SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant X
Filed by a Party other than the Registrant o
Check the appropriate box:
X Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Neuberger Berman Equity Series
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
o 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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
o Fee paid previously with preliminary materials.
o 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
NEUBERGER BERMAN EQUITY FUNDS
NEUBERGER BERMAN EQUITY TRUST
NEUBERGER BERMAN EQUITY ASSETS
NEUBERGER BERMAN EQUITY SERIES
(INCLUDING, WHERE APPLICABLE, THE CENTURY, FOCUS, GENESIS, GUARDIAN,
INTERNATIONAL,MANHATTAN, MILLENNIUM, PARTNERS, REGENCY, SOCIALLY RESPONSIVE AND
TECHNOLOGY SERIES)
(EACH A "FUND")
NEUBERGER BERMAN INCOME FUNDS
NEUBERGER BERMAN INCOME TRUST
(INCLUDING, WHERE APPLICABLE, THE CASH RESERVES, GOVERNMENT MONEY FUND, HIGH
YIELD BOND FUND, MUNICIPAL MONEY FUND AND MUNICIPAL SECURITIES TRUST AND THE
INSTITUTIONAL CASH AND LIMITED MATURITY BOND SERIES)
(EACH A "FUND")
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 31, 2000
------------------------
WHO IS ASKING FOR YOUR VOTE?
The Board of Trustees of your fund.
WHERE WILL THE MEETING BE HELD?
The meeting will be held at the offices of Neuberger Berman, 605 Third Avenue,
41st Floor, New York, New York 10158-3698, on October 31, 2000 at 10:30 a.m.
Eastern time.
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<PAGE>
WHAT PROPOSALS APPLY TO EACH FUND?
The following table summarizes each proposal to be presented at the meeting and
the funds whose shareholders the Board is soliciting with respect to each
proposal:
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Name of Fund Proposals
-------------------------------------------------------------------------------
NB Cash Reserves 1. To elect Trustees
2. To approve a change in the fundamental
investment limitation on diversification
3. To ratify the selection of independent
auditor/accountants
6. To approve a on the fundamental
restriction on industry concentration
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NB Century Fund 1. To elect Trustees
NB Focus Fund 2. To approve a change in the fundamental
NB Genesis Fund investment limitation on diversification
NB Guardian Fund 3. Ratifying selection of independent
NB High Yield Bond Fund auditor/accountants
NB International Fund
NB Limited Maturity Bond Fund
NB Manhattan Fund
NB Millennium Fund
NB Municipal Money Fund
NB Municipal Securities Trust
NB Partners Fund
NB Regency Fund
NB Socially Responsive Fund
NB Technology Fund
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NB Government Money Fund 1. To elect Trustees
2. To approve a change in the fundamental
investment limitation on diversification
3. To ratify the selection of independent
auditor/accountants
7. To modify the fund's fundamental
restrictions on:
A. Investing in government securities
B. Repurchase Agreements
C. Borrowing policy to permit purchase of
reverse repurchase agreements
D. To permit securities lending
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NB Century Trust 1. To elect Trustees
NB Focus Trust 2. To approve a change in the fundamental
NB International Trust investment limitation
NB Institutional Cash Trust 3. To ratify the selection of independent
NB Limited Maturity Bond Trust auditor/accountants
NB Manhattan Trust 4. To Approve an Agreement and Plan of
Reorganization
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<PAGE>
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Name of Fund Proposals
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NB Millennium Trust 1. To elect Trustees
NB Regency Trust 2. To approve a change in the fundamental
investment limitation on diversification
NB Socially Responsive Trust 3. To ratify the selection of independent
auditor/accountants
NB Technology Trust
4. To Approve an Agreement and Plan of
Reorganization
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NB Genesis Trust 1. To elect Trustees
NB Guardian Trust 2. To change the fundamental investment
limitation on diversification
NB Partners Fund 3. To ratify the selection of independent
auditor/accountants
4. To approve an Agreement and Plan of
Reorganization
5. To approve a plan of distribution and
shareholder services
--------------------------------------------------------------------------------
NB Focus Assets 1. To elect of Trustees
NB Genesis Assets 2. To approve a change in the fundamental
NB Guardian Assets investment limitation on diversification
NB Manhattan Assets 3. To ratify the selection of independent
NB Millennium Assets auditor/accountants
NB Partners Assets 4. To approve an Agreement and Plan of
NB Socially Responsive Assets Reorganization
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EACH PROPOSAL IS DISCUSSED IN GREATER DETAIL IN THE ATTACHED PROXY STATEMENT.
WHO IS ELIGIBLE TO VOTE?
You are entitled to vote at the meeting and any adjournment if you owned shares
of one or more funds at the close of business on AUGUST 15, 2000.
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WHAT ARE THE DIFFERENT WAYS TO VOTE THIS PROXY?
There are a number of ways to vote your shares:
o BY MAIL: You may vote by completing the enclosed proxy card by dating,
signing and returning it in the postage paid envelope. PLEASE NOTE THAT
IF YOU SIGN AND DATE THE PROXY CARD(S) BUT GIVE NO VOTING INSTRUCTIONS,
YOUR SHARES WILL BE VOTED "FOR" THE PROPOSALS DESCRIBED ABOVE.
o BY PHONE: You may vote by telephone by calling the number on your proxy
card.
o VIA THE INTERNET: You may vote through the Internet by visiting the
website on your proxy card.
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<PAGE>
o IN PERSON: If you plan to attend the meeting, you may vote in person.
(PLEASE NOTE, THAT IF YOU VOTE A PROXY AND THEN VOTE IN PERSON AT THE
MEETING, YOUR PROXY IS AUTOMATICALLY REVOKED.) IF YOU PLAN TO ATTEND
THE MEETING, PLEASE CALL THE FUNDS AT (800) 877-9700.
If you own shares of more than one fund, you must submit a separate proxy
card for each fund in which you own shares. Unless proxy cards submitted by
corporations and partnerships are signed by the appropriate persons as indicated
in the voting instructions on the proxy cards, they will not be voted.
Any additional proposals submitted to a vote at the meeting by anyone other
than the officers or Trustees of the funds may be voted only in person or by
written proxy.
By order of the Board of Trustees,
/S/ Claudia A. Brandon
------------------------------------
Claudia A. Brandon
Secretary
Neuberger Berman Equity Funds
Neuberger Berman Equity Trust
Neuberger Berman Equity Assets
Neuberger Berman Equity Series
Neuberger Berman Income Funds
Neuberger Berman Income Trust
August 15, 2000
New York, New York
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<PAGE>
NEUBERGER BERMAN EQUITY FUNDS
NEUBERGER BERMAN EQUITY TRUST
NEUBERGER BERMAN EQUITY ASSETS
NEUBERGER BERMAN EQUITY SERIES
NEUBERGER BERMAN INCOME FUNDS
NEUBERGER BERMAN INCOME TRUST
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
800-877-9700
COMBINED PROXY STATEMENT AND PROSPECTUS
This Combined Proxy Statement and Prospectus, which includes a Notice of
Special Meeting of Shareholders, a Proxy Statement and one or more Proxy Cards,
is for the special meeting of shareholders of the Neuberger Berman Equity group
of funds (Neuberger Berman Equity Funds, Equity Trust, Equity Assets, and Equity
Series) and the Neuberger Berman Income group of funds (Neuberger Berman Income
Funds and Income Trust), to be held on October 31, 2000, and any adjournment
thereof ("Meeting").
This Combined Proxy Statement and Prospectus contains information about
several proposals that relate to the Neuberger Berman funds. Some proposals
relate to some of the funds but not others, so depending on which funds you own,
you may not be asked to vote on all of the proposals.
PROPOSAL 1 (APPLIES TO ALL SHAREHOLDERS OF ALL THE FUNDS): To elect Trustees to
serve on the Board of Trustees until their successors are duly elected and
qualified.
PROPOSAL 2 (APPLIES TO ALL SHAREHOLDERS OF ALL THE FUNDS): To approve a change
in a fundamental investment limitation.
PROPOSAL 3 (APPLIES TO ALL SHAREHOLDER OF ALL THE FUNDS): To ratify the
selection of independent auditors or accountants for each fund.
PROPOSAL 4 (APPLIES TO SHAREHOLDERS OF: NB CENTURY TRUST
NB FOCUS TRUST AND NB FOCUS ASSETS
NB GENESIS TRUST, NB GENESIS ASSETS AND
NB GENESIS INSTITUTIONAL
NB GUARDIAN TRUST AND NB GUARDIAN ASSETS
NB INSTITUTIONAL CASH TRUST
NB INTERNATIONAL TRUST
NB LIMITED MATURITY BOND TRUST
NB MANHATTAN TRUST AND NB MANHATTAN
ASSETS
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<PAGE>
NB MILLENNIUM TRUST AND NB MILLENNIUM
ASSETS
NB PARTNERS TRUST AND NB PARTNERS ASSETS
NB REGENCY TRUST
NB SOCIALLY RESPONSIVE TRUST AND NB
SOCIALLY RESPONSIVE ASSETS
NB TECHNOLOGY TRUST):
To approve an Agreement and Plan of Reorganization ("Reorganization Plan")
providing for the reorganization of each fund from the current two-level
master-feeder structure to a single-level multi-class structure.
PROPOSAL 5 (APPLIES TO SHAREHOLDERS OF NB GENESIS TRUST, NB GUARDIAN TRUST AND
NB PARTNERS TRUST): To approve a distribution and shareholder services plan to
authorize each fund to spend annually 0.10% of average daily net assets to
obtain distribution and/or shareholder services.
PROPOSAL 6 (APPLIES TO SHAREHOLDERS OF NB CASH RESERVES): To approve a change to
the fund's fundamental restriction on industry concentration to permit
concentration in the financial services group of industries.
PROPOSAL 7 (APPLIES TO SHAREHOLDERS OF NB GOVERNMENT MONEY FUND): To approve a
change in the fund's fundamental policies to (A) permit the fund to invest in
all securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (B) permit the fund to invest in
repurchase agreements in an effort to earn more income; (C) modify the fund's
borrowing policy to permit the fund to use reverse repurchase agreements; and
(D) modify the fund's lending policy to permit the fund to loan portfolio
securities.
THE REORGANIZATION. The proposed Reorganization would not alter your
current investment program. It would simply change the operational structure
of the Neuberger Berman funds, so that they may benefit from certain
efficiencies and cost savings. The funds would be changing to a structure that
is more common in the mutual fund industry.
Like your current fund, the new single-level fund is an open-end,
management investment company comprised of a group of diversified series. These
series have investment programs that are identical to the similarly named series
of your current fund. Unlike your current fund, however, each series of the new
fund has classes of shares. After the Reorganization, you will hold shares of
the class that corresponds to your current fund.
If you are a shareholder of Neuberger Berman Equity Trust, Equity Series
or Equity Assets, then after the Reorganization, you will hold class shares of a
corresponding series of NEUBERGER BERMAN EQUITY FUNDS. For example, if you
currently hold shares of Guardian Trust, after the Reorganization you will hold
Trust Class shares of the Guardian series of Neuberger Berman Equity Funds.
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<PAGE>
Likewise, if you are a shareholder of Neuberger Berman Income Trust, then
after the Reorganization, you will hold Trust class shares of a corresponding
series of NEUBERGER BERMAN INCOME FUNDS.
If you approve the Agreement and Plan of Reorganization ("Reorganization
Plan") your fund would become part of a new single-level fund that invests its
assets directly in the securities markets. The new fund would have classes of
shares that would correspond to the current feeder funds. The investment
program, management arrangements, and operations of the new single-level fund
would be identical to those of your present fund, and your rights as a
shareholder would remain essentially unchanged.
The Board of Trustees of each fund that proposes to participate in the
Reorganization and Neuberger Berman Management Inc. ("NBMI"), the funds'
investment manager, administrator and distributor, believe that the
Reorganization:
o may produce in certain administrative efficiencies and cost savings for
the funds,
o may enhance its ability to market and sell shares of the funds by
utilizing the more common multi-class structure
This Combined Proxy Statement and Prospectus sets forth concisely the
information that a shareholder of the funds should know before voting on the
proposed Reorganization and other actions. It should be read and retained for
future reference. The current prospectuses of Neuberger Berman Equity Funds,
dated December 1, 1999, and Neuberger Berman Income Funds, dated March 1, 2000,
are incorporated by reference into (and legally a part of) Proposal 4 of this
Combined Proxy Statement and Prospectus. If you are being asked to vote on
Proposal 4, copies of the prospectuses are enclosed for your reference.
(Shareholders of Equity Funds and Income Funds are not receiving prospectuses
because you are not voting on Proposal 4 and because you have already received
one or both as current shareholders. You may request another prospectus by
contacting the funds at the address or telephone number below.)
Additional information about Neuberger Berman Equity Funds and Income
Funds appears in the funds' Statements of Additional Information dated December
1, 1999, which are also incorporated by reference into this Combined Proxy
Statement and Prospectus. The Statements of Additional Information are available
without charge by writing the Neuberger Berman Funds at 605 Third Avenue, 2nd
Floor New York, New York 10158-0180, or calling at 800-877-9700.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<PAGE>
VOTING INFORMATION
The Boards of Trustees of Neuberger Berman Equity Funds, Equity Trust,
Equity Assets and Equity Series, and the Boards of Trustees of Neuberger Berman
Income Funds and Income Trust (each a "Trust" and collectively, the "Trusts")
are asking you to sign the enclosed proxy card(s) for use at a Special Meeting
of Shareholders of the funds listed on the front cover, to be held on October
31, 2000 at 10:30 a.m. Eastern time, at the offices of Neuberger Berman, LLC,
605 Third Avenue, 41st Floor, New York, New York 10158-3698, and at any
adjournments thereof (the "Meeting"). This combined Proxy Statement and
Prospectus is first being mailed on or about August 15, 2000.
One-third of each fund's shares outstanding and entitled to vote on August
15, 2000 ("Record Date"), represented in person or by proxy, make up a quorum
and must be present for the transaction of business at the Meeting with respect
to that fund. Shares of all funds that make up a single Trust will vote together
for the election of Trustees (Proposal 1), and the presence of one-third of an
entire Trust constitutes a quorum for purposes of that proposal. Each fund's
shareholders will vote separately on each other Proposal with respect to that
fund; if you are a shareholder of more than one fund, you will be voting on each
such Proposal separately with respect to each fund in which you hold shares.
If a quorum is not present at the Meeting or a quorum is present but
sufficient votes to approve any Proposal are not received, or for any other
reason, the persons named as proxies may propose one or more adjournments of the
Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of those shares voting at the Meeting in person or
by proxy. The persons named as proxies will vote those proxies that they are
entitled to vote FOR any proposal in favor of such an adjournment and will vote
those proxies required to be voted AGAINST a proposal against such adjournment.
A shareholder vote may be taken on any one or more of the Proposals in this
Combined Proxy Statement and Prospectus prior to such adjournment if sufficient
votes have been received for approval and it is otherwise appropriate.
If the enclosed proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented by the proxy will be voted in accordance
with the instructions marked on the proxy card. If no instructions are marked on
the proxy card, the proxy will be voted FOR each Proposal described in the
accompanying Notice of Special Meeting of Shareholders and FOR the election of
each candidate nominated by the Board to serve as a Trustee. Proxies that
reflect "broker non-votes" (I.E., shares held by brokers or nominees as to which
(i) instructions have not been received from the beneficial owners or the
persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter) will not be counted for
purposes of determining a quorum and will have no effect on the outcome of the
Proposals. Abstentions will be counted as shares that are present and entitled
to vote for purposes of determining the presence of a quorum and will have a
negative effect on the Proposals. For shares held in individual retirement
accounts (IRA, Roth IRA or SIMPLE Retirement plans), the IRA Custodian shall
vote the shares in the account in accordance with instructions given by the
Depositor. However, if the Depositor fails to provide instructions on how to
vote the shares in the account, the Custodian shall vote the undirected shares
in the same proportion as shares are voted considering all shares of the fund
for which instructions are received.
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<PAGE>
Any shareholder who has given a proxy has the right to revoke it any time
prior to its exercise by attending the Meeting and voting his or her shares in
person, or by submitting a letter of revocation or a later-dated proxy to the
relevant Trust at the address indicated on the enclosed envelope provided with
this Proxy Statement. Any letter of revocation or later-dated proxy must be
received by the Trust prior to the Meeting and must indicate your name and
account number to be effective. Proxies voted by telephone or Internet may be
revoked at any time before they are voted at the Meeting in the same manner that
proxies voted by mail may be revoked.
Proxy solicitations will be made primarily by mail, but may also be made by
telephone, electronic transmission or personal meetings with officers and
employees of NBMI, affiliates of NBMI or other representatives of the Funds.
NBMI serves as principal underwriter and administrator of the Funds. NBMI and
its affiliates will not receive any compensation from the Fund for proxy
solicitation activities. Proxy solicitations may also be made by our proxy
solicitor. If votes are recorded by telephone, our proxy solicitor will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that a shareholder's instructions have been
properly recorded. You may also vote by mail or through a secure Internet site.
The cost of solicitation and the expenses incurred in connection with preparing
this Proxy Statement and its enclosures will be paid by the funds. PLEASE NOTE
THAT WHILE PROXIES MAY BE VOTED BY TELEPHONE OR THROUGH THE INTERNET WITH
RESPECT TO EACH PROPOSAL, ANY PROPOSAL SUBMITTED TO A VOTE AT THE MEETING BY
ANYONE OTHER THAN THE OFFICERS OR TRUSTEES OF THE TRUSTS MAY BE VOTED ONLY IN
PERSON OR BY WRITTEN PROXY.
For soliciting services, our proxy solicitor will be paid fees and expenses
of up to approximately $6,079, $311,209, $133,512, $520,036, $32,724, $154,645,
$46,082, $427,048, $1,856, $19,737, and $1,884 for Neuberger Berman Century,
Focus, Genesis, Guardian, International, Manhattan, Millennium, Partners,
Regency, Socially Responsive and Technology Funds, respectively. Our proxy
solicitor will be paid fees and expenses of up to approximately $457, $70,711,
$180,355, $290,874, $1,006, $25,895, $3,653, $174,892, $6,186, $7,406, and $446
for Neuberger Berman Century, Focus, Genesis, Guardian, International,
Manhattan, Millennium, Partners, Regency, Socially Responsive and Technology
Trust, respectively. Our proxy solicitor will be paid fees and expenses of up to
approximately $2,397, $33,200, $9,642, $1,426, $48, $19,000, and $77 for
Neuberger Berman Focus, Genesis, Guardian, Manhattan, Millennium, Partners and
Socially Responsive Assets, respectively. Our proxy solicitor will be paid fees
and expenses of up to approximately $0 for Neuberger Berman Genesis
Institutional.
For soliciting services, our proxy solicitor will be paid fees and expenses
of up to approximately $69,269, $21,233, $790, $10,913, $17,147, and $1,704 for
Neuberger Berman Cash Reserves, Government Money Fund, High Yield Bond Fund,
Limited Maturity Bond Fund, Municipal Money Fund and Municipal Securities Trust,
respectively. Our proxy solicitor will be paid fees and expenses of up to
approximately $20,563 and $ 9,967 for Neuberger Berman Limited Maturity Bond and
Institutional Cash Trust, respectively.
The funds are separate series of their respective Trusts. For example, each
Equity fund is a series of either NB Equity Funds, NB Equity Trust, NB Equity
Assets or NB Equity Series. Each Equity fund (except for Neuberger Berman
International Fund and International Trust) invests all of its net investable
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<PAGE>
assets in a corresponding master fund, which is a series of Equity Managers
Trust, a New York common law trust registered as an open-end management
investment company. Neuberger Berman International Fund and International Trust
invest in a corresponding master fund, a series of Global Managers Trust, a New
York common law trust registered as an open-end management investment company.
Similarly, each Income Fund is a series of either NB Income Funds or NB
Income Trust. Each Income fund invests all of its net investable assets in a
corresponding master fund, which is a series of Income Managers Trust, a New
York common law trust registered as an open-end management investment company.
NBMI serves as the investment manager and Neuberger Berman, LLC ("Neuberger
Berman") serves as sub-adviser to each series of Equity Managers Trust, Global
Managers Trust and Income Managers Trust. Each Managers Trust series invests in
securities in accordance with an investment objective, policies, and limitations
identical to those of its corresponding funds.
As of May 31, 2000, the following numbers of shares were outstanding with
respect to each fund:
<TABLE>
NEUBERGER BERMAN EQUITY GROUP OF FUNDS
<CAPTION>
-------------------------------------------------------------------------------------------------
SERIES NB EQUITY FUNDS NB EQUITY TRUST NB EQUITY ASSETS NB EQUITY SERIES
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Century 3,078,480 162,298 N/A N/A
-------------------------------------------------------------------------------------------------
Focus 38,666,424 8,898,394 339,934 N/A
-------------------------------------------------------------------------------------------------
Genesis 41,626,081 27,946,499 6,215,023 9,139,474
-------------------------------------------------------------------------------------------------
Guardian 140,791,769 72,377,898 1,789,995 N/A
-------------------------------------------------------------------------------------------------
International 9,280,619 211,885 N/A N/A
-------------------------------------------------------------------------------------------------
Manhattan 53,475,158 5,058,044 201,709 N/A
-------------------------------------------------------------------------------------------------
Millennium 8,703,527 509,827 16,783 N/A
-------------------------------------------------------------------------------------------------
Partners 91,997,828 35,278,693 3,384,097 N/A
-------------------------------------------------------------------------------------------------
Regency 819,438 1,900,095 N/A N/A
-------------------------------------------------------------------------------------------------
Socially 5,176,666 1,967,394 22,359 N/A
Responsive
-------------------------------------------------------------------------------------------------
Technology 1,246,774 200,033 N/A N/A
-------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
NEUBERGER BERMAN INCOME GROUP OF FUNDS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
SERIES NB INCOME FUNDS NB INCOME TRUST
---------------------------------------------------------------------------------------
<S> <C> <C>
Cash Reserves 1,211,106,231 N/A
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Government Money 379,346,979 N/A
---------------------------------------------------------------------------------------
High Yield Bond 1,844,121 N/A
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Institutional Cash N/A 74,600,995
---------------------------------------------------------------------------------------
Limited Maturity Bond 20,161,604 3,804,748
---------------------------------------------------------------------------------------
Municipal Money 299,551,941 N/A
---------------------------------------------------------------------------------------
Municipal Securities Trust 2,770,095 N/A
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</TABLE>
In addition, to the Trust's knowledge, as of May 31, 2000, the following are all
of the beneficial and record owners of more than five percent of each fund.
Except where indicated with an asterisk, the owners listed are record owners.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
NB Century Trust Neuberger & Berman 92.42%
55 Water Street, 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C # 983031311/7
------------------------------------------------------------------------------------------------
National Financial Services Corp 6.33%
For the Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
NB Focus Trust Smith Barney Inc. 22.44%
00109801250
388 Greenwich Street
New York, NY 10012-2339
A/C # 140360494/7
------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
EMJAYCO 11.47%
Omnibus Account
PO Box 170910
Milwaukee, WI 53217
A/C # 140296928
------------------------------------------------------------------------------------------------
American Express Trust Co. 11.81%
Benefit of American Express
Trust Retirement Services Plans
Attn: Pat Brown
50534 AXP Financial Center
Minneapolis, MN 55474
A/C # 140216267-1
------------------------------------------------------------------------------------------------
National Financial Services Corp 6.87%
For the Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
Boston Safe Deposit & Trust Co. TTEE 8.81%
TWA Inc Pilots Directed Acct. Plan &
401K Plan for Pilots of TWA Inc.
Attn: Lisa Bove
135 Santilli Highway #26-0320
Everett, MA 02149-1906
A/C # 140221394-4
------------------------------------------------------------------------------------------------
AETNA Life Insurance & Annuity Co. 7.57%
ACES-Separate Account F
Attn: Valuation Unit TS31
151 Farmington Avenue
Hartford, CT 06156-0001
A/C # 140188621-7
------------------------------------------------------------------------------------------------
NB Genesis Trust Fidelity Investments Inst. OPS Co. as 19.64%
Agent for Certain EE Benefit PL
100 Magellan Way
Mailzone KWIC
Covington, KY 41015
A/C # 140216026-2
------------------------------------------------------------------------------------------------
Smith Barney
00109801250
388 Greenwich Street
New York, NY 10012-2339
------------------------------------------------------------------------------------------------
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<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
National Financial Services Corp 14.53%
For the Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 14011799-0
------------------------------------------------------------------------------------------------
Nationwide Life Insurance Co. 6.55%
QPVA
c/o IPO Portfolio Accounting
PO Box 182029
Columbus, OH 43218-2029
------------------------------------------------------------------------------------------------
NB Guardian Trust The Manufacturers Life Insurance Co. 26.21%
USA
Attn: Rosie Chuck Pension Acctg.
200 Floor Street E NT3
Toronto ON N4W1E5
Canada
A/C # 140317724-1
------------------------------------------------------------------------------------------------
Fidelity Investments Inst. OPS Co. as 14.51%
Agent for Certain EE Benefit PL
100 Magellan Way
Mailzone KWIC Covington, KY 41015
A/C # 140216026-2
------------------------------------------------------------------------------------------------
Nationwide Life Insurance Co. 9.25%
QPVA
c/o IPO Portfolio Accounting
PO Box 182029
Columbus, OH 43218-2029
A/C # 140216217-6
------------------------------------------------------------------------------------------------
Variable Annuity Life Insurance 5.50%
Company (VALIC)
2929 Allen Parkway L7-01
Houston, TX 77019-2197
A/C # 140317787-2
------------------------------------------------------------------------------------------------
Connecticut General Life Insurance 5.38%
Company
350 Church Street
PO Box 2975 M-1-10
Hartford, CT 06104-2975
A/C # 140317726-7
------------------------------------------------------------------------------------------------
- 14 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
National Financial Services Corp 4.94%
For the Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
NB International Trust Chase Manhattan Bank TTEE 23.31%
Various Retirement Plans
Under PPI Retirement Programs
Professional Pensions Inc.
