NEUBERGER BERMAN EQUITY FUNDS
485APOS, 2000-12-22
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    As filed with the Securities and Exchange Commission on December 22, 2000
                        1933 Act Registration No. 2-11357
                        1940 Act Registration No. 811-582

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933             [ X ]
         Pre-Effective Amendment No.      [   ]      [   ]
         Post-Effective Amendment No.     [ 93]      [ X ]
                  and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940     [ X ]

         Amendment No.                    [ 48]      [ X ]

                        (Check appropriate box or boxes)

                          NEUBERGER BERMAN EQUITY FUNDS
                          -----------------------------
             (Exact Name of the Registrant as Specified in Charter)
                           605 Third Avenue, 2nd Floor
                          New York, New York 10158-0180
                    (Address of Principal Executive Offices)

       Registrant's Telephone Number, including area code: (212) 476-8800

                          Michael M. Kassen, President
                          Neuberger Berman Equity Funds
                           605 Third Avenue, 2nd Floor
                          New York, New York 10158-0180

                            Arthur C. Delibert, Esq.
                           Kirkpatrick & Lockhart LLP
                   1800 Massachusetts Avenue, N.W., 2nd Floor
                           Washington, D.C. 20036-1800
                   (Names and Addresses of agents for service)

Approximate Date of Proposed Public Offering: Continuous

It is proposed that this filing will become effective:

[ ]  immediately  upon filing  pursuant to  paragraph  (b)
[ ]  on  _____________ pursuant to paragraph (b)
[ ]  60 days after filing pursuant to paragraph  (a)(1)
[ ]  on  _______________  pursuant to paragraph  (a)(1)
[X]  75 days after filing pursuant to paragraph (a)(2)
[ ]  on _______________ pursuant to paragraph (a)(2)



<PAGE>


                          NEUBERGER BERMAN EQUITY FUNDS
            CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 93 ON FORM N-1A


         This  post-effective  amendment  consists of the  following  papers and
documents:

Cover Sheet

Contents of Post-Effective Amendment No. 93 on Form N-1A

         Neuberger Berman Equity Funds

                  Neuberger Berman Fasciano Fund

         Part A - Investor Class Prospectus

         Part B - Statement of Additional Information

         Part C - Other Information

Signature Pages





<PAGE>


                    NEUBERGER BERMAN EQUITY FUNDS(REGISTERED)

                              INVESTOR CLASS SHARES

                              SUBJECT TO COMPLETION


                        PROSPECTUS DATED: MARCH __, 2001



                                NEUBERGER BERMAN

                                  FASCIANO FUND

         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.

THE  INFORMATION IN THIS  PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.  WE MAY
NOT SELL  THESE  SECURITIES  UNTIL THE  REGISTRATION  STATEMENT  FILED  WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO  SELL  THESE  SECURITIES  AND IT IS NOT  SOLICITING  AN  OFFER  TO BUY  THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.








<PAGE>


                                TABLE OF CONTENTS

                                                                         Page
                                                                         ----

NEUBERGER BERMAN FASCIANO FUND.................................................3
------------------------------
YOUR INVESTMENT................................................................9
---------------
PRIVILEGES AND SERVICES.......................................................10
-----------------------
DISTRIBUTIONS AND TAXES.......................................................11
-----------------------
MAINTAINING YOUR ACCOUNT......................................................12
------------------------
BUYING SHARES.................................................................15
-------------
SELLING SHARES................................................................17
--------------
FUND STRUCTURE................................................................19
--------------


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)2001 Neuberger Berman Management Inc.









                                       ii
<PAGE>


NEUBERGER BERMAN FASCIANO FUND

THIS FUND

         ||  is designed for investors with long-term goals in mind

         ||  offers you the opportunity to participate in financial markets
             through a professionally managed stock portfolio

         ||  also offers the opportunity to diversify your portfolio with a fund
             that invests using a combination of a value and growth approach

         ||  carries certain risks, including the risk that you could lose money
             if fund shares are worth less than what you paid

         ||  is a mutual fund, not a bank deposit, and is not guaranteed or
             insured by the FDIC or any other government agency

FUND MANAGEMENT [SIDE BAR]

         The  Neuberger  Berman  Fasciano  Fund is managed by  Neuberger  Berman
Management  Inc., in conjunction  with Neuberger  Berman,  LLC, as  sub-adviser.
Together,  the firms  manage $___  billion in total  assets (as of December  31,
2000) and continue an asset management history that began in 1939.

RISK INFORMATION [SIDE BAR]

         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).

GOAL AND STRATEGY

         The Fund seeks long-term capital growth. The portfolio manager also may
consider a company's  potential for current income prior to selecting it for the
Fund.

         To pursue  this  goal,  the Fund will  invest  primarily  in the common
stocks of smaller companies, I.E. those with market capitalizations of less than
$1.5  billion  at the  time the  Fund  first  invests  in  them.  These  include
securities having common stock  characteristics,  such as securities convertible
into common  stocks,  and rights and  warrants to purchase  common  stocks.  The
manager will look for companies with:

         ||  strong business franchises that are likely to sustain long-term
             rates of earnings growth for a three to five year time horizon, and


<PAGE>


         ||  stock prices that the market has under-valued relative to the
             value of similar companies and that offer excellent potential to
             appreciate over a three to five year time horizon.

         In choosing  companies that the manager  believes are likely to achieve
the Fund's  objective,  the manager  also will  consider the  company's  overall
business qualities. These qualities include the company's profitability and cash
flow, financial condition,  insider ownership, and stock valuation. In selecting
companies that the manager believes may have greater  potential to appreciate in
price,  the  manager  will  invest  the  Fund  in  smaller  companies  that  are
under-followed  by major Wall Street brokerage houses and large asset management
firms.  However,  the Fund may hold the stocks of small companies that grow into
medium-size  companies,  and those whose market capitalizations grow beyond $1.5
billion.

         The  Fund  may  not  be  suitable  for  you if  you  have a  short-term
investment  horizon or are  unwilling  to accept  fluctuations  in share  price,
including significant declines over a given period.

         Although  the Fund  primarily  will invest in  companies on a long-term
basis,  from time to time, the Fund may invest on a short-term basis or may sell
within a few months securities that it originally had intended to be a long-term
investment if the security no longer meets the quality or valuation requirements
of the Fund.

         The Fund  generally  will seek to be fully  invested in common  stocks.
However,  at times,  the manager may invest a large portion of the Fund's assets
in cash if the manager is unable to locate and invest in a sufficient  number of
companies that meet the Fund's quality and valuation requirements.

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

         At times,  the manager may emphasize  certain  sectors that he believes
will benefit from market or economic trends.

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

SMALL-CAP STOCKS [SIDE BAR]

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

GROWTH VS. VALUE INVESTING [SIDE BAR]

         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.


                                       4
<PAGE>


MAIN RISKS

         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.

         The smaller companies in which the Fund invests are often more volatile
and less  liquid  than the stocks of larger  companies  and

         ||  may have a shorter history of operations than large companies;

         ||  may not have as great an ability to raise additional capital;

         ||  may have a less diversified product line, making them more
             susceptible to market pressure.

         Small-cap stocks may also:

         ||  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 manager decided to emphasize.

         The Fund will  combine  value and growth  styles of  investing.  Growth
stocks may suffer more than value stocks  during market  downturns,  while value
stocks may remain undervalued if other investors do not recognize their worth.

OTHER RISKS [SIDE BAR]

         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 will increase 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 about foreign issuers than about
domestic issuers.


                                       5
<PAGE>


         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.

PERFORMANCE

         The charts  below  provide an  indication  of the risks of investing in
Investor  Class  shares  of the  Fund.  The  bar  chart  shows  how  the  fund's
performance  has varied from year to year.  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  broader  measures  of  market
performance.  This  information  is  based  on  past  performance;  it's  not  a
prediction of future results.

BAR CHART
---------------------------------------------------------------------------
Year-By-Year % Returns as of 12/31 each year*
---------------------------------------------------------------------------
1990                            -1.18%
---------------------------------------------------------------------------
1991                            35.08%
---------------------------------------------------------------------------
1992                            7.67%
---------------------------------------------------------------------------
1993                            8.08%
---------------------------------------------------------------------------
1994                            3.68%
---------------------------------------------------------------------------
1995                            31.12%
---------------------------------------------------------------------------
1996                            26.54%
---------------------------------------------------------------------------
1997                            21.51%
---------------------------------------------------------------------------
1998                            7.19%
---------------------------------------------------------------------------
1999                            6.16%
---------------------------------------------------------------------------
2000                            ____%
---------------------------------------------------------------------------
Best Quarter: Q _, __, ____%       Worst Quarter: Q _, __, ____%
---------------------------------------------------------------------------
Year-to-date performance as of __/__/__: ___%
---------------------------------------------------------------------------

[TABLE]
--------------------------------------------------------------------------------
                 Average Annual Total % Returns as of 12/31/00*
--------------------------------------------------------------------------------
                       1 Year               5 Years               10 Years
--------------------------------------------------------------------------------
Fasciano Fund           ____%                 ____%                  ____%
--------------------------------------------------------------------------------
Russell 2000 Index      ____%                 ____%                  ____%
--------------------------------------------------------------------------------
The Russell 2000 is an unmanaged index of U.S. small-cap stocks.
--------------------------------------------------------------------------------



                                       6
<PAGE>


* This Fund is the successor to Fasciano Fund, Inc. The  year-by-year  and total
return  data  shown  for the  period  prior to March  __,  2001 are those of its
predecessor, Fasciano Fund, Inc.

PERFORMANCE MEASURES [SIDE BAR]

         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 a broad-based  index.  The
Fund's  performance  figures  include  all of its  expenses;  the index does not
include costs of investment.

INVESTOR EXPENSES

         The  Fund  does  not  charge  you any  fees  for  buying,  selling,  or
exchanging  Investor Class 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.
--------------------------------------------------------------------------------
                         Management fees                  1.00%
--------------------------------------------------------------------------------
PLUS:                    Distribution (12b-1) fees        NONE
--------------------------------------------------------------------------------
                         Other expenses                   0.20%*
--------------------------------------------------------------------------------
EQUALS                   Total Annual Operating Expenses  1.20%
--------------------------------------------------------------------------------
*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.

                   1 YEAR       3 YEARS      5 YEARS       10 YEARS
Expenses              $            $            $              $



                                       7
<PAGE>


MANAGEMENT [SIDE BAR]

MICHAEL  FASCIANO is a Vice  President  of  Neuberger  Berman  Management  and a
Managing  Director of Neuberger  Berman,  LLC and has managed the Fund's  assets
since March __, 2001. He managed Fasciano Fund Inc., the Fund's predecessor from
it inception in 1987 to 2001.

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/administration
services, the Fund will pay Neuberger Berman Management a fee at the annual rate
of 1.00% of average net assets.

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS*

[TABLE]
----------------------------------------------------------------------------------------------------------------------
Year Ended June 30                                             1996        1997        1998        1999       2000
<S>                                                            <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        $20.17      $24.33      $27.53      $34.91     $31.78
----------------------------------------------------------------------------------------------------------------------
PLUS:           Income from investment operations
----------------------------------------------------------------------------------------------------------------------
                Net investment income (loss)                  (0.05)      (0.03)       0.16        0.40       0.34
----------------------------------------------------------------------------------------------------------------------
                Net gains/(losses) - realized and              5.55        3.82        8.71       (2.25)      0.82
                unrealized
----------------------------------------------------------------------------------------------------------------------
                Subtotal: income from investment               5.50        3.79        8.87       (1.85)      1.16
                operations
----------------------------------------------------------------------------------------------------------------------
MINUS:          Distributions to shareholders
----------------------------------------------------------------------------------------------------------------------
                Income Dividends                               0.00        0.00        0.00       (0.03)     (0.39)
----------------------------------------------------------------------------------------------------------------------
                Capital gain distributions                    (1.34)      (0.59)      (1.49)      (1.25)      0.00
----------------------------------------------------------------------------------------------------------------------
                Subtotal: distributions to shareholders       (1.34)      (0.59)      (1.49)      (1.28)     (0.39)
----------------------------------------------------------------------------------------------------------------------
EQUALS:         Share price (NAV) at end of year              $24.33      $27.53      $34.91      $31.78     $32.55
----------------------------------------------------------------------------------------------------------------------
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                                          1.5%        1.4%        1.3%        1.2%       1.2%
----------------------------------------------------------------------------------------------------------------------
Expenses1
----------------------------------------------------------------------------------------------------------------------
Net investment income - actual                                (0.3%)      (0.4%)       0.2%        1.8%       1.8%
----------------------------------------------------------------------------------------------------------------------

----------------------------------
1 Shows what expenses would have been if there had been no expense offset
arrangements.


                                        8
<PAGE>



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.

<S>                                                            <C>         <C>         <C>         <C>        <C>
----------------------------------------------------------------------------------------------------------------------
Total return %                                                28.3%        15.8%       33.2%      (5.2)%      3.7%
----------------------------------------------------------------------------------------------------------------------
Net assets at end of year (millions of dollars)               $29.0        $42.1       $95.0      $418.2     $266.9
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                       45.6%        41.0%       49.8%      19.8%       29.4%
----------------------------------------------------------------------------------------------------------------------
*The figures above are from the Fund's predecessor fund, the Fasciano  Fund, Inc., and have been
audited by Arthur  Anderson, LP, the predecessor fund's independent accountants.  Their report along
with full financial statements, appears in the Fasciano Fund's most recent shareholder report (see back cover).
----------------------------------------------------------------------------------------------------------------------
</TABLE>

YOUR INVESTMENT

SHARE PRICES

         Because  Investor  Class Shares of the Fund do not have sales  charges,
the price you pay for each share is the Fund's  net asset  value per share.  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 Fund is 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 (see  "Maintaining  Your Account" for  instructions on placing
orders). The 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 the Fund could change on days
when you can't buy or sell shares. Remember,  though, any purchase or sale takes
place at the next share price calculated after your order is accepted.

SHARE PRICE CALCULATIONS [SIDE BAR]

         The price of  Investor  Class  Shares of the Fund is the total value of
the assets attributable to Investor Class minus the liabilities  attributable to
that class,  divided by the total number of Investor  Class shares  outstanding.
(As of the date of this  prospectus,  the Fund has no other  classes  of  shares
outstanding).  Because the value of the Fund's securities changes every business
day, the share price usually changes as well.

