NEUBERGER BERMAN EQUITY FUNDS, 497, 2000-05-10

NEUBERGER BERMAN EQUITY FUNDS
497, 2000-05-10

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<PAGE>

<PAGE>
[PHOTO] NEUBERGER BERMAN

NEUBERGER BERMAN
EQUITY FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
PROSPECTUS DECEMBER 1, 1999

(As Amended May 1, 2000)
These securities, like the securities of all mutual
funds, have not been approved or disapproved by the
Securities and Exchange Commission, and the Securities
and Exchange Commission has not determined if this
prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.

Century Fund
Focus Fund
Genesis Fund
Guardian Fund
International Fund
Manhattan Fund
Millennium Fund
Partners Fund
Regency Fund
Socially Responsive Fund
<PAGE>
CONTENTS
- -----------------

<TABLE>
<C> <S>
NEUBERGER BERMAN EQUITY FUNDS

PAGE 2 ...... Century Fund

6 ...... Focus Fund

12 ...... Genesis Fund

18 ...... Guardian Fund

24 ...... International Fund

30 ...... Manhattan Fund

36 ...... Millennium Fund

41 ...... Partners Fund

47 ...... Regency Fund

52 ...... Socially Responsive Fund

YOUR INVESTMENT

58 ...... Share Prices

59 ...... Privileges and Services

60 ...... Distributions and Taxes

62 ...... Maintaining Your Account

66 ...... Buying and Selling Shares

70 ...... Fund Structure
</TABLE>

The "Neuberger Berman" name and logo are service
marks of Neuberger Berman, LLC. "Neuberger Berman
Management Inc." and the individual fund names in
this prospectus are either service marks or
registered trademarks of Neuberger Berman
Management Inc. -C-1999 Neuberger Berman Management
Inc.
<PAGE>
- ------------------------------------------------------------

FUND MANAGEMENT
All of the Neuberger Berman Equity Funds are managed by Neuberger Berman
Management Inc., in conjunction with Neuberger Berman, LLC, as sub-adviser.
Together, the firms manage more than $54.4 billion in total assets (as of
December 31, 1999) and continue an asset management history that began in 1939.

RISK INFORMATION
This prospectus discusses principal risks of investing in fund shares. These and
other risks are discussed in detail in the Statement of Additional Information
(see back cover).

THESE FUNDS:

- - ARE DESIGNED FOR INVESTORS WITH LONG-TERM GOALS IN MIND

- - OFFER YOU THE OPPORTUNITY TO PARTICIPATE IN FINANCIAL MARKETS THROUGH
PROFESSIONALLY MANAGED STOCK PORTFOLIOS

- - ALSO OFFER THE OPPORTUNITY TO DIVERSIFY YOUR PORTFOLIO WITH FUNDS THAT INVEST
USING A VALUE OR A GROWTH APPROACH, OR A COMBINATION OF THE TWO

- - USE A MASTER/FEEDER STRUCTURE IN THEIR PORTFOLIOS; SEE PAGE 70 FOR INFORMATION
ON HOW IT WORKS

- - CARRY CERTAIN RISKS, INCLUDING THE RISK THAT YOU COULD LOSE MONEY IF FUND
SHARES ARE WORTH LESS THAN WHAT YOU PAID

- - ARE MUTUAL FUNDS, NOT BANK DEPOSITS, AND ARE NOT GUARANTEED OR INSURED BY THE
FDIC OR ANY OTHER GOVERNMENT AGENCY

1
<PAGE>
[PHOTO]

NEUBERGER BERMAN
CENTURY FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
ABOVE: PORTFOLIO MANAGER BROOKE A. COBB
</TABLE>

"WE LOOK FOR THE LEADERS OF TODAY AND TOMORROW. MANY FAST-GROWING COMPANIES JOIN
THE LARGE-CAPITALIZATION SECTOR WITH YEARS OF GROWTH STILL AHEAD. OUR GOAL IS TO
IDENTIFY THEM EARLY, AND TO INVEST IN THE COMPANIES THAT ARE GOING TO BE THE
GROWTH LEADERS OF THE NEW CENTURY."

2
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

LARGE-CAP STOCKS
Large companies are usually well-established. They typically have a variety of
products and business lines, an experienced management team and a sound
financial base that can help them weather bad times.

Because of their size, large companies may grow at a slower rate than small
companies. But their returns have sometimes led those of smaller companies,
often with lower volatility.

GROWTH INVESTING
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly growing industries.

While most growth stocks are known to investors, they may not yet have reached
their full potential. The growth investor looks for
indications of continued success.

[ICON]
THE FUND SEEKS LONG TERM GROWTH OF CAPITAL; DIVIDEND INCOME IS A
SECONDARY GOAL.

To pursue these goals, the fund invests mainly in common stocks of
large-capitalization companies. The fund seeks to reduce risk by diversifying
among many companies, sectors and industries in order to moderate variability in
the fund's performance.

The manager employs a disciplined investment strategy when selecting growth
stocks. He seeks to buy companies with strong earnings growth and the potential
for higher earnings, priced at attractive levels relative to their growth rates.
Factors in identifying these firms may include:

- - solid balance sheets

- - earnings that have exceeded analysts' expectations

- - a strong position relative to competitors

- - a stock price that is reasonable in light of its growth rate

The manager also follows a disciplined selling strategy and may eliminate a
stock from the portfolio when the company's fundamentals deteriorate, a target
price is reached, or when it appears substantially less desirable than another
stock.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Century Fund 3
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the fund increases its risk of loss.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate. There may be less information available about foreign issuers than
about domestic issuers.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term fixed-income investments. This could help the fund avoid
losses but may mean lost opportunities.

[ICON] Most of the fund's performance depends
on what happens in the stock market. The market's behavior is
unpredictable, particularly in the short term. Because of this, the
value of your investment will rise and fall, and you could lose money.

At times, large-cap stocks may lag other types of stocks in performance, which
could cause the fund to perform worse than certain other funds over a given time
period.

Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. While the prices of any type of stock can rise and
fall rapidly, growth stocks in particular may underperform during periods when
the market favors value stocks. The fund's performance may also suffer if
certain stocks do not perform as the portfolio manager expected. To the extent
that the manager sells stocks before they reach their market peak, the fund may
miss out on opportunities for higher performance.

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

PERFORMANCE -- Because the fund is new, it does not have performance to report.

4 Neuberger Berman
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
BROOKE A. COBB is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC, and has managed the fund since December 1999.
He joined Neuberger Berman, LLC in 1997. From 1992 to 1997, he was a portfolio
manager at several other firms.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For investment management services, the fund
will pay Neuberger Berman Management a fee at the annual rate of 0.550% of the
first $250 million of average net assets, 0.525% of the next $250 million,
0.500% of the next $250 million, 0.475% of the next $250 million, 0.450% of the
next $500 million, and 0.425% of average net assets in excess of $1.5 billion.

[ICON]
The fund does not charge you any fees for buying, selling, or
exchanging shares, or for maintaining your account. Your only fund cost
is your share of annual operating expenses. The expense example can
help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.81
PLUS: Distribution (12b-1) fees None
Other expenses** 0.99
....
EQUALS: Total annual operating expenses 1.80
MINUS: Expense reimbursement 0.30
....
EQUALS: Net expenses 1.50
</TABLE>

* NEUBERGER BERMAN MANAGEMENT HAS CONTRACTUALLY AGREED TO REIMBURSE CERTAIN
EXPENSES OF THE FUND THROUGH 12/31/02, SO THAT THE TOTAL ANNUAL OPERATING
EXPENSES OF THE FUND ARE LIMITED TO 1.50% OF AVERAGE NET ASSETS. THIS
ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE COMMISSIONS, AND
EXTRAORDINARY EXPENSES. THE FUND HAS AGREED TO REPAY NEUBERGER BERMAN
MANAGEMENT FOR EXPENSES REIMBURSED TO THE FUND PROVIDED THAT REPAYMENT DOES
NOT CAUSE THE FUND'S ANNUAL OPERATING EXPENSES TO EXCEED 1.50% OF ITS AVERAGE
NET ASSETS. ANY SUCH REPAYMENT MUST BE MADE WITHIN THREE YEARS AFTER THE YEAR
IN WHICH NEUBERGER BERMAN MANAGEMENT INCURRED THE EXPENSE. THE TABLE INCLUDES
COSTS PAID BY THE FUND AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE
INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON PAGE 70.

** OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.

EXPENSE EXAMPLE

The example assumes that you invested $10,000 for the periods shown, that you
earned a hypothetical 5% total return each year, and that the fund's expenses
were those in the table above. Your costs would be the same whether you sold
your shares or continued to hold them at the end of each period. Actual
performance and expenses may be higher or lower.

<TABLE>
<CAPTION>
1 Year 3 Years
- ----------------------------------------------------------
<S> <C> <C>
Expenses $153 $474
</TABLE>

Century Fund 5
<PAGE>
[PHOTO]

NEUBERGER BERMAN
FOCUS FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBSSX ABOVE: PORTFOLIO MANAGER KENT C. SIMONS
</TABLE>

"OUR INVESTMENT APPROACH FOR FOCUS FUND INVOLVES LOOKING FOR COMPANIES THAT HAVE
LOW PRICE-TO-EARNINGS RATIOS, SOLID BALANCE SHEETS AND STRONG MANAGEMENT. WE
OFTEN FIND THAT THESE COMPANIES ARE CONCENTRATED IN CERTAIN SECTORS OF THE
ECONOMY, AND WE LOOK FURTHER WITHIN THESE SECTORS FOR OTHER COMPANIES
THAT MEET OUR CRITERIA."

6
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

INDUSTRY SECTORS
The economy is divided into sectors, each made up of related industries. By
focusing on several sectors at a time, a fund can add a measure of
diversification and still pursue the performance potential of individual
sectors.

This contrasts with an approach of limiting investment to one sector, which may
offer greater opportunity but also more risk. A sector may have above-average
performance during particular periods, but individual sectors also tend to move
up and down more than the broader market.

VALUE INVESTING
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors realize their worth.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of companies of
any size that fall within the following sectors:

- - autos and housing

- - consumer goods and services

- - defense and aerospace

- - energy

- - financial services

- - health care

- - heavy industry

- - machinery and equipment

- - media and entertainment

- - retailing

- - technology

- - transportation

- - utilities

At any given time, the fund intends to place most of its assets in those sectors
on the list that the manager believes are undervalued. The fund generally
invests at least 90% of net assets in no more than six sectors. However, it does
not invest more than 50% of total assets in any one sector, or more than 25% of
total assets in any one industry.

The manager looks for undervalued companies. Factors in identifying these firms
may include above-average returns, an established market niche, and sound future
business prospects. This approach is designed to let the fund benefit from
potential increases in stock prices while limiting the risks typically
associated with investing in a small number of sectors.

When a stock no longer meets the fund's investment criteria, the manager will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Focus Fund 7
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities
involving additional risks.

Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the fund increases its risk of loss.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

Because the fund typically focuses on a few sectors at a time, its performance
is likely to be disproportionately affected by the factors influencing those
sectors. These may include market, economic, political or regulatory
developments, among others. The fund's performance may also suffer if a sector
does not perform as the portfolio manager expected.

To the extent that the fund emphasizes a particular market capitalization, it
takes on the associated risks. Mid- and small-cap stocks tend to be more
volatile than large-cap stocks. At any given time, any one of these market
capitalizations may be out of favor with investors. If the fund emphasizes that
market capitalization, it could perform worse than certain other funds.

8 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

PERFORMANCE MEASURES
The information on this page provides different measures of the fund's total
return. Total return includes the effect of distributions as well as changes in
share price. The figures assume that all distributions were reinvested in the
fund.

As a frame of reference, the table includes broad-based indices of the entire
U.S. equity market and of the portion of the market the fund focuses on. The
fund's performance figures include all of its expenses; the index does not
include costs of investment.

Because the fund had a policy of investing heavily in energy stocks prior to
November 1991, and invested mainly in large-cap stocks prior to September 1998,
its performance during those times would have been different if current policies
had been in effect.

[ICON] The charts below provide an indication of
the risks of investing in the fund. The bar chart shows how the fund's
performance has varied from one year to another. The table below the
chart shows what the return would equal if you averaged out actual performance
over various lengths of time and compares the return with that of a broad
measure of market performance. This information is based on past performance;
it's not a prediction of future results.

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 29.78%
'90 -5.92%
'91 24.66%
'92 21.10%
'93 16.33%
'94 0.87%
'95 36.19%
'96 16.22%
'97 24.15%
'98 13.24%
BEST QUARTER: Q4'98, up 34.51%
WORST QUARTER: Q3'98, down 27.51%
Year-to-date performance as of 9/30/99: down 0.42%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
FOCUS FUND 13.24 17.55 17.01
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.83
</TABLE>

The S&P 500 is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.

Focus Fund 9
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
KENT C. SIMONS is a Vice President of Neuberger Berman Management and
a Managing Director of Neuberger Berman, LLC. He has managed the fund's assets
since 1988.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.75% of
average net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.75
PLUS: Distribution (12b-1) fees None
Other expenses 0.10
....
EQUALS: Total annual operating expenses 0.85
</TABLE>

* THE FIGURES IN THE TABLE ARE BASED ON LAST YEAR'S EXPENSES. ACTUAL EXPENSES
THIS YEAR MAY BE HIGHER OR LOWER. THE TABLE INCLUDES COSTS PAID BY THE FUND
AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE INFORMATION ON MASTER/FEEDER
FUNDS, SEE "FUND STRUCTURE" ON PAGE 70.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $87 $271 $471 $1049
</TABLE>

10 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 24.42 28.88 28.46 38.89 27.79
PLUS: Income from investment operations
Net investment income 0.17 0.19 0.08 0.10 0.02
Net gains/losses -- realized and
unrealized 5.97 0.85 12.00 (6.21) 10.50
Subtotal: income from investment
operations 6.14 1.04 12.08 (6.11) 10.52
MINUS: Distributions to shareholders
Income dividends 0.20 0.11 0.22 0.06 0.09
Capital gain distributions 1.48 1.35 1.43 4.93 1.97
Subtotal: distributions to
shareholders 1.68 1.46 1.65 4.99 2.06
................................................
EQUALS: Share price (NAV) at end of year 28.88 28.46 38.89 27.79 36.25
- ------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they
would have been if certain expense offset arrangements had not been in effect.
Net expenses -- actual 0.87 0.89 0.86 0.84 0.85
Expenses(1) -- 0.89 0.86 0.84 0.85
Net investment income -- actual 0.75 0.69 0.21 0.27 0.03
- ------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 27.47 3.70 43.92 (17.37) 38.09
Net assets at end of year (in millions of dollars) 956.0 1,071.4 1,411.9 1,119.9 1,326.6
Portfolio turnover rate (%) 36 39 63 64 57
</TABLE>

The figures above have been audited by Ernst & Young LLP, the fund's independent
auditors. Their report, along with full financial statements, appears in the
fund's most recent shareholder report (see back cover).

(1) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF
THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS
REQUIRED FOR ALL PERIODS ENDING
AFTER 9/1/95.

Focus Fund 11
<PAGE>
[PHOTO]

NEUBERGER BERMAN
GENESIS FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBGNX ABOVE: PORTFOLIO MANAGERS ROBERT W. D'ALELIO AND JUDITH M.
VALE
</TABLE>

"WE SEEK OUT SMALL COMPANIES THAT ARE LITTLE-KNOWN AND OFTEN FOUND IN LESS
GLAMOROUS INDUSTRIES. POTENTIAL FOR GROWTH IS ONE AREA WE FOCUS ON, BUT EQUALLY
IMPORTANT TO US IS EVIDENCE OF SOLID PERFORMANCE AND A PROVEN MANAGEMENT TEAM.
AND AS VALUE INVESTORS, WE LOOK FOR STOCKS THAT ARE SELLING AT ATTRACTIVE
PRICES."

12
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

SMALL-CAP STOCKS
Historically, stocks of smaller companies have not always moved in tandem with
those of larger companies. Over the last 40 years, small-caps have outperformed
large-caps more than 60% of the time. However, small-caps have often fallen more
severely during market downturns.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of
small-capitalization companies, which it defines as those with a total market
value of no more than $1.5 billion at the time the fund first invests in them.
The fund may continue to hold or add to a position in a stock after it has grown
beyond $1.5 billion. The fund seeks to reduce risk by diversifying among many
companies and industries.

The managers look for undervalued companies whose current product lines and
balance sheets are strong. Factors in identifying these firms may include:

- - above-average returns

- - an established market niche

- - circumstances that would make it difficult for new competitors to enter the
market

- - the ability to finance their own growth

- - sound future business prospects

This approach is designed to let the fund benefit from potential increases in
stock prices while limiting the risks typically associated with small-cap
stocks.

At times, the managers may emphasize certain sectors that they believe will
benefit from market or economic trends.

When a stock no longer meets the fund's investment criteria, the managers will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Genesis Fund 13
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities
involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

Stock prices of many smaller companies are based on future expectations. The
portfolio managers tend to focus on companies whose financial strength is
largely based on existing business lines rather than projected growth. While
this can help reduce risk, the fund is still subject to many of the risks of
small-cap investing. These include the risk that the fund's holdings may:

- - fluctuate more widely in price than the market as a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when small-cap stocks are out of favor

- - be more affected than other types of stocks by the underperformance of a
sector that the managers decided to emphasize

With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions.

14 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

As a frame of reference, the table includes a broad-based market index. The
fund's performance figures include all of its expenses; the index does not
include costs of investment.

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 17.25%
'90 -16.24%
'91 41.55%
'92 15.62%
'93 13.89%
'94 -1.82%
'95 27.31%
'96 29.86%
'97 34.89%
'98 -6.95%
BEST QUARTER: Q1'91, up 25.05%
WORST QUARTER: Q3'90, down 21.81%
Year-to-date performance as of 9/30/99: down 3.88%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
GENESIS FUND (6.95) 15.30 14.07
Russell 2000 Index (2.55) 11.87 12.92
</TABLE>

The Russell 2000 is an unmanaged index of U.S. small-cap stocks.

Genesis Fund 15
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
JUDITH M. VALE and ROBERT W. D'ALELIO are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Vale and D'Alelio
have been senior members of the Small Cap Group since 1992 and 1996,
respectively. Vale has co-managed the fund's assets since 1994. D'Alelio joined
the firm in 1996 and has co-managed the fund's assets since 1997. From 1988 to
1996, he was a senior portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.98% of
average net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.98
PLUS: Distribution (12b-1) fees None
Other expenses 0.19
....
EQUALS: Total annual operating expenses 1.17
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $119 $372 $644 $1420
</TABLE>

16 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what it distributed to
investors, and how its share price changed.
Share price (NAV) at beginning of year 8.27 9.52 10.91 15.55 12.47
PLUS: Income from investment operations
Net investment income (loss) -- (0.01) (0.01) 0.11 0.11
Net gains/losses -- realized and unrealized 1.56 1.95 4.80 (3.00) 2.27
Subtotal: income from investment operations 1.56 1.94 4.79 (2.89) 2.38
MINUS: Distributions to shareholders
Income dividends -- -- -- -- 0.12
Capital gain distributions 0.31 0.55 0.15 0.19 0.34
Subtotal: distributions to shareholders 0.31 0.55 0.15 0.19 0.46
...............................................................
EQUALS: Share price (NAV) at end of year 9.52 10.91 15.55 12.47 14.39
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income (loss) -- as they actually are as well as how they would have
been if certain waiver and expense offset arrangements had not been in effect.
Net expenses -- actual 1.35 1.28 1.16 1.10 1.17
Gross expenses(1) 1.38 1.38 1.26 1.12 --
Expenses(2) -- 1.28 1.17 1.11 1.17
Net investment income (loss) -- actual (0.16) (0.18) (0.08) 0.72 0.61
- -------------------------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all distributions were
reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 19.69(3) 21.32(3) 44.32(3) (18.82)(3) 19.20
Net assets at end of year (in millions of dollars) 111.5 195.4 718.1 1,079.1 851.3
Portfolio turnover rate (%) 37 21 18 18 33
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO MANAGEMENT FEE
WAIVER.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS; THE MANAGEMENT FEE WAIVER IS INCLUDED, HOWEVER. THIS
CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER 9/1/95.

(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT WAIVED A
PORTION OF THE MANAGEMENT FEE.

Genesis Fund 17
<PAGE>
[PHOTO]

NEUBERGER BERMAN
GUARDIAN FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NGUAX ABOVE: PORTFOLIO MANAGERS KEVIN L. RISEN AND ALLAN "RICK"
WHITE
</TABLE>

"WE LOOK FOR ESTABLISHED COMPANIES WHOSE INTRINSIC VALUE, BY OUR MEASURE, HAS
YET TO BE DISCOVERED BY THE MAJORITY OF INVESTORS. IN MANAGING OVERALL RISK, WE
MAKE A CONSCIOUS EFFORT TO DETERMINE THE RISK/REWARD SCENARIO OF EACH INDIVIDUAL
HOLDING AS WELL AS ITS IMPACT AT THE PORTFOLIO LEVEL."

18
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

LARGE-CAP STOCKS
Large companies are usually well-established. They may have a variety of
products and business lines and a sound financial base that can help them
weather bad times.

Compared to smaller companies, large companies can be less responsive to changes
and opportunities. At the same time, their returns have sometimes led those of
smaller companies, often with lower volatility.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL; CURRENT INCOME IS A
SECONDARY GOAL.

To pursue these goals, the fund invests mainly in common stocks of
large-capitalization companies. Because the managers tend to find that
undervalued stocks may be more common in certain sectors of the economy at a
given time, the fund may emphasize those sectors.

The fund seeks to reduce risk by diversifying among a large number of companies
across many different industries and economic sectors, and by managing its
overall exposure to a wide variety of risk factors.

The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - solid balance sheets

- - above-average returns

- - low valuation measures, such as price-to-earnings ratios

- - strong competitive positions

When a stock no longer meets the fund's investment criteria, the managers will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Guardian Fund 19
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

At times, large-cap stocks may lag other types of stocks in performance, which
could cause the fund to perform worse than certain other funds over a given time
period.

To the extent that a value approach dictates an emphasis on certain sectors of
the market at any given time, the fund's performance is likely to be
disproportionately affected by the economic, market, and other developments that
may influence those sectors. The fund's performance may also suffer if a sector
does not perform as the portfolio managers expected.

20 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

DISTRIBUTION HISTORY
In keeping with its goal, the fund has paid an income distribution every quarter
since its inception in 1950. It has also paid an annual capital gain
distribution during the same period. Of course, the fund cannot guarantee that
it will continue to make these distributions.

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 21.50%
'90 -4.71%
'91 34.33%
'92 19.01%
'93 14.45%
'94 0.60%
'95 32.11%
'96 17.88%
'97 17.94%
'98 2.35%
BEST QUARTER: Q4'98, up 23.12%
WORST QUARTER: Q3'98, down 26.19%
Year-to-date performance as of 9/30/99: down 3.25%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
GUARDIAN FUND 2.35 13.59 14.89
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.38
</TABLE>

The S&P 500 is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.

Guardian Fund 21
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
KEVIN L. RISEN and ALLAN R. WHITE III are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Risen has co-managed
the fund's assets since 1996. He joined Neuberger Berman in 1992 as an analyst,
and has been a portfolio manager since 1995. White has been co-manager of the
fund since September 1998, when he joined the firm. From 1989 to 1998 he was a
portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.70% of
average net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.70
PLUS: Distribution (12b-1) fees None
Other expenses 0.12
....
EQUALS: Total annual operating expenses 0.82
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $84 $262 $455 $ 1014
</TABLE>

22 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 19.52 23.61 23.78 31.41 21.32
PLUS: Income from investment operations
Net investment income 0.27 0.31 0.15 0.18 0.18
Net gains/losses -- realized and
unrealized 4.30 0.90 8.96 (6.09) 5.29
Subtotal: income from investment
operations 4.57 1.21 9.11 (5.91) 5.47
MINUS: Distributions to shareholders
Income dividends 0.25 0.28 0.24 0.18 0.16
Capital gain distributions 0.23 0.76 1.24 4.00 3.91
Subtotal: distributions to
shareholders 0.48 1.04 1.48 4.18 4.07
................................................
EQUALS: Share price (NAV) at end of year 23.61 23.78 31.41 21.32 22.72
- ------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they
would have been if certain expense offset arrangements had not been in effect.
Net expenses -- actual 0.80 0.82 0.80 0.79 0.82
Expenses(1) -- 0.82 0.80 0.79 0.82
Net investment income -- actual 1.40 1.37 0.55 0.59 0.70
- ------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 24.06 5.27 39.69 (20.80) 26.12
Net assets at end of year (in millions of dollars) 3,947.5 4,905.2 6,475.1 4,210.8 3,441.0
Portfolio turnover rate (%) 26 37 50 60 73
</TABLE>

(1) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

Guardian Fund 23
<PAGE>
NEUBERGER BERMAN
INTERNATIONAL FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBISX PORTFOLIO MANAGER VALERIE CHANG
ASSOCIATE MANAGER BENJAMIN E. SEGAL
</TABLE>

"IN IDENTIFYING ATTRACTIVE STOCKS FROM AMONG THE MANY THOUSANDS CURRENTLY
AVAILABLE OUTSIDE THE U.S., IT'S IMPORTANT TO HAVE A CLEAR STRATEGY. THIS FUND
USES A COMBINATION OF GROWTH AND VALUE CRITERIA, WHILE ALSO CONSIDERING LARGER
SCALE ECONOMIC FACTORS."

24
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

FOREIGN STOCKS
There are many promising opportunities for investment outside the U.S. These
foreign markets often respond to different factors, and therefore tend to follow
cycles that are different from each other.

For this reason, many investors put a portion of their portfolios in foreign
investments as a way of gaining further diversification. While foreign stock
markets can be risky, investors gain an opportunity to add potential long-term
growth.

GROWTH VS.
VALUE INVESTING
Value investors seek stocks trading at below market average prices based on
earnings, book value, or other financial measures before other investors
discover their worth. Growth investors seek companies that are already
successful but may not have reached their full potential.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING PRIMARILY IN
COMMON STOCKS OF FOREIGN COMPANIES.

To pursue this goal, the fund invests mainly in foreign companies of any size,
including companies in developed and emerging industrialized markets. The fund
defines a foreign company as one that is organized outside of the United States
and conducts the majority of its business abroad.

The fund seeks to reduce risk by diversifying among many industries. Although it
has the flexibility to invest a significant portion of its assets in one country
or region, it generally intends to remain well-diversified across countries and
geographical regions.

In picking stocks, the manager looks for well-managed companies that show
potential for above-average growth or whose stock prices are undervalued.
Factors in identifying these firms may include strong fundamentals, such as
attractive cash flows and balance sheets, as well as prices that are reasonable
in light of projected earnings growth. The manager also considers the outlooks
for various countries and regions around the world, examining economic, market,
social, and political conditions.

When a stock no longer meets the fund's investment criteria, the manager will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

International Fund 25
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. The fund may use derivatives for hedging and for speculation. Hedging
could reduce the fund's losses from currency fluctuations, but could also reduce
its gains. In using certain derivatives to gain stock market exposure for excess
cash holdings, the fund increases its risk of loss. A derivative instrument
could fail to perform as expected. Any speculative investment could cause a loss
for the fund.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

[ICON] Most of the fund's performance depends
on what happens in international stock markets. The behavior of these
markets is unpredictable, particularly in the short term. Because of
this, the value of your investment will rise and fall, sometimes sharply, and
you could lose money.

Foreign stocks are riskier than comparable U.S. stocks. This is in part because
foreign markets are less developed and foreign governments, economies, laws, tax
codes and securities firms may be less stable. There is also a higher chance
that key information will be unavailable, incomplete, or inaccurate. As a
result, foreign stocks can fluctuate more widely in price than comparable U.S.
stocks, and they may also be less liquid. These risks are generally greater in
emerging markets. Over a given period of time, foreign stocks may underperform
U.S. stocks -- sometimes for years. The fund could also underperform if the
manager invests in countries or regions whose economic performance falls short.

Changes in currency exchange rates bring an added dimension of risk. Currency
fluctuations could erase investment gains or add to investment losses.

To the extent that the fund invests in a type of stock, it takes on the risks
associated with that type. Growth stocks may suffer more than value stocks
during market downturns, while value stocks may remain undervalued. Mid- and
small-cap stocks tend to be less liquid and more volatile than large-cap stocks.
Any type of stock may underperform any other during a given period.

26 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

As a frame of reference, the table includes a broad-based market index. The
fund's performance figures include all of its expenses; the index does not
include costs of investment.

Because the fund had a policy of investing primarily in mid- and large-cap
stocks prior to September 1998, its performance during that time would have been
different if current policies had been in effect.

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989
'90
'91
'92
'93
'94
'95 7.88%
'96 23.69%
'97 11.21%
'98 2.35%
BEST QUARTER: Q1'98, up 17.90%
WORST QUARTER: Q3'98, down 26.09%
Year-to-date performance as of 9/30/99: up 15.81%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
Since
Inception
1 Year 6/15/94
- ----------------------------------------------------------
<S> <C> <C>
INTERNATIONAL FUND 2.35 9.45
EAFE Index 20.33 8.50
</TABLE>

The EAFE is an unmanaged index of stocks from Europe, Australasia, and the Far
East.

International Fund 27
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

VALERIE CHANG is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. In 1996 she joined the firm and became
assistant manager of the fund. She has been the manager since 1997. She began
her career in 1990 in banking, and from 1995 to 1996 was a senior securities
analyst at another firm.

BENJAMIN E. SEGAL is a Vice President of Neuberger Berman Management and a Vice
President of Neuberger Berman, LLC and has been an Associate Manager of the fund
since January 1999. He was an assistant portfolio manager at another firm from
1992 to 1998. Prior to 1997, he held positions in international finance and
consulting.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 1.11% of
average net
assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 1.11
PLUS: Distribution (12b-1) fees None
Other expenses 0.48
....
EQUALS: Total annual operating expenses 1.59
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $162 $502 $866 $1889
</TABLE>

28 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what
it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 10.46 10.70 11.91 14.83 13.85
PLUS: Income from investment operations
Net investment income (loss) 0.06 0.01 -- (0.03) (0.08)
Net gains/losses -- realized and
unrealized 0.21 1.24 2.94 (0.81) 3.00
Subtotal: income from investment
operations 0.27 1.25 2.94 (0.84) 2.92
MINUS: Distributions to shareholders
Income dividends 0.03 0.04 0.02 -- --
Capital gain distributions -- -- -- 0.14 0.01
Subtotal: distributions to
shareholders 0.03 0.04 0.02 0.14 0.01
................................................
EQUALS: Share price (NAV) at end of year 10.70 11.91 14.83 13.85 16.76
- -------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income (loss) -- as they actually are as well as how
they would have been if certain expense reimbursement/repayment and offset arrangements had not been in
effect.
Net expenses -- actual 1.70 1.70 1.70 1.70 1.61
Gross expenses(1) 2.31 2.28 1.69 1.61 1.59
Expenses(2) -- 1.70 1.70 1.71 1.61
Net investment income (loss) -- actual 0.73 0.24 (0.02) (0.24) (0.43)
- -------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 2.60(3) 11.73(3) 24.71 (5.69) 21.09
Net assets at end of year (in millions of dollars) 26.4 57.0 115.4 125.5 112.5
Portfolio turnover rate (%) 41 45 37 46 94
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT/REPAYMENT.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

International Fund 29
<PAGE>
[PHOTO]

NEUBERGER BERMAN
MANHATTAN FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NMANX ABOVE: PORTFOLIO MANAGERS JENNIFER K. SILVER AND BROOKE A.
COBB
</TABLE>

"WITHOUT QUESTION, WE ARE GROWTH INVESTORS. WE LOOK FOR COMPANIES THAT WE THINK
WILL DELIVER POSITIVE EARNINGS SURPRISES, PARTICULARLY THOSE WITH THE POTENTIAL
TO DO SO CONSISTENTLY. IDEALLY, WE WANT TO IDENTIFY COMPANIES THAT WILL SOMEDAY
RANK AMONG THE FORTUNE 500."

30
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

MID-CAP STOCKS
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.

Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.

GROWTH INVESTING
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly growing industries and may not yet have reached their full potential.
The growth investor looks for indications of continued
success.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of
mid-capitalization companies. The fund seeks to reduce risk by diversifying
among many companies, industries, and sectors.

The managers look for fast-growing companies that are in new or rapidly evolving
industries. Factors in identifying these firms may include:

- - above-average growth of earnings

- - earnings that have exceeded analysts' expectations

The managers may also look for other characteristics in a company, such as
financial strength, a strong position relative to competitors and a stock price
that is reasonable in light of its growth rate.

The managers follow a disciplined selling strategy, and may drop a stock from
the portfolio when it reaches a target price, fails to perform as expected, or
appears substantially less desirable than another stock.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Manhattan Fund 31
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

By focusing on mid-cap stocks, the fund is subject to their risks, including the
risk its holdings may:

- - fluctuate more widely in price than the market as a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when mid-cap stocks are out of favor

Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The fund's performance may also suffer if
certain stocks do not perform as the portfolio managers expected. To the extent
that the managers sell stocks before they reach their market peak, the fund may
miss out on opportunities for higher performance.

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

32 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

Because the fund had a policy of investing in stocks of all capitalizations and
used a comparatively more value-oriented investment approach prior to July 1997,
its performance would have been different if current policies had been in
effect.

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 29.09%
'90 -8.05%
'91 30.89%
'92 17.77%
'93 10.01%
'94 -3.60%
'95 31.00%
'96 9.85%
'97 29.20%
'98 16.39%
BEST QUARTER: Q4'98, 27.51%
WORST QUARTER: Q3'98, down 21.18%
Year-to-date performance as of 9/30/99: up 1.17%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
MANHATTAN FUND 16.39 15.84 15.43
Russell Midcap Growth Index 17.86 17.34 17.30
S&P 500 Index 28.52 24.02 19.16
</TABLE>

The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.

The S&P 500 is an unmanaged index of U.S. stocks.

Manhattan Fund 33
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
JENNIFER K. SILVER is a Vice President of Neuberger Berman Management and
a Managing Director of Neuberger Berman, LLC. Currently the Director of the
Growth Equity Group, she has been co-manager of the fund since joining the firm
in 1997. From 1981 to 1997, she was an analyst and a portfolio manager at
another firm.

BROOKE A. COBB is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the fund since
joining the firm in 1997. From 1972 to 1997, he was a portfolio manager at
several other firms.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.79% of
average net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.79
PLUS: Distribution (12b-1) fees None
Other expenses 0.21
....
EQUALS: Total annual operating expenses 1.00
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $102 $318 $552 $1225
</TABLE>

34 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what
it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 11.28 13.27 11.94 14.51 9.42
PLUS: Income from investment operations
Net investment income (loss) -- (0.04) (0.03) (0.05) (0.06)
Net gains/losses -- realized and
unrealized 2.70 (0.33) 4.26 (1.20) 3.54
Subtotal: income from investment
operations 2.70 (0.37) 4.23 (1.25) 3.48
MINUS: Distributions to shareholders
Income dividends 0.01 -- -- -- --
Capital gain distributions 0.70 0.96 1.66 3.84 0.83
Subtotal: distributions to
shareholders 0.71 0.96 1.66 3.84 0.83
................................................
EQUALS: Share price (NAV) at end of year 13.27 11.94 14.51 9.42 12.07
- -------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income (loss) -- as they actually are as well as how
they would have been if certain expense offset arrangements had not been in effect.
Net expenses -- actual 0.98 0.98 0.98 0.94 1.00
Expenses(1) -- 0.98 0.99 0.95 1.00
Net investment income (loss) -- actual 0.03 (0.27) (0.20) (0.42) (0.50)
- -------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 26.00 (2.91) 38.75 (11.02) 37.40
Net assets at end of year (in millions of dollars) 612.0 516.2 570.4 476.6 566.0
Portfolio turnover rate (%) 44 53 89 90 115
</TABLE>

The figures above have been audited by PricewaterhouseCoopers LLP, the fund's
independent accountants. Their report, along with full financial statements,
appears in the fund's most recent shareholder report (see back cover).

(1) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

Manhattan Fund 35
<PAGE>
[PHOTO]

NEUBERGER BERMAN
MILLENNIUM FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBMIX ABOVE: PORTFOLIO MANAGERS JENNIFER K. SILVER AND MICHAEL F.
MALOUF
</TABLE>

"WE MAKE IT OUR BUSINESS TO TRACK DOWN PROMISING SMALL-CAP COMPANIES WHEREVER
THEY MAY BE. AS A RESULT, THIS FUND ENABLES INVESTORS WHO CAN ACCEPT THE RISKS
OF SMALL-CAP STOCKS TO PURSUE THE POTENTIAL FOR LONG-TERM GROWTH THAT SMALL-CAPS
MAY PROVIDE."

36
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

GROWTH INVESTING
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly growing industries.

While most growth stocks are known to investors, they may not yet have reached
their full potential. The growth investor looks for
indications of continued success.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

The managers take a growth approach to selecting stocks, looking for new
companies that are in the developmental stage as well as older companies that
appear poised to grow because of new products, markets or management. Factors in
identifying these firms may include financial strength, a strong position
relative to competitors and a stock price that is reasonable in light of its
growth rate.

The managers follow a disciplined selling strategy and may drop a stock from the
portfolio when it reaches a target price, fails to perform as expected, or
appears substantially less desirable than another stock.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Millennium Fund 37
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

By focusing on small-cap stocks, the fund is subject to many of their risks,
including the risk its holdings may:

- - fluctuate more widely in price than the market as a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when small-cap stocks are out of favor

- - be more affected by the performance of those sectors in which small-cap growth
stocks may be concentrated

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

PERFORMANCE -- Because the fund is in its first calendar year of operations,
performance charts are not included.

38 Neuberger Berman
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
MICHAEL F. MALOUF AND JENNIFER K. SILVER are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. They have co-managed
the fund since its inception in 1998. Silver has been Director of the Growth
Equity Group since 1997 and was an analyst and a portfolio manager at another
firm from 1981 to 1997. Malouf joined the firm in 1998. From 1991 to 1998, he
was a portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services.

