchase or other right to acquire shares of the Target Portfolio to any person other than subscriptions to purchase shares at net asset value in accordance with terms in the Target Portfolio Prospectus; |
iii. | any entering into, amendment or termination of any contract or agreement by the Target Portfolio, except as otherwise contemplated by this Agreement; |
iv. | any indebtedness incurred, other than in the ordinary course of business, by the Target Portfolio for borrowed money or any commitment to borrow money entered into by the Target Portfolio; |
v. | any amendment of the Fund’s or the Target Portfolio’s organizational documents; or |
vi. | any grant or imposition of any lien, claim, charge or encumbrance (other than encumbrances arising in the ordinary course of business with respect to covered options) upon any asset of the Target Portfolio other than a lien for taxes not yet due and payable. |
L. Title. On the Closing Date, the Target Portfolio will have good and marketable title to the Assets, free and clear of all liens, mortgages, pledges, encumbrances, charges, claims and equities whatsoever, other than a lien for taxes not yet due and payable, and full right, power and authority to sell, assign, transfer and deliver such Assets; upon delivery of such Assets, the Acquiring Portfolio will receive good and marketable title to such Assets, free and clear of all liens, mortgages, pledges, encumbrances, charges, claims and equities whatsoever, other than a lien for taxes not yet due and payable.
M. Prospectus/Proxy Statement. The Registration Statement on Form N-14 of the Fund (the “Registration Statement”) and the Prospectus/Proxy Statement contained therein (the “Prospectus/Proxy Statement”), as of the effective date of the Registration Statement, and at all times subsequent thereto up to and including the Closing Date, as amended or as supplemented if it shall have been amended or supplemented, conform and will conform as they relate to the Target Portfolio, in all material respects, to the applicable requirements of the applicable federal and state securities laws and the rules and regulations of the Securities and Exchange Commission (the “SEC”) thereunder, and do not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representations or warranties in this Section 4(M) apply to statements or omissions made in reliance upon and in conformity with written information concerning the Acquiring Portfolio furnished to the Target Portfolio by the Acquiring Portfolio.
N. Tax Qualification. The Target Portfolio has qualified as a regulated investment company within the meaning of Section 851 of the Code for each of its taxable years; and has satisfied the distribution requirements imposed by Section 852 of the Code for each of its taxable years.
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5. | Representations and Warranties of the Acquiring Portfolio. |
The Acquiring Portfolio hereby represents and warrants to the Target Portfolio, which representations and warranties are true and correct on the date hereof, and agrees with the Target Portfolio that:
A. Organization. The Fund is duly formed and in good standing under the laws of the state of its organization and is duly authorized to transact business in the state of its organization. The Acquiring Portfolio is a separate series of the Fund duly organized in accordance with the applicable provisions of the Articles of Incorporation. The Fund and the Acquiring are qualified to do business in all jurisdictions in which it is required to be so qualified, except jurisdictions in which the failure to so qualify would not have a material adverse effect on the Acquiring Portfolio. The Fund and the Acquiring Portfolio have all material federal, state and local authorizations necessary to own all of its properties and assets and to carry on its business and the business thereof as now being conducted, except authorizations which the failure to so obtain would not have a material adverse effect on the Acquiring Portfolio.
B. Registration. The Fund is registered under the 1940 Act as an open-end management investment company and such registration has not been revoked or rescinded. The Acquiring Portfolio is in compliance in all material respects with the 1940 Act, and the rules and regulations thereunder with respect to its activities. All of the outstanding shares of common stock of the Acquiring Portfolio have been duly authorized and are validly issued, fully paid and non-assessable and not subject to pre-emptive or dissenters’ rights.
C. Audited Financial Statements. The statement of assets and liabilities and the portfolio of investments and the related statements of operations and changes in net assets of the Acquiring Portfolio audited as of and for the year ended December 31, 2017, true and complete copies of which have been heretofore furnished to the Target Portfolio, fairly represent the financial condition and the results of operations of the Acquiring Portfolio as of and for their respective dates and periods in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved.
D. Unaudited Financial Statements. The Acquiring Portfolio shall furnish to the Target Portfolio within ten (10) business days after the Closing Date, an unaudited statement of assets and liabilities and the portfolio of investments and the related statements of operations and changes in net assets as of and for the interim period ending on the Closing Date; such financial statements will represent fairly the financial position and portfolio of investments and the results of its operations as of, and for the period ending on, the dates of such statements in conformity with generally accepted accounting principles applied on a consistent basis during the period involved and the results of its operations and changes in financial position for the periods then ended; and such financial statements shall be certified by the Treasurer of the Acquiring Portfolio as complying with the requirements hereof.
E. Contingent Liabilities. There are, and as of the Closing Date will be, no contingent liabilities of the Acquiring Portfolio not disclosed in the financial statements delivered pursuant to Sections 5(C) and 5(D) hereof which would materially affect the Acquiring Portfolio’s financial condition, and there are no legal, administrative, or other proceedings pending or, to its knowledge, threatened against the Acquiring Portfolio which would, if adversely determined, materially affect the Acquiring Portfolio’s financial condition. All liabilities were incurred by the Acquiring Portfolio in the ordinary course of its business.
F. Material Agreements. The Acquiring Portfolio is in compliance with all material agreements, rules, laws, statutes, regulations and administrative orders affecting its operations or its assets; and, except as referred to in the Acquiring Portfolio Prospectus there are no material agreements outstanding relating to the Acquiring Portfolio to which the Acquiring Portfolio is a party.
G. Tax Returns. At the date hereof and on the Closing Date, all federal and other material tax returns and reports of the Acquiring Portfolio required by law to have been filed by such dates shall have been filed, and all federal and other taxes shown thereon shall have been paid so far as due, or provision shall have been made for the payment thereof, and to the best of the Acquiring Portfolio’s knowledge no such return is currently under audit and no assessment has been asserted with respect to any such return.
H. Necessary Authority. The Fund on behalf of the Acquiring Portfolio has the necessary power to enter into this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by the Board on behalf of the Acquiring Portfolio, no other corporate acts or proceedings by the Acquiring Portfolio are
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necessary to authorize this Agreement and the transactions contemplated herein. This Agreement has been duly executed and delivered by the Fund on behalf of the Acquiring Portfolio and constitutes a valid and binding obligation of the Acquiring Portfolio enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by general principals of equity (regardless of whether enforcement is sought in a proceeding at equity or law).
I. No Violation; Consents and Approvals. The execution, delivery and performance of this Agreement by Fund on behalf of the Acquiring Portfolio does not and will not (i) result in a material violation of any provision of Fund’s or the Acquiring Portfolio’s organizational documents, (ii) violate any statute, law, judgment, writ, decree, order, regulation or rule of any court or governmental authority applicable to the Acquiring Portfolio, (iii) result in a material violation or breach of, or constitute a default under any material contract, indenture, mortgage, loan agreement, note, lease or other instrument or obligation to which the Acquiring Portfolio is subject, or (iv) result in the creation or imposition or any lien, charge or encumbrance upon any property or assets of the Acquiring Portfolio. Except as have been obtained, (i) no consent, approval, authorization, order or filing with or notice to any court or governmental authority or agency is required for the consummation by the Acquiring Portfolio of the transactions contemplated by this Agreement and (ii) no consent of or notice to any third party or entity is required for the consummation by the Acquiring Portfolio of the transactions contemplated by this Agreement.
J. Absence of Proceedings. There are no legal, administrative or other proceedings pending or, to its knowledge, threatened against the Acquiring Portfolio which would materially affect its financial condition.
K. Acquiring Portfolio Shares: Registration. The Acquiring Portfolio Shares to be issued pursuant to Section 1 hereof will be duly registered under the Securities Act of 1933, as amended (the “Securities Act”), and all applicable state securities laws.
L. Acquiring Portfolio Shares: Authorization. The Acquiring Portfolio Shares to be issued pursuant to Section 1 hereof have been duly authorized and, when issued in accordance with this Agreement, will be validly issued, fully paid and non-assessable, will not be subject to pre-emptive or dissenters’ rights and will conform in all material respects to the description thereof contained in the Acquiring Portfolio’s Prospectus furnished to the Target Portfolio.
M. Absence of Changes. From the date hereof through the Closing Date, there shall not have been any change in the business, results of operations, assets or financial condition or the manner of conducting the business of the Acquiring Portfolio, other than changes in the ordinary course of its business, which has had a material adverse effect on such business, results of operations, assets, financial condition or manner of conducting business.
N. Registration Statement. The Registration Statement and the Prospectus/Proxy Statement as of the effective date of the Registration Statement, and at all times subsequent thereto up to and including the Closing Date, as amended or as supplemented if they shall have been amended or supplemented, conforms and will conform, as they relate to the Acquiring Portfolio, in all material respects, to the applicable requirements of the applicable federal securities laws and the rules and regulations of the SEC thereunder, and do not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representations or warranties in this Section 5 apply to statements or omissions made in reliance upon and in conformity with written information concerning the Target Portfolio furnished to the Acquiring Portfolio by the Target Portfolio.
O. Tax Qualification. The Acquiring Portfolio has qualified as a regulated investment company within the meaning of Section 851 of the Code for each of its taxable years; and has satisfied the distribution requirements imposed by Section 852 of the Code for each of its taxable years.
6. | Covenants. |
During the period from the date of this Agreement and continuing until the Closing Date, the Target Portfolio and Acquiring Portfolio agree as follows (except as expressly contemplated or permitted by this Agreement):
A. Other Actions. The Target Portfolio and Acquiring Portfolio shall operate only in the ordinary course of business consistent with prior practice. No party shall take any action that would, or reasonably would be expected
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to, result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect.
B. Government Filings; Consents. The Fund shall file all reports required to be filed by the Target Portfolio and Acquiring Portfolio with the SEC between the date of this Agreement and the Closing Date and the Target Portfolio and Acquiring Portfolio shall deliver to the other party copies of all such reports promptly after the same are filed. Except where prohibited by applicable statutes and regulations, each party shall promptly provide the other (or its counsel) with copies of all other filings made by such party with any state, local or federal government agency or entity in connection with this Agreement or the transactions contemplated hereby. Each of the Target Portfolio and the Acquiring Portfolio shall use all reasonable efforts to obtain all consents, approvals and authorizations required in connection with the consummation of the transactions contemplated by this Agreement and to make all necessary filings with the appropriate federal and state officials.
C. Preparation of the Registration Statement and the Prospectus/Proxy Statement. In connection with the Registration Statement and the Prospectus/Proxy Statement, each party hereto will cooperate with the other and furnish to the other the information relating to the Target Portfolio or Acquiring Portfolio, as the case may be, required by the Securities Act or the Securities Exchange Act of 1934 and the rules and regulations thereunder, to be set forth in the Registration Statement or the Prospectus/Proxy Statement. The Target Portfolio shall promptly prepare the Prospectus/Proxy Statement and the Acquiring Portfolio shall promptly prepare and file with the SEC the Registration Statement, in which the Prospectus/Proxy Statement will be included as a prospectus. In connection with the Registration Statement, insofar as it relates to the Target Portfolio and its affiliated persons, the Acquiring Portfolio shall only include such information as is approved by the Target Portfolio for use in the Registration Statement. The Acquiring Portfolio shall not amend or supplement any such information regarding the Target Portfolio and such affiliates without the prior written consent of the Target Portfolio which consent shall not be unreasonably withheld or delayed. The Acquiring Portfolio shall promptly notify and provide the Target Portfolio with copies of all amendments or supplements filed with respect to the Registration Statement. The Acquiring Portfolio shall use all reasonable efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing. The Acquiring Portfolio shall also take any action (other than qualifying to do business in any jurisdiction in which it is now not so qualified) required to be taken under any applicable state securities laws in connection with the issuance of the Acquiring Portfolio Shares in the transactions contemplated by this Agreement, and the Target Portfolio shall furnish all information concerning the Target Portfolio and the holders of the Target Portfolio’s shares as may be reasonably requested in connection with any such action.
D. Access to Information. During the period prior to the Closing Date, the Target Portfolio shall make available to the Acquiring Portfolio a copy of each report, schedule, registration statement and other document (the “Documents”) filed or received by it during such period pursuant to the requirements of federal or state securities laws (other than Documents which such party is not permitted to disclose under applicable law). During the period prior to the Closing Date, the Acquiring Portfolio shall make available to the Target Portfolio each Document pertaining to the transactions contemplated hereby filed or received by it during such period pursuant to federal or state securities laws (other than Documents which such party is not permitted to disclose under applicable law).
E. Shareholder Meetings. The Target Portfolio shall call a meeting of the Target Portfolio shareholders to be held as promptly as practicable for the purpose of voting upon the approval of this Agreement and the transactions contemplated herein, and shall furnish a copy of the Prospectus/Proxy Statement and proxy card to each shareholder of the Target Portfolio as of the record date for such meeting of shareholders. The Board shall recommend to the Target Portfolio shareholders approval of this Agreement and the transactions contemplated herein, subject to fiduciary obligations under applicable law.
F. Portfolios. The Target Portfolio and Acquiring Portfolio covenant and agree to dispose of certain assets prior to the Closing Date, but only if and to the extent necessary, so that at Closing, when the Assets are added to the Acquiring Portfolio’s portfolio, the resulting portfolio will meet the Acquiring Portfolio’s investment objective, policies and restrictions, as set forth in the Acquiring Portfolio’s Prospectus, a copy of which has been delivered to the Target Portfolio. Notwithstanding the foregoing, nothing herein will require the Target Portfolio to dispose of any portion of the Assets if, in the reasonable judgment of the Target Portfolio’s Directors or investment adviser, such disposition would create more than an insignificant risk that the Reorganization would not be treated as a “reorganization” described in Section 368(a) of the Code.
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G. Distribution of Shares. The Target Portfolio covenants that at closing it shall cause to be distributed the Acquiring Portfolio Shares in the proper pro rata amount for the benefit of Target Portfolio’s shareholders and that the Target Portfolio shall not continue to hold amounts of said shares so as to cause a violation of Section 12(d)(1) of the 1940 Act. The Target Portfolio covenants to use all reasonable efforts to cooperate with the Acquiring Portfolio and the Acquiring Portfolio’s transfer agent in the distribution of said shares. The Target Portfolio covenants further that, pursuant to Section 3(G) hereof, it shall liquidate and dissolve as promptly as practicable after the Closing Date.
H. Brokers or Finders. Except as disclosed in writing to the other party prior to the date hereof, each of the Target Portfolio and the Acquiring Portfolio represents that no agent, broker, investment banker, financial advisor or other firm or person is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement, and each party shall hold the other harmless from and against any and all claims, liabilities or obligations with respect to any such fees, commissions or expenses asserted by any person to be due or payable in connection with any of the transactions contemplated by this Agreement on the basis of any act or statement alleged to have been made by such first party or its affiliate.
I. Additional Agreements. In case at any time after the Closing Date any further action is necessary or desirable in order to carry out the purposes of this Agreement, the proper directors and officers of each party to this Agreement shall take all such necessary action.
J. Public Announcements. For a period of time from the date of this Agreement to the Closing Date, the Target Portfolio and the Acquiring Portfolio will consult with each other before issuing any press releases or otherwise making any public statements with respect to this Agreement or the transactions contemplated herein and shall not issue any press release or make any public statement prior to such consultation, except as may be required by law.
K. Tax Status of Reorganization. The intention of the parties is that the transactions contemplated by this Agreement will qualify as a reorganization within the meaning of Section 368(a) of the Code. Neither the Acquiring Portfolio nor the Target Portfolio shall take any action, or cause any action to be taken (including, without limitation, the filing of any tax return) that is inconsistent with such treatment or results in the failure of the transaction to qualify as a reorganization within the meaning of Section 368(a) of the Code. At or prior to the Closing Date, the Acquiring Portfolio and the Target Portfolio will take such action, or cause such action to be taken, as is reasonably necessary to enable Reed Smith LLP (“Reed Smith”), special counsel to the Acquiring Portfolio and the Target Portfolio, to render the tax opinion required herein (including, without limitation, each party’s execution of representations reasonably requested by Reed Smith).
L. Declaration of Dividend. At or immediately prior to the Closing Date, the Target Portfolio shall declare and pay to its stockholders a dividend or other distribution in an amount large enough so that it will have distributed substantially all (and in any event not less than 98%) of its investment company taxable income (computed without regard to any deduction for dividends paid) and realized net capital gain, if any, for the current taxable year through the Closing Date.
7. | Conditions to Obligations of the Target Portfolio. |
The obligations of the Target Portfolio hereunder with respect to the consummation of the Reorganization are subject to the satisfaction of the following conditions, unless waived in writing by the Target Portfolio:
A. Shareholder Approval. This Agreement and the transactions contemplated herein shall have been approved by the affirmative vote of a “Majority of the Outstanding Voting Securities” (as defined in the Articles of Incorporation) of the Target Portfolio.
B. Representations, Warranties and Agreements. Each of the representations and warranties of the Acquiring Portfolio contained herein shall be true in all material respects as of the Closing Date, there shall have been no material adverse change in the financial condition, results of operations, business properties or assets of the Acquiring Portfolio as of the Closing Date, and the Target Portfolio shall have received a certificate of an authorized officer of the Acquiring Portfolio satisfactory in form and substance to the Target Portfolio so stating. The Acquiring Portfolio shall have performed and complied in all material respects with all agreements, obligations and covenants required by this Agreement to be so performed or complied with by it on or prior to the Closing Date.
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C. Registration Statement Effective. The Registration Statement shall have become effective and no stop orders under the Securities Act pertaining thereto shall have been issued.
D. Regulatory Approval. All necessary approvals, registrations, and exemptions under federal and state securities laws shall have been obtained.
E. No Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition (an “Injunction”) preventing the consummation of the transactions contemplated by this Agreement shall be in effect, nor shall any proceeding by any state, local or federal government agency or entity seeking any of the foregoing be pending. There shall not have been any action taken or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the transactions contemplated by this Agreement, which makes the consummation of the transactions contemplated by this Agreement illegal or which has a material adverse effect on business operations of the Acquiring Portfolio.
F. Tax Opinion. The Target Portfolio shall have obtained an opinion from Reed Smith, special counsel for the Target Portfolio, dated as of the Closing Date, addressed to the Target Portfolio, that the consummation of the transactions set forth in this Agreement comply with the requirements of a reorganization as described in Section 368(a) of the Code. Such opinion shall be based on customary assumptions and such representations as Reed Smith may reasonably request and the Target Portfolio and the Acquiring Portfolio will cooperate to make and certify the accuracy of such representations.
G. Officer Certificates. The Target Portfolio shall have received a certificate of an authorized officer of the Acquiring Portfolio, dated as of the Closing Date, certifying that the representations and warranties set forth in Section 5 are true and correct on the Closing Date, together with certified copies of the resolutions adopted by the Board on behalf of the Acquiring Portfolio.
8. | Conditions to Obligations of the Acquiring Portfolio. |
The obligations of the Acquiring Portfolio hereunder with respect to the consummation of the Reorganization are subject to the satisfaction of the following conditions, unless waived in writing by the Acquiring Portfolio:
A. Representations, Warranties, and Agreements. Each of the representations and warranties of the Target Portfolio contained herein shall be true in all material respects as of the Closing Date, there shall have been no material adverse change in the financial condition, results of operations, business, properties or assets of the Target Portfolio as of the Closing Date, and the Acquiring Portfolio shall have received a certificate of an authorized officer of the Target Portfolio satisfactory in form and substance to the Acquiring Portfolio so stating. The Target Portfolio shall have performed and complied in all material respects with all agreements, obligations and covenants required by this Agreement to be so performed or complied with by them on or prior to the Closing Date.
B. Registration Statement Effective. The Registration Statement shall have become effective and no stop orders under the Securities Act pertaining thereto shall have been issued.
C. Regulatory Approval. All necessary approvals, registrations, and exemptions under federal and state securities laws shall have been obtained.
D. No Injunctions or Restrains; Illegality. No Injunction preventing the consummation of the transactions contemplated by this Agreement shall be in effect, nor shall any proceeding by any state, local or federal government agency or entity seeking any of the foregoing be pending. There shall not have been any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the transactions contemplated by this Agreement, which makes the consummation of the transactions contemplated by this Agreement illegal.
E. Tax Opinion. The Acquiring Portfolio shall have obtained an opinion from Reed Smith, special counsel for the Acquiring Portfolio, dated as of the Closing Date, addressed to the Acquiring Portfolio, that the consummation of the transactions set forth in this Agreement comply with the requirements of a reorganization as described in Section 368(a) of the Code. Such opinion shall be based on customary assumptions and such representations as Reed
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Smith may reasonably request and the Target Portfolio and the Acquiring Portfolio will cooperate to make and certify the accuracy of such representations.
F. Shareholder List. The Target Portfolio shall have delivered to the Acquiring Portfolio an updated list of all shareholders of the Target Portfolio, as reported by the Target Portfolio’s transfer agent, as of one (1) business day prior to the Closing Date with each shareholder’s respective holdings in the Target Portfolio, taxpayer identification numbers, Form W9 and last known address.
G. Officer Certificates. The Acquiring Portfolio shall have received a certificate of an authorized officer of the Target Portfolio, dated as of the Closing Date, certifying that the representations and warranties set forth in Section 4 hereof are true and correct on the Closing Date, together with certified copies of the resolutions adopted by the Board on behalf of the Target Portfolio and by Target Portfolio shareholders.
9. | Amendment, Waiver and Termination. |
A. The parties hereto may, by agreement in writing authorized by the Board on behalf of each of the Target Portfolio and the Acquiring Portfolio, amend this Agreement at any time before or after approval thereof by the shareholders of the Target Portfolio; provided, however, that after receipt of Target Portfolio shareholder approval, no amendment shall be made by the parties hereto which substantially changes the terms of Sections 1, 2 and 3 hereof without obtaining Target Portfolio’s shareholder approval thereof.
B. At any time prior to the Closing Date, either of the parties may by written instrument signed by it (i) waive any inaccuracies in the representations and warranties made to it contained herein and (ii) waive compliance with any of the covenants or conditions made for its benefit contained herein. No delay on the part of either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.
C. This Agreement may be terminated, and the transactions contemplated herein may be abandoned at any time prior to the Closing Date:
i. | by the consent of the Board on behalf of each of the Target Portfolio and the Acquiring Portfolio; |
ii. | by the Target Portfolio, if the Acquiring Portfolio breaches in any material respect any of its representations, warranties, covenants or agreements contained in this Agreement; |
iii. | by the Acquiring Portfolio, if the Target Portfolio breaches in any material respect any of its representations, warranties, covenants or agreements contained in this Agreement; |
iv. | by either the Target Portfolio or the Acquiring Portfolio, if the Closing has not occurred on or prior to December 31, 2018 (provided that the rights to terminate this Agreement pursuant to this subsection (C)(iv) shall not be available to any party whose failure to fulfill any of its obligations under this Agreement has been the cause of or resulted in the failure of the closing to occur on or before such date); |
v. | by the Acquiring Portfolio in the event that: (a) all the conditions precedent to the Target Portfolio’s obligation to close, as set forth in Section 7 hereof, have been fully satisfied (or can be fully satisfied at the Closing); (b) the Acquiring Portfolio gives the Target Portfolio written assurance of its intent to close irrespective of the satisfaction or non-satisfaction of all conditions precedent to the Acquiring Portfolio’s obligation to close, as set forth in Section 8 hereof; and (c) the Target Portfolio then fails or refuses to close within the earlier of ten (10) business days or December 31, 2018; or |
vi. | by the Target Portfolio in the event that: (a) all the conditions precedent to the Acquiring Portfolio’s obligation to close, as set forth in Section 8 hereof have been fully satisfied (or can be fully satisfied at the Closing); (b) the Target Portfolio gives the Acquiring Portfolio written assurance of its intent to close irrespective of the satisfaction or non-satisfaction of all the conditions precedent to the Target Portfolio’s obligation to close, as set forth in Section 7 hereof; and (c) the Acquiring Portfolio then fails or refuses to close within the earlier of ten (10) business days or December 31, 2018. |
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10. | Remedies. |
In the event of termination of this Agreement by either or both of the Target Portfolio and Acquiring Portfolio pursuant to Section 9(C) hereof, written notice thereof shall forthwith be given by the terminating party to the other party hereto, and this Agreement shall therefore terminate and become void and have no effect, and the transactions contemplated herein and thereby shall be abandoned, without further action by the parties hereto.
11. | Survival of Warranties and Indemnification. |
A. Survival. The representations and warranties included or provided for herein, or in the schedules or other instruments delivered or to be delivered pursuant hereto, shall survive the Closing Date for a three (3) year period except that any representation or warranty with respect to taxes shall survive for the expiration of the statutory period of limitations for assessments of tax deficiencies as the same may be extended from time to time by the taxpayer. The covenants and agreements included or provided for herein shall survive and be continuing obligations in accordance with their terms. The period for which a representation, warranty, covenant or agreement survives shall be referred to hereinafter as the “Survival Period.” Notwithstanding anything set forth in the immediately preceding sentence, the right of the Acquiring Portfolio and the Target Portfolio to seek indemnity pursuant to this Agreement shall survive for a period of ninety (90) days beyond the expiration of the Survival Period of the representation, warranty, covenant or agreement upon which indemnity is sought. In no event shall the Acquiring Portfolio or the Target Portfolio be obligated to indemnify the other if indemnity is not sought within ninety (90) days of the expiration of the applicable Survival Period.
B. Indemnification. Each party (an “Indemnitor”) shall indemnify and hold the other and its directors, officers, agents and persons controlled by or controlling any of them (each an “Indemnified Party”) harmless from and against any and all losses, damages, liabilities, claims, demands, judgments, settlements, deficiencies, taxes, assessments, charges, costs and expenses of any nature whatsoever (including reasonable attorneys’ fees), including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred by such Indemnified Party in connection with the defense or disposition of any claim, action, suit or other proceeding, whether civil or criminal, before any court or administrative or investigative body in which such Indemnified Party may be or may have been involved as a party or otherwise or with which such Indemnified Party may be or may have been threatened (collectively, the “Losses”) arising out of or related to any claim of a breach of any representation, warranty or covenant made herein by the Indemnitor, provided, however, that no Indemnified Party shall be indemnified hereunder against any Losses arising directly from such Indemnified Party’s (i) willful misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless disregard of the duties involved in the conduct of such Indemnified Party’s position.
C. Indemnification Procedure. The Indemnified Party shall use its best efforts to minimize any liabilities, damages, deficiencies, claims, judgments, assessments, costs and expenses in respect of which indemnity may be sought hereunder. The Indemnified Party shall give written notice to the Indemnitor within the earlier of ten (10) days of receipt of written notice to the Indemnified Party or thirty (30) days from discovery by the Indemnified Party of any matters which may give rise to a claim for indemnification or reimbursement under this Agreement. The failure to give such notice shall not affect the right of the Indemnified Party to indemnity hereunder unless such failure has materially and adversely affected the rights of the Indemnitor; provided that in any event such notice shall have been given prior to the expiration of the Survival Period. At any time after ten (10) days from the giving of such notice, the Indemnified Party may, at its option, resist, settle or otherwise compromise, or pay such claim unless it shall have received notice from the Indemnitor that the Indemnitor intends, at the Indemnitor’s sole cost and expense, to assume the defense of any such matter, in which case the Indemnified Party shall have the right, at no cost or expense to the Indemnitor, to participate in such defense. If the Indemnitor does not assume the defense of such matter, and in any event until the Indemnitor states in writing that it will assume the defense, the Indemnitor shall pay all costs of the Indemnified Party arising out of the defense until the defense is assumed; provided, however, that the Indemnified Party shall consult with the Indemnitor and obtain the Indemnitor’s prior written consent to any payment or settlement of any such claim. The Indemnitor shall keep the Indemnified Party fully apprised at all times as to the status of the defense. If the Indemnitor does not assume the defense, the Indemnified Party shall keep Indemnitor apprised at all times as to the status of the defense. Following indemnification as provided for hereunder, the Indemnitor shall be subrogated to all rights of the Indemnified Party with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.
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12. | Survival. |
The provisions set forth in Sections 10, 11 and 16 hereof shall survive the termination of this Agreement for any cause whatsoever.
13. | Notices. |
All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally or sent by registered mail or certified mail, postage prepaid. Notice to the Target Portfolio shall be addressed to the Target Portfolio c/o Thrivent Series Fund, Inc., 625 Fourth Avenue South, Minneapolis, Minnesota 55415, Attention: Chief Legal Officer, or at such other address as the Target Portfolio may designate by written notice to the Acquiring Portfolio. Notice to the Acquiring Portfolio shall be addressed to the Acquiring Portfolio c/o Thrivent Series Fund, Inc., 625 Fourth Avenue South, Minneapolis, Minnesota 55415, Attention: Chief Legal Officer, or at such other address and to the attention of such other person as the Acquiring Portfolio may designate by written notice to the Target Portfolio. Any notice shall be deemed to have been served or given as of the date such notice is delivered personally or mailed.
