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: | | 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 Under Rule 14a-12 NEUBERGER BERMAN REAL ESTATE SECURITIES 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 ELYSE NAKAJIMA - -------------------------------------------------------------------------------- (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: - -------------------------------------------------------------------------------- WESTERN INVESTMENT LLC April 23, 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 Real Estate Securities Income Fund Inc. ("NRO" or the "Company"). We made our initial investment in NRO 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 Wednesday, May 2, 2007, at 9:30 a.m. Eastern Time at the offices of Neuberger Berman, LLC, 605 Third Avenue, 41st Floor, New York, New York 10158-3698. Western does not believe that the current board of directors of NRO 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 NRO's Board of Directors, including the Class II director entitled to be elected solely by holders of NRO's shares of preferred stock, each to hold office until the 2010 annual meeting NRO'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 GREEN proxy card, or by signing, dating and returning today the enclosed GREEN proxy card in the postage paid envelope provided. The attached proxy statement and GREEN proxy card are first being furnished to the stockholders on or about April 23, 2007. IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY NRO'S MANAGEMENT TO NRO, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE BY SIGNING, DATING AND RETURNING THE ENCLOSED GREEN 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: (888) 750-5834 Banks and Brokers Call Collect at: (212) 750-5833 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE BE ADVISED: o NRO HAS THE SAME DESCRIPTION AND INVESTMENT PHILOSOPHY AS TWO OTHER NEUBERGER BERMAN CLOSED END FUNDS AND SHOULD BE CONSOLIDATED WITH THESE FUNDS IN ORDER TO REDUCE COSTS AND INCREASE LIQUIDITY (page 4) o NRO'S NAV DISCOUNT IS UNACCEPTABLE (page 4) o NRO'S BOARD HAS FAILED TO TAKE EFFECTIVE ACTION TO REDUCE THE NAV DISCOUNT (page 5) - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION CAN BE FOUND AT: WWW.FIXMYFUND.COM ANNUAL MEETING OF STOCKHOLDERS OF NEUBERGER BERMAN REAL ESTATE SECURITIES INCOME FUND INC. ------------------------- PROXY STATEMENT OF WESTERN INVESTMENT LLC ------------------------- PLEASE VOTE YOUR SHARES TODAY BY TELEPHONE OR INTERNET, AS DESCRIBED IN THE ENCLOSED GREEN PROXY CARD, OR BY SIGNING, DATING AND RETURNING THE GREEN 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 Real Estate Securities Income Fund Inc. ("NRO" or the "Company"). Western is writing to you in connection with the election of five nominees to the board of directors of NRO (the "Board"), including the Class II director entitled to be elected solely by holders of NRO's shares of preferred stock, at the annual meeting of stockholders scheduled to be held on Wednesday, May 2, 2007, at 9:30 a.m. Eastern Time at the offices of Neuberger Berman, LLC, 605 Third Avenue, 41st Floor, New York, New York 10158-3698, including any adjournments or postponements thereof and any meeting which may be called in lieu thereof (the "annual meeting"). This proxy statement (the "proxy statement") and the enclosed GREEN proxy card are first being furnished to stockholders on or about April 23, 2007. This proxy statement and the enclosed GREEN proxy card are being furnished to stockholders of NRO by Western in connection with the solicitation of proxies from NRO's stockholders for the following proposals: 1. To elect Western's slate of nominees to NRO's Board, including the Class II director entitled to be elected solely by holders of NRO's shares of preferred stock, each to hold office until the 2010 annual meeting of NRO'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, Robert Ferguson and Elyse Nakajima are members of a group (the "Group") formed in connection with this proxy solicitation and are deemed participants in this proxy solicitation. NRO 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 NRO 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. 