SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Frank Russell Investment Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fees paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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FRANK RUSSELL INVESTMENT COMPANY
909 A Street
Tacoma, Washington 98402
1-800-628-8510
Dear Shareholder:
Enclosed is a Notice of Special Meeting of shareholders of Frank Russell
Investment Company ("FRIC"). The Special Meeting has been called for October 3,
2003 at a.m., local time, at the offices of FRIC at 909 A Street,
Tacoma, Washington 98402. The accompanying Proxy Statement details the
proposals being presented for your consideration as shareholders of certain of
FRIC's series (each a "Fund," and, collectively, the "Funds").
Shareholders will be asked to consider the following proposals at the
Special Meeting:
1. To elect three members of the Board of Trustees of FRIC;
2. To approve a change to the fundamental investment objective of each
Fund except Russell Multi-Manager Principal Protected Fund;
3. To approve the reclassification of the investment objective of each
Fund, except Russell Multi-Manager Principal Protected Fund, from
"fundamental" to "non-fundamental"; and
4. To consider and act on any other business (none being known as of the
date of this notice) as may legally come before the Special Meeting or any
adjournment thereof.
The enclosed materials provide details of the proposals. A proxy card for
the Special Meeting is enclosed. IT IS IMPORTANT THAT YOU COMPLETE, SIGN AND
RETURN YOUR PROXY CARD, OR TAKE ADVANTAGE OF THE FACSIMILE, TELEPHONIC OR
ELECTRONIC VOTING PROCEDURES DESCRIBED IN THE PROXY CARD, AS SOON AS POSSIBLE
TO ENSURE THAT YOUR VOTE IS COUNTED AT THE SPECIAL MEETING.
Sincerely,
Karl J. Ege
Secretary
Note: You may receive more than one proxy card. PLEASE COMPLETE EACH CARD
PROVIDED so that each Fund will have the quorum needed to conduct its business.
FRANK RUSSELL INVESTMENT COMPANY
909 A Street
Tacoma, Washington 98402
-----------------
Notice of Special Meeting of Shareholders of Frank Russell Investment Company
to be held on October 3, 2003
-----------------
To the shareholders of each of Equity I Fund, Equity II Fund, Equity Q Fund,
Tax-Managed Large Cap Fund, Tax-Managed Mid & Small Cap Fund, International
Fund, Emerging Markets Fund, Fixed Income I Fund, Fixed Income III Fund, Money
Market Fund, Diversified Equity Fund, Special Growth Fund, Quantitative Equity
Fund, International Securities Fund, Real Estate Securities Fund, Diversified
Bond Fund, Short Term Bond Fund, Multistrategy Bond Fund, Tax Exempt Bond Fund,
U.S. Government Money Market Fund, Tax Free Money Market Fund, Select Growth
Fund, Select Value Fund, Equity Aggressive Strategy Fund, Aggressive Strategy
Fund, Balanced Strategy Fund, Moderate Strategy Fund, Conservative Strategy
Fund, Tax-Managed Global Equity Fund and Russell Multi-Manager Principal
Protected Fund (each a "Fund," and, collectively, the "Funds"):
NOTICE IS HEREBY GIVEN that a Special Meeting of the shareholders of Frank
Russell Investment Company ("FRIC") will be held at FRIC's offices located at
909 A Street, Tacoma, Washington, on October 3, 2003 at a.m., local
time, for the following purposes:
1. To elect three members of the Board of Trustees of FRIC;
2. To approve a change to the fundamental investment objective of each
Fund except Russell Multi-Manager Principal Protected Fund;
3. To approve the reclassification of the investment objective of each
Fund, except Russell Multi-Manager Principal Protected Fund, from
"fundamental" to "non-fundamental"; and
4. To consider and act on any other business (none being known as of the
date of this notice) as may legally come before the Special Meeting or any
adjournment thereof.
The attached Proxy Statement provides more information concerning each of
the proposed items upon which shareholders will be asked to vote.
Shareholders of record as of the close of business on July 7, 2003 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof.
By Order of the Board of Trustees,
Karl J. Ege
Secretary
Tacoma, Washington
July 8, 2003
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING!
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE
COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR
TAKE ADVANTAGE OF THE FACSIMILE, TELEPHONIC OR INTERNET VOTING PROCEDURES
DESCRIBED IN THE PROXY CARD. IF YOU DESIRE TO VOTE IN PERSON YOU MAY REVOKE
YOUR PROXY PRIOR TO THE SPECIAL MEETING.
No matter how many shares you own, your vote is important. A proxy solicitor,
D.F. King & Co., Inc. has been retained to aid in obtaining votes and in
answering questions you may have regarding the proposals. The solicitor may
call you as the meeting date approaches if you have not voted. Your prompt vote
will help reduce solicitation costs and will mean that you can avoid receiving
follow-up phone calls or mailings requesting your vote.
TABLE OF CONTENTS
Page
----
Questions and Answers About the Special Meeting and the Proxy Statement............. 2
Proposal 1: Election of Trustees to the Board of Trustees of FRIC.................. 4
Proposal 2: To change the fundamental investment objectives of certain of the Funds 11
Proposal 3: To make certain of the Funds' investment objectives non-fundamental.... 16
Other Business...................................................................... 17
Information about FRIC.............................................................. 18
Further Information................................................................. 19
List of Names and Addresses of Money Managers....................................... Appendix A
Beneficial Owners of the Funds...................................................... Appendix B
Shares Outstanding.................................................................. Appendix C
FRANK RUSSELL INVESTMENT COMPANY
909 A Street
Tacoma, Washington 98402
1-800-628-8510
-----------------
PROXY STATEMENT
-----------------
DATED July 8, 2003
FOR A SPECIAL MEETING OF SHAREHOLDERS OF
Equity I Fund
Equity II Fund
Equity Q Fund
Tax-Managed Large Cap Fund
Tax-Managed Mid & Small Cap Fund
International Fund
Emerging Markets Fund
Fixed Income I Fund
Fixed Income III Fund
Money Market Fund
Diversified Equity Fund
Special Growth Fund
Quantitative Equity Fund
International Securities Fund
Real Estate Securities Fund
Diversified Bond Fund
Short Term Bond Fund
Multistrategy Bond Fund
Tax Exempt Bond Fund
U.S. Government Money Market Fund
Tax Free Money Market Fund
Select Growth Fund
Select Value Fund
Russell Multi-Manager Principal Protected Fund
Equity Aggressive Strategy Fund
Aggressive Strategy Fund
Moderate Strategy Fund
Balanced Strategy Fund
Conservative Strategy Fund
Tax-Managed Global Equity Fund
(each a "Fund," and, collectively, the "Funds")
EACH A SERIES OF
FRANK RUSSELL INVESTMENT COMPANY ("FRIC")
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
AND THE PROXY STATEMENT
GENERAL INFORMATION ABOUT THE PROPOSALS
Q. What is the purpose of this proxy statement?
A. You are receiving these proxy materials--a booklet that includes the Proxy
Statement and one or more proxy cards--because you have the right to vote on
important proposals concerning your investment in your Fund(s).
The principal purpose of this Proxy Statement is to seek shareholder
approval of the matters identified in the table below.
Proposal Shareholders Solicited
- -------- ----------------------
1. To elect three members of the Board of Each Fund
Trustees of FRIC.
2(a) To approve changes to the fundamental Each Fund except Russell Multi-Manager
through investment objectives of the Funds. Principal Protected Fund
2(cc).
3. To approve a change in the fundamental Each Fund except Russell Multi-Manager
investment objectives of the Funds to Principal Protected Fund
make them non-fundamental.
INFORMATION ABOUT VOTING
Q. Who is asking for my vote?
A. The Board of Trustees (the "Board" or the "Trustees") of FRIC has requested
your vote on several matters in connection with the special meeting (the
"Special Meeting") of shareholders of certain of the various series of FRIC
(the "Shareholders"). The Special Meeting will be held at a.m., local
time, on October 3, 2003, at the offices of FRIC located at 909 A Street,
Tacoma, Washington. FRIC proposes to mail the Notice of Special Meeting, the
proxy card and the Proxy Statement to Shareholders of record on or about
July , 2003.
Q. Who is eligible to vote?
A. FRIC has thirty-two series, or funds, in all. This Proxy Statement relates
to the following 30 of those series (each a "Fund," and, collectively, the
"Funds"): Equity I Fund, Equity II Fund, Equity Q Fund, Tax-Managed Large
Cap Fund, Tax-Managed Mid & Small Cap Fund, International Fund, Emerging
Markets Fund, Fixed Income I Fund, Fixed Income III Fund, Money Market Fund,
Diversified Equity Fund, Special Growth Fund, Quantitative Equity Fund,
International Securities Fund, Real Estate Securities Fund, Diversified Bond
Fund, Short Term Bond Fund, Multistrategy Bond Fund, Tax Exempt Bond Fund,
U.S. Government Money Market Fund, Tax Free Money Market Fund, Select Growth
Fund, Select Value Fund, Russell Multi-Manager Principal Protected Fund,
Equity Aggressive Strategy Fund, Aggressive Strategy Fund, Moderate Strategy
Fund, Balanced Strategy Fund, Conservative Strategy Fund and Tax-Managed
Global Equity Fund. Shareholders of the two remaining series, Equity Income
Fund and Equity III Fund, will be asked to consider the election of Trustees
in a separate proxy statement.
