As filed with the Securities and Exchange Commission on June 5, 1998
Registration No. 2-88566
Investment Company Act File No. 811-4255
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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. 27 x
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 x
Amendment No. 27 x
(Check appropriate box or boxes)
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST1
(Exact Name of Registrant as Specified in Charter)
605 Third Avenue, 2nd Floor,
New York, New York 10158-0006
(Address of Principal Executive Offices)
Registrant's Telephone Number: (212) 476-8800
Lawrence Zicklin
c/o Neuberger&Berman Management Incorporated
605 Third Avenue, 2nd Floor
New York, New York 10158-0006
(Name and Address of Agent for Service)
Copies to:
Jeffrey S. Puretz, Esq.
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to [ ] on __________ pursuant to
paragraph (b) paragraph (b)
[ ] 60 days after filing pursuant to [ ] on _________ pursuant to paragraph
paragraph (a)(1), or (a)(1)
[X] 75 days after filing pursuant to [ ] on ___________ pursuant to
paragraph (a)(2) or paragraph (a)(2) of Rule 485
[ ] This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
1 Registrant is a "master/feeder fund." This Post-Effective Amendment
No. 27 includes a signature page for the master fund, Advisers
Managers Trust.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
The enclosed materials relate to the Socially Responsive Portfolio (the
"Portfolio"), which is a separate series of Neuberger&Berman Advisers Management
Trust (the "Registrant").
The remaining Portfolios of the Registrant are offered by Prospectuses
and a Statement of Additional Information that have been filed with the
Commission in a previous Post-Effective Amendment to the Registrant's
Registration Statement.
I. Prospectus for Registrant's Socially Responsive Portfolio
Form N-1A Part A Item
Prospectus Caption
1. Cover page................................ Cover Page
2. Synopsis.................................. Inapplicable
3. Condensed Financial
Information............................... Performance Information
4. General Description of
Registrant................................ Investment Programs; Information
Regarding Organization,
Capitalization, and Other
Matters
5. Management of the Fund.................... Management and Administration
5 A. Management's Discussion of
Fund Performance....................... To be provided in Registrant's
Annual Reports to Shareholders
6. Capital Stock and Other
Securities................................ Cover Page; Information
Regarding Organization,
Capitalization and Other
Matters; Dividends, Other
Distributions & Tax Status
7. Purchase of Securities
Being Offered............................. Share Prices and Net Asset
Value; Distribution and
Redemption of Trust Shares
8. Redemption or Repurchase.................. Distribution and Redemption of
Trust Shares; Information
Regarding Organization,
Capitalization, and Other
Matters
9. Pending Legal Proceedings................. Inapplicable
<PAGE>
Part B
II. Joint Statement of Additional Information for the Socially Responsive
Portfolio
Form N-1A Part B Item Statement of Additional
Information Caption
10. Cover Page................................ Cover Page
11. Table of Contents......................... Table of Contents
12. General Information and History........... Information Regarding
Organization, Capitalization and
Other Matters (Part A);
Investment Information
13. Investment Objectives and Policies........ Investment Information
14. Management of the Fund.................... Trustees and Officers;
Investment Management, Advisory
and Administration Services
15. Control Persons and Principal
Holders of Securities.................... Control Persons and Principal
Holders of Securities
16. Investment Advisory and other Services.... Investment Management, Advisory
and Administration Services;
Distribution Arrangements;
Reports to Shareholders;
Custodian; Independent Auditors
17. Brokerage Allocation...................... Portfolio Transactions
18. Capital Stock and other Securities........ Information Regarding
Organization, Capitalization,
and Other Matters (Part A)
19. Purchase, Redemption and Pricing
of Securities Being Offered............. Share Prices and Net Asset Value
(in Part A); Distribution
Arrangements; Additional
Redemption Information
20. Tax Status................................ Dividends, Other Distributions
and Tax Status (Part A);
Additional Tax Information
21. Underwriters.............................. Distribution Arrangements
22. Calculation of Performance Data........... Inapplicable
23. Financial Statements...................... Inapplicable
PART C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>
SOCIALLY RESPONSIVE PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
Prospectus
August ___, 1998
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Socially Responsive Portfolio
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Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to
meet differing investment objectives and currently is comprised of nine separate
Portfolios, one of which is offered herein. While each portfolio (each a
"Portfolio" and collectively, "Portfolios") issues its own class of shares,
which in some instances have rights separate from other classes of shares, the
Trust is one entity with respect to certain important items (e.g., certain
voting rights).
Shares of the Trust are offered to life insurance companies ("Life
Companies") for allocation to certain of their separate accounts established for
the purpose of funding variable annuity contracts and variable life insurance
policies ("Variable Contracts"). Shares of one of the Portfolios are also
offered directly to qualified pension and retirement plans ("Qualified Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE SOCIALLY
RESPONSIVE PORTFOLIO ONLY.
----------------------------------------
Each Portfolio invests all of its net investable assets in its
corresponding series (each a "Series") of Advisers Managers Trust ("Managers
Trust"), an open-end management investment company. AMT Socially Responsive
Investments, the Socially Responsive Portfolio's corresponding Series, is
managed by Neuberger&Berman Management Incorporated ("N&B Management"). AMT
Socially Responsive Investments invests in securities in accordance with an
investment objective, policies, and limitations identical to those of the
Socially Responsive Portfolio. The investment performance of the Socially
Responsive Portfolio directly corresponds with the investment performance of AMT
Socially Responsive Investments. This "master/feeder fund" structure is
different from that of many other investment companies which directly acquire
and manage their own portfolios of securities. For more information on this
structure that you should consider, see "Information Regarding Organization,
Capitalization, and Other Matters" on page __.
Please read this Prospectus before investing in the Socially Responsive
Portfolio and keep it for future reference. It contains information about the
Socially Responsive Portfolio that a prospective investor should know before
investing. A Statement of Additional Information ("SAI") about the Portfolio and
the Series, dated _________, 1998, is on file with the Securities and Exchange
Commission ("SEC"). The SAI is incorporated herein by reference (so it is
legally considered a part of this Prospectus). You can obtain a free copy of the
SAI by writing the Trust at 605 Third Avenue, 2nd Floor, New York, NY
10158-0180, or by calling the Trust at 800-877-9700.
The SEC maintains an internet site at http://www.sec.gov that contains
this Prospectus, the SAI, material incorporated by reference, and other
information regarding the Portfolios and the Series.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE
FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
Date of Prospectus: ____________, 1998
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY..................................................................2
The Portfolios and Series.......................................2
Risk Factors....................................................2
Management......................................................2
The Neuberger&Berman Investment Approach........................3
INVESTMENT PROGRAM.......................................................3
AMT Socially Responsive Investments.............................3
Special Considerations of Mid-Cap Company Stocks................5
Short-term Trading; Portfolio Turnover..........................5
Other Investments...............................................5
Ratings of Debt Securities......................................5
Borrowings......................................................6
PERFORMANCE INFORMATION..................................................6
INFORMATION REGARDING ORGANIZATION, CAPITALIZATION, AND OTHER MATTERS....7
The Portfolios..................................................7
The Series......................................................8
SHARE PRICES AND NET ASSET VALUE.........................................9
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS............................10
Dividends and Other Distributions...............................10
Tax Status......................................................10
SPECIAL CONSIDERATIONS...................................................10
MANAGEMENT AND ADMINISTRATION............................................11
Trustees and Officers...........................................11
Investment Manager, Administrator, Sub-Adviser and Distributo...11
Expenses........................................................12
Expense Limitation..............................................13
Transfer and Dividend Paying Agent..............................13
DISTRIBUTION AND REDEMPTION OF TRUST SHARES..............................14
Distribution and Redemption of Trust Shares.....................14
Distribution Plan...............................................14
SERVICES.................................................................15
DESCRIPTION OF INVESTMENTS...............................................15
<PAGE>
SUMMARY
The Portfolios and Series
Each Portfolio of the Trust invests in a corresponding Series of
Managers Trust that, in turn, invests in securities in accordance with an
investment objective, policies, and limitations that are identical to those of
the Portfolio. This is sometimes called a master\feeder fund structure, because
each Portfolio "feeds" shareholders' investments into its corresponding Series,
a "Master" fund. The trustees of the Trust believe that this structure may
benefit shareholders. Although the Trust is currently the only investor in each
Series, investment in a Series by investors in addition to the Trust may enable
the Series to achieve economies of scale that could reduce expenses. For more
information about the organization of the Portfolios and the Series, including
certain features of the master/feeder fund structure, see "Information Regarding
Organization, Capitalization, and Other Matters" on page __. For more details
about AMT Socially Responsive Investments, its investments and their risks, see
"Investment Program" on page __, "Ratings of Debt Securities" on page __,
"Borrowings" on page __, and "Description of Investments" on page __.
A summary of important features of the Socially Responsive Portfolio
and its corresponding Series appears below. You should also read the complete
descriptions of the Portfolio and its corresponding Series' investment
objectives and policies, which begin on page __, and related information. Of
course, there can be no assurance that the Portfolio will meet its investment
objective.
Neuberger&Berman Investment Principal Series
Advisers Management Trust Objective Investments
SOCIALLY RESPONSIVE Long-term capital Common stocks of companies
appreciation that meet both financial
and social criteria
==============================================================================
Risk Factors
An investment in any Portfolio involves certain risks, depending upon
the types of investments made by its corresponding Series. Special risk factors
apply to investments, which may be made by AMT Socially Responsive Investments,
in equity securities, foreign securities, options and futures contracts, and
zero coupon bonds. AMT Socially Responsive Investments may invest in fixed
income securities, the value of which, measured in the currency in which they
are denominated, is likely to decline in times of rising interest rates and rise
in times of falling interest rates. In general, the longer the maturity of a
fixed income security, the more pronounced is the effect of a change in interest
rates on the value of the security. The value of debt securities is also
affected by the creditworthiness of the issuer.
Management
N&B Management, with the assistance of Neuberger&Berman, LLC
("Neuberger&Berman") as sub-adviser, selects investments for AMT Socially
Responsive Investments. N&B Management also provides administrative services to
the Series and the Portfolio and acts as distributor of the shares of the
Portfolio. See "Management and Administration" on page ___.
The Neuberger&Berman Investment Approach
AMT Socially Responsive Investments is managed using the value-oriented
investment approach. A value-oriented portfolio manager buys stocks that are
selling for a price that is lower than what the manager believes they are worth.
These include stocks that are currently under-researched or are temporarily out
of favor on Wall Street.
Portfolio managers identify value stocks in several ways. One of the
most common identifiers is a low price-to-earnings ratio--that is, stocks
selling at multiples of earnings per share that are lower than that of the
market as a whole. Other criteria are high dividend yield, a strong balance
sheet and financial position, a recent company restructuring with the potential
to realize hidden values, strong management, and low price-to-book value (net
value of the company's assets). A value-oriented manager believes that, over
time, securities that are undervalued are more likely to appreciate in price and
be subject to less risk of price decline than securities whose market prices
have already reached their perceived economic values. This approach also
contemplates selling portfolio securities when N&B Management believes they have
reached their potential.
INVESTMENT PROGRAM
The investment policies and limitations of the Socially Responsive
Portfolio and its corresponding Series, AMT Socially Responsive Investments, are
identical. The Portfolio invests only in its corresponding Series. Therefore,
the following shows you the kinds of securities in which AMT Socially Responsive
Investments invests. For an explanation of some types of investments, see
"Description of Investments" on page __.
Investment policies and limitations of the Socially Responsive
Portfolio and its corresponding Series are not fundamental unless otherwise
specified in this Prospectus or the SAI. Fundamental policies and limitations
may not be changed without shareholder approval. A non-fundamental policy or
limitation may be changed by the trustees of the Trust without shareholder
approval. There can be no assurance that the Series and the Portfolio will
achieve their objectives. The Portfolio, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning
AMT Socially Responsive Investments' investment program are described in the
SAI.
AMT Socially Responsive Investments
The investment objective of AMT Socially Responsive Investments and its
corresponding Portfolio is to seek long-term capital appreciation by investing
primarily in securities of companies that meet both financial criteria and the
Social Policy. This investment objective is not fundamental.
The Series invests primarily in the stocks of medium- to
large-capitalization companies. In seeking capital appreciation, the Series
generally follows a value-oriented investment approach to the selection of
individual securities. Prospective investments are first subjected to detailed
financial analysis and are not studied further unless N&B Management believes
that they are currently undervalued relative to the issuer's assets and
potential earning power.
The Series expects to be nearly fully invested at all times, primarily
in common stock. It may also invest in convertible securities and preferred
stock and in foreign securities and ADRs of foreign companies that meet the
Social Policy. On occasion, deposits with community banks and credit unions may
be considered for investment. Under normal conditions, at least 65% of the
Series' total assets are invested in accordance with the Social Policy, and at
least 65% of its total assets are invested in equity securities. The Series
expects that substantially all of its equity securities will be selected in
accordance with the Social Policy.
The Series may also engage in portfolio management techniques that are
not subject to the Social Policy, such as lending securities and purchasing and
selling put and call options on securities and currencies, futures contracts,
options on futures contracts, and forward contracts.
For more information, see "Special Considerations of Mid-Cap Company
Stocks" on page ___.
SOCIAL POLICY. Companies deemed acceptable from a financial standpoint
are evaluated by N&B Management using a database that Neuberger&Berman has
designed to develop and monitor information on companies in various categories
of social criteria. N&B Management seeks to invest in issuers that show
leadership in the following major areas of social impact: environment, workplace
diversity and employment. N&B Management also evaluates investments based on
companies' records in other areas of concern: public health, type of products
and corporate citizenship.
The Series' social orientation is predicated in part on the belief that
good corporate citizenship is good business; that is, good policies with respect
to such social criteria as employment and environmental practices may often have
a positive impact on the company's "bottom line." N&B Management recognizes,
however, that many social criteria represent goals rather than achievements and
that goals are often difficult to quantify. In each area, N&B Management seeks
to elicit and understand management's vision of the company's social role and,
in making investment decisions, gives weight to enlightened, progressive
policies. The information used by N&B Management in evaluating prospective
investments for conformity with the Social Policy is obtained primarily from
services that specialize in reporting information from issuers or from agencies
that oversee issuers' activities or compliance with laws and regulations.
Additionally, the information may come from public interest groups and from N&B
Management's discussions with company representatives. N&B Management attempts
to assess the objectivity of all information that it receives. However,
decisions made by N&B Management inevitably involve some level of subjective
judgment.
The Series seeks to invest in companies that show leadership in
addressing environmental problems effectively and in promoting progressive
workplace policies, especially as they affect women and minorities. N&B
Management seeks to identify companies committed to improving their
environmental performance by examining their policies and programs in such areas
as energy conservation, pollution reduction and control, waste management,
recycling, and careful stewardship of natural resources. In a similar manner,
N&B Management seeks to identify companies whose policies and practices
recognize the importance of human resources to corporate productivity and the
centrality of the work experience to the quality of life of all employees. The
Series seeks to invest in companies that demonstrate leadership in such areas as
providing and promoting equal opportunity, investing in the training and
re-training of workers, promoting a safe working environment, providing
family-oriented flexible benefits, and involving workers in job and workflow
engineering.
In making investment decisions, N&B Management takes into account a
company's record as a member of the various communities of which it is a part
and its commitment to product quality and value. Currently, the Social Policy
screens out any company that derives more than 5% of its total annual revenue
from (i) manufacturing and selling alcohol and/or tobacco, (ii) sales in or
services related to gambling, or (iii) the manufacturing of weapons systems.
Additionally, the Series does not invest in any company that derives its total
annual revenue primarily from non-consumer sales to the military or that owns or
operates one or more nuclear power facilities or is a major supplier of nuclear
power services.
Not every issuer selected by N&B Management will demonstrate leadership
in each category of the Social Policy. The social records of most companies are
written in shades of gray. For example, a company may have a progressive record
in employee relations and community affairs but a poor one on product marketing
issues. Another company may have a mixed record within a single area. Finally,
it is often difficult to distinguish between substantive commitment and public
relations. This principal works both ways: there are many companies with
excellent records on social issues that maintain a low profile for one reason or
another. Taking these factors into consideration, N&B Management emphasizes the
overall approach that companies take toward the areas of social impact and pays
particular attention to progress achieved toward the goals of the Social Policy.
If securities held by the Series no longer satisfy the Social Policy,
the Series will seek to dispose of the securities as soon as reasonably
practicable, which may cause the Series to sell the securities at a time not
desirable from a purely financial standpoint.
Special Considerations of Mid-Cap Company Stocks
Investments in mid-cap company stocks may present greater opportunities
for capital appreciation than investments in stocks of large-capitalization
companies ("large-cap companies"). However, mid-cap company stocks may have
higher risk and volatility. These stocks generally are not as broadly traded as
large-cap company stocks and their prices thus may fluctuate more widely and
abruptly. Any such movements in stocks held by the Series would be reflected in
the Portfolio's net asset value. Mid-cap company stocks also are less researched
than large-cap company stocks and are often overlooked in the market.
Short-Term Trading; Portfolio Turnover
While AMT Socially Responsive Investments does not purchase securities
with the intention of profiting from short-term trading, the Series may sell
portfolio securities when N&B Management believes that such action is advisable.
Other Investments
Any part of AMT Socially Responsive Investment's assets may be retained
temporarily in investment grade fixed income securities of non-governmental
issues, U.S. Government and Agency Securities, repurchase agreements, money
market instruments, commercial paper, and cash and cash equivalents when N&B
Management believes that significant adverse market, economic, political, or
other circumstances require prompt action to avoid losses. Generally, the
foregoing temporary investments for AMT Socially Responsive Investments are
selected with a concern for the social impact of each investment.
To the extent that the Series is invested in temporary defensive
instruments, it will not be pursuing its investment objective.
Ratings of Debt Securities
HIGH QUALITY DEBT SECURITIES. High quality debt securities are
securities that have received a rating from at least one nationally recognized
statistical rating organization ("NRSRO"), such as Standard & Poor's Rating
Group ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Services Inc., or Duff & Phelps Credit Rating Co., in one of the two highest
rating categories (the highest category in the case of commercial paper) or, if
not rated by any NRSRO, such as U.S. Government and Agency securities, have been
determined by N&B Management to be of comparable quality.
INVESTMENT GRADE DEBT SECURITIES. Investment grade debt securities are
those receiving ratings from at least one NRSRO in one of the four highest
rating categories or, if unrated by any NRSRO, deemed by N&B Management to be of
comparable quality to such rated securities. Securities rated by Moody's in its
fourth highest category (Baa) may have speculative characteristics; a change in
economic factors could lead to a weakened capacity of the issuer to repay.
Further information regarding the ratings assigned to securities
purchased by the Series and their meaning is included in the SAI and in the
Portfolio's and Series' annual report.
Borrowings
AMT Socially Responsive Investments has a fundamental policy that it
may not borrow money, except that it may (1) borrow money from banks for
temporary or emergency purposes and not for leveraging or investment and (2)
enter into reverse repurchase agreements for any purpose, so long as the
aggregate amount of borrowings and reverse repurchase agreements does not exceed
one-third of the Series' total assets (including the amount borrowed) less
liabilities (other than borrowings). The Series does not expect to borrow money
or to enter into reverse repurchase agreements. As a non-fundamental policy, the
Series may not purchase portfolio securities if its outstanding borrowings,
including reverse repurchase agreements, exceed 5% of its total assets.
PERFORMANCE INFORMATION
Performance information for the Socially Responsive Portfolio may be
presented from time to time in advertisements and sales literature. The
performance of the Portfolio is commonly measured as total return, which
measures the change in the value of an investment over a particular period. The
Portfolio's total return is quoted for the period since inception through the
most recent calendar quarter and is determined by calculating the change in
value of a hypothetical $1,000 investment in the Portfolio during that period.
Total return calculations assume reinvestment of all Portfolio dividends and
distributions from net investment income and net realized gains, respectively.