         When  valuing  portfolio  securities,  the  Fund  uses  market  prices.
However,  in rare cases, events that occur after certain markets have closed may


                                       9
<PAGE>

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.  The Fund may also use these
methods to value certain types of illiquid securities.

PRIVILEGES AND SERVICES

         If you purchase  Investor Class 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 the 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.nb.com, you can make transactions,  check your
account, and access a wealth of information.

         FUNDFONE(REGISTERED)  -  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.

DOLLAR-COST AVERAGING [SIDE BAR]

         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.



                                       9
<PAGE>


DISTRIBUTIONS AND TAXES

         DISTRIBUTIONS  - The Fund pays out to  shareholders  any net income and
net capital gains. The Fund makes these distributions once a year (in December).

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

         ||  receive all distributions in cash

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

         Distributions  taken in cash can be sent to you by check, by electronic
transfer to a designated  bank  account or invested in Investor  Class shares of
another NB fund of the same account  registration.  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 the Fund will be  reinvested in the
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 December 31. Your tax statement will help clarify this for you.

         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.

BUYING SHARES BEFORE A DISTRIBUTION [SIDE BAR]

         The money the Fund  earns,  either as income or as  capital  gains,  is
reflected in its share price until it 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  the  Fund  makes a
distribution,  you'll end up getting some of your  investment  back as a taxable


                                       11
<PAGE>


distribution.  You can avoid this situation by waiting to invest until after the
record date for the distribution.

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

TAXES AND YOU [SIDE BAR]

         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.

MAINTAINING YOUR ACCOUNT

         WHEN YOU BUY SHARES -  Instructions  for buying  shares from  Neuberger
Berman Management are on page 12. See the sidebars on pages 13 and 14 if you are
buying  shares  through an  investment  provider.  Whenever  you make an initial
investment in the Fund 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 16 and 17. See the
sidebars on pages 10 and 13 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;  clearance may take up to 15 days from the
             date of purchase

         The Fund does 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.

         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.


                                       12
<PAGE>


         In some  cases,  you will have to place  your  order to sell  shares in
writing, and you will need a signature guarantee. 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 any 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 replacement.

         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 the Fund to another
NB fund  through  an  exchange  of  shares,  or by  electing  to use  your  cash
distributions  from the Fund to  purchase  Investor  Class  shares of another NB
fund. 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 - Fund investors have the option of placing
telephone orders, subject to certain restrictions.  On non-retirement  accounts,


                                       13
<PAGE>


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.

         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 the 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 Fund reserves 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

BACKUP WITHHOLDING [SIDE BAR]

         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.


                                       14
<PAGE>


SIGNATURE GUARANTEES [SIDE BAR]

         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.

INVESTMENT PROVIDERS [SIDE BAR]

         The Investor  Class 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 Fund
and by Neuberger Berman Management.  However, if you use an investment provider,
most of the information  you'll need for maintaining your account will come from
that provider. This includes information on how to buy and sell shares, investor
services, and additional policies.

         If you use an  investment  provider,  you must contact that provider to
buy or sell shares of the Fund described in this prospectus.

         Most  investment  providers  allow you to take advantage of the NB fund
exchange program, which is designed for moving money from one NB fund to another
through an exchange of shares. See page 12 for more information.

BUYING SHARES

Method                       Things to know

--------------------------------------------------------------------------------
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      All exchanges must be for at least $1,000
fund


                                       15
<PAGE>


                             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
--------------------------------------------------------------------------------
By telephone                 We do not accept phone orders for a first
                             investment

                             Additional investments must be for at least $1,000

                             Shares will be purchase at the time we receive your
                             money

                             Not available on retirement accounts
--------------------------------------------------------------------------------
Setting up systematic        All investments must be at least $100
investments

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), call 800-335-9366
--------------------------------------------------------------------------------
Call 800-877-9700 to notify us of your purchase


                                       16
<PAGE>


Immediately follow up with a wire or electronic transfer

To add shares to an existing account using FUNDFONE(R), call 800-335-9366
--------------------------------------------------------------------------------
Call 800-877-9700 for instructions


RETIREMENT PLANS [SIDE BAR]

         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.

SELLING SHARES

Method                       Things to know

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

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



                                       17
<PAGE>

Method                       Things to know
--------------------------------------------------------------------------------
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      All exchanges must be for at least $1,000
fund

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

                             Withdrawals must be at least $100
--------------------------------------------------------------------------------
Redemption fee               There is no redemption fee for Fund shares.


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, 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

--------------------------------------------------------------------------------
Write a request to sell shares as described above
--------------------------------------------------------------------------------


                                       18
<PAGE>


--------------------------------------------------------------------------------
Call 800-877-9700 to obtain the correct fax number
--------------------------------------------------------------------------------
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(R), call 800-335-9366
--------------------------------------------------------------------------------
Call 800-877-9700 to place your order

To place an order using FUNDFONE(R), call 800-335-9366
--------------------------------------------------------------------------------
See page 16 or call 800-877-9700 for more information


INTERNET CONNECTION [SIDE BAR]

         Investors with Internet  access can enjoy many valuable and time-saving
features by visiting us on the World Wide Web at www.nb.com.

         The  site  offers  complete   information  on  all  NB  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.

FUND STRUCTURE

         The Fund  uses a  "multiple  class"  structure.  As of the date of this
prospectus, the Fund offers one class of shares, the Investor Class.

CONVERSION TO THE EURO [SIDE BAR]

         Like other  mutual  funds,  the NB 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 NB 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.


                                       19
<PAGE>


NEUBERGER BERMAN FASCIANO FUND
INVESTOR CLASS SHARES

         ||  No load
         ||  No sales charges
         ||  No 12b-1 fees

         If you'd like further details on this Fund, 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 about strategies and
             market conditions
         ||  Fund performance data and financial statements
         ||  Complete portfolio holdings

STATEMENT  OF  ADDITIONAL  INFORMTION  - The  SAI  contains  more  comprehensive
information on this Fund, including:

         ||  Various types of securities and practices, and their risks
         ||  Investment limitations and additional policies
         ||  Information about the Fund's management and business structure

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

OBTAINING INFORMATION [SIDE BAR]

         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]
---------------------



                                       20
<PAGE>


         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.

Investment Manager:
NEUBERGER BERMAN MANAGEMENT INC.

Sub-Adviser:
NEUBERGER BERMAN, LLC

Neuberger Berman Management Inc.
605 Third Avenue 2nd Floor
New York, NY 10158-0180


                                                        SEC file number: 811-582





                                       21

<PAGE>
--------------------------------------------------------------------------------

                         NEUBERGER BERMAN FASCIANO FUND

                       STATEMENT OF ADDITIONAL INFORMATION

                              Investor Class Shares

                              SUBJECT TO COMPLETION

                              DATED: MARCH __, 2001
--------------------------------------------------------------------------------

              605 Third Avenue, 2nd Floor, New York, NY 10158-0180
                             Toll Free 800-877-9700

      Neuberger  Berman  FASCIANO  Fund  ("Fund")  is a mutual  fund that offers
shares pursuant to a Prospectus dated March __, 2001,

      The  Prospectus  for the investor  share class  provides more  information
about the Fund 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. You should read the prospectus carefully before investing.

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

      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 the Fund or its distributor. The Prospectus and this SAI do not constitute an
offering  by the 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 names in this SAI
are either  service  marks or  registered  trademarks  of NB  Management.(C)2001
Neuberger Berman Management Inc.

THE INFORMATION IN THIS SAI IS NOT COMPLETE AND MAY BE CHANGED.  WE MAY NOT SELL
THESE SECURITIES UNTIL THE REGISTRATION  STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS SAI IS NOT A PROSPECTUS.


<PAGE>


                                TABLE OF CONTENTS

                                                                           PAGE

INVESTMENT INFORMATION.......................................................1

INVESTMENT POLICIES AND LIMITATIONS..........................................1

   CASH MANAGEMENT AND TEMPORARY DEFENSIVE POSITIONS.........................3

   INVESTMENT INSIGHT........................................................3

PERFORMANCE INFORMATION.....................................................17

   COMPARATIVE INFORMATION..................................................18

   OTHER PERFORMANCE INFORMATION............................................19

CERTAIN RISK CONSIDERATIONS.................................................20

TRUSTEES AND OFFICERS.......................................................20

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES...........................30

   INVESTMENT MANAGER AND ADMINISTRATOR.....................................30

   MANAGEMENT AND ADMINISTRATION FEES.......................................31

   SUB-ADVISER..............................................................32

   INVESTMENT COMPANIES MANAGED.............................................32

   CODES OF ETHICS..........................................................34

   MANAGEMENT AND CONTROL OF NB MANAGEMENT AND NEUBERGER BERMAN.............34

DISTRIBUTION ARRANGEMENTS...................................................35

ADDITIONAL PURCHASE INFORMATION.............................................36

   SHARE PRICES AND NET ASSET VALUE.........................................36

   AUTOMATIC INVESTING AND DOLLAR COST AVERAGING............................36

ADDITIONAL EXCHANGE INFORMATION.............................................37

ADDITIONAL REDEMPTION INFORMATION...........................................40

   SUSPENSION OF REDEMPTIONS................................................40

   REDEMPTIONS IN KIND......................................................40

DIVIDENDS AND OTHER DISTRIBUTIONS...........................................40

ADDITIONAL TAX INFORMATION..................................................41

   TAXATION OF THE FUND.....................................................41

   TAXATION OF THE FUND'S SHAREHOLDERS......................................43

FUND TRANSACTIONS...........................................................44

   PORTFOLIO TURNOVER.......................................................47

REPORTS TO SHAREHOLDERS.....................................................47

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS..............................47


<PAGE>

CUSTODIAN AND TRANSFER AGENT................................................48

INDEPENDENT AUDITORS........................................................48

LEGAL COUNSEL...............................................................48

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.........................48

FINANCIAL STATEMENTS........................................................49

APPENDIX A: RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER................A-1

















                                       ii
<PAGE>

                             INVESTMENT INFORMATION

       The 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.

       On March __, 2001, the Fund assumed all the assets and liabilities of the
Fasciano Fund,  Inc. Prior to that date, the Neuberger  Berman Fasciano Fund had
no operations.  Financial and performance information in this SAI is that of the
predecessor fund.

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

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

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

       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."

INVESTMENT POLICIES AND LIMITATIONS

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

      The Fund's fundamental investment policies and limitations are as follows:

      1. BORROWING. The Fund may not borrow money, except that it 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 the Fund's
total assets, it will reduce its borrowings within three days (excluding Sundays
and holidays) to the extent necessary to comply with the 33-1/3% limitation.

      2.  COMMODITIES.  The  Fund  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 Fund 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.


<PAGE>

      3.  DIVERSIFICATION.  The Fund may not, 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  ("U.S.  Government  and Agency  Securities"),  or  securities
issued by other registered  investment companies) if, as a result, (i) more than
5% of the value of the Fund's total  assets would be invested in the  securities
of that  issuer or (ii) the Fund  would  hold  more than 10% of the  outstanding
voting securities of that issuer.

      4. INDUSTRY CONCENTRATION. The Fund may not 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 U.S.  Government and
Agency Securities.

      5.  LENDING.  The Fund may not 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.  The Fund may not purchase real estate unless acquired
as a result of the ownership of securities or instruments,  but this restriction
shall not prohibit  the Fund 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.

      7. SENIOR SECURITIES. The Fund may not issue senior securities,  except as
permitted under the 1940 Act.

      8.  UNDERWRITING.  The  Fund  may not  underwrite  securities  of  other
issuers,  except  to the  extent  that  the  Fund,  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 Fund does not consider
foreign currencies or forward contracts to be physical commodities.

      The Fund has the following fundamental investment policy:

             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.

      The following investment policies and limitations are non-fundamental:

      1.  BORROWING.  The  Fund  may  not  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,  the Fund may not make any loans  other than  securities
loans.



                                       2
<PAGE>

      3. MARGIN  TRANSACTIONS.  The Fund may not purchase  securities  on margin
from brokers or other lenders,  except that the Fund 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.  The Fund may not 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.  The Fund may not 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 Fund has valued the securities, such as repurchase agreements maturing
in more than seven days.

      Although  the Fund  does not have  policies  limiting  its  investment  in
warrants,  the Fund does not  currently  intend to  invest  in  warrants  unless
acquired in units or attached to securities.

      CASH MANAGEMENT AND TEMPORARY DEFENSIVE POSITIONS. For temporary defensive
purposes, or to manage cash pending investment or payout, the Fund 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.

      Pursuant to an exemptive  order  received  from the SEC, the Fund also may
invest up to 25% of its total assets in shares of a money market fund managed by
NB  Management  to  manage  uninvested  cash and  cash  collateral  received  in
connection with securities lending.

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 invested in the Neuberger Berman mutual funds.

      In advertisements,  the Fund's allocation to a particular market sector(s)
may be discussed as a way to demonstrate  how the fund manager  uncovers  stocks
that he perceives to fit the Fund's investment parameters. These discussions may
include references to current or former holdings of the Fund.

ADDITIONAL INVESTMENT INFORMATION

      The Fund may make the following  investments,  among others, some of which
are part of the Fund's  principal  investment  strategies  and some of which are
not. The principal risks of the Fund's principal strategies are discussed in the
Prospectus.  It may not buy all of the  types  of  securities  or use all of the
investment techniques that are described.



                                       3
<PAGE>

      ILLIQUID  SECURITIES.  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,  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 the Fund to
value or dispose of due to the absence of an active trading market.  The sale of
some illiquid  securities by the Fund may be subject to legal restrictions which
could be costly to it.

      POLICIES AND LIMITATIONS.  The Fund may invest up to 15% of its net assets
in  illiquid  securities.  The Fund has no current  intention  of  investing  in
illiquid securities.

      REPURCHASE  AGREEMENTS.  In a  repurchase  agreement,  the Fund  purchases
securities  from a bank that is a member of the Federal Reserve System or from a
securities  dealer that agrees to repurchase the  securities  from the Fund 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.

      POLICIES AND  LIMITATIONS.  Repurchase  agreements with a maturity of more
than seven days are considered to be illiquid securities. The Fund may not 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.  The Fund may enter
into a repurchase agreement only if (1) the underlying  securities are of a type
that the Fund'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 Fund's  account  by its  custodian  or a bank
acting as the Fund's agent.

