UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to {section}240.14a-12
NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
| | |
| NEUBERGER | BERMAN |
|___________|________|
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
605 Third Avenue
New York, New York 10158-0180
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholder:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders ("Meeting")
of Neuberger Berman Real Estate Income Fund Inc. (the "Fund") will be held on
Friday, October 26, 2007, at 10:00 a.m. Eastern time at the offices of Neuberger
Berman, LLC, 605 Third Avenue, 42 (nd) Floor, New York, New York 10158-3698, for
the following purposes:
(1) To elect five Directors of the Fund to serve until the annual meeting
of stockholders or until their successors are elected and qualified as
outlined below; the terms for Class I, Class II and Class III Directors
expiring in 2009, 2010 and 2008, respectively:
a) One Class I Director, one Class II Director and one Class III
Director to be elected by the holders of the Fund's common stock
and preferred stock voting together as a single class; and
b) One Class II Director and one Class III Director to be elected by
the holders of the Fund's preferred stock, voting as a separate
class; and
(2) To consider and act upon any other business that may properly come
before the Meeting or any adjournments thereof.
The Board of Directors of the Fund has fixed the close of business on
October 5, 2007 as the record date (the "Record Date") for the determination of
stockholders of the Fund entitled to notice of, and to vote at, the Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS ARE
THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD(S) AS SOON AS
POSSIBLE IN THE MANNER DESCRIBED ON THE ENCLOSED PROXY CARD(S). INSTRUCTIONS FOR
THE PROPER EXECUTION OF PROXIES ARE SET FORTH INSIDE THIS PROXY STATEMENT,
FOLLOWING THIS NOTICE.
If you attend the Meeting, you may vote your shares in person. IF YOU DO
NOT EXPECT TO ATTEND THE MEETING, PLEASE REVIEW THE ENCLOSED MATERIALS AND
FOLLOW THE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY CARD(S). If you have
any questions
about the proposals or the voting instructions, please call the Fund at
877-461-1899. Any proposal submitted to a vote at the Meeting by anyone other
than the officers or directors of the Fund may be voted only in person or by
written proxy.
We will admit to the Meeting (1) all stockholders of record of the Fund as
of the Record Date; (2) persons holding proof of beneficial ownership at the
Record Date, such as a letter or account statement from a broker; (3) persons
who have been granted proxies; and (4) such other persons that we, in our sole
discretion, may elect to admit. ALL PERSONS WISHING TO BE ADMITTED TO THE
MEETING MUST PRESENT PHOTO IDENTIFICATION. IF YOU PLAN TO ATTEND THE MEETING,
PLEASE CONTACT US AT 877-461-1899.
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.
By order of the Board of Directors,
/s/ Claudia A. Brandon
Claudia A. Brandon
Secretary
Dated: October 12, 2007
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INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card
2. Joint Accounts: Any party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the
proxy card.
3. Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:
REGISTRATION VALID SIGNATURE
_______________________________________________________________________________
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp.
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(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78 Jane B. Doe
CUSTODIAN OR ESTATE ACCOUNTS
(1) John B. Smith,
Cust. f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
_______________________________________________________________________________
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YOUR VOTE IS IMPORTANT NO MATTER HOW MANY
SHARES OF STOCK YOU OWN.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY.
IF YOU OWN SHARES OF BOTH COMMON STOCK AND PREFERRED STOCK OF THE FUND,
THERE WILL BE MORE THAN ONE PROXY CARD ENCLOSED. PLEASE FILL OUT AND RETURN EACH
PROXY CARD.
STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY STOCKHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO REVIEW THE ENCLOSED
MATERIALS AND FOLLOW THE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY CARD(S).
TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK
YOUR COOPERATION IN VOTING YOUR PROXY PROMPTLY, NO MATTER HOW LARGE OR SMALL
YOUR HOLDINGS MAY BE.
This page is intentionally left blank
| | |
| NEUBERGER | BERMAN |
|___________|________|
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
605 THIRD AVENUE
NEW YORK, NEW YORK 10158-0180
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
October 26, 2007
INTRODUCTION
This proxy statement ("Proxy Statement") is furnished to the stockholders
of Neuberger Berman Real Estate Income Fund Inc. (the "Fund") by the Fund's
Board of Directors in connection with the solicitation of stockholder votes by
proxy to be voted at the Annual Meeting of Stockholders ("Meeting") to be held
on Friday, October 26, 2007, at 10:00 a.m. Eastern time at the offices of
Neuberger Berman, LLC ("Neuberger Berman"), 605 Third Avenue, 42 (nd) Floor, New
York, New York 10158-3698, or any adjournments thereof. The matters to be acted
upon at the Meeting are set forth in the accompanying Notice of Annual Meeting.
SOLICITATION OF PROXIES AND VOTING INFORMATION
The Board of Directors of the Fund (the "Board") is soliciting votes from
stockholders of the Fund with respect to the election of directors as described
in this Proxy Statement. The Fund expects to mail the accompanying Notice of
Annual Meeting, this Proxy Statement and form of proxy to stockholders on or
about October 12, 2007. Additional information regarding the solicitation of
proxies is included at the end of this Proxy Statement under "General
Information."
The Board has set the close of business on October 5, 2007, as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting ("Record Date"). On that date, the Fund had 4,157,116.626 shares of
common stock ("Common Shares") and 1,680 shares of preferred stock ("Preferred
Shares") outstanding and entitled to vote.
We will admit to the Meeting (1) all stockholders of record of the Fund as
of the Record Date; (2) persons holding proof of beneficial ownership at the
Record Date such as a letter or account statement from a broker; (3) persons who
have been granted proxies; and (4) such other persons that we, in our sole
discretion, may elect to admit. If you do not expect to attend the Meeting,
please sign and promptly return the proxy card(s) in the enclosed self-addressed
envelope or if your shares are held in "street name" you may also vote by
telephone or the internet
as indicated on the proxy card(s). If the accompanying proxy card(s) is properly
executed and returned in time to be voted at the Meeting, the shares represented
by that proxy card(s) will be voted in accordance with the instructions provided
on the proxy card(s). If no choices are specified, the shares will be voted FOR
the election of the nominees for directors listed in this Proxy Statement and
FOR or AGAINST any other matters acted upon at the Meeting in the discretion of
the persons named as proxies. Additional information regarding outstanding
shares, voting and attending the Meeting is included at the end of this Proxy
Statement under "Voting Information." All persons wishing to be admitted to the
Meeting must present photo identification. If you plan to attend the Meeting,
please contact the Fund at 877-461-1899.
Holders of the Fund's outstanding Common Shares and Preferred Shares
(together, "Shares") will vote together as a single class to elect one Class I
Director, one Class II Director and one Class III Director. Holders of the
Fund's Preferred Shares will vote as a separate class to elect one Class II
Director and one Class III Director. As to any other business that may properly
come before the Meeting, holders of Common Shares and Preferred Shares may vote
together as a single class or separately, depending on the requirements of the
Investment Company Act of 1940, as amended ("1940 Act"), the Maryland General
Corporation Law, as amended ("MGCL"), and the Fund's charter with respect to
said item of business. Each full Share is entitled to one vote and each
fractional Share is entitled to a proportionate part of one vote.
Solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card(s). Supplementary solicitations may be made by mail,
telephone and electronic transmission or in person by regular employees of
Neuberger Berman Management Inc. ("NB Management"), affiliates of NB Management
or other representatives of the Fund. NB Management serves as the Fund's
investment manager and administrator. All expenses in connection with preparing
this Proxy Statement and its enclosures, and additional solicitation expenses
including reimbursement of brokerage firms and others for their expenses in
forwarding proxy solicitation material to the beneficial owners of shares, will
be borne by the Fund.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
INTRODUCTION
The Board is divided into three classes (Class I, Class II and Class III).
The present size of the Board is sixteen directors. At the Meeting, stockholders
of the Fund will be asked to vote on the election of one nominee to the Board as
a Class I Director, two nominees to the Board as Class II Directors, and two
nominees to the Board as Class III Directors, with two of these nominees being
voted upon only by holders of Preferred Shares. Only five nominees are named
because, as
2
described below, it is anticipated that the Board will be reduced in size upon
the resignation of the current Directors. Proxies cannot be voted for a greater
number of persons than the nominees named. The nominee for Class I Director is
Joel W. Looney, the nominees for Class II Directors are Richard I. Barr and John
S. Horejsi and the nominees for Class III Directors are Dr. Dean L. Jacobson and
Susan L. Ciciora, each, as discussed below, proposed by the Lola Brown Trust No.
1B (each a "Trust Nominee" and, collectively, the "Trust Nominees"). Each Trust
Nominee has consented to be named in this Proxy Statement and has indicated his
or her willingness to serve as a Director of the Fund if elected. Susan L.
Ciciora and John Horejsi, the daughter and son of Stewart R. Horejsi, will be
"interested persons" with respect to the Fund as such term is defined in the
1940 Act. Each Trust Nominee presently serves as a director for the First
Financial Fund, Inc. ("FF"), Boulder Total Return Fund, Inc. ("BTF") and Boulder
Growth & Income Fund, Inc. ("BIF" and, together with FF and BTF, the "Boulder
Funds"), which are effectively controlled by the Lola Brown Trust No. 1B (the
"Trust") and other trusts associated with the Trust and the family of Stewart R.
Horejsi. The Trust owns approximately 70.6% of the outstanding Common Shares of
the Fund and intends to vote all of its shares "FOR" the election of each Trust
Nominee.
Holders of the Fund's Preferred Shares are entitled, as a class, to the
exclusion of the holders of all other classes of stock of the Fund, to elect two
Directors of the Fund (regardless of the total number of Directors serving on
the Fund's Board of Directors). The two Trust Nominees to be elected by holders
of Preferred Shares are Richard I. Barr, a Class II Trust Nominee, and Susan L.
Ciciora, a Class III Trust Nominee.
BACKGROUND OF THE MEETING
In 2004, the Trust instituted a tender offer for the Common Shares of the
Fund. As a defensive measure, the Fund initiated legal action against the Trust
and other defendants in the United States District Court for the District of
Maryland styled Neuberger Berman Real Estate Income Fund Inc. v. Lola Brown
Trust No. 1B, et al., Civ. No. 04-3056 (AMD) (the "Litigation"). In May 2007,
the court issued a decision in the Litigation and the Trust and the Fund entered
into settlement discussions. In August 2007, the Fund and Trust entered into a
settlement agreement (the "Settlement Agreement"), pursuant to which the Trust
would amend its tender offer to be for 100% of the outstanding Common Shares at
99% of the net asset value per Common Share at the close of business on the day
the tender offer was completed (the "Revised Tender Offer"). Under the terms of
the Settlement Agreement, if the Trust was able to complete the Revised Tender
Offer, the Board would call a meeting of stockholders to vote on the election of
three nominees proposed by the Trust. Nevertheless, the parties have agreed to
call the Meeting to vote on five nominees proposed by the Trust. Under the
Settlement Agreement, the meeting would be held as promptly as practicable
following the conclusion of the Revised Tender Offer. The Revised Tender Offer
was successfully concluded on September 14, 2007, at which time approximately
59% of the Common Shares were tendered to the Trust. As a result
3
of the Revised Tender Offer, together with the Shares it held prior to the
Revised Tender Offer, the Trust now owns 70.6% of the Common Shares.
Accordingly, the Meeting is being called pursuant to the terms of the Settlement
Agreement for the purpose of proposing the Trust Nominees for election to the
Board.
Under the terms of the Settlement Agreement, upon election of Trust
Nominees at the Meeting, (i) all of the other then-incumbent officers and Board
members will resign, (ii) NB Management will resign as administrator to the
Fund, and (iii) NB Management and Neuberger Berman (collectively, the "NB
Affiliates") will resign as investment adviser and sub-adviser to the Fund,
respectively.
HOW THE FUND WILL LOOK AFTER THE MEETING
Under the terms of the Settlement Agreement, certain actions are required
to be taken after the Meeting that are likely to affect the manner in which the
Fund will be managed in the future. As mentioned above, upon election of Trust
Nominees, all of the incumbent officers and directors and the NB Affiliates will
resign. At a special meeting of the Board to be held on the same day as the
Meeting, the Fund has been advised that persons affiliated with the Trust are
expected to make a number of substantive recommendations to the newly elected
Trust Nominees (the "New Board"), including, but not limited to, the following:
1. NAME CHANGE. Under the Settlement Agreement, after the election of the
Trust Nominees, the Fund is obligated to change its name such that it
does not contain the term "Neuberger Berman." Under Maryland law, the
Board is authorized to change the name of the Fund without stockholder
approval. The Fund is likely to change its current New York Stock
Exchange ("NYSE") ticker symbol, NRL, at some point as well.
2. REDUCTION IN SIZE OF BOARD AND APPOINTMENT OF DIRECTORS. The present
size of the Board is 16 members. The New Board will be asked to reduce
the size of the Board to five members.