An average annual total return is a hypothetical rate of return that,
if achieved annually, would result in the same cumulative total return as was
actually achieved for the period. This evens out year-to-year variations in
actual performance. Past results do not, of course, guarantee future
performance. Share prices may vary, and your shares when redeemed may be worth
more or less than your original purchase price. Any Portfolio performance
information presented will also include or be accompanied by performance
information for the Life Company separate accounts investing in the Trust which
will take into account insurance-related charges and other expenses under such
insurance policies and contracts. Further information regarding the Portfolio's
performance is presented in the Trust's annual report to shareholders.
Advertisements concerning the Trust may from time to time compare the
performance of the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned the Portfolio or its adviser by various
publications and statistical services. Any such comparisons or rankings are
based on past performance and the statistical computations performed by
publications and services, and are not necessarily indications of future
performance. Because the Portfolio is a managed investment vehicle investing,
through its corresponding Series, in a wide variety of securities, the
securities owned by the Series will not match those making up an index. Please
note that indices do not take into account any fees and expenses of investing in
the individual securities that they track and that individuals cannot invest in
any index.
PERFORMANCE OF A FUND COMPARABLE TO THE SOCIALLY RESPONSIVE PORTFOLIO AND AMT
SOCIALLY RESPONSIVE INVESTMENTS. AMT Socially Responsive Investments and the
Socially Responsive Portfolio (the "AMT Funds") have investment objectives,
policies, limitations and strategies substantially similar to those of, and the
same portfolio manager as, another mutual fund managed by N&B Management -
Neuberger&Berman Socially Responsive Fund (and its corresponding master series).
The following table shows the average annual total returns of Neuberger&Berman
Socially Responsive Fund for the 1-year and since inception periods ended
December 31, 1997.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS
ENDED DECEMBER 31, 1997
1 Year Since Inception
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Neuberger&Berman Socially Responsive Fund +24.41% +19.66% (3/16/94)
The figures for the Neuberger&Berman Socially Responsive Fund depicted
above reflect that fund's expense ratio, and do not reflect any expenses or
charges that apply to insurance company variable annuity or variable life
insurance contracts. Although the objectives, polices, limitations and
strategies of the AMT Funds are substantially similar to that of
Neuberger&Berman Socially Responsive Fund and its corresponding master series,
the AMT Funds are distinct mutual funds and may have different fees, expenses,
investment returns, portfolio holdings, and risk/return characteristics than
Neuberger&Berman Socially Responsive Fund and its corresponding series.
Historical performance of substantially similar mutual funds is not indicative
of future performance of the AMT Funds.
The information set forth above relies on data supplied by
Neuberger&Berman or derived by Neuberger&Berman from statistical services,
reports or other sources Neuberger&Berman believes to be reliable.
INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
Each Portfolio is a separate series of the Trust, a Delaware business
trust organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has nine separate Portfolios. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
N&B Management serves as investment manager to other investment
companies that offer their shares directly to the public, some of which have
names similar to the names of the Portfolios and the Series, but are not part of
the Trust or Managers Trust. These other funds are offered by means of separate
prospectuses. The performance of these other funds may be different than the
performance of the Portfolios and Series.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited number
of shares of beneficial interest (par value $0.001 per share). Shares of each
Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, and shareholders have no preemptive or other right to subscribe to any
additional shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold annual
meetings of shareholders of the Portfolios. The trustees will call special
meetings of shareholders of a Portfolio only if required under the 1940 Act or
in their discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Portfolio entitled to vote. Pursuant to current
interpretations of the 1940 Act, the Life Companies will solicit voting
instructions from Variable Contract owners with respect to any matters that are
presented to a vote of shareholders of that Portfolio.
CERTAIN PROVISIONS OF THE TRUST INSTRUMENT. Under Delaware law, the shareholders
of a Portfolio will not be personally liable for the obligations of any
Portfolio; a shareholder is entitled to the same limitation of personal
liability extended to shareholders of corporations. To guard against the risk
that Delaware law might not be applied in other states, the Trust Instrument
requires that every written obligation of the Trust or a Portfolio contain a
statement that such obligation may be enforced only against the assets of the
Trust or Portfolio and provides for indemnification out of Trust or Portfolio
property of any shareholder nevertheless held personally liable for Trust or
Portfolio obligations, respectively.
The Series
Each Series is a separate series of Managers Trust, a New York common
law trust organized as of May 24, 1994. Managers Trust is registered under the
1940 Act as a diversified, open-end management investment company. Managers
Trust has nine separate Series. 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.
PORTFOLIOS' INVESTMENT IN THE SERIES. Each Portfolio is a "feeder" fund that
seeks to achieve its investment objective by investing all of its net investable
assets in its corresponding Series (a "master" fund) having the same investment
objective, policies, and limitations as the Portfolio. Accordingly, each Series
directly acquires its own securities and its corresponding Portfolio acquires an
indirect interest in those securities.
Each Portfolio's investment in its corresponding Series is in the form
of a non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
The trustees of the Trust and Managers Trust believe that investment in
a Series by other potential investors may enable the Series to realize economies
of scale that could reduce operating expenses, thereby producing higher returns
and benefiting all shareholders. However, a Portfolio's investment in its
corresponding Series may be affected by the actions of other large investors in
the Series, if any. For example, if a large investor in a Series other than a
Portfolio redeemed its interest in the Series, the Series' remaining investors
(including the Portfolio) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.
Each Portfolio may withdraw its entire investment from its
corresponding Series at any time, if the trustees of the Trust determine that it
is in the best interests of the Portfolio and its shareholders to do so. A
Portfolio might withdraw, for example, if there were other investors in the
Series with power to, and who did by a vote of all investors (including the
Portfolio), change the investment objective, policies, or limitations of the
Series in a manner not acceptable to the trustees of the Trust. A withdrawal
could result in a distribution in kind of securities (as opposed to a cash
distribution) by the Series to the Portfolio. That distribution could result in
a less diversified portfolio of investments for the Portfolio and could affect
adversely the liquidity of the Portfolio's investment portfolio. If a Portfolio
decided to convert those securities to cash, it usually would incur brokerage
fees or other transaction costs. If a Portfolio withdrew its investment from a
Series, the trustees would consider what action might be taken, including the
investment of all of the Portfolio's net investable assets in another pooled
investment entity having substantially the same investment objective as the
Portfolio or the retention by the Portfolio of its own investment manager to
manage its assets in accordance with its investment objective, policies, and
limitations. The inability of the Portfolio to find a suitable replacement could
have a significant impact on shareholders.
INVESTOR MEETINGS AND VOTING. Each Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in a Series will be
entitled to vote in proportion to its relative beneficial interest in the
Series. On most issues subjected to a vote of investors, as required by the 1940
Act and other applicable law, a Portfolio will solicit proxies from its
shareholders and will vote its interest in the Series in proportion to the votes
cast by the Portfolio's shareholders. Pursuant to current interpretations of the
1940 Act, the Life Companies who are shareholders of the Portfolio through
registered separate accounts will solicit voting instructions from contract
owners with respect to any matters that are presented to a vote of Portfolio
shareholders. If there are other investors in a Series, there can be no
assurance that any issue that receives a majority of the votes cast by Portfolio
shareholders will receive a majority of votes cast by all Series investors;
indeed, if other investors hold a majority interest in the Series, they could
have voting control of the Series.
CERTAIN PROVISIONS. Each investor in a Series, including a Portfolio, will be
liable for all obligations of the Series, but not of the other Series. However,
the risk of an investor in a Series incurring financial loss on account of such
liability would be limited to circumstances in which the Series had inadequate
insurance and was unable to meet its obligations out of its assets. Upon
liquidation of a Series, investors would be entitled to share pro rata in the
net assets of the Series available for distribution to investors.
SHARE PRICES AND NET ASSET VALUE
The Socially Responsive Portfolio's shares are bought or sold at a
price that is the Portfolio's net asset value ("NAV") per share. The NAVs for
the Portfolio and its corresponding Series are calculated by subtracting
liabilities from total assets (in the case of the Series, the market value of
the securities the Series holds plus cash and other assets; in the case of the
Portfolio, its percentage interest in its corresponding Series, multiplied by
the Series' NAV, plus any other assets). The Portfolio's per share NAV is
calculated by dividing its NAV by the number of Portfolio shares outstanding and
rounding the result to the nearest full cent.
The Portfolio and its corresponding Series calculate their NAVs as of
the close of regular trading on The New York Stock Exchange ("NYSE"), usually 4
p.m. Eastern time, on each day the NYSE is open.
AMT Socially Responsive Investments values its equity securities
(including options) listed on the NYSE, the American Stock Exchange, other
national exchanges, or the NASDAQ market, and other securities for which market
quotations are readily available, at the last sale price on the day the
securities are being valued. If there is no reported sale of such a security on
that day, that security is valued at the mean between its closing bid and asked
prices on that day. The Series values all other securities and assets, including
restricted securities, by a method that the trustees of Managers Trust believe
accurately reflects fair value.
If N&B Management believes that the price of a security obtained under
the Series valuation procedures (as described above) does not represent the
amount that the Series reasonably expects to receive on a current sale of the
security, the Series will value the security based on a method that the trustees
of Managers Trust believe accurately reflects fair value.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
The Socially Responsive Portfolio annually distributes substantially
all of its share of its corresponding Series' net investment income (net of the
Portfolio's expenses), net realized capital gains from investment transactions,
and net realized gains from foreign currency transactions, if any, normally in
February.
The Portfolio offers its shares solely to separate accounts of the Life
Companies. All dividends and other distributions are distributed to the separate
accounts and will be automatically invested in Trust shares. Dividends and other
distributions made by the Portfolio to the separate accounts are taxable, if at
all, to the extent described in the prospectuses for the Variable Contracts.
Tax Status
Each Portfolio is treated as a separate entity for Federal income tax
purposes and intends to qualify annually for treatment as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended ("Code"), so that it will not have to pay Federal income tax on that
part of its investment company taxable income (generally consisting of net
investment income, net short-term capital gain and net gains from certain
foreign currency transactions) and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) that it distributes to its
shareholders. The Portfolio intends to distribute all of its net income and
gains to its shareholders each year.
Certain Portfolios have received a ruling from the Internal Revenue
Service that each Portfolio, as an investor in a corresponding Series of
Managers Trust, will be deemed to own a proportionate share of the Series'
assets and income for purposes of determining whether the Portfolio qualifies as
a regulated investment company. That ruling also concluded that the Series will
be treated as a separate partnership for Federal income tax purposes and will
not be a "publicly traded partnership," with the result that the Series will not
be subject to Federal income tax (and, instead, each investor therein will take
into account in determining its Federal income tax liability its share of the
Series' income, gains, losses, deductions, and credits). The Socially Responsive
Portfolio and AMT Socially Responsive Investments will apply for a similar
ruling.
The foregoing is only a summary of some of the important Federal income
tax considerations generally affecting the Portfolio and its shareholders; see
the SAI for a more detailed discussion. Prospective shareholders are urged to
consult their tax advisers.
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable
Contracts issued through separate accounts of the Life Companies which may or
may not be affiliated. See "Distribution and Redemption of Trust Shares" on page
___.
Section 817(h) of the Code imposes certain diversification standards on
the underlying assets of segregated asset accounts that fund contracts such as
the Variable Contracts (that is, the assets of the Series), which are in
addition to the diversification requirements imposed on the Portfolios by the
1940 Act and Subchapter M of the Code. Failure to satisfy those standards would
result in imposition of Federal income tax on a Variable Contract owner with
respect to the increase in the value of the Variable Contract. Section 817(h)(2)
provides that a segregated asset account that funds contracts such as the
Variable Contracts is treated as meeting the diversification standards if, as of
the close of each calendar quarter, the assets in the account meet the
diversification requirements for a regulated investment company and no more than
55% of those assets consist of cash, cash items, U.S. Government securities and
securities of other regulated investment companies.
The Treasury Regulations amplify the diversification standards set
forth in Section 817(h) and provide an alternative to the provision described
above. Under the regulations, an investment portfolio will be deemed adequately
diversified if (i) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (ii) no more than 70% of such
value is represented by any two investments; (iii) no more than 80% of such
value is represented by any three investments; and (iv) no more than 90% of such
value is represented by any four investments. For purposes of these Regulations
all securities of the same issuer are treated as a single investment, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
AMT Socially Responsive Investments will be managed with the intention
of complying with these diversification requirements. It is possible that, in
order to comply with these requirements, less desirable investment decisions may
be made which would affect the investment performance of the Portfolio. Section
817 of the Code and the Treasury Regulations thereunder do not currently address
variable contract diversification in the context of a master/feeder fund
structure. As described under "Tax Status" above, certain Portfolios have
received a ruling from the Internal Revenue Service concluding that the
"look-through" rule of Section 817, which would permit the segregated asset
accounts to look through to the underlying assets of the Series, will be
available for the variable contract diversification test. The Socially
Responsive Portfolio and AMT Socially Responsive Investments will apply for a
similar ruling.
MANAGEMENT AND ADMINISTRATION
Trustees and Officers
The trustees of the Trust and Managers Trust, who are currently the
same individuals, have oversight responsibility for the operations of each
Portfolio and each Series, respectively. The SAI contains general background
information about each trustee and officer of the Trust and Managers Trust. The
officers of the Trust and Managers Trust who are officers and/or directors of
N&B Management and/or principals of Neuberger&Berman serve without compensation
from the Portfolios or the Series. The trustees of the Trust and Managers Trust,
including a majority of those trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust or Managers Trust, have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest,
including, if necessary, creating a separate board of trustees of Managers
Trust.
Investment Manager, Administrator, Sub-Adviser and Distributor
N&B Management serves as the investment manager of the Series, as
administrator of the Portfolio, and as distributor of the shares of the
Portfolio. N&B Management and its predecessor firms have specialized in the
management of no-load mutual funds since 1950. In addition to serving the
Series, N&B Management currently serves as investment manager or investment
adviser of other mutual funds. Neuberger&Berman acts as sub-adviser for the
Series and other mutual funds managed by N&B Management. These funds had
aggregate net assets of approximately $20.7 billion as of December 31, 1997.
As sub-adviser, Neuberger&Berman furnishes N&B Management with
investment recommendations and research information without added cost to the
Series. N&B Management compensates Neuberger&Berman for its costs in connection
with those services. Neuberger&Berman is a member firm of the NYSE and other
principal exchanges and acts as the Series' principal broker in the purchase and
sale of portfolio securities and the sale of covered call options.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $52.9 billion of assets as of December 31, 1997.
All of the voting stock of N&B Management is owned by individuals who are
principals of Neuberger&Berman.
Janet Prindle is manager of the Series and Robert Ladd and Ingrid
Saukaitis are associate managers of the Series. Ms. Prindle, a Vice President of
N&B Management since November 1993, has been a principal of Neuberger&Berman
since 1983. Ms. Prindle is Director of Socially Responsive Investment Services
at Neuberger&Berman, and has been researching and developing corporate
responsibility criteria as they apply to investments since 1989. She has been
managing money using these criteria since 1990. During the prior five years Mr.
Ladd was a portfolio manager for Neuberger&Berman. Ms. Saukaitis has been
Director of Social Research for Neuberger&Berman since February 1997. From 1995
to January 1997 she was project director for a non-profit group that provided
social research on companies to the investment industry. Both Mr. Ladd and Ms.
Saukaitis are Assistant Vice Presidents of N&B Management. Ms. Prindle, Mr. Ladd
and Ms. Saukaitis have had responsibility for AMT Socially Responsive
Investments since its inception.
N&B Management serves as distributor in connection with the offering of
the Portfolio's shares. In connection with the sale of the Portfolio's shares,
the Portfolio has authorized the distributor to give only such information and
to make only such statements and representations as are contained in the
Portfolio's Prospectus. The distributor is responsible only for information
given and statements and representations made in the Portfolio's Prospectus and
is not responsible for any information given or any statements or
representations made by the Life Companies or by brokers or salespersons in
connection with Variable Contracts.
Neuberger&Berman acts as the principal broker for the Series to the
extent a broker is used in the purchase and sale of portfolio securities and in
the sale of covered call options, and for those services receives brokerage
commissions. In effecting securities transactions, the Series seeks to obtain
the best price and execution of orders. For more information, see the SAI.
The principals and employees of Neuberger&Berman and officers and
employees of N&B Management, together with their families, have invested over
$125 million of their own money in Neuberger&Berman Funds.
To mitigate the possibility that the Series will be adversely affected
by personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that restrict securities trading in
personal accounts of the portfolio managers and others who normally come into
possession of information on portfolio transactions.
YEAR 2000. Like other financial and business organizations, the Portfolios and
Series could be adversely affected if computer systems they rely on do not
properly process date-related information and data involving the years 2000 and
after. N&B Management and Neuberger&Berman are taking steps that they believe
are reasonable to address this problem in their own computer systems and to
obtain assurances that comparable steps are being taken by the Portfolios and
Series other major service providers. N&B Management also attempts to evaluate
the potential impact of this problem on the issuers of investment securities
that the Series purchase. However, there can be no assurance that these steps
will be sufficient to avoid any adverse impact on the Portfolios and Series.
Expenses
N&B Management provides investment management services to the Series
that include, among other things, making and implementing investment decisions
and providing facilities and personnel necessary to operate the Series. N&B
Management provides administrative services to the Portfolio that include
furnishing similar facilities and personnel for the Portfolio. With the
Portfolio's consent, N&B Management may sub-contract some of its
responsibilities under its administration agreement with the Portfolio to third
parties. For such administrative and investment management services, N&B
Management is paid the following fees:
Fees (as percentage of average daily net assets)
Management Administration
(Series) (Portfolio)
SOCIALLY RESPONSIVE 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
==============================================================================
The Portfolio bears all expenses of its operations other than those
borne by N&B Management as administrator of the Portfolio and as distributor of
its shares. The Series bears all expenses of its operations other than those
borne by N&B Management as investment manager of the Series. These expenses
include, but are not limited to, for the Portfolio and the Series, accounting
and legal fees, and compensation for trustees who are not affiliated with N&B
Management; for the Portfolio, transfer agent fees and the cost of printing and
sending reports and proxy materials to shareholders; and for the Series,
custodial fees for securities. Any expenses which are not directly attributable
to a specific Series of Managers Trust are allocated on the basis of the net
assets of the respective Series.
Expense Limitation
N&B Management has voluntarily undertaken until May 1, 1999 to limit
the Portfolio's expenses by reimbursing the Portfolio for its total operating
expenses and its pro rata share of its corresponding Series' total operating
expenses, including compensation to N&B Management, but excluding, taxes,
interest, extraordinary expenses, brokerage commissions and transaction costs,
that exceed, in the aggregate, 1.50% per annum of the Portfolio's average daily
net asset value. The Portfolio has in turn agreed to repay through December 31,
2000 expenses borne by N&B Management, so long as the Portfolio's annual
operating expenses during that period do not exceed the expense limitation.
The effect of any expense limitation by N&B Management is to reduce
operating expenses of the Portfolio and its corresponding Series and thereby
increase total return.
Transfer and Dividend Paying Agent
State Street Bank and Trust Company ("State Street"), Boston,
Massachusetts, acts as transfer and dividend paying agent for the Portfolio and
in so doing performs certain bookkeeping, data processing and administrative
services. All correspondence should be sent to State Street, P.O. Box 1978,
Boston, MA 02105. State Street provides similar services to the Series as the
Series' transfer agent. State Street also acts as the custodian of the Series'
and the Portfolio's assets.
DISTRIBUTION AND REDEMPTION OF TRUST SHARES
Distribution and Redemption of Trust Shares
Shares of the Trust are issued and redeemed in connection with
investments in and payments under the Variable Contracts issued through separate
accounts of the Life Companies which may or may not be affiliated with the
Trust. Shares of one Portfolio of the Trust are also offered directly to
Qualified Plans. Shares of the Trust are purchased and redeemed at net asset
value.
