As filed with the Securities and Exchange Commission on April 28, 2000
Registration No. 2-88566
Investment Company Act File No. 811-4255
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 32 |X|
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 32 |X|
(Check appropriate box or boxes)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST(1)
---------------------------------------------
(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 Inc.
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 paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1), or
|_| 75 days after filing pursuant to paragraph (a(a)(2)
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
|X| on May 1, 2000 pursuant to paragraph (b)
|_| on May 1, 2000 pursuant to paragraph (a)(1)
|_| on _________ pursuant to paragraph(a)(2) of Rule 485
- ----------
1. Registrant is a "master/feeder fund." This Post-Effective Amendment No. 32
includes a signature page for the master fund, Advisers Managers Trust.
<PAGE>
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Contents of Registration Statement
----------
This Post Effective Amendment No. 32 to the Registration Statement of the
Neuberger Berman Advisers Management Trust consists of the following documents:
Cover Sheet
Contents of Registration Statement
Neuberger Berman Advisers Management Trust
- Part A - Joint Prospectus
- Individual Portfolio Prospectuses
- Part B - Statement of Additional Information
- Part C - Other Information and Signature Pages
Exhibit Index
Exhibits
<PAGE>
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NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
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Joint Prospectus May 1, 2000
THESE PORTFOLIOS:
o are offered to life insurance companies to serve as investment vehicles
under their variable annuity and variable life insurance contracts (and,
in the case of Balanced Portfolio, are also offered to qualified pension
and retirement plans)
o are designed for investors with long-term goals in mind
o offer you the opportunity to participate in financial markets through
professionally managed stock, bond, and money market portfolios
o carry certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o are mutual funds, not bank deposits, and are not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments for these portfolios are managed by the same
individuals who manage one or more other Neuberger Berman mutual funds that have
similar names, objectives, and investment styles as a portfolio. You should be
aware that the portfolios are likely to differ from these other mutual funds in
size, cash flow pattern, and tax matters. Accordingly, the holdings and
performance of these portfolios can be expected to vary from those of the other
mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund names in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc.(C) 2000 Neuberger Berman Management Inc.
CONTENTS
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The Portfolios
Balanced Portfolio.............................................................2
Growth Portfolio...............................................................6
Guardian Portfolio............................................................10
Mid-Cap Growth Portfolio......................................................14
Partners Portfolio............................................................18
Socially Responsive Portfolio.................................................22
International Portfolio.......................................................26
Limited Maturity Bond Portfolio...............................................29
Liquid Asset Portfolio........................................................33
Your Investment
Buying and Selling Portfolio Shares ..........................................37
Share Prices..................................................................37
Portfolio Structure...........................................................38
Distributions and Taxes.......................................................38
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<PAGE>
Neuberger Berman Advisers Management Trust
Balanced Portfolio
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"By keeping most of the portfolio's assets invested in the mid-cap segment of
the stock market, the portfolio seeks long-term growth, while substantial
investment in the short-term bond market has the potential to reduce risk and
add to income."
GOAL & STRATEGY
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The portfolio seeks growth of capital and reasonable current income without
undue risk to principal.
To pursue these goals, the portfolio allocates its assets between stocks --
primarily those of mid-capitalization companies -- and short-term fixed-income
securities from U.S. government and corporate issuers. The portfolio seeks to
reduce risk by diversifying among many issuers and different types of
securities.
The managers may allocate anywhere from 50% to 70% of assets to stock
investments, with the balance allocated to bond investments (at least 25%) and
operating cash. In determining the portfolio's allocation, the managers consult
with senior management of the adviser and sub-adviser.
In selecting stocks, the managers look for fast-growing companies in new or
rapidly evolving industries whose characteristics may include one or more of the
following:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
o financial strength
o a strong competitive position
o a reasonable stock price in light of the company's growth rate
The portfolio's fixed-income securities consist mainly of investment-grade bonds
and other debt securities from U.S. government and corporate issuers, and may
include mortgage- and asset-backed securities. Although the portfolio may invest
in securities of any maturity, it normally maintains an average portfolio
duration of four years or less. In selecting fixed-income securities, the
managers monitor national trends, looking for securities that appear relatively
underpriced or appear likely to have their credit ratings raised.
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Asset Allocation
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Studies of performance and volatility indicate that balanced portfolios of
stocks and fixed-income securities can approach stock market performance while
experiencing lower volatility. The first step in an allocation strategy is to
determine how assets should be divided among investment categories. Selecting
appropriate investments within those categories is a second step.
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Mid-Cap Stocks
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Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
2 Balanced Portfolio
<PAGE>
MAIN RISKS
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Most of the portfolio's performance depends on what happens in the stock and
bond markets. The behavior of these markets is unpredictable, particularly in
the short term. Because of this, the value of your investment will rise and
fall, and you could lose money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stock when the market or the economy is not
robust, during market downturns or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Most of the performance of the fixed-income portion of the portfolio depends on
what happens in the investment-grade bond market. The portfolio's yield and
total return on its fixed-income securities will change with interest rate
movements. When interest rates rise, the portfolio's underlying bonds will
decline in price. The portfolio sensitivity to this risk will increase with any
increase in the portfolio's duration.
A downgrade or default that affected any of the portfolio's securities would
adversely affect the portfolio's performance, as would unexpected interest rate
trends that cause mortgage- or asset-backed securities to be paid off
substantially earlier or later than expected.
The portfolio's performance may also suffer if certain investments or asset
allocations do not perform as portfolio managers expected.
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Other Risks
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The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements.
The use of certain derivatives to hedge interest rate risk or produce income
could affect portfolio performance if the derivatives do not perform as
expected.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
When the portfolio anticipates unusual market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term securities. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Balanced Portfolio
<PAGE>
PERFORMANCE
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The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
performance information does not reflect insurance product or qualified plan
expenses.
[The following table was represented by a bar chart in the printed material.]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
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'90 1.95
'91 22.68
'92 8.06
'93 6.45
'94 -3.36
'95 23.76
'96 6.89
'97 19.45
'98 12.18
'99 33.56
^ Best quarter: Q4 '99, up 32.13% v Worst quarter: Q3 '98, down 12.97%
Year-to-date performance as of 3/31/00: up 17.05%
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AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
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Since
Inception
1 Year 5 Years 10 Years 2/28/89
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Balanced Portfolio 33.56 18.81 12.65 13.18
Russell Midcap Growth Index 51.29 28.02 18.95 19.82
Merrill Lynch 1-3 Year Treasury Index 3.06 6.51 6.59 7.01
S&P 500 Index 21.01 28.49 18.17 19.24
The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.
The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index of U.S. Treasury
securities.
The S&P 500 is an unmanaged index of U.S. stocks.
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Performance Measures
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The information at left provides different measures of the portfolio's total
return. Total return includes the effect of distributions as well as changes in
share price, if any should occur. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes two broad-based market indices as
well as a more focused index of mid-cap growth stocks. The portfolio's
performance figures include all of its expenses; the indices do not include
costs of investment.
INVESTOR EXPENSES
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The portfolio charges no fees for buying, selling, or exchanging shares, or for
maintaining an account. Your only portfolio cost is your share of annual
operating expenses. You may, however, have additional expenses in
connection with your insurance contract or qualified plan.
FEE TABLE
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Shareholder fees None
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Annual operating expenses (% of average net assets)*
These are deducted from portfolio assets, so you pay them indirectly.
Management/administration fees 0.85
Plus: Distribution (12b-1) fees none
Other expenses 0.17
----
Equals: Total annual operating expenses 1.02
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EXPENSE EXAMPLE
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The example assumes that you invested $10,000 for the periods shown, that you
earned a hypothetical 5% total return each year, and that the portfolio's
expenses were unchanged. Your costs would be the same whether you sold your
shares or continued to hold them at the end of each period. Actual performance
and expenses may be higher or lower.
1 Year 3 Years 5 Years 10 Years
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Expenses $104 $325 $563 $1,248
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* The figures in the table are based on last year's expenses. Actual
expenses this year may be higher or lower.
4 Balanced Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
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Year Ended December 31, 1995 1996 1997 1998 1999
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<S> <C> <C> <C> <C> <C>
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 14.51 17.52 15.92 17.80 16.34
Plus: Income (loss) from investment operations
Net investment income 0.32 0.34 0.36 0.29 0.26
Net gains/losses -- realized and unrealized 3.06 0.75 2.59 1.62 4.96
Subtotal: income (loss) from investment
operations 3.38 1.09 2.95 1.91 5.22
Minus: Distributions to shareholders
Income dividends 0.28 0.41 0.30 0.42 0.27
Capital gain distributions 0.09 2.28 0.77 2.95 0.40
Subtotal: distributions to shareholders 0.37 2.69 1.07 3.37 0.67
--------------------------------
Equals: Share price (NAV) at end of year 17.52 15.92 17.80 16.34 20.89
<CAPTION>
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Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
<S> <C> <C> <C> <C> <C>
Net expenses -- actual 0.99 1.09 1.04 1.03 1.02
Expenses(1) 0.99 1.09 1.04 1.03 1.02
Net investment income -- actual 1.99 1.84 2.07 1.84 1.60
<CAPTION>
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Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
<S> <C> <C> <C> <C> <C>
Total return(2) (%) 23.76 6.89 19.45 12.18 33.56
Net assets at end of year ($ x 1,000,000) 144.4 173.2 161.9 177.6 165.3
Portfolio turnover rate (%) 76 87 103 71 121
- --------------------------------------------------------------------------------------
</TABLE>
* The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear
in the portfolio's most recent annual report (see back cover).
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Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio's debt securities investments since its
inception.
Catherine Waterworth is a Vice President of Neuberger Berman Management and
Neuberger Berman, LLC. She has co-managed the portfolio's debt securities
investments since joining the firm in December 1998. From 1995-98 she was a
managing director of high grade fixed income at a major investment firm.
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio's equity investments
since joining the firm in 1997. From 1981 to 1997, she was an analyst and a
portfolio manager at another firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio's
equity investments since joining the firm in 1997. From 1972 to 1997, he was a
portfolio manager at several other firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administrative fees paid to Neuberger Berman Management were
0.85% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies. Qualified plans that are direct
shareholders of the portfolio are not affected by insurance-related
expenses.
5 Balanced Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Growth Portfolio
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"Without question, we are growth investors. We look for companies that we think
will deliver positive earnings surprises, particularly those with the potential
to do so consistently. Ideally, we want to identify companies that will someday
rank among the Fortune 500."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital.
To pursue this goal, the portfolio invests mainly in common stocks of
mid-capitalization companies. The portfolio seeks to reduce risk by diversifying
among many companies, industries and sectors. The managers look for fast-growing
companies that are in new or rapidly evolving industries.
Factors in identifying these firms may include:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
The managers may also look for other characteristics in a company, such as
financial strength, a strong position relative to competitors or a stock price
that is reasonable in light of its growth rate. The managers follow a
disciplined selling strategy, and may drop a stock from the portfolio when it
reaches a target price, fails to perform as expected, or appears substantially
less desirable than another stock.
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Mid-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
- --------------------------------------------------------------------------------
Growth Investing
- --------------------------------------------------------------------------------
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly evolving industries and may not yet have reached their full potential.
The growth investor looks for indications of continued success.
6 Growth Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stocks when the market or the economy is not
robust during market downturns, or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
7 Growth Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
[The following was represented as a bar chart in the printed material]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90 -8.19
'91 29.73
'92 9.54
'93 6.79
'94 -4.99
'95 31.73
'96 9.14
'97 29.01
'98 15.53
'99 50.40
^ Best quarter: Q4 '99, up 48.60% v Worst quarter: Q3 '98, down 21.39%
Year-to-date performance as of 3/31/00: up 25.21%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Growth Portfolio 50.40 26.37 15.61
Russell Midcap Growth Index 51.29 28.02 18.95
S&P 500 Index 21.01 28.49 18.17
The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.
The S&P 500 is an unmanaged index of U.S. stocks.
- --------------------------------------------------------------------------------
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Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes broad-based market indices of the
entire U.S. equity market and of the portion of the market the portfolio focuses
on. The portfolio's performance figures include all of its expenses; the indices
do not include costs of investment.
Because the portfolio had a policy of investing in stocks of all capitalizations
and used a comparatively more value-oriented investment approach prior to July
1997, its performance prior to that date would have been different if current
policies had been in effect.
8 Growth Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
<S> <C> <C> <C> <C> <C>
Share price (NAV) at beginning of year 20.31 25.86 25.78 30.54 26.29
Plus: Income (loss) from investment operations
Net investment income (loss) 0.01 (0.07) (0.03) (0.10) (0.12)
Net gains/losses -- realized and unrealized 6.26 2.34 7.06 4.12 12.51
Subtotal: income (loss) from investment
operations 6.27 2.27 7.03 4.02 12.39
Minus: Distributions to shareholders
Income dividends 0.05 0.01 -- -- --
Capital gain distributions 0.67 2.34 2.27 8.27 1.41
Subtotal: distributions to shareholders 0.72 2.35 2.27 8.27 1.41
Equals: Share price (NAV) at end of year 25.86 25.78 30.54 26.29 37.27
<CAPTION>
- ---------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income (loss), as
they actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
<S> <C> <C> <C> <C> <C>
Net expenses -- actual 0.90 0.92 0.90 0.92 0.92
Expenses(1) 0.90 0.92 0.90 0.92 0.92
Net investment income (loss) -- actual 0.04 (0.30) (0.11) (0.41) (0.46)
<CAPTION>
- ---------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
<S> <C> <C> <C> <C> <C>
Total return(2) (%) 31.73 9.14 29.01 15.53 50.40
Net assets at end of year ($ x 1,000,000) 537.8 566.4 583.7 616.4 732.8
Portfolio turnover rate (%) 44 57 113 83 119
- ---------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio since joining the firm in
1997. From 1981 to 1997, she was an analyst and a portfolio manager at another
firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio since
joining the firm in 1997. From 1972 to 1997, he was a portfolio manager at
several other firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.84% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
9 Growth Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Guardian Portfolio
- --------------------------------------------------------------------------------
"We look for established companies whose intrinsic value, by our measure, has
yet to be discovered by the majority of investors. In managing overall risk, a
conscious effort is made to determine the risk/reward scenario of each
individual holding as well as its impact at the portfolio level."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks long-term growth of capital; current income is a secondary
goal.
To pursue these goals, the portfolio invests mainly in common stocks of
large-capitalization companies. Because the managers tend to find that
undervalued stocks may be more common in certain sectors of the economy at a
given time, the portfolio may emphasize those sectors.
The portfolio seeks to reduce risk by diversifying among a large number of
companies across many different industries and economic sectors, and by managing
its overall exposure to a wide variety of risk factors.
The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:
o solid balance sheets
o above-average returns
o low valuation measures, such as price-to-earnings ratios
o strong competitive positions
When a stock no longer meets the portfolio's investment criteria, the managers
may sell it.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Large-Cap Stocks
- --------------------------------------------------------------------------------
Large companies are usually well-established. They may have a variety of
products and business lines and a sound financial base that can help them
weather bad times.
Compared to smaller companies, large companies can be less responsive to changes
and opportunities. At the same time, their returns have sometimes led those of
smaller companies, often with lower volatility.
- --------------------------------------------------------------------------------
Value Investing
- --------------------------------------------------------------------------------
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors begin to realize their worth.
10 Guardian Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
At times, large-cap stocks may lag other types of stocks in performance, which
could cause the portfolio to perform worse than certain other funds over a given
time period.
To the extent that a value approach dictates an emphasis on certain sectors of
the market at any given time, the portfolio's performance is likely to be
disproportionately affected by the economic, market, and other developments that
may influence those sectors. The portfolio's performance may also suffer if a
sector does not perform as the portfolio managers expected.
With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
11 Guardian Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out performance over various lengths of time, and compares the
return with that of a broad measure of market performance. This information is
based on past performance; it's not a prediction of future results. This
performance information does not reflect insurance product expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was represented as a bar chart in the printed material]
'90
'91
'92
'93
'94
'95
'96
'97
'98 31.67
'99 14.93
- --------------------------------------------------------------------------------
^ Best quarter: Q1 '98, up 31.76% v Worst quarter: Q3 '98, down 22.27%
Year-to-date performance as of 3/31/00: up 5.26%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 11/3/97
- --------------------------------------------------------------------------------
Guardian Portfolio 14.93 23.93
S&P 500 Index 21.01 26.35
Russell 1000 Value Index 7.35 14.28
The S&P 500 is an unmanaged index of U.S. stocks.
The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes broad-based indices of the entire
U.S. equity market and of the portion of the market the portfolio focuses on.
The portfolio's performance figures include all of its expenses; the indices do
not include costs of investment.
12 Guardian Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended December 31, 1997(1) 1998 1999
- --------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 10.00 10.52 13.84
Plus: Income from investment operations
Net investment income 0.01 0.11 0.09
Net gains/losses -- realized and unrealized 0.51 3.22(2) 1.97
Subtotal: income from investment operations 0.52 3.33 2.06
Minus: Distributions to shareholders
Income dividends -- 0.01 0.05
Subtotal: distributions to shareholders -- 0.01 0.05
...............................
Equals: Share price (NAV) at end of year 10.52 13.84 15.85
- --------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.00(3) 1.00 1.00
Gross expenses(4) 30.06(3) 1.14 0.98
Expenses(5) 1.06(3) 1.00 1.00
Net investment income -- actual 0.98(3) 0.80 0.61
- --------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(6) (%) 5.20(7) 31.67 14.93
Net assets at end of year ($ x 1,000,000) 0.6 74.1 121.1
Portfolio turnover rate (%) 12 197 107
- --------------------------------------------------------------------------------
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Kevin L. Risen and Allan R. White III are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Risen has co-managed
the portfolio's assets since its inception. He joined Neuberger Berman in 1992
as an analyst, and has been a portfolio manager since 1995. White has been
co-manager of the portfolio since September 1998, when he joined the firm. From
1989 to 1998 he was a portfolio manager at another firm.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.85% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Period from 11/3/97 (beginning of operations) to 12/31/97.
(2) May not accord with the change in aggregate gains and losses in securities
for the fiscal period because of the timing of sales and repurchases of
portfolio shares in relation to fluctuating market values of the
portfolio.
(3) Annualized.
(4) Shows what this ratio would have been if there had been no expense
reimbursement/repayment.
(5) Shows what expenses would have been if there had been no expense offset
arrangements.
(6) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
(7) Not annualized.
13 Guardian Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Mid-Cap Growth Portfolio
- --------------------------------------------------------------------------------
"We want to own today's leading mid-cap companies that have the potential to
become tomorrow's Fortune 500. To do this, we screen for financially sound, high
growth companies in emerging or rapidly evolving industries that possess records
of sustained profitability. We also look for companies with a history of
positive earnings surprises that we expect will continue for some time."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital.
To pursue this goal, the portfolio invests mainly in common stocks of
mid-capitalization companies. The portfolio seeks to reduce risk by diversifying
among many companies, industries and sectors. The managers look for fast-growing
companies that are in new or rapidly evolving industries.
Factors in identifying these firms may include:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
The managers may also look for other characteristics in a company, such as
financial strength, a strong position relative to competitors and a stock price
that is reasonable in light of its growth rate. The managers follow a
disciplined selling strategy, and may sell a stock from the portfolio when it
reaches a target price, fails to perform as expected, or appears substantially
less desirable than another stock.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Mid-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
- --------------------------------------------------------------------------------
Growth Investing
- --------------------------------------------------------------------------------
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly evolving industries and may not yet have reached their full potential.
The growth investor looks for indications of continued success.
14 Mid-Cap Growth Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stocks when the market or the economy is not
robust, during market downturns, or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
15 Mid-Cap Growth Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was reperesented as a bar chart in the printed material]
'90
'91
'92
'93
'94
'95
'96
'97
'98 39.28
'99 53.89
^Best quarter: Q4 '99, up 48.62% vWorst quarter: Q3 '98, down 16.76%
Year-to-date performance as of 3/31/00: up 23.87%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 11/3/97
- --------------------------------------------------------------------------------
Mid-Cap Growth Portfolio 53.89 52.97
S&P 400/BARRA Growth Index 28.74 30.28
The S&P MidCap 400/BARRA Growth Index is an unmanaged index of U.S. mid-cap
growth stocks.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes a broad-based market index of
mid-cap growth stocks. The portfolio's performance figures include all of its
expenses; the index do not include costs of investment.
16 Mid-Cap Growth Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended December 31, 1997(1) 1998 1999
- --------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or
lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 10.00 11.72 16.22
Plus: Income from investment operations
Net investment income (loss) 0.01 (0.03) (0.07)
Net gains/losses -- realized and unrealized 1.71 4.61 8.55
Subtotal: income from investment operations 1.72 4.58 8.48
Minus: Distributions to shareholders
Income dividends -- 0.01 --
Capital gain distributions -- 0.07 0.40
Subtotal: distributions to shareholders -- 0.08 0.40
-------------------------------
Equals: Share price (NAV) at end of year 11.72 16.22 24.30
- --------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income (loss), as
they actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.00(2) 1.00 1.00
Gross expenses(3) 17.73(2) 1.43 1.08
Expenses(4) 1.05(2) 1.00 1.00
Net investment income (loss) -- actual 0.83(2) (0.20) (0.40)
- --------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(5) (%) 17.20(6) 39.28 53.89
Net assets at end of year ($ x 1,000,000) 1.7 31.0 159.9
Portfolio turnover rate (%) 20 106 100
- --------------------------------------------------------------------------------
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio since its inception. From
1981 to 1997, she was an analyst and a portfolio manager at another firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio since
its inception. From 1972 to 1997, he was a portfolio manager at several other
firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.85% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Period from 11/3/97 (beginning of operations) to 12/31/97.
(2) Annualized.
(3) Shows what this ratio would have been if there had been no expense
reimbursement.
(4) Shows what expenses would have been if there had been no expense offset
arrangements.
(5) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
(6) Not annualized.
17 Mid-Cap Growth Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Partners Portfolio
- --------------------------------------------------------------------------------
"Our goal is to find companies that we believe are undervalued relative to their
earnings potential, where we see a gap between the actual price of a stock and
its intrinsic value. When a company grows in value and/or the valuation gap
closes, the success of our strategy is realized."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital.
To pursue this goal, the portfolio invests mainly in common stocks of mid- to
large-capitalization companies. The portfolio seeks to reduce risk by
diversifying among many companies and industries.
The managers look for well-managed companies whose stock prices are believed to
be undervalued.
Factors in identifying these firms may include:
o strong fundamentals, such as a company's financial, operational, and
competitive positions
o consistent cash flow
o a sound earnings record through all phases of the market cycle
The managers may also look for other characteristics in a company, such as a
strong position relative to competitors, a high level of stock ownership among
management, and a recent sharp decline in stock price that appears to be the
result of a short-term market overreaction to negative news.
The portfolio generally considers selling a stock when it reaches the managers'
target price, when it fails to perform as expected, or when other opportunities
appear more attractive.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Mid- and Large-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically performed more like small-caps than like
large-caps. Their prices can rise and fall substantially, although they have the
potential to offer attractive long-term returns.
Large companies are usually well-established. Compared to mid-cap companies,
they may be less responsive to change, but their returns have sometimes led
those of mid-cap companies, often with lower volatility.
- --------------------------------------------------------------------------------
Value Investing
- --------------------------------------------------------------------------------
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors realize their worth.
18 Partners Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
To the extent that the portfolio emphasizes mid- or large-cap stocks, it takes
on the associated risks. Mid-cap stocks tend to be more volatile than large-cap
stocks and are usually more sensitive to economic and market factors. At any
given time, one or both groups of stocks may be out of favor with investors.
With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions. To the extent that the managers sell stocks before they
reach their market peak, the portfolio may miss out on opportunities for higher
performance.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
19 Partners Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was represented as a bar chart in the printed material]
'90
'91
'92
'93
'94
'95 36.47
'96 29.57
'97 31.25
'98 4.21
'99 7.37
^Best quarter: Q4 '98, up 15.64% vWorst quarter: Q3 '99, down 14.96%
Year-to-date performance as of 3/31/00: up 0.51%
- --------------------------------------------------------------------------------
Average annual total % returns as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years 3/22/94
- --------------------------------------------------------------------------------
Partners Portfolio 7.37 21.03 17.47
S&P 500 Index 21.01 28.49 24.41
Russell 1000 Value Index 7.35 23.08 18.96
The S&P 500 is an unmanaged index of U.S. stocks.
The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes broad-based indices of the entire
U.S. equity market and of the portion of the market the portfolio focuses on.
The portfolio's performance figures include all of its expenses; the indices do
not include costs of investment.
20 Partners Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
<S> <C> <C> <C> <C> <C>
Share price (NAV) at beginning of year 9.77 13.23 16.48 20.60 18.93
Plus: Income (loss) from investment operations
Net investment income 0.11 0.10 0.12 0.20 0.11
Net gains/losses -- realized and unrealized 3.43 3.69 4.82 0.73 1.23
Subtotal: income (loss) from investment operations 3.54 3.79 4.94 0.93 1.34
Minus: Distributions to shareholders
Income dividends 0.01 0.04 0.05 0.08 0.23
Capital gain distributions 0.07 0.50 0.77 2.52 0.40
Subtotal: distributions to shareholders 0.08 0.54 0.82 2.60 0.63
------------------------------------------------------
Equals: Share price (NAV) at end of year 13.23 16.48 20.60 18.93 19.64
- ----------------------------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
Net expenses -- actual 1.09 0.95 0.86 0.84 0.87
Expenses(1) 1.09 0.95 0.86 0.84 0.87
Net investment income -- actual 0.97 0.60 0.60 1.04 0.57
- ----------------------------------------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(2) (%) 36.47 29.57 31.25 4.21 7.37
Net assets at end of year ($ x 1,000,000) 207.5 705.4 1,632.8 1,630.5 989.5
Portfolio turnover rate (%) 174 118 106 148 112
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Robert I. Gendelman and S. Basu Mullick are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Gendelman has been
manager of the portfolio since 1994, and was joined by Mullick in 1998.
Gendelman was a portfolio manager at another firm from 1992 to 1993, as was
Mullick from 1993 to 1998.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.80% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
21 Partners Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Socially Responsive Portfolio
- --------------------------------------------------------------------------------
"We believe that sound practices in areas like employment and the environment
can have a positive impact on a company's bottom line. We look for companies
that meet value investing criteria and also show a commitment to uphold or
improve their standards of corporate citizenship."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks long-term growth of capital by investing primarily in
securities of companies that meet the portfolio's financial criteria and social
policy.
To pursue this goal, the portfolio invests mainly in common stocks of mid- to
large-capitalization companies. The portfolio seeks to reduce risk by investing
in a large number of companies across many different industries.
The managers initially screen companies using value investing criteria. They
look for undervalued companies with solid balance sheets, strong management,
consistent cash flows, and other value-related factors. Among companies that
meet these criteria, the managers look for those that show leadership in three
areas:
o environmental concerns
o diversity in the work force
o progressive employment and workplace practices, and community relations
The managers typically also look at a company's record in public health and the
nature of its products. The managers judge firms on their corporate citizenship
overall, considering their accomplishments as well as their goals. While these
judgments are inevitably subjective, the portfolio endeavors to avoid companies
that derive revenues from alcohol, tobacco, gambling, or weapons, or that are
involved in nuclear power. The portfolio also does not invest in any company
that derives its total revenue primarily from non-consumer sales to the
military.
The portfolio normally invests at least 65% of its total assets in accordance
with its social policy. When a stock no longer meets the portfolio's investment
criteria, the managers will consider selling it.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Social Investing
- --------------------------------------------------------------------------------
Portfolios that follow social policies seek something in addition to economic
success. They are designed to allow investors to put their money to work and
also support companies that follow principles of good corporate citizenship.
- --------------------------------------------------------------------------------
Value Investing
- --------------------------------------------------------------------------------
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors realize their worth.
22 Socially Responsive Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
The portfolio's social policy could cause it to underperform similar portfolios
that do not have a social policy.
Among the reasons for this are:
o undervalued stocks that don't meet the social criteria could outperform
those that do
o economic or political changes could make certain companies less attractive
for investment
o the social policy could cause the fund to sell or avoid stocks that
subsequently perform well
To the extent that the portfolio emphasizes mid- or large-cap stocks, it takes
on the associated risks. Mid-cap stocks tend to be somewhat riskier than
large-cap stocks, and are usually more sensitive to economic and market factors.
At any given time, one or both groups of stocks may be out of favor with
investors.
With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss. These investments are
not subject to the portfolio's social policy.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
23 Socially Responsive Portfolio
<PAGE>
PERFORMANCE OF A SIMILAR FUND
- --------------------------------------------------------------------------------
Because the portfolio commenced investment operations on February 18, 1999, it
does not have full calendar year performance to report in this prospectus. For
the period from the portfolio's inception (2/18/99) through December 31, 1999
and March 31, 2000 the portfolio achieved a total return of 15.40% and an
annualized total return of 12.30%, respectively.
However, the portfolio has an investment objective, policies, limitations, and
strategies substantially similar to those of, and the same portfolio manager as,
another mutual fund managed by Neuberger Berman Management called the Neuberger
Berman Socially Responsive Fund. The following table shows average annual total
returns for that fund, assuming reinvestment of all distributions, as well as
the Standard & Poor's 500 Index, which is pertinent to the Neuberger Berman
Socially Responsive Fund. This performance information does not reflect
insurance product expenses.
Average annual total % returns as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years 3/16/94
- --------------------------------------------------------------------------------
Socially Responsive Fund 7.04 20.32 16.58
S&P 500 Index 21.01 28.49 25.00
The S&P 500 is an unmanaged index of U.S. stocks.
- --------------------------------------------------------------------------------
The performance of Neuberger Berman Socially Responsive Fund reflects that
fund's expense ratio, and does not reflect any expenses or charges that apply to
variable contracts. The expense ratio of the portfolio is higher than the
expense ratio of the Neuberger Berman Socially Responsive Fund. Therefore, if
the expense ratio of the portfolio had been factored into this presentation,
performance would be lower. In addition, insurance expenses and charges would
reduce performance. Although the objective, policies, limitations and strategies
of the portfolio are substantially similar to that of the Neuberger Berman
Socially Responsive Fund, the portfolio is a distinct mutual fund and may have
different investment returns, portfolio holdings, and risk/return
characteristics than Neuberger Berman Socially Responsive Fund. The historical
performance of Neuberger Berman Socially Responsive Fund or the portfolio is not
indicative of future performance of the portfolio.
This performance representation relies on data supplied by Neuberger Berman
Management or derived by Neuberger Berman Management from statistical services,
reports or other sources it believes to be reliable.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Janet Prindle, a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC, joined the latter firm in 1977. She has been
managing assets using social criteria since 1990, and has been the manager of
the portfolio since its inception.
Robert Ladd and Ingrid Saukaitis are Vice Presidents of Neuberger Berman
Management and have been Associate Managers of the portfolio since its
inception. Ladd has been a portfolio manager at the firm since 1992 and is a
Managing Director of Neuberger Berman, LLC; Saukaitis was project director for a
social research group from 1995 to 1997.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the period since inception
through December 31, 1999, the management/administration fees paid to Neuberger
Berman Management were 0.85% of average daily net assets, on an annualized
basis.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
24 Socially Responsive Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Period Ended December 31, 1999(1)
- --------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or
lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 10.00
Plus: Income from investment operations
Net investment income 0.03
Net gains/losses -- realized and unrealized 1.51
Subtotal: income from investment operations 1.54
Minus: Distributions to shareholders
Income dividends --
Subtotal: distributions to shareholders --
-------------------------
Equals: Share price (NAV) at end of year 11.54
- --------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.53(2)
Gross expenses(3) 9.04(2)
Expense(4) 1.68(2)
Net investment income-- actual 0.35(2)
- --------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(5)(%) 15.40(6)
Net assets at end of year ($ x 1,000,000) 1.3
Portfolio turnover rate (%) 72
- --------------------------------------------------------------------------------
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
(1) Period from 2/18/99 (beginning of operations) to 12/31/99.
(2) Annualized.
(3) Shows what this ratio would have been if there had been no expense
reimbursement.
(4) Shows what expenses would have been if there had been no expense offset
arrangements.
(5) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
(6) Not annualized.
25 Socially Responsive Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
International Portfolio
- --------------------------------------------------------------------------------
"In identifying attractive stocks from among the many thousands currently
available outside the U.S., it's important to have a clear strategy. This
portfolio uses a combination of growth and value criteria, while also
considering larger scale economic factors."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks long-term growth of capital by investing primarily in common
stocks of foreign companies.
To pursue this goal, the portfolio invests mainly in foreign companies of any
size, including companies in developed and emerging industrialized markets. The
portfolio defines a foreign company as one that is organized outside of the
United States and conducts the majority of its business abroad.
The portfolio seeks to reduce risk by diversifying among many industries.
Although it has the flexibility to invest a significant portion of its assets in
one country or region, it generally intends to remain well-diversified across
countries and geographical regions.
In picking stocks, the manager looks for well-managed companies that show
potential for above-average growth or whose stock prices are believed to be
undervalued. Factors in identifying these firms may include strong fundamentals,
such as attractive cash flows and balance sheets, as well as prices that are
reasonable in light of projected earnings growth. The manager also considers the
outlooks for various countries and regions around the world, examining economic,
market, social, and political conditions.
When a stock no longer meets the portfolio's investment criteria, the manager
may sell it.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Foreign Stocks
- --------------------------------------------------------------------------------
There are many promising opportunities for investment outside the U.S. These
foreign markets often respond to different factors, and therefore tend to follow
cycles that are different from each other.
For this reason, many investors put a portion of their portfolio in foreign
investments as a way of gaining further diversification. While foreign stock
markets can be risky, investors gain an opportunity to add potential long-term
growth.
- --------------------------------------------------------------------------------
Growth vs. Value Investing
- --------------------------------------------------------------------------------
Value investors seek stocks trading at below average market prices based on
earnings, book value or other financial measures before other investors discover
their worth. Growth investors seek companies that are already successful but may
not have reached their full potential.
26 International Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in international
stock markets. The behavior of these markets is unpredictable, particularly in
the short term. Because of this, the value of your investment will rise and
fall, sometimes sharply, and you could lose money.
Foreign stocks are riskier than comparable U.S. stocks. This is in part because
foreign markets are less developed and foreign governments, economies, laws, tax
codes and securities firms may be less stable. There is also a higher chance
that key information will be unavailable, incomplete, or inaccurate. As a
result, foreign stocks can fluctuate more widely in price than comparable U.S.
stocks, and they may also be less liquid. These risks are generally greater in
emerging markets. Over a given period of time, foreign stocks may underperform
U.S. stocks -- sometimes for years. The portfolio could also underperform if the
manager invests in countries or regions whose economic performance falls short.
Changes in currency exchange rates bring an added dimension of risk. Currency
fluctuations could erase investment gains or add to investment losses.
To the extent that the portfolio invests in a type of stock, it takes on the
risks associated with that type. Growth stocks may suffer more than value stocks
during market downturns, while value stocks may remain undervalued. Mid- and
small-cap stocks tend to be less liquid and more volatile than large-cap stocks.
Any type of stock may underperform any other during a given period.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. The portfolio may use derivatives for hedging and for speculation.
Hedging could reduce the portfolio's losses from currency fluctuations, but
could also reduce its gains. A derivative instrument could fail to perform as
expected. Any speculative investment could cause a loss for the portfolio.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
27 International Portfolio
<PAGE>
PERFORMANCE OF A SIMILAR FUND
- --------------------------------------------------------------------------------
Because the portfolio had not commenced investment operations as of December 31,
1999, it does not have performance to report in this prospectus.
However, the portfolio has an investment objective, policies, limitations, and
strategies substantially similar to those of, and the same portfolio manager as,
another mutual fund managed by Neuberger Berman Management called the Neuberger
Berman International Fund. The following table shows average annual total
returns for the Neuberger Berman International Fund, assuming reinvestment of
all distributions, as well as the EAFE Index, which is pertinent to the
Neuberger Berman International Fund. This performance information does not
reflect insurance product expenses.
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years (6/15/94)
- --------------------------------------------------------------------------------
Neuberger Berman International Fund 65.86 20.29 17.96
EAFE Index 27.30 13.15 11.67
The EAFE is an unmanaged index of stocks from Europe, Australasia, and the Far
East.
- --------------------------------------------------------------------------------
The performance of Neuberger Berman International Fund reflects that fund's
expense ratio, and does not reflect any expenses or charges that apply to
variable contracts. The estimated expense ratio of the portfolio is higher than
the expense ratio of the Neuberger Berman International Fund. Therefore,
if the estimated expense ratio of the portfolio had been factored into this
presentation, performance would be lower. In addition, insurance expenses and
charges would reduce performance. Although the objective, policies, limitations
and strategies of the portfolio are substantially similar to that of the
Neuberger Berman International Fund, the portfolio is a distinct mutual fund and
may have different investment returns, portfolio holdings, and risk/return
characteristics than Neuberger Berman International Fund. The historical
performance of Neuberger Berman International Fund is not indicative of future
performance of the portfolio.
This performance representation relies on data supplied by Neuberger Berman
Management or derived by Neuberger Berman Management from statistical services,
reports or other sources it believes to be reliable.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Valerie Chang is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. In 1996 she joined the firm and became
assistant manager of the portfolio. She began her career in 1990 in banking, and
from 1995 to 1996 was a senior securities analyst at another firm.
Benjamin E. Segal is a Vice President of Neuberger Berman Management and a Vice
President of Neuberger Berman, LLC and an Associate Manager of the portfolio. He
was an assistant portfolio manager at another firm from 1997 to 1998. Prior to
1997, he held positions in international finance and consulting.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services.
The portfolio pays the following fees to Neuberger Berman Management, all
expressed as a percentage of the portfolio's average daily net assets: for
investment management, 0.85% of the first $250 million; 0.825% of the next $250
million; 0.80% of the next $250 million; 0.775% of the next $250 million; 0.75%
of the next $500 million; and 0.725% on assets over $1.5 billion; and 0.30% for
administration. The portfolio's management agreements are written contracts and
may be altered under certain circumstances. Neuberger Berman Management has
agreed to limit the portfolio's expenses when certain annual operating expenses
of the portfolio exceed the agreed-upon limit. See the Statement of Additional
Information for more details.
28 International Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------
"Historically, limited maturity portfolios have been able to deliver much of the
yield available in the investment-grade bond market while offering reduced share
price fluctuation. With this in mind, we strive to manage the portfolio with an
emphasis on yield and risk management."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks the highest available current income consistent with
liquidity and low risk to principal; total return is a secondary goal.
To pursue these goals, the portfolio invests mainly in investment-grade bonds
and other debt securities from U.S. government and corporate issuers. These may
include mortgage- and asset-backed securities. To enhance yield and add
diversification, the portfolio may invest up to 10% of net assets in securities
that are below investment grade, provided that, at the time of purchase, they
are rated at least B by Moody's or Standard and Poor's or, if unrated by either
of these, are believed by the managers to be of comparable quality. When the
managers believe there are attractive opportunities in foreign markets, the
portfolio may also invest in foreign debt securities to enhance yield and/or
total return.
The portfolio seeks to reduce credit risk by diversifying among many issuers and
different types of securities. Although it may invest in securities of any
maturity, under normal circumstances it maintains an average portfolio duration
of four years or less.
The managers monitor national trends in the corporate and government securities
markets, as well as a range of economic and financial factors. The managers look
for securities that appear underpriced compared to securities of similar
structure and credit quality, and securities that appear likely to have their
credit ratings raised. In choosing lower-rated securities, the managers look for
bonds from issuers whose financial health appears comparatively strong but that
are smaller or less well known to investors.
- --------------------------------------------------------------------------------
Duration
- --------------------------------------------------------------------------------
Duration is a measurement of a bond investment's sensitivity to changes in
interest rates. Typically, with a 1% change in interest rates, an investment's
value may be expected to move in the opposite direction approximately 1% for
each year of its duration.
- --------------------------------------------------------------------------------
Bond Ratings
- --------------------------------------------------------------------------------
Most large issuers obtain ratings for their bonds from one or more independent
rating agencies, although many bonds of all quality levels remain unrated.
Bonds in the top four categories of credit quality are considered investment
grade. Bonds in the fifth or sixth category (BB/Ba or B) are called lower-rated,
or non- investment-grade. Many of these "junk bonds" are actually issued by
reputable companies, and offer attractive yields.
29 Limited Maturity Bond Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the
investment-grade bond market. The value of your investment will rise and fall,
and you could lose money.
The portfolio's yield and total return will change with interest rate movements.
When interest rates rise, the portfolio's share price will typically fall. The
portfolio's sensitivity to this risk will increase with any increase in the
portfolio's duration.
A downgrade or default affecting any of the portfolio's securities would affect
the portfolio's performance. Performance could also be affected if unexpected
interest rate trends cause the portfolio's mortgage- or asset-backed securities
to be paid off substantially earlier or later than expected.
Foreign securities could add to the ups and downs of the portfolio's share
price, because foreign markets tend to be more volatile and currency exchange
rates fluctuate.
Over time, the portfolio may produce a lower return than stock investments and
less conservative bond investments. Although the portfolio's average return has
outpaced inflation over the long term, it may not always do so.
Due to the portfolio's limited duration and the need to sometimes change
allocation among sectors, the portfolio may have a high turnover rate, which can
mean increased transaction costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
The use of certain derivatives to hedge interest rate risk or produce income
could affect portfolio performance if the derivatives do not perform as
expected.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term debt instruments. This could help the portfolio avoid
losses but may mean lost opportunities.
30 Limited Maturity Bond Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was represented as a bar chart in the printed material.]
'90 8.32
'91 11.34
'92 5.18
'93 6.63
'94 -0.15
'95 10.94
'96 4.31
'97 6.74
'98 4.39
'99 1.48
^ Best quarter: Q4 '91, up 4.22% v Worst quarter: Q1 '94, down 1.08%
Year-to-date performance as of 3/31/00: up 0.71%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio 1.48 5.52 5.86
Merrill Lynch 1-3 Year Treasury Index 3.06 6.51 6.59
The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index of U.S.
Treasuries with maturities between 1 and 3 years.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
The table compares the portfolio's returns to those of a broad-based market
index. The portfolio's performance figures include all of its expenses; the
index does not include costs of investment.
To obtain the portfolio's current yield, call 800.877.9700. The current yield is
the portfolio's net income over a recent 30-day period expressed as an annual
rate of return.
31 Limited Maturity Bond Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, 1995 1996 1997 1998 1999
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 14.02 14.71 14.05 14.12 13.82
Plus: Income (loss) from investment operations
Net investment income (loss) 0.82 0.92 0.88 0.80 0.77
Net gains/losses -- realized and unrealized 0.65 (0.34) 0.02 (0.21) (0.58)
Subtotal: income (loss) from investment operations 1.47 0.58 0.90 0.59 0.19
Minus: Distributions to shareholders
Income dividends 0.78 1.24 0.83 0.89 0.77
Subtotal: distributions to shareholders 0.78 1.24 0.83 0.89 0.77
------------------------------------------
Equals: Share price (NAV) at end of year 14.71 14.05 14.12 13.82 13.24
- --------------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
Net expenses -- actual 0.71 0.78 0.77 0.76 0.76
Expenses(1) 0.71 0.78 0.77 0.76 0.76
Net investment income -- actual 5.99 6.01 6.27 5.83 5.81
- --------------------------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(2) (%) 10.94 4.31 6.74 4.39 1.48
Net assets at end of year ($ x 1,000,000) 238.9 256.9 251.1 277.3 248.4
Portfolio turnover rate (%) 105 132 86 44 139
- --------------------------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio since its inception.
Catherine Waterworth is a Vice President of Neuberger Berman Management and
Neuberger Berman, LLC. She has co-managed the portfolio since joining the firm
in December 1998. From 1995-98 she was a managing director of high grade fixed
income at a major investment firm.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/ administration fees paid to Neuberger Berman Management were
0.65% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
32 Limited Maturity Bond Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Liquid Asset Portfolio
- --------------------------------------------------------------------------------
"In managing this portfolio we focus on the three main goals investors look for
in a money market investment: liquidity, stability and high current income. At
the same time, we seek to maintain high standards for credit quality, in some
cases higher than required by law."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks the highest available current income consistent with safety
and liquidity.
To pursue this goal, the portfolio invests in high quality money market
securities. These securities may be from U.S. or foreign issuers, including
governments and their agencies, banks, and corporations, but in all cases must
be denominated in U.S. dollars. The portfolio may invest significantly in
commercial paper, and may invest more than 25% of total assets in CDs and
similar time deposits and banker's acceptances issued by U.S. banks. The
portfolio may invest to a lesser extent in securities issued by banks that do
not represent deposits. The portfolio may also invest in repurchase agreements.
The portfolio seeks to maintain a stable $1.00 share price and seeks to reduce
credit risk by diversifying among many issuers of money market securities.
The managers monitor a range of economic and financial factors, in order to
weigh the yields of money market securities of various maturities against their
levels of interest rate and credit risk. Based on their analysis, the managers
invest the portfolio's assets in a mix of money market securities that is
intended to provide as high a yield as possible without violating the
portfolio's credit quality policies or jeopardizing the stability of its share
price.
- --------------------------------------------------------------------------------
Money Market Funds
- --------------------------------------------------------------------------------
Money market funds are subject to federal regulations designed to help maintain
liquidity and a stable share price. The regulations set strict standards for
credit quality and maturity (397 days or less for individual securities, 90 days
or less on average for the portfolio overall).
The regulations also require money market funds to limit investments to the top
two rating categories of credit quality. This portfolio typically exceeds this
requirement by investing only in top-tier securities.
33 Liquid Asset Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on interest rates. When interest
rates fall, the portfolio's yields will typically fall as well. The portfolio's
emphasis on securities in the first tier of credit quality may mean that its
yields are somewhat lower than those available from certain other money market
mutual funds. Over time, the portfolio may produce a lower return than bond or
stock investments. Although the portfolio's average yield has outpaced inflation
over the long term, it may not always do so. Despite its emphasis on first-tier
securities, the portfolio is subject to some credit risk. This is the risk that
issuers may fail, or become less able, to make payments when due.
Because the portfolio may invest more than 25% of total assets in securities
issued by U.S. banks, its performance could be affected by factors influencing
the health of the banking industry. These may include economic trends, industry
competition and governmental actions, as well as factors affecting the financial
stability of borrowers. The bank securities in which the portfolio may invest
typically are not insured by the federal government. Securities that do not
represent deposits have lower priority in the bank's capital structure than
those that do.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
Although the portfolio has maintained a stable share price since its inception,
the share price could fluctuate, meaning that there is a chance that you could
lose money by investing in the portfolio.
While the portfolio may hold securities that carry U.S. government guarantees,
these guarantees do not extend to shares of the portfolio itself.
34 Liquid Asset Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was represented as a bar chart in the printed material.]
'90 7.55
'91 5.61
'92 3.25
'93 2.43
'94 3.46
'95 5.04
'96 4.52
'97 4.71
'98 4.66
'99 4.27
^ Best quarter: Q3 '90, up 1.85% v Worst quarter: Q2 '93, up 0.56%
Year-to-date performance as of 3/31/00: up 1.22%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Liquid Asset Portfolio 4.27 4.64 4.54
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price, if any should occur. The figures assume that all
distributions were reinvested in the portfolio, and include all portfolio
expenses.
To obtain the portfolio's current yield, call 800.366.6264. The current yield is
the portfolio's net income over a recent seven-day period expressed as an annual
rate of return.
35 Liquid Asset Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per-share data ($)
Data apply to a single share throughout each year indicated. You can see what
the fund earned (or lost), what it distributed to investors, and how its share
price changed.
Share price (NAV) at beginning of year 0.9997 1.0000 0.9999 0.9999 0.9999
Plus: Income from investment operations
Net investment income 0.0493 0.0443 0.0461 0.0456 0.0419
Net gains/losses 0.0003 (0.0001)(1) -- -- --
Subtotal: income from investment operations 0.0496 0.0442 0.0461 0.0456 0.0419
Minus: Distributions to shareholders
Income dividends 0.0493 0.0443 0.0461 0.0456 0.0419
Subtotal: distributions to shareholders 0.0493 0.0443 0.0461 0.0456 0.0419
----------------------------------------------
Equals: Share price (NAV) at end of year 1.0000 0.9999 0.9999 0.9999 0.9999
- ----------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.01 1.00 1.00 1.00 1.00
Gross Expenses(2) 1.25 1.21 1.12 1.14 1.09
Expenses(3) 1.02 1.01 1.01 1.01 1.01
Net investment income -- actual 4.90 4.44 4.61 4.56 4.21
- ----------------------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested.
Total return(4) (%) 5.04 4.52 4.71 4.66 4.27
Net assets at end of year ($ x 1,000,000) 31.9 13.5 13.4 14.8 25.8
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio since its inception.
Josephine Mahaney is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. She joined the firm in 1976 and has
co-managed the portfolio since 1992.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/ administration fees paid to Neuberger Berman Management were
0.65% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) May not accord with the change in aggregate gains and losses in securities
for the year because of the timing of sales and repurchases of portfolio
shares.
(2) Shows what this ratio would have been if there had been no expense
reimbursement.
(3) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(4) Would have been lower if Neuberger Berman Management had not reimbursed
certain expenses. Does not reflect charges and other expenses that apply
to the separate account or the related insurance policies.
36 Liquid Asset Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolios described in this prospectus are designed for use with certain
variable insurance contracts and, in the case of Balanced Portfolio, certain
qualified plans as well. Because shares of the portfolios are held by the
insurance companies or qualified plans involved, you will need to follow the
instructions provided by your insurance company or qualified plan for matters
involving allocations to these portfolios.
Under certain circumstances, the portfolios reserve the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolios are offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance -- and to
qualified plans, groups with different interests will share the portfolios. Due
to differences of tax treatment and other considerations among these
shareholders, it is possible (although not likely) that the interests of the
shareholders might sometimes be in conflict. For these reasons, the trustees of
the portfolios watch for the existence of any material irreconcilable conflicts
and will determine what action, if any, should be taken in the event of a
conflict. If there is a conflict, it is possible that to resolve it, one or more
insurance company separate accounts or qualified plans might be compelled to
withdraw its investment in a portfolio. While this might resolve the conflict,
it also might force the portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of a portfolio, the share price is that portfolio's
net asset value per share.
The portfolios are open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company or plan
administrator to find out by what time your transaction request must be received
in order to be processed the same day. Each portfolio normally calculates its
share price as of the end of regular trading on the Exchange on business days,
usually 4:00 p.m. eastern time. Depending on when your insurance company or plan
administrator accepts transaction requests, it's possible that the portfolio's
share price could change on days when you are unable to buy or sell shares.
Because foreign markets may be open on days when U.S. markets are closed, the
value of foreign securities owned by a portfolio could change on days when you
can't buy or sell portfolio shares. The portfolio's share price, however, will
not change until the next time it is calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
A portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of a
portfolio's securities changes every day, the share price usually changes as
well (an exception is the Liquid Asset Portfolio, which seeks to maintain a
stable $1.00 share price).
The portfolios value equity securities by using market prices, and value debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolios may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value. Securities in the Liquid Asset
Portfolio are valued using a constant amortization method that is in keeping
with that portfolio's efforts to maintain a stable share price.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When a portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. A
portfolio may also use these methods to value certain types of illiquid
securities.
37 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolios invested through a two-tier master/feeder
structure. Rather than investing directly in securities, each portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolios converted to a conventional one-tier
structure. Each portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, each
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as some of the portfolios, there may be certain differences between
the portfolios and these other funds in matters such as size, cash flow patterns
and tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolios and their shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- Each portfolio pays out to shareholders of record any net
income and net capital gains. Ordinarily, the portfolios make distributions once
a year (in February), except for the Liquid Asset Portfolio, which ordinarily
declares income dividends daily and pays them once a month. All dividends and
other distributions received by shareholders of record are automatically
reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus or qualified plan documentation. Consult them for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolios and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
Each portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolios, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and qualified plan participants, such as providing information
about the portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolios for making these payments.
38 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolios.
Because the portfolios are offered through certain variable insurance contracts
and qualified plans, they are subject to special diversification standards
beyond those that normally apply to mutual funds. If the underlying assets of a
portfolio fail to meet the special standards, you could be subject to adverse
tax consequences -- for example, some of the income earned by a portfolio could
generate a current tax liability.
The managers of each portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolios could be affected by problems relating
to the conversion of European currencies into the Euro, which extends from
1/1/99 to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolios will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
39 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on any of these portfolios, you can request a free
copy of the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on these portfolios, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about each portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0060 05/00r
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Mid-Cap Growth Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Mid-Cap Growth Portfolio ................................................... 2
Your Investment
Buying and Selling Portfolio Shares ........................................ 6
Share Prices ............................................................... 6
Portfolio Structure ........................................................ 7
Distributions and Taxes .................................................... 7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Mid-Cap Growth Portfolio
- --------------------------------------------------------------------------------
"We want to own today's leading mid-cap companies that have the potential to
become tomorrow's Fortune 500. To do this, we screen for financially sound, high
growth companies in emerging or rapidly evolving industries that possess records
of sustained profitability. We also look for companies with a history of
positive earnings surprises that we expect will continue for some time."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital.
To pursue this goal, the portfolio invests mainly in common stocks of
mid-capitalization companies. The portfolio seeks to reduce risk by diversifying
among many companies, industries and sectors. The managers look for fast-growing
companies that are in new or rapidly evolving industries.
Factors in identifying these firms may include:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
The managers may also look for other characteristics in a company, such as
financial strength, a strong position relative to competitors and a stock price
that is reasonable in light of its growth rate. The managers follow a
disciplined selling strategy, and may sell a stock from the portfolio when it
reaches a target price, fails to perform as expected, or appears substantially
less desirable than another stock.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Mid-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
- --------------------------------------------------------------------------------
Growth Investing
- --------------------------------------------------------------------------------
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly evolving industries and may not yet have reached their full potential.
The growth investor looks for indications of continued success.
2 Mid-Cap Growth Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stocks when the market or the economy is not
robust, during market downturns, or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Mid-Cap Growth Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
[The following table was represented by a bar chart in the printed material.]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90
'91
'92
'93
'94
'95
'96
'97
'98 39.28
'99 53.89
^ Best quarter: Q4 `99, up 48.62% v Worst quarter: Q3 `98, down 16.76%
Year-to-date performance as of 3/31/00: up 23.87%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS AS OF 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 11/3/97
- --------------------------------------------------------------------------------
Mid-Cap Growth Portfolio 53.89 52.97
S&P MidCap 400/BARRA Growth Index 28.74 30.28
The S&P MidCap 400/BARRA Growth Index is an unmanaged index of U.S. mid-cap
growth stocks.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes a broad-based market index of
mid-cap growth stocks. The portfolio's performance figures include all of its
expenses; the index does not include costs of investment.
4 Mid-Cap Growth Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year Ended December 31, 1997(1) 1998 1999
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or
lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 10.00 11.72 16.22
Plus: Income from investment operations
Net investment income (loss) 0.01 (0.03) (0.07)
Net gains/losses--realized and unrealized 1.71 4.61 8.55
Subtotal: income from investment operations 1.72 4.58 8.48
Minus: Distributions to shareholders
Income dividends -- 0.01 --
Capital gain distributions -- 0.07 0.40
Subtotal: distributions to shareholders -- 0.08 0.40
-----------------------------------
Equals: Share price (NAV) at end of year 11.72 16.22 24.30
<CAPTION>
- ---------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income (loss), as
they actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
<S> <C> <C> <C>
Net expenses--actual 1.00(2) 1.00 1.00
Gross expenses(3) 17.73(2) 1.43 1.08
Expenses(4) 1.05(2) 1.00 1.00
Net investment income (loss)--actual 0.83(2) (0.20) (0.40)
<CAPTION>
- ---------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
<S> <C> <C> <C>
Total return(5) (%) 17.20(6) 39.28 53.89
Net assets at end of year ($ x 1,000,000) 1.7 31.0 159.9
Portfolio turnover rate (%) 20 106 100
- ---------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst &Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio since its inception. From
1981 to 1997, she was an analyst and a portfolio manager at another firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio since
its inception. From 1972 to 1997, he was a portfolio manager at several other
firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.85% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Period from 11/3/97 (beginning of operations) to 12/31/97.
(2) Annualized.