Shareholders of record of the Funds at the close of business on July 7, 2003
(the "Record Date") are entitled to notice of and to vote at the Special
Meeting or at any adjournment of the Special Meeting on the
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proposals applicable to the Fund(s) for which they hold shares. Shareholders
of record will be entitled to one vote for each full share and a fractional
vote for each fractional share that they hold on each matter presented at
the Special Meeting.
Q. How do I vote my shares?
A. You may vote your shares in writing, by executing the enclosed proxy card(s)
and returning it in the envelope provided or by using the facsimile,
telephone or Internet voting procedures described in the proxy card. The
giving of such a proxy will not affect your right to vote in person should
you decide to attend the Special Meeting. To vote via the Internet, please
access the website listed on your proxy card(s) or noted in the enclosed
voting instructions. To vote via the Internet, you will need the "control
number" that appears on your proxy card. The Internet voting procedures are
designed to authenticate Shareholder identities, to allow Shareholders to
give their voting instructions and to confirm that Shareholders'
instructions have been recorded properly. If you vote via the Internet, you
may incur costs associated with electronic access providers and telephone
companies.
Proxy cards that are properly signed, dated and received at or prior to the
Special Meeting and proper voting instructions received via facsimile,
telephone or the Internet will be voted as specified. If you sign, date and
return the proxy card, but do not specify a vote for one or more of the
Proposals, your shares will be voted by the proxies on the Proposals for
which you have not specified a vote as follows:
. IN FAVOR of electing each of the nominees to serve on the Board of
Trustees of FRIC (Proposal 1);
. IN FAVOR of approving a change in the investment objective, currently a
fundamental investment restriction, of each Fund, except Russell
Multi-Manager Principal Protected Fund (Proposals 2(a) through 2(cc),
voted on a Fund-by-Fund basis); and
. IN FAVOR of approving a change in the fundamental investment objective of
each Fund, except Russell Multi-Manager Principal Protected Fund, to make
it non-fundamental (Proposal 3, voted on a Fund-by-Fund basis).
Q. If I send my proxy card in now as requested, can I change my vote later?
A. You may revoke your proxy at any time prior to its exercise by voting in
person at the Special Meeting or by submitting, before the meeting, written
notice of revocation, a later-dated proxy card or a later-dated vote via
facsimile, telephone or the Internet. Even if you plan to attend the Special
Meeting, we ask that you return the enclosed proxy card. This will help us
ensure that an adequate number of shares are present for the Special Meeting.
Q How do the Trustees recommend that I vote for these proposals?
A. The Trustees recommend that Shareholders vote FOR each proposal.
Q. Whom should I call for additional information about this Proxy Statement?
A. Please call D.F. King & Co., Inc., FRIC's information agent, toll-free at
1-800-628-8510.
GENERAL INFORMATION ABOUT THE FUNDS
Q. How are the Funds managed?
A. FRIC is an open-end, management investment company organized under the laws
of the Commonwealth of Massachusetts, with principal offices located at 909
A Street, Tacoma, Washington 98402.
Under Massachusetts law, each Fund is a "sub-trust" of FRIC. The management
of the business and affairs of FRIC is the responsibility of the Board. The
Board oversees the Funds' operations, including reviewing
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and approving the Funds' contracts with the Funds' investment adviser, Frank
Russell Investment Management Company ("FRIMCo") and the Funds' respective
sub-advisers ("Money Managers"). FRIC's officers are responsible for the
day-to-day management and administration of the Funds' operations. The Money
Managers are responsible for selection of individual portfolio securities
for the assets assigned to them.
FRIC has received an exemptive order from the U.S. Securities and Exchange
Commission ("SEC") which permits FRIC, with the approval of the Board, to
engage and terminate Money Managers without a shareholder vote. Appendix A
to this Proxy Statement lists the current Money Managers for the Funds. The
Money Managers will not change as a result of the Proposals that
Shareholders are being asked to consider at the Special Meeting.
THE PROPOSALS
PROPOSAL 1: TO ELECT THREE MEMBERS OF THE BOARD OF TRUSTEES
At their meeting held on May 20, 2003, the Trustees determined to present
the election of three trustees who have not been previously elected by the
Shareholders to hold office until their respective successors are elected and
qualified. FRIC currently has ten trustees, seven of whom have previously been
elected by FRIC's Shareholders. This Proposal 1 will not affect the status of
these seven Trustees. Each of these Trustees, and, if elected, each of the
nominees, will continue to hold office during the lifetime of FRIC except as
such Trustee sooner dies, retires, resigns or is removed, as provided for in
FRIC's Amended and Restated Master Trust Agreement (the "Master Trust
Agreement"). FRIC also has two Trustees Emeritus. Trustees Emeritus do not have
the power to vote on matters coming before the Board, or to direct the vote of
any Trustee, and generally are not responsible or accountable in any way for
the performance of the Board's responsibilities.
In considering the nominees for election as Trustees of FRIC, the Trustees
took into account the qualifications of each nominee and the concern for the
continued efficient conduct of FRIC's business. In particular, the Trustees
considered the requirements of the Investment Company Act of 1940, and any
amendments thereto (the "1940 Act") as they apply to the election of Trustees
generally and the nominees in particular.
FRIC does not hold regular annual meetings. The Board may call special
meetings of Shareholders for action by Shareholder vote as may be required by
the 1940 Act or required or permitted by the Master Trust Agreement and by-laws
of FRIC. In compliance with the 1940 Act, Shareholder meetings will be held to
elect Trustees whenever fewer than a majority of the Trustees holding office
have been elected by the Shareholders or, in the case of filling vacancies, to
assure that at least two-thirds of the Trustees holding office after vacancies
are filled have been elected by Shareholders.
4
The Nominees
The following information is provided for each nominee. It includes the
nominee's name, principal occupation(s) or employment during the past five
years, date of birth, address and directorships with other companies that file
reports periodically with the SEC. Each nominee is currently a Trustee of FRIC.
Ms. Weston and Mr. Connealy are not "interested persons" of FRIC as defined in
Section 2(a)(19) of the 1940 Act. Mr. Phillips is an interested person of FRIC
by virtue of his employment by Frank Russell Company, the parent of FRIMCo.
Each nominee currently oversees 37 funds in the Russell Fund complex. The
Russell Fund complex consists of FRIC and Russell Investment Funds ("RIF"). The
address for each nominee listed below is 909 A Street, Tacoma, Washington
98402-1616.
No. of
Portfolios in
Term of Principal Russell Fund Other
Position(s) Office** and Occupation(s) Complex Directorships
Name Held With Length of During the Overseen by Held by
and Age Fund Time Served Past 5 Years Trustee Trustee
------- ----------- ------------ ---------------- ------------- -------------
NOMINEES
Julie W. Weston,....... Trustee Since Retired since 37 None
Born October 2, 1943 2002 2000. 1997 to
2000, Arbitrator,
The American
Arbitration
Association
Commercial
Panel. From
1995 to 1999,
Hearing Officer,
University of
Washington
Michael J. A.
Phillips,............ Trustee Since Chairman of the 37 None
Born January 20, 2002 Board, President,
1948 CEO and
Director, Frank
Russell
Company
("FRC")
Daniel P. Connealy,.... Trustee Since 2001-2003, Vice 37 Director,
Born June 6, 1946 April President and Gold Banc
2003 Chief Financial Corporation,
Officer, Janus Inc.
Capital Group
Inc.; 1979-2001,
Audit and
Accounting
Partner,
Pricewaterhouse-
Coopers LLP
- --------
** Each Trustee serves as a Trustee during the lifetime of FRIC and until its
termination except as such Trustee sooner dies, retires, resigns or is
removed.
During the fiscal year ended October 31, 2002, there were four regular
meetings of the Board, four special meetings of the Board and one telephonic
meeting of the Board. All of the Trustees, including the nominees with respect
to meetings held after their election to the Board by the Trustees, attended at
least 75% of the meetings of the Board of Trustees held during that time.
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The Board of Trustees has established a standing Audit Committee and a
standing Nominating and Governance Committee. The Audit Committee's primary
functions are: (1) oversight of the Funds' accounting and financial reporting
policies and practices and their internal controls; (2) oversight of the
quality and objectivity of the Funds' financial statements and the independent
audit thereof; and (3) to act as liaison between the Funds' independent
auditors and the full Board. It is management's responsibility to maintain
appropriate systems for accounting and internal control and the auditor's
responsibility to plan and carry out a proper audit. Currently, the Audit
Committee members consist of Mmes. Kristianne Blake and Eleanor W. Palmer and
Messrs. Raymond P. Tennison, Jr. and Daniel P. Connealy, each of whom is an
independent Trustee. For the fiscal year ended October 31, 2002, the Audit
Committee held three meetings. FRIC's Board of Trustees has adopted and
approved a formal written charter for the Audit Committee, which sets forth the
Audit Committee's current responsibilities. The Audit Committee reviews the
maintenance of the Funds' records and the safekeeping arrangements of FRIC's
custodian, reviews both the audit and non-audit work of FRIC's independent
auditors, submits a recommendation to the Board as to the selection of
independent auditors, and pre-approves (i) all audit and non-audit services to
be rendered by the auditors for FRIC, (ii) all audit services provided to
FRIMCo, or any affiliate thereof that provides ongoing services to FRIC,
relating to the operations and financial reporting of FRIC, and (iii) all
non-audit services relating to the operations and financial reporting of FRIC,
provided to FRIMCo, or any affiliate thereof that provides ongoing services to
FRIC, by any auditors with an ongoing relationship with FRIC.