The Boards of Trustees of the Trust and Managers Trust have undertaken
to monitor the Trust and Managers Trust, respectively, for the existence of any
material irreconcilable conflict between the interests of the Variable Contract
owners of the Life Companies and to determine what action, if any, should be
taken in the event of a conflict. The Life Companies and N&B Management are
responsible for reporting any potential or existing conflicts to the Boards. Due
to differences of tax treatment and other considerations, it is theoretically
possible that the interests of various Variable Contract owners participating in
the Trust and Managers Trust and the interests of Qualified Plans investing in
the Trust and Managers Trust may conflict. If such a conflict were to occur, one
or more Life Company separate accounts or Qualified Plans might withdraw its
investment in the Trust. This might force the Trust to sell portfolio securities
at disadvantageous prices.
Redemptions will be effected by the separate accounts to meet
obligations under the Variable Contracts and by the Qualified Plans. Contract
owners do not deal directly with the Trust with respect to acquisition or
redemption of shares. The trustees of the Trust may refuse to sell shares of any
Portfolio to any person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the trustees acting in good faith
and in light of their fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of such Portfolio.
Distribution Plan
The Board of Trustees of the Trust has adopted a non-fee Distribution
Plan for each Portfolio of the Trust.
The Distribution Plan recognizes that N&B Management may use its assets
and resources, including its profits from administration fees paid by a
Portfolio, to pay expenses associated with the distribution of Portfolio shares.
However, N&B Management will not receive any separate fees for such expenses. To
the extent that any payments made by a Portfolio should be deemed to be indirect
financing of any activity primarily intended to result in the sale of shares of
the Portfolio within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to be authorized by the Distribution Plan.
Under the Distribution Plan, N&B Management is required to provide the
Trust with quarterly reports of the amounts expended in connection with
financing any activity primarily intended to result in the sale of Portfolio
shares, and the purpose for which such expenditure was made. The Distribution
Plan may be terminated as to a particular Portfolio at any time by a vote of a
majority of the independent trustees of the Trust or by a vote of a majority of
the outstanding voting securities of that Portfolio. The Distribution Plan does
not require N&B Management to perform any specific type or level of distribution
activities or to incur any specific level of expenses for activities primarily
intended to result in the sale of shares of the Portfolio.
SERVICES
N&B Management may use its assets and resources, including its profits
from administration fees paid by a Portfolio, to pay Life Companies for services
rendered to current and prospective owners of Variable Contracts, including the
provision of support services such as providing information about the Trust and
the Portfolios, the delivery of Trust documents, and other services. Any such
payments are made by N&B Management, and not by the Trust, and N&B Management
does not receive any separate fees for such expenses.
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program"
herein, AMT Socially Responsive Investments, as indicated below, may make the
following investments, among others, individually or in combination, although
the Series may not necessarily buy any or all of the types of securities or use
any or all of the investment techniques that are described. These investments
may be limited by the requirements with which the Series must comply if the
Portfolio is to qualify as a regulated investment company for tax purposes. The
use of hedging or other techniques is discretionary and no representation is
made that the risk of the Series will be reduced by the techniques discussed in
this section. For additional information on the following investments and on
other types of investments the Series may make, see the SAI.
U.S. GOVERNMENT AND AGENCY SECURITIES. 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, instrumentalities, or other U.S. Government-sponsored
enterprises, such as the Government National Mortgage Association ("GNMA"),
Fannie Mae, (formerly Federal National Mortgage Association), Freddie Mac (also
known as the Federal Home Loan Mortgage Corporation), Student Loan Marketing
Association (commonly known as "Sallie Mae"), Tennessee Valley Authority, and
various federally chartered or sponsored banks. Agency securities may be backed
by the full faith and credit of the United States, 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 certain mortgage-backed securities. The market prices of U.S. Government
and Agency Securities are not guaranteed by the government and generally
fluctuate inversely with changing interest rates.
ILLIQUID, RESTRICTED AND RULE 144A SECURITIES. The Series may invest up to 15%
of its net assets in illiquid securities, which 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 Securities Act of
1933, 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 N&B Management, acting pursuant to guidelines
established by the trustees of Managers Trust, 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
Series to value or dispose of due to the absence of an active trading market.
The sale of some illiquid securities by the Series may be subject to legal
restrictions which could be costly to the Series. Due to the absence of an
active trading market, the Series may experience difficulty in valuing or
disposing of illquid securities.
EQUITY SECURITIES. Equity securities may include common stocks, preferred
stocks, convertible securities and warrants. Common stocks, and preferred stocks
represent shares of ownership in a corporation. Preferred stocks usually have
specific dividends and rank after bonds and before common stocks in claims on
assets of the corporation should it be dissolved. Increases and decreases in
earnings are usually reflected in a corporation's stock price. Convertible
securities are debt or preferred equity securities convertible into common
stock. Usually, convertible securities pay dividends or interest at rates higher
than common stock, but lower than other securities. Convertible securities
usually participate to some extent in the appreciation or depreciation of the
underlying stock into which they are convertible. Warrants are options to buy a
stated number of shares of common stock at specified price anytime during the
life of the warrants. Equity securities' prices fluctuate based on changes in a
corporation's financial condition and on changes in market or economic
conditions, which may cause fluctuations in the Portfolio's NAV per share.
FOREIGN SECURITIES. Foreign securities are those of issuers organized
and doing business principally outside the United States, including non-U.S.
governments, their agencies, and instrumentalities. The Series may only invest
up to 10% of the value of its total assets, measured at the time of investment,
in foreign securities that are issued by non-U.S. entities. This limitation does
not apply with respect to foreign securities that are denominated in U.S.
dollars, including ADRs.
The Series may invest in ADRs, EDRs, GDRs, and IDRs. ADRs (sponsored or
unsponsored) are receipts typically issued by a U.S. bank or trust company
evidencing its ownership of the underlying foreign securities. Most ADRs are
denominated in U.S. dollars and are traded on a U.S. stock exchange. Issuers of
the securities underlying unsponsored ADRs are not contractually obligated to
disclose material information in the United States. There may not be a
correlation between such information and the market value of the unsponsored
ADR. 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.
Factors affecting investments in foreign securities include, but are
not limited to, varying custody, brokerage and settlement practices which may
cause delays and expose the Series to the creditworthiness of a foreign broker;
difficulty in pricing some foreign securities; less public information about
issuers of securities; less governmental regulation and supervision over
issuance and trading of securities; the unavailability of financial information
or the difficulty of interpreting financial information prepared under foreign
accounting standards; less liquidity and more volatility in foreign securities
markets; the possibility of expropriation; the imposition of foreign withholding
and other taxes; potentially adverse local, political, economic, social, or
diplomatic developments; limitations on the movement of funds or other assets of
the Series between different countries; difficulties in invoking legal process
abroad and enforcing contractual obligations; and the difficulty of assessing
economic trends in foreign countries. Investment in foreign securities also
involves higher brokerage and custodian expenses than does investment in
domestic securities.
In addition, investing in securities of foreign companies and
governments may involve other risks which are not ordinarily associated with
investing in domestic securities. These risks include changes in currency
exchange rates and currency exchange control regulations or other foreign or
U.S. laws or restrictions applicable to such investments or devaluations of
foreign currencies. A decline in the exchange rate between the U.S. dollar and a
foreign currency will reduce the value of certain portfolio securities
irrespective of the performance of the underlying investment. In addition, the
Series generally will incur costs in connection with conversion between various
currencies. Investments in depository receipts (whether or not denominated in
U.S. dollars) may be subject to exchange controls and changes in rates of
exchange with the U.S. dollar because the underlying security is usually
denominated in foreign currency. All of the foregoing risks may be intensified
in emerging industrialized and less developed countries.
JAPANESE INVESTMENTS. The Series may invest a portion of its assets in
securities of Japanese issuers. The performance of the Series may therefore be
affected by events affecting the Japanese economy and the exchange rate between
the Japanese yen and the U.S. dollar. Japan has experienced a severe recession,
including a decline in real estate values and other events that adversely
affected the balance sheets of many financial institutions and indicate that
there may be structural weaknesses in the Japanese financial system. The effects
of this economic downturn may be felt for a considerable period and are being
exacerbated by the currency exchange rate. Japan is heavily dependent on foreign
oil and is located in a seismically active area, and severe earthquakes may
damage important elements of the country's infrastructure. Japanese economic
prospects may be affected by the political and military situations of its near
neighbors, notably North and South Korea, China and Russia.
CALL OPTIONS. The Series may try to reduce the risk of securities price changes
(hedge) or generate income by writing (selling) covered call options against
portfolio securities and may purchase call options in related closing
transactions. When the Series writes a covered call option against a security,
the Series is obligated to sell that security to the purchaser of the option at
a fixed price at any time during a specified period if the purchaser decides to
exercise the option. The maximum price the Series may realize on the security
during the option period is the fixed price. The Series continues to bear the
risk of a decline in the security's price, although this risk is reduced by the
premium received for writing the option.
The writing of options is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions including transactional expense, price
volatility and a high degree of leverage. The writing of options could result in
significant increases in the Series' turnover rate.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member bank or a securities
dealer and simultaneously agrees to sell it back at a higher price, at a
specified date, usually less than a week later. The underlying securities must
fall within the Series' investment policies and limitations. The Series also may
lend portfolio securities to banks, brokerage firms, or institutional investors
to earn income. Costs, delays or losses could result if the selling party to a
repurchase agreement or the borrower of portfolio securities becomes bankrupt or
otherwise defaults. N&B Management monitors the creditworthiness of borrowers
and repurchase agreement sellers.
CONVERTIBLE SECURITIES. The Series may invest up to 20% of its net assets 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.
Many convertible securities are rated below investment grade, or are unrated.
The Series does not intend to purchase any convertible securities that are not
investment grade.
OTHER INVESTMENTS. Although the Series ordinarily invests primarily in common
stocks, when market conditions warrant it may invest in preferred stocks,
securities convertible into or exchangeable for common stocks, U.S. Government
and Agency Securities, investment grade debt securities, or money market
instruments, or may retain assets in cash or cash equivalents. See "Investment
Program-Ratings of Debt Securities" on page ___.
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
Dated August ___, 1998
The Socially Responsive Portfolio (the "Portfolio") of Neuberger&Berman
Advisers Management Trust ("Trust") offers shares pursuant to a Prospectus dated
__________, 1998 and invests all of its net investable assets in AMT Socially
Responsive Investments (the "Series").
The Portfolio's Prospectus provides the basic information that an investor
ought to know before investing. A copy of the Prospectus may be obtained,
without charge, by writing the Trust at 605 Third Avenue, 2nd Floor, New York,
NY 10158-0180, or by calling the Trust at 800-877-9700.
This SAI relates only to the Socially Responsive Portfolio. A separate
statement of additional information dated May 1, 1998 has been prepared for the
Balanced Portfolio, Guardian Portfolio, Growth Portfolio, International
Portfolio, Limited Maturity Bond Portfolio, Liquid Asset Portfolio Mid-Cap
Growth Portfolio and Partners Portfolio of the Trust (these Portfolios along
with the Socially Responsive Portfolio are referred to collectively as the
"Portfolios").
This Statement of Additional Information ("SAI") is not a prospectus and
should be read in conjunction with the Prospectus.
No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this SAI in connection
with the offering made by the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Portfolio or its distributor. The Prospectus and this SAI do not
constitute an offering by the Portfolio or its distributor in any jurisdiction
in which such offering may not lawfully be made.
<PAGE>
TABLE OF CONTENTS
INVESTMENT INFORMATION........................................................4
Investment Policies and Limitations..................................4
Rating Agencies......................................................6
Discussions With Portfolio Manager...................................7
Additional Investment Information....................................9
CERTAIN RISK CONSIDERATIONS..................................................24
PERFORMANCE INFORMATION......................................................25
TRUSTEES AND OFFICERS........................................................27
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..........................32
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES..................35
Expense Limitation..................................................36
Management and Control of N&B Management............................36
Sub-Adviser.........................................................37
Investment Companies Advised........................................38
DISTRIBUTION ARRANGEMENTS....................................................40
ADDITIONAL REDEMPTION INFORMATION............................................41
Suspension of Redemptions...........................................41
Redemptions in Kind.................................................41
DIVIDENDS AND OTHER DISTRIBUTIONS............................................41
ADDITIONAL TAX INFORMATION...................................................42
Taxation of the Portfolio...........................................42
Taxation of the Series.............................................42
PORTFOLIO TRANSACTIONS.......................................................45
Portfolio Turnover..................................................48
REPORTS TO SHAREHOLDERS......................................................48
CUSTODIAN AND TRANSFER AGENT.................................................48
INDEPENDENT AUDITORS.........................................................48
LEGAL COUNSEL................................................................49
REGISTRATION STATEMENT.......................................................49
APPENDIX A: RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER................A-1
<PAGE>
INVESTMENT INFORMATION
The Portfolio is a separate series of the Trust, a Delaware business trust
registered with the Securities and Exchange Commission ("SEC") as a diversified,
open-end management investment company. The Portfolio seeks its investment
objective by investing all of its net investable assets in the corresponding
Series of Advisers Managers Trust ("Managers Trust"), which has an investment
objective identical to, and a name similar to, that of the Portfolio. The
Series, in turn, invests in accordance with an investment objective, policies
and limitations identical to those of the Portfolio. (The Trust and Managers
Trust, which also is a diversified, open-end management investment company, are
together referred to below as the "Trusts.") All Series of Managers Trust are
managed by Neuberger&Berman Management Incorporated ("N&B Management").
The following information supplements the discussion in the Prospectus of
the investment objective, policies and limitations of the Portfolio and the
Series. Unless otherwise specified, those investment objectives, policies and
limitations are not fundamental and may be changed by the Trustees of the Trust
and Managers Trust. The fundamental investment objectives, policies and
limitations of the Portfolio or the Series may not be changed without the
approval of the lesser of: (1) 67% of the total units of beneficial interest
("shares") of the Portfolio or Series represented at a meeting at which more
than 50% of the outstanding Portfolio or Series shares are represented; or (2) a
majority of the outstanding shares of the Portfolio or Series. These percentages
are required by the Investment Company Act of 1940 ("1940 Act") and are referred
to in this SAI as a "1940 Act majority vote." Whenever the Portfolio is called
upon to vote on a change in the investment objective or a fundamental investment
policy or limitation of its corresponding Series, the Portfolio casts its votes
thereon in proportion to the votes of its shareholders at a meeting thereof
called for that purpose.
Investment Policies and Limitations
The Portfolio has the following fundamental investment policy, to enable it
to invest in the Series:
Notwithstanding any other investment policy of the Portfolio, the
Portfolio 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 Portfolio.
All other fundamental and non-fundamental investment objective, policies
and limitations of the Portfolio are identical to those of the Series.
Therefore, although the following discusses the investment objective, policies
and limitations of the Series, it applies equally to the Portfolio. Because the
Portfolio invests all of its net investable assets in the Series, however, the
Series' investment policies and limitations govern the type of investments in
which the corresponding Portfolio has an indirect interest.
For purposes of the investment limitation on concentration in a particular
industry, N&B Management determines the "issuer" of a municipal obligation that
is not a general obligation note or bond based on the obligation's
characteristics. The most significant of these characteristics is the source of
funds for the repayment of principal and payment of interest on the obligation.
If an obligation is backed by an irrevocable letter of credit or other
guarantee, without which the obligation would not qualify for purchase under the
Portfolio's quality restrictions, an issuer of the letter of credit or the
guarantee is considered an issuer of the obligation. If an obligation meets the
quality restrictions of the Series without credit support, the Series treats the
commercial developer or the industrial user, rather than the governmental entity
or the guarantor, as the issuer of the obligation, even if the obligation is
backed by a letter of credit or other guarantee. Also for purposes of the
investment limitation on concentration in a particular industry, both
mortgage-backed and asset-backed securities are grouped together as a single
industry.
Except for the limitation on borrowing, any maximum percent of securities
or assets contained in any investment policy or limitation will not be
considered to be exceeded unless the percentage limitation is exceeded
immediately after, and because of, a transaction by the Series.
The Series' fundamental investment policies and limitations are as follows:
1. Borrowing. The Series may not borrow money, except that the Series 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 Series' total assets, the Series 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 Series 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 Series from purchasing
futures contracts or options (including options on futures and foreign
currencies and forward contracts but excluding options or futures contracts on
physical commodities) or from investing in securities of any kind.
For purposes of the limitations on commodities, the Series does not
consider foreign currencies or forward contracts to be physical commodities.
3. Diversification. The Series 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) if, as a result, (i) more than 5% of the value of the Series'
total assets would be invested in the securities of that issuer or (ii) the
Series would hold more than 10% of the outstanding voting securities of that
issuer.
4. Industry Concentration. The Series 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 purchases of (i) the
securities issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities, (ii) investments by the Series in certificates of deposit or
bankers' acceptances issued by domestic branches of U.S. banks.
5. Lending. The Series 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 Series may not purchase real estate unless acquired as
a result of the ownership of securities or instruments, but this restriction
shall not prohibit the Series 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 Series may not issue senior securities, except as
permitted under the 1940 Act.
8. Underwriting. The Series may not underwrite securities of other issuers,
except to the extent that the Series, in disposing of portfolio securities, may
be deemed to be an underwriter within the meaning of the Securities Act of 1933
("1933 Act").
The following non-fundamental investment policies and limitations apply to
the Series.
1. Borrowing. The Series 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 Series may not make any loans other than securities
loans.
3. Margin Transactions. The Series may not purchase securities on margin
from brokers or other lenders except that the Series 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. Illiquid Securities. The Series 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 Series has valued the securities, such as repurchase agreements
maturing in more than seven days.
5. Foreign Securities. The Series may not invest more than 10% of the value
of its total assets in securities of foreign issuers, provided that this
limitation shall not apply to foreign securities denominated in U.S. dollars.
Rating Agencies
As discussed in the Prospectus, the Series may purchase securities rated by
Standard & Poor's Ratings Group ("S&P"), Moody's Investors Service, Inc.
("Moody's"), or any other nationally recognized statistical rating organization
("NRSRO"). 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 Series may rely on the ratings of any NRSRO, the
Series mainly refers to ratings assigned by S&P and Moody's, which are described
in Appendix A to this SAI. The Series may also invest in unrated securities that
are deemed comparable in quality by N&B Management to the rated securities in
which the Series may permissibly invest.
Discussions With Portfolio Manager
AMT Socially Responsive Investments
Securities for this Series are selected through a two-phase process. The
first part of the process is financial. The portfolio manager analyzes a
universe of companies according to N&B Management's value-oriented philosophy
and looks for stocks which are undervalued for any number of reasons. The
manager focuses on financial fundamentals, including balance sheet ratios and
cash flow analysis, and meets with company management in an effort to understand
how those unrecognized values might be realized in the market.
The second part of the process is social screening. N&B Management's social
research is based on the same kind of philosophy that governs its financial
approach: N&B Management believes that first-hand knowledge and experience are
its most important tools. Utilizing a database, the portfolio manager does
careful, in-depth tracking and analyzes a large number of companies on some
eighty issues in six broad social categories. The manager uses a wide variety of
sources to determine company practices and policies in these areas. Performance
is analyzed in light of knowledge of the issues and of the best practices in
each industry.
The portfolio manager understands that, for many issues and in many
industries, absolute standards are elusive and often counterproductive. Thus, in
addition to quantitative measurements, the manager places value on such
indicators as management commitment, progress, direction, and industry
leadership.
An Interview with the Portfolio Manager
Q: First things first. How do you begin your stock selection process?
A: Our first question is always: On financial grounds alone, is a company a
smart investment? For a company's stock to meet our financial test, it must pass
a number of hurdles.
We look for bargains, just like the portfolio managers of the other Series.
More specifically, we search for companies that we believe have terrific
products, excellent customer service, and solid balance sheets but because they
may have missed quarterly earnings expectations by a few pennies, because their
sectors are currently out of favor, because Wall Street overreacted to a
temporary setback, or because the company's merits aren't widely known, their
stocks are selling at a discount.