      SECURITIES LOANS. The Fund 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
Fund. The Fund 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 Fund an amount  equivalent  to any  dividends  or interest  paid on such
securities.  These loans are subject to termination at the option of the Fund or
the borrower.  The Fund 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 Fund
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


                                       4
<PAGE>

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 Fund  securities  involve  some  risk of loss of rights in the
collateral should the borrower fail financially.

      POLICIES AND  LIMITATIONS.  The Fund may lend its 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 the Fund by depositing  collateral in a form  determined to be satisfactory
by the 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.

      RESTRICTED  SECURITIES  AND RULE 144A  SECURITIES.  The Fund 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 the Fund qualify under Rule 144A
and an institutional market develops for those securities,  the Fund likely will
be able to dispose of the  securities  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 the Fund's  illiquidity.  NB  Management,  acting under  guidelines
established by the 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,  the Fund 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 Fund may be  permitted to sell a security
under an effective  registration  statement.  If, during such a period,  adverse
market conditions were to develop,  the Fund 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  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 the
Fund's 15% limit on investments in illiquid securities.

      REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the Fund
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 Fund.



                                       5
<PAGE>

      POLICIES AND  LIMITATIONS.  Reverse  repurchase  agreements are considered
borrowings  for  purposes  of the Fund's  investment  policies  and  limitations
concerning borrowings.  While a reverse repurchase agreement is outstanding, the
Fund 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
Fund's obligations under the agreement.

      FOREIGN  SECURITIES.  The  Fund  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.

      The Fund  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 Fund endeavors to achieve the most
favorable net results on its 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 the Fund are uninvested and no return is


                                       6
<PAGE>

earned thereon.  The inability of the Fund to make intended  security  purchases
due  to  settlement  problems  could  cause  it to  miss  attractive  investment
opportunities.  Inability  to  dispose  of  Fund  securities  due to  settlement
problems could result in losses to the Fund due to subsequent  declines in value
of the  securities  or,  if the Fund 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 Fund may  invest in  American  Depositary  Receipts  (ADRs),  European
Depositary Receipts (EDRs), Global Depositary Receipts (GDRs), and International
Depositary  Receipts  (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.  To limit the risks  inherent in  investing in
foreign  currency  denominated  securities,  the Fund 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,  the Fund is not  restricted  in the amount it may
invest in securities denominated in any one foreign currency.

      Investments  in  securities  of foreign  issuers are subject to the Fund's
quality  standards.  The  Fund may  invest  only in  securities  of  issuers  in
countries whose governments are considered stable by NB Management.

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

      FUTURES  CONTRACTS  AND OPTIONS  THEREON.  The Fund 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 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 the Fund to
enhance portfolio  liquidity and maintain a defensive position without having to
sell portfolio  securities.  The Fund views  investment in (i) interest rate and


                                       7
<PAGE>

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.

      For purposes of managing  cash flow,  the Fund 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.

      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 the Fund will usually be  liquidated in this
manner,  the Fund 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 the Fund with, or for the benefit of, a futures  commission
merchant in order to initiate  and maintain the Fund's  futures  positions.  The
margin deposit made by the Fund 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 Fund 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 Fund. In computing its NAV, the Fund marks to market the value of
its open futures positions. The Fund 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 Fund could suffer a delay in recovering its
funds and could ultimately suffer a loss.



                                       8
<PAGE>

      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 the Fund 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 Fund'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  the Fund's  futures  position  and the  securities  held by or to be
purchased  for the  Fund.  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 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 Fund,  it could  have an adverse  impact on the NAV of the
Fund.

      POLICIES AND LIMITATIONS. The Fund 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. The Fund
does  not  engage  in  transactions  in  futures  and  options  on  futures  for
speculation.

      The Fund may  purchase  and sell stock index  futures  contracts,  and may
purchase  and sell options  thereon.  For  purposes of managing  cash flow,  the


                                       9
<PAGE>

managers may use such futures and options to increase the funds' exposure to the
performance of a recognized securities index, such as the S&P 500 Index.

      CALL OPTIONS ON  SECURITIES.  The Fund may write  covered call options and
may purchase call options on securities.  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 Fund on its NAV) or to earn  premium  income.  Portfolio
securities  on which call  options may be written and  purchased by the Fund are
purchased solely on the basis of investment  considerations  consistent with the
Fund's investment objective.

      When the Fund 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 Fund  receives a premium  for
writing the call option. So long as the obligation of the call option continues,
the Fund may be  assigned  an  exercise  notice,  requiring  it to  deliver  the
underlying  security  against  payment of the  exercise  price.  The Fund 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 Fund's total return. When writing a covered call option, the Fund, 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 the Fund has written expires  unexercised,  the Fund
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 Fund will realize a gain or
loss from the sale of the underlying security.

      When the Fund 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.  The Fund may write covered call options and may
purchase  call  options  on  securities.  The Fund may also write  covered  call
options and may purchase call options in related closing transactions.  The Fund
writes only  "covered"  call options on  securities  it owns (in contrast to the
writing of "naked" or uncovered call options, which the Fund will not do).

      The Fund would purchase a call option to offset a previously  written call
option.  The Fund also may purchase a call option to protect against an increase
in the price of the securities it intends to purchase.

      PUT OPTIONS ON SECURITIES.  The Fund may write and purchase put options on
securities.  The Fund will  receive a premium for  writing a put  option,  which
obligates  the Fund to acquire a security at a certain price at any time until a
certain date if the  purchaser  decides to exercise the option.  The Fund may be
obligated to purchase the underlying security at more than its current value.



                                       10
<PAGE>

      When the Fund 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 Fund 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
the  Fund  are  purchased  solely  on the  basis  of  investment  considerations
consistent with the Fund's investment objective.  When writing a put option, the
Fund,  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 Fund has written expires unexercised,
the Fund will realize a gain in the amount of the premium.

      POLICIES AND  LIMITATIONS.  The Fund  generally  writes and  purchases 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 Fund on its NAV).

      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.  The
obligation  under any option written by the Fund  terminates  upon expiration of
the option or, at an earlier time,  when the Fund offsets the option by entering
into a "closing purchase  transaction" to purchase an option of the same series.
If an option is purchased by the Fund and is never  exercised or closed out, the
Fund 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.  Exchange-traded  options  are  issued  by  a
clearing  organization  affiliated  with 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 the Fund
and a counter-party,  with no clearing  organization  guarantee.  Thus, when the
Fund 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 Fund originally sold (or
purchased) the option.  There can be no assurance that the Fund would be able to
liquidate an OTC option at any time prior to expiration. Unless the Fund 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, the Fund may be unable to liquidate its
options  position  and  the  associated   cover.  NB  Management   monitors  the
creditworthiness  of  dealers  with  which the Fund may  engage  in OTC  options
transactions.

      The premium  received (or paid) by the Fund 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 the Fund for writing
an option is  recorded  as a  liability  on the Fund's  statement  of assets and


                                       11
<PAGE>

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 the Fund 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 the Fund will be
able to effect  closing  transactions  at favorable  prices.  If the Fund 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.

      The Fund 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 Fund; however, the Fund could be in a less advantageous  position than if
it had not written the call option.

      The  Fund  pays  brokerage  commissions  or  spreads  in  connection  with
purchasing  or  writing  options,  including  those  used to close out  existing
positions.  From time to time, the Fund 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.

      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.  The Fund may use  American-style  options.  The
assets used as cover (or held in a segregated  account) for OTC options  written
by the Fund will be  considered  illiquid  unless  the OTC  options  are sold to
qualified  dealers  who agree  that the Fund 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.

      PUT AND CALL OPTIONS ON SECURITIES INDICES.  For purposes of managing cash
flow,  the Fund may  purchase  put and call  options  on  securities  indices to
increase its exposure to the performance of a recognized  securities index, such
as the S&P 500 Index.

      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


                                       12
<PAGE>

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 Fund 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.

      POLICIES AND LIMITATIONS. For purposes of managing cash flow, the Fund may
purchase  put and call  options on  securities  indices to  increase  the Fund's
exposure to the performance of a recognized  securities  index,  such as the S&P
500 Index. All securities index options purchased by the Fund will be listed and
traded on an exchange.

       FOREIGN CURRENCY TRANSACTIONS.  The Fund 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
Fund 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 Fund enters into  forward  contracts  in an attempt to hedge  against
changes  in  prevailing  currency  exchange  rates.  The Fund does not engage in
transactions  in forward  contracts for  speculation;  it views  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 the Fund 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,  the Fund may
either make  delivery  of the foreign  currency  or  terminate  its  contractual
obligation to deliver by purchasing an offsetting contract.  If the Fund chooses
to make  delivery  of the  foreign  currency,  it may be required to obtain such
currency  through the sale of Fund  securities  denominated  in such currency or
through  conversion of other assets of the Fund into such currency.  If the Fund
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.



                                       13
<PAGE>

       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
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,  the Fund could be in a less advantageous  position
than if such a hedge had not been established.  If the Fund 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 the
Fund's  securities  against  a  decline  in the  value  of a  currency  does not
eliminate fluctuations in the prices of underlying  securities.  Because forward
contracts are not traded on an exchange, the assets used to cover such contracts
may be illiquid. The Fund may experience delays in the settlement of its foreign
currency transactions.

      POLICIES AND  LIMITATIONS.  The Fund may enter into forward  contracts for
the purpose of hedging and not for speculation.

       COVER FOR FINANCIAL INSTRUMENTS.  Securities held in a segregated account
cannot  be sold  while the  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 the  Fund's  assets  could  impede  fund
management or the Fund's  ability to meet current  obligations.  The Fund may be
unable promptly to dispose of assets which cover, or are segregated with respect
to, an illiquid  forward  position;  this  inability may result in a loss to the
Fund.

       POLICIES  AND  LIMITATIONS.  The Fund  will  comply  with SEC  guidelines
regarding "cover" for hedging 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 the Fund 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
the Fund'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 the Fund 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 the Fund 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.  There
can be no  assurance  that  the  Fund's  use of  Financial  Instruments  will be
successful.



                                       14
<PAGE>

       The Fund'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 the 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 the Fund's  underlying  securities  or
currency.  NB Management intends to reduce the risk that the Fund 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.

       REGULATORY LIMITATIONS ON USING FINANCIAL INSTRUMENTS.  To the extent the
Fund 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 Fund's net assets.

       FIXED  INCOME  SECURITIES.  While the  emphasis of the Fund's  investment
program is on common stocks and other equity  securities,  it may also invest in
money market instruments, U.S. Government and Agency Securities, and other fixed
income  securities.  The Fund may invest in investment grade corporate bonds and
debentures.  The Fund may also 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 Standard & Poor's ("S&P"),  Moody's Investors Service, Inc.
("Moody's"),  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 Fund may rely on the ratings of any NRSRO,  the


                                       15
<PAGE>

Fund  primarily  refers  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 the
Fund may invest is likely to decline in times of rising market  interest  rates.
Conversely, when rates fall, the value of the Fund's fixed income 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 the Fund warrants  exposure to the
additional level of risk.

       POLICIES AND LIMITATIONS.  There are no restrictions as to the ratings of
debt  securities  the Fund may acquire or the portion of the Fund's  assets that
the Fund  may  invest  in debt  securities  in a  particular  ratings  category.
Although the Fund does not presently intend to invest in debt securities, it may
invest in  convertible  bonds  that the  manager  believes  present a good value
because  they are  convertible  into equity  securities  and have an  attractive
yield.

       COMMERCIAL  PAPER.  Commercial paper is a short-term debt security issued
by a  corporation  or bank,  usually  for  purposes  such as  financing  current
operations. The Fund 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 Trustees.

      POLICIES AND LIMITATIONS.  The Fund 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.

       CONVERTIBLE SECURITIES.  The Fund 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


                                       16
<PAGE>

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 the Fund is called for
redemption,  the Fund 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 Fund and its  ability to
achieve its investment objectives.

      POLICIES AND  LIMITATIONS.  Convertible debt securities are subject to the
Fund's investment policies and limitations concerning fixed income securities.

      PREFERRED STOCK.  The Fund 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.

      OTHER  INVESTMENT  COMPANIES.  The Fund 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,  the Fund 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 fund securities.  The Fund
does  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.  Except for  investments in a money market fund
managed by NB Management for cash management purposes,  the Fund's investment in
securities of other registered  investment companies is limited to (i) 3% of the
total voting stock of any one  investment  company,  (ii) 5% of the Fund's total
assets with  respect to any one  investment  company and (iii) 10% of the Fund's
total assets in the aggregate.

                             PERFORMANCE INFORMATION

      The Fund's performance figures are based on historical results and are not
intended to indicate future performance. The share price and total return of the
Fund will vary, and an investment in the Fund, when redeemed,  may be worth more
or less than an investor's original cost.



                                       17
<PAGE>

TOTAL RETURN COMPUTATIONS

      The 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.

                         Average Annual Total Returns(1)
                             Periods Ended 6/30/2000

                ONE YEAR   FIVE YEARS     TEN YEARS     PERIOD FROM INCEPTION(2)

FASCIANO FUND     3.65%       14.20%        13.03%             13.64%


(1)   This Fund had no operations  prior to March __, 2001, but is the successor
      to Fasciano Fund. Performance results shown for periods prior to March __,
      2001 represent the performance of the Fasciano Fund.

(2)   The inception date of the Fasciano Fund was 8/1/87.

      NB  Management  may from time to time waive a portion of its fees due from
the Fund or reimburse  the Fund 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

      From time to time the 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 Index,
      S&P Small Cap 600 Index ("S&P 600 Index"), S&P Mid Cap 400 Index ("S&P 400
      Index"), Russell 2000 Index, Russell 2000 Growth Index, Russell 2000 Value


                                       18
<PAGE>

      Index,  Russell  1000 Value  Index,  Russell  1000 Growth  Index,  Russell
      Midcap(R) Index,  Russell Midcap Value Index, Russell Midcap Growth 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 $34  million to $5.2  billion,  with an average of $640
      million.  The S&P 400  Index  measures  mid-sized  companies  that have an
      average market capitalization of $2.4 billion. The Russell indexes measure
      the performance of all capitalization  ranges across both growth and value
      investment styles. 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.  The Fund  may  invest  in
      different  types of  securities  from those  included in some of the above
      indexes.

      Evaluations of the Fund's performance,  its total returns, and comparisons
may be used in  advertisements  and in  information  furnished  to  current  and
prospective shareholders (collectively,  "Advertisements"). The Fund 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.