3. APPOINTMENT OF INTERIM ADVISERS. The New Board will be asked to consider
Boulder Investment Advisers, LLC and Stewart Investment Advisers (also
known as Stewart West Indies Trading Company Ltd.) (the "Boulder
Advisers") as interim advisers to the Fund. The Boulder Advisers are
presently the advisers to BTF and BIF. Under the 1940 Act, an interim
advisory contract may not have a duration of greater than 150 days.
Accordingly, the Boulder Advisers must be approved by stockholders
within 150 days of their appointment by the New Board.
4. APPOINTMENT OF NEW ADMINISTRATOR. The New Board will be asked to
consider Fund Administrative Services, LLC ("FAS"), an affiliate of the
Trust, and State Street Bank and Trust Company as the co-administrators
to the Fund (the "Co-Administrators"). The Co-Administrators are co-
administrators to the Boulder Funds.
4
5. CHANGE IN INVESTMENT OBJECTIVE AND CONCENTRATION POLICY. The New Board
will be asked to change the Fund's present investment objective and
concentration policy so that it may invest in a much broader range of
companies. Under the 1940 Act, any such change will have to be approved
by stockholders before it is implemented.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
STRUCTURE OF THE BOARD
The Board is divided into three classes, designated as Class I, Class II
and Class III, for purposes of election. One class is normally elected at each
annual meeting of stockholders and directors in each class serve for a
three-year term. Normally, because the Board is divided into classes for
purposes of election, only those directors in any one class may be changed in
any one year, and it would require two years or more to change a majority of the
Board. However, the Fund's Bylaws provide that, upon the death, resignation or
removal of a director, any vacancy may be filled by a majority of the directors
then in office. If the stockholders of any class of the Fund's capital stock are
entitled separately to elect one or more directors, a majority of the remaining
directors elected by that class (if any) may fill any vacancy among the number
of directors elected by that class. The current Board consists of sixteen
persons, none of whom are candidates for election. The current Class II
Directors have not stood for re-election. Under the terms of the Settlement
Agreement, the remaining current Directors will resign effective upon the
election of Trust Nominees.
The Fund's current Board met 13 times during the fiscal year ended October
31, 2006. Each current Director who was a Director during fiscal year 2006
attended at least 75% of the total number of meetings of the Board and of any
committee of which he or she was a member. Information regarding the Fund's
current corporate governance structure as well as other information about the
current Board appears in Appendix A to this Proxy Statement. Information in this
Proxy Statement regarding the Trust Nominees, potential officers, and potential
changes in structure has been provided by the Trust and not separately verified
by the Fund.
INFORMATION REGARDING THE TRUST NOMINEES
The following tables set forth certain information regarding each Trust
Nominee provided by the Trust. In the unanticipated event that any of the Trust
Nominees should be unable to serve, the persons named in the accompanying proxy
card(s) have discretionary authority to vote in favor of a substitute nominee or
nominees as may be proposed by the Board. Unless otherwise noted, each Trust
Nominee has engaged in the principal occupation listed in the following table
for five years or more. The business address of each listed person is 2344
Spruce Street, Suite A, Boulder, Colorado 80302.
5
________________________________________________________________________________________________________________
NUMBER OF
PORTFOLIOS IN
THE BOULDER
POSITION, LENGTH OF PRINCIPAL OCCUPATION(S) AND FUND COMPLEX
TERM SERVED, AND OTHER DIRECTORSHIPS HELD OVERSEEN BY
NAME, AGE TERM OF OFFICE DURING THE PAST FIVE YEARS NOMINEE
________________________________________________________________________________________________________________
Name of Trust Nominee for Independent Fund Director
________________________________________________________________________________________________________________
Richard I. Barr (69) Candidate for Retired. Manager, 3
Election as a Advantage Sales and
Class II Director Marketing, Inc. (food
brokerage), 1963-2001;
Director, BIF since 2002;
Director of BTF since 1999
and Chairman of the Board
since 2003; Director of FF
since 2001.
Dr. Dean L. Jacobson Candidate for Founder and President of 3
(68) Election as a Forensic Engineering, Inc.
Class III Director (engineering investigations);
Professor Emeritus at
Arizona State University,
since 1997; Professor of
Engineering at Arizona
State University, prior to
1997; Director of BIF since
2006; Director of BTF since
2004; Director of FF since
2003.
Joel W. Looney (45) Candidate for Partner, Financial 3
Election as a Management Group, LLC
Class I Director (investment adviser), since
July 1999; CFO, Bethany
College, 1995-1999;
Director, BIF since 2002
and Chairman of the Board
since 2004; Director of BTF,
since 2001; Director and
Chairman of the Board of
FF, since 2003.
________________________________________________________________________________________________________________
Name of Trust Nominee for Interested Director *
________________________________________________________________________________________________________________
Susan L. Ciciora*(42) Candidate for Trustee of the Trust and 3
Election as a Ernest Horejsi Trust;
Class III Director Director, Horejsi Charitable
Foundation, Inc. (private
charitable foundation), since
1997; Director of BIF, since
2006; Director of BTF, since
2001; and Director of FF,
since 2003.
________________________________________________________________________________________________________________
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6
________________________________________________________________________________________________________________
NUMBER OF
PORTFOLIOS IN
THE BOULDER
POSITION, LENGTH OF PRINCIPAL OCCUPATION(S) AND FUND COMPLEX
TERM SERVED, AND OTHER DIRECTORSHIPS HELD OVERSEEN BY
NAME, AGE TERM OF OFFICE DURING THE PAST FIVE YEARS NOMINEE
________________________________________________________________________________________________________________
Name of Trust Nominee for Interested Director *
________________________________________________________________________________________________________________
John S. Horejsi*(39) Candidate for Director, Horejsi Charitable 3
Election as a Foundation (private
Class II Director charitable foundation), since
1997; Director of BIF, since
2004; Director of BTF, since
2006; and Director of FF,
since 2006.
________________________________________________________________________________________________________________
* Mr. Horejsi and Ms. Ciciora will become "interested persons" of the Fund by virtue of their relationship
with Stewart Horejsi, an employee of BIA and SIA.
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VOTE REQUIRED
Dr. Dean L. Jacobson, Joel W. Looney and John S. Horejsi each must be
elected by the holders of a plurality of the votes cast of the Fund's
outstanding Common Shares and Preferred Shares, voting together. Richard I. Barr
and Susan L. Ciciora must be elected by holders of a plurality of the votes cast
of the Fund's outstanding Preferred Shares, voting as a separate class. Unless a
contrary specification is made on executed proxy card(s), shares will be voted
FOR each Nominee.
COMMITTEES OF THE BOARDS OF THE BOULDER FUNDS
If the Fund's stockholders elect the Trust Nominees, the Trust has
indicated that it is expected that the New Board will adopt a governance
structure similar to that of the Boulder Funds. The Boulder Funds have
established two standing committees, which are described below.
AUDIT COMMITTEE. The purpose of each Boulder Fund's Audit Committee is to
assist with Board oversight of the integrity of the Fund's financial statements,
the Fund's compliance with legal and regulatory requirements, the independent
auditor's qualifications and independence and the performance of the Fund's
independent auditors. Each Audit Committee reviews the scope and results of its
respective Fund's annual audit with the Fund's independent accountants and
recommends the engagement of such accountants. Management, however, is
responsible for the preparation, presentation and integrity of each Boulder
Fund's financial statements, and the independent accountants are responsible for
planning and carrying out proper audits and reviews. The Board of Directors of
each Boulder Fund adopted a written charter for the Audit Committee, which was
most recently amended on January 23, 2004. A copy of one of such Audit Committee
Charters is attached as Appendix B.
7
The Audit Committees of the Boulder Funds are composed entirely of the
Funds' independent directors; currently their members are Dr. Jacobson and
Messrs. Looney and Barr. The Board of Directors of each Boulder Fund has
determined that Joel Looney qualifies as an "audit committee financial expert,"
as defined under the Securities and Exchange Commission's Regulation S-K, Item
401(h). Each Audit Committee is in compliance with applicable listing
requirements for closed-end fund audit committees, including the requirement
that all members of the audit committee be "financially literate" and that at
least one member of the audit committee have "accounting or related financial
management expertise," as determined by the Board. The Audit Committee is
required to conduct its operations in accordance with applicable requirements of
the Sarbanes-Oxley Act, and the members of the Audit Committee are subject to
the fiduciary duty to exercise reasonable care in carrying out their duties.
Each member of the Audit Committee is independent, as that term is defined by
the NYSE Listing Standards.
NOMINATING COMMITTEE. The Board of Directors of each Boulder Fund has a
Nominating Committee composed of the Fund's independent Directors, consisting of
Dr. Jacobson and Messrs. Looney and Barr, which is responsible for considering
candidates for election to the Board in the event a position is vacated or
created. Each member of each Nominating Committee is independent, as that term
is defined by the NYSE Listing Standards. The Board of Directors of each Boulder
Fund has adopted a charter for the Nominating Committee that is available on the
following website, www.boulderfunds.net.
The Nominating Committees for the Boulder Funds do not have a formal
process for identifying candidates. Each Nominating Committee takes into
consideration such factors as it deems appropriate when nominating candidates.
These factors may include judgment, skill, diversity, experience with investment
companies and other organizations of comparable purpose, complexity, size and
subject to similar legal restrictions and oversight, the interplay of the
candidate's experience with the experience of other Board members, and the
extent to which the candidate would be a desirable addition to the Board and any
committees thereof.
Each Nominating Committee will consider all qualified candidates in the
same manner. The Nominating Committee of each Boulder Fund may modify its
policies and procedures for director nominees and recommendations in response to
changes in the Fund's circumstances, and as applicable legal or listing
standards change.
The Nominating Committee would consider director candidates recommended by
stockholders (if a vacancy were to exist) and submitted in accordance with
applicable law and procedures as described in this Proxy Statement. Such
recommendations should be forwarded to the Secretary of the Fund.
The Boulder Funds do not have compensation committees.
8
DIRECTOR ATTENDANCE AT STOCKHOLDER MEETINGS
The Fund does not have a policy on Director attendance at the annual or
special meetings of stockholders. One Board member attended the 2007 special
meeting of stockholders. The Trust has indicated that none of the Trust Nominees
intend to attend the Meeting.
OWNERSHIP OF SECURITIES BY TRUST NOMINEES
Set forth below is the dollar range of equity securities owned by each
Trust Nominee as reported by the Boulder Funds.
AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL REGISTERED
DOLLAR RANGE OF EQUITY INVESTMENT COMPANIES OVERSEEN BY
SECURITIES OWNED IN THE DIRECTOR IN THE BOULDER FUND FAMILY
NAME OF DIRECTOR FUND OF INVESTMENT COMPANIES
_________________________________________________________________________________________
Trust Nominees for Independent Fund Director
_________________________________________________________________________________________
Joel W. Looney None Over $100,000
Dr. Dean L. Jacobson None Over $100,000
Richard I. Barr None $50,001 - $100,000
_________________________________________________________________________________________
Trust Nominees for Directors who are "Interested Persons"
_________________________________________________________________________________________
Susan L. Ciciora None Over $100,000
John S. Horejsi None Over $100,000
_________________________________________________________________________________________
* Valuation as of August 10, 2007.
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INDEPENDENT FUND DIRECTORS' OWNERSHIP OF SECURITIES
As of October 5, 2007, no current Independent Fund Director or Trust
Nominee for Independent Fund Director (or his/her immediate family members)
owned securities of NB Management or Neuberger Berman or securities in an entity
controlling, controlled by or under common control with NB Management or
Neuberger Berman (not including registered investment companies). As of October
5, 2007, no Trust Nominee owned securities of BIA or SIA or securities in an
entity controlling, controlled by or under common control with BIA or SIA.
OFFICERS OF THE FUND
Officers of the Fund are appointed by the Directors and serve at the
pleasure of the Board. If the Trust Nominees are elected, the Fund has been
advised that persons affiliated with the Trust are expected to recommend that
the following individuals be appointed by the New Board. Except as otherwise
noted, each individual has held the positions shown in the table below for at
least the last five years. The business address of each listed person is 2344
Spruce Street, Suite A, Boulder, CO 80302.
9
_______________________________________________________________________________________________
POSITION AND LENGTH OF
NAME AND AGE TIME SERVED PRINCIPAL OCCUPATION(S)
_______________________________________________________________________________________________
Stephen C. Miller (55) President (proposed) President of and General Counsel for
Boulder Investment Advisers, LLC
("BIA"), since 1999; Manager, FAS,
since 1999; Vice President, Stewart
Investment Advisers ("SIA"), since
1999; Director and President of BTF
since 1999 (resigned as Director in
2004); Director and President of BIF,
since 2002 (resigned as Director
in 2004); Director, Chairman and
President of FF since 2003 (resigned
as Director and Chairman in 2004);
Chief Compliance Officer for BIA,
SIA, BTF and BIF from October 2004
to August 2007; officer of various
other Horejsi Affiliates; Of Counsel,
Krassa & Miller, LLC, since 1991.
