Edgar Filing: NEUBERGER BERMAN INC

Filed by Neuberger Berman Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934

Subject Company: Neuberger Berman Inc.
Commission File No. 001-15361

Date: July 22, 2003

The attached documents contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) statements about the benefits of
the acquisition of Neuberger Berman by Lehman Brothers, including financial and
operating results, synergy benefits and any accretion to reported earnings that
may be realized from the acquisition; Neuberger Berman's and Lehman Brothers'
plans, objectives, expectations and intentions and other statements contained in
this presentation that are not historical facts; and (ii) other statements
identified by words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" or words of similar meaning. These
forward-looking statements are based upon management's current beliefs or
expectations and are inherently subject to significant business, economic and
competitive uncertainties and contingencies and third-party approvals, many of
which are beyond our control. The following factors, among others, could cause
actual results to differ materially from the those described in the
forward-looking statements: (1) whether the stockholders of Neuberger Berman
approve the proposed transaction; (2) the satisfaction of the other conditions
specified in the merger agreement, including, without limitation, the receipt of
required governmental and other third-party approvals of the proposed
transaction; (3) the ability to successfully combine the businesses of Lehman
Brothers and Neuberger Berman; (4) the realization of revenue and cost synergy
benefits from the proposed transaction; (5) operating costs, customer loss and
business disruption following the merger, including adverse effects on
relationships with employees; (6) changes in the stock market and interest rate
environment that affect revenues; and (7) competition. Neuberger Berman and
Lehman Brothers do not undertake any obligation to update any forward-looking
statement to reflect circumstances or events that occur after the date such
forward-looking statement is made.

The attached documents shall not constitute an offer of any securities for sale.
The proposed transaction will be submitted to Neuberger Berman's stockholders
for their consideration. Lehman Brothers and Neuberger Berman will file a
registration statement, a proxy statement/prospectus and other relevant
documents concerning the proposed transaction with the SEC. Stockholders of
Neuberger Berman are urged to read the registration statement and the proxy
statement/prospectus and any other relevant documents filed with the SEC when
they become available, as well as any amendments or supplements to those
documents, because they will contain important information. Stockholders of
Neuberger Berman can obtain more information about the proposed transaction by
reviewing the Form 8-K filed by Neuberger Berman in connection with the
announcement of the transaction, and any other relevant documents filed with the
SEC when they become available.

You will be able to obtain a free copy of the proxy statement/prospectus, as
well as other filings

containing information about Neuberger Berman and Lehman Brothers, at the SEC's
Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and
the SEC filings that will be incorporated by reference in the proxy
statement/prospectus can be obtained, without charge, by directing a request to
Neuberger Berman, Corporate Communications, 605 Third Avenue, New York, New York
10158 ((212) 476-8125) or to Lehman Brothers, Investor Relations, 745 Seventh
Avenue, New York, New York 10019 ((212) 526-3267).

Neuberger Berman, Lehman Brothers and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Neuberger Berman in connection with the proposed
transaction. Information about directors and executive officers of Neuberger
Berman and their ownership of Neuberger Berman common stock is set forth in the
proxy statement on Schedule 14A, filed on April 16, 2003, for Neuberger Berman's
2003 annual meeting of stockholders. Information about the directors and
executive officers of Lehman Brothers is set forth in the proxy statement on
Schedule 14A, filed on February 28, 2003, for Lehman Brothers' 2003 annual
meeting of stockholders. Additional information regarding participants in the
proxy solicitation may be obtained by reading the proxy statement/prospectus
regarding the proposed transaction when it becomes available.

This filing relates to the proposed merger pursuant to the terms of the
Agreement and Plan of Merger, dated as of July 21, 2003 (the "Merger
Agreement"), among Lehman Brothers Holdings Inc., Ruby Acquisition Company and
Neuberger Berman Inc. The Merger Agreement was filed by Neuberger Berman under
cover of Form 8-K today and is incorporated by reference into this filing.

Included in this filing are the following:

. Joint Press Release issued on July 22, 2003, by Neuberger Berman and Lehman
Brothers announcing the execution of the Merger Agreement.

. Letter from Jeffrey B. Lane, President and Chief Executive Officer of
Neuberger Berman, to Employees, dated July 22, 2003.

. Neuberger Berman Talking Points for Clients, Vendors and the Public.

. Questions and Answers for Neuberger Berman Executive Committee at
Meeting of Senior Vice Presidents and Managing Directors.

. Presentation to Neuberger Berman Active Former Principals, dated July
22, 2003.