While we look at the stock's fundamentals carefully, that's not all we
examine. We meet an awful lot of CEOs and CFOs. Top officers of over 400
companies visit Neuberger&Berman each year, and we're also frequently on the
road visiting dozens of corporations.
When we're face to face with a CEO, we're searching for answers to two
crucial questions: "Does the company have a vision of where it wants to go?" and
"Can the management team make it happen?" We've analyzed companies for over
three decades, and we always look for companies that have both clear strategies
and management talent.
Q: When you evaluate a company's balance sheet, what matters the most to
you?
A: Definitely a company's "free cash flow." Compare it to your household's
discretionary income -- the money you have left over each month after you pay
off your monthly debt and other expenses. With ample free cash flow, a company
can do any number of things. It can buy back its stock. Make important
acquisitions. Expand its research and development spending. Or increase its
dividend payments.
When a company generates lots of excess cash flow, it has growth capital at
its disposal. It can invest for higher profits down the line and improve
shareholder value. Determining exactly how a company intends to spend its excess
cash is an entirely different matter -- and that's where the information learned
in our company meetings comes in. Still, you've got to have the extra cash in
the first place. Which is why we pay so much attention to it.
Q: So you take a hard look at a company's balance sheet and its management.
After a company passes your financial test, what do you do next?
A: After we're convinced of a company's merits on financial grounds alone,
we review its record as a corporate citizen. In particular, we look for evidence
of leadership in three key areas: concern for the environment, workplace
diversity, and enlightened employment practices.
It should be clear that our social screening always takes place after we
search far and wide for what we believe are the best investment opportunities
available. This is a crucial point, and an analogy can be used to explain it.
Let's assume you're looking to fill a vital position in your company. What you'd
pay attention to first is the candidate's competence: Can he or she do the job?
So after interviewing a number of candidates, you'd narrow your list to those
that are highly qualified. To choose from this smaller group, you might look at
the candidate's personality: Can he or she get along with everyone in your
group?
Obviously, you wouldn't hire an unqualified person simply because he or she
is likable. What you'd probably do is give the job to a highly qualified person
who is also compatible with your group.
Now, let's turn to the companies that do make our financial cuts. How do we
decide whether they meet our social criteria? Once again, our regular meetings
with CEOs are key. We look for top management's support of programs that put
more women and minorities in the pipeline to be future officers and board
members; that minimize emissions, reduce waste, conserve energy, and protect
natural resources; and that enable employees to balance work and family life
with benefits such as flextime and generous maternal and paternal leave.
We realize that companies are not all good or all bad. Instead of looking
for ethical perfection, we analyze how a company responds to troublesome
problems. If a company is cited for breaking a pollution law, we evaluate its
reaction. We also ask: Is it the first time? Do its top executives have a plan
for making sure it doesn't happen again and how committed are they?
If we're satisfied with the answers, a company makes it into our portfolio.
When all is said and done, we invest in companies that have diverse work forces,
strong CEOs, tough environmental standards, and terrific balance sheets. In our
judgment, financially strong companies that are also good corporate citizens are
more likely to enjoy a competitive advantage. These days, more and more people
won't buy a product unless they know it's environmentally friendly. In a similar
vein, companies that treat their workers well may be more productive and
profitable.
Q: Why would investors be attracted to the Socially Responsive Portfolio?
A: Our shareholders are looking to invest for the future in more ways than
one. While they care deeply about their own financial futures, they're equally
passionate about the world they leave to later generations. They want to be able
to meet their college bills and leave a world where the air is a little cleaner
and where the doors to the executive suite are a little more open.
Additional Investment Information
The Series may make the following investments, among others, although it
may not buy all of the types of securities, or use all of the investment
techniques, that are described.
Repurchase Agreements. In a repurchase agreement, the Series purchases
securities from a bank that is a member of the Federal Reserve System, or a
securities dealer, that agrees to repurchase the securities from the Series at a
higher price on a designated future date. Repurchase agreements generally are
for a short period of time, usually less than a week. Repurchase agreements with
a maturity of more than seven business days are considered to be illiquid
securities; the Series may not enter into such 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 Series will enter into a repurchase agreement only if
(1) the underlying securities are of the type (excluding maturity and duration
limitations) that the Series' 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 Series' account by its
custodian or a bank acting as the Series' agent.
Securities Loans. In order to realize income, the Series may lend portfolio
securities with a value not exceeding 33-1/3% of its total assets to banks,
brokerage firms, or institutional investors judged creditworthy by N&B
Management. Borrowers are required continuously to secure their obligations to
return securities on loan from the Series by depositing collateral, which will
be marked to market daily, in a form determined to be satisfactory by the
Trustees of Managers Trust (the "Series Trustees") and equal to at least 100% of
the market value of the loaned securities, which will also be marked to market
daily. N&B Management believes the risk of loss on these transactions is slight
because, if a borrower were to default for any reason, the collateral should
satisfy the obligation. However, as with other extensions of secured credit,
loans of portfolio securities involve some risk of loss of rights in the
collateral should the borrower fail financially.
Restricted Securities and Rule 144A Securities. The Series 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 markets for unregistered
securities and the importance of institutional investors in the formation of
capital, the SEC has adopted Rule 144A under the 1933 Act, which 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 Series qualify under Rule
144A, and an institutional market develops for those securities, the Series
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 have the effect of increasing the level of the Series' illiquidity. N&B
Management, acting under guidelines established by the Series' Trustees, may
determine that certain securities qualified for trading under Rule 144A are
liquid. Foreign securities that are freely tradable in their principal markets
are not considered to be restricted. 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 Series 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 Series may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Series might obtain a less favorable
price than prevailed when it decided to sell. To the extent restricted
securities, including Rule 144A securities, are illiquid, purchases thereof will
be subject to the Series' 15% limit on investments in illiquid securities.
Restricted securities for which no market exists are priced by a method that the
Series' Trustees believe accurately reflect fair value.
Commercial Paper. Commercial paper is a short-term debt security issued by
a corporation, bank, municipality, or other issuer, usually for purposes such as
financing current operations. The Series may invest only in commercial paper
receiving the highest rating from S&P (A-1) or Moody's (P-1) or deemed by N&B
Management to be of comparable quality. The Series 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, N&B Management may in certain cases determine that such paper
is liquid, pursuant to guidelines established by the Series' Trustees.
Reverse Repurchase Agreements. In a reverse repurchase agreement, the
Series 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; these agreements are considered borrowings for purposes of the Series'
investment limitations and policies concerning borrowings. While a reverse
repurchase agreement is outstanding, the Series will deposit in a segregated
account with its custodian cash, fixed income, or equity securities, marked to
market daily to the extent required by SEC staff policy, in an amount at least
equal to the Series' obligations under the agreement. 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 Series.
Foreign Securities. The Series may invest in U.S. dollar-denominated
securities of foreign issuers (including banks, governments, and
quasi-governmental organizations) and foreign branches of U.S. banks, including
negotiable certificates of deposit ("CDs"), bankers acceptances and commercial
paper. These investments are subject to the Series' quality requirements.
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 standards or the application of standards that are different or less
stringent than those applied in the United States.
The Series also may invest in equity, debt, or other income-producing
securities that are denominated in or indexed to foreign currencies, including,
but not limited to (1) common and preferred stocks, (2) convertible securities,
(3) warrants, (4) CDs, commercial paper, fixed-time deposits, and bankers'
acceptances issued by foreign banks, (5) obligations of other corporations, and
(6) obligations of foreign governments, or their subdivisions, agencies, and
instrumentalities, international agencies, and supranational entities. Investing
in foreign currency denominated securities includes the special risks associated
with investing in non-U.S. issuers 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 may be subject to foreign
taxes, including taxes withheld from those payments, and there are generally
higher commission rates on foreign portfolio transactions. Fixed commissions on
foreign securities exchanges are generally higher than negotiated commissions on
U.S. exchanges, although the Series endeavors to achieve the most favorable net
results on portfolio transactions. There is generally less government
supervision and regulation of securities exchanges, brokers, dealers and listed
companies than in the United States. Mail service between the United States and
foreign countries may be slower or less reliable than within the United States,
thus increasing the risk of delayed settlements of portfolio transactions or
loss of certificates for portfolio securities. The Series may only invest in
securities of issuers in countries whose governments are considered stable by
N&B Management.
Foreign securities often trade with less frequency and in less volume than
domestic securities and may exhibit greater price volatility. Additional costs
associated with an investment in foreign securities may include higher custodian
fees than apply to domestic custodial arrangements, and transaction costs of
foreign currency conversions.
Foreign markets also have different clearance and settlement procedures,
and 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 Series is uninvested and no return
is earned thereon. The inability of the Series to make intended security
purchases due to settlement problems could cause the Series to miss attractive
investment opportunities. Inability to dispose of portfolio securities due to
settlement problems could result either in losses to the Series due to
subsequent declines in value of the portfolio securities, or, if the Series 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 on foreign currencies. The interest rates
in other countries are often affected by 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. Individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position.
Investment in foreign securities is limited in order to limit the risk
inherent in investing in foreign currency-denominated securities. AMT Socially
Responsive Investments may not purchase any such security if after such purchase
more than 10% of its total assets (taken at market value) would be invested in
such securities. Within such limitation, however, the Series is not restricted
in the amount it may invest in securities denominated in any one foreign
currency.
Covered Call Options and Put Options on Individual Securities. The Series
may write and purchase put and call options on securities. The purpose of
writing put and call options and purchasing put options is to hedge (i.e., to
reduce the effect of price fluctuations of securities held by the Series on the
Series' and the Portfolio's NAVs) or to earn premium income. Securities on which
call and put options may be written and purchased by the Series are purchased
solely on the basis of investment considerations consistent with the Series'
investment objective. The Series also may purchase a call option to protect
against an increase in the price of securities it intends to purchase.
The Series will receive a premium for writing a put option, which will
obligate the Series to acquire a security at a certain price at any time until a
certain date if the purchaser of the option decides to exercise the option. The
Series may be obligated to purchase the security at more than its current value.
When the Series 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 Series might 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 Series are purchased solely on the basis of investment considerations
consistent with the Portfolio's investment objective. When writing a put option,
the Series, 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 Series has written expires
unexercised, the Series will realize a gain in the amount of the premium.
When the Series 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 Series receives a premium for
writing the call option. The Series writes only "covered" call options on
securities it owns. So long as the obligation of the call option continues, the
writer may be assigned an exercise notice, requiring it to deliver the
underlying security against payment of the exercise price. The Series may be
obligated to deliver securities underlying a call option at less than the market
price.
The writing of covered call options is a conservative investment technique
believed to involve relatively little risk (in contrast to the writing of
"naked" or uncovered call options, which the Series will not do), but is capable
of enhancing the Series' total return. When writing a covered call option, the
Series, 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 or put option that the Series has written expires unexercised, the Series
will realize a gain in the amount of the premium; however, in the case of a call
option, that gain may be offset by a decline in the market value of the
underlying security during the option period. If the call or put option is
exercised, the Series will realize a gain or loss from the sale or purchase of
the underlying security.
When the Series 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.
A call option would be purchased by the Series to protect against an increase in
the price of the securities it intends to purchase or to offset a previously
written call option.
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 Series
terminates upon expiration of the option or, at an earlier time, when the Series
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 Series and is
never exercised or closed out, the Series 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
Series and its counter-party with no clearing organization guarantee. Thus, when
the Series 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
purchase transaction" with the dealer to whom (or from whom) the Series
originally sold or purchased the option. There can be no assurance that the
Series would be able to liquidate an OTC option at any time prior to expiration.
Unless the Series 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 different cover is
substituted. In the event of the counter-party's insolvency, the Series may be
unable to liquidate its options position and the associated cover. N&B
Management monitors the creditworthiness of dealers with which the Series may
engage in OTC options transactions.
The assets used as cover (or held in a segregated account) for OTC options
sold or written by the Series will be considered illiquid for purposes of the
non-fundamental policies and limitations of the Series unless the OTC options
are sold to qualified dealers who agree that the Series may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set forth in
the option agreement. The cover for an OTC call option written subject to this
procedure will be considered illiquid only to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.
The premium received (or paid) by the Series 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 general interest rate environment. The premium received by the Series
for writing an option is recorded as a liability on the Series' statement of
assets and liabilities. This liability is adjusted daily to the option's current
market value, which is the last reported sales price before the time the Series'
NAV is computed on the day the option is being valued or, in the absence of any
trades thereof on that day, the mean between the bid and asked prices as of that
time.
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 Series 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 Series will
be able to effect closing transactions at favorable prices. If the Series 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 Series pays the brokerage commissions or spreads in connection with
purchasing or writing options, including those used to close out existing
positions. These brokerage commissions normally are higher than those applicable
to purchases and sales of portfolio securities. From time to time, the Series
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 Series 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 Series; however, the Series could be in a less
advantageous position than had it not written the call option.
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.
Other Risks of Options Transactions. There is no assurance that a liquid
secondary market on a domestic or foreign options exchange will exist for any
particular exchange-traded option, or at any particular time, and for some
options no secondary market on an exchange or elsewhere may exist. If the Series
is unable to effect a closing purchase transaction with respect to covered
options it has written, it will not be able to sell the underlying securities or
dispose of assets held in a segregated account until the options expire or are
exercised. The Series may purchase and sell both options that are traded on U.S.
and foreign exchanges and certain options traded in the OTC market in
transactions with broker-dealers who make markets in such options.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient interest in trading certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
its clearing organization may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options) would
cease to exist, although outstanding options on that exchange that had been
issued by the clearing organization as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The writing of options on securities
involves a risk that a portfolio will be required to sell or purchase such
securities at a price less favorable than the current market price and will lose
the benefit of appreciation or depreciation in the market price of such
securities.
The Series would incur brokerage commissions or spreads in connection with
its options transactions as well as for purchases and sales of underlying
securities. Brokerage commissions from options transactions are generally higher
than for portfolio securities transactions. The writing of options could result
in a significant increase in the Series' turnover rate.
Futures Contracts and Options Thereon. The Series 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 future 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 permits the Series to enhance portfolio liquidity and maintain a
defensive position without having to sell portfolio securities. The Series does
not engage in transactions in futures or options thereon for speculation; it
views investment in (1) interest-rate and securities index futures and options
thereon as a maturity or duration management device and/or a device to reduce
risk and preserve total return in an adverse interest rate environment for
hedged securities and (2) 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 held or intended to be
acquired by the Series.
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 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 the
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, without the parties having to make or take delivery of the assets.
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.
"Margin" with respect to futures is the amount of assets that must be
deposited by the Series with, or for the benefit of, a futures commission
merchant in order to initiate and maintain the Series' futures positions. The
margin deposit made by the Series 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 Series will be required to make an additional margin deposit
("variation margin"). However, if favorable price changes in the futures
contract cause the margin on deposit to exceed the required margin, the excess
will be paid to the Series. In computing its daily NAV, the Series marks to
market the value of its open futures positions. Each Series 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 Series could
suffer a delay in recovering its funds and could ultimately suffer a loss.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in the contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option exercise period. The writer of the
option is required upon exercise to assume a short futures position (if the
option is a call) or a long futures position (if the option is a put). Upon
exercise of the option, the accumulated cash balance in the writer's futures
margin account is delivered to the holder of the option. That balance represents
the amount by which the market price of the futures contract at exercise
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option. Options on futures have characteristics and risks
similar to those of securities options, as described herein.
Although the Series believes that the use of futures contracts will benefit
it, if N&B Management's judgment about the general direction of the markets or
about interest rate on currency exchange rate trends is incorrect, the Series'
overall return would be lower than if it had not entered into any such
contracts. The prices of futures 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 and of the securities and currencies being hedged
can be only approximate due to differences between the futures and securities
markets or differences between the securities or currencies underlying the
Series' futures position and the securities held by or to be purchased for the
Series. 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 an 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
investors to substantial losses. If this were to happen with respect to a
position held by the Series, it could (depending on the size of the position)
have an adverse impact on the NAV of the Series.
Forward Foreign Currency Transactions. The Series 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 Series enters into forward contracts in an attempt to hedge against
changes in prevailing currency exchange rates. The Series 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 Series 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. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference (the spread)
between the price at which they are buying and selling various currencies.
At the consummation of a forward contract to sell currency, the Series may
either make delivery of the foreign currency or terminate its contractual
obligation to deliver by purchasing an offsetting contract. If the Series
chooses to make delivery of the foreign currency, it may be required to obtain
such currency through the sale of portfolio securities denominated in such
currency or through conversion of other assets of the Series into such currency.
If the Series 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.
The Series is not required to enter into such transactions and will not do
so unless deemed appropriate by N&B Management. Using forward contracts to
protect the value of the Series' portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which can be achieved
at some future point in time. The precise projection of short-term currency
market movements is not possible, and short-term hedging provides a means of
fixing the dollar value of only a portion of the Series' foreign assets.
N&B 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 N&B Management is incorrect in its judgment of future
exchange rate relationships, the Series could be in a less advantageous position
than if such a hedge had not been established. If the Series 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
Series' securities against a decline in the value of a currency does not
eliminate fluctuations in the prices of the underlying securities. Because
forward contracts are not traded on an exchange, the assets used to cover such
contracts may be illiquid. The Series may experience delays in the settlement of
its foreign currency transactions.
Options on Foreign Currencies. The Series may write and purchase covered
call and put options on foreign currencies. The Series would engage in such
transactions to protect against declines in the U.S. dollar value of portfolio
securities or increases in the U.S. dollar cost of securities to be acquired or
to protect the U.S. dollar equivalent of dividends, interest, or other payments
on those securities.
Currency options have characteristics and risks similar to those of
securities options, as discussed herein. Certain options on foreign currencies
are traded on the OTC market and involve liquidity and credit risks that may not
be present in the case of exchange-traded currency options.
Regulatory Limitations on Using Futures, Options on Futures and Options on
Foreign Currencies. To the extent the Series 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 Series' net assets.
Cover for Futures, Options on Futures, Options on Securities, Indices and
Foreign Currencies, and Forward Contracts ("Hedging Instruments"). The Series
will comply with SEC staff 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, fixed income, or equity securities.
Securities held in a segregated account cannot be sold while the futures,
options, or forward strategy covered by those securities is outstanding, unless
they are replaced with other suitable assets. As a result, segregation of a
large percentage of the Series' assets could impede portfolio management or the
Series' ability to meet current obligations. The Series may be unable promptly
to dispose of assets which cover or are segregated with respect to, an illiquid
futures, options, or forward position; this inability may result in a loss to
the Series.
General Risks of Hedging Instruments. The primary risks in using Hedging
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
Series and changes in the market value of Hedging Instruments; (2) possible lack
of a liquid secondary market for Hedging Instruments and the resulting inability
to close out Hedging Instruments when desired; (3) the fact that the skills
needed to use Hedging Instruments are different from those needed to select the
Series' securities; (4) the fact that, although use of Hedging Instruments for
hedging purposes can reduce the risk of loss, it 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 Series 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 Series 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 Hedging Instruments. N&B Management
intends to reduce the risk of imperfect correlation by investing only in Hedging
Instruments whose behavior is expected to resemble or offset that of the Series'
underlying securities or currency. N&B Management intends to reduce the risk
that the Series will be unable to close out Hedging Instruments by entering into
such transactions only if N&B Management believes there will be an active and
liquid secondary market. There can be no assurance that the Series' use of
Hedging Instruments will be successful. Hedging Instruments may not be available
with respect to some currencies, especially those of so-called "emerging market"
countries.
The Series' use of Hedging Instruments may be limited by certain provisions
of the Internal Revenue Code of 1986, as amended, with which it must comply if
the Portfolio is to qualify as a regulated investment company ("RIC"). See
"Additional Tax Information - Taxation of Each Portfolio."
Convertible Securities. The Series may invest in convertible securities. A
convertible security entitles the holder to receive interest paid or accrued on
debt or the dividend paid on preferred stock until the convertible security
matures or is redeemed, converted or exchanged. Before conversion, convertible
securities ordinarily provide a stream of income with generally higher yields
than those of 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 nonconvertible 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 with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege, and (2)
its worth, at market value, if converted into the underlying common stock.
