LORD ABBETT LARGE CAP GROWTH FUND, 497, 2000-12-20

LORD ABBETT LARGE CAP GROWTH FUND
497, 2000-12-20

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LORD ABBETT

STATEMENT OF ADDITIONAL INFORMATION DECEMBER 1, 2000

LORD ABBETT
LARGE-CAP GROWTH FUND

This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett Distributor") at 90 Hudson Street, Jersey City, NJ 07302-3973.
This Statement of Additional Information relates to, and should be read in
conjunction with, the Prospectus dated December 1, 2000.

Shareholder inquiries should be made by directly contacting the Fund or by
calling 800-821-5129. The Annual Report to Shareholders is available without
charge, upon request by calling that number. In addition, you can make inquiries
through your dealer.

TABLE OF CONTENTS PAGE
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1. Fund History 2
2. Investment Policies 2
3. Management of the Fund 7
4. Control Persons and Principal Holders
of Securities 11
5. Investment Advisory and Other Services 11
6. Brokerage Allocations and Other Practices 12
7. Capital Stock & Other Securities 13
8. Purchase, Redemption & Pricing 17
9. Taxation of the Fund 20
10. Underwriter 22
11. Performance 22
12. Financial Statements 23

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1
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1.
FUND HISTORY

The Lord Abbett Large-Cap Growth Fund (the "Fund") is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"). The Fund was formed as a business trust under
Delaware law on September 29, 1999. The Fund offers five classes of shares:
Class A, Class B, Class C, Class P, and Class Y. Only the Fund's Class A, B, C
and P shares are offered in this Statement of Additional Information.

2.
INVESTMENT POLICIES

FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund is subject to the following
fundamental investment restrictions which cannot be changed without approval of
a majority of the Fund's outstanding shares.

The Fund may not:

(1) borrow money, issue senior securities or mortgage, pledge or
hypothecate its assets except to the extent permitted under the
Act;

(2) engage in the underwriting of securities, except to the extent
that, in connection with the disposition of its portfolio
securities or as otherwise permitted under applicable law, it may
be deemed to be an underwriter under federal securities laws;

(3) invest more than 25% of the value of its total assets in the
securities of issuers in any particular industry (excluding
obligations issued or guaranteed by the U.S. Government, any
state, territory or possession of the United States, the District
of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions);

(4) buy or sell real estate (except that the Fund may invest in
securities directly or indirectly secured by real estate or
interests therein or issued by companies which invest in real
estate or interests therein) or commodities or commodity contracts
(except to the extent the Fund may do so in accordance with
applicable law and without registering as a commodity pool
operator under the Commodity Exchange Act as, for example, with
futures contracts);

(5) make loans, except that the acquisition of or investment in debt
securities, repurchase agreements or similar instruments shall not
be subject to this restriction, and except further that the Fund
may lend its portfolio securities, provided that the lending of
portfolio securities may be made only in accordance with
applicable law; and

(6) with respect to 75% of the value of the total assets of the Fund,
(i) buy securities of any one issuer representing more than 5% of
the value of its total assets, except securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities or (ii) own more than 10% of the voting
securities of such issuer.

Compliance with the investment restrictions above will be determined at the time
of the purchase or sale of the portfolio.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. In addition to the policies in the
Prospectus and the investment restrictions above which cannot be changed without
shareholder approval, the Fund is also subject to the following non-fundamental
investment policies which may be changed by the Board of Trustees without
shareholder approval.

The Fund may not:

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(1) make short sales of securities or maintain a short position
except to the extent permitted by applicable law;

(2) invest knowingly more than 15% of its net assets (at the time of
investment) in illiquid securities, except for securities
qualifying for resale under Rule 144A of the Securities Act of
1933 ("Rule 144A") deemed to be liquid by the Board of Trustees;

(3) invest in the securities of other investment companies as defined
in the Act, except as permitted by applicable law;

(4) write, purchase or sell puts, calls, straddles, spreads or
combinations thereof, except to the extent permitted in the Fund's
Prospectus and Statement of Additional Information, as they may be
amended from time to time; and

(5) buy from or sell to any of the Fund's officers, trustees,
employees, or its investment adviser any securities other than
shares of the Fund.

PORTFOLIO TURNOVER RATE. For the period December 15, 1999 (commencement of
operations) to July 31, 2000, the Fund's portfolio turnover rate was 14.66%.

ADDITIONAL INFORMATION ON PORTFOLIO RISKS, INVESTMENTS AND TECHNIQUES. The
following sections provide further information on certain types of investments
and investment techniques that may be used by the Fund, including their
associated risks.

BORROWINGS. The Fund may borrow money for temporary or emergency purposes from
banks and other financial institutions in amounts not exceeding one-third of its
total assets.

CONVERTIBLE SECURITIES. The Fund may invest in convertible securities.
Convertible securities are preferred stocks or debt obligations that are
convertible into common stock. They generally offer lower interest or dividend
yields than non-convertible securities of similar quality. Convertible
securities have both equity and fixed income risk characteristics. Like all
fixed income securities, the value of convertible securities is susceptible to
the risk of market losses attributable to changes in interest rates. Generally,
the market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. However, when
the market price of the common stock underlying a convertible security exceeds
the conversion price of the convertible security, the convertible security tends
to reflect the market price of the underlying common stock. As the market price
of the underlying common stock declines, the convertible security, like a fixed
income security, tends to trade increasingly on a yield basis, and thus, may not
decline in price to the same extent as the underlying common stock.

DEPOSITORY RECEIPTS. The Fund may invest in sponsored and unsponsored American
Depository Receipts ("ADRs") and similar depository receipts. ADRs, typically
issued by a financial institution (a "depository"), evidence ownership interests
in a security or a pool of securities issued by a foreign issuer and deposited
with the depository. Prices of ADRs are quoted in U.S. dollars, and ADRs and
traded in the United States.

EQUITY SECURITIES. As stated in the Prospectus, under normal circumstances, the
Fund invests at least 65% of its total assets in equity securities. These
include common stocks, preferred stocks, convertible securities, warrants, stock
purchase rights, and similar instruments. Common and preferred stocks represent
an ownership interest in a corporation. In general, stock values fluctuate in
response to the activities of individual companies and in response to general
market and economic conditions. Accordingly, the value of the stocks that the
Fund holds may decline over short or extended periods. The stock markets tend to
be cyclical, with periods of generally rising stock prices and other periods of
generally declining prices. The volatility of equity securities means that the
value of an investment in the Fund may increase or decrease. As of the date
hereof, certain stock markets were trading at or close to record high levels.
There can be no guarantee that such levels will continue.

3
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denominated or quoted securities of U.S. issuers. Foreign investments may be
affected by changes in currency rates, changes in foreign or U.S. laws or
restrictions applicable to such investments and changes in exchange control
regulations (i.e., currently blockage). A decline in the exchange rate of the
currency (i.e., weakening of the currency against the U.S. dollar) in which a
portfolio security is quoted or denominated relative to the U.S. dollar would
reduce the value of the portfolio security.

Brokerage commissions, custodial services and other costs relating to investment
in international securities markets generally are more expensive than in the
United States. Clearance and settlement procedures may be different in foreign
countries and, in certain markets, such procedures have been unable to keep pace
with the volume of securities transactions, thus making it difficult to conduct
such transactions.

Foreign issuers are not generally subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable to U.S. issuers.
There may be less publicly available information about a foreign issuer than
about a U.S. issuer. In addition, there is generally less government regulation
of foreign markets, companies and securities dealers than in the United States.
Foreign securities markets may have substantially less volume than U.S.
securities markets and securities of many foreign issuers are less liquid and
more volatile then securities of comparable domestic issuers. The Fund may hold
foreign securities which trade on days when the Fund does not sell shares. As a
result, the value of the Fund's portfolio securities may change on days an
investor may not be able to purchase or redeem Fund shares. With respect to
certain foreign countries, there is a possibility of nationalization,
expropriation or confiscatory taxation, imposition of withholding or other taxes
on dividend or interest payments (or, in some cases, capital gains), limitations
on the removal of funds or other assets of the Fund, and political or social
instability or diplomatic developments which could affect investments in those
countries.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Although the Fund is
authorized to engage in futures and options on futures transactions in
accordance with its investment objective and policies, it currently has no
intention to do so.

Futures contracts are standardized exchange-traded contracts that provide for
the sale or purchase of a specified financial instrument at a future time at a
specified price. An option on a futures contract gives the purchaser the right
(and the writer of the option the obligation) to assume a position in a futures
contract at a specified exercise price within a specified period of time. In
addition to incurring fees in connection with futures and options, an investor
is required to maintain margin deposits. At the time of entering into a futures
transaction or writing an option, an investor is required to deposit, on behalf
of the broker, a specified amount of cash or eligible securities called "initial
margin." The required initial margin is set by the exchange on which the
contract is traded although the broker can require an increased amount.
Subsequent payments, called "variation margin," to and from the broker are made
on a daily basis as the market price of the futures contract or option
fluctuates.

The Fund may purchase and sell futures contracts, and purchase and write call
and put options on futures contracts, for bona fide hedging purposes, including
to hedge against changes in interest rates, securities prices, or to the extent
the Fund invests in foreign securities, currency exchange rates, or in order to
pursue risk management or speculative strategies, including gaining efficient
exposure to markets and minimizing transaction costs. The Fund may also enter
into closing purchase and sale transactions with respect to such contracts and
options. The Fund may not purchase or sell futures contracts, options on futures
contracts or options on currencies traded on a CFTC-regulated exchange for
non-bona fide hedging purposes if the aggregated initial margin and premiums
required to establish such positions would exceed 5% of the liquidation value of
the Fund's portfolio, after taking into account unrealized profits and losses on
any such contracts it has entered into.

Futures contracts and options on futures contracts present the following risks:

- While the Fund may benefit from the use of futures and related options,
unanticipated changes in interest rates, securities prices or currency
exchange rates may result in poorer overall performance than if the
Fund had not entered into any futures or related options transaction.

- Because perfect correlation between a futures position and a portfolio
position that is intended to be protected

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is impossible to achieve, the desired protection may not be obtained
and the Fund may be exposed to additional risk of loss.

- The loss that the Fund may incur in entering into futures contracts and
in writing call options on futures is potentially unlimited and may
exceed the amount of the premium received.

- Futures markets are highly volatile and the use of futures may
increase the volatility of the Fund's NAV.

- As a result of the low margin deposits normally required in futures and
options on futures trading, a relatively small price movement in a
contract may result in substantial losses to the Fund.

- Futures contracts and related options may be illiquid, and exchanges
may limit fluctuations in futures contract prices during a single day.

ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in illiquid
securities which cannot be disposed of in seven days in the ordinary course of
business at fair value. Illiquid securities include:

- Domestic and foreign securities that are not readily marketable.

- Repurchase agreements and time deposits with a notice or demand period
of more than seven days.

- Certain restricted securities, unless the Board of Trustees determined,
based upon a review of the trading markets for a specific restricted
security, that such restricted security is eligible for resale pursuant
to Rule 144A under the Securities Act of 1933 ("144A Securities") and,
therefore, is liquid.

