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:
[_] Preliminary Proxy [_] Confidential, for
Statement Use of the
Commission Only (as
[X] Definitive Proxy permitted by Rule
Statement 14a-6(e)(2))
[_] Definitive
Additional Materials
[_] Soliciting Material
Pursuant to Section
240.14a-11(c) or
Section 240.14a-12
Russell Investment Funds
(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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(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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(4) Date Filed:
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RUSSELL INVESTMENT FUNDS
909 A STREET
TACOMA, WASHINGTON 98402
1-800-628-8510
Dear Shareholder:
Enclosed is a Notice of Special Meeting of shareholders of Russell
Investment Funds ("RIF"). The Special Meeting has been called for October 3,
2003 at 9:30 a.m., local time, at the offices of RIF at 909 A Street, Tacoma,
Washington 98402. The accompanying Proxy Statement details the proposals being
presented for consideration by shareholders of RIF'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 RIF;
2. To approve a change to each Fund's fundamental investment objective;
3. To approve the reclassification of the investment objective of each
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 or voting
instruction card for the Special Meeting is enclosed. IT IS IMPORTANT THAT YOU
COMPLETE, SIGN AND RETURN YOUR CARD, OR TAKE ADVANTAGE OF THE FACSIMILE,
TELEPHONIC OR INTERNET VOTING OR VOTING INSTRUCTION PROCEDURES DESCRIBED IN THE
PROXY OR VOTING INSTRUCTION CARD, AS SOON AS POSSIBLE TO ENSURE THAT YOUR VOTE
OR INSTRUCTIONS ARE COUNTED AT THE SPECIAL MEETING.
Sincerely,
/s/ Karl J. Ege
Karl J. Ege
Secretary
Note: You may receive more than one card. PLEASE COMPLETE EACH CARD PROVIDED.
RUSSELL INVESTMENT FUNDS
Multi-Style Equity Fund
Aggressive Equity Fund
Non-US Fund
Core Bond Fund
Real Estate Securities Fund
(each a "Fund," and, collectively, the "Funds")
909 A STREET
TACOMA, WASHINGTON 98402
-----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 3, 2003
-----------------
NOTICE IS HEREBY GIVEN that a Special Meeting of the shareholders of the
Funds, each a series of Russell Investment Funds ("RIF"), will be held at RIF's
offices located at 909 A Street, Tacoma, Washington, on October 3, 2003 at 9:30
a.m., local time, for the following purposes:
1. To elect three members of the Board of Trustees of RIF;
2. To approve a change to the fundamental investment objective of each
Fund;
3. To approve the reclassification of the investment objective of each
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,
/s/ Karl J. Ege
Karl J. Ege
Secretary
Tacoma, Washington
July 8, 2003
IT IS IMPORTANT THAT SHARES REPRESENTED BY YOUR VOTING INSTRUCTIONS 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 OR
VOTING INSTRUCTION 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 OR VOTING INSTRUCTION CARD.
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 RIF........ 4
Proposal 2: To change the fundamental investment objectives of the Funds 12
Proposal 3: To make each Fund's investment objective non-fundamental.... 16
Other Business........................................................... 17
Information about RIF.................................................... 18
Further Information...................................................... 20
List of Names and Addresses of Money Managers............................ 22
Beneficial Owners of the Funds........................................... 24
RUSSELL INVESTMENT FUNDS
909 A Street
Tacoma, Washington 98402
1-800-628-8510
-----------------
PROXY STATEMENT
-----------------
DATED July 8, 2003
FOR A SPECIAL MEETING OF SHAREHOLDERS OF
Multi-Style Equity Fund
Aggressive Equity Fund
Non-US Fund
Core Bond Fund
Real Estate Securities Fund
(each a "Fund," and, collectively, the "Funds")
EACH A SERIES OF
RUSSELL INVESTMENT FUNDS ("RIF")
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 or voting instruction cards--because you
have the right to vote or give voting instructions 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 Trustees of RIF. Each Fund
2(a) To approve changes to the fundamental investment Each Fund
through objectives of the Funds.
2(e)
3. To approve a change to the fundamental investment Each Fund
objectives of the Funds to 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 RIF has requested
your vote on several matters in connection with the Special Meeting (the
"Special Meeting") of shareholders of the series of RIF (the
"Shareholders"). The Special Meeting will be held at 9:30 a.m., local time,
on October 3, 2003, at the offices of RIF located at 909 A Street, Tacoma,
Washington. RIF proposes to mail the Notice of Special Meeting, the proxy
card and the Proxy Statement to Shareholders of record on or about July 15,
2003. As described below, on or about such date, the Notice of Special
Meeting, Proxy Statement and a voting instruction card will be mailed to
holders of certain variable annuity contracts and variable life insurance
policies who have the right to instruct Shareholders of record how to vote
at the Special Meeting.
Q. Who is eligible to vote?
A. RIF has the following five series, or funds, in all (each a "Fund," and,
collectively, the "Funds"): Multi-Style Equity Fund, Aggressive Equity Fund,
Non-US Fund, Core Bond Fund and Real Estate Securities Fund.
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 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.
The Funds serve as investment vehicles for variable annuity contracts and
variable life insurance policies (the "Variable Contracts" and "Variable
Policies") issued by various life insurance companies (the "Participating
Insurance Companies"). Participating Insurance Companies may also invest
their own general account assets in RIF. All shares of the Funds are owned
of record by sub-accounts of separate accounts ("Separate Accounts")
established to fund the Variable Contracts and Variable Policies issued by
the Participating Insurance Companies or by the Participating Insurance
Companies in their general accounts.
2
Each Participating Insurance Company, to the extent required by the
Investment Company Act of 1940, as amended (the "1940 Act"), will solicit
voting instructions from Variable Contract and Variable Policy owners who
beneficially own shares of a Fund through a Separate Account (a "1940 Act
Separate Account") of such Participating Insurance Company as of the Record
Date (the "Contractowners"). These shares will be voted by the applicable
Participating Insurance Company as timely directed by the Contractowners.
Each Participating Insurance Company will vote the shares of each 1940 Act
Separate Account for which no timely instructions are received from a
Contractowner in the same proportion as dictated by the timely voting
instructions received from other Contractowners for shares of such Fund held
in that 1940 Act Separate Account.
