Neuberger Berman Realty Income Fund Inactive
Filed: 13 Apr 07, 12:00am
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. )
Filed by the Registrant | |
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
| | Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12
NEUBERGER BERMAN REALTY INCOME FUND INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
WESTERN INVESTMENT LLC
WESTERN INVESTMENT HEDGED PARTNERS L.P.
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.
BENCHMARK PLUS MANAGEMENT, L.L.C.
BENCHMARK PLUS PARTNERS, L.L.C.
ARTHUR D. LIPSON
ROBERT A. WOOD
D. JAMES DARAS
MATTHEW S. CROUSE
SCOTT FRANZBLAU
ROBERT FERGUSON
- --------------------------------------------------------------------------------
(Name of Persons(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:
- --------------------------------------------------------------------------------
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED APRIL 13, 2007
WESTERN INVESTMENT LLC
April [__], 2007
Dear Fellow Stockholder:
Western Investment LLC ("Western") together with our fellow participants
in this solicitation is one of the largest investors in Neuberger Berman Realty
Income Fund Inc. ("NRI" or the "Company"). We made our initial investment in NRI
in 2004, and over time have increased the amount of our investment in the
Company. We write to you regarding the annual meeting of stockholders scheduled
to be held on [______________] at [_____ a.m]. Western does not believe that the
current board of directors of NRI is acting in your best interests. Western is
therefore seeking your support at the annual meeting of stockholders for the
following purposes:
1. To elect Western's slate of nominees to NRI's Board of Directors,
including the Class II director entitled to be elected solely by
holders of NRI's shares of preferred stock, each to hold office
until the 2010 annual meeting NRI's stockholders and until their
successors are elected and qualify; and
2. To transact such other business as may properly come before the
annual meeting or any adjournment or postponement thereof.
Western urges you to carefully consider the information contained in the
attached proxy statement and then support its efforts by voting your shares
today by telephone or via the Internet as detailed in the enclosed GOLD proxy
card, or by signing, dating and returning today the enclosed GOLD proxy card in
the postage paid envelope provided. The attached proxy statement and GOLD proxy
card are first being furnished to the stockholders on or about [_________],
2007.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY NRI'S MANAGEMENT TO
NRI, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE BY SIGNING, DATING AND RETURNING
THE ENCLOSED GOLD PROXY CARD OR BY FOLLOWING THE INSTRUCTIONS FOR TELEPHONE OR
INTERNET VOTING DETAILED THEREON. ONLY YOUR LATEST DATED PROXY CARD COUNTS!
If you have any questions or require assistance voting your shares, please
contact Innisfree M&A Incorporated, which is assisting us, at their address and
toll-free number listed on the following page.
Thank you for your support,
/s/ Arthur D. Lipson
-----------------------------------
Arthur D. Lipson
Western Investment LLC.
- --------------------------------------------------------------------------------
If you have any questions or need assistance voting your shares, please call:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders Call Toll-Free at: (877) 456-3510
Banks and Brokers Call Collect at: (212) 750-5833
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE BE ADVISED:
o NRI HAS THE SAME DESCRIPTION AND INVESTMENT PHILOSOPHY AS TWO OTHER
NEUBERGER BERMAN CLOSED END FUNDS AND SHOULD BE CONSOLIDATED IN ORDER
TO REDUCE COSTS AND INCREASE LIQUIDITY (page __)
o NRI'S NAV DISCOUNT IS UNACCEPTABLE (page __)
o NRI'S BOARD HAS FAILED TO TAKE EFFECTIVE ACTION TO REDUCE THE
NAV DISCOUNT (page __)
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION CAN BE FOUND AT:
WWW.FIXMYFUND.COM
PRELIMINARY COPY
ANNUAL MEETING OF STOCKHOLDERS
OF
NEUBERGER BERMAN REALTY INCOME FUND
-------------------------
PROXY STATEMENT
OF
WESTERN INVESTMENT LLC
-------------------------
PLEASE VOTE YOUR SHARES TODAY BY TELEPHONE OR INTERNET, AS DESCRIBED IN THE
ENCLOSED GOLD PROXY CARD, OR BY SIGNING, DATING AND RETURNING THE GOLD PROXY
CARD IN THE POSTAGE PAID ENVELOPE PROVIDED.
Western Investment LLC a Delaware limited liability company ("Western" or
"we"), is a significant stockholder of Neuberger Berman Realty Income Fund Inc.
("NRI" or the "Company"). Western is writing to you in connection with the
election of five nominees to the board of directors of NRI, including the Class
II director entitled to be elected solely by holders of NRI's shares of
preferred stock, at the annual meeting of stockholders scheduled to be held
[____________________] at [____ a.m.], including any adjournments or
postponements thereof and any meeting which may be called in lieu thereof (the
"annual meeting"). This proxy statement and the enclosed GOLD proxy card are
first being furnished to stockholders on or about April [__], 2007.
This proxy statement and the enclosed GOLD proxy card are being furnished
to stockholders of NRI by Western in connection with the solicitation of proxies
from NRI's stockholders for the following proposals:
1. To elect Western's slate of nominees to NRI's Board of Directors,
including the Class II director entitled to be elected solely by
holders of NRI's shares of preferred stock, each to hold office
until the 2010 annual meeting of NRI's stockholders and until their
successors are elected and qualify; and
2. To transact such other business as may properly come before the
annual meeting or any adjournment or postponement thereof.
Western, Western Investment Hedged Partners L.P. ("WIHP"), Arthur D.
Lipson, Western Investment Activism Partners LLC ("WIAP"), Benchmark Plus
Institutional Partners, L.L.C. ("BPIP"), Benchmark Plus Partners, L.L.C.
("BPP"), Benchmark Plus Management, L.L.C. ("BPM"), Robert A. Wood, D. James
Daras, Matthew S. Crouse, Scott Franzblau and Robert Ferguson are members of a
group (the "Group") formed in connection with this proxy solicitation and are
deemed participants in this proxy solicitation.
NRI has set the close of business on February 21, 2007 as the record date
(the "record date") for determining stockholders entitled to notice of and to
vote at the annual meeting. The mailing address of the principal executive
offices of NRI is 605 Third Avenue, New York, New York 10158. Stockholders of
record at the close of business on the record date will be entitled to vote at
the annual meeting.
According to NRI, as of the record date, there were 27,372,139 shares of
Common Stock outstanding, $0.0001 par value per share (the "Common Shares"),
each Common Share entitled to one vote per share, and there were 9,120 shares of
1
$0.0001 par value per share preferred stock outstanding (the "Preferred
Shares" and together with the Common Shares, the "Shares"), each Preferred Share
entitled to one vote per share. As of the record date, Western, along with all
of the participants in this solicitation, were the collective beneficial owners
of an aggregate of 2,505,821 Common Shares and no Preferred Shares, which
represent approximately 9.2% of the votes entitled to be cast at the annual
meeting (based on NRI's proxy statement). The participants in this solicitation
intend to vote such Shares for the election of Western's nominee directors.
THIS SOLICITATION IS BEING MADE BY WESTERN AND NOT ON BEHALF OF THE BOARD OF
DIRECTORS OR MANAGEMENT OF NRI. WESTERN IS NOT AWARE OF ANY OTHER MATTERS TO BE
BROUGHT BEFORE THE ANNUAL MEETING. SHOULD OTHER MATTERS, WHICH WESTERN IS NOT
AWARE OF WITHIN A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE
THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED GOLD PROXY CARD
WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
WESTERN URGES YOU TO VOTE IN FAVOR OF THE ELECTION OF WESTERN'S NOMINEES EITHER
BY TELEPHONE OR BY INTERNET AS DESCRIBED IN THE ENCLOSED GOLD PROXY CARD OR BY
SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD TODAY.