-2-

[Joint Press Release]

For Immediate Release Lehman Brothers
Media Contact: Hannah Burns
212-526-4064

Investor Contact: Shaun Butler
212-526-8381

Neuberger Berman
Media Contact: Andrea Trachtenberg
212-476-8912

Investor Contact: Robert Matza
212-476-9808

LEHMAN BROTHERS AND NEUBERGER BERMAN
ANNOUNCE STRATEGIC COMBINATION

Creates a Leading Position in High-Net-Worth Marketplace

Conference Call to be Held Today at 9:30 a.m. EDT

New York, New York -- July 22, 2003-- Lehman Brothers Holdings Inc. (NYSE ticker
symbol: LEH) and Neuberger Berman Inc. (NYSE ticker symbol: NEU) announced today
that they have entered into a definitive agreement whereby Lehman Brothers will
acquire Neuberger Berman in a transaction valued, at the time of the
announcement, at approximately $2.625 billion (including $42 million in
in-the-money options and less $255 million in net excess cash as of June 30,
2003 and excluding 1.6 million unvested restricted shares in employee
compensation plans). Under the terms of the agreement, based on yesterday's
closing stock price, each Neuberger Berman shareholder would receive an implied
price of $41.48 per share consisting of $9.49 in cash and 0.496 shares of Lehman
Brothers common stock. The number of shares to be received by each Neuberger
Berman shareholder may, however, be adjusted if the price of Lehman Brothers
common stock is above $66.51 during a period shortly prior to closing, subject
to a collar.

Transaction Benefits

. The acquisition of Neuberger Berman's Private Asset Management business
will position Lehman Brothers as one of the industry's leading providers
of services to high-net-worth investors

. The addition will bring Lehman Brothers' client assets under management
to over $100 billion

. Neuberger Berman will expand Lehman Brothers' capabilities in the areas
of mutual funds, wrap accounts, institutional separate accounts, and
alternative investments

. Lehman Brothers will provide Neuberger Berman's clients with access to an
expanded range of investment products and services to manage risk or seek
enhanced returns, including structured capital markets products, private
equity, and other alternative and asset management products

. Neuberger Berman's comprehensive portfolio of money management products
will create incremental product opportunities to be distributed through
Lehman Brothers' global network of institutional and high-net-worth
clients

. The combination is expected to further enhance Lehman Brothers' revenue
diversification and earnings stability, raising the percentage of
revenues from its Client Services Segment from 13% to 21%, on a pro forma
basis for 2002

Lehman Brothers Chairman and Chief Executive Officer Richard S. Fuld, Jr. said,
"Neuberger Berman is an ideal partner for Lehman Brothers in every respect.
Strategically, this acquisition meets our objectives of enhancing business
diversification and growing our higher margin businesses. Financially, we expect
the combination to further improve our ability to generate consistent and
attractive cross-cycle results and create additional value for our shareholders.
Culturally, Neuberger Berman is a wonderful fit with our One Firm culture. Its
team-oriented culture, as well as the minimal overlap in our business platforms,
should help ensure a smooth integration process. We look forward to welcoming
everyone at Neuberger Berman as colleagues."

Jeffrey B. Lane, president and chief executive officer of Neuberger Berman,
added, "In Lehman Brothers, we have found the best possible partner. Neuberger
Berman's strategy has been to diversify the breadth of the products and services
we offer in order to meet client needs and be responsive to the ever-changing
global securities markets. This strategy has helped us achieve solid performance
across the business cycle for both our clients and shareholders. By combining
our industry-leading private wealth and asset management platform with Lehman
Brothers' wide range of products and geographic scope, we can create an even
greater array of opportunities together."

Subsequent to the closing of the transaction, Neuberger Berman will become part
of Lehman Brothers' Client Services Segment's Wealth and Asset Management
Division headed by

Theodore P. Janulis. Jeffrey B. Lane will become a vice chairman of Lehman
Brothers, a member of the Office of the Chairman, chairman of the Wealth and
Asset Management Division, and chairman of Neuberger Berman. Robert Matza will
become president of Neuberger Berman and remain its chief operating officer. In
addition, Mr. Matza will join Lehman Brothers' Management Committee.

Pursuant to the definitive agreement, each share of Neuberger Berman will be
exchanged for $9.49 in cash and a fractional share of Lehman Brothers common
stock based on the average trading price of Lehman Brothers common stock during
a period of time shortly prior to closing. The exchange ratio would be fixed at
0.496 if the average stock price during that period were $66.51 or less. If the
average stock price were greater than $66.51 but not more than $73.00, the
exchange ratio would vary so that Neuberger Berman shareholders would receive
total per share consideration of $42.50. Above $73.00, the exchange ratio
mechanics vary subject to a minimum exchange ratio of 0.411 if the average stock
price were above $90.41.

The transaction has been approved by the boards of directors of both companies
and is subject to the approval of Neuberger Berman shareholders and other
closing conditions, regulatory approvals, and termination events. As part of the
overall transaction, the 32 active Neuberger Berman partners who lead most of
the wealth management teams will convert their Neuberger Berman stock, including
approximately $941 million in shares subject to transfer restrictions, into
Lehman Brothers stock and cash on the same basis as the public shareholders. All
Lehman Brothers stock received in exchange for these restricted shares will
continue to be subject to similar transfer restrictions. Also, Lehman Brothers
will establish a $120 million stock retention pool for key producers, subject to
vesting. The transaction is expected to close during Lehman Brothers' 2003
fiscal fourth quarter. The transaction is intended to be tax-free with respect
to the Lehman Brothers common stock to be received in the transaction by
Neuberger Berman shareholders. Lehman Brothers was advised in the transaction by
its own M&A advisory group, and Neuberger Berman was advised by Merrill Lynch.