Securities may be resold to a qualified institutional buyer without registration
and without regard to whether the seller originally purchased the security for
investment. Investing in 144A Securities may decrease the liquidity of the
Fund's portfolio to the extent that qualified institutional buyers become for a
time uninterested in purchasing these securities. The purchase price and
subsequent valuation of restricted and illiquid securities normally reflect a
discount, which may be significant, from the market price of comparable
securities for which a liquid market exists.

INVESTMENT COMPANIES. The Fund may invest in securities of other investment
companies (including SPDRs, as defined below) subject to limitations prescribed
by the Act. These limitations include a prohibition on the Fund acquiring more
than 3% of the voting shares of any other investment company, and a prohibition
on investing more than 5% of the Fund's total assets in securities of any one
investment company or more than 10% of its total assets in securities of all
investment companies. The Fund will indirectly bear its proportionate share of
any management fees and other expenses paid by the investment companies in which
it invests. Such investment companies will have investment objectives, policies
and restrictions substantially similar to those of the Fund and will be subject
to substantially the same risks.
The Fund may, consistent with its investment policies, purchase
Standard & Poor's Depository Receipts ("SPDRs"). SPDRs are securities
traded on the American Stock Exchange ("AMEX") that represent ownership
in the SPDR Trust, a trust which has been established to accumulate and
hold a portfolio of common stocks that is intended to track the price
performance and dividend yield of the S&P 500 Index. The SPDR Trust is
sponsored by a subsidiary of the AMEX. SPDRs may be used for several
reasons, including, but not limited to, facilitating the handling of
cash flows or trading, or reducing transaction costs. The price
movement of SPDRs may not perfectly parallel the price action of the
S&P 500.

LENDING OF PORTFOLIO SECURITIES. Although the Fund has no current intention of
doing so, it is authorized to engage in securities lending to increase its
income. Securities lending involves the lending of securities owned by the Fund
to financial institutions such as certain broker-dealers. The borrowers are
required to secure their loan continuously with cash, cash equivalents, U.S.
government securities or letters of credit in an amount at least equal to the
market value of the securities loaned. Cash collateral may be invested in cash
equivalents. To the extent that cash collateral is invested in other investment
securities, such collateral will be subject to market depreciation or
appreciation, and the Fund will be responsible for any loss that might result
from its investment of the borrowers' collateral. The Fund may

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experience delay in the recovery of its securities if the borrowing
institution breaches its agreement with the Fund. If the investment manager
decides to engage in securities loan transactions, the value of the
securities loaned may not exceed one-third of the value of the total assets
of the Fund (including the loan collateral).

OPTIONS ON SECURITIES TRANSACTIONS. The Fund may engage in option transactions
in accordance with its investment objective and policies, although it currently
does not intend to do so. The Fund may purchase and write (sell) put and call
options on equity securities that are traded on national securities exchanges.
The Fund will not purchase an option if, as a result of such purchase, more than
10% of its total assets would be invested in premiums for such options. The Fund
may write (sell) covered put options to the extent that cover for such options
does not exceed 15% of its net assets. The Fund may write (sell) covered call
options having an aggregate market value of less than 25% of its net assets.

A put option gives the purchaser of the option the right to sell, and obligates
the writer to buy, the underlying securities at the exercise price at any time
during the option period. A put option is covered when, among other things, the
Fund segregates permissible liquid assets having a value equal to or greater
than the exercise price of the option to fulfill the obligation undertaken.
Writing listed put options may be a useful portfolio investment strategy when
the Fund has cash or other reserves available for investment as a result of
sales of Fund shares or when the investment manager believes a more defensive
and less fully invested position is desirable in light of market conditions.

A call option gives the purchaser of the option the right to buy, and obligates
the writer to sell, the underlying securities at the exercise price at any time
during the option period. When the Fund writes a covered call option, it owns
the underlying security or has an absolute and immediate right to acquire that
security, without additional cash consideration. The Fund generally intends to
write listed covered call options during periods when it anticipates declines in
the market values of portfolio securities.

The purchase and writing of options is a highly specialized activity which
involves special investment risks. Options may be used for hedging or
cross-hedging purposes, or to seek to increase total return (which is considered
a speculative activity). The successful use of options depends in part on the
ability of the investment manager to manage future price fluctuations and the
degree of correlation between the options and securities markets. If the
investment manager is incorrect in its expectation of changes in market prices
or determination of the correlation between the securities on which options are
based and the Fund's portfolio securities, the Fund may incur losses that it
would not otherwise incur. The use of options can also increase the Fund's
transaction costs.

PREFERRED STOCK, WARRANTS AND RIGHTS. The Fund may invest in preferred stock,
warrants and rights. Preferred stocks are securities that represent an ownership
7interest providing the holder with claims on the issuer's earnings and assets
before common stockholders but after bond owners. Unlike debt securities, the
obligations of an issuer of preferred stock, including dividend and other
payment obligations, may not typically be accelerated by the holders of such
preferred stock on the occurrence of an event of default or other non-compliance
by the issuer of the preferred stock.

Warrants are options to buy a stated number of shares of common stock at a
specified price at any time during the life of the warrant. Rights represent a
privilege offered to holders of record of issued securities to subscribe
(usually on a pro rata basis) for additional securities of the same class, of a
different class or of a different issuer, as the case may be. The holders of
warrants and rights have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer. The value of a warrant or right
may not necessarily change with the value of the underlying securities. Warrants
and rights cease to have value if they are not exercised prior to their
expiration date.

SHORT-TERM FIXED INCOME SECURITIES. The Fund is authorized to invest temporarily
in various short-term fixed income securities. Such securities may be used to
invest uncommitted cash balances, to maintain liquidity to meet shareholder
redemptions, or to take a temporary defensive position against market declines.
These securities include:

- Obligations of the U.S. Government and its agencies and
instrumentalities.

- Commercial paper.

- Bank certificates of deposit and time deposits.

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- Bankers' acceptances.

- Repurchase agreements collateralized by these securities.

3.
MANAGEMENT OF THE FUND

The Board of Trustees of the Fund is responsible for the management of the
business and affairs of the Fund.

The following Trustee is the managing partner of Lord, Abbett & Co. ("Lord
Abbett"), 90 Hudson Street, Jersey City, New Jersey 07302-3973. He has been
associated with Lord Abbett for over five years and is an officer, director,
or trustee of thirteen other Lord Abbett-sponsored funds.

*ROBERT S. DOW, age 55, Chairman and President

*Mr. Dow is an "interested person" as defined in the Act.

The following outside Trustees are also directors or trustees of thirteen other
Lord Abbett-sponsored funds referred to above.

E. THAYER BIGELOW, TRUSTEE
245 Park Avenue, Suite 2414
New York, New York

Senior Adviser, Time Warner Inc. (since 1998); Acting Chief Executive Officer
of Courtroom Television Network (1997 - 1998). President and Chief Executive
Officer of Time Warner Cable Programming, Inc. (1991 - 1997). Currently
serves as director of Crane Co. and Huttig Building Products Inc. Age 59.

WILLIAM H.T. BUSH, TRUSTEE
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri

Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company (since 1986). Currently serves as director of
Rightchoice Managed Care, Inc., Mississippi Valley Bancorp, DT Industries
Inc., and Engineered Support Systems, Inc. Age 62.

ROBERT B. CALHOUN, JR., TRUSTEE
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York

Managing Director of Monitor Clipper Partners (since 1997) and President of The
Clipper Group L.P., both private equity investment funds (since 1990). Currently
serves as director of Avondale, Inc., Interstate Bakeries Corp., and Travel
Center of America., Inc. Age 58.

STEWART S. DIXON, TRUSTEE
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois

Partner in the law firm of Wildman, Harrold, Allen & Dixon (since 1990). Age 70.

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JOHN C. JANSING, TRUSTEE
162 S. Beach Road
Hobe Sound, Florida

Retired. Former Chairman of Independent Election Corporation of America, a
proxy tabulating firm. Currently serves as director of Vestaur Securities and
Alpine Group, Inc. Age 75.

C. ALAN MACDONALD, TRUSTEE
415 Round Hill Road
Greenwich, Connecticut

President of Club Management Co., LLC, consultants on golf development
management (since 1999); Managing Director of The Directorship Group Inc., a
consultancy in board management and corporate governance (1997-1999); General
Partner of The Marketing Partnership, Inc., a full service marketing consulting
firm (1995-1997). Currently serves as director of Fountainhead Water Company,
Careside, Inc., Lincoln Snacks, Samco Funds, Inc., and J.B.
Williams Co., Inc. Age 67.

HANSEL B. MILLICAN, JR., TRUSTEE
The Rochester Button Co.
1350 Broadway (Suite 1906)
New York, New York

President and Chief Executive Officer of Rochester Button Company (since
1991). Currently serves as director of Polyvision Corporation. Age 72.

THOMAS J. NEFF, TRUSTEE
Spencer Stuart, U.S.
277 Park Avenue
New York, New York

Chairman of Spencer Stuart, U.S., an executive search consulting firm (since
1976). Currently serves as director of Ace, Ltd. And Exult, Inc. Age 62.

COMPENSATION DISCLOSURE
The following table summarizes the compensation for each of the
Directors/Trustees for the Fund and for all Lord Abbett-sponsored funds.

The second column of the following table sets forth the compensation accrued by
the Fund for outside directors. The third column sets forth information with
respect to the benefits accrued by all Lord Abbett-sponsored funds for outside
directors/trustees under the Fund's retirement plans, which were terminated
effective October 31, 2000. The fourth column sets forth the total compensation
paid by all Lord Abbett-sponsored funds to the outside directors/trustees, and
amounts payable but deferred at the option of the director/trustee, but does not
include amounts accrued under the third column. No director/trustee of the funds
associated with Lord Abbett and no officer of the funds received any
compensation from the funds for acting as a director/trustee or officer.

8
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FOR THE FISCAL YEAR ENDED JULY 31, 2000
---------------------------------------

(1) (2) (3) (4)

Equity-Based For Year Ended
Retirement Benefits December 31, 1999
Accrued by the Total Compensation
Aggregate Fund and Paid by the Fund and
Compensation Thirteen Other Lord Thirteen Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Trustee the Fund(1) Funds(2) FUNDS(3)
--------------- ------------ ------------------- --------------------
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E. Thayer Bigelow $62 $19,491 $57,720
William H.T. Bush $62 $16,396 $58,000
Robert B. Calhoun, Jr. $62 $12,530 $57,000
Stewart S. Dixon $64 $35,872 $58,500
John C. Jansing $62 $37,738 $57,250
C. Alan MacDonald $61 $29,328 $57,500
Hansel B. Millican, Jr. $62 $42,261 $57,500
Thomas J. Neff $64 $21,765 $59,660

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1. Outside directors/trustees' fees, including attendance fees for board and
committee meetings, are allocated among all Lord Abbett-sponsored funds based
on the net assets of each fund. A portion of the fees payable by the Fund to
its outside directors/trustees may be deferred at the option of a
director/trustee under an equity-based plan (the "equity-based plan") that
deems the deferred amounts to be invested in shares of the Fund for later
distribution to the directors/trustees. Effective November 1, 2000, each
director/trustee will receive an additional annual $25,000 retainer, the full
amount of which must be deferred under the equity-based plan. The amounts
ultimately received by the directors/trustees under the equity-based plan
will be directly linked to the investment performance of the funds.

