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:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
x 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 Trust
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
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 TRUST
NEUBERGER BERMAN FOCUS TRUST
NEUBERGER BERMAN GENESIS TRUST
NEUBERGER BERMAN GUARDIAN TRUST
NEUBERGER BERMAN INTERNATIONAL TRUST
NEUBERGER BERMAN MANHATTAN TRUST
NEUBERGER BERMAN MILLENNIUM TRUST
NEUBERGER BERMAN PARTNERS TRUST
August 31, 1999
Dear Shareholder:
The attached Proxy Statement discusses two Proposals (the "Proposals") to
be voted upon by the holders of the above-named series (each a "Fund") of
Neuberger Berman Equity Trust (the "Trust"). As a shareholder of the Funds, you
are asked to review the Proxy Statement and to cast your vote on the Proposals.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS A VOTE FOR BOTH
PROPOSALS. Proposal 1 seeks approval of a plan of distribution to authorize each
Fund to spend 0.10% of average daily net assets each year for distribution
and/or shareholder servicing expenses. Proposal 2 seeks shareholder ratification
of the Funds' independent auditors or accountants. The Proposals are discussed
in greater detail in the attached Proxy Statement.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Voting your
shares early will permit the Funds to avoid costly follow-up mail and telephone
solicitation. After reviewing the attached materials, please complete, sign and
date your proxy card and mail it promptly in the enclosed return envelope. As an
alternative to using the paper proxy card to vote, you may vote by telephone,
through the Internet or in person. However, any proposal submitted to a vote at
the meeting by anyone other than the officers or Trustees of the Trust may be
voted only in person or by written proxy.
Very truly yours,
/s/ Lawrence Zicklin
--------------------------
Lawrence Zicklin
PRESIDENT,
Neuberger Berman Equity Trust
<PAGE>
NEUBERGER BERMAN EQUITY TRUST
NEUBERGER BERMAN FOCUS TRUST
NEUBERGER BERMAN GENESIS TRUST
NEUBERGER BERMAN GUARDIAN TRUST
NEUBERGER BERMAN INTERNATIONAL TRUST
NEUBERGER BERMAN MANHATTAN TRUST
NEUBERGER BERMAN MILLENNIUM TRUST
NEUBERGER BERMAN PARTNERS TRUST
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 15, 1999
------------------------
A special meeting of the shareholders of Neuberger Berman Focus Trust,
Neuberger Berman Genesis Trust, Neuberger Berman Guardian Trust, Neuberger
Berman International Trust, Neuberger Berman Manhattan Trust, Neuberger Berman
Millennium Trust and Neuberger Berman Partners Trust (each a "Fund"), each a
series of Neuberger Berman Equity Trust (the "Trust"), will be held at the
offices of Neuberger Berman, LLC, 605 Third Avenue, 41st Floor, New York, New
York 10158-3698, on October 15, 1999 at 10:00 a.m. Eastern time. The special
meeting is being held for the following purposes:
1. To approve with respect to each Fund a plan of distribution to
authorize each Fund to spend annually 0.10% of average daily net
assets to pay for distribution and/or shareholder servicing
expenses.
2. To ratify the independent accountants/auditors for each Fund.
3. To consider and vote upon such other matters as may properly come
before the meeting or any adjournments thereof.
Proposals 1 and 2 are discussed in greater detail in the attached Proxy
Statement. You are entitled to vote at the meeting and any adjournment thereof
if you owned shares of one or more Funds at the close of business on August 2,
1999. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO
NOT EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY ALSO VOTE BY
TELEPHONE OR THROUGH THE INTERNET. However, any proposal submitted to a vote at
the meeting by anyone other than the officers or Trustees of the Trust may be
voted only in person or by written proxy.
<PAGE>
By order of the Board of Trustees,
/s/ Claudia A. Brandon
--------------------------------
Claudia A. Brandon
Secretary,
NEUBERGER BERMAN EQUITY TRUST
August 31, 1999
New York, New York
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card(s),
sign and date the card(s), and return the card(s) in the envelope provided. IF
YOU SIGN, DATE AND RETURN THE PROXY CARD(S) BUT GIVE NO VOTING INSTRUCTIONS,
YOUR SHARES WILL BE VOTED "FOR" THE PROPOSALS DESCRIBED ABOVE.