IF YOU HAVE ALREADY GIVEN A PROXY TO NRI's MANAGEMENT, YOU MAY REVOKE THAT PROXY
AND VOTE IN FAVOR OF WESTERN'S NOMINEES BY VOTING YOUR SHARES BY TELEPHONE OR BY
INTERNET AS DESCRIBED IN THE ENCLOSED GOLD PROXY CARD OR BY SIGNING, DATING AND
RETURNING THE ENCLOSED GOLD PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE
THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY
AUTHORIZING A LATER PROXY BY TELEPHONE OR INTERNET OR BY DELIVERING A WRITTEN
NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING TO WESTERN,
C/O INNISFREE M&A INCORPORATED, WHICH IS ASSISTING IN THIS SOLICITATION, OR TO
THE SECRETARY OF NRI (WITH A COPY TO INNISFREE M&A INCORPORATED), OR BY VOTING
IN PERSON AT THE ANNUAL MEETING.
2
IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
If you have already sent a proxy card furnished by NRI's management to
NRI, you have every right to change your vote by signing, dating and returning
the enclosed GOLD proxy card or by following the instructions for telephone or
internet voting detailed thereon. Only your latest dated proxy card counts!
YOU MAY VOTE YOUR SHARES BY TELEPHONE OR INTERNET, AS DESCRIBED IN THE
ENCLOSED GOLD PROXY CARD, OR BY SIGNING, DATING AND RETURNING TODAY THE ENCLOSED
GOLD PROXY CARD, MARKED FOR THE ELECTION OF WESTERN'S NOMINEES.
o If your Shares are registered in your own name, you may vote your Shares by
following the instructions for Internet voting detailed on the enclosed GOLD
proxy card, by calling the toll-free number contained therein, or by signing,
dating and mailing the enclosed GOLD proxy card in the enclosed return
envelope to Western, c/o Innisfree M&A Incorporated, in the enclosed
postage-paid envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the record date, only it can vote such Shares
and only upon receipt of your specific instructions. Accordingly, please
provide your broker or bank with voting instructions to vote on your behalf
the GOLD proxy card. In addition, if you hold your Shares in a brokerage or
bank account, your broker or bank may allow you to provide your voting
instructions by telephone or Internet. Please consult the materials you
receive from your broker or bank prior to authorizing a proxy by telephone or
Internet. Western urges you to confirm your instructions in writing to the
person responsible for your account and to provide a copy of such
instructions to Western, c/o Innisfree M&A Incorporated, who is assisting in
this solicitation, at the address and telephone numbers set forth below, and
on the back cover of this proxy statement, so that we may be aware of all
instructions and can attempt to ensure that such instructions are followed.
If you have any questions or need assistance voting your Shares, please call:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders Call Toll-Free at: (877) 456-3510
Banks and Brokers Call Collect at: (212) 750-5833
ADDITIONAL INFORMATION CAN BE FOUND AT:
WWW.FIXMYFUND.COM
3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NRI HAS THE SAME DESCRIPTION AND INVESTMENT PHILOSOPHY AS TWO OTHER NEUBERGER
BERMAN CLOSED END FUNDS. THESE 3 FUNDS SHOULD BE CONSOLIDATED IN ORDER TO REDUCE
COSTS AND INCREASE LIQUIDITY
NRI is extremely similar to two other funds managed by Neuberger Berman
Management Inc.: Neuberger Berman Real Estate Securities Income Fund Inc.
("NRO") and Neuberger Berman Real Estate Income Fund ("NRL"). Each of NRI, NRO
and NRL have the same description and investment philosophy as described on
Neuberger Berman's website and each fund has the same portfolio manager. In
light of the relative small size of these three funds, with a combined market
capitalization of under $1.5 billion, we believe these three funds should be
consolidated into one. We believe this could have the benefit of a reduction of
costs, thereby increasing returns, as well as increasing liquidity. The
increased liquidity from one larger fund would, we believe, be advantageous to
all stockholders.
We further believe the similarities of names and investment objectives of
NRI, NRO and NRL create needless confusion among investors, detracting from the
investment appeal of NRI and the other funds.
Western also beneficially owns over 7% of each of NRL and NRO, has
nominated the same five people for election as director of NRO at NRO's upcoming
annual meeting scheduled for May __, 2007, and is soliciting proxies on behalf
of their election.
NRI'S NAV DISCOUNT IS UNACCEPTABLE
Except for its first few months of existence, NRI's share price has traded at a
double-digit discount to its per share net asset value ("NAV") since its
inception (as of fiscal year-end for each such year), ranging between 12% and
17% . Thus, when NRI stockholders sell their shares they are forced to leave
behind a sizeable portion of the value underlying those shares. We believe that
the persistence of this discount is in part due to stockholder's confusion and
the inherent inefficiency resulting from multiple funds with virtually identical
names and investment objectives, as well as the perception that the persistent
and substantial NAV discount is not being, and will not be, addressed. NRI
stockholders are being damaged by the discount, in that should they choose to
leave the fund, they must sell their shares at a discounted market price. We
believe the fair value of a closed end fund should be its NAV, or a value very
close to its NAV.
The table below shows the discount of the NRI's fiscal year-end stock
price to NRI's fiscal year-end NAV since its inception in 2003.
NAV
October 31 Discount
---------- --------
2003(1) -4%
2004 -12%
2005 -17%
2006 -15%
As an existing NRI stockholder, Western is extremely concerned that NRI's
common stock continues to trade at a double-digit NAV discount. Assuming a NAV
discount of 15% (the discount on October 31, 2006), this had the effect that,
- ------------
(1) Period from April 29, 2003 until October 31, 2003.
4
for each $1 of underlying NRI net asset value, a share of NRI common stock would
trade at approximately 85 cents. So long as the NAV discount persists, existing
NRI stockholders who sell their shares of common stock will sell them at a
discount to the underlying net asset value. NRI common stock is traded on the
New York Stock Exchange, and share prices are determined by the market, which to
date has the value to be much less than the underlying NAV.
NRI'S BOARD HAS FAILED TO TAKE EFFECTIVE ACTION TO REDUCE THE NAV DISCOUNT
We believe that NRI's board is indifferent to the plight of NRI's
stockholders. The discount to NAV reached a high of close to 18% in December
2005, and in 2006 the average discount to NAV was over ____%. We do not
understand why the Board has not been more proactive in addressing this
continued NAV discount. We note in NRI's proxy statement that NRI has belatedly
announced that it intends to file with the SEC an application for relief for
certain exemptions which it says may enable NRI to implement a managed
distribution plan.
This proposal is too little, too late.
o We believe the Board should announce what the rate of managed distribution is
anticipated to be.
o Why has the Board waited so long to address the NAV discount?
o We believe the Board should immediately implement a significant distribution
policy prior to obtaining relief from the SEC.
Tri-Continental Corporation ("Tri-Continental") recently included a
constructive and proactive proposal in its proxy statement seeking stockholder
approval for an immediate distribution policy providing for an aggregate annual
distribution to stockholders of 11% of the net asset value attributable to a
share of common stock. In addition, Tri-Continental announced that it plans to
seek exemptive relieve from the SEC in connection with the continuation of the
distribution policy. Tri-Continental joins many other funds who have taken
immediate, constructive actions to address a persistent discount in an effective
manner
Recently, the discount to NAV, while still too high, has gone down a
little. We believe this reduction is primarily attributable to Western's
announcement of its ownership in NRI and NRO and the concerns Western has raised
and actions it has taken regarding the NAV discount in each fund.
NRI needs directors who are truly concerned with NRI's stockholders.
OUR INTERESTS ARE ALIGNED WITH YOURS
Western and the other participants are significant investors in NRI and
remain committed to our investment the Company. We made our first investment in
NRI as long ago as 2004, and currently are one of NRI's largest stockholders.
Our interests are aligned with the interests of all stockholders-if our
investment in NRI prospers, so does yours. We have no intention of seeking to
open-end or liquidate NRI. Western proposes to elect Arthur D. Lipson, Robert A.