Convertible debt securities are subject to the Series' investment policies and
limitations concerning fixed-income investments.
Convertible securities are typically issued by smaller capitalized
companies whose stock prices may be volatile. The price of a convertible
security often reflects such variations in the price of the underlying common
stock in a way that nonconvertible debt may not. A convertible security may be
subject to redemption at the option of the issuer at a price established in the
security's governing instrument. If a convertible security held by a Series is
called for redemption, the Series 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 Series'
and Portfolio's ability to achieve its investment objective.
Preferred Stock. The Series 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, although preferred
shareholders may have certain rights if dividends are not paid. Shareholders may
suffer a loss of value if dividends are not paid, and generally have no legal
recourse against the issuer. The market prices of preferred stocks are generally
more sensitive to changes in the issuer's creditworthiness than are the prices
of debt securities.
Zero Coupon Securities. The Series may invest in zero coupon securities,
which are debt obligations that do not entitle the holder to any periodic
payment of interest prior to maturity or specify a future date when the
securities begin paying current interest. Rather, they are issued and traded at
a significant discount from their face amount or par value, which discount
varies depending on prevailing interest rates, the time remaining until cash
payments begin, the liquidity of the security, and the perceived credit quality
of the issuer.
The discount on zero coupon securities ("original issue discount" or "OID")
must be taken into income ratably by the Series prior to the receipt of any
actual payments. Because the Portfolio must distribute to its shareholders
substantially all of its net income (including its share of the Series' accrued
OID) to its shareholders each year for income tax purposes, the Series may have
to dispose of portfolio securities under disadvantageous circumstances to
generate cash, or may be required to borrow, to satisfy the Portfolio's
distribution requirements.
The market prices of zero coupon securities generally are more volatile
than the prices of securities that pay interest periodically and are likely to
respond to changes in interest rates to a greater degree than do other types of
debt securities having similar maturities and credit quality.
Fixed Income Securities. While the emphasis of the Series' investment
program is on common stocks, the Series may also invest in money market
instruments, U.S. Government or Agency securities, and other fixed income
securities. The Series may invest in corporate bonds and debentures receiving
one of the four highest ratings from Standard & Poor's ("S&P"), Moody's
Investors Service, Inc. ("Moody's"), or any other nationally recognized
statistical rating organization ("NRSRO") or, if not rated by any NRSRO, deemed
of comparable quality by N&B Management ("Comparable Unrated Securities"). 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.
The Series relies on the credit evaluations performed by N&B Management and on
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 the obligations ("credit risk") and also
may be subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer, and
general market liquidity ("market risk"). 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.
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.
Subsequent to its purchase by a Series an issue of securities may cease to
be rated or its rating may be reduced, so that the securities would no longer be
eligible for purchase by the Series. In such a case, the Series will engage in
an orderly disposition of the downgraded securities.
AMT Socially Responsive Investments - Description of Social Policy
Background Information on Socially Responsive Investing
In an era when many people are concerned about the relationship between
business and society, socially responsive investing ("SRI") is a mechanism for
assuring that investors' social values are reflected in their investment
decisions. As such, SRI is a direct descendent of the successful effort begun in
the early 1970s to encourage companies to divest their South African operations
and subscribe to the Sullivan Principles. Today, a growing number of individuals
and institutions are applying similar strategies to a broad range of problems.
Although there are many strategies available to the socially responsive
investor, including proxy activism, below-market loans to community projects,
and venture capital, the SRI strategies used by the Series generally fall into
two categories:
Avoidance Investing. Most socially responsive investors seek to avoid
holding securities of companies whose products or policies are seen as being at
odds with the social good. The most common exclusions historically have involved
tobacco companies and weapons manufacturers.
Leadership Investing. A growing number of investors actively look for
companies with progressive programs that are exemplary or companies which make
it their business to try to solve some of the problems of today's society.
The marriage of social and financial objectives would not have surprised
Adam Smith, who was, first and foremost, a moral philosopher. The Wealth of
Nations is firmly rooted in the Enlightenment conviction that the purpose of
capital is the social good and the related belief that idle capital is both
wasteful and unethical. But, what very likely would have surprised Smith is the
sheer complexity of the social issues we face today and the diversity of our
attitudes toward the social good. War and peace, race and gender, the
distribution of wealth, and the conservation of natural resources -- the social
agenda is long and compelling. It is also something about which reasonable
people differ. What should society's priorities be? What can and should be done
about them? And what is the role of business in addressing them? Since
corporations are on the front lines of so many key issues in today's world, a
growing number of investors feel that a corporation's role cannot be ignored.
This is true of some of the most important issues of the day such as equal
opportunity and the environment.
The Socially Responsive Database
Neuberger&Berman, LLC ("Neuberger&Berman") the Series' sub-adviser,
maintains a database of information about the social impact of the companies it
follows. N&B Management uses the database to evaluate social issues after it
deems a stock acceptable from a financial standpoint for acquisition by the
Series. The aim of the database is to be as comprehensive as possible, given
that much of the information concerning corporate responsibility comes from
subjective sources. Information for the database is gathered by Neuberger&Berman
in many categories and then analyzed by N&B Management in the following six
categories of corporate responsibility:
Workplace Diversity and Employment. N&B Management looks for companies that
show leadership in areas such as employee training and promotion policies and
benefits, such as flextime, generous profit sharing, and parental leave. N&B
Management looks for active programs to promote women and minorities and takes
into account their representation among the officers of an issuer and members of
its board of directors. As a basis for exclusion, N&B Management looks for Equal
Employment Opportunity Act infractions and Occupational Safety and Health Act
violations; examines each case in terms of severity, frequency, and time elapsed
since the incident; and considers actions taken by the company since the
violation. N&B Management also monitors companies' progress and attitudes toward
these issues.
Environment. A company's impact on the environment depends largely on the
industry. Therefore, N&B Management examines a company's environmental record
vis-a-vis those of its peers in the industry. All companies operating in an
industry with inherently high environmental risks are likely to have had
problems in such areas as toxic chemical emissions, federal and state fines, and
Superfund sites. For these companies, N&B Management examines their problems in
terms of severity, frequency, and elapsed time. N&B Management then balances the
record against whatever leadership the company may have demonstrated in terms of
environmental policies, procedures, and practices. N&B Management defines an
environmental leadership company as one that puts into place strong affirmative
programs to minimize emissions, promote safety, reduce waste at the source,
insure energy conservation, protect natural resources, and incorporate recycling
into its processes and products. N&B Management looks for the commitment and
active involvement of senior management in all these areas. Several major
manufacturers which still produce substantial amounts of pollution are among the
leaders in developing outstanding waste source reduction and remediation
programs.
Product. N&B Management considers company announcements, press reports, and
public interest publications relating to the health, safety, quality, labeling,
advertising, and promotion of both consumer and industrial products. N&B
Management takes note of companies with a strong commitment to quality and with
marketing practices which are ethical and consumer-friendly. N&B Management pays
particular attention to companies whose products and services promote
progressive solutions to social problems.
Public Health. N&B Management measures the participation of companies in
such industries and markets as alcohol, tobacco, gambling and nuclear power. N&B
Management also considers the impact of products and marketing activities
related to those products on nutritional and other health concerns, both
domestically and in foreign markets.
Weapons. N&B Management keeps track of domestic military sales and,
whenever possible, foreign military sales and categorizes them as nuclear
weapons related, other weapons related, and non-weapon military supplies, such
as micro-chip manufacturers and companies that make uniforms for military
personnel.
Corporate Citizenship. N&B Management gathers information about a company's
participation in community affairs, its policies with respect to charitable
contributions, and its support of education and the arts. N&B Management looks
for companies with a focus, dealing with issues not just by making financial
contributions, but also by asking the questions: What can we do to help? What do
we have to offer? Volunteerism, high-school mentoring programs, scholarships and
grants, and in-kind donations to specific groups are just a few ways that
companies have responded to these questions.
Implementation of Social Policy
Companies deemed acceptable by N&B Management from a financial standpoint
are analyzed using Neuberger&Berman's database. The companies are then evaluated
by the portfolio manager to determine if the companies' policies, practices,
products, and services withstand scrutiny in the following major areas of
concern: the environment and workplace diversity and employment. Companies are
then further evaluated to determine their track record in issues and areas of
concern such as public health, weapons, product, and corporate citizenship.
The issues and areas of concern that are tracked lend themselves to
objective analysis in varying degrees. Few, however, can be resolved entirely on
the basis of scientifically demonstrable facts. Moreover, a substantial amount
of important information comes from sources that do not purport to be
disinterested. Thus, the quality and usefulness of the information in the
database depend on Neuberger&Berman's ability to tap a wide variety of sources
and on the experience and judgment of the people at N&B Management who interpret
the information.
In applying the information in the database to stock selection for the
Portfolio, N&B Management considers several factors. N&B Management examines the
severity and frequency of various infractions, as well as the time elapsed since
their occurrence. N&B Management also takes into account any remedial action
which has been taken by the company relating to these infractions. N&B
Management notes any quality innovations made by the company in its effort to
create positive change and looks at the company's overall approach to social
issues.
CERTAIN RISK CONSIDERATIONS
The Portfolio's investment in the Series may be affected by the actions of
other large investors in the Series, if any. For example, if a large investor in
the Series (other than the Portfolio) redeemed its interest in the Series, the
Series' remaining investors (including the Portfolio) might, as a result,
experience higher pro rata operating expenses, thereby producing lower returns.
Although the Series seeks to reduce risk by investing in a diversified
portfolio of securities, diversification does not eliminate all risk. There can,
of course, be no assurance that the Series will achieve its investment
objective.
PERFORMANCE INFORMATION
The Portfolio's performance may be quoted in advertising in terms of total
return if accompanied by performance of an insurance company's separate account.
The Portfolio's performance figures are based on historical earnings and are not
intended to indicate future performance. The share price yield and total return
of the Portfolio will vary, and an investment in the Portfolio, when redeemed,
may be worth more or less than the original purchase price.
Total Return Computations.
The Portfolio 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. Of
course, past performance cannot be a guarantee of future results. These
calculations assume that all dividends and distributions are reinvested.
N&B Management may waive a portion of its fee due from the Portfolio or
Series or reimburse the Portfolio or Series for a portion of its expenses, which
has the effect of increasing total return. Actual reimbursements and waivers are
described in the Prospectus and in "Investment Management and Administrative
Services" below.
Average annual total returns quoted for the Portfolio include the effect of
deducting the Portfolio's expenses, but may not include insurance-related
charges and other expenses attributable to any particular insurance product.
Because you can only purchase shares of the Portfolio through a variable annuity
or variable life insurance contract, you should carefully review the prospectus
of the insurance product you have chosen for information on relevant charges and
expenses. Excluding these charges from quotations of the Portfolio's performance
has the effect of increasing the performance quoted. You should bear in mind the
effect of these charges when comparing the Portfolio's performance to that of
other mutual funds.
Comparative Information
From time to time the Portfolio'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.
("Lipper"), C.D.A./Weisenberger, Morningstar, Inc. ("Morningstar"),
Micropal Incorporated, VARDS and quarterly mutual fund rankings by
Money, Fortune, Forbes, Business Week, Personal Investor, and U.S. News
& World Report magazines, The Wall Street Journal, New York Times,
Kiplinger's Personal Finance, and Barron's Newspaper, or
(2) recognized bond, stock and other indices, such as the
Shearson Lehman Bond Index, The Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index"), S&P Small Cap 600 ("S&P 600"), S&P Mid
Cap 400 ("S&P 400"), Russell 2000 Stock Index, Russell Mid Cap Growth
Index, Dow Jones Industrial Average ("DJIA"), Wilshire 1750, NASDAQ,
Montgomery Securities Growth Stock Index, Value Line Index, U.S.
Department of Labor Consumer Price Index ("Consumer Price Index"),
College Board Survey of Colleges Annual Increases of College costs,
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
includes stocks that range in market value from $27 million to $880
million, with an average of $302 million. The S&P 400 measures
mid-sized companies with an average market capitalization of $1.2
billion. The EAFE(R) Index is an unmanaged index of common stock prices
of more than 1,000 companies from Europe, Australia, and the Far East
translated into U.S. dollars. The Financial Times World XUS Index is an
index of 24 international markets, excluding the U.S. market. Each
assumes reinvestment of distributions and is calculated without regard
to tax consequences or the costs of investing. The Portfolio may invest
in different types of securities from those included in some of the
above indices.
The Portfolio's performance may also be compared to various socially
responsive indices. These include The Domini Social Index and the indices
developed by the quantitative department of Prudential Securities, such as that
department's Large and Mid-Cap portfolio indices for various breakdowns ("Sin"
Stock Free, Cigarette-Stock Free, S&P Composite, etc.).
Evaluations of the Portfolio's performance, its yield/total return and
comparisons may be used in advertisements and in information furnished to
present and prospective shareholders (collectively, "Advertisements"). The
Portfolio 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.
The Series may invest some of its assets in different types of securities
than those included in the index used as a comparison with the Series'
historical performance. The Series may also compare certain indices, which
represent different segments of the securities markets, for the purpose of
comparing the historical returns and volatility of those particular market
segments. Measures of volatility show the range of historical price
fluctuations. Standard deviation may be used as a measure of volatility. There
are other measures of volatility, which may yield different results.
Other Performance Information. From time to time, information about the
Series' portfolio allocation and holdings as of a particular date may be
included in Advertisements for the Portfolio. This information may include the
Series' portfolio diversification by asset type.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the trustees and
officers of the Trusts, including their addresses and principal business
experience during the past five years. Some persons named as trustees and
officers also serve in similar capacities for other funds and their
corresponding portfolios, advised by Neuberger&Berman and N&B Management.
<TABLE>
<CAPTION>
Positions Held with
Name, Address and Age (1) the Trusts Principal Occupation(s) (2)
- --------------------- ---------------------- -----------------------
<S> <C> <C>
Stanley Egener* Chairman of the Board, Principal of Neuberger&Berman; President and Director of N&B
Age: 64 Chief Executive Officer and Management; Chairman of the of each Trust Board, Chief
Trustee Executive Officer, and Trustee of eight other mutual funds for
which N&B Management acts as investment manager or
administrator.
Faith Colish Trustee of each Trust Attorney at law, Faith Colish, Professional
63 Wall Street Corporation.
24th Floor
New York, NY 10005
Age: 62
Walter G. Ehlers Trustee of each Trust Consultant; Director of The Turner
6806 Suffolk Place Corporation, A.B. Chance Company, and
Harvey Cedars, NJ 08008 Crescent Jewelry, Inc.
Age: 65
C. Anne Harvey Trustee of each Trust Director of American Association of Retired Persons ("AARP")
2555 Pennsylvania Avenue, N.W. Program Services and Administrator of AARP Foundation; The
Washington, DC 20037 National Rehabilitation Hospital's Board of Advisors;
Age: 60 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).
Leslie A. Jacobson Trustee of each Trust Counsel to Fried, Frank, Harris, Shriver & 24 Birdsall Farm
Age: 87 Drive Jacobson, attorneys at law; previously a Armonk, NY
10504 partner of that firm.
Robert M. Porter Trustee of each Trust Retired September, 1991; Formerly Director of
P.O. Box 33366 Customer Relations, Aetna Life & Casualty
Kerrville, TX 78029-3366 Company.
Age: 72
Ruth E. Salzmann Trustee of each Trust Retired; Director of John Deere Insurance
1556 Pine Street Group; Actuarial Consultant.
Stevens Point, WI 54481
Age: 79
Peter P. Trapp Trustee of each Trust Assistant Regional Manager for Atlanta Region, Ford Motor
Ford Motor Credit Company Credit Company since August, 1997; prior thereto, President,
1455 Lincoln Parkway Ford Life Insurance Company, April, 1995 until August, 1997;
Atlanta, GA 30346-2209 Consultant from December, 1994 until April, 1995; Vice
Age: 53 President, Sentry Insurance & Mutual Company, and President
and Chief Operating Officer, Sentry Investors Life Insurance
Company until November, 1994.
Lawrence Zicklin* President and Trustee of Principal of Neuberger&Berman; Director of N&B Management;
Age: 62 each Trust President and/or Trustee of five other mutual funds and
portfolios for which N&B Management acts as investment
manager or administrator.
Daniel J. Sullivan Vice President of each Trust Senior Vice President of N&B Management since 1992; Vice
Age: 58 President of eight other mutual funds for which N&B
Management acts as investment manager or administrator.
Michael J. Weiner Vice President and Senior Vice President of N&B Management since 1992;
Age: 51 Principal Financial Officer Treasurer of N&B Management from 1992 each Trust to 1996;
of each Trust Vice President and Principal Financial Officer of eight
other mutual funds for which N&B Management acts as
investment manager or administrator.
Claudia A. Brandon Secretary of each Trust Vice President of N&B Management; Secretary of eight other
Age: 41 mutual funds for which N&B Management acts as investment
manager or administrator.
Richard Russell Treasurer and Principal Vice President of N&B Management since 1993; prior thereto,
Age: 51 Accounting Officer of each Assistant Vice President of N&B Management; Treasurer and
Trust Principal Accounting Officer of eight other mutual funds for
which N&B Management acts as investment manager or
administrator.
Stacy Cooper-Shugrue Assistant Secretary of each Assistant Vice President of N&B Management since 1993; prior
Age: 35 Trust thereto, an employee of N&B Management; Assistant Secretary
of eight other mutual funds for which N&B Management acts as
investment manager or administrator.
C. Carl Randolph Assistant Secretary Principal of Neuberger&Berman since 1992; Assistant
Age: 60 of each Trust Secretary of eight other mutual funds for which N&B
Management acts as investment manager or administrator.
Barbara DiGiorgio Assistant Treasurer of each Assistant Vice President of N&B Management since 1993; prior
Age: 39 Trust thereto, employee of N&B Management; Assistant Treasurer of
eight other mutual funds for which N&B Management acts as
investment manager or administrator since 1996.
Celeste Wischerth Assistant Treasurer of each Assistant Vice President of N&B Management since 1994;
Age: 37 Trust Assistant Treasurer of eight other mutual funds for which
N&B 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 position shown
for at least the last five years.
* Indicates an "interested person" of each Trust within the meaning of
the 1940 Act. Messrs. Egener and Zicklin are interested persons by virtue of
the fact that they are officers and directors of N&B Management and principals
of Neuberger&Berman.
The Trust's Trust Instrument and Managers Trust's Declaration of Trust
provide that each Trust will indemnify the Trustees and their officers against
liabilities and expenses reasonably incurred in connection with litigation in
which they may be involved because of their offices with the Trust or Advisers
Trust, respectively, unless it is adjudicated that they engaged in bad faith,
willful misfeasance, gross negligence, or reckless disregard of the duties
involved in their offices. 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, or 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.
Trustees who are not officers or employees of N&B Management,
Neuberger&Berman and/or the Life Companies or any of their affiliates are paid
trustees' fees. For the year ended December 31, 1997, a total of $90,750 in fees
was paid to the Trustees as a group by the Trust and a total of $92,750 in fees
was paid to the Trustees as a group by Managers Trust. The following table shows
1997 compensation by Trustee.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Pension or Total Compensation
Retirement Benefits Estimated From Trust and Fund
Aggregate Accrued As Part of Annual Benefits Complex Paid to
Name of Person, Compensation From Trust's Expenses Upon Retirement Trustees(1)
Position Trust(1)
<S> <C> <C> <C> <C>
Stanley Egener, None None None None(2)
Chairman and Trustee
Faith Colish, $15,250 None None $61,500 (3)
Trustee
Walter G. Ehlers, $15,000 None None $31,000 (4)
Trustee
C. Anne Harvey, None None None None (4)(5)
Trustee
Leslie A. Jacobson, $15,000 None None $30,000 (4)
Trustee
Robert M. Porter, $15,250 None None $31,000 (4)
Trustee
Ruth E. Salzmann, $15,250 None None $30,500 (4)
Trustee
Peter P. Trapp, $15,000 None None $30,000 (4)
Trustee
Lawrence Zicklin, None None None None(3)
President and Trustee
</TABLE>
(1) "Aggregate Compensation From Trust" and "Total Compensation From Trust
and Fund Complex Paid to Trustees" is for the period from January 1
through December 31, 1997.