For investment management services, the fund pays Neuberger Berman Management a
fee at the annual rate of 0.85% of the first $250 million of average net assets,
0.80% of the next $250 million, 0.75% of the next $250 million, 0.70% of the
next $250 million and 0.65% of the average daily net assets in excess of
$1 billion.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------
ANNUAL OPERATING EXPENSES (% of average net assets)*
These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 1.11
PLUS: Distribution (12b-1) fees None
Other expenses 1.02
....
EQUALS: Total annual operating expenses 2.13
</TABLE>

* NEUBERGER BERMAN MANAGEMENT REIMBURSES CERTAIN EXPENSES OF THE FUND SO THAT
THE TOTAL ANNUAL OPERATING EXPENSES OF THE FUND ARE LIMITED TO 1.75% OF
AVERAGE NET ASSETS. THIS ARRANGEMENT CAN BE TERMINATED UPON SIXTY DAYS'
NOTICE TO THE FUND. IN ADDITION, THE ARRANGEMENT DOES NOT COVER INTEREST,
TAXES, BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES. THE FUND HAS AGREED
TO REPAY NEUBERGER BERMAN MANAGEMENT THROUGH 12/31/00 FOR EXPENSES REIMBURSED
TO THE FUND THROUGH 12/31/99 PROVIDED THAT REPAYMENT DOES NOT CAUSE THE
FUND'S ANNUAL OPERATING EXPENSES TO EXCEED 1.75% OF ITS AVERAGE NET ASSETS.
THE TABLE INCLUDES COSTS PAID BY THE FUND AND ITS SHARE OF MASTER PORTFOLIO
COSTS. FOR MORE INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON
PAGE 70.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses** $216 $667 $1144 $2462
</TABLE>

** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT DESCRIBED IN THE FOOTNOTE
ABOVE, YOUR COSTS FOR THE ONE-, THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE
$178, $551, $949, AND $2,062 RESPECTIVELY.

Millennium Fund 39
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999(1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout the period indicated. You can see what the fund earned (or
lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of period 10.00
PLUS: Income from investment operations
Net investment loss (0.10)
Net gains/losses -- realized and unrealized 9.59
Subtotal: income from investment operations 9.49
.................
EQUALS: Share price (NAV) at end of period 19.49
- -------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment loss -- as they actually are as well as how they
would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.75(2)
Gross expenses(3) 2.13(2)
Expenses(4) 1.76(2)
Net investment loss -- actual (1.23)(2)
- -------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over the period, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold
securities.
Total return (%) 94.90(5)(6)
Net assets at end of period (in millions of dollars) 66.4
Portfolio turnover rate (%) 208
</TABLE>

(1) PERIOD FROM 10/20/98 (BEGINNING OF OPERATIONS) TO 8/31/99.

(2) ANNUALIZED.

(3) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(4) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(5) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.
(6) NOT ANNUALIZED.

40 Neuberger Berman
<PAGE>
[PHOTO]

NEUBERGER BERMAN
PARTNERS FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NPRTX ABOVE: PORTFOLIO MANAGERS ROBERT I. GENDELMAN AND S. BASU
MULLICK
</TABLE>

"OUR GOAL IS TO FIND COMPANIES THAT WE BELIEVE ARE UNDERVALUED RELATIVE TO THEIR
EARNINGS POTENTIAL, WHERE WE SEE A GAP BETWEEN THE ACTUAL PRICE OF A STOCK AND
ITS INTRINSIC VALUE. WHEN A COMPANY GROWS IN VALUE AND/OR THE VALUATION GAP
CLOSES, THE SUCCESS OF OUR STRATEGY IS REALIZED."

41
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

MID- AND LARGE-
CAP STOCKS
Mid-cap stocks have historically performed more like small-caps than like large-
caps. Their prices can rise and fall substantially, although they have the
potential to offer attractive long-term returns.

Large companies are usually well-established. Compared to mid-cap companies,
they may be less responsive to change, but their returns have sometimes led
those of mid-cap companies, often with lower volatility.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of mid- to
large-capitalization companies. The fund seeks to reduce risk by diversifying
among many companies and industries.

The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - strong fundamentals, such as a company's financial, operational, and
competitive positions

- - consistent cash flow

- - a sound earnings record through all phases of the market cycle

The managers may also look for other characteristics in a company, such as a
strong position relative to competitors, a high level of stock ownership among
management, and a recent sharp decline in stock price that appears to be the
result of a short-term market overreaction to negative news.

The fund generally considers selling a stock when it reaches the managers'
target price, when it fails to perform as expected, or when other opportunities
appear more attractive.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

42 Neuberger Berman
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

To the extent that the fund emphasizes mid- or large-cap stocks, it takes on the
associated risks. Mid-cap stocks tend to be more volatile than large-cap stocks,
and are usually more sensitive to economic and market factors. At any given
time, one or both groups of stocks may be out of favor with investors.

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

Partners Fund 43
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 22.78%
'90 -5.11%
'91 22.36%
'92 17.52%
'93 16.46%
'94 -1.89%
'95 35.21%
'96 26.49%
'97 29.23%
'98 6.28%
BEST QUARTER: Q4'98, up 16.37%
WORST QUARTER: Q3'98, down 14.73%
Year-to-date performance as of 9/30/98: down 1.22%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
PARTNERS FUND 6.28 18.17 16.22
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.38
</TABLE>

The S&P 500 is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.

44 Neuberger Berman
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
ROBERT I. GENDELMAN AND S. BASU MULLICK are Vice Presidents of Neuberger
Berman Management and Managing Directors of Neuberger Berman, LLC. Gendelman has
been manager of the fund since 1994, and was joined by Mullick in 1998.
Gendelman was a portfolio manager at another firm from 1992 to 1993, as was
Mullick from 1993 to 1998.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.71% of
average net
assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.71
PLUS: Distribution (12b-1) fees None
Other expenses 0.11
....
EQUALS: Total annual operating expenses 0.82
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $84 $262 $455 $1014
</TABLE>

Partners Fund 45
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 21.32 23.72 23.88 31.60 22.97
PLUS: Income from investment operations
Net investment income 0.17 0.22 0.19 0.23 0.27
Net gains/losses -- realized and
unrealized 3.94 2.84 10.36 (2.83) 5.59
Subtotal: income from investment
operations 4.11 3.06 10.55 (2.60) 5.86
MINUS: Distributions to shareholders
Income dividends 0.11 0.20 0.22 0.19 --
Capital gain distributions 1.60 2.70 2.61 5.84 2.41
Subtotal: distributions to
shareholders 1.71 2.90 2.83 6.03 2.41
................................................
EQUALS: Share price (NAV) at end of year 23.72 23.88 31.60 22.97 26.42
- ------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they
would have been if certain expense offset arrangements had not been in effect.
Net expenses -- actual 0.83 0.84 0.81 0.80 0.82
Expenses(1) -- 0.84 0.81 0.80 0.82
Net investment income -- actual 0.83 0.93 0.72 0.78 0.94
- ------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 21.53 13.86 47.11 (10.03) 26.08
Net assets at end of year (in millions of dollars) 1,564.0 1,871.9 3,103.7 2,812.7 2,854.4
Portfolio turnover rate (%) 98 96 77 109 132
</TABLE>

(1) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

46 Neuberger Berman
<PAGE>
[PHOTO]

NEUBERGER BERMAN
REGENCY FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
ABOVE: PORTFOLIO MANAGERS ROBERT I. GENDELMAN AND S. BASU
MULLICK
</TABLE>

"WE FOCUS ON THE MID-CAP SECTOR OF THE MARKET BECAUSE WE BELIEVE THERE ARE
NUMEROUS OPPORTUNITIES THERE TO FIND LESS WELL-KNOWN VALUES. WE LOOK FOR
LEADERSHIP COMPANIES WITH STRONG FUNDAMENTALS WHOSE UNDERLYING VALUE IS NOT YET
REFLECTED IN THEIR STOCK PRICES."

47
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

Mid-caps are less widely followed on Wall Street than
large-caps, which can make it comparatively easier to find attractive stocks
that are not overpriced.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of
mid-capitalization companies. The fund seeks to reduce risk by diversifying
among different companies and industries.

The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - strong fundamentals, such as a company's financial, operational, and
competitive positions

- - consistent cash flow

- - a sound earnings record through all phases of the market cycle

The fund generally considers selling a stock when it reaches the managers'
target price, when it fails to perform as expected, or when other opportunities
appear more attractive.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

48 Neuberger Berman
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term fixed-
income investments. This could help the fund avoid losses but may mean lost
opportunities.

By focusing on mid-cap stocks, the fund is subject to their risks, including the
risk its holdings may:

- - fluctuate more widely in price than the market as
a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when mid-cap stocks are out of favor

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

PERFORMANCE -- Because the fund is new it does not have performance to report.

Regency Fund 49
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
ROBERT I. GENDELMAN AND S. BASU MULLICK are Vice
Presidents of Neuberger Berman Management and Managing Directors of Neuberger
Berman, LLC. They have co-managed the fund since its inception in 1999.
Gendelman was a portfolio manager at another firm from 1992 to 1993, as was
Mullick from 1993 to 1998.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For investment management services, the fund
will pay Neuberger Berman Management a fee at the annual rate of 0.55% of the
first $250 million of average net assets, 0.525% of the next $250 million,
0.500% of the next $250 million, 0.475% of the next $250 million, 0.450% of the
next $500 million, and 0.425% of average net assets in excess of $1.5 billion.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

* NEUBERGER BERMAN MANAGEMENT HAS CONTRACTUALLY AGREED TO REIMBURSE CERTAIN
EXPENSES OF THE FUND THROUGH 12/31/02, SO THAT THE TOTAL ANNUAL OPERATING
EXPENSES OF THE FUND ARE LIMITED TO 1.50% OF AVERAGE NET ASSETS. THIS
ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE COMMISSIONS, AND
EXTRAORDINARY EXPENSES. THE FUND HAS AGREED TO REPAY NEUBERGER BERMAN
MANAGEMENT FOR EXPENSES REIMBURSED TO THE FUND PROVIDED THAT REPAYMENT DOES
NOT CAUSE THE FUND'S ANNUAL OPERATING EXPENSES TO EXCEED 1.50% OF ITS AVERAGE
NET ASSETS. ANY SUCH REPAYMENT MUST BE WITHIN THREE YEARS AFTER THE YEAR IN
WHICH NEUBERGER BERMAN MANAGEMENT INCURRED THE EXPENSE. THE TABLE INCLUDES
COSTS PAID BY THE FUND AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE
INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON PAGE 70.

** OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years
- ------------------------------------------------------------
<S> <C> <C>
Expenses $153 $474
</TABLE>

50 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999(1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout the period indicated. You can see what the fund earned (or
lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of period 10.00
PLUS: Income from investment operations
Net investment income 0.01
Net gains/losses -- realized and unrealized (0.19)
Subtotal: income from investment operations (0.18)
.................
EQUALS: Share price (NAV) at end of period 9.82
- -------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how
they would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.50(2)
Gross expenses(3) 8.38(2)
Expenses(4) 1.51(2)
Net investment income -- actual 0.66(2)
- -------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over the period, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold
securities.
Total return (%) (1.80)(5)(6)
Net assets at end of period (in millions of dollars) 7.9
Portfolio turnover rate (%) 42
</TABLE>

(1) PERIOD FROM 6/1/99 (BEGINNING OF OPERATIONS) TO 8/31/99.

(2) ANNUALIZED.

(3) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(4) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(5) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.
(6) NOT ANNUALIZED.

Regency Fund 51
<PAGE>
[PHOTO]

NEUBERGER BERMAN
SOCIALLY RESPONSIVE FUND
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBSRX ABOVE: PORTFOLIO MANAGER JANET PRINDLE
</TABLE>

"WE BELIEVE THAT SOUND PRACTICES IN AREAS LIKE EMPLOYMENT AND THE ENVIRONMENT
CAN HAVE A POSITIVE IMPACT ON A COMPANY'S BOTTOM LINE. WE LOOK FOR COMPANIES
THAT MEET VALUE INVESTING CRITERIA AND ALSO SHOW A COMMITMENT TO UPHOLD OR
IMPROVE THEIR STANDARDS OF CORPORATE CITIZENSHIP."

52
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

SOCIAL INVESTING
Funds that follow social policies seek something in addition to economic
success. They are designed to allow investors to put their money to work and
also support companies that
follow principles of good corporate citizenship.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING PRIMARILY IN
SECURITIES OF COMPANIES THAT MEET THE FUND'S FINANCIAL CRITERIA AND
SOCIAL POLICY.

To pursue this goal, the fund invests mainly in common stocks of mid- to
large-capitalization companies. The fund seeks to reduce risk by investing in a
large number of companies across many different industries.

The managers initially screen companies using value investing criteria. They
look for undervalued companies with solid balance sheets, strong
management, consistent cash flows, and other value-related factors. Among
companies that meet these criteria, the managers look for those that show
leadership in three areas:
- - environmental concerns
- - diversity in the work force
- - progressive employment and workplace practices, and community relations

The managers typically also look at a company's record in public health and the
nature of its products. The managers judge firms on their corporate
citizenship overall, considering their accomplishments as well as their goals.
While these judgments are inevitably subjective, the fund endeavors to avoid
companies that derive revenue from alcohol, tobacco, gambling, or weapons, or
that are involved in nuclear power. The fund also does not invest in any company
that derives its total revenue primarily from non-consumer sales to the
military.

The fund normally invests at least 65% of its total assets in accordance with
its social policy. When a stock no longer meets the fund's investment criteria,
the managers will consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Socially Responsive Fund 53
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities
involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

The fund's social policy could cause it to underperform similar funds that do
not have a social policy. Among the reasons for this are:

- - undervalued stocks that don't meet the social criteria could outperform those
that do

- - economic or political changes could make certain companies less attractive for
investment

- - the social policy could cause the fund to sell or avoid stocks that
subsequently perform well

54 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

As a frame of reference, the table includes a broad-based market index. The
fund's performance figures include all of its expenses; the index does not
include costs of investment.

YEAR-BY-YEAR % RETURNS as of 12/31 each year

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989
'90
'91
'92
'93
'94
'95 38.94%
'96 18.50%
'97 24.41%
'98 15.01%
BEST QUARTER: Q4'98, up 20.98%
WORST QUARTER: Q3'98, down 14.24%
Year-to-date performance as of 9/30/99: up 0.45%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98

<TABLE>
<CAPTION>
Since
Inception
1 Year 3/16/94
- ----------------------------------------------------------
<S> <C> <C>
SOCIALLY RESPONSIVE FUND 15.01 18.67
S&P 500 Index 28.52 25.00
</TABLE>

The S&P 500 is an unmanaged index of U.S. stocks.

Socially Responsive Fund 55
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
JANET PRINDLE, a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC, joined the latter firm in 1977. She has been
managing assets using social criteria since 1990 and has been manager of the
fund since 1994.

ROBERT LADD and INGRID SAUKAITIS are Vice Presidents of Neuberger Berman
Management and have been Associate Managers of the fund since 1997. Ladd has
been a portfolio manager at the firm since 1992 and is a Managing Director of
Neuberger Berman, LLC; Saukaitis was project director for a social research
group from 1995 to 1997.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor, and in turn engages Neuberger Berman, LLC to provide management and
related services. For the 12 months ended 8/31/99, the management/administration
fees paid to Neuberger Berman Management were 0.80% of average net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.80
PLUS: Distribution (12b-1) fees None
Other expenses 0.30
....
EQUALS: Total annual operating expenses 1.10
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $112 $350 $606 $1340
</TABLE>

56 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 10.07 11.84 13.88 17.79 16.32
PLUS: Income from investment operations
Net investment income 0.03 0.02 0.03 0.07 0.02
Net gains/losses -- realized and
unrealized 1.76 2.35 4.33 (1.11) 5.94
Subtotal: income from investment
operations 1.79 2.37 4.36 (1.04) 5.96
MINUS: Distributions to shareholders
Income dividends 0.02 0.02 0.03 0.03 0.07
Capital gain distributions -- 0.31 0.42 0.40 0.88
Subtotal: distributions to
shareholders 0.02 0.33 0.45 0.43 0.95
................................................
EQUALS: Share price (NAV) at end of year 11.84 13.88 17.79 16.32 21.33
- ------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they
would have been if certain expense reimbursement/repayment and offset arrangements had not been in effect.
Net expenses -- actual 1.51 1.50 1.48 1.10 1.10
Gross expenses 2.50(1) 1.69(1) 1.20(1) -- --
Expenses(2) -- 1.50 1.49 1.10 1.10
Net investment income -- actual 0.36 0.19 0.23 0.43 0.12
- ------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 17.82(3) 20.19(3) 31.96 (6.02) 37.09
Net assets at end of year (in millions of dollars) 8.2 32.9 59.7 82.5 118.9
Portfolio turnover rate (%) 58 53 51 47 53
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT/REPAYMENT.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

Socially Responsive Fund 57
<PAGE>
YOUR INVESTMENT

SHARE PRICES
- ------------------------------------------------------------

SHARE PRICE CALCULATIONS
A fund's share price is the total value of its assets minus its liabilities,
divided by the total number of shares. Because the value of a fund's securities
changes every business day, the share price usually changes as well.

When valuing portfolio securities, the funds use market prices. However, in rare
cases, events that occur after certain markets have closed may render these
prices unreliable.

When the fund believes a market price does not reflect a security's true value,
the fund may substitute for the market price a fair-value estimate made
according to methods approved by its trustees. A fund may also use these methods
to value certain types of illiquid securities.

Because these funds do not have sales charges, the price you pay for each share
of a fund is the fund's net asset value per share. Similarly, because there are
no fees for selling shares, the fund pays you the full share price when you sell
shares. If you use an investment provider, that provider may charge fees which
are in addition to those described in this prospectus.

The funds are open for business every day the New York Stock Exchange is open.
The Exchange is closed on all national holidays and Good Friday; fund shares
will not be priced on those days. In general, every buy or sell order you place
will go through at the next share price to be calculated after your order has
been accepted. Each fund calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time. If you
use an investment provider, depending on when it accepts orders, it's possible
that the fund's share price could change on days when you are unable to buy or
sell shares.

Because foreign markets may be open on days when U.S. markets are closed, the
value of foreign securities owned by a fund could change on days when you can't
buy or sell fund shares. Remember, though, any purchase or sale takes place at
the next share price calculated after your order is received.

58 Neuberger Berman
<PAGE>
PRIVILEGES
AND SERVICES
- ------------------------------------------------------------

DOLLAR-COST AVERAGING
Systematic investing allows you to take advantage of the principle of
dollar-cost averaging. When you make regular investments of a given amount --
say, $100 a month -- you will end up investing at different share prices over
time. When the share price is high, your $100 buys fewer shares; when the share
price is low, your $100 buys more shares. Over time, this can help lower the
average price you pay per share.

Dollar-cost averaging cannot guarantee you a profit or protect you from losses
in a declining market. But it can be beneficial over the long term.

If you purchase fund shares directly from Neuberger Berman Management, you have
access to the services listed below. If you are purchasing shares through an
investment provider, consult that provider for information about investment
services.

SYSTEMATIC INVESTMENTS -- This plan lets you take advantage of dollar-cost
averaging by establishing periodic investments of $100 a month or more. You
choose the schedule and amount. Your investment money may come from a Neuberger
Berman money market fund or your bank account.

SYSTEMATIC WITHDRAWALS -- This plan lets you arrange withdrawals of at least
$100 from a Neuberger Berman fund on a periodic schedule. You can also set up
payments to distribute the full value of an account over a given time. While
this service can be helpful to many investors, be aware that it could generate
capital gains or losses.

ELECTRONIC BANK TRANSFERS -- When you sell fund shares, you can have the money
sent to your bank account electronically rather than mailed to you as a check.
Please note that your bank must be a member of the Automated Clearing House, or
ACH, system. This service is not available for retirement accounts.

INTERNET ACCESS -- At www.nbfunds.com, you can make transactions, check your
account, and access a wealth of information.

FUNDFONE-REGISTERED TRADEMARK- -- Get up-to-date performance and account
information through our 24-hour automated service by calling 800-335-9366. If
you already have an account with us, you can place orders to buy, sell, or
exchange fund shares.

Your Investment 59
<PAGE>
DISTRIBUTIONS
AND TAXES
- ------------------------------------------------------------

BUYING SHARES BEFORE
A DISTRIBUTION
The money a fund earns, either as income or as capital gains, is reflected
in its share price until the fund distributes the money. At that time, the
amount of the distribution is deducted from the share price. The amount of the
distribution is either reinvested in additional fund shares or paid to
shareholders in cash.

Because of this, if you buy shares just before a fund makes a distribution,
you'll end up getting some of your investment back as a taxable distribution.
You can avoid this situation by waiting to invest until after the distribution
has been made.

Generally, if you're investing in a tax-advantaged account, there are no tax
consequences to you.

DISTRIBUTIONS -- Each fund pays out to shareholders any net income and net
capital gains. Ordinarily, the funds make these distributions once a year (in
December), except for Guardian Fund, which typically distributes any net income
quarterly.

Unless you designate otherwise, your income and capital gain distributions from
a fund will be reinvested in that fund. However, if you prefer you may:

- - receive all distributions in cash

- - reinvest capital gain distributions, but receive income distributions in cash

To take advantage of one of these options, please indicate your choice on your
application. If you use an investment provider, you must consult its
representative about whether your income and capital gain distributions from a
fund will be reinvested in that fund or paid to you in cash.

HOW DISTRIBUTIONS ARE TAXED -- Except for tax-advantaged retirement accounts and
other tax-exempt investors, all fund distributions you receive are generally
taxable to you, regardless of whether you take them in cash or reinvest them.
Fund distributions to Roth IRAs, other individual retirement accounts and
qualified retirement plans generally are tax free. Eventual withdrawals from a
Roth IRA also may be tax free, while withdrawals from other retirement accounts
and plans generally are subject to tax.

Distributions are taxable in the year you receive them. In some cases,
distributions you receive in January are taxable as if they had been paid the
previous year. Your tax statement (see sidebar on facing page) will help clarify
this for you.

60 Neuberger Berman
<PAGE>
- ------------------------------------------------------------

TAXES AND YOU
The taxes you actually owe on distributions and transactions can vary with many
factors, such as your tax bracket, how long you held your shares, and whether
you owe alternative minimum tax.

How can you figure out your tax liability on fund distributions and share
transactions? One helpful tool is the tax statement that we or your investment
provider send you every January. It details the distributions you received
during the past year and shows their tax status. A separate statement covers
your share transactions.

Most importantly, consult your tax professional. Everyone's tax situation is
different, and your professional should be able to help you answer any questions
you may have.

Income distributions and net short-term capital gain
distributions are generally taxed as ordinary income. Distributions of other
capital gains are generally taxed as long-term capital gains. The tax treatment
of capital gain distributions depends on how long the fund held the securities
it sold, not when you bought your shares of the fund, or whether you reinvested
your distributions.

HOW SHARE TRANSACTIONS ARE TAXED -- When you sell or exchange fund shares, you
generally realize a taxable gain or loss. The exception, once again, is
tax-advantaged retirement accounts.

UNCASHED CHECKS -- When you receive a check, you may want to deposit or cash it
right away, because you will not receive interest on uncashed checks.

Your Investment 61
<PAGE>
MAINTAINING YOUR
ACCOUNT
- ------------------------------------------------------------

BACKUP WITHHOLDING
When sending in your application, it's important to provide your Social Security
or other taxpayer ID number. If we don't have this number, the IRS requires the
fund to withhold 31% of all money you receive from the fund, whether from
selling shares or from distributions. We are also required to withhold 31% of
all money you receive from distributions if the IRS tells us that you are
subject to backup withholding.

If the appropriate ID number has been applied for but is not available (such as
in the case of a custodial account for a newborn), you may open the account
without a number. However, we must receive the number within 60 days in order to
avoid backup withholding. For information on custodial accounts, call
800-877-9700.

WHEN YOU BUY SHARES -- Instructions for buying shares from Neuberger Berman
Management are on pages 66 and 67. See the sidebars on pages 64 and 65 if you
are buying shares through an investment provider. Whenever you make an initial
investment in one of the funds or add to an existing account (except with an
automatic investment), you will be sent a statement confirming your transaction.
All investments must be made in U.S. dollars, and investment checks must be
drawn on a U.S. bank.

WHEN YOU SELL SHARES -- If you bought your shares from Neuberger Berman
Management, instructions for selling shares are on pages 68 and 69. See the
sidebars on pages 64 and 65 if you want to sell shares you purchased through an
investment provider. You can place an order to sell some or all of your shares
at any time. The proceeds from the shares you sold are generally sent out the
next business day after your order is executed, and nearly always within three
business days. There are two cases in which proceeds may be delayed beyond this
time:

- - in unusual circumstances where the law allows additional time if needed

- - if a check you wrote to buy shares hasn't cleared by
the time you sell those shares

The funds do not issue certificates for shares. If you have share certificates
from prior purchases, please note that the only way to redeem share certificates
is by sending in those certificates. Also, if you lose a certificate, you will
be charged a fee to replace it.

62 Neuberger Berman
<PAGE>
- ------------------------------------------------------------

SIGNATURE GUARANTEES
A signature guarantee is a guarantee that your signature is authentic.

Most banks, brokers, and other financial institutions can provide you with one.
Some may charge a fee; others may not, particularly if you are a customer of
theirs.

A notarized signature from a notary public is not a signature guarantee.

If you think you may need to sell shares soon after buying them, you can avoid
the check clearing time (which may be up to 15 days) by investing by wire or
certified check.

In some cases, you will have to place your order to sell shares in writing, and
you will need a signature guarantee (see sidebar). These cases include:

- - when selling more than $50,000 worth of shares

- - when you want the check for the proceeds to be made out to someone other than
an owner of record, or sent somewhere other than the address of record

- - when you want the proceeds sent by wire or
electronic transfer to a bank account you have not designated in advance

When selling shares in an account that you do not intend to close, be sure to
leave at least $1,000 worth of shares in the account. Otherwise, the fund has
the right to request that you bring the balance back up to the minimum level. If
you have not done so within 60 days, we may close your account and send you the
proceeds by mail.

UNCASHED CHECKS -- We do not pay interest on uncashed checks from fund
distributions or the sale of fund shares. We are not responsible for checks
after they are sent to you. After allowing a reasonable time for delivery,
please call us if you have not received an expected check. While we cannot track
a check, we may make arrangements for a replacement.

Your Investment 63
<PAGE>
MAINTAINING YOUR
ACCOUNT CONTINUED
- -------------------------------------------------------------------

INVESTMENT PROVIDERS
The fund shares available in this prospectus may also be purchased through
certain investment providers such as banks, brokerage firms, workplace
retirement programs, and financial advisers.

The fees and policies outlined in this prospectus are set by the funds and by
Neuberger Berman Management. However, if you use an investment provider, most of
the information you'll need for managing your investment will come from that
provider. This includes information on how to buy and sell shares, investor
services, and additional policies.

STATEMENTS AND CONFIRMATIONS -- Please review your account statements and
confirmations carefully as soon as you receive them. You must contact us within
30 days if you have any questions or notice any discrepancies. Otherwise, you
may adversely affect your right to make a claim about the transaction(s).

WHEN YOU EXCHANGE SHARES -- You can move money from one Neuberger Berman fund to
another through an exchange of shares. There are three things to remember when
making an exchange:

- - both accounts must have the same registration

- - you will need to observe the minimum investment and minimum account balance
requirements for the fund accounts involved

- - because an exchange is a sale for tax purposes, consider any tax consequences
before placing your order

The exchange privilege can be withdrawn from any investor that we believe is
trying to "time the market" or is otherwise making exchanges that we judge to be
excessive. Frequent exchanges can interfere with fund management and affect
costs and performance for other shareholders.

PLACING ORDERS BY TELEPHONE -- Neuberger Berman fund investors have the option
of placing telephone orders to buy, sell, or exchange shares. On non-retirement
accounts, this option is available to you unless
you indicate on your account application (or in a subsequent letter to us or to
State Street Bank and Trust Company) that you don't want it.

64 Neuberger Berman
<PAGE>
- ------------------------------------------------------------

INVESTMENT PROVIDERS
(CONTINUED)
If you use an investment provider, you must contact that provider to buy or sell
shares of any of the funds described in this prospectus.

Most investment providers allow you to take advantage of the Neuberger Berman
fund exchange program, which is designed for moving money from one Neuberger
Berman fund to another through an exchange of shares. See page 64 for more
information.

Whenever we receive a telephone order, we take steps to make sure the order is
legitimate. These may include asking for identifying information and recording
the call. As long as a fund and its representatives take reasonable measures to
verify the authenticity of calls, investors may be responsible for any losses
caused by unauthorized telephone orders.

In unusual circumstances, it may be difficult to place an order by phone. In
these cases, consider sending your order by fax or express delivery.

OTHER POLICIES -- Under certain circumstances, the funds reserve the right to:

- - suspend the offering of shares

- - reject any exchange or investment order

- - change, suspend, or revoke the exchange privilege

- - suspend the telephone order privilege

- - satisfy an order to sell fund shares with securities rather than cash, for
certain very large orders

- - suspend or postpone your right to sell fund shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the SEC

- - change its investment minimums or other requirements for buying and selling,
or waive any minimums or requirements for certain investors

Your Investment 65
<PAGE>
BUYING SHARES

<TABLE>
<S> <C>
Method Things to know
</TABLE>

- -----------------------------------------------------------------------------
SENDING US A CHECK

Your first investment must be at least $1,000

Additional investments can be as little as $100

We cannot accept cash, money orders, starter checks, or travelers checks

You will be responsible for any losses or fees resulting from a bad check; if
necessary, we may sell other shares belonging to you in order to cover these
losses

All checks must be made out to "Neuberger Berman Funds;" we cannot accept checks
made out to you or other parties and signed over to us

- -----------------------------------------------------------------------------
WIRING MONEY

All wires must be for at least $1,000

- -----------------------------------------------------------------------------
EXCHANGING FROM
ANOTHER FUND

All exchanges must be for at least $1,000

Both accounts involved must be registered in the same name, address and tax ID
number

An exchange order cannot be cancelled or changed once it has been placed

- -----------------------------------------------------------------------------
CALLING IN YOUR ORDER
(with follow-up payment)

All phone investment orders must be for at least $1,000

The money for your shares must be received within three days after you place
your order, or your order may be cancelled

You will be responsible for any losses or fees resulting from a cancelled order;
if necessary, we may sell other shares belonging to you in order to cover these
losses

Not available on retirement accounts

- -----------------------------------------------------------------------------
SETTING UP SYSTEMATIC
INVESTMENTS

All investments must be at least $100

66 Neuberger Berman
<PAGE>
RETIREMENT PLANS
We offer investors a number of tax-advantaged plans for retirement saving:

TRADITIONAL IRAS allow money to grow tax-deferred until you take it out at
retirement. Contributions are deductible for some investors, but even when
they're not, an IRA can be beneficial.

ROTH IRAS offer tax-free growth like a traditional IRA, but instead of
tax-deductible contributions, the withdrawals are tax-free for investors who
meet certain requirements.

Also available: SEP-IRA, SIMPLE, Keogh, and other types of plans. Consult your
tax professional to find out which types of plans may be beneficial for you,
then call 800-877-9700 for information on any Neuberger Berman retirement plan.

Instructions

- ----------------------------------------------------

Fill out the application and enclose your check

If regular first-class mail, address to:
NEUBERGER BERMAN FUNDS
BOSTON SERVICE CENTER
P.O. BOX 8403
BOSTON, MA 02266-8403

If express delivery, registered mail, or certified mail, send to:
NEUBERGER BERMAN FUNDS
C/O STATE STREET BANK AND TRUST COMPANY
66 BROOKS DRIVE
BRAINTREE, MA 02184-3839

- ----------------------------------------------------

Before wiring any money, call 800-877-9700 for an order confirmation

Have your financial institution send your wire to State Street Bank and Trust
Company

Include your name, the fund name, your account number and other information as
requested

- ----------------------------------------------------

Call 800-877-9700 to place your order

To place an order using FUNDFONE-Registered Trademark-, call 800-335-9366

- ----------------------------------------------------

Call 800-877-9700 to place your order

Follow up with a wire, electronic transfer, or check
(via express delivery)

To add shares to an existing account using FUNDFONE-Registered Trademark-, call
800-335-9366

- ----------------------------------------------------

Call 800-877-9700 for instructions

Your Investment 67
<PAGE>
SELLING SHARES

<TABLE>
<S> <C>
Method Things to know
</TABLE>

- -----------------------------------------------------------------------------
SENDING US A LETTER

Unless you tell us otherwise, we will mail your proceeds by check to the address
of record, payable to the registered owner(s)

If you have designated a bank account on your application, you can request that
we wire the proceeds to this account; if the total balance in all of your
Neuberger Berman fund accounts is less than $200,000, you will be charged an
$8.00 fee

You can also request that we send the proceeds to your designated bank account
by electronic transfer without fee

You may need a signature guarantee

- -----------------------------------------------------------------------------
SENDING US A FAX

For amounts of up to $50,000

Not available if you have changed the address on the account by phone, fax, or
postal address change in the past 15 days

- -----------------------------------------------------------------------------
CALLING IN YOUR ORDER

All phone orders to sell shares must be for at least $1,000, unless you are
closing out an account

Not available if you have declined the phone option or are selling shares in a
retirement account

Not available if you have changed the address on the account by phone, fax, or
postal address change in the past 15 days

- -----------------------------------------------------------------------------
EXCHANGING INTO
ANOTHER FUND

All exchanges must be for at least $1,000

Both accounts involved must be registered in the same name, address and tax ID
number

An exchange order cannot be cancelled or changed once it has been placed

- -----------------------------------------------------------------------------
SETTING UP SYSTEMATIC
WITHDRAWALS

For accounts with at least $5,000 worth of shares in them

Withdrawals must be at least $100

68 Neuberger Berman
<PAGE>
INTERNET CONNECTION
Investors with Internet access can enjoy many valuable and time-saving features
by visiting us on the World Wide Web at www.nbfunds.com.

The site offers complete information on our funds, current performance data, and
an Investment Education Center with interactive worksheets for college and
retirement planning. Also available are relevant news items, tax information,
portfolio manager interviews, and related articles.

As a Neuberger Berman funds shareholder, you can use the web site to access
account information and even make secure transactions -- 24 hours a day.

Instructions

- ----------------------------------------------------

Send us a letter requesting us to sell shares signed by all registered owners;
include your name, account number, the fund name, the dollar amount or number of
shares you want to sell, and any other instructions

If regular first-class mail, send to:
NEUBERGER BERMAN FUNDS
BOSTON SERVICE CENTER
P.O. BOX 8403
BOSTON, MA 02266-8403

If express delivery, registered mail, or certified mail, send to:
NEUBERGER BERMAN FUNDS
C/O STATE STREET BANK AND TRUST COMPANY
66 BROOKS DRIVE
BRAINTREE, MA 02184-3839

- ----------------------------------------------------

Write a request to sell shares as described above

Fax it to 212-476-8848

Call 800-877-9700 to make sure your fax arrived and is in order

- ----------------------------------------------------

Call 800-877-9700 to place your order

Give your name, account number, the fund name, the dollar amount or number of
shares you want to sell, and any other instructions

To place an order using FUNDFONE-Registered Trademark-, call 800-335-9366

- ----------------------------------------------------

Call 800-877-9700 to place your order

To place an order using FUNDFONE-Registered Trademark-, call 800-335-9366

- ----------------------------------------------------

Call 800-877-9700 for instructions

Your Investment 69
<PAGE>
FUND STRUCTURE
- ------------------------------------------------------------

CONVERSION TO THE EURO
Like other mutual funds, the funds could be affected by problems relating to the
conversion of European currencies into the Euro, which extends from 1/1/99 to
7/1/02.

At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with Euro issues and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies in the funds' portfolios will be affected by this
issue.

At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt fund operations and investments if problems arise, has been
adequately addressed until the conversion is completed.

Each of the funds in this prospectus uses a "master/feeder" structure.

Rather than investing directly in securities, each fund is a "feeder fund,"
meaning that it invests in a corresponding "master portfolio." The master
portfolio in turn invests in securities, using the strategies described in this
prospectus. One potential benefit of this structure is lower costs, since the
expenses of the master portfolio can be shared with any other feeder funds. In
this prospectus we have used the word "fund" to mean a feeder fund and its
master portfolio.

For reasons relating to costs or a change in investment goal, among others, a
feeder fund could switch to another master portfolio or decide to manage its
assets itself. No fund in this prospectus is currently contemplating such a
move.

70 Neuberger Berman
<PAGE>
- -------------------------------------------------------------------

NOTES

71
<PAGE>
72
<PAGE>
- --------------------------------------------

NOTES

73
<PAGE>
74
<PAGE>
- --------------------------------------------

NOTES

75
<PAGE>
OBTAINING INFORMATION
You can obtain a shareholder report, SAI, and other information from:

NEUBERGER BERMAN
MANAGEMENT INC.
605 Third Avenue 2nd floor
New York, NY 10158-0180

800-877-9700
212-476-8800

Web site:
www.nbfunds.com
Email:
[email protected]

You can also request copies of this information from the SEC for the cost of a
duplicating fee by sending an e-mail request to [email protected] or by writing
to the SEC's Public Reference Section, Washington DC 20549-0102. They are also
available from the EDGAR Database on the SEC's website at www.sec.gov.

You may also view and copy the documents at the SEC's Public Reference Room in
Washington. Call 202-942-8090 for information about the operation of the Public
Reference Room.

NEUBERGER BERMAN EQUITY FUNDS

- - No load

- - No sales charges

- - No 12b-1 fees

If you'd like further details on any of these funds, you can request a free copy
of the following documents:

SHAREHOLDER REPORTS -- Published twice a year, the shareholder reports offer
information about the fund's recent performance, including:

- - a discussion by the portfolio manager(s) about strategies and market
conditions

- - fund performance data and financial statements

- - complete portfolio holdings

STATEMENT OF ADDITIONAL INFORMATION -- The SAI contains more comprehensive
information on these funds, including:

- - various types of securities and practices, and their risks

- - investment limitations and additional policies

- - information about each fund's management and business structure

The SAI is hereby incorporated by reference into this prospectus, making it
legally part of the prospectus.