1 According to NRO, as of the record date, there were 33,316,439 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 9,800 shares of $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 2,387,189 Common Shares and no Preferred Shares, which represent approximately 7.2% of the votes entitled to be cast at the annual meeting (based on NRO'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 NRO. 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 GREEN 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 GREEN PROXY CARD OR BY SIGNING, DATING AND RETURNING THE ENCLOSED GREEN PROXY CARD TODAY. IF YOU HAVE ALREADY GIVEN A PROXY TO NRO'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 GREEN PROXY CARD OR BY SIGNING, DATING AND RETURNING THE ENCLOSED GREEN 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 NRO (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 NRO's management to NRO, you have every right to change your vote by signing, dating and returning the enclosed GREEN 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 GREEN PROXY CARD, OR BY SIGNING, DATING AND RETURNING TODAY THE ENCLOSED GREEN 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 GREEN proxy card, by calling the toll-free number contained therein, or by signing, dating and mailing the enclosed GREEN 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 GREEN 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: (888) 750-5834 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 NRO HAS THE SAME DESCRIPTION AND INVESTMENT PHILOSOPHY AS TWO OTHER NEUBERGER BERMAN CLOSED END FUNDS AND SHOULD BE CONSOLIDATED WITH THESE FUNDS IN ORDER TO REDUCE COSTS AND INCREASE LIQUIDITY NRO is extremely similar to two other funds managed by Neuberger Berman Management Inc.: Neuberger Berman Realty Income Fund Inc. ("NRI") and Neuberger Berman Real Estate Income Fund Inc. ("NRL"). Each of NRO, NRI and NRL have the same description and investment philosophy as described on the Neuberger Berman 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 and reduced expenses from one larger fund would, we believe, be advantageous to all stockholders. We further believe the similarities of names and investment objectives of NRO, NRI and NRL create needless confusion among investors, detracting from the investment appeal of NRO and the other funds. Western also beneficially owns over 9% of each of NRL and NRI, has nominated the same five people for election as director of NRI at NRI's upcoming annual meeting scheduled for May 2, 2007, and is soliciting proxies on behalf of their election. NRO'S NAV DISCOUNT IS UNACCEPTABLE NRO's share price has traded at a close to double-digit or greater discount to its per share net asset value ("NAV") since its inception (as of fiscal year-end for each such year), ranging between 9% and 16%. Thus, when NRO 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 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. NRO 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 NRO's fiscal year-end stock price to NRO's fiscal year-end NAV since its inception in 2003. NAV October 31 Discount ---------- -------- 2004 -9% 2005 -16% 2006 -15% As an existing NRO stockholder, Western is extremely concerned that NRO'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, for each $1 of underlying NRO net asset value, a share of NRO common stock would trade at approximately 85 cents. So long as the NAV discount persists, existing NRO stockholders who sell their Shares will sell