-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q+Z2LehVL8JXhZSxTDMm4PZZ1yGfdnKAAbx9EnmaenGbqdOTWkw0W1lxOSRb0XmO 3HBN9GgE26vhA+e8dTR00g== 0000898432-99-000830.txt : 19990811 0000898432-99-000830.hdr.sgml : 19990811 ACCESSION NUMBER: 0000898432-99-000830 CONFORMED SUBMISSION TYPE: PRES14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991015 FILED AS OF DATE: 19990803 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEUBERGER BERMAN EQUITY TRUST CENTRAL INDEX KEY: 0000906926 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: PRES14A SEC ACT: SEC FILE NUMBER: 811-07784 FILM NUMBER: 99677155 BUSINESS ADDRESS: STREET 1: 605 THIRD AVE STREET 2: 2ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10158-0006 BUSINESS PHONE: 2124768800 FORMER COMPANY: FORMER CONFORMED NAME: NEUBERGER & BERMAN EQUITY TRUST DATE OF NAME CHANGE: 19930615 PRES14A 1 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 Trust - -------------------------------------------------------------------------------- (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: 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 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 Trust's Board of Trustees recommends that shareholders approve 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 in the enclosed return envelope promptly. 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, Lawrence Zicklin ------------------ Lawrence Zicklin PRESIDENT, Neuberger Berman Equity Trust 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 605 Third Avenue, 41st Floor, New York, New York 10158-0180 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 a Fund 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. By order of the Board of Trustees, Claudia A. Brandon SECRETARY, NEUBERGER BERMAN EQUITY TRUST October __, 1999 New York, New York - -------------------------------------------------------------------------------- YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN Please indicate your voting instructions on the enclosed proxy card, sign and date the card, and return it in the envelope provided. IF YOU SIGN, DATE AND RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED "FOR" THE PROPOSALS DESCRIBED ABOVE. In order to avoid the additional expense of further solicitation, we ask your cooperation in mailing your proxy card(s) promptly. As an alternative to using the paper proxy card(s) to vote, you may vote by mail, by telephone, through the Internet, or in person. To vote by telephone, please call the toll-free number listed on the enclosed proxy card(s). Shares that are registered in your name may be voted via the Internet or by telephone. To vote in this manner, you will need the 12-digit "control" number(s) that appear on your proxy card(s). To vote via the Internet, please access http://www.proxyvote.com on the World Wide Web. 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. You may also call [ADP Investor Communication Services directly at [1-800-690-6903], and vote by phone. 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. Unless proxy card(s) submitted by corporations and partnerships are signed by the appropriate persons as indicated in the voting instructions on the proxy card, they will not be voted. - -------------------------------------------------------------------------------- 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 ------------------------ 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 the Trust, 605 Third Avenue, 41st Floor, New York, New York 10158-0180, and at any adjournments thereof (the "Meeting"). This Proxy Statement is first being mailed on or about August 16, 1999. A Notice of Special Meeting of Shareholders and a proxy card accompany this statement. 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 1 Meeting to permit further solicitation of proxies. Any such adjournment will 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 Investor Communication Services], professional proxy solicitors, which will be paid fees and expenses of up to approximately $______ for soliciting services. If votes are recorded by telephone, [ADP Investor Communication Services] 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 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, and the shares of each Fund over which NBMI or its affiliates, including Neuberger Berman, LLC, exercised voting control were as follows: NUMBER OF SHARES SHARES FOR WHICH NBMI AND ITS FUND OUTSTANDING AFFILIATES EXERCISE VOTING CONTROL* - ---- ---------------- ----------------------------------- Focus ________________ __________ shares or __% of the outstanding shares Genesis ________________ __________ shares or __% of the outstanding shares Guardian ________________ __________ shares or __% of the outstanding shares International ________________ __________ shares or __% of the outstanding shares Manhattan ________________ __________ shares or __% of the outstanding shares Millennium ________________ __________ shares or __% of the outstanding shares Partners ________________ __________ shares or __% of the outstanding shares * Certain of these shares are held by NBMI and its affiliates in various fiduciary capacities. For those shares over which NBMI and affiliated entities have voting control, an independent fiduciary has been retained to vote the shares in the best interest of the beneficial owners of those shares. 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: 3
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF THE FUND FUND BENEFICIAL OWNER BENEFICIAL OWNERSHIP* OWNED - ---- ---------------- -------------------- ----- Focus Genesis Guardian International Manhattan Millennium Partners
[Reflect amounts as to which the beneficial owner has sole voting power, shared voting power, sole investment power, or shared investment power] 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 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's shares, 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 of each Fund outstanding is entitled to one vote and each fractional share of each Fund outstanding 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 4 will be implemented by those Funds that approved it. With respect to any Funds that do not approve the Plan, the Board will consider what further steps to take. In order that your shares may be represented at the Meeting, you are requested to: - indicate your instructions on the proxy card; - date and sign the proxy card; - mail the proxy card promptly in the enclosed envelope, which requires no postage if mailed in the United States; and - allow sufficient time for the proxy card to be received on or before [5:00] p.m. on __________, 1999. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL [1-800-609-6903] TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. The principal office of the Trust is located at 605 Third Avenue, New York, New York 10158-0180. ----------------------------- 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 up to 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 5 limitations are in effect. 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. 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. While the Funds 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, NBMI would use any remaining portion of the fee for distribution and/or shareholder servicing activities. 