444 Foxon Road
East Haven, CT 06513-2019
A/C # 140215987-5
------------------------------------------------------------------------------------------------
Fleet Trust Corporation 19.08%
FBO Third Party M P Alliances
Attn: David Nabb
PO Box 2197
Boston, MA 02106-2197
A/C # 140224012-4
------------------------------------------------------------------------------------------------
National Financial Services Corp 17.71%
For the Exclusive Benefit of Our
Customers
200 Liberty Street
1 World Financial Center
Attn: Mutual Funds Dept - 5th Floor
New York, NY 10281-1003
A/C # 140117994-0
------------------------------------------------------------------------------------------------
Neuberger Berman Trust 9.87%
T/F Lillian Vernon Corp*
401K Profit Sharing Plan
1 Theall RDL
Rye, NY 10580-1404
A/C # 140318915-8
------------------------------------------------------------------------------------------------
Smith Barney Inc 22.97%
00109801250
388 Greenwich Street
New York, NY 10012-2339
A/C # 140360494-7
------------------------------------------------------------------------------------------------
NB Manhattan Trust The Northern Trust Co TTEE 49.03%
Pro Case Corporation 22-75833
Attn: Ken King
Chicago, IL 60675-2956
A/C # 140214077-4
------------------------------------------------------------------------------------------------
- 15 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
MAC & Co A/C 195-643 13.91%
AEOF1956432
P.O. Box 3198
Mutual Funds Operations
Pittsburgh, PA 15230-3198
A/C # 140162422-0
------------------------------------------------------------------------------------------------
Fleet National Bank 9.49%
Aetna/Fleet Directed Trustee
U/A Dtd 4/22/96
151 Farmington Avenue, Suite T531
Hartford, CT 06156-0001
A/C # 140319049-3
------------------------------------------------------------------------------------------------
Fidelity Investments Inst Ops 6.18%
CO as Agency for Certain EE Benefit
PL
Mailzone KWIC
Covington, KY 41015
A/C # 140216026-2
------------------------------------------------------------------------------------------------
NB Millennium Trust National Financial Serv Corp 86.68%
For the Exclusive Benefit of Our
Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities 6.88%
Corporation
Pershing Division
Mutual Fund Balancing
P.O. Box 2052
Jersey City, NY 07303-2052
A/C # 140219348-8
------------------------------------------------------------------------------------------------
NB Partners Trust Nationwide Life Insurance 20.06%
QPVA
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
A/C # 140216217-6
------------------------------------------------------------------------------------------------
Connecticut General Life Insurance 11.27%
Company
350 Church Street
P.O. Box 2975 N-110
Hartford, CT 06104-2975
A/C # 140317726-7
------------------------------------------------------------------------------------------------
- 16 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
PRC Inc 10.43%
c/o T. Rowe Price Financial
Attn: Asset Room
P.O. Box 17215
Baltimore, MD 21297-1215
A/C # 140215856-2
------------------------------------------------------------------------------------------------
National Financial Serv Corp for the 8.17%
Exclusive Benefit of Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
Fidelity Investments Instit Oper Co as 7.58%
Agent for Certain Benefit Pln
100 Magellan Way
Mailzone KWIC Covington, KY 41015-1999
A/C # 140216026-2
------------------------------------------------------------------------------------------------
Northern Trust Co TTEE 6.12%
FBO: Phycor Savings Plan DV
P.O. Box 92956
Chicago, IL 60675-2956
A/C # 1403777065-5
------------------------------------------------------------------------------------------------
NB Regency Trust Boston Safe Deposit & Trust Co TTEE 97.77%
TWA Inc Pilots Directed Acct Plan
& 401K Plan for Pilots of TWA Inc
Attn: Lisa Bove
135 Santilli Hwy #026-0320
Everett, MA 02149-1906
A/C # 140221394-4
------------------------------------------------------------------------------------------------
NB Socially Responsive Trust ICMA Retirement Trust 60.32%
777 N Capitol Street NE
Washington, DC 20002-4239
A/C # 140317410-5
------------------------------------------------------------------------------------------------
Delaware Charter Guarantee & Trust 6.74%
Cust FBO Principal Mutual Life Ins
CD DTD 1/1/96
PO Box 8706
Wilmington, DE 19899-8706
A/C # 140317436-7
------------------------------------------------------------------------------------------------
- 17 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
Chase Manhattan Bank TTEE 6.88%
Avon Products Inc
Svngs & Stock Ownership 12/28/84
1345 Avenue of the Americas
New York, NY 10105-0302
A/C # 141016331-6
------------------------------------------------------------------------------------------------
National Financial Serv Corp 5.22%
For The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
The Union Central Life Ins Co 5.15%
401K Group SEP Acct
1876 Waycross RD
PO Box 40888
Cincinnati, OH 45240-0888
A/C # 141011568-1
------------------------------------------------------------------------------------------------
NB Technology Trust Neuberger & Berman 99%
55 Water Street, 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C# 983000019
------------------------------------------------------------------------------------------------
NB Focus Assets FTC & CO 21.71%
Attn: Datalynx (House Account)
PO Box 173736
Denver, CO 80217-3736
A/C # 141011560-7
------------------------------------------------------------------------------------------------
Smith Barney Corp Trust Co TTEE 20.27%
Smith Barney 401K
Advisor Group Trust
Two Tower Center
PO Box 1063
E Brunswick, NJ 08816-1063
A/C # 142010744-3
------------------------------------------------------------------------------------------------
First Union Nat'l Bank TTEE 19.81%
FBO FUNB Reinvestment Account
A/C # 1080824434
1525 W Wt Harris Blvd NC-1151
Charlotte, NC 28262-1063
A/C # 994000003-5
------------------------------------------------------------------------------------------------
- 18 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
Morris & Co 17.53%
c/o First Source Bank
Attn: Trust Operations
PO Box 1602
South Bend, IN 46634-1602
A/C # 140318696-0
------------------------------------------------------------------------------------------------
Key Trust Co NA 11.65%
FBO Prism
4900 Tiedeman RD
Brooklyn, OH 44144-2338
A/C # 140317435-4
------------------------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette 6.02%
Securities Corporation
Pershing Division
Mutual Fund Balancing
PO Box 2052
Jersey City, NJ 07303-2052
A/C # 142011195-0
------------------------------------------------------------------------------------------------
NB Genesis Assets Donaldson, Lufkin & Jenrette 40.06%
Securities Corporation
Pershing Division
Mutual Fund Balancing
PO Box 2052
Jersey City, NJ 07303-2052
A/C # 142011195-0
------------------------------------------------------------------------------------------------
Key Trust Co. 29.22%
FBO Prism
4900 Tiedeman RD
Brooklyn, OH 44144-2302
A/C # 140317435-4
------------------------------------------------------------------------------------------------
NB Guardian Assets Travelers Insurance Company #4 97.07%
Attn: Bob Iagrossi 5MS
Shareholder Accounting
One Tower Square
Hartford, CT 06183-0002
A/C # 140296923-0
------------------------------------------------------------------------------------------------
NB Manhattan Assets BHC Securities 76.94%
Trade House Account
Attn: Mutual Fund Dept.
1 Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
A/C # 142011785-7
------------------------------------------------------------------------------------------------
- 19 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
BSC as Agent for 7.02%
FBO BBH-SD
1375 Peachtree Street NE STE 300
Atlanta, GA 30309-3112
A/C # 141016563-1
------------------------------------------------------------------------------------------------
Neuberger Berman 5.71%
Management Inc.*
605 Third Avenue 2nd Floor
New York, NY 10158-0180
A/C # 140289664-0
------------------------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette 5.90%
Securities Corporation
Pershing Division
Mutual Fund Balancing
PO Box 2052
Jersey City, NJ 07303-2052
A/C # 142011195-0
------------------------------------------------------------------------------------------------
NB Millennium Assets Charles Schwab & Co. Inc. 91.11%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 142011784-4
------------------------------------------------------------------------------------------------
NB Socially Neuberger Berman 44.72%
Responsive Assets Management Inc.*
Attn: Nick Altomare
605 Third Avenue 37th Floor
New York, NY 10158-0180
A/C # 105785000-8
------------------------------------------------------------------------------------------------
First Union Nat'l Bank Cust 13.91%
Various Retirement Plan
A/C # 1080826922
1525 W Wt Harris Blvd NC-1151
Charlotte, NC 28262-8522
A/C # 100000000-9
------------------------------------------------------------------------------------------------
Fidelity Investments Institutional 14.54%
Operations Co Inc. (FIIOC) As Agent
For Peet's Tea Coffee Inc. Savings
Retirement Plan #09771
100 Magellan Way
Covington, KY 41015-1999
A/C # 141017216-1
------------------------------------------------------------------------------------------------
- 20 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co. Inc. 8.77%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 142011784-4
------------------------------------------------------------------------------------------------
Fidelity Investments Institutional 8.57%
Operations Co Inc. (FIIOC) As Agent
For Inforonics Retirement 401K Plan 09897
100 Magellan Way (KWIC)
Covington, KY 41015-1999
A/C # 141016349-7
------------------------------------------------------------------------------------------------
Fidelity Investments Institutional 8.02%
Operations Co Inc. (FIIOC) As Agent
For Citizens Enterprises Corp.
401K Plan
100 Magellan Way (KWIC)
Covington, KY 41015-1999
A/C # 140379131-3
------------------------------------------------------------------------------------------------
NB Century Fund Neuberger & Berman 17.52%
55 Water Street 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C # 983031311-7
------------------------------------------------------------------------------------------------
NB Focus Fund Charles Schwab & Co. Inc. 9.64%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
NB Genesis Fund Charles Schwab & Co. Inc. 25.56%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
Union Central Life 5.50%
Insurance Co
Attn: Mutual Funds Dept Station 3
PO Box 40888
Cincinnati, OH 45210-0888
A/C # 140041406-2
------------------------------------------------------------------------------------------------
- 21 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
NB Guardian Fund Charles Schwab & Co. Inc. 19.77%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
NB International Fund Neuberger & Berman 11.77%
55 Water Street 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C # 140221735-1
------------------------------------------------------------------------------------------------
Charles Schwab & Co. Inc. 9.31%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
Neuberger & Berman Trust Co.* 5.88%
Neuberger & Berman Employees
Profit Sharing Plan UTD 5/20/71
Attn: Al Boccardo
605 Third Avenue, 36th Floor
New York, NY 10158-0180
A/C # 140247272-7
------------------------------------------------------------------------------------------------
NB Manhattan Fund Charles Schwab & Co Inc. 6.13%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
NB Regency Fund Neuberger & Berman 26.75%
Attn: Ron Staib, OPS Control
55 Water Street, Floor 27
New York, NY 10041-0001
A/C # 983031113-5
------------------------------------------------------------------------------------------------
Charles Schwab & Co. Inc. 26.52%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
NB Partners Fund Charles Schwab & Co. Inc. 14.00%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
- 22 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
NB Socially Responsive Fund Charles Schwab & Co. Inc. 23.21%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-7
------------------------------------------------------------------------------------------------
NB Technology Fund Neuberger Berman, LLC* 7%
001-17000-10
55 Water Street. 27th Floor
New York, NY 10041-0001
A/C# 325000008
------------------------------------------------------------------------------------------------
Neuberger Berman, LLC* 7%
020-02900-13
55 Water Street. 27th Floor
New York, NY 10041-0001
A/C# 325000034
------------------------------------------------------------------------------------------------
Neuberger Berman, LLC* 6%
020-12002-19
55 Water Street. 27th Floor
New York, NY 10041-0001
A/C# 325000019
------------------------------------------------------------------------------------------------
NB Genesis Institutional Wilmington Trust Co. 59.71%
FBO PricewaterhouseCoopers LLP
Emp Partners Psugs A/C 500854
c/o Mutual Funds
P.O. Box 8971
Wilmington, DE 19899-8971
A/C#140379014
------------------------------------------------------------------------------------------------
Wilmington Trust Co. 29.95%
FBO PricewaterhouseCoopers LLP
Emp Partners P/S A/C 500824 U/A 03-01-00 c/o
Mutual Funds P.O. Box 8971 Wilmington, DE
19899-8971 A/C#140379010
------------------------------------------------------------------------------------------------
Wilmington Trust Co. 10.33%
FBO PricewaterhouseCoopers LLP
Emp Ret Ben Accum A/C 5007974
U/A 03-01-00 c/o
Mutual Funds
P.O. Box 8971
Wilmington, DE 19899-8971
A/C#140379012
------------------------------------------------------------------------------------------------
- 23 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
Gary N. Skoloff* 11.49%
Saul A. Wolfe
Skoloff & Wolfe Target
Benefit Trust DTD 11-1-95
293 Eisenhower Parkway
Livingston, NJ 07039-1711
A/C # 140216230-9
------------------------------------------------------------------------------------------------
Chase Manhattan Bank TTEE 7.96%
Various Retirement Plans Under PPI
Retirement Programs
Professional Pensions, Inc.
444 Foxon Road
East Haven, CT 06513-2019
A/C # 140215987-5
------------------------------------------------------------------------------------------------
National Financial Service Corp. for the 6.92%
Exclusive Benefit of Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
A/C # 140117994-0
------------------------------------------------------------------------------------------------
NB Cash Reserves Neuberger & Berman 78.74%
55 Water Street, 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C # 982009417-4
------------------------------------------------------------------------------------------------
NB Government Neuberger & Berman 81.70%
Money Fund 55 Water Street, 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C # 982009417-4
------------------------------------------------------------------------------------------------
NB High Yield Fund Neuberger & Berman 30.20%
55 Water Street, 27th Floor
Attn: Ron Staib, OPS Control
New York, NY 10041-0001
A/C # 98302231-2
------------------------------------------------------------------------------------------------
NB Limited Maturity Neuberger & Berman Trust Co. 6.45%
Bond Fund Neuberger & Berman Employees
Profit Sharing Plan UTD 5/20/71*
Attn: Al Boccardo
605 Third Avenue, 36th Floor
New York, NY 10158-0180
A/C # 140247272-7
------------------------------------------------------------------------------------------------
- 24 -
<PAGE>
------------------------------------------------------------------------------------------------
FUND NAME AND ADDRESS OWNER PERCENT OF THE
FUND OWNED
------------------------------------------------------------------------------------------------
<S> <C> <C>
Neuberger & Berman LLC 5.08%
Bodman Foundation
John N. Irwin III Pres & Treas
C/O Institutional Equity Dept
605 Third Ave 22 Floor
New York, NY 10158-2299
A/C # 143030908-2
------------------------------------------------------------------------------------------------
NB Limited Maturity Charles Schwab & Co. Inc. 23.58%
Bond Fund Attn: Mutual Funds
125 Broad Street, FL 15
New York, NY 10004-2400
A/C # 140187165-9
------------------------------------------------------------------------------------------------
QPVA
c/o IPO Portfolio Accounting
PO Box 182029
Columbus, OH 43218-2029
A/C # 136753000-5
------------------------------------------------------------------------------------------------
Neuberger & Berman Trust Co.* 5.61%
Neuberger & Berman Employees
Profit Sharing Plan UTD 05/20/71
Attn: Al Boccardo
605 Third Ave, 36th Floor
New York, NY 10158-0180
A/C # 140247272-7
------------------------------------------------------------------------------------------------
NB Municipal Charles Schwab & Co. Inc. 25.18%
Securities Trust Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A/C # 140187165-9
------------------------------------------------------------------------------------------------
</TABLE>
At May 31, 2000, the Trustees and officers of the Trusts as a group
beneficially owned less than 1% of the shares of each fund. Certain Trustees and
officers of the Trusts are employees and shareholders of NBMI, which will
benefit if the Proposal 5, related to the Distribution and Shareholder Services
Plan, is approved.
COPIES OF THE FUNDS' MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS OF THE NEUBERGER BERMAN EQUITY GROUP OF FUNDS (NEUBERGER BERMAN
EQUITY FUNDS, EQUITY TRUST, EQUITY ASSETS OR EQUITY SERIES) MAY REQUEST COPIES
OF THE FUNDS' ANNUAL REPORT FOR THE FISCAL YEAR ENDED AUGUST 31, 1999, INCLUDING
AUDITED FINANCIAL STATEMENTS, AND THE FUNDS' SEMI-ANNUAL REPORT FOR THE PERIOD
ENDED FEBRUARY 29, 2000, AT NO CHARGE BY WRITING NBMI AT 605 THIRD AVENUE, 2ND
FLOOR, NEW YORK, NEW YORK 10158-0180, OR BY CALLING TOLL FREE 800-877-9700.
- 25 -
<PAGE>
SHAREHOLDERS OF THE NEUBERGER BERMAN INCOME GROUP OF FUNDS (NEUBERGER
BERMAN INCOME FUNDS OR INCOME TRUST) MAY REQUEST COPIES OF THE FUNDS' ANNUAL
REPORT FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999, INCLUDING AUDITED FINANCIAL
STATEMENTS, AND THE FUNDS' SEMI-ANNUAL REPORT FOR THE PERIOD ENDED APRIL 30,
2000, AT NO CHARGE BY WRITING NBMI AT 605 THIRD AVENUE, 2ND FLOOR, NEW YORK, NEW
YORK 10158-0180, OR BY CALLING TOLL FREE 800-877-9700.
GENERAL OVERVIEW OF THE PROPOSALS
The following is a brief overview regarding the matters being presented for
your approval at the Meeting:
PROPOSAL 1 (SHAREHOLDERS OF ALL FUNDS): To elect a Board of Trustees. The
Neuberger Berman funds are composed of three fund groups - the equity funds, the
income funds, and the insurance funds. Currently, each fund group has its own
Board of Trustees, with very limited overlap in membership. The Boards,
including all of the independent Trustees, and management believe that
considerable efficiencies can be realized by having the same individuals serve
on each of the Boards.
PROPOSAL 2 (SHAREHOLDERS OF ALL FUNDS): To change the fundamental
limitation requiring diversification of investments among different issuers so
as to allow the funds to invest to a greater extent in securities issued by
other investment companies. This change is intended primarily to allow the funds
to take full advantage of investments allowed under the law while remaining
diversified funds. The change will allow the funds to invest excess cash in a
money market fund managed by NBMI. The Board believes that such combined
management would result in greater efficiency, which could produce greater
return to investors.
PROPOSAL 3 (SHAREHOLDERS OF ALL FUNDS): To ratify the selection of the
funds' independent auditors or accountants.
PROPOSAL 4 (SHAREHOLDERS OF EQUITY TRUSTS, EQUITY ASSETS, EQUITY SERIES AND
INCOME TRUSTS): To convert each fund from the current two-level master-feeder
structure to a single-level multi-class structure. The investment programs of
the funds and the rights of shareholders would be unaffected by this change,
except in certain minor respects explained below.
PROPOSAL 5 (SHAREHOLDERS OF GENESIS TRUST, GUARDIAN TRUST, AND PARTNERS
TRUST): To approve a distribution and shareholder services plan whereby each of
those funds would be authorized to spend up to 0.10% (one-tenth of one percent)
of its average net assets each year to obtain distribution and/or shareholder
services. Currently, all expenses of share distribution are paid by NBMI. If the
Proposal is approved, the Distribution and Shareholder Services Plan would
increase the annual expenses indirectly borne by the shareholders of each Fund
by 0.10% of average daily net assets.
PROPOSAL 6 (SHAREHOLDERS OF CASH RESERVES ONLY): To change Cash Reserves'
fundamental restriction on industry concentration to permit concentration in the
financial services group of industries.
- 26 -
<PAGE>
PROPOSAL 7 (SHAREHOLDERS OF GOVERNMENT MONEY FUND ONLY): To change
Government Money Fund's fundamental policies to:
o permit the fund to invest in all securities issued or guaranteed as to
principal or interest by the U.S. Government, its agencies or
instrumentalities;
o permit the fund to invest in repurchase agreements in an effort to earn
more income;
o modify the fund's borrowing policy to permit the fund to use reverse
repurchase agreements;
o modify the fund's lending policy to permit the fund to lend portfolio
securities.
PROPOSAL 8 (SHAREHOLDERS OF ALL FUNDS): To vote on such other matters as
may properly come before the Meeting. The funds are not currently aware of any
such matters.
- 27 -
<PAGE>
PROPOSAL 1. ELECTION OF TRUSTEES (ALL FUNDS)
The Boards of Trustees of the funds propose that shareholders elect the
individuals named in the table below as members of one Board of Trustees that
would serve all of the funds. With this proposal, the separate Boards of the
three different fund groups that make up the Neuberger Berman family of mutual
funds - the equity funds group, the income funds group, and the insurance funds
group - intend to consolidate, so the same individuals would serve on the Boards
of all three groups of funds.
Currently, each of these different groups has its own Board of Trustees
(several trustees serve on the boards of more than one group). For seven years,
the multiple boards have had separate meetings, but often have reviewed the same
or substantially the same policy issues, contractual arrangements and other
matters for their respective fund groups. The trustees of each of these Boards
have agreed that both the funds and NBMI would enjoy substantial efficiencies if
the same individuals served as Trustees of all of the funds in the Neuberger
Berman fund family.
This consolidation was initially proposed by NBMI at a time when several of
the Boards were contemplating shareholder meetings to fill Board vacancies
created by retirements. The proposal was taken up by the independent trustees of
each fund group (i.e., those who do not fall within the definition of
"interested person" in the Investment Company Act of 1940, as amended ("1940
Act") ("Independent Trustees")) and discussed at several meetings over a period
of months. The Boards explored the potential benefits and drawbacks of the
proposal, as well as various alternatives. They noted that consolidating the
three boards would reduce the duplication of board materials and reports, which
are comprehensive and often lengthy, and would avoid the need for repeated
presentations by the same personnel at the different meetings.
The Independent Trustees also considered that all Boards in the Neuberger
Berman fund family were actively seeking additional members, or soon would be,
and that consolidation of the Boards would produce a pool of candidates already
familiar with (1) the Neuberger Berman fund family, its manager, underwriter,
administrator, and methods of operation, (2) the mutual fund business and the
comprehensive regulatory regime under which it operates, as well as (3) the
special responsibilities that the law assigns to mutual fund trustees.
Therefore, each fund will be able to preserve the continuity of its current
Board's leadership while benefiting from the added knowledge and experience of
the other Neuberger Berman fund trustees. They considered the potential cost
savings, the ability of the Boards to act faster and in a more coordinated
fashion, and whether the benefits to NBMI would benefit the shareholders. They
also considered the potential size of the combined Board, noting that it would
be larger than the boards of most other mutual funds. They considered the effect
that consolidation might have on the Board's working style and the working
relationships among the members of each board, and the potential effect of
attrition over the next several years.
The matter was then taken up by the Nominating Committee of each Board,
which is also composed entirely of Independent Trustees. The Nominating
Committee considered the qualifications and backgrounds of the candidates, and
the expressed desire of certain members of the various Boards to retire.
- 28 -
<PAGE>
Unless you give instructions on the enclosed proxy card to withhold your
vote for any candidate, your shares will be voted "FOR" the election of each of
the listed nominees. If any or all of the nominees should withdraw or otherwise
become unavailable for election, your shares will be voted "FOR" such other
nominee or nominees as the Nominating Committee may recommend. Each nominee has
indicated his or her willingness to serve if elected. If elected, each nominee
will hold office until his or her successor is elected and qualified, or until
he or she sooner retires, resigns, dies, or is removed from office as provided
in each fund's Trust Instrument.
If each of the nominees is elected, they will constitute the entire Board
of Trustees of each Trust. At May 31, 2000, the trustees and officers of each
fund, as a group, owned beneficially or of record less than 1% of the
outstanding shares of each series of each fund.
The following table lists the candidates. Unless otherwise indicated, each
candidate has engaged in the principal occupation listed for at least the last
five years, although not necessarily in the same capacity. As indicated, each of
the nominees (except Mr. Seip) currently serves as a Trustee of one or more
funds; of the candidates, all except Ms. Harvey, Mr. Cannon, Mr. Kassen, Mr.
Seip and Mr. Sundman were elected by shareholders in 1993 or 1994.
Present Position with the Neuberger Berman
Name, Age, and Address (1) Funds; Business Experience During Past Five
---------------------------- Years; Other Trusteeships (2)
-------------------------------------------
John Cannon (70) TRUSTEE OF INCOME FUNDS, INCOME TRUST, AND
CDC Capital Management INCOME MANAGERS TRUST (SINCE 1994). Chairman
450 Sentry Parkway, Suite 105 and Chief Investment Officer of CDC Capital
P.O. Box 1212 Management (registered investment adviser)
Blue Bell, PA 19422 (1993-present).
Faith Colish (64) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST,
63 Wall Street EQUITY ASSETS, AND EQUITY MANAGERS TRUST
24th Floor (SINCE 1993); EQUITY SERIES (SINCE 1998); AND
New York, NY 10005 NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
(SINCE 1984).
Attorney at Law, Faith Colish, A Professional
Corporation.
TRUSTEE OF NEUBERGER BERMAN ADVISERS MANAGEMENT
Walter G. Ehlers (67) TRUST (SINCE 1989). Consultant, Director of
6806 Suffolk Place the Turner Corporation, A.B. Chance Company and
Harvey Cedars, NJ 08008 Crescent Jewelry, Inc.
- 29 -
<PAGE>
Present Position with the Neuberger Berman
Name, Age, and Address (1) Funds; Business Experience During Past Five
---------------------------- Years; Other Trusteeships (2)
-------------------------------------------
C. Anne Harvey (62) TRUSTEE OF NEUBERGER BERMAN ADVISERS MANAGEMENT
2555 Pennsylvania Avenue, N.W. TRUST (SINCE 1998). Director of American
Washington, D.C. 20037 Association of Retired Persons ("AARP") Program
Services and Administrator of AARP Foundation;
The National Rehabilitation Hospital's Board of
Advisors; Individual Investors Advisory
Committee to the New York Stock Exchange Board
of Directors; Steering Committee for the U.S.
Securities and Exchange Commission Facts on
Saving and Investing Campaign; and American
Savings Education Council's Policy Board
(ASEC).
Barry Hirsch (67) TRUSTEE OF INCOME FUNDS, INCOME TRUST AND
Loews Corporation INCOME MANAGERS TRUST (SINCE 1993). Senior
667 Madison Avenue Vice President, Secretary, and General Counsel
7th Floor of Loews Corporation (diversified financial
New York, NY 10021 corporation).
Michael M. Kassen* (47) PRESIDENT AND TRUSTEE OF EQUITY FUNDS, EQUITY
TRUST, EQUITY ASSETS, EQUITY SERIES AND EQUITY
MANAGERS TRUST; PRESIDENT OF GLOBAL MANAGERS
TRUST (SINCE 1999). Executive Vice President,
Chief Investment Officer of Neuberger Berman
LLC; Chairman and Director of NBMI; Executive
Vice President, Chief Investment Officer and
Director of Neuberger Berman Inc.
Robert A. Kavesh (72) TRUSTEE OF INCOME FUNDS, INCOME TRUST AND
110 Bleecker Street INCOME MANAGERS TRUST (SINCE 1993). Professor
Apt. 24B of Finance and Economics at Stern School of
New York, NY 10012 Business, New York University.
Howard A. Mileaf (63) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST, EQUITY
WHX Corporation ASSETS, AND EQUITY MANAGERS TRUST (SINCE 1993);
110 East 59th Street EQUITY SERIES (SINCE 1998); GLOBAL MANAGERS
30th Floor TRUST (SINCE 1994); AND NEUBERGER BERMAN
New York, NY 10022 ADVISERS MANAGEMENT TRUST (SINCE 1999). Vice
President and Special Counsel to WHX
Corporation (holding company) since 1992;
Director of Kevlin Corporation (manufacturer of
microwave and other products).
- 30 -
<PAGE>
Present Position with the Neuberger Berman
Name, Age, and Address (1) Funds; Business Experience During Past Five
---------------------------- Years; Other Trusteeships (2)
-------------------------------------------
Edward I. O'Brien* (71) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST, EQUITY
12 Woods Lane ASSETS, AND EQUITY MANAGERS TRUST (SINCE 1993);
Scarsdale, NY 10183 AND EQUITY SERIES (SINCE 1998). Private
Investment Management; President of the
Securities Industry Association ("SIA")
(securities industry's representative in
government relations and regulatory matters at
the federal and state levels) from 1974 to
1992; Adviser to SIA from November 1992 to
November 1993; Director of Legg Mason, Inc.
John T. Patterson, Jr. (72) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST, EQUITY
7082 Siena Court ASSETS AND, EQUITY MANAGERS TRUST (SINCE 1993);
Boca Raton, FL 33433 GLOBAL MANGERS TRUST (SINCE 1994); AND EQUITY
SERIES (SINCE 1998). Retired. Formerly,
President of SOBRO (South Bronx Overall
Economic Development Corporation).
John P. Rosenthal (67) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST, EQUITY
Burnham Securities Inc. ASSETS AND EQUITY MANGERS TRUST (SINCE 1993);
Burnham Asset Management Corp. AND GLOBAL MANAGERS TRUST (SINCE 1994). Senior
1325 Avenue of the Americas Vice President of Burnham Securities Inc. (a
26th Floor registered broker-dealer) since 1991.
New York, NY 10019
William E. Rulon (67) TRUSTEE OF INCOME FUNDS, INCOME TRUST AND
2980 Bayside Walk INCOME MANAGERS TRUST (SINCE 1993). Retired.
San Diego, CA 92109 Senior Vice President of Foodmaker, Inc.
(operator and franchiser of restaurants) until
January 1997; Secretary of Foodmaker, Inc.
until July 1996.
Cornelius T. Ryan (68) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST, EQUITY
Oxford Bioscience ASSETS AND EQUITY MANAGERS TRUST (SINCE 1993);
Partners AND EQUITY SERIES (SINCE 1998). General
315 Post Road West Partner of Oxford Partners and Oxford
Westport, CT 06880 Bioscience Partners (venture capital
partnerships) and President of Oxford Venture
Corporation; Director of Capital Cash
Management Trust (money market fund) and Prime
Cash Fund.