(2) Nine other investment companies.
(3) Five other investment companies.
(4) One other investment company.
(5) Commenced service as a Trustee in February, 1998.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Shares of the Portfolios are issued and redeemed in connection with
investments in and payments under certain variable annuity contracts and
variable life insurance policies (collectively, "Variable Contracts") issued
through separate accounts of life insurance companies (the "Life Companies").
There were no shareholders of the Socially Responsive Portfolio as of ______,
1998. The Trustee of the Trust own in the aggregate less than 1% of the total
Trust shares issued and outstanding.
As of _______, 1998, separate accounts of the following Life Companies
owned of record or beneficially 5% or more of the Shares of the following
Portfolios:
Percentage of
Shares Outstanding
Owned Shares Owned
Liquid Asset Portfolio
Hartford Life Insurance Company*
200 Hopmeadow
Simsbury, CT 06070
Sentry Life Insurance Company
1800 North Point Drive
Stevens Point, WI 54481
Partners Portfolio
Skandia Insurance Company*
P.O. Box 883
Shelton, CT 06484
Nationwide Life Insurance*
P.O. Box 182029
Columbus, OH 43218-2029
Growth Portfolio
Nationwide Life Insurance*
P.O. Box 182029
Columbus, OH 43218-2029
Sentry Life Insurance Company
1800 North Point Drive
Stevens Point, WI 54481
Limited Maturity Bond Portfolio
Nationwide Life Insurance*
P.O. Box 182029
Columbus, OH 43218-2029
Penn Mutual Life Insurance
Company
600 Dresher Road
Horsham, PA 19044
Balanced Portfolio
Hartford Life Insurance Company
200 Hopmeadow
Simsbury, CT 06070
Nationwide Life Insurance*
P.O. Box 182029
Columbus, OH 43218-2029
Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, PA 19044
Sentry Life Insurance
1800 North Point Drive
Stevens Point, WI 54481
Guardian Portfolio
Nationwide Life Insurance*
P.O. Box 182029
Columbus, OH 43218-2029
Mid-Cap Growth Portfolio
Nationwide Life Insurance*
P.O. Box 182029
Columbus, OH 43218-2029
*Separate accounts of the Life Company owned 25% or more of the
outstanding shares of beneficial interest of the Portfolio, and
therefore may be presumed to "control" the Portfolio, as that term is
defined in the 1940 Act.
These Life Companies are required to vote Portfolio shares in accordance
with instructions received from owners of Variable Contracts funded by separate
accounts with respect to separate accounts of these Life Companies that are
registered with the Securities and Exchange Commission as unit investment
trusts.
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES
All Portfolios and their corresponding Series
Neuberger&Berman is an investment management firm with headquarters in New
York. The firm's focus is on U.S. fixed income, equity and balanced fund
management. Total assets under management by Neuberger&Berman and its affiliates
were approximately $52.9 billion as of December 31, 1997. Founded in 1939 to
manage portfolios for high net worth individuals, the firm entered the mutual
fund management business in 1950, and began offering active management for
pension funds and institutions in the mid-1970s. Most money managers that come
to the Neuberger&Berman organization have at least fifteen years of experience.
Neuberger&Berman and N&B Management employ experienced professionals that work
in a competitive environment.
Because all of the Portfolios' net investable assets are invested in their
corresponding Series, the Portfolios do not need an investment manager. N&B
Management serves as each Series' investment manager pursuant to a Management
Agreement dated as of May 1, 1995 that was approved by the Trustees of Managers
Trust with respect to AMT Socially Responsive Investments on May 27, 1998, and
by the holders of the interests in that Series on ___________, 1998.
The Management Agreement provides in substance that N&B Management will
make and implement investment decisions for the Series in its discretion and
will continuously develop an investment program for each Series' assets. The
Management Agreement permits N&B Management to effect securities transactions on
behalf of each Series through associated persons of N&B Management. The
Management Agreement also specifically permits N&B Management to compensate,
through higher commissions, brokers and dealers who provide investment research
and analysis to the Series, but N&B Management has no current plans to pay a
material amount of such compensation.
N&B Management provides to the Series, without cost, office space,
equipment, and facilities and personnel necessary to perform executive,
administrative, and clerical functions and pays all salaries, expenses, and fees
of the officers, trustees, and employees of Managers Trust who are officers,
directors, or employees of N&B Management. Two officers of N&B Management (who
also are principals of Neuberger&Berman and directors of N&B Management) serve
as trustees and officers of the Trusts. See "Trustees and Officers." N&B
Management provides similar facilities and services to the Portfolio pursuant to
an administration agreement dated May 1, 1995 ("Administration Agreement"). The
Portfolio was authorized to become subject to the Administration Agreement by
vote of the Trustees on May 27, 1998. For a description of the Management and
Administration fees currently in effect, see "Management and Administration" in
the Prospectus.
The Management and Administration Agreements each continue for two years
after the date the Series and Portfolio, respectively, became subject to it. The
Management Agreement is renewable from year to year with respect to the Series,
so long as its continuance is approved at least annually (1) by the vote of a
majority of Managers Trust's Trustees who are not "interested persons" of N&B
Management or Managers Trust ("Independent Series 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 Managers Trust's Trustees or by a 1940 Act majority vote of the
outstanding shares in that Series. The Administration Agreement is renewable
from year to year with respect to the Portfolio, so long as its continuance is
approved at least annually (1) by the vote of a majority of the trustees of the
Trust (the "Portfolio Trustees") who are not "interested persons" of N&B
Management or the Trust ("Independent Portfolio Trustees"), cast in person at a
meeting called for the purpose of voting on such approval, and (2) by the vote
of a majority of the Portfolio Trustees or by a 1940 Act majority vote of the
outstanding shares in the Portfolio. The Management Agreement is terminable with
respect to the Series without penalty on 60 days' prior written notice either by
Managers Trust or by N&B Management. The Administration Agreement is terminable
with respect to the Portfolio without penalty by N&B Management upon at least
120 days' prior written notice to the Portfolio, and by the Portfolio if
authorized by the Portfolio Trustees, including a majority of the Independent
Portfolio Trustees, on at least 30 days' prior written notice to N&B Management.
Each Agreement terminates automatically if it is assigned.
Expense Limitation
As noted in the Prospectus under "Management and Administration -
Expenses," N&B Management has voluntarily undertaken to limit the Portfolio's
expenses by reimbursing the Portfolio for certain operating expenses and its pro
rata share of the Series' operating expenses.
Management and Control of N&B Management
The directors and officers of N&B Management, all of whom have offices at
the same address as N&B Management, are Richard A. Cantor, Chairman of the Board
and director; Stanley Egener, President and director; Theodore P. Giuliano, Vice
President and director; Michael M. Kassen, Vice President and director; Irwin
Lainoff, director; Lawrence Zicklin, director; Daniel J. Sullivan, Senior Vice
President; Peter E. Sundman, Senior Vice President; Michael J. Weiner, Senior
Vice President; Claudia A. Brandon, Vice President; Patrick T. Byrne, Vice
President; Brooke A. Cobb, Vice President; Robert W. D'Alelio, Vice President;
Roberta D'Orio, Vice President; Clara Del Villar, Vice President; Brian J.
Gaffney, Vice President; Joseph Galli, Vice President; Robert I. Gendelman, Vice
President; Josephine P. Mahaney, Vice President; Ellen Metzger, Vice President
and Secretary; Paul Metzger, Vice President; Janet W. Prindle, Vice President;
Kevin L. Risen, Vice President; Richard Russell, Vice President; Jennifer K.
Silver, Vice President; Kent C. Simons, Vice President; Frederic B. Soule, Vice
President; Judith M. Vale, Vice President; Susan Walsh, Vice President; Thomas
Wolfe, Vice President; Andrea Trachtenberg, Vice President of Marketing; Robert
Conti, Treasurer; Ramesh Babu, Assistant Vice President; Valerie Chang,
Assistant Vice President; Stacy Cooper-Shugrue, Assistant Vice President;
Barbara DiGiorgio, Assistant Vice President; Michael J. Hanratty, Assistant Vice
President; Leslie Holliday-Soto, Assistant Vice President; Carmen G. Martinez,
Assistant Vice President; Joseph S. Quirk, Assistant Vice President; Ingrid
Saukaitis, Assistant Vice President; Josephine Velez, Assistant Vice President;
Celeste Wischerth, Assistant Vice President; and Loraine Olavarria, Assistant
Secretary. Messrs. Cantor, Egener, Gendelman, Giuliano, Kassen, Lainoff,
Zicklin, Risen, Simons, and Sundman and Mmes. Prindle, Silver and Vale are
principals of Neuberger&Berman.
Messrs. Egener and Zicklin are trustees and officers, and Messrs. Sullivan,
Weiner, and Russell and Mmes. Brandon, Cooper-Shugrue, DiGiorgio and Wischerth
are officers of each Trust. C. Carl Randolph, a principal of Neuberger&Berman,
also is an officer of each Trust.
All of the outstanding voting stock in N&B Management is owned by persons
who are also principals of Neuberger&Berman.
Sub-Adviser
N&B Management retains Neuberger&Berman, 605 Third Avenue, New York, NY
10158, as a sub-adviser with respect to the Series pursuant to a Sub-Advisory
Agreement dated May 1, 1995. The Sub-Advisory Agreement was approved by the
Trustees of Managers Trust with respect to AMT Socially Responsive Investments
on May 27, 1998, and by the holder of interests in that Series on _________,
1998.
The Sub-Advisory Agreement provides in substance that Neuberger&Berman will
furnish to N&B Management, upon reasonable request, investment recommendations
and research information of the same type that Neuberger&Berman from time to
time provides to its principals and employees for use in managing client
accounts, as N&B Management reasonably requests. In this manner, N&B 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 research
staff consists of numerous investment analysts, each of whom specializes in
studying one or more industries, under the supervision of research partners who
are also available for consultation with N&B Management. The Sub-Advisory
Agreement provides that the services rendered by Neuberger&Berman will be paid
for by N&B Management on the basis of the direct and indirect costs to
Neuberger&Berman in connection with those services. Neuberger&Berman also serves
as a sub-adviser for all of the other mutual funds advised by N&B Management.
The Sub-Advisory Agreement continues for a period of two years after the
date the Series became subject to it, and is renewable from year to year
thereafter, 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 Series by the Series' Trustees, or by a
1940 Act majority vote of the outstanding shares of that Series, by N&B
Management, or by Neuberger&Berman on not less than 30 nor more than 60 days'
prior written notice to the Series. The Sub-Advisory Agreement also terminates
automatically with respect to the Series if it is assigned or if the Management
Agreement terminates with respect to the Series.
Most money managers that come to the Neuberger&Berman organization have at
least fifteen years experience. Neuberger&Berman and N&B Management employ
experienced professionals that work in a competitive environment.
The Series is subject to certain limitations imposed on all advisory
clients of Neuberger&Berman (including the Series, Other N&B Funds, and other
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 outstanding shares of public companies.
Investment Companies Advised
N&B Management currently serves as investment adviser or manager of the
following investment companies, which had aggregate net assets of approximately
$20.7 billion, as of December 31, 1997. Neuberger&Berman acts as sub-adviser to
these investment companies.
Approximate Net
Assets at
Name December 31, 1997
Neuberger&Berman Cash Reserves . . . . . . . $662,861,352
Portfolio (investment portfolio for
Neuberger&Berman Cash Reserves)
Neuberger&Berman Government Money . . . . $297,594,922
Portfolio (investment portfolio for
Neuberger&Berman Government Money
Fund)
Neuberger&Berman Limited Maturity Bond . . $294,956,156
Portfolio (investment portfolio for
Neuberger&Berman Limited Maturity
Bond Fund and Neuberger&Berman
Limited Maturity Bond Trust)
Neuberger&Berman Municipal Money . . . . . . $166,832,901
Portfolio (investment portfolio for
Neuberger&Berman Municipal Money Fund)
Neuberger&Berman Municipal Securities . . . . $32,970,458
Portfolio (investment portfolio for
Neuberger&Berman Municipal Securities
Trust)
Neuberger&Berman Genesis Portfolio . . . . . . $1,841,928,659
(investment portfolio for Neuberger&Berman
Genesis Fund, Neuberger&Berman
Genesis Trust and Neuberger&Berman Genesis Assets)
Neuberger&Berman Guardian Portfolio . . . . . $8,328,032,611
(investment portfolio for Neuberger&Berman
Guardian Fund, Neuberger&Berman
Guardian Trust and Neuberger&Berman
Guardian Assets)
Neuberger&Berman Manhattan Portfolio . . . . $626,632,234
(investment portfolio for Neuberger&Berman
Manhattan Fund, Neuberger&Berman
Manhattan Trust and Neuberger&Berman
Manhattan Assets)
Neuberger&Berman International Portfolio $111,718,206
(investment portfolio for Neuberger&Berman
International Fund and Neuberger&Berman International Trust)
Neuberger&Berman Partners Portfolio . . . . . . $3,830,066,838
(investment portfolio for Neuberger&Berman
Partners Fund, Neuberger&Berman
Partners Trust and Neuberger&Berman
Partners Assets)
Neuberger&Berman Focus Portfolio . . . . . . . $1,530,971,078
(investment portfolio for Neuberger&Berman
Focus Fund, Neuberger&Berman Focus
Trust and Neuberger&Berman Focus Assets)
Neuberger&Berman Socially Responsive . . . $287,169,564
Portfolio (investment portfolio for
Neuberger&Berman Socially Responsive Fund,
Neuberger&Berman Socially Responsive Trust,
Neuberger&Berman NYCDC Socially Responsive Trust
Neuberger&Berman Advisers Managers. . . . . . $2,644,430,313
Trust (eight series)
In addition, Neuberger&Berman serves as investment adviser to one
investment company, Plan Investment Fund, Inc., with assets of $46,655,752 at
December 31, 1997.
The investment decisions concerning each Series and the other mutual funds
referred to above (collectively, "Other N&B Funds") have been and will continue
to be made independently of one another. In terms of their investment
objectives, most of the Other N&B Funds differ from the Series. Even where the
investment objectives are similar, however, the methods used by the Other N&B
Funds and the Series to achieve their objectives may differ. The investment
results achieved by all of the funds managed by N&B Management have varied from
one another in the past and are likely to vary in the future.
There may be occasions when a Series and one or more of the Other N&B Funds
will be contemporaneously engaged in purchasing or selling the same securities
from or to third parties. When this occurs, the transactions will be 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 could have a detrimental effect on the price or volume of the
securities as to a Series, in other cases it is believed that a Series' ability
to participate in volume transactions may produce better executions for it. In
any case, it is the judgment of the Series' Trustees that the desirability of
each Series having its advisory arrangements with N&B Management outweighs any
disadvantages that may result from contemporaneous transactions.
DISTRIBUTION ARRANGEMENTS
N&B Management serves as the distributor ("Distributor") in connection with
the offering of the Portfolio's shares. In connection with the sale of its
shares, the Portfolio has authorized the Distributor to give only the
information, and to make only the statements and representations, contained in
the Prospectus and this SAI or that properly may be included in sales literature
and advertisements in accordance with the 1933 Act, the 1940 Act, and applicable
rules of self-regulatory organizations. Sales may be made only by the
Prospectus, which may be delivered either personally or through the mails. The
Distributor is the Portfolio's "principal underwriter" within the meaning of the
1940 Act and, as such, acts as agent in arranging for the sale of the
Portfolio's shares without sales commission or other compensation and bears all
advertising and promotion expenses incurred in the sale of the Portfolios'
shares. The Board of Trustees of the Trust has adopted a non-fee Distribution
Plan for the Portfolios of the Trust, which is described in the Prospectus.
The Trust, on behalf of the Socially Responsible Portfolio, and the
Distributor are parties to a Distribution Agreement dated May 1, 1995, that
continues until May 1, 1999. The Distribution Agreement may be renewed annually
thereafter if specifically approved by (1) the vote of a majority of the
Portfolio Trustees or a 1940 Act majority vote of the Portfolio's outstanding
shares and (2) the vote of a majority of the Independent Portfolio 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
automatically terminate on its assignment, in the same manner as the Management
Agreement and the Investment Advisory Agreement.
ADDITIONAL REDEMPTION INFORMATION
Suspension of Redemptions
The Portfolio is normally open for business each day the NYSE is open
("Business Day"). The right to redeem the Portfolio'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 disposal by the Series of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Series 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 Portfolio's shareholders; provided
that applicable SEC rules and regulations shall govern as to 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 Business Day after termination of the suspension.
Redemptions in Kind
The Portfolio reserves the right, under certain conditions, to honor any
request for redemption (or a combination of requests from the same shareholder
in any 90-day period) exceeding $250,000 or 1% of the net assets of the
Portfolio, whichever is less, by making payment in whole or in part in
securities valued as described under "Share Prices and Net Asset Value" in the
Prospectus. 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 Portfolio does not redeem in kind under
normal circumstances, but would do so when the Trust's Trustees determined that
it was in the best interests of the Portfolio's shareholders as a whole.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Portfolio distributes to its shareholders (primarily insurance company
separate accounts and Qualified Plans) substantially all of its share of the
Series' net investment income (after deducting expenses incurred directly by the
Portfolio), any net realized capital gains and, any net realized gains from
foreign currency transactions, if any. The Portfolio calculates its net
investment income and NAV as of the close of regular trading on the NYSE
(usually 4:00 p.m. Eastern time) on each day the NYSE is open. The Series' net
investment income consists of all income accrued on portfolio assets less
accrued expenses, but does not include net realized or unrealized capital and
foreign currency gains or losses. Net investment income and net gains and losses
are reflected in the Series' NAV (and, hence, the Portfolio's NAV) until they
are distributed. Dividends from net investment income and distributions of net
realized capital gains and net realized gains from foreign currency
transactions, if any, normally are paid once annually, in February.
ADDITIONAL TAX INFORMATION
Taxation of the Portfolio
In order to continue to qualify for treatment as a RIC under the Internal
Revenue Code of 1986, as amended ("Code"), the Portfolio must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income, net short-term
capital gain, and, net gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional requirements. With
respect to the Portfolio, these requirements include the following: (1) the
Portfolio 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 stock, securities or foreign currencies, or
other income (including gains from options, futures, and forward contracts
(collectively, "Hedging Instruments")) derived with respect to its business of
investing in such stock, securities or currencies ("Income Requirement"); and
(2) at the close of each quarter of the Portfolio'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 Portfolio'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.
The Trust and Managers Trust have received a ruling from the Internal
Revenue Service ("Service"), for certain other portfolios that each such
Portfolio, as an investor in a corresponding Series of Managers Trust, will be
deemed to own a proportionate share of the Series' assets and income for
purposes of determining whether the Portfolio satisfies the requirements
described above to qualify as a RIC. A similar ruling has been applied for with
respect to the Socially Responsive Portfolio but has not yet been issued by the
Service.
The Portfolio will be subject to a nondeductible 4% 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 ending on October 31 of that year, plus certain other amounts.
See the next section for a discussion of the tax consequences to the
Portfolio of distributions to it from the Series, investments by the Series in
certain securities, and hedging transactions engaged in by the Series.
Taxation of the Series
Managers Trust has received a ruling from the Service for certain Series,
to the effect that, among other things, each such Series will be treated as a
separate partnership for federal income tax purposes and will not be a "publicly
traded partnership." A similar rulings has been applied for with respect to AMT
Socially Responsive Investments but has not yet been issued by the Service. As a
result, such other Series are not subject to federal income tax; instead, each
investor in a Series, such as a Portfolio, is required to take into account in
determining its federal income tax liability its share of the Series' income,
gains, losses, deductions, and credits, without regard to whether it has
received any cash distributions from the Series. A Series also will not be
subject to Delaware or New York income or franchise tax.