Investment manager:
NEUBERGER BERMAN MANAGEMENT INC.
Sub-adviser:
NEUBERGER BERMAN, LLC

[LOGO]

NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180

[RECYCLE LOGO] A0709 04/00 SEC file number: 811-582

<PAGE>

- --------------------------------------------------------------------------------
NEUBERGER BERMAN EQUITY FUNDS AND PORTFOLIOS

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 1, 1999
AS AMENDED MAY 1, 2000

<TABLE>
<CAPTION>
<S> <C>
Neuberger Berman MANHATTAN Fund Neuberger Berman GENESIS Fund
(and Neuberger Berman Manhattan Portfolio) (and Neuberger Berman Genesis Portfolio)

Neuberger Berman FOCUS Fund Neuberger Berman GUARDIAN Fund
(and Neuberger Berman Focus Portfolio) (and Neuberger Berman Guardian Portfolio)

Neuberger Berman PARTNERS Fund Neuberger Berman SOCIALLY RESPONSIVE Fund
(and Neuberger Berman Partners Portfolio) (and Neuberger Berman Socially Responsive Portfolio

Neuberger Berman MILLENNIUM Fund Neuberger Berman INTERNATIONAL Fund
(and Neuberger Berman Millennium Portfolio) (and Neuberger Berman International Portfolio)

Neuberger Berman CENTURY Fund Neuberger Berman REGENCY Fund
(and Neuberger Berman Century Portfolio) (and Neuberger Berman Regency Portfolio)
</TABLE>

- --------------------------------------------------------------------------------

No-Load Mutual Funds
605 Third Avenue, 2nd Floor, New York, NY 10158-0180
Toll-Free 800-877-9700

Neuberger Berman MANHATTAN Fund, Neuberger Berman GENESIS Fund,
Neuberger Berman FOCUS Fund, Neuberger Berman GUARDIAN Fund, Neuberger Berman
PARTNERS Fund, Neuberger Berman SOCIALLY RESPONSIVE Fund, Neuberger Berman
MILLENNIUM Fund, Neuberger Berman INTERNATIONAL Fund, Neuberger Berman REGENCY
Fund and Neuberger Berman CENTURY Fund (each a "Fund") are no-load mutual funds
that offer shares pursuant to a Prospectus dated December 1, 1999, as amended
May 1, 2000. The Funds invest all of their net investable assets in Neuberger
Berman MANHATTAN Portfolio, Neuberger Berman GENESIS Portfolio, Neuberger Berman
FOCUS Portfolio, Neuberger Berman GUARDIAN Portfolio, Neuberger Berman PARTNERS
Portfolio, Neuberger Berman SOCIALLY RESPONSIVE Portfolio, Neuberger Berman
MILLENNIUM Portfolio, Neuberger Berman INTERNATIONAL Portfolio, Neuberger Berman
REGENCY Portfolio and Neuberger Berman CENTURY Portfolio (each a "Portfolio"),
respectively.

<PAGE>

The Funds' Prospectus provides basic information that an investor
should know before investing. You can get a free copy of the Prospectus from
Neuberger Berman Management Inc. ("NB Management"), 605 Third Avenue, 2nd Floor,
New York, NY 10158-0180, or by calling 800-877-9700.

This Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the Prospectus.

No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this SAI in connection
with the offering made by the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by a Fund or its distributor. The Prospectus and this SAI do not constitute an
offering by a Fund or its distributor in any jurisdiction in which such offering
may not lawfully be made.

The "Neuberger Berman" name and logo are service marks of Neuberger
Berman, LLC. "Neuberger Berman Management Inc." and the fund and portfolio names
in this SAI are either service marks or registered trademarks of Neuberger
Berman Management Inc.(C)2000 Neuberger Berman Management Inc.

<PAGE>

TABLE OF CONTENTS

Page

INVESTMENT INFORMATION.......................................................1
Investment Policies and Limitations....................................1
Temporary Defensive Position...........................................5
Neuberger Berman CENTURY Portfolio...............................6
Neuberger Berman MANHATTAN Portfolio.............................9
Neuberger Berman GENESIS Portfolio..............................10
Neuberger Berman FOCUS Portfolio................................12
Neuberger Berman GUARDIAN Portfolio.............................14
Neuberger Berman PARTNERS Portfolio.............................15
Neuberger Berman SOCIALLY RESPONSIVE Portfolio..................17
Neuberger Berman MILLENNIUM Portfolio...........................18
Neuberger Berman REGENCY Portfolio..............................20
Neuberger Berman INTERNATIONAL Portfolio........................21
Additional Investment Information.....................................25
Neuberger Berman FOCUS Portfolio - Description of Economic Sectors....46
Neuberger Berman SOCIALLY RESPONSIVE Portfolio - Description of
Social Policy...................................................49

PERFORMANCE INFORMATION.....................................................51
Total Return Computations.............................................51
Comparative Information...............................................52
Other Performance Information.........................................54

CERTAIN RISK CONSIDERATIONS.................................................54

TRUSTEES AND OFFICERS.......................................................55

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES...........................62
Investment Manager and Administrator..................................62
Management and Administration Fees....................................63
Sub-Adviser...........................................................66
Investment Companies Managed..........................................67
Codes of Ethics.......................................................70
Management and Control of NB Management and Neuberger Berman..........70

DISTRIBUTION ARRANGEMENTS...................................................71

ADDITIONAL PURCHASE INFORMATION.............................................71
Share Prices and Net Asset Value......................................71
Automatic Investing and Dollar Cost Averaging.........................72

ADDITIONAL EXCHANGE INFORMATION.............................................73

-i-
<PAGE>

ADDITIONAL REDEMPTION INFORMATION...........................................74
Suspension of Redemptions.............................................74
Redemptions in Kind...................................................74

DIVIDENDS AND OTHER DISTRIBUTIONS...........................................75

ADDITIONAL TAX INFORMATION..................................................76
Taxation of the Funds.................................................76
Taxation of the Portfolios............................................77
Taxation of the Funds' Shareholders...................................80

PORTFOLIO TRANSACTIONS......................................................80
Portfolio Turnover....................................................88

REPORTS TO SHAREHOLDERS.....................................................88

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS..............................88

CUSTODIAN AND TRANSFER AGENT................................................91

INDEPENDENT AUDITORS/ACCOUNTANTS............................................91

LEGAL COUNSEL...............................................................92

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.........................92

REGISTRATION STATEMENT......................................................94

FINANCIAL STATEMENTS........................................................94

Appendix A...................................................................1
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER........................1

<PAGE>

INVESTMENT INFORMATION

Each Fund is a separate operating series of Neuberger Berman Equity
Funds ("Trust"), a Delaware business trust that is registered with the
Securities and Exchange Commission ("SEC") as a diversified, open-end management
investment company. Each Fund seeks its investment objective by investing all of
its net investable assets in a Portfolio of Equity Managers Trust or, in the
case of Neuberger Berman INTERNATIONAL Fund, in a Portfolio of Global Managers
Trust that has an investment objective identical to, and a name similar to, that
of the Fund. Each Portfolio, in turn, invests in securities in accordance with
an investment objective, policies, and limitations identical to those of its
corresponding Fund. (Equity Managers Trust and Global Managers Trust ("Managers
Trusts") are open-end management investment companies managed by NB Management;
the Managers Trusts, together with the Trust, are referred to below as the
"Trusts.")

The following information supplements the discussion in the
Prospectus of the investment objective, policies, and limitations of each Fund
and Portfolio. The investment objective and, unless otherwise specified, the
investment policies and limitations of each Fund and Portfolio are not
fundamental. Any investment objective, policy or limitation that is not
fundamental may be changed by the trustees of the Trust ("Fund Trustees") or of
the corresponding Managers Trusts ("Portfolio Trustees") without shareholder
approval. The fundamental investment policies and limitations of a Fund or a
Portfolio may not be changed without the approval of the lesser of:

(1) 67% of the total units of beneficial interest ("shares") of the
Fund or Portfolio represented at a meeting at which more than 50% of the
outstanding Fund or Portfolio shares are represented, or

(2) a majority of the outstanding shares of the Fund or Portfolio.

These percentages are required by the Investment Company Act of 1940
("1940 Act") and are referred to in this SAI as a "1940 Act majority vote."
Whenever a Fund is called upon to vote on a change in a fundamental investment
policy or limitation of its corresponding Portfolio, the Fund casts its votes in
proportion to the votes of its shareholders at a meeting thereof called for that
purpose.

INVESTMENT POLICIES AND LIMITATIONS

Each Fund (except Neuberger Berman SOCIALLY RESPONSIVE, Neuberger
Berman MILLENNIUM, and Neuberger Berman INTERNATIONAL Funds) has the following
fundamental investment policy, to enable it to invest in its corresponding
Portfolio:

Notwithstanding any other investment policy of the Fund, the Fund may
invest all of its investable assets (cash, securities, and receivables
relating to securities) in an open-end management investment company
having substantially the same investment objective, policies, and
limitations as the Fund.

1
<PAGE>

Neuberger Berman SOCIALLY RESPONSIVE Fund and Neuberger Berman
MILLENNIUM Fund have the following fundamental investment policy, to enable each
to invest in its corresponding Portfolio:

Notwithstanding any other investment policy of the Fund, the Fund may
invest all of its net investable assets (cash, securities, and receivables
relating to securities) in an open-end management investment company
having substantially the same investment objective, policies, and
limitations as the Fund.

Neuberger Berman INTERNATIONAL Fund has the following fundamental
investment policy, to enable it to invest in its corresponding Portfolio:

Notwithstanding any other investment policy of the Fund, the Fund may
invest all of its net investable assets in an open-end management
investment company having substantially the same investment objective,
policies, and limitations as the Fund.

All other fundamental investment policies and limitations and the
non-fundamental investment policies and limitations of each Fund are identical
to those of its corresponding Portfolio. Therefore, although the following
discusses the investment policies and limitations of the Portfolios, it applies
equally to their corresponding Funds.

Except for the limitation on borrowing, any investment policy or
limitation that involves a maximum percentage of securities or assets will not
be considered to be violated unless the percentage limitation is exceeded
immediately after, and because of, a transaction by a Portfolio.

The following investment policies and limitations are fundamental
and apply to all Portfolios unless otherwise indicated:

1. BORROWING (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). No Portfolio may borrow money, except that a Portfolio may (i)
borrow money from banks for temporary or emergency purposes and not for
leveraging or investment and (ii) enter into reverse repurchase agreements for
any purpose; provided that (i) and (ii) in combination do not exceed 33-1/3% of
the value of its total assets (including the amount borrowed) less liabilities
(other than borrowings). If at any time borrowings exceed 33-1/3% of the value
of a Portfolio's total assets, that Portfolio will reduce its borrowings within
three days (excluding Sundays and holidays) to the extent necessary to comply
with the 33-1/3% limitation.

BORROWING (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). The Portfolio
may not borrow money, except that the Portfolio may (i) borrow money from banks
for temporary or emergency purposes and for leveraging or investment and (ii)
enter into reverse repurchase agreements for any purpose; provided that (i) and
(ii) in combination do not exceed 33-1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings). If at
any time borrowings exceed 33-1/3% of the value of the Portfolio's total assets,
the Portfolio will reduce its borrowings within three days (excluding Sundays
and holidays) to the extent necessary to comply with the 33-1/3% limitation.

2
<PAGE>

2. COMMODITIES (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). No Portfolio may purchase physical commodities or contracts thereon,
unless acquired as a result of the ownership of securities or instruments, but
this restriction shall not prohibit a Portfolio from purchasing futures
contracts or options (including options on futures contracts, but excluding
options or futures contracts on physical commodities) or from investing in
securities of any kind.

COMMODITIES (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). The
Portfolio may not purchase physical commodities or contracts thereon, unless
acquired as a result of the ownership of securities or instruments, but this
restriction shall not prohibit the Portfolio from purchasing futures contracts,
options (including options on futures contracts, but excluding options or
futures contracts on physical commodities), foreign currencies or forward
contracts, or from investing in securities of any kind.

3. DIVERSIFICATION. No Portfolio may, with respect to 75% of the
value of its total assets, purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, (i) more than 5% of the value of the
Portfolio's total assets would be invested in the securities of that issuer or
(ii) the Portfolio would hold more than 10% of the outstanding voting securities
of that issuer.

4. INDUSTRY CONCENTRATION. No Portfolio may purchase any security
if, as a result, 25% or more of its total assets (taken at current value) would
be invested in the securities of issuers having their principal business
activities in the same industry. This limitation does not apply to securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

5. LENDING. No Portfolio may lend any security or make any other
loan if, as a result, more than 33-1/3% of its total assets (taken at current
value) would be lent to other parties, except, in accordance with its investment
objective, policies, and limitations, (i) through the purchase of a portion of
an issue of debt securities or (ii) by engaging in repurchase agreements.

6. REAL ESTATE (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). No Portfolio may purchase real estate unless acquired as a result of
the ownership of securities or instruments, but this restriction shall not
prohibit a Portfolio from purchasing securities issued by entities or investment
vehicles that own or deal in real estate or interests therein or instruments
secured by real estate or interests therein.

REAL ESTATE (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). This
Portfolio may not invest any part of its total assets in real estate or
interests in real estate unless acquired as a result of the ownership of
securities or instruments, but this restriction shall not prohibit the Portfolio
from purchasing readily marketable securities issued by entities or investment
vehicles that own or deal in real estate or interests therein or instruments
secured by real estate or interests therein.

7. SENIOR SECURITIES. No Portfolio may issue senior securities,
except as permitted under the 1940 Act.

3
<PAGE>

8. UNDERWRITING. No Portfolio may underwrite securities of other
issuers, except to the extent that a Portfolio, in disposing of portfolio
securities, may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 ("1933 Act").

For purposes of the limitation on commodities, the Portfolios do not
consider foreign currencies or forward contracts to be physical commodities.

The following investment policies and limitations are
non-fundamental and apply to all Portfolios unless otherwise indicated:

1. BORROWING (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). None of these Portfolios may purchase securities if outstanding
borrowings, including any reverse repurchase agreements, exceed 5% of its total
assets.

2. LENDING. Except for the purchase of debt securities and engaging
in repurchase agreements, no Portfolio may make any loans other than securities
loans.

3. MARGIN TRANSACTIONS. No Portfolio may purchase securities on
margin from brokers or other lenders, except that a Portfolio may obtain such
short-term credits as are necessary for the clearance of securities
transactions. Margin payments in connection with transactions in futures
contracts and options on futures contracts shall not constitute the purchase of
securities on margin and shall not be deemed to violate the foregoing
limitation.

4. FOREIGN SECURITIES (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN
INTERNATIONAL, NEUBERGER BERMAN CENTURY AND NEUBERGER BERMAN MILLENNIUM
PORTFOLIOS). None of these Portfolios may invest more than 10% of the value of
its total assets in securities of foreign issuers, provided that this limitation
shall not apply to foreign securities denominated in U.S. dollars, including
American Depositary Receipts ("ADRs").

FOREIGN SECURITIES (NEUBERGER BERMAN MILLENNIUM AND NEUBERGER
BERMAN CENTURY PORTFOLIOS). Neither Portfolio may invest more than 20% of the
value of its total assets in securities of foreign issuers, provided that this
limitation shall not apply to foreign securities denominated in U.S. dollars,
including American Depositary Receipts ("ADRs").

5. ILLIQUID SECURITIES. No Portfolio may purchase any security if,
as a result, more than 15% of its net assets would be invested in illiquid
securities. Illiquid securities include securities that cannot be sold within
seven days in the ordinary course of business for approximately the amount at
which the Portfolio has valued the securities, such as repurchase agreements
maturing in more than seven days.

6. PLEDGING (NEUBERGER BERMAN GENESIS AND NEUBERGER BERMAN GUARDIAN
PORTFOLIOS). Neither of these Portfolios may pledge or hypothecate any of its
assets, except that (i) Neuberger Berman GENESIS Portfolio may pledge or
hypothecate up to 15% of its total assets to collateralize a borrowing permitted
under fundamental policy 1 above or a letter of credit issued for a purpose set
forth in that policy and (ii) each Portfolio may pledge or hypothecate up to 5%
of its total assets in connection with its entry into any agreement or
arrangement pursuant to which a bank furnishes a letter of credit to
collateralize a capital commitment made by the Portfolio to a mutual insurance

4
<PAGE>

company of which the Portfolio is a member. The other Portfolios are not subject
to any restrictions on their ability to pledge or hypothecate assets and may do
so in connection with permitted borrowings.

7. SECTOR CONCENTRATION (NEUBERGER BERMAN FOCUS PORTFOLIO). This
Portfolio may not invest more than 50% of its total assets in any one economic
sector.

8. INVESTMENTS IN ANY ONE ISSUER (NEUBERGER BERMAN INTERNATIONAL
Portfolio). At the close of each quarter of this Portfolio's taxable year, (i)
no more than 25% of its total assets may be invested in the securities of a
single issuer and (ii) with regard to 50% of its total assets, no more than 5%
of its total assets may be invested in the securities of a single issuer. These
limitations do not apply to U.S. Government securities, as defined for tax
purposes, or securities of another regulated investment company ("RIC").

9. SOCIAL POLICY (NEUBERGER BERMAN SOCIALLY RESPONSIVE PORTFOLIO).
The portfolio may not purchase securities of issuers who derive more than 5% of
their total revenue from alcohol, tobacco, gambling or weapons, or that are
involved in nuclear power.

Although the Portfolios do not have policies limiting their
investment in warrants, no Portfolio currently intends to invest in warrants
unless acquired in units or attached to securities.

TEMPORARY DEFENSIVE POSITION. For temporary defensive purposes, each
Portfolio (except Neuberger Berman SOCIALLY RESPONSIVE Portfolio and Neuberger
Berman INTERNATIONAL Portfolio) may invest up to 100% of its total assets in
cash and cash equivalents, U.S. Government and Agency Securities, commercial
paper and certain other money market instruments, as well as repurchase
agreements collateralized by the foregoing.

Any part of Neuberger Berman SOCIALLY RESPONSIVE Portfolio's assets
may be retained temporarily in investment grade fixed income securities of
non-governmental issuers, U.S. Government and Agency Securities, repurchase
agreements, money market instruments, commercial paper, and cash and cash
equivalents when NB Management believes that significant adverse market,
economic political, or other circumstances require prompt action to avoid
losses. In addition, the feeder funds that invest in Neuberger Berman SOCIALLY
RESPONSIVE Portfolio deal with large institutional investors, and the Portfolio
may hold such instruments pending investment or payout when the Portfolio has
received a large influx of cash due to sales of Neuberger Berman SOCIALLY
RESPONSIVE Fund shares, or shares of another fund which invests in the
Portfolio, or when it anticipates a substantial redemption. Generally, the
foregoing temporary investments for Neuberger Berman SOCIALLY RESPONSIVE
Portfolio are selected with a concern for the social impact of each investment.

For temporary defensive purposes, Neuberger Berman INTERNATIONAL
Portfolio may invest up to 100% of its total assets in short-term foreign and
U.S. investments, such as cash or cash equivalents, commercial paper, short-term
bank obligations, government and agency securities, and repurchase agreements.

5
<PAGE>

Neuberger Berman INTERNATIONAL Portfolio may also invest in such instruments to
increase liquidity or to provide collateral to be held in segregated accounts.

INVESTMENT INSIGHT

Neuberger Berman's commitment to its asset management approach is
reflected in the more than $125 million the organization's employees and their
families have invested in the Neuberger Berman mutual funds.

In advertisements, each Fund's allocation to a particular market sector(s)
may be discussed as a way to demonstrate how the portfolio managers uncover
stocks that they perceive to fit the Fund's investment parameters. These
discussions may include references to current or former holdings of a Fund.

NEUBERGER BERMAN CENTURY PORTFOLIO

Remember when big corporations were slow and stodgy? Those days are gone.
Today's companies are redefining the concept of big business.

Call them giants for the new century. Call them anything but slow. The
stock of large companies, many of which are in the Standard & Poor's 500 Index,
have chalked up impressive performance in recent years. Of course, past
performance is no guarantee of future results.

We believe the new giants still have room to grow. Their strengths may
include:

o Durable brand names
o Growing markets
o Global reach
o Diverse revenue flows
o Pricing power with customers
o Influence over suppliers' costs

Neuberger Berman CENTURY Portfolio will invest in many of the names you
already know as the world's largest companies. But it will also seek out
companies the portfolio manager believes are poised to become the giants of
tomorrow. Using this strategy, the portfolio manager intends to invest in stocks
that may comprise part of the Russell 1000 Growth Index1, as well as stocks from
the Standard & Poor's 500 Index. The fund's median market capitalization will be
greater than $10 billion.

- ----------------------
1 The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000(R) Index (which measures the performance of the
3,000 largest U.S. companies based on total market capitalization). The Russell
1000 Index represents approximately 92% of the total market capitalization of
the Russell 3000 Index. The Russell 1000(R) Growth Index measures the
performance of the Russell 1000 companies with higher price-to-book ratios and
higher forecasted growth values.

6
<PAGE>

Brooke Cobb is the portfolio manager for the fund. Describing his
investment strategy for Neuberger Berman CENTURY Portfolio, he says, "We look
for the leaders of today and tomorrow. Many fast-growing companies join the
large-capitalization sector with years of growth still ahead. Our goal is to
identify them early, to investment in the companies that are going to be the
growth leaders of the new century."

WHY LARGE-CAP GROWTH?

DIVERSIFICATION

The key to a well-balanced portfolio is asset allocation. We believe that
diversifying your investments across different asset classes can increase the
changes you will participate when one group outperforms another.

In the long-term, small-cap stocks have tended to outperform large-caps.2
But in recent years, large-cap stocks have turned the tables, and have
outperformed small-caps. Growth stock investments have outperformed value-style
investments in recent years too.3

While an expert investor might be able to time the market perfectly to
take advantage of each cycle, market timing is notoriously difficult, even for
professionals. For most of us, diversification is key to stronger performance
over time.

PERFORMANCE

Although past performance does not guarantee future results, performance
of large-cap stocks has been impressive. Many of the best performers have been
in fast-growing areas like technology, pharmaceuticals and the Internet, with
global markets for their products.

Recent economic conditions have also favored the new breed of growth
leaders. In general, a low-inflation environment can help large companies
because of their greater ability than smaller companies to negotiate suppliers'
costs: When low inflation prevents companies from raising prices, the ability to
control costs becomes more important.

STABILITY

For investors who favor a moderate risk profile, large-cap stocks may
provide a greater degree of comfort than smaller stocks. The price fluctuations
of large-cap stocks have historically been less volatile than small-cap stocks.
Although there are no guarantees, size can make a difference should economic
conditions turn downward. Large companies, with their hefty capital bases,
diversified revenue streams and strong brand names may be able to offer relative
stability in an uncertain world.

- ---------------
2 Source: Ibbotson Associates.

3 Source: Callan Associates. From January 1, 1999 through September 30, 1999,
the S&P BARRA Growth annualized return outperformed the S&P BARRA Value by
7.62%.

7
<PAGE>

OPPORTUNITIES

When a large company's earnings have consistently grown, the company may
have a competitive advantage. Perhaps it has a dominant market share. Or it may
have expanded on the strength of innovative products, or astute marketing, or
superior management.

Continued earnings growth is never guaranteed, but a track record of
strong earnings growth invites further investigation.

OUR INVESTMENT PROCESS [VISUAL]

1. Initial Focus Screens:
Market Cap
Earnings Growth

2. Proprietary Ranking System:
Positive Earnings Surprises/Revisions
Low Price/Earnings to Growth Rates

3. Top Quintile of Remaining Companies

4. Fundamental Research:
Input from Growth Group/NY Research Analysts
Consider Wall Street Research
Meet with Company Management

5. Portfolio of 65-85 Stocks*
Median Market Cap >$10 billion*

*Number of holdings based on portfolio assets of $25 - $50 million.

WHY NEUBERGER BERMAN?

Neuberger Berman offers a full spectrum of investment styles in its mutual
funds. Although many clients know us as a "value" investment house of long
standing, we also have a dedicated growth stock research and management group
based in Boston.

The Boston-based growth group, headed by Jennifer Silver, an investment
manager with close to 20 years of experience, includes eight professionals, who
work closely with Neuberger Berman's research department of 23 investment
analysts.

Brooke Cobb, who has close to 30 years of experience managing both mid-cap
and large-cap growth portfolios, manages the CENTURY Portfolio. He notes that
the CENTURY Portfolio neatly complements the existing Neuberger Berman growth
funds.

Experience teaches. And in today's volatile markets, the wisdom that comes
from experience matters more than ever. That's why clients come to Neuberger
Berman. For more than 60 years, we have helped institutions and individuals
build wealth, earn income, and preserve capital. Today our clients entrust more

8
<PAGE>

than $51 billion to our management, $18 billion of that in our family of mutual
funds.4

In an industry where investment fads sweep through with predictable
regularity, Neuberger Berman has build a family of funds that relies on
disciplined, fundamental research. Neuberger Berman is committed to the belief
that investors' interests come first. Our long-standing and, in many cases,
multigenerational relationships underscore the success of this approach. We
welcome the opportunity to put your money to work.

NEUBERGER BERMAN MANHATTAN PORTFOLIO

INVESTMENT PROGRAM

Invests in common stocks of mid-capitalization companies that are in new
or rapidly evolving industries. Seeks growth of capital by investing in
companies with financial strength, above-average growth of earnings, earnings
that have exceeded analysts' expectations, a strong position relative to
competitors and a stock price that is reasonable in light of its growth rate.

MID-CAP GROWTH STOCK INVESTMENTS

The portfolio co-managers consider themselves growth stock investors in
the purest sense of the term. By that, they mean they want to own the stocks of
companies that are growing earnings faster than the average American business
and, ideally, faster than the competitors in their respective industries. Their
exhaustive research efforts are focused on the mid-cap universe and,
specifically, stocks that are in new or rapidly evolving industries. The kind of
fast-growth companies the portfolio co-managers favor generally do not trade at
below market average price-to-earnings ratios. However, they do look for
companies trading at reasonable levels compared to their growth rates. They
believe that attractive valuations in the mid-cap range have been created as a
result of the large-cap area performing well for several years, relative to
other capitalization ranges.

AN INTENSIVE RESEARCH EFFORT

The portfolio co-managers love stocks with positive earnings surprises.
Their extensive research has revealed that the stocks of companies that have
consistently beaten Wall Street earnings estimates have also tended to offer
greater potential for long-term capital appreciation. To find these companies
they scour the mid-cap growth stock universe to isolate stocks whose most recent
earnings have beaten consensus expectations. Then, the real work begins, where
through diligent fundamental research they strive to identify those companies
most likely to record a string of positive earnings surprises. Their ultimate
goal is to invest today in the fast growing mid-sized companies that they
believe are poised to become tomorrow's Fortune 500.

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4 As of September 30, 1999.

9
<PAGE>

A DISCIPLINED SELL PROCESS

"We are dispassionate sellers," says one portfolio co-manager. "If a stock
does not live up to our earnings expectations or if we believe its valuation has
become excessive, we will sell and direct the assets to another opportunity we
find more attractive." A stock will also be sold when it reaches its target
price. They prefer to broadly diversify the portfolio's assets among many
different companies and industries rather than heavily concentrating its
holdings in just a few of the fastest growing industry sectors. Broad
diversification helps to manage the overall risk inherent in a portfolio of
equity securities. Nevertheless, the managers acknowledge that currently there
are positive growth opportunities in the technology sector, particularly
biotechnology and Internet-related companies. One portfolio co-manager adds, "We
believe that we are on the verge of a technology-induced industrial revolution,
and there may be an opportunity for investors to build capital by focusing in
this area."

INVESTMENT PROCESS

ACTIVE RISK MANAGEMENT

BETTER MID-CAP GROWTH STOCKS
o Fundamental Verification

MID-CAP GROWTH UNIVERSE
o Proprietary Quantitative Evaluation

STOCK UNIVERSE
o Focus Screens

MANHATTAN INVESTORS CAN EXPECT:

o Mid-cap growth stock investments
o An intensive research effort
o A disciplined sell process

NEUBERGER BERMAN GENESIS PORTFOLIO

INVESTMENT PROGRAM

Invests mainly in common stocks of small-capitalization companies. Seeks
undervalued companies whose current product lines and balance sheets are strong.
The Portfolio regards companies with market capitalizations of up to $1.5
billion at the time of investment as small-cap companies.

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<PAGE>

A SMALL-CAP VALUE BIAS

The portfolio co-managers employ a value bias in their stock selection
process. They comb the universe of small-cap stocks specifically looking for
those they consider cheap compared to the market as a whole. Depending on
current market conditions, they sometimes find stocks that are cheap on an
absolute basis as well. They primarily choose from a universe of small-cap
companies whose total market valuation is less than $1.5 billion at the time of
initial investment. The characteristics they look for may include above average
returns, established market niches, high barriers to entry, strong capital
bases, and sound future business prospects.

A PHILOSOPHY THAT CONTRADICTS POPULAR INVESTMENT TRENDS

The portfolio co-managers focus on strong companies in industry niches
that are often overlooked by investors because they lack an exciting new product
or innovation. They aren't interested in buying experimental or cutting-edge
technology names that often trade on high future expectations but have no
established record of earnings. The rationale behind their approach is that
companies in what may be considered "unexciting" industries to some, such as
utilities and oil services, are a safer point of entry into the small-cap
universe because, as they put it, "if there's not a lot of expectation built
into a company, then it tends not to disappoint."

SMALL COMPANIES, POTENTIALLY BIG OPPORTUNITIES

The portfolio co-managers favor the small-cap arena because they think it
abounds with opportunities for the long-term investor, specifically small-caps'
potential ability to grow earnings dramatically over time. According to one
portfolio co-manager, "Unlike large-cap stocks, small-cap companies are starting
from a very low base and therefore may have the ability to grow dramatically."

INVESTMENT PROCESS

(Qualitative Analysis

(Meetings with Company Executives One-on-One

o 300 Face-to-Face Meetings per Year

o Heavy Phone Contact

(Quantitative Characteristics

o Low Price-to-Earnings Ratio

o Low Price-to-Cash Flow Ratio

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<PAGE>

GENESIS INVESTORS CAN EXPECT:

o A small-cap value bias
o A philosophy that contradicts popular investment trends
o Small companies, potentially big opportunities

INVESTMENT INSIGHT

The portfolio co-managers seek out small companies that are not well known
and often found in unglamorous industries. Future growth is one area they focus
on, but equally important to them is evidence of solid performance and a proven
management team. As value investors, they look for stocks that are selling at
attractive prices.

THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS
PRIMARILY IN COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE
PROSPECTUS.

NEUBERGER BERMAN FOCUS PORTFOLIO

INVESTMENT PROGRAM

Seeks long-term growth of capital. Invests principally in common stocks
selected from 13 multi-industry sectors of the economy. To maximize potential
return, the Portfolio normally makes at least 90% or more of its investments in
not more than six sectors it identifies as undervalued.

EMPHASIS ON QUALITY, UNDERVALUED COMPANIES OF ALL MARKET CAPITALIZATIONS

The portfolio manager selects companies with solid fundamentals that he
considers undervalued by the marketplace. Specifically, he looks for industry
leaders with above-average earnings, established market niches, and sound future
business prospects. He believes these types of organizations come in all sizes,
therefore he does not limit his selections to any particular capitalization
range.

A CONCENTRATED PORTFOLIO

In addition to his value bias, the portfolio manager concentrates his
efforts on six out of 13 possible economic sectors. Although the portfolio is
built one stock at a time, he has found that the conditions leading to an
individual stock being undervalued similarly affect other companies in the same
industries or sectors. Thus, an emphasis on relatively few sectors is a natural
outgrowth of the fund's stock selection process. The portfolio manager won't
dedicate more than 50% of assets to any one sector and no more than 25% of
assets to any one industry.

BOTTOM-UP, VALUE-ORIENTED STOCK SELECTION PROCESS

The portfolio manager's bottom-up approach focuses on stocks that are
currently out of favor, due to temporary setbacks. He also likes stocks that
have been largely ignored by Wall Street, but that he believes still offer good
long-term growth potential. He prefers to buy companies that are industry

12
<PAGE>

leaders, not those that he believes are undervalued for good reasons such as
poor management or limited growth prospects. Ideal investment candidates are
financially sound companies that have little or no debt and exhibit high returns
on equity.

THOROUGH RESEARCH EFFORT

He believes it's the management teams that drive companies and how they
react to changes in their respective industries. As he explains, "The only way
to come to those conclusions is to meet with the people behind the stocks we
like." Furthermore, he does not rely on a company's initial merits after its
stock has been purchased. Instead, he prefers to revisit its fundamentals
regularly and then, as a reality check, look back at the company's performance
to see if it's consistently delivering.

INVESTMENT PROCESS

(Qualitative Analysis

o Meeting with Company Executives One-on-One

(Monitor Exposure to Economic Conditions

o Interest Rate Changes

(Sector Analysis

(Stock Universe

o Quantitative Analysis

FOCUS INVESTORS CAN EXPECT:

o Emphasis on quality, undervalued companies of all market
capitalizations
o A concentrated portfolio
o Bottom-up, value-oriented stock selection process
o Thorough research efforts

INVESTMENT INSIGHT

The investment approach for the FOCUS Fund involves looking for companies
that have low price-to-earnings ratios, solid balance sheets and strong
management. The portfolio manager often finds that these companies are
concentrated in certain sectors of the economy, which prompts him to look
further within these sectors for other companies that meet his criteria.

13
<PAGE>

NEUBERGER BERMAN GUARDIAN PORTFOLIO
-----------------------------------

INVESTMENT PROGRAM
------------------

Seeks long term growth of capital and, secondarily, current income.
Invests primarily in stocks of long-established companies considered to be
undervalued in comparison to stocks of similar companies. Using a value-oriented
investment approach in selecting securities, the Portfolio looks for such
factors as low price-to-earnings ratios, strong balance sheets, solid
management, and consistent earnings.

DISCIPLINED, LARGE-CAP VALUE ORIENTATION

As part of its stock selection process, the portfolio pursues a
disciplined, value-driven investment style, which is Neuberger Berman's historic
strength. Specifically, the portfolio co-managers seek large-capitalization
companies whose stock prices are substantially undervalued. Characteristics of
these firms may include: solid balance sheets, above-average returns, low
valuations, and consistent earnings.

BOTTOM-UP APPROACH TO STOCK SELECTION

According to one of the portfolio co-managers, "Cheap stocks are
plentiful, but true investment bargains are a rare find." To uncover them, the
portfolio co-managers scour a universe of stocks consisting of the bottom 20% of
the market in terms of valuation. Those deemed by the managers as inexpensive
and poised for a turnaround are placed under consideration. They look for
financially sound, well-managed companies that are undervalued relative to their
earnings potential and the market as a whole.

A BROAD VIEW OF RISK MANAGEMENT

Managing risk involves carefully monitoring the way the stocks in the
portfolio react to one another as well as to outside factors. Companies that are
in completely different sectors may in fact react similarly to certain economic,
market or international events. In their efforts to consider these
relationships, the portfolio co-managers use quantitative analysis to evaluate
these factors and their impact on the overall portfolio. It is a process they
believe is a crucial component in controlling risk and one that evolves over
time as new holdings are introduced to the portfolio.

A STRONG SELL DISCIPLINE

The portfolio co-managers will generally make an initial investment in a
stock of between 1-4% of total net assets. A higher weighting indicates that
they believe their research gives them an "edge" over Wall Street analysts, or
they believe the stock has an uncovered value that others may have overlooked.
Once a stock grows beyond the high side of that range, gains are harvested and
the holding is reduced to about 3% of total net assets.

14
<PAGE>

INVESTMENT PROCESS

(Portfolio Risk Management

o Monitor Portfolio's Exposure

(Selection Criteria

o Improving Financials

o Superior Management

o Discount Valuations to the Market

(Stock Universe

o Large-Cap Value

GUARDIAN INVESTORS CAN EXPECT:

o Disciplined, large-cap value orientation
o Bottom-up approach to stock selection
o Broad view of risk management
o Strong sell discipline

INVESTMENT INSIGHT

The portfolio co-managers look for established companies whose intrinsic
value, by their measure, is undiscovered among the majority of investors. In
managing overall risk, a conscious effort is made to determine the risk/reward
scenario of each individual holding as well as its impact at the portfolio
level.

NEUBERGER BERMAN PARTNERS PORTFOLIO
-----------------------------------

INVESTMENT PROGRAM
------------------

Invests principally in common stocks of established companies, using the
value-oriented investment approach. Seeks growth of capital through an
investment approach that is designed to increase capital with reasonable risk.
Seeks securities believed to be undervalued based on strong fundamentals such as
a low price-to-earnings ratio, consistent cash flow, and a company's sound track
record through all phases of the market cycle.

UNDISCOVERED VALUES IN THE MID- TO LARGE-CAP ARENA

The Partners' portfolio co-managers comb the universe of mid- and
large-cap stocks in search of those that have yet to be "discovered" by the
majority of investors. They generally shy away from big, well-known companies

15
<PAGE>

because they believe it is harder to gain a competitive edge in a stock that is
covered by many analysts. The managers prefer to focus their efforts outside of
the Fortune 100, where they think many investment bargains abound.

STRONG COMPANIES AT REASONABLE PRICES

Like many of their value-oriented peers, the co-managers try to buy
quality stocks for substantially less than their estimated market values.
However, they differ in their approach by applying another layer of analysis to
their value strategy. For example, in addition to searching for stocks trading
at below market price-to-earnings ratios, they also focus on companies with
strong fundamentals, consistent cash flows, sound track records through all
phases of the market cycle and those selling at the low end of their trading
ranges. They are not interested in buying cheap stocks if they don't meet these
other measures of value as well.

SOLID RESEARCH

The portfolio co-managers believe that through "exhaustive research
efforts, good companies selling for less than their true worth can be
identified." To do this the portfolio co-managers spend a lot of time
interviewing senior company managers. Their philosophy is that when they sit
across the table from a CEO or CFO and question him or her about the company,
they get to know it quite well. They find that there's simply no substitute for
that kind of firsthand knowledge. In addition, the portfolio co-managers
carefully examine a company's financial statements and contact its suppliers and
competitors. While this type of analysis requires a lot of extra legwork, they
believe it's worth the effort.

INVESTMENT PROCESS

(Executive Management Team Evaluation

o Proven Track Record

o Strategic Plan

o Inside Ownership

(Value Stock Universe

o Qualitative Evaluation: Catalyst for Change

(Stock Universe

o Quantitative Analysis

PARTNERS INVESTORS CAN EXPECT:

o Undiscovered values in the mid- to large-cap arena
o Strong companies at reasonable prices
o Solid research

16
<PAGE>

INVESTMENT INSIGHT

The portfolio co-managers seek companies they believe are undervalued
relative to their earnings potential--where there is a gap between the actual
price of a stock and its intrinsic value in the marketplace. When a company
grows in value or the valuation gap closes, the success of their strategy is
realized.