them at a discount to the underlying net asset value. NRO common stock is traded on the American Stock 4 Exchange, and share prices are determined by the market, which to date has determined the value to be much less than the underlying NAV. NRO'S BOARD HAS FAILED TO TAKE EFFECTIVE ACTION TO REDUCE THE NAV DISCOUNT We believe that NRO's Board is indifferent to the plight of NRO's stockholders. The discount to NAV reached a high of over 18% in December 2005, and in 2006 the average discount to NAV was over 15%. We do not understand why the Board has not been more proactive in addressing this continued NAV discount. We note in NRO's proxy statement that NRO has belatedly announced that it intends to file with the SEC an amended application for relief for certain exemptions which it says may enable NRO to implement a managed distribution plan. This decision 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 that 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 NRO and NRI and the concerns Western has raised and actions it has taken regarding the NAV discount in each fund. NRO needs directors who are truly concerned with NRO's stockholders. OUR INTERESTS ARE ALIGNED WITH YOURS Western and the other participants are significant investors in NRO and remain committed to our investment the Company. We made our first investment in NRO in 2004, and currently are one of NRO's largest stockholders. Our interests are aligned with the interests of all stockholders-if our investment in NRO prospers, so does yours. We have no intention of seeking to open-end or liquidate NRO. 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 NRO's Board. Arthur D. Lipson, Robert A. Wood, D. James Daras and Scott Franzblau, the Nominees, must be elected by the holders of a majority of NRO's outstanding Common Shares and Preferred Shares, voting together. In addition, holders of NRO's Preferred Shares are entitled, as a class, to the exclusion of the holders of all other classes of stock of NRO, 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 NRO's Board to take all actions necessary to maximize the value of your Shares, including through consolidation with NRI and NRL, and to reduce NRO'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 five 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. SCOTT FRANZBLAU (AGE 50) has served as a principal of Benchmark Plus Management, L.L.C., the managing member of BPP, since 1997. BPP is in the business of acquiring, holding and disposing of investments in various companies. Prior to joining BPM, Mr. Franzblau founded Parkway Capital 6 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 Investment 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 NRO beneficially owned by each Nominee is as follows: Name of Nominee Dollar Range of Equity Securities in NRO --------------- ---------------------------------------- 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 NRO's five incumbent directors, including the Class II director entitled to be elected solely by holders of NRO's Preferred Shares, 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 NRO, 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 NRO if elected as such at the annual meeting. None of the Nominees is a party adverse to NRO or any of its subsidiaries or has a material interest adverse to NRO or any of its 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 GREEN proxy card will be voted for substitute nominees. In addition, Western reserves the right to nominate substitute persons if NRO 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 GREEN proxy card will be voted for such substitute nominees. NRO 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. NRO'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 NRO Board. Western reserves the right to nominate additional persons if NRO further increases