The amounts of the aggregate compensation payable by the Fund as of July 31,
2000 deemed invested in fund shares, including dividends reinvested and
changes in net asset value applicable to such deemed investments, were:
Mr. Bigelow; $216, Mr. Bush, $50; Mr. Calhoun, $42; Mr. Dixon, $3,615;
Mr. Jansing, $0; Mr. MacDonald, $6,268; Mr. Millican, $1,351and Mr. Neff, $0.

2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored funds for
the 12 months ended October 31, 2000.

3. The fourth column shows aggregate compensation, including directors'/
trustees' fees and attendance fees for board and committee meetings, of a
nature referred to in footnote one, accrued by the Lord Abbett-sponsored
funds during the year ended December 31, 1999, including fees directors/
trustees have chosen to defer, but does not include amounts accrued under
the equity-based plans and shown in Column 3.

4. The equity-based plans superseded a previously approved retirement plan for
all directors/trustees. Directors had the option to convert their accrued
benefits under the retirement plan. All of the then current outside
directors/trustees except one made such election. Mr. Jansing chose to
continue to receive benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of service.
Thus, if Mr. Jansing were to retire and the annual retainer payable by the
funds were the same as it is today, he would receive annual retirement
benefits of $50,000.

Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years Messrs. Carper, Hilstad, and
Morris and Ms. Binstock are partners of Lord Abbett; the others are employees.
None have received compensation from the Fund.

9
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EXECUTIVE VICE PRESIDENT:

Stephen Humphrey, age 55 (with Lord Abbett since 1999, formerly Vice President
and Portfolio Manager at Chase Manhattan Bank from 1976 - 1999)

VICE PRESIDENTS:

Joan A. Binstock, age 46 (with Lord Abbett since 1999, formerly Chief Operating
Officer of Morgan Grenfell from 1996 to 1999, prior thereto Principal of Ernst &
Young LLP)

Daniel E. Carper, age 48

Paul A. Hilstad, age 57, Vice President and Secretary

Lawrence H. Kaplan, age 43 (with Lord Abbett since 1997 - formerly Vice
President and Chief Counsel of Salomon Brothers Asset Management Inc. from 1995
to 1997, prior thereto Senior Vice President, Director and General Counsel of
Kidder Peabody Asset Management, Inc.)

Robert G. Morris, age 56

A. Edward Oberhaus, III, age 40

Tracie E. Richter, age 32 (with Lord Abbett since 1999, formerly Vice President
- Head of Fund Administration of Morgan Grenfell from 1998 to 1999, Vice
President of Bankers Trust from 1996 to 1998, prior thereto Tax Associate of
Goldman Sachs)

Christina T. Simmons, age 43 (with Lord Abbett since 1999, formerly Assistant
General Counsel of Prudential Investments from 1998 to 1999, prior thereto
Counsel of Drinker, Biddle & Reath LLP, a law firm, from 1985 to 1998)

Roselia St. Louis, age 33 (with Lord Abbett since 2000 - formerly, assistant
portfolio manager of United Church Pension Boards)

TREASURER:
Francie W. Tai, age 35 (with Lord Abbett since 2000, formerly Manager of Goldman
Sachs from 1997 to 2000, prior thereto Assistant Vice President of Bankers Trust
from 1994 to 1997)

CODE OF ETHICS
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, prohibiting profiting on trades of
the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored fund to the
extent contemplated by the recommendations of such Advisory Group.

10
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4.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of the date hereof, our officers and trustees, as a group, owned less than 1%
of the Fund's outstanding shares and there were no record holders of 5% or more
of the Fund's outstanding shares.

5.
INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT MANAGER
As described under "Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. Of the general partners of Lord Abbett, the following are
officers and/or trustees of the Fund: Joan A. Binstock, Daniel E. Carper,
Robert S. Dow, Paul A. Hilstad, and Robert G. Morris. The other general
partners are: Stephen I. Allen, Zane E. Brown, John E. Erard, Robert P.
Fetch, Daria L. Foster, Robert I. Gerber, W. Thomas Hudson, Stephen J.
McGruder, Michael B. McLaughlin, Robert J. Noelke, R. Mark Pennington, Eli M.
Salzmann, and Christopher J. Towle. The address of each partner is 90 Hudson
Street, Jersey City, New Jersey 07302-3973.

The services performed by Lord Abbett are described under "Management" in the
Prospectus. Under the Management Agreement, the Fund pays Lord Abbett a monthly
fee, based on average daily net assets for each month at an annual rate of .75
of 1% . This fee is allocated among the classes of the Fund based on the Fund's
average daily net assets. For the period December 15, 1999 to July 31, 2000, the
management fees paid to Lord Abbett amounted to $168,449.

The Fund pays all expenses not expressly assumed by Lord Abbett, including,
without limitation, 12b-1 expenses, outside trustees' fees and expenses,
association membership dues, legal and auditing fees, taxes, transfer and
dividend disbursing agent fees, shareholder servicing costs, expenses relating
to shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering its shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.

Although not obligated to do so, Lord Abbett may waive all or a part of its
management fees and or may assume other expenses of the Fund.

PRINCIPAL UNDERWRITER
Lord Abbett Distributor LLC, a New York limited liability company and subsidiary
of Lord Abbett, 90 Hudson Street, Jersey City, New Jersey 07302-3973, serves as
the principal underwriter for the Fund.

CUSTODIAN
The Bank of New York ("BNY"), 48 Wall Street, New York, New York, is the Fund's
custodian. In accordance with the requirements of Rule 17f-5, the Fund's Board
of Trustees have approved arrangements permitting the Fund's foreign assets not
held by BNY or its foreign branches to be held by certain qualified foreign
banks and depositories.

TRANSFER AGENT
United Missouri Bank of Kansas City, N.A., Tenth and Grand, Kansas City,
Missouri, acts as the transfer agent and dividend disbursing agent for the
Fund..

INDEPENDENT AUDITORS
Deloitte & Touche LLP, Two World Financial Center, New York, New York, are the
independent auditors of the Fund and must be approved at least annually by the
Fund's Board of Trustees to continue in such capacity. Deloitte & Touche LLP
perform audit services for the Fund, including the examination of financial
statements included in the Fund's Annual Report to Shareholders.

11
<PAGE>

6.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES

The Fund's policy is to obtain best execution on all our portfolio transactions,
which means that it seeks to have purchases and sales of portfolio securities
executed at the most favorable prices, considering all costs of the transaction,
including brokerage commissions and dealer markups and markdowns and taking into
account the full range and quality of the brokers' services. Consistent with
obtaining best execution, the Fund generally pays, as described below, a higher
commission than some brokers might charge on the same transaction. Our policy
with respect to best execution governs the selection of brokers or dealers and
the market in which the transaction is executed. To the extent permitted by law,
we may, if considered advantageous, make a purchase from or sale to another Lord
Abbett-sponsored fund without the intervention of any broker-dealer.

Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are employees of Lord Abbett. These traders do
the trading as well for other accounts -- investment companies and other
investment clients -- managed by Lord Abbett. They are responsible for obtaining
best execution.

We pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities including blocks, a willingness and ability to take
positions in securities, knowledge of a particular security or market proven
ability to handle a particular type of trade, confidential treatment, promptness
and reliability.

Some of these brokers also provide research services, at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund. Conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.

No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Lord Abbett-sponsored funds to purchase or sell portfolio
securities.

When in the opinion of Fund Management, two or more broker-dealers (either
directly or through their correspondent clearing agents) are in a position to
obtain the best price and execution, preference may be given to brokers who have
sold shares of the Fund and/or shares of other Lord-Abbett-sponsored funds, or
who have provided investment research, statistical, or other related services to
the Fund.

12
<PAGE>

If other clients of Lord Abbett buy or sell the same security at the same time
as a Lord Abbett-sponsored fund does, transactions will, to the extent
practicable, be allocated among all participating accounts in proportion to the
amount of each order and will be executed daily until filled so that each
account shares the average price and commission cost of each day. Other clients
who direct that their brokerage business be placed with specific brokers or who
invest through wrap accounts introduced to Lord Abbett by certain brokers may
not participate with a Lord Abbett-sponsored fund in the buying and selling of
the same securities as described above. If these clients wish to buy or sell the
same security as a Lord Abbett-sponsored fund does, they may have their
transactions executed at times different from our transactions and thus may not
receive the same price or incur the same commission cost as a Lord
Abbett-sponsored fund does.

For the period December 15, 1999 to July 31, 2000, we paid no commissions to
independent broker-dealers.

7.
CAPITAL STOCK AND OTHER SECURITIES

CLASSES OF SHARES. The Fund offers investors four different classes of shares in
this Statement of Additional Information. The different classes of shares
represent investments in the same portfolio of securities but are subject to
different expenses and will likely have different share prices. Investors should
read this section carefully to determine which class represents the best
investment option for their particular situation.

All shares have equal noncumulative voting rights and equal rights with respect
to dividends, assets and liquidation, except for certain class-specific
expenses. They are fully paid and nonassessable when issued and have no
preemptive or conversion rights. Additional classes or funds may be added in the
future. The Act requires that where more than one class or fund exists, each
class or fund must be preferred over all other classes or funds in respect of
assets specifically allocated to such class or fund.

Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class affected by such
matter. Rule 18f-2 further provides that a class shall be deemed to be affected
by a matter unless the interests of each class or fund in the matter are
substantially identical or the matter does not affect any interest of such class
or fund. However, the Rule exempts the selection of independent public
accountants, the approval of a contract with a principal underwriter and the
election of trustees from the separate voting requirements.

The Fund does not hold annual meetings of shareholders unless one or more
matters are required to be acted on by shareholders under the Act. Under the
Fund's Declaration of Trust, shareholder meetings may be called at any time by
certain officers of the Fund or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Fund's shareholders or upon other matters deemed to be necessary or desirable or
(ii) upon the written request of the holders of at least one-quarter of the
Fund's outstanding shares and entitled to vote at the meeting.

CLASS A SHARES. If you buy Class A shares, you pay an initial sales charge on
investments of less than $1 million (or on investments for employer-sponsored
retirement plans under the Internal Revenue Code (hereinafter referred to as
"Retirement Plans") with less than 100 eligible employees or on investments that
do not qualify to be under a "special retirement wrap program" as a program
sponsored by an authorized institution showing one or more characteristics
distinguishing it, in the opinion of Lord Abbett Distributor from a mutual fund
wrap fee program). If you purchase Class A shares as part of an investment of at
least $1 million (or for Retirement Plans with at least 100 eligible employees
or under a special retirement wrap program) in shares of one or more Lord
Abbett-sponsored funds, you will not pay an initial sales charge, but if you
redeem any of those shares within 24 months after the month in which you buy
them, you may pay to the Fund a contingent deferred sales charge ("CDSC") of 1%
except for redemptions under a special retirement wrap program. Class A shares
are subject to service and distribution fees that are currently estimated to
total annually approximately .35 of 1% of the annual net asset value of the
Class A shares. The initial sales charge rates, the CDSC and the Rule 12b-1 plan
applicable to the Class A shares are described in the Fund's prospectus.