14. | Successors and Assigns. |
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. This Agreement shall not be assigned by any party without the prior written consent of the other party hereto.
15. | Books and Records. |
All books and records of the Target Portfolio, including all books and records required to be maintained under the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules and regulations thereunder, shall be available to the Acquiring Portfolio from and after the Closing Date and shall be turned over to the Acquiring Portfolio as soon as practicable following the Closing Date.
16. | General. |
This Agreement supersedes all prior agreements between the parties (written or oral), is intended as a complete and exclusive statement of the terms of the Agreement between the parties and may not be amended, modified or changed, or terminated orally. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been executed by the Fund on behalf of the Target Portfolio and by the Fund on behalf of the Acquiring Portfolio and delivered to each of the parties hereto. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement is for the sole benefit of the parties hereto, and nothing in this Agreement, expressed or implied, is intended to confer upon any other person any rights or remedies under or by reason of this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to principles of conflicts or choice of law.
17. | Limitation of Liability. |
It is expressly agreed that the obligations of the Fund hereunder shall not be binding upon any of the Directors, shareholders, nominees, officers, agents or employees of the Fund personally, but shall bind only the property of the Fund, as provided in the Articles of Incorporation. The execution and delivery of this Agreement have been authorized by the Directors and signed by an authorized officer of the Fund, acting as such, and neither such authorization by such Directors nor such execution and delivery by such officer shall be deemed to have been made by any of them personally, but shall bind only the property of the Fund as provided in the Articles of Incorporation. The obligations of any series of the Fund hereunder shall be the exclusive obligation of that series and the parties hereto can only look to the assets of that series to satisfy any debt or obligation incurred by that series hereunder.
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IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed and delivered by their duly authorized officers as of the day and year first written above.
Thrivent Series Fund, Inc. On Behalf of Its Series, Thrivent Growth and Income Plus Portfolio
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Name: Title: | David S. Royal President | |||||||
Attest:
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Name: Title: | Michael W. Kremenak Secretary | |||||||
Thrivent Series Fund, Inc. On Behalf of Its Series, Thrivent Moderately Aggressive Allocation Portfolio
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Name: Title: | David S. Royal President | |||||||
Attest:
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Name: Title: | Michael W. Kremenak Secretary |
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STATEMENT OF ADDITIONAL INFORMATION OF THE REGISTRANT
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Thrivent Series Fund, Inc.
Supplement to the Statement of Additional Information
dated April 28, 2017
with respect to
Thrivent Partner Healthcare Portfolio
On September 11, 2017, BlackRock Investment Management, LLC (“BlackRock”) will replace Sectoral Asset Management Inc. (“Sectoral”) as the subadviser of Thrivent Partner Healthcare Portfolio (the “Portfolio”). As a result, the following changes are made to the Statement of Additional Information.
1. | The “Investment Adviser, Investment Subadvisers, and Portfolio Managers” section is updated to remove information about Sectoral and to include the following information about BlackRock: |
Thrivent Partner Healthcare Portfolio
Investment decisions for the Thrivent Partner Healthcare Portfolio are made by BlackRock Investment Management, LLC (“BlackRock”), which Thrivent Financial has engaged as investment subadviser for the Portfolio. BlackRock, which is located at 1 University Square Drive, Princeton, New Jersey 08540. BlackRock and its affiliates had approximately $5.7 trillion in investment company and other portfolio assets under management as of June 30, 2017.
BlackRock Portfolio Managers
Other Accounts Managed by BlackRock Portfolio Managers
The following table provides information about other accounts managed by Erin Xie as of June 30, 2017.
Portfolio Manager | Type of Accounts | Total # of Accounts Managed | Total Assets (in $ millions) | # of Accounts Managed with Advisory Fee Based on Performance | Total Assets with Advisory Fee Based on Performance (in $ millions) | |||||||||||
Erin Xie | Registered Investment Companies: | 3 | $ | 6,520 | 0 | $0 | ||||||||||
Other Pooled Investment Vehicles: | 2 | $ | 3,330 | 0 | $0 | |||||||||||
Other Accounts: | 1 | $ | 1,030 | 1 | $1,030 |
Compensation
BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.
Base compensation. Generally, portfolio managers receive base compensation based on their position with the firm.
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Discretionary Incentive Compensation. Generally, discretionary incentive compensation for Active Equity portfolio managers is based on a formulaic compensation program. BlackRock’s formulaic portfolio manager compensation program is based on team revenue and pre-tax investment performance relative to appropriate competitors or benchmarks over 1-, 3- and 5-year performance periods, as applicable. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Funds or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks or rankings against which the performance of funds and other accounts managed by each portfolio management team is compared and the period of time over which performance is evaluated. With respect to the portfolio manager, such benchmarks for the Fund and other accounts are:
Portfolio Manager | Benchmarks | |
Erin Xie | MSCI All Country World Index (Net Total Return); MSCI All Country World ex US - Net Return; MSCI All Country World ex US Index (Net TR); MSCI World Health Care; Morningstar Global Large-Cap Blend Equity; Morningstar Foreign Large Blend; LIPPER Options Arbitrage/Opt Strategies Funds; S&P United States MidSmallCap Index; MSCI All Country World Index (Net Total Return); Morningstar US Mid-Cap Equity; Morningstar Mid-Cap Growth; MS Investment Association North America Classification; Morningstar World Stock; MS Investment Association Global Classification; LIPPER Options Arbitrage/Opt Strategies Funds; Morningstar Technology; LIPPER Sector Equity Funds; S&P 500 Index; Russell 3000 HealthCare Index; Citigroup 3-month T-bill Index; Morningstar Sector Equity Healthcare; Morningstar Health Classification; LIPPER Sector Equity Funds |
A smaller element of portfolio manager discretionary compensation may include consideration of: financial results, expense control, profit margins, strategic planning and implementation, quality of client service, market share, corporate reputation, capital allocation, compliance and risk control, leadership, technology and innovation. These factors are considered collectively by BlackRock management and the relevant Chief Investment Officers.
Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.
Typically, the cash portion of the discretionary incentive compensation, when combined with base salary, represents more than 60% of total compensation for the portfolio managers.
Portfolio managers generally receive deferred BlackRock, Inc. stock awards as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest ratably over a number of years and, once vested, settle in BlackRock, Inc. common stock. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align their interests with long-term shareholder interests and motivate performance. Such equity
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awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio manager of this Fund has deferred BlackRock, Inc. stock awards.
For some portfolio managers, discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage. Providing a portion of discretionary incentive compensation in deferred cash awards that notionally track the BlackRock investment products they manage provides direct alignment with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Any portfolio manager who is either a managing director or director at BlackRock with compensation above a specified threshold is eligible to participate in the deferred compensation program.
Other Compensation Benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following incentive savings plans. BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($270,000 for 2017). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.
Conflicts of Interest
BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover,
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BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for the Fund. It should also be noted that Ms. Xie may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Ms. Xie may therefore be entitled to receive a portion of any incentive fees earned on such accounts.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.
Ownership of the Portfolio
Ms. Xie does not own shares of the Thrivent Partner Healthcare Portfolio.
2. | The first paragraph under “Investment Subadvisory Fees” in the “Investment Adviser, Investment Subadvisers, and Portfolio Managers” section is replaced with the following: |
Thrivent Financial pays BlackRock an annual subadvisory fee for the performance of subadvisory services for Thrivent Partner Healthcare Portfolio. The fee payable is equal to 0.50% of the first $50 million of average daily net assets managed by BlackRock, 0.475% of the next $200 million of average daily net assets, 0.45% of the next $250 million and 0.425% of the average daily net assets over $500 million. The Portfolio’s former subadviser was paid the following amounts for the last three years: $475,383 for the year ended December 31, 2014, $852,414 for the year ended December 31, 2015, and $942,518 for the year ended December 31, 2016.
3. | A description of the proxy voting policies of BlackRock is included in Appendix A to this Supplement. |
The date of this Supplement is September 11, 2017.
Please include this Supplement with your Statement of Additional Information.
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APPENDIX A
to
Thrivent Series Fund, Inc.
Supplement to the Statement of Additional Information
dated April 28, 2017
with respect to
Thrivent Partner Healthcare Portfolio
Table of Contents
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- Capital structure, mergers, asset sales and other special transactions | 6 | |||
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BlackRock’s oversight of its corporate governance activities | 8 | |||
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BlackRock is the world’s preeminent asset management firm and a premier provider of global investment management, risk management and advisory services to institutional and individual clients around the world. BlackRock offers a wide range of investment strategies and product structures to meet clients’ needs, including individual and institutional separate accounts, mutual funds, closed-end funds, and other pooled investment vehicles and the industry-leading iShares exchange traded funds. Through BlackRock Solutions®, we offer risk management, strategic advisory and enterprise investment system services to a broad base of clients.
Philosophy on corporate governance
BlackRock’s corporate governance program is focused on protecting and enhancing the economic value of the companies in which it invests on behalf of clients. We do this through engagement with boards and management of investee companies and, for those clients who have given us authority, through voting at shareholder meetings.
We believe that there are certain fundamental rights attached to share ownership. Companies and their boards should be accountable to shareholders and structured with appropriate checks and balances to ensure that they operate in shareholders’ interests. Effective voting rights are central to the rights of ownership and there should be one vote for one share. Shareholders should have the right to elect, remove and nominate directors, approve the appointment of the auditor and to amend the corporate charter or by-laws. Shareholders should be able to vote on matters that are material to the protection of their investment including but not limited to changes to the purpose of the business, dilution levels and pre-emptive rights, the distribution of income and the capital structure. In order to exercise these rights effectively, we believe shareholders have the right to sufficient and timely information to be able to take an informed view of the proposals, and of the performance of the company and management.
Our focus is on the board of directors, as the agent of shareholders, which should set the company’s strategic aims within a framework of prudent and effective controls which enables risk to be assessed and managed. The board should provide direction and leadership to the management and oversee management’s performance. Our starting position is to be supportive of boards in their oversight efforts on our behalf and we would generally expect to support the items of business they put to a vote at shareholder meetings. Votes cast against or withheld from resolutions proposed by the board are a signal that we are concerned that the directors or management have either not acted in the interests of shareholders or have not responded adequately to shareholder concerns regarding strategy or performance.
These principles set out our approach to engaging with companies, provide guidance on our position on corporate governance and outline how our views might be reflected in our voting decisions. Corporate governance practices vary internationally and our expectations in relation to individual companies are based on the legal and regulatory framework of each market. However, as noted above, we do believe that there are some overarching principles of corporate governance that apply
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globally. We assess voting matters on a case-by-case basis and in light of each company’s unique circumstances. We are interested to understand from the company’s reporting its approach to corporate governance, particularly where it is different from the usual market practice, and how it benefits shareholders.
BlackRock also believes that shareholders have responsibilities in relation to monitoring and providing feedback to companies, sometimes known as stewardship. These ownership responsibilities include, in our view, engaging with management or board members on corporate governance matters, voting proxies in the best long-term economic interests of shareholders and engaging with regulatory bodies to ensure a sound policy framework consistent with promoting long-term shareholder value creation. Institutional shareholders also have responsibilities to their clients to have appropriate resources and oversight structures. Our own approach to oversight in relation to our corporate governance activities is set out in the section below titled “BlackRock’s oversight of its corporate governance activities”.
Corporate governance, engagement and voting
We recognize that accepted standards of corporate governance differ between markets but we believe that there are sufficient common threads globally to identify an overarching set of principles. The primary objective of our corporate governance activities is the protection and enhancement of the value of our clients’ investments in public corporations. Thus, these principles focus on practices and structures that we consider to be supportive of long-term value creation. We discuss below the principles under six key themes. In our regional and market-specific voting guidelines we explain how these principles inform our voting decisions in relation to specific resolutions that may appear on the agenda of a shareholder meeting in the relevant market.
The six key themes are:
^ | Boards and directors |
^ | Auditors and audit-related issues |
^ | Capital structure, mergers, asset sales and other special transactions |
^ | Remuneration and benefits |
^ | Social, ethical and environmental issues |
^ | General corporate governance matters |
At a minimum we would expect companies to observe the accepted corporate governance standard in their domestic market or to explain why doing so is not in the interests of shareholders. Where company reporting and disclosure is inadequate or the approach taken is inconsistent with our view of what is in the best interests of shareholders, we will engage with the company and/or use our vote to encourage a change in practice. In making voting decisions, we take into account research from proxy advisors, other internal and external research, information published by the company or provided through engagement and the views of our equity portfolio managers.
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BlackRock views engagement as an important activity; engagement provides BlackRock with the opportunity to improve our understanding of investee companies and their governance structures, so that our voting decisions may be better informed. Engagement also allows us to share our philosophy and approach to investment and corporate governance with companies to enhance their understanding of our objectives. There are a range of approaches we may take in engaging companies depending on the nature of the issue under consideration, the company and the market.
The performance of the board is critical to the economic success of the company and to the protection of shareholders’ interests. Board members serve as agents of shareholders in overseeing the strategic direction and operation of the company. For this reason, BlackRock focuses on directors in many of its engagements and sees the election of directors as one of its most important responsibilities in the proxy voting context.
We expect the board of directors to promote and protect shareholder interests by:
^ | establishing an appropriate corporate governance structure; |
^ | supporting and overseeing management in setting strategy; |
^ | ensuring the integrity of financial statements; |
^ | making decisions regarding mergers, acquisitions and disposals; |
^ | establishing appropriate executive compensation structures; and |
^ | addressing business issues including social, ethical and environmental issues when they have the potential to materially impact company reputation and performance. |
There should be clear definitions of the role of the board, the sub-committees of the board and the senior management such that the responsibilities of each are well understood and accepted. Companies should report publicly the approach taken to governance (including in relation to board structure) and why this approach is in the interest of shareholders. We will engage with the appropriate directors where we have concerns about the performance of the board or the company, the broad strategy of the company or the performance of individual board members. Concerns about directors may include their role on the board of a different company where that board has performed poorly and failed to protect shareholder interests.
BlackRock believes that directors should stand for re-election on a regular basis. We assess directors nominated for election or re-election in the context of the composition of the board as a whole. There should be detailed disclosure of the relevant credentials of the individual directors in order that shareholders can assess the caliber of an individual nominee. We expect there to be a sufficient number of independent directors on the board to ensure the protection of the interests of all shareholders. Common impediments to independence may include but are not limited to:
^ | current employment at the company or a subsidiary; |
^ | former employment within the past several years as an executive of the company; |
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^ | providing substantial professional services to the company and/or members of the company’s management; |
^ | having had a substantial business relationship in the past three years; |
^ | having, or representing a shareholder with, a substantial shareholding in the company; |
^ | being an immediate family member of any of the aforementioned; and |
^ | interlocking directorships. |
BlackRock believes that the operation of the board is enhanced when there is a clearly independent, senior non-executive director to lead it. Where the chairman is also the CEO or is otherwise not independent the company should have an independent lead director. The role of this director is to enhance the effectiveness of the independent members of the board through shaping the agenda, ensuring adequate information is provided to the board and encouraging independent participation in board deliberations. The lead independent board director should be available to shareholders if they have concerns that they wish to discuss.
To ensure that the board remains effective, regular reviews of board performance should be carried out and assessments made of gaps in skills or experience amongst the members. BlackRock believes it is beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking and to ensure both continuity and adequate succession planning. In identifying potential candidates, boards should take into consideration the diversity of experience and expertise of the current directors and how that might be augmented by incoming directors. We believe that directors are in the best position to assess the optimal size for the board, but we would be concerned if a board seemed too small to have an appropriate balance of directors or too large to be effective.
There are matters for which the board has responsibility that may involve a conflict of interest for executives or for affiliated directors. BlackRock believes that shareholders’ interests are best served when the independent members of the board form a sub-committee to deal with such matters. In many markets, these sub-committees of the board specialize in audit, director nominations and compensation matters. An ad hoc committee might also be formed to decide on a special transaction, particularly one with a related party.
Auditors and audit-related issues
BlackRock recognizes the critical importance of financial statements which should provide a complete and accurate picture of a company’s financial condition. We will hold the members of the audit committee or equivalent responsible for overseeing the management of the audit function. We take particular note of cases involving significant financial restatements or ad hoc notifications of material financial weakness.
The integrity of financial statements depends on the auditor being free of any impediments to being an effective check on management. To that end, we believe it is important that auditors are, and are seen to be, independent. Where the audit firm provides services to the company in addition to the audit, the fees earned should be disclosed and explained. Audit committees should also have in place a procedure for assuring annually the independence of the auditor.
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Capital structure, mergers, asset sales and other special transactions
The capital structure of a company is critical to its owners, the shareholders, as it impacts the value of their investment and the priority of their interest in the company relative to that of other equity or debt investors. Pre-emption rights are a key protection for shareholders against the dilution of their interests.
In assessing mergers, asset sales or other special transactions, BlackRock’s primary consideration is the long-term economic interests of shareholders. Boards proposing a transaction need to clearly explain the economic and strategic rationale behind it. We will review a proposed transaction to determine the degree to which it enhances long-term shareholder value. We would prefer that proposed transactions have the unanimous support of the board and have been negotiated at arm’s length. We may seek reassurance from the board that executive and/or board members’ financial interests in a given transaction have not affected their ability to place shareholders’ interests before their own. Where the transaction involves related parties, we would expect the recommendation to support it to come from the independent directors and would prefer only non-conflicted shareholders to vote on the proposal.
BlackRock believes that shareholders have a right to dispose of company shares in the open market without unnecessary restriction. In our view, corporate mechanisms designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such mechanisms can serve to protect and entrench interests other than those of the shareholders. We believe that shareholders are broadly capable of making decisions in their own best interests. We would expect any so-called ‘shareholder rights plans’ being proposed by a board to be subject to shareholder approval on introduction and periodically thereafter for continuation.
BlackRock expects a company’s board of directors to put in place a compensation structure that incentivizes and rewards executives appropriately and is aligned with shareholder interests, particularly long-term shareholder returns. We would expect the compensation committee to take into account the specific circumstances of the company and the key individuals the board is trying to incentivize. We encourage companies to ensure that their compensation packages incorporate appropriate and challenging performance conditions consistent with corporate strategy and market practice. We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. We hold members of the compensation committee or equivalent accountable for poor compensation practices or structures.
BlackRock believes that there should be a clear link between variable pay and company performance as reflected in returns to shareholders. We are not supportive of one-off or special bonuses unrelated to company or individual performance. We support incentive plans that pay out rewards earned over multiple and extended time periods. We believe consideration should be given to building claw back provisions into incentive plans such that executives would be required to repay rewards where they were not justified by actual performance. Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their contract. Finally, pension contributions should be reasonable in light of market practice.
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Outside directors should be compensated in a manner that does not risk compromising their independence or aligning their interests too closely with those of the management, whom they are charged with overseeing.
Social, ethical, and environmental issues
Our fiduciary duty to clients is to protect and enhance their economic interest in the companies in which we invest on their behalf. It is within this context that we undertake our corporate governance activities. We believe that well-managed companies will deal effectively with the social, ethical and environmental (“SEE”) aspects of their businesses.
BlackRock expects companies to identify and report on the material, business-specific SEE risks and opportunities and to explain how these are managed. This explanation should make clear how the approach taken by the company best serves the interests of shareholders and protects and enhances the long-term economic value of the company. The key performance indicators in relation to SEE matters should also be disclosed and performance against them discussed, along with any peer group benchmarking and verification processes in place. This helps shareholders assess how well management is dealing with the SEE aspects of the business. Any global standards adopted should also be disclosed and discussed in this context.
We may vote against the election of directors where we have concerns that a company might not be dealing with SEE issues appropriately. Sometimes we may reflect such concerns by supporting a shareholder proposal on the issue, where there seems to be either a significant potential threat or realized harm to shareholders’ interests caused by poor management of SEE matters. In deciding our course of action, we will assess whether the company has already taken sufficient steps to address the concern and whether there is a clear and material economic disadvantage to the company if the issue is not addressed.
More commonly, given that these are often not voting issues, we will engage directly with the board or management. The trigger for engagement on a particular SEE concern is our assessment that there is potential for material economic ramifications for shareholders.
We do not see it as our role to make social, ethical or political judgments on behalf of clients. We expect investee companies to comply, at a minimum, with the laws and regulations of the jurisdictions in which they operate. They should explain how they manage situations where such laws or regulations are contradictory or ambiguous.
General corporate governance matters
BlackRock believes that shareholders have a right to timely and detailed information on the financial performance and viability of the companies in which they invest. In addition, companies should also publish information on the governance structures in place and the rights of shareholders to influence these. The reporting and disclosure provided by companies helps shareholders assess whether the economic interests of shareholders have been protected and the quality of the board’s oversight of management. BlackRock believes shareholders should have the right to vote on key corporate governance matters, including on changes to governance mechanisms, to submit proposals to the shareholders’ meeting and to call special meetings of shareholders.
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BlackRock’s oversight of its corporate governance activities
BlackRock holds itself to a very high standard in its corporate governance activities, including in relation to executing proxy votes. This function is executed by a team of dedicated BlackRock employees without sales responsibilities (the “Corporate Governance Group”), and which is considered an investment function. BlackRock maintains three regional oversight committees (“Corporate Governance Committees”) for the Americas, Europe, the Middle East and Africa (EMEA) and Asia-Pacific, consisting of senior BlackRock investment professionals. All of the regional Corporate Governance Committees report to a Global Corporate Governance Oversight Committee which is a risk-focused committee composed of senior representatives of the active and index equity investment businesses, the Deputy General Counsel, the Global Executive Committee member to whom the Corporate Governance Group reports and the head of the Corporate Governance Group. The Corporate Governance Committees review and approve amendments to their respective proxy voting guidelines (“Guidelines”) and grant authority to the Global Head of Corporate Governance (“Global Head”), a dedicated BlackRock employee without sales responsibilities, to vote in accordance with the Guidelines. The Global Head leads the Corporate Governance Group to carry out engagement, voting and vote operations in a manner consistent with the relevant Corporate Governance Committee’s mandate. The Corporate Governance Group engages companies in conjunction with the portfolio managers in discussions of significant governance issues, conducts research on corporate governance issues and participates in industry discussions to keep abreast of the field of corporate governance. The Corporate Governance Group, or vendors overseen by the Corporate Governance Group, also monitor upcoming proxy votes, execute proxy votes and maintain records of votes cast. The Corporate Governance Group may refer complicated or particularly controversial matters or discussions to the appropriate investors and/or regional Corporate Governance Committees for their review, discussion and guidance prior to making a voting decision. BlackRock’s Equity Policy Oversight Committee (EPOC) is informed of certain aspects of the work of the Global Corporate Governance Oversight Committee and the Corporate Governance Group.
BlackRock carefully considers proxies submitted to funds and other fiduciary accounts (“Funds”) for which it has voting authority. BlackRock votes (or refrains from voting) proxies for each Fund for which it has voting authority based on BlackRock’s evaluation of the best long-term economic interests of shareholders, in the exercise of its independent business judgment, and without regard to the relationship of the issuer of the proxy (or any dissident shareholder) to the Fund, the Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates.
When exercising voting rights, BlackRock will normally vote on specific proxy issues in accordance with its Guidelines for the relevant market. The Guidelines are reviewed regularly and are amended consistent with changes in the local market practice, as developments in corporate governance occur, or as otherwise deemed advisable by BlackRock’s Corporate Governance Committees. The Corporate Governance Committees may, in the exercise of their business judgment, conclude that the Guidelines do not cover the specific matter upon which a proxy vote is requested or that an exception to the Guidelines would be in the best long-term economic interests of BlackRock’s clients.
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In the uncommon circumstance of there being a vote with respect to fixed income securities or the securities of privately held issuers the decision generally will be made by a Fund’s portfolio managers and/or the Corporate Governance Group based on their assessment of the particular transactions or other matters at issue.
In certain markets, proxy voting involves logistical issues which can affect BlackRock’s ability to vote such proxies, as well as the desirability of voting such proxies. These issues include but are not limited to: (i) untimely notice of shareholder meetings; (ii) restrictions on a foreigner’s ability to exercise votes; (iii) requirements to vote proxies in person; (iv) “share-blocking” (requirements that investors who exercise their voting rights surrender the right to dispose of their holdings for some specified period in proximity to the shareholder meeting); (v) potential difficulties in translating the proxy; and (vi) requirements to provide local agents with unrestricted powers of attorney to facilitate voting instructions. We are not supportive of impediments to the exercise of voting rights such as shareblocking or overly burdensome administrative requirements.
As a consequence, BlackRock votes proxies in these markets only on a “best-efforts” basis. In addition, the Corporate Governance Committees may determine that it is generally in the best interests of BlackRock clients not to vote proxies of companies in certain countries if the committee determines that the costs (including but not limited to opportunity costs associated with shareblocking constraints) associated with exercising a vote are expected to outweigh the benefit the client would derive by voting on the issuer’s proposal.
While it is expected that BlackRock, as a fiduciary, will generally seek to vote proxies over which BlackRock exercises voting authority in a uniform manner for all BlackRock clients, the relevant Corporate Governance Committee, in conjunction with the portfolio manager of an account, may determine that the specific circumstances of such an account require that such account’s proxies be voted differently due to such account’s investment objective or other factors that differentiate it from other accounts. In addition, BlackRock believes portfolio managers may from time to time legitimately reach differing but equally valid views, as fiduciaries for their funds and the client assets in those Funds, on how best to maximize economic value in respect of a particular investment. Accordingly, portfolio managers retain full discretion to vote the shares in the Funds they manage based on their analysis of the economic impact of a particular ballot item.
BlackRock maintains policies and procedures that are designed to prevent undue influence on BlackRock’s proxy voting activity that might stem from any relationship between the issuer of a proxy (or any dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a Fund’s affiliates. Some of the steps BlackRock has taken to prevent conflicts include, but are not limited to:
^ | BlackRock has adopted a proxy voting oversight structure whereby the Corporate Governance Committees oversee the voting decisions and other activities of the Corporate Governance Group, and particularly its activities with respect to voting in the relevant region of each Corporate Governance Committee’s jurisdiction. |
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^ | The Corporate Governance Committees have adopted Guidelines for each region, which set forth the firm’s views with respect to certain corporate governance and other issues that typically arise in the proxy voting context. The Corporate Governance Committees receive periodic reports regarding the specific votes cast by the Corporate Governance Group and regular updates on material process issues, procedural changes and other matters of concern to the Corporate Governance Committees. |
^ | BlackRock’s Global Corporate Governance Oversight Committee oversees the Global Head, the Corporate Governance Group and the Corporate Governance Committees. The Global Corporate Governance Oversight Committee conducts a review, at least annually, of the proxy voting process to ensure compliance with BlackRock’s risk policies and procedures. |
^ | BlackRock maintains a reporting structure that separates the Global Head and Corporate Governance Group from employees with sales responsibilities. In addition, BlackRock maintains procedures intended to ensure that all engagements with corporate issuers or dissident shareholders are managed consistently and without regard to BlackRock’s relationship with the issuer of the proxy or dissident shareholder. Within the normal course of business, the Global Head or Corporate Governance Group may engage directly with BlackRock clients, and with employees with sales responsibilities, in discussions regarding general corporate governance policy matters, and to otherwise ensure that proxy-related client service levels are met. The Global Head or Corporate Governance Group does not discuss any specific voting matter with a client prior to the disclosure of the vote decision to all applicable clients after the shareholder meeting has taken place, except if the client is acting in the capacity as issuer of the proxy or dissident shareholder and is engaging through the established procedures independent of the client relationship. |
^ | In certain instances, BlackRock may determine to engage an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest or as otherwise required by applicable law. The independent fiduciary may either vote such proxies or provide BlackRock with instructions as to how to vote such proxies. In the latter case, BlackRock votes the proxy in accordance with the independent fiduciary’s determination. Use of an independent fiduciary has been adopted for voting the proxies related to any company that is affiliated with BlackRock or any company that includes BlackRock employees on its board of directors. |
With regard to the relationship between securities lending and proxy voting, BlackRock’s approach is driven by our clients’ economic interests. The evaluation of the economic desirability of recalling loans involves balancing the revenue producing value of loans against the likely economic value of casting votes. Based on our evaluation of this relationship, we believe that generally the likely economic value of casting most votes is less than the securities lending income, either because the votes will not have significant economic consequences or because the outcome of the vote would not be affected by BlackRock recalling loaned securities in order to ensure they are voted. Periodically, BlackRock analyzes the process and benefits of voting proxies for securities on loan, and will consider whether any modification of its proxy voting policies or procedures is necessary in light of future conditions. In addition, BlackRock may in its discretion determine that the value of voting outweighs the cost of recalling shares, and thus recall shares to vote in that instance.