Because, as noted above, the other Portfolios are deemed to own a
proportionate share of their corresponding Series' assets and income for
purposes of determining whether such Portfolios satisfy the requirements to
qualify as a RIC, the Series intends to conduct its operations so that the
Socially Responsive Portfolio will be able to satisfy all those requirements.
Distributions to the Portfolio from the Series (whether pursuant to a
partial or complete withdrawal or otherwise) will not result in the Portfolio's
recognition of any gain or loss for federal income tax purposes, except that (1)
gain will be recognized to the extent any cash that is distributed exceeds the
Portfolio's basis for its interest in the Series before the distribution, (2)
income or gain will be recognized if the distribution is in liquidation of the
Portfolio's entire interest in the Series and includes a disproportionate share
of any unrealized receivables held by the Series, (3) loss will be recognized if
a liquidation distribution consists solely of cash and/or unrealized receivables
and (4) gain (and, in certain situations, loss) may be recognized on an in-kind
distribution by the Portfolios. The Portfolio's basis for its interest in the
Series generally will equal the amount of cash and the basis of any property the
Portfolio invests in the Series, increased by the Portfolio's share of the
Series' net income and capital gains and decreased by (a) the amount of cash and
the basis of any property the Series distributes to the Portfolio and (b) the
Portfolio's share of the Series' losses.
Dividends, interest, and in some cases, capital gains received by the
Series may be subject to income, withholding, or other taxes imposed by foreign
countries and U.S. possessions that would reduce the yield and/or total return
on its securities. Tax conventions between certain countries and the United
States may reduce or eliminate these foreign taxes, however.
AMT Socially Responsive Investments may invest in the stock of "passive
foreign investment companies" ("PFICs"). A PFIC is a foreign corporation other
than a "controlled foreign corporation" (i.e., a foreign corporation in which,
on any day during its taxable year, more than 50% of the total voting power of
all voting stock therein or the total value of all stock therein is owned,
directly, indirectly, or constructively, by "U.S. shareholders," defined as U.S.
persons that individually own, directly, indirectly, or constructively, at least
10% of that voting power) that 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 Series holds stock of a PFIC, the Portfolio (indirectly
through its interest in the Series) will be subject to federal income tax on a
portion of any "excess distribution" received on the stock as well as gain on
disposition of the stock (collectively, "PFIC income"), plus interest thereon,
even if the Portfolio distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the Portfolio's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders.
If the Series invests in a PFIC and elects to treat the PFIC as a qualified
electing fund ("QEF"), then in lieu of the Portfolio incurring the foregoing tax
and interest obligation, the Portfolio would be required to include in income
each year its pro rata share of the Series' pro rata share of the QEF's annual
ordinary earnings and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) -- which most likely would have to be
distributed by the Portfolio to satisfy the Distribution Requirement -- even if
those earnings and gain were not received by the Series from the QEF. In most
instances it will be very difficult, if not impossible, to make this election
because of certain requirements thereof.
Effective for taxable years beginning after 1997, a holder of stock in a
PFIC generally may elect to include in ordinary income each taxable year the
excess, if any, of the fair market value of the stock over its adjusted basis as
of the end of that year. Pursuant to the election, a deduction (as an ordinary,
not capital, loss) also would be allowed for the excess, if any, of the holder's
adjusted basis in PFIC stock over the fair market value thereof as of the
taxable year-end, but only to the extent of any net mark-to-market gains with
respect to that stock included in income for prior taxable years. The adjusted
basis in each PFIC's stock subject to the election would be adjusted to reflect
the amounts of income included and deductions taken thereunder. Any gain on the
sale of PFIC stock subject to a mark-to-market election would be treated as
ordinary income. The use by the Series of hedging strategies, such as writing
(selling) and purchasing futures contracts and options 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 they
realize in connection therewith. For the Series, gains from the actual
disposition and mark to market of foreign currencies (except certain gains that
may be excluded by future regulations), and gains from Hedging Instruments
derived by the Series with respect to its business of investing in securities or
foreign currencies, will qualify as permissible income for the Portfolio under
the Income Requirement
Exchange-traded futures contracts, listed options thereon and certain
forward foreign currency contracts constitute "Section 1256 Contracts." Section
1256 Contracts are required to be "marked-to-market" (that is, treated as having
been sold at market value) for federal income tax purposes at the end of the
Series' taxable year, 60% 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,
and the remainder is treated as short-term capital gain or loss; however, in
certain cases where the futures contract relates to a foreign currency and
certain forward foreign currency contracts, the gain or loss may be ordinary
rather than capital.
Socially Responsive Investments may acquire zero coupon or other securities
issued with OID. As the holder of those securities, the Series (and, through it,
the Portfolio) must take into income the OID that accrues on the securities
during the taxable year, even if no corresponding payment on the securities is
received during the year. Because the Portfolio annually must distribute
substantially all of its income (including its share of the Series' accrued OID)
to satisfy the Distribution Requirement, it may be required in a particular year
to distribute as a dividend an amount that is greater than its share of the
total amount of cash the Series actually receives. Those distributions will be
made from the Portfolio's (or its share of the Series') cash assets or, if
necessary, from the proceeds of the Series' sales of portfolio securities. These
actions are likely to reduce the Series' and Portfolio's assets and may thereby
increase its expense ratio and decrease its rate of return. The Series may
realize capital gains or losses from those sales, which would increase or
decrease the Series' investment company taxable income and/or net capital gain.
PORTFOLIO TRANSACTIONS
Neuberger&Berman acts as the Series' principal broker to the extent a
broker is used in the purchase and sale of portfolio securities (other than
certain securities traded on the OTC market) and in connection with the writing
of covered call options on their securities, and for those services would
receive brokerage commissions. Transactions in portfolio securities for which
Neuberger&Berman serves as broker will be effected in accordance with Rule 17e-1
under the 1940 Act.
To the extent a broker is not used, purchases and sales of portfolio
securities generally are transacted with the issuers, underwriters, or dealers
serving as primary market-makers acting as principals for the securities on a
net basis. The Series typically do not pay brokerage commissions for such
purchases and sales. Instead, the price paid for newly issued securities usually
includes a concession or discount paid by the issuer to the underwriter, and
transactions placed through dealers serving as market-makers reflect a spread
between the bid and the asked prices from which the dealer derives a profit.
In purchasing and selling portfolio securities other than as described
above (for example, in the secondary market), the Series' policy is to seek best
execution at the most favorable prices through responsible broker-dealers and,
in the case of agency transactions, at competitive commission rates. In
selecting broker-dealers to execute transactions, N&B Management considers such
factors as the price of the security, the rate of commission, the size and
difficulty of the order, the reliability, integrity, financial condition, and
general execution and operational capabilities of competing broker-dealers, and
may consider the brokerage and research services they provide to the Series or
N&B Management. Some of these research services may be of value to N&B
Management in advising its various clients (including the Series) although not
all of these services are necessarily used by N&B Management in managing the
Series. Under certain conditions, the Series may pay higher brokerage
commissions in return for brokerage and research services, although no Series
has a current arrangement to do so. In any case, the Series may effect principal
transactions with a dealer who furnishes research services, may designate any
dealer to receive selling concessions, discounts, or other allowances, or may
otherwise deal with any dealer in connection with the acquisition of securities
in underwritings.
Portfolio securities may be loaned from time to time by Socially Responsive
Investments to Neuberger&Berman in accordance with the terms and conditions of
an order issued by the Securities and Exchange Commission, excepting such
transactions from certain provisions of the 1940 Act which would otherwise
prohibit such transactions, subject to certain conditions. In accordance with
the order, securities loans made by the Series to Neuberger&Berman are fully
secured by cash collateral. The portion of the income on cash collateral which
may be shared with Neuberger&Berman is to be determined with reference to the
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 Series in order to relend them to others,
Neuberger&Berman may be required to pay over to that Series, on a quarterly
basis, certain of the earnings that Neuberger&Berman otherwise has derived from
the relending of the borrowed securities. When Neuberger&Berman desires to
borrow a security that the Series has indicated a willingness to lend,
Neuberger&Berman must borrow such security from the Series rather than from the
unaffiliated lender, unless the unaffiliated lender is willing to lend such
security on more favorable terms (as specified in the order) than that Series.
If, in any month, the Series' expenses exceed its income in any securities loan
transaction with Neuberger&Berman, Neuberger&Berman must reimburse the Series
for such loss.
The Series may also lend securities to unaffiliated entities, including,
banks, brokerage firms, and other institutional investors judged creditworthy by
N&B 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 Series. The Series 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 Series an amount equivalent to any dividends
or interest paid on such securities. These loans are subject to termination at
the option of the Series or the borrower. The Series 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 Series 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.
A committee of Independent Series Trustees from time to time reviews, among
other things, information relating to securities loans by the Series.
In effecting securities transactions, the Series 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 Series plans to
continue to use Neuberger&Berman as its broker where, in the judgment of N&B
Management, that firm is able to obtain a price and execution at least as
favorable as other qualified brokers. To the Series' knowledge, however, no
affiliate of any Series receives give-ups or reciprocal business in connection
with their securities transactions.
The use of Neuberger&Berman as a broker for the Series is subject to the
requirements of Section 11(a) of the Securities Exchange Act of 1934 ("Section
11(a)"). Section 11(a) prohibits members of national securities exchanges from
retaining compensation for executing exchange transactions for accounts that
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 Board of Trustees of the Series has 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 Series to Neuberger&Berman in
connection with a purchase or sale of securities offered on a securities
exchange may not exceed the usual and customary broker's commission.
Accordingly, it is the Series' policy that the commissions to be paid to
Neuberger&Berman must, in N&B Management's judgment be (1) at least as favorable
as those that would be 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 Series Trustees not to be comparable
to the Series. The Series do not deem it practicable and in their best interest
to solicit competitive bids for commissions on each transaction. However,
consideration regularly is given to information concerning the prevailing level
of commissions charged on comparable transactions by other brokers during
comparable periods of time. The 1940 Act generally prohibits Neuberger&Berman
from acting as principal in the purchase or sale of securities for a Series'
account, unless an appropriate exemption is available.
A committee of Independent Series Trustees from time to time reviews, among
other things, information relating to the commissions charged by
Neuberger&Berman to the Series 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 Series must be reviewed
and approved no less often than annually by a majority of the Independent Series
Trustees.
To ensure that accounts of all investment clients, including the Series,
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.
The Series expects that it will continue to execute a portion of its
transactions through brokers other than Neuberger&Berman. In selecting those
brokers, N&B Management will consider the quality and reliability of brokerage
services, including execution capability and performance and financial
responsibility, and may consider the research and other investment information
provided by those brokers, and the willingness of particular brokers to sell the
Variable Contracts issued by the Life Companies.
A committee, comprised of officers of N&B Management and principals of
Neuberger&Berman who are portfolio managers of the Series and Other N&B Funds
(collectively, "N&B 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 N&B 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;
and (2) adjustments may be required because of periodic changes in the execution
or research capabilities of particular brokers, or in the execution or research
needs of the N&B Funds and/or the Managed Accounts; and (3) the aggregate amount
of brokerage commissions generated by transactions for the N&B 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 N&B Management determines in good
faith that the amount of those commissions is reasonable in relation to the
value of the brokerage and research services provided by the broker. N&B
Management believes that those research services provide the Series with
benefits by supplementing the information otherwise available to N&B Management.
That research information may be used by N&B Management in servicing their
respective funds and, in some cases, by Neuberger&Berman in servicing the
Managed Accounts. On the other hand, research information received by N&B
Management from brokers effecting portfolio transactions on behalf of the Other
N&B Funds and by Neuberger&Berman from brokers executing portfolio transactions
on behalf of the Managed Accounts may be used for the Series' benefit.
Janet W. Prindle, a principal of Neuberger&Berman and a Vice President of
N&B Management, is the person primarily responsible for making decisions as to
specific action to be taken with respect to the investment portfolio of the
Series. Ms. Prindle has full authority to take action with respect to portfolio
transactions and may or may not consult with other personnel of N&B Management
prior to taking such action. If Ms. Prindle is unavailable to perform her
responsibilities, Robert Ladd and/or Ingrid Saukaitis, each of whom is an
Assistant Vice president of N&B Management, will assume responsibility for the
portfolio of the Series. For more information on these individuals, see
"Management and Administration" in the Prospectus.
Portfolio Turnover
The portfolio turnover rate is calculated by dividing the lesser of the
cost of the securities purchased or the proceeds from the securities sold by the
Series during the fiscal year (other than securities, including options, foreign
financial futures contracts and forward contracts, whose maturity or expiration
date at the time of acquisition was one year or less), divided by the month-end
average monthly value of such securities owned by the Series during the year.
REPORTS TO SHAREHOLDERS
Shareholders of the Portfolio receive unaudited semi-annual financial
statements, as well as year-end financial statements audited by the independent
auditors for the Portfolio and for the Series. The Portfolio's report shows the
investments owned by the Series and the market values thereof and provides other
information about the Portfolio and its operations. In addition, the report
contains the Portfolio's financial statements, including the Portfolio's
beneficial interest in the Series.
CUSTODIAN AND TRANSFER AGENT
The Portfolio and Series have selected State Street Bank and Trust Company
("State Street"), 225 Franklin Street, Boston, Massachusetts 02110 as custodian
for its securities and cash. State Street also serves as the Portfolio's
Transfer Agent and shareholder servicing agent, administering purchases and
redemptions Trust shares through its Boston Service Center.
INDEPENDENT AUDITORS
The Portfolio and Series have selected Ernst & Young LLP, 200 Clarendon
Street, Boston, Massachusetts 02116 as the independent auditors who will audit
its financial statements.
LEGAL COUNSEL
The Portfolio and Series have selected Dechert Price & Rhoads, 1775 Eye
Street, N.W., Washington, D.C. 20006 as legal counsel.
REGISTRATION STATEMENT
This SAI and 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. Certain portions of the
registration statement have been omitted pursuant to SEC rules and regulations.
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 Series and the Portfolios.
Statements contained in this SAI and Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in each
instance reference is made to the copy of the contract or other document filed
as an exhibit to the registration statement, each such statement being qualified
in all respects by such reference.
<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
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 time may be small.
Caa - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds rated Ca represent obligations that are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
C - Bonds rated C are the lowest rated class of bonds, and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Modifiers - Moody's may apply numerical modifiers 1, 2, and 3 in each
generic rating classification described above. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issuer
ranks in the lower end of its generic rating category.
S&P commercial paper ratings
A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+).
Moody's commercial paper ratings
Issuers rated Prime-1 (or related supporting institutions), also known as
P-1, have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by the
following characteristics:
-Leading market positions in well-established industries;
-High rates of return on funds employed;
-Conservative capitalization structures with moderate reliance on debt
and ample asset protection;
-Broad margins in earnings coverage of fixed financial charges and high
internal cash generation; and
-Well-established access to a range of financial markets and assured
sources of alternate liquidity.
<PAGE>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
POST-EFFECTIVE AMENDMENT NO. 27 ON FORM N-1A
PART C
OTHER INFORMATION
Item 24. Exhibits
Exhibit Number Description
(a) (1) Certificate of Trust of Registrant.*
(2) Trust Instrument of Registrant.*
(3) Schedule A to Trust Instrument of Registrant designating
Series of Registrant.****
(b) (1) By-laws of Registrant.*
(2) Amendment to By-laws dated November 11, 1997.*****
(c) (1) Trust Instrument of Registrant, Articles IV, V and VI.*
(2) By-laws of Registrant, Articles V, VI and VIII.*
(d) (1) Management Agreement Between Advisers Managers Trust and
Neuberger&Berman Management Incorporated.*
(2) Sub-Advisory Agreement Between Neuberger&Berman Management
Incorporated and Neuberger&Berman with Respect to Advisers
Managers Trust.*
(3) Substitution Agreement among Neuberger&Berman Management Inc.,
Advisers Managers Trust, Neuberger&Berman, L.P. and
Neuberger&Berman, LLC.*
(4) Schedule designating series of Advisers Managers Trust subject
to the Management Agreement.****
(5) Schedule designating series of Advisers Managers Trust subject
to the Sub-Advisory Agreement.****
(e) (1) Distribution Agreement Between Registrant and Neuberger&Berman
Management Incorporated.*
(2) Schedule designating series of Registrant subject to the
Distribution Agreement.****
(f) Bonus, Profit Sharing or Pension Plans. None.
(g) (1) Custodian Contract Between Registrant and State Street Bank
and Trust Company.**
(2) Letter Agreement adding the International Portfolio of
Registrant to the Custodian Contract.*
(3) Form of Schedule A to the Custodian Contractdesignating
approved foreign banking institutions and securities
depositories.*****
(4) Custodian Fee Schedule.***
(5) Form of Letter Agreement adding the Mid-Cap Growth and
Guardian Portfolios of Registrant to the Custodian Contract
and Transfer Agency Agreement.****
(6) Schedule designating Series of Registrant subject to
Custodian Contract.****
(7) Form of Letter Agreement adding the Socially Responsive
Portfolio of Registrant to the Custodian Contract and Transfer
Agency Agreement. (To be filed by post-effective amendment.)
(h) (1) Transfer Agency Agreement Between Registrant and State Street
Bank and Trust Company.**
(2) Administration Agreement Between Registrant and
Neuberger&Berman Management Incorporated.*
(3) Form of Fund Participation Agreement.*
(4) Letter Agreement adding the International Portfolio of
Registrant to the Transfer Agency Agreement.*
(5) Reimbursement Agreement between Registrant, on behalf of the
International Portfolio, and Neuberger&Berman Management Inc.*
(6) Form of Letter Agreement adding the Mid-Cap Growth and
Guardian Portfolios of Registrant to the Transfer Agency
Agreement (see exhibit 8(e)).****
(7) Schedule designating Series of Registrant subject to the
Administration Agreement.****
(8) Reimbursement Agreement between Registrant, on behalf of the
Mid-Cap Growth and Guardian Portfolios, and Neuberger&Berman
Management Inc.****
(9) Schedule designating series of Registrant subject to the
Transfer Agency Agreement.****
(10) Form of Reimbursement Agreement between Registrant, on behalf
of the Socially Responsive Portfolio, and Neuberger&Berman
Management, Inc. Filed herewith.
(i) Legal Opinions. None.
(j) (1) Consent of Independent Auditors. None.
(2) Powers of Attorney.***
(k) Financial Statements Omitted from Prospectus. None.
(l) Letter of Investment Intent. None.
(m) (1) Distribution Plan Pursuant to Rule 12b-1.*
(2) Schedule designating Series of Registrant subject to the
Distribution Plan.****
(n) Financial Data Schedules. None.
(o) Rule 18f-3 Plan. None.
* Incorporated by reference to Post-Effective Amendment No. 22 to Registrant's
Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR Accession
No. 0000943663-97-000091.
** Incorporated by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0000943663-96-000107.
*** Incorporated by reference to Post-Effective Amendment No. 23 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0000943663-97-000094.
**** Incorporated by reference to Post-Effective Amendment No. 25 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255,
EDGAR Accession No. 0000943663-97-000256.
***** Incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255,
EDGAR Accession No. 0000943663-98-000094.
Item 25. Persons Controlled By or Under Common Control with Registrant
Not Applicable.
Item 26. Number of Holders of Securities
Omitted pursuant to the requirements of Form N-1A as effective June 1,
1998.
Item 27. 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 in connection with any claim, action, suit or proceeding ("Action") in
which he becomes involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or incurred by him 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
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 persons, as that term is defined in the
Investment Company Act of 1940, of the Registrant ("Independent Trustees"), nor
are 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 being or having been a
shareholder and not because of his acts or omissions or for some other reason,
the present or former shareholder (or his 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 Advisers Managers Trust
and Neuberger&Berman Management Incorporated ("N&B Management") provides that
neither N&B Management nor any director, officer or employee of N&B Management
performing services for any Series of Advisers Managers Trust (each a
"Portfolio") at the direction or request of N&B Management in connection with
N&B Management's discharge of its obligations under the Agreement 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 Agreement relates; provided,
that nothing in the Agreement shall be construed (i) to protect N&B Management
against any liability to Advisers Managers Trust or a Series of Advisers
Managers Trust or its interest holders to which N&B Management would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of N&B Management's duties, or by reason of N&B Management's
reckless disregard of its obligations and duties under the Agreement, or (ii) to
protect any director, officer or employee of N&B Management who is or was a
Trustee or officer of Advisers Managers Trust against any liability to Advisers
Managers Trust or a Series 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 Advisers Managers Trust.