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 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 communication expenses. (See Section 3.B. of the proposed Plan.) 6 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 their review at least quarterly. In addition, the Plan provides that it may not be amended to increase materially the costs that the 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 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 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, 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. THE TRUSTEES OF THE TRUST RECOMMEND THAT SHAREHOLDERS OF EACH FUND VOTE TO APPROVE THE DISTRIBUTION AND SHAREHOLDER SERVICES PLAN. ----------------------------- IMPACT OF THE PROPOSAL. The overall fees and expenses that a Fund shareholder would bear would be increased under the Proposal. If the Proposal is approved, each Fund's shares would incur distribution fees of .10% of average 7 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 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 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 these expense limitations are in effect, the adoption of the Distribution and Shareholder Services Plan will not increase these Funds' total annual operating expenses. 8 NEUBERGER BERMAN FOCUS TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE 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 These are deducted from fund assets, so you pay them indirectly assets, 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 0.97 EQUALS: TOTAL ANNUAL 1.07 operating expenses OPERATING EXPENSES * Neuberger Berman Management * Neuberger Berman Management reimburses certain expenses of the reimburses certain expenses of the fund so that its total annual fund so that its total annual operating expenses are not more than operating expenses are not more 0.10% above those of another than 0.20% above those of another Neuberger Berman fund that invests Neuberger Berman fund that invests in the same portfolio of in the same portfolio of securities. This arrangement does securities. This arrangement does not cover interest, taxes, brokerage not cover interest, taxes, commissions, and extraordinary brokerage commissions, and expenses. Under this arrangement, extraordinary expenses. Under which Neuberger Berman Management this arrangement, which Neuberger can terminate upon sixty days" Berman Management can terminate notice to the fund, total annual upon sixty days' notice to the operating expenses of the fund last fund, total annual operating year were limited to 0.94% of the expenses of the fund last year fund's average net assets. Actual would have been limited to 1.04% expenses this year may be higher or of the fund's average net assets. lower. The table includes costs Actual expenses this year may be paid by the fund and its share of higher or lower. The table master portfolio costs. includes costs paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE This example assumes that you invested This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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 ** Under the fund's expense ** Under the fund's expense reimbursement arrangement described reimbursement arrangement in the footnote above, your costs for described in the footnote above, the one-, three-, five- and ten-year your costs for the one-, three, periods would be $96, $300, $520, and five- and ten-year periods would $1155, respectively. be $106, $331, $574, and $1271, respectively.
9 NEUBERGER BERMAN GENESIS TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE Shareholder fees None Shareholder fees None Annual operating expenses (% of Annual operating expenses (% average net assets)* of average net assets)* These are deducted from fund These are deducted from fund assets, so you pay them assets, so you pay them indirectly. 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 1.19 EQUALS: TOTAL ANNUAL 1.29 operating expenses OPERATING EXPENSES * The figures in the table are based on * Neuberger Berman Management last year's expenses. Actual reimburses certain expenses of the expenses this year may be higher or fund so that its total annual lower. The table includes costs paid operating expenses are not more by the fund and its share of master than 0.20% above those of another 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 table includes costs paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE This example assumes that you invested This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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
10 NEUBERGER BERMAN GUARDIAN TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE Shareholder fees None Shareholder fees None Annual operating expenses (% of Annual operating expenses (% average net assets)* of average net assets)* These are deducted from fund These are deducted from fund assets, so you pay them assets, so you pay them indirectly. 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 0.87 EQUALS: TOTAL ANNUAL 0.97 operating expenses OPERATING EXPENSES * The figures in the table are based on * Neuberger Berman Management last year's expenses. Actual reimburses certain expenses of the expenses this year may be higher or fund so that its total annual lower. The table includes costs paid operating expenses are not more by the fund and its share of master than 0.20% above those of another 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 table includes costs paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE This example assumes that you invested This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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
11 NEUBERGER BERMAN INTERNATIONAL TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE Shareholder fees None Shareholder fees None Annual operating expenses (% of Annual operating expenses (% average net assets)* of average net assets)* These are deducted from fund These are deducted from fund assets, so you pay them assets, so you pay them indirectly. 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 1.92 EQUALS: TOTAL ANNUAL 2.02 operating expenses OPERATING EXPENSES * Neuberger Berman Management * Neuberger Berman Management reimburses certain expenses of the reimburses certain expenses of fund so that the total annual the fund so that the total operating expenses of the fund are annual operating expenses of the limited to 1.70% of average net fund are limited to 1.70% of assets. This arrangement can be average net assets, or to not terminated upon sixty days' notice more than 0.20% above the total to the fund. In addition, the annual operating expenses of arrangement does not cover interest, another Neuberger Berman fund taxes, brokerage commissions, and that invests in the same extraordinary expenses. The table portfolio of securities, includes costs paid by the fund and whichever is less. This its share of master portfolio arrangement can be terminated costs. upon sixty days' notice to the ** Other expenses are based on fund. In addition, the estimated amounts for the current arrangement does not cover fiscal year. 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 amounts for the fiscal year ended 8/31/99.