(3) Shows what this ratio would have been if there had been no expense
reimbursement.
(4) Shows what expenses would have been if there had been no expense offset
arrangements.
(5) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
(6) Not annualized.
5 Mid-Cap Growth Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolios are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolios. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Balanced Portfolio
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0067 05/00
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
Neuberger Berman [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Guardian Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock portfolio
o carrries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc.(C)2000 Neuberger Berman Management Inc.
Contents
- --------------------------------------------------------------------------------
The Portfolio
Guardian Portfolio.............................................................2
Your Investment
Buying and Selling Portfolio Shares............................................6
Share Prices...................................................................6
Portfolio Structure............................................................7
Distributions and Taxes........................................................7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Guardian Portfolio
- --------------------------------------------------------------------------------
"We look for established companies whose intrinsic value, by our measure, has
yet to be discovered by the majority of investors. In managing overall risk, a
conscious effort is made to determine the risk/reward scenario of each
individual holding as well as its impact at the portfolio level."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks long-term growth of capital; current income is a secondary
goal.
To pursue these goals, the portfolio invests mainly in common stocks of
large-capitalization companies. Because the managers tend to find that
undervalued stocks may be more common in certain sectors of the economy at a
given time, the portfolio may emphasize those sectors.
The portfolio seeks to reduce risk by diversifying among a large number of
companies across many different industries and economic sectors, and by managing
its overall exposure to a wide variety of risk factors.
The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:
o solid balance sheets
o above-average returns
o low valuation measures, such as price-to-earnings ratios
o strong competitive positions
When a stock no longer meets the portfolio's investment criteria, the managers
may sell it.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Large-Cap Stocks
- --------------------------------------------------------------------------------
Large companies are usually well-established. They may have a variety of
products and business lines and a sound financial base that can help them
weather bad times.
Compared to smaller companies, large companies can be less responsive to changes
and opportunities. At the same time, their returns have sometimes led those of
smaller companies, often with lower volatility.
- --------------------------------------------------------------------------------
Value Investing
- --------------------------------------------------------------------------------
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors begin to realize their worth.
2 Guardian Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
At times, large-cap stocks may lag other types of stocks in performance, which
could cause the portfolio to perform worse than certain other funds over a given
time period.
To the extent that a value approach dictates an emphasis on certain sectors of
the market at any given time, the portfolio's performance is likely to be
disproportionately affected by the economic, market, and other developments that
may influence those sectors. The portfolio's performance may also suffer if a
sector does not perform as the portfolio managers expected.
With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Guardian Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out performance over various lengths of time, and compares the
return with that of a broad measure of market performance. This information is
based on past performance; it's not a prediction of future results. This
performance information does not reflect insurance product expenses.
[The Following Data was Depicted as a Bar Graph]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
- --------------------------------------------------------------------------------
31.67 14.93
- --------------------------------------------------------------------------------
^ Best quarter: Q1 `98, up 31.76%
v Worst quarter: Q3 `98, down 22.27%
Year-to-date performance as of 3/31/00: up 5.26%
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 11/3/97
- --------------------------------------------------------------------------------
Guardian Portfolio 14.93 23.93
S&P 500 Index 21.01 26.35
Russell 1000 Value Index 7.35 14.28
The S&P 500 is an unmanaged index of U.S. stocks.
The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes broad-based indices of the entire
U.S. equity market and of the portion of the market the portfolio focuses on.
The portfolio's performance figures include all of its expenses; the indices do
not include costs of investment.
4 Guardian Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, 1997(1) 1998 1999
- ----------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
<S> <C> <C> <C>
Share price (NAV)at beginning of year 10.00 10.52 13.84
Plus: Income from investment operations
Net investment income 0.01 0.11 0.09
Net gains/losses -- realized and unrealized 0.51 3.22(2) 1.97
Subtotal: income from investment operations 0.52 3.33 2.06
Minus: Distributions to shareholders
Income dividends -- 0.01 0.05
Subtotal: distributions to shareholders -- 0.01 0.05
-----------------------------
Equals: Share price (NAV) at end of year 10.52 13.84 15.85
- ----------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.00(3) 1.00 1.00
Gross expenses(4) 30.06(3) 1.14 0.98
Expenses(5) 1.06(3) 1.00 1.00
Net investment income -- actual 0.98(3) 0.80 0.61
- ----------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(6) (%) 5.20(7) 31.67 14.93
Net assets at end of year ($ x 1,000,000) 0.6 74.1 121.1
Portfolio turnover rate (%) 12 197 107
- ----------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
1 Period from 11/3/97 (beginning of operations) to 12/31/97.
2 May not accord with the change in aggregate gains and losses in securities
for the fiscal period because of the timing of sales and repurchases of
portfolio shares in relation to fluctuating market values of the
portfolio.
3 Annualized.
4 Shows what this ratio would have been if there had been no expense
reimbursement/repayment.
5 Shows what expenses would have been if there had been no expense offset
arrangements.
6 Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
7 Not annualized.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Kevin L. Risen and Allan R. White III are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Risen has co-managed
the portfolio's assets since its inception. He joined Neuberger Berman in 1992
as an analyst, and has been a portfolio manager since 1995. White has been
co-manager of the portfolio since September 1998, when he joined the firm. From
1989 to 1998 he was a portfolio manager at another firm.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.85% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
5 Guardian Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolios. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0068 05/00
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Socially Responsive Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc.(C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Socially Responsive Portfolio .............................................. 2
Your Investment
Buying and Selling Portfolio Shares ........................................ 6
Share Prices ............................................................... 6
Portfolio Structure ........................................................ 7
Distributions and Taxes .................................................... 7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Socially Responsive Portfolio
- --------------------------------------------------------------------------------
"We believe that sound practices in areas like employment and the environment
can have a positive impact on a company's bottom line. We look for companies
that meet value investing criteria and also show a commitment to uphold or
improve their standards of corporate citizenship."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks long-term growth of capital by investing primarily in
securities of companies that meet the portfolio's financial criteria and social
policy.
To pursue this goal, the portfolio invests mainly in common stocks of mid- to
large-capitalization companies. The portfolio seeks to reduce risk by investing
in a large number of companies across many different industries.
The managers initially screen companies using value investing criteria. They
look for undervalued companies with solid balance sheets, strong management,
consistent cash flows, and other value-related factors. Among companies that
meet these criteria, the managers look for those that show leadership in three
areas:
o environmental concerns
o diversity in the work force
o progressive employment and workplace practices, and community relations
The managers typically also look at a company's record in public health and the
nature of its products. The managers judge firms on their corporate citizenship
overall, considering their accomplishments as well as their goals. While these
judgments are inevitably subjective, the portfolio endeavors to avoid companies
that derive revenue from alcohol, tobacco, gambling, or weapons, or that are
involved in nuclear power. The portfolio also does not invest in any company
that derives its total revenue primarily from non-consumer sales to the
military.
The portfolio normally invests at least 65% of its total assets in accordance
with its social policy. When a stock no longer meets the portfolio's investment
criteria, the managers will consider selling it.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Social Investing
- --------------------------------------------------------------------------------
Portfolios that follow social policies seek something in addition to economic
success. They are designed to allow investors to put their money to work and
also support companies that follow principles of good corporate citizenship.
- --------------------------------------------------------------------------------
Value Investing
- --------------------------------------------------------------------------------
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors realize their worth.
2 Socially Responsive Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
The portfolio's social policy could cause it to underperform similar portfolios
that do not have a social policy.
Among the reasons for this are:
o undervalued stocks that don't meet the social criteria could outperform
those that do
o economic or political changes could make certain companies less attractive
for investment
o the social policy could cause the fund to sell or avoid stocks that
subsequently perform well
To the extent that the portfolio emphasizes mid- or large-cap stocks, it takes
on the associated risks. Mid-cap stocks tend to be somewhat riskier than
large-cap stocks, and are usually more sensitive to economic and market factors.
At any given time, one or both groups of stocks may be out of favor with
investors.
With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss. These investments are
not subject to the portfolio's social policy.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Socially Responsive Portfolio
<PAGE>
PERFORMANCE OF A SIMILAR FUND
- --------------------------------------------------------------------------------
Because the portfolio commenced investment operations on February 18, 1999, it
does not have full calendar year performance to report in this prospectus. For
the period from the portfolio's inception (2/18/99) through December 31, 1999
and March 31, 2000 the portfolio achieved a total return of 15.40% and an
annualized total return of 12.30%, respectively.
However, the portfolio has an investment objective, policies, limitations, and
strategies substantially similar to those of, and the same portfolio manager as,
another mutual fund managed by Neuberger Berman Management called the Neuberger
Berman Socially Responsive Fund. The following table shows average annual total
returns for that fund, assuming reinvestment of all distributions, as well as
the Standard & Poor's 500 Index, which is pertinent to the Neuberger Berman
Socially Responsive Fund. This performance information does not reflect
insurance product expenses.
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years 3/16/94
- --------------------------------------------------------------------------------
Socially Responsive Fund 7.04 20.32 16.58
S&P 500 Index 21.01 28.49 25.00
The S&P 500 is an unmanaged index of U.S. stocks.
- --------------------------------------------------------------------------------
The performance of Neuberger Berman Socially Responsive Fund reflects that
fund's expense ratio, and does not reflect any expenses or charges that apply to
variable contracts. The expense ratio of the portfolio is higher than the
expense ratio of the Neuberger Berman Socially Responsive Fund. Therefore, if
the expense ratio of the portfolio had been factored into this presentation,
performance would be lower. In addition, insurance expenses and charges would
reduce performance. Although the objective, policies, limitations and strategies
of the portfolio are substantially similar to that of the Neuberger Berman
Socially Responsive Fund, the portfolio is a distinct mutual fund and may have
different investment returns, portfolio holdings, and risk/return
characteristics than Neuberger Berman Socially Responsive Fund. The historical
performance of Neuberger Berman Socially Responsive Fund or the portfolio is not
indicative of future performance of the portfolio.
This performance representation relies on data supplied by Neuberger Berman
Management or derived by Neuberger Berman Management from statistical services,
reports or other sources it believes to be reliable.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Janet Prindle, a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC joined the latter firm in 1977. She has been
managing assets using social criteria since 1990, and has been the manager of
the portfolio since its inception.
Robert Ladd and Ingrid Saukaitis are Vice Presidents of Neuberger Berman
Management and have been Associate Managers of the portfolio since its
inception. Ladd has been a portfolio manager at the firm since 1992 and is a
Managing Director of Neuberger Berman, LLC; Saukaitis was project director for a
social research group from 1995 to 1997.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the period since inception
through December 31, 1999, the management/administration fees paid to Neuberger
Berman Management were 0.85% of average daily net assets, on an annualized
basis.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
4 Socially Responsive Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Period Ended December 31, 1999(1)
- --------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 10.00
Plus: Income from investment operations
Net investment income 0.03
Net gains/losses-- realized and unrealized 1.51
Subtotal: income from investment operations 1.54
Minus: Distributions to shareholders
Income dividends --
Subtotal: distributions to shareholders --
---------------------
Equals: Share price (NAV) at end of year 11.54
- --------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.53(2)
Gross expenses(3) 9.04(2)
Expense(4) 1.68(2)
Net investment income -- actual 0.35(2)
- --------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(5) (%) 15.40(6)
Net assets at end of year ($ x 1,000,000) 1.3
Portfolio turnover rate (%) 72
- --------------------------------------------------------------------------------
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
(1) Period from 2/18/99 (beginning of operations) to 12/31/99.
(2) Annualized.
(3) Shows what this ratio would have been if there had been no expense
reimbursement.
(4) Shows what expenses would have been if there had been no expense offset
arrangements.
(5) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
(6) Not annualized.
5 Socially Responsive Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING PORTFOLIO SHARES
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolio. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0069 05/00r
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Liquid Asset Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed money market portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Liquid Asset Portfolio ..................................................... 2
Your Investment
Buying and Selling Portfolio Shares ........................................ 6
Share Prices ............................................................... 6
Portfolio Structure ........................................................ 7
Distributions and Taxes .................................................... 7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Liquid Asset Portfolio
- --------------------------------------------------------------------------------
"In managing this portfolio we focus on the three main goals investors look for
in a money market investment: liquidity, stability and high current income. At
the same time, we seek to maintain high standards for credit quality, in some
cases higher than required by law."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks the highest available current income consistent with safety
and liquidity.
To pursue this goal, the portfolio invests in high quality money market
securities. These securities may be from U.S. or foreign issuers, including
governments and their agencies, banks, and corporations, but in all cases must
be denominated in U.S. dollars. The portfolio may invest significantly in
commercial paper, and may invest more than 25% of total assets in CDs and
similar time deposits and banker's acceptances issued by U.S. banks. The
portfolio may invest to a lesser extent in securities issued by banks that do
not represent deposits. The portfolio may also invest in repurchase agreements.
The portfolio seeks to maintain a stable $1.00 share price and seeks to reduce
credit risk by diversifying among many issuers of money market securities.
The managers monitor a range of economic and financial factors, in order to
weigh the yields of money market securities of various maturities against their
levels of interest rate and credit risk. Based on their analysis, the managers
invest the portfolio's assets in a mix of money market securities that is
intended to provide as high a yield as possible without violating the
portfolio's credit quality policies or jeopardizing the stability of its share
price.
- --------------------------------------------------------------------------------
Money Market Funds
- --------------------------------------------------------------------------------
Money market funds are subject to federal regulations designed to help maintain
liquidity and a stable share price. The regulations set strict standards for
credit quality and maturity (397 days or less for individual securities, 90 days
or less on average for the portfolio overall).
The regulations also require money market funds to limit investments to the top
two rating categories of credit quality. This portfolio typically exceeds this
requirement by investing only in top-tier securities.
2 Liquid Asset Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on interest rates. When interest
rates fall, the portfolio's yields will typically fall as well. The portfolio's
emphasis on securities in the first tier of credit quality may mean that its
yields are somewhat lower than those available from certain other money market
mutual funds. Over time, the portfolio may produce a lower return than bond or
stock investments. Although the portfolio's average yield has outpaced inflation
over the long term, it may not always do so. Despite its emphasis on first-tier
securities, the portfolio is subject to some credit risk. This is the risk that
issuers may fail, or become less able, to make payments when due.
Because the portfolio may invest more than 25% of total assets in securities
issued by U.S. banks, its performance could be affected by factors influencing
the health of the banking industry. These may include economic trends, industry
competition and governmental actions, as well as factors affecting the financial
stability of borrowers. The bank securities in which the portfolio may invest
typically are not insured by the federal government. Securities that do not
represent deposits have lower priority in the bank's capital structure than
those that do.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
Although the portfolio has maintained a stable share price since its inception,
the share price could fluctuate, meaning that there is a chance that you could
lose money by investing in the portfolio.
While the portfolio may hold securities that carry U.S. government guarantees,
these guarantees do not extend to shares of the portfolio itself.
3 Liquid Asset Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
[The following table was depicted as a bar chart in the printed material.]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90 7.55
'91 5.61
'92 3.25
'93 2.43
'94 3.46
'95 5.04
'96 4.52
'97 4.71
'98 4.66
'99 4.27
^Best quarter: Q3 '90, up 1.85% vWorst quarter: Q2 '93, up 0.56%
Year-to-date performance as of 3/31/00: up 1.22%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Liquid Asset Portfolio 4.27 4.64 4.54
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price, if any should occur. The figures assume that all
distributions were reinvested in the portfolio, and include all portfolio
expenses.
To obtain the portfolio's current yield, call 800.366.6264. The current yield is
the portfolio's net income over a recent seven-day period expressed as an annual
rate of return.
4 Liquid AssetPortfolio
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------
Per-share data ($)
Data apply to a single share throughout each year indicated. You can see what
the fund earned (or lost), what it distributed to investors, and how its share
price changed.
<S> <C> <C> <C> <C> <C>
Share price (NAV) at beginning of year 0.9997 1.0000 0.9999 0.9999 0.9999
Plus: Income from investment operations
Net investment income 0.0493 0.0443 0.0461 0.0456 0.0419
Net gains/losses 0.0003 (0.0001)(1) -- -- --
Subtotal: income from investment operations 0.0496 0.0442 0.0461 0.0456 0.0419
Minus: Distributions to shareholders
Income dividends 0.0493 0.0443 0.0461 0.0456 0.0419
Subtotal: distributions to shareholders 0.0493 0.0443 0.0461 0.0456 0.0419
----------------------------------------------
Equals: Share price (NAV) at end of year 1.0000 0.9999 0.9999 0.9999 0.9999
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense
reimbursement and offset arrangements had not been in effect.
<S> <C> <C> <C> <C> <C>
Net expenses -- actual 1.01 1.00 1.00 1.00 1.00
Gross Expenses(2) 1.25 1.21 1.12 1.14 1.09
Expenses(3) 1.02 1.01 1.01 1.01 1.01
Net investment income -- actual 4.90 4.44 4.61 4.56 4.21
- ----------------------------------------------------------------------------------------------------
<CAPTION>
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested.
<S> <C> <C> <C> <C> <C>
Total return(4) (%) 5.04 4.52 4.71 4.66 4.27
Net assets at end of year ($ x 1,000,000) 31.9 13.5 13.4 14.8 25.8
- ----------------------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio since its inception.
Josephine Mahaney is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. She joined the firm in 1976 and has
co-managed the portfolio since 1992.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.65% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) May not accord with the change in aggregate gains and losses in securities
for the year because of the timing of sales and repurchases of portfolio
shares.
(2) Shows what this ratio would have been if there had been no expense
reimbursement.
(3) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(4) Would have been lower if Neuberger Berman Management had not reimbursed
certain expenses. Does not reflect charges and other expenses that apply
to the separate account or the related insurance policies.
5 Liquid Asset Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolio. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. The portfolio seeks to
maintain a stable $1.00 share price. Securities in the portfolio are valued
using a constant amortization method that is in keeping with the portfolio's
efforts to maintain a stable share price.
6 Liquid Asset Portfolio
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio declares income dividends daily
and pays them once a month. All dividends and other distributions received by
shareholders of record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolio and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Liquid Asset Portfolio
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Liquid Asset Portfolio
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0062 05/00r
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Growth Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Growth Portfolio ........................................................... 2
Your Investment
Buying and Selling Portfolio Shares ........................................ 6
Share Prices ............................................................... 6
Portfolio Structure ........................................................ 7
Distributions and Taxes .................................................... 7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Growth Portfolio
- --------------------------------------------------------------------------------
"Without question, we are growth investors. We look for companies that we think
will deliver positive earnings surprises, particularly those with the potential
to do so consistently. Ideally, we want to identify companies that will someday
rank among the Fortune 500."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital.
To pursue this goal, the portfolio invests mainly in common stocks of
mid-capitalization companies. The portfolio seeks to reduce risk by diversifying
among many companies, industries and sectors. The managers look for fast-growing
companies that are in new or rapidly evolving industries.
Factors in identifying these firms may include:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
The managers may also look for other characteristics in a company, such as
financial strength, a strong position relative to competitors or a stock price
that is reasonable in light of its growth rate. The managers follow a
disciplined selling strategy, and may drop a stock from the portfolio when it
reaches a target price, fails to perform as expected, or appears substantially
less desirable than another stock.
- --------------------------------------------------------------------------------
Mid-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
- --------------------------------------------------------------------------------
Growth Investing
- --------------------------------------------------------------------------------
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly evolving industries and may not yet have reached their full potential.
The growth investor looks for indications of continued success.
2 Growth Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stocks when the market or the economy is not
robust during market downturns, or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Growth Portfolio
<PAGE>
PERFORMANCE
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
[The following table was represented by a bar chart in the printed material.]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90 -8.19
'91 29.73
'92 9.54
'93 6.79
'94 -4.99
'95 31.73
'96 9.14
'97 29.01
'98 15.53
'99 50.40
^ Best quarter: Q4 '99, up 48.60% v Worst quarter: Q3 '98, down 21.39%
Year-to-date performance as of 3/31/00: up 25.21%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Growth Portfolio 50.40 26.37 15.61
Russell Midcap Growth Index 51.29 28.02 18.95
S&P 500 Index 21.01 28.49 18.17
- --------------------------------------------------------------------------------
The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.
The S&P 500 is an unmanaged index of U.S. stocks.
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes broad-based market indices of the
entire U.S. equity market and of the portion of the market the portfolio focuses
on. The portfolio's performance figures include all of its expenses; the indices
do not include costs of investment.
Because the portfolio had a policy of investing in stocks of all capitalizations
and used a comparatively more value-oriented investment approach prior to July
1997, its performance prior to that date would have been different if current
policies had been in effect.
4 Growth Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or
lost), what it distributed to investors, and how its share price changed.
<S> <C> <C> <C> <C> <C>
Share price (NAV)at beginning of year 20.31 25.86 25.78 30.54 26.29
Plus: Income (loss) from investment operations
Net investment income (loss) 0.01 (0.07) (0.03) (0.10) (0.12)
Net gains/losses-- realized and unrealized 6.26 2.34 7.06 4.12 12.51
Subtotal: income (loss) from investment operations 6.27 2.27 7.03 4.02 12.39
Minus: Distributions to shareholders
Income dividends 0.05 0.01 -- -- --
Capital gain distributions 0.67 2.34 2.27 8.27 1.41
Subtotal: distributions to shareholders 0.72 2.35 2.27 8.27 1.41
------------------------------------------------
Equals: Share price (NAV) at end of year 25.86 25.78 30.54 26.29 37.27
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income (loss), as
they actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
<S> <C> <C> <C> <C> <C>
Net expenses--actual 0.90 0.92 0.90 0.92 0.92
Expenses(1) 0.90 0.92 0.90 0.92 0.92
Net investment income (loss)-- actual 0.04 (0.30) (0.11) (0.41) (0.46)
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
<S> <C> <C> <C> <C> <C>
Total return(2) (%) 31.73 9.14 29.01 15.53 50.40
Net assets at end of year ($ x 1,000,000) 537.8 566.4 583.7 616.4 732.8
Portfolio turnover rate (%) 44 57 113 83 119
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio since joining the firm in
1997. From 1981 to 1997, she was an analyst and a portfolio manager at another
firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio since
joining the firm in 1997. From 1972 to 1997, he was a portfolio manager at
several other firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.84% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
5 Growth Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolio. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] E A0065 05/00
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Partners Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Partners Portfolio.............................................................2
Your Investment
Buying and Selling Portfolio Shares ...........................................6
Share Prices...................................................................6
Portfolio Structure............................................................7
Distributions and Taxes .......................................................7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Partners Portfolio
- --------------------------------------------------------------------------------
"Our goal is to find companies that we believe are undervalued relative to their
earnings potential, where we see a gap between the actual price of a stock and
its intrinsic value. When a company grows in value and/or the valuation gap
closes, the success of our strategy is realized."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital.
To pursue this goal, the portfolio invests mainly in common stocks of mid- to
large-capitalization companies. The portfolio seeks to reduce risk by
diversifying among many companies and industries.
The managers look for well-managed companies whose stock prices are believed to
be undervalued.
Factors in identifying these firms may include:
o strong fundamentals, such as a company's financial, operational, and
competitive positions
o consistent cash flow
o a sound earnings record through all phases of the market cycle
The managers may also look for other characteristics in a company, such as a
strong position relative to competitors, a high level of stock ownership among
management, and a recent sharp decline in stock price that appears to be the
result of a short-term market overreaction to negative news.
The portfolio generally considers selling a stock when it reaches the managers'
target price, when it fails to perform as expected, or when other opportunities
appear more attractive.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Mid- and Large-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically performed more like small-caps than like
large-caps. Their prices can rise and fall substantially, although they have the
potential to offer attractive long-term returns.
Large companies are usually well-established. Compared to mid-cap companies,
they may be less responsive to change, but their returns have sometimes led
those of mid-cap companies, often with lower volatility.
- --------------------------------------------------------------------------------
Value Investing
- --------------------------------------------------------------------------------
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors realize their worth.
2 Partners Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock market.
The market's behavior is unpredictable, particularly in the short term. Because
of this, the value of your investment will rise and fall, and you could lose
money.
To the extent that the portfolio emphasizes mid- or large-cap stocks, it takes
on the associated risks. Mid-cap stocks tend to be more volatile than large-cap
stocks and are usually more sensitive to economic and market factors. At any
given time, one or both groups of stocks may be out of favor with investors.
With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions. To the extent that the managers sell stocks before they
reach their market peak, the portfolio may miss out on opportunities for higher
performance.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the portfolio increases its risk of loss.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Partners Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
[The following table was represented by a bar chart in the printed material.]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90 0
'91 0
'92 0
'93 0
'94 0
'95 36.47
'96 29.57
'97 31.25
'98 4.21
'99 7.37
^ Best quarter: Q4 '98, up 15.64% v Worst quarter: Q3 '99, down 14.96%
Year-to-date performance as of 3/31/00: up 0.51%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years 3/22/94
- --------------------------------------------------------------------------------
Partners Portfolio 7.37 21.03 17.47
S&P 500 Index 21.01 28.49 24.41
Russell 1000 Value Index 7.35 23.08 18.96
The S&P 500 is an unmanaged index of U.S. stocks.
The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes broad-based indices of the entire
U.S. equity market and of the portion of the market the portfolio focuses on.
The portfolio's performance figures include all of its expenses; the indices do
not include costs of investment.
4 Partners Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
<TABLE>
<S> <C> <C> <C> <C> <C>
Share price (NAV) at beginning of year 9.77 13.23 16.48 20.60 18.93
Plus: Income (loss) from investment operations
Net investment income 0.11 0.10 0.12 0.20 0.11
Net gains/losses--realized and unrealized 3.43 3.69 4.82 0.73 1.23
Subtotal: income (loss) from investment 3.54 3.79 4.94 0.93 1.34
operations
Minus: Distributions to shareholders
Income dividends 0.01 0.04 0.05 0.08 0.23
Capital gain distributions 0.07 0.50 0.77 2.52 0.40
Subtotal: distributions to shareholders 0.08 0.54 0.82 2.60 0.63
---------------------------------
Equals: Share price (NAV) at end of year 13.23 16.48 20.60 18.93 19.64
</TABLE>
- -------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
Net expenses--actual 1.09 0.95 0.86 0.84 0.87
Expenses(1) 1.09 0.95 0.86 0.84 0.87
Net investment income--actual 0.97 0.60 0.60 1.04 0.57
- ------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(2)(%) 36.47 29.57 31.25 4.21 7.37
Net assets at end of year 207.5 705.4 1,632.8 1,630.5 989.5
($x1,000,000)
Portfolio turnover rate(%) 174 118 106 148 112
- --------------------------------------------------------------------------------
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Robert I. Gendelman and S. Basu Mullick are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Gendelman has been
manager of the portfolio since 1994, and was joined by Mullick in 1998.
Gendelman was a portfolio manager at another firm from 1992 to 1993, as was
Mullick from 1993 to 1998.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.80% of average net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
5 Partners Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolio. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company or plan
administrator to find out by what time your transaction request must be received
in order to be processed the same day. Each portfolio normally calculates its
share price as of the end of regular trading on the Exchange on business days,
usually 4:00 p.m. eastern time. Depending on when your insurance company accepts
transaction requests, it's possible that the portfolio's share price could
change on days when you are unable to buy or sell shares. Because foreign
markets may be open on days when U.S. markets are closed, the value of foreign
securities owned by the portfolio could change on days when you can't buy or
sell portfolio shares. The portfolio's share price, however, will not change
until the next time it is calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue,2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue,2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0064 05/00
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed bond portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Limited Maturity Bond Portfolio ........................................... 2
Your Investment
Buying and Selling Portfolio Shares ....................................... 6
Share Prices .............................................................. 6
Portfolio Structure ....................................................... 7
Distributions and Taxes ................................................... 7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------
"Historically, limited maturity portfolios have been able to deliver much of the
yield available in the investment-grade bond market while offering reduced share
price fluctuation. With this in mind, we strive to manage the portfolio with an
emphasis on yield and risk management."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks the highest available current income consistent with
liquidity and low risk to principal; total return is a secondary goal.
To pursue these goals, the portfolio invests mainly in investment-grade bonds
and other debt securities from U.S. government and corporate issuers. These may
include mortgage- and asset-backed securities. To enhance yield and add
diversification, the portfolio may invest up to 10% of net assets in securities
that are below investment grade, provided that, at the time of purchase, they
are rated at least B by Moody's or Standard and Poor's or, if unrated by either
of these, are believed by the managers to be of comparable quality. When the
managers believe there are attractive opportunities in foreign markets, the
portfolio may also invest in foreign debt securities to enhance yield and/or
total return.
The portfolio seeks to reduce credit risk by diversifying among many issuers and
different types of securities. Although it may invest in securities of any
maturity, under normal circumstances it maintains an average portfolio
duration of four years or less.
The managers monitor national trends in the corporate and government securities
markets, as well as a range of economic and financial factors. The managers look
for securities that appear underpriced compared to securities of similar
structure and credit quality, and securities that appear likely to have their
credit ratings raised. In choosing lower-rated securities, the managers look for
bonds from issuers whose financial health appears comparatively strong but that
are smaller or less well known to investors.
- --------------------------------------------------------------------------------
Duration
- --------------------------------------------------------------------------------
Duration is a measurement of a bond investment's sensitivity to changes in
interest rates. Typically, with a 1% change in interest rates, an investment's
value may be expected to move in the opposite direction approximately 1% for
each year of its duration.
- --------------------------------------------------------------------------------
Bond Ratings
- --------------------------------------------------------------------------------
Most large issuers obtain ratings for their bonds from one or more independent
rating agencies, although many bonds of all quality levels remain unrated.
Bonds in the top four categories of credit quality are considered investment
grade. Bonds in the fifth or sixth category (BB/Ba or B) are called lower-rated,
or non-investment-grade. Many of these "junk bonds" are actually issued by
reputable companies, and offer attractive yields.
2 Limited Maturity Bond Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the
investment-grade bond market. The value of your investment will rise and fall,
and you could lose money.
The portfolio's yield and total return will change with interest rate movements.
When interest rates rise, the portfolio's share price will typically fall. The
portfolio's sensitivity to this risk will increase with any increase in the
portfolio's duration.
A downgrade or default affecting any of the portfolio's securities would affect
the portfolio's performance. Performance could also be affected if unexpected
interest rate trends cause the portfolio's mortgage- or asset-backed securities
to be paid off substantially earlier or later than expected.
Foreign securities could add to the ups and downs of the portfolio's share
price, because foreign markets tend to be more volatile and currency exchange
rates fluctuate.
Over time, the portfolio may produce a lower return than stock investments and
less conservative bond investments. Although the portfolio's average return has
outpaced inflation over the long term, it may not always do so.
Due to the portfolio's limited duration and the need to sometimes change
allocation among sectors, the portfolio may have a high turnover rate, which can
mean increased transaction costs.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
The use of certain derivatives to hedge interest rate risk or produce income
could affect portfolio performance if the derivatives do not perform as
expected.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term debt instruments. This could help the portfolio avoid
losses but may mean lost opportunities.
3 Limited Maturity Bond Portfolio
<PAGE>
PERFORMANCE
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would
equal if you averaged out actual performance over various lengths of time.
This information is based on past performance; it's not a prediction of
future results. This performance information does not reflect insurance
product expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
- --------------------------------------------------------------------------------
8.32 11.34 5.18 6.63 -0.15 10.94 4.31 6.74 4.39 1.48
^ Best quarter: Q4 '91, up 4.22%
v Worst quarter: Q1 '94, down 1.08%
Year-to-date performance as of 3/31/00: up 0.71%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Limited Maturity Bond Portfolio 1.48 5.52 5.86
Merrill Lynch 1-3 Year Treasury Index 3.06 6.51 6.59
The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index of U.S.
Treasuries with maturities between 1 and 3 years.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information on this page provides different measures of the portfolio's
total return. Total return includes the effect of distributions as well as
changes in share price. The figures assume that all distributions were
reinvested in the portfolio.
The table compares the portfolio's returns to those of a broad-based market
index. The portfolio's performance figures include all of its expenses; the
index does not include costs of investment.
To obtain the portfolio's current yield, call 800.877.9700. The current yield is
the portfolio's net income over a recent 30-day period expressed as an annual
rate of return.
4 Limited Maturity Bond Portfolio
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding throughout each year
indicated. You can see what the portfolio earned (or lost), what it distributed to investors, and
how its share price changed.
<S> <C> <C> <C> <C> <C>
Share price (NAV) at beginning of year 14.02 14.71 14.05 14.12 13.82
Plus: Income (loss) from investment operations
Net investment income (loss) 0.82 0.92 0.88 0.80 0.77
Net gains/losses -- realized and unrealized 0.65 (0.34) 0.02 (0.21) (0.58)
Subtotal: income (loss) from investment operations 1.47 0.58 0.90 0.59 0.19
Minus: Distributions to shareholders
Income dividends 0.78 1.24 0.83 0.89 0.77
Subtotal: distributions to shareholders 0.78 1.24 0.83 0.89 0.77
---------------------------------------
Equals: Share price (NAV) at end of year 14.71 14.05 14.12 13.82 13.24
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they actually are as well
as how they would have been if certain expense offset arrangements had not been in effect.
<S> <C> <C> <C> <C> <C>
Net expenses -- actual 0.71 0.78 0.77 0.76 0.76
Expenses(1) 0.71 0.78 0.77 0.76 0.76
Net investment income -- actual 5.99 6.01 6.27 5.83 5.81
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over each period,
assuming all distributions were reinvested. The turnover rate reflects how actively the portfolio
bought and sold securities.
<S> <C> <C> <C> <C> <C>
Total return(2) (%) 10.94 4.31 6.74 4.39 1.48
Net assets at end of year ($ x 1,000,000) 238.9 256.9 251.1 277.3 248.4
Portfolio turnover rate (%) 105 132 86 44 139
- ---------------------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio since its inception.
Catherine Waterworth is a Vice President of Neuberger Berman Management and
Neuberger Berman, LLC. She has co-managed the portfolio since joining the firm
in December 1998. From 1995-98 she was a managing director of high grade fixed
income at a major investment firm.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administration fees paid to Neuberger Berman Management were
0.65% of average daily net assets.
The portfolio's management agreements are contracts and may be altered
under certain circumstances. Neuberger Berman Management has agreed to
limit the portfolio's annual operating expenses when certain expenses
exceed a specified limit. See the Statement of Additional Information for more
details.
5 Limited Maturity Bond Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolio. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values debt securities using bid quotations from independent
pricing services or principal market makers. The portfolio may value short-term
securities with remaining maturities of less than 60 days at cost; these values,
when combined with interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue,2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0061 05/00
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
International Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock portfolio
o carrries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
Contents
- --------------------------------------------------------------------------------
The Portfolio
International Portfolio........................................................2
Your Investment
Buying and Selling Portfolio Shares............................................5
Share Prices...................................................................5
Portfolio Structure............................................................6
Distributions and Taxes........................................................6
<PAGE>
Neuberger Berman Advisers Management Trust
International Portfolio
- --------------------------------------------------------------------------------
"In identifying attractive stocks from among the many thousands currently
available outside the U.S., it's important to have a clear strategy. This
portfolio uses a combination of growth and value criteria, while also
considering larger scale economic factors."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks long-term growth of capital by investing primarily in common
stocks of foreign companies.
To pursue this goal, the portfolio invests mainly in foreign companies of any
size, including companies in developed and emerging industrialized markets. The
portfolio defines a foreign company as one that is organized outside of the
United States and conducts the majority of its business abroad.
The portfolio seeks to reduce risk by diversifying among many industries.
Although it has the flexibility to invest a significant portion of its assets in
one country or region, it generally intends to remain well-diversified across
countries and geographical regions.
In picking stocks, the manager looks for well-managed companies that show
potential for above-average growth or whose stock prices are believed to be
undervalued. Factors in identifying these firms may include strong fundamentals,
such as attractive cash flows and balance sheets, as well as prices that are
reasonable in light of projected earnings growth. The manager also considers the
outlooks for various countries and regions around the world, examining economic,
market, social, and political conditions.
When a stock no longer meets the portfolio's investment criteria, the manager
may sell it.
The portfolio has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.
- --------------------------------------------------------------------------------
Foreign Stocks
- --------------------------------------------------------------------------------
There are many promising opportunities for investment outside the U.S. These
foreign markets often respond to different factors, and therefore tend to follow
cycles that are different from each other.
For this reason, many investors put a portion of their portfolios in foreign
investments as a way of gaining further diversification. While foreign stock
markets can be risky, investors gain an opportunity to add potential long-term
growth.
- --------------------------------------------------------------------------------
Growth vs. Value Investing
- --------------------------------------------------------------------------------
Value investors seek stocks trading at below average market prices based on
earnings, book value or other financial measures before other investors discover
their worth. Growth investors seek companies that are already successful but may
not have reached their full potential.
2 International Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in international
stock markets. The behavior of these markets is unpredictable, particularly in
the short term. Because of this, the value of your investment will rise and
fall, sometimes sharply, and you could lose money.
Foreign stocks are riskier than comparable U.S. stocks. This is in part because
foreign markets are less developed and foreign governments, economies, laws, tax
codes and securities firms may be less stable. There is also a higher chance
that key information will be unavailable, incomplete, or inaccurate. As a
result, foreign stocks can fluctuate more widely in price than comparable U.S.
stocks, and they may also be less liquid. These risks are generally greater in
emerging markets. Over a given period of time, foreign stocks may underperform
U.S. stocks -- sometimes for years. The portfolio could also underperform if the
manager invests in countries or regions whose economic performance falls short.
Changes in currency exchange rates bring an added dimension of risk. Currency
fluctuations could erase investment gains or add to investment losses.
To the extent that the portfolio invests in a type of stock, it takes on the
risks associated with that type. Growth stocks may suffer more than value stocks
during market downturns, while value stocks may remain undervalued. Mid- and
small-cap stocks tend to be less liquid and more volatile than large-cap stocks.
Any type of stock may underperform any other during a given period.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. The portfolio may use derivatives for hedging and for speculation.
Hedging could reduce the portfolio's losses from currency fluctuations, but
could also reduce its gains. A derivative instrument could fail to perform as
expected. Any speculative investment could cause a loss for the portfolio.
When the portfolio anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the portfolio avoid losses
but may mean lost opportunities.
3 International Portfolio
<PAGE>
PERFORMANCE OF A SIMILAR FUND
- --------------------------------------------------------------------------------
Because the portfolio had not commenced investment operations as of December 31,
1999, it does not have performance to report in this prospectus.
However, the portfolio has an investment objective, policies, limitations, and
strategies substantially similar to those of, and the same portfolio manager as,
another mutual fund managed by Neuberger Berman Management called the Neuberger
Berman International Fund. The following table shows average annual total
returns for the Neuberger Berman International Fund, assuming reinvestment of
all distributions, as well as the EAFE Index, which is pertinent to the
Neuberger Berman International Fund. This performance information does not
reflect insurance product expenses.
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
5 Inception
1 Year Years (6/15/94)
- --------------------------------------------------------------------------------
Neuberger Berman International Fund 65.86 20.29 17.96
EAFE Index 27.30 13.15 11.67
The EAFE is an unmanaged index of stocks from Europe, Australasia, and the Far
East.
- --------------------------------------------------------------------------------
The performance of Neuberger Berman International Fund reflects that fund's
expense ratio, and does not reflect any expenses or charges that apply to
variable contracts. The estimated expense ratio of the portfolio is higher than
the expense ratio of the Neuberger Berman International Fund. Therefore, if the
estimated expense ratio of the portfolio had been factored into this
presentation, performance would be lower. In addition, insurance expenses and
charges would reduce performance. Although the objective, policies, limitations
and strategies of the portfolio are substantially similar to that of the
Neuberger Berman International Fund, the portfolio is a distinct mutual fund and
may have different investment returns, portfolio holdings, and risk/return
characteristics than Neuberger Berman International Fund. The historical
performance of Neuberger Berman International Fund is not indicative of future
performance of the portfolio.
This performance representation relies on data suppplied by Neuberger Berman
Management or derived by Neuberger Berman Management from statistical services,
reports or other sources it believes to be reliable.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Valerie Chang is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. In 1996 she joined the firm and became
assistant manager of the portfolio. She began her career in 1990 in banking, and
from 1995 to 1996 was a senior securities analyst at another firm.
Benjamin E. Segal is a Vice President of Neuberger Berman Management and a Vice
President of Neuberger Berman, LLC and an Associate Manager of the portfolio. He
was an assistant portfolio manager at another firm from 1997 to 1998. Prior to
1997, he held positions in international finance and consulting.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services.
The portfolio pays the following fees to Neuberger Berman Management, all
expressed as a percentage of the portfolio's average daily net assets: for
investment management, 0.85% of the first $250 million; 0.825% of the next $250
million; 0.80% of the next $250 million; 0.775% of the next $250 million; 0.75%
of the next $500 million; and 0.725% on assets over $1.5 billion; and 0.30% for
administration. The portfolio's management agreements are written contracts and
may be altered under certain circumstances. Neuberger Berman Management has
agreed to limit the portfolio's expenses when certain annual operating expenses
of the portfolio exceed the agreed-upon limit. See the Statement of Additional
Information for more details.
4 International Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts. Because shares of the portfolio are held by the
insurance companies involved, you will need to follow the instructions provided
by your insurance company for matters involving allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance, groups
with different interests will share the portfolio. Due to differences of tax
treatment and other considerations among these shareholders, it is possible
(although not likely) that the interests of the shareholders might sometimes be
in conflict. For these reasons, the trustees of the portfolio watch for the
existence of any material irreconcilable conflicts and will determine what
action, if any, should be taken in the event of a conflict. If there is a
conflict, it is possible that to resolve it, one or more insurance company
separate accounts might be compelled to withdraw its investment in the
portfolio. While this might resolve the conflict, it also might force the
portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolios may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
5 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
6 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
7 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
Neuberger Berman [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0070 05/00rr
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Balanced Portfolio Prospectus May 1, 2000
THIS PORTFOLIO:
o is offered to life insurance companies to serve as an investment vehicle
under their variable annuity and variable life insurance contracts, and is
also offered to qualified pension and retirement plans
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through a
professionally managed stock and bond portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Balanced Portfolio ........................................................ 2
Your Investment
Buying and Selling Portfolio Shares ....................................... 6
Share Prices .............................................................. 6
Portfolio Structure ....................................................... 7
Distributions and Taxes ................................................... 7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Balanced Portfolio
- --------------------------------------------------------------------------------
"By keeping most of the portfolio's assets invested in the mid-cap segment of
the stock market, the portfolio seeks long-term growth, while substantial
investment in the short-term bond market has the potential to reduce risk and
add to income."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital and reasonable current income without
undue risk to principal.
To pursue these goals, the portfolio allocates its assets between stocks --
primarily those of mid-capitalization companies -- and short-term fixed-income
securities from U.S. government and corporate issuers. The portfolio seeks to
reduce risk by diversifying among many issuers and different types of
securities.
The managers may allocate anywhere from 50% to 70% of assets to stock
investments, with the balance allocated to bond investments (at least 25%) and
operating cash. In determining the portfolio's allocation, the managers consult
with senior management of the adviser and sub-adviser.
In selecting stocks, the managers look for fast-growing companies in new or
rapidly evolving industries whose characteristics may include one or more of the
following:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
o financial strength
o a strong competitive position
o a reasonable stock price in light of the company's growth rate
The portfolio's fixed-income securities consist mainly of investment-grade bonds
and other debt securities from U.S. government and corporate issuers, and may
include mortgage- and asset-backed securities. Although the portfolio may invest
in securities of any maturity, it normally maintains an average portfolio
duration of four years or less. In selecting fixed-income securities, the
managers monitor national trends, looking for securities that appear relatively
underpriced or appear likely to have their credit ratings raised.
- --------------------------------------------------------------------------------
Asset Allocation
- --------------------------------------------------------------------------------
Studies of performance and volatility indicate that balanced portfolios of
stocks and fixed-income securities can approach stock market performance while
experiencing lower volatility. The first step in an allocation strategy is to
determine how assets should be divided among investment categories. Selecting
appropriate investments within those categories is a second step.
- --------------------------------------------------------------------------------
Mid-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
2 Balanced Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock and
bond markets. The behavior of these markets is unpredictable, particularly in
the short term. Because of this, the value of your investment will rise and
fall, and you could lose money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stock when the market or the economy is not
robust, during market downturns or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Most of the performance of the fixed-income portion of the portfolio depends on
what happens in the investment-grade bond market. The portfolio's yield and
total return on its fixed-income securities will change with interest rate
movements. When interest rates rise, the portfolio's underlying bonds will
decline in price. The portfolio sensitivity to this risk will increase with any
increase in the portfolio's duration.
A downgrade or default that affected any of the portfolio's securities would
adversely affect the portfolio's performance, as would unexpected interest rate
trends that cause mortgage- or asset-backed securities to be paid off
substantially earlier or later than expected.
The portfolio's performance may also suffer if certain investments or asset
allocations do not perform as portfolio managers expected.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements.
The use of certain derivatives to hedge interest rate risk or produce income
could affect portfolio performance if the derivatives do not perform as
expected.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
When the portfolio anticipates unusual market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term securities. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Balanced Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect insurance product
expenses.
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
90 91 92 93 94 95 96 97 98 99
- --------------------------------------------------------------------------------
1.95 22.68 8.06 6.45 -3.36 23.76 6.89 19.45 12.18 33.56
^ Best quarter: Q4 '99, up 32.13%
v Worst quarter: Q3 '98, down 12.97%
Year-to-date performance as of 3/31/00: up 17.05%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years 10 Years 2/28/89
- --------------------------------------------------------------------------------
Balanced Portfolio 33.56 18.81 12.65 13.18
Russell Midcap Growth Index 51.29 28.02 18.95 19.82
Merrill Lynch 1-3 Year Treasury Index 3.06 6.51 6.59 7.01
S&P 500 Index 21.01 28.49 18.17 19.24
The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.
The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index of U.S. Treasury
securities.
The S&P 500 is an unmanaged index of U.S. stocks.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information at left provides different measures of the portfolio's total
return. Total return includes the effect of distributions as well as changes in
share price, if any should occur. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes two broad-based market indices as
well as a more focused index of mid-cap growth stocks. The portfolio's
performance figures include all of its expenses; the indices do not include
costs of investment.
4 Balanced Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding throughout each year
indicated. You can see what the portfolio earned (or lost), what it distributed to investors, and how
its share price changed.
<S> <C> <C> <C> <C> <C>
Share price (NAV)at beginning of year 14.51 17.52 15.92 17.80 16.34
Plus: Income (loss) from investment operations
Net investment income 0.32 0.34 0.36 0.29 0.26
Net gains/losses -- realized and unrealized 3.06 0.75 2.59 1.62 4.96
Subtotal: income (loss) from investment operations 3.38 1.09 2.95 1.91 5.22
Minus: Distributions to shareholders
Income dividends 0.28 0.41 0.30 0.42 0.27
Capital gain distributions 0.09 2.28 0.77 2.95 0.40
Subtotal: distributions to shareholders 0.37 2.69 1.07 3.37 0.67
-------------------------------------
Equals: Share price (NAV) at end of year 17.52 15.92 17.80 16.34 20.89
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they actually are as well as
how they would have been if certain expense offset arrangements had not been in effect.
<S> <C> <C> <C> <C> <C>
Net expenses -- actual 0.99 1.09 1.04 1.03 1.02
Expenses(1) 0.99 1.09 1.04 1.03 1.02
Net investment income -- actual 1.99 1.84 2.07 1.84 1.60
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over each period, assuming
all distributions were reinvested. The turnover rate reflects how actively the portfolio bought and
sold securities.
<S> <C> <C> <C> <C> <C>
Total return(2) (%) 23.76 6.89 19.45 12.18 33.56
Net assets at end of year ($ x 1,000,000) 144.4 173.2 161.9 177.6 165.3
Portfolio turnover rate (%) 76 87 103 71 121
- -----------------------------------------------------------------------------------------------------
</TABLE>
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies. Qualified plans that are direct
shareholders of the portfolio are not affected by insurance-related
expenses.
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio's debt securities investments since its
inception.
Catherine Waterworth is a Vice President of Neuberger Berman Management and
Neuberger Berman, LLC. She has co-managed the portfolio's debt securities
investments since joining the firm in December 1998. From 1995-98 she was a
managing director of high grade fixed income at a major investment firm.
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio's equity investments
since joining the firm in 1997. From 1981 to 1997, she was an analyst and a
portfolio manager at another firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio's
equity investments since joining the firm in 1997. From 1972 to 1997, he was a
portfolio manager at several other firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administrative fees paid to Neuberger Berman Management were
0.85% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
5 Balanced Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
The portfolio described in this prospectus is designed for use with certain
variable insurance contracts and qualified plans. Because shares of the
portfolio are held by the insurance companies involved, you will need to follow
the instructions provided by your insurance company for matters involving
allocations to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance -- and to
qualified plans, groups with different interests will share the portfolio. Due
to differences of tax treatment and other considerations among these
shareholders, it is possible (although not likely) that the interests of the
shareholders might sometimes be in conflict. For these reasons, the trustees of
the portfolio watch for the existence of any material irreconcilable conflicts
and will determine what action, if any, should be taken in the event of a
conflict. If there is a conflict, it is possible that to resolve it, one or more
insurance company separate accounts or qualified plans might be compelled to
withdraw its investment in the portfolio. While this might resolve the conflict,
it also might force the portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your insurance company to find out by what
time your transaction request must be received in order to be processed the same
day. The portfolio normally calculates its share price as of the end of regular
trading on the Exchange on business days, usually 4:00 p.m. eastern time.
Depending on when your insurance company accepts transaction requests, it's
possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolio, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your variable contract
prospectus. Consult it for more information.
- --------------------------------------------------------------------------------
Insurance Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses charged by your insurance company under your variable
contract; for those fees, you will need to see the prospectus for your variable
contract.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- In unusual circumstances, there may be a
risk to you of special tax liabilities from an investment in the portfolio.
Because the portfolio is offered through certain variable insurance contracts,
it is subject to special diversification standards beyond those that normally
apply to mutual funds. If the underlying assets of the portfolio fail to meet
the special standards, you could be subject to adverse tax consequences -- for
example, some of the income earned by the portfolio could generate a current tax
liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
NEUBERGER BERMAN [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0063 05/00
SEC file number 811-4225
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER BERMAN [LOGO]
Neuberger Berman
Advisers Management Trust
- --------------------------------------------------------------------------------
Balanced Portfolio Prospectus (for Qualified Plans) May 1, 2000
THIS PORTFOLIO:
o is offered to qualified pension and retirement plans, and is also offered
to life insurance companies to serve as an investment vehicle under their
variable annuity and variable life insurance contracts
o is designed for investors with long-term goals in mind
o offers you the opportunity to participate in financial markets through
professionally managed stock and bond portfolio
o carries certain risks, including the risk that you could lose money if
portfolio shares are worth less than what you paid
o is a mutual fund, not a bank deposit, and is not guaranteed or insured by
the FDIC or any other government agency
Portfolio Management
All of the Neuberger Berman Advisers Management Trust Portfolios are managed by
Neuberger Berman Management Inc., in conjunction with Neuberger Berman, LLC, as
sub-adviser. Together, the firms manage more than $54.4 billion in total assets
(as of December 31, 1999) and continue an asset management history that began in
1939.
Risk Information
In certain cases, the investments of the Neuberger Berman Advisers Management
Trust portfolios are managed by the same individuals who manage one or more
other Neuberger Berman mutual funds that have similar names, objectives, and
investment styles as a portfolio. You should be aware that the portfolios are
likely to differ from these other mutual funds in size, cash flow pattern, and
tax matters. Accordingly, the holdings and performance of these portfolios can
be expected to vary from those of the other mutual funds.
This prospectus discusses principal risks of investment in portfolio shares.
These and other risks are discussed in detail in the Statement of Additional
Information (see back cover). If you are buying a variable contract, you should
also read the contract's prospectus.
These securities, like the securities of all mutual funds, have not been
approved or disapproved by the Securities and Exchange Commission, and the
Securities and Exchange Commission has not determined if the prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Neuberger Berman name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund named in this
prospectus are either service marks or registered trademarks of Neuberger Berman
Management Inc. (C) 2000 Neuberger Berman Management Inc.
CONTENTS
- --------------------------------------------------------------------------------
The Portfolio
Balanced Portfolio.............................................................2
Your Investment
Buying and Selling Portfolio Shares............................................6
Share Prices...................................................................6
Portfolio Structure............................................................7
Distributions and Taxes........................................................7
- --------------------------------------------------------------------------------
<PAGE>
Neuberger Berman Advisers Management Trust
Balanced Portfolio
- --------------------------------------------------------------------------------
"By keeping most of the portfolio's assets invested in the mid-cap segment of
the stock market, the portfolio seeks long-term growth, while substantial
investment in the short-term bond market has the potential to reduce risk and
add to income."
GOAL & STRATEGY
- --------------------------------------------------------------------------------
The portfolio seeks growth of capital and reasonable current income without
undue risk to principal.
To pursue these goals, the portfolio allocates its assets between stocks --
primarily those of mid-capitalization companies -- and short-term fixed-income
securities from U.S. government and corporate issuers. The portfolio seeks to
reduce risk by diversifying among many issuers and different types of
securities.
The managers may allocate anywhere from 50% to 70% of assets to stock
investments, with the balance allocated to bond investments (at least 25%) and
operating cash. In determining the portfolio's allocation, the managers consult
with senior management of the adviser and sub-adviser.
In selecting stocks, the managers look for fast-growing companies in new or
rapidly evolving industries whose characteristics may include one or more of the
following:
o above-average growth of earnings
o earnings that have exceeded analysts' expectations
o financial strength
o a strong competitive position
o a reasonable stock price in light of the company's growth rate
The portfolio's fixed-income securities consist mainly of investment-grade bonds
and other debt securities from U.S. government and corporate issuers, and may
include mortgage- and asset-backed securities. Although the portfolio may invest
in securities of any maturity, it normally maintains an average portfolio
duration of four years or less. In selecting fixed-income securities, the
managers monitor national trends, looking for securities that appear relatively
underpriced or appear likely to have their credit ratings raised.
- --------------------------------------------------------------------------------
Asset Allocation
- --------------------------------------------------------------------------------
Studies of performance and volatility indicate that balanced portfolios of
stocks and fixed-income securities can approach stock market performance while
experiencing lower volatility. The first step in an allocation strategy is to
determine how assets should be divided among investment categories. Selecting
appropriate investments within those categories is a second step.
- --------------------------------------------------------------------------------
Mid-Cap Stocks
- --------------------------------------------------------------------------------
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.
Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.
2 Balanced Portfolio
<PAGE>
MAIN RISKS
- --------------------------------------------------------------------------------
Most of the portfolio's performance depends on what happens in the stock and
bond markets. The behavior of these markets is unpredictable, particularly in
the short term. Because of this, the value of your investment will rise and
fall, and you could lose money.
By focusing on mid-cap stocks, the portfolio is subject to their risks,
including the risk its holdings may:
o fluctuate more widely in price than the market as a whole
o underperform other types of stock when the market or the economy is not
robust, during market downturns or when mid-cap stocks are out of favor
Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The portfolio's performance may also suffer
if certain stocks do not perform as the portfolio managers expected. To the
extent that the managers sell stocks before they reach their market peak, the
portfolio may miss out on opportunities for higher performance.
Most of the performance of the fixed-income portion of the portfolio depends on
what happens in the investment-grade bond market. The portfolio's yield and
total return on its fixed-income securities will change with interest rate
movements. When interest rates rise, the portfolio's underlying bonds will
decline in price. The portfolio sensitivity to this risk will increase with any
increase in the portfolio's duration.
A downgrade or default that affected any of the portfolio's securities would
adversely affect the portfolio's performance, as would unexpected interest rate
trends that cause mortgage- or asset-backed securities to be paid off
substantially earlier or later than expected.
The portfolio's performance may also suffer if certain investments or asset
allocations do not perform as portfolio managers expected.
- --------------------------------------------------------------------------------
Other Risks
- --------------------------------------------------------------------------------
The portfolio may use certain practices and securities involving additional
risks.
Borrowing, securities lending and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements.
The use of certain derivatives to hedge interest rate risk or produce income
could affect portfolio performance if the derivatives do not perform as
expected.
Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.
Through active trading, the portfolio may have a high turnover rate, which can
mean lower performance due to increased brokerage costs.