OTHER PERFORMANCE INFORMATION

      From time to time,  information about the Fund's portfolio  allocation and
holdings as of a particular date may be included in Advertisements for the Fund.
This  information  may  include  the  Fund's   diversification  by  asset  type.
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 the 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


                                       19
<PAGE>

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  the Fund 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 the Fund will achieve its investment objective.

                              TRUSTEES AND OFFICERS

      The following  table sets forth  information  concerning  the trustees and
officers  of  the  Trust,  including  their  addresses  and  principal  business
experience  during  the past five  years.  All  persons  named as  trustees  and
officers  also serve in  similar  capacities  for other  Funds  administered  or
managed by NB Management and Neuberger Berman.

<TABLE>
<CAPTION>
THE TRUST

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
<S>                                           <C>                <C>
Claudia A. Brandon (44)                       Secretary          Vice President-Mutual Fund Board
                                                                 Relations since 2000; Employee of
                                                                 Neuberger Berman since 1999; Vice
                                                                 President of NB Management from
                                                                 1986 to 1999; Secretary of four
                                                                 other mutual funds for which NB
                                                                 Management acts as investment
                                                                 manager or administrator.

John Cannon (70)                               Trustee           Retired.  Formerly, Chairman and
531 Willow Avenue                                                Chief Investment Officer of CDC
Ambler, PA 19002                                                 Capital Management (registered
                                                                 investment adviser) (1993-Jan.
                                                                 1999).



                                                 20
<PAGE>

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
Faith Colish (65)                              Trustee           Attorney at Law, Faith Colish, A
63 Wall Street                                                   Professional Corporation.
24th Floor
New York, NY  10005

Robert Conti (44)                          Vice President        Vice President of Neuberger Berman
                                                                 since 1999; Senior Vice President
                                                                 of NB Management since 2000;
                                                                 Controller of NB Management until
                                                                 1996; Treasurer of NB Management
                                                                 from 1996 until 1999; Vice
                                                                 President of four other mutual
                                                                 funds for which NB Management acts
                                                                 as investment manager or
                                                                 administrator since 2000.

Stacy Cooper-Shugrue (37)                Assistant Secretary     Employee of Neuberger Berman since
                                                                 1999; Assistant Vice President of
                                                                 NB Management from 1993 to 1999;
                                                                 Assistant Secretary of four other
                                                                 mutual funds for which NB
                                                                 Management acts as investment
                                                                 manager or administrator.

Barbara DiGiorgio (41)                   Assistant Treasurer     Vice President of Neuberger Berman
                                                                 since 1999; Assistant Vice
                                                                 President of NB Management from
                                                                 1993 to 1999; Assistant Treasurer
                                                                 since 1996 of four other mutual
                                                                 funds for which NB Management acts
                                                                 as investment manager or
                                                                 administrator.

Walter G. Ehlers (67)                          Trustee           Consultant, Director of the Turner
6806 Suffolk Place                                               Corporation, A.B. Chance Company
Harvey Cedars, NJ 08008                                          and Crescent Jewelry, Inc.

Brian J. Gaffney (47)                      Vice President        Senior Vice President of NB
                                                                 Management since 2000; Managing
                                                                 Director of Neuberger Berman since
                                                                 1999; Vice President of NB
                                                                 Management from 1997 until 1999;
                                                                 Vice President of four other mutual
                                                                 funds for which NB Management acts
                                                                 as investment manager or
                                                                 administrator since 2000.



                                                 21
<PAGE>

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
C. Anne Harvey (63)                            Trustee           Director of American Association of
2555 Pennsylvania Avenue, N.W.                                   Retired Persons ("AARP"); Program
Washington, DC 20037                                             Services and Administrator of AARP
                                                                 Foundation; The National
                                                                 Rehabilitation Hospital's Board of
                                                                 Advisors; Individual Investors
                                                                 Advisory Committee to the New York
                                                                 Stock Exchange Board of Directors;
                                                                 Steering Committee for the U.S.
                                                                 Securities and Exchange Commission
                                                                 Facts on Saving and Investing
                                                                 Campaign; and American Savings
                                                                 Education Council's Policy Board
                                                                 (ASEC).

Barry Hirsch (67)                              Trustee           Senior Vice President, Secretary,
Loews Corporation                                                and General Counsel of Loews
667 Madison Avenue                                               Corporation (diversified financial
7th Floor                                                        corporation).
New York, NY 10021

Michael M. Kassen* (47)                 President and Trustee    Executive Vice President, Chief
                                                                 Investment Officer and Director of
                                                                 Neuberger Berman Inc. (holding
                                                                 company) since 1999; Executive Vice
                                                                 President and Chief Investment
                                                                 Officer of Neuberger Berman since
                                                                 1999; Chairman since May 2000 and
                                                                 Director of NB Management since
                                                                 January 1996;  Vice President from
                                                                 1990 until 1999; Partner of
                                                                 Neuberger Berman from 1993 until
                                                                 1996 when he became a Principal;
                                                                 President and Trustee of four other
                                                                 mutual funds for which NB
                                                                 Management acts as investment
                                                                 manager or administrator since 2000.

Robert A. Kavesh (73)                          Trustee           Professor of Finance and Economics
110 Bleecker Street                                              at Stern School of Business, New
Apt. 24B                                                         York University.
New York, NY 10012



                                                 22
<PAGE>

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
Howard A. Mileaf (63)                          Trustee           Vice President and Special Counsel
WHX Corporation                                                  to WHX Corporation (holding
110 East 59th Street                                             company) since 1992; Director of
30th Floor                                                       Kevlin Corporation (manufacturer of
New York, NY  10022                                              microwave and other products).

Edward I. O'Brien* (72)                        Trustee           Private Investment Management;
12 Woods Lane                                                    President of the Securities
Scarsdale, NY 10583                                              Industry Association ("SIA")
                                                                 (securities industry's
                                                                 representative in government
                                                                 relations and regulatory matters at
                                                                 the federal and state levels) from
                                                                 1974 to 1992; Adviser to SIA from
                                                                 November 1992 to November 1993;
                                                                 Director of Legg Mason, Inc.

John P. Rosenthal (68)                         Trustee           Senior Vice President of Burnham
Burnham Securities Inc.                                          Securities Inc. (a registered
Burnham Asset Management Corp.                                   broker-dealer) since 1991;
1325 Avenue of the Americas                                      Director, Cancer Treatment
26th Floor                                                       Holdings, Inc.
New York, NY  10019

William E. Rulon (68)                          Trustee           Retired.  Senior Vice President of
2980 Bayside Walk                                                Foodmaker. Inc. (operator and
San Diego, CA 92109                                              Franchiser of Restaurants) until
                                                                 January 1997; Secretary of
                                                                 Foodmaker, Inc. until July 1996.

Richard Russell (53)                   Treasurer and Principal   Vice President of Neuberger Berman
                                      Financial and Accounting   since 1999; Vice President of NB
                                               Officer           Management from 1993 until 1999;
                                                                 Treasurer and Principal Financial
                                                                 and Accounting Officer of four
                                                                 other mutual funds for which NB
                                                                 Management acts as investment
                                                                 manager or administrator.



                                                 23
<PAGE>

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
Cornelius T. Ryan (69)                         Trustee           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.

Tom Decker Seip (50)                           Trustee           General Partner of Seip Investments
30 Ridge Lane                                                    LP (a private investment
Orinda, CA 94563                                                 partnership); Member of the Board
                                                                 of Directors of Offroad Capital
                                                                 Inc. and E-Finance Corporation
                                                                 (pre-public internet commerce
                                                                 companies); Trustee of Hambrecht
                                                                 and Quist Fund Trust; Member of the
                                                                 Board of Directors of AmericaOne;
                                                                 Senior Executive at the Charles
                                                                 Schwab Corporation from 1983 to
                                                                 1999; including Chief Executive
                                                                 Officer of Charles Schwab
                                                                 Investment Management, Inc. and
                                                                 Trustee of Schwab Family of Funds
                                                                 and Schwab Investments from 1997 to
                                                                 1998; Executive Vice
                                                                 President-Retail Brokerage for
                                                                 Charles Schwab Investment
                                                                 Management from 1994 to 1997.



                                                 24
<PAGE>

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
Gustave H. Shubert (71)                        Trustee           Senior Fellow/Corporate Advisor and
13838 Sunset Boulevard                                           Advisory Trustee of Rand (a
Pacific Palisades, CA   90272                                    non-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 Council
                                                                 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.

Frederic B. Soule (54)                     Vice President        Vice President of Neuberger Berman
                                                                 since 1999; Vice President of NB
                                                                 Management from 1995 until 1999;
                                                                 Vice President of four other funds
                                                                 for which NB Management acts as
                                                                 investment manager or administrator
                                                                 since 2000.

Candace L. Straight (53)                       Trustee           Private investor and consultant
518 Passaic Avenue                                               specializing in the insurance
Bloomfield, NJ 07003                                             industry; Advisory Director of
                                                                 Securities Capital LLC (a global
                                                                 private equity investment firm
                                                                 dedicated to making investments in
                                                                 the insurance sector); Principal of
                                                                 Head & Company, LLC (limited
                                                                 liability company providing
                                                                 investment banking and consulting
                                                                 services to the insurance industry)
                                                                 until March 1996; Director of Drake
                                                                 Holdings (U.K. motor insurer) until
                                                                 June 1996.



                                                 25
<PAGE>

                                           Positions Held
NAME, AGE, AND ADDRESS (1)                 WITH THE TRUST            PRINCIPAL OCCUPATION(S) (2)
-----------------------------              --------------            ---------------------------
Peter E. Sundman* (41)                 Chairman of the Board,    Executive Vice President and
                                       Chief Executive Officer   Director of Neuberger Berman Inc.
                                             and Trustee         (holding company) since 1999;
                                                                 Executive Vice President of
                                                                 Neuberger Berman since 1999;
                                                                 Principal of Neuberger Berman from
                                                                 1997 until 1999; President and
                                                                 Director of NB Management since
                                                                 1999; Senior Vice President of NB
                                                                 Management from 1996 until 1999;
                                                                 Director of Institutional Services
                                                                 of NB Management from 1988 until
                                                                 1996; Chairman of the Board and
                                                                 Trustee of four other mutual funds
                                                                 for which NB Management acts as
                                                                 investment manager or administrator
                                                                 since 2000.

Peter P. Trapp (55)                            Trustee           Regional Manager for Atlanta
Ford Motor Credit Company                                        Region, Ford Motor Credit Company
1455 Lincoln Parkway                                             since August, 1997; prior thereto,
Atlanta, GA 30346-2209                                           President, Ford Life Insurance
                                                                 Company, April 1995 until August
                                                                 1997.


Celeste Wischerth (39)                   Assistant Treasurer     Vice President of Neuberger Berman
                                                                 since 1999; Assistant Vice
                                                                 President of NB Management from
                                                                 199_ to 1999; Assistant Treasurer
                                                                 since 1996 of four other mutual
                                                                 funds for which NB Management acts
                                                                 as investment manager or
                                                                 administrator.
</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 the Trust by
virtue of the fact that they are officers and/or  directors of NB Management and
Executive  Vice  Presidents of Neuberger  Berman.  Mr.  O'Brien is an interested
person of the Trust by virtue of the fact that he is a director  of Legg  Mason,


                                       26
<PAGE>

Inc., a wholly owned subsidiary of which,  from time to time, serves as a broker
or  dealer to the Funds  and  other  funds  for  which NB  Management  serves as
investment manager.

      The Trust's Trust  Instrument  provides that the 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.

      No Trustee of Neuberger Berman Equity Funds received any compensation from
Neuberger  Berman  Fasciano Fund or Fasciano Fund,  Inc. for any period prior to
the date of this SAI.

      The following table sets forth information  concerning the compensation of
the  trustees  of the Trust.  Neuberger  Berman  Equity  Funds does not have any
retirement plan for its trustees.

















                                       27
<PAGE>


<TABLE>
<CAPTION>
                                  FOR CALANDER YEAR ENDED 12/31/00

                                                           Total Compensation from
                                          Aggregate        Investment Companies in the
                                         Compensation        Neuberger Berman Fund
Name and Position With the Trust        From the Trust      Complex Paid to Trustees
--------------------------------        --------------      ------------------------
<S>                                           <C>            <C>
John Cannon                                   $                             $
Trustee

Faith Colish                                  $                             $
Trustee                                                      (5 other investment companies)

Stanley Egener*                               $                             $
Chairman of the Board, Chief                                 (9 other investment companies)
Executive Officer, and Trustee

Walter G. Ehlers                              $                             $
Trustee

C. Anne Harvey                                $                             $
Trustee

Barry Hirsch                                  $                             $
Trustee

Michael M. Kassen                             $                             $
Trustee

Robert A. Kavesh                              $                             $
Trustee

Howard A. Mileaf                              $                             $
Trustee                                                      (4 other investment companies)

Edward I. O'Brien                             $                             $
Trustee                                                      (3 other investment companies)

John T. Patterson, Jr.**                      $                             $
Trustee
                                                             (4 other investment companies)
John P. Rosenthal                             $                             $
Trustee                                                      (4 other investment companies)

William E. Rulon                              $                             $
Trustee

Cornelius T. Ryan                             $                             $
Trustee                                                      (3 other investment companies)

Tom Decker Seip                               $                             $
Trustee

Gustave H. Shubert                            $                             $
Trustee                                                      (3 other investment companies)




                                       28
<PAGE>

                                                           Total Compensation from
                                          Aggregate        Investment Companies in the
                                         Compensation        Neuberger Berman Fund
Name and Position With the Trust        From the Trust      Complex Paid to Trustees
--------------------------------        --------------      ------------------------
Candace L. Straight                           $                             $
Trustee

Peter E. Sundman                              $                             $
Trustee

Peter P. Trapp                                $                             $
Trustee

Lawrence Zicklin*                             $                             $
President and Trustee                                        (5 other investment companies)
</TABLE>

*Retired, October 27, 1999
**Deceased, September 26, 2000


       [At  February __,  2001,  the  trustees  and officers of the Trust,  as a
group, owned beneficially or of record less than 1% of the outstanding shares of
the Fund.]

      Effective January 1, 2001,  Trustees of the Neuberger Berman Funds who are
not affiliated with NB Management  receive from all the Funds in the aggregate a
retainer of $10,000 per quarter  plus $7,500 for each  regular  quarterly  Board
meeting attended.