The primary functions of the Nominating and Governance Committee are to: (1)
nominate individuals who are not interested persons of FRIC for independent
Trustee membership on the Board; (2) evaluate and review the composition and
performance of the Board; (3) review Board governance procedures; (4) review
Trustee compensation; and (5) make nominations for membership on all Board
committees and review the responsibilities of each committee. The Committee
will not consider nominees recommended by Shareholders of the Funds. Currently,
the Nominating and Governance Committee members consist of Messrs. Paul E.
Anderson, William E. Baxter and Lee C. Gingrich and Ms. Julie W. Weston, each
of whom is an independent Trustee. For the fiscal year ended October 31, 2002,
the Nominating and Governance Committee held one meeting.
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Information Regarding the Other Trustees and the Officers of FRIC
Listed below are the Trustees of FRIC not named above as nominees and its
principal executive officers, including their names, ages, position(s) with
FRIC, and principal occupation or employment during the past five years. An
asterisk (*) indicates that the Trustee or officer is an "interested person" of
FRIC as defined in section 2(a)(19) of the 1940 Act. Mr. George F. Russell, Mr.
Lynn L. Anderson and Mr. Michael J.A. Phillips are the only Trustees who are
"interested persons" of FRIC as defined in section 2(a)(19) of the 1940 Act.
They are interested persons of FRIC because of their relationships with FRIMCo
or its affiliates as set forth in the table below. The address for each Trustee
and officer listed below is 909 A Street, Tacoma, Washington 98402-1616.
No. of
Portfolios in
Term of Principal Russell Fund Other
Position(s) Office** and Occupation(s) Complex Directorships
Name Held with Length of During the Overseen by Held by
and Age Fund Time Served Past 5 Years Trustee Trustee
------- ----------- ------------ ------------------------ ------------- -------------
INTERESTED TRUSTEE AND TRUSTEE EMERITUS
*George F. Russell, Jr., Trustee Since 1999 Chairman Emeritus, 37 None
Born July 3, 1932 Emeritus FRC; Chairman
and Emeritus, FRIC and RIF
Chairman
Emeritus
*Lynn L. Anderson,...... Trustee Trustee Vice Chairman, FRC; 37 Trustee,
Born April 22, 1939 and since 1987; Chairman of the Board, SSgA
Chairman Chairman of Trustee, FRIC and RIF; Funds
of the the Board CEO and Chairman of (investment
Board since 1999 the Board, Russell Fund company)
Distributors, Inc. and
FRIMCo; Trustee,
President and Chairman
of the Board, SSgA
Funds (investment
company); Trustee and
Chairman of the Board,
Frank Russell Trust
Company; Director,
Frank Russell
Investments (Ireland)
Limited and Frank
Russell Investments
(Cayman) Ltd.; Until
October, 2002, President
and CEO, FRIC and RIF
INDEPENDENT TRUSTEES AND TRUSTEE EMERITUS
Paul E. Anderson,....... Trustee Since 1984 1996 to present, 37 None
Born October 15, 1931 President, Anderson
Management Group LLC
(private investments
consulting)
Paul Anton, Ph.D.,...... Trustee Since 2003 Retired since 1997; 37 None
Born December 1, 1919 Emeritus Trustee of FRIC and RIF
until 2002
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No. of
Term of Portfolios in
Office** and Principal Russell Fund Other
Position(s) Length of Occupation(s) Complex Directorships
Name Held with Time During the Overseen by Held by
and Age Fund Served Past 5 Years Trustee Trustee
------- ----------- ------------ --------------------- ------------- ------------------
William E. Baxter,....... Trustee Since 1984 Retired since 1986 37 None
Born June 8, 1925
Kristianne Blake,........ Trustee Since 2000 President, 37 --Trustee WM Group
Born January 22, 1954 Kristianne Gates of Funds
Blake, P.S. (investment
(accounting services) company
--Director, Avista
Corporation
Lee C. Gingrich,......... Trustee Since 1984 Retired since 1995 37 None
Born October 6, 1930
Eleanor W. Palmer,....... Trustee Since 1984 Retired since 1981 37 None
Born May 5, 1926
Raymond P. Tennison, Jr., Trustee Since 2000 Currently, President, 37 None
Born December 21, 1955 Simpson
Investment
Company and
several additional
subsidiary
companies,
including Simpson
Timber Company,
Simpson Paper
Company and
Simpson Tacoma
Kraft Company
- --------
** Each Trustee serves as a Trustee during the lifetime of FRIC and until its
termination except as such Trustee sooner dies, retires, resigns or is
removed. Dr. Anton was appointed Trustee Emeritus by the Board effective
December 31, 2002 for a term not to exceed five years. Mr. Russell was
appointed Trustee Emeritus by the Board effective January 1, 1999 to serve
until his death, retirement, resignation or removal.
8
Term of Principal
Position(s) Office** and Occupation(s)
Name Held with Length of During the
and Age Fund Time Served Past 5 Years
------- ----------- ----------- -------------
OFFICERS
Leonard P. Brennan,... President and Chief Since 2002 Director, President and CEO,
Born October 11, 1959 Executive Officer FRIMCo; From 1995 to
present, Managing
Director Individual
Investor Services of
Frank Russell Company
Mark E. Swanson,...... Treasurer and Chief Since 1998 1998 to present,
Born November 26, 1963 Accounting Officer Treasurer and Chief
Accounting Officer, FRIC
and RIF; Director, Funds
Administration, FRIMCo
and Frank Russell Trust
Company; Treasurer, SSgA
Funds (investment
company); Manager, Funds
Accounting and Taxes,
Russell Fund
Distributors, Inc. From
April 1996 to August
1998, Assistant
Treasurer, FRIC. From
August 1996 to August
1998, Assistant
Treasurer, FRIC and RIF.
November 1995 to July
1998, Assistant
Secretary, SSgA Funds.
February 1997 to July
1998, Manager, Funds
Accounting and Taxes,
FRIMCo
Randall P. Lert,...... Director of Investments Since 1991 Director of Investments,
Born October 3, 1953 FRIC and RIF; Chief
Investment Officer, FRC
and Frank Russell Trust
Company; Director,
FRIMCo and Russell Fund
Distributors, Inc.
Karl J. Ege,.......... Secretary and General Since 1994 Secretary and General
Born October 8, 1941 Counsel Counsel, FRC, FRIC, RIF,
FRIMCo, Frank Russell
Trust Company, Russell
Fund Distributors, Inc.
and Frank Russell
Capital Inc.
Mark D. Amberson,..... Director of Short-Term Since 2001 Director of Short-Term
Born July 20, 1960 Investment Funds Investment Funds, FRIC,
RIF, FRIMCo and Frank
Russell Trust Company.
From 1991 to 2001,
Portfolio Manager, FRIC,
RIF, FRIMCo and Frank
Russell Trust Company
9
- --------
** The President, the Treasurer and the Secretary are elected annually by
the Trustees and hold office until the next meeting of the Trustees at which
the officers are elected and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer holds office at the pleasure of the
Trustees.
Trustee Ownership of Fund Shares
The table below sets forth the dollar range of the value of the shares of
each Fund, and the dollar range of the aggregate value of the shares of all
funds in the Russell Fund Complex, owned directly or beneficially by the
Trustees, including the nominees, as of December 31, 2002. FRIC funds that are
not owned by any Trustees are omitted from the table. The Russell Fund Complex
consists of FRIC and RIF.
EQUITY SECURITIES BENEFICIALLY OWNED BY TRUSTEES
FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2002
Aggregate Dollar Range
of Equity Securities in all
Registered Investment
Companies Overseen by
Dollar Range of Equity Trustees in Russell Fund
Trustee Securities in each Fund Complex
------- ----------------------- ---------------------------
George F. Russell, Jr... None None
Michael J. A. Phillips.. None None
Lynn L. Anderson........ None None
Paul E. Anderson........ Special Growth Fund: Over $100,000 Over $100,000
Paul Anton, Ph.D........ Real Estate Securities Fund: $10,001-$50,000 $50,001-$100,000
Emerging Markets Fund: $1-$10,000
Equity II Fund: $1-$10,000
International Fund: $1-$10,000
William E. Baxter....... Equity Q Fund: $1-$10,000 $1-$10,000
Kristianne Blake........ Equity III Fund: Over $100,000 Over $100,000
Equity Q Fund: Over $100,000
Daniel P. Connealy...... None None
Lee C. Gingrich......... None None None
Eleanor W. Palmer....... None None None
Raymond P. Tennison, Jr. None None None
Julie W. Weston......... Equity II Fund: $1-$10,000 $1-$10,000
Tax Exempt Bond Fund: $1-$10,000
Real Estate Securities Fund: $1-$10,000
10
Remuneration of Trustees
FRIC pays fees only to the independent Trustees. Compensation of officers
and Trustees who are "interested persons" of FRIC is paid by FRIMCo or its
affiliates. The following represents the compensation paid to each Trustee for
the fiscal year ended October 31, 2002. The Russell Fund Complex consists of
FRIC and RIF.