A conference call to discuss Lehman Brothers' acquisition of Neuberger Berman
will be held today, July 22 at 9:30 a.m., EDT. The call will be open to the
public. Members of the public who would like to access the conference call
should dial, from the United States, 888-989-4365 or, from outside the U.S.,
712-271-3214. The pass code for all callers is LEHMAN. The conference call will
also be accessible at

http://leh.client.shareholder.com/MediaRegister5post.cfm?MediaID=8769&
mediauserid=0. For those unable to listen to the live broadcast, a replay will
be available through the Shareholders section on the Lehman Brothers Web site,
www.lehman.com, or by dialing 888-566-0097 (domestic) or 402-998-1667
(international). The replay will be available approximately 24 hours after the
event and will remain available on the Lehman Brothers Web site until 5:00 p.m.,
EDT on August 22, 2003, and by phone until 5:00 p.m., EDT on August 5, 2003. For
additional information about the transaction, please see the Forms 8-K filed
today by Lehman Brothers Holdings Inc. and Neuberger Berman Inc. with the
Securities and Exchange Commission, available through the SEC's Web site at
www.sec.gov. Please direct any questions regarding the conference call to Shaun
Butler at 212-526-8381 or sbutler@lehman.com or Ben Pratt at 212-526-5975 or
benjamin.pratt@lehman.com.

Neuberger Berman Inc., through its subsidiaries, is an investment advisory
company with $63.7 billion in assets under management, as of June 30, 2003. For
64 years, the Company has provided clients with a broad range of investment
products, services and strategies for individuals, families, and taxable and
non-taxable institutions. The Company engages in wealth management services
including private asset management, tax and financial planning, and personal and
institutional trust services; mutual funds, institutional management and
alternative investments; and professional securities services. Its Web site can
be accessed at www.nb.com.

Lehman Brothers, an innovator in global finance, serves the financial needs of
corporations, governments and municipalities, institutional clients, and
high-net-worth individuals worldwide. Founded in 1850, Lehman Brothers maintains
leadership positions in equity and fixed income sales, trading and research,
investment banking, private equity, and private client services. The Firm is
headquartered in New York, London, and Tokyo and operates in a network of
offices around the world. For further information about Lehman Brothers'
services, products, and recruitment opportunities, please visit its Web site at
www.lehman.com.

# # #

This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) statements about the benefits of
the acquisition of Neuberger Berman by Lehman Brothers, including financial and
operating results, synergy benefits and any accretion to reported earnings that
may be realized from the acquisition; Lehman Brothers' and Neuberger Berman's
plans, objectives, expectations

and intentions and other statements contained in this presentation that are not
historical facts; and (ii) other statements identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates"
or words of similar meaning. These forward-looking statements are based upon
management's current beliefs or expectations and are inherently subject to
significant business, economic and competitive uncertainties and contingencies
and third-party approvals, many of which are beyond our control. The following
factors, among others, could cause actual results to differ materially from
those described in the forward-looking statements: (1) whether the stockholders
of Neuberger Berman approve the proposed transaction; (2) the satisfaction of
the other conditions specified in the merger agreement, including without
limitation the receipt of required governmental and other third-party approvals
of the proposed transaction; (3) the ability to successfully combine the
businesses of Lehman Brothers and Neuberger Berman; (4) the realization of
revenue and cost synergy benefits from the proposed transaction; (5) operating
costs, customer loss and business disruption following the merger, including
adverse effects on relationships with employees; (6) changes in the stock market
and interest rate environment that affect revenues; and (7) competition. Lehman
Brothers and Neuberger Berman do not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date such forward-looking statement is made.

This press release shall not constitute an offer of any securities for sale. The
proposed transaction will be submitted to Neuberger Berman's stockholders for
their consideration. Lehman Brothers and Neuberger Berman will file a
registration statement, a proxy statement/prospectus and other relevant
documents concerning the proposed transaction with the SEC. Stockholders of
Neuberger Berman are urged to read the registration statement and the proxy
statement/prospectus and any other relevant documents filed with the SEC when
they become available, as well as any amendments or supplements to those
documents, because they will contain important information. Stockholders of
Lehman Brothers can obtain more information about the proposed transaction by
reviewing the Form 8-K filed by Lehman Brothers in connection with the
announcement of the transaction, and any other relevant documents filed with the
SEC when they become available. You will be able to obtain a free copy of the
proxy statement/prospectus, as well as other filings containing information
about Lehman Brothers and Neuberger Berman, at the SEC's Web site
(http://www.sec.gov). Copies of the proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the proxy statement/prospectus
can be obtained, without charge, by directing a request to Lehman Brothers,
Investor Relations, 745 Seventh Avenue, New York, New York 10019 (tel:
212-526-3267) or to Neuberger Berman, Corporate Communications, 605 Third
Avenue, New York, New York 10158 (tel: (212) 476-8125).

