1940 Act File No. 811-5476
1933 Act File No. 333-01373
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. __
[X] Post-Effective Amendment No. 1
Lord Abbett Global Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
The General Motors Building, 767 Fifth Avenue
New York, New York 10153
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: 800-426-1130
Kenneth B. Cutler
Vice President and Secretary
Lord Abbett Global Fund, Inc.
The General Motors Building
767 Fifth Avenue
New York, New York 10153
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of the registration statement.
No filing fee is required because an indefinite number of shares are being
registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
It is proposed that this filing will become effective on
the date of filing pursuant to paragraph (b) of Rule 485.
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<PAGE>
<TABLE>
<CAPTION>
Lord Abbett Global Fund, Inc.
CROSS-REFERENCE SHEET
ITEMS REQUIRED BY FORM N-14
Part A
Item No. Item Caption Prospectus Caption
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<S> <C> <C>
1. Beginning of Registration Statement and Outside Cover Page of Registration Statement;
Front Cover Page of Prospectus Cover Page of Proxy Statement and
Prospectus
2. Beginning and Outside Back Cover Page of Table of Contents
Prospectus
3. Fee Table, Synopsis and Risk Factors Fee Table; Summary of Proposal
4. Information about the Transaction Summary of Proposal; Information
About the Reorganization
5. Information about the Registrant Summary of Proposal; Comparative
Information about the Acquiring Fund
and the Acquired Fund; Additional
Information; Prospectus of Lord
Abbett Global Fund, Inc. dated May
1, 1995
6. Information about the Company Being Acquired Summary of Proposal; Comparative
Information about the Acquiring Fund
and the Acquired Fund
7. Voting Information Special Meeting of Shareholders of
the Trust; Notice of Special Meeting
of Shareholders; Summary of
Proposal
8. Interest of Certain Persons and Experts Additional Information
9. Additional Information Required for Reoffering Not Applicable
by Persons Deemed to be Underwriters
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Part B Statement of Additional
Item No. Item Caption Information Caption
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<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information about the Registrant Cover Page of Proxy Statement and
Prospectus;
Acquiring Fund
State ment of
Additional
Information incor
porated by
reference.
13. Additional Information about the Company Being Cover Page of Proxy Statement and
Acquired Prospectus; Acquired Fund Statement
of Additional Information incor
porated by reference.
14. Financial Statements Pro-forma Financial Statements
Part C
Item No. Part C Caption
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15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
Signatures
</TABLE>
<PAGE>
Lord Abbett Securities Trust -
Lord Abbett Global Income Trust
Dear Shareholder:
You are cordially invited to attend the Special Meeting of Shareholders of
Lord Abbett Securities Trust scheduled to be held on June 19, 1996, at 11:00
a.m., at the General Motors Building, 767 Fifth Avenue, New York, New York. Your
Board of Trustees looks forward to greeting those shareholders who are able to
attend.
At the meeting, in addition to the appointment of auditors, you will be
asked to approve or disapprove a proposal to combine your Fund with another Lord
Abbett fund which has an investment objective and policies substantially similar
to those of your Fund. The investment policies of the other fund are proposed to
be changed from those of your Fund to provide greater uniformity among Lord
Abbett-sponsored funds and greater flexibility in the management of your Fund's
portfolio.
Such proposal, if approved, will eliminate the offering of substantially
identical funds, as well as take advantage of potential economies of scale. In
addition, the proposed combination will be a tax-free reorganization for federal
income tax purposes. Such proposal is fully described in the enclosed proxy
statement and prospectus. I encourage you to review the proxy statement and
prospectus for all the details regarding the meeting agenda.
Your Board of Trustees believes the matters proposed in the agenda are in
the best interests of the Fund and its shareholders and unanimously recommends a
vote "for" each proposal. Regardless of the number of shares you own, it is
important that they be represented and voted. Accordingly, please sign, date and
mail the enclosed proxy card in the postage paid return envelope. If you have
any questions regarding the meeting agenda or need assistance in voting, please
contact our proxy solicitor, D.F. King & Co., Inc., at 1-800-207-3156.
Your prompt response will help save the Fund the expense of additional
solicitation.
Sincerely,
/s/ RONALD P. LYNCH
Ronald P. Lynch
Chairman of the Board
April 24, 1996
<PAGE>
LORD ABBETT SECURITIES TRUST -
LORD ABBETT GLOBAL INCOME TRUST
767 Fifth Avenue
New York, New York 10153
Notice to shareholders of Lord Abbett Global April 24, 1996
Income Trust (the "Acquired Fund") of a Special
Meeting of shareholders of Lord Abbett Securities
Trust to be held on June 19, 1996
Notice is given hereby to shareholders of the Acquired Fund of a special meeting
of the shareholders of Lord Abbett Securities Trust. The meeting will be held in
the offices of Lord, Abbett & Co., on the 11th floor of The General Motors
Building, 767 Fifth Avenue, New York, New York on June 19, 1996, at 11:00 a.m.
for the following purposes and to transact such other business as may properly
come before the meeting and any adjournments thereof.
ITEM 1. To consider and act upon an Agreement and Plan of Reorganization
between the Acquired Fund, a series of Lord Abbett Securities Trust,
and the Income Series, a series of Lord Abbett Global Fund, Inc. (the
"Acquiring Fund"), providing for (a) the transfer of all of the assets
of the Acquired Fund to the Acquiring Fund in exchange for shares of a
new class of the Acquiring Fund (to be designated "Class C Shares")
and the assumption by the Acquiring Fund of all of the liabilities of
the Acquired Fund, (b) the distribution of such Class C Shares to the
shareholders of the Acquired Fund and (c) the subsequent termination
of the Acquired Fund. (The investment policies and restrictions of the
Acquiring Fund are expected to differ from those of the Acquired Fund
in ways that are intended to provide greater flexibility in the
management of the portfolio of the Acquiring Fund and to provide
greater uniformity in the investment policies and restrictions among
the various Lord Abbett-sponsored funds.) A vote in favor of this Item
1 will be deemed to be a vote to authorize the Acquired Fund, as the
sole shareholder of Class C Shares prior to this reorganization, to
approve a proposed distribution plan pursuant to Section 12 of the
Investment Company Act of 1940, as amended, and Rule 12b-1 thereunder
applicable to that class.
ITEM 2. To ratify the selection of Deloitte & Touche LLP as the independent
public accountants of the Lord Abbett Securities Trust for the current
fiscal year.
By order of the Board of Trustees
Kenneth B. Cutler
Vice President and Secretary
<PAGE>
The Board of Trustees has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Acquired Fund entitled to
notice of and to vote at the meeting. Shareholders are entitled to one vote for
each share held. As of March 22, there were 1,611,349 shares of the Acquired
Fund and 138,028,692 shares of Lord Abbett Securities Trust issued and
outstanding.
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PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
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<PAGE>
Proxy Statement and Prospectus Dated April 24, 1996
Acquisition of the Assets of
Lord Abbett Global Income Trust, a series of
Lord Abbett Securities Trust
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
by and in exchange for Class C Shares of
Income Series, a series of
Lord Abbett Global Fund, Inc.
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
This Proxy Statement and Prospectus relates to Class C shares (the "Class C
shares") of the Income Series (the "Acquiring Fund"), a series of Lord Abbett
Global Fund, Inc. (the "Global Fund"), to be issued to, and in exchange for all
the assets of, Lord Abbett Global Income Trust (the "Acquired Fund" and,
together with the Acquiring Fund, the "Funds"), a series of Lord Abbett
Securities Trust (the "Trust"). The telephone number of the principal executive
office of each of the Funds is 1-800-426-1130. In exchange for such assets, the
Acquiring Fund will also assume all of the liabilities of the Acquired Fund.
Following receipt of the Acquiring Fund Class C shares, the Acquired Fund will
be terminated and the Class C shares will be distributed to the shareholders of
the Acquired Fund. The shareholders of the Acquired Fund are being asked to vote
to approve or disapprove these proposed transactions (the "Reorganization"),
which are more fully described in this Proxy Statement and Prospectus.
The Global Fund and the Trust are open-end diversified investment
management companies that seek high current income consistent with reasonable
risk. Lord, Abbett & Co. ("Lord Abbett") serves as investment manager to both
Funds.
The Class C shares of the Acquiring Fund will be a newly-created class of
shares that will share pro-rata with the existing class of Acquiring Fund shares
(the "Class A shares") in the portfolio, income and expenses of the Acquiring
Fund, except that each class will bear the expense of its own distribution and
shareholder servicing arrangements and certain other expenses. See "Information
About the Reorganization -- Shares of the Acquiring Fund." The distribution and
shareholder servicing
Any shareholder having a question regarding the meeting agenda or needing
assistance in voting, should contact the Acquired Fund's proxy solicitor, D.F.
King & Co., Inc., at 1-800-207-3156.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
arrangements for the Class C shares will be substantially the same as the
arrangements currently applicable to the Acquired Fund shares. The trustees of
the Trust believe that the proposed transaction will enable the shareholders of
the Acquired Fund to benefit from economies of scale while continuing to invest
in a portfolio of securities managed by Lord Abbett under an investment
objective identical to that of the Acquired Fund. See "Information About the
Reorganization -- Reasons for the Reorganization."
This Proxy Statement and Prospectus sets forth concisely the information
about the Acquiring Fund that a shareholder of the Acquired Fund should know
before voting on the Reorganization. It should be read and retained for future
reference. Attached as Exhibit A to this Proxy Statement and Prospectus is a
copy of the Agreement and Plan of Reorganization (the "Plan") for the
Reorganization. This Proxy Statement and Prospectus is accompanied by the
Prospectus of the Acquiring Fund dated May 1, 1995 (the "Acquiring Fund
Prospectus"), which Prospectus is incorporated by reference herein. Also
incorporated herein by reference are (a) the Statement of Additional Information
dated the date hereof relating to this Proxy Statement and Prospectus, including
the Statement of Additional Information of the Trust dated March 1, 1996 and the
Statement of Additional Information of the Acquiring Fund dated May 1, 1995, and
(b) the Prospectus of the Trust dated March 1, 1996 (the "Acquired Fund
Prospectus"). Such Statements of Additional Information and the Acquired Fund
Prospectus are available, upon oral or written request, and at no charge, from
the Acquiring Fund, at its above-noted address or by calling 1-800-874-3733.
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TABLE OF CONTENTS
SPECIAL MEETING OF SHAREHOLDERS OF THE TRUST............................... 2
FEE TABLE.................................................................. 3
ITEM 1. - APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION............. 5
SUMMARY OF PROPOSAL.................................................. 5
INFORMATION ABOUT THE REORGANIZATION................................. 7
COMPARATIVE INFORMATION ABOUT THE
ACQUIRING FUND AND THE ACQUIRED FUND.......................... 11
REQUIRED VOTE............................................................. 14
ITEM 2. - RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS...................................... 14
<PAGE>
ADDITIONAL INFORMATION.................................................... 15
Exhibit A - Agreement and Plan of Reorganization
Exhibit B - Comparison of Certain Investment Policies and Restrictions
2
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS OF THE TRUST
This Prospectus and Proxy Statement is furnished in connection with the
solicitation of proxies by and on behalf of the Board of Trustees of the Trust
on behalf of the Acquired Fund to be used at a Special Meeting of Shareholders
of the Trust to be held at 11:00 a.m. on June 19, 1996, at the offices of Lord
Abbett on the 11th floor of the General Motors Building, 767 Fifth Avenue, New
York, New York 10153, and at any adjournments thereof. This Prospectus and Proxy
Statement and the enclosed proxy card are first being mailed to shareholders of
the Acquired Fund on or about April 24, 1996.