To avoid the additional expense of further solicitation, we ask your
cooperation in mailing your proxy card(s) promptly. If you own shares of more
than one Fund, you must submit a separate proxy card for each Fund in which you
own shares.
As an alternative to using the paper proxy card to vote, you may vote by
telephone, through the Internet or in person. If you own shares of more than one
Fund, you must submit a separate vote for each Fund in which you own shares. To
vote by telephone, please call the toll free number listed on the enclosed proxy
card(s). To vote via the Internet, please access the website listed on your
proxy card(s). Shares that are registered in your name, as well as shares held
in "street name" through a broker may be voted via the Internet or by telephone.
To vote in this manner, you will need the "control" number(s) that appear on
your proxy card(s). However, any proposal submitted to a vote at the meeting by
anyone other than the officers or Trustees of the Trust may be voted only in
person or by written proxy. If we do not receive your completed proxy card(s)
after several weeks, you may be contacted by Neuberger Berman Management Inc.,
the Funds' investment manager.
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.
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<PAGE>
NEUBERGER BERMAN EQUITY TRUST
NEUBERGER BERMAN FOCUS TRUST
NEUBERGER BERMAN GENESIS TRUST
NEUBERGER BERMAN GUARDIAN TRUST
NEUBERGER BERMAN INTERNATIONAL TRUST
NEUBERGER BERMAN MANHATTAN TRUST
NEUBERGER BERMAN MILLENNIUM TRUST
NEUBERGER BERMAN PARTNERS TRUST
605 THIRD AVENUE
NEW YORK, NEW YORK 10158-0180
212-476-8800
------------------------
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 15, 1999
------------------------
VOTING INFORMATION
The Board of Trustees of Neuberger Berman Equity Trust (the "Trust") is
soliciting the accompanying proxy for use at a Special Meeting of shareholders
of Neuberger Berman Focus Trust, Neuberger Berman Genesis Trust, Neuberger
Berman Guardian Trust, Neuberger Berman International Trust, Neuberger Berman
Manhattan Trust, Neuberger Berman Millennium Trust and Neuberger Berman Partners
Trust (each a "Fund"), to be held on October 15, 1999 at 10:00 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
Proxy Statement is first being mailed on or about August 31, 1999.
One-third of each Fund's shares outstanding and entitled to vote on August
2, 1999 ("Record Date"), represented in person or by proxy, shall be a quorum
and must be present for the transaction of business at the Meeting with respect
to that Fund. Only shares of the Funds named above are permitted to vote at the
Meeting. Each Fund's shareholders will vote separately on each Proposal with
respect to that Fund. If you are a shareholder of more than one Fund, you will
be voting on each 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 either 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
1
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require the affirmative vote of those shares represented 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 either or both of the Proposals
in this Proxy Statement 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 Proposals 1 and 2
described in the accompanying Notice of Special Meeting of Shareholders. Proxies
that reflect abstentions and "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 be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. With respect to each Proposal, abstentions and broker
non-votes have the effect of a negative vote on the Proposal or any adjournment.
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
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 Neuberger Berman Management Inc. ("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 ADP Financial Information Services, Inc.,
professional proxy solicitors ("ADP"). For soliciting services, ADP will be paid
fees and expenses of up to approximately $8,951, $88,475, $39,182, $27, $597,
$277 and $39,697 for Neuberger Berman Focus, Genesis, Guardian, International,
Manhattan, Millennium and Partners Trusts, respectively. If votes are recorded
by telephone, ADP 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 PROPOSALS 1 AND 2, ANY PROPOSAL SUBMITTED
TO A VOTE AT THE MEETING BY ANYONE OTHER THAN THE OFFICERS OR TRUSTEES OF THE
TRUST MAY BE VOTED ONLY IN PERSON OR BY WRITTEN PROXY.
2
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Each Fund is a separate series of the Trust. Each Fund (except for
Neuberger Berman International Trust) invests all of its net investable assets
in a corresponding portfolio ("Portfolio") of Equity Managers Trust, a New York
common law trust registered as an open-end management investment company.
Neuberger Berman International Trust invests in a corresponding portfolio
("Portfolio") of Global 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 Portfolio. Each Portfolio invests in securities in accordance with an
investment objective, policies, and limitations identical to those of its
corresponding Fund.