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The issue-specific voting Guidelines published for each region/country in which we vote are intended to summarize BlackRock’s general philosophy and approach to issues that may commonly arise in the proxy voting context in each market where we invest. These Guidelines are not intended to be exhaustive. BlackRock applies the Guidelines on a case-by-case basis, in the context of the individual circumstances of each company and the specific issue under review. As such, these Guidelines do not provide a guide to how BlackRock will vote in every instance. Rather, they share our view about corporate governance issues generally, and provide insight into how we typically approach issues that commonly arise on corporate ballots.
We report our proxy voting activity directly to clients and publically as required. In addition, we publish for clients a more detailed discussion of our corporate governance activities, including engagement with companies and with other relevant parties.
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Thrivent Series Fund, Inc.
Supplement to the Statement of Additional Information
dated April 28, 2017
1. | Russell W. Swansen has announced his retirement from Thrivent Financial, effective June 30, 2017. As a result, he will no longer serve as Chief Investment Officer of the Fund. The information provided about Mr. Swansen in the “Fund Management—Leadership Structure and Oversight Responsibilities” section of the Statement of Additional Information is replaced with the following: |
Russell W. Swansen. Mr. Swansen has served as a Director on the Board of the Fund Complex since 2009. He has over 25 years of experience as a portfolio manager and served as a Senior Vice President and Chief Investment Officer of Thrivent Financial from 2003 to 2017. Mr. Swansen has executive and business experience as a former managing director of an investment bank and as a former president of another registered investment adviser. He has gained experience as a director on the board of several companies (both public and private) and a non-profit organization that supports medical research for the treatment and cure of childhood cancers. Mr. Swansen was formerly a director on the board of a mining equipment manufacturer and has been a board member of several private companies.
Interested Directors
Name, Address and | Position | Number of Portfolios in Fund Complex Overseen by Director | Principal Occupation | Other Directorships | ||||
Russell W. Swansen 625 Fourth Avenue South Minneapolis, MN (1957) | Director since 2009 | 54 | Chief Investment Officer, Thrivent Financial from 2003 to 2017. | Currently, Director of Twin Bridge Capital Partners, Invenshure LLC, Children’s Cancer Research Fund, and Intellectual Takeout. |
2. | David S. Royal will succeed Mr. Swansen as Chief Investment Officer and will be named a principal officer of Thrivent Financial following board action. |
The date of this Supplement is June 26, 2017.
Please include this Supplement with your Statement of Additional Information.
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625 Fourth Avenue South
Thrivent Moderate Allocation Portfolio
Thrivent Growth and Income Plus Portfolio
Thrivent Balanced Income Plus Portfolio
Thrivent Partner Healthcare Portfolio
Thrivent Real Estate Securities Portfolio
Thrivent Small Cap Stock Portfolio
Thrivent Mid Cap Stock Portfolio
Thrivent Mid Cap Index Portfolio
Thrivent Partner All Cap Portfolio
Thrivent Large Cap Value Portfolio
Thrivent Large Cap Stock Portfolio
Thrivent Large Cap Index Portfolio
Thrivent High Yield Portfolio
Thrivent Income Portfolio
Thrivent Money Market Portfolio
• | Aggregate initial margin and premiums required to establish its futures, options on futures and swap positions do not exceed 5% of the liquidation value of the Portfolio’s portfolio, after taking into account unrealized profits and losses on such positions; or |
• | Aggregate net notional value of its futures, options on futures and swap positions does not exceed 100% of the liquidation value of the Portfolio’s portfolio, after taking into account unrealized profits and losses on such positions. |
• | When the Portfolio enters into a contract for the purchase or sale of a security denominated in a foreign currency, it may desire to “lock in” the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of dollars, of the amount of foreign currency involved in the underlying security transactions, the Portfolio will be able to protect itself against a possible loss resulting from an adverse change in the relationship |
between the U.S. dollar and the subject foreign currency during the period between the date the security is purchased or sold and the date on which payment is made or received. | |
• | When a Portfolio determines that one currency may experience a substantial movement against another currency, including the U.S. dollar, a Portfolio may enter into a forward contract to sell or buy the amount of the former foreign currency, approximating the value of some or all of a Portfolio’s securities denominated in such foreign currency. |
• | Alternatively, where appropriate, a Portfolio may hedge all or part of its foreign currency exposure through the use of a basket of currencies or a proxy currency where such currency or currencies act as an effective proxy for other currencies. In such a case, a Portfolio may enter into a forward contract where the amount of the foreign currency to be sold exceeds the value of the securities denominated in such currency. The use of this basket hedging technique may be more efficient and economical than entering into separate forward contracts for each currency held in a Portfolio. |
• | The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. |
• | Under normal circumstances, currency risk will be considered when deciding whether to buy or sell a security and as part of the overall diversification strategies. However, Thrivent Financial and the subadvisers believe that it is important to have the flexibility to enter into such forward contracts when it determines that the best interests of the Portfolio will be served. |
Service Provider | Service | Frequency | ||
The Bank of New York Mellon Corporation | Middle Office / Settlements Vendor | Daily | ||
Bloomberg | Trading System & Data Vendor | Daily | ||
BNP Paribas Security Services | Middle Office / Settlements Vendor | Daily | ||
Confluence | Regulatory Reporting Vendor | Quarterly; monthly for Thrivent Money Market Portfolio | ||
Deutsche Bank AG - New York Branch | Securities Lending Agent | Daily | ||
Donnelley Financial Solutions | Printer | Quarterly | ||
FactSet | Systems Vendor | Daily | ||
Fidelity National Information Services, Inc. | Mutual Fund Accounting System Vendor | Daily | ||
Glass Lewis & Co. | Proxy Voting Vendor | Daily | ||
IHS Markit | Pricing Service | Daily | ||
IHS Markit | Bank Debt Reconciliation Vendor | Daily | ||
Institutional Shareholder Services | Proxy Voting & Class Action Services Vendor | Daily | ||
Interactive Data Corp | Pricing Service | Daily | ||
ITG Inc. | Systems Vendor | Daily | ||
JP Morgan | Pricing Service | Daily | ||
Lipper | Data Vendor | Monthly; one day lag | ||
Merrill Corporation | Printer | Quarterly | ||
Morningstar | Data Vendor | Monthly; 60 day lag | ||
Omgeo LLC | Systems Vendor | Daily | ||
PricewaterhouseCoopers LLP | Independent Registered Public Accounting Firm | Annually | ||
Razorfish | Website Consultant | Monthly | ||
Standard & Poor's | Pricing Service | Daily | ||
State Street Bank | Custodian | Daily | ||
Wolters Kluwer | Systems Vendor | Monthly; three day lag |
1. | None of the Portfolios may borrow money, except that a Portfolio may borrow money (through the issuance of debt securities or otherwise) in an amount not exceeding one-third of the Portfolio’s total assets immediately after the time of such borrowing. |
2. | None of the Portfolios may issue senior securities, except as permitted under the 1940 Act or any exemptive order or rule issued by the Securities and Exchange Commission. |
3. | None of the Portfolios (except as noted below) will, with respect to 75% of its total assets, purchase securities of an issuer (other than the U.S. Government, its agencies, instrumentalities or authorities or repurchase agreements fully collateralized by U.S. Government securities, and other investment companies) if (a) such purchase would, at the time, cause more than 5% of the Portfolio’s total assets taken at market value to be invested in the securities of such issuer; or (b) such purchase would, at the time, result in more than 10% of the outstanding voting securities of such issuer being held by the Portfolio. This restriction does not apply to the Thrivent Asset Allocation Portfolios, and the Thrivent Partner Healthcare Portfolio, which are “non-diversified” within the meaning of the 1940 Act. |
4. | None of the Portfolios will buy or sell real estate, except that any Portfolio may (i) acquire or lease office space for its own use, (ii) invest in securities of issuers that invest in real estate or interest therein, (iii) invest in mortgage-related securities and other securities that are secured by real estate or interest therein, and (iv) hold and sell real estate acquired by the Portfolio as a result of the ownership of securities. |
5. | None of the Portfolios may purchase or sell commodities or commodity contracts, except that any Portfolio may purchase and sell derivatives (including but not limited to options, futures contracts and options on futures contracts) whose value is tied to the value of a financial index or a financial instrument or other asset (including, but not limited to, securities indexes, interest rates, securities, currencies and physical commodities). |
6. | None of the Portfolios may make loans, except that any Portfolio may (i) lend portfolio securities, (ii) enter into repurchase agreements, (iii) purchase all or a portion of an issue of debt securities, bank loan participation interests, bank certificates of deposit, bankers’ acceptances, debentures or other securities, whether or not the purchase is made upon the original issuance of the securities, and (iv) participate in an interfund lending program with other registered investment companies. |
7. | None of the Portfolios will underwrite the securities of other issuers, except where the Portfolio may be deemed to be an underwriter for purposes of certain federal securities laws in connection with the disposition of portfolio securities; with investments in other investment companies; and with loans that a Portfolio may make pursuant to its fundamental investment restriction on lending. |
8. | None of the Portfolios (except as noted below) will purchase a security if, after giving effect to the purchase, more than 25% of its total assets would be invested in the securities of one or more issuers conducting their principal business activities in the same industry, except that this restriction does not apply to Government Securities (as such term is defined in the 1940 Act). In addition, with respect to the Thrivent Money Market Portfolio, this restriction does not apply to instruments issued by domestic banks. This restriction does not apply to the Thrivent Asset Allocation Portfolios, which primarily invest in other Portfolios of the Fund that could be considered to be in the same industry. In addition, under normal circumstances, the Thrivent Real Estate Securities Portfolio and the Thrivent Partner |
Healthcare Portfolio will invest more than 25% of their total assets in the securities of issuers in the respective real estate and healthcare industries. |
1. | None of the Portfolios will purchase any security while borrowings, including reverse repurchase agreements, representing more than 5% of the Portfolio’s total assets are outstanding. The Portfolios intend to limit borrowings to amounts borrowed from a bank, reverse repurchase agreements (insofar as they are considered borrowings), or an interfund lending agreement. |
2. | The fundamental investment restriction with respect to industry concentration (number 8 above) will be applied pursuant to SEC policy at 25% (instead of “more than 25%”) of a Portfolio’s total assets. |
3. | None of the Portfolios currently intend to purchase securities on margin, except that a Portfolio may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin. |
4. | The fundamental investment restriction with respect to diversification (number 3 above) will be applied so securities issued by U.S. Government agencies, instrumentalities, or authorities will be eligible for the exception only if those securities qualify as a “Government Security” under the 1940 Act. |
5. | The exception for exemptive orders in the fundamental investment restriction with respect to senior securities (number 2 above) will be applied only for exemptive orders issued to the Portfolios. |
• | Trustee of Thrivent Mutual Funds, a registered investment company consisting of 23 series, which offers Class A and Class S Shares |
• | Trustee of Thrivent Cash Management Trust, a registered investment company that serves as a cash collateral fund for a securities lending program sponsored by Thrivent Financial. |
• | Trustee of Thrivent Core Funds, a registered investment company that only offers its shares to the Fund and the Thrivent Mutual Funds. |
Name, Address and Year of Birth | Position with the Fund and Length of Service(2) | Principal Occupation During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Director | Other Directorships Held Currently and within Past Five Years | ||||
Russell W. Swansen 625 Fourth Avenue South Minneapolis, MN (1957) | Chief Investment Officer since 2015; Director since 2009 | Chief Investment Officer, Thrivent Financial since 2003. | 54 | Currently, Director of Twin Bridge Capital Partners, Ivenshure LLC, Children’s Cancer Research Fund and Intellectual Takeout. | ||||
David S. Royal 625 Fourth Avenue South Minneapolis, MN (1971) | Director and President since 2015 | VP, President Mutual Funds, Thrivent Financial since 2015, Vice President and Deputy General Counsel from 2006 to 2015. | 54 | Currently, Fairview Hospital Foundation |
Name, Address and Year of Birth | Position with the Fund and Length of Service(2) | Principal Occupation During the Past 5 Years | Number of Portfolios in Fund Complex Overseen by Director | Other Directorships Held Currently and within Past Five Years | ||||
Janice B. Case 625 Fourth Avenue South Minneapolis, MN (1952) | Director since 2011 | Retired. | 54 | Independent Trustee of North American Electric Reliability Corporation (the electric reliability organization (“ERO”) for North America) since 2008 | ||||
Robert J. Chersi 625 Fourth Avenue South Minneapolis, MN (1961) | Director since 2017 | Founder of Chersi Services LLC (consulting firm) since 2012; Executive Director of Center for Global Governance, Reporting & Regulation and Adjunct Professor of Finance and Economics at Pace University since 2013; Helpful Executive in Research (counseling) in the Department of Accounting & Information Systems at Rutgers University since 2013; Chief Financial Officer of Fidelity Investments Financial Services from 2008 to 2012. | 54 | Director and Chairman of the Audit Committee of Old Mutual Asset Management PLC since 2016; Advisory Board member of the Pace University Lubin School of Business; Trustee of Fidelity Investments Financial Services’ Political Action Committee |
Name, Address and Year of Birth | Position with the Fund and Length of Service(2) | Principal Occupation During the Past 5 Years | Number of Portfolios in Fund Complex Overseen by Director | Other Directorships Held Currently and within Past Five Years | ||||
Richard A. Hauser 625 Fourth Avenue South Minneapolis, MN (1943) | Director since 2004 | Retired; Vice President and Assistant General Counsel, The Boeing Company from 2007 to 2016. | 54 | None | ||||
Marc S. Joseph 625 Fourth Avenue South Minneapolis, MN (1960) | Director since 2011 | Managing Director of Granite Ridge LLP (consulting and advisory firm) since 2009; Managing Director of Triangle Crest (private investing and consulting firm) since 2004. | 54 | None | ||||
Paul R. Laubscher 625 Fourth Avenue South Minneapolis, MN (1956) | Director since 2009 | Portfolio Manager for U.S. private real estate portfolios of IBM Retirement Funds. | 54 | None | ||||
James A. Nussle 625 Fourth Avenue South Minneapolis, MN (1960) | Director since 2011 | President and Chief Executive Officer of Credit Union National Association since September 2014; President and Chief Operating Officer of Growth Energy (trade association) from 2010 through August 2014; Advisory Board member of AVISTA Capital Partners (private equity firm) from 2010 to 2015; CEO of The Nussle Group LLC (consulting firm) since 2009. | 54 | Advisory Board member of AVISTA Capital Partners and Director of Portfolio Recovery Associates (PRAA) from 2010 to 2015 | ||||
Verne O. Sedlacek 625 Fourth Avenue South Minneapolis, MN (1954) | Director since 2017 | Chief Executive Officer of E&F Advisors LLC (consulting) since 2015; President & Chief Executive Officer of the Commonfund from 2003 to 2015. | 54 | Director of Association of Governing Boards of Universities and Colleges since 2007; Trustee of Valparaiso University since 2015; Trustee of Museum of American Finance since 2015; Chairman of the Board of Directors of AGB Institutional Strategies since 2016 |
Name, Address and Year of Birth | Position with the Fund and Length of Service(2) | Principal Occupation During the Past 5 Years | Number of Portfolios in Fund Complex Overseen by Director | Other Directorships Held Currently and within Past Five Years | ||||
Constance L. Souders 625 Fourth Avenue South Minneapolis, MN (1950) | Director since 2007 | Retired. | 54 | None |
Name, Address and Year of Birth | Position with Fund and Length of Service(2) | Principal Occupation During the Past 5 Years | ||
Russell W. Swansen 625 Fourth Avenue South Minneapolis, MN (1957) | Chief Investment Officer since 2015; Director since 2009 | Chief Investment Officer, Thrivent Financial since 2003 | ||
David S. Royal 625 Fourth Avenue South Minneapolis, MN (1971) | Director and President since 2015 | VP, President Mutual Funds, Thrivent Financial since 2015; Vice President and Deputy General Counsel from 2006 to 2015 | ||
Michael W. Kremenak 625 Fourth Avenue South Minneapolis, MN (1978) | Secretary and Chief Legal Officer since 2015 | Vice President, Chief Legal Officer, Thrivent Financial since 2015; Senior Counsel, Thrivent Financial from 2013 to 2015; Vice President and Assistant General Counsel at Nuveen Investments from 2011 to 2013 | ||
Ted S. Dryden 625 Fourth Avenue South Minneapolis, MN (1965) | Chief Compliance Officer since 2010 | Chief Compliance Officer-Director, Compliance, Thrivent Financial since 2014; Chief Compliance Officer-Investment Company and Investment Adviser, Thrivent Financial from December 2010 to 2014 | ||
Gerard V. Vaillancourt 625 Fourth Avenue South Minneapolis, MN (1967) | Treasurer and Principal Accounting Officer since 2005 | Vice President and Mutual Funds Chief Financial Officer, Thrivent Financial since 2017; Vice President, Mutual Fund Accounting, Thrivent Financial from 2006 to 2017 | ||
Janice M. Guimond 625 Fourth Avenue South Minneapolis, MN (1964) | Vice President since 2005 | Vice President, Investment Operations, Thrivent Financial since 2004 | ||
Mark D. Anema 625 Fourth Avenue South Minneapolis, MN (1961) | Vice President since 2012 | Vice President, Mutual Funds Head of Product Development/Management, Thrivent Financial since 2015; Vice President, New Product Management and Development, Thrivent Financial from 2007 to 2015 | ||
Kathryn A. Stelter 625 Fourth Avenue South Minneapolis, MN (1962) | Vice President since 2015 | Vice President, Mutual Funds Chief Operating Officer, Thrivent Financial since 2014, Director, Mutual Fund Operations at Hartford Funds from 2006 to 2014 |
Name, Address and Year of Birth | Position with Fund and Length of Service(2) | Principal Occupation During the Past 5 Years | ||
Troy A. Beaver 625 Fourth Avenue South Minneapolis, MN (1967) | Vice President since 2016 | Vice President, Mutual Funds Marketing & Distribution, Thrivent Financial since 2015; Vice President, Marketing, American Century Investments from 2006 to 2015 | ||
Kathleen M. Koelling 4321 North Ballard Road Appleton, WI (1977) | Privacy and Identity Theft and Anti-Money Laundering Officer since 2011 | Privacy and Identity Theft and Anti-Money Laundering Officer, Thrivent Financial since 2011; Vice President, Managing Counsel, Thrivent Financial since March 2016; Senior Counsel, Thrivent Financial from 2002 to 2016 | ||
Jill M. Forte 625 Fourth Avenue South Minneapolis, MN (1974) | Assistant Secretary since 2016 | Senior Counsel, Thrivent Financial since April 2017; Counsel, Thrivent Financial from 2015 to 2017; Associate Counsel, Ameriprise Financial, Inc. from 2013 to 2015; Manager – Legal Affairs, Ameriprise Financial, Inc. from 2010 to 2013 | ||
James M. Odland 625 Fourth Avenue South Minneapolis, MN (1955) | Assistant Secretary since 2006 | Vice President, Managing Counsel, Thrivent Financial since 2005 | ||
Sarah L. Bergstrom 625 Fourth Avenue South Minneapolis, MN (1977) | Assistant Treasurer since 2007 | Director, Fund Accounting Administration, Thrivent Financial since 2007 |
(1) | “Interested person” of the Fund as defined in the 1940 Act by virtue of a position with Thrivent Financial. Mr. Swansen and Mr. Royal are each considered an interested person because of their principal occupation with Thrivent Financial. |
(2) | Each Director generally serves an indefinite term until her or his successor is duly elected and qualified. Officers generally serve at the discretion of the Board until their successors are duly appointed and qualified. |
(3) | The Directors, other than Mr. Swansen and Mr. Royal, are not “interested persons” of the Fund and are referred to as “Independent Directors.” |
Committee | Members (1) | Function | Meetings Held During Last Fiscal Year | |||
Audit | Janice B. Case Robert J. Chersi Richard A. Hauser Marc S. Joseph Paul R. Laubscher James A. Nussle Verne O. Sedlacek Constance L. Souders | The 1940 Act requires that the Directors’ independent auditors be selected by a majority of those Directors who are not “interested persons” (as defined in the 1940 Act) of the Fund. The Audit Committee is responsible for recommending the engagement or retention of the Fund’s independent accountants, reviewing with the independent accountants the plan and the results of the auditing engagement, approving professional services, including permitted non-audit services, provided by the independent accountants prior to the performance of such services, considering the range of audit and non-audit fees, reviewing the independence of the independent accountants, reviewing the scope and results of procedures of internal auditing, and reviewing the system of internal accounting control. | 6 | |||
Contracts | Janice B. Case Robert J. Chersi Richard A. Hauser Marc S. Joseph Paul R. Laubscher James A. Nussle Verne O. Sedlacek Constance L. Souders | The function of the Contracts Committee is to assist the Board in fulfilling its duties with respect to the review and approval of contracts between the Fund and other entities, including entering into new contracts and the renewal of existing contracts. The Contracts Committee considers investment advisory, distribution, transfer agency, administrative service and custodial contracts, and such other contracts as the Board deems necessary or appropriate for the continuation of operations of each Portfolio. | 6 | |||
Ethics and Compliance | Janice B. Case Robert J. Chersi Richard A. Hauser Marc S. Joseph Paul R. Laubscher James A. Nussle Verne O. Sedlacek Constance L. Souders | The function of the Ethics and Compliance Committee is to monitor the ethics of the Adviser and oversee the legal and regulatory compliance matters of the Portfolios. | 4 | |||
Governance and Nominating | Janice B. Case Robert J. Chersi Richard A. Hauser Marc S. Joseph Paul R. Laubscher James A. Nussle Verne O. Sedlacek Constance L. Souders | The Governance and Nominating Committee assists the Board in fulfilling its duties with respect to the governance of the Fund, including recommendations regarding evaluation of the Board, compensation of the Directors and composition of the committees and the Board’s membership. The Governance and Nominating Committee makes recommendations regarding nominations for Directors and will consider nominees suggested by shareholders sent to the attention of the President of the Fund. | 4 |
Committee | Members (1) | Function | Meetings Held During Last Fiscal Year | |||
Investments | Janice B. Case Robert J. Chersi Richard A. Hauser Marc S. Joseph Paul R. Laubscher James A. Nussle Verne O. Sedlacek Constance L. Souders | The Investments Committee assists the Board in its oversight of the investment performance of the Portfolios; the Portfolios’ consistency with their investment objectives and styles; management’s selection of benchmarks, peer groups and other performance measures for the Portfolios; and the range of investment options offered to investors in the Portfolios. In addition, the Committee assists the Board in its review of investment-related aspects of management’s proposals, such as new Portfolios or Portfolio reorganizations. | 4 |
(1) | The Independent Directors serve as members of each Committee. |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
David S. Royal | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
Russell W. Swansen | Thrivent Aggressive Allocation Portfolio | $10,001-$50,000 | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Janice B. Case | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
Robert J. Chersi | Thrivent Aggressive Allocation Portfolio | None | None | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
Richard A. Hauser | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | Over $100,000 | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Marc S. Joseph | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
Paul R. Laubscher | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
James A. Nussle | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Verne O. Sedlacek | Thrivent Aggressive Allocation Portfolio | None | None | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None | ||||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None | ||||
Constance L. Souders | Thrivent Aggressive Allocation Portfolio | None | Over $100,000 | ||
Thrivent Moderately Aggressive Allocation Portfolio | None | ||||
Thrivent Moderate Allocation Portfolio | None | ||||
Thrivent Moderately Conservative Allocation Portfolio | None | ||||
Thrivent Growth and Income Plus Portfolio | None | ||||
Thrivent Balanced Income Plus Portfolio | None | ||||
Thrivent Diversified Income Plus Portfolio | None | ||||
Thrivent Opportunity Income Plus Portfolio | None | ||||
Thrivent Partner Healthcare Portfolio | None | ||||
Thrivent Partner Emerging Markets Equity Portfolio | None | ||||
Thrivent Real Estate Securities Portfolio | None | ||||
Thrivent Small Cap Stock Portfolio | None | ||||
Thrivent Small Cap Index Portfolio | None | ||||
Thrivent Mid Cap Stock Portfolio | None |
Name of Director | Dollar Range of Beneficial Ownership in the Portfolio | Aggregate Dollar Range of Beneficial Ownership in All Registered Investment Companies Overseen by the Director in the Family of Investment Companies | |||
Thrivent Mid Cap Index Portfolio | None | ||||