_______________________________________________________________________________________________
Carl D. Johns (44) Chief Financial Officer, Vice President and Treasurer of
Chief Accounting Officer, BIA and Assistant Manager of FAS,
Vice President and since 1999; Vice President, Chief
Treasurer (proposed) Financial Officer, Chief Accounting
Officer and Treasurer of BTF since
1999; Vice President, Chief Financial
Officer, Chief Accounting Officer
and Treasurer of BIF since 2002;
Vice President, Chief Financial
Officer, Chief Accounting Officer
and Treasurer of FF since 2003.
_______________________________________________________________________________________________
Stephanie Kelley (50) Secretary (proposed) Secretary of BTF, since 2000;
Secretary of BIF, since 2002;
Secretary of FF, since 2003; Assistant
Secretary and Assistant Treasurer of
various Horejsi Affiliates; employee
of FAS, since 1999.
_______________________________________________________________________________________________
Nicole L. Murphey (30) Assistant Secretary Assistant Secretary of BTF, since 2000;
(proposed) Assistant Secretary of BIF, since 2002;
Assistant Secretary of FF since 2003;
employee of FAS, since 1999.
_______________________________________________________________________________________________
Joel L. Terwilliger (38) Chief Compliance Officer Associate General Counsel for BIA,
(proposed) SIA, FAS, BIF, BTF, and FF, since
2006; Chief Compliance Officer
of BIF, BTF, and FF, since August
2007; Senior Associate/Managing
Counsel, Great-West Life & Annuity
Insurance Company, 2002-2006.
_______________________________________________________________________________________________
|
10
COMPENSATION OF DIRECTORS
If the Trust Nominees are elected, the Fund has been advised that
affiliates of the Trust would support as compensation to the Trust Nominees the
same compensation that they receive for serving as directors of BIF. Each
director of BIF who is not a director, officer, or employee of the Boulder
Advisers, FAS, or any of their affiliates, receives a fee of $8,000 per annum
plus $3,000 for each in person meeting of the Board of Directors and $500 for
each telephonic meeting of the Board. In addition, the Chairman of the Board and
the Chairman of the Audit Committee of each Boulder Fund receive $1,000 per
meeting and each member of the Audit Committee receives $500 per meeting. Each
independent director of the Boulder Funds is reimbursed for travel and
out-of-pocket expenses associated with attending Board and Committee meetings.
No person other than the independent directors currently receives compensation
from the Boulder Funds for acting as a Director or officer.
The following table sets forth information concerning the compensation of
the directors of the Boulder Funds for the fiscal year ended March 31, 2007. The
Boulder Funds do not have any pension or retirement plan for their directors.
TABLE OF COMPENSATION
TOTAL COMPENSATION FROM REGISTERED INVESTMENT
COMPANIES IN THE BOULDER FUND COMPLEX PAID TO
NAME AND POSITION DIRECTORS FOR YEAR ENDED 3/31/07
________________________________________________________________________________
Independent Fund Directors
________________________________________________________________________________
Dean Jacobson $84,000
Director
Richard I. Barr $97,000
Director and Chairman of
the Board
Joel W. Looney $71,826
Director
________________________________________________________________________________
Directors who are "Interested Persons"
________________________________________________________________________________
Susan L. Ciciora $ 0
Director
John S. Horejsi
Director $ 0
________________________________________________________________________________
|
INFORMATION ON THE FUND'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP ("Ernst & Young") audited the financial statements for
the fiscal year ended October 31, 2006 for the Fund. Ernst & Young, 200
Clarendon Street, Boston, MA 02116, serves as the independent registered public
accounting firm for the Fund and provides audit services, tax compliance
services and assistance and consultation in connection with the review of the
Fund's filings with the SEC. In the opinion of the Audit Committee, the services
provided by Ernst & Young are
11
compatible with maintaining the independence of the Fund's independent
registered public accounting firm. The Board of Directors of the Fund has
selected Ernst & Young as the independent registered public accounting firm for
the Fund for the fiscal year ending October 31, 2007. Ernst & Young has served
as the Fund's independent registered public accounting firm since the Fund's
inception. Ernst & Young has informed the Fund that it has no material direct or
indirect financial interest in the Fund.
Representatives of Ernst & Young are not expected to be present at 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.
AUDIT FEES
The aggregate fees billed by Ernst & Young for the audit of the annual
financial statements of the Fund for the fiscal years ended October 31, 2006 and
October 31, 2005 and for the review of the financial statements included in the
Fund's regulatory filings during such years were $33,500 and $31,250,
respectively.
AUDIT-RELATED FEES
The aggregate audit-related fees billed by Ernst & Young for the fiscal
years ended October 31, 2006 and October 31, 2005, for performing agreed-upon
procedures for the Preferred Shares of the Fund, were $6,250 and $6,000,
respectively.
TAX FEES
The aggregate fees billed by Ernst & Young for the fiscal years ended
October 31, 2006 and October 31, 2005, for tax compliance, tax advice, and tax
planning, were $9,500 and $8,700, respectively.
ALL OTHER FEES
Aggregate fees billed by Ernst & Young during the fiscal years ended
October 31, 2006 and October 31, 2005, for other services provided to the Fund,
were $0 and $0, respectively.
Aggregate fees billed by Ernst & Young during the fiscal years ended
October 31, 2006 and October 31, 2005, for non-audit services to the Fund, NB
Management and Neuberger Berman, were $141,750 and $175,350, respectively.
The Audit Committee has considered these fees and the nature of the
services rendered, and has concluded that they are compatible with maintaining
the independence of Ernst & Young. The Audit Committee did not approve any of
the services described above pursuant to the "de minimis exceptions" set forth
in Rule 2-01(c)(7)(i)(C) and Rule 2-01(c)(7)(ii) of Regulation S-X. Ernst &
Young did not provide any audit-related services, tax services or other
non-audit services to NB Management or Neuberger Berman that the Audit Committee
was required to approve pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.
12
GENERAL INFORMATION
MARYLAND CONTROL SHARE ACQUISITION ACT
In September 2004, the Fund opted into the Maryland Control Share
Acquisition Act ("MCSAA"). In the opinion issued in the Litigation on May 8,
2007 (the "Opinion"), the court upheld the Fund's reliance on the MCSAA.
Generally, the MCSAA provides that holders of "control shares" of a Maryland
corporation acquired in a control share acquisition may not vote those shares
except to the extent approved by stockholders at a special meeting by a vote of
two-thirds of the votes entitled to be cast on the matter (excluding shares
owned by the acquiror and by officers or directors who are employees of the
corporation). "Control shares" are voting shares of stock which, if aggregated
with all other shares of stock owned by the acquiror or in respect of which the
acquiror is able to exercise or direct the exercise of voting power (except
solely by virtue of a revocable proxy), would entitle the acquiror to exercise
voting power in electing directors within certain statutorily-defined ranges
(one-tenth but less than one-third, one-third but less than a majority, and more
than a majority of the voting power). Accordingly, except as provided in the
Opinion and as further described herein, the Fund will not deem any votes
submitted by or on behalf of any Person, as defined in the MCSAA, with respect
to Shares in excess of ten percent of the outstanding Shares, as being voted on
any proposal properly before the Meeting.
In connection with the Settlement Agreement (i) the Fund amended the Rights
Agreement between the Fund and The Bank of New York, as Rights Agent, dated as
of July 16, 2007 (the "Rights Plan"), so that the Revised Tender Offer would not
trigger the separation or exercise of the rights (as described in the Rights
Plan) or any adverse event under the Rights Plan (namely that the Trust would
not be deemed to be an "Acquiring Person" (as defined in the Rights Plan) solely
by virtue of the Revised Tender Offer) and (ii) the Board amended the Fund's
bylaws in accordance with Section 3-702(b) of the MCSAA so that the provisions
of the MCSAA would not apply to the voting rights of the shares of common stock
that were acquired by the Trust. Accordingly, all of the Shares owned by the
Trust as described above may be voted by the Trust at the Meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended
("1934 Act"), Section 30(h) of the 1940 Act and Securities and Exchange
Commission ("SEC") regulations thereunder, certain of the Fund's officers and
the Fund's Directors and portfolio managers, persons owning more than 10% of the
Fund's common stock and certain officers and directors of the Fund's investment
manager and sub-adviser are required to report their transactions in the Fund's
stock to the SEC and the NYSE. Based solely on the review by the Fund of the
copies of Forms 3, 4 and 5 under the 1934 Act received by the Fund during its
fiscal year ended October 31, 2006, the Fund does not know of any such person
who failed to report these transactions on a timely basis.
13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Shares as of the Record Date by each person who may be deemed
by the Fund to beneficially own 5% or more of the Common Stock.
NUMBER OF
COMMON NUMBER OF COMMON
SHARES DIRECTLY SHARES BENEFICIALLY PERCENTAGE BENEFICIALLY
NAME OF OWNER * OWNED OWNED OWNED
_____________________________________________________________________________________________________
Lola Brown Trust No. 1B * 2,935,913 2,935,913 70.6%
_____________________________________________________________________________________________________
* Based on Amendment No. 16 to Schedule TO filed by the Trust on September 17, 2007.
|
In addition, the Directors and officers of the Fund, in the aggregate,
owned less than 1% of each class of the Fund's outstanding Shares as of the
Record Date.
OTHER MATTERS TO COME BEFORE THE MEETING
No business, other than as set forth above, is expected to come before the
Meeting. Should any other matters requiring a vote of stockholders properly come
before the Meeting, the persons named in the enclosed proxy will vote thereon in
accordance with their best judgment in the interests of the Fund.
REPORTS TO STOCKHOLDERS
The Fund's Annual Report to stockholders for the fiscal year ended October
31, 2006, which contains the Fund's audited financial statements, and the Fund's
Semiannual Report for the fiscal period ended April 30, 2007, have been mailed
to stockholders and may be obtained without charge from the Fund's website at
www.nb.com, by writing NB Management at 605 Third Avenue, 2 (nd) Floor, New
York, New York 10158-0180 or by calling the Fund at 877-461-1899.
STOCKHOLDER PROPOSALS
The Fund's Bylaws require stockholders wishing to nominate Directors or
make proposals to be voted on at the Fund's annual meeting of stockholders to
provide notice of the nominations or proposals in writing delivered or mailed by
first class United States mail, postage prepaid, to the Secretary of the Fund.
The Secretary must receive any nomination or proposal sought to be considered at
the annual meeting of stockholders in 2008 no later than January 15, 2008 and
such nomination or proposal must satisfy the other requirements of the federal
securities laws. If the Trust Nominees are elected, such nomination or proposal
should be sent to the Fund's Secretary at 2344 Spruce Street, Suite A, Boulder,
CO 80302. Timely submission of a nomination or proposal does not guarantee that
such nomination or proposal will be included. The chairperson of the Meeting may
refuse to acknowledge a nomination or other proposal by a stockholder that is
not made in the manner described above.
14
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Fund, c/o its Secretary, at 605 Third Avenue New York,
New York 10158, whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of the Proxy
Statement you wish to receive in order to supply copies to such beneficial
owners of shares.
ADVISER AND ADMINISTRATOR
NB Management currently serves as the investment manager and administrator
to the Fund. NB Management is located at 605 Third Avenue, New York, New York
10158-0180. NB Management currently retains Neuberger Berman, 605 Third Avenue,
New York, New York 10158-3698, as sub-adviser with respect to the Fund.
Neuberger Berman and NB Management are indirect wholly owned subsidiaries of
Lehman Brothers Holdings Inc., a publicly held company. As discussed above, if
the Trust Nominees are elected, NB Management and Neuberger Berman will resign
effective as of the date of the Meeting.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD
Stockholders currently may send communications that they would like to
direct to the Board or to an individual director of the Fund to the attention of
Chamaine Williams, Chief Compliance Officer of the Fund, Neuberger Berman Funds,
605 Third Avenue, 21 (st) Floor, New York, NY, 10158-0180. The Board has
directed Ms. Williams to send such communications to the chairperson of the
Fund's Ethics and Compliance Committee. Nominee recommendations and stockholder
proposals currently should be directed to the attention of Claudia A. Brandon,
Secretary of the Fund, Neuberger Berman Funds, 605 Third Avenue, 21 (st) Floor,
New York, NY, 10158-0180. If the Trust Nominees are elected, communications with
the Board should be sent to the Board at the new address of the Fund, 2344
Spruce Street, Suite A, Boulder, CO 80302. If the Trust Nominees are elected,
any nominee recommendation and stockholder proposal should be sent to the Fund's
Secretary at 2344 Spruce Street, Suite A, Boulder, CO 80302.
VOTING INFORMATION
RECORD DATE
Holders of Common Shares and Preferred Shares of record on the Record Date
are entitled to be present and to vote at the Meeting. Each stockholder will
have one vote for each Share held on the Record Date. On the Record Date, the
Fund had 4,157,116.626 Common Shares and 1,680 Preferred Shares outstanding and
entitled to vote, totaling 4,158,796.626 Shares outstanding.