the size of its Board above its existing size, increases the number of directors whose terms expire at the annual meeting or calls a meeting to fill any vacancies on NRO's Board. Additional nominations made pursuant to the preceding sentence are without prejudice to the position of Western that any attempt to increase the size of NRO's Board or to reconstitute or reconfigure the classes on which the current directors serve constitutes an unlawful manipulation of NRO's corporate machinery. YOU ARE URGED TO VOTE FOR THE ELECTION OF WESTERN'S NOMINEES ON THE ENCLOSED GREEN PROXY CARD. 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 NRO 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 GREEN proxy card, by calling the toll-free number contained therein, or by signing, dating and mailing the enclosed GREEN 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 GREEN 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 NRO's director nominees. 8 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 NRO's proxy statement, if a quorum is present at the annual meeting, nominees receiving the affirmative vote of the holders of a majority of NRO'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 NRO'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. REVOCATION OF PROXIES Stockholders of NRO 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 Real Estate Securities Income Fund Inc. at 605 Third Avenue, New York, New York 10158 or any other address provided by NRO. Although a revocation is effective if delivered to NRO, 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 NRO'S BOARD, PLEASE VOTE YOUR SHARES BY TELEPHONE OR INTERNET, AS DESCRIBED IN THE ENCLOSED GREEN PROXY CARD, OR BY SIGNING, DATING AND RETURNING PROMPTLY THE ENCLOSED GREEN PROXY CARD, IN THE POSTAGE-PAID ENVELOPE PROVIDED. 9 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 $25,000, 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 30 persons to solicit NRO'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 NRO's stockholders will benefit from the Solicitation (defined below), Western intends to seek reimbursement from NRO, to the fullest extent permitted by law, of all expenses it incurs in connection with the Solicitation. If necessary, Western will ask NRO 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 NRO 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 $20,000. 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, a Delaware limited liability company, is the general partner and managing member of WIHP, a Delaware limited partnership, and WIAP, a Delaware limited liability company, 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. Ms. Nakajima does not have a principal business address, but can be reached c/o Western. 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 NRO, pursuant to an oral agreement between Western and BPIP, and between Western and BPP. Each of WIHP, Western, Mr. Lipson and WIAP disclaims beneficial ownership of the Shares beneficially owned by the other members of the Group. Each of BPP, BPIP, BPM, Mr. Franzblau and Mr. Ferguson disclaims beneficial ownership of the Shares beneficially owned by the other members of the Group. Each of Mr. Wood, Mr. Daras, Mr. Crouse and Ms. Nakajima disclaims beneficial ownership of the Shares beneficially owned by the other members of the Group. 