- 31 -
<PAGE>
Present Position with the Neuberger Berman
Name, Age, and Address (1) Funds; Business Experience During Past Five
---------------------------- Years; Other Trusteeships (2)
-------------------------------------------
Tom Decker Seip (50) NOMINEE. General Partner of Seip Investments
30 Ridge Lane LP (a private investment partnership); Member
Orinda, CA 94563 of the Board of Directors of Offroad Capital
Inc. and E-Finance Corporation (pre-public
internet commerce companies); Trustee of
Hambrecht and Quist Fund Trust; Member of the
Board of Directors of AmericaOne; Senior
executive at the Charles Schwab Corporation
from 1983 to 1999; including Chief Executive
Officer of Charles Schwab Investment
Management, Inc. and Trustee of Schwab Family
of Funds and Schwab Investments from 1997 to
1998; Executive Vice President-Retail Brokerage
for Charles Schwab Investment Management from
1994 to 1997.
Gustave H. Shubert (71) TRUSTEE OF EQUITY FUNDS, EQUITY TRUST, EQUITY
13838 Sunset Boulevard ASSETS AND EQUITY MANAGERS TRUST (SINCE 1993);
Pacific Palisades, CA 90272 AND EQUITY SERIES (SINCE 1998). Senior
Fellow/Corporate Advisor and Advisory Trustee
of Rand (a non-profit public interest research
institution) since 1989; Honorary Member of the
Board of Overseers of the Institute for Civil
Justice, the Policy Advisory Committee of the
Clinical Scholars Program at the University of
California, the American Association for the
Advancement of Science, the Counsel on Foreign
Relations, and the Institute for Strategic
Studies (London); advisor to the Program
Evaluation and Methodology Division of the U.S.
General Accounting Office; formerly Senior Vice
President and Trustee of Rand.
- 32 -
<PAGE>
Present Position with the Neuberger Berman
Name, Age, and Address (1) Funds; Business Experience During Past Five
---------------------------- Years; Other Trusteeships (2)
-------------------------------------------
Candace L. Straight (52) TRUSTEE OF INCOME FUNDS, INCOME TRUST, INCOME
518 E. Passaic Avenue MANAGERS TRUST (SINCE 1993); AND NEUBERGER
Bloomfield, NJ 07003 BERMAN ADVISERS MANAGEMENT TRUST (SINCE 1999).
Private investor and consultant specializing
in the insurance industry; Advisory Director of
Securities Capital LLC (a global private
equity investment firm dedicated to making
investments in the insurance sector); Principal
of Head & Company, LLC (limited liability
company providing investment banking and
consulting services to the insurance industry)
until March 1996; Director of Drake Holdings
(U.K. motor insurer) until June 1996.
Peter E. Sundman* (41) CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER,
AND TRUSTEE OF EQUITY FUNDS, EQUITY TRUST,
EQUITY ASSETS, EQUITY SERIES, EQUITY MANAGERS
TRUST AND GLOBAL MANAGERS TRUST; PRESIDENT AND
CHIEF EXECUTIVE OFFICER OF INCOME FUNDS, INCOME
TRUST AND INCOME MANAGERS TRUST; PRESIDENT AND
PRINCIPAL EXECUTIVE OFFICER OF ADVISERS
MANAGERS TRUST (SINCE 1999). Executive Vice
President and Principal of Neuberger Berman,
LLC from 1997 to 1999; President and Director
of NBMI; Executive Vice President and Director
of Neuberger Berman Inc.
Peter P. Trapp (55) TRUSTEE OF NEUBERGER BERMAN ADVISERS MANAGERS
Ford Motor Credit Company TRUST (SINCE 1989). Regional Manager for
1455 Lincoln Parkway Atlanta Region, Ford Motor Credit Company since
Atlanta, GA 30346-2209 August, 1997; prior thereto, President, Ford
Life Insurance Company, April 1995 until August
1997.
(1) UNLESS OTHERWISE INDICATED, THE BUSINESS ADDRESS OF EACH LISTED PERSON IS
605 THIRD AVENUE, NEW YORK, NEW YORK 10158.
(2) EXCEPT AS OTHERWISE INDICATED, EACH INDIVIDUAL HAS HELD THE POSITIONS SHOWN
FOR AT LEAST THE LAST FIVE YEARS.
- 33 -
<PAGE>
* INDICATES A TRUSTEE WHO IS AN "INTERESTED PERSON" OF EACH TRUST WITHIN THE
MEANING OF THE 1940 ACT. MESSRS. KASSEN AND SUNDMAN ARE INTERESTED PERSONS BY
VIRTUE OF THE FACT THAT THEY ARE OFFICERS AND/OR DIRECTORS OF NB MANAGEMENT AND
EXECUTIVE VICE PRESIDENTS OF NEUBERGER BERMAN. MR. O'BRIEN IS AN INTERESTED
PERSON BY VIRTUE OF THE FACT THAT HE IS A DIRECTOR OF LEGG MASON, INC., A WHOLLY
OWNED SUBSIDIARY OF WHICH, FROM TIME TO TIME, SERVES AS A BROKER OR DEALER TO
THE PORTFOLIOS AND OTHER FUNDS FOR WHICH NB MANAGEMENT SERVES AS INVESTMENT
MANAGER.
The current Boards of Trustees of the funds are responsible for general
oversight of the funds' business and operations. The 1940 Act and SEC rules
assign to the Boards or to the Independent Trustees responsibility to consider
and decide certain issues, including some in which the funds' interests may not
be the same as those of management. The Boards of the funds in the Neuberger
Berman family follow certain policies and practices intended to enhance the
independence and effectiveness of the Independent Trustees. These include
separate meetings of the Independent Trustees with counsel of their own
choosing; a Nominating Committee composed entirely of Independent Trustees,
which is responsible for identifying, screening, and naming candidates for the
Board and Board committees and administering the Board's retirement policy; an
Audit Committee composed entirely of Independent Trustees, which operates under
a written charter and meets with each fund's independent auditors or accountants
outside the presence of management; and a policy that compensation for serving
as Independent Trustee must be set by the Independent Trustees. The Boards of
Trustees of Equity Funds, Equity Trust, and Equity Assets each met 6 times and
Equity Series met 4 times during the fiscal year ended August 31, 1999. The
Boards of Trustees of Income Funds and Income Trust each met 4 times during the
fiscal year ended October 31, 1999. All of the Trustees of each fund attended
75% or more of the board meetings during each fund's last fiscal year.
The following Trustees currently serve on the Audit Committee of the Boards
of Trustees of Equity Funds, Equity Trust, Equity Assets and Equity Series:
Howard A. Mileaf (Chairman), Cornelius T. Ryan, and Gustave H. Shubert. The
following Trustees currently serve on the Audit Committee of the Boards of
Trustees of Income Funds and Income Trust: William E. Rulon (Chairman), John
Cannon and Barry Hirsch. The principal duties of the Audit Committees are: (a)
to review the financial and accounting policies of the funds, including internal
accounting control procedures, and to review reports prepared by the funds'
independent auditors and accountants, including reports on the funds' financial
statements; (b) to evaluate the independence of the independent auditors or
accountants and to recommend whether to retain such independent auditors or
accountants for the next fiscal year; (c) to review and recommend approval or
disapproval of audit and non-audit services and the fees charged for such
services; and (d) to report to the Board and make such recommendations as it
deems necessary. The Audit Committee of Equity Funds, Equity Trust, Equity
Assets and Equity Series met one time during the fiscal year ended August 31,
1999. Each member of the Audit Committee attended that meeting. The Audit
Committee of Income Funds and Income Trust met one time during the fiscal year
ended October 31, 1999. Each member of the Audit Committee attended that
meeting.
The following Trustees currently serve on the Nominating Committee of the
Boards of Trustees of Equity Funds, Equity Trust, Equity Assets and Equity
Series: Cornelius T. Ryan (Chairman), John T. Patterson, Jr., and John P.
Rosenthal. The following Trustees currently serve on the Nominating Committee of
the Boards of Trustees of Income Funds and Income Trust: Candace L. Straight
- 34 -
<PAGE>
(Chair) and Barry Hirsch. The Nominating Committees search for and interview
trustee candidates for recommendation to the Boards. The Nominating Committee
will consider nominees for trustee positions that are recommended by
shareholders. Resumes and supporting information should be sent to the attention
of Claudia Brandon, Secretary to the funds, in care of Neuberger Berman, LLC,
605 Third Avenue, 41st Floor, New York, NY 10158-3698. The Nominating Committee
of Equity Funds, Equity Trust, Equity Assets and Equity Series met one time
during the fiscal year ended August 31, 1999. Each member of the Nominating
Committee attended that meeting. The Nominating Committee of Income Funds and
Income Trust met one time during the fiscal year ended October 31, 1999. Each
member of the Nominating Committee attended that meeting. Each Independent
Trustee employed by NBMI or Neuberger Berman receives $32,000 annually and up to
$3,750 for each Board meeting and $750 for each separate meeting of a Board
committee. The preceding amounts and those in the following tables represent
historical compensation. The Independent Trustees are considering whether an
increase in the amount of compensation, and a change in the method of
calculation, would be appropriate in light of the reorganization of the boards
and the funds. They have retained an independent consultant to advise them.
Trustees of the Trust who are employed by NBMI or Neuberger Berman receive no
compensation from the Trust. Trustees are reimbursed for any expenses incurred
in attending meetings. The retirement policy with respect to the Equity Trustees
is determined on a case-by-case basis. Each Income Trustee will be subject to
retirement at the end of the year in which he or she becomes 75 years old. The
following table sets forth information concerning the compensation of the
Trustees of the funds. None of the Neuberger Berman Funds has any retirement
plan for its trustees.
<TABLE>
COMPENSATION TABLE
FISCAL YEAR ENDED AUGUST 31, 1999
NEUBERGER BERMAN EQUITY GROUP OF FUNDS
<CAPTION>
Aggregate Aggregate Aggregate Aggregate Total Compensation from
Compensation Compensation Compensation Compensation Investment Companies in
NAME AND POSITION from Neuberger from Neuberger from Neuberger from Neuberger the Neuberger Berman Fund
----------------- Berman Berman Berman Berman COMPLEX PAID TO TRUSTEES**
EQUITY FUNDS EQUITY ASSETS EQUITY SERIES EQUITY TRUST --------------------------
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Faith Colish $18,571 $276 $31 $6,354 $83,500
Trustee
Stanley Egener* $0 $0 $0 $0 $0
Chairman of the
Board, Chief
Executive Officer,
and Trustee
Howard A. Mileaf $19,402 $283 $31 $6,641 $56,250
Trustee
Edward I. O'Brien $20,038 $296 $31 $6,868 $53,750
Trustee
John T. Patterson, $20,310 $301 $31 $6,966 $58,500
Jr. Trustee
John P. Rosenthal $19,398 $286 $31 $6,643 $56,250
Trustee
Cornelius T. Ryan $16,740 $255 $31 $5,707 $44,750
Trustee
Gustave H. Shubert $19,220 $281 $31 $6,576 $51,500
Trustee
- 35 -
<PAGE>
Aggregate Aggregate Aggregate Aggregate Total Compensation from
Compensation Compensation Compensation Compensation Investment Companies in
Name and Position from Neuberger from Neuberger from Neuberger from Neuberger the Neuberger Berman Fund
----------------- Berman Berman Berman Berman Complex Paid to Trustees**
Equity Funds Equity AssetS Equity Series Equity Trust --------------------------
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Lawrence Zicklin* $0 $0 $0 $0 $0
President and Trustee
</TABLE>
*Retired, October 27, 1999
**No fund within the complex has a bonus, pension, profit sharing or retirement
plan.
<TABLE>
<CAPTION>
COMPENSATION TABLE
FISCAL YEAR ENDED OCTOBER 31, 1999
NEUBERGER BERMAN INCOME GROUP OF FUNDS
Aggregate Aggregate Total Compensation from Trusts
Name and Position Compensation from Compensation from in the Neuberger Berman Fund
with the Trust Income Funds Income Trust Complex Paid to Trustees
--------------- ------------ ------------ ------------------------
<S> <C> <C> <C>
John Cannon $24,579 $671 $52,000
Trustee (1 other investment company)
Stanley Egener* $0 $0 $0
Chairman of the Board, (9 other investment companies)
Chief Executive Officer,
and Trustee
Theodore P. Giuliano $0 $0 $0
President and Trustee (1 other investment company)
Barry Hirsch $23,978 $647 $49,250
Trustee (1 other investment company)
Robert A. Kavesh $24,215 $660 $51,250
Trustee (1 other investment company)
William E. Rulon $23,244 $631 $47,750
Trustee (1 other investment company)
Candace L. Straight $23,978 $647 $51,500
Trustee (1 other investment company)
</TABLE>
* Retired, December 16, 1999.
- 36 -
<PAGE>
REQUIRED VOTE
The election of each Trustee requires approval by a plurality of the votes
cast at the Meeting on the matter.
THE BOARDS OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR" EACH NOMINEE IN PROPOSAL 1.
If the Reorganization is not approved, or is approved but not implemented
(see Proposal 4), so that the funds continue in a two-level master-feeder
structure, a vote for a Trustee candidate will be considered authorization for
your Trust to vote for that same candidate as a member of the Board of Trustees
of the master fund.
PROPOSAL 2. MODIFICATION OF FUNDAMENTAL RESTRICTION ON
PORTFOLIO DIVERSIFICATION (ALL FUNDS)
The Boards of Trustees of the funds have approved a change to the
fundamental investment limitations of each fund regarding diversification. The
Boards and NB Management believe that the proposed change will provide the funds
with greater flexibility to respond to certain present and future investment
opportunities. As discussed below, these fundamental restrictions, in their
current form, impede the funds' use of certain portfolio management techniques
that are now used by other mutual funds. Because the policies in question are
fundamental, the changes require shareholder approval before they can be
implemented.
The existing fundamental restriction on issuer diversification would be
changed by adding the underlined portion:
DIVERSIFICATION. The Fund may not, with respect to 75% of the value
of its total assets, purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities, OR SECURITIES ISSUED BY OTHER
INVESTMENT COMPANIES) if, as a result, (i) more than 5% of the value
of the Fund's total assets would be invested in the securities of that
issuer or (ii) the Fund would hold more than 10% of the outstanding
voting securities of that issuer.
The 1940 Act requires all mutual funds to state whether they are
"diversified" or "non-diversified." Each of the Neuberger Berman funds is a
diversified fund and, accordingly, must restrict the percentage of its assets
that can be invested in any one issuer. Diversified funds are generally safer,
because the risk is spread over a larger number of issuers.
The 1940 Act permits a fund, in counting the percentage of its assets
invested in various issuers for diversity purposes, to disregard investments in
U.S. Government securities or securities issued by other investment companies.
The current diversification policies of the funds do not take full advantage of
this provision. Specifically, they do not reflect the exception for investments
in securities of other investment companies.
- 37 -
<PAGE>
The proposed modification would add the exemption for investments in
securities of other investment companies. Among other things, this would allow
the funds' greater flexibility in managing uninvested cash. Like many other fund
groups, the funds have requested permission from the SEC to invest their
uninvested cash in the Neuberger Berman Institutional Cash Trust, a registered
money market fund, as a means of obtaining more efficient and effective
management of the funds' uninvested cash. The proposed change would provide the
funds with greater flexibility to use this investment technique should the SEC
grant the funds' request.1 Although the funds would pay no more in advisory fees
to secure this service than they pay now, the funds may pay an additional fee on
their investment in the underlying fund, Neuberger Berman Institutional Cash
Trust. Institutional Cash Trust pays an administrative fee of 15 basis points.
No fund will be allowed to invest more than 25% of its net assets in
Institutional Cash Trust. Accordingly, the administration fee will not add more
than 3.75 basis points to the expense ratio of any investing fund, and will
typically add considerably less than that.
REQUIRED VOTE
Approval of the change contemplated by Proposal 2 with respect to a fund
requires the affirmative vote of a "majority of the outstanding voting
securities" of that fund, which for this purpose means the affirmative vote of
the lesser of (1) more than 50% of the outstanding shares of the fund or (2) 67%
or more of the shares of the fund present at the Meeting if more than 50% of the
outstanding shares of the fund are represented at the Meeting in person or by
proxy.
If Proposal 4 for conversion to a multi-class system is not approved, but
the change to the diversification policy presented in this Proposal 2 is
approved, such approval would be deemed a change of policy for the respective
feeder fund, plus authority for that fund to cast its vote in favor of an
identical change to the policies of the master fund in which it invests.
If the change contemplated by Proposal 2 is not approved by shareholders of
a fund, the existing fundamental restriction of the fund will continue in effect
for that fund as long as it remains a separate fund; but disapproval of Proposal
2 by the shareholders of one fund will not affect approvals of Proposal 2 by
shareholders of any other fund.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THE MODIFICATION OF THE FUNDAMENTAL
RESTRICTION ON PORTFOLIO DIVERSIFICATION.
PROPOSAL 3. SELECTION OF INDEPENDENT AUDITORS OR ACCOUNTANTS (ALL FUNDS)
The Boards of Trustees of the funds and the master funds in which they
invest, including all of the Independent Trustees, have selected Ernst & Young
LLP to continue to serve as the independent auditors of each of the funds and
their corresponding master funds, except the Neuberger Berman Century Funds,
--------------------
1 Section 12(d)(1) of the 1940 Act contains other limitations on the extent to
which one investment company can invest in another. Specifically, one fund
cannot purchase more than 3% of the outstanding voting securities of another
fund, may not invest more than 5% of its total assets in the other fund, and may
not invest more than 10% of its total assets in the securities of all investment
companies combined. Through their exemptive application to permit joint cash
management, the funds have asked for relief from these limits. There is no
guarantee that the funds will be granted the exemption.
- 38 -
<PAGE>
Manhattan funds, Millennium funds, Regency funds, Socially Responsive funds,
Technology Funds and Neuberger Berman International Portfolio, a master fund
that is a series of Global Managers Trust. Ernst & Young LLP has no direct
financial interest or material indirect financial interest in these funds. The
Board of Trustees has selected Ernst & Young (Cayman Islands Office) to serve as
the independent auditor of NB International Portfolio. Ernst & Young has no
direct financial or material indirect financial interest in NB International
Portfolio. The Boards of Trustees of the funds and the master funds in which
they invest, including all of the Independent Trustees, have selected
PricewaterhouseCoopers LLP to continue to serve as independent accountants of
the Neuberger Berman Century funds, Manhattan funds, the Millennium funds,
Regency funds, Socially Responsive funds and Technology funds.
PricewaterhouseCoopers LLP has no direct financial interest or material indirect
financial interest in these funds. Representatives of Ernst & Young LLP and
PricewaterhouseCoopers LLP are not expected to attend the Meeting, but have been
given the opportunity to make a statement if they so desire, and will be
available should any matter arise requiring their attention.
The independent auditors and accountants examine annual financial
statements for each fund and provide other audit and tax-related services. In
recommending the selection of Ernst & Young LLP and PricewaterhouseCoopers LLP,
the Boards reviewed the nature and scope of the services to be provided
(including any non-audit services) and whether the performance of any non-audit
services would affect the auditors' or accountants' independence.
As described under Proposal 4, if the shareholders of a fund approve the
Agreement and Plan of Reorganization involving that fund (Proposal 4), they will
become holders of shares of the Trust Class, Assets Class or Fund Class of
Equity Funds or Income Funds (Genesis Institutional will have a separate, fourth
class). The boards of trustees of Equity Funds and Income Funds have also
recommended the selection of Ernst & Young LLP and PricewaterhouseCoopers LLP as
independent auditors and accountants of those series of Equity Funds and Income
Funds corresponding to the funds mentioned above. Therefore, immediately after
the Reorganization, the same independent auditors or accountants will serve your
fund (in which you will hold shares in the Trust Class, Assets Class or Fund
Class, or for Genesis Institutional, Institutional Class) that served the fund
in which you held shares prior to the Reorganization.
REQUIRED VOTE
Approval of Proposal 3 requires the affirmative vote of a majority of the
shares present and voting at the Meeting.
If Proposal 4 for conversion to a multi-class system is not approved, but
Proposal 3 is approved, such approval would be considered as a ratification of
the auditors and/or accountants mentioned above with respect to the funds and
their corresponding master funds.
THE BOARDS OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND THAT YOU VOTE TO RATIFY THEIR SELECTION OF THE FUNDS'
INDEPENDENT AUDITORS/ACCOUNTANTS.
- 39 -
<PAGE>
PROPOSAL 4. APPROVAL OF THE PROPOSED REORGANIZATION
At the Meeting, shareholders of Neuberger Berman Equity Trust, Neuberger
Berman Equity Assets, Neuberger Berman Equity Series, and Neuberger Berman
Income Trust will be asked to approve the proposed Reorganizations. Because
Neuberger Berman Equity Funds and Income Funds will survive the proposed
Reorganizations, Equity Funds and Income Funds shareholders are not being asked
to vote.
Neuberger Berman currently sells series of four equity feeder funds, called
Neuberger Berman Equity Funds, Neuberger Berman Equity Trust, Neuberger Berman
Equity Assets and Neuberger Berman Equity Series. Each feeder fund invests in a
series of one of two master funds, called Equity Managers Trust and Global
Managers Trust. If the Reorganizations involving these feeder funds are
approved, the series of three of them will transfer their assets and liabilities
to the corresponding series of the fourth feeder fund. That is, if these
Reorganizations are approved, Equity Trust, Equity Assets, and Equity Series
will each transfer its assets to Equity Funds, in return for shares of a new
class of Equity Funds equal in value to the net assets of the old feeder fund.
The old feeder funds will then distribute to their investors the Equity Funds
shares they have received, making those investors shareholders of Equity Funds,
and the old feeder funds (other than Equity Funds) will dissolve. Equity Funds
will then receive from Equity Managers Trust and Global Managers Trust the
entire portfolio of marketable securities and other assets, and the two master
funds will dissolve. Thus, Equity Funds will no longer operate as a feeder fund
investing in a master fund. Instead, it will own directly the securities
formerly held in the master funds. Investors will hold shares of various classes
of Equity Funds, and the funds will invest directly in securities rather than in
the master funds.
Neuberger Berman currently sells two income feeder funds, known as
Neuberger Berman Income Funds and Neuberger Berman Income Trust, which invest in
a master fund called Income Managers Trust. They will reorganize into a single
fund by the same process described above for the equity funds.
Immediately after the Reorganization, you will hold the same number of
shares, with the same dollar value, as you held immediately before the
Reorganization, and the portfolio of market securities and other assets in which
you're invested will be unchanged.
The following diagram illustrates the structural change that will occur
after the Reorganization.
- 40 -
<PAGE>
BEFORE REORGANIZATION* AFTER REORGANIZATION*
(TWO-TIERED MASTER/FEEDER STRUCTURE) (ONE-TIERED MULTI-CLASS STRUCTURE)
----------------------------------- ---------------------------------
SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS
BUY SHARES OF BUY SHARES OF
FUND SPOKE TRUST SPOKE ASSETS SPOKE FUNDS (FUND CLASS, TRUST
CLASS, OR ASSET CLASS)
WHICH INVEST IN WHICH INVEST IN
MASTER FUND STOCKS, BONDS AND OTHER
SECURITIES
WHICH INVESTS IN
STOCKS, BONDS AND OTHER SECURITIES
----------------------------------------------------
*THE DIAGRAM SHOWS THREE FEEDER FUNDS, WHICH WILL BECOME THREE CLASSES OF THE
SURVIVING FUND. SOME OF THE MASTER FUNDS HAVE ONLY TWO FEEDER FUNDS, IN WHICH
CASE THE SURVIVING FUND WILL HAVE ONLY TWO CLASSES. IN THE CASE OF NEUBERGER
BERMAN GENESIS, THERE IS A FOURTH FEEDER FUND, WHICH WILL BECOME A FOURTH CLASS
OF THE SURVIVING FUND.
WHAT ARE THE REASONS FOR THE PROPOSED REORGANIZATION?
The reorganization is being proposed because the Boards and NBMI each
believe that eliminating the master-feeder structure and reorganizing into a
multi-class structure would simplify the operations of the funds and,
consequently, may result in some reduction in each fund's operating expenses.
For example, the number equity funds for which annual tax filings are made would
be reduced from 40 to 11, and separate audits of the master funds would no
longer be necessary. Over time, the funds may benefit from the fewer number of
required filings with the Securities and Exchange Commission (the "SEC") and
other legal and administrative cost savings. Some of the cost savings will
benefit NBMI, through its contractual agreements with the funds to limit the
funds' total annual operating expenses.
In addition, NBMI, which serves as each fund's principal underwriter, has
advised the Boards that investors are more familiar with the more common
multi-class structure than they are with the master-feeder structure.
Accordingly, the Reorganization should make it easier to market the funds. While
NBMI would be one beneficiary of such a development, fund shareholders would
also benefit, because increased assets typically result in economies that
produce a lower expense ratio for all investors.
The Board of each fund has determined that it would be in the best
interests of that fund and its shareholders to operate the fund in the single
level, multi-class structure that has become increasingly favored by the mutual
fund industry.
- 41 -
<PAGE>
DESCRIPTION OF THE REORGANIZATION PLAN
The terms and conditions under which the Reorganization would be completed
are set forth in the Reorganization Plan. The following is a summary of the
Reorganization Plan and is qualified in its entirety by reference to the
Reorganization Plan, the form of which is attached as Appendix A. The
Reorganization Plan provides for the completion of the Reorganization in several
steps:
First, each series of Neuberger Berman Equity Trust, Equity Assets and
Equity Series will transfer its assets (which consist primarily of its
interest in the underlying master fund) to the corresponding series of
Equity Funds, in exchange solely for (1) shares of the Trust Class, Asset
Class, or Institutional Class of that corresponding series identical in
number and value to the transferor series's shares held by its shareholders
and (2) the corresponding series's assumption of the transferring series's
liabilities.
Each series of Neuberger Berman Income Trust will transfer its assets
(which consist primarily of its interest in the underlying master fund) to
the corresponding series of Income Funds, in exchange solely for (1) shares
of the Trust Class of that corresponding series identical in number and
value to the fund shares held by its shareholders and (2) the corresponding
series's assumption of the transferring series's liabilities.
Second, each fund will distribute the Trust Class, Asset Class or
Institutional Class shares it receives to its shareholders, and will
dissolve. For example, if you own shares of Neuberger Berman Guardian Trust
(a series of Equity Trust), you would receive in exchange an equal amount
of Trust Class shares of Neuberger Berman Guardian Fund, which is the
corresponding series of Equity Funds. If you own shares of Neuberger Berman
Limited Maturity Bond Trust, you would receive in exchange an equal amount
of Trust Class shares of Neuberger Berman Limited Maturity Bond Fund, which
is the corresponding series of Income Funds.
Third, each series of Equity Funds and Income Funds will withdraw its
investment in its corresponding master fund. Each master fund will
dissolve and distribute its assets in kind (i.e., in the form of
stocks, bonds, and other investments held by the master fund, as well
as any cash) to each corresponding series of Equity Funds and Income
Funds.
Finally, NBMI will enter into investment management agreements with
Equity Funds and Income Funds with provisions identical in all
material respects to those of its current investment management
agreements with the master fund. (If your Fund currently has or
approves a Distribution and Shareholder Servicing Plan, your class of
shares will also have such a plan identical in every material
respect.)
The completion of each Reorganization is subject to various conditions,
including approval of this Proposal by the shareholders of the participating
transferor fund, completion of all filings with, and receipt of all necessary
approvals from, the SEC, delivery of legal opinions regarding the federal tax
consequences of the Reorganization, and other customary corporate and securities
matters. The Boards of Trustees may waive any conditions if, in their judgment,
- 42 -
<PAGE>
such waiver will not have a material adverse effect on shareholders' interest.
The Reorganization Plan for a fund may be terminated at any time prior to
closing if the Board of Trustees of either that fund or the surviving fund
determines in good faith that the Reorganization is not in the best interests of
the shareholders.