15
VOTE REQUIRED
Dr. Dean L. Jacobson, Joel W. Looney and John S. Horejsi each must be
elected by the holders of a plurality of the votes cast of the Fund's
outstanding Common Shares and Preferred Shares, voting together. Richard I. Barr
and Susan L. Ciciora must be elected by holders of a plurality of the votes cast
of the Fund's outstanding Preferred Shares, voting as a separate class. Unless a
contrary specification is made on executed proxy card(s), shares will be voted
FOR each Nominee.
VOTING INSTRUCTIONS FOR SHARES HELD IN YOUR NAME
Any stockholder holding shares in his or her name as record holder may vote
shares by proxy through the mail as described on the enclosed proxy card(s). A
properly completed and submitted proxy card will be voted in accordance with the
stockholder's instructions, unless those instructions are subsequently revoked.
If no choice is specified, shares will be voted FOR the election of the nominees
and FOR or AGAINST any other matters acted upon at the Meeting in the discretion
of the persons named as proxies. Any stockholder who attends the Meeting and
wishes to vote in person will be given a ballot prior to the vote.
VOTING INSTRUCTIONS FOR SHARES HELD IN "STREET NAME"
Any stockholder holding shares through a broker may vote his or her proxy
through the mail, internet or telephone as described in the enclosed proxy
card(s). Any stockholder who attends the Meeting and wishes to vote in person
will be given a ballot prior to the vote. However, if shares are held in the
name of a broker, bank or other nominee, the stockholder must bring a letter
from the nominee indicating that the stockholder is the beneficial owner of the
shares on the Record Date and authorizing the stockholder to vote.
REVOKING A PROXY
Any stockholder giving a proxy has the power to revoke it prior to its
exercise in one of three ways: (1) by submission of a proxy card with a later
date; (2) by voting in person at the Meeting; or (3) by submitting a letter
stating that the proxy is revoked to Claudia A. Brandon, Secretary of the Fund,
Neuberger Berman Funds, 605 Third Avenue, New York, New York 10158-0180.
Presence at the Meeting alone does not revoke a previously executed and returned
proxy card.
QUORUM; ADJOURNMENT
The presence at the Meeting, in person or by proxy, of stockholders
entitled to vote at least 33 1/3% of the shares outstanding and entitled to vote
at the Meeting is required for a quorum.
If a quorum is not present at the Meeting, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Subject to the rules established by the Chairman of the Meeting, the
holders
16
of a majority of the Shares entitled to vote at the Meeting and present in
person or by proxy may vote to adjourn, or, if no stockholder entitled to vote
is present in person or by proxy, any officer present entitled to preside or
act as secretary of the Meeting may adjourn the Meeting without determining the
date of the meeting. In the former case, the persons named as proxies will vote
in their discretion those proxies that they are entitled to vote "FOR" or
"AGAINST" any proposal. If a quorum is present at the Meeting, the Chairman of
the Meeting may adjourn the Meeting if sufficient votes are not received or for
any other reason. A stockholder vote may be taken on the nominations in this
Proxy Statement prior to any such adjournment if sufficient votes have been
received and it is otherwise appropriate.
The Fund expects that broker-dealer firms holding Shares in "street name"
for the benefit of their customers and clients will request the instructions of
such customers and clients on how to vote their Shares on each proposal at the
Meeting. The Fund understands that, under the rules of the NYSE and the American
Stock Exchange, if no instructions have been received prior to the date
specified in the broker-dealer firm's request for voting instructions, such
broker-dealers may have the authority to vote these proxies on an uncontested
election of Directors for the Fund but will not have the authority to vote on a
contested election of Directors for the Fund. Certain broker-dealer firms may
exercise discretion over Shares held in their names for which no instructions
are received by voting such Shares in the same proportion as they have voted
Shares for which they have received instructions.
In tallying stockholder votes, abstentions and "broker non-votes" (i.e.,
Shares held by brokers or nominees as to which instructions have not been
received from the beneficial owners or the persons entitled to vote and either
(i) the broker or nominee does not have discretionary voting power or (ii) the
broker or nominee returns the proxy but expressly declines to vote on a
particular matter) will have no effect on the election of the Directors because
the required vote is a plurality of the votes cast.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS ARE
THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD(S) AS SOON AS
POSSIBLE IN THE MANNER DESCRIBED IN THE ENCLOSED PROXY CARD(S). A STOCKHOLDER
HOLDING SHARES IN "STREET NAME" MAY ALSO VOTE HIS OR HER PROXY BY TELEPHONE OR
THE INTERNET AS DESCRIBED IN THE ENCLOSED PROXY CARD(S).
By order of the Board of Directors,
/s/ Claudia A. Brandon
Claudia A. Brandon
Secretary
|
17
APPENDIX A
INFORMATION REGARDING CURRENT FUND DIRECTORS AND
BOARD STRUCTURE
Set forth below is information about the current Directors, none of whom is
a candidate for re-election.
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
CLASS I
________________________________________________________________________________________________________________
Independent Fund Directors
________________________________________________________________________________________________________________
Faith Colish (71) Counsel, Carter 60 Formerly, Director
Director Ledyard & Milburn (1997 to 2003) and
Since inception LLP (law firm) Advisory Director
since October (2003 to 2006),
2002; formerly, ABA Retirement
Attorney-at-Law Funds (formerly,
and President, Faith American Bar
Colish, A Professional Retirement
Corporation, 1980 to Association)
2002. (not-for-profit
membership
corporation).
________________________________________________________________________________________________________________
Michael M. Knetter (47) Dean, School of 60 Trustee,
Director Business, University of Northwestern
Since February 2007 Wisconsin - Madison; Mutual Series
formerly, Professor Fund, Inc. since
of International February 2007;
Economics and Director, Wausau
Associate Dean, Paper since 2005;
Amos Tuck School of Director, Great
Business - Dartmouth Wolf Resorts since
College, 1998 to 2002. 2004.
________________________________________________________________________________________________________________
Cornelius T. Ryan (75) Founding General 60 None.
Director Partner, Oxford
Since inception Partners and Oxford
Bioscience Partners
(venture capital
investing) and President,
Oxford Venture Corporation
since 1981.
________________________________________________________________________________________________________________
|
A-1
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
Peter P. Trapp (62) Retired; formerly, 60 None.
Director Regional Manager for
Since inception Mid-Southern Region,
Ford Motor Credit
Company, September
1997 to 2007;
formerly, President,
Ford Life Insurance
Company, April 1995
to August 1997.
________________________________________________________________________________________________________________
Director who is an "Interested Person"*
________________________________________________________________________________________________________________
Peter E. Sundman*(48) Executive Vice 60 Director and
Chief Executive Officer, President, Neuberger Vice President,
Director and Chairman Berman Inc. (holding Neuberger &
of the Board company) since 1999; Berman Agency,
Since inception Head of Neuberger Inc. since 2000;
Berman Inc.'s Mutual formerly, Director,
Funds Business Neuberger Berman
(since 1999) and Inc. (holding
Institutional Business company), October
(1999 to October 1999 to March
2005); responsible 2003; Trustee, Frost
for Managed Valley YMCA;
Accounts Business Trustee, College of
and intermediary Wooster.
distribution since
October 1999; President
and Director, NB
Management since 1999;
Managing Director,
Neuberger Berman
since 2005; formerly,
Executive Vice President,
Neuberger Berman, 1999 to
December 2005; formerly,
Principal, Neuberger Berman,
1997 to 1999; formerly,
Senior Vice President,
NB Management, 1996 to
1999.
________________________________________________________________________________________________________________
|
A-2
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
CLASS II
________________________________________________________________________________________________________________
Independent Fund Directors
________________________________________________________________________________________________________________
John Cannon (77) Consultant; formerly, 60 Independent
Director Chairman, CDC Trustee or Director
Since inception Investment Advisers of three series of
(registered investment Oppenheimer
adviser), 1993 Funds: Limited
to January 1999; Term New York
formerly, President Municipal Fund,
and Chief Executive Rochester Fund
Officer, AMA Municipals, and
Investment Advisors, Oppenheimer
an affiliate of the Convertible
American Medical Securities Fund
Association. since 1992.
________________________________________________________________________________________________________________
C. Anne Harvey (70) President, C.A. Harvey 60 Formerly,
Director Associates since President, Board
Since inception October 2001; of Associates
formerly, Director, to The National
AARP, 1978 to Rehabilitation
December 2001. Hospital's Board
of Directors, 2001
to 2002; formerly,
Member, Individual
Investors Advisory
Committee to the
New York Stock
Exchange Board of
Directors, 1998 to
June 2002.
________________________________________________________________________________________________________________
George W. Morriss (59) Formerly, Executive 60 Manager, Old
Director Vice President and Mutual 2100 fund
Since February 2007 Chief Financial complex (consisting
Officer, People's Bank of six funds) since
(a financial services October 2006 for
company), 1991 to four funds and
2001. since February
2007 for two funds.
________________________________________________________________________________________________________________
|
A-3
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
Tom D. Seip (57) General Partner, Seip 60 Director, H&R
Director Investments LP (a Block, Inc.
Since inception; private investment (financial services
Lead Independent partnership); formerly, company) since
Director President and May 2001;
Since 2006 CEO, Westaff, Inc. Chairman,
(temporary staffing), Compensation
May 2001 to January Committee, H&R
2002; formerly, Block, Inc. since
Senior Executive at 2006; Director,
the Charles Schwab America One
Corporation, 1983 Foundation since
to 1998, including 1998; formerly,
Chief Executive Chairman,
Officer, Charles Governance
Schwab Investment and Nominating
Management, Inc. Committee, H&R
and Trustee, Schwab Block, Inc., 2004
Family of Funds and to 2006; formerly,
Schwab Investments, Director, Forward
1997 to 1998, and Management, Inc.
Executive Vice (asset management
President-Retail company), 1999
Brokerage, Charles to 2006; formerly
Schwab & Co., Inc., Director, E-Bay
1994 to 1997. Zoological Society,
1999 to 2003;
formerly, Director,
General Magic
(voice recognition
software), 2001
to 2002; formerly,
Director, E-Finance
Corporation
(credit decisioning
services), 1999 to
2003; formerly,
Director, Save-
Daily.com (micro
investing services),
1999 to 2003.
________________________________________________________________________________________________________________
|
A-4
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
Director who is an "Interested Person" *
________________________________________________________________________________________________________________
Jack L. Rivkin * (67) Executive Vice 60 Director, Dale
President and Director President and Chief Carnegie and
Since December 2002. Investment Officer, Associates, Inc.
Neuberger Berman (private company)
Inc. (holding since 1998;
company) since 2002 Director, Solbright,
and 2003, respectively; Inc. (private
Managing Director company) since
and Chief Investment 1998.
Officer, Neuberger
Berman since
December 2005 and
2003, respectively;
formerly, Executive
Vice President,
Neuberger Berman,
December 2002
to 2005; Director
and Chairman, NB
Management since
December 2002;
formerly, Executive
Vice President,
Citigroup Investments,
Inc., September 1995
to February 2002;
formerly, Executive
Vice President,
Citigroup Inc.,
September 1995 to
February 2002.
________________________________________________________________________________________________________________
|
A-5
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
CLASS III
________________________________________________________________________________________________________________
Independent Fund Directors
________________________________________________________________________________________________________________
Martha C. Goss (58) President, Woodhill 60 Director, Ocwen
Director Enterprises Inc./Chase Financial
Since June 2007 Hollow Associates Corporation
LLC (personal (mortgage
investment vehicle), servicing), since
since 2006; Chief 2005; Director,
Operating and American Water
Financial Officer, (water utility),
Hopewell Holdings since 2003;
LLC/ Amwell Director, Channel
Holdings, LLC (a Reinsurance
holding company (financial guaranty
for a healthcare reinsurance), since
reinsurance company 2006; Advisory
start-up), since 2003; Board Member,
formerly, Consultant, Attensity (software
Resources Connection developer), since
(temporary staffing), 2005; Director,
2002 to 2006. Allianz Life
of New York
(insurance), since
2005; Director,
Financial Women's
Association of
New York (not for
profit association),
since 2003; Trustee
Emerita, Brown
University, since
1998.
________________________________________________________________________________________________________________
|
A-6
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
Robert A. Kavesh (79) Marcus Nadler 60 Formerly, Director,
Director Professor Emeritus The Caring
Since inception of Finance and Community (not-
Economics, New for-profit), 1997
York University Stern to 2006; formerly,
School of Business; Director, DEL
formerly, Executive Laboratories, Inc.
Secretary-Treasurer, (cosmetics and
American Finance pharmaceuticals),
Association, 1961 to 1978 to 2004;
1979. formerly, Director,
Apple Bank for
Savings, 1979 to
1990; formerly,
Director, Western
Pacific Industries,
Inc., 1972 to 1986
(public company).