RIF has been advised by certain Participating Insurance Companies that they
are not required by the 1940 Act to solicit voting instructions from the
owners of Variable Contracts or Variable Policies who own shares of a Fund
through certain of their Separate Accounts (the "Non-1940 Act Separate
Accounts") and that such Participating Insurance Companies therefore will
not solicit voting instructions from the Variable Contract or Variable
Policy owners that beneficially own shares of a Fund through a Non-1940 Act
Separate Account (and such Variable Contract or Variable Policy owners are
not included in the term "Contractowners" as used herein). Fund shares held
in a Non-1940 Act Separate Account will be represented at the Special
Meeting by the applicable Participating Insurance Company and voted in the
same proportion as the aggregate of votes cast with respect to shares of
such Fund held in all of that Participating Insurance Company's 1940 Act
Separate Accounts or in such other manner as may be required by law.
Q. How do I deliver voting instructions to my Participating Insurance Company?
A. Contractowners may instruct their Participating Insurance Company how to
vote shares of the Funds attributable to their Variable Contract or Variable
Policy in writing, by executing the enclosed voting instruction card and
returning it in the envelope provided or via facsimile, telephone or the
Internet as described in the proxy or voting instruction card. The
Participating Insurance Companies have fixed 4:00 p.m. Eastern time on
September 30, 2003 as the last day and time on which voting instructions
will be accepted. Voting instructions received after this date and time will
not be considered.
To give voting instructions via the Internet, please access the website
listed on your instruction card(s) or noted in the enclosed voting
instructions. To give voting instructions via the Internet, you will need
the "control number" that appears on your voting instruction card. The
Internet voting procedures are designed to authenticate your identity, to
allow you to give voting instructions and to confirm that your instructions
have been recorded properly. If you vote via the Internet, you may incur
costs associated with electronic access providers and telephone companies.
Voting instruction card(s) that are properly signed, dated and received
prior to 4:00 p.m. Eastern time on September 30, 2003 and proper voting
instructions received via facsimile, telephone or the Internet prior to 4:00
p.m. Eastern time on September 30, 2003, will be voted by your Participating
Insurance Company in accordance with the instructions received. If you sign,
date and return the voting instruction card(s), but do not specify a vote
for one or more of the Proposals, your Participating Insurance Company will
vote the shares of each Fund represented by your voting instructions 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 RIF (Proposal 1);
. IN FAVOR of approving a change to the investment objective, currently a
fundamental investment restriction, of each Fund, (Proposals 2(a) through
2(e), voted on a Fund-by-Fund basis); and
. IN FAVOR of approving a change to the fundamental investment objective of
each Fund to make it non-fundamental (Proposal 3, voted on a Fund-by-Fund
basis).
3
Q. If I send my voting instructions in now as requested, can I change my
instructions later?
A. Contractowners may revoke their voting instructions at any time prior to
4:00 p.m. Eastern time on September 30, 2003 by submitting written notice of
revocation, a later-dated instruction card or a later-dated voting
instruction via facsimile, telephone or the Internet. Revocations of voting
instructions received after this date and time will not be accepted.
Q. How do the Trustees recommend that I vote for these proposals?
A. The Trustees recommend that Shareholders and Contractowners vote FOR each
proposal.
Q. Whom should I call for additional information about this Proxy Statement?
A. Please call D.F. King & Co., Inc., RIF's information agent, toll-free at
1-800-628-8510.
GENERAL INFORMATION ABOUT THE FUNDS
Q. How are the Funds managed?
A. RIF 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 RIF. The management
of the business and affairs of RIF is the responsibility of the Board. The
Board oversees the Funds' operations, including reviewing and approving the
Funds' contracts with the Funds' investment adviser, Frank Russell
Investment Management Company ("FRIMCo") and the Funds' respective
sub-advisers ("Money Managers"). RIF'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.
RIF has received an exemptive order from the U.S. Securities and Exchange
Commission ("SEC") which permits RIF, with the approval of the Board, to
engage and terminate Money Managers without a shareholder vote. Please see
page 22 of this Proxy Statement for a list of 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. RIF currently has ten trustees, seven of whom have previously been
elected by RIF'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 RIF except as
such Trustee sooner dies, resigns or is removed, as provided for in RIF's
Master Trust Agreement. RIF 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 RIF, the Trustees
took into account the qualifications of each nominee and the concern for the
continued efficient conduct of RIF's business. In particular, the Trustees
considered the requirements of the 1940 Act as they apply to the election of
Trustees generally and the nominees in particular. The Board has determined
that Proposal 1 is in the best interests of the Shareholders of each Fund.
RIF 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
4
and by-laws of RIF. 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.
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 RIF.
Ms. Weston and Mr. Connealy are not "interested persons" of RIF as defined in
Section 2(a)(19) of the 1940 Act. Mr. Phillips is an interested person of RIF
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 RIF and Frank Russell Investment Company
("FRIC"). The address for each nominee listed below is 909 A Street, Tacoma,
Washington 98402-1616.
No. of
Portfolios
In Russell
Term of Principal 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 Nominee
Michael J. A. Phillips, Trustee Since 2002 Chairman of the Board, CEO and 37 None
Born January 20, 1948 Director, Frank Russell Company
("FRC"); President, FRC until
July 1, 2003
Independent Nominees
Daniel P. Connealy,.... Trustee Since April 2001-2003, Vice President and 37 Director,
Born June 6, 1946 2003 Chief Financial Officer, Janus Gold Banc
Capital Group Inc.; 1979-2001, Corporation,
Audit and Accounting Partner, Inc.
Pricewaterhouse-
Coopers LLP
Julie W. Weston,....... Trustee Since 2002 Retired since 2000. 1997 to 2000, 37 None
Born October 2, 1943 Arbitrator, The American
Arbitration Association
Commercial Panel. From 1995 to
1999, Hearing Officer, University
of Washington
- --------
** Each Trustee serves as a Trustee during the lifetime of RIF and until its
termination except as such Trustee sooner dies, resigns or is removed.
During the fiscal year ended December 31, 2002, there were four regular
meetings of the Board, two 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.
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
5
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 December 31, 2002, the Audit Committee held five
meetings. RIF'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 RIF's custodian, reviews both the
audit and non-audit work of RIF'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 RIF, (ii) all audit services provided to FRIMCo, or any affiliate
thereof that provides ongoing services to RIF, relating to the operations and
financial reporting of RIF, and (iii) all non-audit services relating to the
operations and financial reporting of RIF, provided to FRIMCo, or any affiliate
thereof that provides ongoing services to RIF, by any auditors with an ongoing
relationship with RIF.