Total
Pension or Estimated Compensation
Aggregate Retirement Benefits Annual Benefits from Russell
Compensation Accrued as Part of Upon Fund Complex
Trustee from FRIC FRIC Expenses Retirement paid to Trustees
------- ------------ ------------------- --------------- ----------------
Lynn L. Anderson......... $ 0 $0 $0 $ 0
Paul E. Anderson......... $67,783 $0 $0 $82,667
Paul Anton, Ph.D.*....... $67,487 $0 $0 $78,833
William E. Baxter........ $67,487 $0 $0 $78,833
Kristianne Blake......... $69,540 $0 $0 $82,383
Daniel P. Connealy**..... $ 0 $0 $0 $ 0
Lee C. Gingrich.......... $69,497 $0 $0 $78,363
Eleanor W. Palmer........ $66,083 $0 $0 $78,363
Michael J. A. Phillips... $ 0 $0 $0 $ 0
George F. Russell, Jr.*** $ 0 $0 $0 $ 0
Raymond P. Tennison, Jr.. $66,487 $0 $0 $78,833
Julie W. Weston****...... $11,753 $0 $0 $13,667
- --------
* Dr. Anton was elected Trustee Emeritus effective December 31, 2002.
** Mr. Connealy was elected to the Board of Trustees on April 24, 2003.
*** Mr. Russell was elected Trustee Emeritus effective January 1, 1999.
**** Ms. Weston was elected to the Board of Trustees on August 19, 2002.
The Russell Fund Complex currently pays each of the independent Trustees a
retainer of $52,000 per year, $5,000 for each regular quarterly meeting
attended in person, $2,000 for each special meeting attended in person, and
$2,000 for each Joint Audit Committee meeting or Nominating and Governance
Committee meeting attended in person. The Trustees receive a $500 fee for
attending an in-person meeting by phone instead of receiving the full fee had
the member attended in person. Out of pocket expenses are also paid by the Fund
Complex. The Lead Trustee is paid a fee of $10,000 per year, and each Committee
Chair is paid a fee of $6,000 per year. The Russell Fund Complex pays each
independent Trustee Emeritus an annual retainer equal to 80% of the annual
retainer for independent Trustees in effect at the time such person is elected
Trustee Emeritus.
Required vote
The persons named on the proxy card intend, in the absence of contrary
instructions, to vote all proxies in favor of the election of the nominees. A
Shareholder may vote for or withhold authority with respect to the nominees. If
an executed proxy card is received without voting instructions, the shares will
be voted for the nominees named herein. The nominees have consented to being
named in this Proxy Statement and to serve if elected. FRIC knows of no reason
why the nominees would be unable or unwilling to serve if elected. Should the
nominees become unable or unwilling to accept nomination or election prior to
the Special Meeting, the persons named on the proxy card will exercise their
voting power to vote for such substitute person or persons as the current
Trustees of FRIC may recommend.
FRIC's Master Trust Agreement requires that the Trustees be elected by a
"plurality" vote. Therefore, the three nominees who receive the greatest number
of affirmative votes cast by the Shareholders of FRIC who are present at the
Special Meeting in person or by proxy will be declared elected, provided that
there is a sufficient number of shares represented in person or by proxy to
meet the quorum requirements set forth in FRIC's Master Trust Agreement.
11
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE
SHAREHOLDERS OF EACH FUND VOTE "FOR" THE ELECTION OF EACH OF THE THREE NOMINEES
TO SERVE ON THE BOARD OF TRUSTEES AS DESCRIBED IN PROPOSAL 1. ANY EXECUTED
UNMARKED PROXY CARDS THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
PROPOSALS 2(a)-2(cc):
APPROVAL OF A CHANGE IN THE INVESTMENT OBJECTIVES OF CERTAIN OF THE FUNDS
Pursuant to the 1940 Act, each of the Funds has adopted and operates
according to a stated investment objective. The investment policies,
restrictions, strategies and activities of each Fund are guided by, and
designed to achieve, the Fund's stated investment objective. Each Fund is
subject to an investment objective that currently is a fundamental investment
restriction, meaning that it may not be changed without Shareholder approval.
These investment objectives were established at the inception of the Funds and
reflected market conditions and circumstances at that time and the manner in
which FRIMCo then wished to conduct the Funds' investment programs. In many
cases, market conditions and circumstances have changed since the Funds'
inceptions and are expected to continue to change. In some cases, the
investment objective may make comparisons to the investment objective or
strategy of another Fund, which is itself subject to change. For example, the
investment objective of the Equity II Fund is "to maximize total return
primarily through capital appreciation and assuming a higher level of
volatility than the Equity I Fund." Further, the international portfolios'
investment objectives state that they are to "provide additional
diversification for US investors" which relates to the investors' personal
investment objectives and circumstances rather than the Funds' investments and,
therefore, may be confusing.
The proposed changes are designed to clarify the investment objectives and,
by doing so, avoid possible investor confusion, facilitate the efforts of
FRIMCo to conduct the investment programs of the Funds and reduce
administrative burdens associated with clarifying the meaning of and monitoring
compliance with the current investment objectives. In addition, clarification
of the investment objectives of the Funds may facilitate the marketing of the
Funds. In such event, Shareholders could benefit from the economies of scale
resulting from increases in the Funds' total assets and consequent decreases in
their expense ratios. The changes proposed in the investment objectives for the
affected Funds are not expected to affect materially the manner in which such
Funds are managed. For purposes of Proposal 2, references to the words "Fund"
or "Funds" apply to all Funds except Russell Multi-Manager Principal Protected
Fund.
The current and proposed objectives for the Funds
The current and proposed investment objectives for the Funds are set forth
in the chart below:
Proposal Fund Current Investment Objective Proposed Investment Objective
- -------- ---- ---------------------------- -----------------------------
2(a).. Equity To provide income and capital growth by Seeks to provide long term capital growth.
I investing principally in equity securities.
2(b).. Equity To maximize total return primarily through Seeks to provide long term capital growth.
II capital appreciation and assuming a higher
level of volatility than the Equity I Fund.
2(c).. Equity To provide a total return greater than the total Seeks to provide long term capital growth.
Q return of the US stock market (as measured
by the Russell 1000 Index over a market
cycle of four to six years) while maintaining
volatility and diversification similar to the
Russell 1000 Index.
12
Proposal Fund Current Investment Objective Proposed Investment Objective
- -------- ---- ---------------------------- -----------------------------
2(d).. Tax-Managed To provide growth on an after-tax basis Seeks to provide long term capital growth
Large Cap by investing principally in equity on an after-tax basis.
securities.
2(e).. Tax-Managed To provide capital growth on an after-tax Seeks to provide long-term capital growth
Mid & Small basis by investing principally in equity on an after-tax basis.
Cap securities of small capitalization
companies.
2(f) International To provide favorable total return and Seeks to provide long term capital
additional diversification for US growth.
investors.
2(g) Emerging To provide maximum total return Seeks to provide long term capital
Markets primarily through capital appreciation and growth.
by assuming a higher level of volatility
than is ordinarily expected from
developed market international portfolios
by investing primarily in equity
securities.
2(h) Fixed Income To provide effective diversification Seeks to provide current income and the
I against equities and a stable level of cash preservation of capital.
flow by investing in fixed-income
securities.
2(i) Fixed Income To provide maximum total return Seeks to provide current income and
III primarily through capital appreciation and capital appreciation.
by assuming a higher level of volatility
than is ordinarily expected from broad
fixed income market portfolios.
2(j) Money To maximize current income to the extent Seeks to maximize current income while
Market consistent with the preservation of capital preserving capital and liquidity.
and liquidity, and the maintenance of a
stable $1.00 per share net asset value, by
investing in short-term, high-grade money
market instruments.
2(k) Diversified To provide income and capital growth by Seeks to provide long term capital
Equity investing principally in equity securities. growth.
2(l) Special To maximize total return primarily Seeks to provide long term capital
Growth through capital appreciation and assuming growth.
a higher level of volatility than the
Diversified Equity Fund.
2(m) Quantitative To provide a total return greater than the Seeks to provide long term capital
Equity total return of the US stock market (as growth.
measured by the Russell 1000 Index over
a market cycle of four to six years) while
maintaining volatility and diversification
similar to the Russell 1000 Index.
13
Proposal Fund Current Investment Objective Proposed Investment Objective
- -------- ---- ---------------------------- -----------------------------
2(n) International To provide favorable total return and Seeks to provide long term capital
Securities additional diversification for US growth.
investors.
2(o) Real Estate To generate a high level of total return Seeks to provide current income and long
Securities through above average current income term capital growth.
while maintaining the potential for
capital appreciation.
2(p) Diversified To provide effective diversification Seeks to provide current income and the
Bond against equities and a stable level preservation of capital.
of cash flow by investing in fixed-income
securities.
2(q) Short Term The preservation of capital and the Seeks to provide current income and
Bond generation of current income preservation of capital with a focus on
consistent with preservation of short duration securities.
capital by investing primarily in
fixed-income securities with low-
volatility characteristics.