Lehman Brothers, Neuberger Berman and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Neuberger Berman in connection with the proposed
transaction. Information about the directors and executive officers of Lehman
Brothers is set forth in the proxy statement on Schedule 14A, dated February 28,
2003, for Lehman Brothers' 2003 annual meeting of stockholders. Information
about directors and executive officers of Neuberger Berman and their ownership
of Neuberger Berman common stock is set forth in the proxy statement on Schedule
14A, dated April 16, 2003, for Neuberger Berman's 2003 annual meeting of
stockholders. Additional information regarding participants in the proxy
solicitation may be obtained by reading the proxy statement/prospectus regarding
the proposed transaction when it becomes available.

[Letter from Jeffrey B. Lane, President and Chief Executive Officer of
Neuberger Berman, to Employees]

Neuberger Berman Inc. [Neuberger Berman Logo]
605 Third Avenue
New York, NY 10158-3698
Tel 212.476.9000

July 22, 2003

Dear Colleague:

I am very pleased to announce that the management and Board of Directors of
Neuberger Berman have agreed to a business combination with Lehman Brothers, one
of the world's leading financial services firms. Pending shareholder approval,
within a few months we expect to become part of Lehman Brothers.

The partnership we are announcing today represents a compelling opportunity. It
greatly enhances our ability to pursue our strategic growth objectives, by
providing us with increased financial strength coupled with broader product and
geographic reach. Lehman Brothers, with an approximate $16 billion market
capitalization, is a global firm with headquarters in New York, London and
Tokyo. It serves the financial needs of corporations, governments and
municipalities, institutional clients, and high-net-worth individuals worldwide.

As a result of this transaction, we will be able to make available to clients a
broader range of investment products to manage risk or seek enhanced returns,
including private equity and global capital market opportunities. Lehman
Brothers clients will benefit from our wealth management services and investment
products, most of which are not currently offered by Lehman Brothers.

From an employee viewpoint, we see great opportunities ahead for Neuberger
Berman employees as we seek to grow our business with increased resources.
Further, we see very few integration issues, since little overlap exists between
our business platforms.

There are a number of key points you should be aware of regarding this
combination. First, the Neuberger Berman identity and brand will remain intact.
Our reputation for investment excellence, integrity, and outstanding client
service is one of our greatest assets and a strong foundation for further
growth.

Equally important, our portfolio managers will continue to manage money
according to their seasoned judgment and expertise. Our research department will
remain autonomous. We foresee no significant changes in the way our primary
business units operate or deal with clients.

In addition, I will become Chairman of Neuberger Berman, a Vice Chairman of
Lehman Brothers, a member of Lehman Brothers' Office of the Chairman, and
Chairman of Lehman Brothers' Wealth and Asset Management Division. Bob Matza
will become President of Neuberger Berman in addition to his responsibilities as
Chief Operating Officer of Neuberger Berman. He will also join the Management
Committee of Lehman Brothers. Bob will report jointly to me and Theodore P.
Janulis,

head of Lehman Brothers Wealth and Asset Management Division. Our Executive
Management Committee will remain the same.

In Lehman Brothers, we believe we have found the best possible partner, based on
four criteria: 1) Our firms have a complementary strategic fit that strengthens
our platform and allows us to grow our business faster and better; 2) A strong
cultural bond exists between our organizations; 3) We have negotiated a fair
price for our shareholders to reflect the value we have created; and 4) We
anticipate relatively minimal execution risk, so that we can preserve and
further enhance the value of our franchise.

I appreciate your hard work in helping to build the tremendous value that we are
realizing today. I trust you will all join me in continuing to work hard with
our new partners to make this transaction a resounding success.

I invite you to listen to a conference call for investors with senior management
this morning at 9:30 a.m. EDT, at 888-989-4365. The pass code for all callers is
LEHMAN. This briefing will also be webcast; if your computer supports webcast
technology you may access the briefing at http://leh.client.shareholder.com/
MediaRegister5post.cfm?MediaID=8769&mediauserid=0.

We will be coordinating action plans with your managers for reaching out to all
our clients and business partners. In coming weeks, we will continue to keep you
informed about the combination and important next steps in a timely manner.

Sincerely,

/s/ Jeffrey B. Lane
-------------------

Jeffrey B. Lane

President and Chief Executive Officer

[Neuberger Berman Talking Points for Clients, Vendors and the Public]

Neuberger Berman Talking Points for Clients, Vendors and the Public

The Neuberger Berman name will not disappear.

The Neuberger Berman identity and brand will remain intact. Our reputation for
investment excellence, integrity, and outstanding client service is one of our
greatest assets and we would not want to jeopardize that.

There will be minimal changes in portfolio management.

. We have not planned any changes among portfolio managers on account of the
business combination.