As of August 2, 1999, the following number of shares were outstanding with
respect to each Fund:
FUND NUMBER OF SHARES
OUTSTANDING
Focus 9,169,442
Genesis 30,046,084
Guardian 76,312,789
International 133,688
Manhattan 3,044,423
Millennium 109,821
Partners 45,498,851
In addition, to the Trust's knowledge, as of August 2, 1999, the following are
all of the beneficial owners of more than five percent of each Fund:
<TABLE>
<CAPTION>
FUND NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF THE
BENEFICIALLY OWNED FUND OWNED
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<S> <C> <C>
Focus Boston Safe Deposit & Trust Co. 2,014,641 22 %
TWA INC Pilots Directed Account Plan
135 Sam Hill Hwy 426-0325
Everett, MA 02149-1906
3
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FUND NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF THE
BENEFICIALLY OWNED FUND OWNED
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Guardian Fidelity Investments Institutional for 10,571,770 14 %
PG&E Savings Plan
100 Magellan Way
Mailzone Kwic
Covington, KY 41015-1999
Wachovia Bank of NC 5,820,145 8 %
Akzo Nobel Inc. Savings Plan
301 N. Main St.
MC-NC 32213
Winston-Salem, NC 27101-3819
Manhattan The Northern Trust Co. 1,358,881 45 %
TTEE FBO Case Corporation
22-75833
PO Box 92956
Chicago, IL 60675-2956
Puig Perfumes Salary Deferral Plan 202,194 7 %
9 Skyline Dr.
Hawthorne, NY 10532-2100
Partners PRC, Inc. 3,824,688 8 %
c/o T. Rowe Price Financial
PO Box 17215
Baltimore, MD 21297-1215
The Northern Trust Co. 2,464,191 5 %
TTEE FBO Phycor Savings Plan
PO Box 92956
Chicago, IL 60675-2956
</TABLE>
At August 2, 1999, the Trustees and officers of the Trust as a group
beneficially owned less than 1% of the shares of each Fund. Certain Trustees and
officers of the Trust are employees and shareholders of NBMI, which will benefit
if 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 FUNDS MAY REQUEST COPIES OF THE FUNDS' ANNUAL REPORT FOR THE
FISCAL YEAR ENDED AUGUST 31, 1998, INCLUDING AUDITED FINANCIAL STATEMENTS, AND
THE FUNDS' SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 28, 1999, AT NO
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CHARGE BY WRITING NBMI AT 605 THIRD AVENUE, 2ND FLOOR, NEW YORK, NEW YORK
10158-0180, OR BY CALLING TOLL FREE 800-877-9700.
REQUIRED VOTE. Approval of the Distribution and Shareholder Services Plan
(Proposal 1) for a Fund will require 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. Ratification of the independent accountants or
auditors of each Fund (Proposal 2) requires the affirmative vote of a majority
of the shares of that Fund present and voting at the Meeting, provided a quorum
is present. Each full share outstanding of each Fund is entitled to one vote and
each fractional share outstanding of each Fund is entitled to a proportionate
share of one vote for such purposes. In order to be effective with respect to a
Fund, the Proposals must be approved separately with respect to that Fund by its
shareholders. If the Distribution and Shareholder Services Plan is approved by
the shareholders of some Funds and not others, it will be implemented by those
Funds that approved it. With respect to any Funds that do not approve the Plan,
the Board of Trustees will consider what further steps to take.
GENERAL OVERVIEW OF THE PROPOSALS
The following is a brief overview regarding the matters being presented
for your approval at the Meeting:
Each Fund's shareholders are being asked in Proposal 1 to adopt a
distribution and shareholder services plan (the "Distribution and Shareholder
Services Plan"). The Distribution and Shareholder Services Plan would allow each
Fund to spend annually 0.10% of its average daily net assets to compensate NBMI,
the Funds' principal underwriter, for shareholder servicing activities and/or
expenses primarily intended to result in the sale of shares of the Funds. Shares
of the Funds are not currently covered by any distribution plan, and the
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, EXCEPT Neuberger
Berman Millennium Trust and International Trust, by 0.10% of average daily net
assets. Because Neuberger Berman Millennium Trust and International Trust are
subject to expense limitations that limit total annual operating expenses to set
percentages of average daily net assets, the total operating expenses indirectly
borne by shareholders of those Funds will not change as long as the expense
limitations are in effect and expenses exceed the limitations. These expense
limitation arrangements can be terminated upon sixty days' notice to a Fund.