                    INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

INVESTMENT MANAGER AND ADMINISTRATOR

       NB  Management  serves as the Fund's  investment  manager  pursuant  to a
management  agreement with the Trust,  dated December 16, 2000 and approved with
respect to the Fund on ________ __, 2001 ("Management Agreement").

       The Management Agreement provides, in substance,  that NB Management will
make and implement  investment decisions for the Fund in its discretion and will
continuously develop an investment program for the Fund's assets. The Management
Agreement permits NB Management to effect  securities  transactions on behalf of
the Fund through associated persons of NB Management.  The Management  Agreement
also   specifically   permits  NB  Management  to  compensate,   through  higher
commissions, brokers and dealers who provide investment research and analysis to
the Fund,  although NB Management has no current plans to pay a material  amount
of such compensation.

       NB Management  provides to the Fund, 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 Trust 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
Trust. See "Trustees and Officers." The Fund pays NB Management a management fee
based on the Fund's average daily net assets, as described below.

       NB Management  provides  facilities,  services and personnel,  as well as
accounting,  recordkeeping,  and  other  services,  to the Fund  pursuant  to an
administration  agreement  with the Trust,  dated December 16, 2000 and approved



                                       29
<PAGE>

with respect to the Fund on ____ __, 2001 ("Administration Agreement"). For such
administrative  services,  the 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 the
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   provided  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 qualification of the Fund's shares for
sale in various  states,  and furnishes other services the parties agree to from
time to time should be provided under the Administration Agreement.

       From time to time, NB Management or the Fund may enter into  arrangements
with registered  broker-dealers or other third parties pursuant to which it pays
the  broker-dealers  or other  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.

MANAGEMENT AND ADMINISTRATION FEES

       For investment management services,  the Fund pays NB Management a fee at
the annual rate of 0.85% of the Fund's average daily net assets.

       NB Management provides  administrative  services to the Fund that include
furnishing  facilities  and  personnel for the Fund and  performing  accounting,
recordkeeping,  and other services.  For such administrative  services, the Fund
pays NB Management a fee at the annual rate of 0.15% of the 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  who  are  not  interested  persons  of the  Trust  or of NB
Management,  and periodic  reports to the Board of Trustees on actual  expenses.
With  the  Fund's   consent  NB   Management   may   subcontract   some  of  its
responsibilities  to  the  Fund  under  the  Administration  Agreement  and  may
compensate   broker-dealers,   banks,   third-party   administrators  and  other
institutions that provides such services.

       The Management  Agreement  continues  until June 30, 2002. The Management
Agreement is renewable thereafter from year to year with respect to the Fund, so
long as its  continuance  is  approved  at least  annually  (1) by the vote of a
majority of the Trustees who are not  "interested  persons" of NB  Management or
the Trust ("Independent  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
Trustees or by a 1940 Act  majority  vote of the  outstanding  interests  in the
Fund.  The  Administration   Agreement   continues  until  June  30,  2002.  The
Administration  Agreement  is  renewable  from year to year with  respect to the
Fund, so long as its  continuance  is approved at least annually (1) by the vote
of a majority of the  Independent  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 Trustees or by a 1940 Act  majority  vote of the  outstanding  shares in the
Fund.




                                       30
<PAGE>

       The Management and  Administration  Agreements  are  terminable,  without
penalty, with respect to the Fund on 60 days' written notice either by the Trust
or by NB Management. Each Agreement terminates automatically if it is assigned.

       Fasciano  Company,  Inc.  acted as the  investment  adviser to the Fund's
predecessor,  Fasciano  Fund,  from its inception on August 1, 1987 to March __,
2001.  For the fiscal year ended June 30, 2000 the Fasciano  Fund paid 1.00% for
management and administration services.

       During the fiscal years ended June 30, 1998, 1999, and 2000, the Fasciano
Fund paid the following  management and administration  fees to Fasciano Company
Inc.: $604,499, $2,307,620 and $3,597,288, respectively.

SUB-ADVISER

       NB Management  retains Neuberger Berman,  605 Third Avenue,  New York, NY
10158-3698,  as sub-adviser pursuant to a sub-advisory  agreement dated December
16, 2000 and approved with respect to the Fund on _____ __, 2001  ("Sub-Advisory
Agreement").

       The  Sub-Advisory  Agreement  provides 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 Agreement provides 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 Agreement continues until June 30, 2002 and is renewable
from year to year,  subject to approval of its continuance in the same manner as
the Management Agreement.  The Sub-Advisory Agreement is subject to termination,
without penalty, with respect to the Fund by the Trustees or a 1940 Act majority
vote of the outstanding interests in the Fund, by NB Management, or by Neuberger
Berman  on not  less  than  30 nor  more  than  60  days'  written  notice.  The
Sub-Advisory Agreement also terminates automatically with respect to the Fund if
it is assigned or if the  Management  Agreement  terminates  with respect to the
Fund.

       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,  2000,  the  investment  companies  managed  by  NB
Management  had  aggregate  net  assets  of  approximately   $20.7  billion.  NB
Management  currently serves as investment  manager of the following  investment
companies:




                                       31
<PAGE>

                                                                Approximate
                                                                Net Assets at
Name                                                         September 30, 2000
----                                                         ------------------

Neuberger Berman Cash Reserves..................................$1,032,588,729

Neuberger Berman Government Money Fund............................$298,740,903

Neuberger Berman High Yield Bond Fund..............................$13,069,861

Neuberger Berman Institutional Cash Fund .........................$614,137,910

Neuberger Berman Limited Maturity Bond Fund.......................$209,756,532

Neuberger Berman Municipal Money Fund.............................$249,825,527

Neuberger Berman Municipal Securities Trust........................$28,921,420

Neuberger Berman Century Fund......................................$40,811,096

Neuberger Berman Focus Fund.....................................$2,281,128,330

Neuberger Berman Genesis Fund...................................$1,864,536,230

Neuberger Berman Guardian Fund................................  $3,600,872,105

Neuberger Berman International Fund...............................$162,589,812

Neuberger Berman Manhattan Fund.................................$1,297,716,998

Neuberger Berman Millennium Fund..................................$291,746,557

Neuberger Berman Partners Fund..................................$2,720,153,662

Neuberger Berman Regency Fund......................................$36,891,774

Neuberger Berman Socially Responsive Fund.........................$128,352,668

Neuberger Berman Technology Fund...................................$26,696,757

Advisers Management Trust.......................................$3,027,632,991

       The investment  decisions  concerning the Fund 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 Fund.  Even  where the
investment  objectives  are similar,  however,  the methods used by the Other NB
Funds and the Fund to  achieve  their  objectives  may  differ.  The  investment



                                       32
<PAGE>

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 the  Fund 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 the Fund, in other cases
it is believed that the Fund's ability to participate in volume transactions may
produce  better  executions  for it.  In any  case,  it is the  judgment  of the
Trustees that the  desirability  of the Fund's having its advisory  arrangements
with  NB   Management   outweighs  any   disadvantages   that  may  result  from
contemporaneous transactions.

       The Fund is  subject  to  certain  limitations  imposed  on all  advisory
clients of Neuberger  Berman  (including the Fund, 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.

CODES OF ETHICS

       The Fund, 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 Fund manager 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 the Fund or taking personal advantage of investment  opportunities that may
belong to the Fund.

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
R. Katersky, Senior Vice President;  Robert Conti, Senior Vice President;  Brian
Gaffney,  Senior Vice President;  Matthew S. Stadler,  Senior Vice President and
Chief Financial Officer; Peter E. Sundman,  Director and President; and Lawrence
Zicklin, Director.

      The officers and employees 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;  Matthew S. Stadler,
Senior Vice President and Chief Financial Officer; Kevin Handwerker, Senior Vice



                                       33
<PAGE>

President,  General  Counsel  and  Secretary;  Joseph K.  Herlihy,  Senior  Vice
President and Treasurer;  Robert Akeson,  Senior Vice  President;  Steven April,
Senior Vice  President;  Salvatore A. Buonocore,  Senior Vice President;  Philip
Callahan, Senior Vice President; Lawrence J. Cohn, Senior Vice President; Joseph
F. Collins III,  Senior Vice President;  Seth J. Finkel,  Senior Vice President;
Robert  Firth,  Senior Vice  President;  Brian E. Hahn,  Senior Vice  President;
Barbara R.  Katersky,  Senior Vice  President;  Diane E.  Lederman,  Senior Vice
President;  Peter B.  Phelan,  Senior Vice  President;  David Root,  Senior Vice
President;  Mark Shone,  Senior  Vice  President;  Robert H. Splan,  Senior Vice
President;  Andrea  Trachtenberg,  Senior Vice  President;  Marvin C.  Schwartz,
Managing Director.

      Mr.  Sundman and Mr.  Kassen are trustees  and officers of the Trust.  Mr.
Gaffney and Mr. Conti are officers of the 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.  The inside  directors and officers of Neuberger
Berman,  Inc.  are:  Jeffrey B. Lane,  Director,  Chief  Executive  Officer  and
President;  Peter E. Sundman,  Director and Executive Vice  President;  Heidi L.
Schneider,  Director and Executive Vice President;  Michael M. Kassen, Director,
Chief Investment Officer and Executive Vice President;  Robert Matza,  Director,
Chief Administrative  Officer and Executive Vice President;  Marvin C. Schwartz,
Director and Vice Chairman;  Matthew S. Stadler, Senior Vice President and Chief
Financial Officer; Richard Cantor, Vice Chairman and Director; Lawrence Zicklin,
Director and Vice Chairman;  Kevin  Handwerker,  Senior Vice President,  General
Counsel and Secretary; and Joseph K. Herlihy, Treasurer.

                            DISTRIBUTION ARRANGEMENTS

      The Fund offers one class of shares, known as Investor Class shares.

DISTRIBUTOR

      NB Management serves as the distributor ("Distributor") in connection with
the  offering  of the Fund's  shares.  Investor  Class  shares are  offered on a
no-load basis.

      In connection  with the sale of its shares,  the Fund has  authorized  the
Distributor  to give only the  information,  and to make only the statements and
representations,  contained  in a  Prospectus  or 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 a  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 the  Fund's  Investor  Class  shares  without  sales
commission  or other  compensation  and  bears  all  advertising  and  promotion
expenses incurred in the sale of those shares.

      For the Fund's  Investor  Class,  the Distributor or one of its affiliates
may, from time to time,  deem it desirable to offer to shareholders of the Fund,
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



                                       34
<PAGE>

such use of the Fund's 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 Fund's  shareholders  any  investment
products or services other than those managed or distributed by NB Management or
Neuberger Berman.

      The Trust,  on behalf of the Fund,  and the  Distributor  are parties to a
Distribution Agreement  ("Distribution  Agreement").  The Distribution Agreement
continues  until  June 30,  2002.  The  Distribution  Agreement  may be  renewed
annually if specifically  approved by (1) the vote of a majority of the Trustees
or a 1940 Act majority vote of the Fund's outstanding shares and (2) the vote of
a majority of the Independent  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 Agreement.

                         ADDITIONAL PURCHASE INFORMATION

SHARE PRICES AND NET ASSET VALUE

       The  Fund's  shares  are bought or sold at a price that is the Fund's NAV
per share. The NAV for the Fund is calculated by subtracting  total  liabilities
from total assets (the market value of the  securities  the Fund holds plus cash
and other assets). The 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. The Fund calculates its NAV as of the close of regular trading on the
NYSE, usually 4 p.m. Eastern time, on each day the NYSE is open.

       The Fund 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, 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.  The Fund  values all other  securities  and assets,  including  restricted
securities,  by a method  that the  trustees  of the  Trust  believe  accurately
reflects fair value.

       If NB Management believes that the price of a security obtained under the
Fund's  valuation  procedures (as described above) does not represent the amount
that the Fund  reasonably  expects to receive on a current sale of the security,
the Fund will value the  security  based on a method  that the  trustees  of the
Trust believe accurately reflects fair value.

AUTOMATIC INVESTING AND DOLLAR COST AVERAGING

      The Fund's  shareholders may arrange to have a fixed amount  automatically
invested in Fund shares each month. To do so, the Fund 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



                                       35
<PAGE>

the  completed  application.  A completed  application  should be sent to Funds,
Boston Service Center, P.O. Box 8403, Boston, MA 02266-8403.

      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.

                         ADDITIONAL EXCHANGE INFORMATION

      As  more  fully  set  forth  in the  section  of the  Prospectus  entitled
"Maintaining  Your Account," the Fund's  shareholders may redeem at least $1,000
worth of the Fund's  shares and invest the proceeds in Investor  Class shares of
one or more of the other funds  managed by NB  Management  (Other NB Funds) that
are briefly described below,  provided that the minimum investment  requirements
of the other fund(s) are met.

EQUITY FUNDS

   Neuberger Berman Century Fund  Invests    mainly   in   common    stocks   of
                                  large-capitalization  companies.  The  manager
                                  seeks to buy  companies  with strong  earnings
                                  growth and the potential for higher  earnings,
                                  priced at attractive  levels relative to their
                                  growth rates.

   Neuberger Berman Focus Fund    Invests  principally in common stocks selected
                                  from 13 multi-industry sectors of the economy.
                                  To  maximize   potential   return,   the  Fund
                                  normally makes at least 90% of its investments
                                  in not more than six  sectors  of the  economy
                                  believed   by   the   Fund   managers   to  be
                                  undervalued.

   Neuberger Berman Genesis Fund  Invests  primarily in stocks of companies with
                                  small  market   capitalizations  (up  to  $1.5
                                  billion at the time of the Fund's investment).
                                  Fund managers seek to buy the stocks of strong
                                  companies with a history of solid  performance
                                  and  a  proven   management  team,  which  are
                                  selling at attractive prices.

   Neuberger Berman Guardian Fund A  growth   and  income   fund  that   invests
                                  primarily    in   stocks    of    established,
                                  high-quality   companies  that  are  not  well
                                  followed on Wall Street or are temporarily out
                                  of favor.

   Neuberger Berman               Seeks   long-term   capital   appreciation  by
   International Fund             investing  primarily in foreign  stocks of any
                                  capitalization,  both in  developed  economies
                                  and in emerging  markets.  Fund manager  seeks
                                  undervalued companies in countries with strong
                                  potential for growth.