At the close of business on March 22, 1996 (the "Record Date"), there were
issued and outstanding 1,611,369 shares of the Acquired Fund and 138,028,692
shares of the Trust. Only shareholders of record as of the close of business on
the Record Date will be entitled to notice of, and to vote at, the meeting or
any adjournment thereof. Shareholders of the Trust are entitled to one vote for
each share. Under Delaware law, shares owned by two or more persons (whether as
joint tenants, co-fiduciaries or otherwise) will be voted as follows, unless a
written instrument or court order providing to the contrary has been filed with
the Secretary of the Trust: (1) if only one votes, that vote binds all; (2) if
more than one votes, the vote of the majority binds all; and (3) if more than
one votes and the vote is evenly divided, the vote will be cast proportionately.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon. A
proxy may be revoked by the signer at any time at or before the meeting by
written notice to the Trust, by execution of a later-dated proxy or by voting in
person at the meeting. Unless revoked, all valid proxies will be voted in
accordance with the specifications thereon or, in the absence of such
specifications, FOR approval of the Plan and the Reorganization, FOR
ratification of the selection of Deloitte & Touche as the Trust's independent
public accountants and on any other matters as deemed appropriate.
Proxies will be solicited by mail. Additional solicitations may be made by
telephone, facsimile or personal contact by officers or employees of Lord Abbett
and its affiliates. The Trust may also request brokerage houses, custodians,
nominees, and fiduciaries who are shareholders of record to forward proxy
material to the beneficial owners. D.F. King & Co. has been retained to assist
in the solicitation of proxies at an estimated cost of $700. The cost of the
solicitation will be borne by the Acquired Fund.
In the event that sufficient votes to approve the Plan are not received by
the meeting date, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. In
determining whether to adjourn the meeting, the following factors may be
considered: the percentage of votes actually cast, the percentage of negative
votes actually cast and the nature of any further solicitation and any
information to be provided to shareholders with respect to such a solicitation.
Any such adjournment will require an affirmative vote of a majority of the
shares present in person or by proxy and entitled to vote at the meeting. The
persons named as proxies will vote upon such adjournment after consideration of
the best interests of all shareholders.
3
<PAGE>
FEE TABLE
Set forth on the following page is a summary of the expenses of the shares
of the Acquiring Fund (currently, the only class of Acquiring Fund shares, to be
designated "Class A". Also set forth on the following page is a summary
comparison of the expenses of (a) the shares of the Acquired Fund and (b) on a
pro-forma basis after giving effect to the Reorganization, the Class C shares of
the Acquiring Fund (to be issued in the Reorganization in exchange for the
shares of the Acquired Fund). The annual operating expenses shown in the
summaries for the Acquiring Fund shares and the Acquired Fund shares are the
actual expenses for the fiscal years ended December 31, 1995 and October 31,
1995, respectively, and those shown on a pro-forma basis for the Class C shares
of the Acquiring Fund are the estimated expenses of such shares for the year
ended December 31, 1995 had the Reorganization occurred on January 1, 1995. The
example set forth below is not a representation of past or future expenses.
Actual expenses may be greater or less than those shown.
4
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<TABLE>
<CAPTION>
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Acquiring Fund shares Acquiring Fund
Shareholder Transaction Expenses (to be designated Class C shares
(as a percentage of offering price) Class A) Acquired Fund shares (pro-forma)
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<S> <C> <C> <C>
Maximum Sales Load on Purchases(1)....... 4.75%(2) None(3) None(3)
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Deferred Sales Load (1).................. None(2) 1.00%(4) 1.00%(4)
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Annual Operating Expenses
(as a percentage of average net assets)
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Management Fee........................ 0.50% 0.00%(5) 0.50%
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Rule 12b-1 Fees....................... 0.25%(2) 0.94%(3) 0.94%(3)
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Other Expenses........................ 0.29% 0.11%(5) 0.29%
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Total Operating Expenses.................... 1.04% 1.05%(5) 1.73%
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Example: Assume each Fund's annual return is 5% and there is no change in the level of expenses described above. For every $1,000
invested, with reinvestment of all distributions, you would pay the following total expenses if you closed your account after the
number of years indicated.
<CAPTION>
1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
Acquiring Fund Class A shares (6) $58 $79 $102 $169
Acquired Fund shares (6) $11 $33 $58 $128
Acquiring Fund Class C shares $17 $54 $94 $204
(pro-forma)(6)
(1) Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred reimbursement charge" throughout this
Proxy Statement and Prospectus.
(2) See "Purchases" in the Acquiring Fund Prospectus accompanying this Proxy
Statement and Prospectus for descriptions of the front-end sales charges
and the 1% contingent deferred reimbursement charges payable on sales and
certain redemptions of these shares and the Rule 12b-1 plan applicable to
the shares of the Acquiring Fund.
(3) Although the Acquired Fund does not, and the Acquiring Fund will not with
respect to the Class C shares, charge a front-end sales charge, investors
should be aware that long-term shareholders may pay, under the Rule 12b-1
plan of the Acquired Fund and under the Rule 12b-1 plan to be applicable to
the Class C shares of the Acquiring Fund (which pays and will pay annual
0.25% service and 0.75% distribution fees), more than the economic
equivalent of the maximum front-end sales charge as permitted by certain
rules of the National Association of Securities Dealers, Inc.
(4) Redemptions of the Acquired Fund shares are, and redemptions of the Class C
shares will be, subject to a 1% contingent deferred reimbursement charge if
the redemption occurs before the first anniversary of the share purchase.
Holding periods for shares purchased prior to the Reorganization will carry
over for the purpose of determining the applicability of the CDRC to Class
C shares.
(5) Lord Abbett waived its management fee and subsidized certain expenses with
respect to the Acquired Fund during the past year. The management fee,
other expenses (including Rule 12b-1 Fees) and total operating expenses
would have been 0.50%, 1.57% and 2.07% respectively, absent such waivers
and subsidy. Lord Abbett has advised the Acquiring Fund that it does not
intend to waive any portion of the management fee payable by the Acquiring
Fund following the consummation of the Reorganization.
(6) Based on total actual operating expenses and pro-forma operating expenses
shown in the table above.
The foregoing is provided to assist shareholders of the Acquired Fund in
understanding the various expenses the holders of the shares of the Acquiring
Fund and the holders of shares of the Acquired Fund have incurred and that
holders of the shares of the Acquired Fund might incur as holders of the Class C
shares following the Reorganization.
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</TABLE>
5
<PAGE>
ITEM 1. - APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION
SUMMARY OF PROPOSAL
The following is a summary of certain information contained elsewhere or
incorporated by reference in this Proxy Statement and Prospectus and is
qualified in its entirety by reference to such information.
Overview of Proposed Reorganization. The Plan provides for the transfer to the
Acquiring Fund of all of the assets of the Acquired Fund in exchange for Class C
shares and the assumption by the Acquiring Fund of all of the liabilities of the
Acquired Fund. The Class C shares will then be distributed to the Acquired Fund
shareholders and the Acquired Fund will be terminated. As a result of the Reor
ganization, each shareholder of the Acquired Fund will become the owner of that
number of full and fractional Class C shares having an aggregate net asset value
equal to the aggregate net asset value of his or her shares of the Acquired
Fund, as of the close of business on the date the Acquired Fund assets are
transferred to the Acquiring Fund. Consummation of the Reorganization is subject
to the approval of the Acquired Fund's shareholders and other conditions,
including Acquiring Fund shareholder approval of an amendment to the Global
Fund's Articles of Incorporation authorizing the creation of the Class C shares.
To avoid a need to call an Acquiring Fund shareholders' meeting after the
Reorganization, shareholders of the Acquired Fund are being asked to authorize
the Acquired Fund, as the sole Class C shareholder of the Acquiring Fund before
the Reorganization, to approve the proposed distribution plan for the Class C
shares. A vote in favor of the Reorganization will be deemed also to be a vote
to authorize the Acquired Fund to take such action.
The trustees of the Acquired Fund believe that the proposed Reorganization
will enable the shareholders of the Acquired Fund to benefit on a long-term
basis from economies of scale while continuing to invest in a portfolio of
securities managed by Lord Abbett under the same investment objective as that of
the Acquired Fund. See "Information About the Reorganization -- Reasons for
Reorganization" for additional information about the reasons for the
Reorganization.
Businesses of the Acquired and Acquiring Funds. The Acquired Fund is a
diversified series of the Trust, an open-end management investment company
organized as a Delaware business trust under an Agreement and Declaration of
Trust dated February 26, 1993. The Trust offers ten series, one of which is the
Acquired Fund, each consisting of one class of shares. The Acquired Fund
commenced investment operations on January 3, 1994. As of December 31, 1995, the
Acquired Fund's net assets were approximately $8 million.
The Acquiring Fund is a diversified series of the Global Fund, an open-end
management investment company incorporated under Maryland law on February 23,
1988. To date, the Global Fund offers two series, one of which is the Acquiring
Fund, each consisting of one class of shares. As of December 31, 1995, the
Acquiring Fund's net assets were approximately $239 million.
6
<PAGE>
Investment Objectives and Policies of the Acquired Fund and the Acquiring Fund.
The Acquired Fund and Acquiring Fund have identical investment objectives: to
seek high current income consistent with reasonable risk. The two Funds also
have generally similar investment policies and restrictions. The Acquiring Fund
is seeking to revise and reclassify certain of its investment policies and
restrictions in order to provide greater flexibility in managing the investment
portfolio of the Acquiring Fund and to provide greater uniformity in the
investment policies and restrictions among the various Lord Abbett-sponsored
funds. Most importantly, a number of the investment policies and restrictions
that are classified as fundamental for the Acquired Fund are to be reclassified
as non-fundamental for the Acquiring Fund. See "Comparative Information About
the Acquiring Fund and the Acquired Fund --Investment Objectives, Policies and
Restrictions."
The portfolio of the Acquired Fund is expected to be suitable for the
Acquiring Fund, and so no significant realignment of that portfolio is expected
in connection with the Reorganization.
Purchases and Exchanges. Shares of the Acquired Fund are, and Class C shares
will be, available through certain authorized dealers at the public offering
price, which is the net asset value per share. See "Information About the
Reorganization -- Shares of the Acquiring Fund." Shareholders of the Acquired
Fund may now exchange their shares for shares of the other nine series of the
Trust and for the shares of Lord Abbett U.S. Government Securities Money Market
Fund, Inc. It is expected that holders of Class C shares will be able to
exchange their shares for Class C shares of up to 13 other funds and series
managed by Lord Abbett. Each exchange represents a sale of shares for which a
shareholder may have to recognize a gain or loss under Federal income tax
provisions.
Rule 12b-1 Plan. The Acquired Fund has adopted a plan pursuant to Section 12(b)
of the Investment Company Act of 1940 (the "1940 Act") and Rule 12b-1 thereunder
(a "Rule 12b-1 Plan"), under which it pays service and distribution fees at the
time shares are sold not to exceed 1% of the net asset value of such shares and
at each quarter-end after the first anniversary of the sale of shares at an
annual rate not to exceed 1% of the net asset value of such shares then
outstanding. As part of the Reorganization, the Acquiring Fund will adopt a Rule
12b-1 Plan applicable to the Class C shares that will be substantially the same
as the Acquired Fund's Rule 12b-1 Plan, except as noted below under "Information
About the Reorganization -- Rule 12b-1 Plan".