2(r) Multistrategy To provide maximum total return Seeks to provide current income and
Bond primarily through capital capital appreciation.
appreciation and by assuming a
higher level of volatility than is
ordinarily expected from broad fixed-
income market portfolios.
2(s) Tax Exempt To provide a high level of federal Seeks to provide federal tax-exempt
Bond tax-exempt current income by current income consistent with the
investing primarily in a diversified preservation of capital.
portfolio of investment grade
municipal securities.
2(t) U.S. To provide the maximum current Seeks to maximize current income
Government income that is consistent with the while preserving capital and liquidity.
Money Market preservation of capital and liquidity
and the maintenance of a stable $1.00
per share net asset value by investing
exclusively in US government
obligations.
2(u) Tax Free To provide the maximum current Seeks to provide federal tax-exempt
Money Market income exempt from federal income current income consistent with the
tax that is consistent with the preservation of capital and liquidity.
preservation of capital and liquidity,
and the maintenance of a $1.00 per
share net asset value by investing in
short-term municipal obligations.
14
Proposal Fund Current Investment Objective Proposed Investment Objective
- -------- ---- ---------------------------- -----------------------------
2(v) Tax-Managed Seeks to achieve high, long-term Seeks to provide long term capital
Global Equity Fund capital appreciation on an after-tax growth on an after-tax basis.
basis, while recognizing the
possibility of high fluctuations in
year-to-year market values.
2(w) Conservative Strategy Seeks to achieve moderate total Seeks to provide high current
Fund rate of return through low capital income and low long term capital
appreciation and reinvestment of a appreciation.
high level of current income.
2(x) Moderate Strategy Fund Seeks to achieve moderate long- Seeks to provide high current
term capital appreciation with high income and moderate long term
current income, while recognizing capital appreciation.
the possibility of moderate
fluctuations in year-to-year market
values.
2(y) Balanced Strategy Fund Seeks to achieve a moderate level Seeks to provide above average
of current income and, over time, capital appreciation and a moderate
above-average capital appreciation level of current income.
with moderate risk.
2(z) Aggressive Strategy Fund Seeks to achieve high, long-term Seeks to provide high long term
capital appreciation with low capital appreciation with low
current income, while recognizing current income.
the possibility of substantial
fluctuations in year-to-year market
values.
2(aa) Equity Aggressive Strategy Seeks to achieve high, long-term Seeks to provide high long term
Fund capital appreciation, while capital appreciation.
recognizing the possibility of high
fluctuations in year-to-year market
values.
2(bb) Select Growth Fund To provide capital appreciation. Seeks to provide long-term capital
growth.
2(cc) Select Value Fund To provide capital appreciation. Seeks to provide long term capital
growth.
Shareholders of each Fund, other than Russell Multi-Manager Principal
Protected Fund, are being asked to approve a reclassification of the Fund's
investment objectives from "fundamental" to "non-fundamental" in Proposal 3,
described below. If Shareholders approve Proposal 3, each of the amended
investment objectives that are approved pursuant to Proposals 2(a) through
2(cc) will be non-fundamental investment objectives. None of Proposals 2(a)
through 2(cc) is contingent upon approval of Proposal 3 by Shareholders of the
subject Fund or upon approval of this Proposal 2 by the other Funds. Approval
of Proposal 3 by the Shareholders of any Fund is likewise not contingent upon
approval of its corresponding Proposal 2.
15
Required vote
The approval of the amended investment objective of each Fund requires the
approval of a majority of the outstanding voting securities of that Fund. The
vote of a majority of the outstanding voting securities of a Fund means the
vote of the lesser of (a) 67% or more of the voting securities of the Fund
present at the meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by proxy; or (b) more
than 50% of the outstanding voting securities of the Fund. Shareholders of each
Fund will vote separately on their respective Proposal, as applicable. The
investment objective applicable to each Fund will be changed only if approved
by the Shareholders of that Fund.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE
SHAREHOLDERS OF EACH FUND VOTE "FOR" PROPOSALS 2(a) - 2(cc) AS APPLICABLE. ANY
EXECUTED UNMARKED PROXY CARDS THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO
VOTED.
PROPOSAL 3:
APPROVAL OF A RECLASSIFICATION OF THE INVESTMENT
OBJECTIVES OF EACH FUND FROM FUNDAMENTAL TO NON-FUNDAMENTAL
The investment objective for each Fund is a "fundamental" investment policy,
meaning that it may not be changed without Shareholder approval. The Funds'
investment objectives are not required to be fundamental, and FRIMCo has
proposed to the Board that the investment objective for each Fund, with the
exception of Russell Multi-Manager Principal Protected Fund, be reclassified
from fundamental to non-fundamental. For purposes of Proposal 3, references to
the words "Fund" or "Funds" apply to all Funds except Russell Multi-Manager
Principal Protected Fund. As a non-fundamental investment policy, each
investment objective could be changed by the Trustees without Shareholder
approval if the Trustees deem the change to be in the best interests of
Shareholders. FRIMCo has proposed these changes in order to provide additional
flexibility to conduct the investment program of each such Fund in response to
changing market conditions and circumstances consistent with applicable laws in
effect from time to time, without the expense and delay associated with
arranging for a Shareholder meeting to approve changes in the Fund's investment
objective.
The Board does not expect to use this flexibility frequently. However, the
Trustees would be in a position to change the investment objective of any such
Fund in circumstances when a change, in the Board's judgment, would be in the
best interests of the Fund's Shareholders. Such circumstances would include
changes in the securities markets generally that would render achievement of
the Fund's then current investment objective more difficult on an ongoing basis
or changes with respect to the Fund specifically. If the Board did decide to
make such a change in any non-fundamental investment objective, the Fund would
provide Shareholders with 60 days' notice before the effective date of such
change.
The current fundamental investment objectives for certain of the Funds, to
which Shareholders are being asked to approve changes, are set forth above in
Proposals 2(a) through 2(cc).
If the Shareholders of a Fund approve the proposal to reclassify its
investment objective from fundamental to non-fundamental, the Board thereafter
would be permitted to change the investment objective for such Fund, if
appropriate to do so in its judgment, without the delay and expense of the Fund
arranging for Shareholder approval. If these Funds' investment objectives
remain fundamental and the Board determined that it was in the best interests
of Shareholders to change an investment objective, each such Fund would be
required to hold a Shareholder meeting at which such change would be voted
upon, and to prepare and send a proxy statement to Shareholders seeking their
instructions as to how to vote shares at such meeting. Obtaining Shareholder
approval to change the Funds' investment objectives is likely to involve
significant delays and costs.
16
The table below summarizes the effects of reclassifying each investment
objective from fundamental to non-fundamental.
Non-Fundamental
Fundamental Investment Investment
Objective Objective
---------------------- ---------------
Who must approve changes in a Board and Shareholders Board
fundamental investment
objective?
How quickly can a change to Relatively slowly, since Relatively quickly,
the investment objective be a vote of Shareholders because the change can
made? is required be accomplished by
action of the Board
alone, provided that
Shareholders are
provided 60 days' prior
notice that their
Fund's objective is
being changed
What is the relative cost to Costly to change because Less costly to change
change an investment a Shareholder vote because a change can be
objective? requires holding a accomplished by action
meeting of Shareholders of the Board of
with additional SEC Trustees without
filing requirements and Shareholder approval
proxy solicitation
efforts
Shareholders of each Fund, other than Russell Multi-Manager Principal
Protected Fund, are being asked to approve a change of each Fund's investment
objectives in Proposal 2, described above. If Shareholders approve Proposals 2
and 3, each of the amended investment objectives that are approved pursuant to
Proposals 2(a) through 2(cc) will be non-fundamental investment objectives.
Proposal 3 is not contingent upon approval of Proposal 2 by Shareholders of the
subject Fund or upon approval of this Proposal 3 by the other Funds. Approval
of Proposal 2 by the Shareholders of any Fund is likewise not contingent upon
approval of its corresponding Proposal 3.
Required vote
The approval of the reclassification of the investment objective of each
Fund from fundamental to non-fundamental requires the approval of a majority of
the outstanding voting securities of that Fund. The vote of a majority of the
outstanding voting securities of a Fund means the vote of the lesser of (a) 67%
or more of the voting securities of the Fund present at the meeting, if the
holders of more than 50% of the outstanding voting securities of the Fund are
present or represented by proxy; or (b) more than 50% of the outstanding voting
securities of the Fund. Shareholders of each Fund will vote separately on
Proposal 3. The investment objective applicable to each Fund will be
reclassified only if approved by the Shareholders of that Fund.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE
SHAREHOLDERS OF EACH FUND VOTE "FOR" PROPOSAL 3. ANY EXECUTED UNMARKED PROXY
CARDS THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
OTHER BUSINESS
The Trustees know of no other business to be presented at the Special
Meeting other than Proposals 1 through 3, and do not intend to bring any other
matters before the Special Meeting. However, if any additional matters should
be properly presented, proxies will be voted in the discretion of the persons
named as proxies.