The primary functions of the Nominating and Governance Committee are to: (1)
nominate individuals who are not interested persons of RIF 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 December 31, 2002,
the Nominating and Governance Committee held one meeting.
6
Information Regarding the Other Trustees and the Officers of RIF
Listed below are the Trustees of RIF not named above as nominees and its
principal executive officers, including their names, ages, position(s) with
RIF, and principal occupation or employment during the past five years. Mr.
George F. Russell, Mr. Lynn L. Anderson and Mr. Michael J.A. Phillips are the
only Trustees who are "interested persons" of RIF as defined in section
2(a)(19) of the 1940 Act. The address for each Trustee and officer listed below
is 909 A Street, Tacoma, Washington 98402-1616.
No. of
Portfolios in
Russell
Term of Principal 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 Interested Trustee Emeritus*
Lynn L. Anderson,........ Trustee Trustee since Vice Chairman, FRC; Chairman of 37 Trustee,
Born April 22, 1939 and 1987; the Board, Trustee, FRIC and RIF; SSgA Funds
Chairman Chairman of CEO and Chairman of the Board, (investment
of the the Board Russell Fund Distributors, Inc. and company)
Board since 1999 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
George F. Russell, Jr.,.. Trustee Since 1999 Chairman Emeritus, FRC; 37 None
Born July 3, 1932 Emeritus Chairman Emeritus, FRIC and RIF
and
Chairman
Emeritus
* Interested persons of RIF because of their relationships with FRIMCo or its affiliates as set forth in the table.
Independent Trustees and Independent Trustee Emeritus
Paul E. Anderson,........ Trustee Since 1984 1996 to present, President, 37 None
Born October 15, 1931 Anderson Management Group
LLC (private investments
consulting)
Paul Anton, Ph.D.,....... Trustee Since 2003 Retired since 1997; Trustee of 37 None
Born December 1, 1919 Emeritus FRIC and RIF until 2002
William E. Baxter,....... Trustee Since 1984 Retired since 1986 37 None
Born June 8, 1925
7
No. of
Portfolios in
Russell
Term of Principal 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
------- ----------- ------------ ---------------------------------- ------------- -------------
Kristianne Blake,........ Trustee Since 2000 President, Kristianne Gates Blake, 37 - Trustee
Born January 22, 1954 P.S. (accounting services) WM Group of
Funds
(investment
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, Simpson 37 None
Born December 21, 1955 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 RIF and until its
termination except as such Trustee sooner dies, 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
Born October 11, 1959 Executive Officer CEO, 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 Since 1991 Director of Investments,
Born October 3, 1953 Investments 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
- --------
** All officers serve for one year and until their successors are duly elected
and qualified; provided, however, that any officer may be removed at any
time either with or without cause, by the Board.
9
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. The Russell Fund
Complex consists of RIF and FRIC.
EQUITY SECURITIES BENEFICIALLY OWNED BY TRUSTEES
FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2002
Dollar Range of Equity Aggregate Dollar Range of Equity Securities in all
Securities in Each Registered Investment Companies Overseen by
Interested Trustees Fund Trustees in Russell Fund Complex
------------------- ---------------------- --------------------------------------------------
Lynn L. Anderson........ None None
Michael J. A. Phillips.. None None
George F. Russell, Jr... None None
Independent Trustees
--------------------
Paul E. Anderson........ None Over $100,000
Paul Anton, Ph.D........ None $50,001-$100,000
William E. Baxter....... None $1-$10,000
Kristianne Blake........ None Over $100,000
Daniel P. Connealy...... None None
Lee C. Gingrich......... None None
Eleanor W. Palmer....... None None
Raymond P. Tennison, Jr. None None
Julie W. Weston......... None $1-$10,000
10
Remuneration of Trustees
RIF pays fees only to the independent Trustees. Compensation of officers and
Trustees who are "interested persons" of RIF is paid by FRIMCo or its
affiliates. The following represents the compensation paid to each Trustee for
the fiscal year ended December 31, 2002. The Russell Fund Complex consists of
FRIC and RIF.
TRUSTEE COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
Pension or
Retirement Estimated Total
Benefits Annual Compensation
Aggregate Accrued as Benefits From Russell
Compensation Part of Upon Fund Complex
Interested Trustees from RIF RIF Expenses Retirement Paid to Trustees
------------------- ------------ ------------ ---------- ----------------
Lynn L. Anderson........ $ 0 $0 $0 $ 0
Michael J. A. Phillips.. $ 0 $0 $0 $ 0
George F. Russell, Jr.*. $ 0 $0 $0 $ 0
Independent Trustees
--------------------
Paul E. Anderson........ $12,530 $0 $0 $ 85,250
Paul Anton, PhD.**...... $11,760 $0 $0 $ 78,250
William E. Baxter....... $11,760 $0 $0 $ 81,750
Kristianne Blake........ $12,677 $0 $0 $ 86,800
Daniel P. Connealy***... $ 0 $0 $0 $ 0
Lee C. Gingrich......... $12,390 $0 $0 $ 86,250
Eleanor W. Palmer....... $11,974 $0 $0 $ 83,280
Raymond P. Tennison, Jr. $12,040 $0 $0 $81,750.09
Julie W. Weston****..... $ 4,327 $0 $0 $ $31,333
- --------
* Mr. Russell was elected Trustee Emeritus effective January 1, 1999.
** Dr. Anton was elected Trustee Emeritus effective December 31, 2002.
*** Mr. Connealy was elected to the Board of Trustees on April 24, 2003.
**** 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 or Contractowner providing voting instructions may vote for or
withhold authority with respect to any or all of the nominees. If an executed
proxy card or voting instruction card is received without voting instructions,
the shares will be voted for each of the nominees named herein. The nominees
have consented to being named in this Proxy Statement and to serve if elected.
RIF knows of no reason why the nominees would be unable or unwilling to serve
if elected. Should any of 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 RIF may recommend.
11
RIF'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 RIF 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 RIF's Master Trust Agreement. Because
the Participating Insurance Companies are the only Shareholders of RIF, the
presence of the Participating Insurance Companies at the Special Meeting in
person or by proxy will meet the quorum requirement.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE
SHAREHOLDERS OF EACH FUND AND CONTRACTOWNERS PROVIDING VOTING
INSTRUCTIONS 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 AND VOTING INSTRUCTION CARDS THAT ARE
RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
PROPOSALS 2(a)-2(e):
APPROVAL OF A CHANGE TO THE INVESTMENT OBJECTIVES 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.