Dividend Policies and Options. The Acquired Fund distributes net investment
income monthly as a dividend. It may also pay supplemental dividends and capital
gains distributions in December or January. The Acquiring Fund has a similar
dividend and distribution policy. The shareholders of each Fund may reinvest
such dividends and distributions in additional shares at net asset value or take
such amounts in cash.
Redemption Procedures. The redemption procedures of the Acquired Fund and the
Acquiring Fund are substantially the same. See the Acquiring Fund Prospectus
under "Redemptions."
Tax Considerations. The consummation of the Reorganization is subject to receipt
of an opinion of counsel, substantially to the effect that, among other things,
the Reorganization will not cause a gain or loss to be recognized by the
Acquired Fund or its shareholders for federal income tax purposes. See
"Information about the Reorganization--Federal Income Tax Considerations."
7
<PAGE>
Risk Factors. Because the investment objectives of the Funds are identical, Lord
Abbett believes that the relative risks involved in investing in the Funds can
be considered similar. However, the investment policies and restrictions of the
Acquiring Fund are proposed to be made less restrictive compared to those of the
Acquired Fund in order to provide greater flexibility in the future management
of the investment portfolio of the Acquiring Fund and to provide greater
uniformity in the investment policies and restrictions among the various Lord
Abbett-sponsored funds. If the Acquiring Fund were to take to any significant
extent the actions permitted by these less restrictive policies and
restrictions, a result not now anticipated, the risks of investing in the
Acquiring Fund could be greater than those involved in investing in the Acquired
Fund. See "Comparative Information About the Acquiring Fund and the Acquired
Fund -- Investment Objectives, Policies and Restrictions".
INFORMATION ABOUT THE REORGANIZATION
The Plan. On July 12, 1996, assuming the conditions referred to below are
satisfied, the Acquired Fund will transfer all its assets to the Acquiring Fund
(the date of such transfer is referred to herein as the "Closing Date") in
exchange for (i) Class C shares of the Acquiring Fund having an aggregate net
asset value equal to the aggregate value of the assets, less liabilities, of the
Acquired Fund and (ii) the assumption by the Acquiring Fund of all the
liabilities of the Acquired Fund. The Acquired Fund will distribute as of the
Closing Date such Class C shares pro-rata to its shareholders of record,
determined as of the close of business on the Closing Date, in redemption and
cancellation of their shares of the Acquired Fund. The net asset value of Class
C shares and the value of the Acquired Fund's assets and the amount of its
liabilities will be determined as of the Closing Date in accordance with the
valuation procedures set forth in the Global Fund's Articles of Incorporation
(see "Purchases" in the Acquiring Fund Prospectus). The valuation procedures
used by the Acquiring Fund are the same as those used by the Acquired Fund.
The obligations of the Acquiring Fund and the Acquired Fund to consummate
the Reor ganization are subject to the satisfaction of certain conditions
precedent, including (a) approval and authorization of the Reorganization by the
vote of a majority of the shares of the Acquired Fund voted on the matter if a
quorum is present, (b) receipt of a favorable ruling from the Internal Revenue
Service to the effect that the issuance of various classes of shares by the
Acquiring Fund will not result in dividends or distributions of the Acquiring
Fund constituting "preferential dividends" under the Internal Revenue Code of
1986, as amended (the "Code"), (c) receipt of a favorable opinion of legal
counsel as to the federal income tax consequences of the proposed transaction as
described below under "Federal Income Tax Considerations", and (d) approval by
the shareholders of the Acquiring Fund of an amendment to its Articles of
Incorporation authorizing the creation of additional classes of shares.
The foregoing summary of the Plan does not purport to be complete, and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to, the Plan, a copy of which is attached as Exhibit A.
Reasons for the Reorganization. The Board of Trustees of the Trust and the Board
of Directors of the Global Fund, including in each case a majority who are not
"interested persons" (as defined in the 1940
8
<PAGE>
Act) of either Fund or of Lord Abbett, approved the Plan and the Reorganization
on March 14, 1996, and in this connection determined that participation in the
proposed Reorganization is in the best interests of the shareholders of each of
the Funds and that the interests of existing shareholders of the Funds will not
be diluted as a result of the Reorganization. In doing so, the boards of the two
Funds considered the estimated expenses to be incurred by the Funds in
connection with the Reorganization and several other factors, including (a) that
the shareholders of the Acquired Fund are expected to benefit from economies of
scale as shareholders of the larger Acquiring Fund, while continuing to invest
in a portfolio of securities managed by Lord Abbett under identical investment
objective, and (b) that the implementation of a multi-class fund structure for
the Acquiring Fund is expected to (i) enable investors in the Acquiring Fund to
choose the distribution option that best suits their individual situations, (ii)
facilitate distribution of the Acquiring Fund's shares, and (iii) maintain the
competitive position of the Acquiring Fund in relation to other funds that have
implemented or are seeking to implement similar distribution arrangements.
The trustees of the Trust and the directors of the Global Fund are the same
individuals.
Shares of the Acquiring Fund. On or before the Closing Date, the Acquiring Fund
will have two classes of shares, Class A shares (the existing class of the
Acquiring Fund) and Class C shares (to be received by the shareholders of the
Acquired Fund in the Reorganization). Each share of the Acquiring Fund,
regardless of class, will share pro-rata (based on net asset value) in the
portfolio and income of the Acquiring Fund and in the Acquiring Fund's expenses,
except for differences in expenses resulting from different Rule 12b-1 Plans for
the classes and certain other class specific expenses. See "Rule 12b-1 Plans"
below. After the Reorganization, Class C shares will be offered at net asset
value without an initial sales charge but if redeemed for cash before the first
anniversary of purchase, will be subject to a contingent deferred reimbursement
charge (a "CDRC") equal to 1% of the lower of their cost or then net asset
value. Holding periods for shares purchased prior to the Reorganization will
carry over for the purpose of determining the applicability of the CDRC.
After the Closing Date, the Acquiring Fund may create and issue one or more
classes of shares in addition to the Class A and C shares. Lord Abbett has
advised the Board of Directors of the Global Fund that it intends to propose to
the board in the near future that the board authorize the Acquiring Fund to
issue a third class of shares, to be designated the "Class B shares". If
authorized, the Class B shares are expected to be sold without an initial sales
charge and otherwise to be similar to the Class C shares except that (i) they
will be subject to a contingent deferred sales charge ("CDSC") that is payable
to the distributor of such shares, rather than subject to a contingent deferred
reimbursement charge payable to the Acquiring Fund, as is the case with the
Class C shares, (ii) the B-share CDSC will be substantially larger than the 1%
CDRC charged on early redemptions of Class C shares, (iii) the B-share CDSC will
apply over a period of time substantially longer than the 12 months applicable
to the C-share CDRC, and will scale down to zero over that longer period, and
(iv) the Class B shares will convert automatically into A shares at net asset
value after a period of time.
Shares of all classes of the Acquiring Fund will vote together on all
matters affecting the Acquiring Fund, except for matters, such as approval of a
Rule 12b-1 Plan, affecting only a particular class or classes. All shares voting
on a matter will have identical voting rights. All issued shares of the
Acquiring Fund are fully paid and non-assessable, and shareholders have no
preemptive or other right
9
<PAGE>
to subscribe to any additional shares. All shares within a series will have the
same rights and be subject to the same limitations with respect to dividends,
redemptions and liquidation except for differences resulting from class-specific
Rule 12b-1 plans and related service plans and certain other class-specific
expenses.
Rule 12b-1 Plans. The Acquiring Fund is adopting a Rule 12b-1 Plan for the Class
C shares (the "Class C 12b-1 Plan") substantially the same as the plan currently
in effect for the Acquired Fund, except for the changes noted below. The
Acquired Fund's plan provides for payments to dealers through Lord Abbett of
distribution and service fees (a) at the time shares are sold, not to exceed
0.75% and 0.25%, respectively, of the net asset value of the shares sold and (b)
at the end of the quarter following the first anniversary of the sale of shares,
and quarterly thereafter, at an annual rate not to exceed 0.75% and 0.25%,
respectively, of the net asset value of such shares, including any shares issued
for reinvested dividends and distributions after such first anniversary, so long
as such shares remain outstanding. Lord Abbett may retain from the quarterly
distribution fee, for the payment of distribution expenses incurred directly by
it, an amount not to exceed 0.10% of the average annual net asset value of such
shares outstanding. See the Acquired Fund Prospectus under "Purchases" for
additional information concerning the Rule 12b-1 Plan of the Acquired Fund.
There are two substantive changes in the Class C 12b-1 Plan: First,
payments under the plan may be made to all institutions and persons permitted by
applicable law and/or rules to receive such payments ("Authorized
Institutions"), rather than just to dealers, as is the case under the Acquired
Fund's plan; and Second, the other party to the Class C 12b-1 Plan is to be Lord
Abbett Distributor, LLC, a New York limited liability company, to be formed as a
subsidiary of Lord Abbett ("Lord Abbett Dis tributor"), rather than Lord Abbett
itself. Lord Abbett Distributor will take on all the underwriting functions
currently performed directly by Lord Abbett.
The Acquiring Fund will pay smaller Rule 12b-1 distribution and service
fees in connection with the Class A shares. However, the Acquiring Fund will
sell those shares subject to an initial sales charge (see the Acquiring Fund
Prospectus under "Purchases"). The Acquired Fund does not impose, and the
Acquiring Fund will not impose with respect to the Class C shares, an initial
sales charge.
The Class C 12b-1 Plan was approved on March 14, 1996, by the directors of
the Global Fund, including a majority of the directors who are not "interested
persons" of the Global Fund or the Acquiring Fund within the meaning of the 1940
Act and who will have no direct or indirect financial interest in the operations
of such plan or in any agreements related thereto. Prior to the Reorganization,
the Acquired Fund will purchase one Class C share, and as sole shareholder, will
approve the Class C 12b-1 Plan prior to that class being issued to the Acquired
Fund in the Reorganization. A vote in favor of the Reorganization will be deemed
also to be a vote to authorize the Acquired Fund to take such action.
Federal Income Tax Considerations. The consummation of the Reorganization is
conditioned upon the receipt of an opinion of Debevoise & Plimpton, legal
counsel to the Acquiring Fund and the Acquired Fund, substantially to the effect
that, for Federal income tax purposes:
10
<PAGE>
(a) no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange
for Class C shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund or upon the distribution of the Class C
shares to the Acquired Fund's shareholders;
(b) no gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund in exchange for Class C shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund;
(c) no gain or loss will be recognized by shareholders of the Acquired
Fund upon the exchange of their Acquired Fund shares for Class C shares;
(d) the aggregate tax basis of the Class C shares received by any
Acquired Fund shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the Acquired Fund shares held by such
shareholder immediately prior to the Reorganization, and the holding period
for the Class C shares to be received by any Acquired Fund shareholder will
include the period during which the Acquired Fund shares exchanged therefor
were held by such shareholder (provided that the Acquired Fund shares were
held as capital assets on the date of the Reorganization); and
(e) the tax basis of the Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the Reorganization, and the holding
period of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the
Acquired Fund.
The Funds have not sought a tax ruling from the Internal Revenue Service
with respect to the tax consequences of the Reorganization, but will act in
reliance upon the opinion of counsel. Such opinion is not binding on the
Internal Revenue Service. Since the foregoing discussion relates only to the
general Federal income tax consequences of the Reorganization, shareholders
should also consult their tax advisors as to any state or local tax consequences
of the Reorganization to them and any special circumstances that may apply in
their individual circumstances.