NBMI believes that the Distribution and Shareholder Services Plan is
appropriate if investors are to continue receiving a high level of shareholder
services, and if NBMI is to continue its successful relationship with many of
the pension administrators and fund supermarket sponsors who make the Funds
available to investors. NBMI believes that the new plan is necessary to defray
the increasing fees charged by many of these service providers, which may
represent increases in the cost of providing their current services, increased
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<PAGE>
expenses resulting from the introduction of new shareholder servicing
technology, or a combination of both.
Proposal 2 asks each Fund's shareholders to ratify the selection of Ernst
& Young LLP or PricewaterhouseCoopers LLP to serve as each Fund's independent
auditors or accountants, as applicable.
-----------------------------
PROPOSAL 1 - APPROVAL OF THE DISTRIBUTION AND SHAREHOLDER
SERVICES PLAN
The Board of Trustees has approved, and recommends that shareholders of
each Fund approve, the Distribution and Shareholder Services Plan. The
Distribution and Shareholder Services Plan would authorize each Fund to pay a
fee at an annual rate of 0.10% of its average daily net assets, to be calculated
daily and paid monthly, for ongoing services to investors in the Funds and/or
activities and expenses related to the distribution of Fund shares.
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. If the Distribution and Shareholder
Services Plan is approved, each Fund would pay an additional fee at an annual
rate of 0.10% of its average daily net assets. While the Funds would pay this
fee to NBMI, NBMI expects to pay most or all of it 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. The
fee paid to a financial institution may be based on the level of such services
provided. In the event that 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 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 the expenses incurred by it for servicing
or distributing the Funds' shares exceed the fee payable under the Distribution
and Shareholder Services Plan.
The Distribution and Shareholder Services Plan would permit the payment of
compensation for shareholder servicing activities, including but not limited to
the following: (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 and
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telephone and other communication expenses. (See Section 3.B. of the proposed
Plan.)
The Distribution and Shareholder Services Plan would also permit payment
of compensation for distribution-related activities, including but not limited
to compensation for (a) the distribution of shares; (b) overhead and telephone
and communications 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.)
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 its review at least
quarterly. In addition, the Plan provides that it may not be amended to increase
materially the costs that a Fund may bear pursuant to it without approval of the
Fund's shareholders, and that other material amendments to the Plan must be
approved by the vote of a majority of the Trustees, 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"), cast
in person at a meeting called for the purpose of considering such amendments.
The Distribution and Shareholder Services Plan is subject to annual approval by
the entire Board of Trustees and by the Independent Trustees, by vote cast in
person at a meeting called for the purpose of voting on the Plan. 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 the Rule, the selection and nomination of the
Trustees who are not interested persons of the Trust is committed to the
discretion of the then current Trustees who are not interested persons of the
Trust.
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 A to this Proxy Statement. If approved by shareholders, the
Distribution and Shareholder Services Plan will become effective on November 1,
1999 and will remain in effect for one year thereafter, subject to continuation
by the Board of Trustees.
At a meeting held on April 28, 1999, the Trustees of the Trust, including
all of the Independent Trustees, approved the Distribution and Shareholder
Services Plan with respect to each Fund's shares.
-----------------------------
7
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IMPACT OF THE PROPOSAL. The overall fees and expenses that a Fund
shareholder would bear would be increased under the Proposal (except with
respect to Neuberger Berman International and Millennium Trusts). If the
Proposal is approved, each Fund's shares would incur distribution fees of .10%
of average daily net assets, in addition to the fees and expenses currently
applicable. 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 such
shareholders would bear if they approve the Distribution and Shareholder
Services Plan.
As explained in the notes accompanying the tables, certain of the Funds
have arrangements with NBMI whereby NBMI reimburses certain expenses of those
Funds so that their total annual operating expenses are limited to set amounts.
Each Fund (EXCEPT Neuberger Berman International and Millennium Trusts)
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
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.
Neuberger Berman International and Millennium Trusts will have
arrangements with NBMI whereby the Funds' total annual operating expenses are
limited to the lesser of : (a) 1.70% and 1.75% of average net assets,
respectively; or (b) no more than 0.20% above the total annual operating
expenses of their respective Sister Funds. These arrangements can be terminated
upon 60 days' notice to a Fund. However, as long as actual expenses exceed these
expense limitations, the adoption of the Distribution and Shareholder Services
Plan will not increase these Funds' total annual operating expenses.