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
Funds will not affect materially the manner in which such Funds are managed.
The Funds' principal investment strategies will not change. The current
investment strategies and policies of the Funds can be found in the current RIF
prospectuses. The Board considered the foregoing in making its determination
that Proposals 2(a)-2(e) are in the best interests of the Shareholders of each
Fund.
12
The current and proposed objectives for the Funds
The current and proposed investment objectives for the Funds, a summary of
their principal investment strategies and a discussion of the effect of
changing the investment objective are set forth in the chart below:
Current Investment Proposed Investment
Proposal Fund Objective Objective
- -------- ---- --------- ---------
2(a) Multi- To provide income and capital growth by Seeks to provide long term capital growth.
Style investing principally in equity securities.
Equity
Principal Investment Strategy
-----------------------------
The Multi-Style Equity Fund invests primarily in common stocks of medium and large
capitalization companies, most of which are US based. The Fund employs a "multi-style,
multi-manager" approach whereby portions of the Fund are allocated to different money
managers who employ distinct investment styles. The Fund uses three principal
investment styles intended to complement one another: a Growth Style, a Value Style and
a Market-Oriented Style. The Fund intends to be fully invested at all times.
Effect of changing the investment objective
-------------------------------------------
Pursuant to its principal investment strategy, the Fund invests in securities that its Money
Managers believe will provide income and capital growth. If the proposed investment
objective is approved, the Fund would continue to invest in such securities, but income
would no longer be a stated investment goal.
Current Investment Proposed Investment
Proposal Fund Objective Objective
- -------- ---- --------- ---------
2(b) Aggressive To provide capital appreciation by Seeks to provide long term capital growth.
Equity assuming a higher level of volatility than is
ordinarily expected from the Multi-Style
Equity Fund by investing in equity
securities.
Principal Investment Strategy
-----------------------------
The Aggressive Equity Fund invests primarily in common stocks of small and medium
capitalization companies, most of which are US based. The Fund's investments may
include companies that have been publicly traded for less than five years and smaller
companies, such as companies not listed in the Russell 2000(R) Index. The Fund employs
a "multi-style, multi-manager" approach whereby portions of the Fund are allocated to
different money managers who employ distinct investment styles. The Fund uses three
principal investment styles intended to complement one another: a Growth Style, a Value
Style and a Market-Oriented Style. The Fund intends to be fully invested at all times. A
portion of the Fund's net assets may be "illiquid securities" (i.e., securities that do not
have a readily available market or that are subject to resale restrictions).
Effect of changing the investment objective
-------------------------------------------
Pursuant to its principal investment strategy, the Fund invests in securities that its Money
Managers believe will provide capital appreciation. If the proposed investment objective
is approved, the Fund would continue to invest in such securities, but capital growth
would be the stated investment goal. Also, the investment objective of the Fund would no
longer reference Multi-Style Equity Fund.
13
Current Investment Proposed Investment
Proposal Fund Objective Objective
- -------- ---- --------- ---------
2(c) Non-US To provide favorable total return and Seeks to provide long term capital growth.
additional diversification for US investors
by investing primarily in equity and fixed-
income securities of non-US companies and
securities issued by non-US governments.
Principal Investment Strategy
-----------------------------
The Non-U.S. Fund invests primarily in equity securities issued by companies domiciled
outside the US and in depositary receipts, which represent ownership of securities of non-
US companies. The Fund's investments span most of the developed nations of the world
(particularly Europe and the Far East) to maintain a high degree of diversification among
countries and currencies. The Fund employs a "multi-style, multi-manager" approach
whereby portions of the Fund are allocated to different money managers who employ
distinct investment styles. The Fund uses three principal investment styles intended to
complement one another: a Growth Style, a Value Style and a Market-Oriented Style. The
Fund intends to be fully invested at all times. A portion of the Fund's net assets may be
"illiquid" securities (i.e., securities that do not have a readily available market or that are
subject to resale restrictions).
Effect of changing the investment objective
-------------------------------------------
Pursuant to its principal investment strategy, the Fund invests in securities that its Money
Managers believe will provide favorable total return and diversification. If the proposed
investment objective is approved, the Fund would continue to invest in such securities, but
capital growth would be the stated investment goal. Also, the investment objective of the
Fund would no longer reference equity and fixed-income securities of non-US companies
and securities issued by non-US governments.
Current Investment Proposed Investment
Proposal Fund Objective Objective
- -------- ---- --------- ---------
2(d) Real To generate a high level of total return Seeks to provide current income and long
Estate through above average current income term capital growth.
Securities while maintaining the potential for capital
appreciation.
Principal Investment Strategy
-----------------------------
The Real Estate Securities Fund seeks to achieve its objective by concentrating its
investments primarily in equity securities of issuers whose value is derived from
ownership, development and management of underlying real estate properties. The Fund
invests primarily in securities of companies known as real estate investment trusts (REITs)
that own and/or manage properties. The Fund may also invest in equity securities of other
types of real estate-related companies. The Fund invests in companies which are
predominantly US based. The Fund employs a multi-manager approach whereby portions
of the Fund are allocated to different money managers whose approaches are intended to
complement one another. The Fund intends to be fully invested at all times. A portion of
the Fund's net assets may be "illiquid" securities (i.e., securities that do not have a readily
available market or that are subject to resale restrictions).
Effect of changing the investment objective
-------------------------------------------
Pursuant to its principal investment strategy, the Fund invests in securities that its Money
Managers believe will provide favorable total return through above average current
income. If the proposed investment objective is approved, the Fund would continue to
invest in such securities, but current income and capital growth would be the stated
investment goals.
14
Current Investment Proposed Investment
Proposal Fund Objective Objective
- -------- ---- --------- ---------
2(e) Core To maximize total return through capital Seeks to provide current income and the
Bond appreciation and income by assuming a level preservation of capital.
of volatility consistent with the broad fixed-
income market by investing in fixed-income
securities.