10 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, Mr. Crouse or Ms. Nakajima 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 the 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. The principal occupation of Ms. Nakajima is opera singer. For information regarding purchases and sales of securities of NRO during the past two years by Western, Mr. Lipson, WIHP, WIAP, Mr. Wood, Mr. Daras, Mr. Crouse, Ms. Nakajima, 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 February 20, 2007 the members of the Group entered into a Joint Filing and Solicitation Agreement, 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 NRO 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 NRO's Board 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 NRO, 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. Ms. Nakajima joined the Group on April 20, 2007 and agreed to be bound by the terms of the Joint Filing and Solicitation Agreement and to take reasonable steps to request, at Western's sole cost and expense, a complete list of record and beneficial holders of NRO's securities, and related materials. 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 820,345 and 744,244 Common Shares respectively, constituting approximately 2.5%, and 2.2%, respectively, of the votes entitled to be cast at the annual meeting. Western 11 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 beneficially own the 1,564,589 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 1,565,589 Common Shares beneficially owned by Western as of the record date. As of the record date, BPIP and BPP beneficially owned 507,700 and 313,900 Common Shares, respectively, constituting approximately 1.5% and .9%, 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 821,600 Common Shares owned in the aggregate by BPP and BPIP. As the managing members of BPM, Messrs. Franzblau, and Ferguson may be deemed to beneficially own the 821,600 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 NRO; (iii) no participant in this Solicitation owns any securities of NRO which are owned of record but not beneficially; (iv) no participant in this Solicitation has purchased or sold any securities of NRO during the past two years; (v) no part of the purchase price or market value of the securities of NRO 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 NRO 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 NRO; (viii) no participant in this Solicitation owns beneficially, directly or indirectly, any securities of any parent or subsidiary of NRO; (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 NRO'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 NRO or its affiliates, or with respect to any future transactions to which NRO 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 GREEN 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 NRO's directors and executive officers, the dollar range of Shares owned by directors 12 of the Company and information on committees of NRO's Board. Stockholders should refer to NRO's proxy statement in order to review this disclosure. 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 NRO. The information concerning NRO 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 23, 2007 13 SCHEDULE I PURCHASES AND SALES IN THE COMMON STOCK OF NRO DURING THE PAST TWO YEARS Transaction Quantity Date Price ($) ----------- -------- ---- --------- WESTERN INVESTMENT HEDGED PARTNERS L.P. Buy 1,600 03/23/05 13.0117 Buy 3,500 04/01/05 13.4471 Sell 10,000 04/01/05 13.4689 Buy 600 04/05/05 13.4194 Buy 400 04/07/05 13.4642 Buy 500 04/13/05 13.4685 Buy 4,100 04/14/05 13.3252 Buy 700 04/20/05 13.2785 Buy 4,200 04/22/05 13.2771 Buy 900 04/25/05 13.3885 Buy 1,000 05/02/05 13.6932 Sell 10,000 05/03/05 13.8289 Buy 1,100 05/04/05 13.7804 Buy 500 05/05/05 13.8385 Buy 900 05/06/05 13.8141 Buy 1,500 05/11/05 13.8452 Buy 2,300 05/12/05 13.7385 Sell 2,300 05/12/05 13.7709 Buy 1,000 05/17/05 13.6385 Buy 3,500 05/18/05 13.8702 Buy 1,800 08/01/05 15.4132 Sell 5,000 08/01/05 15.4484 Sell 900 08/05/05 15.0485 Buy 1,000 08/17/05 14.5185 Sell 1,000 08/17/05 14.5909 Sell 2,500 09/01/05 14.8174 Sell 25,000 09/13/05 14.8900 Sell 14,100 10/03/05 14.8090 Sell 2,000 10/05/05 14.5909 Sell 100 10/11/05 14.0409 Sell 2,300 10/12/05 13.7370 Sell 500 11/01/05 14.0489 Buy 6,000 12/29/05 13.7969 Buy 16,000 12/30/05 13.7664 Sell 22,000 12/30/05 