                                       36
<PAGE>

   Neuberger Berman Manhattan     Invests  in  securities  believed  to have the
   Fund                           maximum   potential  for   long-term   capital
                                  appreciation.  Fund  managers  seek  stocks of
                                  companies   that  are  projected  to  grow  at
                                  above-average  rates  and that  appear  to the
                                  managers  poised  for a period of  accelerated
                                  earnings.

   Neuberger Berman Millennium    Seeks long-term growth of capital by investing
   Fund                           primarily     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 of
                                  initial investment.  The Fund co-managers take
                                  a growth approach to stock selection,  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 relative to its growth rate.

   Neuberger Berman               Seeks capital  growth through an approach that
   Partners Fund                  is   intended   to   increase   capital   with
                                  reasonable   risk.   Fund  manager   looks  at
                                  fundamentals,  focusing  particularly  on cash
                                  flow, return on capital, and asset values.

   Neuberger Berman               Seeks long-term growth of capital by investing
   Regency Fund                   primarily     in     common      stocks     of
                                  mid-capitalization companies which the manager
                                  believes have solid fundamentals.

   Neuberger Berman               Seeks   long-term   capital   appreciation  by
   Socially Responsive Fund       investing in common  stocks of companies  that
                                  meet both financial and social criteria.


   Neuberger Berman               Seeks long-term capital growth by investing in
   Technology Fund                the   stocks   of   dynamic   technology   and
                                  tech-related companies of all sizes.

INCOME FUNDS

Neuberger Berman                  A U.S.  Government  money  market fund seeking
Government Money Fund             maximum  safety and  liquidity and the highest
                                  available  current  income.  The Fund  invests
                                  only in U.S.  Treasury  obligations  and other
                                  money market  instruments issued or guaranteed
                                  as  to  principal  or  interest  by  the  U.S.
                                  Government,  its agencies or instrumentalities
                                  and repurchase  agreements on such securities.
                                  It seeks to maintain a constant  purchase  and
                                  redemption price of $1.00.




                                       37
<PAGE>


Neuberger  Berman                 A  money   market  fund  seeking  the  highest
Cash Reserves                     current  income  consistent  with  safety  and
                                  liquidity.  The Fund  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
Limited Maturity Bond Fund        with low risk to principal and liquidity  and,
                                  secondarily, total return. The Fund 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
High Yield Bond Fund              income and,  secondarily,  capital growth, the
                                  Fund  invests  primarily in  lower-rated  debt
                                  securities.   The  Fund  may  also  invest  in
                                  investment    grade    income-producing    and
                                  non-income    producing    debt   and   equity
                                  securities.

MUNICIPAL FUNDS

Neuberger Berman                  A  money   market  fund  seeking  the  maximum
Municipal Money                   current Fund income exempt from federal income
                                  tax, consistent with safety and liquidity. The
                                  Fund  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
Securities Trust                  risk to principal,  limited price fluctuation,
                                  and liquidity and, secondarily,  total return.
                                  The Fund invests in investment grade municipal
                                  securities with a maximum average  duration of
                                  10 years.

*/ 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.

      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.
Each fund may terminate or modify its exchange privilege in the future.

      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



                                       38
<PAGE>

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 the 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 the Fund 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.

REDEMPTIONS IN KIND

       The Fund  reserves  the right,  under  certain  conditions,  to honor any
request  for  redemption  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 Fund does not redeem in kind under normal circumstances,  but would do
so when the Trustees  determined that it was in the best interests of the Fund's
shareholders as a whole.

                        DIVIDENDS AND OTHER DISTRIBUTIONS

      The Fund distributes to its shareholders substantially all of its share of
any net investment income (after deducting expenses  attributable to the class),
any net realized capital gains, and any net realized gains from foreign currency
transactions  earned or realized by the Fund. The Fund's net  investment  income
consists of all income  accrued on Fund 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 Fund's NAV until they are
distributed.  The 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).

      The  Fund  generally  distributes  substantially  all of its  share of the
Fund's net investment income (after deducting  expenses incurred directly by the
Fund),  if any,  near the end of each  calendar  quarter.  Distributions  of net
realized capital and foreign currency gains, if any, normally are paid once each
year, in December.

      Dividends  and  other   distributions  are  automatically   reinvested  in
additional shares of the Fund, unless the shareholder  elects to receive them in
cash  ("cash  election").  Fund  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,



                                       39
<PAGE>

Boston,  MA  02266-8403.  Cash  distributions  can be paid by check,  through an
electronic  transfer to a bank account or used to purchase shares of an Other NB
Fund,  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 the 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
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 FUND

       To continue to qualify for  treatment  as a RIC under the Code,  the 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. 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 the 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 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.




                                       40
<PAGE>

       Dividends and interest  received by the Fund,  and gains  realized by the
Fund, 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.

       The  Fund  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 the Fund holds stock of a PFIC, it will be subject to federal
income tax on a portion of any "excess  distribution"  the Fund  receives on the
stock  or of any  gain on its  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 PFIC
income will be included in the Fund's  investment  company  taxable  income and,
accordingly,  will not be taxable to it to the extent it distributes that income
to its shareholders.

       If the  Fund  invests  in a PFIC  and  elects  to  treat  the  PFIC  as a
"qualified  electing  fund"  ("QEF"),  then in lieu of the Fund's  incurring the
foregoing tax and interest obligation,  the Fund would be required to include in
income each year its 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 Fund 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.

       The  Fund  may   elect  to  "mark-to-market"   its  stock  in  any  PFIC.
"Marking-to-market," in this context means including in ordinary income for each
taxable year the excess,  if any, of the fair market value of the stock over the
Fund's  adjusted  basis  therein  as of the end of that  year.  Pursuant  to the
election, the Fund would also be allowed to deduct (as an ordinary, not capital,
loss) 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 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 Fund's  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 Fund's  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 Fund realizes
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 the Fund with respect to its business of
investing in  securities  or foreign  currencies,  will be treated as qualifying
income under the Income Requirement.

       Exchange-traded  futures  contracts and certain  forward  contracts,  and
listed  nonequity  options  (such as those on a  securities  index)  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



                                       41
<PAGE>

federal income tax purposes at the end of the Fund'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 the 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. The Fund 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 shareholders as ordinary income when distributed to them) and/or
increasing  the  amount  of  dividends  the  Fund  must  distribute  to meet the
Distribution Requirement and avoid imposition of the Excise Tax.

       If the Fund 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
it will recognize a gain 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 the Fund 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
Fund holds the appreciated  financial  position  unhedged for 60 days after that
closing  (I.E.,  at no time during that 60-day period is the Fund'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).

TAXATION OF THE FUND'S 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.

      The 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, the 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



                                       42
<PAGE>

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.

                                FUND TRANSACTIONS

       During the fiscal  year  ended  June 30,  1998,  1999 and 2000 the Fund's
predecessor,  Fasciano Fund paid brokerage commissions of $66,326, $292,464, and
$263,820, respectively.

       Fund  securities  may,  from  time to  time,  be  loaned  by the  Fund 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 the Fund to Neuberger
Berman are fully  secured by cash  collateral.  The portion of the 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 the Fund in order to re-lend them to
Other NB Funds, Neuberger Berman may be required to pay the Fund, 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 the Fund has indicated a willingness  to lend,  Neuberger
Berman must borrow such security from the Fund, 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 the Fund. If, in any month, the
Fund's  expenses  exceed  its income in any  securities  loan  transaction  with
Neuberger Berman, Neuberger Berman must reimburse the Fund for such loss.

       A committee of  Independent  Trustees  from time to time  reviews,  among
other things,  information  relating to securities  loans by the Fund.  The Fund
does not presently intend to lend portfolio securities to Neuberger Berman.

      In effecting securities  transactions,  the Fund generally seeks to obtain
the best price and execution of orders.  Commission rates,  being a component of
price,  are  considered  along  with other  relevant  factors.  The  Independent
Trustees of the Trust have approved the use of Neuberger Berman as the principal
broker for the other series of the Trust.  Although  the  Trustees  have not yet
considered  this matter with respect to the Fund, they may do so in 2001 and the
following  paragraphs  describe the policies  with respect to the Trust's use of
Neuberger Berman for brokerage.  Series of the Trust may use Neuberger Berman as
broker  where,  in the judgment of NB  Management,  Neuberger  Berman is able to
obtain a price and execution at least as favorable as other  qualified  brokers.
To the Trust's



                                       43
<PAGE>

knowledge, no affiliate of the Trust receives give-ups or reciprocal business in
connection with its securities transactions.

       The use of  Neuberger  Berman as a broker for the Trust 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 Trust 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 the Trust 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 the
Trust'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
Trustees  not to be  comparable  to the  Trust.  The  Trust  does  not  deem  it
practicable  and  in  its  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, the Trust unless an  appropriate  exemption is
available.

       A committee of  Independent  Trustees  from time to time  reviews,  among
other  things,  information  relating to the  commissions  charged by  Neuberger
Berman to the Trust 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  Trust  must be  reviewed  and
approved no less often than annually by a majority of the Independent Trustees.

       To ensure that accounts of all investment  clients,  including the Trust,
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
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 the Trust. An agency cross-trade is
a securities transaction in which the same broker acts as agent on both sides of



                                       44
<PAGE>

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 other  participants in the trade. The other account
participating in an agency  cross-trade with the Trust 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  confirmation  of
each agency cross-trade that the Trust participates in.

       The Fund  expects  that it will  execute  a portion  of its  transactions
through  brokers other than Neuberger  Berman.  In selecting  those brokers,  NB
Management  will  consider 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.

      In certain instances Neuberger Berman specifically allocates brokerage for
research services  (including research reports on issuers and industries as well
as economic and financial data) which may otherwise be purchased for cash. While
the receipt of such services has not reduced Neuberger  Berman's normal internal
research  activities,  Neuberger Berman's expenses could be materially increased
if it were to generate such  additional  information  internally.  To the extent
such research  services are provided by others,  Neuberger Berman is relieved of
expenses it may otherwise  incur. In some cases research  services are generated
by third parties but provided to Neuberger  Berman by or through broker dealers.
Research  obtained in this manner may be used in servicing any or all clients of
Neuberger  Berman and may be used in  connection  with clients  other than those
client's whose brokerage  commissions are used to acquire the research  services
described  herein.  With regard to allocation  of brokerage to acquire  research
services  described above,  Neuberger Berman always considers its best execution
obligation when deciding which broker to utilize.

       A committee  comprised  of officers of NB  Management  and  employees  of
Neuberger Berman who are portfolio  managers of several  Neuberger Berman mutual
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



                                       45
<PAGE>

value  of the  brokerage  and  research  services  provided  by the  broker.  NB
Management   believes  that  those  research   services   benefit  the  Fund  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 fund transactions on
behalf of the Other NB Funds and by Neuberger Berman from brokers effecting fund
transactions  on  behalf  of the  Managed  Accounts  may be used for the  Fund's
benefit.

       Michael F.  Fasciano,  who is a Vice  President  of NB  Management  and a
Managing Director of Neuberger  Berman, is the person primarily  responsible for
making  decisions  as to  specific  action  to be  taken  with  respect  to  the
investments  of the Fund.  He has full  authority to take action with respect to
Fund  transactions  and  may or may  not  consult  with  other  personnel  of NB
Management prior to taking such action.

PORTFOLIO TURNOVER

       The Fund's  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
Fund 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 Fund
during the fiscal year.

                             REPORTS TO SHAREHOLDERS

       Shareholders  of the Fund will receive  unaudited  semi-annual  financial
statements,  as well as year-end financial statements audited by the independent
auditors for the Fund. The Fund's  statements show the  investments  owned by it
and the market values thereof and provide other  information  about the Fund and
its operations.

                      ORGANIZATION, CAPITALIZATION AND OTHER MATTERS

THE FUND

       The 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  twelve
separate  operating series.  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.

      The Trustees  have created four classes of shares of the Fund,  designated
Investor Class,  Advisor Class,  Trust Class, and Institutional  Class. This SAI
and the  accompanying  Prospectus  describe  Investor  Class  shares.  The other
classes of shares are not being offered at this time.




                                       46
<PAGE>

       Prior to November 9, 1998,  the name of the Trust was "Neuberger & Berman
Equity Funds".

       DESCRIPTION  OF  SHARES.  The Fund is  authorized  to issue an  unlimited
number of shares of beneficial interest (par value $0.001 per share).  Shares of
the Fund represent equal proportionate  interests in the assets of the Fund only
and have identical voting, dividend,  redemption,  liquidation, and other rights
except that  expenses  allocated to a Class may be borne solely by such Class as
determined by the Trustees,  and a Class may have  exclusive  voting rights with
respect to matters  affecting only that Class.  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 do not intend to hold annual meetings
of  shareholders  of the Fund.  The  Trustees  will  call  special  meetings  of
shareholders  of the Fund or Class  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 the Fund entitled to vote at the meeting.

       CERTAIN   PROVISIONS  OF  TRUST  INSTRUMENT.   Under  Delaware  law,  the
shareholders  of the Fund will not be personally  liable for the  obligations of
the 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 the 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.

                          CUSTODIAN AND TRANSFER AGENT

       The  Fund has  selected  State  Street  Bank and  Trust  Company  ("State
Street"), 225 Franklin Street, Boston, MA 02110, as custodian for its securities
and cash.  State  Street  also  serves as the 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 Fund  correspondence  should be mailed to Funds, c/o Boston
Service Center, P.O. Box 8403, Boston, MA 02266-8403.

                              INDEPENDENT AUDITORS

       The Fund has selected Ernst & Young LLP, 200 Clarendon Street, Boston, MA
02116, as the independent auditors who will audit its financial statements.

                                  LEGAL COUNSEL

      The Fund has  selected  Kirkpatrick  & Lockhart  LLP,  1800  Massachusetts
Avenue, N.W., 2nd Floor, Washington, D.C. 20036-1800, as its legal counsel.




                                       47
<PAGE>

               CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

       As of February __, 2001,  the  following  are all of the  beneficial  and
record  owners of more than five  percent  of the Fund.  The  owners  listed are
record  owners.  These  entities hold these shares of record for the accounts of
certain of their  clients and have informed the Fund of their policy to maintain
the  confidentiality of holdings in their client accounts,  unless disclosure is
expressly required by law.

<TABLE>
<CAPTION>
                                                                Percentage of Ownership
                                    Name and Address            At February __, 2001
                                    ----------------            --------------------

<S>                                 <C>                         <C>
Neuberger Berman FASCIANO
Fund
</TABLE>

                             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 Fund.