________________________________________________________________________________________________________________
Howard A. Mileaf (70) Retired; formerly, 60 Director,
Director Vice President and Webfinancial
Since inception General Counsel, Corporation
WHX Corporation (holding company)
(holding company), since December
1993 to 2001. 2002; formerly,
Director WHX
Corporation
(holding company),
January 2002
to June 2005;
formerly, Director,
State Theatre of
New Jersey (not-
for-profit theater),
2000 to 2005.
________________________________________________________________________________________________________________
|
A-7
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
Edward I. O'Brien (78) Formerly, Member, 60 Director, Legg
Director Investment Policy Mason, Inc.
Since inception Committee, Edward (financial services
Jones, 1993 to holding company)
2001; President, since 1993;
Securities Industry formerly, Director,
Association ("SIA") Boston Financial
(securities industry's Group (real estate
representative in and tax shelters),
government relations 1993 to 1999.
and regulatory matters
at the federal and
state levels), 1974 to
1992; Adviser to SIA,
November 1992 to
November 1993.
________________________________________________________________________________________________________________
William E. Rulon (74) Retired; formerly, 60 Formerly, Director,
Director Senior Vice President, Pro-Kids Golf
Since inception Foodmaker, Inc. and Learning
(operator and Academy (teach
franchiser of golf and computer
restaurants) until usage to "at risk"
January 1997. children), 1998 to
2006; formerly,
Director, Prandium,
Inc. (restaurants),
March 2001 to July
2002.
________________________________________________________________________________________________________________
|
A-8
________________________________________________________________________________________________________________
NAME, AGE, POSITION, NUMBER OF PORTFOLIOS OTHER DIRECTORSHIPS
TERMS OF OFFICE, (1) AND IN FUND COMPLEX HELD OUTSIDE FUND
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR (2) COMPLEX BY DIRECTOR
________________________________________________________________________________________________________________
Candace L. Straight (59) Private investor and 60 Director,
Director consultant specializing Montpelier Re
Since inception in the insurance (reinsurance
industry; formerly, company) since
Advisory Director, 2006; Director,
Securitas Capital National Atlantic
LLC (a global private Holdings
equity investment firm Corporation
dedicated to making (property and
investments in the casualty insurance
insurance sector), 1998 company) since
to December 2003. 2004; Director,
The Proformance
Insurance Company
(property and
casualty insurance
company) since
March 2004;
formerly, Director,
Providence
Washington
Insurance Company
(property and
casualty insurance
company),
December 1998
to March 2006;
formerly, Director,
Summit Global
Partners (insurance
brokerage firm),
2000 to 2005.
________________________________________________________________________________________________________________
(1) The Board of Directors shall at times be divided as equally as possible into three classes of Directors
designated Class I, Class II, and Class III. The terms of office of Class I, Class II, and Class III
Directors shall expire at the annual meeting of stockholders held in 2009, 2010 and 2008, respectively,
and at each third annual meeting of stockholders thereafter.
(2) For funds organized in a master-feeder structure, we count the master fund and its associated feeder
funds as a single portfolio.
* Indicates a Director who is an "interested person" within the meaning of the 1940 Act. Mr. Sundman and
Mr. Rivkin are interested persons of the Fund by virtue of the fact that they are officers and/or
directors of NB Management and Managing Directors of Neuberger Berman.
|
A-9
COMMITTEES OF CURRENT BOARD
The current Board has established several standing committees to oversee
particular aspects of the Fund's management. The standing committees of the
current Board are described below. The current Board does not have a standing
compensation committee.
AUDIT COMMITTEE. The purposes of the Fund's Audit Committee are (a) to
oversee the accounting and financial reporting processes of the Fund and its
internal control over financial reporting and, as the Committee deems
appropriate, to inquire into the internal control over financial reporting of
certain third-party service providers; (b) to oversee the quality and integrity
of the Fund's financial statements and the independent audit thereof; (c) to
oversee, or, as appropriate, assist Board oversight of, the Fund's compliance
with legal and regulatory requirements that relate to the Fund's accounting and
financial reporting, internal control over financial reporting and independent
audits; (d) to approve prior to appointment the engagement of the Fund's
independent registered public accounting firm and, in connection therewith, to
review and evaluate the qualifications, independence and performance of the
Fund's independent registered public accounting firm; (e) to act as a liaison
between the Fund's independent registered public accounting firm and the full
Board; and (f) to prepare an audit committee report as required by Item 407 of
Regulation S-K to be included in proxy statements relating to the election of
directors/trustees. The independent registered public accounting firm for the
Fund shall report directly to the Audit Committee. The Fund has adopted a
written charter for its Audit Committee. The charter of the Audit Committee is
available on NB Management's website at www.nb.com. The Audit Committee of the
Fund has delegated the authority to grant pre-approval of permissible non-audit
services and all audit, review or attest engagements of the Fund's independent
registered public accounting firm to the Chairman of the Audit Committee, and,
if the Committee Chair is not available, to any other member of the Audit
Committee.
The Audit Committee of the Fund, established in accordance with [section].
3(a)(58)(A) of the 1934 Act, is composed entirely of Independent Fund Directors
who are also considered independent under the listing standards applicable to
the Fund. Its members are Martha C. Goss, Howard A. Mileaf, George W. Morriss,
Cornelius T. Ryan (Chairman), Tom D. Seip and Peter P. Trapp. Members of the
Audit Committee receive additional compensation for serving on this committee.
During the fiscal year ended October 31, 2006, the Committee met seven times.
CLOSED-END FUNDS COMMITTEE. The Fund's Closed-End Funds Committee is
responsible for consideration and evaluation of issues specific to the Neuberger
Berman closed-end funds. Its members are George W. Morriss, Edward I. O'Brien,
Jack L. Rivkin, William E. Rulon, and Tom D. Seip. All members other than Mr.
Rivkin are Independent Fund Directors. During the fiscal year ended October 31,
2006, the Committee met once.
A-10
CONTRACT REVIEW COMMITTEE. The Contract Review Committee of the Fund is
responsible for overseeing and guiding the process by which the Independent Fund
Directors annually consider whether to continue the Fund's principal contractual
arrangements. Its members are Faith Colish (Chairwoman), Martha C. Goss, Robert
A. Kavesh, William E. Rulon and Candace L. Straight. All members are Independent
Fund Directors. During the fiscal year ended October 31, 2006, the Committee met
two times.
ETHICS AND COMPLIANCE COMMITTEE. The Ethics and Compliance Committee of the
Fund oversees: (a) the Fund's program for compliance with Rule 38a-1 under the
1940 Act and the Fund's implementation and enforcement of its compliance
policies and procedures; (b) compliance with the Fund's Code of Ethics (which
restricts the personal securities transactions, including transactions in Fund
shares, of employees, officers, and Directors), and (c) the activities of the
Fund's Chief Compliance Officer ("CCO"). The Committee shall not assume
oversight duties to the extent that such duties have been assigned by the Board
expressly to another Committee of the Board (such as oversight of internal
controls over financial reporting, which has been assigned to the Audit
Committee.) The Committee's primary function is oversight. Each investment
adviser, sub-adviser, administrator and transfer agent (collectively, "Service
Providers") is responsible for its own compliance with the federal securities
laws and for devising, implementing, maintaining and updating appropriate
policies, procedures and codes of ethics to ensure compliance with applicable
laws and regulations. The CCO is responsible for administering the Fund's
Compliance Program, including devising and implementing appropriate methods of
testing compliance by the Fund and its Service Providers. Its members are John
Cannon (Chairman), Faith Colish, C. Anne Harvey, Michael M. Knetter, and Edward
I. O'Brien. All members are Independent Fund Directors. The Board receives at
least annually a report on the compliance programs of the Fund and Service
Providers and the required annual reports on the administration of the Codes of
Ethics and the required annual certifications from the Fund, Neuberger Berman
and NB Management. During the fiscal year ended October 31, 2006, the Committee
met four times.
EXECUTIVE COMMITTEE. The Executive Committee of the Fund is responsible for
acting in an emergency when a quorum of the Board of Directors is not available;
the Committee has all the powers of the Board of Directors when the Board is not
in session to the extent permitted by Maryland law. Its members are John Cannon,
Robert A. Kavesh, Howard A. Mileaf, Tom D. Seip and Peter E. Sundman (Chairman).
All members except for Mr. Sundman are Independent Fund Directors. During the
fiscal year ended October 31, 2006, the Committee did not meet.
GOVERNANCE AND NOMINATING COMMITTEE. The Governance and Nominating
Committee of the Fund is responsible for: (a) considering and evaluating the
structure, composition and operation of the Board of Directors and each
committee thereof, including the operation of the annual self-evaluation by the
Board; (b) evaluating and nominating individuals to serve as Directors,
including as Independent Fund Directors, as members of committees, as Chair of
the Board and
A-11
as officers of the Fund; and (c) considering and making recommendations
relating to the compensation of Independent Fund Directors and of those officers
as to whom the Board is charged with approving compensation. The Committee met
to discuss matters relating to the nomination of Class II Directors. Its members
are C. Anne Harvey (Chairwoman), Robert A. Kavesh, Michael M. Knetter, Howard A.
Mileaf and Tom D. Seip. All members are Independent Fund Directors. During the
fiscal year ended October 31, 2006, the Committee met two times.
INVESTMENT PERFORMANCE COMMITTEE. The Investment Performance Committee of
the Fund is responsible for overseeing and guiding the process by which the
Board reviews Fund performance. Its members are Martha C. Goss, Robert A.
Kavesh, Edward I. O'Brien, Jack L. Rivkin (Vice Chairman), Cornelius T. Ryan and
Peter P. Trapp (Chairman). All members except for Mr. Rivkin are Independent
Fund Directors. During the fiscal year ended October 31, 2006, the Committee of
the Fund met two times.
PORTFOLIO TRANSACTIONS AND PRICING COMMITTEE. The Portfolio Transactions
and Pricing Committee of the Fund (a) monitors the operation of policies and
procedures reasonably designed to ensure that each portfolio holding is valued
in an appropriate and timely manner, reflecting information known to the manager
about current market conditions ("Pricing Procedures"); (b) considers and
evaluates, and recommends to the Board when the Committee deems it appropriate,
amendments to the Pricing Procedures proposed by management, counsel, the
independent registered public accounting firm and others; (c) from time to time,
as required or permitted by the Pricing Procedures, establishes or ratifies a
method of determining the fair value of portfolio securities for which market
prices are not readily available; (d) oversees the program by which the manager
seeks to monitor and improve the quality of execution for portfolio
transactions; and (e) oversees the adequacy and fairness of the arrangements for
securities lending; in each case with special emphasis on any situations in
which the Fund deals with the manager or any affiliate of the manager as
principal or agent.
The members of the Committee are Faith Colish, George W. Morriss, Jack L.
Rivkin (Vice Chairman), William E. Rulon, Cornelius T. Ryan and Candace L.
Straight (Chairwoman). All members except for Mr. Rivkin are Independent Fund
Directors. During the fiscal year ended October 31, 2006, the Committee met four
times.
INFORMATION REGARDING THE FUND'S CURRENT PROCESS FOR NOMINATING DIRECTOR
CANDIDATES
GOVERNANCE AND NOMINATING COMMITTEE CHARTER. A copy of the Governance and
Nominating Committee Charter is available to stockholders on the NB Management's
website at www.nb.com.
A-12
STOCKHOLDER COMMUNICATIONS. The Fund's Governance and Nominating Committee
will consider nominees recommended by stockholders; stockholders may send
resumes of recommended persons to the attention of Claudia A. Brandon,
Secretary, Neuberger Berman Funds, 605 Third Avenue, 21st Floor, New York, NY,
10158-0180. Other than in connection with the Settlement Agreement, no nominee
recommendation has been received from a stockholder within the past 120 days.
NOMINEE QUALIFICATIONS. The Governance and Nominating Committee will
consider nominees recommended by stockholders on the basis of the same criteria
used to consider and evaluate candidates recommended by other sources. While
there is no formal list of qualifications, the Governance and Nominating
Committee considers, among other things, whether prospective nominees have
distinguished records in their primary careers, unimpeachable integrity, and
substantive knowledge in areas important to the Board's operations, such as
background or education in finance, auditing, securities law, the workings of
the securities markets, or investment advice. For candidates to serve as
independent directors, independence from the Fund's investment adviser, its
affiliates and other principal service providers is critical, as is an
independent and questioning mindset. The Committee also considers whether the
prospective candidates' workloads would allow them to attend the vast majority
of Board meetings, be available for service on Board committees, and devote the
additional time and effort necessary to keep up with Board matters and the
rapidly changing regulatory environment in which the Fund operates. Different
substantive areas may assume greater or lesser significance at particular times,
in light of the Board's present composition and the Committee's (or the Board's)
perceptions about future issues and needs.