CLASS B SHARES. If you buy Class B shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the sixth anniversary of
buying them, you will normally pay a CDSC to Lord Abbett Distributor. That CDSC
varies depending on how long you own shares. Class B shares are subject to
service and distribution fees at an

<PAGE>

annual rate of 1% of the annual net asset value of the Class B shares. The
CDSC and the Rule 12b-1 plan applicable to the Class B shares are described
in the Fund's prospectus.

CONVERSIONS OF CLASS B SHARES. The conversion of Class B shares on the eighth
anniversary of their purchase is subject to the continuing availability of a
private letter ruling from the Internal Revenue Service, or an opinion of
counsel or tax adviser, to the effect that the conversion of Class B shares does
not constitute a taxable event for the holder under Federal income tax law. If
such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the holder.

CLASS C SHARES. If you buy Class C shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the first anniversary of
buying them, you will normally pay the Fund a CDSC of 1%. Class C shares are
subject to service and distribution fees at an annual rate of 1% of the annual
net asset value of the Class C shares. The CDSC and the Rule 12b-1 plan
applicable to the C shares are described in the Fund's prospectus.

CLASS P SHARES. If you buy Class P shares, you pay no sales charge at the time
of purchase, and if you redeem your shares you pay no CDSC. Class P shares are
subject to service and distribution fees at an annual rate of .45 of 1% of the
average daily net asset value of the Class P shares. The Rule 12b-1 plan
applicable to the Class P shares is described in the Fund's prospectus. Class P
shares are available to a limited number of investors.

RULE 12B-1 PLANS
CLASS A, B, C AND P. As described in the Prospectus, the Fund has adopted a
Distribution Plan and Agreement pursuant to Rule 12b-1 of the Act for four Fund
classes: the "A Plan," the "B Plan," the "C Plan," and the "P Plan,"
respectively. In adopting each Plan and in approving its continuance, the Board
of Trustees has concluded that there is a reasonable likelihood that each Plan
will benefit its respective class and such class' shareholders. The expected
benefits include greater sales and lower redemptions of class shares, which
should allow each class to maintain a consistent cash flow, and a higher quality
of service to shareholders by authorized institutions than would otherwise be
the case. Lord Abbett uses amounts received under each Plan as described in the
Prospectus and for payments to dealers for (i) providing continuous services to
shareholders, such as answering shareholder inquiries, maintaining records, and
assisting shareholders in making redemptions, transfers, additional purchases
and exchanges and (ii) their assistance in distributing shares of the Fund.

Each Plan requires the Board of Trustees to review, on a quarterly basis,
written reports of all amounts expended pursuant to the Plan and the purposes
for which such expenditures were made. Each Plan shall continue in effect only
if its continuance is specifically approved at least annually by vote of the
Trustees, including a majority of the Trustees who are not interested persons of
the Fund and who have no direct or indirect financial interest in the operation
of the Plan or in any agreements related to the Plan ("outside trustees"), cast
in person at a meeting called for the purpose of voting on the Plan. No Plan may
be amended to increase materially above the limits set forth therein the amount
spent for distribution expenses thereunder without approval by a majority of the
outstanding voting securities of the applicable class and the approval of a
majority of the trustees, including a majority of the outside trustees. Each
Plan may be terminated at any time by vote of a majority of the outside trustees
or by vote of a majority of its class's outstanding voting securities.

CONTINGENT DEFERRED SALES CHARGES. A Contingent Deferred Sales Charge ("CDSC")
applies upon early redemption of shares regardless of class, and (i) will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price and (ii) will not be imposed on the
amount of your account value represented by the increase in net asset value over
the initial purchase price (including increases due to the reinvestment of
dividends and capital gains distributions) and upon early redemption of shares.
In the case of Class A shares, this increase is represented by shares having an
aggregate dollar value in your account. In the case of Class B and Class C
shares, this increase is represented by that percentage of each share redeemed
where the net asset value exceeded the initial purchase price.

<PAGE>

CLASS A SHARES. As stated in the Prospectus, subject to certain exceptions, a
CDSC of 1% is imposed with respect to those Class A shares (or Class A shares of
another Lord Abbett-sponsored fund or series acquired through exchange of such
shares) on which the Fund has paid the one-time distribution fee of 1% if such
shares are redeemed out of the Lord Abbett-sponsored fund within a period of 24
months from the end of the month in which the original sale occurred.

CLASS B SHARES. As stated in the Prospectus, subject to certain exceptions, if
Class B shares (or Class B shares of another Lord Abbett-sponsored fund or
series acquired through exchange of such shares) are redeemed out of the Lord
Abbett-sponsored funds for cash before the sixth anniversary of their purchase,
a CDSC will be deducted from the redemption proceeds. The Class B CDSC is paid
to Lord Abbett Distributor to reimburse its expenses, in whole or in part, for
providing distribution-related services to the Fund in connection with the sale
of Class B shares.

To minimize the effects of the CDSC or to determine whether the CDSC applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held on or after the sixth anniversary of their purchase, and (3) shares
held the longest before such sixth anniversary.

The amount of the CDSC will depend on the number of years since you invested and
the dollar amount being redeemed, according to the following schedule:

Anniversary of the Day on Contingent Deferred Sales Charge
Which the Purchase Order Was Accepted on Redemptions (As % of Amount
Subject to Charge)
<S> <C>

Before the 1st 5.0%
On the 1st, before the 2nd 4.0%
On the 2nd, before the 3rd 3.0%
On the 3rd, before the 4th 3.0%
On the 4th, before the 5th 2.0%
On the 5th, before the 6th 1.0%
On or after the 6th anniversary None

</TABLE>

In the table, an "anniversary" is the same calendar day in each respective year
after the date of purchase. All purchases are considered to have been made on
the business day on which the purchase order was accepted.

CLASS C SHARES. As stated in the Prospectus, subject to certain exceptions, if
Class C shares are redeemed for cash before the first anniversary of their
purchase, the redeeming shareholder normally will be required to pay to the Fund
on behalf of Class C shares a CDSC of 1% of the lower of cost or the then net
asset value of Class C shares redeemed. If such shares are exchanged into the
same class of another Lord Abbett-sponsored fund and subsequently redeemed
before the first anniversary of their original purchase, the charge will be
collected by the other fund on behalf of this Fund's Class C shares.

GENERAL. The percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage."

With respect to Class A and Class B shares, no CDSC is payable on redemptions by
participants or beneficiaries from employer-sponsored retirement plans under the
Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service and for returns of
excess contributions to retirement plan sponsors. With respect to Class A shares
purchased pursuant to a special retirement wrap program, no CDSC is payable on
redemptions which continue as investments in another fund participating in the
program. With respect to Class B shares, no CDSC is payable for redemptions (i)
in connection with Systematic Withdrawal Plan and Div-Move services as described
below under those headings, (ii) in connection with mandatory distribution under
403(b) plans and IRAs and (iii) in connection with death of the shareholder. In
the case of Class A and Class C shares, the CDSC is received by the Fund and is
intended to reimburse all or a portion of the amount paid by the Fund if the
shares are redeemed before the Fund has had an opportunity to realize the
anticipated benefits of having a long-term shareholder account in the Fund. In
the case of Class B shares, the CDSC is received by Lord Abbett Distributor and
is intended to reimburse its expenses of providing distribution-related service
to the Fund (including recoupment of the commission payments

<PAGE>

made) in connection with the sale of Class B shares before Lord Abbett
Distributor has had an opportunity to realize its anticipated reimbursement
by having such a long-term shareholder account subject to the B Plan
distribution fee.

In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
acquired). No CDSC will be imposed when the investor redeems (i) shares
representing an aggregate dollar amount of your account, in the case of Class A
shares, (ii) that percentage of each share redeemed, in the case of Class B and
C shares, derived from increases in the value of the shares above the total cost
of shares being redeemed due to increases in net asset value, (iii) shares with
respect to which no Lord Abbett fund paid a 12b-1 fee and, in the case of Class
B shares, Lord Abbett Distributor paid no sales charge or service fee (including
shares acquired through reinvestment of dividend income and capital gains
distributions) or (iv) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) and for one year or more (in the case of Class C
shares). In determining whether a CDSC is payable, (a) shares not subject to the
CDSC will be redeemed before shares subject to the CDSC and (b) of the shares
subject to a CDSC, those held the longest will be the first to be redeemed.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial adviser. The Fund's class-specific expenses and the
effect of the different types of sales charges on your investment will affect
your investment results over time. The most important factors are how much you
plan to invest and how long you plan to hold your investment. If your goals and
objectives change over time and you plan to purchase additional shares, you
should re-evaluate those factors to see if you should consider another class of
shares.

In the following discussion, to help provide you and your financial adviser with
a framework in which to choose a class, we have made some assumptions using a
hypothetical investment in the Fund. We used the sales charge rates that
generally apply to Class A, Class B, and Class C, and considered the effect of
the higher distribution fees on Class B and Class C expenses (which will affect
your investment return). Of course, the actual performance of your investment
cannot be predicted and will vary, based on the Fund's actual investment
returns, the operating expenses borne by each class of shares, and the class of
shares you purchase. The factors briefly discussed below are not intended to be
investment advice, guidelines or recommendations, because each investor's
financial considerations are different. The discussion below of the factors to
consider in purchasing a particular class of shares assumes that you will
purchase only one class of shares and not a combination of shares of different
classes.

HOW LONG DO YOU EXPECT TO HOLD YOUR INVESTMENT? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares. For
example, over time, the reduced sales charges available for larger purchases of
Class A shares may offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-specific expenses
on Class B or Class C shares for which no initial sales charge is paid. Because
of the effect of class-based expenses, your choice should also depend on how
much you plan to invest.

INVESTING FOR THE SHORT TERM. If you have a short-term investment horizon (that
is, you plan to hold your shares for not more than six years), you should
probably consider purchasing Class A or Class C shares rather than Class B
shares. This is because of the effect of the Class B CDSC if you redeem before
the sixth anniversary of your purchase, as well as the effect of the Class B
distribution fee on the investment return for that class in the short term.
Class C shares might be the appropriate choice (especially for investments of
less than $100,000), because there is no initial sales charge on Class C shares,
and the CDSC does not apply to amounts you redeem after holding them one year.

However, if you plan to invest more than $100,000 for the short term, then the
more you invest and the more your investment horizon increases toward six years,
the more attractive the Class A share option may become. This is because the
annual distribution fee on Class C shares will have a greater impact on your
account over the longer term than the reduced front-end sales charge available
for larger purchases of Class A shares. For example, Class A might be more
appropriate than Class C for investments of more than $100,000 expected to be
held for 5 or 6 years (or more). For investments over $250,000 expected to be
held 4 to 6 years (or more), Class A shares may become more appropriate

<PAGE>

than Class C. If you are investing $500,000 or more, Class A may become more
desirable as your investment horizon approaches 3 years or more.