Wood, D. James Daras and Scott Franzblau (the "Nominees") and Matthew Crouse
(the "Preferred Shares Nominee") as nominees (collectively the "Nominees") to
NRI's Board of Directors. Arthur D. Lipson, Robert A. Wood, D. James Daras and
Scott Franzblau, the Nominees, must be elected by the holders of a majority of
NRI's outstanding common shares and preferred shares, voting together. In
addition, holders of NRI's Preferred Shares are entitled, as a class, to the
exclusion of the holders of all other classes of stock of NRI, to elect two
directors to the board, one of whom is up for election this year (the "Preferred
Share Director"). We have nominated Matthew Crouse as the Preferred Shares
Nominee to be elected by a majority of the holders of Preferred Shares.
5
Western believes that our five Nominees together have extensive experience
in private and public investment, a history of outstanding investment records,
and have outstanding credentials. If elected, the Nominees will work on behalf
of all stockholders to influence each member of NRI's Board to take all actions
necessary to maximize the value of your Shares, including through consolidation
with NRO and NRL, and to reduce NRI's share price net asset value discount to
less than 5% of the underlying value of its shares.
OUR NOMINEES
The following information sets forth the name, age, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of our four
Nominees.
ARTHUR D. LIPSON (AGE 64) has been managing private investment
partnerships since 1995. He has been the sole managing member of Western, a
Delaware limited liability company that has acted as the general partner,
managing member or investment manager, as the case may be, of private investment
partnerships in the Western funds since 1997. Western specializes in investing
in undervalued companies. Mr. Lipson has additional substantial experience in
sales & trading and research, including previously heading all fixed income
research for Lehman Brothers and for Paine Webber, was a known leader in the
industry, and created, among other things, the Lehman Brothers bond indices. Mr.
Lipson received a Masters of Science from Columbia University and a Bachelor of
Science from the California Institute of Technology. Mr. Lipson's business
address is c/o Western Investment LLC, 7050 South Union Park Center, Suite 590,
Midvale, Utah 84047.
ROBERT A. WOOD (AGE 70) has been a Distinguished Professor of Finance at
the University of Memphis, since July 1990. Professor Wood previously taught at
Penn State University and New York University. His education includes a PhD in
Finance from the University of Pittsburgh, a Masters in Operations Research from
Stanford University, and a Bachelors in Economics from the University of
Washington. He was a member of the Presidential Task Force on Market Mechanisms
(The Brady Commission) that studied the market crash in 1987, and a founding
member of the NASD Economic Advisory Board. Professor Wood is the founder and
Executive Director of the Institute for the Study of Security Markets, a
nonprofit Educational Foundation that promotes securities markets research by
providing transactions data to academic institutions. Mr. Wood's business
address is c/o Fogelman College of Business & Economics, The University of
Memphis, Memphis, TN 38152.
D. JAMES DARAS (AGE 53) has been a Partner of Inter-Atlantic Group, a
money manager specializing in the financial services sector, since December
2004. From February 2002 to December 2004, he served as Chief Executive Officer
of The JW Group, a consulting firm that provides services to private investors
focused on fixed income and financial services related to equity and preferred
stock securities. During this period, he also served as an Advisor to the
Franklin Madison Group, a consulting group specializing in financial institution
performance enhancement offering services in the area of financial management,
capital markets activities, risk management, information technology and
operations. From 1990 to 2002, he served as Executive Vice President, Treasurer
and Asset Liability Management Executive for DIME Bancorp, where he was Chairman
of the Asset-Liability Management Committee and responsible for all capital
markets activities, interest rate risk management and balance sheet financial
strategy. Mr. Daras's business address is c/o Inter-Atlantic Group, 400 Madison
Avenue, 16th Floor, New York, NY 10017.
6
SCOTT FRANZBLAU (AGE 50) has served as a principal of Benchmark Plus
Management, L.L.C., the managing member of BPP, since 2003. BPP is in the
business of acquiring, holding and disposing of investments in various
companies. Prior to joining BPM, Mr. Franzblau founded Parkway Capital
Corporation, a NASD registered broker/dealer that provided structured financing
to institutional investors. Mr. Franzblau's business address is c/o Benchmark
Plus Management, L.L.C., 820 A Street, Suite 700, Tacoma, WA 98402.
MATTHEW S. CROUSE (AGE 35) has served as a portfolio manager at Western
since February 2003. From January 2002 to January 2003, he served as the Manager
of Market Risk Control for Duke Energy, a utility company with an affiliated
real estate operation. From June 2000 to December 2001, he served as
Manager/Director of Research for The New Power Company, a retail energy
supplier. Mr. Crouse received a Ph.D. in Electrical Engineering from Rice
University and a Masters of Business Administration from the University of
Houston. Mr. Crouse's business address is c/o Western Invsetment LLC, 7050 South
Union Park Center, Suite 590, Midvale, Utah 84047.
The information provided above has been furnished to Western by the
Nominees. The Nominees are citizens of the United States of America. None of the
Nominees are "interested persons" of the Company within the meaning of Section
2(a)(19) of the Investment Company Act of 1940.
ADDITIONAL INFORMATION ABOUT THE NOMINEES
As of the record date, the dollar range of shares of NRI beneficially
owned by each Nominee is as follows:
Name of Nominee Dollar Range of Equity Securities in Nri
--------------- ----------------------------------------
Arthur D. Lipson Over $100,000
Robert A. Wood --
D. James Daras --
Matthew Crouse --
Scott Franzblau Over $100,000
There can be no assurance that the election of our Nominees will improve
the Company's business or otherwise enhance stockholder value. Your vote to
elect the Nominees will have the legal effect of replacing NRI's four incumbent
directors, including the Class II director entitled to be elected solely by
holders of NRI's shares of preferred stock, with our Nominees.
Matthew Crouse is currently an employee of Western.
Other than as stated herein, the Nominees will not receive any
compensation from Western for their services as directors of NRI, nor are there
any arrangements or understandings between Western and any of the Nominees or
any other person or persons pursuant to which the nomination described herein is
to be made, other than the consent by each of the Nominees to be named in this
proxy statement and to serve as a director of NRI if elected as such at the
annual meeting. None of the Nominees is a party adverse to NRI or any of their
subsidiaries or has a material interest adverse to NRI or any of their
subsidiaries in any material pending legal proceedings.
7
Western does not expect that the Nominees will be unable to stand for
election, but, in the event that such persons are unable to serve or for good
cause will not serve, the Shares represented by the enclosed GOLD proxy card
will be voted for substitute nominees. In addition, Western reserves the right
to nominate substitute persons if NRI makes or announces any changes to its
bylaws or takes or announces any other action that has, or if consummated would
have, the effect of disqualifying the Nominees. In any such case, Shares
represented by the enclosed GOLD proxy card will be voted for such substitute
nominees. NRI announced that at a Board meeting held in February 2007, its Board
expanded the size of the Board from thirteen to fifteen and appointed two
directors to fill the vacancies created by the expansion. NRI's proxy discloses
that there are five directors up for election at this meeting, instead of four.
Accordingly, Western has nominated a total of five persons for election to the
NRI Board of Directors. Western reserves the right to nominate additional
persons if NRI further increases the size of its board of directors above its
existing size, increases the number of directors whose terms expire at the
annual meeting or call a meeting to fill any vacancies on NRI's board of
directors. Additional nominations made pursuant to the preceding sentence are
without prejudice to the position of Western that any attempt to increase the
size of NRI's board of directors or to reconstitute or reconfigure the classes
on which the current directors serve constitutes an unlawful manipulation of
NRI's corporate machinery.
YOU ARE URGED TO VOTE FOR THE ELECTION OF WESTERN'S NOMINEES ON THE ENCLOSED
GOLD PROXY CARD.
8
VOTING AND PROXY PROCEDURES
Only stockholders of record on the record date will be entitled to notice
of and to vote at the annual meeting. Each Common Share is entitled to one vote.