Thrivent Partner Worldwide Allocation Portfolio | None | ||||
Thrivent Partner All Cap Portfolio | None | ||||
Thrivent Large Cap Growth Portfolio | None | ||||
Thrivent Partner Growth Stock Portfolio | None | ||||
Thrivent Large Cap Value Portfolio | None | ||||
Thrivent Large Cap Stock Portfolio | None | ||||
Thrivent Large Cap Index Portfolio | None | ||||
Thrivent High Yield Portfolio | None | ||||
Thrivent Income Portfolio | None | ||||
Thrivent Bond Index Portfolio | None | ||||
Thrivent Limited Maturity Bond Portfolio | None | ||||
Thrivent Money Market Portfolio | None |
Name, Position | Aggregate Compensation From Fund | Total Compensation Paid by the Fund Complex(1) | ||
Janice B. Case | $114,941 | $190,000 | ||
Director | ||||
Richard L. Gady(2)(3) | $102,845 | $170,000 | ||
Director | ||||
Richard A. Hauser(2) | $145,180 | $240,000 | ||
Director | ||||
Paul R. Laubscher(2) | $114,941 | $190,000 | ||
Director | ||||
Marc S. Joseph | $114,941 | $190,000 | ||
Director | ||||
James A. Nussle | $102,845 | $170,000 | ||
Director | ||||
Douglas D. Sims(2)(3) | $117,943 | $195,000 | ||
Director |
Name, Position | Aggregate Compensation From Fund | Total Compensation Paid by the Fund Complex(1) | ||
Constance L. Souders(2) | $127,036 | $210,000 | ||
Director |
(1) | The “Fund Complex” includes Thrivent Cash Management Trust, Thrivent Core Funds, the Fund and Thrivent Mutual Funds. |
(2) | The Fund has adopted a deferred compensation plan for the benefit of the Independent Directors of the Fund who wish to defer receipt of a percentage of eligible compensation which they otherwise are entitled to receive from the Fund. Compensation deferred is invested in Thrivent Mutual Funds, the allocation of which is determined by the individual Director. Directors participating in the deferred compensation plan do not actually own shares of the Thrivent Mutual Funds through the plan, since deferred compensation is a general liability of the Thrivent Mutual Funds. However, a Director’s return on compensation deferred is economically equivalent to an investment in the applicable Thrivent Mutual Funds. For the fiscal year ended December 31, 2016, the total amount of deferred compensation payable to Mr. Gady was $86,800.00; the total amount of deferred compensation payable to Mr. Hauser was $234,209.77; the total amount of deferred compensation payable to Mr. Joseph was $95,000.00; and the total amount of deferred compensation payable to Mr. Sims was $190,296.98. |
(3) | Mr. Gady and Mr. Sims retired from the Board as of December 31, 2016. |
• | Separate accounts (the “Accounts”) of Thrivent Financial and Thrivent Life Insurance Company (“Thrivent Life”), a subsidiary of Thrivent Financial, which are used to fund benefits under various variable life insurance and variable annuity contracts (each a “variable contract”) issued by Thrivent Financial and Thrivent Life; and |
• | Other Portfolios of the Fund. |
Name | Percentage of Shares Outstanding | |
Thrivent Financial for Lutherans | 75.79% | |
Thrivent Life Insurance Company | 4.20% | |
Other Holders | 19.75% | |
Defined Benefit Trust | 0.26% |
Other Registered Investment Companies (1) | Other Accounts | |||||||
Portfolio Manager | # of Accounts Managed | Assets Managed | # of Accounts Managed | Assets Managed | ||||
Russell W. Swansen | 4 | $5,669,825,947 | 0 | $ 0 | ||||
David C. Francis | 5 | $5,673,247,257 | 3 | $ 440,861,923 | ||||
Mark L. Simenstad | 7 | $6,800,644,350 | 0 | $ 0 | ||||
Darren M. Bagwell | 6 | $8,002,522,284 | 2 | $ 261,009,612 | ||||
John T. Groton | 3 | $1,130,818,403 | 2 | $ 203,663,477 | ||||
Noah J. Monsen | 4 | $1,362,171,212 | 3 | $ 324,493,825 |
Other Registered Investment Companies (1) | Other Accounts | |||||||
Portfolio Manager | # of Accounts Managed | Assets Managed | # of Accounts Managed | Assets Managed | ||||
Brian W. Bomgren | 1 | $ 231,352,809 | 3 | $ 324,493,825 | ||||
Kent L. White | 1 | $ 441,346,407 | 2 | $ 113,814,331 | ||||
Kurt J. Lauber | 2 | $2,525,349,154 | 2 | $ 296,232,490 | ||||
Kevin R. Brimmer | 0 | $ 0 | 0 | $ 0 | ||||
Brian J. Flanagan | 1 | $1,501,946,015 | 2 | $ 151,712,333 | ||||
Matthew D. Finn | 1 | $ 509,926,888 | 2 | $ 128,569,027 | ||||
James M. Tinnuci | 1 | $ 509,926,888 | 2 | $ 128,569,027 | ||||
Reginald L. Pfiefer | 3 | $1,130,818,403 | 1 | $ 100,847,775 | ||||
Paul J. Ocenasek | 2 | $1,139,239,757 | 0 | $ 0 | ||||
Stephen D. Lowe | 8 | $7,600,223,213 | 3 | $1,570,038,274 | ||||
Michael G. Landreville | 3 | $1,313,678,582 | 3 | $ 416,425,197 | ||||
Gregory R. Anderson | 2 | $1,252,505,100 | 3 | $7,458,903,152 | ||||
Conrad E. Smith | 1 | $ 441,346,407 | 2 | $ 496,872,139 | ||||
William D. Stouten | 3 | $6,216,020,853 | 3 | $1,796,668,411 |
(1) | The “Other Registered Investment Companies” represent (a) series of Thrivent Mutual Funds, which have substantially similar investment objectives and policies as the Portfolio(s), (b) Thrivent Cash Management Trust and (c) Thrivent Core Funds in the case of William D. Stouten. |
Portfolio Manager | Portfolio | Portfolio Ownership | Fund (1) | Fund Ownership | ||||
Russell W. Swansen | Thrivent Aggressive Allocation Portfolio | $10,001 – $50,000 | Thrivent Aggressive Allocation Fund | Over $1,000,000 | ||||
Thrivent Moderately Aggressive Allocation Portfolio | $0 | Thrivent Moderately Aggressive Allocation Fund | $0 | |||||
Thrivent Moderate Allocation Portfolio | $0 | Thrivent Moderate Allocation Fund | $0 | |||||
Thrivent Moderately Conservative Allocation Portfolio | $0 | Thrivent Moderately Conservative Allocation Fund | $0 | |||||
David C. Francis | Thrivent Aggressive Allocation Portfolio | $0 | Thrivent Aggressive Allocation Fund | $100,001 – $500,000 | ||||
Thrivent Moderately Aggressive Allocation Portfolio | $0 | Thrivent Moderately Aggressive Allocation Fund | $100,001 – $500,000 | |||||
Thrivent Moderate Allocation Portfolio | $0 | Thrivent Moderate Allocation Fund | $0 | |||||
Thrivent Moderately Conservative Allocation Portfolio | $0 | Thrivent Moderately Conservative Allocation Fund | $0 | |||||
Thrivent Partner Worldwide Allocation Portfolio | $0 | Thrivent Partner Worldwide Allocation Fund | $0 | |||||
Mark L. Simenstad | Thrivent Aggressive Allocation Portfolio | $0 | Thrivent Aggressive Allocation Fund | $100,001 – $500,000 | ||||
Thrivent Moderately Aggressive Allocation Portfolio | $0 | Thrivent Moderately Aggressive Allocation Fund | $0 | |||||
Thrivent Moderate Allocation Portfolio | $0 | Thrivent Moderate Allocation Fund | $0 | |||||
Thrivent Moderately Conservative Allocation Portfolio | $0 | Thrivent Moderately Conservative Allocation Fund | $0 | |||||
Thrivent Diversified Income Plus Portfolio | $1 – $10,000 | Thrivent Diversified Income Plus Fund | $0 | |||||
Thrivent Growth and Income Plus Portfolio | $0 | Thrivent Growth and Income Plus Fund | $0 | |||||
Thrivent Balanced Income Plus Portfolio | $0 | Thrivent Balanced Income Plus Fund | $0 | |||||
Darren M. Bagwell | Thrivent Aggressive Allocation Portfolio | $0 | Thrivent Aggressive Allocation Fund | $500,001 – $1,000,000 |
Portfolio Manager | Portfolio | Portfolio Ownership | Fund (1) | Fund Ownership | ||||
Thrivent Moderately Aggressive Allocation Portfolio | $0 | Thrivent Moderately Aggressive Allocation Fund | $0 | |||||
Thrivent Moderate Allocation Portfolio | $0 | Thrivent Moderate Allocation Fund | $0 | |||||
Thrivent Moderately Conservative Allocation Portfolio | $0 | Thrivent Moderately Conservative Allocation Fund | $0 | |||||
Thrivent Large Cap Growth Portfolio | $0 | Thrivent Large Cap Growth Fund | $0 | |||||
Thrivent Large Cap Stock Portfolio | $0 | Thrivent Large Cap Stock Fund | $0 | |||||
Kevin R. Brimmer | Thrivent Large Cap Index Portfolio | $0 | ||||||
Thrivent Mid Cap Index Portfolio | $0 | |||||||
Thrivent Small Cap Index Portfolio | $0 | |||||||
Brian J. Flanagan | Thrivent Mid Cap Stock Portfolio | $1 – $10,000 | Thrivent Mid Cap Stock Fund | $50,001 - $100,000 | ||||
Matthew D. Finn | Thrivent Small Cap Stock Portfolio | $0 | Thrivent Small Cap Stock Fund | $100,001 – $500,000 | ||||
James M. Tinucci | Thrivent Small Cap Stock Portfolio | $0 | Thrivent Small Cap Stock Fund | $0 | ||||
Reginald L. Pfeifer | Thrivent Real Estate Securities Portfolio | $0 | ||||||
Thrivent Growth and Income Plus Portfolio | $0 | Thrivent Growth and Income Plus Fund | $0 | |||||
Thrivent Balanced Income Plus Portfolio | $0 | Thrivent Balanced Income Plus Fund | $0 | |||||
Thrivent Diversified Income Plus Portfolio | $0 | Thrivent Diversified Income Plus Fund | $0 | |||||
Michael G. Landreville | Thrivent Bond Index Portfolio | $0 | ||||||
Thrivent Limited Maturity Bond Portfolio | $0 | Thrivent Limited Maturity Bond Fund | $50,001 – $100,000 | |||||
Thrivent Opportunity Income Plus Portfolio | $0 | Thrivent Opportunity Income Plus Fund | $0 | |||||
Gregory R. Anderson | Thrivent Limited Maturity Bond Portfolio | $0 | Thrivent Limited Maturity Bond Fund | $0 | ||||
Thrivent Opportunity Income Plus Portfolio | $0 | Thrivent Opportunity Income Plus Fund | $0 |
Portfolio Manager | Portfolio | Portfolio Ownership | Fund (1) | Fund Ownership | ||||
Kurt J. Lauber | Thrivent Large Cap Value Portfolio | $0 | Thrivent Large Cap Value Fund | $0 | ||||
Thrivent Large Cap Stock Portfolio | $0 | Thrivent Large Cap Stock Fund | $0 | |||||
Paul J. Ocenasek | Thrivent High Yield Portfolio | $0 | Thrivent High Yield Fund | $0 | ||||
Thrivent Opportunity Income Plus Portfolio | $0 | Thrivent Opportunity Income Plus Fund | $0 | |||||
Stephen D. Lowe | Thrivent Aggressive Allocation Portfolio | $0 | Thrivent Aggressive Allocation Fund | $50,001 – $100,000 | ||||
Thrivent Moderately Aggressive Allocation Portfolio | $0 | Thrivent Moderately Aggressive Allocation Fund | $50,001 – $100,000 | |||||
Thrivent Moderate Allocation Portfolio | $100,001 – $500,000 | Thrivent Moderate Allocation Fund | $50,001 – $100,000 | |||||
Thrivent Moderately Conservative Allocation Portfolio | $0 | Thrivent Moderately Conservative Allocation Fund | $0 | |||||
Thrivent Income Portfolio | $0 | Thrivent Income Fund | $100,001 – $500,000 | |||||
Thrivent Balanced Income Plus Portfolio | $0 | Thrivent Growth andIncome Plus Fund | $0 | |||||
Thrivent Growth and Income Plus Portfolio | $0 | Thrivent BalancedIncome Plus Fund | $0 | |||||
Thrivent Diversified Income Plus Portfolio | $0 | Thrivent Diversified Income Plus Fund | $0 | |||||
William D. Stouten | Thrivent Money Market Portfolio | $0 | Thrivent Money Market Fund | $0 | ||||
Conrad E. Smith | Thrivent Opportunity Income Plus Portfolio | $0 | Thrivent Opportunity Income Plus Fund | $0 | ||||
Kent L. White | Thrivent Opportunity Income Plus Portfolio | $0 | Thrivent Opportunity Income Plus Fund | $0 | ||||
Noah J. Monsen | Thrivent Growth and Income Plus Portfolio | $0 | Thrivent Growth and Income Plus Fund | $0 | ||||
Thrivent Balanced Income Plus Portfolio | $0 | Thrivent Balanced Income Plus Fund | $0 | |||||
Thrivent Diversified Income Plus Portfolio | $0 | Thrivent Diversified Income Plus Fund | $0 | |||||
Thrivent Partner Worldwide Allocation Portfolio | $0 | Thrivent Partner Worldwide Allocation Fund | $0 | |||||
John T. Groton | Thrivent Growth and Income Plus Portfolio | $0 | Thrivent Growth and Income Plus Fund | $0 |
Portfolio Manager | Portfolio | Portfolio Ownership | Fund (1) | Fund Ownership | ||||
Thrivent Balanced Income Plus Portfolio | $0 | Thrivent Balanced Income Plus Fund | $0 | |||||
Thrivent Diversified Income Plus Portfolio | $0 | Thrivent Diversified Income Plus Fund | $0 | |||||
Brian M. Bomgren | Thrivent Partner Worldwide Allocation Portfolio | $0 | Thrivent Partner Worldwide Allocation Fund | $0 |
(1) | Each Fund listed is a series of the Thrivent Mutual Funds, is managed by the same portfolio manager(s) and has substantially similar investment objectives and policies to the corresponding Portfolio listed. |
Portfolio Manager | Type of Accounts | Total # of Accounts Managed | Total Assets (in $ millions) | # of Accounts Managed with Advisory Fee Based on Performance | Total Assets with Advisory Fee Based on Performance (in $ millions) | |||||
Stephan Patten | Registered Investment Companies: | 0 | $ 0 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 4 | $532 | 1 | $ 19 | ||||||
Other Accounts: | 2 | $305 | 1 | $208 | ||||||
Marc-Andre Marcotte | Registered Investment Companies: | 0 | $ 0 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 2 | $ 43 | 1 | $ 3 | ||||||
Other Accounts: | 0 | $ 0 | 0 | $ 0 |
Portfolio Manager | Type of Accounts | Total # of Accounts Managed | Total Assets in the Accounts (in millions) | # of Accounts Managed with Advisory Fee Based on Performance | Total Assets with Advisory Fee Based on Performance (in millions) | |||||
Devan Kaloo | Registered Investment Companies: | 12 | $ 9,767.24 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 25 | $16,277.80 | 0 | $ 0 | ||||||
Other Accounts: | 59 | $15,899.31 | 5 | $1,363.59 | ||||||
Joanne Irvine | Registered Investment Companies: | 12 | $ 9,767.24 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 25 | $16,277.80 | 0 | $ 0 | ||||||
Other Accounts: | 59 | $15,899.31 | 5 | $1,363.59 | ||||||
Mark Gordon-James | Registered Investment Companies: | 12 | $ 9,767.24 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 25 | $16,277.80 | 0 | $ 0 | ||||||
Other Accounts: | 59 | $15,899.31 | 5 | $1,363.59 | ||||||
Flavia Cheong | Registered Investment Companies: | 22 | $11,069.40 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 84 | $36,503.81 | 2 | $ 382.77 |
Portfolio Manager | Type of Accounts | Total # of Accounts Managed | Total Assets in the Accounts (in millions) | # of Accounts Managed with Advisory Fee Based on Performance | Total Assets with Advisory Fee Based on Performance (in millions) | |||||
Other Accounts: | 127 | $30,680.17 | 18 | $5,246.83 | ||||||
Hugh Young | Registered Investment Companies: | 22 | $11,069.40 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 84 | $36,503.81 | 2 | $ 382.77 | ||||||
Other Accounts: | 127 | $30,680.17 | 18 | $5,246.83 |
Total # of Accounts Managed | Total Assets (in millions) | |||
Joseph B. Fath | • registered investment companies: | 10 | $58,784,341,150 | |
• other pooled investment vehicles: | 2 | $ 6,287,696,672 | ||
• other accounts: | 8 | $ 2,048,009,748 |
Portfolio Manager | Type of Accounts | Total # of Accounts Managed | Total Assets in the Accounts (in millions) | # of Accounts Managed with Advisory Fee Based on Performance | Total Assets with Advisory Fee Based on Performance (in millions) | |||||
Paul Blankenhagen | Registered Investment Companies: | 3 | $8,526.9 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 7 | $3,197.2 | 0 | $ 0 | ||||||
Other Accounts: | 4 | $ 422.7 | 1 | $164.4 | ||||||
Juliet Cohn | Registered Investment Companies: | 3 | $8,526.9 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 7 | $3,197.2 | 0 | $ 0 | ||||||
Other Accounts: | 4 | $ 422.7 | 1 | $164.4 | ||||||
John Pihlblad | Registered Investment Companies: | 1 | $ 218.7 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 2 | $ 292.6 | 0 | $ 0 | ||||||
Other Accounts: | 3 | $ 332.9 | 0 | $ 0 | ||||||
Mark Nebelung | Registered Investment Companies: | 10 | $ 894.9 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 5 | $ 509.9 | 0 | $ 0 | ||||||
Other Accounts: | 3 | $ 332.9 | 0 | $ 0 |
Portfolio Manager | Type of Accounts | Total # of Accounts Managed | Total Assets in the Accounts (in millions) | # of Accounts Managed with Advisory Fee Based on Performance | Total Assets with Advisory Fee Based on Performance (in millions) | |||||
Devan Kaloo | Registered Investment Companies: | 12 | $ 9,672.32 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 25 | $16,277.80 | 0 | $ 0 | ||||||
Other Accounts: | 59 | $15,899.31 | 5 | $1,363.59 | ||||||
Joanne Irvine | Registered Investment Companies: | 12 | $ 9,672.32 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 25 | $16,277.80 | 0 | $ 0 | ||||||
Other Accounts: | 59 | $15,899.31 | 5 | $1,363.59 | ||||||
Mark Gordon-James | Registered Investment Companies: | 12 | $ 9,672.32 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 25 | $16,277.80 | 0 | $ 0 | ||||||
Other Accounts: | 59 | $15,899.31 | 5 | $1,363.59 | ||||||
Flavia Cheong | Registered Investment Companies: | 22 | $10,974.48 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 84 | $36,503.81 | 2 | $ 382.77 | ||||||
Other Accounts: | 127 | $30,680.17 | 18 | $5,246.83 | ||||||
Hugh Young | Registered Investment Companies: | 22 | $10,974.48 | 0 | $ 0 | |||||
Other Pooled Investment Vehicles: | 84 | $36,503.81 | 2 | $ 382.77 | ||||||
Other Accounts: | 127 | $30,680.17 | 18 | $5,246.83 |
# of Other Accounts Managed and Total Assets by Account Type | ||||||||||||
Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | ||||||||||
Name of Portfolio Manager | Number of Accounts | Assets Managed (in millions) | Number Accounts | Assets Managed (in millions) | Number Accounts | Assets Managed (in millions) | ||||||
Samuel Finkelstein | 225 | $264,215 | 338 | $169,050 | 3,645 | $279,687 | ||||||
Ricardo Penfold | 153 | $ 41,710 | 139 | $ 41,081 | 1,162 | $169,130 | ||||||
Len Ioffe | 16 | $ 7,464 | 20 | $ 4,382 | 19 | $ 3,989 | ||||||
Osman Ali | 16 | $ 7,464 | 20 | $ 4,382 | 19 | $ 3,989 | ||||||
Takashi Suwabe | 5 | $ 2,482 | 12 | $ 2,906 | 15 | $ 3,477 |
# Accounts & Total Assets for Which Advisory Fee is Performance Based | ||||||||||||
Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | ||||||||||
Name of Portfolio Manager | Number of Accounts | Assets Managed (in millions) | Number Accounts | Assets Managed (in millions) | Number Accounts | Assets Managed (in millions) | ||||||
Samuel Finkelstein | 2 | $355 | 9 | $5,186 | 34 | $10,568 | ||||||
Ricardo Penfold | 2 | $355 | 8 | $5,186 | 15 | $ 3,975 | ||||||
Len Ioffe | 0 | $ 0 | 0 | $ 0 | 6 | $ 1,657 | ||||||
Osman Ali | 0 | $ 0 | 0 | $ 0 | 6 | $ 1,657 | ||||||
Takashi Suwabe | 0 | $ 0 | 0 | $ 0 | 6 | $ 1,657 |
Name Team Member | Type of Accounts | Total # of Accounts Managed | Total Assets (millions) | # of Accounts Managed with Advisory Fee Based in Performance | Total Assets with Advisory Fee Based on Performance (millions) | |||||
Chandler Willett | Registered Investment Companies: | 2 | $2,362 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 46 | $3,769 | 0 | $0 | ||||||
Other Accounts: | 10 | $1,149 | 0 | $0 | ||||||
Chad Colman | Registered Investment Companies: | 2 | $ 384 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 13 | $1,706 | 0 | $0 | ||||||
Other Accounts: | 4 | $1,118 | 0 | $0 | ||||||
Katharine O’Donovan | Registered Investment Companies: | 1 | $ 162 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 13 | $1,718 | 0 | $0 | ||||||
Other Accounts: | 4 | $1,118 | 0 | $0 | ||||||
Ed Field | Registered Investment Companies: | 1 | $ 162 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 18 | $1,701 | 0 | $0 | ||||||
Other Accounts: | 4 | $1,118 | 0 | $0 | ||||||
Andrew Swanson | Registered Investment Companies: | 1 | $ 162 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 12 | $1,654 | 0 | $0 | ||||||
Other Accounts: | 12 | $1,153 | 0 | $0 | ||||||
Jody Simes | Registered Investment Companies: | 2 | $ 227 | 0 | $0 |
Name Team Member | Type of Accounts | Total # of Accounts Managed | Total Assets (millions) | # of Accounts Managed with Advisory Fee Based in Performance | Total Assets with Advisory Fee Based on Performance (millions) | |||||
Other Pooled Investment Vehicles: | 11 | $1,627 | 0 | $0 | ||||||
Other Accounts: | 4 | $1,118 | 0 | $0 | ||||||
Chip Perrone | Registered Investment Companies: | 1 | $ 162 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 12 | $1,693 | 0 | $0 | ||||||
Other Accounts: | 4 | $1,118 | 0 | $0 | ||||||
Hamish Clark | Registered Investment Companies: | 2 | $ 365 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 13 | $1,646 | 0 | $0 | ||||||
Other Accounts: | 4 | $1,118 | 0 | $0 | ||||||
Adam Benjamin | Registered Investment Companies: | 1 | $ 162 | 0 | $0 | |||||
Other Pooled Investment Vehicles: | 10 | $1,941 | 0 | $0 | ||||||
Other Accounts: | 6 | $1,118 | 0 | $0 |
Affiliated Person | Position with Fund | Position with Thrivent Financial | ||
Russell W. Swansen | Chief Investment Officer | Senior Vice President and Chief Investment Officer | ||
David S. Royal | President | Vice President, President Mutual Funds | ||
Janice M. Guimond | Vice President | Vice President, Investment Operations | ||
Gerard V. Vaillancourt | Treasurer and Principal Accounting Officer | Vice President, Mutual Fund Accounting |
Affiliated Person | Position with Fund | Position with Thrivent Financial | ||
Mark D. Anema | Vice President | Vice President, New Product Development Management | ||
Kathleen M. Koelling | Anti-Money Laundering Officer | Vice President, Managing Counsel | ||
Ted S. Dryden | Chief Compliance Officer | Chief Compliance Officer, Director Compliance | ||
Michael W. Kremenak | Secretary and Chief Legal Officer | Vice President, Chief Legal Officer of the Thrivent Funds |
Thrivent Aggressive Allocation Portfolio | |
Portfolio assets invested in all asset types (including Thrivent mutual funds) | |
First $500 million: | 0.750% |
Next $1.5 billion: | 0.725% |
Next $3 billion: | 0.700% |
Next $5 billion: | 0.675% |
Over $10 billion: | 0.650% |
Thrivent Moderately Aggressive Allocation Portfolio | |
Portfolio assets invested in all asset types (including Thrivent mutual funds) | |
First $500 million: | 0.700% |
Next $1.5 billion: | 0.675% |
Next $3 billion: | 0.650% |
Next $5 billion: | 0.625% |
Over $10 billion: | 0.600% |
Thrivent Moderate Allocation Portfolio | |
Portfolio assets invested in all asset types (including Thrivent mutual funds) | |
First $500 million: | 0.650% |
Next $1.5 billion: | 0.625% |
Next $3 billion: | 0.600% |
Next $5 billion: | 0.575% |
Over $10 billion: | 0.550% |
Thrivent Moderately Conservative Allocation Portfolio | |
Portfolio assets invested in all asset types (including Thrivent mutual funds) | |
First $500 million: | 0.600% |
Next $1.5 billion: | 0.575% |
Next $3 billion: | 0.550% |
Next $5 billion: | 0.525% |
Over $10 billion: | 0.500% |
Thrivent Growth and Income Plus Portfolio | |
First $250 million: | 0.650% |
Over $250 million: | 0.600% |
Thrivent Balanced Income Plus Portfolio | |
First $500 million: | 0.550% |
Next $500 million: | 0.500% |
Next $1.5 billion: | 0.475% |
Next $2.5 billion: | 0.450% |
Over $5 billion: | 0.425% |
Thrivent Diversified Income Plus Portfolio | |
All assets: | 0.400% |
Thrivent Opportunity Income Plus Portfolio | |
All assets: | 0.500% |
Thrivent Partner Healthcare Portfolio | |
First $50 million: | 0.950% |
Next $50 million: | 0.900% |
Next $150 million: | 0.850% |
Over $250 million: | 0.800% |
Thrivent Partner Emerging Markets Equity Portfolio | |
First $50 million: | 1.200% |
Over $50 million: | 1.070% |
Thrivent Real Estate Securities Portfolio | |
First $500 million: | 0.800% |
Over $500 million: | 0.750% |
Thrivent Small Cap Stock Portfolio | |
First $200 million: | 0.700% |
Next $800 million: | 0.650% |
Next $1.5 billion: | 0.600% |
Next $2.5 billion: | 0.550% |
Over $5 billion: | 0.525% |
Thrivent Small Cap Index Portfolio | |
First $1.5 billion: | 0.200% |
Next $500 million: | 0.150% |
Over $2 billion: | 0.100% |
Thrivent Mid Cap Stock Portfolio | |
First $200 million: | 0.700% |
Next $800 million: | 0.650% |
Next $1.5 billion: | 0.600% |
Next $2.5 billion: | 0.550% |
Over $5 billion: | 0.525% |
Thrivent Mid Cap Index Portfolio | |
First $1.5 billion: | 0.200% |
Next $500 million: | 0.150% |
Over $2 billion: | 0.100% |
Thrivent Partner Worldwide Allocation Portfolio | |
First $250 million: | 0.900% |
Next $750 million: | 0.850% |
Next $500 million: | 0.800% |
Over $1.5 billion: | 0.750% |
Thrivent Partner All Cap Portfolio | |
First $500 million: | 0.650% |
Over $500 million: | 0.600% |
Thrivent Large Cap Growth Portfolio | |
All assets: | 0.400% |
Thrivent Partner Growth Stock Portfolio | |
First $500 million: | 0.650% |
Over $500 million: | 0.600% |
Thrivent Large Cap Value Portfolio | |
All assets: | 0.600% |
Thrivent Large Cap Stock Portfolio | |
First $500 million: | 0.650% |
Next $250 million: | 0.575% |
Next $250 million: | 0.550% |
Next $1.5 billion: | 0.475% |
Next $2.5 billion: | 0.450% |
Over $5 billion: | 0.425% |
Thrivent Large Cap Index Portfolio | |
First $1.5 billion: | 0.200% |
Next $500 million: | 0.150% |
Over $2 billion: | 0.100% |
Thrivent Low Volatility Equity Portfolio | |
First $100 million: | 0.600% |
Over $100 million | 0.500% |
Thrivent Multidimensional Income Portfolio | |
First $100 million: | 0.550% |
Over $100 million | 0.500% |
Thrivent High Yield Portfolio | |
All assets: | 0.400% |
Thrivent Income Portfolio | |
All assets: | 0.400% |
Thrivent Bond Index Portfolio | |
First $250 million: | 0.350% |
Next $250 million: | 0.300% |
Next $500 million: | 0.250% |
Next $500 million: | 0.200% |
Next $500 million: | 0.150% |
Over $2 billion: | 0.100% |
Thrivent Limited Maturity Bond Portfolio | |
All assets: | 0.400% |
Thrivent Money Market Portfolio | |
All assets: | 0.350% |
Portfolio | Percentage | Expiration Date | ||
Thrivent Partner Worldwide Allocation Portfolio | 0.04% | 4/30/2018 |
Portfolio | Percentage | Expiration Date | ||
Thrivent Growth and Income Plus Portfolio | 0.80% | 4/30/2018 | ||
Thrivent Partner Healthcare Portfolio | 0.95% | 4/30/2018 | ||
Thrivent Partner Emerging Markets Equity Portfolio | 1.30% | 4/30/2018 | ||
Thrivent Partner All Cap Portfolio | 0.85% | 4/30/2018 |
Portfolio | Percentage | Expiration Date | ||
Thrivent Partner Growth Stock Portfolio | 0.80% | 4/30/2018 | ||
Thrivent Low Volatility Equity Portfolio | 0.80% | 4/30/2018 | ||
Thrivent Multidimensional Income Portfolio | 0.95% | 4/30/2018 |
Portfolio | 12/31/2016 | 12/31/2015 | 12/31/2014 | |||
Thrivent Aggressive Allocation Portfolio | $ 7,305,864 | $ 5,647,368 | $ 3,852,619 | |||
Thrivent Moderately Aggressive Allocation Portfolio | $33,079,151 | $25,520,179 | $19,122,347 | |||
Thrivent Moderate Allocation Portfolio | $52,764,833 | $42,548,711 | $33,323,215 | |||
Thrivent Moderately Conservative Allocation Portfolio | $24,775,783 | $18,602,338 | $14,163,249 | |||
Thrivent Growth and Income Plus Portfolio | $ 525,231 | $ 524,602 | $ 488,603 | |||
Thrivent Balanced Income Plus Portfolio | $ 1,799,800 | $ 1,734,682 | $ 1,597,354 | |||
Thrivent Diversified Income Plus Portfolio | $ 2,053,787 | $ 1,865,095 | $ 1,615,113 | |||
Thrivent Opportunity Income Plus Portfolio | $ 582,303 | $ 436,447 | $ 291,363 | |||
Thrivent Partner Healthcare Portfolio | $ 1,606,420 | $ 579,387 | $ 699,345 | |||
Thrivent Partner Emerging Markets Equity Portfolio | $ 606,295 | $ 235,051 | $ 683,371 | |||
Thrivent Real Estate Securities Portfolio | $ 1,356,871 | $ 1,203,799 | $ 1,057,715 | |||
Thrivent Small Cap Stock Portfolio | $ 2,908,308 | $ 2,413,850 | $ 2,218,622 | |||
Thrivent Small Cap Index Portfolio | $ 634,339 | $ 557,928 | $ 895,922 | |||
Thrivent Mid Cap Stock Portfolio | $ 8,187,682 | $ 6,040,819 | $ 4,741,008 | |||
Thrivent Mid Cap Index Portfolio | $ 439,884 | $ 333,830 | $ 463,702 | |||
Thrivent Partner Worldwide Allocation Portfolio | $13,468,631 | $ 6,348,239 | $14,127,986 | |||
Thrivent Partner All Cap Portfolio | $ 839,791 | $ 274,759 | $ 623,330 | |||
Thrivent Large Cap Growth Portfolio | $ 4,107,329 | $ 4,231,757 | $ 4,148,028 | |||
Thrivent Partner Growth Stock Portfolio | $ 913,255 | $ 372,736 | $ 630,876 | |||
Thrivent Large Cap Value Portfolio | $ 7,170,289 | $ 7,150,306 | $ 6,931,242 | |||
Thrivent Large Cap Stock Portfolio | $ 5,300,667 | $ 5,366,123 | $ 5,132,054 | |||
Thrivent Large Cap Index Portfolio | $ 1,162,816 | $ 978,966 | $ 1,363,463 | |||
Thrivent High Yield Portfolio | $ 2,989,494 | $ 3,353,604 | $ 3,682,199 | |||