NEUBERGER BERMAN SOCIALLY RESPONSIVE PORTFOLIO
----------------------------------------------

INVESTMENT PROGRAM
------------------

Seeks long-term capital appreciation through investments primarily in
securities of companies that meet both financial criteria and social policy. The
portfolio co-managers initially screen companies using a value investing
criteria, then look for companies that show leadership in major areas of social
impact such as the environment, workplace diversity and employment.

FINANCIALLY SOUND COMPANIES WITH A SOCIAL CONSCIENCE

The portfolio co-managers look for the stocks of mid- to large-cap
companies that first meet their stringent financial criteria. Their social
screens are then applied to these stocks. The ones considered worthy from a
financial standpoint are then evaluated using a proprietary database that
develops and monitors information on companies in various categories of social
criteria. Ideal investment candidates are companies that show leadership in the
areas of the environment, workplace diversity and employment. Other
considerations are based on companies' records in other areas of concern,
including public health, type of products, and corporate citizenship.

A TRADITIONAL VALUE APPROACH

The portfolio co-managers' initial financial screens select companies
using a traditional value approach. They look for undervalued companies with
solid balance sheets, strong management, consistent cash flows, and other
value-related factors, such as low price-to-earnings and low price-to-book
ratios. Their value approach examines these companies, searching for those that
may rise in price before other investors realize their worth. They strongly
believe in helping investors put their money to work, while supporting companies
that follow principles of good corporate citizenship.

AN EVER-EVOLVING JOURNEY ON THE PATH TO GOOD CORPORATE CITIZENSHIP

The portfolio co-managers believe that most socially responsive investors
are not utopians. They do not expect instant perfection, but rather look for
signs that a company is evolving and moving toward a corporate commitment to
excellence. As they put it, "Good corporate citizenship is one of those things
that is a journey, not a destination. We've been working in this field for some
time, and know that the social records of most companies are written in shades
of gray. We are pleased to see that more and more companies are coming to
realize that change is a positive force for them."

17
<PAGE>

INVESTMENT PROCESS

(Social Policy

(Quantitative Financial Criteria

o Low Price-to-Earnings Ratio (relative & absolute)

o Strong Balance Sheet

o Free Cash Flow

o Risk Management

(Stock Universe

o Focus Screens

SOCIALLY RESPONSIVE INVESTORS CAN EXPECT:

o Financially sound companies with a social conscience
o A traditional value approach
o An ever-evolving journey on the path to good corporate
citizenship

INVESTMENT INSIGHT

The portfolio co-managers believe that sound practices in areas like
employment and the environment can have a positive impact on a company's bottom
line. They look for companies that meet value-investing criteria and also show a
commitment to uphold or improve their standards of corporate citizenship.

NEUBERGER BERMAN MILLENNIUM PORTFOLIO
-------------------------------------

INVESTMENT PROGRAM
------------------

Invests primarily in equity securities of small-sized domestic companies
(up to $1.5 billion in market capitalization at time of investment). Seeks
growth of capital and looks for new companies that are in the developmental
stage as well as older companies that appear poised to grow because of new
products, markets or management.

DISCIPLINED STOCK SELECTION PROCESS

The portfolio co-managers employ a three-tiered disciplined investment
process. It begins with a search for fast growing, small companies that exhibit

18
<PAGE>

sustainable earnings growth of at least 15%. Next, they assess a company's
financial and managerial wherewithal to capitalize on opportunities and grow its
business, despite occasional setbacks. Finally, the managers determine whether
or not a stock's price is reasonable. Their analysis attempts to avoid companies
considered overvalued relative to their earnings growth rate.

LONG-TERM GROWTH POTENTIAL OF SMALL-CAP STOCKS

Simply put, a small company might become a mid-sized one rapidly with the
launch of a single blockbuster product. And, since the potential growth of a
small company is often uninhibited by several layers of management, it might be
able to bring new products or services to the market quickly. What adds to the
attractiveness of small-cap stocks is the fact that they're generally less
researched than large-caps, which presents the managers with more opportunities
to find good companies that are not yet recognized by many investors.
Small-caps, however, are more risky than other securities due to their
volatility and greater sensitivity to market trends, company news and industry
developments.

RISK MANAGEMENT

"We abide by three rules for managing risk: pay only reasonable prices,
remain emotionally detached, and stay diversified", says one of the portfolio
co-managers about their risk-management strategy. First, the Fund focuses on
rapidly growing companies that are selling at reasonable prices relative to
their growth prospects. This is done in an effort to avoid those stocks whose
valuations are out of line with their growth rates because we believe they are
often the most susceptible to steep declines caused by fundamental
disappointments or during a market downturn. Second, our portfolio co-managers
remain emotionally detached from their stock picks. When deteriorating
fundamentals are discovered in a company, the portfolio co-managers take quick
and decisive action to eliminate it from the portfolio. And third, to limit
downside risk, the portfolio co-managers expect to invest in a diversified
portfolio across an array of sectors and industries. Nevertheless, the managers
acknowledge that currently there are positive growth opportunities in the
technology sector, particularly biotechnology and Internet-related companies. No
single stock represents more than 5% of total assets, measured at the time of
investment.

INVESTMENT PROCESS

SCREENS

(3 Price Is this stock price reasonable?

(2 Utility Can the company go the distance?

Financial Strength

Management Depth and Talent

(1 Growth Are earnings growing rapidly?

19
<PAGE>

15%+ Annual Growth Rates

Positive Earnings Surprises

MILLENNIUM INVESTORS CAN EXPECT:

o Disciplined stock selection process
o Long-term growth potential of small-cap stocks
o Risk management

INVESTMENT INSIGHT

The portfolio co-managers of the Millennium Fund make it their business to
track down promising small-cap companies wherever they may exist. As a result,
this fund enables investors who can accept the risks of small-cap stocks to
pursue the potential for long-term growth that small-caps may provide.

NEUBERGER BERMAN REGENCY PORTFOLIO
----------------------------------

INVESTMENT PROGRAM
------------------

Seeks growth of capital by investing mainly in common stocks of
mid-capitalization companies. The Portfolio seeks to reduce risk by diversifying
among different companies and industries.

MID-CAP COMPANIES WITH MARKET LEADERSHIP

Regency's portfolio co-managers search the mid-cap stock universe for
companies with a dominant market share in their industry. Historically,
businesses with market leadership have delivered significant returns for
shareholders over the long term. While this may not always be the case,
discovering such middle-weight champions before the rest of Wall Street does can
yield substantial payoffs for investors. Of course, there can be no assurance
that the managers will select the right stocks every time. Remember that the
stocks of mid-cap companies may be more volatile, and entail more risk, than the
stocks of larger companies.

BOTTOM-UP APPROACH TO STOCK SELECTION

The portfolio co-managers' extensive bottom-up approach begins with
financial screens that are used to search for undervalued securities with
compelling fundamentals. Then, in-depth company and industry analyses are
conducted, followed by interviews with company managements and their
competitors, customers, and suppliers. In this stage, reviewing strategic plans
and evaluating management are critical steps. After applying these financial and
qualitative screens the portfolio co-managers then seek to identify a catalyst
for change that could improve a stock's valuation. These catalysts are generally
managerial, operational, structural or financial in nature and include changes
in company management, new corporate strategies, changes in the business mix,
and improving financials, among others. The remaining candidates are then ranked

20
<PAGE>

on a risk/reward basis. Stocks with the most compelling risk/reward ratios are
placed in the portfolio, while stocks that are currently not a good portfolio
fit, are placed on a monitor list for further evaluation.

BROAD VIEW OF RISK MANAGEMENT

In order to reduce risk on the buy side, the managers look for reasonably
priced stocks, diversify investments across an array of industries, and avoid
making large sector bets. On the sell side, stocks are sold when they reach
their price target, do not perform as expected, or are considered less
attractive than other opportunities.

INVESTMENT PROCESS

STOCK UNIVERSE

o Financial Analysis

VALUE STOCK UNIVERSE

o Qualitative Evaluation
o Catalyst for change

EXECUTIVE MANAGEMENT TEAM EVALUATION

o Proven Track Record
o Strategic Plan
o Inside Ownership

REGENCY INVESTORS CAN EXPECT:
o Mid-cap companies with market leadership
o Bottom-up approach to stock selection
o Broad view of risk management

INVESTMENT INSIGHT

The portfolio co-managers' ultimate goal is to find undervalued companies
that have not yet been discovered by the majority of investors, or better yet,
to buy "great companies at a great price." They attempt to do this by focusing
on the mid-cap segment of the market because it tends to be less followed than
the large-cap segment by Wall Street analysts.

NEUBERGER BERMAN INTERNATIONAL PORTFOLIO
----------------------------------------

Equity portfolios consisting solely of domestic investments generally have
not enjoyed the higher returns foreign opportunities can offer. Over the past
thirty years, for example, the average growth rates of many foreign economies
have outpaced that of the United States. While the United States accounted for
almost 66% of the world's total securities market capitalization in 1970, it

21
<PAGE>

accounted for less than 51% of that total at the end of 1998 -- or less than a
third of the dollar value of the world's available stocks and bonds.5/

Over time, a number of international equity markets have outperformed
their U.S. counterpart. Although there are no guarantees, foreign markets could
continue to provide attractive investment opportunities.

In addition, according to Morgan Stanley Capital International, the
leading companies in any given sector are not always U.S.-based. For example,
nine of the ten largest steel companies, eight of the ten largest electronic
companies and eight of the ten largest automobile companies are based outside
the United States.

A principal advantage of investing overseas is diversification. A
diversified portfolio gives investors the opportunity to pursue increased
overall return while reducing risk. It is prudent to diversify by taking
advantage of investment opportunities in more than one country's stock or bond
market. By investing in several countries through a worldwide portfolio,
investors can lower their exposure and vulnerability to weakness in any one
market. Investors should be aware, however, that international investing is not
a guarantee against market risk and may be affected by the economic and other
factors described in the Prospectus. These include the prospects of individual
companies and other risks such as currency fluctuations or controls,
expropriation, nationalization and confiscatory taxation.

Furthermore, buying foreign stocks and bonds can be difficult for the
individual investor and involves many decisions. Accessing international markets
is complicated; few individuals have the time or resources to evaluate
thoroughly foreign companies and markets or the ability to incur the high
transaction costs of direct investment in such markets. A mutual fund investing
in foreign securities offers an investor broad diversification at a relatively
low cost.

At least 65% of the Portfolio's total assets normally are invested in
equity securities of foreign issuers. The Portfolio invests primarily in equity
securities of companies located in developed foreign economies, as well as in
"emerging markets." NB Management's investment process includes a combination of
a top-down or macro-economic analysis and a bottom-up, micro-economic approach,
as well as a blend of growth and value investment styles. The Portfolio may use
leverage to facilitate transactions it enters into for hedging purposes.

INVESTMENT PROGRAM
------------------

Seeks long-term growth of capital by investing primarily in common stocks
of foreign companies of any capitalization, including companies in developed and
emerging industrialized markets. Invests in well-managed companies that show
potential for above-average growth or whose stock price is undervalued.

A COMBINATION OF TOP-DOWN AND BOTTOM-UP APPROACHES TO INVESTING

- -----------------------
5/ Source: Morgan Stanley Capital International.

22
<PAGE>

The portfolio manager's top-down view of various regions and countries
helps her choose the areas that offer the best relative value. As she explains,
"We are value-added investors, not "closet" indexers. We will overweight the
portfolio with securities from countries we believe have the best investment
potential and underweight those we think have limited prospects." Her bottom-up
perspective seeks well-managed companies with strong fundamentals, such as
attractive cash flows, strong balance sheets, and solid earnings growth. The
Fund has no capitalization constraints and thus can invest in companies of all
sizes.

A BLEND OF GROWTH AND VALUE INVESTMENT STYLES

The portfolio manager uses a blend of styles to reduce the risk of
significant losses when a particular style falls out of favor with investors.
The growth component highlights rapidly growing companies in niche industries
with unique products or services, while the value component focuses on
undervalued, out-of-favor companies that she believes are poised for a
turnaround.

HIGH POTENTIAL REWARDS WITH COMMENSURATE RISKS

The portfolio invests in equity securities of both developed and emerging
markets. While the potential rewards are high, so are the associated risks.
Foreign markets are often less developed and foreign governments and economic
infrastructures may not be as stable compared to the U.S. Other international
risks, such as currency exchange rate and interest rate fluctuations, could
result in greater volatility than domestic funds.

AN ADDED LEVEL OF DIVERSIFICATION

Domestic and foreign markets generally do not all move in the same
direction at the same time and are subject to different sets of risk factors.
Investors with exposure to more than a single market can potentially offset
losses in one market with gains in another. While foreign markets can be
inherently risky, investors who include international securities in their
portfolios can benefit from an additional layer of diversification along with
the potential for long-term growth.

INVESTMENT PROCESS

1. Screen International Universe

2. Quantitative and Qualitative Evaluation

3. Review Prime Buy Ideas

4. Portfolio Construction

INTERNATIONAL INVESTORS CAN EXPECT:

o A combination of top-down and bottom-up approaches to investing
o A blend of growth and value investment styles
o High potential rewards with commensurate risks

23
<PAGE>

o An added level of portfolio diversification

INVESTMENT INSIGHT

In identifying attractive stocks from among the many thousands currently
available outside the U.S., it's important to have a clear strategy. The
International Portfolio uses a combination of growth and value criteria, while
also considering larger scale economic factors.

CURRENCY RISK MANAGEMENT

Exchange rate movements and volatility are important factors in
international investing. The portfolio manager believes in actively managing the
Portfolio's currency exposure, in an effort to capitalize on foreign currency
trends and to reduce overall portfolio volatility. Currency risk management is
performed separately from equity analysis. The portfolio manager uses a
combination of economic analysis to guide the Portfolio's longer-term posture
and quantitative trend analysis to assist in timing decisions with respect to
whether (or when) to invest in instruments denominated in a particular foreign
currency, or whether (or when) to hedge particular foreign currencies in which
liquid foreign exchange markets exist.

To illustrate the importance of including an international component in a
well-diversified portfolio, below are the annual returns for the S&P 500 Index
and the EAFE(R) Index for the years 1984-1998. In seven of the past fifteen
years, international stocks (as represented by the EAFE Index) have outperformed
U.S. stocks (as represented by the S&P 500 Index), in some cases by a
significant margin. Conversely, in other years, U.S. stocks have substantially
outperformed international stocks. Investors with exposure to both domestic and
international issues can minimize losses because gains in one market can offset
losses in another.

ANNUAL TOTAL RETURNS FOR EAFE AND S&P 500 (1984-1998):6/
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------
YEAR 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
- ------------------------------------------------------------------------------------------------------------------------------
S&P 28.52% 33.32% 22.90% 37.44% 1.36% 10.03% 7.61% 30.34% -3.11% 31.59% 16.50% 5.18% 18.62% 31.64% 6.22%
500
- ------------------------------------------------------------------------------------------------------------------------------
EAFE 20.33% 2.06% 6.36% 11.55% 8.06% 32.94% -11.85% 12.50% -23.20% 10.80% 28.59% 24.93% 69.94% 56.72% 7.86%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Of course, these historical results may not continue in the future.
Investors should keep in mind the greater risks inherent in foreign markets,

- -----------------------------------

6/ Total return includes reinvestment of all dividends and other
distributions. The EAFE(R) Index, also known as the Morgan Stanley Capital
International Europe, Australasia, Far East Index, is an unmanaged index of over
1,000 foreign stock prices and is translated into U.S. dollars. The S&P "500"
Index is an unmanaged index generally considered to be representative of U.S.
stock market activity. Indices do not take into account brokerage commissions or
other fees and expenses of investing in the individual securities that they
track. Data about the performance of these indices are prepared or obtained by
NB Management.

24
<PAGE>

such as currency exchange fluctuations, interest rates, and potentially adverse
economic and political conditions.

* * * * *

Each Portfolio invests in a wide array of stocks, and no single
stock makes up more than a small fraction of any Portfolio's total assets. Of
course, each Portfolio's holdings are subject to change.

ADDITIONAL INVESTMENT INFORMATION
- ---------------------------------

Some or all of the Portfolios, as indicated below, may make the
following investments, among others; some of which are part of the Portfolio's
principal investment strategies and some of which are not. The principal risks
of each Portfolio's principal strategies are discussed in the Prospectus. They
may not buy all of the types of securities or use all of the investment
techniques that are described.

ILLIQUID SECURITIES (ALL PORTFOLIOS). Illiquid securities are
securities that cannot be expected to be sold within seven days at approximately
the price at which they are valued. These may include unregistered or other
restricted securities and repurchase agreements maturing in greater than seven
days. Illiquid securities may also include commercial paper under section 4(2)
of the 1933 Act, as amended, and Rule 144A securities (restricted securities
that may be traded freely among qualified institutional buyers pursuant to an
exemption from the registration requirements of the securities laws); these
securities are considered illiquid unless NB Management, acting pursuant to
guidelines established by the trustees of the Managers Trusts, determines they
are liquid. Generally, foreign securities freely tradable in their principal
market are not considered restricted or illiquid. Illiquid securities may be
difficult for a Portfolio to value or dispose of due to the absence of an active
trading market. The sale of some illiquid securities by the Portfolios may be
subject to legal restrictions which could be costly to the Portfolios.

POLICIES AND LIMITATIONS. Each Portfolio may invest up to 15% of its
net assets in illiquid securities.

REPURCHASE AGREEMENTS (ALL PORTFOLIOS). In a repurchase agreement, a
Portfolio purchases securities from a bank that is a member of the Federal
Reserve System (or, in the case of Neuberger Berman INTERNATIONAL Portfolio,
also from a foreign bank or a U.S. branch or agency of a foreign bank) or from a
securities dealer that agrees to repurchase the securities from the Portfolio at
a higher price on a designated future date. Repurchase agreements generally are
for a short period of time, usually less than a week. Costs, delays, or losses
could result if the selling party to a repurchase agreement becomes bankrupt or
otherwise defaults. NB Management monitors the creditworthiness of sellers. If
Neuberger Berman INTERNATIONAL Portfolio enters into a repurchase agreement
subject to foreign law and the counter-party defaults, that Portfolio may not
enjoy protections comparable to those provided to certain repurchase agreements
under U.S. bankruptcy law and may suffer delays and losses in disposing of the
collateral as a result.

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POLICIES AND LIMITATIONS. Repurchase agreements with a maturity of
more than seven days are considered to be illiquid securities. No Portfolio may
enter into a repurchase agreement with a maturity of more than seven days if, as
a result, more than 15% of the value of its net assets would then be invested in
such repurchase agreements and other illiquid securities. A Portfolio may enter
into a repurchase agreement only if (1) the underlying securities are of a type
that the Portfolio's investment policies and limitations would allow it to
purchase directly, (2) the market value of the underlying securities, including
accrued interest, at all times equals or exceeds the repurchase price, and (3)
payment for the underlying securities is made only upon satisfactory evidence
that the securities are being held for the Portfolio's account by its custodian
or a bank acting as the Portfolio's agent.

SECURITIES LOANS (ALL PORTFOLIOS). Each Portfolio may lend
securities to banks, brokerage firms, and other institutional investors judged
creditworthy by NB Management, provided that cash or equivalent collateral,
equal to at least 100% of the market value of the loaned securities, is
continuously maintained by the borrower with the Portfolio. The Portfolio may
invest the cash collateral and earn income, or it may receive an agreed upon
amount of interest income from a borrower who has delivered equivalent
collateral. During the time securities are on loan, the borrower will pay the
Portfolio an amount equivalent to any dividends or interest paid on such
securities. These loans are subject to termination at the option of the
Portfolio or the borrower. The Portfolio may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker. The Portfolio does not have the right to vote securities on loan, but
would terminate the loan and regain the right to vote if that were considered
important with respect to the investment. NB Management believes the risk of
loss on these transactions is slight because, if a borrower were to default for
any reason, the collateral should satisfy the obligation. However, as with other
extensions of secured credit, loans of portfolio securities involve some risk of
loss of rights in the collateral should the borrower fail financially.

POLICIES AND LIMITATIONS. Each Portfolio may lend portfolio
securities with a value not exceeding 33-1/3% of its total assets to banks,
brokerage firms, or other institutional investors judged creditworthy by NB
Management. Borrowers are required continuously to secure their obligations to
return securities on loan from a Portfolio by depositing collateral in a form
determined to be satisfactory by the Portfolio Trustees. The collateral, which
must be marked to market daily, must be equal to at least 100% of the market
value of the loaned securities, which will also be marked to market daily.
Securities lending by Neuberger Berman SOCIALLY RESPONSIVE Portfolio is not
subject to the Social Policy.

RESTRICTED SECURITIES AND RULE 144A SECURITIES (ALL PORTFOLIOS).
Each Portfolio may invest in restricted securities, which are securities that
may not be sold to the public without an effective registration statement under
the 1933 Act. Before they are registered, such securities may be sold only in a
privately negotiated transaction or pursuant to an exemption from registration.
In recognition of the increased size and liquidity of the institutional market
for unregistered securities and the importance of institutional investors in the
formation of capital, the SEC has adopted Rule 144A under the 1933 Act. Rule
144A is designed to facilitate efficient trading among institutional investors
by permitting the sale of certain unregistered securities to qualified
institutional buyers. To the extent privately placed securities held by a
Portfolio qualify under Rule 144A and an institutional market develops for those
securities, the Portfolio likely will be able to dispose of the securities

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without registering them under the 1933 Act. To the extent that institutional
buyers become, for a time, uninterested in purchasing these securities,
investing in Rule 144A securities could increase the level of a Portfolio's
illiquidity. NB Management, acting under guidelines established by the Portfolio
Trustees, may determine that certain securities qualified for trading under Rule
144A are liquid. Regulation S under the 1933 Act permits the sale abroad of
securities that are not registered for sale in the United States.

Where registration is required, a Portfolio may be obligated to pay
all or part of the registration expenses, and a considerable period may elapse
between the decision to sell and the time the Portfolio may be permitted to sell
a security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell. Restricted securities
for which no market exists are priced by a method that the Portfolio Trustees
believe accurately reflects fair value.

POLICIES AND LIMITATIONS. To the extent restricted securities,
including Rule 144A securities, are illiquid, purchases thereof will be subject
to each Portfolio's 15% limit on investments in illiquid securities.

REVERSE REPURCHASE AGREEMENTS (ALL PORTFOLIOS). In a reverse
repurchase agreement, a Portfolio sells portfolio securities subject to its
agreement to repurchase the securities at a later date for a fixed price
reflecting a market rate of interest. There is a risk that the counter-party to
a reverse repurchase agreement will be unable or unwilling to complete the
transaction as scheduled, which may result in losses to the Portfolio.

POLICIES AND LIMITATIONS. Reverse repurchase agreements are
considered borrowings for purposes of each Portfolio's investment policies and
limitations concerning borrowings. While a reverse repurchase agreement is
outstanding, a Portfolio will deposit in a segregated account with its custodian
cash or appropriate liquid securities, marked to market daily, in an amount at
least equal to the Portfolio's obligations under the agreement.

LEVERAGE (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). The Portfolio
may make investments while borrowings are outstanding. Leverage creates an
opportunity for increased total return but, at the same time, creates special
risk considerations. For example, leverage may amplify changes in the
Portfolio's and its corresponding Fund's net asset values ("NAVs"). Although the
principal of such borrowings will be fixed, the Portfolio's assets may change in
value during the time the borrowing is outstanding. Leverage from borrowing
creates interest expenses for the Portfolio. To the extent the income derived
from securities purchased with borrowed funds exceeds the interest the Portfolio
will have to pay, the Portfolio's total return will be greater than it would be
if leverage were not used. Conversely, if the income from the assets obtained
with borrowed funds is not sufficient to cover the cost of leveraging, the net
income of the Portfolio will be less than it would be if leverage were not used,
and therefore the amount available for distribution to the Fund's shareholders
as dividends will be reduced. Reverse repurchase agreements create leverage and
are considered borrowings for purposes of the Portfolio's investment
limitations.

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POLICIES AND LIMITATIONS. Generally, the Portfolio does not intend
to use leverage for investment purposes. It may, however, use leverage to
purchase securities needed to close out short sales entered into for hedging
purposes and to facilitate other hedging transactions.

FOREIGN SECURITIES (ALL PORTFOLIOS). Each Portfolio may invest in
U.S. dollar-denominated securities of foreign issuers and foreign branches of
U.S. banks, including negotiable certificates of deposit ("CDs"), bankers'
acceptances and commercial paper. Foreign issuers are issuers organized and
doing business principally outside the U.S. and include banks, non-U.S.
governments, and quasi-governmental organizations. While investments in foreign
securities are intended to reduce risk by providing further diversification,
such investments involve sovereign and other risks, in addition to the credit
and market risks normally associated with domestic securities. These additional
risks include the possibility of adverse political and economic developments
(including political instability, nationalization, expropriation, or
confiscatory taxation) and the potentially adverse effects of unavailability of
public information regarding issuers, less governmental supervision and
regulation of financial markets, reduced liquidity of certain financial markets,
and the lack of uniform accounting, auditing, and financial reporting standards
or the application of standards that are different or less stringent than those
applied in the United States.

Each Portfolio also may invest in equity, debt, or other
income-producing securities that are denominated in or indexed to foreign
currencies, including (1) common and preferred stocks, (2) CDs, commercial
paper, fixed time deposits, and bankers' acceptances issued by foreign banks,
(3) obligations of other corporations, and (4) obligations of foreign
governments and their subdivisions, agencies, and instrumentalities,
international agencies, and supranational entities. Investing in foreign
currency denominated securities involves the special risks associated with
investing in non-U.S. issuers, as described in the preceding paragraph, and the
additional risks of (1) adverse changes in foreign exchange rates, and (2)
adverse changes in investment or exchange control regulations (which could
prevent cash from being brought back to the United States). Additionally,
dividends and interest payable on foreign securities (and gains realized on
disposition thereof) may be subject to foreign taxes, including taxes withheld
from those payments. Commissions on foreign securities exchanges are often at
fixed rates and are generally higher than negotiated commissions on U.S.
exchanges, although the Portfolios endeavor to achieve the most favorable net
results on portfolio transactions.

Foreign securities often trade with less frequency and in less
volume than domestic securities and therefore may exhibit greater price
volatility. Additional costs associated with an investment in foreign securities
may include higher custodial fees than apply to domestic custody arrangements
and transaction costs of foreign currency conversions.

Foreign markets also have different clearance and settlement
procedures. In certain markets, there have been times when settlements have been
unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when a portion of the assets of a Portfolio are uninvested and
no return is earned thereon. The inability of a Portfolio to make intended
security purchases due to settlement problems could cause the Portfolio to miss

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attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result in losses to a Portfolio due
to subsequent declines in value of the securities or, if the Portfolio has
entered into a contract to sell the securities, could result in possible
liability to the purchaser.

Interest rates prevailing in other countries may affect the prices
of foreign securities and exchange rates for foreign currencies. Local factors,
including the strength of the local economy, the demand for borrowing, the
government's fiscal and monetary policies, and the international balance of
payments, often affect interest rates in other countries. Individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and balance of payments position.

The Portfolios may invest in ADRs, EDRs, GDRs, and IDRs. ADRs
(sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust
company evidencing its ownership of the underlying foreign securities. Most ADRs
are denominated in U.S. dollars and are traded on a U.S. stock exchange. Issuers
of the securities underlying sponsored ADRs, but not unsponsored ADRs, are
contractually obligated to disclose material information in the United States.
Therefore, the market value of unsponsored ADRs may not reflect the effect of
such information. EDRs and IDRs are receipts typically issued by a European bank
or trust company evidencing its ownership of the underlying foreign securities.
GDRs are receipts issued by either a U.S. or non-U.S. banking institution
evidencing its ownership of the underlying foreign securities and are often
denominated in U.S. dollars.

POLICIES AND LIMITATIONS. In order to limit the risks inherent in
investing in foreign currency denominated securities, a Portfolio (except
Neuberger Berman INTERNATIONAL, Neuberger Berman MILLENNIUM and Neuberger Berman
CENTURY Portfolios) may not purchase any such security if, as a result, more
than 10% of its total assets (taken at market value) would be invested in
foreign currency denominated securities. Each of Neuberger Berman MILLENNIUM and
Neuberger Berman CENTURY Portfolios may not purchase foreign currency
denominated securities if, as a result, more than 20% of its total assets (taken
at market value) would be invested in such securities. Within those limitations,
however, no Portfolio is restricted in the amount it may invest in securities
denominated in any one foreign currency. Neuberger Berman INTERNATIONAL
Portfolio invests primarily in foreign securities.

Investments in securities of foreign issuers are subject to each
Portfolio's quality standards. Each Portfolio (except Neuberger Berman
INTERNATIONAL Portfolio) may invest only in securities of issuers in countries
whose governments are considered stable by NB Management.

FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES (NEUBERGER BERMAN
INTERNATIONAL PORTFOLIO). The Portfolio may purchase securities on a when-issued
basis and may purchase or sell securities on a forward commitment basis. These
transactions involve a commitment by the Portfolio to purchase or sell
securities at a future date (ordinarily within two months, although the
Portfolio may agree to a longer settlement period). The price of the underlying
securities (usually expressed in terms of yield) and the date when the
securities will be delivered and paid for (the settlement date) are fixed at the
time the transaction is negotiated. When-issued purchases and forward commitment
transactions are negotiated directly with the other party, and such commitments
are not traded on exchanges.

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When-issued purchases and forward commitment transactions enable the
Portfolio to "lock in" what NB Management believes to be an attractive price or
yield on a particular security for a period of time, regardless of future
changes in interest rates. For instance, in periods of rising interest rates and
falling prices, the Portfolio might sell securities it owns on a forward
commitment basis to limit its exposure to falling prices. In periods of falling
interest rates and rising prices, the Portfolio might purchase a security on a
when-issued or forward commitment basis and sell a similar security to settle
such purchase, thereby obtaining the benefit of currently higher yields. If the
seller fails to complete the sale, the Portfolio may lose the opportunity to
obtain a favorable price.

The value of securities purchased on a when-issued or forward
commitment basis and any subsequent fluctuations in their value are reflected in
the computation of the Portfolio's NAV starting on the date of the agreement to
purchase the securities. Because the Portfolio has not yet paid for the
securities, this produces an effect similar to leverage. The Portfolio does not
earn interest on securities it has committed to purchase until the securities
are paid for and delivered on the settlement date. When the Portfolio makes a
forward commitment to sell securities it owns, the proceeds to be received upon
settlement are included in the Portfolio's assets. Fluctuations in the market
value of the underlying securities are not reflected in the Portfolio's NAV as
long as the commitment to sell remains in effect.

POLICIES AND LIMITATIONS. The Portfolio will purchase securities on
a when-issued basis or purchase or sell securities on a forward commitment basis
only with the intention of completing the transaction and actually purchasing or
selling the securities. If deemed advisable as a matter of investment strategy,
however, the Portfolio may dispose of or renegotiate a commitment after it has
been entered into. The Portfolio also may sell securities it has committed to
purchase before those securities are delivered to the Portfolio on the
settlement date. The Portfolio may realize capital gains or losses in connection
with these transactions.

When the Portfolio purchases securities on a when-issued or forward
commitment basis, the Portfolio will deposit in a segregated account with its
custodian, until payment is made, appropriate liquid securities having a value
(determined daily) at least equal to the amount of the Portfolio's purchase
commitments. In the case of a forward commitment to sell portfolio securities,
the custodian will hold the portfolio securities themselves in a segregated
account while the commitment is outstanding. These procedures are designed to
ensure that the Portfolio maintains sufficient assets at all times to cover its
obligations under when-issued purchases and forward commitment transactions.

FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES AND INDICES,
FORWARD CONTRACTS, AND OPTIONS ON FOREIGN
CURRENCIES (COLLECTIVELY, "FINANCIAL INSTRUMENTS")

FUTURES CONTRACTS AND OPTIONS THEREON (ALL PORTFOLIOS). Each of
Neuberger Berman SOCIALLY RESPONSIVE, Neuberger Berman MILLENNIUM and Neuberger
Berman CENTURY Portfolios may purchase and sell interest rate futures contracts,
stock and bond index futures contracts, and foreign currency futures contracts
and may purchase and sell options thereon in an attempt to hedge against changes

30
<PAGE>

in the prices of securities or, in the case of foreign currency futures and
options thereon, to hedge against changes in prevailing currency exchange rates.
Because the futures markets may be more liquid than the cash markets, the use of
futures contracts permits each Portfolio to enhance portfolio liquidity and
maintain a defensive position without having to sell portfolio securities. These
Portfolios view investment in (i) interest rate and securities index futures and
options thereon as a maturity management device and/or a device to reduce risk
or preserve total return in an adverse environment for the hedged securities,
and (ii) foreign currency futures and options thereon as a means of establishing
more definitely the effective return on, or the purchase price of, securities
denominated in foreign currencies that are held or intended to be acquired by
the Portfolio.

Neuberger Berman INTERNATIONAL Portfolio may enter into futures
contracts on currencies, debt securities, interest rates, and securities indices
that are traded on exchanges regulated by the Commodity Futures Trading
Commission ("CFTC") or on foreign exchanges. Trading on foreign exchanges is
subject to the legal requirements of the jurisdiction in which the exchange is
located and to the rules of such foreign exchange.

Neuberger Berman INTERNATIONAL Portfolio may sell futures contracts
in order to offset a possible decline in the value of its portfolio securities.
When a futures contract is sold by the Portfolio, the value of the contract will
tend to rise when the value of the portfolio securities declines and will tend
to fall when the value of such securities increases. The Portfolio may purchase
futures contracts in order to fix what NB Management believes to be a favorable
price for securities the Portfolio intends to purchase. If a futures contract is
purchased by the Portfolio, the value of the contract will tend to change
together with changes in the value of such securities. To compensate for
differences in historical volatility between positions Neuberger Berman
INTERNATIONAL Portfolio wishes to hedge and the standardized futures contracts
available to it, the Portfolio may purchase or sell futures contracts with a
greater or lesser value than the securities it wishes to hedge.

With respect to currency futures, Neuberger Berman INTERNATIONAL
Portfolio may sell a futures contract or a call option, or it may purchase a put
option on such futures contract, if NB Management anticipates that exchange
rates for a particular currency will fall. Such a transaction will be used as a
hedge (or, in the case of a sale of a call option, a partial hedge) against a
decrease in the value of portfolio securities denominated in that currency. If
NB Management anticipates that a particular currency will rise, Neuberger Berman
INTERNATIONAL Portfolio may purchase a currency futures contract or a call
option to protect against an increase in the price of securities which are
denominated in that currency and which the Portfolio intends to purchase. The
Portfolio may also purchase a currency futures contract or a call option thereon
for non-hedging purposes when NB Management anticipates that a particular
currency will appreciate in value, but securities denominated in that currency
do not present an attractive investment and are not included in the Portfolio.

For purposes of managing cash flow, each Portfolio may purchase and
sell stock index futures contracts, and may purchase and sell options thereon,
to increase its exposure to the performance of a recognized securities index,
such as the S&P 500 Index.

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A "sale" of a futures contract (or a "short" futures position)
entails the assumption of a contractual obligation to deliver the securities or
currency underlying the contract at a specified price at a specified future
time. A "purchase" of a futures contract (or a "long" futures position) entails
the assumption of a contractual obligation to acquire the securities or currency
underlying the contract at a specified price at a specified future time. Certain
futures, including stock and bond index futures, are settled on a net cash
payment basis rather than by the sale and delivery of the securities underlying
the futures.

U.S. futures contracts (except certain currency futures) are traded
on exchanges that have been designated as "contract markets" by the CFTC;
futures transactions must be executed through a futures commission merchant that
is a member of the relevant contract market. In both U.S. and foreign markets,
an exchange's affiliated clearing organization guarantees performance of the
contracts between the clearing members of the exchange.

Although futures contracts by their terms may require the actual
delivery or acquisition of the underlying securities or currency, in most cases
the contractual obligation is extinguished by being offset before the expiration
of the contract. A futures position is offset by buying (to offset an earlier
sale) or selling (to offset an earlier purchase) an identical futures contract
calling for delivery in the same month. This may result in a profit or loss.
While futures contracts entered into by a Portfolio will usually be liquidated
in this manner, the Portfolio may instead make or take delivery of underlying
securities whenever it appears economically advantageous for it to do so.

"Margin" with respect to a futures contract is the amount of assets
that must be deposited by a Portfolio with, or for the benefit of, a futures
commission merchant in order to initiate and maintain the Portfolio's futures
positions. The margin deposit made by the Portfolio when it enters into a
futures contract ("initial margin") is intended to assure its performance of the
contract. If the price of the futures contract changes -- increases in the case
of a short (sale) position or decreases in the case of a long (purchase)
position -- so that the unrealized loss on the contract causes the margin
deposit not to satisfy margin requirements, the Portfolio will be required to
make an additional margin deposit ("variation margin"). However, if favorable
price changes in the futures contract cause the margin deposit to exceed the
required margin, the excess will be paid to the Portfolio. In computing their
NAVs, the Portfolios mark to market the value of their open futures positions.
Each Portfolio also must make margin deposits with respect to options on futures
that it has written (but not with respect to options on futures that it has
purchased). If the futures commission merchant holding the margin deposit goes
bankrupt, the Portfolio could suffer a delay in recovering its funds and could
ultimately suffer a loss.

An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in the contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option exercise period. The
writer of the option is required upon exercise to assume a short futures
position (if the option is a call) or a long futures position (if the option is
a put). Upon exercise of the option, the accumulated cash balance in the
writer's futures margin account is delivered to the holder of the option. That
balance represents the amount by which the market price of the futures contract
at exercise exceeds, in the case of a call, or is less than, in the case of a
put, the exercise price of the option. Options on futures have characteristics
and risks similar to those of securities options, as discussed herein.

Although each Portfolio believes that the use of futures contracts
will benefit it, if NB Management's judgment about the general direction of the
markets or about interest rate or currency exchange rate trends is incorrect,
the Portfolio's overall return would be lower than if it had not entered into
any such contracts. The prices of futures contracts are volatile and are
influenced by, among other things, actual and anticipated changes in interest or
currency exchange rates, which in turn are affected by fiscal and monetary
policies and by national and international political and economic events. At
best, the correlation between changes in prices of futures contracts and of
securities being hedged can be only approximate due to differences between the
futures and securities markets or differences between the securities or
currencies underlying a Portfolio's futures position and the securities held by
or to be purchased for the Portfolio. The currency futures market may be
dominated by short-term traders seeking to profit from changes in exchange
rates. This would reduce the value of such contracts used for hedging purposes

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over a short-term period. Such distortions are generally minor and would
diminish as the contract approaches maturity.