Expenses of the Reorganization. Expenses of the Reorganization, including legal
and accounting expense, the costs of proxy solicitation and the preparation of
this Prospectus and Proxy Statement, will be borne in part by the Acquiring Fund
and in part by the Acquired Fund. If the Reorganization is consummated, the
expenses of the Acquired Fund, to the extent not paid prior to the Closing Date,
will be assumed by the Acquiring Fund and taken into account in determining the
net assets of the Acquired Fund for the purpose of calculating the number of
Class C shares to be issued to the Acquired Fund.
Capitalization. The following table sets forth the capitalization of the
Acquiring Fund and the Acquired Fund as of December 31, 1995, and the pro-forma
capitalization of the Acquiring Fund as if the Reorganization had occurred on
that date:
11
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class C
Acquiring Acquiring
Fund Fund
Acquiring Fund Acquired Fund (pro-forma - (pro-forma -
(unaudited) (unaudited) unaudited) unaudited)
----------- ----------- ---------- ----------
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share values)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets............... $238,290 $7,867 $238,290 $7,867
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share $8.58 $ 4.86 $8.58 $8.58
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding: 27,769 1,620 27,769 918
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The foregoing table reflects a pro-forma exchange ratio of
approximately 0.4 Class C shares for each Acquired Fund share. If the
Reorganization is consummated, the actual exchange ratio may vary from this
ratio due to changes in the market value of the portfolio securities of both the
Acquiring Fund and the Acquired Fund between December 31, 1995 and the Closing
Date, and changes in the amounts of undistributed net investment income and
accrued liabilities of the Acquiring Fund and the Acquired Fund during that
period.
COMPARATIVE INFORMATION ABOUT THE
ACQUIRING FUND AND THE ACQUIRED FUND
Fees and Expenses. Both the Acquiring Fund and the Acquired Fund employ Lord
Abbett as their investment manager. Under the management agreement between the
Global Fund and Lord Abbett, the Global Fund, on behalf of the Acquiring Fund,
is obligated to pay a monthly fee, based on average daily net assets for each
month, at the annual rate of 0.50 of 1%. For the fiscal year ended December 31,
1995, the Acquiring Fund paid Lord Abbett a management fee at an annual rate of
0.50 of 1% of average daily net assets. This management agreement will continue
in effect following the Reorganization.
Under the management agreement between the Trust and Lord Abbett, the
Trust, on behalf of the Acquired Fund, is obligated to pay a monthly fee at the
annual rate of 0.50 of 1% of average daily net assets. For the fiscal year ended
October 31, 1995, Lord Abbett waived all of the management fee and subsidized
certain expenses payable by the Acquired Fund. Lord Abbett has advised the
Acquiring Fund that it does not intend to waive any portion of the management
fee payable by the Acquiring Fund following the consummation of the
Reorganization.
The management agreement provides for the Acquired Fund to repay Lord
Abbett without interest for any expenses of the Acquired Fund paid or reimbursed
by Lord Abbett, as follows: if the Acquired Fund's annual expense ratio
(determined before taking into account any fee waiver or expense payment or
reimbursement by Lord Abbett) is less than 1.95% after the first day of the
calendar quarter after the net assets of the Acquired Fund first reach $50
million (the "commencement date"), the Acquired Fund will repay Lord Abbett an
amount sufficient to increase the expense ratio to 1.95%. The Acquired Fund is
not obligated to repay any such expenses after the earlier of the termination of
the
12
<PAGE>
management agreement or the end of five full fiscal years after the commencement
date. The contingent obligation to repay such expenses, which totaled $53,658 as
of December 31, 1995, will be extinguished upon the consummation of the
Reorganization. The Acquiring Fund has no such contingent obligation.
As shown above under "Fee Table," the pro-forma expense ratio for the Class
C shares was 1.73%, compared to the actual expense ratio of 1.05% for the
Acquired Fund. If Lord Abbett had not waived its management fee and subsidized
certain expenses for the Acquired Fund, the Acquired Fund's expense ratio for
such year would have been 2.07%.
Investment Objectives, Policies and Restrictions. The Acquired Fund and
Acquiring Fund have identical investment objectives: to seek high current income
consistent with reasonable risk.
The Acquired Fund and the Acquiring Fund have substantially the same
investment policies and restrictions. However, the Acquiring Fund is seeking
approval of its shareholders to simplify and make less restrictive its
investment policies and restrictions in order to provide greater flexibility in
managing its investment portfolio and to provide greater uniformity in the
investment policies and restrictions among the various Lord Abbett-sponsored
funds. A number of the investment policies and restrictions that are classified
as fundamental for the Acquired Fund are to be re-classified as non-fundamental
for the Acquiring Fund. In other instances, certain fundamental restrictions of
the Acquired Fund are to be modified or eliminated in the case of the Acquiring
Fund. Fundamental investment restrictions may not be changed without approval of
the shareholders of a fund and the costs of shareholder meetings for these
purposes generally are borne by the fund and its shareholders. The board may
amend a non-fundamental restriction as it deems appropriate and in the best
interest of the fund and its shareholders, without incurring the costs of
seeking a shareholder vote.
The principal effect for the shareholders of the Acquired Fund of the
proposed changes in the fundamental policies of the Acquiring Fund will be to
permit the Acquiring Fund to take certain actions not now permitted to the
Acquired Fund without obtaining approval of the shareholders. The Acquiring Fund
either will not be permitted to, or does not intend to, take any such action
unless such action is approved by its Board of Directors. The board does not now
intend to approve any such action or to do so in the future unless it deems such
action to be an appropriate means of seeking the Acquiring Fund's investment
objective in the best interests of the Acquiring Fund and its shareholders, in
which case disclosure of the change would be made in the Global Fund's then
current prospectus or statement of additional information or both. Such actions,
none of which the board has a present intention of approving, involve the
following matters, among others: (i) borrowings from banks in amounts up to
one-third of total assets (and up to an additional 5% of total assets for
temporary purposes) and such short-term credits as may be necessary for the
clearance of purchases and sales of portfolio securities; (ii) loans of
portfolio securities to the extent permitted by law; (iii) purchases and sales
of securities directly or indirectly secured by real estate or interests therein
and of commodities and commodity contracts in accordance with applicable law so
long as registration would not be required as a commodity pool operator under
the Commodity Exchange Act; and (iv) pledges to secure borrowings or in
connection with the Acquiring Fund's investment policies and as permitted by
applicable law.
13
<PAGE>
A summary comparison of the fundamental and certain non-fundamental
investment policies and restrictions of the Acquired Fund and of the Acquiring
Fund as currently in effect and as proposed to be amended is set forth in
Exhibit B to this Proxy Statement and Prospectus.
For a full discussion and statement of the Acquiring Fund's investment
objectives, policies and restrictions, see "Investment Objective" and "How We
Invest" in the Acquiring Fund Prospectus and "Investment Objective and Policies"
in the Acquiring Fund Statement of Additional Information. For a full discussion
and statement of the Acquired Fund investment objectives, policies and
restrictions, see "Investment Objective" and "How We Invest" in the Acquired
Fund Prospectus and "Investment Objective and Policies" in the Acquired Fund
Statement of Additional Information. The summary comparison set forth in Exhibit
B does not purport to be complete, and is subject in all respects to, and is
qualified in its entirety by reference to, such statements of such policies and
restrictions.
Shareholders' Rights. The Acquiring Fund believes that the rights of the
Acquired Fund shareholders will not change in an adverse way as a result of the
Reorganization. After the Reorganization, the rights of the former shareholders
of the Acquired Fund (Class C shareholders of the Acquiring Fund) will be
governed by the Global Fund's Articles of Incorporation, By-Laws and applicable
Maryland law rather than by the Trust's Declaration of Trust and By-Laws and
applicable Delaware law. The operations of the Acquiring Fund will continue to
be subject to the provisions of the 1940 Act and the rules and regulations of
the Commission thereunder.
The current Board of Directors of the Global Fund comprises the same
individuals as the current Board of Trustees of the Trust. The responsibilities,
powers and fiduciary duties of the directors of the Global Fund are
substantially the same as those of the trustees of the Trust. The Global Fund's
By-Laws provide for indemnification of the directors for actual or threatened
liabilities arising out of the directors' service in their capacity as directors
of the Global Fund, subject only to the conditions and limitations of applicable
law. The Trust's Declaration of Trust provides for indemnification of the
trustees against certain liabilities and expenses, except with respect to, among
other matters, (i) any matter as to which any trustee has been adjudicated to
have not acted in good faith in the reasonable belief that his or her action was
in the best interest of the Acquired Fund, or (ii) any liability by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
duties. Trust shareholders may remove a trustee by a vote of two thirds of the
eligible shares. Global Fund shareholders may remove a director by the vote of a
majority of eligible shares.
Neither the Acquired Fund nor the Acquiring Fund regularly holds
shareholder meetings. The By-laws of both Funds provide that a meeting of
shareholders will be held upon the written request of holders of at least 25% of
votes entitled to be cast.
The foregoing is only a summary of certain rights of the shareholders of
the Acquired Fund and of the rights these shareholders will have following the
Reorganization as holders of Class C shares of the Acquiring Fund. It is not a
complete description of the Declaration of Trust of the Trust, the Articles of
Incorporation of the Global Fund, the By-Laws of either Fund or the applicable
Delaware or Maryland law. Shareholders desiring additional information about
those documents and provisions of law should refer to such Declaration of Trust,
Articles of Incorporation, By-Laws and provisions.
14
<PAGE>
REQUIRED VOTE
Approval of the Plan and the Reorganization will require the affirmative
vote of a majority of the shares of the Acquired Fund voted on the matter.
If an Acquired Fund shareholder abstains from voting on this matter, then
the shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum, but shall not be deemed to have been voted on
this matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on this matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum, but shall
not be deemed to have been voted on this matter.
If the Plan is not approved by the shareholders of the Acquired Fund, or if
the Reorganization is not consummated for any other reason, the Acquired Fund
will continue to engage in business as Lord Abbett Global Income Trust, a series
of Lord Abbett Securities Trust.
The Board of Trustees of the Trust recommends that shareholders vote FOR
the approval of the proposed Agreement and Plan of Reorganization and the
Reorganization.
ITEM 2. - RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Trustees of the Trust has selected Deloitte & Touche LLP as
the independent public accountants for the Trust for the fiscal year ending
October 31, 1996. The Act requires that such selection be submitted for
ratification or rejection at the next annual meeting of shareholders if such
meeting be held. Deloitte & Touche LLP (or a predecessor firm) acted as the
Trust's independent public accountants for the year ended October 31, 1995, and
for a number of years prior thereto. Based on in formation in the possession of
the Trust, and information furnished by Deloitte & Touche LLP, the firm has no
direct financial interest and no material indirect financial interest in the
Trust. A representative of Deloitte & Touche LLP is expected to attend the
annual meeting and will be provided with an oppor tunity to make a statement and
answer appropriate questions.
Ratification of the selection of Deloitte & Touche LLP by the shareholders
of the Trust requires the affirmative vote of a majority of the shares of the
Trust voted on this matter. If a shareholder abstains from voting on this
matter, then the shares held by such shareholder shall be deemed present at the
meeting for purposes of determining a quorum, but shall not be deemed to have
been voted on this matter. If a broker returns a "non-vote" proxy, indicating a
lack of authority to vote on this matter, then the shares covered by such
non-vote shall be deemed present at the meeting for purposes of determining a
quorum, but shall not be deemed to have been voted on this matter.