13.8163 Buy 4,000 01/20/06 14.6300 Sell 4,000 01/20/06 14.6520 Sell 19,900 02/16/06 14.9843 Buy 6,400 06/13/06 14.6152 I-1 Transaction Quantity Date Price ($) ----------- -------- ---- --------- Buy 17,100 06/14/06 14.5525 Buy 3,800 06/27/06 14.9579 Buy 1,100 06/28/06 14.9941 Buy 6,700 06/29/06 15.1005 Buy 19,100 06/30/06 15.3864 Buy 4,400 07/03/06 15.4200 Buy 1,400 07/05/06 15.5257 Buy 15,000 07/07/06 15.6466 Buy 12,000 07/11/06 15.7179 Buy 2,500 07/12/06 15.7546 Buy 200 07/13/06 15.6200 Buy 15,100 07/17/06 15.2669 Buy 9,800 07/18/06 15.3883 Buy 17,100 07/19/06 15.7355 Buy 7,900 08/21/06 16.3724 Buy 1,100 08/22/06 16.4541 Buy 1,100 08/24/06 16.4041 Buy 5,000 08/29/06 16.5458 Buy 1,900 08/30/06 16.6803 Buy 7,300 09/06/06 16.8202 Buy 17,700 09/19/06 17.0142 Buy 1,200 09/22/06 16.9133 Buy 1,200 10/13/06 17.7333 Buy 58,000 11/20/06 18.2496 Buy 500 11/20/06 18.2594 Sell 500 11/20/06 18.2609 Buy 24,800 11/21/06 18.4204 Buy 29,200 11/27/06 18.2950 Buy 38,200 12/12/06 18.7291 Buy 47,145 12/13/06 17.8811 Buy 25,200 12/14/06 17.9808 Buy 58,800 12/15/06 17.8179 Buy 27,400 12/18/06 17.8353 Buy 14,200 12/19/06 17.5483 Buy 6,300 12/20/06 17.6568 Buy 7,900 12/26/06 17.7397 Buy 12,100 01/16/07 18.5037 Buy 1,000 01/19/07 18.6380 Buy 1,000 01/22/07 18.7050 Buy 3,200 01/23/07 18.7790 Buy 5,600 01/24/07 18.8225 Buy 7,200 01/25/07 19.0386 Buy 4,900 01/29/07 19.0039 Buy 29,500 01/30/07 19.1631 Buy 21,500 02/06/07 19.6017 Buy 60,000 02/07/07 19.7877 Buy 110,700 02/09/07 19.6291 I-2 Transaction Quantity Date Price ($) ----------- -------- ---- --------- Buy 32,000 02/15/07 19.4073 Buy 18,400 02/16/07 19.2541 Buy 200,000 03/02/07 18.2201 Sell 200,000 03/02/07 18.2194 Buy 150,000 03/05/07 17.5201 Sell 150,000 03/05/07 17.5294 Buy 156,000 03/06/07 17.9201 WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC Buy 1,500 03/23/05 13.0117 Buy 3,500 04/01/05 13.4471 Sell 10,000 04/01/05 13.4689 Buy 500 04/05/05 13.4194 Buy 300 04/07/05 13.4642 Buy 500 04/13/05 13.4685 Buy 4,000 04/14/05 13.3252 Buy 700 04/20/05 13.2785 Buy 900 05/02/05 13.6932 Sell 10,000 05/03/05 13.8289 Buy 1,000 05/04/05 13.7804 Buy 500 05/05/05 13.8385 Buy 900 05/06/05 13.8141 Buy 1,500 05/11/05 13.8452 Buy 3,400 05/18/05 13.8702 Buy 1,800 08/01/05 15.4132 Sell 5,000 08/01/05 15.4484 Sell 800 08/05/05 15.0485 Sell 2,500 09/01/05 14.8174 Buy 25,000 09/13/05 14.8900 Sell 14,100 10/03/05 14.8090 Sell 2,300 10/12/05 13.7370 Buy 11,000 12/29/05 13.7970 Sell 11,000 12/30/05 13.8161 Sell 11,000 01/31/06 14.9172 Sell 36,200 01/31/06 14.9180 Sell 25,000 01/31/06 14.9177 Buy 11,000 02/01/06 14.9172 Sell 11,000 02/01/06 14.9095 WESTERN INVESTMENT ACTIVISM PARTNERS LLC Buy 12,900 01/11/06 14.7609 Buy 10,200 01/12/06 14.6181 Buy 2,300 01/17/06 14.4200 Buy 4,000 01/19/06 14.6040 Buy 22,800 01/27/06 14.9191 Buy 72,200 01/31/06 14.9215 Buy 12,900 02/01/06 14.9829 Buy 2,600 02/02/06 14.9300 Buy 13,100 02/14/06 14.7125 Buy 200 02/15/06 14.8000 I-3 Transaction Quantity Date Price ($) ----------- -------- ---- --------- Buy 11,400 02/16/06 14.8941 Buy 19,900 02/16/06 14.9955 Buy 900 02/17/06 14.9900 Buy 23,700 02/21/06 15.0713 Buy 12,800 02/22/06 15.1503 Buy 14,700 02/23/06 15.1949 Sell 4,900 03/01/06 15.3760 Sell 200 03/02/06 15.3495 Sell 2,400 03/03/06 15.3857 Sell 4,600 03/06/06 15.5773 Sell 1,600 03/07/06 15.5595 Sell 100 03/08/06 15.3645 Sell 1,500 03/09/06 15.6209 Sell 7,600 03/09/06 15.6209 Sell 8,900 03/10/06 15.7310 Sell 400 03/10/06 15.7311 Sell 3,700 03/13/06 15.6786 Buy 2,000 03/14/06 15.5700 Buy 2,000 03/15/06 15.7000 Buy 18,500 03/15/06 15.7336 Buy 3,100 03/16/06 15.8729 Buy 1,700 03/17/06 15.9900 Buy 4,400 03/21/06 15.6241 Buy 7,000 03/28/06 15.7579 Buy 2,500 03/29/06 15.7808 Buy 200 04/03/06 15.8350 Sell 2,700 04/10/06 15.4505 Buy 5,500 04/13/06 14.7511 Buy 9,800 04/17/06 14.6829 Buy 3,500 04/18/06 14.8314 Buy 1,300 04/19/06 15.0892 Sell 5,000 04/26/06 15.0171 Sell 3,300 04/27/06 