Thrivent Income Portfolio | $ 5,621,870 | $ 5,527,569 | $ 5,740,302 | |||
Thrivent Bond Index Portfolio | $ 638,251 | $ 540,846 | $ 522,901 | |||
Thrivent Limited Maturity Bond Portfolio | $ 3,404,752 | $ 3,918,601 | $ 4,259,238 | |||
Thrivent Money Market Portfolio | $ 587,646 | $ 537,094 | $ 520,888 |
Portfolio | 12/31/2016 | 12/31/2015 | 12/31/2014 | |||
Thrivent Aggressive Allocation Portfolio | $ 2,080,767 | $ 682,921 | $ — | |||
Thrivent Moderately Aggressive Allocation Portfolio | $11,100,339 | $3,615,142 | $ — | |||
Thrivent Moderate Allocation Portfolio | $14,561,747 | $4,869,841 | $ — | |||
Thrivent Moderately Conservative Allocation Portfolio | $ 5,595,019 | $1,846,268 | $ — |
Portfolio | 12/31/2016 | 12/31/2015 | 12/31/2014 | |||
Thrivent Growth and Income Plus Portfolio | $ 158,755 | $ 150,452 | $105,563 | |||
Thrivent Balanced Income Plus Portfolio | $ — | $ — | $ — | |||
Thrivent Diversified Income Plus Portfolio | $ — | $ — | $ — | |||
Thrivent Opportunity Income Plus Portfolio | $ — | $ 19,357 | $ 19,357 | |||
Thrivent Partner Healthcare Portfolio | $ 121,046 | $ 110,453 | $ — | |||
Thrivent Partner Emerging Markets Equity Portfolio | $ 168,864 | $ 144,390 | $ 70,897 | |||
Thrivent Real Estate Securities Portfolio | $ — | $ — | $ — | |||
Thrivent Small Cap Stock Portfolio | $ — | $ — | $ — | |||
Thrivent Small Cap Index Portfolio | $ — | $ — | $ — | |||
Thrivent Mid Cap Stock Portfolio | $ — | $ 88,000 | $ — | |||
Thrivent Mid Cap Index Portfolio | $ — | $ — | $ — | |||
Thrivent Partner Worldwide Allocation Portfolio | $ — | $ — | $ — | |||
Thrivent Partner All Cap Portfolio | $ 238,907 | $ 191,213 | $149,430 | |||
Thrivent Large Cap Growth Portfolio | $ — | $ 15,800 | $ — | |||
Thrivent Partner Growth Stock Portfolio | $ 169,761 | $ 123,244 | $ 78,859 | |||
Thrivent Large Cap Value Portfolio | $ — | $ — | $ — | |||
Thrivent Large Cap Stock Portfolio | $ — | $ 27,500 | $ — | |||
Thrivent Large Cap Index Portfolio | $ — | $ — | $ — | |||
Thrivent High Yield Portfolio | $ — | $ — | $ — | |||
Thrivent Income Portfolio | $ — | $ — | $ — | |||
Thrivent Bond Index Portfolio | $ — | $ — | $ — | |||
Thrivent Limited Maturity Bond Portfolio | $ — | $ — | $ — | |||
Thrivent Money Market Portfolio | $ 28,232 | $ 447,375 | $454,782 |
Fund | 12/31/2016 | 12/31/2015 | 12/31/2014 | |||
Thrivent Aggressive Allocation Portfolio | $ 258,283 | $ 252,537 | $ 237,595 | |||
Thrivent Moderately Aggressive Allocation Portfolio | 979,349 | 968,865 | 921,586 | |||
Thrivent Moderate Allocation Portfolio | 1,673,073 | 1,663,563 | 1,563,056 | |||
Thrivent Moderately Conservative Allocation Portfolio | 870,389 | 790,192 | 723,289 | |||
Thrivent Growth and Income Plus Portfolio | 94,545 | 94,528 | 93,906 | |||
Thrivent Balanced Income Plus Portfolio | 138,902 | 136,771 | 133,729 | |||
Thrivent Diversified Income Plus Portfolio | 172,420 | 163,929 | 154,699 | |||
Thrivent Opportunity Income Plus Portfolio | 100,963 | 95,712 | 90,780 | |||
Thrivent Partner Healthcare Portfolio | 112,430 | 108,136 | 93,862 | |||
Thrivent Partner Emerging Markets Equity Portfolio | 89,151 | 88,645 | 90,694 | |||
Thrivent Real Estate Securities Portfolio | 110,529 | 107,085 | 104,460 | |||
Thrivent Small Cap Stock Portfolio | 157,768 | 144,076 | 140,299 | |||
Thrivent Small Cap Index Portfolio | 137,090 | 130,214 | 127,561 | |||
Thrivent Mid Cap Stock Portfolio | 307,631 | 245,467 | 212,090 | |||
Thrivent Mid Cap Index Portfolio | 119,590 | 110,045 | 104,510 | |||
Thrivent Partner Worldwide Allocation Portfolio | 370,280 | 378,846 | 394,574 | |||
Thrivent Partner All Cap Portfolio | 95,912 | 94,170 | 92,139 | |||
Thrivent Large Cap Growth Portfolio | 264,830 | 270,429 | 271,846 | |||
Thrivent Partner Growth Stock Portfolio | 100,548 | 96,812 | 94,589 | |||
Thrivent Large Cap Value Portfolio | 295,109 | 294,509 | 293,713 | |||
Thrivent Large Cap Stock Portfolio | 235,067 | 237,209 | 233,703 | |||
Thrivent Large Cap Index Portfolio | 184,654 | 168,107 | 156,372 | |||
Thrivent High Yield Portfolio | 214,527 | 230,912 | 250,302 | |||
Thrivent Income Portfolio | 332,984 | 328,741 | 345,489 | |||
Thrivent Bond Index Portfolio | 112,825 | 107,815 | 107,693 | |||
Thrivent Limited Maturity Bond Portfolio | 233,214 | 256,337 | 276,990 | |||
Thrivent Money Market Portfolio | 109,899 | 104,169 | 104,091 |
Fund | 12/31/2016 | 12/31/2015 | 12/31/2014 | |||
Thrivent Aggressive Allocation Portfolio | $ 638,024 | $ 623,846 | $ 437,500 | |||
Thrivent Moderately Aggressive Allocation Portfolio | $2,678,790 | $2,585,423 | $1,772,743 | |||
Thrivent Moderate Allocation Portfolio | $3,923,928 | $3,868,087 | $2,628,084 | |||
Thrivent Moderately Conservative Allocation Portfolio | $1,123,237 | $1,178,551 | $ 886,243 | |||
Thrivent Growth and Income Plus Portfolio | $ 85,777 | $ 155,545 | $ 212,706 | |||
Thrivent Balanced Income Plus Portfolio | $ 251,483 | $ 316,299 | $ 161,332 | |||
Thrivent Diversified Income Plus Portfolio | $ 283,348 | $ 411,959 | $ 559,423 | |||
Thrivent Opportunity Income Plus Portfolio | $ 34,776 | $ 11,849 | $ 9,239 | |||
Thrivent Partner Healthcare Portfolio | $ 449,353 | $ 339,029 | $ 127,786 | |||
Thrivent Partner Emerging Markets Equity Portfolio | $ 13,368 | $ 7,167 | $ 20,261 | |||
Thrivent Real Estate Securities Portfolio | $ 33,285 | $ 19,798 | $ 23,737 | |||
Thrivent Small Cap Stock Portfolio | $ 341,124 | $ 466,676 | $ 302,330 | |||
Thrivent Small Cap Index Portfolio | $ 84,597 | $ 55,369 | $ 19,660 | |||
Thrivent Mid Cap Stock Portfolio | $ 616,447 | $ 688,551 | $ 338,256 | |||
Thrivent Mid Cap Index Portfolio | $ 61,785 | $ 39,618 | $ 5,869 | |||
Thrivent Partner Worldwide Allocation Portfolio | $2,876,140 | $1,546,134 | $2,192,659 | |||
Thrivent Partner All Cap Portfolio | $ 34,883 | $ 43,460 | $ 58,805 | |||
Thrivent Large Cap Growth Portfolio | $ 638,955 | $ 696,338 | $ 532,734 | |||
Thrivent Partner Growth Stock Portfolio | $ 28,451 | $ 20,822 | $ 18,794 | |||
Thrivent Large Cap Value Portfolio | $ 316,312 | $ 505,466 | $ 364,386 | |||
Thrivent Large Cap Stock Portfolio | $ 861,849 | $ 923,327 | $1,008,211 | |||
Thrivent Large Cap Index Portfolio | $ 56,340 | $ 47,501 | $ 9,446 | |||
Thrivent High Yield Portfolio | $ 2,515 | $ 9 | $ 1,586 | |||
Thrivent Income Portfolio | $ 53,726 | $ 52,186 | $ 57,047 | |||
Thrivent Bond Index Portfolio | $ — | $ — | $ — | |||
Thrivent Limited Maturity Bond Portfolio | $ 57,886 | $ 39,390 | $ 42,281 | |||
Thrivent Money Market Portfolio | $ — | $ — | $ — |
Fund Name | Commissions | Aggregrate Transactions | ||
Thrivent Aggressive Allocation Portfolio | $ 638,024 | $ 798,791,740 | ||
Thrivent Moderately Aggressive Allocation Portfolio | $2,678,790 | $3,251,547,636 | ||
Thrivent Moderate Allocation Portfolio | $3,923,928 | $4,675,661,384 |
Fund Name | Commissions | Aggregrate Transactions | ||
Thrivent Moderately Conservative Allocation Portfolio | $1,123,237 | $1,416,019,377 | ||
Thrivent Growth and Income Plus Portfolio | $ 85,777 | $ 113,777,593 | ||
Thrivent Balanced Income Plus Portfolio | $ 251,483 | $ 317,657,444 | ||
Thrivent Diversified Income Plus Portfolio | $ 283,348 | $ 347,138,191 | ||
Thrivent Opportunity Income Plus Portfolio | $ 34,776 | $ 32,714,094 | ||
Thrivent Partner Healthcare Portfolio | $ 419,528 | $ 285,015,054 | ||
Thrivent Partner Emerging Markets Equity Portfolio | $ 3,401 | $ 1,885,571 | ||
Thrivent Real Estate Securities Portfolio | $ 33,285 | $ 60,964,140 | ||
Thrivent Small Cap Stock Portfolio | $ 341,134 | $ 471,243,400 | ||
Thrivent Small Cap Index Portfolio | $ 84,597 | $ 86,218,965 | ||
Thrivent Mid Cap Stock Portfolio | $ 616,447 | $ 707,212,547 | ||
Thrivent Mid Cap Index Portfolio | $ 61,785 | $ 89,353,012 | ||
Thrivent Partner Worldwide Allocation Portfolio | $2,601,082 | $2,413,760,013 | ||
Thrivent Partner All Cap Portfolio | $ 33,240 | $ 106,364,107 | ||
Thrivent Large Cap Growth Portfolio | $ 638,955 | $1,366,408,941 | ||
Thrivent Partner Growth Stock Portfolio | $ 22,294 | $ 53,108,043 | ||
Thrivent Large Cap Value Portfolio | $ 316,312 | $ 494,108,811 | ||
Thrivent Large Cap Stock Portfolio | $ 861,849 | $ 990,789,371 | ||
Thrivent Large Cap Index Portfolio | $ 56,340 | $ 122,887,288 | ||
Thrivent High Yield Portfolio | $ 2,515 | $ 5,352,250 | ||
Thrivent Income Portfolio | $ 53,726 | $ 1,781,545 | ||
Thrivent Bond Index Portfolio | $ — | $ — | ||
Thrivent Limited Maturity Bond Portfolio | $ 57,886 | $ 558,425 | ||
Thrivent Money Market Portfolio | $ — | $ — |
Funds | Regular Broker or Dealer (or Parent) | Aggregate Holdings | ||
Thrivent Aggressive Allocation Portfolio | Bank of America Corporation | $ 4,191,928 | ||
Goldman, Sachs & Company | $ 4,183,192 | |||
Citigroup, Inc. | $ 1,828,661 | |||
KeyCorp | $ 1,755,199 | |||
Morgan Stanley Dean Witter & Company | $ 584,318 | |||
Mizuho Financial Group, Inc. | $ 57,066 | |||
Thrivent Moderately Aggressive Allocation Portfolio | Bank of America Corporation | $26,590,860 | ||
Goldman, Sachs & Company | $20,368,105 | |||
Citigroup, Inc. | $17,821,300 | |||
Morgan Stanley Dean Witter & Company | $12,192,526 | |||
J.P. Morgan | $ 8,072,053 | |||
KeyCorp | $ 6,027,418 | |||
UBS AG | $ 3,112,797 | |||
Credit Suisse Group AG | $ 1,353,873 |
Funds | Regular Broker or Dealer (or Parent) | Aggregate Holdings | ||
Deutsche Bank | $ 950,877 | |||
Barclays | $ 835,401 | |||
Mizuho Financial Group, Inc. | $ 474,205 | |||
Thrivent Moderate Allocation Portfolio | Bank of America Corporation | $57,776,774 | ||
Morgan Stanley Dean Witter & Company | $39,888,000 | |||
Citigroup, Inc. | $39,785,593 | |||
Goldman, Sachs & Company | $38,996,915 | |||
J.P. Morgan | $29,231,006 | |||
KeyCorp | $12,327,807 | |||
UBS AG | $11,489,193 | |||
Credit Suisse Group AG | $ 4,640,176 | |||
Barclays | $ 2,959,081 | |||
Deutsche Bank | $ 2,926,144 | |||
Mizuho Financial Group, Inc. | $ 1,485,795 | |||
Thrivent Moderately Conservative Allocation Portfolio | Bank of America Corporation | $36,207,033 | ||
Citigroup, Inc. | $26,633,974 | |||
Morgan Stanley Dean Witter & Company | $26,035,380 | |||
Goldman, Sachs & Company | $22,187,519 | |||
J.P. Morgan | $19,016,422 | |||
UBS AG | $ 7,305,943 | |||
KeyCorp | $ 4,265,929 | |||
Credit Suisse Group AG | $ 3,077,423 | |||
Barclays | $ 2,110,022 | |||
Deutsche Bank | $ 1,969,740 | |||
Thrivent Growth and Income Plus Portfolio | Bank of America Corporation | $ 1,587,542 | ||
Goldman, Sachs & Company | $ 1,462,275 | |||
J.P. Morgan | $ 429,836 | |||
KeyCorp | $ 329,054 | |||
Citigroup, Inc. | $ 109,409 | |||
Morgan Stanley Dean Witter & Company | $ 57,706 | |||
Deutsche Bank | $ 48,733 | |||
Credit Suisse Group AG | $ 44,706 | |||
State Street Bank | $ 10,134 | |||
Nomura Securities International, Inc. | $ 8,073 | |||
Thrivent Balanced Income Plus Portfolio | Bank of America Corporation | $ 5,770,519 | ||
Goldman, Sachs & Company | $ 5,618,234 | |||
J.P. Morgan | $ 1,996,576 | |||
KeyCorp | $ 1,074,369 | |||
Deutsche Bank | $ 1,007,236 | |||
HSBC Securities | $ 767,489 | |||
Morgan Stanley Dean Witter & Company | $ 668,616 | |||
Citigroup, Inc. | $ 565,634 | |||
Credit Suisse Group AG | $ 535,028 |
Funds | Regular Broker or Dealer (or Parent) | Aggregate Holdings | ||
State Street Bank | $ 336,297 | |||
Nomura Securities International, Inc. | $ 56,509 | |||
Thrivent Diversified Income Plus Portfolio | Bank of America Corporation | $10,799,277 | ||
J.P. Morgan | $ 7,898,113 | |||
Goldman, Sachs & Company | $ 7,386,821 | |||
Citigroup, Inc. | $ 3,785,157 | |||
Morgan Stanley Dean Witter & Company | $ 3,052,894 | |||
Deutsche Bank | $ 2,244,606 | |||
Credit Suisse Group AG | $ 1,574,213 | |||
KeyCorp | $ 1,064,595 | |||
Nomura Securities International, Inc. | $ 85,772 | |||
Thrivent Opportunity Income Plus Portfolio | J.P. Morgan | $ 1,714,539 | ||
Bank of America Corporation | $ 1,469,889 | |||
Citigroup, Inc. | $ 747,800 | |||
Goldman, Sachs & Company | $ 574,098 | |||
Morgan Stanley Dean Witter & Company | $ 548,162 | |||
BNP Paribas | $ 241,220 | |||
Credit Suisse Group AG | $ 156,938 | |||
Deutsche Bank | $ 93,731 | |||
Nomura Securities International, Inc. | $ 21,191 | |||
Thrivent Small Cap Index Portfolio | Investment Technology Group, Inc. | $ 329,461 | ||
Thrivent Mid Cap Stock Portfolio | KeyCorp | $38,823,750 | ||
Raymond James & Associates, Inc. | $34,657,305 | |||
Thrivent Partner Worldwide Allocation Portfolio | HSBC Securities | $30,909,670 | ||
Westpac Banking Corporation | $14,365,145 | |||
Thrivent Partner All Cap Portfolio | Citigroup, Inc. | $ 2,056,278 | ||
Goldman, Sachs & Company | $ 1,269,085 | |||
Thrivent Large Cap Growth Portfolio | Goldman, Sachs & Company | $24,648,983 | ||
Bank of America Corporation | $22,765,210 | |||
Thrivent Partner Growth Stock Portfolio | Morgan Stanley Dean Witter & Company | $ 2,011,100 | ||
State Street Bank | $ 994,816 | |||
J.P. Morgan | $ 906,045 | |||
Thrivent Large Cap Value Portfolio | Citigroup, Inc. | $59,346,798 | ||
Goldman, Sachs & Company | $26,363,445 | |||
Morgan Stanley Dean Witter & Company | $18,603,098 | |||
Thrivent Large Cap Stock Portfolio | Citigroup, Inc. | $21,170,749 | ||
Goldman, Sachs & Company | $20,662,141 | |||
Thrivent Large Cap Index Portfolio | J.P. Morgan | $10,791,255 | ||
Citigroup, Inc. | $ 5,953,281 | |||
Goldman, Sachs & Company | $ 3,098,483 |
Funds | Regular Broker or Dealer (or Parent) | Aggregate Holdings | ||
Morgan Stanley Dean Witter & Company | $ 2,131,090 | |||
BNY Mellon | $ 1,755,050 | |||
KeyCorp | $ 689,875 | |||
Jefferies & Company, Inc. | $ 262,516 | |||
Thrivent High Yield Portfolio | Goldman, Sachs & Company | $ 2,183,213 | ||
Citigroup, Inc. | $ 1,704,753 | |||
Morgan Stanley Dean Witter & Company | $ 541,233 | |||
Thrivent Income Portfolio | Bank of America Corporation | $34,921,997 | ||
Goldman, Sachs & Company | $29,899,493 | |||
Morgan Stanley Dean Witter & Company | $27,843,217 | |||
Citigroup, Inc. | $22,261,559 | |||
J.P. Morgan | $19,080,796 | |||
Credit Suisse Group AG | $ 7,505,115 | |||
ABN AMRO | $ 6,773,191 | |||
Mizuho Financial Group, Inc. | $ 2,448,655 | |||
Barclays | $ 2,369,794 | |||
Deutsche Bank | $ 1,562,189 | |||
Thrivent Bond Index Portfolio | J.P. Morgan | $ 745,214 | ||
Morgan Stanley Dean Witter & Company | $ 266,721 | |||
Bank of America Corporation | $ 250,326 | |||
Citigroup, Inc. | $ 249,083 | |||
Barclays | $ 247,098 | |||
Thrivent Limited Maturity Bond Portfolio | J.P. Morgan | $17,577,179 | ||
Bank of America Corporation | $15,790,261 | |||
Citigroup, Inc. | $14,542,874 | |||
Morgan Stanley Dean Witter & Company | $10,756,528 | |||
Goldman, Sachs & Company | $ 7,332,590 | |||
HSBC Securities | $ 3,253,784 | |||
Credit Suisse Group AG | $ 2,629,163 | |||
Barclays | $ 2,228,164 | |||
Mizuho Financial Group, Inc. | $ 2,188,166 | |||
Deutsche Bank | $ 2,187,064 |
Portfolio | 12/31/2016 | 12/31/2015 | 12/31/2014 | |||
Thrivent Aggressive Allocation Portfolio | 65% | 60% | 58% | |||
Thrivent Moderately Aggressive Allocation Portfolio | 106% | 91% | 88% | |||
Thrivent Moderate Allocation Portfolio | 159% | 153% | 134% | |||
Thrivent Moderately Conservative Allocation Portfolio | 211% | 198% | 182% | |||
Thrivent Growth and Income Plus Portfolio (1) | 129% | 191% | 176% | |||
Thrivent Balanced Income Plus Portfolio | 140% | 147% | 111% | |||
Thrivent Diversified Income Plus Portfolio | 103% | 113% | 136% | |||
Thrivent Opportunity Income Plus Portfolio | 202% | 184% | 140% | |||
Thrivent Partner Healthcare Portfolio | 101% | 73% | 63% | |||
Thrivent Partner Emerging Markets Equity Portfolio | 7% | 4% | 14% | |||
Thrivent Real Estate Securities Portfolio | 17% | 12% | 21% | |||
Thrivent Small Cap Stock Portfolio (2) | 57% | 90% | 56% | |||
Thrivent Small Cap Index Portfolio | 21% | 20% | 12% | |||
Thrivent Mid Cap Stock Portfolio (2) | 23% | 77% | 37% | |||
Thrivent Mid Cap Index Portfolio | 19% | 19% | 13% | |||
Thrivent Partner Worldwide Allocation Portfolio (3) | 114% | 76% | 78% | |||
Thrivent Partner All Cap Portfolio | 64% | 72% | 105% | |||
Thrivent Large Cap Growth Portfolio | 68% | 68% | 43% | |||
Thrivent Partner Growth Stock Portfolio | 43% | 35% | 38% | |||
Thrivent Large Cap Value Portfolio | 22% | 34% | 20% | |||
Thrivent Large Cap Stock Portfolio | 66% | 57% | 64% | |||
Thrivent Large Cap Index Portfolio | 3% | 3% | 3% | |||
Thrivent High Yield Portfolio | 38% | 38% | 42% | |||
Thrivent Income Portfolio | 109% | 92% | 87% | |||
Thrivent Bond Index Portfolio | 349% | 372% | 407% | |||
Thrivent Limited Maturity Bond Portfolio | 59% | 73% | 102% | |||
Thrivent Money Market Portfolio | N/A | N/A | N/A |
(1) | The portfolio turnover rate for the fiscal year ended December 31, 2016 was lower than the previous fiscal year primarily because the Portfolio had repositioned its equity securities during the previous fiscal year which caused increased portfolio turnover. |
(2) | The portfolio turnover rate for the fiscal year ended December 31, 2016 was lower than the previous fiscal year primarily because the Portfolio engaged in a merger in the 2015 fiscal year, which caused increased portfolio turnover. |
(3) | The portfolio turnover rate for the fiscal year ended December 31, 2016 was higher than the previous fiscal year primarily because the Portfolio terminated a sub-adviser during the 2016 fiscal year which caused increased portfolio turnover. |
Class | Number of Shares | |
Thrivent Aggressive Allocation Portfolio | 300,000,000 | |
Thrivent Moderately Aggressive Allocation Portfolio | 1,000,000,000 | |
Thrivent Moderate Allocation Portfolio | 1,800,000,000 |
Class | Number of Shares | |
Thrivent Moderately Conservative Allocation Portfolio | 1,000,000,000 | |
Thrivent Growth and Income Plus Portfolio | 100,000,000 | |
Thrivent Balanced Income Plus Portfolio | 200,000,000 | |
Thrivent Diversified Income Plus Portfolio | 300,000,000 | |
Thrivent Opportunity Income Plus Portfolio | 100,000,000 | |
Thrivent Partner Healthcare Portfolio | 100,000,000 | |
Thrivent Partner Emerging Markets Equity Portfolio | 100,000,000 | |
Thrivent Real Estate Securities Portfolio | 100,000,000 | |
Thrivent Small Cap Stock Portfolio | 200,000,000 | |
Thrivent Small Cap Index Portfolio | 100,000,000 | |
Thrivent Mid Cap Stock Portfolio | 300,000,000 | |
Thrivent Mid Cap Index Portfolio | 100,000,000 | |
Thrivent Partner Worldwide Allocation Portfolio | 500,000,000 | |
Thrivent Partner All Cap Portfolio | 100,000,000 | |
Thrivent Large Cap Growth Portfolio | 300,000,000 | |
Thrivent Partner Growth Stock Portfolio | 100,000,000 | |
Thrivent Large Cap Value Portfolio | 300,000,000 | |
Thrivent Large Cap Stock Portfolio | 300,000,000 | |
Thrivent Large Cap Index Portfolio | 100,000,000 | |
Thrivent Low Volatility Equity Portfolio | 100,000,000 | |
Thrivent Multidimensional Income Portfolio | 100,000,000 | |
Thrivent High Yield Portfolio | 500,000,000 | |
Thrivent Income Portfolio | 500,000,000 | |
Thrivent Bond Index Portfolio | 100,000,000 | |
Thrivent Limited Maturity Bond Portfolio | 300,000,000 | |
Thrivent Money Market Portfolio | 1,000,000,000 |
• | Equity securities that are traded on U.S. exchanges, including options, shall be valued at the last sale price on the principle exchange as of the close of regular trading on such exchange. If there have been no sales, the latest bid quotation is used. |
• | Over-the-Counter Securities. NASDAQ National Market® securities shall be valued at the NASDAQ Official Closing Price. All other over-the-counter securities for which reliable quotations are available shall be valued at the latest bid quotation. |
• | Fixed income securities traded on a national securities exchange will be valued at the last sale price on such securities exchange that day. If there have been no sales, the latest bid quotation is used. |
• | Because market quotations are generally not “readily available” for many debt securities, foreign and domestic debt securities held by the Portfolios may be valued by an Approved Pricing Service (“APS”), using the evaluation or other valuation methodologies used by the APS. If quotations are not available from the APS, the Adviser’s Valuation Committee shall obtain a manual price from a broker or make a fair value determination. |
• | All Portfolios may value debt securities with a remaining maturity of 60 days or less at amortized cost. |
• | derive at least 90% of its gross income from dividends, interest, gains from the sale of securities, and certain other investments; |
• | invest in securities within certain statutory limits; and |
• | distribute at least 90% of its ordinary income to shareholders. |
—declared and paid daily | Thrivent High Yield Portfolio |
Thrivent Income Portfolio | |
Thrivent Bond Index Portfolio | |
Thrivent Limited Maturity Bond Portfolio | |
Thrivent Opportunity Income Plus Portfolio | |
—declared daily and paid monthly | Thrivent Money Market Portfolio |
—declared and paid at least annually | Thrivent Aggressive Allocation Portfolio |
Thrivent Moderately Aggressive Allocation Portfolio | |
Thrivent Moderate Allocation Portfolio | |
Thrivent Moderately Conservative Allocation Portfolio | |
Thrivent Partner Healthcare Portfolio | |
Thrivent Partner Emerging Markets Equity Portfolio | |
Thrivent Real Estate Securities Portfolio | |
Thrivent Small Cap Stock Portfolio | |
Thrivent Small Cap Index Portfolio | |
Thrivent Mid Cap Stock Portfolio | |
Thrivent Mid Cap Index Portfolio | |
Thrivent Partner Worldwide Allocation Portfolio | |
Thrivent Partner All Cap Portfolio | |
Thrivent Large Cap Growth Portfolio | |
Thrivent Partner Growth Stock Portfolio | |
Thrivent Large Cap Value Portfolio | |
Thrivent Large Cap Stock Portfolio | |
Thrivent Large Cap Index Portfolio | |
Thrivent Low Volatility Equity Portfolio | |
Thrivent Multidimensional Income Portfolio | |
Thrivent Growth and Income Plus Portfolio | |
Thrivent Balanced Income Plus Portfolio | |
Thrivent Diversified Income Plus Portfolio |
Aaa: | Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
Aa: | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
A: | Obligations rated A are considered upper-medium grade and are subject to low credit risk. |
Baa: | Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics. |
Ba: | Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. |
B: | Obligations rated B are considered speculative and are subject to high credit risk. |
Caa: | Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
Ca: | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
C: | Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest. |
P-1: | Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations. |
P-2: | Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations. |
P-3: | Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations. |
NP: | Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories. |
MIG 1: | This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing. |
MIG 2: | This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group. |
MIG 3: | This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established. |
SG: | This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection. |
VMIG 1: | This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
VMIG 2: | This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
VMIG 3: | This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
SG: | This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand. |
• | Likelihood of payment — capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; |
• | Nature of and provisions of the obligation; |
• | Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights. |
AAA: | An obligation rated ‘AAA’ has the highest rating assigned by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. |
AA: | An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong. |
A: | An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. |
BBB: | An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. |
BB: | An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. |
B: | An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation. |
CCC: | An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. |
CC: | An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is used when a default has not yet occurred, but Standard & Poor’s expects default to be a virtual certainty, regardless of the anticipated time to default. |
C: | An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher. |
D: | An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor’s believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer. |
NR: | This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor’s does not rate a particular obligation as a matter of policy. |
Plus (+) or minus (-): | The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. |
A-1: | A short-term obligation rated ‘A-1’ is rated in the highest category by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong. |
A-2: | A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory. |
A-3: | A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. |
B: | A short-term obligation rated ‘B’ is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitments. |
C: | A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. |
D: | A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor’s believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer. |
Investment Grade | |
AAA: | Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. |
AA: | Very high credit quality. “AA” ratings denote expectations of very low credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. |
A: | High credit quality. “A” ratings denote low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. |
BBB: | Good credit quality. “BBB” ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity. |
Speculative Grade | |
BB: | Speculative. ‘BB’ ratings indicate an elevated vulnerability to credit risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial alternatives may be available to allow financial commitments to be met. |
B: | Highly speculative. ‘B’ ratings indicate that material credit risk is present. |
CCC: | Substantial credit risk. ‘CCC’ ratings indicate that substantial credit risk is present. |
CC: | Very high levels of credit risk. ‘CC’ ratings indicate very high levels of credit risk. |
C: | Exceptionally high levels of credit risk. ‘C’ indicates exceptionally high levels of credit risk. |
F1: | Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature. |
F2: | Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments. |
F3: | Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate. |
B: | Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions. |
C: | High short-term default risk. Default is a real possibility. |
RD: | Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only. |
D: | Default. Indicates a broad-based default event for an entity, or the default of a specific short-term obligation. |
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2/6/2017
THRIVENT FINANCIAL FOR LUTHERANS and THRIVENT ASSET MANAGEMENT, LLC PROXY VOTING PROCESS AND POLICIES SUMMARY
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Ø | RESPONSIBILITY TO VOTE PROXIES |
Overview. Thrivent Financial for Lutherans and Thrivent Asset Management, LLC (“Thrivent Financial”) recognize and adhere to the principle that one of the privileges of owning stock in a company is the right to vote in the election of the company’s directors and on matters affecting certain important aspects of the company’s structure and operations that are submitted to shareholder vote. As an investment adviser with a fiduciary responsibility to its clients, Thrivent Financial analyzes the proxy statements of issuers whose stock is owned by the investment companies which it sponsors and serves as investment adviser (“Thrivent Funds”) and by institutional accounts who have requested that Thrivent Financial be involved in the proxy process.