Because of the low margin deposits required, futures trading
involves an extremely high degree of leverage; as a result, a relatively small
price movement in a futures contract may result in immediate and substantial
loss, or gain, to the investor. Losses that may arise from certain futures
transactions are potentially unlimited.

Most U.S. futures exchanges limit the amount of fluctuation in the
price of a futures contract or option thereon during a single trading day; once
the daily limit has been reached, no trades may be made on that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day, however; it thus does not limit potential losses. In
fact, it may increase the risk of loss, because prices can move to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing liquidation of unfavorable futures and options positions and
subjecting traders to substantial losses. If this were to happen with respect to
a position held by a Portfolio, it could (depending on the size of the position)
have an adverse impact on the NAV of the Portfolio.

POLICIES AND LIMITATIONS. Neuberger Berman SOCIALLY Responsive,
Neuberger Berman MILLENNIUM and Neuberger Berman CENTURY Portfolios each may
purchase and sell futures contracts and may purchase and sell options thereon in
an attempt to hedge against changes in the prices of securities or, in the case
of foreign currency futures and options thereon, to hedge against prevailing
currency exchange rates. These Portfolios do not engage in transactions in
futures and options on futures for speculation. The use of futures and options
on futures by Neuberger Berman SOCIALLY RESPONSIVE Portfolio is not subject to
the Social Policy.

Neuberger Berman INTERNATIONAL Portfolio may purchase and sell
futures for BONA FIDE hedging purposes, as defined in regulations of the CFTC,
and for non-hedging purposes (I.E., in an effort to enhance income). The
Portfolio may also purchase and write put and call options on such futures
contracts for BONA FIDE hedging and non-hedging purposes.

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CALL OPTIONS ON SECURITIES (ALL PORTFOLIOS). Neuberger Berman
MILLENNIUM, CENTURY, SOCIALLY RESPONSIVE and INTERNATIONAL Portfolios may write
covered call options and may purchase call options on securities. Each of the
other Portfolios may write covered call options and may purchase call options in
related closing transactions. The purpose of writing call options is to hedge
(I.E., to reduce, at least in part, the effect of price fluctuations of
securities held by the Portfolio on the Portfolio's and its corresponding Fund's
NAVs) or to earn premium income. Portfolio securities on which call options may
be written and purchased by a Portfolio are purchased solely on the basis of
investment considerations consistent with the Portfolio's investment objective.

When a Portfolio writes a call option, it is obligated to sell a
security to a purchaser at a specified price at any time until a certain date if
the purchaser decides to exercise the option. The Portfolio receives a premium
for writing the call option. So long as the obligation of the call option
continues, the Portfolio may be assigned an exercise notice, requiring it to
deliver the underlying security against payment of the exercise price. The
Portfolio may be obligated to deliver securities underlying an option at less
than the market price.

The writing of covered call options is a conservative investment
technique that is believed to involve relatively little risk but is capable of
enhancing the Portfolios' total return. When writing a covered call option, a
Portfolio, in return for the premium, gives up the opportunity for profit from a
price increase in the underlying security above the exercise price, but
conversely retains the risk of loss should the price of the security decline.

If a call option that a Portfolio has written expires unexercised,
the Portfolio will realize a gain in the amount of the premium; however, that
gain may be offset by a decline in the market value of the underlying security
during the option period. If the call option is exercised, the Portfolio will
realize a gain or loss from the sale of the underlying security.

When a Portfolio purchases a call option, it pays a premium for the
right to purchase a security from the writer at a specified price until a
specified date.

POLICIES AND LIMITATIONS. Each Portfolio may write covered call
options and may purchase call options in related closing transactions. Each
Portfolio writes only "covered" call options on securities it owns (in contrast
to the writing of "naked" or uncovered call options, which the Portfolios will
not do).

A Portfolio would purchase a call option to offset a previously
written call option. Each of Neuberger Berman MILLENNIUM, CENTURY and SOCIALLY
RESPONSIVE Portfolios also may purchase a call option to protect against an
increase in the price of the securities it intends to purchase. The use of call
options on securities by Neuberger Berman SOCIALLY RESPONSIVE Portfolio is not
subject to the Social Policy. Neuberger Berman INTERNATIONAL Portfolio may
purchase call options for hedging or non-hedging purposes.

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PUT OPTIONS ON SECURITIES (NEUBERGER BERMAN MILLENNIUM, CENTURY,
SOCIALLY RESPONSIVE AND INTERNATIONAL PORTFOLIOS).
- -------------------------------------------------

Each of these Portfolios may write and purchase put options on
securities. Each of Neuberger Berman MILLENNIUM, CENTURY, SOCIALLY RESPONSIVE or
INTERNATIONAL Portfolio will receive a premium for writing a put option, which
obligates the Portfolio to acquire a security at a certain price at any time
until a certain date if the purchaser decides to exercise the option. The
Portfolio may be obligated to purchase the underlying security at more than its
current value.

When Neuberger Berman MILLENNIUM, CENTURY, SOCIALLY RESPONSIVE or
INTERNATIONAL Portfolio purchases a put option, it pays a premium to the writer
for the right to sell a security to the writer for a specified amount at any
time until a certain date. The Portfolio would purchase a put option in order to
protect itself against a decline in the market value of a security it owns.

Portfolio securities on which put options may be written and
purchased by Neuberger Berman MILLENNIUM, CENTURY, SOCIALLY RESPONSIVE or
INTERNATIONAL Portfolio are purchased solely on the basis of investment
considerations consistent with the Portfolio's investment objective. When
writing a put option, the Portfolio, in return for the premium, takes the risk
that it must purchase the underlying security at a price that may be higher than
the current market price of the security. If a put option that the Portfolio has
written expires unexercised, the Portfolio will realize a gain in the amount of
the premium.

POLICIES AND LIMITATIONS. Neuberger Berman MILLENNIUM, CENTURY,
SOCIALLY RESPONSIVE and INTERNATIONAL Portfolios generally write and purchase
put options on securities for hedging purposes (I.E., to reduce, at least in
part, the effect of price fluctuations of securities held by the Portfolio on
the Portfolio's and its corresponding Fund's NAVs). However, Neuberger Berman
INTERNATIONAL Portfolio also may use put options for non-hedging purposes. The
use of put options on securities by Neuberger Berman SOCIALLY RESPONSIVE
Portfolio is not subject to the Social Policy.

GENERAL INFORMATION ABOUT SECURITIES OPTIONS. The exercise price of
an option may be below, equal to, or above the market value of the underlying
security at the time the option is written. Options normally have expiration
dates between three and nine months from the date written. American-style
options are exercisable at any time prior to their expiration date. Neuberger
Berman INTERNATIONAL Portfolio also may purchase European-style options, which
are exercisable only immediately prior to their expiration date. The obligation
under any option written by a Portfolio terminates upon expiration of the option
or, at an earlier time, when the Portfolio offsets the option by entering into a
"closing purchase transaction" to purchase an option of the same series. If an
option is purchased by a Portfolio and is never exercised or closed out, the
Portfolio will lose the entire amount of the premium paid.

Options are traded both on U.S. national securities exchanges and in
the over-the-counter ("OTC") market. Neuberger Berman INTERNATIONAL Portfolio
also may purchase and sell options that are traded on foreign exchanges.
Exchange-traded options are issued by a clearing organization affiliated with

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the exchange on which the option is listed; the clearing organization in effect
guarantees completion of every exchange-traded option. In contrast, OTC options
are contracts between a Portfolio and a counter-party, with no clearing
organization guarantee. Thus, when a Portfolio sells (or purchases) an OTC
option, it generally will be able to "close out" the option prior to its
expiration only by entering into a closing transaction with the dealer to whom
(or from whom) the Portfolio originally sold (or purchased) the option. There
can be no assurance that the Portfolio would be able to liquidate an OTC option
at any time prior to expiration. Unless a Portfolio is able to effect a closing
purchase transaction in a covered OTC call option it has written, it will not be
able to liquidate securities used as cover until the option expires or is
exercised or until different cover is substituted. In the event of the
counter-party's insolvency, a Portfolio may be unable to liquidate its options
position and the associated cover. NB Management monitors the creditworthiness
of dealers with which a Portfolio may engage in OTC options transactions.

The premium received (or paid) by a Portfolio when it writes (or
purchases) an option is the amount at which the option is currently traded on
the applicable market. The premium may reflect, among other things, the current
market price of the underlying security, the relationship of the exercise price
to the market price, the historical price volatility of the underlying security,
the length of the option period, the general supply of and demand for credit,
and the interest rate environment. The premium received by a Portfolio for
writing an option is recorded as a liability on the Portfolio's statement of
assets and liabilities. This liability is adjusted daily to the option's current
market value.

Closing transactions are effected in order to realize a profit (or
minimize a loss) on an outstanding option, to prevent an underlying security
from being called, or to permit the sale or the put of the underlying security.
Furthermore, effecting a closing transaction permits Neuberger Berman
MILLENNIUM, SOCIALLY RESPONSIVE or INTERNATIONAL Portfolio to write another call
option on the underlying security with a different exercise price or expiration
date or both. There is, of course, no assurance that a Portfolio will be able to
effect closing transactions at favorable prices. If a Portfolio cannot enter
into such a transaction, it may be required to hold a security that it might
otherwise have sold (or purchase a security that it would not have otherwise
bought), in which case it would continue to be at market risk on the security.

A Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from writing the call or put option. Because increases in the market
price of a call option generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset, in whole or in part, by appreciation of the underlying
security owned by the Portfolio; however, the Portfolio could be in a less
advantageous position than if it had not written the call option.

A Portfolio pays brokerage commissions or spreads in connection with
purchasing or writing options, including those used to close out existing
positions. From time to time, Neuberger Berman MILLENNIUM, SOCIALLY RESPONSIVE
or INTERNATIONAL Portfolio may purchase an underlying security for delivery in
accordance with an exercise notice of a call option assigned to it, rather than
delivering the security from its portfolio. In those cases, additional brokerage
commissions are incurred.

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The hours of trading for options may not conform to the hours during
which the underlying securities are traded. To the extent that the options
markets close before the markets for the underlying securities, significant
price and rate movements can take place in the underlying markets that cannot be
reflected in the options markets.

POLICIES AND LIMITATIONS. Each Portfolio may use American-style
options. Neuberger Berman INTERNATIONAL Portfolio may also purchase
European-style options and may purchase and sell options that are traded on
foreign exchanges.

The assets used as cover (or held in a segregated account) for OTC
options written by a Portfolio will be considered illiquid unless the OTC
options are sold to qualified dealers who agree that the Portfolio may
repurchase any OTC option it writes at a maximum price to be calculated by a
formula set forth in the option agreement. The cover for an OTC call option
written subject to this procedure will be considered illiquid only to the extent
that the maximum repurchase price under the formula exceeds the intrinsic value
of the option.

The use of put and call options by Neuberger Berman SOCIALLY
RESPONSIVE Portfolio is not subject to the Social Policy.

PUT AND CALL OPTIONS ON SECURITIES INDICES. Neuberger Berman
INTERNATIONAL Portfolio may purchase put and call options on securities indices
for the purpose of hedging against the risk of price movements that would
adversely affect the value of the Portfolio's securities or securities the
Portfolio intends to buy. The Portfolio may write securities index options to
close out positions in such options that it has purchased.

Unlike a securities option, which gives the holder the right to
purchase or sell a specified security at a specified price, an option on a
securities index gives the holder the right to receive a cash "exercise
settlement amount" equal to (1) the difference between the exercise price of the
option and the value of the underlying securities index on the exercise date (2)
multiplied by a fixed "index multiplier." A securities index fluctuates with
changes in the market values of the securities included in the index. Options on
stock indices are currently traded on the Chicago Board Options Exchange, the
New York Stock Exchange ("NYSE"), the American Stock Exchange, and other U.S.
and foreign exchanges.

The effectiveness of hedging through the purchase of securities
index options will depend upon the extent to which price movements in the
securities being hedged correlate with price movements in the selected
securities index. Perfect correlation is not possible because the securities
held or to be acquired by the Portfolio will not exactly match the composition
of the securities indices on which options are available.

Securities index options have characteristics and risks similar to
those of securities options, as discussed herein.

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POLICIES AND LIMITATIONS. Neuberger Berman INTERNATIONAL Portfolio
may purchase put and call options on securities indices for the purpose of
hedging. All securities index options purchased by the Portfolio will be listed
and traded on an exchange. The Portfolio currently does not expect to invest a
substantial portion of its assets in securities index options.

For purposes of managing cash flow, each Portfolio may purchase put
and call options on securities indices to increase the Portfolio's exposure to
the performance of a recognized securities index, such as the S&P 500 Index. All
securities index options purchased by the Portfolios will be listed and traded
on an exchange.

FOREIGN CURRENCY TRANSACTIONS (ALL PORTFOLIOS). Each Portfolio may
enter into contracts for the purchase or sale of a specific currency at a future
date (usually less than one year from the date of the contract) at a fixed price
("forward contracts"). The Portfolios also may engage in foreign currency
exchange transactions on a spot (I.E., cash) basis at the spot rate prevailing
in the foreign currency exchange market.

The Portfolios (other than Neuberger Berman INTERNATIONAL Portfolio)
enter into forward contracts in an attempt to hedge against changes in
prevailing currency exchange rates. The Portfolios do not engage in transactions
in forward contracts for speculation; they view investments in forward contracts
as a means of establishing more definitely the effective return on, or the
purchase price of, securities denominated in foreign currencies. Forward
contract transactions include forward sales or purchases of foreign currencies
for the purpose of protecting the U.S. dollar value of securities held or to be
acquired by a Portfolio or protecting the U.S. dollar equivalent of dividends,
interest, or other payments on those securities.

Forward contracts are traded in the interbank market directly
between dealers (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades; foreign exchange dealers realize a profit based on the
difference (the spread) between the prices at which they are buying and selling
various currencies.

At the consummation of a forward contract to sell currency, a
Portfolio may either make delivery of the foreign currency or terminate its
contractual obligation to deliver by purchasing an offsetting contract. If the
Portfolio chooses to make delivery of the foreign currency, it may be required
to obtain such currency through the sale of portfolio securities denominated in
such currency or through conversion of other assets of the Portfolio into such
currency. If the Portfolio engages in an offsetting transaction, it will incur a
gain or a loss to the extent that there has been a change in forward contract
prices. Closing purchase transactions with respect to forward contracts are
usually made with the currency dealer who is a party to the original forward
contract.

NB Management believes that the use of foreign currency hedging
techniques, including "proxy-hedges," can provide significant protection of NAV
in the event of a general rise in the U.S. dollar against foreign currencies.
For example, the return available from securities denominated in a particular
foreign currency would diminish if the value of the U.S. dollar increased
against that currency. Such a decline could be partially or completely offset by
an increase in value of a hedge involving a forward contract to sell that
foreign currency or a proxy-hedge involving a forward contract to sell a

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different foreign currency whose behavior is expected to resemble the currency
in which the securities being hedged are denominated but which is available on
more advantageous terms.

However, a hedge or proxy-hedge cannot protect against exchange rate
risks perfectly, and, if NB Management is incorrect in its judgment of future
exchange rate relationships, a Portfolio could be in a less advantageous
position than if such a hedge had not been established. If a Portfolio uses
proxy-hedging, it may experience losses on both the currency in which it has
invested and the currency used for hedging if the two currencies do not vary
with the expected degree of correlation. Using forward contracts to protect the
value of a Portfolio's securities against a decline in the value of a currency
does not eliminate fluctuations in the prices of the underlying securities.
Because forward contracts are not traded on an exchange, the assets used to
cover such contracts may be illiquid. A Portfolio may experience delays in the
settlement of its foreign currency transactions.

Neuberger Berman INTERNATIONAL Portfolio may purchase securities of
an issuer domiciled in a country other than the country in whose currency the
instrument is denominated. The Portfolio may invest in securities denominated in
the European Currency Unit ("ECU"), which is a "basket" consisting of a
specified amount of the currencies of certain of the member states of the
European Union. The specific amounts of currencies comprising the ECU may be
adjusted by the Council of Ministers of the European Union from time to time to
reflect changes in relative values of the underlying currencies. The market for
ECUs may become illiquid at times of uncertainty or rapid change in the European
currency markets, limiting the Portfolio's ability to prevent potential losses.
In addition, Neuberger Berman INTERNATIONAL Portfolio may invest in securities
denominated in other currency baskets.

POLICIES AND LIMITATIONS. The Portfolios (other than Neuberger
Berman INTERNATIONAL Portfolio) may enter into forward contracts for the purpose
of hedging and not for speculation. The use of forward contracts by Neuberger
Berman SOCIALLY Responsive Portfolio is not subject to the Social Policy.

Neuberger Berman INTERNATIONAL Portfolio may enter into forward
contracts for hedging or non-hedging purposes. When the Portfolio engages in
foreign currency transactions for hedging purposes, it will not enter into
forward contracts to sell currency or maintain a net exposure to such contracts
if their consummation would obligate the Portfolio to deliver an amount of
foreign currency materially in excess of the value of its portfolio securities
or other assets denominated in that currency. Neuberger Berman INTERNATIONAL
Portfolio may also purchase and sell forward contracts for non-hedging purposes
when NB Management anticipates that a foreign currency will appreciate or
depreciate in value, but securities in that currency do not present attractive
investment opportunities and are not held in the Portfolio's investment
portfolio.

OPTIONS ON FOREIGN CURRENCIES (ALL PORTFOLIOS). Each Portfolio may
write and purchase covered call and put options on foreign currencies. Neuberger
Berman INTERNATIONAL Portfolio may write (sell) put and covered call options on
any currency in order to realize greater income than would be realized on
portfolio securities alone.

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Currency options have characteristics and risks similar to those of
securities options, as discussed herein. Certain options on foreign currencies
are traded on the OTC market and involve liquidity and credit risks that may not
be present in the case of exchange-traded currency options.

POLICIES AND LIMITATIONS. A Portfolio would use options on foreign
currencies to protect against declines in the U.S. dollar value of portfolio
securities or increases in the U.S. dollar cost of securities to be acquired or
to protect the U.S. dollar equivalent of dividends, interest, or other payments
on those securities. In addition, Neuberger Berman INTERNATIONAL Portfolio may
purchase put and call options on foreign currencies for non-hedging purposes
when NB Management anticipates that a currency will appreciate or depreciate in
value, but securities denominated in that currency do not present attractive
investment opportunities and are not included in the Portfolio. The use of
options on currencies by Neuberger Berman SOCIALLY RESPONSIVE Portfolio is not
subject to the Social Policy.

REGULATORY LIMITATIONS ON USING FINANCIAL INSTRUMENTS. To the extent
a Portfolio sells or purchases futures contracts or writes options thereon or
options on foreign currencies that are traded on an exchange regulated by the
CFTC other than for BONA FIDE hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums on those positions (excluding the amount
by which options are "in-the-money") may not exceed 5% of the Portfolio's net
assets.

COVER FOR FINANCIAL INSTRUMENTS. Securities held in a segregated
account cannot be sold while the futures, options, or forward strategy covered
by those securities is outstanding, unless they are replaced with other suitable
assets. As a result, segregation of a large percentage of a Portfolio's assets
could impede portfolio management or the Portfolio's ability to meet current
obligations. A Portfolio may be unable to promptly dispose of assets which
cover, or are segregated with respect to, an illiquid futures, options, or
forward position; this inability may result in a loss to the Portfolio.

POLICIES AND LIMITATIONS. Each Portfolio will comply with SEC
guidelines regarding "cover" for Financial Instruments and, if the guidelines so
require, set aside in a segregated account with its custodian the prescribed
amount of cash or appropriate liquid securities.

GENERAL RISKS OF FINANCIAL INSTRUMENTS. The primary risks in using
Financial Instruments are (1) imperfect correlation or no correlation between
changes in market value of the securities or currencies held or to be acquired
by a Portfolio and the prices of Financial Instruments; (2) possible lack of a
liquid secondary market for Financial Instruments and the resulting inability to
close out Financial Instruments when desired; (3) the fact that the skills
needed to use Financial Instruments are different from those needed to select a
Portfolio's securities; (4) the fact that, although use of Financial Instruments
for hedging purposes can reduce the risk of loss, they also can reduce the
opportunity for gain, or even result in losses, by offsetting favorable price
movements in hedged investments; and (5) the possible inability of a Portfolio
to purchase or sell a portfolio security at a time that would otherwise be
favorable for it to do so, or the possible need for a Portfolio to sell a
portfolio security at a disadvantageous time, due to its need to maintain cover
or to segregate securities in connection with its use of Financial Instruments.

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There can be no assurance that a Portfolio's use of Financial Instruments will
be successful.

Each Portfolio's use of Financial Instruments may be limited by the
provisions of the Internal Revenue Code of 1986, as amended ("Code"), with which
it must comply if its corresponding Fund is to continue to qualify as a
regulated investment company ("RIC"). See "Additional Tax Information."
Financial Instruments may not be available with respect to some currencies,
especially those of so-called emerging market countries.

POLICIES AND LIMITATIONS. NB Management intends to reduce the risk
of imperfect correlation by investing only in Financial Instruments whose
behavior is expected to resemble or offset that of a Portfolio's underlying
securities or currency. NB Management intends to reduce the risk that a
Portfolio will be unable to close out Financial Instruments by entering into
such transactions only if NB Management believes there will be an active and
liquid secondary market.

SHORT SALES (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). Neuberger
Berman INTERNATIONAL Portfolio may attempt to limit exposure to a possible
decline in the market value of portfolio securities through short sales of
securities that NB Management believes possess volatility characteristics
similar to those being hedged. The Portfolio also may use short sales in an
attempt to realize gain. To effect a short sale, the Portfolio borrows a
security from a brokerage firm to make delivery to the buyer. The Portfolio then
is obliged to replace the borrowed security by purchasing it at the market price
at the time of replacement. Until the security is replaced, the Portfolio is
required to pay the lender any dividends and may be required to pay a premium or
interest.

Neuberger Berman INTERNATIONAL Portfolio will realize a gain if the
security declines in price between the date of the short sale and the date on
which the Portfolio replaces the borrowed security. The Portfolio will incur a
loss if the price of the security increases between those dates. The amount of
any gain will be decreased, and the amount of any loss increased, by the amount
of any premium or interest the Portfolio is required to pay in connection with
the short sale. A short position may be adversely affected by imperfect
correlation between movements in the price of the securities sold short and the
securities being hedged.

Neuberger Berman INTERNATIONAL Portfolio also may make short sales
against-the-box, in which it sells securities short only if it owns or has the
right to obtain without payment of additional consideration an equal amount of
the same type of securities sold.

The effect of short selling on the Portfolio is similar to the
effect of leverage. Short selling may amplify changes in the Portfolio's and
Neuberger Berman INTERNATIONAL Fund's NAVs. Short selling may also produce
higher than normal portfolio turnover, which may result in increased transaction
costs to the Portfolio.

POLICIES AND LIMITATIONS. Under applicable guidelines of the SEC
staff, if the Portfolio engages in a short sale (other than a short sale
against-the-box), it must put in a segregated account (not with the broker) an
amount of cash or appropriate liquid securities equal to the difference between

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(1) the market value of the securities sold short at the time they were sold
short and (2) any cash or securities required to be deposited as collateral with
the broker in connection with the short sale (not including the proceeds from
the short sale). In addition, until the Portfolio replaces the borrowed
security, it must daily maintain the segregated account at such a level that (1)
the amount deposited in it plus the amount deposited with the broker as
collateral equals the current market value of the securities sold short, and (2)
the amount deposited in it plus the amount deposited with the broker as
collateral is not less than the market value of the securities at the time they
were sold short.

FIXED INCOME SECURITIES (ALL PORTFOLIOS). While the emphasis of the
Portfolios' investment programs is on common stocks and other equity securities,
the Portfolios may also invest in money market instruments, U.S. Government and
Agency Securities, and other fixed income securities. Each Portfolio may invest
in investment grade corporate bonds and debentures. Neuberger Berman PARTNERS,
INTERNATIONAL, CENTURY and REGENCY Portfolios each may invest in corporate debt
securities rated below investment grade.

U.S. Government Securities are obligations of the U.S. Treasury
backed by the full faith and credit of the United States. U.S. Government Agency
Securities are issued or guaranteed by U.S. Government agencies or by
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association, Fannie Mae (also known as Federal National Mortgage
Association), Freddie Mac (also known as Federal Home Loan Mortgage
Corporation), Student Loan Marketing Association (commonly known as "Sallie
Mae"), and the Tennessee Valley Authority. Some U.S. Government Agency
Securities are supported by the full faith and credit of the United States,
while others may by supported by the issuer's ability to borrow from the U.S.
Treasury, subject to the Treasury's discretion in certain cases, or only by the
credit of the issuer. U.S. Government Agency Securities include U.S. Government
Agency mortgage-backed securities. The market prices of U.S. Government and
Agency Securities are not guaranteed by the Government.

"Investment grade" debt securities are those receiving one of the
four highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard
& Poor's ("S&P"), or another nationally recognized statistical rating
organization ("NRSRO") or, if unrated by any NRSRO, deemed by NB Management to
be comparable to such rated securities ("Comparable Unrated Securities").
Securities rated by Moody's in its fourth highest rating category (Baa) or
Comparable Unrated Securities may be deemed to have speculative characteristics.

The ratings of an NRSRO represent its opinion as to the quality of
securities it undertakes to rate. Ratings are not absolute standards of quality;
consequently, securities with the same maturity, coupon, and rating may have
different yields. Although the Portfolios may rely on the ratings of any NRSRO,
the Portfolios primarily refer to ratings assigned by S&P and Moody's, which are
described in Appendix A to this SAI.

Fixed income securities are subject to the risk of an issuer's
inability to meet principal and interest payments on its obligations ("credit
risk") and are subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer, and market
liquidity ("market risk"). The value of the fixed income securities in which a
Portfolio may invest is likely to decline in times of rising market interest
rates. Conversely, when rates fall, the value of a Portfolio's fixed income

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investments is likely to rise. Foreign debt securities are subject to risks
similar to those of other foreign securities.

Lower-rated securities are more likely to react to developments
affecting market and credit risk than are more highly rated securities, which
react primarily to movements in the general level of interest rates. Debt
securities in the lowest rating categories may involve a substantial risk of
default or may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of the issuer of such securities to make principal and
interest payments than is the case for higher-grade debt securities. An economic
downturn affecting the issuer may result in an increased incidence of default.
The market for lower-rated securities may be thinner and less active than for
higher-rated securities. Pricing of thinly traded securities requires greater
judgment than pricing of securities for which market transactions are regularly
reported. NB Management will invest in lower-rated securities only when it
concludes that the anticipated return on such an investment to Neuberger Berman
PARTNERS, INTERNATIONAL, CENTURY OR REGENCY or Portfolios warrants exposure to
the additional level of risk.

POLICIES AND LIMITATIONS. Each Portfolio normally may invest up to
35% of its total assets in debt securities. Neuberger Berman PARTNERS, CENTURY
and REGENCY Portfolios each may invest up to 15% of its net assets in corporate
debt securities rated below investment grade or Comparable Unrated Securities.
Neuberger Berman INTERNATIONAL Portfolio may invest in domestic and foreign debt
securities of any rating, including those rated below investment grade and
Comparable Unrated Securities.

Subsequent to its purchase by a Portfolio, an issue of debt
securities may cease to be rated or its rating may be reduced, so that the
securities would no longer be eligible for purchase by that Portfolio. In such a
case, Neuberger Berman MILLENNIUM Portfolio and Neuberger Berman SOCIALLY
RESPONSIVE Portfolio each will engage in an orderly disposition of the
downgraded securities. Each other Portfolio (except Neuberger Berman
INTERNATIONAL Portfolio) will engage in an orderly disposition of the downgraded
securities to the extent necessary to ensure that the Portfolio's holdings of
securities rated below investment grade and Comparable Unrated Securities will
not exceed 5% of its net assets (15% in the case of Neuberger Berman PARTNERS,
CENTURY and REGENCY Portfolios). NB Management will make a determination as to
whether Neuberger Berman INTERNATIONAL Portfolio should dispose of the
downgraded securities.

COMMERCIAL PAPER (ALL PORTFOLIOS). Commercial paper is a short-term
debt security issued by a corporation or bank, usually for purposes such as
financing current operations. Each Portfolio may invest in commercial paper that
cannot be resold to the public without an effective registration statement under
the 1933 Act. While restricted commercial paper normally is deemed illiquid, NB
Management may in certain cases determine that such paper is liquid, pursuant to
guidelines established by the Portfolio Trustees.

POLICIES AND LIMITATIONS. The Portfolios may invest in commercial
paper only if it has received the highest rating from S&P (A-1) or Moody's (P-1)
or is deemed by NB Management to be of comparable quality. Neuberger Berman

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INTERNATIONAL Portfolio may invest in such commercial paper as a defensive
measure, to increase liquidity, or as needed for segregated accounts.

ZERO COUPON SECURITIES (NEUBERGER BERMAN PARTNERS, MILLENNIUM,
SOCIALLY RESPONSIVE, CENTURY AND REGENCY PORTFOLIOS). Each of these Portfolios
may invest in zero coupon securities, which are debt obligations that do not
entitle the holder to any periodic payment of interest prior to maturity or that
specify a future date when the securities begin to pay current interest. Zero
coupon securities are issued and traded at a discount from their face amount or
par value. This discount varies depending on prevailing interest rates, the time
remaining until cash payments begin, the liquidity of the security, and the
perceived credit quality of the issuer.

The discount on zero coupon securities ("original issue discount")
must be taken into income ratably by each such Portfolio prior to the receipt of
any actual payments. Because its corresponding Fund must distribute
substantially all of its net income (including its share of the Portfolio's
accrued original issue discount) to its shareholders each year for income and
excise tax purposes, each such Portfolio may have to dispose of portfolio
securities under disadvantageous circumstances to generate cash, or may be
required to borrow, to satisfy its corresponding Fund's distribution
requirements. See "Additional Tax Information."

The market prices of zero coupon securities generally are more
volatile than the prices of securities that pay interest periodically. Zero
coupon securities are likely to respond to changes in interest rates to a
greater degree than other types of debt securities having a similar maturity and
credit quality.

CONVERTIBLE SECURITIES (ALL PORTFOLIOS). Each Portfolio may invest
in convertible securities. A convertible security is a bond, debenture, note,
preferred stock, or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula. Convertible
securities generally have features of both common stocks and debt securities. A
convertible security entitles the holder to receive the interest paid or accrued
on debt or the dividend paid on preferred stock until the convertible security
matures or is redeemed, converted or exchanged. Before conversion, such
securities ordinarily provide a stream of income with generally higher yields
than common stocks of the same or similar issuers, but lower than the yield on
non-convertible debt. Convertible securities are usually subordinated to
comparable-tier non-convertible securities but rank senior to common stock in a
corporation's capital structure. The value of a convertible security is a
function of (1) its yield in comparison to the yields of other securities of
comparable maturity and quality that do not have a conversion privilege and (2)
its worth if converted into the underlying common stock.

The price of a convertible security often reflects variations in the
price of the underlying common stock in a way that non-convertible debt may not.
Convertible securities are typically issued by smaller capitalization companies
whose stock prices may be volatile. A convertible security may be subject to
redemption at the option of the issuer at a price established in the security's
governing instrument. If a convertible security held by a Portfolio is called

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for redemption, the Portfolio will be required to convert it into the underlying
common stock, sell it to a third party or permit the issuer to redeem the
security. Any of these actions could have an adverse effect on the Portfolio's
and its corresponding Fund's ability to achieve their investment objectives.

POLICIES AND LIMITATIONS. Neuberger Berman SOCIALLY RESPONSIVE
Portfolio may invest up to 20% of its net assets in convertible securities. The
Portfolio does not intend to purchase any convertible securities that are not
investment grade. Convertible debt securities are subject to each Portfolio's
investment policies and limitations concerning fixed income securities.

PREFERRED STOCK (ALL PORTFOLIOS). Each Portfolio may invest in
preferred stock. Unlike interest payments on debt securities, dividends on
preferred stock are generally payable at the discretion of the issuer's board of
directors. Preferred shareholders may have certain rights if dividends are not
paid but generally have no legal recourse against the issuer. Shareholders may
suffer a loss of value if dividends are not paid. The market prices of preferred
stocks are generally more sensitive to changes in the issuer's creditworthiness
than are the prices of debt securities.

SWAP AGREEMENTS (NEUBERGER BERMAN INTERNATIONAL AND CENTURY
PORTFOLIOS). Each of these Portfolios may enter into swap agreements to manage
or gain exposure to particular types of investments (including equity securities
or indices of equity securities in which the Portfolio otherwise could not
invest efficiently). In a swap agreement, one party agrees to make regular
payments equal to a floating rate on a specified amount in exchange for payments
equal to a fixed rate, or a different floating rate, on the same amount for a
specified period.

Swap agreements may involve leverage and may be highly volatile;
depending on how they are used, they may have a considerable impact on the
Portfolio's performance. The risks of swap agreements depend upon the other
party's creditworthiness and ability to perform, as well as the Portfolio's
ability to terminate its swap agreements or reduce its exposure through
offsetting transactions. Swap agreements may be illiquid. The swap market is
relatively new and is largely unregulated.

POLICIES AND LIMITATIONS. In accordance with SEC staff requirements,
each of Neuberger Berman INTERNATIONAL and CENTURY Portfolios will segregate
cash or appropriate liquid securities in an amount equal to its obligations
under swap agreements; when an agreement provides for netting of the payments by
the two parties, the Portfolio will segregate only the amount of its net
obligation, if any.

JAPANESE INVESTMENTS (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). All
of the Portfolios may invest in foreign securities, including securities of
Japanese issuers. From time to time, Neuberger Berman INTERNATIONAL Portfolio
may invest a significant portion of its assets in securities of Japanese
issuers. The performance of the Portfolio may therefore be significantly
affected by events influencing the Japanese economy and the exchange rate
between the Japanese yen and the U.S. dollar. Japan has experienced a severe
recession, including a decline in real estate values and other events that
adversely affected the balance sheets of many financial institutions and
indicate that there may be structural weaknesses in the Japanese financial
system. The effects of this economic downturn may be felt for a considerable
period and are being exacerbated by the currency exchange rate. Japan is heavily
dependent on foreign oil. Japan is located in a seismically active area, and
severe earthquakes may damage important elements of the country's
infrastructure. Japan's economic prospects may be affected by the political and

45
<PAGE>

military situations of its near neighbors, notably North and South Korea, China
and Russia.

OTHER INVESTMENT COMPANIES. Neuberger Berman INTERNATIONAL Portfolio
may invest in the shares of other investment companies. Such investment may be
the most practical or only manner in which the Portfolio can participate in
certain foreign markets because of the expenses involved or because other
vehicles for investing in those countries may not be available at the time the
Portfolio is ready to make an investment. Each Portfolio at times may invest in
instruments structured as investment companies to gain exposure to the
performance of a recognized securities index, such as the S&P 500 Index.

As a shareholder in an investment company, a Portfolio would bear
its pro rata share of that investment company's expenses. Investment in other
funds may involve the payment of substantial premiums above the value of such
issuer's portfolio securities. The Portfolios do not intend to invest in such
funds unless, in the judgment of NB Management, the potential benefits of such
investment justify the payment of any applicable premium or sales charge.

POLICIES AND LIMITATIONS. Each Portfolio's investment in such
securities is limited to (i) 3% of the total voting stock of any one investment
company, (ii) 5% of the Portfolio's total assets with respect to any one
investment company and (iii) 10% of the Portfolio's total assets in the
aggregate.

INDEXED SECURITIES (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO).
Neuberger Berman INTERNATIONAL Portfolio may invest in indexed securities whose
values are linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short- to intermediate-term
fixed income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. The
value of indexed securities may increase or decrease if the underlying
instrument appreciates, and they may have return characteristics similar to
direct investment in the underlying instrument. Indexed securities may be more
volatile than the underlying instrument itself.

NEUBERGER BERMAN FOCUS PORTFOLIO - DESCRIPTION OF ECONOMIC SECTORS.

Neuberger Berman FOCUS Portfolio seeks to achieve its investment
objective by investing principally in common stocks in the following thirteen
multi-industry economic sectors, normally making at least 90% of its investments
in not more than six such sectors:

(1) AUTOS AND HOUSING SECTOR: Companies engaged in design,
production, or sale of automobiles, automobile parts, mobile homes, or related
products ("automobile industries") or design, construction, renovation, or
refurbishing of residential dwellings. The value of securities of companies in
the automobile industries is affected by, among other things, foreign
competition, the level of consumer confidence and consumer debt, and installment
loan rates. The housing construction industry may be affected by the level of
consumer confidence and consumer debt, mortgage rates, tax laws, and the
inflation outlook.

46
<PAGE>

(2) CONSUMER GOODS AND SERVICES SECTOR: Companies engaged in
providing consumer goods or services, including design, processing, production,
sale, or storage of packaged, canned, bottled, or frozen foods and beverages and
design, production, or sale of home furnishings, appliances, clothing,
accessories, cosmetics, or perfumes. Certain of these companies are subject to
government regulation affecting the use of various food additives and production
methods, which could affect profitability. Also, the success of food- and
fashion-related products may be strongly affected by fads, marketing campaigns,
health concerns, and other factors affecting supply and demand.

(3) DEFENSE AND AEROSPACE SECTOR: Companies engaged in research,
manufacture, or sale of products or services related to the defense or aerospace
industries, including air transport; data processing or computer-related
services; communications systems; military weapons or transportation; general
aviation equipment, missiles, space launch vehicles, or spacecraft; machinery
for guidance, propulsion, or control of flight vehicles; and airborne or
ground-based equipment essential to the test, operation, or maintenance of
flight vehicles. Because these companies rely largely on U.S. (and foreign)
governmental demand for their products and services, their financial conditions
are heavily influenced by defense spending policies.

(4) ENERGY SECTOR: Companies involved in the production,
transmission, or marketing of energy from oil, gas, or coal, as well as nuclear,
geothermal, oil shale, or solar sources of energy (but excluding public utility
companies). Also included are companies that provide component products or
services for those activities. The value of these companies' securities varies
based on the price and supply of energy fuels and may be affected by
international politics, energy conservation, the success of exploration
projects, environmental considerations, and the tax and other regulatory
policies of various governments.