15.0275 Sell 2,000 04/28/06 15.1820 Sell 20,600 05/02/06 14.9758 Sell 3,700 05/02/06 14.9749 Sell 700 05/11/06 15.0974 Sell 2,500 05/12/06 14.7361 Sell 1,700 05/17/06 14.8657 Sell 1,500 05/24/06 14.4479 Sell 4,500 05/31/06 14.7314 Buy 300 06/07/06 14.8600 Buy 1,000 06/09/06 14.9300 Buy 15,100 07/25/06 15.6968 Buy 15,000 07/26/06 15.7584 Buy 6,700 07/27/06 15.8298 Buy 200 07/28/06 15.8550 I-4 Transaction Quantity Date Price ($) ----------- -------- ---- --------- Buy 12,900 07/31/06 15.8363 Buy 9,900 08/01/06 15.7675 Buy 200 08/07/06 16.3250 Buy 2,100 08/10/06 16.0950 Buy 5,000 08/14/06 16.0890 Buy 17,600 09/19/06 17.0142 Sell 208,000 09/28/06 17.0595 Buy 8,400 11/02/06 17.2058 Buy 1,600 11/03/06 17.4313 Buy 17,700 11/06/06 17.5845 Buy 2,300 11/08/06 17.4593 Buy 35,135 11/09/06 17.4482 Buy 6,800 11/10/06 17.5043 Buy 60,200 11/14/06 17.5935 Buy 35,800 11/15/06 17.7188 Buy 15,600 11/16/06 17.8475 Buy 7,200 11/17/06 17.7229 Buy 58,000 11/20/06 18.2496 Buy 25,000 11/21/06 18.4204 Buy 27,485 12/18/06 17.8353 Buy 14,231 12/19/06 17.5483 Buy 6,200 12/20/06 17.6568 Buy 7,900 12/26/06 17.7397 Buy 12,119 01/16/07 18.5037 Buy 1,200 01/18/07 18.4916 Buy 3,300 01/23/07 18.7789 Buy 5,600 01/24/07 18.8225 Buy 7,100 01/25/07 19.0386 Buy 21,400 02/06/07 19.6017 Buy 136,400 02/08/07 19.9239 Buy 96,200 02/12/07 19.2776 Buy 30,307 02/13/07 19.3031 Buy 33,267 02/14/07 19.4413 Buy 32,000 02/15/07 19.4073 Buy 18,400 02/16/07 19.2541 Buy 900 02/21/07 19.3194 Sell 75,500 02/21/07 19.3995 Buy 37,850 02/27/07 18.3700 Buy 5,400 03/01/07 18.0184 Buy 5,900 03/02/07 18.1481 Buy 200,000 03/02/07 18.2211 WESTERN INVESTMENT, LLC Buy 1,000 11/13/06 17.4625 Transferred as Gift 100 04/24/07 N/A BENCHMARK PLUS PARTNERS, L.L.C. Buy 37,000 01/10/06 14.7746 Buy 12,800 01/11/06 14.7609 I-5 Transaction Quantity Date Price ($) ----------- -------- ---- --------- Buy 1,000 01/13/06 14.4300 Buy 4,200 01/18/06 14.4226 Buy 3,700 07/20/06 15.7509 Buy 104,000 09/28/06 17.0600 Buy 3,300 12/11/06 18.7010 Buy 83,700 02/08/07 19.8416 Buy 35,200 02/09/07 19.4725 Buy 29,000 02/13/07 19.3031 Buy 40,000 03/05/07 17.5340 Buy 77,500 03/06/07 17.9201 Buy 400 03/07/07 17.7700 Buy 100,000 03/07/07 17.7801 Buy 200 03/14/07 17.3850 BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C. Buy 33,000 12/30/05 13.8233 Buy 9,200 12/30/05 13.8675 Buy 4,000 01/03/06 13.9675 Buy 7,600 01/03/06 14.1039 Buy 3,800 01/04/06 14.2539 Buy 7,200 01/05/06 14.3678 Buy 5,000 01/05/06 14.3470 Buy 100 01/06/06 14.5500 Buy 3,300 01/09/06 14.6145 Buy 36,900 01/10/06 14.7746 Buy 104,000 09/28/06 17.0600 Buy 3,200 10/16/06 17.8081 Buy 12,800 11/22/06 18.4463 Buy 2,300 11/24/06 18.5493 Buy 2,300 11/30/06 18.5293 Buy 4,100 12/08/06 18.4791 Buy 3,300 12/11/06 18.7010 Buy 83,700 02/08/07 19.8416 Buy 35,200 02/09/07 19.4725 Buy 29,000 02/13/07 19.3031 Buy 33,200 02/14/07 19.4413 Buy 31,900 02/15/07 19.4073 Buy 18,600 02/16/07 19.2541 Buy 34,000 02/20/07 19.3653 Buy 700 03/05/07 17.4828 Buy 54,510 03/05/07 17.5747 Buy 110,000 03/05/07 17.5315 Buy 77,500 03/06/07 17.9201 Buy 50,000 03/07/07 17.7802 BENCHMARK PLUS MANAGEMENT, L.L.C. None ELYSE NAKAJIMA Received as Gift 100 04/24/07 N/A ARTHUR D. LIPSON None I-6 D. JAMES DARAS None ROBERT A. WOOD None MATTHEW CROUSE None SCOTT FRANZBLAU None ROBERT FERGUSON None PURCHASES AND SALES IN THE PREFERRED STOCK OF NRO 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 PARTNERS, L.L.C. None BENCHMARK PLUS MANAGEMENT, 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 ELYSE NAKAJIMA None I-7 SCHEDULE II THE FOLLOWING TABLE IS DERIVED FROM THE COMPANY'S PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 2007 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF NRO The table below sets forth the beneficial ownership of each person known by the NRO to be the beneficial owner of more than 5% of the Common Shares as of February 21, 2007. According to NRO, the