IDENTIFYING NOMINEES. The Governance and Nominating Committee considers
prospective candidates from any reasonable source. The Committee initially
evaluates prospective candidates on the basis of their resumes, considered in
light of the criteria discussed above. Those prospective candidates that appear
likely to be able to fill a significant need of the Board would be contacted by
a Committee member by telephone to discuss the position; if there appeared to be
sufficient interest, an in-person meeting with one or more Committee members
would be arranged. If the Committee, based on the results of these contacts,
believed it had identified a viable candidate, they would air the matter with
the full group of independent Board members for input.
Any request by management to meet with the prospective candidate would be
given appropriate consideration. The Fund has not paid a fee to third parties to
assist in finding nominees.
A-13
OWNERSHIP OF SECURITIES BY DIRECTORS
Set forth below is the dollar range of equity securities owned by each
current Director.
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
DOLLAR RANGE OF EQUITY DIRECTOR IN FAMILY OF
NAME OF DIRECTOR SECURITIES OWNED IN THE FUND* INVESTMENT COMPANIES*
____________________________________________________________________________________________
Independent Fund Directors
____________________________________________________________________________________________
John Cannon None Over $100,000
Faith Colish None Over $100,000
Martha C. Goss None $10,001-$50,000
C. Anne Harvey None $50,001-$100,000
Robert A. Kavesh None $10,001-$50,000
Michael M. Knetter None None
Howard A. Mileaf None Over $100,000
George W. Morriss None Over $100,000
Edward I. O'Brien None Over $100,000
William E. Rulon None Over $100,000
Cornelius T. Ryan None $50,001-$100,000
Tom D. Seip None Over $100,000
Candace L. Straight None Over $100,000
Peter P. Trapp None Over $100,000
____________________________________________________________________________________________
Directors who are "Interested Persons"
____________________________________________________________________________________________
Jack L. Rivkin None None
Peter E. Sundman None Over $100,000
____________________________________________________________________________________________
* Valuation as of October 1, 2007.
|
CURRENT OFFICERS OF THE FUND
The following table sets forth certain information regarding the current
officers of the Fund. Except as otherwise noted, each individual has held the
positions shown in the table below for at least the last five years. The
business address of each listed person is 605 Third Avenue, New York, New York
10158. Officers of the Fund are appointed by the Directors and serve at the
pleasure of the Board. If the Trust Nominees are elected, the current Officers
are obligated to resign.
A-14
______________________________________________________________________________________
POSITION AND
LENGTH OF
NAME AND AGE TIME SERVED PRINCIPAL OCCUPATION(S)
______________________________________________________________________________________
Andrew B. Allard (46) Anti-Money Senior Vice President, Neuberger
Laundering Berman since 2006; Deputy General
Compliance Counsel, Neuberger Berman since
Officer since 2004; formerly, Vice President,
inception Neuberger Berman, 2000 to 2005;
formerly, Associate General Counsel,
Neuberger Berman, 1999 to 2004;
Anti-Money Laundering Compliance
Officer, seventeen registered
investment companies for which
NB Management acts as investment
manager and administrator (seven
since 2002, three since 2003, four
since 2004, one since 2005 and two
since 2006).
______________________________________________________________________________________
Michael J. Bradler (37) Assistant Vice President, Neuberger Berman
Treasurer since 2006; Employee, NB
since 2005 Management since 1997; Assistant
Treasurer, seventeen registered
investment companies for which
NB Management acts as investment
manager and administrator (fifteen
since 2005 and two since 2006).
______________________________________________________________________________________
Claudia A. Brandon (50) Secretary Senior Vice President, Neuberger
since Berman since 2007; Vice President-
inception Mutual Fund Board Relations,
NB Management since 2000 and
Assistant Secretary since 2004;
formerly, Vice President, Neuberger
Berman, 2002 to 2006 and Employee
since 1999; Secretary, seventeen
registered investment companies
for which NB Management
acts as investment manager and
administrator (three since 1985, four
since 2002, three since 2003, four
since 2004, one since 2005 and two
since 2006).
______________________________________________________________________________________
|
A-15
______________________________________________________________________________________
POSITION AND
LENGTH OF
NAME AND AGE TIME SERVED PRINCIPAL OCCUPATION(S)
______________________________________________________________________________________
Robert Conti (51) Vice Managing Director, Neuberger
President Berman since 2007; formerly,
since Senior Vice President, Neuberger
inception Berman, 2003 to 2006; formerly,
Vice President, Neuberger Berman,
1999 to 2003; Senior Vice President,
NB Management since 2000; Vice
President, seventeen registered
investment companies for which
NB Management acts as investment
manager and administrator (three
since 2000, four since 2002, three
since 2003, four since 2004, one since
2005 and two since 2006).
______________________________________________________________________________________
Brian J. Gaffney (54) Vice Managing Director, Neuberger
President Berman since 1999; Senior Vice
since President, NB Management since
inception 2000; Vice President, seventeen
registered investment companies
for which NB Management
acts as investment manager and
administrator (three since 2000, four
since 2002, three since 2003, four
since 2004, one since 2005 and two
since 2006).
______________________________________________________________________________________
Maxine L. Gerson (56) Chief Legal Senior Vice President, Neuberger
Officer since Berman since 2002; Deputy General
2005 (only Counsel and Assistant Secretary,
for purposes Neuberger Berman since 2001; Senior
of sections Vice President, NB Management
307 and since 2006; Secretary and General
406 of the Counsel, NB Management since
Sarbanes- 2004; Chief Legal Officer (only
Oxley Act of for purposes of sections 307 and
2002) 406 of the Sarbanes-Oxley Act
of 2002), seventeen registered
investment companies for which
NB Management acts as investment
manager and administrator (fifteen
since 2005 and two since 2006).
______________________________________________________________________________________
|
A-16
______________________________________________________________________________________
POSITION AND
LENGTH OF
NAME AND AGE TIME SERVED PRINCIPAL OCCUPATION(S)
______________________________________________________________________________________
Sheila R. James (42) Assistant Assistant Vice President, Neuberger
Secretary Berman since 2007 and Employee
since since 1999; Assistant Secretary,
inception seventeen registered investment
companies for which NB
Management acts as investment
manager and administrator (seven
since 2002, three since 2003, four
since 2004, one since 2005 and two
since 2006).
______________________________________________________________________________________
Kevin Lyons (52) Assistant Employee, Neuberger Berman since
Secretary 1999; Assistant Secretary, seventeen
since 2003 registered investment companies
for which NB Management
acts as investment manager and
administrator (ten since 2003, four
since 2004, one since 2005 and two
since 2006).
______________________________________________________________________________________
John M. McGovern (37) Treasurer Senior Vice President, Neuberger
and Principal Berman since 2007; formerly, Vice
Financial and President, Neuberger Berman, 2004
Accounting to 2006; Employee, NB Management
Officer since since 1993; Treasurer and Principal
2005; prior Financial and Accounting Officer,
thereto, seventeen registered investment
Assistant companies for which NB
Treasurer Management acts as investment
since manager and administrator (fifteen
inception since 2005 and two since 2006);
formerly, Assistant Treasurer, fifteen
registered investment companies
for which NB Management
acts as investment manager and
administrator, 2002 to 2005.
______________________________________________________________________________________
|
A-17
_____________________________________________________________________________________
POSITION AND
LENGTH OF
NAME AND AGE TIME SERVED PRINCIPAL OCCUPATION(S)
_____________________________________________________________________________________
Frank Rosato (36) Assistant Vice President, Neuberger Berman
Treasurer since 2006; Employee, NB
since 2005 Management since 1995; Assistant
Treasurer, seventeen registered
investment companies for which
NB Management acts as investment
manager and administrator (fifteen
since 2005 and two since 2006).
_____________________________________________________________________________________
Frederic B. Soule (61) Vice Senior Vice President, Neuberger
President Berman since 2003; formerly, Vice
since President, Neuberger Berman, 1999
inception to 2002; Vice President, seventeen
registered investment companies
for which NB Management
acts as investment manager and
administrator (three since 2000, four
since 2002, three since 2003, four
since 2004, one since 2005 and two
since 2006).
_____________________________________________________________________________________
|
A-18
_____________________________________________________________________________________
POSITION AND
LENGTH OF
NAME AND AGE TIME SERVED PRINCIPAL OCCUPATION(S)
_____________________________________________________________________________________
Chamaine Williams (36) Chief Senior Vice President, Neuberger
Compliance Berman since 2007; Chief
Officer since Compliance Officer, NB Management
2005 since 2006; Senior Vice President,
Lehman Brothers Inc. since 2007;
formerly, Vice President, Lehman
Brothers Inc., 2003 to 2006; Chief
Compliance Officer, seventeen
registered investment companies
for which NB Management
acts as investment manager and
administrator (sixteen since 2005 and
one since 2006); Chief Compliance
Officer, Lehman Brothers Asset
Management Inc. since 2003; Chief
Compliance Officer, Lehman
Brothers Alternative Investment
Management LLC since 2003;
formerly, Vice President, UBS
Global Asset Management (US)
Inc. (formerly, Mitchell Hutchins
Asset Management, a wholly-owned
subsidiary of PaineWebber Inc.), 1997
to 2003.
_____________________________________________________________________________________
|
COMPENSATION OF DIRECTORS
The following table sets forth information concerning the compensation of
the Fund's Directors. The Fund does not have any pension or retirement plan for
its Directors. For the fiscal year ended October 31, 2006, the Directors
received the amounts set forth in the following table from the Fund. Since April
2005, the Directors have agreed to forego their directors' fees for an
indefinite period to help offset expenses incurred by the Fund in payment of its
legal fees in response to the Trust's recently completed tender offer. For the
calendar year ended December 31, 2006, the Directors received the compensation
set forth in the following table for serving as Trustees or Directors of
investment companies in the "Fund Complex." Each officer and Director who is a
director, officer or employee of NB Management, Neuberger Berman or any entity
controlling, controlled by or under common control with NB Management or
Neuberger Berman serves as a Director and/or officer without any compensation
from the Fund.
A-19
TABLE OF COMPENSATION
TOTAL COMPENSATION FROM
REGISTERED INVESTMENT COMPANIES
IN THE NEUBERGER BERMAN
COMPENSATION FROM FUND COMPLEX PAID TO CURRENT
THE FUND FOR FISCAL DIRECTORS FOR CALENDAR YEAR
NAME AND POSITION YEAR ENDED 10/31/06 ENDED 12/31/06
______________________________________________________________________________________
Independent Fund Directors*
______________________________________________________________________________________
John Cannon
Director $0 $109,719
Faith Colish
Director $0 $102,864
C. Anne Harvey
Director $0 $102,864
Robert A. Kavesh
Director $0 $102,864
Michael M. Knetter**
Director $0 $6,077
Howard A. Mileaf
Director $0 $109,719
George W. Morriss**
Director $0 $6,375
Edward I. O'Brien
Director $0 $102,864
William E. Rulon
Director $0 $102,864
Cornelius T. Ryan
Director $0 $113,645
Tom D. Seip
Lead Independent
Director $0 $128,341
Candace L. Straight
Director $0 $102,864
Peter P. Trapp
Director $0 $102,372
______________________________________________________________________________________
Directors who are "Interested Persons"
______________________________________________________________________________________
Jack L. Rivkin
Director and President $0 $0
Peter E. Sundman
Director, Chairman of the
Board and Chief Executive
Officer $0 $0
______________________________________________________________________________________
* Ms. Goss joined the Board in June 2007. She did not receive any compensation from
the Fund for its fiscal year ended October 31, 2006 or from the Neuberger Berman
Fund Complex for the calendar year ended December 31, 2006.
** Dr. Knetter and Mr. Morriss joined the Board in February 2007. They served on the
board of another fund managed by an affiliate of NB Management during part of
2006.
|
A-20
APPENDIX B
CHARTER OF BOULDER FUND AUDIT COMMITTEE
1. The Audit Committee shall be composed entirely of directors who are not
"interested persons" of the Fund within the meaning of the Investment Company
Act of 1940 ("independent directors") and who are free of any other relationship
that, in the opinion of the Board of Directors, would interfere with their
exercise of independent judgment as Committee members. The Audit Committee
Chairman shall be selected by the members of the Committee. The Audit Committee
shall have at least three members, all of whom shall be financially literate.
The Chairman of the Committee must have accounting or related financial
management expertise, as determined by the Board in its judgment.
At least annually, the Board of Directors shall determine whether one or
more "audit committee financial experts," as such term is defined by the
Securities and Exchange Commission, are members of the Committee and whether any
such expert is "independent." For purposes of this finding only, in order to be
considered "independent," any such expert may not, other than in his or her
capacity as a member of the Committee, the Board or any other Board committee,
accept directly or indirectly any consulting, advisory or other compensatory fee
from the Fund (other than Board or committee fees). The designation of a person
as an audit committee financial expert ("ACFE") shall not impose any liability
greater than the liability imposed on such person as a member of the Audit
Committee or the Board of Directors in the absence of such designation.