17
INFORMATION ABOUT FRIC
Investment Advisor, Administrator and Transfer Agent
FRIMCo provides or oversees the provision of all general management and
administration, investment advisory and portfolio management services for the
Funds and acts as transfer agent for the Funds. FRIMCo develops the investment
program for each of the Funds, selects Money Managers for the Funds (subject to
approval by the Board), allocates assets among Money Managers, monitors the
Money Managers' investment programs and results, and may exercise investment
discretion over certain assets. FRIMCo's mailing address is 909 A Street,
Tacoma, Washington 98402. Unlike most investment companies that have a single
organization that acts as both administrator and investment advisor, the Funds
divide responsibility for corporate management and investment advice between
FRIMCo and a number of different Money Managers. A list of the Money Managers
and their addresses is provided in Appendix A to this proxy statement.
Distributor
Russell Fund Distributors, Inc. (the "Distributor") serves as the
distributor of FRIC's shares. The Distributor receives no compensation from
FRIC for its services other than Rule 12b-1 compensation and shareholder
services compensation for certain classes of shares pursuant to FRIC's Rule
12b-1 Distribution Plan and Shareholder Services Plan, respectively. The
Distributor is a wholly owned subsidiary of FRIMCo and its mailing address is
909 A Street, Tacoma, WA 98402.
Custodian
FRIC's custodian is State Street Bank and Trust Company and its mailing
address is 1776 Heritage Drive, North Quincy, MA 02171.
Independent Auditors
Upon the recommendation of the Audit Committee, the Board selected the firm
of PricewaterhouseCoopers LLP ("PwC") as independent auditors of FRIC for the
fiscal year ending October 31, 2003.
Audit Fees. The aggregate fees billed by PwC for professional services
rendered for the audit of FRIC's annual financial statements for the fiscal
years ended October 31, 2001 and 2002 were $620,257 and $652,771, respectively.
Audit-Related Fees. PwC billed no aggregate fees for assurance and related
services rendered that are reasonably related to the audit of FRIC's annual
financial statements but not reported under "Audit-Fees" above for the fiscal
years ended October 31, 2001 and 2002.
Tax Fees. The aggregate fees billed by PwC for professional services
rendered for tax compliance, tax advice and tax planning for the fiscal years
ended October 31, 2001 and 2002 were $421,518 and $450,832, respectively.
All Other Fees. The aggregate fees billed by PwC for professional services
rendered for products and services other than those described above for the
fiscal years ended October 31, 2001 and 2002 were $0 and $5,250, respectively.
Substantially all of these services were rendered in connection with the
issuance of consent letters related to filings by FRIC with the Securities and
Exchange Commission.
The Audit Committee has considered whether the services described above are
compatible with PwC's independence. The Audit Committee has also considered
whether the provision of all other non-audit services rendered to FRIMCo, or an
affiliate thereof that provides ongoing services to FRIC, is compatible with
18
maintaining PwC's independence. The Audit Committee has adopted pre-approval
policies and procedures pursuant to which the engagement of any accountant is
approved. Such procedures provide that [to be completed when procedures are
completed]. The Audit Committee is informed of each such engagement in a timely
manner, and such procedures do not include delegation of the Audit Committee's
responsibilities to management.
Pre-approval has not been waived in respect of services described under
"Audit-Related Fees," "Tax Fees" or "All Other Fees" since the date on which
the aforementioned pre-approval procedures were adopted by the Audit Committee.
The aggregate non-audit fees billed by PwC for services rendered to FRIC and
to FRIMCo, or an affiliate thereof that provides ongoing services to FRIC, for
the fiscal years ended October 31, 2001 and 2002 were $664,029 and $639,307,
respectively.
Representatives of PwC are not expected to be present at the Special
Meeting, but will be given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
Massachusetts State Law Considerations
FRIC is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the Master Trust Agreement of FRIC contains an express
disclaimer of Shareholder liability for acts or obligations of FRIC and
provides for indemnification and reimbursement of expenses out of FRIC's
property for any Shareholder held personally liable for the obligations of
FRIC. The Master Trust Agreement also provides that FRIC may maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of FRIC, the Shareholders of the sub-trusts,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk that a Shareholder would incur financial loss on
account of Shareholder liability also is limited to circumstances in which both
inadequate insurance exists and FRIC itself is unable to meet its obligations.
Under Massachusetts law, FRIC is not required to hold annual meetings. In
the past, the Funds have availed themselves of these provisions of state law to
achieve cost savings by eliminating printing costs, mailing charges and other
expenses involved to hold routine annual meetings. The Funds may, however, hold
a meeting for such purposes as changing fundamental investment restrictions,
approving a new investment management agreement or any other matters which are
required to be acted on by Shareholders under the 1940 Act. In addition, a
meeting also may be called by Shareholders holding at least 10% of the shares
entitled to vote at the meeting for the purpose of voting upon the removal of
Trustees, in which case Shareholders may receive assistance in communicating
with other Shareholders as provided in Section 16(c) of the 1940 Act. FRIC is
holding the Special Meeting because of the items that must be presented for
Shareholders' consideration and approval.
FURTHER INFORMATION ABOUT VOTING AND THE SPECIAL MEETING
This Proxy Statement is provided on behalf of the Board in connection with
the Special Meeting of FRIC to be held at the offices of FRIC at 909 A Street,
Tacoma, Washington 98402, on October 3, 2003, at a.m., local time, and any
or all adjournments thereof. This Proxy Statement is first being mailed to
Shareholders on or about July , 2003. You may revoke your proxy at any
time before it is exercised by signing and forwarding a later-dated proxy card
or a later-dated vote via facsimile, telephone or the Internet, or by attending
the Special Meeting and casting your votes in person.
FRIC requests that broker-dealer firms, custodians, nominees and fiduciaries
forward proxy material to the beneficial owners of the shares held of record by
such persons. FRIC may reimburse such broker-dealer firms, custodians, nominees
and fiduciaries for their reasonable expenses incurred in connection with such
proxy
19
solicitation. The cost of soliciting these proxies will be borne by each Fund,
to the extent of its direct operational expenses, and by FRIMCo. FRIC has
engaged [insert proxy solicitor] to solicit proxies from brokers, banks, other
institutional holders and individual Shareholders for an approximate fee,
including out-of-pocket expenses, of up to $[ ].
Record Date
Shareholders of record at the close of business on the Record Date, July 7,
2003, are entitled to be present and to vote at the Special Meeting or any
adjournment of the Special Meeting. Each share of record is entitled to one
vote on each matter presented at the Special Meeting, with proportionate votes
for fractional shares.
Shares Outstanding
Appendix C sets forth the number of shares of beneficial interest of each
class of each Fund outstanding as of June, 30, 2003.
Quorum
The Master Trust Agreement provides that a quorum shall be present at a
meeting when a majority of the shares entitled to vote is present at the
meeting, but any lesser number shall be sufficient for adjournments. In the
event that a quorum is not present at the Special Meeting or sufficient votes
to approve a Proposal are not received, the persons named as proxies may
propose one or more adjournments of the Special Meeting to permit further
solicitation of proxies. A Shareholder vote may be taken on any other matter to
properly come before the Special Meeting prior to such adjournment if
sufficient votes to approve such matters have been received and such vote is
otherwise appropriate. Any adjournment of the Special Meeting will require the
affirmative vote of a majority of those shares present at the Special Meeting
or represented by proxy and voting. The persons named as proxies on the proxy
card will vote against any such adjournment those proxies required to be voted
against such Proposal. They will vote in favor of an adjournment all other
proxies that they are entitled to vote.
The costs of any such additional solicitation and of any adjourned session
will be borne by FRIC. Abstentions and broker "non-votes" (i.e., proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owner or other person entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not have
discretionary power) will be counted as shares that are present for purposes of
determining the presence of a quorum, but which have not been voted.
Abstentions and broker non-votes will not be counted in favor of, but will have
no other effect on, Proposal 1, and will have the effect of a "no" vote on all
other Proposals. Accordingly, Shareholders are urged to forward their proxy
card or voting instructions promptly.
Beneficial Owners
[As of May 31, 2003, the officers and Trustees, including the nominees, of
FRIC as a group beneficially owned less than 1% of the shares of each class of
each Fund outstanding on such date.] As of June 30, 2003, to the best of FRIC's
knowledge, no person owned beneficially more than 5% of any class of any Fund,
except as set forth in Appendix B.
Shareholder Proposals
FRIC is not required, and does not intend, to hold regular annual meetings
of Shareholders. Shareholders wishing to submit proposals for consideration for
inclusion in a proxy statement for the next meeting of Shareholders should send
their written proposals to FRIC's offices, 909 A Street, Tacoma, Washington
98402, Attn: Secretary, so they are received within a reasonable time before
any such meeting. The Trustees know of no business, other than the matters
mentioned in the Notice and described above, that is expected to come before the
20
Special Meeting. Should any other matter requiring a vote of Shareholders
arise, including any question as to an adjournment or postponement of the
Special Meeting, the persons named as proxies will vote on such matters
according to their best judgment in the interests of FRIC.
Annual and Semi-Annual Reports
The Funds' most recent audited financial statements and Annual Report, for
the fiscal year ended October 31, 2002, and the Funds' Semi-Annual Report for
the period ended April 30, 2003 have been previously mailed to Shareholders,
and are available free of charge. If you have not received one of these Reports
for the Fund(s) in which you are an investor, or would like to receive
additional copies, free of charge, please contact your financial intermediary
or contact FRIC by mailing a request to Frank Russell Investment Company, 909 A
Street, Tacoma, WA 98402, calling 1-800-787-7354, faxing 253-591-3495, or
logging onto www.russell.com.