The Board of Trustees of the Trust recommends that shareholders vote to
ratify the selection of Deloitte & Touche LLP as the Trust's independent public
accountants for the fiscal year ending October 31, 1996.
15
<PAGE>
ADDITIONAL INFORMATION
To the knowledge of the Global Fund and the Trust, as of March 22, 1996, no
person owned of record or beneficially 5% or more of the outstanding shares of
the Global Fund, the Acquiring Fund, the Acquired Fund or the Trust. As of March
22, 1996, the directors and officers of the Global Fund, as a group, owned 1.07%
of the outstanding shares of the Global Fund.
The Global Fund (of which the Acquiring Fund is a series) and the Trust (of
which the Acquired Fund is a series) are subject to the informational
requirements of the Securities Exchange Act of 1934 and in accordance therewith
file reports, proxy statements and other information with the Securities and
Exchange Commission. Such reports, proxy statements and other information filed
by such entities can be inspected and copied at the public reference facilities
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C., and at
the Northeast Regional Office in New York, 7 World Trade Center, 13th Floor, New
York, New York. Copies of such material can also be obtained by mail from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549 at prescribed rates.
16
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
as of this day of , 1996, by and between Lord Abbett Global Fund, Inc. (the
"Global Fund"), a Maryland corporation, on behalf of its series the Income
Series (the "Acquiring Fund") and Lord Abbett Securities Trust (the "Securities
Trust"), a Delaware business trust, on behalf of its series Lord Abbett Global
Income Trust (the "Acquired Fund").
WHEREAS, this Agreement is intended to be and is adopted as a plan
of reorganization and liquidation within the meaning of Section 368(a)(1)(C) of
the United States Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the reorganization (the "Reorganization") will consist of
the transfer of all of the assets of the Acquired Fund in exchange for Class C
shares of capital stock of the Acquiring Fund (the "Acquiring Fund Class C
Shares" and each an "Acquiring Fund Class C Share") and the assumption by the
Acquiring Fund of all of the liabilities of the Acquired Fund and the
distribution, after the Closing Date herein referred to, of Acquiring Fund Class
C Shares to the shareholders of the Acquired Fund in termination of the Acquired
Fund, all upon the terms and conditions hereinafter set forth in this Agreement;
WHEREAS, the Securities Trust and the Global Fund are open-end,
registered investment companies of the management type;
WHEREAS, the Acquiring Fund is a series of the Global Fund;
WHEREAS, the Acquired Fund is a series of the Securities Trust and
the Acquired Fund owns securities that generally are of the character in which
the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue and currently has
outstanding a single class of shares (the "Acquiring Fund Class A Shares"), and
prior to the consummation of the Reorganization, will seek to amend its Articles
of Incorporation to provide for the authorization and issuance of shares of
additional classes of capital stock, including Acquiring Fund Class C Shares,
which will share pro rata with each other class in the portfolio, income and
expenses of the Acquiring Fund, except that each class will bear the expense of
its own distribution and shareholder servicing arrangements and certain other
expenses;
<PAGE>
WHEREAS, after the multiple class share structure is authorized by
the Acquiring Fund but before the Acquiring Fund Class C Shares are issued to
the Acquired Fund pursuant to the Reorganization, the Acquired Fund is to
purchase one Acquiring Fund Class C share and as sole shareholder approve a plan
pursuant to Section 12(b) of the Investment Company Act of 1940 (the "1940 Act")
and Rule 12b- 1 thereunder (a "Rule 12b-1 Plan") applicable to the Acquiring
Fund Class C Shares;
WHEREAS, the Board of Trustees, including a majority of the trustees
who are not "interested persons" (as defined under the 1940 Act ), of the
Securities Trust has determined that the Reorganization is in the best interests
of the Acquired Fund's shareholders and that the interests of the existing
shareholders of the Acquired Fund will not be diluted as a result of this
transaction; and
WHEREAS, the Board of Directors, including a majority of the
directors who are not "interested persons" (as defined under the 1940 Act) of
the Global Fund, has determined that the Reorganization is in the best interests
of the Acquiring Fund's shareholders and that the interests of the existing
shareholders of the Acquiring Fund will not be diluted as a result of this
transaction;
NOW THEREFORE, in consideration of the premises and of the
agreements hereinafter set forth, the parties hereto agree as follows:
1. REORGANIZATION.
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Securities
Trust will transfer assets of the Acquired Fund as set forth in paragraph 1.2 to
the Acquiring Fund, and the Acquiring Fund will in exchange therefor, (i)
deliver to the Acquired Fund the number of Acquiring Fund Class C Shares,
including fractional Acquiring Fund Class C Shares, determined by dividing the
net value of the Acquired Fund's assets so transferred computed in the manner
and as of the time and date set forth in paragraph 2.1, by the net asset value
of one Acquiring Fund Class A Share, computed in the manner and as of the time
and date set forth in paragraph 2.2; and (ii) assume all of the liabilities of
the Acquired Fund. Such transactions shall take place at the closing provided
for in paragraph 3.1 (the "Closing").
1.2. (a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all of its property, including, without
limitation, all cash, securities and dividends or interest receivables and any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
on the closing date provided in paragraph 3.1 (the "Closing Date").
2
<PAGE>
(b) The Acquiring Fund has a list of all of the Acquired Fund's
assets as of the date of execution of this Agreement. The Acquired Fund has a
statement of the Acquiring Fund's investment objectives, policies and
restrictions. The Acquired Fund reserves the right to sell any of its securities
but will not, without the prior approval of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the Acquiring
Fund is permitted to invest. The Acquiring Fund will, within a reasonable time
prior to the Closing Date, furnish the Acquired Fund with a list of the
securities, if any, on the Acquired Fund's list referred to in the first
sentence of this paragraph which do not conform to the Acquiring Fund's
investment objectives, policies and restrictions. In the event that the Acquired
Fund holds any investments which the Acquiring Fund may not hold, the Acquired
Fund will dispose of such securities prior to the Closing Date. In addition, if
it is determined that the portfolios of the Acquired Fund and the Acquiring
Fund, when aggregated, would contain investments exceeding certain percentage
limitations imposed upon the Acquiring Fund with respect to such investments,
the Acquired Fund, if requested by the Acquiring Fund, will dispose of and/or
reinvest a sufficient amount of such in vestments as may be necessary to avoid
violating such limitations as of the Closing Date.
1.3. As provided in paragraph 3.4, as soon after the Closing Date as
is conveniently practicable, the Acquired Fund will distribute pro rata to the
Acquired Fund's shareholders of record determined as of the close of business on
the Closing Date, the Acquiring Fund Class C Shares it receives pursuant to
paragraph 1.1. Such distribution will be accomplished by establishing Acquiring
Fund shareholder accounts in the names of each Acquired Fund shareholder,
representing the respective pro rata number of full and fractional Acquiring
Fund Class C Shares due each shareholder. All issued and outstanding shares of
the Acquired Fund will simultaneously be canceled on the books of the Acquired
Fund. The Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares in connection with such exchange.
1.4. Any transfer taxes payable upon issuance of Acquiring Fund
Class C Shares in a name other than the registered holder of the shares of the
Acquired Fund on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Class C Shares are to be issued and transferred.
1.5. The Acquired Fund shall, following the Closing Date and the
making of all distributions pursuant to paragraph 1.3, be terminated by a
majority of the Trust's trustees' executing an instrument pursuant to Section
5.4 of the Declaration and Agreement of Trust of the Securities Trust abolishing
the Acquired Fund. Any reporting responsibility of the Securities Trust with
respect to the
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Acquired Fund is and shall remain the responsibility of the Securities Trust up
to and including the Closing Date and following the termination of the Acquired
Fund.
2. VALUATION
2.1. The net value of the Acquired Fund's assets to be acquired by
the Acquiring Fund hereunder shall be the value of such assets, less the
Acquired Fund's liabilities assumed by the Acquiring Fund, computed as of the
close of regular trading on New York Stock Exchange, Inc. (the "NYSE") on the
Closing Date (such time and date being hereinafter called the "Valuation Date"),
using the valuation procedures set forth in the Global Fund's Articles of
Incorporation.
2.2. The net asset value of one Acquiring Fund Class A Share shall
be the net asset value per share computed as of the close of regular trading on
the NYSE on the Valuation Date, using the valuation procedures set forth in the
Global Fund's Articles of Incorporation.
2.3. All computations of value shall be made by the Acquiring Fund
and the Acquired Fund in accordance with the regular practice of the Acquiring
Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be July 12, 1996, or such other date as
the parties may agree to in writing. All acts taking place at the Closing shall
be deemed to take place simultaneously as of the close of business on the
Closing Date unless otherwise provided. The Closing shall be held as of 5:00
p.m. at the offices of [specify location in New Jersey], or at such other time
and/or place as the parties may agree.
3.2. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted
or (b) trading or the reporting of trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.3. At the Closing, the Acquired Fund shall direct its custodian to
deliver to the custodian of the Acquiring Fund, for the Acquiring Fund's
account, all of its portfolio securities and other assets held by such custodian
for the Acquired
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Fund's account, duly endorsed in proper form for transfer as appropriate, in
such condition as to constitute good delivery thereof in accordance with the
custom of the Acquiring Fund's custodian, and shall be accompanied by all
necessary federal and state stock transfer stamps or a check for the appropriate
purchase price thereof.
3.4. The Acquired Fund shall direct its transfer agent to deliver to
the transfer agent of the Acquiring Fund on the Closing Date a list of the names
and addresses of the Acquired Fund's shareholders and the number of outstanding
shares owned by each such shareholder immediately prior to the Closing. The
Acquiring Fund shall direct its transfer agent to issue and deliver a
confirmation evidencing the Acquiring Fund Class C Shares to be credited to the
Acquired Fund's account on the Closing Date to the transfer agent of the
Acquired Fund, or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Class C Shares have been credited to the Acquired Fund's account
on the books of the Acquiring Fund. At the Closing, each party shall deliver to
the other such bills of sale, checks, assignments, share certificates, if any,
receipts, assumption agreements or other documents as such other party or its
counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1. With respect to the Acquired Fund, the Securities Trust
represents and warrants to the Acquiring Fund as follows:
(a) The Securities Trust is a registered investment company
classified as a management company of the open-end type, and its
registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the 1940 Act is in full force
and effect.
(b) The Acquired Fund is a series of the Securities Trust. The
Securities Trust is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the power to own all of
its properties and assets and to carry out this Agreement.
(c) The current prospectus and statement of additional information
of the Securities Trust conform (and any prospectus or statement of
additional information of the Securities Trust issued prior to the Closing
Date will conform) in all material respects to the applicable requirements
of the Securities Act of 1933 Act, as amended (the "1933 Act"), and the
1940 Act and the rules and regulations of the Commission thereunder and do
not (and will not) include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements
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therein, in light of the circumstances under which they were (and will be)
made, not materially misleading.
(d) The Securities Trust is not, and the execution, delivery and
performance of this Agreement will not result in, a material violation of
its Declaration and Agreement of Trust or By-laws or of any agreement,
instrument, contract or other undertaking to which the Securities Trust is
a party or by which it is bound.
(e) The Securities Trust has no material contracts or other
commitments which will be terminated with liability to the Securities
Trust on, prior to or after the Closing Date.