2. The purposes of the Audit Committee are:
(a) to assist Board oversight of
1. the integrity of the Fund's financial statements
2. the Fund's compliance with legal and regulatory requirements
3. the independent auditor's qualifications and independence
4. the performance of the Fund's independent auditors
(b) to prepare an audit committee report if required by the SEC to be
included in the Fund's annual proxy statement;
(c) to oversee the Fund's accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal controls of
certain service providers;
(d) to oversee the quality and objectivity of the Fund's financial
statements and the independent audit thereof;
(e) to determine the selection, appointment, retention and termination of
the Fund's independent auditors, as well as approving the compensation of the
auditors;
B-1
(f) to pre-approve all audit and non-audit services provided to the Fund
and certain other persons (as described in 4(d) and (e) below) by such
independent auditors; and
(g) to act as a liaison between the Fund's independent auditors and the
full Board of Directors.
The Fund's independent auditors shall report directly to the Committee.
The function of the Committee is oversight. The Fund's management is
responsible for (i) the preparation, presentation and integrity of the Fund's
financial statements, (ii) the maintenance of appropriate accounting and
financial reporting principles and policies and (iii) the maintenance of
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The auditors are responsible for
planning and carrying out proper audits and reviews in accordance with generally
accepted auditing standards. In fulfilling their responsibilities hereunder, it
is recognized that members of the Committee are not full time employees of the
Fund and are not, and do not represent themselves to be, accountants or auditors
by profession or experts in the fields of accounting or auditing,
notwithstanding the possibility that one or more members may be designated an
ACFE. As such, it is not the duty or responsibility of the Committee or its
members to conduct "field work" or other types of auditing or accounting reviews
or procedures. Each member of the Committee shall be entitled to rely on (i) the
integrity of those persons and organizations within and outside the Fund from
which it receives information, (ii) the accuracy of the financial and other
information, including, for example, the information contemplated by paragraph
4(b), provided to the Committee by such persons and organizations absent actual
knowledge to the contrary (which shall be promptly reported to the Fund's Board)
and (iii) statements made by the officers and employees of the Fund, the Fund's
adviser or other third parties as to any information technology, internal audit
and other non-audit services provided by the independent auditors to the Fund.
In addition, the evaluation of the Fund's financial statements by the Committee
is not of the same scope as, and does not involve the extent of detail as,
audits performed by the auditors, nor does the Committee's evaluation substitute
for the responsibilities of the Fund's management for preparing, or the auditors
for auditing, the financial statements. The designation of a person as an ACFE
is not intended to impose any greater responsibility or liability on that person
than the responsibility and liability imposed on such a person as a member of
the Committee, nor does it decrease the duties and obligations of the other
Committee members or the Board.
The Committee shall have the appropriate resources and authority to
discharge its responsibilities, including the authority to retain special
counsel and other experts or consultants at the expense of the Fund. The
Committee shall also have the authority to seek information, data and services
from management in order to carry out its responsibilities.
B-2
3. With respect to any subsequent changes to the composition of the
Committee, and otherwise approximately once each year, the Board of Directors
shall determine:
(a) that each member of the Audit Committee is "independent" pursuant to
the NYSE's governance standards or applicable law or;
(b) that each Audit Committee member is financially literate;
(c) that at least one of the Committee members has accounting or related
financial management expertise; and
(d) the adequacy of the Charter.
4. To carry out its purposes, the Audit Committee shall have the following
duties and powers:
(a) to select, retain, determine the compensation of, or terminate auditors
and to oversee the work of the Fund's independent auditors (or any other public
accounting firm engaged for the purpose of performing other audit, review or
attestation services for the Fund) and, in connection therewith, to evaluate the
independence of the auditors, including whether the auditors provide any
consulting services to any service provider, to resolve any disagreements
between management and the Fund's independent auditors regarding financial
reporting, to receive the auditors' specific representations as to their
independence at least annually and to recommend the retention of such auditors
to the independent directors for their ratification and approval;
(b) to meet with the Fund's independent auditors, including meetings apart
from management, as necessary (i) to review the arrangements for and scope of
the annual audit and any special audits; (ii) to discuss critical accounting
policies and practices to be used in the annual audit and all alternative
treatments of financial information within generally accepted accounting
principles that have been discussed with management, the ramifications of the
use of such alternative treatments, and the treatments preferred by the auditor;
(iii) to discuss any matters of importance relating to the Fund's financial
statements, including any adjustments to such statements recommended by the
auditors, or other results of said audit(s); (iv) to consider the auditors'
comments with respect to the acceptability and appropriateness of the Fund's
financial reporting policies, procedures and internal accounting controls, and
management's responses thereto; (v) to review the form of opinion the auditors
propose to render to the Board and shareholders; (vi) to review copies of any
material written communication between the auditor and management, such as any
management letter or schedule of unadjusted differences; (vii) to review the
adequacy and effectiveness of relevant internal controls and procedures and the
quality of the staff implementing those controls and procedures and to obtain
annually in writing from the independent auditors their letter as to the
adequacy of such controls as required by Form N-SAR; (viii) to receive periodic
reports concerning regulatory changes and new accounting pronouncements that
significantly affect the value of the Fund's assets and its financial reporting;
(ix) to
B-3
discuss any audit problems or difficulties and management's response, including
any restrictions on the scope of the auditor's activities or on access to
requested information, and any significant disagreements with management; and
(x) to receive disclosure from the auditor regarding all services provided by
the auditor to the Fund, including the fees associated with those services, at
least annually, and if the annual communication is not made within 90 days
before the filing of the Fund's annual report, to receive an update, in the 90
day period before the filing, of any changes to the previously reported
information.
(c) to consider the effect upon the Fund of any changes in accounting
principles or practices proposed by management or the auditors, and to consider,
in consultation with management and the Fund's independent auditors, any
significant changes to the Fund's tax accounting policies, including those
pertaining to its qualification as a regulated investment company under the
Internal Revenue Code;
(d) to review and pre-approve all auditing services and permissible
non-audit services (e.g., tax services) to be provided to the Fund by the
auditor, including the fees therefore. The Committee may delegate to one or more
of its members the authority to grant pre-approvals. In connection with such
delegation, the Committee shall establish pre-approval policies and procedures,
including the requirement that the decisions of any member to whom authority is
delegated under this sub-section (d) shall be presented to the full Committee at
each of its scheduled meetings.
Pre-approval for a permitted non-audit service shall not be required if:
(1) the aggregate amount of all such non-audit services is not more than 5% of
the total revenues paid by the Fund to the auditor in the fiscal year in which
the non-audit services are provided; (2) such services were not recognized by
the Fund at the time of the engagement to be non-audit services; and (3) such
services are promptly brought to the attention of the Committee and approved
prior to the completion of the audit by the Committee or by one or more members
of the Committee to whom authority to grant such approvals has been delegated by
the Committee.
Additionally, the Committee shall pre-approve the auditor's engagements for
non-audit services with the Fund's investment advisers (each, an "Adviser") and
any service providers controlling, controlled by or under common control with an
Adviser ("affiliate") that provides ongoing services to the Fund in accordance
with the foregoing paragraph, if the engagement relates directly to the
operations and financial reporting of the Fund, unless the aggregate amount of
all services provided constitutes no more than 5% of the total amount of
revenues paid to the auditor by the Fund, an Adviser and any affiliate of the
Adviser that provides ongoing services to the Fund during the fiscal year in
which the services are provided that would have to be pre-approved by the
Committee pursuant to this paragraph (without regard to this exception).
Prohibited Services - The auditor may not perform contemporaneously any of
the following non-audit services for the Fund: bookkeeping or other services
related to the accounting records or financial statements of the Fund; financial
information systems design and implementation; appraisal or valuation services,
B-4
fairness opinions, or contribution-in-kind reports; actuarial services;
internal audit outsourcing services; management functions or human resources;
broker or dealer, investment adviser, or investment banking services; legal
services and expert services unrelated to the audit; and any other service that
the Public Company Accounting Oversight Board determines, by regulation, is
impermissible.
(e) to consider whether the provision by the Fund's auditor of non-audit
services to its investment adviser or adviser affiliate that provides ongoing
services to the Fund, which services were not pre-approved by the Audit
Committee, is compatible with maintaining the auditor's independence;
(f) to investigate any improprieties or suspected improprieties in fund
operations and to establish procedures for the receipt, retention, and treatment
of complaints received by the Fund with respect to accounting, internal
accounting controls, or auditing matters and the confidential anonymous
submission by employees of the Fund and its service providers of concerns
regarding questionable accounting or auditing matters;
(g) to review the findings made in any regulatory examinations of the Fund
and consult with management on appropriate responses;
(h) to review any material violations of the Code of Ethics for the Fund
and its Advisers and report the Committee's findings to the full Board with
recommendations for appropriate action;
(i) to review with the Fund's principal executive officer and/or principal
financial officer in connection with their certification of Form N-CSR any
significant deficiencies in the design or operation of internal controls which
could adversely affect the Fund's ability to record, process, summarize and
report financial data or material weaknesses therein and any reported evidence
of fraud involving management of other employees who have a significant role in
the Fund's internal controls;
(j) to discuss with management policies and guidelines with respect to risk
assessment and risk management and the system of internal control, and the steps
taken to monitor and control such risks;
(k) to meet periodically with Fund management, apart from the Fund's
independent auditors;
(l) to discuss the types of information to be disclosed in press releases
concerning dividends, as well as financial information provided to analysts and
rating agencies, and the type of presentation to be made;
(m) to establish hiring policies for employees or former employees of the
auditor consistent with government regulations;
(n) at least annually, to obtain and review a report by the Fund's
independent auditors describing: (1) the audit firm's internal quality control
procedures; (2) any material issues raised by the most recent internal quality
control review, or
B-5
peer review, of the firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the audit firm, and any steps taken to
deal with any such issues; and (3) for the purpose of assessing the auditor's
independence, all relationships between the independent auditors and the Fund;
(o) to review and evaluate the qualifications, performance and independence
of the lead partner of the auditors;
(p) to assure the regular rotation of the lead audit partner and the
reviewing partner, and to consider whether there should be regular rotation of
the audit firm itself;
(q) to review and discuss the Fund's audited and unaudited financials
statements with management and, in the case of the audited financial statements,
the independent auditor, including the Fund's disclosure of management's
discussion of Fund performance, and to recommend to the Board, as appropriate,
the inclusion of the Fund's audited financial statements in the Fund's annual
report;
(r) to cause the preparation of any report or other disclosures required by
the New York Stock Exchange or the Securities and Exchange Commission;
(s) to oversee the Fund's compliance with 1940 Act asset coverage tests and
coverage tests under applicable rating agency guidelines and the Fund's Articles
Supplementary, as amended or supplemented from time to time; and
(t) to report regularly to the full Board any issues that arise with
respect to: (1) the quality or integrity of the Fund's financial statements, (2)
the Fund's compliance with legal or regulatory requirements and (3) the
performance and independence of the Fund's independent auditors, and to make
such recommendations with respect to the above and other matters as the
Committee may deem necessary or appropriate.
5. The Fund's independent auditors are ultimately accountable to the Audit
Committee, as representatives of the Board of Directors and the shareholders of
the Fund, and the Audit Committee has the ultimate authority and responsibility
to select, evaluate and, where appropriate, replace the independent auditors (as
well as to nominate the independent auditors to be proposed for shareholder
approval, if necessary), subject to ratification and approval of the independent
directors of the Fund. The Committee will ensure that the Fund's independent
auditors submit to the Audit Committee, on a periodic basis, a formal written
statement delineating all relationships between the independent auditors and the
Fund and its service providers. The Committee will actively engage in a dialogue
with the Fund's independent auditors with respect to any disclosed relationships
or services that may impact the objectivity and independence of the independent
auditors, and will consider recommending that appropriate action be taken by the
Board of Directors to ensure the independence of the independent auditors.
B-6
6. The Committee shall meet at least twice annually, which shall include
separate executive sessions as the Committee may deem appropriate, and is
empowered to hold special meetings as circumstances require. The Committee shall
submit the minutes of all of its meetings to, or discuss the matters discussed
at each meeting with, the Board of Directors.
7. The Committee shall regularly meet with the Treasurer of the Fund and
with internal auditors, if any, for the Fund's Advisers and/or administrator to
review and discuss matters relevant to the Committee's duties and
responsibilities.
8. The Committee shall be responsible for reviewing any required
description of the Committee in the Fund's annual reports or proxy statements.
9. The Committee will periodically assess the independence of its members
and will evaluate its performance under the Charter annually.
10. Qualified Legal Compliance Committee. The Committee will also serve as
the Qualified Legal Compliance Committee. The following procedures are designed
to implement the Standards of Professional Conduct for Attorneys pursuant to the
Sarbanes-Oxley Act of 2002.