EXPENSE EXAMPLE EXPENSE EXAMPLE This example assumes that you invested This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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 *** Under the fund's expense *** Under the fund's expense reimbursement arrangement described reimbursement arrangement described in the footnote above, your costs in the footnote above, your costs for the one-, three-, five- and for the one-, three-, five- and ten-year periods would be $173, ten-year periods would be $173, $536, $923, and $2009, $536, $923, and $2009, respectively. respectively.
12 NEUBERGER BERMAN MANHATTAN TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE Shareholder fees None Shareholder fees None Annual operating expenses (% of Annual operating expenses (% average net assets)* of average net assets)* These are deducted from fund These are deducted from fund assets, so you pay them assets, so you pay them indirectly. 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 1.15 EQUALS: TOTAL ANNUAL 1.25 operating expenses OPERATING EXPENSES * Neuberger Berman Management * Neuberger Berman Management reimburses certain expenses of the reimburses certain expenses of fund so that its total annual the fund so that its total operating expenses are not more than annual operating expenses are 0.10% above those of another not more than 0.20% above those Neuberger Berman fund that invests of another Neuberger Berman fund in the same portfolio of that invests in the same securities. This arrangement does portfolio of securities. This not cover interest, taxes, brokerage arrangement does not cover commissions, and extraordinary interest, taxes, brokerage expenses. Under this arrangement, commissions, and extraordinary which Neuberger Berman Management expenses. Under this can terminate upon sixty days" arrangement, which Neuberger notice to the fund, total annual Berman Management can terminate operating expenses of the fund last upon sixty days' notice to the year were limited to 1.04% of the fund, total annual operating fund's average net assets. Actual expenses of the fund last year expenses this year may be higher or would have been limited to 1.14% lower. The table includes costs of the fund's average net paid by the fund and its share of assets. Actual expenses this master portfolio costs. 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 This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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 ** Under the fund's expense ** Under the fund's expense reimbursement arrangement described reimbursement arrangement in the footnote above, your costs for described in the footnote above, the one-, three-, five- and ten-year your costs for the one-, three-, periods would be $106, $331, $574, five- and ten-year periods would and $1271, respectively. be $116, $362, $628, and $1386, respectively.
13 NEUBERGER BERMAN MILLENNIUM TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE Shareholder fees None Shareholder fees None Annual operating expenses (% of Annual operating expenses (% average net assets)* of average net assets)* These are deducted from fund These are deducted from fund assets, so you pay them assets, so you pay them indirectly. 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 2.45 EQUALS: TOTAL ANNUAL 2.55 operating expenses OPERATING EXPENSES * Neuberger Berman Management * Neuberger Berman Management reimburses certain expenses of the reimburses certain expenses of fund so that the total annual the fund so that the total operating expenses of the fund are annual operating expenses of the limited to 1.75% of average net fund are limited to 1.75% of assets. This arrangement can be average net assets, or to not terminated upon sixty days' notice more than 0.20% above the total to the fund. In addition, the annual operating expenses of arrangement does not cover interest, another Neuberger Berman fund taxes, brokerage commissions, and that invests in the same extraordinary expenses. The table portfolio of securities, includes costs paid by the fund and whichever is less. This its share of master portfolio arrangement can be terminated costs. upon sixty days' notice to the ** Other expenses are based on fund. In addition, the estimated amounts for the current arrangement does not cover fiscal year. 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.
EXPENSE EXAMPLE EXPENSE EXAMPLE This example assumes that you invested This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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 *** Under the fund's expense *** Under the fund's expense reimbursement arrangement described reimbursement arrangement described in the footnote above, your costs for in the footnote above, your costs the one-and three-year periods would for the one-and three-year periods be $178 and $551, respectively. would be $178 and $551, respectively.