Each Preferred Share is entitled to one vote. Only holders of Preferred Shares
are entitled to vote for the Preferred Share Director. Stockholders who sell
Shares before the record date (or acquire them without voting rights after the
record date) may not vote such Shares. Stockholders of record on the record date
will retain their voting rights in connection with the annual meeting even if
they sell such Shares after the record date. Based on publicly available
information, Western believes that the only outstanding classes of securities of
NRI entitled to vote at the annual meeting are the Common Shares and Preferred
Shares.
Stockholders, including those who expect to attend the annual meeting, are
urged to vote their Shares today by following the instructions for Internet
voting detailed on the enclosed GOLD proxy card, by calling the toll-free number
contained therein, or by signing, dating and mailing the enclosed GOLD proxy
card in the enclosed return envelope to Western, c/o Innisfree M&A Incorporated,
in the enclosed postage-paid envelope.
Authorized proxies will be voted at the annual meeting as marked and, in
the absence of specific instructions, will be voted FOR the election of
Western's Nominees and in the discretion of the person named as proxy on all
other matters as may properly come before the annual meeting.
We are asking you to vote FOR the election of Western's Nominees. The
enclosed GOLD proxy card may only be voted for our Nominees and does not confer
voting power with respect to the Company's nominees. Stockholders should refer
to the Company's proxy statement for the names, backgrounds, qualifications and
other information concerning the Company's nominees. The participants in this
solicitation intend to vote all of their Shares for the election of Western's
Nominees and will not vote their Shares in favor of any of NRI's director
nominees.
QUORUM
In order to conduct any business at the annual meeting, a quorum must be
present in person or represented by valid proxies. The presence in person or by
proxy of stockholders entitled to cast a majority of all the votes entitled to
be cast at the annual meeting constitutes a quorum. All Shares that are voted
"FOR", "AGAINST" or "ABSTAIN" (or "WITHHOLD" in the case of election of
directors) on any matter will count for purposes of establishing a quorum and
will be treated as Shares entitled to be voted at the annual meeting.
VOTES REQUIRED FOR APPROVAL
ELECTION OF DIRECTORS. As stated in NRI's proxy statement, if a quorum is
present at the annual meeting, nominees receiving the affirmative vote of the
holders of a majority of NRI's outstanding Common and Preferred Shares voting
together will be elected as directors of the Company, and the affirmative vote
of the holders of a majority of NRI's outstanding Preferred shares, voting
separately from the holders of common shares, is required to elect the Preferred
Share Director.
ABSTENTIONS
Abstentions will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. For purposes of the
vote on the election of each nominee for director abstentions and broker
non-votes, if any, will be a vote against any adjournment and against the
election of the Nominees.
9
REVOCATION OF PROXIES
Stockholders NRI may revoke their proxies at any time prior to exercise by
attending the annual meeting and voting in person (although attendance at the
annual meeting will not in and of itself constitute revocation of a proxy), by
delivering a later-dated proxy by Internet, by telephone or by mail, or by
delivering a written notice of revocation. The delivery of a later-dated proxy
which is properly completed will constitute a revocation of any earlier proxy.
The revocation may be delivered either to Western in care of Innisfree M&A
Incorporated at the address set forth on the back cover of this proxy statement
or to Neuberger Berman Realty Income Fund at 605 Third Avenue, New York, New
York 10018 or any other address provided by NRI. Although a revocation is
effective if delivered to NRI, Western requests that either the original or
photostatic copies of all revocations be mailed to Western in care of Innisfree
M&A Incorporated at the address set forth on the back cover of this proxy
statement so that Western will be aware of all revocations and can more
accurately determine if and when proxies have been received from the holders of
record on the record date of a majority of the outstanding Shares. Additionally,
Innisfree M&A Incorporated may use this information to contact stockholders who
have revoked their proxies in order to solicit later-dated proxies for the
election of the Nominees and approval of other proposals described herein.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO NRI'S BOARD, PLEASE VOTE
YOUR SHARES BY TELEPHONE OR INTERNET, AS DESCRIBED IN THE ENCLOSED GOLD PROXY
CARD, OR BY SIGNING, DATING AND RETURNING PROMPTLY THE ENCLOSED GOLD PROXY CARD,
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
10
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this proxy statement is being made
by Western. Proxies may be solicited by mail, facsimile, telephone, Internet, in
person and by advertisements.
Western has entered into an agreement with Innisfree M&A Incorporated for
solicitation and advisory services in connection with this solicitation, for
which Innisfree M&A Incorporated will receive a fee not to exceed $[_______],
together with reimbursement for its reasonable out-of-pocket expenses, and will
be indemnified against certain liabilities and expenses, including certain
liabilities under the federal securities laws. Innisfree M&A Incorporated will
solicit proxies from individuals, brokers, banks, bank nominees and other
institutional holders. Western has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to
the beneficial owners of the Shares they hold of record. Western will reimburse
these record holders for their reasonable out-of-pocket expenses in so doing. It
is anticipated that Innisfree M&A Incorporated will employ approximately 25
persons to solicit NRI's stockholders for the annual meeting.
The entire expense of soliciting proxies is being borne by Western,
subject to certain limitations, pursuant to the terms of the Joint Filing and
Solicitation Agreement described below. WIHP, WIAP, BPIP, BPM and BPP have
separately agreed to reimburse Western on a pro rata basis for these expenses.
Because Western believes that NRI's stockholders will benefit from the
Solicitation (defined below), Western intends to seek reimbursement from NRI, to
the fullest extent permitted by law, of all expenses it incurs in connection
with the Solicitation. If necessary, Western will ask NRI to submit an
application in this regard to, and obtain an order or a no-action letter from,
the Securities and Exchange Commission. Western does not intend to submit the
question of such reimbursement to a vote of security holders of NRI unless
otherwise required by law. Costs of this solicitation of proxies are currently
estimated to be approximately $100,000. Western estimates that through the date
hereof, its expenses in connection with this Solicitation are approximately
$10,000.
OTHER PARTICIPANT INFORMATION
Each member of the Group is a participant in this Solicitation. Arthur D.
Lipson is the managing member of Western, a Delaware limited liability company.
Western is the general partner and managing member, of WIHP and WIAP
respectively. The principal business address of Mr. Lipson, Western, WIHP and
WIAP is c/o Western Investment LLC, 7050 South Union Park Center, Suite 590,
Midvale, Utah 84047. The principal business address of Mr. Wood is c/o Fogelman
College of Business & Economics, The University of Memphis, Memphis, TN 38152.
The principal business address of Mr. Daras is c/o Inter-Atlantic Group, 400
Madison Avenue, 16th Floor New York, NY 10017. The principal business address of
Mr. Crouse is c/o Western Investment LLC, 7050 South Union Park Center, Suite
590, Midvale, Utah 84047.
Messrs. Franzblau and Ferguson are managing members of BPM, a Delaware
limited liability company. BPM is the managing member of BPIP, a Delaware
limited liability company and of BPP, a Delaware limited liability company. The
principal business address of BPIP, BPM, BPP, Mr. Franzblau and Mr. Ferguson is
820 A Street, Suite 700, Tacoma, WA 98402.
Western provides recommendations from time to time to BPIP and BPP with
respect to purchases and sales of Shares of NRI, pursuant to an oral agreement
between Western and BPIP, and between Western and BPP. Each of WIHP, Western,
Mr. Lipson and WIAP disclaim beneficial ownership of the Shares beneficially
owned by the other members of the Group. Each of BPP, BPIP, BPM, Mr. Franzblau
and Mr. Ferguson disclaim beneficial ownership of the Shares beneficially owned
by the other members of the Group. Each of Mr. Wood, Mr. Daras and Mr. Crouse
disclaim beneficial ownership of the Shares beneficially owned by the other
members of the Group.
11
Each of Western and Mr. Lipson is deemed to have sole voting and
dispositive power over the Shares reported as beneficially owned by WIHP and
WIAP by virtue of their respective positions described above. Each of BPM, Mr.