Principal Investment Strategy
-----------------------------
The Core Bond Fund invests primarily in fixed-income securities. In particular, the Fund holds
fixed income securities issued or guaranteed by the US government and, to a lesser extent by
non-US governments, or by their respective agencies and instrumentalities. It also holds
mortgage-backed securities, including collateralized mortgage obligations. The Fund also
invests in corporate debt securities and dollar-denominated obligations issued in the US by
non-US banks and corporations (Yankee Bonds). The Fund may invest up to 25% of its assets
in debt securities that are rated below investment grade. These securities are commonly
referred to as "junk bonds." The duration of the Fund's portfolio typically ranges within 10%
of the duration of the Lehman Brothers Aggregate Bond Index, which was 3.73 years as of
December 31, 2002, but may vary up to 25% from the Index's duration. The Fund has no
restrictions on individual security duration. The Fund invests in securities of issuers in a variety
of sectors of the fixed-income market. The Fund employs multiple money managers, each with
its own expertise in the fixed-income markets.
Effect of changing the investment objective
-------------------------------------------
Pursuant to its principal investment strategy, the Fund invests in securities that its Money
Managers believe will provide favorable total return and income. If the proposed investment
objective is approved, the Fund would continue to invest in such securities, but current income
and the preservation of capital would be the stated investment goals. Also, the investment
objective would no longer reference volatility or fixed-income securities.
Shareholders of each 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(e) will be non-fundamental investment objectives. None of Proposals
2(a) through 2(e) 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.
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.
15
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE
SHAREHOLDERS OF EACH FUND AND CONTRACTOWNERS PROVIDING VOTING
INSTRUCTIONS VOTE "FOR" PROPOSALS 2(a) - 2(e) AS APPLICABLE. ANY
EXECUTED UNMARKED PROXY CARDS AND VOTING INSTRUCTION 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 be
reclassified from fundamental to non-fundamental. 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 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 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 to any non-fundamental investment objective, the Fund would provide
Shareholders with 60 days' notice before the effective date of such change. If
Proposal 3 is approved, Shareholders will no longer have the ability to vote on
proposed investment objective changes.
The current fundamental investment objectives for each Fund, to which
Shareholders are being asked to approve changes, are set forth above in
Proposals 2(a) through 2(e).
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. The Board has determined that Proposal 3 is in
the best interests of the Shareholders of each Fund.
16
The table below summarizes the effects of reclassifying each investment
objective from fundamental to non-fundamental.
Fundamental Investment Non-Fundamental Investment
Objective Objective
---------------------------------- ------------------------------------
Who must approve changes in a Board and Shareholders Board
fundamental investment objective?
How quickly can a change to the Relatively slowly, since a vote of Relatively quickly, because the
investment objective be made? Shareholders is required change can 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 change an Costly to change because a Less costly to change because a
investment objective? Shareholder vote requires holding change can be accomplished by
a meeting of Shareholders with action of the Board of Trustees
additional SEC filing requirements without Shareholder approval
and proxy solicitation efforts
Shareholders of each 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(e) 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 AND CONTRACTOWNERS PROVIDING VOTING
INSTRUCTIONS VOTE "FOR" PROPOSAL 3. ANY EXECUTED UNMARKED PROXY CARDS
AND VOTING INSTRUCTION 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 RIF
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 on page 22 of this proxy statement.
Distributor
Russell Fund Distributors, Inc. (the "Distributor") serves as the
distributor of RIF's shares. The Distributor receives no compensation from RIF
for its services. The Distributor is a wholly owned subsidiary of FRIMCo and
its mailing address is 909 A Street, Tacoma, WA 98402.
Custodian
RIF'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 RIF for the
fiscal year ending December 31, 2003.
Audit Fees. The aggregate fees billed by PwC for professional services
rendered for the audit of RIF's annual financial statements for the fiscal
years ended December 31, 2001 and 2002 were $77,812 and $74,168, respectively.
Audit-Related Fees. PwC billed no aggregate fees for assurance and related
services rendered that are reasonably related to the audit of RIF's annual
financial statements but not reported under "Audit-Fees" above for the fiscal
years ended December 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 December 31, 2001 and 2002 were $82,886 and $27,033, respectively.
All Other Fees. The aggregate fees billed by PwC for professional services
rendered for products and services other than those described above for the
fiscal years ended December 31, 2001 and 2002 were $5,300 and $0, respectively.
Substantially all of these services were rendered in connection with the
issuance of consent letters related to filings by RIF 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 RIF, is compatible with
maintaining PwC's independence. The Audit Committee has adopted a policy
requiring pre-approval by the committee of all services (audit and non-audit)
to be provided to RIF by its independent auditor. In accordance
18
with that policy, the Audit Committee has given its approval for the provision
of audit services by PricewaterhouseCoopers LLP for the fiscal year ended
December 31, 2003 and has also given its general pre-approval ("general
pre-approval") for up to a year in advance for the provision by
PricewaterhouseCoopers LLP of particular categories or types of audit-related,
tax and permitted non-audit services (including permitted non-audit services to
RIF, FRIMCo and any entity controlling, controlled by, or under common control
with FRIMCo that provides ongoing services to RIF), subject to specific
budgets. Services which have not received general pre-approval or which exceed
their budgets must receive specific approval of the Audit Committee ("specific
approval"). In cases where the Audit Committee's pre-approval is not covered by
one of those approvals, the policy provides that the Audit Committee may
delegate general or specific pre-approval authority to one or more of its
members, and that any such pre-approvals will then be communicated for
informational purposes only to the full Audit Committee at its next scheduled
meeting. To date, no such delegation of authority has been made by the Audit
Committee.
Pre-approval has not been waived in respect of services described under
"Audit-Related Fees," "Tax Fees" or "All Other Fees" since the date on which
the aforementioned pre-approval procedures were adopted by the Audit Committee.
The aggregate non-audit fees billed by PwC for services rendered to RIF and
to FRIMCo, or an affiliate thereof that provides ongoing services to RIF, for
the fiscal years ended December 31, 2001 and 2002 were $330,697 and $210,258,
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
RIF 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 RIF contains an express
disclaimer of Shareholder liability for acts or obligations of RIF and provides
for indemnification and reimbursement of expenses out of RIF's property for any
Shareholder held personally liable for the obligations of RIF. The Master Trust
Agreement also provides that RIF may maintain appropriate insurance (for
example, fidelity bonding and errors and omissions insurance) for the
protection of RIF, 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 RIF itself is unable to meet its obligations.