14 NEUBERGER BERMAN PARTNERS TRUST
CURRENT PROPOSED - ------ -------- FEE TABLE FEE TABLE 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 These are deducted from fund assets, so you pay them assets, so you pay them indirectly. 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 0.91 EQUALS: TOTAL ANNUAL 1.01 operating expenses OPERATING EXPENSES * Neuberger Berman Management * Neuberger Berman Management reimburses certain expenses of the reimburses certain expenses of fund so that its total annual the fund so that its total annual operating expenses are not more than operating expenses are not more 0.10% above those of another than 0.20% above those of another Neuberger Berman fund that invests Neuberger Berman fund that in the same portfolio of invests in the same portfolio of securities. This arrangement does securities. This arrangement not cover interest, taxes, brokerage does not cover interest, taxes, commissions, and extraordinary brokerage commissions, and expenses. Under this arrangement, extraordinary expenses. Under which Neuberger Berman Management this arrangement, which Neuberger can terminate upon sixty days" Berman Management can terminate notice to the fund, total annual upon sixty days' notice to the operating expenses of the fund last fund, total annual operating year were limited to 0.90% of the expenses of the fund last year fund's average net assets. Actual would have been limited to 1.00% expenses this year may be higher or of the fund's average net lower. The table includes costs assets. Actual expenses this paid by the fund and its share of year may be higher or lower. The master portfolio costs. table includes costs paid by the fund and its share of master portfolio costs.
EXPENSE EXAMPLE EXPENSE EXAMPLE This example assumes that you invested This example assumes that you $10,000 for the periods shown, that you invested $10,000 for the periods earned a hypothetical 5% total return shown, that you earned a each year, and that the fund's expenses hypothetical 5% total return each were those in the table above. Your year, and that the fund's expenses costs would be the same whether you sold were those in the table above. your shares or continued to hold them at Your costs would be the same the end of each period. Actual whether you sold your shares or performance and expenses may be higher continued to hold them at the end or lower. 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 ** Under the fund's expense ** Under the fund's expense reimbursement arrangement described reimbursement arrangement in the footnote above, your costs for described in the footnote above, the one-, three-, five- and ten-year your costs for the one-, three-, periods would be $92, $287, $498, and five- and ten-year periods would $1108, respectively. be $102, $318, $552, and $1225, respectively.
15 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 almost 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 higher 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. 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 16 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 relationship 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. 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 17 providers. In addition, each Fund's total operating expense ratio, taking into account the proposed distribution fee, will remain in line with the average of other comparable funds. 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, Neuberger Berman Millennium Trust and Neuberger Berman International Trust. The Board, including all of the Independent Trustees, has selected Ernst & Young LLP to continue to serve as the independent auditors of Neuberger Berman International 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. 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, 18 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 accountants' or auditors' 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 10158-0180, 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 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 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 10158-0180, 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 10158-0180, 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 August 16, 1999 19 APPENDIX A NEUBERGER BERMAN EQUITY TRUST 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 1 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. 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. 2 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. 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 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 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 10158-0180, 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 relating to the Trust and the Fund with 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 VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X] KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN FOCUS TRUST 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. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ---------------------------------------------------- -------------------------- Signature (Joint Owners) Date 2 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN GENESIS TRUST VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Approval of a Distribution and ___ ___ ___ Shareholder Services Plan to authorized 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. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ---------------------------------------------------- -------------------------- Signature (Joint Owners) Date 3 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN GUARDIAN TRUST VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Approval of a Distribution and ___ ___ ___ Shareholder Services Plan to authorized 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. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ---------------------------------------------------- -------------------------- Signature (Joint Owners) Date 4 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN INTERNATIONAL TRUST VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Approval of a Distribution and ___ ___ ___ Shareholder Services Plan to authorized 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 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. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ----------------------------------------------------- -------------------------- Signature (Joint Owners) Date 5 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN MANHATTAN TRUST VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Approval of a Distribution and ___ ___ ___ Shareholder Services Plan to authorized 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 Public Accountants. 3. To consider and vote upon such ___ ___ ___ other matters as may properly come before said meeting or any adjournments thereof. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ---------------------------------------------------- -------------------------- Signature (Joint Owners) Date 6 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN MILLENNIUM TRUST VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Approval of a Distribution and ___ ___ ___ Shareholder Services Plan to authorized 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 Public Accountants. 3. To consider and vote upon such ___ ___ ___ other matters as may properly come before said meeting or any adjournments thereof. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ---------------------------------------------------- -------------------------- Signature (Joint Owners) Date 7 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEUBERGER BERMAN EQUITY TRUST NEUBERGER BERMAN PARTNERS TRUST VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Approval of a Distribution and ___ ___ ___ Shareholder Services Plan to authorized 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. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL-FREE OR VISIT HTTP://WWW.PROXYVOTE.COM ON THE WORLD WIDE WEB. 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. - ---------------------------------------------------- -------------------------- Signature Date - ---------------------------------------------------- -------------------------- Signature (Joint Owners) Date 8 -----END PRIVACY-ENHANCED MESSAGE-----