By Order of the Trustees,
Karl J. Ege
Secretary
21
APPENDIX A
The following is a list of names and addresses of the Money Managers for
each Fund which is not a fund-of-funds. The Money Managers have no affiliations
with the Funds or the Funds' service providers other than their management of
Fund assets. These Money Managers may also serve as managers or advisers to
other investment companies unaffiliated with FRIC, other Funds in FRIC, or to
other clients of FRIMCo or of Frank Russell Company, including Frank Russell
Company's wholly-owned subsidiary, Frank Russell Trust Company.
Diversified Equity and Equity I Funds
Alliance Capital Management L.P., through its Bernstein Investment Research
and Management Unit, 1345 Avenue of the Americas, New York, NY 10105.
Barclays Global Fund Advisors, 45 Fremont Street, San Francisco, CA 94105.
Jacobs Levy Equity Management, Inc., 100 Campus Drive, P.O. Box 650, Florham
Park, NJ 07932-0650.
Marsico Capital Management, LLC, 1200 17th Street, Suite 1300, Denver, CO
80202.
MFS Institutional Advisors, Inc., 500 Boylston Street, Boston, MA 02116-3741.
Montag & Caldwell, Inc., 3455 Peachtree Road, NE, Suite 1200, Atlanta, GA
30326-3248.
Strong Capital Management, Inc., 100 Heritage Reserve, Menomonee Falls, WI
53051.
Suffolk Capital Management, LLC, 1633 Broadway, 40th Floor, New York, NY
10019.
Turner Investment Partners, Inc., 1205 Westlakes Drive, Suite 100, Berwyn,
PA 19312.
Westpeak Global Advisors, L.P., 1470 Walnut Street, Boulder, CO 80302.
Quantitative Equity and Equity Q Funds
Aronson+Johnson+Ortiz, LP, 230 South Broad Street, 20th Floor, Philadelphia,
PA 19102.
Barclays Global Fund Advisors, 45 Fremont Street, San Francisco, CA 94105.
Franklin Portfolio Associates, LLC, Two International Place, 22nd Floor,
Boston, MA 02110-4104.
Jacobs Levy Equity Management, Inc., 100 Campus Drive, P.O. Box 650, Florham
Park, NJ 07932-0650.
Tax-Managed Large Cap Fund
J.P. Morgan Investment Management Inc., 522 Fifth Ave., 13th Floor, New
York, NY 10036.
Special Growth and Equity II Funds
CapitalWorks Investment Partners, LLC, 402 West Broadway, 25th Floor, San
Diego, CA 92101.
A-1
David J. Greene and Company, LLC, 599 Lexington Avenue, New York, NY 10022.
Delphi Management, Inc., 50 Rowes Wharf, Suite 440, Boston, MA 02110.
Goldman Sachs Asset Management, 32 Old Slip, 17th Floor, New York, NY 10005.
Jacobs Levy Equity Management, Inc., 100 Campus Drive, P.O. Box 650, Florham
Park, NJ 07932-0650.
Roxbury Capital Management, LLC, 100 Wilshire Blvd., Suite 600, Santa
Monica, CA 90401.
Suffolk Capital Management, LLC, 1633 Broadway, 40th Floor, New York, NY
10019.
TimesSquare Capital Management, Inc., Four Times Square, 25th Floor, New
York, NY 10036-9998.
Tax-Managed Mid & Small Cap Fund
Geewax, Terker & Company, 414 Old Baltimore Pike, Chadds Ford, PA 19317.
Select Growth Fund
CapitalWorks Investment Partners, LLC, 402 West Broadway, 25th Floor, San
Diego, CA 92101.
Fuller & Thaler Asset Management, Inc. 411 Borel Avenue, Suite 402, San
Mateo, CA 94402.
Strong Capital Management, Inc., 100 Heritage Reserve, Menomonee Falls, WI
53051.
TCW Investment Management Co., 865 South Figueroa Street, Suite 1800, Los
Angeles, CA 90017.
Turner Investment Partners, Inc., 1205 Westlakes Drive, Suite 100, Berwyn,
PA 19312.
Select Value Fund
Iridian Asset Management LLC, 276 Post Road West, Westport, CT 06880-4704.
MFS Institutional Advisors, Inc., 500 Boylston Street, 21st Floor, Boston,
MA 02116-3741.
Systematic Financial Management, L.P., 300 W. Frank Burr Boulevard,
Glenpoint East, 7th Floor, Teaneck, NJ 07666-6703.
Real Estate Securities Fund
AEW Management and Advisors, L.P., World Trade Center East, Two Seaport
Lane, Boston, MA 02210-2021.
INVESCO Realty Advisors, a division of INVESCO Institutional (N.A.), Inc.,
One Lincoln Center, Suite 700, 5400 LBJ Freeway--LB2, Dallas, TX 75240.
RREEF America L.L.C., The Hancock Building, 875 North Michigan Avenue, 41st
Floor, Chicago IL 60611.
A-2
International Securities and International Funds
Alliance Capital Management L.P., through its Bernstein Investment Research
and Management Unit, 1345 Avenue of the Americas, New York, NY 10105.
AQR Capital Management, LLC, 900 Third Avenue, 17th Floor, New York, NY
10022.
Axiom International Investors LLC, 55 Railroad Avenue, Greenwich, CT
06830-6378.
Capital International, Inc., 11100 Santa Monica Blvd., Suite 1500, Los
Angeles, CA 90025.
Delaware International Advisers Ltd., 80 Cheapside, 3rd Floor, London EC2V
6EE England.
Fidelity Management & Research Company, 82 Devonshire Street, Boston, MA
02109.
Marvin & Palmer Associates, Inc., 1201 North Market Street, Suite 2300,
Wilmington, DE 19801-1165.
Mastholm Asset Management, LLC, 10500 N.E. 8th Street, Suite 660, Bellevue,
WA 98004.
Oechsle International Advisors, LLC, One International Place, 23rd Floor,
Boston, MA 02110.
The Boston Company Asset Management, LLC, One Boston Place, 14th Floor,
Boston, MA 02108-4402.
Emerging Markets Fund
Alliance Capital Management L.P. through its Bernstein Investment Research
and Management Unit, 1345 Avenue of the Americas, New York, NY 10105.
Arrowstreet Capital, Limited Partnership, 44 Brattle Street, 5th Floor,
Cambridge MA 02138.
Foreign & Colonial Emerging Markets Limited, Exchange House, Primrose
Street, London EC2A 2NY England.
Genesis Asset Managers Limited, 21 Knightsbridge, London SW1X 7LY England.
T. Rowe Price International, Inc., 100 East Pratt Street, Baltimore, MD
21202.
Diversified Bond and Fixed Income I Funds
Lincoln Capital Fixed Income Management Company, 200 South Wacker Drive,
Suite 2100, Chicago, IL 60606.
Pacific Investment Management Company LLC, 840 Newport Center Drive, Suite
300, P.O. Box 6430, Newport Beach, CA 92658-6430.
TimesSquare Capital Management, Inc., Four Times Square, 25th Floor, New
York, NY 10036-9998.
Multistrategy Bond and Fixed Income III Funds
Delaware Management Company, a series of Delaware Management Business Trust,
2005 Market Street, Philadelphia, PA 19103-7094.
A-3
Morgan Stanley Investments, LP, One Tower Bridge, 100 Front Street, Suite
1100,W. Conshohocken, PA 19428-2899.
Pacific Investment Management Company LLC, 840 Newport Center Drive, Suite
300, P.O. Box 6430, Newport Beach, CA 92658-6430.
TimesSquare Capital Management, Inc., Four Times Square, 25th Floor, New
York, NY 10036-9998.
Short Term Bond Fund
BlackRock Financial Management, Inc., 40 East 52nd Street, New York, NY
10022.
Merganser Capital Management L.P., One Cambridge Center, Suite 402,
Cambridge, MA 02142-1611.
Pacific Investment Management Company LLC, 840 Newport Center Drive, Suite
300, P.O. Box 6430, Newport Beach, CA 92658-6430.
STW Fixed Income Management, 200 East Carrillo Street, Suite 100, Santa
Barbara, CA 93101-2143.
Tax Exempt Bond Fund
MFS Institutional Advisors, Inc., 500 Boylston Street, 21st Floor, Boston,
MA 02116-3741.
Standish Mellon Asset Management Company LLC, One Financial Center, Boston,
MA 02111.
Russell Multi-Manager Principal Protected Fund
Lord, Abbett & Co., 90 Hudson Street, Jersey City, NJ 07302-3973.
MFS Institutional Advisors, Inc., 500 Boylston Street, 21st Floor, Boston,
MA 02116-3741.
Strong Capital Management, Inc., 100 Heritage Reserve, Menomonee, WI 53051.
Money Market Fund
Frank Russell Investment Management Company, 909 A Street, Tacoma, WA 98402.
US Government Money Market Fund
Frank Russell Investment Management Company, 909 A Street, Tacoma, WA 98402.
Tax Free Money Market Fund
Weiss, Peck & Greer, LLC, One New York Plaza, 30th Floor, New York, NY 10004.