For most investors who invest $1 million or more or for Retirement Plans with at
least 100 eligible employees or for investments pursuant to a special retirement
wrap program, in most cases Class A shares will be the most advantageous choice,
no matter how long you intend to hold your shares. For that reason, it may not
be suitable for you to place a purchase order for Class B shares of $500,000 or
more or a purchase order for Class C shares of $1,000,000 or more. In addition,
it may not be suitable for you to place an order for Class B or C shares for a
Retirement Plan with at least 100 eligible employees or for a special retirement
wrap program. You should discuss this with your financial advisor.

INVESTING FOR THE LONGER TERM. If you are investing for the longer term (for
example, to provide for future college expenses for your child) and do not
expect to need access to your money for seven years or more, Class B shares may
be an appropriate investment option, if you plan to invest less than $100,000.
If you plan to invest more than $100,000 over the long term, Class A shares will
likely be more advantageous than Class B shares or Class C shares, as discussed
above, because of the effect of the expected lower expenses for Class A shares
and the reduced initial sales charges available for larger investments in Class
A shares under the Fund's Rights of Accumulation.

Of course, these examples are based on approximations of the effect of current
sales charges and expenses on a hypothetical investment over time, and should
not be relied on as rigid guidelines.

ARE THERE DIFFERENCES IN ACCOUNT FEATURES THAT MATTER TO YOU? Some account
features are available in whole or in part to Class A, Class B and Class C
shareholders. Other features (such as Systematic Withdrawal Plans) might not be
advisable in non-Retirement Plan accounts for Class B shareholders (because of
the effect of the CDSC on the entire amount of a withdrawal if it exceeds 12%
annually) and in any account for Class C shareholders during the first year of
share ownership (due to the CDSC on withdrawals during that year). See
"Systematic Withdrawal Plan" under "Shareholder Services" in the Prospectus for
more information about the 12% annual waiver of the CDSC. You should carefully
review how you plan to use your investment account before deciding which class
of shares you buy. For example, the dividends payable to Class B and Class C
shareholders will be reduced by the expenses borne solely by each of these
classes, such as the higher distribution fee to which Class B and Class C shares
are subject.

HOW DOES IT AFFECT PAYMENTS TO MY BROKER? A salesperson, such as a broker, or
any other person who is entitled to receive compensation for selling Fund shares
may receive different compensation for selling one class than for selling
another class. As discussed in more detail below, such compensation is primarily
paid at the time of sale in the case of Class A and B shares and is paid over
time, so long as shares remain outstanding, in the case of Class C shares. It is
important that investors understand that the primary purpose of the CDSC for the
Class B shares and the distribution fee for Class B and Class C shares is the
same as the purpose of the front-end sales charge on sales of Class A shares: to
compensate brokers and other persons selling such shares. The CDSC, if payable,
supplements the Class B distribution fee and reduces the Class C distribution
fee expenses for the Fund and Class C shareholders.

8.
PURCHASES, REDEMPTIONS
AND PRICING

Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions," respectively.

As disclosed in the Prospectus, we calculate the Fund's net asset value as of
the close of the New York Stock Exchange ("NYSE") on each day that the NYSE is
open for trading by dividing our total net assets by the number of shares
outstanding at the time of calculation. The NYSE is closed on Saturdays and
Sundays and the following holidays -- New Year's Day, Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.

<PAGE>

sales price, or, if there is no sale on that day, at the mean between the last
bid and asked price, or, in the case of bonds, in the over-the-counter market
if, in the judgment of the Fund's officers, that market more accurately reflects
the market value of the bonds. Over-the-counter securities not traded on the
NASDAQ National Market System are valued at the mean between the last bid and
asked prices. Securities for which market quotations are not available are
valued at fair market value under procedures approved by the Board of Trustees.

For each class of shares, the net asset value will be determined by taking the
net assets and dividing by the number of shares outstanding.

NET ASSET VALUE PURCHASES OF CLASS A SHARES. As stated in the Prospectus, our
Class A shares may be purchased at net asset value by our trustees, employees of
Lord Abbett, employees of our shareholder servicing agent and employees of any
securities dealer having a sales agreement with Lord Abbett who consents to such
purchases or by the director or custodian under any pension or profit-sharing
plan or Payroll Deduction IRA established for the benefit of such persons or for
the benefit of employees of any national securities trade organization to which
Lord Abbett belongs or any company with an account(s) in excess of $10 million
managed by Lord Abbett on a private-advisory-account basis. For purposes of this
paragraph, the terms "directors" and "employees" include a director's or
employee's spouse (including the surviving spouse of a deceased director or
employee). The terms "our directors" and "employees of Lord Abbett" also include
retired directors and employees and other family members thereof.

Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for Lord Abbett Series Fund ("LASF") which offers
its shares only in connection with certain variable annuity contracts, (c) under
the loan feature of the Lord Abbett-sponsored prototype 403(b) plan for share
purchases representing the repayment of principal and interest, (d) by certain
authorized brokers, dealers, registered investment advisers or other financial
institutions who have entered into an agreement with Lord Abbett Distributor in
accordance with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, ("mutual fund wrap fee program"), (e)
by employees, partners and owners of unaffiliated consultants and advisors to
Lord Abbett, Lord Abbett Distributor or Lord Abbett-sponsored funds who consent
to such purchase if such persons provide service to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such
funds, (f) through Retirement Plans with at least 100 eligible employees, (g) in
connection with a merger, acquisition or other reorganization (h) through a
"special retirement wrap program" sponsored by an authorized institution having
one or more characteristics distinguishing it, in the opinion of Lord Abbett
Distributor, from a mutual fund wrap program. Such characteristics include,
among other things, the fact that an authorized institution does not charge its
clients any fee of a consulting or advisory nature that is economically
equivalent to the distribution fee under Class A 12b-1 Plan and the fact that
the program relates to participant-directed Retirement Plan. Shares are offered
at net asset value to these investors for the purpose of promoting goodwill with
employees and others with whom Lord Abbett Distributor and/or the Fund has
business relationships.

The maximum offering price of the Fund's Class A shares on July 31, 2000 was
computed as follows:

Net asset value per share (net assets
Divided by shares outstanding $10.57

Maximum offering price per share
(net asset value divided by .9425) $12.55

The Fund has entered into a distribution agreement with Lord Abbett Distributor
under which Lord Abbett Distributor is obligated to use its best efforts to find
purchasers for the share of the Fund, and to make reasonable efforts to sell
Fund shares so long as, in Lord Abbett Distributor's judgment, a substantial
distribution can be obtained by reasonable efforts.

Year Ended July 31,

2000

Gross sales charge $894,430

Amount allowed to dealers $760,423

Net commissions received by
Lord Abbett $134,007

EXCHANGES. The Prospectus briefly describes the Telephone Exchange Privilege.
You may exchange some or all of your shares of any class for those in the same
class of: (i) Lord Abbett-sponsored funds currently offered to the public with a
sales charge (front-end, back-end or level ), (ii) Lord Abbett U.S. Government
Securities Money Market Fund, Inc. ("GSMMF"), or (iii) any authorized
institution's affiliated money market fund satisfying Lord Abbett Distributor as
to certain omnibus account and other criteria, hereinafter referred to as an
"authorized money market fund" or "AMMF", to the extent offers and sales may be
made in your state. You should read the prospectus of the other fund before
exchanging. In establishing a new account by exchange, shares of the Fund being
exchanged must have a value equal to at least the minimum initial investment
required for the other fund into which the exchange is made.

+-Shareholders in other Lord Abbett-sponsored funds and AMMF have the same right
to exchange their shares for the corresponding class of the Fund's shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fund in Kansas City if the instructions are received in proper
form prior to the close of the NYSE. No sales charges are imposed except in the
case of exchanges out of GSMMF or AMMF (unless a sales charge (front-end,
back-end or level) was paid on the initial investment in a Lord Abbett-sponsored
fund). Exercise of the exchange privilege will be treated as a sale for federal
income tax purposes, and, depending on the circumstances, a gain or loss

may be recognized. In the case of an exchange of shares that have been held
for 90 days or less where no sales charge is payable on the exchange, the
original sales charge incurred with respect to the exchanged shares will be
taken into account in determining gain or loss on the exchange only to the
extent such charge exceeds the sales charge that would have been payable on
the acquired shares had they been acquired for cash rather than by exchange.
The portion of the original sales charge not so taken into account will
increase the basis of the acquired shares.

Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are AMMF and other Lord Abbett-sponsored funds which are eligible for the
exchange privilege, except LASF which offers its shares only in connection with
certain variable annuity contracts.

The other funds and series which participate in the Telephone Exchange Privilege
[except (a) GSMMF, (b) certain series of Lord Abbett Tax-Free Income Fund and
Lord Abbett Tax-Free Income Trust for which a Rule 12b-1 Plan is not yet in
effect, and (c) AMMF (collectively, the "Non-12b-1 Funds")] have instituted a
CDSC for each class on the same terms and conditions. No CDSC will be charged on
an exchange of shares of the same class between Lord Abbett funds or between
such funds and AMMF. Upon redemption of shares out of the Lord Abbett family of
funds or out of AMMF, the CDSC will be charged on behalf of and paid: (i) to the
fund in which the original purchase (subject to a CDSC) occurred, in the case of
the Class A and Class C shares and (ii) to Lord Abbett Distributor if the
original purchase was subject to a CDSC, in the case of the Class B shares.
Thus, if shares of a Lord Abbett fund are exchanged for shares of the same class
of another such fund and the shares of the same class tendered ("Exchanged
Shares") are subject to a CDSC, the CDSC will carry over to the shares of the
same class being acquired, including GSMMF and AMMF ("Acquired Shares"). Any
CDSC that is carried over to Acquired Shares is calculated as if the holder of
the Acquired Shares had held those shares from the date on which he or she
became the holder of the Exchanged Shares. Although the Non-12b-1 Funds will not
pay a distribution fee on their own shares, and will, therefore, not impose
their own CDSC, the Non-12b-1 Funds will collect the CDSC (a) on behalf of other
Lord Abbett funds, in the case of the Class A and Class C shares and (b) on
behalf of Lord Abbett Distributor, in the case of the Class B shares. Acquired
Shares held in GSMMF and AMMF which are subject to a CDSC will be credited with
the time such shares are held in GSMMF but will not be credited with the time
such shares are held in AMMF. Therefore, if your Acquired Shares held in AMMF
qualified for no CDSC or a lower Applicable Percentage at the time of exchange
into AMMF, that Applicable Percentage will apply to redemptions for cash from
AMMF, regardless of the time you have held Acquired Shares in AMMF.