8
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN FOCUS TRUST
CURRENT PROPOSED
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund assets,
so you pay them indirectly. so you pay them indirectly.
Management fees 0.88 Management fees 0.88
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES 0.10
Other expenses 0.09 Other expenses 0.09
-------- -------
Equals: Total annual operating expenses 0.97 EQUALS: TOTAL ANNUAL OPERATING 1.07
EXPENSES
* Neuberger Berman Management reimburses * Neuberger Berman Management reimburses
certain expenses of the fund so that its certain expenses of the fund so that its
total annual operating expenses are not total annual operating expenses are not
more than 0.10% above those of another more than 0.20% above those of another
Neuberger Berman fund that invests in the Neuberger Berman fund that invests in the
same portfolio of securities. This same portfolio of securities. This
arrangement does not cover interest, taxes, arrangement does not cover interest,
brokerage commissions, and extraordinary taxes, brokerage commissions, and
expenses. Under this arrangement, which extraordinary expenses. Under this
Neuberger Berman Management can terminate arrangement, which Neuberger Berman
upon sixty days' notice to the fund, total Management can terminate upon sixty days'
annual operating expenses of the fund last notice to the fund, total annual
year were limited to 0.94% of the fund's operating expenses of the fund last year
average net assets. The figures in the would have been limited to 1.04% of the
table are based on last year's expenses. fund's average net assets. The figures in
Actual expenses this year may be higher or the table are based on last year's
lower. The table includes costs paid by expenses. Actual expenses this year may
the fund and its share of master portfolio be higher or lower. The table includes
costs. costs paid by the fund and its share of
master portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
Expenses $99 $309 $536 $1190 Expenses $109 $340 $590 $1306
</TABLE>
9
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<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 Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund
so you pay them indirectly. assets, so you pay them indirectly.
Management fees 1.11 Management fees 1.11
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES 0.10
Other expenses 0.08 Other expenses 0.08
--------- -------
Equals: Total annual operating expenses 1.19 EQUALS: TOTAL ANNUAL OPERATING 1.29
EXPENSES
* The figures in the table are based on last * Neuberger Berman Management reimburses
year's expenses. Actual expenses this year certain expenses of the fund so that its
may be higher or lower. The table includes total annual operating expenses are not
costs paid by the fund and its share of more than 0.20% above those of another
master portfolio costs. Neuberger Berman fund that invests in
the same portfolio of securities. This
arrangement does not cover interest,
taxes, brokerage commissions, and
extraordinary expenses. The figures in
the table are based on last year's
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 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
Expenses $121 $378 $654 $1443 Expenses $131 $409 $708 $1556
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN GUARDIAN TRUST
CURRENT PROPOSED
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund
so you pay them indirectly. assets, so 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 0.03 Other expenses 0.03
--------- -------
Equals: Total annual operating expenses 0.87 EQUALS: TOTAL ANNUAL OPERATING 0.97
EXPENSES
* The figures in the table are based on last * Neuberger Berman Management reimburses
year's expenses. Actual expenses this year certain expenses of the fund so that its
may be higher or lower. The table includes total annual operating expenses are not
costs paid by the fund and its share of more than 0.20% above those of another
master portfolio costs. Neuberger Berman fund that invests in
the same portfolio of securities. This
arrangement does not cover interest,
taxes, brokerage commissions, and
extraordinary expenses. The figures in
the table are based on last year's
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 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
Expenses $89 $278 $482 $1073 Expenses $99 $309 $536 $1190
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN INTERNATIONAL TRUST
CURRENT PROPOSED
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund
so you pay them indirectly. assets, so you pay them indirectly.
Management fees 1.25 Management fees 1.25
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES 0.10
Other expenses** 0.67 Other expenses** 0.67
-------- -------
Equals: Total annual operating expenses 1.92 EQUALS: TOTAL ANNUAL OPERATING 2.02
EXPENSES
* Neuberger Berman Management reimburses * Neuberger Berman Management reimburses
certain expenses of the fund so that the certain expenses of the fund so that
total annual operating expenses of the fund the total annual operating expenses of
are limited to 1.70% of average net the fund are limited to 1.70% of
assets. This arrangement can be terminated average net assets, or to not more than
upon sixty days' notice to the fund. In 0.20% above the total annual operating
addition, the arrangement does not cover expenses of another Neuberger Berman
interest, taxes, brokerage commissions, and fund that invests in the same portfolio
extraordinary expenses. The table includes of securities, whichever is less. This
costs paid by the fund and its share of arrangement can be terminated upon
master portfolio costs. sixty days' notice to the fund. In
** Other expenses are based on estimated addition, the arrangement does not
amounts for the current fiscal year. cover interest, taxes, brokerage
commissions, and extraordinary
expenses. The table includes costs
paid by the fund and its share of
master portfolio costs.