When the portfolio anticipates unusual market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term securities. This could help the portfolio avoid losses
but may mean lost opportunities.
3 Balanced Portfolio
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The charts below provide an indication of the risks of investing in the
portfolio. The bar chart shows how the portfolio's performance has varied from
one year to another. The table below the chart shows what the return would equal
if you averaged out actual performance over various lengths of time, and
compares the return with that of a broad measure of market performance. This
information is based on past performance; it's not a prediction of future
results. This performance information does not reflect qualified plan expenses.
[The following table was represented by a bar chart in the printed material.]
YEAR-BY-YEAR % RETURNS as of 12/31 each year
- --------------------------------------------------------------------------------
'90 1.95
'91 22.68
'92 8.06
'93 6.45
'94 -3.36
'95 23.76
'96 6.89
'97 19.45
'98 12.18
'99 33.56
^ Best quarter: Q4 '99, up 32.13% ^ Worst quarter: Q3 '98, down 12.97%
Year-to-date performance as of 3/31/00: up 17.05%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/99
- --------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years 10 Years 2/28/89
- --------------------------------------------------------------------------------
Balanced Portfolio 33.56 18.81 12.65 13.18
Russell Midcap Growth Index 51.29 28.02 18.95 19.82
Merrill Lynch 1-3 Year Treasury Index 3.06 6.51 6.59 7.01
S&P 500 Index 21.01 28.49 18.17 19.24
The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.
The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index of U.S. Treasury
securities.
The S&P 500 is an unmanaged index of U.S. stocks.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Measures
- --------------------------------------------------------------------------------
The information at left provides different measures of the portfolio's total
return. Total return includes the effect of distributions as well as changes in
share price, if any should occur. The figures assume that all distributions were
reinvested in the portfolio.
As a frame of reference, the table includes two broad-based market indices as
well as a more focused index of mid-cap growth stocks. The portfolio's
performance figures include all of its expenses; the indices do not include
costs of investment.
INVESTOR EXPENSES
- --------------------------------------------------------------------------------
The portfolio charges no fees for buying, selling, or exchanging shares, or for
maintaining an account. Your only portfolio cost is your share of annual
operating expenses. You may, however, have additional expenses in connection
with your qualified plan.
FEE TABLE
- --------------------------------------------------------------------------------
Shareholder fees None
- --------------------------------------------------------------------------------
Annual operating expenses (% of average net assets)*
These are deducted from portfolio assets, so you pay them indirectly.
Management/administration fees 0.85
Plus: Distribution (12b-1) fees none
Other expenses 0.17
----
Equals: Total annual operating expenses 1.02
- --------------------------------------------------------------------------------
EXPENSE EXAMPLE
- --------------------------------------------------------------------------------
The example assumes that you invested $10,000 for the periods shown, that you
earned a hypothetical 5% total return each year, and that the portfolio's
expenses were unchanged. Your costs would be the same whether you sold your
shares or continued to hold them at the end of each period. Actual performance
and expenses may be higher or lower.
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Expenses $ 104 $ 325 $ 563 $1,248
- --------------------------------------------------------------------------------
* The figures in the table are based on last year's expenses. Actual
expenses this year may be higher or lower.
4 Balanced Portfolio
<PAGE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
Year Ended December 31, 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------
Per-share data ($)
Data have been computed based on the average number of shares outstanding
throughout each year indicated. You can see what the portfolio earned (or lost),
what it distributed to investors, and how its share price changed.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Share price (NAV) at beginning of year 14.51 17.52 15.92 17.80 16.34
Plus: Income (loss) from investment operations
Net investment income 0.32 0.34 0.36 0.29 0.26
Net gains/losses--realized and unrealized 3.06 0.75 2.59 1.62 4.96
Subtotal: income (loss) from investment 3.38 1.09 2.95 1.91 5.22
operations
Minus: Distributions to shareholders
Income dividends 0.28 0.41 0.30 0.42 0.27
Capital gain distributions 0.09 2.28 0.77 2.95 0.40
Subtotal: distributions to shareholders 0.37 2.69 1.07 3.37 0.67
Equals: Share price (NAV) at end of year 17.52 15.92 17.80 16.34 20.89
</TABLE>
- -------------------------------------------------------------------------------
Ratios (% of average net assets)
The ratios show the portfolio's expenses and net investment income, as they
actually are as well as how they would have been if certain expense offset
arrangements had not been in effect.
Net expenses--actual 0.99 1.09 1.04 1.03 1.02
Expenses(1) 0.99 1.09 1.04 1.03 1.02
Net investment income--actual 1.99 1.84 2.07 1.84 1.60
- -------------------------------------------------------------------------------
Other data
Total return shows how an investment in the portfolio would have performed over
each period, assuming all distributions were reinvested. The turnover rate
reflects how actively the portfolio bought and sold securities.
Total return(2) (%) 23.76 6.89 19.45 12.18 33.56
Net assets at end of year ($ x 1,000,000) 144.4 173.2 161.9 177.6 165.3
Portfolio turnover rate (%) 76 87 103 71 121
- ------------------------------------------------------------------------------
The figures above have been audited by Ernst & Young LLP, the portfolio's
independent auditors. Their report, and full financial statements, appear in the
portfolio's most recent annual report (see back cover).
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Theodore P. Giuliano, a Vice President and Director of Neuberger Berman
Management and a Managing Director of Neuberger Berman, LLC, is the manager of
the Fixed Income Group of Neuberger Berman, which he helped establish in 1984.
He has co-managed the portfolio's debt securities investments since its
inception.
Catherine Waterworth is a Vice President of Neuberger Berman Management and
Neuberger Berman, LLC. She has co-managed the portfolio's debt securities
investments since joining the firm in December 1998. From 1995-98 she was a
managing director of high grade fixed income at a major investment firm.
Jennifer K. Silver is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the portfolio's equity investments
since joining the firm in 1997. From 1981 to 1997, she was an analyst and a
portfolio manager at another firm.
Brooke A. Cobb is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the portfolio's
equity investments since joining the firm in 1997. From 1972 to 1997, he was a
portfolio manager at several other firms.
Neuberger Berman Management is the portfolio's investment manager,
administrator, and distributor. It engages Neuberger Berman, LLC as sub-adviser
to provide management and related services. For the 12 months ended 12/31/99,
the management/administrative fees paid to Neuberger Berman Management were
0.85% of average daily net assets.
The portfolio's management agreements are contracts and may be altered under
certain circumstances. Neuberger Berman Management has agreed to limit the
portfolio's annual operating expenses when certain expenses exceed a specified
limit. See the Statement of Additional Information for more details.
(1) Shows what expenses would have been if there had been no expense offset
arrangements. This calculation is required for all periods ending after
9/1/95.
(2) Does not reflect charges and other expenses that apply to the separate
account or the related insurance policies. Qualified plans that are direct
shareholders of the portfolio are not affected by insurance-related
expenses.
5 Balanced Portfolio
<PAGE>
Neuberger Berman Advisers Management Trust
Your Investment
- --------------------------------------------------------------------------------
BUYING AND SELLING
PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The portfolio described in this prospectus is designed for use with certain
qualified plans and variable insurance contracts. You will need to follow the
instructions provided by your qualified plan for matters involving allocations
to this portfolio.
Under certain circumstances, the portfolio reserves the right to:
o suspend the offering of shares
o reject any investment order
o satisfy an order to sell portfolio shares with securities rather than
cash, for certain very large orders
o suspend or postpone the redemption of shares on days when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
SEC
Because the portfolio is offered to different insurance companies and for
different types of variable contracts -- annuities and life insurance -- and to
qualified plans, groups with different interests will share the portfolio. Due
to differences of tax treatment and other considerations among these
shareholders, it is possible (although not likely) that the interests of the
shareholders might sometimes be in conflict. For these reasons, the trustees of
the portfolio watch for the existence of any material irreconcilable conflicts
and will determine what action, if any, should be taken in the event of a
conflict. If there is a conflict, it is possible that to resolve it, one or more
insurance company separate accounts or qualified plans might be compelled to
withdraw its investment in the portfolio. While this might resolve the conflict,
it also might force the portfolio to sell securities at disadvantageous prices.
SHARE PRICES
- --------------------------------------------------------------------------------
When you buy and sell shares of the portfolio, the share price is the
portfolio's net asset value per share.
The portfolio is open for business every day the New York Stock Exchange is
open. The Exchange is closed on all national holidays and Good Friday; portfolio
shares will not be priced on those days. In general, every buy or sell request
you place will go through at the next share price to be calculated after your
request has been accepted; check with your plan administrator to find out by
what time your transaction request must be received in order to be processed the
same day. The portfolio normally calculates its share price as of the end of
regular trading on the Exchange on business days, usually 4:00 p.m. eastern
time. Depending on when your plan administrator accepts transaction requests,
it's possible that the portfolio's share price could change on days when you are
unable to buy or sell shares. Because foreign markets may be open on days when
U.S. markets are closed, the value of foreign securities owned by the portfolio
could change on days when you can't buy or sell portfolio shares. The
portfolio's share price, however, will not change until the next time it is
calculated.
- --------------------------------------------------------------------------------
Share Price Calculations
- --------------------------------------------------------------------------------
The portfolio's share price is the total value of its assets minus its
liabilities, divided by the total number of shares. Because the value of the
portfolio's securities changes every day, the share price usually changes as
well.
The portfolio values equity securities by using market prices, and values debt
securities using bid quotations from independent pricing services or principal
market makers. The portfolio may value short-term securities with remaining
maturities of less than 60 days at cost; these values, when combined with
interest earned, approximate market value.
In rare cases, events that occur after markets have closed may render certain
prices unreliable. When the portfolio believes a market price does not reflect a
security's true value, the portfolio may substitute for the market price a
fair-value estimate derived through methods approved by its trustees. The
portfolio may also use these methods to value certain types of illiquid
securities.
6 Your Investment
<PAGE>
PORTFOLIO STRUCTURE
- --------------------------------------------------------------------------------
Prior to May 1, 2000, the portfolio invested through a two-tier master/feeder
structure. Rather than investing directly in securities, the portfolio invested
all of its assets in another fund that served as a corresponding "master
series." The master series, in turn, invested in securities.
Effective May 1, 2000, the portfolio converted to a conventional one-tier
structure. The portfolio redeemed its investment in its corresponding master
series in return for delivery of the series' securities, at current net asset
value, subject to the liabilities of the master series. Accordingly, the
portfolio received the investment securities of its corresponding master series
and will continue to hold securities directly.
While Neuberger Berman Management and Neuberger Berman, LLC may serve as the
adviser or sub-adviser of other mutual funds that have similar names, goals, and
strategies as the portfolios, there may be certain differences between the
portfolio and these other funds in matters such as size, cash flow patterns and
tax matters, among others. As a result, there could also be differences in
performance.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The information below is only a summary of some of the important Federal tax
considerations generally affecting the portfolio and its shareholders; for a
more detailed discussion, request a copy of the Statement of Additional
Information. Also, you may want to consult your tax professional. Everyone's tax
situation is different, and your professional should be able to help you answer
any questions you may have.
Distributions -- The portfolio pays out to shareholders of record any net income
and net capital gains. Ordinarily, the portfolio makes distributions once a year
(in February). All dividends and other distributions received by shareholders of
record are automatically reinvested in portfolio shares.
How distributions and transactions are taxed -- Dividends and other
distributions made by a portfolio, as well as transactions in portfolio shares,
are taxable, if at all, to the extent described in your qualified plan
documentation. Consult it for more information.
- --------------------------------------------------------------------------------
Qualifed Plan Expenses
- --------------------------------------------------------------------------------
The fees and policies outlined in this prospectus are set by the portfolio and
by Neuberger Berman Management. The fee information here does not include the
fees and expenses, if any, charged under your qualified plan; for those fees,
you will need to see your qualified plan documentation.
- --------------------------------------------------------------------------------
Distribution and Services
- --------------------------------------------------------------------------------
The portfolio has a non-fee distribution plan that recognizes that Neuberger
Berman Management may use its own resources, including profits that derive from
administration fees paid by the portfolio, to pay expenses associated with the
distribution of portfolio shares.
Neuberger Berman Management may also pay insurance companies and qualified plan
administrators for services they provide to current and prospective variable
contract owners and plan participants, such as providing information about the
portfolios and delivering portfolio documents, among other services.
Neuberger Berman Management does not receive any separate fees from the
portfolio for making these payments.
7 Your Investment
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Other tax-related considerations -- Because the portfolio is offered through
certain variable insurance contracts, it is subject to special diversification
standards beyond those that normally apply to mutual funds. If the underlying
assets of the portfolio fail to meet the special standards, a variable contract
owner could be subject to adverse tax consequences -- for example, some of the
income earned by a portfolio could generate a current tax liability.
The managers of the portfolio's assets intend to comply with the special
diversification requirements. It is possible that their attempts to comply may
at times call for decisions that would somewhat reduce investment performance.
- --------------------------------------------------------------------------------
Conversion to the Euro
- --------------------------------------------------------------------------------
Like other mutual funds, the portfolio could be affected by problems relating to
the conversion of European currencies into the Euro, which extends from 1/1/99
to 7/1/02.
At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with the Euro issue and to determine that the systems used by our
major service providers are also compliant. We are also making efforts to
determine whether companies whose securities are owned by the portfolio will be
affected by this issue.
At the same time, it is impossible to know whether the ongoing conversion, which
could disrupt portfolio operations and investments if problems arise, has been
adequately addressed until the conversion is completed.
8 Your Investment
<PAGE>
FOR ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
If you'd like further details on this portfolio, you can request a free copy of
the following documents:
Shareholder Reports -- Published twice a year, the shareholder reports offer
information about the portfolio's recent performance, including:
o a discussion by the portfolio manager(s) about strategies and market
conditions
o fund performance data and financial statements
o complete portfolio holdings
Statement of Additional Information -- The SAI contains more comprehensive
information on this portfolio, including:
o various types of securities and practices, and their risks
o investment limitations and additional policies
o information about the portfolio's management and business structure
The SAI is incorporated by reference into this prospectus, making it legally
part of this prospectus.
Investment manager:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
Neuberger Berman [LOGO]
Neuberger Berman Management Inc.
605 Third Avenue,2nd Floor
New York, NY 10158-0180
- --------------------------------------------------------------------------------
Obtaining Information
- --------------------------------------------------------------------------------
You can obtain a shareholder report, SAI, and other information from:
Neuberger Berman Management Inc.
605 Third Avenue,2nd Floor
New York, NY 10158-0180
800.877.9700
212.476.8800
Web site:
www.nbfunds.com
Email:
[email protected]
Securities and Exchange Commission
Washington, DC 20549-6009
1-800-SEC-0330 (Public Reference Section)
Web site:
www.sec.gov
You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.
[RECYCLE LOGO] A0066 05/00
SEC file number 811-4225
<PAGE>
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
Dated May 1, 2000
The Balanced Portfolio, Growth Portfolio, Guardian Portfolio,
International Portfolio, Limited Maturity Bond Portfolio, Liquid Asset
Portfolio, Mid-Cap Growth Portfolio, Partners Portfolio and Socially Responsive
Portfolio (each a "Portfolio") of Neuberger Berman Advisers Management Trust
("Trust") offer shares pursuant to a Prospectus dated May 1, 2000.
The Portfolios' Prospectus provides the basic information that an investor
should know before investing. You can get a free copy of the Prospectus from
Neuberger Berman Management Inc. ("NB Management"), 605 Third Avenue, 2nd Floor,
New York, NY 10158-0180, or by calling the Trust at 1-800-877-9700.
This Statement of Additional Information ("SAI") is not a prospectus and
should be read in conjunction with the Prospectus.
No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this SAI in connection
with the offering made by the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by a Portfolio or its distributor. The Prospectus and this SAI do not constitute
an offering by a Portfolio or its distributor in any jurisdiction in which such
offering may not lawfully be made.
The "Neuberger Berman" name and logo are service marks of Neuberger
Berman, LLC. "Neuberger Berman Management Inc." and the Portfolios named in this
SAI are either service marks or registered trademarks of NB Management. (C)2000
Neuberger Berman Management Inc.
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT INFORMATION.......................................................1
Investment Policies and Limitations....................................1
Temporary Defensive Positions..........................................4
Rating Agencies........................................................5
Investment Insight.....................................................5
Additional Investment Information.....................................16
PERFORMANCE INFORMATION.....................................................51
TRUSTEES AND OFFICERS.......................................................56
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.........................61
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES.................64
Expense Limitations...................................................66
Management and Control of NB Management and Neuberger Berman..........67
Sub-Adviser...........................................................68
Investment Companies Advised..........................................69
DISTRIBUTION ARRANGEMENTS...................................................72
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION .............................72
Suspension of Redemptions.............................................73
Redemptions in Kind...................................................74
DIVIDENDS AND OTHER DISTRIBUTIONS...........................................74
ADDITIONAL TAX INFORMATION..................................................74
Taxation of Each Portfolio............................................75
PORTFOLIO TRANSACTIONS......................................................80
PORTFOLIO TURNOVER..........................................................86
REPORTS TO SHAREHOLDERS.....................................................86
INFORMATION REGARDING ORGANIZATION, CAPITALIZATION, AND
OTHER MATTERS...............................................................87
CUSTODIAN AND TRANSFER AGENT................................................88
ii
<PAGE>
INDEPENDENT AUDITORS........................................................88
LEGAL COUNSEL...............................................................88
REGISTRATION STATEMENT......................................................88
FINANCIAL STATEMENTS........................................................88
APPENDIX A: RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER...............A-1
APPENDIX B: TOTAL RETURN ANALYSIS.........................................B-1
iii
<PAGE>
INVESTMENT INFORMATION
Each 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 and organized on May 23,
1994. Each Portfolio seeks its investment objective by investing in accordance
with its investment objective and policies. The Portfolios are managed by NB
Management.
Prior to May 1, 2000, the Portfolios invested through a two-tier
master/feeder structure. Rather than investing directly in securities, each
Portfolio invested all of its assets in another fund that served as a
corresponding "master series." All of the master series were separate series of
an investment company named Advisers Managers Trust. The master series, in turn,
invested in portfolio securities. Effective May 1, 2000, the Portfolios
converted to a conventional one-tier structure. Each Portfolio redeemed its
investment in its corresponding master series in return for delivery of the
series' portfolio securities, at current net asset value, subject to the
liabilities of the master series. Accordingly, each Portfolio received the
investment securities of its corresponding master series and will continue to
hold portfolio securities directly.
The following information supplements the discussion in the Prospectus of
the investment objective, policies and limitations of each Portfolio. Unless
otherwise specified, those investment objectives, policies and limitations are
not fundamental and may be changed by the trustees of the Trust ("Trustees")
without shareholder approval. The fundamental investment objectives, policies
and limitations of a Portfolio may not be changed without the approval of the
lesser of: (1) 67% of the total units of beneficial interest ("shares") of the
Portfolio represented at a meeting at which more than 50% of the outstanding
Portfolio shares are represented; or (2) a majority of the outstanding shares of
the Portfolio. These percentages are required by the Investment Company Act of
1940 ("1940 Act") and are referred to in this SAI as a "1940 Act majority vote."
Investment Policies and Limitations
Each Portfolio has its own fundamental and non-fundamental investment
policies and limitations, as discussed below.
For purposes of the investment limitation on concentration in a particular
industry, NB 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 a
Portfolio's quality restrictions, the issuer of the letter of credit or the
guarantee is considered an issuer of the obligation. If an obligation meets the
quality restrictions of a Portfolio without credit support, the Portfolio 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. The Liquid Asset Portfolio
determines
<PAGE>
the "issuer" of a municipal obligation for purposes of its policy on industry
concentration in accordance with the principles of Rule 2a-7 under the 1940 Act.
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 and certificates of deposit ("CD") are interpreted to
include similar types of time deposits.
Except for the limitation on borrowing and, with respect to Limited
Maturity Bond Portfolio and Liquid Asset Portfolio, the limitation on illiquid
securities, any maximum percentage 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 a Portfolio. If events subsequent to a transaction result in a
Portfolio exceeding the percentage limitation on borrowing, as applicable, or
illiquid securities, NB Management will take appropriate steps to reduce the
percentage of borrowings or the percentage held in illiquid securities, as may
be required by law, within a reasonable amount of time.
The Portfolios' fundamental investment policies and limitations are as
follows:
1. Borrowing. Each Portfolio may not borrow money, except that a
Portfolio may (i) borrow money from banks for temporary or emergency purposes
and not for leveraging or investment (except for International Portfolio which
may borrow for leveraging or investment) and (ii) enter into reverse repurchase
agreements for any purpose; provided that (i) and (ii) in combination do not
exceed 33-1/3% of the value of its total assets (including the amount borrowed)
less liabilities (other than borrowings). If at any time borrowings exceed
33-1/3% of the value of a Portfolio's total assets, the Portfolio will reduce
its borrowings within three days (excluding Sundays and holidays) to the extent
necessary to comply with the 33-1/3% limitation.
2. Commodities. Each Portfolio may not purchase physical commodities or
contracts thereon, unless acquired as a result of the ownership of securities or
instruments, but this restriction shall not prohibit a Portfolio 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 Portfolios do not
consider foreign currencies or forward contracts to be physical commodities.
3. Diversification. Each Portfolio 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
Portfolio's total assets would be invested in the securities of that issuer or
(ii) the Portfolio would hold more than 10% of the outstanding voting
securities of that issuer.
4. Industry Concentration. Each Portfolio 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
2
<PAGE>
purchases of (i) securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities, or (ii) investments by all Portfolios (except
Partners Portfolio and International Portfolio) in certificates of deposit or
bankers' acceptances issued by domestic branches of U.S. banks.
5. Lending. Each Portfolio 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. Each Portfolio may not purchase real estate unless
acquired as a result of the ownership of securities or instruments, but this
restriction shall not prohibit a Portfolio from purchasing securities issued by
entities or investment vehicles that own or deal in real estate or interests
therein, or instruments secured by real estate or interests therein.
7. Senior Securities. Each Portfolio may not issue senior securities,
except as permitted under the 1940 Act.
8. Underwriting. Each Portfolio may not underwrite securities of other
issuers, except to the extent that a Portfolio, in disposing of portfolio
securities, may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 ("1933 Act").
9. Investment through a Master/Feeder Structure. Notwithstanding any other
investment policy, each 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. Currently, the Portfolios
do not utilize this policy. Rather, each Portfolio invests directly in
securities.
The following non-fundamental investment policies and limitations apply to
all Portfolios unless otherwise indicated.
1. Borrowing. (All Portfolios except International Portfolio). Each
Portfolio 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, each Portfolio may not make any loans other than
securities loans.
3. Margin Transactions. Each Portfolio may not purchase securities on
margin from brokers or other lenders except that a Portfolio may obtain such
short-term credits as are necessary for the clearance of securities
transactions. For all Portfolios (except Liquid Asset Portfolio) 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.
3
<PAGE>
4. Illiquid Securities. Each Portfolio may not purchase any security if,
as a result, more than 15% (10% in the case of Liquid Asset Portfolio) of its
net assets would be invested in illiquid securities. Illiquid securities include
securities that cannot be sold within seven days in the ordinary course of
business for approximately the amount at which the Portfolio has valued the
securities, such as repurchase agreements maturing in more than seven days.
5. Investments in Any One Issuer. (International Portfolio). At the close
of each quarter of the Portfolio's taxable year, (i) no more than 25% of its
total assets will be invested in the securities of a single issuer, and (ii)
with regard to 50% of its total assets, no more than 5% of its total assets will
be invested in the securities of a single issuer. These limitations do not apply
to U.S. government securities, as defined for tax purposes, or securities of
another regulated investment company.
(Liquid Asset Portfolio). The Portfolio may not purchase the securities of
any one issuer (other than U.S. Government and Agency Securities or securities
subject to a guarantee issued by a non-controlled person as defined in Rule 2a-7
under the 1940 Act) if, as a result, more than 5% of the Portfolio's total
assets would be invested in the securities of that issuer.
6. Foreign Securities. (Guardian, Partners, and Socially Responsive
Portfolios). These Portfolios may not invest more than 10% of the value of their
total assets in securities of foreign issuers, provided that this limitation
shall not apply to foreign securities denominated in U.S. dollars, including
American Depositary Receipts ("ADRs").
7. Pledging. (Guardian Portfolio). The Portfolio may not pledge or
hypothecate any of its assets, except that the Portfolio may pledge or
hypothecate up to 5% of its total assets in connection with its entry into any
agreement or arrangement pursuant to which a bank furnishes a letter of credit
to collateralize a capital commitment made by the Portfolio to a mutual
insurance company of which the Portfolio is a member.
The other Portfolios are not subject to any restrictions on their ability
to pledge or hypothecate assets and may do so in connection with permitted
borrowings.
8. Social Policy. (Socially Responsive Portfolio). The Portfolio may not
purchase securities of issuers who derive more than 5% of their total revenue
from alcohol, tobacco, gambling or weapons, or that are involved in nuclear
power.
In addition to the preceding non-fundamental investment policies and
limitations, Liquid Asset Portfolio has adopted procedures pursuant to Rule 2a-7
under the 1940 Act which impose certain restrictions and limitations on the
Portfolio's investments.
Temporary Defensive Positions
For temporary defensive purposes, each Portfolio (except Socially
Responsive and International Portfolios) may invest up to 100% of its total
assets in cash or cash equivalents,
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U.S. Government and Agency Securities, commercial paper, other money market
funds (except for Liquid Asset Portfolio) and certain other money market
instruments, as well as repurchase agreements collateralized by the foregoing.
Limited Maturity Bond, Balanced (debt securities portion) and Liquid Asset
Portfolios may adopt shorter than normal weighted average maturities or
durations. Yields on these securities are generally lower than yields available
on the lower-rated debt securities in which Limited Maturity Bond and Balanced
(debt portion) Portfolios normally invests.
Any part of Socially Responsive Portfolio's assets may be retained
temporarily in investment grade fixed income securities of non-governmental
issuers, U.S. Government and Agency Securities, repurchase agreements, money
market instruments, commercial paper, and cash and cash equivalents when NB
Management believes that significant adverse market, economic, political, or
other circumstances require prompt action to avoid losses. Generally, the
foregoing temporary investments for Socially Responsive Portfolio are selected
with a concern for the social impact of each investment.
For temporary defensive purposes, International Portfolio may invest up to
100% of its total assets in short-term foreign and U.S. investments, such as
cash or cash equivalents, commercial paper, short-term bank obligations,
government and agency securities, and repurchase agreements. International
Portfolio may also invest in such instruments to increase liquidity or to
provide collateral to be held in segregated accounts.
Rating Agencies
Each Portfolio 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 Portfolios may rely on the ratings of any NRSRO, the Portfolios mainly refer
to ratings assigned by S&P and Moody's, which are described in Appendix A to
this SAI. The Portfolios may also invest in unrated securities that are deemed
comparable in quality by NB Management to the rated securities in which the
Portfolios may permissibly invest.
Investment Insight
Neuberger Berman's commitment to its asset management approach is
reflected in the more than $125 million the organization's employees and their
families have invested in the Neuberger Berman mutual funds.
Limited Maturity Bond, Balanced (debt securities portion) and Liquid Asset
Portfolio are designed with varying degrees of risk and return based on the
duration and/or maturity of each Portfolio. Duration measures a bond's exposure
to interest rate risk. Duration incorporates a bond's yield, coupon interest
payments, final maturity and call features into one measure. In
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general, the longer you extend a bond's duration, the greater its potential
return and exposure to interest rate fluctuations.
For example, Liquid Asset Portfolio is a money market fund with average
portfolio maturity of up to 90 days. Limited Maturity Bond and Balanced (debt
securities portion) Portfolios seek a higher income but can experience more
price fluctuation. Their portfolio of bonds has a maximum average duration of
four years. A more detailed discussion of each Portfolio follows. In all cases,
these Portfolios pursue attractive current income with varying levels of risk to
principal and differ according to their investment guidelines. These guidelines
include maturity or duration, type of bonds, and the credit quality of these
bonds.
Growth, Mid-Cap Growth, and Balanced (equity securities portion) Portfolios
Investment Program
Invests in common stock of mid-capitalization companies that are in new or
rapidly evolving industries. Seeks growth of capital by investing in companies
with financial strength, above-average growth of earnings, earnings that have
exceeded analysts' expectations, a strong position relative to competitors and a
stock price that is reasonable in light of its growth rate.
Mid-Cap Growth Stock Investments
The portfolio co-mangers consider themselves growth stock investors in the
purest sense of the term. By that, they mean they want to own the stocks of
companies that are growing earnings faster than the average American business
and, ideally, faster than the competitors in their respective industries. Their
exhaustive research efforts are focused on the mid-cap universe and,
specifically, stocks that are in new or rapidly evolving industries. The kind of
fast-growth companies the portfolio co-managers favor generally do not trade at
below market average price-to-earnings ratios. However, they do look for
companies trading at reasonable levels compared to their growth rates.
An Intensive Research Effort
The portfolio co-managers love stock with positive earnings surprises.
Their extensive research has revealed that mid-cap stocks that have exceeded
Wall Street earnings estimates have also tended to offer greater potential for
long-term capital appreciation. To find these companies they scour the mid-cap
growth stock universe to isolate stocks whose most recent earnings have beaten
consensus expectations. Then, the real work begins, where through diligent
fundamental research they strive to identify those companies most likely to
record a string of positive earnings surprises. Their ultimate goal is to invest
today in the fast growing mid-sized companies that they believe are poised to
become tomorrow's Fortune 500.
A Disciplined Sell Process
"We are dispassionate sellers," says one portfolio co-manager. "If a stock
does not live up to our earnings expectations or if we believe its valuation has
become excessive, we will sell and direct the assets to another opportunity we
find more attractive." A stock will also be sold when it reaches its
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target price. They prefer to broadly diversify the portfolio's assets among many
different companies and industries rather than heavily concentrating its
holdings in just a few of the fastest growing industry sectors. This broad
diversification helps to manage the overall risk inherent in a portfolio of
equity securities.
Investors Can Expect:
Mid-cap growth stock investments
An intensive research effort
A disciplined sell process
Investment Insight
Without question, the portfolio co-managers are growth stock investors.
They look for companies believed capable of delivering positive earnings
surprises, particularly those with the potential to do so consistently. Ideally,
they seek to identify companies that will someday rank among the Fortune 500.
Guardian Portfolio
Investment Program
Seeks long term growth of capital and, secondarily, current income.
Invests primarily in stocks of long-established companies considered to be
undervalued in comparison to stocks of similar companies. Using a value-oriented
investment approach in selecting securities, the Portfolio looks for such
factors as low price-to-earnings ratios, strong balance sheets, solid
management, and consistent earnings.
Disciplined, Large-Cap Value Orientation
As part of its stock selection process, the Portfolio pursues a
disciplined, value-driven investment style, which is Neuberger Berman's historic
strength. Specifically, the portfolio co-managers seek large-capitalization
companies whose stock prices are substantially undervalued. Characteristics of
these firms may include: solid balance sheets, above-average returns, low
valuations, and consistent earnings.
Bottom-Up Approach to Stock Selection
According to one of the portfolio co-managers, "Cheap stocks are
plentiful, but true investment bargains are a rare find." To uncover them, the
portfolio co-managers scour a universe of stocks consisting of the bottom 20% of
the market in terms of valuation. Those deemed by the managers as inexpensive
and poised for a turnaround are placed under consideration. They look for
financially sound, well-managed companies that are undervalued relative to their
earnings potential and the market as a whole.
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A Broad View of Risk Management
Managing risk involves carefully monitoring the way the stocks in the
portfolio react to one another as well as to outside factors. Companies that are
in completely different sectors may in fact react similarly to certain economic,
market or international events. In their efforts to consider these
relationships, the managers use quantitative analysis to evaluate these factors
and their impact on the overall portfolio. It is a process they believe is a
crucial component in controlling risk and one that evolves over time as new
holdings are introduced to the portfolio.
A Strong Sell Discipline
The portfolio co-managers will generally make an initial investment in a
stock of between 1-4% of total net assets. A higher weighting indicates that
they believe their research gives them an "edge" over Wall Street analysts, or
they believe the stock has an undiscovered value that others may have
overlooked. Once a stock grows beyond the high side of that range, gains are
harvested and the holding is reduced to about 3% of total net assets.
Investment Process
Portfolio Risk Management
o Monitor Portfolio's Exposure
Selection Criteria
Improving Financials
Superior Management
Discount Valuations to the Market
Stock Universe
Large-Cap Value
Investors Can Expect:
Disciplined, large-cap value orientation
Bottom-up approach to stock selection
Broad view of risk management
Strong sell discipline
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Investment Insight
The portfolio co-managers look for established companies whose intrinsic
value, by their measure, is undiscovered among the majority of investors. In
managing overall risk, a conscious effort is made to determine the risk/reward
scenario of each individual holding as well as its impact at the portfolio
level.
International Portfolio
Equity portfolios consisting solely of domestic investments generally have
not enjoyed the higher returns foreign opportunities can offer. Over the past
thirty years, for example, the average growth rates of many foreign economies
have out-paced that of the United States. While the United States accounted for
almost 66% of the world's total securities market capitalization in 1970, it
accounted for less than 51% of that total at the end of 1998.(1)
Over time, a number of international equity markets have outperformed
their U.S. counterpart. Although there are no guarantees, foreign markets could
continue to provide attractive investment opportunities.
In addition, according to Morgan Stanley Capital International, the
leading companies in any given sector are not always U.S.-based. For example,
nine of the ten largest steel companies, and eight of the ten largest electronic
and automobile companies are based outside the United States.
A principal advantage of investing overseas is diversification. A
diversified portfolio gives investors the opportunity to pursue increased
overall return while reducing risk. It is prudent to diversify by taking
advantage of investment opportunities in more than one country's stock or bond
market. By investing in several countries through a worldwide portfolio,
investors can lower their exposure and vulnerability to weakness in any one
market. Investors should be aware, however, that international investing is not
a guarantee against market risk and may be affected by economic and other
factors described in the Prospectus and this SAI. These include the prospects of
individual companies and other risks such as currency fluctuations or controls,
expropriation, nationalization and confiscator taxation.
Furthermore, buying foreign stocks and bonds can be difficult for the
individual investor and involves many decisions. Accessing international markets
is complicated; few individuals have the time or resources to evaluate
thoroughly foreign companies and markets or the ability to incur the high
transaction costs of direct investment in such markets. A mutual fund investing
in foreign securities offers an investor broad diversification at a relatively
low cost.
At least 65% of the Portfolio's total assets normally are invested in
equity securities of foreign issuers. The Portfolio invests primarily in equity
securities of companies located in developed foreign economies, as well as in
"emerging markets." NB Management's investment
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(1) Source: Morgan Stanley Capital International.
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process includes a combination of a top-down or macro-economic analysis and a
bottom-up, micro-economic approach, as well as a blend of growth and value
investment styles. The Portfolio may use leverage to facilitate transactions it
enters into for hedging purposes.
Investment Program
Seeks long-terms growth of capital by investing primarily in common stocks
of foreign companies of any capitalization, including companies in developed and
emerging industrialized markets. Investments in well-managed companies that show
potential for above-average growth or whose stock price is undervalued.
A combination of top-down and bottom-up approaches to investing.
The portfolio manager's top-down view of various regions and countries
helps her choose the areas that offer the best relative value. As she explained,
"We are value-added investors, not "Closet" indexers. We will overweight the
portfolio with securities from countries we believe have the best investment
potential and underweight those we think have limited prospects." Her bottom-up
perspective seeks well-managed companies with strong fundamentals, such as
attractive cash flows, strong balance sheets, and solid earnings growth. The
Portfolio has no capitalization constraints and thus can invest in companies of
all sizes.
A Blend of Growth and Value Investment Styles
The Portfolio manager uses a blend of styles to reduce the risks of
significant losses when a particular style falls out of favor with investors.
The growth component highlights rapidly growing companies in niche industries
with unique products or services, while the value component focuses on
undervalued, out-of-favor companies that she believes are poised for a
turnaround.
High potential rewards with commensurate risks.
The Portfolio invests in equity securities of both developed and emerging
markets. While the potential rewards are high, so are the associated risks.
Foreign markets are often less developed and foreign governments and economic
infrastructures may not be as stable compared to the U.S. Other international
risks, such as currency exchange rate and interests rate fluctuations, could
result in greater volatility than domestic funds.
An added level of diversification.
Domestic and foreign markets generally do not all move in the same
direction at the same time and are subject to different sets of risk factors.
Investors with exposure to more than a single market can potentially offset
losses in one market with gains in another. While foreign markets can be
inherently risky, investors who include international securities in their
portfolios can benefit from an additional layer of diversification along with
the potential for long-term growth.
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Investment Process
1. Screen International Universe
2. Quantitative and Qualitative Evaluation
3. Review Prime Buy Ideas
4. Portfolio Construction
Investors Can Expect:
o A combination of top-down and bottom-up approaches to investing
o A blend of growth and value investment styles
o High potential rewards with commensurate risks
o An added level of portfolio diversification
Investment Insight
In identifying attractive stocks from among the many thousands currently
available outside the U.S., it's important to have a clear strategy. The
International Portfolio uses a combination of growth and value criteria, while
also considering larger scale economic factors.
Currency Risk Management
Exchange rate movements and volatility are important factors in
international investing. The portfolio manager believes in actively managing the
Portfolio's currency exposure, in an effort to capitalize on foreign currency
trends and to reduce overall portfolio volatility. Currency risk management is
performed separately from equity analysis. The portfolio manager uses a
combination of economic analysis to guide the Portfolio's longer-term posture
and quantitative trend analysis to assist in timing decisions with respect to
whether (or when) to invest in instruments denominated in a particular foreign
currency, or whether (or when) to hedge particular foreign currencies in which
liquid foreign exchange markets exist.
To illustrate the importance of including an international component in a
well-diversified portfolio, below are the annual returns for the S&P "500" Index
and the EAFE(R) Index for the years 1985-1999. In seven of the past fifteen
years, international stocks (as represented by the EAFE Index) have outperformed
U.S. stocks (as represented by the S&P 500 Index), in some cases by a
significant margin. Conversely, in other years, U.S. stocks have substantially
outperformed international stocks. Investors with exposure to both domestic and
international issues can minimize losses because gains in one market can offset
losses in another.
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Annual Total Returns for EAFE and S&P 500 (1985-1999)(2)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S&P 500 21.01% 28.52% 33.32% 22.90% 37.44% 1.36% 10.03% 7.61% 30.34% -3.11% 31.59% 16.50% 5.18% 18.62% 31.64%
- ------------------------------------------------------------------------------------------------------------------------------------
EAFE 27.30% 20.33% 2.06% 6.36% 11.55% 8.06% 32.94% -11.85% 12.50% -23.20% 10.80% 28.59% 24.93% 69.94% 56.72%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Of course, these historical results may not continue in the future.
Investors should keep in mind the greater risks inherent in foreign markets,
such as currency exchange fluctuations, interest rates, and potentially adverse
economic and political conditions.
Limited Maturity Bond and Balanced (debt securities portion) Portfolios
The Portfolios seek the highest available current income consistent with
liquidity and low risk to principal; total return is a secondary goal. They
invest in investment-grade bonds and other debt securities from U.S. government
and corporate issuers.
Investors can expect:
o Actively managed portfolio duration
o Credit selection with a value bias
o Risk reduction through diversification
Actively managed portfolio duration. The portfolio co-managers attempt to
increase income and preserve or enhance total return by actively managing
average portfolio duration. As one manager explains. "Historically, limited
maturity portfolios have been able to deliver much of the yield available in the
investment-grade bond market with reduced volatility." Of course, there is no
assurance that past results will continue in the future. By keeping average
duration at four years or less, the managers attempt to reduce the higher level
of volatility that is generally associated with bonds of longer duration. In
general, the longer a security's duration, the higher the yield and the greater
the volatility.
- ----------
(2) Total return includes reinvestment of all dividends and other
distributions. The EFAE(R) Index, also known as the Morgan Stanley Capital
International Europe, Australasia, Far East Index, is an unmanaged index
of over 1,000 foreign stock prices and is translated into U.S. dollars.
The S&P 500 Index is an unmanaged index generally considered to be
representative of U.S. stock market activity. Indices do not take into
account brokerage commissions or other fees and expenses of investing in
the individual securities that they track. Data about the performance of
these indices are prepared or obtained by NB Management.
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Credit selection with a value bias. As part of their credit selection
process, the portfolio co-managers monitor national trends in the corporate and
government securities markets, including a range of economic and financial
factors. Specifically, they look for short- to intermediate-term securities that
appear underpriced compared to bonds of similar structure and securities, the
managers look for companies in sound financial condition that may not be well
known to the majority of investors.
Risk reduction through diversification. In an attempt to reduce credit
risk, the portfolio diversifies among many different issuers and types of
securities. The portfolios invests mainly in investment-grade bonds and other
debt securities from U.S. government and corporate issuers. In an effort to
enhance yield and add diversification, it may also invest up to 10% of net
assets in securities that are below investment -grade, provided that, at the
time of purchase, they are rated at least B by Moody's or Standard & Poor's, or
unrated securities managers believe, "The incremental yield compensates for the
additional political and economic risks we take on." On occasion, they may also
place a portion of assets in foreign securities, which could cause greater
movements in the fund's share price.
Liquid Asset Portfolio
Liquid Asset Portfolio seeks to provide investors with the highest
available current income consistent with safety and liquidity. In pursuit of its
objective, the portfolio invests in high-quality U.S.-dollar denominated money
market instruments. The portfolio co-managers select securities to maximize
yield, while seeking as stable $1.00 net asset value. They also broadly
diversity among number and types of issuers to help limit risk.
Partners Portfolio
Investment Program
Invests principally in common stocks of established companies, using the
value-oriented investment approach. Seeks growth of capital through an
investment approach that is designed to increase capital with reasonable risk.
Seeks securities believed to be undervalued based on strong fundamentals such as
a low price-to-earnings ratio, consistent cash flow, and a company's sound track
record through all phases of the market cycle.
Undiscovered values in the Mid- to Large-Cap area
The Partners' portfolio co-managers comb the universe of mid- and
large-cap stock in search of those that have yet to be "discovered" by the
majority of investors. They generally shy away from big, well-known companies
because they believe it is harder to gain a competitive edge in a stock that is
covered by many analysts. The managers prefer to focus their efforts outside of
the Fortune 100, where they think many investment bargains abound.
Strong companies at reasonable prices
Like many of their value-oriented peers, the co-managers try to buy
quality stocks for substantially less than their estimated market value.
However, they differ in their approach by applying
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another layer of analysis to their value strategy. for example, in addition to
searching for stocks trading at below market price-to-earnings ratios, they also
focus on companies with strong fundamentals, consistent cash flows, sound track
records through all phases of the market cycle and those selling at the low end
of their trading ranges. They are not interested in buying cheap stocks if they
don't meet these other measures of value as well.
Solid Research
The portfolio co-managers believe that through "exhaustive research
efforts, good companies selling for less than their true worth can be
identified." To do this the portfolio co-managers spend a lot of time
interviewing senior company managers. Their philosophy is that when they sit
across the table from a CEO or CFO and question him or her about the company,
they get to know it quite well. They find that there's simply no substitute for
that kind of firsthand knowledge. In addition, the portfolio co-managers
carefully examine a company's financial statements and contact its suppliers and
competitors. While this type of analysis requires a lot of extra legwork, they
believe it's worth the effort.
Investment Process
Executive Management Team Evaluation
o Proven Track Record
o Strategic Plan
o Inside Ownership
Value Stock Universe
Qualitative Evaluation: Catalyst for Change
Stock Universe
Quantitative Analysis
Investors Can Expect:
Undiscovered values in the mid- to large-cap arena
Strong companies at reasonable prices
Solid research
Investment Insight
The portfolio co-managers seek companies they believe are undervalued
relative to their earnings potential--where there is a gap between the actual
price of a stock and its intrinsic value in the marketplace. When a company
grows in value or the valuation gap closes, the success of their strategy is
realized.
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Socially Responsive Portfolio
Investment Program
Seeks long-term capital appreciation through investments primarily in
securities of companies that meet both financial criteria and social policy. The
portfolio co-managers initially screen companies using a value investing
criteria, then look for companies that show leadership in major areas of social
impact such as the environment, workplace diversity and employment.
Financially sound companies with a social conscience
The portfolio co-managers look for the stocks of mid- to large-cap
companies that first meet their stringent financial criteria. Their social
screens are then applied to these stocks. The ones considered worthy from a
financial standpoint are then evaluated using a proprietary database that
develops and monitors information on companies in various categories of social
criteria. Ideal investment candidates are companies that show leadership in the
areas of the environment, workplace diversity and employment. Other
considerations are based on companies' records in other areas of concern,
including public health, type of products, and corporate citizenship.
A traditional value approach
The portfolio co-managers' initial financial screens select companies
using a traditional value approach. They look for undervalued companies with
solid balance sheets, strong management, consistent cash flows, and other
value-related factors, such as low price-to-earnings and low price-to-book
ratios. Their value approach examines these price-to-earnings and low
price-to-book ratios. Their value approach examines these companies, searching
for those that may rise in price before other investors realize their worth.
They strongly believe in helping investors put their money to work, while
supporting companies that follow principles of good corporate citizenship.
An ever-evolving journey on the path to good corporate citizenship
The portfolio co-managers believe that most socially responsive investors
are not utopians. They do not expect instant perfection, but rather look for
signs that a company is evolving and moving toward a corporate commitment to
excellence. As they put it, "Good corporate citizenship is one of those things
that is a journey, not a destination. We've been working in this field for some
time, and know that the social records of most companies are written in shades
of gray. We are pleased to see that more and more companies are coming to
realize that change is a positive force for them."
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Investment Process
Social Policy
Quantitative Financial Criteria
o Low Price-to-Earnings Ratio (relative & absolute)
o Strong Balance Sheet
o Free Cash Flow
o Risk Management
Stock Universe
Focus Screens
Socially Responsive Investors Can Expect:
Financially sound companies with a social conscience
A traditional value approach
An ever-evolving journey on the path to good corporate citizenship
Investment Insight
The portfolio co-managers believe that sound practices in areas like
employment and the environment can have a positive impact on a company's bottom
line. The look for companies that meet value-investing criteria and also show a
commitment to uphold or improve their standards of corporate citizenship.
Additional Investment Information
Some or all of the Portfolios, as indicated below, may make the following
investments, among others, some of which are part of the Portfolios' principal
investment strategies and some of which are not. The principal risks of each
Portfolio's principal strategies are discussed in the prospectus. They may not
buy all of the types of securities or use all of the investment techniques that
are described. As used herein, "Equity Portfolios" refers to Balanced (equity
securities portion), Growth, Guardian, International, Mid-Cap Growth, Partners
and Socially Responsive Portfolios. "Income Portfolios" refers to Balanced (debt
securities portion), Limited Maturity Bond, and Liquid Asset Portfolios. Each
Equity Portfolio invests in a wide array of stocks, and no single stock makes up
more than a small fraction of any Portfolio's total assets. Of course, each
Portfolio's holdings are subject to change.
* * *
Illiquid Securities. (All Portfolios). Illiquid securities are securities
that cannot be expected to be sold within seven days at approximately the price
at which they are valued. These may include
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unregistered or other restricted securities and repurchase agreements maturing
in greater than seven days. Illiquid securities may also include commercial
paper under section 4(2) of the 1933 Act, as amended, and Rule 144A securities
(restricted securities that may be traded freely among qualified institutional
buyers pursuant to an exemption from the registration requirements of the
securities laws); these securities are considered illiquid unless NB Management,
acting pursuant to guidelines established by the trustees of Advisers Managers
Trust, determines they are liquid. Generally, foreign securities freely tradable
in their principal market are not considered restricted or illiquid even if they
are not registered in the U.S. Illiquid securities may be difficult for a
Portfolio to value or dispose of due to the absence of an active trading market.
The sale of some illiquid securities by the Portfolio may be subject to legal
restrictions which could be costly to the Portfolio.
Policies and Limitations. Each Portfolio may invest up to 15% (10% in the
case of Liquid Asset Portfolio) of its net assets in illiquid securities.
Repurchase Agreements. (All Portfolios). In a repurchase agreement, a
Portfolio purchases securities from a bank that is a member of the Federal
Reserve System (or with respect to International Portfolios, from a foreign bank
or a U.S. branch or agency of a foreign bank), or from a securities dealer, that
agrees to repurchase the securities from the Portfolio at a higher price on a
designated future date. Repurchase agreements generally are for a short period
of time, usually less than a week. Costs, delays, or losses could result if the
selling party to a repurchase agreement becomes bankrupt or otherwise defaults.
NB Management monitors the creditworthiness of sellers. If International
Portfolio enters into a repurchase agreement subject to foreign law and the
counter-party defaults, that Portfolio may not enjoy protections comparable to
those provided to certain repurchase agreements under U.S. bankruptcy law and
may suffer delays and losses in disposing of the collateral as a result.
Policies and Limitations. Repurchase agreements with a maturity of more
than seven days are considered to be illiquid securities. No Portfolio may enter
into a repurchase agreement with a maturity of more than seven days if, as a
result, more than 15% (10% with respect to Liquid Asset Portfolio) of the value
of its net assets would then be invested in such repurchase agreements and other
illiquid securities. A Portfolio may enter into a repurchase agreement only if
(1) the underlying securities are of a type (excluding maturity and duration
limitations) that the Portfolio's investment policies and limitations would
allow it to purchase directly, (2) the market value of the underlying
securities, including accrued interest, at all times equals or exceeds the
repurchase price, and (3) payment for the underlying securities is made only
upon satisfactory evidence that the securities are being held for the Portfolios
account by its custodian or a bank acting as the Portfolio's agent.
Securities Loans. (All Portfolios). Each Portfolio may lend securities to
banks, brokerage firms, or institutional investors judged creditworthy by NB
Management, provided that cash or equivalent collateral, equal to at least 100%
of the market value of the loaned securities, is continuously maintained by the
borrower with the Portfolio. The Portfolio may invest the cash collateral and
earn income, or it may receive an agreed upon amount of interest income from a
borrower who has delivered equivalent collateral. During the time securities are
on loan, the borrower will pay the Portfolio an amount equivalent to any
dividends or interest paid on such securities. These loans are
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subject to termination at the option of the Portfolio or the borrower. The
Portfolio may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on the cash
or equivalent collateral to the borrower or placing broker. The Portfolio does
not have the right to vote securities on loan, but would terminate the loan and
regain the right to vote if that were considered important with respect to the
investment. NB Management believes the risk of loss on these transactions is
slight because, if a borrower were to default for any reason, the collateral
should satisfy the obligation. However, as with other extensions of secured
credit, loans of portfolio securities involve some risk of loss of rights in the
collateral should the borrower fail financially.
Policies and Limitations. Each Portfolio may lend securities with a value
not exceeding 33-1/3% of its total assets to banks, brokerage firms, or other
institutional investors judged creditworthy by NB Management. Borrowers are
required continuously to secure their obligations to return securities on loan
from a Portfolio by depositing collateral in a form determined to be
satisfactory by the Trustees. The collateral, which must be marked to market
daily, must be equal to at least 100% of the market value of the loaned
securities, which will also be marked to market daily. Securities lending by
Socially Responsive Portfolio is not subject to the Social Policy.
Restricted Securities and Rule 144A Securities. (All Portfolios). Each
Portfolio may invest in restricted securities, which are securities that may not
be sold to the public without an effective registration statement under the 1933
Act. Before they are registered, such securities may be sold only in a privately
negotiated transaction or pursuant to an exemption from registration. In
recognition of the increased size and liquidity of the institutional market for
unregistered securities and the importance of institutional investors in the
formation of capital, the SEC has adopted Rule 144A under the 1933 Act, 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 a
Portfolio qualify under Rule 144A, and an institutional market develops for
those securities, the Portfolio likely will be able to dispose of the securities
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 a Portfolio's illiquidity. NB Management, acting under guidelines established
by the 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, a Portfolio may be obligated to pay all or
part of the registration expenses, and a considerable period may elapse between
the decision to sell and the time the Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell. Restricted securities
for which no market exists are priced by a method that the Trustees believe
accurately reflect fair value.
Policies and Limitations. To the extent restricted securities, including
Rule 144A securities, are illiquid, purchases thereof will be subject to each
Portfolio's 15% (10% in the case of Liquid Asset Portfolio) limit on investments
in illiquid securities.
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Commercial Paper. (All Portfolios). 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. Each Portfolio may invest in
commercial paper that cannot be resold to the public without an effective
registration statement under the 1933 Act. While restricted commercial paper
normally is deemed illiquid, NB Management may in certain cases determine that
such paper is liquid, pursuant to guidelines established by the Trustees.
Policies and Limitations. Each Equity Portfolio normally may invest up to
35% of its net assets in debt securities, including commercial paper. The Equity
Portfolios may invest in commercial paper only if it has received the highest
rating from S&P (A-1) or Moody's (P-1) or is deemed by NB Management to be of
comparable quality. International Portfolio may invest in such commercial paper
as a defensive measure, to increase liquidity, or as needed for segregated
accounts. To the extent restricted commercial paper is deemed illiquid,
purchases thereof will be subject to each Portfolio's 15% (10% in the case of
Liquid Asset Portfolio) limit on investments in illiquid securities.
Reverse Repurchase Agreements. (All Portfolios). In a reverse repurchase
agreement, a Portfolio sells portfolio securities subject to its agreement to
repurchase the securities at a later date for a fixed price reflecting a market
rate of interest. Reverse repurchase agreements may increase fluctuations in a
Portfolio's NAV and may be viewed as a form of leverage. There is a risk that
the counter-party to a reverse repurchase agreement will be unable or unwilling
to complete the transaction as scheduled, which may result in losses to the
Portfolio. NB Management monitors the creditworthiness of counterparties to
reverse repurchase agreements.
Policies and Limitations. Reverse repurchase agreements are considered
borrowings for purposes of each Portfolio's investment limitations and policies
concerning borrowings. While a reverse repurchase agreement is outstanding, a
Portfolio will deposit in a segregated account with its custodian cash or
appropriate liquid securities, marked to market daily, in an amount at least
equal to each Portfolio's obligations under the agreement.
Banking and Savings Institution Securities. (All Portfolios). These
include CDs, time deposits, bankers' acceptances, and other short-term and
long-term debt obligations issued by commercial banks and savings institutions.
CDs are receipts for funds deposited for a specified period of time at a
specified rate of return; time deposits generally are similar to CDs, but are
uncertificated. Bankers' acceptances are time drafts drawn on commercial banks
by borrowers, usually in connection with international commercial transactions.
The CDs, time deposits, and bankers' acceptances in which a Portfolio invests
typically are not covered by deposit insurance.
Policies and Limitations. Liquid Asset Portfolio may invest 25% or more of
its total assets in CDs or banker's acceptances issued by domestic branches of
U.S. banks. CDs are interpreted to include similar types of time deposits. The
Portfolio may invest in securities issued by a commercial bank or savings
institution only if (1) the bank or institution has total assets of at least
$1,000,000,000, (2) the bank or institution is on NB Management's approved list,
and (3) in the case of a foreign bank or institution, the securities are, in NB
Management's opinion, of an investment quality comparable with other debt
securities that may be purchased by the Portfolio. These limitations do not
prohibit
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investments in securities issued by foreign branches of U.S. banks that meet the
foregoing requirements.
Each Equity Portfolio will normally limit its investments in debt
securities, including banking and savings institution securities, to no more
than 35% of its total assets.
Leverage. (International Portfolio). The Portfolio may make investments
when borrowings are outstanding. Leverage creates an opportunity for increased
net income but, at the same time, creates special risk considerations. For
example, leveraging may amplify changes in the Portfolio's NAVs. Although the
principal of such borrowings will be fixed, the Portfolio's assets may change in
value during the time the borrowing is outstanding. Leverage from borrowing
creates interest expenses for the Portfolio's. To the extent the income derived
from securities purchased with borrowed funds exceeds the interest the Portfolio
will have to pay, the Portfolio's net income will be greater than it would be if
leveraging were not used. Conversely, if the income from the assets obtained
with borrowed funds is not sufficient to cover the cost of leveraging, the net
income of the Portfolio will be less than if leveraging were not used, and
therefore the amount available for distribution to the Portfolio's shareholders
as dividends will be reduced.