Directors and officers, in the aggregate, owned less than 1% of each class of the outstanding Common Shares. Number of Common Shares Owned Percentage Name (rounded) Owned - ----------------------------------------- ---------------- ---------- A Group consisting of Western Investment 2,387,189 7.5 LLC and including 11 other members (1) Deutsche Bank AG (2) 2,188,925 6.6 - -------------- * 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, based on information provided by Western. (2) Based on an amended Schedule 13G filed by Deutsche Bank AG with the SEC on January 30, 2007; includes beneficial ownership of Common Shares owned by Deutsche Bank AG, London Branch. 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 GREEN proxy card or by signing and dating the enclosed GREEN 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 GREEN 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: (888) 750-5834 BANKS AND BROKERS CALL COLLECT AT: (212) 750-5833 PLEASE VOTE TODAY! SEE REVERSE SIDE FOR THREE EASY WAYS TO VOTE. v TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE v - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - GREEN PROXY PREFERRED STOCK NEUBERGER BERMAN REALTY INCOME FUND INC. ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED ON BEHALF OF WESTERN INVESTMENT LLC THE BOARD OF DIRECTORS OF NEUBERGER BERMAN REALTY INCOME FUND INC. 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 to be held on Wednesday, May 2, 2007, at 9:30 a.m. Eastern Time at the offices of Neuberger Berman, LLC, 605 Third Avenue, 41st Floor, New York, New York 10158-3698, 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) NEUBERGER BERMAN REALTY INCOME FUND INC. 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 ______________, on a touch-tone telephone. If outside the U.S. or Canada, call ______________. 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 _______________________________, 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 GREEN 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - GREEN 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 WRITTEN BELOW (02) Robert A. Wood, [ ] VOTE FOR ALL ____________________________ (03) D. James Daras NOMINEES ____________________________ (04) Scott Franzblau [ ] ____________________________ (05) Matthew S. Crouse ____________________________ 2. 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - GREEN PROXY COMMON STOCK NEUBERGER BERMAN REALTY INCOME FUND INC. ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED ON BEHALF OF WESTERN INVESTMENT LLC THE BOARD OF DIRECTORS OF NEUBERGER BERMAN REALTY INCOME FUND INC. 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 Inc. (the "Company") which the undersigned would be entitled to vote if personally present at the annual meeting of stockholders of the Company scheduled to be held on Wednesday, May 2, 2007, at 9:30 a.m. Eastern Time at the offices of Neuberger Berman, LLC, 605 Third Avenue, 41st Floor, New York, New York 10158-3698, 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) NEUBERGER BERMAN REALTY INCOME FUND INC. 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 ______________, on a touch-tone telephone. If outside the U.S. or Canada, call ______________. 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 _______________________________, 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - GREEN 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 FOR ALL EXCEPT NOMINEE(S) (01) Arthur D. Lipson, NOMINEES AUTHORITY TO WRITTEN BELOW (02) Robert A. Wood, [ ] VOTE FOR ALL ____________________________ (03) D. James Daras NOMINEES ____________________________ (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.
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DEFC14A Filing
Western Investment Inactive DEFC14AProxy in contested solicitation
Filed: 24 Apr 07, 12:00am