(5) FINANCIAL SERVICES SECTOR: Companies providing financial
services to consumers or industry, including commercial banks and savings and
loan associations, consumer and industrial finance companies, securities
brokerage companies, leasing companies, and insurance companies. These companies
are subject to extensive governmental regulations. Their profitability may
fluctuate significantly as a result of volatile interest rates, concerns about
particular banks and savings institutions, and general economic conditions.

(6) HEALTH CARE SECTOR: Companies engaged in design, manufacture, or
sale of products or services used in connection with the provision of health
care, including pharmaceutical companies; firms that design, manufacture, sell,
or supply medical, dental, or optical products, hardware, or services; companies
involved in biotechnology, medical diagnostic, or biochemical research and
development; and companies that operate health care facilities. Many of these
companies are subject to government regulation and potential health care
reforms, which could affect the price and availability of their products and
services. Also, products and services of these companies could quickly become
obsolete.

(7) HEAVY INDUSTRY SECTOR: Companies engaged in research,
development, manufacture, or marketing of products, processes, or services
related to the agriculture, chemicals, containers, forest products, non-ferrous
metals, steel, or pollution control industries, including synthetic and natural

47
<PAGE>

materials (for example, chemicals, plastics, fertilizers, gases, fibers,
flavorings, or fragrances), paper, wood products, steel, and cement. Certain of
these companies are subject to state and federal regulation, which could require
alteration or cessation of production of a product, payment of fines, or
cleaning of a disposal site. Furthermore, because some of the materials and
processes used by these companies involve hazardous components, there are
additional risks associated with their production, handling, and disposal. The
risk of product obsolescence also is present.

(8) MACHINERY AND EQUIPMENT SECTOR: Companies engaged in the
research, development, or manufacture of products, processes, or services
relating to electrical equipment, machinery, pollution control, or construction
services, including transformers, motors, turbines, hand tools, earth-moving
equipment, and waste disposal services. The profitability of most of these
companies may fluctuate significantly in response to capital spending and
general economic conditions. As is the case for the heavy industry sector, there
are risks associated with the production, handling, and disposal of materials
and processes that involve hazardous components and the risk of product
obsolescence.

(9) MEDIA AND ENTERTAINMENT SECTOR: Companies engaged in design,
production, or distribution of goods or services for the media industries
(including television or radio broadcasting or manufacturing, publishing,
recordings and musical instruments, motion pictures, and photography) and the
entertainment industries (including sports arenas, amusement and theme parks,
gaming casinos, sporting goods, camping and recreational equipment, toys and
games, travel-related services, hotels and motels, and fast food and other
restaurants). Many products produced by companies in this sector -- for example,
video and electronic games -- may become obsolete quickly. Additionally,
companies engaged in television and radio broadcast are subject to government
regulation.

(10) RETAILING SECTOR: Companies engaged in retail distribution of
home furnishings, food products, clothing, pharmaceuticals, leisure products, or
other consumer goods, including department stores, supermarkets, and retail
chains specializing in particular items such as shoes, toys, or pharmaceuticals.
The value of these companies' securities fluctuates based on consumer spending
patterns, which depend on inflation and interest rates, the level of consumer
debt, and seasonal shopping habits. The success or failure of a company in this
highly competitive sector depends on its ability to predict rapidly changing
consumer tastes.

(11) TECHNOLOGY SECTOR: Companies that are expected to have or
develop products, processes, or services that will provide, or will benefit
significantly from, technological advances and improvements or future automation
trends, including semiconductors, computers and peripheral equipment, scientific
instruments, computer software, telecommunications equipment, and electronic
components, instruments, and systems. These companies are sensitive to foreign
competition and import tariffs. Also, many of their products may become obsolete
quickly.

(12) TRANSPORTATION SECTOR: Companies involved in providing
transportation of people and products, including airlines, railroads, and
trucking firms. Revenues of these companies are affected by fluctuations in fuel
prices and government regulation of fares.

48
<PAGE>

(13) UTILITIES SECTOR: Companies in the public utilities industry
and companies that derive a substantial majority of their revenues through
supplying public utilities (including companies engaged in the manufacture,
production, generation, transmission, or sale of gas and electric energy) and
that provide telephone, telegraph, satellite, microwave, and other communication
facilities to the public. The gas and electric public utilities industries are
subject to various uncertainties, including the outcome of political issues
concerning the environment, prices of fuel for electric generation, availability
of natural gas, and risks associated with the construction and operation of
nuclear power facilities.

NEUBERGER BERMAN SOCIALLY RESPONSIVE PORTFOLIO - DESCRIPTION OF SOCIAL POLICY
- -----------------------------------------------------------------------------

BACKGROUND INFORMATION ON SOCIALLY RESPONSIVE INVESTING

In an era when many people are concerned about the relationship
between business and society, socially responsive investing ("SRI") is a
mechanism for assuring that investors' social values are reflected in their
investment decisions. As such, SRI is a direct descendent of the successful
effort begun in the early 1970's to encourage companies to divest their South
African operations and subscribe to the Sullivan Principles. Today, a growing
number of individuals and institutions are applying similar strategies to a
broad range of problems.

Although there are many strategies available to the socially
responsive investor, including proxy activism, below-market loans to community
projects, and venture capital, the SRI strategies used by the Portfolio
generally fall into two categories:

AVOIDANCE INVESTING. Most socially responsive investors seek to
avoid holding securities of companies whose products or policies are seen as
being at odds with the social good. The most common exclusions historically have
involved tobacco companies and weapons manufacturers.

LEADERSHIP INVESTING. A growing number of investors actively look
for companies with progressive programs that are exemplary or companies which
make it their business to try to solve some of the problems of today's society.

The marriage of social and financial objectives would not have
surprised Adam Smith, who was, first and foremost, a moral philosopher. THE
WEALTH OF NATIONS is firmly rooted in the Enlightenment conviction that the
purpose of capital is the social good and the related belief that idle capital
is both wasteful and unethical. But, what very likely would have surprised Smith
is the sheer complexity of the social issues we face today and the diversity of
our attitudes toward the social good. War and peace, race and gender, the
distribution of wealth, and the conservation of natural resources -- the social
agenda is long and compelling. It is also something about which reasonable
people differ. What should society's priorities be? What can and should be done
about them? And what is the role of business in addressing them? Since
corporations are on the front lines of so many key issues in today's world, a
growing number of investors feel that a corporation's role cannot be ignored.
This is true of some of the most important issues of the day such as equal
opportunity and the environment.

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<PAGE>

THE SOCIALLY RESPONSIVE DATABASE

Neuberger Berman, LLC ("Neuberger Berman"), the Portfolio's
sub-adviser, maintains a database of information about the social impact of the
companies it follows. NB Management uses the database to evaluate social issues
after it deems a stock acceptable from a financial standpoint for acquisition by
the Portfolio. The aim of the database is to be as comprehensive as possible,
given that much of the information concerning corporate responsibility comes
from subjective sources. Information for the database is gathered by Neuberger
Berman in many categories and then analyzed by NB Management in the following
six categories of corporate responsibility:

WORKPLACE DIVERSITY AND EMPLOYMENT. NB Management looks for
companies that show leadership in areas such as employee training and promotion
policies and benefits, such as flextime, generous profit sharing, and parental
leave. NB Management looks for active programs to promote women and minorities
and takes into account their representation among the officers of an issuer and
members of its board of directors. As a basis for exclusion, NB Management looks
for Equal Employment Opportunity Act infractions and Occupational Safety and
Health Act violations; examines each case in terms of severity, frequency, and
time elapsed since the incident; and considers actions taken by the company
since the violation. NB Management also monitors companies' progress and
attitudes toward these issues.

ENVIRONMENT. A company's impact on the environment depends largely
on the industry. Therefore, NB Management examines a company's environmental
record vis-a-vis those of its peers in the industry. All companies operating in
an industry with inherently high environmental risks are likely to have had
problems in such areas as toxic chemical emissions, federal and state fines, and
Superfund sites. For these companies, NB Management examines their problems in
terms of severity, frequency, and elapsed time. NB Management then balances the
record against whatever leadership the company may have demonstrated in terms of
environmental policies, procedures, and practices. NB Management defines an
environmental leadership company as one that puts into place strong affirmative
programs to minimize emissions, promote safety, reduce waste at the source,
insure energy conservation, protect natural resources, and incorporate recycling
into its processes and products. NB Management looks for the commitment and
active involvement of senior management in all these areas. Several major
manufacturers which still produce substantial amounts of pollution are among the
leaders in developing outstanding waste source reduction and remediation
programs.

PRODUCT. NB Management considers company announcements, press
reports, and public interest publications relating to the health, safety,
quality, labeling, advertising, and promotion of both consumer and industrial
products. NB Management takes note of companies with a strong commitment to
quality and with marketing practices which are ethical and consumer-friendly. NB
Management pays particular attention to companies whose products and services
promote progressive solutions to social problems.

PUBLIC HEALTH. NB Management measures the participation of companies
in such industries and markets as alcohol, tobacco, gambling and nuclear power.

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<PAGE>

NB Management also considers the impact of products and marketing activities
related to those products on nutritional and other health concerns, both
domestically and in foreign markets.

WEAPONS. NB Management keeps track of domestic military sales and,
whenever possible, foreign military sales and categorizes them as nuclear
weapons related, other weapons related, and non-weapon military supplies, such
as micro-chip manufacturers and companies that make uniforms for military
personnel.

CORPORATE CITIZENSHIP. NB Management gathers information about a
company's participation in community affairs, its policies with respect to
charitable contributions, and its support of education and the arts. NB
Management looks for companies with a focus, dealing with issues not just by
making financial contributions, but also by asking the questions: What can we do
to help? What do we have to offer? Volunteerism, high-school mentoring programs,
scholarships and grants, and in-kind donations to specific groups are just a few
ways that companies have responded to these questions.

IMPLEMENTATION OF SOCIAL POLICY

Companies deemed acceptable by NB Management from a financial
standpoint are analyzed using Neuberger Berman's database. The companies are
then evaluated by the portfolio manager to determine if the companies' policies,
practices, products, and services withstand scrutiny in the following major
areas of concern: the environment and workplace diversity and employment.
Companies are then further evaluated to determine their track record in issues
and areas of concern such as public health, weapons, product, and corporate
citizenship.

The issues and areas of concern that are tracked lend themselves to
objective analysis in varying degrees. Few, however, can be resolved entirely on
the basis of scientifically demonstrable facts. Moreover, a substantial amount
of important information comes from sources that do not purport to be
disinterested. Thus, the quality and usefulness of the information in the
database depend on Neuberger Berman's ability to tap a wide variety of sources
and on the experience and judgment of the people at NB Management who interpret
the information.

In applying the information in the database to stock selection for
the Portfolio, NB Management considers several factors. NB Management examines
the severity and frequency of various infractions, as well as the time elapsed
since their occurrence. NB Management also takes into account any remedial
action which has been taken by the company relating to these infractions. NB
Management notes any quality innovations made by the company in its effort to
create positive change and looks at the company's overall approach to social
issues.

PERFORMANCE INFORMATION

Each Fund's performance figures are based on historical results and
are not intended to indicate future performance. The share price and total
return of each Fund will vary, and an investment in a Fund, when redeemed, may
be worth more or less than an investor's original cost.

TOTAL RETURN COMPUTATIONS
- -------------------------

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<PAGE>

Each Fund may advertise certain total return information. An average
annual compounded rate of return ("T") may be computed by using the redeemable
value at the end of a specified period ("ERV") of a hypothetical initial
investment of $1,000 ("P") over a period of time ("n") according to the formula:

P(1+T)(n) = ERV

Average annual total return smoothes out year-to-year variations in
performance and, in that respect, differs from actual year-to-year results. As
of the date of this SAI, Neuberger Berman REGENCY and CENTURY Funds had been in
existence only a very short time and had no meaningful performance history.

Average Annual Total Returns
Fund Periods Ended 8/31/1999
ONE YEAR FIVE YEARS TEN YEARS PERIOD FROM INCEPTION
-------- ---------- --------- ---------------------
MANHATTAN +37.40% +15.72% +12.24% +16.81%

GENESIS +19.20% +15.19% +11.41% +13.10%

FOCUS +38.09% +16.77% +14.38% +12.16%

GUARDIAN +26.12% +12.75% +12.40% +12.85%

PARTNERS +26.08% +18.22% +14.06% +17.63%

SOCIALLY +37.09% +19.21% N/A +17.60%
RESPONSIVE

MILLENNIUM N/A N/A N/A +94.90%*

INTERNATIONAL +21.09% +10.30% N/A +10.81%

*Gross Return.

Prior to January 5, 1989, the investment policies of Neuberger
Berman FOCUS Fund required that at least 80% of its investments normally be in
energy-related investments; prior to November 1, 1991, those investment policies
required that at least 25% of its investments normally be in the energy sector.
Neuberger Berman FOCUS Fund may be required, under applicable law, to include
information reflecting performance and expenses for periods before November 1,
1991, in its advertisements, sales literature, financial statements, and other
documents filed with the SEC and/or provided to current and prospective
shareholders. Investors should be aware that such information may not
necessarily reflect the level of performance and expenses that would have been
experienced had the Fund's current investment policies been in effect.

NB Management may from time to time waive a portion of its fees due
from any Fund or Portfolio or reimburse a Fund or Portfolio for a portion of its
expenses. Such action has the effect of increasing total return. Actual
reimbursements and waivers are described in the Prospectus and in "Investment
Management and Administration Services" below.

COMPARATIVE INFORMATION
- -----------------------

52
<PAGE>

From time to time each Fund's performance may be compared with:

(1) data (that may be expressed as rankings or ratings) published by
independent services or publications (including newspapers, newsletters,
and financial periodicals) that monitor the performance of mutual funds,
such as Lipper Analytical Services, Inc., C.D.A. Investment Technologies,
Inc., Wiesenberger Investment Companies Service, Investment Company Data
Inc., Morningstar, Inc., Micropal Incorporated, and quarterly mutual fund
rankings by Money, Fortune, Forbes, Business Week, Personal Investor, and
U.S. News & World Report magazines, The Wall Street Journal, The New York
Times, Kiplinger's Personal Finance, and Barron's Newspaper, or

(2) recognized stock and other indices, such as the S&P 500
Composite Stock Price Index ("S&P 500 Index"), S&P Small Cap 600 Index
("S&P 600 Index"), S&P Mid Cap 400 Index ("S&P 400 Index"), Russell 2000
Stock Index, Russell MidcapTM Index, Dow Jones Industrial Average
("DJIA"), Wilshire 1750 Index, Nasdaq Composite Index, Montgomery
Securities Growth Stock Index, Value Line Index, U.S. Department of Labor
Consumer Price Index ("Consumer Price Index"), College Board Annual Survey
of Colleges, Kanon Bloch's Family Performance Index, the Barra Growth
Index, the Barra Value Index, the EAFE(R) Index, the Financial Times World
XUS Index, and various other domestic, international, and global indices.
The S&P 500 Index is a broad index of common stock prices, while the DJIA
represents a narrower segment of industrial companies. The S&P 600 Index
includes stocks that range in market value from $35 million to $6.1
billion, with an average of $572 million. The S&P 400 Index measures
mid-sized companies that have an average market capitalization of $2.1
billion. The EAFE(R) Index is an unmanaged index of common stock prices of
more than 1,000 companies from Europe, Australia, and the Far East
translated into U.S. dollars. The Financial Times World XUS Index is an
index of 24 international markets, excluding the U.S. market. Each assumes
reinvestment of distributions and is calculated without regard to tax
consequences or the costs of investing. Each Portfolio may invest in
different types of securities from those included in some of the above
indices.

Neuberger Berman SOCIALLY RESPONSIVE Fund's performance may also be
compared to various socially responsive indices. These include The Domini Social
Index and the indices developed by the quantitative department of Prudential
Securities, such as that department's Large and Mid-Cap portfolio indices for
various breakdowns ("Sin" Stock Free, Cigarette-Stock Free, S&P Composite,
etc.).

Evaluations of the Funds' performance, their total returns, and
comparisons may be used in advertisements and in information furnished to
current and prospective shareholders (collectively, "Advertisements"). The Funds
may also be compared to individual asset classes such as common stocks,
small-cap stocks, or Treasury bonds, based on information supplied by Ibbotson
and Sinquefield.

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<PAGE>

OTHER PERFORMANCE INFORMATION
- -----------------------------

From time to time, information about a Portfolio's portfolio
allocation and holdings as of a particular date may be included in
Advertisements for the corresponding Fund. This information may include the
Portfolio's portfolio diversification by asset type or, in the case of Neuberger
Berman SOCIALLY RESPONSIVE Portfolio, by the social characteristics of companies
owned. Information used in Advertisements may include statements or
illustrations relating to the appropriateness of types of securities and/or
mutual funds that may be employed to meet specific financial goals, such as (1)
funding retirement, (2) paying for children's education, and (3) financially
supporting aging parents.

NB Management believes that many of its common stock funds may be
attractive investment vehicles for conservative investors who are interested in
long-term appreciation from stock investments, but who have a moderate tolerance
for risk. Such investors may include, for example, individuals (1) planning for
or facing retirement, (2) receiving or expecting to receive lump-sum
distributions from individual retirement accounts ("IRAs"), self-employed
individual retirement plans ("Keogh plans"), or other retirement plans, (3)
anticipating rollovers of CDs or IRAs, Keogh plans, or other retirement plans,
and (4) receiving a significant amount of money as a result of inheritance, sale
of a business, or termination of employment.

Investors who may find Neuberger Berman PARTNERS Fund, Neuberger
Berman GUARDIAN Fund, Neuberger Berman FOCUS Fund, Neuberger Berman REGENCY
Fund, or Neuberger Berman CENTURY Fund to be an attractive investment vehicle
also include parents saving to meet college costs for their children. For
instance, the cost of a college education is rapidly approaching the cost of the
average family home. Estimates of total four-year costs (tuition, room and
board, books and other expenses) for students starting college in various years
may be included in Advertisements, based on the College Board Annual Survey of
Colleges.

Information relating to inflation and its effects on the dollar also
may be included in Advertisements. For example, after ten years, the purchasing
power of $25,000 would shrink to $16,621, $14,968, $13,465, and $12,100,
respectively, if the annual rates of inflation during that period were 4%, 5%,
6%, and 7%, respectively. (To calculate the purchasing power, the value at the
end of each year is reduced by the inflation rate for the ten-year period.)

Information regarding the effects of automatic investing and
systematic withdrawal plans, investing at market highs and/or lows, and
investing early versus late for retirement plans also may be included in
Advertisements, if appropriate.

CERTAIN RISK CONSIDERATIONS

Although each Portfolio seeks to reduce risk by investing in a
diversified portfolio of securities, diversification does not eliminate all
risk. There can, of course, be no assurance that any Portfolio will achieve its
investment objective.

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TRUSTEES AND OFFICERS

The following table sets forth information concerning the trustees
and officers of the Trusts, including their addresses and principal business
experience during the past five years. Some persons named as trustees and
officers also serve in similar capacities for other funds and their
corresponding portfolios administered or managed by NB Management and Neuberger
Berman.

THE TRUST AND EQUITY MANAGERS TRUST:
- -----------------------------------

Positions Held
With the Trust and Equity
Name, Age, and Address(1) Managers Trust Principal Occupation(s)(2)
- ---------------------------- ---------------- --------------------------
<S> <C> <C>
Claudia A. Brandon (43) Secretary of each Employee of Neuberger Berman
Trust since 1999; Vice President of
NB Management from 1986 to 1999;
Secretary of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.

Faith Colish (64) Trustee of each Trust Attorney at Law, Faith Colish, A
63 Wall Street Professional Corporation
24th Floor
New York, NY 10005

Stacy Cooper-Shugrue (37) Assistant Secretary of Employee of Neuberger Berman
each Trust since 1999; Assistant Vice President
of NB Management from 1993 to 1999;
Assistant Secretary of nine other
mutual funds for which NB
Management acts as investment
manager or administrator.

Barbara DiGiorgio (41) Assistant Treasurer of Employee of NB Management; Assistant
each Trust Vice President of NB Management from
1993 to 1999; Assistant Treasurer
since 1996 of nine other mutual funds
for which NB Management acts as investment
manager or administrator.

Michael M. Kassen* (47) President and Trustee of Executive Vice President, Chief
each Trust Investment Officer and Director of
Neuberger Berman, Inc. (holding
company); Executive Vice President,
Chief Investment Officer and Director
of NB Management; President and/or
Trustee of five other mutual funds for
which NB Management acts as
investment manager or administrator.

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<PAGE>

Positions Held
With the Trust and Equity
Name, Age, and Address(1) Managers Trust Principal Occupation(s)(2)
- ---------------------------- ---------------- --------------------------
<S> <C> <C>

Howard A. Mileaf (63) Trustee of each Trust Vice President and Special Counsel to
WHX Corporation WHX Corporation (holding company)
110 East 59th Street since 1992; Director of Kevlin
30th Floor Corporation (manufacturer of
New York, NY 10022 microwave and other products).

Edward I. O'Brien* (71) Trustee of each Trust Until 1993, President of the Securities
12 Woods Lane Industry Association ("SIA")
Scarsdale, NY 10583 (securities industry's representative in
government relations and regulatory
matters at the federal and state levels;
until November 1993, employee of the
SIA; Director of Legg Mason, Inc.

John T. Patterson, Jr. (72) Trustee of each Trust Retired. Formerly, President of
7082 Siena Court SOBRO (South Bronx Overall
Boca Raton, FL 33433 Economic Development Corporation).

John P. Rosenthal (67) Trustee of each Trust Senior Vice President of Burnham
Burhan Securities Inc. Securities Inc. (a registered broker-
Burnham Asset Management dealer) since 1991; Director, Cancer
Corp. Treatment Holdings, Inc.
1325 Avenue of the Americas
17th Floor
New York, NY 10019

Richard Russell (54) Treasurer and Principal Employee of NB Management since
Accounting Officer of 1993; Treasurer and Principal
each Trust Accounting Officer of nine other
mutual funds for which NB
Management acts as investment
manager or administrator

Cornelius T. Ryan (68) Trustee of each Trust General Partner of Oxford Partners
Oxford Bioscience Partners and Oxford Bioscience Partners
315 Post Road West (venture capital partnerships) and
Westport, CT 06880 President of Oxford Venture
Corporation; Director of Capital Cash
Management Trust (money market
fund) and Prime Cash Fund.

56
<PAGE>

Positions Held
With the Trust and Equity
Name, Age, and Address(1) Managers Trust Principal Occupation(s)(2)
- ---------------------------- ---------------- --------------------------
<S> <C> <C>

Gustave H. Shubert (71) Trustee of each Trust Senior Fellow/Corporate Advisor and
13838 Sunset Boulevard Advisory Trustee of Rand (a non-
Pacific Palisades, CA 90272 profit public interest research
institution) since 1989; Honorary
Member of the Board of Overseers of
the Institute for Civil Justice, the
Policy Advisory Committee of the
Clinical Scholars Program at the
University of California, the American
Association for the Advancement of
Science, the Counsel on Foreign
Relations, and the Institute for
Strategic Studies (London); advisor to
the Program Evaluation and
Methodology Division of the U.S.
General Accounting Office; formerly
Senior Vice President and Trustee of
Rand.

Daniel J. Sullivan (60) Vice President of Senior Vice President of NB
Trust Management since 1992; Vice
President of nine other mutual funds
for which NB Management acts as
investment manager or administrator.

57
<PAGE>

Positions Held
With the Trust and Equity
Name, Age, and Address(1) Managers Trust Principal Occupation(s)(2)
- ---------------------------- ---------------- --------------------------
<S> <C> <C>

Peter E. Sundman* (40) Chairman of the Board Executive Vice President and
Chief Executive Officer Director of Neuberger Berman, Inc.
and Trustee of each Trust (holding company); President and
Director of NB Management;
Principal of Neuberger Berman from
1997 to 1999; Chairman of the
Board, Chief Executive Officer and
Trustee of five other mutual funds for
which NB Management acts as
investment manager or administrator;
President and Chief Executive
Officer of three other mutual funds
for which NB Management acts as
investment manager or adminstrator;
President and Principal Executive
Officer of one other mutual fund for
which NB Management acts as
investment adviser or administrator.

Michael J. Weiner (53) Vice President and Principal of Neuberger Berman from
Prinicpal Financial 1998-99; Senior Vice President of NB
Officer of each Trust Management since 1992; Treasurer of
NB Management from 1992 to 1996; Vice
President and Principal Financial
Officer of nine other mutual funds
for which NB Management acts as
investment manager or administrator.

Celeste Wischerth (39) Assistant Treasurer of Employee of NB Management;
each Trust Assistant Treasurer since 1996 of nine
other mutual funds for which NB
Management acts as investment
manager or administrator.
</TABLE>

<TABLE>
<CAPTION>
GLOBAL MANAGERS TRUST:
- ---------------------

Positions Held with
Name, Age, and Global
Address(1) Managers Trust Principal Occupation(s)(2)
- -------------- -------------- -----------------------
<S> <C> <C>
Claudia A. Brandon (43) Secretary (See above)

58
<PAGE>

Positions Held with
Name, Age, and Global
ADDRESS(1) MANAGERS TRUST PRINCIPAL OCCUPATION(S)(2)
- -------------- -------------- -----------------------
<S> <C> <C>
Stacy Cooper-Shugrue (37) Assistant Secretary (See above)

Barbara DiGiorgio (41) Assistant Treasurer (See above)

Jacqueline Henning (57) Assistant Treasurer Managing Director, State Street
Cayman Trust Co., Ltd. Since
1994; Assistant Director,
Morgan Grenfell, 1993-94;
Bank of Nova Scotia Trust Co.
(Cayman) Ltd., Managing
Director, 1988-93.

Michael M. Kassen* (47) President (See above)

Lenore Joan McCabe (38) Assistant Secretary Operations Supervisor, State
Street Cayman Trust Co., Ltd.;
Project Manager, State Street
Canada, Inc., 1992-94.

Howard A. Mileaf (63) Trustee (See above)
WHX Corporation
110 East 59th Street
30th Floor
New York, NY 10022

John T. Patterson, Jr. (72) Trustee (See above)
7082 Siena Court
Boca Raton, FL 33433

John P. Rosenthal (67) Trustee (See above)
Burnham Securities Inc.
Burnham Asset Management Corp.
1325 Avenue of the Americas
17th Floor
New York, NY 10019

Richard Russell (54) Treasurer and Principal (See above)
Accounting Officer

Daniel J. Sullivan (60) Vice President (See above)

59
<PAGE>

Positions Held with
Name, Age, and Global
ADDRESS(1) MANAGERS TRUST PRINCIPAL OCCUPATION(S)(2)
- -------------- -------------- -----------------------
<S> <C> <C>

Peter E. Sundman* (40) Chairman of the Board (See above)
Chief Executive Officer
and Trustee

Michael J. Weiner (53) Vice President and (See above)
Principal Financial officer

Celeste Wischerth (39) Assistant Treasurer (See above)
</TABLE>

- --------------------

(1) Unless otherwise indicated, the business address of each listed person is
605 Third Avenue, New York, New York 10158.

(2) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.

* Indicates a trustee who is an "interested person" within the meaning of
the 1940 Act. Mr. Sundman and Mr. Kassen are interested persons of each Trust by
virtue of the fact that they are officers and/or directors of NB Management and
Managing Directors of Neuberger Berman. Mr. O'Brien is an interested person of
the Trust and Equity Managers Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Portfolios and other funds for which NB
Management serves as investment manager.

The Trust's Trust Instrument and each Managers Trust's Declaration
of Trust provide that each such Trust will indemnify its trustees and officers
against liabilities and expenses reasonably incurred in connection with
litigation in which they may be involved because of their offices with the
Trust, unless it is adjudicated that they (a) engaged in bad faith, willful
misfeasance, gross negligence, or reckless disregard of the duties involved in
the conduct of their offices, or (b) did not act in good faith in the reasonable
belief that their action was in the best interest of the Trust. In the case of
settlement, such indemnification will not be provided unless it has been
determined (by a court or other body approving the settlement or other
disposition, by a majority of disinterested trustees based upon a review of
readily available facts, or in a written opinion of independent counsel) that
such officers or trustees have not engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties.

The following table sets forth information concerning the
compensation of the trustees of the Trust. None of the Neuberger Berman Funds
has any retirement plan for its trustees.

60
<PAGE>

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/99

Total Compensation from
Aggregate Investment Companies in the
Compensation Neuberger Berman
Name and Position with the Trust from the Trust Fund Complex Paid to Trustees
- ------------------------------- -------------- -----------------------------

Faith Colish $21,602 $96,500
Trustee (5 other investment
companies)
Stanley Egener* $ 0 $ 0
Chairman of the Board, Chief (9 other investment
Executive Officer, and Trustee companies)

Howard A. Mileaf $22,433 $64,250
Trustee (4 other investment
companies)

Edward I. O'Brien $23,069 $61,750
Trustee (3 other investment
companies)

John T. Patterson, Jr. $23,341 $66,500
Trustee (4 other investment
companies)

John P. Rosenthal $22,429 $64,250
Trustee (4 other investment
companies)

Cornelius T. Ryan $19,771 $52,750
Trustee (3 other investment
companies)

Gustave H. Shubert $22,251 $59,500
Trustee (3 other investment
companies)

Lawrence Zicklin* $ 0 $ 0
President and Trustee (5 other investment
companies)
*Retired, October 27, 1999

At November 22, 1999, the trustees and officers of the Trust and the
corresponding Managers Trusts, as a group, owned beneficially or of record less
than 1% of the outstanding shares of each Fund.

61
<PAGE>

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

INVESTMENT MANAGER AND ADMINISTRATOR

Because all of the Funds' net investable assets are invested in
their corresponding Portfolios, the Funds do not need an investment manager. NB
Management serves as the investment manager to all the Portfolios (except
Neuberger Berman INTERNATIONAL Portfolio) pursuant to a management agreement
with Equity Managers Trust, dated as of August 2, 1993 ("EMT Management
Agreement").

The EMT Management Agreement was approved by the holders of the
interests in all the Portfolios (except Neuberger Berman SOCIALLY RESPONSIVE,
Neuberger Berman MILLENNIUM, Neuberger Berman REGENCY and Neuberger Berman
CENTURY Portfolios) on August 2, 1993, and by the holders of the interests in
Neuberger Berman SOCIALLY RESPONSIVE, Neuberger Berman MILLENNIUM, Neuberger
Berman REGENCY and Neuberger Berman CENTURY Portfolios on March 9, 1994, October
19, 1998, June 1, 1999 and December 1, 1999, respectively. Neuberger Berman
SOCIALLY RESPONSIVE, Neuberger Berman MILLENNIUM, Neuberger Berman REGENCY
Neuberger Berman and CENTURY Portfolios were authorized to become subject to the
EMT Management Agreement by vote of the Portfolio Trustees on October 20, 1993,
July 29, 1998, April 28, 1999, and July 29, 1999 respectively.

NB Management serves as the investment manager to Neuberger Berman
INTERNATIONAL Portfolio pursuant to a management agreement with Global Managers
Trust, dated as of November 1, 1995 ("GMT Management Agreement"). The GMT
Management Agreement was approved by the holders of the interests in Neuberger
Berman INTERNATIONAL Portfolio on October 26, 1995. That Portfolio was
authorized to become subject to the GMT Management Agreement by vote of the
Portfolio Trustees on August 8, 1995.

The EMT Management Agreement and GMT Management Agreement
("Management Agreements") provide, in substance, that NB Management will make
and implement investment decisions for the Portfolios in its discretion and will
continuously develop an investment program for the Portfolios' assets. The
Management Agreements permit NB Management to effect securities transactions on
behalf of each Portfolio through associated persons of NB Management. The
Management Agreements also specifically permit NB Management to compensate,
through higher commissions, brokers and dealers who provide investment research
and analysis to the Portfolios, although NB Management has no current plans to
pay a material amount of such compensation.

NB Management provides to each Portfolio, without separate cost,
office space, equipment, and facilities and the personnel necessary to perform
executive, administrative, and clerical functions. NB Management pays all
salaries, expenses, and fees of the officers, trustees, and employees of the
Managers Trusts who are officers, directors, or employees of NB Management. One
director of NB Management (who is also an officer of Neuberger Berman), who also
serves as an officer of NB Management, presently serves as a trustee and/or
officer of the Trusts. See "Trustees and Officers." Each Portfolio pays NB
Management a management fee based on the Portfolio's average daily net assets,
as described below.

62
<PAGE>

NB Management provides facilities, services, and personnel to each
Fund pursuant to an administration agreement with the Trust, dated May 1, 1995,
as amended on August 2, 1997 and January 1, 1999 ("Administration Agreement").
Neuberger Berman INTERNATIONAL Fund, Neuberger Berman MILLENNIUM Fund, Neuberger
Berman REGENCY Fund and Neuberger Berman CENTURY Fund were authorized to become
subject to the Administration Agreement by vote of each Fund's Trustees on
August 11, 1995, July 29, 1998, April 28, 1999, and July 29, 1999, respectively.
For such administrative services, each Fund pays NB Management a fee based on
the Fund's average daily net assets, as described below.

Under the Administration Agreement, NB Management also provides to
each Fund and its shareholders certain shareholder, shareholder-related, and
other services that are not furnished by the Fund's shareholder servicing agent.
NB Management provides the direct shareholder services specified in the
Administration Agreement, assists the shareholder servicing agent in the
development and implementation of specified programs and systems to enhance
overall shareholder servicing capabilities, solicits and gathers shareholder
proxies, performs services connected with the qualification of each Fund's
shares for sale in various states, and furnishes other services the parties
agree from time to time should be provided under the Administration Agreement.

From time to time, NB Management or a Fund may enter into
arrangements with registered broker-dealers or other third parties pursuant to
which it pays the broker-dealer or third party a per account fee or a fee based
on a percentage of the aggregate net asset value of Fund shares purchased by the
broker-dealer or third party on behalf of its customers, in payment for
administrative and other services rendered to such customers.

Because Neuberger Berman INTERNATIONAL Portfolio has its principal
offices in the Cayman Islands, Global Managers Trust has entered into an
Administrative Services Agreement with State Street Cayman Trust Company Ltd.
("State Street Cayman"), Elizabethan Square, P.O. Box 1984, George Town, Grand
Cayman, Cayman Islands, British West Indies, effective August 31, 1994. Under
the Administrative Services Agreement, State Street Cayman provides sufficient
personnel and suitable facilities for the principal offices of Neuberger Berman
INTERNATIONAL Portfolio and provides certain administrative, fund accounting,
and transfer agency services with respect to that Portfolio. The Administrative
Services Agreement terminates if assigned by State Street Cayman; however, State
Street Cayman is permitted to, and does, employ an affiliate, State Street
Canada, Inc., to perform certain accounting functions.

Management and Administration Fees
- ----------------------------------

For investment management services, each Portfolio (except Neuberger
Berman GENESIS, MILLENNIUM and INTERNATIONAL Portfolios) pays NB Management a
fee at the annual rate of 0.55% of the first $250 million of that Portfolio's
average daily net assets, 0.525% of the next $250 million, 0.50% of the next
$250 million, 0.475% of the next $250 million, 0.45% of the next $500 million,
and 0.425% of average daily net assets in excess of $1.5 billion. Neuberger
Berman GENESIS Portfolio and Neuberger Berman MILLENNIUM Portfolio each pay NB
Management a fee for investment management services at the annual rate of 0.85%

63
<PAGE>

of the first $250 million of the Portfolio's average daily net assets, 0.80% of
the next $250 million, 0.75% of the next $250 million, 0.70% of the next $250
million and 0.65% of average daily net assets in excess of $1 billion. Neuberger
Berman INTERNATIONAL Portfolio pays NB Management a fee for investment
management services at the annual rate of 0.85% of the first $250 million of the
Portfolio's average daily net assets, 0.825% of the next $250 million, 0.80% of
the next $250 million, 0.775% of the next $250 million, 0.75% of the next $500
million and 0.725% of average daily net assets in excess of $1.5 billion.

For administrative services, each Fund pays NB Management a fee at the
annual rate of 0.26% of that Fund's average daily net assets, plus certain
out-of-pocket expenses for technology used for shareholder servicing and
shareholder communications subject to the prior approval of an annual budget by
the Trust's Board of Trustees, including a majority of those Trustees who are
not interested persons of the Trust or of NB Management, and periodic reports to
the Board of Trustees on actual expenses. With a Fund's consent NB Management
may subcontract to third parties some of its responsibilities to that Fund under
the administration agreement. In addition, a Fund may compensate such third
parties for accounting and other services.

During the fiscal years ended August 31, 1999, 1998 and 1997, each Fund
accrued management and administration fees as follows:

MANAGEMENT AND ADMINISTRATION FEES
ACCRUED FOR FISCAL YEARS
FUND ENDED AUGUST 31

1999 1998 1997
---- ---- ----
MANHATTAN $4,478,397 $ 4,723,225 $ 4,249,498
GENESIS $9,893,532 $12,686,644 $ 4,174,636
FOCUS $10,300,241 $11,017,126 $ 9,279,747
GUARDIAN $28,897,632 $43,073,250 $40,024,744
INTERNATIONAL $1,307,781 $ 1,503,496 $ 998,616
PARTNERS $21,997,072 $24,233,862 $17,596,503
SOCIALLY RESPONSIVE $863,071 $ 661,068 $ 383,500
MILLENNIUM $296,853 N/A N/A
REGENCY $11,824 N/A N/A

Waivers and Reimbursements
- --------------------------

From May 1, 1995 to December 14, 1997, NB Management voluntarily
waived a portion of the management fee borne by Neuberger Berman GENESIS
Portfolio to reduce the fee by 0.10% per annum of the average daily net assets
of that portfolio.

64
<PAGE>

PORTION OF MANAGEMENT FEE WAIVED

For Period Ended For Fiscal Year Ended
December 14, 1997 August 31, 1997
----------------- ---------------

GENESIS Fund $295,705 $385,721

Until December 31, 1997, NB Management had voluntarily undertaken to
reimburse Neuberger Berman SOCIALLY RESPONSIVE Fund for its total operating
expenses which exceeded 1.50% per annum of the Fund's average daily net assets.
The Fund had in turn agreed to repay NB Management through March 14, 1998 for
the excess total operating expenses that NB Management reimbursed to the Fund
through March 14, 1996, so long as the Fund's total operating expenses during
that period do not exceed the above expense limitation. During the fiscal year
ended August 31, 1997, Neuberger Berman SOCIALLY RESPONSIVE Fund repaid NB
Management $131,041 of expenses that NB Management reimbursed to the Fund
through March 14, 1996. As of August 31, 1998, Neuberger Berman SOCIALLY
RESPONSIVE Fund has repaid NB Management for all such expenses.