Under Massachusetts law, RIF 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. RIF is
holding the Special Meeting because of the items that must be presented for
Shareholders' consideration and approval.
19
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 RIF to be held at the offices of RIF at 909 A Street,
Tacoma, Washington 98402, on October 3, 2003, at 9:30 a.m., local time, and any
or all adjournments thereof. This Proxy Statement is first being mailed to
Shareholders on or about July 15, 2003. Contractowners may revoke their voting
instructions at any time prior to 4:00 p.m. Eastern time on September 30, 2003
by submitting written notice of revocation, a later-dated instruction card or a
later-dated instruction via facsimile, telephone or the Internet.
RIF requests that Participating Insurance Companies forward proxy material
to Contractowners. RIF may reimburse such Participating Insurance Companies for
their reasonable expenses incurred in connection with the solicitation of
voting instructions. The cost of soliciting these proxies will be borne by each
Fund, to the extent of its direct operational expenses, and by FRIMCo.
Employees of RIF or FRIMCo may solicit voting instructions from Contractowners
for no additional remuneration.
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
As of June 30, 2003, there were the following number of shares of beneficial
interest outstanding of each Fund:
Number of Shares
Name of Fund Outstanding
------------ -----------
Multi-Style Equity Fund 23,884,177.022
Aggressive Equity Fund 10,928,160.262
Non-US Fund 19,600,962.718
Real Estate Securities
Fund 16,175,657.167
Core Bond Fund 13,781,646.216
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 RIF. 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, and will
not be voted for or against any adjournment. Abstentions and broker non-votes
will not be counted in
20
favor of, but will have no other effect on, Proposal 1, and will have the
effect of a "no" vote on all other Proposals and adjournments. Accordingly,
Shareholders are urged to forward their voting instructions promptly.
Beneficial Owners
As of December 31, 2002, the officers and Trustees, including the nominees,
of RIF as a group beneficially owned less than 1% of the shares of each Fund
outstanding on such date. As of June 30, 2003, to the best of RIF's knowledge,
no person owned beneficially more than 5% of any Fund, except as set forth on
page 24 of this Proxy Statement.
As of the Record Date, the Participating Insurance Companies are The
Northwestern Mutual Life Insurance Company ("Northwestern Mutual"), First
MetLife Investors Insurance Company, MetLife Investors Insurance Company of
California, MetLife Investors Insurance Company, Hartford Life Insurance
Company, General American Life Insurance Company and Security Equity Life
Insurance Company. Northwestern Mutual is an affiliate of FRIMCo and the
Distributor.
RIF has been advised by Northwestern Mutual that all shares of a Fund held
in its general account will be represented at the Special Meeting by
Northwestern Mutual and voted in the same proportion as the aggregate of the
votes cast with respect to shares of such Fund held in all of Northwestern
Mutual's 1940 Act Separate Accounts.
Shareholder Proposals
RIF 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 RIF's offices, 909 A Street, Tacoma, Washington
98402, Attn: Secretary, so they are received within a reasonable time before
any such meeting. The Trustees know of no business, other than the matters
mentioned in the Notice and described above, that is expected to come before
the Special Meeting. An opportunity will be provided at the Special Meeting for
Shareholders present in person to present a motion to the Special Meeting.
Should any properly presented motion or 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 RIF.
Annual and Semi-Annual Reports
The Funds' most recent audited financial statements and Annual Report, for
the fiscal year ended December 31, 2002, has been previously mailed to
Shareholders, and is available free of charge. If you have not received an
Annual Report for the Fund(s) in which you are an investor, or would like to
receive additional copies, free of charge, please contact your Participating
Insurance Company or contact RIF by mailing a request to Russell Investment
Funds, 909 A Street, Tacoma, WA 98402, calling 1-800-787-7354, faxing
253-591-3495, or logging onto www.russell.com.
21
LIST OF NAMES AND ADDRESSES OF MONEY MANAGERS
The following is a list of names and addresses of the Money Managers for the
Funds. The Money Managers have no affiliations with the Funds or the Funds'
service providers other than their management of Fund assets. These managers
may also serve as Money Managers or advisers to other investment companies
unaffiliated with RIF, other Funds in RIF, or to other clients of FRIMCo or of
Frank Russell Company, including Frank Russell Company's wholly-owned
subsidiary, Frank Russell Trust Company.
Multi-Style Equity Fund
Alliance Capital Management L.P., through its Bernstein Investment Research
and Management Unit, 1345 Avenue of the Americas, New York, NY 10105.
Barclays Global Investors, N.A., 45 Fremont Street, San Francisco, CA 94105.
Brandywine Asset Management, LLC, 201 North Walnut Street, Suite 1200,
Wilmington, DE 19801.
Jacobs Levy Equity Management, Inc., 100 Campus Drive, P.O. Box 650, Florham
Park, NJ 07932-0650.
Montag & Caldwell, Inc., 3455 Peachtree Road, N.E., Suite 1200, Atlanta, GA
30326-3248.
Strong Capital Management, Inc., 100 Heritage Reserve, P.O. Box 2936,
Menomonee Falls, WI 53201.
Turner Investment Partners, Inc., 1205 Westlakes Drive, Suite 100, Berwyn,
PA 19312-2414.
Westpeak Global Advisors, L.P., 1470 Walnut Street, Boulder, CO 80302.
Aggressive Equity Fund
CapitalWorks Investment Partners, LLC, 402 West Broadway, 25th Floor, San
Diego, CA 92101.
David J. Greene and Company, LLC, 599 Lexington Avenue, New York, NY 10022.
Geewax, Terker & Company, 414 Old Baltimore Pike, Chadds Ford, PA 19317.
Goldman Sachs Asset Management, L.P., 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.
Suffolk Capital Management, LLC, 1633 Broadway, 40th Floor, New York, NY
10019.
Systematic Financial Management, L.P., 300 Frank Burr Boulevard, Glenpointe
East, 7th Floor, Teaneck, NJ 07666-6703.
TimesSquare Capital Management, Inc., Four Times Square, 25th Floor, New
York, NY 10036-9998.
Non-U.S. Fund
AQR Capital Management, LLC, 900 Third Avenue, 17th Floor, New York, NY
10022.
22
Fidelity Management & Research Company, 82 Devonshire Street, Boston, MA
02109-3614.
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.
Real Estate Securities Fund
AEW Management and Advisors, L.P., World Trade Center East, Two Seaport
Lane, Boston, MA 02110-2021.