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation or administrative proceeding or
investigation before any court or governmental body is presently pending
or to its knowledge threatened against the Securities Trust or any of the
Acquired Fund's properties or assets, which if adversely determined would
materially and adversely affect the financial condition of the Acquired
Fund or the conduct of the Acquired Fund's business. The Securities Trust
knows of no facts which might form the basis of the institution of such a
proceeding and is not party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects the business of the Acquired Fund or the ability of the
Securities Trust to consummate the transactions contemplated herein.
(g) True and correct copies of the Acquired Fund's (i) Statement of
Net Assets as at October 31, 1995 and (ii) Statements of Operations and
Changes in Net Assets for the 12-month period then ended, including the
accompanying notes, have been furnished to the Acquiring Fund. Such
Statement of Net Assets and such Statements of Operations and Changes in
Net Assets (and the accompanying notes) have been audited by Deloitte &
Touche LLP, independent certified public accountants. Such statements have
been prepared in accordance with generally accepted accounting principles
consistently applied, and such statements fairly reflect the financial
condition and the operations and changes in net assets of the Acquired
Fund as of such date and for such period, respectively. There are no known
contingent liabilities of the Acquired Fund as of such date required to be
reflected or disclosed in such Statement of Net Assets or notes in
accordance with generally accepted accounting principles that are not so
reflected or disclosed.
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(h) Since October 31, 1995, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquired Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund.
(i) The Securities Trust will file the final federal and other tax
returns of the Acquired Fund for the period ending on the Closing Date in
accordance with the Code. At the Closing Date, all federal and other tax
returns and reports of the Acquired Fund required by law to have been
filed prior to the Closing Date shall have been filed, and all federal and
other taxes shown as due on such returns shall have been paid, or
provision shall have been made for the payment thereof, and to the best of
the Securities Trust's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns.
(j) For the most recent fiscal year of its operation, the Acquired
Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(k) All issued and outstanding shares of the Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable. All of the issued and outstanding shares of
the Acquired Fund will, at the time of Closing, be held of record by the
persons and in the amounts set forth in the records of the transfer agent
as provided in paragraph 3.4. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any
shares of the Acquired Fund, nor is there outstanding any security
convertible into any shares of the Acquired Fund.
(l) At the Closing Date, the Acquired Fund will have good and
marketable title to its assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.1 and full right, power and authority to sell,
assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Fund prior to the date hereof.
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(m) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action on the part of Trust's
Trustees, and subject to the due approval of the Acquired Fund's
shareholders, this Agreement, assuming due authorization, execution and
delivery by the Acquiring Fund, constitutes a valid and binding obligation
of the Securities Trust on behalf of the Acquired Fund, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles. The
Securities Trust's Board of Trustees has called a meeting of the
Securities Trust's shareholders at which the shareholders of the Acquired
Fund are to consider and act upon this Agreement.
(n) The information furnished and to be furnished by the Securities
Trust on behalf of the Acquired Fund for use in registration statements,
proxy materials and other documents which may be necessary in connection
with the transactions contemplated hereby shall be accurate and complete
in all material respects and shall comply in all material respects with
federal securities and other laws and regulations thereunder applicable
thereto.
(o) The combined prospectus and proxy statement (the "N-14
prospectus and proxy statement") and the related statement of additional
information included in the Registration Statement on Form N-14 of the
Acquiring Fund (the "N-14 Registration Statement") did not on the
effective date of the N-14 Registration Statement contain any untrue
statement of a material fact relating to the Acquired Fund or the meeting
of the Securities Trust shareholders referred to therein or omit to state
a material fact required to be stated therein or necessary to make the
statements therein relating to the Acquired Fund or such special meeting,
in light of the circumstances under which such statements were made, not
materially misleading.
(p) The Acquiring Fund Class C Shares to be issued to the Acquired
Fund hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this
Agreement.
4.2. With respect to the Acquiring Fund, the Global Fund represents
and warrants to the Acquired Fund as follows:
(a) The Global Fund is a registered investment company classified as
a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act is in full force
and effect.
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(b) The Acquiring Fund is a series of the Global Fund. The Global
Fund is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has the power to own
all of its properties and assets and to carry out this Agreement.
(c) The current prospectus and statement of additional information
of the Global Fund conform (and any prospectus or statement of additional
information of the Global Fund issued prior to the Closing Date will
conform) in all material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder and do not (and will not) include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were (or will be) made, not materially
misleading.
(d) The Global Fund is not, and the execution, delivery and
performance of this Agreement will not result in, a material violation of
its Articles of Incorporation or By-laws or of any agreement, instrument,
contract or other undertaking to which the Global Fund is a party or by
which it is bound.
(e) The Global Fund has no material contracts or other commitments
which will be terminated with liability to the Global Fund on, prior to or
after the Closing Date.
(f) Except as otherwise disclosed in writing to and accepted by the
Acquired Fund, no litigation or administrative proceeding or investigation
before any court or governmental body is presently pending or to its
knowledge threatened against the Global Fund or any of the Acquiring
Fund's properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition or the conduct of
its business. The Global Fund knows of no facts which might form the basis
of the institution of such a proceeding and is not party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions contemplated herein.
(g) True and correct copies of the Acquiring Fund's (i) Statement of
Net Assets as at December 31, 1995, and (ii) Statements of Operation and
Changes in Net Assets for the 12-month period then ended, including the
accompanying notes, have been furnished to the Securities Trust. Such
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<PAGE>
Statement of Net Assets and such Statements of Operations and Changes in
Net Assets (and the accompanying notes) have been audited by Deloitte &
Touche LLP, independent certified public accountants. Such statements have
been prepared in accordance with generally accepted accounting principles
consistently applied, and such statements fairly reflect the financial
condition and the operations and changes in net assets of the Acquiring
Fund as of such date and for such period, respectively. There are no known
contingent liabilities of the Acquiring Fund as of such date required to
be reflected or disclosed in such Statements of Net Assets or notes in
accordance with generally accepted accounting principles that are not so
reflected or disclosed.
(h) Since December 31, 1995, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquired Fund.
(i) At the Closing Date, all federal and other tax returns and
reports of the Global Fund required by law to have been filed prior to the
Closing Date shall have been filed, and all federal and other taxes shown
as due on such returns and reports shall have been paid, or provision
shall have been made for the payment thereof, and to the best of the
Acquiring Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(j) For the most recent fiscal year of its operation, the Acquiring
Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and the
Acquiring Fund intends to do so in the future.
(k) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable, with no personal liability attaching to the
ownership thereof. The Acquiring Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any shares
of the Acquiring Fund, nor is there outstanding any security convertible
into shares of the Acquiring Fund.
(l) At the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets.
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(m) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action on the part of the Global
Fund's Board of Directors, and assuming due authorization, execution and
delivery by the Acquired Fund, this Agreement constitutes a valid and
binding obligation of the Global Fund on behalf of the Acquiring Fund,
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general equity principles.
(n) The N-14 Registration Statement (except insofar as it relates to
the Acquired Fund or the special meeting of its shareholders referred to
therein) did not on the effective date of the N-14 Registration Statement
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not materially misleading.
(o) The Acquiring Fund Class C Shares to be issued and delivered to
the Acquired Fund pursuant to the terms of this Agreement have been duly
authorized by the Board of Directors of the Global Fund, and, when issued
and delivered at the Closing in accordance with this Agreement, will be
duly and validly issued Acquiring Fund Class C Shares and will be fully
paid and non-assessable with no personal liability attaching to the
ownership thereof.
(p) The Board of Directors of the Global Fund has duly adopted (a)
articles of amendment to the Articles of Incorporation of the Global Fund
(i) authorizing the Board of Directors to create multiple classes within
series (which amendment has been duly approved by the shareholders of the
Global Fund) and (ii) designating the initial class of shares, both
outstanding and unissued shares, as Class A Shares and (b) articles
supplementary creating the Acquiring Fund Class C Shares. Such articles
have been duly filed with the State Department of Assessments and Taxation
of Maryland and copies of same have been furnished to the Securities
Trust.
5. COVENANTS
5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date. It
is understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions and any other dividends and
distributions deemed advisable.
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5.2. At or after the Closing, the Securities Trust will deliver or
otherwise make available to the Global Fund a statement of the Acquired Fund's
assets and liabilities, together with a list of the Acquired Fund's portfolio
securities showing the tax costs of such securities to it and the holding
periods of such securities, as of the Closing Date.
5.3. The Acquired Fund will assist the Acquiring Fund in obtaining
such information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund's shares.
5.4. Subject to the provisions of this Agreement, the Acquired Fund
and the Acquiring Fund each will take, or cause to be taken, all action, and do
or cause to be done all things, reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.5. Prior to the Closing Date, the Board of Trustees of the
Securities Trust will declare such dividends and distributions, payable no later
than [90] days after the Closing Date, to shareholders of record of the Acquired
Fund as of the Closing Date, which, together with all such previous dividends
and distributions, shall have the effect of distributing to the shareholders of
the Acquired Fund all of the investment company taxable income and
exempt-interest income of the Acquired Fund for all taxable years ending on or
prior to the Closing Date. The dividends and distributions declared by the
Acquired Fund shall also include all of the Acquired Fund's net capital gain
realized in all taxable years ending on or prior to the Closing Date (after
reduction for any capital loss carry forward). Such dividends and distributions
declared prior to the Closing Date shall be paid by the Acquiring Fund no later
than [90] days after the Closing Date.
5.6. As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in
such form as is reasonably satisfactory to the Acquiring Fund, a statement of
the earnings and profits of the Acquired Fund for federal income tax purposes
which will be carried over to the Acquiring Fund as a result of Section 381 of
the Code.
5.7. The Acquired Fund will provide the Acquiring Fund with any
additional information reasonably necessary for any revision of the N-14
Prospectus and Proxy Statement referred to in paragraph 4.1(o), all to be
included in any amendment to the N-14 Registration Statement, in compliance with
the 1933 Act, the
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Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act in connection
with the meeting of the Acquired Fund's shareholders to consider approval of
this Agreement and the Reorganization.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST
The obligations of the Securities Trust, on behalf of the Acquired
Fund, to consummate the transactions provided for herein shall be subject, at
its election, to the performance by the Global Fund in all material respects of
all of the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following further conditions:
6.1. All representations and warranties of the Global Fund contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date.
6.2. The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its Chairman, President or a Vice President
and its Treasurer or an Assistant Treasurer, in form reasonably satisfactory to
the Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Global Fund made in this Agreement are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE GLOBAL FUND
The obligations of the Global Fund, on behalf of the Acquiring Fund,
to consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Securities Trust in all material respects of
all the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following further conditions:
7.1. All representations and warranties of the Securities Trust
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
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7.2. The Securities Trust shall have delivered to the Acquiring Fund
on the Closing Date a certificate executed in its name by its Chairman,
President or a Vice President and its Treasurer or an Assistant Treasurer, in
form and substance satisfactory to the Acquiring Fund and dated as of the
Closing Date, to the effect that the representations and warranties of the
Securities Trust made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
SECURITIES TRUST AND THE GLOBAL FUND
If any of the conditions set forth below do not exist on the Closing
Date with respect to the Acquiring Fund or the Acquired Fund, either party to
this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the Securities
Trust's Declaration and Agreement of Trust and By-laws. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may
waive the condi tions set forth in this paragraph 8.1.
8.2. On the Closing Date, no action, suit or other proceeding shall
be pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents, orders,
rulings and permits of federal, state and local regulatory authorities
(including those of the Commission, the Internal Revenue Service and state Blue
Sky and securities authorities) deemed necessary by the Acquiring Fund or the
Acquired Fund to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order, ruling or permit would not involve a risk of
a material adverse effect on the assets or properties of the Acquiring Fund or
the Acquired Fund.