NB Management has voluntarily undertaken to reimburse Neuberger
Berman INTERNATIONAL Fund for its total operating expenses that exceed 1.70% per
annum of the Fund's average daily net assets. NB Management did not reimburse
the Fund pursuant to this arrangement during the last three fiscal years.

The Fund has in turn agreed to repay NB Management through December
31, 1998 for excess total operating expenses that NB Management reimbursed to
the Fund through December 31, 1996, so long as the Fund's total operating
expenses do not exceed the above expense limitation. NB Management may terminate
this undertaking by giving at least sixty days' prior written notice to the
Fund. During the fiscal years ended August 31, 1999, 1998 and 1997, Neuberger
Berman INTERNATIONAL Fund repaid NB Management $20,095, $126,741 and $13,955,
respectively, of expenses that NB Management reimbursed to the Fund through
December 31, 1996.

NB Management has voluntarily undertaken to reimburse Neuberger
Berman MILLENNIUM Fund for its total operating expenses which exceed 1.75% of
the Fund's average daily net assets. The Fund has in turn agreed to repay NB
Management through December 31, 2000, for the excess Total Operating Expenses
that NB Management reimbursed to the Fund through December 31, 1999, so long as
the Fund's Total Operating Expenses do not exceed the above expense limitation.
This undertaking can be terminated by NB Management by giving the Fund at least
60 days' prior written notice. During the fiscal year ended August 31, 1999 NB
Management reimbursed Neuberger Berman MILLENNIUM Fund $102,478.

NB Management has contractually undertaken to reimburse Neuberger
Berman REGENCY Fund for its total operating expenses (excluding interest, taxes,
brokerage commissions and extraordinary expenses) which exceed, in the
aggregate, 1.50% per annum of the Fund's average daily net assets. This
undertaking lasts until December 31, 2002. The Fund has contractually undertaken
to reimburse NB Management, until December 31, 2005, for the excess expenses
paid by NB Management, provided the reimbursements do not cause the Fund's total

65
<PAGE>

operating expenses (exclusive of taxes, interest, brokerage commissions, and
extraordinary expenses) to exceed an annual rate of 1.50% of average net assets
and the reimbursements are made within three years after the year in which NB
Management incurred the expense. During the fiscal year ended August 31, 1999 NB
Management reimbursed Neuberger Berman REGENCY Fund $100,634.

NB Management has contractually undertaken to reimburse Neuberger
Berman CENTURY Fund for its total operating expenses (excluding interest, taxes,
brokerage commissions and extraordinary expenses) which exceed, in the
aggregate, 1.50% per annum of the Fund's average daily net assets. This
undertaking lasts until December 31, 2002. Neuberger Berman CENTURY Fund has
contractually undertaken to reimburse NB Management, until December 31, 2005,
for the excess expenses paid by NB Management, provided the reimbursements do
not cause the Fund's total operating expenses (exclusive of taxes, interest,
brokerage commissions, and extraordinary expenses) to exceed an annual rate of
1.50% of average net assets and the reimbursements are made within three years
after the year in which NB Management incurred the expense.

The Management Agreements continue until August 2, 2000. The
Management Agreements are renewable thereafter from year to year with respect to
each Portfolio, so long as their continuance is approved at least annually (1)
by the vote of a majority of the Portfolio Trustees who are not "interested
persons" of NB Management or the corresponding Managers Trust ("Independent
Portfolio Trustees"), cast in person at a meeting called for the purpose of
voting on such approval, and (2) by the vote of a majority of the Portfolio
Trustees or by a 1940 Act majority vote of the outstanding interests in that
Portfolio. The Administration Agreement continues until August 2, 2000. The
Administration Agreement is renewable from year to year with respect to a Fund,
so long as its continuance is approved at least annually (1) by the vote of a
majority of the Fund Trustees who are not "interested persons" of NB Management
or the Trust ("Independent Fund Trustees"), cast in person at a meeting called
for the purpose of voting on such approval, and (2) by the vote of a majority of
the Fund Trustees or by a 1940 Act majority vote of the outstanding shares in
that Fund.

The Management Agreements are terminable, without penalty, with
respect to a Portfolio on 60 days' written notice either by the corresponding
Managers Trust or by NB Management. The Administration Agreement is terminable,
without penalty, with respect to a Fund on 60 days' written notice either by NB
Management or by the Trust. Each Agreement terminates automatically if it is
assigned.

Sub-Adviser
- -----------

NB Management retains Neuberger Berman, 605 Third Avenue, New York,
NY 10158-3698, as sub-adviser with respect to each Portfolio (except Neuberger
Berman INTERNATIONAL Portfolio) pursuant to a sub-advisory agreement dated
August 2, 1993 ("EMT Sub-Advisory Agreement").

The EMT Sub-Advisory Agreement was approved by the holders of the
interests in the Portfolios (except Neuberger Berman SOCIALLY RESPONSIVE,
MILLENNIUM, REGENCY and CENTURY Portfolios) on August 2, 1993, and by the
holders of the interests in Neuberger Berman SOCIALLY RESPONSIVE Portfolio on

66
<PAGE>

March 9, 1994, Neuberger Berman MILLENNIUM Portfolio on October 19, 1998,
Neuberger Berman REGENCY Portfolio on June 1, 1999, and Neuberger Berman CENTURY
Portfolio on December 1, 1999. Neuberger Berman SOCIALLY RESPONSIVE Portfolio,
Neuberger Berman MILLENNIUM Portfolio, Neuberger Berman REGENCY Portfolio and
Neuberger Berman CENTURY Portfolio were authorized to become subject to the EMT
Sub-Advisory Agreement by vote of the Portfolio Trustees on October 20, 1993,
July 29, 1998, April 28, 1999, and July 29, 1999, respectively.

NB Management retains Neuberger Berman as sub-adviser with respect
to Neuberger Berman INTERNATIONAL Portfolio pursuant to a sub-advisory agreement
dated November 1, 1995 ("GMT Sub-Advisory Agreement"). The GMT Sub-Advisory
Agreement was approved by the holders of the interests in Neuberger Berman
INTERNATIONAL Portfolio on October 26, 1995. That Portfolio was authorized to
become subject to the GMT Sub-Advisory Agreement by vote of the Portfolio
Trustees on August 8, 1995.

The EMT Sub-Advisory Agreement and GMT Sub-Advisory Agreement
("Sub-Advisory Agreements") provide in substance that Neuberger Berman will
furnish to NB Management, upon reasonable request, the same type of investment
recommendations and research that Neuberger Berman, from time to time, provides
to its principals and employees for use in managing client accounts. In this
manner, NB Management expects to have available to it, in addition to research
from other professional sources, the capability of the research staff of
Neuberger Berman. This staff consists of numerous investment analysts, each of
whom specializes in studying one or more industries, under the supervision of
the Director of Research, who is also available for consultation with NB
Management. The Sub-Advisory Agreements provide that NB Management will pay for
the services rendered by Neuberger Berman based on the direct and indirect costs
to Neuberger Berman in connection with those services. Neuberger Berman also
serves as sub-adviser for all of the other mutual funds managed by NB
Management.

The Sub-Advisory Agreements continue until August 2, 2000 and are
renewable from year to year, subject to approval of their continuance in the
same manner as the Management Agreements. The Sub-Advisory Agreements are
subject to termination, without penalty, with respect to each Portfolio by the
Portfolio Trustees or a 1940 Act majority vote of the outstanding interests in
that Portfolio, by NB Management, or by Neuberger Berman on not less than 30 nor
more than 60 days' prior written notice. The Sub-Advisory Agreements also
terminate automatically with respect to each Portfolio if they are assigned or
if the Management Agreement terminates with respect to that Portfolio.

Most money managers that come to the Neuberger Berman organization
have at least fifteen years experience. Neuberger Berman and NB Management
employ experienced professionals that work in a competitive environment.

Investment Companies Managed
- ----------------------------

As of September 30, 1999, the investment companies managed by NB
Management had aggregate net assets of approximately $17.8 billion. NB
Management currently serves as investment manager of the following investment
companies:

67
<PAGE>

Approximate
Net Assets at
NAME SEPTEMBER 30, 1999
- ---- ------------------

Neuberger Berman Cash Reserves Portfolio..........................$1,129,792,312
(investment portfolio for Neuberger Berman Cash Reserves)

Neuberger Berman Government Money Portfolio.........................$701,999,455
(investment portfolio for Neuberger Berman Government Money Fund)

Neuberger Berman High Yield Bond Portfolio...........................$25,041,449
(investment portfolio for Neuberger Berman High Yield Bond Fund)

Neuberger Berman Limited Maturity Bond Portfolio....................$274,532,907
(investment portfolio for Neuberger Berman Limited Maturity
Bond Fund and Neuberger Berman Limited Maturity Bond Trust)

Neuberger Berman Municipal Money Portfolio..........................$275,065,503
(investment portfolio for Neuberger Berman Municipal Money Fund)

Neuberger Berman Municipal Securities Portfolio......................$35,080,349
(investment portfolio for Neuberger Berman Municipal Securities
Trust)

Neuberger Berman Century Portfolio.................in registration as of 9/30/99
(investment portfolio for Neuberger Berman Century Fund and
Neuberger Berman Century Trust)

Neuberger Berman Focus Portfolio..................................$1,463,580,020
(investment portfolio for Neuberger Berman Focus Fund,
Neuberger Berman Focus Trust and Neuberger Berman Focus Assets)

Neuberger Berman Genesis Portfolio................................$1,647,532,448
(investment portfolio for Neuberger Berman Genesis Fund,
Neuberger Berman Genesis Trust, Neuberger Berman Genesis
Assets and Neuberger Berman Genesis Institutional)

Neuberger Berman Guardian Portfolio...............................$4,423,729,801
(investment portfolio for Neuberger Berman Guardian Fund,
Neuberger Berman Guardian Trust and Neuberger Berman
Guardian Assets)

Neuberger Berman International Portfolio............................$117,925,499
(investment portfolio for Neuberger Berman International Fund
and Neuberger Berman International Trust)

Neuberger Berman Manhattan Portfolio................................$606,962,000
(investment portfolio for Neuberger Berman Manhattan Fund,
Neuberger Berman Manhattan Trust and Neuberger Berman
Manhattan Assets)

<PAGE>

Neuberger Berman Millennium Portfolio................................$78,666,423
(investment portfolio for Neuberger Berman Millennium Fund,
Neuberger Berman Millennium Trust and Neuberger Berman
Millennium Assets)

Neuberger Berman Partners Portfolio...............................$3,553,329,259
(investment portfolio for Neuberger Berman Partners Fund,
Neuberger Berman Partners Trust and Neuberger Berman
Partners Assets)

Neuberger Berman Regency Portfolio...................................$30,848,996
(investment portfolio for Neuberger Berman Regency Fund and
Neuberger Berman Regency Trust)

Neuberger Berman Socially Responsive Portfolio......................$376,629,789
(investment portfolio for Neuberger Berman Socially Responsive
Fund, Neuberger Berman Socially Responsive Trust, and Neuberger
Berman Socially Responsive Assets)

Advisers Managers Trust...........................................$2,026,088,252
(eight series)

The investment decisions concerning the Portfolios and the other
mutual funds managed by NB Management (collectively, "Other NB Funds") have been
and will continue to be made independently of one another. In terms of their
investment objectives, most of the Other NB Funds differ from the Portfolios.
Even where the investment objectives are similar, however, the methods used by
the Other NB Funds and the Portfolios to achieve their objectives may differ.
The investment results achieved by all of the mutual funds managed by NB
Management have varied from one another in the past and are likely to vary in
the future.

There may be occasions when a Portfolio and one or more of the Other
NB Funds or other accounts managed by Neuberger Berman are contemporaneously
engaged in purchasing or selling the same securities from or to third parties.
When this occurs, the transactions are averaged as to price and allocated, in
terms of amount, in accordance with a formula considered to be equitable to the
funds involved. Although in some cases this arrangement may have a detrimental
effect on the price or volume of the securities as to a Portfolio, in other
cases it is believed that a Portfolio's ability to participate in volume
transactions may produce better executions for it. In any case, it is the
judgment of the Portfolio Trustees that the desirability of the Portfolios'
having their advisory arrangements with NB Management outweighs any
disadvantages that may result from contemporaneous transactions.

The Portfolios are subject to certain limitations imposed on all
advisory clients of Neuberger Berman (including the Portfolios, the Other NB
Funds, and other managed accounts) and personnel of Neuberger Berman and its
affiliates. These include, for example, limits that may be imposed in certain
industries or by certain companies, and policies of Neuberger Berman that limit
the aggregate purchases, by all accounts under management, of the outstanding
shares of public companies.

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<PAGE>

Codes of Ethics
- ---------------

The Trusts, NB Management and Neuberger Berman have personal
securities trading policies that restrict the personal securities transactions
of employees, officers, and trustees. Their primary purpose is to ensure that
personal trading by these individuals does not disadvantage any fund managed by
NB Management. The portfolio managers and other investment personnel who comply
with the policies' preclearance and disclosure procedures may be permitted to
purchase, sell or hold certain types of securities which also may be or are held
in the funds they advise, but are restricted from trading in close conjunction
with their Portfolios or taking personal advantage of investment opportunities
that may belong to a Portfolio.

Management and Control of NB Management and Neuberger Berman
- ------------------------------------------------------------

The directors and officers of NB Management, who are deemed "control
persons," all of whom have offices at the same address as NB Management, are
Richard A. Cantor, Director; Robert Matza, Director; Theodore P. Giuliano,
Director and Vice President; Michael M. Kassen, Director and Chairman; Barbara
Katersky, Senior Vice President; Daniel J. Sullivan, Senior Vice President;
Philip Ambrosio, Senior Vice President and Chief Financial Officer; Peter E.
Sundman, Director and President; Michael J. Weiner, Senior Vice President; and
Lawrence Zicklin, Director.

The directors and officers of Neuberger Berman, who are deemed
"control persons," all of whom have offices at the same address as Neuberger
Berman, are Jeffrey B. Lane, President and Chief Executive Officer; Robert
Matza, Executive Vice President and Chief Administrative Officer; Michael M.
Kassen, Executive Vice President and Chief Investment Officer; Heidi L.
Schneider, Executive Vice President; Peter E. Sundman, Executive Vice President;
Philip Ambrosio, Senior Vice President and Chief Financial Officer; Kevin
Handwerker, Senior Vice President, General Counsel and Secretary; Robert Akeson,
Senior Vice President; Salvatore A. Buonocore, Senior Vice President; Seth J.
Finkel, Senior Vice President; Robert Firth, Senior Vice President; Brian
Gaffney, Senior Vice President; Brian E. Hahn, Senior Vice President; Lawrence
J. Cohn, Senior Vice President; Joseph K. Herlihy, Senior Vice President and
Treasurer; Barbara R. Katersky, Senior Vice President; Diane E. Lederman, Senior
Vice President; Peter B. Phelan, Senior Vice President; Robert H. Splan, Senior
Vice President; Andrea Trachtenberg, Senior Vice President; Michael J. Weiner,
Senior Vice President; Marvin C. Schwartz, Managing Director.

Mr. Sundman and Mr. Kassen are trustees and officers of the Trust
and Managers Trust. Messrs. Sullivan and Weiner are officers of each Trust.

Neuberger Berman and NB Management are wholly owned subsidiaries of
Neuberger Berman Inc., a publicly owned holding company owned primarily by the
employees of Neuberger Berman.

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DISTRIBUTION ARRANGEMENTS

NB Management serves as the distributor ("Distributor") in
connection with the offering of each Fund's shares on a no-load basis. In
connection with the sale of its shares, each Fund has authorized the Distributor
to give only the information, and to make only the statements and
representations, contained in the Prospectus and this SAI or that properly may
be included in sales literature and advertisements in accordance with the 1933
Act, the 1940 Act, and applicable rules of self-regulatory organizations. Sales
may be made only by the Prospectus, which may be delivered personally, through
the mails, or by electronic means. The Distributor is the Funds' "principal
underwriter" within the meaning of the 1940 Act and, as such, acts as agent in
arranging for the sale of each Fund's shares without sales commission or other
compensation and bears all advertising and promotion expenses incurred in the
sale of the Funds' shares.

The Distributor or one of its affiliates may, from time to time,
deem it desirable to offer to shareholders of the Funds, through use of their
shareholder lists, the shares of other mutual funds for which the Distributor
acts as distributor or other products or services. Any such use of the Funds'
shareholder lists, however, will be made subject to terms and conditions, if
any, approved by a majority of the Independent Fund Trustees. These lists will
not be used to offer the Funds' shareholders any investment products or services
other than those managed or distributed by NB Management or Neuberger Berman.

The Trust, on behalf of each Fund, and the Distributor are parties
to a Distribution Agreement that continues until August 2, 2000. The
Distribution Agreement may be renewed annually if specifically approved by (1)
the vote of a majority of the Fund Trustees or a 1940 Act majority vote of the
Fund's outstanding shares and (2) the vote of a majority of the Independent Fund
Trustees, cast in person at a meeting called for the purpose of voting on such
approval. The Distribution Agreement may be terminated by either party and will
terminate automatically on its assignment, in the same manner as the Management
Agreements.

ADDITIONAL PURCHASE INFORMATION

Share Prices and Net Asset Value
- --------------------------------

Each Fund's shares are bought or sold at a price that is the Fund's
NAV per share. The NAVs for each Fund and its corresponding Portfolio are
calculated by subtracting total liabilities from total assets (in the case of a
Portfolio, the market value of the securities the Portfolio holds plus cash and
other assets; in the case of a Fund, its percentage interest in its
corresponding Portfolio, multiplied by the Portfolio's NAV, plus any other
assets). Each Fund's per share NAV is calculated by dividing its NAV by the
number of Fund shares outstanding and rounding the result to the nearest full
cent. Each Fund and its corresponding Portfolio calculate their NAVs as of the
close of regular trading on the NYSE, usually 4 p.m. Eastern time, on each day
the NYSE is open.

Each Portfolio (except Neuberger Berman INTERNATIONAL Portfolio)
values securities (including options) listed on the NYSE, the American Stock
Exchange or other national securities exchanges or quoted on The Nasdaq Stock
Market, and other securities for which market quotations are readily available,

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<PAGE>

at the last reported sale price on the day the securities are being valued. If
there is no reported sale of such a security on that day, the security is valued
at the mean between its closing bid and asked prices on that day. These
Portfolios value all other securities and assets, including restricted
securities, by a method that the trustees of Equity Managers Trust believe
accurately reflects fair value.

Neuberger Berman INTERNATIONAL Portfolio values equity securities at
the last reported sale price on the principal exchange or in the principal
over-the-counter market in which such securities are traded, as of the close of
regular trading on the NYSE on the day the securities are being valued or, if
there are no sales, at the last available bid price on that day. Debt
obligations are valued at the last available bid price for such securities or,
if such prices are not available, at prices for securities of comparable
maturity, quality, and type. Foreign securities are translated from the local
currency into U.S. dollars using current exchange rates. The Portfolio values
all other types of securities and assets, including restricted securities and
securities for which market quotations are not readily available, by a method
that the trustees of Global Managers Trust believe accurately reflects fair
value.

Neuberger Berman INTERNATIONAL Portfolio's portfolio securities are
traded primarily in foreign markets which may be open on days when the NYSE is
closed. As a result, the NAV of Neuberger Berman INTERNATIONAL Fund may be
significantly affected on days when shareholders have no access to that Fund.

If NB Management believes that the price of a security obtained
under a Portfolio's valuation procedures (as described above) does not represent
the amount that the Portfolio reasonably expects to receive on a current sale of
the security, the Portfolio will value the security based on a method that the
trustees of the corresponding Managers Trust believe accurately reflects fair
value.

Automatic Investing and Dollar Cost Averaging
- ---------------------------------------------

Shareholders may arrange to have a fixed amount automatically
invested in Fund shares each month. To do so, a shareholder must complete an
application, available from the Distributor, electing to have automatic
investments funded either through (1) redemptions from his or her account in a
money market fund for which NB Management serves as investment manager or (2)
withdrawals from the shareholder's checking account. In either case, the minimum
monthly investment is $100. A shareholder who elects to participate in automatic
investing through his or her checking account must include a voided check with
the completed application. A completed application should be sent to Neuberger
Berman Management Incorporated, 605 Third Avenue, 2nd Floor, New York, NY
10158-0180.

Automatic investing enables a shareholder to take advantage of
"dollar cost averaging." As a result of dollar cost averaging, a shareholder's
average cost of Fund shares generally would be lower than if the shareholder
purchased a fixed number of shares at the same pre-set intervals. Additional
information on dollar cost averaging may be obtained from the Distributor.

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<PAGE>

ADDITIONAL EXCHANGE INFORMATION

As more fully set forth in the section of the Prospectus entitled
"Maintaining Your Account," shareholders may redeem at least $1,000 worth of a
Fund's shares and invest the proceeds in shares of one or more of the other
Funds or the Income and Municipal Funds that are briefly described below,
provided that the minimum investment requirements of the other fund(s) are met.

INCOME FUNDS
- ------------

<S> <C>
Neuberger Berman A U.S. Government money market fund seeking
Government Money Fund maximum safety and liqudity and the highest available
current income The corresponding portfolio invests
only in the U.S. Treasury obligations and other money
market instruments backed by the full faith and credit of
the United States. It seeks to maintain a constant
purchase and redemption price of $1.00.

Neuberger Berman A money market fund seeking the highest current
Cash Reserves income consistent with safety and liquidity. The
corresponding portfolio invests in high-quality money
market instruments. It seeks to maintain a constant
purchase and redemption price of $1.00.

Neuberger Berman Seeks the highest current income consistent with low
Limited Maturity Bond Fund risks to principal and liquidity and, secondarily, total
return. The corresponding portfolio invests in debt
securities, primarily investment grade; maximum 10%
below investment grade, but no lower than B.*/
Maximum average duration of four years.

Neuberger Berman In seeking its objective of high current income and,
High Yield Bond Fund secondarily, capital growth, the fund invests primarily
in lower-rated debt securities, and in investment grade
income-producing and non-income producing debt and
equity securities.

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<PAGE>

MUNICIPAL FUNDS
- ---------------

<S> <C>
Neuberger Berman A money market fund seeking the maximum current
Municipal Money Fund income exempt from federal income tax, consistent
with safety and liquidity. The corresponding portfolio
invests in high-quality, short-term municipal securities.
It seeks to maintain a constant purchase and redemption
price of $1.00.

Neuberger Berman Municipal Seeks high current tax-exempt income with low risk to
Securities Trust principal, limited price fluctuation, and liquidity and,
secondarily, total return. The corresponding portfolio
invests in investment grade municipal securities.
Maximum average duration of 10 years.
</TABLE>

*/ As rated by Moody's or S&P or, if unrated by either of those entities,
determined by NB Management to be of comparable quality.

Any Fund described herein, and any of the Income or Municipal Funds,
may terminate or modify its exchange privilege in the future.

Before effecting an exchange, Fund shareholders must obtain and
should review a currently effective prospectus of the fund into which the
exchange is to be made. An exchange is treated as a sale for federal income tax
purposes and, depending on the circumstances, a capital gain or loss may be
realized.

There can be no assurance that Neuberger Berman Government Money
Fund, Neuberger Berman Cash Reserves, or Neuberger Berman Municipal Money Fund,
each of which is a money market fund that seeks to maintain a constant purchase
and redemption price of $1.00, will be able to maintain that price. An
investment in any of the above-referenced funds, as in any other mutual fund, is
neither insured nor guaranteed by the U.S. Government.

ADDITIONAL REDEMPTION INFORMATION

Suspension of Redemptions
- -------------------------

The right to redeem a Fund's shares may be suspended or payment of
the redemption price postponed (1) when the NYSE is closed, (2) when trading on
the NYSE is restricted, (3) when an emergency exists as a result of which it is
not reasonably practicable for its corresponding Portfolio to dispose of
securities it owns or fairly to determine the value of its net assets, or (4)
for such other period as the SEC may by order permit for the protection of the
Fund's shareholders. Applicable SEC rules and regulations shall govern whether
the conditions prescribed in (2) or (3) exist. If the right of redemption is
suspended, shareholders may withdraw their offers of redemption, or they will
receive payment at the NAV per share in effect at the close of business on the
first day the NYSE is open ("Business Day") after termination of the suspension.

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<PAGE>

Redemptions in Kind
- -------------------

Each Fund reserves the right, under certain conditions, to honor any
request for redemption (or a combination of requests from the same shareholder
in any 90-day period) exceeding $250,000 or 1% of the net assets of the Fund,
whichever is less, by making payment in whole or in part in securities valued as
described in "Share Prices and Net Asset Value" above. If payment is made in
securities, a shareholder generally will incur brokerage expenses or other
transaction costs in converting those securities into cash and will be subject
to fluctuation in the market prices of those securities until they are sold. The
Funds do not redeem in kind under normal circumstances, but would do so when the
Fund Trustees determined that it was in the best interests of a Fund's
shareholders as a whole.

DIVIDENDS AND OTHER DISTRIBUTIONS

Each Fund distributes to its shareholders substantially all of its
share of any net investment income (after deducting expenses incurred directly
by the Fund), any net realized capital gains, and any net realized gains from
foreign currency transactions earned or realized by its corresponding Portfolio.
A Portfolio's net investment income consists of all income accrued on portfolio
assets less accrued expenses, but does not include capital and foreign currency
gains and losses. Net investment income and realized gains and losses are
reflected in a Portfolio's NAV (and, hence, its corresponding Fund's NAV) until
they are distributed. Each Fund calculates its net investment income and NAV per
share as of the close of regular trading on the NYSE on each Business Day
(usually 4:00 p.m. Eastern time).

Dividends from net investment income and distributions of net
realized capital and foreign currency gains, if any, normally are paid once
annually, in December, except that Neuberger Berman GUARDIAN Fund distributes
substantially all of its share of Neuberger Berman GUARDIAN Portfolio's net
investment income (after deducting expenses incurred directly by Neuberger
Berman GUARDIAN Fund), if any, near the end of each calendar quarter.

Dividends and other distributions are automatically reinvested in
additional shares of the distributing Fund, unless the shareholder elects to
receive them in cash ("cash election"). Shareholders may make a cash election on
the original account application or at a later date by writing to State Street
Bank and Trust Company ("State Street"), c/o Boston Service Center, P.O. Box
8403, Boston, MA 02266-8403. Cash distributions can be paid through an
electronic transfer to a bank account designated in the shareholder's original
account application. To the extent dividends and other distributions are subject
to federal, state, or local income taxation, they are taxable to the
shareholders whether received in cash or reinvested in Fund shares.

A cash election with respect to any Fund remains in effect until the
shareholder notifies State Street in writing to discontinue the election. If it
is determined, however, that the U.S. Postal Service cannot properly deliver
Fund mailings to the shareholder for 180 days, the Fund will terminate the
shareholder's cash election. Thereafter, the shareholder's dividends and other
distributions will automatically be reinvested in additional Fund shares until
the shareholder notifies State Street or the Fund in writing to request that the
cash election be reinstated.

Dividend or other distribution checks that are not cashed or deposited
within 180 days from being issued will be reinvested in additional shares of the

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<PAGE>

distributing Fund at its NAV per share on the day the check is reinvested. No
interest will accrue on amounts represented by uncashed dividend or other
distribution checks.

ADDITIONAL TAX INFORMATION

Taxation of the Funds
- ---------------------

To continue to qualify for treatment as a RIC under the Code, each
Fund must distribute to its shareholders for each taxable year at least 90% of
its investment company taxable income (consisting generally of net investment
income, net short-term capital gain, and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from Financial Instruments) derived
with respect to its business of investing in securities or those currencies
("Income Requirement"); and (2) at the close of each quarter of the Fund's
taxable year, (i) at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs, and other securities limited, in respect of any one issuer, to an
amount that does not exceed 5% of the value of the Fund's total assets and that
does not represent more than 10% of the issuer's outstanding voting securities,
and (ii) not more than 25% of the value of its total assets may be invested in
securities (other than U.S. Government securities or securities of other RICs)
of any one issuer. If a Fund failed to qualify for treatment as a RIC for any
taxable year, it would be taxed on the full amount of its taxable income for
that year without being able to deduct the distributions it makes to its
shareholders and the shareholders would treat all those distributions, including
distributions of net capital gain (the excess of net long-term capital gain over
net short-term capital loss), as dividends (that is, ordinary income) to the
extent of the Fund's earnings and profits.

The Funds (except Neuberger Berman SOCIALLY RESPONSIVE, Neuberger
Berman MILLENNIUM, Neuberger Berman REGENCY, Neuberger Berman CENTURY and
Neuberger Berman INTERNATIONAL Funds) have received rulings from the Internal
Revenue Service ("Service") that each such Fund, as an investor in its
corresponding Portfolio, will be deemed to own a proportionate share of the
Portfolio's assets and income for purposes of determining whether the Fund
satisfies all the requirements described above to qualify as a RIC. Although
these rulings may not be relied on as precedent by the excepted Funds, NB
Management believes that the reasoning thereof and, hence, their conclusion
apply to those Funds as well.

Each Fund will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ended on October 31 of that year, plus certain
other amounts.

See the next section for a discussion of the tax consequences to the
Funds of distributions to them from the Portfolios, investments by the
Portfolios in certain securities, and hedging transactions engaged in by the
Portfolios.

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<PAGE>

Taxation of the Portfolios
- --------------------------

The Portfolios (except Neuberger Berman SOCIALLY RESPONSIVE,
Neuberger Berman MILLENNIUM, Neuberger Berman REGENCY, Neuberger Berman CENTURY
and Neuberger Berman INTERNATIONAL Portfolios) have received rulings from the
Service to the effect that, among other things, each such Portfolio will be
treated as a separate partnership for federal income tax purposes and will not
be a "publicly traded partnership." Although these rulings may not be relied on
as precedent by the excepted Portfolios, NB Management believes the reasoning
thereof and, hence, their conclusion apply to those Portfolios as well. As a
result, no Portfolio is subject to federal income tax; instead, each investor in
a Portfolio, such as a Fund, is required to take into account in determining its
federal income tax liability its share of the Portfolio's income, gains, losses,
and deductions, without regard to whether it has received any cash distributions
from the Portfolio. Each Portfolio also is not subject to Delaware or New York
income or franchise tax.

Because each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets and income for purposes of determining whether
the Fund satisfies the requirements to qualify as a RIC, each Portfolio intends
to continue to conduct its operations so that its corresponding Fund will be
able to continue to satisfy all those requirements.

Distributions to a Fund from its corresponding Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
the Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds the Fund's basis for its interest in the Portfolio before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of the Fund's entire interest in the Portfolio and includes a
disproportionate share of any unrealized receivables held by the Portfolio, (3)
loss will be recognized if a liquidation distribution consists solely of cash
and/or unrealized receivables, and (4) gain or loss may be recognized on a
distribution to a Fund that contributed property to a Portfolio (that is, all
Funds other than Neuberger Berman SOCIALLY RESPONSIVE, Neuberger Berman
MILLENNIUM, Neuberger Berman REGENCY, and Neuberger Berman INTERNATIONAL Funds).
A Fund's basis for its interest in its corresponding Portfolio generally equals
the amount of cash and the basis of any property the Fund invests in the
Portfolio, increased by the Fund's share of the Portfolio's net income and
capital gains and decreased by (1) the amount of cash and the basis of any
property the Portfolio distributes to the Fund and (2) the Fund's share of the
Portfolio's losses.

Dividends and interest received by a Portfolio, and gains realized
by a Portfolio, may be subject to income, withholding, or other taxes imposed by
foreign countries and U.S. possessions ("foreign taxes") that would reduce the
total return on its securities. Tax treaties between certain countries and the
United States may reduce or eliminate foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments by
foreign investors.

If more than 50% of the value of Neuberger Berman INTERNATIONAL
Fund's total assets (taking into account its share of Neuberger Berman
INTERNATIONAL Portfolio's total assets) at the close of its taxable year
consists of securities of foreign corporations, that Fund will be eligible to,

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<PAGE>

and may, file an election with the Service that will enable its shareholders, in
effect, to receive the benefit of the foreign tax credit with respect to the
Fund's share of any foreign taxes paid by the Portfolio ("Fund's foreign
taxes"). Pursuant to the election, Neuberger Berman INTERNATIONAL Fund would
treat those taxes as dividends paid to its shareholders and each shareholder
would be required to (1) include in gross income, and treat as paid by the
shareholder, his or her share of those taxes, (2) treat his or her share of
those taxes and of any dividend paid by the Fund that represents its share of
the Portfolio's income from foreign or U.S. possessions sources as his or her
own income from those sources, and (3) either deduct the taxes deemed paid by
him or her in computing his or her taxable income or, alternatively, use the
foregoing information in calculating the foreign tax credit against his or her
federal income tax. Neuberger Berman INTERNATIONAL Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's foreign taxes and income (taking into account its share of the
Portfolio's income) from sources within foreign countries and U.S. possessions
if it makes this election. Individual shareholders of the Fund who have no more
than $300 ($600 for married persons filing jointly) of creditable foreign taxes
included on Forms 1099 and all of whose foreign source income is "qualified
passive income" may elect each year to be exempt from the extremely complicated
foreign tax credit limitation and will be able to claim a foreign tax credit
without having to file the detailed Form 1116 that otherwise is required.

A Portfolio may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is any foreign corporation (with certain
exceptions) that, in general, meets either of the following tests: (1) at least
75% of its gross income is passive or (2) an average of at least 50% of its
assets produce, or are held for the production of, passive income. Under certain
circumstances, if a Portfolio holds stock of a PFIC, its corresponding Fund
(indirectly through its interest in the Portfolio) will be subject to federal
income tax on its share of a portion of any "excess distribution" received by
the Portfolio on the stock or of any gain on the Portfolio's disposition of the
stock (collectively, "PFIC income"), plus interest thereon, even if the Fund
distributes its share of the PFIC income as a taxable dividend to its
shareholders. The balance of the Fund's share of the PFIC income will be
included in its investment company taxable income and, accordingly, will not be
taxable to it to the extent it distributes that income to its shareholders.

If a Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of its corresponding Fund's
incurring the foregoing tax and interest obligation, the Fund would be required
to include in income each year its share of the Portfolio's pro rata share of
the QEF's annual ordinary earnings and net capital gain -- which the Fund most
likely would have to distribute to satisfy the Distribution Requirement and
avoid imposition of the Excise Tax -- even if the Portfolio did not receive
those earnings and gain from the QEF. In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.

A holder of stock in any PFIC may elect to include in ordinary
income for each taxable year the excess, if any, of the fair market value of the
stock over the adjusted basis therein as of the end of that year. Pursuant to
the election, a deduction (as an ordinary, not capital, loss) also would be
allowed for the excess, if any, of the holder's adjusted basis in PFIC stock
over the fair market value thereof as of the taxable year-end, but only to the
extent of any net mark-to-market gains with respect to that stock included in

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<PAGE>

income for prior taxable years under the election (and under regulations
proposed in 1992 that provided a similar election with respect to the stock of
certain PFICs). The adjusted basis in each PFIC's stock subject to the election
would be adjusted to reflect the amounts of income included and deductions taken
thereunder.

The Portfolios' use of hedging strategies, such as writing (selling)
and purchasing options and futures contracts and entering into forward
contracts, involves complex rules that will determine for income tax purposes
the amount, character, and timing of recognition of the gains and losses the
Portfolios realize in connection therewith. Gains from the disposition of
foreign currencies (except certain gains that may be excluded by future
regulations), and gains from Financial Instruments derived by a Portfolio with
respect to its business of investing in securities or foreign currencies, will
qualify as permissible income for its corresponding Fund under the Income
Requirement.

Exchange-traded futures contracts and certain forward contracts
subject to section 1256 of the Code ("Section 1256 contracts") are required to
be marked to market (that is, treated as having been sold at market value) for
federal income tax purposes at the end of a Portfolio's taxable year. Sixty
percent of any net gain or loss recognized as a result of these "deemed sales,"
and 60% of any net realized gain or loss from any actual sales, of Section 1256
contracts are treated as long-term capital gain or loss; the remainder is
treated as short-term capital gain or loss. Section 1256 contracts also may be
marked-to-market for purposes of the Excise Tax. These rules may operate to
increase the amount that a Fund must distribute to satisfy the Distribution
Requirement, which will be taxable to the shareholders as ordinary income, and
to increase the net capital gain recognized by the Fund, without in either case
increasing the cash available to the Fund. A Portfolio may elect to exclude
certain transactions from the operation of section 1256, although doing so may
have the effect of increasing the relative proportion of net short-term capital
gain (taxable to its corresponding Fund's shareholders as ordinary income when
distributed to them) and/or increasing the amount of dividends that Fund must
distribute to meet the Distribution Requirement and avoid imposition of the
Excise Tax.

If a Portfolio has an "appreciated financial position" -- generally,
an interest (including an interest through an option, futures or forward
contract, or short sale) with respect to any stock, debt instrument (other than
"straight debt"), or partnership interest the fair market value of which exceeds
its adjusted basis -- and enters into a "constructive sale" of the position, the
Fund will be treated as having made an actual sale thereof, with the result that
gain will be recognized at that time. A constructive sale generally consists of
a short sale, an offsetting notional principal contract, or a futures or forward
contract entered into by a Portfolio or a related person with respect to the
same or substantially identical property. In addition, if the appreciated
financial position is itself a short sale or such a contract, acquisition of the
underlying property or substantially identical property will be deemed a
constructive sale. The foregoing will not apply, however, to any transaction
during any taxable year that otherwise would be treated as a constructive sale
if the transaction is closed within 30 days after the end of that year and the
Portfolio holds the appreciated financial position unhedged for 60 days after
that closing (I.E., at no time during that 60-day period is the Portfolio's risk
of loss regarding that position reduced by reason of certain specified
transactions with respect to substantially identical or related property, such
as having an option to sell, being contractually obligated to sell, making a
short sale, or granting an option to buy substantially identical stock or
securities).