INVESCO Realty Advisors, a division of INVESCO Institutional (N.A.), Inc.,
One Lincoln Center, Suite 700, 540 LBJ Freeway - LB2, Dallas, TX 75240.
RREEF America L.L.C., 875 North Michigan Avenue, 41st Floor, Chicago, IL
60611-1901.
Core Bond Fund
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.
23
BENEFICIAL OWNERS OF THE FUNDS
Fund Name Beneficial Owner Shares Percent
--------- ---------------- ------ -------
Aggressive Equity Fund. NORTHWESTERN MUTUAL LIFE INSURANCE 3,547,964.146 32.47%
COMPANY VARIABLE LIFE ACCOUNT
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Aggressive Equity Fund. NORTHWESTERN MUTUAL LIFE INSURANCE 3,149,877.814 28.82%
COMPANY ACCOUNT B
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Aggressive Equity Fund. NORTHWESTERN MUTUAL LIFE INSURANCE 2,113,066.894 19.34%
COMPANY NML ACCOUNT
ATTN INVESTMENT ACCOUNTING W6NE
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Aggressive Equity Fund. METLIFE INVESTORS INSURANCE CO 769,857.015 7.04%
D/B/A COVA VARIABLE ANNUITY
ACCOUNT ONE
4700 WESTOWN PKWY BLDG 4 STE 200
W DES MOINES IA 50266-6718
Core Bond Fund......... NORTHWESTERN MUTUAL LIFE INSURANCE 5,875,027.139 42.63%
COMPANY ACCOUNT B
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Core Bond Fund......... NORTHWESTERN MUTUAL LIFE INSURANCE 3,562,880.737 25.85%
COMPANY VARIABLE LIFE ACCOUNT
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Core Bond Fund......... METLIFE INVESTORS INSURANCE CO D/B/A 2,931,355.113 21.27%
COVA VARIABLE ANNUITY ACCOUNT ONE
4700 WESTOWN PKWY BLDG 4 STE 200
W DES MOINES IA 50266-6718
Multi-Style Equity Fund NORTHWESTERN MUTUAL LIFE INSURANCE 7,629,642.658 31.94%
COMPANY VARIABLE LIFE ACCOUNT
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Multi-Style Equity Fund NORTHWESTERN MUTUAL LIFE INSURANCE 6,852,407.910 28.69%
COMPANY ACCOUNT B
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Multi-Style Equity Fund METLIFE INVESTORS INSURANCE CO D/B/A 3,961,061.583 16.58%
COVA VARIABLE ANNUITY ACCOUNT ONE
4700 WESTOWN PKWY BLDG 4 STE 200
W DES MOINES IA 50266-6718
Multi-Style Equity Fund NORTHWESTERN MUTUAL LIFE INSURANCE 2,909,427.235 12.18%
COMPANY NML ACCOUNT
ATTN INVESTMENT ACCOUNTING W6NE
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
24
Fund Name Beneficial Owner Shares Percent
--------- ---------------- ------ -------
Non-U.S. Fund.............. NORTHWESTERN MUTUAL LIFE INSURANCE 6,051,959.653 30.88%
COMPANY NML ACCOUNT
ATTN INVESTMENT ACCOUNTING W6NE
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Non-U.S. Fund.............. NORTHWESTERN MUTUAL LIFE INSURANCE 5,409,132.985 27.60%
COMPANY VARIABLE LIFE ACCOUNT
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Non-U.S. Fund.............. NORTHWESTERN MUTUAL LIFE INSURANCE 4,994,865.060 25.48%
COMPANY ACCOUNT B
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Non-U.S. Fund.............. METLIFE INVESTORS INSURANCE CO D/B/A 1,923,278.596 9.81%
COVA VARIABLE ANNUITY ACCOUNT ONE
4700 WESTOWN PKWY BLDG 4 STE 200
W DES MOINES IA 50266-6718
Real Estate Securities Fund NORTHWESTERN MUTUAL LIFE INSURANCE 7,021,781.858 43.41%
COMPANY ACCOUNT B
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Real Estate Securities Fund NORTHWESTERN MUTUAL LIFE INSURANCE 4,454,811.254 27.54%
COMPANY NML ACCOUNT
ATTN INVESTMENT ACCOUNTING W6NE
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Real Estate Securities Fund NORTHWESTERN MUTUAL LIFE INSURANCE 3,194,786.492 19.75%
COMPANY VARIABLE LIFE ACCOUNT
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
Real Estate Securities Fund NORTHWESTERN MUTUAL LIFE INSURANCE 876,730.131 5.42%
COMPANY ACCOUNT C
ATTN MUTUAL FUND ACCOUNTING N13NW
720 E WISCONSIN AVE
MILWAUKEE WI 53202-4797
25
PROXY CARD PROXY CARD
RUSSELL INVESTMENT FUNDS
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 3, 2003
The undersigned, having received Notice of the Special Meeting of Shareholders
of Russell Investment Funds ("RIF") to be held on October 3, 2003, at 9:30 a.m.,
Pacific Time, at the offices of RIF 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 the 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 RIF 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 RIF'S BOARD OF TRUSTEES. Shares will be
voted as you specify. The Board of Trustees of RIF 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 facsimile, do not return this proxy card
by mail.
VOTE VIA FACSIMILE: 1-888-796-9932
Note: Please sign exactly as your name
appears on this Proxy card and date. If
signing for estates, trusts or
corporations, title or capacity should
be stated. If shares are held jointly,
each holder should sign.
_______________________________________
Signature
_______________________________________
Signature (if held jointly)
_______________________________________
Date RIF_13381
FUND FUND FUND
- ---- ---- ----
Aggressive Equity Fund Core Bond Fund Multi-Style Equity Fund
Non-U.S. Fund Real Estate Securities 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: [X]
- ---------------------------------------------------------------------------
[_] 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 RIF: FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
Nominee: 01. Michael J.A. Phillips [_] [_] [_]
02. Daniel P. Connealy
03. Julie W. Weston
Instruction: To withhold authority to vote for any individual nominee, mark
the "For All Except" box and write the number and name of any such nominee
on the line immediately below.