. We have not planned any changes to mutual funds or portfolios on account of
the business combination.

. We have not planned any changes among client relationship people on account
of the business combination.

At the corporate level, Jeffrey Lane will become Chairman of Neuberger Berman,
Vice Chairman of Lehman Brothers, a member of Lehman Brothers' Office of the
Chairman, and Chairman of Lehman Brothers' Wealth and Asset Management Division.
Our Chief Operating Officer, Robert Matza, will add the title of President of
Neuberger Berman. He will also join the Management Committee of Lehman Brothers.
Our Executive Management Committee remains in place.

We do not anticipate any changes in the way we do business, or in our
relationships with clients.

Portfolio managers will continue to manage money according to their seasoned
judgment and expertise. Our research department will remain autonomous.

Details of the acquisition:

Lehman Brothers is buying all the outstanding shares of Neuberger Berman Inc.
However, we expect that the rest of our legal entities will remain in place:
Neuberger

Berman LLC, Neuberger Berman Management Co., Neuberger Berman Trust Company,
Executive Monetary Management, etc.

Timing:

The transaction is expected to close before Lehman Brothers' fiscal year end,
November 30, 2003.

What this means for Neuberger Berman:

Lehman Brothers provides us with increased financial strength, broader product
capabilities and geographic reach, strengthening our ability to pursue our
strategic growth objectives and serve our clients better.

We will be able to provide clients with a broader range of investment products
to manage risk or seek enhanced returns, including private equity, and global
capital market opportunities. Lehman Brothers clients in turn will benefit from
our wealth management services and investment products, most of which are not
currently offered by Lehman Brothers.

Neuberger Berman will expand Lehman Brothers' capabilities in the areas of
institutional separate accounts, wrap accounts, and mutual funds.

Neuberger Berman's comprehensive portfolio of money management products will
create incremental product opportunities to be distributed through Lehman
Brothers' vast global network of institutional and high net worth clients.

Why Lehman Brothers:

Effect on Neuberger Berman staffing levels:

As noted in the press release, one of the attractions of this business
combination is that there is very little overlap in our business platforms.

About Lehman Brothers:

Lehman Brothers is a global financial services firm, founded in 1850, that
serves corporations, institutions, governments and municipalities, institutional
clients, and high-net-worth individuals worldwide. It has 40 offices in 21
countries, with headquarters in

New York, London and Tokyo. It is a New York Stock Exchange-listed firm (LEH)
with an approximate $16 billion market capitalization. It has a very stable
management and significant financial strength: As of year-end 2002, it had a
total capital base of $48 billion. Lehman is best known for its investment
banking, research and capital markets capabilities, but it has a significant
fixed-income asset management business as well. With the addition of Neuberger
Berman, Lehman Brothers will have approximately $100 billion in assets under
management.

About Lehman Brothers' Wealth and Asset Management Division:

. Formed in 2002 in order to enhance the focus of private client and asset
management initiatives globally

. Over 1,300 employees as of June 30, 2003

The businesses in Wealth and Asset Management:

. Asset Management platform which provides both individual and institutional
clients investment advisory expertise through various entities, including
Lincoln Capital Fixed Income Management Company, Lehman Brothers
Alternative Investment Management, and additional Lehman Brothers funds
(private equity, real estate, venture capital)

. Private Client Services, with app. 450 brokers serving high-net-worth
investors throughout 14 offices, globally

How Neuberger Berman fits into the Lehman Brothers organization:

. Neuberger Berman will become part of Lehman Brothers' Wealth and Asset
Management Division, within the Private Client Services segment.

# # #

This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) statements about the benefits of
the acquisition of Neuberger Berman by Lehman Brothers, including financial and
operating results, synergy benefits and any accretion to reported earnings that
may be realized from the acquisition; Lehman Brothers' and Neuberger Berman's
plans, objectives, expectations and intentions and other statements contained in
this presentation that are not historical facts; and (ii) other statements
identified by words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" or words of similar meaning. These
forward-looking statements are based upon management's current beliefs or
expectations and are inherently subject to significant business, economic and
competitive uncertainties and contingencies and third-party approvals, many of
which are beyond our control. The following factors, among others, could cause
actual results to differ materially from the those described in the
forward-looking statements: (1) whether the stockholders of Neuberger Berman
approve the proposed transaction; (2) the satisfaction of the other conditions
specified in the merger

agreement, including without limitation the receipt of required governmental and
other third-party approvals of the proposed transaction; (3) the ability to
successfully combine the businesses of Lehman Brothers and Neuberger Berman; (4)
the realization of synergy benefits from the proposed transaction; (5) operating
costs, customer loss and business disruption following the merger, including
adverse effects on relationships with employees; (6) changes in the stock market
and interest rate environment that affect revenues; and (7) competition. Lehman
Brothers and Neuberger Berman do not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date such forward-looking statement is made.