** Other expenses are based on estimated
amounts for the fiscal year ended
8/31/99. Actual expenses may be higher
or lower.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
Expenses $195 $603 $1037 $2243 Expenses $205 $634 $1088 $2348
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN MANHATTAN TRUST
CURRENT PROPOSED
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund
so you pay them indirectly. assets, so you pay them indirectly.
Management fees 0.93 Management fees 0.93
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES 0.10
Other expenses 0.22 Other expenses 0.22
-------- -------
Equals: Total annual operating expenses 1.15 EQUALS: TOTAL ANNUAL OPERATING 1.25
EXPENSES
* Neuberger Berman Management reimburses * Neuberger Berman Management reimburses
certain expenses of the fund so that its certain expenses of the fund so that
total annual operating expenses are not its total annual operating expenses are
more than 0.10% above those of another not more than 0.20% above those of
Neuberger Berman fund that invests in the another Neuberger Berman fund that
same portfolio of securities. This invests in the same portfolio of
arrangement does not cover interest, taxes, securities. This arrangement does not
brokerage commissions, and extraordinary cover interest, taxes, brokerage
expenses. Under this arrangement, which commissions, and extraordinary
Neuberger Berman Management can terminate expenses. Under this arrangement,
upon sixty days' notice to the fund, total which Neuberger Berman Management can
annual operating expenses of the fund last terminate upon sixty days' notice to
year were limited to 1.04% of the fund's the fund, total annual operating
average net assets. The figures in the expenses of the fund last year would
table are based on last year's expenses. have been limited to 1.14% of the
Actual expenses this year may be higher or fund's average net assets. The figures
lower. The table includes costs paid by in the table are based on last year's
the fund and its share of master portfolio expenses. Actual expenses this year
costs. 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 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
Expenses $117 $365 $633 $1398 Expenses $127 $397 $686 $1511
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN MILLENNIUM TRUST
CURRENT PROPOSED
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund
so you pay them indirectly. assets, so you pay them indirectly.
Management fees 1.25 Management fees 1.25
Plus: Distribution (12b-1) fees None PLUS: DISTRIBUTION (12B-1) FEES 0.10
Other expenses** 1.20 Other expenses** 1.20
-------- -------
Equals: Total annual operating expenses 2.45 EQUALS: TOTAL ANNUAL OPERATING 2.55
EXPENSES
* Neuberger Berman Management reimburses * Neuberger Berman Management reimburses
certain expenses of the fund so that the certain expenses of the fund so that
total annual operating expenses of the fund the total annual operating expenses of
are limited to 1.75% of average net the fund are limited to 1.75% of
assets. This arrangement can be terminated average net assets, or to not more than
upon sixty days' notice to the fund. In 0.20% above the total annual operating
addition, the arrangement does not cover expenses of another Neuberger Berman
interest, taxes, brokerage commissions, and fund that invests in the same portfolio
extraordinary expenses. The table includes of securities, whichever is less. This
costs paid by the fund and its share of arrangement can be terminated upon
master portfolio costs. sixty days' notice to the fund. In
** Other expenses are based on estimated addition, the arrangement does not
amounts for the current fiscal year. cover interest, taxes, brokerage
commissions, and extraordinary
expenses. The table includes costs
paid by the fund and its share of
master portfolio costs.