______________________________________
2. Approve a change to the fundamental investment objective:
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Equity Fund [_] [_] [_] Core Bond Fund [_] [_] [_] Multi-Style Fund [_] [_] [_]
Non-U.S. Fund [_] [_] [_] Real Estate Securities Fund [_] [_] [_]
3. Approve the reclassification of the investment objective from "fundamental"
to "non-fundamental":
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Equity Fund [_] [_] [_] Core Bond Fund [_] [_] [_] Multi-Style Fund [_] [_] [_]
Non-U.S. Fund [_] [_] [_] Real Estate Securities Fund [_] [_] [_]
EVERY SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE SIGN, DATE AND
RETURN YOUR PROXY CARD TODAY!
VOTING INSTRUCTION CARD RUSSELL INVESTMENT FUNDS VOTING INSTRUCTION CARD
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 3, 2003
[NAME OF INSURANCE COMPANY]
The undersigned, revoking all voting instructions heretofore given with respect
to shares to be voted at the Special Meeting of Shareholders of Russell
Investment Funds ("RIF") to be held on October 3, 2003 at 9:30 a.m., Pacific
Time, at the offices of RIF located at 909 A Street, Tacoma, Washington, hereby
instructs all shares of RIF deemed attributable to the undersigned's contract or
policy with the issuing insurance company named above be voted as indicated on
the Voting Instruction Card at the Special Meeting and at any adjournment or
postponement thereof. The issuing insurance company named above and any proxies
appointed by it are authorized in their discretion to transact such other
business as may properly come before the Special Meeting or any adjournment or
postponement thereof.
VOTING INSTRUCTIONS ARE SOLICITED BY THE ISSUING INSURANCE COMPANY NAMED ABOVE
ON BEHALF OF RIF'S BOARD OF TRUSTEES. Shares will be voted as you specify. The
Board of Trustees of RIF recommends that you vote FOR each proposal. IF THIS
---
VOTING INSTRUCTION CARD IS SIGNED, DATED AND RETURNED WITH NO CHOICE INDICATED
AS TO ONE OR MORE PROPOSALS ON WHICH SHARES REPRESENTED BY THE UNDERSIGNED'S
CONTRACT OR POLICY ARE ENTITLED TO BE VOTED, SUCH SHARES SHALL BE VOTED FOR EACH
---
SUCH PROPOSAL. If you vote via telephone, facsimile or the Internet, do not
return this Voting Instruction Card by mail.
VOTE VIA FACSIMILE: 1-888-796-9932
VOTE VIA TELEPHONE: 1-866-235-4258
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 Voting Instruction Card and date. If signing
for estates, trusts or corporations, title or
capacity should be stated. If shares are held
jointly, each holder should sign.
____________________________________________________
Signature
____________________________________________________
Signature (if held jointly)
____________________________________________________
Date RIF_13381
FUND FUND FUND
- ---- ---- ----
Aggressive Equity Fund Core Bond Fund Multi-Style Equity Fund
Non-U.S. Fund Real Estate Securities Fund
Please provide voting instructions by filling in the appropriate box below. If
you do not mark one or more proposals, the shares attributable to your contract
or policy will be voted FOR each such proposal.
---
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
- ---------------------------------------------------------------------------
[_] 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 RIF: FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
Nominee: 01 Michael J.A. Phillips
02 Daniel P. Connealy [_] [_] [_]
03 Julie W. Weston
Instruction: To withhold authority to vote for any
individual nominee, mark "For All Except" and write
the number and name of any such nominee on the line
immediately below.
_______________________________________
2. Approve a change to the fundamental investment objective:
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Equity Fund [_] [_] [_] Core Bond Fund [_] [_] [_] Multi-Style Fund [_] [_] [_]
Non-U.S. Fund [_] [_] [_] Real Estate Securities Fund [_] [_] [_]
3. Approve the reclassification of the investment objective from "fundamental"
to "non-fundamental":
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Equity Fund [_] [_] [_] Core Bond Fund [_] [_] [_] Multi-Style Fund [_] [_] [_]
Non-U.S. Fund [_] [_] [_] Real Estate Securities Fund [_] [_] [_]
YOUR VOTING INSTRUCTIONS ARE IMPORTANT! PLEASE SIGN, DATE AND RETURN YOUR
VOTING INSTRUCTION CARD TODAY.
July 2003
TO: CONTRACT OWNERS, POLICY OWNERS AND PAYEES
INVESTED IN RUSSELL INVESTMENT FUNDS
A Special Meeting of the Shareholders of Russell Investment Funds ("RIF")
will be held on Friday, October 3, 2003, at 9:30 a.m., Pacific Time, at the
offices of RIF, 909 A Street, Tacoma, Washington 98402. Although you are not a
shareholder of RIF, all or part of the value of your Northwestern Mutual
variable annuity contract or variable life insurance policy is invested in
shares of RIF through NML Variable Annuity Account B or Northwestern Mutual
Variable Life Account, respectively. Your variable annuity contract or variable
life policy provides that you have the right to instruct Northwestern Mutual how
the shares attributable to your contract or policy should be voted at the
Special Meeting.
We have enclosed a booklet from RIF containing a Letter to Shareholders,
Notice of Special Meeting and a Proxy Statement. Also enclosed is a Voting
Instruction Card for each such contract or policy you have invested in RIF. This
material describes in detail the matters to be considered at the Special
Meeting, which include the election of three trustees, changes to RIF's
fundamental investment objectives, and reclassification of RIF's investment
objectives from fundamental to non-fundamental, and contains a phone number you
can call if you have questions regarding the Special Meeting. After reviewing
the material, please complete and sign each Voting Instruction Card and return
it in the self-addressed, postage-paid envelope provided or transmit your voting
instructions via facsimile, telephone or the Internet as described in the Voting
Instruction Card. Shares of RIF attributable to your variable annuity contract
or variable life policy will be voted by Northwestern Mutual in accordance with
your instructions.
Your voting instructions must be received by 4:00 p.m., Eastern Time, on
September 30, 2003. Shares of each fund of RIF held through NML Variable Annuity
Account B or Northwestern Mutual Variable Life Account as to which no timely
voting instructions are received will be voted by Northwestern Mutual in
proportion to the instructions received from those contract owners, policy
owners and payees who furnish timely instructions with respect to shares of that
fund held in the respective Account.
We recommend that you instruct Northwestern Mutual to vote FOR the election
of the three trustees and FOR each of the other proposals presented in the Proxy
Statement.
The Northwestern Mutual Life
Insurance Company
Mason G. Ross,
Executive Vice President
and Chief Investment Officer