This document shall not constitute an offer of any securities for sale. The
proposed transaction will be submitted to Neuberger Berman's stockholders for
their consideration. Lehman Brothers and Neuberger Berman will file a
registration statement, a proxy statement/prospectus and other relevant
documents concerning the proposed transaction with the SEC. Stockholders of
Neuberger Berman are urged to read the registration statement and the proxy
statement/prospectus and any other relevant documents filed with the SEC when
they become available, as well as any amendments or supplements to those
documents, because they will contain important information. Stockholders of
Lehman Brothers can obtain more information about the proposed transaction by
reviewing the Form 8-K filed by Lehman Brothers in connection with the
announcement of the transaction, and any other relevant documents filed with the
SEC when they become available. You will be able to obtain a free copy of the
proxy statement/prospectus, as well as other filings containing information
about Lehman Brothers and Neuberger Berman, at the SEC's Web site
(http://www.sec.gov). Copies of the proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the proxy statement/prospectus
can be obtained, without charge, by directing a request to Lehman Brothers,
Investor Relations, 745 Seventh Avenue, New York, New York 10019 (212-526-3267)
or to Neuberger Berman, Corporate Communications, 605 Third Avenue, New York,
New York 10158 (212-476-8125).

[Questions and Answers for Executive Committee at Meeting of
Senior Vice Presidents and Managing Directors]

Questions and Answers for EC at Sr VP / MD Meeting

Why are we doing this?

Neuberger Berman's strategy has been to diversify the breadth of the
products and services we offer in order to meet client needs and be responsive
to the ever-changing global securities markets. This strategy has helped us
achieve solid performance across the business cycle for both our clients and
shareholders. By combining our industry-leading private wealth and asset
management platform with Lehman Brothers' financial strength, its wide range of
products and geographic scope, we can continue to pursue our strategy in a far
more expeditious fashion. The combination also provides us with increased
flexibility to engage in small strategic acquisitions and lift-outs.

In Lehman Brothers, we believe we have found the best possible partner,
based on four criteria: 1) Our firms have a complementary strategic fit that
strengthens our platform and allows us to grow our business faster and better;
2) A strong cultural bond exists between our organizations; 3) We have
negotiated a fair price for our shareholders to reflect the value we have
created; and 4) We anticipate relatively minimal execution risk, so that we can
preserve and further enhance the value of our franchise.

What are the anticipated benefits of the new business combination to clients and
employees?

Lehman Brothers provides us with greater financial strength and
geographic scope to continue to grow our business and serve our clients better.
We will be able to provide clients with a broader range of investment products
to manage risk or seek enhanced returns, including structured securities,
private equity, and global capital market opportunities. Lehman Brothers clients
will benefit from our wealth management services and investment products, most
of which are not currently offered by Lehman Brothers.

From a Neuberger Berman employee viewpoint, we see great opportunities
ahead for Neuberger Berman employees as we seek to grow our business with
increased resources. Further, we see few integration issues, since relatively
little overlap exists between our business platforms.

What does the agreement mean to my job?

Most of you have direct contact with clients and in these areas we
expect minimal overlap with Lehman Brothers personnel. We do expect to find
certain areas of overlap in some of the support and control (back office) areas.
But on the whole, we see great opportunities ahead for most Neuberger Berman
employees as we seek to grow our business with increased resources

What is the anticipated completion date of the agreement?

We expect the transaction to be completed by Lehman Brother's fiscal
year end, November 30, 2003.

Will Neuberger Berman keep its brand name?

Yes. We will continue to use our name on all correspondence. We will be
part of Lehman Brothers' Wealth and Asset Management Division, within the
Private Client Services segment.

Do clients need to sign new Investment Advisory Agreements?

All of our PAM discretionary accounts will need to sign positive
consent forms because of the new ownership structure. We will be launching a
campaign to gather these signatures immediately.

Will employees of Neuberger Berman in NYC be moving into Lehman offices?

We will stay at 605 Third Avenue.

Will satellite offices of Neuberger Berman be consolidated with Lehman offices
where appropriate?

No changes are planned at this time, but of course we will be looking
for efficiencies.

Will restricted stock grants to Neuberger employees automatically be vested?

They will continue with the same vesting schedule. Upon the completion
of the agreement, the stock will convert to Lehman Brothers stock and cash
according to the terms of the agreement. This Lehman stock and the cash will
carry the same restrictions.

How will shares accumulated or gifted under the WAP, ESPP and LTP be affected?

They will convert to Lehman stock and cash (earning interest) in the
same way as all other stock, and vesting schedules will remain in place.

For non-investment functions of the firm, should projects continue that are in
progress?

It is business as usual unless told otherwise.

Will budgets be affected for the year 2003? How will the budget planning process
of 2004 be affected?

Budgets remain in place for 2003. For 2004, we anticipate the budget
planning process will be coordinated with Lehman Brothers.

How and when will clients be communicated of the potential change?

Letters are available for clients, and talking points have been
prepared for sales and client-facing employees.

Will there be any change to our benefit plans and company policies?

This has not been resolved yet, but will be part of the transition
process.

What will happen to the current Executive Management Committee?