FEDERAL TAX CONSEQUENCES OF THE REORGANIZATION
It is a condition to the consummation of the transactions described in each
Reorganization Plan, that each Trust that is a party thereto must have obtained
an opinion of Kirkpatrick & Lockhart LLP, legal counsel to the Trusts,
substantially to the effect that the Reorganization will qualify as a tax-free
reorganization within the meaning of section 368(a)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"). Accordingly, no gain or loss will be
recognized by any fund or its shareholders. The Tax Opinion may state that no
opinion is expressed as to the effect of the Reorganization on the funds or any
shareholder with respect to any asset as to which any unrealized gain or loss is
required to be recognized for federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a mark-to-market
system of accounting. NBMI intends to recommend to the Board of Trustees of
Neuberger Berman Equity Assets that Socially Responsive Assets be dissolved
prior to Reorganization.
SUMMARY: COMPARISON OF THE FEEDER FUNDS AND THE CLASSES
Equity Funds and Income Funds were organized in December 1992 as business
trusts under the laws of the State of Delaware. Equity Funds is comprised of
eleven diversified series, and Income Funds is comprised of seven diversified
series (the "Portfolios"). If the Reorganization is approved, the Portfolios of
Equity Funds will have three classes of shares: Trust Class, Assets Class and
Fund Class. (Some of the Portfolios will have only Trust and Fund Class shares.
Genesis Portfolio will have a fourth class, Institutional Class, because there
are four Genesis feeder funds.) The Portfolios of Income Funds will have two
classes of shares: Trust Class and Fund Class (only the Institutional Cash
series and Limited Maturity Bond series have both Trust and Fund Classes). If
the Reorganization is completed, shareholders of each fund will become holders
of the Trust Class, Assets Class, Fund Class or Institutional Class shares of
the Portfolio that has the same investment program as the fund currently held by
that shareholder. The net asset value of the shares in a Portfolio class held by
a shareholder immediately after the Reorganization will be the same as the net
asset value of the shares of the corresponding fund held by the shareholder
immediately prior to the Reorganization.
A brief comparison of the funds with the new Portfolios is set forth below:
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The investment objectives, policies and restrictions under which the assets
of the funds presently are managed will not be affected by the proposed
Reorganization except that (1) rather than investing all of its net investable
assets in a corresponding master fund, each fund will seek to achieve the same
investment objectives by engaging NBMI as its investment adviser to directly
manage its assets; and (2) if approved by the shareholders of the corresponding
series of Equity Funds and Income Funds, the series will have a slightly more
flexible diversification policy, as described in Proposal 2. The investment
objectives, policies and restrictions of the Portfolios will otherwise be the
same as those in effect for the funds and the master funds immediately prior to
the Reorganization.
- 43 -
<PAGE>
Investment Manager
------------------
NBMI currently manages the assets of each fund indirectly, by virtue of the
fact that it manages the assets of the corresponding master fund in which the
fund invests. Since the funds currently invest their assets only through the
corresponding master funds, they do not engage NBMI or any other investment
manager directly. Upon completion of the Reorganization, Equity Funds and Income
Funds will enter into new investment advisory agreements with NBMI on behalf of
each Portfolio, on terms and conditions substantially identical to the terms and
conditions of the current investment management agreement between NBMI and the
master funds. Neuberger Berman, LLC ("Neuberger Berman"), an affiliate of NBMI
registered as an investment adviser and broker-dealer, also provides services to
each master fund pursuant to a sub-advisory agreement between NBMI and Neuberger
Berman. It would provide such services to each Portfolio of Equity Funds and
Income Funds following the Reorganization.
In each case, it is anticipated that the same individuals would provide
these services, and each series of Equity Funds and Income Funds would pay fees
at the same rate provided for in the current agreements. Accordingly, there will
be no shareholder vote on the new agreement.
In summary, NBMI and Neuberger Berman currently manage the assets of the
funds indirectly, by virtue of the funds' investment in the master funds. After
the Reorganization, NBMI and Neuberger Berman will manage the assets of each
Portfolio directly, according to the same investment program that they employed
for the master funds.
Administrative Services
-----------------------
NBMI serves as administrator of each fund, pursuant to an administration
agreement with each fund, and is responsible for performing all administrative
services required for the daily business operations of the funds. Each of Equity
Trust, Equity Assets, Equity Series and Income Trust has an administration
agreement with NBMI on behalf of its series. After the Reorganization, the
administration agreements with Equity Funds and Income Funds will be amended to
incorporate the multi-class structure of the series, but will otherwise be on
terms and conditions substantially identical to those applicable to the funds
immediately prior to the Reorganization.
Distributor, Transfer Agent and Custodian
-----------------------------------------
NBMI serves as the principal underwriter for the funds pursuant to
distribution agreements with the funds. State Street Bank and Trust Company
serves as the transfer agent and custodian for the funds pursuant to transfer
agency and custodian agreements with the funds. After the Reorganization, those
agreements with Equity Funds and Income Funds will be amended to incorporate the
multi-class structure of the Portfolios, but will otherwise be on terms and
conditions substantially identical to those applicable to the funds immediately
prior to the Reorganization.
- 44 -
<PAGE>
Pro Forma Expenses
------------------
The following tables show the current expenses for each fund, and what the
expenses are expected to be after the proposed Reorganization.
INFORMATION PRESENTED IN THE AS REPORTED COLUMN INCLUDES AN ALLOCATION OF
EXPENSES FROM THE PORTFOLIOS, WHICH WOULD BE BORNE BY THE RESPECTIVE FUNDS IF
THE PROPOSED REORGANIZATION IS APPROVED.
CENTURY FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- CENTURY FUND- FUND
CENTURY FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.81 0.81
Plus: Distribution fees none none
Other expenses** 0.99 0.99
---- ----
Equals: Total annual operating
expenses 1.80 1.80
Expense
Minus: reimbursement 0.30 0.30
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02, so that the total annual operating
expenses of the fund are limited to 1.50% of average net assets. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that repayment does not cause the
fund's annual operating expenses to exceed 1.50% of its average net assets. Any
such repayment must be made within three years after the year in which Neuberger
Berman Management incurred the expense. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
1
<PAGE>
CENTURY TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- CENTURY FUND- TRUST
CENTURY TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.95 0.95
Plus: Distribution fees 0.10 0.10
Other expenses** 0.80 0.80
---- ----
Equals: Total annual operating
expenses 1.85 1.85
Minus: Expense
reimbursement 0.35 0.35
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02, so that the total annual operating
expenses of the fund are limited to 1.50% of average net assets. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that repayment does not cause the
fund's annual operating expenses to exceed 1.50% of its average net assets. Any
such repayment must be made within three years after the year in which Neuberger
Berman Management incurred the expense. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
2
<PAGE>
FOCUS FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- FOCUS FUND- FUND
FOCUS FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.75 0.75
Plus: Distribution fees none none
Other expenses 0.10 0.10
---- ----
Equals: Total annual operating
expenses 0.85 0.85
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $87 $271 $471 $1049
EXPENSES- PRO FORMA
(UNAUDITED) (A) $87 $271 $471 $1049
3
<PAGE>
FOCUS TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- FOCUS FUND- TRUST
FOCUS TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.89 0.89
Plus: Distribution fees 0.10 0.10
Other expenses 0.09 0.09
---- ----
Equals: Total annual operating
expenses 1.08 1.08
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
its total annual operating expenses are not more than 0.20% above those of
another Neuberger Berman fund that invests in the same portfolio of securities.
This arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. Under this arrangement, which Neuberger Berman
Management can terminate upon sixty days' notice to the fund, total annual
operating expenses of the fund last year were limited to 0.95% of the fund's
average net assets. Actual expenses this year may be higher or lower. The as
reported column includes costs paid by the fund and its share of master
portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED** $110 $343 $595 $1317
EXPENSES- PRO FORMA
(UNAUDITED) (A)** $110 $343 $595 $1317
**UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $97, $303, $525, AND $1166,
RESPECTIVELY; OR $97, $303, $525, AND $1166, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
4
<PAGE>
FOCUS ASSETS
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY ASSETS- FOCUS FUND- ASSETS
FOCUS ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.89 0.89
Plus: Distribution fees 0.25 0.25
Other expenses 5.94 5.94
---- ----
Total annual operating
Equals: expenses 7.08 7.08
Expense
Minus: reimbursement** 5.58 5.58
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* The as reported column includes costs paid by the fund and its share of master
portfolio costs. ** Neuberger Berman Management has contractually agreed to
reimburse certain expenses of the fund through 12/31/10, so that the total
annual operating expenses of the fund are limited to 1.50% of average net
assets. This arrangement does not cover interest, taxes, brokerage commissions,
and extraordinary expenses.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
5
<PAGE>
GENESIS FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- GENESIS FUND- FUND
GENESIS FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.98 0.98
Plus: Distribution fees none none
Other expenses 0.19 0.19
---- ----
Total annual operating
Equals: expenses 1.17 1.17
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $119 $372 $644 $1420
EXPENSES- PRO FORMA
(UNAUDITED) (A) $119 $372 $644 $1420
6
<PAGE>
GENESIS TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- GENESIS FUND- TRUST
GENESIS TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.12 1.12
Plus: Distribution fees none none
Other expenses 0.11 0.11
---- ----
Total annual operating
Equals: expenses 1.23 1.23
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $125 $390 $676 $1489
EXPENSES- PRO FORMA
(UNAUDITED) (A) $125 $390 $676 $1489
7
<PAGE>
GENESIS ASSETS
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY ASSETS- GENESIS FUND-ASSETS
GENESIS ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.12 1.12
Plus: Distribution fees 0.25 0.25
Other expenses 0.26 0.26
---- ----
Total annual operating
Equals: expenses 1.63 1.63
Expense
Minus: reimbursement** 0.13 0.13
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* The as reported column includes costs paid by the fund and its share of master
portfolio costs. ** Neuberger Berman Management has contractually agreed to
reimburse certain expenses of the fund through 12/31/10, so that the total
annual operating expenses of the fund are limited to 1.50% of average net
assets. This arrangement does not cover interest, taxes, brokerage commissions,
and extraordinary expenses.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
8
<PAGE>
GENESIS INSTITUTIONAL
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY SERIES-
GENESIS GENESIS FUND- SERIES
INSTITUTIONAL CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.87 0.87
Plus: Distribution fees none none
Other expenses** 0.28 0.28
---- ----
Total annual operating
Equals: expenses 1.15 1.15
Expense
Minus: reimbursement 0.30 0.30
---- ----
Equals: Net expenses 0.85 0.85
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02, so that the total annual operating
expenses of the fund are limited to 0.85% of average net assets. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The as reported column includes costs paid by the fund
and its share of master portfolio costs.
** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $87 $271 $471 $1049
EXPENSES- PRO FORMA
(UNAUDITED) (A) $87 $271 $471 $1049
9
<PAGE>
GUARDIAN FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- GUARDIAN FUND- FUND
GUARDIAN FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.70 0.70
Plus: Distribution fees none none
Other expenses 0.12 0.12
---- ----
Total annual operating
Equals: expenses 0.82 0.82
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $84 $262 $455 $1014
EXPENSES- PRO FORMA
(UNAUDITED) (A) $84 $262 $455 $1014
10
<PAGE>
GUARDIAN TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- GUARDIAN FUND- TRUST
GUARDIAN TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.84 0.84
Plus: Distribution fees none none
Other expenses 0.04 0.04
---- ----
Total annual operating
Equals: expenses 0.88 0.88
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $90 $281 $488 $1084
EXPENSES- PRO FORMA
(UNAUDITED) (A) $90 $281 $488 $1084
11
<PAGE>
GUARDIAN ASSETS
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY ASSETS- GUARDIAN FUND- ASSETS
GUARDIAN ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.84 0.84
Plus: Distribution fees 0.25 0.25
Other expenses 0.47 0.47
---- ----
Total annual operating
Equals: expenses 1.56 1.56
Expense
Minus: reimbursement** 0.06 0.06
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* The as reported column includes costs paid by the fund and its share of master
portfolio costs. ** Neuberger Berman Management has contractually agreed to
reimburse certain expenses of the fund through 12/31/10, so that the total
annual operating expenses of the fund are limited to 1.50% of average net
assets. This arrangement does not cover interest, taxes, brokerage commissions,
and extraordinary expenses.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
12
<PAGE>
INTERNATIONAL FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS-
INTERNATIONAL INTERNATIONAL FUND-
FUND FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.11 1.11
Plus: Distribution fees none none
Other expenses 0.48 0.48
---- ----
Total annual operating
Equals: expenses 1.59 1.59
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $162 $502 $866 $1889
EXPENSES- PRO FORMA
(UNAUDITED) (A) $162 $502 $866 $1889
13
<PAGE>
INTERNATIONAL TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST-
INTERNATIONAL INTERNATIONAL FUND-
TRUST TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.25 1.25
Plus: Distribution fees none none
Other expenses 4.73 4.73
---- ----
Total annual operating
Equals: expenses 5.98 5.98
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
its total annual operating expenses are not more than 0.10% above those of
another Neuberger Berman fund that invests in the same portfolio of securities
but not to exceed 1.70% of average net assets. This arrangement can be
terminated upon sixty days' notice to the fund. In addition, the arrangement
does not cover interest, taxes, brokerage commissions and extraordinary
expenses. The as reported column includes costs paid by the fund and its share
of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED** $595 $1768 $2918 $5695
EXPENSES- PRO FORMA
(UNAUDITED) (A)** $595 $1768 $2918 $5695
** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $173, $536, $923, AND
$2009, RESPECTIVELY; OR $173, $536, $923, AND $2009, RESPECTIVELY AFTER THE
PROPOSED REORGANIZATION.
14
<PAGE>
MANHATTAN FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- MANHATTAN FUND-
MANHATTAN FUND FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.79 0.79
Plus: Distribution fees none none
Other expenses 0.21 0.21
---- ----
Total annual operating
Equals: expenses 1.00 1.00
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $102 $318 $552 $1225
EXPENSES- PRO FORMA
(UNAUDITED) (A) $102 $318 $552 $1225
15
<PAGE>
MANHATTAN TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- MANHATTAN FUND-
MANHATTAN TRUST TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.93 0.93
Plus: Distribution fees none none
Other expenses 0.25 0.25
---- ----
Total annual operating
Equals: expenses 1.18 1.18
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
its total annual operating expenses are not more than 0.10% above those of
another Neuberger Berman fund that invests in the same portfolio of securities.
This arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. Under this arrangement, which Neuberger Berman
Management can terminate upon sixty days' notice to the fund, total annual
operating expenses of the fund last year were limited to 1.11% of the fund's
average net assets. Actual expenses this year may be higher or lower. The as
reported column includes costs paid by the fund and its share of master
portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED** $120 $375 $649 $1432
EXPENSES- PRO FORMA
(UNAUDITED) (A)** $120 $375 $649 $1432
** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $113, $353, $612, AND $1352,
RESPECTIVELY; OR $113, $353, $612, AND $1352, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
16
<PAGE>
MANHATTAN ASSETS
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY ASSETS- MANHATTAN FUND-
MANHATTAN ASSETS ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.93 0.93
Plus: Distribution fees 0.25 0.25
Other expenses 18.81 18.81
----- -----
Total annual operating
Equals: expenses 19.99 19.99
Expense
Minus: reimbursement** 18.49 18.49
----- -----
Equals: Net expenses 1.50 1.50
</TABLE>
* The as reported column includes costs paid by the fund and its share of master
portfolio costs. ** Neuberger Berman Management has contractually agreed to
reimburse certain expenses of the fund through 12/31/10, so that the total
annual operating expenses of the fund are limited to 1.50% of average net
assets. This arrangement does not cover interest, taxes, brokerage commissions,
and extraordinary expenses.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
17
<PAGE>
MILLENNIUM FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- MILLENNIUM FUND-
MILLENNIUM FUND FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.11 1.11
Plus: Distribution fees none none
Other expenses 1.02 1.02
---- ----
Total annual operating
Equals: expenses 2.13 2.13
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
the total annual operating expenses of the fund are limited to 1.75% of average
net assets. This arrangement can be terminated upon sixty days' notice to the
fund. In addition, the arrangement does not cover interest, taxes, brokerage
commissions, and extraordinary expenses. The fund has agreed to repay Neuberger
Berman Management through 12/31/00 for expenses reimbursed to the fund through
12/31/99 provided that repayment does not cause the fund's annual operating
expenses to exceed 1.75% of its average net assets. The as reported column
includes costs paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED** $216 $667 $1144 $2462
EXPENSES- PRO FORMA
(UNAUDITED) (A)** $216 $667 $1144 $2462
** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $178, $551, $949, AND $2062,
RESPECTIVELY; OR $178, $551, $949, AND $2062, RESPECTIVELY AFTER THE PROPOSED
REORGANIZATION.
18
<PAGE>
MILLENNIUM TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- MILLENNIUM FUND-
MILLENNIUM TRUST TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.25 1.25
Plus: Distribution fees 0.10 0.10
Other expenses 12.14 12.14
----- -----
Total annual operating
Equals: expenses 13.49 13.49
Expense
Minus: reimbursement** 11.74 11.74
----- -----
Equals: Net expenses 1.75 1.75
</TABLE>
* The as reported column includes costs paid by the fund and its share of master
portfolio costs.
** Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/09 so that the total annual operating
expenses of the fund are limited to 1.75% of average net assets.
This arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
through 12/31/00 for expenses reimbursed to the fund through 12/31/99 provided
that repayment does not cause the fund's annual operating expenses to exceed
1.75% of its average net assets.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $178 $551 $949 $2062
EXPENSES- PRO FORMA
(UNAUDITED) (A) $178 $551 $949 $2062
19
<PAGE>
MILLENNIUM ASSETS
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY ASSETS- MILLENNIUM FUND-
MILLENNIUM ASSETS ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 1.25 1.25
Plus: Distribution fees 0.25 0.25
Other expenses** 0.57 0.57
---- ----
Total annual operating
Equals: expenses 2.07 2.07
Expense
Minus: reimbursement 0.32 0.32
---- ----
Equals: Net expenses 1.75 1.75
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02 so that the total annual operating
expenses of the fund are limited to 1.75% of average net assets.
This arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The as reported column includes costs paid by the fund
and its share of master portfolio costs. ** Other expenses are estimated for the
current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $178 $551 $949 $2062
EXPENSES- PRO FORMA
(UNAUDITED) (A) $178 $551 $949 $2062
20
<PAGE>
PARTNERS FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- PARTNERS FUND- FUND
PARTNERS FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.71 0.71
Plus: Distribution fees none none
Other expenses 0.11 0.11
---- ----
Total annual operating
Equals: expenses 0.82 0.82
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $84 $262 $455 $1014
EXPENSES- PRO FORMA
(UNAUDITED) (A) $84 $262 $455 $1014
21
<PAGE>
PARTNERS TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- PARTNERS FUND-TRUST
PARTNERS TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.85 0.85
Plus: Distribution fees none none
Other expenses 0.06 0.06
---- ----
Total annual operating
Equals: expenses 0.91 0.91
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $93 $290 $504 $1120
EXPENSES- PRO FORMA
(UNAUDITED) (A) $93 $290 $504 $1120
22
<PAGE>
PARTNERS ASSETS
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY ASSETS- PARTNERS FUND-ASSETS
PARTNERS ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.85 0.85
Plus: Distribution fees 0.25 0.25
Other expenses 0.21 0.21
---- ----
Total annual operating
Equals: expenses 1.31 1.31
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/10, so that the total annual operating
expenses of the fund are limited to 1.50% of average net assets. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The as reported column includes costs paid by the fund
and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $133 $415 $718 $1579
EXPENSES- PRO FORMA
(UNAUDITED) (A) $133 $415 $718 $1579
23
<PAGE>
REGENCY FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- REGENCY FUND- FUND
REGENCY FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.81 0.81
Plus: Distribution fees none none
Other expenses** 0.99 0.99
---- ----
Total annual operating
Equals: expenses 1.80 1.80
Expense
Minus: reimbursement 0.30 0.30
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02, so that the total annual operating
expenses of the fund are limited to 1.50% of average net assets. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that repayment does not cause the
fund's annual operating expenses to exceed 1.50% of its average net assets. Any
such repayment must be made within three years after the year in which Neuberger
Berman Management incurred the expense. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
24
<PAGE>
REGENCY TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- REGENCY FUND-TRUST
REGENCY TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.95 0.95
Plus: Distribution fees 0.10 0.10
Other expenses** 0.88 0.88
---- ----
Total annual operating
Equals: expenses 1.93 1.93
Expense
Minus: reimbursement 0.43 0.43
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02, so that the total annual operating
expenses of the fund are limited to 1.50% of average net assets or not more than
0.20% above the total annual operating expenses of another Neuberger Berman fund
that invests in the same portfolio of securities whichever is less. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that repayment does not cause the
fund's annual operating expenses to exceed 1.50% of its average net assets. Any
such repayment must be made within three years after the year in which Neuberger
Berman Management incurred the expense. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
25
<PAGE>
SOCIALLY RESPONSIVE FUND
FEE TABLE
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA (UNAUDITED)
EQUITY FUNDS- (A)
SOCIALLY SOCIALLY RESPONSIVE
RESPONSIVE FUND FUND- FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.80 0.80
Plus: Distribution fees none none
Other expenses 0.30 0.30
---- ----
Total annual operating
Equals: expenses 1.10 1.10
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $112 $350 $606 $1340
EXPENSES- PRO FORMA
(UNAUDITED) (A) $112 $350 $606 $1340
26
<PAGE>
SOCIALLY RESPONSIVE TRUST
FEE TABLE
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA (UNAUDITED)
EQUITY TRUST- (A)
SOCIALLY SOCIALLY RESPONSIVE
RESPONSIVE TRUST FUND- TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.94 0.94
Plus: Distribution fees 0.10 0.10
Other expenses** 0.78 0.78
---- ----
Total annual operating
Equals: expenses 1.82 1.82
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
its total annual operating expenses are not more than 0.20% above those of
another Neuberger Berman fund that invests in the same portfolio of securities.
This arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. Under this arrangement, which Neuberger Berman
Management can terminate upon sixty days' notice to the fund, total annual
operating expenses of the fund last year would have been limited to 1.20% of the
fund's average net assets. Actual expenses this year may be higher or lower. The
as reported column includes costs paid by the fund and its share of master
portfolio costs.
** At current asset levels, the fund believes "Management Fees" and "Total
annual operating expenses" will be 0.95% and 1.83% of average net assets for the
current fiscal year. As described above, however, Neuberger Berman Management
has agreed to reimburse certain expenses of the fund so actual expenses will be
lower.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED*** $185 $573 $985 $2137
EXPENSES- PRO FORMA
(UNAUDITED) (A)*** $185 $573 $985 $2137
*** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $122, $381, $660, AND $1455,
RESPECTIVELY; OR $122, $381, $660, AND $1455, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
27
<PAGE>
SOCIALLY RESPONSIVE ASSETS
FEE TABLE
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA (UNAUDITED)
EQUITY ASSETS- (A)
SOCIALLY SOCIALLY RESPONSIVE
RESPONSIVE ASSETS FUND- ASSETS CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.95 0.95
Plus: Distribution fees 0.25 0.25
Other expenses** 0.54 0.54
---- ----
Total annual operating
Equals: expenses 1.74 1.74
Expense
Minus: reimbursement 0.24 0.24
---- ----
Equals: Net expenses 1.50 1.50
</TABLE>
* Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/02, so that the total annual operating
expenses of the fund are limited to 1.50% of average net assets. This
arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that repayment does not cause the
fund's annual operating expenses to exceed 1.50% of its average net assets. Any
such repayment must be made within three years after the year in which Neuberger
Berman Management incurred the expense. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $153 $474 $818 $1791
EXPENSES- PRO FORMA
(UNAUDITED) (A) $153 $474 $818 $1791
28
<PAGE>
TECHNOLOGY FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY FUNDS- TECHNOLOGY FUND-
TECHNOLOGY FUND FUND CLASS
<S> <C> <C> <C>
Shareholder Fees (% of
amount redeemed or
exchanged)
These are deducted
directly from your
investment.
Redemption Fee* 2.00 2.00
Exchange Fee* 2.00 2.00
* A redemption fee of 2.00% is charged on investments held 180 days or less,
whether fund shares are redeemed or exchanged for shares of another fund.
Annual operating
expenses (% of ANA)**
These are deducted from
fund assets, so you pay
them indirectly
Management Fees 1.11 1.11
Plus: Distribution fees none none
Other expenses*** 0.91 0.91
---- ----
Total annual operating
Equals: expenses 2.02 2.02
Expense
Minus: reimbursement 0.02 0.02
---- ----
Equals: Net expenses 2.00 2.00
</TABLE>
** Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/03, so that the total annual operating
expenses of the fund are limited to 2.00% of average net assets. In addition,
the arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that the repayment does not cause
the fund's annual operating expenses to exceed 2.00% of its average net assets.
Any such repayment must be made within three years after the year in which
Neuberger Berman Management incurred the expense. The as reported column
includes costs paid by the fund and its share of master portfolio costs.
*** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $203 $627 $1078 $2327
EXPENSES- PRO FORMA
(UNAUDITED) (A) $203 $627 $1078 $2327
29
<PAGE>
TECHNOLOGY TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (A)
EQUITY TRUST- TECHNOLOGY FUND-
TECHNOLOGY TRUST TRUST CLASS
<S> <C> <C> <C>
Shareholder Fees (% of
amount redeemed or
exchanged)
These are deducted
directly from your
investment.
Redemption Fee* 2.00 2.00
Exchange Fee* 2.00 2.00
* A redemption fee of 2.00% is charged on investments held 180 days or less,
whether fund shares are redeemed or exchanged for shares of another fund.
Annual operating
expenses (% of
ANA)**
These are deducted from
fund assets, so you pay
them indirectly
Management Fees 1.25 1.25
Plus: Distribution fees 0.10 0.10
Other expenses*** 0.80 0.80
---- ----
Total annual operating
Equals: expenses 2.15 2.15
Expense
Minus: reimbursement 0.15 0.15
---- ----
Equals: Net expenses 2.00 2.00
</TABLE>
** Neuberger Berman Management has contractually agreed to reimburse certain
expenses of the fund through 12/31/03, so that the total annual operating
expenses of the fund are limited to 2.00% of average net assets. In addition,
the arrangement does not cover interest, taxes, brokerage commissions, and
extraordinary expenses. The fund has agreed to repay Neuberger Berman Management
for expenses reimbursed to the fund provided that the repayment does not cause
the fund's annual operating expenses to exceed 2.00% of its average net assets.
Any such repayment must be made within three years after the year in which
Neuberger Berman Management incurred the expense. The as reported column
includes costs paid by the fund and its share of master portfolio costs.
*** Other expenses are based on estimated amounts for the current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
1 Year 3 Years 5 Years 10 Years
EXPENSES- AS REPORTED $203 $627 $1078 $2327
EXPENSES- PRO FORMA
(UNAUDITED) (A) $203 $627 $1078 $2327
(A) EXPENSES ARE EXPECTED TO BE REDUCED AS A RESULT OF THE REORGANIZATION.
BECAUSE THE COMPANY IS UNABLE TO ESTIMATE ANY AMOUNTS, NO REDUCTIONS ARE
PRESENTED.
30
<PAGE>
INFORMATION PRESENTED IN THE AS REPORTED COLUMN INCLUDES AN ALLOCATION OF
EXPENSES FROM THE PORTFOLIOS, WHICH WOULD BE BORNE BY THE RESPECTIVE FUNDS IF
THE PROPOSED REORGANIZATION IS APPROVED.
CASH RESERVES
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (a)
INCOME FUNDS- CASH RESERVES-FUND
CASH RESERVES CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.51 0.51
Plus: Distribution fees none none
Other expenses 0.10 0.10
Total annual operating ---- ----
Equals: expenses 0.61 0.61
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED $62 $195 $340 $762
EXPENSES- PRO FORMA
(UNAUDITED) (a) $62 $195 $340 $762
</TABLE>
<PAGE>
GOVERNMENT MONEY FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
(a)
AS REPORTED
INCOME FUNDS
GOVERNMENT GOVERNMENT MONEY
MONEY FUND FUND-FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.52 0.52
Plus: Distribution fees none none
Other expenses 0.08 0.08
Total annual operating ---- ----
Equals: expenses 0.60 0.60
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED $61 $192 $335 $750
EXPENSES- PRO FORMA
(UNAUDITED) (a) $61 $192 $335 $750
</TABLE>
<PAGE>
HIGH YIELD BOND FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (a)
INCOME FUNDS-
HIGH YIELD BOND HIGH YIELD BOND FUND-
FUND FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.65 0.65
Plus: Distribution fees none none
Other expenses 0.78 0.78
Total annual operating ---- ----
Equals: expenses 1.43 1.43
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
the total annual operating expenses of the fund are limited to 1.00% of average
net assets. This arrangement can be terminated upon 60 days' notice to the fund.