** Other expenses are based on estimated
amounts for the fiscal year ended
8/31/99. Actual expenses may be higher
or lower.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 Year 3 Years 1 Year 3 Years
Expenses $248 $764 Expenses $258 $794
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER BERMAN PARTNERS TRUST
CURRENT PROPOSED
FEE TABLE FEE TABLE
<S> <C> <C> <C>
Shareholder fees None Shareholder fees None
Annual operating expenses (% of Annual operating expenses (% of
average net assets)* average net assets)*
These are deducted from fund assets, These are deducted from fund assets,
so you pay them indirectly. so you 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 1.01
EXPENSES
* Neuberger Berman Management reimburses * Neuberger Berman Management reimburses
certain expenses of the fund so that its certain expenses of the fund so that its
total annual operating expenses are not total annual operating expenses are not
more than 0.10% above those of another more than 0.20% above those of another
Neuberger Berman fund that invests in the Neuberger Berman fund that invests in
same portfolio of securities. This the same portfolio of securities. This
arrangement does not cover interest, taxes, arrangement does not cover interest,
brokerage commissions, and extraordinary taxes, brokerage commissions, and
expenses. Under this arrangement, which extraordinary expenses. Under this
Neuberger Berman Management can terminate arrangement, which Neuberger Berman
upon sixty days' notice to the fund, total Management can terminate upon sixty
annual operating expenses of the fund last days' notice to the fund, total annual
year were limited to 0.90% of the fund's operating expenses of the fund last year
average net assets. The figures in the would have been limited to 1.00% of the
table are based on last year's expenses. fund's average net assets. The figures
Actual expenses this year may be higher or in the table are based on last year's
lower. The table includes costs paid by expenses. Actual expenses this year may
the fund and its share of master portfolio be higher or lower. The table includes
costs. costs paid by the fund and its share of
master portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE
This example assumes that you invested $10,000 This example assumes that you invested
for the periods shown, that you earned a $10,000 for the periods shown, that you
hypothetical 5% total return each year, and earned a hypothetical 5% total return each
that the fund's expenses were those in the year, and that the fund's expenses were
table above. Your costs would be the same those in the table above. Your costs
whether you sold your shares or continued to would be the same whether you sold your
hold them at the end of each period. Actual shares or continued to hold them at the
performance and expenses may be higher or lower. end of each period. Actual performance
and expenses may be higher or lower.
1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
Expenses $93 $290 $504 $1120 Expenses $103 $322 $558 $1236
</TABLE>
15
<PAGE>
REASONS FOR THE PROPOSAL. NBMI has recommended Proposal 1 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.
16
<PAGE>
Even with the proposed new fee of 0.10% of average daily net assets,
total fund operating expenses for each Fund (except Neuberger Berman
International and Millennium Trusts) will remain at or below the median total
operating expense ratio of comparable funds as represented by its peer group.
(Neuberger Berman International and Millennium Trusts are relatively new funds
with asset sizes below those of the other Funds; their total operating expense
ratios are higher than more established funds.)
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 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
through their corresponding Portfolios include breakpoints of declining
percentages based on greater asset size.
17
<PAGE>
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.
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 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 implementation of the
Distribution and Shareholder Services Plan would be in the best interests of
each Fund and its shareholders and would have a reasonable likelihood of
benefiting 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.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
RECOMMENDS THAT THE SHAREHOLDERS OF THE FUNDS VOTE TO APPROVE THE DISTRIBUTION
AND SHAREHOLDER SERVICES PLAN.
-----------------------------
PROPOSAL 2 - RATIFICATION OR REJECTION OF SELECTION OF
INDEPENDENT AUDITORS OR ACCOUNTANTS
The Board, including all of the Independent Trustees, has selected Ernst &
Young LLP to continue to serve as the independent auditors of each of the Funds
except Neuberger Berman Manhattan Trust and Neuberger Berman Millennium Trust.
Ernst & Young LLP has no direct financial interest or material indirect
financial interest in these Funds. The Board, including all of the Independent
Trustees, has selected PricewaterhouseCoopers LLP to continue to serve as
independent accountants of Neuberger Berman Manhattan Trust and Neuberger Berman
Millennium Trust. PricewaterhouseCoopers LLP has no direct financial interest or
material indirect financial interest in either Fund. 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 presence.
18
<PAGE>
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 Board reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such services
would affect the auditors' or accountants' independence.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
RECOMMENDS THAT THE SHAREHOLDERS OF THE FUNDS VOTE TO RATIFY ITS SELECTION OF
THE FUNDS' INDEPENDENT AUDITORS/ACCOUNTANTS.
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 Portfolios. NBMI manages the Portfolios in conjunction
with Neuberger Berman, LLC, as sub-adviser. Together, the firms manage more than
$57.0 billion in total assets (as of June 30, 1999) 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 Trust does 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 Trust 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
/s/ Claudia A. Brandon
- ----------------------------
Claudia A. Brandon
Secretary
August 31, 1999
19
<PAGE>
APPENDIX A
NEUBERGER BERMAN EQUITY TRUST
FORM OF DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
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 Distribution and Shareholder
Services ("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
1
<PAGE>
information, and reports for other than existing shareholders; and the
preparation and distribution of sales literature and advertising materials.