LETTER OF INTENTION. Under the terms of the Letter of Intention as described in
the Prospectus you may invest $100,000 or more over a 13-month period in shares
of a Lord Abbett-sponsored fund (other than shares of LASF, GSMMF and AMMF,
unless holdings in GSMMF and AMMF are attributable to shares exchanged from a
Lord Abbett-sponsored fund offered with a front-end, back-end or level sales
charge). Shares currently owned by you are credited as purchases (at their
current offering prices on the date the Letter is signed) toward achieving the
stated investment and reduced initial sales charge for Class A shares. Class A
shares valued at 5% of the amount of intended purchases are escrowed and may be
redeemed to cover the additional sales charge payable if the Letter of Intention
is not completed. The Letter of Intention is neither a binding obligation on you
to buy, nor on the Fund to sell, the full amount indicated.

RIGHTS OF ACCUMULATION. As stated in the Prospectus, purchasers (as defined in
the Prospectus) may accumulate their investment in Lord Abbett-sponsored funds
(other than LASF, GSMMF, and AMMF unless holdings in GSMMF or AMMF are
attributable to shares exchanged from a Lord Abbett-sponsored fund offered with
a front-end, back-end or level sales charge) so that a current investment, plus
the purchaser's holdings valued at the current maximum offering price, reach a
level eligible for a discounted sales charge for Class A shares.

REDEMPTIONS. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See the Prospectus for expedited redemption procedures.

<PAGE>

The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.

Our Board of Trustees may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 6 months' prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.

DIV-MOVE. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account of any class into an existing account of the
same class in any other Eligible Fund. The account must be either your account,
a joint account for you and your spouse, a single account for your spouse, or a
custodial account for your minor child under the age of 21. You should read the
prospectus of the other fund before investing.

INVEST-A-MATIC. The Invest-A-Matic method of investing in the Fund and/or any
other Eligible Fund is described in the Prospectus. To avail yourself of this
method you must complete the application form, selecting the time and amount of
your bank checking account withdrawals and the funds for investment, include a
voided, unsigned check and complete the bank authorization.

SYSTEMATIC WITHDRAWAL PLANS. The Systematic Withdrawal Plan ("SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least $10,000.
Lord Abbett prototype retirement plans have no such minimum. With respect to
Class B shares the CDSC will be waived on redemptions of up to 12% per year of
the current net asset value of your account at the time the SWP is established.
For Class B share redemptions over 12% per year, the CDSC will apply to the
entire redemption. Therefore, please contact the Fund for assistance in
minimizing the CDSC in this situation. With respect to Class C shares, the CDSC
will be waived on and after the first anniversary of their purchase. The SWP
involves the planned redemption of shares on a periodic basis by receiving
either fixed or variable amounts at periodic intervals. Since the value of
shares redeemed may be more or less than their cost, gain or loss may be
recognized for income tax purposes on each periodic payment. Normally, you may
not make regular investments at the same time you are receiving systematic
withdrawal payments because it is not in your interest to pay a sales charge on
new investments when in effect a portion of that new investment is soon
withdrawn. The minimum investment accepted while a withdrawal plan is in effect
is $1,000. The SWP may be terminated by you or by us at any time by written
notice.

RETIREMENT PLANS. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms including 401(k) plans and custodial agreements for
IRAs (Individual Retirement Accounts, including Traditional, Education, Roth and
SIMPLE IRAs and Simplified Employee Pensions), 403(b) plans and qualified
pension and profit-sharing plans. The forms name Investors Fiduciary Trust
Company as custodian and contain specific information about the plans excluding
401(k) plans. Explanations of the eligibility requirements, annual custodial
fees and allowable tax advantages and penalties are set forth in the relevant
plan documents. Adoption of any of these plans should be on the advice of your
legal counsel or qualified tax adviser.

9.
TAXATION OF THE FUND

The Fund intends to elect and to qualify for special tax treatment afforded
regulated investment companies under the Internal Revenue Code of 1986 (the
"Code"). If it so qualifies, the Fund (but not its shareholders) will be
relieved of federal income taxes on the amount it timely distributes to
shareholders. If in any taxable year the Fund does not qualify as a regulated
investment company, all of its taxable income will be taxed to the Fund at
regular corporate rates.

The Fund contemplates declaring as dividends substantially all of its net
investment income. Dividends paid by the Fund from its investment income and
distributions of its net realized short-term capital gains are taxable to
shareholders as ordinary income from dividends, whether received in cash or
reinvested in additional shares of the

<PAGE>

Fund. Distributions paid by the Fund of its net realized long-term capital
gains are taxable to shareholders as capital gains, also whether received in
cash or reinvested in shares. The Fund will send its shareholders annual
information concerning the tax treatment of dividends and other distributions.

Upon sale, exchange or redemption of shares of the Fund, a shareholder will
recognize short- or long-term capital gain or loss, depending upon the
shareholder's holding period in the Fund's shares. However, if a shareholder's
holding period in his shares is six months or less, any capital loss realized
from a sale or exchange of such shares must be treated as long-term capital loss
to the extent of dividends classified as "capital gains dividends" received with
respect to such shares. The maximum tax rates applicable to net capital gains
recognized by individuals and other non- corporate taxpayers are (i) the same as
ordinary income rates for capital assets held for one year or less and (ii) 20%
for capital assets held for more than one year. Capital gains or losses
recognized by corporate shareholders are subject to tax at the ordinary income
tax rates applicable to corporations.

Losses on the sale of shares are not deductible if, within a period beginning 30
days before the date of the sale and ending 30 days after the date of the sale,
the taxpayer acquires shares that are substantially identical.

Some shareholders may be subject to a 31% withholding tax on reportable
dividends, capital gains distributions and redemption payments ("backup
withholding"). Generally, shareholders subject to backup withholding will be
those for whom a certified taxpayer identification number is not on file with
the Fund or who, to the Fund's knowledge, have furnished an incorrect number.
When establishing an account, an investor must certify under penalties of
perjury that such number is correct and that he is not otherwise subject to
backup withholding.

The writing of call options and other investment techniques and practices which
the Fund may utilize may affect the character and timing of the recognition of
gains and losses. Such transactions may increase the amount of short-term
capital gain realized by the Fund, which is taxed as ordinary income when
distributed to shareholders.

The Fund may be subject to foreign withholding taxes, which would reduce the
yield on its investments. It is generally expected that Fund shareholders who
are subject to United States federal income tax will not be entitled to claim a
federal income tax credit or deduction for foreign income taxes paid by the
Fund.

The Fund will also be subject to a 4% non-deductible excise tax on certain
amounts not distributed or treated as having been distributed on a timely basis
each calendar year. The Fund intends to distribute to shareholders each year an
amount adequate to avoid the imposition of such excise tax.

Dividends paid by the Fund will qualify for the dividends-received deduction for
corporations to the extent they are derived from dividends paid by domestic
corporations. Corporate shareholders must have held their shares in the Fund for
more than 45 days to qualify for the deduction on dividends paid by the Fund.

Gain and loss realized by the Fund on certain transactions, including sales of
foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gain or loss is attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gain and will be reduced by the net amount, if any, of such foreign exchange
loss.

If the Fund purchases shares in certain foreign investment entities called
"passive foreign investment companies," the Fund may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on the Fund in respect of deferred taxes arising from
such distributions or gains. If the Fund were to make a "qualified electing
fund" election with respect to its investment in a passive foreign investment
company, in lieu of the foregoing requirements, the Fund might be required to
include in income each year a portion of the ordinary earnings and net capital
gains of the qualified electing fund, even if such amount were not distributed
to the Fund.

The foregoing discussion relates solely to United States federal income tax
law as applicable to United States

<PAGE>

persons (United States citizens or residents and United States domestic
corporations, partnerships, trusts and estates). Each shareholder who is not
a United States person should consult his tax adviser regarding the United
States and foreign tax consequences of the ownership of shares of a Fund,
including the applicable rate of United States withholding tax on dividends
representing ordinary income and net short-term capital gains, and the
applicability of United States gift and estate taxes.

10.
UNDERWRITER

Lord Abbett Distributor LLC, a New York limited liability company and subsidiary
of Lord Abbett, 90 Hudson Street, Jersey City, New Jersey 07302-3973, serves as
the principal underwriter for the Fund. The Fund has entered into a distribution
agreement with Lord Abbett Distributor, under which Lord Abbett Distributor is
obligated to use its best efforts to find purchasers for the shares of the Fund,
and to make reasonable efforts to sell Fund shares so long as, in Lord Abbett
Distributor's judgment, a substantial distribution can be obtained by reasonable
efforts.

11.
PERFORMANCE

The Fund computes the average annual compounded rate of total return for each
class during specified periods that would equate the initial amount invested to
the ending redeemable value of such investment by adding one to the computed
average annual total return, raising the sum to a power equal to the number of
years covered by the computation and multiplying the result by one thousand
dollars which represents a hypothetical initial investment. The calculation
assumes deduction of the maximum sales charge (as described in the next
paragraph) from the amount invested and reinvestment of all income dividends and
capital gains distributions on the reinvestment dates at prices calculated as
stated in the Prospectus. The ending redeemable value is determined by assuming
a complete redemption at the end of the period covered by the average annual
total return computation.

In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment (unless the return is shown at net asset value). For Class B
shares, the payment of the applicable CDSC (5.0% prior to the first anniversary
of purchase, 4.0% prior to the second anniversary of purchase, 3.0% prior to the
third and fourth anniversaries of purchase, 2.0% prior to the fifth anniversary
of purchase, 1.0% prior to the sixth anniversary of purchase and no CDSC on and
after the sixth anniversary of purchase) is applied to the Fund's investment
result for that class for the time period shown (unless the total return is
shown at net asset value). For Class C shares, the 1.0% CDSC is applied to the
Fund's investment result for that class for the time period shown prior to the
first anniversary of purchase (unless the total return is shown at net asset
value). Total returns also assume that all dividends and capital gains
distributions during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.

Yield quotation for each Class is based on a 30-day period ended on a specified
date, computed by dividing our net investment income per share earned during the
period by the maximum offering price per share of such Class on the last day of
the period. This is determined by finding the following quotient: take the
Class' dividends and interest earned during the period minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of shares of such Class outstanding during the period that were entitled to
receive dividends and (ii) the maximum offering price per share of such Class on
the last day of the period. To this quotient add one. This sum is multiplied by
itself five times. Then one is subtracted from the product of this
multiplication and the remainder is multiplied by two. Yield for the Class A
shares reflects the deduction of the maximum initial sales charge, but may also
be shown based on the Fund's net asset value per share. Yields for Class B and C
shares do not reflect the deduction of the CDSC.

Using the computation method described above, the Fund's average annual
compounded rates of total return for the life-of-the-Fund period ending on July
31, 2000 was: -0.40%, for the Fund's Class A shares. For Class B shares, the
average annual compounded rate of total return for the life-of-the-Fund period
ending on July 31, 2000 was 0.20%. For Class C shares, the average annual
compounded rate of total return for the life-of-the-Fund period ending on July
31, 2000

<PAGE>

was 4.20%. For Class P shares, the average annual compounded rate of
total return for the life-of-the-Fund period ended July 31, 2000 was 5.40%.

These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Therefore, there is no assurance that this performance will be
repeated in the future.