Policies and Limitations. Generally, the Portfolio does not intend to use
leverage for investment purposes. It may, however, use leverage to purchase
securities needed to close out short sales entered into for hedging purposes and
to facilitate other hedging transactions. Reverse repurchase agreements create
leverage and are considered borrowings for purposes of the Portfolio's
investment limitations.
Foreign Securities. (All Portfolios). Each Portfolio may invest in U.S.
dollar-denominated securities issued by foreign issuers and foreign branches of
U.S. banks, including negotiable CDs, banker's acceptances and commercial paper.
Foreign issuers are issuers organized and doing business principally outside the
U.S. and include banks, non-U.S. governments and quasi-governmental
organizations.
While investments in foreign securities are intended to reduce risk by
providing further diversification (except with respect to International
Portfolio), 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 regarding
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. It may be difficult to invoke legal process or to enforce contractual
obligations abroad.
Each Portfolio (except Liquid Asset Portfolio) also may invest in equity
(except Limited Maturity Bond Portfolio), 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, with respect to all
Portfolios except Limited Maturity Bond Portfolio, (2) CDs, commercial
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paper, fixed-time deposits, and bankers' acceptances issued by foreign banks,
(3) obligations of other corporations, and (4) 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 (and gains realized on
disposition thereof) 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 each
Portfolio endeavors to achieve the most favorable net results on portfolio
transactions.
Foreign securities often trade with less frequency and in less volume than
domestic securities and 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. Changes in foreign exchange rates also will affect
the value of securities denominated or quoted in currencies other than the U.S.
dollar.
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 a Portfolio is uninvested and no return
is earned thereon. The inability of a Portfolio to make intended security
purchases due to settlement problems could cause a Portfolio to miss attractive
investment opportunities. Inability to dispose of portfolio securities due to
settlement problems could result either in losses to a Portfolio due to
subsequent declines in value of the portfolio securities, or, if a Portfolio has
entered into a contract to sell the securities, could result in possible
liability to the purchaser.
Prices of foreign securities and exchange rates for foreign currencies may
be affected by the interest rates prevailing in other countries. 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.
The Portfolios (except Liquid Asset and Limited Maturity Bond Portfolios)
may invest in ADRs, EDRs, GDRs, and IDRs. ADRs (sponsored or unsponsored) are
receipts typically issued by a U.S. bank or trust company evidencing its
ownership of the underlying foreign securities. Most ADRs are denominated in
U.S. dollars and are traded on a U.S. stock exchange. Issuers of the securities
underlying sponsored ADRs, but not unsponsored ADRs, are contractually obligated
to disclose material information in the United States. Therefore, the market
value of unsponsored ADRs may not reflect the effect of such information. EDRs
and IDRs are receipts typically issued by a European bank or trust company
evidencing its ownership of the underlying foreign securities. GDRs are receipts
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issued by either a U.S. or non-U.S. banking institution evidencing its ownership
of the underlying foreign securities and are often denominated in U.S. dollars.
Policies and Limitations. In order to limit the risks inherent in
investing in foreign currency denominated securities, Balanced (equity
securities portion), Growth, Guardian, Partners, and Socially Responsive
Portfolios may not purchase any such security if, as a result, more than 10% of
its total assets (taken at market value) would be invested in foreign currency
denominated securities. Limited Maturity Bond Portfolio may not purchase
securities denominated in or indexed to foreign currencies, if, as a result,
more than 25% of its total assets (taken at market value) would be invested in
such securities. Mid-Cap Growth Portfolio may not purchase foreign currency
denominated securities if, as a result, more than 20% of its total assets (taken
at market value) would be invested in such securities. Within those limitations,
however, no Portfolio is restricted in the amount it may invest in securities
denominated in any one foreign currency. International Portfolio invests
primarily in foreign securities. Liquid Asset Portfolio may not invest in
foreign currency-denominated securities.
Investments in securities of foreign issuers are subject to each
Portfolio's quality, and, with respect to the Income Portfolios, maturity and
duration standards. Each Portfolio (except International Portfolio) may invest
only in securities of issuers in countries whose governments are considered
stable by NB Management.
Japanese Investments. (International Portfolio). All of the Portfolios may
invest in foreign securities, including securities of Japanese issuers. From
time to time International Portfolio may invest a significant portion of its
assets in securities of Japanese issuers. The performance of the Portfolio may
therefore be significantly affected by events influencing the Japanese economy
and the exchange rate between the Japanese yen and the U.S. dollar. Japan has
experienced a severe recession, including a decline in real estate values and
other events that adversely affected the balance sheets of many financial
institutions and indicate that there may be structural weaknesses in the
Japanese financial system. The effects of this economic downturn may be felt for
a considerable period and are being exacerbated by the currency exchange rate.
Japan is heavily dependent on foreign oil. Japan is located in a seismically
active area, and severe earthquakes may damage important elements of the
country's infrastructure. Japan's economic prospects may be affected by the
political and military situations of its near neighbors, notably North and South
Korea, China and Russia.
Variable or Floating Rate Securities; Demand and Put Features and
Guarantees. (All Portfolios). Variable rate securities provide for automatic
adjustment of the interest rate at fixed intervals (e.g., daily, monthly, or
semi-annually); floating rate securities provide for automatic adjustment of the
interest rate whenever a specified interest rate or index changes. The interest
rate on variable and floating rate securities (collectively, "Adjustable Rate
Securities") ordinarily is determined by reference to a particular bank's prime
rate, the 90-day U.S. Treasury Bill rate, the rate of return on commercial paper
or bank CDs, an index of short-term tax-exempt rates or some other objective
measure.
Adjustable Rate Securities frequently permit the holder to demand payment
of the obligations' principal and accrued interest at any time or at specified
intervals not exceeding one year. The demand feature usually is backed by a
credit instrument (e.g., a bank letter of credit) from a creditworthy issuer
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and sometimes by insurance from a creditworthy insurer. Without these credit
enhancements, some Adjustable Rate Securities might not meet the quality
standards applicable to obligations purchased by the Portfolio. Accordingly, in
purchasing these securities, each Portfolio relies primarily on the
creditworthiness of the credit instrument issuer or the insurer. A Portfolio can
also buy fixed rate securities accompanied by demand features or put options,
permitting the Portfolio to sell the security to the issuer or third party at a
specified price. A Portfolio may rely on the creditworthiness of issuers of
credit enhancements in purchasing these securities.
Among the Adjustable Rate Securities in which Liquid Asset Portfolio may
invest are so-called guaranteed investment contracts ("GICs") issued by
insurance companies. In the event of insolvency of the issuing insurance
company, the ability of the Portfolio to recover its assets may depend on the
treatment of GICs under state insurance laws.
Policies and Limitations. Except for Liquid Asset Portfolio, no Portfolio
may invest more than 5% of its total assets in securities backed by credit
instruments from any one issuer or by insurance from any one insurer. For
purposes of this limitation, each Portfolio except for Liquid Asset Portfolio
excludes securities that do not rely on the credit instrument or insurance for
their ratings, i.e., stand on their own credit. Liquid Asset Portfolio may
invest in securities subject to demand features or guarantees as permitted by
Rule 2a-7 under the 1940 Act. Each Equity Portfolio normally may invest up to
35% of its total assets in debt securities, including variable or floating rate
securities.
For purposes of determining its dollar-weighted average maturity, Liquid
Asset Portfolio calculates the remaining maturity of variable and floating rate
instruments as provided in Rule 2a-7 under the 1940 Act. In calculating its
dollar-weighted average maturity and duration, a Portfolio is permitted to treat
certain Adjustable Rate Securities as maturing on a date prior to the date on
which principal must unconditionally be paid. In applying such maturity
shortening devices, NB Management considers whether the interest rate reset is
expected to cause the security to trade at approximately its par value.
GICs are generally regarded as illiquid. Thus, Liquid Asset Portfolio may
not invest in such GICs if, as a result, more than 10% of the value of its net
assets would then be invested in such GICs and other illiquid securities.
Mortgage-Backed Securities. (Liquid Asset, Limited Maturity Bond and
Balanced (debt securities portion) Portfolios). Mortgage-backed securities
represent direct or indirect participations in, or are secured by and payable
from, pools of mortgage loans. They may be issued or guaranteed by a U.S.
Government agency or instrumentality such as the GNMA, Fannie Mae, and Freddie
Mac, though not necessarily backed by the full faith and credit of the United
States, or may be issued by private issuers. Private issuers are generally
originators of and investors in mortgage loans and include savings associations,
mortgage bankers, commercial banks, investment bankers, and special purpose
entities. Private mortgage-backed securities may be supported by U.S. Government
Agency mortgage-backed securities or some form of non-governmental credit
enhancement.
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Mortgage-backed securities may have either fixed or adjustable interest
rates. Tax or regulatory changes may adversely affect the mortgage securities
market. In addition, changes in the market's perception of the issuer may affect
the value of mortgage-backed securities. The rate of return on mortgage-backed
securities may be affected by prepayments of principal on the underlying loans,
which generally increase as market interest rates decline; as a result, when
interest rates decline, holders of these securities normally do not benefit from
appreciation in market value to the same extent as holders of other non-callable
debt securities.
Because many mortgages are repaid early, the actual maturity and duration
of mortgage-backed securities are typically shorter than their stated final
maturity and their duration calculated solely on the basis of the stated life
and payment schedule. In calculating its dollar-weighted average maturity and
duration, a Portfolio may apply certain industry conventions regarding the
maturity and duration of mortgage-backed instruments. Different analysts use
different models and assumptions in making these determinations. The Portfolios
use an approach that NB Management believes is reasonable in light of all
relevant circumstances. If this determination is not borne out in practice, it
could positively or negatively affect the value of the Portfolio when market
interest rates change. Increasing market interest rates generally extend the
effective maturities of mortgage-backed securities, increasing their sensitivity
to interest rate changes.
Mortgage-backed securities may be issued in the form of collateralized
mortgage obligations ("CMOs") or collateralized mortgage-backed bonds ("CBOs").
CMOs are obligations that are fully collateralized, directly or indirectly, by a
pool of mortgages on which payments of principal and interest are passed through
to the holders of the CMOs, although not necessarily on a pro rata basis, on the
same schedule as they are received. CBOs are general obligations of the issuer
that are fully collateralized, directly or indirectly, by a pool of mortgages.
The mortgages serve as collateral for the issuer's payment obligations on the
bonds, but interest and principal payments on the mortgages are not passed
through either directly (as with mortgage-backed "pass-through" securities
issued or guaranteed by U.S. Government agencies or instrumentalities) or on a
modified basis (as with CMOs). Accordingly, a change in the rate of prepayments
on the pool of mortgages could change the effective maturity or the duration of
a CMO but not that of a CBO (although, like many bonds, CBOs may be callable by
the issuer prior to maturity). To the extent that rising interest rates cause
prepayments to occur at a slower than expected rate, a CMO could be converted
into a longer-term security that is subject to greater risk of price volatility.
Governmental, government-related, and private entities (such as commercial
banks, savings institutions, private mortgage insurance companies, mortgage
bankers, and other secondary market issuers), including securities
broker-dealers and special purpose entities that generally are affiliates of the
foregoing established to issue such securities may create mortgage loan pools to
back CMOs and CBOs. Such issuers may be the originators and/or servicers of the
underlying mortgage loans as well as the guarantors of the mortgage-backed
securities. Pools created by non-governmental issuers generally offer a higher
rate of interest than government and government-related pools because of the
absence of direct or indirect government or agency guarantees. Various forms of
insurance or guarantees, including individual loan, title, pool, and hazard
insurance, and letters of credit, may support timely payment of interest and
principal of non-governmental pools. The insurance and guarantees are issued by
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governmental entities, private insurers, and the mortgage poolers. NB Management
considers such insurance and guarantees, as well as the creditworthiness of the
issuers thereof, in determining whether a mortgage-backed security meets a
Portfolio's investment quality standards. There can be no assurance that the
private insurers or guarantors can meet their obligations under the insurance
policies or guarantee arrangements. A Portfolio may buy mortgage-backed
securities without insurance or guarantees, if NB Management determines that the
securities meet the Portfolio's quality standards. NB Management will,
consistent with the Portfolio's investment objectives, policies and limitations
and quality standards, consider making investments in new types of
mortgage-backed securities as such securities are developed and offered to
investors.
Policies and Limitations. A Portfolio may not purchase mortgage-backed
securities that, in NB Management's opinion, are illiquid if, as a result, more
than 15% (10% in the case of Liquid Asset Portfolio) of the value of the
Portfolio's net assets would be invested in illiquid securities.
Dollar Rolls. (Limited Maturity Bond and Balanced (debt securities
portion) Portfolios). In a "dollar roll", a Portfolio sells securities for
delivery in the current month and simultaneously agrees to repurchase
substantially similar (i.e., same type and coupon) securities on a specified
future date from the same party. During the period before the repurchase, the
Portfolio forgoes principal and interest payments on the securities. The
Portfolios is compensated by the difference between the current sales price and
the forward price for the future purchase (often referred to as the "drop"), as
well as by the interest earned on the cash proceeds of the initial sale. Dollar
rolls may increase fluctuations in a Portfolio's NAV and may be viewed as a form
of leverage. A "covered roll" is a specific type of dollar roll for which there
is an offsetting cash position or a cash-equivalent securities position that
matures (or can be sold and settled) on or before the forward settlement date of
the dollar roll transaction. There is a risk that the counterparty will be
unable or unwilling to complete the transaction as scheduled, which may result
in losses to the Portfolio. NB Management monitors the creditworthiness of
counterparties to dollar rolls.
Policies and Limitations. Dollar rolls are considered borrowings for
purposes of each Portfolio's investment policies and limitations concerning
borrowings.
Forward Commitments (International Portfolio) and When-Issued Securities.
(International, Limited Maturity Bond, and Balanced (debt securities portion)
Portfolio). The Portfolio may purchase securities (including, with respect to
Limited Maturity Bond and Balanced Portfolios, mortgage-backed securities such
as GNMA, Fannie Mae, and Freddie Mac certificates) on a when-issued basis and
International Portfolios may purchase or sell securities on a forward commitment
basis. These transactions involve a commitment by a Portfolio to purchase or
sell securities at a future date (ordinarily within two months although the
Portfolios may agree to a longer settlement period). The price of the underlying
securities (usually expressed in terms of yield) and the date when the
securities will be delivered and paid for (the settlement date) are fixed at the
time the transaction is negotiated. When-issued purchases and forward commitment
transactions are negotiated directly with the other party, and such commitments
are not traded on exchanges.
When-issued purchases and forward commitment transactions enable a
Portfolio to "lock in" what NB Management believes to be an attractive price or
yield on a particular security for a period of
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time, regardless of future changes in interest rates. For instance, in periods
of rising interest rates and falling prices, International Portfolio might sell
securities it owns on a forward commitment basis to limit its exposure to
falling prices. In periods of falling interest rates and rising prices, a
Portfolio might purchase a security on a when-issued or forward commitment basis
and sell a similar security to settle such purchase, thereby obtaining the
benefit of currently higher yields. If the seller fails to complete the sale,
the Portfolio may lose the opportunity to obtain a favorable price.
The value of securities purchased on a when-issued or forward commitment
basis and any subsequent fluctuations in their value are reflected in the
computation of a Portfolio's NAV starting on the date of the agreement to
purchase the securities. Because the Portfolio has not yet paid for the
securities, this produces an effect similar to leverage. A Portfolio does not
earn interest on the securities it has committed to purchase until they are paid
for and delivered on the settlement date. When International Portfolio makes a
forward commitment to sell securities it owns, the proceeds to be received upon
settlement are included in the Portfolio's assets. Fluctuations in the market
value of the underlying securities are not reflected in the Portfolio's NAV as
long as the commitment to sell remains in effect.
Policies and Limitations. A Portfolio will purchase securities on a
when-issued basis or purchase or sell securities on a forward commitment basis
only with the intention of completing the transaction and actually purchasing or
selling the securities. If deemed advisable as a matter of investment strategy,
however, a Portfolio may dispose of or renegotiate a commitment after it has
been entered into. A Portfolio also may sell securities it has committed to
purchase before those securities are delivered to the Portfolio on the
settlement date. A Portfolio may realize a capital gain or loss in connection
with these transactions.
When a Portfolio's purchases securities on a when-issued basis, it will
deposit, in a segregated account with its custodian, until payment is made,
appropriate liquid securities having a value (determined daily) at least equal
to the amount of the Portfolio's purchase commitments. In the case of a forward
commitment to sell portfolio securities, the custodian will hold the portfolio
securities themselves in a segregated account while the commitment is
outstanding. These procedures are designed to ensure that a Portfolio will
maintain sufficient assets at all times to cover its obligations under
when-issued purchases and forward commitment transactions.
Futures, Options on Futures, Options on Securities and Indices,
Forward Contracts, and Options on Foreign
Currencies (collectively, "Financial Instruments")
Futures Contracts and Options Thereon. (The Equity Portfolios and Limited
Maturity Bond and Balanced (debt securities portion) Portfolios). Each of
Socially Responsive and Mid-Cap Growth Portfolios may purchase and sell interest
rate futures contracts, stock and bond index futures contracts, and foreign
currency futures contracts and may purchase and sell options thereon in an
attempt to hedge against changes in the prices of securities or, in the case of
foreign currency futures and options thereon, to hedge against changes in
prevailing currency exchange rates. Because the futures markets may be more
liquid than the cash markets, the use of futures contracts permits each
Portfolio to enhance portfolio liquidity and maintain a defensive position
without having to sell
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portfolio securities. These Portfolios view investment in (i) interest rate and
securities index futures and options thereon as a maturity management device
and/or a device to reduce risk or preserve total return in an adverse
environment for the hedged securities, and (ii) foreign currency futures and
options thereon as a means of establishing more definitely the effective return
on, or the purchase price of, securities denominated in foreign currencies that
are held or intended to be acquired by the Portfolio.
Limited Maturity Bond and Balanced (debt securities portion) Portfolios
may purchase and sell interest rate and bond index futures contracts and options
thereon, and may purchase and sell foreign currency futures contracts and
options thereon in an attempt to hedge against changes in the prices of
securities or, in the case of foreign currency futures and options thereon, to
hedge against changes in prevailing currency exchange rates. Because the futures
markets may be more liquid than the cash markets, the use of futures permits a
Portfolio to enhance portfolio liquidity and maintain a defensive position
without having to sell portfolio securities. The Portfolios view investment in
(1) interest rate and bond 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 the 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
Portfolios.
International Portfolio may enter into futures contracts on currencies,
debt securities, interest rates, and securities indices that are traded on
exchanges regulated by the Commodity Futures Trading Commission ("CFTC") or on
foreign exchanges. Trading on foreign exchanges is subject to the legal
requirements of the jurisdiction in which the exchange is located and to the
rules of such foreign exchange.
International Portfolio may sell futures contracts in order to offset a
possible decline in the value of its portfolio securities. When a futures
contract is sold by the Portfolio, the value of the contract will tend to rise
when the value of the portfolio securities declines and will tend to fall when
the value of such securities increases. The Portfolio may purchase futures
contracts in order to fix what NB Management believes to be a favorable price
for securities the Portfolio intends to purchase. If a futures contract is
purchased by the Portfolio, the value of the contract will tend to change
together with changes in the value of such securities. To compensate for
differences in historical volatility between positions International Portfolio
wishes to hedge and the standardized futures contracts available to it, the
Portfolio may purchase or sell futures contracts with a greater or lesser value
than the securities it wishes to hedge.
With respect to currency futures, International Portfolio may sell a
futures contract or a call option, or it may purchase a put option on such
futures contract, if NB Management anticipates that exchange rates for a
particular currency will fall. Such a transaction will be used as a hedge (or,
in the case of a sale of a call option, a partial hedge) against a decrease in
the value of portfolio securities denominated in that currency. If NB Management
anticipates that a particular currency will rise, International Portfolio may
purchase a currency futures contract or a call option to protect against an
increase in the price of securities which are denominated in that currency and
which the Portfolio intends to purchase. The Portfolio may also purchase a
currency futures contract or a call option thereon for non-hedging purposes when
NB Management anticipates that a particular currency will
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appreciate in value, but securities denominated in that currency do not present
an attractive investment and are not included in the Portfolio.
For the purposes of managing cash flow, each Portfolio may purchase and
sell stock index futures contracts, and may purchase and sell options thereon to
increase its exposure to the performance of a recognized securities index, such
as the S&P 500 Index.
A "sale" of a futures contract (or a "short" futures position) entails the
assumption of a contractual obligation to deliver the securities or currency
underlying the contract at a specified price at a specified future time. A
"purchase" of a futures contract (or a "long" futures position) entails the
assumption of a contractual obligation to acquire the securities or currency
underlying the contract at a specified price at a specified future time. Certain
futures, including stock and bond index futures, are settled on a net cash
payment basis rather than by the sale and delivery of the securities underlying
the futures.
U.S. futures contracts (except certain currency futures) are traded on
exchanges that have been designated as "contract markets" by the CFTC; futures
transactions must be executed through a futures commission merchant that is a
member of the relevant contract market. In both U.S. and foreign markets, an
exchange's affiliated clearing organization guarantees performance of the
contracts between the clearing members of the exchange.
Although futures contracts by their terms may require the actual delivery
or acquisition of the underlying securities or currency, in most cases the
contractual obligation is extinguished by being offset before the expiration of
the contract. A futures position is offset by buying (to offset an earlier sale)
or selling (to offset an earlier purchase) an identical futures contract calling
for delivery in the same month. This may result in a profit or loss. While
futures contracts entered into by a Portfolio will usually be liquidated in this
manner, the Portfolio may instead make or take delivery of underlying securities
whenever it appears economically advantageous for it to do so.
"Margin" with respect to a futures contract is the amount of assets that
must be deposited by a Portfolio with, or for the benefit of, a futures
commission merchant in order to initiate and maintain the Portfolio's futures
positions. The margin deposit made by the Portfolio when it enters into a
futures contract ("initial margin") is intended to assure its performance of the
contract. If the price of the futures contract changes -- increases in the case
of a short (sale) position or decreases in the case of a long (purchase)
position -- so that the unrealized loss on the contract causes the margin
deposit not to satisfy margin requirements, the Portfolio will be required to
make an additional margin deposit ("variation margin"). However, if favorable
price changes in the futures contract cause the margin deposit to exceed the
required margin, the excess will be paid to the Portfolio. In computing their
NAVs, the Portfolios mark to market the value of their open futures positions.
Each Portfolio also must make margin deposits with respect to options on futures
that it has written (but not with respect to options on futures that it has
purchased). If the futures commission merchant holding the margin deposit goes
bankrupt, the Portfolio could suffer a delay in recovering its funds and could
ultimately suffer a loss.
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An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in the contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option exercise period. The writer of the
option is required upon exercise to assume a short futures position (if the
option is a call) or a long futures position (if the option is a put). Upon
exercise of the option, the accumulated cash balance in the writer's futures
margin account is delivered to the holder of the option. That balance represents
the amount by which the market price of the futures contract at exercise
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option. Options on futures have characteristics and risks
similar to those of securities options, as discussed herein.
Although each Portfolio believes that the use of futures contracts will
benefit it, if NB Management's judgment about the general direction of the
markets or about interest rate or currency exchange rate trends is incorrect,
the Portfolio's overall return would be lower than if it had not entered into
any such contracts. Further, an appropriate futures contract may not be
available even if the portfolio manager wishes to enter into one. The prices of
futures contracts are volatile and are influenced by, among other things, actual
and anticipated changes in interest or currency exchange rates, which in turn
are affected by fiscal and monetary policies and by national and international
political and economic events. At best, the correlation between changes in
prices of futures contracts and of securities being hedged can be only
approximate due to differences between the futures and securities markets or
differences between the securities or currencies underlying a Portfolio's
futures position and the securities held by or to be purchased for the
Portfolio. The currency futures market may be dominated by short-term traders
seeking to profit from changes in exchange rates. This would reduce the value of
such contracts used for hedging purposes over a short-term period. Such
distortions are generally minor and would diminish as the contract approaches
maturity.
Because of the low margin deposits required, futures trading involves an
extremely high degree of leverage; as a result, a relatively small price
movement in a futures contract may result in immediate and substantial loss, or
gain, to the investor. Losses that may arise from certain futures transactions
are potentially unlimited.
Most U.S. futures exchanges limit the amount of fluctuation in the price
of a futures contract or option thereon during a single trading day; once the
daily limit has been reached, no trades may be made on that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day, however; it thus does not limit potential losses. In
fact, it may increase the risk of loss, because prices can move to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing liquidation of unfavorable futures and options positions and
subjecting traders to substantial losses. If this were to happen with respect to
a position held by a Portfolio, it could (depending on the size of the position)
have an adverse impact on the NAV of the Portfolio.
Policies and Limitations. Socially Responsive and Mid-Cap Growth Portfolio
each may purchase and sell futures contracts and may purchase and sell options
thereon in an attempt to hedge against changes in the prices of securities or,
in the case of foreign currency futures and options thereon, to hedge against
prevailing currency exchange rates. These Portfolios do not engage in
transactions in futures and options on futures for speculation. The use of
futures and options on futures by Socially Responsive Portfolio is not subject
to the Social Policy.
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International Portfolio may purchase and sell futures for bona fide
hedging purposes, as defined in regulations of the CFTC, and for non-hedging
purposes (i.e., in an effort to enhance income). The Portfolio may also purchase
and write put and call options on such futures contracts for bona fide hedging
and non-hedging purposes.
For purposes of managing cash flow, each Portfolio may purchase and sell
stock index futures contracts, and may purchase and sell options thereon to
increase its exposure to the performance of a recognized securities index, such
as the S&P 500 Index.
Limited Maturity Bond and Balanced Portfolios may purchase and sell
interest rate and bond index futures and may purchase and sell options thereon
in an attempt to hedge against changes in securities prices resulting from
changes in prevailing interest rates. The Portfolios engage in foreign currency
futures and options transactions in an attempt to hedge against changes in
prevailing currency exchange rates. Neither Portfolio engages in transactions in
futures or options thereon for speculation.
Call Options on Securities. (All Portfolios except Liquid Asset
Portfolio). Socially Responsive, Mid-Cap Growth, Limited Maturity Bond, Balanced
and International Portfolios may write covered call options and may purchase
call options on securities. Each of the other Portfolios may write covered call
options and may purchase call options in related closing transactions. The
purpose of writing call options is to hedge (i.e., to reduce, at least in part,
the effect of price fluctuations of securities held by the Portfolio on the
Portfolio's NAV) or to earn premium income. Portfolio securities on which call
options may be written and purchased by a are purchased solely on the basis of
investment considerations consistent with the Portfolio investment objective.
When a Portfolio writes a call option, it is obligated to sell a security
to a purchaser at a specified price at any time until a certain date if the
purchaser decides to exercise the option. The Portfolio receives a premium for
writing the call option. When writing call options, each Portfolio writes only
"covered" call options on securities it owns. So long as the obligation of the
call option continues, the Portfolio may be assigned an exercise notice,
requiring it to deliver the underlying security against payment of the exercise
price. The Portfolio may be obligated to deliver securities underlying an option
at less than the market price.
The writing of covered call options is a conservative investment technique
that is believed to involve relatively little risk, but is capable of enhancing
a Portfolio's total return. When writing a covered call option, a Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, but conversely
retains the risk of loss should the price of the security decline.
If a call option that a Portfolio has written expires unexercised, the
Portfolio will realize a gain in the amount of the premium; however, that gain
may be offset by a decline in the market value of the underlying security during
the option period. If the call option is exercised, the Portfolio will realize a
gain or loss from the sale of the underlying security.
When a Portfolio purchases a call option, it pays a premium for the right
to purchase a security from the writer at a specified price until a specified
date.
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Policies and Limitations. (Limited Maturity Bond and Balanced (debt
securities portion) Portfolios). Each Portfolio may write covered call options
and may purchase call options on debt securities in its portfolio or on foreign
currencies in its portfolio for hedging purposes. Each Portfolio may write
covered call options for the purpose of producing income. Each Portfolio will
write a call option on a security only if it holds that security or currency or
has the right to obtain the security or currency at no additional cost.
Equity Portfolio. Each Portfolio may write covered call options and may
purchase call options in related closing transactions. Each Portfolio writes
only "covered" call options on securities it owns (in contrast to the writing of
"naked" or uncovered call options, which the Portfolio will not do).
A Portfolio would purchase a call option to offset a previously written
call option. Each of Socially Responsive, Mid-Cap Growth, Limited Maturity Bond
and Balanced Portfolios also may purchase a call option to protect against an
increase in the price of the securities it intends to purchase. The use of call
options on securities by Socially Responsive Portfolio is not subject to the
Social Policy. International Portfolio may purchase call options for hedging or
non-hedging purposes.
Put Options on Securities. (Socially Responsive, Mid-Cap Growth,
International, Limited Maturity Bond and Balanced Portfolios). Each of these
Portfolios may write and purchase put options on securities. The Portfolios will
receive a premium for writing a put option, which obligates the Portfolio to
acquire a security at a certain price at any time until a certain date if the
purchaser decides to exercise the option. The Portfolio may be obligated to
purchase the underlying security at more than its current value.
When a Portfolio purchases a put option, it pays a premium to the writer
for the right to sell a security to the writer for a specified amount at any
time until a certain date. The Portfolio would purchase a put option in order to
protect itself against a decline in the market value of a security it owns.
Portfolio securities on which put options may be written and purchased by
a Portfolio are purchased solely on the basis of investment considerations
consistent with the Portfolio's investment objective. When writing a put option,
the Portfolio, in return for the premium, takes the risk that it must purchase
the underlying security at a price that may be higher than the current market
price of the security. If a put option that the Portfolio has written expires
unexercised, the Portfolios will realize a gain in the amount of the premium.
Policies and Limitations. Socially Responsive, Mid-Cap Growth and
International Portfolios generally write and purchase put options on securities
for hedging purposes (i.e., to reduce, at least in part, the effect of price
fluctuations of securities held by the Portfolio on the Portfolio's NAV).
However, International Portfolio also may use put options for non-hedging
purposes. The use of put options on securities by Socially Responsive Portfolio
is not subject to the Social Policy.
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Limited Maturity Bond and Balanced Portfolios generally write and purchase
put options on securities or on foreign currencies for hedging purposes (i.e.,
to reduce, at least in part, the effect of price fluctuations of securities held
by the Portfolio on the Portfolio's NAV).
General Information About Securities Options. The exercise price of an
option may be below, equal to, or above the market value of the underlying
security at the time the option is written. Options normally have expiration
dates between three and nine months from the date written. American-style
options are exercisable at any time prior to their expiration date.
International Portfolio also may purchase European-style options, which are
exercisable only immediately prior to their expiration date. The obligation
under any option written by a Portfolio terminates upon expiration of the option
or, at an earlier time, when the Portfolio offsets the option by entering into a
"closing purchase transaction" to purchase an option of the same series. If an
option is purchased by a Portfolio and is never exercised or closed out, the
Portfolio will lose the entire amount of the premium paid.
Options are traded both on U.S. national securities exchanges and in the
over-the-counter ("OTC") market. International Portfolio also may purchase and
sell options that are traded on foreign exchanges. Exchange-traded options are
issued by a clearing organization affiliated with the exchange on which the
option is listed; the clearing organization in effect guarantees completion of
every exchange-traded option. In contrast, OTC options are contracts between a
Portfolio and a counter-party, with no clearing organization guarantee. Thus,
when a Portfolio sells (or purchases) an OTC option, it generally will be able
to "close out" the option prior to its expiration only by entering into a
closing transaction with the dealer to whom (or from whom) the Portfolio
originally sold (or purchased) the option. There can be no assurance that the
Portfolio would be able to liquidate an OTC option at any time prior to
expiration. Unless a Portfolio is able to effect a closing purchase transaction
in a covered OTC call option it has written, it will not be able to liquidate
securities used as cover until the option expires or is exercised or until
different cover is substituted. In the event of the counter-party's insolvency,
a Portfolio may be unable to liquidate its options position and the associated
cover. NB Management monitors the creditworthiness of dealers with which a
Portfolio may engage in OTC options transactions.
The premium received (or paid) by a Portfolio when it writes (or
purchases) an option is the amount at which the option is currently traded on
the applicable market. The premium may reflect, among other things, the current
market price of the underlying security, the relationship of the exercise price
to the market price, the historical price volatility of the underlying security,
the length of the option period, the general supply of and demand for credit,
and the interest rate environment. The premium received by a Portfolio for
writing an option is recorded as a liability on the Portfolio's statement of
assets and liabilities. This liability is adjusted daily to the option's current
market value, which is the last reported sales price before the time the
Portfolio's 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 Portfolio to write
another call option on the underlying security with a different exercise price
or expiration date or both.
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There is, of course, no assurance that a Portfolio will be able to effect
closing transactions at favorable prices. If a Portfolio cannot enter into such
a transaction, it may be required to hold a security that it might otherwise
have sold (or purchase a security that it would not have otherwise bought), in
which case it would continue to be at market risk on the security.
A Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from writing the call or put option. Because increases in the market
price of a call option generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset, in whole or in part, by appreciation of the underlying
security owned by the Portfolio; however, the Portfolio could be in a less
advantageous position than if it had not written the call option.
A Portfolio pays brokerage commissions or spreads in connection with
purchasing or writing options, including those used to close out existing
positions. From time to time, the Portfolio may purchase an underlying security
for delivery in accordance with an exercise notice of a call option assigned to
it, rather than delivering the security from its portfolio. In those cases,
additional brokerage commissions are incurred.
The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the options markets.
Policies and Limitations. Each Portfolio may use American-style options.
International Portfolio may also purchase European-style options and may
purchase and sell options that are traded on foreign exchanges.
The assets used as cover (or held in a segregated account) for OTC options
written by a Portfolio will be considered illiquid unless the OTC options are
sold to qualified dealers who agree that the Portfolio may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set forth in
the option agreement. The cover for an OTC call option written subject to this
procedure will be considered illiquid only to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.
The use of put and call options by Socially Responsive Portfolio is not
subject to the Social Policy.
Put and Call Options on Securities Indices. (Equity Portfolios).
International Portfolio may purchase put and call options on securities indices
for the purpose of hedging against the risk of price movements that would
adversely affect the value of the Portfolio's securities or securities the
Portfolio intends to buy. The Portfolio may write securities index options to
close out positions in such options that it has purchased.
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For purposes of managing cash flow, each Equity Portfolio may purchase put
and call options on securities indices to increase the Portfolio's exposure to
the performance of a recognized securities index, such as the S&P 500 Index.
Unlike a securities option, which gives the holder the right to purchase
or sell a specified security at a specified price, an option on a securities
index gives the holder the right to receive a cash "exercise settlement amount"
equal to (1) the difference between the exercise price of the option and the
value of the underlying securities index on the exercise date (2) multiplied by
a fixed "index multiplier." A securities index fluctuates with changes in the
market values of the securities included in the index. Options on stock indices
are currently traded on the Chicago Board Options Exchange, the New York Stock
Exchange ("NYSE"), the American Stock Exchange, and other U.S. and foreign
exchanges.
The effectiveness of hedging through the purchase of securities index
options will depend upon the extent to which price movements in the securities
being hedged correlate with price movements in the selected securities index.
Perfect correlation is not possible because the securities held or to be
acquired by the Portfolio will not exactly match the composition of the
securities indices on which options are available.
Securities index options have characteristics and risks similar to those
of securities options, as discussed herein.
Policies and Limitations. International Portfolio may purchase put and
call options on securities indices for the purpose of hedging. All securities
index options purchased by the Portfolio will be listed and traded on an
exchange. The Portfolio currently does not expect to invest a substantial
portion of its assets in securities index options.
For purposes of managing cash flow, each Equity Portfolio may purchase put
and call options on securities indices to increase the Portfolio's exposure to
the performance of a recognized securities index, such as the S&P 500 Index. All
securities index options purchased by the Portfolio will be listed and traded on
an exchange.
Foreign Currency Transactions. (All Portfolios except Liquid Asset
Portfolio). Each Portfolio may enter into contracts for the purchase or sale of
a specific currency at a future date (usually less than one year from the date
of the contract) at a fixed price ("forward contracts"). The Portfolio also may
engage in foreign currency exchange transactions on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market.
The Portfolios (other than International Portfolio) enter into forward
contracts in an attempt to hedge against changes in prevailing currency exchange
rates. The Portfolio do not engage in transactions in forward contracts for
speculation; they view investments in forward contracts as a means of
establishing more definitely the effective return on, or the purchase price of,
securities denominated in foreign currencies. Forward contract transactions
include forward sales or purchases of foreign currencies for the purpose of
protecting the U.S. dollar value of securities held or to be
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acquired by a Portfolio or protecting the U.S. dollar equivalent of dividends,
interest, or other payments on those securities.
Forward contracts are traded in the interbank market directly between
dealers (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades; foreign exchange dealers realize a profit based on the
difference (the spread) between the prices at which they are buying and selling
various currencies.
At the consummation of a forward contract to sell currency, a Portfolio
may either make delivery of the foreign currency or terminate its contractual
obligation to deliver by purchasing an offsetting contract. If the Portfolio
chooses to make delivery of the foreign currency, it may be required to obtain
such currency through the sale of portfolio securities denominated in such
currency or through conversion of other assets of the Portfolio into such
currency. If the Portfolio engages in an offsetting transaction, it will incur a
gain or a loss to the extent that there has been a change in forward contract
prices. Closing purchase transactions with respect to forward contracts are
usually made with the currency dealer who is a party to the original forward
contract.
NB Management believes that the use of foreign currency hedging
techniques, including "proxy-hedges," can provide significant protection of NAV
in the event of a general rise in the U.S. dollar against foreign currencies.
For example, the return available from securities denominated in a particular
foreign currency would diminish if the value of the U.S. dollar increased
against that currency. Such a decline could be partially or completely offset by
an increase in value of a hedge involving a forward contract to sell that
foreign currency or a proxy-hedge involving a forward contract to sell a
different foreign currency whose behavior is expected to resemble the currency
in which the securities being hedged are denominated but which is available on
more advantageous terms.
However, a hedge or proxy-hedge cannot protect against exchange rate risks
perfectly, and, if NB Management is incorrect in its judgment of future exchange
rate relationships, a Portfolio could be in a less advantageous position than if
such a hedge had not been established. If a Portfolio uses proxy-hedging, it may
experience losses on both the currency in which it has invested and the currency
used for hedging if the two currencies do not vary with the expected degree of
correlation. Using forward contracts to protect the value of a Portfolio's
securities against a decline in the value of a currency does not eliminate
fluctuations in the prices of the underlying securities. Because forward
contracts are not traded on an exchange, the assets used to cover such contracts
may be illiquid. A Portfolio may experience delays in the settlement of its
foreign currency transactions.
International Portfolio may purchase securities of an issuer domiciled in
a country other than the country in whose currency the instrument is
denominated. The Portfolio may invest in securities denominated in the European
Currency Unit ("ECU"), which is a "basket" consisting of a specified amount of
the currencies of certain of the member states of the European Union. The
specific amounts of currencies comprising the ECU may be adjusted by the Council
of Ministers of the European Union from time to time to reflect changes in
relative values of the underlying currencies. The market for ECUs may become
illiquid at times of uncertainty or rapid change in the European currency
markets, limiting the Portfolio's ability to prevent potential losses. In
addition, International Portfolio may invest in securities denominated in other
currency baskets.
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Policies and Limitations. The Portfolios (other than International
Portfolio) may enter into forward contracts for the purpose of hedging and not
for speculation. The use of forward contracts by Socially Responsive Portfolio
is not subject to the Social Policy.
International Portfolio may enter into forward contracts for hedging or
non-hedging purposes. When the Portfolio engages in foreign currency
transactions for hedging purposes, it will not enter into forward contracts to
sell currency or maintain a net exposure to such contracts if their consummation
would obligate the Portfolio to deliver an amount of foreign currency materially
in excess of the value of its portfolio securities or other assets denominated
in that currency. International Portfolio may also purchase and sell forward
contracts for non-hedging purposes when NB Management anticipates that a foreign
currency will appreciate or depreciate in value, but securities in that currency
do not present attractive investment opportunities and are not held in the
Portfolio's investment portfolio.
Options on Foreign Currencies. (All Portfolios except Liquid Asset
Portfolio). Each Portfolio may write and purchase covered call and put options
on foreign currencies. International Portfolio may write (sell) put and covered
call options on any currency in order to realize greater income than would be
realized on portfolio securities alone.
Currency options have characteristics and risks similar to those of
securities options, as discussed herein. Certain options on foreign currencies
are traded on the OTC market and involve liquidity and credit risks that may not
be present in the case of exchange-traded currency options.
Policies and Limitations. A Portfolio would use options on foreign
currencies to protect against declines in the U.S. dollar value of portfolio
securities or increases in the U.S. dollar cost of securities to be acquired or
to protect the U.S. dollar equivalent of dividends, interest, or other payments
on those securities. In addition, International Portfolio may purchase put and
call options on foreign currencies for non-hedging purposes when NB Management
anticipates that a currency will appreciate or depreciate in value, but
securities denominated in that currency do not present attractive investment
opportunities and are not included in the Portfolio. The use of options on
currencies by Socially Responsive Portfolio is not subject to the Social Policy.
Regulatory Limitations on Using Financial Instruments. To the extent a
Portfolio sells or purchases futures contracts or writes options thereon or
options on foreign currencies that are traded on an exchange regulated by the
CFTC other than for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums on those positions (excluding the amount
by which options are "in-the-money") may not exceed 5% of the Portfolio's net
assets.
Cover for Financial Instruments. Securities held in a segregated account
cannot be sold while the futures, options, or forward strategy covered by those
securities is outstanding, unless they are replaced with other suitable assets.
As a result, segregation of a large percentage of a Portfolio's assets could
impede portfolio management or the Portfolio's ability to meet current
obligations. A Portfolio may be unable to promptly dispose of assets which
cover, or are segregated with respect to, an illiquid futures, options, or
forward position; this inability may result in a loss to the Portfolio.
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Policies and Limitations. Each Portfolio will comply with SEC guidelines
regarding "cover" for Financial Instruments and, if the guidelines so require,
set aside in a segregated account with its custodian the prescribed amount of
cash or appropriate liquid securities.
General Risks of Financial Instruments. The primary risks in using
Financial Instruments are (1) imperfect correlation or no correlation between
changes in market value of the securities or currencies held or to be acquired
by a Portfolio and changes in the prices of Financial Instruments; (2) possible
lack of a liquid secondary market for Financial Instruments and the resulting
inability to close out Financial Instruments when desired; (3) the fact that the
skills needed to use Financial Instruments are different from those needed to
select a Portfolio's securities; (4) the fact that, although use of Financial
Instruments for hedging purposes can reduce the risk of loss, they also can
reduce the opportunity for gain, or even result in losses, by offsetting
favorable price movements in hedged investments; and (5) the possible inability
of a Portfolio to purchase or sell a portfolio security at a time that would
otherwise be favorable for it to do so, or the possible need for a Portfolio to
sell a portfolio security at a disadvantageous time, due to its need to maintain
cover or to segregate securities in connection with its use of Financial
Instruments. There can be no assurance that a Portfolio's use of Financial
Instruments will be successful.
Each Portfolio's use of Financial Instruments may be limited by the
provisions of the Internal Revenue Code of 1986, as amended ("Code"), with which
it must comply if it is to continue to qualify as a regulated investment company
("RIC"). See "Additional Tax Information." Financial Instruments may not be
available with respect to some currencies, especially those of so-called
emerging market countries.
Policies and Limitations. NB Management intends to reduce the risk of
imperfect correlation by investing only in Financial Instruments whose behavior
is expected to resemble or offset that of a Portfolio's underlying securities or
currency. NB Management intends to reduce the risk that a Portfolio will be
unable to close out Financial Instruments by entering into such transactions
only if NB Management believes there will be an active and liquid secondary
market.
Indexed Securities. (Limited Maturity Bond, International and Balanced
Portfolios). These Portfolios may invest in securities whose value is linked to
foreign currencies, interest rates, commodities, indices, or other financial
indicators ("indexed securities"). Most indexed securities are short- to
intermediate-term fixed income securities whose values at maturity or interest
rates rise or fall according to the change in one or more specified underlying
instruments. The value of indexed securities may increase or decrease if the
underlying instrument appreciates, and they may have return characteristics
similar to direct investments in the underlying instrument or to one or more
options thereon. However, some indexed securities are more volatile than the
underlying instrument itself.
Inflation-Indexed Securities. (Limited Maturity Bond and Balanced
Portfolios). The Portfolios may invest in U.S. Treasury securities whose
principal value is adjusted daily in accordance with changes to the Consumer
Price Index. Such securities are backed by the full faith and credit of the U.S.
Government. Interest is calculated on the basis of the current adjusted
principal value. The principal value of inflation-indexed securities declines in
periods of deflation,
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but holders at maturity receive no less than par. If inflation is lower than
expected during the period a Portfolio holds the security, the Portfolio may
earn less on it than on a conventional bond.
Because the coupon rate on inflation-indexed securities is lower than
fixed-rate U.S. Treasury securities, the Consumer Price Index would have to rise
at least to the amount of the difference between the coupon rate of the fixed
rate U.S. Treasury issues and the coupon rate of the inflation-indexed
securities, assuming all other factors are equal, in order for such securities
to match the performance of the fixed-rate Treasury securities.
Inflation-indexed securities are expected to react primarily to changes in the
"real" interest rate (i.e., the nominal (or stated) rate less the rate of
inflation), while a typical bond reacts to changes in the nominal interest rate.
Accordingly, inflation-indexed securities have characteristics of fixed-rate
Treasuries having a shorter duration. Changes in market interest rates from
causes other than inflation will likely affect the market prices of
inflation-indexed securities in the same manner as conventional bonds.
Any increase in principal value is taxable in the year the increase
occurs, even though holders do not receive cash representing the increase until
the security matures. Because each Fund must distribute substantially all of its
income to its shareholders to avoid payment of federal income and excise taxes,
a Portfolio may have to dispose of other investments to obtain the cash
necessary to distribute the accrued taxable income on inflation-indexed
securities.
Short Sales. (International Portfolio). The Portfolio may attempt to limit
exposure to a possible decline in the market value of portfolio securities
through short sales of securities that NB Management believes possess volatility
characteristics similar to those being hedged. The Portfolio also may use short
sales in an attempt to realize gain. To effect a short sale, the Portfolio
borrows a security from a brokerage firm to make delivery to the buyer. The
Portfolio then is obliged to replace the borrowed security by purchasing it at
the market price at the time of replacement. Until the security is replaced, the
Portfolio is required to pay the lender any dividends and may be required to pay
a premium or interest.
The Portfolio will realize a gain if the security declines in price
between the date of the short sale and the date on which the Portfolio replaces
the borrowed security. The Portfolio will incur a loss if the price of the
security increases between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of any premium or
interest the Portfolio is required to pay in connection with the short sale. A
short position may be adversely affected by imperfect correlation between
movements in the price of the securities sold short and the securities being
hedged.
The Portfolio also may make short sales against-the-box, in which it sells
securities short only if it owns or has the right to obtain without payment of
additional consideration an equal amount of the same type of securities sold.
The effect of short selling on the Portfolio is similar to the effect of
leverage. Short selling may amplify changes in the Portfolio's NAV. Short
selling may also produce higher than normal portfolio turnover, which may result
in increased transaction costs to the Portfolio.
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Policies and Limitations. Under applicable guidelines of the SEC staff, if
the Portfolio engages in a short sale (other than a short sale against-the-box),
it must put in a segregated account (not with the broker) an amount of cash or
appropriate liquid securities equal to the difference between (1) the market
value of the securities sold short at the time they were sold short and (2) any
cash or securities required to be deposited as collateral with the broker in
connection with the short sale (not including the proceeds from the short sale).
In addition, until the Portfolio replaces the borrowed security, it must daily
maintain the segregated account at such a level that (1) the amount deposited in
it plus the amount deposited with the broker as collateral equals the current
market value of the securities sold short, and (2) the amount deposited in it
plus the amount deposited with the broker as collateral is not less than the
market value of the securities at the time they were sold short.
Asset-Backed Securities. (Liquid Asset, Limited Maturity Bond and Balanced
Portfolios). Asset-backed securities represent direct or indirect participations
in, or are secured by and payable from, pools of assets such as motor vehicle
installment sales contracts, installment loan contracts, leases of various types
of real and personal property, and receivables from revolving credit (credit
card) agreements. These assets are securitized through the use of trusts and
special purpose corporations. Credit enhancements, such as various forms of cash
collateral accounts or letters of credit, may support payments of principal and
interest on asset-backed securities. Although these securities may be supported
by letters of credit or other credit enhancements, payment of interest and
principal ultimately depends upon individuals paying the underlying loans, which
may be affected adversely by general downturns in the economy. Asset-backed
securities are subject to the same risk of prepayment described with respect to
mortgage-backed securities. The risk that recovery on repossessed collateral
might be unavailable or inadequate to support payments, however, is greater for
asset-backed securities than for mortgage-backed securities.
Certificates for Automobile Receivablessm ("CARSsm") represent undivided
fractional interests in a trust whose assets consist of a pool of motor vehicle
retail installment sales contracts and security interests in the vehicles
securing those contracts. Payment of principal and interest on the underlying
contracts are passed through monthly to certificate holders and are guaranteed
up to specified amounts by a letter of credit issued by a financial institution
unaffiliated with the trustee or originator of the trust. Underlying installment
sales contracts are subject to prepayment, which may reduce the overall return
to certificate holders. Certificate holders also may experience delays in
payment or losses on CARSsm if the trust does not realize the full amounts due
on underlying installment sales contracts because of unanticipated legal or
administrative costs of enforcing the contracts; depreciation, damage, or loss
of the vehicles securing the contracts; or other factors.
Credit card receivable securities are backed by receivables from revolving
credit card agreements ("Accounts"). Credit balances on Accounts are generally
paid down more rapidly than are automobile contracts. Most of the credit card
receivable securities issued publicly to date have been pass-through
certificates. In order to lengthen their maturity or duration, most such
securities provide for a fixed period during which only interest payments on the
underlying Accounts are passed through to the security holder; principal
payments received on the Accounts are used to fund the transfer of additional
credit card charges made on the Accounts to the pool of assets supporting the
securities. Usually, the
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initial fixed period may be shortened if specified events occur which signal a
potential deterioration in the quality of the assets backing the security, such
as the imposition of a cap on interest rates. An issuer's ability to extend the
life of an issue of credit card receivable securities thus depends on the
continued generation of principal amounts in the underlying Accounts and the
non-occurrence of the specified events. The non-deductibility of consumer
interest, as well as competitive and general economic factors, could adversely
affect the rate at which new receivables are created in an Account and conveyed
to an issuer, thereby shortening the expected weighted average life of the
related security and reducing its yield. An acceleration in cardholders' payment
rates or any other event that shortens the period during which additional credit
card charges on an Account may be transferred to the pool of assets supporting
the related security could have a similar effect on its weighted average life
and yield.
Credit cardholders are entitled to the protection of state and federal
consumer credit laws. Many of those laws give a holder the right to set off
certain amounts against balances owed on the credit card, thereby reducing
amounts paid on Accounts. In addition, unlike the collateral for most other
asset-backed securities, Accounts are unsecured obligations of the cardholder.
Limited Maturity Bond and Balanced Portfolios each may invest in trust
preferred securities, which are a type of asset-backed security. Trust preferred
securities represent interests in a trust formed by a parent company to finance
its operations. The trust sells preferred shares and invests the proceeds in
debt securities of the parent. This debt may be subordinated and unsecured.
Dividend payments on the trust preferred securities match the interest payments
on the debt securities; if no interest is paid on the debt securities, the trust
will not make current payments on its preferred securities. Unlike typical
asset-backed securities, which have many underlying payors and are usually
overcollateralized, trust preferred securities have only one underlying payor
and are not overcollateralized. Issuers of trust preferred securities and their
parents currently enjoy favorable tax treatment. If the tax characterization of
trust preferred securities were to change, they could be redeemed by the
issuers, which could result in a loss to a Portfolio.
Convertible Securities. (Equity Portfolios). Each Portfolio may invest in
convertible securities. A convertible security is a bond, debenture, note,
preferred stock, or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula. Convertible
securities generally have features of both common stocks and debt securities. A
convertible security entitles the holder to receive 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.
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The price of a convertible security often reflects such variations in the
price of the underlying common stock in a way that nonconvertible debt does not.
Convertible securities are typically issued by smaller capitalized companies
whose stock prices may be volatile. A convertible security is a bond, debenture,
note, preferred stock, or other security that may be converted into or exchanged
for a prescribed amount of common stock of the same or a different issuer within
a particular period of time at a specified price or formula. Convertible
securities generally have features of both common stocks and debt securities. A
convertible security may be subject to redemption at the option of the issuer at
a price established in the security's governing instrument. If a convertible
security held by a Portfolio is called for redemption, the Portfolio will be
required to convert it into the underlying common stock, sell it to a third
party or permit the issuer to redeem the security. Any of these actions could
have an adverse effect on a Portfolio's ability to achieve its investment
objective.
Policies and Limitations. Socially Responsive Portfolio may invest up to
20% of its net assets in convertible securities. The Portfolio does not intend
to purchase any convertible securities that are not investment grade.
Convertible debt securities are subject to each Portfolio's investment policies
and limitations concerning debt securities.
Preferred Stock. (Equity Portfolios). The Portfolio may invest in
preferred stock. Unlike interest payments on debt securities, dividends on
preferred stock are generally payable at the discretion of the issuer's board of
directors, 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 (Partners, Socially Responsive, Limited Maturity Bond,
Balanced, and Liquid Asset Portfolios) Step Coupon Securities. (Limited Maturity
Bond and Balanced Portfolio). The Portfolios may invest in zero coupon
securities and Limited Maturity Bond and Balanced Portfolios may invest in step
coupon securities, both of which are debt obligations that do not entitle the
holder to any periodic payment of interest prior to maturity or that specify a
future date when the securities begin paying current interest. Zero coupon and
step coupon securities are issued and traded at a significant discount from
their face amount or par value. The 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. They are redeemed
at face value when they mature.
The discount on zero coupon and step coupon securities ("original issue
discount" or "OID") must be taken into income ratably by each such Portfolio
prior to the receipt of any actual payments. Because each Portfolio must
distribute to its shareholders substantially all of its net income each year for
income tax purposes, a Portfolio may have to dispose of portfolio securities
under disadvantageous circumstances to generate cash, or may be required to
borrow, to satisfy its distribution requirements.
The market prices of zero and step coupon securities generally are more
volatile than the prices of securities that pay interest periodically. Zero
coupon securities are likely to respond to changes in interest rates to a
greater degree than other types of debt securities having a similar maturity and
credit quality.
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Municipal Obligations. (Income Portfolios). Municipal obligations are
securities issued by or on behalf of states (as used herein, including the
District of Columbia), territories and possessions of the United States and
their political subdivisions, agencies, and instrumentalities. The interest on
municipal obligations is generally exempt from federal income tax. The
tax-exempt status of any issue of municipal obligations is determined on the
basis of an opinion of the issuer's bond counsel at the time the obligations are
issued.
Municipal obligations include "general obligation" securities, which are
backed by the full taxing power of a municipality, and "revenue" securities,
which are backed only by the income from a specific project, facility, or tax.
Municipal obligations also include industrial development and private activity
bonds which are issued by or on behalf of public authorities, but are not backed
by the credit of any governmental or public authority. "Anticipation notes",
which are also municipal obligations, are issued by municipalities in
expectation of future proceeds from the issuance of bonds, or from taxes or
other revenues, and are payable from those bond proceeds, taxes, or revenues.
Municipal obligations also include tax-exempt commercial paper, which is issued
by municipalities to help finance short-term capital or operating requirements.
The value of municipal obligations is dependent on the continuing payment
of interest and principal when due by the issuers of the municipal obligations
in which a Portfolio invests (or, in the case of industrial development bonds,
the revenues generated by the facility financed by the bonds or, in certain
other instances, the provider of the credit facility backing the bonds). As with
other fixed income securities, an increase in interest rates generally will
reduce the value of a Portfolio's investments in municipal obligations, whereas
a decline in interest rates generally will increase that value.
Current efforts to restructure the federal budget and the relationship
between the federal government and state and local governments may adversely
impact the financing of some issuers of municipal securities. Some states and
localities are experiencing substantial deficits and may find it difficult for
political or economic reasons to increase taxes. Efforts are under way that may
result in a restructuring of the federal income tax system. These developments
could reduce the value of all municipal securities, or the securities of
particular issuers.