A-4
APPENDIX B
Name and Address of Amount and Nature of
Title of Class of Shares Beneficial Owner Beneficial Ownership Percentage of Class Owned
- ------------------------ ------------------------ ------------------------ -------------------------
B-1
APPENDIX C
As of June 30, 2003, there were the following number of shares of beneficial
interest outstanding of each class of each Fund:
Number of
Shares
Name of Fund Outstanding
------------ -----------
Equity I Fund:
Class E......................
Class I......................
Class Y......................
Equity II Fund
Class E......................
Class I......................
Class Y......................
Equity Q Fund
Class E......................
Class I......................
Class Y......................
Tax-Managed Large Cap Fund
Class C......................
Class E......................
Class S......................
Tax-Managed Mid & Small Cap Fund
Class C......................
Class E......................
Class S......................
International Fund
Class E......................
Class I......................
Class Y......................
Emerging Markets Fund
Class C......................
Class E......................
Class S......................
Fixed Income I Fund
Class E......................
Class I......................
Class Y......................
Fixed Income III Fund
Class E......................
Class I......................
Class Y......................
Money Market Fund
Class A......................
Class S......................
C-1
Number of
Shares
Name of Fund Outstanding
------------ -----------
Diversified Equity Fund
Class C................................
Class E................................
Class S................................
Special Growth Fund
Class C................................
Class E................................
Class S................................
Quantitative Equity Fund
Class C................................
Class E................................
Class S................................
International Securities Fund
Class C................................
Class E................................
Class S................................
Real Estate Securities Fund
Class C................................
Class E................................
Class S................................
Diversified Bond Fund
Class C................................
Class E................................
Class S................................
Short Term Bond Fund
Class C................................
Class E................................
Class S................................
Multistrategy Bond Fund
Class C................................
Class E................................
Class S................................
Tax Exempt Bond Fund
Class C................................
Class E................................
Class S................................
U.S. Government Money Market Fund--Class S
Tax Free Money Market Fund--Class S
Select Growth Fund
Class C................................
Class E................................
Class S................................
Class I................................
C-2
Number of
Shares
Name of Fund Outstanding
------------ -----------
Select Value Fund
Class C....................................
Class E....................................
Class S....................................
Class I....................................
Equity Aggressive Strategy Fund
Class A....................................
Class C....................................
Class D....................................
Class E....................................
Class S....................................
Aggressive Strategy Fund
Class A....................................
Class C....................................
Class D....................................
Class E....................................
Class S....................................
Balanced Strategy Fund
Class A....................................
Class C....................................
Class D....................................
Class E....................................
Class S....................................
Moderate Strategy Fund
Class A....................................
Class C....................................
Class D....................................
Class E....................................
Class S....................................
Conservative Strategy Fund
Class A....................................
Class C....................................
Class D....................................
Class E....................................
Class S....................................
Tax-Managed Global Equity Fund
Class C....................................
Class E....................................
Class S....................................
Russell Multi-Manager Principal Protected Fund
Class A....................................
Class B....................................
C-3
PROXY CARD FRANK RUSSELL INVESTMENT COMPANY PROXY CARD
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 3, 2003
The undersigned, having received Notice of the Special Meeting of Shareholders
of Frank Russell Investment Company ("FRIC") to be held on October 3, 2003, at
__:__, Pacific Time, at the offices of FRIC located at 909 A Street, Tacoma,
Washington and the related proxy statement, and hereby revoking all Proxies
heretofore given with respect to shares to be voted at this Special Meeting,
hereby appoints each of David Craig, Greg Lyons, Mary Beth Rhoden and Mark
Swanson, or any of them, as Proxies of the undersigned with power to act without
the others and with full power of substitution, to vote on behalf of the
undersigned as indicated on this proxy card all of the shares in the funds of
FRIC which the undersigned is entitled to vote at the Special Meeting and at any
adjournment or postponement thereof, as fully as the undersigned would be
entitled to vote if personally present.
This Proxy is solicited on behalf of FRIC's Board of Trustees. Shares will be
voted as you specify. The Board of Trustees of FRIC recommends that you vote FOR
each proposal. If this proxy card is signed, dated and returned with no choice
indicated as to one or more proposals on which shares represented by this proxy
card are entitled to be voted, such shares shall be voted FOR each such
proposal. The Proxies are authorized in their discretion to transact such other
business as may properly come before the Special Meeting or any adjournment or
postponement thereof. If you vote via telephone, facsimile or the Internet, do
not return this proxy card.
VOTE VIA FACSIMILE: 1-888-796-9932
VOTE VIA TELEPHONE: 1-866-241-6192
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
CONTROL NUMBER : 999 9999 9999 999
NOTE: Please sign exactly as your name appears on
this Proxy Card and date. If signing for estates,
trusts or corporations, title or capacity should be
stated. If shares are held jointly, each holder
should sign.
____________________________________________________
Signature
____________________________________________________
Signature (if held jointly)
_______________________________________________,2003
Date FRC_13227
FUND FUND FUND
- ---- ---- ----
Equity I Fund Equity II Fund Equity Q Fund
Tax-Managed Large Cap Fund Tax-Managed Mid & Small Cap Fund International Fund
Emerging Markets Fund Fixed Income I Fund Fixed Income III Fund
Money Market Fund Diversified Equity Fund Special Growth Fund
Quantitative Equity Fund International Securities Fund Real Estate Securities Fund
Diversified Bond Fund Short Term Bond Fund Multistrategy Bond Fund
Tax Exempt Bond Fund US Government Money Market Fund Tax Free Money Market Fund
Select Growth Fund Select Value Fund Equity Aggressive Strategy Fund
Aggressive Strategy Fund Balanced Strategy Moderate Strategy
Conservative Strategy Fund Tax-Managed Global Equity Fund Russell Multi-Manager Principal Protected Fund
Please vote by filling in the appropriate box below. If you do not mark one or
more proposals, your Proxy will be voted FOR each such proposal.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
[_] To vote FOR all Funds on all Proposals mark this box. (No other vote is
necessary.)
1. Elect three members of the Board of Trustees of FRIC: FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
Nominee:
01. Julie W. Weston [_] [_] [_]
02. Michael J. A. Phillips
03. Daniel P. Connealy
To withhold authority to vote for any individual nominee, mark the, ""For All
Except" box and write the number and name of any such nominee on the line
immediately below.
- ----------------------------------------
2. Approve a change to the fundamental investment objective:
[_] To vote all Funds FOR; [_] to vote all Funds AGAINST; [_] to ABSTAIN votes for all Funds; or vote separately by Portfolio below.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Equity I [_] [_] [_] Equity II [_] [_] [_] Equity Q [_] [_] [_]
Tax-Managed Large Cap [_] [_] [_] Tax-Managed Mid & Small Cap [_] [_] [_] International [_] [_] [_]
Emerging Markets [_] [_] [_] Fixed Income I [_] [_] [_] Fixed Income III [_] [_] [_]
Money Market [_] [_] [_] Diversified Equity [_] [_] [_] Special Growth [_] [_] [_]
Quantitative Equity [_] [_] [_] International Securities [_] [_] [_] Real Estate Securities [_] [_] [_]
Diversified Bond [_] [_] [_] Short Term Bond [_] [_] [_] Multistrategy Bond [_] [_] [_]
Tax Exempt Bond [_] [_] [_] US Government Money Market [_] [_] [_] Tax Free Money Market [_] [_] [_]
Select Growth [_] [_] [_] Select Value [_] [_] [_] Equity Aggressive
Aggressive Strategy [_] [_] [_] Balanced Strategy [_] [_] Strategy [_] [_] [_]
Conservative Strategy [_] [_] [_] Tax-Managed Global Equity [_] [_] [_] Moderate Strategy [_] [_] [_]
[_] [_] [_] Russell Multi-Manager [_] [_] [_]
3. Approve the reclassification of the investment objective from "fundamental"
to "non-fundamental":
[_] To vote all Funds FOR;[_] to vote all Funds AGAINST; [_] to ABSTAIN votes for all Funds; or vote separately by Portfolio below.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Equity I [_] [_] [_] Equity II [_] [_] [_] Equity Q [_] [_] [_]
Tax-Managed Large Cap [_] [_] [_] Tax-Managed Mid & Small Cap [_] [_] [_] International [_] [_] [_]
Emerging Markets [_] [_] [_] Fixed Income I [_] [_] [_] Fixed Income III [_] [_] [_]
Money Market [_] [_] [_] Diversified Equity [_] [_] [_] Special Growth [_] [_] [_]
Quantitative Equity [_] [_] [_] International Securities [_] [_] [_] Real Estate Securities [_] [_] [_]
Diversified Bond [_] [_] [_] Short Term Bond [_] [_] [_] Multistrategy Bond [_] [_] [_]
Tax Exempt Bond [_] [_] [_] US Government Money Market [_] [_] [_] Tax Free Money Market [_] [_] [_]
Select Growth [_] [_] [_] Select Value [_] [_] [_] Equity Aggressive
Aggressive Strategy [_] [_] [_] Balanced Strategy [_] [_] Strategy [_] [_] [_]
Conservative Strategy [_] [_] [_] Tax-Managed Global Equity [_] [_] [_] Moderate Strategy [_] [_] [_]
[_] [_] [_] Russell Multi-Manager [_] [_] [_]
EVERY SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE SIGN, DATE AND
RETURN YOUR PROXY CARD TODAY!