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 November 1, 1999 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
2
<PAGE>
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.
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:
3
<PAGE>
NEUBERGER BERMAN EQUITY TRUST
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
SCHEDULE A
The series of Neuberger Berman Equity Trust subject to the Distribution
and Shareholder Services Plan, and the applicable fee rates, are:
Fee (as a Percentage of
SERIES AVERAGE DAILY NET ASSETS
------ ------------------------
Neuberger Berman Focus Trust 0.10%
Neuberger Berman Genesis Trust 0.10%
Neuberger Berman Guardian Trust 0.10%
Neuberger Berman International Trust 0.10%
Neuberger Berman Manhattan Trust 0.10%
Neuberger Berman Millennium Trust 0.10%
Neuberger Berman Partners Trust 0.10%
4
<PAGE>
NEUBERGER BERMAN EQUITY TRUST
NEUBERGER BERMAN FOCUS TRUST
NEUBERGER BERMAN GENESIS TRUST
NEUBERGER BERMAN GUARDIAN TRUST
NEUBERGER BERMAN INTERNATIONAL TRUST
NEUBERGER BERMAN MANHATTAN TRUST
NEUBERGER BERMAN MILLENNIUM TRUST
NEUBERGER BERMAN PARTNERS TRUST
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 15, 1999
This proxy is being solicited on behalf of the Board of Trustees of Neuberger
Berman Equity Trust ("Trust") and relates to the proposals with respect to the
Trust, on behalf of Neuberger Berman Focus Trust, Neuberger Berman Genesis
Trust, Neuberger Berman Guardian Trust, Neuberger Berman International Trust,
Neuberger Berman Manhattan Trust, Neuberger Berman Millennium Trust, and
Neuberger Berman Partners Trust, each a series of the Trust (each a "Fund"). The
undersigned hereby appoints as proxies Lawrence Zicklin, Michael J. Weiner and
Claudia A. Brandon, and each of them (with power of substitution), to vote all
shares of common stock of the undersigned in the Fund at the Special Meeting of
Shareholders to be held at 10:00 a.m., Eastern time, on October 15, 1999, 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.
NEUBERGER BERMAN VOTE TODAY BY MAIL,
EQUITY TRUST TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-888-221-0697
OR LOG ON TO WWW.PROXYWEB.COM
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN FOCUS TRUST Please vote by checking the appropriate boxes
below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of Ernst & Young / / / / / /
LLP as the Fund's Independent Auditors.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
2
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN GENESIS TRUST Please vote by checking the appropriate boxes
below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of Ernst & Young / / / / / /
LLP as the Fund's Independent Auditors.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
3
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN GUARDIAN TRUST Please vote by checking the appropriate boxes
below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of Ernst & Young / / / / / /
LLP as the Fund's Independent Auditors.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
4
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN INTERNATIONAL TRUST Please vote by checking the appropriate
boxes below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of Ernst & Young / / / / / /
LLP as the Fund's Independent Auditors.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
5
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN MANHATTAN TRUST Please vote by checking the appropriate boxes
below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of / / / / / /
PricewaterhouseCoopers LLP as the Fund's
Independent Accountants.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
6
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN MILLENNIUM TRUST Please vote by checking the appropriate boxes
below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of / / / / / /
PricewaterhouseCoopers LLP as the Fund's
Independent Accountants.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
7
<PAGE>
***Control Number: 999 999 999 999 Please fold and detach card at perforation
99*** before mailing
NEUBERGER BERMAN PARTNERS TRUST Please vote by checking the appropriate boxes
below.
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Distribution and Shareholder / / / / / /
Services Plan to authorize the Fund to spend
annually 0.10% of average daily net assets to
pay for distribution and/or shareholder
servicing expenses.
2. Ratification of the selection of Ernst & Young / / / / / /
LLP as the Fund's Independent Auditors.
3. To consider and vote upon such other matters as / / / / / /
may properly come before said meeting or any
adjournments thereof.
[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.
Date , 1999
- --------------------------------------------------
- --------------------------------------------------
Signature (owner, joint owners, trustee, custodian, etc.)
8