8.4. The N-14 Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or
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proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
8.5. The parties shall have received a favorable opinion of
Debevoise & Plimpton, addressed to the Global Fund and the Securities Trust and
satisfactory to the Secretary of each such party, substantially to the effect
that for federal income tax purposes:
(a) the acquisition by the Acquiring Fund of all of the assets of
the Acquired Fund solely in exchange for the issuance of Acquiring Fund
Class C Shares to the Acquired Fund and the assumption of all of the
Acquired Fund liabilities by the Acquiring Fund, followed by the
distribution by the Acquired Fund, in complete liquidation, of the
Acquiring Fund Class C Shares to the Acquired Fund shareholders in
exchange for their Acquired Fund shares, will be treated as a
"reorganization" within the meaning of Section 368(a) of the Code, and the
Acquiring Fund and the Acquired Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code;
(b) no gain or loss will be recognized by the Acquiring Fund upon
the receipt of the assets of the Acquired Fund in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of
liabilities of the Acquired Fund;
(c) no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange
for the Acquiring Fund Shares and the assumption by the Acquiring Fund of
liabilities of the Acquired Fund or upon the distribution of the Acquiring
Fund Shares to the Acquired Fund's shareholders;
(d) no gain or loss will be recognized by shareholders of the
Acquired Fund upon the exchange of their Acquired Fund shares for the
Acquiring Fund Shares;
(e) the aggregate tax basis for the Acquiring Fund Shares received
by each of the Acquired Fund's shareholders pursuant to the Reorganization
will be the same as the aggregate tax basis of the Acquired Fund shares
held by such shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund Shares to be received by each
Acquired Fund shareholder will include the period during which the
Acquired Fund shares exchanged therefor were held by such shareholder
(provided that the Acquired Fund shares were held as capital assets on the
date of the Reorganization); and
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(f) the tax basis of the Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the Reorganization, and the holding
period of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the
Acquired Fund.
Notwithstanding anything herein to the contrary, neither the Global
Fund nor the Securities Trust may waive the conditions set forth in this
paragraph 8.5.
8.6. The Acquiring Fund shall have duly adopted a Rule 12b-1 Plan
for the Acquiring Fund Class C Shares acceptable to the Securities Trust.
9. BROKERAGE FEES AND EXPENSES
9.1. The Global Fund represents and warrants to the Acquired Fund,
and the Securities Trust represents and warrants to the Acquiring Fund, that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
9.2. Except as may be otherwise provided herein, the Acquiring Fund
and the Acquired Fund each shall pay, or provide for the payment of, the
expenses incurred by it in connection with entering into and carrying out the
provisions of this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The parties hereto agree that no party has made any
representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
10.2. None of the representations and warranties included or
provided for herein shall survive the consummation of the transactions
contemplated hereby.
11. TERMINATION
11.1. This Agreement may be terminated at any time prior to the
Closing Date: (1) by the mutual agreement of the Securities Trust and the Global
Fund; (2) by the Securities Trust in the event that the Global Fund shall, or by
the Global Fund in the event that the Securities Trust shall, materially breach
any
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representation or warranty contained herein or any agreement contained herein
and to be performed at or prior to the Closing Date; or (3) by either party if a
condition herein expressed to be precedent to the obligations of the terminating
party has not been met and it reasonably appears that it will not or cannot be
met.
11.2. In the event of any such termination, there shall be no
liability for damages on the part of either the Trust, the Global Fund, the
Acquired Fund or the Acquiring Fund or their respective trustees, directors or
officers to the other party, but the Acquiring Fund and the Acquired Fund shall
each bear, or provide for the payment of, the expenses incurred by it incidental
to the preparation and carrying out of this Agreement as provided in paragraph
9.2.
12. AMENDMENTS; WAIVERS
12.1. This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed upon in writing by the authorized officers
of the Securities Trust and the Global Fund; provided, however, that following
the approval of the Acquired Fund shareholders referred to in paragraph 8.1, no
such amendment may have the effect of changing the provisions for determining
the number of the Acquiring Fund Class C Shares to be issued to the Acquired
Fund's shareholders under this Agreement to the detriment of such shareholders
without their further approval.
12.2. At or at any time prior to the Closing either party hereto may
by written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by personal
delivery addressed to Lord Abbett Securities Trust on behalf of its series Lord
Abbett Global Income Trust, 767 Fifth Avenue, New York, New York, 10153,
Attention: Office of the Secretary; or to Lord Abbett Global Fund, Inc. on
behalf of its Income Series, 767 Fifth Avenue, New York, New York, 10153,
Attention: Office of the Secretary.
17
<PAGE>
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
14.1. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
14.4. (a) This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm, corporation or other entity, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
18
<PAGE>
(b) The Acquiring Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article IV of the Declaration and
Agreement of Trust of the Securities Trust and agrees that the obligations
assumed by the Securities Trust pursuant to this Agreement shall be limited in
any case to the Acquired Fund and its assets and the Global Fund shall not seek
satisfaction of any such obligation from the shareholders of the Securities
Trust, the Securities Trustees, officers, employees or agents of the Securities
Trust or any of them or from any other assets of the Securities Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its Chairman of the Board, President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: LORD ABBETT SECURITIES TRUST
on behalf of Lord Abbett Global Income Trust
By: _______________________________
Name: _____________ Name:
Title: Secretary Title:
Attest: LORD ABBETT GLOBAL FUND, INC.
on behalf of the Income Series
By: _______________________________
Name: _____________ Name:
Title: Secretary Title:
19
<PAGE>
EXHIBIT B
Comparison of Certain Investment Policies and Restrictions
Comparison of fundamental and certain non-fundamental investment policies
and restrictions of Lord Abbett Global Income Trust (the "Acquired Fund"), a
series of Lord Abbett Securities Trust, the Income Series (the "Acquiring
Fund"), a series of Lord Abbett Global Fund, Inc., and of the Acquiring Fund as
proposed to be revised.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
------------- -------------- ------------------
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
SHORT SALES/MARGIN.
Non-fundamental Fundamental Non-fundamental
Subject to certain exceptions, the Subject to certain exceptions, the The Fund may not make short sales
Fund may not sell short or buy on Fund may not sell short or buy on of securities or maintain a short
margin. margin. position except to the extent
permitted by applicable law.
Fundamental
The Fund may purchase securities on
margin to the extent permitted by
applicable law.
- -----------------------------------------------------------------------------------------------------------------------
BORROWING.
Fundamental Fundamental Fundamental
Subject to certain exceptions, the Subject to certain exceptions, the The Fund may not borrow money,
Fund may not borrow money. Fund may not borrow money. except that (i) the Fund may borrow
from banks (as defined in the 1940
Act) in amounts up to 33 1/3% of its
total assets (including the amount
borrowed), (ii) the Fund may borrow
up to an additional 5% of its total
assets for temporary purposes, and
(iii) the Fund may obtain such short-
term credit as may be necessary for
the clearance of purchases and sales
of portfolio securities.
Non-fundamental
The Fund may not borrow in excess
of 5% of its gross assets taken at cost
or market value, whichever is lower
at the time of borrowing, and then
only as a temporary measure for
extraordinary or emergency
purposes.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
UNDERWRITING.
Fundamental Fundamental Fundamental
The Fund may not engage in the The Fund may not engage in the The Fund may not engage in the
underwriting of securities, except underwriting of securities unless it underwriting of securities, except,
pursuant to a merger or acquisition deemed to be an underwriter in pursuant to a merger or acquisition
or to the extent that, in connection selling a portfolio security requiring or to the extent that, in connection
with the disposition of its portfolio registration under federal securities with the disposition of its portfolio
securities, it may be deemed to be an laws. securities, it may be deemed to be an
underwriter under federal securities underwriter under federal securities
laws. laws.
- ---------------------------------------------------------------------------------------------------------------------------
LENDING.
Fundamental Fundamental Fundamental
The Fund may not lend money or The Fund may not lend money or The Fund may not make loans to
securities, except that it may lend securities, except that it may lend other persons, except that the acqui
portfolio securities not in excess of portfolio securities subject to certain sition of bonds, debentures or other
30% its total assets, subject to certain limitations and enter into short-term corporate debt securities and invest
limitations. The Acquired Fund also repurchase agreements with sellers ment in government obligations,
may enter into certain repurchase of securities it has purchased. commercial paper, pass-through in
agreements. struments, certificates of deposit,
bankers acceptances, repurchase
agreements or any similar
instruments shall not be subject to
this limitation, 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.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
------------- -------------- ------------------
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
REAL ESTATE/COMMODITIES.
Fundamental Fundamental Fundamental
The Fund may not deal in real estate, The Fund may not deal in real The Fund may not buy or sell real
oil, gas or mineral leases, estate, oil, gas or mineral leases, estate (except that the Fund may in
commodities or commodity commodities or commodity con vest in securities directly or
contracts, excluding the securities of tracts, excluding the securities of indirectly secured by real estate or
companies which deal in or hold real companies which deal in or hold interests therein or issued by
estate or commodities. real estate or commodities. 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).
Non-fundamental
The Fund may not invest in real
estate limited partnership interests or
interests in oil, gas or other mineral
leases, or exploration or other
development programs, except that
the Fund may invest in securities
issued by companies that engage in
oil, gas or other mineral exploration
or development activities.
- -----------------------------------------------------------------------------------------------------------------------
DIVERSIFICATION.
Fundamental Non-fundamental
None stated. Subject to certain exceptions, the The Fund will be required to meet
Fund may not buy securities of one the diversification rules under
issuer representing (i) more than 5% Subchapter M of the Internal
of its gross assets or (ii) more than Revenue Code.
10% of the voting securities of such
issuer.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
------------- -------------- ------------------
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
INVESTMENT IN A SINGLE
INDUSTRY.
Fundamental Fundamental Fundamental
The Fund may not concentrate its The Fund may not concentrate its The Fund may not invest more than
investments in any single industry. investments in any single industry 25% of its assets, taken at market
(the Fund does not intend to invest value, in the securities of issuers in
more than 25% of its assets in any any particular industry (excluding
one industry classification it uses for securities issued by the U.S.
investment purposes, although such Government, its agencies or
concentration could, under unusual instrumentalities).
economic and market conditions,
amount to 30% or conceivably
somewhat more).
- --------------------------------------------------------------------------------------------------------------------------
RESTRICTED/ILLIQUID
SECURITIES.
Non-fundamental Fundamental Non-fundamental
The Fund may not invest more than The Fund may not invest more than The Fund may not invest, knowingly,
15% of its total assets in restricted or 5% of its total assets in restricted or more than 15% of its net assets (at
illiquid securities, except, subject to illiquid securities. the time of investment) in illiquid
state law, for securities qualifying for securities, except for securities
resale under Rule 144A of the qualifying for resale under Rule
Securities Act of 1933, deemed to be 144A of the Securities Act of 1933,
liquid by the Board of Trustees. deemed to be liquid by the Board of
Directors.
- --------------------------------------------------------------------------------------------------------------------------
MORTGAGING AND
PLEDGING OF ASSETS.
Non-fundamental Fundamental Fundamental
Subject to certain exceptions, the Subject to certain exceptions, the The Fund may not pledge its assets
Fund may not pledge, mortgage or Fund may not pledge, mortgage or (other than to secure borrowings, or
hypothecate its assets. hypothecate its assets. to the extent permitted by the Fund's
investment policies, as permitted by
applicable law).
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN
SECURITIES OF OTHER
INVESTMENT COMPANIES.