It remains in place, with the only change of Bob Matza becoming
President of Neuberger Berman, in addition to his responsibilities as Chief
Operating Officer. Jeff Lane will become Chairman of Lehman Brothers' Wealth and
Asset Management Division, a Vice Chairman of Lehman Brothers and member of
Lehman's Office of the Chairman, and will become Chairman of Neuberger Berman.

What will happen to the Board of Directors of NEU?

When the transaction is completed, NEU will be delisted and the board
of directors will resign.

What will happen to the Board of Directors of the mutual funds?

No change to the mutual fund boards is anticipated.

[Presentation to Neuberger Berman Active Former Principals]

Presentation to

Neuberger Berman

Active Former Principals

July 22, 2003

Summary of the Transaction

Agreement Date: July 21, 2003

Consideration: Based on $64.50 LEH price as of July 21, 2003 market close

. $41.48 per NEU share subject to adjustment within pricing
collar:

. $9.49 in cash and,

. Fractional share of LEH as determined by "Exchange Ratio"

. Base collar range for LEH: $66.51 to $73.00

. Consideration Mix: 77% stock / 23% cash

Tax Structure: . Tax-free reorganization with respect to LEH shares received
by NEU shareholders

. Any subsequent sales at current 15% long term capital gains
rate

Expected Close: Early Fourth Quarter 2003

Exchange Ratio

Determined by reference to the average price per share of Lehman common stock
for the 10 consecutive trading days ending 2 days prior to transaction closing

Assuming 70.0 NEU shares outstanding as of June 30, 2003 including
1.6 unvested, restricted stock awards

LEH Stock Consideration LEH
Reference Cash Exchange Transaction Shares
Price Consideration Per Share Ratio Value Issued

$61.51 $9.49 $30.51 0.496 $40.00 34.733
$64.50 $9.49 $31.99 0.496 $41.48 34.730
$66.51 $9.49 $33.01 0.496 $42.50 34.754
$73.00 $9.49 $33.01 0.452 $42.50 31.665
$82.19 $9.49 $37.15 0.452 $46.64 31.651
$90.41 $9.49 $37.15 0.411 $46.64 28.774

NEU Options

At the effective time of the merger:

.. All outstanding employee and director stock options fully vest
.. All NEU options convert into LEH options
. The deemed exchange ratio will assume that 100% of merger
consideration was paid in stock
.. Option exercise prices will be adjusted to preserve the economics of the
original option spread
.. Example:

Current Option
--------------
. NEU option: Exercisable for 1,000 shares of
Neuberger common stock
. NEU exercise price: $30.00 per share
. Consideration: Exchange Ratio = 0.496
Per share cash consideration = $9.49
. LEH reference price: $64.50

Converted Option
----------------
. LEH option: 643 shares of Lehman common stock
. LEH exercise price: $46.656 per share

NEU Options: Sample Calculation

1) 1,000 NEU options at $30.00 strike price = $30,000 value

2) Exchange Ratio = 0.496 * 1,000 options = 496 new options

3) Per share cash consideration = $9.49 * 1,000 options = $9,490

4) $9,490 / $64.50 price per Lehman share = 147 shares

5) Total number of new options = 496+147 = 643 options

6) $30,000 value / 643 new options = $46.656 new strike price

NEU Restricted Stock

At the effective time of the merger:

.. All shares of restricted stock granted under all Neuberger benefit plans
treated in the same manner as all other shares of Neuberger stock.

.. However,

New Lehman stock and cash consideration subject to same terms and
conditions as current Neuberger restricted stock:

. Stock vesting schedule remains intact

. Cash consideration on unvested stock will be held by Lehman and
distributed upon vesting of restricted stock

. Interest paid on cash held by Lehman at 1 year T-bill
rate

Closing Condition: PAM Revenue Run Rate

Lehman's obligation to close is subject, among others, to the following closing
condition:

--------------------------------------------------------------------------------
As of transaction close, the revenue run rate related to PAM AUM must be at
least 80% of the PAM revenue run rate projection based on May 31, 2003 PAM AUM
--------------------------------------------------------------------------------

The aggregate merger consideration is also subject to a pricing adjustment if
the closing PAM revenue run rate is less than 85% of the PAM revenue run rate as
of May 31, 2003:

.. 1.25% purchase price reduction for each 1.00% reduction in PAM revenue run
rate below 85%
.. 6.25% maximum purchase price reduction if closing PAM revenue run rate is
80% of May 31, 2003 benchmark

For purposes of calculating the closing PAM revenue run rate, PAM AUM:

.. must relate only to client accounts where an affirmative written consent to
the assignment of the advisory agreement has been received and,
.. will not reflect changes in valuation from the May 31, 2003 AUM benchmark
attributable to market appreciation or depreciation