Policies and Limitations. Limited Maturity Bond Portfolio may invest up to
5% of its net assets in municipal obligations. Liquid Asset Portfolio may invest
in municipal obligations that otherwise meet its criteria for quality and
maturity.
U.S. Government and Agency Securities. (All Portfolios). U.S. Government
Securities are obligations of the U.S. Treasury backed by the full faith and
credit of the United States. U.S. Government Agency Securities are issued or
guaranteed by U.S. Government agencies, or by instrumentalities of the U.S.
Government, such as the Government National Mortgage Association ("GNMA"),
Fannie Mae (also known as the Federal National Mortgage Association), Freddie
Mac (also known as the Federal Home Loan Mortgage Corporation), Student Loan
Marketing Association (commonly known as "Sallie Mae"), and Tennessee Valley
Authority. Some U.S. Government Agency Securities are supported by the full
faith and credit of the United States, while others may be supported by the
issuer's ability to borrow from the U.S. Treasury, subject to the Treasury's
discretion in certain cases, or only by the credit of the issuer. U.S.
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Government Agency Securities include U.S. Government Agency mortgage-backed
securities. (See "Mortgage-Backed Securities," below.) The market prices of U.S.
Government Agency Securities are not guaranteed by the Government and generally
fluctuate inversely with changing interest rates.
Policies and Limitations. Liquid Asset Portfolio may invest 25% or more of
its total assets in U.S. Government and Agency Securities. The Equity Portfolio
normally may invest up to 35% of their total assets in debt securities,
including U.S. Government and Agency Securities.
Swap Agreements. (International Portfolio). The Portfolio may enter into
swap agreements to manage or gain exposure to particular types of investments
(including equity securities or indices of equity securities in which the
Portfolio otherwise could not invest efficiently). In an example of a swap
agreement, one party agrees to make regular payments equal to a floating rate on
a specified amount in exchange for payments equal to a fixed rate, or a
different floating rate, on the same amount for a specified period.
Swap agreements may involve leverage and may be highly volatile; depending
on how they are used, they may have a considerable impact on the Portfolio's
performance. The risks of swap agreements depend upon the other party's
creditworthiness and ability to perform, as well as the Portfolio's ability to
terminate its swap agreements or reduce its exposure through offsetting
transactions. Swap agreements may be illiquid. The swap market is relatively new
and is largely unregulated.
Policies and Limitations. In accordance with SEC staff requirements, the
Portfolio will segregate cash or appropriate liquid securities in an amount
equal to its obligations under swap agreements; when an agreement provides for
netting of the payments by the two parties, the Portfolio will segregate only
the amount of its net obligation, if any.
Fixed Income Securities. (All Portfolios). The Income Portfolios invest
primarily in fixed income securities. While the emphasis of the Equity
Portfolios' investment programs is on common stocks and other equity securities,
the Portfolio may also invest in money market instruments, U.S. Government and
Agency Securities, and other fixed income securities. Each Portfolio may invest
in investment grade corporate bonds and debentures. Partners, Mid-Cap Growth,
Limited Maturity Bond, Balanced and International Portfolio each may invest in
corporate debt securities rated below investment grade.
"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's ("S&P"), or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed by NB Management to be comparable
to such rated securities ("Comparable Unrated Securities"). Securities rated by
Moody's in its fourth highest rating category (Baa) or Comparable Unrated
Securities may be deemed to have speculative characteristics.
The ratings of an NRSRO represent its opinion as to the quality of
securities it undertakes to rate. Ratings are not absolute standards of quality;
consequently, securities with the same maturity,
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coupon, and rating may have different yields. Although the Portfolios may rely
on the ratings of any NRSRO, the Portfolios primarily refer to ratings assigned
by S&P and Moody's, which are described in Appendix A to this SAI.
Fixed income securities are subject to the risk of an issuer's inability
to meet principal and interest payments on its obligations ("credit risk") and
are subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer, and market
liquidity ("market risk"). The value of the fixed income securities in which a
Portfolio may invest is likely to decline in times of rising market interest
rates. Conversely, when rates fall, the value of a Portfolios' fixed income
investments is likely to rise. Foreign debt securities are subject to risks
similar to those of other foreign securities. Lower rated securities are more
likely to react to developments affecting market and credit risk than are more
highly rated securities, which react primarily to movements in the general level
of interest rates.
Lower Rated Debt Securities. (Balanced, Limited Maturity Bond, Mid-Cap
Growth, Partners and International Portfolios). Lower-rated debt securities or
"junk bonds" are those rated below the fourth highest category by all NRSROs
that have rated them (including those securities rated as low as D by S&P) or
unrated securities of comparable quality. Securities rated below investment
grade may be considered speculative. Securities rated B are judged to be
predominantly speculative with respect to the issuers capacity to pay interest
and repay principal in accordance with their terms and obligations. Lower rated
debt securities generally offer a higher current yield than that available for
investment grade issues with similar maturities, but they may involve
significant risk under adverse conditions. In particular, adverse changes in
general economic conditions and in the industries in which the issuers are
engaged and changes in the financial condition of the issuers are more likely to
cause price volatility and weaken the capacity of the issuer to make principal
and interest payments than is the case for higher-grade debt securities. In
addition, a Portfolio that invests in lower-quality securities may incur
additional expenses to the extent recovery is sought on defaulted securities.
Because of the many risks involved in investing in high-yield securities, the
success of such investments is dependent on the credit analysis of NB
Management.
During periods of economic downturn or rising interest rates, highly
leveraged issuers may experience financial stress which could adversely affect
their ability to make payments of interest and principal and increase the
possibility of default. In addition, such issuers may not have more traditional
methods of financing available to them and may be unable to repay debt at
maturity by refinancing. The risk of loss due to default by such issuers is
significantly greater because such securities frequently are unsecured and
subordinated to the prior payment of senior indebtedness.
The market for lower rated debt securities has expanded rapidly in recent
years, and its growth generally paralleled a long economic expansion. In the
past, the prices of many lower rated debt securities declined substantially,
reflecting an expectation that many issuers of such securities might experience
financial difficulties. As a result, the yields on lower rated debt securities
rose dramatically. However, such higher yields did not reflect the value of the
income stream that holders of such securities expected, but rather the risk that
holders of such securities
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could lose a substantial portion of their value as a result of the issuers'
financial restructuring or defaults. There can be no assurance that such
declines will not recur.
The market for lower rated debt issues generally is thinner or less active
than that for higher quality securities, which may limit a Portfolio's ability
to sell such securities at fair value in response to changes in the economy or
financial markets. Judgment may play a greater role in pricing such securities
than it does for more liquid securities. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may also decrease the
values and liquidity of lower rated debt securities, especially in a thinly
traded market.
See Appendix A for further information about the ratings of debt
securities assigned by S&P and Moody's.
Policies and Limitations. Partners Portfolio may invest up to 15% of its
net assets, measured at the time of investment, in corporate debt securities
rated below investment grade or Comparable Unrated Securities. Limited Maturity
Bond and Mid-Cap Growth Portfolios may invest up to 10% of their net assets,
measured at the time of investment, in debt securities rated below investment
grade, but rated at least B with respect to Limited Maturity Bond Portfolio and
C with respect to Mid-Cap Growth Portfolio by S&P or Moody's, or Comparable
Unrated Securities; Balanced Portfolio may invest up to 10% of the debt
securities portion of its investments, measured at the time of investment, in
debt securities rated below investment grade, but rated at least B by S&P or
Moody's, or Comparable Unrated Securities.
International Portfolio may invest in domestic and foreign debt securities
of any rating, including those rated below investment grade and Comparable
Unrated Securities.
Subsequent to its purchase by a Portfolio, an issue of debt securities may
cease to be rated or its rating may be reduced, so that the securities would no
longer be eligible for purchase by that Portfolio. In such a case, Socially
Responsive Portfolio will engage in an orderly disposition of the downgraded
securities, and Limited Maturity Bond and Balanced (debt securities portion)
Portfolio will engage in an orderly disposition of the downgraded securities or
other securities to the extent necessary to ensure the Portfolio's holdings that
are considered by the Portfolios to be below investment grade will not exceed
10% of its net assets. Limited Maturity Bond and Balanced (debt securities
portion) Portfolios may each hold up to 5% of its net assets in securities that
are downgraded after purchase to a rating below that permissible by the
Portfolio's investment policies. Each other Portfolio (except International
Portfolio) will engage in an orderly disposition of downgraded securities to the
extent necessary to ensure that the Portfolio's holdings of securities rated
below investment grade and Comparable Unrated Securities will not exceed 5% of
its net assets (15% in the case of Partners Portfolio and 10% in the case of
Mid-Cap Growth Portfolio). NB Management will make a determination as to whether
International Portfolio should dispose of the downgraded securities. With
respect to Liquid Asset Portfolio, NB Management will consider the need to
dispose of such securities in accordance with the requirements of Rule 2a-7
under the 1940 Act.
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NB Management will invest in lower-rated securities only when it concludes
that the anticipated return on such an investment to Partners, Mid-Cap Growth or
International Portfolio warrants exposure to the additional level of risk.
Ratings of Fixed Income Securities
As discussed above, the Portfolios may purchase securities rated by
Standard & Poor' ("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, duration, coupon, and rating may have
different yields. Although the Portfolios may rely on the ratings of any NRSRO,
the Portfolio mainly refer to ratings assigned by S&P and Moody's, which are
described in Appendix A. Each Portfolio may also invest in unrated securities
that are deemed comparable in quality by NB Management to the rated securities
in which the Portfolio may permissibly invest.
High-quality debt securities. High-quality debt securities are securities
that have received a rating from at least one NRSRO, such as S&P or Moody's, 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 NB Management to be of comparable
quality. If two or more NRSROs have rated a security, at least two of them must
rate it as high quality if the security is to be eligible for purchase by Liquid
Asset Portfolio.
Investment Grade Debt Securities. Investment grade debt securities are
securities that have received a rating from at least one NRSRO in one of the
four highest rating categories or, if not rated by any NRSRO, have been
determined by NB Management to be of comparable quality. Moody's deems
securities rated in its fourth highest category (Baa) to have speculative
characteristics; a change in economic factors could lead to a weakened capacity
of the issuer to repay.
Lower-Rated Debt Securities. Lower-rated debt securities or "junk bonds"
are those rated below the fourth highest category by all NRSROs that have rated
them (including those securities rated as low as D by S&P) or unrated securities
of comparable quality. Securities rated below investment grade may be considered
speculative. Securities rated B are judged to be predominantly speculative with
respect to their capacity to pay interest and repay principal in accordance with
the terms of the obligations. Although these securities generally offer higher
yields than investment grade debt securities with similar maturities,
lower-quality securities involve greater risks, including the possibility of
default or bankruptcy by the issuer, or the securities may already be in
default. See the additional risks described above for lower-rated securities.
Subsequent to its purchase by a Portfolio, an issue of debt securities may
cease to be rated or its rating may be reduced, so that the securities would no
longer be eligible for purchase by that Portfolio. The policy on downgraded
securities is discussed above under "Lower Rated Debt Securities."
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Duration and Maturity
Duration is a measure of the sensitivity of debt securities to changes in
market interest rates, based on the entire cash flow associated with the
securities, including payments occurring before the final repayment of
principal. For Limited Maturity Bond and Balanced (debt securities portion)
Portfolios, NB Management utilizes duration as a tool in portfolio selection
instead of the more traditional measure known as "term to maturity." "Term to
maturity" measures only the time until a debt security provides its final
payment, taking no account of the pattern of the security's payments prior to
maturity. Duration incorporates a bond's yield, coupon interest payments, final
maturity and call features into one measure. Duration therefore provides a more
accurate measurement of a bond's likely price change in response to a given
change in market interest rates. The longer the duration, the greater the bond's
price movement will be as interest rates change. For any fixed income security
with interest payments occurring prior to the payment of principal, duration is
always less than maturity.
Futures, options and options on futures have durations which are generally
related to the duration of the securities underlying them. Holding long futures
or call option positions will lengthen a Portfolio's duration by approximately
the same amount as would holding an equivalent amount of the underlying
securities. Short futures or put options have durations roughly equal to the
negative of the duration of the securities that underlie these positions, and
have the effect of reducing portfolio duration by approximately the same amount
as would selling an equivalent amount of the underlying securities.
There are some situations where even the standard duration calculation
does not properly reflect the interest rate exposure of a security. For example,
floating and variable rate securities often have final maturities of ten or more
years; however, their interest rate exposure corresponds to the frequency of the
coupon reset. Another example where the interest rate exposure is not properly
captured by duration is the case of mortgage-backed securities. The stated final
maturity of such securities is generally 30 years, but current and expected
prepayment rates are critical in determining the securities' interest rate
exposure. In these and other similar situations, NB Management, where permitted,
will use more sophisticated analytical techniques that incorporate the economic
life of a security into the determination of its interest rate exposure.
Liquid Asset Portfolio is required to maintain a dollar-weighted average
portfolio maturity of no more than 90 days and invest in a portfolio of debt
instruments with remaining maturities of 397 days or less. Limited Maturity Bond
and Balanced (debt securities portion) Portfolios' dollar-weighted average
duration will not exceed four years, although the Portfolio may invest in
individual securities of any duration; the Portfolios' dollar-weighted average
maturity may range up to six years.
Risks of Equity Securities
The Equity Portfolios may invest in securities that 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
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bonds and before common stock 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 a specified price anytime during the life of the warrants.
To the extent a Portfolio invests in such securities, the value of
securities held by the Portfolio will be affected by changes in the stock
markets, which may be the result of domestic or international political or
economic news, changes in interest rates or changing investor sentiment. At
times, the stock markets can be volatile and stock prices can change
substantially. The equity securities of smaller companies are more sensitive to
these changes than those of larger companies. This market risk will affect the
Portfolio's NAV per share, which will fluctuate as the value of the securities
held by the Portfolio change. Not all stock prices change uniformly or at the
same time and not all stock markets move in the same direction at the same time.
Other factors affect a particular stock's prices, such as poor earnings reports
by an issuer, loss of major customers, major litigation against an issuer, or
changes in governmental regulations affecting an industry. Adverse news
affecting one company can sometimes depress the stock prices of all companies in
the same industry. Not all factors can be predicted.
Other Investment Companies. International Portfolio may invest in the shares
of other investment companies. Such investment may be the most practical or only
manner in which the Portfolio can participate in certain foreign markets because
of the expenses involved or because other vehicles for investing in those
countries may not be available at the time the Portfolio is ready to make an
investment. Each Equity Portfolio at times may invest in instruments structured
as investment companies to gain exposure to the performance of a recognized
securities index, such as the S&P 500 Index or another appropriate index.
Limited Maturity Bond and Balanced Portfolios, for temporary defensive purposes,
may each invest up to 10% of its total assets in the securities of money market
funds.
As a shareholder in an investment company, a Portfolio would bear its pro
rata share of that investment company's expenses. At the same time, the
Portfolio will continue to pay its own management fees and expenses with respect
to its portfolio investments, including the shares of other investment
companies. Investment in other funds may involve the payment of substantial
premiums above the value of such issuer's portfolio securities. The Portfolios
do not intend to invest in such funds unless, in the judgment of NB Management,
the potential benefits of such investment justify the payment of any applicable
premium or sales charge.
Policies and Limitations. Each Portfolio's investment in such securities
is limited to (i) 3% of the total voting stock of any one investment company,
(ii) 5% of the Portfolio's total assets with respect to any one investment
company and (iii) 10% of the Portfolio's total assets in the aggregate.
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Preferred Stock. (Equity Portfolios) Each Portfolio may invest in
preferred stock. Unlike interest payments on debt securities, dividends on
preferred stock are generally payable at the discretion of the issuer's board of
directors. Preferred shareholders may have certain rights if dividends are not
paid but generally have no legal recourse against the issuer. Shareholders may
suffer a loss of value if dividends are not paid. The market prices of preferred
stocks are generally more sensitive to changes in the issuer's creditworthiness
than are the prices of debt securities.
Socially Responsive Portfolio - Description of Social Policy
Background Information on Socially Responsive Investing
In an era when many people are concerned about the relationship between
business and society, socially responsive investing ("SRI") is a mechanism for
assuring that investors' social values are reflected in their investment
decisions. As such, SRI is a direct descendent of the successful effort begun in
the early 1970's to encourage companies to divest their South African operations
and subscribe to the Sullivan Principles. Today, a growing number of individuals
and institutions are applying similar strategies to a broad range of problems.
Although there are many strategies available to the socially responsive
investor, including proxy activism, below-market loans to community projects,
and venture capital, the SRI strategies used by the Portfolio generally fall
into two categories:
Avoidance Investing. Most socially responsive investors seek to avoid
holding securities of companies whose products or policies are seen as being at
odds with the social good. The most common exclusions historically have involved
tobacco companies and weapons manufacturers.
Leadership Investing. A growing number of investors actively look for
companies with progressive programs that are exemplary or companies which make
it their business to try to solve some of the problems of today's society.
The marriage of social and financial objectives would not have surprised
Adam Smith, who was, first and foremost, a moral philosopher. The Wealth of
Nations is firmly rooted in the Enlightenment conviction that the purpose of
capital is the social good and the related belief that idle capital is both
wasteful and unethical. But, what very likely would have surprised Smith is the
sheer complexity of the social issues we face today and the diversity of our
attitudes toward the social good. War and peace, race and gender, the
distribution of wealth, and the conservation of natural resources -- the social
agenda is long and compelling. It is also something about which reasonable
people differ. What should society's priorities be? What can and should be done
about them? And what is the role of business in addressing them? Since
corporations are on the front lines of so many key issues in today's world, a
growing number of investors feel that a corporation's role cannot be ignored.
This is true of some of the most important issues of the day such as equal
opportunity and the environment.
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The Socially Responsive Database
Neuberger Berman, LLC ("Neuberger Berman"), the Portfolio's sub-adviser,
maintains a database of information about the social impact of the companies it
follows. NB Management uses the database to evaluate social issues after it
deems a stock acceptable from a financial standpoint for acquisition by the
Portfolio. The aim of the database is to be as comprehensive as possible, given
that much of the information concerning corporate responsibility comes from
subjective sources. Information for the database is gathered by Neuberger Berman
in many categories and then analyzed by NB Management in the following six
categories of corporate responsibility:
Workplace Diversity and Employment. NB Management looks for companies that
show leadership in areas such as employee training and promotion policies and
benefits, such as flextime, generous profit sharing, and parental leave. NB
Management looks for active programs to promote women and minorities and takes
into account their representation among the officers of an issuer and members of
its board of directors. As a basis for exclusion, NB Management looks for Equal
Employment Opportunity Act infractions and Occupational Safety and Health Act
violations; examines each case in terms of severity, frequency, and time elapsed
since the incident; and considers actions taken by the company since the
violation. NB Management also monitors companies' progress and attitudes toward
these issues.
Environment. A company's impact on the environment depends largely on the
industry. Therefore, NB Management examines a company's environmental record
vis-a-vis those of its peers in the industry. All companies operating in an
industry with inherently high environmental risks are likely to have had
problems in such areas as toxic chemical emissions, federal and state fines, and
Superfund sites. For these companies, NB Management examines their problems in
terms of severity, frequency, and elapsed time. NB Management then balances the
record against whatever leadership the company may have demonstrated in terms of
environmental policies, procedures, and practices. NB Management defines an
environmental leadership company as one that puts into place strong affirmative
programs to minimize emissions, promote safety, reduce waste at the source,
insure energy conservation, protect natural resources, and incorporate recycling
into its processes and products. NB Management looks for the commitment and
active involvement of senior management in all these areas. Several major
manufacturers which still produce substantial amounts of pollution are among the
leaders in developing outstanding waste source reduction and remediation
programs.
Product. NB Management considers company announcements, press reports, and
public interest publications relating to the health, safety, quality, labeling,
advertising, and promotion of both consumer and industrial products. NB
Management takes note of companies with a strong commitment to quality and with
marketing practices which are ethical and consumer-friendly. NB Management pays
particular attention to companies whose products and services promote
progressive solutions to social problems.
Public Health. NB Management measures the participation of companies in
such industries and markets as alcohol, tobacco, gambling and nuclear power. NB
Management also considers the impact of products and marketing activities
related to those products on nutritional and other health concerns, both
domestically and in foreign markets.
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Weapons. NB Management keeps track of domestic military sales and,
whenever possible, foreign military sales and categorizes them as nuclear
weapons related, other weapons related, and non-weapon military supplies, such
as micro-chip manufacturers and companies that make uniforms for military
personnel.
Corporate Citizenship. NB Management gathers information about a company's
participation in community affairs, its policies with respect to charitable
contributions, and its support of education and the arts. NB Management looks
for companies with a focus, dealing with issues not just by making financial
contributions, but also by asking the questions: What can we do to help? What do
we have to offer? Volunteerism, high-school mentoring programs, scholarships and
grants, and in-kind donations to specific groups are just a few ways that
companies have responded to these questions.
Implementation of Social Policy
Companies deemed acceptable by NB Management from a financial standpoint
are analyzed using Neuberger Berman's database. The companies are then evaluated
by the portfolio manager to determine if the companies' policies, practices,
products, and services withstand scrutiny in the following major areas of
concern: the environment and workplace diversity and employment. Companies are
then further evaluated to determine their track record in issues and areas of
concern such as public health, weapons, product, and corporate citizenship.
The issues and areas of concern that are tracked lend themselves to
objective analysis in varying degrees. Few, however, can be resolved entirely on
the basis of scientifically demonstrable facts. Moreover, a substantial amount
of important information comes from sources that do not purport to be
disinterested. Thus, the quality and usefulness of the information in the
database depend on Neuberger Berman's ability to tap a wide variety of sources
and on the experience and judgment of the people at NB Management who interpret
the information.
In applying the information in the database to stock selection for the
Portfolio, NB Management considers several factors. NB Management examines the
severity and frequency of various infractions, as well as the time elapsed since
their occurrence. NB Management also takes into account any remedial action
which has been taken by the company relating to these infractions. NB Management
notes any quality innovations made by the company in its effort to create
positive change and looks at the company's overall approach to social issues.
PERFORMANCE INFORMATION
A Portfolio's performance may be quoted in advertising in terms of yield
or total return if accompanied by performance of an insurance company's separate
account. Each 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 each Portfolio will vary, and an investment in a Portfolio, when
redeemed, may be worth more or less than the original purchase price.
Performance information does not reflect insurance product or qualified plan
expenses.
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Yield Calculations
The Liquid Asset Portfolio may advertise its "current yield" and
"effective yield." The Portfolio's current yield is based on the return for a
recent seven-day period and is computed by determining the net change (excluding
capital changes) in the value of a hypothetical account having a balance of one
share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing the difference by
the value of the account at the beginning of the base period. The result is a
"base period return," which is then annualized -- that is, the amount of income
generated during the seven-day period is assumed to be generated each week over
a 52-week period -- and shown as an annual percentage of the investment.
The effective yield of the Portfolio is calculated similarly, but the base
period return is assumed to be reinvested. The assumed reinvestment is
calculated by adding 1 to the base period return, raising the sum to a power
equal to 365 divided by seven, and subtracting one from the result, according to
the following formula:
Effective Yield = [(Base Period Return + 1)^365/7] - 1
For the seven calendar days ended December 31, 1999, the current yield of
the Liquid Asset Portfolio was 4.77%. For the same period, the effective yield
was 4.88%.
Limited Maturity Bond Portfolio. The Portfolio may advertise its "yield"
based on a 30-day (or one-month) period. This yield is computed by dividing the
net investment income per share earned during the period by the maximum offering
price per share on the last day of the period. The result then is annualized and
shown as an annual percentage of the investment.
The annualized yield for the Limited Maturity Bond Portfolio for the
30-day period ended December 31, 1999 was 6.22%.
Total Return Computations. (All Portfolios except Liquid Asset Portfolio).
A 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.
The average annual total returns for the Growth Portfolio (and the
predecessor of the Growth Portfolio for the period prior to May 1, 1995) for the
one-, five-, and ten-year periods ended December 31, 1999, were +50.40%,
+26.37%, and +15.61%, respectively.
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The average annual total returns for the Limited Maturity Bond Portfolio
(and the predecessor of the Limited Maturity Bond Portfolio for the period prior
to May 1, 1995) for the one-, five-, and ten-year periods ended December 31,
1999, were +1.48%, +5.52%, and +5.86%, respectively.
The average annual total returns for the Balanced Portfolio (and the
predecessor of the Balanced Portfolio for the period prior to May 1, 1995) for
the one, five, and ten-year periods ended December 31, 1999, were +33.56%,
+18.81%, and +12.65%, respectively.
The average annual total return for the Partners Portfolio (and the
predecessor of the Partners Portfolio for the period prior to May 1, 1995) for
the one-year and five-year periods ended December 31, 1999 and for the period
from March 22, 1994 (commencement of operations) through December 31, 1999 was
+7.37%, +21.03%, and +17.47% respectively.
The average annual total return for the Mid-Cap Growth Portfolio for the
one year period ended December 31, 1999 and the period since inception (November
3, 1997) through December 31, 1999 was +53.89% and +52.97%, respectively.
The average annual total return for the Guardian Portfolio for the one
year period ended December 31, 1999 and the period since inception (November 3,
1997) through December 31, 1999 was +14.93 and +23.93% respectively.
The average annual total return for the Socially Responsive Portfolio for
the period from February 18, 1999 (inception date) through December 31, 1999 was
+15.40%.
NB Management may waive a portion of its fee or reimburse certain of the
Portfolios and predecessors of the Portfolios for certain expenses during the
periods shown, 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 Portfolios include the effect
of deducting a Portfolio's expenses, but may not include insurance-related
charges and other expenses attributable to any particular insurance product.
Since you can only purchase shares of a Portfolio through a variable annuity or
variable life insurance contract (except with respect to the Balanced Portfolio,
which may also be purchased by Qualified Plans) 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 a Portfolio's
performance has the effect of increasing the performance quoted. You should bear
in mind the effect of these charges when comparing a Portfolio's performance to
that of other mutual funds.
Comparative Information
From time to time a 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
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periodicals) that monitor the performance of mutual funds, such as Lipper
Analytical Services, Inc. ("Lipper"), C.D.A. Investment Technologies,
Inc., Wiesenberger Investment Companies Service, Investment Company Data
Inc., IBC/Financial Data Inc.'s Money Market Fund Report, 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 $35 million to $6.1 billion, with an average of $572 million.
The S&P 400 measures mid-sized companies with an average market
capitalization of $2.1 billion. The EAFE(R) Index is an unmanaged index of
common stock prices of more than 1,000 companies from Europe, Australia,
and the Far East translated into U.S. dollars. The Financial Times World
XUS Index is an index of 24 international markets, excluding the U.S.
market. Each assumes reinvestment of distributions and is calculated
without regard to tax consequences or the costs of investing. Each
Portfolio may invest in different types of securities from those included
in some of the above indices.
The Limited Maturity Bond Portfolio's performance may also be compared
with the Merrill Lynch 1-3 year Treasury Index and the Lehman Brothers
Intermediate Government/Corporate Bond Index, as well as the performance of
Treasury Securities, corporate bonds, and the Lipper Short Investment Grade Debt
Funds category.
The Socially Responsive 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 a 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
Portfolios may also be compared to individual asset classes such as common
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stocks, small-cap stocks, or Treasury bonds, based on information supplied by
Ibbotson and Sinquefield.
Each Portfolio may invest some of its assets in different types of
securities than those included in the index used as a comparison with the
Portfolio's historical performance. A Portfolio 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.
In addition, the Income Portfolio performance may be compared at times
with that of various bank instruments (including bank money market accounts and
CDs of varying maturities) as reported in publications such as The Bank Rate
Monitor. Any such comparisons may be useful to investors who wish to compare a
Portfolio's past performance with that of certain of its competitors. Of course,
past performance is not a guarantee of future results. Unlike an investment in a
Portfolio, bank CDs pay a fixed rate of interest for a stated period of time and
are insured up to $100,000.
Other Performance Information. From time to time, information about a
Portfolio's portfolio allocation and holdings as of a particular date may be
included in Advertisements. This information may include portfolio
diversification by asset type.
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TRUSTEES AND OFFICERS
The following table sets forth information concerning the trustees and
officers of the Trusts, including their addresses and principal business
experience during the past five years. Some persons named as trustees and
officers also serve in similar capacities for other funds advised by
Neuberger Berman and NB Management.
Positions Held
Name, Address and Age (1) with the Trust Principal Occupation(s) (2)
- --------------------- --------------- -----------------------
Faith Colish Trustee Attorney at law, Faith Colish,
63 Wall Street A Professional Corporation.
24th Floor Trustee of five other mutual
New York, NY 10005 funds for which NB Management
Age: 64 acts as investment manager or
administrator.
Walter G. Ehlers Trustee Consultant; Director of The
6806 Suffolk Place Turner Corporation, A.B. Chance
Harvey Cedars, NJ 08008 Company, and Crescent Jewelry,
Age: 67 Inc.
C. Anne Harvey Trustee Director of American
2555 Pennsylvania Avenue, Association of Retired Persons
N.W. ("AARP") Program Services and
Washington, DC 20037 Administrator of AARP
Age: 62 Foundation; The National
Rehabilitation Hospital's Board
of Advisors; Individual
Investors Advisory Committee to
the New York Stock Exchange
Board of Directors; Steering
Committee for the U.S.
Securities and Exchange
Commission Facts on Saving and
Investing Campaign; and
American Savings Education
Council's Policy Board (ASEC).
Howard A. Mileaf Trustee Vice President and Special
WHX Corporation Counsel to WHX Corporation
110 East 59th Street (holding company) since 1992;
30th Floor Director of Kevlin Corporation
New York, NY 10022 (manufacturer of microwave and
Age: 63 other products). Trustee of
six other mutual funds for
which NB Management acts as
investment manager or
administrator.
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Positions Held
Name, Address and Age (1) with the Trust Principal Occupation(s) (2)
- --------------------- --------------- -----------------------
Ruth E. Salzmann Trustee Retired; formerly Director,
1556 Pine Street John Deere Insurance Group
Stevens Point, WI 54481 (1999); Actuarial Consultant
Age: 81 (1998); Executive Vice
President and Actuary, Sentry
Insurance Company (1984).
Candace L. Straight Trustee Private investor and consultant
518 E. Passaic Avenue specializing in the insurance
Bloomfield, NJ 07003 industry; Advisory Director of
Age: 52 Securities Capital LLC, (a
global private equity
investment firm making
investments in the insurance
sector); Principal of Head &
Company, LLC (limited liability
company providing investment
banking and consulting services
to the insurance industry)
until march 1996; Director of
Drake Holdings (U.K. motor
insurer) until June 1996.
Trustee of three other mutual
funds for which NB Management
acts as investment manager or
administrator.
Peter P. Trapp Trustee Assistant Regional Manager for
Ford Motor Credit Company Atlanta Region, Ford Motor
1455 Lincoln Parkway Credit Company since August,
Atlanta, GA 30346-2209 1997; prior thereto, President,
Age: 55 Ford Life Insurance Company,
April, 1995 until August, 1997.
Lawrence Zicklin* Chairman of the Managing Director of Neuberger
Age: 64 Board and Trustee Berman; Director of NB
Management.
Peter E. Sundman Chairman of the Executive Vice President and
Age: 40 Board, President Director of Neuberger Berman,
and Chief Inc. (holding company);
Executive Officer President and Director of NB
and/or Trustee Management; Chairman of the
Board, Chief Executive Officer
and Trustee of nine other
mutual funds for which NB
Management acts as investment
manager or administrator;
President and Chief Executive
Officer of three other mutual
funds for which NB Management
acts as investment adviser or
administrator
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Positions Held
Name, Address and Age (1) with the Trust Principal Occupation(s) (2)
- --------------------- --------------- -----------------------
Daniel J. Sullivan Vice President Senior Vice President of NB
Age: 60 Management since 1992; Vice
President of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.
Michael J. Weiner Vice President and Senior Vice President of NB
Age: 53 Principal Management since 1992;
Financial Officer Principal of Neuberger Berman
from 1998-99; Treasurer of NB
Management from 1992 to 1996;
Vice President and Principal
Financial Officer of nine other
mutual funds for which NB
Management acts as investment
manager or administrator.
Claudia A. Brandon Secretary Employee of Neuberger Berman
Age: 43 Management since 1999;
Secretary of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.
Richard Russell Treasurer and Employee of NB Management since
Age: 53 Principal 1993; Treasurer and Principal
Accounting Officer Accounting Officer of
nine other mutual funds for
which NB Management acts as
investment manager or
administrator.
Stacy Cooper-Shugrue Assistant Employee of Neuberger Berman;
Age: 37 Secretary Assistant Secretary of nine
other mutual funds for which NB
Management acts as investment
manager or administrator.
Barbara DiGiorgio Assistant Treasurer Employee of NB Management;
Age: 41 Assistant Treasurer of nine
other mutual funds for which NB
Management acts as investment
manager or administrator since
1996.
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Positions Held
Name, Address and Age (1) with the Trust Principal Occupation(s) (2)
- --------------------- --------------- -----------------------
Celeste Wischerth Assistant Employee of NB Management;
Age: 39 Treasurer of each Assistant Treasurer of nine
Trust other mutual funds for which NB
Management acts as investment
manager or administrator.
- -----------------------
(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 a Trustee who is an "interested person" of the Trust within the
meaning of the 1940 Act. Mr. Zicklin is an interested person by virtue of the
fact that he is a Director of NB Management and a Managing Director of Neuberger
Berman.
The Trust's Trust Instrument provide that the 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 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. As discussed above under "Investment Information",
effective May 1, 2000, each Portfolio redeemed its investment in its
corresponding series of Advisers Managers Trust in-kind at current net asset
value, subject to the liabilities of Advisers Managers Trust, including the
indemnification obligations to the trustees of Advisers Managers Trust, who are
the same individuals that serve on the Board of Trustees of the Trust. These
indemnification obligations are substantially the same as the indemnification
obligation of the Trust to its Trustees.
Trustees who are not managing directors, officers or employees of NB
Management, Neuberger Berman and/or the Life Companies or any of their
affiliates are paid trustees' fees. For the year ended December 31, 1999, a
total of $104,792 in fees was paid to the Trustees as a group by the Trust and a
total of $107,192 in fees was paid to the Trustees as a group by Advisers
Managers Trust. The following table shows 1999 compensation by Trustee.
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COMPENSATION TABLE
- --------------------------------------------------------------------------------
Pension or Total
Retirement Estimated Compensation
Aggregate Benefits Annual From Trust and
Name of Person, Compensation Accrued As Benefits Upon Fund Complex
Position From Trust(1) Part of Retirement Paid to
Trust's Trustees(1)
Expenses
- --------------------------------------------------------------------------------
Faith Colish, $16,075 None None $81,000(2)
Trustee
Walter G. Ehlers, $14,250 None None $28,500(3)
Trustee
C. Anne Harvey, $15,000 None None $30,000(3)
Trustee
Leslie A. Jacobson,* $15,250 None None $30,500(3)
Trustee
Howard A. Mileaf,** $833 None None $52,417(4)
Trustee
Robert M. Porter,* $16,000 None None $32,000(3)
Trustee
Ruth E. Salzmann, $15,250 None None $30,500(3)
Trustee
Candace L. Straight** $833 None None $53,167(5)
Trustee
Peter P. Trapp, $12,500 None None $25,000(3)
Trustee
Lawrence Zicklin, None None None None
Chairman and Trustee
(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, 1999.
(2) Five other investment companies.
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(3) One other investment company.
(4) Six other investment companies.
(5) Three other investment companies.
* Messrs. Jacobson and Porter resigned from the Board of Trustees effective
December 31, 1999.
** Ms. Straight and Mr. Mileaf became Trustees on November 30, 1999.
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").
Shares of the Balanced Portfolio are also offered directly to Qualified Plans.
As of March 31, 2000, the separate accounts of the Life Companies were known to
the Board of Trustees and the management of the Trust to own of record all
shares of the Growth, Guardian, Liquid Asset, Limited Maturity Bond, Mid-Cap
Growth, Partners and Socially Responsive Portfolios of the Trust and
approximately 98.6% of the shares of the Balanced Portfolio of the Trust. There
were no shareholders of the International Portfolio as of that same date. The
Trustees own in the aggregate less than 1% of the total Trust shares issued and
outstanding.
As of March 31, 2000, separate accounts of the following Life Companies
owned of record or beneficially 5% or more of the Shares of the following
Portfolios:
Percentage of
Outstanding
Shares Owned
------------
Liquid Asset Portfolio
Hartford Life Insurance Company* 93.31%
200 Hopmeadow
Simsbury, CT 06070
Ameritas Life Insurance Corp. 5.80%
5900 O Street
Lincoln, NE 68501
Partners Portfolio
Nationwide Life Insurance Company* 69.24%
P.O. Box 182029
Columbus, OH 43218-2029
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Percentage of
Outstanding
Shares Owned
------------
Growth Portfolio
Nationwide Life Insurance Company* 95.91%
P.O. Box 182029
Columbus, OH 43218-2029
Limited Maturity Bond Portfolio
Nationwide Life Insurance Company* 62.21%
P.O. Box 182029
Columbus, OH 43218-2029
Penn Mutual Life Insurance Company 5.01%
600 Dresher Road
Horsham, PA 19044
Security Life of Denver Insurance 6.68%
Company
1475 Dunwoody Drive
West Chester, PA 19308
Acacia National Life Insurance Company 5.31%
attn: Ameritas/Acacia Mutual Holding
Company
5900 O Street
Lincoln, NE 68510
Balanced Portfolio
Nationwide Life Insurance Company* 49.62%
P.O. Box 182029
Columbus, OH 43218-2029
Penn Mutual Life Insurance Company* 42.05%
600 Dresher Road
Horsham, PA 19044
Guardian Portfolio
Nationwide Life Insurance Company* 99.36%
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Percentage of
Outstanding
Shares Owned
------------
P.O. Box 182029
Columbus, OH 43218-2029
Mid-Cap Growth Portfolio
Nationwide Life Insurance Company* 51.63%
P.O. Box 182029
Columbus, OH 43218-2029
Lincoln Life & Annuity Company of New 47.49%
York
1300 S. Clinton Street
Fort Wayne, IN 46802
Socially Responsive Portfolio
Neuberger Berman Management Inc. 7.89%
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
Neuberger Berman, LLC* 39.12%
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
ReliaStar Life Insurance Company* 22.65%
20 Washington Avenue South
Minneapolis, MN 55401
Northern Life Insurance Company* 29.95%
1501 4th Avenue
Seattle, WA 98101
- ----------
* These entities owned of record 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
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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
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 $54.4 billion as of December 31, 1999. 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 NB Management employ experienced professionals that work in
a competitive environment.
NB Management serves as each Portfolio's investment manager pursuant to a
Management Agreement ("Management Agreement") dated as of May 1, 2000, that was
approved by the Trustees on February 29, 2000.
From May 1, 1995 through April 30, 2000, NB Management served as the
investment manager of the corresponding master series of Advisers Managers Trust
in which each Portfolio invested its net investable assets.
The Management Agreement provides in substance that NB Management will
make and implement investment decisions for the Portfolios in its discretion and
will continuously develop an investment program for each Portfolio's assets. The
Management Agreement permits NB Management to effect securities transactions on
behalf of each Portfolio through associated persons of NB Management. The
Management Agreement also specifically permits NB Management to compensate,
through higher commissions, brokers and dealers who provide investment research
and analysis to the Portfolio, but NB Management has no current plans to pay a
material amount of such compensation.
NB Management provides to each Portfolio, 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 the Trust who are officers,
directors, or employees of NB Management. Several individuals who are directors,
officers or employees of NB Management and/or Neuberger Berman also serve as
trustees and/or officers of the Trust. See "Trustees and Officers." NB
Management provides similar facilities and services to each Portfolio pursuant
to an administration agreement dated May 1, 1995 ("Administration Agreement").
Each Portfolio was authorized to become subject to the Administration Agreement
by vote of the Trustees on May 26, 1994, except the International Portfolio,
which became subject to it on May 1, 1995, the Mid-Cap Growth and Guardian
Portfolios, which became subject to it on August 20, 1997, and the Socially
Responsive Portfolio, which became subject to it on May 28, 1998.
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Management and Administration Fees
For investment management services, Balanced, Growth, Guardian, Mid-Cap
Growth, Partners and Socially Responsive Portfolio each pays NB Management a fee
at the annual rate of 0.55% of the first $250 million of the Portfolio's average
daily net assets, 0.525% of the next $250 million, 0.50% of the next $250
million, 0.475% of the next $250 million, 0.45% of the next $500 million, and
0.425% of average daily net assets in excess of $1.5 billion. International
Portfolio pays NB Management a fee for investment management services at the
annual rate of 0.85% of the first $250 million of the Portfolio's average daily
net assets, 0.825% of the next $250 million, 0.80% of the next $250 million,
0.775% of the next $250 million, 0.75% of the next $500 million and 0.725% of
average daily net assets in excess of $1.5 billion. Limited Maturity Bond and
Liquid Asset Portfolios each pays NB Management a fee for investment management
services at the annual rate of 0.25% of the first $500 million of the
Portfolio's average daily net assets, 0.225% of the next $500 million, 0.20% of
the next $500 million, 0.175% of the next $500 million, and 0.15% of the
Portfolio's average daily net assets in excess of $2 billion.
For administrative services, each Portfolio (except Limited Maturity Bond
and Liquid Asset Portfolios) pays NB Management a fee at the annual rate of
0.30% of that Portfolio's average daily net assets. For administrative services,
Limited Maturity Bond and Liquid Asset Portfolios each pays NB Management a fee
at the annual rate of 0.40% of average daily net assets. In addition, each
Portfolio pays certain out-of-pocket expenses for technology used for
shareholder servicing and shareholder communications subject to the prior
approval of an annual budget by the Trust's Board of Trustees, including a
majority of those Trustees who are not interested persons of the Trust or of NB
Management, and periodic reports to the Board of Trustees on actual expenses.
During the fiscal years ended December 31, 1999, 1998 and 1997, each
Portfolio accrued management and administration fees as follows (these amounts
include management fees incurred by each Portfolio's corresponding master series
of Advisers Managers Trust.
Management and Administration Fees
Accrued for Fiscal Years
Portfolio Ended December 31
1999 1998 1997
---- ---- ----
Growth $ 4,480,508 $ 4,754,721 $5,336,566
Limited Maturity Bond $ 1,699,646 $ 1,726,341 $1,642,678
Liquid Asset $ 100,731 $ 96,793 $ 91,752
Guardian $ 936,051 $ 308,524 $ 397
Balanced $ 1,426,808 $ 1,418,336 $1,554,602
Partners $ 9,610,217 $13,672,777 $9,277,108
Mid-Cap Growth $ 517,803 $ 114,303 $ 681
Socially Responsive $ 7,354 $ N/A $ N/A
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The Management and Administration Agreements each continue until May 1,
2001. The Management Agreement is renewable from year to year with respect to a
Portfolio, so long as its continuance is approved at least annually (1) by the
vote of a majority of the Trustees who are not "interested persons" of NB
Management or the Trust ("Independent Trustees"), cast in person at a meeting
called for the purpose of voting on such approval, and (2) by the vote of a
majority of the Trustees or by a 1940 Act majority vote of the outstanding
shares in that Portfolio. The Administration Agreement is renewable from year to
year with respect to a Portfolio, so long as its continuance is approved at
least annually (1) by the vote of a majority of the Independent Trustees cast in
person at a meeting called for the purpose of voting on such approval, and (2)
by the vote of a majority of the Trustees or by a 1940 Act majority vote of the
outstanding shares in that Portfolio. The Management Agreement is terminable
with respect to a Portfolio without penalty on 60 days' prior written notice
either by the Trust or by NB Management. The Administration Agreement is
terminable with respect to a Portfolio without penalty by NB Management upon at
least 120 days' prior written notice to the Portfolio, and by the Portfolio if
authorized by the Trustees, including a majority of the Independent Trustees, on
at least 30 days' prior written notice to NB Management. Each Agreement
terminates automatically if it is assigned.
Expense Limitations
All Portfolios (except International and Socially Responsive Portfolios).
NB Management has contractually undertaken to limit the Portfolios' expenses
through April 30, 2001 by reimbursing each Portfolio for its total operating
expenses, excluding the compensation of NB Management (with respect to all
Portfolios but the Guardian, Mid-Cap Growth and Liquid Asset Portfolios), taxes,
interest, extraordinary expenses, brokerage commissions and transaction costs,
that exceed, in the aggregate, 1% per annum of the Portfolio's average daily net
asset value. The Guardian and Mid-Cap Growth Portfolios have each in turn
contractually undertaken to repay through December 31, 2004, for the excess
operating expenses borne by NB Management, so long as the Portfolio's annual
operating expenses during that period (exclusive of the compensation of NB
Management (with respect to all Portfolios but the Guardian, Mid-Cap Growth and
Liquid Asset Portfolios), taxes, interest, extraordinary expenses, brokerage
commissions and transaction costs) do not exceed the expense limitation, and
further provided that the reimbursements are made within three years after the
year in which NB Management incurred the expense.
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<PAGE>
International and Socially Responsive Portfolios. NB Management has
contractually undertaken to limit the Portfolios' expenses through April 30,
2001 by reimbursing each Portfolio for its total operating expenses (and its pro
rata share of its corresponding master series' total operating expenses),
including compensation to NB Management, but excluding taxes, interest,
extraordinary expenses and brokerage commissions, that exceed, in the aggregate,
1.70% per annum of the International Portfolio's average daily net asset value
and 1.50% per annum of the Socially Responsive Portfolio's average daily net
asset value. Each Portfolio has in turn contractually undertaken to repay
through December 31, 2004 for the excess operating expenses borne by NB
Management, so long as the Portfolio's annual operating expenses during that
period (exclusive of taxes, interest, extraordinary expenses and brokerage
commissions) do not exceed the expense limitation, and further provided that the
reimbursements are made within three years after the year in which NB Management
incurred the expense.
The effect of any expense limitation by NB Management is to reduce
operating expenses of a Portfolio and thereby increase total return. There can
no assurance that these expense limitation agreements will be continued or be
extended beyond the period indicated.
For the year ended December 31, 1999, NB Management reimbursed the Liquid
Asset Portfolio $13,038, the Mid-Cap Growth Portfolio $48,298, the Socially
Responsive Portfolio $64,831. Pursuant to a recoupment agreement, the Guardian
Portfolio repaid NB Management $19,386 during the year ended December 31, 1999
for amounts previously reimbursed by NB Management. For the year ended December
31, 1998, NB Management reimbursed the Liquid Asset Portfolio $20,005, the
Mid-Cap Growth Portfolio $58,074 and the Guardian Portfolio $50,071. For the
year ended December 31, 1997 NB Management reimbursed the Liquid Asset Portfolio
$15,867, the Mid-Cap Growth Portfolio $13,432, and the Guardian Portfolio
$13,586.
Management and Control of NB Management and Neuberger Berman
The directors and officers of NB Management, who are deemed "control
persons," all of whom have offices at the same address as NB Management, are
Michael M. Kassen, Chairman and Executive Vice President; Richard A. Cantor,
Director; Robert Matza, Director; Theodore P. Giuliano, Director and Vice
President; Barbara Katersky, Senior Vice President; Irwin Lainoff, Director;
Daniel J. Sullivan, Senior Vice President; Philip Ambrosio, Senior Vice
President and Chief Financial Officer; Peter E. Sundman, Director and President;
Michael J. Weiner, Senior Vice President; and Lawrence Zicklin, Director.
The directors and officers of Neuberger Berman, who are deemed "control
persons", all of whom have offices at the same address as Neuberger Berman, are
Jeffrey B. Lane, President and Chief Executive Officer; Robert Matza, Executive
Vice President and Chief Administrative Officer; Michael M. Kassen, Executive
Vice President and Chief Investment Officer; Heidi L. Schneider, Executive Vice
President; Peter E. Sundman, Executive Vice President; Philip Ambrosio, Senior
Vice President and Chief Financial Officer; Kevin Handwerker, Senior Vice
President, General Counsel and Secretary; Robert Akeson, Senior Vice President;
Salvatore A. Buonocore, Senior Vice President; Seth J. Finkel, Senior Vice
President; Robert Firth, Senior
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<PAGE>
Vice President; Brian Gaffney, Senior Vice President; Brian E. Hahn, Senior Vice
President; Lawrence J. Cohn, Senior Vice President; Joseph K. Herlihy, Senior
Vice President and Treasurer; Barbara R. Katersky, Senior Vice President; Diane
E. Lederman, Senior Vice President; Peter B. Phelan, Senior Vice President;
Robert H. Splan, Senior Vice President; Andrea Trachtenberg, Senior Vice
President; Michael J. Weiner, Senior Vice President; Marvin C. Schwartz,
Managing Director.
Mr. Zicklin is a trustee of the Trust. Messrs. Sundman and Weiner are
officers of the Trust.
Neuberger Berman and NB Management are wholly owned subsidiaries of
Neuberger Berman, Inc., a publicly held holding company owned primarily by the
employees of Neuberger Berman.
Sub-Adviser
NB Management retains Neuberger Berman, 605 Third Avenue, New York, NY
10158-3698, as a sub-adviser with respect to each Portfolio, pursuant to a
Sub-Advisory Agreement dated May 1, 2000 that was approved by the Trustees on
February 29, 2000.
From May 1, 1995 through April 30, 2000, Neuberger Berman served as the
sub-adviser of the corresponding series of Advisers Managers Trust in which each
Portfolio invested its net investable assets.
The Sub-Advisory Agreement provides in substance that Neuberger Berman
will furnish to NB 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 NB Management reasonably requests. In this manner, NB
Management expects to have available to it, in addition to research from other
professional sources, the capability of the research staff of Neuberger Berman.
This 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 NB Management.
The Sub-Advisory Agreement provides that the services rendered by Neuberger
Berman will be paid for by NB 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 NB
Management.
The Sub-Advisory Agreement continues with respect to each Portfolio until
May 1, 2001, 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 each Portfolio by the Trustees, or by a 1940 Act majority vote of the
outstanding shares of that Portfolio, by NB Management, or by Neuberger Berman
on not less than 30 nor more than 60 days' prior written notice to the
appropriate Portfolio. The Sub-Advisory Agreement also terminates automatically
with respect to each Portfolio if it is assigned or if the Management Agreement
terminates with respect to the Portfolio.
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<PAGE>
Most money managers that come to the Neuberger Berman organization have at
least fifteen years experience. Neuberger Berman and NB Management employ
experienced professionals that work in a competitive environment.
The Portfolios are subject to certain limitations imposed on all advisory
clients of Neuberger Berman (including the Portfolios, other mutual funds
referred to below ("Other NB 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
NB Management currently serves as investment adviser or manager of the
following investment companies, which had aggregate net assets of approximately
$18.7 billion, as of December 31, 1999. Neuberger Berman acts as sub-adviser to
these investment companies.
Approximate Net
Assets at
Name December 31, 1999
- ---- -----------------
Neuberger Berman Cash Reserves ................... $1,067,386,621
Portfolio (investment portfolio for
Neuberger Berman Cash Reserves)
Neuberger Berman Government Money ................ $496,244,470
Portfolio (investment portfolio for
Neuberger Berman Government Money
Fund)
Neuberger Berman Limited Maturity Bond ........... $264,519,644
Portfolio (investment portfolio for
Neuberger Berman Limited Maturity
Bond Fund and Neuberger Berman
Limited Maturity Bond Trust)
Neuberger Berman High Yield Bond Portfolio ....... $17,717,320
(investment portfolio for Neuberger Berman
High Yield Bond Fund)
Neuberger Berman Municipal Money ................. $301,713,416
Portfolio (investment portfolio for
Neuberger Berman Municipal Money Fund)
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Approximate Net
Assets at
Name December 31, 1999
- ---- -----------------
Neuberger Berman Municipal Securities ............ $32,652,269
Portfolio (investment portfolio for
Neuberger Berman Municipal Securities Trust)
Neuberger Berman Genesis Portfolio ............... $1,619,248,797
(investment portfolio for Neuberger Berman
Genesis Fund, Neuberger Berman
Genesis Trust, Neuberger Berman Genesis Assets
and Neuberger Berman Genesis Institutional)
Neuberger Berman Guardian Portfolio .............. $4,406,419,837
(investment portfolio for Neuberger Berman
Guardian Fund, Neuberger Berman
Guardian Trust and Neuberger Berman
Guardian Assets)
Neuberger Berman Manhattan Portfolio ............. $901,991,808
(investment portfolio for Neuberger Berman
Manhattan Fund, Neuberger Berman
Manhattan Trust and Neuberger Berman
Manhattan Assets)
Neuberger Berman Millennium Portfolio ............ $214,859,495
(investment portfolio for Neuberger Berman
Millenium Fund, Neuberger Berman Millennium
Trust and Neuberger Berman Millennium Assets)
Neuberger Berman International Portfolio ......... $195,064,579
(investment portfolio for Neuberger Berman
International Fund and Neuberger Berman
International Trust)
Neuberger Berman Partners Portfolio .............. $3,489,710,309
(investment portfolio for Neuberger Berman
Partners Fund, Neuberger Berman
Partners Trust and Neuberger Berman
Partners Assets)
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Approximate Net
Assets at
Name December 31, 1999
- ---- -----------------
Neuberger Berman Focus Portfolio ................ $1,772,136,921
(investment portfolio for Neuberger Berman
Focus Fund, Neuberger Berman Focus
Trust and Neuberger Berman Focus Assets)
Neuberger Berman Socially Responsive ............ $146,960,016
Portfolio (investment portfolio for
Neuberger Berman Socially Responsive Fund,
Neuberger Berman Socially Responsive Trust, and
Neuberger Berman Socially Responsive Assets
Neuberger Berman Century Portfolio .............. $12,994,259
(investment portfolio for Neuberger Berman
Century Fund and Neuberger Berman Century Trust
Neuberger Berman Regency Portfolio .............. $33,586,640
(investment portfolio for Neuberger Berman
Regency Fund and Neuberger Berman Regency
Trust)
Advisers Managers Trust (eight series) .......... $2,442,187,166
The investment decisions concerning each Portfolio and the other mutual
funds referred to above (collectively, "Other NB Funds") have been and will
continue to be made independently of one another. In terms of their investment
objectives, most of the Other NB Funds differ from the Portfolios. Even where
the investment objectives are similar, however, the methods used by the Other NB
Funds and the Portfolios to achieve their objectives may differ. The investment
results achieved by all of the mutual funds managed by NB Management have varied
from one another in the past and are likely to vary in the future.
There may be occasions when a Portfolio and one or more of the Other NB
Funds or other accounts managed by Neuberger Berman are contemporaneously
engaged in purchasing or selling the same securities from or to third parties.
When this occurs, the transactions are averaged as to price and allocated, in
terms of amount, in accordance with a formula considered to be equitable to the
funds involved. Although in some cases this arrangement may have a detrimental
effect on the price or volume of the securities as to a Portfolio, in other
cases it is believed that a Portfolio's ability to participate in volume
transactions may produce better executions for it. In any case, it is the
judgment of the Trustees that the desirability of each Portfolio having its
advisory arrangements with NB Management outweighs any disadvantages that may
result from contemporaneous transactions.
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The Portfolios are subject to certain limitations imposed on all advisory
clients of Neuberger Berman (including the Portfolios, the Other NB Funds, and
other managed accounts) and personnel of Neuberger Berman and its affiliates.
These include, for example, limits that may be imposed in certain industries or
by certain companies, and policies of Neuberger Berman that limit the aggregate
purchases, by all accounts under management, of the outstanding shares of public
companies.
DISTRIBUTION ARRANGEMENTS
NB Management serves as the distributor ("Distributor") in connection with
the offering of each Portfolio's shares on a no-load basis. In connection with
the sale of its shares, each 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 personally, through the mails, or
by electronic means. The Distributor is each Portfolio's "principal underwriter"
within the meaning of the 1940 Act and, as such, acts as agent in arranging for
the sale of each 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 Trust, on behalf of each Portfolio, and the Distributor are parties to
a Distribution Agreement dated May 1, 1995, that continues until May 1, 2001.