Section 1 of the Sub-Advisory Agreement between Advisers Managers Trust
and Neuberger&Berman, LLC ("Sub-Adviser") 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, the Sub-Adviser will not be subject to liability for any act or
omission or any loss suffered by any Series of Advisers Managers Trust or its
interest holders in connection with the matters to which the Agreement relates.
Section 9.1 of the Administration Agreement between the Registrant and
N&B Management provides that N&B Management will not be liable to the Registrant
for any action taken or omitted to be taken by N&B Management in good faith and
with due care in accordance with such instructions, or with the advice or
opinion, of legal counsel for a Portfolio of the Trust or for the Administrator
in respect of any matter arising in connection with the Administration
Agreement. N&B Management shall be protected in acting upon any such
instructions, advice or opinion and upon any other paper or document delivered
by a Portfolio or such legal counsel which N&B Management believes to be genuine
and to have been signed by the proper person or persons, and N&B Management
shall not be held to have notice of any change of status or authority of any
officer or representative of the Trust, until receipt of written notice thereof
from the Portfolio. Section 12 of the Administration Agreement provides that
each Portfolio of the Registrant shall indemnify N&B Management and hold it
harmless from and against any and all losses, damages and expenses, including
reasonable attorneys' fees and expenses, incurred by N&B Management that result
from: (i) any claim, action, suit or proceeding in connection with N&B
Management's entry into or performance of the Agreement with respect to such
Portfolio; or (ii) any action taken or omission to act committed by N&B
Management in the performance of its obligations under the Agreement with
respect to such Portfolio; or (iii) any action of N&B Management upon
instructions believed in good faith by it to have been executed by a duly
authorized officer or representative of the Trust with respect to such
Portfolio; provided, that N&B Management will not be entitled to such
indemnification in respect of actions or omissions constituting negligence or
misconduct on the part of N&B 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 Portfolio, and not from assets
belonging to any other Portfolio of the Registrant. Section 13 of the
Administration Agreement provides that N&B Management will indemnify each
Portfolio of the Registrant and hold it harmless from and against any and all
losses, damages and expenses, including reasonable attorneys' fees and expenses,
incurred by such Portfolio of the Registrant that result from: (i) N&B
Management's failure to comply with the terms of the Agreement; or (ii) N&B
Management's lack of good faith in performing its obligations under the
Agreement; or (iii) the negligence or misconduct of N&B Management, or its
employees, agents or contractors in connection with the Agreement. A Portfolio
of the Registrant shall not be entitled to such indemnification in respect of
actions or omissions constituting negligence or misconduct on the part of that
Portfolio or its employees, agents or contractors other than N&B Management,
unless such negligence or misconduct results from or is accompanied by
negligence or misconduct on the part of N&B Management, any affiliated person of
N&B Management, or any affiliated person of an affiliated person of N&B
Management.
Section 11 of the Distribution Agreement between the Registrant and N&B
Management provides that N&B Management shall look only to the assets of a
Portfolio for the Registrant's performance of the Agreement by the Registrant on
behalf of such Portfolio, 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 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 28. 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 N&B Management and each partner of the Sub-Adviser 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 A. Brandon Secretary, Neuberger&Berman Advisers Management Trust
Vice President, N&B Management (Delaware business trust); Secretary, Advisers Managers
Trust; Secretary, Neuberger&Berman Income Funds; Secretary,
Neuberger&Berman Income Trust; Secretary, Neuberger&Berman
Equity Funds; Secretary, Neuberger&Berman Equity Trust;
Secretary, Income Managers Trust; Secretary, Equity Managers
Trust; Secretary, Global Managers Trust; Secretary,
Neuberger&Berman Equity Assets.
Brooke A. Cobb Chief Investment Officer, Bainco International Investors (2);
Vice President, N&B Management Senior Vice President and Senior Portfolio Manager, Putnum
Investment Management, Inc. (1).
Stacy Cooper-Shugrue Assistant Secretary, Neuberger&Berman Advisers Management
Assistant Vice President, N&B Management Trust (Delaware business trust); Assistant Secretary,
Advisers Managers Trust; Assistant Secretary,
Neuberger&Berman Income Funds; Assistant Secretary,
Neuberger&Berman Income Trust; Assistant Secretary,
Neuberger&Berman Equity Funds; Assistant Secretary,
Neuberger & Berman Equity Trust; Assistant Secretary, Income
Managers Trust; Assistant Secretary, Equity Managers Trust;
Assistant Secretary, Global Managers Trust; Assistant
Secretary, Neuberger&Berman Equity Assets.
Robert W. D'Alelio Senior Portfolio Manager, Putnam Investments. (3)
Vice President, N&B Management
Barbara DiGiorgio Assistant Treasurer, Neuberger&Berman Advisers Management
Assistant Vice President, N&B Management Trust (Delaware business trust); Assistant Treasurer,
Advisers Managers Trust; Assistant Treasurer,
Neuberger&Berman Income Funds; Assistant Treasurer,
Neuberger&Berman Income Trust; Assistant Treasurer,
Neuberger&Berman Equity Funds; Assistant Treasurer,
Neuberger & Berman Equity Trust; Assistant Treasurer, Income
Managers Trust; Assistant Treasurer, Equity Managers Trust;
Assistant Treasurer, Global Managers Trust; Assistant
Treasurer, Neuberger&Berman Equity Assets.
Stanley Egener Chairman of the Board and Trustee, Neuberger&Berman Advisers
President and Director, N&B Management; Management Trust (Delaware business trust); Chairman of the
Principal, Neuberger&Berman, LLC Board and Trustee, Advisers Managers Trust; Chairman of the
Board and Trustee, Neuberger&Berman Income Funds; Chairman
of the Board and Trustee, Neuberger&Berman Income Trust;
Chairman of the Board and Trustee, Neuberger&Berman Equity
Funds; Chairman of the Board and Trustee, Neuberger&Berman
Equity Trust; Chairman of the Board and Trustee, Income
Managers Trust; Chairman of the Board and Trustee, Equity
Managers Trust; Chairman of the Board and Trustee, Global
Managers Trust; Chairman of the Board and Trustee,
Neuberger&Berman Equity Assets.
Theodore P. Giuliano President and Trustee, Neuberger&Berman Income Funds; President
Vice President and Director, N&B Management; and Trustee, Neuberger&Berman Income Trust; President and
Principal, Neuberger&Berman, LLC Trustee, Income Managers Trust.
C. Carl Randolph Assistant Secretary, Neuberger&Berman Advisers Management
Principal, Neuberger&Berman, LLC Trust (Delaware business trust); Assistant Secretary,
Advisers Managers Trust; Assistant Secretary,
Neuberger&Berman Income Funds; Assistant Secretary,
Neuberger&Berman Income Trust; Assistant Secretary
Neuberger&Berman Equity Funds; Assistant Secretary,
Neuberger&Berman Equity Trust; Assistant Secretary, Income
Managers Trust; Assistant Secretary, Equity Managers Trust;
Assistant Secretary, Global Managers Trust; Assistant
Secretary, Neuberger & Berman Equity Assets.
Richard Russell Treasurer, Neuberger&Berman Advisers Management Trust
Vice President, N&B Management (Delaware business trust); Treasurer, Advisers Managers
Trust; Treasurer, Neuberger&Berman Income Funds; Treasurer,
Neuberger&Berman Income Trust; Treasurer, Neuberger&Berman
Equity Funds; Treasurer, Neuberger&Berman Equity Trust;
Treasurer, Income Managers Trust; Treasurer, Equity Managers
Trust; Treasurer, Global Managers Trust; Treasurer,
Neuberger&Berman Equity Assets.
Ingrid Saukaitis Project Director, Council on Economic Priorities. (2)
Assistant Vice President, N&B Management
Jennifer K. Silver Portfolio Manager and Director, Putnam Investment Management,
Vice President, N&B Management; Principal, Inc. (2)
Neuberger&Berman LLC
Daniel J. Sullivan Vice President, Neuberger&Berman Advisers Management Trust
Senior Vice President, N&B Management (Delaware business trust); Vice President, Advisers Managers
Trust; Vice President, Neuberger&Berman Income Funds; Vice
President, Neuberger&Berman Income Trust; Vice President,
Neuberger&Berman Equity Funds; Vice President,
Neuberger&Berman Equity Trust; Vice President, Income
Managers Trust; Vice President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice President,
Neuberger&Berman Equity Assets.
Michael J. Weiner Vice President, Neuberger&Berman Advisers Management Trust
Senior Vice President, N&B Management (Delaware business trust); Vice President, Advisers Managers
Trust; Vice President, Neuberger&Berman Income Funds; Vice
President, Neuberger&Berman Income Trust; Vice President,
Neuberger&Berman Equity Funds; Vice President,
Neuberger&Berman Equity Trust; Vice President, Income
Managers Trust; Vice President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice President,
Neuberger&Berman Equity Assets.
Celeste Wischerth Assistant Treasurer, Neuberger&Berman Advisers Management
Assistant Vice President, N&B Management Trust (Delaware business trust); Assistant Treasurer,
Advisers Managers Trust; Assistant Treasurer,
Neuberger&Berman Income Funds; Assistant Treasurer,
Neuberger&Berman Income Trust; Assistant Treasurer,
Neuberger&Berman Equity Funds; Assistant Treasurer,
Neuberger&Berman Equity Trust; Assistant Treasurer, Income
Managers Trust; Assistant Treasurer, Equity Managers Trust;
Assistant Treasurer, Global Managers Trust; Assistant
Treasurer, Neuberger&Berman Equity Assets.
Lawrence Zicklin President and Trustee, Neuberger&Berman Advisers Management
Director, N&B Management; Principal, Trust (Delaware business trust); President and Trustee, Advisers
Neuberger&Berman, LLC Managers Trust; President and Trustee, Neuberger&Berman Equity
Funds; President and Trustee, Neuberger&Berman Equity Trust;
President and Trustee, Equity Managers Trust; President, Global
Managers Trust: President and Trustee, Neuberger&Berman Equity
Assets.
</TABLE>
The principal address of N&B Management, Neuberger&Berman, LLC and of each
of the investment companies named above, is 605 Third Avenue, New York, New York
10158.
- -------------------------------
(1) Until October 31, 1995.
(2) Until June 1997.
(3) Until 1996.
Item 29. Principal Underwriters
(a) Neuberger&Berman Management Incorporated, the principal underwriter
distributing securities of the Registrant, is also the principal underwriter and
distributor for each of the following investment companies:
Neuberger&Berman Equity Funds
Neuberger&Berman Equity Assets
Neuberger&Berman Equity Trust
Neuberger&Berman Income Funds
Neuberger&Berman Income Trust
Neuberger&Berman Management Incorporated is also the investment adviser
to the master funds in which each of 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 POSITION AND OFFICES WITH UNDERWRITER POSITIONS AND OFFICES WITH REGISTRANT
---- ---------------- ---------------
<S> <C> <C>
Ramesh Babu Assistant Vice President None
Claudia A. Brandon Vice President Secretary
Patrick T. Byrne Vice President None
Richard A. Cantor Chairman of the Board and Director None
Valerie Chang Assistant Vice President None
Brooke A. Cobb Vice President None
Robert Conti Treasurer None
Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary
Robert W. D'Alelio Vice President None
Clara Del Villar Vice President None
Barbara DiGiorgio Assistant Vice President Assistant Treasurer
Roberta D'Orio Vice President None
Stanley Egener President and Director Chairman of the Board of Trustees
(Chief Executive Officer)
Brian J. Gaffney Vice President None
Joseph G. Galli Vice President None
Robert I. Gendelman Vice President None
Theodore P. Giuliano Vice President and Director None
Leslie Holliday-Soto Assistant Vice President None
Michael M. Kassen Vice President and Director None
Robert Ladd Assistant Vice President None
Irwin Lainoff Director None
Josephine Mahaney Vice President None
Carmen G. Martinez Assistant Vice President None
Ellen Metzger Vice President and Secretary None
Paul Metzger Vice President None
Loraine Olavarria Assistant Secretary None
Janet W. Prindle Vice President None
Joseph S. Quirk Assistant Vice President None
Kevin L. Risen Vice President None
Richard Russell Vice President Treasurer (Principal Accounting
Officer)
Ingrid Saukaitis Assistant Vice President None
Jennifer K. Silver Vice President None
Kent C. Simons Vice President None
Frederick B. Soule Vice President None
Daniel J. Sullivan Senior Vice President Vice President
Peter E. Sundman Senior Vice President None
Andrea Trachtenberg Vice President of Marketing None
Judith M. Vale Vice President None
Josephine Velez Assistant Vice President None
Susan Walsh Vice President None
Michael J. Weiner Senior Vice President Vice President (Principal Financial
Officer)
Celeste Wischerth Assistant Vice President Assistant Treasurer
Thomas Wolfe Vice President None
Lawrence Zicklin Director Trustee and President
</TABLE>
(c) No commissions or compensation were received directly or indirectly
from the Registrant by any principal underwriter who was not an affiliated
person of the Registrant.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by
Section 31 (a) of the Investment Company Act of 1940, 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 Bylaws,
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.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder with respect to the Advisers Managers Trust are
maintained at the offices of State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, except for the Advisers Managers Trust's
Trust Instrument and Bylaws, minutes of meetings of the Advisers Managers
Trust's Trustees and shareholders and the Advisers Managers Trust's policies and
contracts, which are maintained at the offices of the Advisers Managers Trust,
605 Third Avenue, New York, New York 10158.
Item 31. Management Services
Other than as set forth in Parts A and B of this Registration Statement,
the Registrant is not a party to any management-related service contract.
Item 32. Undertakings
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 27 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, and the State of New York on the 5th day of June, 1998.
NEUBERGER & BERMAN
ADVISERS MANAGEMENT TRUST
By: /s/ Lawrence Zicklin
Lawrence Zicklin
President, Trustee and
Principal Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 27 has been signed below by the following persons
in the capacities and on the date indicated.
Signature Title Date
/s/ Stanley Egener Chairman and Trustee June 5, 1998
- --------------------
Stanley Egener
/s/ Lawrence Zicklin President and Trustee June 5, 1998
Lawrence Zicklin (Principal Executive Officer)
/s/ Michael J. Weiner Vice President June 5, 1998
- --------------------- (Principal Financial Officer)
Michael J. Weiner
/s/ Richard Russell Treasurer June 5, 1998
- --------------------- (Principal Accounting Officer)
Richard Russell
/s/ Faith Colish Trustee June 5, 1998
Faith Colish
/s/ Walter G. Ehlers Trustee June 5, 1998
- ---------------------
Walter G. Ehlers
- --------------------- Trustee
Anne Harvey
- --------------------- Trustee
Leslie A. Jacobson
/s/ Robert M. Porter Trustee June 5, 1998
- ---------------------
Robert M. Porter
/s/ Ruth E. Salzmann Trustee June 5, 1998
- ---------------------
Ruth E. Salzmann
/s/ Peter P. Trapp Trustee June 5, 1998
- ---------------------
Peter P. Trapp
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, ADVISERS MANAGERS TRUST has duly caused this
Post-Effective Amendment No. 27 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and the State of New York on
the 5th day of June, 1998.
ADVISERS MANAGERS TRUST
By: /s/ Lawrence Zicklin
Lawrence Zicklin
President, Trustee and
Principal Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 27 has been signed below by the following persons
in the capacities and on the date indicated.
Signature Title Date
/s/ Stanley Egener Chairman and Trustee June 5, 1998
- --------------------
Stanley Egener
/s/ Lawrence Zicklin President and Trustee June 5, 1998
Lawrence Zicklin (Principal Executive Officer)
/s/ Michael J. Weiner Vice President June 5, 1998
- --------------------- (Principal Financial Officer)
Michael J. Weiner
/s/ Richard Russell Treasurer June 5, 1998
- --------------------- (Principal Accounting Officer)
Richard Russell
/s/ Faith Colish Trustee June 5, 1998
Faith Colish
/s/ Walter G. Ehlers Trustee June 5, 1998
- ---------------------
Walter G. Ehlers
- --------------------- Trustee
Anne Harvey
- --------------------- Trustee
Leslie A. Jacobson
/s/ Robert M. Porter Trustee June 5, 1998
- ---------------------
Robert M. Porter
/s/ Ruth E. Salzmann Trustee June 5, 1998
- ---------------------
Ruth E. Salzmann
/s/ Peter P. Trapp Trustee June 5, 1998
- ---------------------
Peter P. Trapp
<PAGE>
INDEX TO EXHIBITS
(for Post-Effective Amendment No. 27)
Exhibit Number Under
Part C of Form N-1A Name of Exhibit
h(10) Form of Reimbursement Agreement between
Registrant, on behalf of the Socially
Responsive Portfolio, and Neuberger&Berman
Management, Inc.
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
June 1, 1998
Neuberger&Berman Management Incorporated
605 Third Avenue
New York, NY 10158-0180
Re: Reimbursement Agreement - Socially Responsive Portfolio
Dear Ladies and Gentlemen:
Socially Responsive Portfolio ("Portfolio") is a series of Neuberger&Berman
Advisers Management Trust, a Delaware business trust ("Trust"). The Portfolio
intends to invest all of its net investable assets in AMT Socially Responsive
Investments ("Series"), a series of Advisers Managers Trust, a New York common
law trust.
Neuberger&Berman Management Inc. ("NBMI") agrees during the period from May 1,
1998 through May 1, 1999 to pay any of the Portfolio's operating expenses and
the Portfolio's pro rata portion of the Series' operating expenses (including
any fees or expense reimbursements payable to NBMI by the Portfolio or by
Advisers Managers Trust pursuant to any agreement or arrangement, but excluding
interest, taxes, brokerage commissions, litigation expenses and extraordinary
expenses of the Portfolio or the Series) ("Operating Expenses") which exceed, in
the aggregate, the rate of 1.50% per annum of the Portfolio's average daily net
assets ("Expense Limitation").
The Trust, on behalf of the Portfolio, in turn agrees to reimburse NBMI from May
1, 1998 up until December 31, 2000 ("Reimbursement Period"), out of assets
belonging to the Portfolio for any Operating Expenses paid or assumed by NBMI as
set forth above. The Trust does not have to reimburse NBMI if such reimbursement
would cause Operating Expenses for any year during the Reimbursement Period to
exceed the Expense Limitation. The Trust agrees to furnish or otherwise make
available to NBMI such copies of its financial statements, reports, and other
information relating to its business affairs as NBMI may, at any time or from
time to time, reasonably request in connection with this agreement.
NBMI understands that NBMI shall look only to the assets of the Portfolio for
performance of this agreement and for payment of any claim NBMI may have
thereunder, and neither any other series of the Trust, nor any of the Trust's
trustees, officers, employees, agents, or shareholders, whether past, present or
future, shall be personally liable therefor.
This agreement is made and to be principally performed in the State of New York,
and except insofar as the Investment Company of 1940 or other federal laws and
regulations may be controlling, this agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of New
York. Any amendment to this agreement shall be in writing signed by the parties
hereto.
If NBMI is in agreement with the foregoing, please sign the form of acceptance
on the enclosed counterpart hereof and return the same to the Trust.
Very truly yours,
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
on behalf of Socially Responsive Portfolio
By:_________________________________
Michael J. Weiner, Vice President
The foregoing agreement is hereby
accepted as of June 1, 1998
NEUBERGER&BERMAN MANAGEMENT INCORPORATED
By:_________________________________
Stanley Egener, President