In addition, the arrangement does not cover interest, taxes, brokerage
commissions, and extraordinary expenses. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED** $146 $452 $782 $1713
EXPENSES- PRO FORMA
(UNAUDITED) (a)** $146 $452 $782 $1713
</TABLE>
**UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $102, $318, $552, AND $1225,
RESPECTIVELY; OR $102, $318, $552 AND $1225, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
<PAGE>
LIMITED MATURITY BOND FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNADUTIED)
AS REPORTED (a)
INCOME FUNDS-
LIMITED MATURITY LIMITED MATURITY BOND FUND
BOND FUND FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.52 0.52
Plus: Distribution fees none none
Other expenses 0.20 0.20
Total annual operating ---- ----
Equals: expenses 0.72 0.72
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
the total annual operating expenses of the fund are limited to 0.70% of average
net assets. This arrangement can be terminated upon 60 days' notice to the fund.
In addition, the arrangement does not cover interest, taxes, brokerage
commissions, and extraordinary expenses. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED** $74 $230 $401 $894
EXPENSES- PRO FORMA
(UNAUDITED) (a)** $74 $230 $401 $894
</TABLE>
**UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $72, $224, $390, AND $871,
RESPECTIVELY; OR $72, $224, $390, AND $871, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
<PAGE>
LIMITED MATURITY BOND TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (a)
INCOME TRUST-
LIMITED MATURITY LIMITED MATURITY BOND
BOND TRUST FUND- TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.75 0.75
Plus: Distribution fees none none
Other expenses 0.37 0.37
Total annual operating ---- ----
Equals: expenses 1.12 1.12
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
the total annual operating expenses of the fund are limited to 0.80% of average
net assets. This arrangement may be terminated upon 60 days' notice to the fund.
In addition, this arrangement does not cover interest, taxes, brokerage
commissions, and extraordinary expenses. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED** $114 $356 $617 $1363
EXPENSES- PRO FORMA
(UNAUDITED) (a)** $114 $356 $617 $1363
</TABLE>
**UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $82, $255, $444, AND $990,
RESPECTIVELY; OR $82, $255, $444, AND $990, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
<PAGE>
MUNICIPAL MONEY FUND
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (a)
INCOME FUNDS-
MUNICIPAL MONEY MUNICIPAL MONEY
FUND FUND-FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.52 0.52
Plus: Distribution fees none none
Other expenses 0.15 0.15
Total annual operating ---- ----
Equals: expenses 0.67 0.67
</TABLE>
* The figures in the table are based on last year's expenses. Actual expenses
this year may be higher or lower. The as reported column includes costs paid by
the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED $68 $214 $373 $835
EXPENSES- PRO FORMA
(UNAUDITED) (a) $68 $214 $373 $835
</TABLE>
<PAGE>
MUNICIPAL SECURITIES TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (a)
INCOME FUNDS-
MUNICIPAL MUNICIPAL SECURITIES
SECURITIES TRUST TRUST-FUND CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.52 0.52
Plus: Distribution fees none none
Other expenses 0.55 0.55
Total annual operating ---- ----
Equals: expenses 1.07 1.07
</TABLE>
* Neuberger Berman Management reimburses certain expenses of the fund so that
the total annual operating expenses of the fund are limited to 0.65% of average
net assets. This arrangement may be terminated upon 60 days' notice to the fund.
In addition, this arrangement does not cover interest, taxes, brokerage
commissions, and extraordinary expenses. The as reported column includes costs
paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED** $109 $340 $590 $1306
EXPENSES- PRO FORMA
(UNAUDITED) (a)** $109 $340 $590 $1306
</TABLE>
**UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT, YOUR COSTS FOR THE ONE-,
THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE $66, $208, $362, AND $810,
RESPECTIVELY; OR $66, $208, $362, AND $810, RESPECTIVELY, AFTER THE PROPOSED
REORGANIZATION.
<PAGE>
INSTITUTIONAL CASH TRUST
FEE TABLE
<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED)
AS REPORTED (a)
INCOME TRUST-
INSTITUTIONAL CASH INSTITUTIONAL CASH
TRUST FUND- TRUST CLASS
<S> <C> <C> <C>
Shareholder Expenses none none
Annual operating
expenses (% of ANA)*
These are deducted
from fund assets,
so you pay them
indirectly
Management Fees 0.25 0.25
Plus: Distribution fees none none
Other expenses** 0.16 0.16
Total annual operating ---- ----
Equals: expenses 0.41 0.41
</TABLE>
* The as reported column includes costs paid by the fund and its share of master
portfolio costs. ** Other expenses are based on estimated amounts for the
current fiscal year.
EXPENSE EXAMPLE
THE EXAMPLE ASSUMES THAT YOU INVESTED $10,000 FOR THE PERIODS SHOWN, THAT YOU
EARNED A HYPOTHETICAL 5% TOTAL RETURN EACH YEAR, AND THAT THE FUND'S EXPENSES
WERE THOSE IN THE TABLE ABOVE. YOUR COSTS WOULD BE THE SAME WHETHER YOU SOLD
YOUR SHARES OR CONTINUED TO HOLD THEM AT THE END OF EACH PERIOD. ACTUAL
PERFORMANCE AND EXPENSES MAY BE HIGHER OR LOWER.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
EXPENSES- AS REPORTED $42 $132 $230 $518
EXPENSES- PRO FORMA
(UNAUDITED) (a) $42 $132 $230 $518
</TABLE>
(a) EXPENSES ARE EXPECTED TO BE REDUCED AS A RESULT OF THE REORGANIZATION.
BECAUSE THE COMPANY IS UNABLE TO ESTIMATE ANY AMOUNTS, NO REDUCTIONS ARE
PRESENTED.
<PAGE>
Pro Forma Capitalization
------------------------
Pro forma capitalization information is included here for the various
classes:
Most of the following tables are as of August 31, 1999, the date of the latest
audited fiscal period. Except for Technology, those funds that began
operations after August 31, 1999 are shown as of February 29, 2000.
Because Technology started operations after February 29, 2000 its
capitalization table is as of June 30, 2000.
<TABLE>
<CAPTION>
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF FEBRUARY 29, 2000 PRO FORMA AS OF FEBRUARY 29, 2000 (UNAUDITED)
FUNDS INVESTING IN CENTURY PORTFOLIO CENTURY FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUNDS- CENTURY FUND $2,344 $ 12.38 $ 29,013 FUND CLASS 2,344 $ 12.38 $ 29,013
172 $ 12.38 $ 2,124 TRUST CLASS 172 $ 12.38 $ 2,124
EQUITY TRUST- CENTURY TRUST --------- ----------------
$ 31,137 $ 31,137
If the reorganization is approved, shareholders invested in the Equity Funds -
Century Fund or Equity Trust - Century Trust will become shareholders of the
Fund Class or Trust Class of Century Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN FOCUS PORTFOLIO FOCUS FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY ASSETS- FOCUS ASSETS 117 $ 16.18 $ 1,899 ASSET CLASS 117 $ 16.18 $ 1,899
EQUITY FUNDS- FOCUS FUND 36,598 $ 36.25 $ 1,326,608 FUND CLASS 36,598 $ 36.25 $ 1,326,608
1
<PAGE>
EQUITY TRUST- FOCUS TRUST 9,145 $ 23.62 $ 216,020 TRUST CLASS 9,145 $ 23.62 $ 216,020
---------- ----------------
$1,544,527 1,544,527
If the reorganization is approved, shareholders invested in the
Equity Assets - Focus Assets, Equity Funds - Focus Fund or Equity Trust -
Focus Trust will become shareholders of the Asset Class,
Fund Class or Trust Class of Focus Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN GENESIS PORTFOLIO GENESIS FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY SERIES- GENESIS INSTITUTIONAL 11,058 $ 20.28 $ 224,224 SERIES CLASS 11,058 $ 20.28 $ 224,224
EQUITY ASSETS- GENESIS ASSETS 6,473 $ 12.64 $ 81,805 ASSET CLASS 6,473 $ 12.64 $ 81,805
EQUITY FUNDS- GENESIS FUND 59,152 $ 14.39 $ 851,255 FUND CLASS 59,152 $ 14.39 $ 851,255
EQUITY TRUST- GENESIS TRUST 29,177 $ 20.26 $ 591,109 TRUST CLASS 29,177 $ 20.26 $ 591,109
----------- ----------------
$ 1,748,393 $ 1,748,393
If the reorganization is approved, shareholders invested in the Equity Series-
Genesis Institutional, Equity Assets - Genesis Assets, Equity Funds - Genesis
Fund or Equity Trust - Genesis Trust will become shareholders of the Series
Class, Asset Class, Fund Class or Trust Class of Genesis Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN GUARDIAN PORTFOLIO GUARDIAN FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY ASSETS- GUARDIAN ASSETS 1,834 $ 13.54 $ 24,829 ASSET CLASS 1,834 $ 13.54 $ 24,829
EQUITY FUNDS- GUARDIAN FUND 151,434 $ 22.72 $ 3,441,033 FUND CLASS 151,434 $ 22.72 $ 3,441,033
EQUITY TRUST- GUARDIAN TRUST 76,470 $ 16.36 $ 1,251,151 TRUST CLASS 76,470 $ 16.36 $ 1,251,151
----------- ----------------
$ 4,717,013 $ 4,717,013
2
<PAGE>
If the reorganization is approved, shareholders invested in the Equity
Assets - Guardian Assets, Equity Funds - Guardian Fund or Equity Trust -
Guardian Trust will become shareholders of the Asset Class, Fund
Class or Trust Class of Guardian Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN INTERNATIONAL PORTFOLIO INTERNATIONAL FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUNDS- INTERNATIONAL FUND 6,712 $ 16.76 $ 112,516 FUND CLASS 6,712 $ 16.76 $ 112,516
EQUITY TRUST- INTERNATIONAL TRUST 140 $ 16.92 $ 2,373 TRUST CLASS 140 $ 16.92 $ 2,373
----------- ----------------
$ 114,889 $ 114,889
If the reorganization is approved, shareholders invested in the
Equity Funds - International Fund or Equity Trust - International Trust
will become shareholders of the Fund Class or Trust Class
of International Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN MANHATTAN PORTFOLIO MANHATTAN FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY ASSETS- MANHATTAN ASSETS 118 $ 14.54 $ 1,717 ASSET CLASS 118 $ 14.54 $ 1,717
EQUITY FUNDS- MANHATTAN FUND 46,894 $ 12.07 $ 565,960 FUND CLASS 46,894 $ 12.07 $ 565,960
EQUITY TRUST- MANHATTAN TRUST 3,014 $ 15.02 $ 45,284 TRUST CLASS 3,014 $ 15.02 $ 45,284
----------- ----------------
$ 612,961 $ 612,961
3
<PAGE>
If the reorganization is approved, shareholders invested in the Equity Assets -
Manhattan Assets, Equity Funds - Manhattan Fund or Equity Trust - Manhattan
Trust will become shareholders of the Asset Class, Fund Class or
Trust Class of Manhattan Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF FEBRUARY 29, 2000 PRO FORMA AS OF FEBRUARY 29, 2000 (UNAUDITED)
FUNDS INVESTING IN MILLENNIUM PORTFOLIO MILLENNIUM FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY ASSETS- MILLENNIUM ASSETS 5 $ 12.49 $ 66 ASSET CLASS 5 $ 12.49 $ 66
EQUITY FUNDS- MILLENNIUM FUND 7,932 $ 41.46 $ 328,902 FUND CLASS 7,932 $ 41.46 $ 328,902
EQUITY TRUST- MILLENNIUM TRUST 420 $ 39.28 $ 16,515 TRUST CLASS 420 $ 39.28 $ 16,515
----------- ----------------
$ 345,483 $ 345,483
If the reorganization is approved, shareholders invested in the Equity
Assets - Millennium Assets, Equity Funds - Millennium Fund or Equity Trust -
Millennium Trust will become shareholders of the Asset Class, Fund Class
or Trust Class of Millennium Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN PARTNERS PORTFOLIO PARTNERS FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY ASSETS- PARTNERS ASSETS 3,967 $ 15.74 $ 62,432 ASSET CLASS 3,967 $ 15.74 $ 62,432
EQUITY FUNDS- PARTNERS FUND 108,043 $ 26.42 $ 2,854,358 FUND CLASS 108,043 $ 26.42 $ 2,854,358
EQUITY TRUST- PARTNERS TRUST 45,432 $ 18.71 $ 850,108 TRUST CLASS 45,432 $ 18.71 $ 850,108
----------- ----------------
$ 3,766,898 $ 3,766,898
4
<PAGE>
If the reorganization is approved, shareholders invested in the Equity
Assets - Partners Assets, Equity Funds - Partners Fund or Equity Trust -
Partners Trust will become shareholders of the Asset Class, Fund
Class or Trust Class of Partners Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN REGENCY PORTFOLIO REGENCY FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUNDS- REGENCY FUND 809 $ 9.82 $ 7,943 FUND CLASS 809 $ 9.82 $ 7,943
EQUITY TRUST- REGENCY TRUST 37 $ 9.76 $ 357 TRUST CLASS 37 $ 9.76 $ 357
---------- ----------------
$ 8,300 $ 8,300
If the reorganization is approved, shareholders invested in the Equity Funds
- Regency Fund or Equity Trust - Regency Trust will become shareholders of
the Fund Class or Trust Class of Regency Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF AUGUST 31, 1999 PRO FORMA AS OF AUGUST 31, 1999 (UNAUDITED)
FUNDS INVESTING IN SOCIALLY RESPONSIVE PORTFOLIO SOCIALLY RESPONSIVE FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY ASSETS- SOCIALLY
RESPONSIVE ASSETS 11 $ 9.85 $ 109 ASSET CLASS 11 $ 9.85 $ 109
EQUITY FUNDS- SOCIALLY
RESPONSIVE FUND 5,575 $ 21.33 $ 118,900 FUND CLASS 5,575 $ 21.33 $ 118,900
EQUITY TRUST- SOCIALLY
RESPONSIVE TRUST 1,755 $ 14.41 $ 25,295 TRUST CLASS 1,755 $ 14.41 $ 25,295
----------- ---------------
$ 144,304 $ 144,304
If the reorganization is approved, shareholders invested in the Equity Assets -
Socially Responsive Assets, Equity Funds - Socially Responsive Fund or Equity
Trust - Socially Responsive Trust will become shareholders of the Asset Class,
Fund Class or Trust Class of Socially Responsive Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
EXISTING AS OF JUNE 30, 2000 PRO FORMA AS OF JUNE 30, 2000 (UNAUDITED)
FUNDS INVESTING IN TECHNOLOGY PORTFOLIO TECHNOLOGY FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUNDS- TECHNOLOGY FUND 1,509 $ 10.64 $ 16,051 FUND CLASS 1,509 $ 10.64 $ 16,051
EQUITY TRUST- TECHNOLOGY TRUST 200 $ 10.63 $ 2,128 TRUST CLASS 200 $ 10.63 $ 2,128
----------- -----------------
$ 18,179 $ 18,179
5
</TABLE>
<PAGE>
If the reorganization is approved, shareholders invested in the Equity Funds -
Technology Fund or Equity Trust - Technology Trust will become shareholders
of the Fund Class or Trust Class of Technology Fund, respectively.
Most of the following tables are as of October 31, 1999, the date of the latest
audited fiscal period, except for Institutional Cash. Because Institutional
Cash started operations after October 31, 1999 its capitalization
table is as of June 30, 2000.
<TABLE>
<CAPTION>
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF OCTOBER 31, 1999 PRO FORMA AS OF OCTOBER 31, 1999 (UNAUDITED)
FUNDS INVESTING IN CASH RESERVES PORTFOLIO CASH RESERVES
<S> <C> <C> <C> <C> <C> <C>
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
INCOME FUNDS- CASH RESERVES 1,104,191 $ 1.00 $ 1,104,165 FUND CLASS 1,104,191 $ 1.00 $ 1,104,165
If the reorganization is approved, shareholders invested in the Income Funds
- Cash Reserves will become shareholders of the Fund Class of Cash Reserves.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF OCTOBER 31, 1999 PRO FORMA AS OF OCTOBER 31, 1999 (UNAUDITED)
FUNDS INVESTING IN GOVERNMENT MONEY PORTFOLIO GOVERNMENT MONEY FUND
<S> <C> <C> <C> <C> <C> <C>
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
INCOME FUNDS- GOVERNMENT MONEY FUND 653,377 $ 1.00 $ 653,377 FUND CLASS 653,377 $ 1.00 $ 653,377
If the reorganization is approved, shareholders invested in the Income
Funds - Government Money Fund will become shareholders of the
Fund Class of Government Money Fund.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF OCTOBER 31, 1999 PRO FORMA AS OF OCTOBER 31, 1999 (UNAUDITED)
FUNDS INVESTING IN HIGH YIELD BOND PORTFOLIO HIGH YIELD BOND FUND
<S> <C> <C> <C> <C> <C> <C>
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
INCOME FUNDS- HIGH YIELD BOND FUND 2,744 $ 8.68 $ 23,806 FUND CLASS 2,744 $ 8.68 $ 23,806
If the reorganization is approved, shareholders invested in the
Income Funds - High Yield Bond Fund will become shareholders of the
Fund Class of High Yield Bond Fund.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
EXISTING AS OF JUNE 30, 2000 PRO FORMA AS OF JUNE 30, 2000 (UNAUDITED)
FUNDS INVESTING IN INSTITUTIONAL CASH PORTFOLIO INSTITUTIONAL CASH FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C>
INCOME TRUST- INSTITUTIONAL CASH
TRUST 325,133 $ 1.00 $ 325,133 TRUST CLASS 325,133 $ 1.00 $ 325,133
If the reorganization is approved, shareholders invested in the Income Trust
- Institutional Cash Trust will become shareholders of the Trust Class of
Institutional Cash Fund.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF OCTOBER 31, 1999 PRO FORMA AS OF OCTOBER 31, 1999 (UNAUDITED)
FUNDS INVESTING IN LIMITED MATURITY BOND PORTFOLIO LIMITED MATURITY BOND FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C>
INCOME FUNDS- LIMTIED MATURITY
BOND FUND 23,872 $ 9.51 $ 227,041 FUND CLASS 23,872 $ 9.51 $ 227,041
INCOME TRUST- LIMITED MATURITY
BOND TRUST 4,584 $ 9.06 $ 41,549 TRUST CLASS 4,584 $ 9.06 $ 41,549
------------ ----------------
$ 268,590 $ 268,590
1
<PAGE>
If the reorganization is approved, shareholders invested in the Income Funds
- Limited Maturity Bond Fund or Income Trust - Limited Maturity Bond Trust
will become shareholders of the Fund Class or Trust Class of Limited
Maturity Bond Fund, respectively.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF OCTOBER 31, 1999 PRO FORMA AS OF OCTOBER 31, 1999 (UNAUDITED)
FUNDS INVESTING IN MUNICIPAL MONEY PORTFOLIO MUNICIPAL MONEY FUND
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C>
INCOME FUNDS- MUNICIPAL MONEY FUND 293,846 $ 1.00 $ 293,774 FUND CLASS 293,846 $ 1.00 $ 293,774
If the reorganization is approved, shareholders invested in the Income Funds -
Municipal Money Fund will become shareholders of the Fund Class of
Municipal Money Fund.
CAPITALIZATION TABLE (UNAUDITED)
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS)
AS REPORTED AS OF OCTOBER 31, 1999 PRO FORMA AS OF OCTOBER 31, 1999 (UNAUDITED)
FUNDS INVESTING IN MUNICIPAL SECURITIES PORTFOLIO MUNICIPAL SECURITIES TRUST
SHARES NAV NET ASSETS SHARES NAV CLASS NET ASSETS
<S> <C> <C> <C> <C> <C> <C>
INCOME FUNDS- MUNICIPAL SECURITIES
TRUST 3,244 $ 10.78 $ 34,957 FUND CLASS 3,244 $ 10.78 $ 34,957
If the reorganization is approved, shareholders invested in the Income Funds
- Municipal Securities Trust will become shareholders of the Fund Class of
Municipal Securities Trust.
</TABLE>
<PAGE>
Purchases and Redemptions
-------------------------
As explained above, in the Reorganization, shareholders of the funds will
receive shares of classes of the new Portfolios. After the Reorganization,
shareholders of the funds will be able to purchase and redeem shares in the
Portfolios in substantially the same manner and subject to substantially the
same conditions as shares in the funds are presently purchased and redeemed.
This information is set forth in each fund's current prospectus and statement of
additional information. In the case of NB Technology Fund, NB Technology Trust,
NB International Fund and NB International Trust, each of which has a 2.00%
redemption fee on shares sold within 180 days of purchase, calculation of the
180-day holding period will not be affected by the Reorganization.
Dividends, Distributions and Taxes
----------------------------------
After the Reorganization, the Portfolios will declare and pay dividends and
calculate and make distributions of net capital gains, if any, in a manner
identical to that of the funds and set forth in the funds' current prospectuses
and statements of additional information. Because the accounting treatment of
unrealized capital gain is different in master-feeder funds than it is in
multiple-class funds, some shareholders may receive different taxable capital
gain distributions than they otherwise would have if the Reorganization were not
taking place. It is impossible to predict whether any of this gain will actually
be realized in the future, the amount of it, or the date on which it will be
realized (if at all). Accordingly, the effect on shareholders would be highly
speculative.
Like the funds, each of Equity Funds and Income Funds has elected to
qualify its respective Portfolios as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended, and intends that
each Portfolio will remain so qualified. After the Reorganization, each
Portfolio will be entitled to the same benefits and subject to the same tax
regulations as the funds immediately prior to the Reorganization.
Portfolio Transactions and Brokerage
------------------------------------
NBMI will execute the portfolio transactions and allocate the brokerage
business of the Portfolios of Equity Funds and Income Funds subject to the
policies established by the Boards of Trustees of Equity Funds and Income Funds,
which are substantially identical to those in effect with respect to the master
funds immediately prior to the Reorganization.
Shareholders' Rights
--------------------
The rights of shareholders of the Portfolios will be identical in all
material respects to those of shareholders of the funds, with a few exceptions.
As was the case before the Reorganization, shareholders of the Portfolios will
vote on a per Portfolio basis on those matters that affect only particular
Portfolios. In addition, on those matters affecting only a particular class,
only shareholders of that class will vote. On all other matters, shareholders of
Equity Funds will vote in the aggregate, and shareholders of Income Funds will
- 45 -
<PAGE>
likewise vote in the aggregate. Because the Reorganization will increase the
size of the Portfolios, the voting power of individual shareholders will be
diluted with respect to matters on which shareholders of Equity Funds and Income
Funds vote in the aggregate or vote on a per series basis rather than on an
individual class basis. However, the same "dilution" could occur through growth
in the size of your fund, which would bring in additional shareholders.
Furthermore, matters currently requiring a vote of master fund investors, such
as approval of changes in advisory fees, already require that each feeder fund
solicit the votes of its shareholders.
Risk Factors
------------
The Portfolios will have investment objectives, policies and restrictions
that are identical to those of the funds and the corresponding master funds,
except that (1) the Portfolios will invest their assets directly rather than
through the master funds, (2) the shareholders of Equity Funds and Income Funds
are currently being asked to approve a change in fundamental investment policies
regarding diversification identical to that contained in Proposal 2 of this
Combined Proxy Statement and Prospectus, and (3) the shareholders of Cash
Reserves and Government Money Fund are currently being asked to approve a change
in their investment policies as described in Proposals 6 and 7. In addition, the
Portfolios will be administered in every material respect in a substantially
identical manner to the funds. Consequently, the risks associated with investing
in the Portfolios will be virtually identical to those associated with investing
in the funds.
Further Information about the Portfolios and the Funds
------------------------------------------------------
Further information about the funds is contained in their current
prospectuses and statements of additional information, which are incorporated
into this Combined Proxy Statement and Prospectus by reference. If you are being
asked to vote on this Proposal 4, copy of Equity Funds' prospectus and Income
Funds' prospectus accompanies this document. Each of Equity Trust, Equity Assets
and Equity Series will also provide its most recent annual report to
shareholders with respect to the funds for the fiscal year ended August 31,
1999, and its semiannual report to shareholders for the six months ended
February 29, 2000, upon request. Income Trust will also provide its most recent
annual report to shareholders for the fiscal year ended October 31, 1999, and
its semiannual report to shareholders for the six months ended April 30, 2000,
upon request. These documents are available without charge by writing the
Neuberger Berman Funds at 605 Third Avenue, 2nd Floor, New York, New York
10158-0180, or calling at 800-877-9700.
The funds are subject to the information requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, and are required by
those Acts to file reports, proxy statements and other information with the SEC.
Such reports, proxy statements and other information can be inspected and copied
at the Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. They may also be viewed on the Internet at [WWW.SEC.GOV].
Copies of such materials can be obtained at prescribed rates from the Public
Reference Branch, Office of Consumer Affairs and Information Services of the
SEC, Washington D.C. 20549.
- 46 -
<PAGE>
APPROVAL OF THE BOARD OF TRUSTEES
At a Board meeting held on June 6, 2000, the Boards of Trustees of Equity
Funds, Equity Trust, Equity Assets, Equity Series, Income Funds and Income Trust
approved the Reorganization Plan and determined that the proposed Reorganization
was in the best interests of the shareholders of each series of the funds and
will not result in dilution of the financial interests of the shareholders of
any series of the funds. After considering the relevant factors, the Boards of
Trustees of the funds, including the Trustees who are not "interested persons"
of the funds, as that term is defined in the 1940 Act (the "Independent
Trustees"), voted to approve and voted to recommend that shareholders of each
fund approve the Reorganization Plan. In making this determination, the Boards
considered the following factors, among others:
1. the potential cash savings that may be achieved by reorganizing the
master-feeder structure into a single-level, multi-class structure through the
elimination of duplicate expenses;
2. the expected administrative benefits resulting from the simplified
structure;
3. the proposal from NBMI to manage each fund's assets for the same
investment management fee currently charged to the fund;
4. the tax-free nature of the reorganization;
5. the potential for greater investor interest in funds organized in the
more common and familiar multi-class structure;
6. the greater likelihood of asset growth that potentially may result from
a more familiar structure and the greater economies of scale that can be
achieved from such asset growth, including without limitation lower management
fees that can be reached at certain asset level breakpoints;
7. the terms and conditions of the Reorganization Plan; and
8. alternative options to the Reorganization.
In considering the Reorganization Plan and proposed Reorganization, the
Boards determined that the multi-class structure would eliminate the cost and
complexity of maintaining the master-feeder structure. There are certain
duplicate expenses associated with maintaining the master-feeder structure,
which requires maintaining separate investment companies for the master fund and
for each feeder fund. Among others, these include the legal and administrative
costs of maintaining separate SEC registrations for the master fund and each
feeder fund, and of producing separate reports to the SEC and to shareholders
for each feeder fund and each master fund on a semi-annual basis, state
qualification fees associated with these separate entities, franchise fees,
separate audit fees, and the other legal and administrative costs of maintaining
the separate entities. Of course, the Boards recognized that any net savings are
difficult to predict accurately.
- 47 -
<PAGE>
The Boards believe that the Reorganization may result in lower expense
ratios for the funds. This lower expense ratio has the potential to attract new
investors and thus increase the opportunity for further asset growth. This
potential asset growth may enable fund shareholders to obtain economies of scale
by spreading certain expenses over a larger asset base, and may assist a fund in
reaching its asset breakpoint in the rate of the investment management fee
payable to NBMI. There can be no assurance, however, that such asset growth,
economies of scale and lower expense ratios will be realized. The Board
recognized that any cost savings would accrue to the benefit of NBMI as well,
through its voluntary and contractual agreements with the funds to limit the
funds' total annual operating expenses.