      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

      On March __, 2001 the Fund assumed all the assets and  liabilities  of the
Fasciano  Fund,  an  open-end  fund  with  substantially   identical  investment
policies.  Prior to that  date,  the  Neuberger  Berman  Fund had no  assets  or
investment operations.

      The following financial  statements and related documents are incorporated
by reference  herein and are included in the Fasciano  Fund's  Annual  Report to
shareholders for the fiscal year ended June 30, 2000:

       The audited  financial  statements of the Fasciano Fund and notes thereto
       for the  fiscal  year  ended  June 30,  2000,  and the  reports of Arthur
       Anderson  LLP,  independent  accountants,  with  respect to such  audited
       financial statements.

       The  following   unaudited  interim  financial   statements  and  related
documents are  incorporated by reference herein and are included in the Fasciano
Fund's  Semi-Annual  Report to  shareholders  for the period ended  December 31,
2000:

       The  unaudited  financial  statements  for the period ended  December 31,
2000.





                                       48
<PAGE>

                                   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 of
protection  may not be as  large  as in  Aaa-rated  securities,  fluctuation  of

<PAGE>

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 to
be considered as  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.

       Baa  -  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.

       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 (+).

       Moody's commercial paper ratings



                                       A-2
<PAGE>

       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.


















                                      A-3
<PAGE>


                          NEUBERGER BERMAN EQUITY FUNDS
                  POST-EFFECTIVE AMENDMENT NO. 93 ON FORM N-1A

                                     PART C

                                OTHER INFORMATION

ITEM 23.    EXHIBITS.
-------     --------

                Exhibit                         Description
                Number                          -----------
                ------

                (a)    (1)     Certificate of Trust.  Incorporated  by Reference
                               to    Post-Effective    Amendment   No.   70   to
                               Registrant's  Registration  Statement,  File Nos.
                               2-11357 and 811-582 (Filed August 30, 1995).

                       (2)     Restated  Certificate of Trust.  Incorporated  by
                               Reference to  Post-Effective  Amendment No. 82 to
                               Registrant's  Registration  Statement,  File Nos.
                               2-11357 and 811-582 (Filed December 21, 1998).

                       (3)     Trust   Instrument  of  Neuberger  Berman  Equity
                               Funds.     Incorporated     by    Reference    to
                               Post-Effective  Amendment No. 70 to  Registrant's
                               Registration  Statement,  File Nos.  2-11357  and
                               811-582 (Filed August 30, 1995).

                       (4)     Schedule A - Current  Series of Neuberger  Berman
                               Equity  Funds.   Incorporated   by  Reference  to
                               Post-Effective  Amendment No. 92 to  Registrant's
                               Registration  Statement,  File Nos.  2-11357  and
                               811-582 (Filed December 13, 2000).

                (b)            By-laws  of  Neuberger   Berman   Equity   Funds.
                               Incorporated   by  Reference  to   Post-Effective
                               Amendment  No.  70 to  Registrant's  Registration
                               Statement,  File Nos.  2-11357 and 811-582 (Filed
                               August 30, 1995).

                (c)    (1)     Trust   Instrument  of  Neuberger  Berman  Equity
                               Funds,  Articles IV, V, and VI.  Incorporated  by
                               Reference to  Post-Effective  Amendment No. 70 to
                               Registrant's  Registration  Statement,  File Nos.
                               2-11357 and 811-582 (Filed August 30, 1995).

                       (2)     By-Laws  of  Neuberger   Berman   Equity   Funds,
                               Articles  V,  VI,  and  VIII.   Incorporated   by
                               Reference to  Post-Effective  Amendment No. 70 to
                               Registrant's  Registration  Statement,  File Nos.
                               2-11357 and 811-582 (Filed August 30, 1995).

                (d)    (1)     (i)   Management  Agreement  Between Equity Funds
                                     and  Neuberger   Berman   Management   Inc.
                                     Incorporated by Reference to Post-Effective
                                     Amendment    No.    92   to    Registrant's
                                     Registration  Statement,  File Nos. 2-11357
                                     and 811-582 (Filed December 13, 2000).

                               (ii)  Schedule   A  -  Series  of  Equity   Funds
                                     Currently   Subject   to   the   Management
                                     Agreement. To Be Filed by Amendment.
<PAGE>


                Exhibit                         Description
                Number                          -----------
                ------

                               (iii) Schedule B - Schedule of Compensation Under
                                     the  Management  Agreement.  To Be Filed by
                                     Amendment.

                       (2)     (i)   Sub-Advisory  Agreement  Between  Neuberger
                                     Berman   Management   Inc.  and   Neuberger
                                     Berman, LLC with Respect to Equity Funds. .
                                     Incorporated by Reference to Post-Effective
                                     Amendment    No.    92   to    Registrant's
                                     Registration  Statement,  File Nos. 2-11357
                                     and 811-582 (Filed December 13, 2000).

                               (ii)  Schedule   A  -  Series  of  Equity   Funds
                                     Currently   Subject  to  the   Sub-Advisory
                                     Agreement. To Be Filed by Amendment.

                (e)    (1)     (i)   Distribution  Agreement  Between  Neuberger
                                     Berman  Equity Funds and  Neuberger  Berman
                                     Management  Inc.  with  Respect to Investor
                                     Class Shares.  Incorporated by Reference to
                                     Post-Effective    Amendment   No.   92   to
                                     Registrant's  Registration Statement,  File
                                     Nos.  2-11357 and 811-582  (Filed  December
                                     13, 2000).

                               (ii)  Schedule  A - Series  of  Neuberger  Berman
                                     Equity  Funds  Currently   Subject  to  the
                                     Investor Class Distribution  Agreement.  To
                                     Be Filed by Amendment.

                (f)            Bonus or Profit Sharing Contracts. None.

                (g)    (1)     Custodian   Contract  Between   Neuberger  Berman
                               Equity  Funds  and  State  Street  Bank and Trust
                               Company.    Incorporated    by    Reference    to
                               Post-Effective  Amendment No. 74 to  Registrant's
                               Registration  Statement,  File Nos.  2-11357  and
                               811-582 (Filed December 15, 1995).

                       (2)     Schedule  of  Compensation  under  the  Custodian
                               Contract.    Incorporated    by    Reference   to
                               Post-Effective  Amendment No. 76 to  Registrant's
                               Registration  Statement,  File Nos.  2-11357  and
                               811-582 (Filed December 5, 1996).

                (h)    (1)     (i)   Transfer   Agency  and  Service   Agreement
                                     Between  Neuberger  Berman Equity Funds and
                                     State   Street  Bank  and  Trust   Company.
                                     Incorporated by Reference to Post-Effective
                                     Amendment    No.    70   to    Registrant's
                                     Registration  Statement,  File Nos. 2-11357
                                     and 811-582 (Filed August 30, 1995).

                               (ii)  First  Amendment  to  Transfer  Agency  and
                                     Service  Agreement Between Neuberger Berman
                                     Equity  Funds  and  State  Street  Bank and
                                     Trust Company. Incorporated by Reference to
                                     Post-Effective    Amendment   No.   70   to
                                     Registrant's  Registration Statement,  File
                                     Nos.  2-11357 and 811-582 (Filed August 30,
                                     1995).

                               (iii) Second  Amendment  to  Transfer  Agency and
                                     Service  Agreement between Neuberger Berman
                                     Equity  Funds  and  State  Street  Bank and
                                     Trust Company. Incorporated by Reference to
                                     Post-Effective    Amendment   No.   77   to
                                     Registrant's  Registration Statement,  File
                                     Nos.  2-11357 and 811-582  (Filed  December
                                     12, 1997).

                               (iv)  Schedule of Compensation under the Transfer
                                     Agency and Service Agreement.  Incorporated
                                     by  Reference to  Post-Effective  Amendment
                                     No.   76   to   Registrant's   Registration
                                     Statement,  File Nos.  2-11357  and 811-582
                                     (Filed December 5, 1996).


<PAGE>


                Exhibit                         Description
                Number                          -----------
                ------

                       (2)     (i)   Administration  Agreement Between Neuberger
                                     Berman  Equity Funds and  Neuberger  Berman
                                     Management  Inc.  with  Respect to Investor
                                     Class Shares.  Incorporated by Reference to
                                     Post-Effective    Amendment   No.   92   to
                                     Registrant's  Registration Statement,  File
                                     Nos.  2-11357 and 811-582  (Filed  December
                                     13, 2000).

                               (ii)  Schedule  A - Series  of  Neuberger  Berman
                                     Equity  Funds  Currently   Subject  to  the
                                     Administration  Agreement.  To Be  Filed by
                                     Amendment.

                               (iii) Schedule B - Schedule of Compensation Under
                                     the Administration  Agreement.  To be Filed
                                     by Amendment.

                (i)            Opinion and Consent of Kirkpatrick & Lockhart LLP
                               with  Respect  to   Securities   Matters  of  the
                               Registrant. To Be Filed by Amendment.

                (j)            Consent of Independent  Auditors.  To Be Filed by
                               Amendment.

                (k)            Financial  Statements  Omitted  from  Prospectus.
                               None.

                (l)            Letter of Investment Intent.  None.

                (m)            Plan Pursuant to Rule 12b-1.  None.

                (n)            Plan  Pursuant  to Rule  18f-3.  Incorporated  by
                               Reference to  Post-Effective  Amendment No. 92 to
                               Registrant's  Registration  Statement,  File Nos.
                               2-11357 and 811-582 (Filed December 13, 2000).

                (p)            Code of Ethics  for  Registrant,  its  Investment
                               Advisers and Principal Underwriters. Incorporated
                               by Reference to  Post-Effective  Amendment No. 92
                               to Registrant's Registration Statement, File Nos.
                               2-11357 and 811-582 (Filed December 13, 2000).

ITEM 24.    PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
--------    --------------------------------------------------------------

            No  person  is  controlled  by or  under  common  control  with  the
Registrant.

ITEM 25.    INDEMNIFICATION.
--------    ----------------

            A Delaware  business  trust may provide in its governing  instrument
for  indemnification  of its officers and trustees  from and against any and all
claims and demands  whatsoever.  Article IX,  Section 2 of the Trust  Instrument
provides that the  Registrant  shall  indemnify  any present or former  trustee,
officer,  employee or agent of the Registrant  ("Covered Person") to the fullest
extent permitted by law against liability and all expenses  reasonably  incurred
or paid by him or her in connection with any claim,  action,  suit or proceeding
("Action") in which he or she becomes involved as a party or otherwise by virtue
of his or her being or having been a Covered Person and against  amounts paid or
incurred  by him  or her in  settlement  thereof.  Indemnification  will  not be
provided  to a person  adjudged  by a court or other  body to be  liable  to the
Registrant or its  shareholders  by reason of "willful  misfeasance,  bad faith,
gross negligence or reckless  disregard of the duties involved in the conduct of
his  office"  ("Disabling  Conduct"),  or not to have acted in good faith in the
reasonable  belief  that  his or her  action  was in the  best  interest  of the
Registrant.  In the event of a settlement,  no  indemnification  may be provided
unless there has been a determination that the officer or trustee did not engage
in Disabling  Conduct (i) by the court or other body  approving the  settlement;
(ii) by at  least a  majority  of  those  trustees  who are  neither  interested

<PAGE>


persons,  as that term is defined in the  Investment  Company Act of 1940 ("1940
Act"),  of the Registrant  ("Independent  Trustees"),  nor parties to the matter
based upon a review of readily  available  facts; or (iii) by written opinion of
independent legal counsel based upon a review of readily available facts.

            Pursuant to Article IX,  Section 3 of the Trust  Instrument,  if any
present or former  shareholder of any series  ("Series") of the Registrant shall
be held personally  liable solely by reason of his or her being or having been a
shareholder  and not because of his or her acts or  omissions  or for some other
reason,  the  present or former  shareholder  (or his or her  heirs,  executors,
administrators or other legal  representatives or in the case of any entity, its
general  successor)  shall  be  entitled  out of  the  assets  belonging  to the
applicable Series to be held harmless from and indemnified  against all loss and
expense arising from such liability.  The Registrant,  on behalf of the affected
Series, shall, upon request by such shareholder, assume the defense of any claim
made  against  such  shareholder  for any act or  obligation  of the  Series and
satisfy any judgment thereon from the assets of the Series.

            Section  9 of the  Management  Agreement  between  Neuberger  Berman
Management  Inc. ("NB  Management")  and the Registrant  provide that neither NB
Management  nor any director,  officer or employee of NB  Management  performing
services  for the series of the  Registrant  at the  direction  or request of NB
Management in connection with NB Management's discharge of its obligations under
the  Agreements  shall be liable for any error of  judgment or mistake of law or
for any loss  suffered  by a series in  connection  with any matter to which the
Agreements relates;  provided, that nothing in the Agreements shall be construed
(i) to protect NB  Management  against any  liability to the  Registrant  or any
series thereof or their interest  holders to which NB Management would otherwise
be subject by reason of willful  misfeasance,  bad faith, or gross negligence in
the  performance  of  its  duties,  or by  reason  of NB  Management's  reckless
disregard of its obligations and duties under the Agreements, or (ii) to protect
any director,  officer or employee of NB  Management  who is or was a trustee or
officer of the Registrant  against any liability to the Registrant or any series
thereof or its interest  holders to which such person would otherwise be subject
by reason of  willful  misfeasance,  bad faith,  gross  negligence  or  reckless
disregard  of the duties  involved in the conduct of such  person's  office with
Registrant.

            Section 1 of the  Sub-Advisory  Agreement  between NB Management and
Neuberger  Berman,  LLC  ("Neuberger  Berman")  with  respect to the  Registrant
provides  that,  in the  absence  of  willful  misfeasance,  bad  faith or gross
negligence  in the  performance  of its duties or of reckless  disregard  of its
duties and obligations under the Agreement, Neuberger Berman will not be subject
to any  liability  for any act or omission or any loss suffered by any series of
the Registrant or their interest holders in connection with the matters to which
the Agreements relate.