Non-fundamental None stated. Non-fundamental
The Fund may not invest in the The Fund may not invest in the
securities of other investment securities of other investment
companies, except as permitted by companies, except as permitted by
the 1940 Act. applicable law.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
------------- -------------- ------------------
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
OPTIONS.
Non-fundamental Fundamental Non-fundamental
The Fund may not buy or sell puts or The Fund may not buy or sell puts The Fund may not write, purchase or
calls except that it may write covered or calls except that it may write sell puts, calls, straddles, spreads or
calls and enter into closing purchase covered calls and enter into closing combinations thereof, except to the
transactions, buy, hold or sell rights purchase transactions, buy, hold or extent permitted in the Fund's
or warrants, and hedge foreign sell rights or warrants, and hedge prospectus and statement of
currency. foreign currency. additional information, as they may
be amended from time to time.
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN
SECURITIES OF ISSUERS IN
OPERATION FOR LESS THAN
THREE YEARS. Fundamental Non-fundamental
Non-fundamental The Fund may not invest in The Fund may not invest in
The Fund may not invest in securities securities of issuers which, with securities of issuers which, with their
of issuers which, with their their predecessors, have a record of predecessors, have a record of less
predecessors, have a record of less less than three years continuous than three years continuous
than three years continuous operations, except through operations, except if more than 5%
operations, except through subscription or other rights limited of the Fund's total assets would be
subscription or other rights limited to to 5% of net assets. invested in such securities (this
5% of net assets. restriction shall not apply to
mortgage-backed securities, asset-
backed securities or obligations
issued or guaranteed by the U.S.
Government, its agencies or
instrumentalities).
- -----------------------------------------------------------------------------------------------------------------------
OWNERSHIP OF PORTFOLIO
SECURITIES BY OFFICERS
AND DIRECTORS.
Non-fundamental Fundamental Non-fundamental
The Fund may not hold securities of The Fund may not hold securities of The Fund may not hold securities of
any issuer if more than1/2of 1% of any issuer if more than1/2of 1% of any issuer if more than1/2of 1% of
the securities of such issuer are the securities of such issuer are the securities of such issuer are
owned beneficially by one or more owned beneficially by one or more owned beneficially by one or more
officer, Director or Trustee or by one officer, Director or Trustee or by officers or Directors or by one or
or more partners of the underwriter one or more partners of the more members or partners of the
of investment advisor if together they underwriter or investment manager underwriter or investment advisor if
own more than 5% of the securities if together they own more than 5% together they own more than 5% of
of such issuer. of the securities of such issuer. the securities of such issuer.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
------------- -------------- ------------------
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
TRANSACTIONS WITH
CERTAIN PERSONS.
Fundamental Non-fundamental
None stated (but certain restrictions The Fund, subject to certain The Fund may not buy from or sell to
may exist under applicable law). exceptions, may not buy securities any of its officers, directors, partners
from or sell them to its officers, or employees, any securities other
directors, or employees or its than shares of the Fund's common
investment adviser or sub-adviser or stock.
their partners, directors and
employees, other than capital stock
of the Fund
- -----------------------------------------------------------------------------------------------------------------------
SENIOR SECURITIES.
Fundamental
The Fund may not issue senior None stated. Fundamental
securities The Fund may not issue senior
securities to the extent such issuance
would violate applicable law.
- -----------------------------------------------------------------------------------------------------------------------
PURCHASE OF WARRANTS.
None Non-fundamental Non-fundamental
The Fund may not purchase The Fund may not invest in warrants
warrants in excess of 2% of net if, at the time of the acquisition, its
assets which are not listed on the investment in warrants, valued at the
New York or American Stock lower of cost or market, would
Exchange. exceed 5% of the Fund's total assets
(included within such limitation, but
not to exceed 2% of the Fund's total
assets, are warrants which are not
listed on the New York or American
Stock Exchange or a major foreign
exchange).
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 24, 1996
Acquisition of the Assets of
Lord Abbett Global Income Trust, a series of
Lord Abbett Securities Trust
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
by and in exchange for Class C Shares of
Income Series, a series of
Lord Abbett Global Fund, Inc.
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
This Statement of Additional Information, relating specifically to the
proposed transfer of the assets of Lord Abbett Global Income Trust (the
"Acquired Fund"), a series of Lord Abbett Securities Trust (the "Trust"), to the
Income Series (the "Acquiring Fund"), a series of Lord Abbett Global Fund, Inc.
(the "Global Fund") in exchange for Class C shares of the Acquiring Fund and the
assumption by the Acquiring Fund of the liabilities of the Acquired Fund,
consists of this page and the following described documents, each of which
accompanies this Statement of Additional Information and is incorporated herein
by reference:
1. Statement of Additional Information of the Acquiring Fund dated May 1,
1995.
2. Statement of Additional Information of the Trust dated March 1, 1996,
insofar as it relates to the Acquired Fund.
3. The financial statements of the Acquiring Fund for the fiscal year ended
December 31, 1995, and the report thereon of Deloitte & Touche LLP, independent
public accountants, contained in the 1995 Annual Report of the Acquiring Fund.
4. The financial statements of the Acquired Fund for the fiscal year ended
October 31, 1995, and the report thereon of Deloitte & Touche LLP, independent
public accountants, contained in the 1995 Annual Report of the Acquired Fund.
The financial statements referred to above are incorporated herein in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting. This Statement of Additional Information is not a prospectus. A
Proxy Statement and Prospectus dated the date hereof relating to the
above-referenced matter may be obtained without charge by writing the Acquiring
Fund at the address set forth above or by calling 1-800- 874-3733. This
Statement of Additional Information should be read in conjunction with such
Proxy Statement and Prospectus.
B-1
<PAGE>
PART C
Item 16. Exhibits
11. Opinion of Debevoise & Plimpton as to the legality of securities being
issued and Consent; filed herewith
17. Prospectus and Statement of Additional Information of Lord Abbett
Securities Trust, dated March 1, 1996, incorporated herein by
reference to Post Effective Amendment No. 10 to Registration Statement
on Form N-1A of Lord Abbett Securities Trust (File Nos. 33-58846 and
811-7538) filed on or about February 29, 1996.
C-1
<PAGE>
SIGNATURES
*Post-effective amendment No. 1 to this Registration Statement has been
signed on behalf of the Registrant in the City of New York and State of New York
on the 24 day of April 1996, who certifies that this Post-Effective Amendment
No. 1 meets all the requirements for effectiveness under paragraph (b) of Rule
485 under the Securities Act of 1933, as amended.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By:/s/ Ronald P. Lynch
---------------
Ronald P. Lynch
Chairman of the Board
*Post-Effective Amendment No. 1 to this Registration Statement has
been signed by the following persons in the capacities indicated and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Ronald P. Lynch Chairman of the Board
- ------------------------------- and Director 4/24/96
Ronald P. Lynch
/s/ Robert S. Dow President and Director
- ------------------------------- 4/24/96
Robert S. Dow
/s/ John J. Gargana, Jr. Vice President and
- ------------------------------- Chief Financial Officer 4/24/96
John J. Gargana, Jr.
/s/ E. Thayer Bigelow Director
- ------------------------------- 4/24/96
E. Thayer Bigelow
/s/ Director
- ------------------------------- ----------
Stewart S. Dixon
/s/ Director
- ------------------------------- ----------
John C. Jansing
/s/ C. Alan MacDonald Director
- ------------------------------- 4/24/96
C. Alan MacDonald
/s/ Director
- ------------------------------- ----------
Hansel B. Millican, Jr.
/s/ Thomas J. Neff Director
- ------------------------------- 4/24/96
Thomas J. Neff
/s/ E. Wayne Nordberg Director
- ------------------------------- 4/24/96
E. Wayne Nordberg
C-2
<PAGE>
/s/ Thomas J. Neff Director
- --------------------------------- ------------
Thomas J. Neff
EXHIBIT INDEX
The following exhibits are filed as a part of this Registration Statement
pursuant to General Instruction G of Form N-14.
Exhibit Page
Number Description Number
- ------ ----------- ------
(11) Opinion of Debevoise & Plimpton as to legality of securities
being issued and Consent
C-3
Exhibit 11
[Letterhead of Debevoise & Plimpton]
April 24, 1996
Lord Abbett Global Fund, Inc.
The General Motors Building
767 Fifth Avenue
New York, New York 10153
Lord Abbett Global Fund, Inc.
Registration Statement on Form N-14
-----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Lord Abbett Global Fund, Inc. (the
"Registrant"), a Maryland corporation, in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, of a Registration Statement on Form N-14 (File No. 811-5476)
and Post-Effective Amendment No. 1 thereto (as so amended, the "Registration
Statement"), relating to the issuance of shares of the capital stock of the
Income Series (the "Acquiring Fund"), a series of the Registrant.
Such shares are to be established and designated as the Class C shares (the
"Class C shares"). The Class C shares are to be issued to Lord Abbett Global
Income Trust (the "Acquired Trust"), a series of Lord Abbett Securities
<PAGE>
Lord Abbett Global Fund, Inc.
Page 2
Trust (the "Securities Trust"), a Delaware business trust, pursuant to an
Agreement and Plan of Reorganization (the "Acquired Trust Plan") between the
Registrant, on behalf of the Acquiring Fund, and the Securities Trust, on behalf
of the Acquired Trust, substantially in the form of Exhibit A included in Part A
of the Registration Statement. Such issuance of the Class C shares is to be
made in connection with the acquisition by the Acquiring Fund of the assets of,
and the assumption by the Acquiring Fund of the liabilities of, the Acquired
Trust.
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records, certificates and other instruments and have made such other
investigations as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below. We have not, however, undertaken any
independent investigation of any factual matter set forth in any of the
foregoing.
Based on the foregoing, we are of the following opinion:
Assuming that the Acquired Trust and the Acquiring Fund duly execute and
deliver the Acquired Trust Plan, that the Acquired Trust Plan and the
reorganization provided for thereby are duly approved by the shareholders of the
Acquired Trust, that the transactions contemplated by the Acquired Trust Plan
are duly consummated and that the charter documents substantially in the forms
of Exhibits 1(d), 1(e) and 1(f) to the Registration Statement are duly approved
and filed with the State Department of Assessments and Taxation of Maryland, the
Class C shares issued pursuant to the Acquired Trust Plan will be legally
issued, fully paid and non-assessable.
We understand that the authorized shares of capital stock of each series
and of each class of each series of the Registrant are sufficient for the
issuance of the Class C shares that would be issued pursuant to the Acquired
Trust Plan if the closing under such Plan took place today. The foregoing
opinion assumes that if, pending such closing, additional authorized shares are
required, the Registrant will amend its Articles of Incorporation to provide for
such authorized shares.
<PAGE>
Lord Abbett Global Fund, Inc.
Page 3
This opinion is limited solely to the federal law of the United States and
the Maryland General Corporation Law as in effect on the date hereof and the
relevant facts that exist as of the date hereof. Without limiting the
generality of the foregoing, we express no opinion concerning other laws of the
State of Maryland, including the securities laws of such state, or the laws of
any other jurisdiction other than the United States. No assurance can be given
that the law or facts will not change, and we have not undertaken to advise you
or any other person with respect to any event subsequent to the date hereof.
We are delivering this opinion to you and, without our prior written
consent, no other persons are entitled to rely on this opinion. We consent to
the filing of this opinion as an Exhibit to the Registration Statement. In
giving such consent, we do not thereby concede that we are within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933 or the Rules and Regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