The Distribution Agreement may be renewed annually thereafter if specifically
approved by (1) the vote of a majority of the Trustees or a 1940 Act majority
vote of the Portfolio's outstanding shares and (2) the vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval. The Distribution Agreement may be terminated by either
party and will automatically terminate on its assignment, in the same manner as
the Management Agreement and the Sub-Advisory Agreement.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Share Prices and Net Asset Value
Each Portfolio's shares are bought or sold at a price that is the
Portfolio's NAV per share. The NAVs for each Portfolio are calculated by
subtracting total liabilities from total assets. Each Portfolio's per share NAV
is calculated by dividing its NAV by the number of Portfolio's shares
outstanding and rounding the result to the nearest full cent. Each Portfolio
calculates its NAV as of the close of regular trading on the NYSE, usually 4
p.m. Eastern time, on each day the NYSE is open.
The Liquid Asset Portfolio tries to maintain a stable NAV of $1.00 per
share. It values its securities at their cost at the time of purchase and
assumes a constant amortization to maturity of any discount or premium. Although
the Portfolio's reliance on Rule 2a-7 and its use of the amortized cost
valuation method should enable the Portfolio, under most conditions, to maintain
a stable $1.00 share price, there can be no assurance it will be able to do so.
An investment in the Liquid Asset Portfolio is neither insured nor guaranteed by
the U.S. Government.
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The Equity Portfolios (except International Portfolio) value securities
(including options) listed on the NYSE, the American Stock Exchange or other
national securities exchanges or quoted on The Nasdaq Stock Market, and other
securities for which market quotations are readily available, at the last
reported sale price on the day the securities are being valued. If there is no
reported sale of such a security on that day, the security is valued at the mean
between its closing bid and asked prices on that day. These Portfolios value all
other securities and assets, including restricted securities, by a method that
the Trustees believe accurately reflects fair value.
International Portfolio values equity securities at the last reported sale
price on the principal exchange or in the principal over-the-counter market in
which such securities are traded, as of the close of regular trading on the NYSE
on the day the securities are being valued or, if there are no sales, at the
last available bid price on that day. Debt obligations are valued at the last
available bid price for such securities or, if such prices are not available, at
prices for securities of comparable maturity, quality, and type. Foreign
securities are translated from the local currency into U.S. dollars using
current exchange rates. The Portfolios value all other types of securities and
assets, including restricted securities and securities for which market
quotations are not readily available, by a method that the Trustees believe
accurately reflects fair value.
International Portfolio's securities are traded primarily in foreign
markets which may be open on days when the NYSE is closed. As a result, the NAV
of the International Portfolio may be significantly affected on days when
shareholders have no access to that Portfolio. Similarly, as discussed above
under "Foreign Securities," other Portfolios may invest to varying degrees in
securities traded primarily in foreign markets, and their share prices may also
be affected on days when shareholders have no access to the Portfolios.
Limited Maturity Bond and Balanced (debt securities portion) Portfolios
value their securities on the basis of bid quotations from independent pricing
services or principal market makers, or, if quotations are not available, by a
method that the trustees of the Trust believe accurately reflects fair value.
The Portfolios periodically verify valuations provided by the pricing services.
Short-term securities with remaining maturities of less than 60 days may be
valued at cost which, when combined with interest earned, approximates market
value.
If NB Management believes that the price of a security obtained under a
Portfolio's valuation procedures (as described above) does not represent the
amount that the Portfolio reasonably expects to receive on a current sale of the
security, the Portfolio will value the security based on a method that the
Trustees believe accurately reflects fair value.
Suspension of Redemptions
The Portfolios are normally open for business each day the NYSE is open
("Business Day"). The right to redeem a 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 Portfolio of securities owned by it is not reasonably
practicable or it is not reasonably practicable for that Portfolio 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 a
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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
Each 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 Portfolios do not redeem in kind under
normal circumstances, but would do so when the Trustees determined that it was
in the best interests of a Portfolio's shareholders as a whole.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Portfolio distributes to its shareholders (primarily insurance
company separate accounts and Qualified Plans) substantially all of its share of
its net investment income, any net realized capital gains and, with respect to
all Portfolios except the Liquid Asset Portfolio, any net realized gains from
foreign currency transactions, if any, earned or realized by it. Each 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 Business Day. A Portfolio's
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 a Portfolio's NAV until they are distributed. With respect to
the Mid-Cap Growth, Guardian, Growth, Partners, Balanced, Limited Maturity Bond,
Socially Responsive and International Portfolios, 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. The Liquid Asset Portfolio distributes to its shareholders
substantially all of its net investment income and net realized capital gains.
Income dividends are declared daily for the Liquid Asset Portfolio at the time
its NAV is calculated and are paid monthly, and net realized capital gains, if
any, are normally distributed annually in February.
ADDITIONAL TAX INFORMATION
Set forth below is a discussion of certain U.S. federal income tax issues
concerning the Portfolios and the purchase, ownership, and disposition of
Portfolio shares. This discussion does not purport to be complete or to deal
with all aspects of federal income taxation that may be relevant to shareholders
in light of their particular circumstances. This discussion is based upon
present provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the regulations promulgated thereunder, and judicial and administrative
ruling authorities, all of which are subject to change, which change may be
retroactive. Prospective investors should consult
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their own tax advisers with regard to the federal tax consequences of the
purchase, ownership, or disposition of Portfolio shares, as well as the tax
consequences arising under the laws of any state, foreign country, or other
taxing jurisdiction.
Taxation of Each Portfolio
Subchapter M
To continue to qualify for treatment as a RIC under the Code, each
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, with respect to all Portfolios except
the Liquid Asset Portfolio, net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. With respect to each 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 (together with the 50% requirement, the "Diversification Requirement").
Each Portfolio intends to satisfy the Distribution Requirement, the Income
Requirement, and the Diversification Requirement. If a Portfolio failed to
qualify for treatment as a RIC for any taxable year, it would be taxed on the
full amount of its taxable income for that year without being able to deduct the
distributions it makes to its shareholders and the shareholders would treat all
those distributions, including distributions of net capital gain (the excess of
net long-term capital gain over net short-term capital loss), as dividends (that
is, ordinary income) to the extent of the Portfolio's earnings and profits.
A Portfolio will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ending on October 31 of that year, plus certain
other amounts. To avoid application of the Excise Tax, the Portfolios intend to
make distributions in accordance with the calendar year requirement.
A distribution will be treated as paid on December 31 of a calendar year
if it is declared by a Portfolio in October, November or December of that year
with a record date in such a month and paid by the Portfolio during January of
the following year.
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Section 817(h)
The Portfolios serve as the underlying investments for variable annuity
contracts and variable life insurance policies ("Variable Contracts") issued
through separate accounts of the life insurance companies which may or may not
be affiliated. 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
Portfolios), 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.
Each Portfolio 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 a Portfolio.
Tax Aspects of the Investments of the Portfolios
Dividends, interest, and in some cases, capital gains received by a
Portfolio 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, and many
foreign countries do not impose taxes on capital gains in respect of investments
by foreign investors.
The Equity Portfolios may invest in the stock of "passive foreign
investment companies" ("PFICs"). A PFIC is any foreign corporation (with certain
exceptions) that, in general, meets either of the following tests: (1) at least
75% of its gross income is passive; or (2) an average of at least 50% of its
assets produce, or are held for the production of, passive income. Under certain
circumstances, if a Portfolio holds stock of a PFIC, it 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
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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 it
distributes that income to its shareholders (assuming the Portfolio qualifies as
a regulated investment company).
In general, under the PFIC rules, an excess distribution is treated as
having been realized ratably over the period during which the Portfolio held the
PFIC shares. A Portfolio will itself be subject to tax on the portion, if any,
of an excess distribution that is so allocated to prior Portfolio taxable years
and an interest factor will be added to the tax, as if the tax had been payable
in such prior taxable years. Certain distributions from a PFIC as well as gain
from the sale of PFIC shares are treated as excess distributions. Excess
distributions are characterized as ordinary income even though, absent
application of the PFIC rules, certain excess distributions might have been
classified as capital gain.
If a Portfolio invests in a PFIC and elects to treat the PFIC as a
qualified electing fund ("QEF"), then in lieu of incurring the foregoing tax and
interest obligation, the Portfolio would be required to include in income each
year its pro rata share of the Portfolio's 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 and avoid
imposition of the excise tax -- even if those earnings and gain were not
received by the Portfolio from the QEF. In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.
A holder of stock in a PFIC generally may elect to include in ordinary
income for 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 under the election (and under regulations proposed in 1992
that provided a similar election with respect to the stock of certain PFICs).
The adjusted basis in each PFIC's stock subject to the election would be
adjusted to reflect the amounts of income included and deductions taken
thereunder. 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 Portfolios (except Liquid Asset Portfolio) 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. Gains
from the disposition of foreign currencies (except certain gains that may be
excluded by future regulations), and gains from Hedging Instruments derived by a
Portfolio with respect to its business of investing in securities or foreign
currencies, will qualify as permissible income for its corresponding Portfolio
under the Income Requirement.
Exchange-traded futures contracts, certain options, and certain forward
contracts constitute "Section 1256 Contracts." Section 1256 Contracts are
required to be "marked-to-market" (that is,
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treated as having been sold at market value) for federal income tax purposes at
the end of a Portfolio's taxable year. Sixty percent of any net gain or loss
recognized as a result of these "deemed sales" and 60% of any net realized gain
or loss from any actual sales of Section 1256 contracts are treated as long-term
capital gain or loss, and the remainder is treated as short-term capital gain or
loss. Section 1256 contracts also may be marked-to-market for purposes of the
excise tax. These rules may operate to increase the amount that a Portfolio must
distribute to satisfy the Distribution Requirement, which will be taxable to the
shareholders as ordinary income, and to increase the net capital gain recognized
by the Portfolio, without in either case increasing the cash available to the
Portfolio. A Portfolio may elect to exclude certain transactions from the
operation of section 1256, although doing so may have the effect of increasing
the relative proportion of net short-term capital gain (taxable as ordinary
income) and/or increasing the amount of dividends that such Portfolio must
distribute to meet the Distribution Requirement and to avoid imposition of the
excise tax.
Transactions in options, futures and forward contracts undertaken by a
Portfolio may result in "straddles" for federal income tax purposes. The
straddle rules may affect the character of gains (or losses) realized by the
Portfolio, and losses realized by the Portfolio on positions that are part of a
straddle may be deferred under the straddle rules, rather than being taken into
account in calculating the taxable income for the taxable year in which the
losses are realized. In addition, certain carrying charges (including interest
expense) associated with positions in a straddle may be required to be
capitalized rather than deducted currently. Certain elections that each
Portfolio may make with respect to its straddle positions may also affect the
amount, character and timing of the recognition of gains or losses from the
affected positions.
Because only a few regulations implementing the straddle rules have been
promulgated, the consequences of such transactions to each Portfolio are not
entirely clear. The straddle rules may increase the amount of short-term capital
gain realized by each Portfolio, which is taxed as ordinary income when
distributed to shareholders. Because application of the straddle rules may
affect the character of gains or losses, defer losses and/or accelerate the
recognition of gains or losses from the affected straddle positions, the amount
which must be distributed to shareholders as ordinary income or long-term
capital gain may be increased or decreased substantially as compared to a fund
that did not engage in such transactions.
Section 988 of the Code also may apply to forward contracts and options on
foreign currencies. Under section 988 each foreign currency gain or loss
generally is computed separately and treated as ordinary income or loss. In the
case of overlap between section 1256 and 988, special provisions determine the
character and timing of any income, gain or loss.
When a covered call option written (sold) by a Portfolio expires, it
realizes a short-term capital gain equal to the amount of the premium it
received for writing the option. When a Portfolio terminates its obligations
under such an option by entering into a closing transaction, it realizes a
short-term capital gain (or loss), depending on whether the cost of the closing
transaction is less (or more) than the premium it received when it wrote the
option. When a covered call option written by a Portfolio is exercised, the
Portfolio is treated as having sold the underlying security, producing long-term
or short-term capital gain or loss, depending on the holding period of the
underlying security and
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whether the sum of the option price received on the exercise plus the premium
received when it wrote the option is more or less than the basis of the
underlying security.
If a Portfolio has an "appreciated financial position" -- generally, an
interest (including an interest through an option, futures or forward contract,
or short sale) with respect to any stock, debt instrument (other than "straight
debt"), or partnership interest the fair market value of which exceeds its
adjusted basis -- and enters into a "constructive sale" of the same or
substantially similar property, the Portfolio will be treated as having made an
actual sale thereof, with the result that gain will be recognized at that time.
A constructive sale generally consists of a short sale, an offsetting notional
principal contract (e.g., a swap contract), or a futures or forward contract
entered into by a Portfolio or a related person with respect to the same or
substantially similar property. In addition, if the appreciated financial
position is itself a short sale or such a contract, acquisition of the
underlying property or substantially identical property will be deemed a
constructive sale. The foregoing will not apply, however, to any transaction
during any taxable year that otherwise would be treated as a constructive sale
if the transaction is closed within 30 days after the end of that year and the
Portfolio holds the appreciated financial position unhedged for 60 days after
that closing (i.e., at no time during that 60-day period is the Portfolio risk
of loss regarding that position reduced by reason of certain specified
transactions with respect to substantially identical or related property, such
as having an option to sell, being contractually obligated to sell, making a
short sale, or granting an option to buy substantially identical stock or
securities).
Gains or losses attributable to fluctuations in exchange rates which occur
between the time a Portfolio accrues income or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time the
Portfolio actually collects such receivables or pays such liabilities generally
are treated as ordinary income or ordinary loss. Similarly, on disposition of
some investments, including debt securities and certain forward contracts
denominated in a foreign currency, gains or losses attributable to fluctuations
in the value of the foreign currency between the acquisition and disposition of
the position also are treated as ordinary gain or loss. These gains and losses,
referred to under the Code as "Section 988" gains or losses, increase or
decrease the amount of the Portfolio's investment company taxable income
available to be distributed to its shareholders as ordinary income. If Section
988 losses exceed other investment company taxable income during a taxable year,
the Portfolio would not be able to make any ordinary dividend distributions, or
distributions made before the losses were realized would be recharacterized as a
return of capital to shareholders, rather than as an ordinary dividend, reducing
each shareholder's basis in his or her Portfolio's shares.
Limited Maturity Bond and Liquid Asset Portfolios may invest in municipal
bonds that are purchased with market discount (that is, at a price less than the
bond's principal amount or, in the case of a bond that was issued with original
issue discount ("OID"), at a price less than the amount of the issue price plus
accrued OID) ("municipal market discount bonds"). If a bond's market discount is
less than the product of (1) 0.25% of the redemption price at maturity times (2)
the number of complete years to maturity after the taxpayer acquired the bond,
then no market discount is considered to exist. Gain on the disposition of a
municipal market discount bond purchased by the Portfolio (other than a bond
with a fixed maturity
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date within one year from its issuance), generally is treated as ordinary
(taxable) income, rather than capital gain, to the extent of the bond's accrued
market discount at the time of disposition. Market discount on such a bond
generally is accrued ratably, on a daily basis, over the period from the
acquisition date to the date of maturity. In lieu of treating the disposition
gain as described above, a Portfolio may elect to include market discount in its
gross income currently, for each taxable year to which it is attributable.
Partners, Balanced, and Socially Responsive Portfolios each may acquire
zero coupon or other securities issued with OID. As the holder of those
securities, each Portfolio must take into income the OID and other non-cash
income that accrues on the securities during the taxable year, even if no
corresponding payment on the securities is received during the year. Because
each Portfolio annually must distribute substantially all of its investment
company taxable income to satisfy the Distribution Requirement and avoid
imposition of the excise tax, 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 it actually receives. Those distributions will be made from a
Portfolio's cash assets or, if necessary, from the proceeds of the sale of
portfolio securities. A Portfolio may realize capital gains or losses from those
sales, which would increase or decrease its corresponding investment company
taxable income and/or net capital gain.
PORTFOLIO TRANSACTIONS
Neuberger Berman acts as each Portfolio's principal broker (except with
respect to International Portfolio) to the extent a broker is used in the
purchase and sale of portfolio securities (other than certain securities traded
on the OTC market). Neuberger Berman may act as broker for International
Portfolio. Neuberger Berman receives brokerage commissions for these services.
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 Portfolios 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 the
prices quoted by 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), each Portfolio's 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, NB 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 Portfolio
or NB Management. Some of these research services may be of value to NB
Management in advising its various clients (including the Portfolios) although
not all of these services are necessarily used by NB Management in managing the
Portfolios. Under certain conditions, a Portfolio may pay higher
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brokerage commissions in return for brokerage and research services, although no
Portfolio has a current arrangement to do so. In any case, each Portfolio 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.
During the years ended December 31, 1999, 1998, and 1997, the
corresponding master series of the Growth Portfolio paid total brokerage
commissions of $1,017,394, $906,984, and $1,297,021, respectively, of which
$441,154, $389,675, and $541,724, respectively, was paid to Neuberger Berman.
Transactions in which the corresponding series used Neuberger Berman as broker
comprised 46.8% of the aggregate dollar amount of transactions involving the
payment of commissions, and 43.4% of the aggregate brokerage commissions paid by
it during the year ended December 31, 1999. 98.7% of the $568,809 paid to other
brokers by the corresponding series during the year ended December 31, 1999
(representing commissions on transactions involving approximately $337,898,393)
was directed to those brokers because of research services they provided. During
the year ended December 31, 1999 the corresponding series acquired securities of
the following of its regular broker-dealers ("B/Ds"): Donaldson, Lufkin &
Jenrette Securities Corp.; Goldman, Sachs & Co.; General Electric Capital Corp.;
Lehman Brothers Inc.; and State Street Bank and Trust Company; at that date, the
series held the securities of its regular B/Ds with an aggregate value as
follows: $4,668,188, Donaldson, Lufkin & Jenrette Securities Corp.; $6,563,281,
Lehman Brothers Inc.; $6,900,000 State Street Bank and Trust Company.
During the years ended December 31, 1999, 1998, and 1997, the
corresponding master series of Balanced Portfolio paid total brokerage
commissions of $208,301, $162,566, and $229,076, respectively, of which $88,807,
$70,352, and $94,867, respectively, was paid to Neuberger Berman. Transactions
in which the series used Neuberger Berman as broker comprised 45.0% of the
aggregate dollar amount of transactions involving the payment of commissions,
and 42.6% of the aggregate brokerage commissions paid by it during the year
ended December 31, 1999. 98.8% of the $118,020 paid to other brokers by the
series during the year ended December 31, 1999 (representing commissions on
transactions involving approximately $71,982,542 was directed to those brokers
because of research services they provided. During the year ended December 31,
1999 the series acquired securities of the following of its regular B/Ds:
Donald, Lufkin & Jenrette Securities Corp.; General Electric Capital Corp.;
Goldman, Sachs & Co.; Merrill Lynch, Pierce, Fenner & Smith, Inc.; and State
Street Bank and Trust Company; at that date, the series held the securities of
its regular B/Ds with an aggregate value as follows: $783,675, Donald, Lufkin &
Jenrette Securities Corp.; $516,092, General Electric Capital Corp.; $2,495,969,
Goldman, Sachs & Co.; $1,762,049, Lehman Brothers Inc.; $1,091,667, Morgan
Stanley Dean Witter & Co.; $1,150,000, State Street Bank and Trust Company.
During the years ended December 31, 1999, 1998, 1997, the corresponding
master series of Partners Portfolio paid total brokerage commissions of
$3,791,850, $6,312,310, $3,535,761, respectively, of which $1,989,139,
$3,663,981, and $2,252,539, respectively, was paid to Neuberger Berman.
Transactions in which the series used Neuberger Berman as broker comprised 55.5%
of the aggregate dollar amount of transactions involving the payment of
commissions, and 52.5% of the
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aggregate brokerage commissions paid by it during the year ended December 31,
1999. 89.3% of the $1,610,025 paid to other brokers by the series during the
year ended December 31, 1999 (representing commissions on transactions involving
approximately $1,139,695,158 was directed to those brokers because of research
services they provided. During the year ended December 31, 1999 the series
acquired securities of the following of its regular B/Ds: General Electric
Capital Corp., Goldman, Sachs & Co.; Morgan Stanley Dean Witter & Co.; and State
Street Bank and Trust Company; at that date, the series held the securities of
its regular B/Ds with an aggregate value as follows: $5,820,000, State Street
Bank and Trust Company.
During the years ended December 31, 1999, 1998 and 1997, the corresponding
master series of Mid Cap Growth Portfolio paid total brokerage commissions of
$124,284, $37,363, and $1,469, respectively, of which $60,591, $18,697 and
$1,364, respectively, was paid to Neuberger Berman. Transactions in which the
series used Neuberger Berman as broker comprised 49.5% of the aggregate dollar
amount of transactions involving the payment of commissions, and 48.8% of the
aggregate brokerage commissions paid by it during the year ended December 31,
1999. 98.4% of the $62,683 paid to other brokers by the series during the year
ended December 31, 1999 (representing commissions on transactions involving
approximately $40,922,833) was directed to those brokers because of research
services they provided. During the year ended December 31, 1999 the series
acquired securities of its regular B/Ds: Donaldson, Lufkin & Jenrette Securities
Corp.; General Electric Capital Corp.; Goldman, Sachs & Co.; Lehman Brothers
Inc.; Merrill Lynch, Pierce, Fenner & Smith Inc.; and State Street Bank and
Trust Company; at that date, the series held the securities of its regular B/Ds
with an aggregate value as follows: $933,638 Donaldson, Lufkin & Jenrette
Securities Corp,; $1,321,125, Lehman Brothers Inc.; $2,570,000, State Street
Bank and Trust Company.
During the year ended December 31, 1999, 1998 and 1997, the corresponding
master series of Guardian Portfolio paid total brokerage commissions of
$272,418, $158,418 and $634, respectively, of which $146,413, $77,154 and $601,
respectively, was paid to Neuberger Berman. Transactions in which the series
used Neuberger Berman as broker comprised 59.8% of the aggregate dollar amount
of transactions involving the payment of commissions, and 53.8% of the aggregate
brokerage commissions paid by it during the year ended December 31, 1999. 85.0%
of the $107,146 paid to other brokers by the series during the year ended
December 31, 1999 (representing commissions on transactions involving
approximately $75,262,102) was directed to those brokers because of research
services they provided. During the year ended December 31, 1999 the series
acquired securities of the following of its regular B/Ds: General Electric
Capital Corp.; Goldman, Sachs & Co.; Merrill Lynch, Pierce Fenner & Smith Inc.;
Morgan Stanley Dean Witter & Co.; and State Street Bank and Trust Company; at
that date, the series held the securities of its regular B/Ds: with an aggregate
value as follows: $1,841,475, Morgan Stanley Dean Witter & Co.; $4,590,000,
State Street Bank and Trust Company.
During the year ended December 31, 1999, corresponding master series
Liquid Asset Portfolio acquired securities of the following of its regular B/Ds:
General Electric Capital Corp.; Goldman, Sachs & Co.; Merrill Lynch, Pierce,
Fenner & Smith Inc.; Morgan Stanley Dean Witter & Co.; and State Street Bank and
Trust Company; at that date, the series held securities of its regular B/Ds with
aggregate value as follows: $397,145, General Electric Capital Corp.; $599,031,
Goldman,
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Sachs & Co.; $373,114, Merrill Lynch, Pierce, Fenner & Smith Inc.; $837,280,
Morgan Stanley Dean Witter & Co.; $749,000, State Street Bank and Trust Company.
During the year ended December 31, 1999, corresponding master series of
Limited Maturity Bond Portfolio acquired securities of the following of its
regular B/Ds: General Electric Capital Corp.; Lehman Brother Inc.; and Merrill
Lynch, Pierce, Fenner & Smith Inc.; at that date, the series held securities of
its regular B/Ds with aggregate value as follows: $2,634,853, General Electric
Capital Corp.; $9,983,875, Goldman, Sachs & Co.; $6,715,539 Lehman Brothers
Inc.; $4,231,526, Morgan Stanley Dean Witter & Co.
During the year ended December 31, 1999, the corresponding master series
of the Socially Responsive Portfolio paid total brokerage commission of $2,890,
of which $2,542 was paid to Neuberger Berman. Transactions in which the
corresponding series used Neuberger Berman as broker comprised 90.9% of the
aggregate dollar amount of transactions involving the payment of commissions,
and 88.0% of the aggregate brokerage commissions paid by it during the year
ended December 31, 1999. 100.0% of the $347 paid to other brokers by the
corresponding series during the year ended December 31, 1999 (representing
commissions on transactions involving approximately $189,545) was directed to
those brokers because of research services they provided. During the year ended
December 31, 1999 the series acquired securities of the following of its regular
B/Ds: Goldman, Sachs & Co; and State Street Bank and Trust Company; at that
date, the series did not hold any securities of its regular B/Ds.
Insofar as portfolio transactions of Partners Portfolio result from active
management of equity securities, and insofar as portfolio transactions of Growth
Portfolio and Mid-Cap Growth Portfolio result from seeking capital appreciation
by selling securities whenever sales are deemed advisable without regard to the
length of time the securities may have been held, it may be expected that the
aggregate brokerage commissions paid by those Portfolio to brokers (including
Neuberger Berman where it acts in that capacity) may be greater than if
securities were selected solely on a long-term basis.
Portfolio securities may, from time to time, be loaned by the Equity
Portfolios to Neuberger Berman in accordance with the terms and conditions of an
order issued by the SEC. The order exempts such transactions from provisions of
the 1940 Act that would otherwise prohibit such transactions, subject to certain
conditions. In accordance with the order, securities loans made by a Portfolios
to Neuberger Berman are fully secured by cash collateral. The portion of the
income on the cash collateral which may be shared with Neuberger Berman is to be
determined by reference to concurrent arrangements between Neuberger Berman and
non-affiliated lenders with which it engages in similar transactions. In
addition, where Neuberger Berman borrows securities from a Portfolio in order to
re-lend them to Other NB Funds, Neuberger Berman may be required to pay that
Portfolio, on a quarterly basis, certain of the earnings that Neuberger Berman
otherwise has derived from the re-lending of the borrowed securities. When
Neuberger Berman desires to borrow a security that a Portfolio has indicated a
willingness to lend, Neuberger Berman must borrow such security from that
Portfolio, rather than from a unaffiliated lender, unless the unaffiliated
lender is willing to lend such security on more favorable terms (as specified in
the order) than that Portfolio. If, in any month, a
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Portfolio's expense exceed its income in any securities loan transaction with
Neuberger Berman, Neuberger Berman must reimburse that Portfolio for such loss.
A committee of Independent Trustees from time to time reviews, among other
things, information relating to securities loans by the Portfolios.
In effecting securities transactions, each Portfolio 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. Each
Portfolio plans to continue to use Neuberger Berman as its broker where, in the
judgment of NB Management, that firm is able to obtain a price and execution at
least as favorable as other qualified brokers. To the Portfolio's knowledge,
however, no affiliate of any Portfolio receives give-ups or reciprocal business
in connection with their securities transactions.
The use of Neuberger Berman as a broker for a Portfolio 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 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 a Portfolio 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 each Portfolio's policy that the commissions to be paid to
Neuberger Berman must, in NB 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 Trustees not to be comparable to the
Portfolio. The Portfolio 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 Portfolio's
account, unless an appropriate exemption is available.
A committee of Independent Trustees from time to time reviews, among other
things, information relating to the commissions charged by Neuberger Berman to
the and to its other customers and information concerning the prevailing level
of commissions charged by other brokers having comparable execution capability.
In addition, the procedures pursuant to which Neuberger Berman effects brokerage
transactions for the Portfolios must be reviewed and approved no less often than
annually by a majority of the Independent Trustees.
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To ensure that accounts of all investment clients, including a Portfolio,
are treated fairly in the event that Neuberger Berman receives transaction
instructions regarding a security for more than one investment account at or
about the same time, Neuberger Berman may combine orders placed on behalf of
clients, including advisory accounts in which affiliated persons have an
investment interest, for the purpose of negotiating brokerage commissions or
obtaining a more favorable price. Where appropriate, securities purchased or
sold may be allocated, in terms of amount, to a client according to the
proportion that the size of the order placed by that account bears to the
aggregate size of orders contemporaneously placed by the other accounts, subject
to de minimis exceptions. All participating accounts will pay or receive the
same price.
Under policies adopted by the Board of Trustees, Neuberger Berman may
enter into agency cross-trades on behalf of a Portfolio. An agency cross-trade
is a securities transaction in which the same broker acts as agent on both sides
of the trade and the broker or an affiliate has discretion over one of the
participating accounts. In this situation, Neuberger Berman would receive
brokerage commissions from both participants in the trade. The other account
participating in an agency cross-trade with a Portfolio cannot be an account
over which Neuberger Berman exercises investment discretion. A member of the
Board of Trustees who is not affiliated with Neuberger Berman reviews
confirmations of each agency cross-trade that the Portfolios participate in.
Each Portfolio expects that it will continue to execute a portion of its
transactions through brokers other than Neuberger Berman. In selecting those
brokers, NB Management 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 NB Management and employees of
Neuberger Berman who are portfolio managers of some of the Portfolios and Other
NB Funds (collectively, "NB Funds") and some of Neuberger Berman's managed
accounts ("Managed Accounts") evaluates semi-annually the nature and quality of
the brokerage and research services provided by other brokers. Based on this
evaluation, the committee establishes a list and projected rankings of preferred
brokers for use in determining the relative amounts of commissions to be
allocated to those brokers. Ordinarily the brokers on the list effect a large
portion of the brokerage transactions for the NB Funds and the Managed Accounts
that are not effected by Neuberger Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from the
projected rankings. These variations reflect the following factors, among
others: (1) brokers not on the list or ranking below other brokers on the list
may be selected for particular transactions because they provide better price
and/or execution, which is the primary consideration in allocating brokerage;
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 NB Funds and/or the Managed Accounts; and (3) the aggregate amount
of brokerage commissions generated by transactions for the NB Funds and the
Managed Accounts may change substantially from one semi-annual period to the
next.
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The commissions paid to a broker other than Neuberger Berman may be higher
than the amount another firm might charge if NB Management determines in good
faith that the amount of those commissions is reasonable in relation to the
value of the brokerage and research services provided by the broker. NB
Management believes that those research services provide the Portfolios with
benefits by supplementing the information otherwise available to NB Management.
That research information may be used by NB 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 NB
Management from brokers effecting portfolio transactions on behalf of the Other
NB Funds and by Neuberger Berman from brokers executing portfolio transactions
on behalf of the Managed Accounts may be used for the Portfolio's benefit.
The following individuals are the persons primarily responsible for making
decisions as to specific action to be taken with respect to the investment
portfolios of the indicated Portfolios: Theodore P. Giuliano and Catherine
Waterworth - Balanced (debt securities portion), Limited Maturity Bond, and
Liquid Asset (with respect to Mr. Giuliani); Josephine Mahaney - Liquid Asset;
Kevin L. Risen and Allan R. White III - Guardian; Valerie Chang - International;
Jennifer K. Silver and Brooke A. Cobb - Growth; Balanced (equity securities
portion) and Mid-Cap Growth; Robert I. Gendelman and S. Basu Mullick - Partners;
and Janet W. Prindle - Socially Responsive. Each of these individuals is a Vice
President of NB Management and a Managing Director or officer of Neuberger
Berman. Each of them has full authority to take action with respect to portfolio
transactions and may or may not consult with other personnel of NB Management
prior to taking such action. If Ms. Prindle is unavailable to perform her
responsibilities, Robert Ladd and/or Ingrid Saukaitis, each of whom is a Vice
President of NB Management, will assume responsibility for the management of
Socially Responsive Portfolio. If Ms. Chang is unavailable to perform her
responsibilities, Benjamin E. Segal, a Vice President of NB Management, will
assume the responsibility for the management of International Portfolio.
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
Portfolio 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 Portfolio during
the year.
REPORTS TO SHAREHOLDERS
Shareholders of each Portfolio receive unaudited semi-annual financial
statements, as well as year-end financial statements audited by the independent
auditors for the Portfolio. Each Portfolio's report shows the investments owned
by it 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.
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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 1940 Act as a diversified, open-end management investment
company, commonly known as a mutual fund. The Trust has nine separate
Portfolios. The Trustees 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. As discussed above under "Investment
Information", through April 30, 2000, each Portfolio invested all of its net
investable assets in its corresponding master series of Advisers Managers Trust,
in each case receiving a beneficial interest in that series. Beginning May 1,
2000, each Portfolio invests directly in its own securities portfolio.
NB Management and Neuberger Berman serve as investment manager and
sub-advisor, respectively, to other mutual funds, and the investments for the
Portfolios (through their corresponding series) are managed by the same
portfolio managers who manage one or more other mutual funds, that have similar
names, investment objectives and investment styles as each Portfolio and are
offered directly to the public by means of separate prospectuses. These other
mutual funds are not part of the Trust. You should be aware that each Portfolio
is likely to differ from the other mutual funds in size, cash flow pattern, and
certain tax matters, and may differ in risk/return characteristics. Accordingly,
the portfolio holdings and performance of the Portfolios may vary from those of
the other mutual funds with similar names.
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 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
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and provides for indemnification out of Trust or Portfolio property of any
shareholder nevertheless held personally liable for Trust or Portfolio
obligations, respectively.
CUSTODIAN AND TRANSFER AGENT
Each Portfolio has 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 each Portfolio's Transfer Agent
and shareholder servicing agent, administering purchases and redemptions Trust
shares through its Boston Service Center.
INDEPENDENT AUDITORS
Each Portfolio has selected Ernst & Young LLP, 200 Clarendon Street,
Boston, Massachusetts 02116 as the independent auditors who will audit its
financial statements.
LEGAL COUNSEL
Each Portfolio has 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 Portfolios.
Statements contained in this SAI and Prospectus as to the contents of any
contract or other document referred to are not necessarily complete. 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.
FINANCIAL STATEMENTS
The audited financial statements, notes to the audited financial
statements, and reports of the independent auditors contained in the annual
reports to the shareholders of the Trust for the fiscal year ended December 31,
1999 for Neuberger Berman Advisers Management Trust (with respect to each of the
Balanced Portfolio, Mid-Cap Growth Portfolio, Guardian Portfolio, Growth
Portfolio, Limited Maturity Bond Portfolio, Liquid Asset Portfolio, Partners
Portfolio and Socially Responsive Portfolio), and for Advisers Managers Trust
(with respect to each of the AMT Balanced Investments,
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AMT Mid-Cap Growth Investments, AMT Guardian Investments, AMT Growth
Investments, AMT Mid-Cap Growth Investments, AMT Liquid Asset Investments, AMT
Partners Investments and AMT Socially Responsive Investments) are incorporated
into this Statement of Additional Information by reference to each Portfolio's
Annual Report to shareholders for the fiscal year ended December 31, 1999.
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APPENDIX A: RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER
S&P corporate bond ratings
AAA - Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
Plus (+) or Minus (-) - The ratings above may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.
Moody's corporate bond ratings
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or an exceptionally stable margin,
and principal is secure. Although the various protective elements are likely to
change, the changes that can be visualized are most unlikely to impair the
fundamentally strong position of the issuer.
Aa - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as "high
grade bonds." They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa-rated securities, fluctuation of
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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.
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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.
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APPENDIX B
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
TOTAL RETURN ANALYSIS USING CONSTANT
ASSET ALLOCATION S&P "500"/2 YR.
U.S. TREASURY NOTES
1960 - 1999
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
- ---------------------------------------------------------
100/0 (100% S&P "500")
Return 12.25% 100.0%
Volatility 15.6% 100.0%
70/30
Return 10.83% 88.40%
Volatility 11.2% 71.9%
60/40
Return 10.31% 84.15%
Volatility 9.8% 62.8%
50/50
Return 9.78% 79.83%
Volatility 8.4% 54.0%
0/100
Return 6.80% 55.52%
Volatility 4.1% 26.1%
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NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
POST-EFFECTIVE AMENDMENT NO. 32 ON FORM N-1A
PART C
OTHER INFORMATION
Item 23. Exhibits
Exhibit Number Description
- -------------- -----------
(a) (1) Trust Instrument of Registrant.(1)
(2) Amended and Restated Certificate of Trust of the
Registrant.(8)
(3) Amendment to Trust Instrument dated November 9, 1998.(8)
(4) Schedule A to Trust Instrument of Registrant
designating Series of Registrant.(7)
(b) (1) By-laws of Registrant.(1)
(2) Amendment to By-laws dated November 11, 1997.(5)
(3) Amendment to By-laws dated November 9, 1998.(8)
(c) (1) Trust Instrument of Registrant, Articles IV, V and VI.(1)
(2) By-laws of Registrant, Articles V, VI and VIII.(1)
(d) (1) Management Agreement Between Registrant and Neuberger
Berman Management Inc. (filed herewith)
(2) Sub-Advisory Agreement Between Neuberger Berman
Management Inc. and Neuberger Berman, LLC with Respect
to Registrant. (filed herewith)
(e) Distribution Agreement Between Registrant and Neuberger
Berman Management Inc., and Distribution Plan of
Registrant. (filed herewith)
(f) Bonus or Profit Sharing Contracts. None.
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Exhibit Number Description
- -------------- -----------
(g) (1) Custodian Contract Between Registrant and State Street
Bank and Trust Company.(2)
(2) Letter Agreement adding the International Portfolio of
Registrant to the Custodian Contract.(1)
(3) Schedule A to the Custodian Contract designating
approved foreign banking institutions and securities
depositories. (filed herewith)
(4) Custodian Fee Schedule.(3)
(5) Letter Agreement adding the Mid-Cap Growth and Guardian
Portfolios of Registrant to the Custodian Contract and
Transfer Agency Agreement.(4)
(6) Schedule designating Series of Registrant subject to
Custodian Contract.(7)
(7) Letter Agreement adding the Socially Responsive
Portfolio of Registrant to the Custodian Contract and
Transfer Agency Agreement.(7)
(h) (1) Transfer Agency Agreement Between Registrant and State
Street Bank and Trust Company.(2)
(2) Administration Agreement Between Registrant and
Neuberger Berman Management Inc. (filed herewith)
(3) Form of Fund Participation Agreement. (filed herewith)
(4) Letter Agreement adding the International Portfolio of
Registrant to the Transfer Agency Agreement.(1)
(5) Letter Agreement adding the Mid-Cap Growth and Guardian
Portfolios of Registrant to the Transfer Agency
Agreement.(4)
(6) Expense Limitation Agreement between Registrant, on
behalf of the Mid-Cap Growth and Guardian Portfolios,
and Neuberger Berman Management Inc. (filed herewith)
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Exhibit Number Description
- -------------- -----------
(7) Schedule designating series of Registrant subject to
the Transfer Agency Agreement.(7)
(8) Expense Limitation Agreement between Registrant, on
behalf of the Socially Responsive Portfolio, and
Neuberger Berman Management, Inc. (filed herewith)
(9) Letter Agreement adding the Socially Responsive
Portfolio of Registrant to the Transfer Agency
Agreement.(7)
(10) Expense Limitation Agreement between Registrant, on
behalf of the Liquid Asset, Balanced, Growth, Partners,
and Limited Maturity Bond Portfolios, and Neuberger
Berman Management Inc. (filed herewith)
(11) Expense Limitation Agreement between Registrant, on
behalf of the International Portfolio, and Neuberger
Berman Management, Inc. (filed herewith)
(i) (1) Legal Opinion.(9)
(2) Consent of Counsel. (filed herewith)
(j) (1) Consent of Independent Auditors. (filed herewith)
(2) Powers of Attorney.(10)
(k) Financial Statements Omitted from Prospectus. None.
(l) Initial Capital Agreements. None.
(m) Plan Pursuant to Rule 12b-1. (filed herewith; see
exhibit (e))
(n) Rule 18f-3 Plan. None
(p) Code of Ethics. (filed herewith)
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1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. Incorporated by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0000943663-98-000180.
7. Incorporated by reference to Post-Effective Amendment No. 28 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0000943663-98-000266.
8. Incorporated by reference to Post-Effective Amendment No. 29 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0000943663-99-000074.
9. Incorporated by reference to Post-Effective Amendment No. 30 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0000891554-99-000822.
10. Incorporated by reference to Post-Effective Amendment No. 31 to
Registrant's Registration Statement, File Nos. 2-88566 and 811-4255, EDGAR
Accession No. 0001005477-00-001512.
Item 24. Persons Controlled By or Under Common Control with Registrant
No person is controlled by or under common control with the Registrant
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Item 25. Indemnification:
A Delaware business trust may provide in its governing instrument for
indemnification of its officers and trustees from and against any and all claims
and demands whatsoever. Article IX, Section 2 of the Trust Instrument provides
that the Registrant shall indemnify any present or former trustee, officer,
employee or agent of the Registrant ("Covered Person") to the fullest extent
permitted by law against liability and all expenses reasonably incurred or paid
by him 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 ("NB Management") provides that neither
NB Management nor any director, officer or employee of NB Management performing
services for any Series of Advisers Managers Trust (each a "Portfolio") at the
direction or request of NB Management in connection with NB 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 NB Management against any liability
to Advisers Managers Trust or a Series of Advisers Managers Trust or its
interest holders to which NB
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Management would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of NB Management's duties, or by
reason of NB Management's reckless disregard of its obligations and duties under
the Agreement, or (ii) to protect any director, officer or employee of NB
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 NB
Management provides that NB Management will not be liable to the Registrant for
any action taken or omitted to be taken by NB 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. NB
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 NB Management believes to be genuine and to have been signed
by the proper person or persons, and NB 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 NB Management and hold it harmless from and against
any and all losses, damages and expenses, including reasonable attorneys' fees
and expenses, incurred by NB Management that result from: (i) any claim, action,
suit or proceeding in connection with NB Management's entry into or performance
of the Agreement with respect to such Portfolio; or (ii) any action taken or
omission to act committed by NB Management in the performance of its obligations
under the Agreement with respect to such Portfolio; or (iii) any action of NB
Management upon instructions believed in good faith by it to have been executed
by a duly authorized officer or representative of the Trust with respect to such
Portfolio; provided, that NB Management will not be entitled to such
indemnification in respect of actions or omissions constituting negligence or
misconduct on the part of NB Management, or its employees, agents or
contractors. Amounts payable by the Registrant under this provision shall be
payable solely out of assets belonging to that Portfolio, and not from assets
belonging to any other Portfolio of the Registrant. Section 13 of the
Administration Agreement provides that NB Management will indemnify each
Portfolio of the Registrant and hold it harmless from and against any and all
-6-
<PAGE>
losses, damages and expenses, including reasonable attorneys' fees and expenses,
incurred by such Portfolio of the Registrant that result from: (i) NB
Management's failure to comply with the terms of the Agreement; or (ii) NB
Management's lack of good faith in performing its obligations under the
Agreement; or (iii) the negligence or misconduct of NB Management, or its
employees, agents or contractors in connection with the Agreement. 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 NB Management,
unless such negligence or misconduct results from or is accompanied by
negligence or misconduct on the part of NB Management, any affiliated person of
NB Management, or any affiliated person of an affiliated person of NB
Management.
Section 11 of the Distribution Agreement between the Registrant and NB
Management provides that NB 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 26. Business and Other Connections of Adviser and Sub-Adviser
There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each director or officer
of NB Management and each principal 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.
NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------
-7-
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------
Philip Ambrosio Senior Vice President and Chief Financial
Senior Vice President and Officer, Neuberger Berman Inc.
Chief Financial Officer,
NB Management
Thomas J. Brophy Vice President and Portfolio Manager,
Vice President, NB Management Columbus Circle Investors.*
Barbara DiGiorgio Assistant Treasurer, Neuberger Berman Advisers
Assistant Vice President, Management Trust; Assistant Treasurer, Advisers
NB Management 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; Assistant Treasurer,
Neuberger Berman Equity Series.
Robert S. Franklin Vice President, High Yield Fixed Income
Vice President, NB Management Analyst, Prudential Insurance Company.*
Theodore P. Giuliano President and Trustee, Neuberger Berman Income
Vice President, Funds; President and Trustee, Neuberger Berman
NB Management; Managing Income Trust; President and Trustee, Income
Director, Neuberger Berman Managers Trust.
Kevin Handwerker Senior Vice President, Secretary and General
Senior Vice President, Counsel, Neuberger Berman, Inc.
General Counsel and
Secretary, Neuberger Berman
Michael M. Kassen Executive Vice President, Chief Investment
Chairman, Executive Vice Officer and Director, Neuberger Berman, Inc.
President and Chief Executive
Officer, NB Management
Kelly M. Landron Assistant Portfolio Manager/Analyst, Neuberger
Vice President, NB Management Berman.*
Jeffrey B. Lane President, Chief Executive Officer and
President and Chief Executive Director of Neuberger Berman, Inc.
Officer, Neuberger Berman
Michael F. Malouf Portfolio Manager, Dresdner RCM Global
Vice President, NB Management Investors.*
Robert Matza Executive Vice President, Chief Administrative
Executive Vice President and Officer and Director, Neuberger Berman, Inc.
Chief Administrative Officer,
Neuberger Berman; Director,
NB Management
S. Basu Mullick Portfolio Manager, Ark Asset Management.*
Vice President, NB Management
-8-
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------
Richard Russell Treasurer, Neuberger Berman Advisers Management
Vice President, NB Management 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; Treasurer, Neuberger
Berman Equity Series.
Heidi L. Schneider Executive Vice President and Director,
Executive Vice President, Neuberger Berman, Inc.
Neuberger Berman
Benjamin E. Segal Assistant Portfolio Manager, GT Global
Vice President, NB Investment Management.*
Management, Managing
Director, Neuberger Berman
Daniel J. Sullivan Vice President, Neuberger Berman Advisers
Senior Vice President, Management Trust; Vice President, Advisers
NB Management 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;
Vice President, Neuberger Berman Equity Series.
Peter E. Sundman Executive Vice President and Director,
President, NB Management; Neuberger Berman Inc.; President and Chief
Executive Vice President, Executive Officer, Income Managers Trust;
Neuberger Berman President and Chief Executive Officer,
Neuberger Berman Income Funds; President and
Chief Executive Officer, Neuberger Berman
Income Trust.
Catherine Waterworth Managing Director, TCW Group, Inc.*
Vice President, NB Management
Michael J. Weiner Vice President, Neuberger Berman
Senior Vice President, Advisers Management Trust; Vice President,
NB Management; Senior Vice Advisers Managers Trust; Vice President,
President, Neuberger Berman 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; Vice President, Neuberger Berman
Equity Series.
-9-
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------
Allan R. White, III Portfolio Manager, Salomon Asset Management.*
Vice President, NB
Management; Managing
Director, Neuberger Berman
Celeste Wischerth Assistant Treasurer, Neuberger Berman Advisers
NB Management Management 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; Assistant Treasurer,
Neuberger Berman Equity Series.
- ----------
* Until 1998.
Item 27. Principal Underwriters
(a) Neuberger Berman Management Inc., 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 Equity Series
Neuberger Berman Income Funds
Neuberger Berman Income Trust
NB Management 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.
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
---- ---------------- ---------------
-10-
<PAGE>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
---- ---------------- ---------------
Ramesh Babu Vice President None
Richard A. Cantor Chairman of the Board None
Valerie Chang Vice President None
Brooke A. Cobb Vice President None
Robert Conti Treasurer None
Robert W. D'Alelio Vice President None
Clara Del Villar Vice President None
Robert S. Franklin Vice President None
Robert I. Gendelman Vice President None
Theodore P. Giuliano Vice President and None
Director
Michael M. Kassen Vice President and
Director None
Robert L. Ladd Vice President None
Josephine Mahaney Vice President None
Michael F. Malouf Vice President None
Robert Matza Director None
Ellen Metzger Secretary None
S. Basu Mullick Vice President None
Janet W. Prindle Vice President None
Kevin L. Risen Vice President None
Ingrid Saukaitis Vice President None
Benjamin Segal Vice President None
Jennifer K. Silver Vice President None
Kent C. Simons Vice President None
Daniel J. Sullivan Senior Vice President Vice President
President and Principal
Peter E. Sundman President Executive Officer
Judith M. Vale Vice President None
Josephine Velez Vice President None
Catherine Waterworth Vice President None
Michael J. Weiner Senior Vice President Vice President and
Principal Financial
Officer
Allan R. White, III Vice President None
-11-
<PAGE>
(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 28. 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.
Item 29. 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 30. Undertakings
None.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 32 to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 32 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 25th
day of April, 2000.
NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
By: /s/ Peter Sundman
-------------------------------------
Peter Sundman
President and
Principal Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 32 to the Registration Statement of Neuberger
Berman Advisers Management Trust has been signed below by the following trustees
and officers of the Registrant in the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
* Chairman and Trustee April 25, 2000
- ----------------------------
Lawrence Zicklin
/s/ Peter Sundman President April 25, 2000
- ---------------------------- (Principal Executive Officer)
Peter Sundman
* Vice President April 25, 2000
- ---------------------------- (Principal Financial Officer)
Michael J. Weiner
* Treasurer April 25, 2000
- ---------------------------- (Principal Accounting Officer)
Richard Russell
* Trustee April 25, 2000
- ----------------------------
Faith Colish
* Trustee April 25, 2000
- ----------------------------
Walter G. Ehlers
* Trustee April 25, 2000
- ----------------------------
C. Anne Harvey
* Trustee April 25, 2000
- ----------------------------
Howard A. Mileaf
* Trustee April 25, 2000
- ----------------------------
Ruth E. Salzmann
* Trustee April 25, 2000
- ----------------------------
Candace L. Straight
* Trustee April 25, 2000
- ----------------------------
Peter P. Trapp
*By: /s/ Peter Sundman
------------------------
Peter Sundman
As Attorney-In-Fact
Pursuant to Powers of Attorney
previously filed
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, ADVISERS MANAGERS TRUST certifies that this
Post-Effective Amendment No. 32 to the Registration Statement of Neuberger
Berman Advisers Management Trust meets all of the requirements for effectiveness
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment No. 32 to the Registration Statement of Neuberger
Berman Advisers Management Trust 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 25th day of April, 2000.
ADVISERS MANAGERS TRUST
By: /s/ Peter Sundman
-------------------------------------
Peter Sundman
President
Principal Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 32 to the Registration Statement of Neuberger
Berman Advisers Management Trust has been signed below by the following trustees
and officers of ADVISERS MANAGERS TRUST in the capacities and on the date
indicated.
Signature Title Date
* Chairman and Trustee April 25, 2000
- ----------------------------
Lawrence Zicklin
/s/ Peter Sundman President April 25, 2000
- --------------------------- (Principal Executive Officer)
Peter Sundman
* Vice President April 25, 2000
- ---------------------------- (Principal Financial Officer)
Michael J. Weiner
* Treasurer April 25, 2000
- ---------------------------- (Principal Accounting Officer)
Richard Russell
* Trustee April 25, 2000
- ---------------------------
Faith Colish
* Trustee April 25, 2000
- ---------------------------
Walter G. Ehlers
* Trustee April 25, 2000
- ---------------------------
C. Anne Harvey
* Trustee April 25, 2000
- ---------------------------
Howard A. Mileaf
* Trustee April 25, 2000
- ---------------------------
Ruth E. Salzmann
* Trustee April 25, 2000
- ---------------------------
Candace L. Straight
* Trustee April 25, 2000
- ---------------------------
Peter P. Trapp
*By: /s/ Peter Sundman
-----------------------
Peter Sundman
As Attorney-In-Fact
Pursuant to Powers of Attorney previously filed
<PAGE>
INDEX TO EXHIBITS
(for Post-Effective Amendment No. 32)
Exhibit Number Under
Part C of Form N-1A Name of Exhibit
(d)(1) Management Agreement
(d)(2) Sub-Advisory Agreement
(e) Distribution Agreement and Distribution Plan
(g)(3) Schedule A to Custodian Contract
(h)(2) Administration Agreement
(h)(3) Form of Fund Participation Agreement
(h)(6) Expense Limitation Agreement (with respect to the
Mid-Cap Growth and Guardian Portfolios)
(h)(8) Expense Limitation Agreement (with respect to the
Socially Responsive Portfolio)
(h)(10) Expense Limitation Agreement (with respect to the
Liquid Asset Balanced, Growth, Partners and Limited
s Maturity Bond Portfolios)
(h)(11) Expense Limitation Agreement (with respect to the
International Portfolio)
(i)(2) Consent of Counsel
(j)(1) Consent of Independent Auditors
(p) Code of Ethics
Exhibit (d)(1)
MANAGEMENT AGREEMENT
This Agreement is made as of May 1, 2000, between Neuberger Berman Advisers
Management Trust, a Delaware business trust ("Trust"), and Neuberger Berman
Management Inc., a New York corporation ("Manager").
W I T N E S S E T H :
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end, diversified management investment company
and has established several separate series of shares ("Portfolios"), with each
Portfolio having its own assets and investment policies; and
WHEREAS, the Trust desires to retain the Manager as investment adviser to
furnish investment advisory and portfolio management services to each Portfolio
listed in Schedule A attached hereto, to such other Portfolios of the Trust
hereinafter established as agreed to from time to time by the parties, evidenced
by an addendum to Schedule A (hereinafter "Portfolio" shall refer to each
Portfolio which is subject to this Agreement and all agreements and actions
described herein to be made or taken by the Trust on behalf of the Portfolios),
and the Manager is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Services of the Manager.
1.1 Investment Management Services. The Manager shall act as the investment
adviser to the Portfolios and, as such, shall (i) obtain and evaluate such
information relating to the economy, industries, businesses, securities markets
and securities as it may deem necessary or useful in discharging its
responsibilities hereunder, (ii) formulate a continuing program for the
investment of the assets of the Portfolios in a manner consistent with its
investment objective, policies and restrictions, and (iii) determine from time
to time securities to be purchased, sold, retained or lent by the Portfolios,
and implement those decisions, including the selection of entities with or
through which such purchases, sales or loans are to be effected; provided, that
the Manager will place orders pursuant to its investment determinations either
directly with the issuer or with a broker or dealer, and if with a broker or
dealer, (a) will attempt to obtain the best net price and most favorable
execution of its orders, and (b) may nevertheless in its discretion purchase and
sell portfolio securities from and to brokers and dealers who provide the
Manager with research, analysis, advice and similar services and pay such
brokers and dealers in return a higher commission or spread than may be charged
by other brokers or dealers.
The Trust hereby authorizes any entity or person associated with the Manager
which is a member of a national securities exchange to effect any transaction on
the exchange for the account of the Portfolios which is permitted by Section
11(a) of the Securities Exchange Act of 1934 and
<PAGE>
Rule 11a2-2(T) thereunder, and the Trust hereby consents to the retention of
compensation for such transactions in accordance with the law.
The Manager shall carry out its duties with respect to the Portfolios'
investments in accordance with applicable law and the investment objective,
policies and restrictions of the Portfolios adopted by the trustees of the Trust
("Trustees"), and subject to such further limitations as the Portfolios may from
time to time impose by written notice to the Manager.
1.2 Administrative Services. The Manager shall supervise the Portfolios'
business and affairs and shall provide such services required for effective
administration of the Portfolios as are not provided by employees or other
agents engaged by the Portfolios; provided, that the Manager shall not have any
obligation to provide under this Agreement any direct or indirect services to
the holders of shares of the Portfolios ("Shareholders"), any services related
to the sale of interests in the Portfolios, or any other services which are the
subject of a separate agreement or arrangement between the Portfolios and the
Manager. Subject to the foregoing, in providing administrative services
hereunder, the Manager shall:
1.2.1 Office Space, Equipment and Facilities. Furnish without cost to the
Portfolios, or pay the cost of, such office space, office equipment and
office facilities as are adequate for the Portfolios' needs.
1.2.2 Personnel. Provide, without remuneration from or other cost to the
Trust or the Portfolios, the services of individuals competent to perform
all of the Portfolios' executive, administrative and clerical functions
which are not performed by employees or other agents engaged by the
Portfolios or by the Manager acting in some other capacity pursuant to a
separate agreement or arrangement with the Portfolios.
1.2.3 Agents. Assist the Portfolios in selecting and coordinating the
activities of the other agents engaged by the Portfolios, including the
Portfolios' custodian, independent auditors and legal counsel.
1.2.4 Trustees and Officers. Authorize and permit the Manager's directors,
officers and employees who may be elected or appointed as trustees or
officers of the Trust to serve in such capacities, without remuneration
from or other cost to the Trust or the Portfolios.