12.
FINANCIAL STATEMENTS

The financial statements for the period December 15, 1999 (commencement of
operations) to July 31, 2000 and the report of Deloitte & Touche LLP,
independent auditors, on such financial statements contained in the 2000 Annual
Report to Shareholders of Lord Abbett Large-Cap Growth Fund are incorporated
herein by reference to such financial statements and report in reliance upon the
authority of Deloitte & Touche LLP as experts in auditing and accounting.

Q:\LEGAL\Lalcg\SAI 2000.doc

<PAGE>

LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION DECEMBER 1, 2000

LORD ABBETT LARGE-CAP GROWTH FUND
Y SHARES

This Statement of Additional Information is not a Prospectus. A Prospectus for
the Class Y shares of Lord Abbett Large-Cap Growth Fund may be obtained from
your securities dealer or from Lord Abbett Distributor LLC ("Lord Abbett
Distributor") at 90 Hudson Street, Jersey City, NJ 07302-3973. This Statement of
Additional Information relates to, and should be read in conjunction with, the
Prospectus dated December 1, 2000.

TABLE OF CONTENTS PAGE

1. Fund History 2
2. Investment Policies 2
3. Management of the Fund 7
4. Control Persons and Principal Holders
of Securities 11
5. Investment Advisory and Other Services 11
6. Brokerage Allocations and Other Practices 12
7. Capital Stock & Other Securities 13
8. Purchase, Redemption & Pricing 13
9. Taxation of the Fund 14
10. Underwriter 15
11. Performance 16
12. Financial Statements 16

1
<PAGE>

FUND HISTORY

The Lord Abbett Large-Cap Growth Fund (the "Fund") is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"). The Fund was formed as a business trust under
Delaware law on September 29, 1999. The Fund offers five classes of shares:
Class A, Class B, Class C, Class P, and Class Y. Only the Fund's Class Y shares
are offered in this Statement of Additional Information.

2.
INVESTMENT POLICIES

FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund is subject to the following
fundamental investment restrictions which cannot be changed without approval of
a majority of the Fund's outstanding shares.

The Fund may not:

(1) borrow money, issue senior securities or mortgage, pledge or
hypothecate its assets except to the extent permitted under the Act;

(2) engage in the underwriting of securities, except to the extent that,
in connection with the disposition of its portfolio securities or as
otherwise permitted under applicable law, it may be deemed to be an
underwriter under federal securities laws;

(3) invest more than 25% of the value of its total assets in the
securities of issuers in any particular industry (excluding
obligations issued or guaranteed by the U.S. Government, any state,
territory or possession of the United States, the District of
Columbia or any of their authorities, agencies, instrumentalities or
political subdivisions);

(4) buy or sell real estate (except that the Fund may invest in
securities directly or indirectly secured by real estate or
interests therein or issued by companies which invest in real estate
or interests therein) or commodities or commodity contracts (except
to the extent the Fund may do so in accordance with applicable law
and without registering as a commodity pool operator under the
Commodity Exchange Act as, for example, with futures contracts);

(5) make loans, except that the acquisition of or investment in debt
securities, repurchase agreements or similar instruments shall not
be subject to this restriction, and except further that the Fund may
lend its portfolio securities, provided that the lending of
portfolio securities may be made only in accordance with applicable
law; and

(6) with respect to 75% of the value of the total assets of the Fund,
(i) buy securities of any one issuer representing more than 5% of
the value of its total assets, except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities
or (ii) own more than 10% of the voting securities of such issuer.

Compliance with the investment restrictions above will be determined at the time
of the purchase or sale of the portfolio.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. In addition to policies in the
Prospectus and the investment restrictions above which cannot be changed without
shareholder approval, the Fund is also subject to the following non-fundamental
investment policies which may be changed by the Board of Trustees without
shareholder approval.

The Fund may not:

(1) make short sales of securities or maintain a short position except to the
extent permitted by applicable law;

2
<PAGE>

(2) invest knowingly more than 15% of its net assets (at the time of
investment) in illiquid securities, except for securities qualifying for
resale under Rule 144A of the Securities Act of 1933 ("Rule 144A") deemed
to be liquid by the Board of Trustees;

(3) invest in the securities of other investment companies as defined in the
Act, except as permitted by applicable law;

(4) write, purchase or sell puts, calls, straddles, spreads or combinations
thereof, except to the extent permitted in the Fund's Prospectus and
Statement of Additional Information, as they may be amended from time to
time; and

(5) buy from or sell to any of the Fund's officers, trustees, employees, or
its investment adviser any securities other than shares of the Fund.

PORTFOLIO TURNOVER RATE. For the period December 15, 1999 (commence of
operations) to July 31, 2000, the Fund's portfolio turnover rate was 14.66%.

BORROWINGS. The Fund may borrow money for temporary or emergency purposes from
banks and other financial institutions in amounts not exceeding one-third of its
total assets.

FOREIGN SECURITIES. The Fund may invest up to 10% of its net assets in foreign
securities which are primarily traded outside the United States. Foreign
investments involve special risks that are not typically associated with U.S.
dollar denominated or quoted securities of U.S. issuers. Foreign investments may
be affected by changes in currency rates, changes in foreign or U.S. laws or
restrictions applicable to such investments and changes in exchange control
regulations (i.e., currently blockage). A decline in the exchange rate of the
currency (i.e., weakening of the currency

3
<PAGE>

against the U.S. dollar) in which a portfolio security is quoted or denominated
relative to the U.S. dollar would reduce the value of the portfolio security.

Futures contracts and options on futures contracts present the following risks:

- While the Fund may benefit from the use of futures and related
options, unanticipated changes in interest rates, securities prices
or currency exchange rates may result in poorer overall performance
than if the Fund had not entered into any futures or related options
transaction.

- Because perfect correlation between a futures position and a
portfolio position that is intended to be protected is impossible to
achieve, the desired protection may not be obtained and the Fund may
be exposed to additional risk of loss.

4
<PAGE>

- The loss that the Fund may incur in entering into futures contracts
and in writing call options on futures is potentially unlimited and
may exceed the amount of the premium received.

- Futures markets are highly volatile and the use of futures may
increase the volatility of the Fund's NAV.

- As a result of the low margin deposits normally required in futures
and options on futures trading, a relatively small price movement in
a contract may result in substantial losses to the Fund.

- Futures contracts and related options may be illiquid, and exchanges
may limit fluctuations in futures contract prices during a single
day.

- Domestic and foreign securities that are not readily marketable.

- Repurchase agreements and time deposits with a notice or demand
period of more than seven days.

- Certain restricted securities, unless the Board of Trustees
determined, based upon a review of the trading markets for a
specific restricted security, that such restricted security is
eligible for resale pursuant to Rule 144A under the Securities Act
of 1933 ("144A Securities") and, therefore, is liquid.

5
<PAGE>

exceed one-third of the value of the total assets of the Fund (including the
loan collateral).

The purchase and writing of options is a highly specialized activity which
involves special investment risks. Options may be used for hedging or
cross-hedging purposes, or to seek to increase total return (which is
considered a speculative activity). The successful use of options depends in
part on the ability of the investment manager to manage future price
fluctuations and the degree of correlation between the options and securities
markets. If the investment manager is incorrect in its expectation of changes
in market prices or determination of the correlation between the securities
on which options are based and the Fund's portfolio securities, the Fund may
incur losses that it would not otherwise incur. The use of options can also
increase the Fund's transaction costs.

PREFERRED STOCK, WARRANTS AND RIGHTS. The Fund may invest in preferred stock,
warrants and rights. Preferred stocks are securities that represent an ownership
interest providing the holder with claims on the issuer's earnings and assets
before common stockholders but after bond owners. Unlike debt securities, the
obligations of an issuer of preferred stock, including dividend and other
payment obligations, may not typically be accelerated by the holders of such
preferred stock on the occurrence of an event of default or other non-compliance
by the issuer of the preferred stock.

- Obligations of the U.S. Government and its agencies and
instrumentalities.

- Commercial paper.

- Bank certificates of deposit and time deposits.

- Bankers' acceptances.

6
<PAGE>

- Repurchase agreements collateralized by these securities.

MANAGEMENT OF THE FUND

The Board of Trustees of the Fund is responsible for the management of the
business and affairs of the Fund.

The following Trustee is the managing partner of Lord, Abbett & Co. ("Lord
Abbett"), 90 Hudson Street, Jersey City, New Jersey 07302-3973. He has been
associated with Lord Abbett for over five years and is an officer, director, or
trustee of thirteen other Lord Abbett-sponsored funds.

*ROBERT S. DOW, age 55, Chairman and President

*Mr. Dow is an "interested person" as defined in the Act.

The following outside Trustees are also directors or trustees of thirteen other
Lord Abbett-sponsored funds referred to above.

E. THAYER BIGELOW, TRUSTEE
245 Park Avenue, Suite 2414
New York, New York

Senior Adviser, Time Warner Inc. (since 1998), Acting Chief Executive Officer of
Courtroom Television Network (1997 - 1998). President and Chief Executive
Officer of Time Warner Cable Programming, Inc. (1991 - 1997). Currently serves
as director of Crane Co. and Huttig Building Products Inc. Age 59.

WILLIAM H.T. BUSH, TRUSTEE
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri

Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company (since 1986). Currently serves as director of
Rightchoice Managed Care, Inc., Mississippi Valley Bancorp, DT Industries Inc.,
and Engineered Support Systems, Inc. Age 62.

ROBERT B. CALHOUN, JR., TRUSTEE
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York

STEWART S. DIXON, TRUSTEE
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois

Partner in the law firm of Wildman, Harrold, Allen & Dixon (since 1990). Age 70.

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<PAGE>

JOHN C. JANSING, TRUSTEE
162 S. Beach Road
Hobe Sound, Florida

Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Currently serves as director of Vestaur Securities and Alpine
Group, Inc. Age 75.

C. ALAN MACDONALD, TRUSTEE
415 Round Hill Road
Greenwich, Connecticut

HANSEL B. MILLICAN, JR., TRUSTEE
The Rochester Button Co.
1350 Broadway (Suite 1906)
New York, New York

President and Chief Executive Officer of Rochester Button Company (since 1991).
Currently serves as director of Polyvision Corporation. Age 72.

THOMAS J. NEFF, TRUSTEE
Spencer Stuart, U.S.
277 Park Avenue
New York, New York

Chairman of Spencer Stuart, U.S., an executive search consulting firm (since
1976). Currently serves as director of Ace, Ltd. And Exult, Inc. Age 62.

COMPENSATION DISCLOSURE
The following table summarizes the compensation for each of the
Directors/Trustees for the Fund and for all Lord Abbett-sponsored funds.