(a) Provision of Information to Outside Counsel and Service Providers. To
assist attorneys employed by law firms retained by the Funds or service
providers engaged by the Funds, the chief executive officer of each Fund (the
"CEO") must send a notice to each such law firm and service provider providing
contact information with respect to each Fund's Legal Compliance Committee
Chairperson. The CEO must send a similar notice to each law firm and service
provider when the information provided in the most recent notice sent to such
law firm or service provider has changed.
(b) Investigations and Responses. Upon receiving a report of evidence of a
material violation from an attorney employed by a law firm or service provider,
the CEO shall (i) record receipt of the report and (ii) report the matter
promptly to the Legal Compliance Committee (the "Committee"). Upon receiving a
report of evidence of a material violation from an attorney employed by a law
firm or service provider or from the CEO, the Committee shall (i) record the
Committee's receipt of the report, (ii) inform the Fund's CEO of the report
(other than those received from the and (iii) determine whether an investigation
of a material violation is necessary or appropriate. In determining whether an
investigation is necessary or appropriate, the Committee shall consider such
factors as it considers appropriate under the circumstances, which may include
the seniority of the alleged wrongdoer, the seriousness of the alleged violation
and the credibility of the allegation. If the Committee determines that an
investigation is necessary, the Committee must (A) notify the Fund's Audit
Committee or the Board of Directors, (B) initiate an investigation and (C)
retain additional expert personnel as it deems necessary. The Committee shall
have the discretion to engage auditors, counsel or other experts to assist in
the investigation of any report and in the analysis of results.
B-7
(c) Investigations. If the Committee deems it necessary, the Committee may
direct outside counsel to conduct a preliminary internal investigation to
determine whether the reported material violation has occurred, is ongoing or is
about to occur. The Committee may direct employees of the Funds' investment
advisers or administrators or any officer(s) of the Funds to assist outside
counsel. If Fund counsel is the reporting counsel, Fund counsel nonetheless may
be engaged to conduct the preliminary internal investigation. If Fund counsel is
the reporting counsel, Fund counsel may decline to lead the preliminary internal
investigation and may recommend that the Fund seek alternative counsel for
purposes of conducting such investigation. Any investigation may be conducted by
the relevant Fund's CEO or chief legal officer (or the equivalent thereof) if
such officer is not the reporting attorney and is not the subject of the alleged
violation described in the report.
(d) Responses. At the conclusion of any investigation, the Committee, by
majority vote, shall recommend that the relevant Fund implement an appropriate
response to evidence of a material violation. What constitutes an appropriate
response will depend on whether the Committee determines, on the basis of the
facts and circumstances, that a material violation has occurred, is ongoing or
is about to occur.
Unless the Committee reasonably believes that no material violation has
occurred, is ongoing or is about to occur, the Committee shall take all
reasonable steps to cause the Funds to adopt an appropriate response. If the
preliminary internal investigation is performed by outside counsel, such counsel
may recommend a proposed response for adoption by the Committee.
(e) Determination: No Violation. The Committee may determine that no
material violation has occurred, is ongoing or is about to occur. That
determination must be made on the basis that the Committee "reasonably believes"
that no material violation has occurred, is ongoing or is about to occur.
"Reasonably believes" means that the Committee "believes the matter in question
and that the circumstances are such that the belief is not unreasonable."
(f) Determination: Material Violation Has Occurred, Is Ongoing or Is About
to Occur. If the Committee reasonably believes that a material violation has
occurred, is ongoing or is about to occur, the following responses should be
considered:
i) A Material Violation Has Occurred If the Committee reasonably believes
that the reported material violation has already occurred, the Committee should
seek to remedy or otherwise address the material violation. The Committee should
explore what steps would be necessary or appropriate to reduce the likelihood of
a recurrence of the material violation. The Committee should consider
recommending that sanctions be imposed in connection with the violation.
Disclosure to the public or to the SEC should be considered, depending on the
nature of the violation and other relevant factors.
B-8
ii) A Material Violation Is Ongoing If the Committee reasonably believes
that the reported material violation is ongoing, the Committee should seek to
take or recommend steps, measures and/or sanctions that are designed to (i) stop
any material violations that are ongoing, (ii) remedy or otherwise appropriately
address the portion of the material violation that has already occurred, and
(iii) reduce the likelihood of a recurrence of the material violation.
Disclosure to the public or to the SEC should be considered, depending on the
nature of the violation and other relevant factors.
iii) A Material Violation Has Yet to Occur If the Committee reasonably
believes that the reported material violation has not yet occurred, the
Committee should seek to take or recommend steps and/or measures to prevent the
reported material violation from occurring. Depending on the circumstances of
the impending violation, actions to address potential future violations,
including sanctions, should be considered. In unusual circumstances, disclosure
to the SEC may also be appropriate. The Committee may retain outside counsel,
which may be Fund counsel, to undertake a review of the reported evidence of a
material violation in order to assist the Committee in determining what remedial
measures would be appropriate under the circumstances.
(g) Other Action. The Committee shall have the authority and
responsibility, acting by majority vote, to take all other appropriate action,
including the authority to notify the SEC, in the event a Fund fails in any
material respect to implement a recommendation that the Committee has made
within a reasonable period of time.
(h) Reporting and Recordkeeping. The Committee shall inform the relevant
Fund's CEO and chief legal officer (or the equivalent thereof) and the Board of
Directors of the results of any investigation of a report of a material
violation and any appropriate remedial measures to be adopted. The Committee or
its delegate shall prepare, or cause to be prepared, a memorandum reflecting (i)
the information developed in any internal investigation, (ii) any remedial
recommendation made by the Committee or by outside counsel retained to review
any report of a material violation and (iii) any remedial actions taken. The
Committee should review these records periodically to determine whether there
are any patterns of activity or violations that have emerged.
(i) Protection of Reporting Attorneys. The Committee shall not retaliate,
and shall not tolerate any retaliation by Fund management or any other person or
group, directly or indirectly, against anyone who, in good faith, reports
evidence of a material violation or provides assistance to the Committee or any
other person or group, including regulatory authorities, investigating a report.
The Committee shall seek to maintain the confidentiality of any person who
submits a report and who asks that his or her identity remain confidential and
shall not make any effort, or tolerate any effort made by any other person or
group, to ascertain the identity of any person who makes a report anonymously.
B-9
(j) Oversight Responsibilities. The Committee will undertake an annual
review of these Procedures and the reporting and investigation systems to
determine whether they are functioning properly. The Boards of Directors of the
Funds have reviewed and adopted these Procedures. The Boards of Directors will
review these Procedures periodically to assure that they appropriately address
then-existing requirements for attorney up-the-ladder reporting.
11. The Committee shall review this Charter at least annually and recommend
any changes to the full Board of Directors.
12. This Charter may be altered, amended or repealed, or a new Charter may
be adopted, by the Board by the affirmative vote of a majority of all the
members of the Board, including a majority of the "non-interested" Board members
(within the meaning of the Investment Company Act of 1940, as amended).
13. The Chief Executive Officer ("CEO") of the Fund shall certify to the
Audit Committee of the Fund annually that he is not aware of any violation by
the Fund of any corporate governance standards or policies to which the Fund is
subject. In addition, the CEO of the Fund must promptly notify the Audit
Committee in writing after any executive officer of the Fund becomes aware of
any material non-compliance with any applicable corporate governance listing
standard or policy.
14. (a) The Fund shall provide the NYSE, with respect to any subsequent
changes to the composition of the Audit Committee or otherwise approximately
once each year, written confirmation of the determinations required by Section 3
above.
(b) The CEO of the Fund shall certify to the NYSE annually that he is not
aware of any violation by the Fund of the NYSE corporate governance listing
standards and such certification shall be included in the Fund's annual report
to shareholders. If the CEO of the Fund provides notice to the NYSE upon receipt
of any report by any executive officer of any material non-compliance with any
applicable provisions of the NYSE corporate governance listing standards, copies
of any such certification or notice shall be provided to the Audit Committee of
the Fund.
B-10
| | |
| NEUBERGER | BERMAN |
|___________|________|
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, New York 10158-0180
www.nb.com
H0645 10/07
YOUR VOTE IS IMPORTANT NO MATTER HOW
MANY SHARES OF STOCK YOU OWN.
PLEASE SIGN AND DATE THE REVERSE SIDE
OF THIS PROXY CARD AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
THIS PROXY CARD IS VALID ONLY
WHEN SIGNED AND DATED.
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
ON FRIDAY, OCTOBER 26, 2007
P The undersigned appoints as proxies Robert Conti, Frederic B. Soule and
Claudia A. Brandon, and each of them (with power of substitution), to
R vote all the undersigned's shares of common stock of Neuberger Berman
Real Estate Income Fund Inc. at the Annual Meeting of Stockholders to be
O held on Friday, October 26, 2007, at 10:00 a.m. Eastern time at the
offices of Neuberger Berman, LLC, 605 Third Avenue, 42nd Floor, New
X York, New York 10158-3698, and any adjournments thereof ("Meeting"),
with all the power the undersigned would have if personally present.
y
Receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement is acknowledged by your execution of this proxy. THIS PROXY IS
BEING SOLICITED ON BEHALF OF THE FUND'S BOARD OF DIRECTORS.
The shares of common stock 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" THE ELECTION OF DIRECTORS. THIS PROXY
ALSO GRANTS 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. PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
SEE REVERSE SIDE SEE REVERSE SIDE
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. To elect one Class I Director, one Class II Director and one Class III
Director to serve until the annual meeting of stockholders in 2009, 2010,
and 2008, respectively, or until their successors are elected and qualified:
(01) Joel W. Looney--Class I FOR WITHHOLD FOR ALL
All ALL EXCEPT*
(02) John S. Horejsi--Class II
[ ] [ ] [ ]
(03) Dr. Dean L. Jacobson--Class III
|
*TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), MARK THE BOX "FOR ALL EXCEPT"
AND WRITE ON THE LINE BELOW THE NUMBER(S) OF THE NOMINEE(S) FOR WHOM YOU DO NOT
WANT TO VOTE.
If you plan to attend the meeting,
please call 1-877-461-1899.
Date ______________________, 2007
Signature (owner, trustee, custodian
etc.)
--------------------------------------
Signature, if held jointly
Please sign exactly as name appears
hereon. If shares are held in the name
of two or more persons, any may sign.
If shares are held by a corporation,
partnership, trust, estate or similar
account, the name and capacity of the
individual signing the proxy card
|
should be indicated unless it is
reflected in the form of registration.
YOUR VOTE IS IMPORTANT NO MATTER
HOW MANY SHARES OF STOCK YOU OWN.
PLEASE SIGN AND DATE THE REVERSE SIDE
OF THIS PROXY CARD AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
THIS PROXY CARD IS VALID ONLY
WHEN SIGNED AND DATED.
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
ON FRIDAY, OCTOBER 26, 2007
P The undersigned appoints as proxies Robert Conti, Frederic B. Soule and
Claudia A. Brandon, and each of them (with power of substitution), to
R vote all the undersigned's shares of preferred stock of Neuberger
Berman Real Estate Income Fund Inc. at the Annual Meeting of
O Stockholders to be held on Friday, October 26, 2007, at 10:00 a.m.
Eastern Time at the offices of Neuberger Berman, LLC, 605 Third
X Avenue, 42nd Floor, New York, New York 10158-3698, and any adjournments
thereof ("Meeting"), with all the power the undersigned would have if
Y personally present.
Receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement is acknowledged by your execution of this proxy. THIS PROXY
IS BEING SOLICITED ON BEHALF OF THE FUND'S BOARD OF DIRECTORS.
The shares of preferred stock 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" THE ELECTION OF DIRECTORS. THIS
PROXY ALSO GRANTS 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. PLEASE SIGN AND DATE THE REVERSE SIDE
OF THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
SEE REVERSE SIDE SEE REVERSE SIDE
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. To elect one Class I Director, two Class II Directors and two Class III
Directors to serve until the annual meeting of stockholders in 2009, 2010,
and 2008, respectively, or until their successors are elected and
qualified:
(01) Joel W. Looney--Class I
(02) John S. Horejsi--Class II FOR WITHHOLD FOR ALL
All ALL EXCEPT*
(03) Dr. Dean L. Jacobson--Class III
[ ] [ ] [ ]
(04) Richard I. Barr--Class II
|
(05) Susan L. Ciciora--Class III
*TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), MARK THE BOX "FOR ALL EXCEPT"
AND WRITE ON THE LINE BELOW THE NUMBER(S) OF THE NOMINEE(S) FOR WHOM YOU DO NOT
WANT TO VOTE.
If you plan to attend the meeting,
please call 1-877-461-1899.
Date __________________________, 2007
Signature (owner, trustee, custodian
etc.)
Signature, if held jointly
Please sign exactly as name appears
hereon. If shares are held in the
name of two or more persons, any may
sign. If shares are held by a
corporation, partnership, trust,
estate or similar account, the name
and capacity of the individual
signing the proxy card should be
indicated unless it is reflected in
the form of registration.
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