The Boards also believe that the Reorganization may improve the
marketability of the funds, because investors apparently understand the
multi-class structure better than they do the master-feeder structure. The
Boards considered that any improved marketability would benefit both NBMI (by
virtue of certain fees determined as a percentage of net assets) and existing
shareholders (by virtue of economies of scale).
CLOSING DATE
If shareholders approve the Reorganization Plan with respect to a fund, it
is currently intended that the Reorganization of the Equity Funds will take
place at the close of business on or about December 15, 2000, and the
Reorganization of the Income Funds will take place at the close of business on
or about February 15, 2001. On or about the date for your fund, you will receive
a prospectus for Equity Funds and/or Income Funds, containing information about
the relevant class of shares.
The Board of Trustees of two combining funds by mutual agreement can
terminate the Reorganization of those funds at or before the closing date, even
if shareholders have approved the Reorganization. In addition, the
Reorganization of certain funds is contingent on the receipt of certain
regulatory assurances from the SEC. These funds have asked for such relief, but
there is no guarantee that the SEC will grant it.
REORGANIZATION EXPENSES
Each entity participating in the Reorganization (i.e., Equity Funds, Equity
Trust, Equity Assets, Equity Series, Income Funds, Income Trust and each of
their series) will bear its own expenses. The expenses borne by each Trust will
be allocated among its series on the basis of their relative net assets.
THE BOARDS OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND THAT YOU APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
IN PROPOSAL 4.
VOTE REQUIRED
Approval of the Reorganization Plan with respect to a fund requires the
affirmative vote of either (1) a majority of the outstanding shares of that
fund, or (2) at least 67 percent of the shares present in person or by proxy at
a meeting at which more than 50% of the shares are present.
If the shareholders of one or more funds do not approve the Reorganization
Plan, or the Reorganization is not completed for any other reason, then the
Board of Trustees of the relevant fund will determine what additional steps may
be appropriate. The Trust Instrument governing the funds permits the Board to
reorganize a fund into a series of another investment company if the Board
determines that continued operation of that series is no longer viable. If some
funds vote to reorganize and others do not, the Board may determine, based on
the facts as they then exist, that the remaining funds are no longer viable as
separate entities.
- 48 -
<PAGE>
PROPOSAL 5. APPROVAL OF THE DISTRIBUTION AND
SHAREHOLDER SERVICES PLAN
(NEUBERGER BERMAN GENESIS, GUARDIAN AND PARTNERS TRUST ONLY)
The Board of Trustees of Neuberger Berman Equity Trust has approved, and
unanimously recommends that the shareholders of Neuberger Berman Genesis Trust,
Neuberger Berman Guardian Trust and Neuberger Berman Partners Trust approve, the
Distribution and Shareholder Services Plan. The Trustees of Equity Trust,
including a majority of those Trustees who are not "interested persons" (as
defined in the Investment Company Act of 1940 ("1940 Act")) and who do not have
any direct or indirect financial interest in the operation of the Plan
("Independent Trustees"), approved the Distribution and Shareholder Services
Plan with respect to each fund's shares at a meeting held on April 28, 1999, and
determined at their meeting of June 6, 2000, to resubmit the Plan to
shareholders.
The Distribution and Shareholder Services Plan provides for the payment of
compensation for shareholder servicing activities, including but not limited to:
(a) responding to inquiries from shareholders or their representatives
requesting information regarding matters such as shareholder account or
transaction status, net asset value of shares, performance, services, plans and
options, investment policies, portfolio holdings, and distributions and taxation
thereof; and (b) dealing with communications and correspondence of shareholders;
including compensation to organizations and employees who service shareholder
accounts, and expenses of such organizations, including overhead, telephone, and
other communication expenses. (See Section 3.B. of the proposed Plan).
The Distribution and Shareholder Services Plan also permits payment of
compensation for distribution-related activities, including but not limited to
compensation for (a) the distribution of shares; (b) overhead, telephone, and
communication expenses; (c) the printing of prospectuses, statements of
additional information, and reports for other than existing shareholders; and
(d) the preparation and distribution of sales literature and advertising
materials. (See Section 3.A. of the proposed Plan)
NBMI currently provides distribution services to Genesis Trust, Guardian
Trust, and Partners Trust. Assuming approval of the Distribution and Shareholder
Services Plan by Genesis Trust, Guardian Trust and Partners Trust, each fund
would pay a new fee at an annual rate of 0.10% of its average daily net assets
to NBMI. NBMI expects to pay most or all of this fee to pension administrators,
broker-dealers and other financial institutions that make fund shares available
to investors and/or provide services to the funds and their shareholders. To the
extent NBMI does not pay the entire 0.10% to these entities, NBMI will retain
the remainder. The payment over a short interval may be more or less than NBMI
has expended for shareholder services and distribution during that interval.
Over the longer term, however, neither NBMI nor the Board expects the 0.10% fee
to cover NBMI's costs of shareholder servicing and distribution.
The funds would not be obligated under the Distribution and Shareholder
Services Plan to compensate NBMI for expenses incurred in excess of the
authorized distribution fee, even if, as expected, the expenses incurred by it
- 49 -
<PAGE>
for servicing or distributing the funds' shares exceed the fee payable under the
Plan. The fee paid to a financial institution may be based on the level of
services it provides. If NBMI does not have to pay the entire amount to
institutions, the remaining portion would represent compensation to NBMI for new
or existing distribution and shareholder servicing expenses.
The Distribution and Shareholder Services Plan provides that a report of
the amounts expended under it, and the purposes for which such expenditures were
incurred, must be made to the Trust's Board of Trustees for review at least
quarterly. In addition, the Plan provides that it may not be amended to
materially increase the costs that a fund may bear pursuant to it without
approval of the fund's shareholders. Other material amendments to the Plan must
be approved by the vote of a majority of the Trustees, including a majority of
the Independent Trustees, cast in person at a meeting called for the purpose of
considering such amendments. The Distribution and Shareholder Services Plan is
terminable with respect to a fund at any time by vote of a majority of the
Independent Trustees or by vote of the holders of a majority of the outstanding
shares of the fund. The Distribution and Shareholder Services Plan would be
adopted pursuant to Rule 12b-1 under the 1940 Act. In accordance with this Rule,
the selection and nomination of the Trustees who are not interested persons of
Equity Trust is committed to the discretion of the then current Trustees who are
not interested persons of Equity Trust. (All of the Neuberger Berman Funds
follow this nominating policy already.)
A comparison of the current expense ratio and the proposed expense ratio
(after giving effect to the Distribution and Shareholder Services Plan) with
respect to each fund is shown in the tables under "Impact of the Proposal"
below.
This description of the Distribution and Shareholder Services Plan is
qualified in its entirety by reference to the Plan itself, a form of which is
attached as Appendix B to this proxy statement. If approved by shareholders, the
Distribution and Shareholder Services Plan will become effective in December
2000 for one year, and will remain in effect from year to year thereafter,
subject to annual continuation by the Board of Trustees.
IMPACT OF THE PROPOSAL. If the Proposal is approved, each fund would incur
distribution fees at an annual rate of 0.10% of average daily net assets, in
addition to the fees and expenses currently applicable. Under its existing
administration and shareholder services agreement with NBMI, each fund currently
pays a fee at an annual rate of 0.40% of average daily net assets. Of this
amount, NBMI pays at least 0.25% to pension administrators, broker-dealers and
other financial institutions that provide services to the funds and their
shareholders, and retains the rest for administration and accounting services
provided by NBMI. The following tables compare the management fees, distribution
fees, other expenses, and total fund operating expenses that shareholders of
each fund would bear under the existing structure with the fees and expenses
each shareholder would bear if they approve the Distribution and Shareholder
Services Plan.
Each fund currently has an arrangement whereby NBMI reimburses certain of
the fund's expenses so that the fund's total annual operating expenses are not
more than 0.10% above those of a certain other Neuberger Berman fund that
invests in the same portfolio of securities ("Sister Fund"). If the Distribution
and Shareholder Services Plan is adopted, each fund's total annual operating
- 50 -
<PAGE>
expenses will be limited to no more than 0.20% above those of its Sister Fund.
These expense limitation arrangements can be terminated upon 60 days' notice to
a fund.
If shareholders approve both the Plan of Reorganization (Proposal 4) and
the implementation of the Distribution and Shareholder Services Plan, then
shareholders of each fund will be holders of the Trust Class shares that are
subject to the Distribution and Shareholder Services Plan. For example, if
Genesis Trust shareholders approve both Proposals, they will become holders of
Trust Class shares of Neuberger Berman Genesis Fund that are subject to the
Distribution and Shareholder Services Plan. If the funds do not approve Proposal
4, then each fund will continue to operate with a master-feeder structure (so
long as it is viable), and each fund that has approved the Distribution and
Services Plan will be subject to it.
- 51 -
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN GENESIS TRUST
CURRENT PROPOSED
------- --------
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of average net Annual operating expenses (% of average
assets)* net assets)*
These are deducted from fund assets, so you These are deducted from fund assets, so
pay them indirectly. you pay them indirectly.
Management fees 1.12 Management fees 1.12
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES
0.10
Other expenses 0.11 Other expenses 0.11
---------- --------
Equals: Total annual operating expenses 1.23 EQUALS: TOTAL ANNUAL OPERATING EXPENSES 1.33
* Neuberger Berman Management reimburses certain * Neuberger Berman Management reimburses
expenses of the fund so that its total annual certain expenses of the fund so that its
operating expenses are not more than 0.10% above total annual operating expenses are not more
those of another Neuberger Berman fund that invests than 0.20% above those of another Neuberger
in the same portfolio of securities. This arrangement Berman fund that invests in the same
does not cover interest, taxes, brokerage portfolio of securities. This arrangement
commissions, and extraordinary expenses. Under this does not cover interest, taxes, brokerage
arrangement, which NB Management can terminate upon commissions, and extraordinary expenses.
60 days' notice to the fund, total annual operating Under this arrangement, which NB Management
expenses of the fund last year would have been can terminate upon 60 days' notice to the
limited to 1.27% of the fund's average net assets. fund, total annual operating expenses of the
The figures in the table are based on last year's fund last year would have been limited to
expenses. Actual expenses this year may be higher or 1.37% of the fund's average net assets. The
lower. The table includes costs paid by the fund and figures in the table are based on last year's
its share of master portfolio costs. expenses. Actual expenses this year may be
higher or lower. The table includes costs
paid by the fund and its share of master
portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 for the This example assumes that you invested $10,000
periods shown, that you earned a hypothetical 5% total for periods shown, that you earned a
return each year, and that the fund's expenses were those hypothetical 5% total return each year, and
in the table above. Your costs would be the same whether that the fund's expenses were those in the
you sold your shares or continued to hold them at the end table above. Your costs would be the same
of each period. Actual performance and expenses may be whether you sold your shares or continued to
higher or lower. hold them at the end of each period. Actual
performance and expenses may be higher or
lower.
</TABLE>
<TABLE>
<CAPTION>
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses $125 $390 $676 $1489 Expenses $135 $421 $729 $1,601
</TABLE>
- 52 -
<PAGE>
NEUBERGER BERMAN GUARDIAN TRUST
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of average net Annual operating expenses (% of average
assets)* net assets)*
These are deducted from fund assets, so you These are deducted from fund assets, so
pay them indirectly. you pay them indirectly.
Management fees 0.84 Management fees 0.84
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES
0.10
Other expenses 0.04 Other expenses 0.04
---------- -------
Equals: Total annual operating expenses 0.88 EQUALS: TOTAL ANNUAL OPERATING EXPENSES 0.98
* Neuberger Berman Management reimburses certain * Neuberger Berman Management reimburses
expenses of the fund so that its total annual certain expenses of the fund so that its
operating expenses are not more than 0.10% above total annual operating expenses are not more
those of another Neuberger Berman fund that invests than 0.20% above those of another Neuberger
in the same portfolio of securities. This arrangement Berman fund that invests in the same
does not cover interest, taxes, brokerage portfolio of securities. This arrangement
commissions, and extraordinary expense. Under this does not cover interest, taxes, brokerage
arrangement, which NB Management can terminate upon commissions, and extraordinary expenses.
60 days' notice to the fund, total annual operating Under this arrangement, which NB Management
expenses of the fund last year would have been can terminate upon 60 days' notice to the
limited to .92% of the fund's average net assets. The fund, total annual operating expenses of the
figures in the table are based on last year's fund last year would have been limited to
expenses. Actual expenses this year may be higher or 1.02% of the fund's average net assets. The
lower. The table includes costs paid by the fund and figures in the table are based on last year's
its share of master portfolio costs. expenses. Actual expenses this year may be
higher or lower. The table includes costs
paid by the fund and its share of master
portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 for the This example assumes that you invested $10,000
periods shown, that you earned a hypothetical 5% total for periods shown, that you earned a
return each year, and that the fund's expenses were those hypothetical 5% total return each year, and
in the table above. Your costs would be the same whether that the fund's expenses were those in the
you sold your shares or continued to hold them at the end table above. Your costs would be the same
of each period. Actual performance and expenses may be whether you sold your shares or continued to
higher or lower. hold them at the end of each period. Actual
performance and expenses may be higher or
lower.
</TABLE>
<TABLE>
<CAPTION>
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses $90 $281 $488 $1084 Expenses $100 $312 $542 $1,201
</TABLE>
- 53 -
<PAGE>
NEUBERGER BERMAN PARTNERS TRUST
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of average net Annual operating expenses (% of average net
assets)* assets)*
These are deducted from fund assets, so you These are deducted from fund assets, so you
pay them indirectly. pay them indirectly.
Management fees 0.85 Management fees 0.85
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES
0.10
Other expenses 0.06 Other expenses 0.06
--------- -------
Equals: Total annual operating expenses 0.91 EQUALS: TOTAL ANNUAL OPERATING EXPENSES 1.01
* Neuberger Berman Management reimburses certain * Neuberger Berman Management reimburses
expenses of the fund so that its total annual certain expenses of the fund so that its
operating expenses are not more than 0.10% above total annual operating expenses are not more
those of another Neuberger Berman fund that invests than 0.20% above those of another Neuberger
in the same portfolio of securities. This arrangement Berman fund that invests in the same
does not cover interest, taxes, brokerage portfolio of securities. This arrangement
commissions, and extraordinary expenses. Under this does not cover interest, taxes, brokerage
arrangement, which NB Management can terminate upon commissions, and extraordinary expenses.
60 days' notice to the fund, total annual operating Under this arrangement, which NB Management
expenses of the fund last year would have been can terminate upon 60 days' notice to the
limited to .92% of the fund's average net assets. The fund, total annual operating expenses of the
figures in the table are based on last year's fund last year would have been limited to
expenses. Actual expenses this year may be higher or 1.02% of the fund's average net assets. The
lower. The table includes costs paid by the fund and figures in the table are based on last year's
its share of master portfolio costs. expenses. Actual expenses this year may be
higher or lower. The table includes costs
paid by the fund and its share of master
portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 for the This example assumes that you invested $10,000
periods shown, that you earned a hypothetical 5% total for periods shown, that you earned a
return each year, and that the fund's expenses were those hypothetical 5% total return each year, and
in the table above. Your costs would be the same whether that the fund's expenses were those in the
you sold your shares or continued to hold them at the end table above. Your costs would be the same
of each period. Actual performance and expenses may be whether you sold your shares or continued to
higher or lower. hold them at the end of each period. Actual
performance and expenses may be higher or
lower.
</TABLE>
<TABLE>
<CAPTION>
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses $93 $290 $504 $1120 Expenses $103 $322 $558 $1236
</TABLE>
- 54 -
<PAGE>
REASONS FOR THE PROPOSAL. NBMI has recommended Proposal 5 to the Board of
Trustees in light of the expenses associated with providing shareholder
servicing and distribution services to the funds. NBMI believes that the
distribution and shareholder servicing fee proposed for the funds is appropriate
to defray a portion of the costs associated with shareholder servicing
activities and to support the marketing of the funds.
NBMI believes that the compensation practices that prevail among the
entities that make the funds available to investors justify adopting the
Distribution and Shareholder Services Plan. The funds rely exclusively on
third-party service providers such as pension plan administrators, fund
"supermarkets," banks and broker-dealers to make fund shares available to
investors. These third-party service providers generally hold shares in omnibus
accounts and provide shareholder services, including sub-accounting, shareholder
assistance, transaction processing and settlements, shareholder account
statement preparation and distribution, confirmation preparation and
distribution, payment of fund distributions, prospectus delivery, and
account-level tax reporting. Many of these third-party service providers have
asked the funds for additional fees to cover their increasing costs, including
those resulting from the increased use of sophisticated technology to support
shareholder servicing. As a result, the funds face increasing costs and must pay
these fees to maintain an effective servicing program that meets shareholders'
expectations for a high level of service and up-to-date technology.
NBMI believes that adopting the Distribution and Shareholder Services Plan
is a prudent alternative to raising the fees under the funds' existing
administration agreement. SEC rules prohibit a fund from paying for activities
"primarily intended to result in the sale of shares" except pursuant to a plan
adopted under the rules. While it is not clear that the services rendered by the
funds' third-party service providers fall within the legal definition of
activities "primarily intended to result in the sale of shares," recent SEC
pronouncements raise a question, at least in the case of payments to fund
supermarkets, whether a portion of the payments to the third-party service
providers may be characterized as payments for share distribution. If the Plan
is adopted, the fees paid would be available for distribution-related expenses
as well as shareholder servicing.
Many of the funds' competitors have distribution plans, which they use to
compensate third-party service providers for making fund shares available to
their clients and/or for providing services to investors. NBMI believes it will
be difficult to maintain a relationship with these third-party service providers
unless they are provided with additional compensation to offset the increased
costs of making the funds available to their clients and maintaining the
clients' assets in the funds. Certain third-party service providers that are
registered broker-dealers may use money provided under the Distribution and
Shareholder Services Plan to pay individual sales representatives.
NBMI believes that the fees under the Distribution and Shareholder Services
Plan will help the funds maintain an effective program to make their shares
available to investors, which is necessary for the funds to maintain a
sufficient size to spread their fixed costs over a substantial asset base.
- 55 -
<PAGE>
CONSIDERATION AND APPROVAL BY THE BOARD OF TRUSTEES. Before approving the
Distribution and Shareholder Services Plan, the funds' Trustees were provided
with detailed information relating to it. They considered carefully the factors
described above and consulted with independent counsel.
The Trustees of Equity Trust considered, among other factors: (a) the
circumstances that would make adoption of the Distribution and Shareholder
Services Plan appropriate and the causes of such circumstances; (b) the way in
which the Distribution and Shareholder Services Plan would address these
circumstances; and (c) the amounts of the expenses under the Distribution and
Shareholder Services Plan in relation to the overall cost structure of the
funds.
Taking the above factors into account, the Board of Trustees determined
that approval of the Distribution and Shareholder Services Plan was appropriate
for three principal reasons.
First, because the third-party service providers who require increased fees
are some of the funds' largest holders, the Trustees believe the funds must meet
the demand for higher fees to maintain the funds' viability. The Trustees
believe that maintenance of strong shareholder servicing and marketing efforts
are of critical importance in the highly competitive mutual fund industry. To
remain competitive, the funds need to meet the demands of changing technology
and of rising shareholder service expectations. In light of recent SEC
pronouncements, the Trustees believe that adopting the Distribution and
Shareholder Services Plan is a prudent way to secure resources for third-party
service provider needs, because the Plan would allow resources to be spent for
both distribution and shareholder servicing activities.
Second, the Board determined that the servicing and/or distribution fees
under the Distribution and Shareholder Services Plan would be attractive to fund
supermarkets and others that make the funds' shares available, resulting in
greater growth of the funds or maintenance of fund assets at higher levels than
might otherwise be the case. The Trustees recognized that if the funds
experience growth as a result of increased shareholder subscriptions (sales of
new shares), they will have greater access to cash for new purchases of
securities, thereby making the funds easier to manage and maintaining their
viability. The Trustees also recognized that an increase in each fund's asset
size may result in certain economies of scale. These economies of scale would be
shared by investors in the funds, both because fixed expenses would be spread
over a larger asset base and because the management fees that the funds pay
under their management contracts include breakpoints of declining percentages
based on greater asset size.
Third, the Trustees gave particular attention to the fact that to the
extent the increase is not offset by economies of scale, the net result of the
Distribution and Shareholder Services Plan will be to increase the operating
expenses of each fund and, therefore, its expense ratio. The Trustees weighed
this increase in expenses in their deliberations and determined that the
payments under the Plan are reasonable, because the amount of the fee is closely
tied to the actual or projected increases in the fees charged by many service
providers.
The Trustees also considered the extent to which the retention of assets
and additional sales of fund shares would be likely to increase the amount of
compensation paid by the funds to NBMI, because such fees are calculated as a
percentage of each fund's assets and thus will increase if net assets increase.
- 56 -
<PAGE>
The Trustees further recognized that there can be no assurance that any of the
potential benefits described above will be achieved if the Distribution and
Shareholder Services Plan is implemented.
Following their consideration, the Trustees, including all of the
Independent Trustees, concluded that the fees payable under the Distribution and
Shareholder Services Plan were reasonable in view of both the services to be
provided, directly or indirectly, by NBMI and others, and the anticipated
benefits of the Distribution and Shareholder Services Plan. The Trustees,
including all of the Independent Trustees, determined that implementing the
Distribution and Shareholder Services Plan would have a reasonable likelihood of
benefiting each fund and its shareholders and would be in the best interests of
each fund and its shareholders.
Accordingly, the Trustees, including all of the Independent Trustees, voted
to approve the Distribution and Shareholder Services Plan, as set forth above,
and to recommend that each fund's shareholders vote FOR the Proposal.
REQUIRED VOTE
Approval of Proposal 5 with respect to each fund requires the affirmative
vote of a "majority of the outstanding voting securities" of that fund, which
for this purpose means the affirmative vote of the lesser of (1) more than 50%
of the outstanding shares of the fund or (2) 67% or more of the shares of the
fund present at the Meeting if more than 50% of the outstanding shares of the
fund are represented at the Meeting in person or by proxy.
The Distribution and Shareholder Services Plan will become effective with
respect to a fund whose shareholders approve it as described above, even if
shareholders of the other funds do not approve the Plan.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THE DISTRIBUTION AND SHAREHOLDER
SERVICES PLAN IN PROPOSAL 5.
PROPOSAL 6. MODIFICATION OF FUNDAMENTAL RESTRICTION ON
INDUSTRY CONCENTRATION (SHAREHOLDERS OF CASH RESERVES ONLY)
The Board of Trustees of Income Funds is proposing a change to a
fundamental investment restriction of Neuberger Berman Cash Reserves. The
proposed change would require Cash Reserves normally to invest at least 25% of
its assets in the financial services group of industries. The law requires that
a change to any investment policy that a fund deems "fundamental" must be
approved by shareholders. Accordingly, the Board is asking you to consider this
change.
Cash Reserves' current policy prohibits the fund from "concentrating" (that
is, investing 25% or more of its assets) in securities of issuers having their
principal business activities in the same industry or group of industries. This
restriction does not apply to (1) securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; and (2) investments in CDs or
bankers' acceptances issued by domestic branches of U.S. banks. As mentioned
above, the proposed change would require Cash Reserves normally to invest at
- 57 -
<PAGE>
least 25% of its assets in the financial services group of industries.
Obligations of issuers in the financial services industries include, but are not
limited to, those of domestic and foreign banks, savings institutions, consumer
and industrial finance companies, issuers of asset-backed securities, securities
brokerage companies and a variety of firms in the insurance field. The
flexibility the fund previously had to concentrate or not concentrate in certain
obligations of domestic banks would be deleted as no longer necessary.
The Board believes changing this fundamental restriction would provide the
fund with greater flexibility for future contingencies. The fund's investment
manager believes that this change is desirable because an increasing number of
instruments suitable for investment by money market funds are either issued or
guaranteed by companies in the financial services industries. In addition, this
change would conform the industry concentration policy of Cash Reserves to that
of another money market fund in the Neuberger Berman fund family.
Because Cash Reserves, under the new policy, would normally concentrate
more than 25% of its total assets in the financial services industries, it will
have greater exposure to the risks associated with those industries, such as
adverse interest rate trends, increased credit defaults, potentially burdensome
government regulation, the availability and cost of capital funds, and a decline
in general economic conditions. Also, with financial services reform
legislation, there is likely to be consolidation among entities in these
industries, resulting in increased competitive pressures. The bank instruments
in which Cash Reserves invests typically are not covered by deposit insurance.
As amended by the language in bold, the limitation would read as follows:
INDUSTRY CONCENTRATION. The Fund may not purchase any security if, as
a result, 25% or more of its total assets (taken at current value)
would be invested in the securities of issuers having their principal
business activities in the same industry, EXCEPT THAT THE FUND
NORMALLY WILL INVEST MORE THAN 25% OF ITS TOTAL ASSETS IN THE
OBLIGATIONS OF ISSUERS HAVING THEIR PRINCIPAL BUSINESS ACTIVITIES IN
THE FINANCIAL SERVICES INDUSTRIES OR REPURCHASE AGREEMENTS ON SUCH
OBLIGATIONS. This limitation does not apply to purchases of securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.
REQUIRED VOTE
Approval of Proposal 6 requires the affirmative vote of a "majority of the
outstanding voting securities" of the fund, which for this purpose means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the fund or (2) 67% or more of the shares of the fund present at the Meeting if
more than 50% of the outstanding shares of the fund are represented at the
Meeting in person or by proxy.
If Proposal 4 for conversion to a multi-class system is not approved, but
Proposal 6 is approved, such approval would be deemed a change of policy for the
fund, plus authority for the fund to cast its vote in favor of an identical
change to policies of the master fund in which it invests.
- 58 -
<PAGE>
If the change contemplated by Proposal 6 is not approved by shareholders of
the fund, the existing fundamental restriction of the fund will continue in
effect.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THE MODIFICATION OF THE FUNDAMENTAL
RESTRICTION ON INDUSTRY CONCENTRATION IN PROPOSAL 6.
PROPOSAL 7. MODIFICATION OF FUNDAMENTAL RESTRICTIONS OF
NEUBERGER BERMAN GOVERNMENT MONEY FUND
(SHAREHOLDERS OF GOVERNMENT MONEY FUND ONLY)
The Board of Trustees of Income Funds has approved several changes to the
fundamental investment limitations of Neuberger Berman Government Money Fund.
The law requires that a change to any investment policy that a fund deems
"fundamental" must be approved by shareholders. Accordingly, the Board is asking
you to consider these changes.
The Board believes the proposed changes would provide the fund with greater
investment flexibility, while at the same time preserving the fund's objective
of maximum safety and liquidity with the highest available current income. The
Board believes that conforming the fund's fundamental restrictions to other
similar Neuberger Berman funds will enhance management's ability to manage the
fund's assets efficiently and effectively in changing regulatory and investment
environments.
A. MODIFYING THE FUNDAMENTAL RESTRICTION LIMITING GOVERNMENT MONEY FUND TO
SECURITIES BACKED BY THE FULL FAITH AND CREDIT OF THE U.S. GOVERNMENT
As a fundamental policy, Government Money Fund currently may not invest in
any security that is not backed by the full faith and credit of the U.S.
Government. The proposed change to this policy would allow the fund to invest in
all securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities.
U.S. Government agencies and instrumentalities issue many securities that
are not backed by the full faith and credit of the U.S. Government, but are
backed by the issuing agency or instrumentality. Some of these are backed by the
right of the issuing entity to borrow from the U.S. Treasury, others by the
discretionary authority of the Treasury to loan money, and still others only by
the creditworthiness of the issuing entity.
Investment in this broader array of U.S. Government securities offers the
potential for greater income, but carries with it a greater degree of risk. The
market prices of U.S. Government securities are not guaranteed by the government
and generally fluctuate inversely with changing interest rates. However, the
investment manager believes that, as the federal debt continues to shrink, the
fund should have greater flexibility to access this broader array of government
securities. The investment manager will continue to evaluate each security
- 59 -
<PAGE>
purchased for the fund and, in accordance with SEC rules governing money market
funds, must determine that it presents a minimal credit risk to the fund.