            Section 12 of the  Administration  Agreements between the Registrant
and NB  Management  on  behalf of each of the  classes  of shares of each of the
Registrant's  series  provides  that NB  Management  will not be  liable  to the
Registrant  for any action taken or omitted to be taken by NB  Management or its
employees, agents or contractors in carrying out the provisions of the Agreement
if such  action was taken or omitted in good  faith and  without  negligence  or
misconduct  on  the  part  of  NB  Management,  or  its  employees,   agents  or
contractors.  Section  13 of each  Administration  Agreement  provides  that the
Registrant  shall  indemnify NB Management and hold it harmless from and against
any and all losses,  damages and expenses,  including reasonable attorneys' fees
and expenses, incurred by NB Management that result from: (i) any claim, action,
suit or proceeding in connection with NB Management's  entry into or performance
of the  Agreement;  or (ii) any action taken or omission to act  committed by NB
Management in the performance of its obligations  under the Agreement;  or (iii)
any action of NB Management  upon  instructions  believed in good faith by it to
have been executed by a duly authorized  officer or  representative of a Series;
provided,  that NB Management  will not be entitled to such  indemnification  in
respect of actions or omissions  constituting  negligence  or  misconduct on the
part of NB Management, or its employees, agents or contractors.  Amounts payable
by the  Registrant  under this  provision  shall be payable solely out of assets
belonging to that Series,  and not from assets  belonging to any other Series of
the Registrant.  Section 14 of each  Administration  Agreement  provides that NB
Management  will  indemnify the Registrant and hold it harmless from and against
any and all losses,  damages and expenses,  including reasonable attorneys' fees
and expenses,  incurred by the Registrant  that result from: (i) NB Management's
failure to comply with the terms of the Agreement;  or (ii) NB Management's lack
of good faith in performing its  obligations  under the Agreement;  or (iii) the
negligence  or  misconduct  of  NB  Management,  or  its  employees,  agents  or
contractors  in  connection  with the  Agreement.  The  Registrant  shall not be
entitled to such indemnification in respect of actions or omissions constituting
negligence or misconduct on the part of the Registrant or its employees,  agents
or contractors  other than NB Management,  unless such  negligence or misconduct

<PAGE>

results from or is  accompanied  by  negligence  or misconduct on the part of NB
Management,  any affiliated person of NB Management, or any affiliated person of
an affiliated person of NB Management.

            Section 11 of the Distribution Agreements between the Registrant and
NB  Management  (on behalf of each  class of the  Registrant)  provides  that NB
Management  shall  look  only to the  assets  of a Series  for the  Registrant's
performance  of the Agreement by the  Registrant  on behalf of such Series,  and
neither the Trustees nor any of the Registrant's officers,  employees or agents,
whether past, present or future, shall be personally liable therefor.

            Insofar  as  indemnification   for  liabilities  arising  under  the
Securities  Act of 1933 ("1933 Act") may be permitted to trustees,  officers and
controlling persons of the Registrant pursuant to the foregoing  provisions,  or
otherwise, the Registrant has been advised that in the opinion of the Securities
and  Exchange  Commission,  such  indemnification  is against  public  policy as
expressed in the 1933 Act and is, therefore,  unenforceable. In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the  Registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is asserted by such trustee,  officer or  controlling  person,  the
Registrant  will,  unless in the  opinion  of its  counsel  the  matter has been
settled by controlling precedent,  submit to a court of appropriate jurisdiction
the question  whether such  indemnification  by it is against  public  policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.

ITEM 26.          BUSINESS AND OTHER CONNECTIONS OF ADVISER AND SUB-ADVISER.
-------           ---------------------------------------------------------

         There  is  set  forth  below  information  as to  any  other  business,
profession,  vocation  or  employment  of a  substantial  nature  in which  each
director or officer of NB  Management  and  Neuberger  Berman is, or at any time
during the past two years has been, engaged for his or her own account or in the
capacity of director, officer, employee, partner or trustee.

<TABLE>
<CAPTION>
NAME                                  BUSINESS AND OTHER CONNECTIONS
----                                  ------------------------------
<S>                                   <C>
Claudia Brandon                       None.
Vice President/Mutual Fund Board
Relations, NB Management Inc.

Valerie Chang                         Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Brooke Cobb                           Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Robert Conti                          Senior Vice President, NB Management Inc.;
Vice President,                       Vice President, Neuberger Berman Income Funds;
Neuberger Berman                      Vice President, Neuberger Berman Equity Funds.

Robert D'Alelio                       Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

<PAGE>

NAME                                  BUSINESS AND OTHER CONNECTIONS
----                                  ------------------------------
Ingrid Dyott,                         Vice President, NB Management Inc.
Vice President,
Neuberger Berman

Robert S. Franklin                    Vice President, High Yield Fixed Income
Vice President,                       Analyst, Prudential Insurance Company.(1)
NB Management Inc.

Brian Gaffney                         Senior Vice President, NB Management Inc.;
Managing Director,                    Vice President, Neuberger Berman Income Funds;
Neuberger Berman                      Vice President, Neuberger Berman Equity Funds.

Robert I. Gendelman                   Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Thomas E. Gengler, Jr.                Vice President, NB Management Inc.
Vice President,
Neuberger Berman

Theodore P. Giuliano                  None.
Vice President and Director, NB
Management Inc.; Managing Director,
Neuberger Berman

Joseph K. Herlihy                     Treasurer, NB Management Inc.
Senior Vice President, Treasurer,
Neuberger Berman

Michael M. Kassen                     Executive Vice President, Chief Investment
Executive Vice President,             Officer and Director, NB Management Inc.
Neuberger Berman

Barbara R. Katersky                   Senior Vice President, NB Management Inc.
Senior Vice President,
Neuberger Berman

Robert B. Ladd                        Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Jeffrey B. Lane                       Director, Chief Executive Officer and President,
Chief Executive Officer and           NB Management Inc.
President, Neuberger Berman

Josephine Mahaney                     Vice President, NB Management Inc.
Managing Director
Neuberger Berman

-----------------------
(1) Until 1998.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NAME                                  BUSINESS AND OTHER CONNECTIONS
----                                  ------------------------------
<S>                                   <C>

Michael F. Malouf                     Portfolio Manager, Dresdner RCM Global
Vice President,                       Investors.(2)
NB Management Inc.

Robert Matza                          Executive Vice President, Chief Administrative
Executive Vice President and Chief    Officer and Director, Neuberger Berman, Inc.
Administrative Officer, Neuberger
Berman; Director,
NB Management Inc.

Ellen Metzger                         Secretary, NB Management Inc.
Vice President,
Neuberger Berman

S. Basu Mullick                       Portfolio Manager, Ark Asset Management.(3)
Vice President,
NB Management Inc.

Janet Prindle                         Vice President, NB Management Inc.
Managing Director
Neuberger Berman

Kevin L. Risen                        Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Benjamin E. Segal                     Assistant Portfolio Manager, GT Global
Vice President, NB Management Inc.,   Investment Management(4).
Managing Director, Neuberger Berman

Jennifer Silver                       Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Kent C. Simons                        Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Matthew S. Stadler                    Senior Vice President and Chief Financial
Senior Vice President and Chief       Officer, NB Management Inc
Financial Officer,
Neuberger Berman

Peter E. Sundman                      Executive Vice President and Director,
President, NB Management Inc.;        Neuberger Berman Inc.; President and Chief
Executive Vice President,             Executive Officer, Neuberger Berman Income
Neuberger Berman                      Funds.

-----------------------
(2) Until 1998.
(3) Until 1998.
(4) Until 1998.


<PAGE>

NAME                                  BUSINESS AND OTHER CONNECTIONS
----                                  ------------------------------

Judith M. Vale                        Vice President, NB Management Inc.
Managing Director,
Neuberger Berman

Catherine Waterworth                  Managing Director, TCW Group Inc.(5)
Vice President,
NB Management Inc.

Allan R. White, III                   Portfolio Manager, Salomon Asset
Vice President, NB                    Management.(6)
Management; Managing Director,
Neuberger Berman
</TABLE>

         The principal address of NB Management Inc.,  Neuberger Berman,  and of
each of the investment companies named above, is 605 Third Avenue, New York, New
York 10158.

ITEM 27.          PRINCIPAL UNDERWRITERS.
-------           ----------------------

         (a) NB Management, the principal underwriter distributing securities of
the  Registrant,  is also the principal  underwriter and distributor for each of
the following investment companies:

                  Neuberger Berman Advisers Management Trust
                  Neuberger Berman Income Funds

                  NB  Management  is also the  investment  manager to the master
funds in which the above-named investment companies invest.

         (b) Set  forth  below  is  information  concerning  the  directors  and
officers of the  Registrant's  principal  underwriter.  The  principal  business
address of each of the persons  listed is 605 Third Avenue,  New York,  New York
10158-0180, which is also the address of the Registrant's principal underwriter.

<TABLE>
<CAPTION>

    NAME                            POSITIONS AND OFFICES           POSITIONS AND OFFICES
    ----                            ---------------------           ---------------------
                                    WITH UNDERWRITER                OFFICES
                                    ----------------                -------
                                                                    WITH REGISTRANT
                                                                    ---------------
<S>                                 <C>                             <C>

    Claudia Brandon                 Vice President/Mutual Fund      Secretary
                                    Board Relations

    Valerie Chang                   Vice President                  None

    Brooke A. Cobb                  Vice President                  None

    Robert Conti                    Senior Vice President           Vice President

    Robert W. D'Alelio              Vice President                  None

    Ingrid Dyott                    Vice President                  None

    Robert S. Franklin              Vice President                  None

-----------------------
(5) Until 1998.
(6) Until 1998.

<PAGE>

    NAME                            POSITIONS AND OFFICES           POSITIONS AND OFFICES
    ----                            ---------------------           ---------------------
                                    WITH UNDERWRITER                OFFICES
                                    ----------------                -------
                                                                    WITH REGISTRANT
                                                                    ---------------

    Brian Gaffney                   Senior Vice President           Vice President

    Robert I. Gendelman             Vice President                  None

    Thomas E. Gengler, Jr.          Vice President                  None

    Theodore P. Giuliano            Vice President and Director     None

    Joseph K. Herlihy               Treasurer                       None

    Michael M. Kassen               Vice President and Director     President

    Barbara R. Katersky             Senior Vice President           None

    Robert L. Ladd                  Vice President                  None

    Josephine Mahaney               Vice President                  None

    Michael F. Malouf               Vice President                  None

    Robert Matza                    Director                        None

    Ellen Metzger                   Secretary                       None

    Basu Mullick                    Vice President                  None

    Janet W. Prindle                Vice President                  None

    Kevin L. Risen                  Vice President                  None

    Benjamin Segal                  Vice President                  None

    Jennifer K. Silver              Vice President                  None

    Kent C. Simons                  Vice President                  None

    Matthew S. Stadler              Senior Vice President and       None
                                    Chief Financial Officer

    Peter E. Sundman                President                       Trustee and Chairman of
                                                                    the Board

    Judith M. Vale                  Vice President                  None

    Catherine Waterworth            Vice President                  None

    Allan R. White, III             Vice President                  None
</TABLE>

         (c) No  commissions  or other  compensation  were received  directly or
indirectly  from the  Registrant  by any  principal  underwriter  who was not an
affiliated person of the Registrant.

ITEM 28.    LOCATION OF ACCOUNTS AND RECORDS.
--------    ---------------------------------

            All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, as amended, and the rules promulgated  thereunder
with respect to the  Registrant  are  maintained  at the offices of State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, except
for the Registrant's  Trust  Instrument and By-laws,  minutes of meetings of the
Registrant's  Trustees  and  shareholders  and  the  Registrant's  policies  and
contracts,  which are  maintained  at the offices of the  Registrant,  605 Third
Avenue, New York, New York 10158.

<PAGE>

ITEM 29.    MANAGEMENT SERVICES
--------    -------------------

            Other  than as set  forth  in  Parts A and B of this  Post-Effective
Amendment,  the  Registrant  is not a party  to any  management-related  service
contract.

ITEM 30.    UNDERTAKINGS
--------    ------------

            None.


<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of the  Securities  Act of 1933  and the
Investment Company Act of 1940, the Registrant,  NEUBERGER BERMAN EQUITY FUNDS
has duly  caused  this  Post-Effective  Amendment  No. 93 to its  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereto  duly
authorized,  in the  City and  State of New York on the 21st day of  December,
2000.

                         NEUBERGER BERMAN EQUITY FUNDS


                          By: /s/ Michael M. Kassen
                              ---------------------
                              Michael M. Kassen
                              President

      Pursuant  to  the   requirements   of  the   Securities   Act  of  1933,
Post-Effective  Amendment  No.  93 has  been  signed  below  by the  following
persons in the capacities and on the date indicated.

Signature                     Title                                 Date
---------                     -----                                 ----


/s/ Peter E. Sundman          Chairman of the Board         December 21, 2000
-------------------------     and Trustee (Chief
Peter E. Sundman              Executive Officer)


/s/ Michael M. Kassen         President and Trustee         December 21, 2000
-------------------------
Michael M. Kassen



/s/ Richard Russell                  Treasurer
-------------------------     (Principal Financial and
Richard Russell                 Accounting Officer)         December 21, 2000


                       (signatures continued on next page)






<PAGE>


Signature                     Title                                 Date
---------                     -----                                 ----


/s/ John Cannon               Trustee                       December 21, 2000
-------------------------
John Cannon



/s/ Faith Colish              Trustee                       December 21, 2000
-------------------------
Faith Colish



/s/ Walter G. Ehlers          Trustee                       December 21, 2000
-------------------------
Walter G. Ehlers



/s/ C. Anne Harvey            Trustee                       December 21, 2000
-------------------------
C. Anne Harvey



/s/ Barry Hirsch              Trustee                       December 21, 2000
-------------------------
Barry Hirsch



/s/ Robert A. Kavesh          Trustee                       December 21, 2000
-------------------------
Robert A. Kavesh



/s/ Howard A. Mileaf          Trustee                       December 21, 2000
-------------------------
Howard A. Mileaf



/s/ Edward I. O'Brien         Trustee                       December 21, 2000
-------------------------
Edward I. O'Brien




<PAGE>


/s/ John P. Rosenthal         Trustee                       December 21, 2000
-------------------------
John P. Rosenthal



/s/ William E. Rulon          Trustee                       December 21, 2000
-------------------------
William E. Rulon



/s/ Cornelius T. Ryan         Trustee                       December 21, 2000
-------------------------
Cornelius T. Ryan



/s/ Tom Decker Seip           Trustee                       December 21, 2000
-------------------------
Tom Decker Seip



                              Trustee
-------------------------
Gustave H. Shubert



/s/ Candace L. Straight       Trustee                       December 21, 2000
-------------------------
Candace L. Straight



/s/ Peter P. Trapp            Trustee                       December 21, 2000
-------------------------
Peter P. Trapp











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