Disclosure

This information may be deemed to be solicitation material in respect of
the proposed merger of Neuberger Berman Inc. and Lehman Brothers Inc. In
connection with the proposed merger, a registration statement on Form S-4 will
be filed with the Securities and Exchange Commission. Shareholders of Neuberger
Berman are urged to read the registration statement, including the final proxy
statement-prospectus that will be part of the registration statement, because it
will contain important information about the proposed merger. The final proxy
statement-prospectus will be mailed to Neuberger Berman shareholders. After the
registration statement is filed with the Securities and Exchange Commission, it
and any amendments thereto will be available for free both on the Securities and
Exchange Commission's web site (www.sec.gov) and from Neuberger Berman's and
Lehman Brothers's respective corporate secretaries. Neuberger Berman and its
directors and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction. Information
about the directors and executive officers of Neuberger Berman and their
ownership of Neuberger Berman common stock is set forth in the proxy statement
on Schedule 14A, dated April 16, 2003, for Neuberger Berman's 2003 annual
meeting of stockholders. Additional information regarding participants in the
proxy solicitation may be obtained by reading the final proxy
statement-prospectus regarding the proposed transaction when it becomes
available.

SVP / MD Meeting: Transaction Overview

Questions

Stockholders Agreement Amendment

The conditions for closing the transaction include an amendment to the
Stockholders Agreement

The procedure to amend requires:

.. "Principals" holding a majority of shares of Neuberger common stock
currently subject to Stockholders Agreement must execute the amendment

.. Once the majority has consented to the amendment, everyone who is a party
to the Stockholders Agreement will be bound to the amendment, even if they
did not consent

The amendment will become effective upon transaction closing.

See chart on following pages for proposed amendment terms

Stockholders Agreement Amendment Terms

Current Agreement Terms Proposed Amendment Terms

Sale and . Ability to transfer shares . No Change
Transfer Restrictions restricted but Board or Exec
Committee may waive restrictions

. As of 2002, each January 1, 10% . Amended; 10% of Founders shares owned at
of initial Founders shares freed closing multiplied by deemed exchange ratio
for sale or transfer assuming all consideration paid in stock
instead of cash and stock
. All active Principals must hold
at least 30% of initial shares . Condition eliminated

. All former Principals must hold . Condition eliminated
at least 30% of initial shares
until 3rd anniversary of
employment termination date

Stockholders Agreement Amendment Terms

Current Agreement Terms Proposed Amendment Terms

Sale and
Transfer Restrictions . If termination prior to 2003, transfer . Condition eliminated
after Employment restricted until 2007 when 20% of shares
Termination owned as of term date freed each year

. If termination 2003 or later, remaining shares . Condition eliminated
restricted until 3rd anniversary of term date

Non-Compete/ . Competition or "harmful activities" prohibited for three . Expanded to include Lehman
Non-Solicit years following employment termination date and its subsidiaries as
well as Neuberger and its
. If breached before 3rd anniversary of termination date, the subsidiaries
Company may acquire remaining restricted shares for $1.33
per share . Additional covenant not to
engage in "harmful activity"
prior to 3rd anniversary of
Lehman employ termination date

. Repurchase right re-affirmed
with additional provision for
injunctive relief and monetary
damages

Amended 10% Transfer: Sample Calculation

Assumptions:

|X| Initial Founders Shares: 1,538
|X| Restricted Founders Shares owned immediately prior to Merger: 1,000
(65% of initial shares)
|X| Lehman reference price: $64.50
|X| Exchange Ratio: 0.496
|X| Per share cash consideration: $9.49
|X| Deemed exchange ratio assuming entire consideration paid in stock: 0.643

Merger Consideration

Cash: 1,000 remaining restricted Founders shares * $9.49 = $9,490
Stock: 496 Lehman restricted shares

Annual Restriction "Lift"

64.3 shares: 10% of 643 (1,000 shares * 0.643 deemed exchange ratio)

13% of 496 Lehman shares received at Merger exchange

Disclosure

This information may be deemed to be solicitation material in respect
of the proposed merger of Neuberger Berman Inc. and Lehman Brothers Inc. In
connection with the proposed merger, a registration statement on Form S-4 will
be filed with the Securities and Exchange Commission. Shareholders of Neuberger
Berman are urged to read the registration statement, including the final proxy
statement-prospectus that will be part of the registration statement, because it
will contain important information about the proposed merger. The final proxy
statement-prospectus will be mailed to Neuberger Berman shareholders. After the
registration statement is filed with the Securities and Exchange Commission, it
and any amendments thereto will be available for free both on the Securities and
Exchange Commission's web site (www.sec.gov) and from Neuberger Berman's and
Lehman Brothers's respective corporate secretaries. Neuberger Berman and its
directors and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction. Information
about the directors and executive officers of Neuberger Berman and their
ownership of Neuberger Berman common stock is set forth in the proxy statement
on Schedule 14A, dated April 16, 2003, for Neuberger Berman's 2003 annual
meeting of stockholders. Additional information regarding participants in the
proxy solicitation may be obtained by reading the final proxy
statement-prospectus regarding the proposed transaction when it becomes
available.

Active Principals Meeting: Transaction Overview

Questions