B. REMOVING THE FUNDAMENTAL PROHIBITION ON REPURCHASE AGREEMENTS
As a fundamental policy, Government Money Fund may not invest in repurchase
agreements. The proposed change would allow the fund to invest in repurchase
agreements collateralized by the same types of securities in which it can invest
(although the securities used as collateral may have a longer maturity than the
securities in which the fund normally invests).
The proposed change would allow the fund to use repurchase agreements in an
effort to earn more income. In a repurchase agreement, the fund would purchase
securities from a bank that is a member of the Federal Reserve System or from a
securities dealer that agrees to repurchase the securities from the fund at a
higher price on a designated future date, usually less than a week from the
purchase date. The difference between the purchase and sale prices is keyed to
current interest rates, and repurchase agreements are treated under the
securities laws as a form of lending. These agreements allow a fund to make
profitable use of cash amounts that are either too small to invest otherwise or
have come into the fund too late in the day to invest directly in government
securities, or to get the latest (and therefore highest) rates when rates are
rising.
While costs, delays, or losses could result if the selling party to a
repurchase agreement becomes bankrupt or otherwise defaults, repurchase
agreements are generally considered to be a very secure form of lending. When a
repurchase agreement is properly collateralized by government securities, the
SEC permits money market funds, such as the Government Money Fund, to treat them
as investments in government securities, rather than as investments in the bank
or broker-dealer that is acting as counter-party.
C. MODIFYING THE BORROWING POLICY TO PERMIT REVERSE REPURCHASE AGREEMENTS
Currently, the fundamental borrowing policy of the Government Money Fund
permits borrowing only from banks and only for temporary or emergency purposes.
The proposed change would amend this policy to read as follows:
The Fund may not borrow money, except that the Fund may (i) borrow
money from banks for temporary or emergency purposes and not for
leveraging or investment, AND (II) ENTER INTO REVERSE REPURCHASE
AGREEMENTS FOR ANY purpose; provided that (i) and (ii) in combination
do not exceed 33-1/3% of the value of its total assets (including the
amount borrowed) less liabilities (other than borrowings). IN ADDITION
TO THE FOREGOING, THE FUND MAY BORROW FROM ANY PERSON FOR TEMPORARY
PURPOSES IN AN AMOUNT NOT EXCEEDING 5% OF THE FUND'S TOTAL ASSETS AT
THE TIME THE LOAN IS MADE.
The principal purpose of the proposed change is to permit the fund to use
reverse repurchase agreements. Reverse repurchase agreements are a form of
borrowing very common among institutional investors such as mutual funds. In a
reverse repurchase agreement, the fund would sell portfolio securities subject
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to an agreement to repurchase the securities at a later date and for a fixed
price. The difference between the purchase and sale prices generally reflects a
market rate of interest.
The investment manager for Government Money Fund may want to use reverse
repurchase agreements to borrow money for investment purposes, as a means of
earning additional income. Reverse repurchase agreements may be viewed as a form
of leverage. Leverage creates an opportunity for increased total return but, at
the same time, carries certain risks. For example, leverage will tend to amplify
changes in the fund's net asset value. In addition, leverage from borrowing
creates interest expenses for the fund. To the extent the income derived from
securities purchased with borrowed funds exceeds the interest the fund will have
to pay, the fund's total return will be greater than it would be if leverage
were not used. Conversely, if the income from the assets obtained with borrowed
funds is not sufficient to cover the cost of leveraging, the net income of the
fund will be less than it would be if leverage were not used, and therefore the
amount available for distribution to the fund's shareholders as dividends will
be reduced. There is also a risk that the counter-party to a reverse repurchase
agreement will be unable or unwilling to complete the transaction as scheduled,
which may result in losses to the fund.
As a non-fundamental policy, the fund will not enter into reverse
repurchase agreements if securities lending transactions and reverse repurchase
agreements would exceed, in the aggregate, 33-1/3% of its total assets.
Additionally, it is the investment manager's current intention not to use the
proceeds of reverse repurchase agreements to invest in any securities with
maturities beyond the end of the term of the reverse repurchase agreement. This
practice is a way of limiting the risk of leverage.
D. MODIFYING THE FUNDAMENTAL RESTRICTION TO PERMIT SECURITIES LENDING
Currently, the fund is prohibited from making loans of its portfolio
securities. The proposed change would amend the existing fundamental restriction
on lending to read as follows:
LENDING. The Fund may not lend any security or make any other loan if,
as a result, more than 33-1/3% of its total assets (taken at current
value) would be lent to other parties, provided, however, that in
accordance with its investment objective, policies, and limitations,
the Fund can (i) purchase debt securities and (ii) engage in
repurchase agreements.
The proposed change would provide the fund with another means of earning
income through the lending of its portfolio securities. In recent years, this
practice has become more widespread among mutual funds, including money market
funds.
Any loan of portfolio securities would be subject to certain special
limitations and requirements established by the SEC staff to minimize the risk
to registered investment companies. These special requirements provide that
borrowers must continuously secure their obligations to return securities on
loan from the fund by depositing collateral in a form determined by the fund's
Trustees to be satisfactory. The collateral, which must be marked to market
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daily, must be equal to at least 100% of the market value of the loaned
securities, which will also be marked to market daily. As a non-fundamental
policy, the fund will not lend securities if securities lending transactions and
reverse repurchase agreements would exceed, in the aggregate, 33-1/3% of its
total assets. There is a risk that a borrower will be unable or unwilling to
return borrowed securities when asked, which could result in delays and losses
to the fund.
REQUIRED VOTE
SHAREHOLDERS OF NEUBERGER BERMAN GOVERNMENT MONEY FUND MUST VOTE ON EACH OF
THE CHANGES DESCRIBED IN ITEMS A-D OF PROPOSAL 7. Approval of each of the
changes contemplated by Proposal 7 requires the affirmative vote of a "majority
of the outstanding voting securities" of the fund, which for this purpose means
the affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of the fund or (2) 67% or more of the shares of the fund present at the
Meeting if more than 50% of the outstanding shares of the fund are represented
at the Meeting in person or by proxy.
If Proposal 4 for conversion to a multi-class system is not approved, but
Proposal 7 regarding fundamental restrictions and policies is approved, such
approval would be deemed a change of policy for the fund, plus authority for
that fund to cast its vote in favor of an identical change to policies of the
master fund in which it invests.
IF SHAREHOLDERS DO NOT APPROVE ONE OR MORE OF THE CHANGES DESCRIBED IN
ITEMS A - D OF PROPOSAL 7, THEN THE FUND'S EXISTING POLICY WILL REMAIN IN EFFECT
AS TO THAT PARTICULAR ITEM. EACH SEPARATE CHANGE DESCRIBED IN ITEMS A -D THAT IS
APPROVED BY SHAREHOLDERS WILL BECOME EFFECTIVE WITH RESPECT TO THE FUND, EVEN IF
OTHER CHANGES ARE NOT APPROVED.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT YOU APPROVE ITEMS A - D OF PROPOSAL 7.
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OTHER INFORMATION
INFORMATION ABOUT NBMI. NBMI, located at 605 Third Avenue, New York, New
York 10158, serves as the funds' principal underwriter and administrator and as
investment manager to the master funds. NBMI manages the master funds in
conjunction with Neuberger Berman, LLC, as sub-adviser. Together, the firms
manage more than $54.4 billion in total assets (as of June 30, 2000) and
continue an asset management history that began in 1939.
OTHER MATTERS TO COME BEFORE THE MEETING. The Trustees do not intend to
present any other business at the Meeting, nor are they aware that any
shareholder intends to do so. If, however, any other matters are properly
brought before the Meeting, the persons named in the accompanying proxy card(s)
will vote on those matters in accordance with their judgment.
SHAREHOLDER PROPOSALS. The Trusts do not hold annual shareholder meetings.
Shareholders wishing to submit proposals for consideration for inclusion in a
proxy statement for a subsequent shareholder meeting should send their written
proposals to the Trust at 605 Third Avenue, New York, New York 10158, such that
they will be received by the Trust a reasonable period of time prior to any such
meeting.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES.
Please advise the Trusts at 605 Third Avenue, New York, New York 10158, whether
other persons are beneficial owners of fund shares for which proxies are being
solicited and, if so, the number of copies of this proxy statement needed to
supply copies to the beneficial owners of the respective shares.
By Order of the Board of Trustees
--------------------------------------
Claudia A. Brandon
Secretary
Neuberger Berman Equity Funds
Neuberger Berman Equity Trust
Neuberger Berman Equity Assets
Neuberger Berman Equity Series
Neuberger Berman Income Funds
Neuberger Berman Income Trust
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APPENDIX A
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION ("Agreement") is
made as of ________, 2000, between Neuberger Berman Equity Funds ("Equity
Funds"), on behalf of each segregated portfolio of assets ("series") thereof
listed on Schedule A to this Agreement ("Schedule A") (each, an "Acquiring
Fund"), and Neuberger Berman Equity Trust ("Equity Trust"), on behalf of each
series thereof listed on Schedule A (each, a "Target"). (Each Acquiring Fund and
Target is sometimes referred to herein individually as a "Fund" and collectively
as the "Funds"; and Equity Funds and Equity Trust are sometimes referred to
herein individually as an "Investment Company" and collectively as the
"Investment Companies.") All agreements, representations, actions, and
obligations described herein made or to be taken or undertaken by a Fund are
made and shall be taken or undertaken by Equity Funds on behalf of each
Acquiring Fund and by Equity Trust on behalf of each Target.
The Investment Companies, each of which is a Delaware business trust, wish
to effect eleven separate reorganizations, each described in section 368(a)(1)
of the Internal Revenue Code of 1986, as amended ("Code"), and intend this
Agreement to be, and adopt it as, a "plan of reorganization" within the meaning
of the regulations under section 368 of the Code ("Regulations"). Each
reorganization will involve the transfer of a Target's assets to the Acquiring
Fund listed on Schedule A opposite its name (each, a "corresponding Acquiring
Fund") in exchange solely for voting shares of beneficial interest in that
Acquiring Fund and that Acquiring Fund's assumption of that Target's
liabilities, followed by the constructive distribution of those shares PRO RATA
to the holders of shares of beneficial interest in that Target in exchange
therefor, all on the terms and conditions set forth herein. (All such
transactions involving each Target and its corresponding Acquiring Fund are
referred to herein as a "Reorganization.") For convenience, the balance of this
Agreement will refer only to a single Reorganization, one Target, and one
Acquiring Fund, but the terms and conditions hereof shall apply separately to
each Reorganization. The consummation of one Reorganization shall not be
contingent on the consummation of any other Reorganization.
Each Target has a single class of shares ("Target Shares"). Acquiring
Fund's shares are divided into multiple classes, including Trust Class shares.
Only Acquiring Fund's Trust Class shares ("Acquiring Fund Shares"), which are
substantially similar to the Target Shares, are involved in the Reorganization.
In consideration of the mutual promises contained herein, the parties agree
as follows:
1. PLAN OF REORGANIZATION AND TERMINATION
--------------------------------------
1.1. Target agrees to assign, sell, convey, transfer, and deliver all of
its assets described in paragraph 1.2 ("Assets") to Acquiring Fund. Acquiring
Fund agrees in exchange therefor --
(a) to issue and deliver to Target the number of full and fractional
(rounded to the third decimal place) Acquiring Fund Shares determined by
dividing the net value of Target (computed as set forth in paragraph
2.1) by the net asset value ("NAV") of an Acquiring Fund Share (computed
as set forth in paragraph 2.2), and
(b) to assume all of Target's liabilities described in paragraph 1.3
("Liabilities"). These transactions shall take place at the Closing (as
defined in paragraph 3.1).
<PAGE>
1.2. The Assets shall include all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights of
action, rights to register shares under applicable securities laws, books and
records, deferred and prepaid expenses shown as assets on Target's books, and
other property owned by Target at the Effective Time (as defined in paragraph
3.1).
1.3. The Liabilities shall include all of Target's liabilities, debts,
obligations, and duties of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether or not arising in the ordinary course of
business, whether or not determinable at the Effective Time, and whether or not
specifically referred to in this Agreement. Notwithstanding the foregoing,
Target agrees to use its best efforts to discharge all its known Liabilities
before the Effective Time.
1.4. At or immediately before the Effective Time, Target shall declare and
pay to its shareholders a dividend and/or other distribution in an amount large
enough so that it will have distributed substantially all (and in any event not
less than 90%) of its investment company taxable income (computed without regard
to any deduction for dividends paid) and substantially all of its realized net
capital gain, if any, for the current taxable year through the Effective Time.
1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target shall distribute the Acquiring Fund Shares received by it
pursuant to paragraph 1.1 to Target's shareholders of record, determined as of
the Effective Time (each a "Shareholder" and collectively "Shareholders"), in
constructive exchange for their Target Shares. That distribution shall be
accomplished by Equity Fund's transfer agent's opening accounts on Acquiring
Fund's share transfer books in the Shareholders' names and transferring those
Acquiring Fund Shares thereto. Each Shareholder's account shall be credited with
the respective PRO RATA number of full and fractional (rounded to the third
decimal place) Acquiring Fund Shares due that Shareholder. All outstanding
Target Shares , including any represented by certificates, shall simultaneously
be canceled on Target's share transfer books. Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares issued in connection with
the Reorganization.
1.6. As soon as reasonably practicable after distribution of the Acquiring
Fund Shares pursuant to paragraph 1.5, but in all events within six months after
the Effective Time, Target shall be terminated as a series of Equity Trust and
any further actions shall be taken in connection therewith as required by
applicable law.
1.7. Any reporting responsibility of Target to a public authority is and
shall remain its responsibility up to and including the date on which it is
terminated.
1.8. Any transfer taxes payable on issuance of Acquiring Fund Shares in a
name other than that of the registered holder on Target's books of the Target
Shares constructively exchanged therefor shall be paid by the person to whom
those Acquiring Fund Shares are to be issued, as a condition of that transfer.
2. VALUATION
---------
2.1. For purposes of paragraph 1.1(a), Target's net value shall be (a) the
value of the Assets computed as of the close of regular trading on the New York
Stock Exchange ("NYSE") on the date of the Closing ("Valuation Time"), using the
valuation procedures set forth in its then-current prospectus and statement of
additional information ("SAI"), less (b) the amount of the Liabilities as of the
Valuation Time.
2.2. For purposes of paragraph 1.1(a), the NAV of an Acquiring Fund Share
shall be computed as of the Valuation Time, using the valuation procedures set
forth in Acquiring Fund's then-current prospectus and SAI.
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<PAGE>
2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be made by
or under the direction of Neuberger Berman Management Inc.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts necessary to consummate
the same ("Closing"), shall occur at the Investment Companies' principal office
on or about [____ _], 2000, or at such other place and/or on such other date as
to which the Investment Companies may agree. All acts taking place at the
Closing shall be deemed to take place simultaneously as of the close of business
on the date thereof or at such other time as to which the Investment Companies
may agree ("Effective Time"). If, immediately before the Valuation Time, (a) the
NYSE is closed to trading or trading thereon is restricted or (b) trading or the
reporting of trading on the NYSE or elsewhere is disrupted, so that accurate
appraisal of Target's net value and/or the NAV of an Acquiring Fund Share is
impracticable, the Effective Time shall be postponed until the first business
day after the day when that trading shall have been fully resumed and that
reporting shall have been restored.
3.2. Equity Trust's fund accounting and pricing agent shall deliver at the
Closing a certificate of an authorized officer verifying that the information
(including adjusted basis and holding period, by lot) concerning the Assets,
including all portfolio securities, transferred by Target to Acquiring Fund, as
reflected on Acquiring Fund's books immediately after the Closing, does or will
conform to that information on Target's books immediately before the Closing.
Equity Trust's custodian shall deliver at the Closing a certificate of an
authorized officer stating that (a) the Assets it holds will be transferred to
Acquiring Fund at the Effective Time and (b) all necessary taxes in conjunction
with the delivery of the Assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment has been
made.
3.3. Equity Trust shall deliver to Equity Funds at the Closing a list of
the names and addresses of the Shareholders and the number of outstanding Target
Shares owned by each Shareholder, all as of the Effective Time, certified by
Equity Trust's Secretary or an Assistant Secretary thereof. Equity Fund's
transfer agent shall deliver at the Closing a certificate as to the opening on
Acquiring Fund's share transfer books of accounts in the Shareholders' names.
Equity Funds shall issue and deliver a confirmation to Equity Trust evidencing
the Acquiring Fund Shares to be credited to Target at the Effective Time or
provide evidence satisfactory to Equity Trust that those Acquiring Fund Shares
have been credited to Target's account on Acquiring Fund's books.
3.4. Each Investment Company shall deliver to the other at the Closing (a)
a certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement and (b) bills of sale, checks,
assignments, stock certificates, receipts, and other documents the other
Investment Company or its counsel reasonably requests.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
4.1. Equity Trust represents and warrants as follows:
4.1.1. Equity Trust is a business trust duly organized and validly
existing under the laws of the State of Delaware, and its Certificate
of Trust has been duly filed in the office of the Secretary of State
thereof;
4.1.2. Equity Trust is duly registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
("1940 Act"), and that registration will be in full force and effect at
the Effective Time;
4.1.3. Target is a duly established and designated series of
Equity Trust;
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4.1.4. At the Closing, Target will have good and marketable title
to the Assets and full right, power, and authority to sell, assign,
transfer, and deliver the Assets free of any liens or other
encumbrances; and on delivery and payment for the Assets, Acquiring
Fund will acquire good and marketable title thereto;
4.1.5. Target's current prospectus and SAI conform in all material
respects to the applicable requirements of the Securities Act of 1933,
as amended ("1933 Act"), and the 1940 Act and the rules and regulations
thereunder and do not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
4.1.6. Target is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Delaware law or
any provision of the Amended and Restated Trust Instrument ("Trust
Instrument") or By-Laws of Equity Trust or of any agreement,
instrument, lease, or other undertaking to which Target is a party or
by which it is bound or result in the acceleration of any obligation,
or the imposition of any penalty, under any agreement, judgment, or
decree to which Target is a party or by which it is bound, except as
previously disclosed in writing to and accepted by Equity Funds;
4.1.7. Except as otherwise disclosed in writing to and accepted by
Equity Funds, all material contracts and other commitments of or
applicable to Target (other than this Agreement and investment
contracts, including options, futures, and forward contracts) will be
terminated, or provision for discharge of any liabilities of Target
thereunder will be made, at or prior to the Effective Time, without
either Fund's incurring any liability or penalty with respect thereto
and without diminishing or releasing any rights Target may have had
with respect to actions taken or omitted or to be taken by any other
party thereto prior to the Closing;
4.1.8. Except as otherwise disclosed in writing to and accepted by
Equity Funds, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Equity Trust's knowledge) threatened against Equity
Trust with respect to Target or any of its properties or assets that,
if adversely determined, would materially and adversely affect Target's
financial condition or the conduct of its business; and Equity Trust
knows of no facts that might form the basis for the institution of any
such litigation, proceeding, or investigation and is not a party to or
subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially or adversely affects its
business or its ability to consummate the transactions contemplated
hereby;
4.1.9. The execution, delivery, and performance of this Agreement
have been duly authorized as of the date hereof by all necessary action
on the part of Equity Trust's board of trustees, which has made the
determinations required by Rule 17a-8(a) under the 1940 Act; and,
subject to approval by Target's shareholders, this Agreement
constitutes a valid and legally binding obligation of Target,
enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights
and by general principles of equity;
4.1.10. At the Effective Time, the performance of this Agreement
shall have been duly authorized by all necessary action by Target's
shareholders;
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<PAGE>
4.1.11. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act of
1934, as amended ("1934 Act"), or the 1940 Act for the execution or
performance of this Agreement by Equity Trust, except for (a) the
filing with the Securities and Exchange Commission ("SEC") of a
registration statement by Equity Funds on Form N-14 relating to the
Acquiring Fund Shares issuable hereunder, and any supplement or
amendment thereto ("Registration Statement"), including therein a
prospectus/proxy statement ("Proxy Statement"), and (b) such consents,
approvals, authorizations, and filings as have been made or received or
as may be required subsequent to the Effective Time;
4.1.12. On the effective date of the Registration Statement, at
the time of the shareholders' meeting referred to in paragraph 5.2, and
at the Effective Time, the Proxy Statement will (a) comply in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, and the 1940 Act and the rules and regulations thereunder and
(b) not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided that the foregoing shall not
apply to statements in or omissions from the Proxy Statement made in
reliance on and in conformity with information furnished by Equity
Funds for use therein;
4.1.13. The Liabilities were incurred by Target in the ordinary
course of its business and are associated with the Assets; and there
are no Liabilities other than liabilities disclosed or provided for in
Equity Trust's financial statements referred to in paragraph 4.1.18 and
liabilities incurred by Target in the ordinary course of its business
subsequent to [_______ __, 2000], or otherwise previously disclosed to
Equity Funds, none of which has been materially adverse to the
business, assets, or results of Target's operations;
4.1.14. Target is a "fund" as defined in section 851(g)(2) of the
Code; it qualified for treatment as a regulated investment company
under Subchapter M of the Code ("RIC") for each past taxable year since
it commenced operations and will continue to meet all the requirements
for that qualification for its current taxable year; the Assets will be
invested at all times through the Effective Time in a manner that
ensures compliance with the foregoing; and Target has no earnings and
profits accumulated in any taxable year in which the provisions of
Subchapter M did not apply to it;
4.1.15. Target is not under the jurisdiction of a court in a
"title 11 or similar case" (within the meaning of section 368(a)(3)(A)
of the Code);
4.1.16. During the five-year period ending on the Closing Date,
neither Target nor any person "related" (as defined in section
1.368-1(e)(3) of the Regulations without regard to section
1.368-1(e)(3)(i)(A) thereof) to Target will have directly or through
any transaction, agreement, or arrangement with any other person, (a)
acquired Target Shares with consideration other than Acquiring Fund
Shares or Target Shares, except for shares redeemed in the ordinary
course of Target's business as a series of an open-end investment
company as required by the 1940 Act, or (b) made distributions with
respect to Target Shares, except for (i) dividends qualifying for the
deduction for dividends paid (as defined in section 561 of the Code)
referred to in sections 852(a)(1) and 4982(c)(1)(A) of the Code and
(ii) additional distributions, to the extent they do not exceed 50% of
the value (without giving effect to those distributions) of the
proprietary interest in Target on the Closing Date;
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4.1.17. Target's federal income tax returns, and all applicable
state and local tax returns, for all taxable years through and
including the taxable year ended [_____ __, ____], have been timely
filed and all taxes payable pursuant to those returns have been timely
paid; and
4.1.18. Equity Trust's financial statements for the year ended
[_____ __, ____], [AND FOR THE SIX MONTHS ENDED _____ __, 2000,] to be
delivered to Equity Funds, fairly represent Target's financial position
as of that [EACH SUCH] date and the results of its operations and
changes in its net assets for the year [PERIOD] then ended.
4.2. Equity Funds represents and warrants as follows:
4.2.1. Equity Funds is a business trust duly organized and validly
existing under the laws of the State of Delaware, and its Certificate
of Trust has been duly filed in the office of the Secretary of State
thereof;
4.2.2. Equity Funds is duly registered as an open-end management
investment company under the 1940 Act, and that registration will be in
full force and effect at the Effective Time;
4.2.3. Acquiring Fund is a duly established and designated series
of Equity Funds;
4.2.4. No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in
exchange for the Assets in the Reorganization;
4.2.5. The Acquiring Fund Shares to be issued and delivered to
Target hereunder will, at the Effective Time, have been duly authorized
and, when issued and delivered as provided herein, will be duly and
validly issued and outstanding shares of Acquiring Fund, fully paid and
non-assessable;
4.2.6. Acquiring Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the 1933 Act and
the 1940 Act and the rules and regulations thereunder and do not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
4.2.7. Acquiring Fund is not in violation of, and the execution
and delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Delaware law or
any provision of the Trust Instrument or By-Laws of Equity Funds or of
any provision of any agreement, instrument, lease, or other undertaking
to which Acquiring Fund is a party or by which it is bound or result in
the acceleration of any obligation, or the imposition of any penalty,
under any agreement, judgment, or decree to which Acquiring Fund is a
party or by which it is bound, except as previously disclosed in
writing to and accepted by Equity Trust;
4.2.8. Except as otherwise disclosed in writing to and accepted by
Equity Trust, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Equity Fund's knowledge) threatened against Equity Funds
with respect to Acquiring Fund or any of its properties or assets that,
if adversely determined, would materially and adversely affect
Acquiring Fund's financial condition or the conduct of its business;
and Equity Funds knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and is
not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially or adversely
affects its business or its ability to consummate the transactions
contemplated hereby;
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<PAGE>
4.2.9. The execution, delivery, and performance of this Agreement
have been duly authorized as of the date hereof by all necessary action
on the part of Equity Fund's board of trustees (together with Equity
Trust's board of trustees, the "Boards"), which has made the
determinations required by Rule 17a-8(a) under the 1940 Act; and this
Agreement constitutes a valid and legally binding obligation of
Acquiring Fund, enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;
4.2.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the 1934 Act, or the 1940 Act
for the execution or performance of this Agreement by Equity Funds,
except for (a) the filing with the SEC of the Registration Statement
and (b) such consents, approvals, authorizations, and filings as have
been made or received or as may be required subsequent to the Effective
Time;
4.2.11. On the effective date of the Registration Statement, at
the time of the shareholders' meeting referred to in paragraph 5.2, and
at the Effective Time, the Proxy Statement will (a) comply in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, and the 1940 Act and the rules and regulations thereunder and
(b) not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided that the foregoing shall not
apply to statements in or omissions from the Proxy Statement made in
reliance on and in conformity with information furnished by Equity
Trust for use therein;
4.2.12. Acquiring Fund is a "fund" as defined in section 851(g)(2)
of the Code; it qualified for treatment as a RIC for each past taxable
year since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; it
intends to continue to meet all such requirements for the next taxable
year; and it has no earnings and profits accumulated in any taxable
year in which the provisions of Subchapter M of the Code did not apply
to it;
4.2.13. Acquiring Fund has no plan or intention to issue
additional Acquiring Fund Shares following the Reorganization except
for shares issued in the ordinary course of its business as a series of
an open-end investment company; nor does Acquiring Fund, or any person
"related" (within the meaning of section 1.368-1(e)(3) of the
Regulations) to Acquiring Fund, have any plan or intention to redeem or
otherwise reacquire any Acquiring Fund Shares issued to the
Shareholders pursuant to the Reorganization, except to the extent it is
required by the 1940 Act to redeem any of its shares presented for
redemption at NAV in the ordinary course of that business;
4.2.14. Following the Reorganization, Acquiring Fund (a) will
continue Target's "historic business" (within the meaning of section
1.368-1(d)(2) of the Regulations), (b) will use a significant portion
of Target's "historic business assets" (within the meaning of section
1.368-1(d)(3) of the Regulations) in a business; in addition, Acquiring
Fund has no plan or intention to sell or otherwise dispose of any of
the Assets, except for dispositions made in the ordinary course of that
business and dispositions necessary to maintain its status as a RIC;
4.2.15. There is no plan or intention for Acquiring Fund to be
dissolved or merged into another business trust or a corporation or any
"fund" thereof (within the meaning of section 851(g)(2) of the Code)
following the Reorganization;
- 7 -
<PAGE>
4.2.16. Acquiring Fund does not directly or indirectly own, nor at
the Effective Time will it directly or indirectly own, nor has it
directly or indirectly owned at any time during the past five years,
any shares of Target;
4.2.17. Acquiring Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years through
and including the taxable year ended [_____ __, ____], have been timely
filed and all taxes payable pursuant to such returns have been timely
paid; and
4.2.18. Equity Fund's financial statements for the year ended
[_____ __, ____], [AND FOR THE SIX MONTHS ENDED _____ __, 2000,] to be
delivered to Equity Trust, fairly represent Acquiring Fund's financial
position as of that [EACH SUCH] date and the results of its operations
and changes in its net assets for the year [PERIOD] then ended.