1.2.5 Books and Records. Ensure that all financial, accounting and other
records required to be maintained and preserved by the Trust and/or the
Portfolios are maintained and preserved by it or on its behalf in
accordance with applicable laws and regulations.
1.2.6 Reports and Filings. Assist in the preparation of (but not pay for)
all periodic reports by the Trust or the Portfolios to Shareholders and
all reports and filings required to maintain the registration and
qualification of the Portfolios, or to meet other regulatory or tax
requirements applicable to the Portfolios, under federal and state
securities and tax laws.
1.3 The Manager can use any of the officers and employees of Neuberger
Berman,
-2-
<PAGE>
LLC to provide any of the non-investment advisory services described
herein.
2. Expenses of the Portfolios.
2.1 Expenses to Be Paid by the Manager. The Manager shall pay all salaries,
expenses and fees of the officers, trustees and employees of the Trust who are
officers, directors or employees of the Manager.
In the event that the Manager pays or assumes any expenses of the Trust or a
Portfolio not required to be paid or assumed by the Manager under this
Agreement, the Manager shall not be obligated hereby to pay or assume the same
or any similar expense in the future; provided, that nothing herein contained
shall be deemed to relieve the Manager of any obligation to the Trust or to a
Portfolio under any separate agreement or arrangement between the parties.
2.2 Expenses to Be Paid by the Portfolios. Each Portfolio shall bear all
expenses of its operation, except those specifically allocated to the Manager
under this Agreement or under any separate agreement between a Portfolio and the
Manager. Expenses to be borne by a Portfolio shall include both expenses
directly attributable to the operation of the Portfolios and the placement of
interests therein, as well as the portion of any expenses of the Trust that is
properly allocable to the Portfolios in a manner approved by the trustees of the
Trust. Subject to any separate agreement or arrangement between the Trust or a
Portfolio and the Manager, the expenses hereby allocated to each Portfolio, and
not to the Manager, include, but are not limited to:
2.2.1 Custody. All charges of depositories, custodians, and other agents
for the transfer, receipt, safekeeping, and servicing of its cash,
securities, and other property.
2.2.2 Shareholder Servicing. All expenses of maintaining and servicing
Shareholder accounts, including, but not limited to the charges of any
Shareholder servicing agent, dividend disbursing agent or other agent
engaged by a Portfolio to service Shareholder accounts.
2.2.3 Shareholder Reports. All expenses of preparing, setting in type,
printing and distributing reports and other communications to
Shareholders.
2.2.4 Pricing and Portfolio Valuation. All expenses of computing a
Portfolio's net asset value per share, including any equipment or services
obtained for the purpose of pricing shares or valuing the Portfolio's
investment portfolio.
2.2.5 Communications. All charges for equipment or services used for
communications between the Manager or the Portfolios and any custodian,
Shareholder servicing agent, portfolio accounting services agent, or other
agent engaged by a Portfolio.
2.2.6 Legal and Accounting Fees. All charges for services and expenses of
a Portfolio's legal counsel and independent auditors.
2.2.7 Trustees' Fees and Expenses. With respect to each Portfolio, all
compensation of
-3-
<PAGE>
Trustees other than those affiliated with the Manager, all expenses
incurred in connection with such unaffiliated Trustees' services as
Trustees, and all other expenses of meetings of the Trustees or committees
thereof..
2.2.8 Shareholder Meetings. All expenses incidental to holding meetings of
Shareholders, including the printing of notices and proxy materials, and
proxy solicitation therefor.
2.2.9 Bonding and Insurance. All expenses of bond, liability, and other
insurance coverage required by law or regulation or deemed advisable by
the Trustees, including, without limitation, such bond, liability and
other insurance expense that may from time to time be allocated to the
Portfolios in a manner approved by the Trustees.
2.2.10 Brokerage Commissions. All brokers' commissions and other charges
incident to the purchase, sale or lending of a Portfolio's portfolio
securities.
2.2.11 Taxes. All taxes or governmental fees payable by or with respect to
a Portfolio to federal, state or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes.
2.2.12 Trade Association Fees. All fees, dues and other expenses incurred
in connection with a Portfolio's membership in any trade association or
other investment organization.
2.2.13 Nonrecurring and Extraordinary Expenses. Such nonrecurring and
extraordinary expenses as may arise, including the costs of actions,
suits, or proceedings to which the Portfolio is a party and the expenses a
Portfolio may incur as a result of its legal obligation to provide
indemnification to the Trust's officers, Trustees and agents.
2.2.14 Organizational Expenses. Any and all organizational expenses of a
Portfolio paid by the Manager shall be reimbursed by such Portfolio at
such time or times agreed by such Portfolio and the Manager.
3. Advisory Fee.
3.1 Fee. As compensation for all services rendered, facilities provided and
expenses paid or assumed by the Manager under this Agreement, each Portfolio
shall pay the Manager an annual fee as set out in Schedule B to this Agreement.
3.2 Computation and Payment of Fee. The advisory fee shall accrue on each
calendar day, and shall be payable monthly on the first business day of the next
succeeding calendar month. The daily fee accruals shall be computed by
multiplying the fraction of one divided by the number of days in the calendar
year by the applicable annual advisory fee rate (as set forth in Schedule B
hereto), and multiplying this product by the net assets of the Portfolios,
determined in the manner established by the Trustees, as of the close of
business on the last preceding business day on which the Portfolios' net asset
value was determined.
3.3 State Expense Limitation. If in any fiscal year the operating expenses of
any Shareholder in a
-4-
<PAGE>
Portfolio plus such Shareholder's pro rata portion of the Portfolio's operating
expenses in such fiscal year ("Aggregate Operating Expenses," which includes any
fees or expense reimbursements payable to the Manager pursuant to this Agreement
and any compensation payable to the Manager pursuant to (i) the Administration
Agreement between such Shareholder and the Manager or (ii) any other Agreement
or arrangement with the Trust with respect to that Shareholder, but excludes
interest, taxes, brokerage commissions, litigation and indemnification expenses,
and other extraordinary expenses not incurred in the ordinary course of
business) exceed the lowest applicable percentage expense limitation imposed
under the securities law and regulations of any state in which such
Shareholder's shares are qualified for sale (the "State Expense Limitation"),
then the Manager shall pay such Shareholder the amount of such excess, less the
amount of any reduction of the administration fee referred to below; provided,
that the Manager shall have no obligation hereunder to pay such Shareholder for
any such expenses which exceed the pro rata portion of such advisory fee
attributable to such Shareholder's interest in that Portfolio.
No payment shall be made to such Shareholder hereunder unless and until the
administration fee payable by such Shareholder under a similar State Expense
Limitation of its Administration Agreement with the Manager has been reduced to
zero. Any payment to a Shareholder hereunder shall be made monthly, by
annualizing the Aggregate Operating Expenses for each month as of the last day
of such month. An adjustment shall be made on or before the last day of the
first month of the next succeeding fiscal year if Aggregate Operating Expenses
for such fiscal year do not exceed the State Expense Limitation or if for such
fiscal year there is no applicable State Expense Limitation.
4. Ownership of Records.
All records required to be maintained and preserved by the Portfolios pursuant
to the provisions or rules or regulations of the Securities and Exchange
Commission ("SEC") under Section 31(a) of the 1940 Act and maintained and
preserved by the Manager on behalf of the Portfolios are the property of the
Portfolios and shall be surrendered by the Manager promptly on request by the
Portfolios; provided, that the Manager may at its own expense make and retain
copies of any such records.
5. Reports to Manager.
The Portfolios shall furnish or otherwise make available to the Manager such
copies of the Portfolios' financial statements, proxy statements, reports, and
other information relating to its business and affairs as the Manager may, at
any time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
6. Reports to the Portfolios.
The Manager shall prepare and furnish to the Portfolios such reports,
statistical data and other information in such form and at such intervals as the
Portfolios may reasonably request.
7. Retention of Sub-Adviser.
-5-
<PAGE>
Subject to a Portfolio obtaining the initial and periodic approvals required
under section 15 of the 1940 Act, the Manager may retain a sub-adviser, at the
Manager's own cost and expense, for the purpose of making investment
recommendations and research information available to the Manager. Retention of
a sub-adviser shall in no way reduce the responsibilities or obligations of the
Manager under this Agreement and the Manager shall be responsible to the Trust
and the Portfolios for all acts or omissions of the sub-adviser in connection
with the performance of the Manager's duties hereunder.
8. Services to Other Clients.
Nothing herein contained shall limit the freedom of the Manager or any
affiliated person of the Manager to render investment management and
administrative services to other investment companies, to act as investment
adviser or investment counselor to other persons, firms or corporations, or to
engage in other business activities.
9. Limitation of Liability of Manager and its Personnel.
Neither the Manager nor any director, officer or employee of the Manager
performing services for the Portfolios at the direction or request of the
Manager in connection with the Manager's discharge of its obligations hereunder
shall be liable for any error of judgment or mistake of law or for any loss
suffered by a Portfolio in connection with any matter to which this Agreement
relates; provided, that nothing herein contained shall be construed (i) to
protect the Manager against any liability to the Trust or a Portfolio or its
Shareholders to which the Manager would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Manager's duties, or by reason of the Manager's reckless disregard of its
obligations and duties under this Agreement, or (ii) to protect any director,
officer or employee of the Manager who is or was a Trustee or officer of the
Trust against any liability to the Trust or a Portfolio or its Shareholders 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 the Trust.
10. No Liability of other Portfolios.
This Agreement is made by each Portfolio pursuant to authority granted by the
Trustees, and the obligations created hereby are not binding on any of the
Trustees or Shareholders of the Portfolios individually, but bind only the
property of that Portfolio and no other.
11. Effect of Agreement.
Nothing herein contained shall be deemed to require the Portfolios to take any
action contrary to the Declaration of the Trust or By-Laws of the Trust, any
actions of the Trustees binding upon the Portfolios, or any applicable law,
regulation or order to which a Portfolio is subject or by which it is bound, or
to relieve or deprive the Trustees of their responsibility for and control of
the conduct of the business and affairs of the Portfolios or the Trust.
12. Term of Agreement.
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<PAGE>
The term of this Agreement with respect to the Portfolios originally listed in
Schedule A shall begin on May 1, 2000 and, unless sooner terminated as
hereinafter provided, this Agreement shall remain in effect with respect to each
Portfolio through May 1, 2001 and from year to year thereafter, subject to the
termination provisions and all other terms and conditions hereof; provided, such
continuance with respect to a Portfolio is approved at least annually by vote of
a majority of the outstanding voting securities of such Portfolio, or by vote or
written consent of the Trustees, a majority of the Trustees who are not
interested persons of either party hereto ("Disinterested Trustees"); and
provided further, that the Manager shall not have notified a Portfolio in
writing at least sixty days prior to the first expiration date hereof or at
least sixty days prior to any expiration date in any year thereafter that it
does not desire such continuation. The Manager shall furnish any Portfolio,
promptly upon its request, such information as may reasonably be necessary to
evaluate the terms of this Agreement or any extension, renewal or amendment
thereof.
Schedule A to this Agreement may be modified from time to time to reflect the
addition or deletion of a Portfolio from the terms of this Agreement. With
respect to each Portfolio added by execution of an amendment to Schedule A, the
term of this Agreement shall begin on the date of such execution and, unless
sooner terminated as provided above, this Agreement shall remain in effect to
the date two years after such execution and from year to year thereafter only so
long as its continuance is approved in the manner required by the 1940 Act, as
from time to time amended.
13. Amendment or Assignment of Agreement.
Any amendment to this Agreement shall be in writing signed by the parties
hereto; provided, that no such amendment shall be effective unless authorized on
behalf of any Portfolio (i) by resolution of the Trustees, including the vote or
written consent of a majority of the Trustees who are not parties to this
Agreement or interested persons of either party hereto, and (ii) by vote of a
majority of the outstanding voting securities of the Portfolio. This Agreement
shall terminate automatically and immediately in the event of its assignment.
14. Termination of Agreement.
This Agreement may be terminated at any time by either party hereto, without the
payment of any penalty, upon sixty (60) days' prior written notice to the other
party; provided, that in the case of termination by any Portfolio, such action
shall have been authorized (i) by resolution of the Trustees, including the vote
or written consent of a majority of Trustees who are not parties to this
Agreement or interested persons of either party hereto, or (ii) by vote of a
majority of the outstanding voting securities of the Portfolio.
15. Name of the Portfolios.
Each Portfolio hereby agrees that if the Manager shall at any time for any
reason cease to serve as investment adviser to a Portfolio, the Portfolio shall,
if and when requested by the Manager,
-7-
<PAGE>
eliminate from the Portfolio's name the name "Neuberger Berman" and thereafter
refrain from using the name "Neuberger Berman" or the initials "N B" in
connection with its business or activities, and the foregoing agreement of a
Portfolio shall survive any termination of this Agreement and any extension or
renewal thereof.
16. Interpretation and Definition of Terms.
Any question of interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretation thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC validly issued pursuant to the 1940 Act. Specifically, the terms
"vote of a majority of the outstanding voting securities," "interested persons,"
"assignment" and "affiliated person," as used in this Agreement shall have the
meanings assigned to them by section 2(a) of the 1940 Act. In addition, when the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is modified, interpreted or relaxed by a rule, regulation or order of
the SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
17. Choice of Law.
This Agreement is made and to be principally performed in the State of New York,
and except insofar as the 1940 Act 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.
18. Captions.
The captions in this Agreement are included for convenience of reference only
and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
19. Execution in Counterparts.
This Agreement may be executed simultaneously in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
seals to be hereunto affixed, as of the day and year first above written.
NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST
-8-
<PAGE>
---------------------------------------
By:
Title:
NEUBERGER BERMAN
MANAGEMENT INC.
---------------------------------------
By:
Title:
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<PAGE>
NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
MANAGEMENT AGREEMENT
SCHEDULE A
Portfolios Date Added to Agreement
- ---------- -----------------------
Growth Portfolio May 1, 2000
Partners Portfolio May 1, 2000
Balanced Portfolio May 1, 2000
Limited Maturity Bond Portfolio May 1, 2000
Liquid Asset Portfolio May 1, 2000
International Portfolio May 1, 2000
Guardian Portfolio May 1, 2000
Mid-Cap Growth Portfolio May 1, 2000
Socially Responsive Portfolio May 1, 2000
<PAGE>
NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
MANAGEMENT AGREEMENT
SCHEDULE B
Compensation pursuant to Paragraph 3 of the Neuberger Berman Advisers
Management Trust Management Agreement shall be calculated in accordance with the
following schedules:
Growth Portfolio
Partners Portfolio
Balanced Portfolio
Guardian Portfolio
Mid-Cap Growth Portfolio
Socially Responsive Portfolio
0.55% on the first $250 million of average daily net assets
0.525% on the next $250 million of average daily net assets
0.50% on the next $250 million of average daily net assets
0.475% on the next $250 million of average daily net assets
0.450% on the next $500 million of average daily net assets
0.425% on average daily net assets in excess of $1.5 billion
Liquid Asset Portfolio
Limited Maturity Bond Portfolio
0.25% on the first $500 million of average daily net assets
0.225% on the next $500 million of average daily net assets
0.20% on the next $500 million of average daily net assets
0.175% on the next $500 million of average daily net assets
0.15% on average daily net assets in excess of $2 billion
International Portfolio
0.85% on the first $250 million of average daily net assets
0.825% on the next $250 million of average daily net assets
0.80% on the next $250 million of average daily net assets
0.775% on the next $250 million of average daily net assets
0.75% on the next $500 million of average daily net assets
0.725% on average daily net assets in excess of $1.5 billion
Dated: May 1, 2000
Exhibit (d)(2)
SUB-ADVISORY AGREEMENT
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue
New York, New York 10158
May 1, 2000
Neuberger & Berman, LLC
605 Third Avenue
New York, New York 10158
Ladies and Gentlemen:
We have entered into a Management Agreement with Neuberger Berman Advisers
Management Trust ("Trust"), with respect several of its series ("Portfolios"),
as set forth in Schedule A hereto, pursuant to which we are to act as investment
adviser to such Portfolios. We hereby agree with you as follows:
1. You agree for the duration of this Agreement to furnish us with such
investment recommendations and research information, of the same type as that
which you from time to time provide to your principals and employees for use in
managing client accounts, all as we shall reasonably request. In the absence of
willful misfeasance, bad faith or gross negligence in the performance of your
duties, or of reckless disregard of your duties and obligations hereunder, you
shall not be subject to liability for any act or omission or any loss suffered
by any Portfolio or its security holders in connection with the matters to which
this Agreement relates.
2. In consideration of your agreements set forth in paragraph 1 above, we agree
to pay you on the basis of direct and indirect costs to you of performing such
agreements. Indirect costs shall be allocated on a basis mutually satisfactory
to you and us.
3. As used in this Agreement, the terms "assignment" and "vote of a majority of
the outstanding voting securities" shall have the meanings given to them by
sections 2(a)(4) and 2(a)(42), respectively, of the Investment Company Act of
1940, as amended ("1940 Act").
This Agreement shall terminate automatically in the event of its assignment, or
upon termination of the Management Agreement between the Trust and the
undersigned.
This Agreement may be terminated at any time, without the payment of any
penalty, (a) with respect to any Portfolio by the trustees of the Trust or by
vote of a majority of the outstanding voting securities of such Portfolio or by
the undersigned on not less than thirty nor more than
<PAGE>
sixty days' written notice addressed to you at your principal place of business;
and (b) by you, without the payment of any penalty, on not less than thirty nor
more than sixty days' written notice addressed to the Trust and the undersigned
at The Trust's principal place of business.
This Agreement shall remain in full force and effect with respect to each
Portfolio listed in Schedule A on the date hereof through May 1, 2001, unless
sooner terminated as provided above, and from year to year thereafter only so
long as its continuance is approved in the manner required by the 1940 Act, as
from time to time amended.
Schedule A to this Agreement may be modified from time to time to reflect the
addition or deletion of a Portfolio from the terms of this Agreement. With
respect to each Portfolio added by execution of an amendment to Schedule A, the
term of this Agreement shall begin on the date of such execution and, unless
sooner terminated as provided above, this Agreement shall remain in effect to
the date two years after such execution and from year to year thereafter only so
long as its continuance is approved in the manner required by the 1940 Act, as
from time to time amended.
If you are in agreement with the foregoing, please sign the form of acceptance
on the enclosed counterpart hereof and return the same to us.
Very truly yours,
NEUBERGER BERMAN
MANAGEMENT INC.
By:________________________________
Name:
Title:
The foregoing agreement is hereby accepted as of the date first above written.
NEUBERGER BERMAN, LLC
By:____________________________
Name:
Title:
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<PAGE>
NEUBERGER BERMAN MANAGEMENT INC.
SUB-ADVISORY AGREEMENT
SCHEDULE A
The Portfolios of Neuberger Berman Advisers Management Trust currently
subject to this Agreement are as follows:
Liquid Asset Portfolio
Limited Maturity Bond Portfolio
Balanced Portfolio
Partners Portfolio
Growth Portfolio
Mid-Cap Growth Portfolio
Guardian Portfolio
International Portfolio
Socially Responsive Portfolio
DATED: May 1, 2000
-3-
Exhibit (e)
DISTRIBUTION AGREEMENT
This Agreement is made as of May 1, 1995, between Neuberger Berman
Advisers Management Trust, a Delaware business trust ("Trust"), and Neuberger
Berman Management Inc., a New York corporation (the "Distributor"), as amended
and restated on January 1, 1999.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end, diversified management investment
company and has established several separate series of shares ("Portfolios"),
with each Portfolio having its own assets and investment policies;
WHEREAS, the Portfolios propose to issue and sell their shares of
beneficial interest (the "Shares") to separate accounts of life insurance
companies ("Life Companies") and to qualified pension and retirement plans
("Qualified Plans"); and
WHEREAS, the Trust desires to retain the Distributor to furnish
distribution services to each Portfolio listed in Schedule A attached hereto,
and to such other Portfolios of the Trust hereinafter established as agreed to
from time to time by the parties, evidenced by an addendum to Schedule A
(hereinafter "Portfolio" shall refer to each Portfolio which is subject to this
Agreement and all agreements and actions described herein to be made or taken by
a Portfolio shall be made or taken by the Trust on behalf of the Portfolio), and
the Distributor is willing to furnish such services,
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. The Trust hereby appoints the Distributor as agent to sell the Shares
to separate accounts of Life Companies and to the Qualified Plans as may be
permitted by law, and the Distributor hereby accepts such appointment. All sales
by the Distributor shall be expressly subject to acceptance by the Trust, acting
on behalf of the Portfolio.
2. (a) The Distributor agrees that (i) all Shares sold by the Distributor
shall be sold at the net asset value ("NAV") thereof as described in Section 3
hereof, and (ii) the Portfolio shall receive 100% of such NAV.
(b) The Shares will be sold in accordance with sales agreements
between the Trust and the Life Companies and, where applicable, the Trust and
the Qualified Plans.
(c) The Distributor can use any of the officers and employees of
Neuberger Berman, LLC to provide any of the services or reports required under
this agreement.
3. The Trust agrees to supply to the Distributor, promptly after the time
or times at which NAV is determined, on each day on which the New York Stock
Exchange is open
<PAGE>
for business and on such other days as the Board of Trustees of the Trust
("Trustees") may from time to time determine (each such day being hereinafter
called a "business day"), a statement of the NAV of each Portfolio having been
determined in the manner set forth in the then-current Prospectus and Statement
of Additional Information ("SAI") of each Portfolio. Each determination of NAV
shall take effect as of such time or times on each business day as set forth in
the then-current Prospectus of each Portfolio and shall prevail until the time
as of which the next determination is made.
4. Upon receipt by the Trust at its principal place of business of a
written order from the Distributor, together with delivery instructions, the
Trust shall, if it elects to accept such order, as promptly as practicable,
cause the Shares purchased by such order to be delivered in such amounts and in
such names as the Distributor shall specify, against payment therefor in such
manner as may be acceptable to the Trust. The Trust may, in its discretion,
refuse to accept any order for the purchase of Shares that the Distributor may
tender to it.
5. (a) All sales literature and advertisements used by the Distributor in
connection with sales of Shares shall be subject to approval by the Trust. The
Trust authorizes the Distributor, in connection with the sale or arranging for
the sale of Shares of any Portfolio, to provide only such information and to
make only such statements or representations as are contained in the Portfolio's
then-current Prospectus and SAI or in such financial and other statements
furnished to the Distributor pursuant to the next paragraph or as may properly
be included in sales literature or advertisements in accordance with the
provisions of the Securities Act of 1933, as amended (the "1933 Act"), the 1940
Act and applicable rules of self-regulatory organizations. Neither the Trust nor
any Portfolio shall be responsible in any way for any information provided or
statements or representations made by the Distributor or its representatives or
agents other than the information, statements and representations described in
the preceding sentence.
(b) Each Portfolio shall keep the Distributor fully informed with
regard to its affairs, shall furnish the Distributor with a certified copy of
all of its financial statements and a signed copy of each report prepared for it
by its independent auditors, and shall cooperate fully in the efforts of the
Distributor to negotiate and sell Shares of such Portfolio and in the
Distributor's performance of all its duties under this Agreement.
6. The Distributor, as agent of each Portfolio and for the account and
risk of each Portfolio, is authorized, subject to the direction of the Trust, to
redeem outstanding Shares of such Portfolio when properly tendered by
shareholders pursuant to the redemption right granted to such Portfolio's
shareholders by the Trust Instrument of the Trust, as from time to time in
effect, at a redemption price equal to the NAV per Share of such Portfolio next
determined after proper tender and acceptance. The Trust has delivered to the
Distributor a copy of the Trust's Trust Instrument as currently in effect and
agrees to deliver to the Distributor any amendments thereto promptly upon filing
thereof with the Office of the Secretary of State of the State of Delaware.
<PAGE>
7. Each Portfolio shall assume and pay for the following expenses of such
Portfolio: (i) costs of preparing, printing and distributing reports,
prospectuses and SAIs used by such Portfolio in connection with the sale or
offering of its Shares and all advertising and sales literature relating to such
Portfolio printed at the instruction of the Distributor; and (ii) counsel fees
and expenses in connection with the foregoing.
8. The Distributor shall pay all of its own costs and expenses connected
with the sale of Shares.
9. Each Portfolio shall maintain a currently effective Registration
Statement on Form N-1A with respect to such Portfolio and shall file with the
Securities and Exchange Commission (the "SEC") such reports and other documents
as may be required under the 1933 Act and the 1940 Act, or the rules and
regulations of the SEC thereunder.
Each Portfolio represents and warrants that the Registration Statement,
post-effective amendments, Prospectus and SAI (excluding statements relating to
the Distributor and the services it provides that are based upon written
information furnished by the Distributor expressly for inclusion therein) of
such Portfolio shall not contain any untrue statement of material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that all statements or information
furnished to the Distributor, pursuant to Section 5(b) hereof, shall be true and
correct in all material respects.
10. (a) This Agreement shall become effective with respect to a Portfolio
on the date indicated in Schedule A and, unless sooner terminated as herein
provided, this Agreement shall remain in effect to the date two years after
execution, unless renewed as hereinafter provided prior to that date, and may be
continued from year to year thereafter; provided, that such continuance shall be
specifically approved each year by the Trustees or by a majority of the
outstanding voting securities of the Portfolio, and in either case, also by a
majority of the Trustees who are not interested persons of the Trust or the
Distributor ("Disinterested Trustees"). This Agreement may be amended as to any
Portfolio with the approval of the Trustees or of a majority of the outstanding
voting securities of such Portfolio; provided, that in either case, such
amendment also shall be approved by a majority of the Disinterested Trustees.
(b) Either party may terminate this Agreement without the payment of
any penalty, upon not more than sixty days' nor less than thirty days' written
notice delivered personally or mailed by registered mail, postage prepaid, to
the other party; provided, that in the case of termination by any Portfolio,
such action shall have been authorized (i) by resolution of the Trustees, or
(ii) by vote of a majority of the outstanding voting securities of such
Portfolio, or (iii) by written consent of a majority of the Disinterested
Trustees.
(c) This Agreement shall automatically terminate if it is assigned
by the Distributor.
<PAGE>
(d) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act shall be resolved by reference to such term or provision of the
1940 Act and to interpretation thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC validly issued pursuant to the 1940 Act.
Specifically, the terms "interested persons," "assignment" and "vote of a
majority of the outstanding voting securities", as used in this Agreement, shall
have the meanings assigned to them by Section 2(a) of the 1940 Act. In addition,
when the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is modified, interpreted or relaxed by a rule, regulation or
order of the SEC, whether of special or of general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order. The
Trust and the Distributor may from time to time agree on such provisions
interpreting or clarifying the provisions of this Agreement as, in their joint
opinion, are consistent with the general tenor of this Agreement and with the
specific provisions of this Section 9(d). Any such interpretation or
clarification shall be in writing signed by the parties and annexed hereto, but
no such interpretation or clarification shall be effective if in contravention
of any applicable federal or state law or regulation, and no such interpretation
or clarification shall be deemed to be an amendment of this Agreement.
No term or provision of this Agreement shall be construed to require
the Distributor to provide distribution services to any series of the Trust
other than the Portfolios listed in Schedule A, or to require any Portfolio to
pay any compensation or expenses that are properly allocable, in a manner
approved by the Trustees, to a series of the Trust other than such Portfolio.
(e) This Agreement is made and to be principally performed in the
State of New York, and except insofar as the 1940 Act 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.
(f) This Agreement is made by the Trust solely with respect to the
Portfolio, and the obligations created hereby are not binding on any other
Portfolio of the Trust, but bind only assets belonging to the Portfolio.
11. The Distributor shall look only to the assets of a Portfolio for the
performance of this Agreement by the Trust on behalf of such Portfolio, and
neither the Trustees nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed by their duly authorized officers and under their respective
seals.
Attest: NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
- ------------------------------ ------------------------------
Secretary By:
Title:
Attest: NEUBERGER BERMAN
MANAGEMENT INC.
- ------------------------------ ------------------------------
Secretary By:
Title:
<PAGE>
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
DISTRIBUTION AGREEMENT
SCHEDULE A
SERIES DATE ADDED TO AGREEMENT
- ------ -----------------------
Liquid Asset Portfolio May 1, 1995
Limited Maturity Bond Portfolio May 1, 1995
Balanced Portfolio May 1, 1995
Partners Portfolio May 1, 1995
Growth Portfolio May 1, 1995
International Portfolio May 1, 1995
Guardian Portfolio October 15, 1997
Mid-Cap Growth Portfolio October 15, 1997
Socially Responsive Portfolio August 19, 1998
<PAGE>
DISTRIBUTION PLAN
OF NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
1. This Distribution Plan (the Plan), when effective in accordance with
its terms, shall be the written plan contemplated by Rule 12b-1 under the
Investment Company Act of 1940 (the Act) of the series of shares of Neuberger
Berman Advisers Management Trust ("Trust") listed in Schedule A hereto (each, a
"Portfolio").
2. It is understood that shares of the Trust are offered to life insurance
companies for allocation to certain of their variable separate accounts
established for the purpose of funding variable annuity contracts and variable
life insurance policies and are also offered directly to qualified pension and
retirement plans ("Qualified Plans") outside of the separate account context.
3. The Trust has entered into a Distribution Agreement with respect to
each Portfolio with Neuberger Berman Management Inc. ("NB Management"), under
which NB Management uses all reasonable efforts, consistent with its other
business, to secure purchasers for each Portfolio's shares. Under the agreement,
NB Management pays the expenses of printing and distributing any prospectuses,
reports and other literature used by NB Management, advertising, and other
promotional activities, all in connection with the offering of shares of each
Portfolio for sale. It is understood that NB Management may reimburse itself for
these expenses from any source available to it, including administration fees
paid to it by a Portfolio.
4. No Portfolio will make separate payments as a result of this Plan to NB
Management, Neuberger Berman, L.L.C., or any other party, it being recognized
that each Portfolio presently pays, and will continue to pay, an administration
fee to NB Management. To the extent that any payments made by a Portfolio to NB
Management, including payment of administration fees, 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 Act, then
such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective with respect to a Portfolio upon
commencement of operations of that Portfolio as a "feeder fund" in a
master/feeder fund structure, but only if the Plan has first been approved by a
vote of at least a "majority of the outstanding voting securities" of that
Portfolio (as defined in the Act), the plan having been approved by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust or the Portfolio (as defined in the Act)
and who have no direct or indirect financial interest in the operation of this
Plan or in any agreements related to this Plan (the "Independent Trustees"),
cast in person at a meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until May 1, 1996, and from year to year
thereafter, provided, however,
<PAGE>
that such continuance is subject to approval annually by a vote of a majority of
the Trustees of the Trust, including a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of voting on this Plan. This
Plan may be amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by a Portfolio to finance any activity
primarily intended to result in the sale of shares of that Portfolio, or to
increase materially the amount spent by a Portfolio for distribution, shall be
effective only upon approval by a vote of a majority of the outstanding voting
securities of the Portfolio, and (b) any material amendments of this Plan shall
be effective only upon approval in the manner provided in the first sentence in
this paragraph.
7. This Plan may be terminated at any time with respect to a Portfolio,
without the payment of any penalty, by vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting securities of the
Portfolio.
8. During the existence of this Plan, each Portfolio shall require NB
Management to provide the Trust, for review by the Board of Trustees, and the
Trustees shall review, at least quarterly, a written report of the amount
expended in connection with financing any activities primarily intended to
result in the sale of shares of the Portfolio (making estimates of such costs
where necessary or desirable) and the purposes for which such expenditures were
made.
9. This Plan does not require NB 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 any
Portfolio.
10. Consistent with the limitations of liability as set forth in the
Trust's Trust Instrument, any obligations assumed by a Portfolio pursuant to
this Plan and any agreements related to this Plan shall be limited in all cases
to that Portfolio and its assets, and shall not constitute obligations of any
other series of shares of the Trust, of the shareholders, or of the Trustees.
11. So long as the Plan is in effect, the selection and nomination of
those Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the non-interested Trustees then
in office.
12. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not be
affected thereby.
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DISTRIBUTION PLAN
OF NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
SCHEDULE A
PORTFOLIOS DATE MADE A PARTY TO THE PLAN
- ---------- -----------------------------
Balanced Portfolio May 1, 1995
Growth Portfolio May 1, 1995
Liquid Asset Portfolio May 1, 1995
Limited Maturity Bond Portfolio May 1, 1995
Partners Portfolio May 1, 1995
International Portfolio May 1, 1995
Guardian Portfolio October 15, 1997
Mid-Cap Growth Portfolio October 15, 1997
Socially Responsive Portfolio August 19, 1998
DATED: August 19, 1998
Exhibit (g)(3)
SCHEDULE A TO THE CUSTODIAN CONTRACT
SCHEDULE A
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of the above mentioned
trust as sub custodian for securities and other assets:
Westpac Banking Corp. (Austraclear Limited, RITS) (Australia)
Erste Bank der Oesterreichischen Sparkassen AG (OEKB) (Austria)
General de Banque (C.I.K., Banque Nationale de Belgique) (Belgium)
State Street Trust Company Canada (CDS) (Canada)
Den Danske Bank (VP) (Denmark)
Merita Bank Plc. (FCSD) (Finland)
Paribas, S.A. (SICOVAM) (France)
Dresdner Bank AG (DBC) (Germany)
Standard Chartered Bank, Hong Kong (CCASS, CMU) (Hong Kong)
Bank of Ireland (CBISSO) (Ireland)
The Fuji Bank, Ltd. (JASDEC, Bank of Japan) (Japan)
MeesPierson N.V. (NECIGEF) (the Netherlands)
Christiania Bank of Kreditkasse ASA (VPS) (Norway)
Skandinaviska Enskilda Banken (VPC) (Sweden)
Union Bank of Switzerland AG (SEGA) (Switzerland)
State Street Bank and Trust Co. (CGO, CMO) (United Kingdom)
The Euroclear System
<PAGE>
Cedel Bank societe anonyme and INTERSETTLE
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
_______________________________
By: Michael J. Weiner
Title: Vice President (Principal Financial Officer)
Date: May 1, 2000
Exhibit (h)(2)
ADMINISTRATION AGREEMENT
This Agreement is made as of May 1, 1995, between Neuberger Berman
Advisers Management Trust, a Delaware business trust ("Trust"), and Neuberger
Berman Management Inc., a New York corporation ("Administrator") as amended and
restated on January 1, 1999 and May 26, 1999.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end, diversified management investment
company and has established several separate series of shares ("Portfolios"),
with each Portfolio having its own assets and investment policies; and
WHEREAS, the Trust desires to retain the Administrator to furnish
administrative services to each Portfolio listed in Schedule A attached hereto,
and to such other Portfolios of the Trust hereinafter established as agreed to
from time to time by the parties, evidenced by an addendum to Schedule A
(hereinafter "Portfolio" shall refer to each Portfolio which is subject to this
Agreement and all agreements and actions described herein to be made or taken by
a Portfolio shall be made or taken by the Trust on behalf of the Portfolio), and
the Administrator is willing to furnish such services,
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
Services of the Administrator.
1.1 Administrative Services. The Administrator shall supervise each
Portfolio's business and affairs and shall provide such services required for
effective administration of such Portfolio as are not provided by employees or
other agents engaged by such Portfolio; provided, that the Administrator shall
not have any obligation to provide under this Agreement any direct or indirect
services to a Portfolio's shareholders, any services related to the distribution
of a Portfolio's shares, or any other services that are the subject of a
separate agreement or arrangement between a Portfolio and the Administrator. The
Administrator can use any of the officers and employees of Neuberger Berman, LLC
to provide any of the services or reports required under this agreement. Subject
to the foregoing, in providing administrative services hereunder, the
Administrator shall:
1.1.1 Office Space, Equipment and Facilities. Furnish without
cost to each Portfolio, or pay the cost of, such office space, office equipment
and office facilities as are adequate for the Portfolio's needs;
1.1.2 Personnel. Provide, without remuneration from or other
cost to each Portfolio, the services of individuals competent to perform all of
the Portfolio's executive, administrative and clerical functions that are not
performed by employees or other agents engaged
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by the Portfolios or by the Administrator acting in some other capacity pursuant
to a separate agreement or arrangement with the Portfolio;
1.1.3 Agents. Assist each Portfolio in selecting and
coordinating the activities of the other agents engaged by the Portfolio,
including the Portfolio's custodian, independent auditors and legal counsel,
1.1.4 Trustees and Officers. Authorize and permit the
Administrator's directors, officers or employees who may be elected or appointed
as trustees or officers of the Trust to serve in such capacities, without
remuneration from or other cost to the Trust or any Portfolio;
1.1.5 Books and Records. Ensure that all financial, accounting
and other records required to be maintained and preserved by each Portfolio are
maintained and preserved by it or on its behalf in accordance with applicable
laws and regulations; and
1.1.6 Reports and Filings. Assist in the preparation of (but
not pay for) all periodic reports by each Portfolio to shareholders of such
Portfolio and all reports and filings required to maintain the registration and
qualification of the Portfolio and the Portfolio's shares, or to meet other
regulatory or tax requirements applicable to the Portfolio, under federal and
state securities and tax laws.
2. Expenses of each Portfolio.
2.1 Expenses to be Paid by the Administrator. The Administrator
shall pay all salaries, expenses and fees of the officers, trustees, or
employees of the Trust who are officers, directors or employees of the
Administrator. If the Administrator pays or assumes any expenses of the Trust or
a Portfolio not required to be paid or assumed by the Administrator under this
Agreement, the Administrator shall not be obligated hereby to pay or assume the
same or any similar expense in the future; provided, that nothing herein
contained shall be deemed to relieve the Administrator of any obligation to the
Trust or to a Portfolio under any separate agreement or arrangement between the
parties.
2.2 Expenses to be Paid by the Portfolios. Each Portfolio shall bear
all expenses of its operation, except those specifically allocated to the
Administrator under this Agreement or under any separate agreement between such
Portfolio and the Administrator. Expenses to be borne by such Portfolio shall
include both expenses directly attributable to the operation of that Portfolio
and the offering of its shares, as well as the portion of any expenses of the
Trust that is properly allocable to such Portfolio in a manner approved by the
trustees of the Trust ("Trustees"). Subject to any separate agreement or
arrangement between the Trust or a Portfolio and the Administrator, the expenses
hereby allocated to each Portfolio, and not to the Administrator, include, but
are not limited to:
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2.2.1 Custody. All charges of depositories, custodians, and
other agents for the transfer, receipt, safekeeping, and servicing of its cash,
securities, and other property;
2.2.2 Shareholder Servicing. All expenses of maintaining and
servicing shareholder accounts, including, but not limited to, the charges of
any shareholder servicing agent, dividend disbursing agent or other agent (other
than the Administrator hereunder) engaged by a Portfolio to service shareholder
accounts;
2.2.3 Shareholder Reports. All expenses of preparing, setting
in type, printing and distributing reports and other communications to
shareholders of a Portfolio;
2.2.4 Prospectuses. All expenses of preparing, setting in
type, printing and mailing annual or more frequent revisions of a Portfolio's
Prospectus and SAI and any supplements thereto and of supplying them to
shareholders of the Portfolio and Account holders;
2.2.5 Pricing and Portfolio Valuation. All expenses of
computing a Portfolio's NAV per share, including any equipment or services
obtained for the purpose of pricing shares or valuing the Portfolio's investment
portfolio;
2.2.6 Communications. All charges for equipment or services
used for communications between the Administrator or the Portfolio and any
custodian, shareholder servicing agent, portfolio accounting services agent, or
other agent engaged by a Portfolio;
2.2.7 Legal and Accounting Fees. All charges for services and
expenses of a Portfolio's legal counsel and independent auditors;
2.2.8 Trustees' Fees and Expenses. All compensation of
Trustees other than those affiliated with the Administrator, all expenses
incurred in connection with such unaffiliated Trustees' services as Trustees,
and all other expenses of meetings of the Trustees or committees thereof;
2.2.9 Shareholder Meetings. All expenses incidental to holding
meetings of shareholders, including the printing of notices and proxy materials,
and proxy solicitation therefor;
2.2.10 Federal Registration Fees. All fees and expenses of
registering and maintaining the registration of the Trust and each Portfolio
under the 1940 Act and the registration of each Portfolio's shares under the
Securities Act of 1933 (the "1933 Act"), including all fees and expenses
incurred in connection with the preparation, setting in type, printing, and
filing of any Registration Statement, Prospectus and SAI under the 1933 Act or
the 1940 Act, and any amendments or supplements that may be made from time to
time;
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2.2.11 State Registration Fees. All fees and expenses of
qualifying and maintaining the qualification of the Trust and each Portfolio and
of each Portfolio's shares for sale under securities laws of various states or
jurisdictions, and of registration and qualification of each Portfolio under all
other laws applicable to a Portfolio or its business activities (including
registering the Portfolio as a broker-dealer, or any officer of the Portfolio or
any person as agent or salesman of the Portfolio in any state);
2.2.12 Share Certificates. All expenses of preparing and
transmitting a Portfolio's share certificates, if any;
2.2.13 Confirmations. All expenses incurred in connection with
the issue and transfer of a Portfolio's shares, including the expenses of
confirming all share transactions;
2.2.14 Bonding and Insurance. All expenses of bond, liability,
and other insurance coverage required by law or regulation or deemed advisable
by the Trustees, including, without limitation, such bond, liability and other
insurance expense that may from time to time be allocated to the Portfolio in a
manner approved by the Trustees;
2.2.15 Brokerage Commissions. All brokers' commissions and
other charges incident to the purchase, sale or lending of a Portfolio's
securities;
2.2.16 Taxes. All taxes or governmental fees payable by or
with respect to a Portfolio to federal, state or other governmental agencies,
domestic or foreign, including stamp or other transfer taxes;
2.2.17 Trade Association Fees. Its proportionate share of all
fees, dues and other expenses incurred in connection with the Trust's membership
in any trade association or other investment organization;
2.2.18 Nonrecurring and Extraordinary Expenses. Such
nonrecurring and extraordinary expenses as may arise, including the costs of
actions, suits, or proceedings to which the Portfolio is a party and the
expenses a Portfolio may incur as a result of its legal obligation to provide
indemnification to the Trust's officers, Trustees and agents;
2.2.19 Organizational Expenses. All organizational expenses of
each Portfolio paid or assessed by the Administrator, which such Portfolio shall
reimburse to the Administrator at such time or times and subject to such
condition or conditions as shall be specified in the Prospectus and SAI pursuant
to which such Portfolio makes the initial public offering of its shares; and
2.2.20 Investment Advisory Services. Any fees and expenses for
investment advisory services that may be incurred or contracted for by a
Portfolio.
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3. Administration Fee.
3.1 Fee. As compensation for all services rendered, facilities
provided and expenses paid or assumed by the Administrator to or for each
Portfolio under this Agreement, such Portfolio shall pay the Administrator an
annual fee as set out in Schedule B to this Agreement.
3.2 Computation and Payment of Fee. The administration fee shall
accrue on each calendar day, and shall be payable monthly on the first business
day of the next succeeding calendar month. The daily fee accruals for each
Portfolio shall be computed by multiplying the fraction of one divided by the
number of days in the calendar year by the applicable annual administration fee
rate (as set forth in Schedule B hereto), and multiplying this product by the
NAV of such Portfolio, determined in the manner set forth in such Portfolio's
then-current Prospectus, as of the close of business on the last preceding
business day on which such Portfolio's NAV was determined.
3.3 State Expense Limitation. If in any fiscal year a Portfolio's
operating expenses plus such Portfolio's pro rata portion of the operating
expenses of any portfolio of Advisers Managers Trust in which such Portfolio
invests all or substantially all of its assets ("Aggregate Operating Expenses"),
which includes any fees or expense reimbursements payable to the Administrator
pursuant to this Agreement and any compensation payable to the Administrator
pursuant to (i) the Management Agreement between such Series and the
Administrator, or (ii) any other agreement or arrangement with respect to such
Portfolio, (but excluding interest, taxes, brokerage commissions, litigation and
indemnification expenses, and other extraordinary expenses not incurred in the
ordinary course of such Portfolio's business) exceed the lowest applicable
percentage expense limitation imposed under the securities law and regulations
of any state in which such Portfolio's shares are qualified for sale (the "State
Expense Limitation"), then the administration fee payable to the Administrator
under this Agreement by such Portfolio shall be reduced by the amount of such
excess; provided, that the Administrator shall have no obligation hereunder to
reimburse the Portfolio for any such expenses which exceed such administration
fee.
Any reduction in the administration fee shall be made monthly, by
annualizing the Aggregate Operating Expenses of such Portfolio for each month as
of the last day of such month. An adjustment shall be made on or before the last
day of the first month of the next succeeding fiscal year if Aggregate Operating
Expenses for such Portfolio's fiscal year do not exceed the State Expense
Limitation or if for such fiscal year there is no applicable State Expense
Limitation.
4. Ownership of Records. All records required to be maintained and
preserved by each Portfolio pursuant to the provisions or rules or regulations
of the Securities and Exchange Commission ("SEC") under section 31(a) of the
1940 Act and maintained and preserved by the Administrator on behalf of such
Portfolio are the property of such Portfolio and shall be
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<PAGE>
surrendered by the Administrator promptly on request by the Portfolio; provided,
that the Administrator may at its own expense make and retain copies of any such
records.
5. Reports to Administrator. Each Portfolio shall furnish or otherwise
make available to the Administrator such copies of that Portfolio's Prospectus,
SAI, financial statements, proxy statements, reports, and other information
relating to its business and affairs as the Administrator may, at any time or
from time to time, reasonably require in order to discharge its obligations
under this Agreement.
6. Reports to each Portfolio. The Administrator shall prepare and furnish
to each Portfolio such reports, statistical data and other information in such
form and at such intervals as such Portfolio may reasonably request.
7. Ownership of Software and Related Materials. All computer programs,
written procedures and similar items developed or acquired and used by the
Administrator in performing its obligations under this Agreement shall be the
property of the Administrator, and no Portfolio will acquire any ownership
interest therein or property rights with respect thereto.
8. Confidentiality. The Administrator agrees, on its own behalf and on
behalf of its employees, agents and contractors, to keep confidential any and
all records maintained and other information obtained hereunder which relate to
any Portfolio or to any of a Portfolio's former, current or prospective
shareholders, except that the Administrator may deliver records or divulge
information (a) when requested to do so by duly constituted authorities after
prior notification to and approval in writing by such Portfolio (which approval
will not be unreasonably withheld and may not be withheld by such Portfolio
where the Administrator advises such Portfolio that it may be exposed to civil
or criminal contempt proceedings or other penalties for failure to comply with
such request) or (b) whenever requested in writing to do so by such Portfolio.
9. The Administrator's Actions in Reliance on Portfolios' Instructions,
Legal Opinions, Etc.; Portfolios' Compliance with Laws.
9.1 The Administrator may at any time apply to an officer of the
Trust for instructions, and may consult with legal counsel for a Portfolio or
with the Administrator's own legal counsel, in respect of any matter arising in
connection with this Agreement; and the Administrator shall not be liable for
any action taken or omitted to be taken in good faith and with due care in
accordance with such instructions or with the advice or opinion of such legal
counsel. The Administrator 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 the Administrator believes to be
genuine and to have been signed by the proper person or persons, and the
Administrator 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.
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9.2 Except as otherwise provided in this Agreement or in any
separate agreement between the parties and except for the accuracy of
information furnished to each Portfolio by the Administrator, each Portfolio
assumes full responsibility for the preparation, contents, filing and
distribution of its Prospectus and SAI, and full responsibility for other
documents or actions required for compliance with all applicable requirements of
the 1940 Act, the Securities Exchange Act of 1934, the 1933 Act, and any other
applicable laws, rules and regulations of governmental authorities having
jurisdiction over such Portfolio.
10. Services to Other Clients. Nothing herein contained shall limit the
freedom of the Administrator or any affiliated person of the Administrator to
render administrative or shareholder services to other investment companies, to
act as administrator to other persons, firms, or corporations, or to engage in
other business activities.
11. Limitation of Liability Regarding the Trust. The Administrator shall
look only to the assets of each Portfolio for performance of this Agreement by
the Trust on behalf of such Portfolio, and neither the Trustees of the Trust nor
any of the Trust's officers, employees or agents, whether past, present or
future shall be personally liable therefor.
12. Indemnification by Portfolio. Each Portfolio shall indemnify the
Administrator and hold it harmless from and against any and all losses, damages
and expenses, including reasonable attorneys' fees and expenses, incurred by the
Administrator that result from: (i) any claim, action, suit or proceeding in
connection with the Administrator's entry into or performance of this Agreement
with respect to such Portfolio; or (ii) any action taken or omission to act
committed by the Administrator in the performance of its obligations hereunder
with respect to such Portfolio; or (iii) any action of the Administrator 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 the Administrator shall not be entitled to such
indemnification in respect of actions or omissions constituting negligence or
misconduct on the part of the Administrator or its employees, agents or
contractors. Before confessing any claim against it which may be subject to
indemnification by a Portfolio hereunder, the Administrator shall give such
Portfolio reasonable opportunity to defend against such claim in its own name or
in the name of the Administrator.
13. Indemnification by the Administrator. The Administrator shall
indemnify each Portfolio and hold it harmless from and against any and all
losses, damages and expenses, including reasonable attorneys' fees and expenses,
incurred by such Portfolio which result from (i) the Administrator's failure to
comply with the terms of this Agreement with respect to such Portfolio; or (ii)
the Administrator's lack of good faith in performing its obligations hereunder
with respect to such Portfolio; or (iii) the Administrator's negligence or
misconduct or its employees, agents or contractors in connection herewith with
respect to such Portfolio. A Portfolio 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 the Administrator unless such negligence or misconduct results from
or is
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<PAGE>
accompanied by negligence or misconduct on the part of the Administrator,
any affiliated person of the Administrator, or any affiliated person of an
affiliated person of the Administrator. Before confessing any claim against it
which may be subject to indemnification hereunder, a Portfolio shall give the
Administrator reasonable opportunity to defend against such claim in its own
name or in the name of the Trust on behalf of such Portfolio.
14. Effect of Agreement. Nothing herein contained shall be deemed to
require the Trust or any Portfolio to take any action contrary to the Trust
Instrument or By-laws of the Trust or any applicable law, regulation or order to
which it is subject or by which it is bound, or to relieve or deprive the
Trustees of their responsibility for and control of the conduct of the business
and affairs of the Portfolio or Trust.
15. Term of Agreement. The term of this Agreement shall begin on the date
indicated with respect to each Portfolio listed in Schedule A and, unless sooner
terminated as hereinafter provided, this Agreement shall remain in effect to the
date two years after such execution, unless renewed as hereinafter provided
prior to that date. Thereafter, in each case this Agreement shall continue in
effect with respect to each Portfolio from year to year, subject to the
termination provisions and all other terms and conditions hereof; provided, such
continuance with respect to a Portfolio is approved at least annually by vote or
written consent of the Trustees, including a majority of the Trustees who are
not interested persons of either party hereto ("Disinterested Trustees"); and
provided further, that the Administrator shall not have notified a Portfolio in
writing at least sixty days prior to the first expiration date hereof or at
least sixty days prior to any expiration date in any year thereafter that it
does not desire such continuation. The Administrator shall furnish any
Portfolio, promptly upon its request, such information as may reasonably be
necessary to evaluate the terms of this Agreement or any extension, renewal or
amendment thereof.
16. Amendment or Assignment of Agreement. Any amendment to this Agreement
shall be in writing signed by the parties hereto; provided, that no such
amendment shall be effective unless authorized on behalf of any Portfolio (i) by
resolution of the Trustees, including the vote or written consent of a majority
of the Disinterested Trustees, or (ii) by vote of a majority of the outstanding
voting securities of such Portfolio. This Agreement shall terminate
automatically and immediately in the event of its assignment; provided, that
with the consent of a Portfolio, the Administrator may subcontract to another
person any of its responsibilities with respect to such Portfolio.
17. Termination of Agreement. This Agreement may be terminated at any time
by either party hereto, without the payment of any penalty, upon at least sixty
days' prior written notice to the other party; provided, that in the case of
termination by any Portfolio, such action shall have been authorized (i) by
resolution of the Trustees, including the vote or written consent of the
Disinterested Trustees, or (ii) by vote of a majority of the outstanding voting
securities of such Portfolio.
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18. Use of Name. Each Portfolio hereby agrees that if the Administrator
shall at any time for any reason cease to serve as administrator to a Portfolio,
such Portfolio shall, if and when requested by the Administrator, thereafter
refrain from using the name "Neuberger Berman" or the initials "NB" in
connection with its business or activities, and the foregoing agreement of each
Portfolio shall survive any termination of this Agreement and any extension or
renewal thereof.
19. Interpretation and Definition of Terms. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretation thereof, if any,
by the United States courts or, in the absence of any controlling decision of
any such court, by rules, regulations or orders of the SEC validly issued
pursuant to the 1940 Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment" and
"affiliated person," as used in this Agreement shall have the meanings assigned
to them by section 2(a) of the 1940 Act. In addition, when the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
modified, interpreted or relaxed by a rule, regulation or order of the SEC,
whether of special or of general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
20. Choice of Law. This Agreement is made to be principally performed in
the State of New York, and except insofar as the 1940 Act 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.
21. Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
22. Execution in Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
Attest: NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
___________________________________ ________________________________________
Secretary By:
Title:
Attest: NEUBERGER BERMAN
MANAGEMENT INC.
___________________________________ ________________________________________
Secretary By:
Title:
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NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
ADMINISTRATION AGREEMENT
SCHEDULE A
The Portfolios of Neuberger Berman Advisers Management Trust currently
subject to this Agreement and the dates such Portfolios were added to this
Agreement are as follows:
Liquid Asset Portfolio May 1, 1995
Growth Portfolio May 1, 1995
Balanced Portfolio May 1, 1995
Partners Portfolio May 1, 1995
Limited Maturity Bond Portfolio May 1, 1995
International Portfolio May 1, 1997
Guardian Portfolio October 15, 1997
Mid-Cap Growth Portfolio October 15, 1997
Socially Responsive Portfolio August 19, 1998
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NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
ADMINISTRATION AGREEMENT
SCHEDULE B
Compensation pursuant to Paragraph 3 of the Neuberger Berman Advisers
Management Trust Administration Agreement shall be:
(1) The following percentage per annum of the average daily net assets of
each Portfolio:
Growth Portfolio 0.30%
Partners Portfolio 0.30%
Balanced Portfolio 0.30%
Limited Maturity Bond Portfolio 0.40%
Liquid Asset Portfolio 0.40%
International Portfolio 0.30%
Guardian Portfolio 0.30%
Mid-Cap Growth Portfolio 0.30%
Socially Responsive Portfolio 0.30%
(2) Certain out-of-pocket expenses for technology used for shareholder
servicing and shareholder communications, subject to the prior approval of an
annual budget by the Trust's Board of Trustees, including a majority of those
Trustees who are not interested persons of the Trust or of Neuberger Berman
Management Inc., and periodic reports to the Board of Trustees on actual
expenses.
DATED: May 26, 1999
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Exhibit (h)(3)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the ___ day of __________, ____, by and between
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST ("TRUST"), NEUBERGER BERMAN
MANAGEMENT INC. ("NB MANAGEMENT"), a New York corporation, and _________________
("LIFE COMPANY"), a life insurance company organized under the laws of the State
of _____________.
WHEREAS, TRUST is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended ("40 Act") as an
open-end, diversified management investment company; and
WHEREAS, TRUST is organized as a series fund comprised of several
portfolios ("Portfolios"), the currently available of which are listed on
Appendix A hereto; and
WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies") and also offers its
shares to certain qualified pension and retirement plans; and
WHEREAS, TRUST has received an order from the SEC, dated May 5,1995 (File
No. 812-9164), granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the '40 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Portfolios of the TRUST to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having TRUST as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, NB MANAGEMENT is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940 and as a broker-dealer under the
Securities Exchange Act of 1934, as amended; and
WHEREAS, NB MANAGEMENT is the investment manager and administrator of the
Portfolios of the Trust and distributor of the shares of each Portfolio of
TRUST; and
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WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,
TRUST, and NB MANAGEMENT agree as follows:
Article I. SALE OF TRUST SHARES
1.1 TRUST agrees to make available to the Separate Accounts of LIFE
COMPANY shares of the selected Portfolios as listed in Appendix B for investment
of proceeds from Variable Contracts allocated to the designated Separate
Accounts, such shares to be offered as provided in TRUST's Prospectus.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.2,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from LIFE
COMPANY and receipt by such designee shall constitute receipt by TRUST; provided
that TRUST receives notice of such order by 8:30 a.m. New York time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which TRUST calculates its net asset
value pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's request, any full
or fractional shares of TRUST held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by TRUST or its
designee of the request for redemption. For purposes of this Section 1.3, LIFE
COMPANY shall be the designee of TRUST for receipt of requests for redemption
from LIFE COMPANY and receipt by such designee shall constitute receipt by
TRUST; provided that TRUST receives notice of such request for redemption by
8:30 a.m. New York time on the next following Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend date, notice to LIFE
COMPANY of any income dividends or capital gain distributions payable on the
shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all such
income dividends and capital gain distributions as are payable on a Portfolio's
shares in additional shares of the Portfolio. TRUST shall notify LIFE COMPANY of
the number of shares so issued as payment of such dividends and distributions.