Thrivent Financial has adopted Proxy Voting Policies and Procedures (“Policies and Procedures”) for the purpose of establishing formal policies and procedures for performing and documenting its fiduciary duty with regard to the voting of client proxies.
Fiduciary Considerations. It is the policy of Thrivent Financial that decisions with respect to proxy issues will be made in light of the anticipated impact of the issue on the desirability of investing in the portfolio company from the viewpoint of the particular client or Thrivent Fund. Proxies are voted solely in the interests of the client, Thrivent Fund shareholders or, where employee benefit plan assets are involved, in the interests of plan participants and beneficiaries. Thrivent Financial votes proxies, where possible to do so, in a manner consistent with its fiduciary obligations and responsibilities. Logistics involved may make it impossible at times, and at other times disadvantageous, to vote proxies in every instance.
Consideration Given Management Recommendations. One of the primary factors Thrivent Financial considers when determining the desirability of investing in a particular company is the quality and depth of its management. The Policies and Procedures were developed with the recognition that a company’s management is entrusted with the day-to-day operations of the company, as well as its long-term direction and strategic planning, subject to the oversight of the company’s board of directors. Accordingly, Thrivent Financial believes that the recommendation of management on most issues should be given weight in determining how proxy issues should be voted. However, the position of the company’s management will not be supported in any situation where it is found to be not in the best interests of the client, and Thrivent Financial reserves the right to vote contrary to management when it believes a particular proxy proposal may adversely affect the investment merits of owning stock in a portfolio company.
Ø | ADMINISTRATION OF POLICIES AND PROCEDURES |
Thrivent Financial’s Compliance and Governance Committee (“Committee”) is responsible for establishing positions with respect to corporate governance and other proxy issues, including those involving social responsibility issues. Annually, the Committee reviews the proxy voting policies and procedures. As discussed below, Thrivent Financial portfolio management may, with the approval of the Committee, vote proxies other than in accordance with the proxy voting policies and procedures.
Ø | HOW PROXIES ARE REVIEWED, PROCESSED AND VOTED |
In order to facilitate the proxy voting process, Thrivent Financial has retained Institutional Shareholder Services Inc. (“ISS”), an expert in the proxy voting area. ISS specializes in providing a variety of fiduciary-level proxy advisory and voting services. These services include in-depth research, analysis, and voting recommendations
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as well as vote execution, reporting, auditing and consulting assistance for the handling of proxy voting responsibilities. While the Committee relies upon ISS research in helping to establish Thrivent Financial’s proxy voting guidelines, Thrivent Financial may deviate from ISS recommendations on general policy issues or specific proxy proposals.
Summary of Thrivent Financial’s Voting Policies
Voting guidelines have been adopted by the Committee for routine anti-takeover, executive compensation and corporate governance proposals, as well as other common shareholder proposals. The voting guidelines are available to shareholders upon request. The following is a summary of the significant Thrivent Financial policies:
Board Structure and Composition Issues – Thrivent Financial believes boards are expected to have a majority of directors independent of management. The independent directors are expected to organize much of the board’s work, even if the chief executive officer also serves as chairman of the board. Key committees (audit, compensation, and nominating/corporate governance) of the board are expected to be entirely independent of management. It is expected that boards will engage in critical self-evaluation of themselves and of individual members. Individual directors, in turn, are expected to devote significant amounts of time to their duties, to limit the number of directorships they accept, and to own a meaningful amount of stock in companies on whose boards they serve. As such, Thrivent Financial withholds votes for directors who miss more than one-fourth of the scheduled board meetings. Thrivent Financial votes against management efforts to stagger board member terms because a staggered board may act as a deterrent to takeover proposals. For the same reasons, Thrivent Financial votes for proposals that seek to fix the size of the board.
Executive and Director Compensation – Non-salary compensation remains one of the most sensitive and visible corporate governance issues. Although shareholders have little say about how much the CEO is paid in salary and bonus, they do have a major voice in approving stock option and incentive plans. Stock option plans transfer significant amounts of wealth from shareholders to employees, and in particular to executives and directors. Rightly, the cost of these plans must be in line with the anticipated benefits to shareholders. Clearly, reasonable limits must be set on dilution as well as administrative authority. In addition, shareholders must consider the necessity of the various pay programs and examine the appropriateness of award types. Consequently, the pros and cons of these proposals necessitate a case-by-case evaluation. Generally, Thrivent Financial opposes compensation packages that provide what we view as excessive awards to a few senior executives or that contain excessively dilutive stock option grants based on a number of criteria such as the costs associated with the plan, plan features, and dilution to shareholders.
Ratification of Auditors - Annual election of the outside accountants is standard practice. While it is recognized that the company is in the best position to evaluate the competence of the outside accountants, we believe that outside accountants must ultimately be accountable to shareholders. Given the rash of accounting irregularities that were not detected by audit panels or auditors, shareholder ratification is an essential step in restoring investor confidence. In line with this, Thrivent Financial votes for proposals to ratify auditors, unless an auditor has a financial interest in or association with the company, and is therefore not independent; or there is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the company’s financial position.
Mergers and Acquisitions, Anti-Takeover and Corporate Governance Issues - Thrivent Financial votes on mergers and acquisitions on a case-by-case basis, taking the following into account: anticipated financial and operating benefits; offer price (cost vs. premium); prospects of the combined companies; how the deal was negotiated; the opinion of the financial advisor; potential conflicts of interest between management’s interests and shareholders’ interests; and changes in corporate governance and their impact on shareholder rights. Thrivent Financial generally opposes anti-takeover measures since they adversely impact shareholder rights. Also, Thrivent Financial will consider the dilutive impact to shareholders and the effect on shareholder rights when voting on corporate governance proposals.
Social, Environmental and Corporate Responsibility Issues - In addition to moral and ethical considerations intrinsic to many of these proposals, Thrivent Financial recognizes their potential for impact on the economic performance of the company. Thrivent Financial balances these considerations carefully. On proposals which are primarily social, moral or ethical, Thrivent Financial believes it is impossible to vote in a manner that would accurately reflect the views of the beneficial owners of the portfolios that it manages. As such, on these items Thrivent
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Financial abstains. When voting on matters with apparent economic or operational impacts on the company, Thrivent Financial realizes that the precise economic effect of such proposals is often unclear. Where this is the case, Thrivent Financial relies on management’s assessment, and generally votes with company management.
Shareblocking - Shareblocking is the practice in certain foreign countries of “freezing” shares for trading purposes in order to vote proxies relating to those shares. In markets where shareblocking applies, the custodian or sub-custodian automatically freezes shares prior to a shareholder meeting once a proxy has been voted. Shareblocking typically takes place between one and fifteen (15) days before the shareholder meeting, depending on the market. In markets where shareblocking applies, there is a potential for a pending trade to fail if trade settlement takes place during the blocking period. Thrivent Financial generally abstains from voting shares in shareblocking countries unless the matter has compelling economic consequences that outweigh the loss of liquidity in the blocked shares.
Applying Proxy Voting Policies Foreign Companies – Thrivent Financial applies a two-tier approach to determining and applying global proxy voting policies. The first tier establishes baseline policy guidelines for the most fundamental issues, which apply without regard to a company’s domicile. The second tier takes into account various idiosyncrasies of different countries, making allowances for standard market practices, as long as they do not violate the fundamental goals of good corporate governance. The goal is to enhance shareholder value through effective use of the shareholder franchise, recognizing that applying policies developed for U.S. corporate governance is not appropriate for all markets.
Meeting Notification
Thrivent Financial utilizes ISS’ voting agent services to notify us of upcoming shareholder meetings for portfolio companies held in client accounts and to transmit votes on behalf of our clients. ISS tracks and reconciles Thrivent Financial holdings against incoming proxy ballots. If ballots do not arrive on time, ISS procures them from the appropriate custodian or proxy distribution agent. Meeting and record date information is updated daily in ProxyExchange, ISS’ web-based application. ISS is also responsible for maintaining copies of all proxy statements received by issuers and to promptly provide such materials to Thrivent Financial upon request.
Vote Determination
ISS provides comprehensive summaries of proxy proposals, publications discussing key proxy voting issues, and specific vote recommendations regarding portfolio company proxies to assist in the proxy research process. Upon request, portfolio managers may receive any or all of the above-mentioned research materials to assist in the vote determination process. The final authority and responsibility for proxy voting decisions remains with Thrivent Financial. Decisions with respect to proxy matters are made primarily in light of the anticipated impact of the issue on the desirability of investing in the company from the viewpoint of our clients.
Portfolio managers, executive officers, and directors (or persons holding equivalent positions) of Thrivent Financial and its affiliates may on any particular proxy vote request to diverge from Policies and Procedures. In such cases, the person requesting to diverge from the Policies and Procedures is required to document in writing the rationale for their vote and submit all written documentation to the Committee for review and approval. In determining whether to approve any particular request, the Committee will determine that the request is not influenced by any conflict of interest and is in the best interests of its clients.
Monitoring and Resolving Conflicts of Interest
The Committee is responsible for monitoring and resolving possible material conflicts between the interests of Thrivent Financial and those of its clients with respect to proxy voting.
Application of the Thrivent Financial guidelines to vote client proxies should in most instances adequately address any possible conflicts of interest since the voting guidelines are pre-determined by the Committee using recommendations from ISS.
However, for proxy votes inconsistent with Thrivent Financial guidelines, Investment Operations gathers the documentation with respect to the portfolio manager’s voting rationale and brings it to the Committee for review for possible conflicts of interest. The Committee assesses whether any business or other relationships between Thrivent Financial and a portfolio company could have influenced an inconsistent vote on that company’s proxy.
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Securities Lending
Thrivent Financial will generally not vote nor seek to recall in order to vote shares on loan, unless it determines that a vote would have a material effect on an investment in such loaned security. Seeking to recall securities in order to vote them even in these limited circumstances may nevertheless not result in Thrivent Financial voting the shares because the securities are unable to be recalled in time from the party with custody of the securities, or for other reasons beyond Thrivent Financial’s control.
Ø | REPORTING AND RECORD RETENTION |
Proxy statements and solicitation materials received from issuers (other than those which are available on the SEC’s EDGAR database) are kept by ISS in its capacity as voting agent and are available upon request. Thrivent Financial retains documentation on shares voted differently than the Thrivent Financial voting guidelines, and any document which is material to a proxy voting decision such as the Thrivent Financial voting guidelines and the Committee meeting materials. In addition, all SEC filings with regard to proxy voting, such as Form N-PX, will be kept. All proxy voting materials and supporting documentation are retained for five years.
ISS provides Vote Summary Reports for each Thrivent Fund. The report specifies the company, ticker, cusip, meeting dates, proxy proposals, and votes which have been cast for the Thrivent Fund during the period, the position taken with respect to each issue and whether the fund voted with or against company management. Information on how each Thrivent Fund voted proxies during the most recent 12-month period ending June 30 is available at the Thrivent Financial web site or the SEC web site.
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THRIVENT FINANCIAL FOR LUTHERANS and THRIVENT ASSET MANAGEMENT, LLC PROXY VOTING POLICIES
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1. BOARD STRUCTURE AND COMPOSITION ISSUES
Although a company’s board of directors normally delegates responsibility for the management of the business to the senior executives they select and oversee, directors bear ultimate responsibility for the conduct of the corporation’s business. The role of directors in publicly held corporations has undergone considerable scrutiny and been the subject of legislative and regulatory reform in recent years. Once derided as rubber stamps for management, directors are today expected to serve as guardians of shareholders’ interests.
Boards are expected to have a majority of directors independent of management. The independent directors are expected to organize much of the board’s work, even if the chief executive officer also serves as chairman of the board. Key committees (audit, compensation, and nominating/corporate governance) of the board are expected to be entirely independent of management. It is expected that boards will engage in critical self-evaluation of themselves and of individual members. Individual directors, in turn, are expected to devote significant amounts of time to their duties, to limit the number of directorships they accept, and to own a meaningful amount of stock in companies on whose boards they serve. Directors are ultimately responsible to the corporation’s shareholders. The most direct expression of this responsibility is the requirement that directors be elected to their positions by the shareholders. Shareholders are also asked to vote on a number of other matters regarding the role, structure and composition of the board.
Thrivent Financial for Lutherans and Thrivent Asset Management, LLC (“TFL”) classifies directors as either inside directors, affiliated outside directors, or independent outside directors. The following chart outlines the requirements for the various classifications:
DIRECTOR CATEGORIZATION CHART
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Inside Director: | ☐ | employee of the company or one of its affiliates | ||
☐ | director named in the Summary Compensation Table (excluding former interim officer) | |||
☐ | beneficial ownership of more than 50% of the company’s voting power (this may be aggregated if voting power is distributed among more than one member of a defined group; e.g. members of a family beneficially own less than 50% individually, but combined own more than 50%) | |||
Affiliated Outside Director: | ☐ | board attestation that an outside director is not independent | ||
☐ | former employee of company or its affiliates | |||
☐ | relative of current or former employee of company or its affiliates | |||
☐ | provided professional services to company or its affiliates or to its officers either currently or within the past year* | |||
☐ | has any material transactional relationship with company or its affiliates excluding investments in the company through a private placement* | |||
☐ | interlocking relationships as defined by the SEC involving members of the board of directors of its Compensation Committee | |||
☐ | founder of a company but not currently an employee | |||
☐ | employed by a significant customer or supplier* | |||
☐ | employed by a charitable or non-profit organization that received grants or endowments from the company or its affiliates* | |||
☐ | any material relationship with the company | |||
Independent Outside Director: | ☐ | no connection to company other than board seat | ||
☐ | even if a director has served on the board for over ten years, he/she is still considered to be independent; however, the analysis will make note of independent and affiliated directors who have served on the board for over ten years. |
*if significant enough to be disclosed in the proxy circular
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1a. Uncontested Election of Directors
TFL will withhold support from individual nominees or entire slates if we believe that such action is in the best interests of shareholders. In addition to independence, we monitor attendance, stock ownership, conflicts of interest, and the number of boards on which a director serves.
● | Votes on individual director nominees are made on a case-by-case basis. |
● | Votes should be withheld from directors who: |
● | attend less than 75 percent of the board and committee meetings without a valid excuse for the absences |
● | implement or renew a dead-hand or modified dead-hand poison pill |
● | ignore a shareholder proposal that is approved by a majority of the votes outstanding |
● | ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years |
● | adopt or amend the company’s bylaws or charter in a manner that materially diminishes shareholders’ rights or that could adversely impact shareholders |
● | have failed to act on takeover offers where the majority of the shareholders have tendered their shares |
● | are inside directors and sit on the audit, compensation, or nominating committees |
● | are inside directors and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees |
● |
● | enacted egregious corporate governance policies or failed to replace management as appropriate |
● | are inside directors or affiliated outside directors and the full board is less than majority independent |
● | sit on more than five public company boards |
● | are CEOs and sit on more than two public company boards besides their own |
Vote CASE-BY-CASE on Compensation Committee members (or, in exceptional cases, the full board) and the Management Say-on-Pay proposal if the company’s previous say-on-pay proposal received the support of less than 70 percent of votes cast, taking into account:
● | The company’s response, including disclosure of engagement efforts with major institutional investors regarding the issues that contributed to the low level of support, specific actions taken to address the issues that contributed to the low level of support, other recent compensation actions taken by the company; |
● | Whether the issues raised are recurring or isolated; |
● | The company’s ownership structure; and |
● | Whether the support level was less than 50 percent, which would warrant the highest degree of responsiveness. |
1b. Contested Election of Directors
Contested elections of directors frequently occur when a board candidate or slate runs for the purpose of seeking a significant change in corporate policy or control. Competing slates will be evaluated based upon the personal qualifications of the candidates, the economic impact of the policies that they advance, and their expressed and demonstrated commitment to the interests of all shareholders.
● | Votes in a contested election of directors are evaluated on a case-by-case basis, considering the following factors: |
● | long-term financial performance of the target company relative to its industry; |
● | management’s track record; |
● | background to the contested election; |
● | nominee qualifications and any compensatory arrangements; |
● | strategic plan of dissident slate and quality of the critique against management; |
● | likelihood that the proposed goals and objectives can be achieved (both slates); and |
● | stock ownership positions |
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1c. Classified Board
Under a classified board structure only one class of directors would stand for election each year, and the directors in each class would generally serve three-year terms.
● | Vote against proposals to classify the board. |
● | Vote for proposals to declassify the board. |
1d. Shareholder Ability to Remove Directors
Shareholder ability to remove directors, with or without cause, is either prescribed by a state’s business corporation law, an individual company’s articles of incorporation, or its bylaws. Many companies have sought shareholder approval for charter or bylaw amendments that would prohibit the removal of directors except for cause, thus ensuring that directors would retain their directorship for their full-term unless found guilty of self-dealing. By requiring cause to be demonstrated through due process, management insulates the directors from removal even if a director has been performing poorly, not attending meetings, or not acting in the best interests of shareholders.
● | Vote against proposals that provide that directors may be removed only for cause. |
● | Vote for proposals to restore shareholder ability to remove directors with or without cause. |
● | Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies. |
● | Vote for proposals that permit shareholders to elect directors to fill board vacancies. |
1e. Cumulative Voting
Most corporations provide that shareholders are entitled to cast one vote for each share owned. Under a cumulative voting scheme the shareholder is permitted to have one vote per share for each director to be elected. Shareholders are permitted to apportion those votes in any manner they wish among the director candidates.
● | Vote against proposals to eliminate cumulative voting. |
● | Vote for proposals to restore or provide for cumulative voting. |
1f. Alter Size of the Board
Proposals which would allow management to increase or decrease the size of the board at its own discretion are often used by companies as a takeover defense. TFL supports management proposals to fix the size of the board at a specific number. This prevents management, when facing a proxy context, from increasing the board size without shareholder approval. By increasing the size of the board, management can make it more difficult for dissidents to gain control of the board. Fixing the size of the board also prevents a reduction in the size of the board as a strategy to oust independent directors. Fixing board size also prevents management from increasing the number of directors in order to dilute the effects of cumulative voting.
● | Vote for proposals that seek to fix the size of the board. |
● | Vote on a case-by-case basis on proposals that seek to change the size or range of the board. |
● | Vote against proposals that give management the ability to alter the size of the board without shareholder approval. |
1g. Adopt Director Term Limits
Those who support term limits argue that this requirement would bring new ideas and approaches to a board. However, we prefer to look at directors and their contributions to the board individually rather than impose a strict rule.
● | Vote with the board on proposals to limit the tenure of outside directors. |
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2. EXECUTIVE AND DIRECTOR COMPENSATION
Non-salary compensation remains one of the most sensitive and visible corporate governance issues. Although shareholders have little say about how much the CEO is paid in salary and bonus, they do have a major voice in approving stock option and incentive plans.
Stock option plans transfer significant amounts of wealth from shareholders to employees, and in particular to executives and directors. Rightly, the cost of these plans must be in line with the anticipated benefits to shareholders. Clearly, reasonable limits must be set on dilution as well as administrative authority. In addition, shareholders must consider the necessity of the various pay programs and examine the appropriateness of award types. Consequently, the pros and cons of these proposals necessitate a case-by-case evaluation.
Factors that increase the cost (or have the potential to increase the cost) of plans to shareholders include: excessive dilution; options awarded at below-market discounts; restricted stock giveaways that reward tenure rather than results; sales of shares on concessionary terms; blank-check authority for administering committees; option repricing or option replacements; accelerated vesting of awards in the event of defined changes in corporate control; stand-alone stock appreciation rights; loans or other forms of assistance; or evidence of improvident award policies.
Positive plan features that can offset costly features include: plans with modest dilution potential (i.e. appreciably below double-digit levels), bars to repricing, and related safeguards for investor interests. Also favorable are performance programs of two or more year duration; bonus schemes that pay off in non-dilutive, fully deductible cash; 401K and other thrift or profit sharing plans; and tax-favored employee stock purchase plans. In general, we believe that stock plans should afford incentives, not sure-fire, risk-free rewards.
2a. Stock-Based Incentive Plans
● | Vote case-by-case on certain equity-based compensation plans depending on a combination of certain plan features and equity grant practices, where positive factors may counterbalance negative factors, and vice versa, as evaluated using an “equity plan scorecard” (EPSC) approach with three pillars: |
Plan Cost: The total estimated cost of the company’s equity plans relative to industry/market cap peers, measured by the company’s estimated Shareholder Value Transfer (SVT) in relation to peers and considering both:
SVT based on new shares requested plus shares remaining for future grants, plus outstanding unvested/unexercised grants; and
SVT based only on new shares requested plus shares remaining for future grants.
Plan Features:
Automatic single-triggered award vesting upon a change in control (CIC);
Discretionary vesting authority;
Liberal share recycling on various award types;
Lack of minimum vesting period for grants made under the plan;
Dividends payable prior to award vesting.
Grant Practices:
The company’s three-year burn rate relative to its industry/market cap peers;
Vesting requirements in most recent CEO equity grants (3-year look-back);
The estimated duration of the plan (based on the sum of shares remaining available and the new shares requested, divided by the average annual shares granted in the prior three years);
The proportion of the CEO’s most recent equity grants/awards subject to performance conditions;
Whether the company maintains a claw-back policy;
Whether the company has established post-exercise/vesting share-holding requirements.
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● | Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall, in shareholders’ interests, or if any of the following egregious factors apply: |
Awards may vest in connection with a liberal change-of-control definition;
The plan would permit repricing or cash buyout of underwater options without shareholder approval (either by expressly permitting it – for NYSE and Nasdaq listed companies -- or by not prohibiting it when the company has a history of repricing – for non-listed companies);
The plan is a vehicle for problematic pay practices or a significant pay-for-performance disconnect under certain circumstances; or
Any other plan features are determined to have a significant negative impact on shareholder interests.
2b. Approval of Cash or Cash-and-Stock Bonus Plans
Cash bonus plans can be an important part of an executive’s overall pay package, along with stock-based plans tied to long-term total shareholder returns. Over the long term, stock prices are an excellent indicator of management performance. However, other factors, such as economic conditions and investor reaction to the stock market in general and certain industries in particular, can greatly impact the company’s stock price. As a result, a cash bonus plan can effectively reward individual performance and the achievement of business unit objectives that are independent of short-term market share price fluctuations.
● | Vote for plans where the performance measures included under the plan are appropriate, the plan is administered by a committee of independent outsiders, and the preservation of the full deductibility of all compensation paid reduces the company’s corporate tax obligation. |
2c. Say on Pay
Non-binding advisory votes on executive compensation (Say on Pay votes) are required by the SEC every one, two, or three years. In addition, a vote to determine the frequency of these votes is required every six years.
● | Vote case-by-case on advisory votes on executive compensation. With respect to companies in the Russell 3000 index, this analysis considers the following: |
1. | Peer Group Alignment: |
● | The degree of alignment between the company’s TSR rank and the CEO’s total pay rank within a peer group, as measured over a three-year period; |
● | The multiple of the CEO’s total pay relative to the peer group median. |
2. | Absolute Alignment: The absolute alignment between the trend in CEO pay and company TSR over the prior five fiscal years – i.e., the difference between the trend in annual pay changes and the trend in annualized TSR during the period. |
If the above analysis demonstrates significant unsatisfactory long-term pay-for-performance alignment or, in the case of companies outside the Russell indices, misaligned pay and performance are otherwise suggested, analyze the following qualitative factors to determine how various pay elements may work to encourage or to undermine long-term value creation and alignment with shareholder interests:
● | The ratio of performance- to time-based equity awards; |
● | The ratio of performance-based compensation to overall compensation; |
● | The completeness of disclosure and rigor of performance goals; |
● | The company’s peer group benchmarking practices; |
● | Actual results of financial/operational metrics, such as growth in revenue, profit, cash flow, etc., both absolute and relative to peers; |
● | Special circumstances related to, for example, a new CEO in the prior fiscal year or anomalous equity grant practices (e.g., biennial awards); |
● | Realizable pay compared to grant pay; and |
● | Any other factors deemed relevant. |
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● | Regarding votes to determine the frequency of executive compensation proposals, vote for annual advisory votes. |
● | For externally-managed issuers (EMIs), generally vote against the say on pay proposal when insufficient compensation disclosure precludes a reasonable assessment of pay programs and practices applicable to the EMI’s executives. |
2d. Severance Agreements/ Golden Parachutes
Golden and tin parachutes are designed to protect the employees of a corporation in the event of a change in control. With golden parachutes senior level management employees receive a pay out during a change in control at usually two to three times base salary. Increasingly companies that have golden parachute agreements for executives are extending coverage for all their employees via tin parachutes. The SEC requires disclosure of all golden parachutes arrangements in the proxy; such disclosure is not required of tin parachutes.