Franzblau and Mr. Ferguson is deemed to have sole voting and dispositive power
over the Shares beneficially owned by BPIP and BPP by virtue of their respective
positions described above. None of Western, WIHP, Mr. Lipson or WIAP has voting
or dispositive control over the Shares beneficially owned by the other members
of the Group. None of BPP, BPIP, BPM, Mr. Franzblau or Mr. Ferguson has voting
or dispositive control over the Shares beneficially owned by the other members
of the Group. None of Mr. Wood, Mr. Daras or Mr. Crouse has voting or
dispositive control over the Shares beneficially owned by the other members of
the Group
The principal business of Western is acting as the general partner and
managing member of WIHP and WIAP, respectively. The principal occupation of Mr.
Lipson is acting as managing member of Western. The principal business of WIHP
and WIAP is acquiring, holding and disposing of investments in various
companies. The principal occupation of Mr. Crouse is serving as a portfolio
manager at Western. The principal business of BPIP is acquiring, holding and
disposing of investments in various companies. The principal business of BPP is
acquiring, holding and disposing of investments in various companies. The
principal business of BPM is acting as the managing member of each of BPIP and
BPP. The principal occupation of Scott Franzblau is acting as a managing member
of BPM. The principal occupation of Robert Ferguson is acting as a managing
member of BPM. The principal occupation of Mr. Wood is serving as Professor of
Finance at the University of Memphis. The principal occupation of Mr. Daras is
serving as partner of Inter-Atlantic Group, a money management company.
For information regarding purchases and sales of securities of NRI during
the past two years by Western, Mr. Lipson, WIHP, WIAP, Mr. Wood, Mr. Daras and
Mr. Crouse, BPIP, BPM, BPP, Mr. Franzblau, Mr. Ferguson and affiliates of
Western and BPM that no longer own any Shares, see Schedule I to this proxy
statement. WIHP, WIAP, BPIP and BPP purchased their Shares in margin accounts,
where they are held together with other publicly traded securities.
On November 30, 2006 the members of the Group and Paradigm Partners, N.W.,
Inc. and Michael Dunmire, entered into a Joint Filing and Solicitation Agreement
(from which Paradigm Partners, N.W., Inc. and Michael Dunmire have since
withdrawn related to Mr. Dunmire's retirement) in which, among other things, (a)
the parties agreed to the joint filing on behalf of each of them of statements
on Schedule 13D with respect to the securities of NRI to the extent required by
applicable law, (b) the parties agreed to solicit proxies or written consents
for the election of the Nominees, or any other person(s) nominated by Western
and Mr. Lipson, to each of the NRI's board of directors at the annual meeting
(the "Solicitation"), (c) Western agreed to indemnify and hold each of Robert
Wood, D. James Daras and Matthew Crouse harmless from and against any and all
claims of any nature, whenever brought, arising from the Nominee's nomination
for election as a director of NRI, and the related proxy solicitation by
Western, Arthur Lipson and certain of their affiliates and any related
transactions, irrespective of the outcome, and (d) Western agreed to bear all
expenses incurred in connection with the Group's activities, including approved
expenses incurred by any of the parties in connection with the Solicitation,
subject to certain limitations. WIHP, WIAP, BPIP, BPM, and BPP have separately
agreed to reimburse Western on a pro rata basis for expenses incurred in
connection with the Solicitation.
As of the record date, WIHP and WIAP beneficially owned 767,638 and
790,682 Common Shares respectively, constituting approximately __%, and __%,
respectively, of the votes entitled to be cast at the annual meeting. Western
directly owned 1,000 Common Shares, constituting less than 1% of the votes
entitled to be cast at the annual meeting. As the general partner or managing
member, as the case may be, of WIHP, and WIAP, Western may be deemed to
12
beneficially own the 1,558,320 Common Shares owned in the aggregate by WIHP and
WIAP, in addition to the 1,000 Common Shares owned directly by Western as of the
record date. As the managing member of Western, Mr. Lipson may be deemed to
beneficially own the 1,559,320 Common Shares beneficially owned by Western as of
the record date.
As of the record date, BPIP and BPP beneficially owned 574,801 and 371,700
Common Shares, respectively, constituting approximately ___% and ___%,
respectively, of the votes entitled to be cast at the annual meeting. As the
managing member of BPP and BPIP, BPM may be deemed to beneficially own the
946,501 Common Shares owned by BPP and BPIP. As the managing members of BPM,
Messrs. Franzblau, and Ferguson may be deemed to beneficially own the 946,501
Common Shares beneficially owned by BPM.
Except as set forth in this proxy statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this Solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this Solicitation directly or indirectly
beneficially owns any securities of NRI; (iii) no participant in this
Solicitation owns any securities of NRI which are owned of record but not
beneficially; (iv) no participant in this Solicitation has purchased or sold any
securities of NRI during the past two years; (v) no part of the purchase price
or market value of the securities of NRI owned by any participant in this
Solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
Solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
NRI including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies; (vii) no associate
of any participant in this Solicitation owns beneficially, directly or
indirectly, any securities of NRI; (viii) no participant in this Solicitation
owns beneficially, directly or indirectly, any securities of any parent or
subsidiary of NRI; (ix) no participant in this Solicitation or any of
his/her/its associates was a party to any transaction, or series of similar
transactions, since the beginning of NRI's last fiscal year, or is a party to
any currently proposed transaction, or series of similar transactions, to which
the Company or any of its subsidiaries was or is to be a party, in which the
amount involved exceeds $120,000; (x) no participant in this Solicitation or any
of his/her/its associates has any arrangement or understanding with any person
with respect to any future employment by NRI or its affiliates, or with respect
to any future transactions to which NOR or any of its affiliates will or may be
a party; and (xi) no person, including the participants in this Solicitation,
who is a party to an arrangement or understanding pursuant to which the Nominees
are proposed to be elected has a substantial interest, direct or indirect, by
security holdings or otherwise in any matter to be acted on at the annual
meeting.
OTHER MATTERS AND ADDITIONAL INFORMATION
Western is unaware of any other matters to be considered at the annual
meeting. However, should other matters, which Western is not aware of a
reasonable time before this Solicitation, be brought before the annual meeting,
the person named as a proxy on the enclosed GOLD proxy card will vote on such
matters in their discretion.
Western has omitted from this proxy statement certain disclosure required
by applicable law that is already included in the Company's proxy statement.
This disclosure includes, among other things, biographical information on NRI's
directors and executive officers, the dollar range of shares owned by directors
of the Company and information on committees of NRI's board of directors.
Stockholders should refer to NRI's proxy statement in order to review this
disclosure.
13
According to the Company's proxy statement, the Company's manager is
Neuberger Berman Management Inc.
See Schedule II of this proxy statement for information regarding persons
who beneficially own more than 5% of the Shares and the ownership of the Shares
by the management of NRI.
The information concerning NRI contained in this proxy statement and the
Schedules attached hereto has been taken from, or is based upon, publicly
available information.
WESTERN INVESTMENT, LLC
APRIL [__], 2007
14
SCHEDULE I
PURCHASES AND SALES IN THE COMMON STOCK OF NRI
DURING THE PAST TWO YEARS
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
WESTERN INVESTMENT HEDGED PARTNERS L.P.