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1.5 TRUST shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value available by 6:30 p.m. New York time.
If TRUST provides LIFE COMPANY with materially incorrect share net asset value
information through no fault of LIFE COMPANY, LIFE COMPANY on behalf of the
Separate Accounts, shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct share net asset value. Any material
error in the calculation of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to LIFE COMPANY.
1.6 At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day ("Day 1"). Using these unit values, LIFE COMPANY shall process Day
1's Separate Account share transactions based on requests and premiums ("Trade
Instructions") received by it on Day 1 by the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m. New York time) to determine the
net dollar amount of TRUST shares which shall be purchased or redeemed at Day
1's closing net asset value per share. The net share purchase or redemption
orders so determined shall be transmitted to TRUST by LIFE COMPANY by 8:30 a.m.
New York Time on the Business Day next following LIFE COMPANY's receipt of such
Trade Instructions ("Day 2")in accordance with the terms of Sections 1.2 and 1.3
hereof. All orders based on Trade Instructions received by LIFE COMPANY after
the close of trading on Day 1 shall be processed at Day 2's net asset value per
share.
1.7 If LIFE COMPANY's order requests the purchase of TRUST shares, LIFE
COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is transmitted by LIFE COMPANY
(Day 2). If LIFE COMPANY's order requests a net redemption resulting in a
payment of redemption proceeds to LIFE COMPANY, TRUST shall wire the redemption
proceeds to LIFE COMPANY on the day the order is transmitted by LIFE COMPANY
(Day 2), unless doing so would require TRUST to dispose of portfolio securities
or otherwise incur additional costs, but in such event, proceeds shall be wired
to LIFE COMPANY within seven days and TRUST shall notify the person designated
in writing by LIFE COMPANY as the recipient for such notice of such delay by
3:00 p.m. New York Time on the day that LIFE COMPANY transmits the redemption
order to TRUST (Day 2). If LIFE COMPANY's order requests the application of
redemption proceeds from the redemption of shares to the purchase of shares of
another fund administered or distributed by NB MANAGEMENT, TRUST shall so apply
such proceeds on the day that LIFE COMPANY transmits such order to TRUST (Day
2).
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1.8 Notwithstanding Section 1.7, TRUST reserves the right to suspend the
right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 40 Act and any rules thereunder.
1.9 TRUST agrees that all shares of the Portfolios of TRUST will be sold
only to Participating Insurance Companies which have agreed to participate in
TRUST to fund their Separate Accounts and/or to certain qualified pension and
other retirement plans, all in accordance with the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended ("Code") and Treasury
Regulation 1.817-5. Shares of the Portfolios of TRUST will not be sold directly
to the general public.
1.10 TRUST may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the 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 Board of Trustees of TRUST, acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
deemed necessary and in the best interests of the shareholders of such
Portfolios.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 LIFE COMPANY represents and warrants that it is an insurance company
duly organized and in good standing under the laws of ____________________ and
that it has legally and validly established each Separate Account as a
segregated asset account under such laws, and that ____________________, the
principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts will
be registered under the Securities Act of 1933 (the "`33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with state insurance law suitability requirements.
2.4 LIFE COMPANY represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under
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applicable provisions of the Code, that it will maintain such treatment and that
it will notify TRUST immediately upon having a reasonable basis for believing
that the Variable Contracts have ceased to be so treated or that they might not
be so treated in the future.
2.5 LIFE COMPANY represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of the Trust as required to be delivered under applicable
federal or state law and interpretations of federal and state securities
regulators thereunder in connection with the offer, sale or acquisition of the
Variable Contracts.
2.6 TRUST represents and warrants that the Portfolio shares offered and
sold pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. TRUST shall amend its registration statement under the '33 Act and
the '40 Act from time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by TRUST.
2.7 TRUST represents and warrants that each Portfolio will comply with the
diversification requirements set forth in Section 817(h) of the Code, and the
rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance within the grace period afforded by
Regulation 1.817-5.
2.8 TRUST represents and warrants that each Portfolio invested in by the
Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will make every effort to maintain such
qualification and will notify LIFE COMPANY immediately upon having a reasonable
basis for believing it has ceased to so qualify or might not so qualify in the
future.
2.9 LIFE COMPANY hereby consents to the use by TRUST of the name and
telephone number of LIFE COMPANY and to the reference by TRUST to the
relationship between LIFE COMPANY and TRUST as part of an informational page on
Trust's site on the World Wide Web portion of the Internet. The LIFE COMPANY
hereby further consents to Trust's establishing a link between Trust's site and
LIFE COMPANY's site from the same place that LIFE COMPANY is listed on Trust's
site as described in the preceding sentence.
Article III. PROSPECTUS AND PROXY STATEMENTS
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3.1 TRUST shall prepare and be responsible for filing with the SEC and any
state regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
3.2 TRUST will bear the printing costs (or duplicating costs with respect
to the statement of additional information) and mailing costs associated with
the delivery of the following TRUST (or individual Portfolio) documents, and any
supplements thereto, to existing Variable Contract owners of LIFE COMPANY:
(i) prospectuses and statements of additional information;
(ii) annual and semi-annual reports; and
(iii) proxy materials.
LIFE COMPANY will submit any bills for printing, duplicating and/or
mailing costs, relating to the TRUST documents described above, to TRUST for
reimbursement by TRUST. LIFE COMPANY shall monitor such costs and shall use its
best efforts to control these costs. LIFE COMPANY will provide TRUST on a
semi-annual basis, or more frequently as reasonably requested by TRUST, with a
current tabulation of the number of existing Variable Contract owners of LIFE
COMPANY whose Variable Contract values are invested in TRUST. This tabulation
will be sent to TRUST in the form of a letter signed by a duly authorized
officer of LIFE COMPANY attesting to the accuracy of the information contained
in the letter. If requested by LIFE COMPANY, the TRUST shall provide such
documentation (including a final copy of the TRUST's prospectus as set in type
or in camera-ready copy) and other assistance as is reasonably necessary in
order for LIFE COMPANY to print together in one document the current prospectus
for the Variable Contracts issued by LIFE COMPANY and the current prospectus for
the TRUST. Should LIFE COMPANY wish to print any of these documents in a format
different from that provided by TRUST, LIFE COMPANY shall provide Trust with
sixty (60) days' prior written notice and LIFE COMPANY shall bear the cost
associated with any format change.
3.3 TRUST will provide, at its expense, LIFE COMPANY with the following
TRUST (or individual Portfolio) documents, and any supplements thereto, with
respect to prospective Variable Contract owners of LIFE COMPANY:
(i) camera-ready copy of the current prospectus for printing by the LIFE
COMPANY;
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(ii) a copy of the statement of additional information suitable for
duplication;
(iii) camera-ready copy of proxy material suitable for printing; and
(iv) camera-ready copy of the annual and semi-annual reports for printing
by the LIFE COMPANY.
3.4 TRUST will provide LIFE COMPANY with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Portfolios promptly after the
filing of each such document with the SEC or other regulatory authority. LIFE
COMPANY will provide TRUST with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any of
the above that relate to a Separate Account promptly after the filing of each
such document with the SEC or other regulatory authority.
Article IV. SALES MATERIALS
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to TRUST and
NB MANAGEMENT, each piece of sales literature or other promotional material in
which TRUST or NB MANAGEMENT is named, at least fifteen (15) Business Days prior
to its intended use. No such material will be used if TRUST or NB MANAGEMENT
objects to its use in writing within ten (10) Business Days after receipt of
such material.
4.2 TRUST and NB MANAGEMENT will furnish, or will cause to be furnished,
to LIFE COMPANY, each piece of sales literature or other promotional material in
which LIFE COMPANY or its Separate Accounts are named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if LIFE
COMPANY objects to its use in writing within ten (10) Business Days after
receipt of such material.
4.3 TRUST and its affiliates and agents shall not give any information or
make any representations on behalf of LIFE COMPANY or concerning LIFE COMPANY,
the Separate Accounts, or the Variable Contracts issued by LIFE COMPANY, other
than the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to owners of such
Variable
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Contracts, or in sales literature or other promotional material approved by LIFE
COMPANY or its designee, except with the written permission of LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for TRUST, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
other promotional material approved by TRUST or its designee, except with the
written permission of TRUST.
4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc. rules, the
'40 Act or the '33 Act.
Article V. POTENTIAL CONFLICTS
5.1 The Board of Trustees of TRUST (the "Board") will monitor TRUST for
the existence of any material irreconcilable conflict between the interests of
the Variable Contract owners of Participating Insurance Company Separate
Accounts investing in the TRUST. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) state insurance regulatory authority
action; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling, or
any similar action by insurance, tax, or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the TRUST are being managed; (e) a difference
in voting instructions given by variable annuity and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to disregard
voting instructions of Variable Contract owners.
5.2 LIFE COMPANY will report any potential or existing conflicts to the
Board. LIFE COMPANY will be responsible for assisting the Board in carrying out
its responsibilities under the Conditions set forth in the notice issued by the
SEC for the TRUST on April 12, 1995 (the
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"Notice") (Investment Company Act Release No. 21003), which LIFE COMPANY has
reviewed, by providing the Board with all information reasonably necessary for
it to consider any issues raised. This responsibility includes, but is not
limited to, an obligation by LIFE COMPANY to inform the Board whenever Variable
Contract owner voting instructions are disregarded by LIFE COMPANY. These
responsibilities will be carried out with a view only to the interests of the
Variable Contract owners.
5.3 If a majority of the Board or a majority of its disinterested trustees
determines that a material irreconcilable conflict exists, affecting the LIFE
COMPANY, LIFE COMPANY, at its expense and to the extent reasonably practicable
(as determined by a majority of disinterested trustees), will take any steps
necessary to remedy or eliminate the irreconcilable material conflict,
including: (a) withdrawing the assets allocable to some or all of the Separate
Accounts from the TRUST or any Portfolio thereof and reinvesting those assets in
a different investment medium, which may include another Portfolio of TRUST or
another investment company or submitting the question as to whether such
segregation should be implemented to a vote of all affected Variable Contract
owners and, as appropriate, segregating the assets of any appropriate group
(i.e., Variable Contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Variable Contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed separate
account. If a material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard Variable Contract owner voting instructions, and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at the election of the TRUST, to withdraw its Separate
Account's investment in the TRUST, and no charge or penalty will be imposed as a
result of such withdrawal. The responsibility to take such remedial action shall
be carried out with a view only to the interests of the Variable Contract
owners.
For the purposes of this Section 5.3, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no event will
the TRUST or NB MANAGEMENT (or any other investment adviser of the TRUST) be
required to establish a new funding medium for any Variable Contract. Further,
LIFE COMPANY shall not be required by this Section 5.3 to establish a new
funding medium for any Variable Contract if any offer to do so has been declined
by a vote of a majority of Variable Contract owners materially affected by the
irreconcilable material conflict.
5.4 The Board's determination of the existence of a material
irreconcilable conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.
5.5 No less than annually, LIFE COMPANY shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out the
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obligations imposed upon it by these Conditions. Such reports, materials, and
data shall be submitted more frequently if deemed appropriate by the Board.
Article VI. VOTING
6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the '40 Act
as requiring pass-through voting privileges for Variable Contract owners. This
condition will apply to UIT Separate Accounts investing in TRUST to the extent a
vote is required with respect to matters relating to TRUST. Accordingly, LIFE
COMPANY, where applicable, will vote shares of TRUST held in its Separate
Accounts in a manner consistent with voting instructions timely received from
its Variable Contract owners. LIFE COMPANY will be responsible for assuring that
each of its Separate Accounts that participates in TRUST calculates voting
privileges in a manner consistent with other participants as defined in the
Conditions set forth in the Notice ("Participants"). The obligation to calculate
voting privileges in a manner consistent with all other Separate Accounts
investing in TRUST will be a contractual obligation of all Participants under
the agreements governing participation in TRUST. Each Participant will vote
shares for which it has not received timely voting instructions, as well as
shares it owns, in the same proportion as its votes those shares for which it
has received voting instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Order, then
TRUST and/or the Participants, as appropriate, shall take such steps as may be
necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify and
hold harmless TRUST and NB MANAGEMENT and each of their Trustees, directors,
officers, employees and agents and each person, if any, who controls TRUST or NB
MANAGEMENT within the meaning of Section 15 of the '33 Act (collectively, the
"Indemnified Parties" for purposes of this Article VII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY, which consent shall not be unreasonably
withheld) or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the
offer, sale or acquisition of TRUST's shares or the Variable Contracts and:
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(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration
Statement or prospectus for the Variable Contracts or contained in
the Variable Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to LIFE COMPANY by or on
behalf of TRUST for use in the registration statement or prospectus
for the Variable Contracts or in the Variable Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Contracts or TRUST shares;
or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature of TRUST not supplied by
LIFE COMPANY, or persons under its control) or wrongful conduct of
LIFE COMPANY or persons under its control, with respect to the sale
or distribution of the Variable Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature of TRUST or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to TRUST for inclusion therein
by or on behalf of LIFE COMPANY; or
(d) arise as a result of any failure by LIFE COMPANY to substantially
provide the services and furnish the materials under the terms of
this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by LIFE COMPANY in this
Agreement or arise out of or result from any other material breach
of this Agreement by LIFE COMPANY.
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7.2 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to TRUST,
whichever is applicable.
7.3 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified LIFE COMPANY in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY of any
such claim shall not relieve LIFE COMPANY from any liability which it may have
to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled to participate at
its own expense in the defense of such action. LIFE COMPANY also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from LIFE COMPANY to such party of LIFE
COMPANY's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and LIFE
COMPANY will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.4 Indemnification by NB MANAGEMENT. NB MANAGEMENT agrees to indemnify
and hold harmless LIFE COMPANY and each of its directors, officers, employees,
and agents and each person, if any, who controls LIFE COMPANY within the meaning
of Section 15 of the '33 Act (collectively, the "Indemnified Parties" for the
purposes of this Article VII) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of NB
MANAGEMENT which consent shall not be unreasonably withheld) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the offer, sale or acquisition of TRUST's
shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of TRUST (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein
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or necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to NB MANAGEMENT or TRUST by or on behalf
of LIFE COMPANY for use in the registration statement or prospectus
for TRUST or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable
Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature for the Variable Contracts
not supplied by NB MANAGEMENT or persons under its control) or
wrongful conduct of TRUST or NB MANAGEMENT or persons under their
control, with respect to the sale or distribution of the Variable
Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature covering the Variable Contracts, or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to
LIFE COMPANY for inclusion therein by or on behalf of TRUST; or
(d) arise as a result of (i) a failure by TRUST to substantially provide
the services and furnish the materials under the terms of this
Agreement; or (ii) a failure by a Portfolio(s) invested in by the
Separate Account to comply with the diversification requirements of
Section 817(h) of the Code; or (iii) a failure by a Portfolio(s)
invested in by the Separate Account to qualify as a "regulated
investment company" under Subchapter M of the Code; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by NB MANAGEMENT in this
Agreement or arise out of or result from any other material breach
of this Agreement by NB MANAGEMENT.
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7.5 NB MANAGEMENT shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to LIFE
COMPANY.
7.6 NB MANAGEMENT shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified NB MANAGEMENT in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify NB MANAGEMENT of
any such claim shall not relieve NB MANAGEMENT from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, NB MANAGEMENT shall be entitled to participate
at its own expense in the defense thereof. NB MANAGEMENT also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from NB MANAGEMENT to such party of NB MANAGEMENT's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and NB MANAGEMENT
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
Article VIII. TERM; TERMINATION
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of LIFE COMPANY or TRUST at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to by
the parties;
(b) At the option of LIFE COMPANY, if TRUST shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by LIFE COMPANY. Prompt notice of election to terminate
shall be furnished by LIFE COMPANY, said termination to be effective
ten days after receipt of notice unless TRUST makes available a
sufficient number of shares to
14
<PAGE>
reasonably meet the requirements of the Variable Contracts within
said ten-day period;
(c) At the option of LIFE COMPANY, upon the institution of formal
proceedings against TRUST by the SEC, or any other regulatory body,
the expected or anticipated ruling, judgment or outcome of which
would, in LIFE COMPANY's reasonable judgment, materially impair
TRUST's ability to meet and perform Trust's obligations and duties
hereunder. Prompt notice of election to terminate shall be furnished
by LIFE COMPANY with said termination to be effective upon receipt
of notice;
(d) At the option of TRUST, upon the institution of formal proceedings
against LIFE COMPANY by the SEC, the National Association of
Securities Dealers, Inc., or any other regulatory body, the expected
or anticipated ruling, judgment or outcome of which would, in
TRUST's reasonable judgment, materially impair LIFE COMPANY's
ability to meet and perform its obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by TRUST
with said termination to be effective upon receipt of notice;
(e) In the event TRUST's shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law
precludes the use of such shares as the underlying investment medium
of Variable Contracts issued or to be issued by LIFE COMPANY.
Termination shall be effective upon such occurrence without notice;
(f) At the option of TRUST if the Variable Contracts cease to qualify as
annuity contracts or life insurance contracts, as applicable, under
the Code, or if TRUST reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall be effective
upon receipt of notice by LIFE COMPANY;
(g) At the option of LIFE COMPANY, upon TRUST's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of LIFE COMPANY within ten days after written notice of
such breach is delivered to TRUST;
(h) At the option of TRUST, upon LIFE COMPANY's breach of any material
provision of this Agreement, which breach has not been cured to the
15
<PAGE>
satisfaction of TRUST within ten days after written notice of such
breach is delivered to LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective immediately upon
such occurrence without notice;
(j) In the event this Agreement is assigned without the prior written
consent of LIFE COMPANY, TRUST, and NB MANAGEMENT, termination shall
be effective immediately upon such occurrence without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to Section
8.2 hereof, TRUST at its option may elect to continue to make available
additional TRUST shares, as provided below, for so long as TRUST desires
pursuant to the terms and conditions of this Agreement, for all Variable
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, if TRUST so elects to make additional TRUST shares available, the
owners of the Existing Contracts or LIFE COMPANY, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in TRUST,
redeem investments in TRUST and/or invest in TRUST upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement pursuant to Section 8.2 hereof, TRUST and NB MANAGEMENT, as
promptly as is practicable under the circumstances, shall notify LIFE COMPANY
whether TRUST elects to continue to make TRUST shares available after such
termination. If TRUST shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect and
thereafter either TRUST or LIFE COMPANY may terminate the Agreement, as so
continued pursuant to this Section 8.3, upon sixty (60) days prior written
notice to the other party.
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts, until thirty (30) days after the LIFE COMPANY shall have
notified TRUST of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
16
<PAGE>
If to TRUST or NB MANAGEMENT:
Neuberger Berman Management Inc.
605 Third Avenue
New York, NY 10158-0006
Attention: Ellen Metzger, General Counsel
If to LIFE COMPANY:
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.
10.5 The parties agree that the assets and liabilities of each Portfolio
are separate and distinct from the assets and liabilities of each other
Portfolio. No Portfolio shall be liable or shall be charged for any debt,
obligation or liability of any other Portfolio. No Trustee, officer or agent
shall be personally liable for such debt, obligation or liability of any
Portfolio.
17
<PAGE>
10.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the National
Association of Securities Dealers, Inc. and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
10.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST
NB MANAGEMENT and the LIFE COMPANY.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
NEUBERGER BERMAN NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST MANAGEMENT INC.
By:________________________________ By:____________________________________
Name: Name:
Title: Title:
[LIFE COMPANY]
By: _______________________________
Name:
Title:
18
<PAGE>
Appendix A
Neuberger Berman Advisers Management Trust Portfolios
Balanced Portfolio
Growth Portfolio
Guardian Portfolio
International Portfolio
Limited Maturity Bond Portfolio
Liquid Asset Portfolio
Mid-Cap Growth Portfolio
Partners Portfolio
Socially Responsive Portfolio
19
<PAGE>
Appendix B
Separate Accounts Selected Portfolios
20
Exhibit (h)(6)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
605 Third Avenue
New York, New York 10158-0180
January 1, 2000
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Dear Ladies and Gentlemen:
Mid-Cap Growth Portfolio and Guardian Portfolio (each a "Portfolio", and
collectively, the "Portfolios") are each a series of Neuberger Berman Advisers
Management Trust, a Delaware business trust ("Trust").
You hereby agree during the period from January 1, 2000 through April 30,
2001 ("Limitation Period"), to pay each Portfolio's operating expenses and, to
the extent applicable, its pro rata share of its corresponding master series'
total operating expenses (excluding interest, taxes, brokerage commissions, and
extraordinary expenses of the Portfolio) ("Operating Expenses") which exceed, in
the aggregate, the rate of 1.00% per annum of the Portfolio's average daily net
assets ("Expense Limitation").
Each Portfolio in turn agrees to reimburse you through December 31, 2004
("Reimbursement Period"), out of assets belonging to that Portfolio for any
Operating Expenses of the Portfolio in excess of the Expense Limitation paid or
assumed by you during the Limitation Period, provided that you would not be
entitled to reimbursement for any amount by which such reimbursement would cause
Operating Expenses in respect of the Reimbursement Period to exceed the Expense
Limitation, and provided further that no amount will be reimbursed by the
Portfolio more than three years after the year in which it was incurred by you.
The Trust agrees to furnish or otherwise make available to you such copies of
its financial statements, reports, and other information relating to its
business and affairs as you may, at any time or from time to time, reasonably
request in connection with this agreement.
You understand that you shall look only to the assets of the respective
Portfolio for performance of this agreement and for payment of any claim you may
have hereunder, 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 performed principally in the State of New
York, and except insofar as the Investment Company Act of 1940, as amended, or
other federal laws and regulations may be controlling, this agreement shall be
governed by, and construed and enforced
<PAGE>
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 you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST
on behalf of Mid-Cap Growth Portfolio
and Guardian Portfolio
By:_____________________________________
Title:__________________________________
The foregoing agreement is hereby
accepted as of January 1, 2000
NEUBERGER BERMAN MANAGEMENT INC.
By:___________________________________
Title:________________________________
Exhibit (h)(8)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
605 Third Avenue
New York, New York 10158-0180
May 1, 2000
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Dear Ladies and Gentlemen:
Socially Responsive Portfolio ("Portfolio") is a series of Neuberger
Berman Advisers Management Trust, a Delaware business trust ("Trust").
You hereby agree during the period from May 1, 2000 through April 30, 2001
("Limitation Period"), to pay the Portfolio's operating expenses (excluding
interest, taxes, brokerage commissions, and extraordinary expenses of the
Portfolio) ("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 Portfolio in turn agrees to reimburse you through December 31, 2004
("Reimbursement Period"), out of assets belonging to the Portfolio for any
Operating Expenses of the Portfolio in excess of the Expense Limitation paid or
assumed by you during the Limitation Period, provided that you would not be
entitled to reimbursement for any amount by which such reimbursement would cause
Operating Expenses in respect of the Reimbursement Period to exceed the Expense
Limitation, and provided further that no amount will be reimbursed by the
Portfolio more than three years after the year in which it was incurred by you.
The Trust agrees to furnish or otherwise make available to you such copies of
its financial statements, reports, and other information relating to its
business and affairs as you may, at any time or from time to time, reasonably
request in connection with this agreement.
You understand that you shall look only to the assets of the Portfolio for
performance of this agreement and for payment of any claim you may have
hereunder, 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 performed principally in the State of New
York, and except insofar as the Investment Company Act of 1940, as amended, 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.
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST
on behalf of Socially Responsive
Portfolio
By:_________________________________
Title:______________________________
The foregoing agreement is hereby
accepted as of May 1, 2000
NEUBERGER BERMAN MANAGEMENT INC.
By:_________________________________
Title:______________________________
Exhibit (h)(10)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
605 Third Avenue
New York, New York 10158-0180
May 1, 2000
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Dear Ladies and Gentlemen:
Balanced Portfolio, Growth Portfolio, Limited Maturity Bond Portfolio,
Liquid Asset Portfolio, and Partners Portfolio (each a "Portfolio", and
collectively, the "Portfolios") are each a series of Neuberger Berman Advisers
Management Trust, a Delaware business trust ("Trust").
You hereby agree during the period from May 1, 2000 through April 30, 2001
("Limitation Period"), to pay each Portfolio's operating expenses (excluding
compensation to you (with respect to all Portfolios except Liquid Asset
Portfolio), interest, taxes, brokerage commissions, and extraordinary expenses
of the Portfolio) ("Operating Expenses") which exceed, in the aggregate, the
rate of 1.00% per annum of the Portfolio's average daily net assets.
The Trust agrees to furnish or otherwise make available to you such copies
of its financial statements, reports, and other information relating to its
business and affairs as you may, at any time or from time to time, reasonably
request in connection with this agreement.
This agreement is made and to be performed principally in the State of New
York, and except insofar as the Investment Company Act of 1940, as amended, 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.
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST
on behalf of the Balanced Portfolio,
Growth Portfolio, Limited Maturity Bond
Portfolio, Liquid Asset Portfolio,
and Partners Portfolio
By:_________________________________
Title:______________________________
The foregoing agreement is hereby
accepted as of May 1, 2000
NEUBERGER BERMAN MANAGEMENT INC.
By:_________________________________
Title:______________________________
Exhibit(h)(11)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
605 Third Avenue
New York, New York 10158-0180
May 1, 2000
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Dear Ladies and Gentlemen:
International Portfolio ("Portfolio") is a series of Neuberger Berman
Advisers Management Trust, a Delaware business trust ("Trust").
You hereby agree during the period from May 1, 2000 through April 30, 2001
("Limitation Period"), to pay the Portfolio's operating expenses (excluding
interest, taxes, brokerage commissions, and extraordinary expenses of the
Portfolio) ("Operating Expenses") which exceed, in the aggregate, the rate of
1.70% per annum of the Portfolio's average daily net assets ("Expense
Limitation").
The Portfolio in turn agrees to reimburse you through December 31, 2004
("Reimbursement Period"), out of assets belonging to the Portfolio for any
Operating Expenses of the Portfolio in excess of the Expense Limitation paid or
assumed by you during the Limitation Period, provided that you would not be
entitled to reimbursement for any amount by which such reimbursement would cause
Operating Expenses in respect of the Reimbursement Period to exceed the Expense
Limitation, and provided further that no amount will be reimbursed by the
Portfolio more than three years after the year in which it was incurred by you.
The Trust agrees to furnish or otherwise make available to you such copies of
its financial statements, reports, and other information relating to its
business and affairs as you may, at any time or from time to time, reasonably
request in connect in with this agreement.
You understand that you shall look only to the assets of the Portfolio for
performance of this agreement and for payment of any claim you may have
hereunder, 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 performed principally in the State of New
York, and except insofar as the Investment Company Act of 1940, as amended, 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.
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST
on behalf of International Portfolio
By: ____________________________________
Title: _________________________________
The foregoing agreement is hereby
accepted as of May 1, 2000
NEUBERGER BERMAN MANAGEMENT INC.
By:_____________________________________
Title:__________________________________
Exhibit (i)(2)
[Letterhead of Dechert Price & Rhoads]
April 27, 2000
Neuberger Berman Advisers Management Trust
605 Third Avenue
New York, New York 10158
Re: Neuberger Berman Advisers Management Trust
(File Nos. 2-88566 and 811-4255)
Ladies and Gentlemen:
We hereby consent to the incorporation by reference to our opinion as
an exhibit to Post-Effective Amendment No. 32 to the Registration Statement of
Neuberger Berman Advisers Management Trust, and to all references to our firm
therein. In giving such consent, however, we do not admit that we are within the
category of persons whose consent is required by Section 7 of the Securities Act
of 1933, as amended, and the rules and regulations thereunder.
Very truly yours,
Dechert Price & Rhoads
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in each Prospectus and "Reports to Shareholders", "Independent
Auditors" and "Financial Statements" in the Statement of Additional Information
in Post-Effective Amendment Number 32 to the Registration Statement (Form N-1A
No. 2-88566) of Neuberger Berman Advisers Management Trust, and to the
incorporation by reference of our reports dated January 28, 2000 on Neuberger
Berman Advisers Management Trust (comprised of, respectively, the Balanced
Portfolio, Growth Portfolio, Guardian Portfolio, Limited Maturity Bond
Portfolio, Liquid Asset Portfolio, Mid-Cap Growth Portfolio, Partners Portfolio
and Socially Responsive Portfolio), and on Advisers Managers Trust (comprised
of, respectively, AMT Balanced Investments, AMT Growth Investments, AMT Guardian
Investments, AMT Limited Maturity Bond Investments, AMT Liquid Asset
Investments, AMT Mid-Cap Growth Investments, AMT Partners Investments and AMT
Socially Responsive Investments), included in the 1999 Annual Report to
Shareholders of Neuberger Berman Advisers Management Trust.
ERNST & YOUNG LLP
Boston, Massachusetts
April 25, 2000
Exhibit (p)
CODE OF ETHICS - AMENDED AND RESTATED {PRIVATE}
This Code of Ethics ("Code") is adopted by:
Neuberger Berman Advisers Management Trust, a registered investment
company ("Trust") on behalf of its series (each series of which is
referred to as a "Fund")
Neuberger Berman Management Inc., the administrator and distributor of
Fund shares ("NB Management")
pursuant to Rule 17j-1 promulgated by the Securities and Exchange Commission
(the "Rule") under the Investment Company Act of 1940.
Statement of General Principles
This Code of Ethics is adopted in recognition of the general fiduciary
principles that govern personal investment activities of all individuals
associated with the Trust, Fund, NB Management, and NB.
It is the duty at all times to place the interests of Fund shareholders
first. Priority must be given to Fund trades over personal securities
trades.
All personal securities transactions must be conducted consistent with
this Code of Ethics and in such a manner as to avoid any actual or
potential conflict of interest or any abuse of an individual's position of
trust and responsibility.
Individuals should not take advantage of their positions.
<PAGE>
TABLE OF CONTENTS
1. General Prohibitions ................................................. 4
2. Definitions .......................................................... 5
Access Person ........................................................ 5
Advisory Person ...................................................... 5
Beneficial Interest .................................................. 5
Blind Trust .......................................................... 6
Day .................................................................. 6
Immediate Family ..................................................... 6
Investment Company ................................................... 6
Investment Personnel ................................................. 6
Legal and Compliance Department ...................................... 6
Portfolio Manager .................................................... 7
Related Issuer ....................................................... 7
Security ............................................................. 7
Trading Desk ......................................................... 7
3. Required Compliance Procedures ....................................... 8
3.1 All Securities Transactions through Neuberger Berman ............. 8
3.2 Preclearance of Securities Transactions by Access Persons ........ 8
3.3 Post-Trade Monitoring of Precleared Transactions ................. 9
3.4 Disclosure of Personal Holdings .................................. 10
3.5 Certification of Compliance with Code of Ethics .................. 10
4. Restrictions and Disclosure Requirements ............................. 11
4.1 Initial Public Offerings ......................................... 11
4.2 Private Placements ............................................... 11
4.3 Related Issuers .................................................. 11
4.4 Blackout Periods ................................................. 12
4.5 Same Day Price Switch ............................................ 13
4.6 Short-Term Trading Profits ....................................... 15
4.7 Gifts ............................................................ 16
4.8 Service as Director of Publicly Traded Companies ................. 16
5. Procedures with Regard to Dissemination of Information ............... 17
<PAGE>
6. Reporting by Access Persons ......................................... 18
6.1 General Requirement ............................................. 18
6.2 Disinterested Trustees .......................................... 18
6.3 Contents ........................................................ 18
7. Code of Ethics Board ................................................ 20
8. Annual Report to Board of Trustees .................................. 21
9. Implementation ...................................................... 22
9.1 Forms ........................................................... 22
9.2 Exceptions ...................................................... 22
<PAGE>
1. General Prohibitions
No individual associated with the Trust, Fund, NB Management, or NB, in
connection with the purchase or sale, directly or indirectly, by such person of
a security held or to be acquired by such Trust or Fund, shall:
Employ any device, scheme or artifice to defraud such Trust or Fund;
Make to such Trust or Fund any untrue statement of a material fact or omit
to state to such Trust or Fund a material fact necessary in order to make
the statements made, in light of the circumstances under which they are
made, not misleading;
Engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any such Trust or Fund;
Engage in any manipulative practice with respect to such Trust or Fund;
Engage in any transaction in a security while in possession of material
nonpublic information regarding the security or the issuer of the
security; or
Engage in any transaction intended to raise, lower, or maintain the price
of any security or to create a false appearance of active trading.
-4-
<PAGE>
2. Definitions
The following words have the following meanings, regardless of whether such
terms are capitalized or not in this Code:
Access Person - any principal or employee of NB who is an Advisory Person
and all Trustees, directors, officers, or Advisory Persons of the Trust or NB
Management. The determination as to whether an individual is an Access Person
shall be made by the Legal and Compliance Department.
Advisory Person - any employee of the Fund or NB Management (or of any
company in a control relationship to NB, the Fund, or NB Management) or any
employee or principal of NB who, in connection with his or her regular functions
or duties, makes, participates in, or obtains information regarding the purchase
or sale of a security by the Fund, or whose functions relate to the making of
any recommendations with respect to such purchases or sales.
Beneficial Interest - a person has a Beneficial Interest in an account in
which he or she may profit or share in the profit from transactions. Without
limiting the foregoing, a person has a Beneficial Interest when the securities
in the account are held:
(i) in his or her name;
(ii) in the name of any of his or her Immediate Family;
(iii) in his or her name as trustee for himself or herself or for his or
her Immediate Family;
(iv) in a trust in which he or she has a Beneficial Interest or is the
settlor with a power to revoke;
(v) by another person and he or she has a contract or an understanding
with such person that the securities held in that person's name
are for his or her benefit;
(vi) in the form of a right to acquisition of such security through the
exercise of warrants, options, rights, or conversion rights;
(vii) by a partnership of which he or she is a member;
(viii) by a corporation which he or she uses as a personal trading
medium;
(ix) by a holding company which he or she controls; or
(x) any other relationship in which a person would have beneficial
ownership under
-5-
<PAGE>
Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations thereunder, except that the determination of direct or
indirect Beneficial Interest shall apply to all securities which an
Access Person has or acquires.
Any person who wishes to disclaim a Beneficial Interest in any securities must
submit a written request to the Legal and Compliance Department explaining the
reasons therefor. Any disclaimers granted by the Legal and Compliance Department
must be made in writing. Without limiting the foregoing, if a disclaimer is
granted to any person with respect to shares held by a member or members of his
or her Immediate Family, the provisions of this Code of Ethics applicable to
such person shall not apply to any member or members of his or her Immediate
Family for which such disclaimer was granted, except with respect to
requirements specifically applicable to members of a person's Immediate Family.
Blind Trust - a trust in which an Access Person or employee has Beneficial
Interest or is the settlor with a power to revoke, with respect to which the
Legal and Compliance Department has determined that such Access Person or
employee has no direct or indirect influence or control over the selection or
disposition of securities and no knowledge of transactions therein, provided,
however, that direct or indirect influence or control of such trust is held by a
person or entity not associated with Neuberger Berman or any affiliate of
Neuberger Berman and not a relative of such Access Person or employee
Day - a calendar day
Immediate Family - any of the following relatives sharing the same
household with an individual: child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships
Investment Company - each registered investment company and series thereof
for which NB Management is the investment manager, investment adviser,
sub-adviser, administrator or distributor, or for which NB is the investment
adviser or sub-adviser.
Investment Personnel - Portfolio Managers, and Access Persons who, in
connection with their regular functions or duties, provide information and
advice to a Portfolio Manager or who help execute a Portfolio Manager's
decisions. Each member of this category is individually referred to as an
Investment Person. The determination as to whether an individual is an
Investment Person shall be made by the Legal and Compliance Department.
Legal and Compliance Department - NB Legal and Compliance Department
Portfolio Manager - an Access Person who has or shares principal
day-to-day responsibility for managing the portfolio of any Fund. The
determination as to whether an individual is a Portfolio
-6-
<PAGE>
Manager shall be made by the Legal and Compliance Department.
Related Issuer - an issuer with respect to which an Investment Person or
his or her Immediate Family: (i) has a business relationship with such issuer or
any promoter, underwriter, officer, director, or employee of such issuer; or
(ii) is related to any officer, director or employee of such issuer.
Security - any option, stock or option thereon, instrument, bond,
debenture, pre-organization certificate, investment contract, any other interest
commonly known as a security, and any security or instrument related to, but not
necessarily the same as, those held or to be acquired by a Fund; provided,
however, that the following shall not be considered a "security": securities
issued by the United States Government, bankers' acceptances, bank certificates
of deposit, commercial paper, shares of registered open-end investment
companies, commodities, futures, and options on futures.
Trading Desk - NB Trading Desk
-7-
<PAGE>
3. Required Compliance Procedures
3.1 All Securities Transactions through Neuberger Berman.
(a) Every Access Person, and every employee of the Fund, NB Management, or
NB and principal of NB is required to execute through Neuberger Berman ("NB")
all transactions in securities held in his or her own name or in which he or she
has a Beneficial Interest; provided, however, that this requirement shall not
apply to any Access Person who is a disinterested Trustee of the Trust. Every
Portfolio Manager is also required to provide the Legal and Compliance
Department with duplicate copies of confirmations of all transactions in
securities held in the name of members of his or her Immediate Family or in
which such members have a Beneficial Interest.
(b) Exceptions will only be granted upon a showing of extenuating
circumstances. Any individual seeking an exception to this policy must submit a
written request to the Legal and Compliance Department explaining the reasons
therefor. Any exceptions granted must be made in writing.
(c) Any individual granted an exception is required to direct his or her
broker, adviser or trustee, as the case may be, to supply to the Legal and
Compliance Department, on a timely basis, duplicate copies of confirmations of
all personal securities transactions and copies of periodic statements for all
securities accounts in his or her own name or in which he or she has a
Beneficial Interest.
(d) Individuals are not required to execute through NB transactions in
which they are establishing a dividend reinvestment plan directly through an
issuer. However, individuals must obtain written approval from the Legal and
Compliance Department prior to establishing any such plan and supply to the
Legal and Compliance Department, on a timely basis, duplicate copies of all
confirmations relating to the plan.
3.2 Preclearance of Securities Transactions by Access Persons.
(a) Every Access Person must obtain prior approval from the Trading Desk
before executing any transaction in securities held in his or her own name or in
which he or she has a Beneficial Interest. Before executing any such
transaction, the Trading Desk shall determine that:
(i) No Investment Company has a pending "buy" or "sell" order in that
security;
(ii) The security does not appear on any "restricted" list of NB; and
(iii) Such transaction is not short selling or option trading that is
economically opposite any pending transaction for any Investment
Company.
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(b) The following securities are exempt from preclearance requirements:
(i) Securities transactions effected in blind trusts
(ii) The acquisition of securities through stock dividends, dividend
reinvestments, stock splits, reverse stock splits, mergers,
consolidations, spin-offs, or other similar corporate
reorganizations or distributions generally applicable to all holders
of the same class of securities
(iii) The acquisition of securities through the exercise of rights issued
by an issuer pro rata to all holders of a class of securities, to
the extent the rights were acquired in the issue, and sales of such
rights so acquired
(iv) Repurchase agreements
(v) Options on the Standard & Poor's "500" Composite Stock Price Index
(vi) Other securities that may from time to time be so designated in
writing by the Code of Ethics Board
(c) A disinterested Trustee of the Trust must obtain prior written
approval from the Legal and Compliance Department regarding a transaction in a
security held in his or her own name or in which he or she has a Beneficial
Interest only if such Trustee, at the time of that transaction, knew or, in the
ordinary course of fulfilling his or her official duties as a Trustee of the
Trust, should have known about any security that, during the 15-day period
immediately before or after the date of the transaction by that Trustee, was
purchased or sold by a Fund or was being considered by NB Management for
purchase or sale by a Fund.
(d) Obtaining preclearance approval does not constitute a waiver of any
prohibitions, restrictions, or disclosure requirements in this Code of Ethics.
3.3 Post-Trade Monitoring of Precleared Transactions.
After the Trading Desk has granted preclearance to an Access Person with
respect to any personal securities transaction, the investment activity of such
Access Person shall be monitored by the Legal and Compliance Department to
ascertain that such activity conforms to the preclearance so granted and the
provisions of this Code.
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3.4 Disclosure of Personal Holdings.
All Access Persons (except disinterested Trustees of the Trust) are
required to disclose all holdings in securities held in their own names or in
which they have a Beneficial Interest to the Legal and Compliance Department
upon commencement of employment and thereafter on an annual basis.
3.5 Certification of Compliance With Code of Ethics.
All Access Persons are required to certify annually in writing that they
have:
(a) read and understand the Code of Ethics and recognize that they are
subject thereto;
(b) complied with the requirements of the Code of Ethics;
(c) disclosed or reported all personal securities transactions required to
be disclosed or reported pursuant to the requirements of the Code; and
(d) with respect to any blind trusts in which such person has a Beneficial
Interest, that such person has no direct or indirect influence or control and no
knowledge of any transactions therein.
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4. Restrictions and Disclosure Requirements
4.1 Initial Public Offerings.
All Investment Personnel are prohibited from acquiring a Beneficial
Interest in any securities in an initial public offering, in order to preclude
any possibility of their profiting improperly from their positions on behalf of
a Fund. No member of an Immediate Family of an Investment Person may acquire a
Beneficial Interest in an initial public offering without the prior written
consent of the Legal and Compliance Department.
4.2 Private Placements.
(a) No Investment Person or member of his or her Immediate Family may
acquire a Beneficial Interest in any securities in private placements without
prior written approval by the Legal and Compliance Department.
(b) Prior approval shall take into account, among other factors, whether
the investment opportunity should be reserved for a Trust or Fund and its
shareholders and whether the opportunity is being offered to an individual by
virtue of his or her position or relationship to the Trust or Fund.
(c) An Investment Person who has (or a member of whose Immediate Family
has) acquired a Beneficial Interest in securities in a private placement is
required to disclose that investment to the Portfolio Manager when such
Investment Person plays a part in any subsequent consideration of an investment
in the issuer for any Trust or Fund; provided, however, that if any such
Investment Person is the Portfolio Manager, such Investment Person shall make
such disclosure to the Legal and Compliance Department. In any such
circumstances, the decision to purchase securities of the issuer for a Trust or
Fund is subject to an independent review by Investment Personnel with no
personal interest in the issuer. Such independent review shall be made in
writing and furnished to the Legal and Compliance Department.
4.3 Related Issuers.
Investment Personnel are required to disclose to the Portfolio Manager
when they play a part in any consideration of an investment by a Trust or Fund
in a Related Issuer; provided, however, that if any such Investment Person is
the Portfolio Manager, such Investment Person shall make such disclosure to the
Legal and Compliance Department. In any such circumstances, the decision to
purchase securities of the Related Issuer for a Trust or Fund is subject to an
independent review by Investment Personnel with no personal interest in the
Related Issuer. Such independent review shall be made in writing and furnished
to the Legal and Compliance Department.
4.4 Blackout Periods.
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(a) No Access Person may execute a securities transaction in securities
held in his or her own name or in which he or she has a Beneficial Interest on a
day during which any Investment Company has a pending "buy" or "sell" order in
that same security until that order is executed or withdrawn; provided, however,
that this prohibition shall apply to a disinterested Trustee only if such
Trustee, at the time of that transaction, knew or, in the ordinary course of
fulfilling his or her official duties as a Trustee of the Trust, should have
known about any security that, during the 15-day period immediately preceding
the date of the transaction by that Trustee, was purchased or sold by a Fund or
was being considered by NB Management for purchase or sale by a Fund.
(b) No Portfolio Manager or member of his or her Immediate Family may buy
or sell a security held in his or her own name or in which he or she has a
Beneficial Interest within seven (7) Days before or after a Fund that such
Portfolio Manager manages trades in that security, provided, however, that this
prohibition shall not apply to:
(i) Securities transactions effected in blind trusts
(ii) Securities transactions that are non-volitional on the part of
either the Access Person or the Fund
(iii) The acquisition of securities through stock dividends, dividend
reinvestments, stock splits, reverse stock splits, mergers,
consolidations, spin-offs, or other similar corporate
reorganizations or distributions generally applicable to all holders
of the same class of securities
(iv) The acquisition of securities through the exercise of rights issued
by an issuer pro rata to all holders of a class of securities, to
the extent the rights were acquired in the issue, and sales of such
rights so acquired
(v) Repurchase agreements
(vi) Options on the Standard & Poor's "500" Composite Stock Price Index
(vii) Other securities that may from time to time be so designated in
writing by the Code of Ethics Board
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(c) Any securities position established in violation of Section 4.4(b)
shall be closed out as soon as possible consistent with applicable law. Any
profits on trades within the proscribed periods shall be disgorged to the Fund.
(d) The foregoing blackout periods should not operate to the detriment of
any Investment Company. Without limiting the scope or meaning of this statement,
the following procedure is to be implemented under extraordinary situations:
(i) If a Portfolio Manager of a Fund or member of his or her Immediate
Family has executed a transaction in a security and within seven (7)
Days thereafter such security is considered for purchase or sale by
such Fund, such Portfolio Manager shall submit a written memorandum
to the Legal and Compliance Department prior to the entering of the
purchase or sale order for the Fund. Such memorandum shall describe
the circumstances underlying the consideration of such transaction
for the Fund.
(ii) Based on such memorandum and other factors it deems relevant under
the specific circumstances, the Legal and Compliance Department
shall have authority to determine that the prior transaction by the
Portfolio Manager or member of his or her Immediate Family shall not
be considered a violation of the provisions of paragraph (b) of this
section.
(iii) The Legal and Compliance Department shall make a written record of
any determination made under paragraph (d)(ii) of this section,
including the reasons therefor. The Legal and Compliance Department
shall maintain records of any such memoranda and determinations and
provide copies thereof as part of its monthly reports to the Board
of Trustees of the Trust.
4.5 Same Day Price Switch.
(a) If any employee of a Fund, NB Management, or any employee or principal
of NB purchases a security (other than a fixed income security) held, or by
reason of such transaction held, in his or her own name or in which he or she
has a Beneficial Interest and subsequent thereto a Fund purchases the same
security during the same day, then, to the extent that the price paid per share
by the Fund for such purchase is less favorable than the price paid per share by
such principal or employee, the Fund shall have the benefit of the more
favorable price per share.
(b) If any such principal or employee sells a security (other than a fixed
income security) held in his or her own name or in which he or she has a
Beneficial Interest and subsequent thereto a Fund sells the same security during
the same day, then, to the extent that the price per share received by the Fund
for such sale is less favorable than the price per share received by the
principal or employee, the Fund shall have the benefit of the more favorable
price per share.
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(c) An amount of money necessary to effectuate the price adjustment shall
be transferred from the account of the principal or employee subject to the
price adjustment policies, to the Fund's account. The price adjustment shall be
limited to the number of shares purchased or sold by the principal or employee
or the number of shares purchased or sold by the Fund, whichever is smaller.
(d) Notwithstanding the foregoing, price switching shall not apply to:
(i) Securities transactions effected in blind trusts
(ii) Securities transactions that are non-volitional on the part of
either the Access Person or the Fund
(iii) The acquisition of securities through stock dividends, dividend
reinvestments, stock splits, reverse stock splits, mergers,
consolidations, spin-offs, or other similar corporate
reorganizations or distributions generally applicable to all
holders of the same class of securities
(iv) The acquisition of securities through the exercise of rights
issued by an issuer pro rata to all holders of a class of
securities, to the extent the rights were acquired in the issue,
and sales of such rights so acquired
(v) Repurchase agreements
(vi) Options on the Standard & Poor's "500" Composite Stock Price Index
(vii) Transactions in which the adjustment resulting from the price
switch is less than Five Hundred Dollars ($ 500.00)
(viii) Transactions arising through arbitrage, market making activities
or hedged options trading
(ix) Transactions in the NB ERISA Profit Sharing and Retirement Plan
(x) Transactions involving odd lots
(xi) Other securities that may from time to time be so designated in
writing by the Code of Ethics Board
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4.6 Short-Term Trading Profits.
(a) No Investment Person may profit in the purchase and sale, or sale and
purchase, of the same (or equivalent) securities held in his or her own name or
in which he or she has a Beneficial Interest within sixty (60) Days, provided,
however, that this prohibition shall not apply to:
(i) Any security that was neither held, purchased, nor sold by any
Investment Company during such sixty (60) Day period
(ii) Securities transactions effected in blind trusts
(iii) Securities transactions that are non-volitional on the part of
either the Access Person or the Fund
(iv) The acquisition of securities through stock dividends, dividend
reinvestments, stock splits, reverse stock splits, mergers,
consolidations, spin-offs, or other similar corporate
reorganizations or distributions generally applicable to all
holders of the same class of securities
(v) The acquisition of securities through the exercise of rights issued
by an issuer pro rata to all holders of a class of securities, to
the extent the rights were acquired in the issue, and sales of such
rights so acquired
(vi) Repurchase agreements
(vii) Options on the Standard & Poor's "500" Composite Stock Price Index
(viii) Other securities that may from time to time be so designated in
writing by the Code of Ethics Board
(b) Any profits on trades within the proscribed periods shall be disgorged
to a charity to be determined by the Legal and Compliance Department.
(c) In determining the applicability of this section, determinations shall
be made based upon a last-in, first-out ("LIFO") calculation; provided, however,
that such determinations shall be solely for purposes of this Code of Ethics and
shall not have any applicability for tax or other purposes.
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4.7 Gifts.
All Access Persons and employees are prohibited from giving or receiving
any gift or other thing of more than One Hundred Dollars ($ 100) in value to or
from any person or entity that does business with or on behalf of the Fund in
any one year.
4.8 Service as Director of Publicly Traded Companies.
Investment Personnel are prohibited from serving on the Boards of
Directors of publicly traded companies.
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5. Procedures with Regard to Dissemination of Information
(a) NB, NB Management, and the Trust, and their officers, principals and
employees, shall not disclose to any disinterested Trustee of the Trust
information regarding the consideration or decision to purchase or sell a
particular security when it is contemplated that such action will be taken
within the next 15 days, unless it is
(i) requested in writing by a disinterested Trustee of the Trust or
requested through a formal action of the Board of the Trust or any committee
thereof;
(ii) given because it is determined that the disinterested Trustee should
have the information so that he or she may effectively carry out his or her
duties; or
(iii) given so that NB or NB Management may carry out its duties as
administrator or sub-adviser of a Fund.
(b) If any information regarding transactions contemplated by the Fund is
given to a disinterested Trustee, such disinterested Trustee shall be advised at
that time that he or she and any other Fund Trustee receiving such information
will be considered a Portfolio Manager with respect to any security held or to
be acquired by the Fund, as indicated in the information which has been
disclosed, for the next succeeding 22 days, and NB Management shall so notify
the Legal and Compliance Department. At such time, the Trustee shall be reminded
by NB Management of the provisions of Sections 3.2, 4.4, and 6.2 of this Code.
(c) Subject to Sections 5(a) and 5(b), Access Persons and principals and
employees of NB Management, NB, or the Trust are prohibited from revealing
information relating to current or anticipated investment intentions, portfolio
transactions or activities of Funds except to persons whose responsibilities
require knowledge of the information.
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6. Reporting by Access Persons
6.1 General Requirement.
Every Access Person shall report, or cause to be reported, to the Trust
and Legal and Compliance Department the information described in Section 6.3
with respect to transactions in any security in which such Access Person has, or
by reason of such transaction acquires, any direct or indirect Beneficial
Interest; provided, however, that no report is required with respect to
transactions where such report would duplicate information recorded by NB or NB
Management pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the Investment
Advisers Act of 1940. For purposes of the foregoing (b), the Legal and
Compliance Department maintains (i) electronic records of all securities
transactions effected through NB, and (ii) copies of any duplicate confirmations
that have been provided to the Legal and Compliance Department under this Code
of Ethics with respect to securities transactions that, pursuant to exceptions
granted by the Legal and Compliance Department, have not been effected through
NB; accordingly, no report is required with respect to such transactions.
6.2 Disinterested Trustees.
(a) A disinterested Trustee of the Trust need only report a transaction in
a security if such Trustee, at the time of that transaction, knew or, in the
ordinary course of fulfilling his or her official duties as a Trustee, should
have known that, during the 15-day period immediately preceding the date of the
transaction by that Trustee, such security was purchased or sold by a Fund or
was being considered for purchase or sale by NB Management.
(b) Notwithstanding the foregoing, disinterested Trustees are required to
report to the Legal and Compliance Department in writing whenever they own
individually more than 1/2 of 1% of the outstanding shares of any issuer,
together with the number of shares so owned.
6.3 Contents.
Every report shall be made not later than 10 days after the end of the
calendar quarter in which the transaction to which the report relates was
effected, and shall contain the following information:
(i) The date of the transaction, the title and the number of shares,
and the principal amount of each security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii) The price at which the transaction was effected; and
(iv) The name of the broker, dealer or bank with or through whom the
transaction was
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effected.
Unless otherwise stated, no report shall be construed as an admission by the
person making such report that he or she has any direct or indirect Beneficial
Interest in the security to which the report relates.
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7. Code of Ethics Board.
A Code of Ethics Board shall be created by NB Management and the Trust,
composed of three members, two of whom shall be disinterested Trustees selected
by the Board of Trustees of the Trust and one of whom shall be selected by NB
Management.
Any person who has knowledge of any violation of this Code shall report
said violation to the Code of Ethics Board.
The Code of Ethics Board shall consult regularly and meet no less
frequently than annually with the Legal and Compliance Department regarding the
implementation of this Code. The Legal and Compliance Department shall provide
the Code of Ethics Board with such reports as are required herein or as are
requested by the Code of Ethics Board.
A monthly report shall be provided to the Trustees of the Trust certifying
that except as specifically disclosed to the Code of Ethics Board, the Legal and
Compliance Department knows of no violation of this Code. A representative of
the Legal and Compliance Department shall attend all regular meetings of the
Trustees to report on the implementation of this Code.
NB Management, NB, and the Trustees of the Trust shall have authority to
impose sanctions for violations of this Code. The Code of Ethics Board shall
make recommendations regarding sanctions to be imposed on Access Persons who
violate this Code. Such recommendations may include a letter of censure,
suspension or termination of the employment of the violator, forfeiture of
profits, forfeiture of personal trading privileges, forfeiture of gifts, or any
other penalty the Code of Ethics Board deems to be appropriate. All such
recommendations shall be submitted to NB Management and the Board of Trustees of
the Trust.
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8. Annual Report to Board of Trustees.
NB Management shall prepare an annual report to the Board of Trustees of the
Trust that:
(i) summarizes existing procedures concerning personal investing and any
changes in the procedures made during the past year;
(ii) identifies any violations requiring significant remedial action
during the past year; and
(iii) identifies any recommended changes in existing restrictions or
procedures based upon the Fund's experience under the Code of
Ethics, evolving industry practices, or developments in applicable
laws or regulations.
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9. Implementation.
9.1 Forms.
The Legal and Compliance Department is authorized, with the advice of
counsel, to prepare written forms for use in implementing this Code. Such forms
shall be attached as an Appendix to this Code and shall be disseminated to all
individuals subject to the Code.
9.2 Exceptions.
Exceptions to the requirements of this Code shall rarely, if ever, be
granted. However, the Legal and Compliance Department shall have authority to
grant exceptions on a case-by-case basis. Any exceptions granted must be in
writing and reported to the Code of Ethics Board.
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