● | Vote case-by-case on Golden Parachute proposals, including consideration of existing change-in-control arrangements maintained with named executive officers rather than focusing primarily on new or extended arrangements. |
Features that may result in an against recommendation include one or more of the following, depending on the number, magnitude, and/or timing of issue(s):
● | Single- or modified-single-trigger cash severance; |
● | Single-trigger acceleration of unvested equity awards; |
● | Excessive cash severance (>3x base salary and bonus); |
● | Excise tax gross-ups triggered and payable (as opposed to a provision to provide excise tax gross-ups); |
● | Excessive golden parachute payments (on an absolute basis or as a percentage of transaction equity value); or |
● | Recent amendments that incorporate any problematic features (such as those above) or recent actions (such as extraordinary equity grants) that may make packages so attractive as to influence merger agreements that may not be in the best interests of shareholders; or |
● | The company’s assertion that a proposed transaction is conditioned on shareholder approval of the golden parachute advisory vote. |
Recent amendment(s) that incorporate problematic features will tend to carry more weight on the overall analysis. However, the presence of multiple legacy problematic features will also be closely scrutinized.
In cases where the golden parachute vote is incorporated into a company’s advisory vote on compensation (management say-on-pay), ISS will evaluate the say-on-pay proposal in accordance with these guidelines, which may give higher weight to that component of the overall evaluation.
2e. Employee Stock Purchase Plans
Employee stock purchase plans enable employees to become shareholders, which gives them a stake in the company’s growth. However, purchase plans are beneficial only when they are well balanced and in the best interests of all shareholders. From a shareholder’s perspective, plans with offering periods of 27 months or less are preferable. Plans with longer offering periods remove too much of the market risk and could give participants excessive discounts on their stock purchases that are not offered to other shareholders.
● | Vote for employee stock purchase plans with at least 85 percent of fair market value, an offering period of 27 months or less, and when voting power dilution is ten percent or less. |
● | Vote against employee stock purchase plans with a fair market value below 85 percent, or with an offering period of greater than 27 months, or voting power dilution of greater than ten percent. |
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2f. Employee Stock Ownership Plans (ESOPs)
● | Vote for proposals to implement an ESOP or increase authorized shares for existing ESOPs, unless the number of shares allocated to the ESOP is more than five percent of outstanding shares. |
2g. 401(k) Employee Benefit Plans
● | Vote for proposals to implement a 401(k) savings plan for employees. |
2h. Outside Director Stock Awards / Options in Lieu of Cash
These proposals seek to pay outside directors a portion of their compensation in stock rather than cash. By doing this, a director’s interest may be more closely aligned with those of shareholders.
● | Vote for proposals that seek to pay outside directors a portion of their compensation in stock. |
2i. Retirement Bonus for Non-Employee Director
● | Vote against proposals that seek to pay outside directors a retirement bonus. (Consistent with Policy 10d-10) |
2j. Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation)
● | Vote case-by-case on amendments to cash and equity incentive plans. |
Addresses administrative features only; or Seeks approval for Section 162(m) purposes only, and the plan administering committee consists entirely of independent outsiders, per ISS’ Categorization of Directors.
Note that if the company is presenting the plan to shareholders for the first time after the company’s initial public offering (IPO), or if the proposal is bundled with other material plan amendments, then the recommendation will be case-by-case (see below).
● | Vote against proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal |
Seeks approval for Section 162(m) purposes only, and the plan administering committee does not consist entirely of independent outsiders, per ISS’ Categorization of Directors.
Vote case-by-case on all other proposals to amend cash incentive plans. This includes plans presented to shareholders for the first time after the company’s IPO and/or proposals that bundle material amendment(s) other than those for Section 162(m) purposes.
● | Vote case-by-case on all other proposals to amend equity incentive plans, considering the following: |
If the proposal requests additional shares and/or the amendments may potentially increase the transfer of shareholder value to employees, the recommendation will be based on the Equity Plan Scorecard evaluation as well as an analysis of the overall impact of the amendments.
If the plan is being presented to shareholders for the first time after the company’s IPO, whether or not additional shares are being requested, the recommendation will be based on the Equity Plan Scorecard evaluation as well as an analysis of the overall impact of any amendments.
If there is no request for additional shares and the amendments are not deemed to potentially increase the transfer of shareholder value to employees, then the recommendation will be based entirely on an analysis of the overall impact of the amendments, and the EPSC evaluation will be shown for informational purposes.
● | Vote case-by-case to amend existing plans to increase shares reserved and to qualify for favorable tax treatment under the provisions of Section 162(m). |
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2k. Director and Officer Liability Protection
Management proposals typically seek shareholder approval to adopt an amendment to the company’s charter to eliminate or limit the personal liability of directors to the company and its shareholders for monetary damages for any breach of fiduciary duty to the fullest extent permitted by state law. While TFL recognizes that a company may have a more difficult time attracting and retaining directors if they are subject to personal monetary liability, TFL believes the great responsibility and authority of directors justifies holding them accountable for their actions. Each proposal addressing director liability will be evaluated consistent with this philosophy. TFL may support these proposals when the company persuasively argues that such action is necessary to attract and retain directors, but TFL may often oppose management proposals and support shareholder proposals in light of our philosophy of promoting director accountability.
● | Vote against proposals to limit or eliminate entirely directors’ and officers’ liability for monetary damages for violating the duty of care. |
2l. Director and Officer Indemnification
Indemnification is the payment by a company of the expenses of directors who become involved in litigation as a result of their service to a company. Proposals to indemnify a company’s directors differ from those to eliminate or reduce their liability because with indemnification directors may still be liable for an act or omission, but the company will bear the expense. TFL may support these proposals when the company persuasively argues that such action is necessary to attract and retain directors, but will generally oppose indemnification when it is being proposed to insulate directors from actions they have already taken.
● | Vote against indemnification proposals that would expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligations than mere carelessness. |
● | Vote for only those proposals that provide such expanded coverage in cases when a director’s or officer’s legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and (2) only if the director’s legal expenses would be covered. |
2m. Shareholder Ratification of Director Pay Programs
● | Vote case-by-case on management proposals seeking ratification of non-employee director compensation, based on the following factors: |
If the equity plan under which non-employee director grants are made is on the ballot, whether or not it warrants support; and
An assessment of the following qualitative factors:
The relative magnitude of director compensation as compared to companies of a similar profile;
The presence of problematic pay practices relating to director compensation;
Director stock ownership guidelines and holding requirements;
Equity award vesting schedules;
The mix of cash and equity-based compensation;
Meaningful limits on director compensation;
The availability of retirement benefits or perquisites; and
The quality of disclosure surrounding director compensation.
2n. Equity Plans for Non-Employee Directors
● | Vote case-by-case on compensation plans for non-employee directors, based on: |
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The total estimated cost of the company’s equity plans relative to industry/market cap peers, measured by the company’s estimated Shareholder Value Transfer (SVT) based on new shares requested plus shares remaining for future grants, plus outstanding unvested/unexercised grants;
The company’s three-year burn rate relative to its industry/market cap peers; and
The presence of any egregious plan features (such as an option repricing provision or liberal CIC vesting risk).
On occasion, director stock plans will exceed the plan cost or burn rate benchmarks when combined with employee or executive stock plans. In such cases, vote case-by-case on the plan taking into consideration the following qualitative factors:
The relative magnitude of director compensation as compared to companies of a similar profile;
The presence of problematic pay practices relating to director compensation;
Director stock ownership guidelines and holding requirements;
Equity award vesting schedules;
The mix of cash and equity-based compensation;
Meaningful limits on director compensation;
The availability of retirement benefits or perquisites; and
The quality of disclosure surrounding director compensation.
3. RATIFICATION OF AUDITORS
Annual election of the outside accountants is standard practice. While it is recognized that the company is in the best position to evaluate the competence of the outside accountants, we believe that outside accountants must ultimately be accountable to shareholders. Furthermore, audit committees have been the subject of a report released by the Blue Ribbon Commission on Improving the Effectiveness of Corporate Audit Committees in conjunction with the NYSE and the National Association of Securities Dealers. The Blue Ribbon Commission concluded that audit committees must improve their current level of oversight of independent accountants. Given the rash of accounting irregularities that were not detected by audit panels or auditors, shareholder ratification is an essential step in restoring investor confidence.
● | Vote for proposals to ratify auditors, unless an auditor has a financial interest in or association with the company, and is therefore not independent; fees for non-audit services are not more than 50 percent of the total fees paid; or there is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the company’s financial position. (Consistent with Policy 10c-3) |
4. MERGERS AND CORPORATE RESTRUCTURINGS
4a. Mergers and Acquisitions
When voting on mergers and acquisitions TFL will consider the following:
• anticipated financial and operating benefits;
• offer price (cost vs. premium);
• prospects of the combined companies;
• how the deal was negotiated;
• the opinion of the financial advisor;
• potential conflicts of interest between management’s interests and shareholders’ interests;
• changes in corporate governance and their impact on shareholder rights.
● | Votes on mergers and acquisitions are considered on a case-by-case basis. |
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4b. Voting on State Takeover Statutes
● | We review on a case-by-case basis proposals to opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freezeout provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, antigreenmail provisions, and disgorgement provisions). |
● | We generally vote for opting into stakeholder protection statutes if they provide comprehensive protections for employees and community stakeholders. We would be less supportive of takeover statutes that only serve to protect incumbent management from accountability to shareholders and which negatively influence shareholder value. |
4c. Voting on Reincorporation Proposals
● | Proposals to change a company’s state of incorporation should be examined on a case-by-case basis. Review management’s rationale for the proposal, changes to the charter/bylaws, and differences in the state laws governing the corporations. |
4d. Corporate Restructuring
● | Votes on corporate restructuring proposals, including minority squeeze-outs, leveraged buyouts, spin-offs, liquidations, and asset sales, should be considered on a case-by-case basis. |
4e. Spin-offs
● | Votes on spin-offs should be considered on a case-by-case basis depending on the tax and regulatory advantages, planned use of sale proceeds, market focus, and managerial incentives. |
4f. Asset Purchases
● | Votes on asset purchases should be made on a case-by-case basis after considering various factors such as purchase price, fairness opinion, financial and strategic benefits, how the deal was negotiated, conflicts of interest, other alternatives for the business, and noncompletion risk. |
4g. Asset Sales
● | Votes on asset sales should be made on a case-by-case basis after considering the impact on the balance sheet/working capital, potential elimination of diseconomies, anticipated financial and operating benefits, anticipated use of funds, value received for the asset, fairness opinion, how the deal was negotiated, and conflicts of interest. |
4h. Liquidations
● | Votes on liquidations should be made on a case-by-case basis after reviewing management’s efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation. |
4i. Appraisal Rights
Rights of appraisal provide shareholders who do not approve of the terms of certain corporate transactions the right to demand a judicial review in order to determine the fair value for their shares. The right of appraisal generally applies to mergers, sales of essentially all assets of the corporation, and charter amendments that may have a materially adverse effect on the rights of dissenting shareholders.
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● | Vote for proposals to restore, or provide shareholders with, rights of appraisal. |
5. PROXY CONTEST DEFENSES / TENDER OFFER DEFENSES
Corporate takeover attempts come in various guises. Usually, a would-be acquirer makes a direct offer to the board of directors of a targeted corporation. The bidder may offer to purchase the company for cash and/or securities. If the board approves the offer, a friendly transaction is completed and presented to shareholders for approval. If, however, the board of directors rejects the bid, the acquirer can make a tender offer for the shares directly to the targeted corporation’s shareholders. Such offers are referred to as hostile tender bids. Prior to 1968, tender offers were not federally regulated. In 1968, Congress enacted the Williams Act as an amendment to the 1934 Securities and Exchange Act to regulate all tender offers. The Securities and Exchange Commission has adopted regulations pursuant to the Williams Act that are intended to promote fairness and prevent fraudulent or manipulative practices. At the same time, many states have enacted statutes that are aimed at protecting incorporated or domiciled corporations from hostile takeovers. Many of these state statutes have been challenged as being unconstitutional on grounds that they violate the Williams Act and the commerce and supremacy clauses of the U.S. Constitution. Most statutes, however, have been upheld. The result is a complex set of federal and state regulation, with federal regulation designed to facilitate transactions and state laws intended to impede them.
Not wishing to wait until they are subjects of hostile takeover attempts, many corporations have adopted anti-takeover measures designed to deter unfriendly bids or buy time. The most common defenses are the shareholders rights protection plan, also known as the poison pill, and charter amendments that create barriers to acceptance of hostile bids. In the U.S., poison pills do not require shareholder approval. Shareholders must approve charter amendments, such as classified boards or supermajority vote requirements. In brief, the very existence of defensive measures can foreclose the possibility of tenders and hence, opportunities to premium prices for shareholders.
5a. Shareholder Ability to Call Special Meeting
Most state corporation statutes allow shareholders to call a special meeting when they want to take action on certain matters that arise between regularly scheduled annual meetings. Sometimes this right applies only if a shareholder or a group of shareholders own a specified percentage of shares, with 10 percent being the most common. Shareholders may lose the ability to remove directors, initiate a shareholder resolution, or respond to a beneficial offer without having to wait for the next scheduled meeting if they are unable to act at a special meeting of their own calling.
● | Vote for proposals that remove restrictions on the right of shareholders to act independently of management. |
● | Vote against proposals to restrict or prohibit shareholder ability to call special meetings. |
5b. Shareholder Ability to Act by Written Consent
Consent solicitations allow shareholders to vote on and respond to shareholder and management proposals by mail without having to act at a physical meeting. A consent card is sent by mail for shareholder approval and only requires a signature for action. Some corporate bylaws require supermajority votes for consents while at others standard annual meeting rules apply. Shareholders may lose the ability to remove directors, initiate a shareholder resolution, or respond to a beneficial offer without having to wait for the next scheduled meeting if they are unable to act at a special meeting of their own calling.
● | Vote for proposals to allow or facilitate shareholder action by written consent. |
● | Vote against proposals to restrict or prohibit shareholder ability to take action by written consent. |
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5c. Poison Pills
Poison pills are corporate-sponsored financial devices that, when triggered by potential acquirers, do one or more of the following: 1) dilute the acquirer’s equity holdings in the target company; 2) dilute the acquirer’s voting interests in the target company; or 3) dilute the acquirer’s equity holdings in the post-merger company. Poison pills generally allow shareholders to purchase shares from, or sell shares back to, the target company (flip-in pill) and/or the potential acquirer (flip-out pill) at a price far out of line with fair market value. Depending on the type of pill, the triggering event can either transfer wealth from the target company or dilute the equity holdings of current shareholders. Poison pills insulate management from the threat of a change in control and provide the target board with veto power over takeover bids. Because poison pills greatly alter the balance of power between shareholders and management, shareholders should be allowed to make their own evaluation of such plans. (Consistent with Policy 10c-2)
● | Review on a case-by-case basis management proposals to ratify a poison pill. Look for shareholder friendly features including a two to three year sunset provision, a permitted bid provision, a 20 percent or higher flip-in provision, shareholder redemption feature, and the absence of dead hand features. |
5d. Fair Price Provisions
Fair price provisions were originally designed to specifically defend against the most coercive of takeover devises, the two-tiered, front-end loaded tender offer. In such a hostile takeover, the bidder offers cash for enough shares to gain control of the target. At the same time the acquirer states that once control has been obtained, the target’s remaining shares will be purchased with cash, cash and securities or only securities. Since the payment offered for the remaining stock is, by design less valuable than the original offer for the controlling shares, shareholders are forced to sell out early to maximize their value. Standard fair price provisions require that, absent board or shareholder approval of the acquisition, the bidder must pay the remaining shareholders the same price for their shares that brought control.
● | Vote for fair price proposals, as long as the shareholder vote requirement embedded in the provision is no more than a majority of disinterested shares. |
5e. Greenmail
Greenmail payments are targeted share repurchases by management of company stock from individuals or groups seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium over the market value of shares, the practice discriminates against most shareholders. This transferred cash, absent the greenmail payment, could be put to much better use for reinvestment in the company, payment of dividends, or to fund a public share repurchase program.
● | Vote for proposals to adopt antigreenmail charter or bylaw amendments or otherwise restrict a company’s ability to make greenmail payments. |
● | Review on a case-by-case basis antigreenmail proposals when they are bundled with other charter or bylaw amendments. |
5f. Unequal Voting Rights
Incumbent managers use unequal voting rights with the voting rights of their common shares superior to other shareholders in order to concentrate their power and insulate themselves from the wishes of the majority of shareholders. Dual class exchange offers involve a transfer of voting rights from one group of shareholders to another group of shareholders typically through the payment of a preferential dividend. A dual class recapitalization also establishes two classes of common stock with unequal voting rights, but initially involves an equal distribution of preferential and inferior voting shares to current shareholders.
● | Vote against proposals to create a new class of common stock with superior voting rights. |
● | Vote against proposals at companies with dual class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights. |
● | Vote for proposals to create a new class of nonvoting or subvoting common stock if it is intended for financing purposes with minimal or no dilution to current shareholders and not designed to preserve the voting power of an insider or significant shareholder. |
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5g. Supermajority Shareholder Vote Requirement to Amend Charter or Bylaws
Supermajority provisions violate the principle that a simple majority of voting shares should be all that is necessary to effect change regarding a company.
● | Vote for proposals to lower supermajority shareholder vote requirements for charter and bylaw amendments. |
● | Vote against proposals to require a supermajority shareholder vote to approve charter and bylaw amendments. |
5h. Supermajority Shareholder Vote Requirement to Approve Mergers
Supermajority provisions violate the principle that a simple majority of voting shares should be all that is necessary to effect change regarding a company.
● | Vote for proposals to lower supermajority shareholder vote requirements for mergers and other significant business combinations. |
● | Vote against proposals to require a supermajority shareholder vote to approve mergers and other significant business combinations. |
6. CAPITAL STRUCTURE
The equity in a corporate enterprise (that is, the residual value of the company’s assets after the payment of all debts) belongs to the shareholders. Equity securities may be employed, or manipulated, in a manner that will ultimately enhance or detract from shareholder value. As such, certain actions undertaken by management in relation to a company’s capital structure can be of considerable significance to shareholders. Changes in capitalization usually require shareholder approval or ratification.
6a. Common Stock Authorization
State statutes and stock exchanges require shareholder approval for increases in the number of common shares. Corporations increase their supply of common stock for a variety of ordinary business purposes: raising new capital, funding stock compensation programs, business acquisitions, and implementation of stock splits or payment of stock dividends.
Proposals to increase authorized common stock are evaluated on a case-by-case basis, taking into account the size of the increase, the company’s need for additional shares, and the company’s performance as compared with their industry peers. A company’s need for additional shares is gauged by measuring shares outstanding and reserved as a percentage of the total number of shares currently authorized for issuance. For industry peer comparisons, TFL relies on data compiled by ISS on common stock authorization proposals for companies comprising 98 percent of the investable U.S. equity market. Companies are classified into one of 11 peer groups and each company’s performance is measured on the basis of three-year total shareholder returns.
TFL evaluates on a case-by-case basis on proposals when the company intends to use the additional stock to implement a poison pill or other takeover defense.
● | Review on a case-by-case basis proposals to increase the number of shares of common stock authorized for issue. |
● | Vote against proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan (poison pill). |
● | Vote for proposals to approve increases beyond the allowable increase when a company’s shares are in danger of being delisted or if a company’s ability to continue to operate as a going concern is uncertain. |
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6b. Stock Distributions: Splits and Dividends
Generally vote for management proposals to increase common share authorization for stock split or stock dividend, provided that the effective increase in authorized shares is equal to or is less than the allowable increase calculated in with Common Stock Authorization policy.
6c. Reverse Stock Splits
Reverse splits exchange multiple shares for a lesser amount to increase share price. Increasing share price is sometimes necessary to restore a company’s share price to a level that will allow it to be traded on the national stock exchanges. In addition, some brokerage houses have a policy of not monitoring or investing in very low priced shares. Reverse stock splits help maintain stock liquidity.
● | Vote case-by-case on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue. |
● | Vote for proposals to implement a reverse stock split when the number of shares will be proportionately reduced. |
● | Vote for proposals to implement a reverse stock split to avoid delisting. |
6d. Blank Check Preferred Authorization
Preferred stock is an equity security, which has certain features similar to debt instruments, such as fixed dividend payments, seniority of claims to common stock, and in most cases no voting rights. The terms of blank check preferred stock give the board of directors the power to issue shares of preferred stock at their discretion - with voting rights, conversion, distribution and other rights to be determined by the board at time of issue. Blank check preferred stock can be used for sound corporate purposes, but could be used as a devise to thwart hostile takeovers without shareholder approval.
● | Vote for proposals to create blank check preferred stock in cases when the company expressly states that the stock will not be used as a takeover defense or carry superior voting rights. |
● | Vote against proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights. |
● | Vote against proposals to increase the number of authorized blank check preferred shares. If the company does not have any preferred shares outstanding we will vote against the requested increase. |
● | Vote case-by-case on proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a company’s industry and performance in terms of shareholder returns. |
● | Vote for requests to require shareholder approval for blank check authorizations. |
6e. Adjustments to Par Value of Common Stock
Stock that has a fixed per share value that is on its certificate is called par value stock. The purpose of par value stock is to establish the maximum responsibility of a stockholder in the event that a corporation becomes insolvent. Proposals to reduce par value come from certain state level requirements for regulatory industries such as banks, and other legal requirements relating to the payment of dividends.
● | Vote for management proposals to reduce or eliminate the par value of common stock. |
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6f. Preemptive Rights
Preemptive rights permit shareholders to share proportionately in any new issues of stock of the same class. These rights guarantee existing shareholders the first opportunity to purchase shares of new issues of stock in the same class as their own and in the same proportion. The absence of these rights could cause stockholders’ interest in a company to be reduced by the sale of additional shares without their knowledge and at prices unfavorable to them. Preemptive rights, however, can make it difficult for corporations to issue large blocks of stock for general corporate purposes. Both corporations and shareholders benefit when corporations are able to arrange issues without preemptive rights that do not result in a substantial transfer of control.
● | Review on a case-by-case basis proposals to create or abolish preemptive rights. In evaluating proposals on preemptive rights, we look at the size of a company and the characteristics of its shareholder base. |
6g. Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap Plans
● | Review on a case-by-case basis proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan, taking into consideration dilution to existing shareholders’ position, terms of the offer, financial issues, management’s efforts to pursue other alternatives, control issues and conflicts of interest. |
● | Vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. |
6h. Share Repurchase Programs
● | Vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms. |
7. MISCELLANEOUS GOVERNANCE PROVISIONS
7a. Confidential Voting
Confidential voting, or voting by secret ballot, is one of the key structural issues in the proxy system. It ensures that all votes are based on the merits of proposals and cast in the best interests of pension plan beneficiaries. In a confidential voting system, only vote tabulators and inspectors of election may examine individual proxies and ballots; management and shareholders are given only vote totals. In an open voting system, management can determine who has voted against its nominees or proposals and then resolicit those votes before the final vote count. As a result, shareholders can be pressured to vote with management at companies with which they maintain, or would like to establish, a business relationship. Confidential voting also protects employee shareholders from retaliation. Shares held by employee stock ownership plans, for example, are important votes that are typically voted by employees.
● | Vote for proposals to adopt confidential voting. |
7b. Bundled Proposals
● | Review on a case-by-case basis bundled or “conditioned” proxy proposals. In the case of items that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances where the joint effect of the conditioned items is not in shareholders’ best interests, vote against the proposals. If the combined effect is positive, support such proposals. |
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7c. Adjourn Meeting
Companies may ask shareholders to adjourn a meeting in order to solicit more votes. Generally, shareholders already have enough information to make their vote decisions. Once their votes have been cast, there is no justification for spending more money to continue pressing shareholders for more votes.
● | Vote against proposals to adjourn the meeting absent compelling reasons to support the proposal. |
● | Vote for proposals to adjourn the meeting when supporting a company merger proposal. |
7d. Changing Corporate Name
Proposals to change a company’s name are generally routine matters. Generally, the name change reflects a change in corporate direction or the result of a merger agreement.
● | Vote for changing the corporate name. |
7e. Amend Quorum Requirements
● | Vote against proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding unless there are compelling reasons to support the proposal. |
7f. Amend Bylaws
● | Vote against proposals giving the board exclusive authority to amend the bylaws. |
● | Vote for proposals giving the board the ability to amend the bylaws in addition to shareholders. |
● | Vote for bylaw or charter changes that are of a housekeeping nature (updates or corrections). |
7g. Other Business
Other business proposals are routine items to allow shareholders to raise other issues and discuss them at the meeting. Only issues that may be legally discussed at meetings may be raised under this authority. However, shareholders cannot know the content of these issues so they are generally not supported.
● | Vote against other business proposals. |
8. MUTUAL FUND PROXIES
8a. Election of Trustees
Votes on trustee nominees are made on a case-by-case basis, taking the following into consideration:
1) | Board structure |
2) | Director independence and qualifications |
3) | Compensation of directors within the fund and family of funds |
4) | Attendance |
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8b. Investment Advisory Agreement
An investment advisory agreement is an agreement between a mutual fund and its financial advisor under which the financial advisor provides investment advice to the fund in return for a fee based on the fund’s net asset size.
● | Votes on investment advisory agreements should be evaluated on a case-by-case basis. |
8c. Fundamental Investment
Fundamental investment restrictions are limitations within a fund’s articles of incorporation that limit the investment practices of the particular fund.
● | Votes on amendments to a fund’s fundamental investment restrictions should be evaluated on a case-by-case basis. |
8d. Distribution Agreements
Distribution agreements are agreements between a fund and its distributor which provide that the distributor is paid a fee to promote the sale of the fund’s shares.
● | Votes on distribution agreements should be evaluated on a case-by-case basis. |
8e. Convert Closed-End Fund to Open-End Fund
The benefits of open-ending include eliminating the discount to net asset value (NAV) at which closed-end equity fund shares often trade. Once this discount is eliminated the open-end fund is free to sell shares at any time, and this structure thus facilitates investment in, and growth of, the fund. The disadvantages arising from changing the fund’s structure include: (1) the possibility that many investors will sell out of the fund in order to realize the benefit of instantly eliminating the discount to NAV; and (2) the increased expense ratio that could result from a depleted asset base. Management fees for closed-end funds are generally lower than fees for open-end funds on a percentage basis, but with a decrease in assets, per share management costs arise.
● | Vote on a case-by-case basis on proposals to convert a closed-end fund to an open-end fund. |
8f. Mirror Voting
In the event of Thrivent Funds issuing proxies, Asset Allocation funds and portfolios shall vote their proxies in proportion to the voting instructions received from the remaining holders of shares of such funds.
9. SHAREHOLDER PROPOSALS - SOCIAL & ENVIRONMENTAL
In addition to moral and ethical considerations intrinsic to many of these proposals, TFL recognizes their potential for impact on the economic performance of the company. TFL balances these considerations carefully. On proposals which are primarily social, moral or ethical, TFL believes it is impossible to vote in a manner that would accurately reflect the views of the beneficial owners of the portfolios that it manages. As such, on these items TFL abstains. When voting on matters with apparent economic or operational impacts on the company, TFL realizes that the precise economic effect of such proposals is often unclear. Where this is the case, TFL relies on management’s assessment, and generally votes with company management.
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9A. DIVERSITY AND WORKPLACE ISSUES
9a-1. Add Women and Minorities to Board: Vote abstain.
9a-2. Report on Distribution of Stock Options by Gender and Race: Vote abstain.
9a-3. Prepare Report/Promote EEOC-Related Activities: Vote abstain.
9a-4. Report on Progress Toward Glass Ceiling Commission Recommendations: Vote abstain.
9a-5. Prohibit Discrimination on the Basis of Sexual Orientation: Vote abstain.
9a-6. Report on/Eliminate Use of Racial Stereotypes in Advertising: Vote abstain.