Buy 2,300 03/01/05 17.4028
Buy 2,500 03/08/05 17.8085
Buy 500 03/16/05 17.1385
Buy 4,800 03/17/05 17.0688
Buy 4,000 03/18/05 16.9813
Buy 3,300 03/21/05 16.7336
Buy 1,900 03/22/05 16.6419
Buy 6,300 03/23/05 16.0209
Buy 2,700 03/28/05 16.2034
Buy 800 03/29/05 16.2748
Buy 700 04/01/05 16.5762
Sell 5,000 04/01/05 16.6083
Buy 400 04/04/05 16.5285
Buy 300 04/06/05 16.5385
Buy 3,200 04/07/05 16.6733
Buy 600 04/12/05 16.5218
Buy 800 04/14/05 16.7398
Buy 900 04/19/05 16.6785
Buy 1,000 04/22/05 16.6585
Buy 1,100 04/27/05 16.9685
Buy 500 05/02/05 17.1785
Sell 5,000 05/02/05 17.2083
Buy 1,000 05/03/05 17.2485
Buy 1,900 05/11/05 17.4122
Buy 4,500 05/12/05 17.4128
Buy 4,800 05/17/05 17.2826
Buy 700 05/18/05 17.4485
Sell 2,500 07/01/05 18.8372
Buy 1,600 08/01/05 19.7085
Sell 2,500 08/01/05 19.7272
Sell 707 09/13/05 19.0770
Sell 9,700 09/13/05 19.0700
Sell 131 09/13/05 19.0324
Sell 10,000 10/03/05 18.8987
Sell 100 10/04/05 18.8807
Sell 3,200 11/01/05 18.0298
Buy 700 01/20/06 19.1393
Buy 3,500 01/20/06 19.1351
Buy 1,500 06/12/06 19.3007
I-1
Buy 2,400 06/13/06 19.1092
Buy 20,700 06/13/06 19.0281
Buy 3,500 06/14/06 18.9949
Buy 11,200 06/15/06 19.2559
Buy 20,000 06/15/06 19.2300
Buy 10,100 06/16/06 19.2300
Buy 5,900 06/19/06 19.1793
Buy 400 06/20/06 19.0900
Buy 8,500 06/21/06 19.1138
Buy 9,100 06/21/06 19.1561
Buy 4,500 06/26/06 19.2069
Buy 14,800 06/27/06 19.3092
Buy 30,600 06/29/06 19.5184
Buy 26,900 06/30/06 19.8546
Buy 4,500 07/03/06 20.0872
Buy 3,500 07/05/06 20.2205
Buy 3,700 07/07/06 20.3188
Buy 10,700 07/10/06 20.3066
Buy 8,800 07/11/06 20.3460
Buy 36,300 07/12/06 20.4196
Buy 13,000 07/17/06 19.8274
Buy 13,400 07/18/06 19.9740
Buy 23,000 07/19/06 20.4314
Buy 2,100 07/24/06 20.2955
Buy 29,700 08/15/06 20.9738
Buy 76,100 08/15/06 20.9337
Buy 21,400 08/16/06 21.0591
Buy 3,300 08/21/06 21.1650
Buy 600 08/22/06 21.3284
Buy 46,700 08/23/06 21.3622
Buy 21,700 08/24/06 21.3734
Buy 3,700 08/25/06 21.4045
Buy 1,800 08/29/06 21.5806
Buy 500 08/30/06 21.7950
Buy 2,100 08/31/06 21.8750
Buy 4,900 09/06/06 21.8470
Buy 300 09/07/06 21.6683
Buy 3,200 09/08/06 21.6472
Buy 38,800 09/11/06 21.7243
Buy 69,200 09/12/06 21.9231
Sell 8,000 09/12/06 21.8331
Sell 8,000 09/13/06 22.0231
Sell 3,500 09/14/06 21.9515
Sell 13,400 09/18/06 21.9975
Buy 3,200 11/28/06 23.5600
Buy 3,800 11/29/06 23.9687
Buy 4,600 11/29/06 24.0372
I-2
Buy 1,700 11/30/06 24.0700
Buy 8,100 11/30/06 24.1205
Buy 7,000 12/01/06 24.2625
Buy 1,200 12/04/06 24.5408
Buy 100 12/05/06 24.7050
Buy 1,700 12/19/06 23.4150
Buy 3,200 12/20/06 23.6037
Buy 300 12/21/06 23.7783
Buy 3,600 01/03/07 24.1484
Buy 300 01/05/07 23.8683
Buy 1,200 01/10/07 24.2033
Buy 2,100 01/24/07 25.3834
Buy 1,000 01/25/07 25.5310
Buy 11,200 02/06/07 26.5166
Buy 26,700 02/07/07 26.8294
Buy 28,400 02/08/07 27.0225
Buy 32,900 02/09/07 26.4357
WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC
Buy 2,500 03/08/05 17.8085
Buy 1,000 03/15/05 17.3085
Buy 500 03/16/05 17.1385
Buy 4,800 03/17/05 17.0688
Buy 3,900 03/18/05 16.9813
Buy 3,200 03/21/05 16.7336
Buy 1,900 03/22/05 16.6419
Buy 6,200 03/23/05 16.0209
Buy 2,600 03/28/05 16.2034
Buy 800 03/29/05 16.2748
Buy 600 04/01/05 16.5762
Sell 5,000 04/01/05 16.6083
Buy 3,100 04/07/05 16.6733
Buy 700 04/14/05 16.7398
Buy 500 05/02/05 17.1785
Sell 5,000 05/02/05 17.2083
Buy 1,900 05/11/05 17.4122
Buy 4,400 05/12/05 17.4128
Buy 4,800 05/17/05 17.2826
Buy 700 05/18/05 17.4485
Sell 2,500 07/01/05 18.8372
Buy 1,600 08/01/05 19.7085
Sell 2,500 08/01/05 19.7272
Buy 18,000 09/13/05 19.0700
Sell 10,118 10/03/05 18.8987
Sell 3,200 11/01/05 18.0298
Sell 7,000 01/31/06 19.4357
I-3
Sell 22,300 01/31/06 19.4356
Sell 20,582 01/31/06 19.4372
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
Buy 16,900 01/11/06 19.3964
Buy 38,000 01/12/06 19.2316
Buy 6,500 01/19/06 19.0890
Buy 45,800 01/19/06 19.0948
Buy 5,900 01/26/06 19.2051
Buy 18,700 01/27/06 19.4654
Buy 400 01/30/06 19.3700
Buy 200 01/31/06 19.4150
Buy 49,882 01/31/06 19.4422
Buy 7,000 02/01/06 19.4803
Buy 5,600 02/02/06 19.4789
Buy 300 02/06/06 19.3300
Buy 31,000 02/13/06 19.0596
Buy 5,000 02/14/06 19.0570
Buy 37,800 02/14/06 19.0641
Buy 30,200 02/15/06 19.1744
Buy 9,500 02/16/06 19.3062
Buy 12,600 02/17/06 19.4357
Buy 6,900 02/21/06 19.5197
Buy 23,000 02/22/06 19.6574
Buy 12,500 02/23/06 19.7390
Buy 6,200 03/01/06 19.7284
Buy 9,800 03/06/06 19.9632
Buy 12,400 03/09/06 20.0705
Buy 6,100 03/10/06 20.2085
Buy 1,000 03/13/06 20.1510
Buy 13,500 03/14/06 20.1784
Buy 6,200 03/15/06 20.5013
Buy 4,500 03/16/06 20.7513
Buy 2,500 03/17/06 20.8600
Buy 20,200 03/28/06 20.4186
Buy 3,300 03/31/06 20.4555
Buy 2,700 04/03/06 20.5211
Buy 3,300 04/13/06 19.0589
Buy 13,600 04/17/06 19.0143
Buy 4,200 04/18/06 19.0917
Buy 4,000 04/19/06 19.4763
Buy 2,000 04/25/06 19.3600
Buy 2,100 04/26/06 19.3100
Buy 3,500 04/27/06 19.3240
Buy 10,000 05/15/06 18.9473
Buy 4,500 05/16/06 18.9660
I-4
Buy 2,200 05/17/06 18.7100
Buy 7,700 05/18/06 18.9062
Buy 300 05/19/06 18.6700
Buy 16,100 05/22/06 18.4624
Buy 300 05/23/06 18.6700
Buy 5,200 05/25/06 18.6619
Buy 3,000 05/31/06 18.9200
Buy 15,900 06/01/06 19.0683
Buy 400 06/02/06 19.3525
Buy 10,500 06/05/06 19.4401
Buy 3,500 06/06/06 19.2120
Buy 4,100 06/07/06 19.3312
Buy 400 06/09/06 19.4200
Buy 5,000 07/25/06 20.4000
Buy 5,900 07/26/06 20.4806
Buy 18,600 07/27/06 20.5909
Buy 21,100 07/28/06 20.6482
Buy 2,700 07/31/06 20.6631
Buy 4,600 08/01/06 20.5805
Buy 100 08/02/06 20.7650
Buy 3,000 08/03/06 20.7923
Buy 1,900 08/04/06 21.1714
Buy 6,300 08/07/06 21.0879
Buy 3,000 08/10/06 20.6436
Buy 3,000 08/11/06 20.5613
Buy 23,400 08/14/06 20.6561
Buy 10,500 11/22/06 24.0302
Buy 3,200 12/20/06 23.6037
Buy 8,600 01/11/07 24.4333
Buy 10,800 01/16/07 24.7522
Buy 1,800 01/17/07 24.7406
Buy 2,100 01/24/07 25.3834
Buy 11,200 02/06/07 26.5166
Buy 17,900 02/12/07 26.0759
Buy 57,100 02/13/07 26.1277
Buy 1,500 03/07/07 24.1857
WESTERN INVESTMENT LLC
Buy 1,000 09/18/06 21.9700
BENCHMARK PLUS PARTNERS, L.L.C.