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<PAGE>

Each of Neuberger Berman PARTNERS, Neuberger Berman MILLENNIUM,
Neuberger Berman REGENCY, Neuberger Berman CENTURY, and Neuberger Berman
SOCIALLY RESPONSIVE Portfolios may acquire zero coupon securities or other
securities issued with original issue discount ("OID"). As a holder of those
securities, each such Portfolio (and, through it, its corresponding Fund) must
take into income the OID that accrues on the securities during the taxable year,
even if it receives no corresponding payment on them during the year. Because
each such Fund annually must distribute substantially all of its investment
company taxable income (including its share of its corresponding Portfolio's
accrued OID) to satisfy the Distribution Requirement and avoid imposition of the
Excise Tax, such a Fund may be required in a particular year to distribute as a
dividend an amount that is greater than its share of the total amount of cash
its corresponding Portfolio actually receives. Those distributions will be made
from a Fund's (or its share of its corresponding Portfolio's) cash assets or, if
necessary, from the proceeds of sales of that Portfolio's securities. A
Portfolio may realize capital gains or losses from those sales, which would
increase or decrease its corresponding Fund's investment company taxable income
and/or net capital gain.

Taxation of the Funds' Shareholders
- -----------------------------------

If Fund shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital loss
to the extent of any capital gain distributions received on those shares.

Each Fund is required to withhold 31% of all dividends, capital gain
distributions, and redemption proceeds payable to any individuals and certain
other non-corporate shareholders who do not provide the Fund with a correct
taxpayer identification number. Withholding at that rate also is required from
dividends and other distributions payable to such shareholders who otherwise are
subject to backup withholding.

As described in "Maintaining Your Account" in the Prospectus, a Fund
may close a shareholder's account with the Fund and redeem the remaining shares
if the account balance falls below the specified minimum and the shareholder
fails to re-establish the minimum balance after being given the opportunity to
do so. If an account that is closed pursuant to the foregoing was maintained for
an IRA (including a Roth IRA) or a qualified retirement plan (including a
simplified employee pension plan, savings incentive match plan for employees,
Keogh plan, corporate profit-sharing and money purchase pension plan, Code
section 401(k) plan, and Code section 403(b)(7) account), the Fund's payment of
the redemption proceeds may result in adverse tax consequences for the
accountholder. The accountholder should consult his or her tax adviser regarding
any such consequences.

PORTFOLIO TRANSACTIONS

Neuberger Berman acts as principal broker for each Portfolio (except
Neuberger Berman INTERNATIONAL Portfolio) in the purchase and sale of its
portfolio securities (other than certain securities traded on the OTC market).
Neuberger Berman may act as broker for Neuberger Berman INTERNATIONAL Portfolio.
A substantial portion of the portfolio transactions of Neuberger Berman GENESIS
and Neuberger Berman MILLENNIUM Portfolios involves securities traded on the OTC

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market; those Portfolios purchase and sell OTC securities in principal
transactions with dealers who are the principal market makers for such
securities. In effecting securities transactions, each Portfolio seeks to obtain
the best price and execution of orders.

During the fiscal year ended August 31, 1997, Neuberger Berman
MANHATTAN Portfolio paid brokerage commissions of $971,026, of which $458,679
was paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman MANHATTAN Portfolio paid brokerage commissions of $1,132,309,
of which $546,227 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
MANHATTAN Portfolio paid brokerage commissions of $1,155,067, of which $495,351
was paid to Neuberger Berman. Transactions in which that Portfolio used
Neuberger Berman as broker comprised 45.46% of the aggregate dollar amount of
transactions involving the payment of commissions, and 42.89% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1999. 99.63% of the $657,243 paid to other brokers by that Portfolio during
that fiscal year (representing commissions on transactions involving
approximately $398,886,704) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1999, that
Portfolio acquired securities of the following of its "regular brokers or
dealers" (as defined in the 1940 Act) ("Regular B/Ds"): American Express Credit
Corp., Donaldson, Lufkin, & Jenrette Securities Corp., Ford Motor Credit Co.,
General Electric Capital Corp., Goldman, Sachs & Co., Lehman Brothers Inc. and
State Street Bank and Trust Company; at that date, that Portfolio held the
securities of its Regular B/Ds with an aggregate value as follows: Ford Motor
Credit Co., $10,996,258; Lehman Brothers Inc., $5,138,500; and State Street Bank
& Trust Company, $12,240,000.

During the fiscal year ended August 31, 1997, Neuberger Berman
GENESIS Portfolio paid brokerage commissions of $860,097, of which $516,040 was
paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman GENESIS Portfolio paid brokerage commissions of $2,419,159, of
which $1,159,143 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
GENESIS Portfolio paid brokerage commissions of $2,150,168, of which $1,034,712
was paid to Neuberger Berman. Transactions in which that Portfolio used
Neuberger Berman as broker comprised 49.53% of the aggregate dollar amount of
transactions involving the payment of commissions, and 48.12% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1999. 94.48% of the $1,053,905 paid to other brokers by that Portfolio
during that fiscal year (representing commissions on transactions involving
approximately $425,499,870) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1999, that
Portfolio acquired securities of the following of its Regular B/Ds: American
Express Credit Corp., Ford Motor Credit Co., General Electric Capital Corp.,
Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley Dean Witter & Co.,
and State Street Bank and Trust Company; at that date, that Portfolio held the
securities of its Regular B/Ds with an aggregate value as follows: American
Express Credit Corp., $9,997,150; General Electric Capital Corp., $9,989,831;
and State Street Bank & Trust Company, $26,740,000.

During the fiscal year ended August 31, 1997, Neuberger Berman FOCUS
Portfolio paid brokerage commissions of $1,825,493, of which $920,202 was paid
to Neuberger Berman. During the fiscal year ended August 31, 1998, Neuberger

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Berman FOCUS Portfolio paid brokerage commissions of $2,051,007, of which
$998,930 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman FOCUS
Portfolio paid brokerage commissions of $1,972,390, of which $983,860 was paid
to Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman
as broker comprised 55.54% of the aggregate dollar amount of transactions
involving the payment of commissions, and 49.88% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
91.88% of the $908,219 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$534,330,876) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: Ford Motor Credit Co., General
Electric Capital Corp., Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan
Stanley Dean Witter & Co., and State Street Bank and Trust Company; at that
date, that Portfolio held the securities of its Regular B/Ds with an aggregate
value as follows: Morgan Stanley Dean Witter & Co., $87,957,813 and State Street
Bank & Trust Company, $22,890,000.

During the fiscal year ended August 31, 1997, Neuberger Berman
GUARDIAN Portfolio paid brokerage commissions of $8,540,335, of which $4,806,913
was paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman Guardian Portfolio paid brokerage commissions of $11,558,523,
of which $5,733,976 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
GUARDIAN Portfolio paid brokerage commissions of $10,793,418, of which
$3,975,341 was paid to Neuberger Berman. Transactions in which that Portfolio
used Neuberger Berman as broker comprised 42.88% of the aggregate dollar amount
of transactions involving the payment of commissions, and 36.83% of the
aggregate brokerage commissions paid by the Portfolio, during the fiscal year
ended August 31, 1999. 89.21% of the $6,082,366 paid to other brokers by that
Portfolio during that fiscal year (representing commissions on transactions
involving approximately $4,098,122,468) was directed to those brokers because of
research services they provided. During the fiscal year ended August 31, 1999,
that Portfolio acquired securities of the following of its Regular B/Ds:
American Express Credit Corp., Donaldson, Lufkin, & Jenrette Securities Corp.,
Ford Motor Credit Co., General Electric Capital Corp., Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley Dean Witter & Co.,
and State Street Bank and Trust Company; at that date, that Portfolio held the
securities of its Regular B/Ds with an aggregate value as follows: American
Express Credit Corp., $49,992,736; Ford Motor Credit Co., $49,948,667; General
Electric Capital Corp., $49,985,833; Morgan Stanley Dean Witter & Co.,
$49,728,344; and State Street Bank & Trust Company, $111,170,000.

During the fiscal year ended August 31, 1997, Neuberger Berman
PARTNERS Portfolio paid brokerage commissions of $5,413,453, of which $3,508,790
was paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman Partners Portfolio paid brokerage commissions of $10,028,713,
of which $6,281,978 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
PARTNERS Portfolio paid brokerage commissions of $14,228,430 of which $7,694,359
was paid to Neuberger Berman. Transactions in which that Portfolio used

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Neuberger Berman as broker comprised 55.60% of the aggregate dollar amount of
transactions involving the payment of commissions, and 54.08% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1999. 90.92% of the $5,940,877 paid to other brokers by that Portfolio
during that fiscal year (representing commissions on transactions involving
approximately $4,178,855,517) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1999, that
Portfolio acquired securities of the following of its Regular B/Ds: American
Express Credit Corp., Ford Motor Credit Co., General Electric Capital Corp.,
Goldman, Sachs & Co., Morgan Stanley Dean Witter & Co., and State Street Bank
and Trust Company; at that date, that Portfolio held the securities of its
Regular B/Ds with an aggregate value as follows: American Express Credit Corp.,
$49,948,375; Ford Motor Credit Co., $49,992,764; Morgan Stanley Dean Witter &
Co., $28,318,125; and State Street Bank & Trust Company, $63,300,000.

During the fiscal year ended August 31, 1997, Neuberger Berman
SOCIALLY RESPONSIVE Portfolio paid brokerage commissions of $305,640, of which
$232,238 was paid to Neuberger Berman. During the fiscal year ended August 31,
1998, Neuberger Berman SOCIALLY RESPONSIVE Portfolio paid brokerage commissions
of $401,601, of which $296,353 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
SOCIALLY RESPONSIVE Portfolio paid brokerage commissions of $485,040, of which
$329,666 was paid to Neuberger Berman. Transactions in which that Portfolio used
Neuberger Berman as broker comprised 69.99% of the aggregate dollar amount of
transactions involving the payment of commissions, and 67.97% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1999. 99.97% of the $155,324 paid to other brokers by that Portfolio during
that fiscal year (representing commissions on transactions involving
approximately $97,201,802) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1999, that
Portfolio acquired securities of the following of its Regular B/Ds: Goldman,
Sachs & Co. and State Street Bank and Trust Company; at that date, that
Portfolio held the securities of its Regular B/Ds with an aggregate value as
follows: Goldman, Sachs & Co., $556,256; and State Street Bank & Trust Company,
$8,370,000.

During the fiscal year ended August 31, 1997, Neuberger Berman
INTERNATIONAL Portfolio paid brokerage commissions of $297,431, of which $5,910
was paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman INTERNATIONAL Portfolio paid brokerage commissions of $345,192,
of which $3,435 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
INTERNATIONAL Portfolio paid brokerage commissions of $717,488, of which $5,632
was paid to Neuberger Berman. Transactions in which the Portfolio used Neuberger
Berman as broker comprised 1.67% of the aggregate dollar amount of transactions
involving the payment of commissions, and 0.79% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
93.37% of the $664,624 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$201,189,337) was directed to those brokers because of research services they

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provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: Exxon Credit Corp., General
Electric Capital Corp., HSBC Securities, Inc., Samsung Securities (America),
Inc., State Street Bank and Trust Company and Vickers Ballas (USA) Inc.; at that
date, that Portfolio held the securities of its Regular B/Ds with an aggregate
value as follows: State Street Bank & Trust Company, $3,920,000.

During the fiscal year ended August 31, 1999, Neuberger Berman
MILLENNIUM Portfolio paid brokerage commissions of $50,656, of which $28,188 was
paid to Neuberger Berman. Transactions in which that Portfolio used Neuberger
Berman as broker comprised 52.82% of the aggregate dollar amount of transactions
involving the payment of commissions, and 55.65% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
99.14% of the $22,275 paid to other brokers by that Portfolio during that fiscal
year (representing commissions on transactions involving approximately
$9,372,700) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: Donaldson, Lufkin, & Jenrette
Securities Corp., Ford Motor Credit Co., General Electric Capital Corp., Merrill
Lynch, Pierce, Fenner & Smith Inc., and State Street Bank and Trust Company; at
that date, that Portfolio held the securities of its Regular B/Ds with an
aggregate value as follows: Ford Motor Credit Co., $1,499,783; and State Street
Bank & Trust Company, $2,090,000.

During the fiscal year ended August 31, 1999, Neuberger Berman
REGENCY Portfolio paid brokerage commissions of $17,045, of which $15,488 was
paid to Neuberger Berman. Transactions in which that Portfolio used Neuberger
Berman as broker comprised 90.37% of the aggregate dollar amount of transactions
involving the payment of commissions, and 90.87% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
96.47% of the $1,502 paid to other brokers by that Portfolio during that fiscal
year (representing commissions on transactions involving approximately $840,736)
was directed to those brokers because of research services they provided. During
the fiscal year ended August 31, 1999, that Portfolio acquired securities of the
following of its Regular B/Ds: American Express Credit Corp., Ford Motor Credit
Co., General Electric Capital Corp., and State Street Bank and Trust Company; at
that date, that Portfolio held the securities of its Regular B/Ds with an
aggregate value as follows: State Street Bank & Trust Company, $370,000.

Insofar as portfolio transactions of Neuberger Berman PARTNERS
Portfolio result from active management of equity securities, and insofar as
portfolio transactions of Neuberger Berman MANHATTAN Portfolio result from
seeking capital appreciation by selling securities whenever sales are deemed
advisable without regard to the length of time the securities may have been
held, it may be expected that the aggregate brokerage commissions paid by those
Portfolios to brokers (including Neuberger Berman where it acts in that
capacity) may be greater than if securities were selected solely on a long-term
basis.

Portfolio securities may, from time to time, be loaned by a
Portfolio to Neuberger Berman in accordance with the terms and conditions of an
order issued by the SEC. The order exempts such transactions from provisions of
the 1940 Act that would otherwise prohibit such transactions, subject to certain
conditions. In accordance with the order, securities loans made by a Portfolio
to Neuberger Berman are fully secured by cash collateral. The portion of the

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income on the cash collateral which may be shared with Neuberger Berman is to be
determined by reference to concurrent arrangements between Neuberger Berman and
non-affiliated lenders with which it engages in similar transactions. In
addition, where Neuberger Berman borrows securities from a Portfolio in order to
re-lend them to others, Neuberger Berman may be required to pay that Portfolio,
on a quarterly basis, certain of the earnings that Neuberger Berman otherwise
has derived from the re-lending of the borrowed securities. When Neuberger
Berman desires to borrow a security that a Portfolio has indicated a willingness
to lend, Neuberger Berman must borrow such security from that Portfolio, rather
than from an unaffiliated lender, unless the unaffiliated lender is willing to
lend such security on more favorable terms (as specified in the order) than that
Portfolio. If, in any month, a Portfolio's expenses exceed its income in any
securities loan transaction with Neuberger Berman, Neuberger Berman must
reimburse that Portfolio for such loss.

A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to securities loans by the
Portfolios. The following information reflects interest income earned by the
Portfolios from the cash collateralization of securities loans through Neuberger
Berman during the fiscal years ended 1998 and 1997. As reflected below,
Neuberger Berman received a portion of the interest income from the cash
collateral.

Interest Income from
Collateralization of Amount Paid to
Name of Portfolio Fiscal Year End Securities Loans Neuberger Berman
- ----------------- --------------- ---------------- ----------------

Neuberger Berman
MANHATTAN Portfolio 8/31/98 $ 469,745 $ 212,611
8/31/97 $ 988,931 $ 326,403
- --------------------------------------------------------------------------------
Neuberger Berman GENESIS
Portfolio 8/31/98 $ 285,737 $ 152,375
8/31/97 $ 168,552 $ 69,948
- --------------------------------------------------------------------------------
Neuberger Berman
GUARDIAN Portfolio 8/31/98 $1,355,093 $1,035,708
8/31/97 $4,005,765 $3,523,486

- --------------------------------------------------------------------------------
Neuberger Berman FOCUS
Portfolio 8/31/98 $ 139,877 $ 101,879
8/31/97 $1,053,272 $ 898,127
- --------------------------------------------------------------------------------
Neuberger Berman
PARTNERS Porfolio 8/31/98 $ 280,193 $ 141,707
8/31/97 $ 727,133 $ 688,624
- --------------------------------------------------------------------------------
Neuberger Berman Socially
RESPONSIVE Portfolio 8/31/98 $ 20,023 $ 10,803
8/31/97 $ 80,484 $ 51,639
- --------------------------------------------------------------------------------
Neuberger Berman
INTERNATIONAL Portfolio 8/31/98 $ 31,250 $ 0
8/31/97 $ 0 $ 0

In effecting securities transactions, each Portfolio generally seeks
to obtain the best price and execution of orders. Commission rates, being a

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component of price, are considered along with other relevant factors. Each
Portfolio plans to continue to use Neuberger Berman as its broker where, in the
judgment of NB Management, that firm is able to obtain a price and execution at
least as favorable as other qualified brokers. To the Portfolios' knowledge, no
affiliate of any Portfolio receives give-ups or reciprocal business in
connection with their securities transactions.

The use of Neuberger Berman as a broker for each Portfolio is
subject to the requirements of Section 11(a) of the Securities Exchange Act of
1934. Section 11(a) prohibits members of national securities exchanges from
retaining compensation for executing exchange transactions for accounts which
they or their affiliates manage, except where they have the authorization of the
persons authorized to transact business for the account and comply with certain
annual reporting requirements. The Managers Trusts and NB Management have
expressly authorized Neuberger Berman to retain such compensation, and Neuberger
Berman has agreed to comply with the reporting requirements of Section 11(a).

Under the 1940 Act, commissions paid by a Portfolio to Neuberger
Berman in connection with a purchase or sale of securities on a securities
exchange may not exceed the usual and customary broker's commission.
Accordingly, it is each Portfolio's policy that the commissions paid to
Neuberger Berman must, in NB Management's judgment, be (1) at least as favorable
as those charged by other brokers having comparable execution capability and (2)
at least as favorable as commissions contemporaneously charged by Neuberger
Berman on comparable transactions for its most favored unaffiliated customers,
except for accounts for which Neuberger Berman acts as a clearing broker for
another brokerage firm and customers of Neuberger Berman considered by a
majority of the Independent Portfolio Trustees not to be comparable to the
Portfolio. The Portfolios do not deem it practicable and in their best interests
to solicit competitive bids for commissions on each transaction effected by
Neuberger Berman. However, consideration regularly is given to information
concerning the prevailing level of commissions charged by other brokers on
comparable transactions during comparable periods of time. The 1940 Act
generally prohibits Neuberger Berman from acting as principal in the purchase of
portfolio securities from, or the sale of portfolio securities to, a Portfolio
unless an appropriate exemption is available.

A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to the commissions charged by
Neuberger Berman to the Portfolios and to its other customers and information
concerning the prevailing level of commissions charged by other brokers having
comparable execution capability. In addition, the procedures pursuant to which
Neuberger Berman effects brokerage transactions for the Portfolios must be
reviewed and approved no less often than annually by a majority of the
Independent Portfolio Trustees.

To ensure that accounts of all investment clients, including a
Portfolio, are treated fairly in the event that Neuberger Berman receives
transaction instructions regarding a security for more than one investment
account at or about the same time, Neuberger Berman may combine orders placed on
behalf of clients, including advisory accounts in which affiliated persons have
an investment interest, for the purpose of negotiating brokerage commissions or
obtaining a more favorable price. Where appropriate, securities purchased or
sold may be allocated, in terms of amount, to a client according to the
proportion that the size of the order placed by that account bears to the

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aggregate size of orders contemporaneously placed by the other accounts, subject
to de minimis exceptions. All participating accounts will pay or receive the
same price.

Under policies adopted by the Board of Trustees, Neuberger Berman
may enter into agency cross-trades on behalf of a Portfolio. An agency
cross-trade is a securities transaction in which the same broker acts as agent
on both sides of the trade and the broker or an affiliate has discretion over
one of the participating accounts. In this situation, Neuberger Berman would
receive brokerage commissions from both participants in the trade. The other
account participating in an agency cross-trade with a Portfolio cannot be an
account over which Neuberger Berman exercises investment discretion. A member of
the Board of Trustees who is not affiliated with Neuberger Berman reviews
confirmations of each agency cross-trade that the Portfolios participate in.

Each Portfolio expects that it will continue to execute a portion of
its transactions through brokers other than Neuberger Berman. In selecting those
brokers, NB Management considers the quality and reliability of brokerage
services, including execution capability, performance, and financial
responsibility, and may consider research and other investment information
provided by, and sale of Fund shares effected through, those brokers.

A committee comprised of officers of NB Management and employees of
Neuberger Berman who are portfolio managers of some of the Portfolios and Other
NB Funds (collectively, "NB Funds") and some of Neuberger Berman's managed
accounts ("Managed Accounts") evaluates semi-annually the nature and quality of
the brokerage and research services provided by other brokers. Based on this
evaluation, the committee establishes a list and projected rankings of preferred
brokers for use in determining the relative amounts of commissions to be
allocated to those brokers. Ordinarily, the brokers on the list effect a large
portion of the brokerage transactions for the NB Funds and the Managed Accounts
that are not effected by Neuberger Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from the
projected rankings. These variations reflect the following factors, among
others: (1) brokers not on the list or ranking below other brokers on the list
may be selected for particular transactions because they provide better price
and/or execution, which is the primary consideration in allocating brokerage;
(2) adjustments may be required because of periodic changes in the execution
capabilities of or research provided by particular brokers or in the execution
or research needs of the NB Funds and/or the Managed Accounts; and (3) the
aggregate amount of brokerage commissions generated by transactions for the NB
Funds and the Managed Accounts may change substantially from one semi-annual
period to the next.

The commissions paid to a broker other than Neuberger Berman may be
higher than the amount another firm might charge if NB Management determines in
good faith that the amount of those commissions is reasonable in relation to the
value of the brokerage and research services provided by the broker. NB
Management believes that those research services benefit the Portfolios by
supplementing the information otherwise available to NB Management. That
research may be used by NB Management in servicing Other NB Funds and, in some
cases, by Neuberger Berman in servicing the Managed Accounts. On the other hand,
research received by NB Management from brokers effecting portfolio transactions

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on behalf of the Other NB Funds and by Neuberger Berman from brokers effecting
portfolio transactions on behalf of the Managed Accounts may be used for the
Portfolios' benefit.

Kent C. Simons; Kevin L. Risen and Allan R. White III; Judith M.
Vale and Robert W. D'Alelio; Valerie Chang; Jennifer K. Silver and Brooke A.
Cobb; Michael F. Malouf and Jennifer K. Silver; and Benjamin E. Segal, Robert I.
Gendelman and S. Basu Mullick; Janet W. Prindle and Brooke A. Cobb, each of whom
is a Vice President of NB Management and a Managing Director of Neuberger
Berman, are the persons primarily responsible for making decisions as to
specific action to be taken with respect to the investment portfolios of
Neuberger Berman FOCUS, Neuberger Berman GUARDIAN, Neuberger Berman GENESIS,
Neuberger Berman INTERNATIONAL, Neuberger Berman MANHATTAN, Neuberger Berman
MILLENNIUM, Neuberger Berman PARTNERS, Neuberger Berman REGENCY, Neuberger
Berman SOCIALLY RESPONSIVE and Neuberger Berman CENTURY Portfolios,
respectively. Each of them has full authority to take action with respect to
portfolio transactions and may or may not consult with other personnel of NB
Management prior to taking such action. If Ms. Prindle is unavailable to perform
her responsibilities, Robert Ladd and/or Ingrid Saukaitis, each of whom is a
Vice President of NB Management, will assume responsibility for the portfolio of
Neuberger Berman SOCIALLY RESPONSIVE Portfolio.

Portfolio Turnover
- ------------------

A Portfolio's portfolio turnover rate is calculated by dividing (1)
the lesser of the cost of the securities purchased or the proceeds from the
securities sold by the Portfolio during the fiscal year (other than securities,
including options, whose maturity or expiration date at the time of acquisition
was one year or less) by (2) the month-end average of the value of such
securities owned by the Portfolio during the fiscal year.

REPORTS TO SHAREHOLDERS

Shareholders of each Fund receive unaudited semi-annual financial
statements, as well as year-end financial statements audited by the independent
auditors or independent accountants for the Fund and its corresponding
Portfolio. Each Fund's statements show the investments owned by its
corresponding Portfolio and the market values thereof and provide other
information about the Fund and its operations, including the Fund's beneficial
interest in its corresponding Portfolio.

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS

The Funds
- ---------

Each Fund is a separate ongoing series of the Trust, a Delaware
business trust organized pursuant to a Trust Instrument dated as of December 23,
1992. The Trust is registered under the 1940 Act as a diversified, open-end
management investment company, commonly known as a mutual fund. The Trust has
ten separate operating series. Each Fund invests all of its net investable
assets in its corresponding Portfolio, in each case receiving a beneficial

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interest in that Portfolio. The trustees of the Trust may establish additional
series or classes of shares without the approval of shareholders. The assets of
each series belong only to that series, and the liabilities of each series are
borne solely by that series and no other.

Prior to November 9, 1998, the name of the Trust was "Neuberger &
Berman Equity Funds," and the term "Neuberger Berman" in each Fund's name
(except Neuberger Berman REGENCY and Neuberger Berman CENTURY Funds) was
"Neuberger & Berman."

The name of Neuberger Berman FOCUS Fund was "Neuberger & Berman
Selected Sectors Fund" before January 1, 1995. Prior to January 1, 1995, the
name of Neuberger Berman FOCUS Portfolio was Neuberger & Berman Selected Sectors
Portfolio.

Prior to November 17, 1995, the name of Neuberger Berman
INTERNATIONAL Portfolio was International Portfolio.

DESCRIPTION OF SHARES. Each Fund is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Fund represent equal proportionate interests in the assets of that Fund
only and have identical voting, dividend, redemption, liquidation, and other
rights. All shares issued are fully paid and non-assessable, and shareholders
have no preemptive or other rights to subscribe to any additional shares.

SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to
hold annual meetings of shareholders of the Funds. The trustees will call
special meetings of shareholders of a Fund only if required under the 1940 Act
or in their discretion or upon the written request of holders of 10% or more of
the outstanding shares of that Fund entitled to vote.

CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the
shareholders of a Fund will not be personally liable for the obligations of any
Fund; a shareholder is entitled to the same limitation of personal liability
extended to shareholders of a corporation. To guard against the risk that
Delaware law might not be applied in other states, the Trust Instrument requires
that every written obligation of the Trust or a Fund contain a statement that
such obligation may be enforced only against the assets of the Trust or Fund and
provides for indemnification out of Trust or Fund property of any shareholder
nevertheless held personally liable for Trust or Fund obligations, respectively.

The Portfolios
- --------------

Each Portfolio (except Neuberger Berman INTERNATIONAL Portfolio) is
a separate operating series of Equity Managers Trust, a New York common law
trust organized as of December 1, 1992. Neuberger Berman INTERNATIONAL Portfolio
is a separate operating series of Global Managers Trust, a New York common law
trust organized as of March 18, 1994. The Managers Trusts are registered under
the 1940 Act as diversified, open-end management investment companies. Equity
Managers Trust has nine separate Portfolios. Global Managers Trust currently has
one operating Portfolio. The assets of each Portfolio belong only to that
Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.

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FUNDS' INVESTMENTS IN PORTFOLIOS. Each Fund is a "feeder fund" that
seeks to achieve its investment objective by investing all of its net investable
assets in its corresponding Portfolio, which is a "master fund." The Portfolio,
which has the same investment objective, policies, and limitations as the Fund,
in turn invests in securities; the Fund thus acquires an indirect interest in
those securities.

Each Fund's investment in its corresponding Portfolio is in the form
of a non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in a Portfolio. Series of three other investment
companies, Neuberger Berman Equity Trust ("Equity Trust"), Neuberger Berman
Equity Assets ("Equity Assets") and Neuberger Berman Equity Series ("Equity
Series"), invest all of their respective net assets in corresponding Portfolios
of Equity Managers Trust. Equity Trust, Equity Assets and Equity Series do not
sell their shares directly to members of the general public.

Each Portfolio may also permit other investment companies and/or
other institutional investors to invest in the Portfolio. All investors will
invest in a Portfolio on the same terms and conditions as a Fund and will pay a
proportionate share of the Portfolio's expenses. Other investors in a Portfolio
are not required to sell their shares at the same public offering price as a
Fund, could have a different administration fee and expenses than a Fund, and
(except Equity Trust, Equity Assets and Equity Series) might charge a sales
commission. Therefore, Fund shareholders may have different returns than
shareholders in another investment company that invests exclusively in the
Portfolio. There is currently no such other investment company that offers its
shares directly to members of the general public. Information regarding any Fund
that invests in a Portfolio is available from NB Management by calling
800-877-9700.

The trustees of the Trust believe that investment in a Portfolio by
a series of Equity Trust, Equity Assets or Equity Series, or by other potential
investors in addition to a Fund may enable the Portfolio to realize economies of
scale that could reduce its operating expenses, thereby producing higher returns
and benefiting all shareholders. However, a Fund's investment in its
corresponding Portfolio may be affected by the actions of other large investors
in the Portfolio, if any. For example, if a large investor in a Portfolio (other
than a Fund) redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.

Each Fund may withdraw its entire investment from its corresponding
Portfolio at any time, if the trustees of the Trust determine that it is in the
best interests of the Fund and its shareholders to do so. A Fund might withdraw,
for example, if there were other investors in a Portfolio with power to, and who
did by a vote of all investors (including the Fund), change the investment
objective, policies, or limitations of the Portfolio in a manner not acceptable
to the trustees of the Trust. A withdrawal could result in a distribution in
kind of portfolio securities (as opposed to a cash distribution) by the
Portfolio to the Fund. That distribution could result in a less diversified
portfolio of investments for the Fund and could affect adversely the liquidity
of the Fund's investment portfolio. If the Fund decided to convert those
securities to cash, it usually would incur brokerage fees or other transaction
costs. If a Fund withdrew its investment from a Portfolio, the trustees of the
Trust would consider what actions might be taken, including the investment of
all of the Fund's net investable assets in another pooled investment entity

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having substantially the same investment objective as the Fund or the retention
by the Fund of its own investment manager to manage its assets in accordance
with its investment objective, policies, and limitations. The inability of the
Fund to find a suitable replacement could have a significant impact on
shareholders.

INVESTOR MEETINGS AND VOTING. Each Portfolio normally will not hold
meetings of investors except as required by the 1940 Act. Each investor in a
Portfolio will be entitled to vote in proportion to its relative beneficial
interest in the Portfolio. On most issues subjected to a vote of investors, a
Fund will solicit proxies from its shareholders and will vote its interest in
the Portfolio in proportion to the votes cast by the Fund's shareholders. If
there are other investors in a Portfolio, there can be no assurance that any
issue that receives a majority of the votes cast by Fund shareholders will
receive a majority of votes cast by all Portfolio investors; indeed, if other
investors hold a majority interest in a Portfolio, they could have voting
control of the Portfolio.

CERTAIN PROVISIONS. Each investor in a Portfolio, including a Fund,
will be liable for all obligations of the Portfolio. However, the risk of an
investor in a Portfolio incurring financial loss beyond the amount of its
investment on account of such liability would be limited to circumstances in
which the Portfolio had inadequate insurance and was unable to meet its
obligations out of its assets. Upon liquidation of a Portfolio, investors would
be entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.

CUSTODIAN AND TRANSFER AGENT

Each Fund and Portfolio has selected State Street Bank and Trust
Company, 225 Franklin Street, Boston, MA 02110, as custodian for its securities
and cash. State Street also serves as each Fund's transfer and shareholder
servicing agent, administering purchases, redemptions, and transfers of Fund
shares and the payment of dividends and other distributions through its Boston
Service Center. All correspondence should be mailed to Neuberger Berman Funds,
c/o Boston Service Center, P.O. Box 8403, Boston, MA 02266-8403. In addition,
State Street serves as transfer agent for each Portfolio (except Neuberger
Berman INTERNATIONAL Portfolio). State Street Cayman serves as transfer agent
for Neuberger Berman INTERNATIONAL Portfolio.

INDEPENDENT AUDITORS/ACCOUNTANTS

Each Fund and Portfolio (other than Neuberger Berman INTERNATIONAL
Fund and Portfolio, Neuberger Berman MANHATTAN Fund and Portfolio, Neuberger
Berman SOCIALLY RESPONSIVE Fund and Portfolio, Neuberger Berman REGENCY Fund and
Portfolio, and Neuberger Berman MILLENNIUM Fund and Portfolio) has selected
Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02116, as the independent
auditors who will audit its financial statements. Neuberger Berman INTERNATIONAL
Portfolio has selected Ernst & Young, Shedden Road, George Town, Grand Cayman,
Cayman Islands, British West Indies as the independent auditors who will audit
its financial statements. Neuberger Berman MANHATTAN Fund and Portfolio,

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Neuberger Berman SOCIALLY RESPONSIVE Fund and Portfolio, Neuberger Berman
REGENCY Fund and Portfolio, and Neuberger Berman MILLENNIUM Fund and Portfolio
have selected PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110,
as the independent accountants who will audit their financial statements.

LEGAL COUNSEL

Each Fund and Portfolio has selected Kirkpatrick & Lockhart LLP,
1800 Massachusetts Avenue, N.W., 2nd Floor, Washington, D.C. 20036-1800, as its
legal counsel.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table sets forth the name, address, and percentage of
ownership of each person who was known by each Fund to own beneficially or of
record 5% or more of that Fund's outstanding shares at October 30, 1999:

Percentage of
Ownership at
Name and Address October 30, 1999
---------------- ----------------

Neuberger Berman Charles Schwab & Co., Inc.* 6.28%
MANHATTAN Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman Charles Schwab & Co., Inc.* 27.83%
GENESIS Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman Charles Schwab & Co., Inc.* 20.62%
GUARDIAN Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman Charles Schwab & Co., Inc.* 14.91%
PARTNERS Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman Charles Schwab & Co., Inc.* 26.04%
SOCIAL RESPONSIVE Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman 5.32%
55 Water Street, 27th Floor
New York, NY 10041-0098

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Percentage of
Ownership at
Name and Address October 30, 1999
---------------- ----------------

Neuberger Berman FOCUS Charles Schwab & Co., Inc.* 10.00%
Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman Charles Schwab & Co., Inc.* 9.98%
INTERNATIONAL Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman* 13.78%
55 Water Street, 27th Floor
New York, NY 10041-0098
Operations Control

Town of Cheshire Retirement Plan 5.99%
Town of Cheshire
84 S. Main Street
Chesire, CT 06410-3108

Neuberger Berman Neuberger Berman* 14.15%
MILLENIUM Fund 55 Water Street, 27th Floor
New York, NY 10041-0098
Attn: Operations Control

Charles Schwab & Co., Inc.* 15.92%
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman Charles Schwab & Co., Inc.* 30.34%
REGENCY Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122

Neuberger Berman* 23.83%
55 Water Street, 27th Floor
New York, NY 10041-0098

- --------------------------

* Charles Schwab & Co., Inc. and Neuberger Berman hold these shares of
record for the accounts of certain of their clients and have informed the
Funds of their policy to maintain the confidentiality of holdings in their
client accounts unless disclosure is expressly required by law.

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REGISTRATION STATEMENT

This SAI and the Prospectus do not contain all the information
included in the Trust's registration statement filed with the SEC under the 1933
Act with respect to the securities offered by the Prospectus. The registration
statement, including the exhibits filed therewith, may be examined at the SEC's
offices in Washington, D.C. The SEC maintains a Website (http://www.sec.gov)
that contains this SAI, material incorporated by reference, and other
information regarding the Funds and Portfolios.

Statements contained in this SAI and in the Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete. In each instance where reference is made to the copy of any contract
or other document filed as an exhibit to the registration statement, each such
statement is qualified in all respects by such reference.

FINANCIAL STATEMENTS

The following financial statements and related documents are
incorporated herein by reference from the Funds' Annual Report to shareholders
for the fiscal year ended August 31, 1999:

The audited financial statements of the Funds and Portfolios and
notes thereto for the fiscal year ended August 31, 1999, and the
reports of Ernst & Young LLP, independent auditors, with respect to
such audited financial statements of Neuberger Berman GENESIS Fund
and Portfolio, Neuberger Berman GUARDIAN Fund and Portfolio,
Neuberger Berman PARTNERS Fund and Portfolio, Neuberger Berman FOCUS
Fund and Portfolio, and Neuberger Berman INTERNATIONAL Fund; the
report of Ernst & Young, independent auditors, with respect to such
audited financial statements of Neuberger Berman INTERNATIONAL
Portfolio; and the reports of PricewaterhouseCoopers LLP,
independent accountants, with respect to such audited financial
statements of Neuberger Berman Manhattan Fund and Portfolio,
Neuberger Berman REGENCY Fund and Portfolio, Neuberger Berman
MILLENNIUM Fund and Portfolio, and Neuberger Berman SOCIALLY
RESPONSIVE Fund and Portfolio.

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Appendix A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER
- -----------------------------------------------

S&P CORPORATE BOND RATINGS:
- ---------------------------

AAA - Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small degree.

A - Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.

BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.

BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

CI - The rating CI is reserved for income bonds on which no interest
is being paid.

D - Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.

PLUS (+) OR MINUS (-) - The ratings above may be modified by the
addition of a plus or minus sign to show relative standing within the major
categories.

MOODY'S CORPORATE BOND RATINGS:
-------------------------------

Aaa - Bonds rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or an exceptionally
stable margin, and principal is secure. Although the various protective elements
are likely to change, the changes that can be visualized are most unlikely to
impair the fundamentally strong position of the issuer.

Aa - Bonds rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as "high grade bonds." They are rated lower than the best bonds because margins

A-1
<PAGE>

of protection may not be as large as in Aaa-rated securities, fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present that make the long-term risks appear somewhat larger than in Aaa-rated
securities.

A - Bonds rated A possess many favorable investment attributes and
are considered to be upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present that
suggest a susceptibility to impairment sometime in the future.

- Bonds which are rated Baa are considered as medium grade
obligations; i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. These bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.

Ba - Bonds rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa - Bonds rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca - Bonds rated Ca represent obligations that are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C - Bonds rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

MODIFIERS - Moody's may apply numerical modifiers 1, 2, and 3 in
each generic rating classification described above. The modifier 1 indicates
that the security ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issuer ranks in the lower end of its generic rating category.

S&P COMMERCIAL PAPER RATINGS:

A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+).

A-2
<PAGE>

MOODY'S COMMERCIAL PAPER RATINGS

Issuers rated PRIME-1 (or related supporting institutions), also
known as P-1, have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by the
following characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structures with moderate reliance
on debt and ample asset protection.

- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.

- Well-established access to a range of financial markets and
assured sources of alternate liquidity.