9B. CODES OF CONDUCT, LABOR STANDARDS & HUMAN RIGHTS
9b-1. Codes of Conduct and Vendor Standards
● | Vote abstain on proposals to implement human rights standards and workplace codes of conduct. |
● | Vote abstain on proposals calling for the implementation and reporting on ILO codes of conduct, SA 8000 Standards, or the Global Sullivan Principles. |
● | Vote abstain on proposals that call for the adoption of principles or codes of conduct relating to company investment in countries with patterns of human rights abuses (Northern Ireland, Burma, former Soviet Union, and China). |
● | Vote abstain on proposals which mandate outside, independent monitoring, which may entail sizable costs to the company. |
● | Vote abstain on proposals that seek publication of a “Code of Conduct” to the company’s foreign suppliers and licensees, requiring they satisfy all applicable standards and laws protecting employees’ wages, benefits, working conditions, freedom of association, and other rights. |
● | Vote abstain on proposals for reports outlining vendor standards compliance. |
● | Vote abstain on proposals to adopt labor standards for foreign and domestic suppliers to ensure that the company will not do business with foreign suppliers that manufacture products for sale in the U.S. using forced labor, child labor, or that fail to comply with applicable laws protecting employee’s wages and working conditions. |
9b-2. Operations in High Risk Markets
● | Vote with the board on proposals seeking reports on operations in “high risk” markets, such as terrorism-sponsoring state or politically/socially unstable region. |
9b-3. Operations in Burma/Myanmar
● | Vote with the board on proposals to adopt labor standards in connection with involvement in Burma. |
● | Vote with the board on proposals seeking reports on Burmese operations and reports on costs of continued involvement in the country. |
● | Vote with the board on proposals to pull out of Burma. |
9b-4. MacBride Principles
● | Vote with the board on proposals to report on or to implement the MacBride Principles. |
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9b-5. China Principles
● | Vote with the board on proposals to implement the China Principles. |
9b-6. Prepare Report on Maquiladoras
● | Vote with the board on proposals to prepare reports on a company’s Maquiladora operation. |
9b-7. Prepare Report on Company Activities Affecting Indigenous Peoples’ Rights
● | Vote with the board on proposals to prepare reports on a company’s impact on indigenous communities. |
9b-8. Product Sales to Repressive Regimes
● | Vote with the board on proposals requesting that companies cease product sales to repressive regimes that can be used to violate human rights. |
● | Vote with the board on proposals to report on company efforts to reduce the likelihood of product abuses in this manner. |
9b-9. Report on the Impacts of Pandemics on Company Operations
● | Vote with the board on proposals asking companies to report on the impacts of pandemics, such as HIV/AIDS, Malaria, Tuberculosis, on their business strategies. |
9b-10. Outsourcing
● | Vote with the board on proposals asking companies to report on the risks associated with outsourcing or offshoring. |
● | Vote with the board on proposals seeking greater disclosure on plant closing criteria if such information has not been provided by the company. |
9b-11. Adopt Holy Land Principles
● | Vote with the board on proposals adopting Holy Land Principles. |
9C. ENVIRONMENT AND ENERGY
9c-1. Environmental Report (General)
● | Vote with the board on reports disclosing the company’s environmental policies unless it already has well-documented environmental management systems that are available to the public. |
9c-2. Prepare Report on Global Warming/Greenhouse Gas Emissions
● | Vote with the board on proposals calling for the reduction of greenhouse gas. |
● | Vote with the board on reports on the level of greenhouse gas emissions from the company’s operations and/or products. |
● | Vote with the board on proposals requesting that companies outline their preparations to comply with standards established by Kyoto Protocol signatory markets. |
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9c-3. Invest in Clean/Renewable Energy
● | Vote with the board on proposals seeking the preparation of a report on a company’s activities related to the development of renewable energy sources. |
● | Vote with the board on proposals seeking increased investment in renewable energy sources. |
9c-4. Drilling in the Arctic National Wildlife Refuge
● | Vote with the board on proposals asking companies to prepare a feasibility report or to adopt a policy not to mine, drill, or log in environmentally sensitive areas such as ANWR. |
● | Vote with the board on proposals seeking to prohibit or reduce the sale of products manufactured from materials extracted from environmentally sensitive areas such as old growth forests. |
9c-5. Adopt/Implement CERES Principles
● | Vote with the board on proposals to study or implement the CERES principles. |
9c-6. Phase Out Chlorine-Based Chemicals
● | Vote with the board on proposals to prepare a report on the phase-out of chlorine bleaching in paper production. |
● | Vote with the board on proposals asking companies to cease or phase-out the use of chlorine bleaching. |
9c-7. Report/Reduce Toxic Emissions and Assess Community Impact
● | Vote with the board on proposals that seek to prepare a report on the company’s procedures for reducing or preventing pollution and/or the impact of the company’s pollution on the surrounding communities. |
● | Vote with the board on proposals calling on the company to establish a plan to reduce toxic emissions. |
9c-8. Land Procurement and Development
● | Vote with the board on proposals requesting that companies report on or adopt policies for land procurement and use that incorporate social and environmental factors. |
9c-9. Report on the Sustainability of Concentrated Area Feeding Operations
● | Vote with the board on proposals requesting that companies report on the sustainability and the environmental impacts of both company-owned and contract livestock operations. |
9c-10. Adopt a Comprehensive Recycling Policy
● | Vote with the board on proposals requesting the preparation of a report on the company’s recycling efforts. |
● | Vote with the board on proposals that ask companies to increase their recycling efforts or to adopt a formal recycling policy. |
9c-11. Report on the Feasibility of Removing “Harmful” Ingredients from Cosmetic Products
● | Vote with the board on proposals asking companies report on the feasibility of removing, or substituting with safer alternatives, all “harmful” ingredients used in company products. |
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9c-12. Nuclear Energy
● | Vote with the board on proposals seeking the preparation of a report on a company’s nuclear energy procedures. |
● | Vote with the board on proposals that ask the company to cease the production of nuclear power. |
9D. WEAPONS
9d-1. Handgun Safety Initiatives
● | Vote with the board on reports on a company’s efforts to promote handgun safety. |
9d-2. Landmine Production
● | Vote with the board on proposals asking a company to renounce future involvement in antipersonnel landmine and cluster bomb production. |
9d-3. Prepare Report on Foreign Military Sales
● | Vote with the board on reports on foreign military sales or offsets. |
● | Vote with the board on proposals that call for outright restrictions on foreign military sales. |
9d-4. Spaced-Based Weaponization
● | Vote with the board on reports on a company’s involvement in spaced-based weaponization. |
9E. CONSUMER ISSUES, PUBLIC SAFETY & MISCELLANEOUS
9e-1. Phase-out or Label Products Containing Genetically Modified Organisms (“GMOS”)
● | Vote with the board on proposals to voluntarily label genetically modified ingredients in the company’s products, or alternatively to do interim labeling and eventual elimination of GMOs |
● | Vote with the board on proposals asking for a report on the feasibility of labeling products containing GMOs. |
● | Vote with the board on proposals to completely phase out GMOS from the company’s products. |
● | Vote with the board on reports outlining the steps necessary to eliminate GMOs from the company’s products. |
● | Vote with the board on proposals seeking a report on the health effects of GMOs. |
9e-2. Tobacco-related Proposals
● | Vote with the board on proposals seeking to limit the sale of tobacco products to children. |
● | Vote with the board on proposals asking producers of tobacco product components (such as filters, adhesives, flavorings, and paper products) to halt sales to tobacco companies. |
● | Vote with the board on proposals that ask restaurants to adopt smoke-free policies. |
● | Vote with the board on proposals seeking a report on a tobacco company’s advertising approach. |
● | Vote with the board on proposals prohibiting investment in tobacco equities. |
● | Vote with the board on proposals asking producers of cigarette components for a report outlining the risks and potential liabilities of the production of these components. |
● | Vote with the board on proposals calling for tobacco companies to cease the production of tobacco products. |
● | Vote with the board on proposals seeking stronger product warning. |
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9e-3. Adopt Policy/Report on Predatory Lending Practices
● | Vote with the board on reports on the company’s procedures for preventing predatory lending, including the establishment of a board committee for oversight. |
9e-4. Disclosure on Credit in Developing Countries (LDCs)
● | Vote with the board on proposals asking for disclosure on lending practices in developing countries. |
9e-5. Forgive LDC Debt
● | Vote with the board on proposals asking banks to forgive loans outright. |
● | Vote with the board on proposals asking for loan forgiveness at banks that have failed to make reasonable provisions for non-performing loans. |
● | Vote with the board on proposals to restructure and extend the terms of non-performing loans. |
9e-6. Adopt Policy/Report on Drug Pricing
● | Vote with the board on proposals to prepare a report on drug pricing or access to medicine policies. |
● | Vote with the board on proposals to adopt a formal policy on drug pricing. |
● | Vote with the board on reports on the financial and legal impact of prescription drug re-importation policies. |
● | Vote with the board on proposals requesting that companies adopt policies to encourage or constrain prescription drug re-importation. |
9e-7. Animal Testing and Welfare
● | Vote with the board on proposals for reports on a company’s animal welfare standards or animal welfare-related risks. |
● | Vote with the board on proposals that seek to limit unnecessary animal testing where alternative testing methods are feasible or not required by law. |
● | Vote with the board on proposals asking companies to report on the operational costs and liabilities associated with selling animals. |
9e-8. Control over Charitable Contributions
● | Vote with the board on proposals giving criteria or to require shareholder ratification of grants. |
9e-9. Disclosure on Prior Government Service
Shareholders have asked companies to disclose the identity of any senior executive and/or other high-level employee, consultant, lobbyist, attorney, or investment banker who has served in government. Although the movement of individuals between government and the private sector may benefit both, the potential also exists for conflicts of interest, especially in industries that have extensive dealings with government agencies.
● | Vote with the board on proposals calling for the disclosure of prior government service of the company’s key executives. |
9e-10. Lobbying Expenditures/Initiatives
🌑 | Vote with the board on proposals requesting information on a company’s lobbying initiatives. |
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10. SHAREHOLDER PROPOSALS - MISCELLANEOUS
10A. SHAREHOLDER MEETINGS/HOUSEKEEPING ISSUES
10a-1. Rotate Annual Meeting: The argument in favor of rotating annual meeting location sites is to enable a greater number of shareholders to attend and participate in the meeting.
● | Vote on a case-by-case basis to rotate the annual meeting of shareholders or change the date and time of the meeting. |
10B. BOARD-RELATED ISSUES
10b-1. Separate Chairman and CEO: Shareholder proposal that would require the positions of chairman and CEO to be held by different persons.
● | Vote for shareholder proposals requiring that the positions of chairman and CEO be held by different persons. |
10b-2. Majority of Independent Directors: Independent outside directors can bring objectivity and a fresh perspective to the issues facing the company. Outside directors bring new contacts and skills to their boards. The conflict of interest problem boards face in designing executive compensation policies, and responding to takeover offers, is much less severe for outsiders than it is for executive officers. Perhaps the most important role of outside directors is to objectively evaluate the performance of top management. That same objectivity cannot be exercised by directors inside the company because they may be too close to the problem to see it clearly, they may be part of the problem, or they may see it but be reluctant to “blow the whistle” for fear of losing their directorship or their job.
● | Vote for shareholder proposals asking that a majority of directors be independent. |
10b-3. Majority Elections
● | Vote for shareholder proposals calling for directors to be elected with an affirmative majority of votes cast provided binding proposals include a carve-out for plurality voting when there are more nominees than board seats. |
10b-4. Independent Committees: Most corporate governance experts agree that the key board committees (audit, compensation, and nominating/corporate governance) of a corporation should include only independent directors. The independence of key committees has been encouraged by regulation. For example, the NYSE requires that the audit committees of listed companies to be entirely “independent.” SEC proxy rules require disclosure of any members of a compensation committee who have significant business relationships with the company or interlocking directorships.
● | Vote for shareholder proposals that request that the board audit, compensation and/or nominating committees include independent directors exclusively. |
10b-5. Implement Director Share Ownership Requirement: Corporate directors should own some amount of stock of the companies on which they serve as board members. It is a simple way to align the interests of directors and shareholders. However, many highly qualified individuals such as academics and clergy might not be able to meet this requirement. A preferred solution is to look at the board nominees individually and take stock ownership into consideration when voting on candidates. Vote with the board on shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director or to remain on the board.
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● | Vote with the board on shareholder proposals that seek to establish mandatory share ownership requirements for directors. |
● | Vote case-by-case on shareholder proposals that ask directors to accept a certain percentage of their annual retainer in the form of stock. |
● | Vote case-by-case on shareholder proposals asking companies to limit director compensation to a stock-only plan. |
10C. SHAREHOLDER RIGHTS & BOARD ACCOUNTABILITY
10c-1. Remove Antitakeover Provisions: There are numerous antitakeover mechanisms available to corporations that can make takeovers prohibitively expensive for a bidder or at least guarantee that all shareholders are treated equally. The debate over antitakeover devices centers on whether these devices enhance or detract from shareholder value. One theory argues that a company’s board, when armed with these takeover protections, may use them as negotiating tools to obtain a higher premium for shareholders. The opposing view maintains that management afforded such protection are more likely to become entrenched than to actively pursue the best interests of shareholders. Such takeover defenses also serve as obstacles to the normal functioning of the marketplace which, when operating efficiently, should replace incapable and poorly performing management.
● | Vote for shareholder proposals that seek to remove antitakeover provisions. |
10c-2. Submit Poison Pill (Shareholder Rights Plan) to a Vote: Shareholder rights plans, typically known as poison pills, take the form of rights or warrants issued to shareholders and are triggered when a potential acquiring stockholder reaches a certain threshold of ownership. Generally, poison pills insulate management from the threat of a change in control and provide the target board with veto power over takeover bids. Because poison pills greatly alter the balance of power between shareholders and management, shareholders should be allowed to make their own evaluation of such plans. (Consistent with Policy 5c)
● | Vote for shareholder proposals requesting that the company submit its poison pill to a shareholder vote. |
● | Vote case-by-case on shareholder proposals to redeem a company’s poison pill. |
● | Vote case-by-case on shareholder proposals to amend an existing shareholder rights plan. |
10c-3. Elect Auditors/ Ensure Auditor Independence: These shareholder proposals request that the board allow shareholders to elect the company’s auditor at each annual meeting. Annual election of the outside accountants is standard practice. While it is recognized that the company is in the best position to evaluate the competence of the outside accountants, we believe that outside accountants must ultimately be accountable to shareholders. (Consistent with Policy 3)
● | Vote for shareholder proposals that would allow shareholders to elect the auditors. |
● | Vote case-by-case on shareholder proposals asking companies to prohibit or limit the auditors from engaging in non-audit services. |
● | Vote case-by-case on shareholder proposals asking for audit firm rotation, taking into account the tenure of the audit firm, the length of rotation specified in the proposal, any significant audit-related issues at the company, the number of Audit Committee meetings held each year, the number of financial experts serving on the committee, and whether the company has a periodic renewal process where the auditor is evaluated for both audit quality and competitive price. |
10c-4. Non-Partisanship/ Political Contributions: Proponents are concerned about the amount of money given to political action committees (PACs). They argue that companies spending scarce resources on expensive lobbying efforts and donating to PACs would be better off spending that money on new procedures that will better position them to deal with the coming regulations. An example would be a company spending money on R&D to reduce its air emissions instead of funding a campaign to change certain provisions in the Clean Air Act.
● | Vote with the board on proposals calling for a company to disclose its political contributions. |
● | Vote with the board on proposals calling for a company to refrain from making any political contributions. |
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10D. COMPENSATION ISSUES
10d-1. Executive and Director Pay
● | Vote with the board on shareholder proposals seeking additional disclosure on executive and director pay information. |
● | Vote with the board on all other shareholder proposals regarding executive and director pay. |
10d-2. Prohibit/Require Shareholder Approval for Option Repricing: Repricing involves the reduction of the original exercise price of a stock option after the fall in share price. TFL does not support repricing since it undermines the incentive purpose of the plan. The use of options as incentive means that employees must bear the same risks as shareholders in holding these options. Shareholder resolutions calling on companies to abandon the practice of repricing or to submit repricing to a shareholder vote will be supported.
● | Vote for shareholder proposals seeking to limit option repricing. |
● | Vote for shareholder proposals asking the company to have option repricings submitted for shareholder ratification. |
10d-3. Severance Agreements/ Golden Parachutes: Golden and tin parachutes are designed to protect the employees of a corporation in the event of a change in control. With golden parachutes senior level management employees receive a pay out during a change in control at usually two to three times base salary. Increasingly companies that have golden parachute agreements for executives are extending coverage for all their employees via tin parachutes. The SEC requires disclosure of all golden parachutes arrangements in the proxy; such disclosure is not required of tin parachutes.
● | Vote for shareholder proposals to have golden and tin parachutes submitted for shareholder ratification. |
● | Vote case-by-case on proposals to ratify or cancel golden parachutes. An acceptable parachute should include the following: |
● | The triggering mechanism should be beyond the control of management |
● | The amount should not exceed three times base salary plus guaranteed benefits |
● | The change in control payments should be double-triggered, i.e., (1) after a change in control has taken place, and (2) termination of the executive as a result of the change in control |
10d-4. Cash Balance Plans
● | Vote on a case-by-case basis on shareholder proposals calling for non-discrimination in retirement benefits. |
● | Vote on a case-by-case basis on shareholder proposals asking a company to give employees the option of electing to participate in either a cash balance plan or in a defined benefit plan. |
10d-5. Performance-Based Options/Indexed Options: Performance-Based Option/Indexed Options is defined as compensating of executives at a reasonable rate and that executive compensation should be correlated to performance.
● | Vote for shareholder proposals advocating the use of performance-based stock options (indexed, premium-priced, and performance-vested options). |
10d-6. Option Expensing
● | Vote for shareholder proposals asking the company to expense stock options, unless the company has already publicly committed to expensing options by a specific date. |
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10d-7. Pension Plan Income Accounting
● | Vote for shareholder proposals to exclude pension plan income in the calculation of earnings used in determining executive bonuses/compensation. |
10d-8. Supplemental Executive Retirement Plans (SERPs)
● | Vote for shareholder proposals to requesting to put extraordinary benefits contained in SERP agreements to a shareholder vote unless the company’s executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans. |
10d-9. Link Compensation to Non-Financial Factors: Proponents of these proposals feel that social criteria should be factored into the formulas used in determining compensation packages for executives. These shareholders are looking for companies to review current compensation practices and to include social performance criteria, such as increasing investment in order to revitalize “distressed areas,” meeting environmental goals, and accounting for “poor corporate citizenship” when evaluating executive compensation. One of the companies cited by proponents as an example sets annual goals such as employee satisfaction, corporate responsibility, diversity and customer satisfaction as part of a written policy used in linking compensation with financial performance and non-financial bases for evaluation. Proponents believe that many of these factors such as poor environmental performance, workplace lawsuits, etc. are likely to have an impact on the company’s financial performance in the future if they are not addressed adequately today. As a result, shareholders believe they should be considered along with traditional financial considerations when determining executive pay.
● | Vote on a case-by-case basis for shareholder proposals calling for the preparation of a report on the feasibility of linking executive pay to nonfinancial factors, such as social and environmental goals. |
● | Vote on a case-by-case basis for shareholder proposals seeking to link executive pay to non-financial factors. |
10d-10. Eliminate Outside Directors’ Retirement Benefits
● | Vote for shareholder proposals seeking to eliminate outside directors’ retirement benefits. (Consistent with Policy 2i) |
10d-11. Hold Equity Past Retirement or for a Significant Period of Time
● | Vote on a case-by-case basis for shareholder proposals asking companies to adopt policies requiring senior executive officers to retain a portion of net shares acquired through compensation plans, taking into account: |
● | The percentage/ratio of net shares required to be retained |
● | The time period required to retain the shares |
● | Whether the company has equity retention, holding period, and/or stock ownership requirements in place and the robustness of such requirements |
● | Whether the company has any other policies aimed at mitigating risk taking by executives |
● | Executives’ actual stock ownership and the degree to which it meets or exceeds the proponent’s suggested holding period/retention ratio or the company’s existing requirements |
● | Problematic pay practices, current and past, which may demonstrate a short-term versus long-term focus |
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10E. STRATEGIC ISSUES
10e-1. Maximize shareholder value
Shareholder value maximization proposals that suggest exploring alternatives, including a sale or merger, should be considered on a case-by-case basis. While under normal circumstances the decision to buy, sell, or engage in a merger is best left in the hands of management and the board, it is recognized that certain situations may justify the adoption of such proposals, such as a prolonged period of poor or sluggish performance with no turnaround in sight. Support of such proposals is further justified in cases where the board and management have become entrenched. Adoption of poison pills, golden parachutes, and other antitakeover provisions in the face of an attractive offer may be signs of entrenchment.
● | Vote on a case-by-case basis for proposals that request the company to maximize shareholder value by hiring a financial advisor to explore strategic alternatives, selling the company, or liquidating the company and distributing the proceeds to shareholders. |
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PART C
OTHER INFORMATION
Item 15. | Indemnification |
Section 4.01 of Registrant’s First Amended and Restated Bylaws, filed as an Exhibit to this Registration Statement, contains provisions requiring the indemnification by Registrant of its directors, officers and certain others under certain conditions. If so required, Registrant shall indemnify its trustees, officers or employees for such expenses whether or not there is an adjudication of liability, if, pursuant to Investment Company Act Release 11330, a determination is made that such person is entitled to indemnification by: (i) final decision of the court before which the proceeding was brought; or (ii) in the absence of such a decision, a reasonable determination, based on factual review, that the person is entitled to indemnification is made by: (a) a majority vote of disinterested, independent trustees; or (b) independent legal counsel in a written opinion.
Advancement of expenses incurred in defending such actions may be made pursuant to Release 11330, provided that the person undertakes to repay the advance unless it is ultimately determined that such person is entitled to indemnification and one or more of the following conditions is met: (1) the person provides security for the undertaking; (2) Registrant is insured against losses arising by reason of any lawful advances; or (3) a majority of disinterested non-party trustees or independent legal counsel in a written opinion determines, based on review of readily available facts, that there is reason to believe the person ultimately will be found entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant, pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director or officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person of Registrant in connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether or not such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Registrant and its officers, employees, and agents are insured under the fidelity bond required by Rule 17g-1 of the Investment Company Act of 1940.
Item 16. | Exhibits |
1.1 | Articles of Incorporation of the Registrant (1) | |
1.2 | Amendment to Articles of Incorporation increasing authorized shares (3) | |
2. | Restated Bylaws of the Registrant (8) | |
3. | Not applicable | |
4. | Form of Agreement and Plan of Reorganization (**) | |
5. | Not Applicable | |
6.1 | Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (2) | |
6.2 | Amendment No. 4 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (5) | |
6.3 | Amendment No. 5 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (7) | |
6.4 | Amendment No. 6 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (7) | |
6.5 | Amendment No. 7 to Investment Advisory Agreement between the Registrant and Thrivent Financial for |
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Lutherans (9) | ||
6.6 | Amendment No. 8 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (10) | |
6.7 | Amendment No. 9 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (11) | |
6.8 | Amendment No. 10 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (11) | |
6.9 | Amendment No. 11 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (11) | |
6.10 | Amendment No. 12 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (11) | |
6.11 | Amendment No. 13 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (12) | |
6.12 | Amendment No. 14 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (12) | |
6.13 | Amendment No. 15 to Investment Advisory Agreement between the Registrant and Thrivent Financial for Lutherans (13) | |
7. | Not applicable | |
8. | Not applicable | |
9. | Master Custodian Agreement between the Registrant and State Street Bank and Trust Company (13) | |
10. | Not Applicable | |
11. | Opinion and Consent of Counsel (*) | |
12. | Form of Opinion of Counsel as to tax matters and consequences to shareholders (+) | |
13.1 | Expense Reimbursement Letter Agreement (13) | |
13.2 | Participation Agreement among Registrant, Thrivent Financial for Lutherans and the separate accounts (4) | |
13.3 | Participation Agreement among Registrant, Thrivent Life Insurance Company and the separate accounts (4) | |
13.4 | Administrative Services Agreement, effective January 1, 2009, between Registrant and Thrivent Financial for Lutherans (6) | |
13.5 | Amendment No. 1 to Administrative Services Agreement dated August 16, 2013 (10) | |
13.6 | Amendment No. 2 to Administrative Services Agreement dated January 1, 2015 (12) | |
13.7 | Amendment No. 3 to Administrative Services Agreement dated August 21, 2015 (12) | |
13.8 | Amendment No. 4 to Administrative Services Agreement dated January 1, 2017 (12) | |
13.9 | Amendment No. 5 to Administrative Services Agreement dated April 30, 2018 (13) | |
13.10 | Agency Securities Lending Agreement between Registrant and Goldman Sachs Bank USA (13) | |
14. | Consent of Independent Registered Public Accounting Firm (*) | |
15. | Not applicable | |
16. | Powers of Attorney (*) | |
17. | Form of Proxy Card (*) |
Filed as part of the Registration Statement as noted below and incorporated herein by reference:
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* | Filed herewith |
** | Included as Appendix A to the Statement of Additional Information |
+ | To be filed by amendment |
(1) | Incorporated by reference from Post-Effective Amendment No. 22 to the registration statement of LB Series Fund, Inc., file no. 33-3677, filed April 27, 1998. |
(2) | Incorporated by reference from Post-Effective Amendment No. 27 to the registration statement of LB Series Fund, Inc., file no. 33-3677, filed April 30, 2002. |
(3) | Incorporated by reference from initial Form N-14 registration statement of LB Series Fund, Inc., file no. 333-111964, filed January 16, 2004. |
(4) | Incorporated by reference from Post-Effective Amendment No. 37 to the registration statement of Thrivent Series Fund, Inc., file no. 33-3677, filed on April 17, 2007. |
(5) | Incorporated by reference from Post-Effective Amendment No. 39 to the registration statement of Thrivent Series Fund, Inc., file no. 33-3677, filed on April 25, 2008. |
(6) | Incorporated by reference from Post-Effective Amendment No. 40 to the registration statement of Thrivent Series Fund, Inc., file no. 33-3677, filed on April 27, 2009. |
(7) | Incorporated by reference from Post-Effective Amendment No. 41 to the registration statement of Thrivent Series Fund, Inc., file no. 33-3677, filed on February 16, 2010. |
(8) | Incorporated by reference from Post-Effective Amendment No. 45 to the registration statement of Thrivent Series Fund, Inc. file no. 33-3677, filed on April 26, 2012. |
(9) | Incorporated by reference from Post-Effective Amendment No. 47 to the registration statement of Thrivent Series Fund, Inc. file no. 33-3677, filed on April 29, 2013. |
(10) | Incorporated by reference from Post-Effective Amendment No. 49 to the registration statement of Thrivent Series Fund, Inc. file no. 33-3677, filed on April 29, 2014. |
(11) | Incorporated by reference from Post-Effective Amendment No. 53 to the registration statement of Thrivent Series Fund, Inc. file no. 33-3677, filed on April 29, 2016. |
(12) | Incorporated by reference from Post-Effective Amendment No. 56 to the registration statement of Thrivent Series Fund, Inc. file no. 33-3677, filed on April 28, 2017. |
(13) | Incorporated by reference from Post-Effective Amendment No. 59 to the registration statement of Thrivent Series Fund, Inc. file no. 33-3677, filed on February 12, 2018. |
Item 17. | Undertakings |
(1) | The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act [17 CFR 230.145c], the reoffering prospectus will contain the information called for by the applicable registration form for the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(2) | The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to |
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be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. |
(3) | The undersigned registrant agrees to file, by post-effective amendment to the registration statement, an opinion of counsel supporting the tax consequences of the proposed reorganization as soon as practicable after the closing of the reorganization. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on this 29th day of March, 2018.
THRIVENT SERIES FUND, INC.
|
/s/ Michael W. Kremenak |
Michael W. Kremenak |
Secretary and Chief Legal Officer |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated and on this 29th day of March, 2018.
Signature | Title | |||
/s/ David S. Royal | President (Principal Executive Officer) | |||
David S. Royal | ||||
/s/ Gerard V. Vaillancourt | Treasurer (Principal Financial and Accounting Officer) | |||
Gerard V. Vaillancourt | ||||
* | Director | |||
Janice B. Case | ||||
* | Director | |||
Robert J. Chersi | ||||
* | Director | |||
Richard A. Hauser | ||||
* | Director | |||
Marc S. Joseph | ||||
* | Director | |||
Paul R. Laubscher | ||||
* | Director | |||
James A. Nussle | ||||
* | Director | |||
Verne O. Sedlacek | ||||
* | Director | |||
Constance L. Souders | ||||
* | Director | |||
Russell W. Swansen |
* | Michael W. Kremenak, by signing his name hereto, does hereby sign this document on behalf of each of the above- named Trustees and Officers of Thrivent Series Fund, Inc. pursuant to the powers of attorney duly executed by such persons and filed herewith. |
Dated: March 29, 2018 | /s/ Michael W. Kremenak | |||||
Michael W. Kremenak | ||||||
Attorney-in-Fact |
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INDEX TO EXHIBITS
11. | Opinion and Consent of Counsel |
14. | Consent of Independent Registered Public Accounting Firm |
16. | Powers of Attorney |
17. | Form of Proxy Card |