Buy 16,500 01/10/06 19.3777
Buy 16,900 01/11/06 19.3964
Buy 1,600 01/18/06 18.9694
Buy 600 01/23/06 19.0300
I-5
Buy 700 01/24/06 19.1414
Buy 2,500 07/20/06 20.4570
Buy 32,500 09/13/06 22.0753
Buy 60,200 09/19/06 22.0668
Buy 2,300 09/21/06 22.0580
Buy 2,400 09/22/06 21.9309
Buy 26,300 09/25/06 21.9776
Buy 22,200 09/26/06 21.9992
Buy 9,800 10/18/06 23.1448
Buy 9,400 10/20/06 23.0663
Buy 13,300 10/24/06 23.1158
Buy 5,700 10/26/06 23.4973
Buy 100 10/27/06 23.6050
Buy 32,600 10/30/06 23.3697
Buy 6,700 10/31/06 23.3805
Buy 600 11/01/06 23.4117
Buy 26,600 11/02/06 22.6779
Buy 3,400 11/10/06 22.7023
Buy 11,100 11/14/06 22.8157
Buy 700 11/15/06 22.9793
Buy 1,200 11/16/06 23.0808
Buy 56,700 11/20/06 23.7006
Buy 9,100 02/15/07 26.2400
Buy 5,800 03/06/07 24.0607
Buy 15,500 03/08/07 24.4333
Buy 16,800 03/09/07 24.5378
Buy 200 03/14/07 23.6950
BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.
Buy 5,000 12/30/05 18.1304
Buy 13,900 01/03/06 18.3314
Buy 9,300 01/04/06 18.5751
Buy 17,800 01/05/06 18.7184
Buy 2,200 01/05/06 18.7950
Buy 900 01/06/06 18.9756
Buy 18,000 01/09/06 19.1633
Buy 16,500 01/10/06 19.3777
Buy 200 09/14/06 21.9250
Buy 13,300 09/15/06 22.0353
Buy 900 09/18/06 21.9561
Buy 19,700 09/20/06 22.2342
Buy 3,900 09/27/06 22.0576
Buy 2,000 09/28/06 22.1190
Buy 600 09/29/06 22.1817
Buy 9,600 10/04/06 22.4353
Buy 13,900 10/05/06 22.6287
I-6
Buy 4,200 10/06/06 22.5726
Buy 27,100 10/09/06 22.5338
Buy 12,400 10/10/06 22.6248
Buy 2,100 10/11/06 22.6274
Buy 6,900 10/12/06 22.5792
Buy 16,400 10/13/06 22.8213
Buy 14,400 10/16/06 23.0388
Buy 11,700 10/17/06 23.0426
Buy 12,500 10/19/06 23.1102
Buy 18,500 10/23/06 23.1392
Buy 3,600 10/25/06 23.2359
Buy 84,200 11/03/06 22.4784
Buy 37,100 11/06/06 22.6353
Buy 69,501 11/08/06 22.4403
Buy 29,500 11/09/06 22.5782
Buy 1,300 11/17/06 22.9027
Buy 28,700 11/21/06 23.9174
Buy 18,700 11/22/06 24.0667
Buy 11,000 11/27/06 23.7893
Buy 800 02/14/07 26.3513
Buy 9,000 02/15/07 26.2400
Buy 1,200 02/16/07 26.0433
Buy 6,300 02/20/07 26.1863
Buy 4,000 02/26/07 25.4968
Buy 16,300 02/27/07 25.0974
Buy 21,500 03/01/07 24.2677
Buy 2,600 03/05/07 23.5546
Buy 15,500 03/08/07 24.4333
Buy 16,800 03/09/07 24.5378
ARTHUR D. LIPSON
None
D. JAMES DARAS
None
ROBERT A. WOOD
None
MATTHEW CROUSE
None
SCOTT FRANZBLAU
None
ROBERT FERGUSON
None
I-7
PURCHASES AND SALES IN THE PREFERRED STOCK OF NRI
DURING THE PAST TWO YEARS
WESTERN INVESTMENT LLC
None
WESTERN INVESTMENT HEDGED PARTNERS L.P.
None
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
None
BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.
None
BENCHMARK PLUS MANAGEMENT, L.L.C.
None
BENCHMARK PLUS PARTNERS, L.L.C.
None
ARTHUR D. LIPSON
None
ROBERT A. WOOD
None
D. JAMES DARAS
None
MATTHEW S. CROUSE
None
SCOTT FRANZBLAU
None
ROBERT FERGUSON
None
I-8
SCHEDULE II
THE FOLLOWING TABLE IS DERIVED FROM THE COMPANY'S PROXY STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON ________, 2007
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF NRI
The table below sets forth the beneficial ownership of (1) each person
known by the NRI to be the beneficial owner of more than 5% of the outstanding
shares of the Company's common stock as of ________, 2007, and (2) each director
and executive officer of the Company as of _______, 2007. Each person had sole
or shared voting or dispositive powers with respect to such shares.
Number of Common
Shares Owned Percentage
Name (Rounded) Owned
- ---- --------- -----
John Cannon *
Faith Colish *
C. Anne Harvey *
Robert A. Kavesh *
Howard A. Mileaf *
Edward I. O'Brien *
William E. Rulon *
Cornelius T. Ryan *
Tom D. Seip *
Candace L. Straight *
Peter D. Trapp *
Jack L Rivkin *
Peter E. Sundman *
A Group consisting of Western
Investment LLC and including 11
other members(1)
Deutsche Bank AG
- --------------
* LESS THAN 1%
(1) The Group consists of Western Investment LLC, Arthur D. Lipson, Western
Investment Hedged Partners L.P., Western Investment Activism Partners LLC,
Benchmark Plus Institutional Partners, L.L.C., Benchmark Plus Partners,
L.L.C., Benchmark Plus Management, L.L.C., Scott Franzblau, Robert Ferguson,
Robert A. Wood D. James Daras and Matthew S. Crouse.
II-1
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how many
Shares you own, please give Western your proxy FOR the election of Western's
Nominees by voting your Shares by telephone or Internet as described in the
enclosed GOLD proxy card or by signing and dating the enclosed GOLD proxy card,
and returning it in the postage-paid envelope provided.
If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution, only it can vote such Shares and only upon receipt
of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD proxy
card representing your Shares. In addition, if you hold your shares in a
brokerage or bank account, your broker or bank may allow you to provide your
voting instructions by telephone or Internet. Please consult the materials you
receive from your broker or bank prior to authorizing a proxy by telephone or
Internet. Western urges you to confirm in writing your instructions to Western
in care of Innisfree M&A Incorporated at the address provided below so that
Western will be aware of all instructions given and can attempt to ensure that
such instructions are followed.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE VOTING YOUR SHARES, PLEASE CALL:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NY 10022
STOCKHOLDERS CALL TOLL-FREE AT: (877) 456-3510
BANKS AND BROKERS CALL COLLECT AT: (212) 750-5833
II-2
PLEASE VOTE TODAY!