8
<PAGE>
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED JULY 31, 2000

(1) (2) (3) (4)

Equity-Based For Year Ended
Retirement Benefits December 31, 1999
Accrued by the Total Compensation
Aggregate Fund and Paid by the Fund and
Compensation Thirteen Other Lord Thirteen Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Director the Fund(1) Funds(2) Funds(3)
---------------- -------------------- ----------------------- ----------------------
<S> <C> <C> <C>

E. Thayer Bigelow $62 $19,491 $ 57,720
William H.T. Bush $62 $16,396 $ 58,000
Robert B. Calhoun, Jr. $62 $12,530 $ 57,000
Stewart S. Dixon $64 $35,872 $ 58,500
John C. Jansing $62 $37,738 $ 57,250
C. Alan MacDonald $61 $29,328 $ 57,500
Hansel B. Millican, Jr. $62 $42,261 $ 57,500
Thomas J. Neff $64 $21,765 $ 59,660
</TABLE>

1. Outside directors/trustees' fees, including attendance fees for board and
committee meetings, are allocated among all Lord Abbett-sponsored funds
based on the net assets of each fund. A portion of the fees payable by the
Fund to its outside directors/trustees may be deferred at the option of a
director/trustee under an equity-based plan (the "equity based plan") that
deems the deferred amounts to be invested in shares of the Fund for later
distribution to the directors/trustees. Effective November 1, 2000, each
director/trustee will receive an additional annual $25,000 retainer, the
full amount of which must be deferred under the equity-based plan. The
amounts ultimately received by the directors/trustees under the
equity-based plan will be directly linked to the investment performance of
the funds.

The amounts of the aggregate compensation payable by the Fund as of July
31, 2000 deemed invested in fund shares, including dividends reinvested and
changes in net asset value applicable to such deemed investments, were: Mr.
Bigelow, $216; Mr. Bush, $50; Mr. Calhoun, $42; Mr. Dixon, $3,615; Mr.
Jansing, $0; Mr. MacDonald, $6,268, Mr. Millican, $1,351; and Mr. Neff, $0.

2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored funds for
the 12 months ended October 31, 2000.

3. The fourth column shows aggregate compensation, including
directors/trustees' fees and attendance fees for board and committee
meetings, of a nature referred to in footnote one, accrued by the Lord
Abbett-sponsored funds during the year ended December 31, 1999, including
fees directors/trustees have chosen to defer, but does not include amounts
accrued under the equity-based plans and shown in Column 3.

4. The equity-based plans superceded a previously approved retirement plan for
all directors/trustees. Directors had the option to convert their accrued
benefits under the retirement plan. All of the then current outside
directors/trustees except one made such election. Mr. Jansing chose to
continue to receive benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of service.
Thus, if Mr. Jansing were to retire and the annual retainer payable by the
funds were the same as it is today, he would receive annual retirement
benefits of $50,000.

Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Messrs. Carper, Hilstad and
Morris and Ms. Binstock are partners of Lord Abbett; the others are employees.
None have received compensation from the Fund.

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<PAGE>

EXECUTIVE VICE PRESIDENT:

Stephen Humphrey, age 55, (with Lord Abbett since 1999, formerly Vice President
and Portfolio Manager at Chase Manhattan Bank from 1976-1999)

VICE PRESIDENTS:

Joan A. Binstock, age 46, (with Lord Abbett since 1999, formerly Chief Operating
Officer of Morgan Grenfell from 1996 to 1999, prior thereto Principal of Ernst &
Young LLP)

Daniel E. Carper, age 48

Paul A. Hilstad, age 57, Vice President and Secretary

Robert G. Morris, age 56

A. Edward Oberhaus, III, age 40

Tracie E. Richter, age 32, (with Lord Abbett since 1999, formerly Vice President
- Head of Fund Administration of Morgan Grenfell from 1998 to 1999, Vice
President of Bankers Trust from 1996 to 1998, prior thereto Tax Associate of
Goldman Sachs).

Roselia St. Louis, age 33 (with Lord Abbett since 2000 - formerly, assistant
portfolio manager of United Church Pension Boards)

TREASURER:
Francie W. Tai, age 35 (with Lord Abbett since 2000, formerly Manager of Goldman
Sachs from 1997 to 2000, prior thereto Assistant Vice President of Bankers Trust
from 1994 to 1997)

10
<PAGE>

4.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of the date hereof, our officers and trustees, as a group, owned less than 1%
of the Fund's outstanding shares and there were no record holders of 5% or more
of the Fund's outstanding shares.

5.
INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT MANAGER

As described under "Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. Of the general partners of Lord Abbett, the following are
officers and/or trustees of the Fund: Joan A. Binstock, Daniel E. Carper, Robert
S. Dow, Paul A. Hilstad and Robert G. Morris. The other general partners are:
Stephen I. Allen, Zane E. Brown, John E. Erad, Robert P. Fetch, Daria L. Foster,
Robert I. Gerber, W. Thomas Hudson, Stephen J. McGruder, Michael B. McLaughlin,
Robert J. Noelke, R. Mark Pennington, Eli M. Salzmann, and Christopher J. Towle.
The address of each partner is 90 Hudson Street, Jersey City, New Jersey
07302-3973.

The services performed by Lord Abbett are described under "Management" in the
Prospectus. Under the Management Agreement, the Fund pays Lord Abbett a monthly
fee, based on average daily net assets for each month at an annual rate of .75
of 1%. The fee is allocated among the classes of the Fund based on the Fund's
average daily net assets. For the period December 15, 1999 (commencement of
operations) to July 31, 2000, the management fees paid to Lord Abbett amounted
to $168,449.

Although not obligated to do so, Lord Abbett may waive all or a part of its
management fees and or may assume other expenses of the Fund.

CUSTODIAN
The Bank of New York ("BNY"), 48 Wall Street, New York, New York, is the Fund's
custodian. In accordance with the requirements of Rule 17f-5, the Fund's Board
of Trustees have approved arrangements permitting the Funds' foreign assets not
held by BNY or its foreign branches to be held by certain qualified foreign
banks and depositories.

TRANSFER AGENT
United Missouri Bank of Kansas City, N.A., Tenth and Grand, Kansas City,
Missouri, acts as the transfer agent and dividend disbursing agent for the Fund.

11
<PAGE>

6.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES

When, in the opinion of Fund Management, two or more broker-dealers (either
directly or through their correspondent clearing agents) are in a position to
obtain the best price and execution, preference may be given to brokers who have
sold shares of the Fund and/or shares of other Lord Abbett-sponsored funds, or
who have provided investment research, statistical, or other related services to
the Fund.

12
<PAGE>

7.
CAPITAL STOCK AND OTHER SECURITIES

CLASSES OF SHARES. The Fund offers investors five different classes of shares;
only Class Y shares are offered in this Statement of Additional Information. The
different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices.

Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company such as the
Company shall not be deemed to have been effectively acted upon unless approved
by the holders of a majority of the outstanding shares of each class affected by
such matter. Rule 18f-2 further provides that a class shall be deemed to be
affected by a matter unless the interest of each class or fund in the matter are
substantially identical or the matter does not affect any interest of such class
or fund. However, the Rule exempts the selection of independent public
accountants, the approval of a contract with a principal underwriter and the
election of trustees from the separate voting requirements.

8.
PURCHASES, REDEMPTIONS
AND PRICING

Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions," respectively.

The Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on any national securities exchange are valued at the last
sales price, or, if there is no sale on that day, at the mean between the last
bid and asked prices, or, in the case of bonds, in the over-the-counter market
if, in the judgment of the Funds' officers, that market more accurately reflects
the market

13
<PAGE>

value of the bonds. Over-the-counter securities, not traded on the NASDAQ
National Market System, are valued at the mean between the last bid and asked
prices. Securities for which market quotations are not available are valued at
fair market value under procedures approved by the Board of Trustees.

The net asset value per share for the Class Y shares will be determined by
taking the net assets and dividing by the number of Class Y shares outstanding.
Our Class Y shares will be offered at net asset value.

CLASS Y SHARE EXCHANGES. The Prospectus briefly describes the Telephone Exchange
Privilege. You may exchange some or all of your Class Y shares for Class Y
shares of any Lord Abbett-sponsored funds currently offering Class Y shares to
the public. You should read the prospectus of the other fund before exchanging.
In establishing a new account by exchange, shares of the fund being exchanged
must have a value equal to at least the minimum initial investment required for
the other fund into which the exchange is made.

TAXATION OF THE FUND

The Fund contemplates declaring as dividends substantially all of its net
investment income. Dividends paid by the Fund from its investment income and
distributions out of short-term capital gains are taxable to its shareholders as
ordinary income from dividends, whether received in cash or reinvested in
additional shares of the Fund. Distributions paid by the Fund of its net
realized long-term capital gains are taxable to shareholders as capital gains,
also whether received in cash or reinvested in shares. The Fund will send its
shareholders annual information concerning the tax treatment of dividends and
other distributions.

Losses on the sale of shares are not deductible if, within a period beginning 30
days before the date of the sale and

14
<PAGE>

ending 30 days after the date of the sale, the taxpayer acquires shares that are
substantially identical.

The foregoing discussion relates solely to United States federal income tax law
as applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax adviser
regarding the United States and foreign tax consequences of the ownership of
shares of the Fund, including the applicable rate of United States withholding
tax on dividends representing ordinary income and net short-term capital gains,
and the applicability of United States gift and estate taxes.

10.
UNDERWRITERS

Lord Abbett Distributor LLC, a New York limited liability company and subsidiary
of Lord Abbett, 90 Hudson Street, Jersey City, New Jersey 07302-3973, serves as
the principal underwriter for the Fund. The Fund has entered into a distribution
agreement with Lord Abbett Distributor, under which Lord Abbett Distributor is
obligated to us its best efforts to find purchasers for the shares of the Fund,
and to make reasonable efforts to sell Fund shares so long as, in Lord Abbett
Distributor's judgment, a substantial distribution can be obtained by reasonable
efforts.

15
<PAGE>

11.

PERFORMANCE

The Fund computes the average annual compounded rate of total return for Class Y
shares during specified periods that would equate the initial amount invested to
the ending redeemable value of such investment by adding one to the computed
average annual total return, raising the sum to a power equal to the number of
years covered by the computation and multiplying the result by one thousand
dollars, which represents a hypothetical initial investment. The calculation
assumes deduction of no sales charge from the initial amount invested and
reinvestment of all income dividends and capital gains distributions on the
reinvestment dates at prices calculated as stated in the Prospectus. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the annual total return computation.

In calculating total returns for Class Y shares no sales charge is deducted from
the initial investment and the return is shown at net asset value. Total returns
also assume that all dividends and capital gains distributions during the period
are reinvested at net asset value per share, and that the investment is redeemed
at the end of the period.

Our yield quotation for Class Y shares is based on a 30-day period ended on a
specified date, computed by dividing the net investment income per share earned
during the period by the net asset value per share of such class on the last day
of the period. This is determined by finding the following quotient: Take the
dividends and interest earned during the period for the class minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of class shares outstanding during the period that were entitled to receive
dividends and (ii) the net asset value per share of such class on the last day
of the period. To this quotient add one. This sum is multiplied by itself five
times. Then one is subtracted from the product of this multiplication and the
remainder is multiplied by two. Yields for Class Y shares do not reflect the
deduction of any sales charge.

These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund's investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. Therefore, there is no assurance that this performance will
be repeated in the future.

12.
FINANCIAL STATEMENTS