4.3. Each Investment Company represents and warrants as follows:
4.3.1. The fair market value of the Acquiring Fund Shares received
by each Shareholder will be approximately equal to the fair market
value of its Target Shares constructively surrendered in exchange
therefor; 4.3.2. Its management (a) is unaware of any plan or intention
of Shareholders to redeem, sell, or otherwise dispose of (i) any
portion of their Target Shares before the Reorganization to any person
"related" (within the meaning of section 1.368-1(e)(3) of the
Regulations) to either Fund or (ii) any portion of the Acquiring Fund
Shares to be received by them in the Reorganization to any person
"related" (within such meaning) to Acquiring Fund, (b) does not
anticipate dispositions of those Acquiring Fund Shares at the time of
or soon after the Reorganization to exceed the usual rate and frequency
of dispositions of shares of Target as a series of an open-end
investment company, (c) expects that the percentage of Shareholder
interests, if any, that will be disposed of as a result of or at the
time of the Reorganization will be DE MINIMIS, and (d) does not
anticipate that there will be extraordinary redemptions of Acquiring
Fund Shares immediately following the Reorganization;
4.3.3. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
4.3.4. The fair market value of the Assets on a going concern
basis will equal or exceed the Liabilities to be assumed by Acquiring
Fund and those to which the Assets are subject;
4.3.5. There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount;
4.3.6. Pursuant to the Reorganization, Target will transfer to
Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the
fair market value of the net assets, and at least 70% of the fair
market value of the gross assets, Target held immediately before the
Reorganization. For the purposes of this representation, any amounts
Target used to pay its Reorganization expenses and to make redemptions
and distributions immediately before the Reorganization (except (a)
redemptions in the ordinary course of its business required by section
22(e) of the 1940 Act and (b) regular, normal dividend distributions
made to conform to its policy of distributing all or substantially all
of its income and gains to avoid the obligation to pay federal income
tax and/or the excise tax under section 4982 of the Code) after the
date of this Agreement will be included as assets held thereby
immediately before the Reorganization;
- 8 -
<PAGE>
4.3.7. None of the compensation received by any Shareholder who is
an employee of or service provider to Target will be separate
consideration for, or allocable to, any of the Target Shares held by
that Shareholder; none of the Acquiring Fund Shares received by any
such Shareholder will be separate consideration for, or allocable to,
any employment agreement, investment advisory agreement, or other
service agreement; and the consideration paid to any such Shareholder
will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's-length for similar
services;
4.3.8. Immediately after the Reorganization, the Shareholders will
not own shares constituting "control" (within the meaning of section
304(c) of the Code) of Acquiring Fund; and
4.3.9. Neither Fund will be reimbursed for any expenses incurred
by it or on its behalf in connection with the Reorganization unless
those expenses are solely and directly related to the Reorganization
(determined in accordance with the guidelines set forth in Rev. Rul.
73-54, 1973-1 C.B. 187).
5. COVENANTS
5.1. Each Fund covenants to operate its respective business in the
ordinary course between the date hereof and the Closing, it being understood
that --
(a) such ordinary course will include declaring and paying customary
dividends and other distributions and changes in operations
contemplated by each Fund's normal business activities, and
(b) each Fund will retain exclusive control of its investments until
the Closing; provided that Target shall not dispose of more than an
insignificant portion of its historic business assets (as defined
above) during that period without Acquiring Fund's prior consent.
5.2. Target covenants to call a shareholders' meeting to consider and act
on this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby.
5.3. Target covenants that the Acquiring Fund Shares to be delivered
hereunder are not being acquired for the purpose of making any distribution
thereof, other than in accordance with the terms hereof.
5.4. Target covenants that it will assist Equity Funds in obtaining
information Equity Funds reasonably requests concerning the beneficial ownership
of Target Shares.
5.5. Target covenants that its books and records (including all books and
records required to be maintained under the 1940 Act and the rules and
regulations thereunder) will be turned over to Equity Funds at the Closing.
5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in
compliance with applicable federal and state securities laws.
5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be executed and
delivered all assignments and other instruments, and will take or cause to be
taken further action, the other Fund may deem necessary or desirable to vest in,
and confirm to, (a) Acquiring Fund, title to and possession of all the Assets,
and (b) Target, title to and possession of the Acquiring Fund Shares to be
delivered hereunder, and otherwise to carry out the intent and purpose hereof.
5.8. Acquiring Fund covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and state
securities laws it deems appropriate to continue its operations after the
Effective Time.
- 9 -
<PAGE>
5.9. Subject to this Agreement, each Fund covenants to take or cause to be
taken all actions, and to do or cause to be done all things, reasonably
necessary, proper, or advisable to consummate and effectuate the transactions
contemplated hereby.
6. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall be subject to (a) the other Fund's
performance of all its obligations to be performed hereunder at or before the
Effective Time, (b) all representations and warranties of the other Fund
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made at
and as of the Effective Time, and (c) the following further conditions that, at
or before the Effective Time:
6.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by each Board and shall have been approved by
Target's shareholders in accordance with Equity Trust's Trust Instrument and
By-Laws and applicable law.
6.2. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued an unfavorable
report with respect to the Reorganization under section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940 Act. All
consents, orders, and permits of federal, state, and local regulatory
authorities (including the SEC and state securities authorities) deemed
necessary by either Investment Company to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain same would not involve a risk of a material
adverse effect on either Fund's assets or properties, provided that either
Investment Company may for itself waive any of such conditions.
6.3. At the Effective Time, no action, suit, or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection with,
the transactions contemplated hereby.
6.4. Equity Trust shall have received an opinion of Kirkpatrick & Lockhart
LLP ("Counsel") substantially to the effect that:
6.4.1. Acquiring Fund is a duly established series of Equity
Funds, a business trust duly organized and validly existing under the
laws of the State of Delaware with power under its Trust Instrument to
own all its properties and assets and, to the knowledge of Counsel, to
carry on its business as presently conducted;
6.4.2. This Agreement (a) has been duly authorized, executed, and
delivered by Equity Funds on behalf of Acquiring Fund and (b) assuming
due authorization, execution, and delivery of this Agreement by Equity
Trust on behalf of Target, is a valid and legally binding obligation of
Equity Funds with respect to Acquiring Fund, enforceable in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium, and
similar laws relating to or affecting creditors' rights and by general
principles of equity;
6.4.3. The Acquiring Fund Shares to be issued and distributed to
the Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement, will be duly authorized, validly issued
and outstanding, and fully paid and non-assessable;
- 10 -
<PAGE>
6.4.4. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not,
materially violate Equity Fund's Trust Instrument or By-Laws or any
provision of any agreement (known to Counsel, without any independent
inquiry or investigation) to which Equity Funds (with respect to
Acquiring Fund) is a party or by which it is bound or (to the knowledge
of Counsel, without any independent inquiry or investigation) result in
the acceleration of any obligation, or the imposition of any penalty,
under any agreement, judgment, or decree to which Equity Funds (with
respect to Acquiring Fund) is a party or by which it is bound, except
as set forth in that opinion or as previously disclosed in writing to
and accepted by Equity Trust;
6.4.5. To the knowledge of Counsel (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by Equity Funds (on behalf of Acquiring Fund) of the
transactions contemplated herein, except those obtained under the 1933
Act, the 1934 Act, and the 1940 Act and those that may be required
under state securities laws;
6.4.6. Equity Funds is registered with the SEC as an investment
company, and to the knowledge of Counsel no order has been issued or
proceeding instituted to suspend that registration; and
6.4.7. To the knowledge of Counsel (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to Equity Funds (with respect to
Acquiring Fund) or any of its properties or assets attributable or
allocable to Acquiring Fund and (b) Equity Funds (with respect to
Acquiring Fund) is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects Acquiring Fund's business, except as
set forth in that opinion or as otherwise disclosed in writing to and
accepted by Equity Trust.
In rendering the foregoing opinion, Counsel may (1) rely, as to matters governed
by the laws of the State of Delaware, on an opinion of competent Delaware
counsel, (2) make assumptions regarding the authenticity, genuineness, and/or
conformity of documents and copies thereof without independent verification
thereof, (3) limit that opinion to applicable federal and state law, and (4)
define the word "knowledge" and related terms to mean the knowledge of attorneys
then with Counsel who have devoted substantive attention to matters directly
related to this Agreement and the Reorganization.
6.5. Equity Funds shall have received an opinion of Counsel
substantially to the effect that:
6.5.1. Target is a duly established series of Equity Trust, a
business trust duly organized and validly existing under the laws of
the State of Delaware with power under its Trust Instrument to own all
its properties and assets and, to the knowledge of Counsel, to carry on
its business as presently conducted;
6.5.2. This Agreement (a) has been duly authorized, executed, and
delivered by Equity Trust on behalf of Target and (b) assuming due
authorization, execution, and delivery of this Agreement by Equity
Funds on behalf of Acquiring Fund, is a valid and legally binding
obligation of Equity Trust with respect to Target, enforceable in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights
and by general principles of equity;
6.5.3. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not,
materially violate Equity Trust's Trust Instrument or By-Laws or any
- 11 -
<PAGE>
provision of any agreement (known to Counsel, without any independent
inquiry or investigation) to which Equity Trust (with respect to
Target) is a party or by which it is bound or (to the knowledge of
Counsel, without any independent inquiry or investigation) result in
the acceleration of any obligation, or the imposition of any penalty,
under any agreement, judgment, or decree to which Equity Trust (with
respect to Target) is a party or by which it is bound, except as set
forth in that opinion or as previously disclosed in writing to and
accepted by Equity Funds;
6.5.4. To the knowledge of Counsel (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by Equity Trust (on behalf of Target) of the transactions
contemplated herein, except those obtained under the 1933 Act, the
1934 Act, and the 1940 Act and those that may be required under state
securities laws;
6.5.5. Equity Trust is registered with the SEC as an investment
company, and to the knowledge of Counsel no order has been issued or
proceeding instituted to suspend that registration; and
6.5.6. To the knowledge of Counsel (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to Equity Trust (with respect to
Target) or any of its properties or assets attributable or allocable
to Target and (b) Equity Trust (with respect to Target) is not a party
to or subject to the provisions of any order, decree, or judgment of
any court or governmental body that materially and adversely affects
Target's business, except as set forth in that opinion or as otherwise
disclosed in writing to and accepted by Equity Funds.
In rendering the foregoing opinion, Counsel may (1) rely, as to matters governed
by the laws of the State of Delaware, on an opinion of competent Delaware
counsel, (2) make assumptions regarding the authenticity, genuineness, and/or
conformity of documents and copies thereof without independent verification
thereof, (3) limit such opinion to applicable federal and state law, and (4)
define the word "knowledge" and related terms to mean the knowledge of attorneys
then with Counsel who have devoted substantive attention to matters directly
related to this Agreement and the Reorganization.
6.6. Each Investment Company shall have received an opinion of Counsel,
addressed to and in form and substance reasonably satisfactory to it, as to the
federal income tax consequences mentioned below ("Tax Opinion"). In rendering
the Tax Opinion, Counsel may rely as to factual matters, exclusively and without
independent verification, on the representations made in this Agreement, which
Counsel may treat as representations made to it, or in separate letters
addressed to Counsel and the certificates delivered pursuant to paragraph 3.4.
The Tax Opinion shall be substantially to the effect that, based on the facts
and assumptions stated therein and conditioned on consummation of the
Reorganization in accordance with this Agreement, for federal income tax
purposes:
6.6.1. Acquiring Fund's acquisition of the Assets in exchange
solely for Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities, followed by Target's distribution of those shares PRO RATA
to the Shareholders constructively in exchange for their Target Shares,
will qualify as a reorganization within the meaning of section
368(a)(1) of the Code, and each Fund will be "a party to a
reorganization" within the meaning of section 368(b) of the Code;
- 12 -
<PAGE>
6.6.2. Target will recognize no gain or loss on the transfer of
the Assets to Acquiring Fund in exchange solely for Acquiring Fund
Shares and Acquiring Fund's assumption of the Liabilities or on the
subsequent distribution of those shares to the Shareholders in
constructive exchange for their Target Shares;
6.6.3. Acquiring Fund will recognize no gain or loss on its
receipt of the Assets in exchange solely for Acquiring Fund Shares and
its assumption of the Liabilities;
6.6.4. Acquiring Fund's basis in the Assets will be the same as
Target's basis therein immediately before the Reorganization, and
Acquiring Fund's holding period for the Assets will include Target's
holding period therefor;
6.6.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for Acquiring
Fund Shares pursuant to the Reorganization; and
6.6.6. A Shareholder's aggregate basis in the Acquiring Fund
Shares to be received by it in the Reorganization will be the same as
the aggregate basis in its Target Shares to be constructively
surrendered in exchange for those Acquiring Fund Shares, and its
holding period for those Acquiring Fund Shares will include its holding
period for those Target Shares, provided the Shareholder held them as
capital assets at the Effective Time.
Notwithstanding subparagraphs 6.6.2 and 6.6.4, the Tax Opinion may state that no
opinion is expressed as to the effect of the Reorganization on the Funds or any
Shareholder with respect to any asset as to which any unrealized gain or loss is
required to be recognized for federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a mark-to-market
system of accounting.
At any time before the Closing, either Investment Company may waive any
of the foregoing conditions (except that set forth in paragraph 6.1) if, in the
judgment of its Board, that waiver will not have a material adverse effect on
its Fund's shareholders' interests.
7. BROKERAGE FEES AND EXPENSES
7.1. Each Investment Company represents and warrants to the other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
7.2. Each Fund will bear its own Reorganization expenses.
8. ENTIRE AGREEMENT; NO SURVIVAL
-----------------------------
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.
9. TERMINATION OF AGREEMENT
------------------------
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Target's shareholders:
9.1. By either Fund (a) in the event of the other Fund's material breach of
any representation, warranty, or covenant contained herein to be performed at or
prior to the Effective Time, (b) if a condition to its obligations has not been
met and it reasonably appears that such condition will not or cannot be met, or
(c) if the Closing has not occurred on or before December 31, 2000; or
9.2. With respect to any funds, by the parties' mutual agreement.
In the event of termination under paragraphs 9.1(c) or 9.2, there shall be no
liability for damages on the part of either Fund, or the trustees or officers of
either Investment Company, to the other Fund.
- 13 -
<PAGE>
10. AMENDMENT
---------
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target's shareholders, in any manner
mutually agreed on in writing by the parties; provided that following that
approval no such amendment shall have a material adverse effect on the
Shareholders' interests.
11. MISCELLANEOUS
-------------
11.1. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between those laws and the federal securities laws, the latter shall
govern.
11.2. Nothing expressed or implied herein is intended or shall be construed
to confer on or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.
11.3. Each Investment Company acknowledges that the other is a business
trust organized in series form. This Agreement is executed by Equity Funds on
behalf of Acquiring Fund, and by Equity Trust on behalf of Target, and by their
respective trustees and/or officers in their capacities as such, and not
individually. Each Investment Company's obligations under this Agreement are not
binding on or enforceable against any of its trustees, officers, or shareholders
but are only binding on and enforceable against (a) in the case of Equity Funds,
the assets and property of Acquiring Fund and no other series thereof and (b) in
the case of Equity Trust, the assets and property of Target and no other series
thereof. A trustee of one Investment Company shall not be personally liable
hereunder to the other Investment Company or its trustees or shareholders for
any act, omission, or obligation of the former Investment Company or any other
trustee thereof. Each Investment Company agrees that, in asserting any rights or
claims under this Agreement on behalf of its Fund, it shall look only to the
other Fund's assets and property in settlement of those rights and claims and
not to those trustees, officers, or shareholders.
11.4. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been executed by each Investment Company and
delivered to the other party. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
and delivered by its duly authorized officers as of the day and year first
written above.
ATTEST: NEUBERGER BERMAN EQUITY FUNDS, on behalf
of each of its series listed on Schedule A
----------------------------- By:_____________________________________
Secretary __________________
Vice President
ATTEST: NEUBERGER BERMAN EQUITY TRUST, on behalf
of each of its series listed on Schedule A
----------------------------- By:_____________________________________
Secretary __________________
Vice President
- 15 -
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
TARGETS ACQUIRING FUNDS
(All Series of Equity Trust) (All Series of Equity Funds)
---------------------------------------------- ------------------------------------------
<S> <C>
Neuberger Berman Century Trust Neuberger Berman Century Fund
Neuberger Berman Focus Trust Neuberger Berman Focus Fund
Neuberger Berman Genesis Trust Neuberger Berman Genesis Fund
Neuberger Berman Guardian Trust Neuberger Berman Guardian Fund
Neuberger Berman International Trust Neuberger Berman International Fund
Neuberger Berman Manhattan Trust Neuberger Berman Manhattan Fund
Neuberger Berman Millennium Trust Neuberger Berman Millennium Fund
Neuberger Berman Partners Trust Neuberger Berman Partners Fund
Neuberger Berman Regency Trust Neuberger Berman Regency Fund
Neuberger Berman Socially Responsive Trust Neuberger Berman Socially Responsive Fund
Neuberger Berman Technology Trust Neuberger Berman Technology Fund
</TABLE>
- 16 -
<PAGE>
APPENDIX B
FORM OF
NEUBERGER BERMAN EQUITY TRUST
PLAN PURSUANT TO RULE 12B-1
WHEREAS, Neuberger Berman Equity Trust ("Trust") is an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), and intends to offer for public sale shares of
beneficial interest in several series (each series a "Fund");
WHEREAS, the Trust desires to adopt a plan pursuant to Rule 12b-1 under
the 1940 Act and the Board of Trustees has determined that there is a reasonable
likelihood that adoption of said plan will benefit the Funds and their
shareholders; and
WHEREAS, the Trust has employed Neuberger Berman Management Inc.
("NBMI") as principal underwriter of the shares of the Trust;
NOW, THEREFORE, the Trust hereby adopts this Plan Pursuant to Rule 12b-1
("Plan") in accordance with Rule 12b-1 under the 1940 Act on the following terms
and conditions:
1. This Plan applies to the Funds listed on Schedule A.
2. A. Each Fund shall pay to NBMI, as compensation for selling Fund
shares or for providing services to Fund shareholders, a fee at the rate
specified for that Fund on Schedule A, such fee to be calculated and accrued
daily and paid monthly or at such other intervals as the Board shall determine.
B. The fees payable hereunder are payable without regard to the
aggregate amount that may be paid over the years, PROVIDED THAT, so long as the
limitations set forth in Rule 2830 of the Conduct Rules ("Rule 2830") of the
National Association of Securities Dealers, Inc. ("NASD") remain in effect and
apply to recipients of payments made under this Plan, the amounts paid hereunder
shall not exceed those limitations, including permissible interest. Amounts
expended in support of the activities described in Paragraph 3.B. of this Plan
may be excluded in determining whether expenditures under the Plan exceed the
appropriate percentage of new gross assets specified in Rule 2830.
3. A. As principal underwriter of the Trust's shares, NBMI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of shares of the Funds, including, but
not limited to, compensation to employees of NBMI; compensation to NBMI and
other broker-dealers that engage in or support the distribution of shares;
expenses of NBMI and such other broker-dealers and entities, including overhead
and telephone and other communication expenses; the printing of prospectuses,
statements of additional information, and reports for other than existing
shareholders; and the preparation and distribution of sales literature and
advertising materials.
<PAGE>
B. NBMI may spend such amounts as it deems appropriate on the
administration and servicing of shareholder accounts, including, but not limited
to, responding to inquiries from shareholders or their representatives
requesting information regarding matters such as shareholder account or
transaction status, net asset value of shares, performances, services, plans and
options, investment policies, portfolio holdings, and distributions and taxation
thereof; and dealing with complaints and correspondence of shareholders;
including compensation to organizations and employees who service shareholder
accounts, and expenses of such organizations, including overhead and telephone
and other communications expenses.
4. This Plan shall take effect on December 1, 2000 and shall continue in
effect with respect to each Fund for successive periods of one year from its
execution for so long as such continuance is specifically approved with respect
to such Fund at least annually together with any related agreements, by votes of
a majority of both (a) the Board of Trustees of the Trust and (b) those Trustees
who are not "interested persons" of the Trust, as defined in the 1940 Act, and
who have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the "Rule 12b-1 Trustees"), cast in person at a
meeting or meetings called for the purpose of voting on this Plan and such
related agreements; and only if the Trustees who approve the implementation or
continuation of the Plan have reached the conclusion required by Rule 12b-1(e)
under the 1940 Act.
5. Any person authorized to direct the disposition of monies paid or
payable by a Fund pursuant to this Plan or any related agreement shall provide
to the Trust's Board of Trustees and the Board shall review, at least quarterly,
a written report of the amounts so expended and the purposes for which such
expenditures were made.
6. This Plan may be terminated with respect to a Fund at any time by
vote of a majority of the Rule 12b-1 Trustees or by vote of a majority of the
outstanding voting securities of that Fund.
7. This Plan may not be amended to increase materially the amount of
fees to be paid by any Fund hereunder unless such amendment is approved by a
vote of at least a majority of the outstanding securities (as defined in the
1940 Act) of that Fund, and no material amendment to the Plan shall be made
unless such amendment is approved in the manner provided in Paragraph 4 hereof
for annual approval.
8. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Trust, as defined in the 1940
Act, shall be committed to the discretion of Trustees who are themselves not
interested persons.
9. The Trust shall preserve copies of this Plan and any related
agreements for a period of not less than six years from the date of expiration
of the Plan or agreement, as the case may be, the first two years in an easily
accessible place; and shall preserve copies of each report made pursuant to
Paragraph 5 hereof for a period of not less than six years from the date of such
report, the first two years in an easily accessible place.
- 2 -
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this Plan Pursuant to Rule
12b-1 as of the day and year set forth below.
Date: ___________________________ NEUBERGER BERMAN EQUITY TRUST
Attest: By:________________________________
Name:
Title:
By: ___________________________
Agreed and assented to:
NEUBERGER BERMAN MANAGEMENT INC.
By:______________________________
Name:
Title:
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NEUBERGER BERMAN EQUITY TRUST
PLAN PURSUANT TO RULE 12b-1
SCHEDULE A
The series of Neuberger Berman Equity Trust subject to the Plan Pursuant
to 12b-1, and the applicable fee rates, are:
Fee (as a Percentage of
Series Average Daily Net Assets
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Neuberger Berman Century Trust 0.10%
Neuberger Berman Focus Trust 0.10%
Neuberger Berman Genesis Trust 0.10%
Neuberger Berman Guardian Trust 0.10%
Neuberger Berman Millennium Trust 0.10%
Neuberger Berman Partners Trust 0.10%
Neuberger Berman Socially Responsive Trust 0.10%
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NEUBERGER BERMAN EQUITY FUNDS
NEUBERGER BERMAN EQUITY TRUST
NEUBERGER BERMAN EQUITY ASSETS
NEUBERGER BERMAN EQUITY SERIES
NEUBERGER BERMAN INCOME FUNDS
NEUBERGER BERMAN INCOME TRUST
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 31, 2000
This proxy is being solicited on behalf of the Boards of Trustees of Neuberger
Berman Equity Funds, Equity Trust, Equity Assets and Equity Series ("The Equity
Trusts") and relates to the proposals on behalf of the Century, Focus, Genesis,
Guardian, International, Manhattan, Millennium, Partners, Regency, Socially
Responsive and Technology series of The Equity Trusts (each a "Fund"). This
proxy is also being solicited on behalf of the Boards of Trustees of Neuberger
Berman Income Funds and Income Trust ("The Income Trusts") and relates to the
proposals on behalf of the Cash Reserves, Government Money, High Yield Bond,
Institutional Cash, Limited Maturity Bond, Municipal Money and Municipal
Securities series of The Income Trusts (each a "Fund"). The undersigned hereby
appoints as proxies Daniel J. Sullivan and Claudia A. Brandon, and each of them
(with power of substitution), to vote all shares of common stock of the
undersigned in the Funds at the Special Meeting of Shareholders to be held at
10:30 a.m., Eastern time, on October 31, 2000, at the offices of the Trust, 605
Third Avenue, 41st Floor, New York, NY 10158-3698, and any adjournment thereof
("Meeting"), with all the power the undersigned would have if personally
present.
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals set forth in this proxy statement relating to the Fund and
discretionary power to vote upon such other business as may properly come before
the Meeting.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
IF YOU ARE NOT VOTING BY PHONE OR INTERNET, PLEASE SIGN AND DATE
THIS PROXY CARDAND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-888-221-0697
OR LOG ON TO WWW.PROXYWEB.COM
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***Control Number: 999 999 999 999 99*** Please fold and detach card at
perforation before mailing
Please vote by checking the appropriate boxes below.
<TABLE>
<CAPTION>
Vote On Proposals FOR all nominees WITHHOLD
listed (except authority to
as market to the vote for all
contrary at left) nominees
<S> <C> <C>
_ _
1. To elect the nominees specified below as |_| |_|
Trustees to serve on the Board of Trustees
until their successors are duly elected and
qualified.
</TABLE>
All funds
(01) John Cannon (10) John T. Patterson, Jr.
(02) Faith Colish (11) John P. Rosenthal
(03) Walter G. Ehlers (12) William E. Rulon
(04) C. Anne Harvey (13) Cornelius T. Ryan
(05) Barry Hirsch (14) Tom Decker Seip
(06) Michael M. Kassen (15) Gustave H. Shubert
(07) Robert A. Kavesh (16) Candace L. Straight
(08) Howard A. Mileaf (17) Peter E. Sundman
(09) Edward I. O'Brien (18) Peter P. Trapp
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
_ _ _
2. To approve a change in the fundamental investment |_| |_| |_|
limitation regarding diversification.
All funds
_ _ _
3. Ratification of the selection of PricewaterhouseCoopers LLP |_| |_| |_|
as the Fund's Independent Accountants.
For Manhattan Millennium and Socially Responsive Fund,
Trust and Assets and Regency and Technology Fund and
Trust only
_ _ _
Ratification of the selection of Ernst & Young LLP as the |_| |_| |_|
Fund's Independent Auditors (for all other funds)
_ _ _
4. To approve an Agreement and Plan of Reorganization. |_| |_| |_|
Neuberger Berman Century Trust
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Neuberger Berman Focus Trust
Neuberger Berman Focus Assets
Neuberger Berman Genesis Trust
Neuberger Berman Genesis Assets
Neuberger Berman Genesis Institutional
Neuberger Berman Guardian Trust
Neuberger Berman Guardian Assets
Neuberger Berman Institutional Cash Trust
Neuberger Berman International Trust
Neuberger Berman Limited Maturity Bond Trust
Neuberger Berman Manhattan Trust
Neuberger Berman Manhattan Assets
Neuberger Berman Millennium Trust
Neuberger Berman Millennium Assets
Neuberger Berman Partners Trust
Neuberger Berman Partners Assets
Neuberger Berman Regency Trust
Neuberger Berman Socially Responsive Trust
Neuberger Berman Socially Responsive Assets
Neuberger Berman Technology Trust
_ _ _
5. To approve a distribution and shareholder services plan. |_| |_| |_|
Neuberger Berman Genesis Trust
Neuberger Berman Guardian Trust
Neuberger Berman Partners Trust
_ _ _
6. To approve a change in the fundamental restriction |_| |_| |_|
concerning industry concentration.
Neuberger Berman Cash Reserves
_ _ _
7. A. To modify the fundamental restriction limiting |_| |_| |_|
investments in U.S. Government securities.
_ _ _
B. To remove the fundamental prohibition on repurchase |_| |_| |_|
agreements.
_ _ _
C. To modify the fundamental borrowing policy to permit |_| |_| |_|
reverse repurchase agreements.
_ _ _
D. To modify the fundamental restriction to permit |_| |_| |_|
securities lending.
</TABLE>
Neuberger Berman Government Money
[NAME AND ADDRESS]
Please sign exactly as name appears hereon. If shares are held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
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Date ______________________________, 2000
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Signature (owner, joint owners, trustee, custodian, etc.)