SEE REVERSE SIDE FOR THREE EASY WAYS TO VOTE.
V TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE V
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PREFERRED STOCK
GOLD PROXY
NEUBERGER BERMAN REALTY INCOME FUND
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF WESTERN INVESTMENT LLC
THE BOARD OF DIRECTORS OF NEUBERGER BERMAN REALTY INCOME FUND
IS NOT SOLICITING THIS PROXY
The undersigned appoints Arthur D. Lipson and Scott Franzblau, and each of them,
as the undersigned's attorneys and agents with full power of substitution to
vote all shares of preferred stock of Neuberger Berman Realty Income Fund Inc.
(the "Company") which the undersigned would be entitled to vote if personally
present at the annual meeting of stockholders of the Company scheduled on
[________________________] at ________. and including at any adjournments or
postponements thereof and at any meeting called in lieu thereof (the "Annual
Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of preferred stock of the Company held by
the undersigned, and hereby ratifies and confirms all actions the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of such attorneys and proxies and their
substitutes with respect to any other matters as may properly come before the
Annual Meeting. Mark each vote with an X in the box.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSAL ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR THE PROPOSAL.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED APRIL 13, 2007
NEUBERGER BERMAN REALTY INCOME FUND
SOLICITATION OF PROXIES BY WESTERN INVESTMENT LLC
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your shares of
Neuberger Berman Realty Income Fund
preferred stock for the upcoming Annual Meeting of stockholders.
PLEASE REVIEW THE PROXY STATEMENT
AND VOTE TODAY IN ONE OF THREE WAYS:
1. VOTE BY TELEPHONE - Please call toll-free from the U.S. or Canada at
1-866-849-9667, on a touch-tone telephone. If outside the U.S. or Canada,
call 1-215-521-1346. Please follow the simple recorded instructions. You will
be required to provide the unique control number shown below.
OR
2. VOTE BY INTERNET - Please ACCESS HTTPS://WWW.PROXYVOTENOW.COM/TY, and follow
the simple instructions. Please note you must type an "s" after http. You
will be required to provide the unique control number shown below.
-----------------------------------
CONTROL NUMBER:
-----------------------------------
- --------------------------------------------------------------------------------
You may vote by telephone or Internet 24 hours a day, 7 days a week. Your
telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner
as if you had marked, signed and returned a proxy card.
- --------------------------------------------------------------------------------
OR
3. VOTE BY MAIL - If you do not wish to vote by telephone or over the Internet,
please sign, date and return the GOLD proxy card in the envelope provided,
and mail to: Western Investment LLC, c/o Innisfree M&A Incorporated, FDR
Station, P.O. Box 5155, New York, NY 10150-5155.
? TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE ?
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
GOLD PROXY CARD
PREFERRED STOCK
WESTERN INVESTMENT LLC, ("WESTERN") RECOMMENDS A VOTE FOR PROPOSAL NO. 1
1. PROPOSAL NO. 1: Western's proposal to elect its slate of director nominees,
each to hold office until the 2010 annual meeting of the Company's
stockholders and until their successors are elected and qualify.
Nominees: FOR ALL WITHHOLD FOR ALL EXCEPT NOMINEE(S)
(01) Arthur D. Lipson, NOMINEES AUTHORITY TO VOTE WRITTEN BELOW
(02) Robert A. Wood, [ ] FOR ALL NOMINEES ____________________________
(03) D. James Daras [ ] _____________________________
(04) Scott Franzblau _____________________________
(05) Mathew S. Crouse
3. To vote and otherwise represent the undersigned on any other matter that may
properly come before the Annual Meeting or any adjournment or postponement
thereof, including voting on adjournment of the Annual Meeting with respect
to one or more matters in the discretion of the proxy holder.
DATE:
------------------------------
-----------------------------------
(Signature)
-----------------------------------
(Signature, if held jointly)
-----------------------------------
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS
SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC. SHOULD INDICATE THE CAPACITY IN
WHICH SIGNING. PLEASE SIGN EXACTLY AS NAME
APPEARS ON THIS PROXY.
PLEASE VOTE TODAY!
SEE REVERSE SIDE FOR THREE EASY WAYS TO VOTE.
V TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE V
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
COMMON STOCK
GOLD PROXY
NEUBERGER BERMAN REALTY INCOME FUND
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF WESTERN INVESTMENT LLC
THE BOARD OF DIRECTORS OF NEUBERGER BERMAN REALTY INCOME FUND
IS NOT SOLICITING THIS PROXY
The undersigned appoints Arthur D. Lipson and Scott Franzblau, and each of them,
as the undersigned's attorneys and agents with full power of substitution to
vote all shares of common stock of Neuberger Berman Realty Income Fund (the
"Company") which the undersigned would be entitled to vote if personally present
at the annual meeting of stockholders of the Company scheduled on
[______________________________] at ________., and including at any adjournments
or postponements thereof and at any meeting called in lieu thereof (the "Annual
Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all actions the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of such attorneys and proxies and their
substitutes with respect to any other matters as may properly come before the
Annual Meeting. Mark each vote with an X in the box.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSAL ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR THE PROPOSAL.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED APRIL 13, 2007
NEUBERGER BERMAN REALTY INCOME FUND
SOLICITATION OF PROXIES BY WESTERN INVESTMENT LLC
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your shares of
Neuberger Berman Realty Income Fund
common stock for the upcoming Annual Meeting of stockholders.
PLEASE REVIEW THE PROXY STATEMENT
AND VOTE TODAY IN ONE OF THREE WAYS:
1. VOTE BY TELEPHONE - Please call toll-free from the U.S. or Canada at
1-866-849-9667, on a touch-tone telephone. If outside the U.S. or Canada,
call 1-215-521-1346. Please follow the simple recorded instructions. You will
be required to provide the unique control number shown below.
OR
2. VOTE BY INTERNET - Please access HTTPS://WWW.PROXYVOTENOW.COM/TY, and follow
the simple instructions. Please note you must type an "s" after http. You
will be required to provide the unique control number shown below.
-----------------------------------
CONTROL NUMBER:
-----------------------------------
- --------------------------------------------------------------------------------
You may vote by telephone or Internet 24 hours a day, 7 days a week. Your
telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner
as if you had marked, signed and returned a proxy card.
- --------------------------------------------------------------------------------
OR
3. VOTE BY MAIL - If you do not wish to vote by telephone or over the Internet,
please sign, date and return the GOLD proxy card in the envelope provided,
and mail to: Western Investment LLC, c/o Innisfree M&A Incorporated, FDR
Station, P.O. Box 5155, New York, NY 10150-5155.
V TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE V
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - -
GOLD PROXY CARD
COMMON STOCK
WESTERN INVESTMENT LLC ("WESTERN") RECOMMENDS A VOTE FOR PROPOSAL NO. 1.
---
1. PROPOSAL NO. 1: Western's proposal to elect its slate of director
nominees, each to hold office until the 2010 annual meeting of the Company's
stockholders and until their successors are elected and qualify.
Nominees: FOR ALL WITHHOLD AUTHORITY TO FOR ALL EXCEPT NOMINEE(S) WRITTEN BELOW
(01) Arthur D. Lipson, NOMINEES VOTE FOR ALL NOMINEES _____________________________
(02) Robert A. Wood, [ ] [ ] _____________________________
(03) D. James Daras _____________________________
(04) Scott Franzblau
3. To vote and otherwise represent the undersigned on any other matter that may
properly come before the Annual Meeting or any adjournment or postponement
thereof, including voting on adjournment of the Annual Meeting with respect
to one or more matters in the discretion of the proxy holder.
DATE:
-------------------------------
-----------------------------------
(Signature)
-----------------------------------
(Signature, if held jointly)
-----------------------------------
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS
SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC. SHOULD INDICATE THE CAPACITY IN
WHICH SIGNING. PLEASE SIGN EXACTLY AS NAME
APPEARS ON THIS PROXY.